♪ >> this is an unwind of an unlevered position. >> i think we are four to six weeks away from this economy completely reopening and taking off. >> we have to be conscious of the fact that the vaccine alone and the covid story alone does not tell the whole story. >> this is going to build a lot of momentum as the year goes on, so i think the economy is going to heat up a lot. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: from new york city, for our audience worldwide, good morning. this is "bloomberg surveillance ," live on tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. your yield a little earlier today north of 1.77%.

right now, 1.76%. yields are higher by five basis points. tom: we've got red and green on the equity screen, but all said and done, the markets exceptionally resilient. you roll into wednesday and thursday with claims, and then jobs day friday, and you wonder whether it is the first inkling of that 8%, 9%, or even 10% boom economy. jonathan: payrolls. you keep going, these numbers are huge. tom: ethan harris will join us, of bank of america. what is important is where the survey migrates wednesday, thursday, friday. if we go 6.50% to 6.75%, that is the kind of trend -- if we go 650,000 to 675 thousand,

that is the kind of trend. lisa: will there be enough investors, especially as you do get this question mark about how much the fed will allow that long and to rise? at what point does good news become bad news for markets as we see the rising yields really pressure some of the more levered positions across markets? jonathan: right now they are comfortable, and they have been for a while. yields are higher, the curve is steeper. your 10 year up five basis points to 1.76%. outside that, in foreign exchange, dollar-yen has a $1.10 handle. euro-dollar, $1.1732 right now, down 0.3%. there's the equity market. it is a mild move, but we carry on rolling over just a little bit, down 0.2% on the s&p. lisa: this comes only heels -- this comes on the heels of

higher yields. i am so curious for 9:00 a.m. today. the fed's randy quarles will be speaking. how much is the fed worried about the consequent of their -- the consequences of their ultra low rate policy? i still have some gloom. there is concern that higher rates will push some of the leverage out of the system, as we saw with archegos, although perhaps not to the same degree. at 10:00 a.m., potentially we get march consumer confidence data. we are expecting a third straight month of an increase. people are feeling better if they can get inoculated, they can go on vacation and finally start living life that they remembered once enjoying. i to: 30 p.m., we will hear from new york feds -- x 2:30 p.m., we will hear from the new york fed's john williams. what does the new york fed see in terms of the leverage buildup

, in terms of the risk of a known mode -- of a disorderly unwind? that is what chair powell has been worried about. his archegos -- is archegos a sign of perhaps more in stability? jonathan: with us now, greg peters of pgim. is there anything more to worry about from your perspective? greg: not necessarily. i think the concerns have to be there. everyone is worried about financial stability. i think the fed is definitely concerned about it. the real question is what do you do about it. the short answer is not a lot. i think it will be this constant climb of the wall of worry about financial stability. what i do think is we are in this regime where you will see a lot more extreme volatility given the slow rate environment

with this hyper growth backdrop, with a very accommodative central bank. i think this is the world that we live in. expect more extreme volatility here because that is the relief valve in the marketplace. tom: i want to go to a pro question we have heard from every civil fixed income client, which is bringing in or taking out the ration, a nonlinear function. at what point in the exercise of bringing in duration does it become harder and harder to do it? greg: it has been hard for sure. but i think you are getting really close. you wake up and you see another infrastructure plan on the table , so it is unclear what that looks like, the size and so on and so forth. but this is a market that has been driven by the narrative more so than the bond.

you are looking at some of the levels in the bond market, and it is increasingly enticing. so i think the move has largely occurred. i just think the narrative will continue to push yields higher and the curve steeper, but i actually think this is creating a tremendous opportunity down the road. i'm not sure if it crests in the second or third quarter, but i do think you are getting to a place where a bond math will start to assert itself, and the narrative is going to take a backseat, but we are not quite there yet. lisa: but are you still buying? greg: you guys always ask. yes, we have pared back our duration. we had too much going into this year. we have pared back substantially and moved our position around the curve from out the 30 years in the five years. but no, this is not an all clear

signal by any stretch because i think the narrative continues to push yields higher. at the same time, the good news is there's value being created. i think you're getting closer and closer, and i think many are starting to feel the same way as we do on that score. jonathan: as the year grows older, the outlook it's a little more interesting. right now, the outlook is clear. yields are up because the outlook looks so good. we're going to look at payrolls growth may be north of $1 million. where do you think that pivot comes, that inflection point? greg: i think the important part of the discussion is that it been pushed out. initially, our thesis was much more of a sugar high, where you see tremendous growth and then this reversion to the growth we observed prior to this crisis. what you're seeing, though, is

that the data and forecast is getting pushed out. so 2022, or numbers now are 4.5% , which is well above trendline growth, and frankly, we haven't seen 4.5% since the late 1990's. this is a protracted recovery, which is really good news. i think that kind of pushes out the story, but ultimately, all of the debts that we have created does act as a pinch point around future growth, and i think that will start to assert itself. i just think it is going to be delayed from what we initially thought. but the inflation side has a much stronger view. i think that will roll over for sure. lisa: a pinch point for growth, also for specific companies and their outlooks. you like to talk about pendula here on "bloomberg surveillance ," so let's talk about the pendulum of credit versus duration.

for a long time this year, it has been credit, the riskier the better. that is what is going to outperform. is that shifting back to duration with credit risk becoming more of a concern? greg: i'm not sure it is a concern, but if you just look at the numbers in the investment grade corporate market this year , the total return is down 4.5%, so the spreads component, the credit spreads component is up 44 basis points. basically, the duration move has swamped everything. i think that is the way to think about it going forward. but this time last year, coined the golden age of credit, i still think we are in that age, but it is very compressed relative to my initial thinking. so isaac we have time, if you look at what is outperforming in the first quarter. it has been the most covid sensitive sectors. i think there are still legs to that, but ultimately, what i worry about about this golden

age of credit thesis is that the cycle is much more compressed relative to what we have seen in the past, and ultimately, credit investors have to worry about deleveraging which is not the case yet, but it is coming sooner than we anticipated. jonathan: greg, good to catch up. greg peters, pgim fixed income head of multisector and strategy. in europe, credit suisse was down yesterday by 1.38% at the close, down another 2% this morning. we were down yesterday by a couple of percentage points. this morning we are positive about 0.7% in early trading. tom: i looked back at my research. two years, three years back maybe, it was the usual hedge week. wonderful journalism about the excitement of advancing your prime brokerage platform. the bottom line is everybody is effervescent stop at all time --

is effervescent to increase business. that is what happened here. that's all there is to it. jonathan: we know it is interesting about morgan stanley, though. morgan stanley were also offering investment banking services, reportedly, do the capital rates we got from viacom which really started this all off in a big way. so they were offering investment banking services to help this company do a capital raise, etc., and then doing prime brokerage with this company that was heavily levered in a long position as well. just saw those two things come together. lisa: you can only imagine what the internal meetings must be like, although potentially not as contentious as nomura. morgan stanley and goldman sachs went ahead and unwound some of those block trades without the other banks signing off, which was something that has become a

point of contention. jonathan: the reports have been amazing on this. credit suisse were trying to play happy family, we will all get together. tom: nonsensical. just like the three of us. [laughter] jonathan: who's goldman around this table, and who is credit suisse? we are not going to do this. james bevan, ccla chief investment officer. from new york city, this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. ships are on the move again in the suez canal as an almost week long effort to dislodge a giant container ship stuck in the canal finally succeeded. authorities expect operations to return to normal within days. hundreds of ships were forced to wait in line. biden adminstration is sounding sharply divergent notes on the coronavirus pandemic. president biden celebrated a ramp-up and vaccinations. he said 90% of u.s. adults will be eligible to get a shot by

april 19. meanwhile, the head of the cdc pleaded with americans to wear masks. he warned of "impending doom" as cases and deaths start to rise again. drivers won't be asked to pay for president biden $3 trillion infrastructure plan. transportation secretary pete buttigieg ruled out plans to increase the federal gas tax or charge drivers a fee based on miles driven. the problem is that the federal fund that pays for roadways and transit system is funded by the gas tax, and that currently runs at a deficit. shares of the chinese parent of tiktok trading at a valuation of more than $215 billion. bytedance's value has surged in recent weeks. investors have gained confidence in the business, and the founder has weight options for an ipo. paypal has ruled out a cryptocurrency check out feature in the u.s. starting today. customers with cryptocurrencies in their paypal while it's will be able to use them on paypal

merchants. lisa recently said it would -- visa said it would recently use cryptocurrencies on its network. 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. ♪ ♪

pres. biden: the war against covid-19 is far from won.

this is deadly serious. dr. walensky, the head of the center for disease control and prevention, expressed earlier today this is not a time to lessen our efforts. jonathan: some real cautious words coming out of the cdc over the last 24 hours. that was president biden referring to them. good morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. tom, i'll whip through the price action. your equity market is just a little softer on the nasdaq. yields a whole lot higher. on .77% on tens briefly -- 1.77% on tens briefly. we are down 14, off by about 0.3%. tom: notice gold as well, down $24. bitcoin to the moon, $59,000. a lot of big questions about the state of washington after listening to president biden there. i have to address with kevin cirilli the devil because he's

-- the delicacies of the moment. it's the history of the 19th century, widely chronicled, who were in office and ill. give us the state of the president's health in his day-to-day grind at the white house. he's been doing it almost 100 days. how's he doing? kevin: the white house has said publicly that his health is in good condition and that he is considering to aggressively fulfill and execute his duties. i think that a big test is going to be tomorrow, when he is in pittsburgh, pennsylvania to unveil a sweeping economic plan as it relates to infrastructure, taxes, college tuition, and a long-term policy agenda in many ways, not just for the country, but really for the direction of the democratic party. tom: besides holding court their pre-pandemic, you are known for

understanding the pulse of the white house. if a seer tone on the day-to-day white house that you have observed under president biden. kevin: candidly, i think that you have a well experienced staff, but i also think at the lower staff level, you have this fascinating dynamic in the pandemic era where a variety of staffers are working from home, and that is a stark contrast to the previous administration, where most of them were going into the office. interpret that information as you would like, based upon your political leanings and your feelings about the cdc guidelines and whatnot, but either way, objectively speaking, working from home and government prevents a lot of challenge -- working from home in government present a lot of challenges for deliberations. candidly, congress, the core staff has been working for months in the halls of congress.

jonathan: there's a big reveal tomorrow. what is left that we don't already know? kevin: how they are going to pay for it. that precisely is what white house press secretary jen psaki was alluding to yesterday when she said that president biden in his address would make some announcements for how he does plan to pay for it. some are estimating it could cost upwards of $3 trillion. it is like a budget, a wish list that the prospective office would like to get if they had their way. but this is a massive undertaking, and whether or not they are able to just push through one giant package, it is looking like they are going to have to chip away at it and take a piecemeal approach. jonathan: senator warren went at it with amazon on friday. we forgot about it coming into this week. but there is a real ceiling in d.c. that these big tech companies just aren't paying their fair share when it comes to the profits they make in this

country and the money they get back to the treasury. what can they do about that? kevin: they can raise the that is where they feel the corporate tax rate is ultimately going to be headed. i don't see how they are able to get that through. i also don't see how that would be a long-term sustainable goal, especially when the political tide, so to speak, of midterm elections, of presidential elections in the future continuously point to their being a back and forth in terms of which party has control and power. lisa: yes, there's taxes. there's also the antitrust effort led a stent simply by lena con -- led a stent simply -- led a stent simply by lena con. what can you tell us about this team that biden has assembled?

kevin: there's also some widespread consensus in terms of antitrust in some aspects and elements of this there's agreement between republicans and democrats in some crevices of congress. but from a broader standpoint, how they are able to regulate big tech is one of the biggest unknowns, and whether or not they are able to do it out of the committee structure or if it is going to take executive order on behalf of president biden, we will have to wait and see. lisa: we talk about the speech tomorrow out of pittsburgh, how much consensus has there been established among democrats? are they coming into this with a bit of a platform that they know they can pass, or are we even more far apart? kevin: i think this is an opening bid. this is going to be an opening bid tomorrow for president biden in pittsburgh. mind you, president biden has a long history with pittsburgh. back in 2015, when he was toying with the idea of running for president against then

front-runner hillary clinton, he ran in a labor day parade with union members to try to drum up support that he would be able to beat hillary clinton back in 2015. he decided against running. bring that up because this is a manufacturing pitch, a working-class pitch, and the type of coalition he has been saying that he would be able to put together since as far back as 2015. jonathan: kevin, good to see you, as always. host of "sound on" on bloomberg radio, weekdays. take a listen to this. "you make the tax laws, senator moran. we follow them -- senator warren. we follow them." this is what she had to say in response. "you can bet i will fight to make you pay your fair share and breakup big tech so you are not powerful enough to heckle

senators with snotty tweets." the story around making these companies pay their fair share is where the massive policy effort is going to be. tom: this goes to the tax legislation. is it going to be personal or corporate? i don't envision anyone in the modern democratic wing talking about individual tax increases. there may be a token number out there, but this is going to be all about business, all about corporations. jonathan: north of $400,000, i think there will be some tax increases on the income side. lisa: the thing about big tech is how much can republicans and democrats get on the same page? if they both agree on the antitrust front to some degree, can they agree on higher taxes? kevin: for republicans, -- jonathan: for republicans, it is pretty straightforward. it is not the time to hike the corporate tax rate as we start a recovery.

tom: i think most people would look at the actions of corporations after the last corporate tax cut, and that is the evidence they are going to debate in washington. jonathan: coming up, the cilia skier knock us -- coming up, the cilia skier knock us -- coming up, vasileios gkionakis this is bloomberg.

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♪ jonathan: from new york city for our audience worldwide, this is "bloomberg surveillance," live on tv and radio. equity futures down 0.3% on the s&p. relative performance has been the story since the beginning of november, and the story this morning as well. the russell down by 0.2%, underperforming the nasdaq, up by 0.6%. correlation or causation? we can do that again later, for the 20th time in the last few weeks. yields up on the 10 year to 1.75%. we take out the post pandemic highs intraday. yields up on the 30 year by three basis points. let's finish here. the bond market elsewhere, in germany, and the u.k.. at the start of january this

year, we had a yield on the u.k. 10 year at 17 basis points. else right now, 80 -- gilts right now, 86 basis points. what is interesting about this morning, the move isn't just treasuries. . once again, it's global. it's the u.k., and it's germany, too. the bund off by about five basis points on the day. we know this story, undo tightening. the ecb has said they are committed to actually frontloading some of that bond buying in the coming quarter. wind is that big effort actually begin -- when does that big effort actually begin? tom: this is europe flat on its back the failure of pandemic. they've got to get their act together. jonathan: bottom line. what we are seeing in the united states is a lift in yield consistent with a brighter outlook. you don't see that in germany. you do see that in the u.k. this is the broader macro story

without a doubt. it is a blowup of a big fund. can we call it a hedge fund? here's romaine bostick. romaine: pretty much whatever you want to be, given its size. the follow-up still continues, with people trying to figure out who's going to be left holding the bag. you see some of those buyers coming back into the market. take a look at viacomcbs, not only getting busier in the premarket. we got a couple of upgrades on the stocks, premier league based on the valuation, and more importantly, that valuation dropped making it a little more attractive than it was the prior day. vip shop also got cut up in this, getting a bid not just because of folks coming in because of valuation, but also announcing a stock buyback. taking advantage of that to give a bit of a boost, and the thanksgiving a modest rebound here. morgan stanley one of the banks on the u.s. side that is down about people and 6%. flip up the board and look at some of the more individual

stories that have nothing to do with what is going on at archegos. take a look at gamestop, a fan favorite of yours, tom. they finally got a few new executives. one from amazon will be joining as their chief brand officer. two other folks were already within the company, tied to chewy. they are basically coming in and merchandising as well, so if there is a fundamental story to all of that, the gamestop saga, then here it is, getting a little bit of a boost. and paypal, pet attention to that. paypal will begin excepting cryptocurrency for a lot of payments beginning this very day. tom: very good. thank you so much. greatly appreciated. at the close this afternoon, maybe we will have more information on this banking story, this margin call story. i am going to editorialize here. i think it is so important. what has changed from wall street from 1998 out to where we are now?

it is the corporatization, the public stock structure of our banks. banque lombard odier, led by patrick odier and the family, is a completely different story. imagine if we had the partnership structure of bank lumbar oda -- banque lombard odier with the prime brokerage mess we are in now. we digressed now to foreign exchange, and the cilia skin knock us -- and vasileios gkionakis, we are thrilled he could join us today. are we resilient dollar, or do you adjust to a new strong dollar? vasileios: well, it is a tough call. all of us got it right, at least so far in 2021. i thing we have a couple of things going on here.

first of all, we have the global recovery. you see a synchronized increase in yields and a weaker dollar, and this is what was expected. but what we have right now is in unsynchronized recovery as far as the pandemic is concerned. right now you have the u.s., about 45% of people inoculated. pretty much the same in the u.k.. but the you -- but the eu is lagging behind significantly. i think there is an element there that that gross recovery is going to become less synchronized then it initially was expected. that is actually what is giving the boost to the dollar. that is why you have seen u.s. to german bund yield differentials widening. so yes, the dollar has been resilient. it has risen significantly on a trade-weighted basis. i still think we are relatively early in the global recovery. i think it is going to be quite a sharp recovery.

i think once we get that vaccination gaining traction out there, i think we are going to find ourselves in a moderately lower dollar environment. jonathan: let's talk about the yields we have seen. euro-dollar breaking down to $1.17. are you willing to fade one of the pairs and some of those moves now? vasileios: well, dollar-china, i think 6.55 to 6.60 is likely to be the top. i say this largely because the chinese economy has weathered the pandemic very effectively. we have seen some very tentative evidence of a marginal slow down , so we are going to see flows into china. i still remain a remain be -- a renminbi bull in that respect.

i don't think we are going to break it unless something goes terribly wrong, whether in the pandemic or a black swan. at these levels of $1.17, monitoring the develop and for the vaccination in europe, i would be tended to return long euro-dollar here. dollar-yen has been quite disappointing for us and for a number of people. i think above $1.10, i am inclined to throw in the towel a bit. i think it can go a bit higher, but with yields right now at 1.75%, will we see a very robust and sustainable retracement below 105 towards 100? i think it is going to be very difficult. jonathan: euro-dollar, $1.17. pushing back against some of this recent dollar strength.

lisa: a lot of people are saying that, and it certainly coheres with what we were saying into 2021, the dollar would weaken as we got a secret as global growth picture, which really raises a question of whether we have beaten out some of the dollar shorts sufficiently in order to get to a place where we are not worried about leveraged carry trades unwinding, not worried about further people being called out sort and having to unwind, and causing further strengthen the dollar. vasileios: not right now. that was definitely the issue a couple of months ago, but right now, what we can see from publicly available data, we are no longer in an environment where we are significantly short. the speculative community is that we turn marginally long dollars, so i am not much worried about the positioning. i think the short squeeze has actually materialized, has taken

place. it has strengthened the dollar, but i don't think it is going to have any meaningful or noticeable impact going forward. i think right now it is going to be a tug-of-war between momentum and what is happening in the underlying fundamentals, how quickly a large number of developed economies are going to get their populations inoculated so that you can reduce the risk of further lockdowns and, economic impact. jonathan: good to see you. the cilia skin i guess -- vasileios gkionakis there. what we have seen as a synchronized global growth call, but what we have actually seen a something very unsynchronized. that is what you have to grapple with. together with a synchronized lift against yields, and unsynchronized global growth story. tom: it is about flows and relative interest rates.

i would guess now relative interest rates are predominant with the united states 10 year yield, 1.76%. to me it is a humility. we are in march, almost into april. you go back and look at where we were with the year forward reviews, it is different right now than we thought. jonathan: and growth differentials, too. look at the basics. to hear from greg peters of pgim at the top of this hour say that it is no longer just about a big burst in 2021, thinking more about that continuing in 2022, that is more new. that's fresh. people are having that conversation a little bit more. i think that started with ellen zentner of morgan stanley really pushing out that growth story to next year, too. tom: morgan stanley saying a bigger boom ended drop off, versus what peters is talking about -- bigger boom and a drop-off, versus what peters is talking about. jonathan: i think morgan stanley

refined that, talking about a cycle that is shorter and hotter , but overwhelmingly, i think the consensus right now is starting to shift the view for 2022 as well. lisa: i wonder when people start talking about deceleration and what that means for some of the overleveraged economies, how much that becomes the focus. we talk about the dollar strengthening. i keep wondering what this means for emerging markets. the idea that yields go higher in the u.s. in this nonthinking nice recovery, -- in this unsynchronized recovery, it is harder for them to pay it back. jonathan: there is the hope that we get this rolling reopening. that is the hope, right? lisa: the hope trade. jonathan: coming up in the next hour, representative gregory meeks, the democrat from new york and chair of the house foreign affairs committee. looking forward to that conversation. from new york this morning, good morning to you all. alongside tom keene and lisa abramowicz, i'm jonathan ferro. your equity markets down 15

points on the s&p 500, -0.4%. your headlines in the bond market, tens, 1.77% briefly. heard on bloomberg radio, seen on bloomberg tv, this is "bloomberg surveillance." ♪ ritika: with the first word news, i'm ritika gupta. president biden is planning to take on the nations challenges -- the nation's challenges on inequality. he will start to outline his plan tomorrow in a speech in pittsburgh. the president's remarks will lay out the infrastructure part of the $3 trillion spending package . social spending programs will be unveiled next month. the immediate crisis of the suez canal blockage has ended, but the battle over damages a just beginning -- over damages is just beginning. it was estimated to have cost more than $10 billion per day.

it is likely to lead to a flood of claims by everyone affected, from the shipping lines to manufacturers and oil producers. ioan tech has raised -- biontech has raised the number of vaccine doses it plans to make this year by 25% to 2.5 billion doses. biontech and pfizer collaborated to produce the vaccine. it estimates that in the fourth quarter, it took in 2.5 million dollars in revenue versus $35 million a year ago. the world's top-selling automaker says production rose 4.6% in february from a year earlier. toyota is less exposed to the chip shortage because it keeps a strong stock of key components, including semiconductors. the u.s. is abandoning its antitrust battle against qualcomm, accused of having a

dominating position in chips. they found qualcomm's practices weren't anticompetitive. 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 we are seeing a bit more in terms of drips and drops , but the main bulk of it has

been digested. we are just not seeing the kind of crazy activity we saw on friday. as far as we can tell, those seem to have abated for now. but it is way too early to give a full all clear. jonathan: the interactive brokers chief strategist. good morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. here's the price action this tuesday. equities a little bit lower. a mild move on the s&p 500, down 0.4%. yields higher. we had north of 1.77% on tens. euro-dollar clinging to $1.1732. let's touch on lira. still lira weakness, but that currency pair up 1.7%. the cpi outlook requires a tight monetary stance, i.e. the policy rate has to be above the inflation rate. so far, if the governor was set

to be replaced by a governor who might not do what this market wanted to do, at the moment, at least, he is saying what some people in this market want to hear. tom: the market is churning, no question about it. i really want to look at the correlation. we are going to address that right now and into the beginning of the 8:00 wall street time hour. gina martin adams joins us, with bloomberg intelligence. you have been dead on on corporations framing up for a boom economy. we have a problem. you and i have never seen a boom economy like this, and none of the corporate leaders have ever seen a boom economy like this. how do we know how to guesstimate q2, q3, and q4 in the equity world? gina:gina: i think you hit it spot on. frankly, the analyst community has been behind this recovery since the second quarter of last year, and at least the economic indicators would suggest that

they are remaining behind the recovery. it's just a couple of steps. retail sales are 8% above their former peak levels. industrial levels are nearly doubled it is above their former peak levels, yet analysts are saying s&p 500 revenues are just barely going to match former peak levels over the course of 2021. so there is still a lot of catch-up going on. we haven't seen something like 7%, maybe 10% growth in 2021 in terms of real gdp growth. we haven't seen that kind of recovery. we also hadn't seen the type of recession that we had in 2020. this is important to consider. that immediate shutdown of the economy hadn't happened before. very mechanically driven, completely unnatural as far as recessions go. so now the recovery is somewhat unnatural as well. i think we will continue to follow the pace of economic indicators closely.

as we navigate our way through what is going to be a very unusual economic cover in the united states. lisa: what is the most important data? we talk about inflation ended high into yields, and we also talk about the profits of some of these companies. what are you looking at? gina: we run a fair value model for the s&p 500, and it is a very narrow list for driving earnings as well as valuations. clearly on the valuations side of the equation, multiples very closely related to what happens in interest rates, but also corporate credit spreads and inflation. we want to watch inflation because right now, rising inflation pressure is actually a very good thing for stocks. stock and bond yields are positively correlated. they have been positively correlated for the better part of 20 years. when they could negatively correlated is the problem. we are not in that situation yet. we want to watch for it. interest rates rise, likely

priced to get a rise in inflation expectation. as long as that rise doesn't get too hot, and the 4% to 5% range, just moving higher is consistent with expanding margin growth. on the earnings side of the equation, you also, when you think about revenue growth, you want to look at things like retail sales, the following an implant rate, commodity prices which are up at a double-digit pace. our models suggest we should get nearly 30% earnings growth in 2021. in a bowl case, we could get 35% earnings growth, which would be extraordinary and certainly not within consensus expectation. lisa: does it matter if we get yields above 2%? gina: it is essential. if you have earnings growth to accelerate faster, it would imply a much more constructed

environment for equities. your problem is going to be if treasury yields are rising and earnings growth starts to slow. i think you alluded to this earlier this morning, talking about when we will talk about deceleration. if you get to a point in time where yields are still rising, still contending with a degree of inflation pressure, and yet the demand or topline growth starts to decelerate, that is a point of friction for the equity market we want to watch for very carefully. that is not the situation we are in yet. i don't think that is the situation we will begin until at least the second half of the year, maybe 2022. but it is certainly what we need to watch for is the next phase for the equity market, which is a very different type of trading environment than the one we are in today. jonathan: well said. gina martin adams of bloomberg intelligence, thank you. that's talk about a story of the last 20 for hours. in your equity market, a lot of attention paid to the banks. morgan stanley up by 0.2% in the premarket. credit suisse is down by about

2% after a 13.83 percent move lower yesterday. we trim another couple of percentage points off of credit suisse. tom: to bounce off the pendant, i did not get back to february levels, but it has reversed halfway back down. what is amazing here, on eu banking, particularly the swiss view, they are the compare and contrast at ubs versus credit suisse. it is stunning, the differential. not enough is made on this. credit suisse just isn't there at 0.59 percent. there's not enough discussion. everybody talks about deutsche bank and their travails. credit suisse is a train wreck. jonathan: in lisa's piece this morning, i think what she gets to the heart of is something further down the page. when you get to the former ceo, who had a stated goal of de-risking this bank, the credit

suisse at the epicenter of the saga around >> green sill and the blow up there, and once again at the epicenter around archegos. is this coincidence? some would think not. tom: it is a partition away from the people we talked about these banks who are in research and economics versus the fancy people in credit suisse time after time that seem to struggle with this. they have new management. jonathan: the allure of making money too much for some. lisa: the allure of making money at a very low interest rate time. do you take risk, especially if your interest-bearing business isn't providing the income at a time when shareholders are expecting a lot more? credit suisse perhaps on the wrong end of that bet. jonathan: it is a one-way market where you're seeing your peers getting money. gina: this is the question with nomura as well -- lisa: this is the question with no more as well. jonathan: james bevan of ccla

investment, does he like what he has seen? alongside tom keene and lisa abramowicz, i'm jonathan ferro. on the equity market, we are down 0.3%. yields higher by five basis points to 1.7563%. this is "bloomberg surveillance ." ♪

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(announcer) do planks for maximum core and total body conditioning. (woman) aerotrainer makes me want to work out. look at me. it works, 100%. (announcer) find out more at aerotrainer.com. that's aerotrainer.com. ♪ >> i think we are about four to six weeks away from this economy completely reopening and taking off. >> the vaccine alone and the covid story alone does not tell the whole story. >> we are going to billed a lot of momentum as the year goes on. there could be part of this economy, companies that are going to see demand they have not seen in decades. >> expect more bouts of extreme volatility here because that is the relief bowels -- the release valve in the marketplace. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone.