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