>> the fact is we are likely facing a slower growth, sluggish economy out of this, and that is a great actor for secular growth. >> a lot of businesses are not buying into the v. they see a different destination. >> people have got the wrong impression from the data for may and june. what really happened as the economy fell off the cliff, hit a trampoline and bounced. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: for already and's -- for our audience worldwide, good morning. alongside tom keene, together with lisa abramowicz, i'm jonathan ferro. keene, earnings season beginning in the united states of america, and european fiscal policy coming into sharper focus at the back end of the week. tom: it is a busy week ahead. i can't say enough for the importance of the cola -- of

pepsi-cola's earnings this morning. gina martin adams of bloomberg intelligence has been absolutely dead on on the earnings surprises we are going to see off the glue. pepsi -- off the gloom. -- camecame in al in almost flat. futures up 18. onathan: futures positive the s&p by 0.6%. cfohing up with the pepsico a little later on. this thursday, the ecb will be meeting. this coming weekend, european leaders get together. that is a huge focal point. lisa: the frugal five coming out, trying to push back against 750 billion euro programs. the fed very much and focus this week. we get a slew of fed speak ahead of the blackout period next week.

a.m., andrew williams and the boe governor andrew bailey joining to talk about libor. then robert kaplan talking about covid testing and recovery. at 2:00 p.m., will get the u.s. monthly budget statement for june, which should show unprecedented deficit for the u.s. budget. jon, no one cares. this is not being reflected in borrowing costs or in what people are proposing washington. jonathan: in your equity market, we advanced 0.6% on this monday morning. a series of revisions for big neck we will get into a little later. for the broader market, there's been a massive conversation about tilting away from the u.s. and towards europe. we can start that conversation with mike pyle, kruk mobile chief investment strategist -- mike pyle, blackrock global

chief investment strategist. especiallyn't negative view on the u.s. had as. year-to-date has tremendous runabout performance. we just think over the next six to 12 months, there's that risk coming into focus that the u.s. is going to perform a little more in line with the rest of the black what he rather than continuing that strycova continuing that risk of outperformance. we just think the headwinds are stiffening a bit. see ae look to europe, we very robust public health response allowing a very strong restart of economic activity, and we are still quite constructive on what we are seeing on the policy side. tom: that's what is so important here, life goes on. we are celebrating back with our simulcast in the office. again, thanks to all of our team

for helping. we are also celebrating mergers and acquisitions. of berkshiretion hathaway, of analog devices, can they be supportive fo equity markets? mike: i think markets were left focus -- were less focused on the m&a story. equities.edit over we see the policies in place, especially from the fed looking ahead, continuing to be a strong, resilient source of credit support. we continue to like the up in quality equity marketplace. tech, pharma. those strong business models. we think those will continue to be rewarded in the u.s. even as we see those increased headwinds for the equity market overall. lisa: people agree with you with perspective credit. we see money filing into investment grade, and yet the fed is paring back some

purchases of corporate debt. their balance sheet has actually shrunk. we are heading into a slew of expected bankruptcies. why go along credit now? mike: we continue to see the fed backstops as extraordinarily credible on the credit market side. one of the things that has been striking is just how little to date the fed has had to do, to your point. but because of the credibility and size of those backdrops, which we see as ongoing, the market will continue to digest that issue. moreover, when we look at some of the choppiness i had around the economic restart because of some of the challenges on the public health side, we think that is going to be very resilient even in the face of more challenging fundamentals. jonathan:jonathan: i wonder where that leaves your view on u.s. tech this morning. its view ongrading

amazon. mike: we are overweight quality exposures on a global basis, including in the united states. though we are cautious on the u.s. equity market overall, the parts of the equity market close to the real economy and the real economy challenges closer to some of these risks on the fiscal side. quality exposures on tech continue to appear resilient, regardless of the state of the world we see moving ahead, so we like that part. jonathan: this is a u.s. centric conversation. as the week grows older, the focus will be more on europe and the continent. blackrock has changed his view on europe as well. what is behind that? twoe: i think we are seeing big things at work. one is the really strong public health response we are seeing across the continent, allowing a

much stronger restart of economic activity. we think those fundamentals matter. they are going to matter inflows through to the economic data in financial markets. secondly, we have increased confidence in the overall policy framework. we will get news later this week and the rescuet package. but looking at national fiscal authorities and steps from the ecb, both of those look for to constructive. tom: mike pyle joining us from blackrock. we welcome all of you on bloomberg radio and bloomberg television. something i am really unclear on , has health care ballooned like the tech stocks, or is health care behind? say we sort of see health care particularly the pharmacies in the u.s., as

having some legs behind it. those are really strong business models. there's a lot of focus on what that part of the health care world is bringing to society, bringing to the market. i think that is a space where we see quite a bit of upside. lisa: you talked about how in europe, they've got the virus a bit more under control. certainly more than the united states, which is seeing record numbers of people diagnosed with covid-19. and yet, the market doesn't seem to care. this is something that a lot of people have talked about, that the market goes up even as we get these record tallies. what are the main risks, if not that, to market levels right now in the united states? is it the election? is it something else we were factoring in enough? mike: i think it is all of the above. you point directly to an ongoing set of challenges on the public health side. i think that is going to weigh

on the restart and parts of the u.s. economy and financial markets that aren't as tech centric or pharma centric. i think we see a set of fiscal policy risks later this month and before the end of the year, potentially posing risks around retrenching. theink as we look ahead to election, there's a good degree of uncertainty both in the lead up to the election itself, what could be a very volatile environment. there's also a set of policy platforms that the voters are going to be choosing from, and investors will have to confront. jonathan: overwhelmingly the consensus view is that a democratic sweep would be negative for this market. is that your take? mike: i think on one side, it is clearly right that investors are focused on a set of potential changes on corporate taxes, a significant repeal of what the trump administration and congress passed in 2017, that

will certainly have some throat -- some flow through to the bottom line. but the other outcome is probably more constructive for ongoing fiscal stimulus through the coronavirus shock, much more positive around may be getting something done on infrastructure and r&d investment. probably more positive in terms of a stability or pricked ability to china policy and what have you. are seeing the bottom line risks are real, but they are potentially set of topline opportunities that make this a much more balanced picture. jonathan: the conversation you and i will continue with the rest of the team sometime. it has been amazing to watch this consensus emerge at the risk is here in the united states and the constructive view is over in europe. that hope is going to be put to the test a little late week when the european leaders get together. we need to see some firm progress through the weekend. tom: we have said this before and been wrong, wrong, wrong

again. our previous conversations really center on how the netherlands were on. what i would focus on now is futures exploding. we've gone from up 14 two up 22 on spx futures, the 3200 level. jonathan: i know you are excited to be back, but i don't think it is futures exploding. tom: you know what is great, jon? the distance between you and me and our quarantined and socially of theed is the links goal against tottenham this weekend. jonathan: watching some football this weekend, tom? i'm happy we've got the perspex glass between us. fossil and so a i am hermetically sealed. alongside tom keene

together with lisa abramowicz, i'm jon ferro. from new york city, good morning. coming up next on this program, binky china, -- binky chadha. this is "bloomberg surveillance ." ritika: with the first word news, i'm rick -- i'm ritika gupta. florida recorded a record 15,300 new coronavirus cases, the biggest one-day rise since the outbreak again in the u.s.. there was some positive news. the number of deaths fell by more than half from the day before, and there was a decline in positive tests. still, there was a warning that hospitals in the miami area are approaching capacity. china is imposing sanctions against senator marco rubio and ted cruz over legislation intended to punish china for its treatment of

religious minorities. the move is largely symbolic. last week, the u.s. sanctioned a top official of china's ruling coming as party over human rights abuses. in hong kong, residents sent a single of continued opposition to beijing. more than 500,000 people defied government warnings to vote in unofficial primary aimed at narrowing down the opposition candidates competing for seats in hong kong's legislative council. a new poll shows joe biden with a five-point lead over president trump in texas. the poll, biden holds a 46-1 lead amongst registered voters. the handling of the pandemic may have influenced the results. 44% of those polled say they disapproved of his performance. analog devices has agreed to buy maximin a graded products for an equity value of $20.9 billion.

global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i medic a good. this is bloomberg. -- i'm ritika gupta. this is bloomberg. ♪

>> there's nothing in the data that suggests kids being in school is in any way dangerous. parents are expecting that this

fall, their kids are going to have a full-time experience with their learning, and we need to follow through on that promise. jonathan: education secretary betsy devos taking some heat over the weekend, appearing on fox news. from new york city, good morning to you all. alongside tom keene, together with lisa abramowicz, i'm jonathan ferro. getting you prepared for the opening bell this monday morning. morning to you all. equity futures advance on the up 0.7%about 0.2%, after two weeks of gains. in foreign-exchange, eurodollar $1.1334, positive 0.3%. into the weekend, european leaders getting together to try and broker some kind of deal on where the money should go and who is going to pay for it. tom: it will be interesting to see. are any things

to talk to kevin cirilli about. i know jon is really focused on the stimulus timing, when we are going to see at, but i've got to go back to what we just heard from the secretary of education. it's been 122 days since i've been in the office, and i haven't heard a comment from any government official more off the mark. i guess we've got some technical issues with kevin right now. let's pick right up on this. the secretary of education talking about everybody wants to go back to school. that is the most offkilter comment i've heard in 122 days, in all my contacts. nobody buys that. jonathan: i think what we can say, where the huge agreement is, that if we can't go back to school, we can't get anywhere near normalizing this economy. there are 70 people that cannot go back to work. that is the focus of this administration, trying to normalize. the problem is they opened up too quickly across many states,

and we are experiencing the downside of opening up too quickly. you and i are living this. without exception, college, high there isursery school, a profound impact here that the secretary just seems to be completely removed from. lisa: my 11-year-old said to me pretty much every morning, do you think it will be normal in a year? maybe in two years? president trump saying it will be in the fall. kevin cirilli joining us now. isaac we have worked out those technical issues. can you talk about any pushback, if there is any, about reopening the schools and doing it too quickly at a time when president trump would like to see things get back to normal as soon as possible? kevin: this is the crucial debate, and republicans want to have this debate, especially as they are staring down economic stimulus because schools are going to be at the negotiating table for the next round of economic stimulus.

frankly, republicans are saying they want to be on the side of reopening schools, even if there is a lot of uncertainty surrounding that. democrats are saying if that is the case, than they are going to need more money to make sure that the classrooms are safer. debateway, this is a that republicans looking at polling, looking at independent polls in swing states feel is going to help them. of teachershe idea unions and all of that, but is this really just about election positioning? kevin: i think there obviously is the influence of data particularly as it relates to if there is going to be an uptick come the fall. universitiesg across the country make different decisions as it relates to sporting leagues, but also whether or not students should be able to come back on campus.

, some private schools are suggesting that several days a week, there might be online learning, and really forcing parents to make a choice. but the bottom line is that this is really illustrated all of the inequity in the education system, and it is just one more microcosm of that. jonathan: the president seen in a mask over the weekend. i am not going to get snarky about this. i think there has been a real shift in the rhetoric from this it ministration over the last several weeks. there was one pole over the weekend where democratic nominee joe biden led the president of the united states by five points in texas. how worried is this administration? kevin: they feel that they need to make this president trump versus former vice president biden. right now, it is trump versus coronavirus. that is good for the democrats, bad for the republicans. for the republicans to get back on offense, based on conversations i have had with

strategists, it is going to have to be trump versus biden, not trump versus coronavirus. tom: what is vice president biden's agenda this week? kevin: he is going to be continuing to tout his economic plan that he put forth. he's going to also be engaging in a series of small discussions with small business leaders. the focus for him has been from a strategic standpoint to continue to make the focus about trump. the: health very much in front and center. anthony county has been increasingly sidelined. who is taking his place to lead the charge against covid-19? kevin: dr. fauci has been largely politicized. you had the former vice president saying he would have dr. fauci continue to serve in his administration if he were to become president. meanwhile, last week i interviewed dr. deborah birx, another top fishel in the administration who is really

working behind the scenes on issues like education and reopening schools. but at the end of the day, i think it has been this reliance upon the private sector in terms of some cases for the economic data as it relates to whether or not businesses can reopen, but from an education standpoint, to say it is volatile is an understatement because the education system here in america has been so politicized with public versus private, charter schools and what's not -- and whatnot, and that is really coming to a boiling point right now. jonathan: kevin cirilli, always great to catch up with you. tom keene, pretty much everything is politicized, but maybe one area that never should have been politicized come the use of masks. i cannot believe how badly that was messed up in this country. let me be clear about this, it was not just the ministration. -- the administration. it was health officials several months ago telling people not to

wear masks because they would to build up stockpiles. is it any reason why people should be wondering why there is so much confusion still about the use of masks? tom: isn't there confusion in the united kingdom as well? maybe so. you have to wear them on public transport, and they still haven't got this addressed. it is just ridiculous that it is the middle of july, this has been going on for months, and we are finally getting some kind of movement at the government level in both the u.k. and the united states on an issue that should've been addressed months ago. tom: there's no question about it. you go to the interviews we've had, including with stephen riley, and the urgency is even greater. jonathan: on the s&p, we advanced 0.7%. up next on this program, inky china -- this program, binky chadha.

from new york city, this is "bloomberg surveillance." ♪

jonathan: from new york city, this is "bloomberg surveillance ." we are live on bloomberg tv and radio. alongside tom keene, together with lisa abramowicz, i'm jonathan ferro. two hours away from the opening bell this monday morning. your price action shaping up as follows. after a rally to close out last week, two weeks of gains, and we add some weight to it this monday morning. up 0.7% on the s&p 500. america. cpi in thursday, retail sales and jobless claims. the euro advancing into an ecb meeting this thursday. , really muted price action this morning. yields unchanged. tom: now on the equity market, and exceptionally important interview with binky chadha of deutsche bank.

particularly, what flows of money are doing. thrilled to have you with us. paragraph reread your on something i lecture about, which is positioning is everything. tell me the positioning or lack thereof of this bull market run. is thathat i would say the story of the huge bounce we have had since march 23 in the s&p 500 is really a positioning story. what we had is a very unusual in termsthe sense that of the news, you have a very synchronized negative impact. the market at the time was max overweight because basically every spectrum of equity investor, we all got the news of the same time, so a very

negative shock. maxyone went basically negative. since then, it has been largely a story of a really classic short squeeze. i think the actors relative to the historical textbook you may have been lecturing about is a little bit different. systematic strategies are very important. so we fast forward to this week as earnings again. isould say the squeeze basically on again. think earnings are basically set up in the context of .nderweight positioning world changedour by such substantial negative real rates? how does your equity world change given what fixed income is giving you?

binky: i would say that low rates, especially negative rates, are really bad and made life very difficult for active equity fund managers, and that is because rates are clearly a factor. if you think about equities, if you take the market, you can sort of line them up on one side as bond like and at the other end is most equity like, so rates matter. when rates are far away relative , that is basically going to cause some major issues and has caused major issues. rates -- lowgue no rates or negative is really the bottom line, so we really need rates to start going up to have the cyclicals perform. you would expect the cyclicals to perform, but if rates

artificially compressed, that is not going to be very good. lisa: the idea that positioning favors u.s. equities to go higher, unless real yields go up, it is not going to be favorable for cyclicals. are you saying that the technicals are favorable for big tech right now, even though i am not sure who is shorting that? is somebody out there aggressively shorting apple and amazon and facebook right now? binky: no, i would basically say that i was speaking about positioning at the index level. one of the things we emphasize is that there's really been a tale to equity markets. we have the mega cap growth that havethe one side basically been trending up, and they are well above where we were prior to the breakout of the pandemic. everybody else is way lower.

the positioning of the index level i would differentiate from moving in the equity market. i would argue basically that where everybody is underweight callerywhere else, and our is basically that there's nothing wrong with the mega cap .rowth stocks and tech they do grow much faster, so you want to be neutral. we do want to overweight the cyclicals tech clicky -- cyclicals tactically, especially for the next few weeks. i would argue earnings are set up for a beat. if you take a look at the bottom up consensus, you will note how rapidly the shock hit in march and april. come about by mid-may, the consensus had stopped falling. history will tell you that , a once downgrade

stock, you're going to get and wes or downgrades, got massive positive surprises on the macro data, so the consensus would have started to move up. but we also got a resurgence of upgrades, so those basically never happened. timing,hink about the it was really later, and the economic impact was later. if you look at the macro activity pulse index or look at citigroup's data, they have basically gone to a place they've never been before. they were twice any kind of prior peak. there's a lot of moving parts, but on net, i would say earnings season is likely to beat positioning, especially the

cyclicals are very low, and become a nation explains why the financials were doing very well on friday and there has been pressure on the market to move up. but there's still a clear number of unknowns. i'm not saying it is straightforward, but -- is still up. jonathan: the allocation to cyclicals, i've had many people come in this program and say you want to maintain the allocation to u.s. growth, but if you want to take cyclical risk, take that play through europe. what is your response to that? binky: it is very simple and very short. absolutely, i would be overweight europe and overweight .apan that is really the same call as being overweight cyclicals in the u.s. take the u.s. equity market divided into the mega cap growth stocks and everybody else.

you basically see that they bounce from the bottom, but essentially go sideways the last few months. if you overlay other regional equity markets, you will see ex-mcg.l cluster around happened, i am sure it is not going to happen in a straight line, but we have a pretty big bounce in the data so far. that is really not priced in. struggling to find people who aren't overweight europe. vulnerable is that to a cyclical hiccup this weekend? binky: moderately so. if you look at european performance relative to the u.s., especially if you do it youcg, you will see that

are basically moving together, and europe is sort of more resilient. on the policy front, think about the fact that it doesn't happen now. -- that if it doesn't happen now, we will get it later. if we don't get it all, we will get some. so it could be a negative outcome come up with negative outcome can change, so it is not a definitive negative. jonathan: i've been waiting for a long time, and everyone says the same thing. it will happen eventually. binky chadha thereof deutsche bank. i've been conditioned to be negative, but europe has got it together so may times, and again and again, it's come out of the other side with a suboptimal, mediocre agreement. tom: explain the netherlands here. i think our audience in america

doesn't understand the nuances of netherlands between the united kingdom and particularly relationshipds' with germany. jonathan: it includes austria and others as well, the frugal four. for me, the issue is there's got to be some kind of fiscal transfer. there can't be loans. there need to be grants. if there is not agreement on that, if there is no formalized mechanism to get unity around, then i think we are in store for a huge upset coming out of the weekend. we need to see some progress. for many, it is not about the size of the agreement. it is about the mechanism they agree to. if you can get that mechanism for fiscal transfer, then over time, people will believe that sets the stage to do a whole lot more down the road. tom: we haven't touched on this with all of the other issues going on, including futures up 23, is that in the united states , there is a new urgency to get

the fiscal action done here by the end of the month. jonathan: i think we can achieve that because we know in america, there is appetite to do something on the fiscal front collectively. where the huge difference in the united states is for me is the composition of that package. there seems to be a loss of appetite from the administration to offset the shocks to income, with enhanced and employment benefits expiring at the end of the month. most people would assume that with unappointed were still where it is, these are things you need to do. what we have seen again and again coming out of the crisis, when the immediate crisis ends, the collective will fades. and we have seen evidence of that. lisa: one big question in my opinion is what would be the consequence in markets if congress did not re-up the enhanced unemployment benefits as they expire at the end of this month. jonathan: i hope they are not expiring. i hope they are tapered somewhat to account for some of the

difficulties that remain in this economy. coming up in the next hour, look out for a conversation with lee ridge at the top of the hour. from new york city this morning, good morning to you all. this is "bloomberg surveillance ." ritika: with the first word news, i'm ritika gupta. new york city reported no virus deaths yesterday, the first time that has happened in four months. since then, there have been more than 18,000 confirmed coronavirus deaths in the city. the focus in the u.s. has now shifted to the sunbelt. florida reported more than 15,000 new cases, the biggest one-day total in the u.s. top universities backing harvard and m.i.t. in their fight with the trumpet ministration over student visas -- the trump administration over student visas. harvard and m.i.t. are trying to stop the government from

enforcing new guidelines that would bar some international students from entering and staying in the country. prime minister boris johnson's government will launch a campaign to urge businesses to prepare for the end of exit -- the end of the brexit transition period. only 1/4 say their firms are ready. british authorities say they will spend $890 million on new border infrastructures. opec-plus preparing its next move. the alliance is poised to begin unwinding those unprecedented output cuts. the curbs doubled oil prices over the past few months, but a second wave of the pandemic threatens another slump in oil consumption. they are increasing supply just as the market falters, which could cause prices to crash again. in pro football, washington reportedly won't use the name redskins. after today. to mountingl bow pressure to drop the name,

adopting a new logo and new name. they will not be unveiled today, reportedly because of trademark issues. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. gupta.ika this is bloomberg. ♪

>> retail participation is very important. importantly, it means society

buys into a market-based system even more. however, you don't want retail to be the victim of a head fake? jonathan: that was mohamed and larry and -- mohammed al arian of bloomberg opinion. alongside tom keene, together with lisa abramowicz, i'm jonathan ferro. live on bloomberg tv and on bloomberg radio, your equity market closing out last week for a second straight week of gains on the s&p 500. adding some weight to that rally this monday morning. 3200 on the s&p, positive 0.7%. strength, a story many people are starting to lineup behind. treasuries stable. muted price action through the morning so far. 0.65% is your yield on the u.s. ten-year. let's bring it right over to earnings this week. i want to go into my vast knowledge of the german language . this from credit suisse morning.

"the importance and the number of branches will therefore continue to decline. measuring the branches in america, sonali basak of bloomberg news. to me, this is incredibly important come the idea of the layoffs and jobs to come. how much of this is because the pandemic has taught us it is a digital banking future? sonali: we knew that before, and we certainly know that now in full force. we had that great scoop about wells fargo cutting jobs. they kept their headcount quite high relative to the other banks, to see them now cut is just facing reality, but also bracing for a future where they might not be able to earn as much in revenue with interest rates as low as they are. jonathan: consumers are often reluctant to make the change. this has pushed many people towards digital banking. i wonder if that accelerates the cuts elsewhere that tom describes. sonali: we are not going to see cuts in full force this year. thanks came into this you're

thinking they would be the good guys. for them to cut jobs in full force right now won't look good to their employees, the regulators, so they will be pretty hesitant to make sweeping cuts. but next year, they may be ifced to reckon with that the income situation is this severe. lisa: we will get a read on the situation for banks, reporting tomorrow, kicking off the week of earnings from the big banks. my understanding is people are expecting very strong results in trading revenues, fixed trading revenues in particular. revenues will be bolstered by certain programs, the ppp in particular. others will be a point of pain. tell us what people are expecting for the week ahead. sonali: a lot of loan losses in the first quarter had come from credit card businesses, but let me tell you something else. 8% of all u.s. mortgages are either past due or delinquent. we are going to want to see how

those mortgages really play into the weakness in these banks that we didn't see in the quarter prior. consumer spending might also be tumbling, which will impact these very big banks. tom: this is great, but let me cut to the chase. what does jamie dimon actually do on a countries, -- on a conference call to signal the view forward? sonali: so far he's been pretty constructive. that's see if he keeps up that view, especially with all of the pain we are seeing from the consumer. you guys have talked about it a lot on this program. the stimulus is running off, so the next stimulus will be far less money, and may not be checks into the pockets of many americans. that will all affect his income moving forward. the idea that at bank of america, 30% of small businesses are in deferral, which is that look like at jp morgan? jonathan: the federal is

different to a loan-loss. i wonder how much clarity we will get on that as the reopening is commenced. sonali: that is a great question. of allually thinks 1/3 of these deferrals will turn into dealing would cease. what does that equate to -- into delinquencies. what does that equate to? that is significant. at jpy saw $9 billion morgan of revisions in the first quarter. we expect he second quarter to be bigger. but s&p biggies -- but s&p believes this will be significantly. lisa: we will probably see loan losses be the biggest pain for wells fargo, jp morgan, and bank of america, some of the biggest lenders. then some like morgan stanley will benefit more, purely by the construction of their businesses, from the boom in investment banking and equity trading. if that what people are expecting, much better results

from goldman sachs and morgan stanley than the other u.s. banks? sonali: what is the expectation? about 700 million dollars more in fixed income trading. that is compared with about $800 million less in interest income. so it doesn't pair off as perfectly as he would think, even when they are hitting these major highs. there's also a question for goldman, even with the fixed income trading, with them so close to their stress capital buffer, what is the story going to be for shareholders in the coming months? tom: what is the goldman story this time around? i have really lost this. what does mr. solomon need to do this earnings season? sonali: there consumer business has been benefiting from what you guys were talking about at the beginning, that digital banking model. you have the benefit of starting from the ground up, but this is such a small part of their business. tom: exactly. it is nonexistent. sonali: exactly.

so can they hold those plans steady as they start to change their bank? jonathan: great to catch up with you as always. sonali paszek, bloomberg wall street -- sonali basak, bloomberg wall street correspondent. this is a relative game of expectations going into earnings season. binky chadha of deutsche bank touched on this. for financials, the bar is so much lower going into earnings tech, than, say, big which is why some say this is skewed towards financials beating expectations. for big tech, the bar is so high and the rally has been so big into earnings season. it is a big one to hurdle. tom: you have seen that from upping price targets on amazon. i will buy that theme, but the answer is tech got where it got by outperforming. but it really doesn't matter

because the triple leveraged may buy thed, i bank index and nibble just a little. jonathan: you're going to come out of cash? tom: i didn't say that. i'm singing about it. jonathan: lisa is -- i'm thinking about it. jonathan: lisa is worried. [laughter] lisa: i will say when it comes to banks, when you talk about pessimism, the kbw bank index is down 34% year-to-date. -- tom:tom: wow, wow, i didn't know that. jonathan: counting you down to the opening bell, we are up 0.7% on the s&p 500. building on the rally of the last couple of weeks. we have seen the narrow breadth

start to broaden out a little bit more. from new york, alongside tom keene, together with lisa abramovitz, i'm jonathan ferro. this is "bloomberg surveillance ." ♪

>> the fact is we are likely facing a slower growth, sluggish economy out of this, and that is a great backdrop for secular growth. >> a lot of businesses are not buying into the v. they see a different destination. people who >> >> got the wrong impression from the data from may and june -- >> people got the wrong impression from the data from may and june. what happened is the economy really fell off a cliff, hit a trampoline and bounced. tom: good morning, everyone. "bloomberg surveillance" on bloomberg radio, bloomberg television.