are in an inflationary environment yet. >> we do want to stay nimble here because fed hikes will start to get priced in. >> being zaidi around the taper. we think it will be a tantrum list taper. -- tantrumless taper. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jon: record highs into tuesday 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 eye could we -- or equity market done 19. in for tuesday, five-day winning streak on the s&p. we are up 100% and change since the march 2020 low. what a rally. tom: 100% is a real benchmark and that was noted with the surge at the close. i look at the vix as the equity barometer.

60.92 is pretty much midrange e. i cannot -- midrangey. i cannot say that for the spread markets, the bond markets, it is fascinating. jon: treasury down to 1,23. it is on the chairman powell after retail sales. tom: retail sales is way more important than powell. the actual date of where is this economy. frances donald coming up in a moment will be important. i would note the german tenure out front in worse or point -- worserp oin -- worser point. the 210 spread, the ones you look at i don't look at, they are rolling over. we gotta go there. this is serious. jon: this is unreal. tom: one case. jon: one case, three-day lockdown. it was meant to hike interest rates overnight over the next 24

hours and many people are threading the towel on that. lisa, that currency down more than 1%. tom: where else will you get daily dollar? lisa: it is the response to one single case, this idea places like new zealand and frankly china and particularly asia countries have a very harsh take when it comes to what the threshold is to shutting things down. how much is suppressed growth, how much in the region and globally? this is one of the biggest concerns leading to the risk off deal and bonds these days, even if you are not feeling and stocks. jon: what'd you call it, overwhelmed by banks? tom: you wonder about all central banks including her chairman powell. the event will be overwhelmed by is it a boom economy and what is the trajectory overlaid on the new covid? and it feels like a new covid. what is the new trajectory, it is a complete mystery to you, me, and central bankers. jon: let's get to the stock

market, here's your equity price action. equity futures down 21. -.5% on the s&p 500. seemingly on s&p 500 approaching 4500. yields at four basis points, a big turnaround since friday's session. yields lower friday, monday, this morning. the euro is not doing much. 1.1774, unchanged on the day. lisa: i find it fascinating we are on record highs or nears them -- near them. we see bond yields grind in. it is like different markets are looking at different realities. at 8:30 a.m., perhaps we get a read with the u.s. retail sales. he questioned my mind, how much is there a rotation away from goods into services? how strong is the demand for services and ability to supply the services? without that shift, how can this recovery against team, especially with some of the supply chain disruptions, especially because people rely

on the services sector for employment, for wages. we get a sense of how hot the housing market is, we have the nahb, the housing index, there's expectation to be a bit of cooling from the highs in terms of acceleration in homebuilder sentiment. however, there's a sense lumber prices have come down and there is an incredible amount of demand, especially with mortgage rates coming down, which could fuel optimism. at 1:30 pm, you are talking about chair powell speaking at a virtual town hall event with educators. how will he frame the next couple meetings? we have heard from a number of fed officials about what the threshold is for labor force -- labor of work in order to support a taper. what is his threshold? what is his trajectory in terms of what it will take to finish these bond purchases? can he disconnect his to raising rates in that cycle? jon: thank you. just want to bring our audience breaking news from home depot. this is a downside to price on

sales for the second quarter. fell 4.5%. the estimate was 5.6%. the stock lower. tom: we are going to see the stock lowers on comparable sales, but they knew a nice beat on earnings. this is what we will see. it is not the boom economy of 90 days ago. it is an economy that is moving along with pretty good numbers, good earnings, good revenues, but the comp sales, a little bit off of the mark. jon: the survey out this money from bank of america. tom: i mentioned that. jon: the first time since july 2020 the profit margins are expected to fall. consumer staples have done nicely. target tomorrow, walmart later this morning. tom: gina martin adams has lead the charge on this. on a relative basis, these are good numbers. what i will look at with home depot is cash flow and use of cash. jon: stock down 4.7% in early

trading. let's bring in frances donald, chief economist and head of macroeconomic strategy. good to catch up with you again. he macro is price but pessimism is not. your words, what do they mean? frances: peace macro is a theme everybody understands. the year-over-year comparables will decline and they will not growth the speed we were before, as we were coming out of the covid-19 recession. but there are still a lot of areas things that can go wrong. we are teetering on a nice edge toward a full sink a nice global recovery. there are a lot of things that could go wrong. what concerns me is we have yet to see what i think is pessimism in this market. that does not mean a recession tomorrow or does not mean will see a collapse of cross assets, but there will be action particularly on the consumer side. i think we will see a variety of growth data points that make us more nervous.

tom: so it's a nevada of boom economy where the biggest decision as you stake your reputation on 9% growth or 10% real growth. now we are onto something new. how do you model an economy that we have never seen before? frances: this is the problem i have. of the biggest question i have when i wake up every day is, is delta the spinal wave of covid or are we going to be unrolling variants that shave growth off on a more sustained basis? right now, we are seeing prices so high consumers are telling us we don't want to buy houses and cars and large purchases. the consumer sentiment index was a lot of shocking -- was talking to a lot of people. was demand delayed or destroyed? that is the biggest question on our plate. we can say confidently these delays are uplifts, but if we unroll variance and we consumers

that -- we see consumers at say alan to pull back even if they are vaccinated, that's a lower neutral rate for the fed and a very different kind of two to five your outlook. lisa: six months ago, people would say lower neutral rate for the fed meant higher stock all you asians and gave a boost to risk assets. are we moving away from that kind of paradigm because people have already priced in all of these low rates for the foreseeable future? frances: it's a good point. up in to this point, weak economic data has been associated with lower yields. it has been a bond play, not a cross supply. we should probably watch for the potential that, as we move toward [indiscernible] we have seen wobbly nest and other asset classes. -- wobblyness in other asset classes. there's not a lot of places to go. if you want to deliver expected returns to these portfolios, you have to move further out of the recurrence. we also need to think about the shift toward alternative

infrastructure, agriculture, there are different asset classes that will continue to benefit from the lower rate environment absolutely. in the near term, like you mentioned with home depot, macy -- macy disappointment on the earnings -- may see disappointment on the earnings front. jon: can we skip chair powell today? frances: i wish i could skip all of the fed speak but what are we going to learn that we don't already know? we know a taper is coming, the biggest agreement on wall street is it is september or december. guess what, it doesn't matter in the grand scheme of things. what matters to me is how the taper is constructed, how long do they indicate it will extend or hint at. what is the composition of it? does powell divorce the idea of tapering leads you into rate hikes? so it is not the when, it is how

the tapering in most markets, not the date. i would love to hear more about that. i think powell has a lot of disagreement behind him on the fed, probably going to go down the middle but we will be watching. jon: in a town hall with educators, i'm not sure if that is the form to get that done. frances donald, global chief economist and head of macroeconomic strategy. can we have a favorite? are we allowed to have a favorite? tom: i don't know, they'll all hate me. jon: yeah, they hate you. tom: they hates me. jon: good lineup, then. tom: the one we talked to yesterday hates me. jon: global head of market strategy from chase bank, looking forward to that. tom: i used to percent 30 year bond has a convenient benchmarking to see that marked out at a 1.90 gets my attention.

we are not there, we are 60% there. jon: as frances said, the big debate over the federal reserve, can we divorce the conversation of qe? lisa: they haven't begun to try, which is curious given the fact a lot of people have been talking about this for months with a heating up over the past few weeks. i wonder how much the delta variant will give them cover to really take a much more dovish turn and frankly that is what i'm looking forward to. jon: chair powell is really struggling to get across the consensus on the fomc. lisa: there is none. jon: to hear his personal opinion over the next week or so, that will be interesting. your equity markets, -19, down .4%. a five-day winning streak into this morning. off all-time highs. from new york, bloomberg.com. ♪

ritika: with the first or news, i'm ritika gupta. the taliban are urging women to join the new government. a member of the taliban commission said the group does not want women to be victims. when the taliban were in power previously, women were largely confined to their home. the u.s. is embracing a high-stakes relationship with the taliban. a growing rivalry with the u.s. has china's president, xi jinping, seizing any opportunity to push back against u.s. dominance. in haiti, earthquakes hit more than 400 people and injured almost 7000. now haitians are bracing for tropical storm grace, which could lead to flash flooding and mudslides. in new zealand, the prime minister said the country will go into a level four lockdown,

the most restricted kind, after authorities detected their first case of coronavirus in 170 days. new zealand has only been in this lockdown once before. warren buffett berkshire hathaway has trimmed its -- while roosting its stake in kroger. global news, 24 hours a day, on air and on "bloomberg quicktake," powered by more than 2700 journalists and analysts in over 120 countries. s in over 120 countries. i'm ritika gupta. this is bloomberg. ♪

>> when i came into office, i inherited a deal president trump

negotiated with the taliban. i stand squarely behind my decision. after 20 years, i have learned the hard way that there was never a good time to withdraw u.s. forces. developments in the past week reinforced that any -- ending u.s. military in afghanistan now was the right decision. jon: the president of the united states, from new york city, good morning. alongside tom keene at lisa abramowicz, i'm jonathan ferro. the president at one point seemingly blame to everyone else. richard haass joined us yesterday. the president painted a binary choice of -- he dismissed the third option of afghan continuing to doing most of the fighting with allies in the supported role. this is worth debating. richard goes on to say what cannot be debated is the withdrawal fiasco, and it is the final point that was hardly addressed in that address from the president of the united states yesterday afternoon.

tom: i think people are still in stock. we heard that from richard haass and thomas garfield of boston university. we are going to dedicate ourselves as being experts as this nation picks up the pieces. camp david is directly north, 70 miles north, up 495 and 270, somewhere before criswell chevrolet. then you turn left and go up you go the country road to the retreat where presidents retreat. we retreat with anne-marie horton. what is the president's agenda today? >> we don't know. there is no public agenda event that we can speak of. he is likely going to be in constant communication, as he has been, what is national security team said, with everyone involved in stabilizing the kabul airport. one thing i will tell you that will be happening in washington is the national security advisor, jake sullivan, will be having a briefing with the past -- press, jen psaki, later this

afternoon and they will likely get questions because there were no questions when the president gave the address yesterday. jon: there were many questions. he essentially blamed the afghans and why people were not evacuated more quickly. he essentially blamed the afghans. the irony was lost on nobody when he concluded that particular address by saying the buck stops with me. a lot of people might be asking this morning who wrote the speech and suggesting they don't write the next one. what happened? annmarie: it's a good point. the president outlined the reasons why he withdrew from iraq -- excuse me, afghanistan. we already heard this from the president, not just when he was campaigning as well as previously as president. but the elephant in the room and what the president failed to address was the question on everyone's mind, which was why was the withdraw so chaotic? wire we seeing scenes from kabul airport of afghani's trying to get on the hangers of u.s. military aircrafts?

why are we seeing scenes from helicopters overhead at our embassy being taken to the airport four miles down the road on what seemed to be a frenzy, hasty evacuation with the american flag coming down. the president did not address that. this is what the atlantic is pointing to tom nichols writing the right to bite the bullet on afghanistan but execution of this resolve, calling it tragic and a shameful mess. the president did not address that. lisa: in popularity polls, we have seen president biden lose a bit for the first time in his presidency. how much is his agenda for the national progress hampered dramatically by this development? annmarie: the irony of all of this is that the u.s. administration certainly once to withdraw from afghanistan partly to focus on other issues around the world. this is becoming potentially a bigger foreign policy crisis for them. it is a very good question. yet remains to be seen how this

will affect the economic agenda in congress, which we do have congress coming back next week to vote on that. as well as also covid. we have our own reporting that the administration is looking to now get ready a program to offer boosters as soonest september. as all of this is taking away from the things that are top of the agenda, making sure they can control the delta variant and making sure they get through their economic agenda. tom: let's get out front of this press conference this afternoon, i guess that is what it is called. i see images of canada doing things, an uproar about germany was 7 million people on board, whatever. it is chaos. do you are within your reading have any timeline for america and kabul? is it a matter of hours, is it a matter of three days, is it a matter of a month? annmarie: if you have read the intelligence before this, it would be months that kabul would be falling. then it became 30 to 90 days.

so i'm not going to say anything i read in terms of a timeline because the president of the united states yesterday admitted it had come -- kabul folding had come much quicker than they expected. right now there is no timeline and we have seen this very fluid situation. we have seen it change daily. yesterday, we saw the pentagon sending more troops to make sure there could be a clearer evacuation. as you say, we see scenes from around the world, leaders from around the world trying to get their nationals out. angela merkel, i think she had the most on the trip -- honest approach, saying they misunderstood the situation in afghanistan and they were quick to say not just on the germans part but everyone's part. jon: is everyone talking about fiscal spending in d.c.? that's the big market question, isn't it? annmarie: i would bring you to one potential phone call that could be interesting, with speaker pelosi and the rank-and-file of the democrats. this is regarding how she is

going to get -- how they are going to get the votes next week. the moderates say we will not vote on budget resolution, the framework for the 3.5 trillion dollars until we see bipartisan infrastructure. so trying to figure out how they will do that, very careful, when they are in session next week. jon: a long week ahead for you, thank you. tom keene, there is a lot of work to be done at home. tom: this is true of any presidency, you get overwhelmed by issues. clearly president biden is. that is not anything uncommon. i would suggest some of the issues are rather dynamic. covid, to me, is fascinating. i have not looked at the granular statistics in the last 12 hours, but it is moving in the wrong direction. jon: using the u.k. other template as this whole thing piece in the coming weeks and moves on. tom: says who? jon: a lot of investors are looking at it that way. tom: tom: ok. i am going -- tom: ok.

i will go with that. i'm looking at the bond market telling me otherwise. jon: yields have come in for three straight sessions and equities have been -- for five straight. lisa: we have seen the delta variant reduce economic activity. president biden coming out supporting a booster shot, this coming out in about a month, saying most people will need a booster shot or should get one, which raises the question, talking about international relations of how much the united states will export some of these vaccines to try to get the rest of the world up to speed. also, how do you unroll the policy of booster shots that has had such a difficult time just getting people with the first two inoculations. jon: so this is eight months after the second? lisa: correct. jon: good morning to you all. here's your equity market, down 19 on the s&p, -.4%, a five day winning streak and grinding down record after record, all-time

high after all-time high. as tom points out, yields at 1.283. that's worth another look this morning. your use intends a spread, north of 100 basis points. from new york city this morning, good morning, this is "bloomberg surveillance." ♪

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jon: live from new york city for our audience worldwide on tv and radio, this is "bloomberg surveillance." here is the price action. equity futures lower with -.4% on the s&p. you're down on the nasdaq, down by .3%. on the russell, negative. all-time highs on the s&p 500, quite a rally. three days of declines on a 10 year yield. let's pick up there. that's get to the bond market, twos, tens, 30's. 10 year yield, down to basis points. two stocks for this one, retail sales out in two hours time, your second, chairman powell later, 1:30 eastern time.

inflation is transitory. you can look through all of this. some investors are worried about margins. the bank of america fund manager survey out this morning with profit margins expecting to decline. the first time since july 20. where has the money been going, tom? we have had a move of 16.5% off of the march low on staples. tom, that is where the caches going at the moment. many investors are overweight that sector, why? pricing power. it is about margins and margins going at the year-end. tom: it also -- as well. maybe this is the mother of all rotations for august. right now, we are focused on our top five guests. lisa, john, and i take that from a c and discard anybody with a d. on the d list is tony dwyer who joins us from -- he says if there is no recession, he has been a genius

for x number of years. i love buried in your notes, tony, the idea that you want to own what will go down less. boy is that a fundamental rule. tony: it sure is. i think jon's chart is an important one on consumer staples. when we downgraded the markets, tactically in april, it wasn't based on that we would have a recession or the end of the world was coming, it was that this was a fuller economic recovery we are taking on too far into fast. the 10-year note had jumped and folks were thinking it would go to 2% at least on the coming strong inflation in growth news. now, at one point to 2% and it was 1.12% this past monday, it is discounting some of -- 1.12%, and it was 1.12%. tom: looking at where we are in

the sectors, it all comes back to big tech. your thoughts on big tax? -- tech? tony: we neutralized our sectors. it is a hard thing as a strategist to say how gay benchmark but i think that has been a good call. we have downloaded the cyclical sectors and are looking for a better reentry point because we're not going to go into recession. what has been interesting is the mega cap text docs have held the -- tech stocks have held the s&p 500 higher. you had a new record over the last three trading days but there has been more declining stocks than advancing stocks. if you look at the russell 2000, looking at the advance decline or any of those things, i think it is really important for you and me to say what market we are defining. if it's a market cap weighted index, here's a good one, when i look to this morning, there were

less than the nasdaq composite stocks trading above the 200 day moving average. this is a very strange environment. i call it the summer of indigestion. jon: do you think the s&p 500 has downside protection baked into it dearly through the makeup of the index? tony: yeah, but that usually sets up the market event. a lot of the market is already corrective. the 5% to 10% correction we are looking for has been happening internally in various sectors. people forget in may the nasdaq was down almost 10% and semiconductors were down 14%. then that lead into the banks getting's most -- getting smooshed. some of the banks were down 20% from peak. this indigestion is typically what happens but then you end up having some kind of corrective action in the indices. to me, the makeup of the market, that has got to come with some

degree of fear of higher rates, not lower rates, because that will be more correction to the mag attack -- mega tech names. lisa: people say this is not a typical time and there is no historic precedent for the shuttering of an economy and sudden reopening of an economy on the back of a pandemic. do you disagree with this idea that we are living in unprecedented times and that there is some sort of historical precedents we ought to look to to predict how the market will behave over the next say six months? tony: awesome question because it drives people bananas. for time, that is a new technical term. tom: thank you. tony: it drives people bananas when i say this is not unique. stay with me for second. every time -- i have been through four recessions in my career. of those four recessions, it was

unique every time you went into a recession. i came from the savings-and-loan crisis, and you have the dotcom bust with 9/11, the great financial crisis, and of course the pandemic. the reason i'm letting you know that is that every time, the reason to go into recession, but the response is amazingly similar. you throw as much money at it as you can. when you do that, in the first year, you have this massive lift up of asset prices, financial assets, housing, the same stuff you buy with the money that is thrown out you, but then what happens is access liquidity starts to come down because you put that money to economic work. if you are company that raises a huge corporate bond offering or a secular date -- secondary in the equity market or ipo, you get flushed with cash. so what happens is over time,

you start to deplete that cash you got to build stuff and make stuff and buy stuff. i think that is where we are. we are in a position where we are in the second year in the in digestive. like 2001-2010. lisa: the difference this time is that rates are that much lower and the reaction function in markets every time there is a hick up and stocks in risk assets is to flood back into treasury. the idea you are talking about that any selloff will be predicated on higher yields is sort of challenged. how do you get around this reaction function of market participants? tony: one market? if we are talking about the selloff in the s&p 500 index, i think that comes with high rates. have seen it with lower rates. here is something that blew my mind when i look at it a few weeks ago. it is the initial move off of the low coming after recession in the 10-year note yield. the 10-year note yield rises as economic recovery begins.

at-year-old -- that teal has never been surpassed in the past four recessions. coming out of the 1982 recession, a bump up in rates but we would never surpassed that pump up. after the next recession, after the.com bust, same thing -- after the dotcom bus, same thing. we have never been above the level since. will the same thing be true at 1.74%? if you go back toward 1.74%, that is my year end call for like 2001 and 2010, if we get the next push lower, what i would like to do is into the cyclicals, because if you get rates to bump up toward the 1.5 to 1.75%, which nobody expects, like nobody expected a downturn in rates in march, i think that creates an opportunity for the year-end into the more economic recovery theme. the atkins -- the s&p could see pressure if fields go up.

jon: i love how quiet you you are speaking, softly and gently. tom: trying not to wake the dam dog. jon: they are 100% asleep. -- tony: there 100% asleep. tom: tony, your kids are out partying until 2:00 a.m. tony: they are not. [laughter] this is spousal management tone. tom: a real education -- jon: i real education there. tony: as a top five guests on the d list, i gotta come up with something different. lisa: [laughter] jon: tony dwyer, chief market strategist. just trying to make sure he doesn't wake up the family. it is pretty early for most people. tom: we have no lives. jon: i am aware of that. [laughter] one thing you and i have agreed on for quite some time. tom: what mr. dwyer said, at the

heart of the matter, it is not about making money, it is about not losing money. the only way to enjoy learning that is to lose money and i have been there. jon: many people have too. staples, the focus, i brought it up at the start. tom: what is a staple? toothpaste? jon: yes, you need to brush her teeth, don't you? where you go to get that? you might go to walmart. tom: is lvmh a staple? jon: maybe for you. not for us. margins have been a decent story. lisa: so is traffic, and how much do we see that deceleration people are expecting has you highlighted. in bank of america fund manager -- highlighted in bank of america fund manager survey. how much do stocks miss? we see that with home depot, even though the timeline -- the topline line revenue is not bad. jon: sales are missed though. stocks are down what for percent

in the premarket? lisa: i'm saying misses are overly punished. if they are overly forecast, there's not much gain. i much optimism is based into the market? that is something we will learn in the response after this comes out. jon: and also supply chains given what is taking place in china. tom: i am more optimistic than that but i take your point. it is about margins. you have to go down the income statement. there are different nuances in the margin. jon: first time since july 2020. they are looking for margins to fall. tony will be back, no doubt. down 21 on the s&p. we declined by .5% on the s&p 500. down three basis points on the tenure. with time king, lisa abramowicz, i'm jonathan ferro. this is bloomberg. ♪ s is bloomberg. ♪ ritika: with the first word

news, i'm ritika gupta. it has become one of the biggest crises in joe biden's presidency. a defined offense in his decision to pull u.s. troops out of afghanistan. he acknowledged the situation was "far from perfect." both allies and opponents suggested the president disregarded concern the taliban was advancing quickly and to that has led to a humanitarian disaster. the u.s. government is preparing to offer coronavirus booster shots as soon as next month. the biden administration officials are expected to recommend the shots be taken eight months after people receive their second vaccine does. the u.s. is inking a renewed wave of infections you will buy the delta variant. kathy woods has been reducing holdings tied to chinese tech giants. the founders spoke. >> we do own in some of our more specialized funds at chinese stocks. we have tried to stay away from

those that are privy to a lot of private information and our online. although you cannot stay away from all of them, but we have minimized our positions significantly in -- and in our flagship fund, we do not own any more chinese stocks. ritika: she says crackdowns have hurt innovation. global news, 24 hours a day, on air and on "bloomberg quicktake," powered by more than 2700 journalists and analysts in over 120 countries. i'm ritika gupta. this is bloomberg. ♪ this is bloomberg. ♪

>> it is demoralizing, but we have a danger in front of us. we have to be careful.

school systems have to make the right decisions. we have to not all backup and go out to do battle against the pandemic again. jon: it just keeps going. i was the johns hopkins bloomberg school of public health vice dean. from new york city this morning, alongside tom and ann lisa abramowicz, i'm jonathan ferro. all-time highs in the equity market. futures down 21, negative .5% on the s&p. yields coming in, down eight basis points friday, declining yesterday again, again this morning. : negative four basis points. crude softer as well, lower, lighter, off by .7%. $66 and $.83. tom: retail sales, this will be important. the pandemic, it is so important to get up to speed. the nation is not up to speed. i guess it is a fourth wave, even though i don't believe in waves. here we are. amos dollar has been in this.

doctor, an open question to begin. what are you concerned about in this fourth wave. -- wave? >> what i'm concerned about is the certain states that have not enough of their high risk population vaccinated putting hospitals into crisis. i think it is about eight states or so constitute about 51% of all covid hospitalizations. but we have is a regional problem. those hospitals are under stress and in the states in the south where they are inundated with totally preventable covid-19 cases. tom: i looked at the university of mississippi health center, and there is a critical unit. you go across the bridge and there garage be. i believe they have two tents in parking garage be, just like the tents in central park long ago and far away. who has the power to tell mississippi to do this to stop that? dr. adalja: it is very

difficult. i don't think anybody has the power because now it is up to the individual since his ends -- individual citizens of mississippi to do the right thing and get vaccinated and up at their into crisis. it is self-inflicted, preventable. if people in mississippi, the high-risk people, if they were vaccinated, we would not have people getting treated in parking garages and transferred out of states from mississippi to other states. we would not have covid-19 being a problem in certain regions of the united states. we would be more decoupled, for the way it is in new york or pennsylvania. we have cases in hospitalizations but we are nowhere near crisis because some and he high-risk people have been vaccinated. lisa: what is the latest in terms of infection rates were vaccinated individuals? dr. adalja: it looks like right through infections have been rare with some of the other variants. with the delta variant, it seems to be picking up. it is still not a common problem. it is probably 1% or around

there, depending on who is getting tested. what we know about the infection rates in fully vaccinated individuals, if 1% or around there, you get a breakthrough infection, it is likely not to be a major issue are clinically significant. it is extremely rare to be needed to be hospitalized and more rare to die from this. the vaccines are holding up when it comes to what matters with breakthrough infections, preventing serious disease, hospitalizations, and death. if you go through the hospital, the majority of people are not vaccinated admitted for covid-19. lisa: i understand from a public health perspective. however, from a transmission perspective, this sets the community back in vaccinated individuals can be infected and pass along the infections. how much does the delta variant increase the need for a booster shot eight months after the shots for the emaar in a vaccines? dr. adalja: this is unclear. if you are talking about preventing mild breakthrough infections, i do not think that is the real threshold for needing a booster.

for me, the threshold is to see breakthrough infections landing people in the hospital at a serious rate and that is not happening. i think it's important to study boosters on healthy populations and have a plan that he to go if that is necessary. there are rumors that may be in september, health care workers and those early vaccinated might get a booster. i do not know what impact it will have on hospitalizations. when you were talking about people who have knocked on the first does. i think it is more important to get first doses into mississippi then third doses in pennsylvania. tom: what is your take on schools? i understand as a partition at age 12 as well, but what is your sense into august and into the first two weeks of september? dr. adalja: schools are going to be a victim to what is going on in the community. if you have any outbreak uncontrolled in the community, you will see cases in schools. the best way for schools to stay open, and that has to be a priority, in person schooling,

to have a highly vaccinated student body and teacher body as possible. it is good the teachers are talking about the vaccine mandate as a condition of employment. you also have to remember if you have children that are less than 12 on vaccinated, you will need school district flexibility on masks and how they do things, especially with extracurricular activities where it is harder to social distance where we saw cases occur. in class at a desk is probably unlikely to be driving spread. it is the other stuff that drives a spread. there, i think we will have to look at it as a community by community basis. we will need to be -- communities will need to be specific on rates of vaccination and community and schools. jon: we have to leave it there, dr. amesh adalja, johns hopkins center for health center seniors color. in an hour and 40 minutes or so, we will get retail sales in america. the conversation about downside around that given what has happened in the country the last couple months. tom: ian jefferson on twitter

with pantheon. he is great with linkedin and pantheon. he takes it out august of the september report. he is not so much now, he has 30 days from now. jon: interesting. the federal reserve probably will be as well. lisa: a lot of this has to do with spending in services because that was supposed to be the rotation. if they do not see the uptick and it is because of the delta variant, how much of that is a precursor to less growth in the labor market in sectors which we need to see in order to get some of the metrics the fed has. jon: goldman already made the call. they pushed back the full service recovery and that led them to downgrade their outlook. lisa: so how does the fed respond? do they basically say we will taper anyway because we do not see marginal benefit? or do you see them push back and say, you know what, let's hold tight? jon: chairman powell, over to you, and next week. tom: we will see. can i interrupt here and say --

jon: you my permission to interrupt? tom: that's true. the most important thing yesterday was a single sentence from the atlanta falcons, american football, because there -- they are fully vaccinated. it is an absolute outrage that professional sports is not fully vaccinated. is there anybody in the name of soccer leading the way on this? jon: i'm not sure. you raised the question about the nfl and the change to the rules. what were the changes to the rules? you can't -- if you miss a game because of a covid case. tom: the news is harry kane is practicing with a tots. can the tots can fully vaccinated is way more important. they watch this program and i go back and forth with them. jon: ok. are we done? tom: just get vaccinated. jon: you two more hours of this. you have your time to do this.

equities are down 20. tom: can i get more tang please? lisa: [laughter] jon: yields in three to four basis points on tens. a calm, relaxed tuesday morning. tom keene, lisa abramowicz, jonathan ferro. this is bloomberg. ♪

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♪ >> i don't buy the two month recession we just had. i don't think we've had the shock yet. >> i am not a big believer that we are in a stagflationary environment yet. >> we do want to stay nibble because that is when the fed hikes start to get priced in. >> the anxiety around the taper, we think it is going to be a tantrum-less taper. >> the question is, is now the time to come back in the reflation trade? >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: from new york city for our audience world, good morning. this is "bloomberg surveillance ," live on tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. your equity market 19, -20 on the s&p, down 0.4%. here's the