♪ >> we bounce back from the kind of down we had, you're just going to end up with inflation. >> i just don't think you can make a case for much higher rates. >> the market focus is on the destination, and the path to get there is somewhat rocky. >> i think for markets, it is 2022 inflation that is more important. >> will the fed fight inflation, contain inflation as it rises, as the cycle continues? >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: jp morgan down, goldman sachs up next. good morning. this is "bloomberg surveillance ," live on bloomberg tv and radio. alongside tom keene and lisa

abramowicz, i'm jonathan ferro. goldman sachs down by about 0.8%. jp morgan, rather, down 0.8% after crushing it on the investment bank side of things. this is from our colleague on our live blog on the bloomberg terminal. there's rarely been such a big gap between a bank's capacity to lend and its actual lending. tom: you nailed it. a low demand headline as well. again, traditional banking is a separate business from the nuances of goldman sachs or the juggernaut that is fortress dimon. nowhere in the statement do i sue a comment -- do i see a comment on spac's, coinbase, bitcoin, or the rest of it. this is a traditional statement from a very traditional bank. jonathan: expect the call on archegos later this morning. lisa: that goes to the capacity

to lend, their cash, their reserves. their incredible fortress is available, but who wants it? why borrow money if you can just use the money in your savings account? incredible dealmaking which we saw from jp morgan. jonathan: will the boom in this economy translate into a boo m for some of these earnings? goldman sachs up next, seven: 30 eastern time. jp morgan looked really good on the investment banking side of things. are we expecting the same thing from goldman? in the equity market, we advanced by almost 0.1%. yields a couple of higher on tens. euro-dollar unchanged. for jp morgan, negative one percent in premarket after a rally of more than 20% coming into this year. year-to-date, up by about 20% now, and down 0.9% on the day.

that's turn to our colleague and good friend sonali basak, bloomberg wall street correspondent. sonali: that idea of loan demand being lower is significant, especially in mortgages, where you are seeing lower demand expected by jamie dimon because of higher interest rates. they guided for the full year at about $55 billion net interest income, pretty flat relative to what they were guiding before. so where do they make money? equity underwriting was more than $1 billion. that is a lot for jp morgan. you can expect that to help that equity trading revenue, at $3.3 billion. that sets the bar high for goldman sachs, which was supposed to have, and we will hear from them pretty soon, the highest jump in equity trading revenues at expected $2.4 billion. so what i am watching for is competition. tom: we've got apple out april 28, and there's already talk sell side that they will talk

about use of cash. what are we going to hear on use of cash from dimon and his cfo today? they have to be under inordinate pressure to define what they are going to do. jonathan: on one hand, -- sonali: on one hand, the fed has already guided investors. tom: so what are we looking at for a dividend increase from a blue-chip stock? sonali: they've done more than that, but jamie dimon will say that he wants to invest in the firm. that call with media is first at 8:00, and we will ask him about what type of company he may be looking to buy. lisa: people have actually suggested perhaps they are looking at some sort of fintech, including jamie dimon himself. i know tom has been looking to talk about coinbase all morning. are we going to hear the announcement of some sort of

acquisition and more details about what they might be looking for? sonali: may be hints, and it is funny because goldman sachs and jp morgan, for as much as they have both been cautious on bitcoin, are under righties on this direct list -- our underwriters on this direct listing for coinbase. there's a funny thing inside these banks where the more they become more like fintech firms, can they still some of that valuation? there's a lot of regulatory pressures, so there are doubts about that, but that is what they are gunning for. jonathan: sonali basak there on the latest with jp morgan. that stock is -0.9%. goldman is up next in about .5 minutes -- in about 25 minutes. let's turn now to jay pelosk, -- to jay pelosky, tpw investment founder. i know you like the sector.

do you like what you are seeing so far? jay: i think the fintech area is going to be important going forward. jamie dimon spoke about it in a shareholder letter. i think lisa just nailed it as well. there's a lot of focus on this area. can banks penetrate fintech and fintech penetrate the banks? to me, you want to play the barbell between the value financial names as well as the new finance through fintech. tom: how do they participate in fintech, and particularly in bitcoin with a parabolic move in price? the price move alone has to upset any strategic thinking. jonathan: -- jay: i think it is consistent with the history of bitcoin, and if one believes that that coin is in its scarcity value which is the way i think about it, more institutional adoption means a

higher price. blackrock says you could put it into their portfolios read on and on we go. i think that is where the price is at the moment. you strike a price and expect to see higher growth and higher prices ahead, and i believe that is going to be the case with bitcoin. lisa: just to be clear, as an investor, are you saying you're more interested in buying banks if they trade crypto, if they have efforts that are trying to take advantage of the energy in this space? jay: i think it is a supporting factor. for me, it is really the play on higher interest rates which has been my view for some time. i continue to think that the 10-year will ultimately trade towards 2% as we go through 2021. that is going to be very constructive for the banks. banks are the way to play that steeper yield curve, followed second by the buyback increases,

third the opportunities and what is becoming a much more aggressive and fast-growing, at least that part of it, part of the financial seen. the question for the big banks is can they really make a difference. they are so huge that it is hard to imagine what they can do in that space to make a difference on their bottom line other than perhaps feel some of that valuation halo. lisa: we are talking about the bank of america fund managers survey and how companies want to see managers take their money and put it towards capital expenditure. are you looking for that within the banks and elsewhere? jay: i think that is likely to happen if we get the biden jobs plan, climate action and things of that nature. i think it is clear there's a lot to be done in the united states to improve its competitiveness vis-a-vis europe, china and asia, and shareholders want to see that. and i expect we will see that,

particularly given once we get through this period of recovery, these numbers we have never heard before, we are going to hear a lot of those as we go through this year. then the question becomes 2022, 2023. have we been able to take the economy and use it -- and move it to a higher growth path? if we are not, this is kind of just a go back to prior levels, and then we are back to a 2% growth path. then the capex -- then the capex story becomes less compelling. i still like europe. i still like the european banks. the story there continues to be a peeling -- continues to be appealing. there's 50% upside from current levels. can't see that in the united states. don't really see it in emerging markets. so europe financials continue to appeal to me. value is the play, whether value

sectors in the u.s. or value markets geographically in europe and japan. jonathan: y -- jay, thank you. jp morgan really crushing it on the investment banking side of things for the quarter. going forward, it is about the outlook, how they leverage this better economy in the months and quarters to come. tom: you've got to have loan demand. this is something i am really old-school on. in the media, everyone is focused on loan growth, loan supply, money supply. forget about it. do they want the loans is hugely important, and they are not. maybe that is going to change in the next 90 days. jonathan: sonali is going to be with us, breaking down these numbers. i would love to hear from you ahead of goldman sachs' numbers. sonali: i am looking for them to beat shibu morgan in equities trading. that is the number we want to balk for.

we want to watch them keep pace with fixed income trading as well because it is the name of the game. tom: what is the deal with hamptons real estate? i mean, come on. i'm serious, lisa. this is a moneymaking jumper not -- moneymaking juggernaut. what does it do in the microcosm to the new york city boom? sonali: home prices of course have gone up. tom: i'm using it as a proxy. sonali: but new york city, the taxes are an issue. goldman's cost base, then moving people away, they were able to clamp down on costs and a big way, and a lot of that is because of less litigation costs. can they keep that even lower by means of automation? tom: or go to utah or florida. sonali: exactly. jonathan: sonali basak with us through the next couple of hours. there's a lovely hotel there, tom, if you want to check it out. lisa, it is one of those

mornings, isn't it? one of those mornings where you've got to be serious, but we are struggling, aren't we? [laughter] lisa: i will say, small business lending plunged 50% in the first quarter. jonathan: thank you, lisa, for a serious point ahead of earnings later this morning. coming up, 8:00 a.m. eastern time, we will get the take of jeffrey you -- of geoffrey yu, bny mellon. this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. by the 20th anniversary of 9/11, the biden adminstration plans to withdraw u.s. troops from a kindest and. the terrorist -- from afghanistan. the terrorist attacks outed the country's taliban leadership.

now it is members of president biden's own party who are threatening to stall his agenda. 70 new york democrats in congress say -- 17 new york democrats in congress say any economy bill funded by taxes will need to address the state and local tax deduction, removed during the trump administration. it is valuable for residents in high tax states such as new york and california. the european union has unveiled its blueprint to raise nearly $1 trillion of debt over five years. it would use the money to fund its recovery from the coronavirus pandemic. almost 1/3 of the money will be in so-called green bonds, using a framework to be published this summer. china is sending a group of former officials to taiwan. a white house delegation is traveling to taipei for the 42nd anniversary of the taiwan relations act, the u.s. law governing washington's unofficial relationship with the

island. beijing says the trip will not change the fact that "taiwan is part of china." 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. ♪

♪ >> there's 30 million people who don't have access to fast

broadband. there are a workers facing poverty. -- their re central workers facing poverty. these issues are well understood by so many people outside the beltway in terms of their necessity. i am not just talking about voters, but governors and mayors, who understand this investment in infrastructure. jonathan: that was jared bernstein, house economic council member. good morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. here's the price action going into the opening bell. equity futures up two or three points. we advance not even 0.1%. in the bond market, yields up by a basis point and a bit, 1.6218%. crude with a $61 handle at $61.10. we've had the jp morgan numbers really crushing it on the investment banking side of things. loan demand and loan growth seems to be the spot that everybody wants to sit on and

discuss this morning. the stock right now is down by about 0.7%. tom: i am going to go the other way because this is not a traditional bank. if it was a super regional i would take your point on loan demand, but i agree it is germane. it is part of the story. but there are so many other good items here. jonathan: i couldn't agree more. we are talking about a decline of 0.6% of the back of a rally of 20% year to date. lisa, trading revenue topping estimates, eps and revenue topping estimates. the ceo jamie dimon sees a multi-year growth runway before him. it is just about what they do with that. lisa: there's this idea of how much cash investors have in their same you account, in their checking's accounts. the fact that businesses perhaps aren't borrowing as much now because they already borrowed so much. small business lending declined

by 50% in the first quarter versus the first quarter of 2020. are they starting up, or is it just that they have already raised so much money? jonathan: goldman sachs up at 7:30 eastern. tom: right now, i want to bring up this. i had the wrong banner. it was my fault. all the mistakes on the show are my fault. bq is a function on the bloomberg so you can do equivalent analysis, and the price-to-book of jp morgan is a lofty 1.88, and goldman sachs priced a little bit under that. i think that gives good bank to bank perspective. jonathan: do that on some of the european names, tom. [laughter] tom: i just hit deutsche bank. i can't remember. it was 0.33, but i can't remember now. it is literally a quarter of the value. jonathan: it is insane, the difference between europe and

the united states still. tom: i am so rattled by coinbase , i don't have the price-to-book memorized. jonathan: i wouldn't expect you to, tom. should we go to emily wilkins in washington? tom: emily wilkins, our government reporter. emily, after what we saw yesterday, what will you focus on this morning? maria: -- emily: there's the troop withdrawal from afghanistan. there is the report that came out last night about january 6 and the riots, and that impacts government spending. i think going back to afghanistan again, we will have to continue to watch how lawmakers are responding to this. you are seeing divisions within the democratic party. progressives are applauding bidens commitment to removing troops by september 11, but you are seeing more moderate

democrats who are little bit concerned with this timeline. lisa: the new cycle is moving so fast -- the news cycle is moving so fast that we are already moving past inflation. however, and washington, d.c., this is an increasingly political debate. how was the cpi that came in hotter than expected weighing in on the expectation in markets that inflation will remain relatively came? -- relatively tame? emily: i think a lot of times, the focus in d.c. is on exactly how big of a bill they can get through politically. remember the last time with the covid bill, right at the start they mentioned that $1.9 trillion, and it remains $1.9 trillion throughout all of those negotiations and back-and-forths. now we are hearing 2.25 trillion dollars for this upcoming infrastructure bill, and i think there is a sense that that is the target number. certainly there are enough lawmakers out there who have

priorities that can go into that number, and i think there's a sense from the biden adminstration that they don't want to back down from it. they don't want to be seen as having to be forced give less to the american people because of concerns about inflation. jonathan: two more quick points to make on inflation coming in hotter than expected yesterday. treasury yields down by five basis points on the day. think about that for a moment. this from senator rick scott yesterday, following the cpi report. "president biden and chair powell need to wake up. when you go up poor as i did, you know how much it means to a himmel he when prices go up. today's -- means to a family when prices go up. today's cpi report proves it." emily, we got to leave it there. emily wilkins of bloomberg

government. let's turn to the latest numbers out of goldman sachs. investment banking revenue coming out at $3.57 billion. trading revenue, 7.58 billion dollars against an estimate of $5.35 billion. a nice upside surprise after jp morgan. no real surprise. first quarter net revenue, $17 billion. the estimate, 12 $.55 billion. trading and sales revenue, a big number. the ceo says the business remains very well-positioned. first quarter investment banking revenue, 3.5 7 billion dollars. the estimate, $2.68 billion. i would imagine that if you had seen jp morgan, you would have changed those estimates because these numbers are pretty stellar. tom: goldman sachs, take a memo. jp morgan's earnings release is way clearer than yours. what drives me nuts about goldman sachs' earnings release

is they have eight there's of percentage -- they have a dearth of percentage change basis. those are boom economy numbers. jonathan: the stock price down around 0.4% in the premarket. we are off by a little bit. the numbers though, once again for the first quarter, they are pretty decent, aren't they? investment banking revenue, $3.57 billion. lisa: shares fluctuating. hard to know if people are taking anything from this. if you look at some of the pre-earnings analyses from analysts on wall street, they will say it really matters what the forward outlook is. everyone was excepting a boom quarter, particularly in dealmaking and trading. that will ebb throughout the rest of the year. it really does go to other businesses and prospects for earnings growth. jonathan: the stock down by about 0.8%. the numbers coming in with an upside surprise. the ceo says the business remains very well-positioned.

sonali is staying close with some of these numbers. your take? sonali: we wanted to see them really be jp morgan in the equities trading number. they have come through and done just that with $3.6 billion in equities. they've be done every major line -- they've beat on every major line investment banking. after what was coming off of a record quarter in deals, that revenue will materialize as well. they had a slight provision for loan losses they had reported. it was $70 million, i think too much to be afraid of, but compare that to the reserve releases you are seeing at jp morgan. question is how much does this stick, and terms of investment banking revenue. unlike jp morgan, goldman sachs is bigger in spac underwriting, so that equity underwriting revenue that really helped push up some of these numbers in investment banking this quarter, how sustainable is that? tom: one of the great things

here, sonali basak, is the idea that we know jp morgan and the imagery of a fortress balance sheet. goldman sachs with some challenges over the last 90 days visibly, where the phrase palace intrigue is something that has come up here. what does mr. solomon confront today in the conference call? what does he confront in terms of speaking to his employees, his management, and his shareholders? sonali: he's juggling his investors, which he has been very clear that he is putting in the forefront. so what does pay look like moving forward? when he is reporting pay annualized at r.o.e. 34%, what does that normalize to? how do they keep their cost base in line? is he moving his employees to different parts of the country? how many are staying here? he's lost a lot of people in that consumer bank, which is the growth area we are really looking to expand. what is the vision of the new team there?

but on top of that, investors want to know, mr. solomon, what are you giving me lately, now that you can return more capital to shareholders? lisa: goldman did repurchase $3.2 billion of shares this quarter. can you give us a sense of what else investors are looking at? are they expecting these types of repurchases to continue at a similar pace? sonali: i still always compare goldman sachs and morgan stanley. morgan stanley is rising a bit above and beyond goldman sachs in terms of its market value, and also i believe it is price-to-book, so you want to see that goldman sachs catch up story in regards to morgan stanley, which is also going to be integrating major businesses this year. that to me is my question. goldman is bigger and it comes to pure numbers and some of these businesses, but what does morgan stanley look like in some of these core businesses on friday? jonathan: let's go through some

of these numbers. i will do it a little more slowly this time so we can process the situs of -- the size of them. these are huge relative to expectations. investment banking revenue at $3.57 billion. the estimate was $2.68 billion. we can do it again with fic trading revenue. sonali, what did we miss in the first quarter to miss these numbers by this much? sonali: how much money trading is actually going to make you, i think is what perhaps analysts were not really understanding. there was a saying in the first three months of this year that the sweet spot for the vix for an investment banker was anywhere between 20 and 25. once you get past 25, you start to upend all of that underwriting. but beyond equities, the merger advice number strikes me because

you get paid on completed deals, which means that what they have done in the last three months, there is still more fees to come. and debt underwriting, which everyone expected to slow after the dash for cash last year's coming in much stronger than expected. what would keep that going? more m&a loans, but how fast, how strong? tom: tell me about the question that came up with jp morgan. i don't see it here. i think we do have to explain it for viewers and listeners. we are not worried about loan demand with goldman sachs, are we? that is how distinct this is. sonali: no, but interest rates still matter. have you checked your market account recently? what they can give for a high-yield savings account is not the same as you could have gotten early last year, before all of this started. with that said, they are not yet a huge consumer bank lending across all of these product lines, so when jamie dimon is saying we are worried about

these mortgage rates going up and demand for that sapping, they are not as worried about that. i think this is really important. is loan demand decreasing, or are banks just tightening their standards? we have been also simultaneously interviewing small businesses every couple of weeks, and their experience with the large banks is deny, deny, deny lately. so getting a bigger, data driven picture on that is important, i think. lisa: especially with what jp morgan said about small business lending in the first quarter. you did mention markets. consumer banking was supposed to be the stalwart of growth for a lot of these banks, including goldman sachs. is it still? sonali: it is the future. it is not the immediate future, but you look at it to lower goldman's cost of funding. there's big consumer and marketing reasons you would expect goldman to want to expand across america, but this is about finance.

the fact that goldman's cost of funding could be lower would be better in the long term. jonathan: cinelli, stay close. we would love to return to you to process these numbers. we've got to go through the bank numbers. wells fargo coming out a little bit later. then we will get the individual movers. let's talk about these numbers right now. first quarter investment banking revenue, $3.75 billion. that is a huge beat from goldman sachs. tom: and where did it come from? the answer is it came from the stimulus rescue, the pandemic, a natural disaster, a medical disaster that required action by the fed. we saw monetary and fiscal and all of that full been to the financial system for financial transactions. it is not for us to say that is good or bad, but we can observe that it has been a boom outcome for all of finance, and full disclosure, i would say for bloomberg as well. jonathan: you have to

acknowledge the execution. let's not just brush aside execution. a big part of this is execution. goldman sachs this morning, we are talking about that in a way we have not talked about credit suisse. tom: no question about it, we are looking at people that have done phenomenally. jonathan: that is going to be a conversation on the calls, that's for sure. this is the set up this morning. goldman advances about 1.3%, but we look like this on the s&p 500. equity futures advancing. in the bond market, this is key for the banks going forward, this teen year yield had its high with a closing basis. can we get that when reinvigorated? 1.63% on tens right now. foreign exchange $1.1952 on euro-dollar. in the commodity market, we advance to a 61% handle -- we advance to a $61 handle one crude.

romaine bostick joining us now. there is only one story in this equity market at the moment, and it is the banks. guy: in addition to what --romaine: in addition to what you guys are talking about with jp morgan, with goldman sachs, a lot of people are looking to these numbers to define the direction of the economy, consumer spending, and business spending and capex spending. we got a little bit of a taste out of this jp morgan numbers and goldman numbers as well. wells fargo numbers should provide a little more of an interesting story, particularly on the loan side. of course, wells fargo still dealing with loan-loss reserves that are running at a much higher rate than what we have seen for the other banks here. we are going to get those this morning. we will have to get the info later on on bloomberg markets: the close. bed, bath & beyond did report earnings here. their expectations were pretty high. they did beat on eps come about

revenue numbers came in a little bit worse them but the street was expecting. it was down about 16%. we are going to have the ceo of bed, bath & beyond on the program at 2:00 p.m., so definitely check that out to give a little more clarity specifically on the sales and some of the margin improvements prior to this quarter, and why that didn't necessarily show up in the dataset we got this morning. the other big story in the afternoon is really going to be about the coming out party for crypto. coin on your bloomberg terminal, just stare at that. tom: i've been staring at it all day. it says coin not available. is there talk here off of $250? john from coventry emails in and once to know if there's any indication now that it says price not available. romaine: trading is actually going on now on those private

equity markets. we will see what happens when we come in here on the nasdaq. tom: lisa, hold jon's hand. lisa: for this. -- for this? romaine: it is going to be volatile. one last thing i will leave you with, the coinbase thing we joke about, but really this is the coming out party for a lot of people who really believed in something, and they basically willed something into existence. whether that is a good thing or a bad thing, i will let others decide. you mentioned credit suisse a little earlier. two big block trades come in last night on discovery and ig. the fact that credit suisse is still unloading shares is kind of concerning here. it is not clear if that seal is actually factored into the loss estimates they gave last week.

the fact is this is still going on. jonathan: good to catch up, sir. jon from coventry, that mommy was getting spent in the pub, not in this market. [laughter] i can tell you that. i wish i had done something different with that money, but we went somewhere else and i didn't. tom: we should make clear as we make jokes about this that all of us are precluded from idiocy within the market. i mean, jon did get 8000 shares of uber, but that didn't work out. jonathan: my first trade going back a long time was the ticker fero. i lost a lot of money doing so, too. tom: the first thing i lost money on was a call option on westinghouse. it went down in flames on that. jonathan: that's how you learn, isn't it? tom: you have to lose money to learn. jonathan: you've got to engage the market.

lisa: how about those japanese banks, tom? tom: i avoided that for the most part, i must admit. but there is a well-earned tale of losses along the way. jordan rochester joins us now with nomura, their g10 fx strategist. it is nice to talk to you, to get away from the bank frenzy with wells fargo coming up. i want to go to the general statement of what does a dollar or what does an exorbitant village due within a boom economy? we've never witnessed this before. how will the dollar reacts to a boom locomotive economy? jordan: in terms of the u.s. fiscal deficit going towards 19% of gdp, and most countries, if you told me that, look at turkey for example, a deficit of that size usually is the currency weakness. the u.s. has the benefit of being the world's reserve currency. so those excess dollars are not

leading to excess weakness, at least in this past quarter. the main reason is because we have had growth expectation in the u.s. rise significantly. that has spread through to higher u.s. yields, higher number wields. what is interesting now is as we are now in q2, the problems of q1, the eu vaccine rollout was very slow. we are now seeing germany vaccinate its population at the same rate as the u.k. now the tables are turning in terms of that vaccine narrative. we can't discount that. but that sort of pessimism about reopening has changed in q2. we are doing pretty well given the size of the fiscal deficit. in the short-term, growth matters, and that is why that's happened. the long-term, you can have deficits that wide and not expect currency weakness.

in just a few moments we will be seeing dollar weakness again. jonathan: do you want to play this through euro-dollar or elsewhere through euro sterling? jordan: i have been playing it in long table, sterling against the dollar. i had been short as well. but right now, euro-dollar looks like a good opportunity. ahead of a bounce, but right now in a decent range now. yesterday's inflation in the u.s., very interesting signal from the market. we had a bigger number than expected. you would assume usually that would lead to some sort of dollar strength or higher yield. we got the opposite. why is that? the market overly priced for that inflation risk in the near term. we are still going to have higher inflation to come, but just in the near term, the bar has been set high for u.s. data. the story has been well played out. so going forward, i like euro-dollar here. i think euro-dollar is a good

trade. lisa: when do crypto assets become an alternative to the dollar for you? jordan: a true alternative is when you can use them for payments. it is very deflationary as well. it is an asset class rather than a currency right now. it is exciting because it is moving up. we have all lost money as well when it goes down. for the time being, it is definitely not a direct replacement, but we could have something different. we could have a diligent -- a digital dollar. those things which are for five years away we, will be talking about until then. tom: jordan rochester has the saxophone, it looks like a yamaha alto sax. [laughter] jordan: it's a selmer. tom: a selmer, ok. jonathan: charlie parker. tom: i think we need a concert. jonathan: they are about to happen now. those are the rules of

engagement on this show. [laughter] jordan: not happening. jonathan: jordan, it's good to catch up. tom: jordan rochester, thank you. jonathan: let me just bring you a headline out of europe right now. pfizer to boost the second-quarter vaccines applied to the eu by 25% to 250 million doses. that headline just crossing the bloomberg right now. pfizer to boost 2q vaccines applied to the eu to 250 million doses. some better news out of europe on the vaccine front over the past couple of days. tom: deutsche bank really reaffirms the stronger euro call in the last few hours, and j polasky -- and hay -- and jay pelosky said the same thing. jonathan: we will touch on this pandemic with dr. jonathan quick of the rockefeller foundation. from york city this morning, good morning -- from new york

city this morning, good morning. this is bloomberg. ritika: warren buffett, amazon, and blackrock are uniting to sign onto to a letter denouncing what they called any discriminatory legislation making it harder for people to vote. republicans have been trying to enact new election laws in almost every state. egypt has seized the giant container ship that blocked the suez canal last month. authorities are seeking more than $900 billion in cooperation -- then $900 million in compensation. credit suisse has sold about $200 billion of stocks tied to the implosion after archegos capital management. thanks from new york to zurich have been unwinding leveraged equity bets and became the

center of one of the biggest margin calls of all time. it will cost credit suisse and other banks about $1 billion in losses. 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. ♪

jonathan: from new york city for our audience worldwide, this is "bloomberg surveillance."

jp morgan is a little bit lower. goldman is absolutely flying. here's the story from wells fargo, down by a little more than 1%. eps coming in at one -- at $1.05. first quarter net interest income, the important number, $8.8 billion. the estimate, $9.08 billion, so that is a downside surprise. first quarter including a 1.6 billion dollars decrease in credit losses. allowance, the results reflecting a improving u.s. economy, according to the ceo. loans coming at $873.4 billion. the charge-offs, according to wells fargo, are at historic lows. so once again, you hear this again from wells fargo this time, not jp morgan. you hear it from the both.

low interest rates, the headwind for this bank. it is in an economy that is set to boom. tom: i wonder whether you lump wells fargo in with the other banks as well. the chasm there has never been wider. goldman sachs a different bank, one point 33. wells fargo is supposed to be equivalent, halfway down to a european bank. jonathan: destocked down by 1.5%, and the headline a familiar feel from the ceo, just like the jp morgan ceo mr. dimon. loan demand the headwind. lisa: there's a headline here that is credit quality improves, credit charge-offs are at historic lows, they are having trouble lending. it is because of this idea of tightening standards on archegos and other issues, particularly

with wells fargo? or is this an issue of demand? who wants a loan if you have so much cash on hand that you haven't been able to go out and spend? jonathan: it is clear that investment banking is really terrific at jp morgan, and we have to talk about execution at goldman. these numbers are pretty stellar across the board, but the outlook is where the suffering is come around things like loan demand. you are not getting that encouraging happy talk around that theme going into the rest of this year. wells down by about 2%. jp morgan off the back of a big gain this year, down a little bit in the premarket. goldman doing nicely, up by around 1.5% now. let's bring in sonali bassett our wall street correspondent here at bloomberg. we talked about -- sonali basak now come our wall street correspondent here at bloomberg. sonali: you can control costs.

the 77% ratio here on costs compared to 53% at goldman sachs. so if you want to do any back to bank comparison, back to loans, but they are making on these loans, the average loan yield is 3.3%. it was about 4.2% last year at the same time. so they are just making less money from the loans that they are extending. it is a tough balance if you are pressured on the top line and on the bottom line. tom: this is really important. i commend you for going to efficiency ratio. that is the widest cap i have seen, and it comes down to 268,531 people. this is not the wells fargo of old. we have seen it at their branches in manhattan and anecdotally across this nation. i presumed with that efficiency ratio, they will have to cost rationalize their employment force like we have never seen

before. sonali: i don't know where else you cut it, real estate? every month or so, we get another report from s&p on the bank closures, and was fargo is usually quite high on that mark. back to what me and lisa were talking about, about how do you lend especially to communities that are more in need of it, if you don't even have a footprint there? a lot of times the bank branches still matter, and it becomes a problem when you are closing at that rate and also having to keep an eye on those real estate costs. lisa: one thing we haven't talked about his competition, not just from other banks, but also the shadow banking industry. you've got direct lenders, asset management firms increasingly acting like next. how much is that a factor in the weak loan demand we are hearing about? sonali: it is a really interesting question because a lot of those shadow banks don't

serve low to moderate income communities, and they don't serve small businesses. they serve the larger end of the medium-sized's nest. that is a place where the most business opportunity would be. you can expect those folks to make it past the pandemic. we are still in an area where small businesses are still struggling, struggling with health care costs. they need loans. they are still going through the paycheck protection program, so there's a big disparity between what we are seeing with big business and small business, and those biggest pains are going to be among the wells fargos, potentially the bank of americas , and the regional banks to another degree. jonathan: the numbers are down. they are behind us. we will talk about the called and just a moment. i want to talk about the price action right now and the split between goldman and the rest. intraday premarket, stuck by about 1.6%. we are lower, off by 0.75% on

wells, on jp morgan. context and perspective, coming into today your to date, jp morgan up more than 20%. wells fargo up by 31.84%. these are banks that cut a huge bid into q2. tom: thank you jerome powell, and to the congress who disposed of record stimulus as well. but it is three different stories. to petition the banking system, no one does it better than our alison williams, bloomberg senior analyst for global fortresses, as mr. dimon calls jp morgan. today i am not going to go to jp morgan or goldman sachs. i'm going to go to the future of wells fargo. are they honestly comparable to the major banks anymore, or have they de-majored -- have they de-majored in their crises of the last year?

alison: they have always been more comparable than someone like goldman sachs, and obviously they have had unique issues dating back to 2016. some risk management issues, and i think they are finally coming out from under that. of course, the question is is there permanent damage done. i would say they did miss out on some opportunities over the past year, especially with regard to deposit growth, but they still had some very strong businesses. the core that we are seeing today, and you pointed out the stock reaction, that interest income continues to struggle. we really need loan demand and the second half, so i think people weren't expecting a big pickup, but we do want to see some steadying, and we are continuing to still see downside. the one negative and the numbers , a slight miss on interest

income at this banks. jonathan: i would love for you to continue this conversation in just a moment. goldman better-than-expected. jp morgan in many ways better-than-expected as well. we will talk about that next. from new york city this morning, good morning. on radio come on tv, with futures positive -- on radio, on tv, with futures positive, this is "bloomberg surveillance." ♪

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♪ >> there's a high bar to meet for earnings, but i think there's some decent potential for some pockets of outperformance. > i think the dividend buybacks story is going to be important for the banks going forward. >> after the shutdown we had, we were just going to end up with readings of inflation. >> i think for markets, it is 2022 inflation that is more important. >> everything would follow would suggest every bit of inflation is being passed through, and then some. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning,