Bloomberg Surveillance

Blackrock Managing Director Jeffrey Rosenberg discusses the latest Fed decision with Bloomberg's Tom Keene, Lisa Abramowicz, and Jonathan Ferro. See omnystudio.com/listener for privacy information.

Bloomberg Opinion Columnist and Former NY Fed President Bill Dudley discusses the latest Fed decision with Bloomberg's Jonathan Ferro, Lisa Abramowicz, and Tom Keene. See omnystudio.com/listener for privacy information.

Bloomberg's Tom Keene, Jonathan Ferro and Lisa Abramowicz discuss remarks from Fed Chair Jay Powell following the Federal Reserve's latest policy decision. See omnystudio.com/listener for privacy information.

Bloomberg's Tom Keene, Jonathan Ferro and Lisa Abramowicz break down the Federal Reserve's latest policy decision on a special edition of Bloomberg Surveillance.See omnystudio.com/listener for privacy information.

Claudia Sahm, Sahm Consulting Founder & Bloomberg Opinion Writer, says her biggest risk factor in the markets is the Fed itself. John Stoltzfus, Oppenheimer Asset Management Chief Investment Strategist, says any interest rate cuts would likely happen toward the end of 2024. Mike Schumacher, Wells Fargo Global Head of Macro Strategy, says that markets are running ahead of the Fed. Andrew Hollenhorst, Citi US Chief Economist, says an overall slowing of economic activity points to a Fed cut. Chris McGratty, KBW Head of US Bank Research, says banks are deleveraging amid expectations of slower growth.Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance See omnystudio.com/listener for privacy information.

Dana Peterson, The Conference Board Chief Economist, expects consumers to pull back on spending as core prices ticked up in November. Alicia Levine, BNY Mellon Wealth Management Head of Investment Strategy and Equity Advisory Solutions, predicts the Fed won't cut rates until the second half of 2024. Lindsey Piegza, Stifel Chief Economist, says her concern is that the Fed doesn't tighten enough, and allows inflation to become further entrenched. Christyan Malek, JP Morgan Global Head of Energy Strategy and Head of EMEA Oil & Gas Equity Research, says it's only a matter of time until the global oil markets tighten.Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance See omnystudio.com/listener for privacy information.

Carl Riccadonna, BNP Paribas Chief US Economist, says we still have yet to feel peak restriction. Sarah Hunt, Alpine Saxon Woods Chief Market Strategist, says there's a place for bonds as investors look to a more balanced portfolio. Greg Valliere, AGF Chief US Policy Strategist, says we could see a surprise from the Democrats with an unknown nominee. Max Layton, Citi Global Head of Commodities Research, says OPEC+ would need to maintain cuts next year in order to balance markets.Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance See omnystudio.com/listener for privacy information.

Julie Su, US Acting Secretary of Labor, reacts to the better-than-expected November jobs report. Michael Darda, Roth MKM Chief Economist & Macro Strategist, says that the report should compel the Fed to hold off on cutting rates in early 2024. Jeff Rosenberg, BlackRock Portfolio Manager of the Systematic Multi-Strategy Fund, says the report suggests a very strong labor market supportive of services inflation. Jerome Schneider, PIMCO Managing Director, Short-Term Portfolio Management & Funding, gives his take on the jobs report. See omnystudio.com/listener for privacy information.

Tiffany Wilding, PIMCO Economist, expects growth to stagnate next year as the Fed's policy drags continue to build. David Bailin, Citi Global Wealth Chief Investment Officer & Global Head Of Investments, says there's opportunity in rising earnings as markets begin to normalize. Randy Kroszner, Univ. of Chicago Professor of Economics & Former Fed Governor, says continued wage growth makes the Fed's inflation goal unlikely. Paul Sankey, Sankey Research Founder & Lead Analyst, says he's concerned that Saudi Arabia may dump the oil market as prices continue to drop. Terry Haines, Pangaea Policy Founder, recaps a fiery Republican presidential debate.Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance Full transcript: This is the Bloomberg Surveillance Podcast. I'm Lisa Abramoids along with Tom Keane and Jonathan Farrow. Join us each day for insight from the best in economics, geopolitics, finance and investment. Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and anywhere you get your podcasts, and always on Bloomberg dot Com, the Bloomberg Terminal, and the Bloomberg Business App. Right now, I've been out a few days, but I really want to reset here on the American economy, and there's no one better to do that than Tiffany Wilding, economist at Pimco. Tiffy, I'm going to go beyond the labor reports. We'll circle back to that. What is your real GDP growth for twenty twenty four? Yeah, I mean, so we think that the good news from twenty twenty three, the resilient story, the you know, two and a half percent kind of above trend GDP growth, you know, that's probably squarely behind us. You know, the saying kind of goes you can't go to heaven twice, and we think some of the factors that led to that, you know, we're still some of these excess savings sloshing around from the pandemic and other supports, and you know, and those kinds of things in our and under our estimation are going away next year. And when you when those things go away, what you're left with is still tight monetary policy, you know. And obviously we have a Federal Reserve that is telling us they're going to remain on hold. So those policy drags are continuing to build. So overall, we think growth probably is closer to something, you know, the stagnant. You know, whether it's slightly positive or slightly negative, I think is anyone's guest. But we're kind of a stagnant situation next year. So are you basically saying that we're in heaven and that this is the Goldilocks and that you can't go there again it's over? Yeah, I mean, so we do think there's a lot of good news this year with the US economy. There's a lot of surprising resilience in the growth numbers, of course, you know, and and so we think, you know, the supply picture, as the Federal Reserve has also pointed out, has also helped that, you know. But again, if you looked at twenty twenty four, you have demand which is potentially coming down, you know, but some of the things that added to supply, like supply chain normalizations. You know, we have the labor force participation rate for the prime age folks that are now you know, it's back to pre pandemic levels. You know, we're just not convinced maybe that you're going to get as much on the supply side next year. Now. Of course, immigration has been a story here, and that's why we've also seen you know, the unemployment rate rise because some of those labor market inflows aren't getting absorbed by just a strong labor demand. But again, overall, all of those signals kind of point to us of something that's closer to more stagnant. More stagnant economy. Baked into this is this assumption that you're going to have higher yields for a longer period of time. You said, what we're going to be left with is just tighter financial conditions, and yet it's unclear whether that's going to be the case. There have been a lot of people calling for pretty substantial rate cuts by the Fed, by the ECP in response to inflation coming down significantly. Do you agree with the paradigm or oil prices stay lower than they have and keep inflecting lower because of production, because of supply, you start to see a re engagement of global trade, forget deglobalization, and you start to get more people come into the workforce. It's basically everyone that people use. It's the opposite of the this time is different narrative that we heard this year. Yeah, well, I mean, I'm not exactly sure in terms of labor market inflows. You know, higher participation rates for that prime age cohort, you know, I'm not sure that that's going to continue to increase. I do think there's some potential for immigration flows to stay high in twenty twenty four. That's been a story not only in the US but across the developed markets. Obviously geop elevated, you know, geopolitical risks and conflicts are are contributing to that as well. But overall, you know, I guess what we

Liz Ann Sonders, Charles Schwab Chief Investment Strategist, says the status of the economy doesn't justify the Fed cutting rates. Amanda Lynam, BlackRock Head of Macro Credit Research, claims banks will remain at the center of lending, but that private credit can now compete in ways it previously couldn't. Libby Cantrill, PIMCO Director of Public Policy, previews the fourth GOP presidential debate. Elliot Ackerman, US Marine Corps Veteran & Former White House Fellow, breaks down the latest on the Israel-Hamas war. David Rubenstein, Carlyle Group Co-Founder, previews a brand-new episode of Bloomberg's "The David Rubenstein Show: Peer to Peer Conversations" featuring Pershing Square CEO Bill Ackman. Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance Full transcript: This is the Bloomberg Surveillance Podcast. I'm Lisa abrahmoids along with Tom Keen and Jonathan Ferrell. Join us each day for insight from the best in economics, geopolitics, finance and investment. Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and anywhere you get your podcasts, and always on Bloomberg dot com, the Bloomberg Terminal, and the Bloomberg Business App. I've been looking forward to this conversation. Liz An Son is the chief Investments trying to just a chold swap joins us right now. Lizan, I've been looking forward to it because we're not going to talk about self landing, hard landing, no landing, none of that. We're going to talk about what you and a team have been focused on now for a while, and that's rolling recessions. That is a framework, Lizen. Why is that so important for you? That nuance? Well, first of all, this is a unique cycle. That's the ultimate understatement. I think taking a nuanced approach is important, and we've been using that term for quite some time. I think the only other person that I know that's been using as long as we have is Ed yard Denny, and not that we want to rehash the last three and a half years, but if you think about the stimulus fuel demand surge coming out of the worst part of the pandemic, all of that demand and money associated with it was funneled into the good side of the economy because we had no access to services. That was where the inflation problem first began on the good side of the economy, exacerbated by the supply chain disruptions. But fast forward to the more recent period, we've gone into hard landing recessions for housing, manufacturing, a lot of housing related, many of the consumer product areas that were big beneficiaries of the lockdown, and we've gone from inflation to disinflation to deflation in many of the goods categories. We've just had the later offsetting strength on the services side. Same thing as rolled through in terms of inflation. So to me, best case scenario is not really soft landing that Schuberti sailed for many important segments of the economy. It's a continued roll through where if in when services in the labor market get hit, you have found stability and maybe even some improvement in those areas that have already taken their hit. Lezan, love your nuance. Let's build on that. Where are you seeing opportunities that might have hit bottom that you want to be investing in now, In particular sectors that you think already have rolled through, they're hard landing and are now buys. I still think that investors are better off taking a factor based approach as opposed to a monolithic sector based approach, But we have made some adjustments in terms of the foot factors that we're focused on. As you know we've talked about it on this program. We have been emphasizing stay up in quality with factors like interest coverage and strong return on equity and strong balance sheet, but also growthy factors like positive earnings, revisions and surprises. But I think you want to now add kind of evaluation kicker into the mix because this year was characterized by all multiple expansion, no earnings growth. We see in the last month that there is money itching to move out of the Magnificent seven to find opportunities down the cap spectrum. And you have seen some lower quality characteristics to of what has rallied. I think you want to fade that and continue to lean into quality. But you can find it across the spectrum of sectors and also outside that group of just the Magnificent seven. So you said something Lezen talking about how people are itching to take the money that they've put into the Magnificent seven and put it to work elsewhere that might be at a lower valuation. How big is that wave of people is to get out of the Magnificent seven. Is this something that could cause an underperformance or is it just simply there's just been so much money people are looking for other ideas well. So far, so good in terms of the rotational nature of this easing of some of the excesses, You've seen some pullback in the Magnificent seven. The rest of two thousand SMP

Marc Rowan, Apollo CEO, says his firm has no plans to shift from private equity amid the best year in its history, and also discusses rising antisemitism and the 2024 presidential election. Jim Zelter, Apollo Asset Management Co-President, says the Fed put is back in the market. Torsten Slok, Apollo Global Management Chief Economist, says there's evidence of a weakening labor market. Olivia Wassenaar, Apollo Head of Sustainable Investing, joins from the COP28 climate summit in Dubai where she says there's a 'tremendous' amount of optimism and capital.Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance See omnystudio.com/listener for privacy information.

Peter Tchir, Head of Macro Strategy at Academy Securities says he wants to be underweight Treasuries right now.George Saravelos, Global Head of FX Research at Deutsche Bank, says the ECB should cut rates when it meets next week. Ajay Banga, President of The World Bank joins from COP 28. David Turk, US Department of Energy Deputy Secretary joins from COP 28 where he says now is the time to refill the Strategic Petroleum Reserve. Helane Becker, Senior Research Analyst at TD Cowen weighs in on Alaska Air's plans to buy rival, Hawaiian.Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance See omnystudio.com/listener for privacy information.

Reports of crimes targeting Jews, Muslims and Arabs have risen around the world in since the Oct. 7 Hamas attack on Israel, and the Israeli military’s retaliatory operation in Gaza. While previous conflicts in the Middle East also sparked a backlash outside the region, this time it is more intense and the wave of hate may be far from cresting, according to advocacy groups, former law enforcement officials and analysts. In this Bloomberg Radio special report, Stephen Carroll examines how these communities are confronting a global surge in hate speech and hate crimes.See omnystudio.com/listener for privacy information.

Liz Young, SoFi Head of Investment Strategy, says the correlation between stocks and bonds could remain positive going forward. Lauren Goodwin, New York Life Investments Economist & Director of Portfolio Strategy, predicts the story around technology in 2024 will expand into the digital infrastructure. Nadia Martin Wiggen, Svelland Capital Director, says she doesn't see a long-term negative price path for oil. Antonio Neri, Hewlett Packard Enterprise President & CEO, discusses the company's expanded partnership with Nvidia into the generative AI space. Dan Ives, Wedbush Sr. Equity Research Analyst, breaks down the "historic" launch of the Tesla Cybertruck.Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance See omnystudio.com/listener for privacy information.

John Micklethwait, Bloomberg Editorial Editor-in-Chief, reflects on the life and career of the late Henry Kissinger. Neil Dutta, Renaissance US Economic Research Head, says the economy is on a glide path toward a Fed interest rate cut by March. John Lawler, Ford Motor Chief Financial Officer, says the company is focusing on increasing efficiencies and reducing labor hours to produce vehicles. Kelsey Berro, JPMorgan Asset Management Fixed Income Portfolio Manager, suggests the Fed is done hiking rates amid faster-than-expected disinflation. Norman Roule, Center for Strategic & International Studies Senior Adviser, discusses the latest on the Israel-Hamas war. Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance See omnystudio.com/listener for privacy information.

Henry Kissinger, the child refugee who rose to become US Secretary of State and defined American foreign policy during the 1970s with his strategies to end the Vietnam War and contain communist countries, has died. He was 100.Not long before his passing, Kissinger sat down with Bloomberg Editor-in-Chief John Micklethwait for an extended conversation. He talked about his life and career, what shaped his worldview, and his thoughts on the current state of global affairs. Listen here for that special conversation, in its entirety. See omnystudio.com/listener for privacy information.

Mary Barra, GM CEO, discusses the company's announcement of its biggest-ever buyback plan, and says she expects 'strong adoption' of more affordable EVs. Thierry Wizman, Macquarie Global Interest Rates & Currencies Strategist, says the biggest risk right now is another sudden shock in the oil market. Scott Nuttall, Kohlberg Kravis Roberts Co-CEO, discusses his firm's acquisition of insurer Global Atlantic. Lara Rhame, FS Investments Chief US Economist, says the state of services in the economy could threaten the Fed's 2% inflation goal. Howard Marks, Oaktree Capital Co-Chairman & Co-Founder, reflects on the legendary life and career of Berkshire Hathaway's Charlie Munger. David Rubenstein, Carlyle Group Co-Founder, previews brand-new episodes of Bloomberg's "The David Rubenstein Show: Peer to Peer Conversations" featuring AIG CEO Peter Zaffino and Pershing Square CEO Bill Ackman. Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance Full Transcript: This is the Bloomberg Surveillance Podcast. I'm Tom Keene, along with Jonathan Ferrell and Lisa Abramowitz. Join us each day for insight from the best an economics, geopolitics, finance and investment. Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and anywhere you get your podcasts, and always on Bloomberg dot Com, the Bloomberg Terminal, and the Bloomberg Business app. John Ferrell with Mary Burrow, I want to go through some of the numbers for our audience. Divid end up thirty three percent, biggest ever buyback plan ten billion dollars, forty billion dollar name yesterday. Just some context perspective there that is massive inquiring minds. Mary will want to know why have you decided to deliver a ten billion dollar buy back shortly after you've signed a labor contract that adds nine point three billion to expenses over its term. Well, as we looked at what was happening from a labor perspective, we had built and really the labor environment going into our negotiations, we had put conservative estimates into our plan. So although it was a little higher than what we expected, we believe that we have and our guidance for next year, we've already said that we'll be able to offset that completely with the plan that we already had of a two billion dollar cost out perspective. So we did the right thing to recognize our manufacturing team members who have done a great job and continue to build vehicles safely with high quality. And we also thought that we've got to look and make sure that we're balanced across all of our stakeholders, and our owners are very important. So we think this was a very balanced response when we look at what was done from a labor perspective and what we're doing as part of our capital allocation framework for our owners. Well, let's get into that. So shareholders are super happy. The name is up by almost eleven percent so far this morning. I wonder if you aw Wiz Mary, they didn't get the forty percent they wanted. They got twenty five plus cost of living adjustments and other things as well. Is the old things of this morning not something that concerns you. When I look at it, I think it's balanced. Again, we have very well compensated and you know, when you look at the suite of benefits that our represented team members have it's a very very appropriate package and frankly leading from an industry perspective broader than just the auto industry. So I think we did the right thing to recognize and reward the hard work of our manufacturing team members across the board. But also one of the things our manufacturing team members very much value is job security. And to have job security, you have to have a strong company and you have to look at all of your stakeholders. So what we did from a share buyback perspective for our owners is I think a very balanced response. As you know, this move this morning not just about the capital return program, also about cost cuts. We know you're looking to fully offset that labor contract the additional costs from it. Have you identified where you will cut where you need to cut? Yes, a lot of this was already underway. At the beginning of this year calendar year twenty twenty three, we announced it too, billion dollar cost reduction structural cost reduction between twenty three and the end of twenty four. That's well underway. As I said, we also comprehended that we would have increases in our labor cost as we looked at what the environment was and also wanting to reward our manufacturing employees. So you know there's work going across many aspects of the business and including making our products more efficient while still having the features, the functionality and beautiful designs that our customers want. So there's been a concentrated effort at the company to lower our fixed costs while enabling wonderful products and rewarding the team that is helping us deliver them. Clearly, these are addition

Charles Munger, the alter ego, sidekick and foil to Warren Buffett for almost 60 years as they transformed Berkshire Hathaway Inc. from a failing textile maker into an empire, has died. He was 99. For more on Munger's life and legacy, Bloomberg Radio hosts Carol Massar and Tim Stenovec speak with Bloomberg News reporter Noah Buhayar, and long-time Berkshire investor, Bill Smead of Smead Capital Management.See omnystudio.com/listener for privacy information.

Cameron Dawson, Newedge Wealth Chief Investment Officer, says that signs of a recession will come from the market, not the Fed. Bill Dudley, Former NY Fed President & Bloomberg Opinion columnist, expects central banks to introduce digital currencies amid disarray in the crypto sector. Mike Mayo, Wells Fargo Senior Equity Analyst, says AI can take the relationship between banks and technology to another level. Katy Kaminski, AlphaSimplex Chief Research Strategist, says she's concerned about the risk-on rally in the bond market. Norman Roule, Center for Strategic & International Studies Senior Adviser, breaks down the latest on the Israel-Hamas war amid the release of more hostages from Gaza. Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance Full transcript: This is the Bloomberg Surveillance Podcast. I'm Tom Keane, along with Jonathan Farrow and Lisa Abramowitz. Join us each day for insight from the best and economics, geopolitics, finance and investment. Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and anywhere you get your podcasts, and always on Bloomberg dot Com, the Bloomberg Terminal, and the Bloomberg Business app. Cameron Dawson tear eyed over the quality of that data. Check Cio of New Edge Wealth joining us right now. What's your conviction the next year? I'm talking about you need to get conviction. Now, do you have a lot of conviction? I think that we have to judge as we go into the end of the year when we look at where we in the year with positioning and sentiment and valuations and earnings expectations, because if we get to a point where those things are stretched, where people have been drawn into the market, everybody chases the market into a rallying to the year end, that's when you probably want to start asking questions of how sustainable or durable is We learned that lesson really powerfully this year in the opposite direction. People were underweight, valuations had come in, positioning was very light, and that set up for a very powerful year this year. One really difficult thing for a lot of people is to get two things right. Won the call on the economy and to what the economy means for financial markets. I was looking at Deutsche Bank's call yesterday least when I were going back and forth on this, They've got recession one hundred and seventy five basis points of cuts. Then bink chat is saying fifty one hundred on the SMP. Is good news bad news? Or is bad news good news? What is it? I mean, it's sort of that I want it all and I want it now kind of mentality, which is that I want a FED that's supportive, and I want an economy and earnings that are going to be growing very strongly. And I have to think that we need to ask the question of if a strong economy and strong earnings are consistent with having FED rate cuts and a recession, and if we can have both at the same time, meaning that if the FED is cutting rates, can we really grow earnings at twelve percent next year? Do we actually have the potential that we could have a third year in a row of earnings being closer to flat. If we have a recession. Well, this is John Sulfis basically saying people think we're late cycle, we're actually mid cycle. That if the Federal cuts rates is just sort of a mechanical year over year trying to adapt restrictiveness to inflation, and that that will pave the way for companies to continue to evolve, particularly in the consumer cyclicals. Thoughts. Yeah, it's interesting. You go back to the times when the Fed cut rates and we didn't have a recession ninety five, ninety eight, and twenty nineteen. What's interesting is that the Fed was actually very fearful of a recession in each of those times. They talked about the US not being an island. What's interesting is that the market wasn't scared of a recession. There was no impact to earnings. You had the market hitting all time highs as they were cutting rates. So I think we have to take the cue from the market if it starts to sniff out that data is weakening, that data is starting to come in where we need to be cutting earnings stents we don't hit all time highs in markets, that's when you'd say maybe recession risk is actually higher. So what's your conviction is it to basically shift away from the conviction of everybody else that equities are going to go higher and to take the other side. I think it's incredibly important to remain invested even in times of uncertainty, and the way that we do that is focusing on quality, focusing on companies that can block and tackle, which just means that I want to take out the risk that the economy is going to roll over and I'm going to have big earnings downside. But I also don't want to be over levered. I don't want to be overextended on risk having to have the best case scenario in order for my investments to work. So it's still that middle ground. It's worked really well this year, it likely wo

Lori Calvasina, RBC Capital Markets Head of US Equity Strategy, says the path for equities is higher in 2024. Dana Telsey, Telsey Advisory Group CEO, breaks down record-high Black Friday sales. Aaron David Miller, Carnegie Endowment for International Peace Senior Fellow, discusses the latest on the Israel-Hamas war. Torsten Slok, Chief Economist, Apollo Global Management, says the Fed's rate policy is leading to a gradual slowdown. Steve Schwarzman, Chairman & CEO of Blackstone Inc., says his firm has seen a bevy of buying opportunities in real estate across Europe. Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance Full transcript: This is the Bloomberg Surveillance Podcast. I'm Tom Keene, along with Jonathan Farrell and Lisa Abramowitz. Join us each day for insight from the best and economics, geopolitics, finance and investment. Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and anywhere you get your podcasts, and always on Bloomberg dot Com, the Bloomberg Terminal, and the Bloomberg Business App. We begin the program with Lori Cavasina, head of US ecority Strategy at RBC Capital Markets. Lori, good morning. We hope you all had a wonderful Thanksgiving. I want to kick off with your call fifty one hundred for five thousand rather year rent on the s and P five hundred for next year Deutsche Bank going one further, a fifty one hundred, Lurie talk to us about the path to five k. Well, thanks for having me as always, and look, you know we purposefully did not put out you know, we see a near term pullback and a resurgence. I think a lot of people got caught in that trap in twenty twenty three calling for a near term pullback in the first quarter that didn't end up happening. I do think we'll be watching our sentiment indicator very closely. It's been the best star in the sky to navigate the equity market this year, but it's also round tripped a couple of times. It started out giving you a screaming by signal because of deep pessimism. Return to that post. SBB gave a sales signal in August and then gave a by signal again in November. So I think we're going to have to just be very tactical in that. You know, I have been telling people November is very consistently a strong month, but December is a little bit more hit or miss. So we'll see if we end up getting the Santa or Grinch in December. But I do think the path for equities is higher next year, and if we do have a bit of a short term pullback either in December to start the year, I expect it to be temporary. Llurie Goldman Sachs had a note thanks zero Edge for this on sales girls looking out two years twenty three, twenty four to twenty five and the difference between them magnificent seven with eleven percent sales grows versus the SPX four ninety three of three percent sales growth. Why would anybody sell the magnificent seven right now? I think it's a great question, Tom. When we look at our indicators and we look at the megacap growth trade broadly, it looks crowded. If you look at the weekly CFTC data on Nasdaq one hundred futures positioning, we're basically close to peak valuation and growth relative to value. If you look at the rustle one thousand on a weighted PE multiple, which is going to be very heavily influenced by that magnificent seven. And if you look at earning's momentum, we're still seeing better earnings revision trends and growth and value, but value is starting to catch up a little bit, so we are seeing that leadership on the earning side fade a little bit. All of that tells me that there should be a pause in growth leadership at some point. But I think one of the reasons people can't really permanently quit these growth stocks is kind of hitting on exactly what you said, the idea that there will be superior growth there over the intermediate term. And if you look at GDP forecasts for next year one percent in real terms anticipated by the street one point eighty percent in twenty twenty five. When we're in a sub two percent GDP environment, growth stocks usually do outperform because economic growth is perceived to be scarce. So I do think there is a real tension. You know, we still like the tech sector even though we have these shorter term tactical concerns on growth, had those tactical concerns on growth frankly for a while, and they've yet to really materialize in a big way. And I do feel like you may need to see a real ratcheting up of GDP expectations before you can really see growth loose some of that leadership dominance. When you talk about sentiment and how really that's been the loadstone for you, it's figuring out where is investor sentiment em betting against it? Am I correct? Basically? You know, one of the things I've learned over my career, Lisa, is that when everybody is really really pessimistic, that's usually a fantastic time to buy. If you look at when the AAII net bullishness indicator is, you know, sort o

Jeff Gennette, Macy's CEO says department stores are still relevant and his company is ready for the holiday shopping season. Joe Feldman, Telsey Advisory Group Sr. Research Analyst says retailers are starting to embrace AI. Justin Wolfers, University of Michigan, University of Michigan Professor of Public Policy & Economics discusses the surprise drop in prices of Thanksgiving dinner. Brian Kelly, The Points Guy Founder says use your credit card points before they lose value. See omnystudio.com/listener for privacy information.

Jack Caffrey, JP Morgan Asset Management Equity Portfolio Manager, says the holiday rally in the equity market is in full force. Aaron David Miller, Carnegie Endowment for International Peace Senior Fellow, discusses the latest in the Israel-Hamas war and its impact on domestic politics. Helane Becker, TD Cowen Senior Research Analyst, walks through what's expected to be the busiest holiday travel season in years amid uncertainty in the airline industry. Earl Davis, BMO Global Asset Management Head of Fixed Income & Money Markets, doesn't expect the Fed to cut rates until after the US presidential election. Mandeep Singh, Bloomberg Intelligence Sr. Technology Analyst, recaps a chaotic week for OpenAI founder Sam Altman and Nvidia's lukewarm earnings report.Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance See omnystudio.com/listener for privacy information.

Bloomberg Daybreak delivers today's top stories, with context, in just 15 minutes. Download and subscribe for the news you need, delivered by 6 AM Eastern each morning. Listen on Apple, Spotify or anywhere you get your podcasts. Apple: http://bit.ly/3DWYoAN Spotify: http://bit.ly/3jGRYiB Anywhere: http://bit.ly/3J1bct9See omnystudio.com/listener for privacy information.

Rishi Jaluria, RBC Capital Markets Managing Director, says Microsoft has leapt ahead of its competitors in the monetization of AI. Victoria Fernandez, Crossmark Global Investments Chief Market Strategist, says diversification is key for portfolios and expects more volatility to come. Michael Collins, PGIM Fixed Income Senior Portfolio Manager & Multi-Sector Fixed Income Strategies, says there's a chance inflation could get stuck over 2%. Robert Hormats, Tiedmann Advisors Managing Director & Former Under Secretary of State for Economic Growth, discusses the potential deal between Israel & Hamas to release hostages in Gaza and previews his upcoming trip to Beijing in the wake of the Biden-Xi meeting.Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance See omnystudio.com/listener for privacy information.

Mandeep Singh, Bloomberg Intelligence Sr. Technology Analyst, breaks down the shifting AI landscape amid Sam Altman's move to Microsoft. Andrew Hollenhorst, Citi US Chief Economist, says there is no urgency for the Fed to cut rates. Terry Haines, Pangaea Policy Founder, discusses troubling new poll numbers for President Biden. Jane Foley, Rabobank Head of FX Strategy, says 2024 could see major changes in the foreign exchange market. Mike Froman, Council on Foreign Relations President, says that bipartisan consensus on foreign policy and national security still remains despite the US never being more politically polarized.Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance See omnystudio.com/listener for privacy information.

Mohamed El-Erian, Bloomberg Opinion Columnist, guests hosts the show and says the 'enormous volatility' in the bond market needs to be corrected in order to restore the Fed's credibility. Stephanie Kelton, Stony Brook University Professor of Public Policy & Economics, says the Fed has effectively put fiscal policy on autopilot. Steve Chiavarone, Federated Hermes Head of Multi-Asset Solutions, describes the Fed's policy trajectory as headed for a "rocky landing." Stephen Schork, The Schork Group Principal, says traders have become skeptical about supply levels of oil and jet fuel heading into a major travel season. Jeannette Lowe, Strategas Managing Director of Policy Research, says the meeting between President Biden and Xi Jinping won't change the dynamic between the two countries in a major way. Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance Full transcript: This is the Bloomberg Surveillance Podcast. I'm Tom Keene, along with Jonathan Farrell and Lisa Abramowitz. Join us each day for insight from the best an economics, geopolitics, finance and investment. Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and anywhere you get your podcasts, and always on Bloomberg dot Com, the Bloomberg Terminal, and the Bloomberg Business App. Why don't we move on to what doctor Olrium cares Mohammed, We've got to sit on crude, the idea that crude has essentially collapsed into a bear market, down more than twenty percent from the September highs. We spent this week talking about soft lending, hopes and dreams. Do we have to start thinking about an economic downturn in the not too distant future, well some of them. Some people are talking about this. I mean to see oil prices down more than twenty percent from the highs at the time that there's a conflict going on in the Middle East. It's quite quite and that's feeding into the soft landing. And we're going to talk a lot about this. But the market has now fully embraced not just that the fat has finished this hiking cycle, which I think is correct, but that we're going to see deeper and deeper cuts next year without a recession, and that's the critical assumption that's now built in across markets. I want to get the money question out of the way right away. As CEO of a major two million employee company in America called Walmart, yesterday brought up a d word deflation seared into the fabric of Cambridge, Oxford in the London School of Economics as a study a British deflation of the thirties and forties. America has never faced that have they They haven't, and we've had Japan recently. And the problem with deflation is it discourages people from buying today. However, I want to stress the US is deflation in certain products, food being the primary example, and that's why Walmart we decited it. We don't have general deflation, and I doubt we're going to have general deflation. I mean, I look at the an inflation question and it is a vector of disinflation in place. Clearly we see that. What is your optimism of getting back to John Williams two point zero percent? Richard claired is two point x percent. I think Richard is more likely to be right than John. I think we're going to get stuck in the high twos, and the FED is going to have to make a very difficult decision. Does it live with inflation higher than target because the target itself is too low, or alternatively, does it acknowledge that two percent is the right target and then crushes the economy. I think that's the choice the FED is going to have to make. What's your best guess right now? I think it's going to go for the format. I think the FED will understand that pressing two percent inflation in a world where there's insufficient structural supply is not the right thing to do. So where do you think it leaves this bond market? Let's go through this course right now. We've got a two year at the moment at about four eighty, a ten year at about four forty. Think about where we've been in the last month of Summerhammet had a two year pushing five twenty five high set of cycle, ten year through five percent high set of cycle. How are you thinking about what we come back down to, bearing in mind what we're pricing for right cuts next year. I think we've come down too far to tell your truth. I understand why some people think that we're going further, but if you look at the inflation dynamics, that's harder to get unless we go into recession. If we go into a recession, then the stock market is mispriced, so you can't have both at the same time. Has something changed? I think this is what it goes back to. Has something changed post pandemic? That means we don't go back to the pre pandemic world. That debate, I think is still on going. Mohammed, where'd you come down on it? I think the pre pandemic world was exceptional. It was a world of qui. It was a world of insufficient aggregate demand. And when you have insu

Ellen Zentner, Morgan Stanley Chief US Economist, says the nearly two-year high in US continuing jobless claims represents a needed softening in the labor market. Bill Dudley, former New York Fed President & Bloomberg Opinion columnist, says there needs to be significant changes to the treasury market in order to restore strength. Chuck Grom, Gordon Haskett Senior Retail Analyst, says Walmart, Target and Burberry's earnings indicate pressure on the entire retail sector. Michael Hirson, 22V Head of China Research, analyzes President Biden's meeting with Xi Jinping and its implications for both countries. Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance Full Transcript: This is the Bloomberg Surveillance Podcast. I'm Tom Keane, along with Jonathan Farrow and Lisa Abramowitz. Join us each day for insight from the best an economics, geopolitics, finance and investment. Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and anywhere you get your podcasts, and always on Bloomberg dot Com, the Bloomberg Terminal, and the Bloomberg Business app. Joining us now, we're thrilled to every usually for big events, So today's a big event. It's always a big event. When Ellen Zenner joins his chief US economist, Morgan Stanley Ellen on claims, I go to the four week moving average. How do you interpret claims with this two hundred thirty one thousand statistic? And can you say there's finally a vector in place of higher claims more pain. So I hope that there's a higher vector in place. I disagree that higher claims will be more pain. We're coming off of extraordinarily low levels. As you said, we look at the four week moving average to smooth through volatility, and it has been lifting, but it is still very low. And so what does that tell me? Something that Mike and Lisa alluded to as well, normalization slowing in normalization, good god man, that's what we've been needing, and I don't see this accelerating at an extreme pace. I've been on the road the last few days in several states meeting with corporate clients. They are finally seeing some relief in terms of how tight the labor market has been in terms of the availability of the kinds of employees that they need. We're seeing not just claims rising a bit here, but I focus on continuing claims. People that have been losing their jobs are staying unemployed for a bit longer, and that's been rising since October, so it's getting more difficult to just get re employed right away. This is the kind of softness in the labor market that we have needed, and of course it takes pressure off the FED to raise rates again. Right going on extended hold, what is the distance between normalization and an outright downturn? So well, the difference is jobs stay positive, So normalization is you've got more supply coming back into the labor market, so you see participation rates rising, which we have. That is what puts upward pressure on the unemployment rate. And we've been seeing that, and if people are having taken longer to be able to get re employed, then that should produce further upward pressure on the unemployment rate. But that just takes pressure off the labor market, pressure off of businesses, off of margins. You see wages grow more slowly, and you'll see confidence build among FED policy makers that they have done enough here. I don't think we're anywhere near getting to negative job gains. I think negative jobs would mean that companies have stopped hiring. What I hear is that they're doing selective hiring, that they stop hiring, and that they start firing, and I mean firing up broadly. And that's just not what we're seeing. But I'm ever watchful, especially reading earnings transcripts, to see if that's something that's around the around the corner. I'm glad you mentioned earnings because we were talking about Walmart, and I understand their idiosyncrasies here, but they talked about potentially seeing outright deflation over the next year with consumers clearly pushing back. You do see margin pressure, you do see a market deterioration and consumer appetite over the past ninety days. How concerning is that to you about the nonlinearity of where things could be. So, Lisa, we put out a consumer survey that goes out into the field every two weeks, and one of the biggest areas of trade down that households have been doing is within stores themselves, say, going from a high priced branded good to the generic good within the store. And that means that those retailers are going to see some deflation. And we've been hearing from businesses that input costs are falling, but prices that they're charged or falling faster. And that's important because we all started to think we the economics community at large, not myself though an exception, started to think that households just have unlimited price tolerance, and that is not the case. Finances start to slow, we run through th

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Michelle Meyer, Mastercard Economics Institute North America Chief Economist, says October's slight drop in US retail sales doesn't take away from overall robust consumer spending. Diane Swonk, KPMG Chief Economist, details how the Fed will look to navigate a potential successful soft landing. Anastasia Amoroso, iCapital Chief Investment Strategist, says corporations could look to cut costs in 2024 if the Fed doesn't cut rates. Henrietta Treyz, Veda Partners Economic Policy Director, discusses an increasingly dysfunctional environment on Capitol Hill despite the passage of a stopgap funding bill. Jennifer Bartashus, Bloomberg Intelligence Senior Analyst, breaks down Target's better-than-expected 3Q earnings. Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance Full transcript: This is the Bloomberg Surveillance Podcast. I'm Tom Keene, along with Jonathan Farrow and Lisa Abramowitz. Join us each day for insight from the best and economics, geopolitics, finance and investment. Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and anywhere you get your podcasts, and always on Bloomberg dot Com, the Bloomberg Terminal, and the Bloomberg Business app. This is a joy what happens with young economists as you read their research and you go, oh, they're quite competent. Not long ago and far away, but a few years ago. That was Michelle Meyer absolutely owning the parsing of the American consumer. She worked for a small bank in Manhattan and is now Chief Economists North America from MasterCard Economics. You own the analysis I put you and Allen Zetner together. You own the analysis of the American consumer. Have we stopped spending? We clearly have not stop spending. Far from it, and think about the data this morning. It was an incredible combination of continued strength and retail spend, of rebound in Empire State manufacturing, which shows that there's still a need for more goods production, which is because consumers are still spending, and on top of that, you're getting some relief on the pricing side. So it's a really nice combination. I hate asking this question, and I'm stunned. It's my first time I've asked it. On November fifteenth, what's back to what's a holiday season look like? What's Black Friday? And then Black Monday and this and that? What does this retail madness did January look like? Well, it is a longer holiday season. We've learned that over the last few years, and it's a heavily promotional based holiday season, and part of that is because of the fact that there's so much demand out there to buy online. I mean, think about the numbers we just saw this morning. Our spending post numbers saw just over eight percent year of your growth in e commerce sales. So you know, you're seeing a consumer that is certainly exploring many different channels of spending, including online, and that creates a lot more opportunities for them to get products, and it also creates a lot more need for retailers to compete with these big moments in time where they offer promotions, and I think that's what's going to be indicative. So we'll learn a lot from the Black Friday period, and it's approaching very quickly. How sustainable is this combination of both robust retail sales and disinflation or even outright goods deflation. So I think you have to consider the different categories. I mean, when you looked at CPI yesterday, you certainly saw some categories like these big durable goods like your refrigerators back seeing some price declines. But for many other things, like many services, for example, you are still seeing some price increases. So part of the drop in prices for some of these goods simply reflects the fact that prices increased too much out of a pandemic because of supply chain issues, because of higher costs, and now it's reverting a bit more to something more normal, right, So that means in real terms you will see some support in terms of some of these items moving through. In nominal terms, you could see some move down in terms of overall spend. So it really depends on why inflation is moving, and that is a function of the type of product and how things evolved coming out of the pandemic. When you put it together, does this seem like a recipe for this goldilocks soft landing, or does this seem to paint the picture of a federal reserve that needs to do more and of an economy that has way too much momentum to really achieve the disinflation that a lot of people are baking into market evaluations. I think the data is shaping up in a way that's really favorable at the moment because you continue to have economic growth. Look at the third quarter GDP numbers, that was fairly broad based economic activity, not just consumers but also businesses investing inventories getting much more manageable and in stock So you know, things have been evolving remarkably well in terms of the real economy, taking out some

Jay Bryson, Wells Fargo Chief Economist, and David Kelly, JPMorgan Asset Management Chief Global Strategist, break down October's US CPI report that shows a steady easing in inflation. Liz Suzuki, Bank of America Securities Analyst, says consumers are relying on excess savings amid the discomfort of higher rates. Greg Valliere, AGF Investments Chief US Policy Strategist, expects Congress to pass a government funding bill and avert a shutdown. Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance Full transcript:I'm Tom Keene, along with Jonathan Farrow and Lisa Abramowitz. Join us each day for insight from the best and economics, geopolitics, finance, and investment. Subscribe to Bloomberg Surveillance on demand on Apple, Well, Spotify and anywhere you get your podcasts, and always on Bloomberg dot com, the Bloomberg Terminal and the Bloomberg Business App. Is the Fed Done? Is this basically what we're looking at right now? The all clear sign for the Federal Reserve to have to do more. Jay Brison, Chief Economist, it W Wells Fargo joining US. Now I ask that to you, Jay, does this sound the all clear for the FED? It does for right now, Lisa. I mean, you know, these numbers are going to bounce around on a month by month basis. You know, I wouldn't. Our view is that the FED probably is done. But I don't expect FED officials to be coming out just because of this one report saying oh it's all clear, everything's great out there. I mean, I think they're still going to continue to be biased to potentially tightening. We don't think that will happen, but you know, in the next few months, these numbers kind of reverse and they kind of pop up, and the economy expands at a stronger unexpected rate, you could potentially see them going But again, I think that's a that's a high bar at this point. This adds to signs that there is some sort of cool and this is the reason why so many people are talking about a soft landings. You haven't seen the real cracks you'd expect ahead of a massive recession. Jay, do you think that is an accurate categorization of exactly what we're seeing with prices not going up as much as people had expected. Yeah, I think that's right, you know. I mean, if we were still clipping along at a year over year rate on the core of a five percent, we'd be talking about the Fed hiking even more. And when you start to hike even more, that's when you have the problems. So, you know, so the potential for a soft landing is still there. I guess what I'm a little bit still watching and concerned about is that the real FED funds, right, you know, the nominal rate minus some sort of inflation rate continues to drift higher, and that's what matters for the real economy. And so I think the Fed is going to delay easing at this point, and so we may or may not have a downturn early next year, but I think the next few quarters because monetary policy is going to remain restrictive. I think you're looking at headwinds on xanomic growth. Is it mission accomplished? There's a comedy to that, a painful comedy for our geopolitics, our history, Doctor Bryson. What are we getting to a transitory point where this Federal Reserve can say mission accomplished? Well, again, Tom, I don't think they're going to come out and say that right at this point. But you know what I would say is the bar for further rate hikes is getting higher and higher at this point. Many of the members on the FOMC think they have done enough at this point, and you know, today's rally and the tenure notwithstanding, you know, we still have seen you know, relatively high long term rates and so there's a fair amount of headwinds on the economy right now. Again, they're not going to come out and say mission accomplished right now. They need to see a few more months of this before I think they feel confident in that this is certainly a good start in that journey. But I still think, you see, you need to see a few more months of point two's before they say accomplished. Lisa, the mission accomplished December twelfth a CPI report before a December thirteenth FED meeting, and or just to really echo what Jay was talking about that the bar is getting higher and higher for them to go again, evidently the bar is getting a bit lower for them to cut rates. FED dated swaps are now pricing in the first twenty five basis point cut for June versus July. Before we got this print, Jay, there is this issue of what we're going back to. Are we seeing a fast enough pace of disinflation to believe that two percent is very much in the horizon. You and your team have been excellent about the last mile of getting inflation down from three percent to two percent? How far along that process are we? So, you know, I don't have the numbers here in front of me, Lisa, but you know, I think if you look at the three month annualized change in the core, we're probably at three and a half percent right now.

Thomas Kennedy, JP Morgan Private Bank Chief Investment Strategist, expects a growth slowdown in the US amid a decline in excess savings. Christian Scherer, Airbus Chief Commercial Officer, says the company is in an undersupplied situation coming out of the pandemic with high numbers of aircraft orders. Claudia Sahm, Sahm Consulting Founder, says the US is now closer to a recession than earlier this year. Toto Wolff, Mercedes AMG Petronas CEO, previews this weekend's first-ever Las Vegas Grand Prix. Jon Lieber, Eurasia Group United States Managing Director, says that both political parties are aligned on avoiding a government shutdown. Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance Full transcript: This is the Bloomberg Surveillance Podcast. I'm Tom Keene, along with Jonathan Farrow and Lisa Abramowitz. Join us each day for insight from the best and economics, geopolitics, finance and investment. Subscribe to Bloomberg Surveillance on demand on a Spotify and anywhere you get your podcasts, and always on Bloomberg dot Com, the Bloomberg Terminal, and the Bloomberg Business App. What we do here is we have smart guests like Will Kennedy, just joining us at Queen Victoria Street in London on oil and now joining us his compatriot in Irish crime. Thomas Kennedy joins his chief investment strategist at JP Morgan. One Kennedy to another, and you linked it when you sat down and you looked at Will Kennedy's world and says, when the price of oil moves, you see in chases, charge card juggernaut reaction, what do you observes oil comes down? Yeah, we saw change in the way the consumer was reacting to higher oil prices around August September area in our Chase credit card day. To remember, we're banking about twenty percent of America, and what we saw there was a nice plug nailed deck when gasoline prices rose. You actually saw a discretionary spending go down. Now, Tommy might be saying, well, of course you're going to see that. Right, prior to August and September, in the post COVID era, we did not see that relationship. It suggests the excess savings in America might actually be depleting after how many quarters of negotiating on it, right, and then when we really dig into the accounts of these folks, and we do it in anymous anonymous fashion, about half of America looks like they're out of excess. If you're missing words up, it's okay. You're sitting on the side of the table where we do that routinely. You know, I'm looking Time Kennedy at the polarity between Morgan Stanley and Golden Sachs today. You need the leadership or Bruce chast and Michael Faroli to give you an economic backdrop. What's your economic backdrop that forms your outlook call this year? Yeah, we're expecting a growth slow down pretty much like the less rest of Wall Street at this point, and it is relatively simple and intuitive. You have the cost of capital above expected revenue in this economy, and if you think about America as one big business, it's very odd to see the cost of capital to be above expected GDP. It should force investors to say, maybe I'll just save instead of borrow money and invest in my business. We've seen this four or five times in the last forty years, just about every time you see a growth slowdown, tom So we should expect that to happen. The question becomes what's the scenarios where it doesn't happen? And in those scenarios you have one where either the consumer is much more resilient and they have access to borrowing, and you're going to see growth come higher or something breaks in the meantime. Those are pretty dynamic and polarizing outcomes in the future. Everything you set up until then, though said, by the ten year go along the curve. Look in some of this yield. Is that right? Yeah? I think it has to be. John. You have at this point a municipal bond that is giving you equity like yields, and for the first time in twenty years, it is actually competing with the earning yield on the s and P five hundred. For my clients that are gathering wealth for generations, I can show them something that has near zero default risk and you can get equity like yields. Is their risk to that, of course there is, But that's a dynamic that they haven't seen in two decades. And now I can start to reposition some of their portfolio and they say, Thomas, I'm nervous. I'm seeing yields all over the place. Are they reluctant to buy even at these rates? Even after you tell that story, it's a reluctant still to buy it. In our data for the last twelve months, this has been the trade that people have been excited about and can get invested in. That doesn't mean it's not without angst. When we saw a five year tax free yields show up two weeks ago, that dynamic changed five percent tax free for people in New York City, where we're sitting. Guys got to buy a taxable bond above ten percent to get an equal return, So the behavioral experience for them did

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Kathy Jones, Charles Schwab Chief Fixed Income Strategist, says the markets need conviction that the Fed is done hiking rates. Annmarie Hordern, Bloomberg Editorial Chief Washington Correspondent, breaks down new election polling from Bloomberg/Morning Consult. Christian Horner, Oracle Red Bull Racing Team Principal & CEO, talks Oracle Red Bull Racing's dominance and previews the Las Vegas Grand Prix. Troy Gayeski, FS Investments Chief Market Strategist, remains in the higher-for-longer camp despite the resilience of the US economy. Doug Kass, Seabreeze Partners President, details his market view and why he says, ‘it’s not whether I should be short, it’s how short I should be.’Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance See omnystudio.com/listener for privacy information.

Julian Emanuel, Evercore ISI Chief Equity & Quantitative Strategist, expects consolidation in the streaming industry in the coming years. Greg Valliere, AGF Investments Chief US Policy Strategist, discusses the third Republican primary debate. Cameron Dawson, Newedge Wealth Chief Investment Officer, says it's too early to know if the uplift in unemployment will barrel higher into next year. Geetha Ranganathan, Bloomberg Intelligence US Media Analyst, breaks down Disney's better-than-expected 4Q earnings. Ellen Wald, Atlantic Council Senior Fellow, discusses the global oil market as crude prices remain low.Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance Full transcript: I'm Tom Keene, along with Jonathan Farrow and Lisa Abramowitz. Join us each day for insight from the best and economics, geopolitics, finance and investment. Subscribe to Bloomberg Surveillance on demand on app, Spotify and anywhere you get your podcasts, and always on Bloomberg dot Com, the Bloomberg Terminal, and the Bloomberg Business App. Jitting a manuel jointed to surround a table Chief Equity just over at evercor SI jitting Good mornings here, Good morning. Have you been participating in this wonderful, beautiful thing that is an eight day winning streak. Yeah, we have, you know, several weeks ago we just felt that when you backed off of that five percent yield, And I know we've been talking about it, but it is the fact that in this world now for the last year and a half, where stocks and bonds have been positive correlated, if bond yields go down, stocks go up, and backing off of five percent was huge for the psychology. And now we've got this unexpected oil price plunge, which is even bigger for Cheryl, I'm with you. Those two points yesterday stood out for me. Break a four to fifty on a ten year break of eighty on Brent crude. At what point do these correlations start to break the other way? What brings up hot that change? Well, we are watching that very closely. And guess what, the high frequency data is really important because that chart you were talking about a few moments ago, with the unemployment rate rising from three to four to three nine in the past, when that starts to happen, it tends to snowball. But where we're going to get the initial read on that is that eight thirty jobless claims number starts edging over two hundred and fifty thousand, we get a little bit cautious. Three hundred thousand is where we know the economy is going to turn down. I'm supposed to fold in now A question on Ed Hyman's Hicksy and Islm theory and his disinflation theory into your stock babble, forget about it. I love the single sentence you have which pushes against all that malarkey by saying price is paramount. Right now, when you talk to Ed Hyman, how does a respond to you telling them your economics doesn't matter, price is paramount. I'll tell you how five weeks ago Ed Heyman started putting out in almost daily the act that gasoline lean prices started falling as the conflict was erupting. You already had the turn in gasoline prices completely, you know, devoid of real sort of prosperity with Hymen's disinflationary tendency or outright deflation in China. Look, if you look at the last fifteen years, you've had episodic times of that from again. Obviously the financial crisis is one of those times. But ultimately what it comes back to again for equity investors, for bond investors. First of all, the whole idea of getting a real return on money in this world now is actually a positive for financial assets. It's a positive for capital allocation, and long term, it's a positive for growth. And that's you know, that's part of the equity investing mindset. Do you need a long term view right now or do you just trade the short term. It's really difficult to have a long term view because of what we're talking about the inflection in the economy potentially happening. But if you take the super long term view, is that even if you get the recession that Ed's thinking we're going to get, that it's going to be mild in twenty twenty four. What you're left with is a labor market that has rebalanced. What you're left with is again a real cost of money, better capital allocation, and frankly, we've talked about this before, you have new technological developments like generative AI that is going to improve the productivity of corporate America over the long term. One of the main frustrations of this year was that pretty much everything everyone said at the beginning of the year has proven to be wrong, including that this would be the year that tech stocks would fade more meaningfully and you start to see a broadening out in the rally. Energy stocks would start to be the true leaders. You just actually moved away from an overweight and energy and are talking more about generative AI. It seems like the theme just keeps on being that the leaders will keep leading.

Peter Tchir, Academy Securities Head of Macro Strategy, points to potential issues in the global supply chain amid ongoing geopolitical conflicts. Libby Cantrill, PIMCO Managing Director of Public Policy, says the margin of error for House Republicans to avoid a government shutdown has narrowed. Dan Ives, Wedbush Sr. Equity Research Analyst, predicts that Apple could look to buy ESPN. Alexander Goldfarb, Piper Sandler Senior Research Analyst, says the commercial real estate market is in the midst of a rare phenomenon.Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance Full Transcript: This is the Bloomberg Surveillance Podcast. I'm Tom Keene, along with Jonathan Farrow and Lisa Abramowitz. Join us each day for insight from the best and economics, geopolitics, finance and investment. Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and anywhere you get your podcasts, and always on Bloomberg dot Com, the Bloomberg Terminal, and the Bloomberg Business app. Our guest of the Morning to synthesize all this with our question. Peter Cheers joins us. Now ahead of macro strategy at Academy Securities, you look for price up, yield down. What will that do to the equity market. I think for now it's going to be good. I think we see four thirty on tens before before we see four to seventy five. I think the pain trade is actually to lower yields. A lot of people who are bullished at five kind of got short again. I think that works until we get down about four thirty five. Equities rally on the back of that. Then we realize we're getting here because things like oil copper receding because the economy is actually slowing fast so I think at that point that's when the recession fear start getting priced back into stock. Taking Academy Securities three year view, you've got that slowing global demand. Nick bennenbrook On from Wells Fargo stunning with a two point four percent global GDP call. Can you own equities out with a three year vision? I think you could if you had a three year vision. I think right now it's more like a two to three week vision. Everything's so volatile. We don't know where this economy is turning. We don't know what's going on there. And one thing that's starting to scare me is we're having a lot of discussions about the Middle East. We're starting to hear a little bit more concerns about supply chains. I don't think it's an issue today, but if as this drags on, if there's any degree of escalation, supply chains become an issue again. So I think that will be a big drag on the economy. The Middle East crude last month is just unreal. To see a move of almost eleven percent lower on WTI, even with the heightened tension in the Middle least, A lot of people appointing to maybe demand starting to crack in a certain places around the world, Europe one, maybe even the United States gone into next year. What's your view on that. Yeah, I think the last time I was here, I said buying oil was not going to be a good hedge for escalation there because oil had been under so much pressure before, and I think that's what we're seeing again. There's just that lack of demand and the Saudis definitely have the ability to turn on the tap if they want. We're clearly trying to figure out how to work with Venezuela, and so far it looks like Aram's going to continue to pump oil despite the sanctions, despite the height intensions there. So there's not much in favor of oil right now, and I think that's a very crowded long position, so I could see that breaking lower coming into next year. You mentioned a two to three week view. I'm with you. You You know what's about to happen. Then in the next two to three weeks, we're going to get a load of people publishing their outlooks for twenty twenty four. Can you help us understand how you get any visibility whatsoever into next year? What's the strategic view going into you know, I think there's still some big themes. I think AI, how people are using AI, the efficiency that that could cause for companies. I think that's going to be a big theme still. So you can look over that. Where are we going to be on the defense spending? Where are we going to be in terms of geopolitical spending. I think the reshoring is still real. I think a reasonably healthy economy with their decent jobs is still the overriding thing. So I think markets are a little bit more volatile, volatile right now than the underlying economy is. So if you put this together to what you said earlier, that you see benchmark ten year yields getting down to four point three five percent before going back up to four point seventy five percent, or just basically they're heading lower. Does that mean that we're going to have slower growth but still the soft landing and that it basically people are going to get a little concerned about stocks, but that it sets up a rally. And I'm just trying to understand. No, I think a very c

Minneapolis Fed President Neel Kashkari says policymakers have yet to win the fight against inflation, and that they will consider more tightening if needed. Neil Dutta, Renaissance Macro Research US Economic Research Head, says a rebalanced labor market could led to a rate cut. Katy Kaminski, AlphaSimplex Chief Research Strategist, expects more potential buying for treasuries in the short-term. Mohamed Younis, Gallup Editor-In-Chief, previews the off-year elections happening across several US states. Nadia Martin Wiggen, Svelland Capital Director, discusses the global oil market as prices fall to over two-month lows. Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance Full transcript: This is the Bloomberg Surveillance Podcast. I'm Lisa A. Bromoids, along with Tom Keen and Jonathan Ferrow, join us each day for insight from the best in economics, geopolitics, finance and investment. Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and anywhere you get your podcasts, and always on Bloomberg dot Com, the Bloomberg Terminal, and the Bloomberg Business app. This morning, Mike McKay Drumrow, fantastic guests the random type with us to talk about Fed policy. Yes, and thank you very much, John, because we are pleased to welcome Neil Kashkari, the President of the Federal Reserve Bank of Minneapolis, to the table today. Thank you for coming in making the trip all the way to New York only for us. I'm sure nothing else There would be nothing else this morning, and except for Bloomberg Surveillance. You're kind of known as the guy who is the most hawkish. I don't want to characterize you exactly now, given how things have changed over the last couple of months, but you have left open the possibility of doing more. How much more would you think the economy might need? Are we talking about just that one leftover move from the dot plot in September, or if you have to start raising again, do you have to go farther. Probably. Well, first of all, it's great to see you, Thanks for having me. People are looking for certainty, and I wish I could give that certainty provided there's been so much, so much it's unusual about the reopening of the economy and the dynamics that led to the high inflation, and how long it has taken, and the dynamics as the disinflation process has taken hold. I wish I knew. We have to let the inflation data guide US, the labor market data guide US, just to point out the obvious. Our forecasts have not been great over the past couple of years, and so we just need to We're all committed. Everybody on the FORMC has committed that two percent is our inflation target. We have to get inflation back down to two percent over a reasonable period of time. Ultimately, the economy will tell us how much is needed to get there, And I just don't know. Well, at what point do you think you would believe you have tightened enough or not tightened enough? What is it that you're looking for. Well, I'll give you some good news is that core PC on a three month basis is running about two point five percent, and it's lower than the six month data. It's lower than the one year data. So that suggests that the disinflation is real. If we continue to see inflation numbers of that range two point five percent or lower on a go forward basis, that would tell me, Okay, we are now on a path back to two percent inflation. But three months data is still only three months data, and if we see that start to tick back up again, that would tell me our job is not yet done. Tick back up means what? In other words, we get another couple of CPI reports in a PCE report before your next meeting, a couple of tents higher. The chairman and others say it's going to be lumpy or does it have to be a significant move? In other words, what are you thinking about for December? Well, I think we could look at, as the chairman always says, we look at all of the data. So what surprises Over the past few months, We've been surprised by how strong American consumers have been. Consumer spending is held up remarkably well, we've been surprised by GDP growth. When activity continues to run this hot, that makes me question is policy as tight as we assume that it currently is. So if you saw inflation tick back up and you saw continued very strong economic activity on the real side of the economy, that would tell me, okay, we might need to do more. So it's hard for me to say this one data point needs to be here. I would be looking at the suite of data. Did we outsource doing more to financial markets? In the arts week? Have we outsourced doing more to financial markets? You know, this is a very complicated question on what has been driving the long end of the Yeld curve. Some people point to term premium, and I always joke the term premium is the economist version of dark matter. It's the residual of all the stuff we can't explain. It's not that our models are wro

Mandy Xu, CBOE Global Markets VP & Head of Derivatives Market Intelligence, advises monitoring multiple asset classes going into the year-end. Michael O'Leary, CEO of Ryanair, says the airline remains committed to Boeing despite delays in aircraft deliveries. Amanda Lynam, BlackRock Head of Macro Credit Research, says there's an increased focus on selectively from credit investors. Julie Norman, UCL Centre on US Politics Co-Director, discusses the Israel-Hamas war and Antony Blinken's visits to several leaders in the Middle East. Ashley Allen, Franklin Templeton Corporate Credit Research Analyst, discusses resilient consumer spending. Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance Full transcript: This is the Bloomberg Surveillance Podcast. I'm Lisa Abramoids along with Tom Keen and Jonathan Ferrell. Join us each day for insight from the best in economics, geopolitics, finance and investment. Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and anywhere you get your podcasts, and always on Bloomberg dot Com, the Bloomberg Terminal, and the Bloomberg Business App. I'm DeLine of joined us now at a macro credit research at black Line I and I don't worry. We're not going to be talking about that. I do want to talk about supply if we can start there. We've got forty eight billion dollars a three year notes this week, We've got forty billion dollars a ten year notes. We've got some thirty year bonds twenty four billion dollars worth. These are big, big numbers. That's treasury supply. What's happening with credit supply going into year rent, Good morning, Thank you both for having me so. As you know, credit supply had a bit of a flurry of activity in September. It calmed down in October. I do think with this tentative stability in the treasury market that corporates, CFOs and treasures may look to move ahead before the year end seasonal slow down. It will be an important test for the market how this treasury supply is digested. But as we know, the Treasury Secretary guided us towards the front end of the curve and not so much in duration in the refunding announcement last week. But I actually think, if nothing else, the past several months have shown corporates that this can be very episodic in terms of these windows opening, and so given that we know the maturity walls are coming up, I think for corporates it's better to issue early rather than late. We're expecting a big week in the IG market this week. I think expectations are a little lower in high yield, but I would not be surprised if we surprise to the upside in terms of those expectations, because I think it's just prudent for CFOs, which speaks to kind of the opportunism that one Sidi get desk told me about last week. He messaged me as soon as we saw this rally and he said, everyone's trying to come to market. I've gotten fifteen phone calls. Everyone's basically lined up. Is this going to be bad? With credit spreads widening in the sort of counterintuitive way because we've got more supply, I think the appetite is there, and I think we've had such light supply, especially in high yield year to date, and twenty two was a record a low level that I think the appetite for the market is there. I think where the real risk is is it that lowest quality cohort of the triple C market, that kind of lowest quality rung of high yield which are triple C issuers. There. I think we've seen some enhanced pressure where it's weak results coupled with refinancing needs have really pressured those capital structures. And even on this swift rally in high yield spreads that we've seen over the past few trading sessions, triple c's have rallied, but they've lagged on the way in. And I think it's the market telling you that there's an appetite for certain quality cohort in the credit market. Ig I think is there in most market conditions. Hig yield is a bit more tentative, but for that lowest quality rung, I think it's very case case specific and vary idiosyncratic. Are people kind of just pricing in perfection here? Well? With high old spreads below four hundred, it's hard to argue you that there's much risk premium added into the market at the moment. I think what we're seeing is a lot more focus on selectivity from our credit investors, so thinking about asset allocation between high yield and leverage loans, sector selection, issuer selection. I think where we're high old spreads are at the moment, the path of least resistance is probably a little bit wider in terms of choppiness, with some of the headline risk ahead of us. But again, as we've talked about before, where yields are, it's really difficult to see kind of highield spreads breaking out in this range of much wider from here, because when you every time, we tried to reach four forty last week and we kind of snapped back in, and so there is a bit of a tug of war between fundamentals and technicals, and ev

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Randy Kroszner, University of Chicago Booth School Professor of Economics, and Jeff Rosenberg, BlackRock Portfolio Manager of the Systematic Multi-Strategy Fund, discuss the softer-than-expected October US jobs report. Gene Munster, Deepwater Asset Management Managing Partner and Anurag Rana, Bloomberg Technology Senior Analyst, recap Apple's sluggish 3Q earnings report. Terry Haines, Pangaea Policy Founder, discusses the rift in Washington over government spending and aid to Israel.Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance FULL TRANSCRIPT: This is the Bloomberg Surveillance Podcast. I'm Tom Keane, along with Jonathan Farrow and Lisa Abramowitz. Join us each day for insight from the best and economics, geopolitics, finance and investment. Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and anywhere you get your podcasts, and always on Bloomberg dot Com, the Bloomberg Terminal, and the Bloomberg Business App. What you need on Jobs Day more Newtonian calculus. We'll do that with Randall Krosner of the Bus School, Chicago, of course, the former Fed governor, one of our great and giant financial economists in America. What's the second derivative of the jobs market look like? Randy? When it moves? Does it move? Ah? And that's the key question exactly what you were talking about. What does this pretend for the trajectory going forward? Certainly we're seeing a slowing pace over the last few months downward revisions. And then the question is will this be nice and smooth or will this pretend something that is going to be As at LISTA mentioned before, nonlinear, very difficult to predict any nonlinear moves and things. But I do think it's consistent with a somewhat softening labor market. I think the FED will certainly be heartened by the wage growth coming down a bit over time. I think this takes the wind of the sales of those who wanted to go further. I think it makes it much more likely that we will just hold where we are for a while. But so far, there's nothing in this to suggest that the FED is going to be eager to cut or be even talking about cutting anytime soon. Do you think, Randy is some people are pointing to manufacturing as a point of weakness, that that is a leading indicator in the way it has been in previous times, just because of how many people were hired during the peak of the pandemic. It is certainly one area that there was a lot of bounce back, because of course people want to things, but now people want services, and so the services part is still extremely important. I wouldn't put too much emphasis on any one particular sector. I think you have to look over overall, and as Mike had said, you know, we're seeing a little bit of slow down broadly, but not enormous amount of slow down. But I do think that is consistent with in somestance where the FED wants to go. They want to see the uneployment rate go up a little bit, not too much. They want to see wage growth come down a little bit, but not too much. And I think it's just going to be tougher to be hiring people going forward. Until just a few months ago, real wages were not growing, they were actually negative. Real wage growth was negative. Now real wage growth is positive, so it gives less of an incentive for firms to hire. Real interest rates are now positive. They had been negative for a very long time. That combination is probably going to lead firms to be less eager to hire, less eager to invest, and I think that's going to be leading to what I think is potentially a hard ish but not hard landing. This is an important jobs report. This November report of the October data just absolutely extraordinary. Randy Krasner, thank you so much, Professor Krasner with the Boost School the University of Chicago. If you're not part of the global Wall Street gang, you've got to understand it's hard to look at the Bloomberg screen and frame it out from where we were two weeks ago, which gets us to canes and when the facts change, I change. Jeffrey Rosenberg studied as Maynard Keynes at Carnegie Mellon. He's a black Rock portfolio manager systematic multi strategy fund for all of us. Jeff Rosenberg, are the facts changing? Great question, Tom. You know, the narrative is changing and the facts are driving that. And so Lisa asked the kind of the key question, You know, how do you rally in front of a slowing labor picture? And that's because it's where we are. Equity markets were weaker while the economy was strengthening, and that was really about the rise in the denominator, in the discount rate and the interest rates. So as you ease off the pressure in terms of the interest rates, there's a little window here where the narrative changes and there's relief because the discount raid is expected to be a bit lower, and you see it in the bond market. But that's about horizon and so the near term horizon narrative will shift, but the longer ter

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Sree Kochugovindan, abrdn Senior Research Economist, breaks down the Bank of England's decision to keep rates unchanged. Greg Valliere, AGF Investments Chief US Policy Strategist, discusses the Israel-Hamas war and its political impact in Washington. Jonathan Pingle, UBS Chief US Economist, says a slowdown in the US labor market would lead to a slowing in inflation. Geetha Rananathan, Bloomberg Intelligence US Media Analyst, discusses Disney's plan to buy Comcast's stake in Hulu. Pierre Ferragu, New Street Research Head of Global Technology Infrastructure, previews Apple's earnings release.Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance Full transcript:This is the Bloomberg Surveillance Podcast. I'm Tom Keene, along with Jonathan Farrow and Lisa Abramowitz. Join us each day for insight from the best and economics, geopolitics, finance and investment. Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and anywhere you get your podcasts, and always on Bloomberg dot Com, the Bloomberg Terminal and the Bloomberg Business App. What a joy to see her in London. Sree Kachigovin and joins us right now, senior research economists at Aberdeen three. I'm absolutely fascinated by how the US stands alone, how Jerome Powell yesterday stood alone with massive stimulus leading into massive real GDP. Does the United Kingdom, where Governor Bailey stands now, do they need stimulus to keep it going? I think stimulus would probably not be a good idea at this point. Really, what we want to tackle is inflation. Now. The Bank of England have a very challenging backdrop. Growth outlook is weakening, but we still have very elevated inflation pressures. Now inflation is past the peak, it has started to decelerate. However, energy costs are still quite elevated. The headline inflation is still very high. And also we have even though those multi price based effects will start to unwind over time, we still have very sticky core services and wage pressures in place. So stimulus right now would not be a good idea for the UK. Now it's not restrictive fiscal background at the moment, but further stimulus would actually not be helpful with the Here's a fun fact from the Bloomberg News story that Lucy White wrote for US. Ben Bernanke actually attended the Bank of England's meeting as an observer. It's part of his review into the UK central banks forecasting communications. And of course this comes as Bailey has faced some criticism that they didn't move quickly enough to respond to inflation. Sree, can you compare and contrast the efficacy of communication at the BAIE versus the FED. I think, as we mentioned earlier, there was a conversation about group think. There is a split within the within the Bank of England, and I think the communication has been quite clear from the various members. We've had the arguments for staying on hold, the arguments for perhaps another an additional hike, and all of those are quite consistent actually with the data that we're seeing. But it seems that on the whole we are witnessing switch towards a focus on growth and the weaker activity data and some greater faith in terms of inflation actually passed the peak and decelerating from here. So we're also seeing there. So we have a signal from the split in the vote, and we also have that signal well, very very clear in terms of rates are going to be on hold for a meaningful period of time, even if, as we expect, the economy enters a recession, rates are going to remain quite elevated. And that's quite a burden for small companies in particular who are much more sensitive to the rate cycle. They are facing a profit squeeze. There is a bit of an issue there in terms of future business investment and so there are a number of challenges there, particularly for the smaller, smaller firms. So that's something that the Bank of England are going to have to really be wary of. Yeah, credit availability for small firm is always an issue, whether it's stateside or across the pond street. When it comes to the stimulus versus austerity debate, that time was referencing how does the Bank of England's decision to keep rates on hold for a second straight meeting and warn about a possible recession, warn about the need to perhaps raise rates in the future of inflation reaccelerates. How does that restrain or limit the government's options when it comes to supporting the economy. I think the government is also very aware, and we have heard from Sunak p at the Prime Minister. We have heard that there is a focus on inflation even within the government. Yes, they do have an election coming up, but they're worried about stimulus too soon and too much stimulus too soon. So I think they're going to pair back on any measures that are going to fuel inflation. Further, I think that's also concerned from them, get every challenging decision for them, given that there is an election on the

Bloomberg's Tom Keene and Lisa Abramowicz discuss remarks from Fed Chair Jay Powell following the Federal Reserve's latest policy decision.See omnystudio.com/listener for privacy information.

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Seth Carpenter, Morgan Stanley Chief Global Economist, and Mark Cabana, Bank of America Head of US Rates Strategy, break down the US Treasury's refunding announcement. Dom Konstam, Mizuho Securities Head of Macro Strategy, previews the Federal Reserve's rate decision. Win Thin, Brown Brothers Harriman & Co. Global Head of Currency Strategy, expects Japanese yields to continue to rise after the BOJ's decision. Jennifer Flitton, Invesco Head of US Government Affairs, discusses the latest in Washington on US aid to Israel.Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance FULL TRANSCRIPT: This is the Bloomberg Surveillance Podcast. I'm Tom Keene, along with Jonathan Farrow and Lisa Abramowitz. Join us each day for insight from the best an economics, geopolitics, finance and investment. Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and anywhere you get your podcasts, and always on Bloomberg dot Com, the Bloomberg Terminal, and the Bloomberg Business app. Where this seth Carpenter at, the chief global economist at Morgan Stanley. Is this just about in our start? Are we all John Williams this morning and we're readjusting? I clared it with me last week at a Bloomberg event. At two point zero percent is not two point six percent? I mean, are we really talking, as Mike aludes tou there about a new inflation regime? I think you want to separate out a couple of things. One is the new inflation regime, and there if you're comparing it to where we were from the financial crisis through COVID to say, yes, right, the FED was consistently missing it's inflation target to the downside. I call it a quarter percentage point. We're above, clearly above target now and over the next several years they want to bring it down, but I'm not sure they want to go back to the old days of you know, being below two percent on a regular basis. So if they're going to be averaging a little higher during expansions, call it a tenth or two above. You know, you're talking about twenty five to fifty basis points high inflation, so that's got to be there. I don't think we're talking about the difference between two percent inflation and three percent of I want to tell you on radio on television where we're heading here, what half are we have. We have Dark Carpenter with this on the broader economics of this moment. Ira Jersey schedule to join us just exquisite here on fixed income dynamics, and then we do even better. Mark Cabana is going to darken the door. Who's just expert on your world about you know, the different tranches of the auctions. I want to dig into what the implications are of this announcement sas and to me, I'm looking at the idea that they're really going to force the front end to a lot of the heavy lifting here. Does that pose a greater risk than people realize. So my view is no, the way I would think about it. There was a speculation that back and forth a little bit earlier, did the Treasury just react to the market. And I think you want to remember that the folks there at Treasury, Josh Frost, the assistant secretary, the career staff in debt management, they have a structure now, they have a framework for how to think about what to issue, and they're looking at what is the market saying about where the market wants to pay up and where the market's demanding a discount, and at the margin, they'll lean a little bit more to where the market wants the paper and lean a little bit away from the place where the market's pulling back. And we've seen over the past several months a big sell off in the long end. It showed up, you know, in models speak and the term premium, and they're paying attention to that. It's not that one week to the next, or one month to the next, or even one quar to the next, is it sustained. What we are seeing is very much a strong move on the long end in that thirty year yield plunging back below five percent. As we were talking about do you think I think that this indicates that really what we're seeing in yields is entirely a supply driven story more than anything in terms of an economic read on strength and inflation in the US. So no, it's so hard depending on any single thing. When I talk to our clients here in New York, in London, around the world who are trading in treasuries, there are a whole set of different narratives, one of which has been supplied. People have been worrying about the deficit, which is exactly why Secretary Yellen came out and said it's not the deficit. People are worrying about stronger growth. Q three GDP data was very strong, There's no two ways about it, and so that contributed to it. Other people are worrying about is there going to be a pullback from risk by global investors. Other people are looking at the back of Japan. We just had that meeting right where they effectively de facto got rid of yield crop control. So it's not just one single thing, it's everything c

Mark McCormick, TD Bank Global Head of FX & EM Strategy, analyzes the Bank of Japan's decision to loosen its grip on government bond yields. John Stoltzfus, Oppenheimer Asset Management Chief Investment Strategist, says the Fed's sensitivity has enabled the resilience of the US consumer. Aaron David Miller, Carnegie Endowment for International Peace Senior Fellow, discusses the latest in the Israel-Hamas war. Stephen Stanley, Santander Chief US Economist, says the Fed has overstated the importance of the recent surge in US treasury yields. Emily Roland, John Hancock Investment Management Co-Chief Investment Strategist, says the US economy hasn't yet felt the sting of the Fed's recent rate hikes.Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance FULL TRANSCRIPT: This is the Bloomberg Surveillance Podcast. I'm Tom Keane, along with Jonathan Farrow and Lisa Abramowitz. Join us each day for insight from the best and economics, geopolitics, finance and investment. Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and anywhere you get your podcasts, and always on Bloomberg dot Com, the Bloomberg Terminal and the Bloomberg Business App. We are living it right now. A brief from Mark McCormick, Global Head of Foreign Exchange in EM Strategy TD Securities. Mark, and why don't you to explain to our audience why a super strong dollars from twenty twelve and a super week yen is disturbing? Well, I think of what it does is it just shows the massive divergence you have between central banks. I think one of the things that you can unpack is there are certain currencies that care about growth, there's certain currencies that care about commodities, there's certain currencies that care about different relative central bank functions. The thing that the end cares a lot about is the ten year point to look at euro. Euro cares about the two year point of the curve. More than say the ten year and if you take the combination of what we had, and this is one of the most important things going on effects is the relative terms of trade shift. Japan is also a massive importer of energy and other commodities. So you take the commodity story, you take the great differential story, and now you take the aggressive bear steepening of the US curves this summer, and you've got basically a trifective things that will weaken the end quite considerably unless the BOJ does something well to the trifecta. Let's go to Mondel of Columbia. I mentioned this with Vice Chairman Clara to the other day. He will join US folks for our special FED coverage. Look for that? Is that tomorrow? Yes, it's tomorrow. The FED meeting is too more might people have just briefed me and Mark I'm looking at that. I want to echo what I talked to Professor Clara about, which is something has to give here. When something gives, what is the instability our audiences should be worried about? Well, I think of the context of the end, what needs to give is the actual the currency itself. As you mentioned, there is a very interesting policy mix where fiscal policy is actually quite favorable in forms of in terms of growth, also inflation. You see the BOJ is expecting higher inflation to kind of be a bit more sticky, I think, than markets are looking for. And they've also basically said we don't have a cap anymore. It can go above one percent. So I think what they're trying to do is synchronize themselves a little bit, which which has been US yield rising, which would contain the weakness in the end, But this is not a policy mix that is coherent and it is no longer sustainable. So I think a big thing is what we're going to see is things are going to change. It will change abruptly, but I think the movement that we had overnight where they said there's no longer a one percent cap, is actually quite a significant change. But it will take time for this to work through the market. So again i'd say that the thing that needs to break is yields needs to be higher, yet needs to be stronger. It's just going to take more time because we also need to see a peak in the US yield story, which again is not even about the FED anymore. When we talk about the ten year yield. It's more about supply and demand for ten year bonds. This is a big mishmash. Do you have a sense of what the response mechanism from the Bank of Japan is, what the lines in the sand are, what they're sort of looking at. I mean, we were talking about some of the opacity that they put forward overnight. It's very tricky because I think obviously most central banks it's very common language. At this point, they care more about the currency movements. So the end has not been as volatile. So as you can see, we have not the report came out this morning like they did not intervene last month. So I think I don't think there's a red line per se. I think they're all kind of doing what everyone in the market's doing. They're very con

Lori Calvasina, RBC Capital Markets Head of US Equity Strategy, says confidence across all sectors in the equity market remains fragile. Andrew Sheets, Morgan Stanley Chief Cross Asset Strategist, says that fiscal support at the federal and state levels is reducing the odds of a recession. Elliot Ackerman, Former White House Fellow, US Marine Corps Veteran & Co-Author of 2034: A Novel of the Next World War, says the urban warfare environment in Gaza poses major challenges to both sides. Terry Haines, Pangaea Policy founder, expects Congress to pass spending bills on Ukraine, Israel, and the Southern border before the end of the year. Tiffany Wilding, PIMCO Economist, North America, says the Fed may opt for future rate hikes. Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance Full Transcript: This is the Bloomberg Surveillance Podcast. I'm Lisa Abramoids along with Tom Keane and Jonathan Ferrow, joining us each day for insight from the best in economics, geopolitics, finance and investment. Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and anywhere you get your podcasts, and always on Bloomberg dot Com, the Bloomberg Terminal and the Bloomberg Business app. Lori Kelvacina joining head of US Equity Strategy to RBC Capital Markets. Do you agree with that that when you look under the hood, you're seeing massive breakdowns that are reflective of a great deal of pain that people really gloss over. I think that's fair, Lisa. I mean, I think Jana hit the nail on the head when she talked about small caps making a new low. I always tell people about small caps, even if you can't buy them, they tell you a lot about what's going on in the broader market. And I think what's going on is that they're really taking the brunt of the pain as regards to the big increase in tenure yields that we've seen now. Of course, the tech stocks and the cap part of the market are getting knocked around by that as well. But small caps, it doesn't matter to how many charts I can show people suggesting that the balance sheets are not that bad. People simply don't want to hear it. And there's a view that small caps are simply not going to be able to weather the storm that's created by the surge and interest rates, whether it's ten year yields or fed funds. And again, I have so many charts, Lisa that I've been showing people for the last six months saying, hey, small caps have done a good job of shifting towards long term debt, the variable rates down, the weighted average maturities are really not that bad on average about four and a half years. People simply don't want to hear it, Lisa. There's just been a long adage that small caps don't weather higher interest rates very well, and I think that's one of the big reasons why they're getting punished right now. Laurie, can you talk about sector performance within the small caps sectors, because I do think that the sectors are telling an interesting tale in small caps that maybe we're not picking up in large cups. So if you think about you know, think about it. From evaluation perspective, I will say that most sectors in small cap look cheap relative to their low large cap counterparts. But where it gets really interesting is on some of the cyclical sectors. So it's not just small cap financials that are dragging down the rustle two thousand from evaluation perspective. Healthy sectors from a fundamental perspective, like industrials, also look pretty cheap relative to large cap. In the small cap space, consumer discretionary stocks really look kind of left for dead if you look at valuations there. They're deeply, deeply cheap, and they were actually really down around recession type flows last summer. So we're really seeing that pain very very widespread. And given we are in the midst of earning season, is there anything that you're getting out of earnings that maybe is not getting picked up by the markets, considering the markets are so captivatd like what's happening in these macro indicators, So I think people are really misunderstanding what's going on with inflation moderating and what that does to companies. One of the things that we've seen when we compare our numbers versus the street consensus and we actually, you know, we use the Bloomberg data to monitor the street consensus and it does a really good job of articulating how margin expansion is baked into a number of different sectors next year. Well, in my modeling, we actually don't have margin expansion. We kind of have margins going back to twenty twenty two type levels. And one of the reasons why is that we don't give margins a big benefit from sliding inflation. We simply haven't seen a justification to do that in our back test. And when you go through all the transcripts, what we're really noticing is that companies are picking up on this. So the pricing discussion has simply gotten much much swishier, and companies

Lara Rhame, FS Investments Chief US Economist, breaks down today's core PCE price index which showed that both inflation and consumer spending rose in September. Isaac Boltansky, BTIG Policy Research Director, predicts that the chaos in the House will lead to a shutdown later this year. Lisa Shalett, Morgan Stanley Chief Investment Officer of Wealth Management, says that we've entered within 50 basis points of a peak in rates. Poonam Goyal & Anurag Rana, Bloomberg Intelligence Senior Analysts, discuss a big week in Big Tech earnings. Chris Marinac, Janney Montgomery Scott Analyst, expects banks to set aside reserves to build confidence going into 2024. Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance FULL TRANSCRIPT: This is the Bloomberg Surveillance Podcast. I'm Lisa A. Bromoids, along with Tom Keen and Jonathan Ferrell. Join us each day for insight from the best in economics, geopolitics, finance and investment. Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and anywhere you get your podcasts, and always on Bloomberg dot Com, the Bloomberg Terminal and the Bloomberg Business App. We're waiting for the PC data. We're joined by Mike Nicky Aron the Deak. So we're waiting for the personal spending, the deflator. Mike, will it be disinflationary? Roll of the dice, that's the question. We're waiting for the numbers to come down on the Bloomberg Terminal. Well, I got about four seconds until that happens. But the ideas we may get a little more disinflation. Let's find out from the Bureau of Economic Analysis, and here come the numbers. And we'll start with the inflation numbers. They come in hotter than anticipated, up four tenths of a percent. I don't know month over a month basis. For the headline, the core comes in up a three tenths which is about what was expected, although there was some leaning towards maybe a little lower number year over year. Now we see the PCE headline number at three point four percent, that's down from three to five, and the core comes in at three seven, down from three to nine. Both of those expected. All the people who like to dive into all those numbers and figure out what actually changed will be with us in a few seconds. Personal income up three tenths. That's lower than the prior month of four tenths gain, but also lower than what was anticipated a four tenths gain. Spending up seven tenths, I mean not strong. On the back of that, on the back of that GDP and the connginut well, this number is in the GDP because this is a September number. It was the third month of the quarter, so he kind of sort of backed out the numbers and anticipated that this would be fairly strong. We were up four tenths the prior month. The question is now do we continue to see that spending happen, Because if incomes are falling behind and they have been the spending levels over the last couple of months, that would suggest that maybe there's a pullback ahead. Now I'm not the expert here. There's one more there is, indeed, La Rain chief economists out with us this morning. First take, I think that we continue to see inflation coming down, but it's still uncomfortably It's still unacceptably high from the point of view of the Fed, and I think the conversation as we go into next year continues to the options for the Fed continue to narrow because if inflation stays about where it is and it's going to take a long time for it to get closer to too, their room to maneuver should the economy slow at all, is going to be very narrow. And look by these numbers, it looks like the economy is just still incredibly strong. We know that from the GDP numbers that we already got, but I mean the spending has just by the households that has defied every expectation of it to slow, and it's accelerated so much in the third quarter. That's what's extraordinary. I think savings rate comes in a three point four percent. People have been watching that for some indication of whether or not they're going to run out of money in the American consumer. It's down from four percent and it's been a steady decline. But historically, before the pandemic, we used to say people spend what they make. They don't dip into savings the way people tend to think they do. And so if that's the case, then there's more of a case now for maybe a slow down. People don't have as much to dip into if they wanted to, but they're also not making as much as they were. Well, I had johnat Henry with me this morning from HSBC and she said, actually Americans are more likely to dip into their savings and spend, spend, spend right to the very end. But I want to bring you an idea from UBS, which is Paul Donovan, where he said, you know, when we go to write the history of twenty twenties, do not bet against the headonism of the US consumer. It's very rich. I love it. I mean, there's a there's a brilliant wine place in London called Hedonism Wines. Whole o

Jeremy Stretch, CIBC Head of G10 FX Strategy, breaks down the European Central Bank's decision to leave interest rates unchanged. Lindsey Piegza, Stifel Chief Economist, discusses the US economy's fast-paced growth in the last quarter. Ed Mills, Raymond James Washington Policy Analyst, says the US won't face a government shutdown in November after Congress elected a House Speaker. Mandeep Singh, Bloomberg Intelligence Sr. Technology Analyst, says AI will be a key focus for Big Tech going forward. Michael Nathanson, MoffettNathanson Sr. Research Analyst, says 2024 will be a year of consolidation in the streaming market.Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance Full Transcript: This is the Bloomberg Surveillance Podcast. I'm Tom Keene, along with Jonathan Farrow and Lisa Abramowitz. Join us each day for insight from the best and economics, geopolitics, finance and investment. Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and anywhere you get your podcasts, and always on Bloomberg dot Com, the Bloomberg Terminal, and the Bloomberg Business App. Jeremy Stretch of CIBC as he considers these headlines, not much movement in the market. I've got ero one oh five forty, Jeremy. A key question to me is simple, and that is the idea of what two percent means. These are different economies, different nations. Do you look at it as two point zero percent? Is the ECB Bundesbank hope two point two percent while the FEDS two percent is two point eight percent? Well, of course, the Eurozone is a difficult beast to manage, and I think President Leguard is very mindful of that because, as we've touched upon, there is a very different degree of performance and activity in a number of the different economies across the zone. Now, the Eurozone and ECB is aiming to get back inflation to that two percent target threshold over the medium term. I think it was notable that obviously inflation in September did fall a little fast and the ECB had been expecting. And as I say, I think the next meeting in December will prove to be particularly instructive as we get forecasts out to twenty twenty six for the first time, but also looking at those longer run inflation expectations and if those are back towards the two percent threshold in aggregate across the whole of the zone, and that of course is the difficulty. We will still get divergence in the individual nations, but as an aggregate measure, the ECB is going to be aiming to get back to that two percent target threshold over the course of the next two years. Jeremy, I'm going to go to a wonderful moment I had with the August and here from Leon Jean Claude Trichet, and he talked to me about transmission, the diffusement of an economy across borders. Europe doesn't have the transmission mechanisms of America, do they. Well, there is obviously one of the inadequacies of the Eurozone project is the you know, the difficulties on the fiscal side on a relative basis that the US obviously has because the US has the you know, the federal system, and we do get that disperse into federal funds across the fiscal dynamics. So we are in a situation where the plumbing, if you like, in terms of the Eurozone economy, in terms of monetary and fiscal policy is very diverse because of course fiscal dynamics, and that's still much more at the behest of national governments. But I think the other interesting dynamic to consider as we move into twenty twenty four is that the Eurozone is thinking about bringing back those fiscal thresholds that were put on or suspending during the COVID period, and that will be an interesting dynasm to add to the rinkle about fragmentation risk, and that of course is one of the big concerns that the ECB has to be mindfulwed even if prisident, Legard will try and downplay any concerns at this particular Poet, Jeremy Stretch, thank you so much. October thirty, Apple to announce new MacBook pros I should say Lindsay Piaggs is pleased with that because as she ran her Excel spreadsheet on the American economy at burn Up or MacBook a couple days ago, Doctor piags it joins us now from Stifel as well. How hard is it to put together an Excel spreadsheet with the mysteries of this American economy. Well, it's typically difficult, but it's become increasingly difficult with all of these ancillary factors that are coming in that are virtually impossible to model. We do have a lot of international factors that are impacting the market's expectations. We do have now unprecedented fiscal variables that we're trying to account for. But I think right now the market is very much discounting that third quarter number, focusing onstead on the latest central bank decisions the BOC the ECB as a proxy for what to expect from the Fed next week, suggesting that developed central banks around the world, despite still elevated inflation, are starting to pull back in anticipation of a slower

Mandeep Singh, Bloomberg Intelligence Senior Technology Analyst, breaks down a busy week of tech earnings starting with Microsoft and Alphabet. Marvin Loh, State Street Senior Global Macro Strategist, says the Fed will maintain its higher-for-longer policy for longer than many expect. Greg Valliere, AGF Investments Chief US Policy Strategist, believes President Biden has enough support in Congress to eventually pass an aid package for Israel and Ukraine. Steven Ricchiuto, Mizuho Securities Chief US Economist, says the Fed has shifted its priority from inflation to employment. Katy Kaminski, AlphaSimplex Chief Research Strategist, says we may not yet have seen the bottom of the long-end of the bond market.Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance See omnystudio.com/listener for privacy information.

Jenny Johnson, Franklin Templeton President & CEO, shares concerns about spiraling US debt and its impact on interest rates. Mandeep Singh of Bloomberg Intelligence discusses the latest in tech earnings. Cameron Dawson, Newedge Wealth Chief Investment Officer, says the Fed's higher-for-longer policy is starting to bite. Paul Jacobson, General Motors Chief Financial Officer, discusses GM's 3Q earnings and the company's outlook amid the UAW strike. Fatih Birol, International Energy Agency Executive Director, discusses the impacts of geopolitical conflicts on the global energy market. See omnystudio.com/listener for privacy information.