lisa: i am lisa abramowicz in for jonathan ferro. "bloomberg real yield" starts now. coming up, global bond yields surging to fresh milestones as hawkish fed speak you'll's more rate hiking bets and bond vigilantes continue pressuring politicians. we begin with the big issue, treasury yields keep spiking. >> the story of this year has clearly been higher bond yields -- >> rising bond yields -- >> we are back to a different era and i think we will stay here. >> it really comes down to inflation. >> we keep going back to inflation data. >> we will probably see persistent inflation. >> that keep seals on the upside. >> u.s. data will not provide much leeway for yields to follow. >> the underpinnings of the economy in the u.s. is quite robust. >> the reality is heart activity sectors are still strong. >> what that means ultimately as the fed has to be warm to slow down demand-side. >> the two year yield always peaks above whatever the terminal rate is. >> we've still got about 75 basis points more to discount. >> for a bond investor, it will be about reef. lisa:lisa: -- r

. >> this is bloomberg surveillance with tom keene, jonathan ferro and lisa abramowicz. tom: good morning, mr. pharaoh is gone. we are here and lisa, we put our heads together and guess what, we are considering it. thursday. there's so much going on this morning. we'll go to london, lizzy burden briefed on the movable feast of the collapse of the british government, we are not there yet but there are reports coming. i saw something from scott moments ago. we've got to go over to the bond market, which two days in a row pivots to higher yields. lisa: this is frontloading thursday. jim bullard coming out yesterday with kathleen hays and saying they need to frontload. some say they're going to also continue after that. that two year yield, we are almost at 4.6%. we are pricing in 5% fed funds rate next year. this is a game changer for how far the fed can go and how much it can withstand. tom: jonathan ferro does not like to do math, we're going to do it. a huge negative, 10 year real yield, a new high on the 10 year real yield, we have made it 88% of the weight back to where

jonathan ferro jonathan: lisa abramowicz -- jonathan ferro, lisa abramowicz, and tom keene.ng at goofy stuff. jonathan: chaos here are chaos elsewhere? tom: chaos here! the padres won. it is the second largest beating of a team like the dodgers. the dodgers lost. jonathan: are you done? i'm just joking. tom: what is so what about 10:30 this morning on global wall street. jonathan: the debt market, financial markets are so severe it has for the government to do a u-turn. tom: i saw it, jon, this weekend. is the united kingdom on the edge of becoming italy? jonathan: i don't think so. it has its own central bank doing its own thing. it does not compare to what is going on in the euro zone debt crisis. this government has been forced to do something it did not want to do. the chancellor is leading the country right now. not the prime minister. rishi sunak -- tom: let's bring it home. some up all of this international blather -- sum all of -- sum up all of this international blather. people who are looking at rent's up, tuition is up and food. lisa: moynahan is talking in the ea

with tom, jonathan ferro, and lisa abramowicz.n: live from new york city, alongside tom keene, lisa abramowicz, i'm jonathan ferro. futures down on the s&p, jobless claims are big this morning. tom: 207,000 four week moving average on claims. a fully employed america. the fed wants us not to be fully employed. jonathan: well the fed might get something extra and maybe we can look at the soft landing. we can decide how skinny the leading strip is. we have to talk about this debate over a series of months, but he got people hoping. lisa: they got people talking about the pivot which i know. -- tom loves talking about. it's going to kill you. and as we have seen come out good news and good news being bad news, trickling into the fed again on the market. that said, going forward, it is because they are consistent. they're going to be showing until they have seen inflation come back. this is very clear cut. either the fed speakers are wrong or the market is wrong. jonathan: are they going to cut in the recession is my number one questi

now, not even two. 10 back over to connecticut to catch up with lisa abramowicz. we're talking the bond vigilantes and we have someone who has been in the bond market for decades. this was the day of bond vigilantes. this is a year of pond vigilantes and this is raising so much fear about people who valued 20 rates over such a long time. are you more nervous today are more excited? start out you got to respect it. certainly there is a big paradigm shift going on right now. you have to respect the markets. they begin rates where they should be, more so than the fed. it is a paradigm shift receiver the rates have been and then leaping in the story where there has been undo focus on low rates that has put valuation very, very high. respect it, but also you want to be on your own foot which we've been able to do over the last several months or so. if you have been thoughtful about what you put on the books, there is a very extreme time. the cost of capital matters. purchase price matters. and those who have capital and a lot of flexibility in your toolbox will find man

. >> this is bloomberg surveillance with tom, jonathan ferro and lisa abramowicz. jonathan: live from new york city for our audience worldwide, good morning. this is bloomberg surveillance, live on tv and radio along with tom keene and lisa abramowicz, i am jonathan ferro. tom: we see the dow up 1200 points. but i've got to go around the globe from sydney to part this morning, how do you link in this shock from the bank? lisa: basically saying that we are closer to peak yield. does that count as a blink? tom: they blinked, but not in sydney. lisa: does this symbolize that central bankers around the world are heading the threshold for how much they can tighten policy in the face of financial stability risks, even after all of that fed speak that i ignored where they basically come out and say we are not going to blink and we have considerably more to go. jonathan: let's get to the numbers and talk about where we are now. the two-year was -- the 10 year was a little north of 4% last wednesday. you've got this broader story where we have seen peak bond yields. tom: we

. >> this is bloomberg surveillance with tom keene, jonathan ferro, and lisa abramowicz. jonathan: good morning. this is bloomberg surveillance on tv and radio. i am jonathan ferro. futures up again on the s&p 500, up 1.29%. tom: goldman coming up a little bit later. it'll be interesting after the generally good news we saw. it is finally acquired tate, lift inequities. i am going to one person. brian moynihan. do we get the same surprise from solomon like moynahan? he will say business is not all that bad. jonathan: we will talk about the other consumer banks. brian moynihan saint consumers are spending, they have good credit. consumers are in very good shape. you had jane frazier at city saying the u.s. economy remains resilient. we know all of those things about the u.s. economy. tom: you have to go to the conference calls and this dreaded forward guidance. gina martin adams is really good at this at bloomberg intelligence and she says there is a wait to looking out further like there was a year ago. jonathan: early days, but are we skipping over a very low bar for the

tom pharaoh -- jonathan ferro and lisa abramowicz are appearing for announcements. or british announcements. they are going to announce it, but it will not be the most important thing that happened today. tom: send me -- we have no clue what will happen at 9:00. right now we are going to get a clue here on the equity markets. chief equity strategist for bloomberg intelligence. it is a profit monster. they are above where they were in 2019. i thought margins were supposed to contract. >> they are contracting for most of the s&p 500. tom: needles in a haystack -- this came up earlier. damien was watching, but you weren't. what percentage of the spx saw profitable revenue, profitable margins, profitable cash flow? >> we are talking 20% of the s&p 500 index showing actual margin expansion on a year-over-year basis, almost all of the energy or commodity. some selected materials, companies are still showing expansion, but the vast majority is showing margin compression. on an operating margin perspective, you are talking 6 of nine sectors. lisa: michael has been saying you

announcer: this is bloomberg surveillance with tom keene, jonathan ferro, and lisa abramowicz. oming up here. the first look at the american labor economy. onto that report. jonathon: they just blanked and went 25 basis points. lisa: [laughter] really? jonathon: i imagine it will be more than that. we have the central bank decision later. who would have thought we would butcher a central bank decision out of romania? lisa: [laughter] [crosstalking] jonathon: they actually went 75 basis points instead of 50. romania didn't blink. [crosstalking] the reason i say this is because the decision yesterday was ridiculous. the idea they had gone 25 instead of 50, setting the stage for every other central bank going less than expected. tom: daniel schulz, two days outbid. now it is wednesday. jonathon: i am with you on that. dropping more than $1 million. you can get job openings down without sending unemployment, that could happen. lisa: just putting out, this is hardly conclusive evidence that unemployment is waiting rapidly enough for the fed to achieve a soft-ish lending. the issue is

jonathan: i am jonathan ferro alongside lisa abramowicz.ncerned about financial instability and this question of, is the market going to go through the windshield market. they are slamming on the brakes like we have never seen. jonathan: in trying to come back in at the same time. it is like putting the accelerator down and the breakdown simultaneously. 30 year gilt yield down. lisa: i hate that kind of driving and i always feel sick and so i do with this market. that is the fear. you cannot have your cake and eat it too. that is the conclusion with financial stability concerns while still grappling with the highest inflation in decades. the biggest take away is the science of inflation and there are single -- similar signs of trading in other markets as well, including the ecb where they will have to deal with the italian, spanish and greek yields. jonathan: can you believe it is only wednesday? lisa: no. jonathan: i thought yesterday was wednesday. lisa: and earning start on friday. jonathan: and cpi tomorrow. we are up by 22 points. the

. >> this is "bloomberg surveillance" with tom keene jonathan ferro, and lisa abramowicz.lo, q4. good morning, good morning. this is "bloomberg surveillance" on tv and radio along with tom keene and lisa abramowicz. an ugly q3. tom: ugly q3 and for many people it continues to q4. the other thing is we need a roadmap of how the government comes back. jonathan: absolutely killing it this morning. you take a train. down to houston. not sure how much that costs anymore. anyway -- lisa: keep going. [laughter] jonathan: high volatility, poor liquidity, financial stress. that is the bond market. lisa: that is the reason you are seeing concern trickle into the other markets because that is what we are hearing. just now from sebastien galy that if the risk is in the sovereign debt complex, how did that triple out -- trickle out to the rest of the market? jonathan: and if we are facing a recession, a bomb will behave like you expect bombs to behave. tom: we have to watch volatility in the u.s. market. it is tangible. i want to go to the united kingdom. standard deviation. the basic

i am alongside lisa abramowicz. i am jonathan ferro. features doubt about .3% on the s&p. coming up. lisa: it really is a very big week. cpi and earnings we also have the university of michigan sentiment. we also have the imf. all of these meetings are sort of tapped off by the end of the week, this expectation of what is going to happen with the bank of england. still, there is this feeling, a drumbeat into something monumental for year end. jonathan: here is a quote from last week, volatility up and down. ultimately, fundamentals prevail. lisa, it could take longer than we would like at the conclusion. lisa: the other conclusion is this has been building, what he has talked about all year, and now other members of the wall street analytics community are getting on board, saying the same thing, and you are seeing on the ground evidence that he is -- that they are correct. you are seeing it across the board, in sectors and retail. how important is apple going to be later this month? we will start to understand it is not just semiconductors but a demand for small electronic

alongside lisa abramowicz, i'm jonathan ferro with sonali basak. ccording to a person, kwasi kwarteng leaves the u.k. government. the chancellor is out. lisa: the question is, who is next? we are getting some reporting on who could be the successor. i will get my words out. how do you rebuild the trust in an administration that is really in peril. jonathan: some reporting from the times. the former secretary may become chancellor. is that the direction this government might be going in? lisa: that is the reporting, what does that mean for liz truss and her survival at the helm of the party? is this the predecessor of kicking her out? is this the beginning of more political turmoil? jonathan: based on the reporting we will hear from the prime minister potentially at the 9:00 hour in new york city, that is 2:00 p.m. local time. based on reporting of the last 24 hours there will be some form of u-turn from the announcement some fridays ago. how much will it be? i don't know. lisa: is it simply cleaning house? that seems to be the suggestion. jonathan:

really would not want to be in this position for so many decades. >> tom keene, jonathan ferro, lisa abramowicz. >> with our audience worldwide, this is bloomberg surveillance with jonathan keene, and lisa brown was. >> may be the one main constructive story with exxon and chevron is well, but you are right. what it means is that you cannot take this as an industry group had the idea of big tech, i do not i. mehta is dramatically different than abell. >> microsoft is down hard. lisa is down 12.6% in the market. we are talking about how the performance of the shares in the aftermarket are probably more interesting than the actual earnings. what i find fascinating on bloomberg intelligence is coming out and saying you've already downgraded expectations substantially, and they are still distant in. in real time, there is a forward look. that is due to international. that is how much they are discussed with the idea of the weakness around the globe, and the united states problem, calling for action. >> lisa is dead on. this is an international story. ask we will get cpi later. looking forward to th

lisa about -- speaking to lisa abramowicz, a security advisor says the administration is not announcing a ban on fuel exports . >> i never take anything off the table but it is not what we are announcing today or anytime in the near future. i would put that aside and focus on where we are which is trying to bring down the price. mark: the official adds the focus of the white house is to try to bring down the price of gas. for chicago mental health pilot program dispatches clinicians to some 911 callers. that is a strong promise. the service has connected nearly 400 people to care without a single use of force incident or arrest in its first year while promising the program still has its hits as crisis management response teams operated just six hours a day five days a week and only in four of chicago's 22 police districts. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton, this is bloomberg. ♪ kriti: this is "bloomberg markets." proctor and gamble sales beat estimates while warn

announcer: this is bloomberg surveillance with jonathan ferro, tom keene, and lisa abramowicz. od morning, good morning paired for our audience worldwide, this is bloomberg surveillance on tv and radio. what he futures negative -- or rather positive by 0.05%. i'm so used to saying negative. lisa: if we have a seventh day of losing, it will be the worst since february 20 20, hitting the lowest level since late 2020 yesterday yet again. jonathon: we say often that the headline number is for the headline of the newspaper. let's start with core. lisa: it's going to increase, that is the expectation. what does that do for the fed? does that mean they have to be more aggressive and kind of squelch those voices on the outside saying i'm a little bit worried about what's happening with the financial stability. jonathon: looking for another 75 after this? lisa: ultimately. we will have to see what this says. jonathon: the economy is rolling over with it. lisa: mark wilson says that light at the end of the tunnel is a freight train coming straight at you. jonathon: if you are very bearish

. >> this is bloomberg surveillance with tom keene, jonathan ferro and lisa abramowicz.onathan: big earnings after the close, good morning. this is bloomberg surveillance on tv and radio, alongside lisa abramowicz and tom keene i am jonathan ferro. tom: a big day, a big day for earnings as well. the ecb, we are going to the statement. i am not an expert, this is not just about folks. for more than the fed, this is about a balance sheet analysis. jonathan: the potential to wind back the balance sheets. things get harder as the year progresses. 75 basis points potentially, then talking about balance sheet unwind, all of this gets to recession. i've said repeatedly all week, they are said to do this on a week we have pmi in the 40's on the euro side. tom: energy is down as well. you have stability within the united kingdom, 11561 on sterling. it is a changed landscape from two weeks ago. jonathan: without a doubt, the dollar is weaker. that is giving people more faith in the equity market. going back to the ecb, 75 basis points into a recession potentially, with double-digi

. >> this is bloomberg surveillance with tom keene, jonathan ferro, and lisa abramowicz. ks flipping and flopping as they balance the better earnings after inflation goes higher. jonathan ferro is off. he is not playing ftse with the dow. rates higher, 10-year yield in the u.s., the highest level going back to 2008. tom: on a wednesday it is supposed to be quiet. all of the talk to me is in the yield space. i go to the real yield, 1.66%. not a -1% of ages ago. lisa: this is the big takeaway of the past couple of weeks, not just in the u.s. or u.k., but around the world. where are we going to end up? we are not going to end up at zero. that has to be a reset for companies in quarters to come. tom: this morning across wall street, they will have their year end review, their first look at 2023. good luck with that. lisa: where is the visibility? that speaks to their earnings we are getting, procter & gamble front and center. it highlights the fact that consumer facing companies dealing with all of the industrial headwinds are still doing ok for now. kailey: the operative phra

announcer: this is "bloomberg surveillance" with tom keene, jonathan ferro and lisa abramowicz. a spooky voice while holding a flashlight under her chin. surely today is the opportunity. let's talk about how bad everything is right now. lisa: have you brought a flashlight or a torch? jonathan: i'm sorry. lisa: than i can't do it. jonathan: you call it a torch? lisa: i call it a flashlight. jonathan: i will do it if you want. good morning, good morning. after the tremendous rally last week, i have to say i've come away last week thinking how tremendous this equity market was in the face of some terrible earnings we got from walk-through major tech players. tom: lisa: i feel like a broken record and i hate going back to this, people believe that if the fed starts to slow the rate of increase of their rate hikes and that we are reaching peak inflation, that is going to give a lift market. will it? it all goes down to some of the earnings we've seen and whether they continue to deteriorate. jonathan: and when the fed goes beyond november, november was always going to be about decemb

alongside lisa abramowicz, i'm jonathan ferro. counting you down to payrolls friday. lly changed. lisa: everyone is excited for this data point. i think it is going to be important to see how the labor market is progressing. i think right now to understand if this is going to have any determining effect on the fed's path or the narrative is a bit of a stretch. so with -- so what is the marginal trading come from? do we interpret if this is closer to a soft landing or the fed going jonathan: -- following the 1.1 million dollars -- 1.1 million plunge in job openings would serve as a sign that tighter financial conditions are gaining traction on the labor market. lisa: this speaks to what bruce at jp morgan was saying. 100,000 jobs being created consecutively would cause some sort of pause, some sort of reassessment at the federal reserve. will they signal that? this is an honest question because they have been coming out and have been basically watching the markets and saying, guys, stop with the hoax, quit it. jonathan: if they signal we are going to go to 50, to 25, yo

announcer: this is bloomberg surveillance with tom, jonathan ferro and lisa abramowicz.yone, this is "bloomberg surveillance." a common theme of the earnings season from industrial america this morning, john, right over to where we are with tech this afternoon is dollar ramifications. jonathan: microsoft coming up a little bit later. 3m is taking that opportunity to blame fx. the dollar is a whole lot stronger and if you are an international company this year, it makes a difference if you are based here in the united states. tom: a great chart showing that domestic company outperforming versus multi national and international as well. the conversation, jordan rochester, just simply not about the yen, it is about a holistic thingy, the developing economy, and there's real dynamics out there. the question, the step down. tom: the blink down. jonathan: they are not looking for that. tom: but then what? do we all agree 75? then what? lisa: at what point, if they do pause and -4.5%, what happens then? jonathan: i didn't say anything. lisa: if they don't do anything further, i