>> this is just a matter of patients. >> the fed can really meaningfully do anything by raising rates. >> markets are not comfortable with the idea. >> this is "bloomberg surveillance" with tom, jonathan ferro and lisa abramowicz. jonathan: all-time highs around the corner. good morning. this is bloomberg surveillance live on tv and radio. your equity market up 29. tom keene looking for some attention. you can have it in a moment. tom: i have to go home. jonathan: all-time high for the equity market around the corner. tom: what impresses me today as we have eight reasons to go down and we didn't. i got the booster shot. it didn't hurt, you were there, it was great. let's go.

get your booster shot, get vaccinated. there is the headline. new york city required covid vaccinations for all public employees. dow jones, there you go. let's move on. lisa: i'm very charged. jonathan: help me out. lisa: not only are we nearing all-time highs, we see 10 year yields continuing declines of the highest level since may of this year. the idea of higher inflation, a higher yield isn't scaring the equity bowls. it actually shows faster sales offset by lower margins but still optimism. >> let's get to the price action . equity market up 29. bond yields unchanged. in the fx market, we can talk a little bit about the exit of the blunders bank. -- of the bundesbank.

82.24 for crude. lisa: which fed speakers are going to speak. this follows yesterday's rash of fed speak as well. i wanted to point to one statement by christopher waller where he said it's the upside risk comes to pass, inflation above 2% then i will favor lift off sooner than i now anticipate. we talked about how they separate the idea of taper from left off, it's not that separate even in the minds of the governor and the fed officials were looking at inflation that continues to run hotter than they expected. i'm very interested to see how this up -- reply to these disruptions. we did see the gdp now pass from the atlanta fed actually showing deceleration. this basically is a gauge of

real-time economic here. it is palpable but not negative. and pretty much predictable because we did see gangbusters recovery after the turn off of the economy in the wake of the pandemic. aftermarket, tesla is planning to report earnings. expectations of the road ahead. the key issue, of the chip disruptions, the chip shortages. how much is this affecting sales when the u.s. is trying to figure out how they can immunize themselves from these issues. tom: how do they raise those rates ahead of that report? i just -- the number can be off. but still it's a vector. jonathan: just around the corner from all-time highs.

>> last year was all about multiples. they sure multiples have been down a little bit in many sectors. as lisa pointed out a moment ago, earnings have been stellar. when you have an economy that is growing this fast, a novel gdp is still growing at the best level in years if not decades, you are seeing that manifest on the earnings side. tom: i look at where we are now. i'm getting some optimism out there. lisa i think nailed it in her opening comments. the idea that even with some worry about deeper curves and all that, we see corporations delivering in this environment. is that what you expect? >> i think the short answer is yes.

i get the rate concern. we had some volatility from the bottom market and it's likely to continue. to put things in perspective we have some deceleration the economy, we have the u.s. household arguably in the best shape in decades when you look at savings. household net worth. against all of that we have a 10 year at 1.63. that is not an existential threat to equity markets. tom: when i look at the moment and the back-and-forth narratives we see. the narrative is evaporated in the past 10 to 12 days. what's a caution you have in portfolio management? how do you take those narratives, take them in and stay optimistic? russ: one, a look at what's driving markets. the risk to me is not and

whether the 10 year's 1.50 or 1.60, it's around some of the supply issues. we've seen inflation has been stickier than forecasted six months ago. but it can also affect growth. the key here is the supply issues are widespread, they are more heterogeneous than people talk about. take one segment of the economy. in commodities, easy see all these diversions. copper, iron ore, aluminum, they are all doing different things. this is within industrial commodities. at the same time, whether you're talking about inputs, semiconductors, of most important one labor, they are all supply constraints we have to watch. lisa: you like consumer discretionary's, you are not that fond of financials at this

point even as you do expect yields to rise. can you square that for us. russ: there's a couple things behind that. we expect yields to rise that much. there's a wall of money looking to invest. you have everyone's intention to endowments looking to take advantage. your foreign investors looking to take advantage. with what's been happening on the curb -- curve, it's not a huge headwind. finally, i think we consider where you want to be right now. one of the key ingredients is pricing power and the simple answers we see better examples in manufacturing, in parts of materials, in the consumer space. it's not obvious how much buying power banks and other financial companies have right now better

opportunities elsewhere. lisa: the other side i thought was interesting is how you are nuance in your portfolio. you don't like gold, you think it is useless as a potential propagate. why and when did you start to sour on gold is an allocation? russ: we were fairly long gold a few months ago. we really brought it down starting late last year and early this year. it's not that it's useless. there were periods where it was an incredibly efficient hedge. the problem is it wasn't responsive to real rate spring -- real rates. what is it hedging against? one is risk. right now if you look at that gold is trading it's actually trading with a positive correlation to equities. it's not doing a great job hedging equity risk. the other argument is gold

hedges inflation. i think that's partly right. whether you're talking about literally decades. how do we want to hedge inflation. focusing on equities. we keep up with that sticky inflation. jonathan: fantastic to catch up with you. your equity market on a five-day winning streak. here's the lead this morning. it comes from dow jones. great reporting. new york city will require its municipal workforce get vaccinated against covid-19. eliminating the option for testing and joining a group of state governments with similar mandates. tom: you can tell yesterday it was palpable in the air that they are further down the road from really getting back.

from johns hopkins yesterday, 1500 deaths a day is totally unacceptable. we need to get below 100 deaths. jonathan: the new rule covers 160,500 workers. 71% of partially or fully vaccinated according to the official estimates. 70% of police and only 60% of fire department personnel have received at least one shot. you can see where the focus is. tom: it's a huge topic as well. can i touch on something which i think it's vital? i'm as guilty of this as anybody, focusing on big names. dover yesterday, it's a venerable american company back in the 19th century. they make stuff that falls underfoot and makes it hurt. dover came out with sterling

earnings and a constructive report. j.p. morgan said it was better than fear. their fear is out there and funding manufacturers are nailing it. they are up 140% off the pandemic bottom. jonathan: we improve margins year-over-year despite well advertised supply chain logistics and availability challenges. margins better. not for everyone but that's where the focus is. lisa: sales are going so gangbusters and at a fast speed they can offset these other pressures we are seeing that time and again. jonathan: about five or 10 minutes time i will do my best to restart the program. tom: we are getting a boost. jonathan: i think you knocked us off -- knocked us off the rails. your equity markets, five-day

winning streak. from new york city, this is bloomberg. >> with the first word news, i'm leigh-ann gerrans. congressional democrats have made headway breaking the stalemate on president biden's economic agenda by trimming parts of the multitrillion dollar tax and spending package. progress came after the president met with various lawmakers yesterday. expect target cuts include community college in a shortening of a funded child tax credit extension. car prices in china have fallen for the first time in six years. data shows new homes cost slightly less in september than in august. market value declined 1.9%. developers including evergrande are funneling to raise money. netflix has posted its strongest subscriber growth for the year,

a beating estimates thanks to the popularity of the south korean drama "queen game." -- "squid game." they expect 8 million more in the current quarter. facebook is planning to rebrand with a new name that focuses on the meta-verse. the original facebook app may remain unchanged. a similar google structure with alphabet. 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. i'm leigh-ann gerrans. this is bloomberg. ♪

>> we have got to figure out how

to get our fiscal house in order. you don't get to just borrow unlimited amounts of money. except for government. if you care about medicare, if you care about social security, we have to look just live within our means. jonathan: republican senator rick scott from florida. from new york city this morning, good morning. your equity markets totally unchanged after five days of gains. in that the bond market where yields are going nowhere. down almost to basis point. slightly weaker euro and euro-dollar negative. crude back with an 82 handle down about $.90 on the data. we are negative. tom: what do you make of the real yield coming in? we have a lesser negative number , make it .93. jonathan: it's more than

inflation move from reels to breakevens, it's gone through domestic to global. we will catch up later on that this morning. this is the warm-up. tom: i will be in the surveillance map. this is importance. i'm keeping track of the voting these people in the last election and i'm really starting to look at redistricting with a major shot at a political report that's beginning to percolate. rick scott of florida won with 50.06% of the vote, he barely one and that colors every comment he makes. joining us -- is president biden talking to democrats and republicans who won with 50.06% of the vote? >> he's really talking to

democrats. he had two big meetings to really try and bridge this divide of both wings of his party, progressives and the conservative, more moderate to the party to push through the economic agenda which the democrats feel is necessary. when you talk about the senators who are winning with just a little bit of a majority in some of these hard states. they feel that they need this to be able to deliver before the midterms. tom: we've been guilty of guessing what will come down to. can you say 1.7 5 trillion is locked in or is that still a number in progress? >> 1.75 to 1.79, it sounds like it will be a smidge under church road -- under $2 trillion. i imagine the president is trying to get him up a little bit there. to try and get there to meet the

progressives a little bit. this is where you are seeing the president, which the representative called the closer, moderator in chief, he is trying to do this very delegate dance. how you get the progressives to stay on board and even senators like chris murphy want to make sure there is a substantial and robust climate plan for them to sign up, make sure they are able to stay on board while making the package tolerable to those senators like joe manchin and kyrsten sinema and they have to do this because they only have rager -- razor thin majorities. lisa: what we learned of the programs that have already been cut? >> it sounds like the community college will fall by the wayside and that's getting caught. they say medicare is in their but potentially that gets slimmed down. it needs to be in there because you also have senator sanders,

every single senator has to vote for this. there needs to be a checkbox for all of them. then you have things like the child tax credit. that is very attractive to many americans but democrats think of doing to save some of that money is only go out a year on that instead of till 2025. that will cost about 100 billion dollars instead of north of $500 billion. you can see where they make these slimmed down the package. lisa: we talk about how bipartisan the appeals are that are getting done and the fact increasingly we are looking at a very polarized washington. however there are some plans agreed upon by democrats and republicans that are just hanging out there waiting for the political year to die. the chip supply shortage and some of the plans passed by the senate to address that. is that all dead in the water until the stalemate on infrastructure spending is completed? >> this is a question of whether or not hard infrastructure, of the package were talking about

the past through the senate can get a house vote if the framework, which senator joe manchin called a meeting of the minds, framework on reconciliation met will also meeting yesterday as he said the democrats i need to go internationally to the g20 in rome and to the talks in scotland with something in hand to show we can govern and deliver especially on my climate pledges. some of those climate pledges are in that hard infrastructure. so potentially if there is a least a framework that could be agreed upon in good faith in the progressives and more moderates of the poor and potentially get our work on october 31 we do not know yet if -- yet. tom: who is on the couch today in the oval office? >> the president is traveling. he will be in his hometown of scranton.

he's going to talk about his agenda. it's the first time he's going back to his hometown since he was inaugurated as president. potentially if there's time between his trip i imagine on the couch would be kyrsten sinema from arizona or senator joe manchin from west virginia. jonathan: a little bit of progress, we can call it that. >> progress, but there's more to be done. what are they going to do about the salt deduction? we don't know yet what's happening with that as well as on the irs. jonathan: let's call it a baby step. amh down in d.c.. i'm just trying to come up with a show for it. can you imagine that. mid day, i don't know. going to get in trouble for promoting a show that doesn't exist. tom: that's what we say about

this show. jonathan: i'm going to ask for what tom had for my booster. tom: lisa went -- we were a little short on press echo because the nurses all drank it. jonathan: i'll have what tom is having. lisa: he was enthused after getting protected even further. tom: to everybody. and you've been through this with all the travel you did. we are on the cusp with that important announcement you said sadie where it's let's hit the road -- you said in new york city. jonathan: we get deeper into winter. cases are picking up. futures unchanged on the s&p. five days of gains. there's been a lift recently.

we are just 15, 20 points away from all-time highs in america despite all the gloomy talk out there. on radio nt, this is bloomberg surveillance. ♪

jonathan: five days of gains on the s&p 500. in the state of play we go nowhere this wednesday morning. the nasdaq slightly negative on small caps. this is a start in the equity markets. treasuries, shaping up as follows. a little bit quieter. we had a bit of pushback over the last 24 hours. both sides of the atlantic. tom: when did that happen? jonathan: yesterday. that yield has doubled since september 22 not just south of that level. chairman powell speaks on friday. i wanted to finish off this, switch the boarding get to the

euro. -64 basis points on the two-year. we need to talk about the resignation of the president of the bundesbank. for me, this all started in 2011 with axel -- when axel quit. from that point onwards this bank lost its bite in a big way. they may have made a lot of noise about what the ecb should do. the fact is ecb policy is where it is because he didn't have the influence that some people in germany might've wanted him to. tom: this is important. long ago i looked at the tv screen and said what is that in front of the ecb building. it was someone named jonathan ferro. a dramatic central bank taking out by who was chairman with a massive french education. from where you sit in your decade of watching the ecb, how

cultural is this? jonathan: there's been a massive shift. in early 2011, the then chair of the bundesbank was a leading candidate to take over the ecb. there were some -- there was a real pushback that started to build up. he resigned, it was unexpected. the idea being that the president spot was open for someone and then all of a sudden you introduce president draghi and from that point to totally changed and the ecb was no longer just a reflection of the bundesbank, became something much bigger. it went way past that and here we are today. tom: research of deutsche bank led by david, of the originality of negative interest rates. let's dive into this right now. julia coronado, she is truly an

academic of the fed working in market economics with the knowledge of -- as well. would you suspect he left because of the transition to something new for the republic of germany? >> yes. that was a very important inflection point to the euro zone and the appointment of mario draghi as jonathan said, it changed everything. i remember very well the existential moments we were in at that time. i was working for european bank and we actually had a repeated series of existential moments and he turned out to be the glue that held it all together. her actions -- in addition to angela merkel. there was a very important transition away from the bundesbank driven ecb towards

something more flexible that had a view and a vision to holding the euro zone together. tom: you are absolutely right about gdp within that era. the reality for germany is massive trade surplus, only china and germany. and yet a domestic economy flat on its back. does the new bundesbank president have to say let's get this domestic economy going or do they not care? >> i think to some extent they need to say that. we do still need demand driver in the euro zone, although i think it's not quite as dire as where we were before. the euro zone has weathered the crisis reasonably well. it's in a pretty decent

position, but i think germany is in the same position it's always been in a really key economy for the euro zone, and need to help drive demand for the region. >> the idea one of the loan hawks on the ecb on the issue we see more broadly for central banks which is pressure really is does not make a move, to not raise rates to soon. the market in the united states is pricing in two rate hikes by the end of next year. what do you think it will take for the fed to get to that place given the pressure towards easy money policy. >> i think the main scenario that has to develop for the fed to move to rate hikes that steadily would be that most of this inflation does turn out to be demand driven, that it really is reflective of a hot economy, a tight labor market generating strong wage gain, that the hawks

are right about the labor supply not coming back and that you really have these demand driven inflation pressures that are building and broadening. that's the only scenario in which rate hikes makes sense as a solution to the problem. if instead most of this inflation or significant portion of it is tied to chip shortages and supply chain bottlenecks that get resolved over time, the fed rates wouldn't do anything to fix that and would actually harm the broader recovery. it's going to be really difficult. luckily the fed has some time for tapering schedule that's probably not going to deviate. and then we will see where we are by then. i think companies earning reports will be really important bellwether indication of how companies are navigating them

because let's not forget one of the things that's been -- one of the narratives here is the company has been navigating these challenges surprisingly well. all the incentives are aligned to do so. we've been in a highly productive economy despite these frictions and challenges. do these problems get solved and we hum into 2022. lisa: in that scenario, do you see the fed staying on hold because everything's coming along. what is the tipping point in terms of 10 year yields? if we keep coming along in the fed remains easy, the expectation for the yield to rise, at one point -- at what point is it unsustainable? >> i think we are far from those levels. the last recovery we discovered through the ebbs and flows of yields and 3% was the magic

yield on the 10 year that really started to hurt the economy, that really started to hurt the investors. that might be lower now, it might be higher now, but we are certainly far from there. we could probably see, especially if this rosier scenario turns out to be the right one, yields can rise and it's just fine for the economy. they are designed to naturally cool things off, like housing. tom: should we pay attention to atlanta gdp now? do you find value in the vector of atlanta gdp lower or even a sub 1% number? >> i do pay attention. they are not always right but

they have a very careful methodology that i understand. we are actually tracking 1.5%. they are lower now. tom: i don't mean to interrupt because of time i have to. if we have 2% gdp, does that constrain the fed in tapering and rate hikes? >> the problem with the number is it's all autos and it's all about the semiconductor shortage. so auto sales have plunged not because of lack of demand but of lack of supply. inventories are down. this is also constraining the construction center -- construction sector. tom: what's the real gdp number if it is car adjusted? >> i don't do that myself pretty gdp but you can look at that number once the gdp number comes out and it will be substantially higher. we have seen retail sales be

resilient. we've seen other service set -- service sectors remain resilient. the consumer is pretty resilient. the demand is pretty strong. i think it will be a healthy above trend gain. we expect the beginnings of higher production in q4 to produce another decent number. so we will see. timing these resolutions, especially in semi's can then maddeningly be difficult. every time we get production ramping up, covid comes back up, another factory shuts down in the whole thing hits the brakes again. so we are just watching day by day have things evolve on that run.

magnesium might be another bottleneck. we will see how this is -- how this evolves. 20/20 was all about how resilient -- surprisingly resilient the economy was. now it's about how un-resilient the supply chains are. covid, knock on wood we are heading in the right direction. hopefully the economy can move forward and those wheels can spin. jonathan: thank you, julia. just wonderful. last year in the depths of all of this without the fed would be hiking for a long time. tom: to me it's a swirl right now. magnesium on rotterdam. up 335% in the last year.

only we do that. jonathan: five-day winning streak on the s&p. negative today. this is bloomberg. >> with the first word news, i'm leigh-ann gerrans. new york city will require its municipal workforce to get vaccinated against covid-19, getting rid of the option for testing according to dow jones. they are set to announce in order that says 46,000 workers need to get their first shot by the 29th or risk losing their jobs. a bipartisan push to make the u.s. more competitive with china and bolster domestic chip production risks falling by the wayside as congress faces its packed agenda. it includes funding to

strengthen the u.s. semiconductor industry. it marks where cooperation between aggressors and conservatives. it could worsen the chip shortage. singapore's warning covid-19 cases are dangerously testing the city health care. the ministry of health says new daily cases hit nearly 4000 yesterday. health officials say the number of global requiring a straining the hospitals. 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. i'm leigh-ann gerrans. this is bloomberg. ♪

>> assuming he gets approval we will be ready to provide it than

the one we are using, it's using one third of the mrna. we will be able to provide that. jonathan: the pfizer chairman and ceo. good morning. your equity market with a lift over the last five days. slightly negative this morning. a flat market. in bond market, yields going nowhere. in the fx market, euro-dollar going nowhere. in the commodity market we go somewhere with -1% on crude. that's the price action. mayor bill de blasio saying there will be a vaccine mandate for new york city's workforce without a testing option. city employees get $500 incentive check for the first dose. that news dropping in the last couple of minutes. tom: in the 70's there was an

argument around nmr and the answer was it's not a big deal, people don't die. but actually they do die of measles. in the 90's we took out something like 70% of the deaths from measles. now we are having a debate over when we get vaccinated with those really critical headlines we drive this conversation forward. what took so long? to a lot of people, granted their people who are not so much anti-seiden's -- antiscience. but of the pro-vaccine crew, all of this should have happened 12 or 15 months ago. why did it take so long? >> politics and misinformation. we provide -- the public was confused as to what is the right choice here.

vaccines save lives. everybody should take them. tom: we didn't have this debate with mmr, we did have some tension but nothing like now. is it because of culture wars, social media? why did we do this? >> i think it is due to social media. there's a lot of information around there. every decision which leads to more noise. with mmr it was simple. it prevents illness, take the vaccine. that's all that was said. now the modern consumer is looking at how was this developed, how does the approval compare. what is this technology. i don't think half of us knew what an mrna vaccine meant. lisa: we are no longer talking about get to herd immunity, we are talking about a time when we

see fewer hospitalizations and many fewer deaths. over in the united kingdom we are seeing the number of hospitalizations and deaths pick back up despite a high level of vaccination. what's the latest school of thought in terms of the threshold of total population inoculated to get to that place. >> the concept of herd immunity is that it's a zero-sum game. that we get everybody vaccinated and the virus goes away. the truth is we still get through breakthrough cases. in the u.k. we believe the new peak is being driven but the lack of vaccination in children ages 12 to 15 and school are getting exposed. lisa: what's the latest on getting those individuals vaccinated.

we heard from the pfizer ceo they are ready to go. the fda has basically all but approved this. what are we waiting for? >> october 26, the day to for the advisory board company the cdc study shows 93% effective at getting -- keeping children out of hospitals which is phenomenal. there's lots of parents who are excited and the fda will approve. the rollout will be easy. tom: are deaths correlated with cases. do you see a slope that is good news for deaths in america? >> i do. i see the deaths are petering off. one of the challenges we are now seeing in the health system is the lack of a workforce. this seems to be a shortage crisis around the country and

were not worried what that does hospitalize due to covid but due to other medical positions. there's a human resource crisis happening complicating the picture but we do see that. jonathan: thank you, great to catch up with you. we do have to be careful with things like vaccine mandate. it's fully clear and some of the data that minority groups have been more reluctant to get a vaccine. they've been vaccine hesitant because they have legitimate mistrust that's been built up over time. that's not a story unique to america. if you start to go forward with these without making sure there's been sufficient outreach, there is a risk they get ostracized from society. in restaurants in new york city, from the workforce in new york city. these are big issues. tom: unlike most pandemics, this was almost too successful.

we brought on the successful vaccines at light speed and to your point we did not have the time to get the public ready for vaccination. i've emphasized that we completely failed in a celebrity buy-in. you take two people from the super bowl or you take two people from the premier league and you show -- jonathan: i don't think that gets it done. we are talking about a mistrust of government amongst minority communities and there are legitimate reasons for it and we are talking what a mistrust of government from people who just so happen to vote for the former president donald trump. in this country it's where the focus was. it was upper-middle-class hippies on the west coast in california who did not want to touch vaccines. that was several years before all of this happened. did they go out and get a

vaccine? tom: that's different. jonathan: but they dominated the boards on facebook. it's been a story for a long time. lisa: you raise an interesting point which is what's the best way to bring people into the fold. do you allow them to have a choice to not get vaccinated, do you keep tightening the screws of the social dynamic to get them into the workforce as well as vaccinated or do you say you either get vaccinated and stay in the workforce or get out and let the chips fall where a day may -- where they may? what is the question with respect to the tightening of the screws while also enlisting people to say we want you. jonathan: it's worthy of a bigger conversation. your equity market unchanged on the s&p 500. investment director at aberdeen asset management. from new york city this morning, we go nowhere in the bond market.

15, 20 points away from all-time highs in america despite all of the doom and gloom about what the future might hold. this is bloomberg. ♪

♪ >> the idea that is obviously wearing thin. >> the is saying from a monetary policy standpoint, this is just a matter of patients. >> the fed can't really meaningfully do anything by raising rates. >> markets are not comfortable with the idea that central banks will be dovish. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: is the slow grind act towards all-time highs. from new york city, for our audience worldwide, good morning. this is "bloomberg surveillance ," live on tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. your equity market totally unchanged on the s&p after five days of gains. we are almost there. tom: jacob kirkegaard this hour, the interview of the day. i'm looking at the earnings come in.