And tech. I heard you make a sound as this,. Guy it starts get a low confusing. Prices paid goes for 48. 4 to 43. 8. That is a big drop, disinflation in the system but then you look at the employment number that goes from 48. 5 to 51. 2. Back in positive territory. Also higher to 49. 2, employment looks good and the should be really good for corporates. The headline number look strong and that is probably the first takeaway. Abigail could we say this is goldilocks . We are talking to tim last month about trough thing. You had implement still strong and prices still low. Isnt that good . Guy in some ways. We are going to get instant analysis almost today because weve got a big interview coming up in just a moment. Alix we are still seeing selling across the curve, equities still a little mixed. Guy i mentioned the big interview, we should probably go to that now. Wait welcome our tv and radio audiences and need to take you to the leadership, taking place in london. Joined now by emily chang, over to you. Emily welcome to our television and radio audiences, i am here with j. P. Morgan ceo and chair jamie dimon on the tech stop leadership farm. We just saw a few Tech Companies go public. Instacart, flavio. Are we back or is this a blip . It is open right now. But ipo markets like an accordion, it is 40 plus deals, Something Like 50 or 60 this year. Interest rates change a lot, we help you evaluate, the value of care flows more accountable. But for now, it is healthy. The economy is ok so it is open, not for everybody but it is open. Emily you dont see the same wealth of Tech Companies that you see in Silicon Valley. They want more big star Tech Companies. Critics the u. S. Was the center of tech. Not to Silicon Valley. It is all over america. It is staggering. It has moved overseas. In berlin and paris, they are quite good, and going public and we are the leader of taking the public here. You always have it in china, india, not quite the united states. Emily th tch footprint of j. P. Morgan has got even bigger. He bought First Republic. How big is the opportunity to be the new incumbent bank for startups and vcs and how will you manage the risk differently . Did not want to benefits so it was not good for banks or good for us. Having said that, we had people working around the clock to open those. I came from a sequoia thing and i know a lot of Venture Capitalists. Saturday and sunday, i always want to do better. The biggest difference in Silicon Valley bank forget to First Republic as they did a great job for these things. Certainty is on a macro level were not right. Did a lot of things on the microlevel that were right. How they service the client locally. We have unbelievable proxy service to bring the consumer subscription life, research. But it has to be in the way that you actually like it and want it. You are organizing around it. You can hear them talking about new space in palo alto, we heard one of the top people out of Silicon Valley bank. Organized around the innovation economy, we will get it right. I just want to make sure it is happening a year from now and not just today. That is what we do all day, for us it is incremental risk. A slightly different kind of risk. This happened years ago where the bank lends to the nonrevenue company. The answer was zero, but we did facebook. We have learned how you can do that. But its not the risk, it is the Venture Capital company, partners, the investing companies. It is the whole ecosystem. Emily you have a group investigating ai. What are they up to and what is the next level of finance you think ai can unlock . The most important is ai is real. With thousands doing it. Top scientists. Someone who ran carnegie mellon. It is a living breathing thing. It is going to change and be different types of models, tools and technology. The way to thing about us is every single process, trading, hedging, research, every app and database will be ai. It might be that ai is doing the equity hedging. Idea generation, the models, there is no taking while youre talking to someone. Heres a thing of interest. All error, all customer service, a little everything. Emily it will replace some drops. Of course. Technology has always replaced jobs. Your children will live to 100 and not have cancer because of technology and theyre probably working two half days a week. Technology has done unbelievable things for mankind. There are negatives, this one the biggest negative being used for people and bad things. Henry kissinger talks about warfare. I think eventually there will be legal guardrails. It is hard to do because it is new but it will add a huge value. For j. P. Morgan, if it replaces jobs, we hope to redeploy jobs. We offered to about 90 of people, they accepted. And we have told them that as some of the jobs are transitory, we hire 30,000 people a year. We expect to build get them a job local in a Different Branch or function. We will be doing that with any this location the takes place as a result of ai. Emily what is the weather now . Im not giving a forecast. I blame myself. The u. S. Has been very strong for a while. No surprise, 5 trillion was pumped in fiscally. 3 trillion or 4 trillion of q. Week, and now it is being reversed. The consumer is still spending money and they still have more than precovid. Home price gone for 15 years. Talking about deterioration, credit is not deteriorating. It is not inflationadjusted, gdp adjusted. We see it is normalizing. That is the here and now. All of the data is distorted because of covid and things like that. When you ask about the forecasts, i look out there and say what are the range of outcomes . I said the storm clouds dissipate. That may be a hurricane. We dont know what it is. There are two of them that are different than other things. I dont worry about the weather. Im guessing about the economy. Is it sunny or rainy . We run the company to serve clients through thick and thin. To serve governments, to satisfy regulators and that is all the weather. But there are two things that are extraordinary we have different outcomes and think of them as storm clouds. We dont know if they are going to hit, when they are going to hit, and what theyre going to do. Im not predicting that, i will tell you what im worried about. It is the largest fiscal spending in peace ever, and america and around the world. A see that weve never had. Some people think qt will be uneventful, im not so sure. I expect volatile markets and then youve got all of the longterm fiscal things, kind of inflationary. Oil price, certain commodity prices, the green economy, the restructuring of trade. You name it, it is not subtracting inflation. I dont think it will keep coming down. Rates may keep going higher. But the biggest is ukraine, the humanitarian crisis. It is a long 600 miles, 500 thousand people killed. It is nuclear blackmail and it is going to affect oh global relationships in america, china. We dont know how it is going to start. So i keep a close eye on. How it affects the economy is different, i just tell people to be prepared for higher rates. Emily are we really going to 7 jericho 7 . It is possible. Can it go to 7 . Yes. Are we driving higher than where it is to the 10 year bond, yes. Is supply and demand pushing out, yes. Im saying be prepared for it. The worst case is stagflation. Higher rates because you have a booming economy, and a lot of competition for capital, its not the same thing. Emily what is the Ripple Effect on your growth . Correct im not worried about jp morgan. We can handle 2 again. Emily a percent jericho now. We are looking at the range of potential outcomes. We can have a list that no one expected and we can handle in between. If we bedded on one outcome, every company has different exposures. In put prices, output prices, some industry prices dont matter and some it is the price of mozzarella. Le struggling. The biggest is the threat from ukraine, oil and gas, food, migration. The most important in the world, ukraine is affected. It is hard to see positive outcomes with china until the ukraine war is resolved, awfully whether ukraine can say they have a victory of some sort. Emily you said you are worried about another trump presidency. How worried . I dont know five said that. We need Good American leadership. We need to explain why this is so important for the world. There is a little bit of this america first, no amerco president is going to say america second. We need to slain white ukraine is important to us and why American Security relies on Global Security and why our allies rely on that. If they cant rely on it in america, they will have to rely on some thing else. They will exercise power about the symphony of power at all the soft things. Not the military, which we have overused, but diplomacy, development finance, education, and economic trade, investment, i think we do a better job. Emily we avoided another u. S. Government shutdown. Talks of the mccarthy ouster. You have a message for anyone in congress . We need good policymakers. Shutdown is a bad idea. I came up with a solution. We democracies mean compromise. When i go to washington, you see in the press and a lot of the bad parts, there are also Great Congress folks and senators who want to get things done in the interest of the united states. Im glad they did this one. 45 days from now, Kevin Mccarthy is a speaker of the house, ive known him for many years and hes got a tough hand. But hes doing ok. Emily regulators have proposed new rules that will make it tougher for americans to get a mortgage. Would businesses will have the biggest impact . It is 1000 pages long so you have to go by product, service, country, crossborder and tight. I dont think it is all the right stuff or very comprehensive or well thought through. But with them do what they want. You may not know if you are an american, we have 30 more capital european banks. We have International Level playing fields and stuff like that. When you get into the specifics, it matters, goldman rules about mortgages and Small Business rules, in general it punishes diversification and diversification is one of the true free lunches for banks that protects it. I dont understand why they would do that. Were going to be responding and hopefully it will be modified and thoughtfully done for international purposes in mostly america has the best Financial System the world is ever seen. That includes hedge funds and private equity, private capital and things like that. But i see the private equity this is going to push a lot of stuff off the banking system. If that is with the regulators want, so be it. We have companies in 1996, it should have been 14,000. They accomplish the goals. Emily is big tech too big to fail . To brodd a question. Broad a question. These things were bailed out, i dont understand. They should ask what they want. If the regulars dont want the bank to ever fail again, then you should do a be see and d. I accomplish most of the goals, reduce the liquidity. Sometimes they misuse the permission, sometimes regulators catch it and some have the dont. They are powerful. Ive been writing about big tech, they will in embedded pain systems. They have the right to do that. It is against the unfair use of the position. Emily do you worry about the bank of apple . I wrote about it like five years ago. Were going to compete. We have a tough competitor and they hold money, move money. You can put money in the markets, the checking account, the credit card. They are a form of competitor. We also partner with them but im used to partnering and competing with lots of people. Emily existential threat . I dont think it is. But if we were complacent, yes. Emily jamie dimon, chair and ceo of jp morgan. Back to you. Alix that was jamie dimon, the chairman and ceo of jp morgan. Emily chang, think you for bringing us the interview. The ipo markings says is open, thoughts about the economy, will talk about 7 . It is a possibility on the 10. Lets break it down with sonali basak. What were your takeaways . Sonali his change in language when you think about the consumer. He is warned it might dry up and he is sticking strong to the idea that the consumer is still strong. Though he sees risks on the horizon, the story on the consumer coming from jamie dimon is meaningful. Another thing he talked about a lot is where he started, Silicon Valley bank, First Republic, that competitive advantage jp morgan has. In the market it is notable how much jp morgan has been on the top line of a a lot of these big ipos and hired poet talent and it is clear that jp morgan wants to make a bigger play in technology in the u. S. And abroad. Guy what does that mean in terms of how he needs to run the bank . Has talked for many years about the fact that he is investing in technology. If you want to be a bigger player in technology, do you need to make those kinds of investments . Do you need to be a partner rather than a banker to these Technology Companies . Is at the way you think he thinks about it . Sonali you do. You heard him mention sequoia. We also had him talk about the importance of the ipo work it to make it work. But these are made over longterm with the industry. Something that is also been noticeable about the way they have done this is theyre not always the first one on the ipo, often they are also the second one. Theres been a big question in the market. Do they want to be number one on anything or do they want a large view of the world and they will take number two to gain more business . So far the scale is working and you see it in the lead tables for ipos in particular. We are only weeks away from Bank Earnings as well. It will be interesting to see how it feeds through. Alix i found it interesting in the broad top of the economy. Emily was try to get them into where is the Weather Forecast for the economy. He said sure, any of this is possible, it just matters how you manage that and what the filter is for the economy. Guy he is saying we can manage that. It will be a big impact effect comes reality. But jp morgan, we are modeling this out to make sure that we are protective from the kind of hurricane he is addressing. But they are clearly looking at the risks of upside yields in a big way. This must be part of the ongoing conversation. When the board gets together and they talk about risk, clearly this is a subject that comes up time and again. Clearly they are thinking about it. If you were to look across the banking landscape, to think about who would be a winner in a loser, how should we think about that . Sonali there is a movement try the bank. Emily asked about the seven or 8 environment for yields. If you specific things he has been sanding nash sounding the alarm. The biggest banks are beneficiaries. If you think about a trading desk, markets go up and down but you make money in the volatility. They go to the biggest banks to manage their deficits and marking rather world. When you figure out the longterm fiscal trajectory, you look at the 30 year yield and is hovering around the highest level since 2010. Talked about issues around the entire world. Is america a relative state a safe haven . Is it not . When he is trying to convey is jp morgan is safe the matter what. I say everyday it is the highest level, it gets boring. With a high deficit not being in a recession relations to that. It is a productivity issue. Sonali whether that will create a boost in the economy to get us out of this potential stagflation, if this is a bond buyers market, separation throws a wrench. He was talking about credit quality. If you go from a soft landing into a stagflationary environment, all of your investing that you see today start to get put underwater. It will make that debt instruments float upward if you will. Guy how would you compare what you just heard relative to what he is been saying recently at over 12 months . Sonali i found him quite sanguine. We listen to him most for the types of risks and the idea where he defended the consumer, when we head into Bank Earnings and even now, there are signs of deterioration in the consumer. From jp morgans perspective you have this idea that the consumer is normalizing. It will be interesting to look across the Angela Merkel publishes. The average pico score for the consumers has ticked upward and it is only done so over the last couple of years. You can see what they are selling as well. Are they tightening standards in the economy or the willing to take on more risk given where they are . That is still an open question. Guy that probably is as much of a robin for jamie dimon as the rest of us. Great job, sonali basak breaking down the analysis on what we just heard. In terms of what else is coming up, we need to get back to the ism number because it speaks to the same thing. Goldilocks, maybe a soft landing , that is the information. Alix the smallest contraction. Im interested in a lack of reaction. Tech is up but yields are still higher. But they went nowhere fast and i wonder what it said about the reaction on the interpretation of the data we are going to be getting. Guy that is what we are definitely looking forward to. From the chair and the market, we will see what is coming up. Tim fiore joining us next. Discover the Magnolia Home james hardie collection. Available now in siding colors, styles and textures. Curated by joanna gaines. Alix our into the u. S. Trading session, the first trading day of the last quarter of 2023. Abigail the s p 500 down ever so slightly. Beneath the surface, Communication Services up over 1 . Some down over 1 . Not moving that much. It will be interesting to see how it shakes out. The nasdaq 100, a little bit of a gain helped out by Communication Services after the worst quarter and month of the year there the vix at an 18 handle, signaling traders are waking up to maybe wanting to hedge some the volatility we have seen into october. The 10 year yield backing up in a big way to 4. 65, up six basis points. In ism in contraction and yields backing up and moving up more than expected is an interesting place to be. A difficult quarter, the russell 2000 has hurt. Down into contraction territory from a mid july peak down almost 12 . A small cap, transports often lead, smaller growth, more domestic growth companies. Will that be a story for the nasdaq and s p . A multidecade chart going back to 1994. Here is the gse in terms of yields going down and bonds rallying. Here is a look at the two and five and 10 year. The two year yield about 5 begging the question, are we going to see the rest of the curve follow . Guy thank you very much indeed. Let me talk to you about what is happening with the technology market. Google antitrust trial, the microsoft ceo saying microsoft has tried to win the search deal basically saying apple has used microsoft to get google to pay more. He is saying get google can extend its search dominance. Dominance into ai. Theyre not done yet. There is some action required is what he is hinting at very strongly. Alix this is basic a suit against google paying a billion dollars to rival smartphone manufacturers, wireless carriers. The default option, they say is not true. Very strong statements from the ceo of microsoft about google. Guy goldilocks has landed in bad and appears to be a soft landing. Lets get instantish analysis from tim fiore. The instant read we had was this is a set of numbers pointing us toward the Manufacturing Sector headed towards some kind of eight soft landing. Inflation looks like it is fading and growth picking up here darlie reading this correctly . Picking up. Are we reading this correctly . Tim last month i indicated maybe we were in a trough. This month confirms that that at a 49 level, very close to 50. Anything over 50 is expanding. We are contracting at a one point contraction rate, the lowest we have had in 13 months. I think this is a very positive thing. Presently, the under him the employment number expanded. The prices index contracted strongly. We contracted also in august but nowhere near this rate. We had a lot of comments around Energy Markets and some indications of transportation costs starting to climb, probably all driven by the energy market. The other thing here that was a bit of a surprise was the employment piece expanding. It is just a timing issue. Deliveries faster this month and the final one was a disappointment with backlog. It is a timing issue and will take a couple of months for that to get into a low rate of contraction. Alix headline that gm is furloughing additional employees in ohio and indiana. Is this reflected in the data . How do you expect that to show up in the data . Tim i think we will start to see it in october. We dont see any number impact in september although we had quite a few comments. Somewhere around a percent of headline comments, concerns about the potential strike and where it was headed. It seems to be managed appropriately. There is no drastic action taken. I like the fact that only a few factories were initially struck. That is standing. Is expanding. We will see where it ends up. If vagal on strike, it is not like it was 20 years ago when that was the predominant part of u. S. Automotive manufacturer. There are not there are a lots of nonunion sectors that they rely on. Hopefully it will work out in the month of october. Guy oh does short data normally fair during a Government Shutdown . What kind of impact would we see were we to see a Government Shutdown . Tim atlee that have been 20 Government Shutdowns according to the historical records. There are three that are of interest because they went on for more than a week. There was one in the clinton area and one in the trump era and one in the obama era. You dont see really any impact. The longest one was 25 days. It wasnt a whole month. On that side we dont expect a c any impact if it is less than 30 days. On the Services Side you should expire that deeper because i think you will see a drop. A Public Administration element. Alix we will definitely getting checked in with him. You mentioned price rises, they fell but could take up again because of energy. What will be the correlation . How long do they have to stay4 companies to pair back . Tim factories were will pair back production when people stop buying the product and people will stop buying if the product is too high. We will see transportation costs grow. That started september. You will see the modly factor scale back on productions because energy costs are so high. Steel and aluminum. We will see that impact. I dont know about people stopping buying unless the prices get too high. Guy that doesnt appear to be any evidence at the moment and we have the employment numbers coming friday, what is your read . There doesnt seem to be any notice that it is backing off significantly . What is your take as to what the labor market looks like . Tim a lot of moving parts. I think the summary i have it for this month is that companies dont see the urgent need to resort to immediate layouts to get headcounts down to meet profit targets. A couple months ago they used attrition to try to get headcount targets and that is a slower process. In the month of september, more comments around using freezes. That is more of an extreme measure than attrition but not as extreme as layouts. I think companies are still trying to manage headcounts down and that is the safe bet if you are not sure. You go on the conservative side. That is all set by the fact that we worked so hard to get them. In the month of august it indicated the attrition approach indicated companies didnt feel it was urgent to get the headcount down. What has happened in september is they are using freezes. It is a little more extreme but different from the layoff that we saw back in may when people realize the second half of 2023 would not be as strong as we thought. Alix we really appreciate it as always, tim fiore. Birkenstock rating ipo targeting a 9 billion valuation. You are not to wear them with socks. Details next. If youre trying to get a view of the whole organizational Financial Health and youre trying to do that through multiple systems, that makes it very, very cumbersome. Its not just tech, its not just people. Its how they Work Together to provide that experience to the customer. As a finance organization that is what you want to do. Todays the day you graduate from Southern New Hampshire university. Ive been waiting for this day my whole life. The fact that i get to walk across the stage and get my degree, its honestly unreal. Dont ever stop. Keep on believing in yourself. It is never too late. If youre out there to wonder if you could be an snhu graduate today is the day to find out. Visit snhu. Edu. Alix youre looking at live shots. Coming, Jeffrey Sherman joins us at 1 00 p. M. New york time. This is bloomberg. Gaia, get your stocks out of birkenstocks get your socks out of birkenstocks. I want to bring in our ipo reporter. Was anything unexpected . There was a question mark on friday what should happen if the government shuts down we seem to have been spared for now. We may have to relook in november. They have gone out with the price range started their formal investiture. They are looking to sell as much as 1. 6 billion in stock. Birkenstock is offering 10. 7 5 million shares. The equity backer is selling at the same price. It is very much in theme with what we have seen in the past couple of weeks. We had the norwegian software involved. There is also durable capital. I think it is very much untrimmed. On trend. Guy what does the money get used for . Ryan it will be used to pay down debt. It will be for reducing the debt load. It should be good to see how it is a retail focused ipo, different from what we have seen in the past two to three weeks. Very dissimilar to instacart. This should be another good test to see how constructive investors still are on ipos as an asset class. They have done quite well in the past couple weeks and months since barbie came out. The peak sandals that pink sandals that Margot Robbie were in the movie, people are rushing out for them. There are vegan ones, plastic ones, whatever suits you. Guy this should have been what you bought on friday. You could have bought a pair of the plastic ones and that would have been perfect for walking. You missed it. Alix i am going to return the boots i bought on friday. I didnt wear them. I should have done that. My bad. Guy i am here to provide fashion advice. Alix it is hard for me to buy birkenstocks because they hardly ever go on sale. Take that for what you will. Guy which means everybody else should go out and buy them. We have a counter indicator, if alexs bank it you should go is a buying it you should go short. Thank you very much indeed. I am not sure quite how to make this, but everyone has been kicking around the story, jeffries out with a note talking about the new range of weight loss drugs out there that could potentially they talking about saving millions of dollars because lighter passengers and planes and less fuel to burn. When fuel is as expensive as it is to burn, maybe we all need to be lighter. Alix it was quantifiable and the analysts no, it was a real number, not just a theory. Guy it is easy to work out good you know the average weight of your passenger because you work it out and so they do actually know these numbers. It was new zealand that was weighing passengers for a while just to check out how much everything weighed. They probably have a good idea. You take x numbers of tons of weight off of the airplane and that means you need less fuel. Alix the article talked about different industries. You can think about apparel, if you are using less material to make clothes, that will increase shirt profit. I thought that was quite interesting. Guy it is going to throw off the sizing models which will be interesting. You work through the socioeconomic effects of this, absolutely insane. You look at the British Government and the National Health service, if you were to change even slightly some of the arithmetic around that, absolutely massive the effect. The airlines are just the leading edge in this whole story. Another story we should talk about as well. If you are a Financial Advisor, cover your ears. Financial advisors facing in existential crisis. Banks offering limited returns. Why do you need a Financial Advisor when it is that easy. We will talk about at next. This is bloberg. Alix we will take a look at what is buzzing on wall street. We are at how Financial Advisors are trying to stay relevant and dare i say cool. This is interesting. Ed talks about how Financial Advisors are just much older. It about how Financial Advisors are just much older. Sally one third of u. S. Investors use a Financial Planner. That jumps to about 70 when you have over Million Dollars in assets. Only one third of those Financial Planners are under 40. They have started to feel they may be unseated and under threat by some social media, tiktok, other accessible advice you can get when you are making your decisions on risk allocation on their robo advisors and algorithms and the portfolio situation on allocation is in looking as good anymore. All of these things are coming together to raise the question is do you really need a Financial Planner and advisor anymore. Guy so i can get 5 in a money market account. Why do i need a Financial Advisor . Sally 5 in the money market, cd and savings accounts offering now 5 or more why would you pay a Financial Advisor about a monthly fee or an hourly rate or 1 of assets when you can essentially do that on your own . The answer is while they are becoming there is a question if they are becoming obsolete and having an existential crisis, but there is an argument of why we need them but they need to rethink strategies. The low risk and high return environment will not last forever. And there are complex questions around planning for your Health Savings account, retirement. Risk lies a rowboat advisor can help you with. Alix this goes to the point that they are trying to be cool. There was a meeting with Financial Advisors to get the buzz going. Sally they are trying to reinvent or reimagine. There was a meeting in l. A. And it comes back to the old idea that you need a Financial Planner when you have big life events like a birth or stock award. There are things that people dont know necessarily when youre investing in a shortterm cd or treasury, they seem to have the same yield but treasury interest isnt taxed at a local or state level and these are things a Financial Planner can help you with an you may not know to look on the internet or social media to get answers like that. Guy thank you very much indeed. Lets get back to the markets and talk about what is happening in europe. The stoxx 600 down by 1. 31 . There hasnt been a monday in quite some time when they have finished lower and today may break that. In europe down heavily. Bonds softer generally in europe. The italian 10 year and pmi data that wasnt as strong and Employment Data that actually pushed higher, maybe signaling a slowdown in the italian economy. Growing concern around what is happening with the italian 10 year. The eurodollar down by. 7 . Dollar strength comes back. It is a sea of red across europe. The data paints a picture on what is happening with the u. S. Economy. Jamie dimon talking about the risk of significantly higher yields from here. What breaks at 7 . We will talk about that next. The european close is next. A conversation is coming up next. This is bloomberg. Explore endless design possibilities. To find your personal style. Endless hardie® siding colors. Textures and styles. Its possible. With james hardie™. Hi, im jason. Ive lost 228 pounds on golo. So when my doctor told me i needed weight loss surgery, its possible. I knew i had to make a change. Golos helped me transition to a healthier, sustainable lifestyle. Im so surprised just how crazy my metabolism has fired up. I have a trust in golo cause i know it works. Golo isnt like every other program out there, and im living proof of it. announcer change your life at golo. Com. Thats golo. Com. It is monday, the second of october. We are into the Fourth Quarter and it has not exactly started well. We will deal with the details in a second. The countdown to the close starts now. The countdown is on in europe. This is the european close with guy johnson and alix steel