>> there is a sense the markets are increasingly worried about what -- some kind of fiscal risk. >> company's are a little less optimistic. >> the issue has been whether we would broaden out. i would say that is happening. >> when you look at equities, we will get growth. >> corporate america is saying i am in a pretty good decision, the economy is doing well. >> this is "bloomberg surveillance" with jonathan ferro, lisa abramowicz, and annmarie hordern. jonathan: live from new york city, let's get you to the weekend.

from new york, good morning. for our audience worldwide, "bloomberg surveillance" starts right now. equity futures positive 0.2%. coming into friday, poised to snap a six week winning streak. the nasdaq up by a quarter of 1%. thank you to tesla for yesterday's rally. this move unbelievable. a $154 billion market cap move in a single session. as all the crook -- as ollie crook said, the combined market cap of mw, stellantis. annmarie: all roads lead to china, whether or not it is industry growth, as you see in tesla, which had a blowout quarter when it comes to china, dan ives talking that will be the blowout for this company. for everyone else, it is the turn down. mercedes falling off a cliff in

terms of things like deliveries of the s class, the maibach, things that used to be insatiable for the chinese luxury market. they are going to ev's. if you are buying ev's in china, it's tesla or -- jonathan: next, it is apple. i wonder if they can book returned. annmarie: there is reporting apple has been able to get these deliveries rather have been deliveries of the new iphone. also, tim cook is he doing? he is going out with local social media celebrities, going out into cities, taking selfie videos, talking about the fact he wants to maintain this presence and he wants chinese consumers to buy iphones. jonathan: big week for tech earnings this week. the single name we have to talk about right now, capri. this stop getting cut in half. down 47% in the premarket.

the regulator wins, a federal judge blocking tapestry's $8.5 billion competition. sometimes, the jokes write themselves. annmarie: what is interesting about this is i did not realize there was this accessible luxury market. if you ever saatchi or jimmy choo, you're looking at this saying, are we really accessible luxury? a lot of people will get burned on this. it does not seem like something that is really anti-competitive, and hedge funds took more of these positions of capri, which is now in freefall. jonathan: if this can't go through, what does it mean for albertson's and kroger? we heard from brian moynihan of a bank of america saying ultimate holding positions, lack

of clarity about what it would take to actually get a deal done, what would they allow, what won't they allow? annmarie: that is a good question here also, the election. the ftc chair, her term is up. she can either get another term under kamala harris, although there is a lot of debate in the democratic camp -- some of the billionaire donor class do not want to see her at the top of the ftc. others, like alexandra cortez -- this is the one individual jd vance think is actually doing a good job in the biden administration. jonathan: let's get to the cross asset board. check out the bond market. given equities and helping hand. the 10 year, 4.1960. looking ahead to the payrolls report, sneak peek of our

survey, the estimate comes down to 120,000. that is estimate in our survey. coming up, we catch up with jim bianco as traders look ahead to the u.s. election, ed mills of raymond james, and former imf first managing director john lipsky as the imf's annual meeting wraps up. the s&p 500 heading for its first weekly drop in seven. jim bianco of beyonca research -- bianco research writing the power of the betting markets as they can reactively to new information, such as a political event and/or in october surprise. trump is trading in all markets gritty and 50% and has been in an up trend for weeks. jim joins us now for more. let's start with the betting markets. compare in contrast them with what you see in the polling data. how big is that spread? jim: not very big at all.

most of the election modelers have got trump slightly above a 50% chance of winning the election. the betting markets are supposed to take that into consideration anticipate what is coming next. as you mentioned, trump is in an uptrend and has been on an uptrend, and he is trading in the low 60's in the betting market. that seems to be appropriate to the reason i bring that up is if the markets are manipulated, you would say they are at some unexplainable level, but i do not think these markets are at an onyx winnable level. the last thing i point out is these are possibilities. probability of 60%. a lot of people have a hard time getting their head around what that means. it is less than a three point lead in a football game, a stop in a field goal by harris could win the game. it is not that hard to turn it around. annmarie: when it comes to the betting markets, we know there is one big outsized way when it

comes to this french trader. is that potentially wide we see trump moving ahead, because of these outside moves in the betting market that will not pick up in the polls? jim: not really. there are 10 betting markets. they are all kind of saying the same thing. the volume in the betting markets has doubled in the last week, it will probably double again. it always does in the final weeks before the election. it will believe be more whales coming into the market. it really looks like someone who has a lot of strong conviction and will put money on that as opposed to a manipulator. that is why i say, if you look at the polls, where should this market be trading? about where it is now. annmarie: do you think financial markets are looking more at the polls of the betting markets? jim: they both kind of look at each other. whether you talk about trump media gat or talk about bitcoin or talk about the defense stocks

versus the technology stocks, they have all got some kind of embedded election play in them, and they are all feeding off each other. the betters -- the bettors are looking at those markets, the markets are looking at the bettors. jonathan: we need to talk about how well priced the trump presidency and/or gop sweep may be. with that in mind, i've seen this from the fixed income side, asking themselves whether the risk is skewed asymmetrically to lower yields because of how well priced the trump may be. jim: i think the balance of risk will be higher. if we were to get a trump residency -- again, it is not a lock -- you'd be looking at tariffs, a form of inflation. you will look at tax cuts, a form of stimulus. you would be looking at an economy going a lot stronger. i think what the on market has been bothered by has been the fed moving 50 basis points in

september. it is not 50 that bothered them, it is the signal, as austan goolsbee said, that they have 100 basis points to go, and i think the bond market is looking at this and going if we are going to get tax cuts, we will get potentially more inflation through tariffs, we do not need hundreds of basis points of rate cuts. that will just be piling onto potentially create more of a stagflationary type of environment that is why you see the 10 year yield move up 60 basis points since the day the fed cut rates september 18. it has not bothered the stock market yet, but anything above that is where the stock market really starts to run into problems with the rising rates. jonathan: 460 that morning, as you suggest, 60 basis points move. if you believe the path of least resistance is high-yield from here, what kind of numbers are you thinking about? jim: let's look at their numbers

from the past. in april, we hit 475. october of last year was the high since the pandemic, when we hit 5%. we could probably go back and revisit some of those numbers, probably in the first quarter, if we do see this burst of activity come through tariffs, through a stronger economy. and whoever wins the election, if the economy has been picking up steam in the last few months, and now the hurricanes and the strike -- i heard you mention the payroll report -- all that will get muddied the next few months as we try to figure out what the path of the economy will be. it was picking up before that. all that does auger higher yields. we at least go back to the april highs for the first quarter. jonathan: let's get to the job numbers next week. nfb about one week away. 120,000 is the median estimate in our survey. what is curious is jobless claims came out yesterday, back to pre-hurricane levels.

i am trying to work out if the risk for next week as a stronger than some pump -- some people are expecting. what are you looking for? jim: exactly that. i was surprised by the claims number. if you look at hurricane katrina or hurricane harvey in 2017, which came ashore in houston, the claims numbers jumped 50,000, 75,000, and give you a clue you were going to see a very depressed payroll report. in both those instances, the payroll report was negative that month on the first release. but the claims numbers have actually returned to where they were prehurricane, return pretty boeing -- returned pre-boeing s trike, pre-stallan -- pre-stellantis layoffs. that does open the possibility we do not see any weather impact in these numbers and maybe a bigger number that may be true

effective of what the economy is saying. annmarie: is there a number in mind you have that would put the fed on pause? jim: on pause for november 7? probably not. the market's price 90% chance the fed will move, and they have one week before they go into their quiet period. even a strong number, if it is another 250,000, i do not know if that would be enough to get the fed pausing november seventh. december would be open for a pause, even if they were to move in the next two weeks. jonathan: i thing that is the question, what would it take to get wikileaks to write an article that maybe this is not going to happen. jim bianco of bianco research. i mentioned the 120,000 fear that is the median estimate in our survey. let me give you the low. the low is 70,000. let's get you an update on stories elsewhere with your bloomberg brief. let's cross over to dani burger. dani: as you were discussing,

shares of cap the holdings are plunging 46% premarket. a federal judge blocked the company's planned a $.5 billion takeover of tapestry. the judge said it would harm competition, creating a come but he with 59% share of the accessible luxury handbag market. the ruling is a major victory for fdc leader lina khan, who are strike to sink takeovers deemed anti-competitive in sectors from tech groceries. elon musk donated over 130 million dollars to support donald trump and other republicans. musk, who had only given modest political donations until this cycle, funneled $44 million to his america pac the first half of this month. he also spent millions on other gop candidates, helping him build a network of allies. fast food chains are pulling onions from menus in several locations due to the risk of e. coli.

berger king and yum! brands removed onions from some stores as a precautionary measure. an outbreak that led to thousands of illnesses and one death where linked to quarter founders from mcdonald's for mcdonald's said their supply chain is linked to the same place. jonathan: up next, heading into hostile territory. >> it's the attention war. you have to win the newsday. and doing a big rally at msg or doing a big appearance with some sort of celebrity, may become in houston is a way to do that. jonathan: we will talk about that strategy up next on the program. live from new york city this morning, good morning. ♪

think scaling your ai pilots is hard? think again. with watsonx, you can deploy ai across any environment. above the clouds and on lots of clouds. with your secured data on prem, in real time on center court and assisting bank tellers on the edge. watsonx helps you deploy ai wherever you need it. so you can take your business wherever it needs to go. ibm. let's create.

jonathan: equity futures on the s&p 500 up by one quarter of 1%, poised for a weekly loss. dow 0.9% through thursday. looking to snap a six-week winning streak, the longest really winning streak of the year so far. up one quarter of 1% on the s&p. under surveillance this morning, heading into hostile territory. >> it is the attention war. you can go to wisconsin 20 million times, you can go to north carolina 20 million times. but these closing weeks in the election, you have to get into people's living rooms. you have to win the news day, and doing a big rally at msg or doing a big appearance, potentially was some sort of celebrity, maybe, in houston is a way to do that. jonathan: kamala harris and donald trump heading deeper into their opposition's backyard. trump gearing up for a rally at madison square garden, with harris heading to houston, texas as both candidates look to grab

attention in the last few days of the campaign. ed mills of raymond james writing the recent shift in sentiment and pulling appears to favor former president trump, but given the surprise result of recent elections, we continue to view the presidential election as a tossup. ed, welcome back to the program. let's talk about this trend of going to your opposition's backyard. how powerful do you think the effort is? ed: i think it is an important way of trying to nationalize the race in the final days. going to texas gives an opportunity to give the senate candidate is challenging ted cruz, allred, a boost of support, but also gives an opportunity for kamala harris to talk about abortion. we will see her next week at the national mall. she is in the early stage of making that closing argument. for former president donald trump, we see the stadium tour, trying to show his movement is truly national. we have had a huge focus on the swing states, but in the closing

days, i think you try to nationalize the race, make that posing arguments, try to have that attention in all states, and try to see if you can go on the offensive. see if there are some say that does not seem to be on anyone's map right now that could flip. we saw that in 2016, 2020. we see that in 2024. annmarie: for kamala harris, it makes sense, she will appear with beyoncé. she will talk about reproductive rights, one of the states with the most stringent rules in the country. but why is trump in new york? he was just there. why the garden? ed: there are a number of things up at the trump campaign i would not always say this is a traditional campaign. i do think he does want to have this rally at some of these major venues, showing there is enthusiasm. i think part of what they try to

have from the trump campaign is saying this is a movement that is national, and even though there are some states they are exceptionally unlikely to win, there is a strong base of support. new york is also prickle for the race of the house of representatives. we look at new york, we look at california. there are eight republicans in tossup districts. if harris is able to mobilize her base, she is probably going to see the democrats win control of the house of representatives. if donald trump is able to stabilize and get his base out on long island and some of the closed and suburbs in the district of new york, maybe a couple of republicans hang on, maybe for the house majority. annmarie: you mentioned that texas senate race. this is ted cruz's seat that he is defending. i was looking at polling -- it is republican backed, but they do good polling, the senate opportunity fund. they now have nevada, rosen and

brown, tied. what are you seeing in some of the down ballot ticket races? ed: they are really, really what we have seen is a consistently for senator rosen throughout this cycle, but with early voting coming in nevada, there has been a tilt to republicans. at least that is what the nonpartisan prognosticators out there and some of the press that do a great job in nevada following that. they are seeing a tight, may be slight lead, for donald trump in nevada. investing a little more, seeing of sam brown, the republican contender, can catch that seat, even though he has been down the whole cycle at this part of the game has also been a chess match between these campaign committees. making a couple million dollar investment in one seat is trying to get that last push from donors to say we are on the offensive. people like to be with the

winning team, so the more you are on the offensive going into the final stretch, the more you can get your donors to pony up. donors do not like to give money if they think the campaign is losing. again, it is probably part of a national strategy by both the senatorial campaign arms, republicans and democrats, to say there is an offense of opportunity. is it for texas for democrats, nevada for republicans? some of this is a little bit of bluffing at this point. we have to wait until election day to see who is -- who's bet is that correct bet. jonathan: one thing we know is it will take a long time to count some of these votes. what are you expect to actually see a result of this election? ed: my hope for this election, my hope for the markets, is we have gone back and look at many past elections, and while we are at 50-50 in the presidential

race and we look at a number of these cases in the senate, where those are tossup, which implies 50-50, they tend to all break in one direction. if we do have seven swing states, we could see it break 5 to 6-1, you could see that wednesday morning after the election. if it comes down to one state, that could be a week, that could be a couple month or more before we know who that is. i do not want to have that happen. pennsylvania was called saturday after the election. nevada was called saturday after the election. it was 16 days before north carolina was called in the 2020 election. i don't want to be waiting 16 days. my hope is we have a decisive break on election day and it will be pretty clear election night, if not wednesday. annmarie: the most important

county in arizona, maricopa county, there officials say it could take 10 to 15 days paid with it -- in light it could take 10 to 15 -- it could take 10 to 15 days. what if it comes down to arizona? ed: we get a charge of every single state we got the calls, and it was interesting that most of the swing states that are being discussed were called saturday or after the election. my gut tells me we probably have a clear direction on election night, if not early wednesday. it probably will take until a week or more for the final certification of these results. we just do not want to be back in the 2000 land, where it gets litigation, or we get election denial 2.0 because we have different vote counting methods, which will favor one candidate early versus the other. there are bloomberg arch states,

there are red maras states. annmarie: is there concern it could take time for the down ballot seats? ed: we could be in a scenario, if it is a very close house of representatives race, new york and california are two states that could determine the outcome of this majority of the house of representatives. new york and california are really slow to count votes, especially on absentee ballots. they are not normally swing states. they are not going to be swing states at the presidential level, so they do not get the attention. but on some primaries, where they have gone into a very close final count, it has been weeks, at times, before we know the final result of some of those house races. it is arguably unacceptable, but that is the reality of the way their systems are set up. we probably know the results of the presidential election before we know the results of the final house and senate races for 2024

here. jonathan: we all agree with you, the fact this has been such an issue for such a long time and still has not been addressed is on except of. ed mills of raymond james there. the number one issue obviously the result. the number two issue, the delay. if we get a delay, that is a big focus for a lot of people. annmarie: maricopa county is one of those issues. this is a county that has millions of people, in terms of population. 10 to 13 days. what if it comes down to that? we will be here for a while. jonathan: let's get you an update on what is coming -- happening in d.c. up next, lisa joins us alongside former imf first to be managing director, john lipsky. this is bloomberg. ♪ old school hard work meets bold new thinking. to help you see untapped possibilities and relentlessly work with you to make them real.

it's our son, he is always up in our business. it's the verizon 5g home internet i got us. oh... he used to be a competitive gamer but with the higher lag, he can't keep up with his squad. so now we're his “squad”. what are kevin's plans for the fall? he's going to college. out of state, yeah. -yeah in the fall. change of plans, i've decided to stay local. oh excellent! oh that's great! why would i ever leave this? -aw! we will do anything to get him gaming again. you and kevin need to fix this internet situation. heard my name! i swear to god, kevin! -we told you to wait in the car. everyone in my old squad has xfinity. less lag, better gaming! i'm gonna need to charge you for three people.

jonathan: coming into friday poised to snap a six day winning streak. features positive by about a quarter of 1%. down on the week through thursday by .9% on the s&p. nasdaq up by .3 this morning. the russell of 5.5. -- up by .5%. double-digit basis points for the week so far. 10-year, 419.80. the next stop is a week away, the payrolls report.

our survey is 120. jobless claims really screw some of the thinking up. jobless claims dropping back to pre-hurricane levels. the impact of hurricane helene seems to be dissipating more rapidly than feared, which is a positive sign the economic impact of the hurricane is not mushrooming through the region. let's get to foreign-exchange. we will dig deeper on dollar-young. euro-dollar, 108.26 . dollar-yen, the longest streak going back to april. 153 a little earlier this week. the bank of japan governor signaling the central bank won't hike interest rates, saying the boj has time to consider its next policy steps after the yen fell to an almost three-month low. annmarie: that's coming between

two elections, one in japan and the u.s. presidential election. "we need to look at the whole picture, diligently examine japan's inflation from a view on the u.s. economy behind it, which may be related to the u.s. presidential election." they don't to touch this until have the outcome about the u.s. and japan. jonathan: september 18 turned out to be a pivotal week for the market. they reduced interest rates by 50 basis points. the consensus on the street was we had seen peak yield, peak dollar. yields would roll over in the dollar would weaken and the string could continue. dollar-yen bottomed out at 140. it is back to 152. these are big news. annmarie: the problem is it is not just the economics people are starting to price in. people are pricing in the outcome of the presidential election. the polling is on a knife's edge. you look at the betting odds, they are looking at not just a

trump win but it potential red sweep and that's trickling down the financial markets. jonathan: annmarie, we want your thoughts on the story. wall street journal reporting elon musk has been in contact with russian vladimir putin since 2022. putin asking him to avoid using his starlink satellite service over taiwan. annmarie: we know elon musk has been in contact with prudent. -- putin. the factors may be more conversations, that's going to get the backs of a lot of individuals in the national security space. they tentatively understand mosque has this -- musk has this outsized place in u.s. society because of contracts with the pentagon and spacex. the fact that putin asked him not to activate over taiwan as a favor to xi jinping, that means musk is not helping or

contacting u.s. adversary but a second potentially, xi jinping. that is going to be a cause for concern. jonathan: interesting timing a week before the u.s. election when elon musk has been campaigning closely with the former president. annmarie: very closely and on the morning when yesterday we got fresh data on how much money he's throwing his support behind the former president. it is something like $150 million and down ballot republican races. not only that, he's not just the support around individuals that want to seek higher office, he's talking about $1 million apiece are registered voters, which apparently those checks have gone out even though the doj has a warning saying this might be illegal. stop doing it. jonathan: let's get to the latest in the equity market. stocks to watch. a federal judge locking taper street's acquisition of capri, saying that he would harm

competition in the market for accessible luxury handbags. capri is down by 47% in the premarket. annmarie: we need to understand what accessible luxury is. i think donatella versace would disagree with the ftc. i want to bring you this quote from the individual at the ftc. "these bags are product which millions of people rely on throughout their daily lives. the decision will ensure tapestry and capri continue to engage in head-to-head competition to the benefit of the wreck in public." millions of people rely on them throughout their daily lives. do millions of people actually rely on a michael kors and back, a coach and back? are these -- handbag? are they serious? jonathan: kroger is looking to make a deal. how will that close of this can get done? annmarie: don't even try until left of the election would be my advice. jonathan: unless we get a change after the election. that's another debate altogether. the annual imf meeting is wrapping up in washington with the impact of the u.s. election

one of the key topics among world leaders. >> what happens in the u.s. matters for the u.s. and matters for the whole world. >> the u.s. economy is very strong right now. we are seeing inflation coming down and our expectation is that it will continue to do so in the federal debt rates. -- fed will cut rates. we could move the argument in a different direction. jonathan: joining us now is lisa. lisa: how was i going? i'm here with the person who was in the role that gita was in, john lipsky, distinguished scholar at johns hopkins and was at the imf from 2006 to 2011 as the first deputy managing director. i'm curious relative to what she was saying, gita, how much is the election hanging over these meetings with people not understanding what to even say about it? john: exactly. it is potentially an important

inflection point depending on which way u.s. policy goes in many areas. however, there is so much uncertainty about the outcomes and what a winning candidate might do that no one knows what to say. lisa: which is why people are having trouble coming up with paradigms, especially given free trade used to be one of the benchmarks to understand the pace of growth and potential of growth. as there is this increasing acceptance of protectionist policies, how much is the imf screaming into the wind to try to prescribe to these free-trade policies that nobody's listening to? john: it's a complicated issue but let's start the following night. look at what's been happening. there was an inflection point with the global financial crisis. as the formation of the group of 20, the leaders pledged no new protection measures. they have not honored that. they have increased protection. for the 60 years prior to the

crisis, trade grew faster than global gdp. trade boosted growth. since that time trade has been growing more slowly than gdp. even now with all the increased attractions -- protections, trading goods has flattened. trading services has grown in the digital services trade, its booming. it's a complex story. hence, the real issue is are they going to be serious protectionist measures put in place more generally? this would be a huge challenge to the international system. for the imf, if you look at the articles of agreement, the constitution of the fund and say what are the purposes of the fund, the top is creating a payment system that will support the growth of the global trade and enhance global growth. secondly, provide support of all kinds, including financial support to countries with payment problems to help them

avoid adopting protectionist measures. lisa: if one of the major members, namely the united states ends up putting in place a number of these protectionist policies, what is the imf's role? how does that undermine the relevant? john: the imf will have something to say about policies like that. so far, the trade is still actually growing. so far there has been more talk. there is real and legitimate concerns growing out of the pandemic in terms of resilience of supply chains. there is concern about national security, etc. those are going to have an effect. so far it is unlikely anyone is taking measures that are seriously disruptive to the system. the interconnections among our major economies are so deep and so thorough it seems very hard

to be able to disrupt them without disrupting the economy. lisa: even though we hear a lot about the separation of chinese and u.s. economies, we hear from businesses that are expanding in china. we hear about significant revenue streams taking place there. at the same time, while these imf meetings are taking place there is a meeting going on in russia where you have brazil, russia, china, vladimir putin and xi jinping and a lot of different delegates from russia and china there, not here. how significant is that? john: those are the political leaders. here in washington all the finance ministers, all the central bank governors, including of all those countries are here in washington. nobody's talking about withdrawing from these organizations. in fact, in practice they are critical. critical gathering places, critical places for discussions about important policies. certainly it is not a

coincidence the leaders of the new expanded bricks are meeting at the same time. i think they want to send a symbolic message that says we need and deserve a bigger voice in the international system. what they are not talking about is withdrawing from that system in any serious way. lisa: another issue talked about is the deficit. people are watching the u.s. deficit expand. the u.s. only benefit in terms of faster growth. is there a sense it is for now and after we get the result of the election there could be a real reckoning in a material way? john: you never know. what the imf pointed out in its fiscal monitor benchmark publication is the growth in public debt basically everywhere. we are now reaching levels with no historic precedent. as we zoom past 100% of gdp and

public debt in major countries, clearly there is a risk of fragility, of negative reaction, and certainly a rise in real interest rates could put a significant dampener on growth. we have to watch it. the problem is we have grown -- the debt has grown faster than had been anticipated and faster than past traditional lines of where trouble starts. it has not started so far but so far so good. we all know there's going to be a straw that breaks the camels back, but markets do have turning point and we have to pay attention. lisa: is it frustrating for people where you about the deficit to hear these warnings, it's unsustainable, it's different this time, and people say look at the market. it is not concerned. is that frustrating that no one

will take it seriously until the market really holds washington's feet to the fire? john: not just washington. that is one of the points of the imf's fiscal monitor. this is generalized. the pandemic, for example, was more or less unprecedented. what you had was a shutdown of the private economy. government spending was necessary to compensate. it was not standard stimulus. it was completely different. it is understandable that the growth in debt has not been as deleterious because it actually supported the economy. it would be dangerous to assume you can just keep going at a full employment economy with large fiscal deficits and assume there is never going to be a price to pay. lisa: john lipsky, wonderful to speak with you and washington, d.c. really appreciate it. john: always a pleasure. lisa: jon, back to you. jonathan: we will catch up with

you later this morning. in the next hour lisa catching up with john dugan. do not miss that conversation. with an update on stories, let's crossover to dani burger. dani: negotiators from israel and hamas will meet amid renewed efforts to end the ongoing war. speaking in qatar, antony blinken says the u.s. is exploring different options to secure the release of hostages held in gaza. israel said the chief of its mossad intelligence agency would meet with the main negotiators for the u.s. and qatar next week. fast food chains pulling onions due to the risk of e. coli. burger king and yum! brands that owns kfc, pizza hut and taco bell have removed onions from some stores as a precautionary measure. an outbreak that led to dozens of illnesses and one death were traced to onions found on quarter pounder burgers at mcdonald's. burger king says some of its onions are sourced from the same colorado facility that supplied

the affected mcdonald's restaurants. sorry, and murray. if you want to go to the world series, you better be ready to pay up. the cheapest seats at game 1 start at around $975. tickets are even more expensive in new york. demand for the bronx is 40% higher than l.a. game 3 on monday is poised to be the most expensive ticket in world series history. the average price nearing $2000. if you want to sit behind home plate or about the dugout, that's more than $20,000. that is your brief. jonathan: thank you. $20,000. i knew this would be extensive. new york has the highest concentration of any mi -- of millionaires on the planet. annmarie: it's extension -- extortion. mohamed el-erian is laughing because he knows i'm checking stubhub everyday but it's ridiculous.

jonathan: what is the lowest-priced ticket? annmarie: if you go to los angeles and watch the night. you would have to take a flight. $975. jonathan: ok. , trump 2.0 haunting global leaders. >> indiscriminate tariffs would isolate america on the world's stage. tariffs alone are not a path of prosperity. jonathan: that conversation is annexed. -- is up next. good morning. ♪ ♪

i can't believe you corporate types are still calling each other rock stars. you're a rock star. we're all rock stars. oooo look look at my data driven insights, i'm a rock star. great job putting finance and hr on one platform with workday. thank you! guys, can you keep it down. i'm working. you people are (guitar noises).

hand over the air guitar. i've got another one. jonathan: a quiet morning so far. equities a little higher. bond yields a little lower. futures up by a quarter of 1% on the s&p.

420 again. under surveillance, trump 2.0 haunting global leaders. >> across the board, indiscriminate tariffs, they are going to have four predicable consequences. global retaliation. number two, a regressive tax on the most vulnerable segments of society. number three, it compresses profit margins. number four, it would isolate america on the world stage. there is a role for target tariffs, but tariffs alone are not a path of prosperity. jonathan: the former president's potential return looming large as the world's financial leaders gather in washington. officials at the imf meeting zeroing in on one issue, is proposed tariffs on china and the rest of the world. lisa is back with us from washington. give us an idea the difference between what the leaders are saying publicly and what they are saying privately behind closed doors. lisa: i'm laughing to myself

because that's exactly what is going to start with. publicly they say we don't know what the outcome is going to be. how can we come up with parameters for what it could look like? in private they are saying inflation's going to rise dramatically. we could see suppressed growth. we will have to totally rearrange our entire financial structure. we will have to figure out who our friends are. it's a complete different type of tone that really screams of deep concern this could be a paradigm shift. potentially. annmarie: i saw your interview yesterday. she was talking about the policies coming out of the rest of the world depends on important elections. obviously, the united states. what kind of policies are these countries thinking if we get potentially trump back in the white house? lisa: there's concern about tariffs and what that does. there's concern about whether trump can pull out of the imf and some major organizations that ascribed to free trade in the traditional structures of the financial system. at the same time, it is unclear.

that is what they all say. they don't know what's going to get thrown at them. how much is this uncertainty have a drag on uncertain -- how much does this uncertain activity have a drag if donald trump is elected? i want to bring in enda curran. you have been covering the imf meetings and you've been covering the meetings. how different is the public rhetoric in the private rhetoric? enda: no one is mentioning the name of the focuses on donald trump because the spillover for the global economy is his very caucus rhetoric on trade policies. tariffs, protectionism. a lot of are worried about what it will mean for investment in the countries and supply lines around the world. how serious would mr. trump you get these reelected in terms of

what he's talking about with tariffs? how would trading partners respond? a lot of concern and worry about the prospects for a renewed round of trade tensions if mr. trump is elected. lisa: how different is the tone of the imf and the iif, the international institute of finance? a lot of global financial leaders are talking about the need for deregulation. the need for less public interference in what they do. enda: slightly different crowd, different messages. the official sector at the imf is worried about spillover for growth in trade and for the economies. the iif, what is better for americans? what is better for their business in the short term? which candidate will hurt regulations for them? everyone is being careful. it is polite society. notice endorsing any candidate. the tone of the conversations, it was worried about what. lisa: this is why bring this up. at the imf you have people worried about donald trump coming in and getting rid of

some of the old order. at the iif, a lot of are decrying overregulation that has caused a stymie in global business. i think about yesterday's deal that the judge said would be blocked, the coach and tapestry and capri, and the question about what can get done. how much was that main focus across town of washington? enda: banking regulation is a focus in this town. they want to push back at regulation at every opportunity they can. they are looking at which candidate might be better for their side of business. the bigger picture listening to people, bankers, official sector people, there's a degree of uncertainty. how will the election play out and how will congress go? that will dictate where policy goes. they have their favorites, the favorite policy picks but considerably uncertainty --

considerable uncertainty as to what will happen. lisa: you have people in washington decrying the debt load of the united states, decrying the fickle potential policies, the unknowns coming of the world's biggest economy. on the other side you ask 41 to invest? the united states. where the growth engine of the world? the united states. how conflicted are those two messages? enda: it is conflicted. there is no doubt there is focus on debt and the physical trajectory of the u.s. all the people i have spoken you say the u.s. remains wide open for business, it's attractive. it has a flexible workforce. goodwill towards the u.s. economy is a recurring theme of the meetings. it goes back to the point i'm making. there's a degree of uncertainty. no one quite knows what will happen after november 5. who's going to win and how will congress will -- lisa: that is the tension here.

the fear about the united states and the envy of the united states given its economic situation. jonathan: lisa, thank you. spot on. this is the theme we have been looking at over the last few weeks. if you export to america, you might have a big problem. if you invest in america, you might be well rewarded for that. annmarie: remind me of a christian minor said that christian minor said yesterday. it harms both sides. europe will get hit on both ends. it is the fact that if donald trump comes back, 10% around the u.s. for exports or europe will hurt. the fact that where else is china going to go if the united states put 60% up? more dumping on the european market. jonathan: your past to eat it. equity futures up on the s&p. up next, we catch up with mohamed el-erian of queens college cambridge, john dugan, neil dutta and jason thomas of carlisle. that is up next. ♪ ♪

personalized financial advice from ameriprise can do more than help you reach your goals. i can make this work. it can help you reach them with confidence. no wonder more than 9 out of 10 of our clients are likely to recommend us. ameriprise financial. advice worth talking about.

it's our son, he is always up in our business. ameriprise financial. it's the verizon 5g home internet i got us. oh... he used to be a competitive gamer but with the higher lag, he can't keep up with his squad. so now we're his “squad”. what are kevin's plans for the fall? he's going to college. out of state, yeah. -yeah in the fall. change of plans, i've decided to stay local. oh excellent! oh that's great! why would i ever leave this? -aw! we will do anything to get him gaming again. you and kevin need to fix this internet situation. heard my name! i swear to god, kevin! -we told you to wait in the car. everyone in my old squad has xfinity. less lag, better gaming! i'm gonna need to charge you for three people.

jonathan: >> on the fed turns dovish, financial conditions begin to ease, this will be a strong tailwind. >> the economy has been much more resilient. >> keep your rates high. >> we're waiting for a small number of data points associated with that. >> when folks say there are recessionary signals, their right. when they say the economy is

resilient, they are also right. >> this is "bloomberg surveillance" with jonathan ferro, lisa abramowicz and annmarie hordern. jonathan: the second hour of "bloomberg surveillance" starts right now with the market boards a little quieter. let's start with equities. that looks like this on the s&p 500. still on course for a week of losses and snapping a six-week winning streak on the s&p 500. on the nasdaq 100, up 5.2%. on the russell -- by 20%. on the -- .2%. the russell up by a third. yields a bit lower. down to basis point. 10-year, 419.60. next week the bond market focusing on the payrolls report. the median estimate in the survey is 120. the the high comes from rbc. annmarie: bloomberg is talking

about the fact that our economics team, maybe we get a negative print. -10 k jobs change. why? no one can assess what is happening right now. you have boeing strikes. that deal did not get done. 33,000 workers are still on the picket line. what is the hurricane impact? bc the numbers yesterday, the jobless claims. it feels like there wasn't hurricane impact. how do you read this jobs market? that will be a difficult one. jonathan: let's take the claims number. that is a key point. jobless claims back to prehurricane levels. blood is the risk for next week? the estimates are 120. jim beyonca said -- bianco set a stronger number. annmarie: this blowup potential higher report. what is the line in the sand for the fed to say maybe we will go on pause? plus, no decision from the

presidential election when they meet two days after. jonathan: we come back to november 1 for the payrolls report. november 5 for the election. november 7 for a federal reserve decision. we will catch up with mohamed el-erian of queens college cambridge on rising prices. lisa catches up with john dugan from citigroup. neil dutta expecting weakness going into 2025. we begin with bonds rebounding. 10-year yield inching down from three month highs. this is down slightly from all-time highs. mohamed el-erian writing the following. "what is happening to the gold price is not just unusual in terms of traditional economic and financial influences. it goes beyond strict geopolitical influence is to catch a broader phenomenon, which is building secular momentum. mohamed, welcome to the program. always look forward to rounding out the week with you. this got a lot of attention this week. take it from the top for us. what are you trying to get people to pay attention to?

not just why the move is higher but what is behind it and how long this has been building for. mohamed: things are having me. gold is up 32% year to date. that is compared to 22% for the s&p. when we try to relate the moves in gold this year to the traditional economic and financial variables, interest rates, inflation, the dollar, the relationships have broken down. it has been a very linear move up. it is something that is continuing for a while now. you ask, who is buying? you start getting the answer. what is happening to gold goes well beyond economics and finance. it goes well beyond the fluctuation of geopolitics. there is something secular going on. that has two elements. one is slow diversification away from the dollar into the reserves essential banks around the world. the other one is a slow

diversification away from the dollar payment system. the good news for the u.s. is both are slow because you cannot replace something with nothing. people are still building alternatives. the bad news is the momentum is building up. this is something people have to take seriously in the u.s. if they want to maintain the influence the u.s. has globally. jonathan: do you think this is a fairly recent trend or something building for a number of years, maybe decades? mohamed: it is multiyear but it's been accelerated recently by two events. it is multiyear because there's been some questioning about the u.s. being a good steward of the global system, the global financial crisis was a shock. the weaponization of trade and investment was the second stock. the way the was treated inflation was a third that u.s. treated inflation was a third stock. we have seen little pipes being

institutions, payment systems. there have been two more frequent more recent events that accelerated that. one is russia being able to continue to trade and grow while being kicked out of swift. that has got a lot of people paying attention. how did russia do this? the answer is they built a clunky system that involved four other countries but it works and they avoid the dollar completely. second development, what is happening in the middle east. the majority of countries around the world have viewed the u.s. as an inconsistent backer of human rights and inconsistent backer of international law. you had those two recent development that have accelerated something that's been in play for a while. annmarie: i'm glad you mentioned russia. we spoke yesterday about biden's -- what do you say to those that say sanctions don't work? they just create new markets.

his response is, what is your alternative? you have to do something. what is the alternative? mohamed: that's on good question, annmarie. there is no easy alternative. if you go back, those who imposed sanctions that wish they had gone further straightaway. that this slow augmentation of sanction is given russia enormous time to build alternative systems. if you're serious about sanctions, you should be willing to absorb the cost of sanctions to you. that is something neither europe nor the u.s. was willing to do initially. they were worried about the blowback in terms of oil prices in particular. looking back now, i suspect they wish they had gone further initially. annmarie: that is part of the problem when critics of the white house is why have a price cap? just sanction the oil and gas and cut off the funds that putin is using to continue to wage the war. putin is hosting the bric summit.

he says is a multipolar world emerging. do you agree? mohamed: the bric summit is involving more countries and more heads of state. the jump from that to say a multipolar world is way too far. it is still at a very early stage. it will be very hard to get them to unite around certain issues. we should pay attention. if you want to worry about a multi-polar world, worry about china. china is creating institutions that are growing. it is collaborating with the world bank. china is building little pipes around the system. 50 bilateral payment agreements with other countries that completely exclude the dollar. if you're looking at the alternative architecture, pay attention to china. i want to stress there is no other currency to replace the

dollar at the core the system. there's no other payment system to replace the dollar payment system. you can build pipes around it. that is what is fragmenting the system. jonathan: china has been buying a lot of gold. let's bring it home. we talked about international forces. let's talk about domestic ones. the u.s. deficit. if you look at financial indicators like the treasury market foreign-exchange, treasuries with higher yield. you're not seeing a weaker dollar. you are not think a weaker dollar and some people suggest that's on a real worry about the deficit. no real sign of strike away from dollar-denominated assets. the euro the yen, the chinese yuan stronger off the back of this. some people might push back and go back to your story and say you are saying the dollar depreciates against gold. mohamed, can you share your thoughts about whether we are seeing concerns creek and about the u.s. deficit in the financial markets? mohamed: let's talk about currencies.

currencies are relative prices. you would not pick up concern about the u.s. deficit because other countries how their own debt and deficit problems. i go back to this notion that the u.s. is the cleanest dirty shirt. you will not pick up in the currency the relative price. you have to look at it the absolute price and that is what people compare the dollar to gold. gold is not really a currency. it is a store of value. people say relative to gold the dollar is depreciating. why is it doing this? i talk a little bit about that. it is not just the impact of the debt. the impact of the debt is making people wonder about how over the long-term i want to stress the credit worthiness of the u.s.. bond yield of both are impacted by four things and you pick. no one has been able to tell what is.

when is the u.s. economic exceptionalism. look at the imf revisions. the u.s. is up in terms of growth rate. the second thing is the recalibration -- i hate that word -- the recalibration of expectations for the fed. a question mark as to 50 basis points in september and october a mistake? the third issue is the debt. the fourth issue has to do with the overall confidence. no one has been able to tell me with any degree of confidence the relative weight of all four. yes, it might be an issue but a measure how big it is. annmarie: you forgot one topic. the u.s. presidential election. is that impacting golden bond yields right now? mohamed: certain people feel it is impacting bond yields. they throw it in there. you ask how impacting bond yields exactly.

is that the tariffs, the industrial policy? what is playing out in there? i will add to the list but the coefficient on that is not as high as the coefficient on other things. particularly economic sectionalism and fed policy. jonathan: yankees or dodgers? that is all we want to know. mohamed: annmarie is sitting next to you and she has a wonderful yankees cup. i told her and an earlier thing for the first time ever i may be thinking about abandoning the national league. jonathan: mohamed el-erian with a big call there. that was the bigger call, the gold price. annmarie: i'm curious if he's paying for the tickets with jonathan: is like a shopping channel, qvc. it is perfect. stories elsewhere with your bloomberg green. deni: morgan stanley has named ted pick as its next chairman of the board. he was a specter to be named for the role after his predecessor

james gorman stepped down or announced he would step down at the end of the year. pick took over at the start of this year. shares have climbed nearly 20%. donald trump is a specter to appear on joe rogan's podcasted it. political reporting the unity will be held at rogan's posten -- austin, texas studio. trump is never appeared in the show. rogan's commentary has ranged from critical differently over the last two years -- to friendly over the last few years. the vice president will not be appearing on the rogan podcast. four astronauts returned to earth after a nearly eight months stay at the international space station. their stay was extended by boeing's capsule trouble and hurricane milton. a spacex capsule parachuted into the gulf of mexico just off the florida coast. two starliner test pilots are still stuck in space. there eight-date trip was

extended to eight months and are sent to return in february. that is your bloomberg green. jonathan: more from dani in 30 minutes. wall street facing down u.s. election risks. >> when you add regulatory potential arbitrage, that may or may not be a consequence of the election. it's another form of protectionism. you go to the debate of how to protect your financial markets. jonathan: the latest from citi up next on the program. good morning. ♪

jonathan: equity futures on the s&p 500 up by .2%. bond yields a little lower by two basis points. 419.40, even with crude higher. $70, $.75. -- $70.75.

>> you look at how capital can move across the jurisdictions in a way that can create value and help many of the topics affecting our economies and societies. then you see the cost. when you add regulatory arbitrage, that may or may not be a consequence. there's another form of action is him -- protectionism, then you go to how the protector financial markets. jonathan: bank stocks not seeing -- hitting levels not seen since 2023. some uncertainty for traders. john dugan says he didn't expect revamped capital rules to be finalized until after the inauguration of next president. lisa: it is john dugan in the flesh, the chair of citigroup.

he joined the board since 2018 and has really seen a whole host of cycles after being the occ chief during the financial crisis. thank you so much for being with us. i want to start with the idea that there are so many unknowns, whether it is regulation, trade the lessee, tariffs stop how much are people in the banking and the street paralyzed? -- how much are people in the banking industry paralyzed? john: there is uncertainty. whether it is volatility, that is good for the markets business. there are other businesses if you're an investment banker with a two weeks leading up to the election are not likely to be active in the deal space. this too shall pass and people are navigating it. lisa: one level of uncertainty is how bifurcated the scenarios depending on whether kamala harris mentor donald trump went. if you can bring us into the citigroup thinking about what the parameters are.

what is the base case in extreme case if kamala harris or donald trump? john: if harris gets into office we can expect more of a continuation of the policies we have seen under joe biden. we could be it would be a little more business friendly, because we may have a republican senate. that is the conventional wisdom now. that means nominations in order to get through the senate are going to have to be a little bit more negotiation with the republicans. that could change the makeup of the people who get through. that is a more modest change. on the other hand, if donald trump wins the election there will be very significant changes to personnel. that could change the whole nature of who are regulators are and how we operate. that is an unknown but it will be very different. it's a little difficult to plan for because we don't know exactly what that would mean. lisa: typically, less regulation

people think of as a positive for banks. that allows them to be more profitable. citi is in a unique position. you are a global bank that really does benefit from trade and from the free flow of cash between different economies. how would citigroup rearrange if free-trade is impeded and you get a real restructuring with tariffs and other protectionist measures? john: the way we look at it is, yes, it is true that globalization has benefited citi because we are in 100 countries and do business in another 50. the fact of the matter is if people change from being in a lot of countries to being somewhat fewer countries and changing and figuring out how to change the supply chains, we are in a very good position to assist people as they make those changes. we have people on the ground and the places they are going to and the places they are coming from. we see that as business opportunities. that is the kind of thing we navigate all the time.

lisa:, sisi donald trump really differing in terms of regulation when it comes to antitrust and some of the banking capital oversights? especially given some of the commentary we heard from his vice presidential running mate with respect to the current ftc leadership? i have to be honest. i was with a banker when the news dropped about capri and tapestry. he was beside himself. he could not believe this was the framework of the luxury handbags. if that is the expected norm going forward for you? john: i think there's an expectation that there will be more transactions and more deals that will get done. that is a positive thing for our deal business. we will look forward to that. if it doesn't happen that way, we will not navigate the other side. lisa: 10 days ago, citigroup came out with earnings. it showed it was seeing strength in a lot of different five business lines. it was a beat across the board.

shares popped and then jane fraser got of the phone and someone asked about potentially there could be some of the mentation. she hesitated. the shares plunged. then she clarified there is no asset cap or any plans for asset cap. the shares still fell on the day. how frustrating was that for you? john: very frustrating. she did clarify within minutes of the uncertainty around it. what she said is absolutely clear. there is no asset cap. we don't have expectations for an asset cap. our business performance was really very strong in the third quarter. it's a bit of a mystery and yes, it was frustrating. lisa: how does citigroup get out from underneath this regulatory cloud that's increasing a lot of skepticism in investors? john: we have to make progress slowly and surely every quarter.

i'm making proof points of doing what we say we are going to do. for example, in the third quarter as we had committed to our revenues were up 3% on investiture basis. expenses were down 2% operating leverage increasing in each of those five business lines. those are the kinds of things we have to keep doing to show we are making progress towards our medium-term targets of an 11% to 12% return on tangible common equity. lisa: where is citigroup to streamlining the five businesses? john: we are in an exciting place. the board is quite excited about how the company is doing as measured by those five businesses, which is much more transparent now. you can see it much more. there's a removal of the layer between the board and jane and those businesses that are much more accountable because it is so transparent about how they are doing. we saw some very exciting things in the third order. the apollo credit deal.

$25 billion deal, very innovative. we had the largest deal transaction with the mars acquisition of pillen over that was announced. we were the sole advisor. we had a very exciting deal with mastercard to tap into their international debit network. these are the kinds of things we are -- where citi is getting on its front foot. lisa: how much are you thinking another deal at the apollo one? john: we are quite excited. that gives us the ability to offer a range of things to clients that we would not otherwise be able to do. that is the important piece. let us see how it goes before we go down another path. lisa: are you still emphasizing that global reach at a time when everyone is looking at the u.s. since thing it looks pretty good over there? john: a lot of business going on all over the world. we are helping people be the preeminent bank for companies with cross-border needs. they may have different cross borders they are using and cross-border needs but we are

there to help them with that. lisa: thank you so much of being with us. that is john dugan, the chair of citigroup's board. jonathan: wonderful conversation. more from lisa later in the hour. jason thomas and investment strategy at carlisle joining later this hour and about 20 minutes time. i was a out shares of apple in the premarket, down by .9%. some real anxiety going into earnings in the next week. this coming from keybanc this morning. consensus expected unrealistic inflection across apple's business while the valuation appears expensive. they downgraded the stock. annmarie: tim cook is there. p sitting in a meeting right now in china's commerce minister. we have seen him also take reach and -- take to -- a massive push into the market because they have to be. what is china doing?

they are losing market share almost every day, every quarter to national champions like huawei. jonathan: for the broader market, equity futures up by .2% on the s&p. up next, neil dutta with u.s. payrolls do a week from today. the payrolls report one week away. the estimate of our survey, 120,000. a little bit of a lift this morning across the board on the s&p 500. from new york, this is bloomberg. ♪ ♪ (♪♪) (♪♪) what took you so long? i'm sorry, there was a long line at the thai place.

you get the sauce i like? of course! you're the man! i wish. the future isn't scary. not investing in it is. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com

jonathan: travel down this morning .9%. keybank cutting the stock to underweight from sector weight. here is the quote. apple is an impressive business with what we believe are unrealistic expectations to accelerate product growth. the earnings, a week away. earnings more broadly doing ok. equity futures up .2% on the s&p. likewise on the nasdaq. waiting for the payroll support

to drop in a weeks time. 4.1940. we are down two on a two-year, four point zero. in the bond market, it's all about payrolls. annmarie: mohamed el-erian looking at these indicators, not the idea that this is a trump trade being put on, but how difficult will this payrolls report be? look through the bad data, boeing, hurricanes. our data is talking about a negative print. jonathan: stephanie roth will join us later from wolfe research. the highs are 160 something. governor walz talked about 100 k off the backs of the strikes in hurricanes. here we are back to pre-hurricane levels. annmarie: is this the impact of the weather and strikes or do you have to add another 60

because of how the department of labor collects data and we know the revisions are to the downside? jonathan: neil dutta is about five minutes away. under surveillance this morning, the u.s. exploring options to restart talks between israel and hamas. secretary antony blinken says negotiators are set to meet in a couple of days. annmarie: we have been here how many times? deals on the table and you don't see the movement from israel or hamas, who don't agree to anything. of course the united states is going to push for this. part of this is not just the fact that secretary blinken is in the region, the 11th time since that october 7 attack, but they have to keep the dialogue going, especially because we are two weeks out from the u.s. election. jonathan: two weeks away, donald trump back in the white house, do you wait to make big decisions? annmarie: if you are israel, you said the chief of mossad to

qatar and don't do anything massive before the election. i am still wondering if we are going to see that retaliatory strike. there was a leak from the united states. israel waiting for things to cool down, maybe get the election over with, and then look at all of their options. jonathan: brent crude up 5.8%. -- 0.8%. donald trump and kamala harris entering hostile territory this weekend. trump holding a saturday rally here in new york city at madison square garden, and kamala harris holding several rallies in texas including one with beyonce. annmarie: this is not about trying to win votes for the top of the ticket in new york if you are donald trump, it is about

winning the news cycle. that is not going to have been. kamala harris is not going to win texas. this is a moment for her to highlight reproductive rights in a place where there are stringent controls on women and abortion access and also the hometown of beyonce. that could potentially win the news cycle. jonathan: convert how many voters? how many beyonce fans have not decided who they are voting for? how much will it actually change? annmarie: i think for taylor swift, it was about registration. you saw individuals that clicked on that link. do they go out and vote? we don't know. beyonce has done this, though.

she performed three days before the presidential election in 2016 with hillary clinton. jonathan: looking forward to trump and rogan from an entertainment perspective. annmarie: they have beef. rogan at one point was a bernie sanders supporter. he said that i'm not giving access to my. supporters he was also quite kind to kamala harris. jonathan: a little bit different to the conversation that we could see on rogan. let's talk about the restaurant business. more fast food chains pulling onions under e. coli fears, all removing onions related to taylor farms out of the abundance of caution. mcdonald is working with health authorities to confirm the source of the contamination affecting 13,000 stores. annmarie: you have to think the

taco bell, kfc's, of course they will be prudent. we know what happens to companies, what happens to their trust in consumers, and we know what happens to their share price if they are not. chipotle, double-digit losses when they could not contain that e. coli outbreak. jonathan: the stock is lower by almost 5%. the october payrolls report, one week today. the median estimate expecting 120 thousand jobs added after last month's blowout print of 240,000. joining us now is neil dutta. we have a ton of issues to work through. payroll claims yesterday back to prehurricane levels. walk me through the process you are going through to come up with a number for this month that gets released next friday. neil: i think it is the way the most of the street is, like that. no. when i look at the jobless claims data, it is good that

initial claims appear to be stabilizing close to where they were before the hurricane, but continuing claims have been going up still. obviously, they are lagged a bit, but continuing claims hit a cycle high. what that probably means is some increase in unemployment is probably inevitable with the next cut of the jobs number. in terms of how many people are affected by the hurricane, that is a little bit more difficult to game out. certainly i will be keeping it on manufacturing employment because of what that has to do with boeing, potential downstream effects of the strike across the company. jonathan: even if you take these issues away, you don't like the set up from q4 into 2025. what are the issues that you see, that you think maybe some people are ignoring at the moment? neil: keep in mind that aircraft

equipment investment was a huge driver for gdp growth over the last couple quarters. that will not be with us in q4. we know business investment intentions have been broadly sluggish. i don't think that spending will be the driver of growth in q4 that it has been. that is contributing have a percentage point of growth in the third quarter. the housing market, whatever neutral is, it has to be a lot lower for housing. residential investment will continue contracting into q4. you look at the recent backup in mortgage rates. more broadly, if you look at new single-family homes that are for sale that have been completed, that is up to 40, 50% from last year. inevitably you will see some weakness in single-family residential real estate construction.

we also know that multi family construction is likely to keep coming down because starts are running below completions in the sector. i think residential construction activity is likely to be weak. in my mind, the labor markets are still broadly cooling. i do think one interesting wrinkle with the next cut of the jobs number it not so much where october comes out but the revision for september. the initial response rate was quite low for a september. that doesn't tell us about which way the revisions will be, but it tells us there will be revisions. that will be pretty interesting. at any rate, nominal income growth over the last six month, that is running about 4% which is a lot weaker than the kind of growth in consumer spending we have seen in the third quarter. my sense is you get a little bit of slowing in consumer spending as well.

obviously, there is a lot of -- i think there is a bit of front running of the election. if you wind up getting with the markets are pricing, maybe not as much of a tailwind when it happens. jonathan: i want your thoughts on the federal reserve, basically communicated a bias to reduce interest rates. you believe they are needed. do you see them wavering based on what we see from payrolls in september, retail sales a week or so ago? neil: certainly some are wavering, but i think that was kind of known. seven of the 19 officials in september were already on board with skipping a meeting before year-end. on the 75 basis points of rate cuts baked into the outlook for the rest of the year. i think the fed will go in november. the markets appeared to be flirting with a notion of a skip in december. by the time we get to december,

skipping the meeting will be unlikely because of things i'm talking about. annmarie: is there a print we could get that would put the fed saying we are going to wait and skips november? neil: if you get another number like you did last month, this month, even with all of these hurricane effects, if you get that kind of run rate on a three-month basis, i think that may change the fed thinking on the state of the labor market. when you look at the totality of the data, i see labor demand continuing to cool. you look at john's posting data -- the indeed folks have it on a weekly basis. that has been slowing. quit rates remain low. the beige book is always released ahead of the fed meetings. if you look at that come it looks like most of the country

is actually flat to down. only two districts are up. there is a disconnect with a lot of the data points that have been coming out. generally speaking, the labor market trend is a lot closer to where things were at the end of august than where they were in september. jonathan: let's get to the election, politics, policy, financial markets. 2016, we all remember the run up to november. every single note, the headline in the media, the former president, donald trump, at the time, candidate trump, would be bad for equity markets. then we decided over night that he would be very good for equity markets. the story now is that the former president is bad for the bond market. can you tell me how you are thinking about the balance of risk around fixed income, how people are thinking about the outcomes of the election?

neil: certainly, at every client meeting i go to, knowing i talked to really wants to be long duration going into the election because of what you are talking about. the prospect of a potential unified government coming out of the election. that, to me, suggest that a lot of this might already be priced in. if you look at prediction markets, poland, -- polling, this is not like 2016 where trump was a one in five shot. the odds are a lot higher now. it's important to keep in mind, if you do get some kind of a sweep, the house majority, if it does go to republicans, will probably quite thin. it is not like there will not have to be a lot of wheeling and dealing that needs to be done to

get things over the finish line next year. even if it is a unified republican government, that doesn't mean that the trump team will be able to steamroll whatever they want through congress. annmarie: that is true for taxes, not for tariffs. what could that implication be? neil: if you get what is being proposed, that would obviously be bad. that was also true when we were talking about these things in late 2016, early 2017. the fact is the tax cut sunsets at the end of the year. remember, it's about the sequence of events. i don't necessarily believe that tariffs will be the first thing out the gate. it will probably focusing on the tax law.

if you remember the sequence the first time -- and again, this is a tossup race. if it was trump, and 2017, he was the markets best friend. all the things that were going on in d.c. were about growth friendly initiatives, the regulations, getting the tax cuts and jobs act passed. the fact that the law sunsets next year may focus the mind because you need congress to get that done. when they are all campaigning the year after in 2026, may be that is when the terror comes to the fore. i think it's about sequencing. this is the sort of vote harvesting season, everyone wants to sound tough, but that doesn't mean i don't think it's important to take some of these things being proposed with a little bit of a grain of salt. jonathan: always great to catch

up with you. thank you. let's get an update on stories elsewhere this morning. dani: tesla co elon musk and russian president vladimir regularly. the two have been holding conversations since 2022. the paper cited u.s., european, and russian officials saying they talk about personal topics, business, and geopolitical issues. the owners of the cargo ship that caused the collapse of the francis scott key bridge have settled a lawsuit with the united states. the companies have agreed to pay 102 million dollars which will go to where the cost of cleaning up the wreckage. in the lawsuit, the u.s. said they used an ill-prepared crew and "cut corners in ways that risked the lives and infrastructure." the new york liberty were greeted by thousands of fans as they celebrated their championship with a tickertape parade through the city. as many as 80,000 fans came out

to celebrate the liberty's first ever title. it was a welcome sight or the city with the last sports related parade happening over five years ago after the women's soccer team won the world cup. jonathan: thank you. next on the program, a growing debt pile all but guaranteed. >> the next president, whoever that may be, will have to deal with fiscal responsibility. jonathan: that conversation, next. if your business needs a new application, then developers will have to write code. a lot of code. if an application needs to be modernized, then you'll need time, resources... and caffeine. if this sounds daunting, then use watsonx code assistant. built with ibm's granite code model, it's ai designed to multiply developer productivity,

so you can generate code quickly. ibm. let's create.

jonathan: equity futures on the s&p up by .25%. under surveillance this morning, and growing debt pile all but guaranteed. >> either way you will see a

rise in overall debt outstanding, and this is where it really matters. the next president, whoever it may be, next government, will have to deal with fiscal sustainability. interest rates will matter for the government, not just the economy. as we get to 5% or higher, that will challenge the ability to spend like we have done. jonathan: both harris and trump outlining plans that would increase the national debt. history suggest that governments only engage in deficit reduction on the required scale when it is perceived as necessary to reduce borrowing costs. jason joins lisa in washington. lisa: jason is here and i want to start with the idea of typically when people worry about the deficit, it starts to get priced in, it is not, unless you think what we are seeing now with yields rising has to deal with that. do you think long and the yields

rising has to do with the deficit or other factors jason: the deficit is contributing to nominal gdp growth, contributing to inflation remaining closer to 3% than 2%. so i don't think we need to look at just a risk premium in terms of the back of a long-term yields. we just need to appreciate the deficit today, 6.5% of gdp, but at full employment. so this is quite different from the deficits from a decade ago, also similar proportion to the economy, 6.5%, but coming at a time when unemployment was 8%, tax receipts were pressed, social services spending was relatively high. what is different here is when you adjust for the state of the economy, the treasury is injecting about 1.5 trillion dollars in incremental liquidity into the economy. that is something that people have to take into account when bond yields, inflation, nominal gdp growth.

lisa: there is this question of whether we are seeing people figure out the neutral rate might be a lot higher. right now we are pricing in a 3.4% rate at the end of next year for the fed funds, but right now you think maybe you think the market is adjusting higher and will take that back up to something closer to four. jason: that is a reasonable expectation. the way i have related to current experience is similar to the taper tantrum. in 2012, everyone was convinced that bond yields were unnaturally low. the expectation was as soon as the fed stops purchasing assets, bond yields will spike and will normalize. what happened, of course, when bernanke shopped markets, the fed stopped buying bonds by the end of 2014. within 18 months, bond yields were at the same level as when bernanke first surprise markets with the suggestion.

then people started to talk about the fundamental determinants of real interest rates. people recognize that monetary policy could not be the entirety of the explanation for why rates were so low. today, i think there is this expectation, we have this temporary spike in rate because the fed was focus on maintaining credibility, getting inflation down, and then we would go back to 2, 2 .5% thereafter. now they are realizing there are structural changes to the economy, the shock from ai, industrial policy, capital needs, changing attitudes toward trade. when you accumulate these factors and take stock of them, you end up with an inflation-stabilizing interest rate that it probably closer to 4%. lisa: do you think it's a mistake at this point for the fed to cut further? jason: as inflation goes down to

2%, you would not suggest that this economy requires a real interest rate of 3%, close to 3%. i think there are at least two more cuts coming, a third, we will see. but when the fed first cut rates in september, the market had priced 10 cuts over the next 12 months. it is just darling back expectations but rates are still coming down. lisa: even if the fed doesn't cut, do you think that risk assets are still a sweet spot particularly in the private credit sphere? jason: what is underappreciated about this economy is that a relatively small share of gdp come a small share of the economy, is making such an outsize contribution to growth. really it's about 4% of gdp adding a full point to growth, data centers. the infrastructure in addition to the hardware applications. it is renewable energy

generation facilities, green industry, ev, semiconductor fabrication plants. this economy is actually performing better than expectations, certainly better than people expected two months ago as they started to worry about a couple soft month of data. there is reason to suspect there is a lot more runway for growth that people were anticipating. lisa: so yes. [laughter] jason: you have to worry about valuations, our credit spreads to tight question mark there are lots of complications but the tailwinds are sufficient. lisa: jason thomas, thank you for being with us. jonathan: coming up in the next hour, we are catching up with thomas kennedy of jp morgan. looking forward to a massive week in tech earnings. stephanie roth of the wall for research looking for 70 k on the payrolls report next friday. the third hour of bloomberg

surveillance is up next.

♪ ♪ with so much great entertainment out there... wouldn't it be easier if you could find what you want, all in one place? my favorites. get xfinity streamsaver with netflix, apple tv+, and peacock included, for only $15 a month.

>> there is a sense i think of

the markets are increasingly worried about some sort of fiscal risk. >> companies are less optimistic than if you years ago. >> you look at equities. we are going to get growth. forward returns will just be more muted. >> corporate america is saying i'm in a pretty good position, the economy is doing well. >> this is bloomberg surveillance with jonathan ferro, lisa abramowicz, annmarie hordern. jonathan: earnings from alphabet, meta, apple all coming up next week. payrolls friday just around the corner. equity futures on the s&p 500 firm or by a quarter of 1%. the bond market, yields climbing all week by double-digit basis points. down two basis points. 4.19 on 10's. as for the guess is next friday,

1.20. citi expects a soft 90 k new jobs and 4.2 unemployment rate next week. annmarie: andrew hallman horse says it may take until december for the market to turn its attention back to risk. we had the blowout jobs report. the upside surprise potentially we could see in next week's jobs report, how much is the hurricane going to be priced in? if it is not, what does that mean for the fed? jonathan: two weeks ago, all we talked about was messy data of a hurricane and a strike at boeing. what kind of number do you put in for a guess or next friday? annmarie: i don't know. bloomberg economics is talking about a negative print. if you take off what governor waller said because of the hurricanes, strikes, another 60 or 70 because of basic revisions, it is very

difficult. and it is noisy. what do you see in the beige book? companies not wanting to hire or fire until they get more clarity on what policy looks like going forward. jonathan: the former president sat down with bloomberg a few weeks back and he said perhaps chairman powell had the easiest job in washington, but let me tell you come in a few weeks time, it will not be an easy decision to make. they will have a distorted payrolls report, the election, and then they have to make a decision. they have the bias to cut interest rates, but we are asking what would upset that buyers to reduce interest rates? annmarie: we are hearing from analysts, anything north of 150 to 200,000 potentially guess the fed more nervous, looking back at the labor market. more people are thinking maybe

it is december they will have to miss. november is pretty much baked in. or maybe because it is a blacked out period, maybe they call their friends in the media. jonathan: equity futures in the s&p 500 firm or by one third of 1% on the s&p. coming up this armor, catching up with thomas kennedy of jp morgan as the s&p has for its first weekly drop in seven. ed ludlow previews tech earnings. we begin this hour with equities inching higher as investors digest upbeat earnings and strong economic data. thomas kennedy says elections can stop volatility but interestingly equity volatility has been low for an election year. election don't drive financial assets, but you would be forgiven if you thought this time was different. is it different this time? thomas: i don't think it will be

particularly different. the equity volatility point is interesting because we are talking about this being a very polarizing election. socially it feels like it may be that way, but in the market, implied volatility has been very low. october and november, nothing special about it. the market, as it always does, understands the earnings, for a trajectory, growth trajectory is what matters most. a soft landing has happened and the fed will keep it going. jonathan: can you say the same thing about treasuries? jason: no, you are correct, equity volatility is low, fixed income volatility is very high, as we are trying to sort out where the fed should cut to. 2.75 at the low end, almost 4 at

the high end. this is unbelievable uncertainty of where things can go. jonathan: path of least resistance, where do we go? thomas: that is where it gets interesting for the election. is this the moment for the deficit? commentators are talking about that. months ago, it could have been the budget deficit issues, the annual rounds. i don't know if this one is, it's possible, but we don't have good analogies of where rates could go in that scenario. we don't really have a great analogy. that aside, i think rates for the next couple of years, will be at the low end, because the fed is biased to cut. that should perpetuate unless you think the labor market would tighten magically. annmarie: if a republican sweep is being priced into bond markets, what happens if we don't get that? thomas: you should see rates

rally. right now with the republican sweep scenario, 10's around 4.25. in the event we don't get that, you should see a relief rally in equities. annmarie: what does volatility look like after the election? maricopa county elections are talking about maybe not having the county, the most populous county in arizona, if they don't have the result and there is a contested election, what does volatility look like in the financial markets? thomas: how long to be allow this uncertainty to perpetuate itself? if this goes on for a month, we should see volatility pickup. the question becomes when two central bankers need to step in if volatility is so big? those are the questions that i am sure are being asked in washington. annmarie: do central banks and investors just load up on gold?

thomas: it has been the trade this year. four ways to think about the fiscal situation. everyone is worried about a meltdown. we can pontificate about when the moment is, but what do you do about it? you see investors shortening their duration. that has happened a little bit. more gold has been happening. international diversification, and also real assets. and our assumptions, real assets are expected to outpace global equity markets for the next 10 years. jonathan: i don't think we have to benchmark necessarily to the extreme. it doesn't have to be a crisis or not, there could be something in between. it was interesting for me to hear you say that a ready suite, 4.20 make sense on the u.s. 10-year. proposals on the table, tax cuts, tariffs, deportations.

that should come with initially higher inflation and potentially stronger growth. thomas: i think there are two scenarios in the red sweep we need to discuss. the first is this procyclical, higher growth, higher inflation scenario but the deficit is not a worry. 4.20 five represents a world where the fed will be gradual in their rate cuts in response. but the red sweep, wake up and it is the minsky moment, equities would sell off. and our baseline scenario for a red sweep, i think it's a procyclical environment where risk assets perform well, rates are higher for longer. jonathan: there is a conversation about taking the corporate tax rate down to 15% with conditions. do we know what those conditions are? annmarie: continually asked, still don't know. jonathan: this is not going to be a tech story.

this will be a small cap, banks -- what kind of trade are you putting on? thomas: potentially an industrial revolution for america where the artificial intelligence infrastructure, which is mildly insufficient for a eyed which could come quickly -- and that is a power discussion, real estate discussion, data centers -- but it is intersecting the economy in an interesting way. china has vertically integrated itself into that supply chain of tomorrow. the example i like the best is lithium-ion batteries. 50% imported from china to america. when you look at the materials, refinement of the critical minerals, it looks like just about every large cell battery touches china at some point. how do you separate when they have vertically integrated, but you need the power, supply?

this looks mildly durable in the industrial space. for investors in our community, try to diversify. amazon, meta, google, microsoft, those hyper scanners that you mentioned, confident that they will keep going. they need that infrastructure to keep going. annmarie: some say we need to add three new york city to the power grid by 2030 to make sure that you can power everything you are talking about. why is that a trump trade? that will happen under whoever is president. thomas: completely agree. this is a tree that will work either way. it is not a trade, really an investment process, because the should go on from one to three years. the crux of the supply and demand imbalances, when do we think most businesses use artificial intelligence? a couple years? the power authorities in virginia are saying that you are

going to have to wait a long time, so this supply demand imbalance israel. jonathan: we have seen a massive year for utilities. what is the next step in this ai trade? thomas: utilities, industrials, tech is a part of that. how tech performs in forms -- these are connected. these are not traditional cyclicals or defensives. they are part of this infrastructure buildout tied to technology. we think those are the two best sectors to be holding into next year. jonathan: do you think these tech firms need to demonstrate a more powerful use case for the consumer, investors to carry on being patient, maintained his tolerance for them to keep spending billions of dollars on chips out of nvidia? thomas: so far the spending on artificial intelligence on of these big names is mostly from free cash flow. that buys them time to keep

doing the capex because it is financed and funded from earnings. if earnings growth is going to slow next year, it's a dominant question, how patient can we be with a price this high? most of our clients are still overweight u.s. tech. can you diversify and find better ways or less risky ways to get your portfolio where you wanted to go? jonathan: great to catch up, tom kennedy of jp morgan. equity futures on the s&p 500 up by one third of 1%. with an update on stories elsewhere, let's cross over to dani burger. dani: shares of cap the holdings plunging after a federal judge blocked their plan to take over of 8.5 billion dollars takeover of tapestry. the judge said it would harm competition, creating a company with a 59% share of accessible

handbag luxury market. mercedes-benz is planning further cost cuts as it faces weaker demand in china. profitability fell below its minimum target in the third quarter to its lowest since it split from the truck business in 2021. it is a sharp contrast to tesla who reported robust earnings tied to strong performance in china. it's a good day to be lionel messi. he earns a $12 million annual base salary and more than $20 million in total compensation. his salary is more than the entire payroll of 22 major league soccer teams. jonathan: and he is still the only reason we are talking about the league, my opinion. more from dani in 30 minutes time. morning calls and ed ludlow the head of a mess week for tech results. from new york city, this is

bloomberg. ♪

jonathan: i knew as soon as i said it, i would get pushback from cincinnati, where apparently the mls is a big deal. i promise you i will attend a game. equity futures on the s&p up by 131%. 4.1960. the opening bell, one hour, 13 minutes away. citi raising its price target on tapestry to 55, saying the blocked acquisition of capri simplifies the company's story. the other name is down a heck of a lot. raymond james downgrading t-mobile to market reform. the stock is down 2%. the big one this morning, key bank apple to underweight citing

unrealistic expectations and an expensive valuation. a slew of companies set to report earnings next week including five of the mag seven. alphabet followed by microsoft, meta. amazon and apple on thursday. ed ludlow joins us for more. let's start with yesterday before we get deep into next week. tesla, 22% move. frame the move for us historically. it is a monster one. ed: biggest in almost a decade. what is interesting about the tesla print, discussing with investors, we discussed on the program how elon musk's greatest skill is keeping investors looking to the horizon, so you have got that bullish growth outlook for the core ev business, the more sexy autonomous driving stuff further afield. in the corner gone, they demonstrated something which they have been very good at,

being a prophet machine. getting more profit from the business lines. that was more notable. there is a little skepticism about some of the deferred revenues around the software they sell but great quarter gone, bullish outlook looking forward. jonathan: it was not just the percentage point move, the market cap move. $104 billion in a single day. the combined market cap of vw, stellantis, and vw -- bmw doesn't meet the one-day move that we saw in tesla yesterday. what are they doing right compared to the european peers? ed: elon musk threw some shade at them, name a automaker that has a division that is doing it profitably. his argument is there is not one, just tesla.

that is probably true. it is just the basics of running a large industrial global company. they have managed to pull down their raw materials cost, refined the production process. then they benefited hugely from, to your point, regulatory tax credits. other automakers have to buy from them because the others are not doing a good job selling ev's. it is a self fulfilling prophecy at the moment for tesla. annmarie: i know that elon musk talked about the factories in mexico, said that we would make a decision, we have to wait for the election. he is talking about china being this growth driver. how much is elon musk waiting for the election where he supports the former president, but the former president's policies may actually hurt him at tesla? ed: if i may, i wrote about this in the moment on the call

because i thought it was important. musk did not name donald trump and did not use the word election, but he was saying he wanted to see a nationwide regulation for autonomous vehicles. tesla is currently pivoting its business toward that. what he went on to say is "if there is a department of government efficiency" then he would work to enact federal, nationwide regulations. for me, that is the ceo of a large publicly traded company saying if the candidate that he is a backer of wins, he will use that platform to push for federal level regulation of the business line his company's future is pegged to. i thought that was critically important. jonathan: a key piece of the puzzle is china, what it could mean for apple. you sow the downgrade from keeping this morning.

i have shared the quote with the audience. apple, impressive business with what we believe our unrealistic expectation to we accelerate growth across all product categories and geographies. what do we know about what is happening in china? ed: the hard lesson i have learned in the last 18 months, be wary about third-party data about apple sales in china. when earnings rolls around, we are often proven wrong in some sense. you can see that competition for the smartphone market in china is there. also, too, we don't understand what is happening frankly. apple is selling the iphone 16 in china, some idea that the consumer is buying it, with the idea that in the future apple will roll out its apple intelligence feature. it is a really interesting

consumer behavior that is impossible for any third party researcher to track. it is a consumer betting on a future product that we don't have a timeline for existence. when they rolled around, that is when we will see the real data from apple. i suspect it will be interesting to see if iphone grows and other categories in china do not, as has been the case in prior quarters. annmarie: there is zero timeline for when those consumers in china at the side to get this phone will get access to the ai technology? ed: a notable story this week was tim cook being in china, meeting with relevant government officials who are a part of that regulatory body. apple has a unique position for a u.s. company in china that may be only tesla also shares. it moves with relative freedom in sales and also its supply chain. but they cannot decide to deploy a technology like this.

it is at the whim of regulators. particularly in the context of videogame regulators, regulators can change their mind quickly or they can take a long time to.do something modeling for that is hard. annmarie: you mentioned tim cook. he met with the congress industry today, taking these stores. -- tours. you see how government leaders are reacting versus business leaders. bipartisan support for talking tough on china. for apple, what does the future look like if we get a trump 2.0, which is being priced into the financial markets? ed: i don't think we know the answer. what i took from that recent interview with john micklethwait, basically trump feeling he has a good relationship with xi, china,

that he would do something in american interest. but we have been through one trump presidency, where other than the latter part of the pandemic that muddied the waters, apple was fine. de-risked supply to some part, shifting some of the supply chain to india. critical to nvidia as well with export restrictions. china is still the most important end market. we watch it closely, what trump will or will not do, that is the problem. we don't have a clear sense on the policy platform for either when it comes to technology companies in the country. jonathan: massive week ahead, looking forward to covering it. you can watch bloomberg technology at 11:00. tim cook proved to be a really effective diplomat throughout trump's first term.

what we heard a week ago on the program, we told you about whether apple would get carveouts if they went big on tariffs. i wonder if you will ultimately change his mind again. annmarie: he said no one is getting a carveout, not even apple. donald trump says that tim cook would call him, this is what i'm dealing with. can i walk you through this? that personal touch from an executive was important to donald trump and ends up being beneficial to tim cook. jonathan: coming up next on the program, we will catch up with stephanie roth of wolfe research, looking at 70 k on the payrolls next week. and then we will speak to sonia meskin of ubs. this is bloomberg. ♪

jonathan: 60 minutes away from the opening bell. equity futures up by 130 1% on the s&p 500. nasdaq 100 up by 0.4. let's get you some morning movers with manus cranny. manus: the pain trade on wall street this morning is on merger arbitrage. the merger with tapestry taken off the table. this leaves the company exceptionally vulnerable. think about the brands, michael kors, versace, jimmy choo.

where did they go for funding? a lot of people are saying this is an escape for tapestry, they will not be dragged down by these discounters, emboldened their position. but if you want to get to scale, you need to be able to do deals. that is the direct potentially in the longer term for tapestry. size and scale is everything in luxury. capital one one have delivered numbers better than expected. cards, credit losses down. sketchers is up this morning 7.5%. 30% growth in emea. they warrant on china. of course, a collection from snoop dogg, which you can get your hands on, jonathan. jonathan: that is a good read.

i don't know a single person who wears sketchers. annmarie: for a while, president biden was until he went into hoka. jonathan: they seem to be doing well. unexpected strength is what barclays said. manus cranny would not be seen dead in sketchers either. stephanie roth of wolfe research saying we are looking for 70 k on payrolls despite being bullish on the economy. we expect significant noise in the report. good morning. 70,000. i know you are not bearish. tell us what has gone into that, what is the process that you and the team went to? stephanie: it is actually kind of simple. the trend in payrolls growth is around 150,000, similar to where we were last cycle. then you have to knock out

33,000 from boeing. our estimate from the hurricane is 50,000, in line with historical hurricanes in the past. that gets you to something pretty weak even though the underlying trend is fine. jonathan: claims back to pre-hurricane levels. does that tell you about what we may see next week? stephanie: you saw the 4000 increase from florida. possible you will see another increase next week. if not, the numbers are a little less low and the hurricane didn't have as much of an impact that we thought. governor waller said that the combined impact could be 100,000. annmarie: what if you add in the basic revision that people put in now, nonfarm payrolls. 60,000 off, is that included in your 70? maybe we will get 10,000 for the nft? stephanie: we saw positive revisions in the last print.

you will probably see positive revisions in the next two months as well. jonathan: it sounds like you think 70 is actually a good number for next week. stephanie: i think it is fine. if the hurricane number is correct, we can confirm it was driven by florida, it is fine, the market should not be scared of it. jonathan: what is the kind of number that the market should be scared of, perhaps we shouldn't cut interest rates by 25 basis points? stephanie: something below 50,000 would really get a lot of attention. bls also publishes the number of strikers. jonathan: i am asking what is stopping them from cutting at all, not from 25 to 50. this job market is stronger than we thought it was, unemployment climbed over the summer. we cut interest rates 50 basis points.

here we are a few months later, 10 year yields are up 25 basis points. should they be cutting interest rates? stephanie: i think it is really hard for them to not cut in november. december it is fairly likely they will skip. they will want to see more data. by december, it is very reasonable they would want to pause for a meeting. annmarie: he is asking for a number. two hundred thousand, what does the number look like? stephanie: 200,000. i think that it probably the line in the sand. more likely in december than november. you should also see headwinds from an inflation perspective from the hurricane. jonathan: your number for next friday is 70. but you are bullish. walk me through what you're are looking for into next year. what do these numbers look like for jobs, inflation, ultimately for the fed's landing? stephanie: for jobs, 150,000,

forget about the next print. looking for soft landing prints. inflation around 2%, a little upward pressure in the next couple months from hurricanes. autos should see some upward pressure. that is a soft landing type of economy. we thought hard landing, then it was soft landing, no landing. the result is somewhere in the middle, soft landing. but we are not quite out of the woods yet. jonathan: no landing has not run its course yet, what does that mean? stephanie: upward pressure on rates in the near term. pricing in the potential odds of trump raising the deficit. both sides putting pressure on rates. the no landing manifests itself through interest rates. annmarie: in the near term, maybe the fed holds in december,

but how are you thing about 2025 when you see the policy on the campaign trail? stephanie: and every other meeting type of pace until they get to something close to 3%. it is a challenging one. tariffs are inflationary but also a significant headwind on the economy. they will not be more hawkish on the back end of that, if anything, more accommodative. annmarie: the market is pricing and potentially a red sweep. tariffs, trump can do that on day one. if he goes there, how does jay powell continue on a cutting cycle? stephanie: we think he will do it later in the year come closer to when they have to extend tcja, where they can tie those things together. let's say they do it at the beginning of the year. we think that could be upward pressure on inflation by a full percentage point at the least.

i think the fed will have to see how things shake out. realistically, it will hurt growth, and they will have to be more accommodative. jonathan: where do you think rates are coming down to next year? i know it is hard not knowing policy for next year but what is your base case for 2025? stephanie: on fed funds rates? we think five more cuts by the end of 2025. jonathan: they skip december? stephanie: somewhere in between. jonathan: equity futures on the s&p 500, up by 131% going into the opening bell. the opening bell is 50 minutes away with the nasdaq 100 up by .4%. the russell, up by about a third. up by double-digit basis points so far through yesterday. down three basis points on the

two-, four point 05%. on the 10-year, 4.1 94 zero. 30-year, 4.4632. joining us now, sonia meskin from ubs. just had a conversation about payrolls. base case for her, 70 k. how difficult is it to pull a number from the sky and roll with it? sonia: so difficult. we have talked about this before actually. the report we got last time is probably the last queen report for the year given all the hurricanes and such. waller said this report could be done by 100 k from the weather effects. we think the fed will have to look through this one-off because of the impact that is happening in the community is, as devastating as it is. jonathan: jobless claims back to

pre-hurricane levels, we have said that repeatedly. a move on the 10-year of 50 to 60 basis interest points. what is driving treasuries right now for you? the debate we have had on the program, politics or data? sonia: we think it is three things driving rates. uncertainty around inflation, uncertainty with the fiscal trajectories from both candidates, and the broader physical trajectory of the united states that may come into focus as we near the election. annmarie: i speak to political strategists who say the proposals that donald trump is putting out there is worse for the deficit. you don't think that is true. you think both are pretty bad for the deficit. sonia: we differ from consensus here. we think that kamala harris would probably extend the deficit by about $2 trillion, where trump would extend by over $4 trillion. in the grand scheme of things,

entitlements coming more into focus for the markets, tcg eight extension, immigration policies that would impact the labor market and therefore inflation and growth, we think those differences are not that the biggest difference. annmarie: do you find it odd that the bond market is pricing in trump? sonia: over the weekend, we saw him improve in the polls. historically, trump has done better in elections than the polls have shown. it is not unusual that the market's giving him more credence right now. jonathan: are we will price for it in the treasury market? there is a massive difference between a trump presidency a gop swing. i have heard that outside of a gop sweep, it's difficult to see 10-year treasury yields 20, 30, 50 basis points higher. sonia: fundamentally, if we

start pricing in a wide deficit like 7% of gdp going forward, while growing at trend of nominal 4% gdp, if this is not a good trajectory, this will drive the term premium up in and of itself. there will be effects in terms of growth. on top of it we have the debt ceiling coming up, which can be punted by congress into next year, but increases uncertainty for businesses and households. there is lots going on in the treasury market right now. annmarie: when you rent 2025, the concerns, debt ceiling, tcja, tariffs, what gives you most concerns? sonia: tariff scenario is interesting because tariffs only on china wouldn't have as big of an impact on the u.s. economy specifically. annmarie: why? sonia: all out terrace, more potential retaliation from trading partners. that would be quite impactful.

annmarie: wouldn't china retaliate? sonia: they are but they are a smaller portion now of our economy then pre-covid. there has been a lot of substitution effect already. jonathan: we know how this would hit europe. a big gap developing between the german and u.s. 10-year. do you expect divergence between the u.s. and europe across growth, rates, central bank policy? sonia: we have had some divergence already. central banks have started to ease earlier than we have. one of the differences we see going forward potentially is what happens with inflation. we see inflation surprising to the upside into the first quarter of next year. whether this happened in europe or not is a different story. we also think interestingly part of the decline in inflation globally has been not

necessarily a central-bank phenomenon. that means it is more difficult for central banks to control if we see upside surprise as well. jonathan: great to see you. sonia meskin of ubs. just to make it really simple, think about how the conversation has changed. in america, we have gone from talking about 25 or 50 to 25 and nothing. in europe, 25 or maybe not to 25 or 50. the conversations in europe and the u.s. have completely reversed over the last month. annmarie: whose job is actually easier? i know donald trump likes to joke about having the easiest job in washington. jay powell has a harder job right now given how the data is modeled. how about the job for christine lagarde? growth is not good and inflation is coming down. jonathan: chairman powell will have such a difficult news conference if we don't have a result of the u.s. election,

question after question about policy, and he will not be able to answer it. with an update on stories, here is your bloomberg green with dani burger. dani: 11 days until the election. kamala harris is leading into celebrity endorsements. the vice president was joined on stage by barack obama at a rally in georgia. she was also joined by bruce springsteen. later today, she will be joined by beyonce and the hometown of the singer, houston. satya nadella received a pay package worth more than $79 million this year. about 90% of his compensation was in microsoft shares. the filing also showed his package would have been $5 million higher have you not requested a pay cut to reflect his personal accountability for the changes the company is making to reflect cybersecurity risks. the new york yankees and los angeles dodgers face out tonight in game one of the world series.

it will be the 12 time that the franchises have met for the trophy. the series but the spotlight on two of baseball's biggest stars, shohei ohtani and aaron judge. the yankees will hope to add to their league record with a 28 league title, their first since 2009. the daughters are looking for their eighth, the first since the 2020 season. jonathan: thank you. have a wonderful weekend. coming up, we will set you up for the week ahead, and why everyone is seem and we headed to texas on the others of this commercial break. this is bloomberg. ♪

jonathan: let's call it 14

minutes away from the opening bell just around the corner. equity futures on the s&p up by .4%. nasdaq 100 up by .5%. yesterday, the only positive day of the week so far, snapping a three-day slide. at the moment, poised for the first weekly loss in seven, snapping a six-week winning streak on the longest winning streak of the year so far. the bond market story looks like this. up by double digit basis points week so far. we pulled back a little bit, erasing some of that move. down three or four basis point on the front end. 10-year, 4.1 eight. 30-year, 4.4495. here is the trading diary through today into the weekend and through next week. umich consumer sentiment coming

on monday, 10:00. ford reports on tuesday. google earnings, big tech. so many companies reporting including meta-, apple, google. then going through wednesday for more economic data, initial gdp data. thursday, another round of jobless claims, core pce. then friday is the big one, payrolls. amh, massive tech firms reporting and in the payrolls report. the estimate is 120. annmarie: they are all over the place. stephanie roth at 70 k is the lowest on the street. even though she is bullish, coming in lower than andrew, who thinks it will be a soft 90 k print. bloomberg economics thinks that we will get a -10 k print because of all of the noisy disruptions with things like the strikes and the hurricane. what if it is a surprise to the

upside? the question for where the sleeve the federal reserve? they may not know the outcome of the presidential election. jonathan: jim beyonca suggesting that may the biggest risk or next week in the payrolls report is upside risk. before we get there, plenty more campaigning on the campaign trail. harris and trout are in texas today betting influential celebrities will help with the final push. welcome to the program. walk us through why texas will be so important for the next 24 hours. >> certainly important for harris, however, she has to know that she will not win the state. what she wants to do is we focus on the abortion issue. she believes this is the place to do it. texas is the state that began in the strict abortion rules of six weeks. very few exceptions with the exception of the health of the mother. therefore she really wants to refocus to that.

also she has some major texas star power with her. she will have beyonce with her, willie nelson. she cannot simply say i am not donald trump. what she wants to say is this is an issue that is very important to democrats. what her campaign is common ground zero for that. she will be with people with personal stories about abortion. she will also have senate candidate collin allred with her, hoping to help him in his race. therefore this is big for her in the issues since. donald trump has used texas as a cash register, but he has a lot of support. he has to be here because of joe rogan's podcast, but also wants to use it as a backdrop for him, always good for him when it comes to immigration, a successful issue for republicans. that is why both are going to be

here. annmarie: looking forward to that podcast because both men have some beef. i wish harris was sitting down with rogan because you have to be there for a full hour. pretty much anything can happen. you talked about colin allred, i want to talk about that senate race. is it close, can he unseat ted cruz? julie: it is within the margin of error, at a different race in 2018 when it was beto o'rourke. the only similarity is they have raised about $80 million, both outraged to senator cruz, who will be with donald trump as well. here is the situation. you have to get almost all of the independent voters. i was out and call allred event last night. he, too, is talking a lot about abortion because he knows that resonates here. for him to be with kamala harris, it is somewhat of a

difficult move for him because he has tried to run as a moderate, differently from beto o'rourke. in the situation, he needs to be with kamala harris, and if he didn't show up, that is what people will be talking about, not the issues. i would say it is about a three-point race. it depends how donald trump does in the state. he won by 16 points in -- eight points in 2016. this year, colin allred is running better in texas than kamala harris is. so you have that to look at. i believe it is a three-point race right now. it really comes out to turn out and comes down to those independent voters, which he is such very -- trying very hard to get. also what you found interesting, ted cruz also trying to run as a bipartisan in this race. you know he is a very close ally of donald trump, so it will be

interesting to see. jonathan: looking ahead to a busy weekend. going into the final full week of campaigning. annmarie: it will be interesting. it is the shock and awe effect i wanted to get the headlines. kamala harris goes into texas, deep ruby red, and donald trump comes to blue new york to play the garden. jonathan: tons of attention on those individuals over the next week going into the election in the united states on november 5. coming up on monday, catching up with ambassador edward mcmullen. a conversation about his future. will he be in a potential trump administration? and the nobel prize-winning economist joseph stiglitz on why he is supporting a kamala harris presidency. from new york city, that does it for this week. thank you for choosing bloomberg tv. this was bloomberg surveillance.

♪

♪ ♪ with so much great entertainment out there... wouldn't it be easier if you could find what you want, all in one place? my favorites. get xfinity streamsaver with netflix, apple tv+, and peacock included, for only $15 a month.

matt: it is the end of a week that will likely post losses even though we have green arrows on futures. 30 minutes until the start of trading. sonali: katie greifeld is off today. "bloomberg open interest" starts right now. matt: coming up on edge ahead of a tight election battle and big tech earnings on the horizon. plus, deal stocks