♪ >> businesses are seeing consumers go out and spend. they have cash on hand. >> there's a liquidity money story that is being overlooked with the panic about second derivatives. >> the u.s. economy is going to get to -- you would have to expect real yield of zero. >> a very strong cpi print could unnerve the market. >> the fed is incredibly opaque. if you give it a lot of gold, it doesn't -- a lot of goals, it doesn't have many tools to hit all those goals. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: goldman sachs results 25 minutes away. 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. tuesday morning, equity futures unchanged at 4377. jake hidden -- jp morgan behind

us. goldman just ahead. tom: you really wonder if it is buy, buy, buy. do you sell on the news today? we got nice bloomberg data on that. what i am looking at is the bank index and what gerard cassidy said about the big tanks, the mid-ask, the small banks -- the big banks, the mid-banks, the small banks. on a technological basis, they have the high ground. jonathan: we've got a high bar for goldman sachs. we understand fixed income trading and sales revenue came in a little lighter. from the investment banks out there, the fees business doing quite well through the first half in a way that we expected. lisa: when you talk about fees,

advisory fees on mergers, acquisitions, ipos, massive. you see that activity continue to build. goldman sachs has a dominant lace in a number of industries in that area. again, the focus i think was jp morgan and the earnings call we are going to get in about 90 minutes is on the loan growth and on deposits, surging 23% at this time when we are looking at what people will spend that money on. jonathan: goldman just around the corner, then cpi in america. lisa will run you through what to look out for and the rest of this week as well. into tuesday, record highs on the s&p 500. we take a little bit of weight off it took 4375. outside of that, yields unchanged on tans. crude going nowhere. the euro slightly negative, down 0.1%. lisa: you asked earlier, are banks still hinged on the dynamism of the economy?

are they leveraged bet on economic growth? they haven't been as much because of the lack of loan growth. when will that change? we did get jp morgan earnings. that is my question. how can we know what the future will bring at a time when all of the different signals are so muddied and banks are facing the same type of money signals that we are? what clues will people hang onto to remain optimistic about this asset class? bloomberg live also hosting the sustainable business summit throughout the day. we will hear from bps ceo, as well as a white house climate advisor. the idea here is we are still dealing with climate change, and this is becoming one of the main issues that central bankers have started to try to tackle with whatever tools they have. the u.s. june cpi data, i'm looking at the different components.

are we seeing a broadening out in the increases in prices that we have seen pretty dramatically throughout the year? they have been led by used auto car prices. we are expecting an increase in record prices, but do we see an increase in rents and some of these other industries that are coming back online? jonathan: thank you. cpi in america just around the quarter. goldman is lower off the back of these numbers. jp morgan lower by little more than 1%. goldman firm or by a little more than 0.1%. in 20 minutes, 25 minutes, we will hear from goldman. what sets us up for goldman in the next 30? tom: they've never had to deal with this, the wall of money they've got. as gerard cassidy said, they've got balance sheets that are truly unimaginable. how do you extricate yourself? you talk about overnight reserves near $1 trillion. jp morgan has its own overnight reserves called the balance sheet.

jonathan: fiscal stimulus has helped these banks in a big way. a whole lot more given what's happened to loan growth. tom: given capital absent -- capital allocation, absolutely. these conference calls are going to be critical when the sell side asks them about use of cash. jonathan: lisa, what is your focus? lisa: i am thinking about the 23% increase in deposits. when do people start spending that money? why are people already spending? why aren't people investing that elsewhere? jonathan: let's ask that question to anastasia amoroso of i capital network. we were all projecting this big

room in growth this year. what the consumers do with their cash has been slightly confusing. what is your read on things? anastasia: the consumers have been venturing out into the real economy, and they have been gradually putting that cash to work. i think we see that in some of the reopening categories. we see hotels that are pretty much back. we see restaurants. we see the travel services that are pretty much back. the consumers have been switching from the durable goods to the services, but to lisa's point, to come back to the banking sector, i think some of the strings in the consumer we are seeing and credit card spending data is going to start to shift to the business sectors. part of the weak spots for banks is part of the industrial loan growth. at economy comes back online, they are going to start to boost

their plans -- there -- there capex plans. i think jp morgan is a sign of things to come for the banking set broadly. this is a solid result, but nobody is surprised. everybody is already expecting 119% increase in this quarter earnings year-over-year. i still think there's more catalyst to come for the banking set. tom: you've got fabulous experience, may be like no one i know on the street, of moving from the stodgy old bank to massive fintech advance like at icapital. do these big banks have the advantage? anastasia: given the balance sheets and the bag tech budgets, absolutely they do have the

advantage. putting that money to work on accelerating the innovation, the question is how much the pace of this accelerates. the reason why fintech's are so attractive to us is because the big banks are not seeing loan growth. smaller banks are seeing rapid chair acquisition. you look at ne-yo banking, digital banks with no physical branches, the revenues of that sector today, probably $20 billion. in five years, that $20 billion goes most likely to 400 lien dollars, so this is a significant growth. i think the fintech's can definitely capture that opportunity in a more pure way than a traditional banking sector can. lisa: are there any real data points within these earnings that matter right now, given the fact that so much of people's view on banks early hinges on

what will happen later on, perhaps q4? anastasia: sam: there's two things to know -- anastasia: there's two things to know. first, where is the bright spot in these results? it is investment banking, advisory revenues. if you look at the strength in the equity capital markets, it is just stunning. m&a had a banner quarter. volumes were up over 200%. ipo's had a banner quarter and a banner year. they are up close to 200% in volume, so the investment banks are reaping the benefit. i think that is going to continue for some time because if you think about the preconditions that have been put in place to support this market, you had zero rates, which lowered investors into areas of higher growth and innovation. inflows are going into somatic funds and etf's, anything from robotics to space tourism.

as a result, the public markets are offering premium valuations for some of these high tech, high-growth stocks, and those reaping the benefits are private companies, tapping this ipo window. they are going public, and probably getting a valuation that is 3.5 times more than the last private round after the first day of trading. so private equity investors are reaping the benefits, but also the banks of course. so i think that is going to be an area of strength for some time to come. the other point of this is a lot of optionality. we don't know what is going to happen in the future, both can tell what is priced in, and we can guess where that may go. loan growth is flat today. that is likely to inflict higher . interest rates are at zero today . the markets are pricing in a rate hike and a half through 2023.

what if we get there a little faster? what if we increase it a little more? then there's capital returns. this excess capital these banks have to return through share repurchases, dividends, all of that very favorable to the. jonathan: always good to catch up -- to the sector. jonathan: always good to catch up. thank you. tom keene did you are for -- did you refer to her former employer as a stodgy old bank? tom: the truth is, they are technologically leading. anastasia mentioned it. their budgets are unimaginable for mid-cap and small-cap banking. jonathan: we will hear from goldman in about 20 minutes. jp morgan behind us, goldman in front of us. alongside us to break down these members in just a moment -- these numbers in just a moment. this is bloomberg.

ritika: with the first word news, i'm ritika gupta. white house officials are considering a digital trade agreement as a way to counter china and asia the proposed deal could cover companies -- could cover countries such as china, japan, australia, and singapore. it includes rules of use of data and trade facilitation area the biden administration reportedly will warn american come news of the risks of operating in hong kong. according to the financial times, those risks include china's ability to gain access to data that foreign companies store there. another one of the concerns is a new law that lets beijing impose sanctions on anyone that enables foreign penalties to be implement it against chinese groups. prime minister boris johnson's decision to ease coronavirus restrictions in england has led to growing fear and calls for action. doctors warned that the fresh toll of the pandemic will overburden the national health service, and economists expect

consumer confidence to fall in the coming weeks because of a perceived threat to public safety. new headwinds for the vaccine, once expected to be a linchpin of the u.s. immunization effort. the vaccine for johnson & johnson's cover stock was revised to warn of a rare immune system disorder. . . . the fda added the warning after were hundred reports -- after 100 reports of key on bar syndrome. french regulators say google ignored a decision to negotiate with publishers in good faith in displaying articles on its news service. it is the largest antitrust penalty ever. i ritika gupta. this is bloomberg. ♪

>> basically, we did the easy stuff last year, where people

who had positions went back to work when market activity resumed. now we are in the much harder process of labor market clearing , where people have to find new positions, new jobs. the unemployed people now are jobless. jonathan: that was vince reinhardt of millan investment management. from new york city this morning, good morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. is the price action this tuesday morning, shaping up as follows on the s&p. all-time highs into tuesday, and we just about hold onto them. the bond market unchanged, too. yields basically go nowhere, lower by almost a basis point. jp morgan out with numbers about an hour ago. goldman any minute and next 10 minutes. tom: we are focused on the three zip codes around these banks. i guess we are guilty of that in london and zurich as well. we will see what goldman has to do. what i know is they don't give out toasters when you get

one of their accounts. jonathan:jonathan: i thought they'll stop that? they don't need deposits now, do they? they are doing ok. tom: no, it has leveled out your a 700 gazillion dollar level. right now, jack fitzpatrick was limber government. i want to dub this -- to dovetail this into the politics and the bank earnings we have today. the senator for big banks is named charles schumer. i believe he has a senior position in washington. i want you to link charles schumer, jamie dimon, and mr. schumer's need to win the pennsylvania 17th this of conor lamb, a contested district outside of pittsburgh. link their world and all of these enormous numbers we are talking about in the gazillions for houses in the hamptons, link that into conor lamb and the democratic party's reality. jack: you picked a good

district because conor lamb is exactly the kind of member democrats are worried about losing in those moderate suburban areas in pennsylvania and elsewhere in 2022. the house margin is practically as slim as the senate margin, so that kind of thing is critical for democrats in congress. as it pertains to banking in particular, the banking regulations that the democrats want to do has not quite been as high a priority to get to the floor as the fiscal focus. in washington, the focus has been on the recovering economy and what washington can do in a fiscal sense in that regard, but really, conor lamb and other moderates are who you watch for when you see democrats raining

in some of those progressive proposals on the economy. so banking in particular, i'm not sure exactly how to link all of those three, but the broader academic focus definitely has attracted senator schumer and democratic leadership to avoid anything that may seem extreme and anything that could put somebody like conor lamb in jeopardy. jonathan: our audience on tv and radio are aware that over the last weeks and months, this administration has been pushing quite hard to establish a global minimum tax rate. we caught up with secretary yellen. "i global -- i expect global countries will push for a global tax deal." lisa: which is important in terms of backing some minimum tax deal. we talk about companies wanting

this deal to come to the fore. what do you make of that? is that a convincing argument that republicans will be swayed in terms of having this kind of deal? jack: there still is the outstanding question of if all of this on a global minimum tax would need 2/3 in the senate because of the international aspects of this, rather than treating it as a normal tax bill that would need 60 votes in the senate. there's also the questions of the portions of this, and the easiest part pertains directly to the 15% corporate global tax level that could be open to a reconciliation package. that is something to watch as democrats move forward. i'm not sure if everything relating to this global one of them tax proposal could that,

but some portions of it they feel are aligned with the rules that go against a next big democratic package. that is an outstanding question on what they fit into this package they are currently negotiating. tom: jack, thank you so much. her interview with secretary yellen in brussels she advances forward her view on this combined tax. jon, when i hear the word treaty, i hear timeline and the timeline flashes, and it runs into a brick wall. i'm asking you. you are better informed than i am. jonathan: we are not there yet on both sides. tom: i think we all understand the advantages, getting ireland to cooperate as well, but i just look at the timeline, and when jack fitzpatrick mentions

treaty, that is long. jonathan: and then a couple of moments, we will hear from goldman. second-quarter investment banging revenue, 3.45 billion dollars, up 26%. trading revenue, $4.9 billion. a little letter on fixed income. sales and trading revenue comes in at $6.2 billion. we are firm or just a little bit on equity sales and trading revenue. $2158. second-quarter net revenue, $15.39 billion. second quarter eps, $15.02. a lot of numbers to pour through, but just to give you some of the highlights so far from goldman. tom: they put the quarterly dividend go to two dollars per share. this is what you are going to see, and on use of cash, this is what matters. sonali basak, what you see -- what do you see?

sam: trading still underpins goldman sachs. that trading will be a disappointment for all of wall street. we want to see where the market share gains are. fixed income, just like jp morgan, a little lighter than what everyone expected area consumer revenue is just about in line with last quarter, so there will be questions about how fast that consumer bank is growing for goldman sachs. asset management revenue higher. we are seeing goldman rise in the markets. when it comes to asset management, they are trying to grow when it comes to private equity, private debt as they change the texture of their asset management business within goldman sachs. we will also be looking for costs as we see over a jp morgan, they are higher than we are expecting. so how are people faring in this new environment? jonathan: the stock comes in about 0.3%, not a big move. getting some commentary from mr. solomon.

clients still facing challenges in overcoming the pandemic. we are still working through this, aren't we? sonali: we absolutely are. over a jp morgan, you saw credit card loan balances flat, so you see people still not really taking out loan to get through this pandemic, shoring up their balance sheets. it is interesting to hear him say that because remember, the investment banking revenue in the set of earnings is coming in greater than expected, so as far as the corporate clients go, they are certainly active. we saw goldman sachs for the first six months of the year bring in m&a volume over $1 trillion, faster than they ever have in history. so again, gaining from mergers and acquisitions, but training is still a bigger piece of the pie. lisa: investment banking revenue up 26% year-over-year, another blockbuster moment. one thing anastasia was saying moments ago was that she expects this to continue being an engine

for the banks. do you hear this from executives , that this is not a one-time boom that these kind of -- one-time boom, that these trends will be kind of ongoing? sonali: the thing bankers are telling me is that m&a is not just m&a. you bring in corporate clients to give you that derivatives business, so it can driver elsewhere. thus, it is less capital-intensive. it has a better return on equity than other businesses. but with that said, a much smaller percentage of the business. goldman sachs last year, that was about 7%, and that is the biggest m&a bank on wall street. with that said, i am also watching costs. the reason i'm watching costs because they have to pay these people. they have to invest in automation. those moves goldman sachs is making as well, and also on automation.

it is a matter of whether they can automate it like they have in their big equities does vision. lisa: as jon pointed out, we can't really look into the initial market response to much. however, it is interesting that the goldman sachs shares are down more than jp morgan shares, even though they disappointed in some ways more. what you make of that? sonali: one thing, jp morgan has a lot more tied to the consumer, and those loans are pretty flat had been talking about. the other thing is because the price-to-book ratios of all these banks read goldman sachs is cheaper than both morgan stanley and jp morgan. even with that run up through the year in goldman sachs stock, it is still cheaper. tom: do you arbitrage on the price-to-book long goldman sachs? sonali: i'm not allowed to trade. [laughter] tom: the idea here is they have

11% consumer and wealth management area do you go long goldman sachs with a trading pop and the boom economy, and these shockingly ample ratios on the balance sheet, and shorts jp morgan and traditional banking? is that a strategy that is out there? sonali: i would be watching very closely for tomorrow because citigroup and bank of america, those stories when it comes to consumer banking, whether they are gaining share and trading and investment with this really tough consumer environment, that is the trade-off if you are talking about the short-long trade area. tom: thank you so much. stephen biggar joins us now. let me ask you the question that sonali basak was adamant not to answer here. how do these book value dynamics move? does the giant and wonderful jp

morgan come in relative to the other banks? do the advance their book value ratio versus jp morgan? stephen: i think they do. this is an environment where the banks that have the best opportunity for longer-term growth, more diversification, steadier earnings stream i think are the ones that will continue to get the premium in terms of price-to-book, so jp,'s a company that is extorting their well diversified. they do benefit when capital markets are strong, and as they has been the last four quarters, but of course, it has been goldman sachs' cup of tea in terms of the last four quarters. we had great m&a. we had solid investment banking, trading results starting to pull back a little bit from unsustainably high levels the past few quarters.

tom: do they amend, or do they have a plan to diminish the sterling balance sheet ratios? or do they just let it ride out? do they manage them lower or not? stephen: they've tried, of course. if you are talking about more sustainable capital returns, i think they would very much like to do that still a precarious time for the economy. i think they will probably keep those a bit longer. they do have much more flex ability now in terms of capital returns than they did prior, so the fed has been less of a babysitter in terms of the actual dividend and share buybacks, so they've got that flex ability now to sort of give-and-take between the two. i think that gives them a lot flexibility, and i think they

are writing out this economic recovery and seeing what they can do sustainably for the long-term. jonathan: let's look at the performance so far year to date. there's 20% of outperformance on goldman versus jp morgan so far year to date. we are up 44% on goldman. jp morgan has had a great year so far, but goldman sachs has had a fantastic year so far. tom: jan hatzius coming out with gdp estimates within the report, i believe we had what is important to me is you go back to 2019 for a pre-pandemic compare. if you take two years of their estimated gdp growth, you end up with 11.5% growth, 24 months which is 5.75% per year. the run rate in america is in the vicinity of 2% to 3%. jonathan: gdp growth in 2021 expect it at 6.8% in the u.s..

in 2022, 4 .7%. you're looking at 6.8% this year. they are great gdp figures. if that something that some of these banks can actually leverage? because so far and hasn't translated to what investors were hoping for. do you start to see that happening cute or and beyond? -- happening q4 and beyond? stephen: loan growth has started to resume of this and. that will be the most likely beneficiary for banks is to get the loan balances to expand a little bit, where they have just sort of held back. we think there's a number of reasons for that. confidence previously had not been where it needed to be. you had tons of government stimulus in the form of enhanced and employment benefits or the outright checks to individuals. so americans were flush with cash. but that wears off. the enhanced unemployment

benefits and september. the stimulus checks are gone now. so i think we have seen some improvement in credit card lending. we have seen improvement in auto lending, home-equity as well. i think they do begin to benefit in the back half of a stronger loan growth environment. yields have been a headwind here , with the 10 year pulling back as it has. we think that is more technical and short-term, and we will get a little bit steeper yield curve as the balance of the year goes by. so i think the lending business outlook is a bit improved here than it was even a quarter ago. jonathan: i have to answer the question. is there anything in these releases this morning that will change anything for a bank bull or bear? do we resolve anything with this week's earnings? stephen: it is a great question. it is not a single quarter that

does not a terrific bank make, or a terrific industry or rebound. i think we've had such a great rebound in financial stocks generally that there could be a pause here as we get in a valuation moving into the second half area of course, the comments are going to be pretty important, particularly as it comes to loan growth. in my view, the case for bank stocks is really fourfold, get that we get that loan growth resurgence, a bit of a steeper yield curve, that credit quality remains stellar, not to the point of having massive reserve releases as we are now seeing from jp morgan, and the new much better capital returns, which are demonstrated after a moratorium last year. we are seeing nice return of capital now area so i think there could be a pause here as

we look out to the second half. i think everybody is expecting rates to move a bit higher. that is going to be beneficial for banks. of course, if we get that rebound in loan growth, that is going to be creek was well. lisa: a lot of people seem to leave there will be that rebound in loan growth, and yet we are still seeing deposits grow so much. we are not seeing consumers spend that incredible amount of dry powder people are expecting them to spend. isn't that concerning? loan growth will pick up, but when matters. if it doesn't pick up until next year, want that be a bit of a bear case? stephen: or a pause case, as i mentioned. i don't think it is a reason to sell banks when you have this flat loan growth environment. it is, as you said, a little troubling that consumers do continue to save at the rates they have and banks are flush

with deposits. that is a double-edged sword. it is a great funding source. but funding is not the problem for banks right now. it is trying to get more borrowers out there. i think that is going to have to come with an improved economy. i don't think and grow the economy at the extent we are expecting without some benefit from that return of loan growth. jonathan: got to leave it there. stephen biggar, argus research director. sales trading revenue coming in just a little bit lighter, $4.9 billion was the number. the estimate, 5.0 $2 billion. i want to turn back to sonali basak to get a complete review of what we have seen yet jp morgan about an hour ago, goldman sachs about 10 minutes ago. sonali: we have a better line of costs. you have goldman's efficiency ratio coming in better-than-expected. headcount the unchanged. over at jp morgan, that headcount is a little bit higher. costs are coming in higher than

expected for the full year expectation. it is going to come down to efficiency. this is a story we have seen before on wall street. at goldman sachs, that trading revenue is a little bit lighter than expected. for goldman sachs, almost 1/3 of their business coming in from global markets. we will be watching that closely. we will get a better picture in the coming days when we look at morgan stanley brings in. it is market share gains at the end of the day. we just want to see them gain share, and what we are going to define now is a more normalized environment. that idea of a more challenging environment for clients is something we want to hear more from david solomon on the call. tom: i'm just going to go back to it. you can do this on the bloomberg , the function is dvd because dividends matter. before the crisis, 2006 out to 2021, maybe you going to 2020 to come of the dividend from 0.35

two two dollars a share. it is a money machine. sonali: it is a money machine. the other thing, i sent this to you a little earlier, that value risk number side jp morgan, i don't want to ignore it. that going down to 42, there is a concern coming inside these banks and from their clients. the banks are not going to step in or are not stepping in times of stress. we have not seen that to a great degree yet, some forward-looking expectations, do they expect a 10% drawdown to the rest of the year, a 20% drawdown, or are we expecting things to be ok? if they are reaching hiccups, as everyone is in similar crowded trades, their clients are highly levered as well. who is there to step in if markets get rough in the second half of the year? jonathan: sonali, thank you.

brilliant coverage is always on bank earnings. goldman out moments ago. we are now firmer by about 0.25 percent. let's bring in romaine bostick. romaine: the big tradition is of investors handwringing over whether it is good or bad. you've gone through the numbers on the top, relatively good. there's going to be concerned about those reserve releases. the knee-jerk reaction was to the downside, particularly for jp morgan. goldman does remain firmly in the green here. both of these stocks and most of the bank stocks rallied into the start of this earnings season, see you have to keep that in perspective as well when we look at these numbers on the board behind me. we're talking about fractional moves to the upside on jp morgan , fractional moves to the downside for goldman sachs. the other big story as far as earnings was pepsico, and it was definitely a positive here. we're talking about strong 13% plus gannett revenue growth here. year-over-year, that is about double what the street was looking at on a growth basis. a lot of that came from north american beverages and the snack

segment. you did see a sick decline for quaker oats and stuff that people would eat at home. that is presumably because a lot of folks are getting into the public and eating outside the home. a few other stories moving markets this morning, boeing shares lower here. interesting commentary today about a 787 dreamliner, saying it is not going to actually be able to deliver all that it had planned to deliver on those plans, primarily because of a flaw in the nose. chinese tech stocks getting a bit after chinese regulators signed off on an acquisition that tencent was making. some concern now that maybe that regulatory cloud might listing -- might be lifting. jonathan: alongside tom keene and lisa abramowicz, i'm jonathan ferro. from new york, chris harvey of wells fargo weighing in. this is bloomberg. ♪ ritika: with the first word

news, i'm ritika gupta. senate democrats are trying to find consensus on president biden's $4 trillion spending plan. the president at senate budget committee chair bernie sanders, who said i think we are on the same page. democrats are divided over the size and scope of the president upon proposal. it is intended to include a number of social spending and tax provisions. coronavirus infections in new york city are rising for the first time in months. the seven-day average rate of positive tests has roughly doubled in the last two weeks. one reason, the delta variant of the coronavirus has gained tracked and -- gained traction in new york. boeing will deliver fewer dreamliner this year than originally expected. boeing now expects to hand over less than half of the 100 or so dreamliner's in the desert and

around its factories. pepsico report of the fastest growth in years. pepsico's second quarter revenue rose 14% and the company raised its forecast area the european central bank could take steps to ensure that lenders avoid paying excessive dividends this year. that is when it will likely lift a cap on payouts. member of the supervisory board says the central bank will call to remain cautious. those dampen the possibility did that there will be a surge in bank payouts. i medicaid this -- i'm ritika gupta. this is bloomberg. ♪

♪ jonathan: from new york city, for our audience worldwide, so

much to get through this tuesday morning. good morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. your equity market, all-time highs into tuesday. 4377. equities unchanged this morning. nields lower to 1.3543%. if we can get the banks up, it would be nice to take a look. let's check out goldman and jp morgan. goldman coming in a little bit later on trading. investment banking pretty tidy. goldman up 0.5%. given the sarcasm this morning, worth pointing out the intraday gains, up by more than 20% at jp morgan, a by more than 40% at goldman year to date. tom: in the case of jp morgan, they are going to come out of the conference calls and these guys are going to be grilled on the view forward.

i don't know what that view is. jonathan: i'm with you, it is the forward look we want, and it is the forward look on loan growth that i think everybody wants to see. lisa: i personally think the moves are interesting even though they are not that significant, based on the year-to-date moves come over goldman sachs is already upper already a performed so significantly. lisa: the positive move has been in investment bank revenue. that has seen as expected could to continue. there's some really mixed signals, so jp morgan is more hinged to that. i think that is a big message. jonathan: this is why tom and i could never be the amazing columnist you are because you can take tuesday 50 basis points and turn it into a compelling story. [laughter] tom and i just don't have that. lisa: that was fantastic display of snark. it is at least telling to be able to look at the first read

is. i'm not saying it is the story. this year to date story has certainly been that. in the numbers, it does look like the investment banking area is the bright spot. jonathan: that was genuine. tom: she's fluent in greek. jonathan: guess what she said to me this morning? i said, i'm tired. she said, what about me? i'm seven hours ahead of you. you are on greek time, and you want me to feel sorry for you? is it lunchtime? lisa: it is time for me. jonathan: spare a thought for lisa this morning, tom. she's on crete time still. tom: what we are going to do is migrate. this is the first important conversation we had. you can hear it in janet yellen's phrases. the secretary of treasury has an exceptionally insightful interview.

i look at one single quote here, which literally sounds like it could come out of poland or belgium, or i will let you pick one of the scandinavian countries. here is janet yellen on our common needs. this is a real shift on how the world is going to cooperate to make sure capital income bears its fair share of paying for common needs. is there any history where the congress of the united states gives a damn about common needs? >> what they need to grapple with right now is figuring out whether this needs to be legislation or a treaty that needs to be endorsed and approved by congress, but secretary yellen has told our colleague in brussels in an interview that the republican side will see a lot of requests, a lot of encouragement from businesses saying to protect

american businesses, they will need approval on this deal to end the race to the bottom, but we have not heard a response from the business community yet. tom: i don't have the numbers in front of me. my entourage didn't get them to me. but apple literally in the last number of hours has announced that tim cook has migrated united kingdom profits over to ireland to pay a lesser tax. is that telling, that that is going to go away? >> that is what looks like. the specific conversations did say that ireland will one to make sure they can sell that plan because it is in the best economic interest for ireland itself, but she's clearly signaling a hope that ireland signs on to this deal. lisa: in emphasizing the

business interest here, the business pressure on republicans in particular, is treasury secretary speaking more to europeans, saying we actually do have a consensus coming from united front? >> absolutely. this is definitely a lot of messaging for europeans she has been negotiating with for the past week in brussels and venice , and throughout most of this year so far. it is also a signal to congress and to the business community to step up their lobbying efforts and get this past. jonathan: i hear a rumor a book might be coming from you. is that right? >> yes, that is true. i am writing a book about the strong dollar policy. tom: have the movie rights been sold? >> you can be the star. [laughter] lisa: "a surveillance -- a "surveillance" exclusive. jonathan: good to catch up down in washington, d.c. on secretary

yellen. tom: we are going to go into pillar 1, 2, 3, 4. you are telling me i congressman from kentucky is going to care about the common needs of france? jonathan: it is really difficult. i understand the argument behind it. i get it. united states does not want to compete with ireland on taxes. the problem is ireland once to compete with others on taxes, and other people want to compete and don't want to give up sovereignty on taxes. lisa: there's a question about the european side. from the u.s. side, tech firms are facing potential levies. otherwise, if this could supersede that, could that create some consensus on congress? tom: how does this play in manchester? jonathan: i'm not sure it is on

the radar in quite the same way as it is on this program, tom. do you think people in kentucky are thinking about this? tom: no, that is why it is not going to be a big deal. i agree. jonathan: i think it is on the radar in ireland and a much bigger way area tom: what else -- bigger by. tom: what else beside -- bigger way. tom: what else besides ireland and maybe luxembourg? jonathan: if you have a couple saying we will go our own way, you haven't really sold anything,? tom:tom: i have to go to the timeline. every nation has their political timeline, but when i hear treaty, i got out longer. jonathan: coming up, chris harvey of wells fargo. on the s&p, 4377 area ups today up to 4500 now, just 100 points

south of jonathan golub over at credit suisse. we've got to talk about goldman and jp morgan. we would a hollow more of that -- a whole lot more of that. on radio come on tv, this is bloomberg. ♪

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>> the consumers have been venturing out into the real economy and they have been gradually putting that cash to work. >> when you look ahead, we very much believe the economy will be still growing well above trend. >> we don't see losses in equity markets without an equity market starting to move considerably more than it has now. >> the u.s. is going to get back to a real yield of zero. >> the fed is incredibly opaque. if you give it a lot of goals, it doesn't have many tools to hit all those goals.

>> this "