>> we do feel like were getting closer to reaching an inflection point but it is not clear the way the economy will break. >> consumerism is very strong. >> we think the consumers well set up. >> it won't likely validate the fed's 50 basis point cut will be how good the consumer continues to do. >> it's not a terrible thing it's just what we were hoping for. >> this is bloomberg surveillance with jonathan ferro, lisa abramowicz and annmarie hordern. jonathan: let's get you to the weekend live from new york city this morning for audience

worldwide bloomberg surveillance starts now. coming into friday at all-time highs on the s&p 500. equity futures on the s&p little changed on the nasdaq we are down about 2/10 of 1%. the bond market check out china. eight a winning streak on csi 300. this week alone up almost 16%. alibaba up. rio tinto up 10, bank of america this morning it's a bubble dream. lisa: basically what we're looking at his bazookas on all sides. the latest being from china which is sort of the last shoe to fall. people wondering when they would come out and actually pledged to stimulate the economy. the politburo coming out calling on the population to earnestly enhance the sense of responsibility and urgency of doing economic well now. let's see if the economy can follow. >> the cac 40 in paris, france

up by 3.5%. quite a running europe. >> they are so reliant on selling these goods into china. europe will do well if china does well. you've the chinese saying the response to the masses, the masses in europe on top of that the european data today showing inflation actually falling. everyone starting to think maybe we will get another ecb rate cut. it feels at this potential lift europe. >> spain as well paid the euro-dollar 11162. the output, the growth backdrop not great. in spain, we get a closer and closer to another rate cut of the ecb it sure feels like it. >> if they don't cut rates what's wrong with that. 80% chance of a rate cut at the october 17 meeting basically you have inflation falling below that 2% target in france and germany across the euro region. why wouldn't they?

and if they wouldn't how much does this torpedo growth in a way that will be negative for the euro. that's an increasing feeling in markets. >> let's talk about japan. this is a real gap lower. japan's ruling party picking its next leader. >> the fact that there was such a rush into the yen into strong yen bets shows how much this will matter. potentially is going to be backing the idea of normalization and just that alone puts the thumb on the scales of possibly hiking rates yet again. again this speaks to how the door is open to a normalization across the world. annmarie: talking about china and how they are having this massive uptick when it comes to equities then you talk about this new prime minister whose potentially keenly focused on the geopolitical concerns and what china is doing in the indo pacific. this is someone backing the idea

of an asian nato. amongst all this hive equity markets are missing some of the security concerns. jonathan: if you are just joining the program welcome to the show. equity futures on the s&p 500 down by close to 1/10 of 1%. yields are lower by a single basis point. coming up on the program, marvin lewis state street saying the fed put is alive and well. david as new york city mayor eric adams pairs to appear in court. we begin this hour with stocks heading towards a third week of gains on the s&p 500. martin of state street saying the fed put is alive and well, the fed's willingness to start with 50 basis point rate cut while remaining data-dependent hands the market the option to push the fed towards 50 on any sign of economic weakness. marvin i've said this a few times over the last week does it get much better than this?

marvin: it's a pretty good time with the stories out of china certainly. the global cutting cycle and discussions that might accelerate this is good for risk assets. let's not look that gift horse in the mouth. jonathan: chinese tech is up by him was 20% so far this week. we seen this movie before. we get hints of stimulus and then we roll over. is it different this time? marvin: it is pretty significant. it does seem as of the central government is looking to stabilize at least the economy through the financial markets. it's a real question to us whether or not similar to whether or not wall street can make its way to main street. whether these actions can once again drive a more active consumer that has really had problems feeling comfortable with the economic situation. that's to be seen but from a markets perspective it certainly supported. >> there's a broader theme and

this i think. peoples's attention this week which is maybe the market underestimated just how much the feds cutting cycle would open the floodgates to the rest of the world also taking easing steps. how much is that what we are seeing and paving the way to a global easing cycle that really fuels more growth than people previously expected? marvin: i have always been of the thought while everyone expected the fed to cut it really took a view of how the cycle is going to evolve in the fomc's minds to get investors comfortable with how that might domino through the rest of the world. so there is a bit of that even though everything has been fairly well priced, a looser monetary policy coming in out of the u.s. just makes it a lot easier for the rest of the world alternately followed along. >> is it now a potential policy error waiting for the ecb not to hike and not to cut rates in

tandem with the fed more aggressively. they have inflation below 2%, bay of growth rolling over, a whole host of potential challenges. there's no argument to keep rates where they are. and i missing something? >> i agree with you completely. what is good to be interesting i think as we go into next year are potential changes in the neutral rate where in europe it looks like there are -- they could be lower than it was during the pandemic where the u.s. we are still debating whether or not the neutral rate which is almost 50 basis points above where it was before the pandemic started, make sense. does it need to be higher than that and that's monetary policy diversion dispersion that we had been expecting for the last year and a half. >> how promising is it for europe how well china goes with

these new stimulus measures. >> i mean for sure we have to look at underneath the covers there and wonder of the economy looks like. it's part of that what i'm talking about it's germany's real inability to get out of its doldrums. i do think it is a type of economy that takes a lot more than just this one of those. this a lot of underlying concerns. >> how difficult is it understand the german economy when you have headlines out of the auto industry but you look at where the dax has been trading. >> it's the separation between wall street and main street to a certain degree. germany has really benefited from a pre-pandemic role which was much different from the geopolitical perspective which is certainly impacting europe a bit more than maybe the u.s.

economy and really need to look through that as a potential headwind as we go into an environment with geopolitics potentially becoming a much higher headline concern than it had been in the mid-2010s. lisa: putting aside geopolitical shocks, you are potentially much more bullish than you were a week ago. is that an accurate characterization. marvin: no. i really did feel the cutting cycle was something that was underappreciated, i do think the tailwind globally is pretty significant so i have liked stocks for the better part of the summer. lisa: you've been bullish for a while. that'll people are saying, they're getting more bullish as the cutting cycle goes on. people are saying get out of cash, it's the time to go into other longer-term bonds. yesterday we got data showing the biggest weekly inflow into money market funds.

saying this is not to be the best place to be. is actually accelerating the flows into these asset classes. 6.4 trillion dollars now in money market funds. how do you explain the fact people are still rushing to cash at a time when you're hearing the increasing cries to get out? >> we were having that exact same discussion yesterday. a lot of things that don't necessarily package well in terms of the flows. i do think it speaks to the amount of liquidity that remains in the system which ultimately supported to we really start to worry and at the same time we have this treasury conference it's going on where they're talking about thinking what the liquidity situation will look like as qt goes on. so for the moment it is a tailwind. there's a lot of liquidity in the system. i think it speaks to we have in the u.s. and supports the

market. the qt will continue to operate in the background feeling that they're so much liquidity out there. in continuing to think through into 2025 which feels a lifetime away when maybe all of these tailwinds we have really start to die down. >> 2025 or think we have to talk about the policy anxiety around the election. do you think we can avoid that kind of gap blurring in the equity market as winters they would may or may not happen. >> there's so much this can happen in early november. hoping that we actually have an answer if you will after the elections, the fed is that week also. the risk that i would look at in terms of top priority to gaining a little bit lesser. number one is whether we can cope with the president's comfortably. if we cannot that is an absolute risk premium that the market

needs to absorb. in terms of policy there will be a reaction where democrats are viewed less cooperative to the markets if you will. policy itself gets put in place, i thing we need to figure out who congress is and what they can actually get done. if anything really the deficit remains top and center as we go through this and formulates how you want to look at treasury yields as we go into the end of the year. >> i think this raises questions about the character of the current rally. using china absolute rip this week. how vulnerable would it be this rally to a trump presidency, november. marvin: for sure. i thing a lot of what we are seeing in china is market supported. they're not necessarily economically supported. we have had had fakes before. it takes the real economy in china getting firm footing to really justify the kind of rally we've been seeing. jonathan: thank you sir as

always. goldman sachs, bullish u.s. equity positioning and optimism might be tested by elevated policy uncertainty. china, what could test that, the u.s. election. lisa: especially if you end up with a real protectionist type policy the requires nationalistic response. this really did come out when it did, there's three big questions from this week. how far policy officials willing to go. how strong or weak is the actual economy right now it's true china and of the united states. >> right now things are all good. the fed is slashing, oil is crashing. the world stockmarket cap is set to surpass the high back in october of 2021. your bloomberg brief, here is yahaira. yahaira: shares of costco falling down more than 1% even though the company reported

better-than-expected profit in the fourth quarter. the retailer says shopper traffic increased in the u.s. compared to last year. visitors spent slightly less per trip. costco is had quite a run and as you can see shares are up nearly 37% so far. meanwhile intel apparently turned down arm holdings when the company asked about buying a unit of the company. bloomberg has learned arm approached intel about buying the struggling chipmakers product division, intel's response is not for sale. intel was once a world's largest chipmaker. but has become the target of takeover speculation since a rapid deterioration of its business this year. hurricane helene made landfall on the western coast of florida as a category four storm with maximum sustained winds of 140 miles per hour. power outage u.s. reported one point 3 million homes and businesses are without power across the southeast. the hurricane's massive size means it's likely to bring

torrential rain and flooding's to cities hundreds of miles away including atlanta -- real north carolina. that's your bloomberg brief. jonathan: more and about 30 minutes time. mastic divisions over ukraine. >> there are some in my country who would instead force ukraine to give up large parts of its sovereign territory. we will continue to provide the security assistance ukraine needs to succeed on the battlefield. >> we will get to those divisions up next on the program. live from new york city, good morning. ♪

[introspective music] recipes. recipes written by hand and lost to time. are now being analyzed and restored using the power of dell ai. ♪ >> u.s. equities just off all-time highs as the rally continues worldwide. equity futures negative by 0.06% in the bond market just about unchanged. 10-year through 7867.

domestic divisions over ukraine. >> the united states supports ukraine not out of charity, but because it is in our strategic interest. there are some in my country who would instead force ukraine to give up large parts of its sovereign territory. who would demand that ukraine except neutrality. we will continue to provide the security assistance ukraine needs to succeed on the battlefield. jonathan: kamala harris pledging full support for ukraine following president biden's announcement of an $8 billion eight package drawing contrast with donald trump is the former president suggest ukraine should offer concessions vladimir putin. joining us is bloomberg's greg. the meeting later on today and the potential between the ukrainian leader and the former president of the united states. greg: this meeting is about 3.5 hours from now at trump tower in

new york. it comes after a week in which world leaders coming in for the general assembly. solesky in gate -- volodymyr zelenskyy engaging a little bit of domestic politics. heading to pennsylvania, going to scranton where they build ammunition for the ukrainian war effort. he's got his allies in congress looking advent -- investigations into whether that was proper. a very tense relationship. trump has accused the ukrainian president of being on toward tour him. zelinski knows there's probably a coin flip chance of either one of these two people being the next president of the united states and he's got to work the relationship no matter who gets elected. annmarie: it all feels a galinsky is not reading the same polls you and i are reading. the issue is not just with the trump campaign how much does

this hurt ukraine's chances with republicans in congress the regardless of whether trump wins or not they will be -- neither republican support to continue the aid flow. gregory: it's exactly what you see these world leaders weatherby zelenskyy being very sophisticated in how they play domestic u.s. politics and they usually try to walk this tight rope of trying to cobble together a bipartisan consensus. that consensus has fractured over ukraine, this republican party post trump is a lot more isolationist, a lot more euro skeptical than it used to be and so he's got his work cut out for him if he's going to get these republicans not to mention the jd vance's of the world who is perhaps the premiere ukraine skeptic in congress right now. annmarie: which zelenskyy told the new yorker he is an individual he finds too radical,

unnerving the trump campaign. we've knew bloomberg poll which i know you pay attention to and read all the responses. how much is foreign policy landing with the electorate? gregory: foreign policy tends to rank lower on the list of concerns of u.s. voters when you just sort of ask them for their list of issues. on each of these foreign policy issues if you ask about china or ukraine, the israel hamas conflict of course we know is esco into another front with hezbollah. the voters tend to trust trump over harris. reflecting the more isolationist movement you have here in the country. harris is the incumbent vice president doesn't have the same sort of room to politic on this. she is wedded to the biden doctrine on each one of these fronts. so it gives trump free rein to be critical of u.s. policy on

this and to sort of look for votes. >> it's interesting this is coming in at the u.n. general assembly week were all these world leaders in particular from europe but ukraine very much, how much are they refraining from making some of the statements below, zelenskyy is making in order to kind of hedge their bets because there is a real razors edge kind of election here taking place in the u.s.. >> is a very difficult relationship to manage when you do not know who the next president of the united states is good to be. you see western officials, a keir starmer now meeting with the former president trump over lunch, trying to define for common ground even though those two men are very far apart. this is a western world that's grappling with the prospect of donald trump returning and they are all sort of befuddled in trying to figure out where they

stand, they survive the first four years of trump and how that really disrupted some of the key underpinnings of the postwar world order with nato and the multilateralism there now even more porous environment given the russian war, what's happened in the middle east, looking towards what a trump doctrine 2.0 might look like. >> emery was talking with the new poll and bloomberg showing kamala harris is having a slight tiny lead in a bunch of the swing states. just how difficult are some of the polls to read and how sort of muddied has the water to become after there's a real question about likely voters and the ones who are most likely to come out to turn out versus those who will just have a preference but aren't really in play. gregory: obviously there's a lot of criticism about public polling and it's a very crowded

picture you've a lot of polls out there and some question about how to read them. polls, our elections are very close and so we are talking about just points maybe even fractions of the points of difference, this latest bloomberg news poll we just published last night of the seven key swing states most likely to decide the selection really shows a razors edge pre-kamala harris is at least tied or leading in all seven of these states. but again these are all within the margin of error. as you point out, that -- it depends on which one of these people we start to show up to vote. we start to look at likely voters in this particular month, vice president harris does do better among likely voters. but that's not a given. and so a lot of this is still anyone's race and we have one more morning console poll next

month just before the election and we will see where we are. ever since harris got in this race it has been a virtual deadlock. jonathan: looking forward to the next month. greg out of the nation's capital per the number one issue has been for a long time it often is the economy. the gap between donald trump and whoever he's running against has been this wide for a while. it's get in closer and closer on that issue. annmarie: harris has been able to tighten the race. when you look at the number one priority for voters it's the economy. with joe biden it was a 14 point gap. then with harris entered in late july it's at eight points. now it is that for points. she is chipping away at his lead when it comes to the number one issue but the trust still remains in his favor. jonathan: a lot of people have celebrated the ukrainian president's approach to diplomacy and foreign policy is really hard don't think you can understate how badly they've done this week if you believe

this is a coin flip when it comes to november 5 then this approach is not the right one. annmarie: they fumbled it when it comes to the trump campaign with this interview in the swing state of pennsylvania, getting a tour by probably the most beloved democrat in the party, governor shapiro. then you have speaker johnson saying this isn't fair, your ambassador needs to go. it's a different tone than july. now it just feels like he's snubbing him. jonathan: coming up on this program, bloomberg's david gara as new york city mayor eric adams prepares to appear in court later on today facing bribery charges, wire fraud and taking illegal campaign donations. that conversation up next. ♪ old school hard work meets bold new thinking. to help you see untapped possibilities and relentlessly work with you to make them real.

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jonathan: equity futures done about .10%, on the nasdaq 100, down .20%. the rally this week has been phenomenal. we are talking about gains of almost 16% and the likes of alibaba, up to close to 20%. real up 10%, php 11%, it is

the luxury class, anything connected to china. lisa: david chow said phone mode is running hi firtash says fomo is running -- says fomo is running hyper investors. a sickly, there was a wave of cheering unleashed by the bureau as they say we need to get the economy in a better shape. let's cut rates, get stimulus ahead of the national holiday, and it is helping markets a lot but will it trickle down to the economy? jonathan: i mentioned this to bank of america, the fed is slashing, oil is crashing and china is inflating, a bubble dream, so why aren't bond yields higher? we will explore that. let's check out the bond markets and get to the bond markets, the two year, 3.62. the 10 year, 3.7867. this week, the two-year is virtually unchanged. what to do with a 10 year yield

given the news flow of the last flow? lisa: i have no idea. talk about new data. the u.s. emerged from the pandemic a lot stronger than previously expected with gdp adjusted for inflation, upgraded from 51 -- 5.1% to 5.5 percent, and a savings rate higher than we thought, so if you think people have plenty more to spend and if they went in and came out of the pandemic in a better place, why wouldn't you assume that inflation would be stickier because this was not as restrictive as we previously thought? in other words, i have no clue. jonathan: jobless claims, four year low. stern the page and get to the intraday. inflation in france, inflation in spain, plunging below 2% and the euro down to 1.1165. lisa: the market collectively

says it is absolutely going to tea the ecb up now that we have an 80% chance of price and why wouldn't they go? i cannot find the argument not to cut rates for an ecb facing disinflation and that is greater than a that previously and more weakness than they realized. jonathan: yesterday, mark andre said the fed could cut rates further and the ecb should cut rates further and there is a big difference. lisa: if you believe this is a single mandate central bank focus squarely on inflation, where is the argument right now to not cut rates? that will be interesting at a time where it is more political, especially with a fractured set of countries. that said, where is the objection going to come from, germany? is that the one that is going to say actually we need to protect the euro, keep the strength? jonathan: with an economy basically in recession right

now. this is a much stronger japanese yen. 143 on the dollar yen, japan is probably picking a new leader, essentially endorsing high rates over the boj. lisa: so why wouldn't they with hike rates, as well? the key question is how much does that hinge on what the federal reserve does because at a certain point they would like the to get stronger and they do not want to miss the window of opportunity so do they get a chance to strengthen the end in a more constructive way if they hike now that the same time the fed is cutting? this is a global easing cycle that is giving the japanese authorities a chance to normalize in a way nobody thought they could without disrupting global order. jonathan: because of that move, japanese stocks missing out on the rally. benjamin netanyahu agreed to hold talks about a cease-fire in lebanon. it is seen as a last-ditch attempt to prevent the conflict

from escalating further. annmarie: what his office put out an english on x and facebook is different. it seems that the yahoo! is under a tremendous amount of pressure. this is what the statement was from the office, israel shares the aims of the u.s. led initiative of enabling people along the northern border to return. we share the aims of this three-week cease-fire, every different from what he actually said at the united nations and it remains to be seen, is this a flip-flop or are the israelis really on board with the cease-fire? lisa: when you talk to u.s. officials who have spoken to netanyahu, they say it depends on which day you speak to him and what he's going to say. unclear where this is going to go but it is more interesting based on the fact there is flip-flopping going on, iran has not gotten involved in terms of the directly fighting israel,

and they are trying to backup hezbollah, and that shows more players trying to get entrenched in this. jonathan: would you say this is a real shift and the real softening from the israeli leader? lisa: for now, maybe. jonathan: your questioning whether it sticks? lisa: there's the ultimate feeling that they would like people to live comfortably to the north of the border but how do you achieve a buffer to prevent an seventh from happening? how do end up with so much anger and say why do we have missiles posting -- missiles pointing at us? how much appetite is there to make a ground operation after being in gaza, as well? maybe it is a shift in stance. this is bellicose station right now that would like to fight back. annmarie: i'm really annoyed at the white house. admiral kirby keeps his cool and this is what he said yesterday. i don't know why netanyahu said what he said but ask him why he said that. they are annoyed. jonathan: there is a real drama

in the middle east. another drama in european banking, the first meeting with the italian banking giant. later today, talks are taking place for a potential wrap up, despite the german governments opposition to the deal. lisa: everyone is saying probably this deal will get done. my favorite aspect of this is is basically calling the german authorities hands, saying you are not going to like it but it is going to go through? everybody else thinks it is probably going to be the best thing for them. this is basically the path of travel for consolidation in the euro region that is highly politicized but one that needs to have tieups in order to continue? annmarie: maloney had a call and apparently this was not part of it which i find interesting because we heard from the italian foreign minister along the sidelines of the un saying that europe, there is a free market and i don't understand why when somebody comes to buying italy that it is a

european system but if italy buys, it is no longer a single market. there is a double standard the italians feel right now and it is in front of the steel. jonathan: if any of us had the opportunity to speak with german officials, you will later, i'm sure that the bank is up another 5% this weekend that should be case closed. shareholders are not unsettled by this at all. lisa: maybe the shareholders that are the government are trying to prove there is a sustainable way that they are arguing to support some of the national champions and keep them driving. annmarie: i imagine the foreign minister will tell me that this was the finance ministry's fault or she will potentially say you had to go to the finance ministry for questions. sleepwalking into what they did not realize was the unique credit ion of all the shares but the finance ministry is a coalition government, held by the pro-business, procapitalist

party. and they are also on board with saying they don't want this to happen. jonathan: you could write a book on the last decade on german officials sleepwalking into crisis after crisis that everyone is talking about. repeatedly. this is another that they stumbled into. they are trying to work out what to do next. let's get to pulling out of the u.s., new polling from bloomberg showing kamala harris taking a razor thin lead over donald trump. harris making gains across six of seven swing states and closing the gap on the economy. annmarie: it is worth going through how much she's able to close the gap and you can see it from that chart. trumps advantage of the economy is four percentage points heard it was six in august, eight and july and that is when harris entered the race. before harris at the top of the ticket, trump was leading a 14 point advantage and that is why the rnc was celebrating this as her coronation, picking out which cabinet seats because they felt the economy is the number one issue time and time again

for the electric -- for the electorate. she is not winning, you just don't have the full trust of the economy but she is edging on that advantage. jonathan: and democrats are distancing themselves from eric adams. he is facing charges of corruption and taking illegal campaign donations. federal prosecutors accused of of taking improper benefits for nearly a decade. he is expected to plead not guilty well vowing to stay in office. david gura, allegedly, some of these allegations are shocking. david: this is a 15 plus page indictment, and as the case in new york, it paints a good picture. as you say, this went on for more than a decade. the brooklyn borough president develop this relationship in tricking the private and public sectors, and as a result of

that, had a lot of upgrades and a lot of hotel room stays, and in doing so, the turkish government could lean on him to do things they wanted to do here in new york. lisa: the lack of support this mayor has right now, we know that governor hochul has come out and said i'm going to look at my options. i hope he chooses an appropriate path. it sounds a little bit like nancy pelosi in the interview about joe biden when talking about if you should consider leaving the presidency. much as they were growing a mentor for him to step down, and if he doesn't, what's going to happen given the groundswell of everything against him? david: the statement you are talking about is extraordinary. nothing has been proven, but there is this focus on soda but she is going to be doing the coming days, what he is going to be doing, but what stood out was that new yorkers deserve to know their municipal government is working ethically in the best interests of the people.

eric adams standing side-by-side with his attorney, who is also elon musk's attorney, making the case that this is all fabricated, false claims, and saying he will fight through this because he's been fighting through these allegations for many months now. how many people in this administration have left in recent days and weeks, i think there is a vital question now in the city, this the administration have the brainpower and capacity continue to run the city? that is something that they had to look at nationally, as well. lisa: does it broaden out the entire web of people involved in this? how big is this? a number of people have resigned from a number of departments, there are potential allegations of changed outcomes in specific industries and thinking of the fire department, how far-reaching is this at a time where people are questioning the efficacy of the new york city government? david: we don't know how broad

it is going to be, and there could be indictment's in the new york times, and they did say that there are subpoenas, so we will see how it broadens but you look at what ushered him into power back in the city in 2021 and he assembled a broad coalition. he managed to do that through the relationships he had, it is a style of politics. you are right, it encompasses a lot of agencies, and just looking at the police department, two commissioners have resigned as a result, no a third one is there on an intraday basis, so it just continues to pile on. annmarie: i don't know if this is a case of reclaimed versus bronx, let's versus yankees, but hakeem jeffries and alexandria ocasio-cortez are coming out differently, jeffries is saying he is not taking the fine line of if they need to step back. david: looking back on hakeem

jeffries before he was ushered into leadership in the house was rumored to be someone who could be the mayor of the city. but you are right, these two have known each other for a long time. hakeem jeffries is a representative from the same borough. it would be interesting to see what we hear from chuck schumer when another was in a prominent role, as well. annmarie: he was asked in congress yesterday and took out his phone -- david: the flip phone. annmarie: there's always a phone call when it is useful for him. what to expect today? david: they will be at the court on pearl street in new york for a hearing, and we will get a sense of more details what goes beyond the indictments, but he will be making that appearance, and i would not call it voluntary, but he will be making his way to the courthouse downtown. jonathan: this andrew cuomo gearing up for a comeback? david: this is widely rumored to be the case and although i have

no reporting myself, it is something that we have heard he's been interested in given the opportunity. the governor has the power to suspend the mayor and remove him, and that would need to public elevation if we had a special election, and i think the former governor would be taking a look at his prospects. jonathan: i'm not sure how she will feel about that. lisa: honestly, just thinking, i'm wondering, kimi goetz some people without some people coming into the office? david: there are comptrollers running, past and present, against him. there are people interested beyond members of the cuomo family. jonathan: what a drama. that's getting update on stories elsewhere. here's your bloomberg brief. yahaira: a new warning out for 737 aircraft, the national

transportation safety board said a quality component on some planes could cause wetter systems to jam. united airlines was the only u.s. airline that had the faulty parts while the agency does not believe the airline is still using the defective parts, they are urging going and the faa to address the issue. dell is calling salespeople back to the office five days a week. executives wrote that working remotely should be the exception rather than routine. a previous memo widely reported earlier this year that employees would only be eligible for promotions if they showed up to the office, and the return to office policy starts next week. as foreign leaders gather for the u.n. general assembly, he sat down with the french foreign minister to discuss potential trump administration and how france would react to the proposed tariffs. >> international trade is a

source, but we also believe that we need to be found on the processes, and we need to set a level playing field, so i hope that we will not see the beginning of trade war's, but especially the u.s. and europe. yahaira: annmarie will sit down with the german foreign minister later today. you do not want to miss that. jonathan: one question, are you walking into the giant commerce bank? annmarie: maybe i will bring props. i think that is what i will do. we will respond to this chart. that is what i will do. jonathan: market share war brewing in the oil market. >> we would be somewhat

skeptical about that. it is a real problem from saudi arabia's perspective. it is going to be a scenario where the party will grow faster . jonathan: energy aspects up next. you are watching bloomberg tv.

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♪♪ ♪♪ sandals jamaica sale is now on, visit sandals.com or call 1-800-sandals jonathan: following the 40 second, equity market pulling back on the s&p 500, yields lower by a single basis point, the 10-year, 3.7867. the oil market, 67 handle on wti, 67.93. under surveillance, the oil market. >> whether or not there is a $100 price target, we would be

stepping back to look at the underlying structure involvement . the real problem from saudi arabia's perspective is any price, any price around where they might target it is going to be a scenario where no oil supply is going to grow faster than on demand growth. jonathan: crude oil headed to a weekly decline. the financial times reported saudi arabia is ready to abandon its unofficial price target of $100 a barrel for crude as it increases output, and they are resigned to it time of lower oil prices. joining us on set, annmarie -- joining us now is amrita sen. is there a repeat brewing? amrita: i think you know this better than i do, some of the words used in the headline were bit misleading. i don't think anybody in

particular said anything about a $100 target, and i think the concept of market share and the way it was written is taken out of context. the countries who have come out have said clearly that they are voluntary, and they are hoping that the compensation cuts that are supposed to be coming through will be able to at least offset the increase in production, so this is not about the market. the focus of opec-plus continues to remain on inventories to make sure that they remain within a five-year average, and how they manage that in terms approves bringing back reduction is almost irrelevant from their point of view because the focus was still before the group, let's make sure inventory is there, and that is the thing that the market has forgotten. the weakness in demand has made it challenging for them, and i'm

not saying that demand will be much higher. having said that, some green shoots and the stimulus that china is doing now in the fed rate cuts will help, i think we need to put it into context. yesterday's article, everybody is talking about it and i don't think there is truth to the headline that was talked about. the increase in production is planned for september, and we have communicated that, so it is not a shift in strategy. annmarie: are you saying that they are not going into market share basically and they are still looking at supporting prices? amrita: i don't think the two are necessarily linked. i think the focus is keeping the market and balance, allowing inventories to make sure that they are not else. i believe what happened in 2021 inventories ballooned so much, it took them a year to bring prices in the market back in line. it is something that they know well, so they would like to

avoid that. in the context of market share, i believe in this fondly. in the west, we look at market share differently. liquid saudi aramco has been doing. they are buying refineries in asia, stakes and refineries in china. that is market share. they are guaranteed market share for the longer term when you basically own 100% of the refinery, they have to buy your crude. they have been doing that as a strategy and systematically. i don't think they are as focused on market share as we think about it like the u.s. is gaining some barrels versus saudi arabia and so on. the focus is on compliance. those who have not been complying, iraq, kazakhstan, russia is complying more. it is more about the other eight that are compliant and have done the cuts. everybody else is taking advantage of them. that is where the debate is. it is not about who would like to win back market share, it is about we will not like to be

taken advantage of. annmarie: the market has been through price wars before. amrita: of course. annmarie: javier bloss talked about how we cannot disregard or discard the fact that that could happen. if we work to see a price war, who will hurt the most? amrita: first and foremost, let's be very clear, it even the article does not talk about anybody' a in production. what opec-plus is talking about is the gradual commensal production coming back. whether you believe the compensation cuts or not, it is gradual. architecture by definition is what happened in 2020 that everybody -- you know, russia was increasing production, nobody is talking about that, so i don't think we should be using that phrase, personally. if prices go down, a lot of countries are hurting, including the u.s., we think there is downside to the production next

year, but one of the key things we continue to see this year, brazil, a massive underperformance, and, either way, the wti and the brent this year is still averaging about $80. forget the price fold that we've had. even $80 oil does not seem to be high enough to actually bring production in places like brazil. when we had hundred dollar oil, we saw that coming, so i think we need to be more realistic. jonathan: we have got to leave it there, amrita sen of energy aspects, pouring cold water over that reporting. crude is down by more than 5% this week. lisa: gasoline prices, $3.20, coming down significantly. that is the stimulus people are looking for from saudi arabia, whatever it is. jonathan: next, we catch up with sebastian page, david malpass, tom steyer, and christina hooper -- kristina hooper.

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>> you do have a broadening of the market. here's my outlook. >> you will have an incremental slowdown. >> we should expect more surprises rather than things going the way of it needs to be perfectly done. >> one in three, 75 -- 35%. >> a lot of concern in the market is not being priced in. >> this is "bloomberg surveillance" with jonathan ferro, lisa abramowicz, and annmarie hordern.

jonathan: going into the opening bell with futures pulling back on the s&p 500, little bit of softening. the equity market scores look like this on the nasdaq 100, down by .25%. on the russell and small caps, up by .20%. these looks newsy -- snoozey right now. up close to 16%. lisa: can we call it a bazooka? how much are they actually pledging to support the chinese economy. i'm also talking about the people's bank of china. both of them coming out. it is almost as if they give the message to the central bank. now it is time for you to do your part, and they are cutting rates more aggressively, as well. jonathan: i did this a little bit earlier, chinese tech is up by something like 20% on the week. look at european luxury. and all of these names just

flying. we have seen movies like this before, china comes out, says the right thing, does a little bit of the right thing at the same time and then they fade and roll over because it does not gain traction in the real economy. there is a difference. lisa: you have david saying yesterday that basically about what the fed did last week with the china easing and i did not know that they would bring out the big guns the way he did. but then the china beige book's came out and said, the major take away is that the widening chasm between assets of the macroeconomy, and he does not buy it, and it is not necessarily doing more than that. annmarie: when it comes to asset price, you are turning bullish pretty quickly if you are not already. this csi, 300 when it comes to chinese stocks. they are breathing a sigh of relief, this is huge for europe. but is it short-lived?

i caught up with the french foreign minister and they are talking about tit-for-tat tariffs, and they are the ones who will be stuck in the middle with beijing and washington. jonathan: what is -- how is this insight for what may or may not happen november 5? lisa: that is a good question. such a different focus depending on whether it is kamala harris or donald trump. that is what people are looking up at how do you trade something you don't understand? and you don't fight the pboc the fed, and that seems to be the theme. jonathan: we've said you have to respect the difference about what people are excited about in the market. jobless claims report, and what we are excited about in the market, a big celebration of growth -- acceleration of growth worldwide. lisa: the excitement can also be paired with worry. if you would like to go there and be existential, the idea that the revised data from the

u.s. economy show that it was actually growing more quickly than people previously thought, the fact that you are not necessarily seeing the slowdown in certain aspects of the economy of people are counting on for inflation to come down, are we truly in a disinflationary nirvana or is this different than the new regime and we don't have a finger on where we are going? jonathan: we will try to answer those questions. we will catch up with sebastian page on why he's optimistic about the economy, and we will speak to david malpass, and kristina hooper on the massive rally out of china. stocks are close to all-time highs after posting the 42nd biggest year so far. we position for the market to broaden over the next six to 18 months and we are prepared should stocks pulled back over the next few months. sebastien page joins us.

if you are waking up this week to this price action you are wondering if i need to look abroad and get out of america? what is the call? sebastien: i think you consider broadening your exposure. we talk about high valuation, i think you hit the nail on the head with excitement, coupled with worries, but if you look at valuations in the u.s., the average stock in the world is trading at 13, 14 price earnings ratio. that is the long-term average. so there is an opportunity to broaden international exposures. jonathan: let's talk about where, have luxury plans in france, the tech names you can pick up in the u.s. and over in china, as well. sebastien: we are actually long emerging markets, we like japan, europe little bit less. we have talked about germany,

the struggles there and how that is linked to china. by the way, on china, it does look like a meaningful stimulus, but are analysts who are on the research platform say this is a short term boost of confidence but it is a different context, and china is structurally challenged for investing with employment at 18%, and with foreign direct investment, and with a difficult property market . that does not change on a dime. lisa: the feeling that you are on a global easing cycle where china is on board, they are injecting fiscal, and they are getting people excited that maybe they are focusing more on the economy, it adds to the feeling that we are in a new regime once again with a seismic shift that now makes it really kind of excusable not to go into risk because central bankers are saying, by all means. are you getting more than just

neutral? sebastien: but add china to the case for the bolts. last time where having massive debates in the asset allocation community, and someone told me i was being too long-winded, so i tried to make the bold case and 4 -- bull words and four words. basically, in the simplest way possible -- lisa: banks are cutting. sebastien: that is a good one, but try rates down, earnings up. that is a very pragmatic focus. the bear case coupled with worry is that the economic surprises are negative for five months in a row, so economy down, valuations wait up. i guess there was an extra word, way up, but we are slightly overweight stocks, and we would like to add over the volatility we expected during the fall incrementally.

i think it is good to talk about adding in the future now because those decisions are hard to make in the moment. when stocks are down, it is harder to buy but we are preparing the groundwork for it. lisa: it does not agree with itself, it seems like there is a mis-pricing because earnings are up, growth, everything is going great. does it make sense for the rally to be in the long end of the yield curve at the same time people are talking about a re-acceleration in growth? sebastien: even the probability of recession right now is a huge debate. if you look at things like manufacturing pmi, yield, carry, and the rising unemployment, a 40 basis points over the last 12 months, i can show you statistically that based on these three scary bearish indicators, the statistical historical probability of recession is 92%, so that is scary. if i add any market pricing,

stock returns or spreads and the level of unemployment, which, by the way, unemployment is low by historical standards. historical standards is 4.7, if i add those two area bowls with the same model, i go back to the probability of recession at 11%. so you see this depending on whether you are looking at green or red cells on your dashboard, and it is a little bit of an aixa right now. so that is why you are talking about claims and why they matter. annmarie: is that what matters the most right now, that kind of data? sebastien: yeah, i think unemployment data is important, it is lagging, predicting recessions. claims are not as lagging as the rest of the dataset. ultimately, when you invest in stocks, thinking at stocks versus bonds, earnings really matter. if you go back to my forward focus on rates down, earnings

up, that is a big part of why we are looking to add the next few months. annmarie: what is the four word bear case to individuals who say, hold on, we need to press pause? sebastien: we tend to be contrarian. 21 price earnings ratio on the s&p 500, the s&p is up the last two years, we don't like to buy stocks when they're that high. we are fully invested, things are looking good but this is not the time for massive overweight. annmarie: jobs crash, valuations hi. lisa: i say that would be what it is. annmarie: lisa's good at this game. lisa: how much do you really understand the data we are looking at as being accurate given the backward revisions? i was struck by yesterday's backward looking revisions of gdp, showing them substantially higher we look at them following the pandemic and you look at the savings rate, two percentage points above the previous estimate. this shows consumers have more money and maybe they have not spent their savings. how reliable is the data that we are hinged on this data

dependency? sebastien: the data seems much less reliable than it used to be. it is still covid normalization, and i look it all these revisions and i start doubting the survey methods, the measurement methods, but, you know, it is not that bad in the employment however you would like to look at it, it is trending in the wrong direction, but the levels of employment in this economy are pretty good. and claims in the 200s, this is a robust economy. jonathan: we will talk about the election and finish there, the real election risk is in december, the real election risk is not a global windstream, but a wind that becomes contested by trump, thinking about the election. sebastien: i contested election would be a problem in disappointing. i think most investors in our platform would say a divided outcome is most favorable for

markets. and this spread between potentially 15% corporate tax rate to 28% corporate tax rate, these outcomes could matter and they could generate volatility or massive tariffs. so we are going into an election where we should see market volatility. i know that has been trite. we always have market volatility but i think the divided outcome is the safest for market when you don't get an extreme policy shift. annmarie: what is your base case, gridlock? sebastien: i think so. it speaks to the deficit, which i thinks we are kicking -- which i think we are kicking the can down the road. we are running massive recession like deficits, 6% of gdp. and that will work, and we have school stimulus in the system, which on its face is a good thing but you are kicking the can down the road. a lot of guests talk about that

but it will be a long-term problem. in that context, i think we are ok, but you really need to watch the auctions. lisa: i appreciate that. jonathan: you have a friend and lisa, thank you, sebastien page. s&p down .10%. here is the bloomberg brief. yahaira: u.k. prime minister dined with donald trump for two hours last night, discussing the long-standing friendship between the two nations and the importance of maintaining an enduring partnership. that is according to his office. the british premier had hoped to meet with kamala harris, reporters traveled with him to new york. but challenges prevented it. we lawn up 5% after it was investing in a designer brand, they are buying a 10% stake in double are, the investment

vehicle controlled by montclair. they will also get a seat on the italian company's board, which sells jackets that can cost more than $6,000, and quadrupled sales the past decade to $3.3 billion. peter thiel is cashing in. according to regulatory filings, he sold almost $600 million of stock this week. he was the cofounder of palantir and has now sold more than $1 billion of his stake this year. the filings do not disclose a reason, and peter thiel has not responded to request for comment. jonathan: more from the bloomberg brief in 30 minutes time. we will catch up with david malpass around the corner. every future is negative. .10% from new york this morning. good morning. ♪

where ya headed? susan: where am i headed? am i just gonna take what the markets gives me? no. i can do some research. ya know, that's backed by j.p. morgan's leading strategists like us. when you want to invest with more confidence... the answer is j.p. morgan wealth management just stop calling each other rock stars. and using workday to put finance and h.r. on one platform. tim, you are a rock star. using responsible ai doesn't make you a rock star. it kinda does. you are not rock stars. (clears throat) okay. most of you are not rock stars. oooh. data driven insights, and large language models. oh, that's so rock roll. it is, right. he gets it. yeah.

jonathan: counting you down to the opening bell with equity futures down .10% on the s&p. big rally in europe, as well. the bond market yields down a single basis point, 3.7848. easing in america, easing in china, the prospect of more rate cuts from the ecb, should yields be higher and not lower off the back of the news the past week? lisa: if you believe inflation is still present threats, then why wouldn't they be higher? it seems the market has gone comfortable with disinflation here to stay, and then it can continue, regardless of what happens with stimulus coming out of china. jonathan: good conversation about policy over china. joining us is the former world bank president david malpass. good to see you. david: good morning. jonathan: has the spread between

sound economic policy and the kind of campaign promises that get you elected, has it ever been wider? david: there is a huge fight over what we should do and which way we should go, and from the market standpoint, take it with a grain of salt and say we are going to figure out a way to get through this. bottom line, it comes out to earnings, and we know that, how do you make money within a volatile environment? i think the markets are showing that they are able to do that, plus, they have the fed behind them. we have to realize what is going on as markets get dicey, the fed steps in, so that change is really the value of everything and addresses what lisa is talking about on the bond yield. jonathan: i would like to spend time talking about specific policies. nippon steel is a great example of where we are right now.

it feels like there is a big divide between doing the right thing in the kind of thing that gets you elected. we are talking about japanese ally looking to take over a u.s. company, and nobody on the campaign trail would like to entertain it because if they do, there is a november election, so how problematic is that? that feels like policy across the country. david: it is a change in the u.s. direction in foreign investment into the u.s., but it is the biden administration pushing that. they are the ones with a hand on the steering wheel right now and moving away from inviting the investment, but let me change gears, there is a giant problem in the world with the plainfield copy level, so this will be a fight that goes into future years, and it is both parties trying to figure out where the u.s. would like to be in that fight, so there has to be a lot of work done on what do we want in terms of foreign investment

into the u.s. and into certain sectors and industries? annmarie: when it comes to nippon steel, the biden administration is taking this approach because they were push thereby trump, who in january of this year said i would block that deal, and then biden-harris came out and basically got behind trump because it is an election year. don't you think the former president is also an individual that if given this choice would block that decision? david: he has gotten views and he is a leader, so what you are basically saying is biden's following the leader and vice president harris is following the leader. that is not a good position for the u.s. to be in if it is trying to lead in the world. that is one of the problems going on in the world, the vacuum of leadership from the u.s., and the world is really having to look at that in each forums. what are going to do when the u.s. is not really showing where it is going to go? annmarie: i would love to get your thoughts on one policy

proposal trump talks about. republicans, when kamala harris came out, talked about price gouging for groceries. republicans said she was a communist and this is price control. what is the difference between that and capping interest rates on credit cards, bernie sanders proposal? now trump is saying that they should do it, too. david: i'm not in favor of all, but price controls, as described by vp harris were sweeping, and that is not a good answer to what you are going to do about inflation. you have to have some answer that talks about more production, and that is what president trump did. i think that is a better approach, if vp harris is asked about inflation the next time, i hope she does not talk about the middle class, and maybe she can just say, look, i'm going to try to have our economy, the private sector, of the united states, produce a lot more. that is the way to deal with inflation, and she is not saying

that. she has the government pushed into the middle of every part of the u.s. market. lisa: you said the u.s. needs leadership and clear leadership in terms of what positions are in certain places, do you have a clear sense of how do you weigh national security versus letting fair and free trade and business and what that looks like under trump? david: i don't know under trump, i know that issue, so starting in the 1980's, there was a big push in discussion on what was industrial policy and how far did you want to go? there was the beginnings of the committee on foreign investment in the u.s., i was at the treasury department at the time, and substantially involved in that, and there is lots of discussion on what is our national security, and within the u.s. government, how do we balance various interests? the treasury department is the chair, and that keeps a balance

between the commerce department, which would like to export and the defense department, which often wanted to block, so that debate has been with us for a long time, and it needs to be really worked out among leaders within the u.s. as decisions come down. in the 1980's, it was fairchild semi conductor, and friends and japan's investments in the u.s. that -- france and japan's investments in the u.s. that caused political tensions, so it is not such a new thing now, it just has to be discussed from the standpoint of what is our national interest? lisa: there is also a sense of knowing who our friends are. donald trump recently said that if deer leaves the u.s. and moves production to mexico, he said i'm notifying john deere now, if you do that, we are

putting a 200% tariff on every thing you would like to sell in the u.s. do you have a clear sense of who our friends are under donald trump versus kamala harris? david: the trump, it will be american workers, and he will use more tools and the tools more strongly stated them with the biden-harris administration has been doing. that is the big challenge of how do you really enter a world negotiation with a trading system is broken, where the foreign investment system is really broken in part because china is not following the rules, and the intellectual property problem is still with us, so we see in each of these areas, there has got to be a balancing of what is the national interest and how do we do the best job for workers in the u.s.? annmarie: lisa is talking about mexico, so is trump basically trying to dig the usmca he

negotiated under his first term? david: no, but he negotiated was a very strong agreement. it is not being fully implemented, and mexico has walked away from some of the principles of that, so as you look at it, these are living, breathing documents. you get the best negotiation you can, 2018, but you try to get mexico to stay on course. think how much has changed in mexico in the last six years of government that really was antibusiness, was the first act below the current or just departed second president. president ober door was to stop -- obregon wasn't two to stop the airport, and he said he did not like the contracts, and so

we have got a partner to the south within the usmca that has got major problems, so there has to be real discussion on how do we interact with mexico when they have been leaning toward china? jonathan: it is a big to-do list. david malpass, we have a lot to talk about. hopefully we talked before the election. good to see you. the former world bank president, david malpass. next on the program, tom steyer of galvanize climate solutions. negative hereby appoint 10% on the s&p 500 -- negative hereby .10% on the s&p 500. this is bloomberg. ♪

jonathan: two hours away from the opening bell. equity futures down .1% following the 42nd record high close on the s&p 500 of the year so far. dan about .1% on the nasdaq. the russell up by one third. in europe the rally continues. across paris, italy, germany. the cat 40 up about 1%. the dax up 5.08%. -- by .08%. yields lower by basis point on the 10-year.

yields have been pretty stable through the week. lisa: welcome to stop -- soft landing nirvana. how far policy officials are willing to go? how much will this affect the real economy? how strong or weak is the economy currently? the answers have been pretty far maybe significantly and pretty strong. jonathan: easing out of china leading to high yields in america? we've had a debate so far. it is leading to higher equities over in china. csi 300 on a day winning streak. up by close to 16% this week. one market not rallying, the nikkei futures in japan. negative and down hard. off by more than four full percentage point. the japanese yen is a lot stronger. lisa: for the first time in a long time the japanese stocks

are not on sale in the same with a had been before investors. maybe people are getting a sense that maybe this bank of japan will hike rates more significantly. they did pick a new leader who's actually open to that kind of normalizing cycle. this show so much japan dances to their own music. they are continuing to do so. the last time you could go to japan cheaply was the summer. if you missed that, i'm sorry. jonathan: you timed it up perfectly. lisa: i actually managed to transform some currency at the very peak. jonathan: bramo leading currency exchange worldwide. donald trump says he plans to meet with volodymyr zelenskyy after criticizing him in recent days. if elected, he will force zelenskyy to the bargaining table with vladimir putin. it's been a difficult week for the ukrainian leader. annmarie: it has been. you so with the wall street journal editorial board framed it. whoever's giving him advice on

american politics is doing him no favors. we have seen a change in tone from volodymyr zelenskyy. the sense i got was he wanted to speak to donald trump. he wanted to hear what the plans were. he was setting himself up for the full we are watching showing this election is on a knife edge will stop he comes here and he says very different things to the new yorker about the former president. very different things about his running mate. also decides to go to a swing state of pennsylvania. it is not just the trump campaign he's unnerving. i spoke to someone in congress. the concern is that he will push more republicans against ukraine. whether or not it is trump or harris, they need congressional support for some of the aid they are asking for. jonathan: speaker johnson calling for the firing of the ukrainian ambassador this week. it slipped under the radar but that's real news. lisa: especially when there's a question of whether or not a republican-let congress and government would actually continue to support. i find it interesting is coming

on the world stage when the un's general assembly is here. how much of that is emboldening the rhetoric we're hearing on all sides? new york city isn't in such great shape either. jonathan: let's get to that news. mayor eric adams is set to appear in federal court this morning where he is expected to plead not guilty to charges including bribery, fraud and accepting illegal campaign contributions. adams says he will serve as mayor it will defend himself against the charges. lisa: innocent until proven guilty, except not really when you look at the democratic representatives who keep coming out and calling for him to resign. given how many people have been roped into this investigation throughout the administration, throughout the departments of new york city, the fact this has gone on for months and months raises the question how long this government can't continue to operate. the u.s.'s biggest city at a time when there's a real question swirling. what is governor hogan going to do about that? annmarie: it looks like the governor was watching nancy

pelosi and how she threaded the needle with president biden. "it is up to mayor adams to show the city he's able to lead in that manner." clearly there's a bias of you have the public behind you and it's time to step aside. jonathan: we are waiting for the president to make a decision. lisa: i thought it was taking a page out saying we're waiting for him to make the appropriate decision. do what is appropriate. make the decision. try making it again. jonathan: when we get the news we will share it with you. and east coast port strike starting on tuesday and becoming increasingly likely. talks before the -- between the international longshoremen's association has been at a standstill since june. the white house will not step in. lisa: to me this is one of the most under placed stories i could possibly imagine. it will cost the u.s. about $7 billion or more a week in terms

of lost economic output. you are talking about one of the biggest ports with all sorts of goods potentially leading to inflationary supply chain disruptions right before the election. i fascinating moment that somehow isn't getting as much attention as many people would want to be focused on. annmarie: the first time since 1977. it is not getting enough attention. when i talk to people in the administration, this is one of the biggest risks before the election. one issue, inflation. this does not bode well for biden-harris. she doesn't want inflation. does she come out and support the unions? this is going to be politically difficult to walk that line. jonathan: this will be on the radar for next week. it's been a big week in new york city. kamala harris and donald trump back on the campaign trail. trump pledging to increase energy production. the harris campaign creating a stockpile of critical minerals to adduce u.s. reliance on china.

joining us on the table is tom steyer. good to see you sir. welcome back. it's been a fantastic week of conversations, many energy and climate related. are you walking away from the meetings this week more optimistic and constructive about the future? tom: i came in pretty optimistic about the future and leaving more optimistic. we are in the middle of a new industrial revolution. the energy transition has a lot of momentum. i feel good about where we are going from a business standpoint. jonathan: what is encouraging the most right now? tom: the big thing that's happened is that clean energy and the new technologies are winning in the marketplace. they are winning around the world. i think most people think at some point we will start going through an energy transition. the actual truth is we are right in the middle of a very fast energy transition around the world. really nothing is going to stop it. annmarie: are you disappointed

that kamala harris and her economic policy document was actually touting u.s. record fossil fuel production? tom: i really think that the harris-walz campaign is trying to talk about energy and meet voters where they are, which is economics. kamala harris has been a strong advocate of clean energy for decades. governor walz has a very strong climate record. when they are talking to voters on the campaign trail it is not about what you want to talk about, it is what they are able to hear what everybody is worried about right now is economics, us succeeding, jobs and costs. i think that's entirely appropriate. annmarie: if that is accurate, and everyone is talking about this, why put the brakes on some projects that could fuel all of this? we spoke to the rio tinto ceo who said it was the biden administration the put a pause on a mega comprom -- coppermine in arizona.

tom: there's a lot of talk about critical minerals. i know people are pointing out different ways this revolution can be slowed or can lose momentum. i believe all those conversations are overblown. i believe what we are going through is a huge business transformation. it has amazing momentum. will there be problems about permitting and the grid and critical minerals? absolutely. people talk about it all the time but they are missing the big picture. if you look at 2023, globally, 83% of new electricity generation was knowable. was anybody doing that? nobody. it's a better deal. we are in the time of cheaper faster better. the new technologies are better and they are cheaper and people around the world are adopting them for that reason. not to be nice, not to save the world, but because it is a better deal for them. jonathan: to pick up on crude

production, we are less rely on opec. some suggested we are more reliant on china for some critical minerals. the rio tinto ceo talked about resolution copper. it could be 25% of american demand year after year for years. i want to understand from your perspective, do you believe u.s. authorities have actually had a sufficient reality check to understand where we need to get this stuff from and start doing now to make sure we can meet the demand a decade out? tom: there is no question a lot of minerals are dispersed around the world and in countries that are not necessarily as stable as ours is. let's take a step back on that one. the alternative and what we are talking about is fossil fuels. if you look at the world stage and how many of the wars over the last 50 years have at the

heart been about fossil fuels, have been in fossil fuel countries, how many wars we are going through now are led by people who are in oil-rich countries, it is really clear moving to renewable energy, which is dispersed around the world and people can get it in their own countries and use it in their own countries is something that will dramatically drive down the conflict in the world and make as much more secure. lisa: we are in the middle of an energy transition that hinges on product from china. solar panels mostly come from china. a lot of the products that go into the batteries for electric vehicles is from china. is that the path forward? tom: it doesn't have to be. this is one of the big questions for the united states in this campaign. it's a big partisan divide in the united states. china does not have any oil and gas. they are all in on the energy transition. they are electrifying 10 times

faster than the rest of the world. if you talk about the new energy movement, half is in china for the whole world. the united states is the biggest oil and gas producers. we have a huge -- people are pushing to stay the same, to move backwards and rely more on fossil fuels. let me give you an analogy. electric cars. the first people to develop electric cars in the u.s. was gm. geo mix a lot of money selling suvs. they looked and said electric car, we lose money on everyone and we are not going there. tesla, who had no internal combustion engine capability, when all in on electric cars. they were the upstart. that is kind of where we are with china. china is all in and we have people asking us to tap the brakes, slow down. let's stay with the 1950's. absolutely we can win this competition and we have to be in the competition. if we decide the future is

fossil fuels, we will basically draw a moat around ourselves and not compete in the critical industrial and that is terrible for us. this is absolutely the world is going. we absolutely can compete and win this. if we choose not to, that is a terrible outcome for the data states of america. lisa: you made an analogy as this week like a shoe convention for chute manufacturers for people in green energy space. how many people were big tech executives? tom: a lot. i live in california. the center of the tech industry in the united states is in california. in general, as we look at the scaling up of ai and data centers in the united states and around the world, one of the key elements to how fast that can happen at for every one of those companies that wants to lead in ai is to get energy. they are all over this.

they are focused on doing it and they have high expectations about clean energy and being good corporate citizens, but they are -- people think californians are laid-back surfers who smoke a lot of dope. serious business people who are competitive. jonathan: is a bit of that going on as well. annmarie: life is about balance. when it comes to lisa's point about the data centers, but we saw with microsoft and three mile, it was better at this? -- who is better at this? tom: it's interesting. let's take an example. one thing that is changing -- people are looking at a lot of new technologies for generating clean electricity. one of them is enhanced geothermal. geothermal is equivalent of old faithful, floodwater and steam from the earth. traditionally it's been done close to the surface, 500 feet. that is why old faithful is so

close that people can go and it's always spouting. enhanced geothermal is going down 10 times deeper using oil and gas technology, oil and gas rigs and workers to get the same thing but a much bigger size. ok. did the u.s. government make that happen? did the private sector make that happen? did the tech companies make that happen? the answer is yes. lisa: how much a big tech companies looking to buy direct energy assets to own them, the owners and funders of these projects and infrastructure? tom: i think they are trying to be direct buyers from the producers of clean electricity. what you saw three mile island wasn't that microsoft wants to own energy assets. it was to have a direct contract and be the offtake so they can develop energy assets. that is the role they are trying to play. that is a super constructive role. i think by a large they are doing a good job. jonathan: this was a smart

conversation and we always appreciate your time. tom: great to see you guys. jonathan: tom steyer of climate solutions. yahaira: apple is rolling back ambitious plans to bring its movies to the silver screen. the latest movie wolf is set for today on apple tv+ after canceling plans to release it at thousands of theaters globally. the tech giant originally planned to shell out $1 billion annually on films percent of us but disappointing returns have forced the company to shift gears. directv and dish are close to a merger agreement according to people familiar. the company's are in advanced talks for a deal that would create the largest u.s. pay-tv provider with almost 20 million subscribers. the agreement can be announced as soon as the coming days. directv is in talks to control the combined entity.

and will be postseason picture is coming into clear focus as the yankees and the dodgers clinch their respective division titles last night. for los angeles, their 11th nl title in 12 seasons, with their only world series win coming in the shortened 2020 season due to covid. four playoff spots remain with the mets looking to clinch a wildcard birth before a potentially season defining doubleheader against the braves on monday. that is your bloomberg green. jonathan: thank you. up next, a massive week in china. >> it is very powerful. it's an exceptional time where the ppoc encouraged the financial institution to get leverage in the equity market. jonathan: that conversation as up next. the view from invesco is around the corner. this is bloomberg. ♪ ♪ where ya headed?

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jonathan: equities on the s&p 500 -5.0 .3% -- negative by .0 3%. under surveillance, a massive week in china. >> what we got in the market was expectation was extreme the love. valuations were low. they came out with a positive surprise. we need to see expectations versus what they deliver. on the monetary policy site is very powerful. it's a very exceptional time where the pboc encouraged financial institutions to get exposure, get leverage in the equity market. jonathan: chinese equities notching the best week since 2008. total gains on the csi 300 coming close to 16%. single names like alibaba

gaining close to 20%. the rally on the back of a long-awaited stimulus coming out of the chinese government. joining us now is kristina hooper of invesco. welcome to the program. kristina: great to see you. jonathan: is this a game changer in china this week? kristina: it could very well be. the initial reaction suggested could be. it is more than what was expected. it seems like is a real commit -- commitment to follow up as needed. jonathan: a lot of people wake up thinking i've overweight u.s. and the rest of the world for a long time. does that need to change? kristina: i think it needs to change somewhat. where the bigger overweight is cash. there's an opportunity to deploy and get one's portfolio more into balance, but not necessarily take away from u.s. equities. just build of exposures to other areas like european and chinese equities instead. there's a real argument to move

more into china, because valuations are very attractive. we have been waiting for the catalyst to arrive. lisa: person after person says get out of cash. there are 70 other things to invest in. go to china. go to equities in the u.s.. go to europe. what we see over the past week? the biggest weekly flow into cash funds, and the money market funds going back to march of 2023. kristina: there is certainly a lot of nervousness out there. there is an excitement about rate cuts and the opportunities they bring. what if that 50 basis point cut was a crisis cut? what of the economy was in worse footing than we think. what if other areas of the world are on worse footing than we think? there is certainly a bit of a split personality for markets right now. there are those that are hedging their bets. look at the money going to gold.

at the same time there's an excitement about equities. i think that is rightly placed. i do believe my base case scenario is the u.s. does see a soft landing and we see a pretty brief soft landing with an economic read acceleration to follow. lisa: there's a question about if the soft landing can come with a rally in everything. a soft landing nirvana that affect stocks and bonds and the broadening up trade. kristina: i think of it as the opposite of 2022 were version early -- where virtually every thing sank. you can have a year with an everything rally. you can have an everything bagel. why not everything rally? annmarie: your notes put that markets are swimming in a sea of uncertainty. what ranks number one for you? kristina: whether or not the u.s. has a soft landing. let's face it. we are certainly getting data that tells us the economy is in

fairly good shape. there is that fear that because of the long and variable lags in monetary policy, the aggressive tightening cycle, the restrictive environment catches up with us. that is why i think we follow consumer sentiment so closely. that is why we had a reaction to the conference board consumer numbers the other day. but i would argue when you actually delve into the information, what you saw it as consumers got more negative on the economy but they still want to spend and collect a eat and go to the movies. i think of it as a eore economy. they are not necessarily acting on the worries. jonathan: isn't that america? we are still spending. anxious but still spending. lisa: everyone has been saying you're running out of savings. americans just go and they are reckless. they spend anyway. they will borrow to spend. the savings rate was essentially higher than we previously reported in new data.

maybe people have not been imprudent. maybe they were smartly spending on things that matter to them like trips and gives. annmarie: if you're worried about is in your job you might as well go out to dinner, go to the movies, go on vacation, have some fun. jonathan: and donald trump will cut the interest rates on credit cards. can i pick up on that? we talked about price controls coming out of the harris campaign. we have not talked enough about this. capping interest rates on credit cards. we would basically only have credit for people with high fica scores, and i mean really high credit scores. a lot of people would be locked out of credit markets. annmarie: is donald trump a bernie sanders bro? this is what the progressives have been talking about, but at a 50% cap. -- 15% cap. a serious immediate step back. i'm not one of those people. he doesn't think that should be happening. lisa: think about the money in private markets that we

come up with creative ways. you really want to borrow? come over here. i have a pressure you. jonathan: don't underestimate innovation and financial markets in mecca. kristina hooper of invesco. in the next hour, eric freedman. we will catch up with stephen trent. dana peterson of the conference board. consumer confidence from them this week making a lot of headlines. we will catch up with michael contopoulos of richard bernstein advisors. payrolls are a week away. a sneak peak of the survey on the other side. after closing at an all-time high yesterday for the 42nd time this year. in the bond market, yields lower by single basis point. in china, another riproaring rally in shanghai. from new york, this is bloomberg. ♪ ♪

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>> we feel like we're getting closer to an inflection point.

it is not clear which way the economy is going to break. >> consumerism is very strong right now. >> it won't likely validate the fed's 50 basis point cut is how good the consumer continues to do. >> this is what we were hoping for. >> this is "bloomberg surveillance." jonathan: 90 minutes away from the opening bell. this course affect this. unchanged on the s&p 500. the nasdaq unchanged as well. small caps positive by one third of 1%. muted price action this morning. heading towards a third week of gains on the s&p 500. the run continues out of china. csi 300 on an eight day winning streak. up by close to 16% of the week. this time next week we will not be talking about china. we will be talking about the payrolls report. a week away today. the estimate, 130,000. that is the median.

the previous number, 142,000. let's talk about the low. 70,000 out of citi. lisa: which potential he could be revised into retraction area -- contractionary territory. how much does this really ignite the fed's response paganism with bigger cuts and how much is this viewed as no longer such a positive for markets given the fact ultimately everyone is saying you need to see the soft landing come to fruition? annmarie: this is why i'm excited to talk to dana peterson . when you look at the data, it looks like people are starting to really have a lot of this unnervousness about the job market. are they hard as a find? yeah, they are. jonathan: what they are doing or why they are doing it. they are doing stimulus over in china. we have a deflationary spiral in china. they slow potentially in the

united states. we talked about this a few times. are you excited about what they are doing are worried about why they are doing it? lisa: in china, you have been worried about the wife for so long that now the what they are doing is significant. china is a separate story. in the united states, the why is a question mark. are they doing it because things are weakening or because they want to get ahead of potential weakening? the fed governor lisa cook says she wholeheartedly supported the half percent rate cut, saying the decision reflected growing confidence that with an appropriate recalibration the solid labor market can be maintained in the context of moderate economic growth. annmarie: based off of china, if the stainless package actually helped and you do inflation -- have inflation pickup in china, how much does that unnerve and hurt the fed is a are trying to cut interest rates? jonathan: which introduces gold perfectly. a series of all-time highs for

the week. lisa: how much of this is hungering for inflation? fear of some sort of armageddon? people stockpile gold. everyone whenever get up i have some eyebrows raised. really, lisa? gold? it is notable in terms of an inflation hedge that people are going there instead of bonds amid this global easing cycle. that is something we have to keep watching. jonathan: let's get to the lineup. coming up, eric freedman of u.s. bank asset management as the s&p 500 notches is 42nd record high this year. stephen trent of citi as south shares surge. and dana peterson on inflation in america. stocks hovering close to all-time highs after posting the 42nd record close of the year so far. eric freedman saying this. we have a glass half-full positive disposition towards risk assets based on a still robust profit cycle and companies focused on rewarding shareholders.

eric joins us for more. are we excited about the stimulus are worried it is too little too late? eric: we are excited. i think this was a preemptive 50 basis points. we use the analogy of clients, the fed acts as a personal trainer sitting next to the economic treadmill. they had to have the ramp elevated for some time. what they are seeing is across the consumer spectrum. we are seeing the runner slowing down. mostly with lower income consumers. the fed understands the un-of limit risks are going up. we used to have ev looking for a job. now we are about that parity right now. the mix of the jobs are not as robust. not as much tech and finance. it's more government, health care and more gdp plus type of running roles. that is a message we are taking is a bit of a preemptive move by the fed, but also a bit of a trial balloon.

the fed is not in a position to massively cut. they can be more incremental. the personal trainer will be a gradual easy instead of abrupt. jonathan: if that is the growth policy mix, do they support and ongoing material leadership shiffer equities worldwide -- shift for equities worldwide? eric: i would caution a couple of points before i say broadening out as a good thing. we really look at data with respect to corporate i.t. budgets and where cfos are spending money. where they are actually spending. that means things like big data, robotics, cyber nai -- and ai. we think as a relative return investor you want to be at least market weight that category. i would say with respect to the consumer, even though there are things like luxury goods popping in china, stimulus and what have you, the broadening out will be a gradual one. one thing we are encouraged by

is what is happening in real estate. that has been the slow-moving trend we have all seen about the crash but has not happened yet. the fact both equities and real estate credit are hanging in there says the broadening is materializing is a decent thing. lisa: why are you going in the long bonds? eric: it is one thing where i would say especially where we have been emphasizing long bonds has been in municipal space for our taxable clients. we think coffers from state and locals are in a decent spot. that is a yield curve that has uninverted first. we are being rewarded by going further out. the fair value for the 10-year is a little higher and yields than what we are right now. we have not been aggressive in government because it's closer to 4%. there has been post fed some initial buying of treasuries but that has backed off.

we would not be as aggressive in governments. we are more interested in things like structured credit and where it's more rewarding for us. lisa: to go back to your analogy -- we have been full of wonderful analogies this morning. the fed is a trainer and the economy is on the treadmill. the economy, the runner slowing down. are they a 25-year-old repairing from marathon or are they my age and slowing down? i'm wondering at a certain point -- it's true. do we end up with an economy or a fed that can go with rates going substantially lower or is this a fed that can only cut so far before ultimately they have to worry about the other side of the equation which is inflation? eric: probably not someone in their early 30's like you. probably someone in their early 50's like me. i would say there's a couple of runners on the treadmill. if we were going to equinox or

crunch fitness and surveying the landscape, you are seeing the bifurcation happen on a larger scale. if you look at all the things you have been talking about, auto loans, credit cards, things like individual company data, the lower income consumer is certainly slowing down. i just came back from a three day stand traveling around ohio see clients. people are very concerned about what may happen with respect to government policy. we don't have enough meat on the bone yet for a lot of certainty around policy and policy proposals. people are concerned about what should i do if in fact the economy slows down. do i have enough in my personal balance sheet reserves to withstand it? there is some level -- you have seen this in cash levels. it's a tough conversation to get clients out of cash because they provide some yield. i think there is a level of trepidation.

the trepidation is not normally distribute it. it's for middle and upper income consumers not concerned. lower income consumers say my personal balance sheet is a bit worse off than it was a couple of years ago. i have to hunker down. lisa: this goes to the $121 billion added to money market funds in the past week, the most back to march of 2023. there's now a record $6.4 trillion in money market funds as a lot of people are saying get out of cash. how much of this is because of the election and people are uncertain about what will happen in the potential disruption could be? eric: it is partial nostalgia. people are saying i finally have some yield and shorter term paper so i want to stick there. they have to accept a lower return doing so. also some trepidation about how things are going. if you look at what we are seeing -- look at the two-year. it's gone from 5.1% about a

weeks ago down to 3.4 per threa -- 3.4%. people are still stubbornly in cash. that's into clear signal that the full review is not necessarily -- the forward view is not necessarily the back review. they are happy to take a lower return. some of that is trepidation around what is coming up in a couple weeks. i can stand in front of it auditorium and say thank you for the elegant data. i'm worried about right now and what happens six weeks from now because there is a lot of uncertainty. jonathan: goldman said the same thing. policy anxiety putting a lid on things in the next month. how confident are you this actually gets resolved in early november? how nervous are you this goes on for a number weeks? eric: our base case is there is a swifter resolution than we had last time around. that will not be a ersatz ring from an analysis standpoint --

earth shattering from an analysis standpoint. it will probably be delayed from counties. there's a lot of money and technology thrown at this issue recognizing how high the stakes are. we can't think we will wake up on november 6 and this will be sorted out. i think markets anticipate that to some extent. i won't say there's a perpetual hall pass. given the bigger issues we are focused on, the base case is more divided government and policy inertia. the market is going to be at least happy with some level of clarity if not complete clarity. we are not 100% confident it will be resolved as quickly as it should be. annmarie: when you say swift, i'm guessing you mean within hours or days of the election. what gives you that confidence? georgia will be counting every single vote by hand. eric: likely swift measured in weeks as opposed necessarily to

days or hours. to my earlier comment, if you think about the counties and some seats that had issues and problems we can't assume that will be resolved with the snap of a finger. if you look at some of the real swing states and a lot of the great coverage your team has done, we have to think they will be a little bit of back-and-forth and the gnashing of teeth. i think from an investor standpoint recognizing the big items are in front of us. unless there is a shift towards more of a sweep from one party to the other in terms of all three branches, that's not going to happen in the judicial branch but within the legislative and executive, that's probably in environment where investors are ok if this week doesn't materialize. work investors get concern is if either party has a clear mandate but it's unclear how fast it takes to resolve. that is more the issue for

investors to think about if they buy or sell here. jonathan: have a good weekend, buddy. big week next week. tables just around the corner. eric freedman on the difference between crunch and equinox. for those of you outside of america, those are budget gems versus premium ge -- budget gyms versus premium gyms. lisa: either the use eucalyptus or some thing that is not scented. jonathan: let's get serious for a minute. this came from michael purves this morning. the real election risk is in december. i will show you the first line of the research. it's on a blue or red sweet but a narrow win by harris that becomes contested by trump. that is the real risk going into year-end. annmarie: and it's more difficult to have a clear-cut answer a few hours or days after election day given what we see going on in the state. pennsylvania had the opportunity during a legislative session to

start counting the votes as they come in, the absentee ballots. they have to wait for election day. georgia says every single vote cast has to be hand counted. this is going to take a very long time. you see both sides, especially the trump campaign lawyering up and preparing for potentially taking this to the courts. jonathan: nothing to see here. equity futures turning positive on the s&p 500. opening bell and one our in 15 minutes away. stories elsewhere with yahaira. yahaira: eric adams due in court today facing charges of corruption and taking illegal campaign donations. it's unclear whether the indictment is the last word on federal investigations involving the adams administration. federal prosecutors are believed to be leading multiple inquiries. adams vowed to remain in office but the governor has the power to remove him if he cannot perform his duties while fighting the charges.

kamala harris is holding a razor thin lead over donald trump in key swing states. new polling showing the vice president leading among likely voters by seven percentage points in nevada and five point and pennsylvania. she has a very small lead in arizona, michigan and wisconsin. early does within the poll's margin of error showing it could be decided by the narrowest of margins or come down to a single state. more than one million homes and businesses are without power after hurricane helene made landfall on the western coast of florida last night. the national hurricane center warning the storm could still bring life-threatening storm surge, winds and heavy rains across several southern states. that is your bloomberg brief. jonathan: we will catch up with you in about 30 minutes time. up next, the morning calls. plus,4 o --stephen trent of citi. that conversation is up next. ♪

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jonathan: the opening bell one hour and 12 minutes away. equity futures just turning positive on the s&p 500. 0.05%. morgan stanley maintaining the overweight rating on costco siding strength three e-commerce momentum. increased confidence in the retailer's winning position in the near and long-term. bank of america downgrading hp to neutral from buy siding margin erosion in the company's printer division. the stock off by 3.6% in the premarket. stephen trent reiterating his neutral rating on southwest airlines as nsi stock buyback and new passenger policies

suggesting the management team remains in the driver seat. good morning. good to see. stephen: thanks for having me. jonathan: let's start with premium offering at southwest. how does it compete with others in the market? stephen: great question. i think that the premium you will see from low-cost carriers will not be the same you would find on a delta or united. post-pandemic there's an urgent push from discount airlines to start the penetrate the market. given the structural changes that occurred since covid 19, unless your name is delta or united and maybe one or two others you have been in a tough spot. there has to be a way of generating more revenue. lisa: is this setting the bar really low? you get a seat if you pay extra. an assigned seat and you don't the wait in line. on frontier, you can pay for your can of soda. is this the path of travel? stephen: somewhat yes.

we are not going back to the pre-pandemic period where you had a lot of high block utilization and adequate air traffic control capability. if you are a low-cost airline you win the battle and having the strongest seat cost profile with a lot of flights every day. if your network airline, you will never win the seat cost battle. it's on strong unit revenue. today with a cost converting sets we don't have the faa capability, air traffic control shortages in some places. there has to be some sort of push to premium. for the low-cost airlines, the discount airlines there's a limit. lisa: why are you more positive on the stock? you maintained neutral. why are you skeptical? stephen: are they doing things that are going to help move the needle in terms of earnings and profitability? yes.

when we look at what they said at yesterday on a long-term basis, $4 billion in a committal -- incremental -- total cash flow $20 billion by 2027. free cash flow conversion is pretty weak versus where was pre-pandemic. in each case you had three and three. there's a big earnings quality issue here even as we are getting that large and committal number. annmarie: how to capitalize on the crowdstrike outage? stephen: you had some demand spillover from delta and others. annmarie: are those customers sticking? stephen: that is hard to say. i would say no if i had to take a guess on that. people have a lot of travel disruption from this massive outage that led to

thousands of flight cancellations. you look at the other carriers. some did not have much capacity to pick up extra passengers. the flights were already full. july is a really good month for unit revenue. some did have capacity and took the extra flow. i will say that's temporary. lisa: what i find fascinating, the airline story is it is the perfect microcosm of the haves versus have-nots. people able to spend and pay for premium. those carriers are actually doing really well. they are able to capitalize on that. those trying to cater to lower and middle income families going on trips, they are struggling. how much does that reflect the different you are seeing in the fates of the different populations? stephen: i think that's important. if one looks at some of the discount airlines that may be pre-pandemic catered to nonprofit people going on trips. college students.

i'm not saying travel is gone. when you look at what happens economically in the last couple of years, interest rates have been very high. maybe some of those folks are traveling less because they are unfortunately falling behind on other things. for folks that are doing more blended travel post-pandemic, many are no longer in the office five days a week. that has changed travel patterns. consumer behavior, including the way they purchased tickets. a lot of those folks still have money. in some cases the trouble they are doing is at least partially on their employer's dime. there is a purchasing power difference when you look at the models. jonathan: topic right now at the moment? stephen: delta is the favorite of the u.s. airlines. i would highlight we have united airlines on citi's focus list. jonathan: the most disruptive

part of traveling i think for a lot of people, boarding. what are they going to do with baggage fees? this happens every flight we go on. there are too many bags and they try to find a space for them. our removing from a model where they are about to start charging us for the carry-ons? stephen: i think on a widespread basis that would cause a lot of disruption. you can see in the case of checked bags -- jonathan: it's an issue. stephen: on a widespread basis charging for carry-on bags seems a bit extreme versus the price point that most people are boarding flights these days. jonathan: don't you have the same problem every time? trying to find space for the bags. lisa: this is why people rush to get on and they get aggressive to get on first so they can get their bag up there. otherwise you can end up with it under the hood.

jonathan: we will take it back for free. no, you need to pay for this. i'm using it for carry-on because it's more efficient and quicker, you need to pay to take that off me. lisa: you can tell them that. ok, we will make you pay for the carry-on. jonathan: i would pay for a supplement if it would quicken things up. annmarie: i can see jon holding on to dear --for dear life or his carry-on. stephen: boarding group a. jonathan: try to be a man with suit and group 1. they still try to take the suit off you. stephen trent of citi, thank you. pc data is up next. ♪

jonathan: first world problems. i get it. equity futures positive by 0.06%. pce data just run the quarter. mike mckee will break that down for you. the scores in the bond market look like this. two-year, 10-year, 30-year. 10-year down two basis points. as the economic data begins to pour out let's go over to michael mckee. michael: good morning. we have some disappointing news on personal income and spending.

a little bit of a surprise given yesterday's revisions to gdp. personal income up .2%, down from .2% the prior month. spending is up only .2%. we have a bit of a disappointment there. in terms of the inflation numbers, they come in as expected. up .1% for the headline number and a year-over-year at the core up .1% as well. two-year for pce price in excess down from 2.5, the lowest since 2021. 2.7 is the core. it goes of a tick. a month over month basis a little lower than anticipated. we are in a position to restart the debate. 25 or 50? jonathan: let's turn to the

price action. that slight downside to price and core pce unlocks a bit of a rally at the front end of the yield curve. we are down four basis points on the two-year. equities higher by .1%. the fx market, euro-dollar coming back to 111.72. let's talk about this move. core pce, a small downside surprise. remise is something jp asset management said. the importance of pce and inflation for the 25 versus 50 debate. we have become preoccupied about the importance of the labor market. based on the guidance from fed speakers recently, particularly governor waller, maybe the report is equally as or perhaps even more important than payrolls next friday. this is what kelsey barrow said. downside misses on upcoming inflation report could be enough to keep additional 50 basis point rate cuts alive. lisa: i'm glad he went there. you are not seeing a wholesale

weakness. it is good for equity markets. it does open the door to a 50 basis point rate cut which is being weighted more heavily in the fed funds futures as people look at you will going to have a fed that will be more accommodative because inflation does not seem like a threat. jonathan: it reminds me of sunny deutsche bank said. the 25 versus 50 debate was never about nfp. the case for 50 rest on policy rates come to plea above a conservative upper band of neutral. frontloading the first 75 to 100 rate cuts is relatively easy. do we start to lean into this 50 a little bit more after this data? we still have payrolls next friday. you wonder what the conversation sounds like through the weekend and into next week. lisa: right now the market is speaking loudly and screaming that yes, it's more of a consideration to go 50 basis points because why not. if you don't have an inflationary risk, and that is the main if, why shouldn't the

fed recalibrate at a more accelerated pace given you are not seeing green shoots? you can see the preeminent concern is preventing for the weakening. jonathan: joining us now is dana peterson of the conference board. lots to talk to you about the consumer confidence number from earlier this week. the data from moments ago. how are you thinking about it? how does it inform your view of where the fed goes next? dana: i think the jury is out. we have more data, especially next week's employment data. inflation is continuing to slow so the fed can be less concerned about that. if inflation flows faster than the path they outlined in this september, they can go 50. i think they need to see the labor market. i think the labor market is doing fine. when we look at the number of payroll. you don't need to have 300,000 payroll editions a month when you are pretty much at full employment.

the unemployment rate is very low. wage inflation is still elevated. there's a lot of good news about the labor market. we look at growth. if consumers continue to spend, that will mean very strong gdp growth. i think the fed is going to be data-dependent. all the data from now until november are going to decide whether the fed goes 50 or 25. jonathan: how low is the bar to go 50? the estimate is about 130. we don't need to hundred. 150 to 200 is ok. how low is the bar to go 50? dana: if you start seeing negative payroll reads or further creep of the unappointed rate, the fed looking at the unemployed rate to top out at 4.4%. the natural rate is 4.5%. if you start seeing the rate creep above that, the fed will lean on now to the downside risk we feared are starting to

materialize so we need to cut rates faster to undergird the labor market. lisa: were you surprised by how weak some of the labor sentiment was by the consumers you ended up surveying? for you surprised people felt like jobs were getting harder to get? dana: not really. the peak of the job differential was back in 2022. we know it was very easy to find a job. you had all these openings because companies were still trying to replenish their ranks after the pandemic. now companies are pretty much having all the workers they need. we talked to ceo's. 40% are not making changes to the workforce. the other 40% is saying we will continue to hire. only 20% are saying maybe we will let some people go. it is a story of hiring and hoarding.

if that is the case you will not see payroll gains month after month. we are at full implement. lisa: we saw a decline in consumer sentiment probably. it had been inflation expectations that were driving that. people felt like the cost of the goods they were buying were going up at a dramatic pace. they felt bad about that. do you think this had more to do with the jobs picture maybe softening from a strong level or more to do with things like the election and other sentiment factors that come into some of these economic points? dana: the metrics to go into her headline are -- our headline are labor market and income. those measures don't fold up into the headline. when we look at the headline it has been moving back and forth. the last reading was at the bottom of the rate in the last two years. we do ask consumers what you think about inflation. what do you think about, you

know, things impacting the economy? it is the case that prices and inflation are still cropping up. prices, the level of how much things cost elevated. they are less concerned about the rate of change inflation. we noticed the words interest rate and election did pop up at some of the write in measures. when we looked at the election over the last few years in terms of those right ins, it is pretty love -- write ins, it is pretty love. w. annmarie: i understand you have a surgical way of how you go about this survey. you talk to ceo since he was going on in the campaign trail right now. if you're a ceo and say potentially you might be moving workers to a different country because you need to save money or find a certain labor, you are going to be basically in the bull's-eye of one of these candidates. is there a concern in the labor

market that companies are just waiting for more clarity after november 5? dana: companies are waiting for more clarity, but the things they are investing in include technology and human capital. it is not the case that companies are looking to offshore people. they are trying to find people here in the u.s. certainly, the companies benefiting from industrial policies around infrastructure and factories are doing well. they are giving us a good story. the companies are more consumer facing where they see risks of consumers pulling back, they are more worried. especially since consumers are still buying a lot of services. we notice as goods prices fall, consumers are buying cars. we are not getting the sense that companies are either looking to lay off labor or move them abroad. it's a very different story. jonathan: i'm pleased you joined

the program today because you have got a lot of phone calls this week. dana peterson on the latest in the economy. equity futures 50 minutes out from the opening bell positive by .2%. i second look at the data. -- a second look at the data. michael: because of the revisions to gdp the personal savings rate for the month -- the most recent month is 4.8%. in july, 4.9%. june, 5.2%. these numbers before yesterday were 2.9%, 3.3%. the savings rate has gone up by about two percentage points in each month. they could still spend. driving the incomes this time were a half percent increase in overall wages and salaries, which is fairly strong. people have money in the bank.

the forecast for the economy slowing, i'm not sure if people are going to stick that. lisa: i'm glad you brought of the savings rate. fascinating how much it was revised up. people have not used of their cash as much as people previously thought. does that mean in some ways this was just inflation that faded with some of the year-over-year comparisons post-pandemic? does this speak to maybe we are understating some of the strength and therefore the inflation risk in the economy? michael: it's a combination of both. inflation's fade has helped but it's been hard for the government to measure the economy as we have seen with the fed. they do these updates, these revisions once a year to gdp to try to bring everything together. what they ended up doing was revising gross domestic income up significantly. that is bringing the gross domestic product and gross

income closer together. that explains a lot of what has been going on here. the interesting thing when you look at the overall inflation rate for the months, we are running at about a 1.7% for the last three months for gdp -- for pc headline. -- pce headline. the target is to percent. we have been under what the fed is targeting. jonathan: we are not doing anymore. lisa: they never did that. jonathan: they introduced that plan. michael: i asked about that in jackson hole. they said we are not ready to make that decision yet. jonathan: mike mckee, defender of the federal reserve. yields down by three basis points. 10-year down to about 377. michael contopoulos joins us now for more. welcome to the program. on the one side inflation is

coming down. jobs growth is decelerating. the fed is cutting interest rates and china is easing. we have people concerned about what to do in the bond market. should yields be up or down? michael: the bond market is giving you a pretty good signal right now. what did he do with the fed cut interest rates last week? you had the long it go up in the front and stabilized and go down a little bit. that is suggesting the fed eases policy, eases lending conditions, eases employment -- employment is still strong. profits are accelerating. china is easing. that all likely leads to longer-term growth in inflation expectations. on the inflation front, all everything we have seen has been positive of late, it will start getting harder later in the year at buehrle 25. some -- in 2025. the bond market is telling you the answer to your question,

which is longer-term growth in inflation may actually be higher than what is expected but there's always the eight to central banks one to cut. i would expect further curve steepening and lower front and yields. jonathan: what kind of numbers are you thinking about? 375 right now on 10s. what numbers should we be thinking about or considering? michael: i think we are in a range bond market. i do think that going back up to five or anything of that nature. you live between 375 and 4.25. maybe 4.5. that would not shock me one bit at all. the trend has been higher getting towards that upper 3.75. i would be surprised if it breaks 4 and the next month. i don't think we are going back to 5. we are pretty range bound. investors should think about you

get below that 3.75, 3.7 level. you are probably supposed to fade rates at that point. as you get back above 4.25%, probably adding it back. that range will be where we live until there's more clarity on the direction of growth. that is the most important thing from our perspective. lisa: it feels like pouring cold water on the glory and celebrations we have been hearing from so many people over the past week. we talked about soft landing nirvana. one viewer said its global goldilocks. fire saying don't be a hero? -- why are you saying don't be a hero? michael: i'm talking about credit risk. on the equity side i think there is tremendous opportunity. small caps, this is kind of goldilocks for them. the fed's easing policy so interest rates are not going to go up a ton.

for some areas of the market, particularly in equities, it is a bit of goldilocks with small caps being the best beneficiary of that. on the fixed income side, credit spreads are incredibly tight. all of your return is effectively coming from the interest rate component and not the credit component. even though theoretically we should love credit risk, accelerated earnings growth, easing monetary conditions, maybe stronger growth than what is expected, it is good for corporate profits and for credit. the spreads just don't compensate you for any sort of risk. we are probably later economic cycle. i would rather own, you know, decide where to own the risk rather than just overweight credit risks. something like clo's that offer you quite a bit of spread it makes more sense to us then the investment-grade market. it's about finding opportunity then not liking risk at all.

lisa: i love this. it is interesting to hear you say this as someone i have followed from a long time of your days covering the high-yield market at bank of america. i'm curious how much you have seen the high-yield market be transformed in some ways. the public high-yield market or from a canary in the coal mine, something that is separate and the trades are different with fund middles and technicals. michael: the high-yield market has been interesting. if you look at ccc debt, it's a completely different market than the rest of the market. one of the things i would argue is the encouraging high-yield at the moment. you have not really had the pickup in default radar. the radar suggests it is likely to decline in that six months on an annualized basis and get back towards 2%, a very low default rate than normal. you are right. there are all sorts of things going on in the high-yield market. a lot of innovation out there with etf's.

that transformed the liquidity of the high-yield market to some degree. that stopped liquidity that maybe don't have -- the bonds are not in the etf's. there are all sorts of things to do in high-yield from a liquidity perspective, from a risk perspective. the signals coming from high-yield are very encouraging about the broad economy and lending conditions. the spreads don't really excite us as far as being an opportunity in high-yield. why own high-yield? jonathan: 40 u.n. the team see rates year and next year? -- year end next year? michael: you love to put me down on a number. there's a lot of volatility that can happen between now and then. a lot of return can be made. by the end of next year will depend on if we are in a real acceleration or recession. both are almost equally

possible. if you're in recession, rates will go as low as 2.5%. if you are real acceleration -- reexhilaration, it could be a five handle again. trying to make the call 15 months out is difficult. it's hard enough in the next three to six months. not to punt the question but i will punt the question. jonathan: you can make the suggestion that one is priced in more than the other. michael: that is a fair statement although we are splitting the difference between the 2.5% and 5%. the market is giving you the 50-50 odds right now. 2.5% if you have recession, 5% if you have reexhilaration. --re acceleration. jonathan: appreciate it. michael contopoulos of richard bernstein advisors.

lisa: no one was to make the difference in the tail risks. they are both feeling equal and completely diametrically opposed. jonathan: things are finally balanced at the moment. an update on news with you hiram. -- yahaira. yahaira: we got the federal reserve's preferred measure of -- underscoring the cooling economy. the core pce index increased .1% from july. analysts were calling for an increase of .2%. the year-over-year data for core pce came in line with expectations, holding at 2.7%. intel apparently turned down arm holdings. bloomberg has learned arm approached intel about buying their product division. intel's response, it's not for sale. intel has become the target of takeover speculation amid a rapid deterioration of its business this year.

bitcoin is on track for one of its biggest september gains in history. the cryptocurrency is up more than 12% this month compared to an average decline of 5.9% every september over the last decade according to data compiled by bloomberg. global rate cuts helped speed of everything from stocks to golden crypto as investors bet on more stimulus ahead. jonathan: have a great weekend. up next, setting you up for the week ahead. you are watching bloomberg tv. ♪ ♪

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and private equity and debt. our experienced teams are uniquely positioned to uncover compelling opportunities in today's market, giving our clients an exclusive advantage. principal asset management actively invested. jonathan: 37 minutes away from the opening bell. equity futures on the s&p 500 firmer.

your trending diary. the calendar for today and the rest of next week. fed governor berman speaking this afternoon ahead of remarks from jay powell on monday. earnings from nike after the closing bell. plus, the first vice presidential debate at 9:00 p.m. eastern time on wednesday. adp private payrolls on thursday. another round of claims on friday. payrolls friday just around the corner. mike mckee is still with us. what are you looking for? mike: we will look for jay powell. if you look at today's numbers, if they were meeting this week they would feel great about cutting rates. they have jobs on friday which will be big. they have another child support and another pce report before the next meeting on november 7. we can't say for sure what's going to happen but at this point we have put 50 on the table again if the fed wants. lisa: we had a quiet period. any conclusion to jon's point

if the jobs number will be the most important in determining 25 or 50? is it going to be really just silly that inflation is coming down? mike: the timing of the calendar puts jobs the first place. we have the jobs report for october on november 1. it is the last major indicator before the fed meeting on november 7. the cpi report comes out october 10. october 31 is pce. the last number of people are looking at is the jobs number. we will see whether or not it pushes the fed one way or another. we should get an interesting set of comments from jay powell on monday, how he's thinking about all this. annmarie: i feel like on the limb went around the table interested in the vice presidential debate. in the swing staple voters are giving the national economy low marks. nearly seven in 10 saying it's going off on the wrong track. you just read through us live numbers that say we are going on the right track.

mike: that's been a problem for the harris and by the administration. people don't feel this. it goes back to the vibe session comment. people feel things are not good. the numbers contradict that but it has not gotten into their lived experience yet. food prices have flattened out. gas prices have gone down. maybe on election day it will have changed people's minds. half the people will have voted by then. it has to get through to them and their own day-to-day life. jonathan: mike mckee appreciate it. equities on the s&p positive by .1%. for monday, chris harvey of wells fargo, mike mcginnis of the committee for a nonservice budget, and kathy jones of charles schwab. have a wonderful weekend. what a week in the market. equities at all-time highs. from new york city, this was "bloomberg surveillance." ♪ ♪ ere ya headed?

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it's mine. you, ok? yeah, are you ok? we're fine. my serve. maybe we should stop. this pinewood pickleball champ stops for no one. we got our melons checked. she had a concussion. admitting i was wrong is worse than losing at pickleball. saving your brain is a definite win. don't mess with your melon. if you hit it, get it checked.

matt: it's september is not that bad of a month. 30 minutes until the start of trading. katie: bloomberg open interest starts now. sonali: coming up, talking about the good data, consumer spending fairly gross in the last month, underscoring