for the summer. >> powell is optimistic that we will get a robust labor market recovery. that inflation will be contained. >> i think inflation is going to be a problem. >> once you have debt wages up -- debt up, wages begin to go down. >> this is bloomberg surveillance. jonathan: good morning, good morning. this is bloomberg surveillance. i am jonathan ferro. tom keene pushing ahead to payrolls friday. tom: wicked early jobs report. that would be a friday. the basic research was optimism.

jonathan: that fits in the middle of that. tom: i thought that was our slogan. i tried to get a hold of you this weekend but you would not talk to me. i was supposed to have lunch with gerard cassidy. i show up at the restaurant and he stopped by and left. jonathan: thankfully, i do not follow tom's twitter account. lisa: a question as to why the

friction exists. wall street journal highlighting how a number of states that have already removed the enhanced unemployment benefits are starting to see a pickup in the number of people. it is highly controversial, the idea of how politicized this report will be. jonathan: coming off the back of the weekly biggest gain since february. the s&p all-time high, we advance just 2.6 this morning. yields come in about a basis point. the biggest weekly selloff in the treasury market going back to march. lisa: it raises a question about the direction of yields. the data we get out of the labor market later this week highlights strength versus weakness, how much that will

have a huge effect on federal reserve officials, including one of the big three. tom: wait a minute. what is he going to say different from his interview with jonathan ferro and mike mckee? lisa: absolutely nothing. he could say something that is relevant. there are some fed presidents worth paying attention to more than others. it is coming down to the big three. today, joe biden will be meeting without going israeli president. interesting to me, especially coming after those airstrikes yesterday. the idea is how much could this jeopardize the iranian nuclear deal? israel has been highly opposed to it.

doesn't give some indication of where the talks are going -- does it give some indication of where the talks are going? the big u.s. banks will announce their capital plans. my question goes back to what mike mayo said last week. some of these stocks are yielding more on a dividend basis. the junk bonds, john. the changes -- it changes the scenario of why people want to own these. jonathan: do you think that was connected to the fact that -- lisa: i do not have an answer. to build on that, the question is, how much can the state of bank stocks emerge? tom: we are in bull market.

record high spx, nasdaq 100 up 2/10 of a percent. jonathan: banks have had a tidy year. i want to turn to lori calvasina . do we want to stick with what has worked so far this year? lori: it is a great question. i think the leadership backdrop is getting choppy or. there is still a lot of room in cyclical values trade. things like financials, energies, materials. i do not think you have the same valuation opportunity in industrials. you have a lot of room in these banks, in particular. it is one of the cheapest sectors in the market.

i think the underlying economic data will run pretty hot. at the end of the day, this economy is running very, very hot. that should push you into the cyclicals for a while longer. tom: do you go to mid-cap, small-cap? lori: i think you want to go down to the mid-cap if you are a large cap manager. there are a couple of reasons for that. if you look at the broader index level, these companies are still inherently more cyclical than the big cap companies. you are getting more exposure. frankly, the valuation yields. large-cap growth has dominated

but if you look at the relative valuation, there is still a lot of valuation to run with here. lisa: the idea here that the balance seems to be toward yields. financials depend on higher yields. lori: i am an equity strategist, but when i talk to my friends and the fixed income world, they do a good job of convincing me that the yield is not just responding to macroeconomic issues. i look at the household balance sheets, for example. i see very low market exposure and very high equity exposure. there is a lot of truth to the idea that there is some conditioning at play. jonathan: energy is up by more

than 46% on the s&p 500. we talked about the banks briefly. you do some tremendous work on ownership. who owns this story? how will owned is it? lori: let's take energy first. energy is hilarious if you are a data nerd. every study i run, everybody does their best to stay neutral in the energy sector. everybody has the benchmark waiting. commodity prices are difficult for equity folks to predict. i think equity folks have been burned over the years. they try to really hug the benchmark. one thing we heard, certain managers were seeing energy

going up. i do not want to be overweight the sector. i need to add a little bit more. financials are totally different. the large-cap as been there for a long time. it is nothing that has impeded their performance. if you look at hedge funds, they were deeply underweight and they got more underweight, the opposite of what you would have expected. if the hedge funds ever come back in, get out of the way. tom: is amazon, apple, are they part of your valuation runway? lori: when we look at the tech space or the communication services space, i grew up in the aftermath of the tech bubble. we started out thinking it would be the greatest thing we have ever seen.

at the end of the day, the fundamentals in that space are unbelievably strong and the secular growth -- cyclical or growth appeal is there. you do not have the same valuation opportunity. we do not see valuations versus the s&p. that is important. we did see -- it was not just about the secular growth narrative. what you think about the fundamentals, fundamentals are fine but they are just not all that special. that is when i go back to this idea of a high economy. we had an economy that ran cool for quite some time. that is the environment that secular growth does well in.

looking down the barrel of 6% or 7% gdp, getting back closer to average in 2023. it is not the same kind of post crisis environment we had back then. these secular growth names are not that special anymore. jonathan: you are special. we love catching up. we start happy on monday and progressively get worse during the week. lisa: this is a happy jonathan ferro. jonathan: we had -- 245 on high-yield debt. lisa: that is high-yield, not so much. why not just buy stocks? tom: the number of the week,

lobster roll, $39. that is the statistic. lisa: triple leverage lobster rolls. jonathan: are you broke already? tom: i did not get 8000 shares of gamestop like you. jonathan: a beautiful morning in new york city. this is bloomberg. ♪ >> u.s. airstrikes in syria and iraq have come at a delicate time. it was to deter future attacks. iran's president-elect takes office in august. he has been seen someone who takes a harder line against the u.s.

three republican senators say president biden's infrastructure deal is back on track. the president walked back his remarks saturday. rob portman says work can move forward. the new british secretary says he wants the u.k. to return to normal as soon as possible. bloomberg has learned that ubs will allow two thirds of its employees will have a hybrid model working from home and the office. it is a major blow to operations in china. the electric carmaker -- 285,000

cars. 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. es.

>> i was very glad to see the

president alter his remarks. we were blindsided by his comments the previous day. it is clear that we can move forward with the bipartisan bill that is broadly popular. jonathan: senator rob portman of ohio speaking on abc this week. from new york city this morning, good morning. monday morning equities near highs. we pull back by a single point on the s&p 500. euro-dollar unchanged. the biggest weekly selloff in treasuries going back to march. ok, drumroll, let's head down to d.c. to make sense of this. the statement on saturday from the president --

i am trying to work out what was the intent? tom: it was on the edge of british politics. it was absolutely bizarre. i look at infrastructure and all i can say, if you want to see the effect of infrastructure, stop by laguardia airport which has gone from worst to best in short order. anne-marie horton with us. >> good morning. what is so interesting about it, you listen to all of the sunday shows, he has the republicans on board for the $579 million infrastructure built. the problem the president has now, members of his own party.

nancy pelosi said she was going to not bring the bill to the chamber. there is bipartisan support now. it is likely we could see the heart infrastructure, the reconciliation bill is where the question mark is. tom: does the speaker represent the middle ground? >> she represents the progressives in the house. she will not even consider a vote on this deal until they get the larger spending package. this is what the progressives are pushing. you have seen some of these progressive outlets start up websites over the weekend saying no deal unless there is more on climate, childcare. they are pushing the white house to lean more into a progressive agenda they were hoping to see championed by the president.

jonathan: the president goes to wisconsin this week. >> the objective is to get the american people on board. really explain why the democrats are pushing for a more wide-ranging infrastructure plan. they call it human infrastructure. it is really to drum up support. it is july and the senate is out on recess and the house will go on recess. august is -- the entire city is dead. d.c. is dead in august. they have july to get this done or the fall. although d.c. will focus on the midterms. -- all of d.c. will focus on midterms. lisa: i have to say welcome. i still do not have the sense

after listening to all of the sunday talk shows if the president is going to veto any kind of bipartisan bill. what is the verdict? anne-marie: it is a good point. they were telling this line of he is not going to veto it but everyone cap saying, there will be a two-track. joe manchin saying there would be reconciliation done. no one wanted to mention a veto and no one wanted to say heart infrastructure is out the door -- hard infrastructure is out the door. the president statement on saturday made it clear that he will not veto the bill.

you see him outside the white house with a group of bipartisan senators talking about this deal. tom: i look at where we are and the heat is on in washington. almost recesses. what will be accomplished this week? anne-marie: this week is going to be back and forth within the house. senators are in break. it is about the house drawing up this discussion on a reconciliation bill. i do not expect much at all to be accomplished this week. the focus will be on the white house as they tour the country and drum up support. jonathan: that is a very sad welcome. tom: i thought she was on last week. jonathan: you will get used to those. tom: can she do a remote from

been still able -- ben's chili bowl. u street. jonathan: headline hong kong has banned flights from britain again. lisa: the u.k. is reconsidering how long it will remain with its restrictions in place. the delta variant is front and center. i do not have a sense of what the threshold is anymore. jonathan: neither do i. the travel business, they were gearing up for a better summer. it ain't happening in the way people thought it would. tom: this delta variant -- over

the weekend, it grew. look at australia, shocking. jonathan: in australia, there is a very different threshold. lisa: in asia, there has been a much lower threshold. in the u.s., people do not seem to care. it is part of doing business. jonathan: the headline coming from the south morning post. equity futures falling, pulling back by almost two points. bond market, yields 151.56. payrolls on friday.

euro-dollar, 1.1938. i am jonathan ferro. this is bloomberg surveillance. ♪

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karina: good morning, all-time highs coming into monday morning. we hold back by a single point. a single point on the s&p 500. lisa mentioned that we will start getting that avalanche of announcements from the big banks on wall street, we can for capital returns. to the bond market, last week we had a really nice week for equities. this is going back to february. we had a nice weekly gain on the 10 year yield. it was the biggest going back to march. getting back up to 151.56. yields are about a basis point.

we want to finish with foreign-exchange and go through the ranks for you. this is the low end of euro-dollar this month. 122 54 is where we started the month of june. today, 11940. it's a bit of a snoozer to kick off monday morning. tom: i agree with that. i wanted to make some news out of foreign-exchange. i couldn't get there. he is struggling across all assets to devolve down the foreign-exchange. we want to do that. in the last week, there is a lot of focus on the view forward. everyone is trotting out global outlooks. we are thrilled he could join us this morning. daniel, i am going to go to the dynamics you set up. equities will cope with a higher

yield. many viewers and listeners are like right, why will they cope with higher yields? daniel: thanks for the shout out to our new global quarterly outlook. one of the themes is this is going to be a -- we think there are a couple of factors. the main one is the fed is communicating well in advance that they are thinking about tapering. they are going to continue. second, it's just good policy. this is an unusual reception. it's not a financially driven recession. i think this shapes up together to be a positive outlook. tom: what do you see in terms of

gdp? you have a legacy back to julia coronado, being cautious on expanding on gdp. what is your 2021 adjustment? >> i think this time, we are above consensus. we have that 6.9% for this year. that is up 4.7% next year. that is pretty hefty. it's not unreasonable in light of the kick we will get from the reopening of the economy, more stimulus checks or support for families with children starting in july. as the news focuses on the weekend, a sizable expansion on infrastructure. jonathan: we monitor the moving target on wall street. is the median estimate right

now, it is decelerating in 2022. you expect a smaller degree from 21 into 22. supplement the market with the eco-next year? daniel: again, on the econ call, it's a story of the economy, we think there are these tailwinds that i mentioned earlier. the fed is not trying to puncture this. despite what i think markets will show, they have signaled they are thinking about tapering. i think the markets read too

much. i think the testimony from chair powerful reinforces they have not change the underlying strategy that they will not be doing preemptive strikes. they are going to wait for the data on inflation to bear out. while they are more optimistic about that, inflation will be sustainable. they are optimistic they will get to unemployment sooner. they are going to wait and no longer try to move in that positive growth. jonathan: when you sit around the table with the team, what goes along with that? daniel: i think the market call is one where there is going to be a tantrum less taper. we do think yields will continue to rise in a gradual way.

we see a steady weakness in dots , not what we saw in 2015. lisa: does it concern you that that is consensus? daniel: there is always risks on any outlook. if anything, the risks are on the side of more growth than we have have penciled in. there is more than $2 trillion of savings waiting in the wings. we have our forecast with eight release of that. people decide this is great. the other risk everyone is talking about is all of this

inflationary pressure that we are seeing. while we recognize that some of this is more persistent and not purely transitory, we think that is a good thing. this is what the fed wants to see. lisa: the reason i asked that is because m km partners put out a survey over the weekend where he said was the biggest threat to dock market valuations? it was inflation. what is the biggest 2022 wildcard? fed tightening. these are the consensus ideas. what about the downside risk for weaker earnings? how much is the market not position for that? jonathan: let's pick up there.

this topped out at the end of march. we still have a year-end forecast by bloomberg looking for 188. it is still your year-end call from the street. lisa: this is the concern for me. you were highlighting this idea of how much you would've lost a few continued with your fear of trajectory. it is still baked into treasuries even though it's not in the consensus outlook. tom: what you need to know is we are up a blended 14% in the first six months of this year. nobody reads the chapter at harvard. the markets matter. what is the symbolism of an up 14% equity market in the last six months against all of these worries? daniel: the fact that the markets are worried about this

is a source of more confidence then irrational exuberance. getting back to the inflation which i think is the biggest risk, we had an equity survey during our global markets conference a few weeks ago. the plurality of respondents that saw inflation between two and 2.5%, our keynote speaker said that is exactly what the fed is trying to do. i think there is equity, a lot of confidence that the fed will be able to thread this needle. there are curveballs, there is

in everly going to be volatility coming. nevertheless, you just talked about the consensus forecast, this is an historic terms very confident of financial conditions. i see more tailwinds rather than headwinds at present. jonathan: it's good to catch up. we are just getting some confirmation out of hong kong. hong kong to ban passenger flights from the u.k. from july 1. it is extremely high risk. hong kong re-classifies the u.k. as extremely high risk. sterling is coming in it, still positive on the day. tom: you wonder where this is

going. i think there is great uncertainty. we will talk to joshua in a moment. to me, it is uncertainty within the celebration that science works. jonathan: i will say it's not going in the direction that people anticipated several months ago. lisa: that matters a lot, especially in israel where there is a significant portion who are vaccinated and recent studies came out over the weekend showing that people who are vaccinated are still getting sick with of delta variant. this comes down to a threshold. if there are no hospitalizations and no deaths, why do we treat this like the flu? jonathan: we will have a timely conversation. the equity market is a little bit of a bore. tom: never boring. jonathan: i don't believe you. tom: brent crude is $76.

jonathan: yields are up one whole basis point. lisa: leverage lobster. jonathan: i'm sure we can find some data on the bluebird. tom: it is $27. it is also six days old. jonathan: i am not going there. from york city, this is bloomberg. ♪ >> the u.s. as launched airstrikes. those attacks could be an early test for the iranian president, sina someone who will take a harder line against the u.s. than the departing president. in southport, rescue workers are digging for a fifth day in the

rubble of a collapsed building. they can still find survivors. nine people are dead and 150 are still missing. the last liveperson was rescued thursday. one of the most significant moves yet by regulator amid a global crackdown in the crypto industry. there is concern about involvement in money laundering. united airlines is preparing to make one of the biggest purchases in history. united will by more than 200 narrowbody planes from boeing and airbus. it includes 150 boeing 737's and airbus 320 ones. powered by 2700 journalists and analysts in more than 120 countries. this is bloomberg.

♪

>> this virus is spreading much faster than the alpha variant,

which was our big concern during the winter months. it will probably be the dominant in the u.s. within a couple of weeks. that sets us up in the future, in the fall, for a dangerous variant to be around when we think we will see surges because people have been moving back inside again. jonathan: that was the school of public health professor. from new york, good morning. i am jonathan ferro. the price action is looking like this, unchanged. the s&p 500 futures, 42 71. yields come in a single basis point. tom: i am going to add value here. the vix, 16.30 shows the resettable market. right now, we reset on this

horrific pandemic, whether you are in australia where it is grim. there is restricted air travel. there is delta out of india. we are joined by the johns hopkins school. i want to get to parent 101. should we fear the delta variant? >> absolutely. given how quickly it is spreading, it should be a concern. it can destabilize countries that have done a pretty good job vaccinating. for that reason, all of these warnings are reasonable. it's an extra push to get people vaccinated and help people understand the importance of vaccination. tom: we are going to do it.

celebrities will say get vaccinated. do we need corporations, sporting events, to say you've got to be vaccinated if you want to participate? >> i imagine that is going to happen as this moves from authorization to getting licensed. it will become more of a standard given the very strong safety record they have. i think that is probably going to happen more and more. lisa: you said the delta variant could destabilize countries, even those with high rates of vaccination. can you elaborate? >> countries that have very high rates of vaccination will be protected. countries that have pretty high rates, even the u.k., cases are going up and deaths may be going up. the united states where we have states with middling levels of

vaccinations, we will be vulnerable. we will see meaningful outbreaks, if in the summer based on how transmissible this virus is. hospitals will start to fill up again. lisa: there is a distinction between destabilized nations because those individuals are getting sick from the delta variant. this is versus the more prevalent among those who are not vaccinated. can you give us a sense of the risk on the other side for vaccinated individuals? >> the risks are much less. vaccinated individuals can still get sick. they can get very sick, but it is rare. we should care about how the entire country is doing. we should all be worried because it is true that people who are unvaccinated are vulnerable. these viruses can cause serious

damage. lisa: we have this with other illnesses. this is where it comes to the threshold of covid like another virus like the flu, like other colds that people get. at what point do we cross the rubicon where people have vaccinations if we don't see hi hospitalizations rates where it's ok and you can't just restrict travel and business activity. >> from a public health perspective, you have to realize the amount of illness and death we are vulnerable to. it is a norm us. it swamps the normal flu season. we're not talking about flu in the sense of the number of deaths if we don't get more people vaccinated. that is one thing. if we want to say from a social perspective, we are willing to say it's on you, we will be spending a lot of money for

hospitals. it will impact how our system operates. the fundamental dynamics haven't shifted. we are all better off if we couldn't control the total amount of illness. tom: leases kids have started their reading for the fall. they got a reading list of 14 books. can you say that school return is in jeopardy because of the delta variant? >> i think it's premature to say that. i am curious what age you are talking about for your kids. tom: you don't want to know. >> i think that will be helpful. we are going to have to see.

there has been a little bit of a question mark with what the virus is going to do. in certain areas where the vaccination rate is low, we are at risk for a serious outbreak. in those areas, it could be that different measures are needed this fall. jonathan: it's always good to catch up. thank you. in many ways, the story hasn't changed. have we cut the link between the cases in places like the u.k. lisa: you are breaking the link when it comes to social behavior. we've seen that in new york city as hospitalizations drop. there is a question, at what point does that take precedent? people are behaving as if it's over. jonathan: in hong kong, they are

banning passenger flights from the you kate they are doing things like this. the new health secretary spoke with sky news in the u.k. many people anticipate he is going to be more roles in the health secretary for them. tom: what are the facts saying? and italy, some are saying come visit. the other is in lockdown. i'm confused. jonathan: you are not the only one who is confused. it goes back to what lisa mentioned. threshold, tolerance levels are different country to country. lisa: this is one of the reasons why the european union is saying u.s. visitors can come over. why won't you reciprocate? jonathan: common up, your equity

markets are sitting pretty come into a brand-new week of trading at all-time highs. yields are down one basis point. tom keene, lisa abramowicz, this is bloomberg surveillance. ♪

>> the market isn't convinced we've made enough progress. >> the bond market will have to pay attention. >> we are optimistic we will get a robust labor market recovery. >> if we get wage growth, i think inflation is going to be a problem. >> it is -- wages begin to go down. >> this is bloomberg surveillance. jonathan: shall we get to monday at all-time highs. good morning. good morning. we are live on tv and radio. 7:00 eastern time, going into

friday we