>> the fed is really turned the maximum extent of employment. >> we really have to keep our eye on who is in the labor force, who is coming back. >> we are ultimately going to stabilize to a more modest growth rate. >> inflation is going to stay somewhat more elevated and stickier than people anticipate. >> wall street may still be drinking the fed's kool-aid that this inflation will be not an issue at all. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: here comes the deal down in d.c. 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. your equity market is down a single point on the s&p. the focus on washington, a deal coming together. tom: a deal coming together on

infrastructure. the markets churning around. the consumer pop we get from fiscal policy has to be accounted for. jonathan: what about the yield pop? 1.60% now the call i goldman. these forecasts are coming in. tom: a movement to 1.60% gets your attention? the ambiguity of have that rebounds and equities, we will do that a moment with mike wilson. i am looking at the terminal, and it is telling me this is a bull market, as we heard from jon golub yesterday. that is just one of the microcosms of innovation, and life goes on. jonathan: new iphones with reportedly a camera upgrade. you've got to tell people what the news is. tom: new iphone toys. you know, they are going to do

new stuff for the iphone. we are all going to have to go out and buy them. but life goes on for corporations. but i do pick your point -- i do take your point, their may be some market erosion. jonathan: higher costs, higher price pressures. lisa: if you wonder why tom keene keeps calling for everyone to get a raise, maybe it is because vet bill is getting an iphone. the sentiment among u.s. small business owners fell in the read that came across about an hour ago, basically reversing the gains we saw in june. this does stem from some of those input cost increases and the pressures they are feeling there, so it is having an effect as the outlook starts to turn over a little bit. jonathan: unchanged on the s&p 500 this tuesday morning. your bond market, 1.3136%. yields in a single basis point. i've never seen so many people talk about the zew read for

german investor confidence. absolutely plunged. $1.1724 on euro-dollar. lisa: the question is how much this represents we getting sentiment, as well as -- we getting sentiment, as well as weakening data. we will get unit labor costs. how much will it cost to bridge some of? these labor market frictions? perhaps we get -- some of these labor market frictions? perhaps we get some of a sense. will there be a more sustained increase in some of the wages for a longer period of time? 10:00 a.m., the fed's loretta mester will be speaking. very interesting to see whether she reiterates some of the comments from raphael bostic yesterday. it won't take much for him to support tapering of the monthly bond purchases sooner as the labor market remains very hot. at 1:00 p.m., the u.s. planning to sell $58 billion of two-year

notes. you framed it white when you said the big question is can they divorce the tapering of the balance sheet with potential rate hikes. a lot of people in the market think they eventually have to do this, so how will they start to communicate that in the near term? jonathan: president kaplan very sensitive about that issue. interesting to end on the bond issuance we will get from the treasury. tons of supply. gone are the days where we talked about all of this debt coming from the treasury, and the reason why yields had to go much higher, 1.3152% on tends. tom: you were on with the jobs report, and it came up. i am just seeing a lot of nuance in the screen, which leads to better gdp. yes, higher yields. but not the explosion in yields the gloom crew is worried about. jonathan: let's get to the markets with mike wilson, morgan stanley u.s. equity strategist and cio.

let's start with margins. a lot of people think maybe this margin story which has held up in corporate america can persist into a new year. ? do you think it can -- do you think it can? mike: margins really have surprised on the upside, which always happens coming out of a recession. this time it was extraordinary because you had policy support that essentially subsidized the unemployment that was at there. people were home, but they were getting checks from the government, and they could spend it digitally. so that is unique. we see that being a problem going forward, where people have made assumptions now that those extraordinary margins are going to be carried forward. we see a couple of areas in particular, consumer discretionary, industrials, parts of the market looked to be a little lofty in terms of market expectations. we see no reason why it is going to be any different, and because it was so acute on the upside with operating leverage, not going to be surprised if we see a little more margin degradation

as we go into 2022. that gets baked into people's expectations. tom: your great strength as a sell side analyst at morgan stanley, i know we are all jack 8101 on pricing power. sector to sector, analyst to analyst, what does your team say about the ability of corporations to adapt and generate pricing power? mike: it is the key cash trade -- the key question. we have been looking for those types of companies in our recommendations going forward. the market has gotten very narrow. obviously we have seen higher quality companies and larger cap companies who have scale, the market is paying up for those now because those are the types of that typically have rising power. that is the name of the game. costs are going up for everyone, so two areas i think you can look to do say maybe they will be protected.

technology companies, they don't have as much labor and they can may be managed through that. of course, scale always gives you the ability to spread across revenue. lisa: does this mean tech needs to outperform and other types of sectors, the ones that lead the move lower, where you see the s&p ending the leader but woke -- the year below where we are now? mike: it is an obvious candidate for pricing power or the ability to manage costs, but also probably this in the biggest beneficiary of this incredible move lower in rates at the backend, which doesn't really jive with what is going on in the real economy. we know why that is happening. the fed has been ultra-dovish to get off the maximum accommodation mode, so that has been baked in. as rates move higher, which is our call for the rest of this year, the valuation and some of

these long-duration tech stocks will offset the ability to generate earnings growth that has been spectacular. jonathan: what does that mean for your index level call going into year end? you have looked for that index level correction. where are we now? mike: we are working through that midcycle transition. we are seeing directions happen around the market, but not the index level, but which is typical too. so we think we are kind of in the sixth-inning. we probably have three or four months left to go for this midcycle transition. usually it ends with the fed moving forward with a tightening like it dated 1994 or 2004, or some form of tapering or balance sheet running off like it did in 2011. we think it is no different this time. and that is not a crazy statement. is there anybody on the planet who doesn't the fed is going to be tapering next year?

no. in fact, if they are not tapering, we've got a serious problem. so the midcycle transition will end with multiples coming down because the fed is tightening policy. it is that simple. lisa: you said that the 1.8% year end target for the 10-year note actually could be conservative because the fed is so behind the curve and may be forced to raise rates faster than expected. play out what that would look like and when we would know that perhaps rates should rise. that would be later this year, right? mike: it could be sooner. it could be next month. let's see how the fed wants to communicate this path. maybe it starts at jackson hole. maybe it starts in september, which is our bet. the other way to think about it is the bond market is not stagnant. the bond market will start to challenge the fed and that communication if it believes they are falling too far behind

the curve. we are basically close to full employment now based on the wage increases we are seeing and the commentary we are hearing from companies. maybe it is 4%, maybe it is 5%. we don't really know. what we do know is that labor supply has probably been impaired, maybe permanently. typically, the fed is tightening policy long before they start the process. once again, i don't think anybody would agree with the statement, which is doesn't seem right that we have emergency monetary accommodation at a time when the economy is growing 6.5% real, 8% to 9% nominally? that doesn't seem like it jives? i think the market is saying let's see how they delta variant plays out, but if the delta variant is fading, schools are reopening, we are going to get back to work, the bond market and readjust quickly, just like the last time we were in -- we were out of consensus on the

right moves surprising to the upside. jonathan: such a fine point. we've got to leave it there. mike wilson, morgan stanley chief equity strategist and cio. this line from yesterday, "we have learned of the fomc tolerance for an inflation overshoot that is not as large as durable -- as large or as durable as we previously understood." i think that is important. lisa: it is especially important in light of vice rich clarida basically emphasizing that they are getting closer. they are moving to this. jonathan: getting closer to a deal in paris as well. lisa, i know you want an update from this as well. this from the associated press, lionel messi traveling to france , a person with knowledge of the negotiations has told the associated press. there you go. tom: take the redeye. jonathan: and let's stay there for the rest of the summer. lisa: amen. [laughter] jonathan: lisa wants us gone,

clearly. it is a beautiful one here in new york. your equity market unchanged. this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. president joe biden's big plans for the economy are about to pass their first meijer legislative test. the group of democratic and republican senators are prepared to approve the infrastructure program. the vote is set to begin like this morning. democrats will be able to bypass republicans on the next part, a three point $5 trillion positive resolution that would expand health coverage, childcare, and education benefits. u.s. coronavirus waves that started in low vaccination states in the ozarks and deep south has engulfed the country. cases and hospitalizations are at their highest since february. 30 eight states have transmission levels considered high by the cdc. the other 12 states and washington, d.c. have trans mission rates in the second-worst category. the european union has decided not to reinstate restrictions on

non-essential travel from the u.s. despite new covid cases in the country exceeding the bloc's threshold. the guidance from the eu's nonbinding. the government of each state can decide whether or not to follow it. amc posted seven quarter revenue -- second-quarter revenue that beat estimates. the company is still struggling under $5.5 billion corporate debt. it's market value has soared due to a dedicated online on h -- online army of retail stocks traders. 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 risk of a tantrum this time is less because people understand the game plan.

first we taper, then we raise short-term rates, then we start to lift the balance sheet of the fed. jonathan: that was william dudley, former new york fed president. good morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. here's the price action in the equity market. on the s&p 500, we are unchanged. here's the story of the morning. kansas city southern up by 7% in the pre-market. canadian pacific offering to buy the company. tom: full disclosure, my family is a shareholder of canadian national. this is about the west of the mississippi river down to exit. canadian pacific and canadian national are battling over that geography and access to the lower mississippi and into mexico. what comes down to, it is a $31 billion pitched canadian battle.

cn has the upper hand here, and canadian pacific that started this has come back with an enhanced transaction. jonathan: the stock in the premarket up by 6.8%. lisa: i love that this story is pitting these two canadian cities against each other. just to give you some context, basically this is a network that stretches southward through the heart of the united states, linking these canadian states with the united states in a serious way. this is a massive infrastructure push that gives them a huge presence in the u.s. it is interesting to see he was going to win. jonathan: canadian pacific offering to buy kansas city southern for $300 a share. kansas city stock is up by 6.8% in the premarket. tom: corporations overcome by events where you see the consolidation of american railroads again. in this case going north-south, down the mississippi river. jack fitzpatrick knows the

geography, and he joins us now from bloomberg government. we have infrastructure includes where roads as well, and that is the political might of moderate senators. how strong are they this morning? jack: there are very strong this morning. they have helped forge a path ahead for this infrastructure deal. there is supposed to be a final vote on that at 11:00 a.m. today , and really, the moderates who took control of the process, people including rob portman, joe manchin, kyrsten sinema, the centrists in both parties in the senate cleared a path and make sure there were really no divisive amendments or anything along those lines, so we are headed towards the finish line on this in the senate. tom: how does the gentleman from ohio sell this to speaker pelosi? jack: he can't really sell it to speaker pelosi necessarily. what they have to do is sell it to house democrats. senate democrats have to get

this next big l. pelosi has said that the infrastructure bipartisan bill is not moving until she also gets this $3.5 trillion bill, or whatever it turns out to be, as the big reconciliation bill from the senate. otherwise, infrastructure is not moving. so if democrats in the senate can rally and keep unity and pass something without republicans, then infrastructure would also look good. but at this point, it is not a matter of selling infrastructure. it is tied to another more difficult bill, and if that works out, then the infrastructure probably does, too. lisa: we got a blueprint yesterday of that 3.5 trillion dollar plan. how much consensus was there in the democratic party in putting this together? jack: on the blueprint, plenty of consensus. it gets a lot more difficult when you actually have to make it a bill. what we will see first is a vote on the budget document that really just has directions for

committees on what they are supposed to work on. that is the easier step. there has been a warning by kyrsten sinema saying she doesn't want to support something that comes to a total of $3.5 trillion, so it is probably going to be a conversation about what do you pull out to make the price tag smaller. that is a conversation for when they get from recess and are not just working on this outline, but are actually working on a bill itself. so it is challenging. it is going to be a challenge where you focus on the moderates and see how they feel about the price tag and what kind of taxes and tax increases they would have to support to balance it out. but for now, they are on a pretty good track at least two probably this week hold a vote on that first part, just the outline. lisa: when i came in this morning, tom first asked me about my investment in a 10 suit -- in the 10 suit. then he asked -- the tan suit. that he asked me about the

likelihood of this bill to get passed in the near term. there's some aspects that have folks in the crypto world concerned. jack: there was supposed to be a bipartisan deal tweaking reporting requirements to the irs from at least some of those involved in cryptocurrencies. there are complaints that it was much too broad, and that minors and people who sell software and that kind of thing -- that miners and people who sell software and that kind of thing would be affected and not just those who sell crypto. someone objected read richard shelby, the republican of alabama, he wanted a defense provision in exchange. so maybe the house could do it. maybe they could attach it to

another bill. but for right now, we are kind of pasty point of no return in that cryptocurrency measure -- past the point of no return in that cryptic currency measure is not on the inverse rebel. it -- that infrastructure built. jonathan: it seems the industry is getting very good at lobbying downing d.c. -- down in d.c. lisa: the fact that this was such a point of contention and that they won in pushback to some degree, they are keeping their lobbyists in washington. jonathan: i wonder how money calls went to president dudley, former new york fed president, when he said the following. "quantitative easing has sustained able market in bonds beyond what is can -- sustained a bull market in bonds beyond what is fundamental. this is to be taken off the table before the fed's largess

ends." maybe we will get a yield forecast in the coming months from mr. dudley. lisa: do you think we are going to get an end to the fed's largess? less fed largess is not the same as an end to the fed's largess. i will say, there is a distinct and there. jonathan: do you think papering leads to high yields or lower yields? lisa: great question. jonathan: i think the answer to that is obvious. lisa: it is absolutely not because when people were concerned about that a little bit ago, bond yields fell. jonathan: tom is struggling this morning. we will get you through it. tom: i'm looking at 31 billion dollars large from canadian pacific, and i think it speaks volumes about what you will see with corporations and a boom economy. they are going to do things. i got to be optimistic about that. i just don't have the angst on tapering others do. maybe i'm wrong. jonathan: marilyn watson of blackrock -- tom: she's like me. jonathan: i imagine she might

want to talk about it. your equity market unchanged on the s&p 500. your bond market unchanged. yields at 1.3237%. it has a summer feel this tuesday morning. tom: it does. i should have worn beige. jonathan: good morning. this bloomberg -- this is bloomberg. ♪

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♪ jonathan: live from new york city, for our audience worldwide on tv and radio, here's the price action this tuesday morning. equity futures unchanged on the s&p. the nasdaq 100 not doing much either. positive about 0.1% on the nasdaq. we talked about the call from jonathan golub and the team at credit suisse. let's talk about the calls of this bond market. twos, tens and 30's. 1.60% coming from goldman. jp morgan looking for 1.75%. right now, 1.32 70% on the 10 year. yields unchanged across the board on twos, tens and 30's. here's the debate from the labor market for the bond market -- the labor market, for the bond market. how expensive is it going to be do close the gap between tons of

demand and where is that supply? let's finish on this chart we have been talking about all morning, job openings in america. they are skyhigh, through 10 million. when we asked sarah house of wells fargo, the answer was simple, it will be more expensive. it is about the 4% wage growth. that was the price it took to get that supply to meet that demand. tom: before the pandemic, we were fully employed by a lot of different estimates, and maybe others are suggesting we get back to fully employed quickly. jeff sachs at columbia, we have a massive body of people who are unemployable in this country. jonathan: what do you think that is going to mean for the wage survey? tom: up. labor share finally increases. jonathan: and they've got confidence, too. tom: you see it in the quit rate. that was frankly what really

caught my eye yesterday, the dynamics of the quit rate. but this is new terrain. we are really not used to this after 10 or 15 years. jonathan: the spread between demand and supply is wide. to close the gap is going to take a higher price. for the federal reserve, it's going to be some had scratches if that 4% figure rolls over into next year in a way that maybe that indent despite. let's get to your movers this morning. here's romaine. romaine: a lot of this is in the health-care space, specifically the covid vaccine space. biontech, moderna, pfizer, all of those closed at highs yesterday. a lot of this has to do with the forecast saying it would have about $16 billion in euros worth of covid vaccine sales this year . that is higher than what the company had been guiding for. they are basically saying the covid-19 vaccine is on pace to be there most successful medicine ever on a financial

basis. we are still in the middle of a pandemic, but there is opportunity for these companies for a booster shot in the idea that we will have to be subjected to vaccine updates. a few other stories to keep an eye on, interesting data out of tesla and that factory a has in china. shipments to the must department -- to the to mystic market dropped almost 70% in the recent months from the previous month, from june to july. they were able to compensate for some of that by exporting a lot of those cars to europe. nevertheless, deliveries from that factory were down about 1%. raises concerns about regulatory issues, as well as perceptions about the brand in china. those shares are down fractionally. we should point out their revenue coming in at $44 million, about 1/3 of what they would normally post pre-pandemic

when they were tracking at about $1.2 billion in sales per quarter. finally, apple out with new iphones. they are going to make the announcement hopefully next month and put those things on sale in october. basically reporting new camera features, new camera features, and a smaller notch. i am told that is important. tom: i don't know that they notch is a big deal, but i would point out there's a lot of other products involved. it is also about the ipad, the laptops, maybe someday they will actually deliver a new imac that can make things go. we will look for the closed to see the market activity. nicely under 17 on the vix, 16.8. right now, marilyn watson joins us, blackrock head of global fundamental fixed income strategy. her career looking at the -- career working at the bank of england noted. it is a jumble in fiscal

stimulus in the united states. is the fiscal stimulus in the united states a global phenomenon, or is it discrete to the united states? marilyn: i think the stimulus we saw before was a global,, and it did help promote growth, even though we saw global mobility in restricted. when we see the new package coming through, it will be largely for the u.s., particularly when you look at the focus on infrastructure and things that are very domestic. that withstanding, i think it is still going to have a significant impact globally as well because of demand you might have for commodities from abroad. we look at demand for various things or feet into -- and feed

into the impact. jonathan: how big d think the impact will be? the tens right now are at 1.33%. marilyn: at the moment, it really is difficult to understand why yields are still down at this level. you were saying we'd using the tens will rise further throughout this year. i think at the moment, the market is still digesting some next news around covid, and still continuing to see huge amounts of suppression coming from the central banks. as they do start to taper, start to withdraw this very accommodative monetary policy, i think that will help shift yields higher, and i also think you are seeing in the equity markets and the bond market as well already pricing in the stimulus that is going to come through. jonathan: are we starting to

discriminate within credit given what has happened with the l2 variant in this country? i am thinking of the likes of carnival and others in the credit market. are we starting to discriminate a little bit more? marilyn: i think that's right. the beginning of the pandemic, you did see quite a lot of, nations between the different names. now where you see the spreads still incredibly tight across the board, across all sectors, when you look at the huge amount of crowding that we have in different asset classes, because again, monetary policy is really pushing investors down the spectrum. now i think is the time where we really see a lot more perspective, and i think it is important. you start to see what he's investing -- what is invested at these tight spreads, and i think it is really important you understand fry bottom up perspective exactly the dynamic behind that company, behind the

sector, and you have a really high conviction in the bonds you are buying. i think we will see that further going forward, and it is incredibly important now. lisa: a lot of people has said the credit cycle is dead. you are saying it is not. what does this credit cycle look like, given where we are in treasury yields and within the balance sheets of corporate america that are pretty good. marilyn: they do look pretty good. i think there are quite a few positives. the balance sheets from these corporate scum of the accommodative monetary policy, we are seeing this huge amount of demand, and you spoke earlier about the demand imbalance. but we will continue see a lot more demand going forward, and this is going to bode well for those companies that have already been investing in

technology, communications, improving their supply chains, and i think those companies will be well as we see growth continuing to go on at this very robust pace we are seeing. lisa: what is more important for an investor, clipping coupons at a company that looks like it is a promising directory, or searching for some sort of growth story at a time when the economy does seem to be expanding, and when the consumer does have a lot of money to spend? marilyn: i think you need a balance of both. it is hard at the moment, you really have to do a lot of bottom-up research to find news companies so you can really capture the price appreciation. i also think it is important to find areas where you can, get the steady income you need. it also depends on the investor. we have seen continuing amounts of demand from areas that have

very good funding spaces, from investors from abroad. you can see corporate investors investing in corporate bonds, even high yield, but looking for a little bit more carry. i think understanding the liquidity of those positions, understanding the risk-reward dynamic, understanding the volatility are potentially a warm welcome. jonathan: thank you. get to catch up, marilyn watson, blackrock head of global fundamental fixed income strategy. yields higher by almost a basis point. news of the morning right now, canadian pacific offering kansas city southern $300 per share. a 34% premium. that stock is up by about 6.5% in the premarket. tom: a very sharp note sees material risk priced in. this deal will not go through. canadian national of montreal

will be denied by the regulators the ability to merge with ks you. there's a $1 billion breakup fee and then i guess the ball is thrown into canadian pacific's court. it is really evident in all stocks. there's real, legitimate regulatory tension. jonathan: and that regulatory tension is going to get bigger in america, given what we've heard from this a adminstration, for the big companies to big deals -- to do big deals. tom: the fact is, everybody wants to scale up to get to a point where they can protect margins and sustain, particularly away from the glory stocks. the ones with high revenue, great. but people cranking out nominal gdp, they are worried. jonathan: the glory stocks, the big tech firms, they are the ones in the spotlight when we talk about the regulatory

difficulties ahead. lisa: i don't think the people are as concerned about consolidation in the railroad industry. i do think it is interesting that some of the infrastructure technology has new emphasis on a time of supply disruptions about linking connecticut through mexico through the united states. tom: coming up, we will catch up with the nobel prize-winning economist and m.i.t. professor. alongside tom keene and lisa abramowicz, i'm jonathan ferro. your equity market unchanged. this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. apple's next iphone lineup will get at least three major new camera and video recording features. the company is betting that will entice buyers to upgrade from earlier models. in addition to the camera and video upgrades, they will have a faster chip speed and new technology.

it is a specter to go on sale in the next few weeks. the u.s. senate is moving faster to pass that 560 billion dollars -- that $560 billion infrastructure bill. democrats choose to advance a bigger package without public and support. the volume of goods sold in stores and online grew 6.4% compared to last year. consumers fitted their spending towards entertainment and social gatherings and away from indoor shopping. 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. ♪

>> investors for the past decade were basically pulling the wool over their own eyes on the

capriciousness over the policy environment in china. that is coming home now to bite a number of investors, but it is just one of many risks that you really need to take into account, but investors have not. jonathan: muddy waters makes it easier to catch fish. that's where carson block made his name, muddy waters capital ceo and cio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. your equity market unchanged on the s&p. your bond market unchanged on the 10 year yield. yields up by about half a basis point. euro-dollar up to $1.1719. it has been rough for crude over the past week. we are positive this morning by 1.6%. tom: one bunch mark -- one benchmark i am looking at, 30

year bond. there's this grind higher in yields. to go from 2% to 10% in yields would be a big deal. jonathan: i seek it was jp morgan that came in another 20 basis points in their 30 year call. tom: we are advantaged by the terminal, where we can look at a billion data points, but i am seeing the grind this morning. what is the tenure track record -- the 10 year track record? dave wilson has perspective. dave: the spider gold etf and the spider s&p 500 etf, you look at the ratio between those two, and it is just taking a beating. this particular comparison doesn't even include dividends because you get theirs on stocks, not on gold. if you were to have those in the equation, you would be talking

record lows for the gold etf relative to the s&p 500 etf. as it is, 10 years ago this ratio peaked. if you just focus in on the highs set last year as stocks were tanking, you're talking about a drop of 44%. either way, it just shows you the magnitude of the weakness in the gold market relative to the u.s. stock market. tom: to describe this chart the radio, it is a series of lower highs and a series of lower lows. technically, the chart doesn't scream gold turnaround. dave: no, it doesn't. that is the issue as anything. it has been a year so far we have seen gold down, other precious metals down. silver, platinum. you look across the group, you see declines. we have been talking about stocks setting records. i was just mentioning 400 for

the s&p 500 this year. you have gold moving up and stocks moving up, so it is really a different backdrop here. lisa: traditionally, gold was thought of as a hedge for inflation. it was one of the key hedges for inflation because it was supposedly going to retain its value as fiat currency lost its inherent value on the same level. you wonder whether that dynamic has been forever altered. when you talk to strategist, is that the case? has there been a divorcing between the idea of gold as an inflation hedge and the reality which is stocks long all the way? dave: there is certainly that kind of thoughts you will find at this point, given what we have seen stoxx do, especially this year as inflation has been picking up.

gold and other precious metals have not. if you are looking for that kind of a hedge, you have an alternative and cryptocurrencies that you didn't have several years back, so that may well be influencing the equation for gold as well. tom: jon kyl up -- jon golub takes earnings out to another $250 a share for 2023. are you seeing a lot of people recalibrate after the earnings season? dave: there is certainly optimism around. what is striking to me is you are getting those kind of multi-year forecasts earlier than you ordinarily would. go his outlub --golub is out, ed yardeni is out, even jim paulsen of citigroup. the idea that you're getting them in august just shows you how much optimism there is around what is happening with

earnings. you buttress that up tom: tom: against what citigroup is saying, tobias levkovich and mike wilson, that is what makes for the debate. jonathan: the gold story just hasn't worked given that we have been talking about the inflation story, and given that we have been talking about record low real yields. that has been a surprise for me. but it did work last year. we had a 25% gain on gold last year. when real yields really bottomed around the end of office -- of august, gold was up about 40% year-to-date. i wonder what that means. is gold a better inflation hedge in a risk off world? because this year has been much of a risk on world compared to last year through august. tom: i had the huge privilege of spending some real quality time with someone named john templeton. sir john turned to me and said, i just don't understand gold. that's where i've been.

jonathan: to be fair, many people share that view. my basic understanding, you would expect it to work in a department like we've experienced in the first six to nine months of this year. tom: my basic analysis is lvmh is taking out tiffany's, and somehow they will make gold work. jonathan: they will make every -- they are making everything work right now, don't? i wonder if mobility starts to slow again. re: starting to see the little bit? tom: i am more up -- are we starting to see that a little bit? tom: i am more optimistic about vaccinations. jonathan: where? because in china, there's a very different vaccine that most studies indicate do not stand up to this in the same way the rna -- the mrna vaccine. tom: the only way we are going to solve it is high use of mrna

vaccines. they got to go globally. it is going to take time. jonathan: do we have a synchronized think up in a global economy? right now, i don't think so. lisa: i just want to bring you this headline that cfa slumped to a record low because pandemic studying is nonexistent we have been getting all of these cfa results, and they're just pandemic low, post-pandemic low, record low. maybe you are going to say that the education is insufficient, but i think it is really hard. tom: why was this any different than a second grader or eighth grader or 11th grader? i think it is exactly the same, the stresses of the pandemic. lisa: how hard it is to focus, get feedback, doing it remotely. jonathan: did you work hard from home? it was great, wasn't it? lisa: my favorite part was trying to focus on what you were

saying while not focusing on my kid, who was going to the sink and trying to distract me. jonathan: i didn't know we were on tv for half of the time. at times. if that is as bad as it was for us, it wasn't bad at all, was it? from new york, this is bloomberg.

♪ >> we really have to keep our eye on who is in the labor force, who is coming back. >> and recent reporting, saying that they've got inflation problems to deal with. we expect that to persist. >> we don't think the fed is still bothered by this degree of inflation. >> wall street may still be drinking the fed's kool-aid that this inflation issue will be not a problem at all. >> is there anybody on the planet who doesn't think the fed is going to be tapering next year? no. in fact, if they are not tapering, we've got a serious problem.

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