jonathan: i've spoken his people. lisa: meeting him. jonathan: yes.om: it is short, i can see mcdonald doing that. jonathan: we will see. tom: everyone here is wearing a patagonia. in london there dressing. jonathan: i can't speak for london in the weekend, everyone is naked because they have ever seen the sun before. i hated. tom: you go flip flops though? jonathan: i hate that, too. tom: i can see shorts and flip flops in the winter. that would be jonathan ferro. i can see you with those flip-flops. i'm going to get some. jonathan: shorts and foot flops. they shop along anywhere else. -- they do not along anywhere else. this is bloomberg. this is bloomberg. -hi, i'm smokey bear and i made an assistant to help you out. because only you can prevent wildfires. -hey assistant smokey bear, call me papa bear because i'm "grrr-illing" up dinner. haha, do you get it? -yes. good job. -so, what should i do with all of these coals? -don't just toss them out. put them in a metal container because those embers can start a wildfire. -i understand, the stakes are

jonathan: wow.w: if you look at where the fed wants to get to, i think it is significantly higher. jonathan: interesting. andrew, interesting to catch up. that september call is where the tension is. a good friend of this program said this coming into today. the fed is boxed into a 75 basis point hike. things will change by september, he says, chair powell cannot claim victory. tom: that was brilliant with andrew. he is a very different yale economist. the attachment here, yes, they will raise rates, and then what? both of them are saying they are restricted from crushing this economy in their own ways. jonathan: do you think there is some politics baked into the analysis? tom: there always is. jonathan: senator warren was doing the same thing in the wall street journal. tom: i think it is naive to think there is not. i will be honest, the british do this way better than the americans. in britain, there is an overt politics with the bank of england discussion, including a foreigner sitting on the bo

jonathan: i did. tom: i am more interested in what the strategists say and how they adjust to the economists out there. it is a mix of opinion. i know o'rourke is coming on and he goes back to 2002. this is why i am in triple leveraged cash, i never made it as a wise man, i cannot cut it as a poor man stealing. i cannot cut it as a poor man investing. jonathan: bramo is going on vacation. she cannot wait. tom: this is not as bad as 2002. jonathan: what are the benchmarks? early 2000? 1989. tom: i am -- to the next ecb meeting analysis and tried to stretch it out to see when the actions calm the market and give us a lift. lisa: there is a difference between remaining calm, nobody is saying panic, a versus being realistic about how volatile and how deep the pain might be, whether you want to stay invested. long-term advice. from what i have seen, we have seen a regime shift. we saw the fed in the ecb. we saw major central banks come out. the foremost concern is inflation. they will be aggressive. they a

this is bloomberg, the open with jonathan ferro. ♪ jonathan: live from new yor

jonathan: matt, is it too soon? matt: yeah, and anybody that looked at the previous pivots from chair powell tell you this is not the way in which he pivots. it is much more quick, much more abrupt, and much more forceful. this was not a pivot from the fed. i do think the downside in growth data we have seen probably gives the fed a little bit more confidence that, at some point in the future, inflation will come back down to target. they are clearly looking at breakeven inflation rates to give them an additional sense of confidence, but we think that tips are good value here, particularly in shorter tenors. we think if the market really believes this was a pivot, that is going to lift financial conditions -- let financial conditions ease, probably too much, and leads to more inflation in the near term. jonathan: if we are pricing out hikes and pricing in cuts and inflation is 9%, george, protection might make a bit of sense here. george: absolutely. i think the market is tried to force the fed's hand like you did w

i am jonathan ferro.is bloomberg surveillance. ♪ ritika: keeping you up-to-date with news from around the world, i am ritika gupta. opec's first outlook for 2023 has been released and suggests no relief for the global squeeze. members already are falling far behind the volumes needed right now. in the u.k., retailers reported another drop in sales. record high inflation is keeping consumers from spending on british products and services. in shanghai, there are fears the city is getting back into a lockdown little more than three weeks after exiting a two month ordeal. it is the fourth day in a row that case numbers have been above 50. two more rounds of mass testing were triggered in shanghai. the eu gave their final approval today, recommending that -- the nation be allowed to begin using the common currency. it is the first euro newcomer since 2015. pepco raised their outlook for the second quarter in a row -- pepsico raised their outlook for the second quarter in a row. consumer demand remains resilien

jonathan: thank you. the head of european fx strategy, i want to bring this quote, "the euro supported power of rate hikes is supported by the fact that the bond market is not trusted to stand on its own two feet. the euro remains unviable the summer." do you agree with that? >> if you asked me a few months ago, probably would agree with that. recent developments definitely lending a lot of support to that argument. we have seen the dollar dropping below the level of-- i think we need a big story here. we're two weeks away from the ecb meeting in july. it seems to me we still don't have a consensus about not even the nature of the tool, the need for its existence. let's be very transparent. if the ecb wants to tim inflation and support exchange rates, and needs to do two things. these two things need to be combined. hi rate and come up with an effective solution. the one is going to lend support to the other. if one of them is missing, that ecb cannot tame deflation -- tim inflation and cannot support the

jonathan: jonathan golub is pretty constructive on the back half of the year.e says 4300 is the base case. 4900 previously. this is not recessionary concerns for the team at credit suisse. tom: the cost to capital, nominal and real, and that's a great place to start with john ryding of brean capital. the question right now, businesses, to they think in the nominal space, is everyone a slave to the inflation-adjusted analysis? john: if you think about it, we have not had these inflation problems since the 1970's, 1980's. many businesses are not used to handling an inflationary environment. money illusion exists with consumers and businesses, as well. if you start with the policy rate, with the inflation rate at 8.6%, you are looking at a policy rate that is extremely negative in real terms. all the anxiety about the fed raising interest rates, it has to be looked at in the context of that inflation rate. the idea that we have had this bear market in equities but it has been a multiple adjustment to a higher nominal yield. tom: i think of you and michael darted o

jonathan: joining us now. the weaker data that we saw this morning on pmi out of europe and specifically in the united states, is that part of the fed's grand plan? >> i think the fed like all of us have been seeing the data have been weakening in several different places, in the u.s. when you look at some of the underlying data the labor market, the pmi data, when you look at the investment, when you look at the new orders -- particularly the services, i do think particular negative with the reopening after covid and the economy i think shift from people's behaviors. they start to travel more and doing more, i think we were expecting services to be a bit more of a support. so it is a negative. that said, i don't think that will stop the fed next week. inflation remains incredibly high in the u.s. after september, i think it will be a lot more data-dependent and gradual but certainly, starting to factor in as all the central banks the fact inflation is incredibly high. jonathan: mike collins, you agree? >> yea

jonathan: ok -- jonathan: i had no idea. tom: seriously, nasdaq leads the way.ieve that ritik : is going to talk about it. kriti: it seems to be the trade that's going away. last week it was all 100 basis points, it was the base case for nomura and it drops a little bit where the chart of the day is the odds of a 100 basis point hike to look at that decision in the last five days where you had the odds going 80% and the reasoning is twofold. on the one hand there is an end ration story that's tough to go. 9% cpi, 11% cpi numbers with strong economic data on friday. does it change that scenario through the fact you have wrong retail sales with lower inflation occasions with 75 seeming more likely? jonathan: it was a morning note this morning, thank you so much. the reading on the weekend, wherever you live, it's simple, they nailed it at fos. you wrote about where i went, the sticking point around rent. a huge uproar in new york city about it. east of manhattan, an apartment listed for a cheap $3500 in a frenzy of 4050. how do we bring down rent in america? >> th

and getting over in jonathan: the yield space. jonathan:12% -- the yield space.athan: 12% move in the euro-dollar, nasdaq down what 1.2%. -- yields lower by seven basis points, to 92.07, and 100.14. -- 1.0014. tom: with one grain of sand at the beach house in cape cod, he put that image in the sky and there is an image of what the james webb telescope has done. i know no one cares, but there is a spectacular image of galaxies, 13 billion years old. joe mathieu knows what is like to look at these images where light travels at the speed of molasses. joe: quite a wind up. tom: quite a wind up because don't we wish washington remley james webb? joe: sometimes the government does cool stuff, this is a nasa product that generated something as incredible as anyone said yesterday. tom: how shut down is this, it is 92 degrees, looking at nasa pictures out of nowhere, let's look at interior washington. what are some level of shutdown in washington? >> lawmakers are coming back. we've got the january 6 committee hearing today and it's about 96 degrees with extreme weather f

jonathan: on the banks? without a doubt. tom: we were supposed to be in frankfurt yesterday for the next meeting. jonathan: do you want to go in september? we can spend the whole of september in europe with the italian election. 44 economists on whether the -- where the fed peak will be. re-75 early next year, then a pause before the end of the year. tom: the interns come in on friday. years ago the interns never showed up on friday. jonathan: why are you saying that? tom: i think it's great the interns come in on friday. they are here this early. they are hung over, but you know. jonathan: is there a reason you mentioned that in response to what is said about the fed peeking? tom: sorry, jon. once again i was not paying attention. jonathan: thank you. futures down by .3% on the s&p. nasdaq around .5%. kailey, if you wake up and what price action, i would say that the german bunds. what is that telling you now? kailey: the ecb just hiked 50 basis points at a time a very dire economic outlook for europe. the pmis contraction

jonathan: it is a greek island.: she is out like some holistic epicurean, everything is fresh kind of restaurant. jonathan: are you naming the restaurant she is at right now? what is the zip code? if you put the zip code on tv. tom: if you want to send a postcard. [laughter] jonathan: do not respect anyone's privacy? tom: it is big, the zip code for the entire island. jonathan: how big is the island? i'm sure they can find her. jonathan: coming up on the back of a week of losses. negative about 20 points on the s&p. we have talked about the downgrades building for the economic outlook. take your pick, all of them for the outlook, chop, chop. citi believes the fed will keep on hiking. the consensus is down from 390. they point out that is not recessionary levels for them in this labor market. some of you may scream back yet. the bond market has been responding to weaker growth. ism manufacturing in contraction territory. we have not seen that since may 2020. we open up this morning with yields higher by three basis p

jonathan: thank you. i don't subscribe to the emails from the retailers because i would get so many. kailey: the discounts are there. i got a great discount on my patio furniture from target. jonathan: you have a patio in manhattan? kailey: brooklyn. i was priced out. jonathan: patio furniture. tom: kaylee's patio is larger than my last three houses. jonathan: you have to move to brooklyn for that. kailey: i think that is outside of tom's radius. jonathan: getting some comments from the press secretary in the u.k. there are no plans for a snap general election. the prime minister believes he would win any step election. as we read the headlines, i'm sure there is another resignation. tom: the conservatives all saying they will not support him, but then at 8:00 on any given night, do they count the bodies and say that is it, you are done? jonathan: if there was another confidence about now, given the drip feed of the resignations, you would think it might be different. tom: in the guardian, different scena

jonathan: which ones?he s&p global, the ism survey as well, there are different ones in different places. does that help? tom: it is helpful. kaylee, help me. kailey: i have no idea what you want me to say. jonathan: i am told that it is in northern israel. if you knew that why did you ask. you are setting me up this morning. just let me be. futures are down by 0.06% on the s&p and on the nasdaq 100 we are down .2% off of the back of the data in europe which was dreadful. sub 50. the euro is weaker. i said just let me be. tom: here is what is it about, your base. jonathan: you are so excited to talk all the time, it is like anchoring with a child, i just want to speak. euro-dollar, take a site. -- take us out. where is the dow? tom: where is the dow? dow futures up 74. ♪ this is xfinity rewards. our way of showing our appreciation. with rewards of all shapes and sizes. [ cheers ] are we actually going? yes!! and once in a lifetime moments. two tickets to nascar! yes! find rewards like these and so many mor

jonathan: i will not explain that. the bank of america fund manager survey reads record low profit expectations, equity allocation the lowest since 2008, cash levels the highest since 2001. does it get any worse than that? sebastian page, head of global multi-assets at t. rowe price joins us. you have called it the stop getting worse moment. how close are we to that moment? sebastian: i think we are getting there. we still remain a small underweight in stocks relative to cash. we are neutral on bonds. we like to lead into bearishness. we like to lean against the wind and we have started the debate about when will be the time, we are not trying to time the bottom but when will be a good time to start buying. the big issue is that while inflation is on the way down, recession risk is on the way up. to add to the gloom and doom, and i tend to be an optimist, to add to that gloom and doom you have to think of the history of fed hiking cycles, 10 out of 13 of the fed hiking cycles have ended in recession. the fed is never b

jonathan: good morning.nting down to the central bank decision with features positive one full percentage point. on the nasdaq, up 1.2. crude in focus, the bpi -- w ti up. further steps expected in the coming weeks on crude output from opec later in august. tom: we will have to see from here. the fist bumping really took front and center. what we need to do is understand that in lieu of scarlet fu to understand what is really going on with ben affleck and j. lo, we have to go to annmarie hordern. she joins us exhausted from the trip this morning. i know you have to have a subscription to the club to get the scoop of what is going on with the wedding. but the wedding is about joe manchin. who is giving him love in washington and the real j lovers club? annmarie: he is not getting much love. the fact that he is saying no at least ahead of august for a bigger package that would mean tax hikes and provisions to fight climate change does mean that senator mitch mcconnell is likely going to have the republicans si

jonathan: good morning. this is bloomberg surveillance on tv and radio. i am jonathan ferro with matt. we have to start with this fx market. tom: fx is really front and center. bitcoin is not a currency, just to keep matt in order. fx is a litmus paper of the system. maybe three times in every decade it really matters. i'm going to go back to deutsche bank, the day of the putin invasion of ukraine, he said strong dollar will break the system. are we there yet? jonathan: look at the consequences already. the trade balance in germany turning negative. you throw in the bundesbank, to the ecb and the executive board. tom: there is no question about it. i'm going to partition it right now. is em fx and then you've got the actual fx euro-dollar, the rest of it, but you've got the triangulation of the different pairs and that is what we will focus on in the jobs report. jonathan: michael feroli on friday, downgrading his outlook for economic growth off the back of a soggy soft week in manufacturing nu

jonathan: go back to bed.m new york, this is bloomberg. ♪ >> keeping you up-to-date with news from around the world. nancy pelosi is set to leave on a trip to asia today. the question is if she still plans to stop in taiwan. reports that she plans a visitor there has drawn criticism from china who considers taiwan to be part of its territory. taiwan was one of the central issues discussed between joe biden and xi jinping, biden warned against limitary -- against military action to realign taiwan with the mainland. the government is considering seizing undeveloped land from listed companies and using it to finance the completion of housing project's. developers have failed to finish building homes. french president amanda macron has called on -- to help your move away from russian oil and gas. he stressed the importance of continuing the coordination with saudi arabia. he has reached out to leaders of other oil producing countries, including the uae and iran. global news -- global news 24 hours a day on air and

jonathan: i love the tension.y shortly, heather boushey and brian deese from this administration. from washington, d.c., good morning. ♪ >> keeping you up to date with news from around the world, i am ritika gupta. boris johnson bowed to the inevitable today. he resigned as british prime minister after a succession of scandals and the rebellion of his own cabinet. johnson plans to stay on in a caretaker role until his conservative party picks a new leader. the timetable for that will come out next week. in china, the ministry of finance is considering whether to allow an unprecedented acceleration of infrastructure funding. it would be aimed at shoring up china's beleaguered economy. local governments would be allowed to sell 220 billion dollars of special bonds in the second half of the year. the bonds would be brought forward from next year. a key commodities gauge has plummeted since reaching an all-time higher month ago. the bloomberg commodities spot index has lost more than 20% after setting the market june.

jonathan: this came from bank of america.he lower income cohort who earn lower than $50,000 a year, gas prices rose to almost 10% of total weekly spend. that number is going to be higher. tom: united nations doing great work on this, from hydrocarbons to food. in southeast asia, percent of income on rice. jonathan: futures unchanged on the s&p 500. on nasdaq, down .2%. we are on parity watch on euro-dollar. euro-dollar, 101.37. from new york on this payrolls friday, this is bloomberg. ♪ and it's easier than ever to■ get your projects done right. inside, outside, big or small, angi helps you find the right so for whatever you need done. with angi, you can connect with and see ratings and reviews. just search or scroll to see upf on hundreds of projects. and when you book and pay throug you're covered by our happiness it's easy to make your home an a check out angi.com today. angi... and done. hi, i'm denise. i've lost over 22 pounds with golo it's easy to make your home an a in six months and i've kept it off for over a year.

jonathan quan from new york city this running, good morning. i am jonathan fair.ures look like this. down .5%. yields down a couple basis point after seeing a seriously. that volatility is here to day. tom: finally catching up with the weak euro, but i would say that the team, as you are trying for the economic data is, what will be the duration of this series? jonathan: it could be sticky. others are more optimistic. the growth figures are undesirable. tom: we heard this in washington. he says, what will it take to have a talk? one full percentage point by the fed. -- jonathan what i am not going to pour hot water over that is based off of a very long data point. tom will and always looking at surveys. emily joins us with government. there was a planned trip abroad. let's talk about the and where he should visit. where is the biggest headache, political the in america? might i suggest georgia? >> georgia would be a good choice. i can answer that russian a number of ways. georgia will one of the states that this ride whether they will keep the senate. ohio is anot

jonathan: couldn't agree more. just wonder where the tipping point is for the federal reserve it isn't here. where we are at on price, close to the supply side. i wonder where the tipping point is. tom: i think the tipping point is key, i would go to the strange phrase, reaction functions mike mckee pension yesterday. over the weekend, you are going to be partying like a monster. i read some pages, about blanche hard. they say, where'd you get to to the tipping points along the way? it is plural, there are a number of points that matter. my amateur take is 5% matters when we get there. jonathan: high yield spreads, 550. right now, mike shoemaker of wells fargo, quote of the week. this is a future, not a bug. we are going to see more of it. this is his view, we are going to see others. lisa: by tightening these financial metrics, that is the point. tom: we got over 1974. barbara singing. what you have got to remember, it is the laughter. we will remember. jonathan: are you going to sing us out? go on, sing us out. t

jonathan: great to catch up with you. that seems to be the take away after that ecb news conference -- people's heads spinning. my head was about to explode. if i hear cpi too many times today, i think it will go that way. tom: an acquaintance of a family member had a monograph from 1945 in oxford of john monet. nothing has changed since then. nothing more in the political effusion off the memory of world war ii. i thought lagarde did well given all the conflicting politics she faces. jonathan: the euro weaker. futures down a little bit after a decent run at gains. from new york, this is bloomberg . ritika: keeping up-to-date with news from around the world with the first word, i am ritika gupta. u.s. social media giants are on track to lose $49 billion since yesterday's close. concerns on the outlook for online advertising for the whole sector appear that sees a major slowdown. commerce secretary gina raimondo warns the u.s. cannot relying on taiwan for semi conductors in an to an annual security forum. she called the $5

jonathan: two big points. ultimately, this fed is going to keep on hiking and there could be a financial accident. dislocations in places like credit the second point was that this time around, if there's going to be a massive issue, it could will be in europe. there are real concerns about the energy story not just in the here and now, but later this year as well. i keep repeating this, i have no idea what the optimal policy for the ecb actually is, even if there is an optimal policy, and i have some doubts as to whether there is as well. tom: in foreign exchange for the past two weeks, we have not looked credit. we can do that with bramo. what is the dynamic with credit versus full faith and credit. lisa: detention is very strong. -- the tension is very strong. you have seen people piling back into credit. you saw a bid into corporate debt. how long can that last given the volatility in the benchmark yields? how much can you really go into some of these riskier places if you are getting such massive moves in

jonathan: >> we are go

jonathan: how are they getting on? tom: they are not. jonathan: the yankees.they went in strong into the all-star. jonathan: brutal. tom: it was my childhood. jonathan: blue jays tomorrow. tom: look at you. jonathan: i does have the schedule. they fire their manager. tom: what are we doing with english football? jonathan: it starts in august. preseason of course, a little tour, a little wager into the united states. tom: are they friendly or do they hate each other? jonathan: they find some players, it is friendly stuff. players, it is friendly stuff. futures down .2%, mom: how was school? dad: wow! ♪ vo: music can help you express how you're feeling. when you can't find the language, find the lyrics. >> that story continues that inflation is a problem and it is going to stay a problem. >> the fed is not done raising rates and i think we can't be too optimistic at the market level. >> we could easily get another negative gdp press for the second quarter of this year. >> it is a little exaggerated at the moment. >> at difficult situation to the bank of england

jonathan: take it another step. with that in mind, how much pain is there to come in credit with investment spreads through 150? you got high-yield spreads through 550, almost 570, and triple c we talked about that. how much pain is still to come? kathy: i have yet to experience -- troy: i have yet to experience the credit market that has not widened in a recession. if you think there is a recession or high probability of recession, i think there is more spread widening. at the same time, 150 in r.g. -- ig is the average. you are at the average peer the averages are misleading in credit because you have these spikes and it stays lower spread levels for longer. to me, i think there is a lot more room for spreads to widen both in ig, both in high yield, the credit cycle hasn't happened yet. we have not seen the hidden fundamentals and that is on the comp. jonathan: yet what we hear, is it that we get a recession it would be a shallow one. we had a lot of messages about that, just how much the consensus changed through

jonathan: bramo, thank you. earnings down by 8.6 1% as walmart cuts their profit outlook once again. joining us now is john stoltzfus . you've been unapologetically bullish at times. what do you make of those walmart numbers? do we have a broader problem with the consumer? john: it is a combination of the two in the case of walmart and we have seen this before in the last reporting season. it just happens to be the ordered to much of the wrong thing and i think that was probably on expectations that they weren't going to get enough of what they were importing. we have seen that across a company -- a number of companies in retail. tom: i want to talk about sector selection. how critical is sector selection in 2023? john: with ticket is important in the sense that we have to be forward-looking. it is like john mclaughlin's second or first album. when do you want to be buying stocks? it is usually when they are low and nobody else wants them. we like consumer discretionary, we like technology, we like industrials a

jonathan: this is bloomberg surveillance on tv and radio alongside tom keene, i am jonathan ferro, together with kailey leinz. bramo back we hope next week. tom: we heard from a listener in nepal who has seen her, she is at everest past camp two. she is not near the death zone next. from the gentleman from nepal, he thought you and i were on speaking terms. jonathan: will get an update from bramo hopefully later this week. the dollar is weaker, the euro stronger. tom: help me with the parlor game on ecb. are we having a parlor game on how much christine lagarde will lift? jonathan: according to sources may be 50 basis points. how small is this window for this ecb to hike interest rates given what people think will happen with growth later this year and given what may or may not happen next week on thursday when nord stream one was meant to come back online. the european commission said "we don't expect it comes back." tom: in addition, the window of the heatwave. you assume that what we are seeing once in a century, once-in-a-lifetime in england diminishes economic growth? kailey: i am -- j

jonathan: just sat at 1.02. a few changes around the ecb at this particular meeting and going from here. we'll look at that in the moment. equity futures down .2%, the euro positive by .10%. a quick word on crude, down 4.5%, 9.51 wti. tom: it is the second time down, that's all there is to it. brent, 102 down. carol: -- jonathan: crude 95.96. kailey: but coming at 8:00 p.m., a bit from christine lagarde. she's facing multiple challenges especially as mario draghi headed in the resignation earlier, leading the spread toward 230 basis points. when we have a conversation about the anti-fragmentation tool they are hoping it will announce later, it is difficult. especially with a euro hovering around the weakest level since 2002 and a deteriorating economic situation making it difficult for the ecb. we will hear from christine lagarde at eight eastern time, it will lead of the program on the open but in between 8:30 a.m. eastern, initial jobless claims. we have seen upper pressure since april, two is a 40,000 is what

jonathan: brutal. we look for cpi in europe as well, which potentially pushes them to hike again into economic weakness. the fed has got to do something about it potentially later this year, which forces some people to believe maybe they back off from hiking interest rates much further. tom: bavaria up 8% year-over-year. absolutely shocking. a shocking fed meeting yesterday. we recalibrate into today and we stagger in this hour to an important gdp look. jonathan: 8:30 eastern time. it is not that binary. are we seeing signs of weakness? yes we are. will it spread? potentially. that is what we've got to keep our eye on. look out for jobless claims. read straight weeks they have been ticking higher. will it be week four? tom: thierry wizman will join us from a quarry -- from macquarie. an important date for president biden. lisa: you will be speaking with presidency of china -- he will be speaking with president xi of china. how much does he push for a victory lap of sorts after getting together legislat

jonathan: futures up half of 1% on the s&p. it also looks like this, up five basis points. we need to talk about the data. pretty terrible on both sides of the atlantic. this morning, german business confidence, the euro showing just a little bit of strength this morning. >> to me, that with the big story, probably hiking or wherever i was. to me, that is tracking it seems like that is the big shift. the strength suddenly after so much weakness. today not a huge day, but a monumentally for the united states. this week, all the u.s. got safe tech earnings throughout the week. tuesday, we've got microsoft and alphabet. wednesday, we get mentor, facebook, as well as the software and the hardware. later on in the week we get apple and amazon on thursday. on wednesday, the rate decision, the key issue people are talking about. as you pointed out, it is not the 75 basis point rate hike, it what happened in september and the dual mandate of both getting that inflation in dealing with the unemployment

jonathan: mike mckee, good to catch up.uro-dollar, another upside surprise, 50 basis point hike from the ecb. most economists looking for 25. 1.0255. interesting to see if this bid in the euro sticks through the news conference. we will have full coverage of that on bloomberg tv and radio. the 10 year in italy is up. the new term that we have to talk about, tpi. tom: i like fragmentation better. jonathan: the details of which will be unveiled at 3:45 central european time. tom: my prediction is christine lagarde will be reading off of a lot of prepared essays today when she answers questions. big move in the euro-yen. i will not go into the math of it but euro is stronger. gilles moec is with us today, arguably the most read in economics in europe. what will you listen for, ex ante or ex post from christine lagarde? gilles: it will be interesting sell for christine lagarde. what this has done today, by going to 50, whereas many telegraphed 25, it basically got rid of forward guidance. we used to have a pretty precise forwar

jonathan klein jonathan -- jonathan: the market was pushing yields higher once again.'s look at the treasury. up more than 20 basis. -- 20 base points. on friday, yields higher off the back of an upside risk -- upside prize euro-dollar is close to breaking it is sticking to 101 this morning. negative .8%, but i wonder what you made of the price action on friday. told you a lot about positioning. i wonder how much downside we have. tom: it was written up in the guardian, will, as well. she was exceptionally negative. not in the business, but it had an approved level. jonathan: if you ask him, this move has more ups died. -- upside. tom: let me drag out a book from a summer ago. a brief introduction. the world. it is an absolute tour de force to provide stability and thinking forward. richard, i'm going to look at the last chapter. i'm going to say, what is the liberal biting order? he seems to be walking on eggshells here. richard: i think it is taking a backseat. what they have decided to do is put its preferences on the back burner and on the front you have a real int

jonathan: you saw that with google.ou might see that in job openings over the next several months and that it is job cuts as well. that can happen quickly. lisa: that's why i'm wondering if there's going to be a tipping point. we talk about delta cannot not wanting to build the capacity even in the face of demands, because they're worried about being caught wrongfooted with capacity and that will be a chubby moment for the fed to deal with. tom: people get sorted out in bear markets. who has got the bathing suit on kind of thing. people are going to sort out given what we are doing and where we are moving to the profit makers in the nonprofit makers. jonathan: i would love to see lisa interview them because she loves to bring that out. lisa: [laughter] jonathan: she's got things to say. lisa: we are running out of time. ♪ jonathan: live from new york city, good morning. waiting for numbers for morgan stanley. equities down 1.3% on the s&p, nasdaq know it -- lower by .9%, one full percentage point lower. morgan stanley n

jonathan: snap, twitter. looking ahead to alphabet, facebook or get they are the heavyweights for america and worldwide. lisa: 20% of the index is going to report this week, comprised of those five names which are going to be coming out on tuesday. how much do we get a sense of the slowdown in consumer demand that is going to affect some of the cash cows of the market, but have not been priced in? people have been really resilient and have shrugged off disappointments and earnings much more than in previous years. how much is this basically where valuations are versus real optimism baked into something real? jonathan: that pmi last week was terrible. i'm looking ahead to see if we get confirmation of that because that was pretty brutal. does anything change for the fed this week? teeing up a move in september? lisa: they will definitely go 75. that seems to be the consensus. they are by simply taking a 100 basis point rate hike off the table. after that, how much guidance can they actually give? what data are

jonathan: thank you.he final point that christian is making, we thought this summer we had shifted and ultimately what that meant, we thought we had capped because any easing of financial conditions would be considered an undesirable one. ultimately, bring down inflation. they have eased a lot, particularly high-yield credit spreads. 90 basis points or so tighter over the last few weeks. lisa: one of the biggest rallies and high-yield bonds for the month going back to the peak of 2020 when the fed was jumping in with the rescue program during the pandemic. how much does the fed's discussion after the meeting tomorrow really hinge on trying to read tighten of those conditions, pushing back on how quickly they will reverse positioning going back to cutting? and if they don't, how big of a disruption could you see natalie bonds, but also in stocks as people retrace the fed's reaction function? jonathan: would you like the market's things? lisa: i think i know it. jonathan: he said with the piquant and then p

jonathan: this is bloomberg. ritika: keeping you up to date with news from around the world, i'm ritika gupta. president biden will announce executive action today to confront climate change. one would steer dollars to communities ravaged by heat. for now the president is holding off an emergency decree that would allow him to use sweeping powers against global warming. the house passed a bill that would recognize same-sex marriage under federal law. it would also extend legal protection to all married couples, a reaction to concern that the supreme court may reconsider a ruling extending those rights. the legislation faces long it's in the senate. in china, they are talking about flexibility. the most important thing was to keep employment and prices stable. he also said they would make covert control measures more targeted. tesla earnings after the bell today. rising sales and profit are under pressure as they face supply chain difficulties and lockdowns in china that hurt its ability to make cars. jp morgan pl

jonathan: down 1.4% on the s&p.is bloomberg. ♪ ♪ jonathan: for those of you interested in sending me abuse on twitter about how important the dow is, twitter is out. find me on linked in. tom: can we blame it on elon? jonathan: no idea. lisa: there have been a number of usage outages reported for thousands of users. according to a couple of different reports, it just has an error screen. jonathan: so we can't mount about ppi. -- moan about ppi. michael: we will have a lot of people moaning about a 100 point basis move. up 1.1%, an increase that was originally reported as .8%. the energy category comes in up .4%, a little bit of a decline. on a year-over-year basis we are up from 10.8 jobless claims, 244,000 filed compared to 235,000. i will get the prior week's revision. it is an increase of 9000 on the month. this set of data are not going to be well received by folks on wall street and if you look at the bond market i think you will see a reaction. tom: i see that. i just did a moving average study that claims nic

jonathan: rock solid.we move to the former governor of the federal reserve at the blue school. randall kroszner. we had gradualism and a measured moment greenspan. is that history with this out economy -- auto economy? randall: that is history. you can see the fed is trying to move expeditiously. this is completely consistent with their desire to move fast, i think they are likely to go 75 basis points at the next meeting. obviously, we consider inflation data between now and then. they will get a gdp report. they know the numbers before we know them. they make their decision on wednesday, we find out on thursday. i think they are going to go 75. there is nothing in this report that would slow down from that. jonathan: a question i have, we keep churning out robust jobs growth, payrolls, 372,000. unemployment has not stabilized at 3.6%, i want your thoughts on what you make of that. randall: you've got two different surveys, and different ways of gathering the data. they are not always exactly the same. we

jonathan: ok, anything else? tom: no. jonathan: tomorrow, the federal reserve decision. this will be great. why don't you do a promo later? tom: i just think gaming out 18 months is absurd in a post-pandemic america. jonathan: the market is always gaming things out 18 months now. tom: i don't think it is of value right now. jonathan: you don't think financial markets are of value? tom: i don't think too game out 18 months is of value. i am way more interested in the early framing of the 50 basis points. way more interested in that. jonathan: looking forward to the conversation later. from new york, this is bloomberg. >> keeping you up-to-date with news from around the world for the first word news, the european union has agreed to reduce natural gas use 15% at the prospect of a full shutoff from russian pipe flow seems increasingly likely. the green light has been given for a proposal to cut gas usage over the next months. general electric other priced hosting better-than-expected cash flow. sales saw 27%, continuing to battle inflation. coca-cola be wall street estimate

i'm jonathan ferro. your equity market with a left, piling into equities over the past couple of days. we are up on the s&p. up more than 1% on the nasdaq. this from credit suisse. whether or not we are in a recession will be debated by academics. today's report reflects a weakening in economic activity, and for now bad news represents good news for stocks. more still to come. this is bloomberg. ♪ ritika: keeping -- >> keeping you up-to-date with news from around the world, i'm leigh-ann gerrans. the euro area economy has expanded by more than three times the amount economists expected. that comes at a time and inflation and a possible russian energy cut will send the region into recession. gdp rose .7% in the second quarter. inflation sent an all-time high in july. president joe biden and jinping have told aides to plan an in-person meeting. the two spoke on the phone for more than two hours yesterday. that call, centered on taiwan. matters could get worse if house speaker minute -- house speaker nancy

jonathan: not at all. the ecb may be taking a page out of the fed's book by t and up a a few days before the meeting. the fact that president regarding going to recognize that according to the european union, they don't think nord stream one is coming online. you've got a pretty messy recipe for the european economy this year. tom: of course, that folds over to the fragmentation. we need to stop right now and explain the hope of this policy. italy, higher yield. germany, lower yield. some type of manipulation some of europe takes the price change on new estimates. jonathan: basically, ron -- close-ish. kind up with this new tour. they haven't actually put that altogether yet. it is going to be interesting for more reasons than one. tom: philip lane is more than qualified. -- is able to say to christine the garden, who picks up the risk if you give italy a free lunch, right? jonathan: we need to understand a range of things. it sounds to me they are making it up as they go along. at what point do you say th

jonathan: catching up with this at bloomberg headquarters, that was yesterday. i'm jonathan ferro.e are together with kailey leinz. futures are down 0.1%. the nasdaq is down 0.5%. euro-dollar is 101 .40. just to pick up on the words on china, removing some of these tariffs, the latest reporting from the team, the president will meet with his advisers today on possible reductions in tariffs on chinese goods. that meeting is taking place later. tom: the size of those reductions, we are really looking at -- we're looking at small nudges. jonathan: focus on the size and where. that's going to be interesting. what do they remove? what is the reduction? do they double down to make this more palatable at home? this administration is accusing the chinese of conducting genocide, that's a very big accusation. to remove tariffs on that government is going to be a big deal. tom: i want to thank the white house for attendance yesterday. welcome on a most unusual jobs day. jeff rosenberg is one of our guests scheduled to be with us. an assassination in japan. tobias harris will join us in a bit,

, i am jonathan ferro. where you want to begin? >> across to fanta, to the united kingdom, at a very lonely over 10 downing street. >> we are supplanting joy in july, out the window waiting for the prime minister. maybe were going to see him in 30 minutes, but we don't know the theme, we don't know what he will say. uncertainties for the a kingdom, and i might point out, as an aside, for mr. joe and see in grain, it is substantial. >> he is been a solid partner that he would confirm that. on the prime minister's exit, he is going to walk down the road. what we don't know is how long that road actually is, because they're up reports in the last 30 minutes that perhaps, he will try to stay on as a caretaker p.m., and don't you dare ask me to define what that means for this country in the u.k.. >> the original process bounces back, but it is different than america. how does labor and mr. sturmer react at this moment? >> the sequence of events will be as follows. the prime minister will engineer and exit. it is

susan: jonathan anything to add? jonathan: not necessarily on carnival because mike summed it up but it is important to look at what a psychologist called post traumatic. he talked about passengers and crew who survived this and not only came out strong, but stronger. we had examples of passenger as -- passengers and crew who were able to look at their lives and their outlook towards what they would do after this, they came out with a stronger and more positive outlook in life. people saying, as much as i suffered on board, it has made me a better person. susan: i assume the zaandam is back at sea? michael: yes, they restarted cruising not that long ago. they are back out and hopefully it will never happen again on this ship or any other. one thing i want to stress about our book is, if you read to the end, it sounds horrible, everything we have been talking about is horrible but if you read in the end, we will see there is a lot of redemption. so many people we talked to who survived, which was most, thank god, came

jonathan: -- of blackrock. tom: wonderful. jonathan: less constructive on equities.es are down by a third of 1%. this is bloomberg. ♪ ritika: keeping you up-to-date with news from around the world. i am ritika gupta. president biden and mexico's president will discuss ways to expand legal migration and improve security when they meet today at the white house. they will announce joint action to improve infrastructure and cooperation along the 2000 mile border. the mexican president says increasing immigration would strengthen the u.s. labor force and help curb inflation. a billionaire real estate titan is urging the fed to aggressively raise interest rates and break -- >> i think that interest rates could go up a couple hundred basis points, and not throw us into a recession. i think there has been so much capital sloshing around, that i think the first major swallows of reducing the excess flow, i think you will have quite the impact that the stock market is reflecting. ritika: you can watch all of that exclusive interview tonight at 9:00 p.m. new york time with davi