Surveillance on tv and radio alongside Lisa Abramowicz im jonathan ferro. Your equity market positive by 0. 2 on the s p come on a threeday winning streak on the s p 500. If you want to focus on the data, the week starts today. Lisa ppi today ahead of cpi tomorrow. Its interesting whether the Economic Data is what is driving gains we are seeing in stocks in frank the in bonds was arguably which is arguably what is leading stocks. Whether it is haven trade or listening to the fed speak or just a blowoff of the tough we saw last week. Lisa we talked a lot about it jonathan we talked a lot about in the past when he four hours. The fed is comfortable with the market doing the work for them and the work the market is not doing the work for them. Lisa nikki bowman later this morning. Even the hawkish talk seems to be dampening the tone a little bit basically saying maybe one more hike is needed but softening the tone around the edges, it seems like everybody has been taken off guard with the rise in the longterm yields. Theres this question of how much does that do the work for them and then if the market gets ahead of that, and pushes yields down, a rate hike is back on the table. Jonathan she is sounding lonely. Ppi late as lisa indicated, cpi tomorrow. Then the Bank Earnings kicking off friday. Exxon pioneer talked about it for the last week or so following route or from the wall street journal. Reporting at bloomberg theyre close to closing the 50 billion deal. 250 a share the offer. Lisa basically it would make exxon the big kahuna and the Permian Basin which is the most productive shale area in the u. S. And basically this would allow them to act better as a swing producer and could increase reduction more quickly and agile he in response to shocks. I wonder how much the timing of this is because they have a lot of money and what else they will do but also there will not be as much pushback from a regulatory standpoint. Given the fact the u. S. Would like Energy Independence more than maybe in previous years. Jonathan 243 the premarket, close to that offer price, the reported offer price. Looking out for a possible announcement as soon as this morning so look out for that. Also need to talk about lvmh, the luxury goods producer in europe. At one point their stock was higher by close to 30 . The peak was in spring and then we rolled over aggressively into the end of the postpandemic luxury brood. It is the end. Lisa who was at the called the topper for quick top perfectly and said jonathan clear emu wealth. Lisa yes. That is perfect. Its hard to get my head around this to say this is a softening in consumer trends. This is basically normalization, it is all right you bought everything you could, you are done, go home. Jonathan they said almost exactly that going back to trend and working out what trend or normal is. Just a fantastic call. On this program he talked about it read sticking with laszlo of lvmh. The latest on day five of the israel hamas war. The numbers coming out of this deeply upsetting. According to the idea spokesman, the overwhelming the overwhelming numbers of the fatalities are civilians. Lisa this new cycle has been difficult and anyone that sees the images and sees the stories coming out and as categorically that hamass actions were horrific lost touch with their humanity. There is a question of what to do next and what the u. S. Is role and International Role is at a time when everyone is concerned about this escalating away that becomes protracted and difficult broadly. Jonathan print plenty of states from the u. S. Side. We had a passion address from the united president of the United States and Antony Blinken will travel from wednesday to friday. The state Department Said we had in the last few hours. The United States believes 20 american citizens are missing after the attack over the weekend. We still do not know the number of hostages held according to the National Security advisor, Jake Sullivan. Still trying to get clarity on a major issue. Lisa which speaks to the fact that the death toll is going up and not necessarily because more people have been killed but more bodies have been found. There is a discovery process that is modeling and horrific for everyone involved but it shows the scope of uncertainty of who is accounted for and who is not in the people who may have been taken to gaza. Jonathan we try to get the clarity and consequences of this. Julie norman joining us in 10 minutes time. Your equity market on the s p 500 positive by 0. 2 . The rally continues in the treasury market. Yields down by another 10 basis points. We were thinking about 5 on friday after the payrolls report. We are back down to 4535 455. Lisa the drop would be the most for today drop going back to july at some point to may. Does the data verify this . This is sort of the true test, 8 30 a. M. We do the september ppi, the precursor to cpi tomorrow. Ahead of the 1 00 p. M. Auction, a 35 Million Dollar auction of 10year notes coming at a time of disinflation yes but skepticism about whether this will stick or whether it is transitory disinflation. This is where people are at. Today the feds because continue. Chris waller, rafael bostic, boston fed president Susan Collins and 2 00 and we get the fomc minutes from last months meeting, though you did mention how are dated are these . Honestly. What we going to learn from this . Jonathan the 10 years back to her was so maybe it is relevant. [laughter] lisa thats true. Maybe it is relevant, though i guess maybe people would believe more from the statements were of some of the fed officials. Today is the big day when it comes to trying to choose leadership in the house. I believe the republicans are going to gather around 10 00 a. M. This morning to try to settle on a speaker. They are probably going to hold a vote with the big battle between louisiana, Steve Scalise, louisianas Steve Scalise and jim jordan. Jonathan joining us now is the investment director at invesco solutions. Ben, you seem to like Equity Solutions getting closer to 5 . Do like them now that they are closer to 450 . Ben good morning and yes we do. Im aware it might seem hopelessly optimistic but our suggestion are these inflationary trends in place, that inflationary pressures are abating can continue, coupled with resilience growth could be a pleasant mix for equities. Certainly unease about the positive and balance. That is where we set. Jonathan in the equity market, what do you like and why . Ben i think, based on as i said that marginal view of being positive on equities, it has to Say Something of a barbell approach. On the basis we think there is an economic slowdown, we do like u. S. Equities and therefore that is considered some of the higherquality equity market around u. S. Equities by proxy liking the loosely defined Technology Sector but i think we will have to barbell that. Heaven forbid you get a repeat of 2022, inflationary pressures resurgent, at least given by what is happening in Commodity Markets and the Energy Complex could do well. A barbell between loosely defined tech sector and Energy Markets. Lisa i feel a little like we are playing whackamole with the daily narrative and trying to understand how recent events factor into longerterm decisionmaking and in general people stop process. It sounds like you have not wavered from your views and really everything that we have been talking about factors in not as noise but sort of on the peripheries to watch. Is that an accurate characterization . Ben i think it is fair that we are more into a longerterm term view, shorterterm dynamics can really leave you chasing your tail in this cruel world of investing and i think the risk tower view is inflationary pressures return and i can be a function of geopolitics which is harrowing story but also an unpredictable one. I think also we are worried about the resilient growth story, the jobs market in good shape, and these inflationary trends leading to boast boost in real income. Lower inflation could lead to higher inflation, real income growth. We are cautious on this view, were ready to move on it, particularly if equity markets are strong into year end that would alert us to potentially into a more defensive position. The longterm view remains for equities as well. Lisa what would make he would trigger that view . What would you have to see to give you some sort of sense that maybe things are too strong, especially in light of the balance a lot of people are looking toward, earnings that kick off friday. Friday . Ben i think it is signs inflationary expectations are climbing again, maybe you can see that in elements of the bond market, maybe you sort of see it in commodity prices, and unfortunately unfortunate develop its and the geopolitical framework. So those are the things that give us the greatest concern. We recognize the political shenanigans going on can make hedge funds put whack trades on the shortterm but over the medium term we think it is inflation is going to be underpinned market direction and difficult back, that will give us more cautious. Jonathan tenure down by 10 basis points on the bond move. The whole curve, twos out to 30s yesterday, double digit lower. A 10 year yield at 455. I think it was Neel Kashkari of the minneapolis fed yesterday saying he was perplexed by the move in yields. Have you been equally perplexed . Ben i guess these daytoday moves are quite astounding and sometimes difficult to square as one narrative unfolds based on the following days move. I think we except bond yields moved higher at the longer end relative to the shorter end because maybe there is some supply demand dynamics there, deficits in the face of inverted yield curve, not much value in the long and but likewise i think it is basically the u. S. Economy can probably deal with high rates. Not adverse to the move in general for higher yields but when we go from here . We think wants to could be of volatile period, with inflationary trends continuing and abating at the margin, bond yields hover around this lever level, move a little lower, possibly, and that is good for equities. Jonathan thank you. Let somebody market jargon but essentially what was taking place was the long and was selling off, yields were going higher and i we see a bigger move in the long and what yields are going bigger. The differential drops to 40 and the curve is flatter by nine basis points on the day. Lisa what this tells me of the long end is swinging around and nobody can really understand where it will settle out and there is more stability in the frontend because fed policy seems more certain the longer term inflation dynamics and longerterm term premium, the idea where the fiscal picture fits in to inflation and investor appetite. Jonathan could not have said it better myself, this is what kashkari had to say yesterday, it is possible rising yield may mean the fed has to do less. What do falling yields mean . That they have to do more . Lisa potentially. If the yields are falling for the wrong reason. The issue is, and mary daly talked about this extensively and others have well, markets of people hate uncertainty. What were dealing with his deep uncertainty not only about nearterm Economic Data about the longerterm paradigm of where we are going to settle out. As a result you see these massive swings that are contributing to the lack of certainty that you can feel underpinning a lot of investing. Jonathan we spoke to j. P. Morgan the last weekend. Made the point to that maybe we should get used to this on the bigger moves at the long and and not trying to scribe too much of a narrative to it. Lisa the problem is this underpins so many instruments. Its one thing to say that about amc but another about benchmark treasuries the under been the underpinned the borrowing costs on car loans and Everything Else. At a certain point it has consequences longerterm. Jonathan have it back. It is not a good game to get involved in. Lisa at some point the data will try to go with the game. Jonathan ppi this morning, cpi tomorrow. Sebastian page in the next hour. This is bloomberg. Before you even step inside . Discover the Magnolia Home james hardie collection. Available now in siding colors, styles and textures. Curated by joanna gaines. If youre trying to get a view of the whole organizational Financial Health and youre trying to do that through multiple systems, that makes it very, very cumbersome. Its not just tech, its not just people. Its how they Work Together to provide that experience to the customer. As a finance organization that is what you want to do. At ameriprise financial, our advice is personalized, based on your goals, whatever they may be. All that planning has paid off. Looks like you can make this work. We can make this work. And the feeling of confidence that comes from our advice . I can make this work. That seems to be universal. I can make this work. I can make this work. No wonder more than 9 out of 10 clients are likely to recommend us. Because advice worth listening to is advice worth talking about. Ameriprise financial. We must be crystal clear, we stand with israel. The department of defense has moved the uss ford carrier stryker to the Eastern Mediterranean and bolstered our your aircraft resins. We stand ready to move assets as needed. Let me say again, any country, any organization, anyone thinking of taking advantage of the situation, i have one word, dont. Jonathan we stand with israel, the words of the president of the United States, the assistance from america sounds like as follows, support that arrived or would the on its way includes ammunition, interceptors, and the Worlds Largest aircraft carrier. Lisa theres a question about where the u. S. Really draws the line in terms of stepping in or not area they said the goal is deterrence, to deter a particular in particular lebanon and syria and hezbollah from wobbling lobbing some attack from the north. There is a question about where the redline is in the big issue, when does this escalate to something that draws in more countries and more human lives . Jonathan if you look at the marquis would not have a clue any of this is happening. Equities on the s p, three days of gains, could become day for on s p 500, positive by 0. 2 . Maybe a hand from this monster move in the bond market but we are off the back of five weeks of climbing another falling. Yields down by 10 basis points on a 10 year, 455 4. 5562. Lisa coldhearted and that is an accurate description. People are looking at money which seems like an insignificant concept in a moment of human tragedy but if that is your job that is your job. That is where markets are at this moment. Coldhearted markets can change on a dime if suddenly oil is affected in a significant way. Jonathan this comes down to iran. This is what Jake Sullivan had to say about the iran question at the moment. While iran plays this broad role, a sustained role in providing support and capabilities to hamas in terms of this particular attack, over the weekend, we dont currently have the information. We will continue to look for it. It is a question in a question in a question we have been asking. When you hear things like that, is that a distinction without a difference . That is what i know you are trying to get into with john kirby yesterday. Lisa basically whats the difference between knowing they orchestrated something and that they financed it, helped with the planning, on a peripheral level. Wheres that line in the sand and how much is this a lack of willingness to and for good reason potentially, go into iran and escalate in that way because if you deem them to have a orchestrating hand in this and dont take that action, that sends a signal too. You have seen the reluctance in the israeli and you aside and how much of this they have decided it is unclear whether we want to take the extra step area step. Jonathan joining us now is julie norman, wonderful to hear from you. Let me offer you the chance to answer the question, is that a distinction without a difference . I think its important to differentiate on this and it is interesting that israel in particular is being cautious to pin blame directly on iran. Israel and the u. S. Have long known iran has funded hamas, provided much of their weaponry, but this operation does look to be different and importantly a direct pin on iran would escalate the region quickly. This would just not be israel and iran as two states, it would include all of irans proxy groups, hezbollah, proxy groups, and elsewhere. It could blow quickly and i think the u. S. And israel are aware of that and of their goals in the coming days will be containment along with retribution and deterrence. That is on everyones mind right now or it it does not mean iran will not play into this but i think, for the immediate future, cooler heads are trying to figure out where exactly to place the blame and act accordingly. Jonathan walk us through the tension in the words you used. Whats the contradiction between retribution and containment . Are those things compatible . Julie i think this will be a challenge the next few days, the next few weeks. On the one hand of course israel once retribution for these attacks, they want to deter a broader conflict as does the u. S. But at the same time you are trying to contain the conflict as we spoke about whether it is in the west bank in has a lot or throughout the region or over the longterm. Israel, if they launch a ground offensive, it will be very difficult. Gaza is a highly populated urban area. They would face mass casualties for Israeli Military personnel, for Palestinian Civilians which we are already seeing and the dozens of hostages being held in gaza. This would be tricky, it is also tricky to oust hamas as a group, very tricky to know what would be next for gaza. I think the road ahead is going to be challenging for israel. We have seen i wo