>> a lot of the market is already corrected. >> this feels more like coming down from stimulus payments then it does reflect invariant fears. >> this is going to be ash reflecting variant -- reflecting variant fears. >> this is going to be a boost in productivity for the next two to three years. >> the biggest disagreement on wall street, is it september, is it december, guess what? it doesn't really matter. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: what a low conviction market. 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 totally unchanged on the s&p after yesterday's major drawdown, down 0.7%.

every morning we wake up, we had down to d.c. and discuss afghanistan. it is the one thing we do not discuss that you wonder starts to shape this market. we have stopped talking about infrastructure spending, fiscal spending down in washington. tom: there's a high conviction august and the news flow is absolutely extraordinary. i look at the market and the pause today. yes, swiss franc a little bit stronger. but this is the day where we start to link off the shop of -- the shock of afghanistan. the beds are coming in -- the op-ed's are coming in. condoleezza rice and others. it is all linked into confidence. jonathan: and administration may be overwhelmed by events right now. tom: overtaken by events, absolutely. the question is the leadership in governance and the visibility after the president made those first tentative steps the other day. jonathan: lisa, pushing forward

today in afghanistan. lisa: joe biden really had a reputation of client competence. one thing a lot of political analysts are saying is that the situation with afghanistan really threw that into question, this idea of how could he not have known that it was not going to be a quicker takeover by the taliban. how come he did not do more to get people out of afghanistan before that who had helped the united states? this goes into the infrastructure discussions. how can he be certain that inflation is transitory or that this is going to be positive for the nation? it just undermines a certain level of credibility when he needs it to a very high degree. jonathan: the issue at play right now for the president and the administration, the approval ratings are moving in the wrong direction. and a lot of this predates what happened last week. tom: that falls into august and to speaker pelosi's challenge with a president under siege into the election.

maybe that is all pulled forward for the primary season for 2022 that begins a letter zero -- begins a lot earlier because of afghanistan. jonathan: relatively calm in the market this morning compared to what is happening. yields are higher by about a basis point or two to 1.2767%. all over the place over the last few days. friday, lower by eight basis points. just trying to get your hands around what is going on in the global economy and what it means for the treasury market is tremendously difficult. we have a bounce back in crude. wti back up to $7.23. lisa: it is -- up to $67.23. lisa: it is hard to have conviction. that capital report earlier this week showed a lot of foreign buying in the united states debt. just another level of uncertainty into the dynamics here. at 8:30 a.m., we get more data on the housing market.

yesterday, homebuilder sentiment fell the most in 13 months on these higher prices that are crimping the buying power of consumers, as well as input costs and higher construction costs. i to 8:30 a.m., -- at 8:30 a.m., we will talk about infrastructure with jack lew. we will talk about the potential implications on getting some sort of infrastructure bill passed, as well as global outreach to combat the belt and road initiative of china. how much is that an important thing for the u.s. to do as it tries to counter the chinese prowess trickling into other nations in terms of financial aid? at 2:00 p.m. we get the fed meeting minutes. i am curious to see how much they give some sort of indication of how long they will need to see these labor market records increase before they can start tapering their bond purchases. do they start to get worried

about higher food prices, given the fact that that is crimping sentiment among consumers and leading to higher inflationary expectations, which tends to be a self fulfilling prophecy? jonathan: do you know who's concerned about higher prices, inflation? the boss of the number one wealth fund on the planet. we will catch up with him in about 30 minutes. that is a key topic for them. they manage real money, $1.4 trillion. tom: what is really cool about this is there's x number of sovereign wealth funds, and this is the leading mold of visibility, so i am looking forward to it. jonathan: nicolai tangen of norges bank coming up. with us now, christopher harvey of wells fargo. we are sitting at the threshold of a major buy for cash and -- major bifurcation of scenarios. is it difficult for you to look forward?

christopher: it's not difficult to look forward, but there is a lot of uncertainty. but what we think is you have to barbell a strategy. part of that is an anchor in low volatility. you want to put more risk aversion in the portfolio. you need to do that in a low volatility type fashion. tom: what is that, buying t-bills? [laughter] christopher: no, not buying t-bills. you can look at a number of different ways. there is some traditional low volatility sectors, staples, harm, or just look at less risky stocks. things like mickey d's and such. typically when you lower volatility in a portfolio, it does provide some type of protection. when the market goes down, these things typically outperform, and it is a good anchor for the portfolio. lisa: what would you say to people who push back and say

there's so much cash in money market funds, people are not fully invested, people have been cautious, and rates are going to stay low? it makes sense, but fundamentals have not made sense. what do you say to them to give them more caution and convince them that people are not going to buy the first dip that they see? christopher: it's funny, i can't tell you that they won't buy the first dip. that is what they have been doing. the market is thinking all-time highs. the bond market will tell you something funny. i don't know if it is telling you something economic, but there's a lot of uncertainty there. we had retail sales the other day. i think this is a time where you need to be prudent. you need to be cautious. you want to barbell low volatility with something else. that something else for us is higher covid data. we think a lot of these stocks tied to the reopening that are

more cyclically oriented will do well. they have pulled back. we look at the underlying fundamentals. they are good. we just don't know the timing. so we want to mitigate the timing with that low volatility. . jonathan:jonathan: are you deemphasizing your year-end price target? christopher: we are wrong. we've missed it. so where are we going? if we have a call that is really high, we are going to go on vacay. but who wants us to go back to consensus? our clients are saying, how do i position for the next four and a half months? this is where we spend most of our time. jonathan: this is why i asked, i thought maybe that shapes your views. i'm not taking a dig. do you see how he dealt with that? [laughter] tom: chris, it's great. let a try to solve this. you have to write about the ratios of the market. as you recalibrate and readjust

to the cards you are dealt, what part of those ratios matters the most forward? christopher: i don't think i'm going to enter directly, but let me say this. what we are watching right now, there are two main drivers for us. it is tapering and it's covid. we are watching the weekly covid numbers. we are watching mortality rates. tom: what about earnings? are you watching target, as an example? christopher: we are watching earnings, watching revisions. there was a lot of talk that revisions would top out. revisions haven't topped out. we still think numbers have been very conservative. we still think what is keeping this back as the supply situation. that eventually needs to go somewhere. more importantly, we need to normalize rates at some point in

time. the fed owes close to 25% of the treasury market. if the fed owned 25% of the s&p 500, where would valuations be? we need to start normalizing that. we need to watch planes numbers. we need to watch the employment situation, and we need to get back to a situation where the cost of capital is decided more so by the capital markets than by the fed. jonathan: can we just confirm for everyone that we are friends? we do get along. [laughter] lisa: nope. christopher: you tell me. jonathan: we are friends, come on. chris harvey, wells fargo head of equity strategy. if you want to wind up chris today, please a male him and asked him about his price target. you equity market unchanged on futures. isaac what chris had to say at the end is really important. at the start of the crisis, the goal of the federal reserve was to divorce financial conditions from underlying fundamentals. fundamentals have started to pick up in a material way.

now it is about the handoff. the handoff is always difficult, and it does not come without volatility. tom: i'm going to go back to the gdp call and what corporations do with the nominal gdp they are given. there's a huge uncertainty over that in q4, but what about q1 of 2022? i see no vision there. jonathan: talk about reopening. it went from april or may of 2020, i know we are having a conversation about maybe getting back to normal, whatever that means anymore. lisa: but the bifurcation between inflation running too hot and posing a real problem for the fed firs is this idea of whether we reopen in the face of the delta variant is so huge. jonathan: i totally agree with you. tom: i totally agree. i take tea -- i take tea, my

dear. the englishman in new york. jonathan: thank you. i don't understand the toast on one side thing, though. i don't know anyone who does that. tom: we've got an image of the thames. ah, the river thames. jonathan: is that the east river, tom? tom: nailed it, jon. for those on radio, it is the george washington bridge. we can see lisa is there. [laughter] jonathan: brian nick of nuveen. let's get out of here. this is bloomberg. ♪ laura: with the first word news, i'm laura wright. the biden administration says it has cleared the way for americans to travel to kabul to leave afghanistan. they say they have the assurance of safe passage from the

taliban. roughly 3500 u.s. troops are on the ground providing security as kabul airport. there are numerous taliban checkpoints there. once again, target has topped wall street sales and earnings expectations. still a slowdown in growth raised questions about how much longer those results can last. target has arguably been the biggest winner among major retailers during the pandemic. its stock has surged more than 40% this year, but it hasn't outperformed expectations in the way it did in 2020. lowe's raised its full-year forecast after posting better-than-expected quarterly figures. lowe's performance contrasts with weaker than expect it results from rival home depot. pot.

♪ >> we get to make our decisions independent of political control

, but if we are going to expand our role beyond what congress has assigned us, that weakens the case for holding onto that independent. jonathan: the chairman of the federal reserve, jerome powell. from new york city this morning, good morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. your equity market this wednesday morning down about 0.1%. we are a little bit softer after yesterday's move lower on the e by 0.7% -- on the s&p by 0.7%. in the bond market, yields start to lift just a little bit. a bit of a steeper curve here. yields up by a single basis point to 1.2717%. on crude, it bounced back this morning of 0.9% to $67.21. tom: not a snooze fest, but nevertheless, shoring to the

markets this morning. jonathan: on the demand side, given what we have seen taking place in china, a lot of people starting to reevaluate their demand projections because of that. tom: not only as we hear from our allies on afghanistan, but certainly the new slow out of washington. emily wilkins with us on the damage done coast-to-coast. at 114 mill street and hooks town, pennsylvania, conor lamb is a moderate democrat in the senate race as well. this disaster permeates all the way to pennsylvania. what does it mean for the moderates of this nation?

maria: --emily: it permeates all over the country, and i think you are seeing that now for members of congress. there is a slight difference in rhetoric between democrats and republicans, but you are hearing democrats really come out and say this withdrawal was a mess, and we want to look into it. you are beginning to see the heads of the foreign affairs committees in the house and senate say they will be holding hearings. the secretary of state, secretary of defense, they want to get to the bottom of why the withdrawal from afghanistan laid out in the way it has. jonathan: -- tom: that is the look back. i want to know the look forward for moderates. can you assess that now? emily: to be honest, i thing we are all waiting in washington to see how this plays out. certainly there are many people across the country who know someone who was involved, but the thing about it is, this is

consistent across time, how americans feel towards afghanistan and other international issues. and never quite reaches the same priority level as it does the domestic issues. that is why you're seeing congress continued to push forward is president biden's agenda even while a number of them criticize how the administration withdrew from afghanistan. they realize that even though there's concern about what is happening abroad, it is important to get childcare, medicare expansion, so i think that is why you are seeing this whole process were democrats in congress were criticizing the administration, but also working with them to pass their agenda. lisa: there has certainly been an increasing internal focus of the united states and frankly a lot of nations around the world over the past few years. there is a question of the importance of having strong alliances with nations that we have traditionally been friends

with in order to shore up supply chain issues and trade generally, an addition to other situations. is there more pressure now for the states to export some of the vaccines that we have in order to try to resurrect some of the confidence that people have in the united states? emily: yesterday we heard white house press secretary jen psaki say the administration would be doing both, with administering the third vaccine booster shots, while delivering vaccines to nations that don't have as many as the u.s. has. but the u.s. is still coming under heavy criticism for this decision to pursue the third vaccination shot when there are so many nations, including some that are close allies, that really only have a small population accented in. there is also a sense that if we want to make sure we are seeing the end of the covid-19 pandemic, we can just worry about vaccinating americans.

that is definitely something to pay attention to one president biden makes his address. how much does he focus on the international? lisa: to be clear, the united states has enough for that booster shot. is that true? i've heard conflicting messages. emily: we don't know exact what the timing is going to be. we are still looking for fda approval. but we are hearing more messages from the cdc n from the biden administration that they do think that is the way we're are going to need to go forward. jonathan: we started this hour talking about whether the administration had been overwhelmed by events in afghanistan, and would it derail the effort and easy to do something at home, domestically speaking. a lot of people divided on the outcome of all of this. tom: there's a lot of different

opinions here. there's no question about it. i go back to what corporations are doing as we synthesize all of this together. now we are synthesizing the international story. can i ask a question which i think is really germane? has jackson hole changed? jonathan: in what way? tom: in what we are going to be looking for, given the slow down in the economic data and given this international shock. jonathan: well, it is operation do no harm. it has to be. this is an extreme example. that was a central bank that wanted to tighten monetary policy. just like that, the day before the meeting, the prime minister institutes a three-day lockdown. that is how quickly things can change. do you remember chairman powell talked about being in a dark room, and when you are in a dark room, you've got to move more carefully? i think that is the environment they are still in. they are in a very dark room looking into next year, at a

time when there's a lot of price pressure pushing them to move quickly. tom: just the basic idea means we have to provide clarity, and i am pleased to announce that when you go west and you think of the tumbling tumbleweeds of jackson hole, you think of roy and dale, which is before your time. that would be roy rogers and dale evans. you look at that and you say well, that can work, except we are going to do better. i am pleased to announce we are taking "surveillance" to jackson hole to get in mike mckee's way. it is going to be me and lisa. i think lisa's got a little bit of dale evans and her. lisa: i had no idea where you were going to go with this. i was going to ask jon to translate. jonathan: did you know you were going? were you aware? [laughter] lisa: i was aware. jonathan: i won't be with you.

tom: i'm looking forward to some terrific conversations. we got to learn the lyrics of tumbling tumbleweeds. jonathan: lisa is really excited after that. the promo for next week, i will be here, they will be in jackson hole together. hole together.

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♪ jonathan: live from new york city, for our audience worldwide come on tv, on radio, this is the price action this wednesday. we are down five, off by about 0.1% on the s&p. firmer on the nasdaq by 0.1%. the small caps not doing much at all. if you switch of the board and get to the bond market, 1.2734%, yields higher by about a basis point on tens. similar move on 30's. bit of a steeper curve, selloff in the long end, but a muted mood this morning on the back of the treasury curve. let's get to the commodity story. wti coming into today down for four straight sessions.

$67.39 cents right now -- $67.39 right now. they've had to rethink what demand looks like out of china because china is still pushing forward with a covid elimination strategy, and when you do that, your tolerance for cases is so much lower, and it doesn't take much to figure out what restrictions mean for demand going forward. tom: first week of july, you've got $77 come on the way to $69. is that a trend? i will let others decide. i read a briefing yesterday on where china gets its oil, and it is remarkable how international their oil acquisition is. jonathan: including some places where some people think they maybe shouldn't be getting the crude from, but that is a conversation for a low bit later. crude up a little more than 1%. a ton of earnings to get through as well. let's do that with romaine. romaine: target beating on most

of the main metrics, about 8.9% growth on comp sales numbers. e-commerce sales were up about 10%, but there is concern about that slow down. this is the narrative we have seen from so many retailers that were posting triple digit growth during the pandemic. obviously, target now guiding towards single-digit comp sales for the rest of the year in the second half. whether they can adjust to that and just those valuations. lowe's shares higher by about 5% in the premarket. that seems to have a lot to do with some of the gross margins and the idea that those margins -- both margins -- growth margins and the idea that those margins are guiding higher. tjx tom sales well above what the street was looking for. the company flipping from a loss to a profit on an adjusted basis for the quarter, also expanding

its buyback program. after the bell we are going to get more earnings. probably the two biggest companies we are going to keep an eye on, nvidia megaton of money off of those datacenter servers, as well as a lot of money off of this chip shortage. it has really worked to their advantage. expected to actually get up to about 66% on analyst estimates. the question is sustainability and whether the company can diversify away from some of those servers and into new businesses like the automotive sector. robinhood, we get the first report since it went public. we have already seen industry data on some of that data for order flow business, down about 23% in the quarter. tom: thanks so much. sovereign wealth fund discussions are usually pretty dry, pretty bureaucratic. you can't do that with the norwegian sovereign wealth fund ceo. you're going to have a discussion with a guy truly outstanding in absolute return in the hedge fund business, and

quite the controversy as he took over at norway's large pile of money. jonathan: this is $1.4 trillion, and i am pleased to say that nicolai tangen joins us now, the norges bank ceo. he made some headlines with this quote. "i think probably inflation is the biggest threat to capital markets we are seeing now. it will probably had the portfolio in a way we have not seen before." what did you mean by that? nicolai: i mean that we are at a situation where the bond yields are extremely low, and the stock market is extremely high, so therefore any main change in inflation will hit both parts of the portfolio. in the past, it's one of them and not the other, but this time both can move in the same direction. jonathan: do you have to do things differently with that in mind? nicolai: we are a very long-term investor, and we are so big it is kind of difficult to move around. we are in a way also too big for

counterparties. even though huey -- even though we have a time horizon for 100 years, we will probably have to look through it. jonathan: what are you choosing not to own right now and why? nicolai: we have various things that we look for for esg reasons. we started to settle down various things already back in 2012, and that has been a good strategy. that is something we will increase going forward. jonathan: what does that mean for the regional bias going forward? do you have to reduce that because of esg concerns? nicolai: not necessarily. we have roughly 5% invested in china. jonathan: some people call it un-investable.

i've heard that over the last couple of weeks. do you think it is still investable? nicolai: i think it is investable. you have a lot of great companies there. we have large positions there, and we have been in a lot of those business models. jonathan: to believe in the business model, you have to have some predictable regulation there. some kind of certainty looking forward several years for your time horizon, all the longer. do you have that with china? nicolai: i think we have uncertainty in all markets, so the nature of it is a bit different in china, but that is life as an investor. jonathan: do you think things are changing more rapidly over the last couple of weeks, the last couple of months? nicolai: i think things are changing quite quickly. we've got people on the ground looking at these things, and we

will make necessary adjustments in the portfolio. jonathan: you've brought on sports psychologists. i know this is an area of interest for you, to prepare pms for things maybe they have not been prepared for. can you walk me through how you are managing the people within the fund and the changes you are trying to make? nicolai: we do this despite me being pretty pathetic in sports. i have nothing to bring to the party as an athlete. but i have seen how sport psychologists can help us do different things because what we do is very tricky. it is high achievers and so on, and i would say the main part is resilience and bounce back ability. how do you get back when you have losses? how do you take the same type of risk even when you go through a tough patch? that is the key i think. jonathan: can you give me a real life example of a time when that has helped, when you see that change develop? nicolai: it has helped me, for instance, during the last eight

to 10 years where i am. it has made me come through and aim state and some of the really volatile periods. i thing it a complete no-brainer. jonathan: you are also listening to earnings calls. you've done interrogation training in norway as well. just give me a flavor of that, how helpful that is to understand the kind of questions you need to be asking on an earnings call, the tone of the delivery from the c-suite, and the kind of red flags he would be looking for on calls like that as well. nicolai: spent 10 years learning it. it is not just something you can kind of teach in six seconds. but everything from how u.s. questions that you linked together different types of questions, you look at which managements are not answering versus what they are actually answering. you look for various words and qualifiers. just a whole range of techniques. jonathan: it is good to catch

up. nic is over in norway, the norges bank ceo. if you broke up that fund for every single person in norway, you are talking about $280,000 each. 1.4 trillion dollars split between 5 million. unbelievable size. tom: the hedge fund guy got the tech called right. to his great credit, he said, now what? the now what is a little opaque. i would say, to your question on emerging markets, i am really fascinated to see what they do with some of the more obscure emerging markets, and some of that frankly going from the middle east all the way to the stans, turkmenistan, uzbekistan and that, all the way to india. jonathan: the issue for a sovereign wealth fund when you own 1.5% of global equities, you are in everything.

you are choosing what not to own . there's some big esg concerns that have been talked about so much with norway. we don't need to go over that again and exhaust the issue. but on this particular issue, you end up owning everything. you can say inflation is the big factor right now we need to be concerned about. you've got to say there's not much we can do about it. lisa: which is the reason why you asked about the executive calls. how active of a roll are they taking as a corporate owner of significant parts of the companies at a time when they are such a massive shareholder? i am curious about the whole concept of this fund. this was a nation that took its oil wealth, understood it was temporary, and put it aside for the entirety of the population and has been investing it. how do they diversify away from that oil patch, given the fact that it continues to provide incredible returns? jonathan: energy a big factor. energy has just been a huge part of the return profile for 70 people -- for so many people. tom: it has been a different

game this year. what i see on the show is massive, heated difference of opinion about how you get to 47 come out to credit suisse's 5000. jonathan: there's been energy and financial so far, but that story has faded, that is for sure. jim bianco, bianca research, will join us -- beyond the -- bianco research, will join us. yields are higher to 1.27 34%. in fx, euro-dollar unchanged at $1.1712. this is bloomberg. ♪ laura: with the first word news, i'm laura wright. president biden will unveil a plan today that will give more americans coronavirus vaccine booster shots. it is a move that has led to criticism that the u.s. is hoarding doses while poorer

countries suffer through the pandemic. the president calls for high-risk groups including health-care workers and the elderly to get a third shot as soon as next month. the u.s. is trying to keep the taliban from accessing assets belonging to afghanistan's central bank. the biden administration has frozen almost 9.5 billion dollars in afghan accounts. the taliban remains on the treasury's department sentience list -- on the treasury department's sanctions list. authorities warned some areas in the haiti quake soon could get up to 15 inches of rain. . the death toll has been raised to more than 1900. almost 10,000 people were injured. four american investors -- for american investors, chinese stocks becoming the asset not to own. investors have trimmed china exposure. cathie wood's flagship atf holds any shares -- flagship

fund no longer holds any shares. when federal reserve officials had to the next annual retreat next week to talk economic inequality, they will be sitting in the wealthiest county in the u.s. according to the economic innovation group, the wyoming county home to jackson hole has the nation's highest per capita income. . by asset. in recent years, jackson hole has attracted the ultrarich thanks in part to its proximity to renowned ski slopes. 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 laura wright. this is bloomberg. ♪

>> clear direction is to be reducing monetary stimulus. that is lifting the official cash rate, and in turn

tightening monetary policy. so this has not shifted us at all from that broad path, but it has given us time for paul's -- for pause. jonathan: how quickly things change. that was the governor of the bank of new zealand, looking at raising interest rates and then saying one case, three-day lot on, and no chance. how do you hike interest rates when the country is locked down? tom: you don't, and particularly with the visibility they received as a two island nation, it was very real and very sudden area other central banks -- very real and very sudden. we will see if other central banks have the same challenge. jonathan: yields are higher by a basis point or two. there's that bounce back and crude, up by 1.22%.

tom: a lot of people get lathered up over jackson hole. it is truly an academic conference. i will take one or two of the papers and read them cover to cover. james beyond the -- james bianco knows this, bianca research -- bianco research. what does jay powell not want to do in wyoming? jim: he doesn't want to cause problems similar to in 2018, when he talked about the taper on automatic pilot, and it greatly upset the market. what he wants to do is lay out a plan to begin a taper sometime next year, and he's going to but a lot of caveats in it.

those caveats are going to be provided that the economic growth continues, and provided that there's no surprises to the economy, and that is going to be a shout out to if delta continues to rise, and restrictions on the economy continue. that could derail the plan for tapering. lisa: a lot of people are looking for taper talk. however, we've already gotten some sense that one of the main topics will be inequality and what the fed can do about that. as a market watcher, how much are you looking at that is possibly giving more of a sense of what is to come then perhaps people are expecting? jim: income inequality is a big problem, and big picture policy can contribute to that. but the immediate policy year to year, it is very hard to say they are going to adjust policy either way because if they were going to talk about income

inequality, i think what they should be doing is raising rates , or they should be tapering faster because i think it is this low rate, creating this speculative atmosphere in financial markets that is contributing to income inequality. i think they are going to talk about it. i hope they acknowledges their role in it, although i have my doubts. more likely, it is going to be on the regulatory side, if anything. lisa: a lot of people saying fed policy has contributed to widening inequality, and it goes to a broader point. have we reached the threshold at which fed policy is viewed as perhaps harming more than helping, not only with respect to inflating asset prices, but also at a time when consumer prices are increasing at a faster pace than many will destin many people expected? -- at a faster pace than many people expected? jim: there are booming earnings, but you are paying for those

earnings. the valuations in the market are near the peak valuations come about the justification is twofold. earnings are very strong, and jay powell has got your back. if that creates an environment where there is a change in policy, like inflation is perceived to be persistent instead of transitory, that could lead to a sharp pullback in markets. they are setting up markets that they need to continue to get constant good news to go up. they have for nearly a year now. they have been getting constant good news. but if that day ever comes that it doesn't, they could be setting up for a bigger fall than you would otherwise see. lisa: can you help us understand why yields are where they are? jay powell has said he doesn't quite understand why they are as low as they are. you say perhaps it is the growth outlook, not inflation. can you elaborate? jim: i've been looking at the reopening stocks, an index of

them, and they have been dramatically underperforming the market since the march peak, which also happens to be when the 10 year yield peaked. if you overlay a chart of reopening stocks relative performance to the 10 year yield, it is the same thing. what it suggests is the market is more focused on growth. we are not talking recession here. we are talking about from a very high level of 6% or so gdp estimates down to something a little bit less than that. as growth picks up, so would interest rates. there's a fear of restrictions from the delta variant as we see more and more. just yesterday, they house that starting friday, everyone has to wear a mask indoors. more like that will be coming and coming. tom: i jackson hole, there will

be a lot of academic papers -- at jackson hole, they will be a lot of academic papers. does any of the theory that we have now apply to the actual debates of jackson hole? does the dynamic equilibrium theory actually matter in the mill you -- in the mill you we are in? jim: dan to reload was at the -- was at the fed and gave the speech that said the fed has no working theory on inflation. that if you test any theory you want, expectations anchoring, monetary philosophy of money, it just doesn't pan out in the statistics of what causes inflation. we are all kind of in the dark, and i think rich clarida is also a bit in the dark. he's been a big advocate of inflation being anchored.

it is going to be very difficult for the fed because they want to project certainty on where inflation is going to go. the fact of the matter is they don't know, we don't know. inflation is a very difficult thing to get your head around, and a very difficult thing to understand, so it is a big gas. we will have to see. some of those papers i think should address that next week. jonathan: we've got to leave it there. jim b anke -- jim bianco of bianco research. when you leave, you get to say what you really think. lisa: you can actually have a point of view instead of just talk and these bland academic phrases. jonathan: i remember hearing stories about time spent at the bank of england, and governor king told everybody you can say what you like about qe, but you are not allowed to say it

doesn't work. there was always that leadership that said here are the parameters. go talk about whatever you want. tom: i just had a nightmare vision. you, me and lisa walking out of the lodge onto the railing and looking over the bailey. jonathan: i won't be there. keep dreaming. this is bloomberg. ♪

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>> although we've seen some headwinds, recovery is still in place. >> this feels more like coming down from stimulus payments then it does were slipping delta fears. >> it takes a bigger hit that mental outlook. >> this is going to be a grounding market -- a grinding market where the biggest challenge is continuing to stay in markets. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: g