alix: 30 minutes into the u.s. trading gate. here are the top stories. apple will unveil the iphone 15 with an upgrade and some bones potentially made in india. the latest on the ground. west rock bought to create a

packaging powerhouse. we will speak to kenneth bowles. a manager survey a rush out as the most crowded trade. welcome to "bloomberg markets." jonathan: -- guy: foil is up. guy: it is the big event tomorrow. apple stock could be significant. it really needs to deliver. cpi is a big. the question of the day around this bank of america note talking about people are not sure if it is by america or cell china. china is so bad you've got degrees of separation.

china which ever when seems to be selling aggressively then emerging markets then europe and then you end up in the united states. if you want to go as far as china -- far away from china as you can you end up in the united states. alix: huge exposure to china and if you can't have demand to buy the phone, that will be an issue. guy: all in many ways is similar to the luxury stocks. the new high-end phones are super expensive and luxury names are warning of a slowdown in america and europe. china was meant to be the counterweight and it is not happening. is it a cell china or by america? >> fund managers want to buy

more america, especially when you're thinking about china and if you think of the bearishness in this particular survey from bank of america. the sentiment is more bearish than it was a year ago, right before the reopening and especially what was happening with covid it. when you look at china and you think about is happening the property debt issues, that is causing concerns. moving more away from emerging markets and torn u.s. stocks and equities. and bank of america showing they are seeing inflows into. alix: it makes it easy to say by america -- buy america, but i gotta say look at oracle.

abigail: investors are blaming it on valuation that the stock was trading with high expectations coming into the quarter relative to china versus the u.s. in putting aside oracle because it is having a breakdown i would save is more macro related than stock related. this bank of america survey is saying the u.s. is buying the best house on a bad block. kyle bass used to be one of the preeminent bears out there and if i heard him correctly he said he would short china and is neutral china. you have to remember that the sell china crowd was bullish back in february. china weakness could triple into your and going into the u.s.. what i would say about u.s. tech is that it is over valued in trading at 30 times the growth in a lot of cases. apple if you can believe it,

there is no growth which is amazing to think about. it may be time to look at catch up trades. guy: is europe therefore the proxy in this as well? two what extent is your infected by the narrative? the car sector is down 4%. mercedes, big exposure into china. travel down 6%, luxury down. a lot of those sectors have big exposure in china. is europe trading on europe or on china and the effect it has? ill: we are a connected global economy and i don't think you can separate any of these economies. china is the second largest economy.

some reason there is a narrative or psychology that europe is more closely tied to china in terms of those products. i would argue the u.s. is just as closely tied but our economy is proving more stable perhaps because the action of the central banks coming out of the pandemic. if you believe china is slowing down and despite thinking there could be a contrarian play, some incidental reports of people that were there they are saying the slowdown in china is actually worse than being reported. i would have to think it is not just trickling into europe, maybe they are seeing it earlier and maybe some of the sectors are trading more, and the luxury products and some luxury brands could be a boost, but at some point i would think it would also hit the u.s.. it is hard to see china going into a recession and that is something that should also be on

the radar screen. alix: u.s. real household income fell in 2022 and cpi was 8%. keep that in mind when we are talking about that. guy: i wonder what the number will look like this here, because last year it was about inflation. this year, look at what is happening with the uaw and what is happening here. the u.s. will have a pension problem so last year in some ways was about inflation and this year it is about the wage hit. to what extent will that be enough to keep the consumer on track? alix: in the u.s., the consumer was holding everything up. it feels like if that cracks it is a different story.

it wonders if buy america is not the case if the consumer is going to crash. jess: looking at retail earnings and barclays is more optimistic when we talk about retailers and the consumers. if you look at a quarterly basis, there is no longer a contraction. people are talking about the student loan repayments and what is going on potentially with washington as far as different issues there but we are looking over all the consumer has been more resilient but there are shouldn't about how long companies and margins can continue to pass the price pressures and costs on. when you're looking at the oz with a recession at 60%, a lot of economists are shifting their tone and pushing those forecasts out. alix: thank you so much. retail sales coming out

thursday. coming up, more perspective on the question of the day sell or by china. ♪

>> will have the cpi data. >> cpi is important. >> the headline is expected. to be fairly high. >> we expect it to come in strong. >> energy prices have ticked up. >> and may be a continuation of positive trends. >> that will be more problematic. >> the continuation of the draw

is the likely scenario. >> i don't think the fed will change the trajectory in terms of september. >> the question will become the november meeting. >> this is a very complicated time for the fed. >> the last mile is going to be hard. alix: those were bloomberg tv guests weighing in on inflation numbers due out tomorrow. a survey from tech, do you buy america or sell china? anastasia: we are in much better shape and part of that has to do with the u.s. lack of interest rate sensitivity. if you look at mortgage balances in the united states, they are not adjustable rate mortgages, their fixed rate and that is not

the case in europe were a large percentage are adjusting higher and that is a pain point for the consumer. i think about the energy story. the u.s. is a net exporter of energy and europe is a net importer. when you think about the fisheries of heil -- high oil prices, stocks are benefiting. i many reasons to think it is a buy u.s. story. europe maybe is just going to deliver around zero. i think it is a buy america and tech and there is a lot in the u.s.. guy: act is expensive and america is expensive and isn't that enough incentive to look outside? anastasia: discount of europe relative the to the u.s. is one of the highest we have seen.

i look at the valuation plus positioning plus a catalyst. you may have valuation that is cheap what will be the catalyst? this may all change and we can have a very different conversation a couple months from now, but from now what i know the earnings vision story in the u.s. is the catalyst for u.s. stocks. if i look at earnings revisions for u.s. stocks this year, positive earnings are positive 23%. i think it is lacking the catalyst for europe at the moment. alix: the argument that if there is a disruption the u.s. has more default than europe, if we do get into a harder landing will u.s. critter more? anastasia: all if that is a given period when i talk about the imbalances, for the u.s. to create more we have to have

excessive leverage. when i look at the consumer corporate balance sheets whether investment-grade or high-yield, we are in better shape than we were during the financial crisis or immediately after. the big question for the u.s. is what is going to happen with government debt and there are concerns around that mark -- worked into the market. the american consumer wouldn't crater because there is not the deleverage cycle. guy: in terms of why this is happening, is it because the federal government is continuing to spend money at an aggressive rate which makes the american economy looks much better and by extension people want to buy u.s. stocks? is the risk around the bond market, we talk about buy america and is it stocks or not bonds? anastasia: it is buy american

stocks. there could potentially be bad news but the good news is bond yields are rising because growth expectations are rising and that is a benefit for stocks. we could also get a move in treasury yields if there is more concern about budget deficit spending that we have not addressed in the fact that we are going to continue this for several years will add it to additional expenses. i am concerned bond yields may move higher because that additional issuance coming. to your question about why is this happening and what is there u.s. resilience, lack of interest rate exposure. if you look at on the plane at 3.8% and wage growth still on pace for 4% year-over-year gains. all of those things contribute. and just last friday we got consumer household net worth

number which is $154 trillion, a large substantial gain in the sumer house net worth. alix: we had headline for wealth fell 2.3%. anastasia: square that with people have jobs and are getting paid more for the jobs and i think that is what is propping up the sentiment. alix: is it a sell china? anastasia: i don't think you want to share at the moment. so going back to positioning and valuation and catalyst standpoint, i think the government there is certainly trying to do more and more to stimulate the economy. i suspect at some point they will be accessible in the data we will see out of china won't

be as dire as it is right now. when i look at emerging markets, revisions have been very negative relative to the u.s.. i will probably not be quick to step into that. guy: very nice to see you. what are we going to talk about next? packaging, paper, stuff that turns up to your door on a regular basis. and limb $.2 billion to acquire west rock by smurfit. kenneth bowles is the ceo and he joins us next. this is bloomberg. ♪

guy: pairs of the irish paper

rods are plunging. down 9.4%. the company announced an 11.2 million known. let's talk about the reaction we are getting from the market. he will continue in that role. great to see you. thanks for taking the time to see us this afternoon. the reaction i am hearing is the investor base is concerned this is a distraction at a time when you need to be focusing on costs. what do you say to those investors and concerns? kenneth: it is a point in time where this makes sense to come together.

smurfit has spent a journey through multiple plans. i am watching westra begin that journey and slightly behind in the transformation given where we both are in this cycle and where we both sit in terms of opportunity, it is the right time to join these two companies together. improve the efficiency and footprint and bring two great teams together and improve customer proposition. alix: rats, are you overpaying? ken: when you look at this on a relative multiple basis, sales in west rock are trading just around seven times which is well below any time of recent trades for this sector. we have seen these go to 11, 12

times. sometimes when you look at the premium on its own, the reality is both sets of shareholders get to participate in a much bigger skilled organization. guy: white rest rock? -- west rock -- why west rock? ken: we see an organization that is aligned to where we sit and very market focused and innovation and sustainability which we are leaders in. if you look at our portfolio, the big cap was america. and the markets where we don't have overlap is incredible. we did look around but westar

the cultural fit and geographic fit made the most sense. you can't ignore the u.s.. we have been in the u.s. since 2013 on a very small scale. we have good intelligence. this is an opportunity to scale up in the u.s.. it is a market we have been trying to get into for many years since being there in the 1990's. it is a great opportunity to come back with a great partner. alix: how do you see the global economy evolving? is it about may be stagnation in europe and more growth in the u.s.? ken: generally we see the u.s. come out of these cycles quicker than the europeans do. when you put this between europe and north america, it gives you a portfolio of businesses that

work the cycle in a balanced way. you get less volatility during the cycle with better free cash flow. the company of this scale is able -- is able to whether any storm. alix: will this kick off more? ken: who knows? it will hard -- be hard for people to ignore this combination. it is a sector that has enjoyed a lot of consolidation over the years. this will be the biggest in years but let's wait and the. -- let's wait and see. guy: are we going to see more cardboard on doorsteps? every time i think about paper and packaging and e-commerce i am trying to figure out how i get less undermine doorstep. i threw tons away every week.

where does the innovation come from in this industry as you think about where this business you are creating in a few years time, is it scaled or innovation? ken: it is innovation at the heart. what you are seeing is an ever increasing push for the consumer to less destructive materials in the environment. there is probably less air and waste in the box now and fundamentally lighter. over time we have positively reduced waste and that is the innovation part. we have seen the ability to use renewables. guy: what is happening in e-commerce? you have a ringside seat.

what is happening there and where are we in the economic cycle? we are all trying to stand whether the u.s. and european economies are rolling over. what insight can you give us in providing packaging we all get our stuff living in at the moment as to what volumes look like? no we are bottom cycle? do you see it picking up? is it consumer driven? ken: what we have seen in the first six months of this year is people prioritized travel and leisure services or durable goods. e-commerce has been on a volume growth demand. more mature markets in north america and europe is still growing. i think what you will see in years to come, les brown box and

more returnable and customer driven and the idea that the customer wants a brand as well as the retail market. the opportunity still remains quite large. alix: i am so getting a box this big for something that is this small. ken: not from smurfit. alix: that is true. when you wind up merging and looking at the labor force, are you tempted to hold onto labor because we don't know what any real bounce back will be in the europe and u.s.? ken: tweet recognize the town that exists at the westrock team . that doesn't enter the equation for most of the businesses and

it is about retaining talent. guy: do think you will have any regulatory issues with the deal? there are areas where you will have a big footprint. you have to offload anything to make the regulators happy and maybe mexico could be a prom for the markets as well? ken: we have limited overlap in the countries that wait operate in and don't necessarily have competing products. we don't currently see any issues from a regulatory issue. alix: it was so good to catch up with you. i do think how company is wind up treating their labor force and dissecting it whether or not they are merging will be interesting. you have to wonder how much this will start the jobs data. guy: it seems to signal that

companies are dealing with inflation and labor market issues. i get a lot of boxes where you get one small thing and one big thing. that may not be a smurfit kappa. i imagine you get a lot of boxes. alix: less than i used to but good try. guy: there was a time my children would play in the boxes but no more. ritika: -- alix: we digress. when our into the trading session. -- one hour into the trading session. abigail: a lot of choppy action over the last few weeks. the s&p 500 down .4%. clearly big tech taking a bit of a hit.

pressure coming from the bloomberg dollar index and yields up slightly, not in a huge way. investors waiting for cpi. we have one start sector that is energy, not just higher on the day but over the course of the quarter, the energy sector of 12.4% headed for its only of quarter for the year, the best since december 2022. oil has a total stealth rally above $90 a barrel, perhaps a combination of the opec-plus and maybe some idea that demand in the u.s. is ok. it is hard to put the narrative together on it. we have exxon mobil trading up 2.5 percent. tesla just moments ago had been up more than 1%, perhaps afterglow on the morgan stanley call but now down. apple down 1.1%. this is not so surprising.

have the iphone reveal and product revealed event today and i believe most of the days of this event the stop -- stock does drop. evaluation on this stock is high in growth is low so investors could be thinking about that. we have had a massive decline, technically stock is challenged and investors ready to pounce. take a look at the sellers on oracle down nearly 13%, the worst day since march 2002. high expectations around the cloud. it was a downgrade but it seems investigators are not willing to tolerate. a big factor will be the fed next week. tomorrow we have cpi. if we take a look at core cpi month over month and headlined month over month but analyze and i've never looked at it this way but we are actually at the fed

target at 1.93%. i don't think the fed looks at it this way. they are looking at pce and month over month figures but if you want to a little hope, there it is. guy: thank you very much indeed. i hope for amazing things coming out of california leader on. it is time for the startup on the west coast. the top tech stories in the bay area. silicon valley starting is stay with anticipation. this is what you are looking at. they are getting ready but everybody is excited, including ed ludlow. it is a big day. is it going to live up to expectations? how different is today? ed: it comes down to how substantial is the latest generation of iphone. we are and a base 15 plus, and

more importantly the pro model pro and promax. the strategy has been very clear. you reserve this serious technology upgrades for the higher end pro models and that is where we expect the nexgen processor, next-generation camera, magnification, from three ecstasy expects on the max pro and titanium sides as opposed to stainless steel sides because people get upset about finger smudges. is that enough to drive and upgrade? alix: we have been talking about the upgrade cycle since 2016. i understand this is a big event for apple lovers and maybe not just tactical trade. but for a broader investor, what will be the standout moments, will it meet certain phones

distributed are made in india? what is the broader look? ed: jonathan ferro told me there is a strategist out with a note that says wherever a behind me -- whatever happens behind me will have a macro economic fact. iphone is 50% of revenue that is $200 billion in 2022. scale we are talking about is important. we'll get a good read it later on the consumer. i think if you are an investor, apple frankly is at the heart of news flow. the relationship with china. this will be the first iphone launch where a made in india handset will ship straightaway. it usually comes to six to nine months later. alix: i am sure that was welcome news. thanks a lot.

you can catch number technology coming up in 90 minutes. guy mentioned earlier that small business him -- business optimism fell with one quarter saying inflation is a concern. turning us is holly wade. this is one of my favorite economic indicators because so many surveys, small businesses driving it. what were your biggest takeaways? holly: the 49 year three of the survey has never seen an environment quite like this for small firms. looking at the index, it did slip a bit in august. it is now the 20th month below the 49 year average of the index and small businesses are pessimistic. they are not optimistic about what business conditions look like going forward.

the interesting part of this is that the labor dynamic is still really tight for small business owners. they are still struggling to fill those open positions. guy: they are disappointed but are they frustrated as well? is there a sense that you have the economy where the consumer is being strong and wants to spend money and they are not able to satisfy that demand? holly: a lot of frustration amongst small business owners. that is one of the areas we have talked to many small business owners about is that they are not able to capture all of the sales opportunities that are available out there because they are not able to fill open positions that they would like to. they are competing on the wage front, still strong compensation and increases in the small business sector. they are doing all they can but it is a different environment.

alix: i wonder if this changes how they think about hiring or firing down the road that they won't give up workers because they are afraid of getting into this again and that distorts the labor numbers. holly: they don't have the margins for labor recording as the larger firms are able to do but certainly competing to retain those employees they have on the payroll currently and again competing to attract applicants for those open positions are huge challenges for them. most one quarter are saying it is their single most important problem in operating their business right now is labor quality. the other quarter is inflation and that picture hasn't changed for small business owners. so inflation pressures and the tight market are the still the biggest obstacles for small business owners. guy: how are small businesses being treated by big businesses?

holly: right now for those who are in the supply chain of big business or competing directly with big businesses, that is eight challenge but for the most part, small businesses are selling to the general public and that has not come up as a larger issue for most small business owners. it is one of the questions we have on our list of the single most important problems that we ask them and is still that has remained relatively a small issue for those in that environment. inflation and labor quality are the top two. alix: any sense as to how small businesses feel about the consumer? i feel like we say household savings is coming down, student loans kicking up. did you get a sense of that from the survey? holly: sales expectations going

forward have slipped a bit. we have seen a bit of deterioration on that front but not markedly where we would anticipate a recession in the next quarter. they are still missing sales opportunities for them because they are not able to fill those open positions. that is one of the main challenges. poor sales while it is impacting a few businesses out there, especially those in the position where customers are financing the product or service they are servicing and those prices are impacting that customer base, but for the most part, consumer spending has been supportive of the small business sector so far. alix: love the perspective. thank you so much. that says it all. guy: at that she talks about the

idea that the demand is there but it is the supply story. there is a frustration that they cannot satisfy all of the demand. alix: and prices are still high and that still feels like that is a signal to the fed. we will take a better look at dhl and talk about shipping and packaging. they are launching and expensing -- expanding. we are going to talk to mike parra about that. this is bloomberg. ♪

thanks to avalara, we can calculate sales tax automatically. avalarahhhhhh what if tax rates change? ahhhhhh filing sales tax returns? ahhhhhh business license guidance?

ahhhhhh -cross-border sales? -ahhhhhh -item classification? -ahhhhhh does it connect with acc...? ahhhhhh ahhhhhh ahhhhhh

we can barely keep in stock. blendjet 2 gives you ice-crushing, big blender power on-the-go. so you can blend up a mouthwatering smoothie, protein shake, or latte wherever you are! recharge quickly with any usb port. best of all, it even cleans itself! just blend water with a drop of soap. what are you waiting for? order yours now from blendjet.com before they sell out again! alix: you are looking at live shots of the principal room. senator tommy turberville joins us at 5:00 new york time. this is bloomberg. ♪

>> we are actually seeing iron or imports year over year for imports of 9%, steel production continues to do well. the chinese will be overproduction this year. we are just in the beginning of seeing growth because of what the chinese government have put in place over the last few months. the steel industry has been in a recession and rest month we just started to see a little growth again in the steel industry. we are fairly optimistic going forward. alix: he was speaking yesterday on global growth. mike parra joins us now with more on global growth and challenges facing the industry. thanks for joining us. mike: thanks for having us back. alix: can you give us where the

strength and weaknesses are as you see it? mike: uncertainty remains we are pointing to an increase next year we are seeing the china plus one starting to happen. we see it in mexico. we are seeing growth coming out of the north side of mexico as well. e-commerce remains strong and we expect a soft peak season forthcoming and that is what we are planning for. our business to business is flat-ish and we are seeing recovery in other countries and seeing growth in the americas. we are seeing omni shoring, french shoring depending on which terminology is being used. we are well-positioned as an organization to support those positions growing in whatever market they are in. guy: our question of the day is

is it buy america. china has a problem and therefore europe has a problem therefore america doesn't have a problem. how would you compare the asian, european and american economy right now? mike: we are starting to see outbound business growing out of the u.s. right now. we are seeing some growth in europe and asia but in different markets. we are seeing stronger growth out of the u.s. and more specifically in e-commerce. alix: what you think peak season looks like? mike: it is going to be soft. it is uncertain. we will know a lot more toward the end of the month. that will be a clear indication for us. on the ocean, that has often and tells -- has softened and that tells us inventory is reducing and not everyone is in a hurry to replace it. once they get into a hurry to

replace it we are there to support them through our fixed network operations. we will know more towards the end of the month. guy: are we still any services driven economy? we were talking about what was happening on e-commerce with kenneth both from smurfit. are you seeing restaurants and people like taylor swift coming up? mike: we are the big winner this year and we saw that through the increase in air travel costs. e-commerce, we are seeing growth. it has been resilient from that perspective. more money continues to be spent on experiences and we expect that to continue into next year. we are ready and equipped for the growth of e-commerce.

if there is a peak season we stand ready but if not we will stand down. alix: you sound confident that once inventory is down you will see a growth. what we see against building stuff and sitting there. mike: either one we will win and we have prepared ourselves from that perspective. where the great things about our company is we have flexibility in our air network. we have been flexing down over the last 18 months but we are going to new markets, argentina is an example. we are now using our own aircraft. brazil we were using commercial and now we are using our own. it so we can flex up and down rather quickly. if you think about what happened during covid, commercial airlines started takedown. we have fixed air and we can flex up or down during times like that.

guy: you said it was a risk there may not be a peak season? mike: what i said is there will be a soft peak season. it will follow around same guidelines as what we saw last year. we are planning for similar growth as last year in planning for continued growth specifically in the area of e-commerce. guy: i would make sure i don't sit -- guess a large -- small thing in a large box? mike: we were talking about my wife is a purchaser of amazon goods and we get a big box that has two small pieces. as time goes on and innovation goes on, change and packaging style goes on you will see smaller shipments arriving at your home. guy: it happens at a daily basis at my house as well. thank you.

coming up, gary gensler telling congress the crypto industry is rife with fraud and abuse. or highlights from his testimony in just a moment. this is bloomberg. ♪ >> it is inconsistent with decades of legal and commissioned regarding conflict of interest including the commission's own.

alix: sec chair gary gensler testifying this hour saying the crypto industry is rife with fraud and abuse. kailey leinz is outside the hearing room. what have we learned so far? kailey: some of this is stuff we have heard repeatedly from chairman gensler including the line about being rife with fraud and abuse and said he couldn't talk about any ongoing litigation processes.

he has been dealt some poor hands in court lately. i spoke with the chair of the committee and he was asked that the sec should be regular in crypto differently and he said some judges are hand picked. and there are some who will say the sec is overreaching doing these things but he is broadly defensive of chairman gensler and his leadership of the agency. it has been divided on partisan lines, democrats are supportive of what gensler is been doing and are in some cases pushing him to do more on things like climate. republicans are much more critical and likely to say he is overreaching and have questions of their own not just in terms of climate disclosures but hedge funds as well. guy: have not seen gensler for a while. is any update on what he is saying? we haven't heard from him in a

very long time. we get a sense of where he is going next? kailey: he is always reluctant to make news in that regard. he has said he cannot discuss ongoing litigation and that is where a lot of the news would be made. there is the question of whether he will change the rulemaking process and some climate disclosures that have received pushback. we have not gotten a ton of new information. he will be appearing in the house financial services at the end of the month and those members are likely to push ardor then what he is getting today. alix: google's trial finally starts today. can you set it up or us? kailey: it starts today and will last for a long time, 10 weeks it is expected to go. this is significant because it is the biggest tech company going to a monopoly trial for the u.s. in 15 years since microsoft back in the late

1990's. this is the first time the department of justice and state attorneys general have pursued this. the central argument is that google operates a monopoly by paying millions of dollars a year to be the default search engine on mobile phones and browsers. google said those agreements are benign and the choice is still there and competition is one click away but this is the fundamental argument. i spoke with senator elizabeth warren about this and asked if they should be broken up. >> this is a company that should be broken up. this is a company that has used multiple tricks to try to make sure that it is the only company that anyone uses for search and that everyone has to use for advertising. kailey: that is the words from the senator but we will see how things play out in this trial that will last for several more weeks. guy: thank you very much indeed.

haley lines joining us from capitol hill. coming -- kailey leinz joins us from the capitol hill. coming up, do you buy america? european luxury surface being dinged up. ♪

>> european stocks drifting, there are some individual stocks that are really interesting. the countdown to the closed starts right now. announcer: the countdown is on in europe. this is bloomberg markets: european close with guy johnson and alix steel. ♪ >> big picture, nothing to see here. european stock