tv Bloomberg Surveillance Bloomberg December 31, 2021 7:00am-8:00am EST
♪ >> we are going to have a very volatile year ahead of us. >> we will not see a repeat of what we had in the last two years. >> the volatility has essentially already gotten used to this new normal. >> we are back to the slow growth, sort of high inflation era that we were in pre-pandemic. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: from berlin -- matt: from berlin, new york, and london, this is "bloomberg surveillance ," live on bloomberg television, on bloomberg radio. you can stream us on the internet. you can probably get us in smoke signals. i'm matt miller, alongside kriti gupta and dani burger.
happy birthday, jon ferro. i hope you are sleeping still. in terms of the markets, you might as well be asleep. we don't really see much going on. for me and dani, it is almost over. in the u.s. you haven't opened yet, and it looks like you will open down. kriti: it is just getting started, so what is the word i am looking for? i am translating it in my head from what mom would tell me. don't jinx it. what is interesting to me, the vix is actually higher. we are looking at an 18 handle. i wonder if it is going to increase as we start to see a selloff. people getting rid of the positions that they do have in the market going into the last day of 2021. dani: maybe a little bit of year-end repositioning. i've got another terminal function to throughout for
you. this really encapsulates just how little people are trading today. currently, the composite volume on the stoxx 600 is $1.6 billion. typically at this time of day, it is 14 times that amount. everyone rightfully at home seller breading jon ferro's birthday. matt: exactly, and the end of 2021. thank goodness we are ending this year. andy pekosz was telling us this is the unofficial two-year anniversary of the beginning of covid. this is when the world was first made aware on the internet on the first case out of wuhan. so it feels like it has been more like 15 or 16 years, but i guess it has only been 24 months since the first case we were aware of.
let's talk about what we've got coming up on this program. i sent michael purves is waiting in the wings somewhere. equity research analysts at raymond james, denton about of oliver wyman. even if the markets aren't moving that much, we still have a lot to talk to you about, and we are glad if you have joined us here on bloomberg television in bloomberg radio. the markets. didn't we just go through this? the s&p futures are down 13 points. you're right now unchanged at 1.13 sub -- at 1.131 six. the only interesting move i can see, because the s&p futures, volume is still light, but nymex crude down 1.5%. it is not a huge drop, but i
have been looking at nymex and brent this month and thinking, even if you have concerns about inflation, even if you are worried about omicron, this is an indication that mr. market still expects economic demand to remain strong. kriti: the best take on whether growth is happening or not really tied to that gasoline consumption in the united states , the consumption in china and india as well. the big question is how much was happening in the oil market as a function of what is happening with the european gas crisis, and how much geopolitics with russia is being factored into the price of what you are seeing in nymex and brent crude. dani: i am so glad you mentioned that because i think that is the one exciting market today. it is on track for its biggest drop ever in a week. it is down some 24% dutch front month futures. it is a boring market may be, but it is still exciting when it comes to natural gas. matt: it is not boring at all.
it is super exciting. thanks for joining us on bloomberg television radio. didn't you point out, we saw the dutch contracts down 13%. didn't you showed u.s. nat gas up? dani: it is up. the concern in europe has to do with supply. more lng shippers now helping to curb record high prices we have seen. but in the u.s., it is about cold weather. it is lot of the midwest that is particularly cold, so that means we are on track for nat gas to have its biggest rise in a year since 2016, so i hope you are prepared for your u.s. move with lots of parkas and blankets. matt: i am looking forward to it. kriti: he's loading up. matt: actually, i am wearing khakis and a blazer today. all week, i'm not wearing a full suit. that is my own personal protest. michael purves joins us, ceo of
tallbacken capital advisors. for all we know, he might not be wearing pants, but i am pretty sure he is. michael, how are you doing? thank you so much for joining us. happy new year's eve to you. what do you make of this? it has been an incredible year for people long equities, up 28% , and the third year in array of big double-digit gains. can this continue? michael: i actually think it can. there's an instinctive national suspicion that you can't get four double-digit years in the s&p 500 in a row. it is just not supposed to happen. while i appreciate that sort of instinctive concern, my price target for next year is 5500, up another 15% from where we are now.
this year i was among the highest for the year-end at 4250 from a month ago, and i upgraded that in july. here we are at almost 4800. the arithmetic of the probabilities for me spell out a pretty obvious way the 10-year is kind of range bound. you are looking at nominal gdp next year in the united states of 7% to 8%, just based on bloomberg consensus forecasts. and potentially some international gdp that will actually recover if and when the virus continues to fade that will reinforce the international s&p earnings.
so i guess my argument is why should 2022 be any different from 2021? sure, it will not be as exciting in terms of the explosion in earnings growth, but the nominal gdp picture is very strong. you got big tech entering some of the index. matt: by the way, what is your earnings expectation? michael: for next year, it is 240. matt: still strong. kriti: let's go from the earnings and then the metals to the volatility picture because we have to tie -- because we have a tie on the vix handle. january is a volatile months. what you expecting on that front? michael: the vix this entire year has been very robust.
if you look at high-yield credit spreads for example, they plummeted after the initial shock of covid in the spring of 2020. they kind of led the vix down. you can measure it on the spread of implied volatility to realize volatility or tail skew and all of those different metrics within the s&p options universe, and they have all been saying, sort of reflecting tension and some anxiety, and that's one of the reasons why the dips throughout this year have been 5% to 6% and not 15%. the market has been pretty well insured coming into this. that is a very healthy factor and one of the reasons why i continue to be bullish next year, because it seems like this year, it refuses to just drop down to that 13%, 14% level.
i don't think we have had a close their despite a really must march higher. so that is very healthy for the s&p 500. i have been opportunistically putting on some sort volatility traits. if you have to sort of pick your spots there. matt: didn't you close? michael: i did, but that trade wasn't like a fantastic 2017 style short call volatility trade. but that is one of the reasons why detention was in the vix world, one of the reasons why the s&p keeps real it loosely higher here. matt: michael, i've got to cut you off. i can hear the dog in the background barking. i think your cows have gotten out. michael purves coming to us
there from spain, one of my favorite places in the world. absolutely love the area there in a story a -- in astoria. wish the best for you and the whole family. michael purves from tallbacken capital. coming, christina hooper, chief global market strategist at invesco, joins us to give us her take on 2022 after a bullish michael purves. this is bloomberg. ♪ >> let's get to the first word news. crimmins has russian president vladimir putin is satisfied with the outcome of talks with joe
biden. the phone conversation set the stage for three sets of negotiations on european security next month. the white house says president biden urged putin to de-escalate tensions with ukraine. the president warned the u.s. and allies will respond decisively if russia invades. the omicron variant is hitting some grim records. for the first time, the number of new daily covid cases reported to over 2 million. it was the fourth day in a row of more than one million cases, and that was a record reached earlier in the week. more fallout from the surge in covid cases. one of wall street's staunchest advocates of returning to the office is offering employees the option of working from home at the start of the year. jp morgan says it is not changing its long-term plans, but it will allow more flexibility during the first two weeks of january. citi has asked employees to work from home for a few weeks if they are able to do so. the celebrations have already begun around the globe. they are ringing in the new year in new zealand forget they have
done it with a spectacular light show at midnight in the city of auckland. the traditional fireworks show was canceled due to the risk of coronavirus among the crowd who were expected to attend. some really beautiful pictures thereof that fireworks. 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. we will continue to have your new year's updates as more cities enter 2022. i'm dani burger. this is bloomberg. ♪
behavior change, wage bargaining behavior change, consumption behavior change. so what is different this time around is that inflation is changing behaviors, and the fed has to be sensitive to that. matt: that was mohamed el-erian, bloomberg opinion columnist and queens college cambridge president, speaking yesterday to jonathan ferro, whose birthday is today. happy birthday, jon ferro. can't wait to get back home. i am flying home a week from today, moving back to new york from cold and gray berlin, although obviously the temperature difference isn't that big. the market difference is big. we are closed today in germany. the germans have decided because it is new year's eve, why send people to work today? take the day off. tomorrow, new year's day, is on a saturday, so they give you the day off on a friday.
not the case in the u.s. i spend a lot of time on the floor of the new york stock exchange, and they're pretty severe when it comes to their approach to trading days off. they do not like to cut days out of the schedule. right now we are looking at the s&p 500 actually down. it would've been better for those long equities may be if they had said don't worry about it, but it is in the rulebook. jon actually found it and read the rule yesterday. you can't have the last day of the year off. s&p 4761, futures done 11. euro-dollar unchanged. 10 year yield unchanged. nymex crude down one .5%. kriti gupta, who you just heard in new york city, has pointed out all morning it is very low volume. what are you seeing? kriti: making all these comments on the sideline, the peanut
gallery, basically. we are ending 2021 on a very different notes than when we started get this was supposed to be the year we would see this massive recovery trade. energy was going to boom. it wasn't going to be a text driven year. at the end of the year, it became a tech driven year, especially in the last six months. matt: it has been fascinating to watch. the gains have been monstrous, especially if you are in index investor. 2022 might be different. dani burger is with us out of london. i've heard a lot of people say 2022 is a stock picker's year. dani: don't say it. i am so tired of that phrase. we always say there is going to be more volatility, there's going to be more divergence between equities, but it kind of never happens. it is always staying in holding indexes performs better. but this month, equal weighted etf's have outperformed the
broad market cap type etf's, so maybe there is hope that recoveries, stock gains will be more broad-based, not just concentrated on those technology names. kriti: this really brings to the question of airlines, for example. that was the volatility trade of the first couple of months of the year, and now they are declining a little bit. you are not seeing continued momentum they sought the start of the year. matt: since you mention that, let's bring in an equity research analyst at raymond james. she is focusing on what is going on with the airlines for us. thanks so much for your time out of nashville, tennessee. i can't wait until i live closer and can drive down to places like that. what are we to expect in terms of the airlines? we have seen thousands and thousands of cancellations. i am scheduled to fly out of
possibly the worst airport in the world into you new york city a week from today. what are the chances i make that flight? guest: i think it is good, and i wish you good luck. clearly, the airlines are having a lot more trouble this year because of omicron. you have a high level of vaccination among airline employees, and yet i think the absenteeism is higher than you would've expect it otherwise which is catching them by surprise at a time when you are also having some winter weather issues across the u.s.. the actual cancellations are around 5% to 6% for u.s. airlines, especially as you get into next week, we have resetting. airline crews have a certain amount of time that can fly during the month, and that gets to a critical point at the end of the month.
so early next month, i think some of those tight staffing issues will have alleviated, not to mention peak periods are starting to wane down as you get past the first week of january. dani: still, it does seem what the issues for airlines stack up. you already have people waiting last minute to book because they are concerned about restrictions. now you add onto that cancellations because of staff shortages. just how difficult operationally has this period been and will be for airlines? savanthi: it is a good question. this has been a downturn like no other, and there has not been any good rulebook. airlines learn a lot from history and really fine tune their operations. last year there was no demand. this year it has suddenly gone from zero to 60, mostly on leisure and seeing friends and relatives. with covid, it just adds this
extra level of uncertainty with employees, and what does this do demand as people see at a not want to deal with it? there still seems to be a strong desire to travel, to meet. i think it is going to be choppy, and some of the cdc rule changes will help now that the quarantine periods are little bit lower. it has definitely been challenging from a demand standpoint, from an operations standpoint. we see it improving in 2022 as we have a better handle on covid and we have more therapeutics on the market. i think things will start to improve. dani: talk to us a little bit about the bottom line -- kriti: talk to us a little but about the bottom line. how much of the travel resurgence hasn't actually helped perhaps how much these airlines are raking in?
savanthi: the u.s. airlines, the government support has ended, and they are in better footing. they are getting close to profitable. i didn't the big thing for airlines will be the recovery in business demand. i think they have at least the opportunity to build their cash levels, versus much of last year, they were burning cash. so i think you had earlier jp morgan pushing back a return to office. i think you need to have a return to office and returned to business travel so these offices can get into a stronger fitted -- stronger footing from a profitability standpoint. i think we will see that into the first and second corner of next year. matt: thank you. coming up, the co-chief
dani: this is "bloomberg surveillance," live on bloomberg and television. matt miller, kriti gupta, and dani burger in for jon, tom, and lisa. i hear it is someone's birthday. matt: happy birthday, jon. dani: i just want markets to be calm because i would rather picking up a bottle of bubbly i will be drinking later, but there are some interesting moves shaping up today. volumes are very light. i would point out that in this u.s. futures session, we are seeing some underperformance from russell 2000 futures. when we see this, it is down 0.3%. some concern about the smaller cap, the more cyclical type stocks. of course, as the year ends,
sometimes that is some windowdressing moves, but what does this mean as we head into 2022 about whether the big cap tech stocks and continue to succeed? s&p 500 and nasdaq futures up 0.1%. some more sanguine moves in the bond market space. we are seeing a little bit of buying. 10-year gilts, 30 you yields -- 30 year yields lower by one basis point. unfortunately, not ending the year on that nice round number, but still both the 10 year and 30 year yields hovering around their 50 day moving average. we saw some selling to start the week, so perhaps it is logical to end the week with some buying. another asset that has been moving back and forth, little bit of choppiness today, is the euro-dollar. dollar on track for its best year since 2015. given that we are seeing this policy divergence from the fed versus the ecb, we are seeing the euro trying to put up some gains today, but not exactly doing so. it is up less than zero point --
less than half of 0.1%. what about some of the biggest movers when it comes to individual equities? kriti: we can't forget about the stock market. yesterday, romaine bostick asked me what was the best performing stock on the s&p 500 this year, and i failed that quiz miserably . this is where we have devon energy, your biggest percentage gainer for this year, a whopping 176% your to date. it is not alone. marathon oil is in second place, 145% increase. this has everything to do with that recovery rally, this kind of rebound in the commodity space and oil prices. we are talking about oil potentially heading $150. the best kind of benefactors from that are going to be your u.s. shale players, especially those that are very exposed to what is going on, particularly in drilling in the south. it has nothing to do necessarily with macro.
we are talking about the omicron variant. more of the woes coming from that casino battle, sports gambling state-by-state. you have seen a lot of volatility in that stock, but that has not and what it is the index contributors. it is still big tech leading those gains. for that, i really want to look at apple. those have been gaining quite a bit and pushing the index to those record highs. we are seeing apple as a proxy for microsoft, alphabet, nvidia, but tesla, which we are now also calling a big tech name, has performed well, 52%. one of the top contributors for the s&p 500. that has everything to do with the ev boom. you are seeing it with ford, with gm. they are changing the dynamic, and it is showing up in the stock market. paypal actually drag the index, 18% decline on the s&p 500 year
to date. a lot of that has to do with the crypto exposure, the idea that they have accepted crypto as a payment. therefore, when you see bitcoin volatility, paypal tends to get exposed to that. lastly, disney. used to call this the best of both worlds. turns out, it did not help either way. you saw them being about a 14% weight on the index. matt: isn't -- just the auto bs and automatic -- the obvious and automatic choice? dani: i think for new year's you pull out the dom, obviously. matt: heavy hitter. thank you very much for that. i want to get over to the co-chief investment officer at invest net, joining us very graciously on this new year's eve day. thank you so much for your time. really appreciate it. let me first ask you, even though we should be in a celebratory mood, if you are
worried about inflation in 2022. we had two guests so far in the last hour tell us they think we could see more than 7% in the first quarter. guest: i think inflation is probably the biggest concern for markets into 2022. it is not to say we will not see a taper, but it is considerably higher than where we thought we would be, even given the reflation trade in 2021. there are signs now that omicron and the variants in general are going to create potential to supply chain issues ongoing. i don't think we have the same lockdown issues we had potentially at the beginning of this pandemic, but we still have the prospect of covid disrupting supply chains and price increases to continue. i do think this concern is going to be with us for a bit. matt: the fiscal spending that helps us in 2020 and 2021, does
that still have a big effect on 2022? i know a lot of government programs take time to get up and running. are we going to see a boost from that next year? dana: it is a great question. i think the anticipation is that we will, but unfortunately, most of the time with these infrastructure programs, it takes a while for the money to seep in. the tax increases, those are immediate, so if we get build back better and there are tax increases, and that is a big if, as we all know, tax increases 10 to hit quickly. and for searcher and spending increases is a longer-term prospect. so i don't see that helping us do much next year when we have a big fiscal drop-off related to the spending we have this year, just related to covid and to helping the economy reopen. so we are seeing a fiscal drop-off next year as we head into 2022, likely lower growth, probably more volatility, but that is to be expected.
you would not expect higher growth. kriti: you are talking about this this go spending drop-off. i am curious about the savings rate because at the be good the pandemic, you saw the savings rate skyrocket even higher than what we saw in the great depression when everyone was hoarding their cash in their mattresses. now you are seeing the savings rate come back to 2019 levels. how much of that impacts the money not only in terms of spending, but how much goes into the stock market? dana: it is actually showing more in the unemployment numbers. we had a push for a very long time. the savings rate increased dramatically. it looked like people were stashing away, recognizing that the rainy day could be here for a while. what we have seen happen is that the savings have dropped off of that -- dropped off a bit, and the expedition is that as that happens, we will get more people back into the labor market, and that will be good for the stock market. so if we can recover some of the jobs, we are still down from
where we were in terms of employment, and we have all seen the signs. everyone looking for workers and unable to get them, so hopefully we can get out of the pandemic. omicron looks like it might still be dangerous, but potentially more manageable, and helping people get back to the labor market, and that is good for stocks. dani: you talk about managers rebalancing into defensive stocks, and these days contact counts -- these days, tech counts as a defensive stock. can it to as we see more regulatory scrutiny? dana: it has been very interesting throughout the course of the pandemic. the hospitalization rates have predicted lot of things for markets, to a certain extent. of them is sector performance. it is really highly correlated with tech, so tech really became defensive during the pandemic more so even then it was.
i think that probably continues to a certain extent, and large caps for his small caps, value versus growth, growth stocks, large-cap stocks, those are doing well when we had increased hospitalizations and increased positivity rates. do i expect that to continue into 2022? probably to a certain extent, yes. it is the stay-at-home trade versus the reopening of the economy trade. that being said, i am a proponent of the inflation trade. i think past the surge we have had from omicron, we are seeing evidence that perhaps it is not as lethal as other variants, you can get back to that reopening trade and cyclical value stocks can do well. matt: dana, thanks very much for your time. really appreciate it, and happy new year to you and your family. dana d'-- dana d'auria there of
hong kong is becoming increasingly shut off from the outside world because of its strict coronavirus policies. the city has imposed a number of flight bands and airlines such as cathay pacific have been slashing inbound services. hong kong reported his first community spread of covid in nearly seven months. it may be linked to an aircrew member. in the u.k., boris johnson's government said every adult in england has had the chance to receive a vaccine booster. it is a critical part of the strategy for tackling the omicron variant. still, the caseload is soaring, which is putting pressure on hospitals. british consumer spending rose 5.9% this year over pre-pandemic levels are yet the increase was driven by a shift towards experiences at home, spending on takeaways in fast food row 62% in 2021 area spending on digital subscriptions was up 47%. the fourth quarter is turning
out to be a good one for exxon mobil. the company says higher crude oil and natural gas prices boosted quarterly results by as much as $1.9 billion. shares of exxon are up 47% this year, and they are on track for their best annual performance in at least 40 years. the top airline trade group in the u.s. has filed an emergency request for delay in the rollout of a new 5g wireless service near airports. airlines for america says the 5g airwaves could interfere with aircraft equipment and are shipped flights. the wireless companies say they will rule up -- they will rollout the new service in the coming months. and the celebrations have already begun around the globe, ringing in the new year. new zealand did a spectacular light show at midnight in the city of auckland. the traditional fireworks show was canceled due to the risk of covid among the crowds who were expected to attend. for our radio listeners, we are
now showing pictures of that celebration in auckland. or to come around the world, even though we have seen a lot of cancellations, and as we get closer to the end of this hour, we continue to look at equities falling. we are looking at premarket trading for the u.s. down by about 0.2% for s&p futures. it is a flat euro-dollar, as we have seen dollar dominance really dictate the pace of currency so far this year. your 10 year yield back above 1.5%, no above its 50 day average, and nymex crude fallen nearly 2%, still on track for its best year since 2008. 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 dani burger. this is bloomberg. ♪
1987, as well as the other crises you mentioned, so the fact that we have come down to pre-pandemic levels within the last two years compared to all the other situations where it took four to five years to normalize tells you how resilient the market has been overall. matt: that was amy wu silverman, rbc capital markets equit -- equity derivatives strategist, breaking down the moves in volatility this year. let's take a look. today, not really seeing much of a volatile trade, even with light volume. s&p futures now down five. euro-dollar unchanged at 1.1333. can your unchanged as well, 1.50 15%. -- 10 year unchanged as well, 1.5015%.
not a heck of a lot of movement. not a big surprise as we have most markets closed. in fact, i think the ftse is now closed in london. we are seeing france, belgium, and dutch markets closing at about 10 minutes. the u.s. not quite open yet, but kriti gupta is there preparing for the open, and she's got a chart of the day on this new year's eve day. kriti: i'm wide awake. i've had about three cups of coffee, so let's do this. this chart i am looking at is a fairly vanilla chart, but i think it is really important to talk about. the s&p value index versus the s&p 500 growth index in the 21st century. a quick history lesson here. no you don't like dates, so i won't throw a ton at you. essentially, what you need to know is this kind of goes into this massive selloff that you saw when it came to the ipo
bubble at the start of 21st century into thousand, and you saw this growth play that came about from that, starting in about 2007. since then, you have these calls that say some of those airlines, the commodity sector, those value trades come of those really industrial trades, they are going to make a comeback. it has been about 15 years, and they haven't really done that. one of the big questions coming into 21 was is this the year for that relationship to finally turn around, for the line to finally go up when comparing value to growth. right now we are ending the year, and we haven't really seen that, so i wonder if it will turn around in 22. -- in 2022. dani: i have been following it too because i love to cover the quants, and a lot of the value type quants continue to say they
are hoping value comes back, but i do have to wonder, can we really forecast how you coming back as often as it relies on a cyclical uptick? we have talked to so many people who say this is not a normal market cycle anymore. we can't really discern whether we are late cycle or early cycle, so what does value do in that environment? matt: i am following it very closely also. for the past 20 years, but really the last decade, it will be interesting to see if we do get a turnaround. someone else who follows this closely that you both know quite well, daniel curtis is a bloomberg producer, a star producer and olympic level rohwer who recently moved -- level rower who recently moved to london to work for us on queen victoria street. look at what he just got. what an awesome new year's eve present. matt: -- kriti: baby curtis.
we are waiting to hear the details. for now, we are very happy, and for the folks in new york, we are very jealous of dani burger, who has dan curtis in the office. not cool. dani: i am very lucky. for our radio audience, you does need to know that we have an adorable picture of little baby girl on the screen. i think she has raccoons or bears or something. his baby curtis trying to send us a signal of what is to come for equity markets next year? kriti: now we know. matt: i am, regardless of what happens, we are happy that baby curtis is healthy. i hope dan gets to spend some time at home. it is so important. i did it when i had it. take some time off, be with that baby come up on that baby, and really start off making an impact in that baby's life. when he comes back, i am excited to get a morning chart note in
the european hours. that is the cool thing about dan curtis in london. kriti: i think there might be some bloomberg branded mini rowing oars on the way for the baby. matt: i wonder, is that the real reason he moved to london? is rowing a bigger deal in the u.k. then it is in the u.s.? because i know he spent a lot of time at the new york athletic club in their pelham area, in the water, on the oars. what is the big race they have? kriti: the regatta? dani: henley. matt: henley on the thames or something. dani: kriti and i both went to university of virginia, which does have an excellent crew and rowing team, but i have never watched a single race until i moved to london and watched the henley regatta. kriti: and now we know, folks. dani: it was very cool.
kriti: was it fox field or henley? what was the better experience? dani: one i remember more than the other, that is probably all i will go into. fox field is the horse races that occur at uva. that is your who knowledge of the day. matt: ascot is one i also remember. let's say congratulations to dan curtis, his wife and his now two little children. we wish him the best health and happiness on this new year's eve , and we are glad to welcome one more member of the bloomberg family. in terms of the markets right now, you are looking at very little change, as you might have expected. very little volume, as we have been telling you all week. of course, most civilized
nations offer this day up as a holiday. in the u.s., i have no idea. i do know why. apparently if a holiday falls on a saturday or sunday, according to the new york stock exchange rules, you get the friday or the monday off, unless it is the last day of a quarter or a year, and since this is both, that is why the new york stock exchange isn't getting off. do they have it often sydney? let's ask -- it off in a sydney? let's ask our managing director brad hobson. kriti: i think they are gearing up to do some fireworks. i have been waiting for two hours to jump in because it is not just jon ferro's birthday. it is also gymnast gabby douglas's birthday and diane von furstenberg's birthday as well, so let's wish them also a very happy birthday today. matt: so kind of you to look that up and share that knowledge
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>> the fed has pivoted, but it hasn't really done anything. >> the covid stock itself was narrow and severe, and the policy effect wasn't readily widespread. >> there is some modification of what the fed can do given where these pressures are coming from. >> what the long-term treasury yields are telling us is that the fed can't hike that much. >> we are heading towards a midcycle slow down for 2023. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. [fireworks] ♪