today we are looking at pimco.r and second quarter and is now able to sell off hung loans for premium. this is the sweet spot good sonali basak will get us to the details. walk me through it. sonali: remember when the leverage loan market froze up when he came to acquisition financing. the banks were stuck with a lot of the hung debt. pimco was one of the ones to step in -- very few people stepped in -- and bought some. they bought some when he came to apollo acquisition. they bought the debt $.85 on the dollar and they were able to offload it at $.90 or more. it has dipped more recently, and so has been very volatile, but some of the trades have worked out spectacularly for fund managers who were willing to step into the fray late last year and early this year when the markets were struggling when he came to offloading this debt. guy: sonali, who's buying? sonali: who's buying? other fund managers. it is interesting as you saw the chart were volumes and prices have come back slightly, but they have not rebounded f

for mon how to position through the quarter and the end of the year, pimco's earn rin browne, welcome you. >> nice to see you as well, scott. >> what do you make of this market action? i'll just ask you plain and simple. have yields peaked? >> so i think it's really hard to call the peak in yields. we still have massive treasury supply, which is coming. i think key date is going to be the next treasury funding on november 1st. but i think absent that with term premiums continue to rise, i think you can definitely say that the curve is likely to steepen from here, and it's very hard right now to call the peak in yields. >> are we on recession watch then, or how do you assess that? >> i do think that we're heading to a much slower growth environment over the next year. whether or not we tip over into recession, you know,i think is really a hard call to make at this point, but i do expect that we're going to see grow slow below potential: we're going to have inflation gradually come down, and i think that the tails for the outcome are particularly wide right now, which does make uncertai

>> we have seen pimco is sticking to is bullishness. debt told us that the slump right now is largely due to the broad-based selloff sentiment, not really any em driven panic. he said there has been significant over performance in local markets. also other investors point to opportunities like relative value trades, that is when you are betting on, for example korean equities versus australia's, or em stocs china versus europe's. that works in currencies too. you take the u.s. dllr out of the equation and that on one currency's performance over another. shery: our bloomberg markets reporter. we're going to talk about some of that relative value trade, especially when it comes to the currency sign. joining us is head of emerging markets and strategy at credit. always great to have you with us. this is a couple of trades you are liking at this point in em. let's start with the right spot. >> i have been on the others of that outlook that we just discussed. it we have been fairly bearish on em, but at some point, we said there would be a p

. >> announcer: the bond report is brought to you by pimco. a global leader in active fixed income. we got this. we got this. we got this. life is for living. we got this. let's partner for all of it. edward jones >>> welcome back to "power lunch." major energy deal this morning. exxon mobil buying pioneer natural resources for nearly $60 billion and in stock. earlier on "squawk box," darren woods explained why this deal works now. it's the biggest since they bought mobile, and how it will work as the emergency industry continues to transform. >> this is betting on the capabilities the people of our two organizations, the technologies that we've developed, to basically more efficiently recover resources at a lower cost and a better environmental footprint so that we are actually advancing the ambitions of the lower emissions fusion by using our combined capability to drive down emissions, produce lower carbon intensity oil and gas, and basically push -- continue to be the most responsible operator for providing oil and gas for as long as the world needs that. >> for more on the deal

. >> joining us now is pimco economist tiffany wilding. are you seeing the evidence of weakening in the economy? and to what extent? >> yeah. i think the bottom line is that the u.s. economy as well as developed market economies have been much more resilient than anyone expected in the first half of this year. nevertheless, we do think under the surface that, you know, monetary policy drags are starting to build. and that, just plus the fact that some of these fiscal policy positive overhangs that we've had since the pandemic, you know, excess consumer savings and the like, those are starting to diminish. in our view, this does start to decelerate in the back half of this year. and in the united states. by the way, we're already starting to see that in other developed markets. yes, we do see signs that things are weakening. >> does that turn the bond story around? does that lead to a bid for treasuries? that has been the big headwind for stocks and now added concerns about a rate shock for the consumer. >> yeah. i mean, so i think the bond

. >> the pimco cofounder, speaking to bloomberg's katie greifeld.ck on some of the top corporate stories right now. ai start up anthropic is and early talks to raise $2 billion that would add to amazon's recent decision to invest up to $4 million -- for billion dollars on the company. once finalized, they will value the firm s much as $30 billion. barclays is dismissing roughly 50 senior dealmakers as part of its annual staff cut. really -- it is part of a plan to cut 300 people across the corporate and investment bank divisions. that amounts to about 3% of total headcount in the unit which also includes barclays trading operations. the biggest health care strike in u.s. history has begun with more than 75,000 employees of kaiser permanente walking out. it is the latest in a series of labor disruptions around the -- across the u.s. economy. vonnie quinn joins us with the latest. we know about the tensions brewing in the health care sector since the pandemic. what do we know about the immediate impact of this? >> it is immediately impacting dozens, h

is libby cantrell, head of public policy at pimco. welcome. always good to see you. i want to begin with not speaker mccarthy or the deal that was struck on saturday but on a question of ukraine. conspicuously absent from this continuing resolution was any more funding for ukraine. does that persist, and do we then not continue to fund ukraine's resistance against putin and the kremlin, and isn't this exactly what putin wants and expected from u.s. politics? >> yeah. well, good afternoon, tyler. i think that's -- that's exactly right in that just in highlighting how much of a lightning rod ukraine funding has become particularly for the house republican conference. there was a vote last week that indicated that only, you know, a little more than half of the republican conference was opposed to ukraine funding. this is, of course, after, you know, both -- both sides of the aisle have been mostly supportive of funding the continuing effort in ukraine. it shows you that there are some cracks now, however, the center on ukraine still holds in both parties, and both parti

going to 7% or 8% is not likely in pimco's forecast.d there's a lot of factors that come into play, how we think about inflation, wage pressures. there's a lot of factors that doesn't necessarily portray a slow road toward this digestion. >> does $33 trillion -- does anyone ever say that at pimco? or 150 debt to gdp? aren't those long-term and entitlements that we need to do something? >> away from the political standpoint, when you look -- >> what's political about $33 trillion? isn't that just a reality? >> there's a factual number in that, but you have to look at the supply and demand mechanic, and what you have, joe, is simply that there's more supply coming, and you should expect more term premium, and we've seen that begin to be a function of market pricing, basically the deconstruction of the severe inversion we see in the twos and the tens curve has effectively acknowledged that at this point in time. when you get to the overall rates perspective, where we are right now, there's a big factor in play. number one, that total retur

the cofounder of pimco as well. maybe the market is not oversold. maybe we can play that sound for the global audience. >> they have been spooked over the last week or so i declines in their etf's. we're seeing a little bit of an oversold market here. kriti: there you go. bill gross saying that maybe this is overdone. >> he was specifically talking about was going on in the bond market. there is retracement from its peak. even the volume during the worst of that treasury route was as high of the volume spike during these times. it may have been driven by the more retail investors. he does talk about the 10 year being near 5% being of great value. it does sound bullish. we effort some quite bearish comments heard recently from the treasury market. is this route done? a lot of those questions remaining in this market. a bit of a rally, down another two basis points. 10 basis points yesterday session. kriti: looking at the stock market, we are not seeing as much momentum into that relief rally. , kicking in before perhaps a bigger slide. the bond rally

we'll get details of at break and then hear from pimco's head of public policy.ead to the break, let's get a check on the markets. right now, dow futures off by 63. the nasdaq down by 38. "squawk box" will be right back. the power goes out and we still have wifi to do our homework. and that's a good thing? great in my book! who are you? no power? no problem. introducing storm-ready wifi. now you can stay reliably connected through power outages with unlimited cellular data and up to 4 hours of battery back-up to keep you online. only from xfinity. home of the xfinity 10g network. the power goes out and we still have wifi to do our homework. and that's a good thing? great in my book! who are you? no power? no problem. introducing storm-ready wifi. now you can stay reliably connected through power outages with unlimited cellular data and up to 4 hours of battery back-up to keep you online. only from xfinity. home of the xfinity 10g network. >>> congressman jim jordan vowing to stay in the speaker race. he is expected to hold a press conference this morning. emily?

now you get a lot of fed speakers, but when it's a former vice chair now at pimco, maybe it carries more weight about how people look at it in the market, try to redo the comments to get to what's going to happen moving forward. is that in part what we're seeing? if the fed, in fact, is done, a little bit of a weakening economy off the hot burner is good for stocks at this moment. >> without a doubt. bryn made a point about adp and the j.o.l.t.s. data. the fed in terms of wage inflation and lighter adp numbers, rates pull back a little bit. here we are obviously today. i think about seasonality, and i think about volatility and all that we've experienced the last couple of weeks, the last 40 years the s&p is up 4.6% during the fourth quarter. i think that's a main point to make sure we pay attention to. yes, we have earnings and that's also going to play into it and i think will be relatively strong. although joe is making volume i had points on the consumer and weakness there, there are other valid points when it comes to earnings. >> the hot sizzle off of rates. the yield on the ten ye

at pimco we tried to distinguish between a neutral bond yield on the 10 year and the neutral fed fundse. we will be in a world of steeper yield curves but there's no doubt we really do not have a consistent fiscal policy in the u.s.. we will probably in a world of steeper curves for sure. guy: the neutral rate always interesting to see it with hindsight. what we can observe right now is a very fast move. do you think the fed will be comfortable of the speed of the move we see in the market? richard: so far, fed officials have had a chance and not really taken the opportunity to push back against this. my own sense is to the extent this move does reflect higher bond yields because of so much treasury issuance, it is not something the fed would want to lean against. it does some of the fed's job for it. if moves get extreme or persistent it could get the fed engaged. alix: alan from deutsche bank saying the reason for 75 pips in the 10 year was the tightening for the fed. what looks unruly? what would worry rich if you were still at the fed? richard: good question. what i be looking at i

this is from pimco, saying we are entering an era of extremely attractive fixed-income returns.iking this space over the coming 6-12 months. they are little bit more bearish on the outlook for the u.s. economy. paul, they say the fed will need to start cutting rates sooner rather than later. also inflation and growth have hit the peak as well. paul: belle, we had a few days off of this conversation, that are knocking on the door of 150, what is happening? annabelle: we did really monitor it as it approached that 150, then we had question marks as to the japanese government had intervened, did a little bit of a rate check what some of the banks, we are not clear on what happens but we didn't touch the 150 level and started to move off it, came down to work 47, the 146 mark. once again, we are pushing towards 150. why? it is still a yield gap story between them. they say the yen could we can even further. they are looking at 155 at the end of march against the greenback. they expect to stick with rates higher than longer, the fed. that is another analysis minute still shaping up i

shannon saccocia, ajo will give us the pimco playbook and we're exciteded about all of that, and i hopeat do you have? >> i think the consumer continues to trade down if the economy does hit the skids, that's where you want to be. >> how exciting. >> i know! >> geesh. joe? >> buy the pullback in uber. >> buy the what? >> pullback in uber. >> i am buying the shares of qqqs that joe was selling and i think he owes me a pause. >> bitcoin. friday passed and d.c. circuit court of appeals didn't modify the judgment. >> good stuff, everybody. see you on "the closing bell." "the exchange" is now. >>> thank you, scott. welcome to "the exchange." i'm kelly evans and here's what's ahead. a big drop in bond yields after the ten-day started the day above back 5% and that was enough for bill ackman to cover his bond short. is that helping to drive yields lower today? our portfolio manager says bonds can achieve equity-like returns over the next 18 months where she's seeing opportunity now. not everyone is so sure yields will drop, though. columbia's charles calamires is sounding alarm bells

he is the pimco global economic advisor and the former fed vice chair. he spoke to us yesterday about what he thinks the fed is focused on. >> fed is looking not just at the price data but wage and compensation costs running hot relative to the fed long-run inflation target. guy: -- alix: that brings us to the question of the day. let's start with you. what do you think brings it down? >> i do think tomorrow's payrolls could change the game. i do not understand why markets are so obsessed over every single twist and turn in the jobs data. i was talking before the show that i do think china being on holiday is adding to market volatility. i do not think that is helpful. china will come back online next week. china does tend to have a disinflationary impact on markets and that stability coming from asia's biggest economy, i think that is something that could explain why things are so volatile this week. guy: china comes back, yields go back down? >> i think things will stabilize. what will bring yields back down , i think barclays call is complicated. what

pimco active bond etf trades here on the floor. it's been trading all morning. of course, there's an understandable flight to safety. all of the bonds trading to the upside. you have 10 to 20-year treasuries, 3 to 10-years. etfs are all trading down here, all trading to the upside. very understandable, as i said, flight to safety there. guys, back to you. >> we'll talk in a minute. >>> ian bremmer is next on the latest in israel. we're back in a colef nus.up o icy hot. ice works fast. ♪♪ heat makes it last. feel the power of contrast therapy. ♪♪ so you can rise from pain. icy hot. >>> welcome back to "squawk on the street." i'm silvana henao with your cnbc news update. a group of senators led by senate majority leader chuck schumer met with china's president in beijing. senator schumer expressed disappointment by what he described as a lack of sympathy for israel after the surprise attack launched by hamas. earlier this morning, the military wing of hamas said it launched 90 missiles in israel near the gaza strip. meanwhile, israel defense force officials said i

. >> announcer: the bond report is brought to you by pimco, the global leader in active income.prime target for cyberattacks. but the same ai-powered security that protects all of google also defends these services for everyone who lives here. ♪ somebody would ask her something and she would just walk right past them. she didn't know they were talking to her. i just could not hear. i was hesitant to get the hearing aids because of my short hair. but nobody even sees them. our nearly invisible hearing aids are just one reason we've been the brand leader for over 75 years. when i finally could hear for the first time, i could hear everything. try miracle-ear hearing aids with no commitment during our limited time sounds of autumn event. call 1-800-miracle now. that first time you take a step back. i made that. with your very own online store. i sold that. and you can manage it all in one place. i built this. and it was easy, with a partner that puts you first. godaddy. >>> we're 20 away from the close. let's get back to pippa stevens for a look at the key stocks she's watching. >>

pimco co-founder and former bond king bill gross telling "last call" he believes there is still more room to run. >> the market certainly is oversold at the moment. and in anticipation of treasury supplies and in anticipation of higher for longer and in terms of the fed and the fed's only quantitative tightening program. i think maybe 5% caps it for the near term. it depends on our inflation, depends on economic growth we'll see going forward. >> let's talk about this with robert teeter, head of investment policy and strategy at silver crest asset man management. good morning. great to have you here. we heard from bill gross just there. do you agree with him? you to see the ten-year yield hitting 5% this year as we see the long bond very close to 5% right now? >> well, i think the bond market has been following the fed here. if you look at fed projections, the dot plot out to next year. if you look at futures and expectations for fed funds, those are around 5%, about a year out as well. i do think we could head a little bit higher on yields here. i think we're getting closer to a poi

tom: this is the pimco zr too. it is a pimco 45 plus u.s. treasury note. out since labor day it is 83 to 67. jonathan: have you looked at the 21.20 austrian bond? it is trading in the 30's. were they looksky -- worth a looksy. ♪ ♪ explore endless design possibilities. ♪ to find your personal style. endless hardie® siding colors. textures and styles. it's possible. with james hardie™. ♪ (captivating music) ♪ (♪♪) (♪♪) (♪♪) (♪♪) (♪♪) the first law of thermodynamics states that energy cannot be created or destroyed. (♪♪) but it can be passed on to the next generation. (♪♪) >> -- a successor? >> i do not know who is running. >> when you look back, is there anything you could have done differently for those 8 members? >> and a lot of them i hope to get elected. i probably should have picked somebody else. jonathan: evan mccarthy speaking after being ousted. real turnaround in this market this morning. equities lower but yields higher. yields now downhe word rebellion. there are different kinds of southerners. newt gingrich with sean hannity last night was heate

joining us now is tiffany wilding of pimco.pain trade is to the upside in equity markets, earning stronger-than-expected. is it the same with economic projections, that the economy, if it reacts otherwise, is almost the pain train to where people are situated? tiffany: some of that has been priced into the economics communities forecast. you saw many economists penciling in a recession earlier in the year. if you look at consensus numbers, those have come up. that can continue, but it has been a risk he had been highlighting, in particular the consumer, it is possible the consumer remains strong. the consumer did reaccelerate purchases on the back half of this year. it is a question of how interest rate sensitive the consumer is. lisa: which raises the question also what is the connection between growth and inflation? is there a sense that if growth accelerates, we can still see disinflation? tiffany: this has been a point we have been trying to hammer home, which is that there will be some continued disinflation as a result of

. >> that was pimco co-founder bill gross on last call last night. warning comes as double lines jeff gundlach cautions that the yield curve is deinverting rapidly and should put everyone on recession warning, not just a recession watch. remember how that works with the tornado. i think a tornado watch means the conditions are right, a warning means it is already happening. he warns that a tick up in the unemployment rate could spark a recession. carol slife, chief investment officer at bmo, the equity angle on all this, along with fixed income. does the -- does the fed need to go up again ever in the near future? >> i don't think so. but they can go one more time. what is -- >> why bother? are long rates unmoored now from the fed? >> i would argue the fed message of higher for longer, the long end of the treasury market heard it loud and clear. this -- i would say this very recent move in treasuries has been a little bit more dangerous. we already were in the hard landing camp. i think moving the treasury market, the disinversion of the curve, i thi

tom: bill gross started in pimco a few years ago, literally clipping coupons. folks used to take a bond and cook the coupon, and you would get your interest payment. are we clipping the coupon forward 12 months, or are we total return? russ: i think it is part of a total return. we think about what we have been doing in the fund, we bought a lot of bonds of the last few years, bought a lot of credit in 2021 and 2022, when spreads were wide. we have been holding that. it is not the i think right now that you want to pile into any particular area, but looking at the short end of the curve, there are opportunities. if you are thinking about building in a 6%, 7%, a percent yield in part of the portfolio, that gets you part of the way to the goal, and that is not and we have been able to do since before the financial crisis. it is a different way of thinking about the portfolio versus five years ago, when we will -- you were getting nothing on the front end of the bonds. lisa: how do you think about it in other places where growth is less certain? russ: we are still

pimco's cio dan ison tells me his risk the inflation is still a material risk, high devils of debt areblem and could be and some investors are demanding default. the economy has been strong and you saw the move this morning with the jolts report. that could push up as it did interest rates further. now, iverson recommending investors look to extent the average duration in their bond portfolios. don't buy on the short end. he's taking the duration up to 4.7 years. still low but the highest since 2014. all of that points up a risk that many sitting in cash in those short-term bills may not have thought about called rollover risk. the juicy money market yields that can disappear quickly if the fed starts to cut. vanguard's active tells me the conversation we're having the most about those individuals who rushed into money markets chasing attractive yields have the strategy to hang out there until they see the fed being done. in other words, staying short in cash is like saying you can time the market, a risky proposition. says you can make some of the choices now about your duration. ther

our next guest says he thinks the hiking cycle is finished, policy restrictive, former pimco economistjoins us this morning. always good to check in with you. some of the comments were prior to the print. did this morning change anything? >> it didn't. i'm very much in the amen chorus with what sara and mike were just talking about. i think really the bottom line after this number is solidifies the notion high for longer, not higher for longer, but high for longer and that's what the market has to get its arms around and embrace. from a starting point of an inverted yield curve, that's not warm and fuzzy for duration risk, and therefore, is going to have negative knock-on effects for stocks. not big time, but the fundamental issue is high for longer. >> do some of the risks that have developed say in the last week certainly potholes we've been on watch for for q4 strikes and student loans, does any of that weigh on the hawkish side? >> yes. i think it does. it increases uncertainty and increases uncertainty on the softer side for the economy after this incredibly strong third quarter.

all that has been the recent selloff, and there's not tremendous confidence, and duration is the pimcositting in cash and short-term bonds may not have thought about rollover risks. those juicy money market appeals could cut just like that if the fed decides to cut. i talk to john croke, and he said cash relative to the long-term allocation -- in other words, staying short is market timing and it's a call on timing. he said it's better to make choices about that now, and while there will could be further losses they are only losses if you sell. the biggest risk is the behavior investors that abandon their long-term strategy because of short-run fears, and they realize losses instead of -- >> yeah, if you had gone into a 10 or 15 -- >> right then. >> at 3.5, you would be looking at 70 cents on the dollar. we understand there's reinvestment risks if you don't go along. everybody knows that. if you had gone in the last year, because we are at the highs now, and you are down on every single long bond you bought, you are down. it definitely cuts both ways. there's no upside. why would they