Stocks Climb Ahead of Payrolls Report, Anthropic Eyes November IPO

Author: Bloomberg Television · Watch on YouTube

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Original language: English

Original video: Stocks Climb Ahead of Payrolls Report, Anthropic Eyes November IPO · Channel: Bloomberg Television · 43:27 · Watch on YouTube

Topics: Enterprise AI applications, Markets and economy

Summary

Bloomberg Brief previews the September U.S. payrolls report as markets reassess the likelihood of another Federal Reserve rate hike, with officials signaling patience and economists watching inflation and labor-market trends. The program also covers Anthropic’s reported plans for a November IPO and the financing and systemic-risk questions surrounding the AI buildout. Other reports examine Nike’s worsening turnaround, MP Materials’ U.S. rare-earth magnet supply chain, energy prices, and the U.S. military buildup in the Middle East. The broadcast closes with the day’s economic calendar and premarket movers.

Key points

Economists expected about 90,000 new U.S. jobs in September, while the reported whisper number was lower; unemployment and wage growth were also in focus.
Recent comments from senior Fed officials suggested there was no urgency to raise rates in October, though December remained a possibility.
Anthropic was reported to be preparing for a public listing as soon as mid-November, ahead of OpenAI.
Bloomberg discussed possible risks from AI-related financing, including off-balance-sheet arrangements and large chip funding needs.
Nike reported disappointing results, warned its sales slump could worsen, and announced a restructuring plan targeting $2.5 billion in savings by 2031.
MP Materials is building a U.S.-based rare-earth magnet supply chain, with GM preparing to use its magnets in vehicles.
Asian markets were under pressure, while European stocks edged higher; oil prices fell below $100 a barrel for Brent after proposals to release reserves.
The U.S. was reportedly sending an additional 10,000 troops and a third aircraft carrier to the Middle East, giving commanders more options if attacks on Iran escalate.

Chapters

Start	Chapter	Summary
00:13	Market setup and global trading	The broadcast previews payrolls and Anthropic’s IPO plans before surveying Asian and European markets, bond yields, and oil prices.
04:37	What to watch in the jobs report	Bloomberg’s Alister Bull discusses payroll expectations, wage growth, and why recent Fed comments have cooled expectations for an October rate hike.
08:25	Anthropic IPO and AI financing	Neil Campling discusses Anthropic’s potential November listing, its expected financial disclosures, and financing concerns across the AI sector.
11:04	Middle East deployment and energy prices	The program reports on additional U.S. troops and an aircraft carrier heading to the region, European pressure to release fuel reserves, and France’s debt concerns.
12:40	Nike’s turnaround struggles	Bloomberg’s Tim Loh examines Nike’s weak results, planned cost cuts, leadership questions, and challenges adapting its strategy to different markets.
17:31	U.S. rare-earth magnet production	A report visits MP Materials’ U.S. supply chain and explains how its magnets are expected to be used in GM vehicles.
21:28	Payrolls preview and Fed outlook	Michael McKee and Citi economist Veronica Clark assess the jobs report, the Fed’s reaction function, and the effects of AI investment and higher energy prices.
32:23	Market headlines and Iran deployment	The program covers losses tied to Paramount financing, proposed releases of oil reserves, Brazil’s election, and the U.S. military buildup in the Persian Gulf.
33:29	Politics and the U.S. military buildup	Jonathan Tamari discusses who may have made the deployment decision, the risks of escalation, military stockpiles, and election-year politics.
37:53	Anthropic listing and AI investment	Neil Campling discusses investor appetite for an Anthropic IPO and the broader financing, chip, and community implications of AI data-center expansion.
42:23	Today’s agenda and premarket movers	The broadcast previews the jobs release and other upcoming data, then reviews Nike, other premarket movers, oil, and Treasury yields.

Quotes

this low hire, low fire labor market — 05:10

no urgency here, we need to take more time. — 06:19

they are hoping to get 2.5 billion dollars of savings by 2031 — 14:20

This one was made in the U.S., from beginning to end. — 18:05

This is the most anticipated IPO of the year — 38:25

Concepts and entities

Anthropic, OpenAI, Federal Reserve, Nike, MP Materials, General Motors, Broadcom, NVIDIA, IPO, terras raras

Full transcript (original language)

00:13 VONNIE: IT IS 5:00 A.M. IN NEW YORK CITY, 10:00 A.M. IN LONDON. GOOD MORNING. I AM VONNIE QUINN WITH YOUR “BLOOMBERG BRIEF.” LET’S GET YOU SET UP FOR THE DAY. COUNTDOWN TO THE PAYROLLS REPORT. MARKETS AWAIT THE LATEST JOBS DATA WITH A WHISPER NUMBER COMING IN AT 83,000 ADDED IN SEPTEMBER. ANTHROPIC LOOKING TO GO PUBLIC AS SOON AS THE MIDDLE OF NOVEMBER AFTER PUSHING BACK PLANS TO LIST. THE U.S. REPORTEDLY RAMPING UP ITS MILITARY PRESENCE IN THE MIDDLE EAST, DEPLOYING AN EXTRA 10,000 TROOPS IN CASE PRESIDENT TRUMP

00:48 DECIDES TO ESCALATE ATTACKS IT IS FRIDAY, IT IS NONFARM PAYROLLS FRIDAY. LET’S GET A CHECK OF HOW MARKETS AROUND THE WORLD HAVE BEEN ANTICIPATING THE EVENT. WE WILL START IN ASIA WITH WINNIE HSU. WINNIE: HONG KONG MARKETS COMING BACK ONLINE AFTER A HOLIDAY YESTERDAY. IT IS THE BIGGEST DRAG IN ASIA TODAY WITH THE BENCHMARK HSI INDEX HAVING ITS WORST DAY SINCE MARCH. A LOT OF DIFFERENT FACTORS IN PLAY, THE HIGHER YIELD, CONCERNS ABOUT THE BORROWING COST FOR TECHNOLOGY SHARES, BUT ALSO THE DISAPPOINTMENT WITH

01:19 THE STIMULUS PACKAGE FROM BEIJING. FINANCIALS THE BIGGEST DRAG IN THE INDEX WITH THE LIKES OF HSBC DOWN MORE THAN 5%, TRACKING THOSE LOSSES IN U.S. PEERS OVERNIGHT. THAT IS COMING AS INVESTORS NOW MORE CONCERNED ABOUT HOW HIGHER YIELDS ARE LEADING TO FURTHER CREDIT RISKS. PLUS, THE U.K. HAVE SOME POTENTIAL OF RAISING THE TAX FOR THE BANKING SECTOR, SO THOSE ARE WEIGHING ON SENTIMENT. FLIP THE BOARD AND TAKE A LOOK AT THE BROADER ASIA MARKET.

01:51 MSCI ASIA UNDER PRESSURE, HEADED FOR ITS WORST WEEK SINCE JULY. LOSSES PAIRING A BIT IN THE AFTERNOON SESSION AS OIL PRICES COMING BACK DOWN. WHEN IT COMES TO THE CROSS ASSET PICTURE, WE SEE THE JAPANESE YEN STRENGTHENING SLIGHTLY GIVEN THE SLIGHT WEAKNESS IN THE U.S. DOLLAR, BUT ALSO AS TOKYO CPI NUMBERS SEEING A PRETTY BIG INCREASE, REAFFIRMING THE BANK OF JAPAN’S RATE HIKE PATH GOING FORWARD. VONNIE: WE WILL WASH THAT AND SEE IF IT DOES HIKE WHEN EXPECTED TO. LET’S TAKE A LOOK AT EUROPE.

02:26 WE HAVE BLOOMBERG’S ALEX MORGAN. >> THANK GOODNESS IT IS FRIDAY IS THE SENSE I THINK YOU ARE GOING FROM EUROPEAN MARKETS. THE FTSE AND STOXX 600, A MODERATE BOUNCE INTO POSITIVE TERRITORY. LOOK AT FIXED-INCOME. FRANCE, THE STORY IS THE SPREAD, LAGGING, PARTICULARLY WHEN YOU LOOK AT GERMANY. LET’S TURN THE BOARD AND LOOK TO LONDON, DIGGING INTO ONE NAME, AN UNSCHEDULED TRADING UPDATE FROM IG GROUP WHICH SAW

02:58 THEM PLUNGE AS MUCH AS 27% IN EARLY TRADING THIS MORNING. A ROUGH START FOR THEM IN LONDON. VONNIE: NOT AN EASY FRIDAY TO WAKE UP IF YOU ARE AN INVESTOR IN THAT STOCK. THAT IS ALEX MORGAN IN BLENDED. WE HAVE GOT SOME VOLATILITY IN THE LAST FEW MINUTES. BRENT CRUDE, THE GLOBAL BENCHMARK WAS ABOVE $102 A BARREL ON THOSE REPORTS THE PRESIDENT IS SENDING MORE TROOPS TO THE MIDDLE EAST. THE FRENCH PROPOSAL THAT YOU’RE RELEASED STOCKS OF DIESEL AND CRUDE HAS A BACK BELOW $100 A BARREL. NEW YORK CRUDE BELOW THE $90 A

03:33 BARREL, GIVING SOME RELIEF TO THIS MARKET. EUROPEAN GAS FUTURES STILL PRETTY ELEVATED AT 72 EUROS PER MEGAWATT HOUR. LET’S TAKE A LOOK AT HOW WE ARE COMING INTO THE NONFARM PAYROLLS FRIDAY. NICE BOUNCE. WE HAD FRACTIONAL GAINS YESTERDAY AFTER INDICES TOOK A TURN MID AFTERNOON. THE NASDAQ POTENTIALLY OUTPERFORMING TODAY BUT THE S&P LOOKING FOR NICE GAINS AS WELL AS THE RUSSELL 2000, WHICH HAS BEEN LAGGING DUE TO THE. . INTEREST RATE HIKE YIELDS HAVE COME DOWN A LITTLE BIT, MORE SO

04:06 AT THE FRONT END, DOWN ABOUT 10 BASIS POINTS AS MARKETS PRICE OUT THE PROBABILITY WE WILL GET A RATE HIKE IN OCTOBER. WE ARE DOWN TO A 30% CHANCE NOW. PRETTY VOLATILE MARKETS. THE 10 YEAR YIELD ELEVATED FROM WHERE IT WAS BUT DOWN ABOUT FIVE BASIS POINTS IN THE LAST 24 HOURS. PRETTY SETTLED IN TODAY’S TRADE. COMING UP, WE ARE GOING TO LOOK AHEAD TO THE JOBS REPORT WITH VERONICA CLARK OF CITI. LET’S START WITH THOSE JOBS

04:37 DATA, DUE AT 8:30 A.M. EASTERN. ECONOMISTS EXPECTING THE U.S. ADDED 90,000, THE WHISPER NUMBER LOWER THAN THAT. ALISTER BULL IS WITH US. WHAT ELSE SHOULD WE BE LOOKING FOR IN THIS JOBS DATA GIVEN THE FED, FED CHAIR WARSH HAS DOWNPLAYED, FOR EXAMPLE, WAGE GROWTH? >> GOOD MORNING. THE WHISPER NUMBER SHOWS A SLOWDOWN IN THE PAYROLLS, BUT STILL ENOUGH TO MAINTAIN UNEMPLOYMENT AROUND 4.1%. THE OTHER NUMBERS WE WILL BE

05:10 LOOKING AT WILL BE AVERAGE HOURLY EARNINGS THAT ARE FORECAST TO COME IN AT ABOUT 3.1%. NOTHING TO CHANGE THE NARRATIVE AROUND THE LABOR MARKET NOT BEING A SOURCE OF INFLATION, OVERALL RETURN OF THE PAYROLL REPORT COMPARED WITH THE HOT READING IN AUGUST EXPECTED TO CONFIRM THIS LOW HIRE, LOW FIRE LABOR MARKET THAT WILL NOT STRENGTHEN THE CASE FOR THE FED TO RAISE INTEREST RATES NEXT MONTH, UNLESS SOMETHING CRAZY HAPPENS WITH THE CPI PRINT IN TWO WEEKS TIME. THE MARKET NOT EXPECTING THEM

05:44 TO MOVE AND THAT HAS BEEN REINFORCED BY RECENT COMMENT FROM SENIOR MEMBERS OF THE FED. VONNIE: WE GOT LORIE LOGAN, WE HAD A JOHN WILLIAMS AND VICE CHAIR PHILIP JEFFERSON CALLING FOR PATIENTS, OR AT LEAST SAYING THE FED NEEDS MORE TIME. THAT TOOK THE STEAM GET THE HAWKISHNESS WE HAD SEEN, RIGHT? IS THE FED ANY LESS DIVIDED THAN IT WAS A COUPLE OF MONTHS AGO? >> I THINK IT WAS VERY STRIKING THAT YOU HEARD FROM THE VICE CHAIR OF THE FED, THE HEAD OF THE NEW YORK FED, AND THE VICE CHAIR FOR SUPERVISION ALL BASICALLY SAYING THE SAME

06:19 THING, WHICH IS NO URGENCY HERE, WE NEED TO TAKE MORE TIME. YOU HEARD FROM LORIE LOGAN OF THE DALLAS FED WHO IS ONE OF THE MORE HAWKISH MEMBERS OF THE FOMC. SHE SAID THIS RUN-UP IN YIELDS, THAT IS GOING TO HELP US DO OUR JOB, TIGHTEN FINANCIAL CONDITIONS, DO OUR WORK FOR US. I THINK THE VERDICT OF THE MARKET IS, GIVEN WHAT WE HAVE SEEN AND GIVEN THE SOFTER PRINT IN THE AUGUST PCE A COUPLE OF DAYS AGO, WE ARE OK, THEY CAN SKIP OCTOBER. THAT LEAVES DECEMBER ON THE TABLE.

06:52 THE BAR FOR RAISING RATES SO CLOSE TO THE MIDTERM ELECTIONS WAS ALWAYS GOING TO BE HIGH AND THE DATA HAS JUST NOT CLEARED IT. VONNIE: INVESTORS SEEING A 28% CHANCE OF AN INCREASE AT THE END OF THE MONTH. SEEMS FAIRLY REASONABLE. WE WERE AT 70% AT THE BEGINNING OF THIS WEEK. DID ANYTHING CHANGE IN CONDITIONS OR WAS IT JUST FED SPEAK AND THE GENERAL MOOD, AS THEY SAY? >> YOU KNOW, THERE IS TWO SIDES TO THAT STORY. YOU HAD VERY STRONG CONSUMER SPENDING THAT SHOWS THE CONSUMPTION PART OF THE ECONOMY AND THE THIRD QUARTER WAS DOING

07:24 VERY WELL. THAT SHOWS IT IS NOT JUST AN AI ECONOMY. THAT WAS THE ARGUMENT BEING MADE BY NEEL KASHKARI, WHO IS ONE OF THE MORE HAWKISH MEMBERS OF THE COMMITTEE WHO VOTED TO RAISE RATES AND DISSENTED IN JULY WHEN THEY STOOD PAT. WE KNOW HE WANTS TO. . RAISE RATES THE PCE NUMBERS, THEY WERE NOT AS HIGH AS THEY HAVE BEEN EXPECTED TO BE. THEY WERE STILL PRETTY ELEVATED SO IT DOES NOT REMOVE THE OVERALL SENSE THAT THEY DO NEED TO KEEP RAISING. THEY HAVE GOT ONE MORE RATE HIKE IN THEIR DOT PLOT FOR THIS

07:55 YEAR, ONE FOR NEXT YEAR. I THINK THE CONCERN AT THE BEGINNING OF THE WEEK WAS THAT THE FED MIGHT BE SOMEWHAT BEHIND THE CURVE, THAT THE NUMBERS CAME IN HOTTER, THAT THOSE ESTIMATES WERE REALLY GOING TO LOOK STALE AND THEY WERE GOING TO HAVE TO RUSH TO GET TO A HIGHER SORT OF END POINT IN THEIR TIGHTENING CYCLE. VONNIE: THANK YOU FOR THAT. WE WILL SEE IF THERE ARE ANY SURPRISES IN STORE FOR US. THAT IS BLOOMBERG’S ALISTER BULL. ANTHROPIC LOOKING TO GO PUBLIC RIGHT BEFORE THANKSGIVING WITH

08:25 FORMAL MARKETING STARTING AS SOON AS THE WEEK OF NOVEMBER NIGHT. JOINING US IS BLOOMBERG’S NEIL CAMPLING. WE WILL FINALLY GET A LOOK AT THE ACTUAL MARKETING MATERIALS. WHAT DO WE EXPECT ANTHROPIC WILL LOOK FOR? WE HAVE ALL SORTS OF WILD NUMBERS LIKE WE DID WITH THE SPACE – WILL WE HAVE ALL SORTS OF WILD NUMBERS LIKE WE DID WITH THE SPACEX? NEIL: GOOD MORNING. I THINK THAT IS ALMOST GUARANTEED. IT IS INTERESTING WHAT THEY

08:56 LOOK AT AS THEIR ADDRESSABLE TERM. WE WILL BE LOOKING TO SEE WHAT THEY COME OUT WITH IN TERMS OF THE ANNUALIZED REVENUE RUN RATE GROWTH, WHERE THEY STACK UP AGAINST OPENAI. THERE IS GOING TO BE FOCUS ON THE LOSSES BECAUSE OF THE MASSIVE CAPEX INVESTMENT THAT IS REQUIRED TO KEEP THIS FRONTIER AT THE LEADING EDGE OF THE DEVELOPMENT. THE TIMING IS INTERESTING BECAUSE BY COMING TO THE MARKET AHEAD OF THANKSGIVING, IT IS

09:27 QUITE WELL-TIMED BECAUSE LOTS OF THE MUTUAL FUNDS HAVE THEIR FINAL YEAR, THE YEAR ENDED NOVEMBER, THE END OF NOVEMBER, WHICH A LOT OF INVESTORS WILL PROBABLY WANT TO SEE ANTHROPIC LISTED IN THOSE STOCK HOLDINGS WINDOWS ANNUAL REPORTS GO OUT. THEY WILL BEAT OPENAI IN THAT RACE TO BECOME PUBLIC. VONNIE: EXACTLY. CURIOUS TO SEE IF THAT IS AN ADVANTAGE. FT REPORTING THAT AMAZON EGGS EXPLORING MOVING A BILLION DOLLARS OF DEBT OFF OF ITS BOOKS. SHOULD THIS KIND OF ACTIVITY BE CONCERNING OR IS IT A WISE THING FOR AMAZON TO DO? NEIL:

10:01 IT IS KIND OF INTERESTING, ISN’T IT? IN TERMS OF THESE OFF-BALANCE-SHEET TRANSACTIONS HAVE BEEN RAISING SOME CONCERNS. THERE IS LOTS OF THESE FINANCING QUESTIONS THAT HAVE BEEN AROUND. JUST YESTERDAY, WE HAD THE BANK OF BROADCOM WITH THE 60 BILLION FUND RAISE AND THEY TALKED ABOUT, AGAIN, FOR ANTHROPIC CHIPS. THERE IS MORE THAN 500 BILLION THAT WE KNOW OF NVIDIA’S CUSTOMERS THAT BEEN RAISING. THERE IS FINANCING, THERE IS OFF-BALANCE-SHEET STUFF THAT IS

10:33 GOING ON WITH THESE CHIPS SO THIS WILL RAISE FURTHER QUESTIONS. VONNIE: IT CERTAINLY WOULD MEAN THAT INSURERS POTENTIALLY COULD GET INVOLVED AT SOME POINT IF THE STRUCTURE GETS AN IG RATING. NOT JUST INSURERS, BUT PENSION FUNDS. WITH THAT RAISE SYSTEMIC RISK DOWN THE ROAD? NEIL: WE HAVE TO KEEP AN EYE ON THAT. THERE ARE POCKETS OF THE MARKET THAT PLAYED INTO THAT INSURANCE ELEMENT. THE THING TO KEEP AN EYE ON HIS THOSE CDS RATES. LET’S KEEP AN EYE ON THE CDS

11:04 RATES FOR THE LIKES OF THESE BIG TECH HYPERSCALERS. THEY HAVE BEEN GOING HIGHER. OBVIOUSLY, ORACLE HAS GOT THE HIGHEST RATES. THAT IS PROBABLY WHERE WE WOULD GET THE MAIN ATTENTION TO KEEP AN EYE ON WHERE THE RISKS ARE ACTING. VONNIE: NEIL CAMPLING WILL JOIN US LATER ON FOR MORE. NOW TO OTHER TOP STORIES TRENDING ON THE TERMINAL. A U.S. OFFICIAL SAYS THE PENTAGON WILL DEPLOY 10,000 MORE TROOPS TO THE MIDDLE EAST. A THIRD AIRCRAFT CARRIER ALSO SENT TO THE REGION. MOVES GIVE AMERICAN COMMANDERS

11:36 MORE OPTIONS SHOULD PRESIDENT TRUMP CHOOSE TO ESCALATE ATTACKS ON IRAN. THE EU HAS BEEN HOLDING EMERGENCY TALKS AFTER COMING UNDER GROWING PRESSURE FROM THE TRUMP ADMINISTRATION RELEASE DIESEL STOCKPILES. RECORD PRICES IN THE U.S. HAVE A FUELED CALLS FOR AN EXPORT BAN WHICH WOULD HAVE IMPLICATIONS FOR EUROPE. U.S. TRADE REPRESENTATIVE JAMIESON GREER SPOKE TO BLOOMBERG ABOUT THE PRESSURE ON DIESEL PRICES. >> WE KNOW OF THE PRICES ON THESE ARE OUR HIGH-END WE HEARD

12:07 PRESIDENT KASHKARI TALKING, IS THIS A ONE-TIME SPIKE OR SOMETHING LONGER? OUR SENSE IS THIS IS A ONE TIME SPIKE. THE EUROPEANS ARE SETTING – SITTING ON RESERVES OF DIESELS. THEY SHOULD PROBABLY RELEASE SOME OF THESE IF THEY FEEL THEY ARE HAVING A SPIKE IN EUROPE. THE PRICE IS HIGHER IN EUROPE THAN THE U.S. VONNIE: FRANCE IS BEING HIT HARD AND FAST BY THE GLOBAL DEBT SELLOFF, INVESTORS GROWING MORE CONCERNED ABOUT THE COUNTRY’S ABILITY TO MEET ITS DEFICIT TARGETS. POLITICAL GRIDLOCK ALSO ADDING TO THE PRESSURE. COMING UP, NIKE’S RESULTS FALL SHORT AS ITS TURNAROUND STRUGGLES TO

12:40 GAIN TRACTION. WE WILL SPEAK ABOUT THAT, NEXT. THIS IS BLOOMBERG. VONNIE: THIS IS “BLOOMBERG BRIEF.” .” I AM VONNIE QUINN IN NEW YORK. NIKE SAYS IT WILL CUT JOBS AND OVERHAUL ITS BUSINESS AS IT STRUGGLES DEEP IN, TESTING WALL STREET’S PATIENTS WITH CEO ELLIOTT HILL. THE COMPANY REPORTED DISAPPOINTING RESULTS AND WARNED ITS SALES SLUMP IS SET TO GET WORSE. LET’S GET MORE FROM BLOOMBERG’S

13:11 TIM LOH. THE STOCK ALREADY DOWN MORE THAN 44% THIS YEAR AND THAT IS BEFORE THIS MORNING. ELLIOTT HILL HAS BEEN IN THE JOB FOR TWO PLUS YEARS NOW. WHAT IS HOLDING HIM BACK? WHAT IS KEEPING HIM FROM THIS TURNAROUND SUCCEEDING? >> IT KEEPS GOING DEEPER AND INVESTORS ARE STARTING TO WONDER IF THEY CAN SEE THE BOTTOM APPROACHING. NIKE’S MORE OPTIMISTIC TELLING OF IT, THEY WOULD SAY THE FIRST PRIORITY WHEN ELLIOTT CAME BACK AS CEO WAS TO SORT OF REDOUBLE

13:44 FOCUS ON PERFORMANCE SPORTS, SOMETHING THEY MIGHT HAVE TAKEN THEIR EYE OFF OF BEFORE HAND AND THEY WOULD ARGUE THEY ARE DOING THAT AND BUILDING MOMENTUM THERE. LAST NIGHT, THEY CAME OUT WITH A BIG NEW COST-CUTTING PROGRAM AND ONE OF THE AMBITIONS BEHIND THAT IS TO TAKE WITH THEY HAVE ALREADY DONE WITH PERFORMANCE SPORTS AND SPREAD THAT ACROSS THE WHOLE COMPANY. THAT IS THE LIFESTYLE, WHICH ENDS UP BEING A LOT BIGGER PIECE OF THE PUZZLE. THAT IS GOING TO BE A TRICK. WE WILL SEE IF IT WORKS.

14:20 THE NEW PLAN, WHICH THEY ARE CALLING PACE, THEY ARE HOPING TO GET 2.5 BILLION DOLLARS OF SAVINGS BY 2031 AND THEY WILL GET THERE WITH A LIGHT OF JOB CUTS. THAT IS NOT REALLY SOMETHING THAT WILL BRING A LOT OF ENTHUSIASM AND MOMENTUM IN HOUSE IN PORTLAND. VONNIE: IT IS NOT CONVINCING THE MARKET. IT IS A FIVE-YEAR PLAN, SOUNDS LIKE A LOT OF MONEY BUT IF YOU BREAK THAT UP YEAR-BY-YEAR, IT IS NOT AS MUCH. ALSO TINKERING WITH THE GEOGRAPHICAL CONSOLIDATION AND SO ON. ARE THESE BIG ENOUGH, FAST ENOUGH MOVES AT THIS POINT FROM

14:52 ELLIOTT HILL? >> I THINK THAT IS THE BIG QUESTION. THAT’S WHY YOU ARE STARTING TO SEE ANALYSTS AND INVESTORS START TO QUESTION WHETHER ELLIOTT IS THE GUY WHO WILL GET NIKE BACK TO WHERE IT ONCE WAS. I THINK ELLIOTT HAS BEEN SAYING A LOT OF THE RIGHT THINGS, SHE HAS BEEN MAKING A LOT OF MOVES. BUT I DO THINK NIKE IS RUNNING INTO A FUNDAMENTAL QUESTION THAT GETS TO THE CORE OF THEIR DNA. THIS IS A COMPANY THAT HAS BEEN SO SUCCESSFUL IN THE LAST 40 YEARS BY DOMINATING THE U.S. AND EXPORTING U.S.

15:25 STREET CULTURE AROUND THE WORLD. IT IS NOT CLEAR THAT THE WORLD WANTS THAT ANYMORE. THERE IS TONS OF NEW BRANDS EMERGING IN CHINA AND EUROPE, AND THEN THERE IS ADIDAS, WHICH IS DOING QUITE WELL BY DECENTRALIZING, AND YOU KNOW, ALLOWING THEIR REGIONAL HUBS TO HAVE A LOT MORE AUTONOMY. THAT IS SOMETHING THAT HAS NOT ALWAYS BEEN NIKE’S STRENGTH AND IT REMAINS TO BE SEEN WHETHER THEY CAN PIVOT THAT PLAYBOOK. VONNIE: THAT IS BEHIND THE GEOGRAPHICAL CONSOLIDATION SO IT CAN SERVE INDIVIDUAL MARKETS BETTER

15:56 APPARENTLY. THE MARKET GOT TIRED OF THE ENDLESS VARIATIONS OF THE DUNKS AND SO ON. NOW IT SAYS IT WILL REDUCE THE FREQUENCY OF RETRO JORDAN LAUNCHES AND SO ON. IS THAT THE RIGHT ATTITUDE GIVEN THAT THAT WAS APPARENTLY ALL THAT WAS SUCCESSFUL IN THE END? >> I MEAN, THAT IS THE PLAYBOOK A WHEN YOU ARE TRYING TO, YOU KNOW, OBVIOUSLY, NIKE WANTS THOSE JORDAN PRODUCTS AND RETRO

16:28 BASKETBALL PRODUCTS TO GET HOT AGAIN. RIGHT NOW, DESPITE A FEW YEARS NOW THEY HAVE BEEN NOT HOT AND THEY HAVE BEEN TRYING TO, YOU KNOW, CREATE NEW HEAT IN THE MARKET FOR THEM. AND THEY ARE STILL, BASED ON THE NEWS YESTERDAY, THEY STILL HAVE A WAYS TO GO. SO, MAYBE, YOU KNOW, BUT IT DOES NOT SEEM UNTIL 2030’S THAT IS GOING TO BE A REAL POSITIVE FOR THEM. VONNIE: IT IS A REAL CASE STUDY. WE ALL HAVE OPINIONS ON HOW THINGS SHOULD BE GOING AND WHAT IS WRONG WITH NIKE BUT I GUESS

16:59 FROM THE INSIDE IT MIGHT BE DIFFICULT TO DO. THEY NEED TO STOP MAKING MISTAKES, RIGHT? EVEN MARKETING MISTAKES WHICH COULD HAVE BEEN AVOIDED. TIM LOH JOIN US ON NIKE. COMING UP, CHINA DOMINATES THE RARE EARTH RACE BUT ONE U.S. COMPANY FIGHTING BACK WITH GM ALONG FOR THE RIDE. THAT STORY IS NEXT. THIS IS BLOOMBERG.

17:31 VONNIE: THIS IS “BLOOMBERG BRIEF.” I AM VONNIE QUINN IN NEW YORK. IN THE RACE FOR CRITICAL MINERALS, IT IS CHINA VERSUS THE REST OF THE WORLD AND CHINA IS WINNING BUT ONE COMPANY, MP MATERIALS, IS MINING RARE EARTH ELEMENTS, PROCESSING THEM AND MAKING FINISHED MAGNETS ALL IN THE UNITED STATES AND GM IS GETTING READY TO PUT THOSE MAGNETS INTO ITS CARS. “WALL STREET” BRINGS US THAT STORY. >> THIS IS A MAGNET MADE FROM RARE EARTH MINERALS. MAGNETS LIKE THESE ARE INTEGRAL PARTS OF EVERYTHING FROM AEROSPACE WEAPONS SYSTEMS TO GENERATORS TO MRI MACHINES.

18:05 BUT THIS MAGNET IS DIFFERENT FROM THOSE WE HAVE SEEN IN THE PAST. THIS ONE WAS MADE IN THE U.S., FROM BEGINNING TO END. >> THIS IS WHERE WE WILL ACTUALLY BOX AND PACKAGE AND WILL BE ON PACKAGE UP CUSTOMER SITE. >> THERE IS NO SINGLE ENTITY IN THE WORLD OTHER THAN MP MATERIALS THAT CAN DO THIS ENTIRE SUPPLY CHAIN ALL UNDER ONE ROOF. >> JIM IS THE CEO AND COFOUNDER OF MP MATERIALS, WHICH OWNS AND OPERATES THE MOUNTAIN PASS MINING CALIFORNIA, WHERE THE PROCESS BEGINS. >> I FOUNDED THE COMPANY IN 2017.

18:38 MY COFOUNDER AND I BOUGHT THE ASSETS OUT OF BANKRUPTCY. MP MATERIALS CONSISTED OF THE ASSETS OF MOUNTAIN PASS, WHICH AT THE TIME WAS ESSENTIALLY A MINE IN CARE MAINTENANCE. THE REFINING ASSETS HAVE NOT BEEN COMPLETED. IT WAS PART OF A PUBLIC COMPANY BEFORE THAT HAD GONE INTO VACANCY. WE ACQUIRED IT OUT OF VACANCY, TURNED AROUND THE MINE, AND RELAUNCHED THE MIND AND REFINING ASSETS – OUT OF BANKRUPTCY, TURNED AROUND THE

19:11 MINE, AND RELAUNCHED THE MINE AND REFINING ASSETS. >> MP MATERIALS IS ABOUT TO TAKE ITS FIRST STEP IN MAKING MAGNETS ENTIRELY IN THE U.S., FROM MINING THE ORE TO PROCESSING IT AND REFINING IT TO USING IT IN PRODUCTS, PRODUCTS TO BE USED BY AN AMERICAN FROM. >>>> IN A COMBUSTION ENGINE, WE USE ABOUT 50 DIFFERENT MAGNETS ACROSS THE VEHICLE. IN AN ELECTRIC VEHICLE, WE USE ABOUT 200 DIFFERENT MAGNETS. IT GOES EVERYWHERE FROM SPEAKERS TO STEERING SYSTEMS TO SEATS AND ENGINES,

19:46 TRANSMISSIONS, IN MANY PLACES ACROSS THE VEHICLE. >> THE CHIEF SUPPLY OFFICER AT GM, WHICH HAS A LONG-TERM SUPPLY ARRANGEMENT TO GET THE MAGNETS AND NEEDS FOR ITS TRACTION MOTORS FROM MP. >> FOR MP MATERIALS, IT KIND OF CAME TOGETHER I CALL IT BY LOOK, I WOULD SAY IT IS STRATEGIC. AS MP WAS PROGRESSING DOWN AN EVALUATION OF GETTING READY TO PRODUCE A MAGNET, IT IS AT ABOUT THE SAME TIME WE WERE MAPPING OUT OUR SUPPLY CHAINS AND REALIZED WE NEEDED RARE EARTH ELEMENTS THAT EXIST IN MAGNETS. VONNIE:

20:22 TUNE INTO “WALL STREET WEEK” TONIGHT FOR THAT AND MORE STORIES. TIME NOW FOR YOUR FRONT-PAGE NEWS. THE NEW YORK TIMES REPORTED NEW YORK GOVERNOR KATHY HOCHUL HAS APPOINTED THE STATE ATTORNEY GENERAL TO INVESTIGATE A FORMER CORNELL UNIVERSITY STUDENT’S ALLEGATION OF RAPE. THE WOMAN HAS SUED SEVEN MEN IN CONNECTION WITH THE ALLEGED RESULT. AUTHORITIES HAVE FACED INTENSE BACKLASH OVER THEIR HANDLING OF THE INVESTIGATION. THE WASHINGTON POST REPORTING THE TRUMP ADMINISTRATION HAS DIVERTED TENS OF MILLIONS OF

20:53 DOLLARS IN MILITARY ASSISTANCE FROM EUROPEAN AND MIDDLE EASTERN COUNTRIES TO CONSERVATIVE- LEANING GOVERNMENTS IN LATIN AMERICA AND DEFIANCE OF CONGRESS. YOUR FINAL STORY TODAY, THE FINANCIAL TIMES REPORTING VLADIMIR PUTIN HAS INSTRUCTED HIS MILITARY LEADERS TO ABANDON THE RULES OF WAR, PROMPTING A STEEP INCREASE IN STRIKES ON CIVILIAN TARGETS AMID A MAJOR PUSH TO REGAIN THE ADVANTAGE. COME CAP, WE ARE GOING TO LOOK FORWARD – COMING UP, WE ARE GOING TO LOOK FORWARD TO THE JOBS REPORT WITH ECONOMIST VERONICA CLARK OF CITI. THIS IS BLOOMBERG.

21:28 VONNIE: IT IS 5:30 A.M. IN NEW YORK CITY, 10:30 A.M. IN LONDON. GOOD MORNING. I AM VONNIE QUINN WITH YOUR “BLOOMBERG BRIEF.” LET’S GET YOU SET UP FOR THE DAY. COUNTDOWN TO THE PAYROLLS REPORT. MARKETS AWAIT THE LATEST DATA, WITH THE WHISPER NUMBER COMING IN AT 83,000 JOBS ADDED IN SEPTEMBER. ANTHROPIC LOOKING TO GO PUBLIC AS SOON AS THE MIDDLE OF NOVEMBER AFTER PUSHING BACK PLANS TO LIST. THE U.S. REPORTEDLY RAMPING UP ITS MILITARY PRESENCE IN THE MIDDLE EAST, PLANNING TO DEPLOY AN EXTRA 10,000 TROOPS IN CASE PRESIDENT TRUMP DECIDES TO ESCALATE ATTACKS.

22:04 WE BEGIN WITH OIL, BACK DOWN BELOW $100 A BARREL ON BRENT AS WE HEAR FRANCE PROPOSING EUROPE RELEASE BARRELS OF CRUDE AND DIESEL. U.S. GAS FUTURES STILL PRETTY ELEVATED. FUTURES LOOK LIKE THEY MIGHT BOUNCE AFTER SOME SMALL GAINS YESTERDAY. NASDAQ FUTURES IN PARTICULAR POINTED A HIGHER. IF WE TAKE A LOOK AT YIELDS, WE HAVE SEEN A DOWNWARD TREND IN THE LAST 24 HOURS. PRETTY STABLE TODAY BUT THAT 10

22:37 YEAR YIELD STILL AT5.23, THE TWO YEAR YIELD TO DONE MORE THAN THAT. NIKE FALLING, TO SAY THE LEAST, IN THE PREMARKET AFTER ANNOUNCING A RESTRUCTURING PLAN AGAIN THAT IT SAYS WILL SAVE $2.5 BILLION OVER THE NEXT FIVE YEARS. THAT FOLLOWED WEAKER THAN EXPECTED SALES FOR THE LATEST QUARTER AND A DISAPPOINTING OUTLOOK FOR FISCAL 2027. LESS THAN THREE HOURS UNTIL THE SEPTEMBER JOBS DATA. JOINING US IS BLOOMBERG’S MICHAEL MCKEE. I DON’T WANT TO SAY WHAT WOULD BE THE BIGGER SURPRISE, BUT MAYBE WHAT WOULD BE THE MORE WELCOME SURPRISE, MICHAEL?

23:12 >> I SUPPOSE AN AS EXPECTED JOBS REPORT WOULD PROBABLY BE THE MOST WELCOME ON WALL STREET BECAUSE THEN EVERYBODY CAN PUT THIS IN THE REARVIEW MIRROR AND TURNED THEIR ATTENTION TO CPI. AS LONG AS THE JOBS NUMBERS ARE COMING IN ABOUT AT THE RANGE THAT THEY ARE, PARTICULARLY UNEMPLOYMENT, THE FED WILL LOOK PAST IT BECAUSE THEY HAVE SAID BASICALLY WE SEE A STABLE ECONOMY, A STABLE ECONOMY IN THE LABOR MARKET, AND WHAT WE ARE WORRIED ABOUT IS INFLATION. OVER THE LAST COUPLE OF DAYS, WE HAVE HAD A COUPLE OF

23:45 SENIOR MEMBERS OF THE OPEN MARKET COMMITTEE SAY WE CAN PROBABLY WAIT AT LEAST UNTIL DECEMBER TO RAISE RATES AGAIN. UNLESS WE GET SOME AWFUL SURPRISE IN THIS NUMBER AND THE CPI NUMBER ON THE 14TH, WE ARE KIND OF IN A HOLDING PATTERN. WE HAVE GOT THE OVERHANG OF THE JOBS REPORT, JOBS REPORT, OF THE ELECTION. THE FED REALLY DOES NOT WANT TO GET INVOLVED IN THAT. IF WE DO NOT SEE A MAJOR SURPRISE YOU WILL NOT SEE A LOT OF ACTION BASED ON THE REACTION TO THE JOBS NUMBERS. VONNIE: UNTIL WE GOT THE HOST OF

24:17 SPEAKERS, IT SEEMED LIKE THE FED WAS BEGINNING TO TILT IN THE JOKIC. WE HAD JEFFERSON, LOGANS, WILLIAMS SAYING PATIENCE, LET’S TAKE SOME TIME ON THIS. >> THERE’S A FEELING THE INFLATION NUMBERS ARE AT LEAST STABLE AT THE MOMENT. THAT COULD EASILY CHANGE WITH SEPTEMBER CPI BECAUSE WE SAW OIL PRICES AND THEREFORE GASOLINE PRICES GO UP DURING THE MONTH. THAT IS A BIG QUESTION ABOUT HOW THAT WILL AFFECT CORE.

24:48 WE DID SEE IN THE PCE NUMBERS THAT SERVICES INFLATION IS STILL THERE. IT IS NOT THAT THESE PEOPLE HAVE TURNED DOVISH, THEY HAVE TURNED HAWKISH. JOHN WILLIAMS A COUPLE OF WEEKS AGO WAS SAYING THERE WAS NO NEED TO RAISE INTEREST RATES, BUT IT IS A SLOW AND STEADY PACE. I THINK THAT WHAT YOU ARE GETTING HEAR FROM SOME OF THESE PEOPLE IS SORT OF LAYING THE GROUNDWORK FOR NOT DOING SOMETHING IN OCTOBER BECAUSE IT IS FIVE DAYS BEFORE THE ELECTION. AND THEY CAN SAY, WELL, WE DID NOT NEED TO RUSH THROUGH THIS. IF WE GET A BIG INFLATION JUMP

25:23 ON OCTOBER 14, EVERYBODY IS GOING TO HAVE TO RETHINK. VONNIE: ALL BETS WOULD CERTAINLY NOT BE OFF, BUT THEY CHANGE AGAIN. THEY CHANGED THIS WEEK. MICHAEL WILL BE WITH US THROUGHOUT THE MORNING TAKING US THROUGH THOSE JOBS DATA. JOINING US IS VERONICA CLARK, U.S. ECONOMIST AT CITI, ESTIMATING 85,000 JOBS. NO SURPRISE IN TODAY’S DATA. WHAT ABOUT THE REACTION FUNCTION? HAVE WE LEARN MORE ABOUT THE FED’S REACTION FUNCTION IN THE

25:54 LAST THREE DAYS? >> I THINK WE LEARNED A LITTLE BIT. IT SEEMS LIKE MOST FED OFFICIALS WANT TO BE A BIT SLOWER. WE HEARD FROM JOHN WILLIAMS THIS WEEK, VICE JEFFERSON YESTERDAY. AND THINGS LIKE MAY BE THE CORE OF THE COMMITTEE IS COMFORTABLE BEING A LITTLE BIT SLOWER BUT WE DIDN’T KNOW THAT FROM THE SEPTEMBER SEP. VONNIE: IS IN A LESS DIVIDED FED OR IS THERE STILL HUGE DIVISION OVER HOW MUCH GROWTH WE CAN COUNT ON AND HOW MUCH INFLATION WE CAN COUNT ON COMING DOWN?

26:29 >> IT SEEMED TO BE A VERY CONSENSUS, UNANIMOUS FED IN SEPTEMBER WHEN WE GOT THE UNANIMOUS DECISION TO RAISE RATES BUT I THINK IT WILL BECOME AN INCREASINGLY DIVIDED FED. I THINK THERE WILL BE A DEBATE ABOUT, WHAT EXACTLY ARE WE TRYING TO DO HERE? THE TYPICAL MONETARY POLICY RESPONSE TO AN ENERGY SUPPLY SHOCK WOULD NOT BE TO RAISE RATES. IF YOU THINK INFLATION IS TOO HIGH AND YOU ARE RAISING RATES TO COOL THAT, IT IS BECAUSE YOU THINK DEMAND IS TOO STRONG SOMEWHAT. IF I LOOK AT THE ECONOMY RIGHT NOW AND I THINK MOST FED OFFICIALS WOULD AGREE, WHAT IS THE SOURCE OF THAT TOO STRONG DEMAND. IT SEEMS TO BE ASSET PRICES AND

27:03 THE AI INVESTMENT. IT IS NOT THE LABOR MARKET AND SECTORS LIKE HOUSING BUT RATE HIKES ARE NOT COSTLESS. YOU WILL CALL THE OTHER PARTS OF THE ECONOMY IN TRYING TO COOL THAT STRONG DEMAND FROM AI AND I DO NOT SEE THAT HAPPENING. VONNIE: YOU HAD BEEN CONCERNED ABOUT THE LABOR MARKET. ALL YEAR LONG, YOU HAVE BEEN WAITING FOR A TO SHOW SIGNS OF SLOWDOWN. WILL WE SEE THAT BEFORE THE END OF THE YEAR? >> IT HAS BEEN MORE STABLE THAN WE WERE EXPECTING. . I STILL WOULD BE VERY CAUTIOUS THAT HIRING RATES ARE STILL

27:34 VERY LOW WE SAW THAT, AND THE DATA FOR THIS AUGUST EVEN THOUGH WE HAD THAT STRONG AUGUST PAYROLLS NUMBER. HIRING WAS STILL LOW. IT SEEMS LIKE A LABOR MARKET THAT IS VERY INFLUENCED BY LABOR SUPPLY ISSUES. WE HAVE HAD THIS AGING POPULATION, SLOWING IMMIGRATION. PARTICIPATION HAS COME DOWN. IT IS ALMOST A SHRINKING LABOR MARKET AND THAT IS NOT COMFORTABLE EITHER. EVEN IF IT IS STABLE, IT DOES NOT SEEM LIKE A LABOR MARKET THAT IS GENERATING INFLATION PRESSURE.

28:04 WE DO NOT SEE WAGES PICKING UP. VONNIE: THE FED CHAIR SEEMED TO DISMISS THE IMPACT OF WAGE GROWTH FROM THE JOBS DATA AT THE LAST PRESS CONFERENCE. WHY? WHY DID HE DO THAT? I FEEL LIKE THE OTHER MEMBERS ARE NOT AS SANGUINE. >> I WOULD AGREE. I THINK WAGES ARE AN IMPORTANT INPUT INTO SERVICES PRICES. I THINK IF WAGE GROWTH IS A STRONG AND PEOPLE CAN AFFORD TO PAY HIGHER PRICES, THEN YOU’RE ABLE TO PASS ON SOME OF THAT COST AND WE REALLY DO NOT SEE HIGHER INPUT COSTS BEING PASSED ON TO

28:37 FINAL PRICES SO I THINK WAGES ARE AN IMPORTANT PART OF THE STORY AND I THINK OTHER FED OFFICIALS WILL STILL THINK THEY ARE ALSO. VONNIE: WHEN WE GOT THE DATA THIS WEEK, WE SAW THAT CONSUMPTION IS STILL STRONG. THE SAVINGS ARE STILL STRONG. HOW IS THE CONSUMER DOING IT? >> WE DID SEE A SAVINGS RATE THAT WAS REVISED HIGHER. THAT’S BEEN THE PATTERN IN THE PAST COUPLE OF YEARS WHEN WE GET GDP REVISIONS, IT LOOKS LIKE WE HAD MORE INCOME THAN WE WERE MEASURING BEFORE. SAVINGS RATES ARE TRENDING DOWN, EVEN THOUGH WE HAD THOSE UPWARD REVISIONS.

29:10 CONSUMPTION IS SOLID, BUT IT IS NOT REALLY RE-ACCELERATING. AND I DO WORRY THAT A LOT OF THAT STRENGTH IN CONSUMPTION IS COMING FROM WEALTH AFFECTS AND ASSET PRICES THAT ARE RISING. THAT MEANS THE ECONOMY, EVEN THE CONSUMPTION HOUSEHOLD PART OF THE ECONOMY, IS VERY EXPOSED TO THAT AI STORY. VONNIE: ISN’T AN ALL OR NOTHING STORY? WE SEE STRENGTH UNTIL SOMETHING IN THE AI ECONOMY FALTERS AND THEN NOT ONLY DO WE SEE WEAKNESS, WE SEE SOMETHING FALLING OFF A CLIFF?

29:41 >> THAT IS DEFINITELY A RISK. GDP GROWTH RIGHT NOW IS SOLID. HALF OF THAT IS AI INVESTMENT, THE OTHER HALF IS CONSUMPTION AND ASSET PRICES THAT ARE RISING BECAUSE OF THE AI STORY. IT GETS BACK TO THE QUESTION OF WHAT EXACTLY IS THE FED TRYING TO DO, WHAT KIND OF DEMAND ARE THEY TRYING TO COOL. WE HAVE PRICED 100 BASIS POINTS OF RATE HIKES AND HAVE NOTHING EQUITY MARKETS WOBBLING MUCH SHUTTLE. MAY BE IT WOULD TAKE EVEN MORE. I WORRY THOSE HIGHER RATES WILL IMPACT OTHER PARTS OF THE ECONOMY IN THE MEANTIME. VONNIE: IT’S BEEN A LITTLE WHILE SINCE

30:13 WE HAD THAT 25 BASIS POINT HIKE. AT WHAT POINT DO WE SEE IT IN THE ECONOMY AND THE JOBS DATA? >> I THINK WE ALREADY SEE IT IN SECTORS LIKE HOUSING. YOU SEE MORTGAGE APPLICATIONS CONDEMNED, WEEKLY PENDING HOME SALES STARTING TO FALL – APPLICATIONS COMING DOWN, WEEKLY PENDING HOME SALES STARTING TO FALL. I WOULD LOOK TO SEE IF AUTO SALES, THAT COULD BE RATE SENSITIVE IF THOSE ARE COMING DOWN. AND MAYBE ABOUT SIX MONTHS, I WOULD LOOK TO SEE IF THERE IS ANY PULLBACK IN HIRING. I THINK IT WOULD STILL BE THAT

30:46 WEAK OR HIRING FIRST AND THEN MAYBE YOU WOULD SEE SOME LAYOFFS. MAY BE SIX MONTHS BEFORE YOU WOULD SEE EARLY SIGNS OF THAT. VONNIE: THIS IS LORIE LOGAN’S POINT. THE SPREAD BETWEEN THE RATE AND THE TWO-YEAR IS MASSIVE. LORIE LOGAN SAID THE MARKET IS DOING SOME OF OUR JOB FOR US AND THAT IS PUSHING MORTGAGE RATES HIGHER. IT IS NOT JUST THE FED FUNDS RATE. >> ABSOLUTELY. I DO THINK A LOT OF THE MOVE HIGHER IN RATES THIS YEAR HAS TO DO WITH THE FED REPRICING THAT WE HAVE HAD. WE CAME INTO THIS YEAR PRICING

31:18 SOMETHING LIKE 60 BASIS POINTS OF RATE CUTS AND WE HAVE GONE EQUALLY IN THE OTHER DIRECTION. IF YOU WANT THAT TIGHTENING, YOU HAVE TO FOLLOW THROUGH ON IT. PROBABLY ALSO HAS TO DO WITH MORE UNCERTAINTY, SOME TERM PREMIUM IN THERE, OBVIOUSLY DEFICITS AND THINGS LIKE THAT. IS THAT 10 YEAR PART OF THE CURVE THAT WILL MATTER FOR MOST OF THE REAL ECONOMY? VONNIE: HOW MUCH IS INFLATION HURTING THE LOWER PART OF THE K OUT THERE? >> IT IS HARD TO PUT A NUMBER TWO. I WOULD BE INCREASINGLY CONCERNED THAT AS WE ENTER THE REST OF THE YEAR, YOU SEE MORE

31:51 OF A DRAG ON GROWTH AND CONSUMPTION FROM THINGS LIKE HIGHER GAS PRICES. INFLATION WOULD BE HURTING THAT PART OF THE CONSUMER MORE. YOU HAVE TO REMEMBER THAT BACK IN THE SPRING WHEN GAS PRICES FIRST ROSE, IT WAS THE SAME TIME WE WERE GETTING THOSE LARGE TAX REFUNDS SO I THINK THAT PROBABLY HELPED BUFFER SPENDING. WE DO NOT HAVE THOSE LARGE TAX REFUNDS TO SUPPORT SPENDING NOW. NOW THAT GAS PRICES ARE JUST AS HIGH AS THEY WERE THEN, MAY BE MORE OF A DRAG. VONNIE: GOT A LITTLE BIT OF A RELIEF

32:23 AND THEN GAS PRICES HIGHER AND BRENT CRUDE STILL ABOVE $100 A BARREL. THAT YOU SO MUCH. VERONICA CLARK JOINING US. NOW TO OTHER TOP STORIES. WALL STREET BANKS FACED ANGRY INVESTORS YESTERDAY IS PARAMOUNT’S BONDS AND LOANS PLUNGED AFTER A MASSIVE 52 BILLION ARE DEBT SALE TO FUND ITS WARNER BROS. BY UP. INVESTORS RACKED UP MORE THAN $100 MILLION OF LOSSES IN JUST HOURS AND THE COST OF BETTING AGAINST PARENT UP’S DEBT SURGED TO A 17 YEAR HIGH.

32:55 OIL THONG AS FRANCE PROPOSES EUROPEAN COUNTRIES AND IEA MEMBER NATIONS RELEASE 100 MILLION BARRELS OF DIESEL ANCHORED. FRENCH PRESIDENT EMMANUEL MACRON – DIESEL AND CRUDE. FRENCH PRESIDENT EMMANUEL MACRON TO CONVENE A MEETING. LULA AND CHALLENGE BOLSONARO ARE NECK AND NECK BEFORE SUNDAY’S ELECTION. A NEW POLL SHOWS LULA WOULD TAKE 48% OF THE VOTE, WITH BOLSONARO WITH 45%, IMPLYING A TECHNICAL TIE.

33:29 SENDING AN AIRCRAFT CARRIER AND 10,000 MARINES TO THE MIDDLE EAST. WE WILL DISCUSS. THIS IS BLOOMBERG. I AM VONNIE QUINN IN NEW YORK. THE PENTAGON MOVING TO THE PLAY A THIRD AIRCRAFT CARRIER AND 10,000 SAILORS AND MARINES TO THE PERSIAN GULF, ACCORDING TO U.S. OFFICIAL. THE MOVE GIVES WASHINGTON MORE OPTIONS IF ATTACKS ON IRAN ESCALATING. JOINING US IS BLOOMBERG

34:01 GOVERNMENT – JONATHAN FROM BLOOMBERG GOVERNMENT. HOW DOES A DECISION LIKE THIS GET MADE? DID THE PENTAGON DO THIS PROACTIVELY? >> I DOUBT THE PENTAGON DID THIS PROACTIVELY ON ITS OWN, ESPECIALLY THIS CLOSE TO AN ELECTION SEASON WHEN THIS WAR IN IRAN IS SUCH A SENSITIVE POLITICAL TOPIC. I WOULD THINK THAT THIS WOULD COME FROM THE WHITE HOUSE. WE DO NOT HAVE A TON OF REPORTING ON THAT BUT THAT’S WHAT MY GUT WOULD SAY. IT SHOWS THE VACILLATION’S WE HAVE SEEN. WE HAD A FEW WEEKS AGO THE

34:36 PRESIDENT TALKING BUT A POSSIBILITY FOR A DEAL AGAIN WHEN HE WAS AT THE UNITED NATIONS ASSEMBLY IN NEW YORK, BUT NOW SHOWING SIGNS OF MORE ESCALATION. IT IS PROBABLY NOT SOMETHING A LOT OF VOTERS ARE GOING TO WANT TO HEAR BECAUSE THIS WAR IS VERY UNPOPULAR. THIS SIGNALS THE POSSIBILITY THAT IT GOES ON OUR ESCALATES IN THE NEAR FUTURE. VONNIE: HOW ARE STOCKPILES? IS IT POSSIBLE FOR THIS TO ESCALATE VERY EASILY? DO THEY HAVE THE FIREPOWER? ON THE ONE HAND, PRESIDENT TRUMP IS THREATENING SOMETHING AFTER THE ELECTION IF IRAN DOES NOT COME

35:07 TO THE TABLE. ON THE OTHER HAND, WE KNOW FROM VARIOUS REPORTS THAT STOCKPILES AND ADMONITIONS ARE LOW. >> THAT IS A MAJOR CONCERN FOR MEMBERS OF CONGRESS, THAT THIS HAS DIMINISHED TO THE U.S. PREPAREDNESS FOR ANY OTHER CONFLICTS THAT MAY ARISE. THAT HAS DIMINISHED TO THE U.S. PRESENCE OUT IN THE PACIFIC SO IT IS UNCLEAR HOW MUCH FURTHER PRESIDENT TRUMP ACTUALLY KIND OF. IT IS VERY HARD TO GET VERY CLOSE DETAILS ON ALL THE MUNITIONS BUT THAT CONCERN HAS BEEN RAISED BY MEMBERS OF BOTH

35:40 PARTIES ABOUT WHAT FURTHER ESCALATION WOULD DO FOR THE U.S. AND ITS PREPAREDNESS AROUND THE WORLD. VONNIE: THE OTHER THING THAT HAS BEEN COMING UP HIS TRUMP WARNING DEMOCRATS WILL IMPEACH HIM IF THEY TAKE OVER CONGRESS. APPARENTLY, THIS IS HIS NEW WAY OF MOTIVATING THE GOP. IS THAT RIGHT? >> IT IS. HE WAS OUT IN A COUPLE OF RALLIES YESTERDAY AND PRETTY CONSERVATIVE TERRITORY SO I THINK THIS IS A WAY OF SPEAKING TO HIS BASE THAT STILL SUPPORTS HIM TO SAY, YEAH, THEY ARE GOING TO COME AFTER ME.

36:11 HE HAS OFTEN SAID IF THEY ARE COMING AFTER ME, THEY ARE COMING AFTER YOU TO HIS DAUGHTERS TO RALLY THEM. HE HAS KIND OF GONE BACK AND FORTH, PREVIOUSLY SET ACTED LIKE I AM ON THE BALLOT, AT OTHER TIMES HAS SAID I AM NOT ON THE BALLOT. HE SEEMS TO WANT TO DISTANCE HIMSELF FROM ANY POTENTIAL LOSSES BUT HE IS USING THIS TO TRY TO MOTIVATE WE THINK HIS BASE. DEMOCRATIC LEADERS HAVE BEEN NONCOMMITTAL ON IMPEACHMENT BUT THERE ARE CERTAINLY MEMBERS OF THE RANK AND FILE THAT WANT TO GO FORWARD WITH THAT. VONNIE:

36:45 SPEAKING OF WHICH, THE REPUBLICAN LED CONGRESS HAS LEFT WASHINGTON UNTIL AFTER THE MIDTERMS AND HAS NOT REALLY ADDRESS CONCERNS OVER AFFORDABILITY. IS THIS THE RIGHT STRATEGY? JUST EVERYONE TO THEMSELVES NOW AND EVERYONE OUT CAMPAIGNING? >> THERE IS A LOT A FRUSTRATION THAT THEY HAVE NOT BEEN ABLE TO. THEY SPENT A LONG TIME DEBATING A BILL ABOUT COLLEGE SPORTS, WHICH IS MEANINGFUL TO A LOT OF PEOPLE, BUT PROBABLY NOT AT THE TOP OF WHAT IS GOING TO DRIVE PEOPLE’S VOTES IN NOVEMBER. THERE WERE BILLS PROPOSED AROUND INSULIN COSTS, AROUND DATA CENTERS.

37:22 THEY WERE NOT ABLE TO GET THEM THROUGH, IN LARGE PART BECAUSE OF DEMOCRATIC OPPOSITION BUT EVEN SOME REPUBLICANS SAID WE WAITED TOO LONG TO BRING THESE ISSUES UP AND TRY TO ADDRESS THIS. THEY HAVE NOT PASSED A LOT OF LEGISLATION THAT DEALS WITH WHAT POLLS SAY IS THE TOP ISSUES PEOPLE ARE GOING TO VOTE ON. SOME FOLKS ARE BETTER OFF IN THEIR DISTRICTS CAMPAIGNING BUT THEY DON’T HAVE A LOT TO SELL VOTERS FROM THE LAST 9-12 MONTHS. VONNIE: THANK YOU SO MUCH. JONATHAN TAMARI.

37:53 ANTHROPIC IS MEETING PROSPECTIVE IPO INVESTORS OCTOBER 14, SETTING THEM UP FOR A DEBUT BEFORE THANKSGIVING AMID CONCERNS OVER AI SAFETY. NEIL CAMPLING JOINS US. IT APPEARS WE WILL GET ONE OF THOSE MASSIVE IPOS THIS YEAR AND NEXT MONTH IN FACT. IS THE MARKET PREPARED GIVEN SOME OTHER COMPANIES LIKE OURA DELAYED ITS IPO? NEIL: I THINK YOU ARE SEEING SOME DELAYS OF IPO’S ACTUALLY BECAUSE WE ARE LETTING THE GLIDE PATH OPEN UP TO ANTHROPIC.

38:25 THIS IS THE MOST ANTICIPATED IPO OF THE YEAR I WOULD SUGGEST, EVEN GREATER THAN SPACEX EARLIER IN THE YEAR AND IT IS IMPORTANT TO COME TO THE MARKET FIRST. OUT OF THE TWO BIG FRONT TIER MODELS ARE AHEAD OF OPENAI BECAUSE THERE IS THAT POOL OF CAPITAL, SO SUCH A LARGE VALUATION AND FUNDRAISING EXPECTED. IT IS WHO CAN GET THEIR FIRST, BECAUSE THEY ARE BOTH STILL BURNING THROUGH HUGE AMOUNTS OF CASH TO FUND THIS AI FRONTIER LEADERSHIP. IT IS A GOOD STACK GIVEN THE

38:58 CONCERNS WE HAVE WITH THE AMODEI LETTER THAT HE WROTE AROUND CONCERNS ABOUT THE TECHNOLOGY. THAT IS DEFINITELY GOOD NEWS. VONNIE: SO MANY AI STORIES INCLUDING AMAZON PLEDGING A BILLION DOLLARS TO COMMUNITIES WHERE IT IS GOING TO BE ACTIVE IN AI AND DATA BUILDING IN BROADCOM INVESTING A MASSIVE AMOUNT OF MONEY FOR CHIPS. YESTERDAY, WE SAW THE PROSPECTUS. IT WAS $42 BILLION AND NOW EVEN MORE. GIVE US THE DETAILS. NEIL: BROADCOM LIKELY TO BE RAISING

39:35 $60 BILLION IN TOTAL TO FUND THE HUGE AMOUNT OF CHIPS REQUIRED MAINLY FOR ANTHROPIC. WE HAVE GOT THE FINANCIAL TIMES ABOUT AMAZON EXPLORING A DEAL TO MOVE $8 BILLION WORTH OF NVIDIA CHIPS OFF-BALANCE-SHEET. IT IS AN INTERESTING VEHICLE BUT IT MEANS AND THE BROADCOM ONE AS WELL THAT WE ARE SEEING THIS AI TRADE IS SEEPING INTO OTHER PARTS OF THE MARKET, WHETHER THAT IS CREDIT OR INSURANCE, ETC. ONE THING WE DO NOT KNOW IS THAT WHEN YOU ARE DOING THESE

40:08 SELL AND LEASE BACKS, THIS IS NOT AN AIRCRAFT WE ARE LEASING. WE ARE TALKING BY GPUS AND WE DON’T KNOW WHAT THE RESIDUAL VALUE OF THOSE GPUS WILL BE. THAT APPETITE IS THERE FOR AI ACROSS MULTIPLE ASSETS. HOW THIS PLAYS OUT REMAINS TO BE SEEN. KEEP AN EYE ON THE CDF SPREADS, ON THE FREE CASH FLOW FROM HYPERSCALERS. IT IS MORE STEPS THAT AI REMAINS FRONT AND CENTER IN EVERYONE’S MIND. THIS ONE BILLION THAT AMAZON ARE TALKING ABOUT TO SWEETEN THE IDEA OF AI DATA CENTER

40:43 BUILD OUTS AS A POLITICAL HOT POTATO. WE HAVE A HUGE AMOUNT OF COMPUTE THAT NEEDS TO BE BUILT STILL THAT HAS NOT EVEN STARTED BREAKING GROUND YET ACROSS THE U.S. I SUSPECT OTHER COMPANIES WILL FOLLOW AMAZON’S EXAMPLE OF HELPING THE COMMUNITIES AROUND WHERE THESE DATA CENTERS GET BUILT UP. VONNIE: WE HAVE ALREADY SEEN I THINK META DID SOMETHING SIMILAR SO COMPANIES ARE DEFINITELY TRYING TO ERASE SOME OF THE PR AND MARKETING PROBLEMS THEY HAVE BEEN HAVING DUE TO THIS AI BUILDOUT. OBVIOUSLY, COMMUNITIES ARE NOT PLEASED FOR THE MOST PART.

41:16 BACK TO THE ANTHROPIC IPO. WILL EVERYBODY BE INVOLVED? DOES EVERYBODY THINK IT IS A GOOD THING TO GET INVESTED IN THIS? I AM TALKING PENSION FUNDS, INSURANCE FUNDS, INDEX FUND PARTICIPANTS, AND SO ON? NEIL: AS WE GET CLOSE, WE WILL FIND OUT ABOUT THE TERMS AND CONDITIONS ABOUT GOING INTO THE MAJOR INDEXES. I THINK THE MUTUAL FUND APPETITE FOR THIS DEAL WILL BE VERY ROBUST BECAUSE I THINK THIS IS, THERE’S A LOT OF A LOT

41:47 OF INTEREST WITH SPACEX, I THINK THIS WILL BE HIGHER, SO I EXPECT A LOT OF MARKET PARTICIPATION, ESPECIALLY WHEN IT IS SUCH A HOT PART OF THE MARKET. MUTUAL FUND INVESTORS THEMSELVES I THINK WE WANT TO SEE THIS COMPANY BEING LISTED IN THEIR EQUITY LIST AS IT GETS TO THE END OF THE YEAR. VONNIE: THANK YOU SO MUCH. BLOOMBERG’S NEIL CAMPLING.

42:23 VONNIE: NOW A LOOK AT WHAT’S AHEAD TODAY. WE GET SEPTEMBER JOBS DATA AT 8:30 A.M. NEW YORK TIME. WE GET FACTORY ORDERS AND NEW YORK GOODS AT 10:00 A.M. OVER THE WEEKEND, BRAZIL HOLDING THEIR FIRST ROUND OF ITS PRESIDENTIAL ELECTION. LET’S TAKE A LOOK AT SOME MOVERS PREMARKET. NIKE SUFFERING A 10% DECLINE. IT POSTED DISAPPOINTING RESULTS AND WARNED THINGS ARE GOING TO GET WORSE, THIS WITH ELLIOTT

42:56 HILL TWO YEARS INTO THE JOB CONTINUING THIS TURNAROUND WHICH IS ALSO CHANGING CHARACTER. ON SEMI OF 6% AND TUOLIO GOING TO REPLACE WARNER BROS. IN THE INDEX. A LITTLE MORE MOVEMENT THEN WE ARE USED TO SEEING ON DAYS LIKE THIS. NOT THAT 100 FUTURES POINTING TO A NICE AGAIN AND BRENT CRUDE DOWN 2.9 PERCENT AS EUROPE LOOKS LIKE IT MIGHT ACTUALLY RELEASE SOME STRATEGIC RESERVES. THE 10 YEAR YIELD DOWN ON THE

43:27 WEEK, 5.22.