i'm kriti gupta. bloomberg markets starts now. let's dive into the price action, because we are seeing red, but just marginally for the s&p 500. some of the big movers actually turning the index around. we are going to drive through the equity story in a little bit, but to me it is the bond market. we are looking at the two year yield getting closer to that 5% level as we are perhaps seeing a terminal rate in july of perhaps as much as 520%. this is just the market repricing itself. the fed has not said anything, but it is enough to push the 10 year yield higher. how much higher do you go if you are looking at a 5.8% terminal rate? do we start to consider 6% for the bond market? bond yields higher on the bloomberg dollar index. much of that is reciprocating across the equity market? i want to bring back the bond story, the fed repricing story. for that i want to bring you a terminal chart. the idea is that fed repricing is inching higher. this is important, because we were looking at a peep policy rate of about 5.5% in september.

>> welcome to "bloomberg markets ," and i am kriti gupta. today is a weird weird day, it is important to look at what the s&p 500 is doing. down, almost paring off the losses -- the risk off sentiment. headline payrolls coming in hot, wages coming in soft. the net that result is lower stocks on the day and lower yields on the day by a massive margin, 20 basis point move in the 10 years. what else happens when you see that flight to safety again from around the world into the u.s. bond market? this is not just a fed story we are in dive into it. bloomberg dollar index down .5%. the good news for some commodity bulls is that the weakness in the dollar helping nymex crude futures, up in trading. jon: diving into the banking sector because there is so much uncertainty right now, you want to walk in to some of the carnage we have seen. the closely tracked regional bank etf, the kre is down 7%. when you look at some of the weaker performance and that index, first republic, pack west, and western alliance are off by 20 to 40%. sizable drops. people

kriti gupta joins the conversation. looking through how markets and investors are positioned what do you think? kriti: yes, is the answer to the question, they are. you can kind of almost see that in the yield picture. getting closer and closer to that 5% level. one of the issues with the services taking off is the idea of a no landing scenario does not mean things are in the clear. it means you have to revisit the story of inflation down the road. there is that re-acceleration built into that argument. in 2023 maybe not as much. 2024 and 2025? yes. they are not pricing in that far out. the bond market far more clear how hawkish the fed might have to be to tackle a no landing scenario. guy: yields will be tracking lower throughout the day. they are beginning to track the other direction. mike, is the fed in control of what is happening in the services sector? i keep looking at the numbers and they keep surprising on the upside. it is a big part of the u.s. economy and it feels immune at this point to fed action. mike: it

kriti gupta, you have got more on it. : it has shifted away from the banking fall. this highly awaited report from the bureau of economics. this is really important because you are seeing a deceleration in inflation. this is good news for the federal reserve in about the first time for a year. zero point 4% rise. services inflation still rising. goods inflation still coming down. shelter costs decelerating. the housing market has been in focus for a while. commodity pressures are coming back up. we see that in gas prices, food prices. that is what the -- the federal reserve is going to see as a danger. that is what you're seeing in the repricing into the market. after the svb fallout, all the way down to 5.1% over the summer. this tightening cycle is over in the last 24 hours, especially with the cpi report. now seeing the cpi report -- now seeing the terminal rate come higher. a 50 basis point hike to really put the pressure on inflation all the way to the other side of the spectrum. talking about a rate cut or something that will bow well for the technology names.

i want to bring in the one and only kriti gupta on what else is happening in these markets. kriti: we will continue the theme with some of the micro. check out gamestop. remember this name from 2021. the speculative craze. tagging along with your to go scandal. today it comes out with a profit, the profit -- the first profit in two years. the ceo saying they have made real changes and have a profitability outlook that will last the full year. they have not put numbers on that but it is enough to make the stops sort. -- the stocks soar. is it a mean bid, frenzy bid, or a fundamental bid? i would argue all of the above. you are seeing ramifications and other meme stocks. look at amc. higher by 3% on the day. it was rallying in tandem with some of the other meme stocks. the fundamental effect on the ripple market. nvidia higher on the day given the ai bid. you also have to keep an eye on the one stock that is trading lower, nike. earnings will be a big picture of the macro story, which brings me to the two year yield. the fomc story. even if the fed does nothing today we are see

i am kriti gupta.e just listening to jane frazier speaking last night with david rubenstein at the economic club of washington. joining us now is sonali basak. jane fraser is one of the few that have commented on the banking crisis. but that is a context for us. sonali: you had, when she is talking about the idea that this does not need to be a full-blown issue when you look at what is happening with regional banks. even if we saw pain were going to a few other banks. but it's also interesting is what she said about individual banks. she said svb could find a buyer pretty soon. when we look back the situation was looking tenuous and now we are finding more it resolutions to more banks that are facing hiccups as things go along the way. another important thing she said as far as first republic goes, citigroup is not a buyer when it comes to that. as you see from the stock price reaction, the situation looks relatively stable. for all things are not out of the was, there is a sense that there are solutio

. >> buckham to "bloomberg markets ," and i am kriti gupta.and but it is on light volume come after chairman powell's testimony. s&p lower by four 10s 1%, the bond market is where it is. -107, the two tens and version. speaking to the fact that the two-year yield is inching higher and higher as people view the federal reserve more hawkish than previously expected. the bloomberg dollar unchanged on the day despite the bond yields being higher. international pressures on the greenback and you cannot forget about cryptocurrencies. lower by .4% -- i want to pass along a headline. u.s. thinking powerhouse -- banking powerhouse jp morgan ending its leadership with gemini. >> we continue to track that story and will have more on the crypto market coming up. as for other movers we are watching right now we see noticeable weakness and tesla. a couple of factors out there, the safety regulators looking into steering wheel complaints as well as bearish comments. a 12 punch, crowd strike with beverly than expected quarterly results. campbell soup, steady

(upbeat music) >> welcome to "bloomberg markets ," and i am kriti gupta.eird day, it is important to look at what the s&p 500 is doing. down, almost paring off the losses -- the risk off sentiment. headline payrolls coming in hot, wages coming in soft. the net that result is lower stocks on the day and lower yields on the day by a massive margin, 2

i am kriti gupta. we were just list. we are about 40 minutes away from the fomc decision. joining us now is ellen zentner chief u.s. economist at morgan stanley and andreas jobst head of macroeconomics at allianz. where they differ is the forecast in cuts. andreas: critically important is the fed is currently very much driven by data. setting policy rates and guiding forward. data that is coming in is the best coincidental, or, also, when you look at the employment data, it comes with lag. so, we believe that there is a recession in the making. we see indications not only in terms of monetary, but also, the labor market is showing signs of significant weakness. when it comes to the starting of the pivot, q3, q4, a contraction of about one percentage point, that is largely driven by savings that have been completely spent and consumers really cutting back on expenditure. this means the u.s. will then head for a negative quarter in q3 and q4. >> let's bring it back to the pause call that a good chunk of wall street is estimating. ellen, if we get apostate a on the concern of

romaine bostick alongside kriti cuba -- gupta. kriti: it is a bend to the bond market.going on when you look at the eco-data and what is getting repriced from the federal reserve. romaine: we talk about that big jump up in treasury yields this week. we are getting a fall in those heels. i do not know if tha

we want to get into that with kriti gupta. kriti: a lot of pain.ou are seeing this across the board for regional banks. in the premarket all of these names were higher by eight percent to 10% and now you're seeing the credit suisse story turn in around. first republic and is our poster child for some of the pain given how similar of a profile it has to the signature bank story putting it in focus when it comes to where the regulatory concern might lie next. you're seeing a move of 18% lower on that stock, leading the charge. one stock you want to keep an eye on in the green's western alliance coming off of a 5.3% stake from ken griffin at citadel. that's the only reason it's in the green and not following the trend. i want to go back to first republic, because look at what it's done in the last year. dramatic drop down 80%. a lot of that loss is really coming in the last week or so really showing how much it has fallen from grace when it comes to their price-to-book ratios. still not catching a bid for that reason. to add a little salt to the wound

. -- kriti gupta has the latest. kriti: you saw the french and german indices ending flat.ajor country to pay attention to today was england. the ftse was down .8% on the back of the boe, saying look, a lot of concerns about recession but it looks like we can avoid it or the time being but the natural reaction of the equity market was to pull stocks lower. in the fx market there was a real read through. looking at 123 with strength and the pound as we talk about what could lead to more weakness in the dollar now that the fed is no longer the most hawkish central bank around. sustainability is about 120. good news there for the pound. the yield story hikes that you are seeing around the world are not in higher yields with banks continuing to hike and tackle inflation and continuing to drop. something to keep an eye on there. bringing me to those first individual movers, banking stocks are crucial with ubs taking another hit. they continued concern into what ubs with credit suisse under the umbrella looks like. how much risk are they taking on? down 2.8% after a reshuffle ove

let's get some insight from tom metcalf, who covers finance, and kriti gupta.'m going to start with you, tom. in order to answer the question about whether you by the dip or sell the rip, you need to figure out what is happening with the banks. we are going into quite the weekend with credit suisse. we don't know what will happen with first republic. the stock is down pretty hard. what is your sense of where we are in the stabilization process? tom: i think where we are is where regulations and banking stop we were no longer. why is the big $30 billion deposit switch not enough? when it comes to credit suisse, their shares are down today. you just saw a $54 billion effective life from the national bank. why hasn't that been enough to change the narrative? maybe yesterday, i was thinking maybe the stories will be necessary and live over the weekend. i think they both are. alix: tom has canceled his plans because stuff will go down over the weekend. you had the solvency versus the liquidity. why hasn't this been enough? i don't understand what it will take to get

. -- kriti gupta, bloomberg markets starts now. let us dive into the price action, red across the board. the s&p 500 shrugging its shoulders, not telling us a whole lot. no real narrative. that is the story, the s&p 500 is weaker on the day by 2/10 of 1% toes you no one really knows what the trade is except maybe julian emanuel. the bond market is where is, 10 year yield getting close to 4%, hitting 4% of the data earlier today only to retreat. technicals and play for the bond market, how much are the round numbers driving the trade? in the coming weeks as we march away to the payrolls report, 399 on the 10 year yield, higher by seven basis points. the dollar not following, interest rate differentials are no longer the currency trade. weaker by 5/10 of 1%. that is coming from the equity market, but the macro versus micro as we near the end of the earnings cycle, is macro back in the driver's seat even with speculation on the fed? hawkishness does not equal equity selloff. >> good from an equity perspective would be clarity. that wi

michael mckee joins us, ritika gupta -- kriti group to joins us, sonali basak as well. the first thing we need to nail down is does market pricing reflect what wall street thinks. what do you think in terms of what we are seeing in terms of pricing? is it real? kriti: it is real. let's start with the bond market. that is where you are seeing the most brutal move. we went from 25 basis point getting priced and at other jobs report to 50 and then back to 25 and now zero. that seems to be the idea in terms of hikes. when you look at the bond market move, that's which does reflect the market consensus that come march 22, the fed is not going to move at all. their number one priority is to simply re-instill confidence in the banking system. that being said, i've had plenty of traders talk to me and say tomorrow that could change. if you have an extremely high cpi print the focus could shift. bondholders are diving into the front end of the curve. going to the equity market, it is a different story. if you are bidding on an easier fed, the market should be rallying far more t