tv Bloomberg Surveillance Bloomberg October 14, 2021 8:00am-9:00am EDT
>> it's not really about whether banks beat or miss. it is more about what is driving the beat or miss. >> i think we will find out companies still see a lot of topline growth. >> as covid problems fade away, i think that is going to be the real catalyst to bring every thing back to normal. >> earnings season is going to give us a good clue where we are going on some of these supply issues. >> it is either inflation or growth, and it looks like we are having a little bit of both. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz.
tom: good morning, everyone. "bloomberg surveillance," from washington, from new york, with citigroup earnings. it is a bank that separate routes transformation, strategic refresh, and culture and talent. of all the banks, citigroup is different. jonathan: we are finding out that in the third quarter on wall street, things were ok. the earnings are out from citi. the big beat, the big lift year-over-year, has come from the equity business for bank of america jp morgan, morgan stanley. citi is no different. investment backing revenue, $1.92 billion. the estimate, $1.54 billion. the story for the equity, the stock, we are up by 1.34%. we already had a full picture of what was happening on wall street coming into these numbers.
citi is up. the numbers are decent. sonali basak is still with us. your early read on these figures? sonali: huge beat on the equities business, and he did beat on fixed income as well. the investment banking division also doing well. citigroup up there in terms of the top underwriters in the world in equity underwriting. i do also have to point out that when it comes to global consumer banking, their revenue has dipped quite a bit, about 14%. lower card balances was part of that. when you look at the international business, a lot of weakness in asia as well. there will be some questions about that, but the core business is doing quite well. citigroup has a much more global footprint than some of its peers , say bank of america, so how is it doing around the world also be of interest as we parse deeper through those numbers. lisa: the stock continues to go up in premarket trading, now almost 1.8%. we have seen pretty dramatic
underperformance of citigroup versus the other banks coming into this earnings report. why has the bar been so much higher for citigroup to seem valuable to traders? sonali: they have a lot of regulatory issues. we saw the same thing with wells fargo. at some point, wall street turned around and said they are cheap, let's get in there. jane fraser is about six months through the job. once there's more time, if they start to make progress on those regulatory issues, you may start to see the story start to turn around. plus, they just started embarking on a lot of these changes when it comes to their global wealth and consumer business, so seeing that take shape is what investors are waiting for. mike mayo even doing some of the parts. jonathan: thank you for weighing in on this. in this conversation -- i think this conversation is going to continue for a long time. citigroup up today in the premarket. for the stock, $70.88 -- $70 28
cents. this stock has severely underperformed. tom: i must admit, i am still scarred by the 10 for one reverse split. i move the decimal psychologically to $7.08 per share after the shenanigans of 2008-2009. what is stunning to me, you look at a given powerpoint presentation and do the sesame street thing, which one does not look like the other. citigroup right now doesn't look but the others. jonathan: mr. corbin had a tough job. ms. fraser has one, too. tom: i want to go to the powerpoint and make clear what sticks out to me is a challenge to narrow the return gap. what does that mean in english? >> it means first of all,
citigroup shares are still trading lowest in terms of price to net tangible book value. so the market is looking for catalysts, not necessarily just normal operations. but what do you do with disparate businesses around the world, particularly in latin america and southeast asia? they did a better that two quarters ago -- a bit of that two quarters ago, but mike mayo is looking for some bigger catalyst, which is really, how do you streamline this bank? jane fraser's management consultant background, no different than james gorman, so the wheels are spinning, but i think it may have to wait for investor day lay in the year. it is not going to happen today on the earnings call. but citi again is a laggard to the other banks, which have a much bigger focus in north america. that is the big difference. lisa: i want to dig a little bit
into this 40% increase year-over-year in equities trading revenue, far beating estimates when it comes in at $1.23 billion versus the $909 billion analysts were expecting. what do you make of this at a time when investors -- the $909 million analysts were expect and. what do you make of this at a time when investors are trying to show that they can driver revenue going forward? kenneth: it was a week quarter last year. citi has been hiring crazy into this year in equity trading, so i think that speaks to the 40%. in terms of regulations, we are fine. it is the risk measure that banks are taking that was telegraphed with the june fed stress tests. they came through in flying colors, so i am not too concerned about equity trading.
but the key here is what moves these stocks is recurring revenue and return of capital, so you don't want to take outsized risk into the level three assets of derivatives because you have to put more capital to it. morgan stanley understands this. most of the banks understand this. so it is calibrated. it is not trying to hit it out of the park like we saw a right before the financial crisis. tom: on behalf of all of us, the team at "surveillance," thank you so much for your time from cfra this morning. it is really world-class analysis on these important and very large banks. right now, with parchment out of math and physics of smith college in new england, nadia lo 90 lavelle -- nadia lovell is with us.
we would be surprised at how dampened the disappointment is? nadia: yes, we think so. we think companies are going to put up a solid third quarter. [indiscernible] -- obviously is going to meaningfully moderate versus what we saw in the second quarter. we still think companies are going to beat. we are looking for the third quarter, 30% year-over-year eps growth. of course, shortages both on the labor side and the supply side does remain a risk to earnings, but this has been well telegraphed. we had announcements concentrated in industrial, consumer, as well as some parts of -- intact. tom: we have been talking about the greater delta in the banking world. it's go greek letters. where is the sector that is going to give me alpha out one year? nadia: i think i would look
closely to energy. we continue to like energy from the year-to-date performers. we think there is still so much more room to go. i think they are showing that they are better stewards of capital, so they are more disciplined in their investment. they are starting to return more cash to shareholders. when you look at energy, it has the highest free cash flow yield , the highest dividend yield, the most earnings momentum right now, and we just don't think that the sector's pricing and where oil prices are right now. we think the sector is pricing in something in the high 50's range, much below the current spot. that is an area i would look to. jonathan: really get to catch up. we will have another segment with you. just a final question on this one. how do you get to 5000 year end next year if you are concentrated in energy,
financial? how do you get there? nadia: financials, energy, consumer discretionary, and health care. we do think that health care will start to perform well, and that is how we are getting there. we are also looking at very healthy earnings growth, 45% this year, 10% next year. that gets you to 5000 at the end of next year. jonathan: some big numbers coming out of ubs. tom: what is interesting here, and i think everybody here's how i am a little flustered rated -- a little frustrated by the gloom, it is where there will be gloom. i take the point there's going to be some ugly margin issues, but will it be sort of ugly or big ugly? certainly we are hearing from miss lovell that it will not be as ugly as ugly can be. jonathan: nadia joining us for another segment from ubs, with a 5000 target for year end next year.
your equity market right now, up 41 on s&p 500 futures, advancing by almost 1%. this equity market is looking good right now. yields in a basis point on tends , 1.5264%. lisa: one of the most optimistic notes we have heard so far is consumer lending. western to see signs of it. the idea that credit card lending is starting to pick up again. the consumer is flush with cash, but they still want to borrow because they want to spend so much, despite supply chain disruptions, despite all of the concerns people have. jonathan: we got to have a conversation about one of those concerns, a clinic on inflation with adam posen, the president of the peterson institute. we will do that in about 20 minutes. the last hour of the show is going to be a good one. futures up about 1% on the s&p 500. tom keene, lisa abramowicz, and jonathan ferro. this is bloomberg. ♪ leigh-ann: with the first word
news, i'm leigh-ann gerrans. last month, federal reserve officials agreed they could start removing emergency support for the economy in mid-november or december. minutes from the meeting showed there was increasing concern over inflation. most participants thought inflation risks were weighted to the upside. they also discussed whether labor supply would oz back to 2019 levels. in china, factory inflation grew at the fastest rate last month in almost 26 years. the producer price index rose 10.7% from a year earlier. other commodity costs soared on inflation pressure as local businesses start passing of higher costs to customers. according to the international energy agency, shortages of natural gas in europe and asia are boosting demand for crude. the iea says that could add
about 500,000 barrels a day to oil use over the coming six months. mixed results from domino's in the third quarter. the pizza chain reported revenues that missed estimates. sales at domestic stores fell almost 2%, while international sales rose almost 9%. meanwhile, domino's profits were better-than-expected. 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 leigh-ann gerrans. this is bloomberg. ♪
>> the market is telling the fed two things. one, get going with tapering. we can dicker it -- we can take it. two, you will not be able to cleanly separate tapering from rate hikes. look at the ppi in china. this is a very hot inflation environment, and the longer the central banks wait, the greater the risks. jonathan: the beauty with mohamed sometimes, he speaks in simple terms, but it captures the moment perfectly. this is the moment we are in. the bond market is responding at the front end of the curve over the last several days. that was mohamed el-erian. much more on that conversation throughout the day on bloomberg tv and radio. your equity market up 40, advancing 0.9%. up, up, up and away. in the bond market, yields unchanged. the call from ubs, 5000 year end
2022. tom: the bears really having trouble getting around that. it is a bit of an extrapolation out. i would mention off of el e rian's world-class game three, he would suggest this is a world of narratives of key decisions. there's too many independent and dependent parts here as well. the mystery right now in synthesizing economics into where we are in finance and investment to me is record low. jonathan: the dominant narrative for 2022 is up for grabs. we are at one of those weird inflection points where the incoming data is starting to increasingly challenge the popular narrative, and that popular narrative, that word begins with a t. tom: ubs has done the work for some real caution. they have made a house shift to optimism. nadia lovell continues with us, their senior equity
strategist. i want to talk about the surprise we see in other sectors as well, and that is the idea of the issuance of new debt, still with low rates, still with low real rates, that moves right over to use of cash. we get use of cash for shareholder buybacks. do we underestimate that trend? nadia: we do underestimate the power of shareholder buybacks. we have seen a pickup in buyback announcements this year. actually, buyback announcements are on pace to be near record level, as we saw after the corporate tax reform relief. it has added about 200 basis points to eps growth, and that could be a real tailwind. tom: madame lagarde spoke today in washington, the european central bank president, of the second round effect.
what is the second round effect for corporate officers right now adapting to the economic cards they have been given? nadia: i think that corporations have to continue to manage the expense side. we saw some of that coming through the banks this morning and yesterday in terms of concerned around a pickup in interest rates -- excuse me, and expenses. we also have to watch from a wage growth standpoint, some thing we are closely watching, because we know a lot of people are saying out of the job market for potentially better wages. lisa: it comes in tandem with pricing and rate hikes sooner rather than later. right now, the expectation is for at least one rate hike next year, and potentially two or more in 2023. how much does that fly in the face of this 5000 s&p call of yours by the end of next year? nadia: we are looking for rate
hikes to begin in early 2023. of course, a lot of this is going to be data-dependent. obviously everyone is watching inflation, watching the recovery in the job market, and watching for a potential reaction in in economic growth. we don't think that the fed will move preemptively. we think the fed will be more cautious. obviously we will get tapering of the asset purchase program later this year, but we are looking for rate hikes in 2023. even if we get one rate hike in 2022, we don't think that derails the equity market story. lisa: what is the breaking point here? nadia: if you start to see two or three rate hikes, that will be a moment for the market to take pause. people will become concerned that the fed might be moving to aggressively. as we know, historically, outside of the most recent recession, most recessions have been caused by a fed mistake, so
that will give us some pause to think about a potential policy error here. tom: will we see combinations, transactions that are simply about the dreaded word synergy? it has been sort of quiet this year, i would suggest. as we come out of this pandemic, is everybody going to get the urge to merge? nadia: i think you could see a potential pickup in, day activity. i think there's a lot going on in washington around corporate tax reform. what does that really look like? hopefully we will get more details in the next month or so, and i think that will better position companies to look to m&a in 2022. companies are flushed with cash. valuations have moved up, as well as company share prices, so companies might use that. jonathan: love catching up with you. today is no different. good to hear from you. ubs's nadia lovell on this
market. we are really trying to paint the excitations on wall street at the moment, and this is from ubs. they have a june target for next year, a december target of next year. the s&p 500 closed yesterday at 4363. the equity market for them is going higher. they like the cyclicals. they have performed well recently. they expect it to continue. tom: check the calendar. this is no different than citigroup modeling out free cash flow at apple into 2024. this is where we begin to see not so much an extrapolation, but really thinking about the backdrop of economics that we cover every day and what it means. so far, what i am seeing are very constructive use forward through 2022 and into the following year. jonathan: the ubs and rbc they be on one side. on the other side, morgan stanley, bank of america, far
less constructive. lisa: they are threading a needle, all of these analysts. we heard that from nadia, the idea that this leads into great earnings, but not necessarily a more hawkish fed. that is a key question because right now in rates futures, you can see 1.5 rate hikes priced in by the end of next year. basically, if we get to two, that could disrupt the projection for the s&p 500 target. this is the dilemma. how do you get that optimism, that strength, without a hawkish fed? jonathan: you need a smart voice, and that smart voice today is adam posen of the peterson institute. what a timely conversation coming up on this inflation dynamic. tom: i think i agree with that strongly. this is a year at imf-world bank, and we can talk about all going on at these meetings, but overall is the inflation debate. i think it is a good idea to stay on that with adam posen. jonathan: we are going to do
jonathan: buried through the morning because of the bank earnings. we are just around the corner. going into equity futures, going up 19%. the s&p 500 is looking good. ppi numbers are out, and we are breaking things down. >> the producer price index is out, and it is a little bit better than forecasted. we were expecting an increase on a month over month basis.
we get a 5/10 increase. that means the over test year-over-year increase rises to eight point 6%. it was expected to be a .7%. it is a significant increase but not what was expected. the core is up .2%. that it's a lot less than a half percent that it was respected. the core rate is down five point 9% on a year-over-year basis. from 6.5%. it looks like we are seeing some significant declines in the core side. the final demand for goods is up 1.3%. that is the largest increase in this since may. in september, 40% of the advance, a 2% jump energy. energy is starting to feed its way into the overall economy. for services, everyone watches because we are and service
economy. it is up 2.6%. the increase was out for the most part because of food and fuel. the same kind of story for services as we see for goods. it looks like the ppi is the sort of thing that is going to be like a cpi yesterday, a chance to debate both sides of the issue. jobless claims -- here is good news of the day. 293,000 -- that is a drop from 326,000, which was revised a bit higher to 329,000. a significant drop below 300,000. that is some good news on the jobless claims front. this is what we were expecting. a brief bump. >> this is what we wanted to see. >> this is what we thought we would see in september. it benefits were cut off, and
people were, in theory, going back to work. >> thank you. below 300 k. it is what we want to see. tom: as it was said, it is a better outcome. we saw that with unemployment. the un-employment rate. this is a tradition of our imf and world bank meetings. adam pozen joins us, the president of the peterson is just stupid -- institute. in a classic moment, a number of years ago, with among others, a guy named bernanke on inflation, targeting. we will get to that in a moment, but john, i understand how sensitive and woke adam pozen's. -- pozen is. jonathan: his last 24 hours, help us out with this one. i would love your reaction. we have a generation of central bankers who would define
themselves by their woke nests. they can -- they defendant -- they defined himself by how socially concern they are. >> i do not think that is fair. if you want to worry about woke, yes, there are universities you can worry about, there are various individuals. the central bank is not stomping on alternative voices, it is not saying you can worry about inflation because we are too worried about unemployment. there is open debate. i just hosted the federal reserve bank of atlanta president at the peterson institute earlier this week. he gave a speech that sounded relatively hawkish. he talked about inflation expectations, and at the end i asked about inequality, and he gave the same answer most members give -- it is entirely right for the federal reserve to do research and draw attention to the inequities in society when monetary policy has to be focused on the aggregate output.
aggregate inflation. jonathan: do they have the tools to address it or not? it sounds like the president thinks they do not. but some of the fed believe they do and want to do something about it. >> someone on the fed care about these things deeply. but if you think of the various fed presidents, there is a lot they can do in their districts. there is the issue of bank supervision, redlining and housing, where the fed plays a huge role and ignoring it and then addressing it. there are issues of education, documenting and putting out there what the disparities are. i do not see anyone on the fed committee who thinks that you are going to use monetary policy to solve any quality problems. the point is, you can worry about inflation, and you can argue about whether or not inflation is getting out of hand without assuming some sort of softheaded plan. tom: you have the joy of working
with olivia munch. talk about the modern inflation dynamics we are in. he made worldwide headlines talking about 4% inflation. we are there, but this is very different, isn't it? >> yes and no, tom. olivier made headlines calling for a 4% inflation target because the 2% inflation target that bernanke had pushed did not take into account the lower bound of not having effect. tom: we committed to the experiment that he talked about. >> no. congress is not set, inflation is up, let's grab that and say, now that we are here, let's raise the target. myself, the peterson institute, we have been saying three plus. now is the time. tom: do we need a gene change right now to rephrase our
generational belief in 2% inflation and say, hey, this is the new normal? >> i personally think yes. it is not a regime change, is a resetting of the target. one of the problems we did not proceed when we put in place the targets was that we assumed that it was in the books we wrote. we assumed that we would reset the target as economic targets and circumstances change in -- change. once you set it, you are scared to move it. i'm glad we're talking about this right now. we should be opportunistically relating. we are now about 3%, let's reenter there. lisa: what do you say to people who argue slug inflation. prices will come back down naturally. why do you say that is not the case. that we are in a regime change,
what date already pointing to? >> i am saying that we are not yet in a redeemed change. that would be a fundamental restructuring shift, or upping the target. what i do think is happening is that we have so many accumulated weights from these generations of central banking who are hardly will. they paid too little attention to unemployment. you see the 10 year bond no matter what physical inflation happens. inflation expectations do not go up. you see it in the euro area. it is a two way back. there is some variability in inflation expectations,. >> what you're saying is so important. you think the weight they should include -- communicate this is to say this we want to see. is that right? >> yes. we are fortunate enough to have a bit more headroom from the zero lower bound. we are fortunate enough to have a little more inflation space that economic adjustments to the
labor market need to be done. there was a great paper at jackson hole this summer talking about how you get a better labor market adjustment we have loose policy, which is what i said back in 1998 about japan. you should be opportunistically re-fleeting the target and consolidating. if the 10-year is up a little bit, the curve steepen's, and that is a win for the economy. that is a win for the fed. lisa: but the bills are getting bigger. how much is this a concern? what is the threshold for the 10 year treasury yield that the united states economy can tolerate given the deficit? >> the tenure yield does not have a cycle threshold. i am sorry to be pedantic about this. what counts is our minus g. the interest you are paying and how much the economy is going. if he continues to grow the rate is growing, the interest rate is going to be lower than that.
i am not going to be worried about that. and if it starts moving up, and it looks like it will stay up, then i worry about it. i do not think a lasting shift to 3% will ruin the yield curve. tom: let's conflate this. the key is that interest rates, as it relates to growth, if it is there, everything is ok. do you believe that what we are misjudging is a technological overlay which will give us better productivity so we don't have to sweat our minus g. >> i think we are misjudging this extent of risk. i would love to see jean jump. tom: do you model g jumping, or is it completely underestimated in the aerodynamics? >> i am not following. what we have seen is that over -- you look back at the data, if
you have a large enough economy, with a stable government and it is issuing debt in its own currency, it will stay below g most of the time. if you look at western and japanese history, you get it jumping when there is a political problem, and that is where i worry not some threshold that was being mentioned. i worry about it because when it stops being credible, you are here in washington. you stop seeing credible you can pass debt. you can pass a budget. you can raise taxes if necessary. you can get at it from a stupid debt limit. that is when it will jump. tom: speak to secretary yellen and everyone else managing this in real time. you don't have a concern about the combined sum of our debts right now and the trajectory of them? >> in response to lisa on that question, what i always say is that it matters a hell of a lot more what you spend it on and how fast you spend it over time than the level.
tom: how are we doing that constructively? >> the january package was overshooting. i agree with that. the january package was too much handout. what is in the investment package that is now under consideration in congress would be well spent money. jonathan: that was the argument that larry was making. pushing afford would take all the oxygen out of the room to push this forward. ultimately, that is what we are up against. what is amazing about this moment, for me, and for people who love this material and loves content, they are students of it -- here for someone equally as talented earlier in the morning taking the other view on all of this. inflation. i often asked people, what is the tell? what do they need to see to say, maybe i am wrong about this. what would be the tell for you? >> the me -- for me, the tell would be two things. either we get no real wage growth over the cycle, meaning
that we continue to have inflation outplace wage growth. that would be all for not. you might as well go with his heart of money as possible. the other tell would be a large jump. my friend mohammed and others are missing the tell that should have told them to reconsider. look at japan, look at the united states. their views do not explain and cannot comprehend why rates stayed so low over the last 15 years. jonathan: we need to get you on together. great to catch up. adam pozen of the institute. that is the phrasing of the debate. muhamed is on one, adam on the other, and we have company on both sides. good company. tom: good company. this is what it was out -- about when we invented bloomberg surveillance. get the top minds in the agree to disagree. they have some very constructive overlays where they jointly
>> crime it risk is a financial risk. countries have recognized it, but in the united states, they seem to have not fully taken this on board. i am very concerned. the chairman of the federal reserve has not taken on board the real risks associated with climate change to our financial system. to our banking system. tom: good morning from washington, d.c., and new york. on bloomberg television, bloomberg radio. stiglitz has a ferocious defense of the international monetary fund. the manager. banking is a bit off our radar and this week of international economics, but now we die full into it. it is good that we can do it.
the fiscal affairs department director at the imf, but a fancy title barely describes the respect for the balance sheet worldwide that world leaders have for our gentleman from portugal. we are thrilled you can join us. welcome to bloomberg. >> thank you for having me. tom: i want to go to the issue at hand, and i know that you do not speak for the managing director, that would be inappropriate. you talk about strengthening the uncertainties that are out there. within the fiscal process. how does your imf prove, through your department, your phd's, its data integrity in the coming weeks and months? how do you show, not tell? >> data integrity and analysis integrity is absolutely core for us. i am very proud of my colleagues in the fiscal affairs department, and we have a very robust process to ensure data
integrity and the soundness of our analysis. it involves both our department, but also other departments that in the review process, that our data -- vet our forecast, that our analysis. -- vet our analysis. we are one of the most robust processes in the world. we are always striving to improve. for example, the independent evaluation of this reviews how we conduct our business, and makes recommendations to address to management. they are analyzed, and we make constant progress in the way we produce data and analysis. tom: the joy of what we do here is we had adam pozen on for a spirited conversation about the fears of inflation. that devolves right into fiscal affairs in the bouncy. can we have a normal discussion
about inflation, given the excess balance sheets we have from this terrible pandemic? >> the uncertainty we are facing has exactly to do with the pandemic as you pointed it out. the effect we have in these locations in the balance between supply and demand is creating bottlenecks, specifically for sectors, and price spikes. they may last for a while. while the economy rebalances and makes its transition to a new growth path. in a situation, like that, central banks, if inflation and inflation expectations are well anchored for the medium to long-term, they should look through this transitory price spike and conduct military -- monetary policy at a steady hand. tom: with fiscal affairs, and frankly world leaders, are going to turn to you with the overarching question, can
emerging markets do better in crisis now because they have better fiscal affairs. does it fall back into the governance of the imf and the world bank and other institutions, the g7 and g20, as well? can you report, through your research, that emerging markets are more fiscally sound now than they've have ever been? >> emerging markets like all country groups are very a drudge in us inside. -- i draw genesis -- adrogynous inside. probably most of all is the emerging market. we emphasize very much in the physical body that you just quoted, the strength and credibility of public finances. we recommend all countries that they should maintain or build the credibility of their fiscal framework because it pays off.
how does the payoff? pays off in terms of better financing conditions for the treasury. it pays off in more flexibility to get financing when it is needed. it is therefore precious as an insurance mechanism in times of stress like covid-19. tom: then there is china. explained to us from your chair the transparency of china and your observation on the speculation of real estate in china and what it does to the physical structure. both government and private. >> let me focus on the issue of public financing transparency in china. we have published preliminary estimates on the base of the global database that covers public death, not national cobra debt or household debt. one of the challenges that we face in the case of china is to look at what exactly is public
sector debt, what is noncorporate debt that is private debt, given to rule the state of enterprises, given the role of --. tom: are you confident in transparency or the trend to improve transparency? >> i believe the chinese authorities have been in -- improving transparency, and they are committed to improving it even further and i look forward to working together with the chinese authorities to do just that. tom: we are out of time. we have an exceptionally busy day with bank earnings and such, and i'm pleased to report to you that the american answer profitable. i hope that will make the day better are you at the imf. vidar gaspar is with us at the, and he changes the worldwide debate on the balance sheet and on fiscal affairs. lisa, james gorman darkens the door and a bit. that will be an interesting conversation. >> especially because he had this to say about the fed taper.
he said that it will obviously be a slightly more turbulent market going forward. they are not complacent about that, but because of the tapering, avon purchases which will happen at the end of the or, at least according to the meeting. this was a pretty powerful set of releases. there were a number of big takeaways. mosher biggest take away? tom: the magnitude of fear. we may get some difficult earnings, but i am not sure they are going to be, to use the phrase, the crater that so many people talk about. i could be wrong and that. lisa: for bank earnings, it is anything but that. my big takeaway was that advisory fees are knocked out of the fark -- part. and you are seeing that it is the bank of america side's credit card book expanding. it is really significant. it is a sign that some consumer
growth and loan growth. that is a big deal. equity trading also knocking it out of the park. the big question is how much of bank of america dealing with market share versus a widespread increase in the balance sheet of consumers? tom: my big question is, i will be in a fancy foreign embassy at 10:00 tonight, and all i'm going to ask is for them to put on the giants and dodgers. lisa: is that so? you have to be somewhere tomorrow morning? tom: i am living. lisa: so everyone, watch out tomorrow. we will see tom keene. tom: continuing from washington to new york.
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>> we advanced 40 points. the countdown to the open starts now. >> everything you need to get set for the start of u.s. trading, this is bloomberg, the open. with jonathan ferro. jonathan: from new york, we begin with cracks in the transitory narrative. >> we know we have inflation. >> inflation is rising. >> ratcheting iron every day. >> as we start to see numbers take hold. >> it is no