♪ >> 25% of the world is vaccinated. i think this reopening story is only just beginning. >> businesses are ready to reopen faster than workers have been ready to come back. >> we have missed on inflation for so long that the fed is really focused on achieving its inflation target. >> why would we still be bearish on supply? it is going to pick up eventually. >> we are going to experience something i don't think the markets are prepared for, and that is a contraction in personal incomes. >> thank you. -->> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jon: tech stocks looking good. from new york city, for our audience worldwide, good morning. this is "bloomberg surveillance ," live on tv and radio. lisa abramowicz is off today. romaine bostick dropping by. we've got to start with the center of this market. your 10 year, 1.35%.

tom: it is a deep market. you've got to go back to full faith and credit bash -- full faith in credit. we see it worldwide. i know to swiss 20 year positive. that was big news. it flips over. the swiss 20 year yield negative this morning. jon: you went straight to reals this morning. real yields in america, -1%. tom: you can look at this anyway you want. you can look at the actual yield, people screaming i can't make it in yield, i've got to go by amazon for its dividend, or you can look for the real yield, the inflation-adjusted yield, and say that is part of the economy. maybe the word for the end of july and august is stagflation. jon: if you show me a bond market call, i can guess what your equity call is. romaine: it is that rotation back into growth, but you have to wonder what really is being

embraced here. is this really folks embracing growth, or is it an and i growth story? i don't seek -- an anti-growth story? tom: that's a little morning humor, romaine. jon and i are barely awake. but it is about use of cash forward. it is a raging debate about what they will do with all of that cash in a booming economy. romaine: absolutely, tom. jon: is that the response? tom: romaine, on radio and tv, we are used to lisa talking until we have to shut her up. jon: i might have to adopt this strategy romaine is taking with you. up seven on the s&p 500,

advancing 0.17%. this really is the epicenter for all of the price action you have seen in the last 24 hours, the real atlas bid -- the relentless bid in the bond market. the high of the year on a closing basis, 1.7 4% months ago. 40 basis points to go and it was at the end of march. tom: tom: you've got curve flattening down to 112 basis points on twos-tens spreads. what is so important here is how all of that lays out before earnings season. what does this new yield structure mean for the banks? jon: regardless of what they come out with, it will come down to where this bond market is. that will determine the appetite of where people -- of whether people want to be in this market are not. once the price starts to shape the native -- the narrative come of these kind of markets can run

away with themselves. tom: abby joseph cohen scheduled to be with us. she will give us perspective. jon: evan brown with us now, ubs head of asset strategy. what do you make of this? evan: that 40 basis point move lower is no joke. historically, people have tried to write these things off, and i think this happened earlier in this move as well. it is technical factors, it is short covering, it is foreign investors coming in. 40 basis points is really meaningful, and i think the market is reassessing how confident it is in the growth outlook. maybe this delta variant is a bigger deal. maybe this excess of consumer savings is not going to be put to work immediately. maybe the scene you -- maybe the fiscal impulse is going to be pulled back too quickly. we have to take the move in the market seriously. tom: i like that single

sentence, managing risk within a volatile summer. how do i manage my need to be in equity markets with the linkage of where yield is to where the ratios are that support my confidence in equities? how do i sustain stock ownership in volatility? evan: i think it is about the positioning within equities. if we are going to see a pickup in volatility, it means likely the winners we have seen so far are probably going to have the most trouble. so it might be in financials. in might be in energy. these things can reassert themselves, and we expect they will as people get more confidence in the growth outlook on the road, but in the meantime, if we have this volatility as the market is dealing with a change in growth momentum or a change in the policy impulse, than previous winners are going to struggle a little bit. the previous losers like

defensive's, which has almost been a bad word until of late, the staples, health-care, real estate, those might start outperforming over the coming months. romaine: is this really a change in attitudes about the expectations for growth or more about the complexion of what that growth is going to bring along with it? evan: i think it is a question of just how strong growth is going to be. i don't think anyone doubts that growth is going to be strong the rest of the year, and growth is going to be quite solid next year. it is just relative to expectations. he came in with expectations so high, and now there is some questioning of that. so i think that is what is leading to this reassessment. jon: i want to jump in with a call from steve major and the team at hsbc. i want to lead with this paragraph so i don't characterize their you too badly.

"this means a near-term range trading strategy is more likely." then i will go to the quote on 1.74%. "a peak in recovery and high inflation." they maintain the year-end forecast, but that is with looking their long-term bullish for you. on a tactical basis, they have turned neutral this morning. tom: this folds into ubs and the coliseum -- the gaussian distribution. we explore the higher end part of the tail, and you go neutral, but what i find is he states flat out, he looks at central-bank hikes years off. that to me is profound. jon: shorts are lightly covered. i want you to weigh in on this

from hsbc, the distinction between the short-term tactical view and a longer term view. how do you make that distinction on your calls right now? evan: we are always thinking about short-term and long-term, but we probably has the same view in the near-term range bound. we are looking for longer-term higher yields because ultimately, we think the economy finds its footing, and ultimately, the fed gets back on track with its flexible average inflation targeting. that will allow us to tighten more in the future. tom: thank you, evan, for making comments on a rival house's view. we greatly appreciate that on "surveillance." mark haefele wrote a brilliant note for you a few days ago about the path of the fed. is it a gdp foundation path? they are in. a boom economy they've got to

see it slow down. and then at some point, they have to make a decision, right? evan: that's right. they are getting more confidence in the growth outlook. that's why we saw some of this shift last time. for them it is really about inflation. it will be really interesting to see what the minutes bring out later today because it was clear from the summary of economic projections that more and more members are concerned about the risk to the upside of inflation. there's a lot to be worked out here. we had these supply constraints. we don't know how quickly labor will come back. there's also a possibility you get supply constraints that last longer than we think, and transitory becomes more permanent. it becomes embedded in expectations and we see a feedback loop, so really looking in the minutes on how they characterize that later today. jon: evan, good to catch up as

always. evan brown of ubs asset management ahead of -- management, their head of multi-asset strategy. steve major maintaining that call on the 10 year treasury. a little more neutral on the treasury market. coming out of the u.k., some headlines from the prime minister. the u.k. has severed the link between covid cases and deaths are get i repeat that from the prime ministers speaking in parliament. the u.k. has severed the link between covid cases and deaths. that gives you an idea of the change in policy, the change in emphasis that we are getting out of the u.k. more recently. tom: i am baffled by it. he's as much of a scientist as i am. i have no idea what that means. jon: the cases are exploding, and hospitalizations and deaths are not. tom: because the older people have all gotten vaccinated. the pros we talked to our he did about this, that even in the southern states of america, the

older people have gotten vaccinated in a very responsible rate. this is about younger and middle-aged people. jon: totally agree. and therefore, you have achieved a severing of the link between cases and deaths. that is the conclusion from everything we have just said, isn't it? romaine: do we feel good about that? jon: we should feel very good about severing the link between those two things. that is what we were trying to do over the last 12 months. they get us back to living a normal life and treating this particular disease like any other seasonal flu we might get. this was the objective. tom: it is the objective, but societies like australia, spain, portugal, and others -- jon: they have to work through the same vaccination process, and hopefully this is the endpoint. this was the case study right now, together with israel. these are the data points we want to see. if cases explode, do deaths and hospitalizations? maybe they will, but right now we don't see that in the data, and the prime mr. assange the u.k. has severed the link between the two things -- the prime minister in the u.k. is

saying we have severed the link between the two things. in the next hour, wei li of blackrock. good morning. equity firm on this wednesday. this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. the president of haiti has reportedly been assassinated in what was described as a raid on his home by a group of attackers. according to the associated press, he was shot and killed and his wife was wounded. some of the attackers were speaking spanish. there has been growing public anger in haiti over his attempt to hold onto power and rewrite the constitution. there are multiple reports that japan is preparing to declare a new state of emergency in tokyo. that would mean the summer olympics would be held without spectators. earlier today, tokyo reported

the most number of new coronavirus cases since may 13. the european union has raised the outlook for the european economy from 4.3% to 4.8%. that was accompanied by a warning of a higher risk of inflation taking hold because of increased demand. president biden will take on the rapidly growing threat of ransomware against companies and local institutions. over the weekend there was a ransomware attack blamed on russian hackers that affected more than 1000 businesses, with victims and at least 17 countries. the president will meet with agency leaders today to discuss the administration's strategy. the white house calls it a national secured priority. in soccer, italy has reached sunday's final of the european championship. the italians beat spain in a penalty shootout, 4-2. 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. ♪

♪ >> the thing that worries the most is still us. what worries me is how

divided this country as, how democracy is under assault from within. we are still unable for the most part to come together to deal with some of the challenges facing this country beyond infrastructure. jon: that was richard haass, the council on foreign relations president. good morning. alongside tom keene, i'm jonathan ferro, together with remain bostick this morning. update -- with romaine bostick this morning. up on the s&p 500 by almost 0.6%. a nice lift for big tech off of this move in the treasury market. yields are lower again, 1.33 80% on tens. yields are just relentless. tom: no question about it. the bid is there. it is sustained. romaine has only been looking at it for two hours and one minute.

we look a lot at the pandemic this morning. emily wilkins on the brutal truth, which is the computer system of washington is archaic, it is a failure, and it puts soldiers at risk every single day, sailors at risk every single day because they are not in the cloud. what is the back story on what we saw yesterday from the pentagon? is this a secretary of defense who is just furious over this computer debacle? emily: what we saw yesterday, the huge news that the pentagon's and billion-dollar contract for micra soft is now set to be divided in new contracts between amazon and microsoft, is this something the pentagon says it needs in terms of defense, and terms of security? we still don't know all of the final details. amazon will have to submit a proposal, and there's a opportunity for other corporations to become than this

as well. at this point i think we are watching closely to see what is going to be suggested. we also have the statement about the rnc hacking that occurred. other raymond some -- other ransomware hacking's are occurring around the u.s.. this month we are seeing hacking is again related to groups that are in russia. jon: is this a part of the infrastructure push now? is there renewed effort on this front? emily: to a certain extent, yes. there are pieces of this that are in the overall infrastructure and wider reconciliation plan. obviously those bills are being hammered out by lawmakers who are not currently in washington this week, so we are not

accepting any major news on that front. but that is something that they are looking at, particularly as we are seeing not only companies, but also the federal government really be impacted by these hacks. the rnc is in the news today, but the democratic national committee, they have been hacked in the past as well, so this has been a one on one thing. jon: where are we in negotiations now? emily: president biden is headed to illinois today to continue making the case for why an infrastructure bill is needed, and not just the bipartisan interceptor bill, but the wider so-called human infrastructure element of health care, child care. biden is still really needing to make that pitch to the american people as negotiations go on. one thing the white house would really love to do is point to polls showing how popular president biden's plan is, so a

big part of the plan is for him to sell it. we are waiting for further details. we are waiting for lawmakers to write and release the language, really showing the details of these bills, and that part is all being the go shaded behind-the-scenes right now as various lawmakers are vying for their top priorities to get into this legislation. tom: i'm wondering -- romaine: i'm wondering if some of the proposals that are part of this infrastructure deal end up being obscured or maybe just absorbed into the broader budget discussion in a way that may blunts the impact -- that maybe blunts the impact the white house is looking for. emily: i think that is why biden is in illinois today. we have seen him travel the country in the last several weeks and expect him to make more stops to continue this pitch, continuing to talk about it. the federal government is doing a lot right now. they are working on the budget, working on the defense bill authorization, working on the debt limit. one thing biden wants to make sure is what they're doing on

infrastructure, imparts because they are hoping what they do translates into a win for them in the upcoming midterm elections. romaine: i have to ask you about yesterday, a grim anniversary, the six month anniversary of that insurrection at our capitol building. we have yet to have a real investigation on what transpired on the day. is there any sense that more people can -- more republicans are willing to join this commission? emily: there are reports that house leader kevin mccarthy is going to be appointing republicans to the select committee that democrats established the other week. that committee is going to be h democrats, five republicans -- going to be eight democrats, five republicans.

but the committee has the ability to call witnesses, the ability to hold hearings, and the ability to really dig into this matter further and continue to dig into it because there's no deadline on this committee's work, so we could see the committee go well into next year with their discussion and investigation of the events of jenny ray sixth. jon: emily -- of january 6. jon: emily wilkins, thank you. one subject we haven't touched on all morning, just how focused are you on the team and what has been happening with didi and what china has been up to over the past week? romaine: this was all the talk yesterday, still all the talk today. the idea that not only are chinese regulators starting to rain the men, but i think there's reassessment by a lot of regulators and investors about whether you want to stay invested in these companies with that cloud still hanging over them. jon: i know i question as well over this variable interest entity framework that was introduced a couple of decades ago to allow some of these chinese firms to list in the united states.

what i find amazing about this, there are certain senators in washington who have made a big effort to do something about some of these chinese companies listing in america, and now it seems that the chinese authorities are making that decision for them. tom: i totally agree. i really take issue with the headline stream yesterday. to me, this was all about beijing, all about politics as well. had the weibo fiasco with reuters and others, and then up and down we went. i just think you are absolutely right. this is the federal politics of china preempting all. jon: are you surprised we haven't heard more from washington, that a foreign company came to the u.s. for a significant amount of money, and the chinese communist party made its move several days later to clampdown on that company? tom: i don't get is on their radar. they are worried about trying to get the primary season started in 2022. i take your point, they should say more about it. maybe gary gensler will say

something about it. jon: coming up, abby joseph cohen of goldman sachs. a timely conversation on what feels like for many of you an inflection point in this market. 10-year gilts down a basis point. from new york, on tv and radio, this is bloomberg. ♪ ♪

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♪ me and you have all the fame we need ♪ ♪ indeed, you and me are we ♪ ♪ me and you singing in the park ♪ ♪ me and you, we're waiting for the dark ♪

♪ jon: live from new york city, on tv and radio, here's the price action this wednesday morning. good morning. equity futures advancing a little more than 0.1%. you will notice where the performances come on the nasdaq 100, up 0.6%. the why, we need to go to the bond market for the why for everything at the moment. that is the epicenter of all the price action. start with nominal's. just south of 1.34% on tens. 40 basis points to go to the top of the year. i keep going back to the end of the first quarter. that is when yields peaked on a nominal basis so far this year. 30's are some 2%. the nominal's don't get it done. you need to look at real yields for the move that took place in yesterday's session.

your 10 year real yield, a nice round number, -100, -1%. just what is going on here? i think february holds a clue. in the middle of february we had this explosive repricing of growth, lee assessing the future and the cyclical impulse of this economy. real yields much higher. that was a positive growth shock. now we are rolling over, so what does that tell you? this is what a lot of people are confused about right now because the data still looks good. the ism is still north of 60. that is fantastic. but we are focused on rate of change right now and not levels, not cumulative gains, but what those numbers look like and the deceleration from what we were expecting in q1 to what we are now talking about in q1 of 2022. tom: it is all about the narrative. we all have our narratives and stories, and mostly it is about the humbling of certitude when

you look back 5, 6 months. tom: and what determines narrative -- jon: and what determines narrative? it is always price. when you get to moves like this in the moves we had yesterday, that is the kind of price moves that are going to aggressively reshape the narrative. they go very quiet when you start to see the bond market with a yield sub 1.40%. tom: it is about what changed yesterday, that mixture of nominal and inflation guesstimates, and it was a real yield that was a jump condition. jon: big tech has had a lovely little run over the last week or so. romaine: absolutely, and that is partly because of that board you just had with the real yield at -1%. that has given a little bit more impetus to rotate back into some of those big cap tech stocks.

you talk about apple, talk about amazon hitting a record high today, google hitting a record high. micro soft as well. take a look at apple today, 1.4318%. that high was set all the way back in january, so it is ability relative lag are here -- relative laggard here. trading in the premarket slightly above that today. all of the big cap tech names up about a percentage point or more in the premarket. the other talk of the town still continues to be some of those chinese adrs. didi down for a full street -- for a third straight day. i want to turn your attention to x come. a lot of these companies selling shares in the united states, a lot of these are coming to go back home. xpeng had a so-called homecoming

listing today in hong kong. the trade ended flat on the day. it is interesting because one impetus for doing these trades was because of the potential for u.s. regulation and u.s. scrutiny, and now the concern is that it is really the chinese scrutiny that may call these companies back home to china and back into the private market. tom: but also back into a central bank that is acting as part of the communist experiment in china. those are stunning headlines, jon ferro. jon: coming from the state capital, raising the possibility of an rrr cut, the required reserve ratio, to aid the economy. some support for this economy that, let's be clear, reopen first, recovered first, and that recovery has really started to mature in a way the u.s. economy quite hasn't just yet. tom: some of the international back and forth leaves our conversation before earnings season. abby joseph cohen has been a

partner since goldman sachs since i think it was 2008. she is there advisory director and senior investment strategist, and arguably no one has ordered america to participate in the markets like abby joseph cohen. we are thrilled she could join us this morning. reaffirm this morning why we need to participate in the stock market, given the sum of all of our fears. abby: good morning to you, and thank you for inviting me to be here today. what we know about the stock market over a long period of time is that if you have confidence in the economic outlook, equities are usually the best place to be, and clearly that has been the case for an extended period. i think one of the important things for investors to think about now is valuation. you want to participate in equities, but you want to make sure you are doing it at the

right price. one of the things that you and your colleagues have spoken about very clearly already this morning is that interest rates may be becoming less friendly than they have been towards valuation. when we look at the valuation models that are used by so many investors and so many analysts, including those at goldman sachs, the general sense is that the market is roughly at fair value, and that sounds not bad. if you believe this will in fact be a protracted economic recovery and expansion, not a bad thing. however, the valuation becomes less appealing if interest rates rise. my colleague david kostin has been saying for a while now that he thinks that fair value for the s&p 500 this year is 4300 which is pretty much where we

are. one more point, and that is when you have fair value, there's no margin for error. if there are disappointments beyond interest rates, disappointed on opec, for example, over the last few days, that is when you start to see a big increase in volatility within the market itself. tom: so many would say that none of what we are living right now within your economic:.uó at cornell a few years ago. for example, and i do this for my colleague jon ferro, how do you respond to the confidence to invest given this colossally odd negative real yield? abby: great question that we are asking ourselves as well. the answer is very carefully. we are in an unprecedented period both with regard to an extended length of time for these negative real yields -- by

the way, they have been bigoted real yields in europe now for quite -- they have been negative real yields in europe now for quite some time, and also with regard to nominal interest rates, so when we run our models , we are looking at both those nominal and real yields, and recognize that we truly are in uncharted territory, so let me say one more thing, as somebody who used to be a quantitative analyst. i want to say i am a reformed quant. i used these models as a starting point. i don't use them as gospel. i use them to give me some direction. are we undervalued, fairly valued, overvalued? once we have that general sense of direction, what could go wrong, and what could go right? as we take a look at things now, the things that could go wrong include commodity prices. we have seen what opec has done. this could be more of a problem

for markets outside the united states, so in the u.s., commodity prices are actually fairly small component of our total cost. the second thing that i am perhaps even more worried about has to do with public health. we have had these incredible vaccines, extraordinarily effective, and now we are bumping into problems with regard to distribution. in the united states, we think this will be a regional issue rather than a nationwide, but if you take a look at the reopening of places like europe, it is much more problematic. the distribution in europe of the mrna vaccine really has been lagging. it is one of the reasons that the gdp expectations in continental europe is below where we would like to see it. jon: the airlines have suffered because of that, and the cyclical story in many ways

sector to sector, the airlines have peaked. in the minds of some people, they are struggling. the banks are starting to struggle as well over the last month. but what's interesting is that you turn to your process, and for the following question, i am far more interested in the process. the debate right now on the cyclicals is the debate it has been over the last six months. is it just a short-term reopening trade, or some thing more durable, something more sustainable? what is your process to distinguish between the two things? what are the signposts you look for? abby: we are also looking at the idiosyncratic opportunities because just because a particular company happens to be in a particular sector or industry according to the s&p definition doesn't tell us as much as we need to know, so we are looking at how individual come an ease have positioned and repositioned themselves.

i'm looking for a move in. we think there will be an infrastructure bill of some sort . obviously we are not privy to the negotiations now in the congress. we think there's a desperate need for spending on infrastructure because there's also a need for private engagement in capex. one of the things we have seen in the last decade or so has been this decline in the use of corporate cash flow for these purposes. we have seen much more of it than usual go into things like dividend payments and share repurchases, but dividend payments may continue to increase, but if you are a corporate cfo and you look at your current share price, you say, do i really want to be repurchasing at these levels? that is one thing that, in addition to the needs to expand fiscal capacity, may÷r lead to improvements in capex.

so the short answer to your question is we do think that there will be movement towards some of the industrials, and let's recognize that industrials are all over the lot, and we need to look at the international trade aspects of this. some of the companies that have repositioned themselves well for the 21st century needs, including things like renewable energy, more efficient processes , the use of improved metallurgy, and so on. some of these are u.s. companies. some of them are outside the united states, but are important suppliers to u.s. companies. romaine: do you think the impetus for some of that capex spending and to finally get back to levels we saw in previous generations, that that is going to come at the behest of these companies? or do you need a little more government involvement to move this along? abby: let me be careful when i discuss the numbers here because i don't think we are going back

to where we were as a preventative the total use of cash flow because of the change in the composition -- we need to be looking at things industry by industry. the thing that worries me most about government spending has been the significant emphasis of spending on things by the government that corporations don't usually spend on. let me be more specific. over the last several decades, going back to 1860, the u.s. government has been one of the major investors in long-term basic research, and what we have seen over the last 20 years has been a decline in basic research spending as a percentage of the federal budget. i think this is a mistake.

we have to keep in mind, for example, that those terrific mrna vaccines that we all are so happy to have now, that initial research was done by spending given by the nih 10, 15 years ago. jon: abby, you get that call. it's going to be david kostin. david is very worried you might make a call. right now we are at 4342. abby: i have to tell you, that was my granddaughter calling. it's her sixth birthday today. jon: abby, why don't you take the call? [laughter] tom: abby, take the call please. jon: tell her happy birthday. abby: i will call her in just a minute. jon: we are going to let you go. it is good to catch up. you want to make a more important point than happy birthday? abby: i'm going to sing happy birthday to her, and you don't

want to hear my voice. [laughter] so basically, the federal government has been the basic provider of funds for research, but also for infrastructure, and we have seen a notable decline in that over the last 20 years. we just need to get that to where we were, and that would be a string nearly helpful for long-term economic growth. jon: thank you. it is good to catch up. abby joseph cohen when, comb and sex advising director senior and essman strategist. david kostin right now at goldman, 4300. tom: let's talk about this. david kostin, 4300. you know they are going to look at earnings and cash flows and go up. tony dwyer, you've got to be in the market. to me, the great call on this show, jon kyl up published -- john golub published and said you've got to ignore it. it is arguably the call of the first half. ben laidler, killing it. jon: 4600 the top end on wall street.

the medium right now, 4300 on the s&p year-end. romaine: i think that is going up, and a lot of people talk about the disconnect between the s&p 500 and the rest of the economy. the s&p 500 is out in front of that, and those numbers have to come up. jon:>vat coming up in the next , rick mishkin, former federal reserve governor. from new york, this is bloomberg's -- this is bloomberg. ♪ ritika: the president of haiti reportedly has been assassinated , according to the associated press. the country's interim prime minister says the gunmen killed him at his private residence and wounded his wife. things have grown increasingly unstable since he took office in 2017. the biden administration official has spoken to both saudi arabia and the united arab emirates about their standoff

over oil production. the white house is encouraged by ongoing opec talks. prices rose after opec members couldn't reach a deal on pumping more crude. hurricane elsa has weakened to a tropical storm in the gulf of mexico. it is excited to make landfall today north of tampa. top winds reached 70 mouse an hour. it is a concern that elsa could push dangerous storm surge into tampa bay, raising ocean levels up to five feet. in new york city, former police officer eric adams has won the democratic mayoral primary. mix the brooklyn borough president the overwhelming favorite to be elected mayor in november -- that makes the brooklyn borough president the overwhelming favorite to be a lipid mayor in november -- to be elected mayor in november.

-- is offering existing shareholders extra voting rights. 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. ♪ >> so inflation is going to moderate, and i think that is going to provide some sort of temporary relief to some of the doves on the committee, but i think the bigger issue is that we are transitioning from one inflation story to the next. the fed doesn't get a chance to catch their breath. jon: isn't that the truth? neil data there -- neil dutta there, renaissance capital. here's the price action. equity futures up seven, advancing 0.17% on the s&p,

bouncing back to 4341. outside of that, and the bond market, 1.3480% off a high of the year on 1.74%. we are 40 basis points south of the high of the year. from steve major and the team at hsbc, the market is increasingly sensing that yields may have already peaked this year. hw% tom: some optimism on cash flow from abby joseph cohen. right now, david wilson, and this really dovetails in on our fashion front. we noted that lady gaga has called pink this summer's color, and this is something we used to do routinely in the investment world, go to the pink sheets, now the so-called otc market. we don't talk a lot about this like we used to, do we? dave: no, we don't. that is what made it interesting to pop up into latest report out

of barclays, talking about signs that speculation has peaked in u.s. stocks, looking at cryptocurrencies, meme stocks as part of that. but beyond that, looking it over-the-counter stock indexes. something called the otcqx composite really covers the market, and then you have another index called the otcqb that focuses on one some of the more speculative companies. they have behaved a bit differently over time. we have seen the otc q x basically trapped the -- basic leak track the s&p 500. lately it has pulled back as much as 4.3% from a high in the middle of last month. then there's otcqb, which peaked as much as 20% from there, so we have really seen the speculation come out of that segment of the market. tom: you and i know people used to live in the pink sheets, now they are running whatever the meme stock is at the moment.

are the pink sheets dead because everybody else is playing roulette on their couches? dave: they were playing roulette on their couches so to speak in january and february when these stocks were taking off, so what we are seeing in terms of things settling out with the likes of gamestop and amc and other stocks is really being mirrored in what is happening in the over-the-counter market if you look at those indexes. that is the point as much as anything. they are both telling a similar story in terms of speculations, at least according to deshp ande. romaine: i try to discern, are people still active in this market, whether there is broad-based support for some of these record highs that we have been hitting pretty much for the past couple of weeks here? dave: volumes kind of tailed off a bit, no question. but we are getting ready for second-quarter earnings reports to come out, and if nothing else , that provides a focus for the

next several weeks and may encourage at least some trading here. that is hanging in at record highs if you look at the s&p 500 , a succession of records over the last couple of weeks. so it is not like the volume is really telling that much different of a story at to what we are seeing in terms of prices. jon: didi getting knocked around again in the premarket. if you've got a take on what is happening with some of these companies listed in america? dave: very simple, the government is talking tough, that they are planning more regulation in those companies. that is the sort of thing investors just don't like, let's face it. didi is kind of the poster child at this point for that tougher approach, but to the extent it carries over to the likes of alibaba, jd.com, baidu, or any of these other companies, you have to be concerned about what happens to their business going

forward, to the extent that they face more regulatory risk. jon: good to catch up. i think it is a conversation we've got to have. just how investable are they right now, and what is the balance around them? tom: i think it is done. why do we think beijing is going to budge? is there any delusion that they are going to budge? i don't see it. everything we have heard from president xi for x number of years, from all of the chinese scholars, they are going back towards mao. . jon: i find it difficult to find out what they are thinking. when it comes to the chinese communist party, they have been pretty open about it this time. not happy, are they? romaine: isaac a lot of people appear to act shocked about this, but they have been relatively consistent about this idea of where the guardrails are for some of these companies.

it is just that some of these companies decided to test those guardrails, and we are seeing these give those back a little bit here. tom: can't you see jon ferro at sun valley? i am thinking like a black turtleneck thing going, with maybe a blazer. black turtleneck, black blazer. romaine: do you ever wear anything other than the black suit and tie? jon: this is all i where. tom, all he wears is a bowtie. this what we are familiar with. this is it. why wouldn't you where what people are familiar with? you don't want to disappoint them. romaine: i wasn't aware. tom is recognizable. jon: tom encourages the recognition. if you are ever in a bar, he encourages the recognition. tom: can i recommend that we send ferro to sun valley next week? jon: do you just went to get rid of me? what would you like me to do in sun valley?

you want me to go to do yoga and go on one of those hikes? tom: you can do that. i'm sure there's a yoga session going on. jon: did you watch "succession?" tom: i've never watched it. jon: you really need to watch. they go to a version of sun valley. it seems to be a great time. romaine: there's a lot going on down there. tom: luck on the tv screens of finance, like "billions" and all of that, we've made an appearance. jon: on "billions," yes. i think on "succession" as well. the trailer for the new season is out. i believe season three comes out in q4 of this year. tom: and of course, as we look at the quality theater of "lien's" -- of "billions" and "succession," we've got to go to "love island." have you watched the new season? jon: i think it comes out next week, the u.k. version. season seven of "love island u.k."

believe it or not, this is bloomberg. tom: we are lovingly markets. jon: we are. heard on radio, seen on tv, was yields holding these levels south of 1.40% on tens, this is bloomberg. ♪

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♪ >> the data is good right now. the problem is that it is not good enough. >> 25% of the world is vaccinated, so i think this reopening story is only just beginning. >> businesses have been reopening faster than workers are ready to come back. >> this in for structure package is not going to be as big as -- this infrastructure package is not going to be is because many people hope. >> i think this market is reassessing how competent it is in the growth outlook. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz.