tv Bloomberg Surveillance Bloomberg October 15, 2021 6:00am-7:01am EDT
>> pandemics change behavior, as we have already seen, and consumers might be worried. >> shortages on the labor side and the supply side. this is well telegraphed. >> disinflation around is not transitory. we should take it seriously -- this inflation round is not transitory. we should take it seriously. >> we should be opportunistically reflecting. we should be saying inflation is above 3%, let's re-anchor it there. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: good morning. this is "bloomberg surveillance" live on tv and radio. the equity market up 14. it is all about the two, two days of gains, just two weeks of
gains, 2% away from an all-time high. michael: what a drop -- tom: what a draw up it is. we have made back 64% of the bloom we have seen a week ago -- it was a week ago this friday. it has been an extraordinary week. jonathan: two events still to go. goldman sachs earnings and retail sales. 8:30, a couple of hours away. tom: to me the real issue is the x axis of the slow down of this booming economy and the tilt this week as may be we do not get back down to the low single-digit numbers, 1% or 2% economic growth, maybe that is pushed out longer. jonathan: your equity market positive. lisa you will run us through the events into the weekend. the pboc says everything will be ok. lisa: they have been trying to tell everybody they have the
situation under control and encourage banks to lend more when it comes to housing debt. this time they say they are urging developers and shareholders to fulfill that obligation. please play your debt -- please pay your debt. also saying ever grande risk -- the fact they are saying says they are concerned. jonathan: we are headed for a second week of gains. your equity market is positive. tom keene, you've seen it all week. the bloom -- the gloom crew taking one on the chin. tom: the week started on wednesday with the banks earnings. the banks are in business and there minting money. jonathan: we will wrap up bank earnings and about two hours. yields were lower through the week. the back end of the week, a lift. 10 to 1.5458. lisa: the biggest change in the
narrative is companies can deal with the supply chain disruptions with the higher input costs because the revenues are turbocharged and the consumer keep spending. we will get a read on that at 8:30. september u.s. retail sales expected to come out softer because of auto sales. you start to see a bit of a gain. still softer. people are looking past this. bank of america seymour credit card loans, and is what has led bank of america to be the winner. yesterday shares rising the most going back to january. 8:30 to caps off all of the bank earnings, goldman sachs coming out with theirs. a lot of people looking at investment banking revenue. to take a look at where we are over the past year, these are massive numbers. morgan up nearly 100%, bank of america up 87%. 10:00, this is the other
important moment of the day. the university of michigan sentiment survey is coming out. i want to see inflation expectations. we have seen a downward trend in consumer sentiment. people saying this does not cohere with what we are seeing from businesses. then we take a look at the five year to 10 year inflation expectations rising to the highest level since 2013. at what point does this matter for people looking at what consumers are taking into their expectations? jonathan: let's talk about one thing underpinning that. brent through 85 briefly, right now 84.77. wti crude 82. we have not been through 85 since 2018. it has been a real lift. we have been drawing down stockpiles. we are seeing that in copper. there is a lift again. tom: there is, absolutely. i turn to commerce of germany who do i wonderful daily note
and they drew into the microeconomics. he says when everything is said and done it is implied that regular opec, there will be a call on further oil of opec-plus because of the new demand reality. jonathan: i think you nailed it. what is the ceiling for crude and this rally? the point is the supply story kicks in the other way. opec-plus reacts or it starts to hurt demand. i do not know if we are there yet. tom: oil is very tough to pick. the story i am getting across every style of every strategist is and always tight market, ever tighter. the dynamic now is not supplied, which everybody likes to talk about. you and i are scheduled in vienna the next meeting. it is about demand. the mystery and there'll be more demand for hydrocarbon. jonathan: you keep planning this european tour. that is one more limitation.
vienna. kip jukes is with us now, chief strategist at socgen. -- kip jukes -- kit juckes is with us now. how challenges the fed put from your perspective? kit: is getting squeezed. that is the biggest long-term feature this year. markets think inflation will be somewhat higher for longer and the sense that once we get through the spike we are going back to the core pce deflator, we are going back to something above 2%. that gives the fed less leeway to be nice to markets every time we get an equity selloff, every time we get economic weakness. they may find themselves having to lean against this for longer. you have to remember we have 20 years since alan greenspan decided deflation was scarier
than inflation and put rates down 1% and have a look at what has done since then. that era of being more afraid of deflation is almost certainly over. lisa: amid all of this we are seeing a little bit of dollar weakness after all of the dollar strength we saw over the past weeks. that even a mile away. now we have reflation back on. why has the dollar not strengthened on the heels of what you are saying? kit: is a more complicated story for the dollar at the moment. it has done really well against the japanese yen, which is the most sensitive currency. that has been annihilated. it has had a good run against the euro and we got stuck above the lows looking at the european cart registration numbers, you know the canadian dollar has been beaten up, the chinese yuan
is steady as a rock. someone is keeping it there. the rest of the commodity sector is having a good time. emerging markets are having a good -- a hard time. it is a mixed bag, but the dollar rising story is still a fact, in the euro weakening story is still intact. michael: your -- tom: your micro work has always been great. you have been doing a lot of work on the american consumer. i am ignorant about the european consumer. do they come back strong in good? kit: they have come back to some degree in good. they have some of the same issues on supply chains as we have in the u.k. the european week point has not been as much of consumer demand. that is a chip shortage here the
same as everywhere else. we are more sensitive to natural gas prices, which took off. we are more sensitive to oil because we have less of it. in every way you can imagine we are more sensitive to our exports towards china and the chinese economy which is clearly weakening. those things are real headwinds to the european economy. in terms of european consumers back at work, london is much fuller than it was. what we did not have is the big one off checks americans received which are making banks happen. jonathan: we are dancing around a key issue. i want to get around the point you made this morning. the previous bull market was characterized by low volatility in a fed that would step it every time there was a sign of trouble. if you are saying that might be challenged, what does the future look like, what does the market look like if that is the epicenter of it?
kit: is vastly more uncertain. when we get the recovery spreading out around the world, we are likely to find that central banks are stepping in earlier and are unable to provide solace every time the global economy or markets take a hit. we get more volatility until we get through some of these distortions. tom said at the beginning the energy market is seeing speed of moves that is not been seen for years. that is not the only place we will see that in the next two or three markets. shorting out labor supply and demand mismatches, sorting out global trade, sorting out some of the geopolitics, sorting out differences of opinion about fiscal and monetary policy integration, we have all of this to do once we have sorted out this virus. jonathan: we have a time to
resolve. things change. will things change on monday for your beloved gunners? kit: they have improved. i am half optimistic. they are moving forward. tom: i have to wait -- i do not even understand what is going on at newcastle. what i am focused on is chelsea. i don't get it. richmond tied brentford, which was really exciting, now brentford will play chelsea. are they going to be so fired up after the richmond brentford derby? jonathan: i think you might be confusing fiction with nonfiction. kip jukes -- kit juckes of socgen, thank you. check out bitcoin, approaching 60,000. a bloomberg story this morning indicating the sec could allow the country's first futures
based cryptocurrency etf. bitcoin flying. we will add to that story later. from new york, this is bloomberg. leigh-ann: it is the latest milestone in a global energy crunch that has seen prices soar. oil futures have hit $85 a barrel for the first time in three years. crude features have jumped in recent weeks as natural gas prices hit records while the price hikes raise revenue for oil producers they risked slowing down economy is just emerging from a pandemic driven slump. it is a watershed moment for the cryptocurrency industry. bloomberg has learned the securities and exchange commission is poised to allow the first bitcoin futures etf to begin trading. like bitcoin applications, the sec previously denied -- they
were filed under mutual fund rulings. in china there are more signs of concern about contagion from the debt crisis that property developer evergrande is facing. it is loosening restrictions on home loans. they've been told to speed up approval of mortgages. the u.k. may suspend restrictions to help with the supply chain disruptions. proposals would allow truck drivers to make an unlimited number of tips. once they enter the u.k. that could facilitate thousands of extra deliveries. 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 leigh-ann gerrans. this is bloomberg. ♪
>> while i do think there is some probability that this will naturally dissipate over the next six months, i would not say that is such a strong case that we can count on that happening. i would put 50% probability on the dissipation story and 50% probability on the persistent story. jonathan: the man from st. louis says it is 50-50. st. louis fed president james bullard. new york city, good morning. your equity market shaping up as follows. poised for a second week as gains come up 15 on the s&p. there is a lift in this bond market. yields higher three basis points. there is a lift in the commodity market. commodities higher. crude up .9% to 82 dollars on
wti. on brent we had a little look at $85 for the first time in a long time come all the way back to 2018. a little bit of news. my calendar at axios having a chat with the white house official, saying "with democratic lawmakers on the final shape of president biden's build back better agenda, talks are accelerating, this progress means we can conclude negotiation soon." is that news? to that advance the story? i'm not sure. tom: it gets you to the sunday talk shows. greg valliere a at agf saying there is -- is a note is liberals will cave. senator sanders will break and -- will blink and bring it down. annmarie hordern joins us. joe manchin. there is a senator from arizona, original green member. past progressive and liberal
with a changed tune over the year. senator kyrsten sinema says we are not raising taxes. how does that play this weekend in washington? annmarie: there are reports that sinema wants to hold hostage the reconciliation package. she is very annoyed that heart infrastructure has not gotten about. there is a great piece in the new york times saying is she really a democrat? this is what drives democrats, the frustration with kyrsten sinema, she does not negotiation in public. where does she stand? the white house does say there have been good faith talks. we know what joe manchin thinks. we do not know where her mind it. tom: into this weekend, staggering into the end of october, how still attached are these bills? annmarie: at the moment they are very much so. that is what happened when the
president made his way to congress. the progressives in the house had the numbers to hold back heart infrastructure. things could potentially change as we go to october 31. speaker pelosi created this deadline. in the deadline it is funding for highways and transportation and railroads. that funding is in the heart infrastructure. if they do not pass it they have to do another 30 day, 60 day allowance for that. that is potentially one way to potentially get heart infrastructure through. for progressives there has to be a framework of what goes in the reconciliation package. tom: frame the leaderships of the progressives. his speaker pelosi part of leadership of the progressives? annmarie: she is supposed to represent the entire party. she is dealing with two sides of the party. she has to. how she going to get the votes if she does not talk to both sides?
clearly she is trying to go down the middle of what is a very progressive left and a more centrist, moderate right to her party. lisa: let's get to the meat of the bill. there are broad platitudes being brought out having to do with health care and childcare. where are the areas for negotiation at this point? annmarie: you hit the nail on the head on what is going to be one of the big showdowns within the democratic party, and that is the expansion of medicare. it is some $380 billion over 10 years in an expansion of medicare, dental, hearing, vision. this is something bernie sanders once done -- this is the same way -- this is something bernie sanders wants done. this did not get over the line without his support. you will not see the uptick democrats need going into the midterms. this expansion of medicare we
would not see until 2028. there are individuals who say such a chunk of money, our constituents will not feel the benefits for years out, when potentially some of us will not be in office, maybe that is where we start trimming some of the funds. lisa: tom keene has been talking about the november 2 election in virginia being a proxy for the midterms. if there is no deal struck between democrats before then, how much could that election potentially color the entire tenor of the negotiations heading into next year? annmarie: it is starting to become a very big talking point in washington. tom and i were out yesterday and heard a number of people talk about this. did this virginia governor's race for shadow of november? one talking point in the beltway , and tom will know a lot about this being from boston come is people will compare it to is this a potential update it like massachusetts in 2010 will stop
what was going on in d.c. was a debate about obamacare at the democrats lost at sea to a republican for the first time since 1950's and this is the anxiety of the democratic party. jonathan: where is the president today? annmarie: you will be in connecticut trying to talk about his bill back better agenda. hartford interesting. connecticut is a more affluent state, but when you look at the socioeconomic's of hartford versus the suburbs, the president is trying to reach those who live lower than those in some of the more affluent suburbs of connecticut. jonathan: down in d.c., our washington correspondent will stop trying to make progress. i'm not sure if we are making it. tom: it is a ballet. we will stagger into november. i do not know when this gets settled, if it does. i know it is not now. i do not sense any real
decision-making going on right now in washington. part of it will be the monitor of events including virginia. jonathan: it will take some time. lisa: i do not understand how it is being priced into markets. the consensus right now seems to be they will get something done, but it will be offset by higher taxes and this seems to be what is baked into markets. i wonder where the surprise is other than a shift in leadership in the midterm election. jonathan: no idea how you can price anything at this point. the set of opinions is radically different. every conversation, whether politics or the economy or the transitory conversation, it is so polarizing at the moment. tom: it is polarizing, and i laughed when i first heard this word. that is narrative. i was like ok, it is transitory. it has become accurate. everybody has a narrative,
everybody is making it up out of thin air. that is my narrative for today. jonathan: john waldron said i have never seen a greater divergence between what is defined as transitory and what is being seen day in and day out. that is the view from wall street. from new york city, equity futures up one third of 1%. on radio, on tv, this is bloomberg. ♪
or xfinity rewards members, get the inside scoop on halloween kills. just say "watch with" into your voice remote for an exclusive live stream with jamie lee curtis. a q&a with me! join for free on the xfinity ap our thanks your rewards. baaam. internet that doesn't miss a beat. that's cute, but my internet streams to my ride. adorable, but does yours block malware? nope. -it crushes it. pshh, mine's so fast, no one can catch me. big whoop! mine gives me a 4k streaming box. -for free! that's because you all have the same internet. xfinity xfi. so powerful, it keeps one-upping itself. can your internet do that?
jonathan: live from new york city for our audience worldwide on tv, good morning. here is the price action after the biggest one-day gain on the s&p, we had some way to the rally, up .4%. advancing on the nasdaq one third of 1%. on the rustle the small caps up .4%. goldman sachs at 8:30 eastern. uscp i around the same time. going into that, this is what -- brent crude through 85 for the first time since 2018. wti $82. in and around seven year highs come up over another .8%.
demand is good and supplies a problem. when you start to see inventories come down, you start to see prices rise again. you see that in crude and on copper. tom: that is right where i wanted to go. this is not just about oil. it is about everything else. as kit juckes mentioned it is the rate of change in commodities. jonathan: glencore is cutting back on production because energy prices are so expensive. another one to look at. tom: my pills will cost more money? jonathan: perhaps. let's get to the bond market. on the week, we closed out last week on five 30's, take your pick. 1.10 friday last week. backs up, about 98 basis points now. on the week it is certainly
flatter if you look at parts of the curves like fives versus 30's, a lot of that is the rally we have seen in 10 and 30. this morning yields are higher to 1.54 on 10. on 30, 2.05% on the day. tom: will be your focus on the real yield? you can see it this afternoon and far too many times this weekend. the real yield has expanded out. jonathan: the conversation will be about the rate hike dance pulled forward in the last week. a conversation about how sensitive this federal reserve will be to the incoming inflation data. the base case has gone from base case transitory, the balance of risk has shifted from the upside risk is down upside risk to inflation. i think the base case has to move. you heard from jim bullard. for him it is 50-50. a plausible outlook with
transitory factors connected to elevated inflation, connected to the reopening. i do not think you keep saying that as much as you used to. tom: i agree. it is a parlor game. retail sales will be part of that data set. jonathan: let's be clear. it does not mean this has to end in a bad way. it is not from everything will be great everything will be terrible. it can be in between. it could be a fed more sensitive to this inflation story and await maybe they do not want to be at the start of this year. tom: you are sensitive this morning. jonathan: i am a little bit delicate of this idea of the pendulum swinging from everything ok to everything is awful. everything will land in the middle. tom: is there anything you want to tell us? jonathan: just trying to get clicks. tom: margie patel is with us, senior portfolio manager at wells fargo asset. her world. for red sox/astros.
we will see that later today. everyone agrees no one has a clue. you have seen this before. what do you do when there is cascading narratives with no underlying theme? margie: i think there is an underlying theme, which is interest rates, the whole bond market is controlled by the fed. central banks never realized how much power they did have. they cannot control the economy or stocks, they have done a great job controlling interest rates. i think we will see more of the same. rates will be much lower than we think. their eyes will always be unemployment as an app that they do not have to raise rates or cut back on tapering. tom: adam posen was on fire yesterday about moving our expectation of a 2% centered inflation rate higher, not to
4%, but in the vicinity of 3%. if we have trend 3% inflation modeled in, how does that change your investment world? margie: i would look at companies and say who has pricing power that can pass that on. the way things look, most u.s. companies have the ability to pass on price increases like that. i would look at companies with growth and pricing power. 2%, 3%, current 6% is not as important as underlying demand. lisa: earlier tom was talking about the narrative, and the one way the narrative shifts is the markets seem to embrace the idea of a more hawkish fed, fed moving faster than previously expected. we saw this with some of the rate hikes brought forward and still the rally. do you think this is ultimately an endorsement at the market will sell off if the fed does not act quickly enough? margie: i don't.
you can see what the fed is going to do is a very modest cutting back on its fines, which is positive for the market because the fixed income markets are starved for long-duration securities. i think it is a plus and i do not think it will have any effect on the economy at all. jonathan: at what point will rate hikes start to print growth? could it derail the rally we are seeing or do you see that is baked in even if we get two rate hikes before next year? margie: i think the economy is on track to continue to expand. the u.s. will be one of the highest growth countries in the world because corporations and consumers are in such good shape. we have consumers that have enough savings that many people do not go back to work. corporations are awash in cash. those are the foundations for -- those are not the foundations for derailing the economy. tom: i want to go back to your
exceptional insight on pricing power. i thought of phil of pioneer when you mentioned that. what i really want to talk about big tech. right now the street is doing a balance sheet discounted cash flow yield analysis of big tech, and in a way marking them down. does the street have a totally wrong and they will be the kings of pricing power? margie: we will have to see. this is an interesting earnings season, to see some of the high growers. can they maintain that rate? tom: as i mentioned the venerable of pioneer who live to 100 and invented so much of what we do, how is the word value
changed over the decades? margie: value has been trashed, and the whole value sector has underperformed growth that you would wonder why anybody would look at value stocks. i think the pendulum has swung so far you have to look at value stocks because if any sector is vulnerable i think some of the high-priced high growers who lose some of their earnings momentum, the pendulum will swing back to the industrial sector and material sector and we will see those sectors outperform instead of the pure growth names. lisa: what about the bank earnings we just got? what does that tell you about the earnings season or has it been more opaque than usual because the banks are not as susceptible to the margin pressures from higher prices? margie: it shows you that loan demand is rather muted, whether you look at corporations or consumers. also a lot of loan demand has been siphoned off by other players and private equity,
private debt, other alternative lenders. that is an area that shows the underlying liquidity of the economy. it leaves me lukewarm. lisa: is there anything you are staying away from? margie: i think most companies in the u.s. will benefit because what these corporations at the margin will be moving back production. i think it is bullish for american companies. jonathan: how do you respond to citigroup -- tom: how do you respond to citigroup's research note? it is a shock to see their index named in honor of tobias levkovich, it is so sad he died. the index said we are going down. there is a huge likelihood of caution. how do you respond to the caution right now? margie: tobias had been saying that all along. he was very cautious on markets.
i think it is premature. all of our corrections have been caused by the fed over tightening. to me they are telegraphing they will not do that, they will keep the market high and use the labor market as an excuse for transitory inflation. i think they may be right but i think we have to push it into 2022 at the earliest. jonathan: thank you as always. margie patel of wells fargo. priya misra said the market is planning the fed will be forced to hike, we do not think so. that is where the debate is right now. this week i do not think we resolved anything. tom: bottle that. what you just heard, whatever you heard, margie patel was lights out. so importantly, you linked someone managing equity and bond dollars over to priya misra, trying to parse the strategy,
making the argument ever stronger. jonathan: that is the conversation. on the one side there are people who think rate hikes have been brought forward, others think the federal reserve will keep on track, keep looking through it. lisa: the consensus is they are brought rate hike forward in the fed meeting minutes, they said they plan to end their bond purchases by the middle of next year. this would indicate they were ready to start hiking rates. they have not done a ood job divorcing the taper from the rate hike and they stop that task ahead of them. jonathan: i do not think we need to talk anymore about fed minutes. lisa: i think we need a special on it. jonathan: i do not think so. i'm totally exhausted by it. cannot wait. tom: several people on surveillance would like me not to come home. jonathan: 10, 1 .50 441. a couple of people familiar with
the story. in the bond market, yields higher. 1.54 on the 10 year. this is bloomberg. leigh-ann: i am leigh-ann gerrans. advisors to u.s. regulators say booster shots of moderna's coronavirus vaccine should be given to older people and those at high risk of the disease. the booster is half of the original dose. the fda panel says it should be given six-month after the initial vaccination. the texas abortion plan will stay in place until a hearing in december. a federal appeals court says it will keep a child's judge ruling blocking the law on ice until the issue is taken up in a related challenge. texas bans abortions after the sixth week of pregnancy, before most women realize they are pregnant. amazon has appealed a record $865 billion fine over the european union data protection
law. regulators and luxembourg world the company violated laws through its processing of user's personal data. amazon has denied there was any data breach. it was the worst september for auto sales in europe since 1995. new car registration plunged 25% to 973,000. that has put the industry on track to do worse than last year's disaster showing. the automakers lobbying to drop -- the semiconductor shortage. 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 leigh-ann gerrans. this is bloomberg. ♪
>> i am not a buyer of this story is all transitory. i think inflation will pick up. it will force the fed's hand to move more aggressively. >> right now the inflation is not temporary. it has people worried about more permanent. >> inflation is running in a much hotter pace than we thought it would be a few months ago and will be there longer. jonathan: that was the morgan stanley ceo james gorman and the bank of america ceo and the wells fargo cfo. those guys are dialed in. they know what is going on in the world of corporations and what they are dealing with. they are pushing back hard this week. your equity market up 50. yields higher three basis points to 1.54 on 10. crude positive. rallying .9%. through 85 earlier on brent. here's the story for bitcoin.
why don't i quit -- why don't i quote bitcoin often? every time i quote it the price changes. up about 3% on the session this morning. report from us indicated the sec looks poised to allow the countries first futures based cryptocurrency etf in america. it is about institutional acceptance. just temper volatility and to help things go moving forward. that is the story. michael: is institutional -- tom: is institutional acceptance. certainly the imf and others are working on that. what does it do about the cross-border of bitcoin? what does it do about the tax reporting of bitcoin? jonathan: i don't know if i gave you an opinion i would just be guessing. that is where things stand. there is a belief the sec is
going to be tougher on these issues and get something done. i think that is maybe why we are increasingly sensitive to the story like the one we saw this morning that the sec might greenlight something connected to bitcoin. that would be seen as a big positive through this administration. tom: it would be. we are getting ready for the weekend and into the real earnings season coming up after the banks. matt mainly's chief markets -- matt maley's chief market strategist and joins us now. i original -- i religiously use what are kleinman moving averages. there is no time on a friday to go into the math. do you use the 50 and the 200 day moving average and you believe in the death or the birth cross? matt: i do watch those moving averages very closely. the death cross and the golden cross, those are a little bit
different because they work for some assets and not so well for others so i tend to look back in the past. the 50 day moving average, there is no question that until september that was rocksolid support all year long and bounced off many times. then we finally broke through in september. the old saying is old support becomes new resistance and in the last couple of days we have been bumping up against that. we can finally break above that and give technicians some relief. tom: on a daily chart for our viewers and listeners as they look day today at bloomberg surveillance, how many days do you need to confirm a breakout? matt: you need time and percentage moves. if you just get a few pennies above it, it has broken above it a couple of times. you want to see 1% to 2%,
sometimes even 3%. at least 2% above that line, and usually for several days. two or three days is the absolute minimum of what you want to see. obviously you get a bigger move than 2% or 3%, all you need is one or two days. lisa: how important is the headline number? is it getting less important as the sector start to diverge more meaningfully? matt: yes and no. the headline numbers are important. for performance right now you want to be a stock picker. that will be the most important thing. for market watchers, we still want to look at these major averages because we have a situation where china has been going to deleveraging and de-risking process all year round and the fed is about to taper on qe. that will be less stimulus in the marketplace and we want to see how the major averages at as that is taking place. lisa: how we started the show is
the depth seems to be over and people are buying it. is this just a short reprieve before we start to see the momentum downward again? matt: i worry we have more downside. as much of it feels like we have seen this drop down, we are get stuck in the sideways move between the 50 day moving average and the 4300 level on the downside. it has been a tight range. i am worried that because of these issues, the biggest one is inflation, but also the big change. we have the second biggest economy in the world adding leverage and adding risk to their system for 10 years or longer. now they are suddenly pulling it away. the ecb and the fed are about to taper. inexpensive market, that concerns me. if the market was trading 15 or 16 times earnings, i would be concerned. jonathan: matt maley joining us
on this market. i said earlier i do not think we resolved anything this week. equities are up and we start dreaming about next year and 4% gdp growth and supply chain issues baiting. when equities are down we wrote about higher prices hurting growth. prices setting narratives every single day. equities up. friday outlook is great. the next day they are down and the conversation changes. jonathan: i agree with that is -- tom: i agree with that as a symmetric discussion. the fancy math fate -- the fancy math phrase used is lognormal. you go up at a rate that is more measured and when you go down, you go down quicker. even though it is a symmetric media conversation all of the pros in the game understand when you go down you do it at a rate of change greater than when you go up. that is the standard guideline. jonathan: how many times do we
discussed this narrative? lisa: there is nothing established. if you take a look at some of the data you see the fed will be tightening. if you say there word has any kind of validity, we see inflation picking up across the board. globally the fact that china ppi came in so strong and metals prices, what have we learned, why do people think it is containable. jonathan: china said it will go back down and things will be ok. lisa: how is that working for them? jonathan: start on the program. when a policymaker -- lisa: they are saying please pair -- please pay your debts will stop apparently ever grand plans to pay a debt payment. jonathan: local currency debt. not dollar debt. a little bit of news from germany. olaf scholz forming a coalition
>> the pandemic has changed behavior, as we've already seen, and consumers might be worried. >> on the labor and supply-side remains a risk. >> this inflation round is not transitory. we should take it seriously and central banks should move quickly. >> i have operated under the assumption that the fed is pretty much sitting on the couch and watching this play out. >> we should be opportunistically re-fleeting saying that inflation is above 3%, let's re-anchor it there. jonathan: let's get to the weekend. good morning, good morning, this is "bloomberg surveillance" live on tv and radio.