>> if you look at the labor market, it's been on a cooling trend the last two years. >> i don't know how they'll wage job losses. >> i don't see the unemployment rate rising. >> it may be all told the negative hit is slower to unfold. >> we have an economy fully employed. >> this is "bloomberg surveilance" with jonathan, lisa and ann mar re. jonathan: good morning, good morning for our audience worldwide, "bloomberg surveilance" starts right now. coming into friday, markets

poised for the biggest loss so far and the president isn't even looking at stocks. president trump: i'm not even looking at the market because long term the united states will be very he strong with what's happening here. this is something we have to do. there will always be a short term interruption but don't think it will be big. what happened to the trump put? lisa: it's not dead, trump was saying i don't care, long term it will be great. this is what the market has been picking up. for all the turmoil there won't necessarily be the relief valve of donald trump coming to the floor and just getting with a more predictable policy. that said, yesterday did give a sense this is going to be an on again, off again tariff negotiation and not necessarily a lynn yeah direction. ann marie: and there won't be a pause and they're looking

forward to april 2 and not just the president saying i'm not looking at the stock market but he's peaking a bit. scott bessent at the economic club, they're still squarely focused on where yields are going and also where oil prices are going. they want lower energy costs and lower rates. jonathan: let's get a sneak peek of the equities, up 2.10%, on the nasdaq 100 up 0 .40%. and we'll have a payrolls report and later today, lisa you'll hear from chairman powell. lisa: an interesting moment at a time there is peak policy uncertainty. deutsche bank put it as policy in a dark room which is happening at the e.c.b. and a similar feel at the federal reserve. chris waller came out yesterday and had interesting things to say, basically 80,000 to 100,000 new jobs is about neutral, lowering the bar and then going on to say it's reasonable to see two more rate cuts this year. and you know what, things are still very restrictive.

jonathan: he's running, we said that about governor waller with chairman powell's seat. lisa: you can't come out with explaining weakness as being weak and say there will be more cuts than general deflation like chris waller. ann marie: a lot of eyes will be on the trump administration with what happens with doge and people thinking what is happening with doge won't come up with this print but like citigroup, what can be reflected is the federal employment freeze that happened in january, how much will we see weakness in the report because of the freeze that happened the start of the trump administration. jonathan: the estimates is 60% and the numbers drop at 8:30 eastern time. coming up this hour we talk with cameron dawson with stocked poised in the worst week so far and francis donald on the state of u.s. exceptionalism and we'll count down to payrolls. stocks on track for the biggest loss so far after a fire hose of

tariff headlines whipsawed financial markets worldwide. cameron dawson saying we expect the market volatility to continue even if we get a bounce in the near term over long term support and oversold levels. cameron joins us for more. why did you expect this to continue? cameron: because we came into this year with such high valuations and stretch expectations there's still very little room to absorb any kind of bad news and our view has been, expect volatility, get used to volatility simply because there's no cushion or margin for error. we think you're slightly oversold and set up for some kind of bounce in the near term but we're watching how do we deal with the overhead resistance which we think is around 6,000 and see a rising risk that we rolled over at that overhead resistance and don't have the v-shaped recovery like we had in 2023 and 2024. jonathan: the headline of the week, the president, not even looking at markets. what happened to the trump put?

cameron: why do we say it has a look at the valuation and not lower? in order for trump to act and pull back on some of the rhetoric you actually have to see more volatility in stocks. we're only down 7% and about where we were prior to the election. so we'd think you have to see much more pain in stocks for him to actually step in and say things that could be supportive for markets. don't forget, even a year like 2018 had a peak to trough decline of 20%. where is the trump put then? lisa: 5400 the trump put is lower than people expected, right? cameron: if you roll over at that 6,000 level the 5400 is in play which does not mean you can't be a buyer of today's weakness. we worked looking at volatility once you go under the 200 day moving average, you look at one year and three year you get much better forward returns but can expect further downside once you cross we low that 200 day. it's a matter of just staying in

this volatile period which we think we can take advantage of to the downside but certainly is something that won't be in the rearview. lisa: i got carried away yesterday and talking to a lot of people thinking wow, this is potentially the end of the u.s. exceptionalism trade like asset management was talking about and the beginning of european exceptionalism and all of a sudden you have fiscal investment and then i talked to a corporate executives and investors, we're still going to work every day and the company looks good and people still have a lot of money to invest in the united states. have people gotten over their skis with the story? cameron: i think to an extent. if we think of u.s. exceptionalism coming to an end it brings to mind the period of 2000-2007. that was the last time huh a prolonged bull market in non-u.s. stocks that persisted. in that time huh a 40% peak to trough decline in the u.s. dollar. we're not at the point yet we're willing to make the call the u.s. dollar will fall that much. it raises the question of do you

see shifting capital flows? i don't know i'd equate germany rearming or spending more in defense to china industrializing like we had in 2007. so we do thinking that maybe we're a little bit far over our skis but certainly this is a shift at the margin. lisa: a sentiment shift for sure and people have been placing more emphasize on negative data prints and we've seen it with earnings and economic data where suddenly that's the trend. do you think that persists or do you think that's already kind of played out and people will be a little bit more sanguine? cameron: for the past five months you've been cutting earnings estimates but stocks have been going up and you've seen them go up on p/e expansion the last five months and created a fragile environment to see more volatility and if you see earnings estimates get cut and continue to see economic

surprises go in deeper negative territory the volatility continues because you're not calibrated for the growth rate. at the end of the day we're in a nominal lower growth environment than we have been the last two years and see deflation accelerating and real growth decelerating which translates to lower returns for risk assets. jonathan: no data of renmak and trump backing off and believes the threat of tariffs have done enough damage and actually going through with them and the underlying economy was already sliding. this is the problem going into payrolls later this morning. do we believe strong data, will we just look through it? lisa: that's the reason why there continues to be a bias towards negativity and positivity is considered previous administration's data. biden data versus trump data, is this the past or the now and whether people have the feeling maybe the uncertainty is the now. that said, when you look at the

earnings, they're not all that bad. so it's hard to really come up with a consistent narrative. jonathan: i.s.m. services is decent as well but we're talking about manufacturing and consumer confidence and the weak stuff. lisa: if you look at citigroup surprise index, it's reflected less negative the past couple days. it's not clear this is a linear trend though the narrative has shifted. jonathan: eight minutes on the program, lisa on the edge of bullish. lisa: let's not get carried away but trying to provide a counterweight. jonathan: cameron, 8:30 the estimate is 160. how would we expect to respond to economic data? cameron: yield up is where we expect to see the bond market which has been resolute. jonathan: we latch on to it and believe it? cameron: it's a good question because we think there's still all this volumity, expect the unexpected of this data because we have seasonality and questions around what gets included with doge.

i think if you don't show signs the jobs market is falling off a cliff, that just means some of the pricing of lower bond yields which has been so sharp over the last couple months could potentially reverse. annmarie: most people don't think doge is factored in and just the hiring treece, how many jobs is that, base case? cameron: we don't know because there's a expansion and fact of it's not just the doge cuts but the uncertainty. how much do contractors pull back on wanting to hire more people. so we think that that uncertainty factor is what causes this potentially to be a much bigger impact to jobs over the course of the next couple months but remains incredibly and wildly uncertain. jonathan: cameron dawson sticking with us. the jobs numbers drops 8:30. the update now with your "bloomberg brief." here's dani burger.

dani: president donald trump is delaying some mexican and canadian goods provided by his agreement with tariffs including autos and certain fertilizers and the duties are set to take effect april 2 when trump is set to unveil reciprocal tariffs. victor orban said the european union can't afford to help with ukraine's military efforts. at the same time french president macron said the region needs to boost defense spending and president trump said it might abandon the nato commitments if member companies don't meet defense spending targets space x has lost its second rocket in less than two months and the rocket split but lost communication. elon musk's dream is sending

people to the moon. jonathan: the moves this week in financial markets worldwide have been phenomenal. stateside looking at the worst week of the year so far on the 2025 with the s&p 500. in europe a 40 basis point move on a german 10-year yield and in the fx market the euro up 4% against the u.s. dollar, the biggest week of euro strength going back to 2009. up next on the program, we're questioning the trump put. president trump: most of the tariffs go april 2. right now we have some temporary ones and small ones and i'm not even looking at the market because long term the united states will be very strong with what's happening here. jonathan: the president isn't even looking at the stock market. we are, and so is tyler kendall. she joins us next. ♪

jonathan: futures on the s&p up a quarter of 1% and the nasdaq down 0.4 and we're down hard, down 6% on the s&p 500 and potentially, this could change, potentially the worst week of september last year. goldman sachs writing we think positioning in economic data will be required for the recent rotations to reverse. we'll get more economic data at 8:30 eastern time. the jobs report is around the corner. 160 is the estimate in our survey. in "bloomberg surveilance," we're questioning the trump-put. president trump: most of the tariffs go april 2. we have temporary ones and small ones on relatively smaller, though it's a lot of money having to do with mexico and canada. but predominant tariffs will go and be reciprocal in nature. i'm not even looking at the market because long term the united states will be very

strong with what's happening here. this is something that we have to do. there will always be a little short-term interruption. i don't think it's going to be big. jonathan: the latest this morning, president trump saying he's not checking markets after granting mexico and canada a reprieve, making sure goods compliant april 2. tyler kendall, a subtle shift for the president. tyler: jon, when it comes to these exemptions, a senior official briefed the reportest and said if canada and mexico continue to make progress on the border policies, actually, the goal is to see the batch of tariffs lifted ahead of april 2 where we are expecting the reciprocal tariff plans to be announced as well as a host of tariffs on chips, autos and pharmaceuticals. yesterday in the oval office, president trump said the automakers asked him for a more

extended reprieve and he told them no. if we look at the u.s. m.c.a. compliance data, u.s.a. says half the goods coming from mexico and 38% of the goods coming from canada will likely be m.c.a. compliant and be subjected to tariffs. it's not easy to pin down the data, according to bloomberg economics it was estimated anywhere between 44% and 84% of goods that came in from the u.s. and mexico were usmca compliant and some goods might be compliant but doesn't mean they applied for the exemption because it could be cheaper and easier to apply for a different exemption such as the so-called favored nation rate. a lot of numbers and uncertainty here but the throughline from this white house is they say the specific batch of tariff policies are tied to border priorities even as our allies, canada and mexico have done almost everything they can to address the white house's concerns. lisa: fantastic point.

you'll see a barrage of companies try to make sure they become usmca compliant and apply for that. annmarie: when it comes to the concessions we've seen from canada and mexico, do you think it's enough for this president? tyler: at this point the white house indications is it's not according to the senior administration official that briefed us, they think any amount of fentanyl is too much coming over the border, even as we've seen for mexico surge troops up to the u.s.-mexico border. they're in a two-year point about these broader impacts that could potentially shift this white house. for example, bloomberg news reporting some executives from fast food companies including mcdonald's and the parent company of taco bell went to the white house this week to warn officials there will be widespread impacts on their industry and could be one example for this recent trend we're starting to see in washington which is congressional republicans getting a little more comfortable with sounding the alarm bell, and a republican

from west virginia, one of the states with the highest rates of overdose deaths in this country was on bloomberg television's "balance of power" this week and said she's in favor of this batch of tariffs but ultimately she sees president trump asking for patience but it will run thin if we see a prices hike. jonathan: tyler in washington, d.c. thank you. i'm intrigued to know whether mexico and canada are aware of metrics provided to them the last month or so going into had this month to avoid what's happening early next month. annmarie: they thought they'd get a carveout immediately with the concessions and they didn't. we saw the tariffs go in place 48 hours and the president said there won't be another pause and april 2, they'll go line by line, item by item and map out what the reciprocal tariffs will be, not just for canada and mexico but the rest of the world. jonathan: a comment was made this week and equity strategists

didn't want to downgrade their outlook but they are for 25. barclays made their move and came from morgan stanley just overnight, we take onboard a great intensity of policies and grade lower in 2025 and 2026 and see higher inflation in 2025 with a more pronounced acceleration in goods prices. the mix of good inflation and low unemployment could put the fed in a bind and will be the focus the next few months. lisa: because companies don't have the ability to turn on tariff adjustments on and off like a switch. they have to make adjustments in the meantime to protect their businesses and many different lines to offset any potential changes in policy. you're seeing that. you're seeing those adjustments being made in the earnings coming out, whether it's gap talking about a 10% adjustment in certain places last night or what we heard from the home depots and wal-marts of the world. these are the ways companies have to gird for it that reduces dynamism even if these tariffs

don't ultimately end up in place. jonathan: cameron dawson of new age wealth. the federal reserve meets and puts out forecasts, what's the meeting look like? cameron: they're very much on hold because of the uncertainty of how these tariffs and potentially immigration could feed into the inflation story and don't think we'll get weak enough data yet out of the jobs market to justify them acting. it's a really good question of how the s.e.p. changes, will we see them downgrade growth forecasts. it's an interesting mode shift from the way we've been the last two years, every single month the last two years we've been raising g.d.p. forecast on a consensus basis from wall street. does it start to change? if we cut forecasts in the other direction, that to us is what keeps this volatility within equity markets and credit markets around. annmarie: yesterday scott bessent talked about tariffs being a one time price

adjustment and he hopes what he calls team transitory looks at that as a one time price adjustment when it comes to inflation but if you're a company, are you worried about inflation or weak growth? cameron: we heard from the fed beige book companies are having trouble passing on price increases to consumers. if they're able to pass on those price increases and consumers accept higher prices, that's where tariffs could metastasize and become a larger inflationary driver. but if consumers are pushing back and not accepting price increases and pulling back on consumption instead, that would suggest there's more downside to growth and it's not about inflation but weaker demand and that's something that would then show up potentially in the jobs market eventually. lisa: to get a fuller view of the trump administration policies we have to see the tax cuts. would you change your outlook where equities are going once we get the policies out of congress? cameron: we're not optimistic you'll get incremental tax cuts,

that you just get an extension of the taxes that are already in place or the policy that's already in place. and if we think about the pay-forwards, that's an interesting question of do you get tax cuts if you try to go for that on the corporate tax side of things? how do you actually pay for that? if it's being paid for by doing things like formalizing tariffs and making them permanent, which we would see effectively as a consumption tax, we'd see that more as growth negative than the benefit you'd get from a lower corporate tax rate. lisa: this is mind-spinning and superfun and enjoy it the rest of the year. what do you do with this? cameron: i think you continue to be in a stance where volatility is your friend on the downside and you stay high quality and don't chase low quality names and we think you're going to remain in these wide, choppy ranges for equities and fixed income as well. we don't think you're pricing in any risk of downside to growth in credit markets so we do

thinking that areas like high yield remain very, very risky for that potential shock but i think you keep your head down and continue to vocous on the fundamentals and companies that have strong track records of blocking and tackling uncertainty. annmarie: to be very clear, you're not assuming actual regime change, this will be a lot of noise but not a seismic shift overnight that's going to fundamentally adjust entire sectors and profitability prospects? cameron: we think there's a very big difference between falling into a recession and collapsing growth versus decelerating growth. we're still in the decelerating growth camp because we see strong underlying drivers for this u.s. economy and still see strong underlying drivers for technology investment. however, we don't think it's the same world we were in in 2023-2024, and no v-shaped recovery. jonathan: and the outlook is improving in europe and china which could trigger outflows from u.s. assets and does it

make the period more riskier? cameron: we think that brings back the 2000-2007 memory where you saw big outflows out of the u.s. after you had a period of peak concentration in markets and a very strong technology story and that raises the question of how much downside is there still in u.s. valuations? you're still trading at 21 times forward earnings. that's down from the 22.7 ceiling that we hit the beginning of the year, but we think that because valuations are still so high, because positioning is still so crowded in the u.s., don't be surprised if there's more air to come out. jonathan: appreciate your time as always, cameron dawson of new age wealth. we said repeatedly on the program this week, it's the most exhausting 6% pullback we can remember because it's been decades and the reason for that is damage done elsewhere on major names. to see nvidia down for the week, that's a $350 billion move and see big names a lot of people hold take a lot of damage.

lisa: and the reason why people feel exhausted and question the put moment. you said "exhausting" and yesterday marked the sixth session in a row the s&p 500 moved more than 1% in either direction and the longest such run going back to the pandemic in 2020. annmarie: the big question is trump just joking when he says he's not looking at the stock market. but he thinks the u.s. administration is pleased at what they're seeing, stocks have sold off and oil down. jonathan: crude the lowest of the year and what they wanted, not sure it's been design. up next, francis donald, counting down to payrolls. from new york city this morning, the payrolls report two hours away. ♪

♪ jonathan: six consecutive sessions of 1% moves in either direction over the last week or so. just absolute phenomenal volatility at the index level. equity futures firm or by 0.3%, nasdaq 100 up by 0.5, the rustle up by 0.2. payrolls report this morning at 8:30 eastern time. and no doubt some comments from the president of the united states, so plenty of volatility potentially. let's get to the bond market. we've had a run of seven lower weeks on the u.s. yield.

we are about to snap that streak. that could change. lisa: depends on how much we end up getting hotter than expected print. if it does that, it upends the narrative that the u.s. economy is quickly deteriorating and we are seeing this weakness we have not seen for a long time. if that gets challenged, how offsides will this market now be after a couple of weeks of that kind of activity to see a pretty big snap back the other way? jonathan: let's check out europe because you've seen a major snap back the other way on euro. we've had a move of more than 40 basis points higher on a 10 year maturity. in the fx market, the euro seems to move one single figure every single day. euro-dollar at 1.0850. on the week, up by more than 4.5 percentage points, the biggest weekly gain for the euro potentially since 2009. lisa: the calls coming out of

wall street firms have been just john dropping. bank of america's michael hart next said he would not be surprised if german bund yields, 10-year german bund yields were trading above our 10 year u.s. treasury yields were by the end of this year. that is a bold call. jonathan: they have already converged a lot already this year, sending yields lower in the united states. germany coming up very quickly. check out shares of broadcom, on track for their biggest gain in 12 weeks. the chip supplier for apple reassuring investors that ai spending remains healthy. that stock up by close to 11%. we have been spooked a number of times over the last months on the ai front. lisa: we also got hp, which came out and people were very nervous and dressing those shares lower in a significant way. are we seeing the winners and losers? is it really idiosyncratic

depending on the company, the application, who their customers are, apple, to figure out whether or not they are going to make these gains are not? it's a reason why it is a complicated story on the reason you are seeing mass swings and names like nvidia. jonathan: china sing this. the foreign ministry calling president donald trump's tariffs evil and arbitrary saying the levees are two-faced and not good for the stability of bilateral relations. lisa: when you think of two-face and what china has done in the past in terms of their policies, they should also potentially look in the mirror. they seemingly seem to be calling on trump when he calls out that he has this great relationship with xi jinping. the president publicly wants to maintain these diplomatic ties. i think at the end of the day, he might want a big, beautiful deal when it comes to china. but when you hear about reprieves and exemptions when it comes from tariffs, there's

nothing when it comes to china. that 20% is in place and there's no talk of rolling it back. >> i wonder how far resentment goes when it comes to international relations. i know how far resentment can go personally. jonathan: tell us more. >> justin trudeau saying he expects a trade war the canada and united states, it's expected for the foreseeable future. it's not just the leaders, but also the people of these countries and i wonder how much we end up seeing that in their preferences for products going forward. we've seen that with the margins on tesla, maybe. jonathan: sitting here in new york and united states, i am not sure we are quite aware of how offended the canadians are north of the border. you can feel that sentiment starting to build. > if you go to a hockey game with canadians and they start booing the national anthem and they start booing the american flag, it gives you a sense, they are so kind, they generally are really welcoming to u.s. members.

honestly, they leave their doors unlocked. >> it's not just canada. and mexico, claudia sheinbaum known as the patron saint of mexico because of how she's dealing with donald trump. her point numbers throughout this whole fiasco have gone up, something i think any public official would be jealous of. jonathan: the conservatives have had a massive lead in canada. we have seen that narrow. president trump directing cabinet secretary to use a scalpel rather than a hatchet when making federal workforce cuts. the move suggesting that maybe trump is looking to shift power away from doge. >> i think a lot of this is stemming from what's happening in congress and a lot of republicans. you are calling in and saying, i am getting a lot of calls about this. are you being precise? why does it feel like it is causing a lot of havoc and chaos? trump says as secretaries learn about understand the people working for the various departments, they can be very

precise as to who will remain and who will go. he says they want to keep the best people. sounds like they are taking a step back and being a little bit more methodical about how they go and dogeify the government. jonathan: payrolls 8:30 eastern time. it's going to be important. we will find a house in those numbers start to move after back of the doge effort. francis turned of rbc writing the following. whereas the trump administration was initially celebrated for its emphasis on deregulation and tax cuts, it is now facing tariff- centric policy and fiscal pullbacks, which is not reflationary, but stagflationary. joining us now, two of the best, frances donald and elsa lignos. we are talking about the end of u.s. exceptionalism and that has a big fx impact that we can talk about with elsa shortly. frances, i want to begin with you. what has changed in the last month? frances: when we talk about u.s.

exceptionalism, it was generally a call on the structure of the u.s. economy, ships act, ai, underlying good fundamentals and the cyclical acceleration. i don't think the structural story has changed too much but that cyclical optimism is failing at this point -- fading at this point. we are seeing the damage from tariff uncertainty creep into the sentiment surveys, creep into soft data. does the soft data bleed into the hard data, especially with this k-shaped economy where the altar wealthy have been supporting the whole? we heard from president trump, secretary scott bessent that they not watching the stock market. may be they need to be aware of that wealth effect from the. the other component is just how inflationary those tariffs turn out to be strongly depends on the path of the u.s. dollar. that is why elsa's views are so critical to the economy. it's not just economy to fx, it is how fx will change the shape of tariffs. >> which is another reason why

people expected a strong dollar would offset the inflationary aspects of those tariffs. what we have gotten is exactly the opposite. and it is part of what's going on with growth fears in the u.s. but also has to do a lot with what's going on in europe. how far can that dollar weakness really go? elsa: absolutely right. it's been an absolute momentous week for europe. the scale of integration and large-scale announcements we have heard this week just pales in significance compared to anything we have heard over recent years. i think there are a number of crosscurrents. there are a number of people sing a stronger dollar could offset the impact of tariffs. i disagree. the large majority of u.s. imports are actually denominated in u.s. dollars. so a lot of that effect would actually accrue to exporters in terms of profit margins. thinking more generally about where the dollar goes from here, we have a number of crosscurrents, because it was not just the physical

announcements coming out of europe this week, it was also the fact that we already had better european data. we saw that again this morning with the upgrade to q4 gdp. the economy did well, up to 0.22 now with a lot of that coming from domestic demand. i think it is that challenge that has cut people off guard. how much further can the dollar run? we have been eyeing up 112 as a decent first resistance level. >> i miss the days when we were talking about growth differentials and inflation differentials and we could just focus on that. now there's tariffs, there's questions about spending, all of this. the point, if you try to strip it down, which is kind of the goal right now, is just growth and inflation, which is the biggest lever to pay attention to the u.s. rates outlook when it comes to how much these tariffs can affect the u.s. economy?

frances: it's a great question and i'm glad you qualified for the united states because it differs depending on which country you are looking at. the united states have growth margin. we were looking at 2% growth for 2025. if we have to downgrade to even 1%, it's not a great develop, you have to have a rereading, but it's not going to break the u.s. economy. where there is very little room is on the inflation side. if we do see these tariffs come through one month from now, we could be seen 3% core inflation by year-end. combined that with a structurally tight labor market, is not a great position to be in for the federal reserve. high inflation is going to be what it becomes more problematic for the american psyche right now, especially because let's not forget, prices are up 29% since trump's first day in office back in 2018. the appetite among households, businesses, and the market for the efficient side of the picture is very different now than i suspect the growth side. >> you are at the economic club

last night and you heard what scott bessent had to say. he said this one price shock is transitory. do you think this will bleed through for months to come? frances: economists and those who like to say that tariffs will not be problematic for the american people will say it is transitory. what they mean is there is a one-time price level adjustment and one year later it drops out of the year-over-year. i like to say tariff price level increases are also permanent. the price increases but stays at that level for an extended time. what came out of me from that speech was secretary bessent described in nice economy, one that we have deleveraged from the public sector over to the private sector. it sounds like a great economy that many economists would check the box on. but you have to build the bridge to the other side. from my perspective, what this market is coming to recognize that that bridge to the economy that's being described is not seamless and it may not be guaranteed. jonathan: and might do a lot of damage in between. we started this year, we talked about it repeatedly, that the

policy would attract a lot of capital from around the. is the policy mix starting to turn capital await? is it too soon to tell? frances: we are not getting the juicy, high-quality, american exceptionalism content first. some of that may be having to find some of the better things. there's a story you have to eat your vegetables before you get your dessert. maybe that's the mix we are getting. >> this is exactly the point behind a lot of the bold calls behind euro strength. how much are you actually seeing evidence of that, that euros are flooding in with what we just, the biggest weekly inflow into european stocks going into 2022? you just seen this groundswell. elsa: we are certainly seeing a huge shift in the short-term positioning. on our short-term positioning monitors, markets have a ready turn longer euro-dollar, having been consistently short.

it's interesting and i've seen some calls for this continued euro strength, pacing it gently. i think it could be look pretty different. there is this initial move which is very likely it feels like it's going to get into overshoot territory because it happened so quickly. you got that equity angle that i feel like is really underappreciated the impact that. has on the currency market we are seeing a structural reallocation out of u.s. equities back into european equities and there is a currency component. the point frances made is absolutely critical. is this going to be an environment where the fed can cut rates aggressively? is the inflationary backdrop going to prevent them from? doing that if you don't have those aggressive effect cuts, those calls that we got to back in 2021, that looks much harder to achieve without that convergence in front-end rate differential. jonathan: there's one piece of the story in europe i am try to make sense of. we've had a massive week for the

euro. off the back of the plans to boost infrastructure spending. this all started when president donald trump made a more aggressive push to end the war in ukraine. that's when the euro started to move, started to find a floor. i wonder if a german is going about rearming and the whole of the continent goes about rearming, does that make war more or less likely? that's going to have quite an impact on the continent and financial markets. elsa: it's a great question, and i think one which people have in the back of their minds. a spot trader in london was mentioning that. is it necessarily great for europe if we are having to rearm ourselves with the risk right on our eastern borders? i don't think that is a story people are focusing on today. i think they are far more focused on the end of u.s. exceptionalism. that's certainly a risk premium that will be baked into the back of people's minds. jonathan: two of the very best,

elsa lignos of rbc, frances donald. we will catch up with amy lou silverman. with your bloomberg brief, here is dani burger. dani: bitcoin fell after u.s. crypto czar david sachs indicated the u.s. government will not use taxpayer money to fund a strategic stockpile of the digital asset ordered by president donald trump. bloomberg technology will be speaking to david sacks. don't miss that one. the check on gap shares, they are 17.5%. in the premarket it exceeded sales estimates and saw strong results in its namesake brand along with old navy, banana republic but it did report an unexpected decline in the athleisure brand. . the results indicate the ceo's turnaround plan is paying off. elsewhere, goldman sachs is pushing managers to move away from expensive office locations. job informally by some as project wage, the aim is to drive down costs and -- project

voyage, the aim is to drive down costs. the bank telling managers in new york and london to relocate to dallas or south lake city or risk losing their job. and that's your brief. jonathan: more from dani a little bit later on. five years ago, it would be like oh no, doubt send me. i love new york. five years later, i just wonder how many people would take that. lisa: big house, go skiing. jonathan: right? lower taxes. lisa: exactly. jonathan: up next, biden data. >> you are looking at dated that is biden data. do not try to besmirch my president trump with biden's nonsense. >> the biden economy, the biden jobs market was way worse than markets.. jonathan: we will catch up with sarah house from wells fargo in just a moment. from new york, this is bloomberg. ♪

♪ jonathan: the jobs report later this morning, 8:30 eastern time. the estimate in our survey, 160k. equity futures firmer going into that. biden data. >> you are looking at data that is biden data. do not try to besmirch my president trump with biden's nonsense. what possibly could change, seriously? we are in early march. my president took over january 20. >> the biden jobs market was way worse than markets thought. jonathan: trump officials blaming biden for weak economic

data. jobs data for the first month under the new administration later this morning. sarah house writing we estimate nonfarm employment increased by 170k in february. beyond february, we expect slower labor to supply. sarah joins us now. welcome to the program. i want to pick up on that word the commerce secretary howard lutnick used, biden, biden data. and this line, my president took over on january 20. is it too soon to expect the policy changes to show up in the data? sarah: i don't think it's too soon. we know businesses are forward-looking, just like markets are. just like we saw things, including some sentiment surveys, but also markets move following the election. i think you're starting to see some of this administration's policies or some of the uncertainty around those policies begin to filter in through the data. i think it's a bit of a blend. it's going to be harder to draw that distention between the former and current

administration as we move especially into the march data. lisa: how significantly did you weight yesterday's challenger job cuts? it did move markets and seemed to really color people's perceptions. sarah: i'm glad you brought that up because i think that was a really important report. we do see the challenger announcements, they can bounce around from month to month. even when you take out the federal government cuts that the challenger announcements included, you still saw the biggest layoff announcements going back to 2020. what i think that really speaks to is some of the softening in labor market conditions that we are expecting to see as we move through the year. this is not all about reducing the federal workforce or some of the related federal spending cuts, that really there's a lot more going on, uncertainty around trade that affects goods and goods adjacent industries as well. i think it is a cause for broader concern and i think it was a report that really did stick out much more than those

reports usually do. lisa: how much does it heavily weight the idea that we need to get growth on the other side of the equation to offset this? that maybe we could get a better-than-expected number today because those people are finding jobs and other areas of the economy need to beef up, particularly domestic production, in the face of tariffs. sarah: i think there's a bit of a timing mismatch. for a lot of those layoff announcements, they are just that, announcements. they could take place over the coming months, may be some don't take place at all. the numbers is what we saw through the middle of january to the middle of february so i think it's too soon to see those offsets. but it underscores that if you're going to be putting constraints on the good side of the economy, if you're going to be putting constraints on some of the government hiring, you really do need to see the other private sectors begin to pick up that slack. that's something that we just still have not seen a lot of. when you look at even some of the most recent indicators that came out for february, yesterday

dropping back, it is hard to see a lot of that also taking place over the next few months, particularly when you still have relatively tight monetary policy. lisa: how much could the trump freeze on federal hiring that came into place in january impact this report? sarah: i think that's really to the extent that you will see declining federal hiring, i think that's really what's up play for the february numbers. we would not be surprised if you saw the federal hiring line may be declined by about 5000, maybe as much as 10,000, so that would mark a departure from the 4000 trend. but we do have a little bit of guidance. back in 2017, we saw a hiring freeze instituted at the start of the first trump administration, but really that did not seem to way down federal payrolls that much. even in the first three month of the hiring freeze, federal line only declined by about 13,000, so i think it's up play, but

still looking pretty minimal here, especially in the near-term. lisa: you're expecting 170k for february. what do you make of these estimates that range from 30k to 300? sarah: i think it speaks to just all the uncertainty that we are seeing right now, where i think it's clear that we do have a lot headwinds mounting with again, some of the trade policy, some of the federal spending policy. i think there is also difficulty at the start of the one comes to whether. we had some severe winter weather in february but not as much of a departure as what we saw in january. the early part of the year is when we tend to get some of the biggest surprises in the economic data, particularly on payrolls because of those big seasonal effects, so i am not surprised to see that wide range of estimates this month. jonathan: i your time. sarah house of wells fargo looking forward to payrolls. this economy could go through a real rebalancing. the potential to pull back on

immigration, which could affect supply. people have complained about the potential of a supply shortage. that's going to be met with a pullback in the hearing in the federal government. you start to get beneath the service and think about a potential skills mismatch, it's not that simple in practice. lisa: if somebody has been working in the government for 20 years, are they going to go work in a hotel and clean rooms? there's a big question about overlap. there's a question of what happens in the process of this transition and how much longer it could take. >> it's the disturbance i think trump talks about, not just the stock market, but the transitions. scott bessent painted this wonderful picture of where they like to go, but the destination getting there could still be challenging. jonathan: we could still get there though. payrolls at 8:30. coming up, a guest from jp morgan, jennifer felton, and a panel with amy will silverman and lori calvasina of rbc.

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>> any adjustment in any economy would involve some pain. in this case in the form of a high unemployment rate. >> as the first half of the year progresses we will get bumpier data and payrolls. >> the data hasn't been particularly encouraging as of late, and i expect that to continue. >> consumers don't see much availability in the job market. >> you see more signs that the labor market is weakening, that will maybe give the fed room to

bring the cut forward. >> bloomberg surveillance with jonathan ferro, lisa abramowicz, annmarie hordern. jonathan: the second hour of bloomberg surveillance begins with equity futures firmer. a: 30 eastern, 90 minutes from now, the payrolls report. this afternoon at 12:30, chairman powell speaks going into the weekend. lisa: which does he emphasize, inflationary pressures or growth pressures? we are pricing in three rate cuts through the remainder of this year. does he fortify that view? chris waller, the fed governor, seemed to come out and say the two seems reasonable. is that mainstream or fed chair waller? jonathan: you heard from a range of officials including raphael bostic making the point that you may not get clarity on policy for months and months. later this afternoon, signing

executive orders again, the present of the united states. as economists look for clarity. annmarie: they're looking for clarity and they may not get it as the president was giving a reprieve. saying you won't get another one. april 2 we will go with reciprocal tariffs. raphael bostic yesterday, feeling like many people are. the question is, how does this sort out? he said that he would be surprised if we get a lot of clarity before late spring into summer potentially by design. lisa: you have to have your vegetables before you get your dessert. that is why the market is not responding with too much of a pop with a reprieve. 0.4% bounce in nasdaq futures after a correction since february 19. it has been down 10% and it corrected since the record highs. you aren't seeing a massive buy the dip bid because the uncertainty is not going away. now that tariffs are off the table, it just means they will be a game that we will play for a long time. jonathan: an exhausting 6%

pullback on the s&p 500 but not catastrophic yet, and it doesn't have to be. jason furman, an economic advisor to a democratic president said himself that it doesn't have to be the end of the world. francis said that this is not a policy mix problem, it's a sequencing problem, and that's an important thing -- important distinction. where we are six-month from now could be a very different place. lisa: it's an incredibly difficult moment for markets that are forward pricing mechanism to understand how to take a whipsaw of headlines into stride when this economy is a barge. we talked about it extensively. it takes a while for things to go into effect when i talked to longer-term investors, they say we still go to work, people are still figuring out where they will invest. jonathan: like citi of dallas? lisa: what would you prefer? jonathan: dallas, probably.

the weather and the environment. we can get into that later. we are different people, bramo. that's why it works. posited by about a quarter of 1%. payrolls later. coming up, jp morgan on an ugly week for markets. tariff whiplash out of washington. and morgan stanley ahead of fresh jobs data later. u.s. payrolls at 8:30 eastern. "payrolls is critical, especially since the market has started to get nervous about the health of the u.s. economy. self-data has been week, but other data has been ok. maybe this is payback from a strong 4q." is the trade story a randomization for a trade story that already started or is it biting into the data? >> i think it's both.

we did come into the new administration with momentum. maybe the slow down, and we have been talking about the k-shaped recovery we've been in for a while. some parts of the economy have been struggling. other parts have been fine. i would highlight tariff-on, tariff-off, that's uncertainty and makes me nervous. the uncertainty shock can make businesses stop hiring, slow down, go on pause. i think we are at a critical part where if the momentum is slowing, and now you have this uncertainty shock, i think the big assumption in markets has been that the good stuff will offset all this. where is the good stuff? it's taking a while. the sequencing is important. you aren't getting the good stuff yet. we are dealing with the shock now. i think the market's assumption that this is all negotiation, we heard from the president "a little discomfort." i'm feeling more than a little

discomfort, but if this is the biden economy the pain point is worse. the market is focusing, what was the momentum into the uncertainty shock? jonathan: a little uncertainty is good for the treasuries. they rally on that and have rallied for seven consecutive weeks. yields are down this morning. how do you think the bond market is set up going into the data at 8:30? more sensitive to strong or weak data? priya: i think it is asymmetric. we will get a bigger reaction on a weak data print. we have had a big move, you are right, but that is the market taking that side of the distribution of the economy may be re-accelerating. the animal spirits we were talking about two month ago has been replaced by recession fears. i look at the endpoint of the rate cuts the market is pricing in. 3.5%. the markets pricing and for fed funds is 3.5%.

that is still restrictive. we can debate where is r-star in the gap. the market is not pricing and accommodating fed policy because the economy is ok. you have the stagflation risk with tariffs. if you could a weak number, the market will say that the fed will view tariffs as a one-time shock, price level shock. they will focus on the uncertainty shock, growth slowdown, and cut. you get a weak number, i don't think that chair powell will signal more rate cuts, but the market is forward-looking and will price in more rate cuts. the asymmetry is less today than a week ago, but it is still there. lisa: how does the story get complicated by europe's fiscal spending plans? priya: rate point, and if i look tired it is because of this week. lisa: i'm trying to wrap my head around the components that muddy the waters. priya: that has more on the curve and cross market spread. because of everything going on

in the u.s. if we didn't have the uncertainty shock, the data fears, i think u.s. rates would have been higher. this is a historic amount of german supply coming in. the duration supply would have taken premiums higher. if you're worried about the u.s. economy, that is where u.s. rates have been focused on domestic issues. lisa: you are saying because europe is going to be borrowing more, supply chains might be more of an issue there. because the u.s. economy looks weaker than a lot of people presumed it, money will flow into the united states as a haven play? priya: talking about recession risks, yes. u.s. exceptionalism is over in our mind, but this is decade-long. look at how much money came into the u.s. i think the exceptionalism story is over, but in the u.s. the dollar becomes a safe haven play for the short-term. is that the pain point for the president? some of these negative growth

policies do they stop or pause? in a recession scenario, we can take a pause from that decade-long view away from the u.s., or maybe multi-year view. exceptionalism has been such a prevailing theme. i think that has ended. certainly, if the u.s. economy is heading into a recession it is so far the only source of strength for the global economy. i think the market is saying that will change. europe will have all of this demand in defense and infrastructure spending, but that is a longer term view. annmarie: how do you know if with europe it is a false start? priya: i think the fact that it is germany, the world has been asking for germany -- annmarie: for decades. priya: exactly. they have low public debt to gdp. the fact that it's germany and they are moving at a very fast

speed -- for europe, this is a super accelerated speed. i think that is why the market is paying attention to it. the markets are large. for good reason. we have the geopolitical risk, talking but how it's coming together. i think the market is taking it seriously. we have had big moves. i think if we are seeing the numbers we are talking about there is a lot of room for those rates. annmarie: if you think that this is the end of u.s. exceptionalism but this administration wanted to continue it, what would you like to see? priya: growth positive policies being put into place quickly. the sequencing. the house bill that passed has $2 trillion in spending cuts. to me, that's growth negative in the near term. spending has a higher multiplier than tax cuts. let's talk about tax cuts as opposed to an extension. in my view the extension is not a stimulus. we need to see where the

stimulus is coming from. where can we get businesses to invest? maybe this is a re-privatization of the u.s. economy, but we need private sectors to invest and not pull back. jonathan: what is your reaction to treasury officials, administration officials, talking down this economy and saying it is biden still and may not be theirs for 10 months? priya: i think they are telling us they will be more pain in the equity market and pain in the u.s. economy potentially in the transition, but it is not the pain point for them to reverse policy. i'm glad you bring this up, because how should we trade this? i would say that people who bought into risk assets, they have had a great time. fixed income has had no income on diversification. you are getting both now. if you are an actively managed fixed portfolio, deepseek monday, tariff tuesday, and i guess now tariff wednesday and thursday as well.

i don't think that we are at the pain point because we aren't hearing that from the administration. risk assets are very vulnerable, and that is when bonds make sense. jonathan: can i ask a more direct question that lisa has alluded to already over the past week or so? i conversation people are having and you would have heard. is this deliberate? are they deliberately engineering a slowdown to get lower bond yields? priya: i heard that, but i struggle with it. jonathan: i struggle with it too, but it is out there. priya: if you're getting low bond yields because we are worried about a recession, i think that fuels negative sentiment and it becomes a negative cycle. it's like shooting yourself in the foot to make sure that your gun works. it is not a smart strategy. i think they hope that the market can look ahead to the end point and not have a big draw down, but sentiment is a tricky thing.

people get nervous, they cut back, and if the layoffs start -- jonathan: time to correct course. priya: this is not a very dynamic labor market. even small layoffs with not a ton of hiring can make the labor market look worse and then it feeds on itself. jonathan: priya misra on the bond market and treasury. treasury secretary scott bessent speaking to the american press. comments suggest there will be a detox period for the american economy and we could see an economy starting to roll a bit, an economy we have inherited. lisa: there is the question of a shallow downturn that lowers bond yields, weakens the dollar to bring investment to the united states -- if you believe that could be a tool used, and redo trade for something else. that is one conspiracy theory out there. to your point, this is deliberate and something they welcome. it is the reason they are

targeting the 10-year and not the stock market. jonathan: just to be clear, it is not my point. it is out there. lisa: it is fair to illuminate something we've been hearing. annmarie: maybe there's confidence they can handle it because the u.s. economy is so strong, which is why people are looking at the lagging dated understand how strong the economy is. jonathan: equity markets are for mark. jobs data comes later. an update on stories elsewhere. dani: china's top diplomat attacked president trump's approach to china and tariff at the national people's conference this week. the foreign minister said, "the u.s. should not return good with evil." the diplomat defended actions on stemming the flow of fentanyl to the u.s. and accused trump of using the issue to presser his government. broadcom shares rallying 11% in the premarket peer the company, which supplies chips to apple and tech companies, gave an

upbeat forecast suggesting that the ai spending boom is still going strong. broadcom being a major beneficiary of those expenditures. u.s. officials are searching the world to find eggs to ease the shortage that has sent prices soaring. france and indonesia are fielding inquiries from american embassies and the department of agriculture about exporting eggs. 70 million to 100 million eggs are needed to be imported in the next month or two to fill in the gap left by the bird flu virus break. -- outbreak. pres. trump: most of the tariffs go april 2. right now we have some temporary ones, small ones. i'm not even looking at the market. long-term, the united states will be very strong with what's happening here. jonathan: invesco joins us next. live from new york city, good morning. ♪

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jonathan: the jobs report in one hour and 13 minutes. equity futures positive by about .25%, up one third on the nasdaq. likewise on the russell. trump taking an eye off stocks. pres. trump: most tariffs go april 2. we have some temporary ones, small ones, relatively small, although it is a lot of money having to do with mexico and canada, but the predominant tariffs will go, they will be reciprocal in nature. i'm not even looking at the market. they are long-term, and the united states will be very

strong with what's happening here. this will be something we have to do. there will always be short-term interruption. i don't think it will be very big. jonathan: president trump saying he's not worried about disruption to markets as he pushes through the tariff agenda. exempting goods from usmca from duties until next month when he is expected to announce reciprocal tariffs on april 2. joining us at the white house, we have heard from officials in the administration that weak data is biden data here they inherited an economy that might be rolling over they aren't looking at the stock market. there might be some disruptions. are we learning quickly that maybe their threshold for pain is higher than we thought it was? >> the question is, when are they going to start transitioning from what they are calling biden data trump data? scott bessent, the treasury secretary, saying that the stock

market is part of the information president trump takes in every day. we got a preview clip from president trump earlier in an interview with foxbusiness where he was asked if the business community should expect more clarity around his tariff plans. his response was that the u.s. reserves the rights to keep hiking tariffs and he isn't sure there is any predict ability. the white house has largely brushed off concerns when it comes to uncertainty around tariff plans that have contributed to this market reaction. we should note, as you recall, earlier this week in his address to a joint session of congress he talked about interest rates but not the stock market. reporters repeatedly heard from white house officials that this uncertainty is twofold. they pushing this has to do with the urgency that president trump is trying to accomplish this agenda item, but it's also a negotiating tactic. not everyone agrees with this assessment as we hear conflicting information from senior administration officials on what feels like almost a daily basis. the other part of this is also, perhaps, next messaging when it comes to the potential economic impacts for the economy around the tariff plans. president trump previewing there could be an adjustment period.

yesterday, secretary scott bessent saying it's not the american dream to have access to cheap goods. jonathan: tyler kendall outside of the white house this morning. let's extend the conversation with jennifer from invesco. people just want clarity. officials, investors, officials with the federal reserve want to understand when they will get clarity on what tariffs look like. you see them getting that soon or do you think that this will be a feature of the next three or four years? jennifer: i think that's a great question. i think that uncertainty we are experiencing now is likely only to get greater. especially in the immediate term. this april 2 deadline, the report on reciprocal tariffs, this is the centerpiece. if you look at all the eo's that came out, executive orders, the america first eo that pulls on the reciprocal tariff report to take stock of the entire

global trading system and how it affects the united states, this is the report that i think we should be focused on. i think this is going to start those negotiations country by country, where you have the commerce secretary and ustr head working together to begin that process. lisa: you said something important, start negotiations. your understanding is april 2 we get the administration outline what they want to go after? not actually the tariffs in place? jennifer: that is the question. will they move forward like they have with doge? break things and see where the most disruptive areas are and retreat? or are they going to take this report, have a slow and more steady approach to trade negotiations? bilateral or multilateral. we know that the usmca is up in 2026, but those negotiations are

clearly starting now. do they move quicker? do they allow for this administration to have the leverage in actual talks to make changes towards 2026? annmarie: the business community, market investors, they don't like uncertainty and want clarity. if you were a negotiator for the u.s. government across from the europeans, chinese, or canadians, how much leverage do you have with uncertainty from the president of the united states? jennifer: that is a great question. what is good for the market, what is good for wall street, and what is good for main street are not necessarily always aligned. they are not necessarily mutually exclusive, but you have this president that you have noted on the show today talking about the fact that he won't be watching the markets. right? maybe he is giving them up for lent or something. going forward, it will be those

areas of the country where he wants to bring the manufacturing home. it will be the heartland, the middle of the country that he will really be focused on moving forward. lisa: how much support do you think the president trump has in rearranging the way the u.s. economy functions, even if it is at the cost of a shallow recession or shallow downturn? jennifer: i think that we need to keep in mind that it is not just trade. it's going to be further tax reform. we are going to see some deregulation as the agency heads take hold. not just the canada officials, but going down. the deputies, the assistant secretaries, the heads of the independent agencies. you saw a little bit of that in scott bessent's speech yesterday, deregulating the banking industry. we will see a lot at the sec. that can spur pro-growth

deregulation that can affect the market and businesses going down the supply chain. lisa: when you talk to republican congressman behind doors, are they saying if you wait and see this will unleash this investment cycle, growth cycle that will be exciting for people?we are willing to take the anger from our constituents now? is that the message you are hearing? jennifer: it depends on the member of congress. there is a small handful in the house and tossup districts going to town halls and chambers of commerce meetings, the lions club, and hearing tough talk. a lot of these members are fully bought in. not just the movement on trade and deregulation, but doge as well and the auditing of the federal government. i think one of the first steps is going to be how the white

house can control going into reconciliation. once we get past the cr funding the government, we will dive into reconciliation. jonathan: jennifer flitton of invesco, we have to leave it there. lots to talk about through the next year for sure. in one hour, the payrolls report is around the corner. equity futures shaping up on the s&p 500 firmer by .2%, but still on course for a big week of losses. the biggest weekly loss of the year so far. joining us to break it down our -- are amy and lori. ♪

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jonathan: the jobs report is about 60 minutes away, just around the corner. payrolls about an hour from now. positive by about 1/10 of 1%. let's get single name morning movers. dani: i have earnings to work through. starting with sales from gap, a turnaround story for the ages. up 16.5% with strong results across all of their brands thanks to the new ceo. interestingly, their outlook came in line with estimates and they say that that includes 20% tariffs from china and 25% from

canada and mexico. another strong set of earnings coming from broadcom. this is something the chip industry needed after less than spectacular earnings from nvidia and marvel. broadcom up 10% in the premarket with strong results. if it sticks it out, it will be its best day since december of the prior year. they signed new hyper scaler customer saying that the demand for data centers is still there. that is the tech story that's good. the bad tech story is hpe, down 20%. if it holds onto those losses it will be its worst day since 2020. they said the profitability is under pressure. one from tariffs and two pressure on servers and what they call execution issues. hpe announced they will cut 3000 jobs. jonathan: i think that tariffs in some cases can become a convenient excuse. this is an unforgiving market.

not a good time to say the kinds of things that company is saying. lisa: especially when the bar is high, which it has been for hpa. i think that this is the right question to ask. how much are companies sand bagging results going forward and using it as a convenient excuse to lower the bar so they don't have to go over and above? jonathan: retailers? target, home depot, walmart? lisa: yeah, basically lowering the bar and reducing pressure. jonathan: if they put out guidance no one believes it anyway, which happened with gm. lisa: how do you price negative infinity? i love that quote. jonathan: it going falling after president trump signed an executive order creating a strategic bitcoin reserve and stockpile of digital assets. details of the plan falling short of industry expectations. what were they expecting? lisa: they were expecting taxpayer money to be used by crypto assets. he comes out that the united states is one of the biggest

crypto asset holders because of seized crypto assets from people using them for criminal use.they say that all of the bitcoin stashes and crypto stashes from criminals we have seized, we can put in a fund and use proceeds to invest further in the crypto industry, and that is highly disappointing to the crypto industry. annmarie: one key to the executive order is it will impose no incremental costs on american taxpayers. a lot of people say we like this, we don't want money going to crypto. but the crypto bros are annoyed. donald trump today will have around -- a roundtable with them. jonathan: and we will hear from the crypto czar. a question i would have for him is i want to understand why it would be in america's interest. the issue of the reserve currency to have a bitcoin reserve. why does that make sense? lisa: they can argue that they are not going to use taxpayer money to buy bitcoin or crypto

assets. the flipside is if you seize asset you can typically liquid eight them and put them in the coffers of the united states. is it better to keep them in crypto than to liquidate them and use them in another capacity? jonathan: president trump temporarily exhibiting mexico and canadian goods covered by the usmca from the tiny 5% tariffs, signing orders paring back the levees until april 2 when he is expected unveiled plans for reciprocal tariffs. annmarie: we heard from jennifer flitton about how april 2 is becoming important and what we need to decipher and look at with april 2 is, based on how to do this legally. when april 2 come comes not a lot of the tariffs can go into place that day. broad strokes of what we think the administration will go after, and then tariffs are going to place weeks and months after. between those weeks and months, there will be a lot of hurdles in between. this will be the space that the trump administration has to negotiate with other trade partners.

lisa: yesterday i spent a long time trying to understand what was eligible for the exemption and what wasn't. a white house official said 50% of goods from mexico i'm 62% from canada, including computers, will still face tariffs implemented at 25%. an interesting question around whether they need to apply for the usmca exception and haven't done so yet. again, this is a moving picture, and it doesn't mean there will not be any pain in the near term. annmarie: a lot of these companies have products under their country of origin order meaning they are able to go in and out without extra tax. now they say we are usmca compliant, give us a stamp. lisa: if you look at some of the earnings results come a lot of people have talked about how much they moved away from chinese production. we heard that from gap, that is why they are more immune to those particular tariffs.

this is been in the works for a while. jonathan: goldman sachs is giving new york-based employees a chance to move to dallas, salt lake city, or leave. they're trying to send more managers outside of the main hubs in a plan informally called project voyage. lisa: i think of going on a ship to somewhere exotic. go to mars and never come back. there is a question about how many people are trying to do this. to your point, salt lake city, going skiing. jonathan: i feel the same way about dallas. years ago, they said we will have to move people to nashville, i think. at the time that new york sn obs said, why would you do that? if they did that now, people will be willing. lisa: will they pay the same or lower the cost of living to comply with the region? is that part of the goal? annmarie: we have seen a huge transfer of wealth from new york

to places like florida under the pandemic. and potentially we will see more. i wonder some of this is political. get out of big, blue states moving into red districts. jonathan: i will take a 10% pay cut to move to dallas. lisa: are you negotiating right now? jonathan: why not? annmarie: i will choose miami. jonathan: the s&p 500 headed for the worst week of the year after headlines out of washington whipsawed markets. we're joined for more. to the two of you, good morning. massive changes over the last two months. amy, how much has changed for you and the team coming into 2025 compared to the sleepy years of 2024? amy: a lot, jon. lori knows, i have been calling this market a paddling duck market because it looks smooth on the surface and the violent

rotations are under the surface. at this point, the duck may have fallen off of a waterfall or something. the volatility perspective comes down the high dispersion in the market and low correlation. these have been flipped on their head. all the metrics are climbing. they aren't at alarm bell levels, but we are at a psychological 20 threshold of the vix and thinking back to the trade war situation from 2016-2020. the questions i'm being asked now are different than last year. it's about how much higher can we go for volatility, how much more downside can we see versus the other way around. lisa: if the duck fell off of the waterfall, i'm curious what that means in terms of how much less desire there is to go into stocks that have implied volatility that is significantly higher? the volatility itself lowers risk-adjusted returns given how much higher the risk is. lori: from our perspective, we

thought that it would be a rocky path to 6600, and that is still our call, but we are questioning the rocking this and how rocky things -- rockyness and how rocky things are going to get. three models are on the cusp of misbehaving, so i felt compelled to write a bear pacing we are on a good path but it's possible we could get knocked off, and if we do it will look like 5775. we are not making the call that we got knocked, but we think risks are rising. we entered the are saying 5% to 10% drawdown. at think the duck would have been furiously paddling but still alive. lisa: we killed the duck. lori: we killed the duck. we keep writing the risk of something deeper than a 10% drawdown going into what we call the second tier of fear, and that is rising. we are saying that we have to write the year off, i think there's a good chance to stay on that path, but we are at a

tricky spot and i think the next few weeks are pivotable. lisa: in the derivatives trades, if people are putting calls for another 15% to 20% down that you haven't seen for years? amy: so far, the answer is no, but i like lori's second tier of fear. what is the cost of a one standard deviation drawdown in the market? what is the cost of a three standard deviation drawdown in the market? when you look at that over five to 10 years, we are floating in the 40th and 50th percentiles. the second tier of fear, the growth scare, whatever you want to call it, that is not being priced in as an actuality, but i think the risk is climbing. annmarie: do you think the president pays attention to the markets if it is a 15% to 20% drawdown? lori: where does it even exist? when we get to the end of tier one of fear -- and i scared

everyone when i talked about it. i apologize. jonathan: tier of fear sounds frightening. lisa: with a dead the. [laughter] lori: tier one, the 10% drawdown, is hence of panic. that's the first battleground. it will be interesting if we have adjustments at that time and you have technical levels coming up here the second tier of fear, these are issues like 2010, 2011, when he 18. we are in an industrial recession, we have the debt downgrade, the european debt crisis. these are big scares were people thought that something systemic was going to happen or that we were headed straight for a recession. we pulled back from the brink, but there was a tremendous about of fear -- tremendous amount of fear. annmarie: i got the sense that the market isn't in line with the administration and where they're going with tariffs. this market thinks that everything is a negotiating ploy. lori: i think there has been

continual confusion about logic of the ministrations' as goals when it comes to tariffs. for non-us investors particularly. we're seeing money go back to europe. you can put two and two together and this is having an impact on the desire to be in the u.s. equity market. think what i toom the speech yesterday is i thought that there was a statement of philosophy. i am an old high school debaters and when people present their case i am appreciative and am there to listen. i understand what they think they are trying to do, i just don't think that the street is buying it. you had that discussion in the speech where you're talking about tariffs, and we are also trying to lower 10-year bond yields, trying to get gas prices lower, trying to pull people out to look at the big sure, but i think that investors i talked to think that tariffs are inflationary and prices will be passed through. that's what they've been saying on one transcript after another, and i don't think you will find that. jonathan: we spoke to francis

and he said we have a sequencing problem. later this year we might be talking about something different. you start with trade and finish with taxes. steve from federated said that the second half will be better than the first half or equities. when you look at equities pricing, do you see any of that developing? amy: sadly, the 10-year shrinkage in the options market because so many people now trade options, the timeline has gone from six-month month out being something that you could read the tea leaves four, to being more muddy. right now it doesn't indicate that as we get closer perhaps it well. i think that the biggest indicator for me as we start getting those second, third, standard deviation drawdown to euros of fear -- drawdown tiers of fear.that means the alarm bells are starting to ring. we haven't got there yet. jonathan: can you explain the extent of fear you can identify now. high yield spreads are still

pretty tight. we had a 5% to 6% pullback. it feels dramatic but isn't actually dramatic at the index level. how much fear amy: that is about the level now, but one thing that is problematic is when you had several years we are correlation is low and dispersion strategies have been popular. volatility harvesting has been popular. there is a buildup. one thing that we've been talking to clients about is that a growth scare or third deviation standard drawdown in the market can trigger unwinds of positioning use august 5. -- you saw august 5. isn't one -- lisa: what do you make of the argument that this is by design? that this administration once the stock market to fall, wants weakness, wants to lower 10 year bond years to redo something they're trying to do in the theory scott bessent was

presenting. amy: you even heard this in the speech yesterday about main street not wall street. i think they've been clear in their focus on the 10-year yield. what the intentions are regarding the equity market aren't as clear. i would say what i took away from the speech yesterday is, it's not the highest priority. to step back, i am an equity strategist and have been doing this for a long time. it is not the policymaker's job to prop up the equity market. whoever is there, you want them to do what they think is the right thing to do. it doesn't mean that equity investors will like it, but i took away yesterday from the speech that i wouldn't say that it's equity market specific, but the idea that there might be short term pain for longer-term goals being achieved or longer term gains. that was the theme i took away from the presentation and it is important to keep in the back of our heads as we try to navigate the six to 12 month period, which is very much the short term. jonathan: in some ways it is

refreshing to the past few decades. lisa: if there is a goal that can be articulated clearly. it is refreshing and potentially a lot of people agree with the goal. the question is, can you orchestrate short-term contained pain that doesn't take on a life of its own? jonathan: 8:30 eastern we get the payrolls report and receive there is pain in that year later we hear from chair powell. especial thank you to the amazing team, the phenomenal team, at rbc. let's get you an update on stories elsewhere this morning with your bloomberg brief. dani: world health organization asked some employees to consider early retirement, trying to cut costs after president trump withdrew from the agency. sources tell bloomberg that step 55 or older by june received a retirement offer with performance of pay. it's unclear if the who will resort to layoffs if not enough

staffers take the offer. shares are tumbling after reports that the pharma company seeking raise capital for legal troubles in the u.s. it already spent $10 billion of the 6 billion that it set aside for lawsuits over the round up product and it has agreed to pay almost $2 billion to settle cases related to toxic chemicals. texas is expanding its role in next year's fifa world, beyond matches. dallas will now be home to the international broadcast center and host 2000 members of the media for the 2026 world cup. the texas city will serve as the tournaments media hub and the site of nine games, more than any other location. maybe another reason for the goldman sachs employees to move to dallas. jonathan: that is exactly what i was thinking. the negotiation for 26. just for the summer. lisa: have you ever been in

dallas for the summer? seriously? do you like heat? jonathan: i like the air con. it works for the summer, the world cup. go for the world cup. lisa: i could get down with that . jonathan: thank you, now you are on board. >> i have agreed not to talk about perspective fed policy going forward. i would hope that the failed team transitory would get back together and think that nothing is more transitory than tariffs if it is a one-time price adjustment. jonathan: getting the band back together. next, ellen zentner of morgan stanley. ♪

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jonathan: the payrolls report is about 40 minutes away, look out for more economic data coming up. under surveillance, team transitory. >> i would think over the coming months we will have a couple of adjustments. can tariffs be a one-time price adjustment? yes. i have agreed not to talk about perspective fed policy going forward i would hope that the failed team transitory could get back together and think nothing is more transitory than tariffs if it is a one-time price adjustment. jonathan: treasury secretary scott bessent taking aim at the federal reserve while defending president trump's tariff agenda. chair powell speaks following the payrolls report later this morning. ellen, good morning. team transitory, how transitory are tariffs with regard to inflation? ellen: it depends if

there are spillover effects. a lot of people like myself go back to the washing machine example from 2018. tariffs on washing machine should be a one-time price shift, but it is unlikely that you'll get a washing machine and not a dry even though the tariff is not on dryers. there is a spillover. tariffs fall here, there, and everywhere, and you don't know exactly where along the production process that the share of prices is going to fall. we know that chinese manufacturers absorbed a good deal more of it in 2018-2019 than we thought, but you still have parts that showed up through the production process the intermediate and final goods for consumers. it will happen this time as well.we know that . if anyone tells you that consumers won't pay at least some of the price they are

pulling the wool over your eyes. consumers will pay. does that mean you don't do tariffs? not necessarily. does it mean the fed will not have to raise rates right away? that is not necessary either. lisa: there is a question about if consumers will push back and not by as much of certain products if they have higher prices are that leaves companies looking for efficiencies, i.e. job cuts, to save costs. you can see it come into the labor market. is that a ridiculous extrapolation? ellen: not at all. it is perfectly plausible. i don't think that households have unlimited price tolerance. wealthy households to do but they are spending more on services than goods. you will see a hit to aggregate demand, because we will substitute away for other cheaper goods or pull back on buying altogether.

companies have a couple of choices if they cannot raise prices, because that is one choice, they would look for concessions from suppliers -- they would probably get some concessions. the other is controlling costs in other ways,which lisa: and 40 minutes? will he give us a sense of the path ahead or be backward looking to assess momentum into this period? ellen: a lot will treat it as backward looking because we know that the federal layoffs won't show up until next month's report. i was in d.c. at the national association for business economics conference. what a somber mood. the data agencies have been chaotic with no warning of departures. a good deal of probationary workers are survey takers, so there's concern over the integrity of the data going forward. funding for the agencies. being surprised by how many took the fork buyout, and then being

faced with layoffs. i have to work that in because it didn't feel good, but of course federal employees are in the crosshairs and d.c. is heavy with them. of course it won't feel good in d.c.. those workers won't show up until the march data. the headline will get knocked around from positive payback from the wildfires and if depressing last months payrolls show in upward revisions. that takes some of the excitement out of the big payroll number. i will be watching flows as well. we haven't been talking about immigration much. 150,000 on average we were adding to labor supply in 2023-2024. that's probably -40,000. jonathan: things could get messy in months to come. ellen: the unemployment rate could be lower regardless of the

headline number. jonathan: next on the program -- ♪

>> if you look at the label market it has been a quiet trend. >> i do not know in the way that

it is going to a job losses on the federal level. >> it might be all total that the negative hit to employment is slower to unfold. >> we have an economy that is fully employed. >> this is bloomberg surveillance with jonathan ferro, lisa abramowicz and annmarie hordern. jonathan: the third hour starts right now, equity futures posited by .10%. later on, eight: 30 eastern time, important economic data and jobs data around the corner. later on he will hear from two important individuals for financial markets on the planet. you will hear from chairman paola 12:30 and then the president later on this afternoon at 2:40 one he signed some executive orders. 29 minutes away is a payrolls report and the estimate is 160 k. the question we got, will any weakness start to show. lisa: the expectation is that it will.

you are looking at a whisper number over 125,000 at a time. the consensus is 160,000. how much is this market biased to negative news, weaker data and will respond asymmetrically and more significantly to the downside and the upside surprise. annmarie: how much of policy uncertainty might impact the report. the doge affects or the hiring freezes? i want to know when the president speaks depending on this number will it be biden data or my policies that he is happy with the pending on the number. jonathan: a lot of the officials have made the same point that the week data ism in manufacturing and consumer confidence is so-called biden data and not trump data in their mind. they seem to be preparing us for a weaker economy. we heard from secretary bess and say that there will be a detox period for the economy. they are talking about making it

from eight government fueled u.s. economy to the private sector picking up the slack which will take time and how much pain they are willing to see is the big question that we have to answer. lisa: or what does detox mean. does this mean that the equity market could fall? or we could actually see layoffs pick up and there could be significant weakness? is there something where we want to allow ourselves a six to 12 month period, tend to move fast and furious as -- various and offer these other policies. when you start taking layoffs that takes on a life of its own. jonathan: we will see how high the threshold is. two important headlines from the president. we will see some disruption from trade the market, for what -- for the stocks? we are not even looking at stocks? annmarie: the president continues to say and we heard this yesterday that there will be bs adjustments and disruption period. it might not be smooth but they think the pain is worth it to get to the final destination. jonathan: equity futures posited

by point 1%. coming up, the stocks look to pounce back from a tariff selloff. stephanie roth and while she says it is downhill from here and mohamed el-erian reacting to payrolls. we begin with stocks on course for their worst week on heightened tariff uncertainty. the risk of prolonged trade tensions has increased, and the equity market is likely to struggle until there is clarity. we reiterate, a near time -- a near-term view of capital preservation strategies. let us talk about this, when will we get clarity, when do you expect to get any clarity on these issues? nadia: we are being told april 2. at least we will get some sort of plan of what these tariffs could look like. april 3, some of these might be rolled back and we are not certain about what the duration of some of these will be, the ultimate scope and magnitude. hopefully in the next several

weeks we will get clarity about the direction of travel and where we end up still remains to be seen. jonathan: we do not have a policy mix problem, it could still be favorable. she said we had a sequencing problem that we are focusing on trade and then we will have to wait to focus on tax. is that how you see things? nadia: our view is that you will not get tax cuts, an extension but nothing new. the numbers do not add up with the campaign promises and the pay force it does not make sense. those will be hard to reconcile. ultimately, we do not think you will get a boost to the economy from that. right now in terms of tariff, if that were to come later, would it be as disruptive as it is now? probably so because the president put a lot of numbers from 25 to 60 to 10%. and, the duration keeps changing. lisa: april 2 is the start of

the negotiation but the tariff -- not the tariffs in place. what do you do during negotiation when you do not actually know what will stick? nadia: that is what you are seeing in the soft data is that companies are paralyzed and having difficulty planning their schedule for the rest of the year and what to do about capital budgets. we have seen already the whiplash that you are seeing. one day the tariffs are on and the next day off. that makes the outlook difficult to get a handle on. it is hard to have any strong conviction right now in the markets because you do need that clarity to be able to plan and forecast earnings estimates by the end of the year. until we get more information, i think we are still in this wait and see moment and that is where the market will be traded in this range and be somewhat volatile. lisa: every single guest said i am exhausted this week, and there is this feeling of

exhaustion exhaustion trying to process all of the different headlines and i wonder at what point people say why should i bother and borrow with headline roulette and for the volatility, for now, park it in europe with some momentum and positive news coming out with growth better than expected this morning and the potential for fiscal spending? nadia: you cannot just park it all in europe. what am i -- what i am seeing is that you are seeing flows into europe. and a lot of it right now is really from foreign global fund managers who have been underweight europe and are trying to right size that. tariffs are also likely to be placed on europe. so what does that mean for the european economy. don't get me wrong, we are positive on markets like germany and quite selective in europe because we think that the pickup in spending around defense and the reforms that could happen will be a positive.

but you cannot put all of your eggs in one basket and this goes back to the diversification story. lisa: 13 minutes ago and there is a question -- 23 minutes. jon was looking at me like you are doing it wrong. jonathan: leave the counting to me. lisa: 22 minutes and 30 seconds. i am curious about how much that will color your perception about what you will expect going forward even the fact that we will see a loss of momentum more significant heading into this call it whatever you want, or potentially the opposite. nadia: we have had conversations, bad data versus good data. we are in this environment where bad data is good data and good -- bad data is bad data and good data might be good we are not sure. if we get a strong payroll number that could alleviate concerns for now. it does not answer the questions on what tariffs will be and what the implications will be and

what will doge be on economic growth. that will still hang over the market. you are seeing the defensive position in the market and the outperformance of those sectors. with a bad number, that will confirm some of the data and so that soft data becomes hard data and it is a question of whose it will be. jonathan: i remember when defensive stocks were growth stocks. i wonder how much is this about the economic data and how relevant is it to the performance of the nasdaq over the past month? nadia: some of it is concerned around economic data and you are seeing the outperformance of consumer staples and health care, although we were doing that thing i talked about. when it comes to the nasdaq it has to do more with deepseek, and there is a tariff concern and stricter regulations around chips. we know that the ai diffusion rule cap can go into effect on

-- in may which has the application of what it means the ability to export american technology and the opportunity potentially of opening a window for china to catch up which has been doing more with less. jonathan: people are talking the -- talking about that. but can we finish on china. are you allocating on china with the idea that this might be at america's expense? can you see a situation where chinese and american tech performs well or does one perform at the expense at the other? nadia: china tech left it -- is keith -- is keeping up but it is catching up. i think in terms of american technology, i think at the end of the day there is a need for computer power. what will be important is the continued spending, but also not so much export controls on ships

and american innovation to our allies like those in more -- in europe. if you do see that that becomes a situation that will dampen american growth within the tech. we think both can perform well and you are seeing a bit of a rotation. look at some of the results we have gotten in the continued demand for computer power and nvidia said last week 100 times more is needed as we move from training to infrastructure. jonathan: can you learn something for how the market responded to that? the stocks are doing terribly. nadia: it is the concern about the ai diffusion rules going into play. there is a question of how much computer power will you really need? only time will tell. if we see these slows caught -- low cost models come out that these lowest cost models are being trained off of frontier models which need the chips. so we think that the frontier models will have that demand for compute power. at the end of the day when you

use ai and we all show up here as an avatar, that will require -- lisa: i think it is lovely. jonathan: i am not interested in that. nadia: at least it is positive today. lisa: ok. jonathan: i have never seen someone so defensive about being accused of being happy. lisa: it is important to present a counterbalance to the doom and gloom in the second tier of fear. we need to have a realistic conversation about how much we are on the third tier of fear and maybe -- let us just move on. jonathan: i would never accuse lisa of being unhappily. annmarie: and you will be in salt lake scilly -- salt lake city skiing. jonathan: we appreciate it. we are 18 minutes away from the payrolls report. let us get you an update on stories elsewhere. dani: president donald trump is doing some mexican and canadian goods covered by the american --

the north american trade agreement from the 25% tariffs like certain fertilizers and autos. they are expected to take effect april 2 and he is set to unveil reciprocal tariffs. elsewhere trump says that he will probably extend the deadline for the tiktok sale if a dale -- deal is not reached by april 5. they had authored a 75 day reprieve from the january 19 deadline. however, it is not clear if the president could legally offer significant additional extension without a deal. a check on broadcom shares, rallying up nearly 10%. the company supplies chips to apple and other companies gave an upbeat forecast. it is suggesting that the boom is going strong. that is your be -- that is your brief. jonathan: more from her in little bit later. up next the morning calls plus becky franco which -- becky frankiewicz.

in the estimate in our survey, 106 decay. from new york, this is bloomberg. ♪

jonathan: andrew of citi, could this be the last solid jobs report and goes on to say subdued hiring an upcoming government layoffs mean that labor data will weaken and the couple of -- in the next couple months. taste of what we have seen on jobless claims. we look at payrolls with the number dropping in about 14 minutes. they are looking at 160,000.

a: 30 eastern time you will get the results. equity futures are going negative and we are down by not only a 10 -- .10%. let us get you some morning calls. cosco price target raising two 1125. the second call from barclays late -- raising its price target to gap citing its guidance as conservative and beatable but something that lisa has talked about on the retailers side. and finally, quibi rank -- keybank raising its price target. the firm is optimism -- optimistic about its place as an ai to provider. welcome relief from the chip sector. as we count down to the february payrolls report. becky of the manpowergroup writing "the labor market is pause for a big thaw after a winter of uncertainty and right

now it is more like the great weight." welcome to the program. walk us through what you see in business at the moment and how things have developed what you -- versus what you expected. becky: we entered 2025 with a tremendous amount of optimism from american business leaders, almost anticipating and wailing economic growth. a few short weeks later it has turned to caution. one thing has remained, the u.s. labor market has been fairly resilient. i know we are seeing cooling and it is for -- important to focus on data versus dialogue on where is there cooling and where are we seeing pockets of growth. that is what we are studying. lisa: are we seeing pockets of growth in areas that could absorb federal workers that are being laid off? becky: they make up about 2% of all federal jobs and the percentage is going to be impactful but it is distributed. we are hoping that some of those

workers come back into the economy in other roles. the places where we are seeing strength are actually a little surprising. project managers. when you see that start to increase in the double digits from january to february on job demand, that means that companies are starting to unleash a little bit of investment in transformation and innovation. that could be an early indicator of things starting to thaw. science, r&d and anything around getting your data ready for ai. that is a hot topic, so anything that gets data clean. not to be left out, truck drivers, the demand is up 50%. so, real strong pockets of growth in addition to the cost-conscious american consumer is alive and well. dominoes, walgreens, walmart, amazon, panda group, panda

express starting to hire in the country. we are seeing pockets of growth. there are areas of softening. annmarie: what is behind that? the policy uncertainty that we hear a lot of corporate executives, -- talk about? becky: absolutely. we are seeing this great wait. it is on a two party side. on the employer's side they are waiting to see the impact of tariffs and what will happen to the economy. project managers could be a glimmer of hope. but we are seeing a great wait for employers and a great wait for employees not quitting their jobs. they are actually starting to decline so people are uncertain if they can change jobs. you see people not moving and not hiring and it is quite stagnant in terms of the labor force. so people are not taking big steps out in terms of confidence

on either side of the equation. that is showing up in surprising places. government spending, we expect that to tighten. . annmarie: who do you think has the leverage? the employer or the employee? becky: a great question. the data says the employer has the leverage. in the mental state, the employee believes they have the leverage and perception is reality in terms of tight labor market. i will also say it with anyone with in demand skills, anything around data or the science area. i heard your guest talk about

computer power. very high demand. interestingly, we saw a new insert called outlier inc.. they are an ai platform that bring workers from the gig economy into companies. we have never seen them before and they showed up. lisa: we are a little bit over eight minutes from the nonfarm payrolls report. there is a big debate about whose data it is. is it biden or trump data and what does it become trump data? how long is the lag for policies to be felt throughout? how quickly doesn't move at a time where it is something of a barge? becky: you said it best, it is a barge. the jobs report is a look and a rearview mirror. we are not going to see the big impact yet in the february numbers. anticipating that we will see that softening pull-through in march but it does not matter whose data it is.

it is the american public we need to focus on and we are seeing softening and big areas. it is not a full on freeze but some softening. that slowly starts to take effect and i do not see that dropping off a cliff. jonathan: how difficult is it to get a new job if you lost your old job. we looked at claims. jobless claims r.o.k. but continuing claims remain elevated. there is a theory that if you lose your job you will be staying out of work for a while. it is getting harder and harder to find a new position. is that what you see? becky: we have seen the number of days it takes to get a job, a lot of volatility. as we exited the year we were saying about 45 days. now we are seeing that move up again. back to equilibrium, the reality is that the data would say that power is with the employer but employees feel that power. or they are losing a job they are going out with confidence

and it is taking 10 to 15 more days. jonathan: you are one of the best at breaking it down. what they are seeing right now in the jobs market. that is an important question, the trends on the moment based on what we heard, a few of them are a little bit concerning. lisa: if it takes longer to get a job, think about what happens. if you do not have a reliable source of income you will not spend as much. the uncertainty will reduce some of the pressure you will put on certain accommodations or maybe you moved to salt lake city or dallas. there is a question about the longer-term implications about short-term disruptions. annmarie: if you do not have a job you will not spend that much and this is an economy driven by hedonism and at the same time will you spend more if potentially even if it is transitory, prices are higher because of tariffs. jonathan: these are assessed -- subtle adjustments. if you are a federal worker with job anxiety, you would pause as

well. the great wait. and i think that will grip a lot of people. lisa: i do not want to go psychology, but there is a psychology to the question. the idea of the fear of losing a job and the idea of being out of work and the trauma of being laid off. some of that can have longer-lasting effects because people are not just little pongs in a system and they are humans. that can be seen in the economic data and it is something worth discussing. jonathan: the president talked about short-term disruption. the jobs report is about five minutes away. going into it we are seeing major swings in financial markets. we had a pullback on the s&p 500 almost 3.5 to four percentage points. the worst week going back to september of 2024. elsewhere, rate appetite for equities in europe and china.

europe has had a massive move in the german bond market. and in the fx market, we have seen the biggest weekly gain for the euro in years. going all the way back to 2009. euro-dollar positive by .6%. 1.0 855. will the data that drops support the u.s. dollar? tort moments away. the median estimate is $160,000. joining us to break it down with stephanie roth and kathy jones and muhammad ali arian. and mike mckee with the numbers. from new york, this is bloomberg. ♪

jonathan: the payroll reports is 20 seconds away. equity futures look like this. we are positive but only just by 0.02%. nasdaz up by .10 and the rustle up by .2. the bond market scores look like this. yields are lower by three or four basis points. the number we are looking for is 160 thousand. with the prince, here is mike mckee. mike: this is pretty much in line. it does not look too exciting. 151,000 jobs created, just

slightly shy of the 160,000 anticipated. the change in payrolls revised down to 100 25 from 140 three. unemployment up to 4.1% and we will look for detail. private payrolls, 140,000 up from 111,000. and you factoring, 10,000, a significant gain. the average hourly earnings up .3%. you can see this matching the estimate as you are a 4% gain on a year-over-year basis. average weekly hours, 34.1 the same as last month. we thought that companies were coming back on production and that was the poorest to reverse but it did not. the labor force participation rate down 62.4%. some question on if that would be happening because of the people who are not crossing the

border right now and getting jobs. i will look deeper into the numbers and let us see what the markets are doing. jonathan: of course we often say that we see it every single month. the first move is not the right move. i can give the early interpretation. in this report there is no big news and that is the news. there is no big bad news. the equities pick up. on the nasdaq we are up by .8%. the russell recovers by 1.4%. you will see a similar story in the bond market with yields lower going into the number and coming out of it we erase that move with yields marginally higher. at the front end of the curve by a single basis point. 4.28 in the euro looks like this if we can check out the effects of market. euro-dollar coming back just a touch. the headline number comes in at 151 and the estimate is 160. no big shocks on wage growth.

this is coming in at 4.1% and i will repeat the early interpretation. the news is there is no news. lisa: the idea of the drama that we have been hearing is absent from the pure economic data that comes out and it is line by line and it is fine and we can go to that question. there are some aspects that people will hone in on and i want to see details. it is the underemployment and labor force participation rate which declines. hours worked stayed in line that it is expected to creep up but these are signs of companies pulling back a touch and more slack being built. jonathan: just to bring you back in, these are subtle shifts and no big surprises but a subtle mood shift that you are starting to identify and the underlying information and it is something that andrew from citi picked it up and he said that this is the last solid jobs report and we could see weakness.

is that how you interpret some of this data? mike: we are going to see the weakness reflected in government payrolls going forward. this time we saw government up 1 -- $11,000 but all of that in state and local governments, federal down by 6700. state governments were also basically unchanged. it was local government spending. bloomberg economics has pointed out that some of that was financed by stimulus money that has run out. so, in those areas you might see some retrenchment. one of the other numbers that we have to be careful with is there is a decline in retail employment during the month. 15,000 but about 10,000 were workers on strike against a grocery chain in colorado. the strike is over and they will be added back in next month so some crosscurrents overall. lisa: i am looking at the

revisions lower across the board. the prior month at 143,000. it was -- it was revised downward to 125,000. is there a tell to the direction we have seen in the cumulative data about downward revisions to make us think that there is not the same upward revision trend that we saw a couple of years ago. mike: you could, particularly looking at average hours that the economy is slowing and we are not getting -- we are not giving as many people as many hours as requested. the other aspect is bad weather in february. it might be people that people who cannot get to work, people who are restaurant workers and service industry workers, they work fewer hours so it shows up that way. it might reflect a little bit of what is going on with the lower average hourly earnings than expected. but i think the point is, and

john was alluding to this is at this point what we are looking at is an economy that has not changed all that much and you can find reasons why it is a touch lower, maybe the weather. but you do not have a whole lot to go on that tells you which way it will go from here. jonathan: thank you and we appreciate the update. we can continue the talk around the table with stephanie and kathy. just first to talk about the economy. first look and first take? stephanie: not expected. the headlines are different than the data. the big difference is the timing mismatch. the survey just fell before all of the significant layoffs. the next payrolls print will look a lot uglier. we cannot really have a sigh of a relief as a result of the data because we will be hit pretty significantly but we will look at those prints around 100 hundred -- 100,000 if not slightly lowered? kathy: i think they slow down

and that is taking place and more of it will snowball going forward. one of the things when you have fewer hours worked and you have less aggregate income meaning less spending power for the consumer, which will ripple through. and then you have a level of uncertainty where every day is a new policy. if you are trying to plan business activity going forward, forget the consumer, do i have a job are not think about businesses. what does my labor force look like and what are the material costs and can i get my hands on the materials and what will the -- what will the demand look like and those are questions that will make people freeze. lisa: that is the reason why a number of people have raised the point. people are trying to understand the momentum into the period to understand the potential resilience for the u.s. economy to deal with that uncertainty. 151,000 is not bad but a pretty solid labor market. how much give do we really have?

stephanie: it is fair. but now all of a sudden we had a sudden surprise to activity. i do not think folks were expecting the extent of government layoffs and the contractors tied to them. and the immigration stuff, the cutoff of january 20. that was 75,000 workers to the workforce. that is cut off and their visas will start expiring over the course of the next two years. stephanie: do you think -- annmarie: do you think an end is more possible because they are moving from a public policy to private sector jobs. stephanie: that will take a while. the end game might result in a rebalanced economy but that does not mean it will feel good. jonathan: this sounds very bullish for bonds, is it? kathy: we are still in the camp that the fed is on hold for a while because i have to sort out the crosscurrents and inflation potential from tariffs. they cannot do anything. in the long end, you have

probably slow down which bring yields back down in the 10 year around 380 or so but not until we see the data because you are offsetting the potential inflation from tariffs. right now we are bouncing around waiting to see which plays out first, the inflation or the slowdown. right now it looks like the slowdown before the inflation. we do not know day-to-day what tariffs look like. jonathan: welcome to the program, the jobs report came out moments ago and it came out like this. 151,000. we were looking for 160,000. for now, we bring mohamed, let us get the jobs report. what is your interpretation? mohamed: i think you captured it well when you said no big news. the only thing that i would be monitoring is the labor force participation but everything

else came in as expected. and i think everybody is right in saying what is more important is ahead of us and not this report. lisa: that said, we have talked a lot about the momentum and the fact that it takes a lot of time to turn things around. is there any part of this report that makes you concerned about the level of exceptionalism coming off of into this period of uncertainty? mohamed: not in this report but a lot of other data. the edge of the u.s. has been predictability, transparency, and you are starting to see more business is step back not just on a short-term basis but really think how much longer do i need before i figure out what is my operating advisement. and that builds on itself really quickly. the risk is below the economic exceptionalism which is strong acid price-performance and has

been this notion of the u.s. edge. and, i worry that this is being eroded right now. lisa: are you saying it is the depth -- the death of u.s. exceptionalism? mohamed: it is under enormous pressure and we have attributes that other countries would dream of. so, we do not kill the u.s. economic exceptionalism but you can put it on pause as people try to figure out the operating environment. jonathan: we are five to six weeks in a new administration, has so much change so quickly in such a short amount of time? mohamed: there have been a lot of changes. just go to germany and see what is happening and look at the debate. it has been a sputnik moment in terms of defense and infrastructure spending. all i can tell you is that all of the consensus trades at the beginning of the year have been upended, every single one of them, currency, relative u.s. equity performance and i can go

across the board. every single consensus trade has been upended. and that is significant trade. lisa: it raises a question how much is this a trade or a shift that could get implemented in data that takes time. i would ask you that. how long is a transmission mechanism for some of these things at a time where there are fundamental policy shifts that will take time to implement that it takes longer time to ripple through the underlying data and sense of strength? stephanie: it could take a couple of months for us to see it. today, the february data looked fine. march data will reflect this in the next three months we will see the impact. the impact from tariffs takes around three to six months to work into the cpi data. the payrolls numbers we will start to see in the next couple of months because of a lot of the job cuts are immediate and then the government contractors, the fallout from that afterwards.

i would expect in six months we will see a lot more of this reflected in the data and we will see it in the next couple of prints. annmarie: mohamed has been talking about how the government has been forward-looking, how do you make bold moves, do you hide out in cash? i am serious. time with the reality checks coming out where there is not that much news in the economic data. kathy: i do not think cash is the solution because you know, it gives you some optionality. the liquidity is a good idea and i think people undervalue liquidity and asset allocation when things are good. we have handed -- we have had a long stretch of everything is great. and you do need liquidity. but we are keeping the benchmark duration right at benchmark. we are not extending and we hope to see on opportunity and there

is too much noise to take that risk. you do not have enough excess return to justify taking a lot of credit risk. and we do not know what industries are going to get hit. some will suffer and we expect spreads to widen. jonathan: europe has had a long stretch of everything is bad and that has changed quickly. i remember in early november, you said to us on the program that sucking sound you hear his capital from the rest is -- is capital from the rest of the world into the united states. that sound heard was capital going elsewhere. what's that -- what do you think about the reversal inflows that a lot of people have identified and how sustainable do you think it is? mohamed: that reversal makes sense given what has happened. is it sustainable? i do not know. the jury is out as to whether that europe will go from words to actions. it is not easy politically and

socially. they have governance issues. i am not sure that the reversible continue for a a while. but i understand why because there has been a shock to all of the conventional wisdom in the u.s. and europe. lisa: has there been an end to the sucking sound to the united states? mohamed: you will see the data and you'll see that there is certainly less inflows into the u.s.. but, has it completely stopped? i really doubt it. the u.s. has some attributes that are very difficult to mess up. so, the u.s. is still, whether you want to call it the cleanest dirty shirt, that it is not as clean for outsiders as it was a few weeks ago. annmarie: where was everyone? the president was talking about some policies leading up to the election and then for months

between the election and inauguration. everyone knew what his plan was and why is everyone shocked? mohamed: sequencing and you talked about it earlier. we know the five areas in which he is going to move. two are unambiguously beneficial to the economy and three have good and bad to them. there is a journey issue in those three. and the hope and the market expected that the sequencing would not be what it is now, what you are getting now is we have to go through the detox and the disturbances, and then we will get a good. the market expected the dead to come much earlier. therefore, offsetting the bad. that is not what has happened. jonathan: you are nodding. do you agree? stephanie: we were expecting tariffs in the later of the year. -- later in the year. this has a legitimate impact on the economy and the uncertainty

is greater than anticipated. to the point earlier on capex being per -- being stalled out, it is hard to make investments when you do not know what things will be from a tariff perspective. jonathan: next week is a cpi number on the 12th on a wednesday. i want to come to you on a final question. secretary bessent that he would like transitory to get the band back together and look through any inflation for coming off of the back of the tariffs. i wonder how you feel about team transitory getting the band back together? mohamed: i go back to what stephanie said. there rose path -- there is a path through tariffs and companies are much more agile and how they think about passing on prices than they were before. so i think, if team transitory comes back together i would not have them commit to too long of a playlist. jonathan: that is a good way of putting it. thank you.

on the federal reserve and the jobs data in this market as well. thank you to stephanie and kathy. let us get you up to speed on news elsewhere. some of the top stories in the bloomberg brief. dani: let us recap the most recent data. hiring remained firm in february and nonfarm payrolls rose 151,000 which comes in just shy of elston -- of estimates of 160,000 jobs added. the data was revised lower. the unemployment rate edged higher to 4.1%. elsewhere, walgreens boots alliances going private. the deal is expected to close in the fourth quarter this year. the purchase price and 8% premium. shares have seen a steady drop in value over the last several years. goldman sachs is pushing managers to move away from

expensive office locations. dubbed as project voyage. the aim is to drive down costs and tap a pipeline of talent emerging in cheaper regions. they are telling managers to relocate to dallas or salt lake city. that is your brief. jonathan: appreciate it. the opening bell is 42 minutes away. opening futures positive by .2% -- .10%. chairman powell later and you will hear from the president of the united states. this is bloomberg. ♪

jonathan: 20 minutes away and we will be catching up with the

national economic council director off of the back of this payrolls report, 151,000. no big headlines, 160 was the estimate. equity futures on the s&p 500 shaping up as follows. equities are posited by .1%. the nasdaq 100 up by .2%. the trading diary into the weekend and into next week, at 12:30 eastern time remarks from chair powell. at 2:40, president trump signing more executive orders. coming up monday, the two day e.u. ministers meeting begins plus president trump's 25% tariffs on aluminum and steel. on thursday, ppi. on friday, the u.s. government shutdown deadline. we need to talk about that. can we avoid that? annmarie: it might be avoided. tyler kendall joins us with more. what are you looking for

throughout this afternoon? tyler: we know that president trump will sign some executive orders at 2:30 p.m. eastern and then address the white house digital asset summit. we are expecting two dozen crypto leaders to be here including executives from companies like coinbase and robinhood. president signed a bitcoin reserve that went a little under expectations from the industry. we will watch to see what he says during those remarks as well as the oval office remarks vetting opened up to the press. we are looking forward to your conversation with kevin hassett because this white house will have to thread the needle as we have been discussing that there will be weakness in the months ahead when it comes to the labor market. i am not quite sure how you transition from biden to trump data or if you can backtrack of the one republican message me after the jobs report broke saying that is very lightly that this white house will blame structural issues on the last administration. annmarie: if you see the

commerce secretary ross around the white house ask him about the jobs report, is it biden or trump data. let us talk next week, are we headed towards a shutdown? tyler: president trump said that he instructed house republicans that he would like to see a continuing resolution through september and they might be able to get on board considering that republicans hold both chambers of congress, although reporting indicates that there will not be a plan until late in the week. i will point out the timeline that president trump outlined because it indicates that congress knows it will take time to get through his other policy priorities. republicans would like to get the government shutdown off of the table and kick the can down the road so they can focus on some of these fiscal agenda items such as his tax cut plan that the president would like to see get through. jonathan: we appreciate your time and looking forward to your coverage. tyler kendall in the nations capital. the week is not over and we still have to hear from chairman powell and the president. lisa: at a time when the

takeaway was the economy is weakening but not weak. we have more than three fed rate cuts priced in through year end. jonathan: do you remember the oval office meeting between the president of ukraine and president of the united states? lisa: it seems like last year. annmarie: i was like -- i was at the white house. jonathan: what a week we have had. look out for us a little bit later at 9:15. we will be catching up with the national economic director. ♪

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matt: tpaourpbts lower after a miss on the nonfarm payroll. i'm matt miller. sonali: i'm sonali basak. aoeurbgs i'm katie greifeld. bloomberg "open interest" starts right now. katie: payroll misses estimates but not as much as feared. we will have the reaction from the white house economist. matt: fed chair powell takes the mic as the markets are in