♪ >> it appears that inflation really comes down even slower than i think it will come down.

i'm not anticipating every acceleration. >> we really don't see prices moving much higher than where they are today. >> the economy is still showing plenty of signs that inflation is coming down. >> we are very reliant on this immaculate disinflation continuing. announcer: this is bloomberg surveillance with donovan ferro, sabra, within annmarie hordern. jonathan: live from new york city this morning, good morning, good morning. for our audience worldwide, this is "bloomberg surveillance." waking up to some stunningly tragic pictures coming out of baltimore, the francis scott key bridge collapsing following a ship collision. i want to get two things and focus. first of all, the search and rescue effort, then we could talk about what went wrong. we heard from the baltimore fire chief in the last 90 minutes or so indicating that the active search and rescue would be ongoing for a long time. this is a large water area, and

the deck at the ship involved still needed to be searched. they were able to remove two people from the water. the latest information is they're looking for upwards of seven individuals. naturally when you see images like this you will be wondering what went wrong. first of all we heard early on this morning that the ship that had chartered because the bridge collapse, and you can see this in the image we received, colliding with the bridge and leading to its collapse. this is what we've learned in the last 15 minutes or so. i will quote them directly for you. and unclassified cybersecurity and infrastructure agency reports that the container ship lost propulsion as it was leaving the port and warned officials of a possible collision. lisa: there are a lot more prescient that will be investigating. this to me raises also a concern about what the inspection process is like. this ship was just starting a 27 day journey to sri lanka. this was the beginning of a long journey. also questions now about what this means for one of the

busiest ports in the east coast and whether this does kind of create delays on a whole host of fronts. honestly, the region is really dependent on this waterway. annmarie: absolutely, it is a huge port, a very important waterway. i was there with biden who wanted to talk about not just infrastructure, but some of the supply chain pickups we were seeing coming out of the pandemic. the president has been briefed, he will continue to be briefed throughout the day. we heard earlier on that the white house did not see anything the various when it comes to this vessel hitting the bridge. but clearly you are going to see a huge interagency response. we heard that as well from governor wes moore of maryland. jonathan: when we get more details will share them with you immediately and expect regular updates roughly every 25 minutes or so. shaping up as follows, about 87 minutes away from the opening bell, equity futures posited by 0.4%.

yields are just a touch lower, the dollar a touch weaker, europe a little stronger. coming up this hour, economy securities and why he thinks stocks are behaving like stocks and he can explain that. looking ahead to fridays inflation data, and former american airlines ceo bob crandall. investors on hold ahead of more data they could show whether the rally has gone too far. the market is trading like a meme stock, writing i was wrong on how much we get pounds last week on apparent global central bank easing. we seem to whip around 1% like it is nothing. it is like trying as you can it to seem really smart for a day or two and then really stupid for that seven apparent reason. peter i am pleased to say joins us now. i think i remember you saying clearly that there was more change for 10% drop in 5% rally. clearly that wasn't right.

why has this market been so difficult to read? >> it feels like is very little liquidity. you see kind of these sharp declines, sharp rallies, and very little volume. that has made it very difficult. you come to an age where you have some of these very large market cap stocks creating quite volatile, and now you actually have a reasonably large, two times leveraged etf on a single stock which i've never understood why we would need something like that though i think that is just amplifying these moods and making readily difficult. jonathan: i'm guessing that stock is nvidia. i can see why some people might want to f not extrapolating all of their start history. anyway, i want to get your thoughts on this. rate cuts not a prerequisite for this market rally clearly based on the evidence of the first quarter. why is that going to change anytime soon? >> it all comes down that we rallied through the rise in rates because the economy is doing well. ultimately it has all been about ai.

the ai adoption, the ai companies have driven this. we got a couple stocks really driving it. the start to see, the more a broadening out, but i'm concerned we are at pki in the cycle. not in terms of adoption, but in terms of is it really delivering? i just signed onto something yesterday and they changed my search to ai. the toothbrush the now has ai. everything is putting the ai label on stuff and it feels like where we were at peak metaverse. i think it is going to reach much longer but it doesn't mean it has to peak right now. lisa: there is this idea that it has turned positive for the first time in 25, 26 months. this is unusual and typically a sign of strength. how do you find signs of true economic strength with this idea that the market is somehow divorced and already priced for something else?

>> lee qanon -- leading economic indicators that were wrong for white a while. for me, when equities go up, it tends to drive that. i'm looking much more what we are seeing in the job market. it has been a little bit less of the clear-cut story. a little bit more decline. we will learn a lot next week when we get job numbers. the consumer again seems a little bit stretched. all of a sudden we gone through consumer credit was fined two is back above trend. you delinquency still low, but now creeping back to normal. lisa: a lot of people have talked about the wall of money and how they were so much money that it is hard to bet against inventive trait that has been some ways unprecedented. where are you seeing a lack of liquidity at a time where this market seems flush with cash? >> i look for that trading liquidity, when you are having is very sharp declines and you look at how often. we gapped up or down which tells me there is no true depth of the ready. we've been referring to it as

full liquidity or this middle liquidity where it looks really active and you can trade a lot but if someone become through with a trade, it immediately moves. it strikes me that there just isn't a true depth of the quiddity, everything is just daytrading around which kind of fits where we see in the options trading, stock trading, the expiration. everything is much more training environment than a the environment. jonathan: what are you advocating for currently? >> i want downside protection. we have the 3% move up, i feel another jump up, but definitely following suit, it is very difficult to train this market so you are looking at shorter dated options to try to express this you where you protect yourself is a large jonathan: i want to think about potential catalysts. for the first three months of this year it hasn't been interest rates.

>> my big concern is that is going to be about china. even yesterday we had a date of negative news and china was banning companies from selling chips in china. but we are going to see over the course of this year's china is going to try to repress sales of western brands into china so they can bump up their own brands. we have seen that. some of it has been poopoo'd as it is just china's economy slowing. i think it is much more of a pattern that we are seeing from china, and then you start looking at what they are trying to do in terms of selling the brand not just mystically, but globally. france went after shein which is another company. teemu is out there. it is going to force u.s. companies to have fewer sales in china, possibly fewer sales in the emerging markets and maybe compete on price which just isn't rate for current valuations. annmarie: made in china, that resonate whether markets? >> we've been calling it made by china.

everything was always made by china. we took our products, have been manufactured in china and then we sold them. now china is trying to sell their own brand. israel, i believe byd is the second most popular ev. huawei is everywhere. as you start looking at teemu, realize at some level, price matters. lisa: just taking a step back employ this altogether, there is a question of what the catalysts will be for some sort of reality check on market and it goes to this increasing division between the u.s. and china, this question of how much can the u.s. really look inward, create more industrialization within the country at a time when it is clearly lacking a lot of investment how much spending capacity does the u.s. half before we start to see it reflected with higher bond yields? >> i think that is coming. we get back to the scripted, ongoing friction. i think corporations are still

trying to figure out how do we take advantage of selling into china, how do we work with china, and it is definitely nowhere close to what it was, but when i'm talking to them they are all about china right now, and if you just look at something on living off the land in this type food which is supposedly critical infrastructure, they are specifically targeting the people's republic of china, the communist party. so i think d.c., there is such heightened awareness of his friction an ongoing battle with china that it hasn't fed to corporations yet, but that will come out, i think. jonathan: what do you think that looks like? >> i think we get more and more tit-for-tat policies. you can send your semiconductors here. then you can't send them here. i think that is where we are headed and at the same time more and more pressure from china on the countries that they have big trade deficits to push their brands. i think that is going to be the weak spot, emerging markets

countries selling a lot of commodities to china, i think that is the back door where china the start aggressively selling their brands to a great degree of success. jonathan: last time around we did this with these warnings of runaway inflation that didn't happen. is it different this time? >> i'm not particularly concerned about runaway inflation. it is slowing down on the services side, a covid bump that is taking longer to play out. some geopolitical risk out there, i think iranian oil is a potential target where that would cause oil to price up. as we do this reassuring, that is going to be inflationary. jonathan: former president, 60% tariffs. get a second term, what does it mean? >> i go back on this. i remember when president trump at the time put out the tariffs, and a lot of economists against that, said it was the worst

thing ever. our position at the time had been that we had been in a trade war for 20 years and had this not fired a bullet and ironically not one of those tariffs has been taken off and some additional things have been going on. if you take away the partisanship go to national security, both parties that they are now very fixated on china and very concerned about where they are headed, technology, and what they can do to us and that is going to drive policy no matter who wins the election. jonathan: we've been talking about this for a number of months now. what is interesting is when you had this conversation with an equity strategist and you say how vulnerable are multinationals? how difficult is led going to be? everything will be ok, they will work through these issues. if that is the world it got to listen, think about the world they have lived in for the last 20, 30 years. it has been uninterrupted globalization. they've been able to have progressive views at home in america. they've been able to entertain regressive use of rotten places

like china and sell products in both countries. now you are having a cultural collision at home, not just abroad, and you got the extra issues of tariffs. on top of that, china seems to be much more interested in domestic brands in the chinese consumer is new in the last 10 years as well. it is far more difficult now than it once was. lisa: which is interesting that today or tomorrow you're going to see the ceo with xi jinping, how different is that conversation at this moment when it seems like that has to be on the radar? we saw yesterday amd and intel shares falling as a result of the potential frictions of their use in chinese government utilities. jonathan: multinationals have had at their own way for a long time. does it feel like that anymore? >> no. we are ignoring the fact that wally put out a phone that has a seven nanometer chip but no one seems to want to dig into this because we don't want to find out what the answer is. that is a danger.

the other side, the one thing corporations are talking about or, global shipping is no longer taken for granted. here is my shipping and here is a cost, and people are getting very concerned about global shipping. people are getting concerned about infrastructure. i do think that pulse away from globalization and more to this reassuring, working with sickle and south america. jonathan: good to see you. on that note, let's get you the latest update out of baltimore. >> a massive search and rescue operation is underway in baltimore after a container ship struck the key commuter bridge in the early hours of this morning. abc news sites a report saying the container ship lost propulsion as it was leaving the port and warned maryland officials of a possible collision. the mayor issued a statement saying the ship was under its charter. emergency responders have

rescued two people from the waters, one seriously injured. the search continues for upwards of seven people. maryland governor wes moore has declared a state of emergency and traffic has been suspended around the area with motorists advised to avoid the i-695 interstate. president biden gaining ground in six of seven key swing states this month according to the latest bloomberg poll. biden seeing his biggest gains in pennsylvania and wisconsin, following his state of the union which rallied democrats and seemed to mitigate concerns about bidens age. and krispy kreme shares are rising after mcdonald said it will begin selling their doughnuts and restaurants across america. marking the latest attempt by the burger chain to attract breakfast customers and all day snatchers. the chain said tests of customer appetites for the treats "exceeded expectations." the doughnuts will be first

available later this year with a full rollout by the end of 2026. that is your bloomberg brief. jonathan: thank you. up next, the latest on the tragic collapse of a major baltimore bridge. that conversation up next. ♪ how am i going to find a doctor when i'm hallucinating? what about zocdoc? so many options. yeah, and dr. xichun even takes your sketchy insurance. xi-chun, xi-chun, xi-chun! you've got more options than you know. book now.

♪ jonathan: equities on the s&p 500 firm are hereby one third of 1%. a little bit of a lift, yields lower by a single basis point. under surveillance this morning, the search for survivors from that bridge collapse in baltimore. >> we are still very much in an active search-and-rescue posture at this point and we will continue to be for some time. there were likely multiple people on the bridge at the time of the collapse, and as a result, multiple people were in the water.

we may be looking for upwards of seven individuals as the latest information we have. jonathan: here's the latest information now, emergency services have rescued two people from the water, one with serious injuries. governor wes moore has declared a state of emergency. motor vehicle traffic has been suspended as rescue operations continue with his vice to avoid the 695 interstate. amy morris joins us from washington. if we could talk about the latest, the search and rescue effort, where are things currently? amy: i can tell you that the port of baltimore, the law enforcement officials, it is a multiagency event that is going on right now, a mass casualty event. they are bringing in extra equipment from all over the state and from adjacent states. to be able to find people underwater, to find the cars that are under the water. they know there are more people under there, they are using everything from underwater vehicles to sonar to be able to locate these people.

this is a port city, so they are prepared to go find people and rescue people who are underwater. nothing could have prepared them for the collapse of the key bridge. this is a major part of an artery right through this part of the country. people who lived in washington, d.c. and drive to new york city, that is how they go. they take that bridge. nothing could have prepared them for this. jonathan: it's going to take some time to establish a clear picture of what happened and what went wrong. there will be a series of investigations i'm sure. but i think we put together just a few pieces in the last hour or so as to what happened what have we learned? amy: what we have learned is that the ship which was licensed by maersk and under the singapore flag had said that it was going through a loss of power, that it was going through some sort of trauma on the ship read you can see the black smoke billowing from in the video that you may have already seen of the ship hitting the part of the bridge where it collapsed, all the power was going out.

you can see the lights coming on and off, it was a mess. they were unable to steer the ship, so they sent out that mayday, they said that that call and that is when they hit the bridge. what remains to be seen is why the bridge collapsed the way it did instead of just on part of the bridge fully the water. the bridge fell in a sequence of events. it was almost like a domino effect falling into the water the bridge is lost. there are parts of it still sticking up at they are calling it a total collapse of this ridge. that needs to be investigated as well. lisa:lisa: in the meantime, can you give us a sense of where this is going to be rerouted? you said this is a major artery. what does that mean for congestion they are and what does this mean for congestion at the port that is one of the biggest in the east coast? amy: there are detours in place. there are tunnel through baltimore that people can take. however, those tunnels do not

allow tractor-trailers that are carrying hazardous materials. it is going to involve all of these inspections and law enforcement so it is going to be very slow. there are maps already online for where people can follow to try to find their way around this collapsed range going way out west of baltimore to try to get around it. most people if they are having to commute because of work, they might be better off working from home. we all know that we can do that in most cases. this is causing a tremendous mess. people are being advised just to stay put until they can figure out better routes for people. >> telus a little bit about what kind of federal and state response we will see. who is actually going to be working on the ground? >> we already know that the fbi is on the ground and let me clarify, there is absolutely no

indication that this was intentional, that there was any malcontent, that this is terrorism. that was one of the first questions asked. there is no indication of that. still, the fbi is there because this is what they do. we've got state, local and federal law enforcement, the department of transportation, secretary pete buttigieg already informed, already getting as much information as he can, his office helping as well. you got coast guard, you've got sonar and radar and eyes in the sky, if you will. everybody is hands on deck for this because this is something that our area has really never seen before. it is highly unusual to have a landmark like the key bridge in baltimore just disappear. jonathan: you raise this question that is worth exploring without going too deep into the realm of speculation. to see a collision like that in these pictures lead to a catastrophic collapse of the whole bridge almost immediately

will naturally raise questions about the safety of some of these bridges across this country. we can maybe put this particular instance to one side and allow the investigators to do their job but as you look across the country right now, how big of an issue is that? amy: it is in a norma's issue. and with the first thing most people ask about. if this bridge can fall just from this collision, what about the bridges that i take every day to work? infrastructure has been an issue with the biden administration from day one. the money that has been ported infrastructure has not stopped. however, this is something they are going to be investigating. the mayor has already said and the fire chief has already said involved more that they have reached out to several engineering companies to come and look and effect and see where the flaws may have been that would have allowed something is catastrophic as this to have happened, and that is the question that still needs to be answered. the investigation is ongoing. the priority, course, is the

safety. >> thank you for the update, search and rescue effort ongoing. naturally this going to be tons of questions, one of which would be when there was a loss of propulsion, how much time was there between that the collision, how much time with they have had to shut the bridge down and make sure there were no vehicles on there? lisa: when the ship was inspected before a 27 day journey, what other bridges were constructed by the same construction company and architect, potentially? >> the focus, of course, from officials at the moment is on the search and rescue effort. equity features on the s&p 500 posited by one third of 1%.

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♪ jonathan: some economic data due in about 20 seconds time. going into it, the scores look like this. equity futures posited by one third of 1%. the nasdaq up half of 1%. the bond market, two year yield looks a little something like this. 459.10. yield lower by three basis points, on the tenure down a single basis. with your economic data, let's get to mike mckee. >> we have durable goods orders out this morning and normally they are something about business spending but they do

get heavily revised and boeing is affected them a lot. the headline number comes in up 1.4% the transportation about half of 1% so there is certainly something of knowing connection that we will have to look at. a strong seven tens of 1% gain after a land reading last month. capital goods nondefense is kind of a proxy for business spending that goes into gdp, and shipments were down 4/10, so that is something for the month of february that would subtract probably or suggest subtraction from gdp. i will take a look while you guys are checking the markets at what it is that move this and see how much boeing might have had an influence on the overall number. jonathan: let's start with equities on the s&p 500. still basically training where we were, up one third of 1% on the s&p. the bond market, let's take a look at the front end of the yield curve.

still a little bit lower, down by three basis points. raising some questions about just how many cuts we should be pricing out right now given how strong this data is. lisa: this is been the continual question, you have a robust economy, are we really talking about rate cuts at the same time as about inflation? and is this inflationary especially given that some of this is just late spending? jonathan: second read on things, what is it? >> ob some 15 airplanes in february, but that was 12 more than the month before. nondefense aircraft up by 24% in this reading, 24.6%. a significant boost from that. also we saw a big turnaround in autos, transportation equipment up 1.8%.

new orders and shipments up 1.5%. i bring that up because the port of baltimore is a place where most of the east coast imports come through that port, so this could be something that gets interrupted significantly. lisa: just to rip up the script as tom keene would say, how much would greater investment in infrastructure and greater investment in trying to shore up some of these areas that are likely going to get disrupted potentially for a temporary time or even longer, how much is that inflationary? >> it depends, it is probably not significantly and missionary. brookings institution does a fiscal policy monitor and they calculate how much additional fiscal help is going to the economy and right now it actually negative. the fiscal spend is negative for this year so far, and for last year. so we will be dropped off what we were doing before. but the money is being spent

over a longer time. that is where the benefits will go over a longer time, that eventually it will be disinflationary if we get this all done. jonathan: basically we are not having two big mac meals, we're just having one, but we are not on a diet, are we to mark comparing things to pretty extreme deficits. >> this is going to be a predicting situation. the location and the situation we are going to be in in terms of transporting stuff will push congress i think to do some emergency funding for this bridge. we were talking just before the show about how bridges have fallen in recent years, minneapolis, philadelphia, the bay bridge. and they get rebuilt much more quickly than they were built in the first place. took five years to build the francis scott key bridge and hopefully they can get some kind of placement going much more quickly than that if congress will throw some money at it.

>> thank you, breaking down the data. let's get to the chief u.s. economist to break down some of this. andrew, you were listening to the breakdown of the data, your first reaction to it, these. >> i would emphasize that these numbers have really been bounced around by aircraft, by autos. what are we seeing at the core? not too exciting, not to positive. we saw that this morning again. if you look at the various manufacturing industries they have come off at the bottom but they are still sitting close to contractionary territory so i don't think you're really changing the narrative here. jonathan: one thing that has come up throughout the year and i keep seeing it in everything a look you send out, this economy is going to slow down by such an amount that the fed is going to need to cut interest rates. your start -- still thinking about the stuff, dynamic that become more apparent and

obviously the year. what is leading to that conclusion for you? >> it is really the labor market, a hiring rate that is coming down. i think that is where we heard chair powell say in his evaluation of the data, not that we are weakening yet and i would agree with that, but the labor market is his emphasis, in terms of the point of concern. it would be mine also. lisa: do you think at this point he has had the right message, the market has gotten it and it is only us that is trying to freak out about it? >> one thing that was probably constructed the chair powell is trying to do is to get away from responding to each individual data point as it comes in. that is a very difficult way to set policy. they are trying to tell us we are on a path to get to rate cuts now. inflation has come down enough that they think that they can be cutting interest rates. it's not an all clear that inflation is returned to 2%. it is a good reminder of why there is still upside risk to inflation. lisa: this is really dominating

my thoughts right now is the baltimore bridge and what that means for infrastructure spending, what that means for some of the importance right now of getting more spending past rather than less at a time where the deficit is like having 15 big macs. so at what point do you see this as an inflationary type of impulse for the u.s. has to borrowing, to keep investing to prop up certain industries at the expense, potentially a five yield and ration? >> this comes back to the idea of fiscal space. we usually don't worry much about fiscal space in the u.s. because politically there always seems to be more space to do more spending. but when you already done a lot of spending, when you already put a lot of stimulus into the economy, clearly no one would disagree that we should be rebuilding this bridge and investigating infrastructure, but that spending is going to come on top of a large deficit that we are already running, so that is where you really get into difficulties potentially politically but also economically.

is that also increasing price pressures in the short-term? in the long-term, investing in infrastructure is going to be deflationary but in the short-term, you need to hire people. you need to source materials and that puts upward pressure on prices. annmarie: most urgent i can ever remember from larry fink this morning. what do you think this doesn't terms of the impact of the dollar? >> that is something that is increasingly in focus. we saw a bit about last year, we saw may be less in currencies, maureen treasury yield you had the 10 year yield upwards of 5%, and i think that was some foreign investor concern, is this a country that is going to run sustainable deficits? they certainly do not look sustainable right now, and that is ultimately an issue for the currency also. jonathan: what can develop in the east coast, just briefly with a disinflation area tailwinds and goods at the moment in america, because there

were some sign in the last few months that maybe that is fading and i just wonder how vulnerable we are this morning. >> i think it is a really important thing to draw attention to because a lot of the disinflation that we have had has been that price, that was energy prices coming down, that was supply constraints that had been constraining supply and boosting prices. look at where we are, we have gasoline prices that are rising, projected to rise further into the summer. we now have this supply-side disruption related to the port in baltimore that would also indicate that, if anything, goods prices to be higher. we already know about the panama canal, the red sea and the suez canal. core goods prices came up. they have been coming down, they came up in the last report. this period of deflation in goods that we have been in for the last six months or so, we are probably coming out of that. jonathan: do you think services

can do the heavy lifting? >> that is what you need to have happen to bring inflation down. the idea that the labor market is softening, you really need to see that continue to bring overall inflation down which is a very unfortunate scenario. we like to have inflation come down. there is a reason it hasn't happened historically. if goods are going to be less disinflationary, less deflationary than services, that has to be three softer labor market. jonathan: what i hear from you is different than what i hear from the chairman. you are saying to get inflation back to target we need a recession. >> better still the most likely way you bring inflation back to target. if there some probability of a true soft landing? sure, but what we are seeing is consistent with the idea that wage growth has kind of smalled out around 4% or 5%. if you want wage growth to decelerate further, the labor market probably needs to soft and. lisa: do disruptions like what

we are going to see with respect to the baltimore bridge and shipping passages? we seem shipping disrupted in general. does that make it more or less likely that we will get the recession that you were talking about to bring nation under control? >> the worst thing that could happen for the fed and the economy are these kind of supply-side shocks because what they do is they reduce the productive capacity of the u.s. economy and boost inflation at the same time so it is negative for growth and it means you get higher inflation. it's different than a demand shock where you get stronger growth and higher inflation. >> but this goes to something that john was talking about. if we get that kind of stagflationary shock, are the fed's hands tied or have a medic clear they are going to err on the side of supporting the economy and the labor market over continuing the fight for inflation? >> they are any transition here, but what they are transitioning. this increased emphasis on the labor market, on the economy.

the idea which we saw these economic projections, inflation can run closer to 3% than 2% and still plan to cut rates. if that number sneaks up a little bit higher like core inflation at the end of this year, and i suspect it will, i think they will still be cutting. jonathan: there is some debate over whether the federal reserve is saying they got a high tolerance for ration. others have endorsed it, mohamed el-erian said this could be the beginning of a long story that suggest this fed is now targeting a range and not a point target. >> i think implicitly that is true. explicitly we need to wait for officials to say we have gotten comfortable being away from targets in the upside. but this idea that they can accept somewhat stronger inflation, i think everybody would basically say 2.5 percent inflation, that is close enough. the problem that you get to, less 3% close enough to 2.5%? is 4% close enough 3%?

we are kind of in that region now. i think it is a transition where they are moving more toward this kind of labor market concern, economy concern in the reality is that they will accept tire inflation. jonathan: the issue with that, once you begin to give signs, doesn't that make it harder to get back down even more? >> absolutely>>. this could easily lock us into not just a short period, but really a new regime where inflation is higher, more elevated, more volatile. jonathan: i go back almost a full 12 months, a secular outlook for pimco coming out and saying this that is going to be at two point something but it is almost consensus now on wall street. lisa: it has led to this incredible euphoria because you have a fed that has got your back. what is the consequence of that, and at what point does the fed have to say enough, we got to

actually do something and hold rates higher? jonathan: we need to put italian on the f one c. the to do an update on stories elsewhere this morning. here is your bloomberg brief. yahaira: as we've been reporting throughout the morning, a massive search and rescue operation underway in baltimore following the collapse of the francis scott key commuter abc news reports the container ship lost propulsion and control, warning maryland officials of a possible collision. maersk issued a statement saying the ship was under it charter. emergency services say two people have been rescued from the water, one in serious condition. they are searching for upwards of seven others using sonar, infrared and divers. traffic in the port and surrounding area remains suspended. bloomberg news investigation has found examples of a growing lack of market for spacex's starlink internet terminals. the access points have been popping up in territories ruled

by repressive regimes including iran, sudan and yemen. ukraine has accused russian forces of also using the services. elon musk says the company isn't knowingly providing the terminals to any of these countries. former president donald trump social media company is rising ahead of its first session as a publicly listed company. front media and technology group will begin trading today on the nasdaq under the ticker djt following its merger with a so-called blank check company. the deal gives the parent company of trump's social media platforms truth social more than 275 million dollars of much-needed capital plus providing a windfall for trump as he faces mounting legal and financial issues. jonathan: thank you. up next, boeing's c-suite overhaul. >> we are going to approach this number one acknowledging -- >> we don't put airplanes in the

air that we don't have 100% confidence in. jonathan: that conversation up next. hey you, with the small business... ...whoa... you've got all kinds of bright ideas, that your customers need to know about. constant contact makes it easy. with everything from managing your social posts, and events, to email and sms marketing. constant contact delivers all the tools you need to help your business grow. get started today at constantcontact.com constant contact. helping the small stand tall.

jonathan: the opening bell 43 minutes away. equity futures positive by a quarter of 1%. data and america pretty decent. yields higher by a single basis point on the 10-year. under surveillance this morning, boeing c-suite overhaul. >> how do you know what happened to whoever was supposed to be in this see? i've got kids, i've got grandkids, and so do you. this stuff matters. we are going to approach this, number one, acknowledging. >> we don't put airplanes in the air that we don't have 100% confidence in. jonathan: if the latest now, dave calhoun saying he will step down at the end of the year.

the news coming just days after major airline ceos turned up the pressure, demanding answers after a number of in-flight incidents. for more, i'm pleased to say we are joined by bob crandall the former american airlines d.l. and chairman. bob, you are a legend in the industry and we got a lot to talk about. i want to start with this issue first and foremost, owing. your experience, and what you think changed in the last decade or so. >> i wish i knew the answer to that, and i suspect dave calhoun wishes he knew the answer as well. during the time that i dealt with boeing, they were a very reliable supply. they built a great airplanes and they did a great job servicing those airplanes, and in every case where we had any kind of a disagreement or a problem, they stepped up and were very responsive.

my experience with boeing has been that it is a great company and of course everybody in america is worried about what happened. the people that are running the airlines these days, the ceos and major carriers are going to meet this week with members of the board of boeing. that is an extraordinary thing that has not happened in years past, and it is a reflection of how serious they regard this problem. jonathan: as a customer, what choice do you have but to stick with boeing? can you help us understand the decision to go between boeing or airbus? what is the choice you've got to make? >> look, nobody wants to be subject to a monopoly for life. so what you look for in the airplanes are certainly reliability, safety has always

been table space in the manufacturing of airplanes. no airline ever wants to have an accident and for the most part, u.s. aviation has built an extraordinary safety record. so when you are looking at airbus and boeing as to purchasing airplanes, what you are trying to do is you are trying to find the best quality, the best price, the best operating cost, and when possible, if you are a big enough airline so that you can tolerate the cost of operating multiple fleets, you try to use the competition between those two manufacturers to sustain your own cost for aircraft and cost per available seat module and by competing them against one another. that is what everybody wants. but table stakes, as i say, safety of table space.

without an absolute reputation for safety and consistency, you simply can't compete. that is why we are worried about what everybody is worried about. we've got to get boeing back to where it produces an impeccable product. lisa: it is not just boeing. we are also hearing about more small incident and medium-sized one at airports and russians about air traffic controllers and a lack of staff if this all just because of the pandemic, is it just that we are hearing the happy things and used to, or is it lack of infrastructure investment? why are hearing more about the bread-and-butter of the industry being challenged, which is safety? >> i think we are hearing a lot more about for several reasons. one of them is congress' failure to raise taxes and the u.s. government has enough money to do the job properly. we have been under-investing in our air traffic control system.

we've been under-investing in roads and bridges, and until we step up and fix that problem, i think we are going to continue to have the kinds of problems to which you refer. and certainly we used to be the leader in the world. we are falling behind the europeans are doing, what people in other parts of the world are doing and we need to fix that. and in her to fix it, haiti to provide appropriate resources. annmarie: set to fix that and to try to mitigate some of these trust issues the american public has with boeing as well as airline ceos, do you need to look outside the company, given the crisis of culture that has been developing within boeing? >> look, i don't know what is going on with boeing and i suspect dave calhoun doesn't either. in the statement he said we are

going to look very carefully at this, we are going to learn from our mistakes. i don't know explicitly what those mistakes were. was it a mistake to acquire douglas a decade and a half ago? maybe so. was it a mistake to lay off as many engineers as they did? maybe so. hasn't been a mistake to outsource some of the work away from their own workforce? maybe so. i don't know the answers to those things and if calhoun after this point hasn't made clear that he knows the answers, either. but we need to fix that and to fix it, we've got to reinstate a culture of quality so that every man, every woman building an airplane, doing a piece of wiring on an airplane, everybody feels that sense of personal responsibility which will make

that airplane come out of the manufacturing facility in perfect condition. jonathan: let's finish on a lighter note. speaking of response ability, you are responsible for the frequent flyer program introduced at american airlines. you revolutionized the industry. i just want your opinion on things. did you ever think we would be where we are now, did you ever think, and my colleague lisa talks about this a lot, that ultimately airlines will turn into credit card companies? >> to be honest, when we invented we thought it was a good idea, but in all honesty, i never anticipated it would be as great a success as it has been. jonathan: i have a complaint. don't you think you should get miles to be rewarded for flying, not for spending money on other things? don't you agree? >> i don't think i agree. you can buy lots of things with

miles. the mileage business is a good business. jonathan: i to want to know how you get concierge key so you can tell me the next commercial break, just not on air. thank you, sir. bob crandall, legend. lisa: he wasn't going to answer that question because it is basically giving them all the money. jonathan: corporate minds to fly in america want to know. lisa: you think he's going to tell you? jonathan: i just want to know. maybe you just go around spending lots of money on a credit card, i've got no idea. the german handled the americans big serving game and got the decisive break early in the second set before putting a

comfortable wind= in the books. he will face karen hatching off for a spot in the quarters. and don't forget, tennis channel's daily live coverage starts at 11:00 eastern. starting a business is never easy, but starting it eight months pregnant... that's a different story. with the chase ink card, we got up and running in no time. earn unlimited 1.5% cash back on every purchase with the chase ink business unlimited card. make more of what's yours.

manus: from new york city, the melt up his back on. have the italians reached out? month five it we can close out. count down to the open kicks in right now. announcer: everything you need to get set for the start of u.s. trading. this is "bloomberg the open," with jonathan ferro. ♪