we basically rebooted the global economy. we shut it down and turned it back on, and it is coming with a lot of messy friction. >> we've got a long way to go to get to pre-pandemic employment. >> i don't think we are in the roaring 20's and we will have a new era for u.s. growth. i think we are just back to normal. >> we do think it is transitory, but we have to admit that there's a fair chance that inflation will turn out to be sticky. >> if you think about what is going on, it is very clear we are borrowing from the future. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: getting closer to payrolls friday. from new york city this thursday morning, good morning. this is "bloomberg surveillance ," live on tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. your equity market shifting higher by three points on

the s&p, almost era .1%. what a fascinating moment for the bond markets. tom: the market is absolutely original. i am going to go back to the partition you made yesterday between the financial dynamic, the inflation rate dynamics, and the real economy dynamics. to me, the massive mystery is the real economy in september or december or march of next year. jonathan: the d-word, deceleration. in the equity market, a tech story struggling to get a bid even with blowout numbers and a negative yield that is headed the other way. tom: i don't agree. i look at the chart this morning. i went to the s&p 500, and it is net even down -- not even down

2%. this angst over a non-correction i really take issue with. jonathan: i'm with you. i am trying to tell you with that what is happening in the equity market -- tom: i am just trying to boost ratings. jonathan: keep going. [laughter] financials, energy, that's where the outperformance was yesterday. i can't reconcile that with what is happening in real yields. real yields were headed the other way. inflation expectations were building. real yields were headed south. tom: we've got a good guest coming up on this, but it is a soup we've got right now. it is a bouillabaisse. [laughter] jonathan: you are killing me this morning, never mind the french language. lisa, your take on the market. lisa: the real yield issue is very interesting because it seems like the bond market has more faith the fed will come in and suppress yields or keep rates low for a long time, even as investors say they are not buying it. they are looking more towards the tapering.

there's a dissonance here. i wonder how much this has to do with international flows. we have seen more international investors come into u.s. treasuries due to currency dynamics, but i wonder how much that is leading to distortions that do not make sense in the market right now. jonathan: some headlines out of the bank of england that the bank of england is slowing the pace of weekly bond buying. the chief economist now the outgoing chief economist at the bank of england, voting to reduce the stock of purchases. they are slowing the pace of weekly bond buying, tom. that is the headline coming out of thread needle this morning. tom: i take massive issue. they say the inflation rises likely to be temporary. i can't have a sip of the morning beverage if it is temporary. jonathan: temporary, transitory. lisa: there you go. jonathan: if you haven't had a trinkle ready -- a drink already. [laughter]

yields unchanged at 1.5696% on the nominal 10 year yield. in the f6 market. -- in the fx market, euro-dollar up about 0.3%. lisa: i am looking forward to initial jobless claims 8:30 a.m. the numbers are coming down, but not that much. this number has been messy. it has been unclear. how much does this indicate true slack in the labor market? people out of the labor force supposedly contributing to the labor shortage. 12:00, the house is going to be hearing something about gamestop and the volatility around markets, having to do with the reddit traders. sec chair gary gensler came out yesterday and indicated a willingness to regulate the likes of robinhood and said adele more closely as a result of some of the turmoil -- and citadel more closely as a result of some of the turmoil. the fed is going to release a

document on financial stability. this is the f--- this is the f-word of the day, froth. jay powell did indicate how they are keeping and i on this, and eric rosengren pinpointing the market in particular. this could be behind some of the dissonance in the market, with discipline reigning supreme. the bond market is very much steady as they go. the real negative yield going further into negative territory. the question to me, how much are investors expecting the fed to curtail some of the suppose it froth that some people say could be in equities? jonathan: lisa's f-word for the fed speak, froth, not the other one. tom clearly had a fantastic cinco de mayo yesterday evening. the numbers just out. let's go through those numbers. moderna -- moderna numbers just

out. let's go through those numbers. first quarter revenue, $1.9 billion. the estimate, $2.28 billion. tom: we got to get to our guest, but look at the bank of england forecasts for growth. i am going to go not one quarter , but extend it out. you've got an average blend off the top of my head of 6% plus for united kingdom economic growth. that is stunning. jonathan: 7.25% for 2021. are you just on repeat this morning? tom: no, i am being for geishas -- being flirtatious. that's another word for transitory. jonathan: there'll cronk wondering what -- darrell cronk wondering what program he's just joined. can we get to the market story this morning? which is deeper real yields, and a slightly confusing sector composition story.

what is your read on it at the moment? darrell: i think you guys were right on top of it as usual. the real yield story is the story, -90 basis points on real yields. investors should not stand for -90 basis points real yield. naturally that is going to be positive for risk assets. it is going to push money into equities. it is going to continue to push money into commodities. a year ago you had crude oil at $25, today $65. there is a huge inflation push in the economy that is not getting recognized by the bond market. if you simply go back to the global financial crisis, and at the same time, there's a lot of comparison that this is similar to that, you had positive 50 basis points real yield. today you've got -90 basis points with a ton more fiscal stimulus, and an economy that is going to come back quicker and an output gap that is going to close faster. tom: i look at the dynamics right now, the bond market where it is.

what are you telling your clients right now of how to study bonds? darrell: it is a generation that has not experienced rising yields, rising commodity prices, value stocks outperforming. tom: nice, so you are talking about jon and lisa. [laughter] darrell: well, not quite. they have been around longer than that. lisa: thank you. darrell: the point is, you shouldn't be surprised that we've got technology underperforming is a long-duration asset with the highest tax base. it has a negative correlation to rising inflation. when that happens, you get some of that money -- so i think it is happening right in front of them. it is about value overgrowth. it has outperformed on the russell 1000. it is about commodity prices going higher.

it is about a bear steepening of the yield curve. i know it is not happening today, but it is going to happen if inflation pressures keep pushing through like we have seen them doing. lisa: darrell, you are invited back because you are coming to my and jon's defense. what happens if bonds are right? people often think about bonds as the smarter asset class. there is this thought, though, that perhaps they are seeing something that equities are not. that is perhaps inflation that is not rising as much. why could that not be the case, and what happens if bonds are right? darrell: you are correct, equities would have to come down and probably reprice because you're going to catch a bid in the bond market, flatten the yield curve and drive it down. second-quarter gdp right now is tracking at 12% on a run rate for q2. i just don't see how that is not getting reflected. some people are calling for be gdp, but there is so much

liquidity in the system. there's $2 trillion sitting on s&p balance sheets, 4.7 trillion dollars in money market funds, and almost $16 trillion in commercial bank deposits sitting out there. that money has to go somewhere. it will go somewhere, and that is going to continue to push inflationary pressures higher, notwithstanding supply chain pressures and everything else we talk about. so it is possible, but i would still contend the bond market right now is not getting it right. jonathan: darrell, got to leave it there. there'll cronk, wells fargo wealth and investment -- darrell cronk, wells fargo wealth and investment management cio. tom: i took the bloomberg sub index of commodities today. the agriculture index is a moonshot, up 70% plus since the beginning of april. i don't know what that signals, but there it is. jonathan: it is energy, too.

base metals as well. lisa: the idea is that the bond market, if you look at the breakeven rates, they are signaling the fed is correct, that this is transitory. that if you look at near term inflation rates, they are the highest they have been going back decades relative to 10 year treasury -- tenure rates. this is interesting. yes, transitory. tom: boe, boring, boring, boring. this is not boring, is it? jonathan: there's a difference between cutting the pace of something and cutting the stock of a purchase program. it cuts the duration of the program may be by about a month, but the overall purchase target remains the same. andy howell confuses things a little bit because he had a dissenting vote today. what he would have liked to see was a reduction of the overall program. what the bank has done is slow the pace, extended the duration

by keeping the asset purchase target precisely the same. that is the news out of the boe. the headline, the bank of england thinks the u.k. can recover to pre-covered levels this year. as we talk about a commodity market, here's another headline across the bloomberg for you. iron ore at a record, above $200 a ton. tom: what did governor bailey say about manchester united and liverpool? jonathan: i hope francine lacqua asks that question as she catches up with the governor. lisa: really important. jonathan: clearly vital. 8:00 a.m., alan ruskin of deutsche bank. later, joseph stiglitz of columbia. looking for to that, too. equities advanced 0.1%. this is bloomberg. ritika: president biden says he is open to compromise on raising the corporate tax rate. the president has called on congress to boost the rate from 21% to 28%, but he now says he

doesn't have to be exactly what he says. democratic senator joe manchin has said he could support a 25% corporate rate. the u.s. will support a proposal to waive intellectual property protections for covid vaccines. the u.s. once better access, more manufacturing, and more shots and arms. drugmakers are opposed. they say few countries have the capacity to make the vaccines even if they use the formulas. there's a change at the top of ab inbev. the ceo is stepping down after 32 years. he will be replaced by the head of ab inbev's north american operations. this comes after the company posted a blowout quarter. spacex nails the landing in the fifth test of its starship rocket. after reaching an altitude of about six miles, the rocket made a controlled dissent to its launchpad in texas -- controlled

descent to its launchpad in texas. nasa recently picked spacex to develop a moon landing system with starship. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪

pres. biden: it doesn't have to be exactly what i say, but to

suggest that, some of the folks that are suggesting that, i am willing to compromise. but i am not willing to not pay for what we are talking about. i am not willing to deficit spend. jonathan: i love that line he had to throw in there, seriously meeting with them. not just for optics. good morning. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. -- morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. your equity up six points on the s&p. we advance a little more than 0.1%. wti down on the session, up on the year by almost 60%. we got brent approaching $70. copper breached $10,000 recently, in the last week or so. lumber futures topping $1500 for the first time ever, with the headline that dropped earlier this week. now iron ore climbing to a record, above $200 a ton on this massive boom we are seeing, this

huge demand shock working its way through a tight commodity market at the moment. tom: i go back to what you always emphasize, and i think it is the british heritage, as jon focuses on this trillion dollar -- on australian dollar, and australia with some strong economic statistics as well. jonathan: clearly the commodity currencies will take advantage of this. tom: take a look at canada. jonathan: there's a real conversation about inflation that the fed is not having. i am trying to work out whether the hedge, which is the commodity story, the energy in equities, and i use that word carefully, the hedge, becomes the conviction call. whether this becomes a conviction call in a bigger way. tom: shout to jeff currie of goldman sachs, who just nailed this call. he said we are going to go higher, and we did that. let's get right to it with jack fitzpatrick. there's 14 things to talk about in washington, including the brawl last night between the

washington capitals and the new york rangers. we will skip that. i want to go to the unspoken, which is the first 100 days of malarkey of people like you. how were the first 100 days of citizen trump? jack: of citizen trump, not well. we have seen a ton of statements that he would probably like to put on facebook and twitter, and will not be able to for at least the foreseeable future. but he's putting much in control of the republican party still, and we are seeing that in the fight between liz cheney and who could replace her in the house republican leadership position. so trump is still trump within the political party. he is still the leader of the party effectively, but clearly doesn't seem particularly happy with development on social media. tom: let's get out front of the story. how will he and his republican party respond to the patent

uproar we see from president biden? jack: you know, the republicans typically are pretty skeptical about the patent vaccine waiver issue. there have been complaints from the pharmaceutical producers. i am not sure how trump is going to drive that. right now, republicans are the minority party, and a lot of the power on this decision is in the hands of biden and the democrats . there was a push from the progressives to get this waiver, so i am not sure it is going to be a major campaign issue going forward. they got a lot of other stuff on their plates. so that may not be quite on trump's radar as much as immigration and the economy, and that kind of thing. lisa: i want to dovetail the vaccine waivers with commodities. there was a story in "the

financial times" talking about how india accounts for nearly 1/3 of all of the crewmembers of shipping cargo ships. the idea being this could further disrupt some of the obstacles we have seen in the supply chains based on the crisis that is ongoing in india. how much is joe biden looking at the infrastructure and supply chains as a national security issue, trying to get some sort of stop to the pandemic in india and other nations in order to protect that for the united states? jack: they actually haven't been entirely clear on the reasoning because there are so many reasons to be concerned about india and other countries that are struggling with this. that may be a significant reason for the biden adminstration, but ultimately, the supply chain concerns, the concerns over variants developing in other

countries that could eventually come back here, where the vaccines are less effective, and the moral push from progressives especially to help other countries, and also to put the u.s. in more of a worldwide leadership position the way biden has proposed, are really all seemingly driving this. so i'm not sure i can give you a ranking of where that falls into it because it is really kind of being presented by the biden adminstration as a holistic reasoning for the vaccine waiver. but that is a significant issue, obviously. jonathan: i think we have to be really careful with the language we use about this conversation. one thing the left has done is monopolize the moral high ground with a single perspective. it does not allow people to ask legitimate questions. i think the starting position is not that the democrats want to help low and middle income countries, and the conservatives and republicans do not. it is about how you help those

countries. that is the debate we need to have on a program like this. when i hear you say things like senator warren would like the waiver for ip, i think the worry that people have is that senator warren doesn't want it to stop there. she wants it to go further. isn't that the real debate down in dcf the moment? the freedom -- ndc at the moment -- in d.c. at the moment? the freedoms people have lost? if we get into property rights, does it stop there, or does it go further? is that the ultimate concern right now? jack: that is not necessarily the immediate concern, but the ultimate concern. i think you could make potentially a pretty effective slippery slope argument about how far this goes and what the effect would be potentially on vaccine production, or who knows if this is even going to be the last pandemic. we don't know when the next time we will have to have such a

worldwide effort to ramp up production of vaccines. so the long-term concerns are there. when i say the moral arguments that have won the biden adminstration over, to be clear, these are moral arguments, but not the only moral arguments involved in this. that has been so far the winning moral argument in terms of winning over the biden adminstration, which is in control of this, but it does raise a lot of questions going forward for the long term. but really, a lot of the conversation in washington is more on the immediate threats, even though there are concerns that are mostly being expressed on the right. a lot of it, especially when you hear the biden adminstration, a lot of the rhetoric around this is how to produce this vaccine right now as quickly as possible. jonathan: jack, great to catch up. jack fitzpatrick of bloomberg government. that's the issue at play.

we need to help these countries. how do we do it quickly? if you suspend the ip protection, do it quickly? tom: and how long is quickly? i don't see how we do it at the speed that india needs, as one example. . jonathan: from new york this morning, good morning. this is "bloomberg surveillance ," with futures up 0.1%. ♪

♪ jonathan: from new york city for our audience worldwide, this is "bloomberg surveillance," live on tv and radio. tom's got it in his head he needs to do something about the ratings of this program. if we could take a commercial break live, the ratings would go through the roof. [laughter] right now on the s&p 500, up about 0.1%. up about 0.3% on the nasdaq. switch up the board and get to this. take something growthy, copper, and compare it to something defensive, gold. that ratio has been breaking out again recently. if you take a look at the equity market, energy doing nicely.

tech underperforming. feels like a growthy story, doesn't it? a cyclical pickup. where you don't see it, more recently at least, is in the bond market. it's finish on this, treasuries. yields right now unchanged at 1.57%, your 30 almost up a basis point or so. how do we reconcile the tension? chris verrone has the call. chris thanks yields need to -- chris thinks yields need to break out higher again. that's just one of the calls out there. there will be others, too. tom: for radio, the chart is copper versus gold, and i love how you use chicago copper there. don't use lme. jonathan: i appreciate that. i didn't use the dow. tom: hg chemistry. jonathan: i know, i understand. tom: we are so done.

we are way done. [laughter] jonathan: good morning, romaine. romaine: we are going to keep the ratings going here. [laughter] let's take a look at some of the movers here. you were talking about this a little bit earlier, but on the decision by the biden adminstration to back this waiver at the wto, having a bit of a knee-jerk reaction in the premarket. pfizer shares down about 3%. when you look at some of the sell side commentary, they really talk about this idea of diversification. a company like pfizer is well diversified. it has certainly gotten a big benefit from the covid vaccine. this is really going to amount to a speedbump at best for pfizer, assuming that this waiver actually goes through. a lot of analysts don't think it is going to make it into the pipeline. then take a look at a company like moderna. this is a company that came out with earnings this morning, reported about $1.9 billion in sales. almost all of that is from the

covid-19 vaccine. so this is a big deal, not only because they are making most of their money right now off of the covid vaccine. a lot of the technology baked into that covid vaccine, they are using that same technology for the rest of their products in the pipeline, and there's a lot of concern here that if this waiver does go through, what does that do to some of the other drugs that the company has in development, drugs that have nothing to do directly with the covid vaccine, with the covid crisis? that is having an effect on biontech, curevac, and a lot of other companies. the longer-term implications could be really massive for a company like moderna. a couple of the names to keep an ion in the premarket that have been moving, we did get earnings last night from rocket companies . they were awful. the company is saying that next

quarter, it is going to be down to about $82 billion to $87 billion. this is a big issue because we know how resilient it has been, and everyone has basically said the cliff is coming. this can't last forever. whether it is symptom medic of what is going on in the broader space or whether this is just about rocket companies, who knows? but the expectations were high for this company and a lot of other companies in this space, and right now, it doesn't seem like they are going to be meeting it. let's see if that feeds into the homebuilders, into something like lumber prices. it could take a while for that to trickle through, but keep an eye on those names. paypal did report very good volume growth. those shares up 5% premarket, going in the opposite direction -- up 5% premarket. fastly going in the opposite direction. tom: david stubbs joins us, of j.p. morgan chase private bank

come on what you should be doing today. i am going to go to one sentence within your important report. "we expect growth to stay strong." to me, this is the money debate right now. do we get persistent, buoyant economic growth into next year, or not? discuss how you fold in bruce kaz men's work in economics into ash bruce kaz men -- bruce kasm an's work in economics into what you do. david: it does not mean we will not get phenomenal growth throughout the next quarters. you see that was central banks upgrading their forecasts. we see significant upgrades coming through in countries which are getting their vaccine rollout done properly. we see central banks lag the

recovery. we see impressive fiscal policy to support that as well. you put those things together, it all adds up to tremendous value growth, which means we believe the equity market can make new highs despite it being very point in the last few months. jonathan: what does you'll do, south of 1.60% in the treasury market? david: you had one of the worst quarters in fixed income of all-time in the first quarter. you've also had a lot of buying from the japanese, given the hedge yield is now quite attractive, and he just rolled over as well. but we would agree with the fact that it is not going to stay here for long. we have a target of around 2% about 12 months from now. it'll be a bumpy ride for sure, but absolutely, we believe both that yields are going to rise and curves are going to steepen,

one of the reasons we like the fiscal place, including financials. jonathan: what is the growth picture into this? what we have seen playing out over the last week or so, real yields further into negative territory, and tech has not been the outperformer and the way that some people might imagine. why you think that is? david: tech is a massive overweight in almost every portfolio i see from banking clients around the world, that has a lot of those big cap tech names, so this is not a place for incremental capital to go for a lot of people. that is the first place. also, there's a question mark over regulation in the u.s. we are fairly sanguine on that, because we believe in extreme scenarios where they start to talk about breaking up these companies, we see some value there. we also think it is so clear to people that we are now sustainably exiting this pandemic, the u.s. and the u.k.

are leading the way, europe is going to be swimming in vaccines in the third quarter, that story is still very much ahead of us. a lot of that points to some of the best opportunities on a taxable basis not being in mega cap tech, even though we still like it in the future for sure. lisa: we have been talking about the incredible rally that has been causing some assets to surge to all-time highs. we have seen records going back to 1970, depending on what index you use. given that, where do you see the potential opportunities? because i know when your recent research, you said you have started to be selective. david: absolutely. first, if you buy broad commodities, you are seeing things as defensive. if you buy a broad basket of commodities, you are getting some of the gold as well. we are absolutely positive on industrial metals. they have done well.

we think they can go further based on tight inventories and power them beyond the cyclical upswing. think energy is also a really interesting play with the confluence of restricted supply, now i focus on yield and shareholder return by the mega caps in the positive column, but also in the know the -- also in the negative column, the potential for very significant investment being needed if these companies are going to survive in a clean energy world. that's why defensive's are rightly skeptical of those companies. bottom line, we want to be selective in industrial metals. we just released a new paper on copper with the fundamentals there. there were some pure plays in the equity market on the copper side that we would absolutely be recommending clients get exposure to. lisa: how much do these rising industrial metal prices way on certain sectors and companies trying to offset the increases in input costs by hiking prices for clients?

david: i think one of the huge trends going forward in the next six to 12 months is focusing on companies which do have pricing power because we do see a lot of increases in input prices. we know that for key sectors, there is scope for margins to contract if they cannot pass on those price increases. we still think that when you look at some of the damage to the labor market around the world, we don't foresee a huge upswing in price consumer inflation because we do see a range of cyclical drags and damage, at least for the next year or two, plus the secular deflationary forces we have been discussing endlessly on this program for years around globalization and supply chains. so absolutely, we want to transition to the limited number of companies potentially that are going to be able to pass on those costs. we do expect margins in some areas to come under pressure.

jonathan: great to catch up, as always. david stubbs, j.p. morgan private bank global head of market strategy. a lot of people still believe this has got a long way to run. you see it in the commodity market. it is a demand shock that has only just started. tom: it is what keeps us going as we going to claims in less than an hour, and into jobs day tomorrow. it comes back to the real economy guesstimate. we don't have a crystal ball, and guess to guess, this is a heated debate. jonathan: payrolls friday, looking for some big numbers. lisa: the question to me is about the labor shortage, how that actually exists and why, as more and more companies complain about not being able to hire workers fast enough, with the number perhaps representing that labor market willingness to come back online. jonathan: you just see that in the ism, the pmi's, every single data point. lisa: at what point does it raise wages? tom: is it solved by the social programs?

people aren't working because they are getting paid by the government. lisa: it is nuanced. the data is mixed on that. jonathan: it is always more complicated. coming up at age: 30, joseph stiglitz, columbia professor. i think he's going to have an opinion on a couple of things. futures up two on the s&p. this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. president biden says a corporate tax hike doesn't have to be exactly as much as he wants. the president indicated he is willing to compromise on one of the key features of his infrastructure and jobs proposal. democratic senator joe manchin says he can't go for the president's proposed increase from 21% to 28%, but he could support a 25% corporate rate. treasury secretary janet yellen faces a challenge of getting a debt ceiling increase through congress without shaking

investor confidence. the current suspension of the u.s. borrowing limit expires august 1. the treasury department warns that if congress doesn't act, the administration would have to shift federal funding to make good on debt payments. china is suspending a regular economic dialogue with australia. it is a mostly symbolic movement to signal beijing's growing frustration. china cut imports from australia after efforts by the australian government to restrict access via huawei technologies. in france, socgen has turned in its best equity trading performance since 2015. revenue at the unit surged in the first quarter after being wiped out a year ago. those results provide some relief for the socgen ceo, preparing to update his strategy for the investment bank. 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. ♪

>> we have a fed that is extremely friendly.

they say they are going to keep interest rates low not only this year. they are going to keep interest rates low next year. i think the market is going to be surprised at the fed will raise rates sometime in 2022. they will be forced by inflation. jonathan: leon cooperman their of the omega family office, the chairman and ceo, on inflation and what it could mean for rates in this market. good morning. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. here's the price action of the moment. we ship up as follows on the s&p 500. futures positive three, almost 0.1%. yields up almost a basis point on tens. euro-dollar, $1.2049. crude just a little bit lower. commodity rally defining the moment we are in. demand shocks on wti. here's the line from j.p. morgan. "many of today's investment management's have never experienced the rise in yields, commodities, values, or stocks

in any meaningful way. managers will not take chances and will reposition portfolios." ultimately, that is what we have been looking at. tom: it is all moving along in real time, and we will continue with claims coming up in about 35 minutes. what jon and i like to do is stop the show when it is important, and right now we are most fortunate to have david wilson with us come our bloomberg stocks editor. one of the giants of what we do has died, and died tragically young. david swenson was at yale. he's the one you don't know. you know jon golub, warren buffett. david swenson was a giant that they worshiped. i want you to come in on this as well. modern portfolio theory, swenson learned it from james tobin and said, wait a minute, there's a better way to do that. that was the yale model. david: it changed the way that

endowments across the country were invested. the whole idea of not just focusing on publicly traded stocks and bonds, broadening investment horizons, private equity, that sort of thing. that's why they yale endowment has done as well as it has over the decades. jonathan: i sat down at university -- tom: i sat down at university of virginia with people that worshiped swenson. uva hit a homerun only because they diversified into commodities, and we are there again because of a commodity moonshot. david: and now people are starting to pay attention to an area of investing which, frankly, hasn't gotten a lot of love over the years, and understandably so because it is really only in the past year or so we have seen commodities pickup. tom: this goes right over to london as well. david swenson was iconic in shifting how we think about the word that peter lynch spoke so much of the -- so much of,

diversification. the one i would really want to talk to right now is mohamed el-erian because he confronted this years ago. jonathan: let's go through the statement from yale. "i write with profound sadness to share that david swenson died yesterday after a long and courageous battle with cancer. david served our university with distinction. he was an exceptional colleague, dear friend, and beloved mentor to many in our community." tom: david wilson, from where you sit, is the endowment model blown up with all of the hedge fund alternatives? forget about archegos and all that. it used to be simple. you need to make 2% over the bogey. that was it. vanguard blue that up, and swenson said we can still add value. did he? david: he surely did. why is it that there are so many endowment managers that in essence owe their strategy to

swenson's approach? it is clear he had something that other people sought to emulate. another piece of the puzzle perhaps is that as an individual investor, it is easier now to go the route that swenson did, if only because there are so many alternative investments that are being packaged into thin liking strange traded funds -- like exchange traded funds. tom: this package which david just nailed, we have become consultants businesses. jonathan: this business has changed, and it has got a whole lot harder. lisa: there's a question about the amount of money that has been flowing into private equity and hedge funds, which really hinged off of the yale model, the idea that you need to go further into risk and other asset classes to get the returns you need to meet your obligations. there's a questioned about whether this works after such a long period of time of doing

this, of so many foundations doing this. how much are you seeing an ongoing shift in this direction versus just going all in on equities, since that has been a good bet? david: that is a reasonable question because, like with any strategy, if you are the first mover, you have an advantage. if you are playing follow the leader, which undoubtedly, a lot of endowment managers are, it is a real question as to whether you can gain that same advantage or anything close to it. tom: that's right where i wanted to go. jon, you and i have discussed this over the years. david swenson did this with smaller amounts of money. granted, it was billions, but smaller amounts of money. right now with apple, with amazon, with the mass of the s&p 500, how do you move the value? how do you move the needle and add value in endowments versus just buying the index? jonathan: where do you find your edge when a handful of companies

make up so much of the overall index, and they are so well researched? we have asked that a million times on this program, and what is the answer? small caps, mid-caps, the underresearched names. tom: i don't think a lot of people know this, he was 31 when he took over the responsibility at yale. david: he certainly had a lot of time to implement his ideas about investing. tom: and make mistakes. david: and a lot of money managers don't get that opportunity if they can't keep up with their peers. they get bounced. tom: give me a view of what you're looking at within your charts in the market today. david: just in terms of today's charts i am focusing on, it is when i picked up yesterday on twitter from julian brinkman. tom: you stole it from julian brickman. david: i didn't steal it, i give him credit. tom: we call that stealing. david: call it what you want,

but if you look at arc innovation, it pretty much tracks the goldman sachs index of money-losing companies. that is more than just looking at the line. i ran a 30 day correlation. you've got numbers 0.682 0.98 -- 0.68 to 0.98. tom: that's rude. we don't do correlations until 9:00 a.m. correlations at this hour? jonathan: he's allowed. david: i'm the new kid on the show. what do i know? jonathan: thanks for waking up early with us. yell university sharing the sad news that yields chief investment officer died yesterday after a courageous battle with cancer. tom: he was worshiped. jonathan: coming up on the program, alan ruskin, deutsche bank chief international strategist. from new york city this morning, good morning.

alongside tom keene and lisa abramowicz, i'm jonathan ferro. your equity market looks like this, up 0.1% on the s&p 500. we advanced four points. yields in the bond market higher by almost a basis point. euro-dollar, $1.2053. this is bloomberg. ♪

> we basically rebooted the global economy. we shut it down and turn it back on, and it is coming with a lot of messy friction. >> i'm against the view that we are in the roaring 20's and we will have a new era for u.s. growth. i think we are just back to normal. >> we should all recognize the economy right now is experiencing a launch we haven't seen since the likes of world war ii. >> you sit back and think about what is going on, it is very clear we are borrowing from the fu