>> the market is going higher. there's no recession ahead, no credit crunch ahead, and there is still higher earnings i had. >> we are going to get pretty worried about inflation i think, and that could finally bring a stock market correction. >> we don't think the fed is still bothered by this degree of inflation. >> the policy response is different. we will get different inflation outcomes over the next two to three years. >> this we opening trade i would argue hasn't even started yet. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone.

"bloomberg surveillance " here, on radio, on television. we've got claims out in 30 minutes. a report on the data. but we are reaffirming with laidler, yardeni, and next david kostin, this bull market. jonathan: ben laidler earlier this morning talking about companies and their ability to leverage revenue to squeeze into the top line and get much more down to the bottom line. earnings have been tremendous and margins have been really resilient. they surprise to the upside in a big way. tom: you wonder the extension here as yardeni talked about it. with a jobs report, that confirms that. jonathan: how do we handle labor costs in the future, and how resilient with those margins be going into 2022? that is the big question for equity investors. it is a big question for the federal reserve as well.

on friday, 4% wage growth to start to close that gap between demand, fantastic, and supply, there hasn't been enough of it. tom: first, ever saw lisa abramowicz, she was writing for bloomberg news and i said, she really understands american corporations. what is the action you see among corporations on the debt side as they consider this equity bull market? lisa: they are borrowing a record amount of debt, and at a record pace as well. we saw the biggest today issuance spree in august from investment grade companies ever in history, blowing out all previous records. the expert patient is for after labor day, for that to continue. why? because coupons are really low, and they are going to lock in these costs because they can do anything they want with this money. they can buy back shares, invest, pay themselves with whatever they want. this is free money at this point, or basically, given the rates. tom: do we reaffirm 5500 or

6000 on spx? jonathan: i imagine someone is going to build on that call. it has been really interesting to see in the market 30 new ig deals just in the first two days of this week. royal caribbean has come to market or get they are raising money to buy back some of the debt they issued last year with a coupon of 11.5%. this year there borrowing costs are 5.5%. that is the change in the story over the last 12 months, with the companies coming to this market and tapping into it. some people might not like the sound of this, but that was one of the goals of the federal reserve, to help companies do exactly what these companies are doing. tom: let's do the data right now. i've got to recapitulate. yardeni, dow 1000, now dow dirty 5000. jonathan: what is -- dow 25,000. jonathan: what is the dow?

[laughter] tom: the dow is the emotional benchmark you look at. jonathan: you were going to ask the question to david kostin, aren't you? yields are higher by a couple a basis points. claims are 26 minutes away. tom: david kostin is with goldman sachs, their chief u.s. equity strategist. he has been out front on rationalizing a higher equity market value. what is the conviction of 4700? after earnings, do you feel left behind where you've got to maybe extrapolate out further? david: thanks for having me on this morning. the outlook for this year of 47 hundred, looking to 2022 next year, around 4900 yet so you have a trajectory that moves higher. let me put a couple of numbers on the table for you. the u.s. economy will be in nominal terms around 8% higher this year then pre-pandemic, 2019. sales for the s&p 500 companies will be 15% higher and earnings

will be 34% higher. that is a representation of the operating leverage that exists within sony companies. that is that's within so many companies. that is -- within so many companies. that is the first way of thinking about this. this quarter is at record high margins, greater than they were in 2018, 20 19. so the margin story is very significant. picking up on something lisa just mentioned, the opportunity set for investors in other asset classes is really not very attractive, if you think about it as a portfolio manager. so equities become the proverbial term, there is no alternative or get that is ultimately a money flow story. so corporate buyback, the operation this year running at record levels year to date, so that is very strong. individual balance sheets are quite strong, and therefore you

are seeing what i would expect, significant flows from money market mutual funds into equities. this is sort of a money flow story about why there is likely to be persistent demand for u.s. stocks. that is likely going to push the market higher. number two, rates, while they may move slightly higher in our baseline assumption that the 10 year nominal terms will be around 1.6% at the end of this year. so from a valuation perspective, equities are reasonably valued in the context of interest rates. that is sort of a base framework that we think about in terms of the equity market. jonathan: let's dig into that and talk about multiples. credit suisse looking for a similar move to 5000 year end next year. you are just south of that at 4900. what is the multiple you are putting on the earnings? because credit suisse is looking for multiple contraction, but a much more robust earnings story

than people expect. what you looking for? david: in terms of our risk premium model, basically what that implies is valuation somewhere in the 2021 to 2022 times forward earnings estimate. that is not all that different from where we are now, so the expectation really is it is earnings growth, and i think the key variable that we are trying to get our hands around right now involves the tax rate on corporate's for next year. i believe our forecast is there is some negative earnings revision potential because while in our model, and our forecast we are assuming corporate tax rates rise, and therefore earnings will be headwind, you will have about 2% earnings growth from this year to next year, consensus expectation is closer to 7%. so we think there's negative earnings revisions. i would say it is really a story

ultimately about earnings, but i think it is going to be somewhat more muted in terms of that growth for next year. that is where the trajectory goes from 4700 at the end of this year to 4900. i think a key variable that doesn't get enough attention in conversation is the market structure evolution. 40% of u.s. equity capitalization is now comprised of technology and communication services. so the nature of what we are valuing, the earnings, the sales, the margins, the famous last words are it is different this time, but it has evolved as a better way of saying that. it has just evolved over time, and now when people invest in the equity market, it is 40% in those areas, and those areas have robust revenue growth and margins are 25%. so that is the story of why you can get valuations to stay around these levels.

lisa: those companies are also less subject to some of the higher wages that may come down the pike because they have fewer employees relative to their income. just want to pick up on the tax point here. can you give us a sense of how much you expect that 4900 projection to come down if the tax rate goes up higher than you expect? how does that translate into equity performance? david: we are sitting here today in early august. expectation timewise, probably october would be a reasonable time. nothing in washington is exactly reasonable, but let's assume that for a moment. legislation passes, and the corporate tax rate, statutory federal corporate rate, currently 21%. biden has proposed 28%. our assumption is 25%. that is going to be a headwind in different areas. part of it is domestic and part of it is foreign revenues, in

terms of the global intangible tax, known as the guilty tax. those are variables that are going to be negotiated area so our estimates have to involve some assumptions, and the diminution of that is probably around 5%. so earnings would be 5% lower in our assumptions than they would absent tax reform. that is going to be a little bit skewed in some areas like technology, maybe some of the international revenues as opposed to say utilities, and real estate, which is somewhat immune from this. tom: the absolute greatness call that abby joseph cohen -- great miss call that abby joseph cohen when has fought against is the single-digit gloom certitude of the actuarial assumption. they have been wrong, wrong, wrong. is it a single-digit world for these, or was operating leverage, should we just plan

for double-digit return? david: i don't think you should be planning for double-digit returns. in our longer-term return model, the expectation over the next decade is probably around 6%, kind of mid-single digit type of total return. that is including dividends and that is on an annualized, normal term. that is a decade-long projection. i would say lots of variables go into that. what is the interest rate environment going to be 10 years from now? what will the turnover in constituents be. the index typically turns over 3% to 4% per year. 1/3 of the companies in teen years are going to be different than they are today. that is going to your point about actuarial assumption. how will that market structure evolve? we are now 40% in tech and communication services.

does that continue to go in that higher earnings, higher margins? does that basically become more and more accentuated risk? antitrust issues, a lot of things go into that. i would say around 6% is what we would be assuming from a total return annualized over the next 10 years. jonathan: i remember coming into this year, and you were at 4300 on the 500. that was december, november. everyone thought you were nuts, and here we are. it is good to catch up. david kostin," meant tax chief u.s. equity strategist -- david kostin, goldman sachs chief u.s. equity strategist. we came into this year, and calls like 4400, 4300, they just seemed ridiculous at the time. and here we are, all-time highs. tom: the shorts have been silenced. i will go back to stephen roach of yale university, and of course, someone who changed how

we do economics in america, and i'm sorry, dr. roach had an acclaimed, very stark essay where he said not only was i wrong, but he said i have never been more wrong in my life. i thought stephen roach nailed it, how somata people got wrong the american spirit of recovery that wrapped around all of that fiscal stimulus. jonathan: you almost described him as humble there. not my experience. tom: i think steve ready really great essay about, you know what? the institution has worked. jonathan: tom keene, lisa abramowicz, jonathan ferro. yields up two basis points on the 10 year, 1.35 39%. from new york city, this is bloomberg. ♪

>> now with the recovery well underway, they transition from

that extraordinary monetary policy accommodation to more neutral settings must follow. so today's economy does not call for tight monetary policy to be clear. but i think it does signal that the time has come to dial back the settings. jonathan: esther george of the federal reserve bank of kansas city, the president. good morning. from new york city alongside tom keene and lisa abramowicz, i'm jonathan ferro. equity futures basically unchanged on the s&p. yields higher on tens. that commentary from esther george inc. is so important. i've talked about the spectrum of -- george i think is so important. i've talked about the spectrum of doves. esther george used to be considerate how -- considered a hawk, but now they are not talking about tighter monetary policy. they really aren't. i don't hear that from prison

door -- from president george. i don't hear that from president kaplan either. tom: part of that is the wall of money that is out there. ira jersey, truly expert over decades at looking at the bond market. yes, bills, notes and bonds, but far more, all of that stuff that is more shorter-term. he is bloomberg intelligence's chief u.s. liquidity strategist. when someone says liquidity to you, the cliche of wall of money , what exactly is that? ira: i think in this environment, that wall of money is all of these reserves that are trying to find a home in the banking sector. those reserves were created behind the federal reserve. so all that the fed has been doing over the last four in, 15 months is -- last 14, 15 months is adding more and more liquidity through its bond purchases.

one thing you heard resident george mentioned is we don't need the extraordinary policies we've had anymore. i think that is part of the whole set up for the federal reserve tapering. i think that will be announced this year as opposed to the first quarter of next year, which was the consensus for quite a long time. tom: people in the equity market are trying to get out to end of year 2022. can you do the same thing with your team on yield? can you guesstimate yield with any conviction out to, say, september of 2021? ira: it is a little bit more difficult because we don't know exactly what is going to happen with the pandemic, and obviously, there's been a lot of shifts on and off over the last six months in terms of will we see more shutdowns globally. the last couple of months, it was a big slowdown in asia and a lot of flight of quality buying

out of asia. that has really depressed yields a little bit. i do have reasonably strong conviction that we will see yields a little but higher than where we are now by the end of this year, and even a little higher than that i the end, but still not quite 2%. if we get to do percent 10-year gilts, they probably won't stay there very long. we will see people saying we would like to own 10 year treasuries at 2% as opposed to owning bunds at 0%. so there is definitely a continued flight to quality and strength, generally speaking, in treasuries because we are one of the higher developed market bond markets, and that hasn't changed at all in the last couple of years. so if you see yields go higher and higher, you just seeing more buying. lisa: so people will still want to buy 2% treasuries. who are these people? are they the international

buyers you referenced, or are they pension funds who are fully funded for the first time in a long time because of the equity rally and want to rotate that back into bonds? ira: it is a little bit harder for pensions to buy full board treasuries -- fullbore treasuries. but there is going to be some rotation out of equities and some other risk assets and into treasuries if for no other reason just as a hedge. you just need to hedge some of your positions. but that doesn't necessarily fit benchmarks. the idea that you can take a pension fund today, unless you are 150% funded, which not many are in that situation yet, but unless you are very overfunded, you're not just going to immunize yourself and just buy treasuries and corporate bonds to immunize yourself. but there will be some rotation,

and that is going to be true probably and a lot of different products as well. so not only pensions, but just regular people who want to keep an 80/20 or 60/40 portfolio. that keeps getting more difficult as the equity rally continues to rally and treasuries have rallied a little bit, but only a few percent. lisa: what is the dynamic of a taper tantrum in 2021? is it yields going a lot lower, or yields going a lot higher on the long end? ira: i think treasuries will still set up a little bit. it is a matter of when, not if. but there is a flow effect. as they continue to slow down their purchases, you will probably see yields move a little higher. in particular, it is going to be in tips real yields. the tips right now at -1.06% for 10 year tips, i think those can go from where they are right now to about -50 basis points.

you're talking about a pretty substantial selloff there. in the meantime, what happens is inflation expectations as priced by the market come down a little bit area so you go from 2.4% down to 2.2%. that still means you only get 10 year treasuries up to 1.50% or 1.60%. we go back to the range of normal treasuries where we were just a couple of months ago. jonathan: always good to catch up, sir. ira jersey, bloomberg intelligence chief u.s. rates strategist. a lot of this is going to come down to taking down q. week on any guidance on interest rates. so far, so good. just in terms of the communication from federal reserve officials, you can tell they are pretty sensitive to it. tom: i totally take your point. for the non-sophisticates like me, to go from mr. jersey to

negative one point 06% to -0.5x, how do the markets react? that is a seismic move? jonathan: if you took that 50 basis point move in real yields and pushed it through the nasdaq , what do you think the nasdaq 100 looks like? i think it would be tough. jonathan: remember the kostin call at goldman sachs relies and some part unstable rate because of the rating we got in the s&p 500. lisa: it also depends on the path we take to get there. if the delta variant proves to be incredibly temporary and everything comes back gangbusters, then maybe it can keep things going. otherwise, i think you are absolutely right. jonathan: that was almost on the edge of constructive, almost. lisa: it was nuanced. jonathan: futures are pretty

dull this morning. jobless claims are a few minutes away. for our audience worldwide, with tom keene, lisa abramowicz, and jon ferro, heard on radio, seen on tv, this is "bloomberg surveillance." ♪

jonathan: data in america seconds away. live from new york city for our audience worldwide on tv and radio alongside tom dean and lisa abramowicz, i'm jonathan ferro -- alongside tom keene and lisa abramowicz, i'm jonathan ferro. here's the data. michael: the ppi is first out. jobless claims are lagged. up 1%, the same as last month. higher than at the expected .6%. the core rate the same as last month. higher than they expected. on a year-over-year basis we are looking at final demand 7.8%. that was up from 7.3%.

the core is at 6.2%. a quick look to see if these are records or how far you have to go back. it looks like this is the highest for both of those since the series was changed in 2010. new highs for the ppi. jobless claims are 375,000. that is bang on expectations. a decrease of 14,000 from the previous week's level of 399,000. the four week average 394,000. total claims at 12,975,000, down 181,000 from the week before. these numbers are starting to come in better than expected. we will turn it back to

jonathan. jonathan: equity futures turning globe bit negative on the s&p 500. i will not overdo it. unchanged through much of the morning. initial jobless claims declining from the previous read. tom: we just got the revision in moments ago. the survey on initial jobless claims from the previous week was 385,000. it has revised up to 387,000. the revision is what the market has shown us. let us like this together. brett ryan joins us with deutsche bank. i want to do something i rarely do, which is continuing claims. i think there is a misunderstanding that continuing claims that descendant now to a

good 30 year average and certainly where we were before this. what is the symbolism of that? brett: thanks for having me today. the continuing claims, it is important to remember when the fed started to taper in 2014, to -- continuing claims are averaging around 2.9 million. they are still up from the 2018 or 2019 average of 1.7 million, pretty covid. you're in the range with the fed started to taper last time around in early 2014. initial claims were about 350 back then. we are still probably around 380,000, 390,000 on the four week average for initial claims. you're getting in the range where the fed says let's start to dialect back. that makes sense. we think they will do so.

lisa: based on the continuing claims, do you think the u.s. labor market is tighter than people currently think? brett: there are definitely pockets of tightness. if you look at the yield and manufacturing sector, it looks like job openings far exceed hiring and there certainly looks to be tightening. surprisingly, for leisure and hospitality, which is one of the sectors that gets a lot of attention, the yield does not look that abnormal. i think it goes from sector to sector. there are definitely areas of tightness that will take some time to work its way out. the reopening, as richard clarida has said, when you're reopening a $20 trillion economy all at one time, there is demand

for the labor all at once. it will take several months to work its way out. lisa: before we got these releases you said you were more focused on the employment market because that is where the fed focus was. i want to pair these ideas, the fact we are getting progress on the labor market to encourage the fed to tighten with ppi coming in. 7.8% year-over-year for ppi final demand. these are astronomical numbers. what is your big take away from these reports? brett: if you give me one piece of information, what was the -- lisa: ex food and energy trade was 0.9% month over month. brett: still fairly high, so the wholesale margins are doing well. the big thing from the inflation standpoint, the ppi you can really see it. transportation costs are a big problem.

warehouse and transportation costs have skyrocketed. that reflects a strong demand for goods and lack of transportation to carry them to the market, where the biggest softness in inventory is. from the inflation standpoint, i think yesterday's cpi report is more important in that is telling the fed it supports the fed transitory narrative view. you saw used-car prices start to come up. we have been waiting for that for a few months. when you take away auto related categories within the core cpi, it is about 2.9% year-over-year versus 4.5%, the 4.3% we are seeing right now. outside of the sectors and transportation costs, i'm more

curious to see what the health care number is. that is what matters for the pce deflator. tom: health care and services .8% in july. that is up 3.2% for the year according to michael mckee. brett: thank you. that is a pretty decent bounce back. you had a big decline. i was expecting some payback there. the things the fed will be paying attention to are the health care component and rents. on the health care side, what will be interesting is how the situation shapes up for the fall. in the bipartisan agreement, it seems the gop has gotten the sequester extended. if you extend the sequester and medicare is forced to comply with that request, you will see

health care inflation drop next year and that gets tracked about 20 basis points and year-over-year terms for the court pce deflator. the fed is dealing with a lot of policy difficulties that make them wait further in terms of announcing tapering. you do not know whether the delta variant is going to impact back to school, september employment data. even for the hawks, september employment data seems pretty important. two, the fed will not know the fiscal situation in the september 3 meeting. chuck schumer has set a september 15 date to pass the 3.5 joint dollar infrastructure package. we will see if they can stick to that. federal benefits are ending for over 9 million people. tom: we have to leave it there. lots going on in the markets.

brett ryan, thank you so much. deutsche bank senior u.s. economist. i do not know what to make of ppi. it used to be religion. now nobody cares. jonathan: in the last 10 years something is changed. in the last decade we used to talk about china importing disinflation, now the opposite. that is why the latest developments are so important. they vaccinated their people with vaccine most studies suggest is not as good at standing up to the delta variant, and we are starting to see more restrictions through the chinese economy. we go data point by data point every single morning. more and more restrictions in several cities, and that will not exactly do a great amount of good for the supply story through year end. tom: your point is the interview we had with the epidemiologist from johns hopkins just two weeks ago where he was heated, there is only one vaccine that

matters. mrna. everything else is secondary. that is where we are right now. jonathan: it sets up the debate. either we go into year end and the supply tensions feel, or we get a second wave -- and the supply tensions heal, or we get a second wave out of china. lisa: supply chains are not monolithic. auto manufacturers are dealing with chip constraints worse for them then some of the iphone makers. the one iphone maker. this is the key question. in earnings release they all say this continues to be a persistent problem. it will ease. jonathan: the issue mohamed el-erian has brought up, the data is telling you one thing, policymakers will interpret that in a certain way. listen to corporations. corporations are telling your

clean story about what they are experiencing and what they believe they will experience through the year and beyond. tom: i get that. i take your point this is about private enterprise doing what they need to do in the pandemic given the national and international chaos, and they have to move their business forward and we heard from three gables that the corporate -- three great bulls that corporations will succeed. lisa: -- jonathan: is continuity, going into year end, that is the big effort. coming up, jerome schneider on short rates. very little fed speak this morning. welcome break from that. we'll pick that up on "the open." tom keene, lisa abramowicz jonathan ferro. this is bloomberg. ritika: with the first word news, i'm ritika gupta.

president biden is delivering on donald trump's pledge to bring u.s. troops home from afghanistan. he is also getting criticism at the taliban roles. the insurgents have been capturing capitals and imposing their fundament list ways. it is predicted insurgents could capture couple in 19 days. janet yellen is considering a chip to china -- a trip to china. it comes as the biden administration considers a broad review of policy towards china. the governor of texas has escalated the fight over his band of local phase basque rules -- is band -- his ban of local face mask rules. resistance to his campaign is spreading. school districts in dallas, san antonio and austin rolled out

new masking roles. in poland the government is undermining relations with the u.s. after the ruling party forceful a controversial media law. the purpose is to protect broadcasters from takeovers but it targets the american owner of poland's largest television network. 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. ♪ >> we've been hiring like crazy. we are hiring 4000 people.

we are not seeing any challenges ourselves with high rate. where we have seen challenges is some of our business partners, catering companies and airport service companies. they have had challenges. tom: jetblue celebrating jetblue 2lhr. our guy johnson holding court. we will see some of that on the reopening of the transatlantic corridor. craig moffett and michael nathanson pick up the pieces after the olympics. can we do a tangent on what is going on in washington? let me go to craig moffett on this. this is his wheelhouse. this is a story not told, we are on the edge of where there is a right to the internet versus a privilege of the internet. to meet is a subtle change.

are we at the point with biden legislation that we will demand pristine internet coast-to-coast? craig: thank you for having us back on. always a pleasure to be here. i am not sure about that. that has been a push pull through the last five administrations. this question of is broadband a utility, should be treated as a utility versus the private sector has actually done a pretty good job bringing broadband to americans. that tension is appropriate. i do not think it will change. my take away from what is happening to washington is despite the fact that we have swung back to a democrat administration, biden is who he said he was. what we have seen fairly consistently is moderation in

most of the policies around broadband. there is talk about regulation and flirtations in the early draft of the infrastructure plan. that is not where we ended up. tom: there are so many things to talk to you about. your claimed research on the hardware of the media we look at every day. the media and content is king. michael nathanson, what are you prepared for in the streaming wars? where is the curiosity right now? michael: good morning. what i'm waiting for is someone to tap out. i guess we already saw warner media and discovery merge, and a knowledge meant this is a hard business to -- and acknowledgment this is a hard business to master. i'm interested to see what viacom and comcast do. they are too small to win this.

this is not a business to chase. better to be a content seller than a fifth rated streamer. we are looking for consolidation. do not know when that will be, but to us that has to happen. lisa: are we passed peak content? michael: i think we are year or two years away. apple is going to put more money to work, amazon will as well. there is clearly too much content out there. the economics are forcing lower and lower returns. there is just too much capital chasing this opportunity. lisa: this wears on the hardware story of things, that regardless of who wins the content wars, more people are going to be streaming. is that the pure plate going forward to hinge on the streaming phenomenon that is

only getting stronger, even if there is a war on content that is created keeps in pricing down the road -- created keeps -- created peaks in pricing down the road. michael: -- craig: the question is whether -- you could make the argument that in this particular gold rush, the ones that are selling the shovels are not the network operators but the network equipment suppliers who are seeing a serious boon. for the wireless operators, monetizing incremental traffic has always been problematic. for the cable operators, they have a better business structurally than the wireless operators. they generally do not charge extra for the throughput. tom: we are thrilled to bring

you both craig moffett and michael nathanson of moffettnathanson. truly definitive on all we do in media. this is a joint question to both of you and lisa will have another question. michael nathanson, what have the two of you learned about the olympics that nbc has to tattoo in their brain as they go to china and beyond? michael: a great question. they need to change. who am i as an analyst? tom: your michael nathanson. they will listen to this. michael: they need a constant barker channel where i can go 24/7 to watch the olympics. it was a hodgepodge. there was no excitement. they need to take over either nbc or usa and make it 24/7 olympics and show everything live on broadcast.

then use digital to augment the non-core events. i think espn has done a great job. they figured that out. espn uses esp on one for all of their main events -- espn one for all of their main events in the other channels for the secondary and tertiary events. i thought it was poorly done. tom: craig, you are briefing brian roberts. what you tell brian roberts to do next on the olympics? craig: first you have to recognize there is a problem. ratings were down 41% from five years ago. a large part of that is the fact there are a lot fewer television households to watch the olympics. the court cutting that has accumulated over last five years has left a mark, and it hurts.

the problem that creates is deeper than that. think about the machine comcast is or nbc is creating the run-up to the olympics and making people interested and engaged in the athletes and the stories around the olympics. if ratings are down 40% or more in the months leading up to the olympics, then so much of that is being -- is not what it used to be. the real problem now is trying to figure out whether the ecosystem that surrounds the olympics of personal interest stories about athletes and national pride and all that sort of thing is permanently damaged, because fundamentally the olympics are made-for-tv event in a post-tv world. lisa: that is where i wanted to go. can we extrapolate beyond the olympics to sports in general

that perhaps cable news does not capture the same kind of audience, these ports do not capture the same kind of audience. they go hand-in-hand in a seachange that undermines cables paralysis -- undermines cable's prowess. craig: there's too much content. discovery has become impossible. sports rates keep going up. we wonder what happens in the next four to five years in terms of the escalation. it is a challenge. i think you need consolidation. you need less content produced and need to eliminate some of the clutter we see. lisa: from your perspective, what would it do to some of these cable giants if they sold the rights to some of the sports streaming? craig: for the broadband

providers, the infrastructure providers, the short answer is not much. they are agnostic about what travels over the networks. they fought for years to say we do not want to have to carry every regional sports network on the basic tier and make everyone in america paper sports even if they do not watch it. the problem is programmers have been too strong and have demanded basic tier carry and that breaks it down. you wonder whether the straw that broke the camels back, one or does do more of these networks being withdrawn at the sport system as we see it today really unravels. using that on the regional sports side. the national sport side is better because disney has a much power in its negotiations, but the sports ecosystem is feeling a lot of stress. tom: have to leave it there. right moffett and michael

nathanson, too short of a visit. lisa, what did you learn? lisa: i learned the idea of the look fixes fascinating. if there -- the idea of the olympics is fascinating. if there is no tv audience, what is this? tom: i am trying so hard to keep my opinion out of this. i will try hard right now. maybe it is my life, maybe does the people around me, whatever. we are so far from peggy fleming. so far. lisa: frankly, as craig moffett said, this is a post cable world. what does that mean in content? there is so much content out there. i the about youtube and how much eyeballs youtube is catching without paying anything, versus netflix which is down 5% as it pays a ton for content. how do you square who the winner

will be at the end of the day, especially in a moving feast of potential appetites? tom: let's go to the bond market because lisa abramowicz always wants to go to the bond market. 2.01 on the 30 year bond. what does the fixed mortgage do? lisa: fixed mortgages are pretty stable, giving a tailwind to the housing market. at 1:00 we will be getting the 30 year option. -- the 30 year auction. curious to see how many foreign buyers on the 30 year bond. we see more indirect bidders in yesterday's auction than ever before reported and that tells me about the tremendous appetite, especially overseas. tom: there is another -- coming up. lisa: your dying for it. there's been so much debt sold. tom: do i get a dollar for every auction question?

lisa: you really showed great interest. tom: watching paint dry. the vix 16.17. stay with us. this is bloomberg. good morning. ♪

jonathan: coming into thursday at all-time highs. good morning, good morning. "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. is the reopening surge beginning to fade? >> a lot of speculation. >> this wall of worry. >> fits and starts. >> a big scare on the delta variant. >> the fed reaction function. >> the equity market outlook. >> it is adding fuel to the inflationary concerns. >> everything is beat growth, peak earnings, peak monetary policy. >> the reopening trade called into question. >>