>> the global economy is being driven by u.s. exit from covid restrictions. >> no, we are not done with the adjustment to a shock. big shock down, big shock up. >> people don't like inflation, that is true. but they will tolerate it to a moderate level. >> it is very difficult to take a wage increase away, so i do think wage growth could be on the way. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: from new york city for our audience worldwide, good morning. this is "bloomberg surveillance ," live on tv and radio. alongside lisa abramowicz, i'm jonathan ferro. tom keene back with us tomorrow. the s&p down a couple of tenths

of 1%. bloomberg news and the team, led by ed hammond, coming out with a story over the weekend that really got everybody scrambling. discovery in talks with at&t for some media assets. let's be clear here, some media assets but for $85 billion three years ago over at at&t, and warner media could be spun off. lisa: michael nathanson basically said this was a mess that needed to be cleaned up, and this was a late -- this was a way to clean it up. it is fascinating how this leads to the bigger stories in the streaming world post-pandemic. how much will the pandemic reality be the norm going ahead, and how much does the content drive devalue value if you have enough of it? jonathan: moffettnathanson and the team were on earlier. comcast, viacomcbs, and disney could all be interested, while at&t on comcast would be the most likely buyers.

so maybe in many ways, maybe people thinking this could be the beginning. lisa: using your cash, not just holding it on your balance sheet. people want to see where companies deploy their cash. you are saying a record pace of share buybacks. you wonder how much is actually going to go into capital expenditures, and to employee training and some of these other virtuous cycle investments a lot of people are waiting for. jonathan: if at&t get a good chunk of change, maybe some of it does go into buybacks. the amount of debt these companies are carrying are you monk us. lisa: the telecom -- are humongous. lisa: the telecom companies need cash to invest in 5g. if -- in order to stay on top of current technology, they need the money. jonathan: really interesting. people recovering from this 12 months of being told to stay at home, looking around and looking

at their bills and saying, do i need that one? do i need that one? a lot of people brought forward demand for these products through the last 12 months, and maybe there is some payback coming for that. lisa: do you think there is screen fatigue? people just staying at home. jonathan: they are fed up. i think over the last couple of years, it was all about cutting cable because you saved money. now i've got all these different offerings for $10, $15, $20 apiece, and it is starting to add up. once i start to go out again and i am watching much less tv, and i barely watch tv anyway, with the exception of news and sports of course -- [laughter] i'm looking around thinking, do i need x, y, and become a nation of these two or three? lisa: it is a pretty rich idea for us to be talking about this, but it will be an ongoing set of ration. this may be the only way to clean the mess. jonathan: i listen to bloomberg every day, all day. [laughter]

we are down 15 on the s&p. a weekly loss last week, and we dig a little more weight off the s&p 500 this morning. in the bond market, yields 1.6284%. slap bang on the average since we topped out at 1.74%. since the beginning of april, your average on the u.s. tenure is basically 1.62%. that is where we are right now. lisa: it is fascinating that equities are responding more to the potential increase in inflation then even bonds. i wonder how much this is influenced by fed purchases, the fact that they own so many of them, but still, i feel at this is going to be an ongoing theme that risk assets respond more directly to inflation expectations then some of the assets that more directly in -- more directly reflected. at 8:30 a.m., we get u.s. may manufacturing data. how much are we going to see in the patient's that supply short -- see indications that supply

shortages continue even into the end of next year? also we are getting some manufacturing on the housing side. the homebuilder sentiment index data, the idea of tight supply there. at 10:00 a.m., vice chair richard clarida die will be highlighting the atlanta fed conference. how much will he be talking about transitory, and how much will he indicate that the fed is looking at tapering possibly at the jackson hole symposium in august? at 1:00 p.m., joe biden will be delivering remarks for the covid-19 respond. i'm curious to what he says about mandatory vaccines at schools. how much will that become part of the discussion? how much will he talk about the new cdc guidelines that have

been some uncontroversial in certain quarters for not being strict enough, and frankly, for not being loose enough another quarters, and coming up soon enough? the importance of being realistic in terms of what people can and cannot do. jonathan: can you imagine playing that drinking game this morning, the transitory? lisa: i think they are already on the couch. jonathan: i imagine it would be absolutely amazing. can you imagine if we were allowed to actually play it? i think tk has played it before work most mornings. lisa: you buy, i'll play. jonathan: sebastien page joining us now, to reprice head of global multi-assets. we are bullish on the economy, cautious on stocks, longer recovery trade within stocks. how do we reconcile these views? sebastien: it is hard not to be bullish on the economy. we have peak reopening effects right now. the number i keep coming back

$1.6 trillion in excess savings, which is 22 years of accumulated excess savings in one year in 2020. meanwhile, you now have half the population that has received at least one dose of the vaccine, so this has to translate into pent-up demand. so we are bullish on the economy. the problem is that everybody else is bullish on the economy, and the stock market, if you look at the price earnings ratio in isolation, it is in the 99th percentile. jonathan: i've got to talk about the stock market because i've got some headlines. at&t confirming the deal with discovery to merge the media assets. at&t would get $43 billion in the discovery deal, subject to adjustment in a combination. the headlines continuing to pour out. at&t holders would get stock representing 71% of the new company, and largely assumed,

but now confirmed, the discovery ceo would lead the new company. lisa: just to give you some sense of how the market has responded to this, discovery shares in premarket trading go even higher. they are now up 17%, just give you a sense of how much of a boon people think this is to discovery, giving them a chance to really compete with behemoths like disney with disney+, as well as netflix. jonathan: 43 billion dollars for at&t, 71% of the new company would go to at&t shareholders. discovery holders would get 29%. the current ceo of discovery said to be leading the combined company or get so at&t would get $43 billion in an all stock deal with discovery. richard greenfield just published moments ago on this, and the headline was "asked live -- was "zaslaf conquers the throne." lisa: if you look at the at&t

shares, they are up 4.5% in premarket trading. yes, less than the 17% in discovery, but what it indicates to me is going back to what michael nathanson said. this was a mess, the fact that at&t is getting rid of it is good. the fact that discovery could potential benefit is even better, at least for them. jonathan: sebastien page, i respect that you won't be able to talk about the details of the steel or the individual components that make it up, but for you, from where you are sitting right now, the media business, does that interest you at the moment? reporter: sebastien: you've had -- sebastien: you've had huge changes in the media business in 12 to 18 months, and especially through the pandemic, you were just talking about streaming and digitization of entertainment. these changes are here to stay, so it will create winners and losers. you were also seeing you have three or four services and it is starting to feel like a lot. i feel the same. when you keep signing up when

you are stuck at home, at some point you rationalize that. i think we had structural changes through covid in the media business across the board, and you are bound to see some m&a like this, and those changes are here to stay. it is kind of like the inflation discussion. you get peak change, and then you settle to a new level of digitization, streaming and so on that is higher than it was before. lisa: you are talking about the mergers and acquisition activity we are likely to see ongoing throughout the year, especially given the cash piles that companies have. is this a good use of that cash? as an investor, do generally like to see this at this point in the cycle? sebastien: there's a long history of m&a activity that was not successful across industries. those fields aren't always successful. they are always huge promises of cost-cutting and huge promises of efficiencies, but they are not always realized. so really, we have a lot of

talented stock pickers, and it becomes a security selection. you look at every deal in isolation. it is like we are looking at investing in value these days. it is the revenge of the stock pickers, if you will. so i don't think you want to make broad statements on whether it is a good use of cash or not. it really depends on the deal. the bottom line is that there is a lot of cash in the economy, a lot of cash on balance sheets, and this will get deployed one way or the other. jonathan: we've got to run. apologies for the interruption. sebastien page of t. rowe price. this was the interruption and will be a top story through the morning on bloomberg tv and bloomberg radio. at&t confirming a deal with was covering -- with discovery to merge media assets. at&t would get $43 billion in the deal, 17 1% of the new company going to at&t holders. discovery holders would own 29%.

the stock price up by 3.5% on at&t. discovery surging by 17% in early trading. from new york city this morning, good morning. more still to come. alongside lisa abramowicz, i'm jonathan ferro. this is bloomberg surveillance. ♪ ritika: with the first word news, i'm ritika gupta. israel has stepped up attacks on high-ranking movement within the gaza strip. israel says it attacked terrorist infrastructure. meanwhile, hamas continues to fire rockets at areas of israel. others have called for an end to the violence. prime minister benjamin netanyahu says action will continue as long as necessary. the european union has reached a truce with the u.s. over metal tariffs.

the result, iconic products such as harley davidson cycles won't have tariffs doubled month. the dispute began in 2018, when former president trump imposed duties on steel and aluminum from europe, asia, and elsewhere. the eu retaliated. now the two sides have agreed to discuss the metals issue. chances of president biden getting in and for such a bill through congress with support from both parties are rising. early today, senate republicans are set to deliver a revised offer that includes roads, public transportation, and airports. still, disagreement over how the legislation will be paid for could kill any deal. more revelations coming out in the wake of bill gates' impe nding divorce. microsoft conducted an investigation on gates' involvemen was an employeet --

involvement with an employee two weeks ago -- two years ago -- two decades ago. 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 are seeing the clash between a surgeon demand -- a

surge in demand and some of the supply issues we are seeing, and coupled with that is the fact that the year-over-year numbers are really incorporating those very low inflation reads we've had last year. as those come out of the numbers, we will see that going up. jonathan: always great to hear from loretta mester, the federal reserve bank of cleveland president. good morning. alongside lisa abramowicz, i'm jonathan ferro. tom keene back with us tomorrow. here's the equity market. 4156 on the s&p 500, down 0.3%. your bond market unchanged at 1.63%. here's the story this morning. at&t, discovery confirming the merger of media assets. at&t up 4.5%, discovery up 17%, and just getting detail on the numbers in the last 10 minutes as well. at&t would get $43 billion in the deal with discovery.

understand we have a news conference coming up in about 12 minutes. lisa: what i find interesting is they find the deal creating cost synergies. does that mean cuts in jobs? does that mean they are going to be able to reduce overhead that somehow doesn't lead to job cuts? and is that enough to justify the deal? these are the questions people will be having. if tom jonathan: jonathan: was here this morning -- will be having. jonathan: if tom was here this morning, he would be pushing back against the word synergies because it often means job cuts. lisa: where would they be cutting jobs? because there isn't that much overlap, theoretically. jonathan: here's some other headlines elsewhere. from hong kong, hong kong and singapore have been trying to put together some kind of travel bubble for a long time now. hong kong's requires -- hong kong to require quarantine for singapore arrivals, classifying singapore as a high risk

destination. it is worth pointing out and reemphasizing, as you have done through the whole pandemic, the tolerance levels of places like singapore and hong kong are markedly different than places like young -- like london, new york, the u.k., and the united states. lisa: how are you going to reopen internationally at a time when covid-19 is being treated increasingly like the common cold or the flu, and it is not going anywhere? what will it take to move beyond that? frankly, it is hard to see at this point given the vaccination rates and efficacy rates we have seen in certain select vaccinations. jonathan: some of the big headlines crossing the bloomberg, hong kong classifying singapore as a high-risk virus destination, requiring a 21 day quarantine for arrivals from singapore. let's turn to washington, d.c. emily wilkins joins us from bloomberg government. we spent the first hour, hour and 20 minutes of this program talking about the big business stories. let's talk about a big global

story over the weekend, the tension between israel and hamas. emily: president biden reached out to leaders in both areas over the weekend, speaking with prime minister benjamin netanyahu and the hamas leader. he called for peace. president biden has continued to hold the line of saying israel has the right to defend itself, and he has come under more pressure from within his own party. lawmakers, particularly progressive lawmakers, siding with the palestinians, saying that these attacks on them have racist and undemocratic undertones to them. so as long as this conflict continues, president biden is going to continue to be under pressure to come out more strongly against israel and against netanyahu, who has been a very close ally for the u.s. for a long time now. jonathan: we all saw the video of the particular building that

had the ap offices that was demolished, ultimately struck by a rocket. it is not the place for assumptions this morning, so i would love the details if you've got area what happened? emily: from our understanding, what happened is that israel had information that hamas had offices there, that they did intelligence work, that they were using that building as an operational base, and that building also happened to contain the offices of ap and al jazeera. israel also noted they did give individuals in the building time to evacuate, that there were no civilian casualties due to the bombing of that building. of course, we have also heard from the ap who said we have been in this building for 15 years. we don't have any sign that there was hamas operating out of this building, so there was some confusion and debate around that. netanyahu said they shared intelligence showing hamas was in the building with the u.s. this is all developing this weekend as we see the fighting continued to intensify.

lisa: we have seen a theme that the biden adminstration has been reuniting the u.s. with its allies, at least when it comes to international strategy. do we have a sense of what president biden has had in terms of communication with other leaders in how they unify approaches to the situation? emily: the u.s. has been working with other players in the area to try to bring about a cease-fire, but the u.s. has also recently come under condemnation. it is part of the united nations security council. the security council has met three times on the conflict, and they have yet to put out a joint statement because the u.s. has not agreed to it. it has to be unanimous. you start to see other countries at the u.n., including the chinese official, begin to criticize the u.s. for holding up progress here in calling for peace in the middle east area. lisa: other than a proclamation, what are the potential implications? what could the u.s. potentially do with respect to taking action in a situation in the middle

east that could be a likely outcome of the fighting we have seen? emily: there is a lot president biden can redo to reverse some of the policies implement it under former president trump. one thing that happened that the president trump is that there was no longer any foreign aid given to palestinians. president biden has reinstated that. i think a lot of this is also going to see what congress wants of doing this week. they didn't really act on this issue a lot in the previous week , but they are still in town and there is a sense that maybe they could wind up doing something as far as funding goes, or even having some sort of resolution coming out and firmly stating where the u.s. congress is at this point. jonathan: the president's first trip, first overseas trip, is next month to europe. as things stand right now, where is the emphasis of that trip? emily: i think the emphasis is on rebuilding those allies,

strengthen connections with countries abroad, particularly after president trump pulled back on a number of them. so president biden is hoping to increase his allies in europe, and that way you can better take on countries such as china, who he sees as a bigger threat. jonathan: emily wilkins of bloomberg government, thank you. of course, a little earlier this morning, the headline, the eu and the u.s. announcing a temporary tariffs truce in the metals dispute. lisa: with this whole issue, just going back to the issue within the middle east, highlights to me some of the fissures within the democratic party. the fact that some within the biden adminstration are pushing back on the fact that he hasn't acted quickly enough, and it raises the conundrum of how much the fiscal plan that he announced to get past given some of these limitations on consensus. jonathan: some of the stories in d.c. as this administration faces its first big foreign policy test. from new york city this morning, good morning. alongside lisa abramowicz, i'm

jonathan ferro. your s&p 500 at 4151, down 0.4% now. yields creeping a little but higher, 1.63 52%. discovery absolutely flying in a deal with at&t. this is bloomberg. ♪ loomberg. ♪

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♪ tom: waking up -- jonathan: waking up monday morning with a little bit of deal flow. from new york, this is "bloomberg surveillance," live on tv and radio. the s&p 500 coming off the back of a week of losses. we take more weight off the s&p, down 0.4%. it is a struggle. some tension between how we want the world to be versus how it is. some tension. i've called it a duration mismatch between vaccine fuel desires and just basic mechanics of getting supply to meet them. maybe that's why we have seen downside surprises to output and upside surprises to inflation, reflecting that supply-demand mismatch right now. in the bond market, it has meant one thing, a volatile move through last week. back down to basically the average of the last couple of

months. since we closed at 1.74% on the u.s. 10 year come on a closing basis, your low has been 1.54% and your average has been 1.62%. yields this morning just inching a little but higher on 30's to 2.3459%. use the word inching on treasuries. i will not use that for italy. the italian bond market, the german bond market, yields have been creeping higher in germany back towards zero. we are negative about 11 basis points on the 10 year, and only session, up a couple of basis points today. in italy, we are climbing for a 5th street session. now we are through -- a 5th street seven -- fifth straight session. that is where i would be focused go into the ecb meeting, and italian 10 year at 1.1 37%. that's the cross asset story.

stateside, only one story this morning, romaine bostick. we've got a deal. romaine: at&t, discovery, the folks at warner media want an ipo on their stream platform. you go back to the old ted turner days in the 1990's, you had the big ale ale do you -- the big aol deal at the turn of the century. had the bidding war of rupert murdoch trying to gain control of this. then the purchase of these media assets by at&t in 2017. a new ceo in 2020, taking a look at that and saying if you are not number one or number two in an industry, get out. right now, they were not even number three, barely even number four. in fact, the wireless business at at&t was slipping from the top position down to the number three position. they had a big decision. do you focus on one thing, wireless and 5g, or try to maintain the sort of combination of all of these different assets? the solution, get rid of warner media, spin it off into a new

company. the head of discovery media is going to be heading this company when it is all done. discovery shares halted. they were up about 17% in the premarket, set to reopen around 7:40, i'm told. at&t shares higher by about 4%. viacomcbs, a lot of speculation about where that is going to go, up about 3% in the premarket. we should also point out viacom shares getting a bit of a boost off the latest 13f filings that showed a few big funds taking a big steak. another story out there today, crypto. we had all of the rumblings over the weekend, a one-word tweet by elon musk upending the market, down about 10% on the major coins over the weekend. tesla down by about 1.6 percent. a lot of the concern is less about what this means for crypto coins themselves and really the idea that a lot of company's have started to put this thing on their balance sheet. the idea of whether they are as committed to it is some of -- as some others seem to make out.

microstrategy seems to be the most committed of all. we will keep an eye on this. square and a few other names in this space down in the premarket. jonathan: before you go, can we talk about media assets in america? from a personal perspective, have we got too many streaming services now? romaine: yes, absolutely. jonathan: most people are in the business to take one away. romaine: i think a lot of us amassed a lot of streaming services. we pretty much got them all on our tv set now, along with the monthly costs there. people are strange look at this and say maybe you have disney plus. do you really need all of these other things? it will be interesting to see if some of the things get consolidated. i think i thought once that that was some thing like there's 80 different streaming services out there, including bloomberg media.

deftly don't grid rid of that. jonathan:jonathan: i also -- differently don't get rid of that. jonathan: i also know the bostick household doesn't watch tv. i saw what you are doing over the weekend, a bit of final. -- witt of vinyl -- bit of vinyl. i like that. romaine bostick just mentioned that george soros bought into some of these assets which they were stocks previously owned by bill hwang a couple of months ago, when archegos blew up. if he could have held on a couple more months, he would be having a good morning this morning. lisa: he would, but he didn't. this is the problem with leverage, with having yourself where you don't have the flex ability to hold on, even if you have belief in a company. that is basically what we saw with bill wang. jonathan: discovery flying this morning. joining us now is vince reinhardt, mellon chief economist. it is difficult to get a read on

this economy and come up with what happens next. let's start there, how difficult it is to forecast at the moment. vincent: inflection points are terrible. we are definitely on the upside of the v for activity, to the point that we have to worry about technical matters and things that macro economists usually wave their hands over. importantly, bottlenecks. just go back to friday's data in the u.s. industrial production good, but little is appointing because of next the auto industry. then we get the michigan inflation expectations survey with the eye-popping increase in the one year ahead inflation expectations. five year ahead, 3.1%. that sounds to me above the federal reserve goal. jonathan: we have higher prices. the question some people are asking, you have any some

thievery the argument that higher prices now lay the foundations for higher prices in the future? vincent: i think that is the risk. the fed that's that the base effect and bottlenecks will be a temporary increase in prices, but it doesn't change trend. the thing you should worry about is the increases of prices in goods and services that are very saly into households -- very salient to households. just thing about filling up a tank of gas or a new car coming in. those price increases may lead them to increase inflation expectations, and increases in inflation expectations, to use the fed's favorite phrase, anchors inflation. so if expectations go up, we will get a reentering of something above the fed's goal. lisa: just to see how this could

play out, it leads to people demanding more in wages were holding out for a higher salary because otherwise, they cannot afford the basic staples that they go out and buy every day. how much is that what is happening? people say there's people on the lowest tier of income that get hit the hardest when you get this kind of inflation. is that still true this time around, given some of the price increases, the wage increases we have seen, particularly on the lower end of the scale? vincent: generally, inflation is thought to be a very regressive. that was the lesson in the 1970's because with more income and more wealth can figure out ways to shield their assets from inflation effects, and they probably have more pricing power to reset their own wages and salaries. not so at the lower end of the income spectrum because low income people also just don't have a whole lot of wealth. so inflation is pretty

pernicious in that regard, and has it changed? not really. income inequality has only gotten worse, so what would think -- so one would think that the rising part has even more of a need to shield themselves from inflation. so in fact, inflation is going to be eating into the real wages of low income household. lisa: is inflation going to lead to this sort of virtuous cycle where people spend more of their money since it is probably going to be worth more now in goods and services then later? or is it going to lead to a dampening effect on the economy like what we are seeing in the housing market, where you are seeing the actual sales slowed due to the high prices? vincent: those high prices probably reflect the inability to actually get all those goods. think about the empty auto lots that are slowing car production, and outright decline last month, because they can't the chips,

and auto sales, but also seeing price increases for used cars. that is the bottleneck effect. there's two other effects. one is timing. as you say, if you think prices are going to be higher next month, you want to buy the good or service this month. households have a lot of wherewithal to spend, so what that may mean is the boom part of our rebound is even more vigorous. the last effect is the more permanent one, which is people just spend resources trying to avoid the effects of inflation. that is, as economists say, a deadweight loss. jonathan: always good to catch up with you on the story of the moment. vince reinhart, thank you. discovery is up my more than -- up by more than 18% as they come to agreement for the media assets of at&t. there will be a merger of the

two. there is a call right now, a conference call, a presentation from the at&t ceo and the discovery ceo. those comments continue to pour in. i talked about citi upgrading discovery to a buy from neutral. rosenblatt's securities set "this could put them shoulder to shoulder with netflix and disney+ seemingly overnight." tom: netflix shares -- lisa: netflix shares are down 1.1% in premarket, perhaps responding to this idea that they are going to be facing a behemoth competitor, although the -- although this does seem to be perceived as a win for at&t and discovery in the stock market. jonathan: a bigger win for discovery. [laughter] for those on radio, the share price up by almost 18%, at&t up by about 4.56%.

coming up in about 20 minutes, lisa hornby, schroeder investment head of u.s. multisector. alongside lisa abramowicz, i'm jonathan ferro. tom keene is going to be back tomorrow. finally, the band comes back together. futures down 0.4%. this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. at&t will get $43 billion under an agreement to merge its media assets with discovery. the deal creates a company with channels ranging from cnn and hbo to hd tv and the food network -- to hd tv and -- to hgtv and the food network. israel's prime minister benjamin netanyahu says he is not ready to let up on attacks against hamas in gaza. more than 200 people have been killed. the vast majority in gaza.

netanyahu says he will do whatever it takes to restore order. western and middle eastern leaders are trying to solve the crisis, but have little to show for their effort. irish discount airline ryanair posted a record loss in the latest fiscal year, but the carrier says it is likely to break even year. the reason, lockdown wary travelers who can't wait to go on holiday this summer. >> most european countries are predicting that they will going to get most people with the first dose by the end of june, so we think we are looking at a very strong july and august. the booking trends will increase ahead of that. ritika: it is another step towards getting back to normal for jp morgan. the nation's largest bank is reopening to employees across the u.s. today, part of its plan

to call back entire u.s. workforce on rotations in july. the bank reopening will probably be closely watched by other big financial firms which may then adjust their own plans. 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. this is bloomberg. ♪

♪ >> it woul -- the demand is definitely there.

there's a huge pent-up demand for people to come and see family numbers they haven't been able to the meeting across this pandemic, people who want to go on holiday as well, so the demand is definitely there. now we are down to unwinding the restrictions to restart travel in the same way. jonathan: the demand is there. how many times have we heard that? the easyjet ceo. it is whether you can meet that demand with supply, and whether you are allowed to bring that supply back online because you are able to travel to those countries. let's go through some of the headlines right now from the u.k. we don't want people holidaying in amber list countries. we will translate that. we don't want people going on countries indications that aren't that's going on vacations -- going on vacations and countries that aren't on the green list. if you're on the amber list, you need to come back on quarantine. they are thing we don't want people holidaying on the amber list, and we can't yet make a definitive call on the june 21 reopening.

once again, this is not about demand. i got a ton of family and friends in the u.k. the demand is there. they want to move. they want to travel. it is whether they can or not. lisa: how do ceos arrange their inventory about this type of guidance? how do you prepare enough jets for enough people who want to fly and vacation in these countries if they don't know what the guidelines will be? it highlights the friction we see on an ongoing basis. jonathan: dave wilson is back from vacation, i'm happy to say, the bloomberg stocks editor. good morning, dave. dave: good morning, jon. i am here to talk about a comparison the global chief enough and strategist at bank of america made, touching all -- touching on the question of growth stocks versus value stocks. it was how he illustrated that was a bit different. he made a comparison between ark investment management's flagship

fund, arc innovation, and berkshire hathaway. he did the same in the 1990's going into 2000 and beyond with invesco, which managed a whole bunch of the highflying tech funds of the dotcom era, relative again to berkshire shares. so when you take a look at this comparison, it kind of shows you that history is at least to some extent repeating itself, which is really heart of the point. here we are, we had this highflying growth fund, cathie wood's flagship, and it has done really well over time, but not so well this year, or at least this past month. and berkshire does what it does. it sort of wads along, up about 7% this year, sort of consistent with the idea that we had this transition away from growth and toward value, and we have seen this story before.

it is really a matter of focusing on company specific examples as opposed to, say, growth versus value indexes. tom: the spread absolutely huge -- jonathan: the spread absolutely huge through this year. i think that is where it will come from, where we are positioned. a wilson, -- dave wilson, thank you. the number of times that the warner media ceo has mentioned in the press release, dino how may times -- ceo has been mentioned in the press release, do you know how many times? zero. lisa: it is discovery very much in the drivers seat. jonathan: the $43 billion that at&t will receive, where will it go? and how big are the buybacks this year already? gina martin adams joins us from bloomberg intelligence, chief market strategist. can you walk us through the

buybacks? gina: this year is just a climb out of a hole created by 2020. we are just barely working our way off of 2020 lows. we did see companies start to announce new buybacks throughout the first quarter earnings season, but we've got a long way to go. just to get back to buybacks and the share sale through the s&p 500, we need to see about 50% growth in buybacks in 22 anyone. -- in 22 anyone -- in 2021. so we've got a long way to go. we are working our way back to a more normalized environment of cash deployment, but we are nowhere near where we were pre-pandemic, which is probably where we head ultimately over time. lisa: we are seeing companies increase share buybacks, increase dividends on a number of bases. we are seeing different ways of them giving money back to

shareholders, and yet stocks have been consistently more systems -- more sensitive to inflation expectations then even benchmark treasuries. what do you make of this? gina: i think stocks are naturally going to be sensitive to inflation expectations, but also they are going to appear more sensitive to inflation expectations than anything because of where we are in the cycle. we are at a point where you see natural rotation into cyclicals coming out of trough lows, coming trough of -- coming off of economic bases you typically start to see cyclicals leave. the cyclical leadership gives you a sense that the market is definitely more sensitive to inflation. at the same time, we had this incredibly anomalous situation develop over 2020 where defensive sort of interest rate sensitive inflation sensitive segments like the big cap tech stocks were leading, which is

somewhat odd in the first year of recovery, and it really reflected this more defensive uncertainty that was out there. there were certainly at this time last year no belief that inflation was going to accelerate, despite the fact that we were at our economic lows and starting to move higher. some of this is just a lagged response where we are seeing this rotation drive performance and getting a sense that the market is extremely sensitive to inflation. what really is happening is we are we inflating, and that is where the market sensitivity lies, and in some analyses -- in some anomalies that developed in 2020. lisa: what is your expectation in terms of the at&t and discovery deal being indicative of the incredible m&a wave we expect to see through the rest of the year? sam: i do think -- gina: i do think that m&a is one form of capital deployment we will continue to see.

companies want to see growth. want to buy growth, they want to create growth, and m&a is going to be a natural outlet for capital. jonathan: got to leave it there. gina martin adams, bloomberg intelligence chief strategist. that press conference ongoing between discovery and at&t. the warner media ceo's future to be determined. that is not a nice thing to wake up to, is it? lisa: to me, that means it is a nice way of saying -- jonathan: i don't think it is a nice way of saying anything. [applause] -- of saying anything. [laughter] lisa: if someone told me my job was to be determined, i would be polishing up my resume. just saying. jonathan: coming up, much more reaction to the deal this morning as at&t is looking to shed its media assets and put them together with discovery. that deal approved. futures, 4149 on the s&p. we are off by 0.5 percent.

yields unchanged on tens. alongside lisa abramowicz, i'm jonathan ferro. tom keene back with us tomorrow. live on radio, on tv, this is "bloomberg surveillance." ♪

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>> the global economy is being driven by u.s. exit from covid restrictions. >> no, we are not done with the adjustment to a shock. big shot down, big shock up. >> people don't like inflation, but they will tolerate it to a moderate level. >> it is very difficult to take wage growth away, so i think that could be stickier. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz.