♪ >> to have the long-term structural forces -- we still have the long-term structural forces that weigh against growth. >> markets are so overbought that i think we are approaching that stall speed for a while. >> the market is going to have to navigate this transition from incredible monetary accommodation to thinking about what removing some of that accommodation is ultimately going to look like. >> absolutely, there are some tough decisions ahead. >> 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 bloomberg tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. equity futures slightly positive. we had towards a week of losses and a tax proposal potentially

shaking things up downing d.c. -- shaking things up down in d.c. tom: i guess it is going to be some capital gains as well. we've got an incredibly porton interview coming up with liz ann sonders -- an incredibly important interview coming up with liz ann sonders. here's what i think on a friday. we are beginning to see the earnings season, and we will see major reports from equity strategists today through the weekend i didn't to monday. you will hear from all of them. jonathan: mike wilson of morgan stanley focused on execution. we seen that from procter & gamble, whirlpool, kimberly-clark, coca-cola, all talking about passing on higher costs. tom: i know you are riveted by this. i get emotional as well, ken's

60th birthday over at mattel. jonathan: happy birthday ken. who thought this is where we would be, talking about a 60th birthday for ken with tom keene? lisa: i'm just going to hope that's transitory. jonathan: it's not. it's permanent. [laughter] tom: in honor of the astronauts, tang today. lisa: i will say this, just talking about earnings. there's been a really interesting development, in my opinion. you have seen really good earnings on average. some misses, but honestly, for the most part it's been great, and the response in markets has been meh, what have you got for us next time. that's been fascinating. what is driving the market action we have seen recently? but is frankly, the data has justified what we have seen. jonathan: i agree, it is

captured by the bond market. your bond market on tens, 1.5454%. this is the third week of gains for treasuries. the third week of yields moving lower over the week. euro-dollar, $1.2053, up about 0.3%. equity futures, 4136 on the s&p. we are up 9, 0 .2%. lisa: i could try to make this less serious and talk about ken's birthday for the next 30 seconds, but instead, we are getting ego manufacturing and services pmi. you saw a resurgence in services despite all the bad headlines about the spread of the virus there. still, people are getting hired as waiters, as people serving and doing. meanwhile, manufacturing accelerated at a record pace. at 10:30 a.m., bloomberg is

hosting a summit on climate. janet yellen, christine lagarde, and a number of others, including mark carney, are speaking about climate and capital markets' role in combating some of the emissions we have seen. and today, the fda meeting about the j&j vaccine. -- the cdc is meeting about the j&j vaccine. we are in desperate need of a need to curb the spread of the virus. jonathan: lisa, thank you. here's the news. the news is that the president of the united states is expected to propose exactly what he promised he would propose, an almost doubling of the capital gains tax rate. liz ann sonders joins us,

charles schwab chief investment strategist. just your reaction to the news of the last 24 hours that we were talking about for much of yesterday afternoon into this morning. liz ann: what is interesting is how many headlines i read or saw or heard that said biden will be raising the capital gains tax. that is obviously not how legislation works. it is the proposal. that has been telegraphed clearly. obviously a bit of a shock in terms of market reaction, but it is a trial balloon. you tend to get water down as you go through the sauce is making in washington, and there are some democrats not in favor of -- as you go through the process of sausage making in washington, and there are some democrats not in favor of higher taxes. what you get is probably

different from what sits in the proposal. it is just a mixed bag. it really hasn't had a significant impact on the market , capital gains tax changes in either direction. there's not a lot of indication that it causes serious damage in and of itself to the market, but we will have to see. tom: a lot of listeners and viewers don't know that you have a real interest in public policy, including your service to various administrations on fiscal policy. let me give you a william gale question over at brookings. if we raise the capital gains tax, is it possible we will bring in less revenue? liz ann: that is the theory out there, some of the math that has been done. of course, it is biased bending on if you are part of an institute that is more on the right-leaning or left-leaning side. but there were some data out yesterday on the assumption, if it goes all the way up to the 43% and change, that that would be a revenue loser. that there is some point on the

scale that maximizes the revenue, and if the goal is to increase revenue, you should focus on whatever that percentage is. if it is an e gala terry and goal, that is a whole -- an it terry and -- an egalitarian goal, that as a whole different set of facts. lisa: people are trying to solidify these gains ahead of capital gains taxes. do you think that kind of selling has legs, or do using it was a knee-jerk reaction and that it has buying opportunity? liz ann: not so much a buying opportunity. it was a knee-jerk reaction, but that does not mean all of the selling is done. i think sentiment has been so frothy and so stretched, and we have talked about this before on this program. in and of itself, it does not affect the economy we had really

frothy sentiment in january and february, and then we got the mother of all catalysts with covid. to your point, i think it does put downward pressure on where momentum is greatest, where gains are most lofty, and you do see that in history. you see a bit of a weight on some of the higher value to stocks, and any selling that occurs in anticipation of that tends to be focused in stocks that have the biggest gains. jonathan: putting asidejonathan: -- lisa: putting aside the capital gains taxes, we have earnings that have eight on average. they've been pretty good. what is the market looking for fundamentally? it is perhaps getting a bit of a hit from this proposal, which is not necessarily going to get past as it is. what does that tell you about what is driving the market right now? liz ann: here's the funny history about earnings and stock

market performance. we know they are connected, but there's more of a lead-lag situation that i think people generally understand. if you go back to the entire history of the s&p 500 and break earnings into various zones, the worst market performance has come when earnings are in total plunge mode, down more than 25%. but once the market starts to price in the inflection point backup, the best performance comes when earnings are still down between -25% and -10%. it is the acceleration off the lows that gives you the huge pop in the stock market in anticipation of improvement. by the time you get to more than 20% earnings growth, you are down into the very low single to to return territory because at that point, the market has priced in the surge. so i think a lot of that is what you are seeing. you are seeing a market that over the past year, has done extra nearly well, in part pricing and the earnings growth we are now experiencing. tom: what is your spx level out

12 months? liz ann: you know i don't do that. [laughter] i like getting the question. tom: come on, it's friday. liz ann: it's of no value to individual investors. i don't know where the markets will close today at 4:00, let alone december 31. i just don't see the value of that exercise. [laughter] jonathan: forgive him. i've done this routine for years and he is still asking that question. liz ann sonders, charles schwab chief investment strategist. tom, i'll bail you out. we got some news from the ecb. the ecb policy makers expecting a difficult discussion at the next meeting on monetary policy in june on whether to start slowing their emergency bond buying program. this according to officials familiar with the internal deliberations. it is going to get messy over at the ecb, the hawks versus the

doves. that is the difference between the ecb and the fed right now, right? at the fed, it is about how dovish are you, the scale of dovishness. at the ecb, there are still hawks that want to whine this down. tom: we had our in-depth analysis of these new celeste -- of the snooze fest, and christine lagarde said we are not the fed. you saw the headline. simple as that. lisa: that means there's a credibility issue, especially with a lack of cohesiveness. christine lagarde comes out singing from a very dovish hymn book, and people aren't buying it. i wonder how much that will undermine her ability to message to this market. jonathan: talks on june 10 will be much more complicated. officials saying they could be heated. tom: you mean ecb or "surveillance?" jonathan: both, given the last couple of minutes. tom: i would call this a

"surveillance" snooze fest. jonathan: keep selling it. the "bloomberg surveillance" snooze fest. jim paulsen coming up later. he can't wait to join. [laughter] on radio, on tv. it's friday. this is bloomberg. ♪ karina: with the first word news, i'm karina mitchell. president biden is proposing a capital gains tax almost twice as high as it is now. those earning $1 million or more could pay as much as 43.4%. the president wants the increase to help pay for a raft of social spending to address inequality. russia is withdrawing thousands of troops from the ukraine border today. western leaders had called on

moscow to pull troops back. there were fears conflict could lead to new economic sanctions. panasonic has agreed to buy american artificial intelligence software developer blue yonder for $7.1 billion. panasonic will fund the deal through cash and a bridge loan. the company also has a 20% stake in blue yonder, which uses ai to predict product demand. daimler predicts research and vehicle demand in the midst of the pandemic. the world's biggest auto street -- biggest automaker suggests an historically strong showing. spacex shuttle lifted off from florida today, the first trip made with previously flown equipment. it will dock with the orbiting lab early tomorrow. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700

journalists and analysts in more than 120 countries. i'm karina mitchell. this is bloomberg. ♪

>> when you have stimuli of this size around the world,

definitely taxes are coming down the line. >> that wouldn't be good for the u.s. economy. >> a little surprised by the market selloff. it is certainly not from a high enough rate to derail the recovery. >> if a 1% fall in stock prices is all you get from a major increase in capital gains taxes, that is not a problem. >> this is a starting point, and i'm sure there's going to be a lot more debate on the conversation. jonathan: some of the reaction to president biden's potential tax plan proposal. from new york city this morning, good morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. here's the price action. it is a proposal. liz ann sonders reemphasizing it is a proposal. this is a starting point. 4130 six on the s&p 500. up a little more than eight points, 0.2% on the s&p 500. yields higher to 1.5525%.

bank of america saying follow the easter bunny. easter disruptions to retail spending. don't get distracted, lisa. lisa: after ken, the easter bunny? what do you expect? jonathan: an increase for the seven days ending april 17, fading as we work our way through the disruption of easter and those checks sent out, too. go to cash on 11.5% spending, tom. tom: i'm going to go to earnings and predict we see a real readjustment in equity strategy in the next three to four days. right now, emily wilkins to translate for us, bloomberg's capital gains tax reporter. to me, the most important person to watch is the gentleman from western massachusetts' first congressional district, richard neal. he is ways, he is means.

he's got 42 members of house ways and means. what is the power of richard neal on this tax debate? emily: richard neal is an incredibly powerful person for the next several months, and it is going to be up to him to make sure house democrats are kept in line as they try to translate what president biden is proposing into a tax bill into actual detailed legislation. we talk about the senate all the time and how difficult it is to get things through the senate, don't forget about the house. the house has very thin margins. you've already seen a number of democrats come out against the salt cap. we are watching the reaction to the new capital gains tax. some moderates are very gun shy about this. tom: kevin brady of texas, the minority leader, is going to go to richard neal and say, how many millions do you want to go to the cayman islands or the

other cayman islands out there, right? emily: to a certain extent, you mentioned kevin brady, the top republican on ways and means, but how much do republicans actually matter in this debate? they've already been very clear they don't want to see a change in taxes from what they put forward in 2017. at this point, the question isn't so much can we get republicans on board. the question is can democrats actually stay together on this proposal, and that includes the very progressive democrats and the very moderate democrats. jonathan: the president has shown little interest in a united congress. he talked about uniting the country. how do these proposals play up with the country, with the electorate in polling? emily: raising taxes plays out into different ways. you do see -- in two different ways. you do see concern. the idea of raising taxes has long not been politically popular, so the goal for president biden is to talk about

the message is raising taxes on the wealthy. i think that has a much different perception and opinion with the american public. it is something president biden has stressed. the most recent capital gains proposal would only impact those making $1 million or more. that is not the average american out there. lisa: a bigger proportion of these americans are actually democratic. it has been skewing that way over time, which is interesting. the republican party has skewed more populous after trump's era. how does this play among bidens supporters, and for a significant portion, at least when it comes to the money behind it, of the democratic party? kevin: that is an excellent --emily: that is an excellent question. you have seen various reactions. you have definitely seen some leaders of companies who have said we need to pay our fair

share. this is something we are willing to do. you've also heard concerns from other individuals saying this is going to kill jobs in the united states, going to kill things like silicon valley. so there doesn't seem to be concern out there. i think a lot of it is going to come down to messaging and who the biden adminstration decides they want their electorate to be. tom: i know you saw senator schumer at ben's chili bowl last night. what is the senator going to do? his constituency, his heritage with wall street, what is charles schumer going to do? emily: the thing is, president biden is going to put forward this plan, but then that plan is going to congress, and at the end of the day, congress controls the checkbook. tom: really? i didn't know that. emily: i mean, it's true. lisa: just keep going, emily. emily: congress has an immense amount of power at this point, so i think you are going to see chuck schumer talking with his conference. these going to have to make sure that everyone is on board, and

that includes joe manchin. tom: this is so, so important in this day of modern social media, axios, politico, and all the rest of it. it is about congress, not the easy back and forth of social media of the executive branch. jonathan: i just couldn't hear emily at the end because someone kept stamping all over her. tom: no, she's absolutely dead on. [laughter] it's about old fogies at the house ways and means committee going, really? jonathan: usually, you ask a question and let the other person talk. tom: no, it's my new strategy. jonathan: it's new? ok. [laughter] emily, thank you so much, bloomberg government reporter down in washington, d.c. the japanese prime minister speaking right now. he will make an overall decision on when to lift the state of emergency in tokyo, which was implement it in the last 24 hours. implementing policies to stage a safe olympics, inside 100 days away. things are getting dicey in japan.

tom: they are getting dicey, and you see it with singapore. i think you mentioned that yesterday, how singapore shut down flights to india. i don't want to equate what is going on in japan to the horrific tone in india and brazil, but we go into this weekend, and where's the rest of europe? i was sort of shocked where my math on france was. jonathan: improving slowly on the vaccination front, that's for sure. the doxies prime minister concerned the virus surge could spread across the whole country -- the japanese prime minister concerned with virus surge that could spread across the whole country. lisa: this is 1000 cases were so that have been diagnosed, and trying to prevent some of the humanitarian crises, prevent the transmission from increasing dramatically. in india, and brazil, we are talking about variants, talking about mass deaths, talking about suffering on a scale that is shocking and very distressing. jonathan: very different levels

of tolerance over this whole pandemic through the last several months. this is "bloomberg surveillance ." priya misra of td securities will be joining us shortly. equities up eight points on the s&p, 0.2%. on radio, on tv, this is "bloomberg surveillance." ♪

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jonathan: the weekly run of gains is about to end. we are headed for a week of losses on the s&p 500. up about nine points on the s&p 500, 0.2%. the russell up about 16 points, about 0.7%. get to the bond market. want to look at treasuries, want to look at bunds. want to talk about the data on either side of the atlantic. better in america. yields have been heading lower for another week. we are down around three basis points on the week on the 10 year to about 1.55%. bunds are stable at about -26 basis points. lisa pointed out the upside surprise on the pmi's out of europe. so far, yield action has been pretty muted off the back of

that data. what is that look like in the next couple of months if the vaccine progress continues and the data start to pick up as well? switch up the board. investors are still apprehensive. that's the view coming from stephen gallo of bmo. euro swiss just over the last couple of months has been flattening out, stalling, in line with what we have seen elsewhere with treasuries. we had that big lift off of s wiss weakness. then we started to stall. the idea, as you know, if investors are less apprehensive, the swissie should be we getting more. right now we are not seeing that. tom: i'm glad you bring up euro swiss. we haven't talked about it a while -- talked about it in a while. it goes to the miscalculations of the end of the year, and all of the certitude we had in equities and certitude in bonds.

we are all rewriting the script in this weekend -- script into this weekend. jonathan: i did that so we could reminisce about the times we used to talk about euro swiss in zurich. get a train from davos to zurich. i've got a great video of you in a bar that i am still tempted to put out on twitter. tom: i can't believe my indicator is what an hermes tie costs there. unbelievable. jonathan: i found him in the middle of zurich just looking around the outside of our galleries, disappearing into windows, strolling around, and it was freezing. [laughter] tom: but lisa, what he's going to say is i'm on the phone doing math homework back in america. [laughter] jonathan: to be fair to you, that is not untrue. tom: it's like, i'm sorry. jonathan: after that, there was

another bar, after we did the homework. romaine bostick, get tom out of trouble. romaine: i want to hear the end of that story at some point. tom: oh, with a bowtie today for radio. romaine: i'm wearing the tom keene memorial bowtie. lisa: memorial? [laughter] romaine: we are getting american express. they did miss on revenues, though they did beat on the bottom line. that was largely because of a pull forward of some of those loss reserves they set aside previously, about $1 billion there. the story today really about the chip sector. we get to intel earnings. those shares moving lower in the premarket by about 2%. it is really all about that datacenter business. year-over-year revenue dropped about 20%. it is like a castle out there really getting but parted on all sides. you've got taiwan semi, nvidia, amd all chipping away at intel's business. they continue to lose share.

give them a little bit of time to try to turn the ship around. tom: what else do you have? romaine: skyworks solutions, huge apple supplier. about 70% of their revenue comes from apple. investors say they were too tied to apple, they needed to diversify. this gets them there, a lot of ai stuff that will go into cars, smart refrigerators. snap, digital ad spending is alive and well. revenues going up, and that is why you see the shares up. pinterest, twitter, a lot of the other digital ad space companies also moving higher. and of course, the granddaddy's next week, facebook. tom: we've got a huge earnings stream. what have you learned about earnings season now?

i would suggest equity strategists have to reset this weekend after what we saw. even intel kind of ok, and other names like mattel that were really good. romaine: really good, but you are dealing with a pull forward from the pandemic, a much different competitive environment for a lot of these companies, not just in the chip space. on top of that, you are dealing with this cost issue. we had the ceo yesterday of both dow and chipotle, both dealing with rising costs. what they forecast on that is going to be key. tom: into the weekend, "the close" this afternoon will be interesting. right now on the fixed income space, i want you to bring in priya misra of td securities. we are at a surprising point this late april. jonathan: a really difficult point that people are struggling to read. priya, the data is better, yields are lower, and everyone is trying to make sense of it.

priya: right. that has been the biggest question, the move over. if we decompose the decline in rates, i think the market is finally heard the fed, that the fed is going to be extremely patient, that they are going to see actual data, not just forecasted data, so therefore, with the fed controlling be front end, not even talking about tapering, i think that limits how much rates can rise. but when we look ahead, there's lots of supply. we have options next week. data is going to continue to look better. we do think rates are going to continue to move higher. jonathan: so you don't think we have tested the tolerance of this market, this economy, at 1.75%, 1.77%? priya: real rates were not that high. much of it was in inflation expectations. fed is looking at broader

financial conditions. broader financial conditions are still extremely easy. i would look at real rates closer to zero on the 10 year. that is the level where the economy shows signs of stress and financial conditions start to tighten. that is when the fed will step in, but we are pretty far from there. lisa: can 10-year treasury yield's rise to that level by year end if we don't get a commensurate move of any sort in europe, and japan? can the u.s. go it alone with u.s. rates increasing on the long end without a similar move elsewhere? priya: great point. i think global rates do provide sort of a soft ceiling on the 10 year, but how wide cannot spread go? we do expect bunds to selloff a little bit, but treasuries to really underperform. but there's a limit. european investors will find better yields than treasuries, so it is important to look at global rates. we are a little heartened by the fact that the pmi data has come

in a little better. the pace of vaccinations has picked up. so expecting some lift and those european rates for the course of the year will allow treasuries to continue to rise. jonathan: -- lisa: we have seen pensions rebalancing into treasuries. you've had buying not only from overseas, but also internally in the u.s. to try to capture these yields to lock them men ahead of what some people thing is going to be turbulence in risk assets. how much does that buying suppress yields to act as a cap, at least in the near term, to how high rates could go? priya: we have seen treasuries stripping data coming up. so i think it is in isolation that that would have potentially put it cap to how steep the curve could get, but the u.s. treasury is issuing twenty-year, 30 year, 10 year. we don't think they are going to start to come back -- start to cut back on any of that. so i think the engine buying

helps. but i don't think it is enough to offset all of the treasury supply that the market will have to take down over the next few months. tom: we've been wrong so far on a big move in inflation, a big move in rates. what will be the catalyst to finally get rates moved? is it something about economic data or more about the financial system? priya: i think it is about sustainability. the keyword is how transitory is this. what the market is trying to grapple with is we know that economic data is great. this is all reopening, fiscal stimulus. how much does behavior change? we are all becoming behavioral scientists. do we all start using up pent-up savings? is that reopening related pickup and growth, does that translate into a sustained increase in demand and in inflation? that is what the fed is watching for as well.

we are a little skeptical that you would get this massive pickup in catch-up services spending over the next year. if you didn't take a vacation last year, do you take four vacations this year? unlikely. so we still have a bit of a muted growth. jonathan: i think someone in the keene household is trying to get four vacations this year. priya misra, great to catch up. priya's final point i think was really important. bank of america's jared woodward also making that point. the degree to which the savings rate will come down that we have accumulated through much of last year, how much they will be paired lower, there's real debate about that in this country. lisa: based on the fact that people put a lot of that money into savings, and perhaps some of it will go to deferred mortgage payments, deferred rents. that said, there is so much cash out there. if you take a look at the

excess cash on balance sheets globally, some people peg it at $5.4 trillion. jonathan: wasn't it chairman powell that said you can only have one dinner, you can't go out for two dinners? something like that. you can't have three vacations, tom. lisa: i beg to differ. tom: i have 47 days left for the year. lisa: what you going to do with it? tom: i think october looks good. [laughter] jonathan: i think we both know who decides in your household where you're going next. coming up, pierre ferragu, new street research head of tech infrastructure. we need to talk about the chips and where that goes next. yields higher in the fx market. euro-dollar, one dollar -- euro-dollar, $1.2060.

crude approaching a $62 handle at $61.75. we are down on the week, up on the session. the s&p up by 0.2%. heard on radio, seen on tv, from a beautiful new york city, this is bloomberg. karina: with the first word news, i'm karina mitchell. wealthy americans may want to brace themselves. president biden wants to almost double the capital gains tax for those making $1 million or more. when you add existing surtax on investment gains, the new top rate could be as high as 43.4%. the proposal could reverse a long-standing provision of the tax code. the proposed tax height is blamed in part for dropping down bitcoin for the seventh time in eight days. the world's largest digital

currency dropped below the $50,000 benchmark. bitcoin said its record of almost $65,000 on april 14. u.s. vaccine experts meet later today to review johnson & johnson's covid-19 shot. it has been on hold for 10 days after several cases of rare and serious blood clots. the panel of experts advises the cdc. the panel will debate whether shots should resume in the u.s. japan is set to begin a state of emergency sunday in tokyo, osaka, and three other prefectures. coronavirus infections hit daily records this month in osaka. deutsche bank will allow its u.s. interns to decide if they want to work from home or be in the office this summer. they will be able to choose whether they participate in the program purely virtually or come into the office three days a week. deutsche bank says they will get the same quality of training

whichever method they select. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm karina mitchell. this is bloomberg. ♪

>> covid caused everybody to step back from capacity and buildout in the supply chain of

the industry, and it produced a radical increase in demand, so you have supply chains scaling back a bit, demand scaling up radically. now we are in a position that there is a meaningful shortage, and it's going to be a couple of years until that's fully resolved. jonathan: wow is the right word. that is the intel ceo on the situation with chip supply worldwide. from new york city, alongside tom keene and lisa abramowicz, i'm jonathan ferro. here's your equity market, shaping up as follows. up seven on the s&p, 0.2%. on the 10 year, yields higher to 1.5 470%. euro-dollar positive on the day, $1.2061. crude, $61.69, up about 0.4%. tom: we like to speak to true experts out there. you need to get authoritative at

some point. we can do that with pierre ferragu. he's at new street research. what that does not describe his his legendary work at sanford bernstein, where he was definitive in writing black books on the silicon wafer industry. mr. ferragu joins us this morning. why is there a shortage of chips? pierre: that is a combination of a lot of factors. i think it was explained well yesterday. we are in that kind of place where demand of chips is actually accelerating. there is an inflection point driven by artificial intelligence, and we now have use cases where the more resources, the more chips, the more processing power you throw at services and problems, the better outcome you get. this has been accelerated by

covid-19. we are way more digitalized today than we were a year ago. so covid-19 accelerated demand. at the same time, covid-19 broke down supply chains. the auto industry less summer, everyone would agree that it would take years for the auto industry to get back to the level of demand pre-covid. what happened, that demand came back in a matter of months, if not a matter of weeks, and that put people -- that caught people on the wrong foot by surprise. they should have doubled orders to meet the effective covid-19. tom: the elasticity here of the market between supply and demand, the worry has always been about wafer size. we are never going to be able to make enough silicon wafer's for global silicon valley. is the microeconomics of your world in good shape right now,

or is it broken? pierre: in our world, it is an extremely good shape. you never want something more than a situation where demand is growing, supply is running behind, and the ceo of the largest companies in the industry explains the situation is not going to get better, is not going to get fully resolved for a couple of years. so we are in a world in which capital inflow is massive. everyone is increasing capex. on top of that, i think they are going to increase their capex as well. the leaders of these companies, there's no quick fix. so that is an extremely strong backdrop. we are very well-positioned and the cycle for that. lisa: there's been a lot of talk

, whether it is intel investment in the united states, china investing heavily in this. is this enough to move the center of gravity when it comes to chip production away from taiwan? pierre: that is an excellent question. i hope the industry takes this opportunity to make that happen, to get a competitive one up and running in the u.s. as well, and most important, if intel is successful in their strategy shift, they will offer plans to integrate their ip into foundry and maybe -- [indiscernible] -- as the place where you can have leading chip manufacturers.

the entry ticket is $20 billion. it is three years. it is monster investment. the proof of concept has been made. we need to get intel into the industry in a sustainable and competitive way. this is going to be tough. it is a very significant investment. it is going to take a long time. so i think the silver of this environment is that that makes the environment very supportive. it encourages the u.s. government and may be other environments to be supportive of the move. what is very interesting is that some of the potential clients mitigate their exposure to the geopolitical risk in china. lisa: intel does have this

problem where they are direct competitors of the company they are hoping to -- the companies they are hoping to make chips for at their foundry. are there any other companies that could potentially provide some competitive feel based on their standing and their capital? pierre: the simple answer is probably no. you have global foundries, but these are players that -- a few years back. and people who manufacture at the leading edge, there is samsung, who is trying to develop an alternative. it is challenging for them. then you have intel, who is doing that. outside of that curve, you don't really have people who could

easily step in at the leading edge. jonathan: pierre, we've got to leave it there. next time we've got to talk about tesla, too. need to bring you some headlines as well. the first of that headline coming out of russia. the russian opposition leader alexi navalny ending his hunger strike. the latest out of russia, some tension over that issue the last couple of weeks. in europe, ursula von der leyen and condor lion -- ursula von der leyen confident we can vaccinate 70 million -- vaccinate 70% by january. it's got to happen quickly, and that is the target. alongside tom keene and lisa abramowicz, i'm jonathan ferro. this is bloomberg surveillance. your equity market up seven points on the s&p.

1.5454%. "the real yield" will be coming up on bloomberg tv at 1:00 eastern time. interesting to see the ruble gaining against the dollar off of that navalny headline. from new york, this is bloomberg. ♪

♪ >> we still have the long-term structural forces that weigh against significant acceleration in growth. >> all eyes are really on what constitutes substantial progress right now. >> the markets are so overbought, enthusiasm is so high, that i think we are approaching that stall speed for a little while. >> the market is going to have to navigate this transition from incredible monetary accommodation to thinking about what removing some of that accommodation is ultimately going to look like. >> where policy stance is today needs to be seen through, but there are some tough decisions ahead. >> this