♪ >> we are at an inflection point in the fed's policy path and communication. >> we are starting to see a

different kind of fed narrative evolve this year. there has been some rising angst but still some cuts are on the table. >> there is a little bit of froth and maybe it is deserved as you see powell shipped his narrative to things that allow him to cut. >> the important thing is that the fed and markets are n'sync after being out of sync. >> the fed has actually been a lot more optimistic about rate cuts over the last few years. announcer: this is bloomberg surveillance with jonathan ferro, lisa abramowicz and annmarie hordern. jonathan: the third hour of surveillance begins right now. live from new york city this morning, good morning. for our audience worldwide, this is "bloomberg surveillance." your equity market and little bit softer, the headlines are solidly elsewhere. can year yield vent new highs for 2024 and reflecting on the data yesterday, strong upside surprises for u.s. manufacturing. one question we've all got,

doesn't derail the prospect of rate cuts any time soon from the federal reserve? andrew from citi taking the other side of this conversation today. it now places a larger weight on labor market data, they look for 1.50. lisa: kathy june's was agreeing that basically the labor market data really does take precedence. this is the concern that some people have. what are they looking for in the data? is 150 enough to get it done? you are still seeing robust data points including the ism manufacturing report that highlighted how much commodity prices are feeding into higher prices for goods. jonathan:jonathan: so this is what you are waking up to in the bond market. yields once again leaning higher. the commodity market getting closer and closer to 90, reaching 89 earlier on this morning. backing away just a touch, 85 on wti. the israeli airstrike on the iranian consulate in damascus

definitely impacting oil prices. that pressure on crude translating into higher bond yields at the longer end as the leash and the potential military spending is outweighing any flight to safety. annmarie: that strike certainly had a heightened geopolitical risk into the oil market. what everyone is describing this as is this is the biggest risk in terms of the biggest hit to iran since the assassination of soleimani. iran already says they have to respond. what is the response and how much of a risk with the? but then you take a step back. we know that demand is picking up in china and opec-plus still has supply constraints. so three different movements within the oil market are all moving to stay bullish on oil. jonathan: back in october we have the recipe for escalation, it was the number one question we were talking about since the terrorist attack in israel escalation risk, the process -- prospect of a regional conflict. the turn we started to see in

manufacturing, expansion, the first time in 16 months, a year-and-a-half for the united states. that is a fresh ingredient to all of this. lisa: which gives it more lasting power. in oil prices, to something more sustainable. kathy pointed this out and i thought this was a really good point, this is coming even with record production of u.s. oil, so it raises this question of especially if china is just beginning to get back online, if you do get upside, how much that continues to fuel a selloff in bonds as well as inflation expectations. jonathan: equity stem yesterday by 0.2%. given the way everything else has lined up would you expect to see equity futures down? lisa: given the fact that we've gone up more than 10% in the first quarter and that basically every dip has been buyable even if it did really registers on the screen? i guess we all sort of been numbed the momentum trade that never gives up. this is really the key question.

at a certain point if you get yields high enough, do you get a bigger impact on stocks beyond "the magnificent seven" of what everyone is hoping you can rally? jonathan: that number on the screen right now, that is the new high for 2024 on the u.s. 10 year yield. yields higher for something like 5, 6 basis point route this morning. coming, david legal was of j.p. morgan asset management as investors pushback rate cut bets and amrita sen. and n;eroma -- blerina urici. the heels of stronger-than-expected manufacturing data, investors now looking to a slew of fence the head of friday's jobs report. david leibowitz expecting the fed to stay the course saying we continue to expect progress in u.s. inflation and for the fed to look through any minor bumps along the way.

david, i'm pleased to say, is with us for more. is this a bump in the road? the rally in crude, are they just bumps in the road? >> there are a couple of important things to recognize. one, we've been looking for manufacturing activity to pick up for a year-and-a-half. it is finally beginning to pick up so i'm not sure that this is necessarily new information and i think that to an extent it aligns with what people were expecting. i think the bigger question is going to be what happens with like crude oil? in the short-term that will be inflationary, the fed will probably look through it. but if oil prices look higher and stay higher there is about a six-eight quarter lag and that begins to show up broadly. the counterpoint to that is at higher oil prices are prices go up for the summer and come back down in the all, i think the fed is willing to take that in stride. if they move higher and stay higher because we don't that increase in supply for opec-plus, may be the fed feels

a little uncertain about the path of inflation going forward. lisa: bear with me, but the data has been messy and people: alms in the road very frequently. simply because everyone has been looking to try to dismiss things as aberrations until they become pattern. at what point can be looked oil prices and commodity prices as the best data that we have in terms of demand globally and how robust the economy is? >> that is really the key question because to my point about manufacturing earlier, people have been looking for a pickup in global manufacturing more water, is this an indication of things to come? are we going to get better numbers out of china, out of the u.s.? this is how you get to recent area where you get that resiliency and growth and you don't necessarily get that rebalancing between growth and inflation particularly in the united states as quickly as a people were expecting.

but if you are the fed, and i want to come back to something that you guys were saying earlier, i do think that the labor market is carrying more weight. i don't think they are exclusively focused on that data, but the messaging seems to be that they are comfortable with the ration kind of moving along the path that they laid out which is still above 2%. to meet this is a fed that cares less about getting to two and more about preserving and extending the expansion. annmarie: the survey is a little bit north of 200,000 on friday. if the fed is looking at the labor market, what do they need to see to say this is a slowdown? >> to me, the best indicator has always been jobless claims. we get it every single week, it is the highest frequency, ardently the most contemporaneous thing we are going to get. over the years receives disconnects between the hard and soft data and we get ourselves all wrapped around our anger. just look at with about the data is saying and what you are clearly seen from the surveys which tend to be a bit more

forward-looking is that there is more resiliency in the labor market. the economy continues to power forward. it is to him about our estimate of trend growth. we are kind of getting what we want which is a sequential slowing of growth and we think that over time that will bring elation back down to level that are more comfortable for the fed. inis just not happening as quickly as everybody infer. jonathan: let's talk about when everybody was looking for coming into q2, a big rotation the s&p down by 0.4%. the russell underperforming by 0.7% lower on the morning. lisa asked whether the recipe we are seeing comes together elsewhere in crude, in the commodity market bonds as well is a reason to encourage that rotation that everyone can for for a reason to derail it. >> you seem pretty favorable technicals up until this point with a number of stocks above the 200 day moving average regardless of the sector you're looking at. a big part of the thesis coming

into this year was that you were going to see that earnings story begin to broaden out. it wasn't going to just be about the magnificent 4, 5, 6, 7. you are going to see financials act better, you were going to see the commodities act better and i think this uptick in manufacturing data, higher crude prices lends itself to that broadening out and that extension of the rally that we've seen since october of last year. i think that while these may be challenging development on the inflation front they are arguably positive developments of the u.s. equity market and i would also remind everybody that in 2022 when everyone was freaked out about higher inflation with that if the stock market, it is actually good for corporate profits. if that is what we need going forward, arguably the earnings story is looking a positive. lisa: i'm actually sitting here incredibly confused again how does the fed just by cutting rates is what we are seeing right now with respect to inflation and man is in positive

profits, is it incredible positive for the economy? how does it lead you to cutting rates that and give sums of fuel to the bond market to mark it is not really adding up to me. >> that's very fair and i not going to see if inflation is coming down in the fed is not doing anything that tightens policy, but that would have been the argument at that point in time. i think this is increasingly becoming a credit of the issue. the fed started hiking to late which undermined their credibility to extent. they doubled down on the three cuts the march fed meeting. do we get those three cuts between now and the end of the year? we think two or three is probably reasonable but i think about that has kind of lock themselves into some kind of using this year and it's going to get easier. they actually did it in the forecasts, they pushed out some of those cuts from 2025 and brought down the overall number expected over the horizon. this is very much a time management game for the fed than anything else. they want to get the market what it wants, but i do think there

recognize that the risk is overdoing it to the downside. lisa: if that is to leave thesis when you go into the fed, by stocks and call it a day? >> that is kind of what we are doing. we are generally plain duration from the long side because we do 12 to 18 months can be viewed as a hedge against softer growth but much more comfortable in the short to intermediate end of the curve, still overweight equities and upgrading our views on some of the non-us markets, particularly in china. we remain fairly glass half-full from a portfolio perspective. jonathan: build the s&p and chill, is that the phrase? lisa: pretty equal right, right? >> we be inclined to make you a bit further out just to have a bit of portfolios, but i think to your point about equal weight s&p, that is what has lank, that is what everybody is looking to pick up this year. not just flying on "the

magnificent seven" i think is going to be the game plan moving over. jonathan: love it, great to catch up. getting lisa frustrated and losing patience. you are not alone. lisa: hold on. part of the problem is it is also bifurcated. then you have the other side where you get a total falloff in growth and then it is the opposite, it is duration and get out of stocks, one or the other. this is the reason people are sitting here in a kind of uneasy place. jonathan:jonathan: new number for you on the screen. yields up by five basis points on a 30 year, that is a new hybrid 2024. just cut to the bond market .5 point, new hire of the year on a 10 year and just a few basis points out of doing exactly the same content of the yield curve on a two year yield. at the latest in the bond market. here is your bloomberg brief. yahaira: former president donald trump has posted $175 million

bond to putting massive civil fraud verdict on hold while he appeals it. the move preventing new york state from seizing his assets, at least for now. this also halts the collection of the more than $450 million he owes after a judge ruled he lied about his assets to get better loan terms. trump is still on the hook for the full amount plus millions in interest if his appeal fails. mckinsey has made a unique offer to some staff, take nine months of pay and go away. the management consulting firm is dangling the pay along with career coaching services to some u.k. staff who they would like to leave. the move is the latest shakeup at the firm and comes shortly after it warmed some u.s. consultants they were running out of time to get a promotion. the iowa hawkeyes are heading back to the final floor after defeating reigning champions the lsu tigers 94-87. they were led by caitlin clark with a game-high 41 points.

tigris star angel reese finished with 17 points and a game-high 20 rebounds. iowa now faces yukon on friday as it seeks its first ncaa title. that is your bloomberg brief. jonathan: absolutely awesome, thank you. up next, oil hitting a five month high. >> crude oil last september was a $95 per barrel. we could see the crude oil market test that. this move in energy for us is real. jonathan: it is definitely real. that conversation up next. ♪

so, what are you thinking? i'm thinking... (speaking to self) about our honeymoon. what about africa? safari? hot air balloon ride? swim with elephants? wait, can we afford a safari? great question. like everything, it takes a little planning. or, put the money towards a down-payment... ...on a ranch ...in montana ...with horses let's take a look at those scenarios. j.p. morgan wealth management has advisors in chase branches and tools, like wealth plan to keep you on track. when you're planning for it all...

the answer is j.p. morgan wealth management.

♪ jonathan: we've got a lot to talk at on date two of q2. on the s&p, negative by 0.4%. the bond market of six basis points. new high for the year on the u.s. 10 year, 4.50 on a 30 year. and a new high in the crude market for 24, 85 on the wti. under surveillance this morning, crude oil hitting a five month high. >> we don't have a lot of levers here. in the past we might have utilized strategic petroleum reserve to perhaps adjust the price of oil. we took the spr down from 350 million barrels a couple years ago and didn't replace it.

we are sort of at the mercy of what is going on globally. crude oil last september wasn't $95 per barrel. this moving energy for us is real. jonathan: crude oil trading at the highest level since october. briefly topping $89 per barrel and wti flirting with 85. amrita sen saying the bullish set up for the summer remained intact in any pullback is likely to be limited in size. she joins us now for more. it's almost like the perfect storm coming together over the last month or so. what kind of levers are you looking for this crude market to test in the next few weeks and months? >> calling for $90 is hardly a big choleric now but we have been saying that we would be breaching $90 in the summer. if anything that has come a little bit earlier. that is very much the start of

the summer period but we have seen inventory is not billed or even draw counter seasonally in q1 in certain month, the physical market continues to remain very strong and you are just seeing finally that being reflected in prices. the physical has been telling us very good three months now, but now we are starting to see that catch-up. jonathan: we had seen false starts before when it comes to demand picking up in china. how real is that the main story? amrita: i don't think the china demand story is the driver here. we are pretty conservative on china growth. only half a million barrels per day. china is actually more of a staple story. i don't think it is negative but it is not hugely positive either where i think the bigger drivers right now is on the supply side. we are seeing mexican production struggling and mexico's national oil company cutting quite a few

refineries of production. you see the u.s. production drop that happened in january which was far steeper than most people have expected. that is still struggling to go -- grow so you have seen quite a few pockets of supply weakness and demand overall on a global basis is healthy but i don't think it is necessarily a china story. lisa: there is spare capacity. i'm looking at saudi arabia, united arab emirates. at what level can use the opec-plus led by them actually stepped in and add more supply to the market? amrita: soy think the one thing to keep in mind is that opec-plus, the uae, whoever you talked about, they are not targeting any specific price levels. for them the key is going to be to ensure that all the inventories that are built up, let's not forget we did have a built two years ago but we hadn't lost russian production. last year the second half we drew, but the first half we felt as well, so the overall draw was small.

opec-plus is looking to draw down the excess inventory to make sure that the market is in balance and only then will they gradually bring back production and again, gradually is the key word. you're not going to see them come back with all of the voluntary cuts back, it will be a very slow process. lisa: if you say this is a supply issue, which is interesting because other people have come on the show and said it is a demand issue, but if it is, how much with us continue to offset any supply that gets taken off elsewhere? amrita: u.s. production we actually don't think he goes back to 13.3 million barrels per day until july of this year. it is going to be a gradual process. last year the surge we saw was also driven by a lot of m&a activity. companies were getting bought and just before they got bought, they would surge in production to increase their valuation. that is kind of coming to a halt. companies are beginning to build quite a good of inventory so that is what they are doing right now. so production growth is going to be slowing down this year.

and then against that, demand is good, about 1.5 million barrels per day of growth, and that is why i think the fact that you've seen supply not grow as much as what we seen last year has caused these imbalances in the market. annmarie: these oil prices spell higher gasoline prices in the united states. do you think he draw on the spr and how much do you think they will draw on the spr? amrita: i absolutely do think the u.s. spr releases the summer. the u.s. has been refilling at about 3 million barrels per month. that has been continuing but now with prices where they are and prices above $79 i think that is going to stop, the refilling is going to stop, but i do think about 30 million barrels which tends to be the volume that gets emergency releases can absolutely be used in the summer, should oil prices go up. oil prices are not the same as gasoline prices and leasing crude oil do very little to

alleviate for dollar gasoline prices, but this is politics. jonathan: he used a couple of words. politics is one, another one is emergency. talk to me about how we define emergency and when it became a political tool going into elections. amrita: i think historically the spr is very much designed for and used only for your supply disruptions. 2011 libya and subsequently whenever you actually have a supply outage. russia, there was an expectation that we were going to lose russian lies but the sanctions and reality were never really designed to make russian oil taken off the market, so that is why it was admitted in incongruity. the sanctions were actually not designed to take the russian oil off. but that is when it started to turn and we actually do get a sense that now, the spr more

widely is used as an energy policy tool. it is no longer just for supply management or supply loss management. jonathan: interesting, thank you for weighing in. now, do they have space for this? are you looking at the supply dynamics right now, record production not just in america, but worldwide. ultimately this is a shift, if they shift from what this tool used to be and what it is used for now. lisa: and how long it can continue if they don't replenish it. how much firepower do they have? let's say saudi arabia doesn't bring more barrels back online heading into the election. what this leaves this administration with in terms of tools, does it become basically policy war between the different oil centers warring up against each other for political aim? is that what we are looking at? annmarie: we are going to be sitting down with mohammad bin salman on thursday and i think what they can put to him as we

contact the spr again or you can potentially start to use some of your spare capacity. they are putting in just a little under 9 million barrels per day. they can go to 12, they have that spare capacity. do they want to? jonathan: just in and around 89, 88.61. coming up next on this program, belrina uruci. that conversation is just around the corner. crude breaking out in the last 24 hours, bond yields breaking out as well. a 30 year through 4.50. from new york, this is bloomberg. ♪

not all caitlin clarks are the same.

caitlin clark. city planner. just like not all internet providers are the same. don't settle. you want fast. get fast. you want reliable. get reliable. you want powerful. get powerful. get real deal speed, reliability and power with xfinity. she shoots from here? that's kinda my thing.

♪ jonathan: equities on the s&p 500 -50.4%. if you woke up, and maybe you are just waking up, and you are thinking all right, not much going on here, as that is down half of 1%, the rest of the small caps down 0.7, it is happening elsewhere, it is happening in the bond market is pretty impressive so far how well this equity market has to dump. a double-digit move yesterday, yields up, a move this morning, mid single digits, six faces once. new high for the year on a 10 year, on a 30 year.

lisa: and it is the why, and that is whatever and says when they come on the show. higher bond yields are great but they are higher for the right reasons, basically because demand is more about his strong in action be good for stocks. people say that there should be a broadening out in the market and that is what we have been seeing. today we see the opposite. you see the russell 2000 underperforming, so how consistent and you see the story of broadening out and some of the smaller companies truly rallying? jonathan: the one broadening out that my continue, energy equities in large up by something like 10% incur by this move -- encouraged by this moving crew began. plenty of reasons for a lot of people to be bullish crude at the moment. lisa: from a demand-side because potentially even china could be coming back online and as we were hearing from amrita earlier from a supply side, this idea of curtailed supply whether it is

mexico or the middle east and this is really going to the heart of is this going to be distant visionary or in laois mary? jonathan: the geopolitics in the mix as well. top story for you, iran is blaming israel for a deadly airstrike on its embassy in syria. the strike in damascus late monday killing at least seven iranian personnel including senior military commanders. israel has yet to confirm the attack. officials agree to continue talks have expected operation into the gaza city of rafah. that event really important developing in commodities. annmarie: and this is truly heightened attention given the fact that this airstrike biggest in terms of assassination of the surviving illusionary guard since possum soleimani. we know iran will have to respond. how do they respond? the usually go through proxies. this means lebanese hezbollah to the north, more attacks moving into the indian ocean?

we don't know but we do know that they said revenge is coming. jonathan: the prospect of a regional conflict. lisa: honestly simmering and referred the earlier from some of our guest basically is going to escalate on some level. the question is, if that kind of the are seeing right now? this is really hard to get your hands around. the more interesting question to me, at the u.s. kind of lost its clutch over israel? is that really the main risk, not iran, but israel going after has full in the north? jonathan: certainly alluded to that but maybe we overestimate the influence that it stays has on israel and netanyahu. that was kind of what he was alluding to. annmarie: d also spoke about how iran doesn't want disruption to its main source of income, the oil market. israel has a goal to root out hamas and some of the iranian proxies, so that has become really the goals that are not working together to well. jonathan: clear and obvious

escalation in the middle east. starting to see that breakout continue. brent crude, 88.59. our next story, president biden will visit baltimore on friday to survey the collapse francis scott key bridge. currently only a small shipping channel is open since the disaster last week. washington post reported the companies which own and operate the container should have asked if the judge to excuse them from any liability or cap damages at $43 million. big question last week, where is the liability? who is responsible and where does the money come from? annmarie: we heard from the treasury secretary and president biden that there obviously is going to be some liability, put the president that he wants to get her money in there as soon as possible, so some federal money did go there immediately. yesterday she pretty much insinuated there's going to be a bit of a night when it comes to this in congress. his congress, which you have

many on the right thing they need fiscal discipline, going to want to spend billions of dollars to the blue state of maryland? she said yesterday is a complicated scenario, we are going to have to have those conversations. jonathan: money and time. money, lots of it. time, weeks, months, years. lisa: this is my shocked face for the fact that things aren't going to move quickly in washington, d.c. but you have to wonder what it's clogged up in the meantime for the region. jonathan: pushing back rate cuts, the asset manufacturing gauge showing expansion for the first time in 16 months. investors looking ahead to a slew of employment data including jobs adp, jobless claims and u.s. payrolls. the payroll data this week are likely to show the economy continuing to edge up at a healthy pace of the january strength was likely distorted. we will need to watch the jobs report closely once again for all its flaws. can we talk about the d-were

that you use for january, likely distorted? what did you mean by that? blerina: there was a pop in january that was not corroborated with what we seen in february and what we've seen with the trend in the economy more broadly. perhaps that weakness in inflation we saw in the second half of last year was exaggerated also and it was more pronounced than the underlying strength of the economy probably allows, but also i would say that january looked too strong and the economy both on the labor market side and elation is going to moderate in the coming months. that the question is how much and how much space is that going to allow the fed to cut interest rates this year? jonathan: he said to look ahead to the data and the job or connect think you referred to the job or as flawed. it is interesting because i know you are not alone.

a lot of people would agree with you, there are flaws to the jobs were work, but chairman powell himself looked to job openings as evidence that may be their policy was having an effect on the labor market. is that why it is important to you later this morning? blerina: well we are all paying attention to it because it was an early indicator of the extent of the tightness of the labor market, that spike in the vacancy rate, they all told us that the balance between supply and demand and the labor market was really off, let me know the issues, response rates, sample size, being online but not really being serious job postings, so we have to look at a range of data. but there are some aspects of the report such as the quits rate which i think are very timely, and they've been correlating very well with wage inflation lately.

so i would look at this, and there is a big, clear question here that we are discussing since her report in february which alluded to about a $3 million the labor supply shock to the economy in 2023, and that question is what is the breakeven rate of payroll growth the u.s. economy this year? should it be around 100 k as we had been expected before, and that 100 k employment growth means that the unemployment rate can stay more or less flat, poor is it higher --or is it higher? strong growth does not necessarily need to be inflationary and the unemployment rate will not require further so for this, that is when i alluded to. for this, we need to look at what happens with vacancy rates in the coming months and what happens to the with rate because if those increase again, then this report is telling is a

different story. it is telling of the labor market is becoming unbalanced again. lisa: how concerned are you that people are too quick to dismiss good data as an apparition? blerina: well, it is a fair question. we tend over the last two years to be a little bit too optimistic about the u.s. economy, not taking into account just how strong the u.s. consumer was and how that was going to pull the economy forward. we got some fiscal tailwinds as well. the question i january is not so much about dismissing good data, but taking it with a pinch of salt and saying the economy is in a solid footing that isn't overheating right now when interest rates are as high as about 5% or not. lisa: this is the reason why i find oil pressure so interesting today. not just oil the commodities more generally.

we are looking at messy data when it comes to some of the incoming economic figures, can't we just look at the commodities space and say that this is evidence of just how much demand there is out there at a time when you are seeing wrote comeback not only in the u.s. but also in places like china? blerina: so that is a fair question in the thing with commodities is that there are somebody factors that drive it. it can be geopolitics, it can be shocked to supply, and it can be demand. basically, putting the relevant weight on those factors matters a lot when you are going to use commodity prices as a signal for what is happening with a broader economy. another thing we know about this business cycle is that the u.s. economy has really over performed the rest of the world and emerging markets. so this pickup in commodity prices could well be signaling that is economy that have been underperforming the u.s. are

coming back online, but i don't think it is telling us something new about the u.s. economy. jonathan: before you go can you help us translate the fed speak ahead of time? i mean, how is any of that helpful? i don't know, but that is the schedule. can you tell me what you're looking for this week? blerina: how much time do we have? it is a really packed calendar this week both with data and with fed speak. i would say i am looking for how is the committee consensus evolving? we know that they want to signal they aren't having biased. the data is getting in the way of the fed cutting perhaps by as much as they want. they signal in march 3 cuts for this year and deals like that is basically the ceiling for the market. any positive surprises to the data run the risk of first of

all pushing the first cut july and also pushing that number from three cuts to two. so how is the consensus evolving, how are the hawks dealing with this? i'm interested to know and also if i'm not mistaken, we have powell this week, so i would say he was fairly dovish during the press conference, slightly less than fishing this interview on friday. i want to hear from him today what is his personal view? he's going to speak specifically to the economic outlook and what are the miles because he would say they are data-dependent. what data are we looking at and what are the ranges that will guide them toward a cut? because they also said we are not too sensitive to get news on the labor market.

jonathan: as i was reading all those, i scroll down and there was another seven on friday. another seven scheduled speeches. lisa: i'm actually looking forward to it. these are the questions that i would like answered directly. who eats lunch together? how happy they are with powell, whether they get together frequently, they are looking to communicate, what data they are looking for, and most importantly, what they think of bonds. jonathan: is this fed speak or "mean girls?" what is this? who eats lunch, what they think of the headmaster. annmarie: they are all going to say look we all get along, but there have to be camps that are starting to get formed. there's a consensus that is kind of fraying around the edges and resolve that. jonathan: within that is a serious question, i know that.

sticking up. we talked about it being contained in yesterday's session, contained just a little bit this morning as well. down about 0.6% on the s&p, starting to catch up with what is happening in bonds and commodities. lisa:lisa: it challenges the valuation proposition at a time and people are getting queasy that the biggest to quarter rally that we see going back more than a decade, how much you can really keep surviving on the mentor malone. jonathan: i like what blerina said, chairman pal reflecting the consensus of the committee and the news conference of the federal reserve and maybe just getting a little bit more of his own opinion across in the next couple of days. it is worth looking for. lisa: how much of the dovish tilt is him vs. trying to reflect the committee? jonathan: put it better than i did. yahaira: boeing's bumpy year is being felt by pilots at united airlines. the carrier has asked pilots to take unpaid time off next month as it grapples with delayed

deliveries of new boeing planes. fewer planes would reduce the number of flying hours ned pettus play for pilot the additional time off excess staffing. the move could extend into the summer and potentially the fall. ubs says it plans to buy back up to $2 billion of its shares with up to $1 billion of that total expected place this year. the swiss bank confirming the repurchasing plan today after having suspended previous plan a year ago amidst takeover of former rival credit suisse. the bank said it expects to complete that merger by the end of the second quarter. rubric of cloud and data security started backed by microsoft has filed for an ipo. this adding to the roster of companies planning to go public after successful trading they used breaded and stair labs. that is your bloomberg brief. jonathan: thank you. just an update on what is happening with revia, they

delivered 13,588 against an estimate of 11,893. that is an upside surprise, the stock is firmer. still waiting for numbers from tesla. up next on the program, lowering expectations for tesla. >> all ev makers have had to lower their prices moving back and forth. jonathan: we will catch up with ed ludlow up next on the program. live from new york city this morning, good morning.

to me, harlem is home. but home is also your body. —last one everyone. i asked myself, why doesn't pilates exist in harlem? so i started my own studio. getting a brick—and—mortar in new york is not easy. chase ink has supported us from studio 1 to studio 3.

when you start small you need some big help. and chase ink was that for me. earn up to 5% cash back on business essentials with the chase ink business cash card. make more of what's yours. ♪ jonathan: 42 minutes away from the opening bell in new york city, date two of q2 and it is shaping up as follows.

the equity markets are into wake up to what is developing elsewhere. the s&p 500 down by 0.6, we are down one full percentage point on the russell, the small caps lower. here is the elsewhere. the two year yield very, very close to the highs of the year. the highs of the year, 400 74.89. on a 10 year, doubled move yesterday up another nine basis points now this morning. there's you-the year, very close to four 40 and lisa, a clean break at 4.50 on the u.s. year. lisa: is the why but i find interesting. yesterday we got the prices paid they came in higher. today is the oil, is it just this idea that maybe people are not as sanguine the idea of the fed can fully cut rates in a significant way? why am i the more important right now. jonathan: talk about why. brent reaching that level earlier this morning.

wti up by about 1.3%. leaves some attention in the middle east, a big starter that -- the tension in the middle east a big part of that story, too. lisa: people saying it is a supply store including amrita sen and people saying it is a demand story including kathy jones. it depends how persistent it will be and whether it could be more inflationary or less. jonathan: put it altogether and that of the recipe for stocks moving south. we are down on the s&p 500. lowering expectations this morning for tesla. >> all ev makers have had to lower their prices maintain market share moving back and forth. i think tesla is finding a flow in china, and a place where they have been setting things in the

country in recent months. jonathan: analysts tying estimates for tesla vehicle sales as they face going demand and higher rate pressures a bloomberg survey saying, let's expect first quarter deliveries of about 109,000 that would be down 7% from a record fourth quarter. ed ludlow joins us amend the table for more. are we going to see a tesla problem or a ev problem? >> both. tesla has a clear strategy which is heavy discounts for the end of the order in all market and they telegraphed it. they said it will persevere one to raise prices which is interesting in the context of china because everyone else in china did the opposite, continue to get deeper with more incentives. tesla talked about finding a flaw based on the actions they took this, they founded it. particularly in the 40,000 u.s. dollars range. that is the problem with the market. it is pricing the sensitivity. the tesla problem is they only make four cars and what we

learned particularly in north america is consumers love choice. they love it cheap sedan, they love the sort of cheap suv that has a gas engine right now, and the model three in model y in particular which is 90% of their sales is not the resonating anymore. lisa: is anyone actually buying tesla outright or are they releasing and depending on financing for somebody else? >> fantastic question. musk has click talk about the impact of race, whether he will talk about the fed and rates. in this country is particularly important on financing. end of last quarter i leased a model why vehicle leasing cost was so low. $300 per month. but if i were to have financed that vehicle from a sheer cash flow perspective you're talking $700 and -- a month. lisa: what with the advantage have been for you to buy it outright? > from my personal economics it wasn't an option but i think the answer is that you think

that the model y will retain its value three years from now or you think that tesla strategy to keep the model why relevant software update. my kind of thinking was probably obsolete, similar to what? you might want greater range or a more complex software. blerina: i want to ask you about china because last year when you see the uptake of chinese individuals going out buying cars, a quarter percentage, a quarter of those cars were going to ev's. not hybrids, ev's. if tesla is not competitive in china, can they be a global leader? >> tesla is going through in china what mercedes with. it is a western automaker where there is a status implication of eyeing a tesla. the difference in that market point out, it is much more mature, there's higher penetration and ev sales but there are many more demented players offering wider range of race points. the story of this week, they are coming out with a $30,000 ev,

whether it materializes or not, we will see, and on the other end, you have the luxury players the problem tesla is having is finding where it sits. pierre was talking about the floor on pricing that there is also the design and spec of the model y and model 3. right now it is kind of that mid nothingness of the market rate is not a luxury car nor is it a budget option either. lisa: they almost look like each other. when you say that it is almost a tesla model to mark >> i don't want to get into ed ludlow the car critic of the curvature, the design. the criticism people have with the model why isn't this just model three. that in the north american market is absolutely. it is why rivian at first had a lot of success because 75% of american urges is in the last decade athens big, bulky suvs.

they are very similar to everything else that is out there. jonathan: i have one question that has dominated for me the history of the last couple years. for demand is so great, if these vehicles are so good, why is there a price war? >> that is the thing, i don't know that demand is so great. it is important to state the basics. we still have growth. this sort of price for any market and everyone heralds of the market for ev's, in is great, everyone wants them why is there a price war, then? >> policy. the chinese government were much quicker than the u.s. to put policy support in place in the first place and then taken away. there haven't been government-like incentives in china for a couple of years with that comes out of pocket of the automakers themselves. you have to get the balance right. you unlocked the addressable market by cutting prices. you loosen the bottom line and

then that market runs out. there are only so many people buying it $40,000 in china. jonathan: there isn't a viable market would the policy support anywhere. there isn't one in china, not one in europe, not one in the united states either. you need the policy support for this to grow. lisa: and the reason for the policy support is different depending on the region. for china it may be dependent on the fossil fuels they import. for u.s. it might be for great ambitions, but it is different and there a different price underpinnings as well for both regions. jonathan: this is great, fantastic. looking forward to tomorrow because we are going to have a lot to talk about. michael collins and former house majority leader eric cantor as well. your equity markets breaking down just a touch, the s&p session lows. -0.7%. bond market yields very close to session highs and new highs for 2024.

you will catch the open 34 minutes away. this was bloomberg surveillance. so, what are you thinking? i'm thinking... (speaking to self) about our honeymoon. what about africa? safari? hot air balloon ride? swim with elephants? wait, can we afford a safari? great question. like everything, it takes a little planning. or, put the money towards a down-payment... ...on a ranch ...in montana ...with horses let's take a look at those scenarios. j.p. morgan wealth management has advisors in chase branches and tools, like wealth plan to keep you on track. when you're planning for it all... the answer is j.p. morgan wealth management. her uncle's unhappy.

the answer is i'm sensing an underlying issue. it's t-mobile. it started when we tried to get him under a new plan. but they they unexpectedly unraveled their “price lock” guarantee. which has made him, a bit... unruly. you called yourself the “un-carrier”. you sing about “price lock” on those commercials. “the price lock, the price lock...” so, if you could change the price, change the name! it's not a lock, i know a lock. so how can we undo the damage? we could all unsubscribe and switch to xfinity. their connection is unreal. and we could all un-experience this whole session. okay, that's uncalled for.

jonathan klein a very good morning -- manus: a very good morning. vigilantes being woken from their slumber. countdown to the open starts now. >> everything you need to get set for the start of trading. this is bloomberg the open with jonathan ferro.