>> we've never had a situation historically where the fed has not begun to normalize rates and there is an inflation concern in the market. >> i do worry that after a 2021 boom, we are going to slow perhaps more than people expected next year. >> people don't like inflation, this is true, but they will tolerate it. >> make no mistake, there is nothing supernatural about the u.s. economy. we have just given it a lot of extra adrenaline to run on with the fiscal stimulus. >> 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 tom keene and lisa abramowicz, i'm jonathan ferro. equity features down about 15 points on the s&p 500. a headline just crossing the bloomberg from the eu council,

which will lift restrictions for vaccinated travelers. there's the headline on the bloomberg. tom: this is just clumsy, and i don't mean that in a derogatory way. it is just in every vaccine rollout, you go through a process, and it is regional, it is geographic, it is cultural, and more than anything, it is about the fear of science. jonathan: will the u.s. reciprocate? this has moved very slowly. we are getting deeper into summer. the airlines have been nicely bid as part of the reopening trade. the big airlines need transatlantic travel back. tom: where is the international? i would suggest just in the last 10 days, there's a huge urgency. lisa: the question is, we don't know how all the vaccines are

working. for example, the mrna vaccines in the u.s. and u.k. are working very well, where others are used in other parts of the world that do not seem to be having the same efficacy rates. there's a fear of getting it wrong yet again, like how certain countries got it wrong with a lack of testing and like of travel bans at the very outset, and that is slowing down the reopening. jonathan: different regions moving at different speeds. your equity market shaping up as follows. the s&p 500 a break of 4100, down about 0.3%. in the bond market, yields unchanged. just a slightly stronger euro this thursday morning. lisa: people think and perhaps it has a bit more room to run, although this is a q. wee -- this is a key question. today, as you say, 90 minutes

away from u.s. initial jobless claims. still expected to show a downward trend, a gradually improving economy, although i've got to say, more than 400,000 initial jobless claims still at this phase of reopening, with this many job openings, it raises questions about what exactly we are looking at here and what this data does reflect. we will also be getting the philadelphia fed business outlook. the fed is optioning -- is auctioning off securities. this is interesting, the institutional demand for a hedge against inflation expectation. have we seen a peak in inflation expectations, a bubble in inflation expectations, or are people going to say we need this protection as we face a new regime of growth and restructuring in the economy? today we are going to be hearing from u.s. secretary of commerce gina raimondo, talking with a number of ceos at big tech companies about the chip shortage we have seen become

increasingly pervasive. frankly, the conversations out of the top chipmakers indicate this will carry on for a longer period of time. my question is how quickly could the u.s. act to bridge this gap to really increase production locally or overseas to make it so that cars and iphones and other devices have some stabilization in the leg time? -- in the leg time? jonathan: evan brown joining us, ubs asset management head of multi-asset strategy. what makes you decide to leave the reopening trade or not? evan: it is a great question. what we are seeing at this point is europe improving. we still have room to run on japan, asia and the like. not every country has gotten to where the u.s., where the u.k. is. so we may be at the peak

reopening story here in the u.s.. markets what have -- markets might have well priced that. but in others you haven't. tom: what this is is a wall of cash. the quick number in my head is 300 billion dollars. there's a ton of money laying around. that is what we know for certain. does it get deployed to quality or diffused to the market, different allocations and different assets? evan: there's plenty of money on the sidelines, but also we had a great run up. on an index level, it is going to be tricky from here. investors are increasingly going to have to look for individual opportunities and stocks, so that is where we see the money going. but overall i think it is going to digest the extreme neri gains

we have seen over the last year. lisa: if you think the reopening trade has been largely baked in in the united states, do you think this idea of reflation and inflation has been overpriced and markets? would you say it is a good time to add the ration to treasuries -- add duration to treasuries and go against the crowd saying that this is one of the riskier spots? evan: i think that is a great question. my basic view is that as much as inflation expectations have run up, we are near record highs in the index, there still has to be some risk premium in the rates market because we don't know, no one knows if these inflation pressures are going to prove more transitory or less transitory. we are going to be going through a few months of beta -- a few

months of data like the inflation data we saw in the last weeks. so we are going to have to price this uncertainty that inflation could surprise to the upside, so that is why we still think that inflation expectations remain elevated from here. jonathan: let's take an asset class and think about the reaction function of each individual central bank for the majors in g10 at the moment. do you think there is a decent framework for developing a view on the u.s. dollar? jonathan: i think so. what we have seen is pretty much every central bank except australia and the u.s. within the g10 begin a tapering process. the u.s., as we know, extraordinarily dovish. he bore getting excited about the minutes, but i don't read too much into it. as long as the fed is intentionally putting itself behind the curve, that should put weakening pressure on the

dollar. other countries that are seeing more of an acceleration in the growth pickup earlier cycle, and then regions that have begun tapering, interest rate differentials between the u.s. and much of the rest of the world should continue to compress. tom: i want to go nerd-o on your right now. it is math thursday. there's a bond-stock correlation which is most unique right now. liz and schwab -- liz ann sonders of schwab has really featured this in her work. the interest rate strategy does not work when correlations flip like this. what is going on in that space right now? evan: what we are actually seeing with the bond correlation to the s&p 500 is we have seen that turn from negative to positive very recently, so

inflation concerns, yields go up, u.s. growth gets hit. but the way we are positioned is quite procyclical. there is still a negative stock-bond correlation between cyclical stocks and value stocks , so we are still getting that protection there. we are super aware that if inflation shoots up from here, you are going to have an issue where bonds selloff and the broader equity indexes selloff as well. that is why we have to be creative with asset allocation hedge, be exposed to commodities, have some of that inflation protection, and in the less liquid space, just diversifying that portfolio beyond just 60-40. lisa: at a time when a lot of pensions are still looking for 7.5%, what kind of returns target you think is appropriate? evan: it is really tricky.

we've got your standard 60-40 over the next five years as earning 4.5%. and yes, it is very true that the expectations of a number of investors is different from what we think markets will experience given elevated valuations right now. so there's difficult ways to address this. it could be taking more risk, which obviously leads some people to be less comfortable. i do think one of the ways we address this if those institutional investors can reduce their need for liquidity and take on some of the liquidity risk premium, then diversifying into those alternatives is still probably going to get better returns in general from private assets here. jonathan: evan, got to leave it there. evan brown of ubs asset management, the head of multi-asset strategy. how many times have we heard

that when that the end, that if you need some pickup, you've got to go elsewhere into private markets? tom: that's the pressure right now. that's got its own traps as well , but this correlation idea is really important. jon, lisa and i all have different data screens. we all have our own personal way we look at the market through the bloomberg terminal. what i would say now is within the stasis, the word i used with francine a couple of hours ago, there is almost a jumble to the correlations on my screen right now. it is odd. jonathan: diversification the keyword here. just 60-40 offer you that right now? tom: no. lisa: at the moment, it doesn't. i am interested in the idea that increasing allocation to private markets could create more volatility in public markets because what do you sell when there's a bout of volatility or news? you sell what you can. that is what we see on an ongoing basis. jonathan: treasuries, liquidity,

the most liquid market. tom: it's a haiku. treasuries, liquidity. [laughter] jonathan: thank you. from new york, equities are down about 14 on the s&p, negative about 0.3%. on radio, on tv, this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. in iran, president hassan rouhani says world powers have agreed that economic sanctions on his country's oil and other industries would be lifted. they are trying to revise a troubled nuclear deal from 2015. rouhani says they have taken a major step. the u.s. and iran have been holding talks. israeli warplanes pounded houses, warehouses, and tunnels

in the gaza strip today, an attempt to consolidate gains ahead of what could be an eminent cease-fire, according to "the new york times." the two sides have been discussing a truce that would end israeli attacks on the palestinian militant infrastructure. in return, hamas would quit firing rockets at israeli cities. the democratic-controlled house has voted to create a commission to investigate the january 6 insurrection at the capitol. 35 republicans broke ranks with leadership to support that probe, but the legislation's state in the senate -- the legislation's fate in the senate is unknown. u.s. secretary of state antony blinken told his russian counterparts the u.s. once a more stable and predictable relationship with moscow. blinken met with russian foreign minister sergei lavrov in iceland. he raised a number of issues, including the syrian civil war

and the health of dissident alexi navalny. 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. ♪

>> i put a little over 50% being able to do it, but the president

doesn't want to wait. i don't blame him there. i think the next two weeks will probably be the critical time. jonathan: senator shelley moore capito there. alongside tom keene and lisa abramowicz, i'm jonathan ferro. counting you down to the opening bell, two hours and 12 minutes away, we declined 0.2%. obsession lows, just climbing back a little bit here. yields unchanged at 1.67% on tens. tom: the 10 year, to me it is newsworthy tick by tick, but we've gone 1.63% to 1.65 and -- to 1.67%. everyone is saying is dead out there, but i don't see a dead. look at the real yield right now. you may have to blow up the show tomorrow. jonathan: you didn't want to talk about the fact they are talking about talking about it. no interest at all. tom: i had some distractions. jonathan: want to talk to us

about doge, or just leave that there? tom: mike mckee has some doge in his wallet, next to his ve enemies dong -- his vietnamese dong. [laughter] jonathan: no. tom: it's true. jonathan: no. have a drink. that was wrong. carry-on. tom: it's a true story. mike mckee carries some via mise currency -- some vietnamese currency and is walloped, and is probably adding some doge to it. wendy benjaminson is esteemed with a lot of good perspective on where our government is. once again, you and i are far too young to remember 1948 or even 1967, but once again we have israel and palestine, and always a most interested democratic party is just a mess here.

what does the president do to corral the herd as he tries to get to a cease-fire? we -- wendy: i am not sure if he is trying to corral the herd or if the herd is trying to corral him on this. america's position is we are defending israel. they can do no wrong. the trouble is that the next generation of americans is coming up not seeing israel as a tiny little country surrounded by enemies, but one of the most powerful countries in the region with a very powerful military. the guy who has been in power for very long time. so they see what many on the left, many younger americans, including jews, see as an apartheid state, and they want the u.s. to take a tougher position against israel when it goes after palestinians the way it has this week in gaza, even though, with the couple occasion

of hamas firing rockets into israeli desert tory -- israeli territory, it is much more complicated. tom: i agree with the complexities. what is the actual power projection that any u.s. administration has now over israel? because time has moved on. wendy: that is an excellent point. the united states has a lot less power with israel than they used to. we provide them with a tremendous amount of military aid. we could threaten to cut that off. they don't have a lot of friends in the international community, and the united states is a big part of a voice that supports them, so losing that could certainly change global opinion about israel, and i think they want to preserve that, although netanyahu seems to be ignoring u.s. calls for a cease-fire. lisa: our discussion of this particular point highlights how much the biden adminstration faces a new landscape on a

geopolitical standpoint as he engages in his foreign policy. i am thinking not just of israel, but also of iran and he talks continuing between the u.s. and iran to forge the sort of nuclear deal. we have heard from russia that their talks went pretty well and they could start lifting sanctions. how realistic is it for the u.s. to reach some sort of agreement with iran, to lift sanctions, allow oil barrels back into the market in the near future? sam: i think it is extremely -- wendy: i think it is extremely possible. remember, biden was vice president when obama struck the other deal. he was a big supporter of it at the time. he has been wanting to get back into it. he has been wanting to show the world that america is re-engaging with the world, where donald trump sort of pulled us back into our fortress america. so now biden has a chance to reengage in things like the players -- like the paris climate accord, but also things like the iran nuclear deal.

this will also anger israel because they are very opposed to the iran nuclear deal. they think it means their destruction. so that is another calculation biden has to make. i have a feeling this is going to come together. lisa: it feels a little bit like back to the future, with biden trying to reengage with the sort of geopolitical regime that predated trump. i am wondering whether democrats are on board with him, the idea that some of the protectionism came not just from the republican party, but also from democrats. can you give us a sense of the tensions within the democratic party about this sort of international focus of biden? wendy: that is an excellent point because donald trump took the democrats' position that we would protect american jobs, the union position, and biden has always been a real pro union kind of guy. the guy from scranton.

he very much wants to reengage with the world, but he also wants to protect american jobs, and i think that is part of what the infrastructure push is meant to balance out. the infrastructure push would create jobs, the biden adminstration says, and that might mitigate some of the moves towards internationalism. jonathan: there is a certain irony because someone blamed the teachers unions from stopping people being able to go to work because they kept the schools closed. wendy: and the head of the biggest teachers union in america said i think just last week that she was now in favor of everyone going back to school. so the idea is we get through the summer, september comes around, all of the kids go back to school, and then the world can fully open again. but yes, that was an issue that biden had to navigate, wanting to reopen with the teachers union being very opposed to it.

but now that they are all vaccinated, there should be no impediment to starting school. jonathan: we've got to leave it there. wendy benjaminson, the bloomberg politics editor, and some people might argue he was not that successful and navigating that issue. lisa: it has been a very difficult time for the schools in particular, and it is still patchy for schools, mine included. still at home. a lot of fun. jonathan: does vacation start now? wendy: they are going to -- lisa: they are going to start early, and go back to school early to try to restart things. but this has been difficult for everyone who has been trying to learn in person. tom: on the japanese vaccine thing, i am as stunned as you are at the slow rollout in japan. jonathan: should i read the headline? [laughter] tom: breaking right now. jonathan: when i read that headline, i was surprised that

they hadn't already been authorized. it gives you an idea of how slocum some countries are moving -- how slow some countries are moving. tom: and how ahead we are. jonathan: coming up, bob miller of blackrock. from new york city this morning, good morning. on radio, on tv, this is bloomberg. ♪

♪ jonathan: from new york city for our audience worldwide, good morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. here's the price action this thursday morning. equity futures shaping up as follows on the s&p, down about 0.2%. some headlines crossing from morgan stanley. it is a shakeup, two days after a shakeup at j.p. morgan. the architect of morgan stanley's trading revival, and andy saperstein, tapped as copresidents. it looks like mr. gorman is sticking around for a few more years, but setting up the transition for the future. tom: the question is how long they stay around. with jamie, i think it is sort of indeterminate, five-ish, seven-ish.

for mr. gorman, we specify three years, so we get more specificity on what these leaders will do. jonathan: the cfo to become the chief operating officer. all happening in the same week. it is interesting, isn't it? j.p. morgan a couple of days ago, morgan stanley this morning. tom: i would folded into the competition battles of the other bank. the pandemic is coming to an end, and all of this stuff has been delayed. it is just survival, and serious survival at these firms. it is all coming in a way that i suggest we would see a lot more of. what i focus on is within the firms, it is not the battles. the media loves to pick against saperstein and all that. what i would focus on is the skill sets and the different character and culture of the firms. there is a morgan stanley way, and you see that with the kid from middlebury, and the

commandment from tufts. each of these kids has a different culture and passed they bring to this advancement. jonathan: inevitably we will be talking about the heirs to mr. dimon and mr. gorman. but maybe more crucially for people seeing these headlines, this from james gorman, the ceo, he says he plans to remain ceo for at least three years. the joke at j.p. morgan is the rolling five-year view of jamie dimon. it is another three years for mr. gorman. lisa: at least three years, even as there is a shakeup just under him. you asked the question why now. is this a coincidence we are seeing all of these shakeups in the same week? i would argue it comes ahead of next week's hearings in washington, d.c. jonathan: you are not the first to say this. lisa: i know, i am not original. [laughter] jonathan: i am not implying that. i am just suggesting that this is an argument that is building

going into next week. lisa: i think they are trying to take on a more responsible diverse kind of view, saying we are representing all of these different viewpoints tom was talking about, as we reshape banks for a new era. jonathan: morgan stanley this morgan, jp morgan a couple of days ago. tom: remember, i mentioned also that mr. proves on -- that each of these stories is different. no one knows that better at bloomberg then sri natarajan, who joins us now. the king of gossip of wall street. who is next? is goldman sachs going to have a shakeup? sridhar: goldman sachs has had a recent shakeup. tom: it was forever ago. come on, is goldman sachs next? sridhar: i that david

solomon to some want to leave anytime soon. jonathan: the copresidents role, how on earth does that work? sri: at least at this firm, the morgan stanley today is extremely different from the morgan stanley of 10 or 15 years ago. you have a firm that is not a pure play wall street investment bank anymore. it is a wealth management arm that contributes nearly 15% of its overall revenue, so it kind of makes sense to pick someone who has charge of the entire investment bank, and mb -- and andy saperstein, who has really built a wealth management powerhouse, starting with the e*trade by, possibly the biggest bank deal since the financial crisis. it has become a major center of gravity for the firm. at morgan stanley, you had to have a situation even without any inside knowledge. the best guess anyone would have had was the most logical outcome here in trying to figure out who will be the top deputy to james

gorman would have been these two men from the investment bank and the wealth management side. jonathan: so he wants three years as ceo. many people reflecting on what happened with citigroup in the last couple of years, where mr. corbat said something similar, and all of jane fraser started to move quickly. do you expect to see something similar here? sam: citigroup and morgan -- sri: citigroup and morgan stanley rn two very different laces -- and morgan stanley are in two very different places right now. even now, city group has twice the assets of morgan stanley, and citigroup has been going through a number of challenges on the regulatory front and elsewhere. morgan stanley is a different story. they are in a good position. they are and what james gorman calls a position of strength, and when the going is this good, it is hard to imagine you will want to leave. that is why it makes sense when james gorman is starting to say

he wants to hang around for at least three more years. lisa: if you buy the argument that banks are reshuffling ahead of the hearings in washington, d.c. next week, what is the message being sent by the personnel choices, by the moves being made? sri: i have to take the contrarian side. i am not sure the morgan stanley move signals much to d.c.. however, the pandemic very much could have played a role. it is our understanding that james gorman has been working on this news years richland -- on the new year's resolution, and this year it very much was on the list to make sure there was a smoother transition of power, and that is important for him. tom: it is sort of old school to me when i go through the biographies of guys. edward pick is a guy who has seen it all. he went over to the equity markets capital side, and then went to the fixed income shop at morgan stanley, which was an absolute train wreck for years.

is he advantaged here because he has equity capital markets and bond capital markets experience? sri: he certainly does bring credentials with him. he helped with the ideals, so he has had some big ticket names he helped take public. then he took over the equities business, and in the aftermath of the financial crisis, that was a big challenge, to make sure that they could lift morgan stanley's equities business, and now it is the biggest player on wall street. he has clearly built up the credentials, so his star is certainly very much on the rise. jonathan: tremendous reporting as always. good to catch up with you. i came down the moose coming out of nora and stanley. the top headline this morning -- of morgan stanley. the top headline this morning, james gorman telling the board he plans to remain ceo for the next three years, picking the likeliest heirs as copresidents. tom: what is so important is

when you elevate these guys in a certain bracket, one of them is going to be head of strategy. i have no idea what a head of strategy was. but the people come up underneath these guys, so it is not just about the four faces on the screen for you on radio. jonathan: but for the ceo, it is good if they fight amongst themselves and not with me. just suggesting that tom is quite like that situation, especially if you want another three years or another five. tom: i don't know how you succeed without debate. you've got to have debate. jonathan: so true, tom. tom: at "surveillance," we are all -- lisa: kumbaya? jonathan: is that this show? [laughter] i had no idea i was head of strategy. tom: robert miller joins us now with blackrock, head of american fundamental fixed income as

well. he's been watching the deck chairs move at jp morgan and morgan stanley. bob miller, are we going to get an announcement out of blackrock? [laughter] lisa: really? jonathan: i don't think bob wants to go there this morning. i'm not shocked, bob. tom: i've got to talk about yield with you, and i'm going to go full face in credit right now. -- full faith and credit right now. what is the importance of a rising yield? what signal does that give? bob: good morning, first of all. i hope everybody is well. the market reacted yesterday to the minutes. quite frankly, we didn't see a lot of signal value in the minutes, but i think to the extent that the market teased out a tiny tilt toward more people wanting to talk about talking about tapering, that is directionally accurate with our point of view. as you know from my colleague in

our cio rick rieder, who has been quite public about this, we were very much in the camp that the dual policy settings right now are between monetary and fiscal, are disproportionately accommodative relative to the remaining cost associated with the covid crisis. and we don't expect fiscal policy to be recalibrated, so we are looking for the fed to acknowledge substantial further progress in a world where many others, including the cdc, who seem to be at the center of the storm for the past 15 months, have acknowledged material further progress with respect to the virus and the economy. businesses, government, etc. it is like the one group that has been resistant to acknowledging progress is our own federal reserve. jonathan: so here is the question for you. i assume from you and the team over at blackrock right now, this isn't the prudent

policy-setting, but this is the policy-setting right now. so what are the investor applications for you? bob: it's a great question. for us, to be consistent with other things you've heard, we are fairly convinced -- fairly defensive with posture. weak knowledge -- we acknowledge that if this relatively low vol, tight spread regime persists, we are probably going to underperform a bit, but we think our fiduciary duty to our clients is to be prepared for some more volatility in the marketplace and be positioned to take advantage of that, and eventually accumulate many more assets at much more attractive valuations. so we think we have not seen the peak in rates. frankly, i think real rates are substantially lower than fair value, so we were position for rising rates, both reals and nominals. we are expecting that the fed

will in fact begin to acknowledge substantial progress and that the tapering discussion will be on the table sooner than the market currently assumes, and it is important to keep and bind we are talking about dialing back emergency policy settings put in place a year ago at the peak of uncertainty when it is increasingly clear that the emergency is behind us. so we are not talking about going from dovish to hawkish. we are talking about going from dovish to a little less dovish, but still really accommodative policy. lisa: in just about 30 seconds left, what is it mean to be defensive at a time when you are expecting yields to rise? bob: you are short duration in our accounts, and we are holding more cash than we normally would. so we are less fully invested in credit product, em, etc., places where you would go to find yield

, anticipating an opportunity to reload in those asset classes sometime over the next couple of months at much more attractive valuations. jonathan: got to leave it there. bob miller, blackrock head of fundamental fixed income. this cash positioning, i brought it up several times with other fixed income investors, i was really surprised about the pushback i got about blackrock's cash position going into a summer where most people anticipate there will be a taper story developing. tom: you've got a grizzled veteran like bob miller, and huge respect for people who have been through the wars. i love what he said about the parlor game, to take the phrase from the fed, of trying to figure out what to do with higher yields, lower bond prices, while you wait to reload. that is jargon for what do you do in the sweat of higher yields. mr. miller has been there. jonathan: bob miller of blackrock on the situation and the cast position opening asked

the cash position going into the summer. equity futures down six, 0.1%. tom: we are moving. jonathan: yields, 1.6676%. hopefully we are moving at some point in the next five years.

>> as we come to 2021, what we see is it is a megacycle for

compute. if you had asked me a couple of years ago would we have this kind of demand, whether you are talking about pcs or gaming product or the data center, i would have been surprised. jonathan: most people would have been surprised. that was the amd ceo. good morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. going into that, equity futures look like this on the s&p, down on 0.2 percent. recovering slowly over the last couple of hours. in the bond market, yields basically unchanged. nominal yield, 1.6659%. euro-dollar, $1.2195, advancing a little more than 0.1%. elsewhere, the news out of morgan stanley getting everyone's attention in the last 20 minutes or so.

this is mr. james gorman setting up the transition for the future, telling the board he plans to remain ceo for at least three years. andy saperstein emerging as a likely copresident of the company of this bank. tom: we were trying to get to a 20 when 9000 print -- a 29,000 print. did not get there, i believe. david wilson did an all-nighter with a mac computer writing up the visual guide to crib, and joins us right now. you've massaged the crypto stocks, as they are called. dave: absolutely. looking at the relationship between cryptocurrency stocks and what is happening in going. it is a relatively small period we are looking at here.

just 10 days, kind of constrained. tom: for bitcoin, that is long-term. dave: absolutely. coinbase global just went public last month, so you kind of had to use a short period for this. what is interesting is you think about it, coinbase, you can trade bitcoin and these other currencies. it does not have the closest correlation. what does, microstrategy. yesterday you were talking about micros -- about the ceo of microstrategy. tom: not really up to speed on this. dave: 2.2 $5 billion invested in digital currency. tom: why is paypal in there? dave: because they allow their customers to deal in crypto, just as squared as. they have done a bit of investing in bitcoin, which may explain why the correlations lineup the way they do. tom: dave has a glorious bar chart of like 15 stocks here.

did they all crater yesterday? dave: they certainly took their hits, no question. but paypal, since you mentioned it, actually fared relatively well. let me take a quick look at where it closed yesterday because it had actually made back its losses during the day, and indeed, up by 0.6%. so it is really a thought exercise in terms of all of these companies tied into crypto. where are the relationships? tom: lisa, come on it's a thought exercise. it must be bitcoin. lisa: it's more than just a thought exercise because it raises the question of how much correlation there is from bitcoin to the broader market. the idea that overstock is one of the more sensitive stocks, that is an online company that sells furniture, not what you would first think of. square, paypal, they are payment systems excepting bitcoin, so they are more correlated to the crypto asset. at what point does bitcoin become a systemic risk? we were talking about that

yesterday. this is something people are increasingly talking about, that he year ago, this is what we heard from michael shaoul yesterday, i year ago would not have mattered if bitcoin had a big rout, but now it matters to markets. dave: true enough. you mentioned overstock. it has been in the crypto mining business for a while. they have this unit called t0 that focuses on the digital currency. so there's a bit more of a relationship to just the idea that you could actually pay for your overstock purchases with bitcoin, which in fact you can do. tom: look for that publication near the fourth of david wilson with us ahead of our stocks coverage on bitcoin. jon, what you learn there? jonathan: just got invited to a mask burning party on thursday, may 20 in new york. i was paying attention, i just got that email right now and thought it was ridiculous. the title of it is "burn, baby,

burn. take the mask off and burn it in salvation." some people -- burn it in celebration." some people feel that way, don't think? tom: i was walking around and i didn't know what to do. jonathan: do you have the mask on when you go into some of the places? tom: oh yeah. jonathan: when you go into a store, which store lets you do that and what store doesn't? tom: i'm shocked frankly that lisa's kids are still home from school. lisa: this is a reality for a lot of people, and frankly, online school is not the same as in person, and there are kids who just missed an entire year of school this year. jonathan: what has been the bigger issue for the kids this year? lisa: if you take a look at the test scores, they are actually coming down pretty see the complete, and people are behind. the social aspect depends on how people can remain connected versus social media, versus

younger kids that perhaps need the in-person socialization. i think there has been a dramatic displacement for children in this generation. i think the consequence is are going to be vast. jonathan: what is the age spread between the two boys? what's the experience like been between them? lisa: three years. i think when they have more access to social media, it gives them more socialization, and if you feel like you are on social media, you miss o -- you feel like you're are missing out even much more. jonathan: you can tell that i don't have children when i talk about the age difference between kids as a spread, as if it is the bond market. [laughter] lisa: the yield gap between my nine-year-old and 12-year-old is approximately 300 basis points. jonathan: speaking of the bond market, real yields yesterday, we had a repricing. nominal yields of about three basis points on the 10 year, and it didn't really get many people's attention. but the move on real yields was real. it was from about -92 basis

points down to the low 80's. tom: what's important here is we are looking at the nuances like global wall street, and a basis point move, i would suggest there's a lot of people really watching this, and i would suggest it is the german 10 year yield is sort of that global linchpin of where are we going or what is not occurring out there as we heard from many guests. jonathan: and it has really supported the banks trade over in europe. the question i have that has been a great one over the last six months or so is whether you want to keep that long banks trade in italian yields coming along for the ride. italian yields have come along for the ride over the last 10 months. tom: the ecb is frankly more important. i think the convexity of lisa's offspring is just extraordinary.

lisa: it is extraordinary. jonathan: the difference is that i don't have kids and i speak that way. you do have kids. i mean, come on. tom: we get lectured on children by mr. ferro. jonathan: from new york, this is bloomberg. ♪

we know how much you count on us...

...and that's why we're here 24/7... ...and on the road maintaining a fast and reliable network. we're always working to ensure the internet meets your needs... ...by making access easier for all... ...with comcast lift zones and our internet essentials program. we're invested in making our apps easy... ...to give you personalized assistance around the clock. and we're committed to keeping our team and customers safe by working from home... ...and using precautions in store. see what we're up to at xfinity.com/commitment (announcer) back pain hurts. you can spend thousands and still not get relief. now there's aerotrainer by golo. you can stretch and strengthen your core, relieve back pain, and tone your entire body. (man) and you're stretching your lower back on there. there is no better feeling. (announcer) do planks for maximum core and total body conditioning. (woman) aerotrainer makes me want to work out. look at me. it works, 100%. (announcer) find out more at aerotrainer.com. that's aerotrainer.com.

♪ >> we've never had a situation historically where the fed has not done to normalize rates and there is an inflation concerning the market. >> i worry that we are going to slow perhaps more than people expect next year. >> the fed is likely to shift their policy stands in the coming months. >> people don't like inflation, this is true, but they will tolerate it. >> the trouble with inflation is it is a bit like been pregnant. things tend not to stay that way. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, every