Guy ok, look at this board and tell me if we just got a massive, almighty blowout payroll number. You look at these numbers and you are thinking, and of the week, nothing really to see here, we can move along until next week. We just got a huge print out of the United States. This is a big piece of data and it was massive. The market in many ways shrugged its shoulders. Maybe we already had the move. Maybe we are thinking about the cpi data next week. The stoxx 600 is up by. 5 . The pound is barely budging against the dollar. German yields are a little bit higher, but we have been off of 3 this week. You look at this board and i do not see a big blowout payroll number. But thats what we got. Alix same deal in the u. S. , with the exception of the bond market. Two year yield up nine basis points. All of that feels very dramatic, but the nothing else at the same time. In the middle of the week, the s p, we were talking about the 200 day moving average, 26 points away from that. We are well that level now. We are down by. 1 . Out of the reason that indexes doing well is pioneer natural resources. The best performing on the s p over takeover rumors between exxon and pioneer. We got a pop higher for the bloomberg dollar index. Then we kind of paired some of that. Now the currency is a little mixed. Just up. 2 . Guy yeah, but this was the number we have been waiting for all week. This was going to be the huge moment. Im not entirely convinced that the market is taking it that way, which is a little disappointing on a friday. We were expecting fireworks this afternoon. We are, after all, in the volatility business. German 10year. Wednesday we get 3 . We fade that pretty quickly, and as you can see, that is the pickup there on the payroll number. That is wednesday. There is all kinds of other things going on earlier in the week. It was a massive move on the data we have seen. But maybe the market has already gone through that and has and is thinking it has priced this. Im confused. Alix i dont know either. That is why we are not the experts. The fear derosas, we talked to her earlier about the high payrolls number and what it means for the fed and growth. Sophia inflation is starting to make downward progress. I think another important aspect is we are seeing wages moderate and we are also seeing supply come back into the labor market, so it will give the fed an opportunity to stay on the sidelines and see how things develop. Guy yeah. Wait, watch, see what happens. At the moment this is an economy that feels like it is riding high. She just upgraded her thirdquarter quarter gdp forecast significantly. Fourth quarter we are going to hit a speed bump, but maybe we get through that, but we dont get a significant recession. That takes us to our question of the day. What landing . Joining us now to discuss, eddie, you are standing next to me. What landing . Eddie to me this is what a soft landing looks like. C what we got from the jobs number, we got a hard reading saying the economy is growing strong. At the same time youve got inflation coming off, Wage Inflation coming off and you still have some room for the Participation Rate for workers coming back. What are you seeing . You are seeing yields having to build in. You are seeing bears steepening and you see the stock market saying we can cope with that because the economy is strong. Below going to keep buying. To me this is the perfect reaction. I think the initial action reaction was what you would expect. I inflation, or a fear that a fed that is going to hike. I think people are looking at it now and saying, this is actually really exactly what the fed is aiming for. Alix the bond market is still selling off. Do you agree with what eddie was saying . Ira we have talked about this. If the Federal Reserve does not cut Interest Rates in 2024, which is our base case at Bloomberg Intelligence rate steam. Rates team, the bond market needs to be flatter. What is the interesting trait to me not happening is you do not see the fiveyear sector selling off more than the rest of the curve, because that is the adjustment that has to take place if the fed is on hold even longer than what we think. You keep on getting data like this and you have to keep pushing out when you think the fed might have to cut rates. That is no time soon. At least based on this data. Guy was interesting, kind of the biggest moods initially did come in the fiveyear. That move has retreated. Are we at the point where the fed and the market are aligned . Have rates come up enough to align themselves with what the fed is thinking . If rates go further from here do you think the fed will be worried . Ira i think we were at what the fed was thinking if you just take the dot plot as gospel, which you cant. If it worked then 10 year yields should be about 40 basis points lower. Basically where we were two weeks ago is about fair value based on what the fed thought. So, the market is basically saying the fed is going to have to shift their opinion in particular, because the data has been much stronger than just about everyone has a suspected. Look at the jobs numbers today, you have pointed this out on tv all morning, that it was almost 100,000 above the most optimistic estimate. I think as the economy changes the market is going to instantaneously shift what he thinks the fed is ultimately going to do. Alix citi upgraded their call on global stocks to abide, saying we have balanced accra balanced macroeconomic risks. Does this make sense to you with that call . Eddie i think so. Unless you are seeing some sort of major correction brought on by higher yields which triggers been which triggers an event the fed has to cut, which is a bowl steepening and a different scenario. That is the steepening markets are used to trading. In this environment as long as the economy remains strong it makes sense. Why not go for the nasdaq, one not go for the speculative stocks . We are inverted on the two stands at the moment, right . Twostens at the moment, right . How much of curve uninversion do we get . If that goes much further, i dont think a lot of people know just how much higher 10 have to go. Guy in europe we are scratching our heads. The fed in the past has had to react to global events. It is theoretically the central bank of the United States, but in the past events have forced the fed to react from outside of the United States. Are we setting ourselves up for that scenario again . In europe the Economic Data is not good. Many parts of the emerging markets are already seeing cuts going through. They are yields in the United States, but is it our problem . Is that where the problem is going to start . Eddie and then exported to the circular . Its possible. The pmis in europe still look like stagflationary economy, right . The pmi numbers are very weak. It shows there is not growth. But they appear to be bottoming out. Guy that is before this big rise in the cost of capital came through once again, exported by the United States . Eddie it is a problem for europe. I think that will remain a problem for europe. I think the u. S. Is fairly immune to contagion risk unless there is some sort of banking crisis again, right . We had better earlier in the year. But i do not see that with higher, steeper yield curves. I dont think that is a problem for the bank. Alix again this out for me on the short term. What if we get a hot cpi on friday . Happens . Ira i think we could have even more of a flat yield curve. I think there is a limit, just talking about the curve discussion. I think there is a limit to how steep the curve can get in a bear market. With 5. 1 as more or less the yield on the twoyear note, if the fed is on hold for the next 18 months is going to be difficult for tenyear yields to get above that level. You could have a pancake yield curve, but eventually the next big steepening of the curve has to come more from a significant bowl steepening. So, twoyear yields being lower in anticipation that the fed is going to cut. We could get to a pancake yield curve in a hurry. That could be one trait after we get a hot. 5 on cpi next week. Guy . Gappy very gappy markets. What is the relationship with europe going to look like over the next few weeks . Well has come down sharply this week, and im wondering if that persists, what impact that is going to have back into bonds . Ira it has some effect because of the expectation of inflation. Keep in mind all of this move has not come from the Inflation Expectation side of the rates markets. It has really come from real yields coming up. People think the economy is going to be hotter. That means things like our star is probably even higher than we had suspected it was just a few weeks ago. So, it is really the real yield move here that is dramatic. We are talking about fiveyear real yields potentially hitting 3 , we have not seen since it has been almost 20 years since we have seen that type of level on shortterm real yields. Alix it is such a good point. We keep forgetting it is not inflation breakevens that are moving higher. Thank you so much, ira jersey and eddie van der walt we are going to get more insight into the question of the day. What landing . Gerry fowler, ubs head of equity strategy, is joining us next. This is bloomberg. I think we are still likely to see a mild recession at some point next year. Probably going into midyear, first half. I think that because we are going to see the fed, as it has been trying to get the market to believe, now they finally leave it, they are going to have to hold rates higher for longer. This tightening pressure is going to feed through to the economy, consumers and businesses. Guy rebecca patterson, bridgewaters former chief investment strategist speaking to alix to be asking, what landing . Gerry fowler, head of ubs equity strategy. If you are a European Equity strategist and looking at the data coming out of the United States, how do you answer the question about u. S. Having no landing and the european economy may be having a landing . What does that how does that manifest itself in your world . Gerry there has definitely been some divergence. Has been a surprise how weak the european economy has been, both in terms of the economic surprise through the second quarter, some of the retail sales data we have seen with the august data coming out and surprising to the downside, but also very much in the surveys. We are not just talking about the headline pmis. Probably the most interesting thing at the moment is that the backlog of work, particularly in industrial sectors, seems to be deteriorating rapidly in europe. It surprising that europe is looking week in contrast to i wouldnt necessarily say acceleration in the u. S. , the resilience we are seeing in the u. S. Is a marked contrast. Alix hsbc early in the week was saying, i get all the bad news, but that means growth expectations are so low, earnings expectations are so low that the bar to be is low. Does not hold any water for you . Gerry not really. Here we are talking about europe the expectations are pretty inflated. Still got earnings expectations, and particularly margin expectations that are near record highs. And weve got a very good chart that looks at nominal gdp and its growth rate through time. And it is very clear that when you get decelerations in growth, and that applies whether it is a demand driven week is in growth, or whether it is disinflation, which is more the driver at the moment, in both cases you get margin contraction. While we are not seeing more analysts take an ax to their margin expectations is a surprise to me. Margins are going to be far more important in 2024 versus what is happening to revenue. Theyre easy to have a soft landing in revenue, especially when you have elevated inflation. It is also very easy if margins come down for that to be a hard landing in earnings. Our motto was suggested 2024 earnings for the European Market are going to be 17 . Guy so walk me through what that is going to look like in the upcoming earnings season. How attached you think most of the street is . Gerry it is all pretty imminent. We are starting to see a player. In europe lots of companies bidding. About 80 of Companies Beat expectations because winter was not as bad. Q2 was roughly the same. That was in an economy where surprise was significantly negative. That was from inflated expectations. Through q3 the data has looked weak and importantly big sectors like the mining sector, the auto sector, particularly the capital goods sector, are starting to report that they are running out of work new orders have been weak for a long time and now they are reporting that the backlog is also weakening. All stone is a great example of this. You get a big share price reaction when a Company Comes out and says we are not doing as much work as we thought. Our cash flow has significantly deteriorated. The shares will get hit. I suspect in this season we will see more of that from more the cyclical sectors in europe, just from the way they are reporting their pmis and more of the Economic Data. It will not necessarily hurt the revenues, but potentially be consequential for the Pricing Power and margins. Alix what gets hit the hardest . You mentioned cyclicals. Other other sectors that are going to get hit just as hard . Is it really this manufacturing cyclical story that worries you the most . Gerry definitely still is. If you look across the Services Sectors they have been weakening. But nonetheless they are weakening from a high level and starting to look like they are troughimg at more normal levels. Nonetheless, i think the broad market will suffer in various ways because there are three things we are worried about. One is yields. So for that is the dominant factor driving markets in europe. Much all european performance between sectors and stocks can be put down to the significant shift in the yield environment. That has impacted valuations. Probably has not impacted them enough you. We think the European Market is overvalued because it has not reacted enough to yields. But after yields you need to think about margin. We have been talking about that. Obviously cyclicals are going to be hurt most on that front. But also because we are getting more correlation between stocks volatility is going to have a consequence as well and high valuations do not like volatility. Things like the luxury sector, semiconductor equipment, some of these higher valuation sectors that are suffering from crowding as well as some earnings risks still the most vulnerable to us alongside those industrial cyclicals in the space. Guy im now looking for a place to hide. Given what you have just told me. Is there such a place . Gerry i must admit we did not predict this yield moved to be as dramatic and quick as it has been. We did think it was going to be defensible defensives along the lines of utilities. Guy that has been a tough call this week. Gerry that has been a very tough call. Many because we were focused on profits and volatility being the focus. But so far yields have been the driver. Nonetheless i think you need to look for defensive value. It is just that within offensive value it is hard to also avoid duration. This yield sensitivity has been consequential. We view yields as likely peaking at this point because we have a negative outlook for profits. We think weakness in employment will follow. We think we are heading into a fairly normal Business Cycle and the yield move we have seen is actually more technical relating to the fed basically saying theyre going to keep real yields higher for longer. A real technicality is there is more risk in longterm bonds now that the term premium has risen. That has consequences for equities and equity valuations that are reasonably permanent. But to some extent if the move has happened it could be a oneoff. That term premium is back to its 20 year average. It could go higher, but at least we have washed out what has been a historically low level of term premium in Interest Rates. Alix a not very optimistic shortterm view on equities. Thanks for that. Gerry fowler of bs. Thanks for that. This is bloomberg. Of ubs. Thanks for that. This is bloomberg. 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. Was also the first time you heard of a town named dinosaur, colorado. We just got an order from dinosaur, colorado. Start an easy to build, powerful website for free with a partner that always puts you first. Start for free at godaddy. Com alix here is one story i am watching. Walmart, shares are down the most in seven weeks. Is today the company said mozambique is hitting shopping demand. You can see it reflected in europe as well. Have chocolate and blues manufacturers saying they are suffering. Anheuserbusch inbev, unilever, they are all sliding today as well. We know the story. If you take this drug and it suppresses your appetite and your thirst for alcohol, but i dont know, are we getting way ahead of ourselves as to the longterm impact of this . Guy i think maybe, but it is a fun exercise to work your way through. You look at nestle today, under significant pressure. Nestle has been trying to move away from the unhealthy to the healthier stuff. So maybe it does not get hit quite as hard. You could see a reaction above all of this. The market is meant to be a forward discounting mechanism. It is meant to do what it is doing right now and think about the impact of potentially all of this. In some ways this is a yield move. In some ways this is an area you would think you would see more defensive strategies coming in. I think it is fascinating. If you were going to eat chocolate maybe you want to eat highend chocolate. That would be my strategy. Alix talk about it as junk food is what is going to be cut, but that might not be true. You are also eating smaller portions in general. It could hit all of the main players. Inflation is still high. That is still going to bite into the bottom line for these guys and topline. Maybe that is there too. Guy in some ways these are yield proxies. These are cashgenerative companies. We have seen what happens in the bond market. Maybe you eat better, maybe you make more discerning choices. I dont know how this is going to play out. It is a fun exercise to work your way through it. Alix that is nestle, but i still want it. Guy is that nestle . I worry about zurich. Some nice chocolate to be had. We are coming into the close. Let us show you what is happening here. Here are some of those names. There is nestle. These are 52week lows we are seeing. There is ouster him, that is the worst performing stock this week. It has been a brutal week for european equities. The close is next. This is bloomberg. Guy if you would have told me 20 seconds after the payroll number dropped that we would see a positive equity market i may have question that. But that is what we are getting. It is fascinating to see how things have turned around. In some ways you could argue a solid consumer in the United States bodes well for corporate stocks. And maybe that is what we are seeing ultimately being priced here. It is fascinating. We are still down on the week. Lets not make bones about that. This is the picture we have today. Week, let me show you the week. It has been a bumpy ride. The losses came fairly on and we have been kind opening bumping along the bottom cents. This is the fiveday picture. We are down on the stoxx 600. Losses came early on and since then we have been cruising sideways, eating for the catalyst. I thought that may be today. It has proved not to be. Maybe it is the cpi number next week out of the United States. Yield story is interesting as well today. This has been a story this week of higher and higher yields being generated out of the United States and then exported to the rest of the world. You can see that in germany, we this week it 3 but have backed off of it. Today we go up but not that much. Similar story with gilt. Yields higher, but not massively today. The moose came earlier in the week. The eurodollar is back to being positive. The dollar is down. We are up 5. 4 . If you looked at this board and said we just had a blowout number in terms of the payroll number i think you would be maybe questioning that. Single stocks are fascinating again. Novo nordisk is a continuing theme running through this market. Ozempic, these weight loss drugs having a big effect on some big stocks. Nestle, 52 week low. You can see it across the packaged good stocks, which we have been talking about. The big loser this week has been the utility sector, which has been absolutely smashed lower. That is a more direct bond proxy. It makes more sense in some ways. Novo nordisk, up by 1. 5 . Can they keep up with demand . What is pricing going to look like . The big loser this week, today it is down by. 6 , gerry fowler was mentioning it from ubs. This is an Industrial Company out of europe that has had to come through this weekend kind of admit to the challenges that it is facing, and they are significant, and the stock has been brutalized by the market. Will others follow . Is that going to be the narrative coming from this season . Lets talk about next week. The Labour Party Conference is going to be fascinating. This is in some ways a government in waiting if you look at the polls right now. The labour Party Looks Like it could form the next government. We are still a your ad from the next election. Are we going to see some details being added to the policy mix we have been seeing unveiled this week . Next week we are going to get some fascinating numbers. Tuesday lvmh sales and revenue. What is happening there . These are stocks that have been better. Early on the slowdown in the United States. Of course the narrative out of china as well. German cpi, i think that is the final number. And we are going to get great coverage out of the imf 2023 annual meeting. That goes through until friday. From a u. K. Perspective i think getting some more detail, getting a bit of a greater sense of certainty surrounding the policy formulation the labour party is going to push forward, if it were to become the next government, i think it would be a crucial moment for the u. K. And for International Investors and their perspective of the u. K. Alix it feels like we are inching toward a labour party government. If that is the case what does that mean . I want to set the scene on this. This morning the labour party won an election for the Scottish National party. A major boost for the Opposition Party that could be on track to win the next general election. Joining us now is harry quilterpinner, a director of research at ippr. A left of center think tank. Im sitting here in the middle of new york city. Im obsessed with politics in the u. S. Tell me what i should think about for next weeks labor conference. Terry you are right to say that the harry you are right to say that the labour party will be going into the Conference Center in a boiling mood. They are ahead in the polls. They won the seat back in scotland, which is a majority. It is hard to get a majority without scotland. Theyre going to feel very optimistic. But i think there is still quite a big challenge facing them. I think the country are definitely fed up with the government. I think there is a mood for change. But i think the electorate have yet to fall in love with the labour party. I think there is a lot of work to do to set out a vision that really excites people and shows that there is a more positive future. Guy when does that moment comes . We are a year out potentially from an election. Is it still too early for the labour party to start detailing policy . The rest of the world wants to know about, but maybe it is too early to start laying out, because the conservative party has a recent history of picking up on some of those policies and making them theirs. Harry i think it will what you will see is the labour party being quite riskaverse, quite concerned about putting a policy detail. But as you say they might get attacked. Theyve also got to put enough out there both to convince voters, but also to convince businesses, industry that they have got a plan for growth and plan for the future of the country. What i think you are starting to see is the outlines of policy. They have set, for example, fiscal rules. They have set ambitions on climate investment, very much looking over the u. S. And the inflation reduction act. They have set out the kind of parameters of a policy platform. I think we might see some other details start to filter through in this conference. But they are not going to want to tie themselves in knots with policies that risk, you know, damage ahead of an expected election next year. Alix clearly at the tory Party Conference rishi sunak was worried about inflation and not cutting taxes. That is definitely their priority. How does the Labour Party Tackle inflation if they are outlining growth plans and something to compete with the ira in the u. S. . That feels inflationary. Harry i think what you are seeing is certainly fiscal prudence being put ahead of that investment. I think Rachel Reeves has been clear that investment will only happen if it fits within the fiscal rules she has a set, which is about getting debts and borrowing falling. So certainly they are putting that front and center. But i think what you will also see is that investment going into what is called supplyside measures, that will expand the capacity of the economy on the supply side, which should in the long run should not in the long run be inflationary. Given we have so many supply constraints in our economy. But they are going to be careful in making sure that they are seen to be economically credible. We know historically one of the things that has prevented the Labour Party Winning elections has been the view of the public and businesses on economic credibility. Guy how worried is the labour party about the Market Reaction that they will get . In some ways we have all learned a lesson from what happened with liz truss. What lessons do you think the labour party learns from that scenario . Harry i think the labour party have taken the message very strongly that everything needs to be really fiscally credible. It was an intervention a couple of weeks ago where the labour party set up plans to really strengthen the we met of the office for budget responsibility , which is the fiscal watchdog in the u. K. They were doing that to show that they would take external accountability on their economic plans really seriously. They were doing that because they know that when the opr said this liz truss plans were not credible, the market to that seriously. They will make sure they are sending out clear plans, creating stability in the financial and fiscal environment, and their billing held accountable externally to that. I think we should say really clearly that there is a big difference between an unfunded tax cut, which is what liz truss was proposing, and investment in the supply side of the economy and the green transition, which should be growth inducing. Those are two Different Things and the markets get the distinction. Alix sometimes. It may depend on the sector. What is europe going to be watching . How is europe going to take this . It feels like there has been some movement to establish relationships. What is europe looking at . Harry i think europe, the most important thing here is how big the majority is. If there is a majority. Just to be clear, to get to a majority even of one we need to swing bigger than 1997 in this country to get a labor government. It is a big task for the labour party. So it is not at all guarantee. I think if there is a big labor majority i think europe will look more positively on the idea that they can do deals with keir starmer and the labour party that have some chance of being sustained into the longterm. I think if it is a minority government or a very small majority there will be very nervous, because they will rightly look at it and think we could have a conservative government or different Government Back in power pretty quickly and at the moment the conservatives are still very much antiany moves toward, you know, closer integration and so there will be a lot of nerves if there is not a labor majority, which i would say is a massive task, and still seems potentially unlikely, i think. Alix big swing guy big swing in scotland, though. Maybe some other factors coming into play there. Thank you very much, andy. Harry quilterpinner, director of engagement at ippr. Lets check with European Equity markets. Who would have thought it . A positive picture emerging after a day where we have seen a blowup payroll number coming from the United States. The labor market continues to be strong. How does that change the narrative for the uaw . Shawn fain will deliver an update on the strikes we are seeing against the big three automakers this afternoon. We will have the latest on that story. This is bloomberg. What do you see on the horizon . Uncertainty . Or opportunity. Whatever you see, at pgim we can help you rise to the challenges of today, when active investing and disciplined Risk Management are needed most. Drawing on deep expertise across the worlds public and private markets in pursuit of longterm returns. Pgim. Our investments shape tomorrow today. Guy this is bloomberg markets. Coming up, megan schreiber, joining bloomberg tv at 1 00 p. M. New york time. This is bloomberg. Guy workers at a chevron facility in australia are planning to resume the strikes we have seen. That threatens to disrupt global surprise supplies. It is winter season. This is not a direct effect. This is asian buyers that largely buy from this facility, but it has a Global Impact because europe increasingly relies on shipborn gas. Every certainly feels like it has more power. You are listening to the labor secretary earlier on mentioning this fact. Look at the labor data we have seen, that must give labor the view that it can act with relative impunity at the moment. The uaw strike is going to be interesting to see what happens later on. Alix i also am interested in the industries this is happening too. I cannot painted with a broad stroke, but take a look at autos and energy. Those are two under huge transitions. For big energy it is going to alternative energy in the future. So how to allocate capital . It is quite interesting. Guy what about the Health Care Sector . Alix that is just pure labor. I just think it is interesting, and we were talking earlier about the Labour Party Conference. You can have growth and green energy policies, but they do come at interesting costs. It doesnt feel like anyone was expecting. Guy this sense seems to be this could go on much longer. There was a view may be, and the u. K. Government in some ways is falling victim to this as well, that there was an expectation that the labor market would soften, inflation will come down, and that would make it easier to negotiate with the unions. You are not seeing that in the United States. Alix speaking of, shawn fain is speaking right now. He is giving some remarks. We are going to see what happens with talks with ford, gm, and stellantis. Lets get more into this with david wells. I dont see any headlines. He is speaking right now. Youre going to keep you updated. What are you expecting today . David i think he will expand the strike or maintain it at each of the three companies. You recall the last couple of weeks he let ford off the hook initially, then he let stellantis off the hook the last time he expanded it. Gm has not gotten any reprieve. There are issues at every company. The gm ceo saying he thought the union was using Economic Issues and dragging their feet to get some sort of framework for workers at fusion battery plants, that is workers not hired by the union yet. Gm has been bargaining over costofliving and pensions. They dont want to add too much to their costs. Stellantis has this plant where they have not allocated any work and the union is worried about that. In addition to paying other things being bargained each one has their own separate issue that is different from the other companies. I think theyre probably going to make progress on those individual issues to avoid adding more plants walk out on them. Guy do you think a strong payroll number has any impact, any bearing on how this strike is likely to develop . The dater are telling us that the labor market is still tight and there is huge demand for jobs. David i think a tight labor market always gives workers more leverage. This is a case, though, workers in these union jobs, even though they are complaining about pay, they are paid pretty well compared to manufacturing workers in other sectors. Uaw workers are not getting bad pay, they just dont feel that they have been able to share in the record profits of the companies. They still would have a difficult time finding that pay if they were to look for other jobs. It is a tight labor market. I think as we make the transition to electric vehicles and you are hiring workers at battery plants in the make last it is tougher to keep those workers so there is going to be pressure on the companies to keep those wages high. Gm has already raised wages at its battery plan by three, four dollars an hour. There is more leverage to the union, but it is not a make or break thing in this set of negotiations. Alix we heard from julie sue earlier in the day. She was saying the spread between the companies and unions is coming down. This is normal, this is what happens. She was speaking as if it was a road process. Is that true when it comes to what is happening on the ground . David it is getting closer, but there are still existential unions existential issues for the unions. These are battery plants the Companies Plan to build. Have announced at least 2, 3 of them at each company. Gm has four of them coming. That is a lot of workers they will be hiring. Most of those plants are owned by joint ventures with an asian battery partner. They are not part of this agreement and that irritates the union. They believe those joint ventures are an end run around the labor contract. Legally they cannot bargain on behalf of workers that are not part of the union. They can get side letters from the companies that set up a framework for how battery workers will be compensated over the next decade, but it is a touchy legal issue, it is a touchy labor issue. Both sides have a strong viewpoint on that and i think that is i think that is one issue that is going to hold things up here. Pensions is another. The union wants to find pensions back. Those are still expensive for the companies if they are going to have a big match or big contributions. So, the size of that is going to be alix a touchy subject as well. Alix we are watching the headlines. Thanks so much, bureau chief joining us if you want to listen to shawn fain speak you can check it out on liv golf. That feed running to you. Also of bringing those headlines. We will also bringing those headlines. This is bloomberg. That first time you take a step back. 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 a partner that puts you first. Godaddy. Explore endless design possibilities. To find your personal style. Endless hardie® siding colors. Textures and styles. Its possible. With james hardie™. Alix stocks are up. Something i did not think i would be saying to you at noon. Yields are still pushing higher. Abigail is tracking the moves for us. Abigail this is quite a chart. I wish i had a more chronic donation four. Flatlining and then up sharply on that jobs report. That, of course, puts evaluation into question. Nerves that may be the fed will have to raise again, and some sort of a recession could come as a result of the consumer slowing down. But now take a look at this. Up. 8 . Earlier it did feel a reversal would be possible. It did not feel like there was conviction for the selling. A brief reprieve positioning into the weekend. The longer chart suggests the selling will return. On the week, though, this is interesting. There is the possibility we could actually see an up week for the s p 500. It would be the first up week in five. The nasdaq clearly higher on the week. I think that is a second up week for the nasdaq. The nasdaq has been doing better than the s p 500. Here are those yields alix has been talking about. The 10 year yield up. A two year yield still above 5 . When will the selling and bonds abate . Selling in bonds abate . If we look at cftc short positioning, this is back in the Global Financial crisis, way long as folks are seeking safety. This is in that 2018 selloff. A lot of this has to do with when jay powell made his first pivot from hiking, and then this bond short came off. Right now we are at a record short. I would make the case it is going to take a while for it to come off. But this is a great chart, a way to figure out when we may see yields back off. I think right now it is not saying anytime that soon. Guy absolutely. We are all now anticipating what is going to happen next week with the cpi number. How could that change things . Abigail, thank you very much, indeed. What a week we have seen. What else are we watching . Amazon is apparently going to launch prototype satellites today on a very big rocket for two relatively small satellites. They are keen to make sure these things go into space. President biden what i say . Space, sorry. Space is important. Alix keep going. Guy she did a whole special on space. I assume you have a ticket . How big is the powerball now . I am fascinated by this. Alix what about . Guy do not pay tax on it . And that number is not real, is it . If you won the money you do not get the 1. 4 billion. Alix the cash value is 643 million or something. But i will take it. I dont buy tickets but my husband has a threshold. When it hits a certain amount he goes all in. He has a system. Abi will see you monday, maybe i wont. [laughter] guy you have to pay tax on it . Alix of course. Guy over here, no tax. The numbers are smaller, but there is no tax. Alix so what is the biggest one it has ever been . Guy you can get over 100 million. That is a euro million. You get those. It does not tend to go much further. I think the billion number associated with the powerball is misleading. Because you have to get that over a number of years, dont you . Alix you can do either. You can do a lump sum or pay every year. I just cant get over no taxes. We love the taxing here. That is crazy. Guy which is ironic, because everybody thinks of you as a lowtax environment. Alix maybe this is me talking my own book. They be if i win the powerball i will not see you monday. Joy mack joins bloomberg. This is bloomberg. From the heart of where innovation, money, power collide in Silicon Valley and beyond, this is bloomberg technology. Caroline i am Caroline Hyde in new york and ed is off today. We are going to talk hiring in at the end out payroll report. 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