things to the data. >> you have to still worry about the service sector. >> economically, there is a delta wave. we just have to work our way through this. >> this is bloomberg surveillance with tom keene jonathan ferro, and lisa abramowicz. jonathan: it is payrolls week. for our audience worldwide, good morning. this is bloomberg surveillance live on tv and radio. alongside tom keene and lisa abramowicz, i am jonathan ferro. coming off the back of the biggest weekly loss since february. investors worldwide gearing up for earnings season. tom: i'm going to take that over payrolls. payrolls will be important. i like what john stauffer said this morning. moments ago, he said we get a sense of what lies ahead with

selective late reporters this week. those names will get us in the big banks october 13. jonathan: capturing the argument of the debate almost perfectly. the risk is supply chain disruption persists, and these expected earnings that you could recoup in future quarters will not happen. is this a story of recovery delayed or derailed? tom: i don't know. i think it will go sector to sector and company to company. which sectors will get hammered by supply issues and which will not? jonathan: 400 70 k, just eight 500 k spread. -- 470k, just a 500k spread. lisa: when we talk about earnings, i wonder what the pressure is at the federal reserve. do they raise rates or pare

purchases as the economy slows? tom: we are doing it later. it is too emotional. it was a great weekend. the tots took the trophy. the toots looked lousy in winning. jonathan: i watched season one for you. futures down 12 this monday morning. good morning to you all. futures down 0.25%. we are unchanged on tens. going into payrolls friday. euro-dollar 1.1609. stronger euro in the mix. lisa: there is not a lot of drama today. the nature of the ongoing concern of what happened earlier of the idea of slower growth and higher prices is weighing on markets. we are looking at supply chain disruptions. today, we get u.s. factory orders.

i am curious to see when you dig into the numbers what you get in terms of people ramping up orders as well as how long they have to wait to get those goods. today, we are getting a speech from the u.s. trade representative on the china strategy. it sounds like the u.s. is going to crackdown on china for not meeting some of its phase one trade goals. they are kind of stuck between a rock and hard place. they need the goods. how do you work with china in its new regime where people are not willing to wait in america for what they want to buy? president biden is learning to speak on the debt ceiling debate. a lot of people think this is not going to be an issue. i have got to raise the issue of we are kind of bumping up against the deadline if you believe janet yellen, october 18. the idea that the u.s. democrats need two weeks to do it alone.

what is the deadline? we are bumping up pretty close. people are starting to get nervous. jonathan: we are getting closer. i imagine we will get closer. isn't that the base case? tom: i have read a couple of articles. i am not going to go there. what i will say, moments ago, everybody is focused on the big number in social spending instead of are we going to get the bridges fixed? are we going to get the tunnels fixed? i don't know. jonathan: something between 1.5 and 3.5. lisa: no. progressives have conceded it will be less than $3.5 trillion. we learned over the weekend that there are going to be some concessions on that point. a lot of people saying it was a win for moderates. jonathan: it still sounds like it is 1.5 to 3.5.

thanks. do you like that, tom, lisa just says no. tom: it is a monday no across the kitchen table. jonathan: weekend with the kids, tom. lisa: 100% no. jonathan: it's ok, it is a safe place. lisa: is it? jonathan: what do i want to own when inflation expectations are rising and growth expectations are falling? what do i want to own when that starts to ramp up? >> we have been recommending for quite some time to be owning physical value, not just as inflation rises. cyclical value. the likes of energy companies, transportation and logistics companies. you see recovering demand.

actually significant underperformance. plenty of safety and the value itself. tom: what are you doing with big tech? everybody is talking cyclical risk, consumer discretionary. i hear very little chat about continuing to own profitable tech, cash generating tech? do you just get rid of it? >> what do you do on the other site? the answer is to be very discerning. we have always categorized big tech into two blocks, the cash flow generating you spoke about, and then the text unicorns -- tech unicorns, you have to discount into perpetuity. the cost of capital is not zero.

it is a very extreme example. we have broken the big tech into those two. the cash generators now, you have to be careful because like other sectors they are suffering . some are benefiting from the cycle. rising costs for a while. something like alphabet where the surge is cyclical. they are doing better on the top line. lisa: i love how when we talk to stock analysts they are talking about how they are turning to rates to have any effective call. i wonder when you talk about cyclicals and the value of stocks within them, how much this hinges on the federal reserve will not be calling the higher rates we are seeing. >> i am in a privileged position.

i can spread my vision across different asset classes. that is an essential quality. there is a strong argument that lots of these large-cap tax are duration -- stocks are duration calls. what the fed does is essential. also what it does not do. what it has not been doing all years. it has been ignoring all year. -- ignoring inflation all year. how everything else is valued is relative. the pricing of all risk assets. jonathan: can i just get a final thought on energy? for fantastic week for energy

last week when the broader equity market was lower. >> it is one of my favorite positions into year-end. china is talking about buying oil at any price, shorting coal. natural gas is up all over the place. we have been thinking for a long time it has been interesting with the return of demand. there is another big piece of that puzzle, which is the lack of investment. a lot of these physical industries have had a lack of investment for multiple years. long-term, they are supply constrained. we like it into present year and beyond. jonathan: the revenge of old commodities. we heard that from jeff curry of

goldman. thank you. energy equities absolutely flying. that segment on the s&p 500 is up for a third straight week. tom: we had some churn. i know you follow debbie ti. i follow the global brand. at 80, it is on its way to 100. jonathan: 75.97 on debbie ti -- wti. another fomc official getting caught in this. lisa: he basically said he made these trades on a preprogrammed path right before there was that surprise announcement by jay powell in february last year. this raises a question for me. does this make it a lot harder for jay powell to get a second term? jonathan: i don't know. you go through the timeline, the 27th of february these transactions took place, the 28

the chairman released a statement. on march 3, we got this unscheduled rate cut. it was preplanned. the vice chairman is not an active trader in this market. he made five transactions for the whole of 2020. the optics for the fed now, it is the timing of this discussion in the context of a broader discussion about what fed officials have been up to. tom: we are going to break, which is probably well. it is the optics of the moment. i thought the coverage was garbage. jonathan: we can get to why you think it was garbage. tom: i thought the headlines were irresponsible. they were not trades. they were transactions. jonathan ferro said it right. the headlines got it wrong. jonathan: the story was garbage. tom: i thought the headlines were absolute garbage. jonathan: tom keene, lisa abramowicz, and jonathan ferro.

from new york, this is bloomberg. ♪ >> in an effort to help american workers and businesses. one u.s. official says china may not change its trade practices,

and the u.s. needs a strategy that takes that into account. here in the u.k., chancellor richey soon at said he will spend $678 million to help people find jobs. household budgets are coming under strain after a cap on energy prices rose 12%. global news 24 hours a day, on air and quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am leigh-ann gerrans. this is bloomberg. ♪ ♪

>> we are going down from 6

trillion to 3 trillion, now one trillion. we have these conservatives that their baseline is zero. the agreement several months ago to proceed on that one bipartisan bill was that it was tied with our larger build back better agenda. both of these bills need to pass. both will not pass if people try to separate them. jonathan: congresswoman ocasio-cortez speaking there. your equity market this morning shaping up like this. we are negative 0.33%. we advanced to 149, just south of 1.50 on tends. 1.1611. that is the price action. here is the controversy. i think we need to have this

discussion about vice chair clara. preplanned transactions on february 27. i want to go through the timeline and get to the facts and a statement from the federal reserve as well. february 28, jay powell issued a statement. march 3, we have that rate cut. the transactions executed prior to any to liberations the vice chairman had with the federal reserve. the selective funds had a provable of the board of ethics. they took place on a day vice chair clara was visiting students at yell. it was not that active. he listed five transactions for the year. just some of the facts after the news late friday. tom: i thought craig torres' report was extremely well done. my issue is the media using the

word trade completely different from the way the street uses it. i don't see any trading. trading is short-term, opportunistic. what we need to say is what is the difference between the transactions of vice chairman clara. and what others did. jonathan: the issue at the moment for this federal reserve is the optics. i think the issue for people looking to fill the seats and others as well on the fomc is where do the people come from? lisa: if you have people with experience in markets, they will probably have assets they manage. if this was a preplanned rebalancing of accounts out of bonds into stocks, you wonder who is eligible at this point to be on the federal reserve? are people looking for reasons

to fault fed members? it goes to the perception of the issue and the federal reserve and action it has taken. jonathan: it seems like every single week there is news about a new federal virtual. -- fed official. we have a problem with the optics around the federal reserve right now. transactions and trades that took place in 2020. chairman powell has got to clean that up. to lisa's point, does this raise the pressure on chair powell? this is his fed. tom: they are going to do a study and change the rules. they are going to change the rules to what he did. you are going to see everybody do a clarita. jonathan: preplanned transactions and money in cash. tom: no, a productive

rebalancing of diversified portfolios. jonathan: this is a side story. i think it is important. the chairman of the federal reserve gets around 200k a year. we have been talking about second and third year analysts on wall street are getting paid 200k a year, we are going to compare a second or third year grad to the federal reserve chair. lisa: private sector grads get a large pay check. it seems like this is the way things will work and are designed to work. jonathan: we are going to catch up. let's talk about what is happening in d.c. and with the federal reserve is saying. >> have not heard exactly yet what the federal reserve is going to say.

it is really the optics that are bad. these were transactions, not trades. they were scheduled. the optics are not great. it comes at a precarious time. jay powell is up for renomination. we know progressives like senator warren has called him a dangerous man. you have the likes of treasury secretary janet yellen who says she supports his nomination. lisa: it raises the question of how much president biden would like to see jay powell renominated cannot shake the bow. what is the view on that? >> the infrastructure spending is definitely the president's first and foremost agenda.

he will be having a number of meetings throughout the week he went to capitol hill friday to try to unify the party. in this sense there was a win for the progressives. he said the bills are going to happen together. we are not meant to get hard infrastructure until we get a framework, and the progressives want to vote, on reconciliation. he did say it is not meant to be $3.5 trillion. this is going to be the tenuous negotiation. the president is going to be a speech -- be giving a speech on the debt ceiling. a lot of issues for the business community are front and center. jonathan: can we get a baseball take? >> i am feeling great about the yankees on tuesday at fenway. sorry, tom. jonathan: kerry go. feeling good, tom? tom: she was at a pay phone i saw this weekend. $1232 for anne-marie to sit

behind the yankees dugout. jonathan: that is how much it costs? >> are you paying for that? jonathan: let's catch up later. stay close. annmarie, down in d.c. the president tries to bridge the gap between moderates and progressives in his own party. tom: it is sort of chaos. i'm going to go back to focusing on the infrastructure bill. i don't have any great knowledge on that other than is it dead? jonathan: we have got a new deadline. month's end. it's got and maybe next to it. lisa: even janet yellen said maybe there are couple of days with wiggle room. maybe it is october 28. we did learn something. we learned the progressives have conceded. three point 5 trillion is not

going to be 3.5 trillion. jonathan: something between 1.5 and 3.5. your equity market's down 16 on the s&p. tom: vix 23. jonathan: this is bloomberg. ♪ ♪

the comfortable way to work out. -that looks fun actually. -it looks fun? it looks comfortable and fun. it looks like something i would put by the pool -or something. -looks like a paisley. -hey, a paisley, we'll take it. -yeah. oh my god, i could do this and watch tv at the same time.

-exactly! how do you feel? -it feels good. feel my heart racing a little bit, ya know, gotta catch my breath a little bit, but it's good. oh yeah, i can definitely feel it. fantastic. oh yeah, i can do this. this is easy. yeah, that feels great and definitely better than the floor. treadmills, you've seen the bikes with clothes hanging on them, but people don't use it. what's the point? the aerotrainer, people want to use it. -wow, this is easy! -absolutely! it feels good. it feels sexy. i love this, aerotrainer, i want one. i like this. like, i can do this. i want this in my house. (host) wondering if the aerotrainer is tough? you bet it is. (upbeat music) ♪ (engine revving)

jonathan: good morning. we i love. about .1%. it is tables friday, just around the corner. the range is wide. once again, a spread of half a million jobs. it is just a distraction from an otherwise important conversation. expectations for growth has accelerated. that is the story. let's have a real discussion about it.

just a little bit softer. your dollar index is just south of that 94 number. in a risk off environment, with expectations, the story gets a little more fuel. tom: what it really is, early october is the belief of -- jp morgan joins us. what is the jp morgan call on economic growth forward in a year? >> the broad picture is that we continue to get the benefits of vaccinations. the virus will become less of a factory. we see better growth in emerging

market, but growth is pretty solid. we have a threat right now and inflation is moving up. tom: i think all this news and viewers can be confused about a fairly optimistic outlook from jp morgan, but the potential gdp, which is much lower is up against your arguably optimistic view. are those views linked? >> i think in the near term, the basic point is that we have an enormous amount of slack. we can grow even with a relatively supply-side. i think the question and the more broad since is for the equity market and not about the

pace of growth but the sustainability of growth. we are optimistic that we are coming in with healthy balance sheets. still creating a lot of opportunity. potential growth is low. there is a good opportunity for having expansion that is both sustainable and modestly positive. lisa: how much is your view predicated on getting situations resolved quickly? >> i do not think we should expect them to get resolved quickly, but we are dependent on them moderating. we should recognize that. we need to see those pressures abate. goods get moved around the world more easily. it will take a while before we

see the problems start to move away from the scene. lisa: we are seeing the likes of nike and bed, bath & beyond falling after reporting expectations due to supply chain disruptions. how can he be optimistic when they are facing these unsold items that cannot be acquired because of the disruptions? >> the underlying story is that it is a drag that continues to get bigger. there is still this broad story. we have been downgrading quite sharply. we still have global growth. part of what is going on is the

pressure that is coming as we reopen economies. you have a balance of pressure on prices, but still strong global command. they can still grow 3% to 4%. the global economy will do better than that. importantly, china has to deliver after stumbling somewhat in the third quarter. tom: i do want you to talk about a broader resilient dollar that is out there. do we underestimate the resiliency of particularly asia em? >> there are two forces at work

right now. one is the china story. we have to be right that policy will calibrate. the other story is just coming into view, that we are finally seeing vaccination rate up. we are seeing restrictions come down. i include the emerging markets independent as part of the story. as we get the kind of growth that we are looking for, we are not going to see the dollar move materially. tom: if we see some form of lessening or failure of these bills by the democrat in congress, what does that due to the fiscal impulse of this nation? >> it is important that we are right, that we get additional

fiscal stimulus. we are looking for something that adds roughly 1% gdp for fiscal report -- for fiscal support. the sector has built up an enormous amount of excess waving. it has not spent the stimulus that came in 2021. i would not want to depend on that in my macro forecast. certainly, that would be needed, if we continue to grow at the pace that we had going. the cycling you have been doing this for decades. you see the amount of uncertainty among your colleagues. whether it is the policy response in china or d.c., whether we see supply chain disruptions abate, have you ever

seen this amount of uncertainty in your economic forecast? >> for sure. the difference, i do not see a particularly -- i think there is enormous range of outcomes in terms of growth. i do not think it is a particularly scary time. lisa: they are looking at the granularity is rather than the overarching points. >> my economic forecast will be

wrong. but i do not actually see it when i look at pricing. risk free and bond markets. they are not unusually high here. the range of outcomes is wide. again, i think we are well balanced for recovery. our deed -- these are our big questions. we were at the brink of recession. it was far more hard to figure

out than where we are right now. jonathan: fantastic to hear from you ahead of economic research. tom: i think we forget it. we had grinding this out every day. john, we are in the midst of a natural disaster. we are numbed by it. jonathan: it has changed markedly in the last several months. it will be bringing alarm bells. the market challenges them. the story is that this is persisting now. the issues that they thought were temporary --

tom: the question is, do you get a rate rise? jonathan: we are thinking about the story persisting into a new year. a potential round of negotiations taking place. they look a little bit different. lisa: that is my the likes of amazon could be vulnerable. the range of uncertainty is very high. the chance of recession is still very low. >> that and i will be wrong, probably likely. we had down 18 points for the s&p. this is bloomberg.

♪ >> with the first word news. the house speaker has set a revised target date to pass the infrastructure bill. she says she backed off her promise to bring it to a vote because it would have been defeated. pelosi is wanting to get moderates to agree on the largest spending package before voting on infrastructure. the u.s. is moving closer. neither political party has signaled that it is ready to back down from a bipartisan showdown on the debt limit. chuck schumer plans on a plan to suspend the debt ceiling until december 2020, but republicans are promising to block the attempt.

infectious disease specialist anthony fauci is saying that we are turning the corner. more people need to get vaccinated to keep vaccinations on a declining trend. there are eligible people in the u.s. that have not gotten a vaccine. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. ♪

>> it is extremely important. it is given by mouth, say do not

need anything special. the results are really quite impressive. it decreases the likelihood of getting hospitalization or dying . jonathan: dr. fauci speaking on cnn. good morning. your equity market is shaping up. we had down .4%. yields are higher this morning. approaching 150. the euro is stronger. that is the price action. $119.1 million. opening weekend, but no time to die, james bond. tom: an authentic celebration in the u.k. as well. it is a huge deal.

jonathan: it is just interesting with people getting back to the theater. tom: i could see you in the volar tuxedo coat. jonathan: interest alba or tom hardy? tom: to be the new james bond? i am so celebrity deficient. lisa: i have some fans at home. i believe the opening is next weekend. jonathan: i thought this was a good set up for a talk about the pandemic. tom: it is. we are thrilled that he could

join us this morning. i will go to baseball. i got a glimmer that maybe there is better news ahead. are we somewhere near second base or can i be so optimistic on this terrible disaster to say that we are rounding third base? >> i would say that it is likely that the worst of the delta leave is behind us. in certain places, it is still horrifically bad. the dynamic of the wave are receding in places, which is great, but we could still see a lot more people sick and dying, if they are not vaccinated. we still have some work to do. unless the virus mutates again,

we could be on a downward trajectory. tom: have the political efforts to force vaccination worked? do you see an observable trend in politics saying that get getting vaccinated works? >> whether they are airline pilots, hospital workers or teachers -- there are a lot of people who, must they really need to, they will not go out and get it. i see that when i go out to volunteer. people show up and i am like, why are you here today? it is not a small number of people. there are some people who are dug in and might even quit their

job. we want them to get vaccinated, but you have to worry about certain industries where people -- you have a marginal employee base. i have talked to experts in the nursing home industry. they are worried. i think that in general, it has been pretty helpful, but i do not know exactly how it will play out. for right now, it depends on where you are. if there are a lot of cases, remember that even under the best of circumstances, you can still get covid. it is possible, say you want to reduce your chances. it would be prudent to wear a

mask. particularly you are pressed up in a supermarket line or something, put on a mask. lisa: or if you are in the theater, watching the new james bond movie. october 8 is the debut in the u.s. as we get back to normal, how concerning is it? if they get the sniffles? at what point do we stop being worried and start treating it like the common cold? >> to me, it is the difference between being extremely worried that i could get very sick, so i am wearing a mask and being anxious, versus being vaccinated, i will put on a mask

to reduce the chance that i get sick. i just rather would see it go down in our community. we are still having trouble switching from what exactly will happen to me to how to keep my community safe. the really important thing is how much is out there? jonathan: it never really -- we never really got to ask the question whether we should be packing our movie theaters anymore. lisa: he would probably say no. a personal choice at this point or is it a community health perspective? i we still seeing hospitals strained?

that is really the issue. jonathan: it depends on where you live, doesn't it? tom: im fixed on the james bond thing. mohammed says jonathan ferro should be the new james bond. jonathan: i can make that work. i am disappointed that they shot some of this movie -- it is beautiful and i do not want extra toys going down there, but i think it is over anyway and everyone is going down there. this was fantastic. lisa will ask who would know?

tom is agnostic on financial asset. see how that works. tom keene and lisa abramowicz. equity futures are down 12. this is bloomberg. ♪

>> inflation is not going down. hi. wes you have to worry about the service sector and all those areas connected to travel and leisure. >> we have to work our way through this. >> this is bloomberg surveillance with tom keene, jonathan ferro and lisa abramowicz. jonathan: i am alongside tom keene and lisa abramowicz. we had down .25%. we are trying to set up for the season. tom: we need the earnings. it really gets