♪ >> everything is in place for inflation to rise, and i think it is going to rise significantly enough to make the fed uncomfortable. >> the risk-free rate right now is manipulated by central bankers all over the world. >> the fed's objective right now is managing expectations, and they are doing a great job of that. >> we look at the fed's goal of reacting, so they kind of want to wait it out, but market prices don't week things out. -- don't wait things out. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: the final month of q2. good morning. this is "bloomberg surveillance ," live on tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. tuesday morning, up 19 on the s&p 500, advancing zero point 4%. what a couple of weeks we've got

coming up for you. tom: there's no question about it. the fed will be a really key part of the month. what is fascinating for me is that starts today with the markets. commodities and equities speak volumes. jonathan: crude rallying, looking for a tighter market later this year. that is opec less. do you think they were -- that is opec+. you think they have to respond to that in a meeting? tom: all sorts of countries within opec are loving $71 crude . demand is a lot harder to gauge then supply. we spend more time on countable supply analysis rather than the motion of demand, and what this comes down to is gdp 10%, and we will all slow down in late 2021. that has drifted away, that conversation.

jonathan: that is true for the commodity market, true of the labor market as well. lisa: i am curious to see how long-lasting that will be because that will determine one of the key factors in longer-lasting inflation, which is wage growth. a lot of people are looking at that as their primary director. jonathan: if you ask the business is, they will tell you the majority of them that it is the additional unemployment insurance. if you ask potential employees, they will signal it is everything but. lisa: part of it is childcare, the idea that children are not back to their normal schedules. how much are the jobs that people are not going back to less desirable because they are dealing with big crowds of people and they are still

concerned about doing so because the pandemic has not yet gone away fully? ? are going to be -- these issues are going to be parsed out for a long time. tom: after what occurred 29 days ago, i am still not over -- granted, there's a pandemic, and i think we rationalize how we went from one million on down in jobs. i don't have a clue what we are going to see friday. jonathan: a monster downside surprise when we were looking for one million. equities up 19 on the s&p 500. we advance about 0.5%. just a nice lift on the s&p. the nasdaq up 0.3%. in the bond market, yields higher by a couple of basis points, and euro-dollar unchanged. jonathan: -- lisa: we will get a slew of economic data today having to do with manufacturing. the first is ism any factoring

data coming out. i am curious about the claims, about the input costs of raw materials. we will also be getting data on the housing market, which has been red-hot. how much is that being hampered because of the increases we have seen in some of the costs of things like lumber, and also like labor? 2:00 p.m., lael brainard speaking at the new york economic club. very interesting to see how much she starts shifting her view. she reiterates -- does she reiterate that there are specific metrics, specific time frames they are looking at to determine if this is a transitory surge in inflation we are seeing? today, opec+ is discussing output for the month of july. they are expected to reiterate that they won't be output increases. the reason why oil is surging today is because they said they do see a tightening in the market heading into year end because of how quickly some of the reserves have been drawn

down. any details on that could possibly be the most interesting aspect coming out of these. jonathan: lisa, thank you. the everything shortage from chips to your favorite table at 8:00 p.m. on a saturday evening to people in the labor report every friday, that seems to be the story of the moment. tom: i observed this weekend. i had to take a lyft, and it was nine dollars than it has -- nine dollars more than it has ever been. that is the reality people are facing right now. jonathan: ed yardeni joins us now. love to do this with you. where are the bond vigilantes? ed: i think they are actually back. i can august, the bond yield was 0.52% is an all-time record low,

and now we are somewhere around 1.6%. once that backup and bond yields occurred late last year and early this year, it has been really surprising to me that the bond yield has kind of gone nowhere fast over the past couple of months. but then again, i keep looking at the fed data and the fed keeps buying notes and bonds. it is doing its best to keep the bond yield from going up. but i do think they are coming back. i think the siesta is over. tom: you own the high ground on this. we are honored to have you here on june 1. it comes down to late in the 1960's, the treasury of secretary, the 1980's, the definitive article on the wage price spiral. is that what is coming for 2022?

edward: anecdotally, there is so much out there suggesting the labor market is tight. what matters for wages is the extent to which employers view it as a chronic problem, and i think it is a chronic problem. you folks mentioned all the possibilities of why the labor market is tight right now, but i think the most important one is we forgot to have kids along the way, and -- tom: yes we did, jon. [laughter] lisa: speak for yourself. there's a question going forward that there have been these frictions. yes, we haven't had enough kids and our fertility rate collectively has gone down. on the other hand, there's the idea that we had all these people in the labor market a year ago, and now we don't. that is something distinct. what is blocking them from coming back online? what is your answer to this mystery? edward: labor force data definitely shows seniors are

retiring. a lot of baby boomers who worked past 65, some of them are now in their 70's, and they have just decided it is time to just retire. meaning of life and all that. you made a very good point on childcare. we do have a childcare problem in the united states. we've had it for a long time. it was exacerbated by the pandemic. as schools and childcare facilities open up, we will find people going back into the labor market. but nevertheless, there is a shortage of workers, particularly skilled workers. we have almost as many job openings as we have unemployed people. jonathan: i want to jump in. forgive me, tom. jim bullard, the st. louis fed president, was talking about may be looking at a different metric. he is advocating for the fed to look at other measures of job market tightness. the unemployment job openings ratio.

is that useful? edward: i think it is very useful, but right now it is indicating a lot of frictional unemployment. either a mismatch in skills, geographical mismatch. there are plenty of jobs out there. anecdotally, we see help-wanted ads everywhere. but i think the good news here is that employers are going to use technology to increase productivity. i imagine that will be an offset in the next few years. tom: what is the level of inflation where you begin to see whispers of a time of a younger yardeni? what is the jump point where we get out to a new inflation? edward: i keep writing about the roaring 2020's as a possible scenario here, where productivity would be a tremendous offset to labor costs. on the other hand, i read about the 1970's, when i was a bit younger. i am concerned about the scenario.

we are starting to see a lot of similarities. some prices going up, wages going up. however, in the 1970's, productivity growth absolutely collapsed, and i think that is the big difference. we clearly have not only a base effect come a a demand shock effect which created a supply shock effect, and i think we are going to be shocked at some of the inflation views over the next few months was on the cpi deflator and a wage basis. jonathan: it has been way too long. come back soon. lisa: absolutely. tom: we are thinking thursday. [laughter] jonathan: going into payrolls friday, talking about the dynamics in this economy. yields up on tends to 1.62%. ed talking about the bond vigilantes making a return. the 10 year japanese government bond today did not trade. no trading. tom: this is a serious issue. jonathan: it wasn't because the market was shut.

there just wasn't any trading. tom: it has to do with just a bankrupt policy. i've heard a lot of people talk about this. it is not good. you need price discovery within a system. granted, and the u.s. system, cameron crise has been brilliant on this, but at least there is movement. jonathan: it is not in this market right now. lisa: how do you do price discovery when you have a whale in the market at all times that is getting bigger? how do you do price discovery when central banks are discovering the price for you? this is the conundrum. jonathan: i agree with you. i think it makes it very difficult. what's happened in the jgb market, volume is just not there. tom: how big is the ism today? help me here. i don't watch it. jonathan: and the concept of peak growth, i think it plays into that for sure. lisa: i think it also gives some

sort of sense with respect to supply disruption. jonathan: the labor market, the hiring story all beneath the numbers we have seen. your yield, 1.6181% on a 10 year come up around a couple of basis points. your equity market advancing. on radio, on tv, this is bloomberg. ♪ ritika: with the first word news , i'm ritika gupta. president biden will unveil plans aimed at reducing the black-white wealth cap. that will happen today in tulsa, where they will mark the 100th anniversary of a massacre that took place in a black neighborhood. china has taken its most substantial move yet to rein in a surging u.n. -- searching yuan.

that effectively reduces the supply of dollars and other currencies, and that puts pressure on the yuan to weaken. tension over iran is set to rise after two confidential reports from the international atomic energy agency. one says iran has continued to stonewall diplomats investigating aids old -- investigating decades-old sites. it comes as iran and global powers negotiate the 2015 nuclear agreement. two big five equity firms are taking cloud era private. they will value it at about $5.3 billion in the all-cash transaction. that would represented 24% premium to the country's previous close. the largest shareholder is activist investor carl icahn.

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. ♪

>> is expressed to me and to our group numerous times his desire

to work with us and negotiate a package, and i think that is what you see, that we are inching towards each other. i understand there is a deadline here. i understand at some point, if we don't get there -- but it won't be because we didn't try. jonathan: senator shelley moore capito speaking on fox news over the weekend. from new york, this is bloomberg. alongside tom keene and lisa abramowicz, i'm jonathan ferro. 7:30 eastern just around the corner. before we get there, 7:18. i can go since this morning. i sound like tom. [laughter] i've been away for a couple of days, and this is what happens. yields higher by a couple of basis points to 1.6130%. tom: we had a cast of thousands were place you on friday. jonathan: how did that work out? tom: i'm not going to go there. jonathan: let me get to amc entertainment.

amc up by 10.9% in the premarket. during the capital raise, they are issuing their equity in a premium to the close on friday, and the ceo saying it is time for the company to go on the offense again, talking about buying up theaters, real estate. they are discussing may be exploring deleveraging opportunities as well. the stock is positive after a capital raise and share sale. tom: paul sweeney said this is a great -- for hollywood. they really don't know how theaters are going to work. jonathan: as soon as that capital raise dropped on the bloomberg, what does this company look like? lisa: are people going to be rushing back to movie theaters when they have 14 streaming services at this point? jon, i wonder how much this idea of using this has a way to buy up distressed assets, like for example, movie theater companies and the actual infrastructure,

to potentially sell at a higher price. jonathan: amc a distress asset vehicle. what do you make of that? tom: kids on couches moving around prices, and amc being opportunistic about it, as they should. entertaining, our jack fitzpatrick, bloomberg reported. it is to get it done of republicans versus some of the emotional infrastructure of the democrats. be it is about bridges, roads, tunnels, and the democrats say don't take out the leadpipe funding as well. how far apart are these two parties? jack: emotionally, they are not too far apart when republicans are talking to president biden. the issue they have cited is that they get closer and closer together and are in a very good

mood on both sides in terms of finding common ground and focusing on what they agree on, and then afterwards, the rest of the biden adminstration will push for something a little more partisan than democrats want. so if there is a meeting this week as there is expected to be between republicans and the president had some point, the emotions are pretty positive and the mood is good. the question is can they actually follow through on that and turn this into legislative language that both sides can agree on. but the mood tends to be good when there is agreement between republicans and president biden. tom: what is the number one roadblock to split the difference? jack:jack: how much of this gets paid for with money that biden doesn't want to use. does it rely very heavily on using unspent money from the stimulus? is this really new money? is it $1 trillion or so of new

money or overall spending -$700 billion that is taken away from something else? because there's a pretty big delta between the suicides -- between the two sides in terms of the amount of money they want to use, but how much of it is pulled out of something else like the unspent stimulus. lisa: how much momentum is there behind this right now? jack: it seems to be slowing a little because of the impatience from democrats. the mood can be good, but if there are enough democrats saying these proposals from republicans aren't serious enough and we are running out of time, you start to lose momentum, and we could really see the momentum stop as soon as later this week if we don't see them really push through this. it is slowing down as of right now. lisa: internationally, there's quite a bit of momentum around a number of different relationships the u.s. has.

we have been talking about china for the bulk of the morning. there's also a question about the iranian nuclear accord. there was a sense we were getting close to doing that. where are we on that front? jack: you are correct to say there was a sense we were getting closer to that. that is an area with a lot of partisan disagreement right now in washington, and i am not sure i necessarily have a concrete update on what comes next. but it is something that seems to be an issue that the biden adminstration was at least inching forward on. but i don't know if we are going to see news on that in the near future. tom: does west virginia get an airport that will rival to buy -- rival dubai? jack: depending on how they work out the earmark systems, people have said west virginia will look like the city of the future by the time they are done with joe manchin's earmarks.

there will be limits on how much they can do for one or two members, but west virginia is really in a key position here with shelley moore capito leading the talks and joe manchin backing her up and insisting on bipartisan talks, so it is probably going to look pretty good for west virginia. jonathan: tom keene, you are on form this morning. kids on laptops moving around stocks, dubai airport in west virginia. which one do you want to start with? tom: i don't know, i survived the weekend. i got through the weekend. jonathan: you talk about the kids moving stocks around on laptops. lisa: he's got a point. jonathan: is it still what you alluded to? is it something more now? i would say yes. tom: the kids wake up and they are looking at bitcoin, trying to get to doge, and they are upset because they can't get it off the bloomberg. $36,000 on bit dog. lisa: you actually have a point. the idea that they want to get

involved when shares are valued as highly as they are gives them the ability to raise more money to sell them at potentially a higher price and then use the cash to do other things. there's a lot of ways for them to play a company in the popular i because of kids moving around stops -- in the popular eye because of kids moving around stocks on laptops. jonathan: some of the debt that was issued back in 2017 dropped to its lowest, i think below 10, now back to 75, and some of the maturities are higher than that. overall, the cheap guide to this is we collapse. we were talking about bankruptcy, and then we ripped back. lisa: there's a question of whether they are proven yet to be a comeback story because people are not really going back to the movie theaters yet in force. are the masses going to go back in the same kind of way? "frozen" sing-along.

jon wants to do that this weekend. jonathan: kids are cap divided by that -- are captivated by that, aren't they? lisa: will you do a sing-along of any sort? jonathan: now. lisa: tom what -- no. lisa: tom would go. jonathan: tom has had enough kids for me. [laughter] this is bloomberg. ♪

wanna help kids get their homework done? well, an internet connection's a good start. but kids also need computers. and sometimes the hardest thing about homework is finding a place to do it. so why not hook community centers up with wifi? for kids like us, and all the amazing things

we're gonna learn. over the next 10 years, comcast is committing $1 billion to reach 50 million low-income americans with the tools and resources they need to be ready for anything. i hope you're ready. 'cause we are. look...if your wireless carrier was a guy, you'd leave him tomorrow. not very flexible. not great at saving. you deserve better - xfinity mobile. now, they have unlimited for just $30 a month. $30 dollars. and they're number 1 in customer satisfaction. his number? delete it. deleting it. so break free from the big three. xfinity internet customers, take the savings challenge at xfinitymobile.com/mysavings or visit an xfinity store to learn how our switch squad makes it easy to switch and save hundreds.

♪ jonathan: from new york city for our audience worldwide, good morning. price action like this, up 23 on the s&p, advancing 0.6%. on the nasdaq, up 0.4%. the rustle up 0.9%. all-time highs in europe. on the side of the atlantic, not too far behind. switch up to the bond market. we have not traded in japan on the 10 year in today's session, for the first time in about a year. i guess the real headline is it is not the first time we've seen that happen. we seen it a few times over the jgb market. the 10 year nominal yield has also been a snooze. when we talked about a closing basis at 1.74%, we talked about it repeatedly on this program. it is basically average over the

last couple of months. many people believe that because of the amount of debt that treasuries cut to issue, one of two things has got to happen. either yields are going to go higher or the dollar has got to go weaker. right now the nominal dollar is not doing much. finish on dollar-china with a big move lower in the chinese currency's favor, a move of more than 10%. in the chinese come out with more than just a verbal pushback. some real policy, asking the banks to hold more than foreign exchange reserves. looking to put the brakes on this one, with dollar-china down to about 6.38. if you need a weaker dollar to fund that deficit, who is going to absorb the stronger currency. will the europeans take it, or japan? tom: there's always a race to the bottom, a race to weakness on the currency markets. but i would suggest what we have seen in may is pacific rim

strength that has been really noted, led by renminbi, but really other currencies as well. it does rebound back over to the equity markets. jonathan: equity futures this morning are positive. even with this story playing out in the background, i think it is the one to watch. let's get you some movers and say good morning to ro maine. romaine: the s&p is moving higher. the volume is still relatively light. if you look in terms of the actual volume and value, there's a lot of energy stocks at the top like devon energy, occidental. you've got crude oil, wti well above the $68 level. in london, brent crude camped out above $70. these are back at those 2018, 2019 levels here. waiting for word out of that opec+ meeting that could be another potential catalyst here. it big deal here for cloudera.

kkr taking this company private. cloudera was supposed to be an open-source challenger to a lot of these cloud companies like microsoft, amazon, etc. they just weren't able to trade punches with them, so they are going private. amc priced about a dollar above where it closed friday. those shares higher by about 11%. the company says it is going to use those proceeds for acquisition. a downgrade for lamentable. analysts say it's partnership with shopify and pellet on is going to be a bit dish and -- and peloton is going to be a big benefit here. ne-yo sales were up about 100% year-over-year. tom: romaine bostick, thanks so

much. greatly appreciate it. how do we on a june morning synthesize what we are seeing? the dynamics, the newtonian plumbing of the financial system? let's take the conversation we just had with edward yardeni about inflation, and maybe it is cost push, maybe it is demand pull, zachary griffiths has to synthesize this for wells fargo. how do you get from inflation guesstimates to yield guesstimates over to the dollar? zachary: thanks for having me. that is really the big question, and for us we see inflation rising, and that should push yields higher. that is part of the story that really comes down to the global reopening. we have a very tolerant fed with higher yields and very heavy supplies you outlined earlier. as far as the dollar goes, we think dollar weakness is what we're going to see for the next month or two, and that comes

down to a fed that has been the most resolutely dovish of the central banks, and at the same time, you have this u.s. exceptionalism story fading where other major economies are picking up from a public health and economics perspective. that is how we see things own folding -- things unfolding. tom: what pair or dollar index do you use as your litmus paper for the american system? zachary: we keep an eye on the dxy, and we have certainly seen that come off a bit. we've been in the camp that we should see dollar we for about a month now. we think that will last another month or two as the factors i outlined play out over that timeframe. with respect to the 10-year treasury yield, we think that is going to continue rising towards the middle of the year and could hit 1.85% to the end of this month, so that is a target we took down a bit. it seems like this recent range has been pretty sticky, so we

kind of had to reset our expectations, and that is where we see things going over the next month. jonathan: a basic framework outline many people are pushing, from this deficit we either need weaker yields -- need higher yields or a weaker dollar. zachary: from the higher yield perspective, we think so. that comes down to the supply-demand dynamics. you saw that play out specifically in february. the seven year auction had some of the worst stats we've seen in a while. we think you have seen some episodes of duration, and that has faded a bit. i would say the options last week went fairly well, but the supply story is kind of a longer-term one we expect to play out gradually, and that is really going to push yields higher. we need to gain more to take down all this debt. jonathan: how tight is the relationship? zachary: have been strong

recently, and i guess it has been stronger with respect to the shape of the curve. you really see the back end steepen when deficits are rising. we have seen a huge increase in deficits over the past year. the issuance patterns have been a bit different, with bills doing most of the heavy lifting last year, and we are shifting that out the coupon debt we really term out the debt used to finance the c.a.r.e.s. act. we think all of this duration, is going to come down to yields need to rise for market participants to be able to take all of it down. lisa: we've gotten a lot less certain about the certainty of an infrastructure package getting past. has that already been priced into market? could there be surprising dollar strength if there isn't some massive infrastructure plan that is passed that increases the deficit to the degree people expected? zachary: that's a great

question. i think expectations have come down quite a bit, and you've had the two packages out there totaling nearly $4 trillion. we could get another deal by september of this year, may be a bit more, but it will be smaller than the two we originally outlined. expectations have come down and are more in line with what we had been originally thinking, and again, it is going to come down to congress has had a tough time getting around another package you have economic growth coming up so much. you have deficits so high already. when it comes down to the economic impact of these different packages, it is going to be much longer-term than the covid relief we have seen, so as far as the market reaction, we think it is going to be much less severe than what we saw when we were throwing around covid relief deals that were very deficit financed, and the spending was immediate in most cases. lisa: how high can u.s. yields got this point based on what we

have seeing from countries like japan, which we have been talking about, which has incredibly low, indeed negative, yields. zachary: that is a great point, and that is a big reason why yields will rise, but not tremendously so. when you look at u.s. treasury yields, they are extremely attractive for both japanese and european buyers that hedge at least some of the currency risk, so that is a factor that puts a ceiling on how high yields can go, but with a very tolerant fed, and that was something we did not expect to see when rates begin to rise in the first quarter, the rhetoric around fed policymakers was very receptive, and i think my favorite quote was from chairman powell calling it a vote of confidence in the u.s. economic recovery. i think with the fed more comfortable, it takes the ceiling a bit higher, but the foreign dynamics and the buying we are seeing if nutley puts something of a soft ceiling on how high we can go. jonathan: got to leave it there. thank you.

not just a tolerance, but almost an endorsement from some that officials earlier this year when yields started to rise and they said it was consistent with the price around them. what surprised me was to hear that from an ecb official, an executive board member speaking to reuters. "most importantly, yield has been related to the growth outlook rather than foreign spillovers. this is precisely what we would expect and what we want to see." i was surprised to hear it from an ecb executive board member. tom: you've got to see it through euro one dollar 20 three cents, and we are not there yet. i go through the correlation of june busting out all over, and maybe my headline today is commodities are busting out all over. the bloomberg commodity index up 20% year to date from the bottoms, up 56% roughly from the pandemic flows. even from where we were before the pandemic, commodities are up

a robust 16%. there is something going on here more than pandemic analysis. jonathan: and the threat of a weaker chinese currency is doing nothing to dim the appetite this morning. lisa: there's also a question of how much of the increase in prices has been transitory to do some of the supply kinks, due to the fact we've had cargo ships stranded due to the pandemic, and how much is due to a new regime where we are building more stuff, buying more stuff, having bigger footprints. jonathan: and is the u.s. driving the cycle? it is a real change from what we saw coming out of the last crisis. tom, are you still playing that drinking game? you hear transitory and take a drink? tom: we went to a summer thing with mimosas, and it is working out great. jonathan: sounds really good. enjoy. lisa: do you force your kids to drink tang? tom: well, it is not champagne.

it's cold duck. jonathan: what is it called? tom: jon, cold duck. a beverage from years ago. jonathan: you can tell me about it in a minute. tom: crosby, stills, nash, and young deja vu. 1970. cold duck. jonathan: i hope you all enjoyed the last couple of days. welcome back. [laughter] from new york, this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. u.s. oil futures climbed to their highest and more than two and a half years today. uti rose as much as 3% of -- wti rose as much as 3%. opec+ says the oil glut built up during the pandemic has almost gone. higher energy prices are one of the reasons inflation in the euro area climbed to the highest level in more than two years.

consumers prices -- consumer prices rose more than 2% in may, more than analysts predicted. there's a report that japan will allow some spectators at next month's summer olympics. organizers will let domestic fans attend the games. spectators will be required to provide a negative virus test or vaccination certificate. fans from overseas would not be allowed to see the olympics and person -- the a liv-ex in person. in -- the olympics in person. in tennis, naomi osaka has dropped out from the french open after a dispute over a postmatch press conference. she says taking part in press conferences makes matches worse. she is ranked second in the world. krispy kreme is set to become a public company for the second time. the american doughnut shop chain buckley filed for an ipo on the

nasdaq -- shop chain publicly filed for an ipo on the nasdaq. 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. ♪

>> boeing has delayed the deliveries until 2023, and we

are fine if they can deliver it to us in 2022. we will accept them. the only problem we have is that is it -- is that it is a stress in the supply chain for the entire aviation industry and i hope that can be resolved. jonathan: that was the qatar airways group ceo speaking to bloomberg. good morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. here's the equity market as we kick off the month of june, up 22 on the s&p. we advanced 0.5%. in .516 4%. yields higher by a couple of -- 1.51 64%. yields higher by a couple of basis points. just a slightly weaker euro. crude, $68 handle. tom: very quickly here at 4224 s&p 500, remember how absurd 4200 or 4500 felt? jonathan: ridiculous. when people were putting together those iran forecasts back in october, early november,

developing the year ahead outlook, then the headline dropped around some of the efficacy, it changed the game. what surprised people i think was not the cyclical rally. it is just how well tech actually held up. tech held up and everything else had a rip. tom: and we are very strong on the idea of tech having a better back end of 2021. the nasdaq composite up 45% in the last 12 months. dave wilson has these numbers tattooed on his left arm. he also knows it is about the fundamentals of earnings, and you got an earnings update. 512 of the s&p 500 have reported. [laughter] dave: our number, as it turns out, is 489. we don't necessarily get 500 every quarter, so we have about 10 left to report. you're looking at the third straight quarter were companies

way ahead of analyst estimates when you look at earnings, and yet getting there were board for it. in this particular case, if you look at first quarter numbers on average, shares moving the day after reporting when companies are beating estimates for the first quarter, they rose less than 0.1%. tom: we are up 33% 12 months trading -- we are up 38% 12 months trailing, and the market gets out front with expectation. dave: that's part of the mix here, and also the anticipation perhaps that what we see looking forward is not as promising perhaps. quarterly results have become a one-way street for companies in the sense that if you come up short of projections, your shares still fall. on average, you look at the s&p 500, down 2.2% the day after

reporting results. when the earnings came up short. that is in keeping with what we see now for several quarters. so that is consistent. but in terms of beating projections, the last three quarters, companies haven't gotten any benefits. for fourth-quarter results last year, they actually fell on average in response. it shows you how things have gotten arguably out of whack. you are talking about how much stocks are up in the last 12 months. that is part of it. clearly the effect of a pandemic on earnings and on estimates is part of it. when you put it all together, it is clear that there's not a whole lot companies can gain at this point by coming out ahead of projections. it really is an issue of what happens when they come out short -- when they come up short. lisa: is that the issue here, or is it that people have already priced in the future when it comes to the pricing, that it requires a massive shift in the business model to a more

optimistic trajectory in order to get stock investors excited? dave: you are onto something, no question. it is about the forecasts in a lot of cases, companies talk about held numbers they come up short for their current quarters. they are finding some issue in terms of their profitability, especially when you look at the higher cost of labor, transportation, those sort of issues. so it really is a matter of looking ahead and perhaps not seeing quite the optimism that is already built into share prices, no question, but also built into these quarter results when you compare them with estimates. tom: thank you so much. greatly appreciate it this morning. on the deutsche bank story that just came out, it really talks to where we are in june. to me, it is a mystery to get labor day and certainly into 2022. every company has a different formula. jonathan: they will reform in

due course. they've had 12 months to figure that out. apparently this hybrid model has worked. haven't we been doing that? tom: didn't we get an email, single sentence, back last year? jonathan: you identified the transatlantic difference between how european acts are playing this and how they are playing it on wall street. dave: in europe -- lisa: in europe, they are saying, great, we will cut back our costs. in the u.s., they are saying get back to the office. there's more productiveness in the office. this is a real question, why shouldn't they be as devalued as mall real estate? jonathan: what does the hybrid model actually look like? do use get mondays and fridays

-- do you skip mondays and fridays? does everybody work the same days in the office? do you rotate? tom: yahoo! over 10 years ago did a study. they said, let's actually learn about this. she was heated, work from home. doesn't matter. heated. lisa: i think there's a bias in terms of who chooses to work from home. people who work from home don't get promoted as frequently, but people also stay home because they don't get to take care of things at home, so they can't work as much. there's also the question of office culture. people want to be with one another, especially if they are younger and they don't have families and other obligations. tom: i don't agree with that at all. if you have family and kids, you want to be in the office more. [laughter] lisa: sure. it is the question of whether you can. do you want to talk about your weekend, tom? jonathan: i think tom wants to talk about a range of things this morning. [laughter] the other thing is making a sale.

if you are willing to go out and see a client face-to-face, surely that gives you the edge. my question is, is there going to be internal company travel that won't necessarily happen? is that the marginal business travel that is not going to come back, and the rest is going to come back? jonathan: you don't want to go to the local restaurants and be a could be -- a kumbaya that no one on the team really want to be a part of? it doesn't surprise me that your friend group doesn't have patience at all. [laughter] just know when you come alisa. i think we should move on from this. tom: i think we should too. jonathan: coming up later, the northwestern mutual chief investment strategist. we are looking forward to that. we are up 0.5%. i've always said the commercial breaks on this program would be

a million times better than the show itself. yields better on the 10 year to 1.6447%. euro-dollar unchanged at $1.2222. on radio come on tv, this is "bloomberg surveillance -- on radio, on tv, this is "bloomberg surveillance." ♪

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) if you've struggled to lose weight, you might think you were born with a slow metabolism, but what you may have is insulin resistance. fat becomes trapped inside your body and it becomes very difficult to lose weight. now there's release from golo. it naturally helps reverse insulin resistance, stops sugar cravings, and releases stubborn fat, all while controlling stress and emotional eating. at last, a diet pill that actually works. go to golo.com to get yours. that's g-o-l-o.com.

♪ >> everything is in place for inflation to rise. i think it is going to rise significantly enough to make the fed uncomfortable. >> if people expect inflation, they are more willing to accept it. >> de-risk premia right now is manipulated by central bankers all over the world. >> the fed's objective right now is managing expectations, and they are doing a great job of that. >> if we look at the fed's goal of reacting, they kind of want to wait it out, but market prices don't wait things out. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: