♪ >> the market is pushing the fed as to whether or not he will be able to hold the line. >> how far further this goes, i think that is the question. >> the u.s. economy is going to come rolling back. > consumer confidence is going to come back, and there will be spending. >> that is good for the reflation trade. that is good for the cyclical trade, and that is where we want to be. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: the bid is back in the equity market. from new york city, for our audience worldwide, good morning. this is "bloomberg surveillance ," live on bloomberg tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. equity futures up 36. we advance about 1.4%. tom: we've got a lot of said talk -- a lot of fed talk.

these are better than good markets, with some stability and bonds, even with a higher yield right now. equities are on a tear to reset new record highs. jonathan: yields are up for the right reasons. is that what we would say? tom: i think that as well said. we begin to firm up really good economic growth into this second quarter. that is the expectation that is out there. the mystery out to the third quarter, we've got a guest coming up, one of the most nuanced equity calls on the street. jonathan: up five basis points on 30's, up two on tens. lisa: you did see -- again, this raises the question, when does

this start to rise in a fundament away? that is unclear -- in a fundamental way? that is unclear. are we seeing another 2013 taper tantrum? if that is the case, you don't want to have anymore exposure to duration. tom: then you click in with price down, yield up, whatever you are looking at in fixed income. just like the equity market, when do i get in? jonathan: the tantrum without a taper. i guess that is what leslie was. in the mark -- what last week was. in the market this morning, good morning. we have a lift by 0.9% on the s&p. in the bond market, yields up, the curve steeper. yields are up by two on the 10 year to 1.43%. i have to say, i's really surprised this morning -- i was really surprised this morning, looking at pmi's from china. lisa: you also see a real

tightening in some of the oil supplies, and certainly seeing drawdowns in some of the inventories. i don't want to read into much. you do raise a good point. you said the tantrum without the taper. are we going to get the hints of taper? we have a lot of talk from the federal reserve today. the parade continues tomorrow and through the rest of the week. the drum to fed chair jay powell on thursday. how much will they push back against the bond market move? they have not been willing to do so up to now. at what point will they start to get concerned? 10:00 a.m., we start to get some data, manufacturing information from the unit dates, -- from the united states, which may be dealing with some interference from the weather. we will also be getting construction data. very interesting to see how much the increase in mortgage rates has affected the demand for housing, the demand to build new homes.

at 1:30 p.m., jamie dimon, ceo of jp morgan, will be joining us on bloomberg television. a lot of questions about the economy, about the competitive landscape. i know you are not watching this perhaps as closely as bond yields, but i find it interesting, the new entrants into this race with data being the key deponent of what establishes one player -- key component of what establishes one player in the fintech world from another. jonathan: on the bond market, i think it is always interesting to hear what your -- what mr. dimon has to say. tom: he has an interesting take, and it is wrapped into all of his work of running a business. the most important thing, and observation on james dimon, he really points out it is day-to-day hard work to run a bank. how does walmart jump into that without the experience, the

day-to-day grind of the systems of successful banks? jonathan: well said, tom. is it too early to give you an estimate on payrolls? tom: way too early. lisa: go for it. jonathan: 180,000. tom: i've got to get to thursday on the tots. gareth is going to be out there again. jonathan: are you going to tell anyone who gareth is? lisa: apparently everyone knows. [laughter] tom: just think, if gareth and gwyneth were an item, it would be positively welsh. jonathan: jonathan golub joining us now of credit suisse. you have said that this market can do well when yields are higher. can't put too fine a point on that. your thoughts on this, sir. jonathan g: first of all, you have to look at the full cost of capital.

if you look at how yield spreads since the pfizer announcement, they are down more than treasury yields are up. that is the big story. the cost to borrowing over the last four months continues to actually improve even the treasury yields are higher, and that is the story. tom: i want to go back to the heart of your distant of call with equity optimism. you believe tech will still participate. you have heard countless people say sell the big tech. it is yesterday's story. give us the distinction. jonathan g: we are neutral weight on tech because we do think -- first, we think the opening is going to be much bigger than people think. our call is really around corporate profit. you want companies that jump the most in an improving economy, and tech does ok, but it doesn't do well as banks or industrials and materials, energy.

we think they will be in the game, but we do not think it will be leading it. lisa: one thing i am struck by is that you raised your forecast for the s&p. you previously raised your forecast o. february 7 it seems to be -- your forecast on february 7. it seems to be this moving target. jonathan g: in the fourth quarter, we beat the estimates with the actual results by 17%. typically, a company will beat by 3% or 4%. 70% means everybody ash 17% means everybody -- 17% means everybody's numbers have to be adjusted. if you look at a few board groups, hey interest rates, very positive for financials. oil and copper, if things go as

expected, they will be up 50% in 2021 versus 2020. that is enormous for industrial materials and energy. that stuff matters a lot. those are incremental things. it wasn't that we think pe multiples will be the story in the next 12 months. it is all corporate profit. jonathan f: lisa coming in hot on a monday morning. lisa: am i? i was trying to highlight the moving nature of this economy and this market, how difficult it is to predict. [laughter] kudos to you for acknowledging when you haven't been able to pinpoint exactly. jonathan f: has been a great trade. draw the distinction if you can between who wins the early stage of the recovery and who wins the cycle. that has taken the growth story, the big -- that has been the

growth story, the big tech play. does that continue? jonathan g: if you have a five year or 10 year view, buy tech and ignore this. this is a nine-month trade or something like that. it is going to be really powerful. the question we are getting from people, is it too soon? how much of this is priced into the market? i think the key here is we think that the reopening is not even in the market yet. the value trade is still relatively new, and in fact, those cyclical companies are really cheap compared to the rest of the market because they lag for so long. but to your point, if you have a five-year outlook, you definitely want to be playing those secular winners in t -- in tech areas. tom: what cash is looking for a warm spot in equity markets? is it traditional, or a smaller

amount because of these unusual times? jonathan g: i don't spend a lot of time looking at this, and i will tell you why. the incremental buyer of the market is not an individual investor as much as we are talking about individual investors. it is a hedge fund that incrementally increases their leverage, and the ability for the market to move on basis points of extra hedge fund leverage is a big issue here. even when you look at all of the issues with some of the short squeezes, the hedge fund leverage came down, and just popped back right up to where it was. jonathan f: how much visibility do you have with the prime brokerage team? do you get a feel for how allocated people are to this? jonathan g: yeah, we do. there's just a very small handful of brokers, credit suisse is one of those, that

seem like there's a fair bit of additional upside. hedge funds are not overweight banks yet. banks are the most attractive group in the marketplace. they are still overweight technology groups, less so in areas like metal and mining, and some of these other heavy deep looks -- heavy, deep cyclicals. it gives me a lot of encouragement that this trade is nowhere near over. jonathan f: great to catch up. you are looking well. jonathan golub of credit suisse, chief u.s. equity strategist. remember when you had to wear a tie? that was a thing. tom: that was a -- i agree. it has all gone by the wayside. that historic interview you did with jen had cs -- with jan h atzius. [laughter] jonathan f: truly historic. groundbreaking. we are trying to maintain the standards here, lisa. lisa: clearly. [laughter] jonathan f: lisa.

lisa: what? jonathan f: deep breath. it's monday. plenty of time to be bearish and go for people about whether they are raising their price target. lisa: honestly, i think it was an important thing to note. jonathan f: coming up later today on bloomberg television and radio, jp morgan chairman and ceo jamie dimon, 1:30 eastern. looking forward to that. from new york city, this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. senate democrats will not try to raise the minimum wage is part of the $1.9 trillion relief package. they had considered including tax penalties on big companies that pay low wages, along with incentives for smaller companies to pay higher minimums, but it became clear over the weekend that getting all 50 democratic senators on board would be difficult. the house passed the stimulus bill saturday. donald trump told a group

supporters he is laying the groundwork for a third presidential campaign. the former president stopped a hair short of declaring he's the candidate for the 20 -- he is a candidate for the 2024 race. still, he made it clear he thinks he is the best choice for the republican nomination. iran says it is not the right time for direct talks with the u.s. and european powers on the nuclear deal. donald trump pulled the u.s. out of the 2015 agreement. president biden has offered to take a sin talks to revive it, but iran wants the u.s. to lift economic sanctions first. president biden is putting tech, not troops, at the center of his strategy on china. he is attending to rally what officials are calling -- to stand up to beijing when it comes to semiconductor fabrication and quantum computing. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more

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♪ >> what we know is the american people want this.

it is good for the economy, good for workers, good for families, so we remain committed to this as a matter of policy, and whatever the mechanics are on capitol hill is going to make a big difference. in the meantime, we are pursuing this rescue plan that is so important at a moment when we are a long way from being out of the woods. jonathan: pete buttigieg, u.s. secretary of transportation, speaking to kevin cirilli on "sound on" on bloomberg radio. alongside tom keene, lisa abramowicz, i'm jonathan ferro. here's your market this monday morning, up 40 on the s&p. we advance a little more than 1%. thursday, your high -- the 10-year, thursday, your high 1.61%. right now, 1.43%. royal caribbean commencing a

$1.5 billion proposed offering of stock. tom: what of the airlines doing? that's what i don't understand. jonathan: you bring up this story, and i think it is important. what was gamestop doing? it was a big conversation over the last couple of weeks. why didn't they do something similar and take advantage of the rally to raise some capital, raise some money? tom: amc, i believe, did it. jonathan: they did, yeah. tom: they are gyrating around. let's go to kevin cirilli, our chief washington correspondent. i want to go to what i saw this weekend, which is the stimulus coming up with the senate, a president of the united states looking for new momentum, and the overwhelming reality of six house districts coming up in less than two years. dovetail those together into the forward momentum this week in washington. kevin: i would add syria to that list as well. i think greg valliere really

captured this in his note this morning. you've got democrats, and this much is my reporting, on the far are raising concerns on economics and on foreign policy as it relates to saudi arabia, even. there is a breakage point that has occurred in the democratic party, and the risk has grown more public, on the minimum wage issue. it is not to be underreported. when congresswoman elana omar -- congresswoman ilhan omar, the last time that happened was by republicans on a tax effort, this is a really serious rift bubbling over. the progressives are questioning the centrist democratic bona fides this morning in washington. tom: the democratic and republican centrists, are the centrists combined there for president biden? kevin: yes, they are. but does that outlast in future

fights on infrastructure? i put that question to secretary buttigieg on friday. tom: on "sound on," i know you did. [laughter] kevin: he said that as it relates to infrastructure spending, they are going to need some of the centrist support in order to get infrastructure through, after this nearly $2 trillion battle. lisa: kevin, that was great, speaking right through that and staying serious through some of our ribbing. there's also a question of the republican side and how much support there may be for infrastructure. did we get any sense from the speeches at cpac about a willingness on the republican side to work with democrats on infrastructure or anything else? kevin: it's funny. i spoke with a former pompeo state department source over the weekend. in terms of national security, those sources are supportive of president biden's actions that he took on syria. but in terms of the optics moving forward, no. they are not going to be on

board for infrastructure unless it provides some type of massive relief for cybersecurity infrastructure, bolstering some other energy grids. but i think from an infrastructure standpoint, the question becomes how they are going to pay for it, and again, that is where republicans and democrats are worlds apart. jonathan: i am not sure cpac was ever going to be before them for anyone going on stage to talk about how well they will work with democrats over the next couple of years. [laughter] kevin: i would agree. jonathan: we talk about division in the republican party, and i don't think we talk a month -- talk enough about how tenuous this majority is. are things breaking down even more, or are we just shining a spotlight on it? kevin: i think we are shining a spotlight on it because it is starting to impact the admin this tree should's ability -- the administration's ability to

get their agenda through congress. they will have a fight on immigration and infrastructure, and both are going to be very difficult. again, this is unique to american politics in the sense that the window of being able to accomplish additional legislative items becomes increasingly more narrow as we head into the summer. tom: that is right where i wanted to go. what is the then what after stimulus is approved? kevin: infrastructure. the appetite for there to be some more cooperation from the far-left is increasingly not there. jonathan: what is the obstacle to get infrastructure done? it is amazing. both parties wanted done. how are we going to pay for it? how about the trillions of dollars worth of aid we have done in the last month? kevin: even to that point, when you look at the stimulus for aid funding to state and local governments, what precisely

would infrastructure look like in rural america? from rural america's standpoint, they want to make sure that all of these roads and bridges aren't just young built in new york state, or in california. they want a piece of this pie, sell. jonathan: kevin, good to see you. kevin cirilli, chief washington correspondent and host of "sound on" on bloomberg radio. there we go. kevin brought that. [laughter] let's get serious. this is exactly what secretary summers was worried about in that "washington post" op-ed several week ago, that this would suck all the oxygen out of the room, and public investment, infrastructure spending wouldn't get done. tom: you put lawrence summers on the same page as mervyn

king. do we invest in anything that actually moves us towards a better economy and better productivity? lisa: i am also struck by the disparity in what infrastructure means. are we talking about bridges? are we talking about roads? are we talking about electric car pumping stations, internet access to rural areas? are we talking about renewable energy sources, given some of the pushback out of texas? those storms highlight how much debate there really is. jonathan: all of the above, and i would throw a new industrial policy into the mix as well around competing with china. all of that needs to be tackled in a very short period of time, and the context of a huge effort that needs to take place. . coming up, the bloomberg citylab summit, featuring kamala harris and san francisco fed president mary daly. no doubt, infrastructure will be coming up. from new york city this morning, good morning.

alongside tom keene and lisa abramowicz, i'm jonathan ferro. getting back to work after the weekend. the bond market getting back to a selloff. yields higher by three basis points to 1.44% on tens. the s&p up by around 1%.

♪ jonathan: the bid is back in the equity market. good morning. on "bloomberg surveillance," we bounce back about 1% on the s&p 500. in the bond market, yields are higher, the curve is steeper. repricing expectations for the year ahead. more on this a little bit later. up to basis points on 30's -- on 30's, up four. a good move higher in yields, a statement of confidence, the banks do well. maybe that is the distinction. i think we need to get a bit more clarity from the fed this

week, from the speakers, from chairman powell, but what is good, what is bad about a move higher in yields. tom: but they are going to say is the markets can do what they want, but we are steadfast. that is clearly what the markets have done. i can't emphasize the difference between thursday last and friday last. tom: want to look at commodities -- jonathan: want to look at commodities just briefly. copper, where are we now? up 0.75%. the data is not great. the recovery is slowing. the dollar starting to get a little bit of strength. this move is continuing. i just wonder how much longer this can continue. more still to come. let's say good morning to romaine bostick. romaine: we talk about whether crude can continue higher, whether copper can continue above and thousand dollars a ton or forgot -- above $9,000 a ton

or four dollars a pound. that j&j vaccine coming over the weekend. more importantly, yesterday we learned that the u.s. is already shipping out 4 million doses. that is expected to arrive at distribution centers as soon as tomorrow. of course, j&j saying they will get about 20 million doses to folks by the end of march. an encouraging sign here. you have seen all the vaccine markers get a bid here. there's a few interesting stories upside of this. first is we have to start this morning by lifting our coffee cups to jane fraser. she starts her first day on the job as ceo of citigroup, the third-largest u.s. bank, the first woman to lead any of the mega u.s. banks. she's got a lot on her plate, dealing with compliance. another story that crept out on friday involving walmart. two executives at goldman sachs,

both of them were instrumental in helping goldman create a more consumer facing side to its business. they are going over to walmart. walmart has made it very clear for several years that it is pushing deeper into financing, deeper into consumer financing. we all room, the brouhaha 15 years ago when it tried to become an industrial bank. everyone pushed back that. not only have the rules been relaxed, the environment has changed so much now. you don't even really need to go the charter route if you want to offer financial services. there are a host of the so-called fintech companies that have shown you don't need to do that. they have taken a lot of crumbs off the plate of goldman sachs, bank of america, and the like. tom: to me, it has been a 40 year mess. ed has been an experiment for 40 years that has never happened. romaine: and maybe walmart is one of those companies that is going to make it happen. you've got a lot of small and

medium-sized players out there that have shown they can make it work. whether they can grow and really challenge the citis and jp morgans of the world, that means to be seen. we are not talking about scrubs here. we are talking about all-stars. they are picking lebron and james harden, and saying go out there and take those shots. jonathan: he doesn't get basketball, romaine. you've got to talk baseball. [laughter] lisa: just say gareth. jonathan: even some soccer names, romaine. tom: gareth and harry. jonathan: that's right, gareth and harry. lisa: thank, romaine. jonathan: don't confuse him. romaine, thank you. tom: i want you to bring in matthew hornbeck. i love this guy because he started out off the trading desk of morgan stanley in tokyo and really learned a lot about how not to lose money in the odd yen and japanese debt markets. that makes him unique. matthew hornbach, morgan

stanley had of -- morgan stanley head of microstrategy. you expected to be a gradual ash of macro strategy. -- of macro strategy. you expected it to be a gradual move, and it has been a massive one. matthew: we think the economy is going to grow faster than most expect, and that real yields are starting to wake up to this fact. yes, we have been expecting a gradual move, and over the past six months, it has been gradual. but over the last week, the nature of the move did in fact change. on thursday, mentioned earlier on your show, thursday really was a violent move where the fed probably for the first time in the past six months got a bit of a rude awakening. jonathan: i think it is really important to nature the character -- important to

mention the nature, the character of the move. how do you think that shakes the approach of said speakers this week, particularly chair powell on thursday? matthew: we think it serves to highlight a disconnect between the pricing of had policy in the bond market and where the fed thinks appropriate policy thinks policy is likely to be in the next several years. what we saw at the end of last week is the bond market pricing and 75 basis points worth of rate hikes through the end of 2023, and that contrasts pretty dramatically with the fed's view of appropriate policy being unchanged in no rate hikes. that is something the fed is going to have to deal with we think in the next couple of weeks. they should be discussing this at the march fomc meeting. if we are lucky, we may even have yield curve control, by the , probably from michael mckee, who has been one of the better

reporters. [laughter] tom: you've got that right, matt. he will have to go last because they can't stand the nature of his questions. i want to dovetail it against the ellens and or call of a great american ash the ellens and their -- the ellen zentner called of a great american economy. with the five year yield, we saw the construction of a three bond butterfly move out 3.2 standard deviations. was that enough catharsis to clear the market for the zentner call? matthew: i think so. i think the violence of the move, after the seven-year auction tailed pretty badly, probably washed out a lot of weaker longs in the it immediate sector -- in the intermediate sector. so i do think that was enough probably to clear out a lot of

bad positioning in the bond market. but as we saw, and as i mentioned, it really brought the pricing of said policy to a level that we haven't seen since the taper tantrum in 2013. we did this analysis in our last institutional research publication, where we saw in september of 2013, we were pressing in as much term premium as we were as of last week, so i think the market is going to take some of that back in the next couple of weeks. i hope the fed realizes that they are really playing with fire here if they allow this to continue. it will continue because the bond market vigilantes have got out. lisa: so what do you think the fed should do? matthew: they need to a knowledge that either the market is onto something, that may be no hikes through the end of 2023 is a bit too dovish of a policy prescription, or they need to pushback in some ways, probably verbally.

i do think that the tool of yield curve caps was designed for exactly this scenario. i certainly don't expect them to implement a yield curve cap, but there's no harm in talking about it, especially given where markets are priced today. lisa: even as we saw a real yields the ey -- real yields rise precipitously, we saw inflation expectations fall to the lowest level of this year. what do you make of that? is this a reliable gauge as we take a look at inflation rates is a breakeven measure, or is this really something the market has to pay attention to? matthew: i do think it is something we have to pay attention to. our view is that breakeven inflation rates are being mostly driven by the risk premium embedded therein. the fed does need to pay attention. if the fed allows the pricing of policy to become any more hawkish, they really start to risk their inflation goal of

modestly overshooting the 2% level. tom: you brought up the veg -- jonathan: you brought up the vigilantes. most people assume it puts pressure on the policymakers come on the fiscal policy. do you think any of this price action we are seeing right now really puts pressure on the fiscal policy story down in d.c.? matthew: i don't think so just yet. on any historical measure, interest rates are still export nearly low. if you look -- still extraordinarily low. if you look at the 30 year bond yield below the fed's vision of the neutral policy rate, we still are at historically low levels of interest rates. i do think there's plenty of scope for more fiscal stimulus, and it does look like we are going to get it. jonathan: send your best to the team -- send our best to the team. tom, looking for 1.70% year and now on the 10 year yield. tom: it is how you get there,

and it is the speed you get there. critically, the zentner call is the underlying economy dovetailed around that yield. jonathan: what you get from the strategists is a lot of thought. we won't get there next week given the price action of the last week, but who knows? tom: this is such an important thing, how the street consumes all of the guests we talked to. you are right, it is food for thought. it is food to help you frame your set up in the markets, not buy/hold/sell . lisa: people had to change their forecast as a result. i am struck by what the market is expecting from fed chair jay powell this week, in addition to other fed officials. are we going to hear yield curve controls? what is the potential moral hazard if they react? jonathan: morgan stanley concerned about what happened at the long end, more concerned about the market pricing

and hikes before they do interest rate hikes -- pricing in hikes before they do interest rate hikes. lisa: i think all of the above. jonathan: coming up, david rally, bluebay asset management -- david riley, bluebay asset management. you have so much to say. lisa: i do have a lot to say, but not in 10 seconds. jonathan: we advance 1%. [laughter] i've got to work through some time now to make up for it. lisa: instead of just blooming before running up against the end. [laughter] jonathan: this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. it looks like the proposal for a higher minimum wage won't be in the coronavirus really tell -- coronavirus relief bill. the concern is it wouldn't be possible to get all 50 senate democrats on board. the house passed a relief bill over the weekend. immigration will be the main

topic when president biden holds a virtual meeting with mexico's president andres manuel lopez obrador today. he plans to propose a labor program that could bring up to 8000 legal immigrants a year to work in the u.s. a representative would not say whether president biden supports the proposal. president biden is urging amazon supporters to vote in a unionization drive. he says employees should be able to make their own choice about whether to join a union free from company pressure. andrew cuomo has gone from being called america's governor to facing multiple scandals. the new york democrat now faces an investigation over allegations of sexual harassment. cuomo has also been hurt by revelations his administration hid a number of people who died from the coronavirus in nursing homes.

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 ritika gupta. this is bloomberg. ♪

>> particularly given all of the liquidity the fed has pumped in,

we still find ourselves in this situation, so expect that choppiness because there are structural issues when we've got more and more treasury securities being put into the world and absorbed. jonathan: marvin lo -- marvin loh there, state street market strategist. we are up 39 on the s&p, a little more than 1%. we bounce back and take a bite out of last week's losses. yields higher on 10 year to about 1.44%. mixed in g10, but there is dollar strength against the euro , $1.25. tom: right now we want to do a value add for you to get your monday started coming to get march started with a reset on china. enda curran, our chief asia

correspondent, gets us started for a good march. how is the march of china looking? enda: we had some pmi readings today which showed something of a softening in the month of february, but the thing to remember is those were coinciding with a period of restrictions around the coronavirus, but the broader economic rebound story in china remains very much on track. manufacturing and exports are both going gangbusters, and the consumer is holding up, too. jonathan: every time we get a surprise out of china, it is always seasonal. we knew this already. the economists still got it wrong. enda: an excuse for everything, jon. you are absolutely right. i think it was distorted by various factors. it is hard to take away the impact of the whole day.

we know that the forward-looking indicators remain strong. take south korea, for example . exports of chips are going gangbusters. we know the chinese consumer is holding up, too. they are starting to spend again, so even if you were to say recovering china is going to plateau a bit, it is certainly not in a bad state. it has been a much faster recovery than two years ago. lisa: how is that factoring into your future expectations? matthew: it is slower --enda: it is slower in china, into the virus, first out of the virus. [indiscernible] -- urgency in china and elsewhere to roll out the vaccinations because infection rates are somewhat low come about at the same time, people

are saying this approach is going to have to begin and start if all of these economies are going to get back in sync with each other. so i think you will see over the coming months and acceleration of the vaccination process in china and the rest of asia. jonathan: the recovery continues. i am just struggling to record highs -- to recognize another super cycle in the market. another much watch metric out of china, credit impulse. that has been rolling over for a time now. can you walk us through what your read of it is actually is right now? enda: the point to take on that is that china's recovery hasn't just been based on experts. a lot of it has been public spending and infrastructure, and other related projects. all of that through a banking system that has been channeling a lot of money through small and medium-sized enterprises, or

through parts of the economy that needed it most. so the china economy has relied a lot on public money and public support. that is expected to continue. that is why this weekend, we get the national people's congress with the challenge for the year ahead, detail on whether or not they are confident enough now to start tapering some of its support, pulling away some of that credit, ramping up the deleveraging they have talked about in the past, or whether they will keep tipping some of that cash into the economy. so we will get some more of that into the weekend. tom: what does the new hong kong look like? enda: it is a big question, tom. activity has been shattered over the last your so. we are in another series of charges of pro-democracy activists. there's kind of a deck economy going on here. on the one side -- there's kind of a deck how to make going on here. on the one side, -- kind of a

economy going on -- kind of a dichotomy going on here. on the one side, it is go on as normal. tom: how is the financial part of hong kong linkedin anyway to the people of hong kong? enda: it is about 1/4 of the economy, but the financial park it has plugged into what is happening with china. there's a lot of liquidity around and markets are booming. obviously, you can't implement a strict national security at law -- security law that hong kong has a boom ended being impacted, and terms of what it means for selling chinese stocks and bonds and the like. nobody is escaping this national security law crackdown in its entirety, but there is some divergence on the ground.

you've got the financial market side of hong kong continuing, but the pro-democracy side has been feeling the brunt of the hammer. lisa: when it comes to china, really at the forefront is joe biden's push to recast the rivalry between the u.s. and china as one for technological superiority and the race to be the leader in semiconductors and an independent supply chain in the united states for key aspects. what is china's sponsor to bind u -- to biden stone -- to biden's tone? enda: export figures out of south korea show huge demand for semiconductors, and a lot of that is stockpiling by china, so they are hoarding what they can in anticipation of a u.s. pushback. china has identified technology as one of their core industrial pillars, and this weekend, they are saying they will flesh out

their ambitions, and a big portion of that will be technology. that would feed into this idea of more self-reliance. it is kind of an old idea, but they are getting more serious about it, and they want to produce much more of their own technology at home, and that includes semiconductors. i think you are right that semiconductors, chips and the like are very much on the front of this new phase, but china is already moving preemptively. we will get more details on the four-year plan from the national people's congress. jonathan: good to hear from you. stay well. bloomberg's and a karen -- bloomberg's enda curran there. it really fuels the conversation about industrial policy in the united states among together under the new administration. tom: i think it underpins the major call of this year. we can't sustain gdp unless asia

and china sustain. jonathan: you can't sustain this commodity market rally without china really contributing. we know that, too. coming up, david rally, bluebay asset management -- david riley, bluebay asset management. this is bloomberg. ♪

>> we need rates to keep rising, but in a slower, more orderly fashion. >> the market is pushing the fed as to whether or not it will be able to hold the line. >> consumer confidence will come back and there will be spending. >> the reopening is not even in the market yet. this value trade is still relatively new. >> we do have inflation. that is good for the reflation trade. that is good. . for the cyclical trade. . that is where we want to be -- that is good for the cyclical trade. that is where we want to be. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz.

tom: good morning, everyon