>> we are in the middle of a global easing cycle, but a fast-moving fed can open the door for that to be faster. >> we have the fed going on hold. >> this is one more, 50, then back to 25, but honestly everything is on the table for this fed. >> this is all we know until the middle of next year. >> this is "bloomberg surveillance." jonathan: closing out q3, welcome to q4, live from new york city this morning, good morning, good morning. bloomberg surveillance starts right now following five straight months of gains, four consecutive on the s&p 500 with your scores kicking off the final quarter of 2024, looking

like this. s&p 500 is down, and nasdaq 100 down by .1%. the top story this morning will be market related at some point if this continues, dockworkers walking out for the first time since 1977. lisa: this could potentially affect all of u.s. trade volume. it's not insignificant, jp morgan estimated that it was a $.3 million to 4 -- $4.5 million per day. we are talking about a pretty massive impact if it can pin it -- continues, carrying exponential risk. jonathan: powerful message from union workers, we are prepared to wait for as long as necessary. annmarie: two sticking points, one of them as wages, the other is the language around automation. over 24 hours there has been a back-and-forth regarding

negotiations when the united states maritime alliance came up with a press release offering increased wages by 50%, though they did say they would retain the current language around automation. we cannot overstate how difficult this moment is for the biden white house and, by proximity, the current candidate, the vice president, kamala harris. this is going to test them. they want to be seen on the side of the unions, but they don't want chaos on the ports. jonathan: it has the potential to be a political nightmare for the next four weeks. lisa: on every level. being union friendly, being technologically forward. dealing with a economy that could potentially be forward. talk about how the federal reserve deals with data that might be money, 70,000 jobs, you might see 70,000 jobs subtracted from the total because of the strikes we are seeing. if you are jay powell, do you cut? not to bring it down to an

ultimate question, but how do you work with data that gets messier and messier? annmarie: the u.s. chamber of commerce, you said it's difficult for the administration, they wrote a letter saying it's unconscionable to allow a conflict dispute to put this pain on the economy, but then go to what the teamsters are saying. i will not quote sean o'brien on air, he uses an explicit word, but maybe the u.s. government should stay the explicit out of this fight and allow union workers to negotiate their own work -- wages. jonathan: f-bombs -- too many f- bombs this morning. yields are lower by three or four basis points. monthly gains in the equity market, monthly gains in the bond market, yields are lower. lisa: deutsche bank without a statistic that the s&p has had

the strongest year to date advance of the 21st century so far in the third quarter, having advanced more than 20% so far this year. we haven't seen the downdrafts and it has been a grind through all the pessimism, people who have cared about the auctions and the deficits, they were pushed aside and instead the bulls reigned supreme. jonathan: i love that you didn't go people caring about auctions, but the people who cared about the auctions. [laughter] a republican senator to this morning on the aftermath of hurricane helene. and we will speak with andrew at citibank. the fed chair, jay powell, signaling that he's in no hurry to cut interest rates, writing that there is a lingering concern that the post fomc search was strange and isn't getting any material follow-through with a discussion clearly heading towards the

neutral rate. the good thing about that is we all know it is a number somewhere between zero and 5%. sarcastic peter joins us now. we will get to the neutral rate debate in a moment. what was strange about the post fomc surgeon this equity market? >> markets sold off a bit, giving up earlier gains. the surge occurred overnight. last week it kept bouncing around. we spoke to technical experts. look like higher highs by significant amounts and then intraday it turned. even yesterday we were doing ok. powell then came out and said that it will be slower to cut, markets will sell, rally stronger than the end and right now they don't seem to know what to do with the news going on. the economy, slower than he thought it was, that's what i got out of that interview. a lot of bulls out of china

getting excited and bullish. are you saying they shouldn't be? peter: two separate stories, i would be surprised if we got revisions on the bane of everyone's existence. i don't know how the market will react but we have to price out the fed a bit. ultimately, the chinese stimulus will help the chinese companies and maybe the chinese economy, but it won't translate well to u.s. economies. the selling pressure in the u.s. as opposed to buying in china, which has been off and on, will continue and accelerate after the brief parabolic move. lisa: there's a lot to impact, but with this upward revision, what do you think the market response will be to ultimately what should be treated as good news? peter: since i spent most of the last year are that payrolls were

overstated, all sorts of seasonality things that have been a big issue, like too many jobs in january and february with misplaced seasonals on demographic shifts and covid, so now all of a sudden everyone is talking about downward revisions, how weak payroll has been. even powell mentioned the potential for overstating, so for me it's a big shock to the market to get a decent number. break the trend. the market sells off hard on bonds, 4% very quickly if we get something like that on friday. lisa: and stocks? peter: that would derail it if we got there in july. i'm talking about a number like 130 to 160 on jobs. not great, not like so good that stocks have to rally, but more like something that takes the fed off the table, which is what we had been relying on. lisa: we have been inundated by

beaker geopolitical and domestic stories that should move markets and absolutely don't. we have been befuddled all year by a number of stories like that. now we have the biggest dockworker strike since 1977 that could potentially affect half of u.s. trade, dealing with the aftermath of one of the most catastrophic in terms of damage storms in the united states. will any of these incidents affect your view of what's going on? or can we ignore it like everything else? peter: you can add israel starting a ground attack against hezbollah yesterday. so far, markets are not responding. we have dealt with hurricanes before. we will get through it. fema will get their act together. we had brief disruptions from houston a few years ago. markets of learned it is awful for the people involved, but it tends not to have a protracted

effect on the economy. dockworkers, everyone wants to see if the government responds and if they take an action. where does it play out? that will take time to grow. what is growth -- going on in the middle east, i continue to believe that what we are seeing is israel escalating to de-escalate which is why we are not seeing a big response from that. the proxies have to be getting scared. the escalation by israel is likely still pushing towards de-escalation when we realize that the proxies are probably going to run scared and calm down over time. annmarie: you put out a new note about israel with a number of generals around you at academy securities. are they concerned that we are closer at this point to a wider escalation in the region, bringing in more proxy groups, given the fact that over the past few days we have had israel not just fighting with hamas, gaza, and lebanon in the north, but also striking the who these?

-- houthis? peter: we see that is a risk, but they did have that balky at -- pager attack and then they went after groups in personal meetings. hezbollah is in disarray. the belief is that every proxy is wondering what has been tapped into, how secure are they, are their lives safe? there is a window of opportunity for them to press hard against the proxies and iran has been impotent, right? not all of them say this, but a core group says that iran really hit a stride of damage against israel with that thousand drone rocket attack and it failed. they cannot have a second such a failed attack. i think that our generals as a whole view it as the right steps from a military standpoint against israel to take advantage of this dislocation.

they will push it. unfortunately, again, this will be quick, they will have to go through houses to search for weapons. this will be the headline for the next couple of weeks but from a military standpoint it's the right week to take advantage of this and keep proxies on their heel. a couple of our generals noted that deterrence is awkward, it's hard to manage deterrence without using force, but that is where we are at with israel. annmarie: do your generals think that the u.s. has set a level of deterrence? peter: i think it is very supportive to the region and it is going to give further cause for iran to attack, right? without carrier groups, iran might get more aggressive in response, but i think that iran was very reluctant and scared, frankly, to involve the u.s. directly, helping to tamp down iran and israel to deal with the proxies. i've got breaking news on boeing

but i wanted to touch on china before we go. what's the best way to play it? peter: yesterday we went out saying you should take a little bit of profits because it's a huge gain. china has been semi-porous. i do think you want to start buying back the 32 right now, a decent proxy for china getting up to 40. their internet names that people recognize, they do do better faster. this is going to be a slow thing. just like the whatever it takes moments, we had this huge coverage where everyone said now it's over, we can get back to hating chinese stocks, but it will sink in in the coming weeks and months that this is good for china and chinese stocks, good for domestic brands. unfortunately for me this just gives china time to do the made by china strategy, pushing their brand more aggressively globally . keep an eye on that but the

beneficial's will be the chinese stock market and yesterday's selloff was normal after a parabolic move in there will be a steady grind higher from here. jonathan: something that you said repeatedly last year. boeing, the stock in the premarket is down by more than 3%. they are said to be considering at least raising $10 billion in selling new stock in line with capital ratio at jefferies a number of weeks ago. lisa: they are hemorrhaging cash, right, something like a cash flow of $3 billion per quarter with the company working with advisors to explore options, something a company never wants to have to say. they are discussing raising equity. maybe not right now, but down the road, because they want to understand the financial implications around the fact that their workers are on strike. it's a company with a lot of questions around it, they need a lot of money and it's becoming apparent. jonathan: boeing is down by 3%.

elsewhere this morning with york bloomberg brief, here it is. >> hurricane helene has killed over 100 people across six states, most victims dying because of flooding. the economic loss from the storm could be between 140 $5 billion to $160 billion, making it one of the most destructive storms on record. joe biden says he will be touring north carolina by air tomorrow morning. "the wall street journal" reports pepsico is an advanced talks to purchase cfa foods -- siete foods. the deal could be announced soon at a time when they are drawing takeover interest from private equity firms. president jimmy carter is celebrating his 100th birthday today, making him the first american president to live one

full century. he served one presidential term from 77 to 81 and work for more than four decades, leading the carter center, which he cofounded with his wife, rosalyn. he's been living in hospice care for the last 19 months. last month his grandson said that the former president was trying to make it to vote for kamala harris. more from jonathan: -- jonathan: up next, dockworkers go on strike. >> my colleagues at d.o.t. came to with -- came together and the best thing that could happen would be for the parties to quickly come to terms. jonathan: we will talk about why that's not happening, up next, from new york city this morning, good morning. ♪

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jonathan: equities right now on the s&p 500, negative by 0.0 6%. can't believe i'm saying this this morning, q4. where did q4 come from in 2024? lisa: we have been through 25 narratives between now and q4, 25 different election cycles, 27 different geopolitical threats, and now here we are, staring down the barrel of the most volatile month, shellshocked over what could happen next. jonathan: hard landing, no landing, soft landing, i'm not sure what we are getting back to, but under surveillance this morning, dockworkers go on strike. >> just today my colleagues at d.o.t. came together with 60 different players across logistics and supply chains to make sure that we are mapping everything and anything that needs to happen in terms of

flexibility adjustments around road, rail, and the different ports in the united states. the best thing that could happen would be for the parties to quickly come to terms. jonathan: every major port on the u.s. east coast and gulf coast screeching to a halt as they go to strike for the first time since 77, saying that they are prepared to stay on strike for however long it takes, the walk out threatening to ripple through the economy and reshaping the final weeks of the presidential election. david, let's start here. how wide is the spread between the dockworkers, union leaders, and companies? david: there was an overture last night, but it has been very wide for a very long time. they had reached out offering more money to the workers, but obviously very late in the game. it seems pretty wide, still,

although maybe there is more momentum here to talk as it picks up speed. a difficult circumstance this week and as days go on we will see the economic impact. annmarie: we saw this close to 50% wage increase from the employer but they seem unwilling to change the language around automation. how much is that becoming the cudgel? david: it's a huge issue. former president trump seem to -- seemed sympathetic. it's a huge castle -- cudgel and a huge issue going forward but the industry itself is changing, how do you forestall those changes if they lead to layoffs or contractual forces going forward? that language will be key. annmarie: the politics of this are really interesting because this is one union who hasn't made a decision about who they would endorse, though they went for 2020 geithner. david: and -- biden.

david: and the head of the teamsters said that the government should stay out of it and that's the debate that will be here, what role does the administration play? joe biden saying that he will stay out by principal but it will be difficult as they go on with back channel conversations happening. annmarie: where do those conversations stand today? david: over the weekend we saw the economic and commerce departments reaching out to try to get both sides to come back to the table. now i think everyone at this point is looking at what's happening here to try to figure out how long this is likely to last. lisa: do you have a sense that the timing isn't a coincidence, that it is in tandem with the election cycle to try to put pressure on this administration to grease the wheels for a better deal for the union? david: i don't want to be

conspiratorial, but it isn't good, five weeks out from an election, it has added pressure for them to come to an agreement now. it's of a greater advantage for them to be going to this now as we head towards the holidays with people buying gifts, food, all kinds of things for the holidays. i don't want to ascribe it to that, but it is a pressure point. lisa: how much is this happening now because workers have more leverage versus sort of the last gasps of leverage before a shift in the economic and temperature at the white house? this question of trying to get ahead of that, using that before some real shifts in technology, as well as in the political sphere? i'm wondering how much of this is an effort to get the white house intervene on the part of the union, to try to get this deal through before the window closes. jonathan: over the last -- david: over the last few years,

unions have gotten bigger and bigger and there hasn't been a strike like this in decades on the east coast with a shutdown like this. there is a broad sense among labor that they have this power now, there have been a string of successes. i think that they feel like, the workers feel like they have more influence than they have had in many years. jonathan: certainly a great opportunity for them. in a moment we will be catching up with east tennessee, which has been a disaster zone. the western portion of your sort -- your state have as well. how bad are things? david: one friend described to me leaving her house without power or communications and hiking to the hospital to work there and both of them tell me it's hard to fathom the level of devastation in the state and it's about being able to access these communities. we heard from the governor of north carolina yesterday, a lot of the supplies are being brought in area late.

the flooding is intense. no communication or power in a lot of these places. just having that ability to get in and out of these communities, i have seen the comparison drawn to katrina. it's a smaller population, remote, a lot of poverty, and the devastation, they are coming to grips with it. jonathan: shocking pictures coming out of these states. lisa: over 100 people declared dead and a number are missing. 160 billion dollars expected necessary to rebuild some of the devastation. real question of what this means for the areas most prone to hurricanes given that it is in land, away from the coastlines, and flooding. it's a storm that just sits there and keeps dropping rain, just new issues for people to think about. annmarie: how many people are stranded because there is no

nine 11, nonexistent phone lines, you have to actually track to local emergency services to get help? so many questions and unknowns. jonathan: at what does the voting look like in these states over the next month or so? lisa: early voting -- david: early voting began in some places, they are taking steps to figure that out. we will see what is true in the coming days. certainly a compelling issue. jonathan: david, thank you for your time this morning. david with us there on the strikes and disaster zones across the east coast -- i think we can call it that. lisa: there's no other way to describe it, people locked out of their homes, no reception, and a new fear that people haven't felt before, especially in areas that became newly popular, like asheville. what does the future bring and what are the political implications heading into november? jonathan: we get to those in a

moment. we catch up with a republican senator on the future of helene. a little bit softer, essentially unchanged, 0.04%. yields, lower by close to four basis points. from new york, this is bloomberg. ♪ i can't believe you corporate types are still calling each other rock stars. you're a rock star. we're all rock stars. oooo look look at my data driven insights, i'm a rock star. great job putting finance and hr on one platform with workday. thank you! guys, can you keep it down. i'm working. you people are (guitar noises). hand over the air guitar.

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jonathan: five months of gains on the s&p 500 kicking off october in q4, the nasdaq 100 and the positive. the russell on the quarter, q3, close to 9%. a stunning rally for the small caps. jonathan: that was oak -- lisa: that was a quarter marked by the outperformance of the russell 2000. the real question is can that continue? jonathan: these are moods we haven't seen on the 10 year going all the way back to 2010, which i was very surprised by. yields, i was surprised. the two-year yield, following

those comments from chairman powell yesterday afternoon. lisa: looking forward, policy moving to a neutral stance over time but we are not on a preset course. that was his comment yesterday. we heard from goolsby yesterday and it was all over the place. basically coming out and saying that he was supportive of a 50 basis point move and that they were the herald of inflation as the resident hawk, goolsby saying that we needed to cut aggressively and get it down. where does it leave us? does it change the scenario that much? jonathan: chairman powell perhaps coming out to say that we are a long way from neutral. i heard a chairman that was much more confident about underlying growth in america following recent data. lisa: which is why you saw a bit of a selloff in treasuries with people saying that he's not

super dove, he's more balanced. does this mean that the larry fink and black rocks the world are correct, the market has gotten way ahead of itself and they need to temper themselves? how much of that is a risk? how much does it matter for the likes of risk assets given that the good news, ultimately, should be good news? jonathan: payrolls around the corner, euro-dollar negative, 100 1088. headline cpi coming out earlier, dropped for the first time since 2020 one, conversations about big rate cuts at the federal reserve? why are we still not having them at the ecb? lisa: euro region inflation rate, 1.8%. you have the prospect of a recession, and entrenched recession in the biggest economy in the region and christine lagarde saying -- let's check the data as it comes.

people are now kind of baking and a host of rate cuts by the end of the year. jonathan: under surveillance, israel beginning targeted round rates against lebanon, their forces targeting villages close to the border that pose an immediate threat to israeli communities. annmarie: the key where there is targeted. they had an understanding that the scope would be towards and limited to the border. one big question based on the calls that are happening is what will list -- what will lebanese hezbollah do, will there be a retaliation? they have these statements about the idea that i don't want it to expand and they want to see peace in the region, how does this push diplomacy down? i was struck five floyd austen put out yesterday as they agreed

on the necessity of dismantling the attack infrastructure on the border. lisa: to put it another way, how much do they have to do to get the people in israel back to their homes in the north? ultimately that remains to be one of the big questions. jonathan: want to turn to this story, quick update for you, dockworkers walking out of every major port on the gulf coast since 1977. trying to contain auto shipments from houston to miami with economic loss being between 3.8 to $4.5 billion every single day. andrew will be with us in about 15 minutes from citibank. look out for that. in new york the only scheduled vice president debate, candidates aiming to boost momentum when they take the stage at 9 p.m. with election day five weeks out. annmarie: ending the election

cycle on a final debate that is the top of the ticket. their mics will be hot, potentially there will be real moments, tangible moments with a back and forth. they have been sniping at each other for weeks, this will really come to the forefront today. interested to see the kind of movement they have on the microphones. the whole point of a vp is to do moat -- do no harm. who does harm today will depend on who wins. lisa: i'm curious, what's the point of this? jonathan: the debate? lisa: this particular debate. policy? favorability? is this like mma where people want to see who gets a strike out i'm actually curious, i wonder how much this is going to actually determine policy beyond what we have heard. annmarie: a lot of style, a little policy, but i think it depends on the viewer. these men are pretty relatively unknown, especially governor walz. they might be kings and the

midwest, but on the coast they are not well known it is a chance for both of them to acclimate to american society. jonathan: stay, it's at hurricane helene, millions without power, cutting people off from freshwater. republican senator bill haggerty of tennessee joins us now. senator haggerty, thank you for joining us now. i know that your state is going through a lot right now but i don't think the rest of the country understands the magnitude of what's going on on the ground. can you share with us what you have seen? senator haggerty: the devastation is enormous. they talk in terms of the events of 100, 200 years, 500. we saw one of those in 2010, concentrated around nashville. this is 1000 years, we have

never seen anything like this. it was explained to me based on the volume of water coming from this rainfall, this storm, if you spread it across the state it would equate to the depth of three feet of water across the united states. i was speaking with the director of the tennessee utility yesterday. the water was ankle-deep, he told his men to run, and five minutes later it was chest deep. it will forever change the terrain in this part of the country. i was with the mayor in -- i was with a mayor who disembarked a black hawk helicopter to come talk with me. she said they need oxygen and they have had to use helicopters because these towns and cities were cut off. they lost bridge access, road access, there was no way to get there except by a military helicopter. national guard has stepped up

tremendously. as of yesterday there will be between 250 220 guardsmen on the ground. we have to get the cruise in here now. they are doing everything they can, working with tennessee emergency and is to step up and get resources and assess the situation. the water has receded adequately to see the massive amount of damage, but people are hurting badly right now. we need oxygen for the people who need it, we need to get it to the landlocked, people who cannot access roads and highways. jonathan: you alluded to it, let's build on it. are you getting the help that you need from the federal government? senator hagerty: my job is to make certain that we do. i spoke with the white house yesterday, i'm sure i will speak with them again today and will continue to update them to keep pressure on the situation. all eyes are pointed towards florida, that was the initial landfall in the beginning. but far more is needed of hearing tennessee now.

i spoke to my colleague, ted budd, yesterday, western north carolina was hit extremely hard. you have entire communities that were isolated. the water management system here is enormous. there are several systems, they are on boil water alerts. imagine how the water gets to these communities. they use bridges. not only to transport vehicles and people, but the bridges have pipes running underneath them that they are using for water supply. the bridges are outcome of the water supply is gone. tennessee valley authority, largest utility in america, the most sophisticated when it comes to water management damage systems, they have done a tremendous job getting people back online but we have 16,000 people, 18,000 people without access to electricity. thankfully, it is the fault, the weather is mild, but we have to manage the level of our lakes, manage the system of dams so

that we can get the water moving out of here. there is another storm moving in the atlantic that if it turns in the wrong direction could be here in a week. annmarie: great to hear that you're getting the help you need right now but yesterday biden was asked if congress should return for a special session, and no decisions have been made. do you think that congress needs to return to make sure that places like tennessee you can get the aid that you desperately need? senator hagerty: i would be all for that. we are looking at ways to accelerate funding right now. this is a critical situation, one that we have got to address. we could do it in a day, but we need to do everything we can. citizens where things are going to get worse by the day as they don't have access to water and electricity and importantly, no critical medical care, oxygen -- think of a kidney dialysis, those sorts of things, this will get more and more severe as we move along. the ground is also saturated.

if we have another event, it will be much worse. we have to deal with this as rapidly as possible. annmarie: you talked about the power outages. many of the reports we are seeing are that many cannot even call on 11. do you have a timeline on when power will be up and running? senator hagerty: tennessee valley authority is working on this. i met with a big part of the team yesterday. an important piece of this, though, is getting broadband backup. wireless isn't working in the area. i spoke to a school principal yesterday, he is missing a number of the children in school. doesn't mean that he they are in harm's way, but he cannot communicate with them in that is creating tremendous anxiety for families who do not know where their loved ones are or how to reach them. the tennessee valley authority is working night and day on this aspect. lisa: have there been any

discussions around starlink? i know that was floated. senator hagerty: that is being utilized right now. we will continue to see how we brought in that access but starlink will be an important part of that. lisa: you mentioned the land being flattened and if there's another event there could be an escalation of the trauma. how do you develop that land and recover from this and give people the confidence that there are new stakeholders in place that can protect, should there be another massive storm coming through? senator hagerty: as i said, this storm is so unique, we haven't seen this magnitude in a quarter history. -- quarter century. at the same time this has put us in a much more vulnerable situation. the saturation in the ground,

the water treatment facilities that are out, it will require incredible management over the next week to make certain we are in the best possible condition to take another hit like this. i will share with you a story of what's happened here in the past couple of days. an important bridge to get to the community was tested, the bridge was ok, but a 2000 yard segment of the approach had been washed out. local county managers are out trying to assess what to do it a gentleman came up with a bulldozer saying maybe i could help in the next thing they knew he brought more friends in several pieces of equipment and 36 hours they had worked through the night to rebuild this 2000 yard section and the bridge is open now. that is a tennessee volunteer for you, outpourings of help that you have never seen before. but we actually need the removal of things, things that require certain expertise like expertise

-- like water management coming back up. thank you for giving me a chance to explain this to the people of america. jonathan: and thank you for your time, sir. that's a good way to finish the conversation. people want to help, what's the best way people can contribute to your efforts? senator hagerty: the red cross is on site right now, they have networks in place that can work with this. tennessee emergency is on the ground and knows how volunteers can come to help it work and we had a tremendous amount of damage to work through. this is going to date not days, not weeks, but months to navigate through it. i will say this, our systems have held up remarkably well. the tennessee river is an incredible water system. it's been in place for decades and it has proven to be extraordinary. i was at the operations center yesterday that they used to

manage the various levels of water. it's incredible what they have been able to do and accomplish, the damage could have been far worse without this technology in place. jonathan: you are in our thoughts. thank you for being with us this morning. a difficult moment for tennessee and for many states across the country. lisa: we are just beginning to understand the depth of the damage done and how long it will take to recover jonathan:. here is your bloomberg brief. yahaira: boeing is considering raising funds by selling stock. they are looking to replenish cash reserves that had been further depleted because of the ongoing strike. this follows their near catastrophic accident back in january that force them to slow production on the 737 max airliner. meanwhile, michael dell has unloaded more dell stock, 10 --

selling 10 million shares of his namesake company stock. this marks his second significant sale since september. earlier he sold 10 million shares worth 1.1 million. the stock is up to 55% year-to-date date as they benefit from investor interest in artificial intelligence companies. baseball legend pete rose died at the age of 83 on monday according to a cincinnati reds spokesman. he had a storied career, winning three world series championships and making 17 all-star appearances. he maintained for years that he never bet on baseball, he did admit in an autobiography that he did wager on the reds while managing the team. he continued to insist that he only fed on them -- bet on them to win and never manipulated the outcome of any game. jonathan: thank you, appreciate that. ports across the country, running to a halt.

>> anything that is a negative supply shock, the impact is never good. jonathan: that conversation, just around the corner. ♪ personalized financial advice from ameriprise can do more than help you reach your goals. i can make this work. it can help you reach them with confidence. no wonder more than 9 out of 10 of our clients are likely to recommend us. ameriprise financial. advice worth talking about.

jonathan: hsbc some of the most frequent question that we get, what does it take to make you bearish upside risk, more on that later. s&p futures, totally unchanged, the bond market yields are little bit lower. 10 year, let's call it 3.74. ports across the country are running to a halt this morning. >> we have gone through in the last year or two with a big strike in the auto industry. we have gone through the collision with the bridge that

affected shipping. anything that is a negative supply shock in our language is going to raise the costs of doing business or lead to shortages. that is something that we are just going to have to deal with. the impact is never good. jonathan: dockworkers launching a strike for the first time in 50 years, andrew at citibank, saying that if the strike goes beyond a few days shortages could slow production and raise prices for manufactured goods like autos. andrew, in your research, welcome to the program, you used the word escalate. spend some time telling us about the economics of this. the longer it goes on, it's more like this? andrew: the first few days, the economy can handle. it should be stocks of inventories at the dock. in the inventories. first you worry about things like perishable.

bananas are getting a lot of attention, appropriately so, almost entirely imported. go a few days, there are unloaded bananas that start to no longer be the nice fresh bananas that you like and you run out of bananas. that is one small issue, right? you could switch to apple's were other things. but bigger things, do you have inputs on the production process that you cannot substitute for? are there semi conductors on a ship offshore? are there imported other components to the process? that is what we are really concerned about. that could take days or weeks to start to show up, so that absolutely sucks to escalate as it goes on. a lot of people saying that it will take about a month to get things back in gear if it goes along for a significant amount of time. how are you gaming out the economic ranges that we can see depending on how this really turns out? andrew: it opens up the

distribution of outcomes. a lot of what we were talking about, we have seen strikes before. looking at the prior strikes we try to get an idea of how this could affect us. the west coast, some years ago, the west coast imports different products. we remember this so well from covid. it's really hard to gain this out and look at what that individual component is. what's the widget that you need in the production process that you run out of and to your point, how long does it take you to restock once you have had disruption? lisa: there's been a lot of questions around the accuracy of the economic data. throw in this storm, how do you back out those potential one-time disruptions and understand what the data is telling us? andrew: i keep talking about the july jobs report and we spent a lot of time talking about the effects of hurricane beryl. whether it was obscuring what was going on. the events we have had over the

last couple of weeks, the strike, other strikes going on, hurricane helene, of course, with that human caused and economic costs. that is going to be much more significant than what we saw. if you thought that made it difficult to determine the july jobs report, in this one that we will be getting this week, it should be clean but it might be the last clean one for a couple of months. annmarie: when it comes to the input costs arising, what sectors would see that? what sectors of the most inflationary? andrew: the first place that you will probably see this is perishable goods, things like fruits and vegetables. now it's not clear how much those prices will rise in the short run and how much does the retailer increase price because they are out of stock? that's what you tend to see. is it absorbed by retailers? to your point, as you start moving into the production

process, it could be a few weeks from now, where you can't import a car. it could be a months from now, where you cannot produce new cars. that is where retailers will have to start to say that we actually have to raise these prices and have a shortage of goods, raising prices. like goolsby would say, it's the kind of shock you don't want to see in the economy, because it raises prices and it slows growth. jonathan: speaking of shocks, we have multiple numbers coming in on friday. what is going on over at city, where does this come from? andrew: it's not hard to get to that number, that's what's interesting about the forecast to me. the argument is if you look at a six month moving average or a larger moving average around 150 thousand with payroll, there is an argument for 70 that we are running in the private sector.

90,000 jobs per month. and then we have some specific areas of weakness where we have seen construction activity slowing down and still have a lot of construction workers. we saw this last month where we had a big decline in manufacturing payrolls. we had already seen several months of weaker manufacturing data and we thought that the employment data was going to catch up with what we saw an activity. the point you are making is a good one, there are a range of outcomes possible. jonathan: should i be scared of 70? andrew: you should do. we usually only see this going into a downturn. i thought it was interesting that chair powell was asked this question yesterday, the rise in unemployment rate, is it a supply story? he said that at this point we had to look more at the demand side. jonathan: that is your camp and

it has been for a while. looking ahead to payrolls friday, 150 on friday. andrew was looking for 70. lisa: and the data is only going to get messier from here. there are only 1000 varieties of banana and we only need one of them, it's potentially fragile and potentially it won't be there for your breakfast. jonathan: you can have apples, instead. lisa: but that is also threatened. no fruit. jonathan: no fruit for you. coming up, lisa mcclain of michigan. dani burger on the strike. and we have lindsay from goldman sachs. the second hour of bloomberg surveillance, up next. ♪

>> we are in the middle of a global easing cycle. a fast-moving fed could make that faster. >> i think the fed could go on hold. >> is one more, 50, back to 25, but everything is on the table. >> the impact won't be known until next year. >> this is "bloomberg surveillance." jonathan: the second hour of "bloomberg surveillance" starts now. five months of gains in the equity market in the bond market, kicking off october at

q4. futures are just about positive by 0.05 percent and on the nasdaq we are positive .3%. the scores for q3, the s&p are up, the nasdaq is up, the russell is up around nine. lisa: this has been the story of q3, yields are lower in fueling the feeling that we are on the cusp of a cycle that could lift up the other 493 stocks and beyond. the question now is has the market gone too far, too fast, with respect to rate cuts? and could not save anything? jonathan: we are data-dependent. look out for that. working our way through the week, we are heading towards payrolls. lisa: the key question is how high or how low is the threshold for this federal reserve to come

in with another massive rate cut? i would argue on the flip side, mike wilson or peter scheer, there is a real question about how hinged the market is to an upside or downside surprised. earlier this morning saying and upside surprise could cause a bigger selloff as people recalibrate how many rate cuts could happen. jonathan: economic data is always nuanced and difficult, it could be even messier. lisa mentioned this, we are talking about the first major strikes on u.s. and gulf ports since 77 and i was -- and the longer it goes on, the messier it gets. annmarie: half of u.s. trade, it could be a tremendous amount of chaos at these ports. two andrew's point, in the beginning it's not the impact that you will feel almost immediately, but then they can go up, bananas or semi conductors, it could potentially have an inflationary impact on the economy.

jobs. the crisis going on in these southeastern states when it comes to the hurricane, how messy will the next report be? lisa: andrew was talking about hurricanes causing questions over the summer and it wasn't nearly as significant as any of the things we are seeing now, even taken as an individual. meanwhile, morgan stanley and seth carpenter coming out saying that 70,000 jobs have to be taken off the total as a result of some of what we are seeing right now. the data has been difficult to interpret. it has been difficult to understand the cycle. imagine how much more difficult it could get. jonathan: the october jobs report has been a mess and he will get that two days after an election that we might not know the outcome to. lisa: that is perfectly framed. how much of a black box is this and is the market operating to understand the function and the

trajectory of the economy? this is the reason the bifurcation of the upside and downside of this economy has continued to grow despite the ongoing string of data we are supposed to be dependent on. jonathan: we have said it repeatedly, flying blind into 2025. after the run we saw in the bond market, five months of gains for treasuries, yields declining for five consecutive months, down again and kicking off october. down to 300 74. coming up we will catch up with principal asset management. and a republican congressman, lisa mclean, on the swing state politics of michigan with dani burger as thousand support workers walk off the job. u.s. stocks are posting four consecutive quarters of gains. at principal asset management they wrote that the attractiveness of cash has declined and there are some 6.4 trillion in money market funds

representing an important tailwind for risk assets and the author that joins us for more. you sound bullish. talk me through how and why cash is going to go. >> we are bullish. not openly but we are cognizant of risks. the federal reserve is cloudy and difficult to navigate. with regards to the data you are unlikely to see a recession materializing. it's not the first three quarters of the year that we saw extending with monetary cash,

you know that there are gains behind the risk assets. jonathan: this is precisely behind what's been building over the last few years. the story around the world has not been great. with that in mind, is it time to reach in on some of that story, cut the overweight, redeploy the capital abroad, look internationally, and something people are asking themselves is i have seen this a few times, head fake after head fake. i know how this ends. is it different this time? >> i don't want to use those words, i will get told off by my colleagues for saying that, but it's not necessarily pulling away from the u.s.. with all of that cash that needs to be deployed somewhere, it's about whatever you are going to add. valuations around the world, in some pockets, not everywhere, are some -- are quite

attractive. china is an interesting story. we have a lot of skepticism about how much it will be sustained and how significant the services will be that are implemented, but we think there will be positive benefits from a risk sentiment perspective. there are places outside the u.s. where we can think about -- but also within the u.s. -- we have all become accustomed to having exposure to the mag seven and we are retaining that. lisa: i want to understand the bullish case and what has been priced in already around stocks in the fed. in your bullish sentiment, how much of the rally hinges on this rate cutting cycle that will pick up steam, even if we don't necessarily get really negative employment data? >> some things are hinged on it,

but with these kinds of valuations, to have a cleanout like this in another 25% move higher, we are thinking more about single-digit returns. there is a lot of uncertainty around how much the fed is going to cut in the next few months. will they frontload our are we looking at a more extensive cycle? we know the fed is committed to a soft landing. they started to cut rates against a backdrop of positive growth. that's a very positive backdrop that should issue a soft landing. against that perspective you should have continued earnings growth with equities moving higher, but we think that instead of focusing on the mag seven, it is time to think about other parts of the u.s. market. lisa: i feel whipsawed to. we have been talking about catastrophic situations around the world and how they could infect -- could affect inflation, employment, and growth over short and long

terms, how they could disrupt supply chains, yet markets have shrugged it off and don't seem to be pricing it in at all, which makes sense because in the past it hasn't come to fruition as a tangible risk, but based on what we see at the four, storms or strikes, the u.s., whatever is going on in the middle east, what is your eye on potentially as the most disruptive event? >> the disruptive event is from a market perspective. it's what it does that the data. this is a market that is also very data dependent. as much as the data becomes money, with the pickup, that is a risk that exacerbates over the coming months. there's a chance that you take the long term. annmarie: i know you talked about china earlier and last

week was pivotal and it comes down to the details. so far you like it details coming out of beijing? >> we do and are quite encouraged by what we are hearing. we need to there are numbers with more on the consumption driver. is it a direct injection or done through subsidies? different ways that might make it more impactful, but overall what we are hearing from the government that is important is they recognize something needs to be done and it needs to be conjunction with not just the monetary policy cuts, but there has to be some kind of spending coming into play. that's positive and it should have a good impact on risk sentiment. in terms of how much further we think about chinese gdp growth, that comes down to those specific details, but at this point in time we are hearing the right things from the government and it should be positive

outside of china as well. jonathan: let's talk about the limits of positive fallout. on the program about one hour ago the story out of china is the story for china, chinese brands, chinese companies, with positive spillover that's limited to the rest of the world, particularly european companies. what do you make of that argument? >> i wouldn't necessarily agree. you had chinese stimulus and there was a clear impact on the u.s. manufacturing survey, for example. we think that there is a positive impact and if you are a big company, you could see luxury companies benefiting. chinese consumption has been limited until now, streaming out to other parts of europe. we are quite negative on europe as a whole, but in terms of the impact outside of china, i don't think it is huge but it could be quite positive, particularly at a time for the rest of the world

when expectations have been quite low. jonathan: rock-bottom over the last few years. thank you for joining us. updating stories elsewhere this morning with your bloomberg brief, yahaira. yahaira: larry fink sense -- thinks the market is pricing into many fed rate cuts. in an interview with francine lacqua he said it's tough to see another 50 basis point cut given the growth in the u.s. economy. >> more policies by more government tend to be more inflationary than deflationary. with that in mind it is hard for me to see another 200 basis points of decline. yahaira: he went on to say that there is more room for easing, but not as much as the forward curve would indicate. the abu dhabi national oil company agreed to purchase a german oil company for 12

billion euros in what is lining up to be the biggest middle eastern acquisition of a european firm, marking their biggest acquisition to date, helping to diversify their state owned operations at a time when oil dependency has slowed. 200,000 jeep suvs are being recalled globally because of the risk they could catch fire. stellantis said that it affects recent models of the wrangler and grand cherokee plug-in hybrids in the drivers should avoid recharging the vehicles until they fix is ready. it's their latest blow amidst unrest from dealers who say that they cannot get those cars out jonathan: there lots. jonathan:the hits keep coming. thank you. more in about 30 minutes. up next, it is jd vance versus tim walz. >> speak of the fellow americans like they are citizens. harris speaks to them like they are children. >> it is what people don't say and what donald trump never

says. he didn't say anything about how he is going to make life better for the american public. jonathan: that conversation, up next. good morning. ♪ welcome to ameriprise. i'm sam morrison. my brother max recommended you. so, my best friend sophie says you've been a huge help. at ameriprise financial, more than 9 out of 10 of our clients are likely to recommend us. our neighbors, the garcía's, love working with you. because the advice we give is personalized, -hey, john reese, jr. -how's your father doing? to help reach your goals with confidence. my sister's told me so much about you. that's why it's more than advice worth listening to. it's advice worth talking about. ameriprise financial.

jonathan: kicking off q4, which i will keep saying for my own benefit, because i can't quite believe it. the last few months of 2024. lisa: guessing game, how many more narratives will there be? jonathan: five in october. the story around the economy has gone back and forth, back and forth. there is a risk on the upside absent a big mess in the friday payroll report. equity futures are positive. under surveillance this morning, it's jd vance versus tim walz.

>> we speak to americans like they are citizens because they are. harris speaks to americans like they are children. i'm just going to try to talk about here explicitly is what we will try to do to make your life better. >> it's what people don't say and it's what trump never says. he didn't say anything about how he will make life better for the american public. didn't say anything about how it would impact your family. you win an election to improve the lives of people. jonathan: jd vance and tim walz facing off in the only debate of the election, without a studio audience they will have two minutes to answer questions, two minutes to react. they will both have hot mics. lisa mclean from the steep -- swing state of michigan joins us now. lisa: good to be here. jonathan: what are you hoping to get from this evening? representative mclean: i'm hoping for eight contrast, and

i'm hoping for answers of the questions of the issues that everyone is worried about. the economic issues. what are we doing about the hurricane? what are we doing to bring inflation down? ev mandates? crime? they want answers on the issues. i can share with you that in michigan there are three issues that matter. the economy, the economy, the economy, that's the bottom line. where is your economy right now and what can the federal government do to help automakers? in michigan rep. mcclain: -- in michigan -- rep. mcclain: in michigan we are struggling to put food on the table, put gas in cars and whatnot. what the government can do is stay out of the way. i mean, seriously, just have some faith in the people. we don't need more regulation. we don't need the government to tell us what to do, when to do it, how to do it, what cars the

by. have some faith in the american people. annmarie: you have been very critical of this administration when it comes to the transition of electric vehicles, at the same time you're critical of china, but china is dominating the entire world when it comes to electric vehicles, as well as the process to make it better to get to that electric vehicle. how do you suggest the u.s. compete, given how critical it is to your district? rep. mcclain: the biggest thing we can do to compete is to stop the mandates, let the consumer by what they want to buy. with the 70% ev mandates by 2030, we don't have the infrastructure. i'm not telling you anything you don't already know. we don't have the infrastructure and people don't want to buy the cars. not to mention, where are we getting the batteries from? our biggest adversary, china? for those of us who care about the green new deal, right, that was a bit of sarcasm, but for those of us who care, where are

we getting the batteries from? china. what does it take to produce the china -- the batteries? coal plants. it's counterproductive and counterintuitive on what we are doing with these mandates. annmarie: when you say mandate, it's not an explicit mandate, it's just pollution controls. but the question i have, the inflation reduction act, a lot of that money went to michigan for clean tech. so say that there is a change in the composition of congress or a change in the white house, are you going to be one of the individuals that wants to repeal some of those provisions that are in the inflation reduction act? rep. mcclain: yes, i say that because i have faith in people. in the inflation reduction act, with these mandates, right, i think that everyone wants a cleaner planet, right? but who is going to give us a cleaner planet?

i'm going to share it with you, it's going to be business and industry. the people that do it for a living every day. the government is not going to be able to legislate that because of all of the unintended consequences. let's leave it to the business owners in the industry who actually know what they are doing and how to do it. annmarie: let's talk about what's going on in michigan. i'm sure you've seen that report coming out of the senate, according to an axios scoop they are underwater because harris isn't pulling well. are you expecting a red wave? rep. mcclain: i don't want to predict a red wave. the last time we did that it didn't turn out exactly. i want to predict a win, right? i'm cautiously optimistic that we are going to get a win in michigan and i think we are going to get a win for three reasons and i set them earlier. the economy, the economy, the economy. people in michigan are hurting.

we are a manufacturing state, right? auto state. we need to be able to do business. with the inflation, the layoffs, the mandates, the people of michigan are hurting and it is because of the policies that this administration and the democrats are cramming down our throats. lisa: you said the best thing that government can do is get out of your way and that business needs to be left to their own devices, get donald is talking about tariffs, expensive -- extensive terrace that could increase inflation input updates to the concept of free trade and business making those decisions. why is that a good option? rep. mcclain: if you look at what he's proposing it's a reaction to unfair trade practices. what he wants and why he is using terrace as a tool that he has in his toolbelt is to make sure that we are playing on a

level playing field. right now we are not playing on a level playing field. he wants to make sure that we have a level playing field for our businesses and for american companies. if our adversaries, like china, would like to play on a level playing field, there isn't a need for tariffs. but if they are not playing fairly -- fairly, you are doggone right. lisa: in the immediate aftermath of the strike, not just in the short term, the long-term, dockworkers going back, there are a lot of auto parts potentially coming through. how are you preparing manufacturers in michigan for the potential of production being stopped or delayed because of this? rep. mcclain: we are very concerned. there was an inkling that this would happen. this didn't just happen yesterday. we were able to prepare a little

bit, but make no mistake, this will be devastating for michigan manufacturing, for trucking industries in grocery stores. but the biggest people who will be affected by this will be the consumer, right? on top of record inflation. the people of michigan are going to be hurt drastically. jonathan: do you think the white house should get involved? lisa: it should never have gotten to this point. the white house touts itself as mr. joe union, right? there's no reason it should have gotten to this point. like many other issues, here we are today and that we are in a crisis situation. we have got to do better and be more proactive so that we don't get to this position. jonathan: this is where we are, though, congresswoman, he could initiate an act to cool off. should he do so?

rep. mcclain: he should take a long hard work at -- look at it. there couldn't be worse timing, right? record high inflation, but don't forget about the devastating hurricane. jonathan: high inflation is still elevated. rep. mcclain: but it's the bottom line that counts if you know how to count. it goes up to nine and goes down to 4, 4 is still higher. jonathan: people are still struggling. rep. mcclain: people are still struggling but it's on the backs of these hurricanes. we have got to be able to get supplies and the necessary aid to. the dock strike is not going to help at all. i think we should take a long hard look at it, you know? into your point, here we are. yes, we never should have gotten here, but here we are, so we have to take a look at all the options for the american people. jonathan: well, we appreciate your time. come back soon. a lot of issues piling up in this country going into the election.

lisa: just in case people were not concerned that there was enough in this country, we've got more narratives. jonathan: up next, dani burger in elizabeth, new jersey as port workers walk off the job. that conversation is just around the corner. from new york, this is bloomberg. ♪

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jonathan: chairman powell with the headline in the last 24 hours. this is not a committee that feels like it is in a hurry to cut rates quickly. we are negative by 0.02%, just about positive on the nasdaq 100, closing out the month of september for a fifth consecutive month of gains on the s&p 500. in the bond market, five months of gains. yields falling for five consecutive months. in the bond market right now, we look like this on the 10 year, down two basis points. lisa: one thing that will be interesting to see will be how much the bond market determines the fate of the stock market. and how much the gains we have

seen hinge on the idea of an aggressive rate cutting cycle by the federal reserve. if the market has priced in too many cuts, do you end up with a market that responds or is good news >> still good news? good news might become bad news. lisa: if i say that, we are going to get a call saying i'm turning off and muting you. there is a feeling that it feels spike there could be reaction that is more negative in the equity market. jonathan: 10:00 eastern time, look out for those data points. early this morning, we had data on the eurozone. check out the euro-dollar, negative by 0.4%. cpi below 2% in the eurozone on a headline rate for the first time in about three years. this came from capital economics this morning. we expect the ecb to cut interest rates by 25 basis

points at each of its next four meetings. lisa: td securities is looking at the neutral rate to 2.5%. this is what we have been waiting for. why is the ecb not cutting more aggressively given that inflation is below their target at this point? it seems like they are moving more slowly but a lot of people are saying just wait. jonathan: it is going to be an interesting meeting for them. under surveillance this morning, more than 100 people are dead across six states following the aftermath of hurricane helene. accuweather raising its estimate of damage and economic loss between 145 billion and $160 billion. the storm is expected to be one of the costliest in u.s. history. annmarie: we are hearing for senator hagerty the concern is, given how wet the land is, there

is another storm brewing now and they want to make sure they are prepared in case the states get hit again. he said he is getting everything he needs now from fema and the federal government. lisa: we do not want to make this political because it is a real humanitarian issue. at the same time, it is being made into a political moment and you are seeing the congressmen and governors of states most affected say they have gotten calls from president biden and they are getting the help they need. curious to see how this gets dovetailed into the election given some of the hardest hit areas. how do you get those people up and running to vote when they are worried about getting their homes back in order? jonathan: presidential candidates are always between a rock and a hard place in places like this. if they do not go down, you will see people on the media every day on national television saying they have not gone down there. this is the dilemma for any

campaign now a month from the election. annmarie: which is why you heard biden say when it will not disrupt the emergency protocol because it is all hands on deck. that was clear from senator haggerty, how it is all hands on deck right now, whether it is fema or the red cross. when you're a politician, you want to make sure you are standing with the people but you do not want to disrupt the work that is going on. jonathan: senator haggerty seemed moved by this in the last hour. i think for a lot people in this country, they still do not fully understand the gravity of how bad things are on the ground across several states in the country now. >> this is why people keep bringing up katrina could not because of the number of parallels but because of the water and flooding. it is the seeping in and devastation that comes from that. it is not the drama of a storm

whipping through and knocking things down. it is where it is. it is not in a hurricane path type of zone. how long will this end up taking to rebuild? what kind of political muscle will be behind it given congress is out of session? annmarie: one of the scariest scenarios was the schoolteacher who does not know where some of his children are but it is potentially not because they are in harm's way. no one has access to broadband. you see reports got do not call 911, just show up. no one has access to ask for help. jonathan: some big stories across the nation, including dockworkers walking out along the u.s. coast, the beginning of a strike that will likely ripple through the economy. the effected ports have the capacity to handle as much as half of all u.s. trade volume. lisa: we heard the estimates of $4.5 billion per day the longer this goes on, although it is

different depend on how long it goes on in terms of supply chains actually getting disrupted. you asked about inflation and which areas are going to see inflationary shocks. you have to wonder about auto manufacturers considering these go into their supply chains at a time where a lot of components still come from overseas. lisa: -- annmarie: if it goes on a lot longer, how much stockpile do they have and how much hierarchy prices going to be? president biden put out a statement on the dockworkers and the strike. he said the president and vice president were briefed on assessments that show impacts on consumers are expected to be limited at this time. jonathan: that line is doing a lot heavy lifting for this conversation. you hear estimates between $3 billion and $5 billion. he made the point that costs

will escalate over time. we have covered this through the summer. some of the trade volume, particularly on the west coast for the summer, was sky high, close to record levels in anticipation of some of the things we are talking about this morning. at some point in the next few weeks, things start in a lisa: more material way. lisa:this is a time when economists are getting economic data to put it together to understand where we are going at a time of a complete lack of certainty and this creates difficulty. this is argue play the most important point for markets that is increasingly data-dependent and that data is only going to get messy as a result of these two elements. >> week september payrolls. think about how messy october payrolls will be. we have a strike at boeing,

hurricane disruption across the southeast. this will get really messy. lisa: especially -- you put all this together and talk about trying to operate in a black box and then saying you are data-dependent when that data has been fuzzy and difficult. it is the reason why the idea of a neutral rate will come to the fore. how much momentum do we have coming into this and how vulnerable is the economy to market downturn or not at a time when people are talking about steep rate cuts? jonathan: the estimate friday, 150,000. i have no idea what that is worth in the grand scheme of things. cbs is considering a breakup of businesses. the drugstore giant has retained bankers to facilitate business review and is considering separation of retail and insurance businesses. >> this has been a company

affected by a lot of issues. think about the plastic you have had to unlock when you go to the store and how much amazon has eaten his lunch. in august, the company cut its forecast for its earnings for a third straight quarter. they are talking about offsetting insurance costs given how much the costs are going up. what does the new retail chain of drugstores look like? you laugh, but i'm serious. what is the model for them? people were talking about the idea of having nurses there to take care of you and get your shots. i have done that, but is that the future, to have immediate urgent care centers? is it to have a shipping service to just order things so you do not have to get someone to unlock those shelves? jonathan: we see these crime statistics in this country

becoming very political and i think they are locking up the toothpaste. come on. lisa: in fairness, there were a number of retail crime rings targeting the stores. you saw it during the pandemic. it was an actual ring that kept going after specific retailers. this is more of a systemic thing. jonathan: the shopping experience is not what it was. lisa: it depends. i get only items that are not locked up. jonathan: i was at a walgreens the other week and they were locking up the cookies. the chocolate was locked up. lisa: you are not buying cookies. smart water. you can still get your smart water and energy drinks. jonathan: get my research in. lisa: man on the street walking about. jonathan: let's get to a bigger

story of thousands of dockworkers walking off the job at every major port on the united states. the longshoremen union and u.s. time -- u.s. maritime alliance failing to reach a deal by the midnight deadline. walk us through what you are seeing or not seeing and what things will look like in the days and weeks to come. >> the good news is talks were happening until the 11th hour. they were moving off their demands. many people when they first saw that, with noise being released yesterday, there is an idea that maybe they could come to an agreement. it did not happen, but progress is being made. they say they are offering a 50% pay increase. still, dockworkers here say that is not enough. the u.s. is offering not just a 50%. they said they want to retain

current language around automation. that might be one of the biggest sticking points. the longshoremen here want to make sure there is a ban on further automation and it seems the you sms is not moving from that position. the union is saying for now the ball is in your court and you need to meet us where we are. annmarie: the fact they want to maintain that automation language feels this is bigger but what is going to be the future of these ports? dani: strikes in the u.s., we are no stranger to a strike happening over technology. think of the hollywood strikes. so much of that had to do with ai. the u.s. ports are behind the rest of the world. if you look at asian ports and amsterdam, they are largely automated. it is not like jobs have

disappeared. jobs have been moved. instead of being on the ports, you have someone in a remote location. the issue for these ports is they want protection, not just automation and banning it. if automation comes in, there needs to be a guarantee of upscaling and the proper type of education to make sure dockworkers still have a job as technology advances. lisa: do we have a sense of who is getting involved, how much the company is trying to up the ante to entice workers back to the negotiating table? dani: there are many government organizations taking part. we had a statement from the white house laying out different people who are stakeholders trying to support and mediate. the biden administration is attempting to avoid invoking the act that calls for an 80 day cooling off period.

the union workers said even if you ask us to come back we are going to slow down work, so they have the upper hand at the moment. the biden administration at the moment is acting as a mediator. they said the ministration agreed the corporations were being too greedy we only offer on the table is this 50% pay increase. we do not know what they are asking for the moment. regional contention was 77%, but they are saying 50% is not good enough for them. lisa: physically, what is going on with container ships? are they just being parked? are they being derailed and stopped in their original origins before they take off? >> the picket lines -- they are parked on the ports.

there is no action happening here. you mentioned the record numbers coming in ahead of this trying to prevent it and we also had extended hours. late last night, people were working until the deadline. every day, there were extended hours put in, but for now the work is stopped. part of the issue is not just a mess tickly. because they work is stopping, we will get to a situation where there are ships parked in the water not going anywhere. this turns into a problem. 16% of all global ships come at some point through the east and gulf coast. usually they come to new york, offload come and go back to asia. what happens if the strike goes on for multiple weeks? ships will be stuck. globally, it means there will be less capacity. if it is just a few days, not a problem. but a few months, big problem.

jonathan: appreciate the coverage from dani burger. the longer this goes on, the bigger issue becomes. with your bloomberg brief. >> tesla is dealing with ongoing issues in europe after a new union stepped in to support a nearly year-long strike by staff at his workshops. the trade union announced the blockade and sympathy with the strike that began last october. the ev maker will encounter hurdles while servicing is charging network as the strike is likely to persist. qatar airways plans to take a stake in virgin australia airlines. the gulf carrier plans to acquire the majority stake once regulators give approval. the move aims to give qatar airways better access to a market where last year it was

denied more flights by the government. as for version australia -- virgin australia, it is aiming to challenge another the market. jared goff completed all 18 of his passes, throwing for two touchdowns in just under 300 yards, eclipsing the previous record for passes without an incompletion set by kurt warner in 2005. heading into week five, only the kansas city chiefs and minnesota vikings remain undefeated. jonathan: as soon as you started talking about that story, i knew what you were going to do. lisa: suddenly, american football, which now you are in love with, and you are not going to mention the mets are in the playoffs and that is significant . in the wild-card position. it is a positive. jonathan: i love you think it is

me rigging this. in the next hour, we will make changes. next on the program, you cannot hurry cuts. >> this is not a committee that feels like it is in a hurry to cut rates quickly. it is a committee that wants to be guided by incoming data. jonathan: the fed's supreme leader up next. this is bloomberg. ♪

jonathan: a quick check of price action starting with equities shaping up, it little softer as we kick off q4. we are down .10%. i want to talk about apollo global management, some news from them expected to generate $10 million of annual earnings

by 2029. we will catch up with the ceo tomorrow morning. lisa: you will be catching up with him. i cannot wait to hear what he has to say given they are becoming a real player on the same scale as major banks out there. >> looking forward to that conversation. under surveillance, you cannot hurry cuts. you just have to wait. >> this is not a committee that feels like it is in a hurry to cut rates quickly. it is a committee that was to be guided and will be guided the incoming data. the bulk of the committee was at 75 or 100 basis points. that would mean two more cuts. that will depend on the data, but if the economy performs as expected that would be two more cuts. jonathan: chairman powell suggesting he is not in a hurry to cut rates quickly as markets

await jobs and manufacturing numbers at 10:00 eastern. in the. it is good to see you. why don't you see that as a big catalyst? >> i think this is the last clean print we are going to get. we are going to have messy payrolls with boeing and the dockworkers striking. the bar is the fed has told you 4.4%. we were at 4.2% for unemployment cut not seeing that much is going to happen this friday. going forward, the next one will be important. so do not think it is going to be fireworks. jonathan: given how messy the data is going to be, how much weight can we put on the next

data point? lindsay: the numbers are going to be real, something like 30,000 for boeing currently on strike. those will be real numbers that will affect the data. as we have heard from powell, he is data dependent. this is something going on in the economy now as we deal with monetary policy unwinding, so i do not think it is totally reasonable to say just look through it. they will know where it is coming from, but will be impactful. this is the stuff they are trying to figure out to get us to have this soft landing and it does not feel soft. lisa: this sort of big question of how much we end up with rate cuts pushing all the money market funds into other asset classes. do you believe that story or think there has been a lot made of that but it would have to take cutting to zero? lindsay: i believe the story.

it is one we are waiting to start. we are waiting for the first page to get going and it has. we saw the past week 121 billion move into money market funds. that is the first step after fed cuts. the next chapter comment to use the book analogy, is moving at the curve. why you move out the curve is not only for diversification but if you like the yields you saw for the past year or so you will not find them in the front end of the curve. you need to keep moving out. these are the discussions we are having with clients. lisa: if you love these yields, you would love these things, which is long-term treasuries. what is the asset class that is what you are foreseeing to be the biggest beneficiary? lindsay: intermediate fixed income. we think it should be done with an active manager. you are seeing the things happening with boeing. there are headlines around a lot

of companies. you need to be able to pick and choose your bonds and that is only done by an active manager. jonathan: i do not expect you to name other companies. are there sectors you are worried about? lindsay: we have concerns about automakers. that industry is going through big changes, so there is something there. another industry we are concerned about is entered -- energy. there has to be a lot of investment for clean transition and there is a lot going on with the price of oil and what we heard from the saudi's and how that could change going forward, so that seems like an area we want to stay away from now. there are other areas of opportunity. we still like banks and what is most interesting in credit for us is the shape of the curve, so we think the front end of the corporate curve is more interesting than the back end. there is stuff to do.

jonathan: what is the difference between the front end and long end when it comes to the corporate credit curve? lindsay: they can lead to technicals that are happening. one thing that is easy to do is look at percentiles. look at spread percentiles and the front end. these are not super exciting numbers, but the front end is the 20th percentile of spreads or the back end is at zero, so you're finding some value between the two. jonathan: we can make it work. thanks for coming in. i will make it happen. thank you. next, erin browne of pimco. the third hour of bloomberg surveillance up next. ♪

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♪ >> i'm still bullish on the u.s. but i'm a little concerned at the rate which we are going ahead. >> a lot of the concern out there in the market is just not being priced in. >> the broadening out is going to be a gradual one.

announcer: this is "bloomberg serveillance" with jonathan ferro, lisa and annmarie hordern. jonathan: i don't think of ever seeing a guest as happy as jake polasky was when he walked into this room. still three months left. morning, good morning as we kick off q4. the equity market looks like this. -50.06%. positive the same amount. this will not be a snoozing week. later on this morning some data. job openings in america. later this evening a vice presidential debate, look out for that. tomorrow, jobs report thursday, claims friday. payrolls just around the corner. lisa: how hinged is the rally in risk assets and a broadening at you saw over the past five months on the idea of the fed

cutting really aggressively into year-end? how much this upside surprise figure and of stymieing or on the margins some of which seen in terms of other sectors other than big tech getting a lot of --? >> this friday could be a snooze that the following first friday could be the really interesting one. this is the estimate, 150 k. previously 142. think how messy the october jobs report is going to be. a strike in fact, hurricane impact, the impact we pan every month over the past year annmarie: its revision on top of revision on top of revision for that next jobs report and we just know what the impact this going to be on the economy. i'm still struck by this line by the president this morning

impact on consumers is expected to be limited at this time. jonathan: we will catch up with neil later on this morning. why take that chance with inflation resolved russian mark lisa: is it resolved? not sure. you ask over at apollo, he is still saying what landing? a lot of people are talking about maybe we are underestimating how much resilience there is in this economy. what is the base case for growth, for the neutral rate? people betting on re-acceleration and recession and kind of just putting the difference, but really kind of trying to figure out what the biggest risk really is here. jonathan: bear case out of cointreau, all case out of six. spread with this wide with three

months left. lisa: we could get a lot of different narratives. we got a presidential election, a host of data and a number of other events like the dock first strike to get resolved. the issue here is how do you really hedge at a time when the risks are pfeiffer? -- bifurcated? >> coming at this hour, line-up look like this. jay polansky is the s&p 500 not is the s&p 500 not as a fifth month of gains. dockworkers begin scraping along the u.s. east coast and neil daughter on why he sees 100 basis cuts before years end. we begin with stocks on hold as the fourth quarter kicks off. markets digesting jay powell skewed that he is in no hurry to cut rates once again what started off as a rate cut boom has morphed into a blight -- by global risk assets boom.

if you aren't bullish risk, you are in the wrong business. feeling good? >> yes, happy jonathan: why do you think this is durable? >> that's the point. i think we are at one of those times where it is really elementary. this is a time where you don't overthink stuff. in our view, we have a pretty unique confluence of economic, political and policy actions on a tri-polar world basis. europe, asia and the americas all points in the same direction at a time when there are parts of the global cross asset market that have significant room for appreciation. so you have the economy doing well, no major imbalances. cash companies, fully employed consumers around the world. you have policy-wise the fed and

the pboc cutting rates. you have industrial policy started in china that now dominates the clean energy space. u.s. responds with the infrastructure act, chips act. and then you have europe saying we've got to do what they are doing to be competitive. now you have political continuity. president xi, he stepped up and he made the point. we have election in the u.s., our view is a harris win, that establishes policy and political continuity in the united states. and you have the european commission with a new five-year term and a new team to implement their structure. so you have economics, you have politics, you have policy and now you have the markets. global liquidity is surging,

earnings are growing. and again, the thing that really gets us excited is that huge parts have tremendous room for appreciation. so the china tech etf of 25% in a week is illustrative. not unique. it is an example of many. and here's the case. it's gone from 25 to 30. the all-time high is over $100. it has 200% of potential appreciation to get to the all-time high vs. u.s. tech stocks which are at their all-time high. you have the commodity space which is in a bear market relative to other assets for years. allocations are at seven year lows according to the fund manager survey. you have emerging markets. you have small caps. you have cyclicals. you have fanatics.

if you look at a chart up close it is massively overbought. if you zoom out as we talk about , k web has done nothing for two years. nothing. jonathan: this is a point i think will resonate with you. this time the benefits would accrue much more to china and its companies than to the u.s. and its companies. there is a feeling last week that anything that touches china, any company that sells into china if it starts to really get some traction with the broader economy. peter is making the point that this is something that were the only benefit chinese companies. >> certainly commodities are likely to benefit. if you look at luxury goods, goods-makers are likely to benefit. but where i would agree with them, and we for talking about this for several months, this

will recall the text active five. the u.s. is trying to limit chinese access to the u.s. tech market. china is turning around and doing the same. to us, but chinese tech market is much bigger than the u.s. tech market. it's going much faster than the u.s. tech market and the companies that dominate it traded at a fraction of the multiples of the u.s. companies. so we like china tech because china is walling off from the u.s. we would agree with cellulose ago. -- but we were there several months ago. >> we are talking about 20%, and that is the data that we know. >> that is a fair point, and it is in the price. the market was that a five-year low last week, so again, in the

two week view, it looks tremendous. in the three-year view it doesn't even matter. and that is the point. it's elementary. this is a time when you have to just sit back, zoom out, look at the things that are all moving in the same direction, economics, politics, policy into a market that has tremendous room for appreciation. that combination is very rare. if you are a global, macro multi-asset investor, if you're not bullish, you are in the wrong space. annmarie: let's say it is not your candidate of choice, which are thesis basically hinges on. what is your take then? >> as we said, the policy continuity of the united states is pretty critical. we need to continue to invest, we need to have the industrial public-private partnership to compete in the high winds of the global economy, ai, climate and

conflict. if the republicans win i think it is pretty much common knowledge to anybody that pays attention that the policy mix is really negative for the u.s. economy. it's an inflationary policy mix, it's a tariff deficit expansion. it reasserts and leads to the rest of the world out for ordering again, we are competing in a tripolar world. europe, asia, and the americas. china is making that move in industrial private-part -- public pond -- partnership. if we go the other way, money is going to flow out of the united states. massive outperforming for last 10 years into the rest of the world. annmarie: your vegas rest with a

trump presidency his biden administration has cap tariffs. >> were talking 60% tariffs, 100% tariffs. annmarie: potentially. one of his advisors says that is just going to be used to get the chinese to the table to have more free trade. they don't view trade right now as free and fair. >> i'd like to say that i came up with this idea, but i did not. it is a former morgan stanley collie who came up with this point which is that one of the reasons why china has made the moves that it has over the last week or two is to protect against a trump administration and tariffs. they are recognizing that they are very exposed right now with the domestic economy being weakened. very exposed to the export side. so they are preemptively hedging against what you just described and by so doing they are helping folks understand that the upside

opportunity here is tremendous. globally, if the u.s. elects trump, and i think that would be strategically very negative for u.s. assets, the most expensive -- jonathan: your argument for chinese equities is based on the idea that china is warding off competition? how does the same that applied to u.s. markets on top of that with some fuel into the mix? stephen jen is making an affects call, as you know when it comes to equities, why would you abandon u.s. equities? some of these companies are going to get less competition and a corporate tax rate cut. >> i wouldn't abandon them, i would simply be underweight and i would shift to overweight on non-us markets again, are cheap, under-owned and have the policy mix that we've already described without the baggage of massive tariffs and chaos and mass

deportations and labor market. you're talking about a little tiny strike that is going to be a big problem. trump is talking about deporting 20 million people in a fully employed economy. i'm having to give that to somebody else. jonathan: there's clearly a valuation gap in the likes of the automakers right now relative to the index, and for good reason. europe isn't in trouble. if i violent of those names, is that a value trap? >> filing into the european automakers is not what i would be talking about. the automakers are getting their lunch and that in china by the chinese as china implemented the industrial policy mix we talked about and now they dominate the entire clean energy space. solar wind, ev, batteries, done. where we would love to be the emerging-market stuff, and this is a great opportunity for me to

bring up a point i wanted to mention, which is that you love third validation. who doesn't like third-party validation? so john coble los who is a pretty solid guy, i've been following his work, he wrote last week generational opportunity in emerging-market equities. generational opportunity in emerging markets. that's not your common, everyday type of thing. that is telling you and reinforcing and giving our view third-party validation that these markets have tremendous upside. and the u.s. market is fully priced for a very good upside, a very good outcome. if that outcome doesn't and a fast, what is going to that valuation? it's going to get discounted. while the rest of the world plays into the upside that is available strong commodities, non-us equities, emerging

markets. there's a tremendous amount of opportunities that people really haven't talked about for years. we've all been talking about u.s. tech for years and years. jonathan: it's been miserable. >> i am happy, we are big believers in ai, fully invested in the semi space but we like cyclicals, emerging markets, very overweight commodities and we have very underweight bonds. we had no u.s. treasury exposure for the last two years. last couple months, that was painful. jonathan: you're feeling good. let's get you an update on stories elsewhere this morning. usual bloomberg green. yahaira: the death toll from hurricane helene continues to rise. more than 100 people are now dead across six states in the u.s. south. most of the victims died due to flooding. the economic loss from the storm could be up to $160 billion, making it one of the most

destructive storms on record. president biden since he will tour north carolina by air tomorrow morning. nato has a new leader, former dutch prime minister mark -- has taken the rain as the alliance's 14 secretary-general. he told reporters earlier today he will continue to press allies to maintain their work for ukraine and spend more on defense. he is not worried about the outcome of the u.s. presidential election, saying he would be able to work with either donald trump or kamala harris. and this is just for you, lisa. the mets and braves are both headed to the playoff during an exciting doubleheader. the mets made a thrilling comeback to beat the braves in game one yesterday while the braves celebrated a victory in game two. the mets will now face off against milwaukee brewers in the wild-card round and the braves are going to san diego. jonathan: thank you td magic.

jonathan: up next, the morning calls. dockworkers go on strike. the latest that industry. -- the latest for that industry, up next.

♪ jonathan: the opening bell, one hour 10 minutes away. equities coming into bed just a little bit softer. down by 0.06%. first up, downgrading hp to neutral, the pc recovery in the second half of this year. stock is down by almost 2%. keeping us underway writing on shares of apple warning that recent channel checks are to we

getting iphone demand. and finally, goldman is going software services mix to boost margins. a little more than 2%. ports grinding to a halt along the east coast as stop workers launch their first strike in nearly the years. global shipping giant bracing for the brunt of the impact. we're joined now for more. then we started a very simple question. for the companies of your coverage right now, is this business lost were just delayed? >> it is business delayed for now. the shipping is going to be rerouted. at least in the short term. as you mentioned, even though the weaker two delays that have effects on the shipping industry for six weeks, and estimates are

three or four months, so it likely to be delayed, in our opinion. but where business loss might come in the future is the strike continues for two or three weeks. that is when the risk really begins to increase for business loss. jonathan: we talked a number of times on this program about the sheer volume, the high-volume going through the summer. how much of a bump did they get ahead of this, the companies that you cover? >> it's hard to say how much was in into the patient of this. a lot of it had to do with disruptions in the red sea and delays associated with some of the bigger companies.

how is it possible that this has been avoided when even in standard years, the heaviest shipping for christmas would be finished by now? i expect many larger firms, majority have this disruption and even a prior year a lot of the christmas -- and already becoming foreign. >> i'm curious longer-term with this allows shippers to accomplish structural basis insure against the disruption we see. not just with the strikes, also the attacks in the red sea. a real question about how to bake in a higher profit margin to cardigans such offense. >> short-term, they are trying to mitigate some of those costs with surcharges. long-term i don't see them being able to make that in.

whether that be drawing alliances to share resources or whether that new models to more efficiently manage their ports, prices are commoditized and it would be difficult even in the long run to change the structure of the industry and bolster margins. lisa: which shipping company do you think had the biggest advantage coming into or out of any potential disruption? >> i wouldn't say -- they are all kind of impacted in similar ways.

if rates are to increase, which i would anticipate that the wood, that would be a big tailwind for them on the reason, so that is based on the methodology that we are very long-term in focus. have they often have trans of -- if you are looking for some potential that they can rise with some of the more temperate increases in rates that would be seeing if there is a supply disruption as a result of these delays or as it has resulted in strike but other than that. jonathan: a big sectors watch, appreciate your time. the base case at the moment, they can change depending on how long this goes on, but the base case in the near term is business delayed, not business lost. on many occasions we had this

conversation. the longer this goes on, the worse it it's. annmarie: especially given the fact that you have to imagine you need other channels and you have produce. save the bananas. jonathan: and the apples as well. >> new york state, we've got a lot of apples. jonathan: guy johnson said to me a long time ago athleisure stock split. from new york, this is bloomberg.

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♪ jonathan: 60 minutes out from the cash open, equity futures on the s&p 500. coming off the back of five consecutive months of gains, four consecutive quarterly gains first time we've seen that in quite a while. let's get the manus cranny. manus: the story on boeing that they might go for a capital raise of $10 billion. it's not a done deal so as you think about the headwinds for boeing you that 33,000 workers on strike. you are quite literally burning a hole in your pocket every month that the strike endures is $1.5 billion. so if you fill the gap with another ordinary raise we are on the cusp of going to junk.

two hundred dollars returned it, they can sell assets and they set up a bullish call on free cash flow and livery going through 2025. glenview capital is praying for changes if not a breakup within cvs. they are going to do a strategic review. it's of retail environment and insurance business that is under pressure. deutsche bank, great line here. breakup reports smell of desperation. you talked about the banana shortage, that this is an israeli company. as these strengths failed, your seeing a real pressure.

nearly 25% of u.s. bananas come through port wilmington. the bananas, jonathan. jonathan: lisa was all over the story in a way that i have to say was unexpected. lisa: there have actually been stories written about our banana intake and how it is only one particular type of banana and there could be a shortage, so this is the reason why. annmarie: people depend on bananas for their breakfast and i'm just looking out for them. jonathan: people like you. annmarie: theoretically. jonathan: digesting fed chair jay powell's message that he is in no hurry to move ahead with more rate cuts but neil debtor sees 100 more basis points for year end, citing the fact that unemployment is likely to continue rising in asian continues to slow. welcome to the program as always. just one very short line i think captured everything. why take the chance with

inflation results? can you answer your own question? >> i think when i look ahead, i do think there is additional upward pressure here on the unemployment rate. if you look at what consumers are telling you about the jobs market, it's not like they are telling you that things are getting better. it's not even like they are telling you that things are stabilizing. the distribution of risks are clearly skewed to the downside still given after this 50 basis point move. there is some inertia in the labor market data, so the fact that things have been leak is probably a good reason why they will stay that way. but if you look at the conference board labor differential, for example, it's clearly telling you that the unemployment rate probably keeps going up. how much i think remains to be seen, but i do think it is probably still higher. and at the same time, core inflation has been running below

2% since may and that is happening despite very little help from housing rental inflation. i think there's probably still additional downside with respect to read based on what we see with things like new leases, but if rent begins to cooperate, you can see continued downward pressure on inflation. my sense is that the fed forecast are conditional and it's interesting to see powell toe the party line after basically exerting his will in september. but my sense is if we get a clunker on the employment report between now and the november meeting, i think he will have the munition he needs to push another 50 basis point rate cut. jonathan: the chairman yesterday sounded somewhat confident off the back of recent data that you indicated your note earlier on today, yet written the fed baseline and when you think it is vulnerable when it comes to unemployment in the labor

market. what kind of numbers do you think we need to see to enable chairman powell to really exert some authority. > it's already running below 100,000. i think it's possible with those kinds of numbers, particularly if we see state and local governments slow down a little bit, i think it's possible to get additional upward pressure on the unemployment rate. then when we look forward to the october jobs number, there's just a lot of potential hits that that report is going to take. you have the boeing strike, the port strike, this natural disaster hurricane that is displacing a lot of workers at a

very sensitive time for that area. they tourism industry revolves around the fall season. he can't rule out a really bad number going into that. and again, does powell want to get up there after a really weak number at the november press conference and look at the cameras and explain away the jobs number based on special factors at a time when they may well be revising other expectations of inflation? lisa: a lot of people pushing back pretty aggressively against the fact that the economy is slowing down substantially. where is the slowdown? a lot of people pointing to atlanta fed gdp now which points to three point 1% growth in the third quarter. how does that cohere with what you are seeing, especially at a time and we are not being in jobless claims and a lot of the

other potential ancillary kinds of information are not pointing to that real negative downdraft? >> if things are so strong, why is the unemployment rate? i mean, i thought it was very interesting that powell talked about ddp and gdi revisions, and admittedly, they've been positive. but one thing that is not really revised as the limit rate, and the unemployment rate has been climbing. the unemployment rate has been rising despite seemingly strong economy. and consumer attitudes about the labor market have been getting worse, despite strong headline on gdp. if you take that all at face value, it basically means the economy is not growing -- is growing below potential. and powell admitted that growth may not be strong enough to keep the woman from rising. if that's the case, that means

that the labor market there exerting downward pressure on the wages of those that are already working which is disinflationary, so that is another reason for the fed to be easing. annmarie: i'm not agreeing or disagreeing because ultimately, we cannot know. what i find really interesting, and i mean this sincerely, is the conviction. the condition to state a cup of 100 basis points time when there is a debate over whether we could see a we acceleration of impact of some of these strike sunday and, making the messy at the same time that it is potentially ration your we are on the cusp of inflationary policies that get implemented in the united states early next year. how easy is it for you to have conviction at a time when there seems to be really bifurcated tail risks? >> i think every outlook is

fraught with uncertainty but i don't believe the fed should be front running potential fiscal outcomes a stone and applying that to today's reaction function this is about the data as it has been coming in. conviction, i am paid to have an opinion and i'm paid to kind of give people a coherent view of the world that i think ultimately will pay dividends for them. i think that is part of where the conviction comes from. for me, and is really about one of the markets pricing in its further i think the distribution of risks are? he, i think the idea that the fed is going to deliver two 25 basis point rate cuts i think is a problem because that is conditional on a forecast that assumes the unemployment rate is

at 4.4% by year-end we see 2.6% core inflation year-over-year if you get inflation friends like you did over the last few months, they will be revising down those estimates for or pce. the things that i see, whether that the job openings coming down, whether that be the conference board labor differential, all of those things nudge me in the direction to say that we may be at 4.4% before year end. the fence forecasts are conditional. if i'm looking at the way the markets are priced, think it makes sense to bet that they will end up feeling a little bit more. jonathan: one thing we can all agree on november 7, box office.

there are going to be so many issues on the fed table that we. lisa: is fed chair jay powell going to get up there and say all right, this is the number, this is what we got to take out because of this? guess what, we just had an election, we may or may not know who is elected. in the meantime over here, how does he deal with this? jonathan: never mind this jobs report, the next one. when you look at the data right now, how much of it is his holding back waiting for some these issues to be resolved and how much is really about a cyclical slowdown? >> i think a lot of it is waiting on more policy clarity, the outcome of the election here and what you seen is

historically over time, you do see this cyclical low going into recession. this patent policy uncertainty this time around. a majority of companies around are holding back either hiring spend, spend, are waiting for more clarity. we are likely to see that start to be spent again once we get past the election. certainly policy to change that. you do think you're coming into a third quarter lull. 4 jonathan: by november 7, chairman powell will not be in a position to make a long list uses. neil think they will cut 50 basis points. >> chair powell pushback against

yesterday and we are in the camp that they will likely continue to go and the five bases that these. we are getting to a total of 150 basis points before they really stop, digest the data is responding in response to the cuts. that's not to say if we were to see a much steeper slowdown than what we are anticipating you certainly could get a steeper set of cuts. inflation coming down but at a slow pace. with the fed really wanted to be patient and not overreact, they will likely go from 25 basis point cuts from here on out. lisa: how much does it matter the pace and the cut rates? >> it matters from a signaling perspective more than anything. if the fed starts cutting more aggressively the market could get can earn -- get concerned. in terms of the destination, the

destination probably doesn't change. they will just get there faster. but i think what matters right now for the markets is how quickly they are cutting relative to other central banks and whether they are cutting faster than the markets they dissipated. not 50 basis points per meeting. the markets pressing in at 69 basis point sukuk. lisa: what do you think has been the most overpriced risk and what has been the most underpriced risk? we were talking earlier about how everyone wonders what is going to be that downside and he said actually, no one is asking me about a riproaring rally further from here. >> to some extent. the market is trading at all-time highs the market hasn't been anticipating this rally,

but it has been trading well. i think that continues to be assertive -- that continues to be the easiest path forward. certainly china over the last week has taken the market by surprise. they talking about what is mispriced or what was not expected by the market, china is front and center right now. annmarie: you still think china is a trade, not an investment. what would make you want to be a settler and not a traveler? >> the fiscal policy put in place thus far isn't enough for coming a lot of the structural problem. you need much more significant than the stimulus -- fiscal stimulus leading into the some of the institute buyer 2016 in order to get really comfortable

that this is a change in the way china is going to be addressing its policy going over it. particularly around the housing market. we really haven't seen that yet. we've seen a lot of headlines but not a lot of detail under the headlines could me comfortable buying this long-term and estimate area. annmarie: there was this theory that china was waiting for the outcome of the u.s. election. do you think we could see more down the pipeline? >> there's been a lot of hope certainly over the last year that you would deal a lot more detail and that they wouldn't be these false starts and we haven't yet seen them, so i'm going to be waiting to see much more radical policy push coming out before i get really comfortable buying this longer-term. it's easy to put out headlines but when you really get into the nitty-gritty of making sure that this policy is with filtering through for all segments of local governments, central government and company action,

we haven't yet seen that. lisa: we are three quarters through the year. lots could potentially come to the floor. i'm just wondering how much of the broadening out that we've seen in the previous quarter you see billy sticking. >> i think that trend is here to stay. we've seen now corporate earnings profitability reflect for the broader s&p 500. to think that that has all been broadening out. a fairly benign vindman for risk-taking, still positive economic growth. lower inflation which is all the macroenvironment we are anticipating.

>> right now you are probably close to fair value over the short term. over the longer-term, i still think that bond yields moving lower we seen a lot of that pulled forward over the last six months or so. i think we are trading close to fair value. for medium-term investor, i think bonds are still a really good investment. jonathan: i want to take the opportunity to get you an update on stories elsewhere this morning. yahaira: israel is beginning targeted ground raids into southern lebanon. striking targets located in villages close to the border that it says pose immediate threats to israeli communities. the attacks further expand the campaign against the iran-backed organization following israel's killing of its leader on friday. the u.s., european union and

arab powers are calling for a cease-fire. president jimmy carter celebrating his 100th birthday today, making him the first american president to live a full century. he served one term from 1977 to 1981 and then worked more than or decades carter has been living the last 19 years in hospice care in his hometown in georgia and last month his grandson said the former president said "i'm only trying to make it to vote for kamala harris. private equity giant apollo expects to generate $10 million in annual earnings by 2029. the company saying that it expects profits to be driven by investor demand of private credit and annuities. i 2029 also expects assets to grow to $1.5 trillion. jonathan ferro will sit down at 7:30 a.m. eastern tomorrow. that is your bloomberg brief.

jonathan: changes on how companies are financed. the companies they need the financing and the future of investing worldwide. that conversation tomorrow morning 7:30. we will set you up with a day had from new york city this morning. good morning. ♪

jonathan: the opening bell 30 minutes away. we will get ism manufacturing at 10:00 a.m. eastern time. 9:00 p.m. eastern, the first-place presidential debate.

wednesday we will get adp private payrolls. thursday, another random jobless claims and friday, the main event, september payrolls. as dockworkers: strike a one the u.s. eastern gulf coast for the first time since 1977, walk us through have expensive this could get. >> it could get very expensive. there are a lot of estimates out there. i'll just point to one from jp morgan. the highest end of their estimate is per day 5 -- $4.5 billion. the issue is it is not just one day. for every single day that a ship is waiting in the wings and can't offload during the strike, the estimates are anywhere between six to 10 days to offload. that means if it is a month it will likely take six months to 10 months to offload. that just means the economic cost of this will continue to build up with the longer it goes on.

for specific industry, a lot of raw materials are going to be affected tobacco, 70% comes to the ports. perhaps the biggest consequence will be to small businesses and this is a ramification to last even beyond when the strike is over because when the strike is over, the businesses that would be prioritized are those with large orders that have spent a lot of money. they can also afford to do airfreight so when we are talking about economic damage, it is the small businesses to pay attention to. jonathan: the white house sank today the impacts are expected to be limited, at this time because the longer this goes, how damaging this is going to be to the policy and politics. where are we right now with the lighthouse getting involved in these negotiations? >> white house has asking number of people and said they are in direct contact with the employer

as well as the international longshoremen's association. we know the national economic advisor pete buttigieg, secretary of transportation, the acting labor secretary and the chief of staff have all been in direct contact with both. biden administration is trying to avoid the 80 day cooling off which would mean people would have to go back to work. that is a loss for them. they don't want to look poorly to the union cried during that. the white house really was encouraging them to have talks until the 11th hour, until the strike happened. also sing the white house of them and they agree that employees were being too greedy. obviously the white house has not said that's at the moment they are not directly intervening. it a lot of behind the scenes negotiation and mediating, but the longer this goes on the more painful it will be for the biden

administration and for kamala harris as she attempts to run for the president, to have these sorts of headlines that can unfold. jonathan: looking forward to the coverage through the day and perhaps even the next few weeks. i think the word of the morning, mass on how messy this month could be. lisa: for people who are trying to be data-dependent including the federal reserve, the challenge is to really understand what is noise and what a signal. jonathan: coming up tomorrow, here's the lineup for you. from new york city this morning as we kick off q4, good morning. this was bloomberg surveillance.

>> another new record possibly in store today. i am matt miller. >> bloomberg open interest starts right now. sonali: coming up, fed chair jerome powell signals he is in no hurry to make further cuts. next, manufacturing data maps. matt: dockworkers walk out of every major port on the u.s. eve and -- east and gulf coast. katie: and