data to live up to that. >> most of our policies are exhausted. >> the market is not ready for the market going up. >> we have had a massive amount of inflation. >> the messaging of what they see going forward, of what to bring means will be very important. right now, the market does not care. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: good morning. this is "bloomberg surveillance." alongside tom keene and biz abramowitz, i'm jonathan ferro. we are unchanged on the s&p 500. tom: look at the peco screen, that is where i look at economic data. this screen does not look like the last decade, even the last two decades. five point 3% year-over-year

cpi, that is new for america. jonathan: transitory looking different than transitory -- looking less transitory. we are seeing inflation outstrip price. music companies are adapting, but they have some problems going into year-end. tom: i think a select group of companies will. what will be interesting, and what our listeners want to do, is parse out the people that can adapt to this higher inflation. they could be the winners, their margins stay good. jonathan: is supply issues persist. lisa: this is the argument from bank of america saying inflation pressures will get real. a lot of companies have been able to pass along costs to consumers but wagers -- wages are not keeping pace. that means sales will fall. jonathan: is out the -- you saw the downgrade of nike down to neutral on rising supply concerns.

this is a real thing right now. demand is fine, that is not the problem. we have been used to a world where demand. is the problem -- demand is the problem. tom: what is the event diagram of supply worries over inflation worries? jonathan: we can talk about job openings later and the cost it will take to solve those labor market issues. we will do that with jens nordvig. let's get to the price action on the s&p 500. totally unchanged on the s&p 500. in the bond market, yield is higher. we could do the nicki minaj tweet, we could do the alexandria ocasio-cortez address . tom: the nicki minaj tweet is not appropriate for tv and

radio, but ian bremmer responded to it. [laughter] jonathan: i will move on quickly. lisa, you are one dollar unchanged. lisa: i like that you get the bond market versus nicki minaj and the alexandria ocasio-cortez address at the met gala. tom: she looked stunning. lisa: 8:30 is the important number, the august cpi figure. the expectation is a 4/10 of a percentage increase. still they rise. what i am watching is how this compares to the increase we see in wages. this concerns me and it should concern the fed. even as you get consumer prices as they go to the drugstore and grocery store and pay rent, everything is going up and yet wages are not keeping pace. less than 4%. this is something i'm sure they are watching for. 1:00 p.m., apple, going to

unveiled the apple 13 and the apple watch series seven. really front and center is the role of the service company following the ruling with respect to have a market and how they display other podcasts, other gaming aspects, how much revenue can derive from these services. it is what people are focused on. tonight around 10:00 p.m. in new york, in china in the morning, we get the august retail sales and property and implement data. a time in china of growing concern. what i am focused on is the deceleration of the property markets in china, especially do to eminent insolvency. tom: we have had a couple of days of 86 44 been in the --

jonathan: it has been really stable. that has been the remarkable story coming out of china. tom: we are just vamping on renminbi. in the control room there watching the -- in the control room watching the met gala.

tom: the smartest conversation is going to be how badly do the democrats want to lose the house , the senate, the presidency. for some of these taxes buttress of against people. jonathan: emily will be joining us in a little bit. tom: was she at the gala. jonathan: we will find out. jens nordvig is with us. what are you looking for? jens: the key thing is if the price purchase or broadening. we have seen these categories with prices going through the

roof, that will eventually stop. the key thing to watch for is if the broader sorts of -- go up. you can look at all of the categories together and there we see some movement. if that continues, that is important for the fed that this is not a transitory thing. lisa: when do we start to get a sense of whether this is transitory or not? can we get some sense of when cpi becomes a problem for the fed next week? jens: i think the fed has already started to change their signaling. they have talked about inflation expectations going high. we have the new york fed survey of inflation expectations out yesterday, going higher. 4% on the three-year measure. 4% is not necessarily transitory. in relation to markets, the way

the market is responding to inflation surprises is bound to change. we had a period where the market was buying into the transitory narrative and they lived through the upside prices. that changed since june since the fed narrative changed. i think the market is going to pay attention. that is different than before june when the market was buying into the fed narrative, not so much anymore. lisa: how is this responded to in the market given the fact that at certain point higher costs are this day this inflationary -- are di sinflationary? jens: in the cpi data set, it is no longer just the autos and things like that moving up. in the wage data, you see that

the medium wages sneak higher. initially it was just restaurant workers and so forth. now it is starting to be broader. it is inconclusive, the fed is not going to say it is a done deal, but that is what is happening that is really important. jonathan: can we get the conviction fx call from you? jens: if you look around the world, you have a lot of places where concerns have played into the price action. that is about to come out. places in asia that could take due to delta, those -- they get access to a amount of vaccine, is probably the next thing in the fx market. jonathan: thank you, jens nordvig.

amazon has a plan and it has the number 18 in it. they plan to hire 225,000 employees in the u.s. and it starts with an average pay of over $18 per hour. tom: talking about college, this is a foundational headline. this is massively optimistic about the shift in technology. that is a ginormous number and that shift deliberate calculus for everyone across america. jonathan: do you think that gets it done? we have to go from $18 to $20? we have job openings pushing 11 million in america. he supplies are not coming through. does $18 get it done? tom: labor has been in doldrums. it has been widely understood for decades, maybe it is a new decade where labor sure begins to increase because of the microeconomics of labor.

jonathan: that captures the conversation at the moment. lisa: the lower income of the employment force has seen the biggest pace of increases in their salaries versus hiring individuals since the 1990's. we are seeing a bifurcation in how wages are increasing. jonathan: we can start these things happen. will the federal reserve be overwhelmed by the number that comes out at 8:30? cpi, we will get the monthly data and just a moment, a little later this morning. we covered so much. the s&p 500 progressing around 1%. inflation day in america, a beautiful morning in new york city. this is bloomberg. ♪ >> nicholas -- hurricane

nicholas came to shore and is bringing torrential rainfall that is threatening to flood houston and parts of houston are still -- and parts of louisiana the recovering from hurricane ida. it could not as much as 18 inches of rain. customer cracks say they will undo the $10,000 cap on the federal deduction for state and local taxes after a community did not address a break and tax totals. democrats say they cannot support this spending bill until the cap is listed. in the u.k., prime minister boris johnson looking from the booster vaccine against the -- booster vaccine will be rolled out to the most vulnerable people. the government said yesterday that 12 to 15-year-olds would be offered a single shot of the

vaccine. china's ever grant has, with a direct assessment of its financial health. the property developer faces tremendous liquidity strains and could be one of the country's biggest debt restructuring. just how much will investors lose depending on whether chinese authorities and banks take steps to limit the fallout? 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. this is bloomberg. ♪

>> it is about having a real

conversation about fairness and equity in our system, as we debate the budget reconciliation bill. we are talking about providing working families with childcare and health care, fighting the climate crisis. jonathan: congresswoman alexandria ocasio-cortez yesterday at the man gala, of all places. tom keene, do you want to comment on this one. the irony? tom: the mayor was there as well and carol maroney. she wore a fire department coat a few years ago and came out last night with a statement on e.r.a.. to me it was an important celebration given the pandemic. it was trying to get out, trying to get back to normal. i drove by the tents coming down this morning. i ran into ben platt at duane

reade on madison avenue. jonathan: in all denim? tom: yes, he was all in life blue. jonathan: you're being very diplomatic this morning. tom: i set i love your shoes, they are like what jonathan ferro wears. jonathan: both talk about fairness. everyone agrees we want to make it fair, so let's talk about what is fair. i know it is politically incorrect to have a conversation about this but we mentioned a statistic, the top 1% pay 40% of federal income taxes. the tax systems is one of the most progressive tax systems on the planet. when more progressive than what you see from elsewhere. if you asked a lot of people in america, particular people who vote for democrats with the bottom 50% pay in federal income

taxes, i don't think many would say below single digits. that is the data. tom: the headlines yesterday of 60.21% on margin, some taxes would be below that. it is the summation of taxes and the summation of proposed taxes that will affect a broad swath of republicans and democrats. jonathan: we need to have a broader, more nuanced conversation. i am not going to deny there is a wealth inequality problem. of course there is. we have concentrated wealth. this is about assets. this is about assets. we know if you have had assets, you have done well and if you don't, you haven't. senator warren is having that conversation. i don't think alexandria ocasio-cortez sank tax the rich -- i know it is a neat slogan that fits on address. but the real data has become

such a lazy narrative in this country in the media -- and in the media we need to do better with. tom: i saw billie eilish wearing dior. how does the man gala play on washington? the congresswoman from the upper eastside decked out, alexandria ocasio-cortez decked out, how does it play on anne-marie? anne-marie: many are going to twitter with criticism that to attend the met rally -- the man gala, it is $35,000 in minimum for a ticket. to her defense, new york city elected lawmakers and they go every year. they go every year and are invited.

it is a support of the arts. this is going to get a lot of attention. congressman maloney from the upper east side she had a different message and that was for people rights for women. they both took this moment to take political comments. tax the rich will resonate today. jonathan: let's go there. let's talk about policy. what are house democrats proposing? anne-marie: what the new york times wrote is that they are taxing the. moderately rich it is higher rates. jeff bezos, his paycheck was $81,000. that was his paycheck. if you are going to taxes income, that is not going to be a high income rate. the wealth in this country for the top with his people is in what you just said, in assets

and real estates and stocks and bonds which have done well over the past year and decade. lisa: how much focus is there on implementing the tax rates that currently exist given the fact that hundreds of billions of dollars do not get collected because of maneuvers to get around it? anne-marie: there will be a lot of debate. one benchmark many of the democrats are going to use is to try to get the system back before the 2017 trump tax reductions. that will be one bar. the house democrats are less ambitious as you have some senate democrats and some in the white house. there will be a lot of back-and-forth on this before you see any decent legislation. tom: what happens for the rest of the week? does it sit for the rest of the week as people come up with a plan or is there action? annemarie: today and tomorrow

there will be a debate on it. at least the house legislation debate is supposed to be due by september 15. today and tomorrow will be a big deal in terms of the house ways and means committee. what is absent from this draft legislation is soft tax relief. -- salt tax relief. that has yet to be implemented in this plan proposal from the committee. jonathan: looking forward to see how this plays out in washington. it is good to catch up. good to have you back. did we welcome her back, tom? anne-marie, welcome back. did she make it to the man gala? tom: yeah, she was in diro -- in dior.

lissa, what are you looking at this morning? lisa: you are wondering what i am so deep in thought on? i think taxes -- taxation is a complicated one. a slogan reads well at the met, but get the details are what matter. sovereign debt can be very helpful if it is sent -- if it is spent correctly. i think there is not a sufficient appetite. the corporate tax rate being is limited -- being as low as it is, number of other aspects that the economist was laying out about the character of certain companies in the u.s., i am looking at those dynamics. rb in the same normal living bonds to where they are? jonathan: several points we are all making this morning. corporate taxes, i am with you. that is a separate conversation

and it is not the divisive conversation of someone taking something from you. futures this morning, up on the s&p. yields up one basis point. 133.94. on the 10 year. good morning, this is bloomberg. ♪

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jonathan: from new york city this morning, good morning. this is "bloomberg surveillance ." equity futures, positive about six points. some muted gains this morning on the s&p. marcus at jp morgan talking about buying into the cyclical's, the rotation is coming back, reinforcing his view that he thinks yields bottom last month. the lowest intraday of last month in early august. going into cpi, attends our 133.60. yields are up. what happens when the fed will spec?

look at what this -- what happens when the fed pulls back? germany and italy, just below 100 basis points. we are doing okay even though the ecb has talked about reducing bond buying. the spread between germany and italy, still pretty narrow. just a break of 100 basis points. let's finish on this, the commodity markets. triple digit crude. i don't want to let this one rest. we had francis from the bank of america on this program yesterday talking about triple digit crude on wti. $70.98. his base case is going out to the middle of next year. he is saying if we have a cold winter, we could get there sooner. can you imagine if we have triple digit crude amidst a conversation about higher inflation in america?

the fed can strip out whatever they want, you are going to feel that. tom: you sound like lisa. jonathan: lisa speaks the truth sometimes and sometimes you have to agree with them. lisa: sometimes. [laughter] jonathan: tom keene has come after you on twitter, have you noticed that? [laughter] tom: let's get away from the gloom and say you can't all be in cash. anthony ross -- anthony roth joins us now. let me picked up on what john said. you have an international cast and we have a rally that continues in some way, what does that mean for asia and pacific rim? anthony: it is good for asia and pacific rim. they are providers in commodities. that provides sources of revenue and profit for them. i think that is good for pacific

rim and asia overall. you have a weird situation in china which is 50% to 60% of the market cap in that part of the world and they are marching to the beat of their own drummer now. whatever happens in china affects the overall scenario from a commodities standpoint. higher commodity prices are going to benefit. tom: your claim for the management of quite money, you're talking about owning the financials. i want to buy the banks, but which banks do i buy? anthony: probably the large money center banks right now. we are expecting higher inflation. we have a cpi report coming out today and we want to see if companies are able to pass on those costs to consumers. if they do that and we see

inflation expectations creep up, we will see higher rates. if we look at the overall inflation situation, we see higher inflation in the whole economy. some of the key drivers of inflation which is services and used cars are being replaced with more structural forces of inflation, supply chain and wages. when you consider that and consider where interest rates are going, they are going higher. large banks and even regional banks should do very well in that environment. lisa:? ? what about the tech sectors? do they fall out of bed because wages are higher? anthony: long-term investors are not going to underweight the tech sector right now.

we have a market weight on the tech sector, but we are overweight in financials, industrials, materials because those are the sensitive areas of the market that are going to perform. lisa: this relative value argument i am struggling with because it is all predicated on the idea that rates are low. earnings yield looks phenomenal. at what point when yields rise does that relative value basis no longer work? all stocks lose some luster based on the relative evaluation to justify the purchases. anthony: i think there is a lot to that, but real rates are still negative right now. until we get into an environment where real rates start to break even or even nudge into positive territory, when we have gdp expectations of 5.5% this year,

even if we don't get $3.5 trillion, we are going to have gdp next year of 4% to 4.5%. we are not near the end of the cycle. we continue to like equities, even if we see the 10 year rate at 2.25%. tom: which stocks will go down less when we move 150 basis points? anthony: you are going to see the financials outperform the rest of the market. they're going to benefit, particularly the banks that are more levered to their loan books. you not going to see a credit cycle when rates moved to that level. the credit cycle is probably still a few years down the road. without seeing that credit cycle occur, you're going to see financial companies that have leverage in their operating models.

when you have higher rates, they're going to outperform. tom: are we going to have fewer banks? are we going to end up with six banks? anthony: the fed is not allowing banks with -- over 250 to consolidate. you are not going to end up with larger, more monolithic money center banks because they're not being allowed to grow above their current levels. where you will see consolidation is across the community bank and regional bank complex where there are many of thousands of banks. you will see consolidation. there are more players that cannot afford to pay for the technology and infrastructure required to drive customer satisfaction. lisa: gracie safety right now in the market -- where is the safety right now in the market? anthony: it continues to be in some traditional assets that are

hedges against inflation. those are the more cyclically sensitive areas. i think those provide significant safety. exposure to hedges like gold --. we are having a real conversation around crypto and bitcoin as an element of our portfolio. we have never included that before. when you consider the ecosystem around bitcoin and the way that it has cannibalized precious metals as a stored value, it needs to be taken seriously? jonathan: you think it is a good store of value than? what gives you that impression? anthony: if you think about what currency is supposed to do, the blockchain provides certain security. there is a new layer above the blockchain called light ring which is why they were able to

launch bitcoin in el salvador. that provides a means of exchange. cap every transaction needs to go into a blockchain. there is such a deep ecosystem that has been created that it is difficult for a sovereign state to create a competitive cryptocurrency. even though bitcoin is not perfect by any means, those attributes, the blockchain and ecosystem it has is very attractive. those are some of the reasons we are considering bitcoin, though it is expensive right now. jonathan: come back another time and we can have a deeper conversation about this. talking about cyclicals. this week -- yesterday morning. her forecast is as follows, 45 hundred on the s&p 500 this year. a ton of volatility.

she wanted to ignore the volatility and look out to where this is going, she wants to buy this market. this is a quote, "we see economic recession risk as low in light of a full growth scare an to treat it a buying opportunity." tom: is second best tweet i have seen is your tweet on bank of america is the abrupt -- and the abrupt reversal of ac in their survey. it is -- abrupt reversal they see in their survey. jonathan: what is 75% in june 21? global inflation expectations are declining. 12% down from 89% in march 2021. the recession expectation -- and let's not conflate these things.

recession expectation, just 6% expect recession. tom: there are some employment dynamics there as well. the way you get out three years or four years to say we are going to avoid that and at some point we are going to come out of this pandemic is the bet of people -- is the bet of the b ull. lisa: what is recession if the fed will keep using its balance sheet and get up zero? jonathan: i am with you. you can get a market call very wrong. equity futures up six on the s&p, advancing more than 1/10 of 1%. yields up. what are you thinking?

duane reade, what was he buying? this is bloomberg. ♪ leigh-ann: president biden is urging californians to keep governor newsom as their governor. he faces a recall election today. polls show he should survive the boat. the president appeared with governor newsom. justice stephen breyer is skeptical about calls to expand the size of the supreme court. he says adding seats would bring retaliation by republicans and could weaken public confidence in the judiciary. russian president vladimir putin has gone into self-isolation.

he was exposed to several people infected with the coronavirus. a spokesman says he is healthy and tested negative for the virus. amazon is going on a hiring spree, it will hire 125,000 workers in the u.s.. amazon will average starting pay of more than $18 per hour. the company will offer sign-on bonuses up to $3000 in some locations. quickbooks software has agreed to by mailchimp at $12 million -- $12 billion. it will help increase services. 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. ♪

>> one of the ways we can protect kids is to have adults generally vaccinated. the second is to have adults in

schools vaccinated. i am supportive of policies that require adult schools to be vaccinated for the safety of the kids. jonathan: joshua of the johns hopkins bloomberg school of medicine. i'm jonathan ferro, here is price action on the equity market on the ascent be. -- on the s&p. 10 year yields up. a bit of a snooze elsewhere going into inflation sector -- inflation data which is due in one hour. tom: within the snooze fest, you wonder if the cpi report get it done. this is an important conversation. everybody's heads swells during the pandemic. dr. amesh adalja has been confident in engaging the debate

worldwide over a perfect solution to a pandemic. he joins us right now. i was thunderstruck that auckland looks for perfection. they have one 7 million people. two times 10 to the -6%, a scientific notation, it is a little bit amount that is ill. how do you respond to their attempt to be perfect? dr. adalja: i don't think it is the right approach. it is not really justify what they do. their level 3 and level four lockdowns are borrowing from the chinese playbook. they pickup so much activities that are not fleeting to spread and don't allow people to do things in a safer manner, like go outside and not have to wear a mask or even get takeout dining.

i don't think what they have done is correct but they are surface defenders of it as i found out when you criticize them. it is something i think needs to be examined because it is not sustainable and they have about 30% of their population of vaccinated. i don't think we need to do this in the post vaccine era. we have so much technology to allow people to do things safely that this abstinence only approach should not be what is done and should not be enforced with pulleys. -- with pulleys -- with police. tom: in america, do have elements of music let? dr. adalja: we don't, we have aspects of it like in california with strict restrictions on indoor dining at outdoor going -- outdoor dining. that approach was driving

behavior underground where it was more risky. the lesson is that harm reduction, something we do with hiv and stds, that is the way we approach public health, trying to give people tools to make better risk calculations. we will never get to zero, but just try to keep our hospitals from going to crisis and we should have been doing that from january 2020. i don't think u.s. is a good example. there is a better way. like what taiwan followed. lisa: the debate over booster shots continues to heat up. dr. fauci has been speaking and cindy expect the fda to decide to give boosters. several fda members have said it is unnecessary or without fact. where do you turn in this need or lack of boosters? dr. adalja: to me, if threshold

is if someone who is fully vaccinated ending up in the hospital. that is not happening. there will be some need for boosters down the road, but don't think it will be eight-month after a second dose. i don't think we are ready to pull the trigger for healthy people. there may be any argument for elderly and people in nursing homes, but that needs to be driven by clinical data, not just antibody levels. do people get infections this many months out from their vaccination and does the third dose actually protect them against that? we want clinical data and to be driven by the cdc and fda at all the data being published so people can sift through it, not something a primarily being announced by the white house -- the white house. lisa: what is the concern about giving boosters? is there any scientific evidence

of harm or does not affect things at all? or is it a matter of distribution of the vaccine and trying to give vaccinated throughout the world as quickly as possible? dr. adalja: there is not a major harm signal, but if you read with the fda members wrote, they're worried about what side effects might occur if the third dose is too close to the second dose. this is something that can be answered with clinical data, just look and see what happens to people who get a third dose. that is what is missing or has not been presented publicly. you see a backlash from the infectious disease community with a few notable exceptions, but most of us don't think for healthy people we are ready to recommend boosters. what is happening in the u.s. with the number of hospitalizations and the worry about a rise in cases, it is first and second doses that solve that. we can prepare for boosters but

make sure we do this right so people have confidence in the process being scientifically driven. jonathan: thank you for your time this morning. dr. amesh adalja of johns hopkins center for health and security. here is another headline from dr. fauci, vaccine and testing for domestic travel being considered. there is a headline for you. vaccine test rules for domestic travel being considered, something that dr. fauci has suggested more recently. tom: you look at the vector of deaths, bloomberg had a good truck about this, the hospitalization issue -- i have been guilty of this. we are sort of over this and we are vaccinated and things are fine. they are not. these experts are dealing with it. jonathan: how the country would refer -- would respond to

vaccination requirements for domestic travel? tom: you know where i sit on this, i don't mind vaccination requirements but it is very fluid right now. i am scheduling a trip to toledo and you wonder how you are going to get there. jonathan: lisa, a comment on that headline? and suggesting that that is being considered? lisa: i wonder if this goes back to the idea of you have to be vaccinated or have stricter testing protocol before you go anywhere. my question is enforcement and we have to get testing back up to a certain speed. there was a time i could not get a rapid test in new york state anywhere. how are they going to epaulet this? tom: just go to the adirondacks and go canoeing? is that what the rapid test is for?

[laughter] why wasn't dr. fauci at the met gala? that is a question. lisa: what would his message often? jonathan: on the back of his jacket? this is bloomberg. [laughter] ♪

♪ >> as we started to reopen earlier this year, the bar for the data was high, and i think it was very difficult for the data to live up to that. >> most of our policy dues are already exhausted. >> the market is not ready for the market going up. >> we've had massive inflation in this area of zero interest rates. >> the message going forward will be very important, and right now the market doesn't care. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: inflation in america 90 minutes away. good morning. this is "bloomberg surveillance ," live on tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. your equity market up four on the s&p, advancing 0.1%. the data 90 minutes away. tom: we are going to talk gold in this first block of the show.