♪ >> inflation transitory -- is inclusion transitory? our house view is it is going to mon -- it is going to moderate. >> the consumer is pretty resilient. the demand is pretty strong. >> we are counting on grocery accelerating a little bit. -- on growth re-accelerating a little bit. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: just pulling back from all-time highs. good morning. this is "bloomberg surveillance ," live on tv and radio. your equity markets after by 13, down 0.3%. this run has been pretty tidy. we've had a series of execution after execution in earnings season. does it validate where we are priced or inspire further gains? tom: against the gloom crew, it

has been a tidy set of days. i would suggest the news flow this morning incredibly nuanced around the waiting for earnings season. jonathan: we are waiting for a few more earnings later this week. we have been doing this in the face of conversations about higher rates, slower china. if you told me in august that some timber would not develop into the september we hoped it would be, that supply chain issues would start to heal, that did not happen. maybe it is next september. here we are staring down the barrel of all-time highs again. i would not have guessed that in the summer. tom: i am afraid to go back and look at the tapes of how many people not so much were wrong, but just missed to the enthusiasm for a wall of money to bid the market up, particularly the way you went on bitcoin. jonathan: we said it. september was this big month that if we didn't get some

healing, we would have trouble in this market. the fact is we are backup there near all-time highs lisa: we shift back to a month where it is not just about the new normal, but what is the new normal? unilever increase prices and were able to pass it. they also say we have not seen the peak of price increases. how do we price that in? how is that received by a market that is wary of inflation? jonathan: do we achieve that for percent gdp profile that some economists are looking for? that is the additional part of this conversation we've got to have. this morning, equities are softer. we are down 12 on the s&p , coming in 0.3%. in the bond market, 12 basis points short of the high of the year on the u.s. 10 year. tom: the linkage of bonds and equities, i am not sure what to make of it. i think we are just waiting for fed flow and earnings flow of

information. jonathan: one central bank is going the other way. i'm just going to bring that up very to a weekly -- very quickly. we dropped the rate in turkey by 200 basis points. not a 100 basis point cut that was expected, but 200 basis points, 2%. what do you think is going on with the turkish lira? weaker, weaker, weaker. lisa: and it was weaker heading into this, as people expected central banker erdogan to come to the rescue. a very unorthodox monetary policy. what will change the narrative potentially is some sign of whether this u.s. labor market is tight or whether it is loose. whether there is capacity for people to come back in. the 8:30 am u.s. initial jobless claims come out every thursday. the expectation is for it to remain pretty range bound around the lowest levels since the beginning of the pandemic. why is it still so high? why are we not going lower at a

time when we see so many openings, especially as companies try to staff up ahead of the holidays? we will hear from gary gensler. i want to hear what he has to say about assets as crypto posts a 30% gain just this month. it heads to a new record high after the advent of the trading etf that focuses on bitcoin futures. at 10 a clock a.m., u.s. september existing home sales. when we talk about inflation and consumers'a pp -- and consumer'' appetite to buy, this is what we are talking about it. if you are an entry-level buyer, but can you afford to get? this is going to bleed out into more and more products as we see those inflationary pressures continue to build. jonathan: higher prices starting to hurt demand. thank you.

here's the story for the turkish lira. weaker, weaker. dollar trying a record high. your turkish lira weaker against the u.s. dollar by 2% and change. we were looking for a 100 basis point cut. the turkish president maybe wanted a 200 basis point cut. i am going to talk about execution in the stock market. these two names right here, goldman and unilever. goldman, you talked about the upgrade to the price target at citi. right now just a little bit softer. on unilever, rally and by more than 2%. prices up 4.1%. the biggest price hike for the third quarter going back to 2012, and the tolerance is there. that is the important piece of this. tom: for americans on radio and tv, unilever's massive multiproduct lens has been focused on how to get scale in products. of the zillion products they

have, they are always managing for profitability, and they have really set the playbook of how you do that in consumer goods. jonathan: i am willing to pay more for ice cream, tom. i am. i will cut back elsewhere. tom: i will see you in birkenstocks up in vermont. jonathan: i will cut back elsewhere. steve chiavarone is with us now, portfolio manager at federated her mess -- at federated hermes. the difference between the companies, what is your take on that now? steve: this is the story. it is hard to

i think inflation is very much not transitory, and i think it is going to be persistent. right now, so far through the earnings season, it has been pretty good. what we are looking for is how do the margins hold up, and at a stock level, you relayed to focus on companies that have pricing power. if it starts eating away at your margin, i think you expect to get punished. we are sifting out the winners and losers right now. tom: steve authers, this speaks to the rest of you guys saying you have got to be in the market. speak now to our audiences who are saying i am scared stiff, i can't participate. steve: first, it has been an honor to grow under steve. i think he's terrific. but to that point, you've got to look in the market and say where is the opportunity. if we are in an inflationary environment, if that is a bigger

impact in the environment, the question isn't do i cut bait and run. the question is which parts of the market, which trades do i put in place. will that allow my portfolio to benefit from that trend, or at least get hurt the least? that shorter duration fixed income, something in the zero to three range, not as longer-term, needs a little bit more high-yield come we've got shorter duration and more spread tightening capabilities. it means equity dividend stocks to supplement your income because you are getting a higher yield that is a little more inflation durable. it means value cyclicals right now. these companies can pass those prices along. i think the last one is there's select opportunities in international, and our view in the international and midsize space. if you are not of the market, you won't get that comp, but you've got to look for the areas that are most advantaged. that is what we're are doing across our portfolios. lisa: at what point do higher

inflationary reads we get on a repeated basis, the idea that it is perhaps not transitory, start to lead to higher yields that put a crimp in equity returns? steve: it is a great question. i think it depends on what kind of equities you are talking about. i think you are going to see some of the growth names underperform sooner because when you buy a growth company, you are buying it for the earnings out five or 10 years from now. that can get inflated away. if i am buying a value cyclical, i am buying that because i think it is not going to get inflated away. i think that is the nuance there. but we do have to watch. yields they get too high hurt multiples, and that could happen next year. tom: what you just heard is textbook. where growth is the longer-term x-axis and value is the shorter-term view. did i hear earlier on bonds, the triple leveraged all-cash fund? jonathan: i'm not sure. is that what you were saying? steve: that is fake news.

i'm calling you out there. [laughter] jonathan: always good to catch up. ask very much. tom, that is the difficult part of this. i know a lot of people come on this program and it is the time for active management. but when you go through earnings season, if you miss, you get punished. if you are winning right now, it just validates where you have been. this is about choice, picking and execution. tom: it is about time frame as well. i am as guilty as anyone, as our basic time frames is six months is long-term, and that is baloney. you've got to look at growth where three years is short-term. who's got the curves to do that in the turmoil we are in right now? jonathan: mike wilson of morgan stanley pointed something out to me last week, along the lines of saying it is easier to forecast five to seven years than it is to say next year.

next year specifically is really difficult to call. lisa: one of the key aspects of this is that inflation could potentially dampen demand, especially if you get this fiscal cliff. in the meantime, everyone who comes on the show talks about looking at companies that have pricing power, so what does that mean we have price for those companies? jonathan: we are passing it on to the consumer, and so far they are eating it up if it is ice cream. i think everyone is on board with that. pay a little bit more for the ice cream. that's my view. i like pistachio. i like strawberries and cream. tom: i am going to tear up. jonathan: you can get a nice olive oil ice cream. bear with me on that. over in brooklyn. tom: what? lisa: i've had that before. it is actually quite good. jonathan: i will take you down there, ok? tom: i've got to go below 59th street? jonathan: have you ever been to brooklyn? tom: no. jonathan: i have.

tom: olive oil ice cream? my mother's favorite was pistachio. jonathan: make it happen. from new york city, this is bloomberg. ♪ leigh-ann: with the first word news, i'm leigh-ann gerrans. the u.k. and new zealand have agreed to a trade deal which includes improved business travel arraignments and reduced tariffs on clothing, buses, ships, and bulldozers. government research last year estimated such a deal would have no long-term impact on the british economy. former president donald trump has announced a deal that would enable him to regain his social media presence after he was kicked off both twitter and facebook. a press release says trump plans to start a social media company called truth social. if all goes according to plan, it would be up and running ahead of 2022 midterm elections.

china's evergrande group scrapped plans to offload a stake in its property management arm, and real estate sales plunged about 90% during peak home buying season. that is worsening the liquidity crisis on the eve of a dollar bond deadline. in statements yesterday, evergrande added it has made no further progress on asset sales and may not be able to meet financial obligations. 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. ♪

>> it is a supply-side shock that the fed can't do much about.

but i think we should know that there is a demand-side story here. from the fed side, what they can do is maintain credibility for defending their 2% target. jonathan: deutsche bank looking for a hike next year. that was matthew lose eddie -- matthew luzzetti, the chief economist at deutsche bank. a six-day winning streak, just a bit softer this thursday. in the bond market, yields unchanged, one point sykes 551% -- 1.6551%. a holland weaker on the turkish lira. that central bank cutting 200 basis points this morning. we were looking for about 100 basis points. this from pantheon macro economics. "olive oil ice cream may be in brooklyn, but we are not

convinced. " another time? tom: another time. we like to talk about positive things. very ugly, i think this is important. at&t reports $.55 on the dollar on wireless ebita margin. the stock is going to be an mba case study. jonathan: you mentioned ibm earlier. can you believe they missed out on pretty much the whole bull market the last 10 years? that stock is down about 30%. i am always scratching my head, how can it be that we are talking about a cloud business and an all-tim -- and an all-time retailer and we are not talking about the dominance of ibm and cloud? tom: i'm humbled by this because

i am what is called a kodak brat. i so what you see in ibm now and others. i witnessed it personally long ago in rochester, new york. humility is in order. you wonder where that has been. jonathan: this is really tough. i just always scratch my head. i know they are trying to get it done with the red hat acquisition over the last few years. tom: with ibm, it is sporting. but with at&t, you really wonder some of the decisions along the way. our good decision right now is to have annmarie hordern join us, bloomberg washington correspondent. it is just simple given the last 24 hour news flow of a 4.7 statistic. what is the president's agenda today involving these two pieces

of legislation? annmarie: likely, he will be working the phones to try to get this over the finish line. this is his way to try to sell his agenda yet again on the heels of yesterday to the american public. but something has changed. yesterday we thought we were a step forward. even if jonathan called it a baby step forward. today i feel like we are taking a big step back. it is about what we can skim and sacrifice to get this bill over the line. today it is about ground zero yet again about how they are going to pay for it. tom: just goes to john micklethwait's begin with the prime minister the other day. you've got to get in front of the camera. from where you sit, is it a town meeting appropriate, or does he have to give more interviews? jonathan: politico came out with a piece, and the numbers speak for themselves. at this point, president trump

had purchased baited and 57 interviews. this president has purchased baited in 10 -- has participated in 10. speaker pelosi came out in the last couple of weeks and said reporters need to do a better job of selling this bill. do we need to hear more from the president? annmarie: it is not reporters' job to sell this bill, first and foremost. it is their job. i've been to two speeches where he has taken reporter questions ad hoc, not off of a list of today we get three or four questions to these different news presses. there's a lot of criticism about the administration not sitting down with media companies, with television. i believe he has not done a single in-depth print interview, so all those that he has done is in the form of television, the medium of choice. of course, we would always welcome the president of the united states on bloomberg television. [laughter] lisa: thank you for that

outreach and the open invitation to the president. i am sure he is watching and will respond shortly. there is an issue, part of the problem for him is who is his party. there is the identity crisis at the heart of the party, especially as we head into these virginia elections, the idea of these purple states increasingly as more citydwellers move to less blue places. what does that due to the nature of the democratic party? is this still considered the same wing of politics? annmarie: just like the republicans, he is dealing with a very wide gap of the wings of the party. a very progressive left, a way more centrist right of the party . yesterday, a report that senator joe manchin is talking to people about what he deems necessary to get this bill over, coming down to 1.7 trillion dollars. he said he would actually

consider switching to be a republican. we have heard this before, and that is probably not likely, and senator manchin had very choice words for that, basically calling it nonsense. but the fact is the president is trying to bridge that gap. i like that you mentioned the virginia elections because senator mark warner of virginia says, can we at least get hard and for structure out? virginia politics is so close to what is going on in the capitol. what happens here, that is their local press. it is the mood music coming from washington that could potentially hurt them on november 2. jonathan: thank you. we will catch up with you a little bit later. some interesting downgrades out there. this from rbc, i double downgrade, adding that china's economic rebalancing away from fixed asset investment hits at the core of the profitability driver, iron ore. that is a shift, i double downgrade going from outperform to underperform with a click of

the fingers. tom: credit suisse with the nuance here. they stay with outperform on ibm . they lower the price target from $176 to 172 dollars. can you motto out a year on four dollars at $176? jonathan: i would like to model out with some degree of accuracy. tom: how do you model january? jonathan: i can't get to november at the moment. that is a couple of weeks away. lisa: this idea that all of the commodities have been in demand, a policy decision by china shuts that off. this is a big change. jonathan: right now, futures down 11 on the s&p 500. just a little bit softer. initial jobless claims coming out in an hour and five minutes. whatever your view on things, what the fed should do, shouldn't do, whatever, we

all want to see claims with good news. from new york city this morning, good moring. heard on radio, seen on tv, this is bloomberg. 's ♪ -- this is bloomberg. ♪

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jonathan: the longest since july for the equity market, and we come back a little bit on the s&p 500, down by about 0.25%. yesterday, five points short of all-time highs on the s&p 500. we were around 4540 just for a bit. that's the equity market. at the index level. let's get to the stock level story. we can talk about one word specifically we have talked about all morning so far. excuse and -- execution. execution at tesla, even with the supply-side issues. execution at unilever. that stock is up by 2.3% after hiking prices 4.1%, the most

since 2012, and doing ok. pass again onto the consumer, and the tolerance is there. goldman, that was the theme last week. executing. the rest of the street too, but they knocked it out of the park. citi with a price upgrade. tom: the beginning of earnings season, it will be interesting to see what david wilson reports, and also gina martin adams of bloomberg intelligence as well. this is arguably the conversation of the day on what so many of our themes are. he is the chief global economist at morgan stanley. seth carpenter joins us this morning. one of the great themes of the global goals -- the global bulls is asia to the rescue. not so much china the rescue, but a broader pacific rim. with all of your research, all of the work that stephen roach set up for your

shop, can it be asia to the growth rescue? seth: i think there are two parts to that question. i think you highlighted the difference between china specifically versus asia more generally. we are not looking for china to be the engine that pulls the global economy forward. we are looking for about 5.5% growth next year. we think the slowdown that has happened and that happened in q3 is very real, but overstates where we are going. some recovery there, but only moderate growth next year. the way in which it could well be asia to the rescue is the other key story people are talking about, which is supply chain disruption. so much of what we are looking for, especially when using about semiconductors, coming from asia. tower semiconductor analysts are being very attentive to looking for how that flow of semiconductors is going to go, and the rest of the global supply chain is key for the recovery next year.

tom: let's get out front for your monday note. stay with me here. your advantage is your analysts on semiconductors analysis. what do they say about the duration of a supply shock slowdown? seth: i think that is the hardest part two answer here. we are looking for gradual over the next three and six months continued normalization and supply chains. it seems clear that the auto industry is in a bit of a tougher situation than semi supply overall, but we do think it is going to take some time. we are guardedly hopeful things are going to go in a normalizing direction. lisa: in the meantime, you said the role of demand is underappreciated, that consumer spending has hung in there, and we have seen company after company show that they can pass along price increases to consumers. how long can that continue with the idea that price inflation continues to exceed

wage inflation? seth: that is a key consideration. demand has clearly been strong. if we look at the components of consumer spending, consumer spending on goods is still higher in a relative sense than it normally is, so we are looking for that over the next three to six months to come back in and have a little bit easier demand there, but there has been surprising strength for consumers. wage inflation has not kept up with inflation, so as a result, normally we would think that would be bad for consumer spending. we do in the current circumstances have a bit of a cushion of excess savings from all of the fiscal transfers we had earlier this year and last year. for the middle and lower end of income distribution, those are getting depleted over time, so it can't be the crunch forever, but we are looking for that shift in consumer spending away from goods, back towards services. we are looking for supply chains to ease over time, so the consumer should be able to hang

in there and stay reasonably strong. lisa: there's a psychological aspect i have seen highlighted by fed researchers, that people are more willing to spend money that they make from their paycheck then from their savings if they don't have a clear sign their paycheck is going to rise at the same pace as inflation. how much do you factor that into your equation as we look at a world where that savings rate is not being depleted as quickly as people thought? seth: absolutely. when the government transfers kicked in and we saw reported income jump straight up, that savings rate jump up very dramatically, there were a range of estimates on the street as to how much of that excess savings was going to turn into consumption at some point. some folks were saying that all of that money that has accumulated in bank accounts and other places is just going to soon or later flow into the economy and turn into demand for goods. we took a much more conservative view and assumed that only about 10% remaining is going to turn

into consumption spending. you always see consumers spend less out of wealth than they do out of current income spending, whereas spending out of wealth is much smaller. tom: how have you nuanced the mystery, the glide path of 2022? ellens and has been way out -- alan zentner -- ellen zentner has been way out front on this. seth: what of the keys about 2022 and whether it is going to be a smooth transition or not is the debate about the role of fiscal policy. we had a huge drop in income. most of the fiscal policy was shoring up that income. from my perspective, anyone who is looking for this massive fiscal cliff, if you are just looking at the change in the

deficit from one year to the next, i think that is the wrong analysis in current circumstances. there is income replacement that kept the consumer on track. excess saving could buffer to some degree any fall in income. the fall off in fiscal stimulus right now is not going to lead to a cliff because it didn't lead to anywhere near as much as a -- near as much of a boost as we thought. that is why we saw the saving rate go up, because consumers are moving through it. if they smooth through with this year, it is going to smooth through it next year when the impetus goes away. tom: do you model in a fiscal drag, either with the present legislation in america, for germany and continental europe, and particularly for the u.k.? seth: i think when we are looking at europe in particular, there is still a question about what is going to happen with the coalition there, how much easing there is going to be, and for the rest of onto and into europe, there is the recovery fund. how much stimulus there is going to be coming out of that. super difficult to know,

modeling those multipliers is hard, but we are fairly constructive about what is going on next year in europe. the u.k. is a challenging area because of course, they've got higher inflation. they've got labor shortages. the united states does to some extent coming out of covid, but those are exacerbated by labor shortages, see you are seeing everything play out any much more acute way. we heard governor bailey over the weekend coming in fairly strong, fairly hawkishly about the need for monetary policy to react to inflation expectations. so i would put the u.k. in a different bucket in that regards, where there's going to be much stronger headwinds. but labor demand has held up. that is one of the reasons why they are worried about inflation expectations. so it doesn't have to be a disaster story. it is just a bit of a tougher road. lisa: related to the idea of labor demand holding in their, we are about to get in 50 minutes the latest u.s. jobless

filings. why is it still so high, i'll be the lowest -- so high, albeit the lowest of the pandemic? seth: a record number of job openings, but we had an awful shock. when i think about typical cyclical behavior for the labor market, the economy goes down, and then it just takes a long time for the labor market to fully heal. i think people are trying to figure out what is the right role for me in the economy over time. but we do see the employment to population ratio rising fairly steadily since the worst of the covid stock. we see labor force participation continuing to rise. i think much more important than this week's unemployment insurance claim number is going to be the upcoming jobs report and subsequent ones, where we get to understand after schools have been in session, how many months does it take for parents to come back into the labor market? as covid mortality and

hospitalizations fall, how many people come back into the labor market as the fear of covid starts to wane? the fda is talking about approving covid vaccinations for kids five to 12 years old. when those children are vaccinated, how many more parents are willing to come back into the labor market? i think that past for labor supply over the next six, nine months is going to be key to understanding the evolution of the u.s. economy. jonathan: wonderful to catch up, as always. the chief economist at morgan stanley, seth carpenter. the central bank of erdogan cuts rates again at the lira's expense. here's dollar lira now. i'll are trying all-time highs. that is all-time weakness for the turkish lira. dollar-lira, 9.42. tom: for global wall street, this is real straightforward. on a standard deviation basis, dollar lira is weak.

lira out to three standard deviations. we just touched that for a cup of coffee. the trend here is incredibly elegant. the chart is literally teach a course, we clara -- a course, week lira. mathematically, this is an incredibly persistent trend with an inertial force. the number one thing i would say is in all the time in istanbul, it is two fixed income markets. how does dollar dominated adapt? how does lira denominated adapt? jonathan: what do you think they call the recent increase in inflation over in turkey? lisa: transitory. [laughter] jonathan: i will bring you the commentary from that central bank a little bit later. inflation is running at close to 20% in turkey. a very different conversation. from new york city, on radio, on

tv, this is bloomberg. ♪ leigh-ann: with the first word news, i'm leigh-ann gerrans. south korea has successfully launched a home developed rocket. the 200 ton liquid fuel rocket lifted off from the country's southern coast, then released a satellite into orbit. south korea sees the rocket program as bolstering its competitiveness in next-generation 6g communications, while neighboring north korea adds to its missile arsenal. and he has given out one billion doses of covid vaccines, but while 51% of the entire population has received at least one shot, only 21% are fully vaccinated with two doses. that could mean more outbreaks in the country that earlier this year experienced one of the world's most of us stating virus waves. in england, the government has been accused of being willfully negligent by not implementing its plan b to tackle rising

coronavirus cases. the british medical association says measures are needed to avoid further pressure on health services. the government wanted to avoid bringing back tougher measures, concerned that daily cases could rise above 200,000. he also warned people to get vaccinated. chip shortages and supply chain disruptions will continue to cap truck making, forcing the company to turn away some customers. the company reported a third-quarter operating profit of $1 billion, beating the average analyst estimate. 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. ♪

>> companies' earning reports

are going to be a really important bellwether indication of how companies are navigating this because let's not forget, one of the things, one of the narratives this year has been companies that are actually never getting these challenges surprisingly well and in a profitable way. all of the incentives are aligned for them to do so. jonathan: i thought julia coronado was absolutely fantastic, the founder and president of macropolicy perspectives. with tom keene and lisa abramowicz, i'm jonathan ferro. your market down 12 on the s&p, 0.3%. we are not doing much. yields up a basis point, 1.66%. 10 or 11 basis points short of the high of the year. lisa: we are looking at a really robust market, but earnings are really good, to julia coronado's point. the question is, what is priced in? jonathan: 84% beats so far on the s&p. so far, so good. tom: we will talk to the expert

any moment. we will talk hydrocarbons and then go over to electricity as well. david wilson on hydrocarbons. quickly, link in the oil rigs and all the rest of it. david: what it is saying is if you are richard bernstein advisors, there is underinvestment in the oil industry right now. he looked at this ratio. baker hughes provides a weekly count of u.s. oil and gas rigs that are operating. he compared that to the price of crude. when you go back and look at that, the latest reading, roughly 5.5 times for a ratio. look all the way to 2010. the average, more than 12. we are way down from where we have been. bernstein pointed out, this was all on twitter the other day, that you are seeing readings similar to what you saw in the 2000s, when energy was the best performer among the 11 main industry groups in the s&p 500. tom: in your reading right now,

is 100 the new 90? david: it is sure looking that way. you have much more of a focus on oil at this point. this was an unloved asset for a long time. now that it is rallying, it is definitely attracting more attention. tom: kevin tynan joins us with bloomberg intelligence. i want to dovetail this in. you had tesla with a really nice effort, but all of the buzz is on general motors. dan ives yesterday with wedbush making clear this is a technology company. kevin, you are hugely qualified on this. do you by the ev excellence of general motors? kevin: i do, yes. and i also buy it in companies like volkswagen and toyota, even though toyota has talked about hydrogen lot and has been slow to move in electrification. i think all of those global scale companies have the ability to do it.

just the profit dynamics haven't followed to this point, and they have just been slow to get involved in that way. tom: lisa abramowicz has the order in for the 2022 hummer h3 ev it-ish and one, priced in at $113,000. can they make an electric car for mere mortals instead of lisa? kevin: eventually, yes. tesla was a good indication of this yesterday. if you look at their average selling price, that was in the mid to upper 40's. so when you think about the way they started with six-figure vehicles, they have sort of moved all the way down to below $50,000. granted, a lot of that volume is going to be china. trans action prices are just lower than they are in the u.s., and the same for europe. but to be able to expand margins as transaction prices get lower and lower, the same thing will happen as global legacy

automakers start to scale production of electric vehicles. lisa: do they clear that hummer? that has to charge for three weeks to get you to the upper east side for one night. when you talk about that, tesla shown that actually, they can make it more profitable, with their margins going up pretty significantly. how much is this a seachange for the likes of general motors that is very much investing in this game? kevin: it is, but the other thing you have to think about is it is happening on internal combustion now also. some of the transaction and pricing data we are seeing any third-quarter is unbelievable. in the u.s., typically we average about 6.5% discount from msrp, meaning you could walk into any dealership and expect on a $43,000 vehicle about $2700 in haggle immediately, and the

dealer won't blink. in september, that number was $70. that discount was 0.1 5%. so basically, the consumer is paying sticker for vehicles across the board here. and there's no more cars. general motors' best selling car is the corvette. so transaction prices are going up. discounting is going away, and incentives are going away. i think the interesting thing coming out of this earnings period is how much of that sticks going forward, and if the industry changes to this flood of supply to a much better supply and demand balance. lisa: how long can tesla remain the leader here? kevin: until it is profitable for everybody else. the volkswagens and toyotas and general motors of the world have scale advantage, in that they are global in terms of design, engineering, production, distribution, finance, after

sales, all of those things. they are just not doing that in technology specifically yet because it hasn't been profitable, to the extent that their traditional drivetrain technology is profitable. jonathan: kevin tynan of bloomberg on some of these auto manufacturers. gm up 39% year to date. that is a good year so far for that company. tom: there's things you get. there's things you don't get. i miss brazil totally. i missed this. i didn't listen to kevin tynan. i didn't listen to dan ives. this is a new gm, and the engineer maryborough gets a lot of credit for this. -- engineer mary barra gets a lot of credit for this. jonathan: these guys get a lot of cover, tech firm, tech firm, tech firm. then out of a sudden, gm pops up in the last six months, and it is a big focus. lisa: so which companies get pushed into that new regime?

have they also started to cover ford? jonathan: i think that is coming next. lisa: ford shares are up more than 80% year to date. so if you take a look at what is being priced in, it gets very curious in terms of who could potentially catch up tesla and their moonshot. tom: and they are selling more of them than the hydrocarbon one. there it is, jon. folks, you've got to understand, none of us drive. lisa: speak for yourself. [laughter] jonathan: one of us does. not you, but lisa does. lisa: i will say, i do think the move to electric vehicles will be really interesting. where are you going to target? where are you go -- to charge it? where are you going to charge your electric comer? tom: it is all going to get solved in glasgow. jonathan: you know what i levin this show? when we have conversations and

no one knows what they are talking about. down 0.3% on the s&p. tom: it is like a marriage. his "surveillance" more like a marriage or more like a divorce? jonathan: which one is it? tom: send us your emails. send us your thoughts. jonathan: good morning. have a fantastic day. this is bloomberg. ♪

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>> what we see is an earnings season that is likely to be more volatile. >> we have been in a highly profitable, highly productive economy, despite all of these frictions and challenges. >> we are where we are because central banks have essentially taken it upon the cell -- upon themselves to prevent any downside from occurring. >> if people start worrying about the cycle again, that is a different story. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. in