Further stockmarket gains could be at risk if geopolitical risks continue. Morgans miss. Wealth Management Revenue misses estimates and net interest comes in light. Im alix steel with my cohost in london, guy johnson. Welcome to bloomberg markets. We are awaiting President Biden speaking in tel aviv after meeting with victims and survivors of the attack from hamas weeks ago. Guy absolutely and we will bring those comments from the president when he speaks. We are anticipating this conference will start fairly shortly. I think the markets are looking for clues as to how the situation evolves. Listening very carefully to the president to try to gauge exactly which lines the u. S. Is going to focus on. Where we think u. S. Policy is going to take us next. In theory, the continuing presence of the president in israel probably means we are not queasy any ground offensive starting anytime soon. But there are key questions that need to be answered. What happens at the southern border . What is happening with the hospital attack or bombing we have seen . We do not know yet. There are so many questions that need answering, but the market does not have answers to move on. Alix you can see that reflected in the asset prices. Guy and i were speaking earlier that we dont understand what is up with the bond market. You are seeing it in the end and you are seeing it in gold but not the bond market. It either speaks to other structural factors or we do not know how this is going to evolve. You are putting different percentages on different probabilities and that makes it very difficult as an investor. Guy yeah, and the treasury market, which would normally function as that area of safety for the market, is not functioning in the way we thought it would. The simple reason for that is there are all kinds of other factors at play. Yields going higher. That is contrary to what you would expect but you think about what is happening with the economy, the strong data we have had, what is happening with the qt program. Maybe investors need to look elsewhere for those comments. Alix speaking of, we are awaiting President Biden in tel aviv. This is after a historic visit to an active war zone after a hospital explosion in gaza. He was supposed to be meeting with other leaders of the arab world that got canceled after what happened at the hospital. We do not know why or who is responsible. He just wrapped up speaking with survivors and families of the victims as well. Guy absolutely. We understand that we have had a twominute warning. Alix this is the second twominute warning. Guy it is but the numbers are starting to add up. Lets see how the markets will perceive. Our question is pretty straightforward what is the safety trade for markets . If the situation does get worse from here, which assets should you be seeking out . Lets try and answer that right now with chief global macro reporter and senior Global Equity market supporter. Liz, this is not the safety trade narrative you would expect. Where else can the market look . Liz i would say that the bond market is making sense with the weight is doing things. Long end rates are higher. I think the safety trade for now the only pure safety trade in the sovereign market is the short end. You see the twoyear yield down slightly and i think you will see more money plow into cash. Bonds are down for the year. We had a bit of a wave of buying treasuries earlier in the week but that went away. I think there is too much risk. Retail sales yesterday were strong which puts higher for longer back on the table. I do not think people feel safe parking their money as a haven trade. Alix fair enough. Jp, what do you think . What is the safety trade evolving in the market right now . Jp it is the short end because you do not want duration on your books right now. You can always rotate into the more defensive sectors but should this evolve into something more drastic and affect shipping routes and the oil price, the whole market will go down. What i would say is volatility is cheap. If you want to hedge directly, long volatility is not a bad option. Guy as we start to think more broadly, we are going to get netflix reporting numbers later on. We have nestle tomorrow. The Technology Sector in the u. S. Has held up. It appears to be a safe haven. It appears to be doing well. Nestle, in theory, should be an area you can park your money as a defensive area. Do we think about the swiss franc . Gold has been on the march, and clearly, oil is taking higher. If we think be on the front end of the money market account, where else could people be looking . Jp you want to go into quality names in the equity market that can sustain through a conflict or a longer economic downturn. The whole market will go down a little bit but it is one of those areas where you can get your losses back rather quickly. You can always add some defense names if you want. It is not a moral question if you want to do that. I think gold is an obvious choice, but people are not too free and how much they can add to their portfolio. I would argue you have alix jp, we appreciate it. We want to take you to tel aviv with remarks from President Biden. Pres. Biden i come to israel with a single message you are not alone. You are not alone. As long as the United States stands, and we will stand forever, we will not let you ever be alone. Most importantly, i know the recent terrorist assault on the people of this nation has left a deep wound. More than 1300 innocent israelis killed, including 31 american citizens by hamas. Hundreds of young people at a Music Festival that was for peace gunned down as they ran for their lives. Scores of innocents, israelis and americans, taken hostage. Children slaughtered, babies slaughtered, families massacred, rape, beheadings, bodies burned alive. Hamas committed atrocities and recall the worst ravages of isis, unleashing pure ev upon the world. Ithere is no rationalizing it. Period. The brutality we saw would have cut deep anywhere in the world but it cuts deeper here in israel. October 7, which was a sacred jewish holiday, became the deadliest day for the jewish people since the holocaust. It has brought to the surface painful memories and scars left by antisemitism and the genocide of the jewish people. The worldwide stands stood by and did nothing. We will not stand by. Not today, not now, not ever. For those waiting in limbo waiting to learn the fate of a loved one, you are not alone. We are working with partners throughout the region, pursuing every avenue to bring home those being held captive by hamas. I cannot speak publicly about the details but for me, as the american president , there is no higher priority than the safe return of these hostages. For those who are grieving a child, a parent, a spouse, a sibling, a friend, i know what it feels like to have a black hole in the mill of your chest. The survivors remorse, the question of faith in your soul, staring at that empty chair. The first sabbath without them. The everyday things, the small things you miss the most. The scent when you open the closet door. The Morning Coffee you shared together. The smile, the perfect laugh, the giggle of your little boy, the baby. For those who have lost loved ones, this is what i know. They will never be truly gone. There is something that is never fully lost your love for them and their love for you. I promise you will be walking along some days and say, what would he or she want me to do . You smile when you pass a place that reminds you of them. That is when you know, when a smile comes to your lips before the twoyear to your eye tear to your eye, that is when you know you will make it. It will give you fortitude to find light in the darkest hours. The terrorists believed they could bring you down, break your resolve. But they never did and they never will. Instead we saw incredible stories of hair was, courage heroism, courage, neighbors forming watch groups, opening their homes to survivors. Retired soldiers running into danger once again. Civilian medics flying across in rescue missions and offduty medics at the Music Festival caring for the wounded before becoming a victim themselves. Volunteers retrieving bodies of the dead so families could bury their loved ones in accordance to jewish tradition. Reservists leaving behind their families, theres honeymoons, their studies abroad. The state of israel was born to be a safe place for the jewish people of the world. If israel did not exist, we would have to invent it. It may not feel that way today but israel must be a safe place for the jewish people. I promise you, we are going to do everything in our power to make sure it will be. 75 years ago, just 11 minutes after its founding, president truman and the United States became the first nation to recognize israel. We have stood by your side ever since and we will stand by your side now. My administration has been in close touch with your leadership from the first moments of this attack. We are going to make sure we have what you need to protect your people and defend your nation. For decades we have insured israels qualitative military edge, and later this week i am going to ask the United States congress for unprecedented support for israels defense. We are going to keep iron dome fully supplied so it can continue standing sentinel over israeli skies, saving lives. We moved military assets into the region, including the Uss Ford Carrier Strike Group in the Eastern Mediterranean, with uss eisenhower on the way to deter further aggression and prevent this conflict from spreading. The world will now that israel is stronger than ever. My message to any state or hostile actor thinking about attacking israel remains the same as it was a week ago dont. Dont. Dont. Since this attack took place we have seen it described as israels 9 11. For a nation the size of israel, it was like 15 9 11s. I am sure those horrors have tapped into some primal feeling like it did in the United States. Shock, pain, rage, an allconsuming rage. I understand, and Many Americans understand, you cannot look at what has happened here to your mothers, fathers, sons, daughters, even babies and not scream out for justice. Justice must be done. But i caution this, while you feel that rage, do not be consumed by it. After 9 11 we were at rage in the United States. We got justice but also made mistakes. I am the first u. S. President to visit israel in a time of war. I made wartime decisions. I know the choices are never clear or easy for leadership. There is always cost. It requires being deliberate. It requires asking hard questions. It requires clarity about the objectives and an honest assessment about whether the path you are on will achieve those objectives. The vast majority of palestinians are not hamas. Hamas does not represent the Palestinian People. Hamas uses innocent families in gaza as human shields, putting their command centers, their weapons, their Communications Towers in residential areas. The Palestinian People are suffering greatly as well. We mourn the loss of innocent palestinian lives. I was outraged and saddened by the outrageous loss of life at the hospital. It appears the result of an errant rocket fired by a terrorist group in gaza. The United States unequivocally stands for the protection of civilian life during conflict and i grieve for the families killed or wounded by this tragedy. The people of gaza need food, water, medicine, shelter. Today i ask the Israeli Cabinet to agree to the delivery of lifesaving humanitarian assistance to the civilians in gaza, based on the understanding there will be inspections and the aid should go to civilians, not hamas. Israel agreed assistance can begin to move from egypt to gaza. Let me be clear. If hamas diverts or steals the assistance, they will have demonstrated once again they have no concern for the welfare of the Palestinian People. It will stop the International Community from providing this a. We are working in cooperation with the countries of egypt and other partners to get trucks moving across the border as soon as possible. I ask israel that the Global Community demand the International Red cross be able to visit hostages. I just demanded the United States fully supports and today i am announcing 100 million for humanitarian assistance in gaza and the west bank. This money will support more than one million displaced palestinians including Emergency Needs and gaza. In gaza. You are a jewish state but you are also a democracy. Like the United States, you do not live by the rules of terrorists. You live by the rule of law. When conflicts flare, you live by the law of wars. What sets us apart from the terrorists as we believe in the fundamental dignity of every human life. Israeli, palestinian, arab, jew, muslim, christian, everyone. You cannot give up what makes you who you are. If you give that up, then the terrorists win and we can never lead them when. Israel is a triumph of faith and resilience over impossible pain and loss. Think about october 7, a jewish holiday. You read about the death of moses. The tragic story of a profound loss to an entire nation. A death that could have left hopelessness in the hearts of an entire nation. But although moses died his memory, his message, his lessons have lived on for generations for the jewish people and many others. Just as the memory of your loved ones will live on as well. After reading the story of moses death, those who observe the holiday began reading the torah. From the beginning the story of creation reminds us of two things. Although we get knocked down, we get back up again and begin a new. When we are faced with tragedy and loss we must go back to the beginning and remember who we are. We are all human beings created in the image of god with dignity, humanity and purpose,. In the darkness, to be the light unto the world is what we are about. You inspire hope and light for so many around the world. That is what the terrorists seek to destroy. That is what they seek to destroy because they live in darkness. But not you. Not israel. Nations of conscience like the United States and israel are not measured solely by the example of power. We are measured by the power of our example. That is why as hard as it is, we must keep pursuing peace. We must keep pursuing a path so that israel and the Palestinian People can both live safety and security and dignity and peace. For me that means a twostate solution. Work with israels integration with neighbors. These attacks have strengthened my will to get that done. I am here to tell you that terrorists will not win. Freedom will win. Let me end where i began. Israel, you are not alone. The United States stands with you. I told the story before and i will tell it again of my first meeting with the israeli Prime Minister 50 years ago as a young senator. I was sitting across from her in her office and she had a guy who later became the Prime Minister sitting next to me. Just before the 1973 yom kippur war. As she flipped the maps up and down telling me how bad things were, all of a sudden, she looked at me and said, would you like a photograph . I looked at her. She got up from her desk and walked out into that hallway with the marble flooring. Walked out into the hallway and walked down. There were a bunch of photographers standing in front of us. Without her looking at me she said to me, knowing i would hear her, why do you look so worried, senator biden . I said, worried . Of course i am worried. She looked at me and she said, dont worry, senator. We israelis have a secret weapon. We have nowhere else to go. Today i say to all of israel, the United States is not going anywhere either. We are going to stand with you. We will walk beside you in those dark days and we will walk beside you in the good days to come, and they will come. As you say in hebrew which i will not attempt to do because i am a terrible linguist i will say it in english. The people of israel live. The people of israel live. Israel will be safe, secure, jewish, and democratic today, tomorrow and forever. May god protect all those who work for peace. May god save those who are still in harms way. Thank you very much. [crosstalk] alix you have been listening to President Biden speaking in tel aviv. Not taking any questions. A clearly deeply affected President Biden stating very clearly that the u. S. Stands with israel and they will not allow they very strongly said do not attack israel in this moment. And then said not be consumed by rage and drawing a parallel to 9 11 and mistakes made because of that rage. In moving toward helping the Palestinian People, that was a very sensitive and tricky line he seemed to be trying to draw. But he did announce that israel has agreed aid can move from egypt to gaza. Guy yep. He is making it clear that he is behind israel. The American People are behind israel. The American Power that exists in the mediterranean is behind israel. They have. But he is trying to make clear that that support is important as well be a they are Standing Shoulder to soldier but he wants israel to act in its own best interest. I think that is a tricky line to walk for President Biden. He is making it clear he wants to see assistance coming across the border, but at the same time, he is going to provide immeasurable support. We do not know how big the package is going to be for israel. It is a very delicate line he is walking right now. Alix he did say that he was going to be working towards a twostate solution. We want to go to oliver crook on the ground. He was in the room for the president s comments moments ago. What is the reaction on the ground right now . Oliver there were a lot of questions shouted at the end because there are many unanswered questions. But the highlights for me was one thing we were expected to hear which is the unflinching support for israel. He gave more detail of what that would look like. He talked about putting a package through congress. Talked about replenishing iron dome. Talked about the two aircraft groups headed to the Eastern Mediterranean as a form of deterrence. And he reiterated the message we have heard from u. S. Officials the entire time on terms of deterrence dont. He said dont three times. And the reference he made to 9 11. He said a lot of decisions were made after 9 11 to bring justice but a lot of mistakes were made. This is biden warning about how israel should go about this and there should be clarity in their objectives, and they need to be able to appraise whether or not the path they are on is achieving those objectives. As you mentioned, another significant portion was the mention of the twostate solution, and better integrating with neighbors. A process that was underway until it was broken asunder last saturday. Guy lets talk about what happens next. Originally, we would have seen the president going to jordan. That is now not happening. How does he manage this situation in israel if he is only able to talk to one side . What progress can be made . What can biden do to deliver on what he wants to see, which is a solution that does not involve significant escalation . That does not involve significant loss of life within gaza. That involves aid and assistance but israel being protected at the same time. How does the president take another step forward . He has taken a step into israel. How does he take another step forward to achieving those goals . Oliver that is the great challenge. That explosion at the hospital last night really changed the nature of this trip and what biden could hope to achieve. You have to ask the question, what can you achieve from the hotel in tel aviv without speaking to the other side of the table . What we got from this press conference that perhaps answers part of that question is the question of aid. There are hundreds of tons of aid sitting on the boarded in egypt trying to cross over. What he said is he spoke to the Israeli Cabinet and asked them to allowed aid in and they said, apparently, theyd create the conditions to do that. But that is something we have heard since yesterday and as of today, that aid is not moving. In terms of what he can do, i think that puts a limit to it. Well there be a dialogue that is reopened in the face of evidence that biden says proves the israelis did not drop that bomb . Which is a very open question and a lot of fingerpointing going on. Alix we appreciate it. Thank you very much for that update. Oliver crook joining us from tel aviv. If you are an investor and you are listening to that speech, what do you do . The markets do not seem to be that concerned. It felt like there was a lot of emphasis put on President Bidens ability to move diplomacy in the middle east. That was thrown away last night. What do you do when you are looking at this instability . Charlie mcelligotts managing director for cross asset strategy. He is the guy that sends out the notes everyday that gives you the jargon about gamma and shorting and skew. That is the underlying workings of a market, particularly in a time like today. How should an investor be looking at stuff right now . Charlie good to be back. Thank you for having me. Look, in a world where trent inflation is over 2. 5 friend inflation is over trend inflation is overdue by i want to own convex instruments. That is something in my sweet spot which is vix. Vix is the square root of variants, meaning it is not linear. This was a trend before the israeli conflict where people are looking for asymmetric payouts into low probability scenarios. This being one of them. The vix spaces where i want to be and we have seen a ton of activity in recent days because it outperforms in this kind of tail scenario we are sitting in, looking at this potential for escalation. Guy in terms of how far through the process we are, we are one week in. We are trying to understand the implications of all of this. How much is being priced in the far . How muchis protection still chet this point . Is it still a value at this point . Is there an opportunity to move into that space . Charlie youve seen pretty rational kneejerk types of trades, the biggest strengths in december crude futures, the december 1 15 call that spotted crude in the 90s. Thats a substantial upside crash hedge. Youve seen a lot of upside trade. The thing about vix is even though its moved off of a low base level, there is still value their from climate client perspective, it might be more expensive now to own an outright call, maybe what i do is look at call spreads, the richness of the money call if i can sell that helps fund the purchase of one closer thats the kind of trade im looking at. The november 20 5, 35 vicks call spread is cheaper and in that case im making a bet that if volatility picks up it will sit somewhere in that sweet spot where i wont get crushed. It would need to be a disaster event to see vicks trade through the strength that i sold. You would really need to see almost a larger economic shock off the back of simply an escalation where they get dragged into this, the gaza invasion begins. We have the conditions because the other point i want to make about vicks, it is hard to hedge from a regulatory capital perspective, its hard for dealers who are short these calls to clients looking to hedge. Its hard to recycle that risk. There is a squeeze out there in these products. Alix there are a couple of probabilities it feels like investors are trying to play out. The proxy war versus a true spread. So if you wind up selling a lot of calls and your point how do you hedge it and things do not happen, then you have to buy back everything which creates that swing in the market that can leave you offside. Charlie the good thing about just spending premium and owning an option and not being short an option is ultimately you can sleep at night. The idea you would sell a higher strike to fund one thats more expensive that youre buying is the danger zone so you have to figure out what you think is the sweet spot. Weve been pushing this since the summer. I would say more with regards to central bank policy, financial conditions tightening. This belief that the higher entitled financial tighter financial conditions go the increased certainty of a harder landing. This is a real potential that says this does where inflation picks back up. It is probably more of a trade where you want to have the right call. Guy how much money could i be making . Im thinking this seems very uncomplicated. I could put money into cash. Right at the front end of the curve. Isnt that the safest place to be if im looking to hedge risk right now. Charlie it is remarkable. It matters on the time horizon youre looking at. The story has been the return of cash as an asset. It allows you to sleep at night without the undulations of a market suffering distress of the Economic Data volatility volatility. In this case you are looking at a tricky spot where earlier just a few months ago when the market was rallying, hitting this goldilocks type economic condition and the fed was indicating they werent comfortable adding more hikes with regards to the terminal rate assumptions. You kind of had the sweet spot where people were not satisfied with just cash but yeartodate options selling strategies, premium income funds have seen 22 billion of Asset Management growth where its like cash plus, that additional yield from selling calls on equities, still capturing the underlying equities rally. You are limiting some ultimate offside but its almost like the new fixed income you can push to double digit types of yields. In this case the other thing i would say you are not shorting crash, 98 of these are on selling calls. You are limiting your upside but its can tripping to this dynamic where outsiders are saying look at all this stuff going on, this is a big part of that. That flow is out there and it is just massive. I dont expect that to stop anytime soon. Especially when the underlying market is seven stocks making up 82 and its crushing volatility as well. Alix a lot of these can be misunderstood when you get these geopolitical headlines. The superlative rises of the highest level since 2007. So game this out for us. Whats the significant thing youre looking at . What are you focused on . Charlie i like to say im trying to reverse engineer car accidents, figure out where the narrative isnt what could go wrong. In this case the point that i made earlier that all of these financial conditions tightening weve seen from the resilient Economic Data, the retail sales beat, plus the fed to factor hiking in their september meeting. That created this high for longer impulse. Real nominal yields higher. Even crude higher. Thats a drag on the economy. Eventually then the next move is going to be this final cycle slowdown. So the clear trade has been short companies that are very interestrate sensitive, leverage balance sheet, heavy debt to equity ratios. And long quality cash generators , a secular growth stuff that everybody loves. The real danger to me is that instead of that assumed move, that instead the data keeps accelerating, maybe spike the football with an Energy Crisis that gets crude oil going again and you get that back into our inflation data that actually sees the market have to add back terminal and thats the issue then that i dont think the market is currently under pricing outside of attend delta that makes me nervous. Ultimately the best Case Scenario for a lot of folks is to see the data slowdown. Thats the point where whether its inflation data, growth data , labor cooling, that you actually can return to that of negative bond stock where bonds do work and you want to lock in and are able to lock in a bunch of great yield in fixed income offset to the equities. You want the data to slow. Thats the sweet spot. It sounds like an economic left tail. Data slowing is the way to get those rates to stop at this point. There are so many structural issues with deficit spending. Alix charlie, so good to talk to you. We truly appreciate your time. 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. Explore endless design possibilities. To find your personal style. Endless hardie® siding colors. Textures and styles. Its possible. With james hardie™. Alix you are looking at live pictures of the principal room. Coming up rebecca patterson, joints bloomberg tv at 2 00 p. M. New york time. This is bloomberg. We are about one hour plus into the trading session. Equities getting hit. Tenure moving up and abigail is tracking the moves. Charlie abigail over the entire session futures were looking at a decline but around the time of President Bidens comments initially a leg higher suggesting on the oil numbers data inventories coming in tighter than expected that there could be continued inflationary expectations ahead, the highest level since 2007. Its Pretty Amazing to see this backup of anywhere between 22 to 34 across the curve. The 10 year yield and the fiveyear yield, the 20 year yield here now above the two year yield. This been so drastically inverted becoming less inverted and steepening to some degree. Some say that is a sure sign of recession. The twoyear technically relative to chart technicals it looks like we will continue to go higher. This is the twoyear yield in recent months. This area of congestion suggests they will break higher because of the higher lows. Technically at this point the twoyear yield confirmed at 570 or so so inflationary pressures could continue. We of course have lots of volatility and technical breakdowns, a little bit of a breakdown. Last time i looked the worst since march of this year, they beat on the surface, Investment Banking, of the Asset Management business not so great. Later this week some of the regional reports of just go america and key are down right now. The downdraft, a bit of risk off. Thank you so much abigail joining us now. We heard from President Biden who is in israel meeting with relatives of victims. Pres. Biden we will make sure you have a you need to protect your people and nation. Weve ensured their qualitative military age. Im going to ask ines States Congress for unprecedented support package. Guy joining us alix also former middle east director the National Security council at the white house. Its been a long time since we last talked. You have extensive experience when dealing with policy. There seemed to be a lot of optimism in terms of President Bidens ability to bring solid diplomacy to the middle east right now at least thats what it felt like markets were looking at. What would that look like now in your mind. His number one goal was to show the solidarity and his audience for that is twofold. He speaking to the dismay stick domestic israeli and u. S. Audience but is also sending a message to people to not even think about getting involved in this conflict. He said several times if youre thinking about it, do not. The other part with this trip is to focus on humanitarian aid and that something i should highlight is new from the rounds of violence weve had since 2007 there been five rounds of violence between the two sides. The u. S. Has never been able to press hard for humanitarian aid. The reason they do that is because the u. S. Is not going to change its policy on israels right to defend itself. So they are trying to limit the tragedy by saying you need to get humanitarian aid in, there needs to be a humanitarian corridor open with egypt. Guy what do you see as the next big evolution in this situation . Theres been a kind of expectation we will see hezbollah being drawn in. Potentially iran. Do you think those outcomes are still likely at this stage . The markets try to handicap palpitations of what we will get. What do you think of the certainties we can work with right now. Are there any . You will definitely have clashes and violence that will spill over. I dont expect it to turn into some kind of massive regional war. It would end up roping into many actors and its not in the interest of a lot of these folks whether its on the side of israel, the United States or iran, hezbollah and so on. The fact the Israeli Military and resources are focused on gaza. For them that is an opportunity. Since the end of the 2006 war between israel and hezbollah. I dont expect that to happen right now because of President Biden statement because there are two aircraft Carrier Strike groups that are literally sitting there in the event that israel is attacked further. That said while i dont expect that all out war these protests you are seeing right now are very concerning because they will likely turn violent and the militaries of those countries will respond to that violence. It destabilizes everything and makes it difficult for anybody to leave. The first thing that happens or airports shut down and that can be a difficult situation. Alix im wondering with your experience in the middle east where is qatar, the uae and where are saudis right now. If we want to talk about humanitarian aid, some kind of stability, we need those arab countries to come to the table to talk, to do something. Where are they now . Hagar on one hand you have a couple of countries like the uae and bahrain who have deals with israel. They benefit enormously from those deals because of Security Cooperation because of a massive boon in trade and technology investment. They are going to be measured in their response they can still voice themselves against how israel is responding, the strikes in gaza, they can still voice themselves against that but i dont expect normalization deals to be affected. I dont expect this violence to unravel those talks. Theyll be postponed for the same benefits uae and bahrain received. Qatar has hamas leaders we used to complain nonstop for allowing hamas to move funds inside qatar. There were some improvements but it wasnt completely the case. Qatar will try to position itself whether for hostages or an eventual ceasefire. Thats the unique position in qatar. Guy appreciate the analysis here. Well turn back to a tapping on wall street. This after the Bank Reported a profit drop in the third quarter. We will dig into the details on the surface here. Sonali basak will be with us. This is bloomberg. An everchanging landscape comes with challenges. From our vantage point, we see opportunities. As a topten real estate manager, we harness the power of a 360 perspective, delivering local insights and global expertise across public and private equity and debt. Our experienced team and vast network uncover compelling opportunities giving our clients an exclusive advantage. Principal Asset Management. Actively invested. We are seeing increasing evidence of m a. While we expect this to continue , the Fourth Quarter has seasonal continuation we think most of the activity will materialize in 2024. The minute you see the fed indicate they have stopped raising rates, the mende and underwriting calendar will explode. Alix that was james Morgan Gorman speaking on the Morgan Stanley sales call. That Wealth Management came into question. Sonali basak sick the 8 loss is unusual. Sonali it is unusual for Morgan Stanley to miss, given where cash is yielding, when do they start getting back into markets . That will be the difference not just for Morgan Stanley but the big wealth and asset managers. You are seeing this across different versions. I want to pull up the screen and talk about how much asset and wealth business is important. Morgan stanley, j. P. Morgan and goldman sachs. You have had deal deals made. The asset and wealth manager is up in the last quarter. You are seeing these gains plateau a little bit. Goldman sachs had those breakdowns tied to commercial realty and other assets. If you strip down those assets market to market, once you see that starting to wane you wonder where you start to make money from and if youre waiting for Investment Banking to come back you have analysts asking if youre waiting to see green shoots, its like they havent been watered yet. A lot of questions about where the juice is squeezed from particularly in a stock like Morgan Stanley where they been trading earlier than all the other banks except for j. P. Morgan. Guy is there any validity validity to the market that hes taken his eye off the ball and is worried about who is taking his role next. Sonali they have the troops still working there but james gorman would like to get the new ceo named so they can start this transition plan. We knew this would be quite a while throughout the rest of this year though it has surprised a number of investors across the street this hasnt happened yet leading to questions about who the next person would be and what part of the business they come from and whether troops are distracted while they try to figure out who will be leading the business next and where favors are too warm to interims of who might be the next leader of the bank. Guy big transition weve been waiting for for a long time. Could have an unnerving effect in parts of the business. Great stuff. Morgan stanley under pressure today. Lets talk about how markets are moving in new york. Volume is strong today. An interesting single. Signal. Both sectors and negative territory. Other Asset Classes look at whats happening with the swiss franc, one of the safe havens people are looking at. Swiss assets talked about in the next hour. As well as the u. K. Fiveyear. Data earlier on out of the u. K. Suggesting inflation is not coming down as fast as we anticipated. Is the bank of england, is the fed, the ecb really done. 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. Nice footwork. Man, youre lucky, watching live sports never used to be this easy. Now you can stream all your games like its nothing. Yes [ cheers ] yeah woho running up and down that field looks tough. Its a pitch. Get way more into what youre into when you stream on the xfinity 10g network. Guy wednesday, the 18th of october per european stocks take a definite step lower. This is partly topdown, partly related to whats happening in the middle east and elsewhere. Part of it is bottom up as well. A series of earnings we are digesting in europe which is also adding significantly to the downside. Take a look at whats happening under significant pressure. Combination of the two produces this map behind you. Ftse is down by more than 1 . The countdown to the close starts right now. The countdown is on in europe. This is bloomberg