Going to know where we are tuesday night. Lets call it less than likely. Maybe somebody can disagree with me on that. We will go into wednesday and may go into november to get to a successful outcome. Jonathan that is the risk of this market, and it has been for the last couple of months. The other issue this market is grappling with at the moment is the breakdown of traditional correlations. Last week was brutal for the equity work it the equity market. Youve got no comfort for the bond market. Tom bonds really dont move today. It is a higher yield into the weekend. A less than correlated market. I would note the absolute stasis in strong dollar. Dxy, that blended Company Index against the dollar, 94. 03. That is a strong dollar. Jonathan weve got to talk about the weaker euro over last week as well. The Economic Data in europe set. To get worst. We have manufacturing set to get worse. We have manufacturing pmis in europe tomorrow. Lockdowns in france, lockdowns in germany, and the u.
Day for the Federal Reserve system. It is a meeting of mystery. Our Michael Mckee will be there for the press conference, special coverage this afternoon. But right now, a great conversation on some of the challenges that we are going to see. Jon ferro, to me, the major challenge, with futures up 17, you mentioned this earlier, this morning, is the two americans that are out there, that two americans that are out there right now, jon ferro, are nothing like what john edwards ever thought he would see. Jonathan just compare and contrast, tom, take the airlines on one hand you can take any sector, the retail sector, and compare it to fintech right now. Big tech on fire. Other companies, tom, literally slashing in tens of thousands, and a central bank that has to set policy for both economies. That is a tremendously difficult position to be in as a central bank right now, and that will create distortion. Some would argue that is already happening. Tom Lisa Abramowicz, within your reading,
Bit of the rising yield. 65 basis points on the 10year. Throughout the day, i think my theme has been trained to gauge investor sentiment. Maintains, stocks can these high levels. If you go up to 1 or one and a quarter, he has to massively rethink his price target. Then you get to the relative trade. Of course, earnings yield lower than the 10 year treasury at the moment. But if it starts to climb a little bit, how does that affect the relative value . Caroline we have had that sort of worry. Mike wilkins at Morgan Stanley also saying, we are worried about rates going higher and what that would mean for stocks. Whiting is still with us. This week, we get a little bit of messaging out of the fed. Are you expecting to hear anything out of powell or any of the other members that would give you a better assessment of where Monetary Policy might go . Steven it is possible. Chairman powell has been relatively quiet about healthy Federal Reserve might adjust its framework for achieving its in
Report, and the jobs data tomorrow. Without a doubt, to of the greatest mysteries we have seen since february. We cant emphasize enough the imports of this claims data. Jonathan we really hope we see an improvement after things went the other way last week. Later tomorrow, we get the payrolls report. Unpredictable. That is the word you would here again and again. Tom lisa, i am going to go back to your bond work for years. Theres a point always where you switch from yield dynamics and analysis to a price study, and it really is beginning to feel to me right now that all the media and the experts in the pundits are beginning to look at price, not yield of bonds. Lisa i think you underscored one of the most important questions in the bond market this week when you asked, is it the real economy driving yields solo or is it the Federal Reserve . I think that is a key question Going Forward as we see the recovery stall out. Can yields go lower not because of the fed promising to buy bonds,
Getting out to 2021 and even trying to have our central bank centralbank measure 2022. Jonathan looking forward to that conversation in a couple of hours right here on bloomberg surveillance. Weve also got to talk about the projections. We have not had projections from the Federal Reserve since the summer of last year, and they were looking for 3. 5 unemployment in 2020, and gdp growth in and around 2 . Nobody saw the revisions that would have to be made just half a year later. Absolutely extraordinary. You see it within the economic at a have been talking about. As Olivier Blanchard mentioned in our show open, the challenge forward is on policy. I know you were long amazon and apple yesterday, driving forward the nasdaq. Was. Han i wish i not just yesterday, but through the year as well. Tremendous performance in this equity market. Who would have thought we would have the revisions we are about to get later, and this equity market would be higher versus where it was in december . Spe