in the fourth quarter. >> the consumer is robust but there are issues affecting demand. >> before the fed in particular needs to act and do something. >> this is the perfect time for them to announce tapering because things are so quiet. >> this is "bloomberg surveillance" with tom keene, jonathan ferro and lisa abramowicz. jonathan: good morning. this is "bloomberg surveillance" live on tv and radio. equity futures this monday morning down 62. tom keene, evergrande front and center. >> this is a comprehensive price adjustment on a monday morning. you can go any number of ways here. i am simply going to go 20 miles or so as you move down to hong kong and when you see henderson

development and the other traditional hong kong developers begin to see their share price erode. jonathan: starting to bleed into global markets. we are down four basis 30. from all your reading are we facing financial risk or are we facing real economic risk? tom: what we do have is an agenda and it stretches into the fed meeting after this new debt ceiling debate heats up. edie's a set of things and you get that out of september into q4. ed rushed to the end of the year and the mystery of 2022. jonathan: the mystery for me, this has been on the radar for a long time. it here we are waking up to this with futures down one lisa: -- 1.4%. lisa: the fact chinese

regulators haven't stepped in is a little concerned. there's a report talking about the potential for an additional regulatory crack in the property sector. jonathan: we've got a key week to get through. we are lower, negative on the s&p. -1.4%. some interest on bank loans due today. we have had a strong guide from authorities they probably won't get paid. some interest on bonds comes due. will you see it in the bond market in china and in treasuries, risk off defensive. tom: we are halfway to crisis. crisis in general is a 30 vicks handle paired we are at 25. this is a comprehensive pullback. jonathan: a bit of dollar

strength out there as well. euro-dollar this morning, negative there and knew little more than a 10th of 1%. lisa: amazing we have and mentioned the federal reserve yet. considering the fact we might get guidelines as to when the fed will start tapering their bond purchases. traffic is snarled once again. the u.n. general assembly kicking off a weeklong gathering in new york city. all the leaders coming, not necessarily the 10,000 people event that will be happening. still notable and they will be talking about some of the pressures on the economy. we have the housing market, interesting how this factors into how the fed looks at the market. it is excited to stay there due to some of supply constraints ongoing. energy companies in the u.k. government holding a third day

of crisis talks talking about the fact natural gas prices in general have tripled over the past year. you've been talking about this and focusing on this. what are the highlights is the idiosyncratic aspects the federal reserve will be looking at to determine whether this push is transitory and what this does to consumer sentiment in a time when prices are increasing so much. tom: how does this fed act given the market this morning. they are miles from tapering. tom: the fed won't jonathan: -- jonathan: the fed won't announce tapering because your not expecting it. the federal reserve is in do no harm mode. people excited evolution to tee up tapering further down the road. this week can you imagine this on the screen right now? tom: we have to get to wednesday. jonathan: the rbc capital markets ahead of u.s. equity

strategy joins us right now. is this the set up you've been waiting for? >> looking at the futures this morning, this is the first time in sometime we have had a real meaningful parade. if you talk to investors, of the fear is starting to become palpable. ultimately we have to see a breaking institution investor sentiment to get this pause that ultimately refreshes. we've been talking a long time about this. we talked about the deceleration at the rate of change with the earnings growth time and again out of a recession. it typically leads to pullbacks in the stock market. it is natural for this to happen and we have a lot of other catalysts with earnings growth that are starting to perk up to help catalyze that downward move. i am actually somewhat hopeful we can get this done and out of the way and move on. i never want to see a down market. i think it's a natural part of the process when you come out of

a recession that you have to have this digestion period. tom: what is the character of their confidence? >> i think it is a hope that some of the pressures we have on earnings growth in particular on the supply chain side, that those will be resolved sooner rather than later. there's also the idea that we are heading into a strong economy again. at the end of the day, investors have to ask themselves what's the risk of a recession. is it yes, is it now. if the answer is no, you're typically better off sitting around waiting and buying the debt. it's only when a true recession fear moves those down to a more defensive posture. lisa: when do we know it is the dip to buy? >> i think we have to watch the sentiment indicators. we had one take a very good step in the right direction next week

which is when you look at the retail investor survey that comes out every week, the net bullishness to about nine to 17%. we saw the bulls absolutely collapse. that's one week of data. typically when you get below 10% , that's a very good buy signal on a 12 four-month basis. you also have to look at been institutions are doing. the data we get week we -- weekly shows we are sitting at all-time highs. we need to see that institutional positioning come down and we probably need to see more damage on the retail side for a few more weeks. >> wears a the policy fit into it. there is --

>> the fed call really impacts two things. one is our assumption on multiples and how we want to be positioned for the u.s. equity market. a lot of the damage to the market itself was done back in the spring when you saw the economists clamor for the spread -- for tapering signals. we saw small caps are to underperform large caps. he looked at q2 performance per that's important. we saw markets ultimately took a risk hit. the other issue is if you look at the balance sheet it enabled multiple expansions in a post-financial crisis era. if you take that balance sheet away you don't get more multiple expansions, there will be earnings growth. tom: i'm in a complete sweat

with futures where they are. 4.1% drawdown. the crisis is in hand. we are up to 25.14. why not decide to load the vote -- load the boat? which sector has the most consistency and velocity into 2022? >> the two sectors i will tell people tobuy his financials and technology. if a big pillar in the growth trade. as we come out of these shorter-term concerns, the value trade will do well again. it does not have supply chain issues. that's going to be your cleanest, purest way to play that value pop. longer term will be due no is we start talking about hikes, but typically the fed hiking cycle does end up killing the value trade as well. we see that time and again.

longer term when we see economic growth back towards trend like levels, you want to be in the growth trade. jonathan: good to catch up. if you're just tuning in, good morning. not such a good morning in this market. -58 on the s&p. there's a bit into the bond market, quite defensive. treasuries come into or three basis points. that's the market salary. we will stay on top of this on bloomberg tv and on bloomberg radio. saturday evening, i'm minding my own business and i get a message about the u.s. open winner and i start watching this interview with her. she is asked to name her three dream dinner guests. take a listen to at the u.s. open winner had to say paid -- say. >> daniel raqqa auto, michael

jordan and the third would probably be tom keene from bloomberg. i did my a levels in economics, i was having to keep up to speed with the latest news and he made it in a way using analogies that were relatable and quite funny and very understandable. jonathan: i already knew, watched bloomberg surveillance and if you are watching, good morning. i have to say i'm disappointed. the other issue i have is she understands you? [laughter] tom: i am reading in on tennis like nobody. what i can do, my hockey coach look to the tennis coach and the tennis coach said don't give up the day job. jonathan: she is very welcome on this program whenever she is available. equity futures down 59 on the s&p 500.

futures, in 1.35%. we kick off the trading week. going into the fed decision, full coverage this wednesday. ♪ >> treasury secretary janet yellen is warning of a catastrophe if congress does not raise or suspend the u.s. debt ceiling. she wrote the government could run out of money to pay its bills sometime in october. senate minority leader mitch mcconnell rejected deals for republicans to join with democrats in boosting the debt limit. president emmanual macron is making it clear france is angry over that submarine deal. he will speak with president biden in the coming days. french officials have been reviewing the efforts of your to

boost its own defensive capabilities. in canada, the prime minister appears to retain power in a close election today but he may fall short of regaining the majority in parliament. trudeau's liberal party is likely to win 155 of the 313 seats in the house of commons. it was a night for the streaming industry at the u.s. emmy awards. apple tv plus winning best comedy series with "ted lasso." the first time the streaming business -- netflix wins best series with "the crown." global news 24 hours a day on ai bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. ♪ ntries. this is bloomberg. ♪

♪ >> the speaker does not actually

have to advance the bill and send it to the president for signature. she can hold onto that bill, so there is some flex ability for how we -- some flexibility for how we mesh the two mandates. jonathan: john yarmuth, the house budget committee chair, speaking on fox. alongside tom keene and lisa abramowicz, i'm jonathan ferro. waking up on monday to some risk aversion. on the. s&p, -1.3%. some payment data coming up today for some bank loans. yields come in on treasuries, down to 1.33%. down 2% and change on wti. through g10, some dollar strength out there. tom: i think it is right to watch euro, one dollar 17's and

-- $1.1713. with us is annmarie hordern. we don't have a clue what is going to happen in washington this week. an open question. how is the debt ceiling linked to the migration from $3.5 trillion to a lower? annmarie: these are two separate things -- a lower statistic? annmarie: these are two separate things. the debt ceiling, what we are potentially going to get a vote on this week, these are actually two different plans we have to watch through congress. this is election of the debt ceiling and an appropriations bill to make sure we can keep the government open. that would only last until early december, and would also be a for the likes of afghanistan -- would also be aid for the

likes of afghanistan and hard-hit areas. we know that republicans are not in favor of raising the debt limit, and democrats will potentially have to do it alone. tom: what happens if they don't get 10 votes for debt ceiling? annmarie: they will have to put it as part of their debt reconciliation. they do not want to do this alone. they want it to be bipartisan. you heard what treasury secretary janet yellen said, that this should be done in a bipartisan manner. 97% of it was done under prior administrations and prior presidents, urging congress to act together. about the end of the day, someone has to cave. jonathan: here's the quote from

"the wall street journal" from secretary ellen. "-- secretary yellen. "we are just now emerging from crisis. we must not plunge ourselves back into one." what is the deadline? there doesn't seem to be a deadline here. annmarie: we don't know the exact date. it is an elusive eight within a get if the treasury is going to give an exact date, but it is potentially off by a few days, that could potentially be very dangerous in the sense that if it is too early politically, republicans may say you were just trying to force us to act. but if it is too late, they could find themselves potentially in a tech. so they are keeping it to -- a technical default. so they are keeping it to some date in october. lisa: how much has senator

manchin gummed up the works, saying he wants to wait until 2022 to talk about the $3.5 trillion infrastructure? annmarie: this is going to be the biggest showdown between the democratic already. you are seeing and not just from senator manchin, but politico if you moms ago -- politico a few moms ago saying kyrsten sinema said the house needs to vote on bipartisan infrastructure ash a few moments ago saying kyrsten sinema said the house -- a few moments ago saying kyrsten sinema said the house needs to vote on bipartisan infrastructure. this is the problem the leadership has in the house. this is coming up on september 27, and this is going to be whether they push a vote on that bipartisan for structure. you heard from representative yarmuth on cnn the fact that he thinks a little bit of wiggle room, maybe the house could pass bipartisan infrastructure but

not send it to the president's desk, but this is where it is going to be high-stakes and a very delicate dance. lisa: a lot of market participants looking at what the policy risk. if the 550 billion dollar infrastructure bill gets passed and there are no new taxes, that might be a net positive, whereas if the 550 billion dollar physical infrastructure bill is in peril, that becomes a real problem. which is? -- which is it? annmarie: democrats have said from the beginning of these bills -- the beginning that these bills will move in tandem. they want to pass that reconciliation by next monday, but progressives are saying they will not have the votes if they don't have reconciliation. what is so hard for some of these house moderate is they want to see what the senate is willing to do. what does synema, what do senator joe manchin really want to vote?

they don't want to put their name on the line your before a vote. jonathan: thank you. it is getting messier and messier. tom: it is, and it goes with the calendar. in the old days, the kids went back to school the wednesday after labor day, and the world recalibrated the thursday after labor day. that is not true. it starts on a given monday mid-september, and that is where we are starting on this monday to get the wednesday fed meeting. jonathan: every single friday at about 10:05, tom and i go for breakfast together. tom sits there you tell me, what you doing this weekend? i tell you what i am doing, and you say i am going to watch ted lasso. "ted lasso" just taking home the emmys. tom: i have to watch it with the script on the tv screen because i can't understand 1/3 of the

words. i want you to translate it for me. the guys in the locker room, i have no idea what they are talking about. this guy is from kansas, and that's all you've got to know. this is an ancient tradition, and the creative comes out of nowhere. that's is a lot. lisa: tom, why did you not wear the velvet suit? i was expecting a blue velvet suit. jonathan: what do we make of the streaming companies, the likes of apple tv taking this home? tom: we've seen apple say they would pony up another 500 gajillion dollars towards creative. through 10 things at the wall, they show 20 things at the wall, and they are hoping "ted lasso sticks". jonathan: "ted lasso" stuck.

tom: all i know his switchman would have done better this weekend against the tots. jonathan: it's defensive out there. equities lower by 1.3%. good morning. on tv, on radio, this is bloomberg. ♪

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jonathan: good morning tina fey had here is the action. thus -- switching up the board to get to the story out of china. onshore, chinese markets closed for today and tomorrow. down by 2.3%. trading with a volatility of a penny stock right now. look out for that currency weakness coming through a little bit. the next key dates for you, first one comes today.

the next stop, thursday. interest payments due on bond terms. where is the plan? they do not seem to have one. tom: they are going to go early morning their time. their plan is particularly sunday evening. so maybe wait a couple days here. jonathan: it is a defensive morning. this is what you would expect. we discussed it at the top of the hour. i do not really know anybody expecting amounts on wednesday. if you are not expecting an announcement, you are probably not going to get one. tom: i like the word tweak.

maybe it is a slowdown. then it is a complete mystery. the most mysterious part of the mystery known as economic 2022. >> what is going on in the labor market right now? how serious are these workers shortages? we know that we are in an economy constrained by the supply-side, but how significant is that? tom: the constraint is there. particularly linked into the challenges and prosperity's of china. how do you think consumption into the dynamics that we have observed out of hong kong and beijing?

please go to three decimal points. >> you get relatively smaller numbers. the issue is if you get a general risk off, then we find that global economies become much more correlated. you always have to watch these global risks, even when you run the numbers and think it looks small. jonathan: run me through, as you see them. they have faced this over the last few times. risks coming out of china. how do they face this one? >> as the federal reserve, you are controlling primarily what is happening domestically. your monetary policy should focus on domestic issues. whether it be concerns about the

debt ceiling or what is going on externally, that is what they are trying to navigate. we have very accommodative financial conditions right now, so they will probably still be confident towards tapering. it leaves a lot of optionality, in case something happens down the road. >> a lot of analysts are focused on whether they are transitory. does the fed really care how long they last or is that not the inflationary input that they are focused on? >> i think it does matter, the tightness in the market. we are talking about things like semi conductors continuing into the end of 2022. that could push up inflation expectations.

i would go back to the labor market. you can expand capacity and supply. what is harder to expand supply of is workers. that would be my concern. >> i'm still trying to understand why it is that the fed is continuing. is this a statement saying that the fed has not successfully divorced from tightening and that they will not be able to do that no matter what their communication is? >> you are not alone, lisa. some officials are looking at that with you. prices have increased dramatically and is it really doing something for labor markets?

there are real questions about the marginal benefit of doing purchases. yes, i think we are going to hear from chair powell. fed officials do not want to raise rates until they fully tapered purchases. it does set you up. tom: it is a huge deal. he said, i will read the introduction. if me and the history of the fed right now. the answer is that they wait and they wait. they are as data-dependent as they have ever been.

i have not read them. i told that to the professor once. >> this flexible inflation -- the idea is that we will wait until we see the inflation emerging. maybe it is transitory, but we are seeing that now. we have seen those expectations from the university of michigan. some of the other survey measures also higher. it is relative to their prior policies, that they are trying to be behind the curve, just because it has been difficult to get inflation higher. when they start raising rates, they should have more confidence. i think that is by they are

thinking about another 18 months or so. waiting until the end of 2022 or beginning of 2023. jonathan: how does this help us achieve our objectives? tom: good question. >> i'm not sure does help them achieve their objectives. we think it will be around 1.6%. it is a median. there will be a wide dispersion. these are far out expectations. my kids should not be reading them as literally. tom: allan meltzer would have screamed about the dots. lisa: nobody else has fully read his document. to move from the dots to the

real world, when is september really starting? what is your sense looking at the real world data? >> you are definitely seeing it in the travel sector. that is where it comes through most clearly. not only domestic travel but international travel, which has clearly been held back by this. some of it might be pushed out a few months, but it is contingent on what the health scenario looks like. outside of travel, demand is holding up really well. it comes back to those supply-side issues. much lower than expected. a supply issue at some point. as an economist, is this q3

growth not happening? jonathan: andrew, thank you. looking ahead to 2024. they went from forecast base to outcome based. tom: it was discussed. giving public service to the u.s. treasury of service for a good amount of time. richard bernard told me, you have to be kidding me. jonathan: this could complicate the mission. what is the mission right now? trying to divorce a decision, but it could complicate that. lisa: you have less dovish numbers that might put a dot on the high-end.

i do not see how they can divorce these two things. they are ready to go, if they want to raise rates, but i do not see any sign that they can separate the two. jonathan: there are doves and super doves, there are no hawks left. tom: 20% is now in the realm of possibility. lisa: it raises the question of when you let it go to reach the bottom? jonathan: we are -1.32%. this is bloomberg. ♪

ritika: the fate of the economic agenda is largely in the hands of nancy pelosi. she has to find a way to keep democrats moderate and progressive wing moving towards her goal. that includes the spending bill. she has to find a way to avert a shut down. boris is headed to the u.s., his first trip outside of europe since the pandemic again. his relationship with president biden is at a delicate juncture. after several for -- false diets, bankers are getting back to it. they have been told to be expected at their workstations

five days a week and occupancy is at half and continuing to rise. zero-tolerance for corruption. that after a report that the e-commerce giant has begun an investigation into claims of bribery. looking into accusations that legal fees paid by the company have been used by brought -- as bribes. a park in beijing is an instant hit. the grand opening sold out within 30 minutes of going online. the government has taken aim. this is bloomberg. ♪

>> we would hope that when we get the proper vaccination to

everyone, when we get a more -- that it will have an effect of stopping the spread, but the goal of this particular decision was to prevent people from getting serious disease, who were at risk. jonathan: good morning. this is bloomberg surveillance and here is the price action kicking things off. -1.3%. the pressure point here, tension coming out of china. a critical week for the company. spills over to the u.s. yields in, three basis points. that is a red headline across the board. safely boasters antibodies in kids. the pfizer shot safely boasters

antibodies in kids. in a trial, two shots of a 10 microgram dose producing antibody levels seen and a trial for those who got the dose with similar side effects. the view forward looks like this. the company is seeking emergency u.s. clearance for those aged five to 11:00 -- five to 11. tom: you mentioned 2000 people. i really want to go into these headlines. the actual granularity. the new york times captured this a few weeks ago. there is a photograph. there is some courage involved here.

jonathan: they are getting back to normal. it is difficult. tom: the testing continues. we are hugely advantaged to speak to her after this announcement. amber, this has been expected, but there is more to come. is it just more study and more testing? >> we have been waiting to see the data in children. it is exciting to see the data coming out. so everything that we know about the biology suggests that it would likely be affected in children, but this is the first data and it is important to figure out the right dose. this seems like an exciting

development. tom: what are the side effects that you are worried about? is it simplistic like heart inflammation or much more subtle? >> the great thing about a child this sign is that you are open to any effects, even those he may not have expected. there might be other side effects in children. they consider different doses. sometimes with children, they need the same dose and sometimes they need a smaller dose. this data looks like it is for a smaller dose. they will have to wait and see what the other schedule suggests. lisa: what is the timeframe to release this data, actually

getting kids vaccinated? >> last time it took about a month, which is very fast. it might be a month or it might be a handful of weeks. say vaccine, different dose, but definitely not this week. lisa: there is the issue of complicating booster shots. people might be eligible for additional shots. how does this work out in terms of prioritization? >> there has been planning around that point. if the demand for booster hits at the same time as the emergence the authorization, there might be site challenges getting an appointment before the short term.

there has been a lot of planning. that situation would not last. we definitely have enough vaccine. tom: as we move inside with the little bit of a chill, what is vaccination like in the country? it dipped low and it came back. where are we now? >> it is very slow. i do not remember the exact number this week, but less than 1% of americans getting vaccinated. we are getting an additional people, but the progress has been very slow. the people who are currently not vaccinated -- there is a tremendous interest by individuals who have not yet had

the ability to get vaccinated. it is clear that there are many parents and children interested. jonathan: there might be parents hesitant about using a vaccine for children under five. >> the reason it has not been available to children is because we have been waiting on the data. i have confidence in the process. the data seems strong, but it will have to be fully reviewed. it is -- every parent will have to make the decision, but we know that the mild side effects -- the majority of people have no side effects. it pales in comparison. i suspect there will be many

parents looking at it. jonathan: this headline coming out in the last five minutes. producing strong antibodies in children as young as five years old and a large-scale trial. tom: just more research. when it comes down to is you mentioned one third of the dose for adults. it is another thing to make a scientific guesstimate of the range of potential success on dosage and what it means for the body and the body weight. jonathan: equity futures are down 59, without a doubt.

we have a fed decision on wednesday, but nobody is looking down to d.c.. we are looking around to asia and china. this is bloomberg. ♪

close the financial markets and telling the reverse of the spring, which is week celebration in the fourth quarter. >> there are issues affecting consumer demand. click save needs to act and do something. >> because things are so quiet. >> this is bloomberg surveillance with tom keene, jonathan ferro and lisa abramowicz. jonathan: what a week we have had of you. good morning. this is bloomberg surveillance, live. we are down 1.4%. the bond market -- it is all about ever grand. tom: it is all about ever grand. everybody is in the pool today.