>> the amount of quiddity that's out there -- of liquidity that's out there, for trillion dollars -- out there, $4 trillion in money markets, all of this augurs well for inflation. >> how much does behavior change? >> there are several megatrends here that will probably make this cycle hotter for the next several years. >> this is not just overheating. there's a risk that this is starting a fire, so inflation could be overshooting. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: upside surprise after upside surprise. from new york city, for our audience worldwide, good morning. this is "bloomberg surveillance ," live on tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro.

equity futures positive 0.7 percent on the s&p 500. companies in america delivering in a big way. tom: there's different parts of america, but i like how you take it to america because each of the sectors is different now. in the bloomberg headlines, maybe we get mcdonald's out. we had caterpillar earlier on. you know what? it's all the same story, revenue surprises. jonathan: upside surprise. 13.6% on comp sales, plus 9.23% was the estimate. a new record for services. revenue records in each geographic segment. double-digit growth in each product category. lisa: the thing is, this isn't just pizza. the -- just beats. these are unbelievable beats. i'm looking at mcdonald's share price ahead of the open.

it is up 1.1%. this goes to apple being up less than 3% ahead of the market, given the fact that it actually blew expectations out of the water, which make me wonder, what are traders looking for? what could change their view, make them by more or sell more -- make them buy more robustly or sell more robustly? tom: that is that nominal global gdp proxy. jonathan: another upside surprise. we also need to talk about execution risk. we have seen that showing up in a big way. ford is going to cut production in the second quarter by 50%. tom: they prefer general motors over at citigroup right now. i also want to point out the verizon media train wreck, as

they jettison aol and all. i'm going back and forth, but we are trying to get it all in. i love the phrase, "we connect people to their passions." jonathan: how's that working out? tom: the new look at apple, take the verizon media phrase, connect people to their passions, and throw it over to apple. those are the winners, losers in this derby. jonathan: one company is doing it, the other company isn't. equities at all-time highs on the s&p 500, 40 do hundred. we had -- 4200. we advanced 0.7%. yields higher on tens to 1.6504%. a big call out of goldman we will touch a bit later on on the commodity market. lisa: it is a boom market. perhaps mcdonald's is connecting people to crispy chicken

sandwiches, which evidently was one of the reasons why they said comp sales were so good. today we are looking not just towards crispy chicken sandwiches, but also initial jobless claims are expected to come down. i still wonder why they are not coming down faster. the expectation is for about 530,000 new jobless claims. still a lot of people getting benefits. what is going to make this number go down to really as -- go down materially as the world reopens and the summertime emerges? at 11:00, randy quarles of the fed is going to be speaking about financial supervision, financial regulation. interesting to see what he has to say about archegos and possible disclosures around derivatives, given the fact that jay powell was saying this does raise questions about risk and is meant controls at a number of banks. later today, we are of course going to be getting a better look at earnings. amazon and twitter coming out after the bell. expected to blow things out of the water, given what we have

seen from apple and facebook. i do wonder what will make traders respond. why has there not been a bigger respond to beats that are astronomical? these are way above normal beats. jonathan: it's not just the companies that have had big year to date gains. still, the stock has hardly moved. i know one focus for you on amazon is the fact that it is north of 3500, and you think perhaps they should deliver a stock split. tom: we are seeing all of these companies adapting to the reality of their success. they've got a pr effort to the nation, frankly to their employees. i saw that yesterday afternoon with the amazon out front about pay raises coming quicker to the people. one of those things is just to be more visible and more accessible. why don't they do a stock split to recalibrate with other big

companies like mcdonald's and that ilk? jonathan: steve schiffer own -- steve shive around -- steve chiavarone, federated hermas, joins us now. steve: you had a market dominated by institutional investors, and it didn't really matter what the stock to price is. we know retail investors have come in a much bigger way over the course of the last year or so, and i think it does make those stocks more accessible to those folks, and to increase manned in the short run. tom: a major shout out to federated hermes. you people have been fabulous about having the courage to stay in this market. how do you acquire shares this morning? steve: i think it is a stock pickers market right now. we are getting there. we are at 4200 this morning.

i think you are likely to see volatility over the summer. i think value driven markets in general are more volatile than growth markets because you need that data to continue to support that all cyclical story. i think politics and the sausage making around a myriad of proposals will get messy as that gets negotiated in public. our view is if you see some of these value cyclicals selloff because the 10 year rolls over or there's a flareup in the virus, you want to buy those. i think we are getting to the point, and it will be in the second quarter of 2020, where value will be on a fundamental basis as a strong against growth as it will ever be. that's probably your signed to start adding to some of those growth names again. so i think it is stock by stock, industry by industry. it is not about buying the broad industry at these levels. lisa: why is the market not buying these broad beats that

are incredible? why is the stock not up more dashed stock not up more -- the stock not up more? steve: steve: i think it is -- steve: i think it is healthy. the market wasn't going to wait for these numbers to come in. we understood covid was easing. that started getting priced into the market. now we are delivering the earnings to justify that. if you look, the market was trading at 22 times pe last june. it is trading at 22 times pe today, and we are up 40%. this is good fundamental rolling in earnings, and it is one of the reasons why we have not been apoplectic about the multiples, and we think this is more of a sustainable run. jonathan: i get that at the index level, but let's take tech. alphabet going into its earnings report was up about 30%. knocked it out of the park. the stock rallied. apple did nothing all year. knocked it out of the park.

the stock is up a couple of percentage points. i think some people are struggling with that. steve: but if you look at the fundamentals, number one, we know we had a major refresh on the iphone last year with the 5g. the question is, are you going to get a similar one going forward? with google, there was weed through -- there was a readthrough to the macroeconomy. we were reminded of how cyclical parts of that business are. the fact that you have advertising dollars jumping the where they are -- the way they are, that is a sign of economic strength, reopening, and potentially further cyclical upturn for that company's revenue. so i think it is about the sustainability of what is going on. apple is great, but it is not necessarily any better in the coming quarters. jonathan: steve, always good to

see you. haven't talked about facebook this morning. the stock is up by more than 7% off the back of the story that steve is talking about right now. there was a company on the app side of the business selling more units and getting more revenue per unit. with that embedded cyclical story and some of these names, the ad revenue over at facebook, alphabet, we are seeing big pops. tom: you wonder about twitter this afternoon. what we are trying to do, trying to say at all as you mention ford motor, stanley black & decker yesterday. we are talking ipad, iphone and all that. how about double digit dummy vitamin growth -- double-digit gummy vitamin growth? it is a general lift and expectations across a lot of products away from the fancy stuff the business media is totally focused on. jonathan: everyone is going to

talk about peak growth because it can't get much better than this. this cycle is so unique, and that's why i wonder whether the concept of growth -- of peak growth is even relevant. you have a reopening that delivers a mechanical year on year rip like the one we are seeing in corporate america right now and the general economy, can you really use peak growth is a concept in this cycle? tom: you can't, and i'm going to go back to corporate officers adapt to the cards they are dealt, and that's always the way it is. lisa: it depends on the company. if you are talking about facebook, one thing that is clear is that some of the pandemic habits are persistent. we are seeing that with apple, seeing that with cloud computing. there are companies that do not see that. netflix was one of them. you saw it punished in the aftermarket trading. but that is the question. how much of the economy changed? jonathan: coming up, michael holland of holland and company, chairman.

a little bit later, it is amazon's turn. up 30 on the s&p. a breakthrough 4200. futures up by 0.7%. we have a lift on the 10 year yield of three or four basis points to 1.6450%. euro-dollar just about positive, $1.2127. heard on bloomberg radio, seen on bloomberg tv, this is "bloomberg surveillance." ritika: with the first word news, i'm ritika gupta. president biden is betting he can sell the american public on sweeping change. last night in a speech before congress, the president called for higher taxes on the wealthy to fund a massive investment in the nation's social security net. he's asking for trillions of dollars for infrastructure, childcare, education, and subsidies for working-class families. politics may force the president to abandon some of the more ambitious ideas. president biden's speech also underscored how much he's focused on china and its economy.

the president says he believes that the u.s. and china can cooperate in some areas, but he warned that xi jinping wants to make china the most significant, consequential nation in the world. the president insisted that the u.s. will maintain a strong military presence in the pacific. the u.s. government has warned its citizens to get out of india as soon as possible because of the worsening coronavirus crisis. the state department issued a level for travel advisory, its highest level. americans were told not to travel to india or to leave us soon as it is safe. there were a record 379,000 covid cases in the last 24 hours. apple crushed it again. revenue soared 54%, and the company arranged another $94 billion of stock buybacks. apple warned that the global chip shortage could knock off up

to $4 billion in revenue during the fiscal third quarter. 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 ritika gupta. this is bloomberg. ♪

♪ pres. biden: we are in competition with china and other countries to win the 21st century.

we are at a great inflection point in history. we have to do more than just build back better. we have to build back better. jonathan: let's build some chips right now. that seems to be the issue at the moment. from new york city this morning, good morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. here's the price action. i'll get to what i'm talking about a new moment. equity futures up 28 on the s&p 500, 0.7%. all-time highs. it is the issue of the moment. demand is great. can you meet it with supply? we saw this story play out with ford yesterday. they've had to cut their plant production for the second quarter by 50%. we seen this play out with apple. it could hit revenue by three for belittling dollars -- by $3 billion to $4 billion. now we've put a little bit of detail around the story from caterpillar. the cfo, "we may not meet 2021

demand due to the chip shortage." the team at morgan stanley talked about this coming into the quarter. demand is great. it is about execution. some of these companies are going to struggle to meet that demand and execute. tom: the timeline on that is a real mystery. what is so serious about the chip shortage is it is not like one month, two months, all of a sudden. how far out do you think it is? jonathan: i think they are talking about 2022. the cfo of ford says they believe the issue will bottom out in the second quarter. but the chipmakers are talking about this playing out into 2022. both companies have got skin in the game. of sectors have got skin in the game. the auto sector once this done with now. tom: we are so advantaged to see the fabric of all of these earnings. what i see is a lot of companies struggling with their earnings

flat, lower revenues and all of that, talking about hard seltzer. i've never had hard seltzer in my life. that is like the savior of the moment. jonathan: i have to admit i've had some hard seltzer, i think it's called white claw, a couple of summers ago. i understand it is still a thing. it wasn't my thing. tom: an expert on hard seltzer would be jack fitzpatrick, bloomberg hard seltzer reporter in washington. how bad of a hard seltzer do the moderate democrats need after the state of the onion last night? president biden did the ballet any president has to do. what is the morning after the hard seltzer like for moderate democrats? jack: well, the kind of got ahead of this and warned that when this gets to congress, it is going to be reshaped very significantly. i'd and can give his pitch and talk about his ideals, but the legislative process is going to be very different. joe manchin was talking yesterday about how the overall

spending numbers that these proposals had give him heartburn. there's a divide between moderates and progressives clearly, but this is on a pretty bipartisan track right now. they are not pushing it through the process to do this with a simple majority in the senate, so there's a lot of pushback from the moderates and republicans to try to whittle this down to something significantly smaller. tom: let me translate the jargon therefrom jack fitzpatrick. reshaped means they don't agree. [laughter] lisa: thank you. i appreciate that. state of the onion, by the way, that's classic. there is a question about what in the proposals biden has put out there already are actually getting pushed through the disagreements tom is talking about, especially given some of the supply chain disruptions jon was talking about that a lot of companies are mentioning,

especially given that people are still saying there are serious infrastructure needs on a myriad of issues that need to be addressed in the near future. jack: the basic transportation infrastructure stuff, the buildings and utilities, water pipes, that kind of thing, that's where there is bipartisan support. when it gets more two things related to climate and the human infrastructure, if you want to call it that, that is where they are -- where there are way more disagreements. so there's probably bipartisan support for a good chunk of the money in here. some of the competing with china semiconductor stuff that lawmakers have worked on does seem to be a bipartisan priority , but a lot of the stuff biden is pushing for this next plan on family care, child care, that kind of thing, that's where it gets a lot more controversial. lisa: i understand there is bipartisan support, but is it possible for these two actually

get done given that biden wants to include some of the other proposals, and that perhaps some republicans don't want to appear to be on the same page with democrats? jack: there are a number of republicans who want to get something done as long as they can cut some of that other stuff out of it. the choice for biden and democrats is do you try to push this through in a partisan way through the reconciliation process that is slow and confusing, and some things would be pulled out because of the parliamentary aspect? or do you continue to work with republicans? they are talking to them now, and understand that republicans are going to pull a lot of stuff out. it would be a big win for republicans to cut out big chunks of this, the most controversial stuff on climate and that kind of thing. the question is if democrats continue to work with them as they pushed to cut and cut. tom: what is the messaging to the sunday talk shows? it seems forever away, but were you going to listen for on

sunday as everyone regroups for may? jack: the topic will probably still be the infrastructure bill and this next big push for the families plan, but i will be looking for the concrete stuff. there are conversations between republicans and the white house, but at what point do the committee chairs take something up? at what point do people work on legislative language and get into the details, which is what you discover even more challenges and disagreements that you have. but i think the new cycle will be pretty -- the new cycle will be pretty focused on this let us ask the news cycle will be focused -- the news cycle will be pretty focused on this legislate of push. jonathan: jack fitzpatrick. in germany, they delivered a

record number of doses, 1.1 million doses. that is the equivalent of a 4 million day here in the u.s. it is a huge number. tom: they are picking up on this. they will do it with a certain efficiency. maybe because of the size and scope of america, they are going to catch up even faster than we perceive. jonathan: we had days like that in america, now printing somewhere in and around 2.5, 2.6. we are looking at 2.6 million vaccinations a day in america at the moment. but this is getting better in europe. we are crawling our way out of this on the continent. tom: i am thrilled that people watch and listen to us each and every day. when luke kawa emails n, when we were mentioning hard seltzer, he mentions that the canadians went down in flames last night. jonathan: they didn't do well

last night. are they luke's team? tom: i believe so. they haven't won since time began, and they are winning this year. jonathan: a bit of ice hockey for you. coming up a little later in the hour, pierre ferragu on the chip shortage hitting corporate america. itting corporate america.

♪ jonathan: live on tv and radio, this is "bloomberg surveillance ," for our audience worldwide. futures up 28 on the s&p. a breakthrough 4200, positive 0.7%. some outperformance on the nasdaq. we push higher there as well, up i more than 1% on the session so far. want to talk about the bond market. expectations coming into the new year. spare a thought for the sell side, just for a moment. i know some of you might not want to get that small violin out, but spare a thought for them. at the beginning of november, we had a rally on the equity market of 30%, and when we look at the year ahead, the only two names i can think of right now that still have a year-end price target on the s&p 500 north of where we are, goldman at 4300,

jp morgan was the other at 4400. this market has moved so quickly, and this bond market did, too, until the end of march when we topped out at about 1.74% on the 10 year. then we get a lift again this week by about 10 basis points, right now up another three to 1.6450%. on the 30 year, up to about 2.3159%. in the commodity market, get to cover and crude. goldman sachs, i think jeff currie does such a wonderful job of not making the call on the commodity market. just explaining the characteristics of commodities. it's a physical market, and you need to clear, and you can't price tighten years in the future. tom: what's important is the

linkage here from commodities and then back in the rate markets and the inflation proxy, and then over to equities and the expectation out six months. i would suggest very much so, to lisa's point earlier, the expectation out six months on stocks gets you to november of this year, and nobody has a clue what kind of a earnings stream we are going to see reported out at the end of january next year. jonathan: here's the goldman call six months out on copper come on crude. $11,000 on copper. on crude, looking for $80 maybe. these are the year to date moves. look at the year-to-date moves we've already had on copper come on crude. 28%, 33% respectively -- on copper, on crude. 28%, 33% respectively. tom: you link it into the results from apple yesterday, and the result is there's a boom recovery in asia, and with that and industrial recovery as well.

jonathan: it is the command shock jeff currie is talking about and the inability of supply to meet it. that's the commodity market. that is a massive story for the equity market. can supply meet demand for corporate america? kailey: as we talk about the rally in commodity prices, all i can think about is higher input costs and the pricing pressure that results. margins are definitely keeping in this earnings season, and the blowout numbers from big tech after the bell last night. facebook revenue up 48%. it left expectations in the dust. all of that digital advertising spending we saw google benefiting from earlier this week is true for facebook, too. that has shares up about 7.5%. also, you the growth -- also, user growth beating expectations. also, a $90 billion addition to the share buyback program,

aiding sentiment as well, although i would note apple in that semiconductor shortage is a factor. they say it could knock $3 billion to $4 billion off of fiscal third-quarter numbers. qualcomm is a maker of chips for smartphones benefiting from that surge in demand. those shares up about 5%. on the other side of that semiconductor equation, you have ford. that chip shortage biting with a cut to the outlook that could cost them about $2.5 billion. those shares down the better part of 4%. we also heard about chips from caterpillar this morning. earnings beating expectations by about 47%, but the cfo saying they might not be able to meet and demand in 2021 because of that chip shortage. also, they didn't provide any outlook. still, shares are in positive territory in the premarket. to the downside, it is lower by the better part of 7%.

ebay, this is interesting, down 7.8%. . the company saying stimulus money ran out. we are not going to be able to benefit from that anymore. as americans emerge from dependent, they don't think they are going to be -- from the pandemic, they don't think they will be able to hold onto those gains. tom: domino's pizza, same-store sales up 13.4%. we are making our contributions at the keene household. jonathan: are you? i do not believe you. tom: i'm not. [laughter] it just wanders by me and disappears into bedrooms. lisa: wondering pizza. -- wandering pizza. tom: exactly. well said. jonathan: i once met tom for a drink at the carlisle. i forget what time it was. tom: late. [laughter] jonathan: i bring some friends with me who were in town for the weekend. isaac it was around the election in 2016. tom asked the barman to get some

food for mr. ferro. he comes out with some warm cookies to have a snack in the middle of the night with a hard drink. that is what tom does at the bar. tom: to you, it's timothy. jonathan: ok, timothy. lisa: just eat the cookies. tom: he takes off all of february. jonathan: i wish i was you sometimes. tom: there we are. we say good morning to all of you as well. what is important here, and i want jon to bring him in, we are distracted by earnings, distracted by all of this tech stuff, and it is about the deepest market out there, and that is fixed income. michael schumacher is someone to speak to. jonathan: mike schumacher of wells fargo with us now. your read on this price action, please. mike: we are still bearish.

we think this move is overdue, frankly. treasuries have set a new pretty narrow range for the last month. you get so many factors coming together to push rates up, whether it is traditional stimulus as we heard last night from joe biden, or a very compliant fed. take your pick. on top of that, really strong inflation readings. jonathan: this debate at the moment in the bond market i find really fascinating. michael collins of pgim says we might have seen growth, peak yields. bob michele said peak growth isn't relevant in a cycle like this one because of course peak growth is going to come early in this cycle because the slow down was mandated and reopening is mechanical. where are you on that debate, the growth and how relevant that is? sam: peak growth -- mike: peak growth really is irrelevant at this point.

u.s. growth was awful last year, it is good this year. that is baked into the cake. what is more important is how quickly disinflation ramp-up. how quickly do you get the base effect economist talk about, and how fast does the fed taper? they swatted down those questions. would you think that is a strong recipe for yields to go up. lisa: markets are going to get ahead of the fed. the fed might be looking at a certain roster of inflation data, but we are hearing out of companies the degree to which input prices are being passed along to consumers. has there been enough data at this point to say this is more than transitory? mike: probably not quite yet. i think you've got to get out a couple of months. i hate to talk about base affects, but the most intense month is right now. april of last year, cpi fell 0.4%, so i think you need to get out to the prince that will show up in july.

that's when -- the prints in july. that's when you will get a read. tom: what do you make of it when the mayor announces that new york city will fully reopen on july 1? that has to have an effect on capital markets. mike: the reopening's are huge. when you think about the impact on markets this year from vaccinations and reopening's, it is extraordinary. perhaps the keene household will consume a little bit less pizza at that point. but i think it is a good time for the economy to have a boom. jonathan: mike schumacher, we've got to leave it there. let's wrap up these headlines. it comes from an interview on msnbc with mr. de blasio, saying new york city to fully reopen on july 1. it would be interested to get the detail on what that means for, say, going to yankee stadium to watch a baseball game. what that really means for all those kinds of activities. tom: i agree. it is in the details. i will say in the last 48 hours,

maybe 72 hours, cases have really come in, as we heard from the doctorate johns hopkins. we are apple, apple, facebook, amazon, twitter. we are guilty as anyone. seriously, domino's pizza up 37% per year for the last decade. apple computer up 28% per year. jonathan: it's been one of these huge stories. it's been one of the big winners of the stock market for more than a decade, right? tom: they've been a big winner, but their equity interest in the detroit tigers hasn't been so good. jonathan: value add. i would expect nothing else. you pivot away from a big headline like that. tom: seriously. jonathan: i'm with you. lisa: i can provide some insight. there are questions about bars and restaurants being opened now until midnight, and past midnight. the whole idea of the city that never sleeps. it has been sleeping.

you've had subways that have been shut down for provosts -- for periods at night. how may people will come at the city reopens? jonathan: questions i think we are all asking. what does it actually mean? lisa: i do not know the answer to that. then there's the question of pools and beaches. are they going to open on time? the city is saying yes. but will people come? if you go outside, it looks like they are coming. jonathan: can we go to yankee stadium? i imagine the season it might be easier to get tickets. is that right? tom: i've been looking. red sox, they beat the ground last night. magical -- beat de grom last night. article -- magical. lisa: you have to have a covid test on site. jonathan: can you take a vaccine passport? lisa: yes, correct. jonathan: so we are doing vaccine passports in certain parts of the economy, just not

at the government level. tom: al from new jersey males in and says the whole team needs pizzas from domino's this morning. lisa: bring it on. [laughter] jonathan: for breakfast? tom: sure. jonathan: got to stay cut for summer, tom. tom: that's our new logo -- that's their new logo. domino's, stay cut for summer. jonathan: that's going to work out, isn't it? later, pierre ferragu from new street research on a chip shortage that has hit ford, apple, and now caterpillar warning about it. tom: maybe if domino's splits they can join the dow. [laughter] jonathan: this is bloomberg. ritika: with the first word news, i'm ritika gupta. president biden is proclaiming that america has turned the corner on the pandemic and is on the move again. he promised tax hikes on the wealthy to pay for ambitious plans to spend trillions on

infrastructure, health care, and other priorities. president ayden also called on congress pass tricked her president biden also called on congress -- president biden also called on congress to pass strict gun measures. the president pushed for a ban on assault weapons and high-capacity magazines. the carlyle group brought in more money from investors that posted gains across its business in the first quarter. the firm's private equity funds rose 15%, whilst investment solutions were up 14%. carlisle benefited from taking its companies public earlier this year. caterpillar reported first-quarter earnings that beat estimates. the world's biggest maker of mining and construction equipment says rebounding economies drove demand for its

signature yellow machines. sales were flat in north america, but rose in other regions. 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. ♪

>> ultimately your own pricing power is dictated by your technology strength, and i am

pretty optimistic about how that is developing at the moment. the other side of the equation is the fact that the semiconductor market is tight, and there are examples of semiconductors where we are seeing prices go up at the moment. jonathan: that was the nokia ceo questioning the situation at the moment. i think it is the big situation at the mount for corporate america. anyone exposed to the chip shortage. good morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. the s&p 500, futures up 28 points through 4200. in the bond market, yields higher to 1.6521%. euro-dollar unchanged at one dollars would one cents -- at $1.2132. a headline crossing the bloomberg from new york city mayor bill de blasio, saying that new york city will fully

reopen on july 1. but trying to get around what this actually means. he says he expects broadway to return to full strength in september. so are we opening -- are we reopening parts of the economy, keeping other parts until september? tom: i would say there is some confusion about this. but the confusion was there yesterday as well. we are all stumbling forward. lisa, i'm going to go to you on this. the school thing in september is really the transient point. lisa: how much is this going to hinge on vaccinations of 12 to 15-year-olds, even younger individuals? the idea that kids will be able to go back to school in person in full in september. tom: i know we've got to get back to semiconductors here, but dr. levy at children's hospital

in boston was heated that we need a research regime before we get vaccinations under 16 years old. jonathan: we need a little more clarity on a whole range of issues. when we get those details, we will bring them to you. across the bloomberg in the last hour, not related to that story, related to the chip shortage, the caterpillar cfo saying they may not meet their 2021 end user demand due to a chip shortage. you saw this and apple as a knockoff billions in quarterly revenue because of a chip shortage. you saw this from forward, -- from ford, cutting production by 50% in the second quarter. p airfare ago -- pierre ferragu, new street research director, why is this hitting some companies more than others? pierre: we rewind back to a year ago. a year ago, the world came to a

stop. everything stopped. in the supply chain at foundries, chip manufacturers, planning for orders, they all went a very cautious road. you have players more in the tech space who we are thinking we have very important terms to take like the cloud, and we don't want that situation -- so they kept ordering like there's no tomorrow. then you had people who were more defensive, like the auto industry. industrial supply chains. that is where they are really scared about cash burn and getting into trouble with such a significant downturn. they became very cautious. right after that, they were remaining relatively slow which is not great for mini people,

restaurants and things like that. but people staying at home which white collar is still being paid, blue-collar and service jobs in government jobs is losing money. so demand is far outstripping the cautious supply planning that was made. tom: beautifully explained. you are definitive out of this -- definitive out of bernstein on this. what is the timeline to where the logistics mess clears? pierre: unfortunately, the logistics mess is with the chip manufacturers, and the lead time to put up a new fab and have it up and running is at best, in

ideal conditions, et months. you should be more thing -- conditions, 18 months. you should more be thinking six more months, so 24 months or more. so we are going to hear about chip supply for the next couple of years. in terms of who gets impacted the most, it is going to be very difficult to call because one chip missing on the motherboard, you can't ship your ipad. one chip missing in your car, you can't manufacture the car. so it will be very random, who gets hit. but if you are apple, you are better positioned because you've been working on your 5g transition, taking way more precautions than a car manufacturer just being focused on managing the downturn. lisa: this is exactly where i wanted to go, excusing risk. how much is this something that

corporate executives can get ahead of at this point. what are you looking for from corporate executives that they are going to do about it? pierre: it is going to be very difficult to get granular detail about what they are going to be able to do. [indiscernible] -- for a very minor chip in their car. it is going to be very difficult to be able to do something about it. i think what you have to do is to mitigate it, and another thing you have to keep in mind that is very important is that we are in this extreme situation where people brace for a downturn, and spending increased, but you were talking about new york getting back to normal, getting back to the city that never sleeps. in bars and restaurants, this is going to push down the money

going into the industry, so maybe the savings rate in this environment is going to be when demand normalizes. maybe things are going to cool down and that is what is going to accelerate the return to normal on the supply side of things. jonathan: really smart as always. i look forward to catching up again. i keep meaning to talk to you about tesla, but we keep getting distracted by something else. it is an issue dominating corporate america. anyone exposed to the chip shortage right now. it is a struggle to execute and meet that demand. tom: you just work your way through it, but there's a real mystery on how you work your way through. i'm going to go to the end of third order, end of fourth quarter. who has a clue where we are going to be? there's a guesstimate on gdp, but it is just that, a guesstimate. jonathan: new york city to fully

reopen on july 1, according to the mayor of new york city bill de blasio. the headline crossing is the mayor speaks to msnbc here in america. all-time highs on the s&p. this is bloomberg. ♪

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>> the fed has got to be a lot clearer both on the inflation side and the real side, and fiscal policy has to confront the fact that we do have to pay for things. >> we will see a rise in real yields, but it is not going to be anything like what we have seen in the past. >> we understood covid was easing, and that is starting to get rest into the market. now we are delivering the earnings to justify that. >> we know that economic data is great. this is all reopening, fiscal stimulus. how much does behavior change? >> this is not just overheating. this is like