US Jobs Forecast, SEC Suing Musk, FTX Testimony Latest

Good morning.

I'm Brian Curtis and I'm Doug Krisner. Here are the stories we're following today.

The job support tomorrow in the US may set the tone for the Fed's policy meeting in November. We get September employment data at eight thirty in the morning Wall Street Time. Let's get a preview here from Bloomberg's Michael McKee. It's not what the Fed does, or, to a lesser extent, what it says. It's how the market reacts to the September payrolls report that will matter. Bond deals have leaped upwards in the past few weeks, tightening financial conditions and

And that takes us to the latest Fed speak. Today we heard from the head of the San Francisco Fed, Mary Daily. She said the FED could hold steady. Here's the caveat if the labor market and inflation both cool, or if financial conditions remain tight. Here is Daily, speaking earlier with Bloomberg.

The bond market has tightened quite considerably over about thirty six basis points since we met in September. Well, that is equivalent to about a ray hike, right, and so then the need to do tightening additionally is not there?

Mary Daily?

There?

She is the head of the San Francisco FED. We also heard today from the head of the Richmond FED, Tom Barkin. He was saying surging treasury yields reflect strong economic data as well as heavy supply from the US Treasury. Barkin went on to say he sees a narrow path to a soft landing, one that will avoid a recession.

Right well, US banks have raised their economic growth forecasts for China. Let's get the story from Bloomberg.

Jen Kates, JP Morgan Chase strategists say recent data suggests the economic slowdown in China since April has likely bottomed and a turn around as underway, and that trend, coupled with additional policy support, means China is on track to meet the upgraded five percent target. For its gross domestic product. City Group is also boosting its GDP projection for China

Bloomberg Radio Elon Musk is being pressed to testify before the Securities and Exchange Commission about his stock sales ahead of mister Musk's purchase of Twitter. Here's Bloomberg's Tom Giles.

The things that they're looking into. In particular, he tweeted back in May of that year about how the deal cannot move forward. This all came out in the middle of last year. It was basically the things that he said publicly about the deal. The sec is wondering whether those things were on.

The up and up Bloomberg's Tom Giles. There now attorneys from mister Musk are saying their client has testified numerous times, and they added, quote enough is enough, Brian.

While we moved next to the fraud trial of FTX founder Sam Bankman, freed co founder Gary Wong took the stand today and provided some damning testimony to the court. We get more here from Bloomberg's Ava Benny Morrison.

He walked into the court. He didn't make eye contact with Sam. He sat in the witness box and we're speaking very quickly and could tell he was a little bit nervous, sort of reciting everything that happened at FTX in front of a court room full of people. He said that, yes, he committed a financial crime with Bateman Freed, he altered the code that allowed Alameda to borrow billions of dollars from FTX.

That's Bloomberg's Ava, Benni Morrison. We also heard from another of bankman Freed's MIT classmates, Adam Rdidia. He testified that Bankman Freed privately expressed concern about a potential eight billion dollars shortfall at FTX. Bank Man Freed's lawyers, who are arguing that he made some mistake but had no ill intent, will continue to try and undermine some of those weaknesses

Yeah, so far this week WTI and I'm talking four trading days here, WTI is down more than a nine percent. To your point, Brian, and we were talking a short while ago about the fact that WTI today and New York trading broke below that fifty day moving average for the first time since July. So the big question is whether or not this downward path for oil will be sustained.

Yeah, and we mentioned that the jobs report will set the tone. I think also the CPI next week will be very important, so to be a little bit of a one to two punch, A couple of other stories will get to China's aggression pushing other countries closer to the United States. That's from the Pentagon's Number two Kathleen Nick's, a story that ED will be taking a look at. And also this is sort of interesting. Even China's closest

Ed, Yeah, that's right, Brian, not all of it, but more of it at a way at President Homeland National Security meet end today, saying he is cornered borderwall.

When money was appropriated for the border wall. I tried to get them reappropriated to redirect that money. They did, they wouldn't And in the meantime, there's nothing under the law other than they have to use the money for what was appropriated.

And Bloomberg's Ryan Tige Beckworth says, all some environmental concern will be waved. This was not expected.

It's definitely not something that you would expect because he had explicitly promised, and I quote him directly quote not one foot border wall would be constructed if he were.

Elected, Ryan says. The President says he had to use the money for that purpose. Ask whether the President asked whether he would he thought it would stop migration, he said flatly. No high level meeting on migration US today between Homeland Security, Department of Justice, State Department, and Mexican authorities. Homeland Secretary Alejandro Majorcas.

Today's high level security dialogue is the first to include migration as part of its agenda. An essential component of our National and Regional Security.

Meeting in Mexico City. Russian President of Vladimir Putin saying pieces of grenade were found in the bodies of Wagner founder Yevgeny Progosian and other Mercenary leaders who died in the plane crash. Putin handed progotion had been a drug user. Putin says no evidence of external impact on the aircraft. He says, unfortunately they didn't test for alcohol or narcotics

You know, obviously Trump is famous for making a decision and then un making that decision, or you know, calling an audible at the last moment. But if House Republicans change their rules, and there's several House Republicans calling it that he could be speaker, which would really throw a whole wrench not only to House politics, but twenty twenty.

Fours seeing of the speaker's roster with the gavel, he'd loved that. Joe almost backtor Reality the TV most pointed attack yet on the case against Donald Trump for subversion surrounding trump efforts to interfere with the twenty twenty election. Trump attorneys have asked the judge dismissed the case as a whole. They argue he's immune from prosecution for actions they say we're taken as his official role as president, and US Pentagon says China's growing assertiveness in Asia's pushing

This is Bloomberg Daybreak Asia. I'm Brian Curtis in Hong Kong alongside Rashad so On, and our guest is Ryan Belonger, is managing principal and founder of Claro Advisors. Ryan, thanks very much for joining us. So we mentioned that we had fairly big drop in bond yields from one point to the next on the ten year, as much as seventeen basis points so and also roughly a ten percent drop in oil prices. Is that enough to put soft landing back into the conversation?

You know, I don't think it is. I mean, I think it's a nice reprieve. People can breathe a sigh of relief for a little bit here. But we've just got a lot of data coming out soon that I think it's going to just continue to reflect weakness in the economy, and you know, in particular the payroll data that we kind of got a.

Sneak peek at with the ADP report.

I just think it's going to be difficult to get the soft lending done.

I do think we should give the Fed, you know, a lot of credit.

So far they've got they've gotten it to a pretty good spot. I just think it's probably more likely than not that they they overtightened, and you know that's better than the alternative.

Right, And don't they need to overtighten. Don't they need to put the economy into recession and ode for them medicine to work.

Yeah, I totally agree.

And I think comes that you know of probably a decent recession, nothing severe, but you know, recessions are just part.

Of the economic cycle, and I think that'll play itself out.

But you're starting to see, you know, a fair amount of cracks in the system. Most of the leading economic indicators have turned negative for a substantial period of months, and I just think the one of the you know, things that happens with rising interest rates is a lot of refinancing costs where coming to home to roost. I mean, next year, the commercial real estate market alone has almost one trillion of assets that need to be refinanced.

Yeah, yeah, sorry, I just want it's just good care on the same thing about recession, et cetera, et cetera, because you know, it's a horrible thing to say, but does American need a recession given that you know, they've the Central Bank not just of course the fad, but that has essentially been masking the economic and business cycle with their actions and monetary policy to stop of course what had the worst of the GFC, and also ever since then with the free money aspect, that maybe the

You know, I'm a big proponent of that.

I mean, I think if nothing else, it'll get the decision makers in Washington to get on a better fiscal path, which I think is you know, something that really needed to be talked about more and I think will be as especially as we get.

Into a recession. It's just, you know, we have a we have.

A spending problem, and we're spending a considerable amount of our GDP on entitlements and an interest costs. I mean, we're going to spend probably close to the ten eleven percent of our federal revenues on interest payments alone, and other TRIPA A Ready companies spend one percent.

So we got we got to figure that out.

Let me raise an interesting scenario though. You get a recession, in other words, you get two quarters of negative growth, but you don't really lose that many jobs. You know, usually you do. But if we don't this time, and that might be the case because we see that companies are reluctant to lay people off. Does that make it okay? Does that sort of bring back the soft scenario?

Thinking it could? I mean, anything's possible.

I just think, you know, typically recessions are a little bit more severe than just that.

I mean, I think we've only had.

Two or three soft landings, you know, in the last seventy years, and none of those involved the scenario that we have now. So I'm just thinking, you know, it's more likely than not, but it is possible, and I do think the Fed's done a really good job so far. There's a lot coming down the road that people should be focused on as it released to their portfolios.

So if you bring the hard landing into the picture, since you've already had a pullback in stocks, what does a hard landing mean for the stock market.

Well, you know, I think we've had a you know, the last six weeks or so have been a pullback. But if you zoom out a little bit more than that, you've got equities still trading at above historical market pe. So there's still kind of expensive historically. I mean, if you go back to look at the two thousand and eight recession, we traded at ten twelve multiple on earnings. We're still at you know, eighteen seventeen eighteen on the S and P. So I think there's a meaningful pullback

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Listen coast to coast on the Bloomberg Business app, Sirius XM Channel one nineteen, the iHeartRadio app, and on Bloomberg dot Com. I'm Brian Curtis.

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