Jonathan ferro and lisa abramovitz. Tom i saw him on a cruise, what a great turnout on the cruise. Catherine greifeld joins us this morning. She is here and she will explain white piquant is popping by bitcoin is popping she will explain why bitcoin is popping. Yields are up. Things are little better but i walk in and i look at the bloomberg terminal, 8. 04 on the bankrate 30 year mortgage and we are subtly solidly in a percent 8 . Lisa we have seen this incredible fluctuation, 20 basis points in a couple days in the long end of the yield curve and people say volatility cannot continue or can it. They are forgetting the levels. It causes a different reality for people financing the nuts and bolts of their businesses and their lives. Tom Economic Analysis with bramo. The media wants to go, they going to die. Microsoft was like a charm. If this is exactly what we were to see, microsoft is on target. Lisa the fact that you had two but he lives comprising 10 of the entire s p index coming out and you had microsoft blown out of the water, google disappointing on the same metrics which is cloud computing. Microsoft winning and google losing and it shows the dispersion we havent seen before and everything was in line and suddenly you can have one winner and one loser and it balances itself out in the Overall Index and you have a consolidation of market shares in specific sectors. Tom we have to get it out of the way, her agent said we had to. What happened . Katie there is a lot of optimism and maybe we are finally going to get the u. S. But an bitcoin etf seems to be the primary driver between what we have seen over the past two weeks. I will note from a traditional etf industry standpoint, we are potentially far away. Tom i have to stop the short because this is about global wall street, they want to sell bitcoin. Why cannot they . Katie you can offer in private funds. To get in etf which you can go to your brokerage account and buy it with one click, that hasnt been available but the question for bitcoin, who will buy it . Tom bramo wants the way in wants to wait in weigh in. Lisa do you like being paid as the bitcoin respondent do like being pegged as the bitcoin correspondant . Katie the narrative changes all the time. Tom i will keep that updated check short. I will keep the data check short. I want to emphasize yields the 30 year bond under 5 . Brent crude, i have so many properties. 85 a barrel on brent crude. Lisa think of canada rate concision makeup bank of canada rate decision. The two year yield is fighting out and the expectation is they will hold and the new cause that we will get across the complex. 1 00 p. M. The auction will be more exciting. You are falling asleep and this is anything but sleep worthy, yesterday there was a two year yield bond option. Normally, no one cares about that but everyone was paying attention because are we going to get the same reaction as we have gotten in the 10 year. You are thinking to yourself, keep selling it but i will keep selling it because it matters. Considering with their earnings picture, metaand rv of sherrys meta and ibm shares coming out. Metaup 160 year to date. Tom ibm off the ghoul cloud disappointment baby has value to perus and a look at Bloomberg Technology for coverage on that and we will look to the eastern mediterranean. We start strong with the senior global macro strategist at state street. I guess i have to rebalance, reallocate. As the rebalanced is the rebalance formula changed is the rebalanced formula change because of the guilt month yield month . If you are a bond bull, it is encouraging because they are engaged in the asset class but do they settle below the 40 when they get there . Tom he looks like jim bourque jim jordan accept it was 10 below zero. That is all fine and well but to me, the securities analysis is out the window, it is about survival, how do you survive in an allocated portfolio . Marvin you are reevaluating the region in terms of the story and you have to remember the duration is much more than your fixed income holders, the u. S. Equity market is the recent heavy so you have to be really cautious of where those long yields are affecting your portfolio. Keeping powder dry is not a crime now. Given the shape of the curve and given that the fed will be higher for longer, then people think. Keep the powder dry because things will be rough coming next year. Lisa what is that mean, powder dry . Do you put it into tbills . Marvin i love bills, two years feel good to me. If you want to extract two extend from your bill structure and a your portfolio, you can add that duration. You can nibble on the 10 year. Lisa does that mean you are concerned about risk equity valuations and other parts of the market that may havent fully comprehended the level and ignored it because of the volatility that has gotten more significant than what we are seeing in equity volatility . Marvin if we look since the middle east conflict, rates have moved and everyone else has been frozen. The dollar has moved and affects has moved and equities are trading at a wider range. I say to people, the most important number is the 10year yield which is unanchored. Katie i want to talk while staying in the fixed income market, the most important question is why our rates rising and i am looking through your notes and you write that you would push back against the buyer strike thesis, why is that . Marvin the Institutional Investor is still buying and they are trying to get back to their benchmarks. We are able to look at crossborder flows at the institutional level and they are still buying so they are buying it on hedge and there are stories around the dollar that you can infer. Mlf data around japanese buyers, they are engaged and china is looking at takes data and they are not buying as much but they are buying based on what their reserves let them buy so we are not seeing the buyer strike that seems to be one of the themes out there. All of the issuance is an overhang. It is like these options become more important particularly when we go to november and how the buyers are engaged but there is a lot of paper and the knife is the big and falling. Katie maybe there is not a buyer strike that there is a lot of supply. Do you look forward to next week . We have the refunding announcement in addition to the actual fed decision. For the direction of this market, which do you think is more important . Marvin i think the supply is more important. The fed message is pretty wellcrafted. It shows they dont have a handle on how this is going to it evolve and thats part of the volatility but given that they have full back turned less hawkish with the volatility in the market, they are not looking to introduce much more. I think they are ultimately done and the question winds up being how much longer we stay at what they believe is restrictive levels. Lisa it sounds pretty rough and concerning. Azure hosted a 29 sales gain in their Cloud Service business. You take a look at the doom and gloom and they are rinsing money. Why are they not behavings the havens . Marvin they still are and we like the big moats that are defendable and if you look at the return, you have cash and you have companies that can generate cash and return it but they decide it is an advantage. Tom in discernings season in this earnings season, we are proving it again. Marvin i think active managers will have their day in the sun. Tom i will quote you on that. Robert option arm Robert Armstrong was brilliant you save this is the time for active managers directly . Marvin it matters in bs duration discussions we are talking about rather than going into it based on what google already capitalization is allowing you to do is important in my mind. Tom marvin loh, thank you so much. Better the editor in chief cbe emails from london and says keep your powder dry. Oliver cromwell, your powder dry. Keep your powder dry. The editor in chief said i had to do that. When british history comes into what we are talking about. Oliver cromwell. Lisa all i can say you are nailing the keeping the powder dry. Tom triple leverage on cash is doing fine but this is important and this go to the technical construction on the market and we have to pullback price up and you will down. On a technical basis, there is zero veracity to it. We need a lot of constructive work to begin to demonstrate lower yields. Lisa it is basically pingpong. You are not sure where it will bounce. That is where we are which goes to martins point, we are getting unanchored in terms of where that yield is. Whether it is fundamental or if it is something about refinancing, tom with the ecb coming up, is the ecb unanchored . Marvin no, it is because their transition mechanism is clear. We are seeing higher yields making their way to the economy and right now, and chair powell said last week, based on the evidence, we may not be restrictive and even though they have been getting restrictive for the last 36 months. Tom thank you so much and this goes back to this stunning event of the last six days which is 5 gdp. Lisa the acceleration, the fastest growth in two years. How does that complicate everything . Tom that narratives and eight to 6 00 hour shows the confusion out there. We will try to get clarity and coming up in the 7 00 hour, she is from boston as well. Katy kaminski joins us. What is it about boston . Mentioned the red mentioned the red mention the red we do not want this board wiped, but iran or its proxies attack u. S. Personnel anywhere, make no mistake, we will defend our people and our security swiftly and decisively. Tom our tireless secretary of state, Antony Blinken, speaking on maybe the triangulation of israel, the north and the east and the south gaza strip and iran supporting different groups and we welcome all of you to bloomberg surveillance and in the first section, we focused on the bond market but we have to admit the story not only will not go away but increases over the last number of days. Lisa how many different prime ministers and president s have tried to tempt out any potential liberation and israel but what i have come to terms with, there are different sides screaming at each other and normally these conversations are under wraps and the energy and emotion and pain is probable. Operable palpable. Tom we need a brief on where we are and where we are heading to with israel and hamas. Leslie vinjamuri is i look at this and i have eight ways to go. What is your belief that iran will be drawn into this conflict more directly . Dr. Vinjamuri i dont think that iran has any interest. There are a number of actors we are concerned about and iran is at the top of the list but very few of them have any real interest in getting drawn into the conflict and you could say iran is benefiting right now and seeing israel suffering extreme setbacks and the u. S. Being drawn in. Regional support and Global Support for the palestinians. And a surprisingly high level for support even for hamas. Iran is in a good place and the u. S. Is doing everything it can to deter getting more engaged. Tom i was looking at the collapse of the Ottoman Empire and 81915 and 1916 and there is Winston Churchill very young before his glory of world war ii. There is Winston Churchill coming up with the conceit, while people are coming in in 1948, better quality people than the people that are there, find. Churchill is saying that is ok. From that kind of goofy support years ago, is the support for israel within the western community, the Chatham House community. Is it drifting away . Dr. Vinjamuri you put a lot on the table and first of all, Chatham House doesnt have a singular view on this and there is a lot of contest about how the u. S. And the west and europe should engage with the broader question of israel and palestine in the u. S. Support for israel is steadfast. There is a growing and enduring support for a two state solution but the second thing you put on the table is the question of history and i want to bring our attention to Jake Sullivans magnificent audit article published yesterday. He said states have many things but it is not about history or power. It is about the choices you make and how you deploy them and what we see, people are lurching back into historical grievances when one needs to be done right now is to deal with the context as it is in this particular moment. With sensitivity towards the grievances but with a recognition that israel has a right to defend itself, there is a severe humanitarian crisis within gaza. There is an effort to get humanitarianism in, and the diplomacy that is at work is a shortterm effort to avoid more people getting killed, civilians getting killed and states, you mention iran getting involved. Part of that is not igniting these deep and historical grievances that make it very difficult to bring Different Actors to the table that will need to be at the table and to prevent people being so entrenched that they only hear half of what anyone says. We heard what happened to the secretarygeneral, people read the part of the statement they wish to read and ignore the part two that speaks to both sides and it makes it hard for different for diplomats to get this crisis to a landing pattern. Lisa how much has the u. S. Lost their leadership role and doesnt have the cap capability to vote to what joe biden is talking about . Dr. Vinjamuri we will see whether that aid package, the demand that joe biden has put forth, that would see aid for israel and ukraine supported. The rest of the world looks at what is going on in the house and cannot believe that this is the u. S. Of america. They also recognize that america has a problem at home but it has some very serious leadership across all parts of the country, not only in government but in the private sector and america is the only country that has recovered and exceeded its repandemic levels of growth prepandemic levels of growth so there is a recognition that there is a resilience in the u. S. Not reflected in the house and this is something everyone will be watching as we get closer, now only to the current debacle but especially to the november 2024 elections. Katie this is a fluid situation but one of the many headlines that, you white, the s p cutting israels the s p that caught my eye, the s p cutting israels Rating Outlook to negative. Also the idea that it will remain centered in a gaza in gaza, how big of a risk as the spiller spillover here . Dr. Vinjamuri this is where active diplomacy is really the name of the game, we can make predictions 36 months and the more significant russian is under question is under what conditions is if this will run longer than six months and if iran gets involved and if that makes it much harder for other regional actors in the gulf to play a positive role in working with the u. S. To bring some sort of peaceful resolution. Tom i was on a cruise with jon ferro doing a speech and on the way back, that is what i read, the article shorten or. Dr. Vinjamuri, thank you so much. I had not read the Jake Sullivan and i will put both of them out. These are log in free from Foreign Affairs because of the moment. They are definitive of the three levels of palestinian history, authority over to terror groups like hamas and it frames out cleare then the motion we are gettingr from the daytoday moves. Lisa everyone is focused on grievances and the history which is painful and it is a competition of pain. Theres plenty of go to rome, how do you come up with a solution where people are not ready to come together . It is a fraught situation. All the leaders coming together, not clear they are having a better time trying to resolve it. Tom we always go into wars and conflict and this one was short. This will be done by christmas. This will be done by the start of baseball season. Katie going off the blueprint of russia and ukraine, that war has lasted a lot longer than most people had predicted and certainly russia. It will be interesting and important to see whether this falls the timeframe. Tom futures red and green on the screen. We will speak of the miracle known as microsoft, coming up, Carsten Brzeski of ing on the european recession. This is bloomberg surveillance. Endless hardie® siding colors. Textures and styles. Its possible. With james hardie™. Get help reaching your goals with j. P. 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Kevins now part of this next generation of young people who feel they can thrive. Tom good morning from new york. An eventful day here and a ecb meeting tomorrow. What it means for chairman powell and the u. S. As well. 10year 4. 8 6 . We are up for basis points. Running green on the equity screen. The vix has come and mice under 20. I guess we will call it 88 a barrel as well. Lets to it. Under surveillance. Lisa republicans still do not have a speaker. Their latest choice for a speaker, the fourth in three weeks. Johnson is a vocal ally of formal President Trump saying he is very confident he will be elected. Republicans hold a vote at noon eastern. I have got to be honest, at a certain point, when do you start seeing, we cant keep doing this, the fourth speaker in three weeks. Can he get enough support if he is somebody who work so closely with donald trump and someone who has alienated a lot of people in congress. Tom a lot of sharp words being said. Our guest will go there. Greg will give us perspective here on to be cordial something original on many people will say damaging on our relationship to our allies. Lisa this issue of the credibility of the u. S. To keep low rates. How much does this have a market move, how much is that underpinnings some of the volatility . This is an importa