Cyclical names, caterpillar, honeywell. We will dive into that. The 10 year yield is moving, 394 at 4 00 or 5 00 a. M. This morning. The 10 year yield at 4. 07. A lot of move intraday for the treasury market. Down five basis points from yesterdays session. Its not just the bond market. Across the atlantic the ecb is hiking 75 basis points. Its not enough to give a boost to the eurodollar. That is down below parity. Weakness there and strength in the dollar to that end. Strength of the dollar is not weighing on brent crude. Oil is rallying hard, 1. 2 , trading around 96 to the barrel. When it comes to the economy, are we growing given the technical recession is in the Rearview Mirror . Joining us to talk about it is the Bloomberg Economic and policy correspondent michael mckee. Talk to us about the gdp data we got. Michael it is a good news bad news story. The good news is for the first time this year we saw gross in the u. S. Economy with the Third Quarter expanding 2. 6 in the u. S. A at an annual rate after two quarters of contraction. Under the hood, not as good. Consumer spending is positive, but much slower than earlier in the year. Business spending is nothing to write home about, though it too is too positive. Inventories were much lower and that subtracts from gdp. Trade, net exports, the exports of u. S. Trade in the Third Quarter was very high. Imports fell. That contributed to gdp, 2. 77 more than the gdp gain itself. Durable goods orders are also out today. For the month of september, the last month of the quarter, we are seeing a slowdown, particularly for capital goods orders, things that goes into gdp as business spending, down. 7 . It suggests all this will slow. The good news is if the fed is slowing the economy it should push unemployment up there is no sign of that yet. Jobless claims numbers barely changed last week. The fed meets next week with basically 75 basis points baked in. The question becomes, what happens in december . This may depend on whether the economy is slowing as under the hood numbers in this gdp report suggest. Kriti the durable goods numbers almost echo what you are seeing in earnings. Tech names are getting beaten down. Manufacturing seems to be thriving. At the same time, the housing slump is reflected in gdp numbers. How do you square the two . Michael the economy is still growing. We are seeing people buying things and that is keeping factories going. There has been a backlog of stuff because they could not get parts. Now it may start to slow. The other thing is companies can beat earnings because earnings estimates have been lower. Whereas, economists estimates had been for stronger performance and we are not meeting that now. Kriti you always wonder who is right and wrong. Michael mckee, thank you. From the u. S. To europe. There is a lot going on there. The ecb hiking rates by 75 basis points, dublin to the highest level in more than one decade. All they prepared for potential spread widening in the face of a recession wall street has all but guaranteed. Take a listen to what Christian Schulz had to say. They created an instrument to deal with spread widening that is not caused by a policy ever that governments themselves need to fix. That is a warning to this Italian Government not to play by the rules. It is also a guarantee that if they do, then, the ecb will be on their side. Will it be enough if trouble really starts hitting the proverbial . We are a bit skeptical. It is big on tape paper, this tool. But the mechanism of activating it, everybody agreeing on it is different. It is a different situation but it starts with italy. They have to play by the rules. Kriti joining us is megan graham, the global chief economist megan greene, the global chief economist at the Kroll Institute, who was recently in italy as well. It italy at the crux of whether the ecb policy will work or not . Megan it could be. I am more sanguine on italy that i had been. There is not a lot of extra money in italy going into this winter. It is possible italy is already in contraction. The only one buying italian bonds is the ecb. The ecb will not finance a flat tax or reduction in retirement rates. This department will have to fall into line. It has also been watching market dislocations in the u. K. Off the back of the many budgets, probably, during some lessons. I have been less worried about italy in part because of the appointments charger maloney made in georgia meloni made in her cabinet, keeping the finance minister that watched and limitation under mario draghi. He has some experience. We can experience expect a business as usual brief from the mario draghi government. I believe the Italian Government will fall into line. If i am wrong about that the ecb tools will really be tested. The pep program, the reinvestments has been directed towards italy to keep italian spreads down. In the runup to the announcement of this government cabinet. The tpi may end up needing to be used if i am wrong and italy decides to try to paint outside the lines. Kriti you went exactly where i wanted you to go, the tugofwar between fiscal and monetary authorities. The u. K. Has been the poster child. We have seen elements in the u. S. As well. To what extent is this an actual threat to the effectiveness of what some center banks are trying to accomplish . Megan it is a huge threat, particularly in europe. European governments will have to spend more. Through this winter, and more broadly, next winter, when it will be more difficult for europe to refill its storage without russian energy. If european governments have to spend more, then, that will be inflationary. That undermines what the ecb is trying to achieve in hiking rates and withdrawing accommodation to lean against policy. I think what we saw in the u. K. Is a sign of things to come for the rest of the developed world where governments will try to spend more. The markets will be the disciplining factor. Central banks have to step in and paper over liquidity issues, paper over market is locations. If Central Banks keep doing that, as the bank of england did with the ldi blowup, if they keep firing up qb, investors will eventually say that is inflationary and that undermines the central bank attempt to lean against inflation. It is a huge risk going into next year. Kriti at least stateside it seems like the Federal Reserve hiking of rates has shown up quickly in Mortgage Rates, in turn taking out momentum in the Housing Market to the point that the Housing Market is subtracting the most from u. S. Gdp going back to 2007. What a housing crisis in the u. S. Be that bad . Megan yes, a housing crash would be bad. But, defined crash. I dont think we are looking at a repeat of the subprime market in 2008. It is worth pointing out that a softening of the Housing Market is the point of hiking rates to some degree. It is a feature, not a bug. How you will reduce demand to bring it down to the level of supply so you get equilibrium and not sustained, high inflation. I dont think we have the same exposure to the Housing Market as before, the same subprime mortgages. We are not looking at a repeat of the Global Financial crisis by any stretch of the imagination in the u. S. In the u. K. , a mortgage crisis is a bigger risk because the links of mortgages is much shorter in the u. K. With the bank of england hiking rates pretty aggressively. But in the u. S. , i am less worried about this. Kriti a fascinating system in the u. K. They tick take mortgages out for five or 10 years instead of a 30 year fixed mortgage. Megan greene, thank you. Next on the show, first word news with john island. John the Biden Administration scaling back cap on russian oil prices following skepticism i investors and risk in markets. Instead of strangling kremlin oil revenues by imposing a price limit, the eu and u. S. Art like leely to elon musk, the worlds richest mental twitter employees he does not plan to cut 75 of staff when he takes over the company. Bloomberg learned elon musk denied in an address to workers at the companys office in san francisco, but the billionaire is expected to cut staff, causing anxiety. The 44 billion deal is set to close this friday. Homes in the hamptons of new york sold at the fastest rate on record. Properties from posh Long Island Beach towns were listed 70 days before finding buyers, down from 96 days from year earlier. The median Purchase Price was 1. 6 million, tying the record high. Global news 24 hours a day on air and bloomberg quick take powered by more than 2700 jenna ellis and analysts in more than journalists and analysts in more than 120 countries. Kriti this is bloomberg markets. Im kriti gupta. Shares of view rose today after shares of softbank raised 200 million 200 billion of convertible notes. Scott drexler of rx are joined rxr and sonali basak. Scott, you first. I want to ask you about the deal. Walk us through the opportunity, the terms of the deal and the terms of the convertible. Scott every owner, real estate operator, has been struggling to find ways you can actually reduce your energy usage, reduce your carbon footprint. For years, we have been talking to view about their product that enables you to do that in a very effective way. This situation is, view went public a few years back and there to their shares have been trading down. We saw an opportunity to take an extra neri company with an extraordinary profit. And bring cap extra neri product and help them accelerate their business. We are injecting a convertible that converts up 25 . I am joining the board. I am a big believer in everything view has created. It has been around since 2008 and has 1400 patents, 40 million square feet of class already out. It is a proven company with a proven product at the intersection of find to address one of the greatest challenges the Real Estate Industry has, dealing with our carbon footprint. Sonali when you look across the market, how does a convertible note help you weather this storm and what will you do with new funds . Scott rao the capital is the fuel that helps us grow, build business, and get to profitability. This helps us quds out. It is capital that is a fuel to build tech to serve customers. Kriti talk about public versus private. This is something sent ali reports on all the time. This tradeoff. You went public a while back. Do you think you are still a private company . Dr. Rouse i have been rao we have been private for 12. 5 years and public the last year and a half. Going public helped us access markets and build awareness with a broader base. And partly, this is a company we already knew would be built in Public Markets longterm. This is a product that will be global and changes the infrastructure of the industry. It is made to be public, we just need it ready and the markets that were opened allow us to do that. Now we will grow in Public Markets. Kriti you lead this deal alongside a group of investors. Our investors in the market thinking about using a convertible note structure given the market challenges . What do you expect at the end . Scott what is interesting and unique about view is that they have a proven product, 40 million square feet already used. Also, while this is a product we have all looked at, there used to be a cost premium for people who wanted to use this dynamic class. You save energy, but have to save more. Pay more. In the recent Inflation Reduction Act there was an investment tax credit. Now the cost of using view glass is on parity with traditional class. Anyone building a new building today, there is no reason to not use view glass, save energy, have a better experience. The business proposition is simple. They have a one million squarefoot factory with a significant amount of money in that factory. Now the demand that comes through when the factory is up and running will create significant free clash flow cash flow. We are not reinventing the wheel. We are allowing the team to make that happen. Now the demand will be in place to get optimized utilization and generate the Free Cash Flow we think will make an extraordinarily profitable investment. Kriti scott, i want to ask you about the real estate environment broadly. We just had the wonderful megan greene of the Kroll Institute here to talk about the housing process may be in the works. That could feed the commercial real estate sector of not just new york but around the world. Talk about the profitability given the macro environment. Scott there is no doubt in many places that we are going through an Economic Cycle with Interest Rates impacting the real estate market. What is also attractive about view is they play across multiple spectrums of real estate. They have clients like google and amazon. They are in multifamily. Housing, particularly on the multifamily side sees tailwinds of growth. Health care is another area with tailwinds. Hospitals, infrastructure, airports. Many airports around the country are building two terminals at Jfk International airport, and working with view on that project. When you think about real estate today, some some sense of it will be hurt beyond just the cycle. They will have tailwinds coming out of the cycle. Housing, health care, infrastructure, that is the sweet spot of the view clientele and it will do really well coming out of the cycle. Kriti thank you for your time. Breaking from across the atlantic, on todays rate hike the ecb was not unanimous in the 75 basis point decision. Only three officials wanted a 50 basis point hike. We are going to break a little more news in the next block. The ecb did not mean to imply slower hiking with the remark on progress they made earlier. We will dive into the details of the reporting next. Michael mckee joins us in a few minutes. This is bloomberg. Kriti this is bloomberg markets. Breaking news from across the atlantic. The ecb rate hike today, 75 basis points, was not unanimous. Three officials wanted only 50 basis points. To break down the significance is Bloomberg Economics International Policy correspondent michael mckee. Talk to us about the significant that comes one day after we saw a similar dynamic in the bank of canada. They were slowing down from 75 basis points to 50. Now you are seeing dissent in the ecb. What does it mean . Michael they are looking at the economic prospects for their region and they decided that there is a chance of a significant slowdown. Some members of the Ecbs Governing Council decided they only wanted 50 basis points, taking a more cautious approach. However, the ecb operates by consensus. They came out with a substantial consensus to do the 75 basis points. That left the question, what do they do at the next meeting . There was a substantial discussion of that. It included the phrase they made substantial progress in normalizing policy. Many people felt that was a slow down and they did not want to signal one way or another. They put in that idea they would raise rates at the next several meetings. There are no numbers, but the markets have taken it as a dovish, not progress, but outlook promise, but outlook. Kriti the bank of canada, from the bank of her point of view, jay powell has over and over receive referred to that era of the 1970s, the 80s, paul volcker, they should not have paused when they did, they need to go full out and to go full out and be aggressive on inflation. Is not that the message that the bank of canada and ecb is listening to as well . Michael the situation of europe is different than the u. S. , where we had contributions to inflation, significant contributions from the stimulus package, with more money chasing fewer goods. The problem is that the europeans have particularly the war in ukraine and Energy Prices and the ecb can do a lot about that. Because Energy Prices are so high, they anticipate they are going to have or are already in a recession. Their view on what they need to do to try to get inflation down is a little different than the feds. The fed wants to kill off demand. Ecb knows it has a hard time doing that with recession in the forecast. Canada is somewhere in between. They are in for a significant slowdown if not recession, so the bank of canada is careful as well. Laxalt out kriti i want to ask about the balance. The fed is in full tightening mode, quantitative tightening. The ecb is hesitant to dive into that yet. We had bloomberg reporting that that may come soon or may not. Should the ecb be more look aggressive about the liquidity crunch . Michael we have been told that the Ecb Governing Council will try to decide on a plan at the december meeting but will not announce it then. They will come to an agreement and slowly roll it out so markets get used to the idea. They do not want to shock the market. They dont want the problem of the bank of england hat with banks or Financial Firms unable to keep their trades going. That is kind of the rollout plan for the ecb. Remember, with app and the pep program they are still using their Balance Sheet and they may not need to do that with italy and other countries. Kriti there is no immediate Market Reaction off the headlines, perhaps because the european bond market is closed. Bloombergs mike mckee, we thank you as always. This is bloomberg. When people come, they say theyve tried lots of diets, nothings worked or theyve lost the same 10, 20, 50 pounds over and over again. They need a real solution. Ive always fought with 510 pounds all the time. Eating all these Different Things and nothings ever working. Ive done the diets, all the diets. Before golo, i was barely eating but the weight wasnt going anywhere