Jonathan lets get your morning started. Live from new york city this morning, good morning, good morning. This is bloomberg surveillance. The s p 500, bouncing back from a strange day of losses, positive by zero point 6 . We said this yesterday after chairman powell spoke, the presser ended almost as soon as it started. The top line headline, restrictive with nothing else seemed to matter. Lisa taking off the prospect of rate hikes took away the tail risk of them becoming even more restrictive and repeating that they are on the right path. That was the entirety of what was accomplished. It seems like this puts it back to where it was before. It is in the hands of earnings and it raises the question of on the long end, how much will this reaccelerate . Jonathan the fed will cut as soon as the data allows. Bank of america, hes in a wait and see mode. Deutsche bank, hard to say it was a dovish meeting, but given the recent inflation print, it could have been more hawkish and its difficult to disagree with that take. Annmarie it absolutely felt dovish. It felt very british. Keep calm, carry on, wait for the confidence. What he did mention was pretty much that hikes are very unlikely. Doesnt seem like the fed sees a path to hiking rates. I love what Stephen Stanley said, maybe it was me but did you see the press Conference Today setting an alltime high for awkwardness and alltime low for information content. He thinks the questions were good and precise, but that powell was obfuscating. Jonathan im pleased that stanley said it. I know that some people said that at the beginning. The Media Exchange in the early part where he was asked about being restrictive, pointed to evidence of it in the labor market. This will be interesting tomorrow morning. Threemonth average for payroll 670,000. The estimate tomorrow is 340. I can pick a bank after big bank where its 250. Its hard to see it in the headline numbers for tomorrow morning. Lisa take a look at the beige book and the quick rate, they are more important than the labor Market Report for tomorrow, that was the tone that we got. You mentioned citigroup. They still see 100 points of cuts this year. Raising the question to your point, jim reed, was it less hawkish than it could have been in terms of not necessarily pushing back . Or was it a dovish position with an excuse to cut . Jonathan dovish action at the peak of the News Conference, it fades going into the close and we are down by 2 10 of 1 . Not just the equity market, the Foreign Exchange as well, the time was 4 a. M. In tokyo and suddenly dollaryen is aggressively lower off the back of what we now believe is more intervention. Lisa 22 point 6 billion where they try to take advantage of a window where they saw a reprieve on the u. S. Side where they thought they could come in. What does it look like . Staving off currency weakness . They didnt succeed. If its about blowing the shorts around how far you can push against japanese authorities, they might have won. Jonathan coming up this hour, fantastic conversations with oppenheimer as jay powell six to a dovish script. Apple earnings on deck. Those earnings are coming later this afternoon. Andrew han horse saying that the fed could still deliver rate cuts this year. Top story, bond yields easing as jay powell calms the fears of another rate hike, saying that the operative phrase is for rates to remain at current levels for longer than expected rather than moving higher for longer. John is with us around the table. Good morning to you. Is the fed alive and well after that . I think it is, at least for now, and that can change from day to day as the market keeps digesting yesterday. We werent surprised. Like everybody, we werent expecting a change in terms of rates, but there was greater clarification and if anything we are at a point now where the market is beginning to get it. It is normalization of Interest Rates. There will still be the argument that the fed is still too tight in terms of the economy. But that usually would be coming from highly leveraged players that are still in shock from the change from an environment where the benchmark rate was 0. 25 and now five and a half. Jonathan Mohamed Elerian was on yesterday and he pointed us towards what chairman powell was saying, emerging in places like mcdonalds, corporate america, walmart, starbucks. You can pick individual reasons as to why they are struggling, but are you seeing that . John more like whats happening now is reflective of whats been happening for the last two years, leading to an end of the tightening cycle is where we are headed. So, the other side of this will be some relaxation. Still, we dont think that rates are going back to where they were during emergency standards for the last 15 years between the gmc and the financial crisis with the pandemic and the fallout of that. But it is a normalization process and we have talked about it a lot. The perception around what a high Interest Rate is and what really is a realistic Interest Rate where bond buyers get something in return and bond issuers have to pay for the privilege of our owing money. Sounds healthy to us and we are stock guys. Lisa ok but youre basically endorsing long variable lags, seeing it work through in the form of commentary that you have heard from these companies. Does that make you less optimistic about total returns, or do you see this as the market waking up to what you have been saying all along . John i think the mayor market is waking up, which is highly flattering, but you dont want to get too positive. The market will always show you its like being a tiger trainer, dont turn your back on the tiger, avoid hubris at all costs. Lisa so after the bell we are looking for apple. Later this month, theres a real question about consumer facing types of tech names. We have seen real distress, more disproportionately in the likes of amazon. How much of a water ship moment will the Apple Earnings be given the angst . John as you know, they dont let me talk about specific stops stocks at oppenheimer. Lisa but what most people use . John they are caught in a transition of going from a major part of their sales now beginning to disappear as a result of ideological differences in the country in many ways. Policy in china. That is a natural thing, but they are led by tim cook, who has been shown to be a remarkable business leader. Steve jobs really picked the right guy for the job. If a company has an understanding of innovation and how to foster it, we have come to think that you dont jump to fast negative conclusions. Annmarie you say you want to look at industry sectors, less stock specifics, but you still like cyclicals . John we do and we think you need to be exposed to technology, its the big story here and it is one that is not only secular, but cyclical and can help all the sectors. Annmarie when we see moments of pullback, is that a moment for you to say by more and go deeper . John we are not big buyers of the dips, but we are big buyers of babies that get thrown out with bathwater. We like technology. Garp growth is the companys deeply embedded in the lives of the consumers and business. We are all on the upgrade cycle. Whether we resist it or not, i just found out that one of my phones would no longer adapt to the Delta Airlines app, so fortunately annmarie why is that . John two old. Jonathan got to upgrade. You are the problem with Apple Earnings. John i have a 14, 14 for business. For personal i had a 6s and i being forced to upgrade. Jonathan oppenheimer pays for the newer iphone. I can see what kind of guy you are, john. [laughter] you said Something Interesting about the other 11 sectors. Want to talk about that. The difference between ai enablers and ai adopters. When do we start to focus more on the latter at not the former . John that change is imminent. Ai as it exists today is already helping Companies Navigate the tough transition environment. Jonathan can you give us an example . John when you see value stories that adapt ai suddenly become more attractive to investors and you begin we have already begun to see value beginning to perform better. Its not just on the defensive position. Its the benefits of the growth aspect of the market within sectors and what it produces is beginning to help value. Jonathan this is banks making more money with less . John it is and like any adaptation of technology, it will be new jobs that are needed. Humanity, think of the primitive ai we have today, anytime you call in to an Insurance Company or any kind of a provider to get information, you have to fight the auto voice that tries to tell you how much they value you and tries to sell you all kinds of stuff. Jonathan we wont know the difference between a robot and a person . John when you get to the person you say thank you for being there and tell your bosses that the person who called remains a customer because of you, not the robot that tried to keep me from talking to somebody. Lisa i feel like we are getting an intimate look at your personal struggles. Jonathan this was the tool with delta yesterday. Lisa why wont you let me upgrade . Im sorry, you are not high enough of a level to talk to us as a human. You have been working and talking to clients, not taking any time off at a time when people say that nothing has changed. What is keeping you so busy . John i want to be assured that nothing has changed. Im always looking for surprises. 40 years in this business, this will be my 41st year, it just teaches you that you never know whats coming around the corner. I will never forget when jonathan asked me, it was 2020 singh looking back what did you learn and i told him that anything can happen. Since that time, i have added that the power of a negative pitch book can be significant. Remember, 2022, we didnt have a huge surge in unemployment. We didnt go into our earnings recession. We didnt see all the things that the bears were talking about. We just got through things. Jonathan 22 was a big year tough year for big tech. Much better year, 23. John, good to catch up with you one day after the Federal Reserve decision. S p futures right now, positive. Getting you stories elsewhere with your bloomberg brief. Tensions remain high as propalestinian protests continue on college campuses. Police are taking action to clear up encampments and clear outbuildings, as demonstrators ask for schools to cut ties with israel. The Associated Press reported 1600 arrests at 30 schools since the protests began at columbia in new york two weeks ago. Novo nordisk raising its annual profit outlook as more patients get on their weight loss drug. The drugmaker saying more than 25,000 patients are starting on the treatment each week in the u. S. Compared to 5000 back in december. Shares fell during trading in copenhagen but have surged more than 25 this year. Shares of carvana, surging. They posted a net income of 49 million. Analysts expected a loss of 160 million dollars. Vehicle sales grew for the first time in six quarters. The results could be a signal that the once nearly bankrupt company is moving past their Restructuring Plan and into growth. Jonathan thank you. We will catch up with you in about 30 minutes time. Plenty of conversation around this task about novo nordisk. Dovish . I think the evidence shows clearly that the policy is restrictive. Demand is still strong, the demand side of the labor market in particular, but it has cooled from a few years ago. Jonathan live from new york city this morning, good morning. Wealthchanging question are you keeping as much of your investment gains as possible . High taxes can erode returns quickly, so you need a taxoptimized portfolio. At creative planning, our Money Managers and specialists Work Together to make sure your portfolio and wealth are managed in a taxefficient manner. Its what you keep that really matters. Why not give your wealth a second look . Book your free meeting today at creativeplanning. Com. Creative planning a richer way to wealth. Jonathan ive rebooted. I think. Equity futures positive by 0. 6 percent. Yields lower by a single basis point. The u. S. 10 year under surveillance this morning, one gear dovish. I think the evidence shows clearly that policy is restricted. You can start with the labor market. Demand is still strong. The demand side of the labor market in particular, but it has cooled from a few years ago and you see it in job openings and today in the jolt report. Still higher than the pandemic, it has been coming down. Jonathan treasuries climbing across the curve with jay powell saying that treasury is restrictive, downplaying the possibility of a rate hike. Saying that with an extremely high bar for tightening policy, there is value of owning the front end, value in real yield in the u. S. Around 2. 25. Christina joins us for more. What did you make of that News Conference yesterday from chairman powell . I think he closed the dale on hikes very clearly. He didnt want to entertain it. The scenario that we stay on hold longer and these are the conditions in which we ease with a closed door on the other side and it is relevant for the value on the frontend. We will be speaking from to andrew from citi later this morning. How low is the bar and we reintroduce a conversation around rate cuts . Kristina the bar is higher, powell said that they didnt want to react to just one or two data prints, but with a few full quarter they needed more to change and i think there is still more focus on the inflation front. You have three inflation fronts before july, but i think you have to have overly convincing evidence the other way. Ken september be on the table . Yes. But they have lost their confidence in how quickly they will be able to get there. Again, i dont think that there is a case for hikes. We think that the next policy Movement Really globally, except for boj as an outlier is to ease policy. Its delayed until they have the confidence. Lisa were the hikes something that people thought might be warranted, given the Inflationary Pressure under the hood . Kristina it feels like a bit of the first. Markets get excited about swinging from one extreme to the other. A lot of the conversation, if you hadnt been here and listened to the fed rhetoric and all of this and we bought into what he sold us in december and looked at the data, its hard to come up with a situation why they would need to ease as much as the market was pricing in january. But im not sure the case goes the other way. Lisa the reason i ask is we were playing around with the idea of taking off the aspect of a rate hike within easing bias, despite the hotter than expected data, does it create pleasure for the yacht pressure for the long end of the yield curve . The feeling is that the fed wants to cut rates even if inflation is running hot, raising questions about the premium you have to charge. Kristina that has been our spot on thesis for the last six months to nine months. That is the point of the rates market that has been mispriced and there needs to be more premium in the long end. The curve has been so inverted. The market has given tremendous credence to the fed and its ability to fight inflation, but inflation has been stickier and we need to see higher long end yields and part of the argument about the steeper curve as we subscribe to the market is that it is not just the fed easing with a super curve, its a repricing of long end yields needing to be higher with value at the frontend because we do not see that case. Lisa yesterday he talked about being an aggressive buyer but not thinking it will go much above that and that it will frankly hover around there and at that point it creates restrictiveness in the economy. Is that how you view things . Kristina i think so. I think in the fall the bond vigilantes got excited talking about 6. 5 , but i dont think there is a case for that. We can reprice a bit around 5 . Thats where you have more balance in the market. You also have to take into account that there has been a tremendous amount of flow into fixed income products keeping a lid on yields, even in spite of fiscal spending, inflationary concerns, all of very tight corporate expense with money put to work there. Jonathan Balance Sheet runoff, its amazing the cutie comes up and people have barely talked about it. Whats going on . Kristina i think that that is by fed design in many parts. They have worked hard on both where the primary policy tools are policy rates and its what we want going on in the background. They are famous saying this is watching paint dry. The adjustment is a lot more about fine tuning so that we dont have Balance Sheet issues the way we did that september in terms of stressing the market and trying to ease it. Jonathan i struggle with qe meaning to be bullish and cutie isnt, but some people then say that capping it off is bullish again. I cant figure it out, what is it meant to mean . Kristina i think that if you go back to the economics conference a few weeks ago, you had was that he and a few other people doing that on the impact of qt across these markets. The conclusion is that qt has a 3. 25 point basis impact. But that is by design. They talk about the point of waller spoke after, but they talk about when we do this, we only do it when we think it will have no impact on the market. That is their goal in many ways. Jonathan largely psychological, thats what we are saying . I we are perceiving it to be based on camino casing from fomc communication from lisa lisa fomc . Your confusion reflects that of quantitative easing on the market. People have been trying to make this mystery makes sense but it is the reason why you havent seen liquidity draining from the system. It hasnt shrunk consistently enough. Jonathan we will get a ton of fed speak for the next two days. Do you think that chairman powell represents consensus on the committee, or do you expect to see differences in the days to come . Kristina we have seen a lot more divergence in fed speak and powell has positioned himself as one of the more dovish members. Even yesterday you were talking a lot about looking for a hawkish fed. But we already moved that way. We had taken it out and there was nothing hawkish about the message. Saying that this was the day for mark to market and i think that the spe