>> it all comes down to the election. >> still quite tight. >> all the t's are crossed and the i's are dotted. >> this is bloomberg surveillance with jonathan ferro, lisa abramowicz, and annmarie hordern. jonathan: live from new york city, good morning. bloomberg surveillance starts right now with one day to go going into a defining week for the global economy and financial markets worldwide. equity futures on the s&p 500 positive by .25%.

the fireworks is right here. the bond markets rallying. chinese equities are doing ok. mexican peso is stronger. one poll showing harris with a lead in iowa of all places. lisa: it is by one of the most respected posters. there is a question here about how much the tide has shifted to harris. you have seen she is now basically edging ahead of donald trump. how much is this an excuse for markets to take off some of the risk that they had put on earlier? annmarie: for markets, a bit of a reality check. when you look at this poll, for every iowa poll looking up, republicans will tell me look at the emerson poll where trump is up double digits in iowa. when you talk to democrats, no

one i spoke to thought harris is winning iowa. they said this might be indicative of a moment of time of individuals going to the polls on the upper midwest. jonathan: look at the moves in the barnyard -- bond market, 10-year down right now most 10. it is quite a move this morning. lisa: it highlights how little people want to lean into risk. there is a question around how much polls are getting things wrong. everyone agrees polls are not correct. which we are there going to swing? there's also a question of what the narrative is an morgan stanley said be where the hot takes because no one knows anything. this feels like a market where nobody wants to belong anything but everyone feels they do not want to miss out on something but there is no certainty. annmarie: this is a fitting way to end this election cycle.

is it an outlier? how has the election cycle been? it has been unparalleled compared to any in american history given the top of the ticket on the democratic side changed this summer and the republican nominee survived two attempted assassination attempts. we have never seen an election cycle like this. lisa: it is potentially unprecedented when it comes to how close polling has been. i was looking at races with similar closeness, but even there there was more fluctuation. reagan versus carter -- these are the corollaries people are looking to. jonathan: nbc poll released, the race deadlocked. coming up, we catch up with j.p. morgan asset management as trump trades unwind ahead of election day. some u.s. polls begin to shift toward harris.

we begin with traders starting back bets on a trump win with election day one day away. j.p. morgan writing, risk reward is not great to trade. some market reaction was because a trump win was a surprise. this time, we think they move in the 10 years to do with a trump sweep being priced in. would you say some of this move is just rebalancing some pricing around that story this morning? >> i think so, but it is not that much. if you look at what happened after the payroll report, we had a weaker payroll report. it is still a story with the job market and that very strong number being offset by what we saw last month, so the interest rate still rose. we had the initial reaction of lower rates and than i am scratching my head the rest of the day as rates rose because i think the market said it has not been about the economy.

it is all about what happens going forward. what is the policy risk? that is why those interest rates rose into friday. i still think we will get a reaction whenever we know the outcome of the election, but it is not very asymmetric because i think we are pricing in a slightly higher chance of a republican sweep coming down in the last few hours, but it is still 55-45. jonathan: the biggest risk was re-excel the race in of the economy. do you think we can park that fear based on numbers we saw friday? >> from the economic momentum, yes. from the policy side, that is where the big question remains. if you listen to the campaigns, you can potentially say you can

really get that re-acceleration because you can get fiscal stimulus, wherever that comes from. i would argue no administration has the kind of physical space or inflation space that existed in 2016, so i think they can try and the market will say, not so fast. i thing interest rates will rise. some 4% 10 year is ok. 10 year real rates are close to 2%. that is restrictive. the fed believes it is restrictive. does the fed keep cutting rates if you get fiscal easing? not so much. if i could fast forward six months out, i would say irrespective of the election outcome we are not going to get a significant sweep, but is that the administration ability to do it? or is it the market saying not so fast, interest rates are going to reprice? and that is going to put a lid

on how much any in ministration can get done? lisa: is your argument that everyone is getting this wrong because there is not physical space to really be expansionary in the way some people think? >> i would say irrespective of the outcome you are not going to get much fiscal stimulus because the market is going to stop it. whether risk assets are ok -- look at the fundamentals of the economy. soft landings are rare and we have gotten that. i think starting to cut rates is part of it. the fact that households and companies did the right thing when interest rates were low. there is the savings buffer, so i think the economy supports risk assets. whether you get there from fiscal -- let's say you do not get fiscal and the fed continues to cut rates. we can maintain that soft landing. lisa: at a certain point, you

have to wonder whether this actually is a moment that can change the trajectory of the u.s. economy. that is one argument people have because momentum is your friend. is that your belief, that this is not as momentous a moment as people think? priya: if interest rates rise too much -- we are pretty close to that point because what has happened, so i think it is momentous if interest rates rise because i think the economy -- we are all sensitive. there are lags. i think we are at the point where enough time has passed with interest rates being high that if you do not get a rise in rates i think then it threatens the economy and risk assets, so it is momentous if real rates continue to rise. if we stay around here i'm a i

think the soft landing can be maintained. are we going to get 20% returns? i think not. i do not see a big correction. i am sounding biased, but the bond market matters. annmarie: you did mention policy. let's talk about the big fiscal milestones. one is the debt limit. at the end of next year, the trump era tax cuts expire and some provisions in that bill. how do you think congress deals with this? priya: i would argue both sides have an agreement that people making less than $400,000, those tax cuts should not be allowed to expire. that is the easy one. the rest of it is where you need some pay force and that is where it will matter. if you have a sweep, that gets extended, but if you do not

there is a chance those tax cuts expire. i'm not going to say people like to pay taxes, but is the impact that high for people making $400,000? we are seeing a bifurcated economy. monetary policy is not restrictive for the higher income bracket. if they have to pay more taxes coming they have wealth effect in terms of what is happening with the market. i do not see that is being such a big economic impact. annmarie: talking about the debt ceiling, it always gets done but the fights have gotten intense. >> if you have a divided government, it is going to be intense. the treasury has extraordinary powers in terms of trying to extend it for a couple months. they can do things. i think we are looking at a summer time frame. in 2011, it was the last time we had such a contentious fight.

is that the way out? the sequester did not continue, but i can see congress saying let's not allow spending to continue to get out of hand. we have a long-term fiscal sustainability problem and the market is telling you that. this might be a chance -- i am trying to find a positive here. jonathan: what you are saying is new, that the bond market has potential of acting as a regulating force on the omissions of washington, d.c.. that is a fairly new phenomenon for america. priya: we have not had bond vigilantes in place for a while, but with fed funds low it is hard for bond vigilantes now. even under the fed scenario where they continue to cut to 3%, that is higher than zero, so the bond vigilantes are coming out of the woodwork. we saw this with liz truss. you have seen it in emerging markets. i would say the u.s. is a little

less vulnerable than the rest of the world because the dollar is still the safe haven currency. i do not think we can take it for granted, but the mod market -- bond market saying this is unsustainable. you have to do something. otherwise, interest rates will rise to the point where it chokes growth. jonathan: it is good to see you. we will see you again this week. vigilantes on the sidelines. we are down 10 basis points. with your bloomberg brief, here is dani burger. >> security fencing was added around key locations in washington, d.c.. the secret service erected new fences around the white house and vice president's residence. district authorities are preparing for potential unrest following the election. washington's police chief said he knew of no credible threats. the wife of j.p. morgan's top

executive canvas voters in michigan in support of harris. jamie dimon has declined to public endorse either candidate, pledging he would work with whoever is elected. she is a long time donor to democratic candidates. according to axios, she donated $250,000 to harris in the democratic -- and the democrat national committee. ryanair shares are erasing earlier losses, cutting the passenger growth target for next year because of delivery delays the company said its outlook is dependent on boeing ending sooner rather than later. the ceo will join at 8:15 eastern. at conversation. jonathan: as are we. two hours away.

next, one day to go. >> we stand on the verge of the four greatest years in american history. watch. it is going to be so good. >> we will win because when you know what you stand for you know what to fight for. jonathan: live from new york city, good morning. ♪

jonathan: i know we often sit here on a monday morning and say what a week. what a week. election day tomorrow. federal reserve thursday. equity futures positive. this move in the bond market down 10 basis points on a 10 year. we all saw that over the weekend.

the bond market opening up in a bit. >> in betting markets, harris has the edge at a time with the iowa poll showed the kamala harris -- that kamala harris did have a three point lead in iowa, a state that has gone republican the past two elections and a lot people thought was in the bag for trump. >> we stand on the verge of the four greatest years in american history. it is going to be so good. it will be nasty a little bit at times and maybe at the beginning, but it will be something. >> we will win because here is what everyone here knows. when you know what you stand for, you know what to fight for. we have an opportunity in this election to finally turn the page on a decade of politics driven by fear and division. jonathan: trump and harris making their final appeal to voters before election day

tomorrow. both campaigns targeting critical swing states. a flurry of poles, with one shaking up the conversation. the des moines register showing harris leading in iowa. drawing is now from detroit, michigan. >> harris is in michigan but she wanted to spend the rest of the day in pennsylvania, focused on shoring up that blue wall. pennsylvania is the biggest of the seven swing states that has the most electoral college votes, so it is in the crosshairs between donald trump and harris. something notable yesterday about her rhetoric is she is focused on making a case for herself. she did not mention his comments suggesting that talking about guns trained on former congressman liz cheney. she has spent the past couple

days really -- she did not do that yesterday. she was focused on her swing state travel, so her advisor tells me she is finishing this the way that she started it, making an affirmative case for herself, telling people about her policies. that is something voters want her to focus on. people know about donald trump. it is sort of built into his character. you heard her talking in that clip about how donald trump has run for all most a decade now. she has been in the race for only three months, yet she says momentum is on her side. lisa: what is the team around her saying about that iowa poll? do they have hope that she can flip this state? akayla: i do not think democrats are paying much attention to this iowa poll. they are hoping it has suggestions for other swing states, that harris could be performing better with moderates. that is what we are watching in

this battleground states and particularly the blue wall, which most say is her best path to 70 electoral votes. she needs that electoral college foot in nebraska. that is the path they are focused on now and most polls show her performing better there and trump are pouring better in sun belt states. jonathan: leading the coverage of the harris campaign. i can tell you this bond market seems to be paying attention to the iowa poll. are you? >> absolutely. that was a shocker. it shows trump -- harris up in a state that has been trending steadily to the right over the last couple years and it is a plausible result. it is the first one that has shown harris with a lead in iowa, but iowa is not as red as it looks. it is a more moderate republican state. obama won it in 2012 and it is

only during the trump euro that you have seen rural parts of iowa flip to republicans. it is possible that what we are seeing now is a realignment. harris was particularly strong with women. iowa passed one of the more restrictive abortion laws in the country with a six week on abortion access and that has been the subject of a flood of ads in the state over the last several weeks, so the idea this could have shifted harris's way over the course of the campaign, where donald trump is on the ballot for a third time and some americans are tired of the sky, is plausible and a bad sign for the trump campaign. annmarie: emerson college had trump up 10 points in iowa. how do you make sense of this ahead of tomorrow? jon: it is tough and there are conflicting signals, most of which show this to be a tie or tossup. one thing about the poll is if

you look at her track record over the last 20 years she has almost nailed the margin in iowa the emerson poll, they do not have the same track record in the state. i am not convinced that harris is going to win iowa. she is on track for a massive -- i think this is a poll you have to take seriously. it provides the clearest signal yet we have seen that this race is not a tossup but is one that would favor harris if true. annmarie: this could be indicative to the upper midwest, especially white women. do you think this puts her in better position in a place like wisconsin? jon: wisconsin is demographically very similar to iowa. i think that means the rural parts, if this poll is true, is an indication that the rural parts of wisconsin and

potentially of michigan are moving toward harris come up being led by women. you look at the iowa poll, 51% of harris voters said defense of democracy was their top issue and about a quarter said abortion was their top issue. i think defensive democracy codes as i just want to vote for harris because i do not like trump, but the abortion issue is a huge turnout driver. wisconsin does not have the same abortion law iowa does, but there a least a good possibility that the results are correlated showing harris with more strength in that rust belt than other polls are showing. >> tomorrow is not election day. it is the india voting. almost half of americans have voted versus the total that voted in 2020. what can we glean from how many voted early? does that give us a sense of who has the edge? jon: it does show enthusiasm but

people are gravitating toward early voting. i voted early in the cycle and i think that is a growing trend in sun belt states and arizona and north carolina. you are seeing people do this more and more. it does show enthusiasm. we could get turnout levels that rival 2020 turnout levels, when about two thirds of the country, eligible voters showed up to vote but i do not see clear signal about preference. the only place you might see a clear signal is in nevada, which looks like it is trending toward donald trump. other than that, mostly democrats still prefer the early vote so you would expect them to do better and that is what it seems like you are seeing. lisa: most likely the house will go with the top of the ticket. the senate a lot of people think is likely going to turn red. do you feel that way or have these last-minute poles changed

that view? >> pulling over the weekend challenged our view that trump is the moderate favorite. i still see him as slightly ahead here. harris is the vice president of an unpopular administration. top issues are still immigration and the economy, but there is a plausible path for harris to win this thing. i am feeling worse about my conviction about trump, which was already low this morning, then i did friday morning. jonathan: it is good to catch up with you. i want to return to this move in the bond market, yields down by 10 basis points. this is off the back of the weekend's news. half of the move over the last month or so was down to trump potentially winning the election and leading potentially to a red sweep. much of that move was independent of the polling we have seen, which indicated the race was still very tight. the poll over the weekend,

whether it is not lie or not, is enough for a lot of people in the bond market to say let's rebalance things a little bit into tomorrow night. lisa: how many notes did you get over the weekend? this poster has gotten it right for every election going back a long time. you have to sit up and listen and the market is on the wrong side. jonathan: yields are down 10 basis points on the 10 year. we are down five by the front end of the curve. next, the state of the u.s. labor market going into election day. ♪

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jonathan: the first back-to-back weekend loss on the s&p 500 going back. the nasdaq up .1%. this is where your attention is this morning, down to the front end by five. the 10 year after a move off a little more than 14 basis points higher last week even with the noisy downside on payrolls. seeing two thirds of that move back this morning in the last few hours. >> a lot of people are tying this to the weekend giving harris the edge in iowa.

what exactly is the trump trade and what is the harris trade? how much could these treasury yields rally if harris does win or is this a major response to deep risk after all the selloff you have seen in 10 year yields on the flipside how much do you see yields increase of trump wins and the composition of congress is different than people expect? these are the questions people are mapping out for election night. jonathan: is that what we are doing tuesday night? lisa: there are a lot of people who will be grumpy wednesday regardless of who wins because they will not have slept. jonathan: might be a few of them sitting around this table. what is a trump trade? i will show you a trump trade in reverse, a one's percent move in mexico's favor, a stronger peso this morning. lisa: a lot people say it is a key trade for the trump potential victory since tariffs

on mexico could hurt that country. it is one of the favorite pairs. long dollar is another one. long bitcoin. short bonds. these are the trades you see coming out. will they hold past that knee-jerk reaction? jonathan: i am looking for the financials as well. big bid into the bond market. under surveillance this morning, the latest polls signal a tight finish with one day to go until election day. the final poll from abc news giving her a 49-46% edge nationally. a survey showing harris ahead in five of the seven swing states and we still have to talk about the big outlier, the pull from iowa over the weekend. >> it has harris up for the first time. in september, trump was ahead. democrats i am speaking to our saying we do not think she is

going to win iowa, but what they want to lean into is the fact that maybe this does signal that harris has strength among white women in the upper midwest and neighboring states like wisconsin. that is what they are taking away from this. when you listen to speaking about the pull over the weekend, where she saw a bright spot was not just with women but women over 65. this is a cohort of the electorate that comes out to vote early. >> i'm curious to see how much she continues to be scrutinized in terms of her accuracy. nonetheless, what this highlights is everyone expect the polls to be wrong. the question is in which direction and why because they are all based on models that have to make assumptions. the key issue is you cannot make assumptions with someone who has not been tested. i am talking about kamala harris , who is new to the race. annmarie: republicans and allies

are saying selzer had donald trump winning the primary in iowa in 2016 and he did not win the primary in iowa in 2016. so everyone will be poking holes, but this is someone respected and democrats view this at the end of the race as something shifting momentum ahead of tomorrow. jonathan: we need to point out what is happening with the commodity market. rn is planning an attack on israel. the wall street journal says iran is not running to limit its response to missiles and drones. >> we heard from the iranian foreign ministry spokesperson today, saying we will utilize our material and spiritual resources with full strength in our response to israel. they say they are planning a counterstrike. we have heard this before. there was reporting that maybe this would come before the u.s. presidential election. i do not think tehran will make

that move ahead of a very consequential presidential election when, if you look into how the biden administration feud tehran and how the trump administration governed in the past, you would think they would actually want to -- a continuation of the president instead of going back to a trump administration, but the wall street journal says there will be response. >> people are wondering whether the u.s. gets involved if there is a response because the u.s. came out and said we restrained israel the first time around and will not be able to do it the next. jonathan: chinese lawmakers are gathering to sign off on a fiscal package worth trillions. the meeting is expected to round out the effort to lift growth since the pandemic. we are all wondering how election dependent >> the decision might be. i love this meeting starts today and ends friday. they start discussing potential

options and then figure out who wins. tomorrow there is a watch party and then they figure out what they are going to do. people do not expect them to come out with as much as the market needs. the two prongs will be support of the housing market and propping up consumers. they have shown reluctance because of two things. first, hard to see who needs it and has willingness to spend on the discretionary side. then with in they can. that is an issue a lot people are wondering about. >> my question with a fiscal stimulus, is it going to boost what you are seeing? maybe they need to extend the meeting past friday. maricopa county is saying we need 10 to 13 days to count ballots and explain who won maricopa county, which is 60% of the vote. i am not sure by friday beijing will have an answer. jonathan: traders bracing for a

busy week with the economy at the epicenter of the election. nela richardson of adp writing, much has been made of inflation and consumer's content, but for the past two months people are feeling more engaged in their work. nela joins us now for more. i would say it is not because they are losing their jobs so they are saying i am more loyal to you. what is this really about? nela: the fact that employers have shown up to keep their workforce. we saw that turnover in 2022 and 2023. you do not see that turnover now. the rate has become the big stay. people are more engaged than they have been in our survey and they are trying to make it work. engagement means you're more productive, so it is not just fear of a layoff.

if you look at initial jobless claims, that layoff fear is not in most employers' handbooks now. it is about the workforce feeling more confident than they have. >> is that resilience in the labor market? nela: i think they have seen real paychecks go up. let's not underestimate the cost of inflation on the worker. getting real income seeing actual opportunity, that is part of the puzzle, especially young people getting promoted. they are been promoted at the same rate as boomers. there are more boomers who are more boomers were managers, but gen z is making inroads. the workforce has changed in the workers' favor. lisa: why do you say it is unlikely that pay increases will be a source of inflation going forward? >> we are seeing patrons down.

this is an economy -- it is a murky picture with government data, but adp is clear. we saw strong growth across several sectors but we also saw pay growth continue to decline. for workers, real wages are still growing but for firms it also means they do not have to bump up pay to get that talents the way they used to, so we are seeing labor shortages over the past two years have all but disappeared. at the same time, pay growth is decreasing and not likely to trigger another round of inflation. lisa: how primed is this market to either an upside swing or downside swing? it seems evenly balanced, yet here we are at a pretty momentous week on two fronts. we have the election and the federal reserve and a question about the more that they cut --

does that push the market more to the potential way of seeing more inflation particularly when it comes to wages? >> it is murky after that jobs data. if you take the totality of data, it is clear this is not a perfect economy but it is a growing one. that cannot be underestimated. with the narratives about recession, hard landing -- this is an economy that has stuck is landing. into this week, we actually know that the economy is in good standing and that is a good start for any administration and for a fed rate cut, so they have -- whatever decision happens. annmarie: who holds the leverage right now? employers or employees? nela: it is more balanced. employers always have the leverage. they decide the paychecks.

most of us are at will employees . >> boeing does not seem to have leverage. >> we are seeing more balance between workers and employers than over the last three years. >> you said going into next year , dependent on within ministration is, they are set up for a good economy. what makes you nervous about 2025 and the labor market? is it the immigration story or things like tariffs that can mean higher inflation? >> i am worried about the manufacturing sector. this is a sector that has not really rebounded even with the latest fed rate cut. there has been policy and investment, but you are not seeing it translate into job gains. survey evidence still looks downbeat and it takes up a trend we saw before the pandemic when the sector was shedding jobs.

into 2025, i think are good sector needs a look at. it is not a pandemic cause anymore. jonathan: i am going to form a union for broadcast anchors. lisa: the new york times staff is going on strike on election night potentially. there is this question of whether they can gum up the system at one of the most high-traffic moments for them. if you want to go on strike, carpe diem. jonathan: show your leverage. it is good to see you. let's get you an update on stories elsewhere with your bloomberg brief. dani: oil prices are jumping nearly 3% for crude. opec-plus agreed to push back its december production increased by one month. tensions are heightened in the middle east again. iran escalated his rhetoric against israel, warning of a

crushing response. the wall street journal reported tehran told allies after tuesday's presidential election but before the inauguration it would not be limited to missiles and drones, unlike prior strikes. london trade following after a report. montclair may bid for the reddish luxury retailer. industry sources say the lvmh boss is in favor of a deal. one of the greatest forces in pop music history has passed away. record producer quincy jones died at the age of 91 at his home in los angeles. he rose to prominence are raising -- arranging jazz productions before collaborating with frank sinatra and sammy davis junior. he went on to reduce the most successful albums of michael jackson's career.

his career lasted more than 70 years and includes 28 grammy awards. that is your brief. jonathan: the word legend has lost its meaning over the last few years. that was one. next, prioritizing america's economy. >> the president has the right to impose tariffs on these countries that are hurting us. >> investing in american industries is the way we are going to win the competition with china for the 21st century. jonathan: that conversation up next. this is bloomberg. ♪

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with the trump trade. rebalancing some of those trades this morning going into election day. yields are lower by 10 basis points. in foreign exchange, the dollar is weaker, including the euro. >> it seems to be a big readjustment after a real trump trade that plowed into the markets over the past few weeks. our people actually leaning into this poll in iowa that seems to put harris ahead? how big could this be if we do get a definitive result wednesday? jonathan: a big move, the mexican peso a lot stronger this morning. under surveillance this morning, prioritizing's >> america's economy. >>the president has a right to impose tariffs on these countries that have been hurting us.

they end up closing -- everybody loses their job. >> doing more investing in american industries is the way we are going to win competition with china and the kind of leadership america deserves. jonathan: harrison trump promising to fight for a better economy for americans as polls show any lead within the margin of error. navigating election scenarios, writing a global equity strategy for trump is premised on a stronger dollar and a value rotation. the hair strategy is premised on a weaker dollar, potential tax hikes, and a tilt toward climate from the policies. welcome to the program. giving -- given pulling over the weekend, how are you advocating for what clients should do to navigate the next 48 hours and beyond in markets? >> to us, within the equity market the most important call

has been overweight the u.s. versus the rest of the world. like all these trades you have been talking about, this trade has also been 7% higher. there is a sense of the market taking off a bit of this profit so it up 6%. a lot of trump win is still in the prize. that means positioning is on the u.s. versus europe. is one of the most productive positioning's we have been having since the pandemic, so there is a bearish set up on investors going into the election day and, as polls suggest, anything could happen. >> i would love a european perspective on how nervous investors are about potential trump victory.

are they rethinking domestic european allocations because of it? how is the approach changing? >> european investors and global investors have been nervous about european equities but that has already started around june with political risks of the election and earnings for europe coming off substantially so we are entering this pre-election period with a lot of bearishness and underperformance underlying recession for many sectors in europe, which leaves us in an interesting set up if trump was not to win. we really do not know, but the way i think about global equities, it is the u.s. versus the rest of the world and investors argued with us about this, that equity allocations in

europe looks most interesting now because it has been so beaten up beforehand so everything in equities is about changing balance of risks. this balance of risks has been improving and has not shown up in performance, but should harris win that is a very positive trigger for the rest of the world and europe in particular but on the other hand if trump wins a lot of the trade has been already played out in europe. continental europe looks less attractive within the european equities and the u.k., which tends to be more defensive and has energy weight in it, so the ftse 100 looks more interesting to go after if trump was to win.

lisa: i want to go to what you expect in the immediate aftermath of result from the election. a lot of people will be up all night trying to figure out how much volatility there is and how they should play it. are you saying if it looks like harris is winning you could see a migration away from u.s. equities into european equities? is that your base case? >> the base case, yes. the rest of the world would outperform, should harris win. in terms of volatility, the trump trades have gone so fast, so quickly. investors are anticipating higher volatility that is already playing out, especially last week. it is historical trends, so it is playing out, but i think investors are in a sit and wait

mode. we are so close to the results that they will take action once we get results. lisa: there is a fly in the ointment, which is typically momentum tends to continue after an election regardless of who wins and there is also a sense that if you look at fiscal stimulus and deficits the trend is the same across the world regardless of whether it is the u.s. or europe with the exception of germany. how much are we talking about a world looking to stimulate cut rates and do the same and leave everybody in the same place? >> that is a fair point you are making. election is an important event, but it is about everything else as well that will push equities higher in the months to come and one thing is certain, that yields will stay higher despite cuts on the forecast, which will

still be high. if this trend of economic surprises around the world continues, positive surprises, this would be an interesting set up for the improving balance of risks, or the rest of the world's equities and risks should be better positioned. jonathan: appreciate the perspective on the others of the atlantic. we will keep coming back to the bond market move. we are down 10 basis points. one of my favorite commentators saying 10 year yields down 10 basis points. if you are pricing mortgage today, thank ann selzer. what you need to know about the poster? annmarie: she is highly regarded. she has been very correct on presidential elections. this is a state that trump won in 2016, 2020.

cook political report has it as solely republican for this time around. u.s. republicans about her, they will point to polls she got wrong going back to the 2016 primary where they had trump winning the primary but ted cruz the primary. they think she is drawing out that democrats are holding onto is harris may be doing better with women that are 65 and older. they are coming out to vote and they vote early. maybe it does not show her winning iowa but maybe it shows strength in wisconsin. jonathan: it is enough to rebalance positioning this morning. next, we will catch up with tom bonier and dan. the second hour of bloomberg surveillance justn around the corner. in niles ♪

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>> the chance of blue sweet seems a lot lower than a red sweep. >> the market will suss it out depending on how ballots are coming in. >> the election will have three key policy implications. tariffs come immigration come and fiscal policy. >> i don't think any of us expect meaningful changes in policy. >> within checks and balances remain in place on whoever gets

in that presidential seat. >> this is "bloomberg surveillance" with jonathan ferro, lisa abramowicz, and annmarie hordern. jonathan: let's try and frame this. the eyes of the world and financial markets worldwide looking at seven swing states, handful of counties, couple of hundred thousand voters in the united states of america and the decisions of those individuals over the next few days could totally reshape expectations in financial markets in the global economy for years. that is what it comes down to. small margins, big waves. lisa: if you are in japan you are learning about maricopa county in arizona. here is the key issue. this is a unique race. as much as we have seen county specific areas determine the race in the past, this is potentially unprecedented in the nature of the closeness of the polls, a question about the accuracy. will we have it result in we keep having to ask that even if the market seems to move don. jonathan: equity futures

positive .2%. if you get into some of the trump trades they are rebalancing. a big bid into bonds. the dollar stronger -- the dollar is weaker and the peso is stronger. asian equities doing ok. you said japan is getting to note maricopa county in arizona. i would say global markets learning who and seltzer is over the weekend. annmarie: cities in iowa with this report coming out saying harris is ahead of trump in iowa, a state that cook local report has said is solid red. republican allies of the former president say this is an outlier. ignore this. they point to the emerson poll that has trump up double digits. actually john lieber came on and said ann selzer is better.

she is a notorious pollster and her prior polls had trump up. she said this is capturing a moment. she is talking about women north of 65 and democrats are saying maybe she does not win iowa but this gives hope she wins wisconsin and this is a better bellwether. jonathan: dort bonds, longer dollar, that pull drops and you rethink things. lisa: i don't think anyone was enjoying complacency any of the trades. maybe one person said this is what i live for. other people are saying we have no edge. at a certain point it shows you how jumpy people are. i got a lot of notes in my inbox from traders, mass email saying this is a big deal, you have to reassess, this'll make big waves on monday. annmarie: where the candidates are today says a lot. kamala harris is not leaving

pennsylvania today. she is staying put. new york times siena poll says trump erased her lead in pennsylvania so they are trying to shore up early voting they are seeing that is going in trump's favor. where is trump? pennsylvania, north carolina, in michigan. over the weekend the new york times siena poll showed harris had new strength in north carolina. there is no path to 270 for the former president if he is unable to maintain control of north carolina. jonathan: he has been traveling so much. he was in north carolina and thought he was still in pennsylvania. annmarie: he said it was great to be in north carolina even though he just got to north carolina 20 minutes ago. jonathan: and a shout out to dave mccormick. if i travel that much i would feel the same way. lisa: there was an article about the snacks they like and it was illuminating. jonathan: are we down to that? lisa: they were running out.

jonathan: i doubt there were running out of everything. coming up, ed yardeni as the rally stalls and have the election. we catch up on the electric shift in harris favor and dan niles on his favorite names. we begin with stocks on hold ahead of tomorrow's presidential election. ed yardeni saying we expect the s&p might go nowhere fast over the rest of the year. the outlook for fiscal policy will probably remain unsettling after the election and the fed might not lower the federal funds rate over the rest of this year after all. ed joins us for more. why do you think we might be on a bumpy road to nowhere? ed: i think the polls will probably be wrong. right now the polls are saying neither one will win because it is too close. somebody will win. the bulls are suggesting we

could have a contested election and those can be nasty and last a while. i would not dismiss the possibility for that and that could create uncertainty about what fiscal policy will be next year. in addition, we have geopolitical risks still out there. the israelis and the iranians are waiting to see who wins to decide what they will do next against each other. meanwhile the -- i nobody yield is down 10 basis points but it is still up 60 basis points and that is offsetting the 50 basis point drop the fed gave us september 18. the bond market is saying we do not need any more rate cuts. jonathan: to pick up on the bond market move, would you say that the bulk of the move over the last month yields higher has been about potential policy changes in washington?

ed: i think they have been more about the economy and the fed. we expected some of the weakness in the bond yield in august and early september was misdirected, focusing on the weak economic indicators. we pointed out there were a lot of weather issues and strike issues and sure enough, the economic surprise index went from negative to positive. the payroll employment number was week on friday but i think that number was totally useless, even the bureau of labor statistics said they do not know whether it impacted payroll employment. lisa: you said the bond vigilantes are back and they big component underpinning what is in the yields. i am wondering what you think could happen with the options this week. the treasury department is

bringing forward a bunch of different bond sales. a 30 year auction wednesday at 1:00. how concerned are you without amended -- about a messiness on the heels of some sort of result that could spook the bond market? ed: that is the issue we have with all of this debt. it gets tested on a regular basis to see whether investors are willing to pony up and buy bonds at rates where they are today. last summer we had some messy auctions that led to a mini debt crisis. here we are. i don't know that this is a debt crisis but it is a challenge to the fed. fit officials have to recognize that while they are easing, the fed is tightening. the bond market is tightening. lisa: you have the political

overlay right now of who will win and the deficit that will expand either way, it is just a matter of whether it will expand $2 trillion or $8 trillion. there is a question of how much the economy is stable. the third question is did the federal reserve make a mistake when they cut 50 basis points? you argue on some level the long end of the bond market and tightening of financial conditions is a sign they did. you think that should affect the decision on thursday? ed: in addition to the long end being up 60 basis points from its low in september, we also have the two year up at least 50 basis points. it is not just the long end that is up, it is also the two year. that is an indication from the fixed income market that the fed eased too much too soon. i think if they did 25 basis points the market would not be reacting quite as radically as it is now.

they did 50. they signaled they think their own monetary easing cycle and they will go down to 2.9% on the fed funds rate and the fixed income markets are saying that is not necessarily the case because the economy has been remarkably resilient at they remain resilient. while inflation is almost down to target their are still sticky areas of inflation and if we have some of the more volatile components of inflation go back up, then we could have an inflation problem again because the service is sticky. annmarie: when it comes to the election, can we do scenario analysis? we know the bond traders are looking at this iowa poll. if harris were to win, how much of a recalibration can we see in the bond market? ed: again i am not convinced as everybody else seems to be that a lot of what has happened in the bond market is related to

the election. people have shown charts of the polls showing trump's chances of getting elected have increased they have superimposed the 10 year bond yield on that so you can see the correlation. i see a correlation between the bond yield and the citigroup economic surprise index. that has continued to work well. annmarie: what you give the last 24 hours the move? ed: let's see -- annmarie: so it is politics? ed: today is but i do not think that has been the case since september. there are a lot of moving parts and i will not tell you politics has not been in issue for the bond market, but again i think the bond market recognizes that whether it is trump or harris, as lisa said we will have larger deficits know matter what. jonathan: ed yardeni, great to

catch up. 10 year yield down more than 10 basis points. we can all agree on the ingredients, politics, economic data. the recipe, 500 grams of one versus 250 grams. lisa: i am bringing out my measuring tools and adding congressional composition. the jar of potential presidential margins. these are the aspects people are trying to suss out. the real issue is people would agree there is not a fully priced scenario one way or the other. the extent we have taken chips off the table there are still more to go to take out the trump trade and morty: to put on the trump trade should donald trump win. annmarie: the polls were in the margin of error. statistically these are tied. this is just the presidential race. we need to know the composition of congress to understand what kind of fiscal power we can see from either side. jonathan: yields down across the board.

with an update on stories elsewhere, here is dani burger. dani: kamala harris is hitting out mike johnson after he made comments calling to roll back at $280 billion package to boost research and manufacturing for semiconductors. he quickly issued a statement saying he misheard a question and supports efforts to streamline and improve the bill. kamala harris responded to the comments, saying it is my intention to invest in america. tgi friday's filed for bankruptcy protection over the weekend. the restaurant chain has been struggling due to pressure from increasingly cost-conscious consumers. the executive chairman said in a statement the primary driver of our financial challenges resulted from covid-19 and our capital structure. there has been a string of trouble restaurants filing for bankruptcy is this year from red lobster to tijuana flats. spain's prime minister had to be rushed away after angry mob

surrounded him and the king as they visited a town devastated by last week's flash floods. the crowd chanted murderers and hurled mud at them. at least 211 people have been killed in the flooding. the crisis puts the country's fragile system of decentralized power in the spotlight and that is your brief. jonathan: shocking imagery coming out of valencia over the last week. up next, the final message to voters. >> one of the most consequential elections of our lifetime and we have momentum. it is on our side. >> we must stop her radical left agenda with a landslide that is too big to rig. in other words, get out and vote. jonathan: that conversation up next on the program. live from new york city, good morning. ♪

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jonathan: one day out from election day in america and bond start rally. yields down 10 basis points. in the equity market, we are doing ok. and the foreign exchange market, the dollar strength gets faded. dollar weakness this morning. lisa: faded is one word. annihilated is another. this raises the question. how much of the trump trade had been priced into the market and how much is still priced in and how jumpy are investors with zero edge and razor edge polls. jonathan: we have seen rebalancing this morning. under surveillance, the final message to voters. >> in one of the most consequential elections of our lifetime and we have momentum.

it is on our side. >> we must stop her radical left agenda with a landslide that is too big to rig. too big to rig. in other words get out and vote. jonathan: here is the latest. the latest pulling from nbc news showing donald trump and, harris and neck with the close of the election one day away. when and 75 million people already casting ballots representing more than half of the total votes cast in 2020. bloomberg's tyler joins us from west palm beach, florida. tyler: i am here in front of the palm beach convention center where former president donald trump will rally his supporters tomorrow as a result start to pour in. before he gets here he is spending today crisscrossing the nation hitting key battleground states we have been watching. he will start his day in north carolina before heading to

pennsylvania for two stops, one in redding and another in pittsburgh, typically considered to be a democratic stronghold. something interesting about all of these places is they are all in counties or near counties that former president donald trump lost in 2020. clearly a bid by his campaign to shore up support and get out the vote in some of these areas where they might feel he underperformed. i don't have to tell you that at this point in the race is all about turnout. we talked about undecided voters. today it might not necessarily be undecided between trump and harris, it is undecided on if they are going to vote at all. we are seeing a surge in early voting. at least 75 million americans of already cast their ballots. that is well above pre-pandemic levels. annmarie: given he is going to some democratic cities, who is he trying to target in these final hours? tyler: exactly. recent polling shows there is

likely a gender divide going into election day with vice president kamala harris leading when it comes to women voters. we know the campaign has been trying to target younger male voters to bring them into the camp even though they are less likely to vote. polling shows they are increasingly more conservative as well as more weary about their economic status. it is going to be no easy feat. exit polls from 2020 show us only 4% of those who cast ballots in those election were men ages 18 to 24. jonathan: tyler kendall of bloomberg in west palm beach, florida. a lot of data to work through. the changing makeup of the electorate. writing "we've seen the electorate shift and harris's favor through voter registration. the challenges turning those voters out, but i would rather be the harris campaign with a bigger pool of potential voters than the gop ticket."

you have identified what you call the silver search. can you share what you mean by that? tom: absolutely. as you just heard from tyler a lot of the focus from both campaigns has been turning out younger voters. what has flown a little under the radar so far is older voters. we are looking at voters over the age of 65. we know older voters tend to vote at high rates anyhow. when we look at early voting across the seven battleground states what we are seeing that is surprising to me is turnout numbers that are exceeding the 2020 pandemic early vote numbers , especially among democratic leaning seniors. annmarie: we heard from the iowa poll over the weekend from ann selzer that she is seeing women north of 65 come out for kamala harris. is that the cohort you are focusing on and what you make of the iowa poll? tom: that is absolutely the same

cohort. when i wrote the analysis you referred to a moment ago it was 24 hours before that poll came out. it seems like there is something coalescing in a lot of different data sets at this moment. the iowa poll paints a very optimistic scenario. for the harris campaign. we know donald trump carried iowa by over eight points. seeing a three point margin for vice president harris was shocking for a lot of people. we know the ann selzer poll is traditionally very accurate. a lot of people are looking at that through the context that even if the poll is off by three or even five points in the margin, it is still a very good sign for the harris campaign. it seems to be driven by improvements with older voters, especially older women, especially older democratic and

independent leading women. annmarie: i love to talk about white women because they are the largest demographic, making up 30% of the electorate. in 2016 40% of white women voted for trump and 45% for clinton. more white women voted for trump in 2020, 53%. where you see the margins ahead of tomorrow? lisa: the potential -- tom: the potential to see a bigger swing back where democrats may do better than 2016 is based on the dobbs decision. we have seen since then, this is a limited data set, in the 2022 midterms, looking at special elections since then and even looking at the presidential primaries and the crossover voting we are seeing, we are seeing more white women, especially college-educated white women supporting democrats at higher levels than they did in 2016 were 2020. annmarie: when you look at where kamala harris is today, she is

not leaving pennsylvania. she is going all over the state. is that where you think she is the most vulnerable? tom: the map has always been the blue wall states for both campaigns where they have understood that will most likely be where it will be contested. when you look at the data now in the early vote and voter registration trends and we layer on top of that the polling data, we have seen michigan and wisconsin appear strong for vice president harris. pennsylvania is doing what it always does, which is it appears very competitive. republicans have turned out more of their voters in the early vote than they did four years ago. that said it was about a rock-bottom for them four years ago when president biden won the early vote by almost 3-1. republicans are turning out in pennsylvania are much more likely to be cannibalized election day votes. people who voted on election day in 2020.

another 43% are republicans who voted by mail last time around. only 7% are new voters. it looks close. both sides are contesting it closely. i think it is still most likely to be the tipping point state. jonathan: appreciate your perspective. tom bonier there. perspectives on reading the tea leaves. then you have things like peanut the squirrel in new york city. it became a thing over the weekend. annmarie: peanut the squirrel. this is a squirrel that was living in new york and has been a pet for this individual for seven years. the dec of new york state came in and took the squirrel, killed the squirrel, there is been an absolute outcry on the internet and the airwaves. he is going on tv to talk about the fact this is unacceptable. jonathan: could this tip the balance in the election? annmarie: i am not sure. jonathan: i want to see lisa's

face. lisa: i cannot believe this is the state of the election. our people really running out of things to talk about? annmarie: this is not just any pet squirrel. he is an instagram star. lisa: it is the tipping point for america. annmarie: you cannot forget fred the raccoon. jonathan: serious stuff. up .2% on the s&p 500. in the bond market yields down 10 basis points. bramo will never forgive us. up next, dan niles of niles investment management. this is bloomberg. ♪

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♪ jonathan: an update. they argued for three minutes straight about a squirrel. i wish the cameras rolling, that's what happened. annmarie: it's not about the squirrel, it's about the focus of it as an election issue rather than an anecdote jonathan: you were involved, very engaged. lisa: i am engaged, i think it's important. jonathan: equity futures on the s&p 500 shaping up as follows. looking something like this. equities firmer by about 1/10 of 1%. the big move this morning is in the bond market. two-year, 10 year, 30 year,

yields down across the board. some of those trump trades start to rebalance through this morning. lisa: citigroup came out saying to you risk higher yields with pre-election trends? cleaner positioning support higher equity markets postelection. basically, everyone piled in, how much is this just taking some chips off the table vs. actually believing harris has the upper hand? this is going to be really messy for traders were trying to pick sides on that. jonathan: turning those trump trades upside down. check out the dollar now, weaker against the euro. weaker against the yen. much weaker against the mexican peso. some classical trump trades. lisa: i'm watching things like the dollar against the peso. looking at things like yields in terms of what tea leaves people are reading for the election. not necessarily their views on peanut the squirrel. i'm not getting back into that but here's the issue. jonathan: you brought it up again. lisa: is there going to be a

tariff on mexico, is there going to be a huge wall that could put up, are immigrants going to be deported or it will immigration be really curtail? those are the issues that are swaying the election. annmarie: if you want to make peanut the squirrel an election issue it is about the heavy hand of the government and should they be allowed to come into your home and sees a pet that you had for seven years. that is the crux of the story. jonathan: zeitgeist, the dollar weaker. under surveillance this morning, let's turn to the commodity market. oil prices rising amid the -- production delays from opec. wall street journal report that iran's supreme leader is weighing retaliation against israel for its strikes in the country last month. annmarie: the islamic revolutionary guard said they would certainly respond, a retaliation to what israel had done to them just a few weeks prior. details cannot be discussed but it will certainly be carried out. what we are also seeing in that report is it is not going to

happen before the u.s. election but it would happen before inauguration day. regardless, the biden administration will have to deal with this. lisa: essentially everyone is waiting until the election to engage in you are not necessarily going to have such a strong hand in the white house considering it will be a lame-duck president. so how much geopolitical risk gets reintroduced immediately following the election, especially with some of the threats we are hearing that may or may not be validated, but nonetheless carries a pretty big impatience for oil and for peace in the middle east. jonathan: it always is, but this is why this is a high-stakes presidential election. two massive stories, one in the middle east, another in ukraine. let's make it three, what happens with china? annmarie: what happens with china is going to be very interesting depending on who wins the election. in the wall street journal recently donald trump was asked about if china were to invade taiwan and he said xi jinping would never do it because he knows i'm expletive crazy, using a curse word.

if it is harrison is basically a continuation of what we are likely seeing from the foreign policy world and the democratic space. it finished trump, and a lot more questions get reintroduced. jonathan: election day in america just one day away, trump and harris on course for a photo finish with the two candidates locked in a dead heat both nationally and across key swing states. lisa, as you suggested, we keep saying election day one day away. but people have been voting for quite a while already. lisa: we already have almost half of the votes in. if you superimpose it into 2024, the key question here will be what tea leaves with the markets be looking at the night of the election? one warning that i've seen time and time again, don't be subject to head fakes because you are going to be hearing a lot of different things coming out, and don't put a narrative into the market. right now it does seem like an

all-nighter and a race that is closer than possibly any other race in the polls in history. annmarie: and if you think this seltzer paul has some way to a, and she predicted trump would win iowa and 2016, that came out three days before the election and showed trump with 46% of the boat and clinton with 39%, so she does have a track record. republicans have poke holes in this with me all week, saying you have to look at the primary of 2016, you have to look at what she is saying about one of these congressional races, that republican's down 16 points, the republican won that race two years ago up seven points but the fact of the matter is there could be this shy voter people have been talking about. is the polling underestimating first-time registered democrats or younger and older women? jonathan: can you imagine being one of these swing state voters in one of these target counties who have been absolutely bombarded now for weeks nonstop with campaign ads. annmarie: not only that, have you heard about what some swing

state voters are doing in a place like michigan where they want a protest vote on harris but they don't necessarily want donald trump to win. what they are doing is finding a voter in a state that doesn't matter, say new york, and same do me a favor, write in a candidate and i will cast your vote for harris here in a state like michigan. jonathan: or register to vote in the hamptons this time around. annmarie: people are registering to vote in the hamptons because they want to get john avalon elected. he's a democrat but normally they would vote in new york city and they feel like the vote in new york city doesn't matter, but maybe they can go out east on long island and try to help flip the district. >> speaking of campaign ads, nbc filing a notice with the fcc to provide donald trump with equal time on the network after a surprise appearance from kamala harris on saturday night live over the weekend. nbc reportedly airing 90 seconds of trump addressing voters during his coverage of the nascar playoffs on sunday following a post on x from the

sec chair. lisa: this is coming from commissioner brendan carr as well, criticizing harris's appearance even though it was like 90 seconds on saturday night live saying that broadcasters are required to give rival candidates equal airtime if they want it, so of course they gave trump some time as well on sunday because of this. i would also ask historically, trump has been on s&l a lot more than kamala harris. he went there in 2015 and even prior to that. jonathan: they use to absolutely love him and now they don't so much. a week of earnings from microsoft, apple, amazon and meza, beating expectations that failing to justify. dan, it's been too long. back to the program. a ton of earnings from big tech over the past week, what stood out for you? >> the thing that really stood out was that a lot of the trends that we saw you saw sort of

repeated in the september quarter, and in general you saw some haves and have nots coming out of it. for me, the names that i liked at the end of the year don't really change that much. we like meta and amazon coming in, those are still two of the favorites for the rest of the year. and then nvidia, obviously the ceo talked about insane demand about a month ago with the new chips coming out. i think that's going to be continuing at least for the next three to six months. i know everybody is caught up on the election, but don't forget the market did really well over 20% last year. it is up about 20% this year. i think the election because of some volatility but then i think we go back to focusing on fundamentals as usual once we get through hopefully this coming week. jonathan: let's talk about the next week.

do you think about direct policies that could hit tech firms or do you think the indirect consequences of a policy hitting the bond market could do something to tech stocks? >> i think if you look at tech stocks, the current administration is basically going after almost all of them. in terms of trying to break up google. you pick your favorite. if there is a change that is beneficial to tech stocks. if there isn't, these companies have been going through this for a while now. it is going to come down to how is ai working for you, how much are you benefiting from it or how much is it hurting you? the bond market is a little more interesting because people may forget that you had an election a couple of years ago in britain , and the candidate wanted to put in price controls on energy, cut taxes, the deficit was going to go up a lot for them, and the bond market absolutely rebelled,

and that presidency lasted 50 days. when i look at the bond market right now before the fed cut, 10 year treasuries were about 3.65. last friday they closed at 4.38. so you look at that combination of the fed, plus both candidates no matter who you pick, the deficit is going to go up a lot. you wonder is that what is going to cause the real problem on the others of this? it's something i'm watching but obviously being the world's reserve currency which the u.s. dollar is, it has lots of benefits. this can go on for longer than we all imagine. lisa: a lot the ceos have been doing these check-in calls with the former president. it feels like they are trying to hedge their bets regardless of who wins, except for one, tesla. they are out there in the open, elon musk is playing this really outsized role when it comes to u.s. politics right now.

could that her tesla and demand in the united states? >> i don't really think so, because here's the thing you have to think about. when the u.s. had its first ed summit, all of the company that wasn't invited? annmarie: elon musk. >> does that make any sense in any world to not have tesla show up to an ev summit? to some degree, if the current administration stays in charge, he's going to be in the same boat that he was before. you've got to believe that every ceo of every major tech company has a favorite, whether it is trump or harris, but they are all hedging their bets with the exception of one. whether you like them or not you've got to give them credit for at least being out there and talking about it. i don't think the election or whoever wins or whoever he is going to support is going to affect the demand for cars because think about this. they already had results. annmarie: will he turn off democratic voters that were

interested in buying it tesla? >> my point is that he was already campaigning for trump and they had a great outlook for this upcoming quarter. the stock was up 20% or so after that. so you've already seen whatever impact that was going to have and i don't think it's going to really matter going forward. it's going to come down to competition from china, what tax credits are like, do they get out a cheaper model and what about full self-driving, eponymous robots in robotaxis? that is going to be the major thing that impacts tesla in the future and quite honestly on the negative side, it's got extremely high multiple. if there are any hiccups on some of those new programs, that's going to be a big deal. that's really what i'm focused on. lisa: the larger question here, how accurate are the trump trades? how much are those the areas that are going to benefit under a potential trump administration, how accurate are the harris trades?

are there any that people are categorizing that you think are wrong or overstated? >> at least from my perspective, the race is too close to call. i think as i said earlier you're going to end up with some volatility regardless of what happens on tuesday and hopefully we know is president on tuesday. and then i think he goes back to business as usual. we are going to stop talking about the race for president and we are going to start focusing on how good is consumer demand into the holiday season? what does inflation look like? don't forget the fed has a decision on thursday, i think everyone pre-much expects 25 basis points, but what do they talk about in terms of the future? so yes for a few days obviously this is going to be in the news cycle and then we are going to have some certainty. i honestly think the market rallies between now and year-end. do we get potentially pulled back over the next few days because of whatever happens?

that's very possible. but also don't forget a lot of people are de-risk going into this event. nobody wants to get blown up on the other side of this. so it wouldn't surprise me either if you see a rally because everybody goes thank god, now i know who's going to be president and i can go back to figuring out is amazon going to have a good retail season with the consumer, what is going to happen with google antitrust? because don't forget there is a decision coming out on that. you're going to go back to the sort of fundamental issues that are going to drive stock prices. >> to a lot of people looking forward to that. let's do it again soon. let's get you an update on stories elsewhere this morning with your bloomberg brief. >> israeli prime minister bennett, netanyahu's office is accused of leaking classified documents that help justify tough demands and the cease-fire negotiations with hamas. four suspects including a netanyahu spokesperson have been arrested. opposition leaders and security

experts say the leak compromise national security in the war effort while netanyahu calls it a witch hunt. berkshire hathaway's cash pile reached a record $325 billion in the third quarter. it's the latest results showing the company cut its stake in apple once again, using that cash short. they reported operating earnings that fell 6% from a year earlier as insurance underwriting earnings slump. venom three took the top spot at the weekend box office for the second week in a row. the superhero film brought in an estimated three day total of $26.1 million. the wild robot and smiled 2 followed in second and third place. the film here which reunites tom hanks and robin wright after 30 years after forrest gump was snubbed by moviegoers, opening to only $5 million. and that is your brief. jonathan: have not been to the movies for months and months. >> venom three or smile 2? laughing for? jonathan: gladiator might make it happen. if you weeks away.

lisa: i haven't been. all of the hit movies are repeat or imaginations. she hasn't been since the pandemic. jonathan: you haven't been since the pandemic? annmarie: no one's invited me. [laughter] jonathan: someone can make that happen for you. the path for another rate cut. >> the data are consistent with an economy that is still robust, and inflation rate that is proving somewhat more sticky than you would like. jonathan: that's coming up live on the program. live from new york, this is bloomberg. ♪

♪ jonathan: that was a sad ending to that segment, wasn't it. no one has asked annmarie to the movies? lisa: she has gotten some invitations. are you going to go?

annmarie: depends what the movie is. jonathan: ok, we will leave that they are. save that for commercial break. equity futures on the s&p 500 positive just a little bit. yields much lower. under surveillance this morning, clearing the path for another rate cut. >> the data are consistent with an economy that is still robust, and inflation rates are proving somewhat more sticky than you would like. and a major call for the fed to exit this notion of fine tuning and go into a world where they had a steady steer on interest rates. it should be cutting by 25 basis points for the next few meetings. >> payrolls of dancing at the slowest pace since 2020, clearing a path for the fed to continue cutting interest rates. while an adjustment in conditions does warrant less

firm policy, another loop is clearly unnecessary with the base case returning to smaller, 25 basis point cuts from here. welcome back. before we get into policy, let's start with data. how noisy was that number on friday? >> it was pretty noisy and most of the weakness can be largely acknowledged as hurricane-related weakness. and the fed is all aware of the noise that typically follows into the data reports for several months after such weather-related disasters. i do think that yes, there was a lot of noise, we have to compare it with the resilience that we've seen in the labor market for several months leading into this, not to mention the september employment report at a multi-month high. and remember, even with that top line number coming in well under expectations, we saw wages higher. he saw the unemployment rate remained steady. so it's pretty clear that the weakness in the report was more

of a one-off hurricane related weakness. lisa: we were speaking with eddie are denny earlier and he says he seeds real signs of bond vigilantes coming back and think that the increase we've seen in longer-term yields and yields across the curve is an indication that it was an error or premature for the federal reserve to cut by 50 basis points. would you agree? >> i do think the move with somewhat excessive particularly given the contrast of what we saw in terms of the fed of the economy. at the same time they opted to make that larger 50 basis point cut, they told the market that they characterize the economy is solid. they said the labor market was in solid condition and while inflation had been making improvement, they said there was still further ground to cover. there were somewhat of a hawkish tone in the statement accompanying that outsized rubbish move. and when we look at the data i think the fed assessment was more on target.

the economy does appear to be very resilient. we've seen this ongoing resilience in the consumer and we do see again that that sticky nature of inflation suggests that that 50 basis point move might have been excessive. jonathan: whatever happened to the long and variable lags? we've been talking about how the economy is set to grow, albeit at a relatively modest ace. are we just saying that the strong and that there were no long and variable lags, that the lives just are really showing up? >> along variable lags activity associated with firmness. it takes a longer time for rate hikes to filter into the economy . we have to be careful about which side the cycle we are on. now that the fed has taken this policy pivot and expectedly continues with rate cuts, but easier money policy is likely to filter into the economy at a

much more rapid pace than what we saw in rate hikes on the way up. >> if that is the concern, do you expect a skiff this week or in december? >> have essentially be a commission by the committee that that was an excessive move, that they didn't make -- me to make that large of an outsized cut. so we do expect the fed to continue, albeit at a smaller pace with a 25 basis point cut. but should we continue to see indications of strength in the economy, resilience in the consumer, sticky nature in inflation, i think the fed would look to december for a potential pause in policy adjustments. annmarie: i know it is a one-off when you look at the 12,000 jobs added on friday. if there wasn't a contact, what with the jobs number be? >> we see that we were on a very

steady path of adding roughly 200,000 jobs on a monthly basis. so smoothing out some of that month-to-month volatility, i think that with the general pathway that we would expect for the labor market, excluding some of that weather-related disruption. however the unemployment rate has been very solid at this 4%-ish pace with wages sticking at about 4%. so if we exclude the hurricane impact, i would've expected the employment report to look closer to that solid expansion that we've been seeing. jonathan: fig downside surprise on friday. lindsay, thank you. just got a note from kidde jukes, a clean sweep andy harris wind without a clean sweep remains the two most likely outcomes in our view. so a trump clean sweep andy harris win without a creek -- clean sweep remain equally likely. then it gets even harder for

markets, the most bullish and bearish outcomes for the dollar respectively. what do you do with that? that's the challenge that everyone has got. the mexican peso, because there isn't an edge, we keep talking about that. with respect to those two outcomes there is a feeling the senate will go read, and a feeling that a red sleep is more likely than a blue suite that has been baked into markets, albeit pretty significantly over the past week. plus, where to the polls get it wrong? we don't know. >> the conviction call is that it is going to be read because democrats have more seats they are defending them playing offense, but the question for the senate now is how big is the margin? 51, 54? we don't know. >> coming up on the program, we will catch up with michael o'leary, and sarah malik. this is bloomberg.

♪ >> it all comes down to the election, the race and various battleground states. >> it's going to be tight all the way through the wire. >> all of the t's are crossed

and the i's are dotted. >> we think we get a very clear result in the 48 hours postelection. >> 90 minutes away from the opening bell, equity futures on the s&p 500, firm or buy 10th of 1%. no drop in the equity market. drama and the bond market, yields down on the 10 year maturity, down by nine basis points. down by about 10 most of this morning. a much stronger mexican peso, a much weaker u.s. dollar. asian equities have done nicely as well as we start to unwind. some of these trump trades coming into a brand-new trading week. >> basically all people know about what could potentially the policy is that there is either more dance or even more debt and question is how much did yields go up to even more debt, which is the committee for responsible budget assessment and a lot of other ceos as well of trump budget being more in terms of

the deficit vs. harris. still, it is a relative game. how much are we stripping out some sort of political overlay and how much is this just the fundamental economy with a neutral rate that is much higher than it has been in the past? >> the bond market paying more tending to burlington, more attention to what is going on in iowa and this paul talking about the kamala harris is up four points. in september she had trump up four points. and then in june, it showed trump with an 18 point lead, that is when it was biden. so now you have everyone starting to think about maybe the polling even though it shows it is the next, maybe there is something they are missing and underestimating. jonathan: that polling has made some trump trades nervous over the weekend. i mentioned just moments ago, i want to share it with you. a trump clean sweep or a harris when without a clean sweep remains the two most likely outcomes and in their view, equally likely.

these are the most bullish and bearish outcomes for the dollar respectively, that is how hard it is in foreign-exchange. >> which is the reason everyone is going to be up all night trying to figure out what the tea leaves are. i question whether these are actually the clean trades if those outcomes of the likely outcomes. people have been modeling what 2016 look like, what 2020 look like. i look at a whole host of performances that someone else put out. the answer is we have no idea because it really comes to have a be surprised is on the backend. jonathan: you can question him directly tomorrow morning, 6:45 eastern time. you can question mike wilson as well. mike wilson as investors pare back some trump trades. michael o'leary at the airline cut its growth target following bowling delays. and why the trump tariff policy is one of the most underappreciated risks. we will return to that a little bit later. we begin with the equity rally going into a defining week for

financial markets worldwide with some traders beginning to unwind trump trades at the latest new york times poll shows vice president harris ahead in five of seven key swing states and one pole giving harris the edge i'll, a state trump won with ease in 2016. let's get into this. the parallels between now and 2016, how strong are they? >> not strong at all. the business cycle and earnings in interest rates will determine where a stock is traded over the next year or two. 2016, we went into that election with a lot of slack in the economy. things were slow, we had a manufacturing the session around the world. that rates were pretty low generally, the economy had a love slack from a labor standpoint. it could receive kind of a pro reflation area policy strategy. today, we don't have that slack. prices are extremely high, consumers and small businesses are much more sensitive to higher interest rates.

rising interest rates are not going to be good for those types of stocks. also the bond market now is in a much different position. we have way more debt. 2016, we had plenty of slack in the borrowing markets. today we don't have that. lisa: here's what doesn't make sense to me than about the trump trade. how can risk assets keep rallying? >> i think it depends on why they are rallying. equity markets are still nervous about growth concerns. people can make excuses for why it is better or worse but the general trend, labor is down. the equity market is worried about growth slowing and that is why the fed is cutting interest rate. the bond market goes up because growth is better, and people believe that, because the ok for equities. if bond markets go up because of fiscal sustainability issues, then it is a problem. lisa: the trump trade knee-jerk

reaction supposedly is bond yields go up and equities are particularly in the more cyclical sectors. based on the idea that you are not necessarily getting some kind of economic impulse that is immediately overlaid on the scenario, why should risk assets continue to rally if yields continue to search simply on this idea that the deficit is increasing and that bond vigilantes suddenly could be back? >> the financials are a little bit different. i think that one is fairly visible. if you have a trump presidency, maybe even a red sweep, you can get more lenient regulatory environment. that is kind of the financial straight, that is unique. we don't think the financials have really rally that much. it has been more about third-quarter earnings season without a lot of high expectations. i think there is scope for further follow-through in certain trump trades. at the same time, the other side, a lot of the negative traits have played out meaning bonds of zoloft probably too

much, and the renewables and things like consumer goods companies will be hurt by tariffs. so if harris wins, you could see a pretty big rebound in some markets. there's a lot of permutations here. i think you said that exactly right. it is all about the set up. stocks and asset prices move based on positioning as they do about the actual news. i'm looking for a clearing event. i'm hoping this is the clearing event and then we can get back to doing what we get paid to do, which is analyzed interest rates, earnings growth and multiples, trying to figure out the fundamental case here. my guess is that could take maybe a month to clear. >> when it comes to a clearing event, we agreed that it is likely either a republican sweep or harass with gridlock, republican senator? >> best of the production markets say, who in my to argue with that? it's not like it is a slamdunk. i do not agree with the view that a republican sweep of the best outcome for equities.

i think it's probably trump with a divided congress. >> what a trump sleep means a 50% tax rate. >> potentially. bond vigilantes may come for them if they try to cut taxes in that form or fashion. they are talking about at the margin trying to reduce taxes, maybe extending some things. >> the margin, the whole election has been a tax-cut election. >> but i don't think that is price. in 2016, nobody price to that until december of 2017 when the senate actually passed it. the whole year they are like, this is never going to happen. the markets always wait for the actual headwinds directly trade those types of events, particularly when it comes to congress. jonathan: you said the most beneficial, trump with divided government. can you explain that? >> they don't want one party in power. we said this all along, a trump presidency is probably more progrowth. harris of the a little less growth but probably better for

bonds. that has been the general view even prior to the last few weeks have traded through. if the margin is going to be dramatically better, i don't know. that's the problem. and let's take a step back. we are trading almost 20 times earnings. in 2016 we were trading 16.5 times earnings. you've got multiple points, we got to justify that no matter who wins this election. we are just in a totally different set of going into this. jonathan: earlier this morning, essentially said to his choppy road to nowhere, flat market into year-end. do you share that view? >> there are certainly some big swings. this going to be some big trading opportunities between here and there. i think we could see 6000 potentially and some for the clearing event. there's a lot of consternation, people feel good about things. but it is really hard for us to get past 6000, 6100 in any scenario because you're so

stressed on valuation and i don't see growth accelerating in the kind of way which would justify even higher multiples for 2025. >> can you explain what this clearing event looks like? >> know, i can't. >> could you give us a sense of what i could mean? do you see one trait in particular that you can see really getting blown up during that time periods? >> i could see many trades hitting blown up not just because of the election but because we are very stretched. your into the phone most season and people need to perform the next two months. there's a lot of things going on here. i could see a blow off some kind postelection, a clearing event, and then reality set in that we have to have some type of fiscal consolidation no matter who wins. and that's going to create uncertainty again. the other thing that is going on with the mag seven which reported last week was a mixed bag. when we have been more

procyclical, but i was worried about with they would coming with such great results that it sucked all the oxygen out of the market that didn't happen. but if you were to get a new theme for example, i can guarantee you the money is going to flock that very quickly because that is what we need right now. we need something to get excited about, you're kind of lacking that some people have it. the market will find a new, shiny toy and we will move to that shiny toy. >> right now the fed is not the shiny toy. how much does that matter to this entire equation? >> mean, wednesday, they are meeting on wednesday. they are going to know what happened. they don't have a crystal ball. i don't think the election is going to change their decision. right now it is 25 basis points. at the end of the day, the fed is somewhat on autopilot, assume

the economy doesn't take a really bad turn and cut even more rapidly. the trick for the equity market, what is the tone? the dovish or hawkish tone. is it a hawkish cut or a dovish cut? that is not a 10% move on the fed. the fed is kind of over here now, doing their thing. they made their decision. that was september. now we kind of got off of that. now it is about earnings and as we go into year-end, how does 2025 settle in for the economy, for earnings growth, and worship multiples be based on how they are interpreting the nuven bond yields? jonathan: looking forward to having that conversation with you. an update on stories elsewhere this morning, if some shiny toys, it is dani burger. >> the order of brands including the vitamin shoppe has filed for bankruptcy protection. it's back or have month of losses and turmoil. bloomberg news learned that they listed assets and liabilities between $1 million or $10

million. the company has been entangled in issues surrounding a $2.8 billion buyout that went awry after the founder face a criminal fraud investigation. security fencing was added around key locations in washington, d.c. yesterday. the washington post reported that the secret service corrected eight-foot metal fencing around the white house, u.s. capitol vice president kamala harris's residence. this trick authorities are preparing for potential unrest following tomorrow's election. at a news conference, washington police chief said that he knew of no credible threats, adding that there is no need for any alarm. maybe this is the shiny new toy. saturday night live sported a guest appearance during the opening of last weekend's show. vice president harris surprise audiences by appearing alongside her doppelganger, maya rudolph. the sketch through comparisons to a similar skit featuring donald trump on the tonight show back in 2015. inherent was called out by the chair of the fcc who said that featuring harris violated the agencies people time rule.

the networking part the air in 92nd clip of trump on sunday in response. and that is your brief. up next, the morning calls plus michael o'leary at the company cut passenger growth target for next year. that is just around the corner. from new york, this is bloomberg. bloomberg. the best ai assistant isn't one that knows the whole world. it's one that knows your world. a custom assistant, built on watsonx with ibm's granite models, can leverage your trusted data, be easily trained on your workflows and integrate with your apps. it can be tuned to do just what you need. because the more ai knows about your world the more it can help you do. ibm. let's create.

♪ jonathan: unfortunately we were on a commercial break but if we weren't, and if the microphone was on michael o'leary, we have had some interesting rings. might have been a little bit later. equity futures up by 1/10 of 1%. thank of america operating charter communications saying it sees broadband subscriber trends

continuing to improve. your second call raising its price target on chevron for 174, noting the focus on structural cost savings and spending rationalization. and finally, citigroup opening a positive watch on abercrombie and, expecting strong results when it reports later this month. elsewhere, shares of ryanair rebounding when the company cutting its passengers growth target for next year because of delivery delays from aircraft supplier boeing. michael o'leary, ceo joins us around the table. >> prayed to be back in new york. have you spoken to kelly wartburg? >> i spoke to stephanie pope on friday afternoon, is reasonably hopeful that the new pay deal vote and be approved tonight, which doesn't make a lot of difference to us one way or the other because we are going into the wind anyway. the big issue for me, how is the certification of the next seven going in the good news, the strike hasn't the way that certification, antigen still working certification.

she still expects first half of 25. i think we are still good to go on the firth of our deliveries in the spring of 2027. that is what really takes us from $200 million now to 300 million passengers by the mid-20 30's. jonathan: how are these delivery delays in your company? >> they've been very frustrating. we were supposed to grow to hunter 5 million passengers this year. next year it was two and 50 million passengers. might get to 208, to hunter seven. it's frustrating but any bizarre way might actually help our earnings next year because we will be heavily constrained in terms of our capacity growth. we had a bit of a disappointment on pricing this summer after two years of 20% increases. this year we are down 10% in the first half of the year. with real capacity constraints next summer, with interest rates easing, inflation no longer a worry, i think there is a reasonable rebound in consumer spending next year and we obviously cannot acted modestly

upward in fairest which would flow largely to the bottom line. lisa: you can see another 10% increase next year. >> i wouldn't want to put a number on it, but off a 10% decline this year i think it is reasonable to back next year that fares will be up. i would hope we recover most if not all of the decline. lisa: so why were they down earlier if there still is always pent-up demand for people to travel? why had that in such a soft patch for airlines across the world? >> certainly the first half of this year, the consumer was under real pressure in europe. i interest rate at central banks squeezing down inflation the first half of the year. we had an unusual event are sound, this dispute with the online travel agent last november. they boycott us from november and december. i think that hit us this year on pricing. we lost a lot of the curve. the advance bookings of summer holidays, people who but well in advance, they moved toward tour operators.

we now signed up approved deals with about 90% of the ota customers, and we are seeing very strong as a result. >> the larger question here, if you are depending on boeing, you are reading the news about the strike, finding out the blow-by-blow about when they could get back to the floor and produce again, do you have an alternative, are you looking at alternatives? are you thinking to yourself and i really doing this again? >> the honest answer is there is no alternative. got airbus and boeing. boeing gets all the negative pr, they have the strike. airbus is as much of a mess. they are way behind in monthly production. apparently the engines on the aircraft are duds, they're going through twelve-month repair processes. europe is an airbus marketplace, airbus are just as bad as boeing are. i'm very happy to be a boeing customer, i think the boeing aircraft is a better aircraft the newer aircraft we are taking

now, earning 60% less fuel. that is transformational to our numbers. but if another this morning and in the summer will be 9% more passengers, costs are flat. we are the only airline with flat unit cost in north america or in europe. . i think that is good. yes we take a hit in the short-term profitability but we are taking huge amount of market share of everybody else. i think it comes straight through to the bottom line. >> will this deal on the table right now get through? >> friday the think it is 50-50. very hard to see how any labor group turns down a 30% pay increase, with the ridiculous sign-on bonuses. i think they probably will target down. this is the frustration. where else do you go?

they are not going backwards. i hope it has resolved better. i think we are at the end game. it doesn't make much difference to us. i had nine deliveries in november, december that are going to get pushed out. the big issue for me, supposed to deliver 29 aircraft before june of next year. i think now we are looking at only getting about half of those. so i had to walk back my brother next year instead of 250 million to say 210 million. that number might creep slightly down. so it's frustrating, but really over the medium-term the big issue for me is boeing. i need to get the next seven certified. if they get those certified in 2025 we are looking at the livery of an aircraft in 2027 there 20% more passengers but burns 20% less fuel. i just blew up the entire competition europe. ? i want to ask another competition in the u.k.. i used to live in imply in the u.k. the government is charging two

pounds more per person. >> despond curve labor government, they got elected on the road growth, whatever it is, we are going to grow. the first thing they do on an island as we are going to put up taxes. you can't growth putting up taxes. >> when you cut capacity? >> we are going to switch it. you're going to switch about 5 million of that capacity, which maybe takes place on aircraft based in europe my into the u.k.. you're going to move that now to easily sweden, hundley, for they are abolishing travel taxes. we have the flexibility to move back capacity around. i think it will be good for pricing in the u.k. next year. bad for growth. the u.k. has no chance of growing if this idiot chancellor think that the way forward is going to be increasing tax on air travel. you want to grow, scrap air travel taxes. the brits will eventually work it out. but these guys haven't been in power for about 15 years and they are going to learn some

very harsh lesson for next year or two. jonathan: have you spoken to chancellor reit's? >> i suspect the chancellor will be having a conversation with her in the next couple of weeks diminishing rapidly. her background was in the treasury. she should understand that you really want to deliver growth in the u.k., particularly the regions. tourism is the one area you can turn on and off at the drop of a hat and her first measure is to increase travel taxes. you got to be insane to do that. jonathan: the grand scheme of things you step back and say two pounds might not sound like a lot. from your perspective, walk us through how to pounds changes the game for you. how does that ripple through the system? >> it is to pounds up in the u.k.. they are scrapping musical tax. the move now is 10 euros. so do i put another

conditionally next year or into? i moved capacity into italy. sweden, the home of flight shaming. breath ehrenberg where she got her limited aviation taxes. greta was wrong. she should go back to bloody school and stop way cutting school. so if i move an aircraft in the u.k. next year, it is not a to quick differential. that is transformative. if i can lower fares this week next year by 10 euros, i will carry many more passengers to sweden, i will carry fewer in the u.k.. airfare and the u.k. would rise. regional traffic and tourism will fall. sweden will boom, illegal boom. this is not the way forward. >> michael o'leary, continue the conversation if you like. come back to europe, we need you. michael o'leary.

coming up next on this program, stephanie roth and maybe michael o'leary if he wants to continue an office and comment on the presidential election stateside. >> i'm just looking at attractions in sweden. we can all go to the abba museum together. love it. jonathan: futures on the s&p posited by 1/10 of 1%. from new york, this is bloomberg. ♪

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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: i asked michael if he wanted to stick around to share his thoughts on the u.s. election, he politely declined and i think we are all slightly disappointed because he would have things to say. >> he pushed his chair back like this and that i think i'll pass. >> equity futures firm or by 1/10 of 1%, with one hour away until the cash open. with your morning movers, here's manus cranny. >> we had a conversation on what he really thought about the american lycan before he came into you. i think we kick off with a little the trump topline on this course. trump media down 2.5%. 1035% last week. the company still worth $6 billion on a 3000 times annual

sales and $1 million sales. 3000 times annual sales value. of course of the bond market tries to understand the unwinding of what the trump trade is, it just percolates. this is a conundrum. raising their guidance for the year to $8.40. this is on the nuclear production. so they had a real booth from the dealing with microsoft, up 26%. and why are we down a percent? because the federal energy regulator has just blocked a deal between amazon and nuclear, and this really readdress is the entire stage for nuclear eating into some of the pale hyper scalars and those kind of deals that we've seen being done recently. again, using words like normalization, but still above where the pandemic is. we are down to 2%. nine dollars, 9.27. less than a market anticipated.

and here in the united states, and canada is just below the level estimated by the market. it comes in at 2.1%. asia and europe doing mildly better, but the core here in the u.s. lighter than estimated. >> appreciate it on the equity market. let's turn the bond and take a look at things together. yields declining by 10 basis point on a tenure this morning. >> responding to that poem that we saw the weekend in isla, a real edge in the betting market that harris could potentially win, and that is really the opposite of what we've been seeing for a number of weeks. i do also just want to say given how volatile, the fact that we're seeing benchmark bonds training like penny stocks on any given day gives you a real sense of just how much uncertainty is baked into the market, and you add on top of that the options of this week, this week they are frontloaded and bigger than usual. $58 billion today.

$42 billion into 10-year note's tomorrow, that will be interesting. $25 billion and 30 year note on wednesday. when we get a result, you already have a messy market and we are talking about long-term bond yields they be interesting. jonathan: yields lower, so yield differentials line into a stronger euro and a weaker dollar. and then you've got the trade support around the president. that is planning into a stronger mexican peso. down by a 10th of 1%. a weaker dollar for a couple of different reasons across foreign-exchange. >> it has to do also with the tariffs which we are going to get more into any event, but the reason why the peso has gotten such clout. i do wonder how much this is also because people have gotten so baskets that are the trump trade, baskets that are the harris trade. we are all looking at these baskets and people are piling into the baskets. financial market for the past week or so, even longer have really been trump trade.

j comes out over the weekend and says hold my beer, you might be wrong because i have harris up three points. in september, she was down four points in the same exact holes, and then back in the summer it was double-digit in terms of how much trump was winning the state. political report has the state of solid red that she is seeing something right there in this early voting and in this part of the electorate that may is foreshadowing what happened in neighboring wisconsin, which is part of the blue wall. jonathan: something you might see tuesday night or wednesday morning. investors walking back their bets on a trump win as later heresies and within the margin of error. stephanie weighing the trump economic plan saying tariff policy is one of the most underappreciated risks of a trump administration. those ceos are worried about the potential impact of tariffs for they aren't doing anything about it yet. deveney joins us now for more. collaborate at a little bit more because we talk about tariffs every single day. what is underappreciated about

it? >> if you look at imports from china, you certainly haven't seen companies from flooding that you ask the ceo, that is one of the most concerning risks out there haven't actually been thought piling as a result and if you look at some of these trump baskets, especially the ones impacted by tariffs, they moved a little bit, but not pricing any significant risk. jonathan: what would any significant conference be? >> about a one person hit the gdp, and that is a pretty modest area. you have a significant reduction from there. >> what is the argument, how much credence to you give the argument that tariffs on washing machines and people bought fewer washing machines. how much is that going to be what we see with tariffs which

also makes this hard to model? >> if it ends up being a 60% tariff on china, we could mitigate that to some extent. we would see goods pickup elsewhere. if it ends up being 10% across-the-board and a 60% tariff on china, that would be a headwind on growth. that is the 1% hit to gdp type of scenario. it is not good for economic growth. >> how much pushback you get from people saying really, you take you seriously, you think this to the policy rather than just a negotiating tactic? >> people say that all the time, it will be that bad or maybe it won't happen, it will be negotiating. but we have to take it seriously. the one thing to keep in mind as we don't think it will happen until later 2025. when we are thinking about the next year of fed policy that is probably not going to be a real conversation for next year until i 26 kind of thing. and by the way, the fed tackle he forecast these things so they are going to have to just take the data. >> which is the people -- reason

people are wondering whether they can be some for shock later on. in real focus on mexico, this is the reason why the peso has been such a photo point for trades. do you believe that that is truly the case, that mexico could be the focal point of a lot of these tariffs because they are the entry point of a lot of chinese goods into the united states? >> it's possible that 10% would look a lot less across-the-board than initially talked about. we might see something like mexico would see the brunt of a lot of this. and probably what happened after the tariffs on china is goods shifted elsewhere, so for mexico and then they shifted back over here. that would be really, really negative for growth. it would depend on which country, the tariffs would no longer affect mexico in particular.

annmarie: looking at a country like mexico, we had nafta, donald trump came in, ripped that up. they are going to go back to the drawing board, a look at some provisions in that trade deal. given the fact that you think you might see some serious tariffs, do you think that that deal than is basically over between mexico, the u.s. and canada, or how much harder will donald trump coming in on that specific usmca? >> that is certainly a tough one and the mexico one is obviously the more challenging point here. and by the way, it's interesting because a lot of clients come to us and ask if mexico might be the beneficiary of some of this given that you are going to see significant chinese tariffs. the base case is that he will probably see something significant on china. mexico perhaps could be the next country most at risk here, but also keep in mind that trump really does --. we do see significant negative impact i think that will matter to him.

annmarie: he did come out and say something and then quickly reversed because of how the dow jones industrial average acted. when it comes to tariffs as well, the biden administration kept some of those on from the trump administration. how much impact have those had on growth? >> they haven't been all that impactful. one key reason as to why is the goods that saw 25% tariff china fell by 25%. whether it is companies skirting the tariffs or just moving production elsewhere, that is one reason why it actually mitigated a lot of the impact, because the goods that receive the biggest tariffs did see significant deceleration in terms of inputs -- imports. jonathan: we love your opinion what happened on friday. at one point with the lowest in the survey, not low enough. you are about 70 k, is that right? big downside surprise, just how noisy was it? >> like you said we expected a lot of noise and it was significantly more noisy than that.

i would look at the three-month average and make any significant conclusions. we certainly saw big impact from the weather. there was a big spike in terms of people who were not at work due to weather. so kind of across-the-board. the labor market is fine, we are looking at a payrolls trend of somewhere around 150,000 dollars in terms of overall numbers and the unemployment rate did tick up. something like 4.1%. it is going to depend from here on out in terms of immigration policy. going back to the election again which you were kind of steering away from, it's important to know. jonathan: all roads lead there. >> all roads do. in a harris administration we are going to be having support of immigration policy that we might not really need because we don't need that much more supply of labor. she could actually be disinflationary. trump would be inflationary but perhaps a little bit less so than what people fear. jonathan: or perhaps stagflationary. >> less so for immigration.

jonathan: stephanie, good to see you. on the labor market data on friday which ended up in a couple of republican campaigns on friday as well into the weekend. annmarie: it was instantaneous on twitter from the trump campaign when 12,000 was the print and they called it brutal. there is no nuance in an election cycle, especially just days out from november 5 for them to explain that this was hurricanes and this was boeing. they were just going to take the headline and run with it. jonathan: the democrats have been running around counting the pandemic losses. the job numbers back then as trump's own and things that he has to own even though we know that it was a pandemic. lisa: i kinda think michael o'leary stole the show today because he told us about sweden and the more we talk about this and looking at the swedish archaeological, i'm looking at the high coast. jonathan: is that the new canada? do you remember that? with into canada and they never did. lisa: there is the feeling that

people can't wait to see the backside of the selection. there are a lot of ways to parse it. annmarie: look at the tax rate in sweden and then tell me where you want to move. jonathan: is this the promo for tomorrow? to talk about the election and what it means for financial markets, sarah, what are you doing going into tomorrow? and i know it is super short-term and tactical but given where this market has been how are you thinking about the price action beyond tuesday into wednesday and through next week? >> stakes are high this week for three reasons and that is the fed earnings and the election. so let's start with the two more certain one for the market. for the fed we expect 25 basis points even with a 12,000 payrolls we saw on friday. earnings have been strong. did come down going into earnings season of your growing at about 45% year-over-year and about three quarters of companies are beating earnings. i think we are going to see caution with the markets, more

of a defensive trade. markets don't like uncertainty and we keep talking about which candidate will win but also when will the candidate win? there's a reasonably high chance we have a contest election and we don't have an answer for days and perhaps weeks. in the year 2000 it took 24 trading days to decide who the president was going to be in the markets were down about four to 5%. what kind of market volatility could be see if that happens this time around? >> markets have started to pre-price in trump winning. because of that poll that came out of iowa, markets are starting to price this in. this is unlike 2016 were markets were surprised by his win. and i think the issue of who will win is going to cause the markets to just go into more of a defensive mode. we are also in a different period. s&p 500 valuations are at the third highest levels in 1999. 1999 we have the s&p 500 valuation higher than today and in 2021 we did. we now have both of those ended.

so this is not a cheap market, that is going into quite a bit of uncertainty. annmarie: you mentioned the des moines, iowa poll. there's been no data, just one pole coming out of a state that many view as solid red. >> markets keep trying to trade off of the polling and as you can see they've been very markets have learned the hard way in recent cycles. i think it's just very challenging at this point. we can assume the race will be tight. there may be disagreement over who wins the race. there could be a delay in figuring it out. but eventually, markets are going to move on from the election and focus on two things. taxes and tariffs and what those mean for the economy. we heard about that from a prior guest that was on. i would say we are cautious going into the next few days and weeks. over the long-term we will be focusing more on earnings growth and what is going to drive this economy going forward which will

be employment, the consumer and inflation issues. lisa: you say that the fundamentals and raises this question. the new nam -- new normal, is it with bonds as a ballast or a risk asset? in this uncertainty, bonds have actually been the center of the volatility and expected volatility going forward. is that the new normal to expect after the election? >> we've seen rates back up in credit and that's because people are looking at fed rate cuts and assuming they're going to be and we hope for. the economy remains strong and that has caused fixed income the struggling little bit. areas of fixed income is strong, state rainy day funds are very strong. this is where you can start to lock in yields. there is a lot of cash sitting on the sidelines and we expect rates to go down for cash going forward. you can take incrementally a little more risk and locking some yields at this point in the areas that are strong such as municipal bonds. >> you said that stocks seem

expensive at a point of such uncertainty. don't bonds seem pretty expensive? >> i think it's challenging. we are not looking to take more duration because of what is going on with the economy and our forecast, we think that the 10 year got a little bit too optimistic on the downside. i think over 4% is a little bit too negative in terms of where we go. we are not taking up long-duration here, we are looking for areas with strong fundamentals. also preferred securities. we need to be selective but there are areas where you can lock in some strong yields at this point. jonathan: always appreciate catching up with you. just one final word on single names. what are some stocks you like right now given everything you said? >> i'll be watching closely today. i'm not hugely bullish, but looking at marriott to get a glimpse of the consumer and spending on travel, watching for corporate travel and how much next year, i think they are

going to report for the open and give us a good view into what is going on with the consumer and travel. jonathan: appreciate it, good to see you as always. with an update on stories elsewhere this morning with your bloomberg green, here's dani burger. dani: striking boeing workers will vote today on the company's latest contract proposal, a 38% wage increase over the years, up from the prior offer. it also allows union members to take a $12,000 bonus as an immediate cash payment versus letting the funds between a 7000 immediate payment in a $5,000 contribution to their 401(k). workers have been on straight for more than seven weeks after voting down the prior to offers. elon musk is facing a setback in court. a judge ruled that the former twitter ceo and other top officers can move forward severance claims. they are refusing the billionaire of terminating them just as he was closing the company in order to cut amount of severance pay. muska has been fighting legal

claims for backpay by thousands of twitter staff members that he let go. the minnesota vikings are keeping pace with first place a nfc north after beating the indianapolis colts on sunday night. thanking caps off a full slate of nhl action on sunday. the pills winning their fourth straight game to increase their lead atop the afc east. the commanders beat the giants and hold a one-game lead over philly, and 91 of the chief look to keep the streak alive against the milwaukee bucks on monday night football. and that is your brief. jonathan: appreciate it. next, setting you up for the day ahead and heading over to philadelphia, pennsylvania in just a moment. this is bloomberg.

♪ >> the opening bell 39 minutes

away. equity futures still positive and now bond market still day. the 10 year, 4.20 8.67 as we can you down to the opening bell. the presidential election on wednesday. pmi data that nobody will notice on thursday. a rate decision, i hope they will. another round of jobless claims. the federal reserve rate decision and on friday, consumer sentiment. tomorrow of course election day and both candidates are making a final blitz can swing state or the polls open nationwide. david joins us now from the valid ground state of pennsylvania in philadelphia. we have the final polling for a lot of organization over the last few days. what is the reefer where you are? >> here in pennsylvania one getting the most attention is a new york times poll over the course of the campaign and what it shows is in pennsylvania, the race is narrow and even more,

essentially a tie. that is true the presidential level in the senate race taking place. bob casey, the democratic incumbent leaking state of mccormick. he spent some time in bridgewater in connecticut, now making a run for it here. he used to be losing by nine points, now it is 5%. but that indicates is just how important the state is going to be for further these candidates. indeed, both of them are going to be here today. donald trump is hosting two rallies in the state. , harris hosting three, pittsburgh, allentown, and in philadelphia at the end of the day. one of the large, star seven celebrity-rich event that is going to attract a lot of attention here locally. indicating that kamala harris has this lead in iowa and that kind of rate a lot of eyebrows on both sides of the aisle as democrats were quick to capitalize that as something that indicates maybe things are

going better than a lot of these polls are in the eating. for the trump campaign, it was a moment for them to look at their own internal polling, say that it is so far off they can't believe it and kind of classic trump discourse. the person who runs that pole is someone from his praise previously. something of note i think, but the real focus is the last swing staple from the college in the new york times. >> because she pretty could 2016. david, i want to focus on one issue in pennsylvania. oxford economics that if the issue going to the election is inflation, trump went pennsylvania by 90,000 votes. if it is something else, harris wins with a similar level of votes. what is the final issue going into tomorrow? >> i think it is the economy and how to harris campaign was able to reach those voters who feel as you indicate, that may be is handling this a little bit better. i've been here fewer than 24 hours in the level of signs and advertisements focusing on the

economy is certainly cheer. i listened over the course of the weekend with the closing arguments were. the streamlined message, kamala harris broke it, donald trump can fix it. we saw him meandering and wandering away from that over the course of the weekend. kamala harris nodding to the economy with how she wants to help middle-class voters in particular, trying to once again welcome voters into this big tent that she has set up, while all the while nodding to the fact that she thinks the donald trump is not a stable or competent candidate who could be president once again. it's interesting to see how this shakes out i'm sure you are listening to think start trump was saying. wandering very far from what was a very concise message that i think his advisors rightfully think would be very salient with voters in the state and others. we know the economy is such a market issue for some of the people in this country, not just pennsylvania.

jonathan: he has struggled to stay on message at times. 24 hours of closing argument still to come. lisa: although i don't, people are listening versus just deciding whether or not to vote. i'm not sure exactly how many people truly are undecided. they started to me is just how wrong are the polls because that i think is what a lot of people are looking at in such a tight election. who are they underestimating? in the midterms republican for feeling real good, talking about a massive tsunami of a wave, and it didn't happen because of abortion. so potentially that is where that is that the vulnerability. jonathan: this is going to be a very long week tomorrow morning, here the lineup for you. from new york city this morning, good morning. thank you for choosing bloomberg tv. what a week still to come. this was bloomberg surveillance.

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matt: one day to go until the official start of voting. 30 minutes to the start of the cash trade. katie: bloomberg open interest starts right now. sonali: coming up, with just one day until the u.s. election, polls signal a tight finish as the candidates rally last-minute support. matt: traders embracing for volatility in anticipation of not just the election but also earnings season. >>