♪ >> the $1.9 trillion u.s. stimulus, we think that will lift global gdp growth. >> we are about to have to $2 trillion stimulus, so the propensity for consumers to spend is very high. > there's going to be a burst coming in the next month, and then it is going to calm back down again. >> when they start to sniff out inflation, they are going to wait. >> policy at some point inevitably is going to shift. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: there is a monster plan in washington. 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. the price tag, $1.9 trillion. it goes to the house later.

tom: we get voting at noon into the 1:00 p.m. hour. you wonder within this churn this morning, when do we pick it up again with rising gdp estimates? jonathan: morgan stanley's ellen zentner, who really kick this off, goes again, looking for a 7% handle. tom: jp morgan, goldman sachs also talking about the global effect of what nancy pelosi has brought. jonathan: lisa, what next? that is the question being asked in washington now. lisa: in other words, what other stimulus are they going to come out with? are they going to have an infrastructure plan? how long-lasting will the effects from this stimulus be? when we were coming into this year, people were talking about $1 trillion. no one was thinking they would actually get this big of a stimulus done this quickly. jonathan: have you seen this

from dan ives at wedbush? 3 trillion dollars valuation on the horizon for cupertino, in their opinion. that is the apple story. they see $3 trillion on the horizon. tom: i am so glad you bring that up. i deferred to the true experts on the security analysis of apple. i read yesterday of their product launches, a reserve march 23 meeting, and then onto the autumn season in the usual they do. the pros are giddy about the new products to come from apple. jonathan: let's get to the story of the market right now. your equity market really muted going into cpi 90 minutes away. equity futures doing a lot of nothing. in the fx market, a similar story. the euro just a little bit weaker here. the story in the bond market, yields starting to creep higher, but you don't see a corresponding move in the equity

market in a big way. your yield, 1.57578 -- 1.5 570% on 10's. lisa: the correlation seems to be breaking down a bit, but it is a controlled move. we will be getting inflation data out of the united states. i am looking at the widening gap between inflation we are seeing in goods versus inflation we are not seeing in services. when do we start to see this shift? when do we see inflation going into both? right now it is going to be bolstered by gasoline prices going up. today, as tom was saying, around noon they are going to start voting on this 1.9 trillion dollars stimulus in the house. it is expected to pass. if the question is, what's next? how quickly can the get to infrastructure spending? how much can they get unity among democrats? will they go it alone?

then i will be watching bond auctions very closely. there's going to be a $38 billion auction of 10 year treasuries. very interesting to see whether we see the same dynamic we saw yesterday in that three year auction. we did see the highest bid to cover ratio, a sign of how much demand there was, going back to 2018. there was an incredibly different dynamic here in the long and versus the short end, with a great degree of uncertainty about inflation. the sword and very much penned by the fed, the long in -- very much -- the short end very much pinned by the fed, the long end pinned by who knows. tom: this is our interview of the moment. we had bruce kazin on earlier of jp morgan, to understand the miniature of em. we turn to gabriela santos of jp morgan asset management.

it is wonderful to have you on today. the chinese stock market is down 14%. it has truly plunged. why? gabriela: thank you, tom. in terms of the chinese stock market, we have seen a correction from those february highs. i think it has very much to do with a similar story to what is happening in the nasdaq in the u.s.. chinese markets are extremely growthy, very geared towards technology, innovation, and they did extremely well last year during the pandemic. top-performing market, up 30%. so i think all you are seeing is just a correction from very good year last year. tom: what everybody wants to know is your reset on emerging markets. you talk about a tug-of-war. there's many tug-of-war's in

many different parts of em. can you stay in em? can you add new cash to em, or do you dash to america? gabriela: no, emerging markets is both cyclically and structurally an overweight in our portfolio. but it is important to understand how emerging markets have changed. it is a different emerging market at the beginning of the cycle that it -- of this cycle than it was at the beginning of last cycle. it is more growthy. it has 65% exposure to growthy regions like china, korea, and taiwan. you can get a correction in broader em markets when you have a correction in growth. if you are looking for cyclicality, you have to do that actively. you can't just rely on the benchmarks. for us, em is really about output this year. it is really leaning into some cyclical areas of emerging markets. for example, in china, it is

playing the consumer recovery in china this year through consumer discretionary, as well as chinese banks, playing the improvement in credit growth, especially for small and medium-sized companies. lisa: can emerging markets keep rallying if the dollar doesn't we can -- doesn't weaken? gabriela: there are really two extremes that cause the dollar to strengthen, and neither of those are good for em. on one side, it is the u.s. doing better than everyone else, or u.s. exceptionalism. we had some of that at the beginning of the year. the other extreme is the u.s. doing to poorly -- doing too poorly, causing fears and the global economy. we have been between these two extremes causing dollar strength. ultimately, we think this is what should be a broader cycle of dollar weakness, as we get to the sweet spot where the u.s. is

doing well, but so is the rest of the global economy. lisa: this goes into your call where you said we see a positive set up for risk assets over the next 12 to 18 months. to me, this is the key question. how quickly do we move to midcycle? what are you looking at? what are the benchmarks to determine the answer to that question? gabriela: fascinating. this cycle is so different than the cycle we had last time. just the speed of which we are moving. in terms of the economy, we look at the unemployment rate as a measure of where we are in the cycle, and we think we will go back to full employment over two years. remember, that took 10 years during the last cycle, so we are moving fast for the economic cycle. the cycle doesn't end when we reach full employment, but it does slow down. in terms of the market, even faster. it took six months to reach

all-time highs instead of five years, which is what it took last time. i think we are also approaching a more mature phase of the market cycle, where there are a lot more related to earnings growth. tom: i would be remiss if i didn't ask you about is ill. we have brazilian real in retreat. i was totally wrong on lula and the prosperity of brazil. can he do it again? gabriela: investors, if you look at the way the brazilian real is moving, the answer would be no to that question. it is all about the team a potential president lula could get together. this time around, things are so polarized that we would really see less of a teen in the first time around.

so the balance of risk has worsened significantly related to local politics. jonathan: thank you. great to catch up. gabriela santos of jp morgan asset management. finishing up with brazil, that move on monday was massive for the brazilian currency, a 2% move, and we haven't really corrected and the subsequent days afterwards. tom: no, we haven't had all. i haven't looked at a long-term chart in a while and done the math or the technical analysis on it, but it is certainly in retreat. it is idiosyncratic, but nevertheless, the size of the brazilian experiment is very important. jonathan: that is the drinking game in em, and the story of the last 24 hours is a 1% upgrade to global gdp we saw off the back of a $1.9 trillion plan. how much of that is going to be about the united states, and how much of it will bleed out? we saw in the last crisis, coming out of it, china went gangbusters on stimulus, and it bled out. just by the nature of the

economy, i think a lot of economists would push back. tom: i thing we are going to see pushback on that, but also, it gets to feed on itself. it becomes a spiral, like the spiral of disinflation or deflation. you can have a spiral of stimulus, jon. lisa: can i just bring out this data from citigroup? i was referring to it earlier, about the vaccination schedules. they say herd immunity will probably be formed in most developed markets by the third quarter of this year, fourth quarter in emerging markets -- this year. for emerging markets, it turns to the third or fourth quarter of next year. jonathan: that synchronized story just doesn't stack up right now, does it? lisa: the question is, can we push past that? tom: herd immunity is when both lisa and jon ignore me. [laughter] jonathan: i think it is when we

are both vaccinated in the same room and ignoring you. [laughter] coming up at 8:00 a.m., patrick armstrong, plurimi wealth cio. futures unchanged on the s&p. cpi in one hour and 20 minutes, then a big auction a little bit later. this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. it's one of the largest economic relief packages in u.s. history. the house is set to give final approval to president biden's 1.9 trillion dollar package. it is likely to become law without getting a single republican vote in the house or senate. millions of american families will get a one-time payment of $1400 forget there will also be unemployment benefit and aid to

state and local governments. the pentagon will keep national guard troops deployed at the u.s. capitol through at least may 23. deployment began after to the january 6 riot. the chief capitol police asked for an extension. the two largest jet leasing companies are coming together. general electric has agreed to combine its leasing business with rival air cap -- with rival aercap -- with rival aircap. that adds to the risk of global inflation. the chinese producer price index was upom year earlier. that raises the prospect china could start exporting inflation as factories raise prices for products sold abroad. 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. ♪

>> i think it is a totally done deal. i think it is too bad because

the president in his inauguration speech said he wanted unity, he represents all the people, he represents all viewpoints, and yet when we get to a point where we could really negotiate with him and he had us at the white house to do just that, it falls very flat. jonathan: senator should be -- senator capito there from west virginia. from new york city this morning, good morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. here's the price action. up three on the s&p, around 0.1%. nasdaq futures coming into so little bit, not by a lot. yields creeping higher by three basis points on tends. dollar just a little bit stronger against the single currency. he wants unity, tom keene. he wants unity within his own party, and that is how they got this done. tom: the unity also has trouble with a vote of 51% to 49%.

that would be the 17th district of pennsylvania. kevin cirilli joins us now, our chief washington correspondent. he's not the joke -- he's not the joe manchin of the house, but conor lamb of pennsylvania come out how this you deal with stimulus -- of pennsylvania, how does he deal with stimulus? kevin: this is a tough vote for conor lamb. if you go to suburban philadelphia, another democrat, for these two individuals, they are making two very different calculations, but it is an illustration of where the democratic party is. conor lamb is crafting himself as a centrist. congressman boyle cosponsored senator warren's tax on ultra millionaires. i raise that because both are from suburban parts of what used to be a swing state, so

fascinating to see the political capital expended. tom: that's great, but do i need a four-lane highway command i -- highway coming out of pittsburgh? how do these moderates deal with the coming infrastructure debate? kevin: i put that question to senator capito from west virginia, the top republican on the committee for environment protection works, which has a huge portfolio that includes crafting a significant portion of any federal highways\ and other info sector projects. -- federal highways and other infrastructure projects. president biden has invited her to the white house over the past couple of weeks to discuss infrastructure, and she said the president has not put a price tag on the for structure project , but clear -- on the infrastructure project, but clearly republicans are going to be focusing on just how much the administration is willing to spend. jonathan: 2022, what are

republicans going to run on? do you think they will be fiscal hawks sounding a little louder as the months progressed? kevin: i think it is going to be a governor messaging year, and the sense that it will be less about what the divides in congress are saying and more about what governor desantis and governor abbott are saying. i raise that point because from the notion of reopening schools, as well as getting the economy reopened again, that seems to be the calculation that republicans are making heading into the midterm. jonathan: this is critical because the reopening started with texas, wyoming and others following now in various ways. do you get the feeling that the administration just can't set the tone on this, that they have no chance of doing that in the months to come? kevin: it started with former president trump. he made a short-term calculation that reopening the economy and schools would be a political asset, but that didn't prove to be successful in 2020. it is a calculation that the

governors of texas, maryland, as well as florida are making, and it seems to be right now a little bit more successful. just to put it in geographical terms, the mayor of washington, d.c. has yet to expand reopening's, but just four miles away, governor larry hogan, a republican and likely 20 put before candidate, has moved to reopening. there's a lot of division right now in terms of how governors and mayors are dealing with this reopening, and it is spilling into the halls of congress. lisa: meanwhile, i am wondering whether it is fair to cast president biden as a centrist. a lot of people have been talking about him trying to appeal to all sides and being more of a moderate. you are sort of shaking your head, and that is where i want to go. elizabeth warren has said personnel policy. based on the personnel president biden has put in his cabinet, what is he learning? kevin: he is a progressive.

there's really no other way to look at it. i think that would be music to a lot of progressives' ears like senator warren, but look, if you look at how an republicans are on board with this stimulus despite his overtures to them, and senator shelley moore capito put it to me yesterday, joni ernst the day before that, this is a president who decided on his crowning achievement in these first 100 days of office that he would not get any republican support, and that is something that is going to continue onward and have repercussions for his future political ambitions for his agenda. lisa: if you heard that noise, it was tom keene throwing the bill at the floor, and it was quite a loud noise because it is a big bill. tom: almost as much is the amex bill. [laughter]

as your monthly amex bill? i am wondering, what is inside that plan that may come as a surprise to some people that might be interesting, that you think you would illuminate today? kevin: the issue for republicans is not that there is money going to schools and money for vaccination distribution. i think the media has really miss frame to this, to be frank with you. the issue is there is a lot more money for many other different projects, and as a result of that, republicans are saying i are we spending more money for projects that have nothing to do with covid. that is the argument that has gotten lost in the discourse. jonathan: kevin, good to catch up, sir. kevin cirilli, our chief washington correspondent and host of "sound on" on bloomberg radio, weekdays at 5:00 p.m. eastern. our whole show is unscripted except for when i have to do that. [laughter] where i have to promo kevin's radio show. lisa: but we make that is

unscripted as possible around it. jonathan: since everything else is unscripted. 5:00 p.m. eastern, i'm told, 2:00 p.m. pacific time. let's move on. governor larry hogan, tom, i think this is really important, that the republicans, the state governors are getting ahead and getting out early. the point that kevin made that former president trump thought this would be an asset this time -- asset last time around, i think they feel a little bit more emboldened to do the same thing again. tom: it is going to be fascinating to see. by focus on the middle ground, joe manchin gets all the press, and i get that, there's many out there battling for the job survival out to november of 2022. that is going to be a massive focal point in these debates. jonathan: it feels almost unthinkable that both sides agree on infrastructure maybe. tom: now. lisa: it is hard to see -- no.

lisa: it is hard to see that ever happening. there's just too much divergence within the details. jonathan: coming up, kristin bitterly. it is great to be with you, tom. bond yields higher.

♪ jonathan: from new york city, for our audience worldwide, this is "bloomberg surveillance." a bit of outperformance on the small caps, underperformance on the nasdaq after a massive day of gains in yesterday's session. in the equity market on the s&p 500, up by about 0.1%. the rustle up by about 0.4%. -- the russell up by about 0.4%. tomorrow, $24 billion of 30 year supply. i think that is the story this time around. a couple of weeks ago when we had that ugly seven year auction, we were all over the place. tons of volatility all related. -- volatility already. if this demand isn't good later,

that would be a shocker. maybe what would dictate it is cpi in about 60 minutes' time. let's finish on this, foreign-exchange. tom: go to foreign-exchange, please. jonathan: thanks, tom. [laughter] dollar index, 92 handle, euro-dollar just south of $1.19. tom: i'm going to be honest, i think there's a nice little lift here. the vix comes in and equities do better over the last two hours. jonathan: up by three or four basis points, and no big fallout in the market right now. tom: you are just addicted to up 3% a day from the nasdaq, and that doesn't happen all like that. jonathan: where's the dow? lisa: wow. tom: the dow is up 118 points, there we go. jonathan: what does that mean? lisa: that's good. jonathan: sounds massive. tom: nailed it, jon. [laughter] jonathan: let's get to romaine. romaine: dow futures are in a

little bit of a holding pattern. tom: there we go. love it. [laughter] romaine: of course, waiting on that fiscal vote in the auctions. that may constrain us from another 3% day, but we are seeing a lot of moves to the upside on some individual stories here. ge, larry culp finally making good on that strategy to continue to lean out ge, merging that leasing business over with aircap. another $6 billion in new equity in new ventures. boeing actually rallied hard yesterday, and up again in the premarket, really doing well here. we started to see that backlog go up about selling airbus for the first time in about 14 months, a lot of signs that the company has finally turned it around. a lot of filing for the 737 max, not necessarily the larger

planes, but still somewhat encouraging. apple not getting a lot of pop in the premarket. dan ives offending his bull case he's had for some time. he's looking beyond to the iphone 13, which i didn't even know was a thing, saying the super cycle is alive and well, and apple is really going to continue to fire on all of those signals we know. gamestop had a wonderful day. tom: that's where i wanted to go. romaine: there you go. tom: you guys are expert on this on the close. is gamestop going up like the last time? romaine: the short squeeze we saw last time that took this to incredible heights, you are not really seeing that. the short entrance is about 1/3 of what it was at that time. now you have a lot of optimism about brian cohen. he was already an investor, now part of the committee that is apparently going to help move this company to more of an e-commerce type of business model. what that means, we don't know,

but there's a lot of safety net. his claim to fame is what he was able to do for chewy. tom: one of our viewers and listeners emails in, "ask romaine, is it adidas or ah-d idas?" romaine: it is ah-didas. [laughter] lisa: he had to teach it to you because you already knew it was adidas. jonathan: i love the dynamic, romaine taking digs at taylor riggs before she even what's up in the morning. [laughter] tom keene, big equity market move yesterday. tom: and we've got to reset. we do that with a single sentence out of the work of kristen bitterly at citigroup. "forget about the bowtie

pontification of the future. it is about what do companies deliver." i would point out, what i am really looking at his amazon on april 30. what are we going to see when they actually deliver earnings? kristen: i think this is the big tug-of-war going on in the market. on one hand, you have essentially covered cyclicals, covid defensives, covid winners, and this mean reversion in the market that is really dominated the market for the past several weeks. then you also have these big companies that have continued to deliver on earnings that have really impressive revenue growth , is there a chance that the big money gets bigger? from they are, we are in a position that yes, these defensive's thin those sectors, you're going to have some that aren't going to continue to grow at the same pace, but there's a

couple of companies that, when you look at the percentage of market cap versus their contribution to earnings, they are actually contributing more to profits than they are to market cap, so we could see continued strength. tom: dovetail your work with people who are afraid -- i know you are on speaking terms with tobias levkovich -- can you add cash today into the market? ? can you acquire shares this morning? kristen: yes, absolutely. look at what we are talking about. we are talking about inflationary concerns. if you are worried about inflation, cash is punitive. we are also looking at it is impossible to time the market, so if you miss the five best days year to date, you basically have a negative hit to your overall return. if you take that to all of last year, you would have gone from a u.s. equity return of plus 18% to -18%.

these markets are actually very difficult to understand the price action that is going on. even look at what happened yesterday. there are areas that come on a relative basis from a valuation standpoint, are attractive, and they serve a really good purpose in the portfolio. i would point to global healthcare, which is actually trading from a relative pe standpoint at 10 year lows versus global equities, so there are these pockets that do both things. they actually insulate your portfolio from inflation and from a valuation standpoint are attractive. jonathan: you know what the ultimate barbell stock has been over the last 12 months? the walt disney company is the ultimate barbell, from being closed down to reopening. i wonder whether that is the broader strategy, to be barbelled here and not try to tie the rotation back and forth through the next 12 months. kristen: absolutely.

whether you call it barbell or whether you are saying let me understand where i have outsized risk in the portfolio, but we have been doing is in these covid defensive's, we have been pulling back over the last couple of months and allocating to covid cyclicals. we have been balancing out the u.s. centric exposure with some of the international exposure where we see better opportunities, both from a valuation standpoint as well as a mean reversion. then you have participation in the economic recovery because we know, as you said earlier, the data is going to get better. we are going to see a reopening. 15% of the global economy is still shut down. you want to participate in that, and relies cash is punitive. you want to protect your portfolio against what we know is going to be an increase in inflation short-term. lisa: is the 60/40 portfolio dead, or just sleeping until we normalize rates? kristen: it would be really bold

to say it was dead. [laughter] so i am going to go with the 60/40 portfolio right now is a 70/30. you have to dig about what are you achieving with your portfolio. generally it is some type of diversification, yield, growth. at 40% is not giving you the yield that you want. it is not giving you the income you need. so shifting that portfolio to 70/30 is something we have been recommending. we talk about volatility in the market. volatility you can monetize. when we see days like over the past couple of weeks, you can actually sell volatility that gives you the ability to buy into the market at 10% lower than what is currently trading, and earn double per annum yields. this is a really smart way we are seeing people who have been in cash, sitting on the sidelines, at exposure, augment yields, and not add duration to their per folio. jonathan: kristen, always good

to hear from you. the story of this market so far, really difficult to time. i think that is the take away. tom: i love what you said about barbell, jon. i am really going to shout out john golub at credit suisse, who i think was way out front on the concept of barbell and having to curb the tech. jonathan: they are often not the same answer, and i think that is the issue that the likes of black cross and credit suisse have got -- that blackrock and credit suisse have got. tom: kristen bitterly says, what are the actual earnings going to be? you see that with adidas today and a real shift in their optimism. [laughter] lisa: he's going to say it is much as he can. kristen bitterly just showed who's buying the debt, everyone -- buying the dip, everyone. they see an opportunity to get in more deeply.

yesterday was the second best day for the long bond in four months. it was the best day for the nasdaq in four months. the correlations are genetic. jonathan: deeply -- are dramatic. jonathan: deeply correlated. lisa: at a certain point, are the same people on the same sides of this trade, just whipsawing either direction? jonathan: it's all been one trade. that is why we got the likes of tom keene slightly interested in an auction later this afternoon, and tens and 30's tomorrow. everyone has become a rates strategist. tom: but being honest here, within the nuances and mathematics of those announcements, and with immense respect to bloomberg world leadership in bond coverage, where abramowicz was weaned, does anybody show up at the margin? and the answer is they will. lisa: they showed up in force yesterday. it is one thing to show up in force for three years, another for 10 years. jonathan: it is. i just inc. it would be such a

shocker, given the move we have seen over the last month, not to see that come back in. coming up in the next hour, jared bernstein, u.s. council of economic advisers. looking for to that. have you got some thing else to say, ah-didas? [laughter] [indiscernible] tom keene talking absolute nonsense for the next hour and 20 minutes, and then it continues on bloomberg radio. [laughter] lisa: throw a book. jonathan: this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. the house is set to send that one point $9 trillion coronavirus relief package to president but -- at $1.9 trillion coronavirus relief package to president biden's desk. house democratic leaders expect final passage this morning. the measure also includes supplemental unemployment

benefits and expansion of the child tax credit and 82 state and local governments -- and aid to state and local governments. biontech says it could have the capacity to make three vaccines with its partner pfizer next year. they have committed to making 2 billion doses this year. bitcoin rally this week is on hold. the price of the largest digital currency fell after briefly crossing $55,000. there is speculation whether bitcoin will be able to hit the record of just over $58,000 it set last month. price has been bolstered by growing talk of institutional interest. the cease-fire in that big trade war is working. once again, china is the biggest customer for u.s. farm products. according to "the wall street journal," american farmers are exporting record amounts of crops and meet to the chinese, more than before the trade war. 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 rick agrippa. this -- i'm ritika gupta. this is bloomberg. ♪

>> a pickup in real rates is what is driving the dollar, what is driving the concern and

corporate spreads, and that is when i think the fed will start to worry. it is the indecision between how the fed's reaction function plays out and the pickup in inflation we are likely to see. jonathan: that was david page, accent investment managers -- david page, axa investment managers head of macro economics. we count you down to a cpi print in america. the s&p 500 almost entirely unchanged. not a substantial move lower on the nasdaq 100. a huge move higher in yesterday's session. yields are up three basis points going into this auction a little later this afternoon. in the fx market, really quite stable on the euro now, in and around $1.19 at $1.1885. tom: in cooperating with that end of pandemic joy, some of it

is earnings statements, and some of it is transactions including what larry culp is doing at general electric. we are thrilled to join -- holding court at bloomberg intelligence, leading all of our industrial coverage. karen, was this transaction a surprise? karen: i thought eventually down the road we might see this, but i certainly didn't expect it this soon. larry culp has also done other surprising things the sale of biofarma. tom: if i look at this, to me, the focus is the leasing of airplanes. it just seems to be a regulatory nightmare in washington. how will the biden adminstration creek this transaction -- adminstration great this transaction? karen: i think the environment is clearly probably more

difficult under biden, but i did defer to our aviation analyst expert, and he seems to think that the leasing business was quite a fragmented business, and there would not be a problem on a global basis. basically, it is a comp lament refit. -- it is a company fit. aircap is stronger outside the u.s., ge is stronger in the u.s.. it is a good mix. the fleet is come lament or he -- is complement three to a large part as well. at first glance, it looks like it should fly. lisa: you said you were sort of expecting this type of transaction, but the timing was a bit sooner than you expected. do you have any insight or expectations about why they decided to speed up the process? is it because of financing conditions or in expectation of yields going up? karen: given where we are in the aviation cycle, i kind of thought, why now?

but the way they have structured the deal, ge is essentially going to own 40% of the company, so they will participate in the upside, just not as significantly. i think with the surprise of covid and what it did to their strongest business, ge's timeline was stretched out in terms of improving the financial conditions. culp took a big step by selling biofarma. earnings are going to come back very slowly in aviation, so the timeline to get the financial conditions really stabilized is going to be a lot longer without the earnings from aviation. i think he just decided, we've got a fit. i don't know who approached who. but this is a way we can participate in the upside and deal with our financial conditions in an accelerated timeline. jonathan: a headline crossing the bloomberg, american airlines

boosting its offering to $6.5 billion. lisa: there's plenty of demand for this debt, despite the fact that the volume of people actually flying is incredibly low. merrick and airlines has piled tons of debt -- american airlines has piled tons of debt on its portfolio already. jonathan: what shocks me about this deal this morning, what are we talking about in cash, $24 billion for ge? the market cap at one point last year was $50 billion. that is phenomenal, karen. karen: he's done a great job generating cash and surprising us in terms of addressing what everybody is worried about, which is their debt, their pension, the whole balance sheet side of the equation. earnings will turn and most of the businesses this year. we won't see much out of aviation, but we certainly will see improvements.

the overhang is the balance sheet. it is going to take a big chunk of that concern away with this deal. it's a lot of cash. jonathan: just a final question, what is left to monetize, do you think? karen: there really isn't much of anything big left. he will wind down the rest of ge capital, and there's nothing big there to sell. i think there's pieces in power, the power services business, the grid business, but the big stuff is done. of course, you've still got the remaining baker hughes ownership that he can get through as well, so he's still got some money, but the big stuff is done. jonathan: the phenomenal karen able heart -- karen ubelhart of bloomberg intelligence, thank

you. the story of the last 12 months and the huge turnaround we have seen in the value of assets, the value of bond markets, and the ability of these companies to come to market, whether they are doing a deal, coming to a market and offering debt, to get a better price. tom: i would suggest so much of this is just the nation's confidence, may a business confidence, and that people are waking up and seeing the medical news we are seeing, and it breeds confidence from the c-suite out across the nation. lisa: just to give you more color on this american airlines deal, they've boosted their bond offering. there's also a $2.5 billion loan associated with this particular offering as well. if i am doing the calculations correctly, we are talking about a $9 billion deal on top of the other debt it has raised. my key question is how much are companies trying to expedite some of their bond sales and debt sales now head of interest rates rising, and as people get

cool a little bit about how much of an opportunity there is? in terms of upside, in terms of gains beyond coupon clipping, including, for example, american airlines, which has a ccc rating from the rating agencies. jonathan: we talked about tens later, 30's tomorrow. think the weekly total could be anything between $40 billion and $50 billion. there's a ton of debt coming to market, and i think it is the pressure on the fed. for the federal reserve, they can't allow financial conditions to tighten, spreads to widen too much. this really underlines the fact that they haven't got the ability to let that happen just yet before this economy really gets roaring back to business. tom: the phrase is degrees of freedom, and there's no question they have less degrees of freedom, but they've also got the might of the american economy. you can see it in the

vaccination, how big america is is important. jonathan: coming up, patrick armstrong of plurimi wealth, the cio. your equity market up a single point. heard on bloomberg radio, seen on bloomberg tv, this is "bloomberg surveillance." ♪ g tv, this is "bloomberg surveillance." ♪

>> the $1.9 trillion stimulus, we think that will lift global gdp growth. >> we are about to have $2 trillion stimulus, so the propensity of consumers to spend is very high. >> inflation is going to be a burst coming in the next 12 months, and then it is going to calm back down again. >> the fed is not going to hike when they start to sniff out inflation. they are going to wait. >> fed policy inevitably, at some point, is going to shift. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa