>> the market is secular. >> you haven't been talking enough about how resilient corporate versatility has been. >> my models say go. >> the rally is done. >> the big equity and fixed income moves that we saw were driven by recession fears. >> this is "bloomberg surveillance." jonathan: coming into tuesday on an eight a winning streak on the s&p 500, the longest daily winning streak of the year so far. live from new york city this

morning, good morning, good morning. "bloomberg surveillance" starts now. equity futures are positive once again. it is the longest daily winning streak going all the way back to 2004. the lead quote for the team here in the last 24 hours comes from scott rubin or, the pain trade for equities is higher and the bath of being bearish at the beach into a labor day barbecue party is high. lisa: not just because everyone wants to have fun but because this is the right kind of meltdown, not just coming from big tech or a small and select group of names. the s&p 500 had a new record high yesterday even though the market cap ended up about 1% away from the all-time high. it's the right kind of rally. jonathan: validated by the fundamentals over the last week or so. you have heard this bank to bank, an economist to economist.

we are slowing, but the fundamentals didn't point to a slump. slow and steady, not fast and furious. this came from months ago, cyclical data continuing to defy recessionary fears. lisa: it's not just what we saw with jobless claims coming in below expectations and retail sales coming in strong, but when you look at the earnings, the growth is beyond mag seven with expansion of profit margins in a way that we haven't seen in several quarters with sales gains that we haven't seen for a couple of years. these are kinds of green shoots that people want to see in a rally that goes beyond the hopeium we saw earlier in the year. jonathan: turning the volume down on the drama this week, before we get to that speech i've got thoughts from donald trump, someone we called fed chair donald trump a few times. he called the team of bloomberg,

sitting down with mark and asking questions about the federal reserve, revealing his position on where he stands. there have been comments made to the journal, remember the one from april where there might be an incoming trump administration looking to blunt the power of the fed and have influence over it. "presidents can't talk about interest rates, but i have good instincts, but that doesn't mean i'm calling the shots and it means i should have a right to be able to talk about it like anybody else. annmarie: he said he talked about it in the past and was able to jawbone the fed. it's murky and foggy on where he stands on the fed because of that report from april, but we caught up with scott at source global saying that he would challenge the journal to release the report on the executive branch having more of an influence on the federal reserve

. this is different, though, from what we heard from him earlier in the month where he said he had better instincts and i got, so he should have a say, no he saying he thinks it's fine for presidents to voice their opinion, which we have seen from presidents. lisa: a hard thing with this election cycle in general. jonathan: one of many. lisa: this is true. [laughter] what do you take on its face and what's a flavor to put out there, a vibe? this underscores that. there's a pretty big difference between trying to pull the strings and say i should be the fed chair versus -- i'm a human, i happen to be president, i've gotten opinion. those are two different things. the fact that they can be elated on both sides of shows how we don't understand policy. jonathan: fives and policy, through the hour. if you are just joining us, we

are just about positive on the s&p. yields coming in just a touch after a ton of dollar weakness over the last few weeks. euro-dollar is back, currency largely stable and pulling back on crude. 7396 on wti. the lineup for this hour, catching up with joe at bank of america on why he doesn't see u.s. recession. at mills on why you should expect more scrutiny of m&a under harris. true redneck as trump calls the harris housing plans a big mistake. we begin with our top story, eight days of gains on the s&p 500 out of jackson hole on friday. joe quinlan, bank of america private bank writing that there's no u.s. recession and the forecast because rumors of the demise of the consumer are exaggerated, investors missing the fact that not all consumers are created equal. joe, let's get straight into it.

what are people missing? joe: the higher income households in the united states, the top 10% account for 20% of overall consumer spending and they are doing fine. they have jobs and wealth from equities and housing. they are spending. they might be coming down a bit, they might be price resistant about a $10,000 airline ticket, but they are out there spending. lower income households are for sure feeling the pinch, but overall the consumer is hanging in there which is why the economy will continue to expand. jonathan: sounds like a lot of people are starting to agree with you. nvidia, big tech is still doing well. six days of gains, rally of 20% over six sessions. the market is starting to get it . you said that clients were so comfortable in cash six weeks ago. are they still, are you seeing

them deploy it? joe: we saw the animal spirits kick in with the downturn but a lot of our clients like the money market funds because of the election and the uncertainty and they are warming up to elections in the fixed income market. some of the mountain of money is starting to move elsewhere. but we are not there yet. like you talked about early on, the election set up is very uncertain going into post-labor day. that's the one big variable holding back the mountain of cash coming back into the equity markets. lisa: is it that they are concerned about a particular policy or do they have no clarity whatsoever and after november you have a flood of cash going into all assets regardless of who wins? joe: honestly, a lot of households can decide who they want. democrats and republicans sitting on their hands waiting. it's that uncertainty about the character, the personality of

policies. the country is divided. clients are waiting to see. they are in equities, they are in other parts of the market. if they get cash on the sideline, they are happy holding it for 5%, but you are right, we get clarity from the election and you talked about it earlier. what you say on the trail versus what you do in the white house are different things and i think there's a big surge of capital coming after the election. lisa: money markets are still attracting a lot of funds. are the election jitters really focused on the longer-term deficit bonds versus equity calls? joe: that's a key issue. when you talk about politics with our clients, the debt in the deficit comes up. who spends more, who drives more debt and how do we service it? it's keeping our clients very concerned and at the end of the day they will be buying u.s. equities.

a lot of our clients are differentiating between politics washington and the real economy, the private sector, technology, energy, industrials. they see real long-term it opportunities in the private sector despite the circus of washington and are kind of differentiating and putting their money where their mouth is by investing. annmarie: when you get asked these questions about who is working for the deficit in who will spend more, what's your answer for your clients? joe: i have no answer. either or. the country is working through financial problems but if you look at the historical speaking, you can make the argument that tariffs wouldn't be good for the economy, he could be inflationary. you could argue more housing subsidies. you can make either case. we make the case that either or, democrats or republicans, the u.s. has work to do when it comes to getting their financial house in order. how do you do that? you grow the economy.

uncle sam has a private sector behind him growing gdp. annmarie: we have reporting that kamala harris is going to maintain the joe biden proposal of raising the corporate tax rate to where it is right now. where you see is going when there is going to be a massive debate on capitol hill next year ? joe: we've spent more than we have in decades and in the second half there will be a reckoning. democrats or republicans. there is a reckoning coming when it comes to finances and i think about retirement, social security, raising taxes. we have to have that debate. there is no doubt about that. we cannot -- our fiscal path, everyone knows, is unsustainable. you can inflate it, you can

grow, you have to raise revenue. investors are coming around to that. they are not looking for anything radical, but the country is ready to have a debate about fiscal revenue the second half of this decade after how much we spent the first half. to your point, to what extent, how large, who pays, who doesn't, that's the debate in front of us, still. jonathan: great to catch up, joe. thank you. we need to get to some earnings. it's tough in home improvement. lisa, we saw with home depot and in lowe's this morning. lisa: full year comp sales are down versus the expected 2% to 3%. interestingly, the shares are not necessarily moving that much on this, cutting for your guidance and talking about the same dynamics we saw from home improvement, as you mentioned. we will get through the other issues but they did talk about the macroeconomic environment because some pressure and it raises the question about how

much this is a housing issue and how much this is a weaker consumer, because what we are hearing from the likes of walmart is different from the home depot and lowe's of the world. jonathan: i wasn't choking up over lowe's. just to be clear. lisa: i know how you feel about lowe's. you and home improvement. [laughter] jonathan: housing is a big issue on the campaign trail. there are talks of tax incentives for builders and buyers. we heard that from harris, getting a glimpse of what the trump side thinks about it. annmarie: he doesn't want to come out and say no i won't help the first time buyers. what you see every day is who can out populist the other candidate. that's what it feels like to meet. whether it is taxes on tips, housing, no one wants to go back and say -- child tax credits, that was a longtime democratic goal, now it seems that republicans want to extend it.

no one wants to say to the middle class know, the government won't help you. jonathan: later in this hour we will catch up with drew on this story. elsewhere this morning with your bloomberg brief, dani burger. dani: antony blinken said that benjamin netanyahu has accepted a cease-fire proposal to stop the war in gaza. saying the next step is for hamas to say yes. he called it a bridging agreement, acknowledging that not everything is spelled in detail in before the comments he called at the best and maybe last opportunity to free hostages taken in the attack. he is now traveling to egypt and qatar for more talks to determine the next steps. the european union is raising tariffs on tesla imported from china, saying that tesla was made in the country will be subject to an additional levy on top of the additional duties on the cars. meanwhile, proposed tariffs on

other carmakers have been revised. they are each facing additional duties, 6%, 19%, 17% respectively and the parties have requested hearings on the proposal. apple will make the most expensive iphone -- iphone pro and promax models this year in india for the first time and foxconn will start assembling them within weeks of the launch. the push into production out of india is a major step to try to diversify their output beyond china. that is your brief. jonathan: thank you. up next, biden pushing the harris agenda. >> selecting kamala was the very first decision i made when i became the nominee. it was the best decision i made in my whole career. she will continue to lead america forward, standing up for jobs, standing up for workers, growing the economy. jonathan: that conversation,

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will create a healthier world tomorrow. better questions. better outcomes. jonathan: live from new york city, welcome to the program. equities are unchanged on the s&p 500. earnings in the next 24 hours. you will hear from tj max and target, getting a feel and a read on what's happening to the consumer in the u.s. you heard this from lowe's and home depot, they have to cut guidance. home improvement is a real struggle in this country. lisa: how much of it is because people are paring expenses and how much of it is because they have already built all of their garden sheds and potential infrastructure for children during pandemic. how many home improvement projects can you do? at a certain point people want to spend on trap -- travel. it's a post-pandemic rolling ball moving away from home improvement.

jonathan: every time you cover these stories, it sounds personal. it's like you built the deck yourself. lisa: maybe. maybe i did. how many do you need? jonathan: home depot, lowes, there's another one. biden pushing the harris agenda this morning. >> selecting kamala was the very first decision i made when i became our nominee. it was the best decision i made in my whole career. they will continue to move america forward, creating more jobs, standing up for workers, growing the economy. lowering the costs to american families so they have a little more breathing room. kamala and tim will continue to take on corporate greed and bring down the costs of food. jonathan: kamala harris looking to raise the u.s. corporate tax rate to 28% from the current 28

-- 21% in response to questions around how she would fund her economic plan. "the overall theme of lowering the costs of key items picks up the shrinkflation mental and takes it a step further, meaning more scrutiny on m&a transactions. ed joins us now for more. if you were to construct a trade on the back of these comments, would it be long homebuilders and short consumer staples? ed: long homebuilders on down payment assistance but for the first time i really seen a push to have actual supply-side additional housing units. when we add in the child tax credit conversation that seems to be bipartisan, that's a nice boost for consumer spending. if he were able to go back to where it was where it was an advanced civil monthly payment,

i could bet you that consumer spending is going to go out. especially in low to moderate income households. i wouldn't say this as something that is long housing in short consumer, it would be long both ways, probably. annmarie: there's a proposal for the corporate tax rate being moved to 28%. feels like same plan, different pilot. how do you differentiate the proposals? ed: you are right, when it comes to tax policies, joe biden propose a 20% tax rate when the individual tax rates expire december 31 of last year. i think that this only happens if there is a democratic sweep. i looked to tim walz. in minnesota, democrats have had a tradition of increasing taxes and then winning reelection. they think that some of these tax policies are pretty popular with the american people.

when we look to next year, when the taxes expire, if there is a divided congress, there might still be a bit of maneuvering among republicans. the chairman of the house ways and means committee, jason smith, said that he told his members and that it consistently comes up, the 21% current tax right -- tax rate might be too low in there is openness to raise that amongst republicans. 28% i think would be too high but next year i could see regardless of who wins, especially if it is harris, an increase in the corporate tax rate. to your point about how to differentiate, we still haven't had the sit down with kamala harris, we are only getting those early details. there will be tweaks and breaks, but for the most part at raymond james we are saying that whatever was the biden harris campaign administration is likely to be something harris

will propose over the next couple of months and throughout her administration. annmarie: staying on taxes, a big policy debate. donald trump said he's willing to go as low as 15%. isn't the corporate tax rate especially important for the fact that this is enshrined in law, not sunset like the individual tax enhancements under the trump administration? jonathan: you are right. if congress does nothing, the corporate rate stays at 21%, but 4.6 trillion dollars in other taxes expire on december 31. for a lot of democrats, they are fine to let some of this expire, partly because of the fact that one of the things that expires is the $10,000 cap on state and local tax deductions. they would say that taxes would be going back to what they were when obama was president and it would be a trillion dollar tax relief to blue states like new york, california, illinois.

go down the list. that's where compromise might come in. looking at the corporate tax rate for every 1% change, it raises 100 $3 billion. going up is a trillion dollar tax change. when congress is looking at this, they always get that score and try to see how much money they want to spend or go into deficit and how much they want to raise on the others. when you look at other proposals, calling for an increase in the tax rate to 28% gives harris $1 trillion to possibly use on other priorities. lisa: you've been doing this for a long time trying to scrutinize policies and it's refreshing to look at them to try to analyze it, but at this point in the election is it more theater than substance given the fact that the likes of michael at morgan stanley came out and said that with the democratic national convention expect more political messaging than policy signals. this is about vibes and good

feels rather than anything concrete we could analyze. is that kind of us trying to make something out of nothing with these utterances that probably won't see the light of day depending on the makeup of congress? ed: you are right, the goal of the convention for democrats is to keep the honeymoon going as long as possible. i'm always reminded of that saying in politics. when you are explaining, you are losing. most of the policies out there are the policies of the biden harris administration were things that will be very well pull tested. usually you get a balance out of the convention. donald trump didn't get a bounce . partly because democrats stole the balance by switching biden for harris. if they can get the balance. -- balance, that -- bounce, they

are hoping to expand the map and win some crucial swing states. seeing if they can win in november. explaining the details is getting wonky and from a political perspective it doesn't help them that much. jonathan: do you think that the protesters in chicago could steal the limelight if it is about vibes? ed: one of the most notable parts of the speech last night from biden is that the protesters have a point. democrats know that in 1968 that the divide that occurred in chicago for the democratic party was a generational shift away from democrats. protesters came fewer than expected. trying to tamp down on that disunity historically within the democratic party.

that would keep the good vibes going. they know that's the biggest threat. jonathan: we will see how the week works out. ed mills, thank you, sir. he had in chicago. played for the next two months. lisa: that's when i go canoeing in jackson hole, because evidently that won't be a while either. jonathan: are lisa: you taking tk? lisa:big time. [laughter] that's what i want to see. jonathan: will he sink the boat? lisa: whoa, whoa. [laughter]

jonathan: eight day winning streak on the s&p 500, looking to make it day nine. equity futures are positive by zero point 06% on the nasdaq, the 10th of 1%, longest daily winning streak of the year so far. if you make it day number nine, we are talking about the longest daily winning streak going back 20 years. a ridiculous rally. lisa: nine straight days of gains when we begin with this meandering can we make it another day and then the data

drips into say yes, this economy is broadening out. a lot of people say that it ultimately lasts with non-pork -- and on payrolls in september. that will continue the inflation and the market not breaking down with a consumer that can keep spending. jonathan: sounds wonderful. september 6 is just a circle to, it repeatedly goes back to that. equity market, all of these moves at the mercy of whatever we see. lisa: i wonder how much that will change as people talk about cpi or auxiliary data. i mean at a certain point you've got other things coming into play, but at this moment because of the lack of certainty, yesterday we had the leading economic indicators coming out and it was disappointed but nobody talks about it. everyone pushes it away because it is not a major indicator or jobs. are we going to continue with that kind of sense? jonathan: we will hear from t.j.

maxx and target on thursday. look out for that. looking to the board, front end of the curve at the moment. the two-year is well anchored. really well anchored going into this federal reserve get together. lisa: i love the narrative shifts that we have seen. there was a time a few weeks ago where people were talking about a hard landing in the fed cutting aggressively but now there's increasing pushback from officials going in against the rate cut talking about the strength of the economy but the need to reduce interest rates simply, to keep the same restrictiveness with inflation coming down. it's the feel of immaculate disinflation returning again, which is why you have a well anchored to a year with risk assets doing well. jonathan: taking a look at dollar-yen, strength on the board just a bit after quite a few weeks. we are back down to 140 six.

this story from the team out of tokyo in japan, boj releasing research papers highlighting the persistence of inflationary pressure in the economy and the take away for a lot of people is the idea that another interest rate hike might be on the table. the reports came with the standard disclaimer that the views belong to the office and don't reflect the official stance, but it has encouraged talk overnight. lisa: basically this one paragraph, business price behaviors shifting amid intensified upward pressure on wages. just of those words, upward pressure on wages is enough to get people excited about potential rate hikes. jonathan: with more strength on the screen. under surveillance this morning, one of our top stories, antony blinken saying israel excepted a cease-fire proposal in gaza. the next step is saying yes, now traveling to egypt and qatar to

understand what their leaders are hearing. now is the time to finally get this done, there's this big opportunity to close a deal. annmarie: i big question is does this mean that benjamin netanyahu has given his negotiators the room needed to potentially make the agreement? this comes at a time when it is critical for the democratic party to shore this up. what happened yesterday when biden spoke to the dnc? thousands in chicago some of them going through the fence. there were arrests. it's a huge issue going into the election. a pressure right now, i keep saying this is a last ditch effort, they know they need to get this done. lisa: i hope that they do get something done on all sides because there is so much suffering right now and the more that you can resolve that, there are human lives on the line. at the same time, people throwing skepticism on how willing they are to negotiate. jonathan: we have come close

before and ended up with no deal and we are coming close now and hope that we get a deal. donald trump, defending his criticism of the federal reserve, in an interview with bloomberg he said that the president and talk about interest rates, i have good instincts, doesn't mean i'm calling the shots but it means i have the right to be able to talk about it like anybody else. you mentioned this earlier this morning, drawing a distinction between a change in policy and just saying i'm going to talk about it but ultimately it won't mean much. lisa: traditionally a lot of candidates will say a lot of things and you have a sense of what to take seriously and what not to but it is increasingly difficult to tell. it is so light on policy and so light on where the party will coalesce, it's challenging to understand policy versus rhetoric in this just muddies those waters. people saying it's just noise and him trying to cater to a certain group of people and him

wanting to actually do it, that can still be there. you can have your cake and eat it too and it's less clear what's policy. annmarie: that independence has become a hot button issue. a lot of this started in april when the journal came out with a report saying that there were plans being drawn up, document being developed for a trump 2.0 administration, the white house to have more influence on fed decision-making processes. jonathan: what did we call that with foreign policy strategic ambiguity? lisa: the ever present state of affairs in washington? [laughter] jonathan: exactly. lows, delivering a disappointing outlook, cutting its full-year guidance as the housing market has consumers on the sidelines with big purchases on hold and comparable sales expected to fall from 3.5 percent to 4% with a previous range estimate of 2% decline. we've said this a few times already today, it's an echo

repeat of what we saw from home depot last week. lisa: they did outperform, reducing their full-year forecast with bright shoots under the hood. this was a pretty beaten up sector year today. it's not like one of the big winners is casting cold water. will people go back to building de? the big question. cks jonathan: would you like to build some more decking? this is so personal to you. i know that. [laughter] companies raising the supply center for data centers, mary powell is the ceo of a solar roof top company saying that the u.s. needs the equivalent of 34 new nuclear plants over the next five years to meet rising demand. mary is with us around the table. good morning to you. great to have you with us. first of all, what is a utility exec doing as a large rooftop installer?

>> bringing more resilient and affordable energy across america. as a utility ceo back in 2000, 2005, 2006, it was so painfully obvious to me that the utility grid itself was not a socioeconomic solution for the long term for america with the pressures on costs and climate events. it was becoming clear that we would end up where we are, which is 100 billion spent last year, trillions on the horizon, no solution in sight to lowering costs for americans, delivering resilient power. jonathan: talk to us more about the initiative you would like to see across the grid when it is super stressed and demand is high. mary: what i would like to see happen is what we are doing expanded dramatically. part of why i'm passionate about what we do is we just it one million customers, representing

a billion people with the ability to generate and store clean energy and supply it back to the grid when it needs it. we are doing data across america . we just did a proof of concept pilot using ford f1 50 lightning's showing how if you have that plugged into your book as your garage you can support the grid and make it more affordable in resilient for all. the vision has always been the same. it's what i always did as a utility ceo, proving that having distributed assets across america and help be the solution for bringing down the costs of the grid in the future. we've been talking about this with policymakers, how independent in the u.s. be while trying to provide renewable energy that is affordable to the united states? a lot of the supplies coming from china to create solar panels and renewable energies, how much does the industry hinge on ongoing access to those

materials and supplies from china? mary: from a supply chain perspective the story has gotten stronger and we are feeling good about robust supply from solar storage. with the inflation reduction act and the domestic content matters and that, what you are seeing is jobs, factories expanding in america. we expect to have access to more american-made panels in the future and we are also already seeing significant benefits in the storage space relative to that. my view is that what we do is the ultimate in energy independence. not just for helping america become energy independent, ultimately, but for those consumers. it's really powerful to have this sense of security, safety, and resilience in your own home when you are generating and storing the energy. you talked about the ira and there is a massive policy backdrop to this and people talk

about the biden administration be more friendly to renewable energy. how vulnerable is the industry to significant policy shifts depending on who gets into the white house? mary: from a foundational perspective, remember that when president trump signed the extension of the itc that benefits the adoption of solar across the america, the inflation reduction act has benefited states very broadly. a group of governors, republican governors just signed a letter saying that they really support the continuation of the inflation reduction act because they are seeing jobs in their states in the kind of development that was expected. so, we are feeling that when you do something that benefits americans, chances are those that represent americans will want to see the incentives continue. annmarie: have you seen an

uptick of retrofitting these homes because of these subsidies? mary: 100 percent. what you see is in the space of low to moderate in,, low energy, multifamily house a and. we are seeing it opening up the total addressable market with it becoming affordable and accessible to even more americans. you know, at the end of the day, our customers are saving money on average. again they are having a more energy independent and resilient way to power their homes and lives. that's very powerful. hitting one million customers looks like the beginning, from my perspective. annmarie: to the point about the supply chain, what is 60% tariffs or 10% from around the world, what does it mean to your business? mary: it wouldn't be a positive move in the sense of overall costs, but remember the panels are relatively, when you look at the total costs stack, it's a smaller percentage of the pie.

it is something that we will absolutely address and work our way through if we have to face that. again, it wouldn't be a positive for the industry, but we also look at it as something we have had to deal with in the past and we find ways to navigate and move forward. jonathan: let's finish what we started, 34 nuclear plants, how many of those should be built? mary: maybe none? a huge part of why i felt it was so important to embrace distributed generation as a utility executive's i saw firsthand how hard it was to build anything anywhere. it's not getting easier. actually, what's happening is it's getting harder every single year. which also means it's getting more expensive, because there is even more you have to do. i built the state's largest wind farm. it was not large by energy standards and needs.

it took four years and a lot of, a lot of time and money to build it in a state that actually really embraced renewable energy. so again, these solutions, the big solutions that are needed are hard and expensive and in many cases, particularly in the world of transmission, they are still talking about projects they talked about 20 years ago. jonathan: i'm going to walk away from this conversation fearful, you say we need 34 plants over five years to meet the rising demand, but say that we might get none, what kind of crisis could we see in this country? jonathan: we will continue to see utility -- mary: we will continue to see utility solutions come to the table but that's why i believe that this modern and innovative solution is so powerful. jonathan: fill the gap, do you think? mary: what we are doing now can

power san francisco for several hours. we are scaling at a solar level of seven gigawatts a year and installing storage in the context of a couple of gigawatts hours per year. as we scale and as america liens into those innovative technologies, 100% it can be a powerful impact. jonathan: this is an ongoing conversation, appreciated, we will catch up. let's get you up to speed on stories elsewhere with dani burger. hey. dani: the investigation continues into the deadly yacht accident off the coast of sicily. jonathan blumer is among one of those missing, along with tech entrepreneur mike lynch. the italian coast guard confirmed at least one person has died. authorities believe that the ship hit a waterspout, a form of tornado that hits over a body of water with cast and crew members

on board. the easing cycle continues in europe. lowering borrowing costs for the second time since may. signaling more cuts than previously, adding two or three more this year with a weaker outlook in sweden and abroad. the market has already been pricing in more substantial cuts as inflation under shoots the 2% target. edgar bronfman junior has made a 4.7 billion dollar rival bid to take over paramount, offering to purchase the redstone family national amusements for $1.75 billion with investment funds into paramount, complicated by the already deceptive offer from sky dance. he's expected to offer that his proposal is better because it will cause less dilution. jonathan: i don't know about you, i refuse to discuss that story. no more paramount. obviously. carry on. we all refuse to. lisa: you know how i feel about

it. jonathan: get it done. next, the harris housing plan. lisa: my administration -- >> my administration will provide first-time homebuyers with 25,000 dollars to help on a down payment with a new home. all to help more americans experience the pride of homeownership. jonathan: that conversation, up next. you are watching "bloomberg surveillance." ♪

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jonathan: stocks on the s&p 500 posited by 1/10 of 1%. the bond market yields are not doing much. just about unchanged. under surveillance this morning, the harris housing plan. >> by the end of my first term, we will end the housing shortage by building 3 million new homes

and rentals. my administration will provide first-time homebuyers with $25,000 to help with the down payment on a new home. all to help more americans experience the pride of homeownership. jonathan: donald trump responding to the housing policy, telling bloomberg that the plan to provide $25,000 to first-time homebuyers is a big mistake and would cart -- cause a shortage in housing, adding that he is considering help for first-time homebuyers. drew, you are the expert. how realistic is it we could build 3 million new homes and rentals in four years? drew: good morning, look, it's good to see housing getting attention this election cycle. it matters for so many americans. good to see it at the forefront.

there is still a lack of details on the plans on how we will build as many houses and make it affordable. there has been discussion of opening up federal lands. details remain to be seen you know, as it relates to the $25,000 for first-time homebuyers, i think you run into the issue of where you exacerbate the problem you are trying to solve. we don't have to look back to see that. when you put that type of money in the pockets of consumers, prices tend to rise. you can expect to see that if consumers were given this kind of relief, it exacerbates the inventory shortage and raises home prices, so that's a concern. it also -- annmarie: it also might be bipartisan, trunk called it may be a big mistake but also said he might do it. if this was to be a policy out of washington, you think this

would increase demand and then potentially increase the costs of buying a home? drew: certainly. i think that when you increase the purchasing power of the buyer, you will have sellers that realize that and raise prices. it's also going to create more demand from the buyers and you will see the inventory shortage that we see in some markets exacerbated. i definitely think that's a significant consideration. lisa: i'm curious about where we are in the housing market. we've gotten pretty dire data in terms of sales volume. we still see prices increasing on average for homes, and we are seeing some pretty bleak earnings reports. first from home depot and then this morning from lowes. how much is this people having already done all of their do-it-yourself projects and they are exhausted with it and how much is it a lack of capacity or willingness to invest in homes

because there is this stasis, this ice world going on in the housing market? drew: when you talk about home improvement specifically, there are a couple of factors and most importantly is the housing market, below 4 million annualized rate on home sales, lowest in decades. when you don't have turnover in the housing market, you lose the investment associated with a homeowner fixing up the house before they sell it or someone making alterations as soon as they buy it. at the same time with the industry is going through over the last several quarters is a shift away from goods to services. looking at durable goods spending particularly in the home improvement space, we started to normalize that in the good news is we have kind of gotten to the more normalized pre-pandemic level so we think that will have less of an impact going forward. housing is certainly something that will continue to weigh in with interest rates pulling back you can see some relief.

you saw it with the mortgage application data on the resale and new home fronts. exiting the year, if rates could continue to play nice in the low 6% range, we think that you will start to see benefit on the margin. lisa: that was fantastically couch. well behaved rates going to the 6% level. how much do benchmark rates have to dropped, do mortgage rates have to drop for us to see a housing market resembling the activity that we used to see. not just talking about the go-go days of bubbles, but just a healthy market where you could buy and sell a home? drew: great question. we saw open rates got to the 5.5% range, that that was the sweet spot. we heard that from builders. more traffic started to come through the door. we think that is the number you are looking at. that said, you still have a lot of people out there who currently possessed mortgages

below 4%. we don't expect a massive unlocking of demand if those rates continue to fall it at the same time you have to remember it's not just rates, its home prices up more than 40% since pre-pandemic levels. affordability will remain a challenge until we can somehow unlock more supply. we are seeing that in markets and we think that the way that the market is evolving is more regional. when rates rose in the second half of 22, there was more weakness on the west coast in the higher price markets with adjustments there and now we are starting to see that in the southeast. markets coming to mind are florida and even texas where more inventory is coming and we think that could put downward pressure on prices. jonathan: drew, classic policy dilemma, appreciate the update. mismatch between demand-side and supply-side. demand-side solutions are immediate. you get the money straight up,

all at once, go out and buy a house. supply-side incentives take much longer to play out if you get high prices. good politics, popular, economically complex. lisa: talking about cold hard cash feels good but then you think about it, if everyone has it, guess what happens to prices. extrapolated further. everyone talking about incentives more broadly, how much are we talking about a higher inflation rate going forward in general because of the consumer ability to spend? annmarie: when asked about it, come true -- trunk called it a mistake but then said he also might do it. populism on both sides. jonathan: you see this again and again, saw it in the u.k. as well, same story. coming up next, j.p. morgan asset management, classico from bloomberg intelligence, and an economic advisor to kamala harris. you "bloomberg surveillance "bloomberg surveillance are

watching -- you are watching "bloomberg surveillance."

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>> the inflation genie has not been completely slain. >> the data is driving the reassessment. >> no doubt, the fed will go in september. >> the idea of getting 30 to 40 basis points priced in is tough to ask for. >> those who think that the rate cut will change main street is overestimating the power.

>> this is "bloomberg surveillance." jonathan: live from new york city, good morning, good morning. the second hour of bloomberg surveillance begins right now. equity futures on the s&p unchanged on the nasdaq, positive after a stellar run in the equity market with six days of gains on nvidia. stock is up 24%. eight days of gains on the s&p 500. the index is up by 8% over that time and the equal weight is coming into tuesday at all-time highs on the s&p 500. lisa: highlighting how this has been a broad-based rally, which is what a lot of people wanted to see to confirm the health of any potential rallies people are seeing. key question here is -- can one jobs report took you know that or is this basically going to be the era where rates come down into strength, essentially what the market is betting on.

jonathan: we keep coming back to the same calendar of 11th for cpi and the reserve with a lot of politics in between. annmarie: lisa will be at jackson hole. i'm headed to the dnc. for this market, what should they be focusing on? it's data-dependent but every day we are getting policy proposals in then the committee for fiscal responsibility comes out to say that this is what that will add to the deficit. at what point will the bond market be pushing back on that? jonathan: lori was here yesterday and we asked her if there was anything to critique and she basically said no, there is nothing to critique. it's hard to analyze something with no details. lisa: this is the problem, we keep hearing rhetoric and vibes. i'm frustrated, i'm not going to hide it. everyone thinks i'm hiding it, but i'm not. you want to get a sense of what we can work with other than gossip and political noise.

it is not a lot right now, so you wonder at what point you can take it seriously and at what point you can't. you have to just go with economic data at this point, and that has been good. what you hear from earnings is a consumer not falling off a cliff . target might give us the same flavor as walmart but really, the big event is next month, when we get jobs, cpi, in the fed cutting. jonathan: no one thinks you are doing a good job of hiding it. [laughter] turning to something else as well, lows cutting guidance on soft diy spending. similar thing from home depot. difficult to get a lead on the consumer when retail sales doing well but that you get these conflicting reports. lisa: it's difficult unless you drill in and look at the specific industries that are moving not in sync. the housing industry has traditionally been the outlier of consumer spending.

why do people spend on new d ecks?? it's a home, a new home -- i'm just using this as an example -- jonathan: sure, sure. you didn't buy a new home or a you deck. lisa: but when you have a frozen housing market, you start to get lower earnings. it's idiosyncratic, but i hate losing -- using that word. annmarie: quinlan did a good job talking about the bifurcated consumer. the top 10% of u.s. households are responsible for 20% of u.s. spending. it's two different economies depending on where you are on the income scale. jonathan: moses down. the broader story is equity futures are posited by 1/10 of 1%. a bit of a lift. we have given you that statistic a few times this morning. a day winning streak. day nine, that's the longest in 20 years, absolutely phenomenal.

not a small rally, either. we are talking a rally of 8% on the s&p 500. the bond market, just about unchanged. the euro, going absolutely nowhere. your lineup at this hour looks like this with bob michele, j.p. morgan asset management with his outlook. jeanette lowell with biden passing the torch to harris. mike powell, economic advisor to harris on policy. the s&p 500 having its longest winning streak as they weigh the path ahead. michael at j.p. morgan asset management, writing that they expect 25 races point -- basis point cuts at each meeting and then quarterly in 25. their consistent rate cutting cycle is the essential ingredient for a soft landing. bob joins us with more. everything and nothing has changed since we last spoke.

we last spoke two days before the scary jobs report that we all moved on from. what is your take on where we have been? bob: but so much has changed, we were sitting here on fed day saying that to get through the meeting, you can wait and watch the data it have a do over before the september meeting. here we are at jackson hole, they should take to do over. they looked at the employment data, it has gotten softer. the inflation data came into where they would like to see it. i would like to see the jackson hole conference set the cop -- time and expectations for the market. we are going to cut rates. this is the shape it will take, these are the rates. on the other hand, i think they should just do nothing. the data has come their way, they have guided us to a feathery soft landing. just don't mess it up.

star cutting rates in september and get on with it. jonathan: you are talking about what is needed, the essential feathery soft landing. 25 basis points through 2025, it's a consistent rate cutting cycle that you have described. why is that the essential ingredient? what's neutral, what's accommodative? what do we need for this economy? bob: inflation has moved from here to here and it is still on a downward trajectory. looking at the three month annualized rate with cpi, there is some of the 2%. inflation has come down a lot. you are hearing from the retail marketers announcing earnings and there is consumer pushback on pricing. they are choosing what they are spending on and that is hitting the top line. looking at the labor market, slack has been created.

we have unemployment up at 3.4%. we are not at 3.4 percent. wages, wages dropped from 3.9% to three point 6%. if you leave restricted rates at the level they are not currently, it worsens the labor market and that you have got not a problem with inflation, but the pace of disinflation. you have to start release -- relieving the pressure. lisa: why haven't we seen a more aggressive slow down if this is because of rates? i was looking at data compiled by julian emanuel well, seeing the s&p 500 second quarter year-over-year earnings growth at 10% with profit margins expanding. how does this scream markets on the brinks of falling off if you don't get rate cuts that are significant? bob: well, there is still a lot of money sloshing in the system.

i'm talking about slowing down the trend and bringing policy in line with stabilizing growth and inflation. what julian is talking about is hey, there is still a lot of economic activity out there, his right. mary earlier was talking about everyone accessing the wonderfully named inflation reduction act to spend and invest in solar. there's all that money still in the system. it's creating underlying levels of economic activity and it's one of the things you need to ensure a soft landing occurs without recession. lisa: you said that jay powell should do nothing but telegraph the path ahead. bob: that's what i want, i want a clear roadmap. lisa: but you don't expect them to do that because there is no clear advantage to him doing that. bob: no. lisa: what's the roadmap that he

could give for clarity when you're talking about that income that has helped to fuel price inflation that could reprice itself next year depending on the policies we may or may not get from both candidates? bob: that keeps the 27 trillion dollar economy operating at $27 trillion, which is ok, but how do you build growth on that? you need the housing market to reignite again. there is clearly a demand for housing in the u.s. bring down rates, that pulls them mortgage rates in it suddenly makes housing affordable and you get the first time buyers to step in with all of the things that you talk about, building decks, it begins to happen. it's one of the things that ringing rates down does. it's not that a order point cup doesn't do anything, it actually does a lot. a lot of businesses and

households fund themselves off of the floating-rate market. annmarie: with what you love to hear this week that's unlikely, i detailed economic plan from kamala harris, what do you make of what we have heard so far? bob: gideon c is in the same position as the fed. the data has come their way to big way and they are well ahead in the polls, so just get through the conference with a lot of platitudes in euphoria, take that momentum. i don't think that we are going to see a detailed economic agenda. i think that 25,000 in housing credits is a great idea. who ends up paying the bill? does it get sent to the treasury? is there more funding that comes out? probably. will it get through a split congress? maybe not. annmarie: trump was president before and they are incumbent. how do you think about these

individuals being in the white house, either? bob: we have gone through times where the administration has had very clear views on what they wanted to do, but if you have a split congress, they have a very different mindset and it's very difficult to get legislation through. i think that the real focus should be looking at congress, looking at the house, looking at the senate to see how the elections go. jonathan: looking at your calls to wrap it up, overweight on credit, i want to pick up on the duration. i want an idea from you on where you think that yields are heading. this time next year, what kind of a yield curve are we looking at? what are you looking for? bob: intuitively, i want to say that where'd yields are today, the fed has to bring rates down. that's 200 basis points.

that's a lot and it's pretty normal in a cutting cycle. cutting cycles are usually coincident with recession. we don't see recession, but 3.5% fed funds rate, that seems to be a fair level for the current price. when i look at what is sitting in cash out there, i think about every single client conversation i have every day. doesn't matter if it is institutional or in wealth management, doesn't matter if it is domestic or international. everyone is in for a way to get into the bond market and frustrated beyond belief because they never got to buy yields at 5% to 6%. once the rates start cutting down -- coming down and money market funds turn lower, the money will come in and they are not thinking about buying a 10 year with a 2.10 steepener flatten her.

the market is thinking putting me in a general fund. have an income fund? put me there. what kind of etf do you have? the money comes in to the market in a big way. asset managers might sit there and say that yields are rich, i'm going to be underweight duration by a quarter of year, so they are still buying and the money is coming in. i worry that yields could get down to 3% or lower. 3.0 on 10. jonathan: has that process started? bob: it -- it's -- it started it just the tiniest drip of ways, which i have always turned around and said -- look where yields are. everyone is telling you that you don't like your. we don't like them here. look how far to the fed funds rate it is, look how cozy 5.5 percent is. then who the heck is buying to

take the entire yield curve down through 4%? there is a lot of buying of money that is leaking in, but it hasn't come in in earnest, the process hasn't started. jonathan: bob, it's fun. bob michele there, very interesting calls on what is happening and what will happen over the next year or so. updating your stories, here's dani burger. dani: eli lilly putting the risk of diabetes to patients taking the shop by 30%. those with obesity or prediabetes, those with the highest dosage lost 23% of body weight. eli lilly said that the detailed results would be presented at an upcoming medical conference. the alaska air group and hawaiian holdings are closer to finalizing their merger.

the antitrust review time has now expired but the deal is subject to review from the department of transportation, which can impose conditions. trump downplaying criticism that he undercut fed autonomy. in an interview yesterday he said he thinks it's fine for a president to talk and it doesn't mean they have to listen. trump called the harris plan to offer homebuyers $25,000 a big mistake but then went on to say that you might offer help to shortly homebuyers. that's your brief. jonathan: big mistake, might do the same thing, got it. [laughter] biden, passing the torch to harris. plex because of you we have had one of the most extraordinary four years of progress ever. when i say we, i mean kamala and me. jonathan: that conversation, up next. good morning.

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jonathan: equities are just about positive, already off the longest daily winning streak of the year so far. biden, passing the torch to harris. >> because of you we have had one of the most extraordinary four years of progress ever. when i say we, i mean kamala and me. she is tough, she is experienced, she has enormous integrity. we need you to win back that house of representatives. and above all, we need you to beat donald trump. jonathan: the dnc kicking off its second day with barack obama kicking off the slate of

speakers. harris and tim walz traveling to a rally in milwaukee. jeanette low writing that her policies are generally in line with those of biden, but lean a bit more progressive. this allows there to be more of a policy debate, but we will also have those primary candidates proposing price controls and greater tariffs. jeanette joins us for more. let's start talking about the distance between not just harris and trump but harris and biden and then we will try to get some details, which have been a struggle. as you hear these words coming from the sitting president, when i say we, i mean kamala and me, does that help or hurt? >> one of the biggest things that we saw last night was the unity of the party at the convention. biden got probably not the night that he wanted to, but he definitely got the sendoff, the big cheers and the raucous applause, the thank you's and

all of that. it shows definitely the unity within the party as it moves from biden to harris you had the democrats improving policy proposals in you saw the biden plan. harris is going to start to make changes to her policies to make them different from what we had under the biden administration, but in general you are seeing a continuation of what his policy proposals were and she is trying to take them a bit further. there is not a lot of daylight between the policies. annmarie: one area where we could see kamala harris debate what to do is that the ftc. some of her big donors want her to ditch lina khan, but that was a biden pic and progressives want to keep her. any understanding of what the ftc could look like under harris as president? >> i think that, you know, so if you look at her background as a

prosecutor she is definitely kind of looking to do some antitrust, but anyone coming in may want to have their own people in the various agencies. that might even just depend on how she feels lina khan is currently working in that agency and what she wants to do moving forward. so, i don't have a good idea on if she could make a change of the top but that is something that harris could be quite focused on as it goes back to her price gouging proposal from friday and it is still something she is looking at doing. annmarie: price gouging, this is something that the republicans have taken a hold of to criticize harris. you are at the dnc, but are democrats saying? i have heard economists saying that this is just rhetoric and not a reality. what are you hearing from the dnc when it comes to this? have they fallen short on this idea because of the criticism it has gotten within their own party?

>> the biggest thing is democrats focusing on affordability issues. it's been an election on inflation for most of the cycle and most are concerned about the affordability issue, concerned about the fact that trump pulls better on the inflation economy, so trying to create proposals for that. some democrats saying that this is just more about antitrust and making sure there is not large mergers in the food industry. so, i think that some are walking it back and others are saying it's not that big of a deal. but the devil is obviously in the details if it comes to pass and this is just one of those proposals that's out there standing for something at this time. jonathan: exploring this further, what's the difference between what they are proposing and what we have? >> when you look at things like

biden and harris, for instance, they both had a housing down payment assistance. harris went further from 10,000 to 25,000. a lot of those things were difficult to get done when biden was in office if we had democratic control in the house and senate. self, what will the control look like in 2025? that will be important for what harris can get done and there are things you can do at the executive level without congress, but congress will be important if you want to do things like paid leave or the like, where harris is much more focused. those are much more her bread and butter issues for the agenda. jonathan: what's happening down ballot? do you have that same momentum like you have at the top of the ticket? >> this is one of the things people are really watching, his hair is going to provide good momentum for down bob -- down ballot races in the house, where

democrats have the opportunity to win back the chamber? they are looking at whether or not fundraising numbers are seeing support with voters that were less enthusiastic about a biden ticket the more enthusiastic with harris. they are coming home and less likely to focus on not voting or voting for a third party with increases around african-american voters, young voters. that momentum and help the democrats in races where there are not even swing states, like california and new york, that is where democrats have the opportunity to take back the house. it might be a slim margin. 2025 could give us just a slim margin, so that could be a tight congress impacting the policies of the next president. jonathan: jeanette, thanks for getting there on time into chicago, some of our colleagues struggled to do the same thing. [laughter] annmarie: like i control the weather?

[laughter] jonathan: just adding. she can't control it either. annmarie: jonathan: maybe she drove? jonathan:maybe she's that dedicated. she drove. annmarie: i'd like to see you drive to your next big. [laughter] jonathan: no one wants to be driving. annmarie: doesn't have a license. jonathan: no one wants that either. coming up, a wave of imports rivaling pandemic levels. stellar numbers, absolutely phenomenal, coming out of the west coast and elsewhere. that's next on the program. from new york city, this is bloomberg.

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jonathan: an eight-day rally on the s&p 500 taking gains toward almost a percent over that period, and the bullishness continues. strong earnings and macro saying perspective soft landing. all of that skews the s&p 500 to 6000 by year end. i mentioned this quote earlier this morning, the pain trade for equities is higher. the bar for being bearish at the beach going into a labor day party is high. lisa: we had a dip. it lasted about a day and people

are aggressively buying it. it was this feeling that maybe things were getting washed out. some of the imbalances in markets. not fully, but enough for people to get excited. the key question to me, can the s&p outperformed the index level market cap? that indicates some of the healthy broadening out people have been looking for. jonathan: equal weight s&p at an all-time high coming into tuesday. a range-bound bond market, which is music to the ears of a lot of people who have seen equities go viciously one way to the next. the two year, down about a basis point this morning, but this is basically where we have been anchored now. just in and around 4%. this came yesterday, it is important to reflect on the fed speak we have had. the fact that someone hawkish is discussing cuts in less than a month implies a 25 basis points reduction in september would be

a unanimous decision. the more relevant question would be whether a simple majority would endorse a supersize 50 basis point move. we have to ask, how important is unanimity to chairman powell on september 18? lisa: so far it has been very important. we have seen a lot of pushing and pulling to try to wrangle people together. one reason people are looking at three minutes tomorrow is to see how seriously they discussed a 50 point rate cut. the eager question is, why should jay powell do anything more? blake quinn at rbc put this out. jackson hole, why be anything but boring? if you canoeing talk about things you will be less than boring. he says, powell has nothing to gain from micromanaging expectations. this is the key, that the debate is really going to hinge on what we get on september 6. jonathan: this does not have to

be too dramatic. talk a little more about risk management, you know? at the risk-management stories are bigger compared to where it was two years ago. we have super low unemployment and superhigh inflation going back to, what was it, august 2022? the eight-minute pain speech? different place now, so we can think about start insulating ourselves from further weakness down the road. lisa: if you want to understand the trauma of a jackson hole speech -- you are not going this year. i will be there with tom. we will be hiking together and talking to fed officials. not much by way of fireworks is expected, but it is going to be interesting on a longer-term trajectory what they plan in terms of range of inflation and how they view the changing role of fed policy. this is my pitch, this question about whether they are preemptive with rate cuts. jonathan: there is a line alike

from the federal reserve. an answer protection is worth a pound of cure. i wonder if the same thing applies at this jackson hole meeting. lisa: what happened to the idea of a whole neutral right? -- neutral right? the delta between this rush of cash into the rest of the fixed income market from some of these incentive programs we are curing -- we are hearing. that is not where we are right now. jonathan: you can leave that discussion in wyoming. let's turn to dollar-yen. we are negative by about .1%. that is a touch of the yen strength. it was a different story during the session. the boj released a pair of research papers highlighting the persistent -- persistence of inflationary pressure and a lot of people started to read between the lines.

lisa: the bigger question is, does this indicate how much the carriage rate is over for japan, shorting the yen, given the fact that every tea leaf highlights how far the bank of japan has gone from this era of do-nothing and keep rates low? people are going to view this, even though there is this stick -- this disclaimer, these views are not representative of the bank of japan. still, the fact that they talk about price pressures was enough to cause the next leg of a rally in the yen. jonathan: under surveillance this morning, alaska air and hawaiian moving closer to finalizing a 1.9 billion dollars merger after the justice department declined to challenge it. the airlines still need approval from the department of transportation, which has to determine that the acquisition is in the public interest. annmarie: this is notable because this is probably the biggest hurdle to go through.

if you are jetblue and spirit waking up this morning you are like, how are they able to do this? part of it is because they did not share as many of the same routes and they think this means more competition, especially if you are a consumer in bama -- in hawaii. also the fact that jetblue and spirit, the concern was that jet lou would not keep that pricing that spirit had for that low-income individual. but this is a big deal because we have not seen much m&a activity, given what we have seen from this boj. jonathan: do you since this is an exception rather than the rule? i'm thinking of kroger and what might not happen with albertson as well. lisa: annmarie: although kroger is now saying they have a plan that this would cut grocery prices. so, maybe under this antitrust review maybe that will help them. but this does feel like an exception.

this does seem like an exception because of the differences in both of these two combining forces. lisa: not to be cynical, you could say someone going on vacation to alaska or hawaii, it is not the staple that is going for groceries. that ends up getting jacked up a little bit they can still choose to go on that vacation or not hers is going to a grocery store and, you know, buying oranges. jonathan: you think people should sacrifice their trip to hawaii? lisa: i don't think so. but i think there is a less, may, imminent feeling that this is going to affect consumer prices for the masses in the same way. jonathan: i think a lot of people would agree with you. apple's first india-made iphone pro models are coming the ship. foxconn will begin assembling the devices within weeks of their global launch in the fall. lisa, this is a story we have been tracking for quite a while.

de-risking supply chain. it is a long-winded way of saying, moving out of china. lisa: tim cook, the biggest diplomat between the united states and china, talking about the importance of china both with risk act to the consumer base and the production base, but just quietly moving away from production in the region. in the consumer is also pushing back against them. and they also build some sort of consumer base in india that has traditionally gone for a lower-prized type of phone? these are some of the questions that have been plaguing apple. this move seems to suggest they are starting to shift. annmarie: although it is tiny still. the vast majority of these phones are going to be made in china. but whether you talk to republicans or democrats, they are still talking about friend-ensuring. because the political salvos between washington and beijing are unnerving see suites. jonathan: tim cook is moving

things around without making too much noise. because you don't want to upset the chinese given how much of a presence you have in that country. lisa: but you have to take action. if you don't take action you are going to be left flat-footed. jonathan: some stunning numbers coming out of the weekend. the port of l.a. and long beach, which account for one third of all u.s. container imports, posting their third-strongest month ever in july. volume is rivaling the all-time high set during the pandemic. lee klaskow of bloomberg intelligence joins us now. i want to talk about what is behind it, but i want to start with how much better they are handling it. we have met with gene seroka over the years. can you walk us through the productivity enhancements these ports have gone through? lee: yeah, so, like, a few years ago there was a lot of issues with the throughput because

there was a lot of congestion due to the surge in demand following the pandemic. where we are today, the ports in the u.s. have gotten a lot better over the years. but, you know, they still are very slow to embrace technology and automation. relative to some of their counterparts in asia and in europe. but, you know, what it seems like from our vantage point is that the ports still have plenty of capacity within them to continue to keep that throughput at good levels. you know, the surge we are seeing, it is obviously a great number. the increase was pretty sizable, but there is a lot of things going into that last year in july volumes were down around 20%. so you have a much easier comparison. that is not to say there is nothing to be seen here. there is definitely good demand. a lot of that demand is coming from seasonality returning.

since the pandemic we have not seen normal seasonality and we are beginning to see that. some of that is being driven by the fact that the de-stocking cycle seems to be done and retailers are getting ready for back-to-school. obviously the holiday season in the fourth quarter. lisa: let's go there. is this a matter of seasonality or is this stockpiling ahead of a policy shift next year? lee: that is a great point. what we have seen recently is there is a lot of labor issues going on in north america, in canada. there are teamsters that work on the railroads that might be striking, or the rails are actually closing up their networks or winding down their networks. ahead of the strike this thursday. then you have the port workers

in the east coast. their contract ends at the end of september, and there does not seem to be an agreement yet. hopefully that will happen soon what happens is a lot of schippers, because they know about these contracts when they're coming due is, these labor contracts, is they will move freight from the east coast to the west coast, or western canada to the southwestern states. you are seeing a movement. also during the pandemic, as i mentioned, there was a huge queue at the ports in southern california, and the east coast ports won a lot of share because of that. because they had significant amount of capacity not being used. what we are seeing now is a shift back to the west coast. that can be driven by a lot of things. some of that has to do with what is going on in the red sea before it made sense to global -- to go through the suez canal. but now he cannot go through the

suez canal because of the geopolitical risks. maybe they are trying to go back to a transpacific race. we have seen that in those transpacific rates which are up around 170% from last year. so, there is a lot of things going on. you have seasonality. have the labor issues, and you have the destocking cycle that appears to be over. jonathan: phenomenal numbers coming out of those ports. lee klaskow of bloomberg intelligence. here is dani burger. dani: the democratic republic expecting mpox vaccines from the u.s. as soon as next week. the central african nation's health ministry said this outbreak has affected more than 16,700 people and cost -- caused 570 deaths. the u.s. pledged doses earlier this month. gold is climbing this morning to trade at yet another record high at more than $2500 an ounce. the precious metal has surged more than 20% this year, helped

by expectations of rate cuts due to political concerns and central banks buying up gold. ubs says it takes next the price to hit 2700 -- 2700 dollars by mid-2025. anna trump says he would consider getting rid of a 7500 dollars tax credit for ev purchases if he is elected. in an interview with reuters the former president said he would think about having elon musk icap cabinet position. trump called the tesla ceo "a billion guy." that is your bloomberg brief. jonathan: the harris policy pitch. vice pres. harris: as president i will be focused on creating opportunities for the middle class. together we will build what i call an opportunity economy. jonathan: we will talk about that next on the program. you are watching bloomberg tv. ♪ ♪

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jonathan: stocks on the s&p 500 still doing ok. your positive by .1%. quite a run already. the longest winning streak of the year so far from monday into tuesday. can we make it today nine? under surveillance this morning, the harris policy pitch. vice pres. harris: for too many people, no matter how much they work, it feels so hard to just be able to get ahead. as president, i will be laser focused on creating opportunities for the middle class that advance their economic security, stability, and dignity. together we will build what i call an opportunity economy. jonathan: here's the latest. vice president kamala harris

looking to rebrand bidenomics. zeroing in on the middle class. she is pledging to expand caps on prescription drug costs and eliminate price gouging. mike pyle is currently an economic advisor for kamala harris and joins us now. it is good to see you. also worked in the vice president's office. there are already laws around price gouging, particularly at the state level across this country. what would a harris administration look to achieve that we don't already have? mike: you're right to point to those state laws. if you look at the principles the vice president is thinking about when she thinks about it in an action like this, there are a few. one, this has got to be focused on the food and grocery industry. two, this is really about emergencies. this is about very acute moments of dislocation, like after hurricane or national disaster. three, going to build off of

those state laws. there are 40 state laws on the books they go to price gouging in emergency situations. red and blue states alike, that is going to be a model for her. she is also really focused on bad actors. this is not price controls. there is no preset price metric or other quantitative target. it is really bad action. and she recognizes that the food industry is one in general that needs more competition and she's going to work to spur small providers to work on the competition. jonathan: let's unpack some of that piece by piece. i want to talk about emergency and how you defined it. would you define a pandemic as an emergency? at what point did it start and in? i'm looking to how this rule might be applied going forward. mike: the type of emergency we have in mind is much more like an acute natural disaster. a hurricane, a very acute

dislocation. the pandemic at some level was everything for two or three years. that is very different than a very acute dislocation on the back of a natural disaster. annmarie: do you or the vice president right now see companies that are price gouging? mike: like i said, i don't think there are emergency conditions out there, so it is hard to say this is anything that would apply in the here and now. she does look at the food and grocery industry written large, sees where places have a good deal of concentration, and as a result is focused on sparing -- spurn competition more broadly, including with small providers, on the agriculture and grocery side. if we can spur more competition that is going to lead to lower prices for consumers. that is different than going after bad actors in the course of an emergency. annmarie: there is a debate within the democratic party, especially the donor class and progressives, about this exact

thing, competition, antitrust, and whether or not lina khan should still be the head of the ftc. where is vice president harris on that now? mike: the vice president is focused on unifying the democratic party and beating donald trump. that is her core focus. she and the president over the last 3.5 years have built a governing record across a whole range of issues. she is proud of that record, but right now her focus is on prosecuting the case for the next 78 days. annmarie: lee: you've briefed her every day as economic advisor before you moved to the west wing. at one point when she was running to be president in the primary she was against fracking. now she is not. she supported eliminating private health insurance. she says she is not. do you know which kamala harris we are going to get? mike: she has built a 3.5-year governing record with the president. if you look at issue after

issue, she and the president have made choices to advance the interests of the middle class, to advance the interests of working people in this country. look at the record she has built. that is the starting point for how you should think about how the vice president would govern when she is president. lisa: there is a question about the feasibility of proposals. i'm thinking about the housing market and the subsidies for people to be able to make a down payment. as well as adding 3 million homes. a question of whether you can do that in such a way that giving money to people for down payments will not just prop up prices and lead to less affordability. how do you square that circle? mike: the most important thing you heard the vice president talk about with respect to housing affordability is saying, you know, we have a crisis of building in this country. got to get more units built. we need to be ambitious with respect to what we are going to target in terms of eliminating that affordable housing construction gap.

and we are going to work with developers across the country to get units built. we are going to work with state governments to knock down barriers to get units built. that is the center of her vision. she also recognizes that as we do that it takes time to get traction. it takes time to get momentum. it takes time to get things built. in the meantime people are still suffering, feeling that pinch of housing affordability. and something like a buyer's credit can make a difference for households struggling to reach the middle class in the meantime. lisa: one question people have is, what we saw during the pandemic was some of the subsidies, some of the money sent to people was done before some of the products were brought online. how do you get ahead of that type of response given that we have seen the difficulty in building homes consistently? the red tape takes time, not to mention the lumber costs. mike: again, i think that is why

it was so important you heard the vice president putting the supplies story at the beginning of the story of housing affordability. i think she is laser focused on recognizing there are barriers across this country, blue states and red states alike, to getting things built. whether it is new initiatives to help builders and developers work alongside the federal government to get things built, whether it is working with state and local governments to punch through red tape, that is going to be our focus. she recognizes that is the key to affordability and it is going to take focused energy to get that done. jonathan: ultimately there is a duration mismatch between how quickly you can stimulate demand and how quickly you can address supply. will we just have to tolerate higher prices in the meantime? is that the outcome of all of this? mike: i think these things are meant to work in parallel with one another. that supply is going to ramp up. you're going to get traction.

there's going to be a lot of focus there. there is a crisis today. working and middle-class families need support today. the vice president has proposed a way to do jonathan: just that talk about taxes? what is a good corporate tax rate in this country? mike: 20% is the proposal for the vice president, supported alongside what she and the president have proposed. jonathan: is she in line with biden as well on what he would have done what the taxes that are set to expire in 2025? mike: if you look at the biden-harris budget you see a range of tax proposals. you see a range of principles around how the tc j expiration should be handled. that is something that as a governing partner to the president the vice president has embraced. jonathan: is the deficit an ongoing concern? mike: you heard from the vice president herself on friday. she pointed to the fact that when you look at the trump

campaign playbook it is extending and deepening tax cuts for corporations on the wealthiest. it is not fully offsetting those with a set of sales taxes on imported goods that will hurt working families. as a result that is going to increase and blow up the deficit. on the flipside, if you look at the biden-harris budget, there is debt reduction, and she continues to believe that deficit reduction needs to be an important part of the pitch. jonathan: we have run out of time. you think the vice president would sit down with lumbar tv and have a conversation about the economy? we would like to make that happen. mike: i think the vice president looks to meet voters wherever she can meet them, and there is a lot of constraints over -- on her time. jonathan: got to make one interview happen. come on. mike pyle. coming up, tracie mcmillion of wells fargo, doug jones, neil dutta, and ed al-hussainy of columbia threadneedle.

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or water pooling near their foundation. you can get ahead of costly damage by protecting your home's gutters today. we're in your neighborhood and ready to help. schedule your free gutter inspection today, call 833 leaffilter, or visit leaffilter.com >> the inflation genie has not been completely slayed. >> it is the data that is

driving the market's reassessment of how many rate cuts need to be done that share. >> the idea of getting an extra 30 to 40 basis points priced in, i think that is a tough thing to ask for. >> those that are thinking this rate cut is going to change main street are overestimating the power of 50 basis points on the street. announcer: this is "bloomberg surveillance." jonathan: what a rally we have seen in this equity market over the previous eight days. it is a rally that continues. 90 minutes away from the opening bell. equity futures on the s&p 500 positive by .1%. on the nasdaq, a little lift as well. another read on the consumer this morning. this time from lowe's. home improvement a real struggle. if you focus on their strength, retail sales, that is where a lot of people are taking comfort from in the last week. it has contributed to quite a equity market rally.

lisa: they shrugged off questions around the housing market as idiosyncratic and pointed out that with walmart we saw no signs of consumers running. we have seen that out of the travel companies as well. will the fed cooperate? we heard from bob michele that the key ingredient was a fed that started to cut interest rates with this spigot of cash in money market funds he saw potentially unleashed. annmarie: macroeconomic environments with these customers saying, they are deferring big projects, the dax that lisa wants to enact. -- the decks that lisa wants to enact. what are the problems we are hearing from that harris campaign? $25,000 going to you to help you by your first home. what would that do if that actually happened to a place like lowe's or home depot? jonathan: we heard from mike pyle just moments ago on this

program, and you got a sense for where they see policy. he wanted to keep talking about supply. we kept coming back with a question, it takes longer to solve the supply issue that it does to incentivize demand. demand you can incentivize just like that. straightaway, immediately. this applies story, when you have a duration mismatch it is the ultimate policy dilemma. in the meantime you have to accept, it is probably going to contribute to higher prices. lisa: i like that you kept going back to it and it was not really a satisfying response. because it takes longer to build a home than to give somebody cash. we have seen this movie before. the key question is going to be, how much is this sending a signal versus actual policy that can get enacted with any real timeframe? how much is this going to be something you are going to message to state leaders rather than passing a 25,000 dollars bonus, or actually enact some type of price gouging mechanism for emergencies?

annmarie: a lot of this is rhetoric. not exactly going to be reality. price gouging was interesting. we have seen a big difference from what is marketed by harris, going after corporations, the blame is on these corporations. mike pyle could not pinpoint a company he sees as price gouging right now. when he said these are going to be in emergencies, you asked a great point. does the pandemic count as an emergency? jonathan: this is where things can get dicey, but my take away was yours. this is a serious walk back compared to what was leaked last week and it sounds a lot like what is already on the books across this country. lisa: which is the reason why you get morgan stanley saying to not expect a lot of policy out of the democratic national convention. or, frankly, much going into the election. because it is hard to know what

to take seriously and what not. what can get enacted, etc. bottom line is, people are looking post-election what does get enacted? you talk about gold, for example, at a new record high. how much does this relate to the deficit concerns at a time when people don't have clarity on that being the one real ramification people can pinpoint echo -- pinpoint. jonathan: there is going to be spending. equity futures on the s&p look like this. we are positive again off of the back of an eight-day winning streak and looking to make it nine. if you make it nine days of gains it is the longest daily winning streak on the s&p going back 20 years. in the bond market, the 10 year, 3.8673. coming up this hour, we will catch up with tracie mcmillion of wells fargo as the s&p 500 continues its winning streak.

doug jones, as d.c. anticipates what a harris look like. and neil dutta on why the pala put could make a combat at jackson hole. -- the powell put could make a comeback at jackson hole. looking for the fed to invalidate the enthusiasm, writing the following. don't get too hung up on 25 versus 50 next month. the important thing is that cuts begin. we expect 100 basis points of cuts this year and another 325 basis point cuts in 2025. before we get to the fed call, i want to start with your market call. get out of bonds, get into stocks both small and large. what is behind that? tracie: good morning. so, what is behind that really is the shift we are seeing, the pivot, if you will, to lower rates. we do expect the federal reserve to cut in september. whether it is 25, whether it is

50 we do expect that cut. we think it is time to move some of the cash out of short-term fixed income. we have been using that as a parking spot for the better part of two years. now it is time to move some out and brought an exposure to equities. lower rates, and we also see a recovery of growth in 2025. in is that combination that we think it's going to help smaller companies. and we are also adding to large caps. that has been a favorite of ours for two years as well. jonathan: what do you say to the bond strategists that say you should take some of that front and further out of the long end and stay in the bond market? tracie: we are doing that too in diversified portfolios. most of our portfolios hold commodities, alternatives. so, with in a diverse -- within a diversified portfolio we are over-waiting -- over waiting

equities and under waiting bonds slightly, but within bonds we are also seeing that we want our investors to move from the long and toward an immediate and shorthand, toward intermediate. we are under waiting both the tales of the yield curve and we are bullying that intermediate space. lisa: can you explain why that is? we just had bob michele on. he was talking about a 3% handle on the 10-year yield. as money from money market money floods in, why do you not see that as feasible? tracie: we think that has some of that cash moves back into the market it will move not only into fixed income, but also into equities and other assets. some of it will stay. if rates are where we expect them to be, if the fed's rate is

where we expect it to be stare, we think some of that cash is going to stay in cash. we think the 10 year is going to be closer to 4% than 3% in 2025. so, we see that as an opportunity to continue to hold bonds in the 4% range, but also moving some of those assets into equities. lisa: you hinted at a dynamic that has been a big debate on this show and beyond. how much of that more than $6 trillion in money markets is going to look elsewhere as rates come down? how sticky is it? how much do you think that either half or quarter is going

to move out to stocks and intermediate bonds, rather than just being an alternative to bank accounts? tracie: we think a lot of those cash assets are what you said. money moved out of deposit accounts into money market funds because of the higher rates. we do not expect the majority of those assets to move into risk assets for out the curve to longer duration bonds because most of it is going to be assets that people want to continue to hold short-term in cash for nearer financial objectives. jonathan: i want to finish on your fed call. i promised you we would come back to this. we expect a total of 100 basis points of cuts this year. say don't get too hung up on 25 versus 50. are you expecting 51 of these meetings? tracie: right now we are expecting 50 at the september meeting, and then 25 at the other two meetings for the remainder of the year.

but, really, that is going to hinge on august's employment numbers. so, we don't think that is going to give us any information on friday, whether they are going to go 25 or 50. but the important -- important thing is they are planning to cut, and that is what markets are hanging their hat on right now. lisa: you think if they did cut by 50 basis points in response to a weaker nonfarm payrolls print that would be good for risk assets or bad for them? tracie: if they cut 50 basis points because of her weaker print that is going to -- because of a weaker print that is going to signal that the economy is weaker than the federal reserve had anticipated originally. so, that is likely to add some choppiness back into markets. we would say that any volatility in markets is a good entry point to purchase more large-cap stocks and build up that small

cap position back to a long-term neutral waiting. jonathan: appreciate the input this money. tracie of wells fargo. finishing up on the call for the federal reserve. looking for potentially 50 on the 18th, at all of that hinges on what happens on october 6 in the payrolls report. there is only four estimate so far but i can give you the median. it is 155,000, which would be a move up from the 114,000 reprinted. -- we printed. lisa: it is going to be exciting not just on september 6, but tomorrow we get the revisions to earlier estimates for the jobs figures. going through march, for the full year. i went to see how many jobs were revised lower him and then we will talk about how to understand the trajectory of some of these numbers. i think there is more play than just september 6, but that is clearly the hallmark moment. jonathan: just how much growth

we have had and what is normal in this world, and what kind of numbers should we be looking for? here is dani burger. dani: hamas says it is keen on reaching a cease-fire agreement with israel. in a statement hamas denied what it said was u.s. claims it is backing away from negotiations. the palestinian group said the recent draft deal was different than what was proposed by president biden in may. the u.s. has called this one a bridging agreement and has said israel has accepted the proposal. donald trump is downplaying criticism that he has undercut the fed's autonomy. the former president said he thinks it is fine for a president to talk and it doesn't mean they have to listen. trump also called harris' plan to offer first time buyers $25,000 a mistake, then went on to say he might also offer help to struggling prospective homebuyers. alaskan air and hawaiian are

closer to finalizing the merger. the waiting period for the antitrust review has expired. the deal is subject to approval from the department of transportation, which can impose conditions to ensure the deal serves customers. that is your bloomberg brief. jonathan: up next on the program, the morning calls, plus doug jones as d.c. tries to identify potential harris cabinet picks. you are watching "bloomberg surveillance." ♪

jonathan: getting you set up for the trading day. counting you down to the opening bell. going into that the scores look like this. the s&p positive by .1%. let's get you some morning calls. evercore raising its price target on palo alto -- palo alto

and removing the cybersecurity firm from its tactical underperform list. the firm highlighting better than expected earnings. next up, baird raising its price target on chewie, keeping an outperform rating. slightly positive in the premarket there. in early trading higher by almost .7%. ubs lowering its price target on estee lauder, maintaining a neutral rating. both top and bottom line recovery is taking longer than hoped for, even with strong fourth-quarter results. that stock is higher by about .3%. a possible harris administration would likely recruit cabinet members from d.c.'s rank-and-file. former alabama senator doug jones is on the shortlist for attorney general. doug jones joins us now for more. senator, wonderful to have you on the program. we are looking forward to the

rest of this week with the d&c in chicago taking center stage. what would you like the focus to be this week for your party? doug: i think we are continuing to focus on the future and not going backwards. we are going to focus on those things democrats have accomplished in almost four years now. jobs. the economy. things moving forward. getting inflation under control. bringing in nato strong, and our alliances together, to fend off putin and russia, and to strengthen democracies around the world. we are going to continue to look forward. what we are going to also do is be joyous and unified. this is something you have not seen in the country for a while. the kamala harris and tim walz are bringing this country together and we are going to continue to build up momentum as we go into november. annmarie: when you look at the polls the top issue remains the economy.

even if kamala harris is starting to tighten the polls, especially in swing states, most voters say they trust the trump administration when it comes to the handling of the economy. how does kamala harris put some different -- distance between her and the current president, who they blame for things like i inflation? doug: i'm not sure she has to put distance between herself and the current administration. most recent polls are showing that people believe kamala harris would do better on the economy than donald trump. you know, they are the same polls that have been doing this for years. i have said before, her nomination gives the democrats and america a reset button. macron opportunity to look. not just looking going forward and the messages she would do in her administration, but a reset button through a different lens. 3.5 years donald trump has absolutely demonized joe biden. and some of the people in this country have seen the

administration's success through those eyes. now they have a reset. in the same messages are getting out there. you hold -- heard her talking about numbers in the prior segment. i think people are going to start focusing in on exactly what is happening and are going to look and determine, are you better off than you were four years ago? the fact is, we are better off. inflation may still be a little bit high, but it has come down. but people are working. the income gap has narrowed. people have jobs, manufacturing jobs are coming to this country. and we have strengthened our ties around the world. i think the united states of america, with all of its bumps in the road, is so much better off today than it was coming out of a trump administration, with covid and joblessness and january 6 and all of the divisions in chaos. annmarie: let's talk about this

potential reset on the horizon for you. the justice department is under fire from trump and allies because they say it is politically motivated. if you were to take on this position you are floated to be the attorney general, how would you ameliorate those concerns and bridge those divisions and bring the country together? doug: i'm not going to talk about any potential harris cabinet. that is so far down the road right now. we have to focus on winning this election. i think people ought to look at what trump would do to the department of justice. look at project 2025. talk about weaponizing the department of justice. taking white career individuals and putting in place those who would do the president's bidding and not just policy matters. saying they would go after whoever they can. if you read project 2025, it is a frightening prospect. i think that is the contrast right now. the next cabinet, the next administration has a lot of work

to do with the american people because donald trump and his movement have so infected the american psyche these days about what -- about norms and our institutions of government. there will have to be a lot of reworking. lisa: there is a question about what is rhetoric and what is policy. that is true with the trump campaign and harris campaign. there is a question about what price gouging means. we were speaking with an economic advisor to her, talking about in emergencies, which is not coming across. we hear about 25,000 dollars for people to build homes. hard to see how that is going to get through. how can you understand what is going to get through? is it the tax raise -- tax rates are going to increase on corporations and there will be a greater focus on what can be done elsewhere in an ambiguous fashion? doug: you have to remember, there is a congress. a president of the united states cannot do everything by executive action.

it is a problem we have god, and it is a closely divided congress in a matter which way the senate or house goes. that is one of the things that i believe the harrison biden administration can do. lisa: there are companies waiting for some sort of clarity in washington, d.c. before engaging in certain projects that could be expansionary and provide new jobs. they are unclear about whether they could emerge. but also in terms of what the parameters are going to be with regulations. how consistent will kamala harris' policies be, should she be elected to president biden? this is a continuation of exactly the same? doug: i don't think it will be basically a continuation. this is a process. she's going to have to be the president for herself. she will have her economic advisors. she will start addressing more, i think, after this convention.

the specifics of everything she wants to do, and let the people judge. i don't think right now you can say one thing or another what specifically she will do. that is going to be a work in progress. she has to deal with congress. she doesn't want to do everything by executive action. that has been one of the problems we have seen so far. when a president comes in and has to undo the actions of another. or wants to. what i would like to see her accomplish after she is elected, and in that period before she is sworn in and in the 100 days after, his work with members of congress on both sides of the aisle. it is not going to be possible to get anything done if the opposing party simply wants to put up a roadblock. so, she has that opportunity. i think with tim walz as her vice president, a very well-liked member of the house of representatives for many

years, i think she has an opportunity to really be active with the congress to try to move legislation forward. annmarie: very quickly, do you still maintain ties with republicans on the upper chamber? doug: i talked to them when i get up there. i see them. we are still friendly. i have a lot of respect for a number of my colleagues that were up there. so many of them worked well with me on any number of pieces of legislation. that is the same kind of spirit i hope they will give kamala harris and she is elected. and whoever works with her on the legislative process. jonathan: the former alabama senator doug jones. project 2025 comes up all the time. how many people have read project 2025? is a 900-page policy book from the heritage foundation. annmarie: i read the spark notes of it. the issue is a lot of the people that drafted it either worked for trump or are very close to

trump, just why the democrats continue to say that this is something that is potentially going to be micron envisioning of trump to point out, even though trump tries to put a lot of distance between them. lisa: on one hand you have trump saying that kamala is a socialist, and then you have the harris camp talking about trump and project 2025, and he's going to throw government out. jonathan: you are enjoying this, aren't you? every second. the opening bell is up in about an hour and five minutes time. he will talk with neil dutta and l how husseini -- ed al-hussainy. this is bloomberg. ♪

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jonathan: 60 minutes away from the opening bell. equity futures just about positive. likewise on the s&p and nasdaq. we have said it a few times this morning. the equal weight s&p 500 is at a record high. yields look like this. we have pulled down across the curve. the curve stevens. we are light on economic data this week. jobless claims on thursday.

we are light on fed speak but if you want a read of the u.s. consumer, there are a few more stopping points. t.j. maxx is one. target is another. a bit more of an offering with what is happening with the u.s. consumer. lisa: it will be if the consumer is still spending. the big companies tend to be taking a bigger portion of the dollar. thursday is also important for jobless claims. last week they actually went lower. the panacea type of data where you get a jobs market that still look strong even with ongoing disinflation. jonathan: claims for thursday, the estimate still so far 2.32. we will see what we get on thursday. over the last few weeks, the drama of a few weeks ago, we have poured cold water on it. we have seen a couple of folks around jobless claims. same thing, claims get higher, same concerns, claims come back

in. payrolls, really important. we have moved so much on any given payrolls friday and then we kind of forget about the revisions that we will get further down the road and we can see some big ones. lisa: if you think about when we were recovering from the pandemic, the revisions made it look a lot better and had those numbers been coming out at the time, the fed would have been acting differently and hiked rates sooner. people are expecting one million jobs to be taken off the total for the year ended in march. that probably does not move the dial because that is the expectation. at what point people start to see a different dynamic in terms of the total labor pool as well as how much momentum we have coming into september 6. jonathan: that will give chair powell more clarity when he delivers his address this friday at 10:00 a.m. eastern time. there is another central bank, the boj with a prospect of further rate hikes, not cuts at

the boj further down the road. we are dialing in at the moment at 146.30. a little more strength. the story continues with dollar weakness over the last four weeks. we could have a fifth week of weakness. lisa: this is a perfect recipe for the bank of japan officials. you have data that confirms rate cuts in the united states along with ongoing global strength at the same time they did give that hike just recently as well as research suggesting that they are still seeing inflationary pressures under the surface, particularly with wages. this is not written by bank of japan officials. they have disclaimers. nonetheless, the trajectory seems to be higher and they are not moving away from that. jonathan: some top stories for you. alaska air and hawaii are close to finalizing the 1.9 merger. the doj is deciding not to challenge the deal but they

still need approval from the department of transportation. the proposed takeover of u.s. steel is backing bipartisan crosshairs. donald trump and josh shapiro reiterated their position to the deal. trump says he will stop it if he is reelected. this is a political potato and no one wants to be a political potato. the u.s. is still exactly that. annmarie: it is exactly that. to the individuals trying to get this done during an election year was not a good idea because this comes down to potentially winning pennsylvania and making sure you get the rank and file union votes to vote for you. the name we do not have yet, the harris campaign declined to comment on her position when it comes to this. i imagine she will lean toward governor shapiro and donald trump as well. this is not happening in an election year. jonathan: this is an extremely hot political potato. donald trump saying he would consider ending a 7500 dollars tax credit for electric vehicle

purchases, saying he thinks tech incentives are not generally a good thing. he also says he is open to naming elon musk to a cabinet or advisory role. on the surface this sounds bizarre. he will get rid of something that is benefiting one of these companies and the ceo of one of these companies would go work in the cabinet. annmarie: it was entries -- interesting when they sat down for their conversation. it felt like elon musk was trying to ingratiate himself with the maga world, saying they cannot demonize the ev world and the idea of sustainability. elon musk said there should potentially be more business leaders having a say in government. secretary elon musk potentially, i don't know. jonathan: is government efficiency, is that what it is? annmarie: jamie dimon also pitched this idea that there should be a cabinet position specifically for business leaders. lisa: again, honestly, fair

enough. i am at a loss. how do you take any of this seriously? in a passing conversation he talks about some of these incentives as being a bad thing. then he says i will put them in. the question i have is who has his ear and what is the goal of the people who have his ear? there is a question about elon musk having his ear. does that mean he will be more amenable to some of these incentives and a more easy regime? it is an open question. some things say yes. some say no. but we are not getting actual policy debates because no one is willing. even with nippon steel, they are making a pitch to the labor union and that will sweeten the pot. politicians will be weighing in to try to cater to a demographic. jonathan: would you like to park this story? let's move on. let's bring in neil dutta. wonderful to catch up with you. we will talk about something far

more interesting, revisions to the sep in september i don't think have been talked about nearly enough. you have mentioned them. how drastic will the provisions be in september versus where we were back in june which feels like a lifetime ago? neil: you know, it's a good question. right now it looks like jd to -- gdp is running above estimates but the most notable revision will be the unemployment rate because it currently stands at 4.3%. that is well above where they thought it would be. it is somewhat higher than they thought it would be at the end of 2025. that is really what is interesting. if you look at their 2025 estimates, they have the unemployment rate at 4.2%, core inflation at 2.3% and the federal funds rate at 4.1%. if you think about that, we are

already above their unemployment rate estimate. over the last few months core pce has been 2.3. when the latest data comes out, it will be below 2%. yet, the fed funds rate is basically at 5.5%. it is kind of like which of these is not like the other. that is why i say we should expect a relatively abrupt about-face in terms of these revisions. if we don't get that, i think there is a risk of increasing concern that the fed may be a little behind. jonathan: we have had a few guests on the program taking encouragement from the date of last week especially retail sales. you called that the exception and not the rule. why do you think we can disregard what we heard last week? neil: it is just a fact. think about all of the hard data

that has been released for july. what started with a bad employment report, we have had weak housing data, we had weak industrial production data, we had a good retail sales report. i think standard business economics, obviously the employment number will get the most weight and the other indicators are secondary. it is important to not get carried away with retail sales. you have to have a fundamental framework for why, why would consumer spending be taking off? if you take the data at face value, it basically means that in july we had an unsalable decline in the savings rate. it is probable that the savings rate perks backup. and you will see consumer spending cooling. there is some interesting details under the surface. i pointed this out to clients. if you look at building material store sales, we see what lowes said and home depot said.

you look at the census data on building material store sales and it is up 5% year-over-year. i do think the retail sales number probably overstates things somewhat. it does not mean the consumer is falling apart but it is unlikely it is sustaining at a real pace. lisa: it seems like the market is on the same pages you -- same page as you. they are expected to cut by more than 25 basis points. 100 basis points by year end even with an economy that does remain resilient, ongoing, may be despite some of the weakness we are seeing. isn't that basically what you are saying? neil: i think there is probably more downside risk in the economy than the markets might appreciate at the moment. the housing market is slowing. if you look at single-family starts, permits, new home sales,

transactions, they are very weak . we do know that construction employment has been a notable upside surprise factor you could say for employment. i wonder how long that lasts. we also had a fairly significant inventory build in the second quarter that probably will not persist in the second half of the year. i think the slowing in goods producing industries at a time when the labor markets are slowing, that has my attention. for the fed, is all you are going to do is string out a bunch of 25 basis point rate cuts, it could type -- take a long time to get to neutral and the further the fed is away from neutral, the more the risk to the economy. i think that is the debate. it is not whether they go in september. that debate is over. when you have neel kashkari

talking to the wall street journal, that debate is basically dead. that is how quickly they get to neutral and where neutral is. given the fact that they are far from neutral and the data has been weaker than expected, i think that supports larger moves at the outset. lisa: how much do you think benchmark rates would have to go down to support the housing market in the way that you think is necessary to keep the economy from falling much more deeply? neil: we need to see 30 year mortgage rates up below 5.5%. the issue is why hasn't the housing market perked up. if you look at 30 year fixed-rate mortgages, they are basically where they were last spring, around 6.5%--ish is the latest reading. you have not really seen any meaningful increase in home sales, purchased amount. the reason is when inflation is

4.5%, a 4.6% mortgage looks ok but when inflation is 4.2%, it is not so much ok. i think we need to see a decline in mortgage rates. jonathan: would you expect the housing market to seize up for first-time homebuyers because i have the prospect of getting money from the government next year and lower interest rates. why on earth would i buy? neil: that is a good question. if i was a first-time homebuyer, i would not be making my decision on what d.c. may or may not do. it will really be able -- about my employment situation and we know consumers feel worse about their employment situation. expectations for a weaker labor market among consumers are

deteriorating. we are interest rates? that would be the calculus. not a politician promising manner from heaven -- manna from heaven. jonathan: thank you very much. here's a quote for you, "either rates will decry more rapidly or the economy will stabilize and require fewer rate cuts than currently discounted by markets. there is an inconsistency that will need to be resolved in the coming quarters." that quote belongs to ed al-hussainy who joins us now. which outcome are you betting on at the moment? ed: i think neil framed it well. the economy is seeing more downside risk and the pressures to frontload some of this easing , the first option is where i am placing my bets. lisa: we talk about housing as an indios in credit market --

and it idiosyncratic market. neil says that is not the case. there could be some bigger downside. is that what you are looking at as well? ed: housing is one of the most historically interest-rate sensitive parts of the economy. it responded quickly in 2022. we saw housing capex decline. we saw housing construction go sideways. it absorbs those rate hikes quickly. we also saw it sought to recover in the course of last year. it stabilized. in the beginning of this year, it was a positive attitude gdp. the expectation was essentially the housing market would become used to a higher interest rate environment and we would see some recovery. that expectation is not playing out. we are seeing housing decelerate

at the beginning half of this year. the leading indicators are beginning to turn down. that is an important sign that there are breaks being exerted at the moment. lisa: it sounds like you might be more in the bob michele camp than anything else because he sees a flood of cash going in longer duration bonds, not exactly the why behind it but this idea that maybe people are underestimating how much benchmark rates have to go down in order to offset some of this weakness exemplified in the housing market. is that basically the trade that you are making? ed: i don't know if people expect cash to flood the different parts of the market all the time. it never really plays out that way. i think the bid that we are making explicitly is that real interest rates, inflation-adjusted rates are around 2% across the curve at the moment. it is becoming clear to me and

the fed that the economy cannot sustain these rates without being susceptible to a slowdown. so it makes sense to bring them down, closer to around 1% over the course of the next year. we are betting that the markets are under appreciating how quickly that will move. jonathan: do you mean 100 basis points or actually moving rates down to 1%? ed: about 100 basis points in terms of 10 year real yield. about 185 to 2% at the moment. that is really the beginning of the process. that is assuming that the economy stabilizes. that is roughly neutral. if the economy needs significant assistance, you could see those real interest rates go down closer to zero. in fact, they were negative back in 2020. we are talking about the first part of the process, bringing rates from a place where they are restrictive and exerting breaks in the economy to roughly

flat, roughly neutral. jonathan: we appreciate it. ed al-hussainy of columbia threat needle with an interesting call on the bond market. what is gold sniffing out as we have these conversations about the scale and degree of rate cuts with gold sitting close to another all-time high as i look at the screen? lisa: i have gotten a couple of messages about this. one of them is talking about the deficit. perhaps people are looking at gold as a haven asset because the deficit will remain ever present. there is this feeling and we heard this over the past two weeks that fixed income is where the volatility will be going forward. whether it is the election cycle or this question around the fed's response function exactly how effective their monetary policy can be in the long end when they really have control over the front end, these are some of the things in addition to central bank buying that have. pushed people to gold. . jonathan: new all-time highs. let's get an update with dani burger. dani: u.s. antitrust regulators

will challenge the bid to buy the japanese operator of 7-eleven. the tie up between the canadian operator of circle k and japan seven would create one of the largest retail chains in america. people familiar told us that reg leaders are concerned it would increase prices to consumers and damage the labor market. boeing has ban -- paused test flights after discovery of a crack in a component. the maker said it found the damage during routine -- routine maintenance. the component did not perform as designed. it is the latest setback in efforts to certify the largest jetliner, already five years behind schedule. an analyst says the grounding could delay deliveries to 2026. as you mentioned, gold is climbing again this morning, trading at another record high $2500 per ounce. the precious metal has surged more than 20% so far this year,

helped by expectations of rate cuts, geopolitical concerns and central banks buying up gold. ubs expects prices to hit $2700 mid 2025. central bank buying, the fed shifts and demands for portfolio hedges. that is your brief. jonathan: thank you so much. up next on the program, the day ahead and kailey leinz from chicago. from new york, this is bloomberg tv. ebsites plus marketing, you can quickly create a website, and ai will customize it for you. get your business out there and get more customers in here. no sweat... for you anyway. create a beautiful website in minutes with godaddy. wealth-changing question -- are you keeping as much of your investment gains as possible? high taxes can erode returns quickly, so you need a tax-optimized portfolio. at creative planning, our money managers and specialists work together to make sure your portfolio and wealth

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jonathan: the opening bell 38 minutes away. equities just about unchanged on the s&p. see if we can make this rally stretch beyond. counting down to the opening bell, earnings from and fed

minutes in 15 minutes time. on friday, fed chair powell gives us remarks. turning to the other event this week, the dnc in chicago. former president barack obama speaking tonight followed by governor tim walz on wednesday. vice president kamala harris will deliver her acceptance speech at the dnc in chicago. kailey leinz joins us for a preview of what to expect. we will not actually see kamala harris exclusively in chicago. they will be elsewhere as well on the campaign trail. kailey: yes, they will. they are going to the scene of the republican convention in milwaukee, wisconsin last month. they will be in prime time at fiserv forum where the convention was held four recent -- four weeks ago. at united center in chicago tonight, it will be interesting to see the kind of energy and crowd comparisons that appearance might draw knowing that donald trump has had issues

with the crowd sizes that this ticket has been able to draw in the months since this campaign launched. the at suggested that the crowds were ai generated. they will be doing that trying to raise attention to their ticket in a swing state. donald trump will be in the swing state of michigan today. the proceedings will continue here in chicago. it is not just former president barack obama who we will hear from but the former first lady michelle obama who is one of the most popular democrats in the country. we will hear from the second gentleman doug emhoff. certainly a lot of speeches planned. we will be watching to see if the program is on schedule. last night when president biden gave his speech which was part of a legacy address and part campaigning for harris, it was well past midnight on the east coast by the time he wrapped up. lisa: politico leads with that today. do they realize the universe runs on east coast time? i'm sure you did not get a labs

-- a lot of sleep. when president biden said, you know they have a point. talking about the dose of protesters in chicago, some even getting into the dnc perimeter. what is the feeling on the ground between how unified this democrat party is when it comes to situations that there is a big gap between progressives and centrists when it comes to gaza? kailey: the high-profile democrats here will tell you the parties divided. that does not mean the democratic electorate is very together. the electorate itself might be divided. we saw protest in chicago yesterday. at one point a number of protesters broke through a security barrier. they had to be apprehended by police. they did not make it through the first initial barrier around the united center but you are seeing that activity. there were thousands of protesters. more protests are scheduled for today and later this week. there was conversation when the

news broke from the secretary of state antony blinken that israel agreed to a cease-fire bridge forward calling on hamas to do the same. that may be very opportune timing to coincide with this convention. we heard president biden talk about that progress being made last night and congresswoman alexandria ocasio-cortez got some of the biggest applause overnight when she talked about how harris will continue the push forward toward a cease-fire. harris is seen as something -- someone more some pathetic to the palestinian cause, perhaps more willing to stand up to israel so we will see how that narrative plays out in the coming days. jonathan: thank you, kailey leinz of bloomberg. "balance of power" later on this afternoon and again at 5:00 p.m. eastern time. coming up tomorrow, andrew sheets of morgan stanley and libby can troll of pimco and maybe even annmarie hordern in

chicago. and aw york poll. from new york, this is bloomberg.

jonathan: future flats after eight days of gains. 30 minutes until the start of trading. i am matt miller. >> i'm sonali basak. >> and i am katie greifeld. "bloomberg open interest" starts right now. sonali: the s&p 500 on the longest winning streak this year on bets that the fed will signal it is ready to cut rates but the rally may stop. matt: fresh insight on the consumer as more earnings role in. lowes