tv Bloomberg Surveillance Bloomberg October 6, 2021 8:00am-9:00am EDT
♪ >> we are cautious in the markets. we have been expecting a downturn. >> the market seems to be buying into the fed's inflation dismissal rhetoric. >> people seem to mean that -- seem to think that transitory means it will only last for a short while. >> there's elements here that we are dealing with stagflation. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. it is an interesting day, a different day than anything we have seen. correlated moves in the market.
i love what bloomberg markets just posted on the terminal. stocks crumble on 1970's inflation fear. that sums it up. jonathan: i hate the word stagflation right now. this is an observation, not a judgment about the future. right now, we are not stagnant in this economy. it is the fear about higher prices hitting demand. that is ultimately the shift between q1 and q4. equities are down 44, down about 1% on the s&p. but that is the fear into year end, the fear through earnings season, too. tom: nat gas rolls over, but hydrocarbons elevated across all of the complex. jonathan: we've gone from close to plus 40% to negative and around six hours. we've had some nice words from russian president vladimir putin, who says gas prices -- tom: can i write the banner, europe will not freeze? jonathan: maybe that is helping
things out, but that turnaround absolutely massive. george sarah bayless was with us yesterday. the natural gas prices seen rising this year is equivalent to oil trading at around $200 per barrel right now. for europe, these prices are a big deal. tom: $200 a barrel, i enter blake that to $8.42 -- i interrelate that to $8.48 a gallon. what is the political ramification you read about in the zeitgeist of higher oil prices? lisa: it only makes negotiations in washington that much more tenuous when they are trying to figure out how to position for the midterm elections. the democrats are going to be in the hot seat if you have oil prices climbing above $100 a barrel heading into the midterm elections. you have to wonder what they are
going to get done, even now. i wonder how much stems from the policy uncertainty and the feeling that nothing will get done, and we are going to bump up against the debt ceiling debate and the limit there. tom: anthony emails and. he says he loves how my bowtie looks on radio. this is the red sox baseball diamond tie. jonathan: that's where you want to go? you want to annoy everyone in new york? at least most people in new york. we have a mets fan with us this morning. lisa: thank you. jonathan: treasury yields haven't seen a massive move. they have been pretty contained in the grand scheme of things. up a basis point or two to 1.541 5%. you are breaking down to 1.1539%. euro-dollar, i think the lowest now since late 2020, so a year plus. tom: if aiko logarithmic on the euro, you got to go back. what does a one dollar handle
mean? jonathan: i think if you've got inflation problem, you don't want a weaker currency. the u.k., and fantastic case study for this. if you central bank needs to hike because it is worried about inflation and it has a high prematurely before they have achieved their goals on output, that's a problem for the currency. we see that in em and sterling the last couple of weeks. tom: let's talk to somebody holistic, focused at your kitchen a boy about what you are doing on asset allocation and the choice of placing capital. brian levitt is with invesco, the global market strategist. have you changed your view in the oddities of september and into october? brian: i never believed all of the government support was going to lead to an inflationary environment. i thought a lot of that money would be saved, and that we would have a good backdrop for markets as we came out of the
recession, and that rates would stay relatively low. all of that has proved to be right. i think what is different now is that the supply chain disruptions are persisting longer than we would've expected. what happens here now is you end up in an environment where policy uncertainty persists. critically, i don't believe we are talking about persisted inflation over the next number of years that leads to a series of fed rate hikes and ends the cycle. in that case, i still want to own risk assets. i still want stocks over bonds. my view is that things get a little more volatile. policy uncertainty creates volatility, but i think investors should take a step back and remember we had just gone 321 trading days without a 5% drawdown. the markets were up 34% over that period. the calls have been right. the question going forward is does policy have to tighten
sooner than expected, and what are the ramifications for markets as a result. jonathan: we are familiar with your call that growth equities make a return, that growth head back towards trend. let's talk about some of these moves in big tech. amazon has done nothing for me all year, down almost 14% off the highs of the year. a lot of people looking at those big tech moves going into earnings season and wondering what to do. when they ask you that question, what do you say? brian: you also want to thick about the faang's. use on netflix breakout yesterday. i would say that in a reflation environment, which we seem to be in, growth stocks tend to not do as well as the more value-oriented parts of the market. my view is to say for long-term investors, do you think we are heading to a new structural high of growth and a new structural high-level of inflation? in my mind, what ends up
happening is this is all a moment of time as we do with massive disruptions. we will work our way through it. growth will ultimately moderate, inflation will ultimately moderate. we will be back in an environment that looks similar to where we were in the middle of the last cycle. in that type of environment, growth stocks should perform very well. the challenge in the near term is with inflation of a reflationary environment. so could growth be volatile in the near-term as some of those valuations come down a bit? sure, but for long-term investors, i still favor growth in what is going to be a persistently slow growth world. lisa: so have you been buying growth last couple of weeks? brian: i have been shifting a little more to the reflation part, putting more the value oriented -- i mean, i was overweight growth, and it has been a good year for growth. i haven't been selling my growth stocks, but allocating more to
the value-oriented parts of the market. it is really about whether investors are trying to get the next days or quarter right, or whether they are trying to get the next multiple years the big question is, is this a moment in time? are we moving to a new hire structural inflation rate, a higher level of growth, or are recently recovering from a disastrous environment with a lot of disruptions along the way , but we will ultimately get back to a more trend level growth? that is my view. lisa: has the inflation grade changed for you, given the fact that we see oil prices rise to the degree they are that challenge the airline stocks, or the fact that we are seeing persistent fears about growth in the face of some of these price pressures? has your reflation trade changed composition? brian: it is more like commodities, financials. you make a very interesting point because i think we are seeing the same thing, which is
ultimately, i think these inflationary pressures moderate. there's also this idea that higher prices ultimately become a solution, so the more we are spending at the pump, the more we are spending for airline flights and these types of things, demand for other items in our basket starts to come down some, and you will start to see less inflationary pressures in other items that we buy. so i think we are saying the same thing. things like commodities and financials can do well in this type of environment, but ultimately these price increases are going to slow down the economy. jonathan: the chair of the economic council of advisors for the president saying with her team that a default would have serious and protracted economic and financial effects. financial markets would lose faith in the u.s. and stocks would fall.
are you taking this seriously yet, october 6? brian: i haven't been about 3:00 a.m. yet. i will let you know when i am about 3:00 a.m. thinking about it. i am not taking it seriously from the perspective of any shifts in my portfolio. i still come back to my idea of churchill's point that americans do the right thing, but only after they have exhausted all other options. we did it in the obama years without single party rule, so it seems to be a game of political chicken right now. we don't want to see the outcome of this. we don't want to go through this exercise of trying to prioritize spending and causing concern about what the risk-free rate means, but ultimately, i expect our politicians to do the right thing, much like they did with the government shutdown, or the looming government shutdown, and we will get through this. jonathan: thank you. appreciate it, sir.
brian is not alone in not staying up late for this one yet. this blog out on the white house website, life after default. tom: these are really competent people. i would note the first mathy paragraph in it is towards social security. for 12 million, it is their sole support. that is really a third rail number for a lot of republicans and a lot of democrats. jonathan: there's going to be some real tension here, and that is not going away. that tension does not exist in financial markets beyond the t-bill curve, and that is the problem for this administration that would like people to take this a lot more seriously. our kids have been conditioned by experience not to -- markets have been conditioned by experience not to. lisa: janet yellen saying this could cause a recession did
absolutely nothing to markets. jonathan: secretary yellen's tone has been pretty consistent over the past couple of months. lisa: but there are people, as you said, that have been conditioned to know that after all of their options have been exhausted, they do the right thing. let's wait. tom: i think it is a culture in europe. the first conversation i ever had with christine lagarde when she was a junior government official in france was exactly on that point. they like to stay up early. are we going to do it? i think we will, but we will do it once and get it done. jonathan: life after default from the white house. that's the blog piece from the council of economic advisers. it is the second day of the bloomberg invest global conference. you can watch that on your terminal and on the bloomberg website. a conversation right now -- coming up, greg jensen of bridgewater. this is bloomberg. ♪
ritika: with the first word news, i'm ritika gupta. president biden will meet with financial and corporate leaders today to discuss a potentially devastating debt default. amongst those attending mojica morgan chase's jamie dimon -- attending, j.p. morgan chase's jamie dimon and citigroup's jane fraser. it is a strategy shift by the white house. president biden's team is trying to broker a deal to scale back his ambitious economic agenda. advisors are weighing liberal policy priorities against moderates' concerns about inflation and tax hikes. in michigan, he called foes of his plan "complicit in america's decline." fed chair jerome powell has game
support that could gain him a second term to lead the central bank. more than half of republicans on the central banking committee are backing him. his most vocal opponent is democratic senator elizabeth warren. saudi aramco is close to claiming the prize of the world's most valuable company from apple. the oil giant has soared. its market value now sits at $2 trillion, not far from apples people and $3 trillion -- from apple's $2.3 trillion. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪ >> we already have inflation above the fed's target. we have a lot of uncertainty about how much slack there is in
the labor market. so i think the risk is they are fighting the last war. the problem isn't inflation too low. it is inflation to high. jonathan: bill dudley, senior advisor to bloomberg economics and former new york fed president. in his latest piece this morning , this fed is going to be late, and when it starts hiking, they will have to go quicker. we are waiting for some data in america, the adp report. here it is. michael mckee an upside surprise. michael: a nice change from adp. markets will probably react nicely to this one. 568,000 jobs in september. that is higher than the 430,000 anticipated by economists surveyed by bloomberg. 63,000 in small businesses, one hundred 15,000 in medium businesses, and large businesses adding 390,000. manufacturing, 49,000. that is one of the biggest
numbers in quite some time for manufacturing from adp. service providing, 466,000. that would encompass the leisure and hospitality range, which they see as 226,000. a report like this would be well received by the markets and probably by the fed. as you remove her, jay powell said if we've got anything that is decent, the fed could go ahead and taper. so with a forecast for 488,000 jobs on friday, 500 some would be a better result. jonathan: not moving off the back of this, i have to say. equity futures down 44 on the s&p, basically where we were going into the print. on nasdaq 100 futures, we are -1.68%. bonds are higher, 1.5432%.
the dollar still stronger. euro-dollar which -- euro-dollar , negative 0.5%. 488,000 is your median estimate for payrolls. the low, a friend of this program, thomas costin in at zero. tom: we will see if we get market reaction. as mike mckee says, a nice surprise on adp. this is a joy. she is what we try to do in america. i'm not going to mince words. she started out challenged, overcame dyslexia, was picking up a phone at a real estate company and said, wait a minute, i can do this. this is the only voice i want to talk to on the insanity of real estate right now. barbara corcoran, you know her from "shark tank."
she joins us now. i need to talk to you about the pricing of housing in america. i just looked up at corcoran group, and i will pay $44,000 on taxes on a piece in brooklyn. how have we done this? how have we priced america out of real estate? barbara: most people are priced out of the market, you are exactly right. the market has been going absolutely bonkers with no end in sight. prices have gone up 18%. i have never seen an increase like that in the last 30 years. no one could believe what is going on. in fact, if you want to buy a house, i don't know how you did on your purchase, but everything is being sold in bidding wars. i mean, people are so uncomfortable, and yet they keep paying the price is, and there is no end in sight. tom: i look at the regression of housing, and we regress back to the mean. you live that at corcoran group.
are we going to do the same thing this time? barbara: i did. it is not the same kind of market. you know what you have? today's market is fueled by individual buyers who want a place to live. they bring to businesses home. they want to raise the kids. when we had that drop off, it was fueled by investors, house flippers, poor mortgages, mortgages that should not been lending money at the time. it was a false market with a false bottom, and it fell. we are not going to have that now. i just hope that prices cool down a bit because so many people are left out of the market. it just seems unfair to have a house you have to feel like you have to be a pro investor to bid up the prices. i've never seen anything like it. lisa: this is for individuals, but it is also for corporations. i wonder how much this dampens their enthusiasm, their
willingness to hire to expand, if fixed costs are going up as quickly as they are. barbara: the fixed costs going up for business, that is not always true. commercial rents are much lower than they were. you were talking about business, i'm assuming, right? lisa: yes. barbara: their fixed costs are actually lower. people are renting less space. people have floorspace in large metropolitan areas, negotiating their way out of the leases. retail prices have come down. no one wants a large retail space anymore. they sell it online. so actually, the cost of doing business has come down, and of course, the main problem with all of business right now is finding the right people. that is the single largest challenge, whether you own a restaurant or shoe shop or a giant corporation. hiring and finding and luring in the right people has been the
biggest challenge. lisa: but we have not seen the increase in wages we would have expected given all the labor market shortages we hear about. it still lags behind the pace of inflation. bill dudley, formerly of the new york said, was saying he things it will accelerate pretty dramatically in the near term. do you see evidence from small business owners that they are willing to pay up that much more dramatically in the coming months that will lead to that kind of wage inflation? barbara: they are not going to have a choice. so far, they have cut back on their staff. they eventually cut on their overhead. they got good of everybody they really didn't want working for them during the pandemic. all of these companies slimmed down and got their house in order. whether or not they are willing to pay a higher wage remains to be seen, but so far they are not. people are holding onto their profits and are very reluctant to let any of that money out. i don't want to use the word selfish, but i would say a
little greed has set in. they are going to have to give something up time for sure. tom: you and at&t are out there talking to real people, webinars and things like that, talking to people about small businesses. let me raise my hand in the back room of the zoom call. could you do now what you did then? barbara: yes i could come up because the pandemic has proven that. that is what the purpose of the webinar actually is. we are trying to give people the tools they need to reinvent themselves with very little money in their hand. today's market accommodates that. everybody is rewriting their business plan, redoing the way they deliver their products to customers, reinventing how they could attract customers in. that is why at&t decided to do
the webinar series because a lot of people don't know how to do that. i know how to do it. tom: i'm looking for four bedrooms, upper east side. see what you can do this afternoon. thank you so much. [laughter] barbara: i'll tell you what, i will give you a sublease on my place. tom: thank you so much, barbara corcoran. i'll tell you, this is just so important, the story of her coming out of new jersey, really a difficult story, and just getting it done. we forget what she invented. down in soho where the fancy people live, barbara corcoran owns soho. jonathan: not biting. have you seen the broker's fees in this city? it is getting real. tom: why did you step in with ms. corcoran and bring that up? jonathan: because it is personal. always best to put your personal issue aside when you have a conversation, unlike you at the
end there. tom: when we move the show to london, you are going to help me and lisa figure out real estate. jonathan: i will help you both find a place and you won't have to pay the broker's fees to rent a property. it's nuts. lisa: you will charge us a brokers fee yourself. jonathan: come out to lunch with me. much cheaper. we are down on most 1% on the s&p. on the nasdaq, down 1.65%. we turned around just a little bit. yields off the highs at 1.53 45%. the turnaround of the day, if the team in the control room can rally for this one, i would appreciate it. that bring up not gas prices in the u.k., now -5%. come on. we were positive 39 percentage points earlier on today. that is an unreal turnaround in this market. tom: did you see my cup, my tang? it's red.
i'm having a red cup for the red sox, and for the cardinals tonight. jonathan: i am pleased you are focus. lisa: i want to go back to something, bill dudley and barbara corcoran was talking about how companies are going to have to pay up. want to rehash this labor market report, the fact that it is better-than-expected. i thought that was interesting and it really highlighted some of the pressures there. jonathan: lisa, thank you. tom: seriously, i want to talk about this. we have ng1 natural gas. what is the natural gas concept in europe? jonathan: fn 1. tom: is that something everybody follows? jonathan: not so much, but now the price has been exploding. just unreal. coming up, subadra rajappa of socgen. this show is falling apart. tom: but in a good way. [laughter] jonathan: she's going to join us
jonathan: live from new york city, good morning. tom keene, lisa abramowicz, jonathan ferro. we are down .8%. yields higher by a basis point to 1.5345, up a single basis point. in the fx market, dollar strength, euro weakness. if we can rally in get to natural gas prices again, the turnaround in europe has been remarkable. we have gone from positive 38% to negative. if europe had a central bank, the government or the chairman would be vladimir putin. the mere prudent saying russia
is ready to help stabilize energy markets -- vladimir putin saying russia is ready to help stabilize energy markets. tom: doug kass, and we always protect the copyright of our guests, doug kass has been important guest. i just got a note. this is about china is the red swan. that is an overarching theme. i would give you credit. you've been out in front of this before me as china being the red swan. jonathan: lisa has been clear how this has been building through the year, not just the last few months. lisa: i wonder the idea that the kremlin will come out in support of the natural gas market, what is their incentive? what they want in return given seems to be taken as a real thing by the market. jonathan: stagflation. this conversation is not going away. tom: it is not and it folds actual street strategy whether
it is steve major at hsbc -- subadra rajappa joins us with socgen. it is an interesting move. let's start with what has not happened. why are yields not moving like net gas? subadra: because of the fact that we are a big market and we look at fundamentals and bond yields have been slow to react to what is happening on the commodity complex because it is not that big of an issue. i think the moves in natural gas are speculative. i'm not sure there should be a reaction in the bond market. broadly speaking, i think higher oil prices and fears of inflation have been driving yields higher. i think that trend will stay for the remainder of the year. tom: lisa abramowicz has
emphasized the paper in the insatiable demand. if i like yields at 1.35, price down, yields up, i will little -- i will really like it at 1.55. is there huge thirst to buy the dip in bonds? subadra: what you will see from investors is some level of caution given that you will see a sharp move from around 1.30 prior to the fomc meeting to around 1.55 and momentum seems to be towards higher yields given headlines. what you will see over the next weeks is more cautious approach in the bond market. you will not see dip buyers in right away. they will need to see 10-year gilts stabilize before they come in and start buying the market. in the near term they probably stay on the sidelines, especially heading into payrolls this weekend. beyond that we stabilize into a new range, then you see
investors coming in. jonathan: many legends of the investment world are worried. there's a difference between big an economist and looking at stagflation and saying the stag does not work. growth is expected have a four handle through next year. that is not stagflation. market participants are saying growth decelerating and inflation expectations still elevated and maybe they might accelerate into a new year. i want to understand how a pot market behaves in that environment, decelerating growth and persistent higher inflation. what does that look like? subadra: inflation expectations should rise modestly given where inflation expectations are in the u.k. and europe. you are seeing global inflation expectations rise meaningfully. we did a chart comparing inflation expectations last week. what you notice is the u.s. 10 year breakevens have been very
much in a range and until yesterday they have been tested to break above 240. i think if inflation risks persist you will see room for breakevens to continue to rise. broadly speaking, the fundamental picture is supportive. growth is strong. we are seeing revisions to growth in the third quarter but that is pushing cap growth -- that is pushing out growth into the upcoming quarters. it is not growth we are using, it is getting postponed. there is no to rail meant. in that context -- there is no derailment. jonathan: it is the classic em llama. -- it is the classic em dilemma. often they hike. i'm trying to understand what dm central banks will do.
will they have the patient's to sit this one through? subadra: i think they will. like vice chair richard clarida said they want to see what the inflation prints are up to the end of the year. there is a persistence of inflation. they will not rush into guiding the markets with hiking. the announcement will come in november regardless of what happens to the employment report on friday. beyond that they will need to see consistent pressure, supply chain pressure, wage pressure before they start to think about hiking. what they are doing is setting up for the ability to raise rates and the second half of next year by finishing the tapering by the middle of next year. lisa: they will be tapering bonds and i want to go back to
the stagflation debate. how high can yields get if we experience an environment like that, not even this year but next year as the bond purchases start to wear off and we started to see a more normalized economy with the supply chain disruption still in full force? subadra: the tapering of asset purchases on margin should help push yields higher. our forecast, we think the 10 year yield gets to 2.25 by the third quarter of next year. that is the timeframe we are looking at. the very gradual rise in yields. i think of last couple of weeks the market has meaningfully priced in a much faster pace of rate hikes. that is putting pressure in the belly of the curve. right now the market seems sufficiently priced for the next three years, up to 2024. we need more data for the market to be able to pricing a much faster pace of hikes we are on.
i think it will be a gradually pricing higher as we get data over the upcoming quarters. lisa: how much potential is there for policy risk due to the composition of the federal reserve at a time when it is increasingly politicized to will be the next fed chair? subadra: i think there is some policy risk. i think chairman powell gets another extension in his term. for the most part as the composition changes, the composition might turn more dovish. more caution, more accommodation . in the big scheme of things, the fed is an independent body they will look at fundamentals before they make any major changes in their policy. i am not necessarily concerned about any change in the composition. jonathan: thank you. subadra rajappa of socgen.
that password is going nowhere. -- that s-word is going nowhere. tom: what i find start, taking a number of good thinkers, jay pelosky saying we are on the edge of a pacific rim in asia. james sweeney of credit suisse. doug kass articulating what stan truck and miller calls the red swan. i think it is important these distinctions we are debating. we are going through this and making jokes about tang and manchester united. today play last night? jonathan: i am not sure they did. tom: this is serious stuff and there is raging debates. jonathan: one thing we have not discussed much about. we touched on it. we need to build on that.
who is going to be leading this federal reserve through the next several years? lisa: how much does it matter? subadra rajappa saying if we get another one that fed chair will be more dovish. remember when we were getting the potential for the fed to be more dovish and it led to long rates going higher? what happened to that logic? jonathan: do you think there's a chance it becomes increasingly politicized? lisa: people are saying a bigger risk to the market is the fed, versus even the debt ceiling debate, which is what president biden wants to focus on. jonathan: mario draghi saying eu joint gas prices might have wide support. this is the conversation in your. i would catch up with maria tadeo later. tom: clearly this is natural gas and other deliberative's -- other derivatives. new jersey gas is $2.33 a
gallon. the equivalent in italy is $7.36. look at this line from the french leader. jonathan: we have to build energy capacity to be independent. how long will that take? tom: i think charles de gaulle said that. jonathan: that is ridiculous. they can start. how long will it take? there is a broader conversation. tom: afterthought is a study in world history. jonathan: i am with you. with chancellor merkel stepping away, isn't that the legacy? germany increasingly dependent on toast of things, russia and china. not a great economic legacy to leave behind. tom: a trip to oslo to see if norway can save the day. jonathan: what is it with you and road trips? tom: i want to go on the road. jonathan: where you want to go?
i will go to the other studio and catch up with seema shah. tom: we go below 59th street. jonathan: i am all the time. it is you i cannot get to come with me. this is bloomberg. ritika: with the first word news, i'm ritika gupta. energy prices in europe have extended their rally. the regionwide supply crunch showed no signs of easing. that prompted the european union to promise redaction. natural gas leaders have jumped 60% in two days. dutch prime minister said -- >> the issue with gas prices has a limited sense to do with climate change policies. it has to do with the situation on gas and energy markets. that is not true. i think he is overstating the issue of the energy position.
ritika: the crisis has divided member nations ever whether the eu should intervene. brinksmanship on capitol hill is bringing the u.s. closer to her catastrophic default. democrats and republicans must decide -- senate republicans plan to block another democratic effort to raise the debt limit. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am ritika gupta. this is bloomberg. ♪
building our capabilities in digital security. at the time of covid we became relevant and critical for all of the world's leading companies. tom: julie suite with accenture -- julie sweet with accenture with david rubenstein peer-to-peer tonight at 9:00 p.m.. a different interview this time. for the first time this pandemic we welcome david rubenstein into our studios. thank you for joining us. took you three days to get into the building? david: it is more complicated but it is worth it. mike is doing a good job to make it not comfortable but process driven. maybe that will be the future for business. julie sweet has to do with this at accenture. tell us how the columbia log glad -- law grad is different than what we see. david: accenture is a publicly
traded company. more than $200 billion in market cap. one of the largest companies in the world run by a woman. she is trained as a lawyer and not as a consultant. they are the biggest consulting firm in the world. they have done a better job at building their presence around the world. there are now 624,000 employees. tom: what i find interesting, and she is really pushing the needle on this and is an example to other corporations, is the rate of debate of work from home. how to the best and brightest work from home versus working from the carlisle office? david: it turns out during covid people who have technology skills can work from home. business is announcing we want to get our employees back. during covid, accenture did a great job of working remotely with clients and it worked out so well they had to at 100,000
employees during the covid time. lisa: one of the reasons i found it so fascinating that you of all people interviewed julie sweet, she has a lot agree, she is a law firm partner. that is how she came into this company. you also have a law degree. what is the intersection you see as increasingly relevant going forward of having a law degree in business in the changing world we are in now? david: she was a partner when i was a summer associate. she was much more senior than i ever was at that firm but she showed she was really analytical. a law degree helps you reason well. a lot of ceos have law degrees. a law degree gives you a certain grounding and a way of thinking logically about things and it helps you solve problems. i think she thinks her law degree has helped her run accenture. she runs it without any headquarters. accenture has no headquarters.
she is based in washington but it is one of the few companies that does not have a corporate headquarters. jonathan: she is saying -- lisa: she is saying you do not have a seat in the office. others are saying if you do not get back to the office you're making a mistake if you're a junior employee. where you way in? david: most employers would employ to have -- would prefer to have their employees in the office a few days a week. wall street says come back at least a couple of days a week. j.p. morgan and goldman sachs say others are wanting their employees back in the office but not necessarily five days a week. private equity firms are largely the same. we would like to have people come back when it is safe to come back. in my not be people work five days a week the same way they did before. covid has change the way people will work for some time. tom: what does it do for business travel?
the airlines are talking business class to premium. what does it actually do to business travel? david: business travel is down on the airlines. leisure travel is beginning to come back better than business travel. business people have realized you can do things remotely and certainly by zoom or zoom equivalent. tom: you mean i do not need to go to davos? david: we have a large gathering of people it is probably helpful to get together occasionally. tom: what about accenture and the others? david: accenture is dealing with clients remotely. they can deal with them in person. once you have a relationship you can work on a project remotely. if not ever see your clients there is a downside. most businesses realize you will have an interpersonal connection if your clients feel like people are paying attention. lisa: this is a crucial
conversation on the eve of of the jobs report we get on friday at a time when a lot of companies are complaining about not being able to find workers to higher, accenture hired 100,000 of them. how willing are executives to pay up for employees at this moment given what we seem to be seeing, which is friction and shortages? tom: as we -- david: companies in the technology world and financial world have done extremely well. they are trying to pay up. the biggest problem is entry-level jobs, the kind of people working at private equity firms or consulting firms are not as difficult to get, though they are harder to get than they used to be. getting people to work at mcdonald's or the equivalent, a lot of those people are not willing to work at minimum wage or slightly above minimum wage. that is where the real problem is. tom: i to lead with your public service to the nation with james earl carter.
it is of safe lincoln was alive in 1906, jimmy carter's 97th birthday. with all of the criticisms of the dismal 1970's, what did we most get wrong about president carter? david: he tried to do so many things, and the fact that he did not get all of them done made people think he did not -- he was not as successful as he was. today for president gets one major build on in a year that is a big thing. carter got a lot done but was trying to get even more done. in hindsight, some of the issues he attacked were ahead of his time. in the end i want to wish him a happy 97th birthday. i think his post-presidency has been a real model for all presidents of the united states. tom: thank you so much. david- david rubenstein. julie sweet is in front trying to figure out modern technology.
i see it is little bit c almer then our 6:00 a.m. asteria. lisa: 10-year yields are a bit lower, just giving you a sense of how much uncertainty is there and how much of a positive tone -- less negative tone we are seeing has to do with this. the idea their support under potential inflation. tom: adp data coming up better-than-expected. we have seen some adjustments going into friday and give you the ramifications. i would leave you with the idea of where gdp -- atlanta gdp has fallen under 2%. a bit of a shock off of the boom economy and heated debates about where we are from here. we heard earlier in the show -- david sowerby raved about the modern gm.
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>> everything you need to get set for the start of u.s. trading. this is "bloomberg: the open" with jonathan ferro. ♪ jonathan: we begin with the big issue. gas prices fueling inflation jitters. >> inflation is more persistent. >> going from transitory to being here for a while. >> oil and natural gas prices. >> gas prices pushing extremely high. >> gas prices skyrocketing. >> inflation is hot. >> you will see inflation rise. >> inflation is not going down. >> we have persisted inflation. >> this is