♪ >> clearly with them -- there's clearly a sense of optimism and enthusiasm in the market. >> the demand is going to be very strong. >> as this global recovery is unfolding, investors need to think more global in their portfolios as well. >> the fundamentals are going to keep getting better here. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: coming into wednesday at all-time highs. 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. looking at the markets right now, down five on the s&p. we are set to close out the quarter for a 5th street quarterly gain. still up by a little more than

1%. tom: right now, 16.68 on the fix -- on the vix. it's been a terrible six months in the stock market. jonathan: up 14% on the s&p. tom: the pendulum is one of gloom. jonathan: one thing that hasn't continued is the bond market selloff. they've come in almost 30 over q2. tom: if you start with the plane in january, who takes a bigger victory lap than jerome powell? he's got the markets with him. that's a fact. jonathan: should they be? there is consensus around the goldilocks outlook this economy in the years to come. mr. el-erian has written that peace in "the ft" this morning questioning that. lisa: basically, it could breed more inflation then people are

expecting down the line. an increasing number of people are coalescing around that it is definitely not priced into the bond market. jonathan: do the fed officials start to break? they start to pileup one after another? we started to see signs of that. we are now in a different phase of economic policy, so it is appropriate to think about pulling back on some of the stimulus. that's the evolution of the language over the past couple of months. tom: does it matter, or is it about the data? i would suggest they are exceptionally data-dependent right now. jonathan: i'm with you. if it is the reaction function, that is totally different. the problem the fed has had is that every time they say some thing about the data, people start to complete the reaction function and the change in the reaction function with confusion around the outlook. lisa: it depends on who is

speaking. fed chair jay powell has been pretty clear about transitory. what governor waller was talking about is concerned about pockets of froth, and the housing market in particular fueled by the fed mortgage purchases. how tailored can the fed be about how it removes stimulus? can't remove just one piece of it without disrupting the whole market echo -- the whole market? jonathan: you are right to break it down from city to city, state to state. it different picture in different parts of the country. tom: this is my world when i traveled a lot. meltzer of ucla went ballistic on me in a lovely and friendly way, saying all that adders is aggregate because that's all they have. yet in the modern day, we are living on the original sense of this. jonathan: i would love to see

someone go ballistic at you in a collegiate way. tom: the whole lunchroom just stopped at the nerd talk of meltzer and keene. i was just trying to keep up. jonathan: i will whip through the price action. yields up a basis point or two. tom: i had someone throw a row let me in the london school of economics lunchroom. jonathan: i've had a few of those. euro weaker, dollar stronger. crude starting to pick up again, approaching $74, up by about 1.36% this morning. lisa: no one has ever thrown a role at me. -- a roll at me. we are getting the adp report. the expectation is for a gain of 600,000 jobs, below where we saw the last rate of 978 thousand jobs. the key will be the components here. how quickly our service sectors

bringing people back into the workforce? 10 a clock a.m., we get u.s. pending home sales. the expectation is for it to tick lower once again. there's also a supply question because there have not been homes. to tom's point about where the homes are being purchased, and suburban areas, and smaller cities, and supply has been unable to keep up with the demand. today we get the global corporate tax debate from the oecd. the question to me is how much agreement is there heading into the g20 meeting next month. how much can people coalesce around this 15% minimum tax rate, and what is the enforcement knighthead is him as all of these countries try to roll out some sort of corporate tax rate that will not necessarily give one nation a competitive advantage over another. jonathan: to that point, whether ireland wants to come along. lisa: they have indicated that they may be willing to.

this isn't that big an increase to them. however, it is one of their hallmarks, and this really is the key sticking point. jonathan: let's turn to jared watered, bank of a -- jared woodard, bank of america securities head of research investment. do you think the outlook, the nice goldilocks outlook that many people have, is unstable? jared: first of all, i think hamed may be hoping -- i thing mohamed may be hoping for consensus where i actually don't see one. investor comments and questions this year have been entirely dominated by fears about things getting too hot. too much stimulus, too much central bank easing, is the reopening happening too quickly for markets. these have been the questions that have been constantly put to us. i think that the truth is the

markets have digested all of this incredible well. the vix is at 16, not 30. the big takeaway for us is that the most contrarian view, the most out of consensus thought right now is that things might actually continue to go well. you may even start to see some deflationary forces work their way back into the system in the second half of this year on the start of next year. tom: what percentage of the more traditional investment is off their bogey? if they are squared to the market, they want to be like the s&p 500. even if they are removed from it, how would he be poor behind right now? -- how many people are behind right now? jared: i think a lot of people are positioned for reflation. they've gotten into some of the cyclical sectors, especially financials and energy, materials , but they are not completely offsides. in most of our measures,

proprietary measures suggest that investors have pulled back positioning over the last several weeks. they are somewhere closer to neutral from much more aggressive levels earlier this year. i think that the fear of aggressive investor positioning, the people are overly exuberant about the market, and that is going to give us volatility, that might be a little bit misplaced here. tom: this is incredibly important, in that the behavior wrapped around all of this blah blah blah that we do, people aren't on board the bull market enthusiasm. lisa: you can see this particularly in the bond market. we did get that bid into the long end. . we do see a flattening yield curve. do you think the message is a lot less bullish than the message from equities, translating into? the equities have we seen the full play out of a less inflationary reality within the equity spectrum? jared: i think it is in the equity market that you will see

the potential biggest change over these can have this year. our economists have been suggesting you could see some downward pressure of price indexes from goods that people shift from goods to services, as unemployment benefits expire. you could see some of the short-term price pressures moderate in the way that economists have been promising for some time. people a few months ago were terrified of the cost of lumber. you can't go to the store and buy some plywood. lumber has fallen 50% from its peak. so none of these disinflationary or even just return to normalcy economic pressures are factored into the equity market today. people are still on one side in terms of the reflation trade. a much more balanced portfolio is what we have been recommending for a while. i think it is going to suit investors better as reopening

and becomes normalcy in the economic normal -- in the economic markets and in financial markets. jonathan: good to hear from you. just to go through some of the additional notes in the note we had from jared this morning, he talked about lumber being down more than 50%. gold is down 18%. cobalt, -18%. soybean down 16%. pork down 18%. that is the quarterly performance. in the previous month, that is what we saw breakevens top

yield curve. have we seen those peak inflation fears in the market already this year? tom: we do a lot of conversation on radio and tv. you look at the bloomberg terminal, and the fact is the bloomberg terminal is giving me a completely different story. i go back to the hatzius interview of 10 or 12 days ago where he models out the sub 3% gdp. lisa: i love that blah blah blah has become the trip of the morning. you have to also put in perspective over the past 12 months it is still up about 120% . but to your point, have we seen be conflation fears? i don't know. we haven't necessarily seen it play out fully in the equity market, and that perhaps will be the interesting part. jonathan: when you look at the bond market, when you look at market based perceptions of inflation, they topped out in may. they rolled over through june. the equity market to some degree has reflected that with the performance of tech and the underperformance of banks, down 6% on the month. lisa: basically, equities are reflected in the same message, but to the same degree, is there some sort of incoherence? perhaps it has more to outcome of this disinflationary idea in equities. jonathan: just a little flavor of the debate as we close out the first half of 2021.

coming up, seema shah, principal global investors chief strategist. for our audience worldwide, heard on radio, seen on tv, this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. president biden reportedly is planning an executive order that would rein in the power of big business. according to "the wall street journal," it would order regulators to toughen up oversight on a small number of companies. the action would most likely be challenged in court. a divided u.s. supreme court has refused to lift the federal moratorium on evictions during the pandemic. that will leave the ban in place until the end of july. the vote was 5-4. justice is rejected because by landlords and the real estate association to block the

moratorium. the plaintiffs argued that the cdc exceeded its authority by imposing the ban. a big foul up in vote counting in the race for mayor of new york city. the city board of elections took down previously reported results and the democratic primary after mistakenly counting test ballots. that produced about 135,000 dummy ballots that skewed results. the inaccurate count showed brooklyn borough president eric adams losing a large part of his lead. in north korea, kim jong-un says a situation stemming from the coronavirus has created a crisis that could affect his rule. the regime has long denied that north korea has had any infections. state run media isn't providing any details. north korea has taken drastic quarantine steps that has made its economic crisis works. the ride-hailing service didi

raised about $4 billion in its ipo. it is the second largest listing of a chinese company after alibaba. shares begin trading today on the new york stock exchange. global news 24 hours a day on bloomberg and bloombergquint take. i'm ritika gupta. this is bloomberg. ♪

>> the unemployment rate would

have to drop fairly substantially, or inflation would have to continue at a very high rate before we would take seriously a rate hike in 2022. but i am not ruling it out. jonathan: that was federal reserve governor christopher waller speaking to bloomberg yesterday afternoon. good morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. your equity market this wednesday on a four-day winning streak. yesterday, just about 4279 on the s&p. -0.05% on the equity market this morning. 1.4528% through the second quarter. in the fx market, the dollar has been dominant over the last couple of weeks or so. we are negative there 0.1%. tom: i want to point out the brazilian real. i think it is really of note. we heard that yesterday.

right now, emily wilkins joins us, bloomberg government. sliding into the end of this quarter, both "the new york times" and "the washington post" above the fold barely discussed infrastructure. talk about the nitty-gritty of the infrastructure debate and what washington doesn't the coming days to make this an important date -- washington does in the coming days to make this an important debate. emily: this is happening behind closed doors. we need to get details of the bipartisan infrastructure plan, as well as what democrats are going to put forward as part of their estimated $6 trillion reconciliation plan. until we know details, it is going to be really hard to see how much support these bills can get, what the sticking points are. we are expecting to see those bills within the next month, as the timeline gets to the point

where lawmakers are going to need to start deciding whether or not they vote on them and leadership has to start working on things. but at this point, we just don't have the details. that has halted a little bit the public debate. tom: who are the players behind closed doors? are they names we know, or people we haven't spoken of? emily: really, it is the names that we know. this is very much in leadership's court right now. nancy pelosi, chuck schumer, senator bernie sanders on the budget committee is a key player here, as well as congressman john yarmuth, the chairman of the budget committee in the house. and richard neal on ways and means will be writing the tax portion of this bill. he is definitely going to be a key player in the next couple of months. lisa: is there a pipe dream for

president biden to try to appease both sides of the aisle and he further left constituents? emily: it may be a pipe dream, but it is a pipe dream he is aiming for. despite the fact that across the board they have many different ideas about how big or small this package should, they realize they need to get something done. they are all united on that. they all want to see a bill. they realize their control of the house and senate could ride on that. democrats want to be able to go back to their constituents and say we were able to pass this, we were able to give you this, this benefit is now coming from us. so democrats do want to pass something. once again, the devil is in the details. exactly how big can go mansion go and how small ashcan joe manchin go -- can joe manchin go , and how small will progressive

democrats allow? i think you are going to look at president biden's plan for corporate taxes, with capital gains taxes. those are things that democrats are still considering and that a number of the progressive wing of the party say are really popular. they say the tax structure is unequal and that these measures of taxing the wealthy, the billionaires, the corporations are things that a lot of americans support. tom: it is the end of the first half, and the one major player who has not been in the bright lights is speaker pelosi. how is she doing? emily: speaker pelosi has a very difficult job ahead of her. she's got a margin of about three to four individuals in the house and faces the potential of losing people from both in, from the more moderate end as well as the more progressive end. she has an incredibly tough job

here, not to mention the fact that democrats aren't really facing good prospects for 2022 just because of historical precedents and redistricting. but pelosi has so far managed to keep her caucus together on a number of particularly difficult votes, and she is confident she can do so going forward. from democrats i talked to, they say there might be some internal rumblings about pelosi, but everyone recognizes that at this point, she's the best person for the job of speaker and keeping democrats together. it is definitely not an enviable job. lisa: i want to finish up on how much pressure there is for justice breyer to retire before they possibly lose a majority. emily: there's definitely pressure. there is definitely the sense that democrats don't want to see what happened during the trump years with the republican getting to replace sony different members. i think that pressure is going to continue in upcoming years.

i think for now, at the end of the supreme court session, it is taking a little bit of a rest. jonathan: when do we hear from the president of the united states today? emily: we are going to be hearing from him a little later this afternoon. he was in wisconsin yesterday for a rally as he tours the country to really sell the infrastructure plan. jonathan: we will leave it there. tom: do you see how it is 92 degrees in washington, and her plant is just killing it, sitting behind her? on radio, she's got the best plant of anybody we talk to. just killing it. jonathan: it is swamp like down in d.c. that is what annmarie hordern was telling me yesterday afternoon. she is surprised by how swamp like it is. tom: president trump called it a swamp. jonathan: i think anne-marie was talking about the weather, not so much the people down there, tom. lisa: i do wonder how much

president biden is going to use that to sell infrastructure. tom: oh, come on. it is summer. lisa: it is not to summer. it was 118 in the northwest. this is unheard of. tom: i put a chart out of the weather in seattle. the mathematics of getting to the last three days in seattle is truly unimaginable. it is a mathematical framework that you say that can't happen. jonathan: just one final line on new york, politico going with this line, "not so in new york," after 130,000 dummy ballots were counted. tom: your grandmother was on the board of elections, right? lisa: for the record, my grandmother was not on the board of elections. but i will say, this has really created a problem for ranked voting. if this is the protocol going forward, how confusing it is, and if eric adams is not the

winner, there's going to be a pretty big idol and skepticism about it. tom: if i melted, free beer. jonathan: is that it -- if i am elected, free beer. jonathan: is that it? what about fruit? only canned lisa: -- lisa: only canned. the death stare. [laughter] jonathan: i will clarify later. this is bloomberg. ♪

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♪ jonathan: live from new york city, for our audience worldwide on tv and radio this wednesday morning, good morning are you here equity market, 4279 on the s&p 500. on the nasdaq, unchanged. the russell down by 0.4%. the s&p 500 up by 14%, the fifth straight months of gains on the cards, the fifth straight quarterly gain on the cards. the s&p 500 over the last quarter up by about 8%. i want to slice and dice this market for you just a little bit. look at this. going to go through things for the nasdaq 100, and take a look at the banks. the nasdaq 100 advancing by almost 6%. the banks on the s&p 500 down a

little bit more than 6%. this in-line with the direction of travel on treasury yields, through q1 up by almost 80 on a basis points. you hear a lot of people talking about peak growth. let's talk about peak inflation, not just from the equity perspective, but from the bond market. in the previous hour, i asked a simple question. when was the last time you heard someone talk about breakevens? there's a good reason for it. there's a bias in this market and the coverage of it. when breakevens start to roll over, you hear nothing. a tumbleweed through the bond market. tom: this is really important. there's a massive media bias to get all lathered up about inflation. jonathan: nw eddie -- and nobody is talking about this because we peaked back in may. all it is is the real yield on

the inflation linked maturity curve. subtract that from the otto yield and that gives you an implied rate of inflation. it is none the exact science. people talk about it as if it is, that we can just strip it all out and come up with a market-based perception of inflation, because it gives you an idea of positioning in this market that would be an inflationary story. tom: let's save on that. jonathan: yields one to focus on little bit later with morgan stanley. let's get some hoover's with romain. -- that's get some movers with romaine. romaine: a lot of the homebuilders have rallied for about three straight days. they are taking a leg down today.

valuations have gotten a little too stretched for some of these companies, and the profit growth outlook has to slow down a little bit from some of the pace that we have been used to here. last week it closed out around $56 a share, just shy of that all-time high. down 4% in the premarket. a downgrade there from bank of america. they are taking it all the way down to underperform. this is the first cell equivalent rating we had. we did get some earnings this morning from general mills. overall they were good with regards to the fiscal fourth quarter numbers, up at the given outlook for the full year fiscal 2022 and the growth rate when it comes to organic net sales. that growth rate is going to have a negative sign in front of it. that is causing a little but of concern in the market. keep an eye on what is going on in the semiconductor space. micron having a phenomenal few days here.

it was down slightly at the close, now up about 1.5%. we get earnings from them after the bell tonight. amd rallying as well. the company already has the go-ahead from the u.s. and south korea, which means this deal could closed by the end of the year. automate or, in tiny biotech company developing a covid vaccine, went from two dollars a share to about $33 a share, down 33% in the premarket after the company saying it is not actually going to bring that covid vaccine to market, thing some of the testing that is done is not aggressive enough for it to continue now, weighing its options out there for what it is going to do next. tom: it is midyear, and for those of you on global wall street, this is without question our conversation of the day. frankfurt rosie -- you learn

that there is a complexity here. it is not just a simple yield down, price up analysis. there's some real complexity. jonathan: the headline from your research, credit is vulnerable to a negative surprise. how so? >> basically, valuations and credit have gone so tight that there's not a lot of room, not a lot of buffer for any change in the defensive function. if we have any change in the expectation about the backdrop the fed has been providing for a long time now, any of those kinds of hawkish tilt -- those signs of hawkish tilt is going to be negative for credit. jonathan: what do you think of people saying there's a massive

put here in credit at the moment, that we can't have wider spreads because the fed is there to back things up? >> i would say that is significantly out of the money put. it is not at the money put. you need a substantial dislocation in the credit markets to occur before the put can come in. it is not that we won't see widening. you need to see an order reminder to do what we saw in march of last year. that level of dislocation in the market, of high quality companies losing access to the credit market, those types of dislocations you can concededly imagine the fed taking in, but

not for a 20, 25 basis points move in investment grade spreads. lisa: your projection has a pre-profound location, that perhaps credit spread trades more in tandem with fed policy then actual credit worthiness of companies. in the past, these were two distinct issues. when the economy was getting better, credit would do better because these had a chance of doing well and that economy and paying back their debt. have we moved to an area where credit does not necessarily track the ability for a company to pay back its money? vishwanath: i think it is good to distinguish between what is happening in the high quality investment grade credit versus high-yield credit here. investment grade credit is pretty much historically tight at the moment.

it has been a substantial been a fishery of quantitative easing in the low rates, and any change to that, we think there's not enough of a buffer in terms of spreads for the credit markets to absorb. not so much when you look at the high-yield. there is some buffer for that to happen. so as the economy begets -- the economy gets better, there's still some prospect for high-yield bonds and leveraged loans to get tighter, but that room for tightening is simply not there in investment grade. therefore, what we see is a situation where there's a clear difference between high-yield and investment-grade. lisa: this highlights why so many investment managers prefer high-yield even though it is not is riskier to investment grade right now. can you walk us through the pathway of transmission, the idea of if the fed does get more hawkish, does that mean higher or wider spreads, and then all in losses that are really substantial?

vishwanath: i'm not suggesting any all in credit losses. we are not suggesting a default. what we are suggesting is the compensation for investment grade, the spread is a compensation for taking out that credit risk. if you look at can it get tighter as the economy gets better, can the markets actually accept low compensation for investment-grade credit, it is really not that much scope there. on the other hand, if the rates get higher, the amount of liquidity in the market eases somewhat, think very much the case with equities wider, without affecting the overall default rate. we think defaults will go down. jonathan: i want to pick up on that in just a moment. in the equity market, when you bring of the prospect of exuberance and bubbles, people always benchmark it to what happened in 2000 and say it is nothing like then, so there's

nothing to worry about now. in the credit market, they will say things are tight, but this is not 2007. can you adjust where spreads are at the moment for quality, for duration, and give me a better picture of the parallel between now and 2007? vishwanath: my colleagues recently published a piece addressing that. adjusting for everything, we still think we are close to taking all of these factors into account. you are at all-time highs in grade, not so much in high-yield bonds. but investment-grade, we are through the tights of 2007. jonathan: unreal. could to catch up. morgan stanley's head of fixed-income research on what is happening in the credit market at the moment. tom: what is so important about

credit, and i am guessing we really haven't seen it yet, you get rice down at retailer institutional. one statement, next statement, then it becomes a bear market. that was widely bricked at months ago. price down, yields up. we really haven't had that three months of statements where people go, wait a minute, what is going on? jonathan: we got a flavor, though, that the default rate is heading in the right direction and it is hard to move the other way from where credit is at the moment. lisa: he's projecting another taper tantrum type of even, except isolated. the foreign buyer to me is the marginal buyer. at what went do things widen out enough to bring everyone flooding back in? how much of a controlled is that for how things come back in here? jonathan: 15 basis points plus the spreads widening is what

potentially morgan stanley are looking for. what are we now, 80 basis points? what a world. from new york city this morning, good morning. how's that working out, tom? tom: working out great. jonathan: lisa abramowicz, jonathan ferro. tom: look how that worked out. jonathan: did you pay for that advice? tom: i did. i got crushed. jonathan: get your money back. this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. the u.s. and taiwan would discuss semiconductor zen vaccines today at a long-delayed trade talk. this is a global shortage of computer ships has its biggest many factor building a new factory in the u.s.. the goal is a full trade deal. xi jinping is set to deliver a speech that delivers the communist party's 100th

birthday. xi will make the case that the party with him at the top is china's best hope for more growth. rehearsals suggest the event at tiananmen square will include flyovers by the country's most advanced fighter jets. the british government has revealed its post-brexit system for overseeing subsidies to companies. it is promising to make good decisions then when the country was in the european union. subsidies will be allowed if they follow certain principles like benefiting local communities and being a good value for the taxpayers. credit suisse is considering an overhaul of its wealth management business. bloomberg has learned that they've consolidated several private banking units. it may reduce cost, as well as present a more unified approach to clients. tripadvisor and expedia are tightening safety rules for vacation rentals. expedia's short-term rental business has banned hosts who uses platform from leaving keys in public places.

the two companies say the moves are related to a recent bloomberg businessweek investigation into violent crimes at airbnb listings. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪

>> we have to be very watchful,

and particular advanced economy central banks, at looking at the performance of inflation expectations, and certainly they should be very watchful. so far we haven't seen that, and that is a good omen. jonathan: that was the bank for international settlements general manager, the former governor of the central bank of mexico. good morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. closing out q2 with one trading day still to go, and closing out the front half of 2021. in the equity market, 4280 one, unchanged on the s&p 500, coming off the back of four straight days of gains. with yields heading lower on the 10 year yield to 1.4581%, crude at $73 94 cents, what are your we have had so far. up within 52%, the most if we ended the year right now since

2009. quite a run in crude. tom: frankly, i would go right back to the equity market. i think we've almost become jaded coming out of this pandemic. jonathan: i think we are totally desensitized. tom: remember single-digit returns? jonathan: unreal. tom: david wilson with a chart. david, tesla is a failure. it's only $655 billion market cap. i mean, i need the romance of a $1 trillion market cap or it just can't exist. dave: then the chart of the day is the one for you, no question. it looks at the five companies now that have reached that $1 trillion mark. bear in mind, facebook kinda backed off at yesterday, closed at about -- tom: oh come on, $997

billion. dave: facebook got there just a bit over nine years after going public. let's put that in context. google's alphabet, 15 years. amazon.com, 22 plus. and then 33 for microsoft. 37 for apple. tom: jon from england emails in and said, should apple, microsoft, amazon, google, and facebook be dow components? dave: if they were, it would skew the average like crazy. the challenge with the dow specifically is that it is a price weighted index. so you get these share prices like amazon as an example, they would have to make some kind of adjustment to make it work. amazon closing at almost 3450 dollars a share. you have to rumor with apple, they did a seven for one stock split and then went in the dow. you have to take that into

account relative to the s&p 500. tom: amazon was a 40 to one stock split, i think it seems normal. lisa: jon is going to bow out of discussing the dow. i've heard he doesn't really like that. there is a question about why some of these tech stocks have been able to shrug off regulatory risks, especially at a time when that invite and is saying he would like to go it alone, to be a little bit harder when it comes to restricting larger businesses and how much control they have over different industries. why is there such complacency in the market that nothing will ever get passed on this front? dave: it's been a while since we've seen this, and in the past, regulators, legislators, any moves they have made have taken years and years to play out, and in the interim, you're talking about companies with relatively fast growth. you look at what's been going on the last few weeks, we sort of had this shift back towards growth, away from value, which

ruled the roost for the better part of a year, so if you are talking gross, you're definitely talking these big tech companies. tom: david wilson with us. and of course, he dives two weeks into the earnings season as well. jon, you mentioned yesterday july 13 for j.p. morgan. i think we can say we have never seen anticipation for the discovery of information in an earnings season like what we've got coming. jonathan: let's use jp morgan, the waiting on the dow a little less than 3%. what do you think goldman-s is -- goldman's is? a little more than 7%. we keep going back to that. tom: if amazon was in the dow, where would that be? jonathan: it depends what their price is. their price would be, what, 30%, 40%?

it is ridiculous. tom: jon is 100% correct. the s&p 500 is a lot better gauge a discovery of this. the del monte man would have quoted the dow. jonathan: it is not even the components and the weighting of the doubt. it is not just that it is price weighted instead of market cap weighted. it is how people reference the dow. when i tune into other news networks and here we are up 300 coins, down 400 points, what does that mean? tom: they don't do this every day, jon. jonathan: i think it is misleading, and i think for certain people that don't check in on the equity market on a regular basis, i think it can scare them on some days. tom: jon, it is not that it scares them. it boosts ratings. jonathan: you think it is a ratings game? tom: absolutely. the dow is down 500 points, we are all going to die. jonathan: and we do the fix in percentage point -- the vix in percentage points as well.

lisa: just to clarify, tom's beige suit, jon said he looks like the don't want a man. not to sidestep nasty del monte man -- the del monte man. not to sidestep the dow debate, the earnings information, what is going to be more interesting to you, jon? the margins and whether we have gotten to peak margins, or whether people are over or underestimating just how much the earnings growth overall is? jonathan: am i allowed to say both? in my sitting on the fence if i say both? lisa: absolutely you are. jonathan: i can tell you the likes of jonathan golub and credit suisse are saying focus on the earnings. i can tell you at morgan stanley, the focus overwhelmingly has been folks in the margins over the last weeks. tom: i've got to segue here. europe ascended.

jonathan: outperformed, yeah. tom: do you suggest it has a trend and legs to it, or was it a one-off? jonathan: some people believe that catch-up needs to continue. bob doll agrees with that. for me, it is not the our performance on the euro stock 60 so far this year. it is what did not happen the fx market. i was looking for a stronger euro off the back of that kind of equity performance. that did not develop. lisa: honestly, i don't see how the euro could strengthen if the sort of main idea here is that the u.s. has to tighten first. the ecb is not going to tighten first. they are not going to be the first mover. so how are we going to get a stronger euro? jonathan: typically when you get that cyclical upswing, it breeds a little life into a weaker dollar story. what is remarkable is that euro topped out, the strongest point for the single currency this year was the first week of the year. tom: what is amazing is the tots

had a coach then. jonathan: they've got a coach now. tom: they are close. jonathan: we haven't even talked about england-germany yet. tom: more important with the tots. jonathan: some headaches in the city of london this morning. make a sandwich. white bread, brown sauce, and maybe have a point -- maybe half a point just to get back on the road. this is bloomberg. ♪

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>> as this global recovery is unfolding, investors need to think more global in their portfolios as well. >> as countries move out of covid, the demand is going to be very strong. >> this quite a bit of momentum. it is going to spread out into 2022 and 2023. >> you may see some deflationary forces work their way back into the system. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone.