i'm kriti gupta. bloomberg markets starts right now. ♪ kriti: let's check on these markets. the s&p 500, no real direction here. it is a wait and see game. positive territory briefly, no back down. only .2%, not conviction selling any -- by any measure. conviction in the 10 year yield either, 3.11 on the 10 year yield, up just one basis point. but in that volatility we are going to keep an eye on. yields are higher, the dollar is weaker. only by .1 percent but you are seeing the emergence and that is crucial especially when they talk about the commodity market. brent crude at a 96 handle, down about .9%. but the highlight of the day is it is the last day of august. one of the biggest bears on wall street, mike wilson from morgan stanley, talked about pricing in the risk. >> we look at that pe ratio and two components, the 10 year treasury or the controls and the equity component, which is really the markets way of discounting the risk to growth. the interesting things i have found, like this whole yea

i am kriti gupta up. "bloomberg markets" begins now. kriti: on the surface, it looks there is little optimism in the markets but take a breath for a second. online volume is thin liquidity, not a lot of people are actively participating in the market. the s&p 500 up .5%. what is interesting to me is the cross asset picture. even though the s&p 500 is finding optimism a little bullish on the surface, you are not seeing that across the board. you see deals down for basis points. 306 on the 10 year yield and with those lower, the dollar is lower as well. with brent crude, which i like to use as a better risk sentiment indicator, to back up with the stock market is saying, today they are not backing up at all. brent crude trading a down about .3%. markets clearly focused on chairman powell's comments from jackson hole, wyoming tomorrow. joining us with beautiful scenery on the ground, bloomberg international economics and policy correspondent michael mckee. you as always for joining us. what is the move there? what can chairman powell actual

i'm kriti goofed up -- gupta. a quick check on the markets here. like we said, it's risk off across the board. the s&p 500 is down. looking at the nasdaq, losses are magnified. take a look at the yield, 302 on the 10 year yield. it's the highest level on the 10 year yield going back to july 21 with intraday volatility. keep an eye on brent crude it on the chin. wti trading at one driver with the dollar up .6% and the strength is enormous with inverse correlation being something to keep an eye on. we already talked about the tech story magnifying the losses and we are seeing some of the magnifying in the retail names. gamestop, amc entertainment, bed, really taking in much more significantly when it comes to the selloff and after the bell, it's down in line with the broader market, coming back down to valuations. earlier we spoke to the head of macro research. take a look at what she had to say. >> over geopolitical periods, like the fall of the berlin wall, the ratios adjusted. in the short, 20th-century with a cold war and more supply-side driven

i am kriti gupta, bloomberg markets bank -- "bloomberg markets" starts now. kriti: in the last 30 minutes to one hour, the markets have --that means volatility is baked into the market. you have the nasdaq up almost 1% in the session, now tearing those gains. the s&p 500 up .2%. the volatility picture is in the bond market. the 10 year yield at 3.1%. intraday volatility is 10 to 12 basis points. the nerves are settling in before jackson hole. we will ask michael mckee in a moment. the dollar index inching up .2% of 1% and crude is down .1%. at the end of the day, it is about the federal reserve. we were talking earlier about how the fed should approach inflation. look at this. >> we need to hold the fed's feet to the fire on what they want to see for inflation. if you are waiting for inflation to get to 2%, it will be higher than anyone appreciates. i think they know better than that and they need to feel that narrative. i think if i am wrong and they keep on hiking breaks -- hiking rates, the hiking cycle will go on longer than anyone appreciates. kriti: join

i am kriti gupta. "bloomberg markets" starts right now. ♪ let's jump into the price action.h wait and see mode ahead of jackson hole later in the week. even though we started in the green, we don't see a ton of conviction. trading flat. that will continue into the 1:00 p.m. hour. it is not that different from the bond market. the 10-year yield up by two basis points. intraday volatility is crucial. we have seen moves of about 10 basis points in the last couple of hours. with the bond move you are seeing the dollar trade. that is where all the price action is. the dollar weaker by about .4%. brent crude trading with a $99 handle. up about 3.6% in the intraday session. one big story breaking about an hour and a half ago. julian robertson, who became one of this generation's most successful hedge fund managers and mentor to a wave of investors has died. he was 90. let's bring in sonali basak to talk about his legacy. walk us through what he was known for. sonali: a few things. he was known for building one of the world's earliest and at the time largest hedge funds. starting wi

kriti gupta is checking out. kriti: when we woke up this morning futures were down 1%.ressure still exists nonetheless. s&p 500 down .4%. nasdaq slightly outperforming but i would not call it anything to write home about, nothing super exciting there. we will see if that turns positive. in terms of direction it looks like it might be heading that way. going to the bottom, i would say that is where it is getting more interesting. the two-year yield is hitting the highest all the way back to 2007. as more and more people pile out , or pull out of the front end of the curve, we are seeing different -- seeing the front end hit a significant level. it is going to be a major question. does the dollar follow? the bloomberg dollar index actually hit a record high going back to july. it was only momentary before completely made a round-trip. which brings us to the fed story. what a repricing in for september? is a 75 basis points becoming the consensus trade. will it be the same for the federal reserve? it looks like those bets the last couple of days have increased. the reactio

i'm kriti gupta and bloomberg markets starts right now. the stock market is rallying in defense of tech leading the way. the nasdaq outperforming with 2% gains in the nasdaq and one point 5% by the s&p 500. all the action was really in the bond market. after yesterday's massive move, the second-largest since the covid-19 pandemic really began. volatility and the volatility -- the nominal yield is not the way to look at it. 36 basis points, and the recession calls for 50 basis point inversions. we are inching closer and closer. it is opec day and we had the meeting of the brent crude prices. then we had inventory data that came right back down to a 97 handle. some of the action we are seeing is traders pricing and economic data better than expected. kathy wade on the pace of economic growth. >> it is not anywhere near the economic crisis or the covid -- covid recession. it would be a moderate recession in our opinion but i think if we do fall into a recession it could be white shallow. we are not in the camp that thinks unemployment needs t

kriti gupta is tracking the move.selloff in the works but coming off a pretty good series of events. we did have a 19% rally since the june lows we have seen. one of the questions is is that a sustainable one? when it comes to valuations it looks like they are coming back up. i wonder how many people are looking at those valuation and sink stocks are looking pretty cheap. then you look at some of the carnage in today's session. worst performing groups were some of the carmakers. a lot of that has to come with some of the price cuts you are seeing from tesla and rivian and ford. if you speak about the macro headwinds, this is the sector you want to keep. general motors shares down 3%. if gm suffers it is a proxy for the broader u.s. economy. the idea being americans buy cars. let's end with a story on the tech conversation. a lot of the losses you are seeing the last two weeks, or two days is concentrated in big tech. can they come back? you need big tech on your side to make that rally sustainable. guy: thank you very

tom: maybe it will last as long as kriti gupta's chart that she is showing us now. >> you were talking the two year yield and five year yield. yesterday's move in the 10-year yield was the second-largest since we saw the covid crash in 2020. it only rivals when the bond market was pricing in 75 basis points ahead of the june fomc meeting. that repricing is crucial, what you are seeing in this particular index. this measures bond volatility which has been on an uptrend since 2020, close to levels that we saw in march 2020. there is still a significant gap between what the market is pricing for the end of next year and the fed's projections. when you have that kind of cap come it means these swings are more, because repricing happens daily. tom: we have ignored fixed income. ira jersey joins us. when i see the five-years do what it did yesterday, that the minimum, i know that is unusual. why are we seeing these gyrations? ira: two things. number one is misinterpretation of the federal reserve, or the communication from powell was reversed with all of the fed speakers basically all saying

helping us with that is kriti gupta with an important chart. focus in on what dana peterson was just talking about, food prices in the context of the war with ukraine. we are looking at a chart of the bloomberg cranes index. you see the massive surgeon prices in february, than the course of the war itself. you saw the surge in prices given the breadbasket of the world, that supplies coming offline. fast-forward to june which sees prices make a round trip it was staying down for a while. recession fears, stronger dollar, some was a question of the weather. an uptrend as you have the likes of romania, india, even the united states not able to make up some of that lost supply in a way the market was pricing before. i think that is the key point of this chart. tom: very important. thank you so much. we have lots going on. michael joins us. he has been talking about what we've been saying about jackson hole. this is the acclaimed bear camera. we want to get this up if we can. the dead of night of alaska. this will be like what we see tomorrow. we do

here is kriti gupta. kriti: the ripple effects when around the world. we are looking at the difference between the the juan -- let me give numbers to visualize what i'm trying to show you. the difference on an average day in the last six months or so is about 20 5/10, to the fourth decimal place. that has gone as high as -120. we have to be consistently surprised what they're doing as we try to stabilize. the ripple effect goes to the japanese yen, the korean won, and you start to see the two largest economies diverge in the monetary policy. this could become a trade story for this. tom: there is a nuance of currency, depreciation and valuation. depreciation is a floating rate currency and valuation is a traditional fixed rate currency. china is in the middle. it has been a 14% appreciation or devaluation i'm going to call it, going back to 2014. and joining us now, our chief asia economics correspondent. is the system their normal enough where beijing cares about chinese devaluation? or is it so removed in our totalitarian regime that is not normal eco

kriti gupta is the class. pretty: the talk about how believable this rally is. rallied some 19%. let us talk about how things are viewed by professional investors. i've never -- we are looking at s&p 500 not long position in between asset managers and leverage bonds. that has never been so short going back to 2016. how much of that rally is rallying simply on low-volume? tom: joining us, we harken back to 1981, she is got some left great -- something of greta garbo, something of betty davis. she plays a great song. why is now like 1981-they need to? >> there are few instances where you have a double-dip in u.s. history. it gdp has declined for two consecutive orders get economists are anticipating the official recession to come in late 2023. the only time i can find in history in which we had similar, he here was the early 80's but economic conditions were different, the fed was hiking the policy rate to levels most of us cannot conceptualize at this time. but at that time, the most important thing was inflation. even though the economy went into a worse place i