>> markets love this period of time where earnings growth is good. >> is almost the market saying that that is exiting no matter what. >> it is not surprising that momentum is low, just that it is all been lumped into this quarter. >> the most important thing is the emphasis that tapering is not tightening. >> the lesson that this has taught us is that printing checks is really the easiest part of this. >> this is "bloomberg surveillance." jonathan: yields are high -- hi

and the curves are steeper. this is "bloomberg surveillance." i am jonathan ferro. tom keene mostly back in a couple of days. it is a snooze on the equity market, unchanged on the s&p and similar on the nasdaq. i know tom is watching. in the bond market, that is with the headlines are, yields higher again and this curve is steeper. the sicko and perhaps because the fed said it is going to begin tapering sooner, and other people are saying it has to do with the chain issues and others saying maybe it's higher wages. the answer really will determine the path of the rest of the economy and friendly markets because these outcomes are not the same. jonathan: what he think that may be the window is closing for the fed?

lisa: the question is tapering or tightening. tapering they were going -- they are going to do, a lot of people say it will not make a big difference whether it is january or february. if it is to the point where we see a turn in the economic cycle, what will be the incentive to raise rates? they got to taper fully before they can raise rates according to their own communications. jonathan: your take on this, is that the bond market starting to pick up a little bit more as we push out that action? kailey: perhaps. i think lisa's point about the wage pressure is interesting. in that report we got on friday, how much of that is the composition of that and how much is the labor shortage really resulting in the power being

shifted to workers instead of employees -- employers intimating wages and what kind of pressure will that create? jonathan: that is the conversation as we kick off the trading week. there is the move of the bond market, a similar move on 30s. euro is slightly negative, most -- i am clutching at straws looking for a move. lisa, you sound like tom. tomorrow, 10 years at 38, 24 billion of 30 your notes coming up later. lisa: this will be interesting to see. we talked about yields going up, but they are going up in europe as well and i wonder how much we will be tilted towards the ecb

for the meeting on thursday. the fact that they are talking about tapering could be significant. jonathan: we need the gordy cash impression again. thank you. there has been a stellar run so far. joe: looking at some of the numbers, we like cash here and if we get this pullback, we might have a shopping list and be ready to go, but still long-term equities. lisa: you have a shopping list, who among your colleagues does not?

joe: you got to be ready to start shopping, and not wait for that 5% pullback. some think i will not buy unless it is 10%. when you see good value we saw earlier this year in the market, you stepped in and buy. a lot of our clients are long-term investors, and they have been sitting on the sidelines for 18 months, but they are shoulder -- slowly coming back in. >> how much are you watching the economic data, the idea that any economic data will be met with a prolonged tapering or tightening by the fed? joe: we are watching it carefully. the wages are usually important, and how much the company's offset that [indiscernible] that will be usually important in terms of the granular effect. and we are looking for companies with good productivity and that

have a global presence. we still think, on the shopping list, despite the market run, there are good places to put money. kailey: if we were to see a dip that you could buy, what would be the catalyst for it? joe: we will get it eventually. we will get it for sure. there is no doubt about it, but we like health tech and technology, but i think industrials, financials, certain parts of the energy sector, there is more site there so we will emphasize on the cyclicals first and then go back and look at technology and health care. kailey: is that because bond yields move higher? joe: but why would they move higher, is it related to inflation, stronger growth, what is the dynamic? we think we are pushing out into

2022, so above average growth heading into next year along with better-than-expected earnings, so that is the set up for equities even from these levels. jonathan: met -- everybody has a plan until they get punched in the face, according to the great philosopher mike tyson. in the context of a decelerating global economy, that move could be conflated or confused with something much worse. how do you draw a distinction between the good time for the drawdown that you buy and the one that you should avoid? joe: we are not market timers, anyone who tries to time the market is as full's game -- it is a fool's game. look at the company at sectors you want to be in, what is lacking in your portfolio, so i think the plan is no what you

need and know what you have and know what your inspirations are. construction is about the longer-term, being opportunistic on the down days but not try to time the market, just good quality assets. jonathan: let's talk about the shape of the cycle come and let me describe what it could look like. if we did have higher inflation in that process and growth continues to be decelerating, what do i want to own in that environment? joe: technology, automation, robotics. we talk everyday about the labor shortage without realizing the flipside, automation, artificial intelligence. restaurants will not have waitresses. we are seeing the cusp of a technology renaissance that helps drive that, so we have higher inflation and higher bond yields and we have to grained down in the market.

good companies will come out of this stronger and i think they will be the tech heavy companies. we are still in the beginnings in that respect. lisa: we've seen a record amount of equity flows into retail funds, and i wonder what the signal for a professional for an investor like yourself really is. joe: it can be scary. we are just seeing a lot of accent savings coming through and we are not done yet. we are watching it carefully, with household sitting on $2 trillion more in savings we think there's more of state -- upside to this market. this is where you have to focus on high quality, not the lower quality equities. jonathan: good to hear from you this morning. joe quinlan from merrill and

bank of america. kailey: if you recall, lise and i were on the same flight earlier this summer, and her travel companion snuck me into the delta lounge is a family member and mike tyson was there i dared lisa to go up and take a selfie with him and she said no. jonathan: family members? lisa: it is all a ruse. all i can say is mike tyson was there and he was getting a lot of people coming over and taking selfies and he was very gracious. jonathan: and he did not want to do that? lisa: i did not want to get punched in the face. look at those markets. thank you so much. i appreciate it. jonathan: you only one. yields are high by four basis points. i know exactly what tom keene would say, travel companion --

i'm not going to go there. do not worry. lisa: i just have a comment about the conversation about who does not have a shopping list, who does not have a barbell strategy. this is the new consensus that everyone who wants to get cash once to play it on the dip. jonathan: do you ever get the dip? that has kinda of been the story of the last 10 or 12 months. easier said than done. the people that have stuck with it, they did really well. the equity market almost a 10th of 1%. for our audience worldwide, this is bloomberg. ♪

ritika: johnson said this new tax --[indiscernible] israel was one big fund manager, and now it is one of the biggest pandemic hot pot/hotspots accord to john's hopkins with the highest per capita caseload of anywhere in the week that ended september 4. israel is focusing on booster shots to protect the vulnerable. the national election in germany is less than three weeks away and a new poll shows -- the alliance now trails the social democrats by six percentage points and she is endorsing arm/it.

merrick garland is promising to protect women in texas seeking an abortion, looking at ways to challenge the new state law. it is one of the most restrictive and the nation. the supreme court disinclined -- declined to block the law. this is one of the biggest transactions in the european telecom sector, announcing a plan that would increase the german companies involvement in -- 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. ♪

>> this is a very strong labor market, good recovery, and is no more room to go?

sure. that is some of the points that many of the more dovish members have been highlighting, and that is i think the broader takeaway is that the reopening is happening. jonathan: that was that takeaway after the report on friday. jeff rosenberg of blackrock. good morning. here is your equity market. i am jonathan ferro. tom keene will be back in couple of days. the s&p market is up 2%. at the bigger move is in the bond market. yields are higher by four basis point come and yields are higher on the curb, a little bit steeper and we have a ton of job openings in the united states. they say, north of 10 million. there is a believe that they will stay open and eventually get filled maybe later this year and into next year as well. that that supply will finally meet the demand. what happens if actually the job openings just are too close and

not because someone turned up? lisa: that is the point from peter cher, who is joining us shortly, but over the weekend in massachusetts there was a store that was closing early because they cannot find staff to staff the place and make enough money to turn a profit or stay afloat. it raises the issue of how much does it put a damper on economic growth, that we are not ending some of the frictions. jonathan: let's go to pete right now. is there a risk for that demand that we talked about through the year just been so robust, does that actually start to go away? peter: this month is critical. we have the reopening and school should be reopening and people should be having some of the checks, i am nervous that some of those jobs will disappear because the companies will close , or we will start seeing more

automation as your prior guest said to fill those jobs. this is a critical period, where if we do not see those jobs getting field come up -- filled, those jobs could go away. i am thinking about a football game or a soccer match where there are all those easy chances getting scored, and then you start getting that feeling that if we cannot take advantage of this now, this will not end well. lisa: there is this feeling that september has been deferred, the out that area it slowed things down and created some kind of fissure in the recovery that will be resolved perhaps october. is art -- are these weeks really that critical or just look to november and december when holiday spending perhaps to really gauge whether we see that kind of dynamic question mark peter: i think --? peter: i think we have to see it now because i think the october

narrative will change, so i think the next 4-6 weeks are critical regardless of where we are with the delta variant. a lot of my take on the economy starts dissipating, so especially if the gdp does not come through with a plan. kailey: september wasn't supposed to be such a big deal, and by the end of this month the biden administration would like to see the economic agenda passed the congress, and some tax hikes that could come with it. you think the market has properly priced that into the equation? peter: i don't. i think with all that has gone on the biden administration has taken a hiccup in the polls, you will see it much more difficult to get that deal done and it is unclear how easy it will be to get reconciliation, so i am concerned you start seeing the

time slip so that it will be further down the road that we get it and less money and less effectively spent. i think market is not prepared. you are hearing much more mowing -- noise even from secretary yellen about the corporate taxation, so we could be in for a policy hit which we have not had for quite some time. jonathan: what is the market call? peter: i think you want to be cautious. you start looking at the companies that will benefit if we get a slowdown, if we do more work from home, if some of these jobs will be go away, so you look at robotics, and some of the sectors that have remained down, energy, i love the mlp sector, and i think that will do reasonably well. i think bonds do ok, corporate credit. it will not be great, so i want to watch closely anyone who could be under scrutiny on the

corporate side. they could be in trouble. anything where the sec might start regulating. i think we all ignored the attacks on facebook but that could become more frequent. jonathan: it is not an overall reduction, to be clear, but the compositional shift? peter: definitely, and anything that is domestic focused, i continue to like that. i think the china supply demand problems will be an issue. not heavy manufacturing, but the logistics around that, those companies should do well as we see this shift. lisa: what does that mean for yields? peter coy -- peter: i think we continue to see the taper --

lisa: you set the people are convinced that the fed will not hike? peter: i think the conversation is turning to what happens if we get a downturn and we are at zero? i hope that never happens, but the fiscal stimulus will be driving by yields. if it looks like we get a decent package, yields could rise, but if that starts to field i think it will go lower again. my call is for higher bond yields and i remain optimistic, but i'm getting conservative on what is going to come out of d.c. and what it means for the economy and for the markets. jonathan: will we see one before we seek to again? peter: i would love to say no. right now i would have to say yes. jonathan: if the guest gives you

silence, do not fill it. 1% before 2%? thank you. lisa: he is not alone. we are hearing this increasingly . a lot of people are coming out in saying by the dip, and that to me is one of the more fascinating calls, to the point where the economy is decelerating to the point it is. jonathan: sort of questioning as to whether the fed get stuck then here for a while. kailey: there is a great piece about what that neutral rate actually is, and how has r-star changed come and if you believe it is higher, what is that going to mean for monetary policy and the ability for central banks to renew verb -- three maneuver as we come out of this period of monetary policy. jonathan: in your equity market, and on the s&p to positive

0.04%. crude is a little bit softer, down 1.9 percent. what is that, lisa? nice. from new york, this is bloomberg. ♪

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jonathan: live from new york, this is bloomberg surveillance. alongside lisa abramowicz and kailey leinz i'm jonathan ferro. tom keene back in a couple of days. s&p basically unchanged. into the bond market with yields higher and the curve steeper. 1.3664. a little bit of feedback from the audience. "interesting how fero disappears and tom is at work and tom disappears and fero is at work. could it be they are one in the same person?" maybe i just play split personality and run into the other room. we should say or what kailey said -- we should share what

kailey said. kailey: i have no idea what you're talking about. jonathan: a different kind of fit. lisa: you're trying to throw us under the bus. jonathan: crew down to $68. moving on. i'm not getting you in trouble. megan greene joins us. it is been a while but the story has not changed. the only thing i can think of that has changed is we are all waiting for september and that seems to be we are waiting for 2020 to. what is your take? megan: the big question remains whether there is going to be inflation. that question has not been remotely answered. there are data points on both sides of the story. we were hoping a couple of months ago that in september kids would go back to school, we would be traveling again, that is clearly not happening.

unfortunately we will have to wait longer and ride out this delta variant wave to see what the fundamentals look like. jonathan: we spent the last couple of weeks having this discussion with economist who've all said perhaps the consensus is this is a to cover a delayed and not derailed. peter tchir raised an important question as to whether the demand right now and the job opening stay that way into next year. the longer they are left unfilled, perhaps they do start to drift away and disappear altogether. you are an economist. what would your take be on that dynamic? megan: i think it depends entirely on the virus, as all things have for the past year and a half. i did not see us going back to shutting down the economy the same way we should have -- the same way we had before. demand should not wane. i think the bigger concern is the supply constraint on workers.

many workers did not want to go out because they were concerned about the delta variant. that fed through to wage increases. they become a concern if they turn into a wage price spiral. i do not think that is happening . average hourly earnings were up significantly but average weekly earnings were down because hours were cut. you need earnings and hours to increase for it maybe start to increase into a wage price spiral. companies do not have the same pricing power they use to. workers do not have the same negotiating power for wages. i do not see that. lisa: how do you view the recent disappointments we have seen in economic data? is this the result of the delta variant and we will see renewed growth later in the year, or is this something different? megan: from the start of this pandemic i have suggested the recovery might look like a nike

swoosh with a zigzag on the end. i think we are seeing a bit of that zigzag. a big piece is the delta variant, but i also thought we would get the bounce back and then a hard slog. that might be creeping in. we have had the brunt of the bounce back. we might be getting more as we end up on the others of the very wave. new variants might come out as well. i think it is little bit of both. lisa: then there's the other question about the supply side. one of the biggest ford operators came out and said there's too much consumption. people are buying too much stuff. do you think that will be the solution? people will have to buy less stuff, which is what the economy does not necessarily want to see because they want this momentum? megan: i do not think that is the concern.

when demand is there companies tend to invest in ramp-up the supply chain. that is more likely than that consumers have to consume less. we might see in increase in prices. i think that is a question of sorting out supply chain constraints. that is the piece that will shift, not the construction side. kailey: if you look at the bond market, it might be indicating the market thinks the fed will let inflation run hot for too long. is there risk the fed pushes out action too far? megan: it could. i not worried about it. the fed has undershot its target for so long it will have to overshoot. there are a number of structural drivers that have produced disinflationary forces on the economy, things like market concentration, lower worker power, digitization, they have

all been turbocharged. they are keeping pressure off of wages and prices. i'm not worried inflation will run away in the fed will have to catch up like you did the 1970's. i do not think we are facing the same environment. i do not think bond yields will stay up for that long. we are stuck in a lower for longer world. the one thing that could change that is if we get stimulus and it is used for productive public investment. that will fundamentally increase the long -- the long run neutral rates and mean we have much more room in terms of monetary policy maneuvers in the next downturn that would boost productivity growth. that would be nothing but positive. kailey: where is the neutral rate? megan: it is like describing the smell of coffee, nobody knows. it has been low for decades now even through disagreements on how to measure it. i would say it is slightly above

zero and it may have increased because of the digitalization in automation during the pandemic. i think the brunt of an acceleration of productivity growth and therefore increase in our star will have to happen on the back of massive infrastructure spending, investing in capital. we think those might be coming but none of it has been fully legislated. this will not be an immediate effect. i think will be a slow burner so it might take a while for that to seep through into productivity growth and a higher neutral rate. jonathan: let's wrap up the coverage going into the ecb. is that a live meeting? megan: it is a live meeting in so far as the ecb may announce they will slow down the previously accelerated purchase of assets under the pepp program. it is not a live meeting in terms of fundamental shift in the ecb thinking.

inflation is high for the euro zone. i would imagine the ecb is celebrating that. they have done a worse job of hitting their inflation targets than the fed has. i do not think that will represent a shift in ecb thinking or a concern they need to go ahead and pull away monetary accommodation quickly. it is just a reflection of higher inflation. it is appropriate, they had earlier agreed to buy more assets every month than they had expected and you're just ramping that down a little bit. i do not think it suggest they will continue to ramp down the purchases and i do not think they will suggest the pep program do to end in march will end, i think they will keep that off the table. lisa: you think this is basically a bluff, the ecb members who say it is time to start talking about tapering? megan: i think this is a tweak we might see if they go ahead and do this and do not think it

fundamentally means the ecb is thinking about inflation or economic growth any differently than they have been. jonathan: megan greene, always good to catch up. megan greene of the harvard tourney school. i do not know if it is a bluff, but the hawks might not be able to get what they want from this meeting. lisa: there seems to be a desire to get the conversation going and to not have the conversation shows that those hawks do not have any power whatsoever. this goes to credibility in unity in the ecb and how much that contrasts what we are seeing in the federal reserve. jonathan: there are doves and their super doves, there are no hawks. my rent from a few months ago. lisa: how's it going? jonathan: whistling in the wind. i will do more of that at the top of the hour. tony dwyer will be joining us alongside erin browne and larry adam of raymond james.

looking to that conversation with tony dwyer, a market historian. the huge gains we had. we got that from dave wilson earlier. what happens after a 20% move. you get a repeat of 1987? 1929? it is too dramatic. do you get a pullback. kailey: looking back at history has been a mixed picture when you have a 20% run. we have seen 54 record highs on the s&p. that is a record of records. we have 211 trading days without a 5% pullback. how long can that realistically last? jonathan: no idea, but price shapes narrative. it is easy to go on the show and say buy the dip. when you get the 5% move for the 10% move, it is easily confused

with something worse and it is quite difficult to actually buy. it takes confidence to sit here and say i think it will continue , because if we get that move lower, it will come at a time when we see decelerating growth in the united states. it is easy to build a bearish narrative off the back of a price move lower given the environment we are about to go into year end. lisa: which is the reason i dubai the argument, how fragile -- reason i buy the argument, how fragile is this market? how much are people trying to hedge against this? that shows a vulnerability that might be more telling. jonathan: it took you two hours and 41 minutes does sound relatively bearish. lisa: you want me aplenty, don't worry. jonathan: i will keep trying. that is your promo for tomorrow. do not miss it. lisa: dear lord.

ritika: with the first word news, i'm ritika gupta. president biden needs democrats to give them a boost by passing his for trillion dollar economic agenda, but divisions in the party threaten the chances of that happening. democratic progressives and moderates are at odds over the size of the tax and spending package. there is a battle with republicans over raising the debt limit. one of the most contentious issues in brexit, u.k. has extended post brexit grace period for northern ireland. state street has agreed to buy brown brothers investment services. the firm is adding operation. state street says it is promising a pretax margin of 31%. the world's largest brokerage

slamming the idea of working from home. the ceo says the firm needs its clients to work more from the office. brokers have been told to come back to the office full-time in blazers where it is safe to do so. bitcoin faces the biggest test in its 12 year history. the question is whether it is he to get number of people want to do business with bitcoin when it circulates alongside the u.s. dollar. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am ritika gupta. this is bloomberg. ♪

>> there is a big disconnect between the economics, which are coming in weaker because of

supply chain issues and covid issues, and corporate profits, which are coming in much stronger than anticipated. lisa: bulls are getting more bullish even as we get to weakening data. jonathan golub there of credit suisse. there is a question going forward about china, the world second-biggest economy. how much it is slowing down. how much the government is allowing the economy to slow down after paring back stimulus, trying to tighten the market including property markets, now questioning whether they will reverse that. joining us to speak about this is someone with intimate knowledge of china and the difficulty as well as the potential successes of organizing there, andy brown joining us. i want to start with the import/export data overnight. the idea we got a record number of exports from china at a time when people were expecting a slow down. do you view this as more

strength in the economy than people were given credit to? andy: we have had shops coming out of the chinese up -- shocks coming out of the chinese economy to the extent they are pushing forward with this covid zero public health policy to the extent you at one infection reported and a slow down weeks ago. you at the same thing happening. china is responsible for a good deal of disruption in the supply chain which is showing up in the u.s. and the supply of goods and inflation. lisa: there was the expectation some of those shutdowns you are talking about would put a damper on some of this export data and it did not. does that signify that people are overstating how much disruption there covid policies are? andrew: it may be, but if you

talk to exporters come if you talk to shippers, if you talk to people in the supply chain industry, they are saying unprecedented costs of shipping containers. it is possible all of the boxes are in the wrong places. this will show up in increasing disruption to the supply of the type of goods coming out of china. i see it in new hampshire with shelves empty and the big department stores. kailey: obviously you have the growth equation in china and also the regulatory crackdown on many sectors. lisa alluded to the property sector you also have education, ride-hailing services. it seems never ending. there's a question of when that will start winding down. is there a risk the chinese regulatory crackdown exacerbates the already existing growth slow down? andrew: there are big unanswered

questions about where this regulatory crackdown is going. if they are serious about reducing inequality in the chinese economy. xi jinping -- this is at the heart of his crackdown on big tech -- he calls it a drag on common prosperity -- growth in china will take a hit. particularly if he goes after the property sector, which is the biggest driver of inequality in china. kailey: is the shift towards the pursuit of common prosperity a revolution or just a shift in rhetoric? andrew: it is interesting that within the global investment community you have quite divergent views on what is happening. the most benign interpretation it xi jinping is taking on the big tech monopolies to address problems that exist in many

countries around abusive consumer data, gig workers not paying their fair share of taxes. the other view is what we are seeing is an all-out assault on the private sector in china and at a high level it represents a clash between free-market democracy of the west and authoritarian state capital of the east and this battle is reaching a crescendo. under those circumstances it is irresponsible to be investing from u.s. consumers in the chinese markets. lisa: let's go there. george soros did write pouring millions of dollars in china is a tragic mistake and will damage the national security interests of the u.s. and other democracies. do you think george soros, putting aside the fact that he is a polarizing character, do you think he represents the mainstream view that it is becoming a political liability

to invest, to pile money into china right now? lisa: george -- andrew: george soros is not the only one sounding a warning. another has said he is taking a pause. fund managers in the u.s. are getting out of the china tech sector altogether. this represents a real confusion over where the crackdown is going. lisa: andrew browne, thank you so much. kailey, you keep discussing property issues. that is an understated risk considering how much that sector has been inflated and how the chinese government has been willing to allow deflation, even as people start to worry this might have broader consequences than they are expecting. kailey: cover grant is a case in

point. we were speaking with damian sassower earlier. continuing to deteriorate and just got downgraded. there is concern of a spillover effect in china credit. the question is can you buy the dip in china. we have talking about how by the dip seems to work in the u.s.. the valuations are much more attractive when it comes to chinese technology companies. can you buy them when the regulatory question is still hanging in the air? lisa: there is also the flipside in the u.s.. we are not talking about washington, d.c. and what could get passed on the fiscal front and how much does that have international ramifications on goods being purchased? taking a look at the markets ahead of the open. nothing going on. these days it does not feel like it is post labor day. it feels like we are still at the end of august.

s&p futures basically flat. the 10 year yield the most interesting as we get that delusion of bond sales -- that deluge of bond sales later. from new york, this is bloomberg. andrew: i have an exclusive u.s. open update for bloomberg tv and radio from tennis channel. british teenager reached her first quarterfinal at the majors on labor day in new york city. the 18-year-old became the third qualifier in the open era to reach the elite eight at the open with a seven day win over shelby rogers. dropping just three games in the victory which took just over an hour. the brick moving on, the olympic

gold medalist for a spot in the semifinals. o'connor is not the only teen in the elite eight. she joins canada's layla fernandez who turned 19 on monday. you can watch all of the action from flushing meadows every night on tennis channel. ♪

jonathan: yields are higher, the curve is steeper, the equity market not doing much at all. 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. september gets in early downgraded. >> payback came early. >> q3 was weaker. >> september is a critical month. >> post labor day was the game plan. >> the payrolls report. >> new school year is a wildcard. >> a lot of companies are starting to push back the back to office. >> major corporations have pushed off the full return to office. >> you have given the fed some ammunition to not taper. >> there was clearly slow down.