Bloomberg Surveillance TV: September 4th, 2026

**SPEAKER_1** (0:02)
Bloomberg Audio Studios. Podcasts, radio, news.

**Jonathan Ferro** (0:11)
This is the Bloomberg Surveillance podcast. I'm Jonathan Ferro, along with Lisa Abramowitz and Annmarie Hordern. Join us each day for insight from the best in markets, economics, and geopolitics. From our global headquarters in New York City, we are live on Bloomberg Television weekday mornings from six to nine AM Eastern.
Subscribe to the podcast on Apple, Spotify, or anywhere else you listen. And as always, on the Bloomberg Terminal and the Bloomberg Business app. We'll begin this out with stock steadiest investors look to close out the week higher. Christopher Verrone of Baird Strategas, remaining constructive, writing, There's some unsettled price action under the hood of the market. Bullishness is not over the top given the market trading six month performance. Chris joins us now for more. Chris, good morning. Good to see you.

**Christopher Verrone** (0:51)
Great to be here, Jon.

**Jonathan Ferro** (0:52)
That unsettled movement help us identify. What are you pointing to?

**Christopher Verrone** (0:55)
Yeah, I think what you've seen basically since the middle part of last month is this little momentum bleed under the surface. You've seen 20 day lows actually start to expand. I think we got to about 30% of the index making a one month low this week. So what we're trying to decipher is this just the typical seasonal pre midterm softness here or is there actually something cyclically weak starting to streak through this market? I think that's the big question as we set up not just to payrolls today and CPI next week and the Fed in two weeks, it's have we started to see some cyclical deterioration where you would not be hiking into a strong economy, you'd be hiking into a weaker one. I think that's the big question here.

**Jonathan Ferro** (1:34)
Where are you seeing that in brunt, the market and to the data?

**Christopher Verrone** (1:37)
Well, I think what's interesting here is you kind of came out of Jackson Hole last week, which I would describe as a more hawkish speech, and yet you had bond yields go up and cyclical stocks kind of taken on the chain. So you saw it with industrials.
Now, you could say some of that's tied to this backlash on the AI buildout here, but I think on balance there has been some modest deterioration to the cyclical corners of the market. The good news is we're not seeing it in credit here at all. Double B spreads made new cycle tights this week. It's a big difference from late 21 into 22 when I think it was kind of pretty clear the Fed was behind the curve. You were seeing credit conditions really deteriorate. I think the two-year yield was 200 basis points above the Fed fund rate at the time. So you're not seeing that type of message here. But I do think we should just kind of have the antenna up a little bit that there's been some cyclical deterioration to groups like industrials and discretionary.

**SPEAKER_1** (2:29)
Is it anything we would see in the jobs report or is the jobs report essentially a side note?

**Christopher Verrone** (2:32)
You know, what's interesting, I think there's this tendency to dismiss whatever the print is today, you know, estimates 55,000 jobs. I wouldn't dismiss it.
If we print a negative print here, the three-month average on payrolls will be the lowest ever if we got a hike, right? So the precedent for hiking with negative three-month average payrolls, you've never seen it before. So I still think the bar is probably higher for a hike in two weeks. I do think today's print matters. I think maybe one of the ironies is when we think about PC or CPI, we're spending a lot of time on the right side of the decimal when we were supposed to spend very little time on the right side of the decimal. So there's a lot of emphasis on what is PCE or what is CPI here when I'm not sure we want to be making monetary policy on one print.

**SPEAKER_1** (3:25)
I will say that it depends on which Kevin Orrish you're talking about. Because one side was the left side of the decimal point, and the other day it was the right side of the decimal point. I just wonder if the Fed does remain on hold, if it's going to do so for the wrong reason for stocks. Essentially, if it's going to do so because of a weakening or they don't want to hike into disinflation in Chris Waller's Perlons, that's bad for stocks, isn't it? Where everyone's not pricing in anything even close to a slowdown?

**Christopher Verrone** (3:50)