City this morning good morning for audience worldwide. This is bloomberg surveillance headed towards three weeks of gains in the s p 500 before we get to the weekend already looking forward to next week. Look at the lineup absolutely stacked, full of Economic Data. Wednesday cpi retail sales thursday jobless claims you got some retail earnings in the mix we will hear from home depot and walmart by the end of next week we should have a decent read on the American Consumer . It feels like every piece of data is choose your own adventure. You decide what comes in and what you think about this economy. Its been contradictions, ism goes into contraction. Earnings overall is great and gdp now tracker for percent. Make sense of that. Jonathan you all remember last tuesday fed might have to talk about raising Interest Rates in the wednesday meeting and then all of a sudden the cooler payrolls read whipsawed narrative from one side to the other. More fed speak later. Fed speak just repeat the same line again and again. Youll hear from bowman, logan, kashkari and master. We are restrictive it might take more time to just bring inflation down, more time seems to be the frame the phrase. Dani we are pleased with literally any other fed speaker and thats always gotten. We dont know what they will do anymore because they dont know what they will do anymore so we get the same reframe. A lot of people have been talking about this over the last couple of weeks just the idea we dont have to be afraid of strong data they wont hike but if we get strong data they will ease. How well we set up for that given the move down weve seen in yields across the curve. Dani the animal spirits have been unleashed so this market is set up as if we are in the cutting cycle. If we get anything contradictory what happens to this market where you see these people flood to the bond market because spreads are so thin. You have these companies announcing and acting like cuts are not only on their way but they are here. Morgan stanley looking ahead to cpi, the dissent begins. We will see much more on that in the beginning in the program. Positive by 0. 4 theres a lift in this equity market. Yields just about unchanged on the session but down big time over the last week on the 10 year. In the fx market 10777. Larry adam of raymond james. John lever of Eurasia Group responding to threats from President Biden and the white house expected to pose new tariffs on evs out of china. In about 10 minutes time. U. S. Stocks looking to erase april losses. The s p 500 less than 1 from alltime highs. Larry adam with this to say we believe equity momentum is likely to continue in the long run because we are in the early stages. Versus the average of 5. 5. Larry joins us for more. It stands out every time we talked. We have to bring it up again when you believe are the early stages of the bull market at a time when calling it late cycle. I think we are early because the fed is going to cut rates before the end of this year i think they will take outside assurance cuts which will elongate but we are in and that will set up the bull market to last in the years to come. Jonathan 5200 seems to be at the epicenter of your thinking. What is special about that level . Thats our guiding light. We tend to turn cautious. If we get below that we tend to get more optimistic and as we had that pullback the last couple of weeks that was a time that put more money to work into the equity market. Going forward the risk reward ballast as we sit here right now some of the bad news is good news. At some point that bad news turns to bad news. I think the fed will cut rates and make sure we do elongate this recovery. Dani if we are at or above are you in that more cautious mode at this moment . Larry weve gotten a lot more cautious as the started to rally. Selectivity becomes much more critical at this stage in the game. Thats why we look at the favored sectors we still like technology. We like industrials and health care because those have the most sound Earnings GrowthGoing Forward in the best visibility. Dani the weird thing is after that pullback less than 1 the thing that got us there was utilities. Utilities are up 8 in the last month when the s p is pretty much flat as a pancake that is a safety sector he would not think would lead you for the next leg of the bull market. So something going wrong then. Larry we looked over the last month its been the defenses, utilities, consumer staples. Whats lagged has been the more cyclical sectors. Its been consumer discretionary. Thats a message from the market this economy is starting to slow. The fed should take note because they have the ability to do something very few feds have been able to do which is engineer the elusive soft landing everyone talks about. They need to take note of that. Dani what about the data next week . What will that change in your call for there to be cuts . What do you need to see to guarantee we will get those insurance cuts you think the fed will deliver. Larry we need to see the actual data reflect whats happening on the surface of this economy. So when we see cpi next week hopefully we start to see those rental parts of cpi starting to decelerate because thats been the one linchpin thats kept us elevated. Hopefully we see that move lower in the direction we are looking for that will start to get the fed the ability to put less focus on inflation and turn its sights on to this economy to make sure as i mentioned they can come they can cut. Particular after the read the week got yesterday. Companies are conserving on labor cost by selling hiring, cutting working hours. Retentions of dropped to multiyear lows it goes on to say individuals are becoming more concerned about finding a new job at acquitting a lower rate. Ill be at risk here of a sharper week in the months to come . Larry lets keep in mind that that 175,000 jobs created that is slowing. We still think you will see positive job growth for the remainder of this year but it is going to slow. I think weve gotten lulled into thinking you need to get above 2000 every month. Thats really not normal for this economy. Somewhere around 100, 1 25 would get us to a soft landing Going Forward but its something to keep an ion. Where you think Earnings Growth comes from . Larry if you look at whats happening in this earnings season its the areas that tend to be more dedicated to business spending as opposed to consumer spending. This will be the best results in technology industrials and health care. Those are areas i will see Earnings Growth. Jonathan just reinforcing everything youre saying. Can we talk about consumer going into next week. We here on tuesday from home depot, walmart on thursday. Then we were talking about that yesterday, pretty decent for the read you get for mcdonalds and starbucks. There. The consumer is the biggest part of the economy. Its critical good to get the insights to what these companies are saying. One of the things weve been watching for we find restaurants previously and the consumer is starting to be challenged. Its one of the harbingers the areas consumer start to pull back on and when you look at restaurants specifically its which companies can convey the valueoriented menu. When it comes to these companies coming up to report are they providing the consumer with the low cost, of the value to have that come into their stores. Thats a story we will watch. Our consumer stepping down. Looking at more valueoriented generic products as an example. Those are some of the dynamics we will be looking for. Jonathan dani i wonder how strong the trading down narrative is this time around when you have someone like mcdonalds who is the most value of the value you can get when it comes to any food warning about the consumer. When you have amazon saying they think have consumers feeling the pinch. Is the trading down tendency not as strong this time around . Larry i agree the consumer clearly is slowing but i do not think they are collapsing. You have to remember Consumer Wealth is an alltime record high when you look at the jobs being created that creates cash flow for consumers to spend. They are starting to prioritize what they are spending on in the areas we are spending. The ones that do offer the value to succeed in this market. The big tech players we will get nvidia earnings on may 22. Hasnt been tech that led this rally. Does nvidia change that . I do think this ai trait is in its early stages and when you look at some of the big players. Havent really announced their strategy when it comes to ai that would be another catalyst for that theme Going Forward. One of the biggest things that ive taken away from earnings season is the profitability of these Tech Companies is fantastic. And what are they doing with those profits . They are investing in the future to make sure they can compete there complete their competitive edge. When it comes to shareholder value they are either initiating or increasing their dividends and they are doing buybacks and both of those also serve as tailwinds for the sector. Jonathan larry it was great to catch up. That was the only name we will be talking about may 22 shortly after 4 00 p. M. Want to go to what they had to say over the conference board. Confidence retreated further in april reaching its lowest level consumers became more concerned about future business conditions. Job availability and income. That speaks to consumer franchises. Dani the weird thing about that is even if there is a consumer who is not very confident and more concerned about jobs the savings rate is somewhere around 3 of disposable income. If you are worried about the world, about the job presumably it would save money. Thats not what we are seeing. Then it comes to the contradictions we are seeing in the data and the anecdotes. Getting you set up for a major week just around the corner. Equity futures into the weekend posited by one third of 1 . With your bloomberg brief here sonali basak. Sonali the u. K. Bounced back to post the strongest quarter of growth since late 2021. Gdp jumped in the First Quarter higher than it was expected and the data marked the end of the mildest u. K. Recession in almost 70 years. It could complicate the bank of englands rate cut path with potentially stronger growth feeding inflationary pressures. Bloomberg news is reporting ubs is considering introducing a reward system for Investment Bankers who refer clients to the Wealth Management business. Some would likely be in line for payouts when they attract new money through the lenders Private Banking unit. It would be a first for the swiss lender echoing incentives that Credit Suisse had offered to its dealmakers. Apple has issued a rare apology for touting its latest ipad in a certain add. It shows Musical Instruments and other creative tools being crushed drawing criticism on social media for what many are calling a depiction of the destruction of humanity. The apple Vice President of Marketing Communications telling at age we missed the mark with this video and we are sorry. Apple says it wont air the ad on tv as planned. That your bloomberg brief. Weve all got stuff to stay about that say about this. If youre apologizing i think youre apologizing for the product. Because that product is basically what the ad is. Dani people take stuff too seriously. Apple wasnt going around taking a sledgehammer to guitars. Jonathan i watched it before i saw the headlines. I was like i can see it but really . A lot of people seem to headlines and not watch the ad. You have that bias of what other people are saying. If you can afford a 110 billion dollar buyback you can direct some of that money to outspend and avoid some of these mistakes if you believe they are mistakes. Equities positive by one third of 1 . Netanyahu vowing to fight alone. Ive known joe biden for many years. We often had agreements but weve had our disagreements. If israel has to stand alone we will stand alone. We will catch up with annemarie down in washington. Live from new york city this morning good morning. The future is not just going to happen. You have to make it. And if you want a successful business, all it takes is an idea, and now becomes the future. A future where you grew a dream into a reality. Its waiting for you. Mere minutes away. The future is nothing but power and its all yours. The all new godaddy airo. Get your Business Online in minutes with the power of ai. Jonathan live from new york city welcome to the program taking you into the weekend alongside dani burger. Primos taken a long weekend. Equity futures on the s p 500 positive by one third of 1 . Yields about unchanged on the 10 year. Under surveillance this morning netanyahu failing to fight alone. We often had agreements but weve had our disagreements we been able to overcome that. I hope we can overcome that now. We will do what we have to do. If israel has to stand alone we will stand alone. The israeli Prime Minister bennett human that you move vowing to continue the war in gaza with or without u. S. Support and President Biden getting pushback on capitol hill. Senator Mitch Mcconnell saying biden cannot have it both ways. He cannot claim to support his ironclad while denying them the weapons they need to defend themselves. Annemarie is joined by john lever of Eurasia Group. Annmarie he also was a former top policy advisor for senator Mitch Mcconnell. I want to first talk about the division not just of the Foreign Policy hawks. You saw mcconnell and biden site stand sidebyside when it came to russia and the middle east. The growing division we see with Benjamin Netanyahu and this administration how big is that gap now . I dont think they love each other all that much. Theres personality differences and big policy differences. Even before october 7 you had a lot of the american supporters of israel who were not big Benjamin Netanyahu fans. Now over the last few months of this bloody offensive into gaza israel has become a very big political problem for President Biden. And it is starting to impact policy just in the last week we seen the Biden Administration really shift quickly they say they will keep sending weapons, they are just starting to do with the far left is wont to them to do for a while which is condition aid going into israel. We heard from senator mcconnell, Lindsey Graham also was quite feisty when it comes to how this administration is conducting itself with israel. The Editorial Board talked about how it was the democrats for months pushing the republicans to sign up for more aid and now they are the ones that dont want to send the weapons so we have that divide between israel and this administration. Whats the divide like between some of these republican Foreign Policy hawks in the Biden Administration. The republicans clearly benefit from criticizing biden at every opportunity they can. They clearly want to align is much as possible with israel and the proisrael party. Youve got senators like jon tester from montana in a race hes probably going to lose saying he does not support the Biden Administrations doing and declaring his ongoing support for israel against the wishes of the Biden Administration. So that divide is a big one. Its not just across party lines. This as they try to walk this fine line because of the pushback from the Progressive Left and also the protests on the ground and the fact that they are concerned about this densely populated area in rafah men what these types of bombs would do potentially to civilian casualties. When you play that all out what does this mean in terms of their offramp because theres no hostage negotiation. How do they have an offramp from this crisis . The only offramp of the israelis have been clear about this is they need to succeed in gaza and achieve their military ends and root out hamas. Thats not to be easy in the operation in rafah wont be for that. There could probably have to be fighting an insurgency in gaza for the foreseeable future and it still looks like theres no plan in place for how to govern the area once the military has withdrawn which means israel will be involved in this conflict for a long time potentially years to come and that means the americans will have to make this choice about how much aid they are willing to supply and what weapons they want to give to fight this war. Annmarie given this will go on for months and potentially years what is this mean for the administration in terms of policy heading into the election. How much tougher will they get in terms of rhetoric and action from israel. Just today we heard about this report they could be released criticizing the israelis for Human Rights Violations in gaza. That itself would be a big rhetorical step up which on top of the threat to withhold weapons suggests there is an accelerating split between the white house and netanyahu which the israelis are signaling is not a problem for them. They will fight this offensive but it is a problem for joe biden who has this massive split in the Democratic Party and has been acting somewhat indecisively on the issue saying he supports israel all the way to the end and then now pivoting a little bit to say theres limits to our levels of support. Thats a huge political vulnerability and he will be on his back foot for the remainder of the six months of the president ial campaign he will fight. Some of these big donors in the