Barrel. Jon it is interesting to see the mood move in crude. You see cautiousness in stocks, even energy, because of the new Economic Data in the u. S. Digesting it stays higher for longer. The story suggesting candace staying higher as well because we saw canadas central Bank Hold Rates Steady at 5 . This decision was expected but is only the third time in 13 meetings that the bank has hit the pause button. Partly because we saw the economy contract in the second quarter. The bank of canada was not expecting that would spoke of excess demand in the economy starting to ease. In some messaging, there is a hawkish tilt given the inflation fight is not over. I want to bring in clear from the rbc Economics Team to get some reaction. Great to have you with us. What did you make of the fact that on the one hand, they stay steady on the race but do send a hawkish message to the market. Does that surprise you . Claire not really. I start with the decision itself with the bank of canada deciding to hold risk steady at 5 . You want to call it hopeful pause. The bank of canada is hoping they have done enough with 470 five basis points cumulative of rate hikes we have seen date to date. The question they are asking is we are starting to see weakening data especially in labor markets and gdp data lasted two friday as well. Are they foreshadowing a broader slow down we have all been anticipating as a follow for the rate hikes we have seen to date . Or is this a repeat of six months ago where they bounce right back . That is the question ultimately, and prompted the pause today. She said, the statement was sounding a lot more hawkish so that is down to them wanting to leave options on the table. They want to leave the door open so if they were to raise rates again in october, they may give expected inflation reports or more data, then they could. Jon we are next to the u. S. And there is the possibility the fed continues on that rate hiking path. Maybe identify for our global audience the differences in Household Debt between the u. S. And canada. We have a shorter duration Mortgage Market in the country for a life people who have already felt the impact of higher Interest Rates. Claire that is right. The typical mortgage term is a lot shorter. Which is similar to the situation in the u. K. , different from the u. S. Where mortgages are way longer, 30 years. That does allow a lot faster passed through but we have still been slow with the contractors in two which is a year after the start of canadas Interest Rate hikes in 2022. If you look at delinquency data, we are starting to see hireling the rates. We are starting to see size of households getting squeezed with heavier debt burden with the race staying currently at high levels. That is one of the key differences. In terms of the outlook for the third quarter, preliminary estimate for july, it did point to a flat is profile for the month. This leaves the start of the corner to a weaker recorder to a weaker and softer start. Whether it can bounce back to canadas one point five annualized percent increase in gdp the huge . This leaves us tracking below what the bank of the canada last forecasted if not. Matt how long is the transition from Monetary Policy changes to the effect on the economy . It has been a debate yet a debate lately. So they dont think long and variable lags are anymore. On the other hand, so many people have fixed 30 year mortgages that moves away from the arm of the great financial crisis. People argue the lags will be even longer. What is it like in canada and what is review on the u. S. . Claire that is a great question that plays a lot into the differences between how indebted households are. It posed a great financial crisis and the u. S. Had a larger cycle. In come in the u. S. Is generally lower than what we are facing in canada. It comes to not only speed but how Monetary Policy can start to flow through and mpegs household positions and aggregate demand but also comes down to sensitivity. With larger dad, you are sensitive to the same 25 basis point with larger debt, you are sensitive to the same 25 basis points. It surprised a lot of us in terms of how resilient, broadly speaking, households have been. We both know there is an incredibly large amount of excess savings but households have accumulated over the course of the pandemic. That is how it insulated through a lot of Interest Rates and shots through finances. In canada, things are starting to look at things softer. We have the Unemployment Rate rising as much as half a percentage point in three months. Previously we have not had this without every session. This is giving the context to how excess savings or string to look in canada. Back to the bank of canada, is it weak enough or well determined enough for inflation to slow back to target . That is the answer we are all waiting for more data releases to find the answer to. Jon to go beyond that question about Interest Rate impacts, worldwide markets have been wondering what you start to see impacts from higher rates, is there an entry point for federal banks to lower price even slightly . That conversation is starting to Gain Momentum in canada simply because we about contraction for the economy in the second quarter. Who knows . If you see a bounce back where the inflation story is not fully resolved. Would you be surprised if the bank of canada going into next year, or said things are weakening that we have to send a message that will lower Interest Rates . Claire that is a good question. At this point, it is not part of their third their concern. They have to think about Interest Rate cuts. The key question is, have we done enough . Once they deem the broader macro condition slow will slow enough for inflation to drop. Core inflation more so, excluding energy and oil stocks, that the bank of canada also mentioned in the statement today, that could be pushing higher in the near term. Will core inflation come down to 2 . Once they have an answer, what really drives the slow down and underpins the forecast is slowing demand. That is what we are starting to see and in large part what made them pause. That may be the slow down of demand will be enough to push inflation. Then we can have more of a discussion to cutting rates. Matt thank you for joining us. Claire fan, economist at rbc, talking to us about the bank of canada and the fed. Coming up, dan ives joins the show to talk about Artificial Intelligence ahead of the c3 ai earnings release. This is bloomberg. Good night hey corporate types. Would you stop calling each other rock stars . Youre a rock star. You are a rock star. No more calling coworkers rock stars. Look, its great that you use workday to transform your business. But it still doesnt make you a rock star. So unless you work with an actual rock star. Hi, im ozwald. Hello ozwald. Pam, you are a rock i wasnt going to say it. Explore endless design possibilities. To find your personal style. Endless hardie® siding colors. Textures and styles. Its possible. With james hardie™. When you automate sales tax with avalara, you dont have to worry about things like changing tax rates or filing returns. Avalarahhh ahhh jon this is bloomberg markets. I am Jon Erlichman with matt miller. Ai hypo get tested after the bell when c3 reports resolve. The company has been a pure play on ai excitement. Stocks of 100 80 and analysts set pretty big expectations for topline growth but also signs of spending commitments from customers jan just the obvious hype we have heard throughout the last few months from ai companies. Matt until will be interesting to see how companies that used ai hype to try to drive there stocks actually do when it comes to their earnings. Kroger will be coming out with earnings in a couple days from now. Last time they put out their earnings release, they mentioned ai eight times so they will statue will see if they drove revenue there. The spring in dan ives. He does not cover kroger but covers other tech stocks and automakers that hope to cash in on ai technology. What do you think about c3 ai which is a much Smaller Company than an nvidia trying to use this to cater favor from the market . Dan it is really about second, third, and for derivatives. I think c3 stands as one of the agonist beneficiaries along with a few others as use cases. This is an important quarter to show you saw nvidia to microsoft to now, are you seeing spending whether it is financial utilities and others. This is just starting. It is a trillion dollar title wave on the horizon. Matt i was looking yesterday at a chart of bitcoin which has kept getting excited to 30,000 on etfs and then dropping back down. Eddie van der walt told us he thinks it is because ai is the shiny new bank. If you layer an nvidia over bitcoin, it continues to go up and to the right. Is there a bubble atmosphere in ai . Dan there could be fakes from the real means. But what we saw with the godfather of ai, nvidia, as real numbers we are seeing. We have seen firsthand in asia and across europe with the spending trend looks like. Now, over the next six to 12 to 18 months, i believe it is the start of a new market. Right now, it is fundamentally about the execution stored. If companies dont execute, they fall by the wayside but now, ending will be there. Jon as an analyst covering these companies, and someone to your point who sees this as a wave of growth that we have not seen since the early days of the internet for the technology sector, if stocks have had a big run and expectations in the short term for orderly results are high, and there are nearterm messy quarters, how do analysts react if you are seeing huge growth over longer term . Dan that is the conundrum for investors as well. Because the longer term opportunity is there, then you cannot put it in the box and say, what are earnings over the next three to four quarters . I think transformation has good is but i have always viewed them differently from tesla to netflix to amazon to market to microsoft. There is a boom. I think it is transformational of a type trend we have seen in 30 years and also comes down to execution. That is what we spend all our time doing, trying to understand who are the role winners versus the fake ones. Jon in terms of parsing it out to different groups because ai means Different Things for different businesses and ultimately to their customer base, are you doing the same thing . Looking at the different tiers of how you play the ai sector . Dan it is essentially a basket. There are chip ways for players like nvidia and amd and another big piece of the supply chain. Using the first derivative, the google special tapped into where microsoft is really winning that hand over fist. Then, of course, you can have amazon. Then. You look at the core. Salesforce benefits. And pure play use force cases like pound here and c3. It shows the role spending is starting to happen. Matt we have seen the ces tech conference in vegas turn into a car show. You are a tech analyst but have further in the Auto Industry which becomes a tech sector but you have looked into the Auto Industry which becomes a tech sector. The Auto Industry union was a 46 increase in pay for an industry losing billions of dollars going into electric vehicles. Dan it is a nightmare scenario. I was in detroit if you weeks ago trying to get a pulse in the 313 area code and everything is riding on electric vehicles from gm to ford. Get past september 14 and the strike happens . It starts to push some plans. That is the worry here especially with tesla and nvidia and others going after ev. I hope this is a bark is worse than the bites because this is a pivotal year. For borrowing gm and ford. Matt everyone seems to want to cash in on the customer with hummers and escalate iq. Is anyone going to make money on the affordable easy . Affordable ev . Dan that is why next or tesla comes out with a some 40,000 vehicle because of battery costs and scale and scope. Over the longterm term, this is an ev green title, the biggest transfer to auto ev versus the model since the model t. Jon great to get your perspective on the ev transition and ai story. Dan ives from wedbush. Coming up, more signs the ipo route is coming to an end as the nobody that makes wilson tennis rackets and ski gear files to go public. This is bloomberg. sfx stone wheel crafting the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. It still does. What can you do with spy . I need it cool at night. You trying to ice me out of the bed . What can you do with spy . Baby, only on game nights. You know you are retired right . Am i . Ya the queen sleep number c2 smart bed is now only 999. Plus free Home Delivery when you add an adjustable base. Shop now only at sleep number. Jon this is bloomberg markets. I am with matt miller. Wilson tennis rackets has filed for an ipo that could value the group as much as 10 million. Kind of an Interesting Development which you have been tracking closely at the time when we are closely watching big attentional tech ipos. Katie yes. The window is open, so to speak, or a lot of companies are hoping it is following arm, instacart and others expected to go this much. He have others but now amer sports are looking to in the coming months. They have filed confidentially for an ipo, one of the major sports going public. We are hearing they want to go public hopefully by early next year. Matt is there a peg for this or a recent . I went a reason . I went to a bar like this last night and a pickle ball game on the screen. I know they make rackets for that but there tennis gear has been around for a while while there is less ski gear just let us know lately so less need for ski gear. What is the deal . Katie looks like they are hoping they can make every turn. The Company Hopes they can get 10 million which depends on Market Conditions that would be a quick buck for them a few years later after they bought it. As you mentioned, pickle ball is hot but they have so many different categories of forte equipment. They have wilson with tennis and basketball. They have a lot of ski brands like atomic and solomon. They have a patagonia competitor. Such a long list. Clearly they feel their business is doing well enough they are willing to brave the somewhat weak ipo window but well see how companies do in the coming weeks. Jon you mentioned a brand wellknown in canada. Jan wilson, there is a canadian wilson who some may remember their rise to fame through lululemon. When you are covering the ipo market, how much does the potential audience or appetite depend on which brands we are talking about . Us leslie in a stable here. Katie people will say the best brands can go public in any environment but bankers get spooked when they see ipos not doing well. It is hard to even get bankers to sign up and do a roadshow for company. Right now, they are willing to do that and trying out the market for a you in september. A lot of the others we reported want to go public this fall. A lot is dependent on how First Companies do, whether the ipo window is truly open. It is a little up in the air. Matt thank you. Katie roof who covers ipos for us for bloomberg. She is based on the west coast which is helpful in the tech industry. We are seeing a drop in stocks right now and a selloff in bonds as well on the back of Economic News out of the u. S. This morning. The s p 500 trading at 4455. Yesterday, we were at 45,000 4500 event. What is interesting is the move up in crude, even with a pessimistic outlook for the global economy. We see crude continuing to gain. Jon could end up being nine days in a row, the longest stretch for energy since 2019. We are maybe starting to see overall appetite for Energy Stocks as well. Matt miller, im Jon Erlichman. This is bloomberg. Romaine a disappointment in the is it possible to fall in love with your home. Before you even step inside . Discover the Magnolia Home james hardie collection. Available now in siding colors, styles and textures. Curated by joanna gaines. Equity market. Here in new york, im romaine bostick. Katie greifeld here in the u. S. We are looking at a down day in markets. We had some pretty hard data coming in the form of ism services that is taking us and the steam out of the equity market, big tech faring while come off by 1. 1 . You see the symbol of continuing when you look at the bond market, 10year treasury yields up to basis points, getting closer and closer to the 430 level but all of the while you are continuing to see energy continue to rally your