caroline: from bloomberg's world headquarters in new york, i'm caroline hyde. romaine: let's take a look at where financial markets stand. stocks really, bonds rally, nothing joe: makes sense anymore. joe:joe: the question is, what'd you miss? caroline: the real story has got to be about yields. falling for a second day.

from main to wall street, everybody asking about the come back. red-hot housing market, heavy bonds, urban homes. high cost of lumber, more ahead. first, let's try to unscramble this. joe: rates is such a story right now. all the time in my head, rates are going to go higher, 10 year yield, 1.3%. 1.31. for more, we turn to bloomberg news, what is the story? >> it looks like it. i'm going to say everything kind of makes perfect sense. if you look at real yields, -1.1%.

going to drive out the s&p 500 as well. as for what is actually driving, that is a little bit up for debate. you are hearing more about a, that story has been around since april. perhaps some positioning moves. definitely the economic data side, if you look at the city economic surprise, at its lowest since january of 2021. romaine: that narrative has been around, what has not been around is what we are seeing in yield. talking about the cost of money, you have to start asking the question if money is so cheap, is that a reflection of a healthy economy? >> it is a bit unintuitive to see, even though job growth, maybe it is not as much as people should be, the economy,

it is not in a bad place. the bond does feel a little bit unintuitive from matt. starting from such a low place. already deeply negative when we were talking about the booming economy. there is nowhere to go but down. romaine: in the last year and half, i get a email every month or so saying the rate is going down. caroline: welcome to europe. joe: you've got to hedge yourself on the treasury markets. caroline: how is gold doing? that has been on a tear for the last six days. gold, treasuries, where are the correlations? are any of them making sense yet? we have wanted, for the last decade, that correlation has

been looking a little better. taylor: you can argue bonds are actually starting to again. bonds have been rallying and stocks pulled back a little bit for whatever reason. i don't know if that relationship is back, necessarily. if you look at treasury yields in the relationship to tech, that seems to hold. we will see. caroline: blame it on tech. >> you could, if you want to talk technical's, actually reaching oversold territory right now. we will see if that means anything. that means the price -- because it is an etf, different than the yield. yields are overbought now. romaine: one goes up, one goes down, is that how it works? caroline: difficult places.

romaine: a radio audience can see that, right? we're on radio right now, right? caroline: we will speak with someone from bloomberg opinion about his latest column. this is bloomberg. ♪

mark: the world health organization is urging caution as most regions around the world are seeing increasing covid-19 infections in the last week. more than two dozen countries have epidemic curves that are almost vertical.

officials are acting -- are asking governments to be careful when it comes to reopening so we don't lose the progress we have made in the fight against the virus. a squad of gunmen assassinated the haitian president and wounded his wife in an overnight raid on their homes. the prime minister said the police and military were in control of the security in haiti. haiti's ambassador to the united states had this reaction. >> we believe it is very important for this international manhunt. because those killers are on the loose. we believe their country will carry out. [indiscernible] but, the police is investigating. mark: the white house, president

biden sent condolences on behalf of the american people to the people of haiti and he called the situation there worrisome. a weekend tropical storm elsa dumped rain across florida's northern gulf coast today. the state was spared significant damage, governor ron desantis told reporters. elsa is now setting its sights on georgia, bringing with it a threat of flooding, downpours and possible tornadoes. global news 24 hours a day, on-air and on bloomberg quick take, powered by more than 2,700 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. romaine: at about midnight today, a great column out from john about who killed the recovery trade. this was before we install the

yield -- before we saw yield dropped. joe: it's crazy, people buy treasuries and they lose money. at one point today, it was below 1%. now .96. a big reversal. caroline: we have loved losing money on sovereign debt in europe for years now. joe: here to discuss, john, the story, when the reflation story started. spending, recovery, reversing the 40 year bull market and treasury. in the last two and half months, it is all gone. >> it's interesting you frame it around georgia. that may be the single most important factor here. people got very excited about inflation, it is possible this is all been about biden getting

much more backing than he was expecting to. and steadily running into trouble, as you almost inevitably expect any present to do when they realize they have overstated the potential fiscal impulse. they overshoot both directions. i think probably, the single biggest factor here is excitement subsequently dissipating about what we used to call a blue wave. caroline: excitement around inflation i feel like has reason still to be there. oil was at $76. blink and you miss it, it comes down a little bit. i don't understand why we are's all of a sudden thinking that inflation is not a problem. >> that is what most and current -- what most concerns me, there is nothing other than the transitory elements, such as lumber.

but what has improved in the last three months to make you think inflation is less of a concern. you have seen before, inflation come in on a basis higher than expected. house prices when they go up as fast as they are, you would expect shelter included, an increase into cost. so yes, worries about inflation have decreased almost in proportion to the reasons they have increased. romaine: i thing that jumped out at me in your column, this waste chart you put out. it really showed waste growth relative to the pace of jobs. there was a huge disconnect.

>> what is interesting, if u deem -- if you dig deep into the atlanta fed's numbers on this, the good news, if you are a relatively unskilled lower paid person, for the first time in decades, you will see more of a wage increase than college graduates. the most skilled people have seen their wage come down sharply. but, we are seeing a very dramatic increase in lower skilled workers. those are the people who are increasingly going to be rejoining the workforce over the next matter of months. that could have an effect on prices. joe: obviously, we are talking about rates a lot. including stocks for growth, value, they had 15 minutes, value is back. >> the other way to look at it,

15 minutes of going direct, i missed my opportunity. thank goodness for that, i got another opportunity to buy value. one of the most interesting landmarks, we use the russell index as the growth versus relative valuation of an average. the trend seems to be firmly back in favor of growth once more. no really good, apparent reason. romaine: john, you always have great columns. i know you have a big game to keep an eye on there. >> i may or may not be keeping and i on my phone during the discussion. the danish goalie who speaks english better than any member of the english team is basically , he will be keeping goal and any penalty shootout, i'm not feeling good.

romaine: that is our ua for update. john authers. a lot more coming up on the show. we will talk about a hotspot in the economy. housing. we will discuss the latest homebuilders survey. this is bloomberg. ♪

caroline: today, we are focused on the post-pandemic recovery, how hot it is or not.

when you look at the u.s. housing market, prices of some building materials hitting records. you can't say enough what lumber has been up to. but kind of rolling over. joe: lumber really has been rolling over. we reported a surge earlier in the year. now you see it has a race a lot of its gains. the rest of everything else homebirth -- homebuilders have to buy, anyway, joining us with more insight, ripple osseo, -- rick, you put it on your latest twitter survey, lumber, windows, dishwashers, osb i always forget what that is but something very important. all of it is becoming impossible to get. it seems like it's not easy and it's all getting worse. >> it is not easy. you were talking on -- touching on lumber, it is really pick

your poison on all of the other input costs and supply bottlenecks and shortages. we survey almost 300 builders every single month. we just published our survey. that was the overwhelming takeaway, we are still having just a lot of issues here. the least time -- the lead time on garage doors, usually 45 days, it stretched to six months. just a little bit of flavor of what builders are having to deal with -- having to deal with. romaine: what to they do? they wait for all these components and then start the construction? were they going to go along as they can and pop whatever in as they get it. >> builders are very scrappy. they're slowly starting to figure this out. one of the ways appliances, has

been a headache, a massive headache throughout all of this, i have heard some builders where they're just buying them in bulk. and just warehousing them. so when they need them, they are close by. these are some of the things builders are doing. i think the other thing, because the leadtimes are so unpredictable, the cost is so consistent, they are starting to price homes later in the construction cycle. once the components have hit and they have the guard rails around what matters for pricing the homes, then they will go to price the home versus day one. that allows them to capture not only the price but really price the homes accordingly. have to go to the consumer and tell them we are pushing it on your home, two months, three months, four-month months, that is not an easy conversation.

a win-win for the builder as well as having consisted timeline for the consumer by get home. caroline: what about consistent pricing? and means anecdotally, we are able to push back on the price. they are still building other houses, they need the money to be able to put up the rest. >> we are starting to hear a rumbling of the pushback. the market is still really strong. builders are having to go deeper into the buyer list. the qualified buyer list. because home prices per the survey on the new home side were up 20% year-over-year in june. construction costs of naturally -- up nationally 22%. the pricing situation has gotten tough. we started to hear more builders

to say we are starting to touch or scratch the surface. joe: talk more about the builder response from this perspective. you mention pricing is now done later in the cycle so the builder has more divisibility, how much uncertainty? six months to get a garage door, how else is it affecting the planning of the homebuilders and they look at the rest of the year in 2022? >> i think 2021 is going to be a very rough yearsw7÷■. there is the saying that time heals all wounds. over time, some of these issues should resolve themselves. for us, that is probably not a 2021 story. it is probably more of a 2022

story. really, every industry across the board is trying to do basically the same thing. they don't have a supply, people are scrambling trying to figure it out. it is going to take time for all that stuff to resolve itself. romaine: with regards to some of the structural shifts, the idea is even though prices have gone up, it doesn't seem to have scared away buyer. >> one of the things we track in our survey every month is cancellation rates. cancellation rates are basically nil right now. a builder can say i'm going to take this house and now i can he buyer. and raise the price. traffic rings are still healthy. i think one of the things we forgot about in the peak housing

insanity during covid when really all we could do was think about our homes, improve a home, buy a home, that captive audience. i touched on this the last time we spoke a few months ago. it has started to come off a bit. it is june, we are going into summer, all the way through last year, housing was top of mind and we saw in all of the numbers. now, people are actually taking vacations, getting out and seeing the world, doing fun stuff. that is a good thing, we all need that. we will see it in the housing numbers. caroline: there was a rush to get your home ready, school starts in september, ready for the new office start, when you are coming back. how much is a buyer going to be, companies that want to buy and rent out as well. all i can see is rental prices

going northwards. >> we tufts on the research side, all of housing, for sale, for rent. it is a unique backdrop where you have the for-sale side of housing just firing on all cylinders. a bit of buyer hesitancy. on the rental side, that space is red-hot. i tweeted out something earlier today, for the first time we actually surveyed, we do a survey of building products, manufacturers and distribute every month. tell us about demand from some of these groups that are building rental communities, single-family rental communities. that was the strongest part of the demand for them. that tells you, there are other categories now programmatically willing homes there take yet some of the supply two. caroline: such an interesting take. thank you for joining us.

the stat is amazing. joe: incredible, six months, i can't take over -- get over that, just to get a garage door. joe: uber technology is up next. romaine: have a great evening, this is bloomberg. ♪

>> from the heart of where innovation, money and power collide. in silicon valley and beyond. this is bloomberg technology with emily chang. >> president donald trump -- former president donald trump lawsuit on facebook, google and twitter. we will have