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tv   Bloomberg Surveillance  Bloomberg  November 1, 2021 6:00am-7:00am EDT

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continue to and force this upward trajectory. >> i do not think we are at peak pressure for markets yet. >> this is bloomberg surveillance with tom keene, and lisa abramowicz. jonathan: good morning. this is bloomberg surveillance live. alongside lisa abramowicz, i am jonathan ferro. your equity market up 19. it is unbelievable. nothing seems to stick on this equity market. lisa: especially considering the fact that all the narratives the people said could puncture the equity market have been there. you have seen supply chain issues, inflationary pressures get worse. yet stocks keep rolling along. why?
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jonathan: the rba, the federal reserve, the bank of england -- a ton of central bank decisions. lisa: they are going to announce tapering. the question is whether they start november, december and whether they push back against rate hike expectations. jonathan: will we get sufficient pushback to the rate hikes christ into the front end of this yield curve? kailey: we saw that christine lagarde ab gave a weak attempt at pushing back. we understand that she was advised not to do that. do that would be a we move at this meeting? i was talking to steen jakobsen early this morning. he said central banks are so far behind. kailey: -- have sacked their
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manager. that happened in the last 30 minutes. the first manager is gone. tom keene failed to show up for work. lisa: causation is not correlation. but we are throwing it out there. should we will -- jonathan: should we wake up tk? up 19 on the s&p. there is a left in this equity market, remarkable. who would have thought that amazon could deliver the earnings they deliver and this market would close friday and another record? bond market yields higher. but it is the front end of the curve. we have more than doubled since the fed last met. lisa: we have seen such a huge pricing in rate hikes.
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equities continue to go up. nobody seems to care about the potential for rate hikes that gives the federal reserve some license to project that they might be raising rates sooner. today, we are focused on the cop26 in glasgow. it caps off today in a more real way after formally kicking off yesterday. talking about carbon emissions, keeping the climate from rising 1.5-2% in the next decade. what are we hearing it? a lot of fluff. in a few minutes, the rio ceo talking about -- ism mash -- manufacturing. i am focused on supply chain
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disruptions, particularly after what we saw in china this weekend. negative manufacturing data. today we get hearings from the supreme court on that texas abortion law that essentially banned abortion in that state how does this redo the political landscape ahead of tomorrow's election in virginia? biden's approval is the lowest of any president except for donald trump. jonathan: what we think of the weekend events? is it lost on anyone that they were all in rome and now they have traveled 5000 miles to go to glasgow -- 1500 miles to go to glascow to talk about climate change? does that make sense? kailey: i'm going to quote jonathan ferro, where he talked about davos.
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a number of people in first class talking about social inequities between the rich and the poor. i am looking for something concrete. that optimism seems to be sinking. jonathan: he is a wise man, a good man. [laughter] u.s. equity head and cohead of multi-assets. a central bank decision, the federal reserve on wednesday, the bank of england on thursday. we have these massive moves at the front end of the yield curve , well-documented. what are you looking for this week? >> from the rba, we need to see that they are going to reassure markets that they do still have targeting on the yield curve. last week, the market tested them and rba was quiet. you have an increase in the two-year rate, a shocking magnitude. from the fed, consensus is that
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they will announce tapering. they need to be careful to manage market expectations. the market is already pricing in rate hikes. with the boe this week, the expectation seems to be that we will get the first rate hike, marcus pricing in. 51-52% chance of a rate hike. >> would you agree that what is going on right now may be similar to the end of the brenton would monetary system? he said one after another, central banking assertions are being challenged right markets that are raising in hikes. what do you make of that? >> the markets are overly alarmed about inflation. i do believe inflation is likely to be higher in the next three years that we have seen the last decade, but when we say higher, we are talking about 2-3%,
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nothing alarming, but i think the markets are overreacting to short-term issues that may persist until 2022. labor shortages, supply chain issues, but i do not think it is accurate to say about the central banks are way behind curve or that they need to be hitting the panic button. yes, the market is worried. i do not know that i would call it a systemic challenge to central banks. kailey: but if central banks starts to feel inflation pressure and have to move sooner than they previously intended, is that not risk choking off growth down the line and what we are seeing reflected in the curve? >> that shortest steepening seems to be the risk of a mistake. my advice to central bankers would be keep your eyes on the prize the fed had a multiyear review of its monetary policy framework before it announced
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the flexible average. we have had all of the five or six months now. for reasons we can easily explain, the fed should recall that they wanted inflation to average over 2% for long enough period of time for the markets to understand it is symmetric. one think the market might be underestimating is central banks could allow an nation to run high and that ultimately might allow raising fed funds. that has implications for yield curve shape. jonathan: here is a constructive view on the market. using up bottlenecks set the stage for above average inflation supported by massive restocking, cashed-up consumers, productivity. 3% inflation seems like a great trade to me.
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ron, does it seem like a great trade to you? ron: it does. i would take that trade everyday i think that that is a reasonable scenario. it is positive for many parts of the equity market. it differs depending on which part. security selection will be critical. if you have 3% inflation with strong rose, your cyclicals will do well, your financials. companies who have high returns and can ride that wave will do well. the companies that will be most challenged are will be those who hope to make company -- hope to make money in 5-10 years. lisa: are you talking about big tech? ron: i was careful not to say it that way.
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you have some high quality companies looking to make money. we have companies generating tremendous amounts of cash flow in these big tech companies. parts of tech will be fine. jonathan: great to catch up. lisa, we keep going back to this. if we have described the last month or so to people two months ago and then ask them how equity markets perform, with a have said we will deliver the biggest month of gains on the s&p 500? lisa: which makes me wonder how much markets are connected to fundamentals and whether that backed up has to do with negative real yield and a central bank that is incredibly accommodative and how much people are looking at that? jonathan: we now have to head to glascow to catch up with francine lacqua at the cop26.
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francine: good morning. i am delighted to be here at cop26. we are not sure whether a lot will be agreed upon given that down for of negativity about g20, meant to be preparatory, but i am delighted to be speaking to the chief executive officer of rio tinto, who is trying to achieve some of the targets that you laid out. thank you for joining us. very ambitious plans. you are one of the biggest producers of steel. steelmaking is extremely polluting. what do you need to achieve? >> climate change is a challenge because [indiscernible] it is a huge opportunity for us. it is a physical transition of
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the society we live in. we need more wind turbines, [indiscernible] , all requiring materials, but the problem we have right now is -- [indiscernible] francine: which is expensive. >> very expensive, we have just laid out plans that initiate more investments in [indiscernible] that achieve 50% more production. [indiscernible] our part in order to also benefit. francine: when will we be able to know more about scope three. this is the hard part. steelmakers, it is how they decarbonize. what is the plan? francine: the challenge with
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steelmakers is bigger than for minors. but a lot is happening in china right now. we do research and development with them. the major part of the solution, but part of it is [indiscernible] we are exploring various options. one is the opportunity in iron making, reduction. [indiscernible] francine: is china committed. we were disappointed about the g20. we do not have an agreement on domestic coal plans, global methane. what can we achieve? >> 2050 is far.
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people have to focus on the short-term. the reality is china is ahead when it comes to restyling -- installing renewable energy. they are ahead when it comes to electric vehicles. we see a lot going on in china. francine: where will you be able to set your missions for scope to? >> we have our action plans now. what we now need to monitor is the industry. we plan on [indiscernible] at the end of the day, -- [indiscernible] francine: when you look at what else we are not in control of, there is the energy crisis and the fact that the world seems to
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be stalling once again. does it make it harder to achieve your climate goals because of the difficult environment? >> i would not say so. at the beginning of the year, the economy was growing. right now, the economy is slowing. that probably makes sense. we are starting to move things around in the world. ultimately, it will have an impact. francine: how much inflationary pressure are you seeing? >> there was a lot of inflation in the first half where the world was growing at a high pace. but it is one of the challenges. francine: what does that mean? do you hedge? do your clients ask for time? >> we also benefited.
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part of the inflation comes from higher commodity prices. francine: what about china? there continues to be that zero covid tolerance policy. it is a difficult to ship things from china? >> [indiscernible] works extremely well. i am sad i have not been able to travel to china, where my biggest customers are. francine: what is your relationship with steelmakers right now? is there an agreement that you would help fund some of their efforts to become more green? >> we have very long-term relationships with our customers. that is where we are aligned. we always think on a long-term horizon. [indiscernible] research and development, including the chinese universities.
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the problem with r&d [indiscernible] is [indiscernible] but r&d is pushing me, when can you come? we are trying to decarbonize. this has been going on for 20 years. we may be profiting and might be able to change manufacturing methods, but it takes time. in order to achieve 2050, the world needs to put in a lot of seed to research and development. francine: are you frustrated by the lack of time or progress? what is most frustrating? >> i don't look at it like that. there is so much we can do with
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existing technology. we are now starting an interim race, because there is much more that we can do. thousands of engineers are used to classical energysolutions. they now have to think about renewable solutions. you cannot solve 100% of the co2 without breakthroughs in technology. the world will have to be patient. francine: patients how? >> 2030, we want to have half our carbon footprint. i want to have a clear pathway out a lot of uncertainty. -- without a lot of uncertainty. francine: thank you. jonathan: francine, thank you. in about 12 minutes, the president of the u.s. landing in
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edinburgh. we will bring you those pictures. contradictions over the weekend were clear or all to see. on the one hand, political leaders were looking to address climate change issues. on the other, you were asking producers to produce more oil. president biden: the idea that russia, saudi arabia, other major producers are not going to pump more oil so people can have gasoline to get to and from work is not right. what we are considering doing i am reluctant to say. jonathan: we will catch up with annmarie hordern. can you reconcile these two issues? >> the president's has he sees the irony. the u.s. was one of the most aggressive delegations when it came to the communique and
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trying to put ambitious language on climate change but at the same time they are talking to other massive consumer countries and trying to coordinate what they are going to do to pressure opec-plus. the u.s. president called out saudi arabia and russia. both of those leaders not at that g20. but calling them out for not producing more. and he also called out russia and china were not stepping up, not showing up in the physical sense but also in the sense that they are not onboard with those ambitious language. the president said he was disappointed on climate language he saw the irony of trying to push fossil fuel producers to produce more, but he said it is irrational to think you are going to move overnight to renewable sources. >> is biden facing any pushback
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from his own party, given the fact that one cure to getting to a faster transition to cleaner fuel is to allow oil prices to go up? >> potentially. that has not been under discussion. in washington, d.c., it has been a working weekend. emily wilkins and i were catching up. what is happening is that they are trying to get the build back better agenda. but in that agenda is billions of dollars for that energy transition. potentially, this administration does not want to see higher oil prices. they want to ease those consumer concerns. one at the pump, but also they eia is saying to heat your house this winter if you are on natural gas, it could be a 30% rise. this is something the administration does not want consumers to face.
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lisa: how much are the higher prices, inflation in the u.s. economy, what was behind the drop in president biden's approval rating? >> that president is facing criticism. that pole is just the latest -- poll is just the latest. they have the virginia governor's election, as well as new jersey. they are frightened at what could happen in virginia. on top of that, this is a president who arguably has the most legislative experience out of any president that u.s. has ever seen. yet he wanted to come to europe with that domestic agenda in hand. at the moment, is a piece legislation is still caught up in debate.
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kailey: what does that do to the president's bargaining and negotiating power at a summit like cop26, when domestically he does not have anything proven out yet? >> leaders around the world understand this is how democracy works. this is a legislative process. that real blow for his agenda was from senator joe manchin, who is not going to sign up for that clean electricity grid in the sense that you would penalize electricity companies for using oil and gas, give them incentives to move to solar and wind. one of the biggest plants in this legislation potentially is going to be those subsidies. many experts say the u.s. could reach half emissions by the end of the decade with those subsidies.
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there's also the money for electric vehicles and and that entire infrastructure that the u.s. wants to set out. jonathan: you think that g20 and cop26 might want to align things so they are at the desk in the same place, at the same time? lisa: another inconsistency. world leaders come in, massive jets, the president had an 85 car motorcade. they do this all again, take those motorcades and go to another city. potentially, that could help cut emissions if they were more in alignment, but given the cooperation, i am not sure. jonathan: thank you. this is lost on no one, a real struggle. that president is keen to promote democracy is an optimal way of promoting long-term
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prosperity. democracies are left grappling, looking to achieve long-term, collective goals are overwhelming continuously by short-term, political, electoral cycles. that is what is taking place here. the president is grappling with polls that are sliding and prices that are rising. he has to go to a place like rome and talk about the saudi's pumping more oil well discouraging investment in the oil patch. lisa: which is why there is so little getting done. help many times have you read the word "fluff" with respect to cop26 cop26. if there are enough investment in some of the greener sectors to move this forward? j lisa abramowicz.
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tom keene is going to be back with us tomorrow. or maybe he takes the gate. maybe. can you imagine ted lasso for real? lisa: new reality television show. jonathan: from new york city, this is bloomberg. ♪
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jonathan: 4600 on the s&p. are you desensitized yet? all-time highs after all-time highs. the federal reserve is going to look at rates. equity futures up, advancing 0.4%. a lift on the russell. a pitch for the bond market. forget tends and look at the front end of the yield curve. september 22, that one was just north of 20 basis points. right now, 50, more than double. the fed meets wednesday, the bank of england on thursday.
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we can discuss that more. but australia, 0-60 in just over a month, a massive move. we will hear from the rba overnight. let us finish on the prude story. 84, a bounce back. will the president get what he wants? he is leaning on opec plus to do more. there is some real doubt in this market. look at the crude, up 0.6%. lisa: we have heard from opec members pushing against the president's assertion that it is a tight market. one of the big questions is, why is opec-plus so reluctant to pump more oil, given the demand in the market, given the fact they could get an easy win diplomatically? >> they are worried about next
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year. a lot of projections have to market much that are supplied in 2022. they are wary and cautious about turning the market around. they are increasing production. that is expected to continue over the coming months. we are putting more into the market, we still think the market is balance. a lot of projections have a much looser market in 2022. let us not overdo things. energy crisis is actually a and coal prices. actually, policymakers are looking in the wrong lace. lisa: to jon's point about the hypocrisy of countries trying to pledge greener futures pleading for more oil, is there more investment? do you foresee a greater pace of
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investment in green technologies? >> we are going to get those green investments. the question is are they going to be fast enough, quick enough to make a difference? the answer is probably no, but people are expecting a significant ramp-up in coal and oil investments are going to be disappointed. the chevron's and exxons are increasing investment of little bit, but they are under pressure from their shareholders not to go too far. the emphasis among investors in big oil has been concentrate on your cash flows, give us back the money, let us not invest too much that is why people are worried you are going to get a mismatched between oil investment. jonathan: you alluded to something a moment ago. you talked about maybe we are
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looking at the wrong thing. you talked about natural gas, maybe that is driving what is happening in crude. when it comes to natural gas, what can these leaders do about it? >> there is a feeling that a lot in the oil market is being driven by this wider energy crunch. if you are short of gas, of coal, what you do is you go and buy a diesel generator and make your own electricity. there is a fear that that is what is making market take this winter. that is why opec argues that is a short-term thing. let us not plug the market now and create a bigger problem next year. the main thing we can do about gas prices is hope that it stays warm. it does see that -- seem that some of the heat has come out of that market. they beat russia will supply more gas. but opec will have little
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control over that situation. kailey: there was conversation around iran and more potential nuclear deal conversations. does not have any real bearing on the oil market at this white? >> it is an interesting question. if we think back to the spring and the period after biden's inauguration, there was hope that we would get a fairly quick deal to bring everyone back into that agreement, which would allow iran to export more oil. that has not happened. it is one thing that has changed supply and demand outlook this year. that is making it tighter than people may have expected if it comes back next year, that is going to be part of the conversation and another reason that opec will be able to argued they should not do too much at this stage, but there is a long way to go.
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lisa: when opec meets later on this week, do you expect we will hear anything out of them that is a change in tone? >> they are coming under sustained diplomatic pressure. we saw that in biden's comments last night. we have seen not through a private diplomatic effort, not just in the u.s. from leading asian importers. they are all worried about prices at this level, inflation, dampening economic growth. opec will be worried about its biggest customers, but so far everything we have seen is one to hold the line. they do not want to get into the pressure. we need to look at the price. opec may be confident enough to say no, but if we see the value
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build, that pressure is growing more intense. opec decisions. jonathan: that president trying to put pressure on opec in rome. following the president, this is what the agenda looks like. the presentation down in edinburgh in the next 10 minutes or so. he will go from there to glasgow, meet with boris johnson and the secretary-general of the u.n.. from there, we will hear from the president and around 9:05. the president is third in line. lisa: i am curious to see how much he pushes back on some of the oil price rises, considering the fact that this is one of the solutions. if people are spending more,
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they won't bite less. a lot of people say that the private market has taken the lead they will look to earnings to see what companies are doing to reduce emissions. how much are you hearing the opposite from big oil? the idea that they are reinvesting and feeling and bolded because of politics recently? >> i think big oil will take a little bit of comfort in terms of what is going on in climate politics. the g 20 statement was not as strong as people would have liked. that gives big oil comfort, because among people who own big oil, even exxon, chevron, they are focused on keeping spending under control and maximizing returns to investors through buybacks and dividends. they are less focused on investing in the long-term, increasing production.
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even if they do not think those companies should be investing in new energy, they want that cash. lisa: does that mean you do not -- kailey: does that mean it will all be buybacks and dividends? >> a lot of that increase will be driven by higher costs. steel is expensive. there will be a natural uplift. will we see a change in paradigm about how management teams approach investment? maybe, but i do not think we are there yet. oil is going to have to go a lot higher before we change up. jonathan: tell jamie that we missed him today. good to see you. will kennedy at the office in london. one thing we have not talked about his late on friday goldman sachs came out with a note on the first hike of the federal reserve.
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the first hike for them, july of next year. the market is already there. economists are starting to move. lisa: there was a data point on friday that i thought was shocking, that changed the conversation. that was the employment cost index. it came out rising at the fastest pace on record. i wonder how much this is going to trigger the fed in a new way, how much it is behind some of the reassessments we are hearing from the market and economists. jonathan: he called the eci alarmingly big. kailey: almost double the expectation. it raises the question of wage pressure. when does that translate to when companies have to raise wages for workers? something more persistent that you cannot say is transitory. is that what is going to create
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usher on central banks? goldman sachs saying by the time and pressure ends, we are going to be looking at 4% inflation. jonathan: this was the reaction from bank of america on the fed decision -- the fed is unlikely to push back on a market pricing until they gather more data to determine risk of inflation. what is the supply-side? lisa: we are going to get the treasury announcement on wednesday as well. the pace of their debt sales are going to go down. jonathan: what a week. his advocacy new to rest ahead of the big week? -- is it because he needed to rest ahead of the big week? he does not sleep. equity futures up 0.4%.
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all-time highs kick off an interesting week. this is bloomberg. ♪ >> jeff daly is out as ceo of berkeley, stepping down in the midst of a british regulatory probe into how he characterized his ties to jeffrey epstein. he says he was made aware of the preliminary friday -- findings on friday evening. heat will be replaced by the head of berkeley's market. more than 5 million people around the world have died from the coronavirus. still, the arrival of vaccines has slashed fatality rates. the latest one million deaths came slower than the previous two. the right has returned to what we saw during the first year of the pandemic.
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the ukip -- france and the u.k. are headed for a full confrontation over fishing rights. the french government is set to introduce additional controls. plus, british fishing bows will be blocked from unloading in france. in japan, fumio kishida avoided the worst case scenario when his government won enough seats to preserve its outright majority. still, the prime minister was left with a smaller margin to push through his policies. global news 24 hours a day on-air and on bloomberg quicktake. powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg.
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>> certain countries have an doing a fantastic job, most of
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the time because they have had the resources to get vaccines, but the vast majority of the world is stuck at the starting line. jonathan: great to hear from dr. andy pekosz. up 20 on the s&p, advancing 0.4 %. yield up. crude just south of 84. love this from the washington post. in an interview aboard the government airplane somewhere over the alps, secretary yellen on sunday said democrats should be willing to approve affixed to the nation's debt ceiling without gop support. subtle shift on a key issue. lisa: i wonder how much this
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indicates a lack of feeling that there is going to be consensus to avoid defaulting. otherwise, why make this subtle shift? jonathan: are we getting votes this week in d.c.? kailey: in theory, tomorrow, lawmakers would like to see votes. but putting that aside, when we think about the debt ceiling, december 3 is the deadline. we have a lot of recess for the house and senate in november. only 13 working days between now and that deadline. that is not a lot of time if you are going to push through reconciliation. your window is getting narrower. jonathan: can't you just cancel the break? kailey: one would think. lisa: --
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jonathan: i am delivering some stark and am then going to pull back. a different experience in the next hour. lisa: i can imagine. the new jonathan ferro. jonathan: joining us now vice dean of the johns hopkins bloomberg school of public health. parents want to know when do we finally get guidance on whether they should vaccinate their kids? >> they have got a good sign from the fda last week, which authorized the pfizer vaccine or kids five to 11. this week, cdc visors will make a recommendation. soon after, i think the vaccine will be made available.
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lisa: very much in focus right now is how we deal with mandates , given the fact that we have the vaccine. it does seem to be the cure, but there is still concern. i am wondering about new york city workers. you have to get a vaccine or you cannot show up to work. a lot of people not coming in it is this the right way to do it? >> it is complicated. my view depends on the type of occupation. there are a number of jobs where people can really make other people sick. health care workers can take their patients sick. that goes for the police, firefighters who are in people's homes. if they are passing covid on, i think it is terrible. it is totally appropriate for there to be a requirement. when you make a requirement like this, you have got a big chunk
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of people who are already vaccinated you have a lot of people who go, ok, i will vaccinated. i was out vaccinating this weekend. a bunch of those people came in. they are not upset. but then you have got people who are hard-core refuses that is difficult. it is difficult if there are a lot of them. we are going to see whether that is disruptive. some of them will get vaccinated if pushed, but it is unpleasant. jonathan: always good to get your thoughts. come back soon and we can talk longer. the nature of covering a conference is you are sitting there and someone drops by for an interview, may be unexpected. we have eight fantastic guest coming up with francine lacqua in scotland. francine: we are joined by mark
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carney, looking at finance. also former bank of england governor. cop26 starts today. that g20 was a dull drum. we did not get the pledges people were hoping for. mark: i am going to quote the secretary general. hopes unfulfilled but not yet. . the 1.5 degrees anchor is significant. big russian fork this wednesday is what can -- the big question fork this wednesday is what can the financial sector do to solve this problem? francine: we do not even have a price on carbon yet. mark: we do not, but our message on wednesday to world leaders is
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that finance is going to be there. we have retold the financial system, a bunch of forms -- reforms that only the audience of bloomberg would understand and appreciate -- mandatory exposure, stress testing. but it is also about financial institutions saying they are going to finance this transition, this enormous transition that needs to happen over the next three decades, and they are going to mark their own homework. have specific strategies for reducing carbon, that is what the glasgow financial alliance is about. francine: white not stop putting money into fossil fuels full stop instead of the transition? mark: we have too many fossil
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fuels. we are going to have enormous stranded assets. but we also have local short-term shortages of some of those exact notarial spirit in the u.k., there is a shortage of gas. there needs to be only some financing of transition, which is white you need things that are relentlessly focused on that transition, the 1.5 transition. francine: g20 leaders did not stop whole being used domestically. -- coal being used domestically. mark: there are advanced economies and developing economies. there is a different timeline
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for fully ending coal. we want to stop using coal by 20 30 in the advanced economies. by the end of the next decade, in the developing world. to bring it back to finance, to give them the confidence to do that, they needed to see money available for the transition. francine: who can do better, the asset managers or the big banks? mark: what we are going to reveal on wednesday is who is doing the best. it is a $100 trillion problem. the question is who is stepping up? the asset owners? the big pension funds? stepping up with these commitments. francine: how much stress is there among asset managers?
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mark: there is some stress. it is not great that it happens, but it is great that there is that scrutiny. there is that healthy skepticism about esg labels, sustainable labels. that is one of the reasons we are having this relentless focus on net zero. we cannot stabilize the climate unless we get to net zero. these are hard numbers. if emissions are going down, are they going down consistently in a way anchored in science? francine: you don't have regulators coming in saying, this is the new definition. mark: great question. six years ago, you and i were in paris. we talked. now it is moving to become compulsory.
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net zero disclosure, moving back to compulsory, absolutely. we have a couple year window where best practices developed by the private sector on what information stakeholders need to make those judgments. then, major jurisdictions should take from compulsory. francine: we are at a crossroads because of the energy prices and inflationary pressures. does it worry you? mark: if i were a policymaker, one of the opportunities to turn -- the easy bit of the recovery has been reopening our economy. now we need to sustain an expansion. we are only going to do that with investment. balance sheets art in good shape if you have direction toward net zero.
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that $100 trillion figure that i mentioned has huge positive gdp multipliers. that is the opportunity to turn recovery into expansion. francine: if there is a taper tantrum, what does that mean for product appetite? mark: when you look for where to be in financial markets given the situation -- there is an adjustment going on. i would rather have this rather than flipping back to the liquidity trap. now that global rates are moving up, real interest rates are moving up because we are getting the investment and returns that we need. that's the recovery. frne: we are having a time tantrum but i will get you back on. this is bloomberg. ♪
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>> what we are seeing as just a reflection of continued uncertainty in the economy. >> the actual earnings and guidance -- >> we will stay in a positive environment for equities. >> this bond market isn't telling us disaster is ahead. >> i think there is probably more pressure to come. >> this is "bloomberg surveillance." jonathan: what a week we've got coming up for you. for our audience worldwide, good morning. this is "bloomberg surveillance," live on tv and radio. your equity market has a lift, a bid come up another one half of 1%. lisa: i find it amazing that the market is pricing in two rate hikes next year. this is a huge repricing and we

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