To the end of the hiking cycle and if he should buy bonds. Some decline in that, i suspect data showing optimism and rising they will still have that as a in credit ability. Challenge in trying to hire and we will get the analysis of also maintain their current holly wade. From new york, im alex steel workforce. That is where compensation increases come into play which is still really elevated for the Small Business sector and trying alix deal along with guy to retain and recruit qualified applicants. Johnson. Guy we have looked at the data guy the fed is all singing from before and there has been a sense of frustration among Small Business owners that they are not able to deliver on the demand they are seeing. The same sheet. Is that demand still there . This is fascinating. If you look at what is going on the market is looking at this in the economy it doesnt feel recessionary. And saying this is a reason to buy treasuries, yet i thought and what the demand picture looks like, what is it and is this as gloomy as the other over the last few weeks reason aspects of this survey . Yields were going higher is we were pricing in high yields. Holly that is one of the most frustrating part of Business Operations when you cant take that seems to be completely availability of Sales Opportunities out there because ignored. This feels more at risk off. You dont have the workforce to that is where people are accommodate for those sales. Pointing us. It has the weird effect. That is still a reality for many Small Business owners in trying alix it may them loosen to take advantage of those opportunities and having to financial and it does leave me adjust Business Operations or scale back which is certainly scratching my head a bit. Guy many reasons to scratch one of the bigger frustrations that many Small Business owners ones head. Are facing. As you said, the economy is a lot more supply coming through. It has been a factor. Still moving along quite well and Small Business owners are everyone has been waiting to see trying to take advantage of what impact that has. There are a number of things those opportunities and are having a difficult time doing that dont quite add up. It. Alix the broader conversation but clearly all of the fed is maybe the fed is done because speakers are now on message and they have been able to see the rise in yields. Seeing from the same him sheets and saying the same thing. If the fed isnt done or stays at these levels, what do you this is what we have been think Small Businesses feel like hearing. In the next six months . We have been making quite substantial progress on getting elite i think a lot of them are the inflation rate back down to where we want it. Frustrated with the higher cost of financing if they have an policy is restrictive in opportunity to reinvest in their business they are certainly putting down would pressure on going to do it if it makes sense the inflation rate and that is with the higher costs and really what my concern is. The bond market has tightened absorbing the higher costs. Higher financing costs are one of those costs with inventory considerably. That is equivalent to about a and supplies that are still rate hike. Elevated. So then the need to do tightening additionally is not one of the many components of Cost Increases they are having there. Hire term Interest Rates for to deal with and on top of increased Health Insurance costs the same setting of the fed funds rate. And things like that. It is a challenge for Small Business owners, increase in if term premiums rise they could do some of the work of improving financing costs will exacerbate that challenge for them. The economy for us. Guy the question of the day, if if there are opportunities, they are not going to miss those and they will figure out away. The fed is done, do you buy bonds . Small Business Owners are very resilient figuring out in some ways that is intuitive. Operations in these difficult times. Guy great to catch up. But if you take a look at the evidence, volume after volume thanks for the analysis. That speaks against that idea. Coming up, u. S. Security systems if the fed is done, do bonds on the way to israel. Catch a bid . This as President Biden prepares to address the conflict later today. Ira they definitely have in the we will deal with the details after the break. This is bloomberg. Past. One of the big worries is if we price out any chance of a cut in 2024 then you will wind up having the term structure have to be flatter. We wrote today that we think the term structure will remain inverted to flat for the next three to six months, in large part because we think the fed will be on hold. Does that mean duration does badly . Not necessarily. The bond is not rallying. It is selling off. Bond futures and 10 year note futures suggests we should of 18 basis points. Really this was a fight to quality bid. It started yesterday and out the cash market is open and is just catching up. Alix the question becomes, why are fed officials coming on and assaying they are done and saying they are done. Michael they are hinting that they are done and they cant say it because the mark would react significantly. They say real rates have gone up a lot and that is adding to the pressure on the u. S. Credit markets so they may not have to do more. Part of this is based on the fact that we have the good jobs report without wage pressures rising and the anticipation is the Inflation Numbers are going to come in reasonably well this month. I was going to add to your question of the day, should you buy bonds now . I would say it is a little too early because there is enough data that could whipsaw this around before we get to the fed meeting. It is hard to know whether there is a lot of conviction or if it is just reflecting a flight to safety. That flight could go either direction from here depending on what happens in the middle east. Guy normally treasures get around fed funds rate at the end of the cycle we are not there yet. The fed is talking about this idea that the market is doing the heavy lifting now. Are they comfortable that the market has gone far enough . When they expect the market to get where they are . Do you think they want the market to get where they are . Michael they want the market to get close to where they are. It is hard to say you can push them exactly to where you are because you have inflation and term premiums and other things that will affect what investors are looking at in terms of where they are going. It is the real rate that matters and the real rate has been going up and is now at a point where fed officials think it is restrictive. I dont know if it is doing all the heavy lifting but it is doing some. As long as that is the case fed alix you are looking at live officials think there is a pictures of the principal room. Reason to be cautious and they coming up, dennis ross, former can hang on the sidelines. Ambassador to the u. N. Joints i would urge caution because so Bloomberg Television at 8 30 new much has been changing so fast the seer that the only thing you york time. 3 30 new york time. Can probably predict is volatility. Alix you have been talking about the pancake that will go President Biden set to deliver from flattening to steepening remarks this afternoon on the but will still be a pancake. Israelhamas work as the does that go to what we have conflict enters its fourth day. And reorder joins us from seen the last few days . Ira just want to comment on outside of the white house. Annmarie when the president takes the podium today there are what mike said. Two things you can expect. I think volatility is interesting. One as commanderinchief he will once again offering the unwavering support from the United States to israel. Our derivatives strategist in london put out a piece noting he released a statement that implied volatility has been much higher than realized yesterday and talked about unequivocal support from the volatility, suggesting there is u. S. We know that the u. S. Has a lot of uncertainty going on Drawdown Authority in funding and because you have that they can already use to send uncertainty, you can have these whipsaws as you get various supplies and support and pieces of news and data, fed potentially talks about the need speak and the like that will for congress at some point to have a supplemental. Push the market 10 or 15 basis then the present will points in a single day. President will definitely talk that would be a big surprise to see a lot more volatility. About the american lives lost. Yesterday a statement was put the supply story is a little out that 11 lives were lost in overblown, primarily because we the massacre over the weekend. Have known the supply has been coming since august. We would have presumably priced that could rise as well. They are still trying to account for people eared and the for that. It will not just happen all at once. President also talked about the fact that it is very likely that that being said when we get the american lives are endangered thirtyyear auction, that is a right now and americans were lot of risk people have to take taken hostage by hamas. On and how good or not will the we know President Biden has told his team to work their demand be at that supply. Counterparts in israel but also guy how long would you expect at other institutions like the the yield move that is being fbi. They are working with their counterparts on the ground. Generated by the horrific scenes this is of most importance for this white house and the united we have seen in israel to last . States. Guy to what extent is the you say it was a slightly delayed kneejerk reaction to president going to draw a the events of the weekend. Distinction between what is we have seen worse recently. Happening in israel and ukraine . I am hearing many comments about what have we learned from those recent geopolitical events . The idea those could from a funding point of view be conflated. If moore goes to israel, does ugly when you get the piece of news is when you have the major les go to ukraine or are they part of these moves and flipped joined now . Annmarie these are definitely flight to quality moves. If the tensions wind up ebbing two distinct conflicts. What we could potentially see it somewhat in the next week or two with the funding is that a group you could see a complete unwind of u. S. Lawmakers went to the white house and said potentially of those. They will probably keep a little you will link the two conflicts together in one funding package. Flight to quality bid into that gives cover or potentially treasury market and away from gets more republicans to vote other potential Asset Classes for it because they can that you might see. One of the caveats to that is capitalize the momentum you are seeing from the Republican Party things like will be people by to want to make sure they are sending eight ants israel with tips if it affects oil prices the fractures and divisions within the Republican Party you with some of the headlines about what is going on in iran. See and ease about sending more it feels like a lot of people aid to ukraine. Watching this were not alive back then and i remember 1979 we first need a speaker of the house of representatives to get and what happened in that period a funding bill through period. Of time when you had middle east but you could see a push for the two to be linked. Alix i should point out that shooting up dramatically and that affects oil and confidence and sentiment and the potential hamas has been designated a terrorist organization by the political and military responses u. S. , u. K. , e. U. And other to some of those things. Entities. You can wind up seeing a bigger speaking of what is happening in flight to quality bid if things the house, we will get a vote tomorrow. Escalate. I am wondering what this says to a Defense Budget and what this alix i think we them from covid and the ukraine war is some of does to help move this forward in the house. This shots can be more annmarie the house is at an permanently inflationary. Impasse. Nothing can happen until you how does the fed look at that . Have the speaker here you have an interim speaker and clearly michael the fed thinks at this his only job is to bring a point they like to call the speaker wrote to the floor. You will have republicans meet neutral rate is then to be in a caucus and they met last higher. We are growing faster and seem night as well and tomorrow they to have some productivity will vote what many individuals increases. Want to see a blind vote we hide that is not around the world before the United States but if the scenes to see who can get to we a warm winter which we just 217 for bringing this to the floor, basically to not have a gotta forecast from the european repeat of what we saw earlier Meteorological Group for europe when it took Kevin Mccarthy 15 and parts of the United States, rounds to get the gavel. Then that helps hold down costs what you will potentially see is as well. It is very difficult at the and you also have a gas leak in moment for steve scullys and jim jordan to see steve the baltics that the finnish scullys and jim steve they was an attack. Scilese to see who can get i dont know how you can take a position. Alix that is why we dont trade. The votes. Guy i am curious as to how the guy was talking about the weather and said it was warm and he never talks about it in a starts to play out. Possible way. How does this work in terms of coming up, more insight into the Public Opinion . Question of the day if the how does it come together and fed is done do you by bonds . What the u. S. Government is doing . We are going to ask stephanie clearly the president will take on the commanderinchief in guild. This scenario and i dont want this is bloomberg. To conflate what is happening in israel with domestic policy in the u. S. But they are in some ways linked. How does the relationship work between what happens in israel and domestic politics . What happens in israel and Public Opinion . Annmarie it is almost too early to tell and you need to see where this conflict goes. The concern and risk at the moment is that the conflict will not be isolated in gaza and along the border. The concern is that this could actually metastasize and become much broader. If this becomes your broad and volatile, that can shape and change Public Opinion. I think at this moment it is too early to tell what exactly happens next. I would note that when it comes to ukraine there is a sense of war fatigue within the american population. You see in opinion polls or is explore endless design possibilities. Concern amongst Republican Voters about money sent to ukraine and that is white you to find your personal style. Are seeing divisions in the endless hardie® siding colors. Republican party that is why textures and styles. You are seeing divisions in the its possible. With james hardie™. Republican party. Guy President Biden will be making comments on the israelhamas war. We think that is going to happen roughly at 1 00 p. M. New york time and we will be certain to bring you those comments live. Coming up, a star witness against the ftx founder sam bank been freed expected to be in court today. Wall street meet is next. Wall street beat is next. This is bloomberg. In terms of the bond market verbal move in fields. The upward trend in yields. It is a risk off. Treasuries to behave as the safe haven status as have in the past. Given the fed speak it is the reaction from Financial Markets that finally caused fed to make a pause. The market is doing the feds job for them and maybe they will have to go quite as far. The fed is likely done. From there has been the pivot from the space of two or three days. Is hard to know where we go from here. Alix those are some bloomberg guests talking about the moves we have seen in the treasury market. The question of the day, if the fed is done, do you by bonds. Joining us is stephanie guild. If the fed is done, due by bonds . Stephanie i dont think you do. If you do, you will do it in the short end of the curve. The long end of the curve i dont think it makes sense. We have a decent sized deficit it will issue 850 billion dollars of treasuries in the third quarter. Just finishing a trillion dollars of issuance. The fed is reducing their Balance Sheet bite 95 billion a j. P. Morgan Wealth Management knows its easy to get lost in investment research. Get help with j. P morgan personal advisors. Hey, david ready to get started . Work with advisors who create a plan with you, and help you find the right investments. So great getting to know you, lets take a look at your new investment plan. Ok, great this should have you moving in the right direction. Thanks jen. Month now. I think there are not many get ongoing advice; and manage your investments in the chase mobile app. Alix im know for wall street reasons for the 10 year to come beat. Down at the long end of the curve. Shelley bassett is at the i would say on the treasuries courthouse cinelli bassett depending on your risk level. Guy if i segmented it all and put it back together, it does sonali basek is at the sound awfully like what you are telling me is you still think courthouse. Yields could go higher from what are we going to get . Here. Caroline ellison is the start is that what you are saying . Stephanie i think they could. Witness. I am calling for maybe 5 or five and a half percent just sam bateman breeds lawyers definitely a step up from have sam bank winfreys lawyers had seen this year. Alix what would they that directed her say she was due to Financial Markets . Stephanie i think will go into sam bank been freeds sam a mild recession next year. I think earnings will bring us bankman read was his onagain down to the markets but i dont think we will get about this years highs. I think next year it will see a mild recession because all of the debt that has been taken on offagain girlfriend as far as the ceo of alameda. Around the world in different formats will start to slow down economies but it will take that certain parts of her own personal diaries have shown she 10 year treasury and higher end questioned her ability to lead of the curve before you start to the firm and left the see that happening. Guy lets recap again here you dont like duration. You do like the front end here uncertainty to sam bateman freed youre not convinced about sam bank been freed. Equities at this point, but like to stick with cash . Stephanie i like equities for he has known him since high school and testified. This quarter but getting more cautious for next year. So to critical parts of the for equity market here, what i prosecutions argument are like is growth at the right coming to the floor floor this week in the second part of price. What that means is companies the trial. Guy give me a sense of how that i like to call this generations utility companies, critical the testimony will be. Software Security Companies that give us a sense of how much of a do things for other businesses game changer we will learn over the next few hours could go one and consumers have cash, growth way or the other. Sonali there are not that many but are undervalued at this point. People who knew the extent to i think that is a good place. Guy do those kinds of companies which the siphoning of money between ftx and alameda that had exist . Happened. I see a lot with high but the three people who pled valuations. Stephanie they do. Im not talking about the Biggest Companies but some of guilty know the most for caroline ellison, there are the unique ones that are top players in their nish mark diaries obtained by the new york niche market. Times weeks ago said to have been leaked by sam bateman freed that might be the companies that provide Financial Service himself sam bankman fried. Software services. Those are i think areas that are undervalued with to have good cash flow and that is what i am looking for. Good cash flow that doesnt need there is another piece of a lot of debt. Evidence that may come to the because those who do will have a floor today of recordings of a tough couple of years. Critical meeting between alix small caps are tough and sort of rebounded from the lows a little bit. Caroline ellison and staff at as yields go higher, is the son alameda when the market was up, of the bad news in so much in certain areas . Stephanie maybe in the everything was fine. People made a lot of money and smallcap case. Particularly the the employees. If you look at Balance Sheets on you heard from gary wang who is average they take on more debt saying Se Technology officer at on average. They tended to be more on the ftx, he created code that served industrial and financial space as a backdoor for alameda to be and they as a result are more essentially borrowing hundreds of millions of dollars and an cyclical. If i expect him out recession next year, i am not sure if it unlimited amount of funds from is fully priced in yet. Ftx to alameda. This is the first time you are guy one of the things we have hearing accounts from these people so close to the matter seen over the last few days for appeared when three of your friends have already pled his Oil Prices Going up sharply guilty, this is the defense that and have come down but now with Sam Bankmanfried has had to put israel have gone back up. What you think of energy . Up. Stephanie i have liked it for we are going to hear from other investors, including in the scare mucci anthony scare at least the last six months and i think the stuff politically happening in the middle east is mucci Anthony Starr mucci providing a floor for the oil crisis. I think Energy Companies are scarmucci. Still a good investment and there is a lot of m a activity guy lets talk about where but they have been through quite a rough patch over the last european markets are. Several years. A number of reasons potentially for this. I think they have figured out we are hearing from fed speakers how to manage their Balance Sheets better because of the they may be done. You have chinese stimulus as torture they went through several years ago. Alix what would you definitely well. German yields go higher. Pay attention to what is not invest in . Happening, european gas futures stephanie i would not buy proxy higher. And issue with experts out of egypt and now the concern around stocks, utility companies, consumer staples. If you look at the utility the scandinavian pipeline. We will talk about all of this. Company i dont think you see a lot of growth. The average yield is 3. 8 in the this is bloomberg. Sector. Why do that when you can get 5. 5 percent in the shortterm treasury market. One thing i am also worried about is you have inflation because sophia chen as chains have and supply chains. I think you have an environment where wage growth stays where it is but the benefit they got from goods inflation is going away and i think there will be some profit margin pressure. Alix great stuff. Please come back. Thank you so much. The israel and hamas war is putting social media under the microscope as researchers say x has proven an unreliable source for news. This is bloomberg. Its easy to get lost in investment research. Introducing j. P. Morgan personal advisors. Hey david. Connect with an advisor to create your personalized plan. Lets find the right investments for your goals okay, great. J. P. Morgan Wealth Management. S. Avalarahhh ahhh hi, im jason and ive lost 202 pounds on golo. So the first time i ever seen a golo advertisement, avalarahhh i said, yeah, whatever. Theres no way this works like this. And threw it to the side. A couple weeks later, i seen it again after getting not so pleasant news from my physician. Alix we want to get to the top i was 424 pounds, and my doctor was recommending weight loss surgery. To avoid the surgery, i had to make a change. So i decided to go with golo and its changed my life. When i first started golo and taking release, my cravings, they went away. And i was so surprised. You feel that your body is working and functioning the way it should be and you feel energized. Golo has improved my life in so many ways. Im able to stand and actually make dinner. Im able to clean my house. Im able to do just simple tasks that a lot of people call simple, but when youre extremely heavy theyre not so simple. Golo is real and when you take release and follow the plan, it works. Guy stocks parked, every sector largely higher today. We talk with chinese stimulus. Tech stories from the bay area you all beasley have what is and beyond. Joining us now is ed ludlow. Happening in the bond market. Seeing a little bit of an uplift. It is a perfect day to look at x is this a sustained move . We will discuss that in just a moment. Formerly known as twitcher as the countdown to the closed starts now. The countdown is on in the immediate world and the regular world digest what is europe. This is Bloomberg Markets happening in israel. European close with guy johnson ed a number of stories cite and alix steel. Research that looked at the content on the platform over the last 48 hours or so and the main problem is the sharing of video content that purports to be one thing but is in fact completely another. There are lots of videos circulating on acts x that say they are from the war but they are from videogames. Also an example there is video on x doing rounds that claims to be hamas going door to door in an unspecified location and when you look into the origins of the video it turns out that what is shown in the video is not hamas, Israeli Police and military forces. This is a concern because elon musk and x have position in place themselves as the place for news. Guy when there has been pushed back to management, what kind of risk and we have for what we are seeing . Ed twitcher used to and the main point is making twitter used to and the main point x is making is that the reformed and renamed company has to deal with. This is no longer twitcher and this is a new Management Team. I am told this Management Team is fully focused on this. She was due to speak at a wall street journal event and has pulled out and the company said she pulled out to deal with their handling of the situation. The problem is that elon musk and the x platform continues to engage themselves and share content, some of which is shown to be inaccurate or false. Alix before the show mike said he now follows guy on threads and there are so many things wrong with that sentence, but is this the win for threads in reality . Ed i wouldnt go as far to say a win for threads. As we pointed out, this issue of video and other media on x is also happening on tiktok and instagram as reels and on threads as well. There is evidence the video in question has originated from acts and shared on the other profiles so you have these super users amplifying the fake content. It is not unique to ask and it is happening on other platforms unique to x and it is happening on other platforms. Guy thank you for the update. This is bloomberg. Alix we are about an hour into the u. S. Trading session. Upside for stocks. Volume not so terrible. Abigail speaking of the nasdaq 100, over the last nine days we have the nasdaq 100 climbing each of those days. Over that time period, not huge again, up 3. 9 but could signal a trend or big tech. The nasdaq 100 come up. 7 . The s p 500 up for a third day in a row, the longest winning streak going back to the end of august. There been strings of long winning streaks for the nasdaq 100. Goldman sachs nonprofitable tech, up 4. 7 , a little bit of maybe a for trash as some folks say. That maybe investors want in on a nearterm rally. Russell 2000 at 1. 4 . What is the impetus for all this . I have to argue it is yields. Looking at 10 year yields, last week at one point we had been up to 488. A very high level, the highest since 2008 and some volatility. The haven bid on the israel hamas conflict, back to levels it have had been. What does it mean for the s p 500 . This is a new term. The s p 500 hitting the oneyear uptrend perfectly about the 200 day moving average. I suspect this is going to be a nearterm rally. I do think we will see his continue to go higher and we have earnings season starting. Alix thank you very much. The u. S. Small Business Optimism index dropped to a fourmonth low in september with more owners expecting Business Conditions to get worse. This index is way below the 40 year average. Last time it was at or above this level was december 2021. Small Business Owners saying it is getting much more complicated to get credit but the top two problems are inflation and the labor market. When it comes to inflation, 30 of Small Business owners expect or plan to increase prices and they see the demand is still too strong to trigger any price reductions. And the labor market and increases in wages are one of the biggest components when it comes to price decisions. Lets look at the top sectors where Small Business owners are having difficulties when it comes to finding the right people. The top sectors are construction, retail, manufacturing and services. Overall half of Small Business owners have problems when it comes to filling the job slots in it means they have to increase prices and people are still putting jobs and looking for other opportunities where they can get higher salaries. Guy thank you very much indeed. Lets get more analysis on how we should meet reading the data here we are joined by holly wade. Three to see you. Thank you for joining us as we work our way through this data. It feels gloomy and like things are getting tougher. Is that the correct interpretation . Holly Small Businesses are not optimistic. More are thinking that the Business Conditions will worsen in the next six months and that is not a good position for Small Business owners to operate. The environment is looking challenging to say the least, whether it is a few things Credit Conditions are worsening or they expect them to worsen but still inflation and the tight labor market are the two Biggest Challenges facing them right now. Alix so what only hope was passing on price increases. Do they still feel confident they can do that . Holly it has moderated quite a bit even though 23 say inflation is the biggest problem in operating their business but it is a different picture from what we saw last year and far more were saying they were planning or they did increase prices. With that moderation we have seen a slowing in their ability to increase prices or whether the pressure is not quite as extreme as it once was. It is still a problem for them to navigate these headwinds they are facing on that front. Guy to what extent is this about the cost of capital as well . Is it about the cost of capital . What is happening on the credit front and the availability to get credit they need at a reasonable price . Holly they are certainly paying more for financing. We have seen that the numbers of those who say they are regular borrowers has remained stable over the course of the last few years. We havent seen Much Movement there which is a good sign that if they are interested in borrowing they seem to be able to do it. Very few are saying they havent been ill to access the financing they are looking for but certainly the cost of financing has escalated quite a bit for