>> we've been waiting for vaccines. we've been waiting for supply to pick up, and supply is exploding. >> a pullback in yields could cause some of that volatility. >> the fed believes they have flexibility. >> our base case is they tee up tapering perhaps as a -- as early as the november meeting. >> you really haven't got the plot. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. a simulcast on radio, on television. we welcome all of you.

we launched on this thursday into two key days on the american labor economy. it really underscores the two americas out there. the worry about jobs, the angst about 7 million employees, and david kostin of goldman sachs goes long this morning. jonathan: goldman sachs are bullish, tremendously bullish. they had a 4600 year price target for 2022. it is now 4700 for 2021, and many have built that gained through the year so far and capitulated to a higher view over the last week. tom: i am going to frame it up to then labeler looking for an unprecedented -- two ben laidler looking for an unprecedented three years of growth. to me, it is part of america doing really well, but everyone else not so much. jonathan: earnings are solid. they have been tremendous. we have seen that over the last several weeks. financial conditions are easy. in 2021, hawkish, let's define

what hawkish is in 2021. it is the central banker turning around and saying maybe the conditions are ripe to scale back qe from $120 billion to maybe $100 billion. that is hawkish these days. i think that tells you a lot. tom: you look at where we are in the jobs report, we've got planes coming out and 28 minutes off of, what do you call it, a soggy adp report? lisa: incredibly disappointing, lower than the lowest estimates. yes, we care because these are all of the countdowns to the friday jobs report. i will decide there's a question when you talk about the david kostin call and the economy that still hasn't gain steam yet. how much are we bringing forward earnings expectations? how much are we bringing forward growth expectations? what kind of returns can we be looking out on equities and bonds? tom: 383,000 claims, a lot better than year ago, but still, not 290 whatever. jonathan: if we get a downside

surprise, is it about insufficient demand in this economy? most people are going to say it is about supply and supply-side constraints. since september is the important month, how many times have we said that? tom: i've just going to tweak that i'm a broken record, so why don't you get to the data check? jonathan: up 11 points on the s&p 500, advancing 0.25%. yield taking a sneak peek at 1.12% in yesterday's session, then a really hot ism print came through. the fed was apparently hawkish. no idea what that was about. euro-dollar positive 0.14 percent. euro-dollar, $1.1854. tom: let us stop. we need to stop the show. i said last night as we put the show together, stop. we need to talk to somebody and calm down about what to do into

september, and for that matter, into september of 2022. seema shah is perfect, with principal global investors, their chief strategist. can you own bonds? seema: look, it is so challenging right now. 1.18%, whatever it is right now, it is very difficult to go long bonds at this kind of level. of course, momentum can take you lower, but if we are looking at the fundamental story with strong growth, strong earnings, and the fed is ultimately moving towards a point where they can start normalizing, it is a really difficult argument to make to own treasuries. jonathan: global opportunities beckon. heard that a few times over the last few months. where do they beckon now? seema: well, there's a couple of reasons. you've got a global recovery and play. i think the most interesting part of this is that you've seen it kind of move from region to

region through the progress of the vaccination. so we started with the u.s. europe has had a fantastic couple of months. although em is looking pretty dicey at the moment, there are still opportunities going forward. in this kind of environment where it is really difficult to make any decent returns, you need to be looking at where is the next thing hasn't yet been tapped for that vaccine progress. jonathan: i've heard from u.s.-based investors they like the u.k. i am told they like japan. japan has done nothing for me this year. do you like those markets right now? is there a reason to pivot away from the u.s. equity market that we have seen so far towards the u.k., towards japan? seema: like you said, japan has been such a disappointment with the global recovery. typically, japan should do well. it just doesn't seem to perform. we do think there is the opportunities for vaccine progress that give a jumpstart again and japan, but i agree, it is difficult to stay positive

about japan. i do wonder if they've had a bit of a heyday already over the last six months. we need to see more action from the government, more stimulus plans. what are they going to do to get this rally going? certainly, the u.s. does look good, but there are always opportunities globally. we need you need to -- we know you need to be undiversified, and we know there are opportunities in em. lisa: do you agree with david kostin's view at goldman sachs that we are looking for 4700 for the year-end on s&p and 4900 by year-end 2022? seema: we still think there's a lot to pay for within equities. if you look at the fundamentals, earnings growth has been fantastic. we are seeing companies showing real pricing power, which does fill us with some positivity going board. i think the big question is bond yields. if we get to that 2% level that people saw pinning down for the end of the year, that is going

to make it much more difficult. we don't think 2% is likely at a slightly lower level, and in that kind of environment, u.s. equities can continue to perform well. lisa: can you walk us through a scenario in which bond yields get to do percent from the reaction function in equities? i'm confused by the scenario that will lead to 2% yields and how that will trickle into equities. seema: two months ago, if we had been seen yields hitting 2%, that would have been a steady rise through the rest of the year. i think equities could have digested that. at this point, where yields are, from now to the end of the year, that would be a very sharp move, and i don't think equities could cope with it. but together, you need to have the growth boom really once again taking off. you need to have the fed clearly indicating that tapering is on the agenda, and you just need that momentum to be there. positioning to us tells us that it could shift. i meant him could come through where you get a huge overshooting on whatever your

fair value perspective is. but we need a lot of the stars to align. tom: the challenge here is our history of em, is the history of 1992, i'm guessing ecuador. mexico came along in 1994, and on and on. is the great surprise out there that em falls apart as the developed countries adjust over the next 24 months? seema: i think so. i think a lot of investors, including us, we are looking at em as a long-term opportunity, where your long-term growth forecasts are going to come through. once we've got covid behind us, especially for those countries, we would expect a lot of those benefits to come through. but particularly with emerging markets, it is simply not a homogenous market. you have to be picking countries and sectors very carefully because there's a lot of differences, and as you know, policy and politics become a far

more important issue for em. jonathan: we got to leave it there. good to catch up. appreciate your time. seema shah, prince bookable investors out of london -- principal global investors out of london. what we like to do is give you a better picture of where these strategists thought we would go, where we are now, and where they think we will be from here to year-end. in the middle of last year, we were coming off the back of an 11% gain of the s&p 500 through november. many people thought we were pricing perhaps too aggressively the cyclical upturn off the back of vaccines, which had tremendous efficacy. these are the forecasts, the most list forecasts on the street, and the middle of december into year end. 4400 on jp morgan, 4300 at goldman sachs. on that date in the middle of december, we were at 3600 on the s&p. yesterday we closed at 4400 on the s&p. i want you to remember how i felt in the middle of december when we heard those calls, things like 4300 at goldman,

like 4400 at jp morgan, even things like 3950 at deutsche. that sounded tremendously bullish when these forecasts were being put together, and this market has just ripped. tom: you walk through that nicely. what is so important here is the kostin call is an extrapolation of the current trend. he is not talking about a level of. he is saying i have faith in the present trend, and that is what the brave souls did last year. you mentioned the end of 2020. i am still not overly tots and the wolves. they tied at 1-1. jonathan: when did that happen? is that recent? tom: what december of last year. jonathan: you went back to a game last year. why do you remember that? tom: because they should have won, and they didn't. the wolves are always surprising. jonathan: thank you, tom. lisa, save us. lisa: we are talking about the upside surprises in earnings. we are talking about how the s&p

has defied expectations and has marched upward. what i find fascinating is that you have seen earnings beat again and again in astronomical beats, while the economic data has been to pointing, some of the most disappointing in about a year. i am trying to square this idea, the fact that economists are actually overestimating recently some of the economic data, but underestimating corporate profitability and corporate growth. jonathan: margins have held up. they have been able to pass on higher costs, top and bottom line growth. that has been the story, hasn't it? i just wonder whether those margins hold up. that is the key question, i think. that holds the key to performance going into the new year. your equity market up 11 on the s&p 500, up 0.25% on the s&p. good morning. this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta.

president biden is laying out an ambitious goal today. he wants half of all vehicles sold in the u.s. to be emission free by the end of the decade. automakers say that can only be achieved with a better government investment in charging stations and other infrastructure. china has imposed new travel and movement restrictions in an and have to stop the debt -- in an attempt to stop the spread of the delta variant. public transport and taxi services were curtailed in 144 of the worst hit areas nationwide. in beijing, train service and subway usage were limited. but dern says it's coronavirus vaccine at corunna says it's coronavirus vaccine remained effective -- moderna says it's coronavirus vaccine remains effective through a third booster shot. while, third-quarter profit and revenue beat estimates. -- is cashing in on the high prices for the commodities it mines and trades.

glencore announced almost $1.2 billion in dividends and share buybacks today. surging metal prices drove earnings to a record. the biden administration has approved its first arms sales to taiwan. it is selling 40 self-propelled -- to the island. the deal is almost certain to be denounced by china. 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. ♪

>> i would expect something between 2.5% and 3% in 2022. i think it is going to be more

persistent. it is going to come down, but not as fast as what many people have and l -- have in mind. jonathan: that was jim bullard. from new york city this morning, good morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. here's the thursday morning price action. about 12 minutes away from initial jobless claims data and america. equity futures advancing 0.25% on the s&p, inching back towards all-time highs on the s&p 500. yields going nowhere, 1.1819% on the 10 year. $1.1848 on euro-dollar, positive 0.09%. tom: for all of you on radio and tv, steven ric -- steven ricchi uto of mizuho will join us. before that, ben emons writes

incredibly thoughtful pieces on central banks worldwide. i am going to cut to the chase. the great economist jon ferro said a while back, are there any hawks left? ben emmons, are there any hawks left? ben: i think there are. i think james bullard may be is one of them, even though he's now considered a dove yet i think a hawk is about risk management. they are looking at inflation above target. they think it is transitory, but they don't want to take a full chance on it. so there is some level of hawkish and us or hawk -- of hawkishness there. so you cannot be a traditional hawk. you've got to be more flexible. tom: how does the theory you write about that our listeners and viewers angst about, how does that fold over into market reaction? ben: i think the market at the moment is taking the fed on its word that you are dealing with inflation that could moderate over time, so that results in a

flatter yield curve, but you can't go that's flat that you are in economy still above the growth trend. that would be strange, with the yield curve coming closer to inversion. so i think the fed can normalize somewhat against the backdrop that inflation is not as transitory as it may seem, but at least not as sticky either. so i think the market has a good vision on the fed from here. lisa: going forward to tomorrow, we are going to get that labor market report, the jobs report. how will the market respond to an upside surprise? ben: it is interesting that the dispersion of the labor reports is 1.2 million to 350,000, so we have this huge difference of expectations. you think of upside surprise, it would be much closer to 1.2 million to really get a reaction in the market against the downside, which is may be more sensitive. the adp number yesterday wasn't i think a downward surprise.

it made people wary of where are we with jobs, considering people have been bullish on the economy. i would say this more downward -- i would say there is more downward surprise sensitive he then -- sensitivity than upside. lisa: when there is a downside surprise in the economic data, the reaction in assets is not necessarily what you would think. you would see that same thing with upside surprise. so basically, if you see a stronger labor market, that means the fed may taper sooner. what is the lead through effect into markets if it means bond yields that the longer end or higher or lower because there's going to be a sooner taper? ben: you would think more lower rather than higher because you do lean against a strong jobs report with the sooner taper, it leads to more flattening of the yield curve because you are trying to control the effects of a stronger accelerating jobs

report already into an inflation rate that is above the target and may be more persistent and transitory. so i think you get a curve flattening if you get a stronger report. tom: all of this mumbo-jumbo is about america doing it different. here, we got a negative real rate as well. the angst for everyone is we are at the zero bound. the fear of the hawks is we've got to get off the zero bound so we've got some powder dry for the next recession. how valid is that which? -- is that wish? ben: it is a challenging one because it shows how quickly we get back to the zero bound as we get a shock, that getting off zero is really complicated. tom: but that is about price, not yield. that is about the insatiable wall of money pushing up bills, notes and bonds. is this the fed's fault, that they provided massive fiscal stimulus and they are at the edge of the zero bound forever? ben: i think it is policy indeed

because this balance from the fed that trickled into the system and has contributed to lower rates, not higher rates, yes, this zero bound is a difficult situation. to normalize from that i think will take years to actually do that. think about if we are going towards a decision on tapering, we are going to have to look at the balance sheet, which will have a major effect. tom: jon, you talked about it from days when you were covering the ecb at 17 years old. the bottom-line is europe has done a different. which is better, negative rates in europe or the angst of the zero bound? jonathan: europe's got stuck. japan's got stuck. there is a conversation now as to whether the federal reserve get stuck as well. i've said there are no hawks in the federal reserve. i understand everything is relative here's one of more hawkish lawmakers -- or hawkish

policy makers, robert kaplan. "i think we would be better off to start adjusting these purchases soon come about my comments are not intended to suggest i want to take more aggressive action on the fed funds rate. this is about tapering qe from $120 billion every month." is that hawkish these days? is that really what we think is hawkish in 2021? is it is, it is going to decay while to unwind that and have a real conversation about raising interest rates. tom: secretary geithner are said -- secretary geithner said a long time ago, it will take a long time. when do we start the path towards some normality that mr. emons mentioned? jonathan: they want to aggressively de-link the conversation about tapering and the conversation about rates. whether the market sees it that way in the coming months will be very interesting because as you know, it will be about the next data come of the sequencing for

market participants. the next question after they start tapering will be what about rates. nice of him to come to the studio, ben emmons, medley global advisors global microstrategy director -- global macro strategy director. just around the corner, following jobless claims in america, we will catch up with michael mckee. on the s&p, we advance about 0.25 percent. really stable, muted price action in the bond market. yields at 1.1803%. yields going nowhere. euro-dollar $1.1842. things are seriously calm. wicking up to the news in china that things are building a -- the restrictions are building again.

can we keep climbing this wall of worry? lisa: the answer has been yes. going forward, a lot of people think the answer will still be yes. jonathan: up 0.25% on the s&p. your initial jobless in america coming up. on radio, on tv, this is bloomberg. ♪

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jonathan: jobless claims data 10 seconds away in the united states. live from new york city, alongside tom keene and lisa abramowicz, i'm jonathan ferro. s&p 500 advancing 11 points. yields unchanged. jobless claims hitting the wires. here is mike mckee. michael: we are just getting the numbers and for once they come in pretty much as forecast. 385,000. that is down from 400,000 the prior week. it was revised up to 424,000. initial jobless claims, a significant drop from where they were. the forecast was 383,000. we are just about bang on. the interesting news, the

385,000 will be good news but tomorrow is jobs day so people will forget. we are watching the total number of people who got the benefits, any kind of benefits, 13,156,000. at that point -- actually we are a little off. the numbers that they send out were slow. we have 12,975,000. i apologize for that. that is for the week of the job survey in july. we saw a big drop in the total number of people collecting benefits. does not necessarily mean they all got jobs, but it does mean the labor force flow is moving in that direction from no longer collecting benefits. jonathan: let me revel through

the price action. not much price action to speak of. your equity market was slightly elevated. the s&p 500 advancing 10 points. the curve was bladder. we are still higher -- the curve was flatter. unchanged on the 10 year. foreign-exchange stable and unchanged, euro-dollar around 1.18. when you put it all together, if you take the jobless claims we've just seen, the ism services read yesterday, walk me through the expectations. tee is up for friday. michael: adp has gotten the direction right but not the magnitude for months and months. economists have had a tough time, too. we are forecasting 870,000 jobs created, with a very wide dispersion. 350,000 at the low end to 1.2

million at the high end. economists struggling. we are looking for 28,000 jobs creating and manufacturing. that comes out of the better news from the ism manufacturing index. the question will be how many service jobs do we get. we did see a significant rise in the services numbers. labor force participation, 61.8%, expected up from 61.6%. still a lot of pessimism about how many people can be brought back in. tom: we were enjoying a conversation with ben emmons and then onto you and then steve ricchiuto. you are in the room with chairman powell. you partition fit analysis from qe -- do you partition fed analysis from qe and separate rate dynamics or do much them altogether? michael: i think you partition

them. when they start raising rates, they start to tighten financial conditions and that will have a bigger effect on the economy. i know you will talk to steve about that. at this point look at them separately. quickly mention the trade deficit came in wider than expected, -$75.7 billion. that is a huge number. i could quickly check whether it is a record or not, but it does suggest -- it does look like it is the most -- it may be a record. tom: back to linkedin or andrew jackson, right? -- back to lincoln or andrew jackson? michael: the economy is little bigger than it was in andrew jackson. tom: michael mckee has to do it in real time which is a real art.

john, the partition between flow dynamics and new theory of qe and learning about smoke signals -- it a changed discussion. jonathan: we need to talk about rates. that was the only lever to pull on. what is more important, qe or rates? let's bring in steve ricchiuto. you think qe is the more important tool. when someone like myself sits here and says i think qe does not matter, $120 billion, $180 billion, you think it does make a difference, why? steve: you are living in a world of excess supply and what you need to do is create liquidity that allows inflation rate to actually not get sucked into a deflationary bias. this has been the fed's ongoing

risk. continuing to fall back to their preemptive ways. this is the thing that worries me the most. the interest rate dynamic is not having any impact on the currency. the difference between a near zero interest rate level or a five to 10 basis point negative will not cause people to move assets globally and therefore affect the currency and expose us to global import prices. qe does. it once worked very well at avoiding deflation during the financial crisis. qe2 worked very well to do exactly the same thing and it worked well here until the fed began the process of backing away from being preemptive, backing away from being reactive by laying out forecasts of when they thought it would be appropriate to exit qe. i think they have to trim it back to the pace of nominal gdp growth and leave it. lisa: this is a huge call.

they should never exit qe and the follow-on is they should never shrink their balance sheet. the idea is an 8.2 trillion dollar fit balance sheet is not big enough. how big should it be? steve: i do not think there is an answer to how big it should be. $5.4 trillion, the big expansion was done under the environment of obscenity the huge draft -- of offsetting the huge drag on the economy in the covid-19 mitigation strategy. that is a one-time increase in the balance sheet. allowing the balance sheet to continue to grow at the pace of nominal gdp suggest you are continuing to support the economy. you want that level of nominal gdp to be consistent with 5% nominal gdp growth see you can get a growth rate between 2.5% and inflation of 2% to 2.5% and gives you an environment where you are supporting that inflationary bias in the economy

to avoid the bigger risk of falling into deflation, which japan has done for 30 years. europe is arguably in there with 30 years in the negative territory. europe has gone down the deflation path. their arguments china has gone down the deflation path or is going down -- there are arguments china has gone down the deflation path. they are creditors, we are net debtor. tom: have you extended out this path from a boom economy back to some form of normal? have you extended that out into 2022 or 2023? steve: the reality is the stimulus we are providing is transferring. households have been allowed to deleverage, which is good. increase their savings, which is

good. we have taken wealth from the public sector and given it to the private sector. that ensures you a large sustained substantial air environment. it does not tell you the late of growth you will get it i think in a global deflationary world where we have a deficit of $75.7 billion, basically we have leaked a lot of the stimulus transfer payments. the demand that was created overseas, and yet they still cannot get out of a deflationary bias. we are in an environment where we will rapidly turn back to the 2% to 2.25% growth rate. our forecast as we get there by 2023. jonathan: payrolls tomorrow. what are you looking for. steve: i am in the 750,000 area. either of the numbers is great. i think the seasonal factors are screwed up, given the volatility last year. i do not know how any of the seasonal workers relating to education.

a lot of the other schools have already gone back to the classrooms. whether that manifests itself, especially in the northeast area where people are being more reluctant to start bringing people back, not knowing what will happen is we going to the september school year. jonathan: good to catch up and get your thoughts. steve ricchiuto looking -- 870,000 is your median estimate. 1.2 million down to free hundred 50,000 -- down to 350,000. lisa: i go back to what steve was talking about, that the fed should not exit qe. he does not think there should be an exit strategy in the united states. the implication of that are significant. jonathan: fit coverage can -- fed coverage can get emotional. it is about what the fed will do. we spent way too much time on

the should, we should focus on the will. tom: that is the georgia school, and professor timberlake who i was honored to meet. very elderly at the time. you mentioned mr. kaplan at the dallas fed. do not look at the theory or the parlor game, we try to avoid that on surveillance, and just look at what they are doing, what they are saying come and maybe what they will do offer real data. jonathan: coming up on the open, will be catching up with krishna memani as we count you down to payrolls friday on bloomberg tv, on bloomberg radio, for audience worldwide come alongside tom keene at lisa abramowicz, i'm jonathan ferro. your equity market advancing .2%. your bond market unchanged. from new york, this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. landlords have gone to court to

challenge president biden's extension of the coronavirus eviction moratorium. the alabama association of realtors says the move goes by a ruling by the u.s. supreme court. the president has warned the extension could be challenged and urged lawmakers to come up with their own. new york governor andrew cuomo is struggling to hang onto power. he stayed inside the executive mansion yesterday, day after the state attorney general released a report outlining 11 cases of harassment towards women. andrew cuomo has denied he would step down despite calls from former allies urging him to quit. exxon mobil is considering a major strategic shift. the energy giant may pledge to reduce carbon emissions to zero by 2050. there is been no final decision. exxon will unveil a series of moves on environmental and other issues before the end of the year. penn national gaming is moving to expand -- the owner has

agreed to buy canada media and gaming. it is a top sports app in canada and number three in north america. in china, tiktok owner has laid off hundreds of employees. the social giant is shutting down a significant part of its online education business to comply with beijing's new regulatory regime. those curbs include abandoned -- include a ban on profit. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am ritika gupta. this is bloomberg. ♪

>> there are a very limited number of countries that have begun to administer third doses,

which we would call booster doses. the evidence is evolving, it is moving. we do not have a full set of evidence around whether this is needed. jonathan: day by day -- tom: day by day, movable story. catherine o'brien at the world health organization addressing our fear. we spoke earlier with a chemist from john hopkins. now lisa abramowicz and tom keene with an important discussion on a concept i totally disagree with, which is herd immunity. sam fazeli with bloomberg intelligence wrote a tour de force yesterday on herd immunity. sam fazeli, is herd immunity a valid concept or is it a theoretical we will never get to? sam: thanks very much for having me back on. it is a calculation that can be

made on paper using x number of variables that tell you what you think you will need to do to try to stop the transmission of a virus. while you are doing that, the virus is changing, people are changing, the world is changing. tom: is that a concept for micro background -- microbiology and bacterial biology that is less for virology. sam: certainly viruses have a much higher ability to mutate and evolve depending on the virus. you make all of your predictions based on what you're thinking about the virus. six month ago we were saying the virus does not change very much. here we are with i do not know how many variants we got. that is where the problems arise. lisa: what you make of moderna's intelligence saying there

vaccine was 93% effective six months after the second shot? sam: i think that is wonderful. do not forget the detailed the data was cut from march 26. like i've been saying, it does not have much read through for what is going on now. i would be surprised if the vaccine is significantly more effective than the pfizer biontech vaccine. lisa: can you give us a sense of how important it is for the vaccines to prevent transmission of the virus versus hospitalizations and deaths? when we talk about health officials and how effective some of these vaccines are they say it prevents death really well. yet you have other saying wear if you're vaccinated at home if you have children who are unvaccinated. can you give us a sense of the importance of breakthrough infections? sam: that is an incredibly important point. for me the ball of the vaccine

is to start begetting vaccine. whether i get a virus that makes me sneeze and cough -- for me the goal of the vaccine is to stop me getting disease. if i'm infected it raises the risk of people around me getting infected. breakthrough infections are relevant if we want to stop the virus. certainly the vaccinations are protecting us from severe disease and hospitalization. tom: let's go to your wheelhouse. dr. briar at johns hopkins was he did the other day with us that we need to focus on mrna, the winning vaccines that get it done. is that the only path we have is to solve it in the developed countries, move to the second tier countries, moved to the third tier countries, is that the way we will do this? sam: as it stands the data is best for the mrna vaccine, including the safety angle.

the question we have to address is that is it possible the non-mrna vaccines such as johnson & johnson and astrazeneca may be giving us a broader response. that is a complex conversation. as it stands i agree with what you said. lisa: this is a touchy question, that is profitability for the vaccines for the likes of moderna and pfizer. how profitable have they been? sam: for pfizer we saw the numbers they are talking about. $33.5 billion in sales this year and probably something in the region of a 20% to 25% margin because they share that revenue with somebody else. we know what the cost is because they did a deal with the u.s. army for 500 million doses. that comes at about seven dollars per dosed. the point is. i do not begrudge them at all. they took enormous risk with these vaccines that nobody

thought would be as good as what they are, and now what are we saying? they are best out there. who could have done this apart from a large pharma company? tom: sam fazeli, congratulations on a world-class notice on herd immunity. we are supposed to wax philosophical and talk about claims and the jobs report tomorrow. i want to rip it up. august is moving forward. we are beginning to get the summer reading list angst. we are going back to 2 plus 2 equals 4. it is school time again. it is now back to school. lisa: you're talking specifically about the abramowitz household. my kids are going back to school. it does raise a question for most kids. there is the countdown to the initial day of going back with masks on a mask off, this is up in the air, how people get back

to school is becoming a market issue, which i find fascinating. tom: is a market issue. we go to the heartland of the south where they start school much earlier than we do. lisa, august 20 is like tomorrow. then we get the sports teams. renumber number high school some people played sports and they came back for two weeks? lisa: the soccer team. i remember that. tom: we are there as far as i'm concerned. lisa: what you think about the market response if there is a return to remote schooling? tom: really? lisa: we were talking earlier, steve ricchiuto said he could say 10 year yield going below 1% if kids were not allowed to go back to school. at a certain point you have to get life back up and running. tom: along this line, moderna out moments ago, the third dose

may be needed in the northern hemisphere this winter. lisa: interesting. tom: an on debate we will see. for somebody who grew up on booster shots, i'm like ok, you will need a booster shot. lisa: one thing we glossed over because of jobless claims data and that is very much front and center, the trade deficit fell to a record depending on how you look at it in the united states. this idea we have so much demand we have been imported more than more and we have not been exporting as much. that is significant in light of some of the trade issues that have come up that do not seem to be in effect in any way. tom: i think you are correct is how i would put it. i will look at the twin deficits, the trade deficit, the fiscal deficit to gdp. that is original math.

those are two trends the gentleman from south dakota knows. the republican from south dakota very aware of heartrate dynamics. that conversation at 12:00. tomorrow is jobs day. this is bloomberg. ♪

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jonathan: live from new york city for our audience worldwide, good morning, good morning. equity futures positive .2%. "the countdown to the open

starts right now. >> everything you need to get set for the start of u.s. trading. this is "bloomberg: the open" with jonathan ferro. ♪ jonathan: from new york, we begin with the big issue. can we keep climbing the wall of worry? >> a lot of concerns and speculation, the stair on the delta variant. >> the fed reaction function. >> inflation more persistent. >> signaling in terms of tapering. >> supply chain. >> peak everything, peak growth, peak earnings. >> there is generally caution in the economy. >> we think risk assets will continue to outperform. >> w