Volume was light yesterday, picked up a bit today. We are watching what feels like an unstable market right now. Equities not the center of the action. Action is in the yen and bond markets. Some single stocks worth watching. Ebs out with an interesting note, talking about maybe the fact that burberry is positioning itself in trouble elevated a fashion. The price point is too high for consumers going after its goods. That tells you a lot about where the consumer is right now. The italian 10 year, the market probably feels like it is seeing more action today. Does feel better writer, but the action is in fixed income and foreignexchange. Equities yesterday lower, but we are not seeing the whippy action of these other Asset Classes. Alix once we get that stronger than estimated jolts number, equities are getting hit a little harder. S p down. We work more immune to a higher yield earlier in the day but maybe not so much now. This looks insane. 10 year yield in canada up by 23 basis points. Market playing some catchup, but none the less, this is a big move, hardly any headline. You had a governor saying there is a risk that companies will keep raising crisis, but 23 bits is big. 30 year, 10 pips. Another new cycle high. Everyday hitting the highest level since 2007. I feel like i am literally saying that every day. The move of the morning, dollaryen. The intraday chart will be more interesting, but now it is down by. 5 but that does not tell the dramatic story for the dollaryen. Guy that is why i am comparing and contrasting Asset Classes. This was not a grind lower. We had up to 150. I do not know what was happening. It could simply be that the bank of japan is bringing around. The market is so jittery. My simon white was saying the effects of that could be huge. I do not know if anybody gets exactly was going on here, but we have seen some elevated action. That is not what we are seeing in other Asset Classes. This move today, we move up through 150. This is the point where the jolt number comes out of the states stronger than anticipated, implying that this softening of the u. S. Labor market will not unfold as anticipated. You get the move into the u. S. Market and this move with the dollar. That sense the dollar up. Who knows what is happening at this point. But that is the elevated shaft. Other Asset Classes moving more gently but over the last few years, all of these Asset Classes are moving aggressively right now. Alix the first shot on the list is what the doj will do. Lets get more on this with claudia pensari. What do you think happened with the dollaryen . How will that filter out . Claudia i was listening to your discussion. It is probably not fully true. Equities are not reprising. We see that across the different elements. Some are underperforming. I am thinking that the u. S. Has been underperforming since last year. With growth being very risky despite rising rates, it has put pressure on every currency outside the u. S. Widening gap. There are also some technicals on the longer end. Guy what do you do as an investor . What is your advice to people looking to invest in this highly unstable environment . Do you step out of the way . Try to stay invested . What do you do . Claudia we are invested. We have been invested. People should be probably more defensively bullish. I think about equity performance since the beginning of the year. They are underperforming. I am thinking about consumer staples. People should be balanced in their location. It is true that they long end part is still rising, but if you think about the apex of higher rates, the economy should slow down. Recently, we had some technicals and liquidity is on the u. S. Market. It makes volatility across the east segment very high. That is also something people may keep in mind when they think about asset location. Alix break that down, what does that do to the yield sensitive sectors . I am thinking about tech. We have been waiting for tact to roll over. We have been waiting for a huge selloff because of the rise in yields. We have not seen it to the same extent. We get it or is the tack big tech now i save trade . Claudia u. S. Tech has been a safe trade. Balance sheets are strong. With our position because we believe that current valuations which is not the case and other regions. Think about europe, where valuations are this has not been the case in the u. S. Some parts of the u. S. Market are still rising. I. T. In the u. S. Is part of this part of the market. Guy can i come back to the bond market . Ray dalio was talking to david westin. He was saying do you think these yields are good because you have been conditioned to the last 10 years to believe they are good . The yields they have an outlook good relative to those last 10 years, but are they really good . Is there a danger that there is more to go . This could be where rigs are and will be for a long time. Do we fully understand the implications of that . Catherine man of the bank of england was saying yields in the u. K. May be too permanently higher. That is the case, our portfolios out of position right now . Claudia [indiscernible] to the point where economies start to feel the pain. If we enter a major slowdown, it cannot keep tightening and keep rates where we are. The current, from the central banker that the economy has been resilient [indiscernible] if we start to see defaults increasing, and you have something from central banks. The arc position for higher yields. Value is a big movement back and outperforming over the last three months. Essentially, when you of high valuations and rates rising. This is looking at where it is appealing for the u. S. Market. Alix we appreciate your time. Thank you. Stocks deteriorating now. Coming up, queso five teaming up with a sports sponsorship deal. We will tell you about it. And lets hear what ray dalio had to say about rates. He spoke to david westin at the greenwich economic forum. You are looking at now close to 2 . That is not bad, but it is not great either. Great is 4 . But it is not that. And you have prices. 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. That first time you take a step back and see everything youve accomplished. I made that. With your very own online store. I sold that. And you can manage it all in one place. I built this. And it was easy with godaddy. I am doing this. With a partner that puts you first. Start for free at godaddy. Com sell guy after a weekend of golf, we should carry on the conversation. Sofi turning its attention to virtual golf. Golf is the august obvious next example. The financial giant announcing a deal with golf league. For more on the deal, we are joined by sofis ceo and sonali basak. Anthony, welcome. Why golf . What is it about this golf format, this virtual format, that you want to be involved with . Why do you want to go down this way . Anthony our goal is to become a top 10 financial institution. In order to do that, we have to become a trusted, household brand name. Partnering with wellknown brands is key to that. We saw success in partnering with the nfl. We are looking for other sports. Our members are where sports are happening. What was interesting about this relationship is it leverages three things we want to do. First, we at sofi apply technology to add more value. Mike is adding technology to the traditional game of golf to make it more accessible, broaden its appeal, and drive more interaction with younger audiences. Second, it is great, wellknown brands. The pga is a known investor. Tiger woods and worry also in and orry also investors. We are filling an important void. That is after monday night football ends in january. We will kickoff in january for 15 weeks on primetime valid television, the place to reach large, unduplicated audiences. Sonali we are asking why golf, but you can ask why now . You have a sense of the Consumer Holding up but we are also seeing cracks in the market. Is this the time to be investing in such a Significant Partnership . Anthony as we think about our company and building value, we have taken a prudent approach to make sure we are managing our business prudently, working around quarters corners, having contingency plans. The overall size of this deal is not an immaterial amount. It will be a significant amount of money for the league but relative to what we spent overall, it will be a small component. But it will be the type of element that has a footprint bigger than its foot. The more household Brand Awareness we have, the better the adoption of our product. It helps drive growth. Since we are positive and had nine consecutive quarters of revenue growth, we are on track but for profitability. Alix your products per customer has also been rising. You want to get more people that have money to put into your products and a few more of your products as well. What are the worries that you have Going Forward . Is it the economy . Student loan repayments . Is it not enough engaged, wealthier, younger people on your platform . Anthony sofi is the only digital one stop shop in Financial Services products. One of the benefits from being a onestop shop is we have a diverse set of businesses. Some do very well in a high Interest Rate environment, some in a low one. In the high rate environment, we see significant demand for personal loans and checking and saving accounts. Sofi money offers 4. 5 interest. If you do direct deposit, you have no fees, full functionality on your phone, the ability to pay when and how you want and having all the data you need to interact and pay your friends or bells, as well as deposit checks mobley. It is unique with no restrictions on how often you spend and no waiting for a treasury to become due. In this environment, we have been successful but also in a low Interest Rate environment. The things we worry about are the things everybody is worried about part of soft landing . When will rate increases stock . Making sure we have it from businesses that benefit when rates stop increasing. The backside of that change could have an even greater tailwind for us. Now that student loan payments are back him a there is more demand for student Loan Refinancing. We could see more demand for refinancing mortgages. Guy you just asked all the questions i want to ask. What happens in these kind of environments . What do you think the environment will look like a year from now . Are we going to see a soft or hard landing . Is the labor market going to hold up . What is your best guess about the trajectory of the u. S. Economy . Anthony we provide an outlook that calls for a soft not hard landing. We believe gdp in a soft landing will be down one to 2 . Unemployment will go over 5 . We are basing our Interest Rate curve off of the curve implied in the market that is priced in. We still believe a soft landing is the most likely outcome. We still believe there are rate increases ahead, we believe over the next 12 to 18 months we will see increases like in the curve. Sonali what do you see out of consumers . He First Student loan repayment comes this week. Some have not made it yet. What kind of conversations are you having with your clients . Do you have concern and what that might look like after students have not had to pay for so long . Anthony to reiterate, number one, we are starting to see the compounding benefits of being a onestop shop in driving number growth. We are seeing more efficiency in effect that we have all these products and marketing working together. We are seeing compounded benefits in number and product growth. That started in q2 and continued in q3. Second, Strong Deposit growth, 90 of deposits are from direct deposit customers. That is a trend we also cited. Lastly, from a student Loan Refinancing standpoint, we set we see a large increase and that people wouldnt refinance because either they can get a lower rate or they can lower their Monthly Payment by extending the term. Doing that comes with some risks in that he will pay more total, because we do not have prepayment penalties and we do not have refinancing charges, you can refinance your Student Loans over a longer period of time, lower your Monthly Payments what fits into your budget today. You can still make larger payments and he went in the past but it will help you navigate this environment more effectively. Sonali the time you have the sofi stadium deal, there were questions about what this we bring to sofi. Not surprising you do so much in sports, but how many people did it bring to the sofi world investing in a stadium that large . Especially because you will be naming a new center soon. Anthony we invested in sofi stadium as part of our strategy. It has little to do with my passions. Data drove it. We spent about dollars a year in sponsorships to reach only 15 Million People one time a year. From the nfl, i know that a im time football name can reach 20 million plus people in one evening. We are able to spend more money to reach a primetime audience 4 to 6 times a year. My calculus was that there would be 4 to 6 games a year and we could run ads during that time and increased the amount of times we reached 20 Million People for almost the same cost. It has proven hugely successful. It increases Brand Awareness, makes marketing more efficient. We are seeing a compounding effect in number growth. Alix thanks. This is bloomberg. when the day that lies ahead of me seems impossible to face a lovely day lovely day lovely day lovely day a bank that knows your business grows your business. Bmo. Guy end of the day in europe. European equities move to the downside picking up. One stock that is under pressure is burglary. Ups coming out with a fairly harsh note on burberry, price target cut significantly, down to 16 pounds. We are seeing ubs signaling that that price point may be too high for consumers. It will be interesting to see whether other brands are affected in the same way. The not super high end stuff, maybe a level below, as the consumer starts to weaken, it weakens from the bottom up but gradually reaches into that upper east lawn but not top end consumer. Burberry may be a victim of that. Alix you look at watches. I wonder if the story is telling the same narrative. Rolex prices dropped last month. But the entrylevel watches are their prices fell just. 8 . What does that tell us . The super super high end is getting hit a bit, but the aspirational not as bad . Or is it just saying that everyone is feeling the pinch and all different places . Guy i am not 100 sure that the secondary watch marketplace by the same rules. Some of the high end rolexes went up to such an extraordinary degree during lockdown. Maybe some of the steam is coming out of that market event. The cartiers aredng a bit better. We will go into this in more detail next. 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Jobs number a huge catalyst, ripping into that dollaryen move. Equities under pressure. Session lows. Not the elevator shaft action we are seeing other classes, but equities are under pressure. The cac is down around 1 , ftse around. 5 . It is fairly mixed, but volume has been picking up. I will share this chart, then we will talk about individual names. Feels like a market moving more in one direction. Down by 1. 1 . We have been moving lower and lower. We did get an acceleration to the downside as a result of that jolt move, but it has not jolted the European Market as much as the u. S. Market. Single stocks ups downgraded burberry. Boohoo down, earlier it looked worse. They are pointing to a less positive picture. It is interesting. It would be interesting to see whether or not you see people pulling back in areas like fast fashion. Maybe they are spending in areas like that. Some of the big heavyweights have been under pressure. Down by 3. 46 antofagasta. The other area is utilities. They have been under real pressure. You think about the move out of the bond market. Utilities front and center when he think about that kind of yield story, that obvious comparison. That is where we have been seeing some of the action as well. Today turned out to be quite a day. Lets talk about what tomorrow will bring from a european point of view. We will get some more european pmi data. Pmi data has been negative for some time. If you look manufacturing may be bottoming out. What happens next for three with services will be interesting. Tesco will be fascinating. If you want a good gauge on what is happening with consumers in the u. K. , tesco is a great place to start. Food prices higher. Alix but maybe this is good news for you a new survey shows groceries in britain are getting cheaper. Feels like a whole different world. Now it is a price war. Volume versus margin, is this the next step . Price target on tesco of three of seven pence per share. What are you expecting tomorrow . I expect tesco to beat consensus. What i mean is it should be consensus on both. I expect actions around 8 , more than a consensus and a slight improvement in the margin. If top management decides guy how do shares react to that if we get that much of a more positive narrative than anticipated . Nishant in my opinion, there would be a few factors to take in your account. Number one would be what is Consumer Behavior . What will talk management think of the last few weeks of q3 . What are they expecting for the next 3 to 6 months . If there is positive commerce, i would expect stocks alix perfect prices, will we be in a costcutting war . Is tesco in a position to make up for those margins with volume . Nishant it is a tight rope between volume and profit margins. Volumes right now are in the red. I do not expect volume to come back to the positive before you 22024. Q2 2024. Right now, despite the price war from things like all the, tesco is able to prefer preserve its profit margins. That does not include quantitative tightness. It benefits from a slight improvement in constructive Consumer Behavior. It preceded datalike, real wages and consumer confidence. Consumer is faced with its market share. So as to tap any improvement. On top of that, it is doing a fantastic job in terms of price perception. It is investing in the right places. Tesco is the best place. Alix we look forward to the numbers. Thank you. Staying with food, we were into this this morning, krispy kreme is considering a sale of insomnia cookies. They bought the bakery in 2018. They say it would allow them to focus on donuts, but these cookies are awesome. Guy i fear you have got history with these cookies. They are called insomnia because students eat them late at night. They decided to do that. Alix this goes to an interesting health thing. If the weight loss drug has come to market, that curbs appetite for food and drink. Does it actually change eating habits . If you are a company like krispy kreme, and you have to rethink how you will manage that. Guy we have been talking about this. How is it going to affect the market . Was it the jeffries note talking about how maybe United Airlines could benefit . Youve got all kinds of Food Companies talking about this. Hello nova talking about this as well. They are watching this carefully. This could be a wholesale change in what happens with the way we consume food and snacks. Tesco a be a good example as well. Plenty of snacks you will want will not want to eat if you are on these drugs. Are we going to see the weight supermarkets stack shelves changing . Alix and restaurant sales . If you have and olive garden with its allyoucaneat breadbasket, if the whole point is to curb your appetite, you do not want an allyoucaneat basket. The bread is the best. Are you going to curb those habits . Or is it not going to have the impact we are discussing . The timing was interesting. Guy, if you are in new york soon, we will get you a cookie. Guy that would be great. Insomnia cookies. We used to eat Different Things that university, certainly at 2 00 in the morning. Not cookies. Other things. Lets talk about the markets. They have given up a bit of weight. Ftse 100 finishing near session at but only down about. 5 . Dax down 1 . Cac 40 down 1 . Spanish market down more. What we talk about next . We will talk about how the morning has progressed with the jobs number and the big move in the yen. Potentially the bank of japan is doing something. We do not know. Intervention or no intervention . I do not know. We will come back to that. This is bloomberg. Guy coming up, chris ailman at 3 45 p. M. New york time. This is bloomberg. Guy we need to talk about the yen. It went down, then up rapidy speculation that japanese officials may have been behind this. We do not know. I am not saying it was intervention. Maybe it was or they just picked up the phone and asked what was going on and that caused jitters here yet jitters. Is this some preshock, a warning sign of bigger moves to comment . Win thanks for having me. What is behind this . I think they are trying to keep markets guessing. Back in october, when it intervened, it was a big announcement affect, but in the months prior to that, officials in japan were saying we made some stock interventions. It is trying to keep the market guessing on the tactics. At some point, wheres the beef . There is nothing behind it. I do not think there is anything in the Monetary Policy changing. Alix if it does not happen soon, what is the upside for dollaryen . Win we had the 152 high from a few years ago. After that, charts get messy. Maybe the bank is trying to buy some time. Indications are more and more officials are coming around and saying that 2 target is coming into sight. March was an eternity ago. Guy but that is the problem. The longer they stall, ultimately the end of that process is more disruptive. When we finally get the move, how do they manage the process . Win that is why they have been so afraid to pull the trigger. They have been running this for almost 10 years. The issue is how do you exit . This unprecedented period of all toluse policy, how do you get out of it . If they were not so worried about aftershocks, i think they would have tightened and while ago. These are the unintended consequences. It will normalize policy but that has other implications. I cannot blame them for being nervous, but do you pull the bandaid off quickly or slowly . We will see that. Alix feels like they are peeling it off really slowly. Whenever i see any note about the huge bar shock coming to market, the number one thing on there is the boj. Where do you think the trickle will happen . The dollaryen spikes higher, volatility continues. We wait for the bjo boj to do something definitive. Where is the aftermath . Win a few months ago there was that fear that when you normalize policy all of a site Interest Rates in japan become more positive and that would have spillovers globally but i think it is the other way around. Everywhere else, you can see where the 10year u. S. , 30 year, in europe, in your upcoming decade highs in yields. It is almost detail waking the dog. The rest of the world is grappling with higher Interest Rates. That tell risk tale risk the world has normalize. We have been in 15 years of postfinancial crisis and are finally getting back to normal. Japan is late to the game. You can talk about the known unknowns, but it will be a shock, particularly in japan. Guy how do i protect myself . Win the flight to safety is there. The dollar is benefiting from many factors, one is the safe haven, last man standing in terms of global growth, stronger fundamentals. U. S. Treasuries right now, room for base to go higher. But it is safe to say we should stay out of risk assets. You need to stay focused. Do not go on the credit curve too much. You mentioned japan, but i think china is a big risk in terms of Global Financial stability. Something bad is brewing there. Alix we appreciate it. Bloomberg dollar index extended. Coming up, Sam Bankmanfrieds trial is getting underway. Jury selection today. Details next. This is bloomberg. Alix stocks deteriorating. Nasdaq 100 up 1. 7 . Abigail is talking the moves. Alix abigail here is the yen chart. The jolt announcement coming in with more job openings than expected. Dollaryen briefly back above 150. You can see the yen rallying in a big way. This chart looks like we will continue to see the dollaryen go lower. That suggests maybe there will be some followthrough to the speculation, even though the boj needs to build its credibility. Its loss intervention did not stick to what it was saying. We have some big declines. The s p 500 is down 1. 5 percent, tech index at 1. 7 . Real estate and discretionary leading the charge lower. Continuation of september, worst of the year. The month is young but this is the worst quarter of the year. Weakness has everything to do with what we are seeing here. If you take a look at the two year yield, backing up 72 basis points on the year, 10 year yield up nearly a percent at 4. 78 levels. Volatility also rising. Nasdaq 100 fix closer to 24. Steve pointed out a brief inversion that could point to something more. That extreme is what folks would look for in terms of a selloff. Russell 2000 and is moving average we have been talking about it forever. S p 500 is about to do what we have been talking about. Likely less than a percent away from its 200 day moving average. You could make the case of the s p 500 is now confirmed or close to being confirmed for the move closer to 4000. Themes as of the selling in august and september, now in october. It will be interesting to see the earnings season. Guy thank you. Going to be a busy week. I want to take you into a story we will all pay a great deal of attention to. Jury selection begins for Sam Bankmanfried. This is over the collapse of the crystal cryptocurrency exchange. He is charged with seven counts of fraud and modern laundry. Kailey leinz joins us with the latest. What will we get today . How does today set the scene for the rest of this trial . Kailey today is primarily about the jury. They have started the process of vetting potential for jurors. There, they will move into the arguing phase. Sam bankmanfried facing seven counts related to Money Laundering and fraud. If convicted, he could spend the rest of his life in prison. He has pleaded not guilty to his charges. His fate will be decided by the outcome of this trial. Posutors allegedly biggest financial fraud in american history. He also had cofounded and operated separately things that imploded. Prosecutors say customer funds were improperly used to find risky trades, political donations. Sam bankmanfried and his team will likely argue there was no intent to commit fraud. Intent will have to be proven. Alix we had a list of witnesses. What will be the first caps off . Kick off . Kailey there are three cooperating witnesses with the prosecution. Gary wong, shawn fain, and caroline ellison, ceo of she is also Sam Bankmanfrieds exgirlfriend. Leo pleaded guilty to charges and are cooperating. Their testimony could be key in making the prosecutions argument. They will tell us what was going on in the final days at ftx. They will be the ones to watch out for. Alix stay tuned for full coverage of the ftx trial on bloomberg crypto beginning at 1 00 p. M. New york time. Guess include justs guests include pat toomey and kristin smith. Stay tuned for that. That wraps it up for us on what looks to be unfolding, a terribly ugly session. Coming up, Stephanie Chu joins us. How much extension can we get . This is bloomberg. From the heart of where innovation, money and power collide, in Silicon Valley and beyond, this is Bloomberg Technology with Caroline Hyde and ed ludlow. Caroline im Caroline Hyde in new york and ed ludlow is on assignment. Coming up, the trial of Sam Bankmanfried takes off in manhattan as he faces charges of swindling billions of dollars from his trip to platform. We will have full coverage ahead. A Bipartisan Group of u. S. Senators are looking to visit china to address micron and we will have more on that