>> in the medium-term, i would expect the u.s. growth out form. >> we have peaked in the u.s. when it comes to inflation. >> it is all about the fundamentals. expectation still rising. >> we are in the early stages from -- to early -- jonathan: can we bet back on track? good morning, good morning. this is bloomberg surveillance, live on television and radio. a four-day losing streak on the s&p, advancing .4%. the president looking to correct course. tom: he really reached a tone last night that was excellently remarkable to see those

mandates. we will have coverage through the day. in the markets, i love what dominic wilson said where there is great uncertainty and everybody has narrowed down the narrative, hyper-analyzing my great observation, look at the bond issuance. it is stunning. jonathan: on the corporate side, look at the price, look at the yield. 10 year has done nothing. right now in the treasury market. tom: we can do this off of the bloomberg. 1.4%, which is nothing. it is the oddest end of september. jonathan: we just cannot get up on the supply side of things. lisa: this raises the question of what the invocation is for investors. are they investing growth will remain slow and yields will never rise or are they clipping coupons in the meantime because they are so much cash they don't

what to do with it. it seems like it is perhaps the former. jonathan: we have to talk about a return to office. the likes of a thinking -- rethinking october microsoft delaying things indefinitely. september is not turning out what september was meant to be. tom: these are also seven different -- all sorts of different employees speaking. there is a theory and process and they are saying no. jonathan: flat out no. equity futures up put percent on the s&p. trying to get the show back on track. you missed it. tom: within the lines of your cramps, stay in. jonathan: the euro dollar ok. we had a dollar in change in wti. lisa: when you say getting back

on track, i knew you were not talking about the s&p up again, you were talking about our last hour. 8:30 p.m. we get ppi data for the month of august. we have seen rising input to manufacturers and this has led some the highest price increases going back more than a decade. people have been experiencing this in stores because companies have been passing along a lot of this gate what this has led to is consumer expectations for the rise to the highest level since 2008. these are some of the most important numbers to watch. high inflation expectations usually beget higher inflation in the future. at 9:20 a.m., it is the 20 anniversary tomorrow of the 9/11 attacks. a lot of people in the industry know people and love people lost in that day. the nasdaq will observe a moment of silence to reflect upon this moment, a pivotal one, as the

narc city tries to climb out -- as new york city tries to climb out of the pandemic. we will get the crop index, the wheat production, soybean, coin production this is agricultural supply and demand report. on droughts, reduce the crop reports. the highest inflation for food prices in more than a decade. this highlights how individuals are feeling inflationary pushes despite the approach on it. jonathan: the new york stock exchange will observe a moment of silence. let's turn now to david bianco , walk me through why you're looking for muted returns in an

equity market. david: the 12 month target, september 2022 was 4600. the s&p has been very close to that already. a lot of people asking the s&p can reach 5000. we think it can with that is more about 18 months away rather than eight weeks. we remind you we have a lot of policy coming in the next few weeks out of the sea that are being impractical to the market but we have midterm elections. we are stepping into the spooky season with a lot of confidence it has been very brave, and rightly so. equity market is supported by a terrific earnings. tom: you are in a group in citigroup and jp morgan where you are saying this is all about technology and technology excellence.

to find the s&p 500 in the technology influence. david: it has two sectors everybody knows that are digital in nature. the technology sector is 20% of the s&p 500. the comedic asian sector, which is 12% of the s&p 500, you have -- the communications sector, which is 20% of the s&p 500. a lot of the profit contributors in the data centers and cell phone towers and the logistics business supporting the digital economy. electric vehicles, these are high-technology pieces of equipment. the s&p has become digitally dominated and that is the reason why it we stay modestly overweight, the tech sector and we stay constructive on the s&p. the other parts of the s&p we

are concerned about would be industrials and they are less relevant. lisa: this sounds like a great story in terms of and it has been priced in but the question is how far it can run given how valuations and how much it hinges on the bond market. yesterday, an executive at bank of america said it is a zero-coupon bond. you agree that bonds will set it in for the tech behemoths that have power and cash flows? david: it would take a giant jump in real interest rates to affect the long-duration valuations of technology are these are real assets, not nominal. they have every bit of inflation pricing power, if not more, particularly real pricing power when you see they have a huge economy at scale page we need a jump in real interest rates. we don't think tapering is going to do that. we are keeping an eye on fiscal

policy which do pose higher rate risk, perhaps higher real rates from excessive deficits. while we are mindful of the risk of higher rates and we try to balance that being overweight on financials with the bullishness on tech, the earnings continue and have repeatedly surprise the upside. the expandability of these business and the incremental profitability and margins, the s&p has a 13% net margin. the technology sector has a 25% net margin. these businesses are tremendously profitable. the only thing we are monitoring is a risk to profitability to these businesses is regulation. regulation and taxation and the west and commanding controls in the east. jonathan: let's talk about the bond market. can you make a call? david: we try not to area -- we

try not to. jonathan: how do you get away with not making a call? david: do i think we have seen the hyatt for 10 year yields the cycle? we don't leave so. we believe yields will climb higher as part of normalization and recovery. but the new norms, and that is where we dare to be of the confident, we do think a norm on a 10 year yield is about 2% with real yields not being any higher than 0%. this is why it i am not fearful for the valuations of technology but it is unlikely for real yields to be positive in any of the coming years and the earnings power is so powerful. jonathan: fantastic stuff. great to hear from you. david bianco , from esw, unlikely to see a positive real yield in america. tom: you flip the reciprocal of

the yield and you get to multiples of 20 to 25. we are still adjusting to where you are going to convince me and 18 multiple is cheap, cheap, cheap my brain is not there. jonathan: i wouldn't try to convince you of that. top of the leak after three games. tom: they beat chelsea last year. and done by richmond. i was thunderstruck that richmond took them out. they can make it back. lisa: is this getting the show back on the rails? jonathan: this is the so-called bread and butter of this program. the second debut for manchester united. that game will not be televised in the u.k..

you can't show the games in the u.k.. the three clock p.m. kickoff cannot be shown in the u.k. because they want to protect grassroots football. they don't want a lot of people watching the games at 3:00 p.m. it has been a row for a long time. tom: does it work customer -- does it work? jonathan: i get to watch them here but my friends at home have to wait for the highlights. lisa: that is why you live here. jonathan: i was more interested in the contract with the premier league and games then we are. and that i thought i will convert, and i have, which is remarkable. tom: and considering where i am now. i can't believe what richmond did at the end of the game. jonathan: i like how you conflate the real-life. your drama. futures up .4%.

this is bloomberg. ♪ ritika: the biden administration growing more frustrated over government talks with china. he urged xi jinping to cooperate even though they battle on other topics. they were on the phone for 19 minutes, the first conversation since february. president biden urging vaccines and mandating federal contractors employees and health care workers to be vaccinated. he said the administration will mandate shots for private employers. growth of domestic product up .1%, a 10th of the paste posted in june. that suggest the growth from the pandemic is leveling off. in japan, he will be replacing

the outgoing president and he wants to create a country where no one is left behind. he is leading the liberal democratic party. his leader is virtually assured to take over. global news 24 hours a day, online and at quicktake on bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. ♪ es. this is bloomberg. ♪

pres. biden: america is in better shape than it was seven months ago when i took office.

i need to tell you a second fact, we are in a tough stretch and it could last for a while. the highly contagious delta variant that i began to warn america about in july it spread in the late summer like it did in other countries before us. jonathan: the president of the united states. tom keene, forgive me, i am about to use the most overused line, a change in tone. can we call that a shift in tone? tom: a shift in tone is based on the great divide of vaccinated in the unvaccinated. jonathan: it is a change of substance. equity market up 20 on the s&p. tom: is the market up because of biden's speech? jonathan: how are we changing course is what we have to consider. what did the airlines do, the airlines rallied. we talked about this a lot on

this program and we do it on radio. it is not just the headlines but how the market responds to it here the airlines looked tidy on the back of that. tom: joining us is mario parker, head of our coverage in washington. i look at where we are and the math is simple. a gallup poll has 18% over their dead body are they going to get vaccinated. you get out to 24% are basically against biden. 24% are unvaccinated. is the nation behind the president? mario: you are right. you mentioned the president's tone shifting her he was using a caret to incentivize americans to get vaccinated and that has turned into a stick. he had harsh curtis is him for that as you mentioned that she

had harsh criticism for that for the order of the country who has refused to get vaccinated. tom: i look at the vaccination case and they are going to push back what is the feeling in washington about how states will respond? will this be a judicial process? mario: the reality is the president and federal government is doing what they feel they can at this point. i don't think -- i think they are clear eyed in some of the rhetoric from deeply red states that those states will be prepared to go to court over this. lisa: is there a shift in tone, not just for the unvaccinated being called a threat to american recovery but also with the biden xi jinping phone call saying you are not making progress and let's go? mario: absolutely. you have heard this conciliatory

tone from the president where he said, while they may not agree on everything, there is some commonality there, climate change, etc., but in recent weeks, we have seen that china has conflated both the climate goals with separate things on the wish list they want as well. you have seen that rhetoric as well. lisa: getting into the white house and the mentality as we head into fall with the pandemic ongoing, the u.s. lagging behind other countries in terms of vaccination rates for the first time as the surge had, there's the question, is he generally frustrated and feeling his agenda is getting stymied at every turn? mario: i think that would be a fair assessment that the president, you say that in the last couple speeches where we had been used to this optimistic tone, hopeful tone and now it is

this more stern tone, both on foreign policy, domestically, with covid as well. some of that bears out in the poll numbers. they took a hit and his numbers took a hit with the fallout from the afghanistan withdrawal, the delta variant. he had been getting high marks for his handling of covid delta variant resurged, that hit his full numbers. tom: what does the candidate want to do, in terms of all the polls, whether it is afghanistan or vaccination, in the tough battles, the 2030 congressional districts which are very tight here? how did they respond to the vaccination were speech -- the back? mario: that is going to be tough, great analysis. some of the moderate democrat

who officially flipped from the trump district in the last congressional races, these are some of their constituents. a lot of them are concentrated in the red states, but there is some overlap. it will be a delicate dance for some of the democrats in the midterms. lisa: i keep thinking about how much the sides are polarized with the debt ceiling debate and i think that is one of the key policy risks people are talking about heading into the fall. where are we on that in terms of whether the sides are the way they have been in the past that they don't want to see a default ? mario: there is a stalemate right now. the white house has tried to shame republicans into cooperating by pointing out that they raised the debt ceiling under president trump several times. and so the white house, the line they have given us over the last few weeks, is that they expect

congress will work in a bipartisan way to handle this responsibility the way they framed it. jonathan: can we talk about your promotion? mario: thanks a lot. jonathan: you are going to be leading the coverage. will we get more of you are less? mario: i hope it is more, given everything from the midterms right around the corner. tom: this is when he starts telling us what to do. jonathan: i think it is. congratulations. tom: all we care about, can you get us tickets to the capitals? mario: gotcha. thanks a lot. jonathan: he will send us a stern email about our coverage of politics. aerial parker, bloomberg editorial, joining us in d.c. -- mario parker, bloomberg editorial, joining us in d.c. the president had a change of

tone and some of the say it is 180. tom: we have had cases, hospitals asians, deaths and the rest of it, not -- hospitalizations, deaths, and the rest of it. if this was a year ago, we would be looking at the statistics and there would be national outrage appeared we have become numbed by this. jonathan: lisa, have we become desensitized? lisa: yes, because there is a split in the nation between people understanding nation as freedom from wearing tasks versus people with freedom from getting infected with the virus. there is a fissure and he took a stand. jonathan: it is not equally divided. let's be clear about that. 70% in terms of shots in arms, right?

lisa: yes, but that said the unvaccinated population is the one contributing to the biggest surge in the cases. it is an ethical and policy divide. jonathan: we will keep this conversation going. this is bloomberg. ♪

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city, this is the futures up 0.4% on the s&p. looking at to erase the four-day losing streak. nasdaq futures are up 0.4%. that's the story more broadly for the equity market. tons of supplies for the bond market. yields are higher today, doing nothing over the last week. where are we now? 131. the yields are higher. we've had a ton of treasury supplies. lisa, it is 60 billion of ig

debt through wednesday. what is it now? lisa: it's more than $75 billion. jonathan: 75 billion. that's just unreal. the market has been sucking it on the credit side and on the sovereign side as well. it's the countdown to december. we are going to punt that one. kick it down the road into december. is that nfl talk? i will talk to guy about that one. september 15 is the federal reserve. this is one of forecasts. i've got noid dia. they urine forecast meeting is 118. where are we? 118. tom: it's simple. we have to look at the data. we are massively data dependent.

maybe we are pricing things too narrowly? the outcomes could be really wide. that's a conversation for literal -- later. let's get you some individual stock movers. we can do that is always with romaine bostick. romaine: you are looking at novavax, it is down significantly, 4%. they are saying it will delay once again the covid-19 applications with u.k. and u.s. regulators. it delayed the timeline. it said it was going to get this done in the third quarter. that is going to pushed back by a few months. those shares are down 4%. madura is going to the upside. it was up 9% last week. it is on pace for a 10% gain this week. there is a lot of optimism about how it goes into the latest booster shots and interesting

data about the covid-19 vaccine technology behind what modernity used and its applications for other products. we are awaiting the earnings this morning. it's up 48% on a yearly basis, when the best performers in the s&p furred -- s&p. it's going to be interesting those results this morning. shares are up by 2%. last night, we got the earnings for a firm. they knocked it out of the park. the shares are up 21%. they are guiding on growth merchandise. that would be massive growth should they hit those targets above with the street was looking at. holdings are in the affirmed

platform. those shares are up 15%. other stocks are here like square and mastercard. tom: we will see how they end the training. right now, an important conversation. also, he writes a brilliant notes observing the underlying theories of where we are. i love what you say about the bathtub and the drain, which is stock versus flow. stock is the mass out there. flows we are familiar with, explain stock versus flow in this crazy september. >> i think this applies mostly to the labor market, where on the flow perspective we have not done that great. we are adding 2000 jobs in the last month.

the stock picture is most important. there are two things happening. the labor market is disconnected from the rest of the growth story and the development in the broader economy. gdp has recovered to precrisis levels. there are significant deficits in the labor market. the flow effect is key for the fed over the next 12 months. that will determine if we make substantial progress. think about labor markets in those terms. it distracts from some of the focus on the month-to-month data. tom: do we underestimate the technology overlay? we are so focused on the pandemic and the politics in washington that there is a technological revolution that is

continuing it is not priced in? ed: we struggle to price in these technological changes, think about the last 30 years. technology has reshaped the structure of the economy. we've become capital light. when it comes to macro thinking around the federal reserve, we have failed to check this out. that is one reason why we miss the inflation party. has that process been accelerated? probably. it's going to be very interesting in terms of the longer-term fingerprints. jonathan: how useful is the incoming data? ed: i'm going to characterize it

as not super useful. for two reasons. our forecast errors have been massive. despite a lot of high-frequency data, despite a general picture where everyone agrees growth is relatively high and there is improvement across the board, our forecast errors a bit off the chart. we are not getting a picture from markets. one additional data point should change that. that's been the pattern. from the fed perspective, they've guided us to a place of strategic ambiguity. the threshold for employment and inflation is key to getting this paper started. a single data point is not going to solve it. some of them might arrive at

that point in september. some may get in november or december. it's a distinction without much of a difference. lisa: he thinks we are seeing peak inflation pressures from the ppi standpoint, from the supply chain disruption. do you agree with that? ed: let me put it this way. it's hard to say. inflation this year is a poor guide to what it will look like next year. it's clear that a lot of transitory effects are in fact peeking. some of the reopening effects, autos and so on. it's true they will start to fall out of the system. at the same time, the underlying inflation process does appear to be changing. it's entirely possible that

inflation peaks now. it's actually higher next year that it is in the second half of this year. that would be my best guess in terms of what inflation looks like. we still don't see that significant disinflation or weak inflation in services. we are still waiting for that to come through. lisa: i was talking about seth carpenter who came on yesterday. the one thing he said was maybe we are seeing peak pressures on the ppi standpoint, not with wages, i wonder how important that will be going forward. jonathan: these have been massive. how can you build a narrative that is so. we appreciate it. it's a difficult moment to be in two forecast. that's for sure.

tom: they can ramp down the gdp numbers. ppi today, what is the so what on it ppi given the craziness of this economy? jonathan: this week, absolutely surging. that's got to be the big change. for a long time, we talked about the world's largest economy. now, that story has changed. tom: what i have learned, at your peril do you take your eye off the business process of shipping in china. it's really important. lisa has been focused on that. lisa: she thinks we've seen peak margins in companies. this is one of the key aspect of her call in terms of the s&p forecast. they are not going to be able to pass all along to consumers.

this goes back to the wage question. they are not keeping up with inflation. jonathan: it's good to see lisa fired up. i enjoyed that. tom almost like a fistfight she had with you. jonathan: there was no time for me to speak. tom: you are a ratings magnet. jonathan: equity futures up 18 on the s&p. yields are higher by a couple of basis points. just for you, tom. nick city on it radio and tv. this is bloomberg surveillance. ♪ >> president biden urged china

to cooperate. they spoke for 90 minutes last night. it was their first discussion since fabry. the president initiated the call after becoming frustrated by cabinet meetings with beijing. the u.k. as foiled 31 terrorist plots in the last four years. that's according to the domestic agency. the terrorist threats to the u.k. is a real and enduring thing. the taliban takeover in afghanistan has emboldened terrace. house committee approved sweeping legislation that includes limits on mining and offshore oil going. the measure will be folded into a multi-trillion dollar spending bill taking place in the house. they have decided not to go ahead with the offer to take soho china. they wanted to sell itself. that is because of a lack of new

affects in its pipeline. harvard university will stop investing in fossil fuels. they will use the endowment to support the green economy. harvard students are protested for years, calling this. this is bloomberg. ♪

>> business is booming. i think our last quarter we up

1% year-over-year. our people are up 10%. somebody is working very hard. i think they deserve to be paid more. jonathan: ceo from new york city, good morning. i'm jonathan ferro. equity markets are up as follows. a little bit firm this friday morning, the bond market is up to basis points. we will be talking about that on bloomberg real yield at 1:00 eastern time. i do that with the wonderful erector. tom: very good. nice shout out. it's amazing. you know their last names, that's really something. we know the name wilson. david wilson is joining us with a chart. what do you have today? david: how the s&p 500 on since

the 9/11 attacks of 20 years ago and compare that to what it did in the previous 20 years. when you do that, you find out we've done fairly well over the past 20 years with the s&p 500 delivering an annualized gain of 7.3%. it's nothing like what we saw in the previous 20 years. you are talking 1981-2001. you saw a gain of 11%. to understand why, maybe have to look at the way the index is changed in terms of the biggest companies. go back 20 years. look at the top five most heavily weighted stocks. general electric, which has struggled over the past two decades, microsoft, the only of

the top five then which is a top five now. it has had its issues over the years. exxon mobil, it has faded along with fossil fuels. pfizer hasn't kept up in terms of valuation with a lot of it's peers alone the water market. citigroup took a hit in the financial crisis. perhaps that is as much as anything that explains the gap in performance. it is a pretty yawning gap. tom: what is the impact of the great stimulus we've seen, all the quantitative easing. there's almost eight hockey stick to the s&p chart. david: there is for sure. you want to see a hockey stick and then you look at the second half of the 90's, the.com era.

you really see that. it went on for five years. we are barely getting started in relative terms. there is the issue of wants the government stimulus fades, what happens to stocks. that is front and center in a lot of minds. lisa: we are looking at 20 years ago, a pivotal moment. it was a turning point. we are at another inflection point in the wake of the pandemic. it is leading to some big shifts. i noticed the lowest income workers are seen the biggest pay gains since going back to late 1990's versus the highest paid employees. how are companies responding? are they expecting investors to shrink? david: you do have the concern

about profit margins. you saw prof -- profit margins increase, that is saying something considering how they have waiver costs. companies are in a better position than they were before the pandemic. they can handle the cost increases. how long do they persist? is the fed right? is the inflation transitory? is it more long-lasting and become a bigger issue down the line? lisa: these companies, they will remain the dominant ones in the index? david: you can see from the history how much of a potential there is for a change over time in terms of market leadership or to put it more bluntly market dominance here. tom: thank you so much. we greatly appreciated this morning.

futures are up 19. dow futures up 164. one of the things we haven't mentioned is the midpoint over the weeks activity. jonathan: and the doubt. we haven't mentioned that. we just did. the s&p up 19. you want to talk about volatility? the vix? tom: it's a general thing. i have to admit to look at the dynamics of the futures of the vix, that is better for pros. jonathan: does it mask what is going on it? the fact that we have so many guests come on the program and talk about people clamoring for downside protection? tom: the hedging is off the chart. i looked at that by chance. i had a beverage of my choice in my hand when i did that. the hedging right now is great. that is by the book. that is very bullish for the

market to see so many people. jonathan: are we more cautious in this market? lisa: people are pricing in a narrow range when the outcomes could be much wider. that is difficult with averages. they are not showing the bifurcation because you have enough of them on either side. they even each other out. i wonder if we are going to get a breakout. what is the trigger? jonathan: can we call this on for castable? look at what we just live through on friday. there were a range of 402 one million. that's a 600,000 range and we were south of it. what does that tell you about the people that come on the show? it's really different. lisa: i asked her about forward guidance. we got almost none. his ability was nil. now we are getting more visibility.

it is incredibly noisy still. some of these wage issues, i think that is going to be one of the determining factors. even that is hard to predict given the fact that the averages are not really showing the bifurcation. jonathan: this is the tone of things going into the opening bell. equity futures up 20. following a four date losing streak on the s&p. tom has been tallying that. tom: less than 2% drawdown. it's a teensy wing see correction. -- teensy weenys correction. the lady isn't tapering. that's an elton john lyric. jonathan: the lady isn't

tapering? tom: it's an elton john lyric. it was after madman across the water. jonathan: you are making stuff up again. tom: he did that in the trident studio in london. jonathan: live from new york, this is bloomberg. ♪

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be competition. the cannabis sector seems to be holding up strong. >> i would expect u.s. assets to outperform. >> we've peaked in the u.s. when it comes to inflation now. >> it's all about the fundamentals. expectations are still rising. >> we are in the early stages of a handoff. >> this is bloomberg surveillance tom keene, jonathan ferro, and lisa abramowicz. tom: good morning good morning. from our studios in new york and on radio