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00:00THE PRESIDENTS WILL BE THE FIRST SINCE THE CRACKDOWN ON PRO-DEMOCRACY OPPOSITION. GLOBAL NEWS -- GLOBAL NEWS, 24 HOURS A DAY, ON AIR AND ON BLOOMBERG QUICKTAKE, POWERED BY MORE THAN 2700 JOURNALISTS AND ANALYSTS IN MORE THAN 120 COUNTRIES. I AM MARK CRUMPTON. THIS IS BLOOMBERG. ANNOUNCER: THE MOST CRUCIAL MOMENTS IN THE TRADING DAY. THIS IS BLOOMBERG MARKETS. WITH CAROLINE HYDE, ROMAINE BOSTICK IS TAYLOR RIGGS. ROMAINE: LIVE FROM BLOOMBERG HEADQUARTERS. THIS IS "BLOOMBERG MARKETS THE CLOSE". I AM ROMAINE BOSTICK. THE BIG QUESTION TODAY, HOW MUCH STEAM DOES THE RECENT EQUITY REALITY HAVE -- THE EQUITY RALLY HAVE? ALL THAT AND MORE COMING UP IN JUST A BIT. LET'S CHECK IN ON THE MARKETS. IT LOOKED LIKE IT WAS GOING TO RALLY FOR ANOTHER DAY. ANOTHER DAY OF GAINS AND LOSSES. IS THIS A RESULT OF THE BALANCING OR SOME OF THE ECONOMIC CONDITIONS. HIS TALK ABOUT WHAT HAS BEEN MOVING. WHETHER YOU TALK ABOUT THE DOW. AND THEN HE TALK ABOUT RATES. ON THE 10 YEAR YIELD, YOU WONDER ABOUT THE CORRELATIONS HERE AND WHAT PEOPLE ARE PRICING. KATIE: -- TAYLOR: THE YIELD IS HIGHER, TECH LOWER. THERE WERE SOME TWO AND A DOUBLEHEADER. THOSE WERE THE CONSUMERS IS OVER THE SOME OF THE NOTES THAT I WAS READING. MAYBE A SIGN THAT RATE STILL HAVE HIRED TO MOVE. I AM SORT OF GATHERING THAT FROM THE NOSE. THE LONG TERM -- AND THE COME DOWN OFF OF THAT PEAK. THIS IS A EARNINGS ESTIMATES. THEY ARE NOT ACTUALLY COMING DOWN. WHAT IS INTERESTING IS A LOT OF PEOPLE ARE TALKING ABOUT THIS. IS THERE A LITTLE SUMMER RALLY? LOOKING AT A 10% SUMMER RALLY. LOOKING AT EARNINGS. THERE IS STILL SOME CONSENSUS OVER WHY THE EARNINGS ARE FALLING. ROMAINE: I'M GOING TO GET MY MAGNIFYING GLASS AND TAKE A LOOK AT THAT IN JUST AS I CAN. YOU HAVE THE IDEA THAT ANALYSTS ARE REMAINING RELATIVELY POSITIVE. MAYBE THAT UNDERPINS POTENTIAL FOR FURTHER GAINS WITH SOME OF THOSE COMPANIES. KATIE: DO THOSE ESTIMATES HAVE TO COME DOWN? WILL GRAVITY KICK IN AT SOME POINT? ROMAINE: WHEN I LOOK AT THOSE CHARTS, EITHER SOMETHING HAS TO COME DOWN OR SOMETHING HAVE TO GO UP. LET'S GET A LITTLE BIT MORE INSIGHT. WE ARE SIX MONTHS INTO THIS YEAR. IT IS ALMOST OVER. HEADING INTO THE SECOND HALF. TOP STRATEGIES -- TOP STRATEGISTS SHARING THEIR OPINION. > > PROBABLY LOOKING TOWARDS THE END OF THIS YEAR. THE ONLY SILVER LINING WILL POINT TO WE DON'T SEE THE SCOPE FOR A DEEP OR PROLONGED DOWNTURN. > > YOU'RE GOING TO HAVE A SLOWDOWN. A PRETTY SIGNIFICANT SLOWDOWN OR SEE YOU FINANCIAL SLOWDOWNS ACROSS THE WORLD OR THE U.S.. I AM VERY CONCERNED. > > THE ESTIMATE OF THE PROBABILITY TO BE A 50% CHANCE. ALL THOSE FACTORS ARE REMAINING A CLEAR DOWNTURN. > > WE DON'T KNOW WHAT IT'S GOING TO HAPPEN. > > RISK THAT RUSSIA AND UKRAINE INTENSIFIES. THAT IS ALSO GOING TO PUT FURTHER PRESSURE ON ENERGY PRICES AND MAKE THE FED'S JOB DIFFICULT. > > IN EUROPE, NOT ONLY THE RECESSION -- WHICH COMPLICATES IT FURTHER. ROMAINE: SOME OF THE BEST AND MOST INTELLIGENT FOLKS ON BLOOMBERG. NANCY -- CEO AND CIO. NANCY, I WANT TO LOOK FORWARD. WE KNOW IT THE FIRST HAVE GAVE US. WE KNOW WHERE WE STAND NOW. A LOT OF DEBATE WHERE WE GO FROM HERE. HOW RESILIENT CONSUMERS CAN BE. HOW RESILIENT ECONOMIC CONDITIONS CAN BE. > > I DON'T LIKE BEING INTRODUCED AS ONE OF THE INTELLIGENT VOICES. I HAVE NOTHING TO SAY. HI, ROMAIN. WE HAVE BEEN TALKING ABOUT A SLOWDOWN FOR A YEAR. WE WERE CONDITIONING OUR PORTFOLIOS. MARKET DOESN'T SEEM TO DISCOUNT I HAD AS MUCH AS IT USED TO. CREATING VOLATILITY AND HEDGE FUNDS JUMPING IN. IT SEEMS TO BE A BIG SURPRISE. I EXPECT GROWTH TO GROW. PMI HAS HIGH CORRELATION TO S & P EARNINGS. WE HAVE YET TO SEE ANNUALS BRING DOWN EARNINGS. EITHER THE PMI'S ARE WRONG AND THINGS ARE NOT AS BAD AS THEY APPEAR. THERE IS AN ARGUMENT TO BE MADE FOR THAT. IF YOU LOOK AT GLOBAL PMI'S IN MAY, THERE IS NOT ONE COUNTRY IN CONTRACTIONARY AND WEAKENING. THERE WAS ONLY ONE COUNTRY IN CONTRACTIONARY AND STRENGTHENING AND THAT WAS CHINA. EVEN MEXICO HAD HOPPED OVER INTO EXPANSIONARY AND STRENGTHENING. THERE IS AN ARGUMENT THAT YOU COULD MAKE THAT THINGS AREN'T AS BAD AND THE MARKET MAY BE DISCOUNTING. TAYLOR: IS THERE ALSO AN ARGUMENT THAT -- HASN'T COME DOWN BECAUSE SALES --? NANCY: LAST QUARTER, PRODUCED 30% LESS REVENUE GROWTH. ONE OF THE COMPANIES BEING ABLE TO MARK DOWN TO THE BOTTOM LINE? CONSUMER SO FAR HAVE BEEN AGGRESSIVE. AT SOME POINT, YOU CANNOT DRAW DOWN ON CREDIT INTO INFINITY. THE GOOD NEWS IS THEY ARE WORKING. UNLIKE IN THE 70'S WERE WE HAD VERY HIGH LEVELS OF UNEMPLOYMENT. THE MARKETS ARE VOLATILE. KATIE: WHEN YOU THINK ABOUT THE FIRST HALF OF THE YEAR, IT FELT LIKE THE ONLY SECTOR IN THE GREEN SO FAR THIS YEAR. IF YOU LOOK AT HOW JUNE HAS EVOLVED, THE WORST PERFORMING SECTOR. IS THE ENERGY TRADE OVER? NANCY: IN THE SIERRA, GAS WAS EIGHT DOLLARS A GALLON A FEW WEEKS AGO. PRICE HAS COME DOWN WITH THE SUPPLY HAS NOT LET UP. HIGHER PRICES THROUGHOUT THE SUMMER AND MIDTERMS COME INTO PLAY. THE QUESTIONS WILL BE DO INVESTORS ANTICIPATE THERE IS GOING TO BE A SHIFT IN THE HOUSE AND WILL THAT HAVE AN IMPACT ON THE ENERGY POLICY. YOU MIGHT WANT TO SHIFT YOUR FOCUS AWAY FROM UPSTREAM AND MORE TOWARDS DOWNSTREAM FOR YOUR UNDERLYING HOLDINGS. ROMAINE: MAYBE YOU CAN TAKE YOU DOWN TO THE CONSUMER LEVEL. THE MIDTERM ELECTIONS AND THE IDEA OF BRACING OURSELVES. AN ONSLAUGHT OF ADVERTISING ONLINE OR ON TELEVISION, TALKING ABOUT INFLATION, THE HIGHER PRICE OF GOODS. I WONDER WHAT TYPE OF EFFECT THAT HAVE ON CONSUMER PSYCHOLOGY WHETHER THOSE ADS ARE TRUE OR NOT. NANCY: I DON'T THINK CONSUMER SPENDING AND GET ANY WORSE. THERE'S POSSIBILITY YOU CAN WE PESSIMISTIC ABOUT CIRCUMSTANCES BUT YOU'RE GOING TO TAKE YOUR VACATION AND WORRY ABOUT THAT LATER. INVESTORS ARE TIRING OF HIGH INFLATION AND THEY ARE TIRING OF THE RHETORIC. IT WILL BE INTERESTING TO SEE IF IT IMPROVES IT ALL OR CONTINUES TO SLIDE. INFLATION EXPECTATIONS ARE STILL PRETTY HIGH GOING OUT IN THE FIVE TO 10 YEAR AT THE UNIVERSITY OF MICHIGAN. I THINK PEOPLE ARE BRACING FOR SUSTAINED RESISTANCE FOR INFLATION JUST LIKE WE HAVE BEEN SAYING FOR THE LAST YEAR. TAYLOR: IF THE MARKET IS ALREADY PRICED AND RECESSION, BY THE TIME WE GET THERE, WITH THE MARKETS HAVE BOUGHT IT BEFORE? NANCY: INCREDIBLY NIKE -- INCREDIBLY LIKELY. WE GET MORE VOLATILITY IN JULY. WE ARE EXPECT THINGS IN THE FOURTH QUARTER WE WILL START TO SEE A RALLY CENTERED AROUND THE MIDTERMS AND SOME OPTIMISM WE MIGHT GET SOME THINGS DONE. IT TENDS TO HAVE A POSITIVE EFFECT WHEN WE GET THROUGH THAT PROCESS. THE. UP UNTIL CAN ALSO BE WEARING ON A POPULATION THAT HAS HAD ENOUGH OF LOCKDOWNS AND RHETORIC. I AM HOPEFUL WE WILL SEE SOME COOLER HEADS AND BETTER POLITICKING. I DON'T KNOW IF THAT IS THE CASE. ROMAINE: NANCY, WELL SAID. WE WILL CATCH IT WITH YOU. CEO AND CIO OF -- INVESTORS. COMING UP, WE TALK ABOUT WHAT IS GOING ON IN THE YIELD SPACE IN THE TREASURY YIELD CURVE. INTEREST RATE STRATEGISTS. THE SUPREME COURT MAY DECIDE TAYLOR: EARLIER IN THE YEAR, A LITTLE BIT POSITIVE. RIGHT NOW LOOKING AT ABOUT SIX BASIS POINTS OR SO. THIS MORNING, THE RATES MARKET UNDERPRICING RECESSION RISK. IN EARLY 2023 AND UNDERPRICING SOME OF THAT RECESSION RISK. HIGHLIGHTING THE BEST OF BLOOMBERG INTELLIGENCE AND LOOKING AT THAT YIELD CURVE, LOOKING AT THE TREASURY MARKET. LET'S BRING IN CHIEF STRATEGIST. WHAT DO YOU MAKE 10 BASIS POINTS? > > IT IS VERY FLAT. THE FED IS THINKING THE MARKET IS GOING TO HIKE. I THINK THE YIELD CURVE COULD INVERT AND PROBABLY REMAIN INVERTED FOR SOME. OF TIME. A FEW WEEKS OR A FEW MONTHS WHEN THIS IS ALL SAID AND DONE. IF INFLATION REMAINS HIGH, WITH WHAT THE ECONOMY IS DOING, THE MIGHT BE INTERESTED SHOULD AT SOME POINT IN THE NEXT 18 MONTHS. I SUSPECT WE WILL BE. FRONT IN YIELDS ARE GOING TO BE HIGHER THAN YIELDS IN THE FUTURE. ROMAINE: ROMAINE: IF WE DO GET IN THE VERSION THAT ACTUALLY SIX LONGER THAN A COUPLE OF MINUTES HERE, IS THAT AN INDICATOR? DOES IT HAVE A PREDICTIVE POWER THAT A LOT OF PEOPLE HAVE ASSIGNED TO IT? IRA: IT HAS WORKED FIVE OUT OF SIX TIMES. IT HAS BEEN A PRETTY DECENT INDICATOR. THE TWO-YEAR CURVE INVERTS, THAT IS TELLING YOU SOME LEVELS HAVE POLICY RATES REMAIN HIGH BUT THEN BE CUT IN THE FUTURE. A WAY OF SIGNALING THAT. -- A WAY OF SIGNALING THAT, IN A REASONABLE TIME RISE. IT DOESN'T NECESSARILY HAVE TO BE A VERY DEEP SLOWDOWN. IT DOESN'T HAVE TO BE 2008 OR 2020. IT CAN BE SOMETHING LIKE THE EARLY 1990'S. I MENTIONED NANCY'S EYES BEFORE THAT YOU CAN HAVE A SLOWDOWN, A TECHNICAL RECESSION BUT IT DOESN'T HAVE TO BE PARTICULARLY DEEP IN ORDER FOR THE YIELD CURVE TO STEEPEN OUT VERY SIGNIFICANTLY AS THE FEDERAL RESERVE STARTS TO CUT INTEREST RATES AND PRICED INTO THOSE. WE ARE ONLY PRICING IN A COUPLE OF CUTS. WHAT HAPPENS IF WE PRICED IN 150 BASIS POINTS INSTEAD OF 50 OR 75. THAT IS WHERE YOU GET A STEEPENING OF THE YIELD CURVE. KATIE: HOW DO WE GET THERE? THE FIFTH SLIDE SAYS THE FED MAY NOT GET MORE HAWKISH. WALK US TO THAT CALL AND WHAT GETS US TO MAY BE PRICING IN MORE CUTS FOR THE FED. IRA: THE ISSUE WITH THE FED RESERVE NOW IS IT IS GOING TO BE HARD FOR THEM TO GET MORE HAWKISH. HOW DO YOU GET MORE HAWKISH WITH A 75 POINT INTEREST RATE? WE ONLY HAD ONE BEFORE THIS FAST MEETING. THE FED WILL REMAIN HAWKISH UNTIL IT IS VERY CLEAR THAT THE INFLATION RATE IS COMING DOWN AND AS THAT OCCURS IN THE FED REMAINS HAWKISH FOR A LITTLE LONGER THAN THE MARKET IS CURRENTLY EXPECTING, THAT IS WHEN YOU CAN GET A REALLY SIGNIFICANT YIELD CURVE. WHEN YOU GO BACK TO PERIODS IN THE 1990'S AND 1980'S, WE HAD YIELD CURVE INVERTED 50 BASIS POINTS AS THE FED WAS TRYING TO FIGHT INFLATION BACK THEN. IT WASN'T LIKE THE MERCHANT IN THE EARLY TO THROW THAT LASTED A LONG TIME IT WAS ACTUALLY VERY SHALLOW. TWO-YEAR YIELDS ARE UP AND SENIOR YIELDS THEY WERE THEY ARE. ROMAINE: GREYSTONE HAS A NEW CEO. A SURPRISE DEPARTURE FROM PUBLIC BANK DISRUPTED THE LONDON SUCCESSION EARLIER THIS YEAR. GREYSTONE IS A COMMERCIAL PROPERTY LENDER EXPANDING INTO WEALTH MANAGEMENT AND PRIVATE BANKING. SHE SPOKE WITH BLOOMBERG'S -- FOUNDER AND CEO ABOUT HANDLING RISK FACTOR. > > IT DIDN'T SEEM AS -- FROM MY PERSPECTIVE. INCREDIBLE THOUGHT WENT INTO IT OVER TIME. I AM INCREDIBLY PROUD OVER MY TRACK RECORD. THE RELATIONSHIPS I BUILT, IT WAS TIME FOR A CHANGE AND FOR A NEW CHALLENGE. A PLATFORM WHERE I CAN UTILIZE ALL MY SKILL SET IN BANKING, PRIVATE EQUITY AND FUND MANAGEMENT AND GETTING TO KNOW GREYSTONE, I AM VERY EXCITED TO GET TO KNOW GREYSTONE. > > DO YOU THINK YOU WERE LIMITED IN ANY WAY? > > WE HAVE ACHIEVED A TON OVER THE YEARS. I HAVE HAD TONS OF EXPERIENCE WITH OUR FOUNDER. A LOT OF EMPOWERMENT WAS AMAZING, TRUSTED ADVISORS. GREYSTONE NOW WITH REAL ESTATE BUSINESS AND FURTHER EXPANSION PLANS, THERE WILL BE A LOT MORE OPPORTUNITIES FOR GROWTH. > > IT IS A TRICKY TIME TO LEAD A FINANCE COMPANY GIVEN THE OVERALL FINANCIAL ENVIRONMENT. I KNOW IT GOES SACKS REPUBLIC YOU FOCUS A LOT OF RISK MANAGEMENT. FROM WHERE YOU SIT RIGHT NOW, WHAT IS YOUR SINGLE BIGGEST RISK WHEN YOU TAKE ON THIS ROLE OFFICIALLY IN 2022? > > FOR RETAIL INVESTORS, IT IS REALLY IMPORTANT TO FOCUS ON CASH FLOW. LIQUIDITY IS NOT THE SAME. WE KNOW THAT FROM PAST HISTORY. WHEN WE LOOK AT THE REAL ESTATE, IT IS A SIGNIFICANT BUSINESS GOING THROUGH RIGHT NOW BUT THERE ARE A LOT OF GREAT DEALS AT THE SAME TIME WITH SUPPLY CONSTRAINTS. MILLENNIALS BEING FIRST TIME HOMEBUYERS. EXTREMELY TIGHT LABOR MARKETS. AND SEEING A MUCH HEALTHIER HOUSEHOLD BALANCE SHEET. THERE ARE ALL SORTS OF TIMES LIMITING THE MARKET. A LOT OF THE COMPETITORS ACTUALLY GO HOT OR COLD. THIS IS A GREAT FOR A FINANCIAL ORGANIZATION AND A STRONG FINANCIAL POSITION TO WARM IN THE MORNING. IT IS A TIME TO BRING GREAT OPPORTUNITIES AND REAL ESTATE ANYONE. > > WHAT DO YOU SEE PLAYING OUT IN YOUR SPRAYS? COULD WE SEE LAYOFFS OR REASSIGNMENT OF PEOPLE? > > HOME PRICE ACTIVITY TO 1994 AROUND THAT TIME. IT ALSO LEADS ITSELF TO OPPORTUNITIES. IT LEADS ITSELF TO BEING ABLE TO SERVE YOUR EXISTING CLIENTS IN TIMES WHEN THEY ARE UNCERTAIN. AND HAVING THE GOOD FUNDING I AM MARK CRUMPTON. THIS IS BLOOMBERG. ROMAINE: THIS IS "BLOOMBERG MARKETS: EUROPEAN CLOSE -- THIS IS "BLOOMBERG MARKETS: THE CLOSE." UP ABOUT 1.6% ON THE DAY, ALSO SEEING A STRONG REBOUND IN A LOT OF THE INDUSTRIAL METALS AND BASE METALS, COPPER UP ONLY ABOUT .4%. YOU TAKE A LOOK AT TRADING OVER IN LONDON, 12% HERE ON THE DAY, AND A LOT OF THAT HAS TO DO WITH SOME OF THE SIGNALS COMING OUT OF THE CHINESE ECONOMY, THE REOPENING THERE IN THE IDEA THAT THERE APPETITES FOR SOME OF THOSE METALS SHOULD START TO INCREASE. MEANWHILE, SOFT AGRICULTURE PRODUCTS WILL BE LOWER, CORN FUTURES DOWN ABOUT 3%, LARGELY DUE TO WEATHER CONCERNS HERE IN THE NORTHERN HEMISPHERE, TAYLOR. TAYLOR: OF COURSE WE ARE SPEAKING ON THE THEME OF SORT OF INFLATIONARY ISSUES, SWITCHING ON OVER TO THE EPA NOW. THIS WEEK, OF COURSE, THE SUPREME COURT DECISION, MAYBE BY WEDNESDAY WE WILL HEAR FROM THE SUPREME COURT, AND THEY MAY BE EXPECTED TO RULE ON THE ENVIRONMENTAL CASE WHICH COULD BE A BIG WIN FOR COAL PLANTS, TO RESTRICT THE EPA'S EFFORTS TO REDUCE GREENHOUSE GAS EMISSIONS. JOINING US NOW IS OUR GUEST FROM BLOOMBERG LAW. THEY BLOCKED A 2016 ISSUE, WHICH WAS RAISED UNDER THE OBAMA ADMINISTRATION, NOW LOOKING AT THE BIDEN ADMINISTRATION, ANOTHER RULING FROM THE SUPREME COURT AS WELL, RIGHT? WHAT ARE THEY LOOKING FOR? > > THIS REALLY CENTERS ON THE EPA'S ABILITY TO REGULATE GREENHOUSE GAS EMISSIONS AND WE ARE ESPECIALLY TALKING ABOUT THE COAL INDUSTRY AND OTHER INDUSTRIES IN THE SECTOR. ROMAINE: LET'S TALK A LITTLE BIT ABOUT THE BROADER, RAMIFICATIONS HERE, MAYA, A LOT OF PEOPLE LOOK AND SAY THIS WILL HAVE AN IMPACT ON NOT ONLY THE EPA'S ABILITY TO HAVE BROAD-BASED, INDISCRIMINATE TYPE, BUT THAT COULD HAVE A SPILLOVER TO OTHER AGENCIES AS WELL. MAYA: YES, IT COULD. IN THE SHORT-TERM, WHAT WE ARE TALKING ABOUT IS THE INDUSTRY ARGUMENT THAT THEY WOULD LIKE TO NOT HAVE TO FOLLOW THESE REGULATIONS AND WOULD LIKE TO SAVE MONEY AND POSSIBLY AVOID SHUTTING DOWN PLANTS. IN THE LONG TERM, WHAT WE ARE TALKING ABOUT IS THE EPA'S ABILITY TO REGULATE AND WHAT KIND OF POWERS IT HAS AS FAR AS IS IT SOMETHING THAT CONGRESS HAS TO SPECIFICALLY STATE THAT IT HAS TO LEGISLATE, OR IS IT SOMETHING THAT THE EPA CAN CONTINUE TO REGULATE UNDER THE CLEAN AIR ACT BOUNDS? AND SO WHAT WE ARE SEEING IS THAT RULING IN THIS CASE COULD MEAN THAT THE EPA, WHEN IT -- WHEN THE BIDEN ADMINISTRATION COMES UP WITH ITS OWN REGULATION IS THAT IT HAS TO BE FOLLOWED, OR CONGRESS HAS TO SET LIMITATIONS FOR IT TO FOLLOW, AND SO THIS ARGUMENT COULD BE, AS WE CAN SEE IN OTHER CASES, WHERE IF CONGRESS DOES NOT HAVE THIS LIMITATION OR THESE SPECIFIC BOUNDS PLACE FOR ITS REGULATION, THEN THE EPA MAY OR MAY NOT BE ABLE TO IMPLEMENT REGULATIONS IN A CERTAIN WAY. TAYLOR: YOU BROUGHT UP COAL PLANTS. I AM CURIOUS, WHAT COULD THIS RULING POTENTIALLY MEAN FOR THEM, IN ADDITION TO THE EPA? MAYA: YEAH, SO, AGAIN, IN THE SHORT-TERM, THIS IS TALKING ABOUT SAVING MONEY AND AVOIDING TO FOLLOW CERTAIN MEDICATIONS. SO, FOR EXAMPLE, IF THE EPA SAYS WE HAVE NEW REGULATIONS TO LOWER GREENHOUSE GAS EMISSIONS, AND YOU HAVE TO FOLLOW CERTAIN LIMITATIONS, OR YOU HAVE TO DO CERTAIN THINGS TO HELP LOWER EMISSIONS, THEN, FOR THE COAL INDUSTRY, FOR THESE PLANTS, THIS MAN'S, YOU KNOW, SPENDING MONEY -- MEANS, YOU KNOW, SPENDING MONEY TO MITIGATE, AND A LOT OF CASES, THEY ARE FACING FINANCIAL HARDSHIP, AND THIS INCREASING BURDEN MEANS THEY COULD BE FORCED TO SHUT DOWN THE PLANTS. ROMAINE: ALL RIGHT, MEIER EARLS OF BLOOMBERG LAW, AN EYE -- MAYA EARLS OF BLOOMBERG LAW, KEEPING AN EYE ON THE COURT. GOING BACK TO THE STOCKS, COINED COINBASE DOWN. WE WILL HAVE MORE ON THAT IN JUST A BIT. THIS IS BLOOMBERG. ♪ ROMAINE: ALL RIGHT, TIME FOR OUR TOP CALLS, A LOOK AT SOME OF THE BIG MOVERS. FIRST UP, CRACKER BARREL. THE PRICE TARGET DOWN FROM $1.08 , WITH THE RESTAURANT CHAIN SAYING IT WILL STRUGGLE FINANCIALLY AS CUSTOMERS DEAL WITH INFLATIONARY PRESSURES, DOWN ABOUT 2% ON THE DAY. ETSY CUTS A HOLD FROM BUY. ANALYSTS SAY THE DISCRETIONARY NATURE OF THE ETSY BUSINESS MODEL IS AT RISK, AND SHE SAYS ELEVATED INVENTORY ACROSS RETAIL COULD MAKE ETSY'S VALUE PROPOSITION LESS APPEALING AS BIG RETAILERS OFFER BETTER DISCOUNTS. BED, BATH & BEYOND DOWNGRADED TO NEUTRAL. PRICE TARGET NOW JUST SEVEN DOLLARS WITH THE ANALYSTS SAYING IT IS CONTINUING, A LOT OF SUPPLY CHAIN ISSUES CONTINUE TO CRIME SALES. SHARES OF BED BATH & BEYOND DOWN 2% ON THE DAY. TAYLOR: I LIKE THE RETAIL SEEING TOP CALLS. WE DO A TRIPLE TAKE ON THE DEFLATIONARY NATURE OF SOME OF THE OVER INVENTORY, AND THAT IS WHERE WE WANT TO GO NEXT AS WE CONTINUE TO SEE THAT BIG PILEUP OF GOODS, SOME OF THE BIG-NAME RETAILERS. IT IS GAINING SOME CONCERNS ABOUT THE ECONOMY AND THE RISK OF SOME OF THE OVERHANG, MAY BE THE DEFLATIONARY FORCES THAT FOLLOW. FOR NOW, THOUGH, SOLID DEMAND HELPING STEM SOME OF THAT ANXIETY. HERE TO EXPLAIN, BLOOMBERG'S EDITOR OF THE U.S. ECONOMY, ALEX, I'M CURIOUS WHAT YOU ARE HEARING OVER HOW MUCH OVERHANG THERE IS OUT THERE AND THE DEFLATIONARY STORY THAT FOLLOWS THAT. ALEX: WE ARE LOOKING AT OVERHANGS IN THE RETAIL SECTOR. WE HAD SEEN SOME BIG NAMES THAT HAVE TOO MUCH INVENTORY, BUT WE HAVE NOT REALLY SEEN IT MORE BROADLY, WHICH IS A GOOD THING. SO FAR, IT LOOKS LIKE THE INCREASED INVENTORY WAS FROM A VERY, VERY LOW LEVEL, SO NOW IT IS MOVING BACK TO WHERE WE WERE, WHERE THE TREND SHOULD BE. ROMAINE: LET'S TALK MORE ABOUT THE INVENTORY RATIO, BECAUSE A LOT OF PEOPLE ON THE HISTORICAL LEVEL ARE TAKING A LOOK AT HOW IT COMPARES, AND THE GENERAL SENSE HERE IS THAT, WHEN YOU LOOK AT AS A PERCENTAGE, IT IS NOT NECESSARILY AS BAD. AND I AM WONDERING IF THE DATA, FIRST, IS THAT OUT, AND IF SO, IS THAT SOMETHING INVESTORS CAN TAKE A LITTLE MORE CONFIDENCE IN IAGO ALEXANDRE: THAT IS EXACTLY RIGHT. IF YOU LOOK AT A LONGER TERM PERIOD, SOAY, 10 YEARS, IN AN UNCOMFORTABLE POSITION, AND ALSO, IF YOU THINK ABOUT IT, 10 YEARS AGO, WE HAD A LOT MORE INVENTORY, THE SUPPLY CHAINS WERE MUCH MORE FLUID. TODAY, MANY RETAILERS, MANY FIRMS WERE MUCH MORE DEFENSIVE ABOUT THEIR STOCK. THEY NEED TO HAVE MATERIALS ON HAND. WE PROBABLY WILL SEE HIGHER INVENTORIES RISE UP, SO THERE WILL BE A MUCH HIGHER LEVEL OVERALL, GOING FORWARD. TAYLOR: THAT IS PART OF WHAT I WANT TO BUILD ON, THIS INVENTORY BUILDUP. IS THIS JUST A STORY FOR THE RETAIL SECTOR, OR IS IT OTHER AS WELL? ALEXANDRE: IT IS IMPORTANT FOR EVERY SECTOR, BUT MOST VISIBLE IN THE RETAIL SECTOR, IN GOODS, FASHIONABLE GOODS, STUFF THAT YOU MIGHT SEE IN DEPARTMENT STORES. THAT IS WHERE IT IS MOST VISIBLE, BUT IT IS IMPORTANT ACROSS THE BOARD. TAYLOR: I WANT TO BRING YOU A TWEET FROM MICHAEL OVER AT SKY CION, TALKING ABOUT THE INVENTORY, THE DEFLATIONARY OVERHANG FROM BACK. HE SAID -- FROM THAT. HE SAID THAT WILL LEAD TO LOWER DISINFLATIONARY THIS YEAR, IF THE FED REVERSES ITSELF ON RATES AND QT. DO YOU SEE THAT CYCLE THROUGH THE MARKET? ALEXANDRE: YOU CAN. THERE IS AN ONLINE RETAIL INVESTOR THAT IS VERY UP-TO-DATE. SOMEBODY SELLING HALF OF THE GOODS THEY TRACK OUR FALLING MONTH OVER MONTH, SO WE ARE SEEING SOME PRICES COME BACK IN A BIT. ROMAINE: ALL RIGHT, WELL, THIS IS GREAT DATA, AND ALEX GIVES US A LITTLE MORE INSIGHT INTO HOW MUCH ECONOMIC CONDITIONS CAN WITHSTAND WHATEVER WE ARE GOING TO GET OUT OF THE UPDATE, BLOOMBERG'S ALEX TANZI, REALLY CRUNCHING ALL THE NUMBERS. THE BIGGEST DECLINER RIGHT NOW IS COINBASE, GOLDMAN SACHS DEGRADING BECAUSE THERE IS CONCERN OVER WHETHER CRYPTO TRADING OVER A HOLD. WE HAVE KRITI GUPTA JOINING US NOW COULD WHAT DO WE KNOW? KRITI: A 75% DECLINE IN THE STOCK. THAT IS NOT ENOUGH. IT IS GOING TO SELL EVEN FURTHER. A DOWNDRAFT IN CRYPTO, THAT MAKES SENSE. COMPANIES LIKE MICROSTRATEGY, ROBINHOOD, COINBASE, THEY ARE ALL GOING TO KIND OF FOLLOW, BUT COINBASE IS REALLY INTERESTING HERE, BECAUSE WE KNOW THAT WINE BASE HAS A MASSIVE RETAIL PLATFORM, A MASSIVE RETAIL USER BASE, AND THAT IS WHERE IT SHOWS SOME CONCERN. SOME OF THE RETAIL BASE HERE, THERE ARE NOT THAT MANY PEOPLE IN THE MARKETS, NOT THAT MUCH PRECIPITATION -- PARTICIPATION IN THE CONCERN IS HOW MUCH YOU MAKE UP FOR SOME OF THE LOSSES WE ARE SEEING. COINBASE HAS TO MAKE UP FOR IT. KATIE: YOU COULD ALMOST ASK WHAT TOOK THEM SO LONG, BUT I DON'T THINK YOU CAN ANSWER THAT. IT IS NOT JUST GOLDMAN, THOUGH, BECAUSE IF YOU LOOK ACROSS WALL STREET, THEY ARE STILL FAIRLY BULLISH ON COINBASE. KRITI: STILL FAIRLY BULLISH. THE SAME TO YOU GOT THIS MASSIVE DECLINE FROM GOLDMAN SACHS ON COINBASE, YOU ACTUALLY GOT AN UPGRADE ON ROBINHOOD, I THINK 60% OF ROBINHOOD USER BASE, VOLUME ACTUALLY TRADE CRYPTO, SO THAT MAKES ROBINHOOD WAY MORE EXPOSED TO CRYPTO THAN ANY OTHER ASSET CLASS, FOR EXAMPLE, SO THIS IS INTERESTING, BECAUSE THEY KIND OF FLIPPED IT. THE INTERESTING THING ABOUT THE ROBINHOOD STORY, NOT TO DIVERGE TOO MUCH, IS THOSE SOLD OFF TOO MUCH. IF YOU COMPARED TO WHAT THE ANALYSTS ARE SAYING ACROSS THE STREET, 20 BUY HOLDINGS, -- RATINGS, SIX HOLD RATINGS, AND FIVE SELL RATINGS. THE POINT IS, VERY BULLISH, AND A LOT OF IT HAS TO COME FROM THE BULLISH ON CRYPTO. MAYBE IT IS OVERDONE. KATIE: WE HAVE SEEN IT LOOKS HESITANT TO REVISE DOWN WITH A LOT OF DIFFERENT PARTINGS, AND COINBASE MAYBE ONE OF THEM. KRITI GUPTA, OF COURSE. TAYLOR: ROMAIN, I KNOW KATIE IS DESPERATE TO TALK ABOUT COINBASE PETE I WANT TO QUICKLY CIRCLE BACK WITH INVENTORY. CNN WAS DOING THIS REPORT AND HOW RETAILERS, INSTEAD OF RETURNING ITEMS, THEY DON'T WANT THE GOODS, ARE ACTUALLY JUST GOING TO LET YOU KEEP THEM. YOU HAVE THAT GREAT TRIPLE TAKE, DEFLATIONARY FORCES, VERY CURIOUS TO SEE HOW THE END OF THIS YEAR STARTS TO KEEP UP WHEN IT COMES TO THAT. ROMAINE: BUT I ALSO THINK EVERYONE SORT OF LOOKS AT THAT RATIO, BUT WE HAVE ALREADY SEEN THE DISCOUNT. TARGET HAS ALREADY ANNOUNCED SOME PRETTY STEEP SALES. WE KNOW THEY HAVE AN INVENTORY PROBLEM, BUT IS THAT ISSUE JUST A TARGET OR A BROADER RETAILER? KATIE: DO YOU KNOW HOW TO CALCULATE INVENTORY DAYS ON HAND? ROMAINE: I DO, ACTUALLY. KATIE: LEVEL TWO! TAYLOR: I AM A LEVEL ZERO. [LAUGHTER] KATIE: INVENTORY TO SALES RATIO, WHICH IS FINE. ROMAINE: WE HAVE A COMMERCIAL BREAK COMING UP. ONE OF THE HOTTEST ECONOMIES COMING UP IN THE UNITED STATES, TALKING ABOUT ATLANTA. A GREAT STORY ON THE FROM BLOOMBERG WORLD HEADQUARTERS IN NEW YORK TERMINAL -- A GREAT STORY ON THE BLOOMBERG TERMINAL TODAY. WE WILL BE BACK IN A MOMENT. THIS IS BLOOMBERG. ROMAINE: TURNING NOW TO OUR BLOOMBERG EQUALITY SEGMENT, AND A FOCUS ON MUNICIPAL FINANCE. MUNICIPAL FINANCE ACROSS THE UNITES STATES, DETERIORATED IN OTHER COUNTRIES, BUT ATLANTA IS COMING OUT OF THE OTHER SIDE WITH A BRIGHT SPOT. BASED ON 10 ECONOMIC CRITERIA. JOINING US NOW TO BREAK IT DOWN IS MATT WINKLER, OUR EDITOR-IN-CHIEF EMERITUS AT BLOOMBERG NEWS. MATT, A GREAT STORY HERE ON THE BLOOMBERG TERMINAL ABOUT ATLANTA. I THINK ANYONE WHO HAS BEEN DOWN THERE AND SEEN THE CITY RECENTLY COMPARES IT TO WHAT IT WAS SOME DECADES AGO, YOU CAN SEE THE TRANSFORMATION, YOU CAN SEE WHAT IT HAS BECOME. WHAT GOT US THERE? WHAT WAS THE SECRET SAUCE? MATT: GREAT TO BE WITH YOU. I HAVE TO SAY IT GOES ALL THE WAY BACK TO 1974. MAYNARD JACKSON WAS THE FIRST BLACK MAYOR OF ANY CITY OF SIGNIFICANCE IN THE SOUTH, AND HE HAD TWO INITIATIVES THAT YOU COULD SAY STOOD THE TEST OF TIME. ONE, MASSIVE PUBLIC WORKS, WHICH RESULTED IN THE UPGRADE OF THE ATLANTA HARTFIELD AIRPORT, ACTUALLY JACKSON AIRPORT, BECAUSE IT WAS RENAMED AFTER HIM. THE BUSIEST AIRPORT IN THE WORLD. HE ACTUALLY INITIATED THE RAIL LINE THAT RUNS FROM ONE END OF ATLANTA TO THE OTHER, AND THAT WAS A MAJOR TRANSFORMATIONAL MOMENT FOR ATLANTA. THE SECOND THING WAS HE SAID THE ATLANTA WORKFORCE IS GOING TO BE 30%, AT LEAST, THE PEOPLE WHO LIVE HERE, WHICH WAS BLACK, AND THAT HAS CONTINUED WITH EVERY SINGLE MAYOR RIGHT THROUGH ANDRE DICKENS, WHO IS NOW MAYOR, NEWLY ELECTED MAYOR OF ATLANTA. SO IT STARTS WITH PUBLIC WORKS, IF YOU LIKE, AND IT IS ALSO ABOUT DIVERSITY. AND ATLANTA'S DIVERSITY IS ABOUT NO OTHER CITY, ACTUALLY. TAYLOR: WHAT ABOUT ECONOMICS? ONE OF MY FAVORITE QUOTES OF THE STORY WAS IF YOU HAD A TRANSPLANT FROM WASHINGTON OR SAN FRANCISCO, MAKING 150,000 DOLLARS, AND YOU MOVED TO ATLANTA, WHERE SOME OF THESE PEOPLE MAKE $18 AN HOUR -- $15 AN HOUR, THAT UPSETS ECOSYSTEM. HOW DO YOU RESOLVE THAT PROBLEM? MATT: WELL, IF YOU ARE MAYOR DICKENS, YOU SAY TO THE CEO OF MICROSOFT, LOOK YOU CANNOT JUST BRING THESE PEOPLE CARE. THIS IS ALL ABOUT HIRING PEOPLE, AND ATLANTA HAS A POOL OF TALENT, AND REMEMBER, ATLANTA IS THE HOME OF TECH STARS AND IT IS ALSO THE HOME OF HOME DEPOT, DELTA AIRLINES, GEORGIA-PACIFIC. IT HAS ACTUALLY A VERY SKILLED, HIGHLY SKILLED WORKFORCE. IT IS ALSO THE HOME OF SOME OF THE BEST UNIVERSITIES IN THE COUNTRY. SO WHEN YOU PUT THAT ALTOGETHER, ATLANTA ACTUALLY HAS THE PEOPLE THAT CAN DO WHATEVER YOU NEED TO DO. KATIE: SO YOU RIGHT IN THE PEACE IT IS CALLED SILICON PEACH BY SOME PEOPLE, FOR THAT REASON, THAT YOU HAVE A LOT OF TECH STARS, A HOME DEPOT, LIKE YOU MENTION. IS ATLANTA TRYING TO ENTICE MORE TALENT, MORE CORPORATIONS TO BASE THEIR HEADQUARTERS OUT OF ATLANTA VERSUS MAYBE SOME OF THE MORE COMMON HUBS? MATT: I'M NOT SURE THAT ATLANTA HAS TO, ALTHOUGH I WOULD SAY MAYOR DICKENS PROBABLY NEVER MET A CEO HE DID NOT LIKE, BUT THAT IS TYPICAL FOR MAYORS THESE DAYS. THEY ARE CONSTANTLY COURTING BUSINESS. WHAT ATLANTA HAS GOING FOR IT IS THE SENSE THAT OF ALL THE CITIES IN THE UNITED STATES, THIS ONE REALLY HAS BEEN COMMITTED TO DIVERSITY. AND YOU SEE THAT ANYTIME YOU ARE THERE IN MYRIAD WAYS, SMALL BUSINESS AND BIG BUSINESS ALIKE, PEOPLE HAVE BOUGHT INTO THAT. AND IT IS A REALLY GOOD STORY IN THE SENSE THAT, IN THESE TIMES OF POLARIZED POLITICS, GUESS WHICH CITY, YOU KNOW, IS OUTPERFORMING EVERY OTHER, AS YOU SAID, BY ALL THE MEASURES WE HAVE AT BLOOMBERG ON CREDIT? THEIR LIABILITIES ARE GOING DOWN, THE PERSONAL INCOME IS GOING UP, THEIR TAX RECEIPTS ARE GOING UP, AND GUESS WHAT? IT SHOWS THAT DIVERSITY IS A REALLY WINNING, IF YOU LIKE, BUSINESS PROPOSITION, AND THAT IS WHY ATLANTA IS ON TOP. ROMAINE: AS YOU MENTION, OF COURSE, I AM WONDERING IN THE CURRENT CLIMATE WE ARE IN NOW, DO YOU SEE OTHER MAJOR CITIES BEING ABLE TO KIND OF REPLICATE THAT? MATT: WELL, YEAH. I MEAN, LOOK, LOS ANGELES PROBABLY IS THE MOST DIVERSE CITY, BECAUSE OF ITS SIZE AND EVERYTHING ELSE. NEW YORK IS RIGHT THERE WITH IT. BOSTON IS MAYBE LESS DIVERSE BUT EVERY BIT AS DYNAMIC. SO YOU DO HAVE CITIES THAT ARE GENERALLY DOING VERY WELL, AND THEY ARE DOING WELL BECAUSE THEY NOT ONLY HAVE A DIVERSE POPULATION, WHICH IS VERY IMPORTANT, BUT THEY HAVE A VERY DIVERSE MIX OF BUSINESS, AND THAT IS WHAT THEY ALL HAVE IN COMMON. ROMAINE: ALL RIGHT, MATT, ALWAYS GREAT TO CATCH UP WITH YOU. THAT IS MATT WINKLER. H IS,, OF COURSE,-- HE IS, OF COURSE, BLOOMBERG EDITOR-IN-CHIEF EMERITUS. OBVIOUSLY A LOT OF EFFORTS, BOTH IN TERMS OF PUBLIC AND PRIVATE, BUILT-IN. THIS IS PART OF OUR BLOOMBERG EQUALITY SEGMENT. WE SHOULD POINT OUT WE HAVE A SPECIAL EQUALITY SHOW THAT HAS BEEN RUNNING ALL MONTH LONG, HE DARES EVERY THURSDAY AT 1:00 P.M. NEW YORK TIME. WE WILL HAVE A CLOSER LOOK AT ECONOMIC RAMIFICATIONS OF THE FALLOUT FROM THE ROE V. WADE DECISION. AS WE GET READY TO RESET, A COUNT YOU DOWN TO THE CLOSING BELL, ABOUT AN HOUR TO GO IN THE TRADING DAY. TAYLOR: SIGNIFICANTLY HIGHER, KATIE, ON THE FRONT END OF THE YIELD CURVE THAT WE HAVE. KATIE: AND TECH UNDERPERFORMING AS A RESULT. > > COUNT DOWN TO THE CLOSE STARTS RIGHT NOW. ROMAINE: ROMAINE BOSTICK HERE, TAYLOR RIGGS, KATIE GREIFELD WE ARE JOINED NOW BY CAROL MASSAR AND TIM STENOVEC. WE WELCOME OUR AUDIENCES, A CHECK IN ON THE MARKETS. FIRST, SOME BREAKING NEWS THE BLOOMBERG WIRE. THE CRYPTO EXCHANGE IS SAID TO BE SEEKING A PATH FOR A ROBINHOOD DEAL. REMEMBER, IT WAS JUST A FEW WEEKS AGO THAT WE LIKE ONE OF HIS INVESTMENT VEHICLES HAD TAKEN A STAKE IN ROBINHOOD. ROBINHOOD SHARES ARE HALTED RIGHT NOW. BLOOMBERG REPORTERS, SPEAKING TO PEOPLE FAMILIAR WITH THE MATTER, ARE SAYING THAT THEY ARE DELIBERATING INTERNALLY ON HOW TO BUY ROBINHOOD. TAYLOR: YOU HAVE BEEN ALL OVER THE STORY COULD WE WERE SORT OF JOKING ABOUT ELON MUSK IN A PASSIVE STAKE IN TWITTER, A SIMILAR PASSIVE STAKE IN ROBINHOOD. AND SHARES ARE HALTED RIGHT NOW, BUT BEFORE THEY WERE HALTED, ROBINHOOD SPIKING, UP 12% ON THE DAY, IN THIS STOCK, IT FELL 50% YEAR-TO-DATE. IT WILL BE REALLY INTERESTING TO SEE HOW -- ROMAINE: WE SHOULD POINT OUT, TOO, WHEN HE TOOK THAT STEAK COME HIS PERSONAL FUND TOOK THAT STAKE, AND A LOT OF PEOPLE TALKED ABOUT HOW THIS COULD BE A GOOD TIP, WHETHER THAT WAS A GOOD CASE OR NOT REMAINS TO BE THE SCENE. TIM, GREAT TO SEE YOU. GOOD TO HAVE CAROL MASSAR BACK AS WELL, BACK IN THE SADDLE. CAROL: IT IS GOOD TO BE BACK. WE HAVE HAD A LOT OF CONVERSATIONS. I KNOW YOU' ALL HAVE AS WELL. YOU WILL SEE CONSOLIDATION, CHANGES, COMPANIES GETTING TOGETHER TO FIGURE OUT WHAT IS THE PATHWAY FORWARD. TIM: WHAT IS NOTABLE, TOO, IS IT KIND OF EMERGES AS STABLE FOR COMPANIES THAT HAVE BEEN AFFECTED BY THIS CRYPTO WINTER. FTX HAS HAD TROUBLE RAISING OUT OF ITS LOFTY VALUATION IN HIS LATE -- ITS LATEST ROUND OF FUNDING. ROMAINE: MOST OF THEM ARE STILL IN THE RED BUT ALSO LOWS OF THE DAY, THE WILD SPECULATION WILL BEGIN. WE WANT TO GET YOU CAUGHT UP ON THE BROADER MARKETS, WHETHER IT IS REBALANCING, ECONOMIC CONDITIONS WE HAVE BEEN ALL OVER THE MAP, HIGHER AND LOWER. RIGHT NOW, THE S & P IS DOWN ABOUT .3% PURE THAT IS PRETTY MUCH THE STORY ACROSS THE BOARD. THE NASDAQ COMPOSITE DOWN .7%. THE BIG OUTLIER IS THE RUSSELL 2000, WHICH IS A BIT HIGHER. TAYLOR: AS WE LOOK UNDER THE HOOD, THE RUNAWAY WINNER ALL YEAR, AND TODAY. THE ENERGY SECTOR UP ABOUT 2.5 PERCENT, UTILITIES AND HEALTH CARE IN THE GREEN. COMMUNICATION SERVICES, CONSUMER DISCRETIONARY, MATERIALS ALL AHEAD OF SOME DATA WE ARE GOING TO GET LATER THIS WEEK. ROMAINE: AND A LOT OF PEOPLE ARE TRYING TO PARSE THE ECONOMIC TEA LEAVES AS WE CLOSE OUT THE FIRST HALF OF THE YEAR AND MOVING TO THE SECOND HALF. SOME OF THOSE BIG CAP TECH STOPS HAD TO GET IN THE BID A LITTLE BIT EARLIER, NOW BASICALLY FLAT ON THE DAY. APPLE DOWN .2%. MEANWHILE, A LOT OF THE BIG SOFTWARE COMPANIES HAVE BEEN MOVING MEANINGFULLY LOWER. SALESFORCE DOWN ABOUT 2.5%. HOMEBUILDER STILL HOLDING THEIR OWN, KB HOMES, THE LARGEST STRETCH WE HAVE SEEN FOR THE HOMEBUILDERS GOING BACK TO THE END OF FEBRUARY, BEGINNING OF MARCH. KEEP AN EYE ON BOEING. INTERESTING NEWS CROSSING EARLIER OUT OF THE REPORT REGARDING POTENTIAL ADDITIONAL PROBLEMS WITH THE 737 MAX. BOEING SHARES DOWN 2.5%. TAYLOR: APPLE AND SALESFORCE LEADS ME TO THE CONVERSATION ABOUT MULTIPLES, REMAINED ON THE TV SIDE, YOU GUYS HAVE BEEN TALKING ABOUT WHAT HIGHER RATES MEAN FOR MULTIPLE. THE BROADER S & P 500, ALSO LOOKING AT PRICE, NOT YIELD, OF THE FED FUND FUTURES. AS THAT GOES DOWN, THE YIELDS GO UP, A LOT OF THESE MULTIPLES GO DOWN. WE'VE HEARD A LOT OF COMMENTARY FROM STRATEGISTS TODAY, ROMAINE, ABOUT A BOTTOMING OUT, LOWER E TO GET A FARTHER FALLOUT HERE. ROMAINE: THAT BREAKING NEWS A LITTLE WHILE AGO, THE FTX CRYPTO EXCHANGE EXPLORING WHETHER IT MIGHT BE ABLE TO ACQUIRE ROBINHOOD. ROBINHOOD SHARES CLOSELY HELD. THIS IS ALL ACCORDING TO PEOPLE FAMILIAR WITH THE MATTER. ONE OF THE REPORTERS ON THAT STORY JOINING US RIGHT NOW. AND A MOSQUE, WHAT DO WE KNOW? -- ANNIE MOSS, WHAT DO WE KNOW? ANNIE: POTENTIALLY SEEKING A PATH FORWARD FOR A DEAL WITH ROBINHOOD, WE KNOW LAST MONTH, THE CEO OF FTX ALREADY TOOK MORE THAN A 7% STAKE IN ROBINHOOD, SO THIS WOULD ADVANCE, OBVIOUSLY, THAT RELATIONSHIP BETWEEN THE TWO COMPANIES. CAROL: ANNIE, IN YOUR REPORTING, THERE IS A STATEMENT THAT SAID THERE ARE NO ACTIVE MNA CONVERSATIONS WITH ROBINHOOD, SO HOW ARE WE SUPPOSED TO READ THAT? ANNIE: THAT IS RIGHT. TO BE CLEAR, FTX HAS HAD ITS OWN INTERNAL DELIBERATIONS, THOSE SAM BANKMAN-FRIED HAD SAID THERE WERE NO DECISIONS. THERE ARE CONSIDERATIONS, THOUGH, LIKE THE SUPER MAJORITY THAT BRAD AND OTHERS HAD OVER AT ROBINHOOD, SO THERE ARE SOME CONSIDERATIONS THAT FTX WOULD HAVE TO ACCOUNT FOR. TAYLOR: IS THIS. EVALUATION, GIVEN THE MASSIVE AMOUNTS THAT ROBINHOOD HAS SEEN? ANNIE: THEY HAVE SEEN A DRAMATIC SELLOFF IN SHARES. UNTIL TODAY, THEY HAVE BEEN DOWN MORE THAN 75% SINCE THEIR IPO. SO THERE HAS BEEN A LOT OF TEST FOOTAGE OUT THERE ABOUT WHAT ROBINHOOD WOULD DO, WHETHER IT WOULD PURSUE SOME KIND OF DEAL. IT ALREADY HAS THIS RELATIONSHIP WITH SAM BANKMAN-FRIED, SO THERE HAS BEEN A LOT OF SPECULATION ABOUT WHAT MIGHT HAPPEN, AND ACCORDING TO OUR REPORTING, INTERNALLY AT FTX, IT IS A DISCUSSION THAT THEY ARE LOOKING FOR WAYS THEY MIGHT TAKE OVER ROBINHOOD. ROMAINE: I AM WONDERING WHAT AN FTX ACQUISITION, IF IT WERE TO GO THROUGH, WOULD LOOK LIKE FOR ROBINHOOD, NOT JUST ROBINHOOD USERS, BUT FOR ROBINHOOD AS A PLATFORM FOR ROBINHOOD AS A PLATFORM TO WHAT WOULD FTX DO WITH THE COMPANY? ANNIE: THAT IS A GREAT QUESTION. IT WOULD UNITE COMPANIES THAT HAVE BEEN A MAJOR FORCE IN THE RUN-UP OF RETAIL TRADING WE HAVE SEEN SINCE THE BEGINNING OF THE PANDEMIC. SO IT WOULD BE A COMING TOGETHER OF OBVIOUSLY HAD VERY CRYPTO-FOCUSED PLATFORM, AND ROBINHOOD, WHICH HAS -- IT HAS CRYPTO, CERTAINLY, BUT IT ALSO HAS EQUITIES TRADING, OPTIONS, AND FTX HAS ITS OWN INTEREST IN GETTING INVOLVED IN STOCKS AS WELL AND BEGUN THAT PROCESS AS WELL. ROMAINE: ALL RIGHT, ANNIE MASSA THERE, BREAKING NEWS, FTX APPARENTLY CONSIDERING HOW IT COULD POTENTIALLY BY ROBINHOOD. WE WILL KEEP AN ION THAT STORY, CAROL, AS WE GET MORE DETAILS. CAROL: YES, A POTENTIAL DEAL FLOW, AS THE NASDAQ IT'S A SESSION LOCATED WE WILL BE BACK LIVE ON TV AND YOUTUBE, FOR BEYOND THE BELL COVERAGE AS WE TAKE YOU THROUGH TODAY'S MARKET CLOSE. ROMAINE: BACK HERE ON BLOOMBERG TELEVISION, WE CAN COUNT YOU DOWN TO THE CLOSING BELL, LESS THAN AN HOUR TO GO. JOINING US NOW ON SET, MIMI DUFF, GENTRUST, WHICH HAS $200 BILLION IN ASSETS UNDER MANAGEMENT. MIMI, GREAT TO SEE YOU GET I WANT TO TALK ABOUT THE RALLY, I GUESS THAT WAS, THAT WE SAW ALTAR LAST WEEK, REALLY, THIS IDEA THAT SENTIMENT HAS SHIFTED A LITTLE BIT. I KNOW THERE IS REBALANCING, OTHER FACTORS AT PLAY AS WELL, BUT THERE DOES SEEM TO BE A LITTLE BIT OF A WALK BACK AMONGST SOME INVESTORS THAT THE WORST CASE SCENARIO MAYBE IS NOT GOING TO BE THAT BAD. MIMI: YEAH, I THINK THAT IS PROBABLY TRUE. I MEAN, AT THE END OF THE DAY, WE HAD A LOT OF FEAR THAT RATES, I MEAN, AT ONE POINT, WE HAD A TERMINAL RATE OF 4%. WE ARE BACK TO 3.5% RIGHT NOW FOR THE TERMINAL RATE IN THE FED FIND. WE ARE STARTING TO SEE SOME TINY INDICATIONS THAT SOME OF THE SUPPLIED PRESSURES ARE BECOMING LESS PRONOUNCED. THE FED HAS AN INDICATOR THAT LOOKS LIKE IT MAY HAVE EKED -- PEAKED THERE. SO WE ARE SEEING SOME INDICATORS THAT THE WORST MAY BE BEHIND US ON INFLATION. ALSO, EVERYTHING THE FED IS TRYING TO DO TO TIGHTEN FINANCIAL CONDITIONS COME WE ARE SEEING SIGNS OF THAT. . TAYLOR: I AM CURIOUS IFTAYLOR: INFLATION IS WORSE FOR THAT? MIMI: WELL, HIGH INFLATION IS PROBABLY WORSE OVER THE VERY LONG-TERM, RIGHT? THAT IS WHY THE FED IS COMMITTED TO REALLY CURTAILING INFLATION. THAT IS THE BIGGEST PROBLEM RIGHT NOW. I THINK, YOU KNOW, WE SEE SOME ODDS OF A RECESSION OVER THE NEXT COUPLE OF YEARS, PROBABLY NORTH OF 50%, BUT, I MEAN, HOW DIFFERENT IS THAT FROM ANY OTHER WINDOW? ANYONE WHO IS CLAIMING THE ODDS OF RECESSION ARE 20% IN TWO YEARS, I THINK THAT IS REALLY JUST TOO LOW. SO I WOULD DEFINITELY SAY THAT THE INFLATION, UNANSWERED, SUSTAINED INFLATION IS FAR WORSE. KATIE: SO IF THE ODDS ARE CLOSER TO 50% FOR A RECESSION, HOW DO YOU POSITION FOR THAT? IS IT MORE ABOUT SEEKING SHELTER OR OTHER OPPORTUNITIES TO BE FOUND IN A RECESSION? MIMI: RIGHT NOW, WE HAVE REALLY TAKEN, THE PORTFOLIO SHIFTED QUITE A BIT. WE CAME IN THIS YEAR UNDERWEIGHT EQUITIES, UNDERWEIGHT FIXED INCOME, LOOKING FOR HIGHER YIELDS, AVOIDING THE YIELD-SENSITIVE SECTORS, LIKE TECHM FRANKLY. AT THIS POINT, WHEN EQUITY HAS GOTTEN TO 3800 ON THE S & P, WE WENT NEUTRAL, ABOUT 2.5% TO YEAR YIELDS, WE WENT NEUTRAL ON FIXED INCOME. WE ARE STILL A LITTLE BIT UNDERWEIGHT FIXED INCOME, IN TERMS OF DURATION, BUT ENTRY POINTS WE THINK ARE A LOT MORE REASONABLE HERE. WE DO THINK SOME OF THESE SECTORS HAVE BEEN REALLY EATEN UP, DOWN 30% TO 90%, AND WE DO THINK IT IS A VERY FERTILE ENVIRONMENT, IN TERMS OF OPPORTUNITY. ROMAINE: AND WE TALK A LOT HERE, OF COURSE, ABOUT SOME OTHER TRADITIONAL FUNDAMENTAL METRICS AND HOW THEY HAVE EITHER CALMED DOWN CLOSER TO LONGER-TERM AVERAGE OR IN SOME CASES EVEN BELOW. THE OTHER SIDE OF THAT COIN IS GREATER DIVERSIFICATION OPPORTUNITIES. WE'LL TALK ABOUT, REALLY A FEW MONTHS AGO, IF NOT A FEW YEARS AGO, STOCKS COMING WAS U.S. EQUITIES AND NOT MUCH ELSE WHERE YOU WERE OWING TO GET MUCH IN RETURN, BUT THAT HAS CHANGED A LOT. MIMI: IT HAS CHANGED A LOT. ENTRY POINTS ON SO MUCH ASSETS ARE BETTER. WITH SPREADS SO MUCH WIDER, THE YIELDS ARE HIGHER. IN TERMS OF MAKING THAT, WE DO THINK ENTRY POINTS ARE A LOT BETTER. KATIE: ROBINHOOD HAS RESUMED TRADING, ROMAINE, TO ABOUT $9.40 A SHARE, AS WE LOOK AT IDIOSYNCRATIC NEWS WITHIN THE MARKET. LET'S TALK ABOUT SPREADS. I DO HEAR IT IS A BETTER ENTRY POINT, BUT I AM ALSO HEARING SPREADS ARE STARTING TO WIDEN. PEOPLE ARE WONDERING IF CRACKS ARE STARTING TO SHOW. WHAT SIGNALS DO YOU TAKE FROM WIDENING SPREADS? MIMI: THE BIGGEST SIGNAL IS THE POTENTIAL FOR A RECESSION. AND THE FED, KEEP IN MIND, THE FED CAN AFFECT THE DEMAND SIDE OF THE EQUATION. THEY REALLY CAN'T AFFECT THE SUPPLY SIDE. SO WHAT THE FED IS TRYING TO DO IS TO SLOW DEMAND, WE WILL SEE THE UNEMPLOYMENT RATE GO UP FROM , LIKELY ANYWAY, FROM THE CURRENT 3.6%. THERE WERE FEW JOB OPENINGS AVAILABLE FOR EVERY JOB SEEKER, FOR INSTANCE. NOW I THINK AS YOU LOOK AT THE SMATTERING OF HEADLINES YOU ARE SEEING, LAYOFFS, MORE CONSERVATIVE HIRING. SO I THINK IS THOSE THINGS FILTER THROUGH THE MARKET, YES, THE CHANCES OF A POTENTIAL RECESSION ABSOLUTELY GO UP. MARKETS ARE ACTUALLY PRICING RIGHT NOW FOR THE FED TO RAISE RATES UP TO 3.5% BY EARLY NEXT YEAR AND THEN BE FORCED TO LOWER TO 2.5%. NOW JUST IN TERMS OF WHERE THAT ENDS, IT IS NOT REALLY THAT EXTRAORDINARY. I JUST WANT TO PUT THAT INTO CONTEXT. THE 2.5 PERCENT A LOT OF PEOPLE THINK IS LONG-TERM NEUTRAL. THAT IS HOW I WOULD THINK OF IT. THE WIDENING SPREADS, ABSOLUTELY, ALONGSIDE THE POTENTIAL FOR A RECESSION, BUT, YOU KNOW, THE FED IS TRYING TO KIND OF THREAT A VERY FINE NEEDLE, IF YOU WILL. TAYLOR: AS YOU ARE THINKING ABOUT RECESSION RISKS, WHERE DOES THAT LEAD YOU ON THE REST OF THE GLOBE, WHEN IT COMES TO E.M. BUT EUROPEAN EQUITIES AS WELL. MIMI: WE LIKE THE THEMES THAT SORT OF GO ALONG WITH DIVERSIFICATION IN ENERGY SOURCES. FOR INSTANCE, WE REALLY LIKE NORWAY, COUNTRIES LIKE U.K., THAT CAN BENEFIT FROM DIVERSIFICATION OF ENERGY SOURCES. WE DON'T -- WE HAVE DONE SOME PICKETING WITHIN E.M., BUT NOT REALLY AT THE TOP OF OUR STACK, IN TERMS OF OPPORTUNITIES THAT RIGHT NOW. TAYLOR: WE APPRECIATE IT. MIMI DUFF, OF COURSE, INVESTMENT ADVISOR AT GENTRUST. SO GREAT TO SEE YOU IN PERSON. MIMI: THANK YOU FOR HAVING ME. KATIE: COMING UP, OF COURSE, COUNTING YOU DOWN TO THOSE CLOSING BELLS. JASON DRAHO, HEAD OF ASSET ALLOCATION AMERICAS, AT UBS GLOBAL MANAGEMENT. WE WILL GET SOME NUMBERS FROM NIKE, REPORTING AFTER THE BELL COME ON INFLATION, PANDEMIC LIKE LOCKDOWN IN CHINA, AND OF COURSE YOU GET ROMAINE BUYING ALL THE SNEAKERS AND HOW THAT IMPACTS DEMAND IN NORTH AMERICA. THAT IS ALL A POSITIVE. ROMAINE: I HAVE MOVED ONTO LOAFERS NOW. [LAUGHTER] TAYLOR: YOU HAVE GOT TO GET THE MEN'S VERSION OF THOSE. PASSING THE ANNUAL STRESS TEST, WE GOT THOSE THURSDAY AFTER THE BELL. AND TODAY'S TRIPLE TAKE FIXTURING DAVID GEORGE OVER AT BAIRD. ROMAINE: HOW MUCH DO YOU THINK KATIE SPENDS ON HORSESHOES? KATIE: EVERY SIX WEEKS, LET ME TELL YOU. IT IS REAL OR CAN FEEL IT. [LAUGHTER] THIS IS BLOOMBERG. ROMAINE: THIS IS THE ACCOUNT DOWN TO THE CLOSE, ABOUT 42 MINUTES LEFT TO GO IN THE TRADING DAY. ANOTHER INTERESTING DAY HERE. STOCKS OPEN HIGHER ACROSS THE BOARD, BUT THEY HAVE BEEN OSCILLATING BETWEEN GAINS, TALKING ABOUT REBALANCING AND ALL THE OTHER STUFF, KIND OF BELIES THE IDEA THAT THE MACRO PICTURE RIGHT NOW SEEMS TO BE DRIVING EVERYTHING. LOOKING AT WHETHER IT IS IN THE COMMODITY SPACE. IT IS ALL ABOUT EXPECTATIONS, THE FOCUS HERE ABOUT THE GLOBAL ECONOMY AS WELL AS PARTICULARLY HERE IN THE U.S. OF 5% IN HONG KONG EARLIER TODAY, ACTUALLY ALMOST PULLING ITSELF OUT OF THE BEAR MARKET AND INTO, BELIEVE IT OR NOT, A NEW FRESH BULL MARKET HERE TO TAKE A LOOK AT WHERE THE BLOOMBERG DOLLAR SPOT INDEX IS. WE ARE SEEING A LOT OF MIXED SIGNALS HERE BECAUSE OF WHAT IS MOVING IN WHAT COULD POTENTIALLY MOVE LOWER. THEY HAVE BEEN UNDER AND PRESSURE ALL -- INDEXES HAVE BEEN UNDER PRESSURE ALL WEEK LONG PURE WE WILL GET NIKE AFTER THE BELKIN THOSE SHARES -- AFTER BELL. THOSE SHARES DOWN ABOUT 2%. CATERPILLAR IS HIGHER. WE SHOULD POINT OUT THE BIG SHIPPER IS HIGHER, ALL OF THE TRANSATLANTIC SHIPPING COMPANIES MOVING HIGHER ON THE IDEA THAT CHINA IS REOPENING TO WE WANT TO BRING YOU BACK TO CRYPTO REAL QUICK. ROBINHOOD TRADING SHARES UP 14% ON THE NEWS THAT SAM BANKMAN-FRIED AT FTX MAY BE LOOKING FOR WAYS TO BUY THE COMPANY. LET'S GET ABIGAIL DOOLITTLE INTO THIS OPTIONS INSIGHT CONVERSATION. ABIGAIL, WHEN EVERYBODY WANTS NO COMING OFF OF LAST WEEK'S BIG RALLY, IS THAT SUSTAINABLE GOING FORWARD INTO THE SECOND HALF OF THE YEAR? ABIGAIL: THAT IS THE TRILLION DOLLAR QUESTION, ROMAINE, AND A LOT OF REASONS TO THINK IT COULD BE SUSTAINABLE AT LEAST FOR A FEW WEEKS. TO TALK MORE ABOUT THIS SITUATION THAT WE HAVE AS WE DO HEAD INTO THE SECOND HALF OF THE YEAR, LET'S BRING IN CHRIS MURPHY OF SUSQUEHANNA. GREAT TO HAVE YOU WITH US, CHRIS. RIGHT NOW, BLOCKING THE S & P 500, BUT LAST WEEK, THAT SOLID RALLY OF 6.5%. DO YOU THINK IT HAS MORE TO GO, AND IF SO, IS NOTHING MORE THAN A BEAR MARKET BOUNCE? CHRIS: I THINK YES TO BOTH OF YOUR QUESTIONS, ACTUALLY. IF YOU LOOK AT SEASONALITY, THE BEGINNING OF JULY, THE SIDELINES, THE REBALANCE, SENTIMENTS OBVIOUSLY RE-BEARISH, POSITIONING PRETTY LIGHT. THAT COULD CERTAINLY PROPEL THIS A LITTLE BIT MORE. IN THE NEAR TERM, A COUPLE THINGS I AM CONCERNED ABOUT, YOU KNOW, WE ARE STILL NOT SEEING THOSE OPTIONS, VOLATILITY TYPE INDICATORS, YOU KNOW, A SPIKE IN THE VIX, TERM STRUCTURE, THINGS LIKE THAT. . AND THEN ON FRIDAY, 96% OF THE S & P COMPONENT TRADES HIGHER ON FRIDAY. SEEMS LIKE A PRETTY GOOD SIGN. IF YOU GO BACK OVER THE LAST FIVE YEARS, YOU KNOW, S & P IS DOWN TWO WEEKS LATER 75% OF THE TIME TO WEEKS ON AVERAGE -- 2% ON AVERAGE. YOU DON'T THOSE TIGHT MOVES IN BULL MARKET, WE ACTUALLY SEE THEM MORE IN BEAR MARKETS, A HIGH CORRELATION THING. THAT MAKES ME A LITTLE BIT NERVOUS. ABIGAIL: THAT IS INTERESTING. HOW MUCH FURTHER DO YOU THINK WE DO GO, AND YOU HAVE AN INTERESTING LOOK AT VOLATILITY -- OR, EXCUSE ME, VOLUME, A REASON TO BELIEVE THIS MAY BE MORE SUSTAINED. HAVE WE SEEN A BOTTOM, OR ARE WE JUST TALKING ABOUT A REALLY SOLID BEAR MARKET RALLY? CHRIS: I THINK WE COULD RALLY THROUGH THE MIDDLE OF JULY, YOU KNOW, A COUPLE MORE PERCENTS. IT IS HARD TO REALLY SAY. ONE THING WE HAD BEEN LOOKING FOR WAS EQUITY VOLUME, PARTICULARLY IN THE BEGINNING OF JUNE. IT WAS REALLY LIGHT, REALLY ANEMIC. WE SAW LAST FRIDAY, SO THE JUNE QUARTERLY EXPLORATION FRIDAY, THE HIGHEST S & P COMPONENT EQUITY COMPONENT SINCE THE U.S. PRESIDENTIAL ELECTION. THAT WAS NICE TO SEE IN TERMS OF, YOU KNOW, SHARES CHANGING HANDS COME I POTENTIAL BOTTOMING SIGN. OBVIOUSLY NOT ONE BOTTOMING SIGN IS THE BE-ALL, END-ALL, BUT THAT WAS DEFINITELY A GOOD ONE, SEEING A BIT MORE VOLUME THERE. WE HAVE DONE A LOT OF EXPLORATION SINCE THE PRESIDENTIAL ELECTION, AND THEY HAVE NOT HAD NEARLY THAT VOLUME. THAT IS A GOOD WHEN I MADE US FEEL A LITTLE BIT BETTER. ABIGAIL: THIS IS NOT A MARKET FOR THE FAINT OF HEART, TO SAY THE LEAST. HOW DO YOU LOOK AT OPTIONS? CHRIS: WE LOOK AT THE OPTIONS MARKET. IF YOU LOOK AT THE S & P FOR THE LAST SIX OR SEVEN WEEKS, IT HAS BEEN SHOCKING. 13%, 14% RANGE THAT HAS NOT REALLY GONE ANYWHERE. WE ARE LOOKING AT STOCKS WHERE WE CAN SELL A STRANGLE, YOU KNOW, SIX WEEKS OUT OR TWO MONTHS OUTCOME AWARE THE STRENGTHS OF THAT STRANGLE ARE WITHIN WHERE THAT STOCK HAS TRADED IN ITS RANGE FOR THE PAST SIX WEEKS OR SO. CISCO IS ONE THAT POPPED OUT FOR US, 42, 46 STRANGLE, BUT THERE ARE A NUMBER OF NAMES ON THE SCREEN THAT WE LOOKED AT. WE THINK THAT IS A GOOD STRATEGY. WE ARE THINKING MORE CHOPPED THIS SUMMER. ABIGAIL: GREAT STEP IS ALWAYS. CHRIS MURPHY, SUSQUEHANNA, TALKING ABOUT A POTENTIAL FOR A CHOPPY SUMMER. FROM NEW YORK, THIS IS BLOOMBERG. ♪ TAYLOR: AFTER WHAT HAS BEEN A DRAMATIC SELLOFF IN THE FIRST HALF, ANOTHER BIG ROUT TO THE EQUITY MARKET TO CLOSE OUT THIS YEAR, ACCORDING TO SOME RESPONDENTS IN OUR LATEST POLL SURVEY, A LOT OF THESE REPS FIND RESPONDENTS, ROMAINE, SAY THEY ARE NOT FAR FROM BOND MOVING -- BOTTOMING OUT IN THE MARKETS MAY HAVE PRICED THAT IN MONTHS PRIOR. ROMAINE: THIS IS A PRETTY BROAD SURVEY, BUT THE IDEA HERE IS THAT IT IS NOT ALREADY DISCOUNTED BUT THE IDEA THAT A LOT OF PEOPLE, MAYBE THAT IS MORE COMFORTABLE FOR INVESTORS. TAYLOR: EVEN IF WE DO GET A BOTTOM, THAT DOES NOT MEAN WE EXIT THE BEAR MARKET. MAYBE WE CAN LANGUISH AROUND THESE LEVELS FOR A WHILE HERE. THE AVERAGE RESPONDERS, THEY THOUGHT THE S & P 500 WAS GOING TO END 2022, 3700, AND THEY ARE AT 3900 NOW. ROMAINE: AROUND THE IDEA THAT WHILE THE WORST MAY BE BEHIND US TO A CERTAIN EXTENT, IT DOES NOT MEAN THE MARKET IS SET OFF ON SOME SORT OF BULL RUN. TAYLOR: WE TALK ABOUT EQUITIES, THIS CHART WE HAVE BEEN SHARING FOR A WHILE, THANKING THE BOND MARKET IS MAYBE CLOSE TO FINDING THE BOTTOM AS WELL. HOW DO YOU FIND THAT IN THE FACE OF A HAWKISH FEDERAL RESERVE? IT IS ANOTHER STORY. ROMAINE: WE ARE COUNTING DOWN TO THE CLOSING BELL. ON THIS MONDAY, LAST TRADING DAY OF THE MONTH AND THE FIRST HALF OF THE YEAR. POWERED BY 2700 JOURNALISTS AND ANALYSTS IN OVER 120 COUNTRIES. I'M MARK CRUMPTON. THIS IS BLOOMBERG. > > THE MOST CLICK CRUCIAL MOMENTS IN THE TRADING DAY, THIS IS THE CLOSE. ROMAINE: THIS IS THE COUNTDOWN TO THE CLOSE, 27 MINUTES LEFT TO GO IN THE TRADING DAY. TAYLOR: WE ARE COMING OFF A DECENT RALLY FROM FRIDAY. KATIE: WAS IT A BEAR MARKET BALANCE? WE WILL KNOW IN A MOMENT. TODAY YOU HAVE A LOT ON THE SECTOR LEVEL WITH BRIGHT SPOTS, ENERGY UP IN FRONT. OVER 3% AT THE BOTTOM. COMMUNICATION SERVICES, CONSUMER DISCRETIONARY. ROMAINE: EARLIER IT WAS THE CONTRIBUTION FROM THOSE MEGA CAP TECH STOCKS BUT NOW THEY HAVE MOVED INTO THE RED, WITH APPLE AND NET FLIGHT -- NETFLIX. MICRON, CHIP STOCKS MOVING HIGHER, UP 8/10 OF 1% WITH EARNINGS LATER THIS WEEK. ENERGY IS BASICALLY YOUR OUTPERFORMER, LEADING THE CHARGE . WITH REGARDS TO THE S & P 500 AT LEAST. POLESTAR WENT PUBLIC A COUPLE OF DAYS AGO, DOWN SIGNIFICANTLY ON THE DAY. NO REAL NEWS HERE, JUST A SHAKEOUT AS PEOPLE ACCLIMATE TO THE NEWS BEING DOWN LESS THAN 15%. TAYLOR: BIG SHAKEOUT'S? CRYPTO COULD BE ONE OF THEM. FTX MAY BE POTENTIALLY LOOKING AT ROBINHOOD, GIVEN THE PURE EVALUATION DROP THAT THAT COMPANY MIGHT REPRESENT, BRINGING US BACK TO THE BIG STORY OF RISK ASSETS, PARTICULARLY BITCOIN REALLY HERE IN BLUE, SORT OF FALLING AND WHAT A WILD RIDE IT HAS BEEN, DOES IT REPRESENT CONTAGION? OPPORTUNITY? WE CAN DISCUSS ALL THESE STORIES WITH SAM, THE CRYPTO EXCHANGE WAS THE BIG STORY FROM THE TOP OF THE HOUR. JOINING US NOW TO DISCUSS THIS, OLGA AND SONALI BASAK. BEFORE WE GET TO THE BROADER IMPLICATIONS OF WHAT WE ARE TALKING ABOUT, WHAT DO YOU MAKE OF STX LOOKING AT POTENTIALLY ROBINHOOD? > > WHAT IS INTERESTING ABOUT IS WE KNOW THAT STX HAS BEEN ON AN ACQUISITION STREAK. THEY ARE VERY INTERESTED IN STOCK TRADING. REMEMBER, THERE ARE OTHER COMPANIES INTERESTED WHEN IT COMES TO MARKET STRUCTURE AND TRADING IDX. ROBINHOOD WOULD BE A BIG DEAL. THE QUESTION IS, DO THEY NEED ROBINHOOD TO GIVE THEM SCALE RIGHT AWAY? CAN THEY GET IT AT A SUBTRACTED PRICE? REMEMBER THAT STX WAS A SMALL COMPANY WHEN IT CAME TO THE SIZE ITSELF AND ROBINHOOD HAD BEEN A HYPER GROWTH COMPANY, ADDING MANY PEOPLE OVER THE LAST COUPLE OF YEARS. SO, CULTURALLY THEY ARE DIFFERENT FIRMS. CAN STX JUST GO IT ALONE OR DOES ROBINHOOD MEANINGFULLY GIVE THEM SOMETHING IN THE STOCK MARKET ARENA TO HELP THEM JUMPSTART? ROMAINE: THE SIDES ISSUE IS IMPORTANT, ROBINHOOD IS STILL RELATIVELY SMALL WITH THIS MARKET CAP PRIOR TO THE DAYS GAINS, BUT YOU CONTRIBUTED HERE TO THE BIG TAKE ON THE TERMINAL TODAY, LOOKING AT THE RECENT FALLOUT IN THE CRYPT DOES FEAR. OVERALL THERE SEEMS TO BE A SHIFT IN THE WAY THAT PEOPLE LOOK AT THE INDUSTRY RIGHT NOW AND I'M CURIOUS AS TO WHO ARE THE FAITH WILL THAT ARE STANDING BY CRYPTO WRIT LARGE NOT ONLY AS AN INVESTMENT THAT AS AN INDUSTRY. > > LIKE YOU SAID, A LOT OF PEOPLE JUMPED INTO CRYPTO IN THE LAST SEVERAL YEARS WHEN WE SAW THE BULL MARKET AND A LOT OF RETAIL INVESTORS AND INSTITUTIONAL INVESTORS AND NOW WE ARE KIND OF SEEING WHO IS HERE TO SUPPORT CRYPTO, BECAUSE A LOT OF RETAIL INVESTORS HAVE BEEN STAYING ON THE SIDELINES OF THE BEAR MARKET. AND WE HAVE SEEN SOMETHING EMERGING AS A MAJOR SUPPORTER. PROVIDED TO COMPANIES IN DISTRESS, THEY ARE ABLE TO MAKE GOOD DEALS DURING THESE SMART MARKETS. KATIE: AND THAT IS WHAT IS SO INTERESTING ABOUT TODAY'S NEWS WITH THE CRYPTO UNDERTAKE. TALK TO US A LITTLE BIT ABOUT SAM AND THE STX ROLE. SOME HAVE JOKED THAT THEY ARE THE LENDER OF LAST RESORT WHEN IT COMES TO THIS MOMENT, EXTENDING CREDIT LINES TO BLOCK FIGHT AND OTHERS IN THE INDUSTRY. > > ABSOLUTELY, THEY WERE ONLY STARTED IN 2019, IT'S A FAIRLY YOUNG COMPANY. BUT SAM HAS BEEN IN CRYPTO FOR A WHILE. HE KNOWS EVERYBODY IN THE INDUSTRY. HE IS INVOLVED IN ONE WAY OR ANOTHER WITH A LOT OF COMPANIES, DECENTRALIZED FINANCE. SO NOW PERHAPS THEY HAVE AN OPPORTUNITY THAT A FEW MONTHS AGO WOULD HAVE PROVIDED DIFFERENT VALUATIONS. TAYLOR: -- KATIE: TALK TO US ABOUT THIS LANDSCAPE THEY FIT IN. YOU COULD MAKE THE POINT THAT A BUNCH OF POTENTIAL BARGAINS HAVE OPENED UP. > > THAT'S A GOOD POINT. WHAT IS ROBINHOOD WORTH? IT'S STILL BETWEEN 130 AND ONE FOURTH OF WHAT STX WAS VALUED AT EARLIER THIS YEAR. NOT TO MENTION WHAT WILL IT BE VALUED AT IN THE CRYPTO WINTER AS WELL? THERE'S A STRATEGIC QUESTION ABOUT HOW MUCH SATURATION THEY HAVE TOWARDS CRYPTO MARKETS. GIVING THEM ROBINHOOD COULD HELP THEM DIVERSIFY. THE FINANCIAL BENEFIT COULD HELP THEM RISE THROUGH THE STORM AND THEY HAVE BEEN FREE TO LOAN AT $10 BILLION. SOMETHING TO CONTRIBUTE PERSONALLY TO A DEAL LIKE THIS? IT'S AN INTERESTING AND COMPLICATED QUESTION. COULD THEY JUST DO THIS THEMSELVES WITHOUT SPENDING THE $7 BILLION? ROMAINE: IT WILL BE INTERESTING TO SEE HOW THIS COULD BE STRUCTURED GIVEN THAT IT WAS A PERSONAL INVESTMENT FUND THAT TOOK THE STAKE ON THE $8 BILLION MARKET CAP, A MARKET CAP THAT AT ABOUT A YEAR AGO WAS 60 BILLION. SONALI BASAK IS HELPING US BREAK THINGS DOWN HERE ON THE BLOOMBERG TERMINAL. DEFINITELY CHECK IT OUT. KEEP AN EYE ON THAT FOR ANY DEVELOPMENTS. COMING UP WITH REGARDS TO THE CRYPTO SPACE, JASON WILL JOIN US IN A MINUTE. THIS IS BLOOMBERG. TAYLOR: COUNTINGTAYLOR: YOU DOWN TO THE CLOSING BELL, ON THE SCREEN I WANTED TO LOOK AT THE SAFE HAVENS, THE S & P 500 HIGH-YIELD DIVIDEND FUND IS ONE THAT INVESTORS HAVE BEEN FLOCKING TO FROM THE INFLATIONARY ENVIRONMENTS WITH INCOME COMING FROM THAT AND A BIT OF A HIGHER VIX WITH A 27 HANDLE OR SO, THE TWO-YEAR HAS BEEN A YIELD RISING ON THE BACK OF THE PRICE OPTION WE HAVE THIS MORNING AND A YIELD CURVE STEEPENING, BROADLY ON THE 210 AS PEOPLE LOOK AT THESE RECESSIONARY INDICATORS ON THE HORIZON. LET'S WELCOME JASON, THE HEAD OF ASSET ALLOCATION AT UBS GLOBAL ALLOCATION. JASON WILL BE STICKING WITH US UNTIL THE MARKET CLOSES. TALK TO US ABOUT THIS, DO YOU BUY IT OR NOT? JASON: WE HAVE TO ACKNOWLEDGE A LOT OF RISKS IN THE ECONOMY WITH A SLOWDOWN IN THE ACADEMIC ACTIVITY AND SLOWDOWN FROM THE CONSUMER AND WEAKNESS AROUND MODERATION, BUT IT ISN'T A FULL PICTURE. THE FACT THAT IT HASN'T TO ME MEANS THERE IS UNCERTAINTY IN THE RATES MARKET ABOUT GETTING A RECESSION OR IS THE PROBLEM STILL INFLATION? YOU KIND OF LOOK AT IT BUT THEN COLLECTIVELY WE POUND THE TABLE TO SAY RECESSION IS INEVITABLE AT THIS TIME. ROMAINE: CAN THEY PULL OUT OF THE PROVERBIAL SOFT LANDING? JASON: IT'S STILL A CHANCE BUT A NARROW PATHWAY. IN SOME WAY THESE THINGS ARE BEYOND THEIR CONTROL IN THE FED CAN DO FORCE A SLOWDOWN IN THE ECONOMY, MAKING IT LOOSE OR MORE RESTRICTIVE AND IMPACT MANNED AND EVEN THAT'S A BLUNT INSTRUMENT. IDEALLY THEY WANT TO SLOW GROWTH TO 1% OR LESS TO MAKE SURE INFLATION COMES DOWN BUT ONCE IT'S AT THOSE LEVELS IT'S EASY TO SLIP LOW TREND. -- BELOW TREND. THINGS COULD RESOLVE IN A WAY THAT PEOPLE ARE NOT EXPECTING. ROMAINE: JUST GETTING STARTED HERE WITH JASON, WHO'S GETTING US STARTED TOWARDS THE CLOSING BELL. HEAD OF ASSET ALLOCATION AT UBS, IT'S A MIXED PICTURE OUT THERE AND ACROSS THE BOARD WE ARE IN THE RED HERE. ACTUAL BIG GAINERS ON THE DAY HERE, THEY ARE THE BIGGEST ROMAINE: WE ARE LEARNING ABOUT AN INCIDENT IN MISSOURI WITH AN AMTRAK TRAIN THAT DERAILED ON ITS WAY FROM CHICAGO TO LOS ANGELES, DERAILING AFTER HITTING A TRUCK OF SOME SORT THAT WAS ON THE TRACK. WE DON'T KNOW ANYTHING YET ABOUT THE CONDITION OF THE PEOPLE ON BOARD. AMTRAK HAS CONFIRMED THE INCIDENT AND WE ARE WAITING FOR SUPER STRESSED OUT PEOPLE. WE'RE LEARNING MORE ON THE POTENTIAL INJURIES TO THE PEOPLE ON BOARD. COUNTING DOWN TO THE CLOSING OF THE BELL ALL OVER THE MAP FOR THE MAJOR INDICES. THINGS HAD BEEN STRONGER EARLIER IN THE DAY BUT ARE NOW MOVING INTO THE RED WITH SOFTWARE STOCKS LOWER, I GP DOWN 2%. STILL WITH US, JASON DRAHO. GLOBAL WEALTH MANAGEMENT, LET'S TALK A BIT ABOUT ALLOCATION RIGHT NOW. LET WE HEARD FROM A PREVIOUS GUEST OF OURS ON THIS PROGRAM AND WE TALKED ABOUT THE IDEA THAT THIS IS A PRETTY RICH ENVIRONMENT IF YOU ARE LOOKING TO FIND GOOD OPPORTUNITIES AND DIVERSIFICATION OPPORTUNITIES THAT DIDN'T NECESSARILY IN -- EXIST A COUPLE OF YEARS AGO. JASON: VALUATIONS ACROSS THE BOARD OF GOTTEN CHEAPER. LOOKING AT EMERGING MARKETS ITS TRADING AROUND A MULTIPLE OF 11 OR 12 AND FROM A LONG-TERM INVESTOR PERSPECTIVE THERE IS VALUE OPPORTUNITY THAT IS THE MOST EXTENSIVE GROWTH WITH A POTENTIAL FOR A D RATING. FLIPPING THE FIXED INCOME SIDE, IT'S A PRETTY ATTRACTIVE INCOME THAT WE HAVEN'T SEEN IN A WHILE AND THAT'S GETTING INTRIGUING BUT THE POINT I MADE EARLIER WAS ABOUT MAKING INFLATION AROUND THE RATES AND WHERE THEY GO MAKING IT A LITTLE BIT HARDER COMPARED TO THREE MONTHS AGO WITH THE OPPORTUNITY FOR FIXED INCOME LOOKING MORE ATTRACTIVE THAN IT DID. KATIE: ARE YOU THINKING TREASURIES OR MORE CORPORATE CREDIT? JASON: WE DON'T WANT TO TAKE A LOT OF CREDIT RISK AT THIS POINT IN TIME WITH OPPORTUNITIES SPREAD THAT ARE ATTRACTIVE FOR INSTANCE. PORTFOLIOS SPREAD THROUGHOUT TREASURIES AT 100 AND 30 PLUS BASIS POINTS. THERE'S NOT A LOT OF INTEREST RATE RISK AND THOSE ARE THE THINGS WE ARE LOOKING AT. IN TERMS OF TREASURIES ON THE LONG END, IT'S INTERESTING, PEOPLE ASKING WHY WHAT I WANT TO BUY 10 YEAR, 20 YEAR PLUS TREASURIES AND THE ANSWER IS IF THE BULK IS LIMITED AROUND THE RECESSION, IT WORKS BOTH WAYS FROM A PORTFOLIO PERSPECTIVE, MORE ATTRACTIVE NOW THAN IT WAS THREE MONTHS AGO. TAYLOR: 356 ON THE 20 YEAR COULD BE TEMPTING, JASON. OUT OF THAT FULL FAITH AND CREDIT BACK TO WHAT'S IN THE ZEITGEIST OF ANALYSTS THIS WEEK, THE LACK OF REVISION IN EARNINGS LOWER. HOW ARE YOU THINKING ABOUT THE E IN P/E RATIOS AND HOW DOES IT LOOK FROM A VALUATION PERSPECTIVE? JASON: IT'S AN INTERESTING POINT BECAUSE EVERYONE'S TALKING ABOUT THE MULTIPLE THE RATINGS AND THE NEXT LEG FOR EQUITIES COMING DOWN. BUT SO FAR FOR U.S. EQUITIES THAT HASN'T REALLY HAPPENED IN YOU COULD SAY ULTIMATELY THAT THIS IS A KIND OF CATCH UP GAME FOR THE ANALYSTS MAKING THOSE CALLS AND IT MIGHT START TO MATERIALIZE WITH SECOND-QUARTER EARNINGS AND SOME OF THOSE VISIONS COMING LOWER WITH TOP-DOWN MODELS LOOKING AT THE ISM AND THINGS OF THAT SORT, BUT RELATIVE TO NEXT YEAR THE CONSENSUS IS 10% AND WE ARE THINKING IT WILL BE MUCH LOWER LIKE SINGLE DIGITS. THAT HASN'T HAPPENED FROM MACRO PERSPECTIVES. IT MIGHT BE A CHICKEN AND EGG GAME IN THE SECOND QUARTER EARNINGS WERE COMPANIES SAY THAT THE MARGINS LOOK GOOD AND DEMAND IS HOLDING UP BUT IT MIGHT SURPRISE PEOPLE GIVEN THE EARNINGS NEEDING TO COME DOWN. ROMAINE: JASON IS STICKING WITH US THROUGH THE CLOSING BELL. BACK TO HIM IN ONE SECOND, BUT KATIE, TALKING ABOUT EARNINGS, WE HAVE ONE COMING AFTER THE BELL. KATIE: WE DO AND I'M LOOKING AT NIKE WITH SHARES FALLING AND THE BIG FOCUS BEING CHINA AND IF THOSE LOCKDOWNS HIT WITH DEMANDS COMING OUT OF NORTH AMERICA. WE WILL BRING YOU THAT AFTER THE BELL AND BEFORE WE GET THERE, YIELDS ARE RISING TODAY, GOOD NEWS. WE HAVE ALREADY TALKED ABOUT BONDS A LITTLE BIT, BUT I'M CURIOUS HOW YOU THINK THIS CHART MIGHT CHANGE. WHEN MIGHT INVESTORS START TO BROADLY RETHINK TREASURIES TO COVER THE SHORT POSITIONS THAT HAVE BEEN BUILT UP? JASON: FOR THAT WE NEED TO SEE INFLATION DATA COME DOWN MORE CONSISTENTLY AND CLEARLY AND FOR THE FED TO GIVE GUIDANCE ABOUT THE PRICE IN THE MARKET AND HOW MUCH THEY ARE EXPECTING AT THE TOP WITH PEAK HAWKISH IN THIS AND PULLING BACK FROM AN INVESTOR PERSPECTIVE GOING HIGHER WITH A COMBINATION AROUND INFLATION GOING DOWN IN THE FED RESPONDING TO IT. HOW SOON THAT COULD HAPPEN IS AN OPEN QUESTION WITH INFLATION HIGH. WE HAVE A FEW MORE MONTHS OF DATA WHEN GROWTH IS SLOWING. IS IT OVER OR IS THERE MORE PAIN TO COME FROM HIGH INFLATION AND HAWKISH FED SPEAK? ROMAINE: JASON, ALWAYS WONDERFUL TO CATCH UP WITH YOU ON THE CLOSING BELL. OVER AT UBS GLOBAL WEALTH MANAGEMENT, LET'S CHECK ON THE MARKET AS WE ARE JUST ABOUT THREE TO FOUR MINUTES AWAY HERE. IT LOOKS LIKE THE MARKET WAS GOING TO GO HIGHER BUT WE SAW A LOT OF SELLING PRESSURE IN A LOT OF THE WORK REBALANCING. DO YOU BY THAT? KATIE: WE DID HAVE A BIG REBALANCE ON FRIDAY WITH THE FTSE RUSSELL. BUT LOOKING AT IT TODAY, THE VOLUME IS FAIRLY MUTED. VOLUME IS 13% BELOW THE 20 DAY AVERAGE. TAYLOR: THEY WERE TALKING A LOT ABOUT A RALLY AND THE QUARTER END OF THE FIRST HALF YEAR WITH REBALANCING AS WELL AROUND THAT FULL PORTFOLIO BONDED TO EQUITIES THAT HASN'T REALLY BEEN WORKING FOR YOU THIS YEAR, HAS IT? ROMAINE: AND YOU KNOW WHAT ELSE HASN'T BEEN WORKING? ROBINHOOD, THAT TRADE WAS AWFUL, IT HAD BEEN DOWN A LITTLE BIT EARLIER BUT WHEN IT IS HIGH, 20 1% ON THE BACK OF THE BLOOMBERG NEWS THAT WAS REPORTED HERE, THAT THEY MAY BE CONSIDERING A POTENTIAL BUYOUT OF THE COMPANY. WE WILL KEEP AN EYE OUT AND AS ALWAYS WE HAVE FULL MARKET COVERAGE RIGHT HERE ON BLOOMBERG TELEVISION AND RADIO, TAKING YOU TO THE BELL AND BEYOND. > > BEYOND THE BELL STARTS RIGHT NOW. ROMAINE: RIGHT NOW WE ARE TWO MINUTES AWAY FROM THE END OF THE TRADING DAY. ROMAINE BOSTICK, TAYLOR RIGGS, I REMEMBERED AT THIS TIME, KATE -- KATIE IS IN FOR CAROLINE. WE WELCOME CAROL MASSAR AND TIM STENOVEC AND OUR AUDIENCES ACROSS BLOOMBERG TELEVISION AND RADIO AS WELL. THE CRUCIAL MOMENTS OF THE DAY, I DAY THAT I DON'T KNOW WE CAN EXTRAPOLATE TOO MUCH OUT OF, BUT CERTAINLY A DOWN DAY TO BE SURE. CAROL: TAYLOR, SOMETIMES I FORGET MY HUSBAND'S NAME. TAYLOR: I HEAR IT FROM ROMAINE, ONLY HURTING THE ONES YOU LOVE. HANGING IN THERE. [LAUGHTER] CAROL: HOMEBUILDERS, LOOKING FOR GAINS TODAY, IT'S HOMEBUILDERS UP HALF OF 1%, ON QUITE A TEAR. TIM: TAKING A STEP BACK AND LOOKING AT THE S & P 500 THEY ARE REALLY SEARCHING FOR DIRECTION FOR THE DAY, MOVING BETWEEN GAINS AND LOSSES OVER A DOZEN TIMES BUT THEN AFTER 1:20 WALL STREET TIME IT WAS FIRMLY LOWER AND WE SEEMED TO BE BOUNCING OFF THE LOWS FROM EARLIER IN THE SESSION. KATIE: RUSSELL 2000 HAD BEEN THE MAJOR ONE HANGING IN THERE IN THE ONE THING THAT YOU HAD REALLY BEEN NOTING WAS THE IMPACT OF HIGHER YIELDS AND IF WE ARE HAVING THESE CONVERSATIONS AGAIN ABOUT VALUATIONS WITH YIELDS RISING, IS THIS THE CLASSIC DAY WHEN THESE ARE LOOK AT THE LOWER VALUATIONS, OPEN UP BARGAINS WHEN IT COMES TO M & A. ROBINHOOD POTENTIALLY. ROMAINE: TAKING A LOOK EARLIER AT THE BIG DROP IN MARKET CAP VALUATION FOR ROBINHOOD. EVEN WITH TODAY'S GAME, STILL ONLY ABOUT $8 BILLION. NOT GAINING TODAY, THE DOW JONES INDUSTRIAL AVERAGE GOING TO FINISH LOWER BY .2%, AS WE WAIT FOR THESE NUMBERS TO SETTLE. THE S & P 500 CAMPED OUT AT 3900, THAT PUTS US DOWN BY .3%. THE NASDAQ COMPOSITE, AROUND 11,502. ALL OF THESE NUMBERS ARE PRETTY MUCH AROUND THE LIVES OF THE DAY. THE RUSSELL 2000 BUCKING THE TREND. IT WILL FINISH THE DAY HIGHER BY SIX POINTS, 17,071. THAT IS HIGHER BY .3%. LIKE THE OTHER INDICES, THAT IS ALSO THE LOW OF THE DATE. CAROL: I WILL CALL IT A TEENAGER TRADING DAY, IT FEELS LIKE A LOT OF ANGST IN TERMS OF HOW WE TRADED. IT FELT UNCOMFORTABLE. THE S & P 500, 235 NAMES WERE HIGHER. 265 LOWER. STILL HAVE SOME GAINING IN TODAY'S SESSION, EVEN THOUGH IT FELT NOT SO GAIN. KATIE: TEENAGER TRADING DAY, I WAS DEFINITELY ANGST HE AS A TEENAGER. IT WAS A ROUGH DAY FOR THE MARKET. YOU DID HAVE SOME WINNERS IN THE ENERGY SECTOR, UP 2.7%, THE BIGGEST GAINER. UTILITIES SAW SOME LOVE. OF CARE, A LITTLE BIT OF A BID -- HEALTH CARE, A LITTLE BIT OF A BID. . SOME OF THE BIGGEST LOSERS, RETAIL, CONSUMER, DURABLES, SEEING LOSSES. APPROACHING 2% WHEN IT CAME TO RETAILING. IT WAS A DOWN DAY OVERALL IN THE MARKET. CAROL: I DID FIND COOL GAINERS. I THOUGHT ABOUT ROMAINE. IT WAS NOT HOUSEHOLD NAMES THAT CAME UP ON MY RADAR, AFI THE IS THE TICKER, A CUTEST MEDICAL. THIS IS A NANO CAP MARKET CAP. MEDICAL EQUIPMENT COMPANY FOR PATIENTS WITH HEART ARRHYTHMIA. AND THEIR COMPANY SYSTEM GOT FDA CLEARANCE AND COMMERCIAL LAUNCH. THAT STOCK WAS UP 88% AT THE CLOSE, UP AS MUCH AS 125% AT ITS HIGHS. LET'S GET TO ANOTHER ONE, PORTLAND GENERAL, ELECTRIC UTILITY. THIS MARKET CAP, BIGGER, 4.4 MILLION. IT WAS UP, AS IT WAS ANNOUNCED THAT THIS COMPANY WILL REPLACE DIGITAL TURBINE. THIS STOCK WAS UP 5%. QUALCOMM, THIS STOCK WAS UP 1.7%. WE SAW THE SEMICONDUCTOR NAMES MOVING IN TODAY'S TRADE. THIS WAS AMONG THE TOP OF THE NASDAQ 100. YOU SAW A POP IN THIS CHIPMAKERS AFTER A SUPREME COURT RULING, APPLE VERSUS QUALCOMM. APPLE REJECTED BY THE SUPREME COURT IN THAT PATENT CHALLENGE. THAT LIFTED THE SECTOR AND QUALCOMM AMONG THEM. TIM: YOU HAD TO DIG DEEP FOR SOME OF THOSE GAINERS. THE MICRO CAPS. LET'S TALK ABOUT THE DECLINERS. WE CHECK IN WITH THE AIRLINES AGAIN. WE GOT SPIRIT AIRLINES, TICKER, FINISHING THE DAY DOWN BY 8%. THE LATEST ON THE BATTLE FOR SPIRIT AIRLINES, SENDING SHARES AT THE ULTRA LOW COST CARRIER LOWER TODAY. FRONTIER, INCREASED ITS CASH OPTION FOR THE OFFER, ALONG WITH STOCK. IT VALUES THE AIRLINE AT $2.6 BILLION. JEFF BLUE -- JETBLUE SAID IT WAS WILLING TO PAY FOR SPIRIT. YOU HAVE THE SHAREHOLDER ADVISORY FIRM, SAYING THE FRONTIER OPTION IS "FAR SUPERIOR COMPARED TO WHAT JETBLUE OFFERED." EVEN THOUGH IT IS $1 BILLION LESS. ROMAINE: I THOUGHT THIS WAS INTERESTING. NOT ONLY DID YOU SEE THE BIG DROP,. FRONTIER WAS DOWN 11%. . THEY HAD THE BIG VOTE COMING UP ON THURSDAY. IT IS HARD TO UNDERSTAND WHY THEY WOULD THINK THE JETBLUE OFFER WITH THE INFERIOR FROM A FINANCIAL PERSPECTIVE. TIM: MAYBE IT IS FROM A REGULATORY PERSPECTIVE. THERE IS MORE OF A CHANCE THAT THIS DEAL IS GOING TO GET THROUGH WITH THESE COMBINED ULTRA TO LOT -- ULTRA TWO LOW-COST CARRIERS. THEY HAVE TO GET IT PAST THE REGULATORS FOR THIS TO GET APPROVED. DOES IT MEAN LOWER TICKET PRICES? THAT IS WHAT THE CEOS SAY. CAROL: NO. TIM: THEY NEED TO COME DOWN. CAROL: COME ON. TIM: JUST TESTING YOU GUYS OUT. CAROL: POST-COVID SPEAKING. TIM: OIL PRICES COMING DOWN, MAYBE. TAYLOR: WE -- ARE WE GOING TO MOVE ON TO YIELDS YET? TIM: SHARES LOWER BY 11%. 70% YEAR-TO-DATE. A COUPLE PIECES OF NEWS A DOWNGRADE OVER AT GOLDMAN SACHS. . WE HAD THE FTX NEWS FOR OUR OWN ANNIE MASSA COMING OUT TODAY SAYING FTX IS INTERESTED IN ROBINHOOD, A COMPETITOR TO COINBASE. TAYLOR: DO I GET TO GO NOW? MY TURN. DOUBLEHEADER. WEAKER COMING AFTER THAT, IT LEADS ME TO BELIEVE IF YOU ARE GETTING INTO THESE BIGGS -- BIG TALES ON THESE OPTIONS, WAS THAT NOT ENOUGH TO ENTICE THE MAN? COMING INTO THIS MARKET? . THEIR EXPECTATIONS THE YIELDS WILL CLIMB HIGHER FROM HERE. NOT A LOT OF NEWS, BUT WE WILL GET DECENT FED SPEAK THIS WEEK. I'M NOT SURE THE NARRATIVE WILL CHANGE EXCEPT LOOKING AT HOPEFULLY SOME ANCHORING AGAIN, SOME OF THESE INFLATIONARY EXPECTATIONS. NONETHELESS, GETTING DECENT YIELDS ACROSS THE CURVE. KATIE: IT IS INTERESTING, TO STICK ON THE OPTIONS, NOW THAT THE FED HAS LEFT THE BUILDING, YOU ARE SEEING MORE OF THOSE TALES BUT HAD BEEN HERE SO FAR THIS YEAR. THE SAME THING EASY IN THE CORPORATE CREDIT MARKET. THESE ISSUERS ARE HAVING TO OFFER BIGGER CONCESSIONS TO GET PEOPLE TO BUY THE DEBT. I DON'T KNOW, I'M FASCINATED. ROMAINE: I'M ALSO FASCINATED BY SOME OF THE RESILIENCY. I THINK YOU CAN POINT TO A LOT OF ECONOMIC INDICATORS THAT WOULD SUGGEST WE ARE HEADED FOR AN ECONOMIC DOWNTURN. YOU ARE NOT SEEING THAT REFLECTED IN THOSE CREDIT SPREADS YET, EVEN THE ONES THAT HAVE WIDENED ARE NOT WIDENING TO THE LEVELS WE WOULD NORMALLY SEE IN A RECESSIONARY ENVIRONMENT. CAROL: THAT IS A GOOD SIGN. WE SPOKE WITH AARON CANNON, HE SAID THE EASING IN THE INFLATIONARY PRESSURES WE SEE WITH THE SHIPPING RATES AND GOING THROUGH THE METALS MARKET, WE HAVE SEEN COMMODITIES OVERALL, EVEN OIL COME DOWN. WHETHER THAT WILL HELP THE FED ULTIMATELY GET, TO ONE IT NEEDS TO DO AND MAYBE STAVE OFF A RECESSION, FINGERS CROSSED. TIM: HE IS NOT READY TO. . CALL A BOTTOM. HE SAID MULTIPLE TIMES, A REMINDER THAT YOU DO NOT SEE A STOCK MARKET BOTTOM UNTIL THE FED STOPS RAISING RATES AND STARTS LOWERING THEM AGAIN. HE SAYS BEAR MARKET RALLY, PERHAPS. BUT NOT READY TO CALL A BOTTOM. HE SAYS VALUATIONS HAVE TO COME DOWN. ROMAINE: AND WE ARE GOING TO GET NIKE EARNINGS AFTER THE BOW LATER. I'M INTERESTED IN THIS ONE. IT HAS BEEN RESILIENT. WE HAVE TALKED ABOUT THE SURPRISE TO THE UPSIDE FOR SOMETHING LIKE THE PAST SEVEN OR EIGHT QUARTERS. YOU WONDER IF A COMPANY LIKE THAT THAT HAS DONE SO WELL IN MANAGING THE SUPPLY CHAIN, CAN'T A SORT OF HOLD ITS OWN IN THIS ENVIRONMENT, THEN WHAT HOPE IS THERE FOR THE OTHER RETAILERS? TAYLOR: FED SPEAK NEVER ENDS. EARNINGS SEASON NEVER ENDS. THE NIKE SEASON WILL BE INTERESTING. I TALKED ABOUT THIS ON FRIDAY. THE FED WANTS TO SEE THAT CONSUMER CRACK. THE FACT THAT CONSUMERS HAVE BEEN SO RESILIENT -- ROMAINE: NO. TAYLOR: ABSOLUTELY. WHAT DOES COOLING DEMAND LOOK LIKE? KATIE: INSTEAD OF A FED PUT, THERE IS A FED CALL. THE FED DOES NOT WANT THESE LOOSE FINANCIAL CONDITIONS BECAUSE THAT MAKES CONSUMERS FEEL BETTER. WE WILL START TO SPEND AND THEY ARE TRY TO STOP BY TO HELP THE SUPPLY DEMAND INFLATION BALANCES. THE FIRST TIME I READ A NOTE LIKE THAT. ROMAINE: STOP IT OR SOMETHING MODERATE? TAYLOR: MODERATE. WELL SAID. ROMAINE: AND I THINK THERE IS AN UPDATE DIFFERENCE. CAROL: YOU GET A LOT OF ECONOMIC DATA POINTS. CONSUMER SENTIMENT, CONFIDENCE, WE WILL SEE WHAT GOES ON WITH HOME SALE PRICES. WE HAVE SEEN THEM COME DOWN, OR AT LEAST CONCERNS OF SALES COMING DOWN BECAUSE OF HIGHER MORTGAGE RATES. WE WILL SEE WHAT IT SAYS ABOUT THE STRENGTH OF THE CONSUMER. TIM: IS IT TOO SOON TO TALK ABOUT NEXT WEEK'S JOB NUMBERS? CAROL: YES. WE NEED TO GET THROUGH JULY 4. TIM: I DON'T KNOW WHY THEY ARE DOING IT DURING THE HOLIDAY. ROMAINE: THEY ALWAYS DO. KATIE: JULY 1 IS FRIDAY. ROMAINE: THE DATA NEVER STOPS. THIS IS IMPORTANT STUFF. CAROL: BECAUSE EVERYBODY SEEN THE TOP GUNS EQUAL? ROMAINE: JULY 1 IS NOT ACTUALLY A HOLIDAY. TIM: NOTED. I WILL BE HERE THAT DAY. ROMAINE: JUST POINTING THAT OUT THE FOURTH IS A MONDAY. TIM: I WILL BE HERE. DON'T WORRY. CAROL: ARE WE DONE? WE HAVE TO RUN. THAT IS WHEN TO DO IT -- DID YOU HAVE SOMETHING MORE? ROMAINE: NO, NO. CAROL: THAT WILL DO IT FOR OUR CROSS-PLATFORM COVERAGE, RADIO, TV, WE DO IT ALL. WE WILL SEE YOU SAME TIME, SAME PLACE, TOMORROW. TAYLOR: COMING UP, WE ARE AWAITING NIKE'S QUARTERLY RESULTS. MAYBE EARNINGS, AS LONG AS HE GET THE POSITIVE E. WHAT THE RETAILER CAN TELL US ABOUT THE GLOBAL CONSUMER SPENDING AMID THIS INFLATION. THAT IS NEXT. THIS IS BLOOMBERG. ♪ ROMAINE: A SLUGGISH START TO THE WEEK FOR U.S. EQUITIES, COMING OFF OF LAST WEEK'S RALLY. A RALLY THAT MAY END UP PROVING TO BE AN OUTLIER, GIVEN THE MONTH END AND QUARTER END. . THE S & P 500 DOWN .3 PART 4% -- .3%. ONCE AGAIN, YOU ARE LOOKING AT THE OVERALL BACKDROP WITH 10 YEAR YIELD STARTING TO TAKE BACK HIGHER, UP .7%. BITCOIN HOLDING IN THE PATTERN WHERE IT HAS BEEN AROUND THE 2020 1000 LEVEL. RISK SENTIMENT HAS NOT MATERIALIZED FOR THAT. WHEN YOU TALK ABOUT WHAT WE SAW MOVE TODAY, IT WAS A LOT OF THOSE ENERGY NAMES. TO THE DOWNSIDE, IT WAS THOSE DISCRETIONARY NAMES. THE AMAZON'S OF THE WORLD, AIRLINES AS WELL, KEEPING AN EYE ON THE APPAREL MAKERS AS WELL. I WAS LOOKING AT COTTON. COTTON FUTURES IN THE U.S. HAVE COLLAPSED, DOWN 37% FROM WHERE IT WAS A MONTH AGO WHEN IT HIT THE DECK AT HIGH. AND A LOT OF THAT IS DIRECTLY TIED TO EXPECTATION FOR CONSUMER BEHAVIOR, WHAT THEY WILL BUY, AND WHAT THEY. ARE NOT GOING TO BUY THAT HAS PUT A LOT OF PRESSURE ON THOSE APPAREL MAKERS. AND A LOT OF PEOPLE ASSUME THE CONSUMER SPENDING SPREE IS NOT OVER, AND IT MAY BE MODERATING. THAT BRINGS US BACK TO THE BIG QUESTION, WHERE DO YOU THINK THE ECONOMY IS RIGHT NOW? INVESTORS WERE PRICING IN THIS IDEA OF A HIGHER TERMINAL RATE AS THE FED CONTINUED TO RAISE RATES INTO A RESILIENT ECONOMY. NOW SOME FOLKS THINK THAT MIGHT NOT BE THE CASE. THE IDEA THAT YOU HAVE TO REVISE EXPECTATIONS LOWER FROM WHERE THE FED WILL END UP HERE, AND WHEN YOU GET TO 2023, WE ARE NOW TALKING ABOUT RATE CUTS, AND NOT RATE HIKES. WE WILL SEE IF THAT PROVES TO BE TRUE, BECAUSE NO ONE WOULD EXPECT THAT, IF THEY DID NOT EXPECT SOME SORT OF RECESSIONARY ENVIRONMENT. TAYLOR: THAT LEADS AS NICELY INTO OUR NEXT CONVERSATION WHEN WE THINK ABOUT THE ECONOMIC DATA. SOME INTERESTING FED SPEAK THAT WE WILL BE GETTING AS WELL, WHEN YOU THINK ABOUT GDP, THE INFLATIONARY DATA, AND IN THE PREVIOUS SEGMENT, WE WERE TALKING ABOUT JOBS COMING NEXT FRIDAY INSTEAD OF THIS FRIDAY. LET'S DO THAT WITH ANDREW HUSBY, BLOOMBERG ECONOMICS. WHAT IS THE DATA THAT WILL BE CATCHING OR I? ANDREW: CERTAINLY FOR US AS WE THINK ABOUT THE ECONOMIC OUTLOOK, DECIDING WHAT PORTIONS OF THE SLOWDOWN WE ARE SEEING AS A RESULT OF WHAT WE ARE EXPECTING TO SEE IS THE FED HIKES RATE. SECTORS OF STARTING TO GET IMPACTED LIKE GOODS, MANUFACTURING, IN THE HOUSING SECTOR. WHAT IS GOING TO BE MORE WORRYING IF WE SEE SLOWDOWN ON THE CONSUMER SIDE, WE WILL GET CONSUMER SPENDING DATA LATER THIS WEEK. WE WILL GET ANOTHER ROUND OF KEY DATA ON JOBLESS CLAIMS. THAT IS SOMETHING THE FED WILL BE WATCHING CLOSELY. BUT IS A HIGH-FREQUENCY INDICATOR OF WHERE THE ECONOMY IS HEADED. KATIE: I WOULD LOVE TO BRING YOU INTO A DEBATE WE WERE HAVING IN THE SIMULCAST. WHEN IT COMES TO FED TIGHTENING AND THE CONSUMER, WHAT DOES THE FED WANT TO SEE? BUT CONSUMER RESILIENCE HAS BEEN A REAL NARRATIVE THROUGHOUT THE PANDEMIC OVER THE LAST TWO YEARS. THE POINT COULD BE MADE THAT THAT IS NOT NECESSARILY WHAT THE FED WANTS TO SEE AS IT TRIES TO COOL DEMAND IN THE ECONOMY. ANDREW: I THINK WHAT THE FED WANTS TO SEE IS DEMAND COOLS WITHOUT KICKING THE ECONOMY OFF OF THE LEDGE. I THINK IT WILL BE A DELICATE BALANCING ACT. THAT IS WHY YOU SEE MARKETS PRICING IN A BUNCH OF HIKES AND SOME CUTS NEXT YEAR. THAT FITS WITH OUR VIEW THAT IT IS LIKELY THE FED WILL HAVE TO DO MORE THAN MARKETS ARE EXPECTING, WHICH THEN RAISES RECESSION RISKS NEXT YEAR. I DON'T THINK THEY WILL TREAT A GOOD SECTOR DEMAND FALLING AS TOO WORRYING. IF YOU SEE IT IN THE HOUSING SECTOR, IF YOU SEE IT IN MORE DISCRETIONARY CATEGORIES OF SERVICES WHICH ARE LABOR-INTENSIVE AND THEY WANT THOSE JOBS TO KEEP COMING BACK WITHOUT COMING OFF. ROMAINE: WHY CAN'T THEY DO THAT BY TAMPING DOWN FINANCIAL CONDITIONS? I MAY BE ADDRESSING THE MORTGAGE MARKET WITHOUT GOING AFTER THE CONSUMER SPECIFICALLY? ANDREW: THAT IS A GOOD QUESTION. THIS IS A BLUNT TOOL THEY HAVE. IT IS -- YOU ARE SEEING GLOBAL SPILLOVERS, HOUSING MARKET COOLING IN TERMS OF THE FROTH. IT IS JUST A DELICATE BALANCING ACT, AND THEY KNOW THIS. THAT IS WHY POWELL HAS SAID THIS IS GOING TO BE -- THERE IS NO GUARANTEE WE DON'T GET A RECESSION. TAYLOR: ON THAT NOTE OF THE TIGHTENING OF THE FINANCIAL CONDITIONS, CERTAINLY DON'T WANT YOU TO OPINE ON THE EQUITY MARKETS. DO WE WANT TO WAIT TO HIT NIKE, ROMAINE? WHEN WE THINK ABOUT THE TIGHTENING OF THE FINANCIAL CONDITIONS, ROMAINE AND I WERE LOOKING AT AN INTERESTING NOTE, WHERE THE FED GETS A LITTLE NERVOUS WHEN THERE IS ALL OF THESE LOOSENING OF THE FINANCIAL CONDITIONS, THE INVESTOR FEELS WEALTHY, THEY START BUYING, THAT WORSENS THE INFLATIONARY IMPACTS. DO YOU START TO THINK ABOUT THAT? ANDREW: WE DO. WHERE YOU ARE GOING TO SEE IT IS WHETHER FINANCIAL CONDITIONS DO CONTINUE TO RESPOND TO WHAT THE FED IS TRYING TO SIGNAL. I THINK IT IS TWO THINGS. DOES INFLATION COME DOWN? WE SAW GOOD DATA IN TERMS OF ENERGY PRICES, GASOLINE PRICES, PLUS THE UNIVERSITY OF MICHIGAN READING WHICH DID COME OFF OF THAT SHOCK HIGH WE SAW IN JUNE. THAT WOULD MAKE YOU THINK THAT THE WEALTH EFFECT WILL COME ROARING BACK. BUT IF IT DOES, IT WILL MEAN THE FED HAS TO MOVE HARDER THAN MARKETS CURRENTLY THINK. TAYLOR: REALLY APPRECIATE IT. ANDREW HUSBY, ECONOMIST FOR BLOOMBERG ECONOMICS. BRINGING YOU BACK TO THE RESULTS WE ARE GETTING FROM NIKE, FOURTH-QUARTER REVENUE, $12.32 BILLION, AHEAD OF EXPECTATIONS OF $12.13 BILLION. IT GROWTH MARGIN LOOKS LIKE, 45% VERSUS ESTIMATES OF 46.7%. THE BOTTOM LINE, ROUGHLY IN LINE. WE ARE ALSO LOOKING AT CHINA REVENUE. THIS IS INTERESTING GIVEN THE SUPPLY CHAIN STORIES. FOURTH-QUARTER GREATEST CHINA REVENUE, $1.56 BILLION. THE ESTIMATE, 1.74 -- 1.7 $4 BILLION. A BIG MISS. LOOKS LIKE THEY WERE ABLE TO MAKE UP FOR THAT IN OTHER AREAS. ROMAINE: TO GO BACK TO THE DEBATE WE WERE HAVING EARLIER ABOUT INVENTORIES AND THE IDEA AS TO WHAT THOSE INVENTORIES MEAN, ELEVATED INVENTORIES, NIKE SAYING IT'S INVENTORIES RIGHT -- ROSE 23%, NOW AT $8.4 BILLION WORTH OF MERCHANDISE. IT DOES TALK ABOUT THE IDEA THAT THAT WAS DRIVEN, AND I'M QUOTING THEM HERE, BY THE ELEVATED IN TRANSIT INVENTORIES DUE TO EXTENDED LEADTIMES BY ONGOING SUPPLY CHAIN DISRUPTIONS. THE IDEA THAT THESE COMPANIES ARE TRYING TO FRONT RUN SUPPLY CHAIN ISSUES, MAKE SURE THEY HAVE ENOUGH SNEAKERS IN STOCK FOR KATIE. KATIE: TALK ABOUT NOT ENOUGH SNEAKERS, THE BUYBACK PROGRAM. $18 BILLION. A THEME WE HAVE BEEN SEEING LOOKING AT LOWER VALUATIONS, MAY BE TIME TO BUMP UP THE SHARE PRICE. YOU KNOW, WE HAVE THESE INTERESTING CONVERSATIONS, THE USE OF CASH. IF YOU ARE LOOKING AT AN $18 BILLION BUYBACK PROGRAM, IS THERE NO BETTER USE OF CASH BESIDES BUYING YOUR OWN STOCK, OR ARE YOU TRY TO SIGNAL TO THE MARKET WE DO BELIEVE THAT THE SHARE PRICE IS UNDERVALUED? KATIE: THAT PERHAPS THESE BIG DRAWDOWNS WE SEE ACROSS INDUSTRIES, MAY BE COMPANIES COMING IN AND BUYING THEIR OWN SHARES, IN MARK OF CONFIDENCE. UP TO PERCENT AFTER HOURS. AS MUCH AS 3.2% AFTER THE RESULTS CAME OUT. ROMAINE: WHEN YOU JOG, DO YOU WEAR THOSE THICK SHOES? KATIE: I LOVE THOSE. I AM REALLY INTO THEM. MAXIMUS. MINIMALIST. ROMAINE: BAREFOOT RUNNING. TAYLOR: WE WILL HAVE MORE ON NIKE AFTER THE NEXT BREAK, AS -- WITH POONAM GOYAL. WE WANT TO KEEP YOU UP-TO-DATE WITH NEWS AROUND THE WORLD WITH MARK CRUMPTON. MARK: THANK YOU SO MUCH. UKRAINIAN OFFICIALS SAY SCORES OF CIVILIANS WERE KILLED OR WOUNDED IN A RUSSIAN MISSILE ATTACK TODAY ON A CROWDED SHOPPING MALL IN UKRAINE'S CENTRAL CITY. UKRAINIAN PRESIDENT VOLODYMYR ZELENSKYY SAID THAT NEWS AND A TELEGRAM POST THAT THE NUMBER OF VICTIMS WAS "UNIMAGINABLE." INSIDER REPORTS MORE THAN 1000 CIVILIANS WERE INSIDE AT THE TIME OF THE ATTACK. IMAGES FROM THE SCENE SHOW GIANT PLUMES OF BLACK SMOKE FROM THE SHOPPING CENTER ENGULFED IN FLAMES. ACROSS COUNTRY AMTRAK TRAIN HIT A DUMP TRUCK IN MISSOURI, CAUSING SEVERAL CARS TO DERAIL, AND INJURING PASSENGERS. AMTRAK SAYS THE TRAIN WAS TRAVELING FROM LOS ANGELES TO CHICAGO WHEN IT STRUCK THE CONSTRUCTION VEHICLE AT A CROSSING IN MINDEN, MISSOURI, NORTHEAST OF KANSAS CITY. MORE THAN 240 PASSENGERS WERE SAID TO BE ON THE TRAIN. NO WORD ON THE NUMBER OF PEOPLE INJURED. THE HOUSE PANEL INVESTIGATING THE JANUARY 6 2021 INSURRECTION AT THE U.S. CAPITOL HAS CALLED A SURPRISE HEARING FOR TOMORROW TO "PRESENT RECENTLY OBTAINED EVIDENCE AND RECEIVE WITNESS TESTIMONY." THAT IS ACCORDING TO A STATEMENT. THE ANNOUNCEMENT COMES AFTER THE COMMITTEE SAID LAST WEEK IT PLANNED TO TAKE A PAUSE THROUGH THE MONTH OF JULY. FINNISH AND SWEDISH LEADERS WILL DISCUSS THE NATO BIDS WITH TURKISH PRESIDENT ERDOGAN TOMORROW. IN A PUSH TO CONVINCE HIM AT THE START OF THE SUMMIT IN MADRID, BUT THE FOUR WAY MEETING WHICH WILL INVOLVE NATO CHIEF YEN STOLTENBERG DID NOT MEAN IT WAS CLOSE TO LIFTING OBJECTIONS TO THE TWO NORDIC COUNTRIES JOINING THE MILITARY BLOCK. SWEDISH PRIME MINISTER MAGDALENE ANDERSON ADDRESSED SOME OF THE CONCERNS AT NATO HEADQUARTERS IN BRUSSELS. > > EARLIER TODAY, OFFICIALS FROM SWEDEN, FINLAND, TURKEY MET IN BRUSSELS FOR NEW ROUNDS OF TALKS. MY STRONG HOPE IS THAT THIS DIALOGUE CAN BE SUCCESSFULLY COMPUTED IN THE NEAR FUTURE. IDEALLY BEFORE THE SUMMIT. MARK: SHE HAS ACCUSED FINLAND AND SWEDEN OF PROVIDING A SAFE HAVEN FOR OUTLAWED KURDISH MILITARY -- MILITANTS AGAINST THE KURT -- THE TURKISH STATE HAS CLAIMED TENS OF THOUSANDS OF LIVES. GLOBAL NEWS, 24 HOURS A DAY, ON AIR AND ON BLOOMBERG QUICKTAKE, POWERED BY MORE THAN 2700 JOURNALISTS AND ANALYSTS IN OVER 120 COUNTRIES. I'M MARK CRUMPTON. THIS IS BLOOMBERG. ♪ ROMAINE: TURNING BACK TO NIKE, THEIR EARNINGS CROSSING A LITTLE WHILE AGO, FISCAL FOURTH Q. PRETTY MUCH COMING IN ABOVE ANALYST ESTIMATES, $12.3 BILLION IN REVENUE. THE EPS COMING IN AT $.90 VERSUS $.93 YEAR-OVER-YEAR. A LOT OF PEOPLE WILL FOCUS MORE ON THE BUYBACK, MORE IMPORTANTLY, ON THOSE INVENTORY LEVELS AND GROSS MARGINS. POONAM GOYAL JOINING US TO TALK ABOUT THIS, SENIOR U.S. RETAIL ANALYST FOR BLOOMBERG INTELLIGENCE. YOU CAN START WHEREVER YOU WANT, BUT I WOULD APPRECIATE IT IF YOU COULD START WITH WHAT IS GOING ON WITH THESE INVENTORIES. POONAM: INVENTORIES ARE HIGH AND WE ARE NOT SURPRISED, BECAUSE WE HAVE BEEN HEARING THE FED ACROSS RETAILERS, ACROSS THE BOARD. 23%, I THINK THEIR INVENTORY POSITION, IT WOULD BE INTERESTING TO FIND OUT HOW MUCH OF IT IS FOOTWEAR AND HOW MUCH OF IT IS APPARENT. IF YOU LOOK AT THE NUMBERS AND RETAIL, FOOTWEAR SALES WERE STRONG, BUT APPAREL CAME IN WEAKER. THE BUILD IS ON THE FOOTWEAR SIDE. IT IS LARGELY APPAREL THAT WE COULD SEE MORE DISCOUNTING, AND THAT IS NEVER A GOOD THING FOR MARGINS. AS WELL AS FOR THE BRAND. BECAUSE YOU DON'T WANT TO SEE NIKE MERCHANDISE ON SALE. CUSTOMERS TRAINED TO SHOP ON DISCOUNTS. TAYLOR: HOW IS THE HEALTH OF THE U.S. CONSUMER? POONAM: IT'S MIXED. IF YOU LOOK AT THE NUMBERS, NORTH AMERICA SALES, EVEN THOUGH THEY HAD A TOP LINE OF 3% VERSUS AN ESTIMATE OF 1.4%, NORTH AMERICA SALES CAME IN MORE THAN EXPECTED. THE BEAT CAME LARGELY FROM INDIA, UP 20%, VERSUS A 9.6%. CHINA, MUCH WEAKER. DOWN 20%. LARGELY DUE TO COVID LOCKDOWNS. IT WILL BE INTERESTING TO SEE WHAT THEY SAY ON THE CALL ABOUT THE LOCKDOWNS, HOPEFULLY LARGELY PASSED, AND THAT DEMAND IS TICKING UP THERE AGAIN. KATIE: LET'S TALK ABOUT CHINA, THE GREATER CHINA REVENUE, $1.56 BILLION. THE ESTIMATE WAS FOR $1.74 BILLION. IT WAS ALREADY EXPECTED TO BE WEAK, WEAKER THAN EXPECTED. WHAT IS YOUR TAKE? POONAM: I THINK IT IS DEFINITELY WEAKER THAN EXPECTED. I WOULD LIKE TO HEAR THEM SAY THAT THAT HAS BOTTOMED OUT AND CHINA IS GOING TO JUST PICK UP FROM HERE. WE DID HEAR THAT FROM BRANDS EARLIER IN THE MONTH WHERE THEY DID TALK ABOUT CHINA LOCKDOWNS ARE EASING AND PEOPLE ARE STARTING TO SHOP AGAIN. THAT IS A GOOD THING, IF NIKE SAYS THAT AGAIN ON THE CALL. THAT WOULD BE ENCOURAGING. BUT I AM VERY CONCERNED, MORE THAN CHINA NOW, ABOUT NORTH AMERICA. THE ENVIRONMENT HERE, THERE IS A LOT OF INFLATIONARY, AND IT IS A LARGE BUSINESS FOR THEM. CHINA, WE'LL TALK ABOUT CHINA A LOT, BUT CHINA IS 18% OF THEIR BUSINESS. NORTH AMERICA IS A BIGGER PIECE OF THE BUSINESS. AND I WOULD WANT TO KNOW HOW NORTH AMERICA IS TRACKING ON THIS CALL, AS WE MOVE INTO THEIR NEXT FISCAL YEAR. ROMAINE: WE WILL HAVE TO LEAVE IT THERE. POONAM GOYAL, SENIOR U.S. RETAIL ANALYST FOR BLOOMBERG INTELLIGENCE. A NICE UPDATE. WE HAVE TO TURN OUR ATTENTION BACK TO BREAKING NEWS. AN AMTRAK TRAIN THAT DERAILED IN MISSOURI IS BEING TREATED AS A MASS CASUALTY TO THE WASHINGTON POST. AMTRAK CONFIRMED A TRAIN DID DERAIL. EIGHT CARS HAVE DERAILED. THIS IS IN A TOWN NEAR MINDEN, MISSOURI, ABOUT A COUPLE HOURS EAST OF KANSAS CITY, MISSOURI. WE WILL KEEP AN EYE ON THAT AND SEE IF WE CAN BRING YOU MORE INFORMATION ABOUT POTENTIAL INJURIES. THAT DOES WRAP UP OUR COVERAGE FOR "BLOOMBERG MARKET: THE CLOSE." "TRIPLE TAKE" IS COMING UP NEXT. WE WILL LOOK AT THE POTENTIAL BUYBACKS AND DIVIDENDS THAT COULD RESULT. THIS IS BLOOMBERG.

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Bloomberg Markets: The Close (6/27/2022)

Romaine Bostick, Taylor Riggs & Katie Greifeld bring you the latest news and analysis leading up to the final minutes and seconds before the closing bell on Wall Street and tackles the EPA Supreme Court case, FTX seeking path for Robinhood deal and Nike earnings. Guests Today: Nancy Tengler of Laffer Tengler Investments, Mimi Duff of GenTrust, Jason Draho of UBS Global Wealth Management. (Source: Bloomberg)

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