an enormous buildup of savings, and there's a lot of pent-up demand, so i think you will see really strong growth. >> we should all recognize that the economy is right now experiencing a launch up the likes of which we have not seen since world war ii. >> not one single report is going to term in the fed's change or projections. >> we don't want to start tightening up monetary policy and then find out later, when you try to battle inflation for so long, you jumped the gun. >> it is really the data not right now, but in august, september when we can say the reopening is behind us. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: it is payrolls monday. for our audience worldwide, good morning. this is "bloomberg surveillance ," live on tv and radio.

alongside tom keene, i'm jonathan ferro. lisa abramowicz will be back with us next monday. your bond market, one point 57% on tens. the round -- 1.57% on tens. the round-trip from last friday in the conversation. tom: more than i have ever seen, and the conversation continues. the jobs report still front and center. lots of good research work on it. there's any number of ways to look at it. but it goes right onto this coming friday, where we see retail sales which many suggest will reaffirm the supply boom we are seeing. jonathan: could see a deceleration month on month, which would give fuel to that debate. but whatever the conundrum you're looking at, whether it is the labor supply story, the colonial pipeline, we could address many of these issues with higher prices. what do you see in the commodity market this morning? higher prices. iron ore absolutely ripping.

copper absolutely ripping. wti right now, $65 handle. tom: commodities are front and center this morning, something we have done good work on. jeff currie was here with francine, of goldman sachs. i like what you said about iron ore, which is quoted in shanghai, and singapore, i believe in australia as well. iron ore is sort of the china commodity that really indicates this boom. jonathan: the aussie doing nicely as well in the fx market. cable up by 0.8%, through $1.40. tom: that surprises me. all of a sudden, we pop up three big figures. one dollar 41 cents, even $1.42 in the last few minutes. in the yield space, just as importantly, that dynamic between longer-term yields, what they did, and shorter-term yields, what they did not do is

key. tom: the fed going nowhere -- jonathan: the fed going nowhere anytime soon. on the s&p 500 would look like this. in the bond market, coming in almost a basis point now. prude, $65.19 -- crude, $65.19 on wti. you mentioned this over the last couple of weeks. when does the noise really start? tom: sooner than we think. i think people were humbled last time around. stronger euro, what does that mean for the europe export juggernaut? jonathan: let's bring in jared watered --jared -- jared wo -- jared woodard, bank of america securities.

what can be addressed with higher prices? jared: semiconductors is the big one that has been affected, possibly even the labor market in that latest report. semis are going to take a while, but it is not a sort of catastrophe. but most of the big headlines, whether it is in commodities or in labor, which can be addressed with higher prices, higher wages, and everyone is ready, and i think should be strapped in for what could be a very wild summer. if we look ahead six months to the end of the year, we expect inflation levels consistent with what we saw before the pandemic. jonathan: you've made the point that the conversation tom and i were having earlier this morning on the labor market, default offering and appreciation bonus, certain bankers getting a bonus

if they get a promotion, that is all discretionary spending. it is not base salary. i just wonder from your perspective whether that plays into the fed's hands a little bit. on either ends of the spectrum, we are talking about bonuses and not higher base. jared: this is exactly what the fed wants, i think. if you are worried about long-term wage price spiral, i think you can relax a little bit because a signing bonus is not a raise. whether it is $50 to show up for a mcdonald's job interview -- tom: that's what i got. [laughter] jared: or at the higher end, these bonuses are not permanent salary increases. if they were, that is a different conversation. but there's no evidence of anything persistent because employers and workers both understand that six to nine months from now, things are probably going to be a lot more normal than we expect. tom: it was great. they sent me a $50 check and said be sure there's change left over. jonathan: how did you get in on mcdonald's?

tom: i don't know, and number two value meal and a coffee. jonathan: so you eat at the mcdonald's? tom: you have a single sentence in your note that is just so important. . you've got to have the courage to buy an inflation surge when there is no inflation, but what do you do when inflation expectations finally go? what do you do when the expectations of inflation are finally there? do you sell? jared: let's look at little bit of history. our economists expect 3.6% cpi this quarter. i think that is exactly right. if you look at what is happened in the past, when we see inflation surges above 3.5%, there's been just a few of those occasions. we look at the market that are around those prints. if you bought all of the inflation trades, the commodities, europe versus u.s., etc. on those occasions, your

inflation trade lost money. when it is already priced into the market, some of those trades have done really well. you've got to be convinced this is the big one, and we don't see any evidence of that. we think investors still have to keep a balanced approach. we are seeing it in the inflation trades in the reflation trades. but i think the commodities, the material, the energy, there's just not enough evidence on that side. if you do see more dips, more corrections in the tech and growth trade, for a long-term investor, there's viable opportunities. tom: what do you think of the faang's? do you agree that the faang's actually offer value given their growth characteristics against the 10 year yield? jared: i think they are trading vehicles. at this point, some of these big

cap macros, they are like inflation, but i don't think anyone is looking at them as devalued by any means. if you look at the tech and growth type stocks, i think small and mid are more attractive here. jonathan: caught up with rick rieder on friday, and he was talking about running a higher cash position in the double digits, midteens maybe. does that make sense going into the summer, to have that dry powder? jared: i think it does make sense to have some cash ready to deploy. if it is a question of something tactical, just to be ready if there is some big dislocations, either way we could see overheated reflation trades that you want to sell to robe a -- cell to rotate back into growth -- you want to sell to rotate back into growth. i don't think it is a good moment to be allocating higher

permanent portfolio positions into cash or anything else that is going to change your fundamental mix because right now, there are 70 crosscurrents, you can roll the dice and it would tell you didn't different things. when there's that much confusion in the labor data, i don't think it is a good time to make permanent decisions. jonathan: what would fund that decision? would you trend broadly or something more specific? jared: i think fairly neutral on some of the mega cap stocks for a while, and we are much more favorable on small and mid-caps, so i think the trades that have already done very well, the really liquid names are the obvious places to look for cash, and that could even include investment-grade credit for multi-asset portfolios. we are kind of bearish on that part of the credit market, and see better opportunities elsewhere. jonathan: great to catch up on a range of issues. jared woodard there.

tom: i think he does the best job on the street of trying to think about the jetta met asset location and sector waiting -- think about legitimate asset allocation and sector weighting. literally with kids' tuition, they lost their job. s&p up 13%. the dow does better, up 14%. the nasdaq trails 7% year-to-date. that is not a bear market. it is so much gloom. jonathan: i should have brought that single down etf, shouldn't i? we are looking at cable right now. sterling with a $1.41 handle on the pound. i think at one point last year -- tom: does that mean you leave me and move back to london this year? jonathan: i think we've got to talk about the political side of this trade. the prime minister did ok in the last week.

tom: oh, come on. jonathan: in scotland, the snp did not get the big majority they wanted to push forward this scottish referendum, and that is underpinning the bid this morning. tom: "the telegraph" gives them lots of love, but the rest of the newspaper zeitgeist, it is not that they are in love with boris, but they are saying he delivered, right? lisa: don't be surprised -- jonathan: don't be surprised if they start pushing for another election soon. tom: how did labour do? jonathan: sir keir is struggling. he's not out of a job yet, but keir starmer is struggling. got to make this count. he was offering a more moderate view for the labour party against the aggressively progressive left-wing view of mr. corbin. tom: how can you not play gareth bale this weekend? jonathan: i was watching my dear ac milan.

why do you thing i am mentioning ac milan right now? 3-0 against juventus, getting it done. tom: folks, you learn so much on radio and tv. jonathan: we will get football scores sometime on this show. maria would probably save our football coverage, to be honest with you. from new york city this morning, good morning. this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. there is still no timeline for restarting a giant fuel pipeline in the u.s. that was knocked out by a cyber attack. the colonial pipeline facility is a critical source of supply for the new york region. fuel suppliers are growing increasingly nervous about the possibility of gasoline and diesel shortages in the eastern u.s. no word on who is responsible. u.s. infectious diseases chief

anthony how she says there is no doubt the country has undercounted the number of coronavirus deaths, but told nbc news that a university of washington analysis saying it is over 900,000 is a bit more than he would've thought. the initial number of covid deaths in the u.s. is at 581,000. prime minister boris johnson confirmed the next stage of lockdown easing in england will go ahead on may 17 as planned. people will be allowed to stay overnight with friends or relations, and indoor hospitality will be reopened. the government said limited international travel will also resume. ebs will pay a $40,000 bonus to its global banking analysts when they are promoted, double what some competitors are offering. banks are trying to reward and retain younger employees worn down by a surge in business. starting as soon as this month, ubs will pay bonuses to analysts promoted to associates.

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: later this month we are going to be distributing the first tranche of state and

local assistance from the american rescue plan. we won't get all of those jobs back in one month, but you will start seeing those jobs in state and local workers coming back. jonathan: from new york city this morning, good morning. alongside tom keene, i'm jonathan ferro. lisa will be back with us next monday. here's the price action. 4229 on the s&p 500. we advanced 0.1% on the s&p. yields unchanged at 1.5774%. the excitement in foreign-exchange is elsewhere. cable and sterling against the u.s. dollar, $1.41. we advance on that currency pair by 0.9%. tom: what do you see in foreign-exchange? to me, besides dollar weakness, it is the renminbi breaking out to new chinese strength. jonathan: sterling strength is a domestic political story. the aussie are flipping the commodity market. aussie stronger this morning. iron ore doing better.

copper doing better. we are surging in some parts of that commodity market. tom: we educate the australian dollar wired into not only the pacific rim, aussie-yen, obviously aussie-renminbi, but the polarity between australia and canada dollar could show you some information. jonathan: crude the story for canada. crude is doing ok, isn't it? tom: importantly, with the colonial pipeline cyber issue, it really hasn't surged all that much. but nevertheless, brent crude in the vicinity of $70 a barrel. let's get to washington right now. we welcome all of you across this nation. emily wilkins with us. i want to go to the reality. we all know the convention. conor lamb in the pittsburgh suburbs, had to switch districts three allocation of whatsoever -- districts with reallocation or whatever.

conor lamb won. he's out of a job if joe biden screws this up, right? maria: --emily: he and many other democrats. during midterms, things are usually better for the party not sitting in the white house, so that is point one for the republicans. another is that this redistricting is happening, and who controls more of the statehouses? republicans do. so who is more likely to win the house in 2022? it is republicans. that means conor lamb, jared golden, michigan, ohio, illinois, all of these makers have a lot -- all of these lawmakers have a lot on the line here. tom: what is the difference between the sitting on the couch in the oval office -- is it wednesday? jonathan: it is the wednesday before and the white house. tom: what is different from that than the speaker pelosi we saw

in the white house with mr. schumer? emily: he would like you to think he has the experience of working in the senate, the track record of working in a bipartisan manner there. there are solutions to finding a bipartisan path forward. there is certainly a group of americans that want to see that happen. at the same point, democrats don't want to give up so much in negotiations that they wind up presenting they feel is an insufficient package to the american people. they might be under pressure from moderates, but they are also under pressure from progressives, who are going to be trying to flex their muscle here to get what they want in the package. jonathan: looking to the jobs report friday, the over woman response tom and i had from economists was don't be too hasty. don't draw too many conclusions. what were the conclusions being drawn down in washington? emily: it depends if you are a democrat or republican. if you are a democrat, this jobs report means there are too many people who are worried about

returning to the labor market. they have fears about catching coronavirus. they can't do it because of childcare, because of schools. if you are a republican, this means the federal government has done way too much to help those currently unemployed, giving too much money. we have talked about this before. you have seen montana, south carolina, now seeing arkansas go ahead and revoke that supplemental unemployment benefit with the idea that the less money that is being given to those who are unemployed, the more individuals will be returning to the workforce. jonathan:jonathan: the worry, more will follow, maybe prematurely. the female participation rate really reveals the story that childcare is a massive issue still in this labor market. that participation rate on friday actually dropped. do you think this is a state to state decision specific what the data? because i am hesitant to make too many generalizations across the country.

the unemployment rate in montana is 3.8%, clearly very low. others to follow, are you hearing a political argument or economic one? emily: i think there's a little bit of both. for democrats to say more is needed for childcare, that plays right into that proposal from president biden seeking to decrease the price of childcare and make it easier and more affordable. so i think there is a little bit of both going on here, and i think two-year point earlier, there is some truism to the fact that this is just one jobs report and we are going to have to see what the next month looks like. we are not going to be seeing any sort of big legislative proposal from congress soon, so all of those jobs reports are going to be playing into the washington rhetoric. tom: is there any kind of cogent plan on cyber? i don't observe one. is there any theme, theory, bipartisan agreement on cyber? emily: there is a bipartisan

push to get something done on cyber. both democrats and republicans realize that hacks like the one we have seen on the colonial pipeline, and a number of others over recent years, are a huge issue. the question is what can be done. when congress tried to do legislation in 2012, it got really strong pushback from lobbyists, saying the things that congress wanted to implement would be to extensive -- would be too expensive for businesses to do. another big question, what can be done through the infrastructure package? president biden's plan does not specifically mention cyber security, but we have already heard from lawmakers that sit on committees like yvette clarke , working on getting cyber security measures into that and for structure plan. jonathan: emily, thank you. emily wilkins, bloomberg government reporter in d.c. marty schenker mentioned the same thing on that

infrastructure package. maybe that will be part of the conversation this coming wednesday. tom: we will have to see. i am going to go back to that banner, for those of you on radio, i put up to two digits how conor lamb barely won the rejiggered congressional seat. we are really becoming completely political, maybe the advent of the primary season for republicans and democrats. jonathan: what aspect of the we can do you think became more political? tom: i think it is just the reality of how close it is, how it is president biden and everybody else is essentially equal stasis, whether it is the house -- we saw the two house districts taken away two weeks ago, and that changes the math. jonathan: we are doing big things on slim margins, and i think there's belief that there will be some pushback in washington. coming up, ben emmons, medley global advisors managing

director of equity strategy. we advanced 0.1%. yields, 1.5 770%. good morning. alongside tom keene, i'm jonathan ferro. heard on bloomberg radio, seen on bloomberg tv, the -- this is "bloomberg surveillance." ♪

♪ jonathan: from new york city for our audience worldwide, this is "bloomberg surveillance," live on bloomberg tv and radio. your equity markets, 4229 on your s&p, up about 0.1%. a little softer on the nasdaq, down by about 0.3%. switch up the board and get to the bond market. we will discuss the commodity market in just a moment. romaine is going to run you through some of the mining stories. absolutely surging. relative of the consensus view in this market post payrolls that we don't have a demand problem. what we have is a supply shortage. in the bond market, that meant a gap lower on the 10 year yield to 1.46%, and then a rip back almost straightaway.

1.5790 percent is your tenure right now. the point of this is i complete my thought, and then you come back. tom: is that how we do it? jonathan: 14 basis points on the two-year. that tells you the story of a fed that is not going anywhere for a long time. tom: that's where i want to go. jonathan: i know. tom: 0.1429% is in itsy-bitsy move on the two-year, but that is a huge signal to jerome powell. jonathan: and chair powell is with you. why? you will like this. switch up the board. it is a chart, for those of you on radio. get back to 61.5. that's the goal. that doesn't get it done. there's more work to be done. tom: i thought there were some really good social economics over the weekend on women struggling to get back to the workforce. childcare is not the dominant

issue, but childcare is a real issue to what we saw on friday. jonathan: it is clearly a factor in the participation rate. you saw that friday. right now, your five-year chart of the employment to population ratio, i will tweak that out for you if you can't see it. it reads, 59.7. doesn't this work beautifully, this relationship? it is just wonderful, isn't it? when is lisa back, next monday? tom: why are we hermetically sealed? jonathan: i have no idea. you are fully vaccinated, i am, too. i think they know if we are in the same room, something is going to happen, especially if lisa is not here. tom: let's have romaine save us. romaine: good morning. let's talk about that commodity space because that is what everyone is talking about. tom: whoa, whoa, stop. romaine is channeling elon musk. continue.

romaine: i think he's referring to the way i'm dressed. what we have here is what is happening in the commodity space. you saw that 10% pop on iron ore. you saw copper continue past record highs today. not a whole lot of ways to play that in the u.s. freeport mike durham the biggest publicly traded -- freeport-mcmoran the biggest name in the u.s. of course, all the talk is about that colonial pipeline shut down, whether it is going to reopen, how long that lasts, and whether this persists to be a big dictator of where gas prices go. right now they are still on average, just below three dollars a gallon. there is some concern if this goes on for another two or three days, you could start to see the average creep up nationwide. if you are in california, you are already dealing with five dollars or six dollars a gallon. valero energy one of the

beneficiaries. i want to bring your attention to a couple of interesting downgrades that happened this morning. the first one is on facebook enough about. it was a duel down ash facebook and alphabet -- facebook and alphabet. it was a duel downgrade saying there's too much optimism out there. the analysts really just saying you have to peel back the layer's and say that the surge some of these companies have seen in that ad space was transitory, and that is not known to persist. tom: thank you for saying transitory. does it also have to do with the new apple software blocking of digital ads? romaine: it could be. analysts did not mention that, but we did to that big rollout, and if you have an iphone, you have already seen those alerts. interesting to see how advertisers deal with that. tom: thank you so much. "the close" this afternoon as well. let's go to ben emmons, medley global advisors come on the big

macro picture. i want to go back to jon after that. lots of good things to talk about here. what i saw is that we've got to get to june 16, the next fed meeting, without anything we ever learned in the textbooks. how original are the days to june 16 for this fed? none of this is in the books, right? ben: none of it is in the books. good morning. we are in a phase where we have to work out this massive wrinkle in this data currently. the jobs report friday was one of those examples. big expectations, comes out differently really because there's such a shift in the data from last year, so if you go into the june meeting, presumably it will affect members. clearly we are accelerating the economy, but i don't think you can use traditional monetary analysis here. you have to engage on what is this data really telling us, can we draw a line from one data point to another.

i think what you said on your show on friday was quite clear. basically, the jobs report vindicated their views. they have to see the data come in first before they can make an assessment to make except of policy. tom: i look at the new policy, and they are making it up as they go. what will you watch for in retail sales on friday? it is market data, about 70% of the american economy. ben: it is an important point because if you think about where we are with spending and income, you are looking at the metrics, even though there's a wrinkle in the data. we have essentially made back pre-covid levels on both fronts, and we have all of the savings on the sideline, so it translates into this view that retail sales will be exploding, so to speak. there's this pent-up power to spend. but you also point out there is this gasoline price issue we are dealing with currently. it will be interesting to see

how the gas station sales are evolving from here because that could affect it negatively in that particular report on friday. jonathan: given what we saw friday, how sensitive or not do you think this market will be to incoming data in the weeks to come? ben: there is still sensitivity because if you think about what happened friday with all this anticipation, the reaction was interesting, how it responded positively to a big miss in payroll expectations. so i think there's other data points. the market wants to draw a line between strong data points and say this is really progress, so i think this is the ongoing trial and error every day to try and figure out where is the economy precisely from a year ago because we made a lot back, but have we made it all back? it looks to me like we are in the economy where we are going

to hit probably back to pre-covid trends by this summer, really because with the stimulus we put in the system, it has been that affect of spending income to pre-covid levels. jonathan: do you think the data is for castable in the coming months -- is forecastable in the coming months or so? we all see strong demand. we seem to have terrible difficulty understanding whether supply can meet it. reporter: -- supply can meet it. ben: that is true. i run a little model on just the leisure components for payrolls reports against payroll trends and ism. a 400,000 jobs gain for leisure them out on friday, so i thought, great. but if you think about the other data points, you need to deal with distortions. so i think the forecast itself, partly i think there's a hope

and expectation there of what this next big number could be, but it is maybe more rational economists who say we've got to think of real trends here. is the trend back to the trend of 2019, yes or no? and forecast it that way. i think for markets and portfolio managers, they just look at the data points to try to age the best case -- try to gauge the best case ultimately. i think the bond market is the best way to say. the bond market is cooling off because of these particular shortages. jonathan: ben emmons of medley global advisors, if you get a data point you don't understand, you talk about the three-month average. tom: that is way more true than anybody wants to admit. there's a real validity particularly with inventories to look at three months moving averages. on the david kostin note,

it was all over wall street. it wasn't the revenue chit chat, it wasn't even the free cash flow chit chat. david went much more to where i was off of amazon's earnings of the investment these faang's are putting into america. they sum it at $250 billion in 12 months. jonathan: they are doubling down and securing their dominance. that has been the story over the last 12 months. those have been the companies with the money due to it. tom: and there is a difference in share buyback and non-share buyback and dividend. but this is a social issue. you wonder, it's got to become a political issue almost like standard oil of another time and place. jonathan: it already is in a massive way. look at the data. tomorrow, cpi coming up in

wednesday. retail sales friday. where is your focus? tom: my focus is citigroup published moments ago, saying core cpi really matters. which inflation data should we look at? jonathan: if it is what the fed is going to do or not do, it is pce. if it is cpi, at the moment, here's the estimate. 3.6% year on year. strip out food and energy, year on year is 2.3%. that is a big move lower, isn't it? tom: it doesn't work on radio, but i my doing a good elon musk here? jonathan: can you ask to be what elon is? tom: he went with a bowtie look like romaine had and i have. jonathan: do you think he was inspired by you? tom: i don't think so. jonathan: why don't we call it doggy coin? why is it doge? tom: i don't know, but is it

just a project. that dog -- bit dog, $58,000. jonathan: yields, 1.58% on tens. your equity market, 422 seven. unchanged on the s&p 500. the price action elsewhere. we will talk about that a new moment. on radio, on tv, this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. a cyber attack but the largest oil pipeline in the u.s. out of action. colonial pipeline still hasn't come up with a timeline for restarting operations. fuel suppliers are concerned there could be a shortage of gasoline and diesel across the eastern u.s.. president biden is preparing for his first face-to-face meeting with publican leaders mitch mcconnell and kevin mccarthy as republicans are ramping up their opposition to the president's

for trillion dollar economic plan. there is not much expectation for a breakthrough at the meeting. last week, mcconnell said he is 100% focused on blocking bidens agenda. in jerusalem, weeks of violence threatened to escalate on the day israel celebrates its control over the consisted -- the contested city. at least 50 palestinians were hospitalized. israel is marking the anniversary of the day in 1967 captured jerusalem's eastern sector from jordan. in the u.k., labour party leader keir starmer has revamped his team of ministers and waiting following disastrous election results. the main opposition party lost key battleground to prime minister boris johnson's ruling conservatives. starmer says labour must be the party that embraces the demand for change. the use of doge coin has reached new highs, now used to pay for a satellite launch. spacex will embark on a journey to the moon next year carrying a

mini satellite that has been paid for in doge coin. no word on what that satellite will cost. 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. ♪

♪ >> what is doge coin? >> it started as a joke based on

an internet meme, but now it's taken off in a very real way. >> so it's real? >> it's real. >> so what is doge coin? >> it's an unstoppable financial vehicle it's going to take over the world. >> but what is it, man? >> i keep telling you, it is a cryptocurrency you can trade for conventional money. >> so it's a hassle. >> yeah, it's a hussle. >> why didn't you say that, man? jonathan: elon musk on "saturday night live." alongside tom keene, i'm jonathan ferro. lisa will be back with us next monday. on the s&p 500, s&p futures 4227 , up not even 0.1%. what a round-trip we saw and friday's session. in the fx market, euro-dollar $1.2165. sterling through $1.41.

in the commodity market, just briefly, crude $65.50, up almost 1%. tom: what we see in foreign exchange, we will get to that any moment. mike mcglone joins us, bloomberg intelligence come on i guess the commodity because it is like a currency under the bloomberg terminal area bitcoin, $58,300. doge coin is not on the terminal, right? mike: not yet. it's a joke. but it is now the number four cryptocurrency, so to get to the next level, it has to make a peak. it has probably somewhat peaked. tom: musk having his moment, doing the celebrity thing. how many people will be damaged by this? somebody has got to lose in these transactions, right? mike: when it goes down. it is a matter of time. tom: what's funny about this?

mike: well, it is not funny when people lose money, but most people are taking it like, yeah, i met lose 1000 bucks, but to me, that's what is. people are treating it more like a gambling stock. it is just fun. jonathan: forgive me for ending the fun right now because we have to lean on you for your expertise in other parts of the commodity market. what is happening with gasoline? what did we learn over the weekend about this colonial pipeline shut down, knocked off-line? mike: in a way, it is a good thing because we are seeing small tech -- small attacks, but this is just making us stronger. now we know this is potentially a problem, that there's nefarious entities out there that want to attack our infrastructure. the key way to look at it, what does it do for supply and demand to crude oil? nothing. in fact, because prices will spike in the short term, it is going to reduce demand. to me this is also an indication

, and people say i don't have to drive to work today. i can work from home. to me, the big picture is worth talking about maturely and -- about petroleum versus building materials. i expected to continue to underperform because we have more of it and we don't need it as much anymore. jonathan: is the supply response a little bit more nimble in the market? mike: that is a key thing. supply elasticity in crude oil and things like corn is definitely on the rise, yet demand isn't. i don't know why people don't expect shale do not come back. you look at the average cost of crude oil 2019 was at $67, now it is at $63 and it can make money. tom: this is why we love to have you on, rather than elon musk. i was writing a banner for us on the elasticity of gasoline because you are a pro, and we know you know what you're talking about. what is the elasticity for the politicians of five dollars a barrel?

jon, i remember sitting at a bar in los angeles -- [laughter] jonathan: i love how you're laughing because every story involves a bar somewhere. tom: the first time i saw three dollars a gallon. are we going to see new highs that become a political maelstrom? mike: unlikely, but it brought back memories of 2008. irene per gallon gasoline went up about four dollars, and right after that, everything collapsed. that was near the peak. tom: because price went up, demand went down? mike: exactly. now, i was going to drive to work today, i will work from home. i can't get gas today, it doesn't matter. i can just plug in and my bed. but we had that spike in crude oil and everything collapsed. for me, metals are probably the place to be, but they need a higher stock market. the stock market starts going down, whole thing just collapses. jonathan: let's build on that they are. what is speculative about what we are seeing, and what is just demand and supply clearing its spot?

where do you look for the speculative activity? mike: i am seeing speculative excess in grains and in crude oil because people are thinking a commodity super cycle, invest in crude oil. we look at something going away, the best place to invest in the long-term is metals. copper, aluminum, nickel, zinc, gold, silver, platinum, palladium. you can't invest in iron ore because there's no liquid futures. jonathan: the cycle i struggle with at the moment is china participation in it. the other thing i struggle with, let's get it all out there right now, traditionally getting a cyclical read from things like copper, now i am wondering whether what i am seeing is just part of the energy transition. can you help fill in some of the gaps? mike: exactly what is happening. we are per tracing -- we are replacing petroleum with energy and technology. the key thing is it has set the highest correlation ever to the stock market. tom: you are going to take the commodity move right now to a

multi-decade shift in how we consume energy? mike: absolutely. 1/5 of automobiles now in china are ev's. average ev's are going to be lower cost than average cost internal combustion. this is just normal economics, without all of these incentives. now we have this major push from the new biden adminstration that is going to accelerate these trends that were in place before. liquid fuel production -- or consumption in this country is exactly the same at 20 million barrels that it was 20 years ago, before ev's really took off. it is the efficiency that is kicking in. jonathan: did you see jon ferro in a vw rabbit? [laughter] carl weinberg is watching. dr. weinberg says blue-collar workers can't work from home. bill dudley told me that decades ago at goldman sachs. jonathan: mike, thank you. mike mcglone of bloomberg intelligence.

that final point is a worthy one. can we also tell the audience that you and i don't drive? neither of us have a drivers license. i think some people know that already. tom: there is a zip code centered thing here. jonathan: it is very much a city where you don't need to drive. tom: but we forget, it is a big nation. with four dollars, five dollars a gallon, it is going to be a political issue. jonathan: what do you make of the energy transition issue, that we are taking a cyclical signal from some of these commodity markets in a way that has maybe been distorted now? tom: i am going to listen to guys like currie and the rest. i want to hear what dan juergen says on my book of the year last year, "the new era." jonathan: from new york city this morning, good morning. alongside tom keene, i'm jonathan ferro. tom: did we cover man city-chelsea? jonathan: we haven't done that. did you watch some of that? tom: no i did not.

jonathan: chelsea turning things around. tom: yeah, they are. jonathan: he was clearly not a very good manager, was he? i love your assessment. tom: he would be perfect for the tots. jonathan: he would be great on this show, too. [laughter]

♪ >> people are way too optimistic. i think people saw demand and said supply -- and it didn't. >> it could be a very wild summer. >> not one single to port -- single report is going to change the fed projections. >> you don't want to start tightening monetary policy and then find out later that when you try to battle inflation for so long, you jumped the gun. >> the data is important, but it is the data in august, september which we can say the reopening is behind us. >> this is "bloomberg

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