♪ >> powell and the fed are increasingly open to the prospect of perhaps a quicker hiking and tightening cycle. >> the market has repriced the cycle significantly. >> the market has been very quick to price out interest rate hikes in the middle of next year. >> the fact that the terminal rate is not rising gives them less room. >> we don't think they will actually be raising rates until 2023. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: this is not the earnings season the bears were hoping for. 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 up another 0.4%. the earnings so far, so good. tom: the vix under 15. there's a reaffirmation today

that is very different than five days ago, 10 days ago. more earnings coming in. tina martin adams and the others we have talked to have said, you know what? the sum total of the earnings and revenues up. jonathan: the big tech players after the bell. microsoft, google. then onto apple. apple was in the news because of the supply chain story, a struggle to meet demand. we thought that would really define this quarter. so far, it hasn't. margins have held up. that has been the story of the year so far. tom: i think the powerpoint, buried in it, you see the reality of ge aviation. their fleet is down 18%. that is their calculation. they are parked on the ground. but away from that is the idea of pretty good margins, even with flat revenues. is that tech? no, but it is good. jonathan: you see what you get here? commentary on the numbers, and

column and terry on the -- and commentary on the powerpoint of the earnings release. [laughter] you're the only man i know who gives critiques on the powerpoint presentation. tom: stop the show. this is really important, the way the media looks at the earnings. the parlor game is different than the way global wall street looks at it. you've got to listen to the conference call. you've got to go into the data. our guest coming up, this is exactly what she does. jonathan: who's got the best powerpoint? lisa: i am going to let tom be the expert on powerpoint commentary. [laughter] basically, it is a bad morning for the bears. you can say that again and again throughout the year. i do wonder how much this is a story, as you have both been saying, of companies adapting, with the idea of an economy that will still slow down and that this is actually still goldilocks for these companies. i do wonder about those cautionary signals from a flattening yield curve and the idea that we have even deeper

negative real yield giving fuel to this. jonathan: we need inflation to come down to keep this where it is so far. all-time highs coming into today, equity futures adding a little bit to the rally, 0.4% higher on the s&p, advancing 19 points. in the bond market, a little bit of stability. next week, a fed decision on wednesday. your ten is at 1.6238%. tom: i would also point out ecb is not a small issue with the weidmann resignation. there is a stew out there. we are predicting it, but we always get it wrong. jonathan: to paraphrase kit juckes, euro-dollar a snoozefest. lisa: it has been shockingly resilient.

you mentioned earlier the idea of if inflation comes down, then we could have a potential goldilocks scenario for these companies. the interesting thing is we are seeing prices continue to rise. 9:00 a.m., we get the home price index, expected to rise 20%, a record year-over-year, yet people are still buying. 10:00 a.m., september new home sales. the expectation is for it to actually increase despite the fact that prices are so high. we will also get u.s. conference board confidence numbers. the expectation is for confidence to wane just a touch, but still remain relatively high even though inflationary headwinds are there. people are still buying. people can still get a job. today an fda panel is meeting to discuss vaccinations for five to 11-year-olds. the key question, what will the uptake be? what will the messaging be that this is safe, especially considering the fact that less than half of 12 to 17-year-olds have been vaccinated so far?

this is key in terms of public sentiment and public support. aftermarket, we get earnings from alphabet, microsoft, twitter. this is going to be very different in terms of the individual stories from alphabet, google. . , and microsoft. it will be a cloud story. for twitter, it will be advertising at a time when it is incredibly competitive. tom: look for all of the cross o -- look for that across all of our platforms. looking across to 2022, and indeed, 20 dodi five -- 2025, a recurring theme we have is look to asia and the true growth there. gabriella santos of jp morgan joins us, their global market strategist. i love how your essay dovetails into what i am seeing in the new foreign affairs magazine, which is china, and you define a new china.

what is the new china? gabriella: that's right. in a lot of our conversations with investors, china keeps coming up time and time again as really an area of growth in portfolios. i think it is much more about a conversation about chinese markets more so than china's economy going forward. i see the new china being one that stresses the quality over the quantity of growth, that also prioritizes other objectives in addition to growth alone, such as reducing inequality in energy transition, the development of capital markets, and also a china that has new areas of this us -- of emphasis. this year has been all about pressure in new china, but there are also areas of emphasis like domestic consumption, technological infrastructure, and the energy transition. our investors still believe china is investable, and they are looking at this point in time as an opportunity to build

that allocation to china over time. tom: is there some capitalism, at least their experiment, is it endogenous to china, or does it wind out over the pacific rim and all of asia? gabriela: we have to remember china has a very particular political and economic system. when china does decide to pivot, it does so extremely quickly. that is a future of china. it does lead to these moments of volatility. we see these 30% plus corrections every year or so, a feature of investing there. it does come was about double the volatility for chinese equities versus the s&p 500. but you do get other benefits. you get the potential for higher revenue growth in these new sectors of emphasis, and you get extremely good diversification benefits. it is working against you this year.

china is down 11%, while em ex-c hina is up, but it can work in your favor like it did last year. we still find it helps to boost risk-adjusted returns, and that is very unique to the china onshore market. lisa: are you concerned at all about the political ramifications in the united states toward investing in china? the idea that there is a changed relationship between the two nations, and that if companies or even investors move into china, they could be susceptible to risk at home in terms of regulation? gabriela: we do see in surveys in the u.s., as well as in a lot of countries around the world, this increase in unfavorable opinions towards china. i think that is honestly a feature of the next century, the competition between china and the of the world. but we talk to investors about is whatever you may think about china and its political system,

you can't ignore it. you can't ignore it in terms of the size of the economy, the size of its markets with the second largest equity and bond market, and you also can't ignore it in terms of the risk-adjusted benefits it can provide portfolios. so maybe an investor decides that investing in china is not for them, but i think as a fiduciary, investors need to prove that they thought out the benefits they are leaving on the table and that they well-documented the reasons why. lisa: meanwhile, the question of what happens in china directly bleeds into the supply chain disruptions, so we continue to see. how are you gauging the activity level there with when we will start to see some of the inflationary pressures from supply chain disruptions perhaps start to abate a little bit more? gabriela: we have clearly seen deceleration in china in the third quarter. that deceleration can continue a bit longer in the fourth quarter. part of it is related to the

pandemic. china is the only country that continues the zero tolerance approach to covid, so localized restrictions are still going on in china, and that can affect some production and consumption of services. but more than that, i think we are learning that this deceleration in china is a feature, not a bug, of the new china. it is about lower quantity growth, much more about quality. so we will see a decline in things like property, infrastructure, and energy intensive industries. the floor on chinese growth is much lower, and i think that is something investors need to internalize and adjust lower their expectations, and then we can move on and focus on the opportunities. tom: gabriela santos of jp morgan, thank you so much. we are seeing a real percolation thinking about china not just

into cop26. i guess the headlines are better, but when everything is said and done, it is not american banking, is it? jonathan: it is not, and they still got their problems as well. what we have seen out of barclays is pretty much what we saw out of the united states. equities trading fantastic. likewise in the u.s. it has been a decent quarter for the u.s. can they repeat the act next year? i guess that is the question. tom: and how are they going to compete with the u.s. banks coming over to europe? jonathan: flexible working hours. how many times have we heard that from european players? you can stay at home. it is ok. lisa: and we don't have to pay for real estate. jonathan: it is a massive week for big tech. alphabet your to date up 57%. from new york, this is bloomberg. ♪

laura: with the first word news, i'm laura wright. u.s. and chinese governments have made incremental progress in their economic and trade negotiations. treasury secretary janet yellen and chinese like khmer liu he held their second -- chinese vice premier liu he held their second talks in a few months. senate democrats has moved closer to an agreement on president biden's economic agenda. senator joe manchin expressed optimism there could be a deal this week. he has been pushing to shrink the size of the social spending package. still, some house lawmakers raise doubts about the terms of the deal being discussed. hong kong will soon end most of the quarantine exceptions for overseas and mainline travelers. the city is under pressure from the chinese government to tighten up what is already one of the world's strictest coronavirus containment programs. hong kong's goal is to

eventually reopen the border with mainland china. general electric has reported third-quarter earnings that beat estimates. the ceo said orders grew, margins expanded, and the aviation unit is showing continued signs of recovery. ge expects 2021 revenue will be flat year-over-year versus earlier expectations of a low single-digit increase. 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 laura wright. this is bloomberg. ♪

pres. biden: i'm tired of trickle-down. trickle-down hasn't worked so

much for the last 15 years. these bills are going to change the lives of people. we will own the future. jonathan: the president of the united states. from new york city this morning, good morning. all-time highs into tuesday on the equity market. we add some weight to the rally. the s&p 500 up 20, advancing 0.4%. in the bond market, yields in a basis point, 1.60%. a bit of stability going into a critical week for the federal reserve, and not about tapering. it is whether they push back aggressively against what we have priced into the front end through the belly of this curve, higher interest rates. very little pushback from chairman powell on friday. tom: i get it, but are they also have to calculate in pretty good gdp growth with the corporate earnings season? jonathan: it is not about gdp right now, is it?

it is about the trajectory for inflation. i wonder how the language evolves. transitory for longer doesn't cut it. you've got to convince others that those prices aren't broadening out, those higher prices aren't going beyond temporary factors related to tightening. tom: we have to wait for the data. jonathan: we know what moha med thinks. he think they are making a massive mistake. i can find another 10 people who think the opposite. that is where we are at right now. tom: where are we in washington right now? we are going to get away from the bladder of the moment with -- the blather of the moment with annmarie hordern. watch richard neal of massachusetts. here is a guy who lost both his parents and his childhood. he literally went to college on government checks, getting by, and then he built a political

career into being the most powerful voice on our ways and means. what is richard neal going to bring to the debate? annmarie: when you keep talking to richard neal, especially as the senate finance committee is pushing their revenue stream for the social spending package, he is saying what their committee has come up with looks better every single day. he says that rates are advertised. they are in the public eye. he says this is a way that they could be able to support the revenue stream. it has wide public support, and he thinks this plan is the plan that, in the end, we'll go ahead because he also points to the fact that what is happening now in the senate finance committee in this draft, which we have not seen just yet, that this could be open to a lot of constitutional challenges in the court, and there's still a lot of questions given the fact that this has never been tested

anywhere in the world, a so-called wealth tax. so he think his committee's plan is looking better and better every day. tom: i'm not sure if there are any billionaires in the first congressional district of the, mouth -- of the commonwealth, but richard neal has to talk to chicopee. he's got to talk to lennox, to springfield, and the people sending their kids to cathedral haskell. my father went there. i know the terrain. how do he and pelosi and schumer and the liberals in the moderates, how do they speak to the first district and not the fancy people? annmarie: he speaks to the first district and not the fancy people, it is going to be about making sure those individuals, and president has said this time and time again, that those making less than $400,000 a year will not see a single sent in their taxes rise.

when you start looking a little bit more into it, what is actually -- what does actually pay your fair share mean? who are they targeting? with the billionaires tax, it is about 700 people, give or take. when you have the income tax rate higher than $400,000, you are looking at a wider swath of individuals in america. we should make clear, it is not clear to anyone yet exactly how they are going to approach this. we know that kyrsten sinema is not on board with raising the corporate tax rate or the income tax rate, which is why they are discussing this billion air wealth tax because they need to figure out how they are going to pay for this. i am still a bit unclear on which direction they are going to go, and the fact they think they can wrap this up in 48 hours before the president boards air force one to head to rome, mind-boggling. i don't see how they do it. jonathan: when it comes to ordinary income in america, this tax system is very progressive already. when it comes to ordinary

individual income, it is highly progressive, and i think you can make the argument that most people receiving ordinary income are paying their fair share. what has got lost is the corporate tax rate. i find it amazing. do we face the very real prospect that we won't get a corporate tax hike under this government? annmarie: this is what many are talking about, the fact that you can have this government not rewind the trump era tax cuts. this is something that so many of them campaigned on, that kyrsten sinema voted against, those trump era tax cuts. there is potential that some of that tax code will live on. there's one thing that richard neal did speak about, the chair of house ways and means, that there does seem to be a coalescing around a 15% minimum corporate tax for corporations. this would also come in line with treasury secretary janet yellen in terms of the oecd around the world. potentially, that is something that would likely happen, but

you could see remnants of the trump era tax cuts sticking through this democratically led house, senate, and white house. lisa: just to fast forward to next week, if what you say is correct and they don't get anything done before joe biden gets on that plane, what does that mean for the virginia gubernatorial races? annmarie: he is going to be campaigning this evening with terry mcauliffe. remember, terry mcauliffe was saying we know joe biden isn't doing well, and was trying to distance himself. now it seems like he needs him. the polls for virginia arnett and -- are and -- are neck and neck. the question is whether virginians are willing to vote for hard infrastructure if there is a meeting of the minds on what reconciliation will look like. there's still a number of questions on that.

but we hear constantly, time and time again, from progressives is that they will not vote for hard infrastructure unless there is a vote on reconciliation. not a framework, a vote. a vote on reconciliation is weeks or potentially months away. jonathan: annmarie hordern down in d.c. amh. tom: i don't know about that, amh. jonathan: i think it is sticking. let's make a very some but when it comes to taxes. you can tax ordinary income. you can tax assets. much easier to tax realized gains. or you can tax transactions. it got to find a way of going about the taxes beyond just ordinary income. ordinary income is the easiest thing to go after, but at one point is 40% enough, is 50% enough? what is the line in the sand here? tom: add up your combined taxes. the politicians love to talk

about individual taxes, and what we do is this one, that one, that one. sum them all up. jonathan: go after collective tax, not a regressive sales tax. ordinary income, it's got to stop. tom: i am not saying that with the bentley.

(announcer) looking for a better way to lose weight and feel good? how about the one with a 98% success rate and a more affordable weight-loss solution? that's golo. there are no monthly fees and it's guaranteed to work or you don't pay. no stimulants, no starving,

just results, results you'll keep for life. with over 2 million satisfied customers, golo is the new way to lose weight. go to golo.com and get your life back... -with golo. -golo!

jonathan: some people very unhappy about the things i was listing for tax. a lot of people rate about the price of a bentley if you have to pay too much on top. i know. equity futures on the s&p advancing 0.4%. on the nasdaq, up about 0.6%. about 10% of the index reporting. just to names, microsoft and alphabet. twos, tens, 30's look like this. 30 year down to 2.06 percent. a bit of a snooze into next week. next week, you can wake up again. a federal reserve decision on wednesday, and on friday you get payrolls, and between a bankroll

decision. governor bailey, look out. i'm not sure if he is aware how live that meeting is. the rate hike debate is at the epicenter of what is. . happening in the belly of the curve. let me show your five year yields over the last year. at the start of the year, we thought the federal reserve would sit this out. what you had was a positive growth shock. never mind the supply side story that is dominating much of the year. at the start of the year, there was a positive growth shock. just the idea the fed would sit it out. growth expectations were higher. inflation expect patients were higher. the belly of the curve in the front end were really anchored. then something has changed as this year has grown older. we started to think about higher interest rates and the tightening cycle. that is what the five-year has picked up on. look at where we were, below 50 basis points, in and around 0.5%. it is a big change. tom: we have moved, but are we

back to where there is some real angst out there? jonathan: i don't think we are yet, but just a little bit of a test building for the going into next week. tom: i like it. you are doing a good job. jonathan: now, this market is not so sure. this market was on sides for much of this year. not so much anymore. your five year yield, 1.1745%. we got some movers this morning with kailey leinz. that was your cross exit -- your cross asset price action. let's get to those earnings. kailey: ups is one of them. the company lifting its margin outlook. it has really been able to exercise pricing power and lift prices in the face of rooming e-commerce demand, so it is up about 4.5%. ge higher. the key metric for ge is industrial free cash flow. the share is up 1.3%. 3m did get a beat in the third

quarter, but they trimmed the top and of their for your earnings outlook because of labor and price pressures, so that stock is slightly lower. eli raised its guidance next to the success of its covid antibody cocktail and the treatment demand for that, so it is up about 0.4%. the other earnings story out overnight, it is a big week for big tech. on facebook, they missed on the top line in terms of the third quarter and the guidance because of apple's privacy rule changes in part, but they also announced a $50 billion share buyback, so facebook is up about 2%. of course, the tech story of yesterday was tesla. a price target list from adam jonas at morgan stanley. 100,000 cars ordered by hertz. the model three is the number one selling car in europe for the first time ever. it is a $1 trillion market cap

company after a move yesterday. coming off a little more this morning for the bell. tom: coverage of that on "the close" this afternoon. a lot to talk about this morning. we have really been focused on earnings. some of them are beets. there is some angst in there as well, but all in all, a constructive earnings season. so we now turn -- we have been avoiding this over the last number of days -- on fed, on economics, and on things transitory, thierry wizman joins us from macquarie. how transitory is transitory? i am worn-out by the word. jonathan: i think we got a bit of an audio problem. thierry: we've got it. jonathan: ok, carry on. thierry: the addition of -- the definition of what transitory means has been changing. if you asked members of the fomc three or four months ago, they

would have told you transitory means only three months inflation. i thing they saw the supply chain issues lasting, but not lasting that long. i think the definition has changed among central bankers around the world. the supply chain problems are going to last a little longer, but maybe even beyond the supply chain problems, we have seen evidence that labor market participation rates in the u.s. are not going up past this period of pandemic emergency unemployment benefits. i think central bankers are getting concerned that labor supply is going to be tight beyond just these six months. it means now more than just three months of high inflation. tom: doesn't the definition changing and whatever the new x axis looks like, the extension of this debate out even into 2022, by your reading of history, doesn't that mean that each and every central bank has to wait for more data? thierry: yeah, they do. i think certainly, some central

banks are clearly committed to the wait and see mode. it is not universal, but i will point to two important ones. the ecb is in wait and see mode. the boe is in wait and see mode. even the bank of canada might be in wait and see mode. you will see some of that this week. you will see the ecb potentially push back on the market premise that there's going to be a rate increase at the ecb next year, and even the bank of canada is going to push back on the premise that there might be three rate hikes out of the bank of canada next year. so some central banks are trying to push back against this market view of where rates are going, i.e. trying to get the market think more dovish lee about this. the fed is in its quiet period right now, but i don't think it would be pushing back on market perceptions in the u.s. lisa: perhaps this is because the bears are getting extinguished rapidly throughout

earnings season. we have been talking about this throughout the morning, the idea that earnings are coming in very strong. consumers are still spending. is the bond market seeing a different reality, or are they just saying the fed will come around to see what everybody else is seeing right now in equities and hike rates sooner? thierry: i think more the latter than the former. you were looking at the five year yield with room to go up. sure there is. pre-pandemic, that yield was in the middle of the 1.5% to 2% range. there is clearly still room for the five year yield, which is effectively any policy horizon of the fed to continue to go up. so i think certainly the latter of those two options. lisa: so how high can yields go given how much debt we have incurred? this is one of the key issues we have been talking about all morning. what kind of cap is there on 10 year yield and five year yield? what is it in your view before it becomes disruptive?

thierry: the fed is data dependent. as are many central bank's around the world. one of the key aspects is to wait and see if that debt burden is becoming onerous. the way you see that is if consumers and companies start to pull back on business spending. i think this speaks to an important philosophical point out there, which is that the pandemic has left many sovereigns around the world highly indebted, but it has also left businesses a little more indebted in some countries and consumers a little more indebted in some countries. i think in those countries were debt ratios have gone up -- the u.s. is not necessarily one of them, keep in mind -- but in those countries in which indebtedness is high, you can make the case that central bank's will be stepping off the gas pedal earlier than otherwise. but it happens to be the case that some of those started hiking first, especially in emerging markets. but i agree with the premise of

the question, that debt implies lower rates of interest. jonathan: always great to catch up. fantastic to catch up with you. thierry wizman of mcquarrie on what the future might hold. the two-year yield topped out in the last cycle. i am not sure if it ended in this one, stopped. at the back end of 2018, the fed took it too far, too quickly, and the primary market in high-yield totally shut down. there's a lot of people out there that wonder, the fed will back away when the equity market starts to cap lower. ok, to some degree. it is about the credit market. the primary market shut down in high-yield in december 2018. that is what will make the fed really back off. right now, that tightening cycle hasn't even started. lisa: and the cushion that credit investors have is much narrower this time around. at a certain point, sovereign debt becomes competitive with corporate debt, and those

funding pressures become all the more acute. fundamentals are looking really good because money is cheap. money is basically free. what happens when it is not? how quickly do the fundamentals deteriorate? this is why a lot of people are saying there is a natural cap, and this is why yields are so negative. jonathan: for percent as your median estimate for gdp next year in america. it is coming in a little bit, but 4.0% is the median estimate of our survey. you can find that on the bloomberg terminal. tom: you throw inflation on that, and maybe you have 7%, 8% nominal gdp. i am talking about the higher inflation everyone is all lathered up about. corporations adjust. they sort of like that kind of mix, i would suggest. the other thing is we've got to recalibrate our glide path down to post-pandemic normal gdp. i would suggest, and i differ to

a lot of our guests, that is up farther than our guests this summer. jonathan: jan hatzius said on .5% to 2% in the second half of next year. tom: i think the timeline is germane, and that is what he is paid to do, but there's a raging debate if you get back to that kind of gdp statistic. jonathan: let's talk about inflation as well. 2.8% for 2022 in a survey of hours. the fed core pce, 2.3% for next year. that is the distinction between the fed and everyone else. lisa: which is perhaps why they are not pushing back on the right hiking expeditions of the market right now. jonathan: this is a market that has got its own forecast. futures up 18, up 0.4%. yields in a basis point on tends. from new york, heard on radio, seen on tv, this is bloomberg. ♪ laura: with the first word news, i'm laura wright. ups posted third-quarter profit and revenue that beat estimates.

the package shipper also raised guidance for the full year. ups earnings were driven in large part by pricing gains. the company's price per package rose 12% in the u.s. president biden will probably be unable to keep one of his key campaign promises to roll back donald trump's 2017 tax cuts. there is unyielding resistance among even some in the president's own party to raise taxes. the president has already acknowledged there aren't enough votes. drugmaker eli lilly has raised its full-year forecast. a surge in coronavirus cases spurred demand for its covid treatment, especially among the unvaccinated. lilly's third-quarter earnings fell just short of estimates. it sees u.s accelerated -- it sees accelerated u.s. approval for its alzheimer's drug. oil output capacity across the

world is dropping quickly, and countries need to invest more in production. nasa says the supply deficit in oil markets could get work -- could get worse next year if the pandemic eases and more people fly. china has told the billionaire founder of evergrande to use personal wealth to alleviate the property developer's deepening debt crisis after evergrande missed a deadline for a coupon payment. demand adds to signs that china is reluctant to orchestrate a government rescue of the company. 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 laura wright. this is bloomberg. ♪

>> i think it is very unlikely that the rate hike expectations are going to be delivered, and i

expect at some stage in the first half of 2022 that we will start to see evidence that the inflation isn't as sticky as people have been fearing. maybe it starts to subside down towards the central bank targets towards the end of the year and into 2023. jonathan: steve major there of hsbc. you will notice the shift in the calendar. it has gone from year-end 2022 to the middle of -- year end 2021 to the middle of 2022. that wasn't where the story was at the start of this year. tom: and again, that is the x axis here, which i think we really got to pay attention to, particularly into the ecb. do we assume ecb is dovish? jonathan: we assume that, yes. the big conversation is december, when they work out what to do with the flick's ability and the bond buying programs. tom: are we going to see a 2025

headline? jonathan: i want to see the forecast. i am with you. candy t word hold up? tom: the t word is what, trillion? jonathan: transitory. tom: i thought it was trillion. two point $5 trillion, apple. microsoft. google, i can't do the math. $1.7 trillion, amazon. tesla, barely over $1 trillion. david wilson come ago -- david wilson, go. david: compare it against all of the other automakers in developed markets as were present at by the msci automobiles index. tesla is equal to all of them combined. tom: how much did gm grow yesterday? david: 1.5%, basically. if you compare that to the total market value of all of the other

companies in the msci world index, you find that one days worth of increase in tesla exceeded all of the other total market, except for toyota, ad $281 billion. tom: is this on electric cars? how to the other electric car people respond to this reality? david: it is clear that they are spending a lot of money to catch up with tesla. we know general motors and ford are doing that. it is a matter of how the industry is shifting. you could argue that tesla is ahead of the curve. does that make the company a $1 trillion business? does it make elon musk 50% more valuable than jeff bezos, the founder of amazon? these are the kind of questions that come up with the valuation of tesla in what it is at this point. lisa: is it fair to view tesla

as a car company? david: it is fair because that is where the bulk of their business is. you are right to say that maybe there is something else going on. they have the solar business from when they took over solarcity a few years back. they have battery storage, which ties into those were tough -- those rooftop solar networks. they certainly have aspirations to expand into other businesses. for the most part, though, they are a car company. they are certainly not valued like a car company, though. that is where things get kind of complicated and figuring out whether tesla deserves this $1 trillion valuation. lisa: that's where i was going with this, this idea of what is in a valuation and when it is too high. there were a lot of naysayers for netflix for many years, and they just got upgraded to investment grade by s&p yesterday, and people are saying that this was absolutely expected and should have been done a while ago. tesla, a lot of people are saying the same thing. how many people are still pushing back on some of these

stories versus embracing them and saying we were wrong, and this is the new economy? david: there is still some skepticism about the valuation. as we were pointing out yesterday, tesla is the first noninvestment grade company to reach a $1 trillion valuation, so you have to wonder whether eventually it is going to follow netflix and get that investment grade rating. that is something down the line. we know the auto business is capital-intensive, so that is the challenge tesla faces going forward. tom: jon from england emails in. ask david, do you call it alphabet or google? jonathan: there we go. [laughter] david: i call it both. google owner alphabet. tom: facebook is going to do this? they are going to change their name? david: we will see how that one goes. jonathan: it will always be facebook, tk. tom: it will always be google.

david wilson, thank you so much. what does tesla do today? jonathan: i don't know. the market is the market. we have been watching this tesla story for how long? the market story is what it is. tom: i saw liz ann sonders on twitter last night had a brilliant tweet showing the rest of the market. tesla is not the market. jonathan: no. do you want to talk about jetblue quickly? tom: i missed that. jonathan: fuel prices a bit of a problem here. the loss narrower than expected, so we are positive in the premarket, but they go on to say, "the sequential decreases due to this he's in a leisure demand pattern in the recent fuel demand prices, as well as labor demand costs," seemingly every company dealing with the same thing at the moment. tom: what do they do? do they take out flights? i had a trip canceled, and the airline i was on just took out their flight. jonathan: it is good to see of the atlantic travel core door reopen -- the atlantic travel

corridor reopening. this line from larry fink and ray dalio, that they are open to paying more tax, but only if the money was put to good use. ray dalio saying this. "i would support anything that is going to increase equal opportunity and greater productivity. if it accomplishes those things, i would support it." i'm not sure does. lisa: it is a really politically correct way of trying to push back gently on the plan to tax the ultra-wealthy individuals. it is highly controversial, the idea of how you go about doing this. a lot of people are saying, why don't they take a look at the taxes that are actually in effect and how to enforce them better before moving to raising the rates? nonetheless, there is this political question for the leaders of all financial industry giants right now, and that is how do you message that they are for something more progressive, even at their own expense, at a time when their industry is doing so well, even

relative to other parts of the economy? i think that is increasingly a dilemma that you are seeing addressed here. jonathan: our good friend and colleague matt miller went on a bit of a rant earlier this week on warren buffett, and essentially said if warren buffett is so concerned about not paying enough taxes, he could just write a check to the treasury, but he never does. the words of matthew miller earlier this week. tom: it is a loaded question, and the answer, this is so important, and i am going to pick on canada here, they made a radical tax change in the government was voted out thunderously. all of the politicians have a new back of their mind, if they overreach on tax change, on tax policy, they lose their jobs. lisa: and we are seeing that with corporations. they are more willing to raise rates on individuals then corporations because somehow, that is less politically favorable, and that to me is pretty interesting. jonathan: i thing a lot of

people surprised by that. equity futures up 18 on the s&p. we advanced 0.4%. record highs in this equity market. we keep on climbing going into year end. heard on radio, seen on tv, this is bloomberg. ♪

>> inflation is going to get worse before it gets better, but we are going to see the supply chain issues ease over the course of the year. >> everyone thought we were going to get cost squeeze, and what we are getting it is demand is appointment. >> sentiment is certainly shifting more bullish ahead of this week. >> has the labor market structurally changed? >> we are a very long way from stagflation. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. on radio, and television, within earnings