PCE Day | Bloomberg Surveillance | September 27, 2024

[Music] this is Bloomberg surveillance with Tom Keane and Paul S why are we upset if we're creating Jobs inflation's still a thing out there for the everyday consumer with Lisa Mato on markets the economic calendar jam-packed today and Michael bar with news tensions between the US and China have eated up even more the best in economics Finance investment and international relations this is Bloomberg surveillance on Bloomberg Radio good morning everyone Tom Keane Paul Sweeney John Tucker in for Lisa Matel how did that happen sorry you know it's just not going to be this are you

going to Costco this weekend uh you know I'm the last Pur I don't have a Costco membership I usually steal one from David Guru and they think we look spre that around that's John Tucker in for Lisa Mona Michael bar in charge of Major League Baseball playoffs Tigers Kell Yankees Destin I can't believe 101 was that the out I saw yeah we will not be speaking with Mr Rubenstein uh today we got a huge Friday what a week yes we'll talk about the traffic yes we'll talk about gur's 80h hour week work week here as

he looks at the poll but I just want to say coming up we are going to talk to David gura about this poll with a legit sample size legit math as you can get in a poll and it's got some interesting nuances on Trump Harris Harris uhum Trump we'll do that here uh in a minute we say good morning to you across the nation your commute Apple carplay Android auto good morning uh to all of you in the quarter 991 FM in Washington sorry about Baltimore Nationals never were in it Bloomberg 1130 in New York

home of the dreaded Yankees and in Boston Boston's not even in the conversation conversation 929 FM good morning wait till uh next year we'll wait for the uh from the Interactive Broker Studios our Bloomberg business flash chn Tucker uh let me do this I'm going to start with the China the Shanghai stock exchange overwhelmed uh CSI 300 index of large caps soaring 4 and a half% so the Chinese stocks with the biggest weekly rally get this in 16 years there were some glitches as $101 billion do worth of stocks traded in just the first hour

of trading there of course the Chinese government in full stimulus mode and to the extent that inflation still is in the front seat the Federal Reserves preferred inflation indicator that's out this morning we'll be waiting for that give you that live right now ahead of that D Futures 21 points lower S&P mini Futures down five the NASDAQ futures 39 points lower of course the S&P 500 finishing up a record yesterday uh I think it was the 42nd record for this year oil steing after a sharp two-day drop a price is still on course for a

substantial weekly Decline and Nvidia shares they are the most active this morning in the pre-market down about 9/10 of 8% and we check the markets for you all day long right here in Bloomberg Radio I'm John Tucker that you Bloomberg business flash David and Tom John Tucker thanks so much we have uh nasin TB with us here coming up in the 9:00 hour we start stronger now with Sam stoval at with CF who understands with humility the probability in the theories of Nasim uh T and brings it back to fundamental analysis okay Sam I've been

dying to ask you this the entire cell side walks away from China they walk away from Paris luxury selling in China you don't take it from five stars to two stars because you know out there somewhere something unexpected is going to happen the unexpected happened in China 72 hours ago why should we listen to buy hold sell type Sam if we we have this unexpected like China well good morning Tom and thank you for the uh the layup question um I I think basically that's another reason why you have to assume that the unexpected is

likely to happen unfortunately uh unanticipated events are hard to anticipate so that's why I think diversification remains fairly important midcaps small caps International Emerging Markets have underperformed large cap Us in eight of the last 10 years and right now we're looking at SNP uh looking at PE relative PE discounts right of 20 30 40% so essentially you know those should have been tractor beams if you will attracting investors to them knowing that sooner or later this the tide is going to change can you be too Diversified over Diversified that depends I think it depends on

the individual um you know um Gerald lobe used to say it's okay to put all of your eggs in one basket so long as you watch the basket very carefully uh whereas others are saying if you need to sleep at night you need if you don't like anything you have to own everything so uh I think diversification has more to do uh with personality uh and by being in the stock market is the important thing because equities are the only asset class that consistently outpa taxes and inflation all the eggs in one basket I believe

the motto of Tom's triple leveraged all cash fund is that correct yeah well I'm waiting for stoval to give me a six-star if I get a six-star call from Sam stoval I may buy a 100 shares maybe not lot Sam we're on the cusp of it being October uh September is supposed to be sleepy what what's happened here let's look back before we look forward and and and put this in historical perspective as you're so good at at doing what has made September as buoyant as it's been well you're you're absolutely right that uh September

traditionally is the worst month of the year whether you look at all year since World War II you look at all election years since World War II uh with the frequency uh of a decline more likely than an advance uh I think it's because of the optimism of the FED cutting interest rates uh I think it's the uh the optimism of China trying to uh dig itself out of its own whole uh I think it's expectations that we're likely to see uh um 15% earnings growth in 2025 and that we are uh on the course

for a soft Landing so uh despite the fact that valuations look pretty pricey for the S&P in general for technology and particular uh I think investors are saying we're going to avoid recession and as a result uh we can overcome these extreme valuations with earnings growth what was the the general response if you can characterize it to what happened in Washington with the FED last week from from cfra clients uh did they exhale as this cutting cycle begins does it open the door to them looking at stocks and the markets at a more fundamental level

not having to focus on the Parlor game of what the fed's going to do next or what changed last week and uh how has that sort of reshaped your perspective and your client's perspective going forward well it's a reminder that wanting is more profitable than having uh because the S&P gained an average of 18% in the time between the last rate hike and the First Rate cut going back to 1990 uh and that traditionally we tend to breathe a sigh of relief we tend to tread water one month after that uh but it seems as

if investors are saying no we want to continue uh with an optimistic Outlook Sam soall one quick question 30 seconds what's your star construct now in the mag 7 have you adjusted that recently um no we stuck with it we are still overweight the communication Services technology and financials because we look 12 months down the road and our belief was that by looking at 25 and 26 earnings estimates we have ample reason to stay where we are Sam stoval on this bullmark and congratulations on your persistency Mr stoval with CF Lots going on I want

to get to David gur on this important poll but first with our news in New York City Michael bar thank you very much Tom David John and news survey shows vice president kamla Harris has all but neutralized Donald Trump's advantage on economic issues in Battleground states with 39 days until the election a Bloomberg News morning console poll shows Harris now leading among likely voters by seven points in Nevada Five Points in Pennsylvania three points in Arizona Michigan and Wisconsin and two points in North Carolina plenty of reaction pouring in to the latest poll bill feries

is a senior editor for Bloomberg News the trend definitely breaking Harris's way so far and one of the really interesting things about it is that she seems to be getting that momentum by chipping away at what has been Donald Trump's lead when it comes to voters preference on or voters uh belief about who would handle the economy better overall that is still an area where Donald Trump has a four-point lead uh that's down from six points in our previous survey Bloomberg's Bill fairies what once was Hurricane alen is weak into a Trum storm Over Georgia

Helen came ashore last night in the Big Bend area of Florida's Gulf Coast as a category 4 hurricane officials have forecast Storm surges of up to 20 ft and warned they could be particularly catastrophic and unsurvivable Hillsboro County fire rescue public information officer Danny Alvarez had a message to those who defied Florida's evacuation orders you know if you decided to hunker down and now you're having issues please let's learn from this at least three down have been reported the indictment against New York city mayor Eric Adams contained five charges alleging that the Democrats solicited and

accepted bribes or illegal campaign contributions from wealthy Turkish donors in return for various favors Adams says quote we are not surprised and that he will continue as New York's mayor I ask New Yorkers to wait to hear our defense before making any judgments Adams has a court appearance scheduled for later today Global News 24 hours a day he and whenever you want it with Bloomberg News now I'm Michael bar this is Bloomberg Tom David John and Michael bar thanks so much for that summary of the poll with us now David girlo host of the big

take helping us this week helping all of Bloomberg with his political uh skills David girl I want to get to the calendar right now November 5 is the election 6th is a Wednesday with no sleep Thursday is a 7th we're supposed to move on to other things we won't Friday's the 8th and Saturday the 9th and the 10th screams like Bush V Gore I got Michael pervis with a brilliant brilliant note this morning and Michael pervis at tback and just goes right to it a slim Harris win may be more problematic than a blue sweep

are people like you preparing for the Wednesday Thursday Friday after the first Tuesday of November I've cleared my calendar in case you and I have to come back here to do the show over the weekend as we've done during big news uh in the past but yes I think so you know we talk a lot about divided government in Washington but this is a scenario that Michael is talking about that I think is a really important one and that is if it's if if if it's one state that determines this there's going to be an

effort to count ballots once again it's going to drag out it's going to be super attenuated and there's going to be this legal fight and in that vacuum I think is going to be a lot of uncertainty obviously and perhaps a lot of uh unrest and difficulty I know you're briefing John lir this morning over at uh MSNBC but the summary here uh as you digest this poll which state is your focused State out of as Greg Cory says 6,100 sample size it's a legit mathematical poll well let's look at the the two extremes here

Nevada jumps out where vice president Harris is up by seven percentage points I mean that's pretty astonishing and sort of out of the mode that we've seen with a lot of other polls focusing on these swing States but then looking at Georgia where it's essentially you know neck and neck um no no candidate has an edge there and we've seen these candidates in Georgia a lot in recent days and they're going to be there even more going forward but the the the broad takeaway about the economy is what stands out the most Joe Biden had

a real big problem on his hands and ter of a perception from the elector about how he was handling the economy and would vice president Harris becomes the candidate she has narrowed that Gap it was a six six percentage point lead by Donald Trump and the last time we did this poll in August now it's four so she's making inroads there and that's a huge Advantage for her if these are if these are reflecting you know accurately what's going on my shock of the week was we had an a wonderful academic esteemed un unbiased I

would say is that can go who said the undecideds are 3% I was shocked by that statistic I've also seen 6% how big is the gura undecided I think that we're talking about tens of thousands maybe hundreds of thousands of people across this country and one wonders what they're waiting for what's going to sway them but you know rest assured both of these campaigns are targeting them um very seriously with advertising with events with speeches uh it's they're hotly contested of course and and as you say quoting Greg Cy it's it's not States we should

be talking about here but districts in particular we're down to districts and counties yes Pittsburgh versus Philadelphia here you go yes yes yeah okay David G thank you so much but I'll see you that weekend I think there'll be I think that this is going to it won't be election night it'll be an election week this poll is legit there was some real effort put into it to take it away from short quick thoughts there's some great charts in the poll about the Dynamics as well we'll get that out to you on LinkedIn and on

Twitter today Futures -7 from New York City Bloomberg surveillance [Music] [Music] [Music] [Music] [Music] markets headlines and breaking news 24 hours a day on Bloomberg Radio Bloomberg television and the Bloomberg business app this is a Bloomberg business Flash and I'm John Tucker in The Newsroom with this Bloomberg business flash being brought to you by bam Mutual insures mut uh municipal bonds that Finance essential infrastructure and provides guaranteed income to improve any portfolio be part of building America invest in bam insured bonds after another record Clos with the S&P 500 stock futures this morning little change

and as the quarter is about to come to a close the S&P 500 year-to date up over 20% uh the Federal Reserves preferred inflation indicator that's coming out this morning most active pre-market Nvidia shares they are lower arm Holdings getting snubbed they went to Intel about potentially buying the chipmaker product division uh they were told it's not for sale and then Costco Wholesale posting higher than expended profit a lower price is fueling consumer spending and the store traffic they're also jumping down Futures right now down 25 the S&P mini Futures 6 points lower than Aztec

Futures right now they are 40 points lower 2-year yield basis point lower 361 the 10year down a basis point that's 378 we check the markets for you all day long right here on Bloomberg Radio I'm John Tucker your Bloomberg business flash Tom John Tucker thanks so much 9:00 our n TB uh with us and we're going to just real good cross-section equities bonds currencies Commodities to get you ready for the weekend here and in I should say to Q4 OMG Q4 okay here's the way it works she was 12 years old out of Edinburgh and

LSC and over 10 years ago the world stopped as Charles Duma Diana Co cha and freia Beamish did original Street research on China that stopped the Wall Street at World freia Bish absolutely definitive on China Chief Economist TS Lombard uh joins us free I'm so happy to have you and you absolutely nail with your first chart the reality M1 there is a deflationary tendency it's got some momentum and you're looking for nominal GDP to fall off a cliff did China do enough in the last 72 hours to help nominal GDP not plunge like M1 I

think I think the nominal Outlook in the next kind of six to n months is is pretty baked in there are a lot of distortions going on because they've changed the the regulations and it's been really hard to actually work out what's going on in M1 but it's it my best guess is it's it's it's Grim it may not be as Grim as the the overall numbers suggest but it it is grim and that's kind of we can triangulate that with other with other data looking at kind of wage costs are um at their Co

nearly at their covid lows their their standard deviation below the the previous um averages um profits on the industrial profits numbers I'm looking at operating profits they're not they're not doing well at all um so we published this note last week saying this is all looking pretty grim and we think they're probably going to have to do a bank recapitalization over the next kind of six to six to n months we didn't think that was going to come through this week um but I'm really pleased that it has so the difference between last week and

this week in my mood with regards to China is is really quite quite big um yeah fre Aon freed at Princeton says look it's a Marxist list regime whatever the regime in is Beijing what do they need to do more to jumpstart The Reel back to 5% or even to keep nominal GDP out of the tank it's never going to be an economy like the US um that we can say that for the from the GetGo um they're never going to have properly private consumption LED growth and that's because they're not willing to let go

of the geopolitical and political aims of um having Supply Le growth which decreases returns and therefore you don't get the return investment for the household sector to be able to drive private consumption lead growth but there's a long way between um being a a US type economy and what we were predicting in in or the continuation of the hole that they were digging um until until this week um and and that there's enough in the difference between those two scenarios for for a serious rally and that seems to be what we're what we're seeing here

um we've always said we want two things out of China we want them to to recapitalize the banking system properly um and we want them to allow for redirection of income to the household sector we've said that's not going to happen in terms of Returns on wealth but they do seem to be addressing as you and I have talked about a lot they do seem to be finally addressing U moving towards uh the the consumer and that is a shift towards more demand Le growth and away from this Supply Le growth that's so um so

deflation r d jum could you speak to the extraordinariness of what we have seen over the course of this week Tom mentioning this has been a wild 72 hours and you talk what's changed between last week and and this I guess I'm curious if you think the PB is is done here when it comes to both monetary and fiscal stimulus uh if this if this project has reached its its conclusion or if there's more to come uh and if you could just kind of situate it in terms of how they're approaching the economy at this

point how much of a surprise was it and um you know is it something that we like to see emulated going forward I think it's a surprise that it came this early as I said we just published that note last week um saying that we thought they were going to have to do a bank recapitalization I'm actually really kind of EXC that it has come this quickly because that signals that they're willing they've met their pain threshold even at this stage and they're willing to actually change things redirecting policy from what was this kind of

jumbled mix of conflicting policies um back towards demand and that's that is I I think a positive um signal it's not enough what they've done so far so if we look at the the kind of the rumors and we still don't have things properly nailed down in terms of the total numbers but it looks like they're going to do kind of one trillion uh facing the the Run REM trying to to to shore up local government debt um they might do another one trillion of of Recaps um Bank Recaps which I love if you put

that together um it's probably you know at a at a pinch that's about half of what I'd like to see them doing and just using kind of say top as a as a um as a blueprint here of of how much we would want them to do top was about kind of yeah yeah just to interrupt just I mean we've talked a lot over the course of the week about this put that they've put in place and sort of what that's meant for the market domestically but it mean internationally uh as well could you just

speak to that I mean we've seen some days in which this has kind of rippled around the world others where it seems like it hasn't had the kind of ripple effect through through Western markets that that it might help us understand the magnitude of of that put in the decision to do that yeah I think I think we've got at both poles of the of the global economy we've got the FED saying we want to be ahead of the curve and we've got um the pboc uh saying yeah we want to get in on this

as well and more importantly in the Chinese context we've got the fiscal authorities coming in as well from the pbc's perspective so much of this is just pushing on a string that this is a overleveraged country they cut interest rates you don't get that much response I think perhaps with the the pboc's um efforts to uh stimulate the equity Market I would maybe set a little bit more store by that it's not an outright QE um because you're still relying on the the financial institutions um and the the corporations to go out there and buy

the buy the by the stocks um but there is a very powerful moral suasion in the Chinese context um in the sense that CEOs want to Virtue signal so that their sectors um get the the policy favoritism going forwards and there there are very serious consequences to not Towing the line if you're a CEO in China there is a moral argument there too I got 30 seconds I got to get this in it's off YouTube live chat fre ofish just as simple as I can will this jumpstart FDI back into China um I'm not sure

I yet go as far as that I think we're seeing about kind of half of what we need to see to really get positive here we might see some uh some some positivity in the equity Market um and I think kind of looking looking towards the the major um reforms that we want to see these are really good steps in the right direction okay freia just fabulous thank you thank you so much for the brief she's with TS Lombard and London fre of Beamish uh joining us today and and China and and Michael peris's note

whoever wins the election is a huge determinant I guess of how we Bounce Off China how we bounce off Beijing David G and what that relationship looks like and of course we've heard a lot of uh proposals floated about how big tariffs might be how broad and sweeping they might be if Donald Trump were to win uh we've seen the way the B Administration has approached China more competitively uh but trying to establish Communications that had lapsed during the the Trump Administration so you're right I I think it's it's going to shape in in a

huge way this this Paramount relationship what happens today in the dash to November 5th is there is there a date calendar for today or the weekend yeah so we we did they make no did they both go to the Giants Cowboys game last night well by the way I got my ballot in the mail my early ballot oh very you have to send it in or hand it in how does that work you'll mail it in after you Z I got to open it after it's New Jersey did we count yeah right uh I know

that President Biden is going to Scranton today for an event and uh vice president Harris I think is making her way through the mid Midwest as well so uh it Contin travel continues at a Relentless pace and I uh know that the big EV for the former president he's going back to Butler Pennsylvania where that assassination attempt was for a rally next weekend we are ready for November we had our first meetings here on scheduling out tight from November 4th Monday out through the next weekend David G and I have cleared our schedules as they

say it's very interesting on economics Finance investment international relations and this election Bloomberg surveillance stay with us [Music] [Music] markets headlines and breaking news 24 hours a day on Bloomberg Radio Bloomberg television and the Bloomberg business app this is a Bloomberg business Flash and I'm John Tucker in the Bloomberg News with this Bloomberg business flash after the 42nd close for the S&P 500 record close Futures this morning lower to uh little changes the uh prices for the stuff at CCO they were lower so that attracted more shoppers but the warehouse club chain reporting a narrow

Miss on Revenue estimates Matteo's fault eh I I go in there for the 5 gallon bucket of peeled garlic which is really a buy Bloomberg economics says August personal income and outlays data that's going to validate the fed's decision earlier this month to cut rates by 50 basis points we're going to get more data this morning there was so much trading on the Shanghai stock exchange it ran into a bunch of glitches after the Chinese government of course added more stimulus CSI 300 soaring 4.2% it's it's been the biggest weekly rally for Chinese stocks in

16 years uh right now the down Futures 7 points lower the S&P futures down three the NASDAQ futures right now down just about 27 points we check the markets for you all day long right here on Bloomberg Radio I'm John Tucker that is your Bloomberg business flash David and Tom John Tucker thanks so much okay worst screw up of the Year let's go right there right now Rob Sharps chair of the board chief executive officer president of T price they announced their Mega foundational deal with the Baltimore Oriols and they sent Sebastian Paige to make

the announcement do you have from South Africa and Sebastian honored to have you here on allocation when when you see the Orioles which is one of America's great teams this year and tro price branding it here there's a patch on the uniform and the whole thing do you have any idea what's going on you know what's what's going on Tom is you have our global headquarters in Baltimore and were attached to Maryland and a really good partnership with the Orioles and we're really excited about it's really excited I mean I look at all the branding

that's out there that's maybe the best branding I've seen you know you know it's it's it's nobody wants to Brand I saw David ribstein at one of these games with a hose and there's a section where you spray fans with a hose and he seemed to be really enjoying that way he told me Mr we thank Mr Rubenstein for his commitment to Bloomer sees he said to me Tom this is a lot more work than I thought I believe it Sebastian p with t price venerable of Baltimore with this are you using the Playbook that

tro price would have used 20 years ago or 40 years ago or 60 years ago in this cacophony we're in you know the lifeblood of an active manager is research so that Playbook massive investment in research following companies but also top down asset allocation research which I'm responsible for is core to the process and that's what we're doing and that's our Playbook if you will now Tom if you mean you know the Genesis or the early days of the company around growth stocks if we we like growth stocks in our assocation portfolios we actually slightly

overweight value right now how did um your world change if at all as a result of what happened with the FED last week this long build that we had to the FED beginning this this cycle rate Cuts how does that sort of reshape your your perspective and you we talked a lot about what was baked in and what was expected and perhaps can set magnitude of those cuts Cuts aside but what changed as a result of what happened last week so going into this we're neutral between stocks and bonds after the 50 basis point cut

we're neutral between stocks and bonds are close to neutral but we're having massive debates because several members of our as allocation committee want to start adding to stocks you know someone told me recently I was being too long- winded so I figured out how to make the bull case in four words so if you're with me on this okay the bull case in four words rates down earnings up so it's straightforward pragmatic for the Bulls the problem is this is all priced in the economy is going to be okay but you have a pressings ratio

of 21 on the s&p500 the S&P is up 60% over the last two years this is not really where we want add too much to stocks the economy is going to be okay and yet we pick up on kind of the palpable anxiety I think from policy makers as they look at the unemployment rate in particular look at the job market more more broadly is that misplaced or unfounded and we talk about sort of How It's meeting by meeting everything is data driven there are Skeptics who say it's data point by data point driven how

much of that anxiety is is merited how much are you thinking about uh the potential for there to be a deeper downturn than than than we've seen it's super hard to make a session forecast right now if I look at three factors manufacturing pmis which it's an old school indicator but you know it's at 47 the yield curve which we talk a lot about in the financial media and the increase in unemployment I can run the statistical model that shows a 92% probability of recession now I can turn that on the dime if I add

the level of unemployment which 4.2 by historical standards is low it's a robust economy and if I add any sort of market pricing spreads or stock returns that probability goes down to 11% so we're kind of a knife's edge on the macro data right now uh I I've said this before folks it's old news fortunately some of the movie rights came to me Beyond diversification what every investor needs to know about asset allocation is with our question the most intelligent book of what not to do in asset allocation by Sebastian pagee chapter 11 we've got

nasing TB coming in today in the 9h hour fat taals and something about the number of particles in the universe I'm going to take that and say everybody's got too much information now how do we keep it simple to succeed out three years I'm really excited that you have taleb coming in I talk about his research in the book his points of views this idea of the number of particles in the universe is that talb doesn't like the normal distribution the so-call standard statistical models and if you look at probabilities of say 30% loss on

the stock market or what we just had with uh Japan you know 20% in a couple days if you look at the statistical standard probabilities of those events it should basically almost never happen like and it's like once in a gazillion years once in the number of particles in the universe number of years but in reality those events are more frequent than we think so maybe this stff TS with taleb coming in it's hugely important it's hug like Fooled by Randomness folks which is our TB got his a start he was a lowly traitor doing

nothing uh before Fooled by Randomness and the answer in there is if you take a blended all-in statistical simple bell curve gaussian distribution you that doesn't give you a picture of where we are so what is the model you use now given we have a lifetime crisis every seven years or a China turnaround and to be fair Tom this is something professional investors know about have known about for decades but still How We Do risk management as an industry has to continue to evolve in the soul searching on those more frequent than expected losses or

Black Swan events still needs to be handled through thoughtful scenario analysis this is where scenario analysis really comes in and bring it it's something I argue in the book bring scenario analysis to the front office where you actually deciding how to allocate assets not after the fact once you've made your decis this this is full by Randomness the trader who gets his head handed to him is like 15 floors below and nobody cares it's like the it's like you know David you're home watching industry so you can do this show right right exactly that's how

I prepare British trading and all that Sebastian paig could be out of Industry I mean he could be out of Central Casting there do you get a sense you don't have to pull back the Cur T price but that conversation is happening that that risk analysis that the way that we approach it is changing or that there's an openness to changing and if not um what's the hurdle to to getting there to having a more comprehensive and kind of concrete conversation about what it should look like the importance of scenario analysis rather than things like

sharp ratios that take the volatility as the measure of risk scenario analysis in different ways you can just go back and look at crashes and say what if this happened today given how my portfolio is positioned but you also have to think about it and we have investors talking with Risk Managers saying what would happen if this is never perfect but you start shocking the factors is it we we're going to end this in fortun Sebastian we should have you on every day I mean you know from the Orioles Dugout the T price Dugout at

C i' love to do you know who Kell Ripken is I do yes okay well there's Tom I tried to get you tickets to the Orioles my compl ori's white socks thank you so much yes yes we'll work on that very very quickly here are we over Diversified overallocated thinking too hard about our 401ks it feels that way if you look at the performance of us large cap tech companies if you look forward I think it's prudent to have a broader allocation Sebastian Paige thank you so much greatly appreciate uh today and again I can't

say enough about his book look for the movie It's 4th of July I think 2026 DiCaprio is involved Beyond diversification what every investor needs to know about asset allocation can't say enough in English incredibly intelligent uh book about what not to do uh in uh the market right now right on the screen small SCS small caps giving me uh some love Futures negative3 just sort of a pause the vix 15.5 a critically and the good markets nudging up as Jess mton said record highs here record highs there there you know what you know the vix

really hasn't moved [Music] 15.58176 seven percentage points in Nevada Five Points in Pennsylvania three in Arizona Michigan and Wisconsin two points in North Carolina and in Georgia they're even her leads are within the poll's statistical margin of error now across the seven states Harris is ahead by three percentage points among likely voters that's a statistically significant lead that's about two points greater than last month the poll underscores that this contest could be decided by the narrowest of margins or come down to a single state in the Electoral College in Washington Amy Morris Bloomberg great radio

hurricane Helen has weakened to a tropical storm Over Georgia Helen slammed into Florida's Big Bend region as a category 4 hurricane Tampa mayor Jane gter says they still need to start their full assessment of damage to the area but from what she has seen there is definitely a significant amount of parts in the city throughout our downtown area I was just driving down there and there's um a great deal of damage from the flooding uh barricades move Construction trailers moved and those were just the the things that I saw in a very short drive at

least three deaths have been reported New York city mayor Eric Adams could make his initial court appearance on charges that he accepted illegal campaign contributions and free overseas trips from people looking to buy his influence in city government Adams lawyer Alex spirro there's no corruption this is not a real case we're going to see everybody in court Adams is scheduled to appear at noon today before Magistrate Judge Global News 24 hours a day and whenever you want it with Bloomberg News now I'm Michael bar this is Bloomberg more with Tom David and John Michael bar

thanks so much got to get back here uh to this poll as well we didn't talk about Pennsylvania last time if I'm Harris if I'm Trump am I heading for Philadelphia or Pittsburgh they're spending a lot of time in Pittsburgh and I think that's where they they're going to continue to go and uh obviously vice president Harris there this week for this big uh speech on the economy the veiling of her 80 plus page plan for the economy as well uh but as I said you're going to have uh former president Trump going back to

to Butler Pennsylvania also near near Pittsburgh uh a little later next week so I think that's the that's the where the magnet is drawing them at this point in the in the race that's the undecided I guess as well on your North Carolina you did a nice summary David for us there yesterday does this poll that we did 6,100 people does it change your view on the the triangle State I like how you did that CH I like that very I know it'll be close so you have vice president Harris here up by two percentage

points in this latest Bloomberg morning consult poll I think that will engender some optimism more opis it's within the margin of error but I think the margin of error and it varies state by state in this poll I believe that it's two or three in in North Carol I du North Carol sorry what's the margin of your I'll double check that I I know that the Tar Heels have a bit of a hill decline uh on Saturday we'll see is sweing going to be there have we confirm that I don't know he has the golf

stream I know he's got the golf stre see if he's wearing the Duke tie so both need to be in North Carolina now you we got we got to talk about this more there's a lot going on here but they got to be in North Carolina it's that close yeah yeah for sure and then it's a state that went for Obama then went for Trump we'll see what happens Trump and Biden we'll see what happens next time around David gura given his perspective Sebastian ped so good G was reallocating as 401K as Michael bar was

doing uh the news Futures at negative3 the bond market churning quiet big inflation numbers in 45 minutes [Music] [Music] [Music] [Music] 2 [Music] [Music] [Music] [Music] markets headlines and breaking news 24 hours a day on Bloomberg Radio Bloomberg television and the Bloomberg business app this is a Bloomberg business Flash and I'm John Tucker in the Bloomberg Newsom with this Bloomberg business flash a little later this morning we're to get the latest data in fact it's the fed's preferred inflation gauge ahead of that Futures little change right now the S&P 500 did Notch its 42nd closing

High yesterday and right now chipmaker Nvidia that is uh most sted in the pre-market those years they're down about 610 of a percent a number of quantitative hedge funds in China they were hit severely today as the nation stages biggest rally the stock market there in years and uh the csi300 index rallying 4.5% Shanghai wrapping up the best week since 2008 uh Commodities gold heading for the third weekly gain and this morning have oil looking like it's steadying after a sharp two-day drop with prices still on course for a substantial weekly deine uh decline the

refined product by the way well under $3 a barrel on the home front uh down Futures right now $3 three points lower uh the S&P futures right now down two points and the NDA Futures 14 A2 points lower in the pre-market we check the markets for you all day long right here on Bloomberg Radio I'm John Tucker that is your Bloomberg business flash David Tom surveillance correspondent congestion correspondent John Tucker so what are you playing at the Wawa uh I think it was like 280 something thank you and Houston got a great phone call from

Houston uh email rather from Houston saying they're down under 270 yeah in Houston I mean it's like now remember those signs they change automat they're all electric now they're like Billboards down the highway they say inflation and prices are coming down voter I mean that's my persp do you pay with all cash for the discount um a lot do have the cash discount no I go with the card so get those CS thank you for that report congestion correspondent jent Tucker the Midtown congestion this week is his fault our daily look at the what we

do here at Bloomberg surveillance and is brought to you by interactive brokers portfolio analyst consolidate and analyze all your financial accounts on one powerful dashboard for free sign up for portfolio analyst do it at IB k.com freea ibkr.com freea interactor Brokers thank you for foundational support an MTI joins right now I guess on value investing from all spring Global Investments head of active Equity I'm just going to cut to the chase is Apple a value stock um I guess it depends on who's looking at it I would say at this point you know and look

I've always defined gone with the buffet definition of values um more what you get versus what you pay and investors have been rewarded for owning Apple because they've delivered right um you know the question is can they continue to do that so so if you're framing out with a bunch of Young Turks at all spring your terminal value how far out is your view on richly priced mag 7 and other stocks do you now at all spring have to frame out three years or dare I say do you go out to a five-year analysis you

know I I think the most interesting thing about technology and and look everybody has to look at it whether you're a value investor or a techn or or a growth investor because it's such an important piece you know it's 30 plus perc of the market cap of the S&P 500 um and we have a new innovation wave coming Ai and other things the the most important thing though that I'm hearing from our portfolio man managers is the fact that those Meg seven stocks although there's been a lot of growth coming there's a broader area of

focus and looking further and deeper into technology into places where you know it's going to travel next and where investors are likely going to give higher multiples next is where we're pay paying more attention that's more interesting than kind of paying up for the multiples um on some of the mag s stocks um it seems like small midcaps are having a moment I guess to be anticipated after what happened with the FED talk a bit about that and and you know we had a great conversation this week about concentration risk picking up on what you

were saying just a moment ago about um how long we've seen these seven stocks now five stocks dominating everything uh as the aperture widens what stands out to you beyond those Mega caps yeah I mean look we we've thought since the beginning of the year we'd start to see this broadening we have but it it's it's kind of been based on the fundamentals looking more at where earnings could come from next if you start to see a deceleration in some of those five to seven names in growth look they'll still have nice growth but it

will be decelerating um at some point where will you see the the opposite happen and sectors like healthcare stood out sectors like financials some of the more value centered um areas of the market and and we're certainly starting to see that happen well let's go to financials I I mean i' be honest I'm not up to speed on it other than there's a lot of talk about right sizing cost expense in that I mean I saw Brian Mo had meeting with the prime minister of the United Kingdom as they look at European expansion and all

that are you enthused by the big Banks I mean I think the big banks have been kind of the easier play and the safest place to go just given the uncertainty about the economy going forward um our PMS have also liked some of the insurers and other financials that are out there and that's been the primary focus I think you know the economy will be kind of a driver of what happens with the regional Banks and and other placers as as you look deeper this has been a crazy week in many ways um certainly when

we get in here every morning and see what's happening in China that we' kind of agitated us had us rip up the script as P would say um yet we haven't seen this kind of uptick and volatility this week or or in weeks past and I wonder what you make of that given you know what fear still exists about the path forward for for the economy for markets why aren't things more volatile do you think you know it's interesting because I've actually been in the camp that volatility would kind of stay around and stick around

until at least year end until at least we have an answer on the election um I also live in a swing state state right so I'm I'm constantly living in it um but but as as I kind of Step Back From the emotion what I'm also seeing is the market reacting to the fact that maybe the fed put is back and so rather than the markets responding to just good economic data being good news it's kind of looking at you know bad news is good news again too which is a little unnerving to me is

is uh a cash anti investment now I mean look our our money markets have done well along with the rest of the industry but our fixed income team has has done incredibly well and and we are saying to investors much like you know I think you're a lot of people on your show are saying it's time to look out in duration and extend that duration I I mean I I look at the game right now and it's sort of a catchup here are we underweight mag 7 and the other giant stocks because our portfolio constraints

you know is it like an industry issue for active management I I think you know to your point Tom the mutual funds that vehicle in particular is restricted if you're going to be a diversified fund you can't be as concentrated as an index that's made it that's made the headwind stronger for active managers I would say though it's it shouldn't be a headwind for much longer and rather than looking at it as a um as kind of a a problem I look at it as an opportunity you know if you've been a straight index investor

you've taken on a lot more risk than I think most investors understand our conversation with Michael Mobis and sticking with you clearly I mean this is he talked a lot about this I'm going to go read mob you know this weekend I mean I I started in 1997 there's some guy out there it has all those Publications you're like getting them bound if you're taking everybody has an M's letters you know back to when she started in the industry in 1995 and you know you know you just you know you just you just look you

know you just study and the rules are the same yeah but you know what we heard from Sebastian Paige I I'm just death I mean sharp I'll go with because there's no beta within it but Jensen trainer analysis I just I'm sorry and I can't do beta analysis it's baloney it's not my strength tusher shande MIT got it right there's too much of this I mean Sebastian I thought was great in this this is what surveillance is about folks to talk to Sebastian Paige at tro price and then animaletti at all spring this is what

we do nasing taleb in the 9:00 hour as well we're going to try to get through Friday how about that traffic David G well I I had to stop in Manhattan on the way here today and in so doing I had the trouble that you've been describing of just getting a car take me here our theme for our songs today is traffic trff okay we're going to do that that means Stevie Winwood this is a co-write Stevie Winwood with a guy we lost the September will Jennings America's greatest modern songwriter Stevie [Music] Winwood be that

[Music] one with the the win in her arms valer call on me call on me come and see me I'm the bo be [Music] [Music] [Music] [Music] this is Bloomberg surveillance with Tom Keane and po s we're addicted to The Parlor game the fed the monetary ballet where do you see opportunities in have fixed in space here in 24 with Lisa Mato on markets AI affecting demand for cloud computing and Michael bar with news another legal setback for Donald Trump this time across the pond the best in economics Finance investment and international relations this is

Bloomberg surveillance on Bloomberg Radio good morning everyone Tom Kean Paul Sweeney Michael bar Lisa Mato Lisa Mato out John Tucker in attempting to do the Mato act we have a Bloomberg business last year in a moment Paul Sweeney on sabatical and believed on a golf stream down to Duke you where is it at Duke Tak do they use the same stadium like metal lands no they they each have their own and uh unc's is larger I should say but a St has own particular flavor and it is older and smaller better seats for most viewers

so better speaks and no doubt smarter ESS for to step out if Mr Ruben is listening today yes proud alumnist do 110,000 Stadium there the Rubenstein Stadium he uh he at Duke has put a lot of money into the library and it is the Rubenstein library is a beautiful building that he has refurbished and remed committed yes okay um and it pains me as somebody who grew up in Chapel Hill to say so but uh it is a beautiful campus thank you for that summary Good Tidings there Jess mton can't concentrate today Arkansas Texas A&M

Bloomberg surveillance today brought to you by con res advisory Assurance tax discover game-changing strategies to maximize value optimize performance and manage risk put your business at the Forefront and thank you con Resnik for your commitment to the show it's Friday we're trying to get to the weekend except we got a small matter in 27 minutes the inflation statistic that Mr Powell is concerned by so we'll give you full coverage uh of that uh as uh as uh well from the Interactive Broker Studios with our Bloomberg business flash John Tucker all right uh Futures ahead of

that kind of mixed right now uh after the S&P 500 hit its 42nd closing high this year Traders are looking for the fed's preferred inflation indicator again that comes out what 28 minutes for Clues on the trajectory of rates uh after economic growth was revised higher uh yesterday Costco shares edging lower falling in pre-market trading after the warehouse club chain report a narrow Miss on Revenue estimates right now the most active pre-market that belongs to Nvidia those shares right now they are down half a% China the CSI 300 index rallying 4.5% wrapping up its best

week since 2008 and here's one not sure what impact this is going to have if it takes place anyway the world's top container carrier it's MSE Mediterranean shipping they're urging customers to move us cargo through East and Gulf Coast port reports before the plan start on Tuesday of a dock worker strike that's possible uh not looking good right now so this threatens to paralyze as much as half of the nation's seabo uh Seaborn trade volume so who knows well thank you to all that have emailed me on this particularly out in YouTube live chat this

has been a real source of conversation I mean it's not a small matter I mean we're going back to like all those uh supply chain problems potentially back to the pandemic but it's like real and you know it'll be interesting just to get to Tuesday uh will be interesting this is a joy David guro wants to ask Christina Hooper about economic questions I just want to go to the moment right now people in every school with kids who are 17 and 18 is in a total lather about College Planning you are the definitive liberal arts

major from Welsley College good morning 929 FN from M katad down BL Island how did you get from Liberal Arts English History at swellesley College to the Grind at Invesco how did that happen well first I'll say it's not a grind but uh what I did do was realize that while I had a wonderful education uh I needed some practical components to it that took me to law school which wasn't actually that practical a lot more philosophical um and then business school and then uh and then a masters right but the liberal arts education still

has value that's where I am absolutely my daughter's a first year at Vasser and is doing the liberal arts thing herself she taking a foreign language she that's a good question I think she I think she has to but I'm not sure she started and of course I have a son who just graduated from Georgetown last year he was very much in the liberal arts um uh sphere and is now embarking on a career in entertainment which means that he's a part-time bar got he got a parttime barista for now September 28th can you get

me to October not that I would know anything about that good morning Paris David Sav us lovely to see you I saw on your latest note the Maya culpa at the top you among those who didn't think the FED would go as big as it did at the last meeting so it has um what does that say to you about the path forward for them and help us just understand the magnitude of that of that move as we look forward here well I was worried that it would signal the wrong thing because right exactly because

of when we've had crisis Cuts in the past or 50 basis point Cuts they have been crisis Cuts in in recent past and having said that though I think J pal did a very good job in the press conference and you know fomc members subsequent to that have done a great job arguing that this is a preemptive cut to keep things the way they want them to be and to and the way they are and that um the economy is still on solid footing I think it's critical to get that message because that's the most

important question on investors Minds right now we talk so often about the long and variable legs to lean on that that Trope and that famous quotation here they're doing this preemptively do do they have a sense of how much of this is Art versus science so they they want to keep things that the way the way that they are uh how much confidence do you think they have that this is going to going to do that for them I think they're fairly confident I think we have to recognize there is a pretty significant psychological component

to all this and so they're doing everything they can to stack deck by encouraging confidence it's really not that different than Chinese policy makers right now right I mean it's there's the headline there you it's the same thing it's the ey and and I do think there's a lot of data to support it I mean even if we go to consumer confidence on Tuesday there was a lot of of I would say an outsize reaction right but if you actually look into uh the the details consumers are are down on the economy it's dropped significantly

um in in their view of it but at the same time they still want to spend they want to go out to eat they want to go to the movies so I think of it as the eore economy Christina Hooper you are hardwired optimism on the American economic experiment and even take it over to the political experiment which is may be tangential to what you're doing at Invesco the number one wrong of the last 18 months was the Gloom on recession you didn't call that why did so many people get so wrong the recession call

it was hard to imagine an economy holding up as well as it did given how aggressive the tightening cycle was and so I understand why there was so much Gloom but what I looked at was things like the fact that about 92% of outstanding mortgages are long-term fixed rate mortgages so the transmission mechanism and and the average mortgage rate was about 3.62% so the transmission mechanism just wasn't as powerful in the us as we saw in other economies that went through the same thing when you I mean I don't know if people are doing postmortem

yet on how this has happened I guess Jackson Hall we got a taste of that as as Central Bankers gathered to take stock of the fact that Lo there hasn't been a recession how much of that do you attribute to luck to the uniqueness of the moment what's the lesson from what's happened here over these last few years in terms of the policy approach that we could carry over to Future God forbid we have another pandemic but future to Major seismic events like that well I think a lot of it has to do with proactive

policy makers what we saw in this crisis and and it really was a very significant one was that policy makers would much uh faster to act and act decisively um provide significant stimulus the kind of fiscal stimulus we saw in reaction to the pandemic was just so big compared to what we saw in reaction to the global financial crisis is that because the the tools now aren't novel so going back to the global financial crisis we were kind of pioneering new techniques now there was experience watching them being deployed in that last incident knowing how

they could work and knowing perhaps that they needed to go bigger there was a need a recognition of the fact that going bigger might help well I think some of it was learning from past mistakes but I would argue that actually the bigger uh Force for the economy was not the monetary stimulus but it was the fiscal stimulus certainly it needs to go hand inand but it was just this very very powerful fiscal stimulus that actually made it into the hands of consumers that made the difference you have a difference which is within your Strat

stry you've got this Bond colossal debt colossal loan colossal senior loan colossal called Invesco what are the pros on the fixed income side telling you about coupon right now well I think there's just a general excitement around fixed income and a view that we're almost in a golden era for fixed income uh that we're going to see rates coming down that the economy is not going to go into recession and so you have you can find opportunity in in high yield high quality high yield in municipals in she sounds like the regional marketer for Kansas

City Christina that's great that you got a great call it's a golden age and I I I love it sounds like a Casey Musgrave song Christina Hooper where's your terminal value on that what the fix guys want to know is are we going to an rstar 2% lower I doubt it higher where's your RAR where fixed income's going to well well it's probably in the high twos but I think this is very much a moving Target and so you know it's it's certainly um a a valuable academic exploration but we have to recognize that it

may not be reality okay Christine Hooper thank you so much particularly in the liberal arts of uh Wells College and what our he's a barista temporarily PARTA make it $250,000 may I help you Christina Hooper thank you so much with uh Invesco really a soft Landing perspective there is is as as we can uh what AM we looking at Green on the screen Hooper lifting the market we are red on the screen now up two we've got inflation data key inflation data in 20 minutes well I talked to Mike mcke I got my briefing from

Mike mcke says it is important but it's a compendium of what CPI and PPI and eio do yes I mean I've been asking about this all week but Wonder given the new the new uh deeper focus on the labor market yeah obviously this matters but not as much as it did I think that's great you turn to take my job what are you doing no no no please I'm working as a barista half time thank you Tom needs more coffee could you got you know out of our expended be be sure you know she uses

the railing off the jetscape and all that you know fishes up to D Futures up 23 Christina thinker Christina Hooper at Invesco the vix 15 point 46 uh uh this morning uh with our news in New York City Michael bar thank you very much Tom David and John hurricane Al has made landfall in Northwestern Florida as a category 4 storm as forecasters warn of catastrophic flooding along the Gulf Coast alen came ashore last night in the big band area of Florida alen has weakened to a tropical storm as it spins through Georgia and is extremely

dangerous Florida Governor Ronda santis when Floridians are wake up we're going to be waking up to a state where very likely there's been additional loss of life and certainly there there's going to be loss of property you're going to have people that are going to lose their homes uh because of this storm Florida emergency management director Kevin Guthrie if you are hearing trees snapping in your area take immediate shelter go to an interior room away from Windows and Doors most likely an interior bathroom close the doors and get as low as you possibly can flash

flood warning things extend far beyond the coast up into Northern Georgia and Western North Carolina Global News 24 hours a day and whenever you want it go to Bloomberg News now I'm Michael bar this is Bloomberg Tom David and John Michael bar thanks so much thanks to CBS Sports for a nice compendium Michael bar with Helen and this is not funny it's like really serious we may get Atlanta New York Mets a double header on Monday or even just one game if it's needed right yes yes yes one game if is needed and then two

if if which brings up the point how do you schedule that do you you know you put one in the prime time or what happens yeah we'll have to see but again safety Rob Carolyn in the 9:00 hour from New York City Bloomberg surveillance [Music] [Music] [Music] [Music] markets headlines and breaking news 24 hours a day on Bloomberg Radio Bloomberg television and the Bloomberg business app this is a Bloomberg business Flash and I'm John Tucker in the Bloomberg Newsroom with this Bloomberg business flash uh Stock features right now slightly higher as we wait for the

fed's preferred inflation measure a Bloomberg economics expending soft reading on core pce inflation that should uh kind of ease any concern about immediate upside risk to the rate of inflation and consumer spending they say is likely to slow even as income growth remains robust and as inflation cools Costco Shoppers they're buying more Costco Wholesale posting higher than expected profit but they also had a narrow Miss on Revenue estimates arm Holdings they approached Intel about buying the chipmaker product division but they were told the unit is not for sale and Bristol Meers squib that is rising

pre-market the gained approval in the US for the First new type of schizophrenia drug in seven decades and of course this has open a fresh Avenue of treatment for Millions with the mental disorder right now down Futures 27 points higher S&P e mini Futures up two the NASDAQ futures they are nine points higher and we check the markets for you all day long right here on Bloomberg Radio I'm John Tucker that's your Bloomberg business flash David and Tom John Tucker thanks so much uh David guren for Paul 3M Tom King we welcome you on a

Friday reading in through the weekend trying to get to next week trying to get to Q4 Ira Jersey scheduled to be with us here in about 6 minutes on an important inflation series we'll move on there nick uh Nas in TB with us in the 9:00 hour as well here's the Dirty Little Secret with heavy weights in research like at Robo Bank Jane Foley she publishes and it's seven pages you start at the back this is the pro secret of how you read a research report yes like Cliff Notes you figure out what Lear did

uh right at the top you're not reading in Reverse that's what I thought I thought you no you're not reading in Reverse you just go back and see what Foley says about the FFX Market and then our world blows up like we saw with China this week joining us now Jane Foley uh with a research note you know it's about what's going on Swiss uh Frank on the Move in that but Jane fer you get hit over the head by China monetary announcements and then China fiscal announcements how did you respond to what you saw

in China you know I think this makes a really big change for many of the markets I cover in G10 I mean obviously uh uh well Germany for instance uh China has been Germany's biggest export partner for a number of years now and so that should really boost European uh growth Outlook through the German trade Channel but then you know look at Australia look at New Zealand Australia and New Zealand are the are the best performing G10 currencies over the last five days and that is despite the fact that the RBA has perhaps become a

little less cus so you know China is is seeping through and and and this sort of optimism will have quite a big knock on impact well Jane cut to the chase because John Tucker's got a you know he's got he's got a make some money right now where's the big where's the big figure move on this China announcement I quite like the Yazi so for instance even though I'm talking about the German trade channels providing a boost to to to the to the euro we've had this week another B of speculation about whether or not

the ECB October meeting is really alive one I mean look at today's German and French CPI data they're pretty soft meaning that the official forward looking or Flash CPI estimate for the Euro Zone next week is also probably going to be on the soft side so if you look at the the relative weakness of the German economy maybe the French economy if you look at the relative strength of the Euro trade weighted index well you could put together an argument that says you know maybe October should be live for the ECB and and yet you

look then at at Australia look at irono prices again pushing up that's pretty good for the Australian fundamental backdrop which so you're you're lying Australia against who against the Euro I I think that's probably bet I I think that's probably a decent BET right now and and you know it's um you know it be far more difficult right now to trade say Aussie New Zealand because New Zealand is also going to get a big trading boost through that China uh demand uh Channel assuming of course that it does come I mean David G I've been

here for like six years and I've never brought up E A have you just you can do that in the good morning Tom sukunda you can do this on the Bloomberg Professional Service it's got big figures to move to strong Australia back in 2022 like how he did that beautifully done nailed Shameless PL Jane I wanted to ask you about Japan we've talked about China let me move over a little bit Eastward and ask you about what we've seen there there's been a political story there obviously it's been a central bank story uh as well

what are we seeing in in the end well you know we've got Isa now as the the ldp head likely of course to become the next prime minister and the Market's pretty relieved because I was up very early this morning and I was watching that Yen and the market was very nervous uh that he wouldn't win at the runoff for that uh election and that we would have somebody there I can't say her name unfortunately I'm not great at pronouncing Japanese but she was the candidate who the market thought would be criticizing the bank of

Japan for interest rate hike so the Market's relieved she didn't win the runoff instead we do have isba um and the market thinks great you know he will come through with perhaps some fiscal uh stimulus for Japan uh and also more likely to leave the the bank of Japan alone and allowing the market to continue to think that there will be another interest rate hike perhaps around the turn of the year so um you know when we see the level in Dolly Yen creeping back to to 145 and you know we were pretty weak on

the Yen this morning you know I do think that it's offering opportunities there I do think that the Yen will Trend to firmer levels against the dollar over the next few months and I think there's an awful lot of fundamental change happening in Japan which you know is is behind what we're all talking about which is just interest rate differentials we won't make Tom pronounce the Japanese name either although I'm tempted to John Ry wanted me to learn Japanese I went down in flames Absolut down in flames lasted a cup of coffee sh that could

happen um chane you know we we we focused so much in China over the course of the week and I'm interested in you kind of dovetailing that with the the FED decision that we got last week uh sort of what the the fed's uh beginning of the fed's rate cutting Cycles is meant for these other other banks around the world obviously the Chinese case is is a special one given the approach and how they've they've rolled out this this many day policy plan proposal um what changed with the FED when you look at central banks

more broadly as you look at them kind of globally well I mean you know for China as well of course they would like to have a firmer amimi so it sort of helps play into that sort of story and perhaps you know giving them a little bit more freedom to to act um potentially on on the monetary policy side but we you know I think the question is you know the fed's gone 50 the Ricks Bank earlier this week went 25 but it said it could go 50 before the end of the year the market

was speculating that the S&B has gone 50 I I would imagine that must have been a a pretty close call for them because inflation is pretty soft in in Switzerland too and Canada of course could has indicated that it could use 50 so you know the Market's beginning to think well you know are we justifying or are we justified in in the state of these various economies 50 basis points in incrementals and I think the FED has been a Catal Catalyst in that sort of discussion although you know you could say well look you know

the Swedish economy is is weaker than the US and so is Canada so so maybe there's more fundamental adjustment uh needed perhaps in in those other economies but you know it also suggests that risk appetite can potentially push higher for for some other perhaps Emerging Markets if you see the ECB coming down with rates if the fed's coming down with rates you know maybe I think there's there's a little bit of hope that you know easn European countries could see a little bit more risk appetite too and and certainly that argument gets another boost when

you about China Jane Foley thank you so much nice update on China there and looking for the big figure I learned that from Bob since you say big figure I don't have the red Ferrari but you look at you say big figure and you're like a big deal in foreign exchange you know Mr s still in Connecticut Mr s he running goalie Camp gotta you know it's amazing it's he said he had no idea how lucrative it it'd be he gets these parents yeah they want their kids to be an NH G veteran yeah they

want a grizzled veteran in there and you know he just runs a really really stri goalie Camp it's like you know it's like D1 bound you know that kind of thing and his nephew is my dad's student oh very cool so okay there's the V diagram we have an inflation report in five minutes joining us now Ira Jersey Bloomberg Intelligence on fixed income Ira I got a sigi here I got to get this in before we have the fireworks of the inflation report early Premier League come on Aston Villa up with the big boys were

you surprised up there yeah a little bit um but now we're getting into Champions League time so I'm worried about their squad depth quite frankly um because with all the games that are coming up and injuries coming up Mr Emory is the coach he's getting a lot of press New York Times writing him up this week what's his pixie dust at Aston Villa uh I just he knows how to win and and I think that that's really important so he did it with Sevilla he he really knows how to win some of these European competitions

too like the Europa League he almost always brings uh brings teams that are kind of you know lowish uh on the low end of the big uh big names in each league that he's coached and uh and he brings them to Europe and they win Ira Jersey thank you for that perspective oh yeah there's an inflation report IA I'm worn out by the tension of inflation reports the vector is disinflation and sth it's almost a CPI snoozefest why is this report important in four minutes yeah just because the the fed this is what the FED

looks at and the waiting are a bit different than CPI but but we know after getting the CPI and PPI reports more or less where this uh this report's going to come out um you know there's there's some people investors who are talking with with me this morning and they were like well is it going to be a high point1 or a low point1 like are we going to get like a 0.12 or a 0.16 like four five right like yeah you know there's all these uh permutations like like what does the headline mean um

but if if we see a 0.1 even if it's a quote unquote High 0.1 you're still shows like you said Tom there's a disinflationary trend going on and that's one of the reasons why why Ira jerse is important okay when Dominic conom and Ira Jersey were holding down the fored credit s there was nothing to two digits or three decimal points or four decimal points it was legitimate concept to figure out where you're going David gura I can't see Jersey doing High point1 Point whatever Ira um help me understand sort of how how important we

picking what Tom said looking at the balance between the various blends of economic data that we're getting now vers labor versus inflation is this of less Paramount importance than it used to be well no I I think the the PC deflator and all of the inflation numbers are very important I think that there has been a shift to your point I think David in that if you go back 18 months ago everything was about inflation basically the FED had one mandate and that was get inflation lower get inflation under control and now that mandate is

more inbalance and you've heard J poell talk about that you know that's been shifting more or less probably over the course of of the last six or eight months where uh as inflation's come down you've gotten the PC deflator below 3% now the now you have to consider okay where's the overall economy in a situation where where the job market was bad but you had inflation of 5% the FED would probably still be focused on inflation that just not the that's just not the point anymore now it's uh you know okay the the the labor

market is not as strong as it used to be although it's still not terrible quite frankly um so so the FED feels comfortable easing policy whether or not they'll have to stop early and maybe only cut to 4% is one of the reasons why we have to focus both on the inflation data and the jobs data when we get it in a in a week's time we're going to stay with Ira Jersey here to get perspective coming off see how the bond market moves I'm looking at the 10e real yield 1.61% maybe elevated a little

bit through the week as we see the yield regime push higher the 30-year Bond Jersey never looks at that 4.11% so what we're going to do we're commercial free Across the Nation around the world we thank uh all of our uh people for that interactive brokers con Resnik as well as Commonwealth and of course we'll get to the Commonwealth statement here in a moment but Ira Jersey here one minute away from this key inflation data and then we go stronger Lindsay piga will join us and she's been really really persistent about everybody slow down what

is it David 47 rate Cuts yes before spring training it's at the high end before spring training and Lindsay saying no way she's just saying absolutely uh not so we this is strong stay with us Dr P and will join us from steel we're going to have Ira Jersey back with us in about 45 uh seconds this is on inflation and what it means for the Federal Reserve is they meet let's remember they have two meetings before the end of the year November 7 2 days after the election will there be an election decision by

November 7 and then December 18th to round out uh the year so that'll be interesting to see this inflation report in the fomc effect and now from New York with the details is John Tucker all right just coming across uh the pce inflation we're expecting 2.3% at least uh that's according to the economist survey by Bloomberg U still waiting for that so let's go to personal income that is up 2/10 of a perc the expectation was for 4/10 of a percent 3/10 of a percent the prior month uh personal spending also lower up 2/10 of

a percent the expectation was for a rise of 3/10 of a percent and that's down from half a perc from the prior period and still waiting for the inflation data PCA index month over month up a tenth of a percent that's right in line with estimates uh the PC price index month over month again up a tenth of a percent and here we go the bigger numbers 2.2% the pce inflation this is on a year-over-year basis the fed's preferred measure so that's coming in little lower than expectations and down from the previous month John tuer

thanks so much in the ballpark yeah with in the ball say Futures up three they doubled Futures up seven right now yields have come in and again I look at the 10year re yield it comes in a a little bit this is J pal friendly I think we're going to hear that from Ira we're talking here folks to give Ira Jersey the pro to actually digest the data as he can only do with the Bloomberg professional service but I'm sorry uh David this helps out jpul personal income in a little bit personal spending in a

little bit we don't have the revisions on that yet that's important but core pce was a02 and it came in South 0.1 maybe rekindling the disinflation uh tone and then you know you get some other inventories in that but all in all this takes it away from the inflation fear Futures were up three they're now up six uh it's sure and I don't want to make a big deal about it but nevertheless something that jpul can sink his teeth uh into Ira Jersey please from Bloomberg intelligence your thoughts yeah I think your analysis is spot

on uh you know I haven't been able to dig into the details Yeta if this gig doesn't work out I'll be I'll talking about my analysis yeah this definitely has to make j po and the FED feel pretty decent about their decision to to cut 50 basis points you know the getting a 0.1 on inflation is important but I think the fact that you've had a deceleration in spending and uh and incomes um certainly is is again another Trend that that some people were worried about where if the economy remained okay and consumers and the

consumer didn't start to have some cracks then uh there was a fear that you know maybe the the Fed cutting would actually just you know put fuel into the fire and inflation might re accelerate but at least based on this one data point and you can't take a so much away from this one data point but based on this one data point they they clearly um you know had some uh good information in in terms of their forecast for at least the very near term um looking at the uh the price indices and I think

it's it's interesting to note that the uh year-over-year price index came in a little bit soft so you know very close to their two % Target right 2.2% is not far away and actually you'd have to say that look if it was 2.2% persistently forever the FED would still declare Victory on inflation um just kind of picking up on what you're saying about this one data point and how you look at it I think my theme for the morning is how much is it data driven fed or data point driven fed maybe I'll throw this

out there you can comment on it I Tom you can opine on this if you if you want as well but um do you see this in a larger context or are we still looking at this as Point by Point IRA yeah well it has to be Point by point but it's it is the the larger context in terms of the trend right and we know that the disinflationary trend is at least continuing and confirmed by this report as opposed to you know stabilizing or or uh or accelerating um you know there there is a

there is a a nonzero chance that inflation next year could start to re accelerate if we have tariffs or something that wind up affecting Goods prices and um and and corporate margins start to get squeezed and corporations don't want to um you know don't want to cut prices and need to raise them in fact in order to keep their margins reasonably High those are all question marks that we'll only find out over time but based on the current Trend based on most forecasts it looks like we have this uh this longer term disinflationary trend is

still intact and and that's something that is going to give U you know give Comfort quite frankly to the Doves on the uh on the fomc we're going to talk to the Harvard football coach here later in the hour I'll be waiting Ira jersey for the Harvard economic coach Jason Ferman in his annualized Trends which clearly show a vector of disinflation how many months out now how many quarters out now are we from the pandemic where we're pandemic free stimulus free well we're not stimulus for yet you know so one of the yeah you know

one of the ironies is anytime a politician tells you that they shovel ready projects that shovel ready plus two years or two and a half years so we're still seeing even some of the 2021 stimulus flowing through and plus you have the uh the the IRA is is also uh throwing still has some money in the system as well um that is slowing right there is less stimulus being put into the economy today than there was a year ago and and that'll decrease again next year but there still is some fiscal stimulus going on when

you look at deficits it looks like we're going to have uh the treasury Department's going to have issued $1.6 trillion in the fiscal year that ends today um so you know when you think about um you know $ 1.6 trillion dollar that's a non-trivial um you know stimulus that's still going through just because you have this pretty large deficit you know totaling you know four plus perent 5% of of GDP so um so so as we but but as we get into 2025 a lot of that stimulus does start to taper and as that occurs

you'll you'll have to you know hopefully have have continue to have a decent economy but I'm I'm skeptical that we're going to be able to maintain these types of economic levels over the next uh uh 6 to 12 months and I I do think that we're probably going to see a recession next year we continue with the IRA Jersey of Bloomberg intelligence a few more minutes Dr piga of Steel is on Deck Lindsay pza with a really strong opinion about the certitude of soft Landing she pushes against that a singal will join us some City

Group on short-term paper and FX as well and then Gina Martin Adams will join us at the top of the 9:00 hour on earnings in the equity markets forward nasin talb will be with us at 915 Ira Jersey one more question if I could the visibility of the 10-year yield and a fan distribution around it out 12 months where's your single point 10year yield and what does the fan distribution around it look like like yeah so so we actually put out a note on that earlier this week Tom where where you could actually go in

and put your own probabilities of a recession or reacceleration in the economy and and uh and it'll spit out where the 10-year yield should be um we we think that we're going to Rally a little bit more and that's on slowing economy continued disinflationary Trends uh at least going on a little while but ultimately by the end of next year we think that 10-year yields will start to rise again so even though uh we might trough around 3.4 % or so on the 10 year so not that far from here another 25 or 30 basis

points we think by the end of next year we'll start to price in fed hikes in 2027 2028 and so you wind up seeing a steepening of the curve he's like it's how does he do that how does he go out to 2027 David they don't get it you know the market goes out to 2054 Tom I mean come on you have to have a forecast for something chastised by Jersey iron Jersey go away with Bloomberg intelligence thank you for some wisdom there Jersey lifting the market futures are up three then up six now Futures

up nine Nasdaq futures up 210 of a percent our economic indicators even when they get them wrong and Ira Jersey corrects me economic indicators are brunched by Commonwealth supporting more and 2,000 independent financial advisors a 2:1 advisor to staff ratio small firm attentiveness big advisor impact go to commonwealth.com to learn about uh their consultative support support and Technology dying to talk to Lindsay pigsa of steo she's really pushed against soft Landing certitude Dr P thank you so much for joining uh Bloomberg surveillance how remote is a soft Landing well I think it's still a possibility

it it's still out there as as a potential for the economy but it is going to be challenging for the FED to achieve that remember part of the soft Landing is instilling price stability on a stained basis so getting us back to 2% not just touching it but maintaining that along with the prospect of avoiding a downturn now I I do think on the growth on the growth side at least in hindsight the US economy remains on solid footing but I'm not convinced that the FED has the the focus has the stomach to get us

back to 2% they feel they seem to be very complacent at this point with this very tepid uh somewhat sideway an uneven movement in inflation at this point I know they would beg to differ we have heard such adamant from the Fed chair about that 2% Target but it raises this larger question of when do we get there there will be no Declaration of victory of course but but what's it going to take for you to say look mission mission accomplished pick your Trope uh the FED has been able to win this this fight well

that's right the fed's forast does not look for 2% on a sustained basis until 2026 so some two years from now but in order for me to get a an increased level of confidence that we will get there eventually is further meaningful progress now this morning's report was encouraging when we look at the headline number but the core after several months of sideways movement has now ticked higher so we're moving in the opposite direction of that 2% price level and you have to couple that with the lack of movement that we saw in the core

PPI the core CPI so there's a number of key inflation metrics that are showing no further Improvement offering no further confidence to the FED that we are on a sustainable disinflationary Trend so I do find myself in the camp of of the so descent in December Michelle Bowman saying no there's still inflationary risks out there there's upside risk potential and we need to stay focused on that inflation component of the Dual mandate Lindsay if you and I were in the echles building looking at that dashboard looking at all of these data in in compliment what

what is what is or what are the the the the types of data that stand out the most to was most important here as we move ahead well I think as the FED is looking at the key data points are the inflation data and the reads on the labor market but what's interesting is when we look at the labor market data independent of any commentary from the fed or the media the market the labor market is still near full employment the unemployment rate yes has ticked up from a low level but we're still at 4.2%

well below what the FED designates as that full employment range the desirable a or a sustainable level of joblessness jobless claims have not ticked any higher so the other side of the inflation or excuse me the other side of the labor equation job destruction is not seeing any upside movement we're still talking about over 7 million job vacancies and on average we're still creating over 180,000 new payrolls month-to month so that's still indicative of a tight is labor market thank for joining us Lindsay p with steel thrilled that she's with us today after this report

it lifts Market uh quiescent uh CPI pce I should say price index Futures up three now up nine NASDAQ up 35 points 2/10 of a percent small cap leads away up a solid 9/10 of a percent the vix comes in ever so slightly 15.29 looking at the yield uh space 10year yield 3.77 in three basis points I always look at the 10-year real yield 1.60 comes in two basis points sort of inconsequential it's now time for the math portion we do this with pza of Ste John you're going to get a coffee while you yeah

Lindy I'm going to cut to the Chase from the cheap cheap to the high high fed funds rate we have a belief in 8 n 10 rate cuts to come to get back to the center tendency 2.8 is 2. Nish maybe 3% as well to me it's wildly nonlinear aren't the next 25 25 or 50 basis points sort of a nonevent and the real sweat for the FED comes say the spring of 2025 well yes in the longer term and and in terms of the longer term timeline for getting us back to neutral but I

would push back and say that the next two meetings are going to be key in terms of setting the tone for the fed's willingness to remain data dependent if we see a stronger than expected labor report coupled with this morning somewhat disappointing move in the core pce I I I think the FED is going to have to respond with a much smaller rate cut or a potential skip of a meeting and if they don't that's going to send the message to the FED that maybe they're less data dependent than they're indicating and they are on

somewhat of a a a blindsided Focus to get us back to a particular position in policy regardless of what the data is saying across the history of the fed and particularly the more modern fed which labor statistic really matters is is it non-farm payrolls is it the unemployment rate is is it something David gur and Tom King don't understand I I think the fed's going to look at a number of factors but if we had to look at one it's going to be the unemployment rate it's going to be that fluctuation into or or still

away from the Full Employment range now the non-farm payroll number certainly seems to set the tone for Market expectations but when it comes to monetary policy fed officials typically focus on that unemployment number to really gauge what the moment momentum is in in terms of labor market conditions what you heard there folks really really important David I want to say you and folks again we're commercial free for cross this hour on the pce statistics the market lifts on it as well we thank all of our good sponsors for allowing us uh to do this David

gura Anna Wong at Bloomberg economics and she pushes against Dr piga there's no question about that she's got non-farm payrolls 3month moving average 116 she does a revision which is hugely controversial and lowers that number and that's a polarity between wrong and Pixi Lindsay let's marry these hard data with the softer ones we had Dana Peterson on the show a little earlier in the week and talked about those consumer sentiment numbers that were softer than a lot of folks expected and I think spooked some folks in the market as well how do you look at

them in in compliment and you were talking about you what would happen if uh we saw a real sharp decline in in in employment for instance how the FED would react how would both investors and consumers react to that as well because that has to be front of mind for fed policy makers too yes they're kind of looking at this in a very you know in this vacuum of looking at it from a policy perspective but they have to be aware or cognizant of um how people are going to react uh to what they're doing

as well a absolutely and we have to also be aware that not all the data is going to point in the same direction this is not going to be an easy decision for the fed or an easy interpretation for for the market by any means but when we look at some of this secondary and tertiary data what we're continuing to see is an ongoing res Ilan consumer now as we saw this morning somewhat softer income and consumption numbers but looking at the Q2 GDP report we anticipated that we knew what the third month was going

to be but when we look at that on average we're still talking about a 3% growth rate and a 3% spending rate that's still very indicative of a solid economy and an economy that can withstand a very slow and patient removal of policy firming so I I go back to the fed's decision in September the biggest risk of 50 basis point move was always sending an inappropriate signal of concern regarding the state of the US economy the current level of weakness as well as an inappropriate signal that the FED is willing to rush back to

a state of not just neutral but accommodation to provide stimulus to an aien economy as opposed to Simply removing their foot from the break and moving back towards neutral as the data begin to normalize Lind you get one final question here and this is immense respect and part of the pigs that charm folks is she's out in the Midwest and you know I mean she's putting up with Cubs White Socks and all that Lindsay seriously the FED has to aggregate towards one policy can they not do that because the American labor economy and the personal

income around this polarized economy is so split can they not succeed at aggregating well it is difficult when we talk about the resilience of the consumer it is dangerous to paint with a broad brush because we do see that those at the middle and the lower end of the spectrum are having a m much more difficult time fairing in this environment amid higher borrowing costs higher prices the resumption of student debt payments meanwhile those at the top are not necessarily feeling a pitch amid a growth of household net worth over $16 trillion dollar in the

past year so we do see two very different themes in the underlying consumer and it's not a difference of halves and Have Nots but asset holders and non-asset holders so that is complicating fed policy but that's nothing new we we always see that bifurcation but what we do see which is new is this growing divide among fed officials themselves while the median is looking for 50 basis points by the end of the year nine fed officials say no we're going to see maybe 125 basis points cut or no further adjustment great so that divide alone

I I think underscores how difficult the December decision was and how difficult further decisions are are going to be David if P was Governor she' descent at every meeting she'd be the Catherine man of of American economics she'd be like pounding the table Jay no Jay no don't do it Lindsay pza thank you so much it's steel there pushing against at the soft Landing we've got a huge hour and a half coming to you Nasim talb will be joining us in the 9:00 hour from the Interactive Broker Studios our Bloomberg business flash John Tucker all

right stocks are up yields are down not by much down Futures right now after that that report 94 points higher that's up 2/10 of per perc S&P futures up 12 that's up 2/10 of per perc so if we stay on this course the S&P 500 on course for another record close uh Nasdaq futures right now up 46 of 210 of% 2-year yield the more policy reactive 2-year down just about five basis points 358 the 10-year four basis points lower 375 rate of inflation continuing to get better uh this is what fed officials want to fed's

preferred inflation measure very close to their target coming in at 2.2% lower than expected lower than the previous reading uh spending and incomes also Rising but lower than expected lower than the previous month and again the Futures are pushing higher right now if uh you don't really care if you think inflation is now in the back seat or the trunk of the car don't worry the jobs report that's out next week and Milestone alert I'll do this real quick assets held by exchange traded funds in the US have now hit $10 trillion for the first

time ever that's a milestone we check the markets for you all day long right here on Bloomberg Radio I'm John Tucker that your Bloomberg business flash David trunk of the car John well it's metaphor David is what we call that see I thought it was a New Jersey thing thank you so people in the back of cars the trunks in New Jersey keep it up John Bloomberg's surveillance this morning this morning of the inflation report report brought to you by ibkr financial advisor switch to interactive brokers for lowest cost global trading and TurnKey custody Solutions

no ticket charges no conflicts of your interest at ibkr.com we're out on YouTube subscribe to Bloomberg podcast that's the best way you can help the gura household is to subscribe to Bloomberg uh podcast good morning on your commute Across the Nation on Apple carplay Android auto on the quter from 991 FM Washington up to Bloomberg 1130 in traffic congested New York and to 929 929 FM in Boston good morning um as well we continue commercial free in this hour uh joining us now a Singo he's a city group we had Jim Karen on from Morgan

Stanley so we had to equal but's keltech engineering requirement joining us now uh uh from keltech of course with all the mathematical rigor uh a sing of uh City group actually I love what you have there's two Powells that showed up there was Powell at Jackson Hall speaking for himself and you write Powell at the press conference more towards a committee which J Powell is actually singal focused on thanks Tom um yeah I do I I totally uh agree I think like we do have these two different versions of J Powell and it's almost like

you know which J Powell will the real J Powell please stand up and the real one is quite frankly the one at Jackson Hole uh and that's what we saw him being able to push through that 50 basis point cut in the September meeting uh and then he had to kind of you know hit some hawkish notes in the press conference to kind of signal for Bowman and the other uh more hawkish characters but when you do have uh a a chair of the committee who leans one way or the other either the the chair

is going to move back to the center of the committee or the committee is going to move and you know my bets on the former I think the committee is going to start moving much more towards the doish side and fall in line with Jay Powell uh from Jackson Hull and really focus on the labor market not on inflation I think that's the first Marshall matters Eminem Slim shete reference we've had on Bloomberg surveillance but I I app him for I do think with Ken it years ago we did fair enough let's get one more

I'm curious just about what what you're you you're talking about the the unanimity that J Powell has had over these last many years we saw some slight erosion in that I think at this last rate rate decision what's your perspective on how he has been so effective at doing that what the what the particular charm is of either J Powell the one that we're seeing public facing the one speaking for the committee or or for himself um and and what's the consequence of him losing that grip on unanimity I don't think it's as significant that

unanimity and that uh push towards that is not as significant as I think um in some other uh periods of of like the fed and I think having a descent and granted it was the first descent by a governor since 2005 but I think it shows that healthy debate it shows that there is um still some concern about inflation or perhaps there was still some concern about inflation now like I I would actually somewhat disagree with you know the previous guest I think inflation is firmly in the rear view mirror and this print today of

core coming in at 0.13 really should indicate that you know it's not the focus anymore so Powell shifted P shifted at the end of August in that Jackson hle speech to basically say I'm focused on the labor market Waller came out and said that the last CPI print made him shift and I think the rest of the committee with this print will shift a we've got to be short here we're just running out of time we hope to get you back I mean soon soon soon like in the next week or two a singal was

City Group just too short a visit we'll get him back for some real important Focus wrapped around the Dynamics of what we're witnessing in what we're witnessing in the uh Equity markets Futures up three up 789 they come back a little bit up seven right now I'm going to call it a churn to the market but with a bid underlying dxy show shows a little bit weaker maybe some tension there Yen off Japanese politics David gura mentioned ldp elections a new prime minister in Japan and significant Yen strength a 14259 a 139 close on Yen

would be a big deal we're not there yet please stay with us in the next hour nasing TB a spirited conversation a spirited young Steven Winwood [Music] hey from myet of crazy people I want to let me in baby I don't know what you got you better take it easy this made don't made you got give me some love give me give me some love give me some love it give give me some give me some every day [Music] [Music] [Music] [Music] [Music] this is Bloomberg surveillance with Tom Keane and Paul sweet are these stocks

under owned by institutional Wall Street a lot of these companies talking about generative AI with Lisa Mato on Market investors just worried about the ongoing sales slump in China and Michael bar with news a ship traveling through the southern red has been attacked the best in economics Finance investment and international relations this is Bloomberg surveillance on Bloomberg Radio good morning everyone Paul strey Tom Keane Michael bar Lisa Mato Matteo out John Tucker in for uh Lisa Mato Sweeney out Gulf Stream down to uh what are you in the Research Triangle down there yes it is

one of the points of the triangle but the RDU is the airport Raleigh Dr International R is there separate airports for Duke and un you know UNC does have its own airport uh there's an airport road that runs through town anyway it's a small you could get you could get the golf stream big football game today we say good morning to Paul Sweeny on aimon David gur sitting in which is important with the key Bloomberg pole we'll get to that within this hour David's been working that since 400 a.m. uh this morning really close race

for this presidential election one key insight there David right now the the ground that comma Harris is made up when it comes to the electorates perception of how she would handle the economy different from how they receiv President Biden when if he were running an incredibly busy hour ning TB will be with us here uh in a bit for an extended conversation with Scott uh Patterson we'll get you through after pce Futures up seven uh down Futures up 75 Bloomberg surveillance this morning brought to you by bam Mutual bam Mutual they ensure municipal bonds that

Finance essential infrastructure and provide guaranteed income to improve any portfolio be part of building America invest in bam B invest in bam insured bonds from the Interactive Broker Studios our Bloomberg business flash John Tucker all right uh right now stock futures indicate a higher open on Wall Street they're higher not by a lot yields they're lower after the data the feds prefer measure of underlying inflation also a household spending Rising modestly in August so this all unders scares uh cooling US economy the uh core personal consumption expenditures price index that strips out food and energy

increasing 1110th of a perc from July uh that was the smallest gain in 3 months on a 3-month annualized basis the measure rising 2.1% and that is just about in line with the fed's Target right now the down Futures 75 points higher that's up 210 of %. S&P e Futures 7 points higher that's up a tenth of a percent right now the NASDAQ futures 22 points higher that's up 10th of a% right now the more policy reactive 2year yield right now it's down four basis points that's a 359 10year yield four basis points lower that's

at 375 and we check the markets for you all day long right here on Bloomberg Radio I'm John Tucker that is your Bloomberg business flash David Tom John Tucker thanks so much joining us now for Chicago where she's interviewing to be the general manager of Chicago White Socks Gina Martin Adams Gina Martin Adams joins us uh here on your stock market your bull market forward Gina I'm going to cut to the chase there's all this noise China this China that da da da da da are we just discounting still double digigit earnings growth I think

it's a great point is uh the macro has often time over oftentimes overwhelmed the uh earnings in terms of commentary But ultimately earnings Drive stock prices and earnings have frankly continued to surprise the consensus right now the analyst consensus is looking at close to 10% earnings growth emerging over the course of the next year I would say the stock market is pricing closer to 5 to 7% earnings growth just based upon what our macro models suggest what's been so interesting about the last two years and I think this persists is the macro has been closer

to what the market price is where the analyst consensus even though they've been conservative are still not bullish enough and so that big Divergence is what create has created the uptrend in stocks is we persistently have this sort of negative undertone this negative view right uh that is embedded in the psychology that's embedded in prices but kind of the reality on the ground from corporations is that things are still improving and have been improving really since 2022 and that doesn't appear to be changing um analysts are slowly getting on board with that so certainly they're

you know expecting better growth in the next 12 months than they did 12 months ago but it is a slow climb Tech book Gina Martin Adams and she combines this like Ed Heyman with fundamental analysis technical analysis and her respect for the economic Gina Martin Adams what does the bull market chart tell you oh well I mean look the trend is your friend the stocks are still going up and to the right right so very simplistically when you're making new highs and More than 70% of stocks are still trading above their 200 day moving average

so contrary to popular belief breath is still improving we're making new highs even small caps are showing some signs of clawing their way out of their bare Market condition that has existed for the better part of three years there's just not a lot in the charts to complain about if there is anything to complain about it is really about leadership inside the market where we do appear to be sort of grappling with a potential leadership change away from the mag 7 toward the 493 other stocks in the S&P 500 sort of away from predominantly growth

towards s some more Val oriented Industries there are a lot of sort of internal CH a lot of internal churning happening uh but nonetheless markets are still making new highs especially the S&P 500 so there's not a lot to complain about from a technical perspective the only thing that I would say from a broad charting perspective that we're watching with a really close sort of eye is what's happening with momentum when we look at what's happening with momentum in the S&P 500 it's been struggling as a result of this internal Churn it certainly has confirmed

um the recent rally off of those October sort of depressed lows but nonetheless it's not as positive or not as strong as we would like it to see or like to see it and I think that that's something to watch going forward we do need to gather a bit more momentum to sustain the gains that we've had Gina great to talk to you and I wanted to ask you about this China story that we've been following over the course of the week and what it means for for us investors we talked a little earlier in

the show about the the pboc put uh on Chinese equities what do it what does it mean for for the palatability or attractiveness of of Chinese stocks what the bank has done this week yeah I think it's been tough in China honestly we've had you know a series of stimulus measures all year from direct purchases of Assets in the market to changes in policy rates to the news of this of this week um you know to the degree that It ultimately creates some more stability and economic conditions that's the thing that I think can draw

investors back into China it's a wait and see approach though with respect to China and it's been such a difficult Run for the last several years as a global investor starting starting to think about investment in China that we've had a proliferation of em Equity products excluding China just to try to get at where the other growth opportunities are in EM so you know I would say we need to see this manifest itself in real economic conditions and even more importantly real earnings growth prospects improving for China that's a long time coming yet because when

you look at em Equity revisions X China they are surging uh Equity analysts are getting much more optimistic about the outlook for earnings growth outside of China and analysts are not telling us that things are getting better in China yet so we need to see that momentum turn around there you know I got to ask you this Jean I know you're not on speaking terms with Allison Williams but the banks the banks for end of Q3 what is their business plan for Q4 how bad are the Cost Cuts going to be yeah I think first

of all I'm in on great terms with Alison Williams and I think she's a brilliant analyst in terms HR courses help Gina in terms of financials you know I think that it's going to be really interesting coming into this quarter because the banks spent so much of their time really cutting costs back in 2023 that that's been a bit of a Tailwind right remember 2023 was the year in which we saw tremendous Provisions a lot of concern about loan loss is emerging in commercial real estate decent amount of cost cutting coming out of that out

of that sector because the yield curve was tremendously unvert inverted right we've come off of that deep inversion in the yield curve over the course of the last several months that improves the Outlook um for net interest margin for some of the segments but it's still tough goinging what was most interesting out of the second quarter is that financials for the first time in a long time beat on Topline we saw better Revenue growth out of financial than we've seen in a very very long time that's what I'm looking for going into third quarter because

that's what's been missing in financials for the better part of five years not just sort of shortterm what's happening with a lot of Cost Cuts when we get into October and then even more importantly in the January season though I think you do want to start looking for layoffs are we going to see a surge in layoffs again this sector has been a big persistent part of that story from 2022 on financials as well as technology companies communic companies to a slightly lesser degree have led the layoff Trend they've kept costs very very lean and

that's enabling margins to continue to stay afloat there so there are a lot of moving parts to watch for in financials it's frankly one of the sectors that we've been watching most closely in this rotation because we are seeing much better growth start to emerge there and finally some investor interests but I think that that's mostly related to the yield okay Gina don't take the white sock job unless you can clean out the bullpen Gina Martin Adams from Chicago uh where she's on a job interview at kamsky Park which I will always call it I'm

going to fact check this entire interview Grandpa told took me to kisy park I saw Nelly Fox a few years ago only Michael bar on the planet knows who Nelly Fox is Futures up 10 G Martin Adams lifts the market with our news in New York City Michael bar thank you very much Tom David John and we have breaking news New York mayor Eric Adams has arrived at court in lower Manhattan a few minutes ago on char chares of accepting illegal contributions he was indicted yesterday it contained five charges alleging that the Democrat solicited and

accepted bribes or illegal campaign contributions from wealthy Turkish donors in return for various favors Adams lawyer Alex SPO told reporters yesterday this is not a real case a council General calls the mayor he asks for Courtesy New Yorkers do this all the time all the time the mayor says tries to see if something can be done and if not he'll manage expectations and when the council General calls back 5 days later and asks the mayor to make a phone call he doesn't even pick up the phone doesn't even attempt to give that courtesy Adams this

morning gave a thumbs up as he entered federal court Florida officials are beginning to assess the damage from last night's landfall from Helen it hit the Florida Panhandle as a category for Hurricane leaving a trail of Destruction Florida Governor Rond DeSantis urge residents to use caution if using generators do not use a generator inside your house there have been power outages there's going to be more power outages uh you can use a generator but make sure you're running it outside your home keep it away from Windows and keep it away from the doors Al Le

now a tropical storm is affecting parts of Georgia and North Carolina Israeli Prime Minister Benjamin Netanyahu is scheduled to address the United Nations General Assembly today Bloomberg Zed bter has a preview this comes as he is now saying that the military bombing of he B Targets in Lebanon will continue indefinitely us defense secretary Lloyd Austin says another fullscale War would be devastating for both Israel and Lebanon netanyahu's address comes a day after Palestinian Authority head mmud abas said regarding Gaza we will not leave we will not leave Ed Baxter Bloomberg Radio Global News 24 hours

a day and whenever you want it with the Bloomberg News now I'm Michael bar this is Bloomberg Tom David John news slow has been so extraordinary this morning we've just barely barely got to this but Michael bar the Detroit usually most teams have what Michael bar two rookies three tops yeah that the whole blasted team is almost rookies 12 rookies I mean the other day there was a guy on first and third and neither of them looked like they get a drink at a bar but now they're 85 and 74 the magic number is one

and they're up against a dreaded Chicago White Socks so you know it's going to get done a Victory from us means that we send the white socks to the worst record ever in Major League he not is he gloating when he says that is did did you see this coming cuz I did not no no and and Detroit is is electric because nobody in Detroit saw this coming okay Michael nobody cares it's just in your contract we got to do Detroit chat for 28 seconds each day Michael bar thanks so it's goingon to be a

great weekend for baseball thoughts to all of you in alen is Atlanta and the Mets uh wait for I believe it Monday Futures up nine from New York City worldwide Bloomberg surveillance [Music] [Music] [Music] [Music] [Music] markets headlines and breaking news 24 hours a day on Bloomberg Radio Bloomberg television and the Bloomberg business app this is a Bloomberg business flash he I'm John Tucker in the Bloomberg News and with this Bloomberg business flash we have Futures indicating a higher open on Wall Street a yield or lower we get validation the jumbo rate cut was the

way to go monthly core PC coming in below estimates that adds to the case that the US economy is slowing and it could be room for another large right cut a personal income spending missing forecast uh some of the individual shares on the move this morning Costco shares edging lower folling in pre-market trading the rarehouse club reported a narrow Miss on Revenue estimates a bristl Meers squib rising at over 4% the pre-market you just heard Michael Duce part of that story right now the down futures of 87 points that's a rise of 210 of a

percent S&P futures they're up nine the NASDAQ futures right now 42 points higher that is up 2/10 of %. and we check the markets for you all day long right here on Bloomberg Radio I'm John Tucker that is your Bloomberg business flash David at Tom John Tucker thanks so much we'll do the Market opening uh here at the bottom but for the next half hour uh joining us here is nin taleb and Scott Patterson in celebration of a brutal Buck I really can't say enough about this for Global Wall Street I'm I'm sorry this is

the adult book chaos Kings Bill Cohen William Cohen he wrote a book about Duke lacrosse it was brutal Bill Cohen just says Scott Patterson he's done it again which he did in 2012 and with dark pools and all that and the problem we got here David is we can spend the next three hours with taleb but we you know we got to give some love here to Scott Patterson who's only here because James Madison un University be Chapel this bring it up again that happened that was a black SW your book in full disclosure I'm

totally in nasim's Camp and Nasim knows that like Wicked in his Camp so when you set up your book which is the T TB team like JMU against the other team some French dude like UNC how did you set up that polarity describe the tension of chaos Kings yeah well it belief is that you can't predict markets so you just need to prepare for extreme events all the time uh black swans and I contrast that with another character a uh French Econo physicist named did sett who uses Advanced physics and other mathematical models to try

to predict these big advents he he calls them Dragon Kings uh which technical term yeah yeah I call it Newtonian Envy so he's a math right yeah he's a math guy he he uses some things that could be used to predict the explosion of rockets and transpose that onto financial markets you got to be kidding me here's the reality folks nin TB changed the world with John and Nero and Fooled by Randomness everybody else would have retired to Turks and caos or whatever he went on to do Black Swan and then you and I sat

on the stairs of St Barts on Park Avenue and you described anti fragile to me now see where is the humility among the quants in this great bull market the point is you don't need uh humility humility actually is is not necessary I don't why people are arrogant they just got to be paranoid about the right things namely how much an our error costs you when it happens that ruin problem and uh and and and basically Scott's book is about ruin problems let's see so you could be arrogant about everything all right you can be

wrong all the time doesn't matter like P you got to avoid you got to avoid ruin the big things you got to be right uh about the big sources of risk and and and and the rest take care of itself could could I get your having come out of the pandemic your perspective on what happened there largely uh but within markets as well the reaction to it what we saw the you mean the pandemic uh the reaction to it yeah okay we were I mean Scott discusses what happened in the pandemic um and and and

how we were obsessing over it uh I mean when we started the idea of universa when Mark started universa I was passenger uh you know I was retired passenger but the name universa means Universal yes uh properties and and we're talking about uh uh some universality of of these classes of taale uh processes that generate large Dale events and we call them I call them Grace swans hence that that's where the name University came from so the U the the the we were I was obsessing even when I wrote the Black Swan about pandemics and

kept obsessing and I say okay I I I didn't remember the interview but someone asked me what what do you have to worry about this and that this I said no you got to worry first thing about some germ traveling on Air France Air France you get good food and if they're bad germs they travel on British Air they get bad food so so that was and sure enough nothing had happened since for 100 years or close to 100 years right so uh and then people say well you know just like Financial Risk you know

people perception fin risk before the crisis say oh we don't have to worry about these they don't happen anymore sure enough all right we Scott Patterson you've got you know one of the sections is the Boston section the wicked problem and the answer is Flying Blind I mean you've been doing this for 15 years at the Wall Street Journal trying to figure out the mathness and the certitude and I'm going to wake up and win we're going to we're number six we're going to be number two or number one what are we Flying Blind on

right now uh I think that you know right now there's obviously a huge amount of complacency in financial markets uh you know we're hitting records Time After Time and yet you look outside Wall Street and it it looks pretty crazy so uh there's all sorts of things that that could happen and I know Nim wants to talk about China uh I've been predicting China would collapse for two decades now and they don't right careful cash flow lives there my oldest son be careful China's not going to collapse let's do this we're do China David G

in the next section okay okay we're got to Extended conversation with nas TB and uh Scott Patterson chaos Kings is a book okay you know I asked that question to Scott Nasim to set you up here we're Flying Blind nasing taleb and private equity and private credit it's all the rage okay the first thing I have to say is that we have a debt problem in the west okay whether individual or government it you know you can have debt China has that but you must grow and the problem of the West is that we we

have an escort of U of growth or of GDP or per capita and it looks like we're at on the top right of that curve so it's concave and people have two cars they have uh two homes what they want I mean have perier water ship to them I mean so the the incentive to grow isn't there so here it's a serious problem when you have low grow and a lot of that and the problem is that Western uh you know economies have never had more debt in in history how do our listen a time

where where gross became concave simply because the nature of gross you grow fast when you're China because you got pulled people out of the provinces and stuff right and and standards of living can still rise and make a difference now see they're not Quant of credit sweets years ago they're they're are listeners our viewers they're they're they put their pants on one leg at a time how did they hedge against your concave tensions that we're in right now how do M Mortals hedge this okay the whole thing is it's not hedge if you're investing without

a tail hedge you're practically not investing because of the ruin problem and that's what he discusses in in the book that's my first statement and the second one that people are way too static they imagine either they they have a a a um uh memory that's that's that's either too too short or or uh or or has problems updating that they don't realize like for example what's happening in China is that the nature index of of Publications there that's very hard to gain what China used to have 1% today it's in the 20s and Rising

so it tells you that that's a leading indicator of what what what technologies may come out of China so so you realize that got a Look Back to Before 1750 around when when the Industrial Revolution started so so we're starting to shift and in 1830 China had eight times the GDP of Britain we back there soon it's G so so we're going back now in times like reversing uh the dominance of the West not because the West is doing poorly but because it got one David we're going to China right now nasim's running the shell

we're doing China here right now we'll do the Stock Market opening here in four minutes David Gan Shina with Scott Patterson and Nas Scott let me ask you more about you said you've been predicting the the sort of disolution we've been seeing for for 20 years what stands out to you about this moment we've spent the whole week talking about these kind of unprecedented actions the way they were delivered by the pboc in in China and what that says about the actual state of the economy there talk a bit about that and sort of your

your advantage of it and also just sort of how much veracity we can ascribe to the statistics we're getting out of China uh well as to the verac the statistics who who knows you know uh they they keep doing this they they keep they hit a Slowdown and then they you know hit the accelerator they've they've pulled you know after the GFC great financial crisis China pulled the entire world out of out of that situation by stimulus um you know who who knows how long they can keep it up it's it's a big mystery for

me you know my my focus these days is on climate and the the dominance of China in climate technology is astonishing and that's the future of energy it's the future of vehicles right it's the future of batteries and they're you know light years ahead of everybody we're we're trying to catch up Europe's trying to catch up and and that for China is a is a big big Advantage I got to do a shout out here with the Wall Street Journal this week with a stunning effort China's newest nuclear submarine sank setting back its military modernization

that was an incredible story out of your shop now see on China again continue it's uh Aaron fredberg for foreign affairs says it's a Marxist leninist regime nobody in Beijing read Fooled by Randomness no the point is no the point is that China is in Reverse it's the reverse of Europe if you're small in China you can do whatever you want if you're big the government calls you up for a meeting all right so in Europe if you're small you're over regulated you got you got like five tax inspectors breathing down your neck you got

to get all these permets if you're big then you own the government okay particularly the case in France Germany everywhere in practically everywhere in Europe so China is a reverse so let's say okay it's capitalism okay for the small and communism for the large and and it's effectively it's not that much there's you know a a centralized economy except for the top so what about America into our friend fractured election our fractured Nation okay I I I don't know about whether the election makes a difference uh in many respect but we have a problem and

that problem is that our debt servicing is increasing and I guess did we cross uh is it more than military spending is it more already okay so and and it will continue and pay interest on that now you may say interest rates may be lower I don't think can go back to zero interest rate because zero interest rates got us here all right so we're going to go back to normal interest rates so you the the the the Deb problem is not going to go away that serviceing going to keep increasing and and and the

problem is if the East become not just China just the east in general becomes powerful and and becomes a target of you know retirement money and stuff like that then the dollar would be in trouble okay I'm just looking at it from R standpoint okay well we got to solve the debt problem okay we're going to have to come back but I agree with nin tab what I'm looking at folks into 2025 is the certitude of a resilient dollar everybody is on a vector for the dollar staying resilient or stronger and N seem of course

alludes there to what is the price of all this debt already in 23 and 24 we're talking about Dollar in terms of gold I mean people since 20 22 when when we dispossessed people by by by getting with taking money of their check account we got to go to the opening of the market do your trading over there Nasim while I set it up David gur and Tom King with nasen TB Scott Patterson chaos Kings how Wall Street Traders make billions in the new age of Crisis we will continue with Scott Patterson and nasing TB

John Tucker with a report on the markets behave yourself John N taleb is here very good good uh there you have it the opening bill at the New York Stock Exchange pushing higher for equities S&P 500 on track for yet another record close S&P 500 out of the gate up 10 points 2/10 of a percent higher the Down Jones Industrial Average Up 77 points that's a rise of 2/10 of a percent and the NDA Composite Index right now 42 points higher that is up 2/10 of a percent in the early going Nvidia shares most active

they were down 4/10 of a percent and after the feds per preferred inflation measure Rose just modestly for the month of August underscoring a cooling economy look at yields right now the 2-year more policy reactive right now it's down uh two basis points 360 the 10year is down three basis points that's at 376 we check the markets few all day long right here on Bloomberg Radio I'm John Tucker at your Bloomberg business flash Tom John Tucker thanks so much David gura uh with us uh this morning here it's been a hell of a week that's

all can say Michael Mobis with this two days ago and ning TB today was Scott Patterson in celebration of chaos king Scott what's the other side of the story here the ma and certitude of Zurich Switzerland uh yeah you're referring to didda soret uh the the dragon King's guy um you know I we were talking about China predicting what happens in China I just you know after covering financial markets and talking to you know hedge fund managers who 20 years ago were billionaires and now they're you know busing tables at diners um I you know

this is where I come down on Nim's side is I don't think you can predict markets I think it's impossible I think that there you know when you look at Quant trading strategies are very short term like over the course of a few minutes and seconds those are the only strategies that really survive long term and even they you know my first book The quants showed how they almost blew up in in the 2000s um in a in a period of big deleveraging so they're basically they're basically getting a higher dimensional bid and ask okay

Qui they're trading bid bid and ask very rapidly and that's that's good strategy but you know trading making big bets on your prediction of what China is going to do next quarter next year or you know what the FED is going to do I think we've seen this is very very hard to do my humility or David G is it's a Once in a-lifetime event and you know years ago in the old world which is where talb is from you know Lebanon and all that and over to the continent of Europe you know they're laughing

at us about once in a-lifetime event you and I have gotten gray wait G doesn't have any gray hair but but the answer is there's a lot of once in a-lifetime events David I have a question about uh young people in this industry and it's inspired by a conversation I had with my friend Robert Smith who is at NPR he's now running the night badget program at Columbia I said I was going to be talking to you today and he said here's what you should ask him and he pulled up a tweet that you filed

more than a year ago now the story we haven't covered this week is Caroline Ellison of FTX getting sentenced going to spend two years in prison and you tweeted about Sam bankman freed when everything blew up he said the problem with people like SP SPF is knowing a tiny bit of Statistics to parot about it but not understanding processes that is Dynamics cross time Shakespeare has survived nearly half a millennium by filtering by time and then you close Sam bman freed worked at Jane Street you're right to Jane Street he would have flunked my job

interview what is the Nasim TB job interview look like what do you ask somebody apply understand uh some basic things like ruin problems and understand Dynamics so which is the same you know that people if you have tiny uh probability of losing money you eventually we'll go out of business okay over time so if you're aware of it that's fine if you're not aware of it you got a problem the other one is sizing comes from sizing also if you have the edge you still have probability of 100% blown up if you don't size properly

so sizing is very delicate two basic things and the third one is about fat taals the difference between tin tails and fat taals and that's pretty much the theme of The Black Swan uh the remedy in antifragile and discussion of white people don't understand it in skin and game okay so the the the difference between fat tail and thin tail Finance is not gaussian now yeah everybody claims yeah we know that yeah if you know that then then why are you using gaussing tools what tools do you use what do you suggest people in the

street understand the Paro 820 it is very intuitive you need to learn to know some Mass but not enough okay to get to stuck to you know if you teach a little bit of math but not enough they go to the go this I this ning's laughing at me here right now because he knows it's a through David thank you G and I don't speak before the show in fact we're not on speaking terms but I'm so glad brought that up not see come on you know me on position sizing position sizing is everything and

right now we're living in a MAG s world where everybody whether they admit it or not is Scott Patterson's 401K at the journal is loaded up with video and all the rest of it ning t on mag 7 the anti-position sizing okay so so I I let let me give you one one thing since I don't have a lot of time I wrote a tweet I wrote a tweet saying that if someone gave you 24 hours in advance the newspap tomorrow's newspaper that you would go bust and actually someone just tested it Victor hagani formative

of ltcm who visibly uh know has long experience in the market tested it by giving people over 15 years next day's newspaper and tell and given them you can trade at today's price knowing tomorrow's newspaper and people didn't do well why one of it is of course sizing yeah they don't know how to size a position all right when they're when they're right they don't know how right they are because they can't figure out how much of it is noise right and of course the size so so the the the and just you know I

heard of the paper yesterday because it starts with my tweet it's interesting to have a tweet turning into a paper by someone else like for someone lazy like me it's perfect right because tweets I do on in airports typically right so and that's not I that's not how markets work the markets work on anticipation of news events oftentimes when you you know you see the FED cut interest rates the market will go down because it's already traded on on that news there's a fat Tony Story in anti all right how people who anticipated the invasion

of Iraq or the the the the starting of the war against Saddam in 1991 those who anticipated it went bust because guess what happened to oil prices they collapsed right so it's not figuring out the news there's something more subtle about markets okay I want to get one more question here chaos Kings and N See then we've got to talk to you about a fractured your old world your Europe with one two three they're calling them conflicts but I think they're they're Wars scunt Patterson you have such a history of writing of the tension of

Wall Street in your experience is anybody on Wall Street putting the tension and the outcome of it of your books into practice or we still wed Devar which I know Nim loves VAR has anything changed on Wall Street I think that's it's funny uh no I I don't think that we learn our lessons I think people are still still using value at risk uh even though it just got just I mean it was a laughing stock in 2008 um people looked at this and like oh this is insane we're cutting out 5% of the worst

days every year and like that doesn't matter so yeah no I I don't think we learn less I wanted to come back to the the uh question of an interview asking uh you know at a hedge fund yeah um I spoke to uh a while back uh somebody who who you know at Renaissance Technologies and the the big Quant shop on Long Island uh one of the questions they asked prospective employees is uh how does a toilet work which uh you know you're talking about Dynamics I thought that was that's interesting the the answer is

it's vacuum um I I want to devote the rest of the time with great honor to all the people from Lebanon that have assisted David G and I in what we've seen over the last weeks days and IND indeed quarters in years led by Jam bti over in Dubai who has been really helpful to us here her show is Horizon out of Dubai look for that now you have lived this you were in your family were Deputy Prime Ministers you were involved with it out of the Greek Orthodox Christian sphere of a Lebanon I remember

with great Prosperity yes it is shattered what is your not no I mean I was in Lebanon two weeks ago and I go to on I reside there part of the time so what you see in the pictures isn't doesn't map to anyone you hear about the economy doesn't map to what's going on there there've been little slowed down by the slowed down by the the Gaza War some kind of uh rise in um in across all economic sectors in Lebanon on a more antifragile basis in other words the the the collapse of the government

of Lebanon economically gave rise to decentralized Municipal Power and to a lot more entrepreneurship okay because the the central bank was conducting a Ponzi and the pony went away and then suddenly people recovered and four years later you know is on amend and and you can see economic activity across all sectors I mean restaurants all full new restaurants opening up like every day uh at least in my in my my neighbor like 4 40 50 past year I mean know every day every week uh so so you have you have uh so what the perception

of Lebanon uh from from the outside is is quite distorted given that I spent time there the the this War I think is I mean it there there is a problem okay let's let's say there is a problem the the the fighting is confine to uh healah and the state of Israel but but uh but of course there are side effects outside um but but something tells me that that if you go to a bigger War if Israel wants to drag the us into a that war right then then then thing would would would blow

up one fin question David one final question are how do you gauge the prospects of that happening we've been I I I think that the reest is resisting and the Iranians are trying to be nice and there is a uh more tone here so we'll see we'll see I mean from there you can see how irrational it be for everyone to get involved and to broader War particularly that long long term is not going to help I mean think about it Israel had a war with healah in 2006 they got stronger they they they had

they occupied Southern Lebanon and and hasing stronger and stronger so every every war is just like a a delayed uh training program for for healah so Israel doesn't have it's in its own interest okay you you can't destroy a you can't destroy you know a a a a uh ideology you can you can destroy military installations that's okay I do that all the time not part of surve coughing on is part of surveillance Tom does do that all the time yeah we got to leave it there Nim tell thank you so much uh one of

the protagonists of chaos Kings how Wall Street Traders make billions in the new age have Scott Patterson thank you so much uh for coming today this is a really really important book for Global Wall Street not so much what to do but what not to do Scott Patterson's chaos King setting up the tension between two giants of uh investment uh the Dow up 169 points I just quote the data upset n just gets him gone it's nostalgic we quot in 78 and 3/4 here the D 174 points uh SPX up fractionally down with a bigger

move NASDAQ 100 uh going the other uh way okay we can get upset Nasim now because he's staggering out the door Bitcoin 65,000 we'll ask in our next conversation with Nasim we'll ask him about Bitcoin million still I mean the point is it's still a speculative thing Bitcoin when people when you pay your rent in Bitcoin give me a call and I'll come here on the show see we'll we'll bring you back for Bitcoin when it hits 80,000 as well from New York City this is Bloomberg surveillance good morning [Music] [Music] [Music] [Music] [Music] [Music]

[Music] markets headlines and breaking news 24 hours a day on Bloomberg Radio Bloomberg television and the Bloomberg business app this is a Bloomberg business Flash and I'm John Tucker in the Bloomberg Newsroom with this Bloomberg business flash after the data this morning it looks like the S&P 500 could be on the path to another Rec close right now in the early going S&P 500 7 points higher that's up a tenth of a perc 5752 on the index and the Down Jones aduster average up 149 points that's a rise of 3/10 of a percent the NASDAQ

100 right now is only five points higher as for those yields after we got that soft inflation data the 2-year which is more policy reactive that is lower down four basis points that's at 358 right now the 10-year yield that is four basis points lower that is at 375 in the commodity space Brent crude continues its path lower uh down $60 a barrel at down 60 cents a barrel $799 NX screw down 45 C that is at 6721 and we check the markets for you all day long right here on Bloomberg Radio I'm John Tucker

that's your Bloomberg business flash David and Tom John Tucker thanks so much uh it was great to see on the break folks n seeing TB giving Jen Tucker advice on his 201k uh Helen has been more than difficult Rob Carolyn who's our fabulous meteorologist just nailed the size of it and the rain of it we've all seen the horrific videos of Surge and all but we want to look forward now with our Bloomberg surveillance news meteorologist Rob Carolyn moving up not to savan uh uh Rob Carolyn but to Atlanta and then curving to Nashville how

bad will the rains be well let's put it this way Tom the entire metropolitan Atlanta area is under a flash flood emergency that means flash flooding is occurring I can't imagine what the roads are like there I've just seen some webcam video from Boon North Carolina in the mountains and the entire downtown looks like it's under about 2 feet of water that's because this is the third day of rain in the southern Appalachians looking at the flash flood warnings right now they extend from Southwestern Virginia uh outside the r Oak area all the way to

metropolitan Atlanta and then you've got some as far to the West as Shiloh Tennessee the rain Tom actually falling as far west as Eastern Missouri and Northeastern Arkansas this morning so the storm has really spread out one of the old feeder bands is still producing some rotating thunderstorms so we're looking at a couple of tornado warnings this morning down around the Wilmington North Carolina area and then west of Raleigh Durham this morning uh some areas are probably going to see an excess of 18 Ines of Rain by the time this system completely falls apart early

next week Robbie been having some fun here talking about this upcoming game against Duke and UNCC Paul Sweeney perhaps going to be an attendance down in in Durham I talked to my dad who teaches at UNCC I said is a storm coming for you he lives in Chapel Hill and he said yes what what is the the longer term forecast here for the Research Triangle and more broadly parts of these states that are shall we say you know a few hundred miles removed from from the Atlantic Ocean well they're just going to continue to rain

uh I mean if he's going to the game i' tell him to bring a snorkel because it is just going to pour this morning there uh this is for many of these areas their third day of rainfall we had rain streaming off the Gulf up into those areas uh during the day on Wednesday and Thursday and now they're being impacted by the rain with what's left of Helen um it's just going to be travel is going to be incredibly difficult across the Tennessee River Valley and the southern Appalachians the next several days uh thanks so

much Rob Carolyn for this coverage through the week he'll be on it through the weekend and we'll look Monday and again that key uh baseball match postpone post B Atlanta Braves New York M who see where stand on that uh Monday morning this is a a joy to bring in now with our wonderful 929 radio coverage in Boston a tradition of our Autumn which is Harvard football this year is different a guy shows up after the legend retires Andrew oric joins us right now the newly minted coach of Harvard University do you coach the same

way Andrew at Harvard that you did at Concordia Academy in Minnesota a number of years ago uh yeah there's a lot of to carry over there you know it's all about build building relationships with the uh the student athletes so you can challenge them and push them to take them further than they they think they can go I know that looking ahead to this weekend's matchup against Brown you have some familiarity shall we say with uh with James Perry the coach of that team you two were at Princeton together I believe in the the early

2010s what can you tell us about him and the team that he's assembled uh and sort of the the difficulty of this matchup that you've got this weekend yeah James is uh one of the brightest offensive Minds that I've been around really really creative uh does a great job with his quarterback quarterback every single year um so they have a h fifth year Jake Wilcox a quarterback who had a outstanding year last year um and is off to a great start this year he's going to be a challenge he's a guy who can get outside

the pocket and you know extend plays um that lead usually to big plays um and they have a pretty solid receiving core they graduate some guys but they've done a good job recruiting so um the development of the program there's really no drop off with the current guys that have at wide receiver um definitely improved up front with their offensive line so you know just offensively in general he's going to be able to use um his full two box of uh plays that that again are very creative um and challenge you challenges you defensively you

know defense L they have a really good defensive line last game they had four sacks and 10 tackles for losses which is uh a great first game for any team um and it's going to be a good challenge for offensive line to be able to win the line of scrimmage and they have Isaiah Reid who's an All-American Corner who you know basically can shut down half the field um with his talent level let me stick with Mr Willcox here for for a moment and you know I I read the Crimson to prepare for this you

look at the tape to prepare for your game this weekend Jake Wilcox 366 yards and a touchdown during the last match up 3431 victory for for the Crimson what do you get by watching that tape what can you tell us about how you prepare for somebody who plays like that well as I said like he he does a lot of things where there might be a breakdown in protection and also he escapes the pocket and he keeps his eyes down field which you know a lot of quarterbacks don't necessarily do that once they get on

the perimeter it's like I'm just trying to survive here um but he keeps his eyes down field and he's able to make big plays so you know when you when you do things like that as a defense then you have to make sure that you know there's no breakdown and coverage lateen down you have to you know continue to either cover your man and man coverage or you know work in your Zone coverage to make sure that we're not leaving Big Windows um and the fact that he you know is athletic enough to pull the

b ball down and run you know that has another element to that when he does get out on the perimeter Andrew I got time for one last question Jason furman's holding Court in economics at Harvard and E1 I know you're doing football 10 at Harvard as well have you had to explain yet to your players the new kickoff in the NFL like you were with Tampa Bay can you explain the new kickoff in the NFL I don't get it I I really can't because I I haven't like dove in other than when I saw it

on in some games to me the way I understand it is you can you can kick it into the end zone for a Touchback but there's a penalties as far as what yard line they start at but the NFL is trying to create more returns I believe and you have to drop it in the zone and if the ball gets kicked in that zone then the return happens and essentially what they're trying to do is shrink down the distance between the return team and the kickoff team so the highspeed collisions that ultimately can concussions are

eliminated Andrew thank you so much for joining us looking forward to speaking to you uh through the week of course uh on Bloomberg 929 FM Bernie Corbett uh giving us the broadcast here Brown Harvard looking for that 12:00 noon at tomorrow stopping by right now too quickly he's Le literally leaving on a jet plane it's not as romantic is driving to Heath R Stephen Carroll joins us uh Bloomberg Daybreak Europe here for some good goodbye comments and I've never found more European than listening to that conversation which I understood about 10% of but that's okay

follow totam football it'll get worse your observation of the UN meetings that we saw this week look really interesting to see the who's speaking to who the convers around climate still with the green push back that we've seen in so many parts particularly we're thinking about some of the European countries where the green agenda has fallen down the political priorities still a lot of POS optimism from Business Leaders from world leaders on that the fact that there seems to be the conversation shifting to the business case and how you make these sustainability Pol policies work

from a financial and economic point of view we've been focusing on these major conflicts of course the one in Ukraine conflict in the Middle East as well what stood out to you from yes the major speeches that were made at the UN General Assembly but in uh remarks on the sidelines of those as well just about the prospects for those coming to an end anytime soon I mean look it's very difficult to see in either case I mean particularly in the Middle East the escalation we've seen over the past week really shifts that into a

completely different gear this is something we had been very worried about the question of where that goes next extremely difficult to follow we're watching very closely the US election is going to shift the game and all of these things all right you'll pick this up on Bloomberg Daybreak Europe here on Monday can't say enough about it folks um I'm in the surveillance nap here while Carol's working away but it comes out and they take the first 15 minutes of the show and they cram it into a podcast which outdoes my podcast my people said what's

going on here Carol's cleaning my podcast is that what I've been called in for is this is this addressing I mean it's amazing you do like 15 minutes and you pop the thing out here and all of Continental Europe listens to it and what they're going to want to know on Monday is a reaction literally at this moment Mr nyatu in front of the green marble at the UN how will you treat that Monday morning back in London Look we'll have to see what happens over the weekend as well because you're talking about not only

how people react to this beat but what actually happens on the ground we're still watching the activity on that border you mentioned the great jaban bassi earlier she is someone that we go to every day almost in our show at the moment to bring us the latest on what's Happening from that region our incredible reporters uh across the region as well putting in context most importantly because if you follow the day-to-day events it's often quite difficult to I suppose put that in the context of where are we going back to 2006 you know for people

in Lebanon this is something that to to go back to levels like that is is a superlative that they didn't expect to see Stephen Carol thank you so much and safe travels he doesn't have the golf stream Sweeney has it oh he tried to get it Francine had it two weeks ago yeah and sween's got it down to Duke UNC right so carols he's going like you know do you stop through Dublin is it like Air Lingus this time I did consider it you did consider it yeah but this time we're just going to skip

right by don't tell them I said that it's yeah don't tell the fam okay I was going to make a fly through Istanbul joke but I don't think we should be making no that doesn't work today too soon too soon you're going to be what is what is the what is the worst of courthouse downtown yeah on Pearl Street we have the may we have the mayor uh in the courthouse as we speak so meeting with the Jud we got to do a major shout out and and we have to start with David gura um

you've literally gone on autopilot seriously you were with John lir earlier this morning in the Bloomberg pole and and all that what's what are you going to think about over the weekend to get into the new October Dash to the election well let me talk about foreign policy first and see bringing up something very important which is what happens over the course of the weekend and you know we've seen uh President Biden meeting with the president of Ukraine and we have the Prime Minister speaking in New York now what happens with those two conflicts and

how that affects policy from this government going forward uh and sort of watching The Campaign continue I mean I think this week was very Illuminating in the sense that we knew going into it the poll said so unequivocally voters care about the economy and you did have both of these candidates really doubling down on that over the course of the week delivering speeches on it and sticking with that message I anticipate that'll persist did you get along with our team this week you know it was like old home week and I'm reminded of how vital

and necessary this the surveillance M particularly when they're awake Ken F who our Global technical director and thank you Brockton for getting it done you know jeppe's father was just like missing an action I mean he's just gone all week and S Benson made it work Sai thank you so much for uh getting it done here th up 177 uh points SPX a little green I say it's pulled back a little bit off of that quiescent inflation report we'll have much more on that Alex steel and normal Indy they're steel to get you through uh

to the inflation report and further treatment into the 10:00 hour and of course Bitcoin 66,000 as well not Dave Mason Traffic Stevie Winwood good morning well boy you sure took me for one big ride and even now I sit on wonder one then when I think of you I start crying I just can't waste my time I must keep dry got to stop believing in all your lives