♪ >> if things normalize, we are going to see a shift back towards services, and that means taking some of the pressure off the goods sector. >> the mentor liquid at the out there, for trillion dollars plus in money markets, saving rates near all-time highs, all of these bode well for the architect. >> this is all reopening, fiscal stimulus. how much does behavior change? >> there will be i think temporary inflation over the next 12 to 18 months. >> long-term big picture, the fed has a long track record of

controlling inflation, but it could come at a cost. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. julie minivan mill -- julian emanuel because of the most important day of -- julian emanuel calls it the most important day of 2021. what we heard in the opening montage was the optimism of the haves. president biden tonight is going to talk about the rest of america. jonathan: a plan for families in america, and a big change down in washington, d.c. but as lisa has repeated through the morning, there's a lot of multitrillion dollar plans piling up. can they be executed? tom: the polarity here is absolutely remarkable. boom microsoft, boom google, boom apple, and you mentioned the shock of where we are in late april versus the beginning of the year, and yet the rest of america really has a labor struggle.

jonathan: we are up more than 5% on the s&p 500, up more than 30% on have about your to date. there's a cyclical story -- on alphabet year to date. there's a cyclical story embedded. we have hardly talked about it. that's the story, main street versus wall street. the conversation shifts to main street and what is going to happen with labor costs, inflation, raw materials, transportation. that is where things get interesting to me. how do you get exposure, leverage, the reopening, and a cyclical upturn with all of this going on around you? tom: on this important day, we welcome you on radio and tv, right up to david westin tonight and the president's address. what is so important here is not so much the politics of washington, but how you get main street back on links with wall street. lisa: people are saying for a long time, the markets

outperformed the fundamental economy, and perhaps we are shifting to a time where it will be the opposite. we've heard that from a number of people. yet, what does that look like, when you see the profits we are seeing out of the likes of microsoft and alphabet? tom: it is going to be interesting to see. i want to go to the data. a little bit of red on the screen. we do have a modest lift in yield >> why -- in yields. why? jonathan: a couple of tricky ones on the supply side of the story. we are up another basis point to 1.6 360%. i just a believe how little we have talked about the federal reserve and the chairman powell news conference. tom: let's go to the why of that right now. are we just waiting for june? jonathan: message received. everyone seems to understand the message from the fed, and yes, i think we are waiting for the fed. what is fascinating about that is we often wait for a new set of forecasts, but this is a federal reserve telling you they

are no longer dependent on the forecast, so why are we waiting for the june meeting and a new set of forecasts? tom: we will have to see. what i like there is the view forward and how you partition this on radio and tv. we had a lot of different conversations, many of them optimistic. dan skelly joins us now with morgan stanley wealth management, their head of market research and strategy. you say you need courage to look out two to three years. how do i get from the panic of 2021 and look out to 2024 or 2025? dan: that is a really interesting viewpoint today because when you think about it, morgan stanley is trying to distinguish between its long-term view two to three years out and its short-term view. as you know, we are a little technically cautious in the short term given how far markets have moved, and we may be lapsing some of these peak rate of change on earnings and policy, but to your point, when

i look out two to three years, i am extremely optimistic. there are several trends here that would probably make this cycle hotter for the next several years, including a very powerful consumer rebound that goes on. talking about pent-up demand for services, including digital investments, which is really one of the main takeaways from the covid experience. it was a massive digital wake-up call. you're going to see investment in technology through many sectors. that is going to be a boon to the economy going out. lastly, it is all about demographics. we are going into a bullish time in terms of demographic shifts, where the millennials who are now a bigger part of the population then the boomers are reaching their peak earnings and investing years. that is going to drive flows. jonathan: let's pick up on a couple of themes. this cycle is so unique and different that we are seeing peak great of change right at the beginning of the recovery, just because of the nature of the slowdown. it was mandated reopening, mechanical pop back. why is rate of change so

important still, given how unique the cycle is? dan: everything is just happening faster, to your point. looking back at previous cycles, this recovery is happening twice as fast. that is certainly running up against some headwinds now in terms of earnings rate of change . when i look at earnings season thus far, and we heard a mixed bag overnight, some reported above expectations, some below. we are halfway through. over 80% of companies have reported, and get the average stock reaction on the day of report is down 20 basis points. it is important because we are up 80% off the march 2020 lowe's, and it -- march 2020 lows, and it means we could be in for a pause here. it does not mean we are indulging the long-term market, to be clear. jonathan: there's a point you brought up repeatedly, and that his execution on the cost side, the labor market tightening up possibly. harder to meet that demand with

supply. yesterday, what we saw from big tech was a cyclical story embedded in those names. is that going to be the cleaner way to leverage the cyclical trade without the worries about higher costs? dan: that is an interesting way of looking at it. we are certainly actively looking and being selective in some of the growth space. as we have talked about in the past, we are going to do more outside our house is finally this year, but we are never going back to 2019. you are already hearing big financial companies talk about hybrid models, how much time they allocate in the office, and what that is going to do for the demand for cloud and digital services. so looping back to your original question, we see these trends going on for several years. there is some cyclicality embedded particularly in the advertising leverage names, as we saw over the last 24 hours, so we think that is an opportunistic thing to play. lisa: do you think that the underperformance of the russell 2000, and the classic small caps

which has been the traditional cyclical play, that that underperformance will continue? dan: we do, and we saw our strategists downgrade forecasts going back over a month ago after being bullish for a year. smaller companies are one of the areas that really acutely feel the cost pressures and have limited ways of offsetting those cost pressures. so we do see small caps continuing to struggle near term as things adjust, and we want to also, and the overall equity portfolio, move up to quality and focus on those companies that have rising power and are going to be able to pass on those costs to customers. lisa: when you talk about a hot cycle over the next two years, perhaps shorter than in the past, but still very hot relative to what we have seen, does that cohere with an inflation breakeven rate right now over the next two years of 2.66%, over five to 10 years of

2.3%? these are not astronauts michael -- these are not astronomical figures, all the -- figures, albeit the highest we have seen in years. dan: there's a lull in investors following the last cycle. i think you are going to see that manifested in the labor markets. we are seeing drastic labor supply shortages. you are going to see that play out in geopolitics, which is certainly diverged since 2008, 2009, and you are seeing the ramifications of some political and trade dynamics in shifts in technology. that is causing inflation in certain areas. so things are different. i think the biggest take away, by this time is different and why that number might be too low, is fiscal. we've talked about potential he more spending. we will see if there is the mass for that in congress asked the math for that in -- math for

that in congress later on. tom: do you see corporate behavior that actually changed use of cash? i don't see it with google. dan: yeah, that's true. you are seeing more of the buyback trend that has defined the last cycle. let's see what happens with capital gains and taxes, what happens with the treatment of dividends. dividends become a more attractive source of capital return going forward, if they are somewhat more insulated in terms of the capital gains tax issues? i tend to agree with you, i think some of these really big companies have tremendous cash forwards, and we are going to hear more from the banks later this year as they continue to see reserve releases and earnings improve. they are going to be buying back more stock, so i think it is a combination of a lot of things we have been seeing. jonathan: dan, it is good to catch up. dan skelly, morgan stanley wealth management head of market research and strategy.

tom: you can do this on the bloomberg, folks. we have this huge advantage, we feel, within the financial tv worldwide and radio worldwide. if apple got back to where they were on their balance sheet of cash, they need to find how to spend $25 billion fast. jonathan: i think they know the best way of doing that because we have seen that repeatedly over the last several years. jonathan: -- tom: that is a huge number. they need to figure out a delta of $25 billion today to figure out how to get back to a comfortable cash raise. jonathan: do you want another big number from morgan stanley? you brought up payrolls a little bit earlier. payrolls, 1.2 5 million dollars is their estimate. right now, the median, $900,000. tom: this is so important. we are going out to michael

feroli, we will find 7 million employed over the summer. lisa: does this count for jay powell? bully address that? -- will he address that? jonathan: we will figure that out later today. equity futures unchanged on the s&p. he is so upset now. [laughter] have you got a late afternoon, tom? looking forward to the show. tom: what about the "surveillance" nap? jonathan: you can take it in the pantry. isaac boltansky coming up next. this is bloomberg. ritika: tonight, president biden will unveil a $1.8 trillion plan to expand education opportunities and childcare for families. it will be paid for in part by the largest tax hikes on wealthy americans in decades. amongst the legislation provisions, pre-k and community college will be free, and the child tax credit would be extended. meanwhile, fund managers would lose their carried income tax

provision, and the top rate for individuals would go back to 39.6%. fed chair jerome powell is expected to maintain aggressive support for the economy. fed policymakers wrap up a two day meeting today, all but certain to hold interest rates near zero. they are also expected to repeat a pledge to keep buying bonds at the current pace of $120 billion per month. boeing burned more cash than it specked it in the first quarter, about $3.7 billion. the chipmaker is still work -- the jet maker is still recovering from dependent. they resumed deliveries of the 787 and hope to boost the 737 production in early 2022. deutsche bank is working on plans to allow staff to work from home up to three days a week. that would be one of the most lexical return to office policies amongst large international -- most flexible return to office policies amongst large international companies. 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. ♪

>> part of the healthy aspect of the debate in washington right now is that there is an element

of both democrats and republicans that think that the spending proposals may be a tad too aggressive and that we have to do it anymore reason way. but the countervailing -- do it in a more recent way -- more reasoned way. but the countervailing message is that we have to do it that way. jonathan: a federal reserve news conference later and a proposal from the president for a $1.8 trillion family aid plan, throw in some apple earnings, too. alongside tom keene and lisa abramowicz, i'm jonathan ferro. equities up 0.25% on the s&p 500. yields up a single basis point to 1.6342%. euro-dollar down 0.2%. the focus without a doubt on

cupertino, california and washington, d.c. tom: it is. it is going to be interesting to see. we side with google yesterday. there's a lot of optimism here. a summary that maybe things will look better, but the nuance will be in the call. it now on washington, isaac boltansky with us of compass point with a very sharp note. i love the phrase, "from rhetoric to reality." when does the reality click in, 11:00 p.m. tonight? or do we have to wait 11 weeks? isaac: i would argue it is already starting to click in. at least, that is my take away from investor calls. what we are going to get tonight is an incredibly ambitious and expensive proposal that was intended to remake our economy in a way we haven't seen since the great society under lbj. the reality is it is not going

to happen. one of my favorite lines, one that i think we should keep in mind as we listen to the president speak, is the president proposes, the congress espouses. for investors, that means what will congress agree to. the subtext is what will the centrist democrats in the senate allow. tom: i want to go to your ohio wesleyan university. they got to sell this thing where the election is actually pretty close as well. how do the moderate democrats around the acreage of ohio wesleyan adapt to their president and to their liberal wing? isaac: i think the main point there is, and i think this is an important thing to highlight, is infrastructure week is going to last another five months or so. it will be time consuming. it will include myriad fights over really detailed and nuanced policy issues, from lifetime

exchanges all the way to -- it is going to take another five months, most likely until september or october, to get something done. but my view is that there is a window of both political and legislative opportunity that democrats will seize on, and we will get something. we will not get what the president calls for tonight, but we will get something of significance. lisa: what is likely between the $2.3 trillion infrastructure spending, the $1.8 trillion american families plan? what is realistic? isaac: i think right now we should focus on physical infrastructure. i think that clearly has a considerable amount of support on capitol hill. i think there is actually bipartisan negotiation now, even though i wouldn't bet on that. so i think we should focus on physical infrastructure, and then on the tax side, here is my framework. anything that seems narrowing

the gap between wealth and work has a high likelihood of being included in the final package because it dovetails with the democratic economic fairness agenda. here i am talking about the higher tax bracket, talking about the increase in capital gains, talking about the end of stepped up -- jonathan: the band is quite wide. the spread is quite wide right now. how narrow do you expect the spread to get? what kind of numbers are you thinking about? isaac: anything we here tonight should always be viewed as a negotiating marker, not a redline. i think the white house has been clear about that. we will not see a capital gains rate of 43%. think that ultimately, that will be negotiated down to something closer to the 28% to 30% range. there are a number of reasons for that. we have centrist democrats, but also i think there is awareness

that we want to incentivize long-term investment. furthermore, there is equilibrium where if you raise it too hi, no one wants to sell, so i to it is fair to assume 28% to 30% on that end for the highest earners. jonathan: what they are trying to achieve is to close that carried interest loophole as well. from what i can tell, and you tell me if your interpretation is different, they are trying to do that by equalizing the treatment of capital gains and wages, and the end outcome would be closing that loophole. if you can't equalize that, can they just close the loophole by doing something else? do you think they should do that? isaac: i think you hit the nail on the head. their focus is really on capital income broadly. so capital gains and dividends, by the way, were included area if we just talk about increasing that threshold, you would really handle the carried interest issue in its own right. i don't think they get all the way to treating it as ordinary

income, so there will be a focus on a more narrow fix for traded interest as well. especially with the overarching changes to the rate for capital gains, i can't underscore how important it is, the end of the stepped up basis. jonathan: isaac boltansky taking the realist approach to the situation down in washington, d.c. but we will hear later, a proposal, not necessarily the thing that gets done. tom: you get into the nitty-gritty there. i was scarred forever i think in 1978, when i sat down and read the entire tax reform act of 1978 and realized six months later that was the dumbest waste of time i ever did because all the stuff is malleable and changes, and i just avoid the nitty-gritty is much as i can. it was good to hear that on the carried interest. jonathan: there's clearly a broader philosophy here, whether it is achievable or whether you

take steps towards achieving that broader philosophy. maybe that is the ultimate goal. lisa: the plan that president biden is going to lay out includes tax cuts and credits for middle and lower income individuals, while hiking taxes on the upper income, talking about the redistribution of wealth. that is what this plan -- tom: come on, guys. the broader plan here is to get reelected and to keep the house democratic in 2022. jonathan: i agree with you. it is always operation reelection, and the risk is that they overstepped the mark and reach a little bit too much. lisa: i wonder how much adding on this $1.8 trillion plan so soon after the $2.3 trillion proposal actually helps them get that through or undermines those efforts. tom: well taken. but over the weekend, i believe i saw the difference is like five seats in the house. that is nothing. jonathan: skinny margins looking to do really big things.

ultimately, what is important is how this plays out in d.c. how does the electorate feel about it? tom: david westin is not as cynical as we are. jonathan: looking for to the coverage later. tom, you are so fired up this week. very agitated about capital gains. tom: i am. [laughter]

(announcer) do you want to reduce stress? shed pounds? do you want to flatten your stomach? do all that and more in just 10 minutes a day with aerotrainer, the total body fitness solution that uses its revolutionary ergonomic design

to help you to maintain comfortable, correct form. that means better results in less time. you can do an uncomfortable, old-fashioned crunch or an aerotrainer super crunch. turn regular planks into turbo planks without getting down on the floor. and there are over 20 exercises to choose from. incredible for improving flexibility and perfect for enhancing yoga and pilates. and safe for all fitness levels. get gym results at home in just 10 minutes a day. no expensive machines, no expensive memberships. get off the floor with aerotrainer. go to aerotrainer.com to get yours now.

jonathan: 60 minutes away from the opening in new york city. futures unchanged on the s&p 500. on the nasdaq down about .1% alphabet flying, the cyclical story embedded in big tech. the market gets it. alphabet up more than 30% into the earnings. coming out of the earnings, up another 5%. later, apple. which of the board in the bond market. your yield up about one basis point on the 10 year to 1.64. 1.6378. we are still grappling with how quickly the cycle is moving. think about a beach ball pumped up with low interest rates and stimulus.

a mandated slow down in america. he removed the hand, the ball goes flying. that is the story in this economy. switch of the board for commodities. it means copper is flying. i wanted to bring you is to think about where we have been over the last 10 years. at the top of the last cycle, early 2011, we saw 160 on copper. right now 9024. the difference between now and then. thinking about the people at rio, sam walsh, taking hold of way too much volume and capacity after the big super cycle that china fueled. this time around, the leadership of rio, bhp, anglo, the big global minors will be so reluctant to add capacity. that is why so many people so much bullish on copper going forward. i cannot keep up straight face.

tom: i was over there years ago. in the bar, little umbrellas in the drinks. the beaches where everybody gets to bed. what is great it is it is not one big party, but it is a lot of intelligent people whose idea of short-term is 10 years. jonathan: chile would talk about setting copper prices. the way it has changed is the -- an individual hotel on park lane in mayfair and you would go from hotel to hotel. i understand the parties are not what they work and i'm not sure it happened, but i would love to see some of that come back. tom: it may come back to bring life back to global wall street. we welcome all of you. julian emanuel call this the

most important day of the year and we have been remiss to look at our economic data. michael mckee joins us as he prepares for his press conferences happening with the chairman. start with the trade balance. i care, don't i? michael: you care. it is very interesting. as we recover we seem to be buying a lot more stuff from overseas. the initial numbers for the march traits good deficit, $90.6 billion. that is notable because that is the largest u.s. monthly trade deficit ever for the month of march. it will subtract from second-quarter growth. tom: what does it mean for twin deficits before we get to inventory? is this something on your radar to worry about the combination of our physical debt, the speech tonight, and this record trade level? michael: there is a lot going on. the person i would hate to be is the foreign ex strategist.

how do you combine the idea of a massive stimulus in this huge trade deficit? -- and this huge trade deficit? interesting to find out what is going on. exports were up 8.7% during march, but imports up 7.6%. these are big percentage changes , historically. tom: that number i have never framed in my brain, let alone seen. -90.6 is jaw-dropping. lisa: the idea is some of the stimulus money ended up going overseas as people tried to pass their inventory with new cars and toilet paper products. there is a question as you sit in jay powell's press conference virtually. is there anything that could come up that will truly be groundbreaking for wall street? michael: probably not. the fed knows whenever they say

anything about changing the stance of monetary policy, there will be a reaction in the markets. they do not want that now. the second reason is because joe biden is speaking about fiscal policy and the fed does not want to get drawn into that. i would expect them to be quite quiet. tom: we are among friends. that is not what we care about. lisa was alluding to how rude they were with you. will you get elevator music again when you ask a question? michael: i hope not. i think jay pohl anxious to call on people and avoid their -- i think jay powell is anxious to calling people and avoid their questions. tom: maybe they will play toto when you ask your question today. michael mckee with an important question. look for that in the press conference. jonathan: at the very end. tom: leave him for the end.

we begin with torsten slok of apollo global management. torsten, when you see this data, are you elevating your gdp estimate and lengthening the boom economy? torsten: it is very revealing for how strong the economy is. when imports go up so much it is certainly ever a strong sign the stimulus checks buying a lot of consumer goods, that has been showing up in trade. we also have the economy is getting a lot of tailwind from excess savings in the corporate sector, excess savings in the household sector, and the reopening continues. discussions yesterday of the mast mandate changing. the economy is doing very well. the numbers confirm your picture of the ball on the water that is coming up is certainly a good analogy. we are seeing an economy coming

back strongly. jonathan: let's talk about inflation. this is not just base affects. it is too easy to sit here and say the base affects. we know the base affects. it is more than that your torsten: it is. this is a very important discussion as michael mckee was just mentioning. the fed will continue to tell the doctor story about the unemployment rate is still 6%, there is nothing to worry about in the near term, we're still waiting for the economy to come back full capacity, which could be around 3.5%, which is where we were pre-pandemic. if you look at the data for a number of indicators, not only are inflation expectations going on with the household sector. you're also seeing it is getting difficult to find workers -- some companies are paying workers to show up on interview. you are also seeing a number indicators when it comes to the

ism. the regional surveys from the richmond fed, from the dallas fed, and the kansas city fed, they have shown significant pressure, in particular the manufacturing sector. as you just spoke about copper prices, that makes it more expensive to produce. margins could get squeezed or inflation can go up we are seeing more signs of this not just being base effects. there strong demand in the economy pushing prices higher. jonathan: how is your outlook different from the federal reserve? torsten: in the near term, if i go to my bloomberg screen and do the profile of hal i expect core pce over the next couple quarters, the expectation is inflation will go up and then it will come down at the end of the year and into next year. i think the risks are beginning to rise.

this is not just overheating. this is like starting a fire. there's a chance inflation could be overheating and the fed might say it we have flexible average inflation targeting, we are allowing inflation to overshoot. the big question is rates will take a relaxed approach to inflation overshooting. i would say the key issue is inflation does begin to overshoot 2% for an extended period. one needs to look carefully at how long rates -- long rates -- will long late rates begin to say if i'm a bond or man -- therefore i need to be compensated for that risk. lisa: what does inflation fire look like, not just burning hot but a fire? are we heading back to the 1970's. people scream we are not going back to that. torsten: that is a very important question. i would say the new inflation

fire is similar to what we had in the late 1960's. it went up and stayed at a relatively elevated level. in this world the levels of inflation are different compared to the late 60's. in my book that would be inflation at work above 2.5% on core pce, which is the fed's preferred measure of inflation. if we get to those levels, i think bond advances will start to become worrisome. that is not my baseline scenario. i still think inflation is under control, but we do have a few months where we could risk turbulence in credit, inequities , in risky assets because of this issue. the final point is have a look on your bloomberg screen. the volatility in rates is very elevated. elevated relative to the vix. the shock people are worried about in rates market that

people in equity markets do not care about. there is a disconnect between implied volatility and rates. it is very high relative to how low implied volatility actually is. that is telling us something about how investors are thinking about the inflation risk for the next several months. jonathan: really smart. torsten slok, apollo global management on the story and the american economy. to bring you some of those forecasts, the median estimate for cpi for the economist at bloomberg, 6.6% for 2021, then the drop down to 2.1%. that seems to be the view in line with the federal reserve. doubts raised by torsten and captured by volatility in rates. tom: i'm starting to feel like i felt 12 20. there is a zeitgeist and boy has it been wrong in the past. listen to business.

they are buying stock. jonathan: coming up on the open, bob michele joining us. he might stay later on friday. what time is the fed show? tom: i don't know. lisa: 2:00 p.m. jonathan: when does it finish? lisa: 2:30. tom: just go across the street and have the beverage of our choice. jonathan: from new york city, julian emanuel calling today what could be the most important day for markets in 2021. the take from btig. this is bloomberg. ritika: president biden goes before a joint session of congress tonight to try to sell his historic spending plan. the president wants money for child care, universal prekindergarten, and tuition

free community college. he plans to pay for it with tax hikes aimed at high income earners right republicans have announced their opposition and some progressives are calling on the president to do more. president biden's plan would do away with private equity's most lucrative tax breaks. fund managers rely on a share of appreciation and the assets they oversee. that is known is carried interest. the profits are taxed as capital gains. that tax break would go wendy under the president's plan. he also wants to raise the top rate on capital gains. the u.k. is working on a digital coronavirus passport. the initiative is braced on existing national health service app. it would be adapted to help travelers prove they have had a shot or tested negative from the virus. france is starting to test a tracing app to contain records of shots and tech. spotify has -- increased

subscription prices and attracting more advertising. price increases for a range of products will take all in markets including the u.s. and the u.k.. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am ritika gupta. this is bloomberg. ♪

>> all will go up a great deal in terms of their cost.

16 months of inventory need to be produced in 12, not only to satisfy current demand but rebuilt the supply pipeline. that will cause delays and prices to go up. tom: david valent with citigroup , one of our best conversations of the day. thrilled you could join us for that. we drive forward the conversation now. what has changed is commodities, not all commodities but most commodities lift up. some of them with a vengeance. oil off. lisa was buying at a negative price point. palladium at a record high. paul wallace is one of the most interesting people at bloomberg news. he has the romance of jetting around the world in commodities and we are thrilled he can join us from dubai. from where you sit in the middle east and in north africa, is at

the beginning of the commodity cycle people have waited and waited for? paul: thank you for that introduction. sadly, for the middle east, a lot of people are suggesting that if there is a commodity super cycle, that oil might not be part of it. for various reasons. metals are obviously flying. metals have the advantage of being major beneficiaries of the green energy transition because of how they are needed in things like wind turbines. oil we are up about 30% for brent and wti. that is off the back of huge production cuts by opec-plus. even though they have raised output in the last couple of months, they are still down

about 6 million barrels a day. that will be key for the rest of the year, how quickly to the likes of saudi arabia and moscow bring back those spare barrels. lisa: this goes to a larger debate within the commodities sector. this idea producers are more disciplined this time around. jon was talking about that with the copper producers. they are more disciplined which means the prices could go that much higher, especially with the infrastructure spending plans. is that consistent with what you see that discipline remains the presiding sentiment? paul: it really does. it seems to be the case with non-oil commodities, it is also definitely the case with oil. you have opec-plus, which is a 23 nation grouping, extremely

diverse, anyone from saudi arabia to russia to iraq to nigeria to angola. these governments all have different needs. they need the money because in some way or another there economy took a big hit last year. the amazing thing is they have managed to stay cohesive for almost a year since they begin oil production cuts during the hike of the first wave of the pandemic. a lot of people wrote opec-plus off and said it is only a matter of time before the alliance falls apart and every producer thinks it is a freefall and they have done as much as they can. that has not been the case because of what saudi arabia and russia have done. they have managed to keep it together. they are holding back a lot of lost revenue because obviously revenue means production multiplied by the price. if you cut the production, you will take a hit as far as

revenue is concerned. it has been quite oppressive as far as opec is concerned. lisa: we talk about this in the context of earnings. company after company has said their input costs are searching. based on your conversations with the producers in the shale patch and the oil patch, do you think these inflationary pressures have staying power well beyond what people are counting? paul: i think so. we are getting to that point where certain companies that use a lot of commodities for making their products or countries that are heavy commodity importers are hurting. as an example in the oil market, the most obvious case has been india. in the last few months india has been speaking out about how oil prices have gone too high, too fast and criticized saudi arabia

and effectively blamed saudi arabia, saying it is saudi arabia's fault opec-plus is not raising production as quickly as india would like. we are getting to the point where the people in the companies that do not benefit from rising commodity prices are starting to speak out. that could be something that puts downward pressure on them. oil has been flat for the last five to six weeks. part of that is because imports are under strain. jonathan: -- tom: thank you so much. paul wallace, bloomberg's editor for middle east and north africa as well. lisa abramowicz, what we focus on? lisa: today i'm curious about chair powell and how he will tow the line between earnings and inflationary pressure and the

idea we have the tools to keep it in check. i am also very interested to see what apple and facebook have to say and what apple will do with all of that cash. tom: i will go to use of cash. i do not know what they will do with it. there's a lot of speculation and rumors on it. our team will assist on that. i will dovetail them into the boom we see in big technology and among the prospects that the president will come up with, i bet that will be directly addressed by chairman powell. he has been in press conference after press conference, a growing tone of concern over the fed's project. started in chicago with president evans and the basic idea of the growing inequalities of the nation. lisa: substantial progress in labor markets. this does not just mean a number. it means equaling out the playing field more because the pandemic hit the lower income individuals a much harder.

those are typically the individuals who lagged behind. tom: growing evidence in the last number of weeks. we were talking about this at the dinner table the other night. how the bargain before was the upper decile at the lower decile did well. that has changed where it is just the upper two deciles and the lower decile has not participated. lisa: we could dovetail that into the conversation about the savings rate and how much excess savings people have. is it because people received checks from the government or because wealthier individuals did not go on vacation and save that money, and are they going to be the big spenders? tom: do not tell jon ferro. she just nailed it. that was the best slide in peter hooper's 55 yesterday on the massive savings of the haves in america. this sets us up for an

extraordinary day of bloomberg news. much more of the finance markets. david westin eating our coverage tonight of the president of the united states. before that, earnings with the close comment before that i think there is a fed show at 2:00 p.m. lisa: there is. tom: stay with us. ♪

wanna help kids get their homework done? well, an internet connection's a good start. but kids also need computers. and sometimes the hardest thing about homework is finding a place to do it. so why not hook community centers up with wifi? for kids like us, and all the amazing things we're gonna learn. over the next 10 years, comcast is committing $1 billion to reach 50 million low-income americans with the tools and resources they need to be ready for anything. i hope you're ready. 'cause we are. we know how much you count on us...

...and that's why we're here 24/7... ...and on the road maintaining a fast and reliable network. we're always working to ensure the internet meets your needs... ...by making access easier for all... ...with comcast lift zones and our internet essentials program. we're invested in making our apps easy... ...to give you personalized assistance around the clock. and we're committed to keeping our team and customers safe by working from home... ...and using precautions in store. see what we're up to at xfinity.com/commitment

♪ jonathan: what a day we have

lined up for you. from new york city for our audience worldwide, good morning, good morning. the countdown to the opening bell starts right now. equity futures unchanged. investors preparing for chair powell. >> what does the fed do? >> the fed has telegraphed a do-nothing policy for the time being. >> since their last meeting. >> we are being bombarded with economic information. >> it is better than expected. >> if the data not only surprises to the upside, but persists in surprise to the upside -- >> the harder it will be to move off that. >> the fed will get what it wants. >> the fed will be more patient. >> that is part of the fed mantra right now. >>