Seven words, im Jonathan Ferro. U. S. Retail sales before we get there, an ecb retail story. It deadline for taking on the detroit three. Tom ill start with the cut up clock for inflation, people digging into inflation, could be shows many significant disinflation and that is what Christine Lagarde is to confront. If there is rates, are they doing the wrong time . Jonathan we are split down the middle. Tom citigroup, bnp paribas, there is a long list and i think that list is growing after we heard the last couple of days. Lisa the market has been pressing since the midyear that the ecb is would you raise rates for the current 3. 75 . The question is how are they going to do it . Are they going to into get a hold and then indicate theyre going to raise rates further . Is there any variation from that particular iteration of decisions . Tom American Airlines and what we are seeing there, i think Helane Becker joins us today, but there is disinflation in the air and yet in europe we are talking about inflation. This thursday is a huge pivot point and a real point of tension. Jonathan does this sound like disinflation . Uaw taking on the detroit big three with 36 pay raises. This is what is on the table. Ford has proposed 20 over four years. Gm has offered 16 . There is still a big gap between the two and we might not close by midnight. Tom lets get to the calendar here, 10 00 p. M. Tonight is where they might get in front. There may be an announcement before midnight tonight, cignarella will come out with a pumpkin cinderella will come out with a pumpkin. Jonathan it could be at several locations. It could be a limited strike. They wont tell you because they dont want the manufacturers to plan for the potential strike. Lisa they wanted to be maximally disruptive without the maximum economic hit. That is why 10 5 00 p. M. You will hear from shawn van as he comes out. Tom for all of us on radio and television, it is like there is no countdown clock today, it is just a neverending. It is going to go to the entire day. You listen i said to somebody yesterday this may be the most Important Press conference Christine Lagarde has ever held. Jonathan an indecisive ecb. I have got to make a decision. Tom is germany driving the bus or his portugal driving the bus . Her answer will be interesting. Jonathan germany is driving the bus, i am not sure what they would ask for. They have got a tough economy. Tom this is a fascinating day. The vix, 13. 3, these are terrible markets. Jonathan equity futures given all the drama were talking about are positive on the s p 500. Yields are higher bicycle basis point. The euro going absolutely nowhere, 1. 0729. Tom the major issue i have is do you think the white titaniumsesame . White titanium iphone says me . Or should i do a couple reach . Jonathan are you doing the family plan . Is everybody upgrading . Have you managed to construct this in a way in which you are hardly paying any money . Tom i think i have. I did it on the apple website. At t clearly is the most desperate and the other two are falling out. Jonathan we can talk about this later, maybe. I have a feeling this is really what you want to talk about, not the ecb or the unions or the data coming at. Tom i think i can find a white iphone in a bar faster than a black one. Lisa Christine Lagarde is going to talk about her iphone purchases, no she will not. We get the ecb Rate Decision followed by a press conference. Christine lagarde has a difficult needle to thread. She is looking at inflation of 5 , still too high. They are only going to downgrade to 3 next year. Stuck between a rock and a hard place. She might say stagflation, the nightmare. We get u. S. Upi and retail sales. I am more interested in retail sales and the potential of a negative headline print, even with what we are seeing from gas prices. Auto presses and auto sales volume has been coming down. Can consumers keep observing the price increases Companies Need to charge to breakeven . 11 59 is the deadline for uaw negotiations. I am watching the 10 00 p. M. Press conference. It will be interesting to understand their strategy of how the plan to wage a war against the art, factors without losing client in terms of reading economic havoc at a time of is the moment. Jonathan for kinnard to close the gap. Drag now is Ben Gutteridge. Wonderful to start with you. What is there to like about the u. S. Equity market currently . Ben i think quite a bit. The backdrop is of resilient growth and a policy cohort that will probably decide to go on hold for beer. Less hawkish policy could fuel more gains in the u. S. Equity market. With all of the other longstanding tailwinds for the u. S. Equity market, including innovation and where shore models where shareholders. Tom one of my heroes, erica pentecost is a giant in my mind. Are the systems within the Eric Pentecost textbook still at play . At invesco, are you making of the theories as you go or is this finance and economics from our models of the past that we can use now . Ben fascinating reference, it does not come up much. We are not making it up as we go, i can assure you. But my job is not so much making economics forecast as investment forecast. If our view is to pinpoint economic forecast, the economy can be relatively resilient coupled with policy that would take a pause on hiking and so is relatively more, to relatively more accommodative. For the time being, it is not as the not such a bad period. Tom given what you said about a resilient economy, does 60 40 work . Ben the 60 works. The 40 should do better. Clearly it has been a dreadful part of the portfolio for 18 months. The bond component looks more asymmetric, there should be less downside. If we have the disinflationary narrative, the cbo report yesterday supports the idea that the trends are still disinflationary. That should come through. Disinflationary backdrop would be okay for the 40. We always encourage more diversification and real assets and a bit of cash. Not to be troubled by a 60 40 portfolio. Lisa it feels like trading the end of a cycle is like dancing on the head of it. Figuring out when you get cap last on the momentum, the disinflation, the policy holds before reflation before session sets in. How do you know when the end of cycle season has reached the end . Ben that is the point, it is very difficult to know. Swinging too divisively, there are some risks in that. End of cycle behavior does lend itself toward investors moving towards areas of secure growth, that would be Like Technology and u. S. Equities. All of the sessions are off all recessions are awful, but this is mild versus more recent recessions. That encourages you to be more overweight equities. You have to brace for volatility but perhaps it would be his punishing. That encourages the modest to overweight equities. Lisa the areas you focused where the u. S. And you are more overweight u. S. Than elsewhere. In europe, where does that come from . The banks are passing along these higher rates without the prospect of months. Youre facing headwinds, how do you get a disaster about european equities . Ben it is quite hard to do. The evaluation is a starting point. There is not too much thereafter. The headwinds are challenging. Certainly that financial crisis at the start of the year, they want to show their rituals. Policy not yet getting favorable and clearly china, the impact china has on the european economy is also a challenge. I would look to the ecb to get more accommodative and for chinese policy to get more stimulative before moving more towards european equities. Not too far away. Jonathan hike window hike or no hike . Ben i would say hike. Jonathan Ben Gutteridge joining the team of people looking for a hike a little later. It is so split right now for the ecb. A lot people starting to rethink what we could get from the ecb. We had a report from workers suggesting may be in the 2024 forecast for inflation that is revised higher to above 3 . I have good news for our friend from dubai moving to new york. Manhattan ritz topic right on cue manhattan rates topping right on cue. Tom he has a view of the east river, august up all good stuff. If you have breakfast with Jonathan Ferro and minutes together, you only understand one every four words. The british accent and the irish accent. Lisa i am offended and im not even there. Jonathan media rent for new leases last month, 4400. Under this part of good news, you would expect august to be really hot and based on this data, it was not that hard at all. Lisa prices are topping out, they are still up 35 where they were in august 2021. It is too expensive and i dont expect price declines. And if they dont expect price declines. Tom as is that with paul sweeney, where you analyze inflation, you have to wait a couple of hours. You cannot do two minutes in. You have to break it down like David Rosenberg would do. The rest of it is going the other way, threemonth annualized. Lisa not car insurance. Tom it is very threeish. Jonathan is that what we are calling it . Lisa mentioned 35 higher than august 2021, 7 from a year ago. Terry haines joining us next on the looming uaw strike from new york city, good morning. We are making progress at the negotiating tables. As you heard, we are very far apart on our key priorities. To win, we are likely to take action. We are preparing to strike these companies in a way they have never seen before. Jonathan the deadline is midnight tonight. That was sean fain outlining the plans to strike against the three automakers. An offer from uaw of a 36 pay raise. Ford proposed 20 raises. Gm offering 18 . The land is offering 17. 5 . That is to a widespread, can we close it . Tom how teamsters was that . The teamsters thing changed the debate, the tone, the body language. This guy knows he has his union behind him. Jonathan has he got the president behind him . Tom i dont know. That tone of voice i did not hear two or three years ago. Lisa this is a damned if he does, damned if he doesnt think. There has not been involvement by the white house. They get involved and stave off a strike, they are bad. If they get some resolution that hurts anyone, they are bad. Either way, they will not be looked at well. Jonathan there is a bit of loselose to this one. Tom yeah. Are you talking ecb or joe . Jonathan the strike that would happen later on this evening. I did not switch. [laughter] i could talk about the ecb. Tom i am fascinated who they pick as the strike company. Jonathan maybe all three in different locations. I think theyre being cagey about the strategy because they dont want the automakers to plan for it. Tom terry haines will be up there. We have a two hour conversation with terry haines. He is with pangaea policy. He is the only one who will remember this and lisa and john have some zeus questions, including uaw. There we were on the couch in 1968 and lbj and vietnam said i give up. David ignatius dropped a bombshell two days ago. Ann marie horton and i went back and forth on it. When when is biden going to do an lbj . Terry right now i think never. They put a situation in place where he is the oil through to find any party they put a situation in place where he is the only alternative in the party. You have the washington chattering classes going on about the need for change but there is no alternative. Folks are not thrilled about the prospect of biden standing side and having a freeforall. Tom back to Grover Cleveland alexander, that is the way the democrats do it. Where have the democrats been a smooth operation out of a campaign . They are supposed to have a complete mess to get to the convention, right . Terry two things i can say about democrats is insert the will rogers comment about belonging to no organized political party. The second thing is when it is time to wax somebody whack somebody, democrats are better at that than republicans. I dont see the situation with President Biden changing. Lisa do you expect a strike or go strike and how will the white house deal with it . Terry my instinct is no strike. Simply, they are not negotiating in public. That is always a good sign whether you were talking about politics or union organizations. The union was clear about what they wanted which was to get back in front of the wage train and protect their workers. Bible occasion, they are being clear about what sort of overreach there is. Number two, the automakers are motivated to have some sort of a resolution. Thirdly, as you pointed out, looking in the background is the white house which was a resolution and will try to apply some pressure. Lisa it seems there has not been that much involvement from the white house. There is a report talking about individuals involved. It has been the active secretary and they have not named a full labor secretary at this point. Genes burling, white house advisor, has also been a voice. Do you think that was a mistake . Terry having sperling and sue involved is an indication of sues engagement by the white house. Jean is a very serious guy, the paper secretary would expected dish would have expected to be involved. Those seem to me like the right people. The question to me is rhetorically and in a bully pulpit since what biden is willing to do. This is someone who claims he is the most prounion president ever so roosevelt is spinning in his grave heard the uaw created the american middle class and deserves an inappropriate contract. Biden sees the negotiation as essential to pushing bev transition forward. The ev transition forward. The white house is going to have to stay involved. You pointed out the two bad choices. The downside is potentially worse than the upside. They have got to get involved for the upside. Lisa what is the ideal outcome for this white house . Terry the ideal is a contract that is accepted by all sides that shows Real Movement forward , that the president can push to say this position say this pushes my ideals about Union Membership and union participation and he gets the endorsement of the uaw. Tom i went back two years looking at union discussions between trump and biden. Do you have any knowledge or perspective of if uaw line workers are supporting the former president or the present president . Terry i dont have anything granular on that. I will say that there has been for some time a major disconnect between what Union Leadership wants their rankandfile to vote and how they actually vote. The same hotbeds in detroit and pittsburgh and the like are all places that were heavily for trump that made the elections closer than they did otherwise. I would not expect that to change. Jonathan thank you for being with us, terry haines of pangaea policy of the latest potential strikes. Breaking news, the reserve requirement ratio for china gets a trim of 0. 25 percentage points. The cut will be effective from september 15. Easing on the supply of credit, not necessarily the price of it. Easing the reserve requirement ratio for banks in china. Tom there is the whole financial thing and the property thing and disinflation. A lot of the zeitgeist is if the economy is doing okay. Is this a 3 china gdp, 5 . Could it be even more even with this financial upset . Jonathan 4 is the number here a lot of. A lot of revisions. Lisa put out the list of actions we have seen from chinese officials the last month. Lisa which is the reason that the moves have been easing light, not necessarily that aggressive. Tom we need to do a surveillance road trip to shanghai. I could just see it. I like that. Jonathan an easing posture overrunning china. Sarah hewin, next. [indiscernible] every business deserves a great deal. Thats why comcast business is launching the mobile made free event. With our business internet, new and existing customers can get one year of unlimited mobile for free. Its our best internet. Powered by the next generation 10g network and with 99. 9 reliability. Plus one line of free mobile for an entire year. Its the mobile made free eventhappening now. Get started for just 39 a month. Plus, ask how to get one free line of unlimited mobile. Comcast business, powering possibilities. Hi, im jason and ive lost 202 pounds on golo. So the first time i ever seen a golo advertisement, i said, yeah, whatever. Theres no way this works like this. And threw it to the side. A couple weeks later, i seen it again after getting not so pleasant news from my physician. I was 424 pounds, and my doctor was recommending weight loss surgery. To avoid the surgery, i had to make a change. So i decided to go with golo and its changed my life. When i first started golo and taking release, my cravings, they went away. And i was so surprised. You feel that your body is working and functioning the way it should be and you feel energized. Golo has improved my life in so many ways. Im able to stand and actually make dinner. Im able to clean my house. Im able to do just simple tasks that a lot of people call simple, but when youre extremely heavy theyre not so simple. Golo is real and when you take release and follow the plan, it works. Tom reserve jonathan they reserve requirement ratio cut, small one. That top of everything we have seen from japan from china, an easing posture. S p 500, positive. Lots to look forward to. U. S. Retail sales for the detroit big three and an ecb decision around the corner. Into the bond market, the two year closed above 5 tuesday, broke back below it yesterday. By a single basis point, 4. 97. The 10 year, 4. 2565. Into retail sales later this morning. Tom do we have a countdown clock on retail sales . We need a countdown clock and a cutup clock to wendy ecb to when the ecb talks. We were uninhibited yesterday with your people at this and i were advocating for a cutup clock for efficient. Jonathan you want to count up so you can say 21 minutes . Tom so mickey can give us further data. Jonathan we will figure that out. Tom peter with a really smart note on real rates. He said real rates matter. I usually look at the 10 year. He said the fiveyear is more important, the fiveyear real rate. Inflation adjusted rate. Lisa everybody says that what the belly of the curve. That perhaps is what he is talking about. He is talking about the general. This is something we keep seeing as people try to capitalize on bonds that might not be trash. Jonathan everything is about you, dont worry about it. You will upset him. Tom ray dalio is one of them. They interviewed him, and he does not like bonds pressed on guilds. Jonathan cash is no longer trash. Tom joe and tracy interviewed bill gross and they are qualified. Bill gross is running a billion dollars fund. The last time we heard from ray, cash is trash, right . Jonathan that was years ago and rates wer