♪ >> the market really starts to doubt the potential for reflation, the potential for growth, that can fly out of control. >> there's always pullbacks and mini corrections. maybe we have a correction ahead. >> fed is as blind as the rest of us. >> my guess is we don't get tightening until after the next presidential election. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: coming into wednesday at all-time highs. from new york city, for our audience worldwide, good morning. this is "bloomberg surveillance ," live on tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. the s&p negative three this morning, down not even 0.1%. it is onwards to vice chair clarida a little later this morning. tom: a lot of people saying it

is a quiet tape. i disagree. the vice chairman conference new -- chairman confronts new lower yields, that negative yielding some worldwide up and away. jonathan: and a payrolls report coming friday. adp claims tomorrow, payrolls friday morning. does that set us up for a more interesting jackson hole meeting? tom: does it set us up for the disappointment of -- yes, that will affect jackson hole. jonathan: you've got to go to china. i really think you have to start in china right now as restrictions start to build and the downgrades start to come through. lisa: people take a look at some of the social restrictions, you take a look at the flight trackers. flights and china have fallen dramatically week over week as people start to hunker down, beijing having issues even with their subway. again, how much is china an outlier, and how much are they

a map globally for this start -stop pandemic? i just want to point out a study overnight that showed vaccination progress is the most reliable metric when it comes to predicting g10 fx performance, highlighting how much this all comes back to that. if you can't get vaccination rates up, you can't get a recovery. tom: what is so important here, the doctor from johns hopkins said it is not only vaccinations, but the efficacy of those mrna vaccinations that make it happen. jonathan: which is why i go back to lisa's point. sterling has been the poster child for a lot of this. the effectiveness of rolling out the vaccine more quickly. sterling really got a bit off the back of that. tom called me last night. he said i will give you $100 per hour if you keep bringing up the vanguard story just to prove i was right and let me take a victory lap. [laughter] so tom, do you want to go there.

he wanted to reiterate it after you called him out yesterday. tom: no, she had company. jonathan: she's going to do $1000. $1000 if you get vaccinated at ben cardin -- at vanguard, vaccine. tom: look at the trillions we spent on this, and some of it is necessary, but every company, and not just a business -- not just business, just get them refunded by the government and move on with a 90% vaccination rate. jonathan: what you just said is interesting. you think the administration should offer a tax credit based on whether you go and get vaccinated or not. tom: they should offer a dollar to dollar savings to business to assist people in getting vaccinated now. jonathan: lisa, final word? lisa: the focus for me is should we be looking at the carrots or the sticks. at what point do you start mandating things? that is where the focus of gravity is right now among

governments and businesses. jonathan: equity futures down for. where is the show going -- down four. where is the show going? yields come in almost a basis point. tom: look at the real yield, jon. jonathan: let's go there. i can freestyle with you. that's get it up on the bloomberg terminal right now. -1.21% on reals. citi looking for a 70 basis point move the other way. what would that do to this market? tom: turn it on its head. there's no question, it's a bold call. maybe that's what this time of year is. it is a time for bold calls. jonathan: maybe. lisa: let's bring it forward to what we are looking at today. this ties into the debate, which is how much dynamism there is to the economic recovery. it really all hinges with jobs. that's what market participants are looking at. the adp report not necessarily indicative of the jobs report. however, it is something. we get expectation for 638,000

new jobs out of the private payrolls. you can whisper all you want, but the key issue here is how productive is this, and how much momentum are and given some of the uncertainty around the delta variant that has hampered certain areas. we get the ism services index for the month of july. do we see a slowdown because of the variant that is spreading, because of some of the hesitance people have to go out, because of additional restrictions, whether mandated or voluntary? also at 10:00 a.m., fed vice chair rich clarida delivering a speech at the peterson institute. the issue here is how much will he indicate in terms of the importance of the job report, and terms of how many jobs report he needs to see that are strong for he indicates he wants to see eight quicker tapering -- to see a quicker tapering of the monthly bond purchases. jonathan: we haven't seen a speech from him since may. the gold is this wide for him to

say whatever he wants to say today. the speech will be on outlooks come outcomes, and prospects for monetary policy with the peterson institute. he can say whatever he wants to say. tom: he's got to look forward, got to get out and explain the character and equality of their new ex post approach. jonathan: let's bring in steve chiavarone, federated hermes for folio manager. what narrative are we about to find? steve: i think we are going to be searching for a little while longer. i think there's just a number of factors right now where even a couple of weeks ago, you may have thought you knew the pace, or you thought you would knew how things would play out. you get an unexpected jobs number this week, you have progress on the virus, you felt like you had some sense of what

the path towards tapering mike lee, and that is really been thrown into disarray, and part by the delta variant, but probably more acutely by the response from regulators on what is going on. we will see with the jobs number is this friday. we believe what you have to do when you are looking at a period of uncertainty like this is fix your eyes to the horizon. i think you are in for some chop here. tom: let's go to the steve au th reality. you can withstand higher multiples. are some of these higher multiple equities the kind of higher multiples that devalue? jonathan: are you still there, tom? tom: i am just going to keep talking. jonathan: he's getting a call on skype. [laughter] steve: thank you for keeping me around there. tom: we get it going either way.

i'm sorry, the growthiness people are worried about looks awfully valued to me. steve: i think you can withstand higher yields in this market. if yields move higher, -- let me say it this way. the equity market is in pre-good shape either way. in a slow growth environment, you will do it on the multiple, but it is going to be more growthy parts of the market. if you get something higher because of growth in inflation expectations, i think the market can still move higher. it is just going to happen more on the cyclical side. that is the trade we have been playing for. that is not what has happened the last couple of months. we think it still does after this period of chop. lisa: what is the best bet in terms of outperformance going forward, equity? steve: sam: i still -- steve: i still think in this impairment with the 10 year where it is, your best risk-reward is in the cyclical parts of the market.

i'm talking about energy and materials and industrials. we think this is going to last longer and be higher than the market anticipates, and in nine environment, we think you will see yields rise over time, even if it is going to take a little while over the next couple of weeks. lisa: in other words, you are expecting yields to rise and for cyclicals to outperform. how much? is this going to be simply that you see big tech lose value, or that they like behind -- or that they just lag behind? steve: tech was up 5% or 6% over that period. you had value cyclicals that were up in excess of 30% or 40% in that environment. so i don't think there is impending doom for growth. i think they're still very much a long-term winner. but i think you will see value outperform if that is right. even if you look since 2011, which has been in low rate

environment, outside of the pandemic you've never had yields this low. so unless you believe you're going to have high recession risk over the next 12 to 24 months, there should be upward pressure on these yields. jonathan: steve, good to catch up. apologies for the technical disruption. no idea who was calling you. higher yields and the bond market. what does it mean for this equity market? this is what the cemented -- the team at citi had to say. "we downgrade the heavy tech in the u.s. to neutral. we remain overweight u.k. equities. it is a big call, and a call that many people share. tom: maybe not the magnitude they share, but i will take your point that they are moving in that direction. that's the angst out there. that's the fear that is out there right now. that is a magnitude call he's making. jonathan: -1.21% on the real

yield, many people believe there's some asymmetric risk here, that yields surely can't go lower. but how may times have we heard that over the last year? tom: on a magnitude basis, the citibank call is huge. jonathan: that's the equity portion of the argument. lisa: it is hard to be an accurate -- a macroeconomic hedge fund right now because if you make a bold call, you can have a bold loss. that is something we can get into with the short call. jonathan: i am going to give you the space to do that in a couple of minutes. tom: i can open up the space. yesterday afternoon, what she did to me in a game of parcheesi , i got crossed. i had three pieces left. [laughter] jonathan: record highs into wednesday. from new york, this is bloomberg. ♪

ritika: the first word news, i'm ritika gupta. researchers say vaccines targeting the delta variant may now be needed. studies in england found the vaccines' protection was down from 83% earlier. that indicates that current shots are less effective. in china, the widest outbreak since the start of the pandemic is hampering tourism and extending during the peak summer holiday. that has analysts reviewing economic growth projections. the highly effective delta variant has spread to almost half of china's 32 provinces. the cdc has extended a ban on evictions for parts of the u.s., with high transmission of coronavirus. the new ban will be in place through october 3. president biden warns that the

new ban will face legal challenges and may be found unconstitutional. cbc capital partners will invest $3.2 billion in the spanish la liga. the firm will take a roughly 10% stake. the investment comes at a crucial time for the league. like other soccer leagues in europe, it is seeing its finances hurt badly by the coronavirus pandemic. 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 momentum of a $20 trillion plus economy in the

u.s., the resilience that has been the result of the fed rescue program, and probably an overabundance of fiscal stimulus, tells us that we got further upside here. jonathan: that is one of the most bullish on the street right now, looking for 4700 on the s&p 500. alongside tom keene and lisa abramowicz, i'm jonathan ferro. here's your equity market right now. futures down 0.1% on the s&p. in the bond market, down a basis point to 1.1621% on a nominal 10 year yield. on a real yield, -1.21%. tom: we all have different data screens on the bloomberg terminal. yours looks different than lisa's looks different than mine. but the fixed income section on my screen, i am sort of saying, really? jonathan: it is europe, it is asia, it is japan. and lisa, the short squeeze in the bond market, and a victim of that short squeeze, too. lisa: this hedge fund came out

with a 10% loss in its macro fund, and the idea being this had been a hedge fund that had not seen a loss in about a decade. it lost $1.5 billion in this rates squeeze, and it just highlights it makes sense for yields to go higher, for that yield curve to actually steepen. that is what everybody was betting. it just shows how you can absolutely -- you get absolutely slammed if you try to bet against this bond market, and this is one thing i am concerned about. how much are the bears getting eaten out of the market, creating a potential fragility that people are underestimating? jonathan: great reporting from the team, revealing that fund's pain. cvs, beat and raise. beating on earnings, raising the outlook, and they've also boosted the minimum wage to $15 per hour, effective july 2022.

it is what this administers and wanted to do, but private companies are making that decision themselves. tom: it is $100,000 at you name the wall street firm, but the bigger deal is they are getting it done. the new amazon statistic, i think it is $17 an hour. jonathan: the market doing the administration's work for them seemingly right now. tom: dow futures, jon wants to hear, -53. emily wilkins joining us with bloomberg government now. it is real simple. at least we knew what we had. president trump, dr. fauci, basically president trump making up his covid policy day-to-day. dr. fauci is still there with president biden. but what is the structure of the white house response to where we are now with this pandemic? to me it is a mystery. emily: you have heard president

biden continue to talk about the delta variant, continue to highlight the fact that the variant is more transmissible. you have seen the cdc bring back some of that masked guidance. but at the same point, throughout this entire process, if there has been one underlying storyline, it is that there is really only so much that the federal government gets to do. we seen a lot of this happen at the state level, at the local level, and you are seeing that continue. you're seeing that now with the white house's approach, instead of trying to do a national mandate, say these are the areas where we are having the most problems, let's just try and focus on these areas where the rates are going up. tom: i put out my book for labor day today, "the end of myth." i can't say enough about this book about the fabric of america. andrew jackson and the jacksonians, president trump had injured portrayed in the oval

office -- had andrew johnson -- had andrew jackson's portrait in the oval office. it is president biden against the jacksonian tendencies. emily: he is trying to overcome what we have seen from local leaders saying we are going to ban masked mandates. at this point, it is messaging which is why you keep seeing dr. fauci on these sunday shows and other white house officials coming out to talk about the virus, about covid-19 and the white house response from what they would like to see. if you listen to them, a lot of what they do is try to make the are given for why people should be getting vaccinated, why we need to be wearing masks again. it is really a messaging war at this point that the white house is playing. lisa: meanwhile, the cdc taking the lead on the eviction moratorium in certain places for health reasons, targeting certain areas that have been more hard hit by the pandemic,

in particular the delta variant, in particular in the south. meanwhile, president biden giving a confusing message about his legal authority to take action. what is the path ahead for a more permanent option as this will obviously face legal challenge? emily: the white house and congress, what has been discussed behind the scenes has been how is that going to go. the supreme court ruled in a 5-4 ruling that congress's power lasted until july 31, and after that they would need new congressional reauthorization for this eviction moratorium. congress can't deliver that at this point. but what the white house has essentially done here is bought democrats a little bit or time because if this does go through the courts, if this does get challenged as expected, that is not going to necessarily happen overnight. that is going to give democrats in congress some time to figure out what they are doing. it is going to give speaker

nancy pelosi time to potentially get people on board, chuck schumer to figure out the senate, as well as plan the distribution for the $50 billion that congress has allocated towards helping renters stay in their home, as well as making sure that landlords get their payments, taking time to make sure that money goes out. once again, we will tie that back to the state and local. that is something that the federal government is really having to encourage states and localities to do. this money is out there. you guys need to make sure it is getting to the individuals that needed the most. -- that need it the most. jonathan: good to hear from you. even the best of us have to change our plans. the former president i now understand is going to have a smaller birthday party. tom: that's what they are reporting at axios this morning. they have responded to where we are. the former president at martha's vineyard goes from a really significant fest back to friends

and family. frankly, we are all doing this with the bombshell here in new york city that you've got to show that vaccine past to get into a restaurant. jonathan: the problem has been that we are not all doing this, and often, the people making decisions, whether it is the federal government or the state level, haven't been doing it. i am the king of california over the past 12 months, and others, too. lisa: there's also a question about mixed messages from health officials. tuesday, the national institutes of health director urged parents to wear masks even if they have been vaccinated at home with their children, if the children could potentially be exposed, then backtracked after a lot of pushback. the risk tolerance is individual , and frankly, it really comes down to a personal choice in addition to also having a broader health message. tom: we don't have time here, but this is math. we are conflating third order effect with the first-order effect, and the first-order effect is get vaccinated. jonathan: coming up in the next

hour, on the markets, we will shift gears. tom: talk about yield. yield is stunning. jonathan: this bond market, 1.1 61% on tens -- 1.161% on tens. this is bloomberg. ♪

so many people are overweight now and asking themselves, "why can't i lose weight?" for most, the reason is insulin resistance, and they don't even know they have it. conventional starvation diets don't address insulin resistance. that's why they don't work. now there's golo.

golo helps with insulin resistance, getting rid of sugar cravings, helps control stress and emotional eating and losing weight. go to golo.com and see how golo can change your life. that's golo.com. ♪

♪ jonathan: live from new york city, for our audience worldwide, equity features declined by about 0.1% on the s&p. on the russell, down 0.3%. citigroup out with a note of the morning from the team, downgrading u.s. equities to neutral. here's why. it is the call on the bond market. switch up the board. i want to look at the tenure nominal and real. your 10 year nominal yield, 1.161%. they are looking for a move from 1.161% -- 1.1621% back to 2%. within that, real yields right now, -1.20%. they were about 1.21% a moment ago. they are looking for a 70 basis point move higher.

if we get a 70 basis point shakeout on real yields, they are saying for the equity market, it means go long japan come along u.k. -- pan, long u.k. -- japan, long u.k., and cut u.s. to neutral. tom: dow 20,000. jonathan: i think they are looking more at the s&p 500. to me, the additional call is in foreign-exchange. if you are about to see a move back to do percent on tens -- to 2% on tens, i want to understand how the european bond market behaves in the mix. september the key date for a whole range of reasons. it is clear the fed is going to have a conversation about tapering. the ecb, the central bank governor from latvia says he does not want to have one in september. euro-dollar with a bit of a gap lower today, back to $1.1861.

it is some marginal weakness. but i do wonder if you get a 70 basis point real yield move stateside, what it means for this market, and whether european yields get left behind. -50 basis points on the two-year yield in italy, basically in line with the depot right. tom: you talked about this 3, 4, 5 days ago. i think it sets up a growth differential between the u.s. success and a nonphysical -- a non-fiscal oomph in europe. jonathan: once you start to get a policy differential, you can push it through this fx market. we just haven't had a big one in a big way just yet. some things to thing about. let's get you some movers. here's romaine. romaine: the biggest of the biggest of them all is robinhood. this was a huge debacle last thursday. the company has the dubious distinction right now of having the worst ipo, the worst single

day debut on record for a company of its size. since that debacle thursday, the stock has rallied about 30% over the past three sessions, up 14% in the premarket. tom: it is. and what is important here is with robinhood, you've got to ask the obligatory cfa level two question. romaine, you've got to dive into the fundamental details of robinhood if you passed the level two cfa exam, if you've done that. romaine: thank you for that segue. it is a huge milestone for me. it means it is about 30% -- it means i am about 30% closer to being as smart as taylor riggs. this is notable because this was a fundamental story for amd. the stock had been a huge laggard for most of the year, despite being the star of the show back in 2018, 2019. stocks rallied about 20% over the last three weeks, on a

five-day winning streak. if it closes in the green today, that will be six straight consecutive highs. we got lyft earnings last night. they were surprisingly good. they turned a profit. the street was looking for a loss. the president was on bloomberg television. he said this isn't going to be a one-off thing. this will be consistent profitability. uber is going to report after the bell. the street is looking for a loss. whether they suppress to the upside remains to be seen. obviously, lyft is more of a pure play ridesharing company. uber a little more diversified. that could hurt it a little bit coming forward, so keep an eye on that. also getting roku and etsy after the bell as well. tom: romaine bostick, thank you have -- thank you as well. right now, ira jersey with us of bloomberg intelligence on the bond market. we really wanted to do a one-hour interview with you. we will compress it down. what matters to you in this new

low yield environment? ira: realistically, the only thing that matters is the outlook for covid and the effect it is going to have on the economy. i think that is really what has been driving the market for the last couple of months. the delta variant, how pervasive it has been in other parts of the world, and now it is feeding into the u.s. psyche a little bit here. fears about lockdowns, that is really what is going on with the bond market right now. i am sympathetic to that morgan stanley call you mentioned about yields being higher by year-end. i do hope that is going to be the case, but this is all about fear right now, and the bond market is benefiting from flight to quality. tom: jon, why don't you pick it up and frame it around the magnitude of this citigroup call? jonathan: morgan stanley looks for a move back towards 60. citigroup looking for a move back towards 2%. real yields right now, -1.21%.

do you speak to anyone who think they can go much lower than this? ira:ira: everyone i talked to on the institutional side doesn't like it, but there's two factors that continue to push real yields lower and lower. you look into tips etf's and bejewel funds, and they are just insatiable. there are a lot of people who want inflation protection. they worry that inflation is going to be high or maybe there will be more disruptions, and you have seen cpi prints than what we have seen in the recent past. the second is the federal reserve is still buying a lot of the tips market. remember, they only owned 7% of the tips market in february of 2020. now they own almost 30%. so they have significantly increased their ownership. so liquidity in that market wasn't like it was a nominal treasuries in the first place. then you add to that these flows from retail investors into etf's

and mutual funds, and suddenly you have a recipe for lower and lower real yields. i think that there's a big risk to real yields, where if real yields backup 50, 60 basis points gone there's going to be a lot of negatives on people's statements, and maybe they will rethink those negative. but as i mentioned, fear is still gripping these markets. jonathan: they are worried about the opposite. together with the fact that the federal reserve owns about 1/3 of this market now, are people buying tips as insurance? if you don't own insurance for inflation in the year ahead, haven't you got a degree of career risk? isn't that in the mix right now for pms? ira: here's part of the issue, there's other ways to take inflation risk. the problem i have with owning tips out right, most of these mutual funds take a lot of interest rate exposure and a lot of interest rate risk, whereas let's say inflation does go up to 5% or 6% and stays there

persistently. you are not likely to see real yields stay where they are. those are likely to rise up from -120 basis points to maybe -50 or zero. if that happens, you want up losing on a market basis. tips are a great investment in a great inflation hedge if you hold up the individual bonds to maturity. but owning mutual funds and other wrappers like that means that you are always taking interest-rate risk that maybe you don't really want to be taking. so i really worry that there's a lot of people buying these products that don't really understand the underlying risks that are inherent in that market. lisa: just to put a bow on this idea of 30% ownership of the tips market by the federal reserve, has the tips market ever been more divorced from giving a true indication of inflation expectations than it is right now? ira: that's a good question because at 2.3%, which is where 10 year tips are pricing

inflation at the moment, it is not obvious that that is going to be wrong. so i think the inflation component might be actually suggesting that the market is going to be right and is going to have plus or -25 basis points of inflation. but the question is real yields being so low, keeping number will yields lower than they should be. look at fair bar you -- fair value models, and we are 25 to 45 basis points to low on actual yields. so closer to 1.50% seems to be more fair value, but i think it is the flight to quality and some of these technical aspect of both the tips market and the nominal market keeping yields as low as they are. those can take a long time to go away, so this isn't something that is necessarily going to snap back in the next two to three weeks. but over the course of three to four months, potentially we can get into that range which is a closer estimation of fair value for the market. jonathan: great to have you on.

timely conversation. ira jersey of bloomberg intelligence, thank you. want to bring up the nominal curve in germany, twos, tens and 30's, just to show you where this bond market is right now. on the others out of the atlantic, and the german bond market, yields negative through the whole curve. twos, tens, 30's. that 10 year back to the depot right on the ecb for the first time since february, -50 basis points on the german tenure this morning. tom: these are the instabilities that confirm with the swiss franc as well. it is very global on the bloomberg screen. it is clearly global. you've got to say it is off of worry about this pandemic. jonathan: that whole curve negative. lisa: if you take a look at the total value of negative yielding that globally, it has gone up to $7 trillion. that is the most since january of earlier this year. you are at this pool of debt

that pays you absolutely nothing, and it raises the question, is it wrong, or is everybody else wrong about the dynamism of the global economy? jonathan: that depends on when you get it, -- when you get in, when you get out. tom: we don't have the time here to dive into this, but this is really important. everybody sees yield, and there's a point within stress and crisis where you shift to a price analysis. are we there right now? jonathan: yields negative through the whole german curve. saw that a little earlier in the week. seeing it again this morning. from new york city this morning, good morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. for our audience worldwide, heard on radio, seen on tv, this is "bloomberg surveillance." ♪ ritika: with the first word news, i'm ritika gupta. senior, kratz ranging from

president biden to state legislators are calling a new york governor andrew cuomo to resign. a report from the state attorney general outlined claims that he sexually harassed 11 women. cuomo could face criminal charges. he says he has never touched anyone inappropriately or made inappropriate sexual advances. a new study says those children who get coronavirus recover within a week. researchers look at more than 1700 british children and also found that 1.8 of them have symptoms that left for eight weeks or longer. that suggests that so-called long covid may be less common in children than in adults. the sec chairman gary gensler is setting down the path for crypto exchange traded funds. in a speech, he said an etf that complies with the sec's strict rules for mutual funds could provide investors with the necessary protection.

tbs boosted second-quarter earnings that beat expectations. the chain raised its 2021 forecast. sales growth rose thanks in part to a boost from foot traffic then rated by the coronavirus vaccine. cvs administered almost 7 million shots in the quarter. the cocreator of the coronavirus maxine now has a barbie doll in her honor -- coronavirus maxine now has a barbie doll in her honor -- coronavirus vaccine now has a barbie doll in her honor. 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. ♪

♪ >> there's a variety of things that play, but it has certainly been a challenge for us in

staffing for restaurants, and it is putting pressure on wages, which is what you see in any capitalist system, so employers like mcdonald's are having to pay more now on wages. jonathan: and many other companies, too. that was the mcdonald's ceo. you can watch that into nights episode of "the david rubenstein show -- in tonight's episode of "the david rubenstein show." alongside tom keene and lisa abramowicz, i'm jonathan ferro. this wednesday morning, equity futures down seven. a softer equity market after an all-time high at the closing yesterday's session. into wednesday, we are negative a little more than 0.1%. yields lower by a couple of basis points, 1.1539%. the recent low, 1.1 to 60% -- low, 1.1260%. tom: a breakdown in the 10 year yield now from 1.18% in the

matter of an hour or so. with us now is david rubenstein, of course, founder and chair of carlyle group. david, i look at the challenge here, and to me, mcdonald's is fascinating because it has 200,000 employees, but well in excess of one point 9 million when you add in the franchises as well. what is his approach to 2 million bodies? david: well, it's a lot of people to manage, but their system has been largely a franchise system. they own about 10% in the united states of the mcdonald's. they want to be an owner so they know what it is like to own and they can give directions based on having been an owner. most of the employees at mcdonald's are actually franchise employees. tom: but he has a challenge in this pandemic. did you speak to him in your peer-to-peer conversation about what do you actually do?

is he going to give out 1000 cheeseburgers for everybody who gets vaccinated? david: well, they aren't doing things like that. they are trying to get their biggest focus right now to try to get employees to staff the operations because it's harder to get employees. some employees left during the covid period, so now they are giving $50 for an interview, and if you are at the company for more than 90 days, i think they give you an iphone. lisa: this raises issues for existing employees as well because they probably want an iphone and an extra $50 as well. across the board, you are seeing wage increases. cvs raised its minimum wage to $15 an hour. this comes on the heels of amazon and walmart. how much pressure is there to pay more? do we have a sense of where the cap is, how much higher these salaries can go? david: the legislation that was considered in congress that did not pass would raise the minimum wage over five years to $15.

mcdonald's is now beginning minimum wage they start at $11. the legal minimum wage is $7.50. but they are not quite yet at $15, so i suspect the pressure is such that they will probably have to increase a bit because it is hard to get employees. young people have many different things they can do now, and it is tough to get people to work at these jobs sometimes at the entry level. lisa: is this the key issue, getting the pay high enough to get people into the workforce? or is there some thing else creating this friction that has kept a great deal of people on the sidelines? david: some people are afraid of working in environments where they might not feel everybody that they are working with his vaccinated, so we don't know if everybody coming into mcdonald's is vaccinated, for sure. so there are lots of issues. but i think it is largely the case that people have been off the workforce for 18 months, and now getting them to come back is

not easy. the salary is higher than the men wage -- the minimum wage, but not as high as some. the principal issue that they are facing as well is how do you get people back into mcdonald's. they found they needed to have a lot more drive-in, a lot more digital. it used to be that you went to mcdonald's, you ate there. but now most of their sales are coming by drive-in or drive by, and then digital, or delivery. it is much different than it was a few years ago. tom: whether it is your conversation with jeff bezos or here from mcdonald's, it is about scale. is it overrated, overplayed? david: no, scale is very

important. mcdonald's has been so successful because it is bigger than everybody else and they can afford to make changes and move it across the country and around the world. the reason the mcdonald's has done so well is that everything is the same around the world. when you go to mcdonald's in paris, where the biggest mcdonald's in the world is in the chantel issei -- in the shop sally say -- in the cham ps-elysees. jonathan: i did not know the biggest mcdonald's in paris. you can catch that conversation tonight on bloomberg tv. from new york city this morning, good morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. we are down about 0.1% on the s&p, negative six points. going into the opening bell a couple of hours away with an adp

report in between, and shortly after the opening bell, at 10:00 eastern time, we hear from the vice chair of the federal reserve, mr. richard clarida. tom: it is going to be interesting. i was at the mcdonald's in paris after spending $41 on a martini. jonathan: needed a cheeseburger after that, did you? tom: i thought the people at amex would be upset, so we did a nombre deux. jonathan: you get that french out. i can rely on lisa to look at the bond market now. do you want to look at nominals or reals stateside, or do you want to look at europe? lisa: i want to look at nominal yields across the board because i think real yields are confused, looking at the chips, and the statistic that ira jersey throughout. the fed owns 30% of the chips market -- the tips market in the united states. but are we talking enough about

the distortions the fed is creating with their ongoing bond purchases, and whether they can stop? what happens if they stop and there is a material dislocation in the market? jonathan: so the next time someone says what is the bond market telling us, will you have a different answer to whom, gloom, and real fears about the future in a, growth? lisa: no, i will still have those. i think that is the underpinning. you can't have things where they are if people don't have some sort of sense that we are not going to be growing at a very fast pace in the future. but i think it is confusing. i don't know what the exact message is, except for it is a very manipulated market. jonathan: it is always authentic, always real. tom: i don't think it is a manipulated market. jonathan: you don't think this is a discarded market -- a distorted market? tom: it is distorted. distorted is different than manipulated. jonathan: that's fair.

that is a conscious decision. there's a legal aspect to that. lisa: as i was suspecting. tom: yes you where. [laughter] jonathan: tom didn't. jonathan: she beat me -- tom: she beat me last night and boggle -- last night in boggle. jonathan: this is bloomberg. ♪

in business, it's never just another day. it's the big sale, or the big presentation. the day where everything goes right. or the one where nothing does. with comcast business you get the network that can deliver gig speeds to the most businesses and advanced cybersecurity to protect every device on it— all backed by a dedicated team, 24/7. every day in business is a big day. we'll keep you ready for what's next. - [announcer] imagine having fuller, thicker, more voluminous hair instantly. all it takes is just one session at hairclub. introducing xtrands. xtrands adds hundreds or even thousands of hair strands to your existing hair at the root. they're personalized to match your own natural hair color and texture, so they'll blend right in for a natural, effortless look. call in the next five minutes and when you buy 500 strands, you get 500 strands free. call right now. (upbeat music)

> it is able market, but there's a lot of -- it is a bull market, but there's a lot of violence going on. >> a pullback in yields could cause some of that volatility. >> the fed has come out about this. the will not be happy to see the tenure approach 1% -- the 10 year approach 1%. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. a simulcast with markets on the move. on radio, on television, jonathan