farrell, lisa abramowitz and john -- and and reordering. jonathan: live from new york this morning, good morning, good morning to our audience worldwide. a decent close in that market yesterday but we can't say the same thing about the bond market. hawkish fed speak on repeat and we will talk about neil kashkari later with consumer confidence better than expected. just yesterday, the most important thing is bond issuance. the next 24 hours, more bond issuance for you. $44 billion of seven-year notes coming to market and the beige will be released and we will hear from the new york fed president for the first time a little later this morning. then you will hear from him again tomorrow. lisa: it's interesting after we heard from neil cash carry. he is more hawkish on the margins but as the reaction -- but is the reaction function changing given that confidence is coming in stronger-than-expected and auctions are the most important thing where there is a vacuum of data points. annmarie: to be fair on the auctions, it was after memorial day weekend and people are easing into the week. it certainly won't be more than two cuts said neil cash carry. we were talking about six or seven and he said is deafly not more than two. i'm more interested in williams tomorrow. maybe it's a place where he would want to shift, or change to tweaking the policy. jonathan: we should talk about the bond supply. we had to auctions yesterday. a little bit softer than expected and i think that move was reinforced by the bounce back in consumer confidence. ultimately a little bit softer than expected. lisa: that means the bond traded at a lower price and higher yield after it was issued and dealers were stuck taking down more of the notes, other investors were not as strongly bidding is the actual dealers were which is usually a sign of weaker demand. it's true a lot of people are on the beach but you would think if you got yield close to 5%, suddenly people with this is a good time to buy and maybe they'll take it back to the higher for longer and people are not biting. that is indicative of a lot of feelings and a lot of fear of what higher for longer means. jonathan: the 10 year is at 4.56. let's talk about a single name in the premarket, american airlines getting hammered in trading, down by close to 8%. they've cut the outlook and adjusted earnings will be lower down from a previous expectation. they had an expectation of 145. lisa: this has to do with higher costs and fears that maybe america's not doing as much to bring in the revenues. the chief revenue officer stepped down to questions about what their plan was and there were questions about maybe they are catering to a domestic base and ones that are more budget conscious which push them on a different plane compared to say delta variant annmarie: jeffries now says they have the stock as a whole no longer as of by. -- as a hold and no longer as a buy. jonathan: is it an airlines problem or an american airlines problem? it sounds like an american airlines problem more than airlines problem. lisa: that's with the reaction sounded like and it drags down other shares. maybe it's a buying opportunity for delta and united but people are not biting. jonathan: will we get adjustments from those companies in the next few days. we are lower on the s&p 500 by 0.6%. you could just own nvidia with a three-day move of 20%. the market can't move, 466 billion u.s. dollars market cap added to this company. that's insane, that's more than to mcdonald's. you pointed this out before, with that kind of move in a $2 trillion stock, two point $5 trillion stock, it's amazing to see that and not see the entire market rally. it shows the gravitational force of higher yields and the threat of maybe higher for longer is pulling down everything else even with the secular story of artificial intelligence. $2.8 billion and that's bonkers. this is what's coming up -- we will talk about the growing divide between u.s. consumers. higher bond yields are pushing futures lower and comments from neil kashkari and some dead auctions. neil kashkari says this -- what did you make of that fed speak? is it anything new? what would explain the weakness we saw in the bond issues yesterday? >> good to see you again. i don't think we learned anything hugely new here. the latest fomc minutes really did suggest there were quite a few participants who are getting a little uncomfortable with the whole financial condition. i think it's reasonable that they do so. this is a direct link between their policy-setting and their communication. it has been pretty weak recently. certain mega cap stocks have been on a tear and that provides some loosening of financial conditions and that's not what the fed wants to see. ultimately, the chances of hiking is fairly low and the fed would prefer to keep policy in a tight setting for longer as opposed to trying to tighten things because they could quickly lose control of the narrative and the financial conditions if they restarted hikes now. jonathan: people are consigned to the view that if we get a hike it will only be because the economy remains incredibly strong. i took a step back and thought is that the impression of clients? is that your impression of things? >> from an economy perspective, it's not a big deal. for 30 years, we have overestimated the significance of monetary policy changes on economic activity. the lesson we should have learned over these past 12-18 months is monetary policy is not really the deciding factor for economic decision-making 99 times out of a hundred. there are myriad other factors that drive the economy forward. it can influence monetary policy at the margin but not totally. it might cause a few disruptions from a market perspective. it's a hugely consensus trade and what happens if there is only one hike potentially on the table? you have to cut whatever it's not just one hike? what if it is two. you can quickly go from cutting one or two times to cutting seven if the date it was hot for a few months and we could start to price in considerable reset -- restarting of the hiking and i don't see that at all. lisa: you're saying if there were another rate hike, wouldn't materially change the economic outlook? with that massive move in nvidia, we still seen the market go nowhere. the market was priced in only right -- one rate cut by year end. are you saying the reason why stocks are so sensitive to any kind of iteration of fed policies because people are looking for an excuse to sell incredibly inflated valuations in stocks? >> i'm not sure that's true. i wish it were true because it was suggest there are more fundamental investors out there but i fear there's more fundamental investors guiding the equity market. the fed made a commitment it would do one hike and no more and the market believes that. i don't think it would be hugely disruptive in the equity market could take it in stride. there's two sides to the coin and they both work in equities favor. either earnings are going up or the fed will ease and that will support the equity situation. that's the way the story works until unemployment starts shooting materially higher we have to face a recession close up. if it was just one hike, that will not really have an economic impact and it would be almost a sign of strength and a confirmation that the u.s. economy is strong in equities would enjoy that. they've had to consider potentially a more significant additional tightening of policy. it would have to raise the prospects for a much more rapid and significant growth flowing and it should impact equity valuations by the whole discounting of future cash flow argument. one and done would not be a problem if the market were convinced of that and had to consider 4 hikes, that would be disruptive again and that's not what we are expecting. lisa: it sounds like you are frustrated by this stock market. everything is positive and it can never go down until it faces some sort of recession pressures is that where you are? >> i feel like it should be lying on a couch to have this conversation. jonathan: bond market therapist. >> it concerns me. it's frustration because i say that things are good but then they go on a tear. more about the confirmation of the fragility and they've confirmed the economic activity and they are learning the wrong lesson. when this happens, you build up into the minsky moments, the dislocation. you build up these risks for the system that comes from the sort of throwing away fundamental principles in investing. the valuation you have paid for a given asset is on predictive for the long term. when you have a significant concentration as we do on participation in the equity market, not just from u.s. to mess degree till investors but globally, that raises the prospect that if that turns around, it can become a disruptive force in the other direction. jonathan: what are you doing in fixed income? >> there is uncertainty and i'm sure there is an certainty over the growth in inflation. i would question whetherperiod certainty but is that reflected in asset prices? i think the bond market is currently compensating you for that uncertainty in a way the potentially the equity market is not. as always, we would advise diversification across asset classes and across geographies. we think duration is already attractive. we are quite happy to lean into some of the bond market weakness we have seen in the last few days and potentially we will see as we wrestle with the idea of wit -- of where the ped -- where the fed policy is headed. jonathan: good to see you as always. sounding like a frustrated bond manager. equity managers have an easy life, stocks go up until they don't. lisa: it's good news from stocks until it's not and you look at the face of some recessionary increase and then it's over. he says there is a lot of uncertainty and he can argue that there is uncertain -- there is certainty in equity but bonds reward you more. jonathan: equity futures are negative by 0.6% so let's give you up to and other stories. dani: jurors are expected to begin deliberations today on donald trump's hush money trial after more than six weeks of testimony, closing argument wrapped up last month and the prosecutor urged the jury to consider what he calls a mountain of evidence that showed trump tried to influence the 2016 election by paying a poor and start to stay silent about an election affair. the trump defense said project is failed to true to prove the records were false or the president intended to influence the election. conocophillips is in talks with acquiring marathon oil. the all stock deal would value marathon at more than $15 and would give conical control of assets in texas, oklahoma, north dakota and the permian basin. there is a deadline extension intake over talks for bhp para bob. the complicated deal structure was appose in the biggest concerns have not been addressed. bhp must wait six months before it can make another offer and that's your bloomberg reef. jonathan: thank you. this came from adam simon, professor of environmental studies. the conclusion in the paper is the amount of copper needed is essentially impossible for mining companies to produce. this is a big factor in that story between bhp. lisa: they say 49 billion dollars doesn't come close to the value in its whether bhp will offer them more and they have until 5 p.m. london time. annmarie: jeff curry says the best trait he seen in his lifetime. jonathan: more on that later. up next, the white house holding the line. >> i have no policy changes to speak to, it just happened and the israelis will investigate it and we will be taking great interest in what they find in that investigation. jonathan: that conversation is coming up next. live from new york city this morning, good morning. ♪ [introspective music] recipes. recipes that are more than their ingredients. ♪ [smoke alarm] recipes written by hand and lost to time... can now be analyzed and restored using the power of dell ai. preserving memories and helping to write new ones. ♪ hey you, with the small business... ...whoa... you've got all kinds of bright ideas, that your customers need to know about. constant contact makes it easy. with everything from managing your social posts, and events, to email and sms marketing. constant contact delivers all the tools you need to help your business grow. get started today at constantcontact.com constant contact. helping the small stand tall. ♪ jonathan: live from new york city, equity futures are negative by zero .6% on the s&p 500 with a teasing close to the session yesterday. not in the bond market that with yields up again by a basis point or two. more on that later. the white house is holding the line this morning. >> i have no policy changes to speak to. it just happened in the israelis will investigate it and we will take great interest in what they find in that investigation. it's not in israel's best interest and is not in our best interest for israel to become increasingly isolated on the world stage. jonathan: the white house sang a deadly israeli airstrike in rafah cap joe biden from sending arms shipments to the company is international condemnation against israel continues to grow. elliot ackerman says this -- elliott ackerman joins us now for more. great to catch up with you. let's play the what if. what with this conflict look like without u.s. support? >> if makes the margins for prosecuting the conflict much more tight for the israelis. it also would further isolate them but also further make it more difficult for the u.s. to influence conditions on the ground. to me, it seems a divided administration is appropriate when it comes to israel and the fact that we've had another incident of civilian casualties. annmarie: what do you view as the president's redline that comes to israel? >> i'm not completely sure that there is some hidden redline here. if there is one thing president biden probably has learned from his time during the obama administration it's actively telegraphing redlines is not strategically wise. i'm sure there is a lot of frustration behind the scenes and sometimes the frustration spills out into the public view about israel's prosecution of the war with casualties but up to this point, israel's inability to clearly articulate on the world stage what the endgame is. where is this all leading? the biden administration in the world can see the offramp is the purpose. annmarie: israeli forces have three susceptor of gossett so is this the start of a major ground invasion? >> it most certainly is. we have seen multiple incursions by israeli forces but what we are not seeing is a clear vision of how those incursions lead to a cessation of the word ultimately to whatever israel considers a victory. because it is not being clearly communicated, is become increasingly difficult to see where this is leading. that is trying the patience of israel's allies in the patient's of public opinion in the world. annmarie: i'm wondering if this is going to irk the white house because yesterday, kirby said we won't support a major ground operation in rafah and the news overnight is that they were there in the center of rafah. could this potentially be giving a final straw for the biden administration? >> i would be surprised if it was a final straw for the biden administration. often times what is said publicly is different than what is said in back channels. u.s. support for israel is very deep. although we are seeing an increasing -- an increase in optics, everyone in the white house continues to remember who started this war. the strategy that hamas has brought since the war started october 7 which has been one to take the entire civilian population of palestine hostage to create situations in which civilian casualties are not likely in order to turn global opinion against the israelis. lisa: how much do you see an increasing divergence between the united states and europe? we sought norway and ireland recognize the palestinian state. with respect to the ukrainian conflict as well as iran, we've seen a real discrepancy between the european view and the u.s. view. do you see this is something materially widening in the past few weeks? >> i do and i think by design, the attacks on a tovar seven were made to elicit a certain type of response and part of that response was to place strain between israel's allies. it was to show where there was daylight. as much is this is a war that's being prosecuted locally in gaza, it's also a war that's happening on much broader stage. we've seen the strain that exist between the u.s. and its european allies. there are also fears that have existed since there's been a regional war in the middle east. jonathan: you can see clear and pleasant -- clear and present daylight and the electorate as well. i want to talk about iran as well. wall street journal reported that the biden white has a pressing allies not to confront iran on their nuclear program. what is the policy of this administration towards iran? is there one? >> it would certainly seem to be a rather interim policy now. you are also seeing the incoherence follows on many years of appeasing the iranians. the iranians have their fingerprints all over israel and gaza. right now it would seem a stronger hand against the iranians would probably be the better course particularly considering the weakness that exists within the regime. sometimes we set up i ran as a -- as 10 feet tall and they are not necessarily in we should treat them accordingly. jonathan: thank you for that final word. that's the latest in the middle east. you asked the question yesterday -- annmarie: we also reported that iran increased its stockpile of near bomb grade uranium. the united states doesn't potentially want to go to iran and put more sanctions on them, very different policy than the europeans want to see now. jonathan: they are unwilling to take a strong position on this because they are unwilling to disrupt the global energy market. many people might say possibly you would agree with them that this is about the oil market going into the election in november? lisa: that's why people are drawing a parallel between the stance in iran. their stance with ukraine and not going after assets in russia, energy related assets in russia diverging from the european allies on that front. jonathan: brent crude is $84 90 cents. coming up shortly, we will catch up as there is the toughest election since taking power in south africa. that conversation is coming up next. from new york city, this is bloomberg. ♪ (traffic noises) (♪♪) the road to opportunity. is often the road overlooked. 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