>> we are seeing evidence that the economy is slowing. >> the fed needs to be cautious. >> it has been impossible to project anything in this environment. >> the economy will slow. >> there is a good chance we will see a lot of volatility. announcer: this is "bloomberg surveillance" with tom keene, jonathan ferro and lisa abramowicz. >> good morning. this is "bloomberg surveillance." i am jonathan ferro. the s&p 500 slightly negative

over the last week. all about a rally. tom keene, 7-day winning streak on the s&p 500. eight days on the nasdaq. we are higher by 8.4%. tom: i noticed microsoft yesterday after a record high i believe. i was on sabbatical. microsoft with leadership on ai and tech. we have some great guests to talk about including dean curnutt. the bulls were lonely six weeks ago. the bulls were lonely. jonathan: i think it is fair to say the bulls are feeling confident. tom: john sophists was like a piñata about six weeks ago. jonathan: he has company, that's for sure. we have been lasting the same question. will the fed spoil the party

with chairman powell little bit later? lisa: we are tiptoeing around but we might have to do more. we heard that yesterday from a couple of members. they have not done enough and that was a clear takeaway yesterday when a fed official came out and we could do more. mark was like, i don't think so. chair powell had a chance to do that last week and he did not. tom: they are calling the bond market a moving earthquake. we have heard that a lot in the fed speak. lisa: all the things we don't understand with respect to term premium. when we talk about the stock market rally, we think about what actually happened. all that happened was a rally in the bond market. this is not a stock-driven story. no one seems to understand the move of the bond market and no one can get very much conviction. tom: summer earnings veracity to what is going on maybe on the revenue side and maybe nominal gdp will come down and revenues

will be lighter. let's remember that six weeks ago, eight weeks ago the street was extra gloomy. that is when you move. that is the persistency we have seen. jonathan: i disagree with you both just to get the show started. futures on the s&p totally unchanged. what a run it has been. the longest daily winning streaks in two years on the s&p 500. the yields are higher on the bond market by three basis points. lisa: we will get to that supply in just a second. we will hear from chair powell which will be basically a footnote because he is giving introductory marks at the research and statistics conference. he will be speaking alongside michael barr. the lineup of fed officials coming out every week to speak is getting longer and longer. we will be hearing from the fed

vice chair philip jefferson, patrick harker all ahead of this which is possibly the key event of the day at a time we don't understand what has been whip sawing 10-year treasury yield. the treasury is selling $40 billion of notes today. we did see people yesterday with a three year note. 10-year note's are different and this to me is a huge test. jonathan: this piece of bloomberg analysis, i strongly encourage you all to read. the estimated annualized interest payments has climbed past $1 trillion at the end of last month. that is doubled in something like 19 months. lisa: and you talk about why do people care. when will people wake up and start saying how much bonds is the government going to sell. it starts now.

tom: if she could do it, that would be great. she could be the white house press secretary. olivia purchased -- published yesterday a book on the linkage of all of this bladder with our fiscal policy. her policy is simple. it is so screwed up that we will extend the x-axis out. this was a decade solution. lisa: the other thing that will be expensive will be all the streaming networks you are buying and that has been a theme throughout the year. we have earnings from warner bros. before the bell. have amc after the bell with a real discussion around the taylor swift effect and how long that will last. tom: she is like the beatles in 1964. lisa: when we come absolutely crushed. tom: she has seven of the top 10 singles. lisa: disney is reporting too. jonathan: can we get to dean?

dean curnutt joins us now of macro risk advisors. let's talk about this rally. rent it, don't own it. what does that mean? dean: i guess taylor's equivalent in the stock market is the magnificent seven. a couple of things happened last week that are profound and i will run with something lisa said. the stock market rallied because the bond market rallied. there has been a reorder of the cause and effect. the history of duration as a stabilizer in a portfolio is that when the stock market gets into trouble and there is a nasty move lower in risk assets, the bond market rallies. the bond market is a recipient of a flight to safety. here's the bond market in some ways is the risk asset and the stock market is secondary. i think it is altogether dangerous. i am not inspired by the fiscal dynamics. you mentioned numbers like $1

trillion in interest expense and that is only going up from here. that is a risk but in the near term, the short-term we have a reprieve. we talk a lot about long and variable lags with respect to monetary policy. nobody knows what the impetus is for inflation going up and down but they are long and variable with regard to financial conditions. that channel is short and precise. all of these metrics that define financial conditions, they are going the same way. to give you an example, interest rates coming down last week. so did credit spreads. that is also atypical. those are in financial conditions. in some ways they are good for the stock market short-term. it is good for risk appetite. but it might complicate the fed's process for trying to rain in inflation to the extent that inflation is a function of asset prices. they are all very correlated in a lot of ways. tom: any reason for these break another way anytime soon? dean: they would have by now.

on the 5% 2-year note you can argue that duration will play that role of stabilizer. in a risk off you will see a rally in the bond market. i think that is going to return. ultimately we will see and this is what we ended our conversation last time with when i was on the program was 2-year note's is a great place to hide out. it felt good to be alongside stanley in that context. i think you have a lot of ways to win. you are getting paid to weight and you're getting paid a reasonable amount above inflation. ultimately the response mechanism for yields and i would put the back end in a little bit of a different category because of supply. and frankly fiscally responsible. something like the two to five year part of the curve, that is a nice place to hold some capital. tom: three standard deviations down to s&p 4000 100.

we are barely back to halfway in terms of the volatility. but within this we are doing it in quiet. the quiet that is out there, which you highlight in your research, is extraordinary. does that mean a short squeeze to come? dean: not really. i don't think the markets are super under positioned. i would say that implied volatility reflects that. typically when you have a big short base, you might have something that indicates that the market is susceptible to a big pop higher. you can look underneath the surface of the implied volatility in options and you can see that there is not this expectation of a large jump. jonathan, you started with rent versus own. in u.s. housing, renting is historically cheaper versus buying. we know affordability metrics in housing are awful just given

prices and rates and that combination. in markets the buy versus rent trade-off is also very favorable to the renter. i like to call the option buyer a renter. the renter does not pay for the plumbing problem. in markets there are a lot of potential hiccups that can come. set against a vix that is down at 14, i would also point to a nasdaq vix that is at 18. that is really low. you have in the nasdaq a 30% move in the stock market this year and a really cheap cost of renting the market out to year end set against pretty favorable seasonable's -- seasonals as well. i really like buying upside calls. lisa: you said earlier the bond market is the risk asset and this is highly unusual. does that mean that people are overly sanguine to the riskiness of stocks or that stocks have gotten underpriced because people are still confused by the stabilizer being so volatile? dean: we can look at the stock

market valuation metrics in different ways. versus earnings you are in the middle-of-the-road in terms of pe multiples. some might argue that there are multiple rate adjusted is too high -- the multiple rate adjusted is too high. ultimately earnings are solid and stable. as i step back and we go back to this term long end variable, i don't think we have seen the impacts of race just yet. i think 2024 may be to 2025. the quiet in the market is a reflection of stability in the multiple and stability in profits. ultimately i think that gets dented but it is a ways away. lisa: we will have to start worrying about a government shutdown again in a couple of days and i am sure we will hear more especially after the republican primary debate later today. how do politics figure in to what you are seeing in terms of volatility? dean: shutdowns are not debt

ceiling certain. the shutdown is another indication of the fiscal issues on the left and the right and the inability to govern in a lot of ways. it was a function of not just the debt dynamics but also just the ability to work proactively and effectively on behalf of the country. i think it is just going to be another notch in this inability to work together set against just awful fiscal dynamics that are not going away. tom: really thoughtful stuff. this was great. i will go home and listen to it. the really important stuff on the bond market. if we can get to crude quickly and take a look at wti trading in the 70's. we are down again on the session. we just had the biggest one-day move lower yesterday the market. 76.84 is the lowest since july. here we are in the 70's on wti

crude on the same day that israe l's troops invaded the main city. tom: i missed it as well. i was wrong on this like everybody else. dot plot 90 or 100 -- i thought 90 or 100 make sense. i will be publishing on this. look for that paper in january. the lengthy sabbatical that i took, i would really suggest the whispers of deflation out there just to give you one idea to link out to $70. what are you laughing at? [laughter] lisa: the sabbatical. tom: just the idea that people are going to start get. how many fed speakers do we have today? lisa: a lot. tom: that is eight too many. prices in china have collapsed. look at germany.

another example of disinflation. jonathan: is the price story getting better or is demand rolling over? when it comes to crude, we will be talking more about demand. lisa: especially since the u.s. government put out a report is today saying that gasoline demand will drop to a 20 year low next year. put that into some of the reasons that might be backing some of the moves we have seen. jonathan: and to i -- wti in the 70's. we will break down a stunning rally in the equity market, seven days of gains on the s&p 500. have we opened the door for a rally into year end? from new york city morning, good morning.

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our experienced team and vast network uncover compelling opportunities giving our clients an exclusive advantage. principal asset management. actively invested. >> i think that house republicans and the senate in general are committed to the government not shutting down.

for many reasons, i don't think it will. or if it does it will shut down for eight hours. there is a commitment from both sides, speaker johnson and the senate, not to have a government shutdown. how that works out, i cannot tell you but i do think that is a commitment. jonathan: it is a commitment, senator bill cassidy. we need to about the next four 24 hours -- the next 24 hours. until tomorrow, $24 billion of 30 year notes. the interest costs in this country right now is coming from bloomberg analysis here in new york. the estimated annualized interest payments climbing past $1 trillion at the end of last month. these are interest payments. we have to keep going back to that. we are talking about interest payments through $1 trillion. lisa: the deficit is manageable

when interest rates are near zero. if you are not paying anything on this debt, you could have a massive pile. when interest rates are climbing the same deficit becomes punitive to the level of 5, 6, 7, 8% of the gdp. this is what people are focused on. people in washington have to realize this might be what is going on in the bond market. tom: i take your point that it will be a political football. i am not saying people will vote on the deficit but it will be discussed as we see the higher interest rate. i will run it up against the formula r minus g. all of our interest rate analysis is predicated on america having boy and growth and that is a little bit shaky -- having bouyant growth and that is a little bit shaky. jonathan: the 10 year right now, yields are not in the fives anymore. that is the good news.

we are back down to the fours. in the equity market, what a run. seven days of gains on the s&p 500. can you pull the amounts up? tom: it is a persistent bid. i have been watching it carefully. we are trying to decide when to publish. i am watching this on an hourly basis. the bid is there. it is not about a melt up. in they come. it is a different feeling. jonathan: the longest run in about two years. going back to november 2021. about 8% in one week. tom: the vix is 14.86. jeannette lowe joins us, director of policy research at strategas securities.

these elections matter to me and when i look at the governor of kentucky, when he won attorney general, he won by 2000 votes in kentucky. when he won the first time as governor, he won by all of 6000 votes. there is the shock of virginia. was it a question of close votes or did the democrats win resoundingly? jeannette: i think the democrats had a really strong night last night. i think that a lot of these cases, andy beshear in kentucky won by only 0.4% points in 2019. this time he has the about -- has about a 6% lead. that is a strong validation for him being popular in the state, the democrats being able to campaign on the correct issues this cycle. we saw that democrats had momentum going into these midterm elections. they had won 24 of 30 special

elections over the course of the year. last night with the elections you saw in kentucky, virginia, new jersey, pennsylvania we saw that democrats have momentum on these races. tom: to borrow from the former, so much losing. will the republicans change their approach? jeannette: i think that one thing is going to be difficult is that the one issue that has continued to be quite salient for the democrats is the abortion issue. they used it in 2022. they used it this year. it has been a very good driving issue. you saw turnout in a number of these races particularly the ohio abortion measure that drove election results. that is something democrats will be continuing to look forward to in 2024. we already had brown up for reelection in ohio noting that he will probably be focusing on abortion in that race as well. in virginia the republicans try

to change the narrative a little bit on abortion. they tried to talk about a 15 week ban that is more reasonable than what the democrats are proposing. voters rejected it. that is going to be very instructive going into 2024. republicans will be struggling on this issue. they will have to figure out other issues that will be better positioned in order to get some votes and change these outcomes. lisa: how do you understand the fact that joe biden is losing a lot of polls are tickly with the matchup of former president trump and yet the democrats had a good night last night? jeannette: what it shows to us is that joe biden is weak but it is more isolated to him. down ballot democrats have been able to separate themselves. they have been able to show their own messages and that is important in a lot of these races and very important going into 2024. having joe biden at the top of the ticket will be important. we have a long way to go. the polls are not very instructive to what we will see in november of 2024 but it does

show democrats that they have an opportunity to separate themselves from joe biden, to still go out on their own messaging and be able to produce strong results. that should give the party a little more comfort this morning as they are looking ahead to 2024. lisa: it has made a lot of discomfort especially after the censure last night in congress of michigan, the democrat. do you think the features of the democratic party, have they been overplayed or underplayed heading into this election cycle? jeannette: this is going to be something that will continue to ramp up, this issue particularly with support for the middle east and how this gets done whether we are trying to just support israel or help palestinians, that will be the issue. you also saw that in a lot of these races it goes down to specific issues within that district. people were thinking about whether new jersey, whether

senator menendez's indictment would have a negative impact on democrats in that state and it did not. a lot of these races are local, more focused on local issues. when we go into 2024, national issues will matter more. as you can see democrats are also able to reach their base and it is going to be up to republicans to also have a similar counter message. tom: not to get the crystal ball out but we have a crystal ball out today. it is right here. it is putting off a nice glow. it is a beautiful crystal ball we have in front of us. i want to cut to the chase, republicans have to adapt. that's all there is to it. in the primaries, in the debates as well. what nuances will we see? what does desantis do, etc.? jeannette: one of the things we will be watching for is nikki haley has been getting momentum. now we have a lot of geopolitical issues at the surface. nikki haley is going to really try to capitalize on those issues and try to put herself

above ron desantis in that frame. that is something we will be watching because as we have seen over the past couple of months, geopolitical issues are becoming increasingly important. bread and butter issues will also be important during a presidential race but these issues will be important going into 2024. we have not seen the extent of it yet probably. the dynamic between someone who was strong on national security versus someone stronger on domestic issues, that will be a big player in the debate to mike -- a big play in the debate tonight. jonathan: the third debate i believe for the presidential candidates for the republican party. let me share a headline from the executive arm of the european union fully recommending membership talks with ukraine. the commission's opinion needs to be approved by eu leaders at a summit that will take place next month in december.

he did a wonderful job breaking this down. the last member of eu expansion was croatia. that took 10 years. if ukraine wants to make this happen, they will have to go through a series of reforms. i can share some of them with you right now. they need to enact legislation on minorities, corruption, regulate lobbying to bring it in line with european standards. this can take a long time. tom: it will take a long time. it will be step-by-step but can you imagine the reaction of the kremlin today? jonathan: to these headlines? this is the direction to travel. coming up, nick bennenbroek of wells fargo. from new york city, this is bloomberg. end sophie says you've been a huge help. at ameriprise financial, more than 9 out of 10 of our clients are likely to recommend us. our neighbors, the garcias, love working with you. because the advice we give is personalized, hey, john reese, jr.

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jonathan:jonathan: seven-day winning streak on the s&p 500. you have to go back two years for iran like this one. nasdaq futures look like this, just about unchanged on the s&p 500. we are talking about a gain of 8.4%, led by tech and the bond market. the high of the cycle of the year on the two year was 5.25.

that was october. these are the levels we have come back to. that move is supported -- has supported this equity market. tom: it has. there is something else going on. i'm going to go out to the wall out there and how many people were on the sidelines. that is overlaid into the bond rally. jonathan: blackrock decided to talk about this friday. what would it take to unlock all that cash to get people to start distributing it back to the equity market again? a lot of people talk about dividends. it might take a while because right now if you're keeping our money in cash you're getting a 5% yield. if you are looking at stocks as a dividend play, you have a long way with earnings-per-share as

well as actual dividend payments to catch up. jonathan: i keep going back to the commodity market. we have just had the biggest one-day loss on crude going back to the start of october. the lowest since july. even with the height of tensions in the middle east. tom: we have a wonderful guest coming up to nail this down. jonathan: israel says its troops have entered the heart of gaza city as it continues its operation against hamas. prime minister benjamin netanyahu says there will be no cease-fire until the hostages are freed. g-7 ministers are calling for humanitarian causes in the conflict biden urging netanyahu to agree to a three-day pause acquaint axios. -- according to axios. pressure is ramping up on the president in america to wrap --

ramp up pressure on leadership in israel. tom: it is like every other war except this is the first with this immediacy. it is amazing to light up -- line up six websites and see the immediacy of the transfer of information. lisa: leaders are trying to figure out how to work with that because that flow of information is affecting protests, so you have leaders like saudi arabia saying, we have a problem because our people are getting outraged and we are running out of time, even though saudi arabia has not taken the idea of normalizing relations with israel off the table. tom: by no means am i an expert, but the animosity of the various arab league nations against select parts of the palestine community is evident. that is one of the complexities

money the headlines. jonathan: it could become a campaign issue into next year. speaking of elections, for democrats winning majorities in the two legislative chambers come ending efforts to unify gop control in the state and dealing a blow to his possible presidential bid. this was one of a number of wins for democrats as voters in ohio endorse protections while the governor of kentucky also won reelection. we were talking about governor youngkin jumping in. he was not talking about that, you have to say it is off the table. lisa: does this take glenn youngkin off the table not only for the cycle but for 2028? does that put nikki haley in the front runner seat to possibly counter the former president trump and the debate that we get tonight in miami might shed some light on that at a time when maybe the election results that we got last night are not

indicative as much of the national move -- mood. tom: i believe we have a sitting president, but 2028, governor beshear winning nicely in kentucky, a lonely democrat. jonathan: we do have a sitting president, but we have the prospect of that sitting president dropping out of the race -- that story is going nowhere. chinese present xi jinping said to be the guest of honor at a dinner with u.s. business executives when he visits san francisco next week. bloomberg reporting hundreds of people will be at the dinner. the white house is already said the chinese leader will meet with president biden at the summit. i want to try to frame this. i cannot think of a bigger spread between the mood of the country, the position of congress, and then corporate

america, which is somewhere over here when it comes to relations with china. tom: we have had ceos wandering off to keep the dialogue going. are they are diplomats? lisa: they are their own diplomats. how much does xi jinping need them and how much can he promised them stability in a time when rules are changing and there is not necessarily a concrete feel that they will not be appended with something? how much is this him courting them? that economy seeing a decline in foreign direct investment for the first time. jonathan: some people might describe some of the business executives as diplomats for china and not for the united states of america. some people. you want to save this? tom: everybody listen right now.

there is a single line in his biography at wells fargo of a tour of duty at brown brothers. he won currency forecaster of the year two years in a row. that is unheard of. he joins us now, international economist at wells fargo. i have all sorts of currency questions, but we do not have time for that. you have a single sentence in your report of global gdp of 2.4%. in my textbook, that is a recession. are we in a global economic recession? nick: i do not think it is a recession. it is a downturn, a slowdown. i have gone more optimistic. it is going to be slower, but i do not think we are going into recession. tom: the imf has it to 2028. do you see where this works out

with your expertise for new zealand across pacific rim to a new buoyancy? do you have a recovery in mind? nick: we do. we are probably thinking about 3% global gdp growth. one of the reasons is china, there has been a lot of policy stimulus. they still have to a graphic issues and property issues, so we need to become accustomed to a slower trend for global growth even beyond this downturn. lisa: before we move on, just to have you weigh in on the discussion we were having, in san francisco this month, do you think this is china realizing is losing the room and needs those businesses to not see slower growth and a more difficult situation? nick: that is probably correct. i would not want to speak for the chinese government, but what

we are seeing is greater fragmentation across the global economy. and also i think there is some hesitation and terms of fiscal stimulus in china, so if you can utilize the global market that is a way to address the slowdown. lisa: there has been debate around the oil price. prices have fallen even though everyone expected them to rise in the face of geopolitical uncertainty. is this a demand story that people are under appreciating that suggests some sort of slow down on a global level that has not been fully priced in? nick: that is probably true. the slowdown is a gradual affair , but when we look around the global economy in europe we think the u.k. will probably fall into recession and the euro zone will avoid it. you have to look far and wide to see areas where there is a lot of positivity, so i think 2.4%

and slowdowns coming through -- in that sense it is understandable that we are seeing this. tom: i cannot fathom the value at wells fargo of having you with your foreign-exchange team. what is the bennenbroek call on dollar resiliency? nick: i mentioned the slowdown taking place, but it is hitting hard in europe and canada, seeing a downturn on businesses there as well, so i think that downturn will come later in the united states in terms of relative performance. the dollar i think it can gain against the euro and pound until the early to middle part of 2024. lisa: neel kashkari said the reason he rejects ideas that the yield on u.s. treasuries and the

long end have risen as fast as they have is because of the fiscal picture, he said the reason that is not really what is going on is because the dollar should not be week. do you buy that argument or do you think on a relative sphere all developed markets are facing the same problem, which is interest payments going up and deficits not going down? nick: most governments are facing challenges now in terms of elevated debt levels. a notable example is the exit from yield curve control, so i think it is an issue across most countries and i would suspect these issues do come. the voters are not going to vote on debt or the deficit, so for right now in terms of day-to-day of the foreign-exchange market we're probably looking at relative growth. tom: you always have to look for probabilities.

we have to go to professor winchester, the world expert on rugby probabilities. this guy nailed that they would be at risk and that is what you and i observed the other day with nick bennenbroek. jonathan: would you like a world -- a word on your world cup lost? nick: thank you for mentioning that. jonathan: why did you go there? tom: because i enjoyed it and i had no clue what i was watching. jonathan: that is every segment. lisa: fantastic. tom: were you watching this incredible match in france and the emotion of it knowing they should have beat south africa? nick: maybe i can come on again in four years when the next final is on. it was fun. jonathan: one man down through

most of the game. it was pretty incredible. dan carter was basically the greatest ever. he was the guy who took the kicks and i would say they missed two kicks. nick: i remember both mrs.. jonathan: if dan carter was there, you have to imagine at least one would go in. phenomenal effort. good to see you, nick bennenbroek. some rugby here. guy johnson will be proud. tom: guy johnson called me up and said you have to talk to bennenbroek. they never lost when i was younger. jonathan: you and i talked about this, the respect that rugby players have for match officials, for referees is phenomenal. they make a decision. that is the decision. you walk away.

maybe the captain has a conversation. there is full transparency. that is it. they make mistakes, but still you walk away. international football right now is dreadful. the attitude to the referees. i would go with you. it is out of control. jonathan: it was good to see last night because i did not see much backtalk. jonathan: thanks for tuning in. why dan ives thinks this rally could continue. good morning. ♪

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> we think the outlook has improved, even though we remain neutral on the sector. we think there are pockets of opportunities, even though we might have some outliers of larger names in the smartphone and hardware area. jonathan: the latest equity market call it ubs was good for the southside research. i was so happy to see. just fantastic. i shared some of the research with you. expect the s&p 500 to end around 4600. they are saying weaker growth hurting revenues that is the call from the team at ubs. tom: what they are looking at here -- i think there is a lot of ambivalence in this quarter and the guidance for it is as mysterious as the economic growth. who has a q1 and q2 view?

what are you rating your outlook? all of us that wrong 13 months ago? jonathan: those outlooks need to be published in the next couple weeks. the call from ubs, deteriorating pricing power, rising interest expenses ultimately weighing on earnings. lisa: one area has been immune, the tech story. how much is the success of some of the biggest tech behemoths at the expense of some of the other tech companies? i think about startups and smaller companies that do not have economies of scale. jonathan: they also say steep acceleration in tech earnings, contributing to s&p 500. tom: that is a dan ives market. he refuses to talk to us when apple earnings come out.

we only get him to pick up the debris. great look, dan. i want to talk about your call on apple. there are a few other people out there with the optimism. when i saw those margins and the company managing for-profit, not revenue growth, can you raise it -- can you raise or estimate? dan: this is just the beginning of the next phase of the apple store. you look at margins that are historical and iphones, despite haters, continuing to hate him a is growing even when you take out currency and it is growing more. the china iphone demised story -- demised story is fictional. this is the start of what i view as a $3 trillion market. tom: can you pop up to 250 this morning? dan: i believe the best case is

closer to 275 as this plays out because you do not have ai in those numbers. this is just the get out the popcorn moment for when apple ultimately over the next year introduces the ai app store and that will be ultimately from a services perspective 5, 10, 15 billion. jonathan: you talked about growth of the iphone. what growth? dan: units are growing into the december quarter. if you take out currency, you have basically made single-digit growth, 7%. jonathan: you have been talking about people upgrading. have you been right for the wrong reasons on the stock? do you acknowledge that?

dan: if you look at this as a super cycle, that is playing out. i think our biggest call has been china, despite many. china growth is actually increasing, not decreasing. jonathan: they had a down quarter in china. dan: if you look at china, it was a record for the september quarter. when you look overall in the initial reaction after, ipad, macs, that in three dollars gets you a cup of coffee. i'm focused on iphones, where units were up in china. jonathan: if you came on today and said margins are better, they are. i am with you appeared margins are great. service revenues where the growth is. i understand that. maybe you can make the case for why the stock is higher. when you say iphone super cycles , that is where i struggle. dan: let's dissect that.

when you think about the headwinds, that is underlying growth that you are seeing, just to steady-state it. i believe our view of the iphone cycle will be over the next 3, 4, five quarters, where you have upgrades that actually come through. i am not saying you do not have some share losses on the mid tier, but in terms of high end, as a utility this is a midst to single-digit growth on iphone and when you start to run that through that could be anchor mental -- incremental as you look out. lisa: there's a lot of growth baked into valuation and a big piece of valuation is where buyers will come from. you have been traveling around the world trying to hold everyone's hand and convince them there is value in big tech. how much to losses of other areas of the sphere and the more

than $11 billion loss at we work -- how much does that play into ambivalence about buying the story right now? >> you are having winners and losers in terms of the broader economy. in terms of the magnificent seven, the strong get stronger. to my point, being in asia for a few weeks and europe, it is easy to sit there in new york on your 10 floor spreadsheet being negative on apple. what i see out in the world is a different environment in terms of growth happening and i believe tech, you are going to see the strong continuing to dominate and i think in terms of ai we are just in the early stages of monetization. that is a big thing in this market. microsoft saw it. that is a hall of fame quarter in terms of what we saw. i believe right now the ai

goldrush is starting. lisa: that sounds lovely on that side. on the side of how much we are paying, i am looking at apple come up plus the amount it has increased. will we be paying $600 a month to apple for all our services? dan: over the next year or two, i think the average apple user is going to start to increase what they are paying apple on services because ultimately as it goes out the ai technology that is going to be in fitness, health, in the app store, that is good to give them another added growth to the monetization. part of why the stocks reacted despite many being very negative initially, as it has come through, you are stirring see growth.

services, growth. margins. this is just another flex the muscles moment. this is a stock that ultimately is a $4 trillion mark up by 2025. jonathan: why are palantir the messi of ai? dan: they are the purest play in the market. they are one where many have been negative on that story for a number of reasons, but what you are seeing now happen is they have parlayed enterprise success and you are seeing the use cases explode. that is the golden child of ai. tom: any day now, do i see another massive apple debt offering? dan: that is something that could be on the table. i think the bigger thing for apple is they are finally going to look at m&a. tom: they are going to buy

disney? dan: i believe espn is the asset. jonathan: you got a number for that? dan: $35 billion to $40 billion. it goes back to the mls deal. that was where the light bulb went off in terms of livestreaming sports. espn is unique asset and right now you look at the top of this mountain, it is cook. you are starting to see ultimately more of an opportunity where they can go on the offensive rather than defensive. jonathan: it is good to see you. dan ives on tech. equities right now just about unchanged. our editor-in-chief and conversation with the prime minister of singapore. you can watch that on bloomberg.

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>> we are seeing some evidence that the economy is slowing. it has been impossible to project anything in this weird environment. the economy will slow but be resilient. this is bloomberg surveillance with tom keene, jonathan ferro and lisa abramowicz. jonathan: i have been getting so

much abuse during the christmas -- commercials. lisa: the handyman says that it's ok to leave the tree up all year round. jonathan: from new york city, good morning. this is bloomberg surveillance. your equity markets are unchanged. we look at an eighth day of gains on the s&p 500. we have had eight days on the nasdaq. all week, it's a move of more than 8% over last week. tom: the october lows a year ago, 13 months ago. other people were on board there as well.

what's fascinating is that we have done this without catharsis. i have a vic's all the way at 22. it's interesting to see the lift up without people climbing on board. jonathan: mike wilson of morgan stanley may describe this as a bear market rally. when they say things like the fed put us back. i can give you plenty of reasons why it might be. is that a sign how quickly the sentiment has turn? lisa: it's giving life to the stream on wall street that the fed will come in with significant rate cuts which will turbocharge a rally. there is a big divide between those who see the bond rally as

a positive for risk assets because it is a de-volitilization. i what point are we going to worry about it? jonathan: what was that word again? yields are a little bit higher by a single basis point. lisa is going to run through all of the fed speak in all of the debt issuance we get. lisa: we will be getting 64 billion with 1030 year notes. we have jay powell and then

michael bar. tom: michael bar is going to be really important on regional banks. this is in the zeitgeist, are they going to change the rules? i don't even understand what they're going to change but everyone in commercial banking will listen to the speech. jonathan: you just don't read the fed speakers notes? tom: i mean in brazil, when marco wanted to read them it was just not the time to do it. lisa: let's get to supply. u.s. treasuries will auction today. tomorrow we have 24 billion of 30 year notes. arm markets numb to the idea of

a supplier have they been calm down by the treasury that they did not sell more debt on the long end. do you think this is going to be important? tom: no. so when lisa calls me to participate i can say no. lisa: amc and disney after the bell. we want to hear about taylor swift mania the question is going to be how much will they? the streaming more than they already have? tom: it's five dollars here in $10 here and all of a sudden it's real money. jonathan: i was told that there

is no reason mariah should be played before december 1. oh the shame. constructive equities, you have been buying stocks, why? >> i was reluctantly bearish for parts of the year october 27 the market was down, sentiment and positioning was down the standard deviation and we decided to buy stocks. we closed an underway position that was 3 billion worth of buying. the timing looks great in hindsight. when it comes to execution we can be pretty dynamic.

tom, you have asked me before, but would bring you back to neutral with stocks and bonds and i said, i need stocks to come down and the vix to go up. the vix was only at 22 but overall sentiment was depressed enough for us to go back to neutral. tom: what's important here is that sebastien page is living in your world. his book is absolutely definitive. the adult read on asset allocation, beyond diversification. you are out there saying it's about horoscopes, that is the way we look at the market right now? sebastien: macro momentum has been negative. and they tend to look short-term , at patterns.

if you look 3, 4 weeks out there is something to momentum but on the others that you have value-based investors and that is what makes markets. and i learned a new term today de-volitization. rates have been so volatile that if it comes down there is upward pressure on rates. tom: i am begging the next time you have it to you bro price meeting you use the word de-v olitization. lisa: a view where on twitter just said that it is in fact a word. i really want to lean into the horoscopes, when will bond's a

stabilizer again? you are pushing back saying that will not be the case for much longer are we going back to 60/40? sebastien: i have studied this over the years, going back to the 70's they provide an interesting analogy. in ways where you see stocks and bonds go down because of a rate shock. are we looking at growth volatility, recession risk in which case they should be here stabilizer or inflation volatility in which case stocks and bonds will be positively correlated. going back to tactical we are short duration under the hood. we are long credit and long cash at the same time which speaks to

the our view that we are not going to devolitization as quickly. lisa: are stocks the new stabilizers? based on what we just heard from dan ives, by microsoft and have cash. sebastien: i feel like post-covid, people were describing bonds as proxies. stocks are volatile but that is why you get paid for holding the stocks over the long run. i don't buy into the narrative that stocks are the new safe assets. jonathan: can you take a long-term view on financials where i don't seem to trust them. i had this conversation

yesterday, if yields drop because growth is doing poorly that should hurt them to. what helps them? sebastien: earnings. let's take a step back, growth keeps surprising on the upside and that might continue. we started the year with a consensus gdp of 0%. q3 at the beginning of q3 the forecast was .5% of gdp growth and we just printed 4.9. this is more specific to the u.s.. you may ask why are you not overweight stocks? jonathan: why are you overweight? sebastien: thank you. i am a big fan of the show. tom: i'm glad someone is.

sebastien: you've been talking about narrative through lead in the best example is we had nonfarm payroll slightly below and a slight fed comment. jonathan: goldilocks is back in so jonathan is back in stocks. warner bros. revenue 9.8 billion you know who has lost in the entertainment business. super mario brothers was number one before barbie came along and generated 1.6 billion in ticket sales. i watch that movie. lisa: with who? jonathan: by myself because of nostalgia from nintendo.

lisa: when he eats the mushroom and gets big? jonathan: knits is going to do legend of zelda movie. if you are just joining us, stick with us there is more to come in your equity market. yields are a couple of points higher. i am with lisa there is a test on the 10 year but a lot of supply with 10-year today and 20 year tomorrow. tom: with entertainment. they are dead encumbered. lisa: i'm curious about how long

nostalgia is going to work. that is what is fueling our desire to go back to our use. jonathan: nostalgia for who? millennials. that is where the money is. lisa: what other nostalgia is coming? jonathan: when you are the target audience and your kids have no idea what's going on. coming out peter tchir. (sfx: stone wheel crafting) ♪

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shutting down. for many reasons, i don't think it well or if it does it will shut down for eight hours. there is a commitment from speaker johnson and the senate not to have a government shutdown. how that works out i can't tell you but i think that's a commitment. jonathan: we will catch up with anne-marie in just a moment. the story of the last week, gains, gains, gains. after 7, 8 days we have had a .4% movement higher. the longest going back two years. slightly negative today on futures but ultimately after the last week. tom: 14.80 on the vix. it's just money coming in. i don't see enthusiasm i see

relentless money coming in. jonathan: we are split by this move in the bond market. i think moving down from five two 450. are we confusing the rally was stability? lisa: it's a great question. i think that's the reason why the auctions are so important to watch and white tom will be tracking them. i am looking for distaste in the market. we have the 10 and 20 year auctions today and tomorrow. tom: backing away from the hi, the mortgage is where the behavior pattern changes. when they come into the auction do they say grab it now?

jonathan: does the move from eight to seven make a difference in mortgages? tom: to me it's how much buyable house can you buy? lisa: it's a fiction because no one is actually borrowing. nobody is taking out mortgage debt, why would they given the will pay a percent? tom: i'm reading our emails from devolitization. we will go down to washington, our bloomberg electoral correspondent. which of these many off year elections got your attention? annmarie: virginia, many felt this could be a referendum on

joe biden given that he has struggled in the polls but because glenn youngkin was trying so hard spent a ton of money to try and flip virginia so that state legislature both chambers were red. what he has now is a very divided government with democrats controlling both. donors were hoping he would be the last minute addition for 2024. what does this mean? he is a lame-duck governor and is he going to mull over a 20 a bid? tom: what is that the trump people will not show up if he's not in the election? annmarie: you have to look at some of these races in kentucky

and ohio as well. it was specific for measures that they were voting for. what was clear last night whether or not trump voters showed up or not. abortion is still a key issue for voters and these are not just democratic voters these are independence as well. so for democrats looking at 2024 they will spend a campaign heavily on abortion. you can see the change of tone that they are talking about of freedom and as of right. the president said he was so happy to see that americans came out to protect their freedoms. this is how they are trying to shape the discussion. lisa: people say social issues matter until they don't. last night, social issues one

democrats the election. heading into next year, will it be the economy or some of these issues? i mentioned abortion and the ham as/israel war. annmarie: we have to remember this is a deer out. it follows president biden bucking historical trends when everyone thought we would see a red wave. you can have off year elections that do well for democrats but polls show that the economy does matter for individuals and that they still think that president biden is too old. i think we are way off from next year to see what is really going to be a massive driver. a lot can happen in the year. but to your point about the war,

most americans vote on domestic policy. unless something happens in this conflict spreads throughout the region, this will just be something that happened last year that is ongoing and a conflict that the administration is dealing with. lisa: let's talk about domestic issues. that no one will vote on the interest payments of the united states but they could double based on how much are we costs have risen. annmarie: aligned republicans want you to know because they keep talking about fiscal spending but they also want to cut taxes. i don't think every day americans are going to focus on interest payments. i do think they will look at

their own household budget and how much more are they spending on groceries, gasoline but at the same time, it was not economics that pushed people into their votes. when he looked at what happened in ohio, kentucky and virginia it was about republicans that made it about abortion. virginia is at 26 weeks and that did not work. abortion and reproduction rights still matter. tom: what does the secretary of state do given the immediacy of gaza. annmarie: this is ahead of biden sitting down with president xi in san francisco. he went on this frenetic tour to

the region. what he is likely doing and the administration try to do is talk about tactical pauses. they want to make sure they can get humanitarian aid into gaza because the humanitarian situation is dire. we spoke with cindy mccain and she said that food needs to be able to get through. jonathan: annmarie on the latest in washington dc and the latest on the s&p 500, not much change. when you hear brammo talk about these numbers, she's trying to cheer herself up with dog videos. lisa:. , pause. jonathan: i'm getting hate mail

about putting out the christmas tree early and watching super mario brothers. how many cats does he have? everyone has to know that i am not a cat guy. lisa: what i am looking at right now, videos just pop up. jonathan: you can't excuse yourself from this. lisa: a lot of pet videos in my feed lately and it is comforting. tom: i have elon's dog popping up in my feed. to the challenges of today, when active investing and disciplined risk management are needed most. drawing on deep expertise

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donna quite event over the last week. you know -- jonathan: teachers are going nowhere on the s&p. we are -0.03%. the rest of this morning -- the rally was inspired by a move in the bond market. 10 year maturity, 30 year maturity. 10 year yield high by a single basis point.

lisa: 70 buyers have been waiting for the volatility to die down. because we did not understand how much leverage or pass traders were behind it, a lot of people are waiting. will that fortify the rally at least in the mackinac of jonathan: tomorrow afternoon, $24 billion and 30 year bonds coming into the market. i think it is always really hired to make a call on the future and then make another call after that. you can say that things will happen in the middle east. israel will go to war with hamas. let's say you saw all those things before it happened. look at crude right now. we had a big move. down another. 76. lows that we have not seen since

july. tom: it is the toughest thing to call, but it is all about global demand. a stunning 2.4% level gdp. he says it will get better. that is this year and now. it is a global recession, if you use the traditional benchmark. jonathan: here we are in the middle of november talking more about demand and less about supply. lisa: at what point is this a slowdown and out what point is it a switching to different fuels? he was talking about it with respect to other on markets. jonathan: wti at 76. under surveillance this morning.

prime minister benjamin netanyahu reiterated that there would be no see site -- cease fire until all hostages are released. calling for humanitarian causes in the conflict. lisa: it is a horrific conflict and there are so many civilians caught up in this. we all have this real desire to see it stop, especially for children to have a better situation. the difficulty is this question of how to do that. if israel says it will let them rebuild, the work continues and it could -- there is an immediate point where we are seeing these images. make it stop. tom: i will not even quote the details. they are happening within a one

hour turnaround. there are no jokes to be made. this is revolutionary, the transfer of information. jonathan: president standing shoulder to shoulder with israel, privately, trying to put pressure on them to conduct some kind of humanitarian pause, whether the pressure builds to the point that he has to do that publicly more, that is something that we need to look out for in the weeks to come. lisa: hamas is looking for some of these images to come out. they want martyrs to show the world but they are looking for in. you have those images and middle eastern leaders grappling with the emotions and protests. at what point do they have to respond to those in a more material way?

jonathan: the debate tonight in miami. five candidates making the cut. trump, of course, once again is sitting out. holding a competing rally nearby. five candidates on the stage and he will be elsewhere. tom: florida is so important. i would defer to in re, matthew and others. to me, florida is different and it is really cool to have any debate there, republican or democrat. jonathan: you know who has momentum right now? nikki haley. a little bit of support from governor ron desantis. ultimately, the clock is

ticking. more people consolidating around one candidate. lisa: is it going to penalize the president that he is not participating? jonathan: we are going to be talking about this for decades to come, threatening to up and dozens of leases. once valued at 47 billion, terminating 70 leases. landlords are facing pressure in tenant demand. bankruptcy four years later. tom: it is not only the failure of management but all of a sudden running into the fact of a implosion. that was not the original

calculus. jonathan: that was the headline yesterday, without a doubt. how do you walk away with this with hundreds of millions of dollars? he did not walk. he was almost pushed. it is amazing. tom: with years of experience, deborah cunningham joins us. yield is moving. will the massive movement in the money market funds be ending, deborah? deborah: the retail side will slow down but the institutional side is just getting darted. they stay in the direct market, so in treasuries, and paper, and other types of products that are directly impacted by the fed rates changes.

they do not go into money funds that lag not direct market, until rates peaked or plateaued. they often start to go down the other side. i think the institutional trade, that speak it will just turn on. tom: short-term paper does not become attractive. in your head, where did they need to get to before the facts change for the people loving their 5% accounts? deborah: i think it is very much indicative of what the fed has in telling us. it is also indicative of the most recent fed speak from jefferson and powell about the fact that they are assessing what rate hikes were done in the summertime come in this ring and

summertime are having on the economy today and the higher bond yields that we are having. the higher bond yields actually left the system after last week's fed meeting, and suddenly the payrolls number -- when you think about it, i those numbers so bad? they continued to indicate that we will not be going into a recession. maybe where we are right now in the tenure is a good place for them to be, a good place for them to hang out for a while. it illustrates that they are not going back to 1% or 2%. but that needs to be some premium and building expectation, whether it is 2% or 3%.

lisa: can you give us a sense of the tipping point where money comes in or out? when yields reach a certain point, people start saying, maybe i should take my cash and put it to work. deborah: bloomberg did a piece maybe a month ago about 5% yields on cash products. with 5.5 trillion to 6 trillion in the market, it is adding a percent to gdp. i think that number is a tipping point. we are well above that at this point, but at some point, we will cost down through it, and i think that is a magic number for people. it is meaningful in the context of the economy and meaningful in the context of people's income. i think that 5% number become something where people start to

segregate cash again. cash, we have learned how to put it into buckets, operating what would be strategic and quarter. all of those have been in the money market side for the better part of a year and a half. at some point, they will start to peel off and operating will remain. i think 5% is wherever that process begins. lisa: how sticky is a? -- it? deborah: you have a good stickiness of the retail trade. the retail trade was not coming out of equities or fixed income. it was coming out of products, for the most part. not retail trade is about as sticky as it gets.

the institutional trade has not even righted in force yet and will be the more transitory trade. i think what is in there at the 5.5 to 6 trillion is fairly sticky money at this point. jonathan: following a big move. yields pulling lower, pulling back from the highs that we have seen. chairman kyle will speak a couple times. i we annoying today? a bigger one tomorrow? lisa: at what point is he going to say something that is actually meaningful? it is more than ever important. tell some jokes, talk about what he is going to set up.

jonathan: if you are just tuning in, welcome to the program. the s&p 500 looks like this. yields are up a single basis point. i do believe there is a panel tomorrow. lisa: he could say something. he could surprise us. what we are looking at right now is the potential for the fed to say that they are done, but fed chair jay powell had an opportunity to pay that she could have leaned into that last week. it was arguably one of the biggest generators of this rally or stability in the bond market. tom: you nailed this earlier. they decidedly were below 78.

down a solid 1.5%. in euro-yen, just went out to new yen weakness. on a wednesday, maybe i'm not worried, but going into the weekend, what will the japanese institutions do? jonathan: i was having one of those days where yesterday felt like wednesday. i miss you so much. it's friday already. a beautiful thing. tom: it is emotional. the sabbatical was awesome. it was great. i got below 59th street. jonathan: kind of like peeking through the windows at work. ♪ ♪

the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪

it's easy to get lost in investment research. introducing j.p. morgan personal advisors. hey david. connect with an advisor to create your personalized plan. let's find the right investments for your goals okay, great. j.p. morgan wealth management. >> i think the bigger thing for apple is i think they are finally going to look at m&a.

it goes back to the deal. that was where the lightbulb went off. in terms of livestreaming sports, i think espn is a unique aspect. jonathan: he thinks apple might make a play for espn. we will talk about that in a moment. your equity market, just about unchanged to positive after seven days of gains. cannick the gum day eight already? yields higher by a single basis. backing away from the multiyear highs. 5.0, 1.87%. we have backed all the way back down over the last couple of weeks. new yield up a single basis point. tom: what have -- what have markets shown?

are spreads coming in nicely? lisa: everyone is lacking in yields, and this is a question. tom: is it a responsible that they do not take on more debt? everyone would have a responsible amount of debt. lisa: if they have all this cash , why would anyone say, you should issue debt and pay 7%? tom: they are giving it away. four and 3/8 down, but they are not warner bros.. they are issuing debt. jonathan: the man himself apple,

very good at timing the credit market. on that as well. tom: the challenges -- i looked at the equity space and warner bros. digital or whatever it is, they are down, but you can do this on the bloomberg. i went over to the bond space, and they had down in the bonds as well. it has gone down 6% in price, given all the challenges. how and when do they recover? >> they should not be down. they posted good results on a lot of fronts. good, free cash flow and they stand there with over $2 billion. it came in above estimate, but

most importantly, this is something that we are tracking as they undergo all of these headwinds. what about the streaming business? is that something that can generate sustainable earnings? warner bros. has been one of the first companies apart from netflix to show that it can be profitable. so far, year-to-date, they are actually up, and they posted a streaming profit. revenue trends are a little bit choppy, but they are doing everything that they can to make sure the model is sustainable. i give them foam marks when it comes to result and streaming profits, and controlling costs. jonathan: does it make a difference when you produce your biggest movie ever?

>> it has been a total home run, no doubt about it, but there are too many uncertainties right now. you have the hollywood strikes that have been dragging on and we see the whole slate of this overhang. we do not know when film production will resume. we do not know when we will get new film content. there is a lot of uncertainty there. it raises the question of what happens to the advertising business. if you look at the tv business, it is in the doldrums. double digits through this year. affiliate fees was week as well. if you are looking at the long-term model here, there is a lot of uncertainty with the tv business. that is what is reflected with

the stock and price today. jonathan: consolidating ownership of hulu. at the same time, people are talking about the sale of espn. who is buying what and who is selling what? >> there are so many moving pieces. it is going to be interesting. we know that they are looking to sell. they are looking to sell and espn is a big question mark. they are looking for a minority stakeholder. ultimately, i think the whole idea of consolidating hulu is to make the streaming bundle. to have dizzy plus, hulu, and then a robust espn streaming product is the way that they stay on top. i'm not sure they want to

necessarily -- they want to have a minority partner there. lisa: do you buy that? >> it will be really hard. it does come down to the price. we kind of value the business. we think anywhere from 22 to 25 billion in terms of valuation, but if they can get the valuation, bob iger might consider it. lisa: i did some research last night for all the different streaming networks. two to three dollars a month. that is for the basic survey. when do people say enough is enough? we cannot find anything. >> that is the big question. we are definitely heading towards a shakeout year opinion of e-service has raised their prices. everybody wants to have it hired

so that they can get to that metric quicker and quicker. they want to push more people. people at some point say, i will bite the bullet. i will start watching. i do not mind if i can pay less. that is what netflix's has been. ultimately, their whole aim is to be felt that digital ad business, if they can. tom: does it matter now to go warner bros., discovery with 60% debt? the disease 22% debt or even netflix's 9% of debt. what way to the financial people have in your world?

>> debt has been a huge concern, for a lot of these media companies, for warner bros., the big question -- paramount is another that comes to mind, but the good thing is that they are using the cash flow to get to that leverage target. last year we had then over 5'1" times. they will probably be ending this year below four. that is what they are looking -- that is what and looking at. as long as they continue to deliver on that tactic, they should be in good shape. jonathan: we will touch base when we get those dizzy numbers. disney is down 2.6%. i was not aware of this, but a third consecutive year of losses.

tom: you bought this for the grandchildren. he bought shares. and it is like the bond market. it is an absolute train back. lisa: i think there is this arguable question, the investment in content. i think it would be really good. tom: looks rare surveillance in february. they have to wear their floaty's. jonathan: brutal. stuck on a boat with everyone? absolutely not.

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>> the doves can basically say that the labor markets have balanced.

>> there is a high probability of rate cuts next year. >> we are going to be scouting what is coming. >> this is bloomberg surveillance with tom keene, jonathan ferro and lisa abramowicz. tom: bloomberg surveillance on radio, television, green on the screen. jonathan ferro, oil, moments ago, falling below and i did not see that coming. jonathan: things have changed so quickly. we have gone from the big bad wolf to goldilocks in about a week. a conflict the other way just as quickly. they believe that the doves are in control. let's see if the data changes

that story. tom: there was a seismic shift. i will let you decide rain. we have seen a day after day. lisa: i am watching to see when this will shift. it will be really important to get a sense of that. a lot of it has hinged on the bond move. tom: what if we have a normal auction? you believe we are at risk of something odd but if the action is normal, then what? lisa: then we value. i would guess that the rally has legs, but all those institutions like this is a value.

it may be some of the histrionics. tom: if you could price up and yield down, it is just like stocks. they just pile on. jonathan: that move has spooked everybody. maybe even in the white house. treasuries tried to come out and say it is not about supply. the fact that we have come down makes people feel a little bit more comfortable. the moves are still quite large. i wonder if we are confusing a rally with stability. is it stability? you get that kind of stable auction that we can walk away

from. standing a little bit taller to walk away from this. tom: never quoted coming 18.45. i guess it is a good deal. jonathan: yields going nowhere. 76 on wti, the lowest since july. threatening to break 80 this morning. recruit is negative 1.4%. let's go through the numbers again. tomorrow afternoon, 24 billion at the 30 year maturity. tom: it is easier to do business

this morning. our guest to synthesize on this joins us. you look for price up, yield down. what will that do to the equity market? >> i think the pain trade is to lower yields. many got short again. it works until about 435, then we realize that we are getting there because the economy is actually lowering fast. at that point, that is when the fears get priced back into stock. tom: studying with a gdp call. >> i think it is more of 18 to be to three week vision.

we do not know what is going on there and what is scaring me is that we are having a lot of discussions and hearing discussions about supply chains. as it drags on, if there is any degree of escalation, supply chains become an issue again. jonathan: a move almost 11% lower. a lot of people pointing to demand starting to crack. what is your view on that? >> last time i was here, is that it would not be a good hedge because oil had been under some much pressure before. there is a lack of demand. we are trying to figure out how to work with venezuela and it looks like iran will continue to pump oil despite the heightened tensions. it is a very crowded, long

position, so i could see it raking lower. jonathan: you know what is about to happen. a load of people publishing their outlooks. can you help us understand how you get any visibility? what is the strategic view? >> where we going to be in defense spending? i think the ensuring is still real. it is still the overriding thing, so i think markets are little more volatile than the economy is. lisa: they are heading lower. does that mean that we had going to have slower growth but still a softer landing and that people

are going to be concerned about stocks, but it sets up a rally? >> as you start moving below, people start realizing, things are not good in the economy. white-collar workers are not doing as well as they were. you are seeing little cracks in the housing. by year end, we will be back on the discussion and talking about no more soft landing. have overdone it. lisa: one of the biggest drivers has been washington dc, and did -- and it does not look like it is changing. >> we get ahead of ourselves and i think one problem that we all have is that the bond market is so big. it is huge, but it is a fraction

of 25 trillion, so the ability to digest this -- there is no problem digesting this. market is pretty healthy. you are going to see people continued to add to that. it will be the risk side of things that get people more spooked. tom: we have seen it migrate. it makes things easier for everybody, right? >> it does, but they are still relatively high. we have not put a lot of that back. there is a lag time that is so long this time. more and more people are having to roll over their debt. i think we are just starting to see that slowdown impact.

we have this fake liquidity. it feels like the markets are super liquid, but the ability to go high or low is there. people were pushing on humans. people were getting stopped the other way. that is what we are trying to manage. jonathan: consumer balance sheets were stronger. everyone who wanted to remortgage turned down that debt. stan has been very critical of leadership of treasury over the last five years through that low interest rate. what are your thoughts on that? what do you think about that? >> i am always a strong believer.

probably a little hypothetical, but maybe they are way overweight. if you take a step back and think of it as governments, the u.s. governance is -- look at the large corporations. would corporate governance. they never would think about thinking, we are not going to pay our debt on time. it is starting to push may in commercial paper and moving. lisa: do you for see a time where apple can borrow? >> it really rarely happens, but i think you can see really tight spread compression at the front of the corporate bond curve.

jonathan: governance issues alone? say have a ton of cash. liquidity is not what it once was. i think this government issue will become a real thought. why would you -- >> for a long time they have had the privilege of acting recklessly. why is this so different? >> people are questioning this whole coalescing. i do not think it cracks this time, but i always go back to the great financial crisis. i feel that we have started this unwind and unless they get together, every time it will get ugly.

jonathan: welcome. your equity markets are just about positive. lisa has thoughts. looking at the price action. i have thoughts on that conference. >> i am thinking about it and thinking about when the privilege will run out. there is a question about a malicious spiral. if arlene costs are higher, it pushes on the string much more because the interest payments will be a significant portion of the annual gdp of this country. that is when things change a little bit. tom: robert schiffman is a jewel. amazon could issue $20 billion more that but does not need to.

that is the heart of the matter. i'm going to say you want to have a balance out there. like you said with the cfo of apple. they will choose what is the right time. jonathan: watch out for that conversation. , the situation in the national -- in the nation's capital. morning. -- good morning. ♪ ♪ at ameriprise financial, our advice is personalized, based on your goals, whatever they may be. all that planning has paid off.

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>> playing politics with irs funding is unacceptable.

cutting it would be damaging and irresponsible. the irs collects 96% of the federal government's revenue. this is the funding that enables our country to protect national security, provide social security and health care, and invest in our nation's infrastructure. jonathan: at an event to commemorate improvement. secretary yellen there. equities right now, totally unchanged. yields going nowhere. 66 on a 10 year. in the fx market, a little stronger most of the morning. $76 on wti. for brent crude, threatening to break low.

$80 and back in the 70's. lower at 1.4%. tom: there are some very subtle things here. i'm going to go the way you opened the show seven to eight days in a row. it is the quality and character of that equity joint. it is persistent -- it is a persistent shift. jonathan: we look at the move in yields and retake comfort. ultimately, he thinks that when you get time for 30, you start thinking about why you are lower.

you ultimately have to start thinking about why. you are thinking more about a slowdown in the economy. tom: if you get lower, the stag disinflation that i'm talking about, if that happens, it is not happen away from a magnificent seven. this is from a few years ago. thanks to our listeners, this is from a guy over a key tone. it involves gaseous matters that are ignited and undergo a humongous combustion after heating up to a certain temperature.

thank you. we really appreciate your research. the managing director had a public policy. the only one i can do this with. can you take the election results off and move it into a shutdown? can he make that exercise happen? >> thank you for not asking me a question about organic chemistry. i do think -- thank you for the lamp here. it is actually, democrats won a special election in rhode island. they have 213 seats in the house. republicans only have 221. the reason why this is important

is because that means that republicans can only lose three seats, three votes, and ordered to pass a funding bill to avoid a shutdown by next friday. it means that the margin of error is much more narrow for republicans. a speaker johnson already needed to thread a needle and that needlepoint has gotten even more narrow from the results from last night. tom: what will moderate republicans do? the republicans added a good night. how do they adapt to the office election? >> what we learned last night is that abortion rate very much still resonate. that was a takeaway way it

really emboldened turnout and it shows that this really is very much an issue, especially when it is on the ballot. many of these folks, particularly in districts that you mentioned, where there are republicans that are defending biden, you are going to hear a lot about abortion rights because of the results of last night, underscoring that this clearly is a voting issue for voters. what is it make the moderate republicans do? they are voting in lockstep. i think that will continue. the big question for markets is, is that enough? if they pass a partisan bill, we will see a shutdown next friday. as of now, it looks like they

are voting in a partisan way, which means a shutdown risk is increased over the last week or so. lisa: do markets care? >> if it is a temporary shutdown, then no. it was a more prolonged shutdown and it has impacts of many workers being furloughed and not collecting a paycheck. also, the data matters. that makes the fed's job a little bit harder. we see this term premium that you all have been talking about. i think you are right. if it is a short-term shutdown, the markets probably do not care , but it might weigh on -- the

competence around the political apparatus in washington dc. lisa: how much of a certain td think it is that we will see biden versus former president trump? how much will it color about other candidates in particular? >> with high conviction, biden will be the nominee for the democratic party. it just is not realistic at this point, nor is there any indication from the biden camp that he has any interest in dropping out or any intention of dropping out. he will be the democratic nominee again, assuming there is no health issue or what have you.

president trump obviously has a formidable lead in the polls, but his campaign is much more organized than it was in 2016, and they have been systematically changing the delicate -- the delegate rules in terms of how they allocate to his benefit. he is also changing the machinations behind the scene for how these are allocated. the fact that he has been changing these rules are to his benefit as well. a lot would have to happen over the next two months. what we can show is that voting behavior is the most important thing to look at. the polls are not always right. if trump wins all of those, that

he likely is going to be the nominee, but if somebody can contest one of those, it could easily become a two-person race. it is really a race for number two to be. i think we will see it being pretty nasty and ugly tonight. jonathan: good to catch up. tom: the actions at 1:00 p.m. and then ceiling the debate. jonathan: jp morgan, wells fargo -- all of that, going into the opening bell. this is bloomberg. ♪

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tom: lisa is waiting for the actions. jon ferro is in deep conversation. i was thinking dukes football, but we are coming up on eight 30 been, but there is no data. lisa: somebody has to fill the noise.

tom: three day marathon, if you well. what you do on a quiet week? do you slip and at 9:00? >> i wish. i listen to fed speeches. tom: do they believe in this fed? >> it depends. there are those who believe they are complete idiots and then those who think they are stupid. many think the fed is wrong about something. the general view is that they have to cut rates sometime next year and it is only a question of when,, how much and why.

some people on bloomberg saying it is time to start worrying about recession and then others think you are going to see inflation going down. they will have to loosen up. lisa: given that, people are ignoring what they had to say with respect as you where the balance of risks i. what are you listening to, with the big three speaking in the federal reserve, to understand what could shift their view about whether they had an inkling of whether the balance of risks has changed. >> i think we basically get a lot of sound and fury signifying nothing. six weeks before the next fed

meeting and a lot of data, but what everybody would find the most useful is how much data do they need to see in order to decide what their next moves are going to be. that is kind of an open question because the data is always backwards looking. they are looking at what might happen, so they are looking at forwards, futures and expectation at the same time they are looking at the data that comes in. they are trying to figure out where it is going. lisa: john was referencing this earlier. it was an earthquake. we heard it yesterday when he was speaking with us. he is not clear on why yields have gone up as much as they have and then come down. this is truly a sign of market dysfunction.

>> i think the they act -- they had to raise interest rates a lot. they finally decided to believe the fed. they were also -- hedge funds were piling in. it was a leverage short bet because of this. you get this outsized move that is an earthquake for bottom feeders. if it changes the game a little bit for the fed, but it is not a sign that things are not working. tom: to me, michael buyer is the most important vent speaker. much more on the financial bank, supervision side. what message does he want to convey to a commercial banking

system? >> they would push against the idea that the banking system is beleaguered. what they are looking at is a series of changes and essentially dodd-frank and the regulations. those take about a year to implement. he is out explaining what they are doing and what they are trying to do, and trying to win support for that. discussion came up overnight about whether we should see the nonbanks sector putting more regulations in place. that will be an issue, going forward. we do not have enough of a window. we could have a problem and not know it.

tom: how many fed speakers tomorrow? lisa: the big ones. at that imf panel, we do here from a more moderate speech. tom: macro strategist, you know where i am going. the calculation of the tb of moving part of the gdp. some form of disinflation. define it into 2024. >> i do not think anybody has talked about this, this morning, but there is actually a metric and the monthly job statistics called average weekly payrolls. it is a clumsy title for the sum of wage growth, job growth and

hours worked growth. that is a really close proxy for gdp. total spending and the economy. it printed zero in october. you have the unemployment rate that has moved up to 3.9% from a cycle low seeing in april and january. over a nine month interval. we have never seen it move up that was not associated with a business cycle peak or an economy already in recession. it is giving us a softer recession signal. it can tell us a lot about why the bond market is rallying. tom: how did the unemployment rate? year 4%.

i would suggest that we have a new regime where the fed will land a monetary policy. do we have a new regime in unemployment rates? 4.3%? >> it would be unprecedented because you continue to rise. usually, it is a little bit more in total. if we end up in a situation rate goes above, that is possible, but it is literally unprecedented. when you start to see it hook up words, it continues for a while and signals a recession that is not recognized right away. it starts to fall because the

fed is reluctant to follow suit. that is how you end up in a hard landing. reinforcing the message that the yield curve has been sending for over a year along with monetary growth, along with the tightening in lending standards. one of the loan officers -- all of the leading indicators have been suggesting that we are getting long in the tooth for the business cycle. the consensus view on wall street is that the soft landing is in the bag. it always looks like a soft landing before a recession. the unemployment rate is going up and you have a recession. lisa: there are so many companies that are raising prices and increasing volume.

think about all sorts of burgers and starbucks drinks. had he pushed back against that? >> a good point. there was a fear that earnings would crash this year, and it has not happened, but if we look at forward looking earnings, they have essentially gone nowhere since the summer of last year, yet the multiple was up three points. even after a rally in bonds, they are well above where they were midyear last year. the equity market has become more expensive, relative to fixed income. i think we have high hopes that the business cycle is going to be sustained, and eventually we will go into an upward profit cycle. i think those hopes will end up being dashed.

lisa: everyone was worried into 2023 and cut being wrong. why is this time different? >> it is interesting. there is quite a bit of confusion. some people have been quite bullish and it has been good if you are bullish on equities. it has been a narrow move upwards. we have not done much in terms of a weighted index. talking about the small caps underperforming and some of the groups that are tied closely to the economy in cyclical value. i think it is more confusion out there than tremendous conviction. forecasting is a tough is this. we started getting a lot of weakness.

if you just go with the historical parameters, certainly, that looked wrong when you had this huge gdp and riproaring market rally in s&p, yet as i mentioned earlier in the segment, we could be on the cusp of a business cycle peak. you have not written the entire story just yet. we will see how it unfolds, but there is room for debate. there always is. tom: the nasdaq floating around a little bit of red where the nasdaq -- the s&p 500 is up .2%. lisa: we have been talking about the strength and the labor market. american airlines is looking to offer $250,000 bonuses to pilots

from fedex and ups, who ditched those employees -- employers to go to american airlines. tom: they have been way out front on this story. i have trouble with it when i am on a small airplane, and the kids getting on -- can they drink at a bar? confidence building. lisa: that has been the issue, how do you get these people in? you have to ground planes and cancel certain flights. you are seeing this incredible bonus being offered. tom: every industry is different. we are still at a very low unemployment rate. i'm not sure i know what a high unemployment rate looks like anymore. lisa: it does tend to be asymmetric on the way up, but to what?

tom: stability on the tape right now. we are -- we are a solid six hours from the auction. what actually happens? lisa: 1:00 p.m.? a press release. there is a treaty immediately after the bonds are issued to the primary dealers, the direct bidders and indirect bidders. put out all the technicals. i can feel you falling asleep. tom: the treasury decides. good morning. ♪

>> i take a step back and look at the inflation meetings more broadly and it still looks like we are trending towards 3%, as

opposed to 2%. we thought growth would start to slow before and be surprised by the overall resilience. i think we will continue to see tight financial conditions, in order to bring inflation to the 2%. lisa: saying what a lot of fed officials have been saying recently. they have been surprised by the strength of the u.s. economy. john is preparing. i think it is amazing to see the sort of overlay on top of earnings that have actually been pretty decent. tom: i will go with that, but what we are going to talk about in commercial real estate is just flat out gloom. i do not know about the rest of you across the nation, but i meeting every transaction article that i can.

people love to talk about this. they are coming fast and furious right now, and that ed to template of gloom. lisa: some of the names moving beneath the surface. warner bros., we were talking about this earlier, how they didn't disappoint, in terms of a third-quarter loss. free cash flow is still stronger . though shares getting absolutely hammered, almost 10% ahead of what we are supposed to get ahead of the bell with disney. tom: that level with warner bros. is key. down to $9.53 as a low. that is really coming back. lisa: there is a question about how much stocks are getting punished. new york times shares are up because they reported a better

growth than expected. i wonder how much you start to see. consumers coalesce around paying for subscriptions, especially for cooking, wire cutter and other types of services. popping more than 16% after reporting bookings that beat estimates. i thought that was really interesting. maybe it was just a blip during the pandemic, and now, maybe not so much. tom: i think it is story by story. i would think within the swirl that we would have futures down a nice amount. this is day after day now. lisa: it is the longest streak of gains going back. around the world, but particularly in the markets, joining us to talk about how bad

of a time this is. i want to start their. there have been discussions around the number of leases. it is the pressure around office space in particular overstated right now or understated? >> thank you for having me on. when we look at what is going on in office, it is eerily similar to what happened. as you recall, everyone thought it was going to close. but what happened is, the roosevelt field or houston gallery is continued to excel. the same thing with the office. if you look at some of the fallout, they rejected a bunch of leases.

when you look in san francisco, when you look in new york, they have zero exposure now because they exited those reworked leases over the past couple of years. when you look at the fallout that will happen and you look at the major, the impact is negligible. what is really interesting is when you look at office, it is gravitating around central and you are seeing rent increase on park avenue. the dominant office will survive. the generic office is where the trouble is. lisa: so people have not been discerning enough to understand the winners versus the losers? >> absolutely.

they are starting to discern the difference between top-tier versus generic class a, class b, etc. tenants want great space with a lot of amenities, can lenient for commuters, and they want the capital wherewithal to invest in the properties. the brokers want to get paid a commission, and you are seeing that fallout. with their billion dollars a year, know that they can be there. the same is happening with other companies. tom: simon property group, indianapolis, 3000 employees. what is the guy from indiana university going to do? my history is fresh money always

comes in, but when does the freshman econ in? >> david loves cash flow. the reason they have done that is by investing shrewdly. he is very focused on investing. he has not bought anything on the outside. his focus has been investing with ai adding office and apartments. that is where he is focused, but given the challenges away, he can pick and choose. he is making a ton of money out of his portfolio, which is

actually small. only 200 or so mystic properties in total. a small powerhouse portfolio. tom: i get it. new york is its own, little weird place, real estate blood in the streets. back to when you are at the men, is it now a screaming by because of all the agony lisa was just framing? >> it has backed off a little bit, but the financing market is basically shut down. you walk into a bank and try to get into the construction mode, they will call the cops on you. the transaction market is almost on ice.

what is interesting, your like my first boss and have been around a number of decades. newsday is benefiting from a phenomenon that they have not had an a long time. low vacancy. that combination is really powerful, and you started the show saying, how is the credit going to work out? everyone was panicked. nobody can tell you what happened to that famous deal. stuff gets worked out. there will be pain and blood for sure, but if you look at the biggest and if it, it that lack of supply. that is a huge positive. we work is a tenant. but to be clear, thanks are not

in the business of running real estate. as long as it is a good asset with a good sponsor, they will work out a answer. there will be assets that go back to the lenders, where the economics do not exist. that is the stuff to worry about. but the vanderbilts, those big centers are going to be fine. when you look at where the value and real estate is, it is accruing at the top, but there will be blood and the blood will be generic and cents. tom: piper sandler on real estate investment trust. i took notes about that. it is an extraordinary day. $77 a barrel. please stay with us.

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jonathan: seven-day winning streak on the s&p 500. good morning, good morning. equities a little higher on the s&p. the countdown to the open starts now. >> everything you need to get set for the start of u.s. trading. this is " bloomberg: the open," with jonathan ferro. ♪ jonathan: live from new york, equities on the longest winning streak in two years. we will see if c