>> we do think we are still in a good is good environment. >> it is what is the broader economic and earnings backdrop. >> maybe creeping back into the market. >> sort of punishing the more expensive stocks for the higher rates. >> i think were in a bull market and peak inflation and peak rates should be good for equities. >> this is "bloomberg surveillance." jonathan: good morning, good morning. "bloomberg surveillance." your bull market is celebrating his second anniversary. two years since october 22 come

a move of more than 6% on s&p 500. equity looks like this -- we are still counting on the s&p 500, 45th record high of the year. the longest weekly winning streak on the s&p 500 going back to make, we've had five of them. let's see if we can add some weight. the highlight of the week for the earnings citi, golden for the data. u.s. retail sales on thursday and central banks on the same day. >> underscores how much in the u.s. we are talking about that goldilocks soft landing kind of moment, whether we see it edified by the earnings you're talking about. it shows how different it is over in europe where suddenly there's a new question about whether they're going to be fighting deflation. deflation from china and what

they're facing in general. how much they have to counter a return to the norm that was pre-pandemic. jonathan: let's talk of the latest out of china. really volatile session. china stimulus locked and loaded almost. the emphasis on almost. lisa: there is a lot of emphasis on supporting things like home prices, which is something they said they were not going to do. they talked about how a lot of the bond offerings they could put out there could go to financing fiscal stimulus most of what i gather was deutsche bank, goldman sachs raised the gp forecast for point number sent to 4.7% but there's no longer-lasting kind of confidence this is going to generate real growth especially as there's deflation ppi and your singh declined disappointing figures out of export numbers. jonathan: let's take the forecast. 5% is the target.

this feels like over the last week, the effort falls under growth. people are convinced by that. the next at the market is hoping for is a whole lot more than that. lisa: not just a question of stating the losses, what more can you do? supporting house valuations. that raises the question of, what is next in terms of fiscal stimulus? there pledged to do things. they haven't given programs. people are saying, we are still lofting. you raise a question how much is politically driven ahead of what is going on in the u.s. with the election cycle that also some of the tariffs out of europe at a time when there is strong competition and a feeling something's got to change with china's reliance on exports. jonathan: let's start with the day ahead. coming up on this program, we will checkup with lori calvasina . sigrid de vries and johanna

chua. kaile lori calvasina writing our analyst have a slightly bullish tilt in their outlook for performance over the next six to 12 months within the u.s. performance outlooks on financials are most bullish followed by materials and health care. good to kick off the week with you. one of the sectors that comes up repeatedly, the financials. earnings season has started. you like us look at the banks some kind of read on the broader economy. >> i thought the results on friday affirmed the soft landing. that was all that was really paying attention to. i think we sort of heard in the one hand the consumers is to pretty strong. 1 told us we are eagerly looking for those signs of weakness and we are not finding them. that really reflects what a lot

of us forecast have been telling her own clients like we are looking at it, we hear the concerns, we're just not seeing it in the data. jonathan: which presents its own problem. spreads are super tight. the banks are saying, no problem. as an investor, you look at stocks at all-time highs, credit spreads are tight, what do i do? >> it is a question of your time horizons. ever think about my targeting prices, we are a little over my 5700 number. i feel neutral in the short term. i do not feel bearish. sentiment feels pretty full to me. aaii. 24% on the four-week average last week come in 20% on the one we number. one standard deviation event. i don't necessarily feel like you need to be changing -- chasing at this particular moment. when i walked to the valuation math for next year, i keep a steady multiple. i bake in earnings growth. i think 6200 easily.

below consensus earning number. if i use consensus earnings, 6500, 6600. i think you buy dips. if you don't really care about the short-term, sure. maybe go ahead and hold your nose and buy. lisa: which tips do you buy? there is been a segmented market we have big tech rotating in and out of favor and then the rest of the 493 that are playing catch-up in fits and starts. how much do you lean into this rotation at a time where you do see earnings growth but it is patchy? >> if you're thinking about the rest of the s&p 500, i feel much better about that right now than necessarily small caps. i do think the earnings deed to come through. we're in this weird earnings growth environment right now and i think that is why the leadership handoff has been such fits and starts. earnings growth is decelerating on forward estimates. however, those estimates have been improving recently.

if you look at the rest of the market, those estimates have been stagnating. on the one hand we have the decelerating earnings growth environment for this previously hot part of the market and that makes everything jittery, vulnerable to downside. it is fighting back hard. i need the other side of the market, the financials, energy companies -- we need them to fight back harder. lisa: one thing that struck me about the earnings is the lack of clarity, lack of visibility. i'm guessing we will hear that more from other companies. how difficult is that make your job? >> very difficult. i was talking about corporate confidence of the weekend and i said on the one hand there is this resilience, faith in the ability to execute and control what you can control. on the other hand, companies talk time and get uncertainty from things about the path of interest rates. we thought we settled that, maybe not. we have the election coming up. i asked a company recently at one of our conferences, what are

people waiting for? what outcome do they want? what policy issues are they focused on? eventually that can be said, i think they just want the event to pass. i think for better or worse is where we are. one of the bags alluded to that idea on friday as well. jonathan: do you sense as sense of paralysis? >> if i think about the hedge funds, i don't get the impression they have been doing a lot. they may be starting to do more now. your singh the vix move up a little that indicates maybe the past many crowd is starting to do a bit more. if i think about my long only clients, one person recently said, i don't know what is going to happen on the election. i don't know what the outcome is going to be. i do on that kind of longer-term money, i do see -- i don't know if i call it paralysis but i see healthy weight and see. jonathan: i've no idea how long it takes for this event to clear. >> it is the election outcome

itself. are we going to fight it in the court system like in 2000? in 2000 we did not get our typical selloff into the election. we did not get our typical pop after the election. i think we resolve that pretty early on in december and the market still never got that sort of relief bounce. that is something to watch as well. the legislative process is how laws are determined. i feel like i keep having to remind people this who don't sit in the u.s., it is not so much -- this laundry list of they were throwing out, these are just negotiating points and ideas. we have to see what congress is going to look like. we have to see which of this laundry list they care most about and if they're going to pick and choose a couple of things, what are they going to be? we will be waiting and seeing for a while. lisa: the paralysis implies place on most binary outcomes, potentially different outcomes between one candidate and another or between one legislative outcome or another. how different are the ranges of

outcome people are trying to map out? >> i probably have a slightly different view on this. you only will get policy, i don't look at personality. we have gone through and really tried to compare all the campaign documents, not what they're saying in every single rally but what has been put on websites, paper, set on dedicated economic speeches. i feel like there are some clear differences on things like corporate tax policy, energy policy. tariffs come as opposed to them being left and right, it is sort of on one side of the spectrum with differing streams. i feel like i am not seeing either candidate necessarily talk a lot about what i call industrial-related stimulus, which was a big feature the last two campaigns. i am seeing a lot of consumer -led initiatives. i feel like we are ending up on the same page on a lot of things. they're talking about homebuilding. lisa: we talk about the big fears, your politics, the

unknown around the digital outcome of the election come interest rates. then you look at things like the aaii investor survey and there is confidence. you look at what they're buying come incredible amount of confidence. where is this paralysis showing up? >> i think part of it is maybe coming from overseas. one of the things i have noticed is russell 2000 futures positioning on the cftc data suddenly has surged. that tends to happen when people want to make domestic come that is on the u.s. moving up in a similar fashion what we saw in 2016 on the trump win. 2017 on tax reform, 2018 on trade. domestic trades. my colleague told me recently she has seeing a similar kind of sudden upward move in dollar positioning. i thought maybe we are to get some u.s. bets. jonathan: a subtle shift from former president trump?

>> hard to say. looking at s&p in the betting markets come from 2023 through the middle of 2024, it was a very tight powerful correlation. abrupt in the last couple of months. we have to watch now with the betting market shifting. you're not sing the national polling average shift yet. i think they probably will. get to see if markets are recovered with trump also jonathan: lori, good to see you. lori calvasina. i think for all of us it is been like staring at the sun. stories elsewhere, your bloomberg brief. dani: four israeli soldiers killed and dozens were injured after a drone struck in northern israel. the attack marks one of the deadly strikes from hezbollah in at least a year. shortly afterward, israeli sharks and southern and central lebanon killed at least 51 people -- strikes in southern and central lebanon killed at least 51 people.

the u.k. international investment summit is underway in london. the labor government is looking to draw leaders of tech, finance among g-7 nations. u.k. has lagged since the pandemic. bloomberg stephanie flanders will be sitting down with u.k. prime minister keir starmer at 9:30 a.m. eastern spacex has pulled off an incredible technological feat. sunday launched its starship rocket into orbit. the company achieved its first-ever chopped six landing, catching the rocket over 200 foot fall booster out of the air with giant mechanical armed at the launch site. the recovery mark a historical marker for spaceflight with the reusability of the rocket booster seen as a critical step toward developing more advanced space travel. spacex expect full reusability to drastically lower the cost of launching future starship missions. that is your breed. jonathan: thank you. congratulations to elon musk and

the team over at spacex. when something looks like a video on rewind, that is what that looked like. lisa: it look like my child's project. it look like one of those games where you throw up a ball and catch it with the little one. sort of shocking post of jonathan: this country is amazing. election race continues to tighten. >> we are leading in all the polls. >> we are nearing the home stretch. we are nearing the home stretch. jonathan: that conversation is next. this is "bloomberg." ♪ (♪♪)

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jonathan: equity futures on the s&p 500, firm pulse of the treasury market closed today for

columbus day. you'll see a lot of things happening elsewhere. commodities down but posted 3% on wti and likewise on brent. various targets for israel. another week has passed and no action still waiting for retaliation. lisa: however there was a pretty big action from the united states to the terms of shipping and antimissile-type of protective device to israel, which indicates maybe they're prepared for some sort of action that could prompt some retaliation. jonathan: brent crude down. the election race continues to tighten. >> by the way, we're leaving in all the polls but we have to win. we are leading in the polls but we have to do it. they're good at that one thing you know that is. they are professional thieves.

>> 23 days until election day. and we are nearing the home stretch. we are nearing the home stretch. jonathan: do polling showing donald trump closing the gap with kamala harris with just over three weeks remaining until election day as pressure builds, tensions report of the rising between team harris, team biden. someone on the harris team says top white house aides are not's officially coordinating biden's messaging and schedule to align with what is best for the vice presidents campaign. joining us now for the latest, michael shepard. can we start with that story? what did you make of that story over the weekend? >> there's no question that there are still a lot of bruised feelings between the two camps, the biden camp in particular for cigna president that worked for for so many years pushed out of the race in essence following his disastrous debate performance in june.

that cast questions about his fitness for office and whether he would be able to defeat trump. on the other hand, the harris camp feels the president in trying to hold on to the nomination has suggested that he and only he was capable of beating trump and therefore she was not able to. we do see in the polls she maintains a slight lead but it is shrinking according to some of the surveys, including the key swing states we've been watching closely. these tensions we see play out kind of indicate where we are in the race and for me recalls what we saw during the clintore campaign in 2000 hasked them president clinton to not campaign in swing states out of concern he might actually ndermine the candidate al gore. jonathan: when they talk about complaints about the schedule, reminds me of last week when he had the vice president on "the view" conducting a news

conference regarding the hurricane. one is more important than the other. the vice president was trying to make out that governor desantis was not taking calls at the same time the president was saying that a good relationship but there were getting every thing they need from one side and the other side was getting everything they need from them. is that what this is about come the last week? or more than that? >> there's a little concerned. there's always tension between the president and their number two about who is stepping on home. the president is the one running the country, leading the tickets, and the voice for the white house. so it is always an awkward relationship for the president to have the vice president out on the campaign trail and therefore taking center stage role in politics for the party. lisa: you did mention a lot has to do with where we are in the election cycle and you can feel the nervousness percolating in the democratic party. we were speaking with isaac and

a couple of hours and he said he still thinks right now donald trump has the advantage because of two particular issues, the economy and immigration and border security. how much are those two issues really dominating a lot of the discussion as the twilight of the campaign trail commences? >> the economy has remained an issue that is worth donald trump's advantage. although kamala harris has managed to close the gap on that in recent polling. a recent polling the southern swing states shows she has been closing that gap and showing more ability to connect with voters on the issues of the economy and in ways that s she cares about where they are. someher plans, including tax cuts, offer of housing assistance nationwide come have resonated with some voters from allowing her to make up some ground that biden had lost two

trump in the polling when it came to the economy. immigration is a signature issue for the former president that helped get them elected in 2016. we saw on friday and saturday and sunday how he returned to it again and again and again really trying to conjure up once more those vibes about how he would with strong border policies trying to save the nation from what he sees as a moment of peril. physical i want to circle back to the clipboard donald trump was talking about how the other side likes to cheat and everybody needs to get out to vote. in an interview over the weekend, he talked about how the bigger problem is the enemy within. he said, we have very bad people, some sick people, radical left lunatics. it should be handled easily of necessary by the national guard or by the military. what has been the reaction to those comments? >> the reaction has been that once again we see the former president raising these claims without offering any evidence.

on immigration for instance, he did the same thing on friday in aurora, colorado, saying outright the city had been overrun by immigrant gangs and local authorities said that was completely not true and that any issues they had had with gangs confined to one local apartment complex and did not reflect the state of safety in the city overall. he offered this suggestion, hint there could be violence on election day. without providing evidence and also glossing over the fact of violence that occurred in 2021 following the 2020 election was largely perpetrated by his own supporters on january in washington. jonathan: where he expected biggest push from either campaign? >> right now we are seeing this week the democratic ticket, here's an tim walz pushing in the blue wall states of the industrial north. pennsylvania, michigan, wisconsin. they are trying to make inroads

with voters but particularly with black voters. they are concerned the support among african-americans may be softening. this is the democratic constituency that has been reliable over the years, but a new york times poll released over the week and indicated as many as 15% of likely voters could be -- black voters could be tilting toward trump. that is an increase in the republicans favor of more than six percentage points. so they are worried about this. the number of events scheduled in the so-called blue wall industrial states are geared to gain enthusiasm among black voters to ensure not only they agree to vote for harris but actually turned out on election day to ensure if the election is close, they have enough votes to pull it out in each of the states. jonathan: do you think some appreciate -- instead of addressing the policy differences, --

>> i think you're referring to the comments former president barack obama made in trying to shore up support for kamala harris where he was pointedly speaking to black men, trying to say, guys, we need to be on kama la's side, if you have any misgivings about electing a black woman, set those aside. kamala harris may have a little cleanup work to do at each of these events trying to ensure that she is there for black male voters as well. jonathan: michael sheppard with the latest. it felt like a tricky road. the former president started going down it inevitably, blowback. lisa: one thing harris has tried to do is not make this about the factious a woman or identity politics. this brought it to the four. did you see saturday night live?

jonathan: no. lisa: 70%, don't blame us. they can't blame us for any lackluster support. i think this is going to be something were each candidate is parsing ever single vote as you will have some very confusing messages coming out as each of those votes try to be sort of rounded. jonathan: a few more weeks to go. , sigrid de vries of the acea as your pin on makers face what many consider to be the perfect storm. equity futures on the s&p up by two tens of a percent. good morning. ♪

jonathan: five-week's of gains. the longest weekly since may of this year. s&p 500 adding a low bit of weight. 100 also up. russell, up by a quarter. foreign-exchange, last week the dollar index posting a second and said good of -- consecutive week. we have not done that since the end of june. pound-sterling off. dollar stronger against. grow, ecb position on thursday. pound sterling, down to big

budget taking place later this month. look out for this conversation later in about three hours time with the prime minister keir starmer setting down with stephanie flanders. lisa: he has talked a lot about cutting back. he has talked about the potential for everybody to accepting that. if that is the case, where is the growth going to come from? where is he going to really attract business back to a country while also raising taxes and crating more punitive -- these are some of the questions i'm cris to hear the answers to. -- i am curious to hear the answers to. jonathan: let's turn to crude, wti and brent, pulling back my little more than 2%. some reporting over the weekend, use officials believe israel has narrowed down what they will target in the response to iran's attack with officials describing running military and energy infrastructure but no final decision has been made.

this is a waiting game and has been for more than a week. lisa: i enjoyed over the weekend talking about people probably will sell oil if there is some sort of israeli strike that avoids the mass amount of oil reserves that iran has but that is probably going to be a head fake in her mind because she thinks this is just the beginning of a tit-for-tat i'm an escalation. how this gets priced in is difficult. the fact is a commodity market tends to only buy or sell when there is some sort of catalyst. should we get a move that really surprises one way or another in terms of the oil. jonathan: it is superhard because if they strike energy infrastructure, running barrels that may be at risk or are you thinking about the whole region being at risk? give a very different oil market. lisa: escalation, the ultimate would be the straits of hormuz and if they cut off all oil transport through one of the main arteries of all of that transport. there is a lot unknown here.

we know it will escalate at some point. how do people trade around it? they wait until they have more clarity and that did not come over the weekend. jonathan: crude is down by 2% this morning. chinese stocks rebounding from the worst weeks since late july. traders are awaiting more detail after the finance minister hinted at a greater government borrowing to shore up the economy. we did not get a number so we're still waiting. lisa: we also did not get details. we did not get a sense of what they're going to support other than some rhetoric that gay people confidence that war was coming in terms of how they were going to finance it was not i want to understand how are they going to support growth. it is one thing to say they're not going to mr. target by as much but another to say we are laying the groundwork for consumers to have more confidence to go out and spend. what we're seeing right now is steady deflation and that is not evaded.

jonathan: local governments have not been up just -- that is been a big source of revenue for a long time. property developers has been a big theme at the local level. what they established over the week it was a mechanism to tangle the problem. the second step, what the market is hungry for, providing incentives for consumption. we will have to wait. i think after that, the next step, 2, 3, 45 steps down the road. lisa: especially since xi jinping's government has been reluctant to say we're going to give payments directly to consumers. they don't want to follow the american style of things. as had their fighting deflation. this is why i think it is interesting to see whether that is the new norm and what that does to the european economy versus the u.s. economy that is a little more separated from what goes on in china.

jonathan: more this conversation in about 15 minutes on this program. boeing. cutting roughly 17,000 positions. the ceo telling workers in a memo the cuts will include executives, managers, employees. the company announcing $5 billion in charges across it defense businesses. stock down again this morning by more than 2%. lisa: they can't catch a break. this is a company that keeps getting worse and worse in terms of the outlook was not there is a new ceo. does this give him carte blanche to make our decisions? usually job cuts leave stocks higher because that is reducing the overhead. not in this case. i take that from how much do they need the expertise a lot of these workers have and how to they get out of a slump that ultimately comes not from overcapacity but rather the opposite? lack of production. jonathan: stocks not higher this morning. not enough. far more needs to be done.

lisa: there needs to be something structural to get people confidence. ultimately, that has to come to production ramping up, some sort of resolution to some of the other probes to be able to understand what the actual problem stems from because we don't even know that at this point. jonathan: let's talk about europe. analyst thing germany suffered a mild recession. -- analysts saying germany suffered a mild recession. looking ahead to the ecb, cutting interest rates on thursday? we said if they don't, that news conference will be fascinating. lisa: right now the market is basically saying they will cut rates. my question is, how much more? essentially at a certain point, not only is the ecb trying to figure out how to perfectly land this economy, the economy has landed and then some.

the inflation rate is below their target already, albeit for only a month or couple of months. going forward, are they trying to land a soft landing or are they trying to avoid another bout of deflation? jonathan: let's talk about automakers. european automakers face of what many consider to be a perfect storm, rising costs, disappointing ev sales, galatian. sigrid de vries is joining us now from the paris motor show. welcome to the program. we have had profit warnings from bw, disch vw, bmw. what is going wrong for european automakers? >> well, there's a lot of things going right to the vehicles are there. we have a trajectory toward decarbonization. demand is lagging. that is what we are witnessing today in europe and elsewhere in the world. consumers need a bit more time to be ready for this enormous

transformation to electrification and that is what we're seeing. this is not a straightforward transformation. there are obstacles to overcome and that is also what we see now in europe. lisa: how important are lower cost electric vehicles to that transformation? >> can you say that again? lisa: lower cost, karzai don't cost as much, that are electric vehicles that people can buy? how much is that essential to this transformation? >> it is essential but it is just one piece of the puzzle. people need to be able to use these vehicles, to be able to charge electricity, at home, along the road. they need green electricity to put into their vehicles. they need to change their mindset. this is a different way of using or mobility than they were used to. price is important but it is certainly not the only part of the equation.

lisa: i ask because recently, the eu decided to pass a 45% or up to a 45% tariff in vehicles imported from china. there has been concerns this will increase the cost of domestic vehicles being sold in the ev space. is that a concern of yours that can set the transformation back? >> no, i don't think that is a concern because prices need to go down. benefits should serve the premium segments of the market which they typically do with newer technologies so they need to make or models available also in the lower and midsize price segments. that is what they're doing. we expect a lot of mobile launches. we saw some last year and now you're to come. i don't think that is the predominate issue. jonathan: we will catch up with the stellantis seo in about an hour from now. we have talked about the

overcapacity in europe. we have crunched the numbers. if you look at the top five automakers in europe, nearly one third of carpets producing have to vehicles that have the capacity to make. with this point when have to make a decision to lay people off and cut capacity, can they hold on for much longer? >> it is an issue. we are still more than 2 million vehicles below pre-pandemic levels so there is overcapacity. that is an issue that needs to be addressed and that is why it is so important to know this time around the market is lagging, demand is lagging. we need to sell more of these vehicles come european and elsewhere, and that will help. you need -- you need charging infrastructure to make the transformation work. i think only with a concerted joint effort can we really get where we want to be and also take care of overcapacity issues. jonathan: it sounds like there burden for now as on national

governments and have a big decision to make stuff they provide state aid, infrastructure rolled out quicker, or these -- hold these companies accountable. have they had a sufficient reality check to make the decision anytime soon? >> i think reality check is the name of the game. policymakers need to step up. they have set targets without a holistic plan to accommodate the transformation. the vehicles are there. but now there needs to be an market stimulated, created. we are at the point where we're going from first movers to really mass-market adoption of these electric vehicles. that is not a straightforward trajectory. policymakers need to step in and it is not -- it is more about creating, stimulating the

market, encouragement to get these vehicles on the roads. it takes a concerted effort and policymakers are on call. lisa: what do you think auto manufacturers in europe will have to do if there aren't purchase incentives or programs like that as you were mentioning? >> i mean, deaf several ways to meet their targets. -- they have several ways to meet their targets. there's a sales target set for vehicle manufacturers. they can pull with other manufacturers, pay penalties, cut production, or lower prices. those are basically the four major complaints mechanisms to meet the targets set by the law in europe. none of them are attractive, right? a lot of the problem today is caused by a lagging demand. manufacturers really need to use all these levers they have. disproportionate cost of compliance.

beyond manufacturers doing. that is what we are also in europe sounding the alarm bell so loudly. we need action now. infrastructure buildout will take too long. it is not immediate. you also see how the market drops when they're taken away. there is a number of measures that need to be taken. we stand ready. my member stand ready to deliver. you can see it in paris at the show but it is urgent we get our act together. jonathan: thank you for that time. sigrid de vries of acea. we will catch up with the stellantis ceeo coming up. bloomberg has done a wonderful job of breaking this down. in the one third of the five largest automakers in europe were underutilized last year.

that is a major problem. the overcapacity across the continent. lisa: about why this is so central to the european economy, the auto manufacturing industry in europe employs some 13 million people. this is not a small figure. it goes to the heart of the economic engine. jonathan: let's get your bloomberg brief. dani: three awarded the nobel prize in economics for research into how institutions are formed and affect prosperity. they will share a $1.1 million award. last year claudia goebel in -- goblin received the award. before that, ben bernanke who shared it with douglas diamond for research on banks and financial crisis. the singapore government has blocked a proposed $1.7 billion deal byallianz. the government decided it would

not be the best public interest for the deal to proceed in its current form. not satisfy the can fulfill its mission to the acquisition. approval of any revised deal realized with the companies you later. cracks have appeared in the labor market in eurozone after years of unexpected resilience. pressuring the ecb to lower rates. some major companies have begun offloading staff. an economist at goldman sachs predict the euro area and implement rate will rise to 6.7% over the next several quarters. that is your brief. jonathan: i think the question when the governing council of ecb has changed. it is not about what we should cut interest rates, why shouldn't we cut interest rates given the backdrop in europe right now. lisa: and how far should be cut them. this goes to the heart of what i think, this curiosity of the dollar weakness and how long the euro can remain strong given the fact people are talking of potential 2.5% in the region at

the highest end versus some 3.5% in the u.s. jonathan: slightly weaker euro. next, china put in a floor on the growth. >> a big stimulus on the physical side and on the policy sides we're expecting growth of 4.7%. jonathan: that are up next. this is "bloomberg." ♪

investment opportunities are everywhere you turn. but at t. rowe price, we're letting curiosity light the way. asking smart questions about opportunities like advances in healthcare. and how these innovations will create a healthier world tomorrow. better questions. better outcomes. jonathan: equity futures on the s&p up after posting the 45th all-time high of the are so far, s&p 500 friday session. a little bit more weight added to it. the fx market, negative buzz of coming into the ecb decision on

thursday. as we've said repeatedly through the morning, how can they cut interest rates given the backdrop in europe right now? crude down by 2.3%. china putting the floor on growth. >> we have had a big stimulus on the physical side and monetary policy sides so we are now expecting to grow 4.7% next year in china. the demographics, deglobalization and none of that will be impacted by the fiscal package that has been announced. jonathan: stopped short of giving ahead nine -- giving a headline number. reading fiscal policy remains a key thing to watch in terms of timing. the next few days could be a window for some guidance the ministry of finance.

welcome to new york city. >> good to be here. jonathan: the highlight of the announcement we got on saturday. what were the big ones for you? >> the market seems a bit confused and divided how to interpret the press conference. i think people were looking for three things. the headline to merkel figure. people outside looking for that and we did not get that numerical figure. people were looking for the details of the composition of fiscal support. a lot of hope they would be support for welfare and consumer spending most of consumption support. i think the composition was a little underwhelming because we only got a little on the subsidies and there's a lot more focus on property support -- which is important. we were missing the demand support. third thing was forward guidance. there's a bit of a difference because on the first two, they disappointed or underwhelmed but i thought in the forward guidance was quite positive and

supportive. the ministry of finance gave a very decisive statement there was enough room in debt and deficit for the central government to provide support. i thought the forward guidance in terms of local government debt support including potentially providing enough for the largest ever government debt swap in the fact they talked about being able to use special bond quoted to buy up unused -- unsold housing and land so that prperty and the use of the bond put a her property support was also as a forward guidance was more positive. on the three p's, the first, numerical, composition and consumption missing. the forward guidance i think that still has a little more hope of supportive stance. that is where you get a bit of divergence from the market saying this as a little positive move and an offshore being disappointed because their focus on the first two factors. jonathan: held understand between the first -- help me understand the difference. have you seen a sufficient

demonstration of willingness to do more? are you expecting that? >> i've always felt it is more of a willingness rather than ability. the effect they came out to express and emphasize the ministry of finance central government has the ability was kind of reassuring. i thought the tone of the finance minister was also reassuring. in terms of willingness, we will have to see further. people are divided as we did not have the numbers of people are not really sure and we're waiting for the end of the month when we will get further details. the important thing is we need to wait a little for the central economic work conference in december and then for 2025. if there is going to be a revision for the budget -- they said there's a lot of room. wasn't clear we will get a deficit revision for this year. if you're going to do revision on the deficit and debt next year, that will be more supportive or 2025. details will be at the meeting in 2025. we should get early guidance on the central economic work conference at the end of the

month. we will get more guidance for this year. we're not giving up on the possibility they will give some support, it is not clear how much will be on budget/budget and we will have to would a little more for 2025. lisa: all that being said, there's a deepening we are seeing of deflation. we saw exports coming in lighter than expected so that part of the engine is not really there. there's a question as people revise their growth expectations for china, it is still below the target. have we gotten confidence this administration has reprioritize the economy over certain national goals that they were basically prioritizing -- the reason they held out for so long seamless in the first place? >> there's been a pivot. there is a clear pivot of tried to prevent a spiral downward and providing a bit of a floor. you are right. the reason the market is divided and concern, there is lack of

detail of new demand support, especially as you said deflation profit -- there was barely averting deflation over the weekend. the lowest we have had since i think march 2021. the consumption support, that when i think was a little underwhelming. i was a bit disappointed the only thing we got in terms of details was subsidies. i think people were hoping for something more. it seems like local government finances and the constraints of abrupt fiscal tightening because governments are losing, revenue is not enough to offset the spending and they're cutting, that is making things worse. they're providing a little more guidance. even in the press conference, we only got -- they mention 400 using to support local government. within for this year it is to small relatives of the 1.4 troy and revenue shortfall it had in january to august. -- 1.4 trillion revenue

shortfall it had an jay gray to august. the details, there's a lot of concern it is not enough to provide sufficient foreign support on demand. jonathan: have you upgraded your gdp target for 2024? >> it is too premature. let alone 2024, which i know other competitors have because it is already october. we need to see more detail so we will have to wait. we also have a pivotal election in november. jonathan: johanna chua, good to see you. appreciate it posted coming up next, christopher harvey. the second hour of "bloomberg surveillance." just about positive. we have lightweight to that rally this morning. ♪

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>> the market has been trying to push in too much policy accommodation. >> you need to see earnings estimates rise. we think to support the market. >> the s&p can maintain a higher than traditional valuation set up premised on much more resilient fundamentals than many would've thought. >> it's just not as beneficial anymore to be as near term focused. >> i don't think after a bull market in both equity and credit that's lasted this long has not sucked in most investors. >> this is bloomberg

surveillance with jonathan ferro, lisa abramowicz and annmarie hordern. jonathan: the second hour bloomberg surveillance begins right now. a five-week winning streak on the s&p 500. the longest weekly winning streak after posting the 45th all-time high of the year so far on the s&p 500. record highs into monday. we are down by 2/10 of 1% on the s&p. on the nasdaq we are up by a quarter of 1%. on the rustle up by 1/10 of 1%. the week ahead is stacked on the earnings. we are from bank of america, from goldman. for the data look out for retail sales on thursday and the central bank decision look at for the ecb on the same day. under a lot of pressure to reduce interest rates in a few days time >> and give guidance they have more interest rate cuts that are coming down the pike. the question for me is how long do we believe in the soft landing, the goldilocks or even know landing with consumers seem

really robust and that's the reason my retail sales is the highlight to me along with some of those bank earnings. how much to be get that signal as we have already the consumer is incredibly resilient they are not using up their cash yet and are not seeing some sort of imminent recession. >> looking in more ways than one. looking ahead to the election later on. europe's looking at china and china is looking at america. china is looking at america to see what the is on the election front. lisa: the reason we haven't gotten more guidance in terms of headline number as well as efforts to stimulate the consumer appetite in china they are waiting for some sort of sense of who's good to win the u.s. election before understanding what they wanted to on their end. so far we are getting the right words, the right signal, but people are not getting the same confidence from china that they can really stimulate consumer demand. from europe they are struggling with understanding how much increased chinese demand will help their economy because it

will be domestic consumption for china or external. jonathan: this was born out of the conversation 10 minutes ago with an economist from citi. sounding a little more confident have you upgraded your gdp forecast for 2025. the answer, don't know yet. need to see what happens with chinese authorities and find out what happens here in the united states. lisa: there's a difference between putting a floor under a potential decline in growth and stimulating and in order stimulate you have to have more holistic sense of what you're looking to do from a policy perspective. it goes to the heart of the trade wars everyone keeps talking about amid the u.s. election. jonathan: the grind higher continues. up on the s&p 500. the bond market is closed stateside for national holiday. no treasury cash trading. lisa: why did the bond market get this right and the bond

market get it wrong? this was a discussion at home last night where other people in the household did not understand. i can understand why the bond market is right in the stock market is wrong. jonathan: is it because we are at work? lisa: it seems ridiculous. get on the same page. it out. >> can even agree on what to call today. never mind the eckley market a bond market to see things the same way. lisa: it's a day of internal division and the fact that the bond market. this is the day of internal division. jonathan: coming up this hour, chris harvey of wells fargo is the bull market turns. the election race tightens and bank of america on a stock pick paradise. we begin this hour with stocks of record highs in the earnings season underway on wall street. chris harvey sing early third quarter earnings results have been mixed and investors appear to be cautiously optimistic.

chris joins us around the table. what's the take away from the early reporters. >> it's too early to make any big predictions but if you were expecting the wheels to fall off the cart you will have to wait a little bit longer. >> the takeaway was pretty good. looking at a situation with the feds cut 50 basis points. they're still pretty low. it looks like gdp is good to be around 3% if you follow the atlanta fed and you had earnings that are ok. that's a recipe for higher stocks and that's what we are looking at. lisa: does this give you the feeling you want to lean in and increase per -- exposure. i was reading notes and wondering where does this leave you. you're saying we are range bound. take the rest of the year off. why do i have to keep doing this. why am i here on a day the bond market is closed. chris: you should be more balanced. and more companies should participate trade it's also

saying the economy is ok if you're talking about recession fears, the point about people not raising their economic forecasts you look at the fed and the sell side they are still talking about 2% tilde cows come home. we saw this early this year where people are expecting the economy to be in recession. i think we came in with 13. and then what happened in the beginning part of the year we talked about reflation. where materials, energy all trade higher because the economy is better. it was just forecast being revised. we don't see that and people are realizing the economy is stronger so people should participate should begin to participate a little bit more aggressively. >> what do you need to see from earnings. is it third or some sort of visibility into the future. is a sense of confidence they can make big moves because some people are worried the lack of certainty itself could actually

foster some weaker growth ahead simply because a lot of companies don't want to make big moves. chris: i don't think we will see a ton so far. we have the -- we had the fed and now we have an election coming up. what we saw from ism manufacturing. a lot of people saying we will spend, we have the ability to spend. we may look for better guidance but we are just not planning on it because people aren't ready. they are sure who's president. how are fundamentals right now. jonathan: similar theme in the last week on the program. just attaching themselves to themes. utilities exploded through 2024. what's the theme you want to grab hold of. chris: we are struggling over that, we are looking at trade.

we think we have a good shot at small caps ending the year on a high note. the theme is really more about producers, consumers at this point in time. you really want to dig into industrials and cyclicals because we are seeing that dynamic between price beginning to inflect and that's really positive for earnings. >> you think producers and consumers should be the ones that benefit the most. chris: the consumer is fine paid a risk on the consumer is as long as they have capacity and will spend they still do have capacity but do we want to lean on that. where we want to lean into is we want to lean into these secular stories around electrification. and by the way what we are seeing did general industrial companies the price makes it started to turn positive. they've held onto price and now they are starting to turn up and that's really an interesting dynamic in 2025.

>> we were speaking with lori calvin sena and she was saying that a lot of people are also waiting to see what happens with the election and then sean asked what are they waiting for. what are they can ado. they said they just want to have an answer. so they can move on paid is that what you've seen. >> they want certainty and then there's just two different things. the stock market will react positively but you will have a different reaction from a trump win versus a harris win. under harris win it's going to be very growth the longer term. the model you should take forth is what happened under obama and biden. if trump wins at least for the first three to six months it will be value, banks and small caps. so really while people are waiting for the result and the market probably trades higher. very different reaction. jonathan: are you confident we get a result that we? chris: pretty confident but i cannot guarantee. if you go back when we have the hanging chads, that was

something we probably won't focus on this time forward. things will be to close and you have an automatic recount which doesn't go to the supreme court. >> how do you think the market will trade that story. chris: not well. you'll initially see negativity but it won't last long. soon as they get it resolved we are back up. lisa: i don't think we are going to have hanging chads paid we will just have other issues. you ask the right question if we don't have an answer at a certain point how do markets handle that. our people lining up to buy the volatility because they assume that there will be some sort of certainty? jonathan: i think they got it wrong in 2016 they thought ultimately donald trump would be a risk off candidate for market spread they learned quickly that he wouldn't be paid this time around they've got the scenarios and no one knows what to do. i feel it is an element of burying heads in the sand. the base case if you ask actual

people following the selection closely charged with trying to understand how this will play out. you won't get an answer the morning after the election. this could take days or maybe weeks. i don't think the market is on that page at all. >> what i would add to that is the geopolitical's pre-hot right now. if we don't have a president of the geopolitical probably gets hotter real fast. and then we have a lame-duck president. whoever wins doesn't come into office until next year. you have people we situations across the globe that could very heat -- heat up very quickly and people may want to challenge that and say i see an opportunity and that could cause a lot of volatility. jonathan: are you looking to asia or the middle east? chris: both. if you look across, one of the things we think about is they are going to challenge the new regime, whichever that that is. things are as hot as they've seen in the geopolitical side

along time and that's -- when people are saying everyone is feeling confident and things are good, but the big risk is what happens on the geopolitical front if we don't have a president or the fact that we have a lame-duck president and the new president cannot do much until he or she is put into office. >> how much that is the hedge to buy oil companies rather than treasuries or treasury like exposures. >> i think the hedges on the commodity than the stocks. you've obviously seen the commodity do well. we are not big fans of the stock. i'm not sure you'll get the right reaction. marti seems more sensitive and likely the better hedge. jonathan: it's good to see you. chris harvey of wells fargo. equity on the s&p up by more than 1/10 of 1% with an update on stories elsewhere is your bloomberg brief with dani burger. >> goldman sachs upgrading its forecast for china's economic growth in 24 and 25 spurred by

the announcement of measures to shore up growth including plans for greater public spending. they expect china gdp to expand this year. they did see it at 4.7 previously. it lifted its growth prediction to 4.7 from 4.3%. taiwan semiconductor is expanding its global footprint and eyeing europe for its next chipmaking plants. a senior official said construction is underway in a facility in germany. the speculation of another plant could be announced in the czech republic. tsmc has spent billions in recent years to develop plans and allied countries like the u.s., japan and germany with risks looming over tensions in china. the harris campaign is trying to draw attention to the health of the candidates. harris released a detailed medical record that claims the vice president is in excellent health. data on her blood pressure, diet and lifestyle. harris challenged trump to release his medical records which he has cooperated in his prior presidential campaigns.

he said he would gladly release the records but so far has declined requests to do so. that's your brief. >> more in about 30 minutes. trump and harris and neck. >> she is so bad. get that cannot happen. the way things go in this country nowadays i guess it probably could. >> are they afraid that people will see that he is too weak and unstable to lead america. jonathan: you have a few more weeks left of this. the conversation up from new york city this morning, good morning. ♪

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jonathan: equities firmer up by 1/10 of 1% on the s&p unchanged in the fx market the euro weaker.

look out for the ecb decision this thursday. trump and harrison connect. >> she is so bad. she is so bad. it can happen. although the way things go in this country nowadays i guess it probably could. that's why we want to build up a lead. >> check this out. he refuses to release his medical records. one must question are they afraid that people will see that he is too weak and unstable to lead america. >> here's the latest this morning trump and harris campaigns narrowing in on swing state voters as time runs out ahead of election day. the candidates are deadlocked in the latest nbc poll. isaiah saying there concerning data points for the harris campaign in particular. we continue to highlight the trump meaningfully outperforms hairs on the top issues for voters. the economy and immigration.

welcome back to the program. it's good to see you. do you select trump is a slight favorite and give us more detail on why? >> with the caveat that no one knows anything. and we are all just applying our mental models and doing our best to read the tea leaves. no one can have the utmost confidence in polling given how terrible it was during the last cycle. i think what i've tried to do is focus in on one mental framework for this election and its what do swing state voters care about. and in every single pole they list of the economy and immigration as our number one and number two issues. trump is maintained his lead on both of those issues since the beginning of the election. it's a relatively healthy margin on both of those issues in the swing states and that's my mental model with th caveat no one when we get into election day. jonathan: a major caveat that no one knows anything.

one exercise people were doing over the weekend and i saw this and i'm sure you're familiar with it. comparing where the former president was in previous polls in 2016 and 2020 in swing states and then how he performed in reality when the vote came around. what you saw was outperformance after outperformance. looking at the swing state poll suggesting we get that again. how valuable is that exercise considering we've done this for three times. >> in talking to pollsters which we spent a fair amount of time doing the pollsters believe they have solved some of their issues from 2020 by focusing on voters who have actually voted. we are going to see if that has an impact, i look at the quote unquote blue wall states of michigan wisconsin in pennsylvania. in 2020 trump outperformed the polls in those states by five to 6.5 points. given that he is in a dead heat

of a percent or so in each of those three states against vice president harris you have to have at least a modicum of a sense that the trump campaign might outperform those numbers again at which point we are not in the margin of error like it seen for the past few weeks. >> one of the questions is whether the pollsters have adjusted to what happened in the past two elections. have they communicated they tried to adjust for this discrepancy or are we probably doing a repeat. >> i think that structurally you could get a degree of comfort that they are changing things but the fact here is we still don't have the methods and the means to get a good read. this is not 45 years ago where you could just dial folks up on the phone. i also think we have to keep in mind there is undeniably a shy trump voter. something in polling you here referred to as the bradley effect were folks just won't tell you their viewpoint when they're on the phone.

i think those things are really things you cannot solve for now. so i generally think of polls is giving us some indication directionally of where we are going but we cannot look at them for any degree -- lisa: we will go with that. a b question and you put out these figures in your latest notes that i thought wa fascinating that you believe republic in 775% chance of winning the control of the senate and a 55% chance of retaining control over the house. basically put this all together we are looking at a much greater likelihood of a red sweep than what's currently being priced in by most people out there. how do you sort of talk to your clients about that. >> there are two points we try to make. number one on the presidential election there are certain themes you can sink your teeth into no matter who wins. one is we will continue deficit finance spending no matter who

wins. that's a theme on that. in terms of looking at d.c. and the different permutations i have the utmost confidence that the senate will flip to republican control. here it's about geography and arithmetic. in terms of geography democrats are defending really tough seats in ohio and montana. in terms of arithmetic they would have to run the table on all of these just to have a shot at maintaining the upper chamber. so in an election where no one knows anything and we have to have a decent amount of humility regarding that. the one thing i can anchor myself to when i think about the post 24 alexion landscape is i think we will have a republican senate which has real implications for oversight of regulators and ultimately the fiscal fights that are to dominate 2025. >> i would be curious if someone did this. on the campaign trail last week there was a very important accusation by the former

president the black males might not be ready to vote for kamala harris because she's a woman. it's quite a statement and a very tricky want to go down. what you're telling the large group of people saying it has nothing to do with policy. accusing people of being misogynistic. understanding from your perspective, if you tell me how certain races or performing relative to the top of the ticket and if there's any evidence that someone who's willing to vote democrat isn't willing to vote for her because she is a woman? >> this is part of the problem is we are never going to know what someone does when they go into a polling booth and they pull that curtain behind them. we don't know what will motivate them at the last second so that's part of the reason i've focused on state-level data about what actually motivates some of these voters. again it's the economy and immigration. i can't tell you if they will go into that voting booth and say

today i'm not as worried about the economy. today i care about health care choice. at which point you have a complete different outcome. so to me i don't think there is that. that's why you are seeing targeted ads of the past few weeks is the campaigns themselves have been able to hone in on some of these messages they think will motivate very specific groups of voters. but i do not think there is an answer to that. >> on a larger level what is the reason for this huge gap in gender because that's one of the themes we've seen in this election. the difference between men and women. >> there's always been a gender gap. if only men voted i don't think there would be a democratic party anymore this point. there's always been a gender gap but what you are seeing is a more pronounced gender gap that is localized in people of color and black and latino voters. i think that surprised the harris campaign and that it's been somewhat persistent. the harris campaign has done a

pronounced effort in getting out to male voters on certain issues. i think they've been surprised at the gap and the persistence. i think part of that you can absolutely ascribe to some structural misogyny. i think that something you're seeing from the harris campaign. but i have again humility here to know that i don't know what motivates every voter. it's just something when you dig into the numbers it is there and it is something that's becoming one of the defining themes of the cycle. jonathan: wasn't it there before harris? wasn't it there when biden was top of the ticket? isaac: look, i think this is one of the reasons you can see the coalescing around biden in the primary. this is a structural dynamic that's at play and one that i don't think is just about this election. i think it's a bidder will -- bigger one we will probably have to have to try to understand but we are 21 days out here and we

will see if this is one of the singular themes that moves the election. >> appreciate it. it's becoming a bigger and bigger issue on the campaign trail. lisa: if only men were voting there wouldn't be a democratic party. this gap has gotten incredibly wide and we need to have a lot of conversations about why. jonathan: it's never any one reason. there's always good to be many. the left has been demonizing men for a long time and for other males they feel like it's not a party for them and you see that in the polls. lisa: we will see whether people turn out. and that will come down who wins. jonathan: live from new york, this is bloomberg. ♪ 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.

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>> stocks are firmer across the board on the s&p 500 up around 1/10. likewise on the rustle up by 1/10 of 1% on the s&p 500. on the nasdaq up by 2/10 of 1% following five consecutive weeks of gains. turning the page and get a foreign exchange let's look at the euro and look at pound sterling. the pound just a little bit weaker on the session. an important conversation later on this morning. the british prime ministers sitting down with stephanie, the outlook for the economy in the united kingdom and what's can happen with the budget in a few weeks time. >> especially after dire comments from keir starmer this

question of how much did he come out with a sense of being sort of practical budget being balanced and then when he's actually putting it into policy it's looking different giving a whole bunch of different constituents some anxiety. jonathan: a tough 100 days. the approach to the economy into the deficit and financial markets it's like a document that was written for the immediate aftermath of liz truss and they haven't edited it. when things settle down and financial markets and the economy started to improve it feels like they are looking at her rearview mirror to a different place. >> it looks like an emphasis on reducing debt rather than growth. and when companies are looking for some confidence the policies are in place for them to feel comfortable expanding in london, expanding the u.k. they are not getting that in any kind of practice. >> there's a summit where gathering business leaders. over in paris france. it's kind of like that.

all the ceos coming together. that emphasis is shifting back to growth but it's taking a number of months to get there. >> 100 day since they try to figure out their footing and how much input will they get from these companies and how much will they listen. as you heard the warning from some of the big bankers. if you don't make these changes you will permanently lose your stature is a major global financial center. >> brent crude wti trading's offer a headline across the bloomberg terminal five or six minutes ago from opec. cutting the global or demand growth forecast for a third straight month. lisa: what this comes down to you look at some of the details is adjusting to the demand that they see on the ground. they also have some forecast for u.s. and european economic growth in the u.s. they are talking about upgrading the forecast for this year to 2.5% from 2.4%.

next you're keeping it around 1.9%. for the economic growth forecast for this year 0.8%. this is not an area we are seeing in germany. how much this is color the sphere versus this idea that people are transferring to other types of energy output. >> the risk of a supply shock in or prices surging. the other side the risk of softer demand captured by this opec report. >> i cannot help but be cynical if this would play the groundwork for prolonging some of the cuts to supplies so they can get prices to go higher. >> it's rather intuitive of what we've heard. >> it doesn't seem like they are cutting growth forecasts or there's any other reason so if they're cutting their demand growth. at a time with her try to pop up prices. evidentially keep some of the production cuts in place for you put those two things together and this makes sense. >> lease on the crude market. >> the u.s. is sending an

advanced missile defense system to israel to help shield it from further attacks from iran. the terminal height altitude area defense will support their own air defenses are stretched by iranian attacks at least twice already so far. i think you're right. we're preparing not for the retaliation from israel to iran but potentially the lifeline coming back from iran if that's organ a c. which is a reason why they said look at any people who are selling crude in a relief sort of sale as being a bit premature. ultimately it's the tit for tat how much this escalation continues and ultimately there is clearly an effort to prepare for an escalation on both sides. >> going into the last few weekends waiting for that retaliation. let's head to this story president biden announcing $612 million in recovery aid for areas damaged by milton and helene. the white house thing funds will go toward six department of energy projects on the

electricity grid. lisa: the maps that they've had for the potential destruction of these two storms which is very different nature and the ways they were destructive were totally outdated. u.s. flood maps were drawn up in the 70's and 80's. there were not drawn up in the current climate. what they need to do to fortify the infrastructure to prepare for more of the same. jonathan: something everyone talked about with her >> >> guards to floods. people didn't think the region would be susceptible. also how do you prepare for such different types of threats on one hand you had a day lose of rain and flooding from the mountains. and then you headwind at catastrophic speeds. >> let's talk about big bank earnings pray they continue with goldman. bank of america tomorrow. the companies expecting to see rising revenue pressures and lower net interest income is the fed cuts rates. all of these are been lowering the bar into the results.

goldman sachs talking about softer trading revenue. the focus for jp morgan. then what happened on friday jp morgan wells fargo saying there's nothing to see here. >> jamie dimon was aggravated people were asking about net interest income saying it's a stupid metric. you're trying to put this into a model and it comes out one way or another. the bottom line is they are doing well. there's a lot of risks on the table and they don't have certainty going forward. wells fargo saying the same thing that they're looking for signs of softening consumer. this goes to where you are now and where you will be is a big black box that nobody really knows. >> bank stocks amidst all of that having a decent week of gains on the s&p 500. investors also keeping one eye on fed speak data including retail sales. calling it the most important data point of the week noting two things. september's report tends to be softer with consumers prepping

for holiday shopping but it could signal broader weakness. good morning it's good to see you. let's run with that word weakness and think about jobless claims last week on thursday. they spiked higher. what's behind that. is it >> all just hurricane related. >>that's what we don't know and that's what this is going to be very messy and hard to interpret. hurricanes usually have a temporary effect on the economy as we've seen. a rebuilding effort so we might see a little bit of slip in growth in the last three quarters of the year followed by a rebound in 2025. but what's going to be more immediate is the effect of the labor market. first it's, come in with hours worked. remember in september most of the jobs that were created like a bulk of them. two thirds in the private sector were jobs you had to be on site for. so retail health care. if you look at the damage across the southeast and the number of

businesses that are still without electricity going to work is going to be a challenge. and so that's what i expect to see, hours worked really playing a role. those are not just ours alone. they will feed into our measures of productivity. our measures of hourly earnings. i think the october jobs report is going to be clouded. >> it makes me wonder if the federal reserve is sitting down and we have an election result in hand. will they get a clean read on. nela: they might get a clean read on retail sales preyed it's knocking to be is affected in the september data as the jobs market. and they will be really focused on the health of the consumer in terms of whether they might need to make an aggressive cut or not. if the consumer stays relatively balanced which they have proven to be very resilient through the summer. i don't think they will need to do anything drastic when it comes to worries about the state of the economy. lisa: do you feel like there is

some sort of weakness or do you think in the data you see it simply companies that are reluctant to make a big move so it becomes a self-fulfilling cycle of not having confidence to higher so it doesn't get back into the economy so it chugs along at this low rate. >> there did seem to be this feeling the companies were holding back a little bit. and not because of economic weakness. just that there's a lot of uncertainty and that can lead you to delayed decision-making. part of that uncertainty was corrected when the fed started their rate cutting cycle. we knew now we were on the path to lower interest rates and it seemed to follow some of that hesitancy and we saw a big jump in hiring in september. what happens in october i do not know because the uncertainty has turned different with the hurricanes and where most of the jobs we are seeing is service providers. we don't know how global or

national companies are going to be looking at the hurricane damage in the southeast and maybe fine tuning their hiring plans. lisa: the idea retail sales is possibly going to be more important than some of the employment data simply because that will be so distorted for the federal reserve. is there a feeling retail sales can drive business decisions. can lean into this strength. and companies will have to realize that. nela: these are hugely important months. the may 20 25% of their revenue over the holiday season. in some sense they will have to skip over any kind of hesitancy and lean into what they are seeing so far which is consumer strength. especially for big share of your revenues for the year will be in the next three months. i expect hiring but also some clashing in certain regions. we will see how that plays out over the next three months. jonathan: is -- we saw this big

contradiction on thursday with jobless claims spiking. where are we on layoffs. the job openings it's a little bit dated. you get a real-time look at things. where are you with hirings and firings. >> the trend overall. and we have to look at the trend and not just a single data point especially when we know it could be affected by weather events. the trend overall is people are staying on the jobs longer. and that's both voluntary and involuntary layoffs. there hasn't been a lot of moves in terms of the overall headcount and the hiring we've seen has been expansive hiring. not replacement hiring. there are some sectors we've seen, some downturns in manufacturing and in information but overall in terms of the service industry it's been really strong. jonathan: the federal reserve is a bias to cut interest rates at the moment. rafael bostic suggested skipping

the meeting. how do you feel about skipping a meeting given all the contradictions in the data the murkiness, why should still be to reduce rates. nela: three months ago i said it will be likely there will be stops and starts and monetary policy that they would not be on a smooth glide path. yes the economy is strong. every month you get a new narrative about the future direction. editing the fed is susceptible to that. these weather-related events don't make it any easier. there's a real possibility they may skip meetings in order to figure out what's going on. then -- and that is to be data-dependent. to be a little bit more long-term. i feel it we are kind of playing hopscotch with data. we just leap from one data point to the next. i don't think it's a viable strategy you want to see with

the fed long term. >> they've got a pretty clear message on thursday. how much can we conclude this. of time that the u.s. is truly diverged from europe when it comes to economic trends. >> that divergence has been in play. so the labor market has struck to be candid there some parts of europe that are doing much better than expected but the u.k. for example which was thought to be going into a recession a year ago and they made it through that. they are still going to see that labor market tightness we saw in the united states those are long-term demographic effects. it comes to the u.s. economic story it is unique and separate and apart from any other place in the world right now. you see a healthy consumer, strong business investment. you see a stock market that keeps growing and you see a very strong labor market. all of those things added together put some distance with the rest of the world and it's really the u.s. driving the world economy. >> how much when were talking

about china the fact that there is this deflation and a sense that growth is falling off a cliff. how much do you see that not all affecting the u.s.. that these two economies have grown apart even though we are seeing it trickle into europe in a meaningful way. >> it's interesting the u.s. economy because we think of it as a global economy but there's parts of the u.s. economy that's insulated from global effects. our energy for example. so i do think china being the second largest economy in the world will eventually affect the united states. but how much is undetermined and. i do think there still some tailwinds in the u.s. economy that even allow us to grow past >> weakness other places. >>you're one of the best it's good to catch up. thank you nila richardson try to look beyond 2024 into 2025 the range of outcomes for 25. attached to different outcomes but november and the election you'll of a tax rate of 28%, for

corporate taxes, 15% with conditions. we might have tons of tariffs, we might have none. that's at least 12 months. >> add to that when you get a lame duck president at the time when some risks in the economy are raging, how much uncertainty does that add into the picture all of this should make you want to hide under a pillow people are still buying stocks. >> buying credit as well. they are so tight for high yield investment grade. >> if you're looking for a forward indicator that we will see defaults or any kind of stress in the credit world the canary in the coal mind you are not seeing it. if you're going to get that weakness where is it flashing because it's not infix or credit. it's not in stocks or earnings. and it's not flashing with the consumer preyed where could it be. >> close to multi-decade tights across parts of this credit market. let's get you an update with your bloomberg brief.

>> authorities arrested a man on gun charges outside of former president trump's coachella rally over the weekend. the 49-year-old suspect was driving with a fake license plate and ids with different names. official said the former president was not in danger and investigation is ongoing. marine le pen is heading to court. france plus far-right leaders appearing before judges. her and her party are standing trial over suspected embezzlement of european parliamentary funds. the national rally party and 25 of its top officials went on trial for having use money intended for parliamentary aids and instead paid staff or the party between 2004 and 2016. le pen has denied any wrongdoing. a new bloomberg survey found germany is going through a mild recession and underscores the months of unease in europe's largest economy. analysts in the poll say gp shrinking point one percentage point in the third quarter following the unexpected

contraction in the second quarter. the weakness in germany is largely tied to the cutoff of russian energy supplies disappointing export demand from china. problems among car makers into scarcity of skilled workers. that's your brief. >> up next a stock pickers paradise. >> people might say they are bearish and when you look at the equity exposure is still relatively high. earnings to a lot more heavy lifting into 25. >> live from new york, this is bloomberg. ♪

>> five weeks of gains on the s&p 500 the longest weekly winning streak this year looking to add some weight to the rally up by two tents of 1% on the s&p 500. a lot to work through, bank

earnings and economic data retail sales the main event. that drops on thursday morning. under surveillance a stock pickers paradise. >> people might say they are bearish but you look at the equity exposure it still relatively high preyed household stock exposure is right around an all-time high. does not as much juice to squeeze out of that valuation and the multiple expansion part of this so earnings need to do a lot more heavy lifting as we turn the corner. >> here's the latest earnings season resuming this week with big banks once again the top of the schedule. bank of america expect a great environment. writing the real action is going to be in the single stock level is earnings season. a stock pickers paradise. as long as companies have looked through macro headwinds in early signs of improvement. joining us for more. let's start with that why is this a stock pickers paradise. give us some detail. >> when you look at the single

stock level. it's pricing and the biggest implied move or biggest earnings reaction in the data going back to 2021. if you look at the implied volpe did at the index level for their spread it still very low. which means the real actions going to be at the single stock level not necessarily of the index level in which case we have a very good stock market. >> doesn't mean the real actions away from the big tech names. >> it might be. i think big tech is still good to be a big focus this earnings season. i think the real focus isn't necessarily about how companies did in q3 it's really about the outlook on the others the curve now that the easing cycle is, on. the most interesting combination is really the sectors of the economy so the manufacturing, housing and financials i think those areas will be the biggest focus. lisa: you had this statistic that in the third quarter we saw

67% of stocks outperforming the s&p 500. this speaks to a broadening outgoing back to 2002. just put into perspective what the characteristic of those stocks were the did outperform considering they were two thirds of the entire overall 500. >> this is what happens when the market is so concentrated in those names. if you thing about the internal market location, i think it was really driven by earnings. a lot of people say rates was the biggest driver for inflation. heading into 22, everyone was worried about the fed hiking cycle and what that's going to do too long-duration equities and that's why tech underperformed. if that was the case tech should've on -- underperformed last year as well. tech earnings on the performance , the entire year in 22 and in march of 23. that's essentially when tech earnings stopped underperforming

and started outperform. the other one came out of the earnings recession in q2 and the earnings were expected to accelerate, re-accelerate in q4 into 2025. the narrowing growth differential between tech and others earnings i think that's the main driver. lisa: does this mean tech earnings are now set to underperform and under deliver not meet as much and essentially could be laggards even as the others lead. a lot of churn under the surface even if the index number stays the same. >> i don't think there necessarily going to miss. these are basically fundamentally the best companies in the world. i think they will still deliver but there's also high expectations that they are going to deliver because they have been delivering and valuations are high. so if you look at positioning in valuations in the other it's still very low. there's a big gap between the other four and the next -- and the mag seven.

that's really going to try the catalyst especially as earnings growth. >> a theme for this program for months is that we are flying blind into 25 until we know the outcome of the election. a lot of them sing low visibility. how much visibility do you have and where you're getting it from? where does that conference, in for one year out. >> we have higher visibility than a lot of people do and the reason i say that is because the manufacturing and the most recent sectors of the economy have been in a recession over the past few years. a lot of people are saying this hiking cycle didn't really have an impact on the economy which is true. but if you look at underneath the surface preyed manufacturing and housing sectors have been in a recession and that matters for earnings. because 50% of earnings for the s&p are tied to those bids. that's why we haven't really

seen a great environment for profit sprayed volume is still very low. i don't think 2025 estimates are that high. everyone's talking about how it's overly optimistic. 50% growth the consensus is pricing in. it might be a touch to hyperion we are 13%. we've looked at volume expectations for next year excluding the mag seven consensus is forecasting about 2.5% volume growth and that's not too high especially compared to super easy but we are expecting this year which is .5% year-over-year. i don't think it's necessarily overly optimistic. >> this was smart. it's good to see you, come back soon. on earnings season looking ahead to 2025. coming up on the program kate moore of black rock. we will catch up with sonya of ubs and victoria fernandez of cross mart global investments. the third hour of bloomberg surveillance up next.

dad: hey boss. you okay? son: i said i'm fine. ♪ dad: you can talk to me. son: it's been really, really hard for me.

>> the market has been trying to push in too much policy accommodation. >> you need to see earnings estimates rise we think to support the market. >> were expecting the s&p can maintain a higher than

traditional valuation set up premised on much more resilient fundamentals than many would've thought. >> it's just not as beneficial anymore to be is near-term focused. >> i don't think after a bull market so to speak in equity and credit that's lasted this long has not sucked in those investors. >> this is bloomberg surveillance with jonathan ferro, lisa abramowicz and annmarie hordern. jonathan: happy anniversary to the american bull market. equity futures on the s&p 500 firm or by 1/10 of 1% on the s&p. lisa: i am blown away. jonathan: all-time highs close on the friday. just a 10th on the s&p up three tents on the nasdaq 100. >> on the rustle up by 0.04. the week ahead looks like this lots of bank earnings preyed we get some more tomorrow morning. a lot of data including retail sales on thursday. and in ecb rate decision retail sales the data point of the week

for a lot of people. >> it might be more important for the federal reserve and the jobs figure that comes out next month simply because it will be so messy that it won't give clarity. what will be less messy is one thing you cannot get between is an american in their credit card. that's what we've been hearing about and seeing in all the data and all the rhetoric. >> i think we're still trying to figure out the jobs cleanse figure. big gap higher much higher than anticipated. how much of that was just a hurricane impact and how much of it wasn't. >> basically there's no sign of real mass firings. a lot of people say it is messy because of the hurricane. that said you are not seeing a lot of mass hiring either. if you have the stagnation which way will it flip. do you see a flip in the market expectations. the bond market posted because they had their priorities straight on having a day off. either way 10 year treasury yields have risen 45 basis

points since the low about a month ago. in september. that's a 41% off this year's rally. all the people talking about the fed not needing to worry too much about inflation they could cut aggressively. that's kind of gone off the table in less than a month. i think it's ridiculous. jonathan: coming up this hour, the bull market marks its second anniversary. the soul ceo as the automaker shuffles its c-suite. and sonja ubs looking ahead to retail sales. stocks hitting all-time highs as the s&p celebrates its second anniversary -- its second year anniversary over the weekend. we are focused on how management guides for 4q and 2025. we want management teams to express confidence about their ability to deliver revenue growth to manage expenses and navigate policy and political

uncertainty. kate it's good to see you. >> i didn't realize it was coming here on the anniversary of the bull market i would've dressed differently. jonathan: red ties and hearts and stuff like that. >> it's quite a celebration and i feel really good about the fact equities continue to make new all-time highs in the fundamentals look really solid this far in the cycle. jonathan: where is topline revenue growth coming from? we will get more of that. kate: this was the big question. where companies were putting up good bottom line numbers but the top line was really disappointing on expectations. this kind of quarter we've seen a bunch of solid activity, good incomes, we've been encouraged by the fact inflation has continued to slow and i think we will see solid but not blockbuster revenue growth in the third quarter. the real chance will be into next year and the uncertainty is removed. people will more comfortable for

people and individuals. lisa: john didn't sound overly enthusiastic about it. i do think it hasn't felt this way. it has not felt like a bull market. it's felt like a grind of a lot of different narratives coming together with whip saws in between and a couple of behemoths that have led the charge while everything else had a soggy performance. when does that start to feel like a bull market. >> there's been a huge meant of discomfort in the leadership. the persistence of the leadership. the message we've talked about many times and i feel like i've been a broken record the companies that have been the leading of the market. these are the companies putting up the cash flow. and i expect that will continue into 2025. how many times this year have the uncomfortable equity investors said it's time for rotation. the market is supposed to broaden out. it's only going abroad and out if the top companies actually

don't have the same growth trajectory they've had over the last two years. i don't think that's the case. parts of the tech in the ai adjacent themes have a lot of legs to go. >> given that are you recommending clients overweight stocks even at the past of bonds at a time when the biggest uncertainty might not be in the stock market but at this point really is in the bond market that closed for a second anniversary celebration. >> the bond market celebration correct. i would say this. we have been more neutral in terms of our fixed income allocation. i still think you will get the best juice from the equity market but you have to pick your spots. the one thing that's happened through this past year that people have not always been comfortable with is you had to be tactical. you've had to be on your feet. i don't think the set it and forget it strategy will go forward in the equity market. for this i would say i told you i left the tech and ai adjacent

themes. i think there's opportunity in the banks as we move forward. if we continue to have stable growth indicators for opportunities and some of the cyclicals at you have to be selective. >> topline growth, expense management. and the navigating policy and political uncertainty. how are they can navigate the politics of the next month maybe the next 4.5 years. kate: i don't think they will make a ton of decisions in the near term. the second half of the year during a big election cycle you don't get a lot of cap acts. it's mostly maintenance and consumers have said in a lot of polls and surveys more recently they are holding off on making big decisions until they understand with their tax rate will be if there's any changes in policy. we are in a bit of a holding pattern for at least the next few months. but next year once we understand not just tuesday to be president but the composition of congress. i think there will be a willingness to kind of embrace

whatever that >> the biggest question marks we hear about policy uncertainty, questions about potential for growth in terms of earnings and margins. we hear about a reticent investor who is holding off because of risks. and then we see a fifth straight week of gains in the s&p 500 the longest streak as john was mentioning going back to may. how do you square what seems like a lack of confidence in surveys and a demonstration of confidence when it comes to allocations and inflows as well as performance. >> sentiment has to be a big part of everyone's investment process and when you have these sentiment indicators, even some companies saying they are concerned. that's a moment you say there might be opportunity. when everyone is saying it's an all clear is literally nothing for us to worry about. we will pile our risk into the riskiest parts of the stock market. then you have to back yourself off. the fact people have been more

reluctant bulls that there has been a fair amount of argument around leadership. that sets us up well i think for positioning and we are not overly i think the stock market is not overly owned at this point. there is still a little but of cash on the sidelines and the fleas tech companies put up numbers and third-quarter reporting there's room to re-up those positions going into year-end. >> always good to see you. jonathan: stateside looking at equity futures by more than 1/10 of 1% on the s&p 500. we need to head over to europe this morning. the road ahead for still anticipate shares are down by 40% this year. the automaker shaping up its management team in a push to drive performance. joining us now is the stellantis ceo who joins us from the paris motor show. i'll come back to the program it's always good to hear from you. the last time we spoke we had some changes. the eu voted to impose some tariffs on chinese automobiles. have you had some chinese car

companies knock on your door dial your phone number and ask you to sell some of your brands to them. is that happening? >> well first of all thank you for inviting me. that happened in the past. in the past some chinese car companies asked me to sell them some of our brands. which i believe are significant assets of arsenal lantus company and therefore i reject the request and we are keeping our brands and of course doing good business with them so the answer is no thank you very much. jonathan: have a followed up on that request in the aftermath of the vote in the eu and the last few weeks? carlos: no they did not. but it's obvious that with our investment and the equity we have. and most importantly the fact we control all of their exports outside of china, it is quite clear we have the manufacturing

footprint not only in europe but all over the world to bring to our partner into ourselves the manufacturing sources that we need to go and do a good business out of the constraints that we need to manage and of course tariffs are a constraint. and you can go around tariffs if you manufacturing side of the bubble that has been built. this is what we are offering. everything that is sold outside of china is under our control. and we are of course creating that value. thanks to our dealer network system and our manufacturing system all over the world. this is a competitive edge of stellantis that most of our competitors cannot switch right now. >> give us more detail on how tariffs might impact the company. for the benefit of the audience, the joint venture you have with the chinese manufacturer some of those cars behind you as we speak. how are you thinking about retaliatory measures from the

chinese. how insulated are you from them from -- from that developing? >> first of all what we see when we work with our partners is exactly where their competitive edge is, of their competitive edge is very localized a number of systems on the car which is good to know because that's where we need to work harder to be more competitive compared to what we do today so we see that. we also see they have the ability to be much more affordable and meet the expectations of the consumer base that we are having the western world which is basically the consumers wants to buy ev's at the price. and that's exactly what they are able to do today. we are also able to do that with some of her offerings in europe but we need to expand the competitive edge to many other brands and many other models. that's a competitive edge our company has. by having disability with them.

we can leverage their cross competitiveness and their speed to go to market at the same time if needed go around the western world is trying to impose on us. that also means that compared to other western world actors we are in a much better position for the future then some of them. >> are you basically saying the only way to really provide cost-effective ev's to a european consumer is to get around some of the up to 45% tariffs the eu just voted on. >> what i am saying is we are leveraging a strategy that is based on two major peers, there's one pillar that brings ev technology at the price of ice. despite what you're mentioning because we can go around the tariffs by manufacturing the cars inside of the bubble. on the other we have a dedicated

platform that we call the smart car platform. but we are losing two compact cars to the market that we bring to the market at 23 thousand euros which is the core of the market in terms of pure ev. that price is extremely competitive. it is on par with a chinese capability and that kind of offering is also profitable. not only do we have the pillar of fleet motors. but we also have the internal which is the smart car platform we are now using for the hatchback but also for the crossover version and many other models will follow. fiat models but also that is going to bring a lot of competitiveness to the market. what i'm saying is to lantus is in a perfect condition to leverage affordability with profitability and zero emission in the future. lisa: how important is it to

retain profitability and increase going forward, how important is it to pare back certain brands that aren't performing as well and don't fit in those targets. particularly in north america. >> in north america we have a very specific problem which is operational not at all rocket science. in north america we got trapped by a marketing plan on the second quarter of 24 that was very audacious and it did not work pretty it failed. we got trapped without marketing plan and we needed some time to discuss the best way. i do that personally in august. now we have a new more conventional plan that is active. over the last few months we reduce by 52,000 vehicles and we will be before the end of this year before christmas below the

ceiling of 330,000 vehicles which is the ceiling for normalized entry. this is now being fixed. it's not rocket science. i think we have the right dynamics right now and we expect this to be fixed this year so that wasn't what happened. the brands are very healthy. the jeep brand, all the new models we are bringing, but also very soon the new chrysler models. i think they are very healthy we just need to do a proper operational work in terms of weight to market and collaboration. we have the capability to do that and i believe that ram and jeep are already leading the way in terms of market share recovery. as we improve between september and july from 7.2 to 0.8%. market share is up. that will be normalized by christmas and i think we are back on the quite nice trend.

this is what our investors and community investors expect. jonathan: are you open to selling any brands? carlos: not necessarily. i'm not necessarily open on that. of course we consider any offerings or proposals lacking any open-minded business team -- like any open-minded business team. we are not seeking any sale of any of our brands right now. that is very clear. jonathan: last time you talked about corrective action. you of the mandate until the end of 2026 is the ceo. i shared some of the details across the european auto manufacturing sector. you are familiar with them. nearly one third the major car plants from the big five are producing half the vehicles they have the capacity to make. i'm sitting here wondering when will we make the decision to make the corrective decisions that seemingly need to take

place. either you cut capacity or european politicians, governments will come out with the right kind of demand-side incentives to buy the vehicles because that's not there right now. when do we face the reality check. is it year, next year. how much longer can we hold on with excess capacity. >> your comment is very valid. it is quite clear that right now we only ask two things to the governments. we ask stability of the rules, we do not ask for any kind of postponement because we are ethically committed to contribute to fixed income -- to fix global warming. we don't ask for any postponement we ask for stability from one side and from the other side we ask the governments to stimulate the demand which is not to helps to lantus but to help the consumer so that the consumer can buy ev's at an affordable price i.e. at the same price. so that's what we are telling them.

we will see if they have the capability to do so and if not we will have to take decisions as you say. i assume those decisions will be made in the next few months. i think before the end of the year if nothing happens we will make those decisions. that's absolutely clear. >> your message to the european government and national governments across the continent pray they have two months together but otherwise enough to close plants. >> we had a very good concrete example that you reported in the media about our dialogue about the mandate. the mandate in the u.k. had a threshold that was double of the natural market demand. so if you need to put in the market the market demand in terms of zero emission vehicles it has a cost. it has a cost and if there is a cost and we need to compensate for the cost with additional

decisions that will compensate for the cost. that dialogue has been ongoing for several months. we are now reaching a point where we have to make a decision and again that will happen in the next few weeks. if the governments want us to sell a mix of bets that's above the natural demand of the market. they need to help to stimulate the demand so that we can reach that level of mandate without destroying the profitability of the companies. if that is the case then we need to restore the profitability to ensure the sustainability of the company because we are trying to have a mandate that's not the natural market demand is. that's the situation. it's a big opportunity for us to lantus. stellantis is among the companies with the highest on sale. by the end of this year we will have 40 models on sale on this segment only. hatchback and suv we have 16

models on this most important segment in european markets. so we have the offering we have the technology. we have the design. and we have everything we just need to stimulate the demand and help the middle class consumer to fix the affordability problem we still have in our hands. jonathan: i've got to squeeze one actor question in. our european auto manufacturers investable. the stock is down, what do you tell investors. as we are in between this horrible window where either your good have to do one thing or the government will have to do something else but in between it so difficult for investors to make a decision. what's the message you give investors right now. >> i perfectly understand why they are puzzled and i under -- and sorry for that. it's quite clear we are going to go back to them very soon to tell them we are fixing the u.s. inventor issue. number one thing we need to fix.

it's very operational. it is not rocket science. this is the number one priority. i think we are on the right trend as we reduce inventory by 52,000 vehicles in the last three months. we expect a level which is below the ceiling of 330,000 by the end of this year. as soon this landing is in my hands which i think it will very soon i will go back to them to explain that. then i will leverage all the competitive edges that are very big in terms of technology in terms of bringing the right ev's in terms of strategic partnerships like the one we have. we'll see me back very soon. first i need to take care because that's my responsibility. and i am excited about fixing those issues. jonathan: once again you've been very generous with your time and we appreciate it. this to lantus ceo on the

difficulties for the auto manufacturing sector. across europe and arguably worldwide. lisa: repeating what we heard, the idea of a way to incentivize consumers to buy electric vehicles in europe so they can do so at an affordable cry price. that being a benchmark idea people are looking for. >> crag your thoughts on that beginning to crunch time right here. a few months european companies get their act together or we see some serious cuts. >> i think your last question was the right one which is how is a stock like stellantis possibly investable in this sort of paradigm. with all due respect to mr. tavarez, i think the answer there was less than satisfactory. essentially you will have to wait for me to do my homework and come back to you with more. i think it is the case this is a

company that is very much caught in a paradigm of challenges with the state of the industry here and they are far from alone. for him to sort of downplay the extent of the issues they've had is simply a matter of a second-quarter marketing plan that was too ambitious that they did not pull off. i think it understates the issues that stellantis has been having. but go back far more than just the second quarter of this year where they've been making too many cars, making toomey higher spec cars. and starting to prolong this period of good times for the industry. longer than it was clear the market had tolerance for or appetite for. >> how much of the purchase incentives that seem to be a theme this morning. something policymakers in europe are prepared to do. >> i think we are hearing even

just in germany in the last couple of days and interest in taking another look at the subsidies that were taken off the table about a year ago and our realization that that was a great mistake. i think you need to look no further than the way the german market has played out since that decision was made. and it's a very clear conclusion you have to draw that ev's were just not ready to stand on their own two feet yet. when you pull those subsidies out of the market we saw a huge pullback in demand and it's clear the ev industry needs subsidies in order to sustain the momentum that we've seen the last few years. and we are not ready for the consumer to purchase those cars without some help. >> jobs are get a lost it's that simple. craig trudell of bloomberg we talk a lot about germany and vw. just to share some numbers the

fear of 500 -- the fiat 500 was the jewel in the crown. they've had to suspend production. that was the news over the last few months. manufacturing of fiat and maserati for the first months of the year down 41%. taking on the depths of 2020, the pandemic. >> there's a real structural problem for the time is running out. that's a policymakers being asked to address. a very difficult to invest in some of these manufacturers. until we get real visibility on the future. we are looking ahead to u.s. retail sales and another read on the american economy. ♪ is it me... or is work not working? at least, not the way it could work.

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jonathan: programming note, in 60 minutes time don't miss this one, keir starmer, the prime minister. 9:30 eastern time. that's on bloomberg tv and on bloomberg radio. it's been a difficult first 100 days for this leader. he is getting together business leaders from all around the world this morning and trying to convince them that the focus is on growth. there is a big budget coming up later this month. we are looking for some clues a little bit later. one hour away also from the opening bell, equity futures and the s&p firmer by .2%. the nasdaq a little underperformance on the small caps.

let's cross over to dani burger. dani: good morning. over the weekend, we learned they were going to cut 10% of their staff, 17,000 employees. premarket shares down 2%. nick cunningham, an amist there, saying this is not a coherent plan and it is all very hand to mouth. the c.e.o. saying that they could take more dramatic action if things don't improve. they're heading into month two of their strike. the buy now, pay later company higher up 2%, an upgrade from web bush. a lot of people are using buy now, pay later. the environment is getting about ther, lower rates are helping. all expectations of a soft landing. rounding things out with sears sears, radio satellite provider, up 3.5%, this all thanks to warren buffett, filing late on friday they've been buying up the stock for the good half of last week. they spent 3.6 million shares.

they now earn 32% of the company. easily a majority for that company. though these shares have been down some 50% year to date even with that buying. jonathan: thank you. appreciate the update. we are dropping bank of america. buyers sirius. dani: it's a different size and scope. it does fly in the face of this idea that berkshire hathaway is hoarding cash rather than investing in companies. jonathan: the next 48 hours for earnings on wall street. markets also looking ahead to thursday's data points including retail sales, another round of jobless claims. sonia meskini writing the next market will come with retail sales. it follows up a street of robust september data. we continue to see upside risk to initial claims from storm strikes and seasonality. sonia joins us for more.

storm strikes and seasonality. general cyclical weakness in the economy. is that fair? sonia: yes, it's fair. it would be difficult to disentangle the temporary factors from the underlying trajectory of both the consumer and of course the labor market. so we would expect the initial claims to begin to rise simply because of those factors that you have cited. but of course we believe the market will be focused on the underlying trend as well. jonathan: you have to come up with a jobs number for the month of october. i feel your pain. how are you going to do that? sonia: it will be hard. we working through it right now. of course, the stories are evolving as we work on it. but it could very well be that the september numbers were the cleanest that we might get this year. lisa: sonia, retail sales might

be more instructive than the payrolls report that we get next month because of how messy it is. do you agree with that? sonia: well, retail sales could be volatile, and the jobs numbers of course in focus because it's part of the mandate. but the consumers really key leverage here, as long as the consumer is strong and spending, we will continue having a strong economy and that would fuel growth and jobs. lisa: given that, do you think this is realistic that bostic could be the frontrunner, that a pause next month in terms of rate cuts might be warranted as they assess just how much weakness or not is in the economy? sonia: it's interesting, the minutes came out last week. our inteption of the minutes was bsh interpretation of the minutes was the cash up to what they perceived to have spattereg cut in july but given the

noisiness of the data given that the seasonality factors are changing, it's hard to cut through that to the underlying trend. we think the most likely path is for them to stick to 25 basis points in each of the next subsequent meetings. jonathan: my takeaway from the minutes was chairman powell bulleted them to going 50. isn't that what it sounded like? sonia: well, it sounded like there may have been more disagreement. in fact around the 50 basis point cut than perhaps chair powell expressed in the press conference right after the meeting. we saw that in the s.e.p. and heard it from the fed speakers including last week. jonathan: you said something interesting about a month of september. you said it might be the cleanest read of the economy this year. are you saying that october, november, december data might be distorted through to year end? sonia: i think the n.f.p. may be distorted especially for the

next number. that's going to come out in november. it will be difficult to disentangle some of the effects from the weather and the strikes to the actual trend. of course, we see that come through in set -- september. lisa: how much will earnings be the number one indicator that people will look to given the fact that we are starting earnings season and that so far it seems like everyone is looking for that weakness and not finding it? sonia: earnings are very important. they're important in the sense that they also gauge a, the consumer, but b, the health of the corporate sect your as well. we do believe that fundamentally because the data is on the economic side is noisy, earnings are as you say important as the secondary factor even for economists to look at. lisa: i know that the bond markets are closed. stock market is open. i am wondering though about your interpretation of the massive sell-off that we have seen in bond yields over the past month.

the fact we have seen a 41% retracement in the rally, an increase in terms of tenure yields going back since september 16, do you think this is the market getting it right? that essentially the fed can cut rates a few more times but really can't cut that significantly because of the ultimate underlying strength despite how high relative rates are? sonia: well, the question around the financial conditions is a very good question because in essence if the fed is easing financial conditions should ease too. easing but rates are going up, may not necessarily be happening. and we believe the market is effectively like the fed watching every data point and trying to gauge in real time what the fed is going to do in the next few months. that's difficult to do. one of our scenarios, not our central scenario, but one of our scenarios is a reak sell railings in the -- reacceleration in the economy. the fed will have to, after

cutting and pausing, have to start raising rates again because it would turn out that the consumer is stronger than originally expected. the wealth effect is still there and that would put upward pressure on inflation. not our base case. our base case is actually slowing trend and stabilizing the policy rate at 2 3/4. one of our risk scenarios is reacceleration. jonathan: how dependent is that the outcome of the election? sonia: interestingly we have done some research and it seems like from the proposals we have seen, the blue sweep versus ready sweep, the effect is not as strong as i think some in the media would lead us to believe. the biggest impact would be from all out tariffs. jonathan: sonia, appreciate it as always. annmarie will be back tomorrow

to break down the scenarios. does think it's lex dependent. lisa: that inflation goes up if trump is elected. we start to see the fed being forced to raise rates next year. it's hard to get your mind around what scenarios to actually put into place. my big question mark, what are the checks on either candidate to know whether their policies are going over well? there is an assumption in business circles that donald trump uses the stock market as a check on his policies and that the stock market sells off, he will adjust course. will that be the case? unclear. what is kamala harris' check? is there going to be something in that place as well? jonathan: victoria fernandez joins us from crossmark global investments. welcome to the program. i was going through your notes. labor differential, plentiful versus hard to get. jobs and consumer confidence not great. cyclical employment, not seeing big gains there either. even if we park jobless claims

and that's just the hurricane effect, are you saying the cracks in the labor market are bigger than some suggest they are? victoria: i think they are. those elements you are talking about are perfect examples of that underlying effect that people maybe aren't looking at as much as just that headline number. yes, there are seasonal effects that go on, but look at the components. cyclical employment is a key element and we have talked about it before as something to really watch and give you an insight into how the economy is growing. when you have non-cyclical employment that is leading, when you have those jobs like health care, education, government jobs, those are those noncyclical components, that's not giving you the strength in the market that you really want to have this sustainable move forward. that's exactly what we are seeing. cyclical components down, non-cyclical up. temporary hiring is another one that's seen as a leading indicator in the labor market. that's continuing to come down. even the small business report

that came out last week, they're telling you the same things. we are stabilizing hiring. we are not going do much there. revenue looks like it's going to be difficult to maintain. those elements, in our opinion, that say the labor market probably does have wider cracks, which is why we continue to be a little bit guarded about this market because we know that that can lead to more layoffs. jonathan: that view versus the price of the story. equities, all-time highs. credit spreads incredibly tight. is that a source of comfort or a source of anxiety? victoria: i guess if i am anxious about the labor market, that does give me a little comfort to say, well, people are looking at these elements and saying we see this but it's the credit market that i think a lot of people are saying look, they're not seeing any worries there. look at the gap that we see right now between the vices and credit spread. it's a really large gap. you usually don't see that.

in our opinion, credit spreads typically tend to be more correct on that. i think that's what the market is saying. the vicks will come down. the market continues to have this momentum, but you look a little under the hood and we sef stocks that are trading at 20-day highs. it's really low. it's like at 16% so again is this sustainable or is the market just getting a lit bit ahead of itself like it has multiple times over the last couple of years? we are not saying don't be in the market. you can't stand in the way of the momentum theys there, but -- that's there, but i think you need to be guarded. lisa: what does that mean, victoria? how do you remain guarded as you see cracks in a labor market that aren't being discussed at least in earnings we have seen so far? victoria: if you are going to be invested in the market and you are going to be in equities, we want to look at some of those areas that maybe you are seeing

some leadership changes and we have seen that a lot in industrials, which typically do well when the economy is doing better, but again find some industrials that have the strong balance sheets, good cash flows. we like financials. jonathan, you always ask me why financials? we see the markets tending to look through some of the not as impressive components of the earnings that we saw from j.p. morgan and wells fargo last week and those balance sheets are strong and continue to do well in a steepening yield curve. so financials look well, but look alt some -- at some of the places like staple, health care. those sectors have come down. we think there are opportunities there that you can add to have upside and lease a, it wouldn't be an interview with you and i both sitting here together if we didn't talk about adding fixed income to your portfolio. i know spreads are tight, but what we are seeing is they continue to hold these tight levels. i think you can add some fixed

income and get cash flow in your portfolio. lisa: fixed income on the credit side or the rate side given the fact you have seen a backup on the longer end, on the 10 year yield? or do you go into credit because you are getting an extra spread with companies that have pretty good balance sheets albeit very narrow relative to recent history. victoria: i think you can do a little bit of both. we are adding high quality, investment grade, names that we like where we are not concerned about cash flows for those companies. we know they can meet those income components. we are not dipping our toe into high yield like we are not going too much into small caps on the equity side. we are trying to livment limit -- limit the credit risk we have there but take advantage of the steepening yield curve, go out further in your duration and lock that in. the 10-year yield seems to be overbought right now. we knew we would have a change as the market repriced rate cut expectations.

so lock in a little bit that yield on the longer end. jonathan: you mentioned financials. tomorrow we will hear from bank of america, morgan stanley the day after. victoria, what weren't you convinced by on friday? what wassen unconvincing to you? victoria: i think there are elements in there, obviously your net interest margins, net interest income. people are focused on those numbers. some of those did not impress to the same level that many people were expecting, especially on the wells fargo side. but you are still seeing credit card elements that are doing well. you are seeing deposits in credit growth that is hanging in there. when you look at the market elements within the financials, that area is doing well and generating growth. so i think there is positives there. we like these names we are invested. i do think there were some elements people said you know what this might be a little choppy over the next 18 months, but these banks will be fine.

that's why i think you can hop in there. we always have to watch credit cards especially when you are looking at bank of america, that's consumer focused. delinquency is moving up a little bit there. but still seem to be doing pretty well. we will see how those numbers turn out. jonathan: you are not spooked by the comments from allied financial a few weeks back? victoria: allied financial is a little different. we don't have exposure to allied financial in our separately managed accounts. we like those larger banks, again going back to our focus on balance sheets. those are the areas we want to focus, j.p. morgan, bank of america, those being our largest holdings within that sector. so we would stay away from more of what we call the regional banks or some of the smaller banks and focus on those that have that strong cash position. lisa: victoria, you didn't mention energy in there. have we gone past that time where energy companies were leveraged in some way to the global cycle and now move basically to a tune of their

own? victoria: it's interesting. a lot of it depends on what's coming out of opec headlines. look, we have these geopolitical events. maybe you get a day or two of some volatility around energy names, but then it seems to flatten out again. you are right, there seems to be this disconnect that is coming. but if we want to look at companies and focus on balance sheets, energy companies are doing well in that sense. they have that strong cash flow, those balance sheets and cash ratios look good there. so i think you can have some exposure. i am sitting here in houston, i don't want to say ignore the energy companies. put some exposure there, but there is quite a bit of volatility. we don't know what is going to happen on the geopolitical front. that could give more volatility than what we have seen as of late. so maybe be a little cautious there. i think over the long term these are names you want to have why your -- in your portfolio. jonathan: they won't let you outside. good to see you, victoria.

the banks on the s&p 500 on the week last week up by almost 5%. the best week of the year. biggest weekly gain for the banks last week. lisa: they beat across the board, a couple of wobbles here and there. j.p. morgan, very much excess versus what people had expected. there is a prospect that it could continue. there aren't that many negative clouds. the fact that wells fargo looked for consumers to show weakness and couldn't find it tells you a lot. jonathan: you'll hear from siti, morgan stanley. here is dani burger. dani: opec has cut its forecast for oil demand growth for a third consecutive month. the organization predicts that global oil consumption will increase by 1.9 million barrels a day, down 2%. opec's effort to shore up falling oil prices have been undermined by countries that have failed to deliver their cut backs like iraq, kazakhstan and russia.

other head winds including slowing growth in china and slowing supplies from the americas. an e.v. under 30,000 euros, meant to help the automaker better compete with budget offerings from chinese manufacturers. they'll have a range of 250 mielts -- miles on a single charge. they're introducing a range of affordable e.v.'s to combat a slowdown in demand. spacex pulled off an incredible feat on sunday after launching its starship into orbit . out of the air with giant mechanical arms at the launch site. the recovery marked a milestone for space flight. seen as a critical step towards developing more advanced space travel. that's your brief. jonathan: thanks for that. i could watch that on repeat again and again. absolutely phenomenal. up next on this program, setting

up for the day ahead, big bank earnings reporting and one big central bank decision. that's up next. this is bloomberg. ♪

jonathan: 37 minutes away from the opening bell. equity futures just about firmer by .2%. the nasdaq up by .4%. earnings season picking up through the week. five weeks of gains on the s&p 500, looking to add some weight this morning. let's get to the calendar. the week ahead looks like this. today we will get fed speak.

on tuesday the san francisco fed president. look out for that. that's must watch. earnings from bank of america and united airlines. wednesday, we will hear from morgan stanley of the on to thursday, an e.c.b. rate decision. will they cut interest rates? why wouldn't they cut interest rates on thursday? big debate on thursday. plus retail sales and another round of jobless claims after they spiked higher last week. we will see if we get a repeat this week with another hurricane disruption potentially in the cards. we will get results from netflix before friday. housing starts and building permits. a stacked week. lisa: it has three prongs to it. it has the policy aspect of it. e.c.b., how much will they signal they will continue to cut rates going forward? the economic data, retail sales that richardson was saying is more important than the next payrolls report. we cannot overemphasize the earnings this season given how high expectations are. some people argue they're not

that high and how strong they've been so far. we have have not seen the consumer weakness. you double barrel this idea of not only the banks but tsmc, a forward look to some tech names and you start to get aer -- a more fuller picture of what it looks like on the ground. jonathan: let's sit on the data. it's interesting how economists on wall street are preparing their clients for an october payroll report in early november that will offer no clean read through into the u.s. economy. why aren't fed officials out there saying the same thing? that the last clean data rate they got on the jobs market was the last one before going into november 7? shouldn't they be doing the same thing? lisa: should they have a more -- cohesive message? maybe. it's unclear how much as you pointed out fed chair powell was the one driving the ship and everybody else got in line.

unclear exactly what the compass is, in a data dependent federal reserve, what is the data that will shift the needle? i do think the earnings might take on greater importance as well as the anecdotal evidence, the bake book, as people start to understand as a time people don't have visibility. jonathan: you get tons of economic data, lots of earnings between now and the start of november. november 1, jobs report, could be a total mess. november 5, election. may or may not get a result the morning after. november 7, the federal reserve will sit down as a committee on a thursday this time and try and make the right kind of policy decision with everything in mind. that will be a difficult week. lisa: or do we have a pause like rafael said at a time of great uncertainty? jonathan: a lot to work through this week. tomorrow ken leon, sarah han. from new york, this is

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>> happy monday. we have futures hovering around record lels. 30 minutes until the start of training. i am matt miller. katie: i am katie greifeld. bloomberg open interest starts right now. coming up the bull rally faces an earnings test, netflix provides fresh clues. matt: no respit for boeing. steep charges as it lurches from one crisis to the next. >> plus an exclusive interview with keir starm he, the prime minister speaks to bloomberg about his