♪ >> right now where we are, markets are pricing in a stimulus that hasn't yet been approved. >> we are creating really tight markets, whether you are talking energy or agriculture. >> the market has gotten a little bit nervous that the fed is going to preemptively start to withdraw liquidity. >> the real question is what is growth going to look like in 2022. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone.

a simulcast, bloomberg radio and bloomberg television. we say good morning to you. what's going on in the markets. red and green on the screen. a little better than when we started this simulcast two hours ago. a big conversation coming up on the dynamics of the market. we will pause here. you mentioned the other day the sad death of arne sorenson at marriott, a friend of ours. it terrible battle with cancer. bill marriott at 88 looks forward to new leadership. jonathan: it will be a veteran of the company, who joined back in 1995. before this role, he was the group development -- he was head of the group of development design. tom: this is basically a hotel lifer, and it is the marriott way to train a man and build him

out as he takes over from mr. sorensen in a difficult and challenging time. let's move onto the markets. what do you find interesting here as we start the morning? jonathan: the commodity rally has been the big story over the last few months. it is crude, too. we had a little bit of capitulation from bank of america, who are now looking at this to top out at $70. we talked about with jeff currie , starting to see that into the $70 range. chair powell two hours away, are you comfortable with what you see? tom: i noticed $62 on crude when i came in this morning, but commodities ebb and flow. that excitement is old and now come over i would suggest we underplay commodities in the media with their important impact on the global economy. jonathan: underpinning this has

in this view that we get a weaker dollar. i wonder how that changes. we have been asking that repeatedly. huge short position being a short year, and if the federal reserve does not display that discomfort also, i wonder what that means for that trade in foreign exchange, and what it means for commodities, too. tom: lisa, i want you to fold in the ambiguity we see. the ambiguity of a commodity rally, is that good for us or is it not? lisa: it depends on who it hits, whether it comes in tandem with growth. what is driving it right now, other than a faster inoculation schedule? when does it feed into what we can buy, which we are seeing with food inflation prices, lumber prices, gas prices picking up.

this is another question they will be grappling with today is for chair powell takes the -- as fed chair powell takes the seat. tom: he's going to have to step lightly. jonathan: i've just had a brilliant message. maybe even tom can start here. it is a picture from home depot of a kids workshop, on march 12. i do think it is a really interesting conversation about the year ahead. how do you engage with the economy over the next 12 month, and how do you do so previously to the last 12 months? tom: we are reframing for the end of a pandemic. lisa: i can't wait to know the parameters for once we have a vaccine going forward. and we deem ask -- can we de- mask?

jonathan: let me just weigh in quickly on this market shi ft. i think there is a fear of establishing a two-tiered society. tom: then why get -- lisa: then why get vaccinated? jonathan: that is the problem. as a consequence, they are underselling to vaccine, because if you are telling people if you got a vaccine, you will be able to do x, y, z, it would go way up lisa: there is some science -- go way up. it was way behind this. what we are learning out of israel and the u.k., it is maybe not the case. now the pressure is built on prime minister boris johnson to at least give us a roadmap on how things reopen. i understand, given the makeup of government in the u.s., it is harder for joe biden to do the same thing, but pressure starts

to build on leaders that if we do achieve the vaccination rate, this is what we can do. tom: inequality has built up since the beginning of this pandemic. lee ferridge is with us right now, sta -- right now, state street global markets head of macro. lee: we have seen the push-up in yields you mentioned, but the question is, this powell react to that? i don't think he does. i think today we will see his continued impression as the world's most dovish man. he will not change. jonathan: lee, i've got to jump in. your word in there is really important, the impression of the world's most dovish man. are you suggesting he's not actually as dovish as he is implying. lee: the opposite, actually.

impression was the wrong word. i believe it. i believe he is as dovish as he says. the market clearly is doubting that. that is where we are seeing this puts up -- this push-up in yields. the market has started to gradually bring in the first rate hike to the early part of 2023 rather than late 2023. the market is starting to doubt whether the fed will really look through the stronger inflation prints we are going to see going forward. you mentioned the commodity price moves. that is obviously going to play into inflation as well. lisa: i just want to go back to what you were saying to parse out and really overanalyze the initial statement you came in on. you are saying that he's perceived us the most dovish man in the world, that he will keep things where there -- where they are. or will he market expect him to come out and say they will increase their buying of longer-term debt, or they are

going to react aggressively to a rise on the back of yields? lee: it's a good question. i think the fed resisted this, but they have committed to doing qe for the rest of the year at $120 billion a month. there were fears in january they were going to taper that. so i think he will open the possibility of doing more. if the question arises, i think you will say they don't want to get into the yield curve control thing. they don't want to set a target level for target end rates, but i think he will open the possibility of doing more qe to keep the longer end rates down if he feels it is necessary. i think you will try to avoid answering to clearly, which is something we got used to, but the fact of the matter is he will say that possibility remains. jonathan: where does that

pressure come from? from nominal yields, from the credit market? what do you think the breaking point is, and where does it come from? lee: real yields are the issue. we were seeing a rise in nominal yields since the vaccine was unveiled in november. that was driven by breakevens. that was the reflation trade, if you like. that was breakevens going up. equity markets could live with that. we are just pricing an average inflation. everything is fine. for the last week or so, real yields have started to go up. real yields started to go up. that started to impact equity markets. we have seen the nasdaq down 4% over the last week, set for a week open today. it is that move up in real yields which basically is the market questioning the fed and whether they are going to stay on hold. real yields are the key here.

nominal's could go up because breakevens are going up on the better outlook, the reflation trade. if they are going up because we are repricing a stronger fed, that becomes more of a problem. jonathan: lee, let's catch up soon. state street markets head of global macro strategy. just a bit more detail from the team at credit suisse on the s&p 500 price target, they are looking for some contraction through 2021, but it is the explosive earnings growth that is key. you can get that contraction largely off the back of explosive earnings growth. tom: i am so glad you brought this up. home depot is not going to do guidance. flat out, it is the mystery of the moment. what do earnings and revenue look like? what does that margin sustainability look like into q4? jonathan: they are looking for

explosive earnings growth and the strong is gdp in over 30 years, and that is the outlook. that is what is breathing life into some of these traits. lisa: what i am struggling to understand is how much visibility they haven't of the rest of the year, when there is so much uncertainty, not only about the trajectory of the pandemic, but also what exact he will get passed by congress, what internationally will happen with the rollout. how much uncertainty can there be given all of those clouds that are really hard to see? jonathan: i agree, i think it is very difficult. think we get a plan something north of $1 trillion. we can make that assumption. tom: i think we just got a little deflation spiral. [laughter] lisa: come on. jonathan: i've had it a few times. tom: home depot just raised their dividend 10%. i've never been in a home depot, but it is up 10%. that's way above nominal gdp. jonathan: let's see what the

next 12 months looks like. if you reopen, are you going to stay at home and do the deck in the backyard? tom: kennel fee is destroying the foundation, so i've got to replace that. jonathan: i will take a look after work. [laughter] this is bloomberg. karina: with the first word news, i'm karina mitchell. the investigation into the riot at the u.s. capitol takes a turn today. authorities will question law enforcement officials about the violence on january 6. three of those have already resigned their post. meanwhile, donald's allies have -- donald trump's allies have downplayed his role in the riot. it was a little more than a year ago that the coronavirus made its way to the u.s. since then, half a million americans have died from the disease. the u.s. has recorded more deaths than any other country. the next closest, brazil, has

fewer than half as many. rates have fallen since hitting a begin january -- hitting a peak in january. u.k. prime minister boris johnson has said the end of the pandemic is insight. he set a target for easing restrictions over the next four months. a year into the pandemic, home depot is signaling demand is still strong for home-improvement product. the chain says u.s. same-store sales rose a better-than-expected 25% in the most recent quarter. customer trends from the latter part of last year indicate sales growth has been slowing down a bit. macy's has reinstated guidance after it was drawn last march -- after its drawdown last march from the coronavirus pandemic. macy's reported a better than expert could holiday quarter.

-- better-than-expected holiday quarter. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm karina mitchell. this is bloomberg. ♪ ♪ jonathan: from new york city for our audience worldwide, this is "bloomberg surveillance." alongside tom keene and lisa abramowicz, i'm jonathan ferro. in washington, the government putting together a one point $9 trillion fiscal plan, and many prominent economists on the left asking, is it too big? we asked those questions to national economic council director brian deese in our exclusive interview. brian: we sized this based on the need we see to get shots into arms, get schools reopened, and to give relief to families and businesses. as we look at this, we look at

the estimates out there of not only output gap, but also the amount of pain we see in the labor market. 10 million people out of work still in this economy. we think this is appropriately sized, and frankly, the right kind of economic prescription to what is a unique and really precarious moment. jonathan: let's start with where the questions are coming from. we are talking about larry summers, the former treasury secretary, and the former head of the imf, not exactly republican cheerleaders, are the biggest questions are questioning where the opposition is coming from. brian: we welcome the opportunity to explain the contours of our plan. one of the things that is unique about our economic crisis is that this is a unique pandemic driven recession, so we thing

about what the economy needs from the perspective of more akin to a natural disaster. we have also seen over the past year on approach that says let's wait and see, and take incremental steps, has not worked and put us in a pretty deep hole. this is the right way to go to make the error in the direction of doing something that will definitively get an answer on this crisis and lead to a more durable recovery going forward. jonathan: have you spoken to summers or blanchard in the last month or so? brian: we are reaching out to economists across the board, including the folks you are mentioning. we went to make sure we are getting input from all size, that we are considering arguments, and i want to be very clear, we take very seriously the risks that are out there. we spent a lot of time thinking

about them, a lot of time worrying about them. but as we assess and balance those risks, we believe the risks of further scarring in the labor market, the risks of further extending this economic pain outweigh the risk of doing too much which is really the theory behind what we are trying to get done here. jonathan: alan blinder raise that point in that op-ed piece a little earlier in the last week. the individuals i mentioned before, the risks that they are raising is an inflationary one. what gives you the conviction that that is not going to be an issue? brian: it is a risk we are keeping our ion, and certainly it is something to consider. over the last couple of decades, we have seen the economy has to keep ability of running at stronger paces, and we think the tools exist to manage those risks as we go forward. we can debate different ways of measuring the output gap,

measuring the risks associated with this particular crisis, but if you sum it all together, we are at a very precarious and unique moment of economic crisis, and that is why we feel pretty confident that we will be better off if we take these actions definitively, we put ourselves on trajectory to growth, and work with the tools we have to manage any challenges we face going forward. jonathan: many people in the administration have been keen to stress this is about a, not about stimulus -- about aid, not about stimulus. what makes that relief? what is the line between relief and stimulus? if i have a job, i earned $75,000 and you send me a check, what is it really from -- what is it relief from? brian: if you look at the direct payments you are discussing, unemployment insurance extension, and then targeted support to the lowest income

families with children, essential workers, without children, in the aggregate this is a very progressively designed package to send aid to the bottom half of the income distribution. with the exception of middle-class families getting direct payments, a lot of those have lost jobs. others are people who are facing additional costs associated with working during a pandemic. childcare, other costs. this provides a bridge. it provides support to get families and businesses through to the other side of this pandemic, and to do so in a way that we don't to then have to take on additional risk or additional economic costs in the interim. jonathan: there's another question as to whether this plan, given its size, remove the bridge from getting to an infra-structure plan further down the road. i just wonder, from your perspective, what are the constraints to further physical spending after this package has been delivered?

brian: this is a relief plan designed to provide immediate support to try to bridge and get us on the other side of this pandemic. i think there is broad consensus, and we have been hearing it over the last couple of weeks, from business communities, from labor, from embers of congress, the democratic and republican side, that we face very significant problems with infrastructure that we have seen play out. those deferred maintenance challenges are real. they are impeding the competitiveness of our economy, particularly in a competitive global environment, as china and other countries are investing in their infrastructure. there's a strong case for us to be increasing our investment in a way that will create more jobs, better jobs, and increase the competitiveness of our economy. that is a different economic objective, but one we are

focused on and the president is focused on. jonathan: i am just trying to understand what the constraints in your mind are to further fiscal spending, whether it is fiscal space, whether it is inflation. what are the constraints over opening the pursestrings further? brian: if we are making permanent investments, those should be offset. the president has laid out different proposals for how to do that. that makes sense in terms of our long-term trajectory. if we are looking at temporary investments, particularly in increased productivity and to improve the quality of jobs, those are investments we need to take a hard look at making right now, and in the current interest-rate environment, we can feel confident that we can make consistent with a long-term , fiscally six anable -- fiscally sustainable term.

as an administration, we are staying in contact with economic officials around the administration. we are in continual contact and monitoring and assessing the markets as you would expect. secretary yellen is jumping our efforts. jonathan: that was a very political response to that question, so i will ask again. forgive me for doing so. has he spoken to chairman's -- to chairman powell specifically? has the president had a conversation with the head of the central bank? brian: i don't have any conversations with the president to read out. jonathan: don't you find that curious, that we are putting through a massive $1.9 trillion plan that would depend on where interest rates may or may not be, yet the president hasn't had a conversation with the chairman of the federal reserve? brian: as i said, secretary yellen, myself, senior officials are staying in contact with our economic agencies, and that is

what we will continue to do. jonathan: ok. i am just wondering how you would frame the relationship with the central bank in the future. is it different what we have seen the previous four years? brian: i think we have an approach to economic policy that is about addressing the current economic crisis, and our focus on the fiscal response that we need to put into place. that is our overriding response right now, and the reason why we are getting the american rescue plan past. jonathan: catching up with the national economic council director brian deese. let's go with whether it is too big, and quite clearly, the pushback from the a adminstration is that it is a risk worth taking. i think it was mr. blinder in the "wall street journal" that wrote a piece speaking to that. tom: i am going to be interested to see what the makeup is of all of that money. a lot of people talking about the pork involved. that is no surprised. but i really wonder if the cover to get the moderate vote is to skew it down the income ladder.

you were in the heat of battle, but what i saw there was a stark difference in tone from kudlow versus deese. i was really taken aback. that is a major shift in tone and the bloomberg wheelhouse. jonathan: i think it is going to be a very different conversation going forward. i think the role is going to change as well. when larry kudlow was in that seat, it was more of a marketing position, head of communications for policy coming out of the white house. this is going to be different. tom: mr. deese with all of that track record in the obama administration is really cool, but i think in every story, there is a change. that happens to be the bloomberg story, and the distinctions there were stark. jonathan: you know what i find interesting? on this particular situation, the biggest opposition, or the most prominent questions being asked about the fiscal effort in d.c. are coming from democrats. it is coming from a former

democratic treasury secretary, people like when charred, people like -- like blanchard, people like summers. lisa: there was discussion, and that is what we are seeing now, that that particular conversation was a little bit pushed aside for a number of years. i do want to pick up on one point, your issue about the federal reserve and how much this administration is relying on rates were manning the slow. at what point when yields rise does that challenge the democrats' view on what they can get passed, and how much people support additional spending? i don't think this has been fully appreciated. jonathan: the chairman is looking for a second term, and the president still hasn't spoken to him. or at least on the surface, it looks like he hasn't spoken to him. lisa: but janet yellen and

powell have been speaking all the time. jonathan: but president biden will make the decision as to whether jay powell gets a second term in the fed. more still to come from new york. this is bloomberg. ♪

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jonathan: 90 minutes away from chairman powell. this is bloomberg surveillance for audience worldwide. one hour away from the opening bell. back .5% on the s&p 500 and we add the losses. more weight off the nasdaq. down 1% on the russell. the move in yields nominal and real. we will talk about real yields in a moment. crude, copper, copper up .25%. up 17.5% on the year, up 20% in change. almost 25% through 2020. bank of america out earlier this morning looking for this one to top out at 70. we top of -- we caught up with jeff currie of goldman looking

for 75 in q3. whenever we see this people start talking about inflation, reflation, the reflation trade. it has not been about higher expectations. it has been about real yields and the inflection we have seen in real yields. that is what is biting in the valuation case. you have to look at it over the last 12 months and see how small the inflection has been. this is all it took. this is all it took to get a move in assets the other way. it is the tiniest move in the context of a massive grind lower. tom: what is missing is a horizontal line to 0%. we got a 0% real yield in 30 year bonds. that has moved positive. we are still distant from that. the motion of flipping from a negative real yield to a positive 10 year real yield -- we are nowhere near that. jonathan: it is about to change. there is a difference between a

rotation and something more durable. something more durable that exists beyond 12 months. when you get moves like this come the cyclicals outperform, we have seen that over the last several months. tom: lisa has the partition at five years, which is dead on. the idea of the yield dynamic close versus the yield on mfr out. i have -- versus the yield far out. citigroup's chief u.s. economist joins us. i want to get back to jobs in the idea of the bowl that is out there, their nirvana -- the goal that is out there, the nirvana, whether president trump or president biden is talking. does citigroup believe we can get back to that nirvana? andrew: i do not believe we can

get all the way back there in the near term, but there is reason to be optimistic we can get some of the way back. we are still 10 million jobs down or so but we know a lot of the jobs are concentrated in restaurants and sectors where we have a lot of temporary unemployment. as you see the economy further reopening, as you see a shift back toward services spending, a lot of those jobs can come back quickly. tom: what is your employment target? chairman powell go to the leaders and say we need a target. what is the unemployment rate from the nirvana -- what is your number? andrew: we know we can get down to low numbers. before the pandemic we were around 3.5%. three .5% with participation that was not declining. -- 3.5% with participation that was not declining. you saw such tightness you saw people coming back into the

labor market. there are some sectors now that are exhibiting some dynamics. if we look at residential construction, we are back to the level of employment we saw pre-pandemic. housing has been a strong sector. we know where those areas of weakness are, but some of that weakness can reverse. the issue will be areas where there has been structural change. have we learned how to do certain activities using less workers. that is where there will be more issues in terms of a longer-term push to get everyone fully employed. lisa: how much have we underestimated how long it will take for people to go back to some of the services heavy activities they used to do. how much this latent fear will be in the population. this is stump -- this is something stephen roach talked about where he was saying we will not see the boom in services as much as some people are expecting rise quickly.

do you agree? andrew: i would not worry about not seeing a boom in services. maybe it is anecdotal, but look at what i'm hearing from people in general, which is there is a large amount of pent-up demand to get back to doing the things that used to be normal. it is true we will not make up for every restaurant meal that was missed but we will make up for some of those. we will not make up for every vacation that was missed, but will some people take two vacations? this is more than leisure vacations. this is visiting families that have been separated because of the pandemic and the restrictions on travel. there is a lot of that services spending that can recover quickly. the issue is firms may be reluctant to hire back workers. if you are a restaurant that is getting restarted, maybe you run lean in the early days of that resurgent demand because either you are still uncertain about whether the demand will hold up,

or because you have had changes where you have learned how to run your restaurant with less staff, or finally just because it is hard to find those workers again. it takes time. you have to contact the workers and convince them to come back again. they're all of those things that have to happen before you can get workers back in place. lisa: what is the risk of overheating? andrew: this is important to discuss. overheating, i do not know is the right word. we would all like to see stronger growth and that is what the fed has been clear about. we should not be worried just because we see a low unemployment rate or strong growth. those are great things. the question is do we get inflation? if there is one thing i've learned covering inflation is to have tremendous humility about inflation. it is something economists do not understand well. what we do know is when you have tight labor markets, type product markets, when you have

large amounts of stimulus, when you have accommodative monetary policy, those are conditions that can lead to higher inflation. are we going to see those conditions? i think we are there on fiscal and monetary. we are talking about whether we can get there in terms of tightness in labor and product markets. we should be thinking about that as a risk and the upside risks around inflation are real. jonathan: was the unemployment rate in a tight labor market in the united states of america? andrew: i think 3.5%, we saw that. we saw that without a lot of inflationary pressure. i think we can get there. real issues about are you bringing people who have left the labor force back in. that way you can get down to a low unemployment rate and have slack there. jonathan: that was the story and last cycle. we got down to those levels and what happened? tom: andrew nailed it.

wages and benefits, a 2.5% statistic and i need a 3% statistic. look at wages and benefits, winter they pop? the answer is in the new technology and services sector america they have not been proven two. andrew: you need to see areas -- it is hard to see that in aggregate sense. when you look inside the sectors, you look at manufacturing, you look at construction, these areas that have been strong coming out of the pandemic, there you see wages holding up well. while yes you do not have as strong wage pressure as you would have in a tight labor market, relative to how large a contraction we have and how he jobs were lost, they held up well. tom: i agree totally. an important point. andrew: chariman powell 10:00 eastern -- jonathan: chariman powell 10:00, do you take an

early lunch or do you watch this? tom: he will be watching. andrew: i will be watching closely. the question is does he push back. i do not think he does. we are ahead of where fed dots are guiding us. i do not think it is time for him to be pushing back strongly against his expectation, but that is what i will be watching for. jonathan: andrew, thank you. tom: let's be honest. lisa: it is his job to watch this. it is his job. he has to watch this. tom: catherine mann will take the early lunch. the acclaimed catherine mann gets the early lunch. jonathan: the reason i ask this is because we do this repeatedly. every time the semiannual testimony comes up with a chairman powell is coming, and then what happens it is hours on end of unproductive conversation with lawmakers in d.c.

i will say i think to a certain degree this is different because of the price action for the last several weeks. does he change the script in any way? they have said repeatedly policy is in a good place. tom: to dovetail into what andrew hollenhorst said, he will not change the script until he gets wage inflation. it is not there. lisa: what does not changing script mean westmark does it open up the possibility --? -- what does not changing the script mean? -- tom: john hermon talking about the powell pivot in the middle of the summer. that is a new phrase. jonathan: do you think the market will take it as a message if he does not push back? lisa: absolutely. tom: i do not have an opinion. lisa: i think -- tom: i will not be watching it.

jonathan: i actually know you will not be watching it. tom will be in a cab home at 10:01. you'll be able to tell tomorrow morning he did not watch this. i am looking forward to catching up with blacklock -- blackrock rate -- looking forward to catching up with blackrock later this morning. that will be one of the first questions we ask scott. that is coming up on bloomberg tv. i'll be stepping away. tom: markets are rolling over. i think you have a chance at the open. i may have to watch the open. jonathan: i would love for you to stop by. i remind you you have an hour on bloomberg radio. tom: i do, with paul sweeney. jonathan: looking forward to that. i hear it is good. tom: lisa is in a cab on the way home. jonathan: lisa has the good gait. lisa goes home.

1.36 on the u.s. 10 year. chair powell, one hour and 20 minutes away. full coverage on bloomberg tv and radio. this is "bloomberg surveillance." karina: a grim milestone for the u.s.. half a million americans have now died from the coronavirus in the nation a little more than a year ago. the u.s. accounts for almost 20% of global fatalities and has twice the number of deaths of brazil. hospitalizations and deaths have fallen since peaking in early january. meanwhile federal investigators are blaming metal fatigue for the engine failure on united airlines boeing 777. the head of the transportation safety board says that comes after a preliminary examination of fragments. the incident led to the grounding of dozens of 777's.

texas has to pay -- texas had to figure out who will pave the energy crisis that plunge the state into darkness. the cost of electricity totaled over $50 billion, 12 times higher than the week before. utilities will look to pass those costs on to consumers. marriott has named a veteran develop an executive as its ceo. he takes over the world's largest hotel company at a time when the pandemic has raised doubts about the long-term prospects of her brick travel. elon musk is -- of corporate travel. elon musk is no longer the richest person in the world. shares of tesla fell and today it is falling away. the new number one on the bloomberg billionaire index is jeff bezos. 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 am karina mitchell. this is bloomberg. ♪

tom: good morning. lisa abramowicz and tom keene. we are looking at markets

deteriorating. back to where we were at 6:00. -1.8% on the nasdaq says all. lisa: an interesting story under this. you have the yield story raising questions about some of the most highly valued equities, but there's also a question about specific names. tesla in particular is taking a huge hit with bitcoin. tom: bloomberg with the coverage of chairman powell coming up. interesting to see not only what he does say but what he does not say. right now an important conversation, a look back to 2020 but far more of a look forward. i look at home depot with great earnings, i think of the changing of the guard at marriott. barry ritholtz joins us with bloomberg opinion. i will playoff richard edelman's barometer, which is so important, the measurement of

who we believe in. ceo's are a group that has come through the pandemic nicely. barry: it is kind of surprising. even more surprising is this coming from me, i spent 300 pages in bailout nation x course eating reckless ceo's, but you cannot help but look at 2020 as the year when great leadership rose to the occasion. that includes not just developing a vaccine in a record amount of time, but logistics in retail and all of the companies that were able to adapt to a terrible set of circumstances and to do it really well. it was quite astonishing. tom: it is astonishing to see what they have done in the path forward as well. it is a more proactive ceo. this goes back to your wonderful work in bailout nation. there is a lot of social talk.

there is esg talk. is it just talk, or do you see a permanent shift in the actions of corporate america? barry: we look at large lobbying organizations that operate on behalf of of corporate america, whether it is the business roundtable or the ceo lobbying group or the chamber of commerce, and often we see -- people call it greenwashing -- these pronunciations, and they get left for dead. that is how i think a lot of people talk the change from -- how a lot of people took the change from the business roundtable about the purpose of a company. it used to be corporations business was maximizing shareholder value, the famous milton freeman investment -- assessment. in 2018 we got the chain from the business roundtable that

said we have to take into account, a corporation must take into account all of the constituencies of the company, including its workers and the community and its customers, and 180 degrees from milton friedman. all of us, myself included, trumped our shoulders and said sure. then 2020 came along and they acted on that. lisa: not to interrupt, to use tom's line, but there is a question of how they speak well and they have a good line, but it was in their interest financially to act in such and such way. when it becomes onerous for them to make investments in their plant, when it cuts into their bottom line or profit in some capacity, will they make those same decisions going forward? how much will shareholders accept that and continue to stay with that company even if they do take those actions? barry: there are a couple of ways to look at that. one is esg and the other is the

post january 6 insurrection act the capital behavior -- insurrection at the capitol behavior. the argument is if you are giving up oil and other large profitable groups -- look at gun sales, through the roof for the last seven years -- you can say people are willing to vote with their dollars or their conscience and give up some upside. hold aside that oil and coal have been a disaster for the last five years for investors. the big change came after the january 6 insurrection. when you see not just the business roundtable but the national chamber of commerce saying even though we supported president trump and many of his policies, we believe in the peaceful transition of power as the most important aspect. the rule of law matters to business and therefore we

welcome president-elect biden. that is a shocking statement from a group you would not necessarily think of as breaking for x president trump. tom: some of the trends out of 2020 interesting. barry ritholtz with bloomberg opinion on ceo's and the change of tone we have seen. i am thinking january 2022 we may see that one more time. they will do a redo over the summer. right now we have to do a redo on the markets. the vix at 25 shows the inherent stress we are living. lisa: this idea of the crowded trades and also the preparation, trying to get ahead of whatever turmoil might happen. one of the notable movers this morning has been tesla. this comes after elon musk's comments on bitcoin where he was saying maybe they have hit a high. at least that is what people are blaming. now tesla share price has fallen below the price at which it entered the s&p.

it shows this one stop, which has been -- this one stock which has been volatile can have a higher influence. it is interesting to understand the dynamics underpinning what we are seeing as what is potentially going to be a correction in the tech heavy stock index and also highlights how indexing will be tough this year, maybe. tom: i have trouble with the new volatility and that we have dampened down as we moved to the zero bound to where the new correction -- it used to be 10% down -- maybe the new correction is 5% down? the new bear market was 18 and now the bear market is -12. i do not buy it. we are addicted to able market. lisa: there is a lot of cash and there is a lot of hope. you wonder whether we will see a less benign rotation? beneath the surface you'll start

to see real potholes that form if there are high valuations that get called in. tom: i think we had 14 opinions. i will go to jonathan golub at credit suisse talking about you will have multiple compression, but with it, the why of it which is the good news of great earnings. lisa: the standout opinion to me was what jeff currie had to say about oil going forward and how he will not see peak demand until 2030 and you will not see investment in more oil, but you will see huge demand as we build up air infrastructure and that will cause -- build out our infrastructure. that is a unique view. even in the transition away from fossil fuels you see the move in oil prices. tom: to take it over to china and the copper we are looking at 5%, 6%, 7% inflation-adjusted gdp. you wonder what does that mean for china?

does that mean they go back to 8% or 9% gdp? some of the conversation across all of our bloomberg properties. balance of power at 12 noon. the conversation with the gentleman from ohio, mr. brown. stay with us on bloomberg radio, on bloomberg television. ♪

♪ jonathan: from new york city for

our audience worldwide, good morning, good morning. "the countdown to the open" starts right now. equity futures down .5%. let's get straight to it. we begin with the big issue. waiting for chairman jay powell. >> early to be pricing in tighter financial conditions. >> do not expect much in the way of new information. >> comments which are supportive of markets. >> too early for them to do anything more. >> interest rates stay very low. >> they are going to stay loose for longer. >> i think the market has gotten a little bit nervous. >> the challenge from the fed perspective is they have committed to allowing the economy to run hot. >> jay powell has staked his legacy on the inflation over suit -- overshoot. >>