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tv   Bloomberg Surveillance  Bloomberg  January 31, 2022 6:00am-7:00am EST

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been. >> haven't we tightened enough? >> i think it is a bumpy ride. >> this is bloomberg surveillance with tom keene, jonathan ferro, and lisa abramowicz. jonathan: this is bloomberg surveillance live. along with tom keene and lisa abramowicz, i'm jonathan ferro. tom: it is a bit of a jumble here on the monday. you and jerome powell get a log of economic data by 8:35 friday. jonathan: let's push ahead to payrolls this friday and look at the range of estimates. -400000 is the bottom.
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they're looking for a contraction on payrolls of 150,000. tom: we have the apple report this week. we have amazon, which may be a bellwether. it is just a jumble, and we need to see data. jonathan: in the near term, the hope is that we see some weakness. lisa: we have to look at the data. if bank of america is expecting a contraction into still expecting the fed to hike rates seven times, which actually matters? it seems like it is focused on short-term inflation. jonathan: over the weekend,
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goldman sachs laid out a runway to give us a full understanding of what negative real rates mean for this equity market. lisa: david kostin came out and said it would be a 60 point move. this has been the trajectory of a lot of analysts' notes. jonathan: where are we in sports? [laughter] tom: the gloom therefrom lisa was like the gloom of the kansas city chiefs. jonathan: those overtime rules, tom -- what are they about? tom: if we do not have 60 minutes we will turn into a pumpkin. i think they ought to play an
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entire quarter. i do agree the roles and the flip of the coin seem so determinative. jonathan: lisa has something to say on tom brady. we are down a little more than a 10th of 1%. it has been ugly for the nasdaq. we are positive by 4/10 of 1%. 178 56. lisa: we have an incredible amount of data. amazon reporting earnings, which will make a difference? the reason why i am particularly interested in this interview is
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to see whether she echoes the words of the atlanta president. successive meetings makes sense. i will be comfortable with that. any analysts came on and said -- many analysts came on and said -- the reason i find this interesting is because you can see the participation rate has gone down and stayed there since the start of the pandemic. there has been a wave of retirements. pushing people back into the labor market and giving us full intel on how employed the united states really is. we may be providing europe with
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liquid natural gas. this is what president biden said he wanted to do. jonathan: crude today, 91.40. wbti 87.60. tom: you get to $100 oil on washington's birthday. that is how fast to this trend is moving. they have monthly ramped up 14.1%. i don't know where that number came from but whether it is 8% or 9% or 14.1%, wages are not going up that fast.
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jonathan: let's talk to russ koesterich. what is the base case based on? russ: the base case is simple. we are in an economy that is slowing. gdp plus inflation are going to be 7% this year. you will have a stronger year for earnings growth than is currently discounted. you may get multiple compression but unless they tighten more aggressively than we think you are not going to have so much multiple compression that it overtakes the earnings growth. it is still a year where stocks are positive. tom: as we saw from apple, how
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does blackrock value these tech behemoths benefiting tons of money? russ: this is part of the bold case that you have companies like apple that are cash machines. they are growing their cash flow at an unbelievable rate. this is where dislocations create opportunities. we know a lot of the names that will not have earnings for decades were hit. you have companies like apple who take any other name within that big tech large-cap universe, these are not companies where you are looking at cash flow in 10 years. it is generating tremendous cash
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flow in real time. lisa: when do you know it is time to deploy cash? russ: cash is not about trying to time the market. we are running with a high cash balance as well. cash along with a long dollar position has become one of your wrist commit agains -- risk mitigants. jonathan: before you go, friday a lot of people are expecting a negative one. how will we internalize that when the number drops? russ: there is still some noise
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in this print. numbers around the holidays have been off. i would not based too much on one print. jonathan: inc. you very much. that -- thank you very much. that could be interesting. lisa: the fact that the people expecting a negative print or not the people who are the least aggressive with their expectations for the fed -- how much of this will be about data that is high-frequency? jonathan: you have this pack of 5, jp morgan, wells, not all of
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those calls. are equal they think you hike, hike, hike into then stop in july. -- and then stop. in july tom: why can't they say " we are ridiculously high. we are going to go up 50 beeps." phd is tell me, tom, that is not how it works. jonathan:jonathan: what i heard in that issue of financial times is similar to what we heard from lisa: jerome powell lisa:. -- we heard from jerome powell.
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lisa: the fact that they have not taken it off the table is interesting. it is not going to happen. jonathan: they have not taken 100 basis points off the table either. it is the media question du jour. it is not like last time around. tom: how did you do during the blizzard? jonathan: how did i do? i've seen the snow before, t.k. i went for an alpine trek along canal street. counting down to payrolls friday, this is bloomberg. ♪ >> u.s. senators are close to
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agreeing on a russian sanctions bill according to bob menendez. the measure could include penalties even if vladimir putin does not venture into ukraine. north korea has added to the largest missile tests since kim jong-un took power. according to a japanese spokesman, the missile landed outside of japan's security zone. bostick said his prediction that the most likely scenario is three quarter-point increases this year. in china the manufacturing
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sector is losing steam. a seasonal slowdown, covert outbreaks and a decline in the housing market. in pro football it will be the cincinnati bengals versus the los angeles rams in the super bowl. the bangles -- bengals came back to win a spot in the super bowl. powered by more than 2700 journalists and analysts in more than 120 countries, i'm ritika gupta. this is bloomberg. ♪
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>> we have been nothing but clear and transparent about our concerns over this rapid buildup on the order with ukraine and belarus. what we said is that he has a lot of options available to him if he wants to further invade ukraine. jonathan: that was john kirby speaking to fox news over the weekend. i'm jonathan ferro. your equities market is negative. the s&p down about 7%.
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you have to go back to march 2020 do have a month as bad as the month of january 2022. getting some headlines from the financial times -- the u.s. has drawn up sanctions targeting vladimir putin's inner circle and their ties to the west. tom: what an odd, clumsy weekend in international relations. away from the thinking about it at 60,000 feet was the almost panic about it nation to nation. jonathan: a tough time for the administration. the ukrainians want to play down
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-- it down but at the same time they are asking for aid. tom: my head is spinning,, annmarie. how bad is president biden's head spinning? annmarie: a republican and democrat went on to fox news and outlined what the senate is drying up in terms of -- tom: he is going -- is there an actual plan to assist europe with oil, with natural gas and other fuels? annmarie: that is what they are
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working on. they would be potentially one of the sources. a lot of these natural gas suppliers -- and it is not just carter, but one of the issues is these contracts are already being fulfilled, many of them by asia. we saw the during fukushima some energy meant to go to europe was diverted to japan. if this was to happen, it would only be if it had to happen. it would be a band-aid. you can only do this for a matter of weeks, maybe months.
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lisa: given the fact that the white house has not come out with a position whether to impose these in the near term -- annmarie: i was strong that senator menendez and senator risch had -- what they said in the interview about that they had the interview together. that showed a tremendous amount of cohesion. the one sticking point i got out of that interview is there is still some debate over what to do about nord stream 2. when it comes to sanctions, we have not seen the administration forthright give their blessing to this package. they said they would be harsh.
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today they are talking about the inner circle. it is obvious they weren't to develop a harsh sanctions package against russia. lisa: there is concerned that once you let this out of the bag , what else do have? annmarie: that is part of the conversation republicans and democrats are having. there will be immediate sanctions on issues that have already happened, that russia has heard already against ukraine -- incurred already against ukraine. the second tier would be what is to come.
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this would be incredibly harsh on the financial sector. jonathan: by now you are all familiar with the allegations of role breaking by the prime minister's -- rule breaking by the prime minister's office. we understand the prime minister will make a statement to the parliament a little later. tom: it is so silly. i cannot concentrate on it jonathan:. -- i cannot concentrate on it. jonathan: there are two investigations. it will be interesting to see today how much of that investigation is released to the
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public given there is an ongoing police probe. if you get 2.2 and -- get to point two and determined that the per minister lied to parliament, that -- prime minister lied to parliament, that is huge. lisa: if you look at predict it, which is a betting market, there is a question -- " will prime minister boris johnson remain prime minister to remain through may?"
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the best that is on " yes." jonathan: future is down 2/10 on the s&p. from new york, this is bloomberg. ♪
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jonathan: we are almost there, almost closing out a brutal month for many of you in the equity market. we are down about seven percentage points. the worst month probably of the pandemic going back to march 202 0. do you -- do you want to play the hot rate hike game? let's do that now. wells fargo -- who am i
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missing? when you break down these calls, it is not just about who has 4, who has five, of those who have 5 is at the same as the other -- it the same as the other 5? it will be interesting to see how this plays out in the bond market. tom: with data the way it is, they will turn on a dime. i do not inc. this will be an evolving thing. it is going to -- think this will be an evolving thing. how do you get into rate sequential game with sub 2%?
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jonathan: real gdpjonathan: j.p. morgan was the first one -- sub 2% real gdp? jonathan: j.p. morgan was the fifth the one. -- the fifth one. a tenths of 1% on brennan. -- 8/10 of 1% on brennan. tom: very much associated with looking at the broader picture and the global view. we know her for her work at the mckenzie group. susan, if you are writing for
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mckinsey global institute right now what would you say about the growth trajectory given the growth of em countries? susan: we are seeing really pernicious supply chain disruptions and the resurgence of omicron that is shutting down parts of the global economy. more importantly as -- this is a really uneven recovery. 70% of the emerging markets are not going to recover. we have erased almost a decade of progress. that is will what we really need
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to address. tom: this is a foundation of fdr " just do something." what do you see as the responsibility of the haves to help the have-nots? susan: there are a couple of things we need to do. one is revived investment. continuing to invest in the business sector is important. as investment flows to emerging markets, now that we are looking at rising interest rates there is a real fear and a lot of that investment money is going to dry up and that will lead some governments in emerging markets
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-- leave some governments in emerging markets unable to pay their debts. lisa: how much could potential disruptions in the emerging market lead over into the world and hamper the biggest economies? susan: we are all in this together. the world is highly interconnected. we are not going to be out of
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the pandemic until we ramp up vaccinations in emerging market. some of the exciting work we are investing in is developing vaccines -- manufacturing vaccines. >> when you discuss these issues with leaders, do the -- do they buy these arguments? it is a very indirect bleed through into our economies. >> clearly advanced economies have made a lot of commitment. we replenished our investment in countries and that was the largest ever. advanced economies are giving money but when we look at issues like climate a lot of the promises are not being kept. i know a lot of the economies
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are struggling right now. tom: at davos in may, the leaders will come together. what do you need to see out of davos in late may? susan: we need to go past nice words and talk about debt relief. emerging markets need a lot of help with investment to avoid some of the greenhouse gas emitting industrialization we went through here. we need to help them leapfrog head and build green from the start. jonathan: setting up the week ahead with economic data on top, payrolls on friday.
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150,000 is the median estimate. 400,000 is the low. look at some of these names looking for a soft print on friday. bryson of wells fargo. ethan harrison, bank of america looking for seven hikes. a lot of these banks expected a soft print on friday largely due to omicron. they are still looking for an active said this year. >> wages and benefits under altogether -- there is some other data there as well. 14% monthly rent increase.
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the payroll does not drive with that. you have massive negative real income growth. >> the rental side of the story will provide that upside pressure to keep inflation elevated, to keep that story persisting. that rental story will create some will -- real upward pressure. >> especially if oil prices do not come down. given that backdrop we talk about whether it is a miss or a beat for payrolls. how much do we learn about the tightness or looseness of this jobs market? if it is a week number, is that a cause for concern about new wage inflation? >> we will be looking for a
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punchy jobs number. the middle of march feels like a long way away. >> the middle of march, march 11 is what i am looking at here. you have amazon on thursday and in terms of the wage dynamic in the jobs are part the next day, what is the pressure of amazon to take the high ground and move to $19 and our company -- compensation? >> they are under pressure and people recognize they are. the stock has done virtually nothing in the last year. lisa: when you say they are under pressure, it is not from politicians. it is from the market.
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they have been out ahead in terms of the margin compression because of having to pay more. tom:tom: if you look at the momentum, it has continued. -- if you look at the momentum, it has continued. tom: can we talk about sports? jonathan: which one? tom: i didn't know who rafa was. and played cricket for the brisbane heat -- she left the sport and played cricket for the brisbane heat. jonathan: she was fantastic. futures down to tenths -- two
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tenths. lisa: i will go get a coffee. jonathan: we will come with you. this is bloomberg. ritika: boris has received a report of a government investigation into the so-called party gate scandal. they looked into possible wrongdoing over parties at downing street during lockdown. this week the bank of england will give a big clue as to how far and fast it will move in fighting inflation. they will raise interest rates to one half of 1%. did that will complete the first of back-to-back increases since
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2004. several developments in the crisis in ukraine. the pentagon says moscow has increased the number of troops that have been deployed along the ukrainian border. vladimir putin has no plans to launch an investigation. the agreement would value the company at about $13 billion. they make software that workers used to log into corporate programs remotely. i'm ritika gupta. this is bloomberg. ♪
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>> what we as expected as this
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virus moves through the population if it picks up a mutation that makes it a little easier to infected that virus will become the dominant virus eventually. we are seeing some of the fallout in terms of new variant s emerging. jonathan: equity markets are down 2/10 of 1%. nasdaq futures are up one third. germany up for basis points, flirting with zero. negative about a basis points now. a big challenge for christine lagarde. tom: there is no way she can
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frame a powell tone. jonathan: no. the conversation that they ecb is whether they hike at all. we got a survey last week. our survey of economists 18 months out, middle of next year, the first move of the stb -- ecb. tom: right now joshua sharfstein with us. dr. sharfstein, it is good news whether it is the thousands assembled in kansas city for football or in the walkup, i
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live in, in the lobby there are polarities. we see hospitalizations rolling. we are waiting for deaths deaths to rollover. >> public policy is changing in areas where the cases are coming down now. i think the national mood will change as deaths come further down. this is approaching the moment where we are going to see covid fade a little more into the background. i don't think we will have nearly as much disruption in our lives in 2022, barring the
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emergence of something we haven't predicted. tom: how critical is it to double the vaccination rate to 68%? dr. sharfstein: with every increase in vaccination we will get fewer hospitalizations and fewer deaths. we have tools to protect ourselves and we have to keep going. just because it will fade into the background in their lives, the more we are smart about preparing, the more it will fade. it is not by ignoring it altogether that we get that benefit. lisa: in china they have been
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trying to pursue as you covid policy. hong kong is experiencing a big upsurge in omicron. a scientist at a university there has said that the horse has vaulted and he does not think the government will be able to get on top of it. dr. sharfstein: the vaccines they have used have not been the strongest vaccines. they are vulnerable to covid. there is no question about it. this virus end to some of the omicron variant -- and some of the omicron variants we have seen are crazy contagious. it is a real challenge for china
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. it is hard to believe they can make it through with so many people coming in. they have tools and approaches we would find unacceptable in this country to accomplish that. lisa: those tools we find unacceptable, are they enough? you game out what it -- can you game out what it would look like in the weeks following? dr. sharfstein: if omicron gets out into the chinese population it is likely to spread quickly. we will have to see the scale of the reaction from the chinese authorities. i'm not someone who will be able to put together a scenario
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between the biology and the politics but it will not be pleasant for people in china if they go for a zero covid approach in the setting of an incredibly infectious variant. they may have to do some significant actions to avoid so many people getting very sick jonathan:. -- people getting very sick. lisa: i do not understand how they can pursue a zero covid policy while having individuals from all over the world come in their borders and celebrate a national concept. jonathan: looking ahead through the week, a ton of economic data stateside. what have we got in between?
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tom: you were out front. explain to our audience the importance of isn. jonathan: to see it in the 50's it in the 50's is really good. inside the industry commentary, iq want to hear from a select group of industries -- you want to hear from a select group of industries. lisa: i was struck by seth carpenter of morgan stanley talking about the lack of understanding in the industry about what tightening is. jonathan: it is the most educated guessing game on the
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planet. all of it is. futures are down 2/10 on the s&p , on the nasdaq up for tenths of 1%. crude back with a lift to 87.12 . ♪
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♪ >> what is important here is how the investor risk appetite has been. >> earnings will start to matter more. >> there is a risk to growth, especially in the second half of the year. >> financial conditions have not tightened enough, clearly. >> i think it is a bumpy ride. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: what did russell crowe say, "are you not entertained?" can you do the accent? i that tom can -- i bet tom can. futures down seven on the s&p, negative a little more than 0.1%. this morning, it is quiet. this month, anything but. tom: russell crowe celebrating ash party winning the australian open, no doubt. what i love


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