pop stuff. but what is performed today and our companies putting up good numbers that have been raising guidance have been raising fundamentals. >> when you have a productivity it is going to be what we do for hours on in. -- end. surge, like we are having right now, you can have the economy jonathan: when inflation was continue to be fairly strong while inflation continues to high, they had this ability to moderate. pick up prices. >> i don't understand the sticky inflation argument. >> all of the ingredients are there for a sustained expansion i think you are asking this of the u.s. economy. question because you know. >> it comes down to we are not slowing down. where is the slow down? even through last year where >> we are in the sweet spot. >> this is "bloomberg prices were rising, we saw a surveillance" with jonathan continue to focus and thinking ferro, lisa abramowicz, and

annmarie hordern. jonathan: good morning, good about strategies to expand margins. i am actually very optimistic morning. this is "bloomberg surveillance" that margins will grant you only alongside lisa abramowicz and -- gradually expand. annmarie hordern. the s&p positive by .3%. a two day losing streak on the s&p 500. the biggest one-day loss on the there is this major focus on s&p since the middle of expanding margins. february. the nasdaq 100 the biggest move lower since january. we have chairman powell volume lisa: your overweight risk one and volume two in the next 24 hours. lisa: i have to say about the assets piling on, shrugging off selloffs, is that a viable dip? all of the doubletalk. does it count as a dip? are they the toxic ones at a this is the conversation we will time of concern for a longer have with jay powell. the question is if his threshold has changed if the january cpi period of time? >> the have a significant concerned him in the way it seems to be concerning the market. jonathan: at 10:00 a.m. eastern portion of our portfolio in time, the services isn came out bonds. using more opportunity on the weaker than expected. credit side. the employment component come the appetizer for the payroll that said, there are more that support, back into negative territory. lisa: 48 from 50.5.

are attractive than others. when you look at some of the business orders there is more positive signs. we are seeing more alternatives if the employment is weaker, this speaks to the suspicion and opportunities as well. that so many people have raised on this show that things are weaker than they seem. take a look at some of the other indicators. it is not that great. we are going to get this okay y'all we got ten orders coming in... big orders! starting a business is never easy, but starting it eight months pregnant... this may be give them some fuel. that's a different story. i couldn't slow down. we were starting a business from the ground up. people were showing up left and right. and so did our business needs the chase ink card made it easy. when you go for something big like this, your kids see that. and they believe they can do the same. earn unlimited 1.5% cash back periodic pullback. on every purchase with the chase ink business unlimited card. make more of what's yours. jonathan: the days when steve had to go down to washington dc because there was no internet. lisa: i have been putting lisa: go to the public records. together a project. jonathan: i remember some great jonathan: so far february has not confirmed january going and stories about that. payrolls friday. before payrolls friday we need it would go to the decision and to talk about super tuesday and reality check wednesday for do you have any to put on the nikki haley. then run to the payphone. annmarie: she is at this moment undecided and what she will do gen z is probably thinking, what in the sense that her campaign list? >> of course. seems very combative talking are they talking about? about unity that isn't there payphone? a couple things really concerned chair powell, day one. within the republican party. me. she didn't have any campaign >> we have gotten strong data events last night or come out to one of the things i am focused speak. the question is if she will on is what is the true health of remain in this race. but we want to look at things she did win one state. not just one month but more holistically. obviously, we knew what super the u.s. consumer? tuesday with the. what you are seeing is inflation it was and i o-matic. that has come down a lot. it is trump and biden by the end they both have two handles on just low-end consumer and what of the month to shore this up. them.

nikki haley did win one state does discretionary demand look that is a lot of progress. like? which shows trump has work to do i am watching for the risk that ahead of november. jonathan: nikki haley plans to i worry about an impact on they are v.a. celebrating. suspend her republican i see that risk of acceleration presidential primary bid. overall spending. in a speech later this morning. they hold back on figuring out again as fairly low. jonathan: speaking and just over lisa: which some people have been waiting for. an hour. will she endorse donald trump for president? if she doesn't, does that create a problem for they say, we believe our policy who the next administration is him given that he is having going to be. i worry that could have a rate is in a tightening cycle. trouble swaying some moderate dampening effect. voters? annmarie: this would create a i worry a decent amount about it would likely be appropriate the impact of the geopolitical problem for him. to begin dialing back sometime interestingly, to encompass the tensions having on this year. entire republican party, if you multinationals. ongoing progress towards look at some of these numbers he is losing even 40% already he does this take the enthusiasm inflation objective is not assured. out of nasdaq active not fully. needs to bring in some of those steve, we want to talk about the either fiscally conservative jonathan: credit where it is individuals, more moderate next couple hours on capitol hill. republicans. i imagine he is going to want due. her endorsement. u.s. up by 6.5%. steve: the problem becomes mangy last night he didn't mention her get off into the weeds, when he name. he pivoted directly to biden and the presidential election. what was it that you liked about is answering a question and jonathan: hardly a shocker. starts to deviate from the japanese equities? script, then the jerome powell according to people familiar what do you still like about comes out that the market loves. with her plant speaking to the japan? >> we have seen a bunch of small

wall street journal nikki the one that wants to maximize green shoots in the space. haley plans to suspend her bid welfare and likes the idea of in a speech later today. if you looking for price action, keeping the market tight, as long as the markets allow them this is the s&p 500. to do it. equity futures on the s&p are japanese equities have been positive by .3%. under loved for some time. we continue to see stronger the market inflation expectation into the bond market, yields is still anchored. growth to boost our earnings. yesterday lower in this morning it is more likely that he was a little higher by not even a you towards two rather than basis point. 4.1 584. coming up, i get cap tech slumps three or four. we remain hopeful that we will continue to see a change. it is more likely his insane ahead of chairman powell's nature. jonathan: you have touched on capitol hill. donald trump absolutely they are overweight by a long something very revealing. stretch. are you saying that he wants to dominates super tuesday. make people happy? nikki haley heads to the exit. i think japan continues to bear leland miller as the company some fruit. looks to defend they loftily 5% jonathan: some pretty decent steve: the dual mandate demands growth target. markets are bracing for day one fruit, for sure. welfare. of chair powell testimony on capitol hill. it is maximizing social welfare. u.s. equities are looking to bounce back after selloff across he takes that seriously. mecca cap tech. let's look at where we are. wanting to diversify from the >> nikki haley is set to end her the labor market is tight. mag seven saying, yes the stocks campaign. have a market way inflation are richly valued, but all or nothing makes less sense than

periodic rebalancing in the expectations are low. interest of keeping haley is due to speak at 10:00 concentration risk in your own why wouldn't you be happy? portfolios at day. there is a wide array of stock a.m. eastern. this is a bit of a victory lap stealthily performing better for them. they are getting what they want. this year. it has been way too long since mining all races except for we have done this in person. vermont. lisa: i feel like this is kabuki >> i don't think we even heard -- theater. of the word covid the last time an electricity tower halted i was sitting with you. why does no one care about this i'm so happy to be with you. production. particular testimony? the company says they do not know when they will resume. jonathan: we are happy to leave that in the past. tech has been absolutely dominating. steve: we know that at the end of the day -- at that meeting, we are going to have economic what is the signal that you're projections. taking away from the recent price action? >> it is a bull market but may house speaker mike johnson -- a lot of what comes out of this is believed to be old be more of a duck market. information. the michael k line of calm on the surface and paddling like the dickens underneath. a few weeks from now, we will be there has been a lot of churn cutting new ground. they will meet with johnson privately before president underneath. you have had interesting biden's address. he was detained almost a year breakouts in areas outside of ago. the questions they want us to the dominant conversation, like answer -- everyone knows and is the u.s. government has industrials within financials. waiting for that. designated him as illegally it is not just large to small. this is kind of like responding

i think that there are a lot of investors and a lot of money detained. to old news. jonathan: adp payrolls data and we know the labor market was that seems to be itching to find the big event on friday. opportunities outside of those tight, so they will be helping dominant names. >> what we expect to get is a which are not as dominant even numbers. more -- anymore. lisa: then what will jolt this tesla has been leapfrogged. sequential calling from last month, but it is still robust market? payroll print. jonathan: you know the one that you have fed officials who are jonathan: the moves you're seeing elsewhere, is it basically not telling us anything. sufficient to support the index? liz ann: it is a start. what will give us some lodestar? people say does not really matter and it depends on what if you go back to october of they do, that is coming up next. 2022, the low, that was a week, this is bloomberg. ♪ steve: i do not think you are going to get that until you get a day marked by indexes taking closer to the results of the election. out there prior june lows. the indexes were down by many of it is during the period that we the same names that supported had during george bush senior's the indexes on the way up. the october low in 2022, you had term. much improved breath under the surface. the market kept real term rates high. and that is not bad to say. the general soldiers analogy. even if some of the generals the reality is that when bill have moved away from the front, clinton came along, suddenly we all carried. if you have more soldiers moving up -- i still think you want to

stay up in quality. real rates are very low. particularly less well-capitalized companies, zombie companies at the mercy of what goes on with interest when we get into the narrative rates, obviously. all else equals a decent sign for the market. lisa: yesterday was fascinating of what will happen with the fiscal policy with the next to me. in some ways the week started at administration and we began to understand that they are going 10:00 a.m.. to spend money, that is when i headline numbers weaker than expected. bonds bid, stocks sold off. think the veal yield could turn bad news is bad news seems to be around and say, wait a second, a new dynamic. do think the best case for there is a problem. annmarie: should jay powell also stocks might be fed not cutting late on whether to cut rates? rates because the economy is too strong and they can keep zipping along? liz ann: you are right. that is not a perspective thing. to some degree that's what's steve: i think that they want to happened. cut rates. the market solely moving on the prospects of fed cutting, yet we but i do not think they are in a have gone through the pattern of rush to do it. taking march off of the table, maybe even may off of the table, i think you wind up in an shrinking the rate cuts down to environment where we probably three or so consistent with the fed. spend all year pushing out the rate cuts.

i'm not sure that the market is not still over its skis with regards to that, but you might be right. there is the nuance of the more significant weakness if it shows i have none priced in. up in things like employment. we will see what friday brings, but you saw it in the isms. how could i forget how many they are putting in? the data is just not there. jonathan: joining with steve. lisa: i am wondering when they care, but will it take to care in terms of level? lisa: it is a big week on many fronts. the state of the union on steve: if you look at where you thursday, jobs report on friday, -- real yields should be, as a talk from jay powell, morgan stanley came out with a paper saying fiscal policy is likely to be more important than monetary policy and explained he liked stocks because of the fiscal push but doesn't like bonds because that will be opposed to 1.6 trillion, you are hammered by some of the growth jonathan: futures positive by and priced to perfection types of assets. do you think it's the fiscal looking at at least 100 basis .5%. that's driving a lot of the nasdaq up by 0.8%. growth now and the future upside points higher. to some of the equities? liz ann: i would maybe replace a in the bond market, the scores eventually, there will be that step up. lot with some. right now the biggest risk the going in look like this. market faces is that 2% isn't i think the fiscal impuls -- really the real target. impulse is there but wouldn't 45232.

the jobs data. maybe they are willing to accept give it a lot of credit for strengthening the economy. 2.5. then again, the curves may >> coming in a little lower than consumption is 68% of gdp, so anticipated. that will be the big driver. i think what is most important steepen from the long and rather this week isn't the jobs report than the front and. from the headline perspective, but the innards of the jobs 140 thousand jobs in is what that is the other short-term report. they see were created in the risk. jonathan: this was great. to your point, lisa, the metrics month of february. like ours works the differential great to see you. between the establishment and from 107, which was the initial print last time. no rate cuts in 2024. household survey. what you pick up in the the lineup looks like this. household survey in terms of full-time versus part-time. is it more part time for economic reasons? christina, the brilliant, the labor force participation rates? they are not going to match up legendary -- i think with a fine tooth -- i exactly. that is tomorrow. think it is fine tooth comb chairman powell coming later analysis time with these data this morning from new york city. points. jonathan: talking about 107,000 last time. this was bloomberg surveillance. yesterday hours worked. ♪ if you want a sneak peek, 200k. the other news is the new pay numbers. the headline number. can you imagine that comes in a little going into friday after the read yesterday? 5.1% for job changes. a lot of slowing in that. lisa: this is the confusion.

some say that it is a head fake we will see how this compares. and you can't trust one data point. others say it was a seasonal issue in january. i read reports that are the fed will be looking for completely at odds and basically number is more like adp. leave me none the wiser. jonathan: the last jobs report jonathan: the ultimate takeaway is, there is nothing to see was 350 three, ridiculous. here. we priced the fed aggressively, i will turn it to the bond equity markets held up. market briefly. rv basically overestimating or down about a basis point. have overdone the importance of monetary policy to the market given what has developed over the last two months? liz ann: maybe, but first of all more instructive is the data i think that the fed is in a little bit of a pickle here. that we got yesterday. they are trying to nuance things the employment component of it around long and variable lags. drops back into contraction territory. i thought it was interesting when not the press >> it is important signal. conference but the 60 minutes interview when powell instead of emphasizing rates of change he cited the 12 month change. the might of been a more the hiring process has leveled quantitative way to say that we aren't ready yet. we want to give this more time. and might be frozen at this

in the case of core pce and cpi point. on a 12 month change basis, they of course, we have seen negative numbers. are not anywhere near the fed's target with the three-month and six-month having back again, you they were hiring anybody who would walk in the door and now have the likelihood of the 12 month turning back up. it seems they have probably filled up there payrolls and jonathan: would you expect from waiting to see what happens with him today? i frame this as a grilling on the economy. capitol hill but then have to interesting number out this remember that sometimes it's not. morning, the business roundtable it is just hours and hours of ceo confidence level reached its political testimony from highest in two years. lawmakers. maybe we will see it picking up again if attitudes are any liz ann: you put a microphone in indication. front of them and as an observer lisa: let's talk about the you think, is there a question anywhere? anywhere, a question? given it is in advance of the whispers given conflicting data jobs report and in advance of next week's epi, ppi, i don't with respect to the labor market. how has that affected the whisper number when we caught expect anything to be terribly market moving, but i wouldn't be surprised, assuming it gets to the point they ask him them saying there are reasons to think it will be a really positive number? questions, they will probably >> is interesting. bring politics into the mix and ask about the election.

have seen the whisper number lisa: you have republicans and significantly higher than the democrats pushing for rate cuts forecast number. more aggressively for different reasons and in different ways. that is not the case this time. at the same time, they are trying to message inflation. slightly above where the we get another kind of 60 forecast of the economist is. minutes speech from him we may be seeing them coming where he comes out and says together in terms of this idea people are feeling pain, we understand that pain, we are of slowing. being disciplined? or does he say market conditions matter and we are taking that whether we see a significant into effect, which is what a lot decline or 200 or over, both of of people want to hear? liz ann: market conditions those outcomes are not what the matter but one thing that powell fed is wanting to see. has emphasized, less recently, if you are looking for a hawkish but i attended the infamous signal, it would be the strength lunch in december 2018 at the of payrolls. lisa: we get a host of data and economic club of new york, and it was what everyone focused on was that he backpedaled from people tell us why it does not matter. when i was your age, we never had anything like this. what he said in september of what? wifi? that year. does the testimony matter? wifi that works all over the house, he specifically said something even the basement. that i thought was more the basement. so i can finally throw that party... and invite shannon barnes. a lot of people i saying there dream do come true. xfinity gives you reliable wifi with wall-to-wall coverage on all your devices, even when everyone is online. is nothing to see here. interesting. essentially, the fed's job isn't maybe we'll even get married one day. to step in because i financial i wonder what i will be doing? market volatility. probably still living here with mom and dad. if it threatens financial system fast reliable speeds right where you need them. that's wall-to-wall wifi on the xfinity 10g network.

stability that's different, but >> there is no percentage for ♪ >> it was a poor, not a panic i think that he tried to squash the notion of the fed simply them to change that the fed has yesterday we lift this morning. adopted. specific to say the stock market they have basically said the technologies on the up. going down unless it starts to same thing, we need more and powell leaves the door open be a concern about the financial evidence that it is going down. system and/or its plumbing. for the rate cuts. now, what we see in to you and it will be interesting to see if >> everything you need to get he makes any comments of that day? ilk today. set for the start of u.s. jonathan: thank you, you will every once in a while, something drops. trading. this is bloomberg "the open" you have to pay attention. with jonathan ferro. stick with us. to get you up to speed on some jonathan: mike, thank you. news, the wall street journal months ago reporting nikki haley plans to suspend her stay close. presidential primary bed in a speech this morning. the last few times we have had confirming here we will get those remarks in charleston at the testimony, the remarks have 10:00 a.m. eastern. annmarie: reading through the been released around 8:30. report, haley will not announce an endorsement wednesday and will sound the sidelines. we will catch up with him again. it is important for trump that the adp report. she drops out because she is bringing in campaign money and he wants that to come to him. the war chest that president biden is able to amass versus 150 was the estimate. donald trump, and he is using a a revised 111.

lot to pay off his legal fees. with her out of the race that loosens up some donors to pivot to him and he can ramp on the nasdaq, higher than .9. up. maybe a little bit of an jonathan: angry futures on the appetizing. s&p are posited by .3% -- jobless claims coming tomorrow. here's your bloomberg brief with dani burger. even with that negative print, dani: president joe biden and the employment component, republican front runner donald payrolls estimate can change. trump more clearly set for a lisa: we have heard that, that rematch in the general election after the pair swept the super tuesday primary polls. the expectation is stronger than some people i even expecting. is services expected rather than a real test to the overall economy? nikki haley managed a token victory in vermont overnight jonathan: let's get reaction to leaving former president trump with the lions share of republican delegates. the wall street journal reported these job numbers. that haley plans to suspend her campaign in a speech later this your thoughts on what we heard morning, making the tie up even more clear. bloomberg learned the u.k. x chancellor jeremy hunt plans to cut two percentage points often yesterday and what we are national security stacks as he unveiled his budget today looking for on friday. >> i agree with what you said despite prime minister sunak's preference for more expensive

cuts to income tax. before. especially since it is usually hunt will deliver his statement later this morning. morgan stanley laid off 9% of overshadowed by the payrolls report. its asset management business unit in china according to even if we get a 300 print on reuters. the actions are said to have started in december and will impact only 15 employees but payrolls, that will catch some china's economy has attention, but it is the wage data. been facing multiple headwinds. all of that means that there is what is propping up the economy pressure on its markets and $3.8 trillion funds sector. is consumer spending. that is your bloomberg brief. jonathan: coming up next, donald as long as they continue to get raises and disposable income, trump absolutely dominating on super tuesday. they will have a large portion mr. trump: they call it super of wage gains. tuesday for a reason. this is a big one. this is an amazing night and an that is something that will need amazing day. jonathan: that conversation to be addressed by chair powell. coming up next. from new york city this morning, we have gotten a preview of good morning. ♪ those prepared remarks, but the the all new godaddy airo helps you get your business online in minutes cuban day what that -- what with the power of ai... matters. ...with a perfect name, a great logo,

and a beautiful website. just start with a domain, a few clicks, it is usually some off-the-cuff comment that occurs they asked a and you're in business. make now the future at godaddy.com/airo crazy question. >> you get the committee chair and the committee vice chair. powell does his opening commentary that we once had for a couple hours by then. 10:30 is when the first round will start. lisa: that is when he will be sufficiently tired. this is based on testimony that people are not expecting a law firm. >> i think chair powell will probably be a little bit more j.p. morgan wealth management knows it's easy cautious about when they will to get lost in investment research. start cutting interest rate.

get help with j.p morgan personal advisors. hey, david! ready to get started? it would take him being much work with advisors who create a plan with you, more dovish. and help you find the right investments. in order to get below 4%, i so great getting to know you, let's take a look think you would have to suggest at your new investment plan. that they see more pronounced ok, great! slowing in the economy than most this should have you moving in the right direction. of us in the data coming out. thanks jen. get ongoing advice; and manage your investments in the chase mobile app. one of the interesting things that has been going on that we have highlighted is that you have the hard data. they look pretty good, whereas the survey data, the way people feel has started to roll over a little bit. people do not necessarily do what they say and people are still spending money and still have jobs, even if it is not the same pace as a year ago. i suspect for the long end of the treasury market, we will hang out here.

the two year yield will go up and down. that is where you will see the front can be more volatile. jonathan: we typically frame this -- how political will this jonathan: chairman powell coming be head of the state of the union? >> i think it will be pretty up later this morning. the s&p 500, equity futures are political. posited by .4%, yields higher by this morning you had a letter from goes republican senators. almost one basis point, 4.16 on the house members tend to be the 10-year. donald trump absolutely dominating on super tuesday. very political. in fact, it usually takes three mr. trump: they call it super tuesday for a reason. this is a big one. minutes for someone to answer a this is an amazing night and an question. amazing day. we have a great republican party with tremendous talent, and we the senate tends to be a little want to have unity, and we are going to have unity. more highbrow. and we have no choice, because he might actually provide more november 5 is right around the interesting information. corner. november 5 is going to go down as the single most important day

in the history of our country. jonathan: they have campaign videos to make. jonathan: here's the latest, thank you. nikki haley is expected to exit the race for the gop nomination after a dominating performance once again from the former president. just fighting this one. the wall street journal first mr. powell goes to washington reported the news and bloomberg and this is what he will do. reporting haley will make remarks from charleston, south he is likely to push back against calls by emphasizing carolina at 10:00 a.m. eastern. greg, that news hardly a that the fed plans to cut rates. surprise. your thoughts? guarding against week celebration risks. greg: i thought it was going to lisa: would be democrats and come this week. it isn't a big surprise, jon. republicans on the fringes? we want to see if she endorses trump or not. at a certain point, they start i think it will be very tepid or to converge. jonathan: a couple more hikes she won't. the other story is the state of the union on thursday. going into the election. i did not know if those calls joe biden needs to hit the ball will work. out of the park. coming up, tom looking ahead to if he stumbles or gets his words the payroll report and a preview wrong it would be disastrous. of chairman powell. this is bloomberg. this is ♪ his big chance to be in front of a huge audience. he needs to show that he still

is viable as a candidate. annmarie: trump began february with $30 million on hand and the biden campaign north of $30 million. with nikki haley dropping out, to her donors flock to the former president? greg: they could. there are two big factors trump has to worry about. one is money. will he raid the republican coffers for his legal fees? the other is abortion. it has been underemphasized. if you look at what has happened in the last few months in states like kansas and ohio, the public thinks that the republicans are two strike on abortion. if they don't change their tune that could be an albatross for trump. annmarie: we heard from haley, she didn't speak but her campaign said that unity isn't achieved by simply claiming it in rebuttal to what the former president said at mar-a-lago. she has a point to when you look at the percentage of individuals to voting for her. in some states it is 40%. how does trump closed that gap

in november? greg: i would guess that a trump emissary in the next few days will go to her and say, what do you want? what can we do? on issues like abortion, issues for suburban moderates, will be on the table. maybe a cabinet position, although i don't see her doing that. i think that she will have a list of things that she wants. lisa: if she doesn't endorse donald trump, how do you view his performance yesterday in terms of spinning forward to what his biggest challenge will be in the general? greg: he hasn't defined much, has he? i'm not sure what his position is on the middle east, israel and gaza. he hasn't said anything. that is another opportunity for biden. frankly i think it is a little underrated now. biden could go to trump and say what is your prescription on

obamacare? he wants to kill obamacare. what you want to replace it with? things that trump has talked about generally he will have to pin down at some point. lisa: terry haynes came out yesterday and said it's not just that it will be a rerun of what we've seen before, we have known that. we will probably see a split congress. we will probably get no physical rightsizing, no tax law permanence, no relief. do you agree this is the take away where people are increasingly talking about these issues and if we could still shift at the white house? greg: the market is like gridlock from time to time. i don't totally rule that out. not awful lot depends on the senate. we saw another change last night with kyrsten sinema announcing she will not seek reelection. i am not positive that the senate will be totally inept. they might get some things done. i don't rule out the republicans

taking over the senate. jonathan: wonderful to hear your thoughts. waiting for that address from nikki haley later this morning in charleston, south carolina. you know how this works. i apologize to our guest because we are about to talk about politics. markets, double-digit losses on tesla and double-digit losses on apple. a piece of that puzzle is china and a piece of the china puzzle is potentially rising nationalism in the mainland. how complicated will likely come from multinationals given what may happen later this year? liz ann: it isn't just tesla and apple, but also that has been her uncle's unhappy. i'm sensing an underlying issue. it's t-mobile. it started when we got him under a new plan. but then they unexpectedly unraveled their "price lock" guarantee. which has made him, a bit... unruly. you called yourself the "un-carrier". you sing about "price lock" on those commercials. "the price lock, the price lock..." so, if you could change the price, change the name! it's not a lock, i know a lock. so how can we undo the damage? we could all unsubscribe and switch to xfinity. their connection is unreal. and we could all un-experience this whole session. okay, that's uncalled for. jonathan: the adp report already very stale came in at 140. drugged down. two days ago i looked through a closing basis and all three of those were ranked in the bottom quintile of year-to-date up by 0.8% into the bond market. performance in terms of the s&p 500. i think that it really does yields lower yesterday on that depend. read. the employment component is -- it is very much the tie to china, either from a sourcing component negative.

perspective or from a customer with those prepared remarks, perspective. you guys know that i don't cover individual stocks, but i think they have dropped again. that is one of the reasons for mike mckee is standing by to the speed with which companies break it down for us. are shifting their attention. mike: you are right about when especially to places like india. they were releasing the annmarie: we had adm say that testimony. the chip that they produced gets nothing wall street to trade on. around the export controls and this is all old. will not get the license to go to china, whether it is biden or they are saying with and send trump i will come back to for a long time. we believe our policy rate is at politics.do you think the direction of peak for this tightening cycle. travel is the same when it comes to beijing and washington? liz ann: well, the rhetoric if the economy broadens, we may coming out of trump and the campaign has been even more begin dialing back. aggressiveness on tariffs. i think that that further but ongoing progress towards the divides the world into the 2% inflation objective is not assured. multipolar structure that seems he does give a little bit of a to be underway anyway as it brief outline of where the relates to other things, economy is. including the wars going on and to some degree the de but there is father to go before they consider the idea of rate

cuts. cutting too soon risks inflation -dollarization, not broadly but to oil. oil being transacted in getting out of control again, cutting recessions. currencies rather than the dollar. i think that adds to the story they will do their best to stay on top of the economy and make of a very different world order. jonathan: what do you think sure they time this correctly. trump volume 2 is? nothing about the fed she. liz ann: 60% tariffs across the they are on autopilot. board. i think that is obviously to the it will be the q&a that provides detriment of smaller companies any news. that don't have the ability to be as nimble and shift, whether jonathan: starting with stocks, it is sourcing or manufacturing. a lot of that has been underway equities are still positive. anyway. i wouldn't generalize and say a bounce back from the losses of just small caps. yesterday. to use my finetooth comb analogy yields were a little bit lower. again, i think looking at individual stocks these days you mike, this line, this word, have to have the finetooth comb to see. jonathan: the treasury market. confidence is a word that he used back at the end of january. do you think he has gained lisa: this is essentially the confidence or lost confidence?

question. can the u.s. face that because they are the reserve currency of the world? when you talk about d mike: i think he might be dollarization this that give questioning where we might be enough pressure? going. so we are not looking ahead to see if it will -- ok. i think he is saying the quiet jonathan: it is awesome to see part out loud that there are you. signs that we may see some more strength going forward and that could push inflation up. from socgen she said i haven't the cpi coming in hotter than seen you for four years. i've seen you every month, it expected. they are uncertain about that, just seems so long. we will talk china. if it develops into a trend. it has only been one month. china looks to defend lofty they will not really question goals for growth. their assumptions. that conversation is around the e corner. lisa: it does feel like the fed positive .3%. reserve and fed chair powell from new york, this is have been deemphasized in a market looking beyond to the bloomberg. ♪ data and other types of factors (♪♪) and spending. would you agree with that? mike: i think there is an awful lot going on, on capitol hill. the first law of thermodynamics states they are dealing with the budget that energy cannot be created or destroyed. and the election year, so yes, (♪♪) the fed has been deemphasized.

but it can be passed on to the next generation. it may be important for the political standpoint. they do not want to be (♪♪) aggressively cutting rates into the election. democrats do not want the fed on hold for too long. what the state of the economy -- this will be one of those cases where whatever party you are income you will criticize the other party but go home and talk about things being pretty good in your district. jonathan: playing politics. breaking it all down for you. about 18 minutes ago, we had the data that came in at 100 40,000. the estimate was 150. the previous number, 100 11. not event. a pretty decent. what does it mean for friday? not much at all. i think he's having a midlife crisis 200 k is the meter estimate. but it ci'm not.ssed on to the next generation.

you got us t-mobile home internet lite. we have heard from chairman after a week of streaming they knocked us down... powell and the opening remarks. ...to dial up speeds. like from the 90s. we believe that our policy rate is at the peak for this timing great times. all i can do say is that my life is pre-- cycle. it would likely be appropriate to begin dialing back sometime i like watching the puddles gather rain. this year. the economic outlook is -hey, your mom and i procreated to that song. uncertain. oh, ew! i think you've said enough. this was always about gaining why don't we just switch to xfinity like everyone else? confidence. then you would know what year it was. he talked about that at the end i know what year it is. of january. we have had some data and we can debate what agree -- what degree , but it may have not their confidence a little bit. he said: they could talk about policy rate taking another rate hike off the type -- often people. otherwise, this is the calibration that they have been making and it is not telling us a lot of new information. jonathan: you have had time to digest this comments from chairman fed powell -- fed

chairman powell. >> i think you set it up perfectly. is there really a takeaway? adp is that tree that falls in the forest, that nobody hears. there is some interesting stuff to talk about. i think powell went right down the middle. there was no reason to break new ground. i would love to make this an engaging and riproaring conversation. but we would have to stretch. lisa: this is interesting, end and of itself. i remember when the fed was everything and that was all people tracked. it drove all economic thought. have we moved beyond that? it did not matter in terms of restrictiveness and it is not going to matter if they cut by 25 to 50 basis points.

>> i think this is an important idea, lisa. it is something that we have been kicking around. if i think about new-home sales, they are hanging in there. they are hanging in there for an important reason. they are doing these pay downs. if you speak to our homebuilding jonathan: the day really picks up later this morning with team, but they would tell you chairman powell, volume one onto is, it seems like there is some volume two tomorrow. equities up 0.4%. magical number around 6%. if you offer that to a potential seven on the nasdaq. a bounce back after two days of buyer, they kind of leap at that. losses on the s&p with the i think, mortgage rates on biggest one-day slide going back to the middle of last month on the s&p 500. average around 7% right now. the nasdaq the biggest one-day drop since the end of january. if the homebuilders are an tesla in discretionary. example, if the fed cuts rates, china coming out the growth target, hardly anyone believed. we are looking for 75 basis lower again after they got the points. ism. i think that the ism is the real we are at this magical number.

news yesterday morning at 10:00 a.m. eastern. let's maybe get some home equity they didn't confirm the january boom with yields lower across the curve. extraction. think about the equity sitting 4.5640. lisa: it was disappointing but it was more the employment out there, idle and locked component going into because rates are so high. that is where the rubber meets contractionary territory. the road. the prices paid component coming in less hot than expected. lisa: given that, do you think it is the two-pronged approach. the risk is that much greater? maybe there is weakness under the hood and maybe the inflation that we saw on the previous ppi was a blip. jonathan: let's turn to fx. and with the economy being fueled by fiscal stimulus and people reached out yesterday balance sheets that are pretty good? saying, why aren't you talking >> we have been in the soft about gold? the answer is, no. landing camp. gold is at an all-time high and printed another all-time high earlier in the session. about eight months, maybe a little longer than that. what i would say is, we were thinking about soft landing. but you are easily in the upper end of that range.

not making any wholesale changes, just acknowledging that things are a little bit better. lisa: this goes to the question of, what is the implication for monetary policy? the idea that they will be i think it will be a good year cutting rates and you can get more value in non-interest-bearing commodity? is that the idea? or inflation will pick back up from a growth perspective. because the fed will cut rates more aggressively than perhaps the market is suggesting? it is worth remembering. i don't know. take your pick. maybe because it is a bitcoin alternative. jonathan: the currency pair is it is being driven by credit positive by point 1%, slightly stronger pound against the u.s. dollar. usage and a drawdown in the later this morning, 7:15 muscle. eastern, we will hand over programming from new york to we all appreciate that it is london. francine lacqua will give you a long since gone. budget program at 7:15 eastern. if you look at that relative -- everyone outside of the u.k. is stuck with us and we will talk about everything else including the chairman of the federal you are getting below that now. reserve. investors are waiting for day one of chair powell's testimony on capitol hill in front of the i say all of that to highlight, house where markets are expecting a less dovish message. how sustainable is that? the employment data coming at can you continue to sustain that 8:15 eastern ahead of powell's over the next couple of years? testimony at 10:00. you sort of can. chair powell heads to the senate tomorrow before the u.s. you drift into that saving payrolls report on friday. muscle and you can continue to we touched briefly on this. use credit. will the data confirm the boom for the next couple of years, i

or not and give the chair of the federal reserve more space to think it is easy to make that breathe? lisa: i like that you point case. straight to the data and not i think the fed is acutely aware of that. what powell will say because that is how deemphasized he feels to everyone who will come out and try to say words and not i do not think of that as try to say much of anything and then we will look to the data. anything other than the fed that will ultimately be the question. we see the weakness that the ism rightsizing policy, given the fact that it has slowed. data seemed to suggest transfer or or another 300 something lisa: this is really where i was trend, what about revisions come about hours worked? are people working more hours going to go. which means that all of those you are referring to consumer fears that companies are cutting back little bits around the credit, but really it is the edges to not lay people off is kind of fiction? government that has been driving jonathan: he has to face down a lot of that. when is that a problem when it some dumb cuts in that room tomorrow who have written him a comes to the bond market and letter saying we want rate cuts understanding investor pushback? and we want them yesterday. >> the reality is that this is annmarie: they have been talking about this since january. one of the benefits. and they are talking about you get a pass. housing costs and how this is we have not really seen any weighing on the average american. notable backing away at-large

the chair of the house financial from treasuries. services said the biggest thing in front of the fed is in a quarter-point this way or that this was one of the big one but the larger view of capital for bigger banks. takeaways. democrats will hone in on i'm not saying that is housing costs and what is necessarily the right approach sitting everyday americans with to managing your fiscal position rate hikes and republicans will go to capital rules on big banks. . but this is what is happening. we know what the politicians are going to say and for jay powell i think it will be very he will just try to not make news. jonathan: we will talk about difficult for fiscal policy to trumpflation, corporate price provide any meaningful trust. gouging, corporate greed -- short of providing consumers frank flake in, corporate price gouging, corporate greed. lisa: roll out some kind of with direct stimulus. powerpoint. i do not know that you get a lot of additional trust over the it will be let me explain how coming year. monetary policy works, etc., etc.. annmarie: what would happen annmarie: shrinkflation will be first? would fiscal policy be changed because of an issue or mistake a big topic. that could happen in the bond market? he will hone in on this is the problem for big companies. >> it is something that everyone

there are price gouging. yes, we know that you're still should keep in mind. feeling inflation but it's not we sessions make fast friends my fault. with politicians. that is almost always the case, yet we do not have one built in right now. jonathan: the call coming we have relatively elevated probability of one. as markets are pricing in a 50% chance of a hike. that elevated proposition is the bank's head of global markets making the bank the because we are acknowledging hike again by october at that maybe there is a risk that the latest. the compare and contrast is the fed does not cut at all. always striking. if that risk does come to talking about cuts in american waiting for the first hike from the boj. lisa: to get to zero point 25% fruition, you have to acknowledge that no politician, whether democrat or republican by october. some say to do that you have to likes to endure recession. start now because it will be tough to get there. that is the argument here. that could feed the fiscal beast they are in a world of their a little bit more. own. what has been taken off the table is the risk they will do that is the tail risk that i would stress. this rapidly because it doesn't happen with the bank of japan. that is not where we see things shaping out. jonathan: what are you in the either way, it doesn't seem like markets are expecting any kind of extreme action. team looking for?

jonathan: i know you know this, what should we be focused on? but this is a multi-decade effort. i know you know this, but i tom: it could be a solid number. think this is an important moment for japanese authorities. lisa: an incredibly important it was above consensus, last time i looked. market and why people have the i would stress that i think confidence to go to japanese equities. it is important to frame how there are some seasonal ludicrous it is we are talking about raising rates from perkiness going on. negative to not negative. this is what we are talking about. taking a step back, this is an he probably started to scale back. amazing, pivotal moment that a i hate average hourly earnings. lot of people are recognizing with a new dynamism in a country it is such an incomplete measure. that was left behind and had a law to forgotten decades. jonathan: i am with you. average weekly earnings is a we will park that there. better way of thinking about china putting back -- pushing this. it takes into account not just average hourly earnings but how back amid skepticism saying the many hours you worked. if you had a set up where hours 5% growth target is attainable through "vigorous effort." fell by more than average earnings growth, average weekly china's facebook ceo calling the earnings was down. that is what happened last month. number useless saying, 5% is a to me, that is the right way to think about it. completely useless number for jonathan: love that. markets to twilio with, largely because hitting it is almost good to see you.

breaking down the jobs data. totally incompatible with 140, little earlier this wet assets are promising to do morning. pushing against the notion they the estimate was 150. will prioritize stronger growth. looking ahead to payrolls later the gdp growth target of 5% makes us dumber on china, not this week. two hundred k is the medium. informed. that is the consensus call. we are looking at 250. the obvious question and the one that you can help us with, what we have some prepared remarks is the purpose of a gdp target from chairman powell as well. in president xi's china? day one in front of the house leland: there used to be a financial service committee a purpose setting the goal for output and the government would little later this morning. day two to mile in front of the grow and juice the economy to committee. here are some quotes for you. hit that target. we believe that our policy is likely at its peak for this it is just a relic that they're tightening cycle. having a hard time getting away it would likely be appropriate from. i think that the reality behind to start dialing back policy the scenes is that they are envisioning a world as we have restraint at some point this year. been talking about for the past 10 years on your show that is ongoing progress towards our going to go from six, to 5, 24, inflation objective is not assured. he said, this word confidence coming from the chairman or the 23, 22, to one low levels of lack thereof. lisa: member all those times we growth. they don't know what to do with

that. were asking if anybody would they are gearing for a slower, give insight into that? the answer was no. hopefully healthier economy going forward but don't know how that is really the key question. to articulate that and what the what will be the threshold to signal is to send to foreign get them over and have that confidence? jonathan: equity futures going investors. they put out this ridiculous into the opening bell, 46 number that is compatible with minutes away. everything they are saying and highs up i .5%. say, here it is. make of this what you want, we don't really care anymore. annmarie: some -- lisa: some say let's get in update on stories elsewhere this morning. >> the u.s. government is it indicates panic or pressing allies to further desperation on the part of the tighten restrictions on china's people's congress of china. do you agree with those assessments? access to chip technology. leland: i think it is the they want to limit chinese opposite. the problem foreign analysts are having now as they access to exports. misunderstand. they see what is going on and think xi must be panicking and sources say tokyo has reacted approaching his pain threshold. why doesn't he do more? coolly, arguing that they want to access the impact or assess the lesson is, they don't think things are that bad. the impact. the economy didn't recover great last year and growth is no longer going to be anywhere near senator bob menendez has been indicted again in a bribery the old targets, they won't use the old stimulus playbook. case. they don't want to.

the focus is elsewhere. many democrats have called on the new jersey senator to step the problem the markets have to down after he was initially get around to on china is indicted last september. understanding that we are in a new paradigm. the leadership's economic kyrsten sinema has announced she parties are different and they are not that disappointed with will not run for another term. the level of growth now and level of economic activity. they want to avoid a loop of confidence and i don't want the bottom to fall out but aren't wells fargo is said to unveil a new credit card aimed at concerned about the levels of competing with the chase growth. lisa: how much do they want program. international involvement in their economy? we talked about apple and tesla it is a travel focused card. and disappointing deliveries at the beginning of the year and wells fargo will also add were wondering, is this because transfer partners, including air france, british airways and of domestic pushes to buy more domestic rather than in the choice hotels. u.s.? or is it real weakness among a the new card is part of the consumer base that has faced a ceo's mission to make wells lot of struggles in china? leland: probably both, but a lot fargo a bigger player in the consumer space. of it is the former. jonathan: why doesn't the bank this is more policy incoherence. just there -- by an airline? they have a message welcoming foreign investment but are lisa: exactly. cracking down on foreign firms and are explicitly saying we need to rely less on foreign are you basically flying a supply chains and foreign credit card? jonathan: stop pretending that inputs.

so let's build more ourselves to you are in the flying business. mystically. it is incoherence in the lisa: maybe we will ask about that. jonathan: up next, chair powell, message. you combine that with the economy and everyone is scratching their heads, what's day one. >> we have gotten strong data, but we want to look at things not just one month, but we want to look at things more happening?if holistically. you listen with they have been right now, i still see that risk saying for several years it is clear what is going on. you have a weak economy but they are trying to be less reliant on u.s. goods and trying to minimize the impact of apple and of the acceleration as fairly others in their economy. annmarie: you say that the low. jonathan: one hour and 15 biggest mistake that china watchers make is xi is panicking minutes away on capitol hill. ♪ and this is not what it is. if he was panicking, what would we see? leland: at some point you have a situation where the economy falls apart and you expect bigger stimulus. if you look at the stock market, they got to the point to where they don't care what happens in the stock market but they don't want the stock market fall so precipitously that it creates a doom loop and affects in a big way the wider economy, which is

normally uncorrelated with the stock market. i think they will step into set of floor. if they went into a real panic and thought that things were a mess and had a capital outflow crisis you would see more, louder, hard-hitting support. weare nowhere near their now . that is the -- near there now. that is the important take away. jonathan: at the same time in the last year they suspended reporting unemployment. the comfort with the equity market, but at the same time going into the big holiday in china they were banning selling at the start and into the session. is that incompatible with your views? leland: it shows more incoherence. net selling is banned not only in china but anywhere. the market kept falling and they brought the national team in for the stock market and it kept falling. we will have to do more. if the bottom falls out we have a real problem and people might think that the economy is falling apart.

they stepped in with bigger measures to boost confidence in the stock market. i think, again, the rule of the day is that they want to do just enough to keep things going. they aren't trying to juice things. they don't care about investor returns. they don't want a return to high or even medium levels of growth. they want to restructure the economy and minimize external reliance, build up the domestic chip ecosystem, focus on national security priorities, things that are important president xi now. they're not worried about the old priorities and are trying to muddle through the best they can without having the floor fallout. that is the level of support we will see going forward. lisa: it paints a bleak view for international investors. no stimulus, no emphasis on growth, and not a clear message in terms of what they want with international investors. from a u.s. perspective, is china uninvestable? leland: not per se, but the old

days of investing in the stock market and closing your eyes and checking back every quarter as you cashed out your dividends for the big tech giants, those days are obviously over. if you had a level of business that could operate in china and is compatible with the government's goals and they need your expertise or your company, you can do ok and china find going forward. a lot of companies still do. generally speaking, the allure of china was the idea that there is a billion plus consumers and you could sell anything in china and make a lot of money. that was never true. now, it has clearly blown apart that thesis. you have to be careful if you are investing in china right now. jonathan: you're one of the best at this and we appreciate your time. leland miller. we are up more than 12% from the lows of early february on the csi 300. if i was in that trait listening to that i would be more

uncomfortable. lisa: a trade means you have to have an eye on the exit. he is saying that if there is no bazooka coming, what is the next catalyst for upside swing? jonathan: here's your bloomberg brief with dani burger. dani: goldman sachs is zeroing in on the middle east, europe, and africa as it builds out his private banking operations for the world's wealthy. goldman sachs hired six private wealth advisors from the region from rivals including j.p. morgan. goldman sachs plans to keep looking outside of the company for more advisors. nordstrom, lower in the premarket by 10%, forecasting muted revenue incomparable sales growth at its high-end stores. they see revenue for the fiscal year between negative one and -2% planning for the investment in digital strategy and discount racks stores which has an improving outlook.

senator menendez has been indicted in connection with an ongoing bribery case. federal prosecutors added obstruction of justice existing criminal counts against him and his wife. many democrats have called on the new jersey senator to step down after he was initially indicted last september. kyrsten sinema has announced she will not run for a second term. her decision ends the possibility of a turbulent race in one of the nation's most lytic leak competitive states. jonathan: every time that i have done a market check this morning lisa has been laughing at me every time that i have said the biggest one-day loss of the middle of february because we are down 1%. we have not had a 2% drop or more a single day since february 2023, the longest without such a pullback in six years. lisa: yesterday when i was looking at the returns after the close i thought, is this a dip? does it count as a dip? yep, it does.

jonathan: a 1% pullback is drama these days. next, chair powell on capitol hill. >> there will be complaints if there is a cut and if they don't count there will be complaints. if they don't go by june it will be harder for them to start cutting. jonathan: that conversation is next. live from new york city, this is bloomberg. ♪

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how am i going to find a doctor when i'm hallucinating? what about zocdoc? so many options. yeah, and dr. xichun even takes your sketchy insurance. xi-chun, xi-chun, xi-chun! you've got more options than you know. book now. jonathan: live from new york city, we won't go there. fed chair jay powell. equity futures right now on the s&p are posited by .3%. it is not bramo, me, annmarie, or tk for that matter.

jay powell on capitol hill. >> it is definitely political. that is one of the reasons why jay powell laid the groundwork for cuts way back in december. as you know, if they cut there will be complaints and if they do not cut there will be complaints. if they don't go by june it will be harder for them to start. jonathan: jay powell is facing congress for round one on capitol hill ahead of friday's jobs report. expecting payrolls to rise by 220 thousand due to an underlying acceleration and broadening out of job growth in more cyclical sectors. the median estimate at bloomberg calling for a print of 200k. good morning. let's start with powell then payrolls. what do you expect to hear from him with that in mind? >> when powell was testifying on capitol hill, he is speaking on behalf of the broader

committee so it is not his opinion that he could express in the press conference. it is him testifying on behalf of the broader committee. we have been in an exceptional time recently where everyone is seeing -- singing a hymnal at the fed. it is what the fed is thinking. everyone is saying that there is no hurry to start moving but it seems appropriate to start moving sometime relatively soon. maybe not with an aggressive cutting campaign. it is not the economy rolling into a recession but a more gradual recalibration of policy. if i could put one point around that, last week we saw the pce deflator data. headline pce deflator, the fed's target, has gone from above seven to brown thing to two -- to rounding to two. we haven't gotten to target but

the monetary prescription in place at seven is not appropriate when you are basically rounding towards your target. recalibration is appropriate at some point. jonathan: payrolls, let's talk about it. at the end of last year payrolls growth is ok, but it is coming from fewer and fewer industries. now you're talking about the broadening of job growth in the more cyclical sectors. where is the change coming from? carl: from a very interesting point, the collective improvement of animal spirits in the economy. we try to put a price tag on fiscal stimulus, fed action, whatnot. if collectively we step back from where we are thanksgiving weekend of last year where 10-year treasuries were floating with 5% and stocks had a negative tone and people were in the recession camp concerned about student loan payments, etc. -- if we step back from that and everyone says, maybe recession risks are materially lower and we are too

conservative in our expectations and plans for capex spending headcount for 2024, all of a sudden that collective improvement in mood can have a powerful consequence. we can see that in the more cyclical sectors going from net job loss in october, a little positive in november, more positive in december, much better in january. there seems to be an improvement in ceo, cfo hiring manager sentiment which is contributing to the cyclical re -acceleration in jobs growth and improving forecast for economic growth in 2024. lisa: i can hear the voices in my head -- not all of them. [laughter] jonathan: we are live, bramo. lisa: hours worked going down because people don't want to get rid of labor and want to keep it in play.

ism services yesterday, doesn't that indicate some kind of softening? carl: still in expansionary territory which tells you things are ok. the manufacturing ism, not focusing on one single month, we can see a bit of an inventory cycle starting to improve and broader demand improvement in the economy where i think that the manufacturing sector will look that are in 2024 than 2023. you see some sort of improving momentum even in the tracking forecast for economic growth. the consensus forecasts are tracking to a faster pace of growth. not saying the economy will grow faster this year relative to last year, but there are elements of this improvement. lisa: we have buried the lead. you have changed your view. you came out saying you basically pushed back your expectations for the first rate cut from june to may and think the fed will cut less this year.

how big of a shift is this? does it matter from an economic perspective in terms of a steeper drop off later on? is this basically the new normal? carl: this is a very different kind of economic cycle where it looks like recession risks have faded. you can never say that it's zero. there is some element of an unknown event that could disrupt the economy so there has to be a lower level of recession assessment. going from six cuts to four is more of the fed's reaction function to what we are seeing in the data. you mentioned hours worked being down, i think there was a disruption in january. i hate to be the economist playing weatherman, but in january and february you get to put on that hat occasionally and we can see disruptions. i think that hours worked and the length of the workweek those things will spring back when we see the friday jobs number.

this is a very different fed cycle because it is a recalibration of policies. if we are looking for a parallel, 1994 with alan greenspan is the best example when inflation is coming down, there is some sort of productivity improvement in the economy. we don't know in real time the full extent, but we can see it is improving. there seems to be a labor supply shock that boosted the economy last year in the back half, and is probably carrying over to some degree into the first part of this year. the fed has the luxury of moving slowly. nonetheless, the inflation numbers have improved materially so you can recalibrate policy to ensure that you have a soft landing for the economy. jonathan: 30 seconds left, so supertight if you can. there is a comment from chairman palette the end of january where he said we don't look at strong growth as a problem. that predated the jobs report. is he saying that now? carl: i think he is still saying

that because there is some sort of supply shock in the economy. when we pull back the layers of the onion is seems to be a supply shock. he is a product of the 1980's. the 1980's was supply-side economics. because of these dynamics when you had strong growth in the back half of last year, yet inflation coming down, that is the fingerprint of the supply shock. in that type of environment you can maybe not ignore but dial back your concern about above trend growth and focus on inflation doing what he needs to do. which, january aside, it has been doing that. jonathan: right to catch up as always. looking ahead to fed chair jay powell, volume one. what are they saying to you? short credit? less trust in the treasury market? something like that.

bloomberg's michael sheppard joins us. all of that in the next hour.

if there is a concern about equities it's that they have gone much further ahead. equity markets will accommodate the demand of participation. economic excitement coming out is another reason to get excited about stocks. this is bloomberg surveillance with jonathan farrow, lisa

abramowitz and ann marie her dern. jonathan: it's all going down from new york city this morning. your equity markets are doing ok 0.3%. it's all about chairman powell in front of the house tomorrow. lisa: will he be able to say anything new? is it really about him? are we seeing monetary policy at the federal reserve deemphasize and not seeing risk appetite tied so closely to fed policy? jonathan: we priced out so many cuts and equity markets have still ripped.

even though the likes of apple has been terrible in google continues to struggle? lisa: so many guests have come on and not given the answer to why which is why jim caron was interesting when he said his goal policy is more important than monetary policy. that's an increasing tone i am hearing during the week of economic news. jonathan: tomorrow evening at 8:00 p.m. you will hear from the president at the state of the union address. he will be facing off donald trump because all of the reports suggesting nikki haley is heading to the exit. annmarie: she will announce it

herself in her home state. the next question of course, is she going to endorse the president? he wants to get a handle on the donors backing her because this is where he has a huge disadvantage. jonathan: it's money, fundraising. nikki haley has been attracting financial support. does he get that money or does it stay on the sidelines? annmarie: when you saw fiscal conservatives that are never trump but staunchly conservatives. they are putting their money down the ballot. it depends on who trump mixes vp. just to remind you of these numbers, he began february at 30

million invited at a 130 million. lisa: we will be parsing through all the details of this but what i find fascinating, terry haines said he will get a split congress no taxol permanence or relief from regulators. what is this mean with mergers and acquisitions, premiums in the debt market and potential tax overhangs so people are looking for? jonathan: you're only focused on the second point. you've been talking about it, the prospect of a repeat in the u.k.. you have a leader that has lofty goals at a time when we don't need it.

lisa: if you can't get taxol permanence he can't get the offset to proposals with respects to tariffs and spending. that's when you get the question of a bond market rebellion. everyone says that i'm ridiculous for my lose trust moment. -- liz truss moment. jonathan: a massive day ahead for markets worldwide. it starts with chairman powell and then payrolls tomorrow. tenure at 4.1584 coming up eric friedman, michael sheppard and kelsey berro. the trio of

tech heavyweights raising big questions. we do not view domestic dynamics as bubbly we see this as constraints apply meaning stage demand. we continue to let winners run. before we get to domestic versus inner -- international which winners? eric: it has been muted with the broadening out effect with tech and consumer discretionary working well. this is not a bubble environment. it could be tainted from my time

in 99 tech. we think tech is a momentum play. jonathan: bank of america says there is little sign of euphoria but we will see it breakdown. the likes of tesla and apple, what do you think about the leadership shift? eric: in terms of what we are gauging on what happens with a ice bin. those are things we track significantly and is still there. there is an increase flair out of other companies getting involved which is a positive. the fact that there is differentiation is a mild

positive. lisa: is it with revenue streams or result largely due to china? eric: if you look at the chinese story and you look at the data we are getting it is more muted. not just the fundamentals. looking at individual companies has become a much more important part of the process. that feedthrough has been important and there is a slow down. we think china runs the risk of throwing the playbook at the problem. we have been underweight but it has been a bit more challenging. lisa: is there a message you can spin forward? we've been talking about multinationals are you playing that theme through other sectors other than big tech? eric: if we look at subsectors

where it's been important is global retail. if you look at the value added from european retailers we have had a lot of earnings in the past few weeks but the readthrough is the consumers looking for value and that is some indication that there is a differentiation. aspirational buyers suggest there is a slowdown for low-end consumers. annmarie: with china they say these are traits and not investments. eric: the property market holds the key and this is such a structural issue for them.

i think the export pushes something we can't discount. passport penetration in china is something like 5-6% and there is a push for experience versus stuff. jonathan: let's talk about fixed income how have we done this with equity markets at all-time highs? eric: if anything the fed is saying to the market you foolish because we are going to. if you look at the mix of the auctions we have seen 42% of

foreign participation draw which says to us this bond repricing is happening from a mix of price indiscriminate buyers they tend not to be so price-sensitive. you have had the shift away from the indiscriminate buying and price discrimination -- if anything there is so much noise happening with the fed, when will they start cuts this

is a late 2024 story. really paying attention to treasuries in areas that could be a focus for investors and were paying attention to it. jonathan: auctions are in the afternoon and tk naps in the afternoon. anything after midday and the close, he doesn't care about it. lisa: i still pay attention because it's that riveting. equity markets with futures positive was given update on stories elsewhere.

dani: morgan stanley has had layoffs in china after the real estate slope proceeding pressure on the markets. nikki haley will enter campaign she is due to speak in south carolina at 10:00 eastern. acme products like proactive and clinique have contained high levels of a chemical linked to cancer. they have asked the fda to issue a recall for treatments that contain inso peroxide. jonathan: a trump/bided rematch.

>> they call it super tuesday for a reason. that conversation up next. live from new york city, this is bloomberg. bloomberg. hey you, with the small business... ...whoa... you've got all kinds of bright ideas,

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-how? -a.i. (impressed) ay i like it! who wants to come see the future?! get your business online in minutes with godaddy airo jonathan: equity markets near session highs. yields are going nowhere, 10 year. 4.1564. a trump/biden rematch.

on november 5, it's right around the corner. it's going to go down as the single most important day in the history of our country. nikki haley is expected to exit the race after a dominating performance yesterday. the current president facing divisions and uncommitted voters before a crucial state of the union address. what next? >> we have confirmed that she will be pulling out of the race but how she doesn't and the message she sends will be interesting to watch.

she is not expected to endorse donald trump. she may hold off on an announcement. through this campaign see his -- we have seen increased distance between haley and trout. annmarie: is there room for an establishment voice? >> there are some people in the

party who would like to see room for haley and others for that matter. the numbers show it in terms of delegates, trump is almost at the point of clenching it. this is become trump's republican party and people like mitch mcconnell are stepping down from leadership in part because he is recognizing the tide of history is turning away from his brand of politics and much more toward trump. annmarie: haley still picked up 20% in north carolina and 40% in

virginia, how does trump close that gap? >> haley will have to make clear that they have a choice and trump will have to reach out to them to persuade people to vote for him. some of the voters we spoke to in iowa and new hampshire, they indicated to us if it came down to trump/biden they may vote for biden. we would have to do a fresh survey but the challenge for trump is people who opted for haley because he didn't like his message. annmarie: minnesota, 20% reached

status uncommitted. what does he need to say on thursday to shore up parts of his base? >> he has a lot more to do than to shore up parts of the base. he is trailing trump in the head-to-head rematch and we showed the president trailing trump 43-48. what do michigan and minnesota say to biden's vulnerabilities? he really needs to thread the needle on gaza. they are growing increasingly concerned on his handling of israel/hamas.

he needs a lasting cease-fire for humanitarian reasons and if he is unable to satisfy that he risks turning voters away because they don't have confidence in him on this issue. in a state like michigan or minnesota you could see the president and a tight spot. jonathan: wonderful to catch up with you. a dominating evening for donald trump and nikki haley said to head to the exit. eric friedman this with us in new york city and i want to talk about the treasury market. we have two candidates and i'm not sure if either one wins they will tackle the nation's debt? eric: we don't think it will be politically popular.

the most important factor is trade policy and what happens with the regulatory. we do see a treasury yield that hangs around like your in-laws. i love my in-laws. jonathan: good correction there. eric: ultimately the idea is the overall level of rates has acted like a ramp on the treadmill in this economy can't stand fed funds rates. treasury doesn't want to see that happen because we can't keep funding deficits at increasing rates. lisa: people have been hopeful that we wouldn't get a trump

/biden mashup that they are not focusing on messages. we haven't heard what i did stray policies will look like. eric: i don't want to harp on that for redundancy. president bided had the opportunity to redact trump era tariffs and that's not been a central thrust. number two would be fiscal policy. the idea that we have this logging impact on fiscal. there is a steady drumbeat that's been a tailwind for us to be macro positive but it won't last indefinitely. the idea that what measures are

they willing to tackle without upsetting the economy that remain strong? annmarie: an placement reduction act in the door, when do you see that evaporating? eric: first quarter next year. there is this lag, it's not a light switch that turns off and on, by our estimates we think it will be a dissipation in the first half of next year. jonathan: you can extend that apology to the in-laws. eric: i'll pass. jonathan: we have been knee-deep in personalities and it shows up in the polling. this is not the face-off they wanted again. even though we know it's going

to be biden/trump that are not focusing on policy. lisa: will it be the same thing or do they double down on proposals they couldn't get through their first term? this will be market moving when fiscal support has been the tailwind driving this. jonathan: we will catch up on teslas tough start to the year losing a quarter of its corporate cap at the beginning of the year. s&p positive by .36%. this is bloomberg. ♪

jonathan: stocks are bouncing back on the s&p 500. nasdaq positive at .7. lisa laughs every time i say it, the s&p has not based a drop of 2.5 or more. not in six years. thank you for that stat. lisa: the reason why i keep asking, what is the date?

at a time when everyone says equities are the new haven because boz don't offer you an offset to growth. jonathan: tesla, apple but away from the equity market the drive away from the mob -- the employment component of that going into payrolls. 4.5474. yesterday did not confirm to just i 2025. lisa: you hear people basically taking both sides and not having a clear view. if you look at the service data, not only did you get data and contractionary territory, but prices came below expectations. others say that there is a seasonality.

put those things together. it is very difficult. jonathan: explain this. gold. d68 winning streak. again this morning, gold 2133. lisa: some people will speculate that it has something to do with allowing the economy to run hot. gold has not moved in a protectable manner. we saw this last year. gold did not get a bid. inflation is coming in and you have fed potentially cutting rates. jonathan: a six day winning streak for gold. that is the price action under surveillance this morning. about 2.5 hours away.

a lack of urgency for the fed to cut rates amidst growing concerns. expecting a neutral tone. highlighting the importance of not overstating one data point in the hotter than expected cpi print together without blowout payroll support. these comments are going to come before that data drops on friday. will friday's data confirm for the month of january? lisa: some are saying that it probably will. we have heard from a host of people. we're all looking at friday's data, but are we seeing a fed that is deemphasized and people are looking for other inputs to continue this risk rally? jonathan: the stocks have done ok in the face of repricing rate.

thank you as always. reasons for a strong february report. financial conditions have eased dramatically. the fiscal deficit is running high. the employment population ratio is almost a full point lower. lisa: the fed may not cut rates at all this year, but equities can keep rallying because you have those tailwinds of the fiscal support and the idea of low unemployment and a strong labor market. jonathan: donald trump and joe biden heading for a november rematch after securing sweeping victories in super tuesday primaries. nikki haley is end her campaign. she is expected to speak in north carolina. trump and biden winning almost every super tuesday contest.

it is that hold on the parties that will get interested couple of days. when we hear from joe biden, he will be speaking to people within his own party. he has to get that party united, and fast. annmarie: it is not anything you can shrug off in this campaign. the broader electorate, but they were talking about with pools continuing to show that the majority of american think he is too old. how does he come out and communicate this in a robust manner? jonathan: people look at those uncommitted those and they point to the middle east. i wonder if it is one single issue driving those. annmarie: when it came to michigan, he saw a huge rally among arab american and progressive gen z were saying that it was about a protest vote

over what is happening in gaza. when you look at gen z, maybe they feel like he has not done enough on student loans. others say that inflation is too high. these are, at the moment protest votes, but he has a lot of work to do. jonathan: tesla over the last few days has really struggled and continued to fall away. facing issues in germany where a factory has failed to open. another group claimed, we sabotaged tesla. others saying expectation should be levered. this has been a tough start of -- for the year for this company. i want to understand from your perspective, what is going on with production in that factory? probably not time to lose

production given what is happening with men, worldwide. >> if you are just following elon musk, you think that they may have lost the fly and decided to disrupt an electric car factory. what are you thinking? on the ground, there is real, local opposition to this company asked ending, and what is a forested area. they cleared a ton of trees to make room for this plan and it was unpopular. it was an area that does not have a lot of water. it has troubling, long-term trend for the water supply. tesla has not taxed the water supply to the extent that was feared because it has decided not to go forward with making batteries on site, but that is a threat down the line. there is popular opposition to this company expanding in

germany. it is not to say that it was not an extreme action. whoever set the fire to the electricity infrastructure nearby, but it has shut things down and it is unclear how long the plan will be out of commission for. jonathan: is it local around that particular factory or plant? or does it spread into europe? craig: i am referring to the highly local opposition, in regards to actually a recent vote as to whether or not the public supported the company ending. i do think it is fair to wonder, to what extent there is quiet opposition to tesla getting bigger in germany as a result of the company having so much success in germany and europe, broadly, really making quite a bit of a dent in the position of local manufacturers.

i do not think we have necessarily seen or heard a ton of that in the public. you do, for the most part hear other executives talk about the idea of tesla is welcome here and we welcome the fight. i do not think it is the case that this is some grand conspiracy of german carmakers, sort of looking out for their own. lisa: there is a step in the opinion common -- opinion column. 38% from 2022 to 2020 three, largely fueled by biden onyx -- bidenomics. is it kind of lagging behind as the adoption rate does not catch up with some of the push? craig: i think the u.s. is having real challenges and there have been a lot of conversation

early this year about, are we getting this transition right, whether you want to talk about the execution issues that you are seeing and, it is hard to say that in a disappointment given the amount of investment going into the u.s. is massive and it is hard, but this is an industry with long wait times that takes years from going around announcing a splashy battery factory and having else coming in off the line. even a company like tesla has struggled to hit the numbers that it was hoping for with its battery factory in nevada. this is something that politicians will be tested as to whether or not they have the stomach. on the consumer side, i think the fact that we wanted to incentivize dvds, but we wanted to cut china out of the equation.

it means we will have to deal with some cost disadvantages until we get to a point of scale. annmarie: i want to talk about tesla specifically. elon musk seems to be dipping his toes into politics. this is a time when trump needs to bring in more donor money. how much is tesla benefiting from the biden administration subsidies? craig: on one hand, they are a huge beneficiary and on the other, musk would have you believe that the biden administration is anti-tesla. there is some merit to the idea that there was a puzzling snob early on administration, the biden administration wanting to welcome and make a lot of noise.

of course, he has tried to make that a message of looking out for u.s. workers and union workers, and the fact that tesla is not unionized and musk is very antiunion has been a source of great contention. the ira has been such a boon to tesla, yet if you are following elon musk's social media post, you would think otherwise. jonathan: without a doubt, you can go back a couple of years. to not be included in that, this company was single-handedly part of the ev revolution. it did not make sense then and it does not make sense now at all. lisa: it raises the question, was it something more personal? that said, the fact that his company is still benefiting from some of the ev transition and

policies really highlights how this is a fraud and sometimes counterintuitive moment for the industry. annmarie: i think it came down to union jobs. president biden promised to be the most pro union administration. musk said he voted for biden in 2020 and he has ramped up his rhetoric ever since then, even recently saying it is treason biden is doing at the southern border. it is interesting that he is going to mar-a-lago at a time when trump could really use that campaign donation. jonathan: a dreadful start to 2024. close to session highs. let's get an update on stories elsewhere. here is your update. >> bob menendez has been indicted again. federal prosecutors added obstruction of justice charges to existing criminal charges.

many democrats are called on the senator to step down after he was initially indicted. kyrsten sinema has announced she will not run for a second term. the possibility of a turbulent race. footlocker shares are lower in the pre-by nearly 11% they reported mixed earnings. sales fell more than expected with consumers holding strong despite fearsome pullback on sportswear spending. they failed to meet expectations and the company is anticipating that it will take longer to achieve the goal in its plan. wells fargo is set to unveil a new credit card. sources tell bloomberg the firm is planning to add $95 per year to its roster as soon this week. wells fargo will add transfer partners to its reward platform

for the first time. the new card is part of the mission to make wells fargo a bigger player. jonathan: next on the program, waiting day one of chairman powell. >> it's not his opinion that he could express at the press conference. jonathan: a preview, up next, live from new york. morning. ♪

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and manage your investments in the chase mobile app. jonathan: session highs up by 0.4%. under surveillance this morning, markets are waiting for a day one of chairman powell. >> is not his opinion that he

could necessarily express in the press conference. it is him testifying on behalf of the broader committee. we have been through an exceptional period where everybody is talking about him and the fed. it does seem appropriate to start moving sometime relatively soon. jonathan: the fed chair expected to reiterate that the bank is in no rush to cut rate. we still appear to be on track for the fed to deliver some cuts this year starting in june. they expect it to be at 2.4% and deliver rate cuts. good to see you. strong data. it does it change this conversation in any shape or form? kelce: we want to look at things

not by one month but more holistically. i think what you are seeing is inflation has come down a lot. they both have two handles on them. that is a lot of progress from a year ago. when i look at the broader economic landscape, things are strong. they are be accelerating and right now, i see that risk of acceleration as fairly low. it was at 4.9% and then it went down in q4. now it is tracking 2%. that is the moderation that the fed is seeing. that is what is giving the confidence to say that by the middle of this year, we can reduce the amount of policy restriction. it may not be as necessary when growth is slowing. jonathan: chairman powell

himself said, we do not look at strong growth as a problem. kelce: there is a differentiation between growth being strong and he or being unsustainable. that is why i think the labor market data is so important today. before the jobs report on friday even comes out, my eyes are on the report today. our favorite leading indicator. think about it as essentially being the bargaining power that the employee has. you do not quit your job unless you are confident that you can get a new one. and you are most likely doing that to get a raise. we are watching the rate. even if it stayed where it is, it is indicating that they should be about the same level that they were precluded.

these are the types of things they are seeing to make them confident that it is appropriate to cut rates this year. lisa: what would you say if there is not the same bullish trend, particularly long-duration treasuries that you have been bullish on for almost a year now. kelce: the best strategy has been extremes. he looked back at me say, seven rate cuts, that was probably too much. look at when they broke below and it was really only on the back of the headlines. we had not really been able to send -- sustainably fall below four. we have not been able to stay above 4.3%. i remember the last time i was on, we were talking about the 10 year treasury and we were asking

the question, if we get the strong inflation report be expected to get, we were talking about ppi fitting and stronger inflation report for january. could we break out of that range? i said, i do not think so yet. the fed is projecting that the core rate will get to 2.4% for the end of the year. we still have 11 months to go. so far, that level has held. again, we could test it with the right data but for now, we yeah essentially in a range trade and it is still an opportunity to lock in those yields before they moved lower. lisa: this is something i have been a broken record about

today. we will get into it and a second talking about spreads and how it is time to duration, but he also talks about the overhang. kelsey: the deficit matters and i think it has been an underlying force that has been keeping the economy stronger than anticipated. it has been pushing against monetary policy, which has been restrictive. it is interesting. the corporate fundamentals are really strong. we were going through our scorecards as a team at our investor meeting and there are no places. you have fundamentals that are strong, spreads that are narrow, relative to the recent history, but we are not looking at the

recent history. we are looking at other periods of time. in those environments, they can stay tight and even tighter than levels we are at right now. jonathan: we are looking at the equity market and the same time talking about the fed cutting interest rates. how unique is this moment? kelsey: i think it is unique. i think about the fact that there are leading indicators that have been wrong so far this cycle. we do not know what the end of the cycle will be. we thought with 500 basis points of rate hikes and the aggressive monetary policy cycle in 30 years, that we were going to have a recession.

that was our expectation last year. you have to adjust when the facts change. what we have discovered is that there is an underlying resilience that cannot be ignored. lisa: we have been talking about bad news being bad news again, but there is a question about negative economic data being negative, even if it means more rate cuts. if we see a real turning in the economy, would not cause you to think high-yield? kelsey: high-quality fixed income is in a sweet spot right now in terms of the outcomes. i see three paths forward. you have a soft landing, a recession, all the leading indicators that failed to finally work, and we have

acceleration. we believe it is the lowest probability of the three. if you think about how it will perform, they are both very good outcomes. in the soft landing, the fed -- you do not get much of the yield, but yield index is pretty good. the fed cuts more and you also get the capital appreciation. we do think that bonds will work as a diversifier. we have seen microcosms of that happening. like the headlines from the regional banks. bonds did act the way they were supposed to. jonathan: thank you. in the next hour, we will catch up. two hours away from chairman

powell on capitol hill. this is bloomberg. ♪

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>> when you have a productivity surge like we are having right now, you can have the economy

can salute strong while inflation continues to moderate. >> i do not understand the argument. >> all of the agreed in -- agree -- all of the ingredients are there. >> if you think we are in a sweet spot. >> this is bloomberg surveillance with jonathan ferro, lisa abramowicz and and reordering -- and annmarie hordern. jonathan: the adp report a little later this morning. pimples right around the corner. lisa: i was wondering how long it would take you to mention that. all the tea leaves are important. i feel like it would be really

important to either confirm or dispute what we saw yesterday. jonathan: reasons to be constructive, one of them jobless claims. 215,000, which is incredibly low, given how long they have had a handle in america. lisa: if you are looking for a weakness, it is hard. you have to look around the edges and commentary. the overlying headline number is our strong. jonathan: forgive me but -- for what i am about to say because it is harsh. haley really showing on super tuesday. most report proposing dropping out.

annmarie: matthew bartlett said it is not a presidential campaign but a messaging campaign. quite critical in the past few months. does she continue the campaign or does she endorse? it means bringing voters along. lisa: i will offer a little bit of help right now. we have talked a lot about who will be in the race and it has in trump and biden. now we know definitively that it is trump and biden. now that nikki haley is out of the picture, to be start to shift to what they are going to be like if they get second terms? jonathan: we might hear something from the president

about capital gain. we have seen that they cannot get it done. when everything is blue. will they be able to get it done next term? annmarie: the president will speak tomorrow evening. when talk about policies that could remain the same, tax cuts. democrats, maybe you could see a slight higher. it completely depends on the shakeup of the house and the senate. it looks like a mixed government. jonathan: that is exactly what they have done. lisa: when you get the bond market pushback, i think fiscal is very important.

if it does not, windows bill have to get paid. jonathan: jobs data is just around the corner. foreign-exchange, the euro is stronger and the dollar is weaker. blackrock looking ahead to jay powell's testimony. we begin with our top story. chair powell, day one. expected to reiterate. blackrock saying this, when prices continue to moderate inflation is still running about target. a higher degree of confidence. we believe that a june 1 cut is realistic.

i have this testimony, we have reduced attitude and stocks have done ok. how relevant is monetary policy? >> i think people are fixated on inflation and the messaging. that said, you kind of look at the internal and is been fundamentals much more than inflation. when we got information about an inflationary trend, there was a