♪ >> one of the features of an economy that does get too hot is it slows itself out. >> p market is underestimating the extent of fiscal drag. >> liquidity is slowly going to be brought away through the course of next year. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: a sleepy wednesday morning. from 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. we wait for the chairman of the federal reserve. tom: getting resiliency off of earnings reports like we saw from target earlier on.

what i am going to show is the vote for the american economy, and that is a vote for a stronger dollar, now buttressed up against important levels, particularly against the euro. jonathan: very briefly, 96 handle on the dollar-euro. we are seeing a re-acceleration in this economy into year-end. tom: as we said, there's a heated opinion. we will have a wonderful conversation pushing against the laser optimism -- the laidler optimism. i agree with what you said i think two days ago, this is a moment of no consensus. it is a moment of different opinions. jonathan: we will catch up with morgan stanley in just a moment. for he 400 -- 4400 next year, that is the spread. lisa: what is currently priced into the valuations? is it a low interest rate story? is it the idea that margin

pressures will continue to push through and we will not see the materialize? or are people looking at the likes of walmart, at the likes of target, as the beginning of something more, of being unable or unwilling to pass along all of the increased prices to consumers. jonathan: are you excited about the fed speak later? lisa: it is a barrage. tom: who is not speaking? jonathan: governor brainard and chairman powell. [laughter] maybe they are the ones you want to hear from. you're at we market unchanged on the s&p 500. good morning to you all. yields coming in about a basis points on tens. euro-dollar, $1.12 handle earlier on. it is not just the euro. i know it is idiosyncratic, so to speak, but dollar-lira, what a move we have seen. tom: yes, turkey is itself very contained, very controlled, and

now down to hugely stressful domestic numbers. trade-weighted lira, what it does to gross domestic product is unspeakable. jonathan: 10.50 almost on the currency pair. lisa: i can't get over the idea that erdogan is going to wage war on interest rates, and yet that is the reason why people argue there is ongoing inflation and weakness in the lira. today we get a read on one of the key issues facing the market, the idea of when do higher prices lead to more supply, and thus bring down prices. we get u.s. october housing starts and building permits. as we have seen prices go up, people have stopped buying. you have also seen an increase in the number of housing starts forget when do we start to see enough supply come on that actually does mitigate some of the price rises that have led a number of people to borrow as much as they have?

a further look at north american supply chain challenges, speaking with officials from the los angeles port, as well as the trucking association. how much do we get a sent of how much can be done to alleviate some of these pressures, as well as how long it will continue? this does happen as consumer sentiment deteriorates to the lowest since 2011 in the face of some of these challenges. today, let's talk about the fire hose of fed speak. you asked who is not speaking. here is who is speaking. john williams, mary daly, raphael bostic, loretta mester. can i say anything that is not going -- that is going to matter? can they say anything that is going to move the needle at a time when people are warning on the margins of potential inflationary pressures, but no one is saying take action now, with the exception perhaps of jim bullard? a lot of people shrug that off as an outlier opinion. jonathan: have you noticed where the bias in coverages? a lot of people are leaning to the coverage we get from the so-called hawks. lisa: it is because people want to see dissent and they want to

see response to inflation or pressures that seem to be fulfilling every box of fed chair jay powell that indicate stickier inflation. jonathan: what will it take to change the minds of the others? right now, a clinic on why you shouldn't be optimistic on the index level of this market with dan skellie -- with dan skelly, head of market strategy at morgan stanley. walk us through the path down towards 4400 on the s&p. dan: sure, and thank you for having me. we think risk-reward at the index level is unexciting at this point, and the pathway to that 4400 year-end target is mostly driven by multiple contraction. this is a call we had in the second half of 2021. admittedly it did not play out as we had forecasted. however, we are sticking with it. this is typically how midcycle transitions culminate, with the

multiple contraction. we saw that into thousand four, we saw that in -- in 2004, we saw that in 1994. we don't see that changing this time around either. we forecast the contraction in multiple, which is going to happen vis-a-vis strong earnings growth, but net-net, it will be enough to get us 5% lower here. tom: it is such an interesting call, and i'm going to call it a migration down to an 18 multiple , which is a denominator working there. what if you get it wrong? what does the multiple do if we get a better economy? j if you get it wrongor wrong, is it the numerator for a denominator? daniel: great question. ellen is predicting 4.5% fourth

quarter growth going into the end of 2022, so we still expect robust economic growth driven by this continued reopening, these antiviral covid pills are going to be another catalyst to reacceleration post this delta wave in the third and fourth quarter. nonetheless, back to your question, we are still predicting 10% earnings growth. the linchpin in the equation is interest rates. our fixed income strategy team any macro team is predicting 2.1% in terms of 10 year treasuries by the end of 2022. let's say that doesn't play out. in our view, that would be the key catalyst that would keep the stock market index at a relatively elevated level. lisa: do you think tech stocks are going to underperform the most because of higher backend rates? the idea that if the fed does not hold off until 2023 to raise rates, that is actually really bearish for long-term bonds, or

bullish if you are looking at how high the yields can go. daniel: sure. in that scenario where we get 2.1% by middle or end of next year, that is an environment where some of the higher flying multiple technology stocks will struggle. that is on the valuation side. let's also keep in mind the global demand side. we went through a period in 2020 and the beginning of this year where we had tremendous pull forward. we probably pulled forward three to four years of market share gains in many of these secular trends. as you know, the move towards cloud, connectivity, all of these different secular growth trends were happening pre-covid, but they were accelerated via covid. we are also somewhat skeptical that we will see continuation in that rate of change in terms of the earnings growth. so you could see a hit on two fronts come on the multiple via rates, and a little bit of payback via they extreme market gains they have already seen. jonathan: i'm very familiar with

the research on the amount of homework you guys do, how much has gone into the churn, and i have uploaded you for the calls you have made. i'm going to go into the next level. i notice to some degree you have deemphasized that, but i want to work out from your perspective, how would i know if i am wrong? how would you know if you are wrong about this 4400 call as you push it out into next year? daniel: i will say two things. one, just to reiterate the rates call, if rates are somewhat more pegged around the 1.50% level, that does change the cap elation of equity risk premiums. we think risk premiums today aren't as elevated as they should be because we are going into a more volatile, uncertain period next year. this was the great euphoric reopening economic period, where we comped very low trough rates of earnings, so naturally, we sought truly euphoric rates of

earnings and economic growth. that was always going to slow. so where are we wrong? we are wrong if interest rates don't go higher, and that changes the h and on multiple and valuation. secondly, we thought we would see not only a bit of a payback in some of these tech and software spending areas, but we also might see payback in broader consumer areas. so to the extent that that is wrong, inflation doesn't bite as much as we expect, the fact that savings may be haven't been depleted as much as we expect, and we see an even stronger consumer period, that could be something else to monitor in terms of our view. jonathan: open and honest as always. thank you, as always. that is what this time of year is about. it is not just about taking the call. it is about understanding the process, the homework, and if things change, if this doesn't happen in the way we anticipate,

things have to change. tom: the answer is you nailed it in the recent years. the beginning of the year is march. maybe that is true again this year. we are all doing the look stuff, and we need to recalibrate off of another quarter of gdp, and frankly, the foundational pandemic news as we heard from dr. -- as we heard. jonathan: we will catch up with michael holland of holland and co. from new york, this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. president biden is still deciding whether to reappoint fed reserve chair jan powell -- chair jay powell

or replace him with governor lael brainard. senate banking committee sherrod brown says there is no doubt the senate will confirm either candidate. european central bank vice president expect inflation to slow down, but says it won't do so as quickly as expected. a few months ago, he was also asked about interest rate hikes. >> we will see what happens over the next months, but my personal view is that it is going to be quite unlikely to have a lift off of rates in 2022. ritika: meanwhile, the ecb warned that market exuberance could pose a risk to euro area stability. in the u.k., inflation climbed faster than expected to the highest level in a decade, putting pressure on the bank of england to raise interest rates. consumer prices rose 2.4% in october, but higher costs of

fuel, restaurants, and hotels led the jump in prices. china speeding up plans to replace american and foreign technology. bloomberg has learned a secret government-backed organization is certifying local supplies. nearly 500 makers of equipment and software have been approved. the chief financial officer of pfizer is retiring. pfizer says it has launched an external search for a new cfo. 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 ritika gupta. this is bloomberg. ♪

>> all the indications we have is that it will flow rate through into the middle of next

year. we rely on supply chains for everything we bring in and anything we sell. there's no easy option for us. >> for so long in our supply chain, the mantra has been just in time. now we realize the vulnerabilities of just-in-time. we need to move to just in case. jonathan: we just heard from the ministry of trade for new zealand and the u.s. secretary of commerce. the focus on the new economy forum in singapore getting some insider clarity on what is happening with supply chain worldwide. in the equity market, unchanged on the s&p 500. yields in about a basis point to 1.6319%. in the commodity market, $8.22 -- $80.22. euro-dollar, $1.1331. what a move we have seen. tom: the first and second derivatives are pretty abrupt and nicely out past two standard

deviations. jordan rochester is scheduled to be with us. really looking forward to talking to the gentleman from nomura. right now in washington, jack fitzpatrick with us. i want to dovetail in our corporate earnings of home depot and particularly target in the signal of a boom economy. i know you don't care what we do on "surveillance," but how does a boom economy fold into the mix of the democratic party? the fact is, democrats like adversity because they say they want to come to the rescue. how does a democratic party do in an american boom economy? daniel: that is an interesting -- jack: that is an interesting question. in some ways, it plays into the democratic debates over redistribution, when you look at what they are trying to do with their social tax-and-spend reconciliation bill. we are not at a point where they are pushing a stimulus, and any

action by the government needs to be offset, according to at least the moderate members, so we've gotten much more away from just a keynesian approach to responding to an economic crisis and more to the bernie sanders conversation about taxing the millionaires and billionaires, and that is one of the main dynamics of the fast recovery we have seen lately, is that it has more rapidly pushed democrats to talking about what they want to do with taxing. tom: the major bills are going to come along now. basically, it is a wait-and-see for cbo on the hill. daniel: there's enough -- jack: there's enough members that actually want to see the cbo score, and the cbo is a pretty

small group working frantically now to at least get this official analysis of the bill done they say by the end of the day friday. that raises the issue of whether they are going to hold a saturday vote or if they can get that done earlier, but really, the issue here is that this is all waiting on a fairly small group of analysts at the cbo, smaller than some think tanks in d.c., and they want to get that final total score, not just partly. so you are looking at moderates like stephanie murphy in particular yesterday, she said she wants to see the total cost estimate of this reconciliation bill before they are able to get the moderates on board for an actual house vote on this bill. lisa: internationally, the new economy forum is happening in singapore. a lot of interesting discussions. i noticed the commerce secretary gina raimondo mentioned the u.s.

plans to initiate a new economic framework for the indo pacific region. do we have any sense of what that could look like? jack: as for an economic framework for the end of pacific , i have to admit that is a little tough to follow up on. there has been so much focus from the executive branch on the indo pacific that is a little bit more related to security, and to be honest, talking to lawmakers on capitol hill is a lot of the focus domestically. lisa: however, we do see increasing rhetoric with and ey e towards china, and that if things do not loosen up, that it could turn into a military conflict. that seemed to be the message of why it was important for president biden and xi jinping of china to have this summit. is there any kind of cohesive message on how to view economically with the nation that is also potentially presenting a security risk that so many lawmakers are worried about? jack: right now that message is

driven by some politics because both parties feel pressure to take, i don't know if you can say a hawkish stance on china, but when you look at what is bringing the two cardi's -- the two parties together on china, it is less about international relations throughout the indo pacific and more, for example, what you see with congress working on a microchips bill and a reacher -- a research and develop a research and develop bill to boost productivity and boost american independence from any potential dependence on china. that is not necessarily the most nuanced look at china, but really, the driving factor that has brought democrats and republicans together is a sense of at least competing with china, especially in high-tech areas. jonathan: jack, thank you. jack fitzpatrick down in d.c., our bloomberg government

reporter. inflation is the only story for a lot of people in washington, both on the physical side of things and monetary policy. on that front, and the last one he for hours, i think the administration has had some better news. from walmart, who says the inventories are ready to go for the holiday season. the port of l.a. saying containers sitting on docs are down by 29%. just some progress there. we got to take note of that progress. perhaps things getting less worse. tom: i know lisa as to fill up the hummer, but i look at unleaded at $3.40 a gallon, and that is not up to the smooth moving average of $110 a barrel. it is really close, but we are really not yet to that national pension, even though in selected regions it is clearly ugly. jonathan: they have been feeling it at the pump, feeling it in the grocery store. lisa: and there is an

international story here. it is an international problem, and we got news that china may be speaking with the united states about a coordinated strategic petroleum reserve release, and that is the reason why it so interesting to watch potential economic cooperation between the u.s. and china at the same time of rising economic and strategic tensions. it just shows how important this is not only to the united states, but also its main rivals. jonathan: want to be clear in the article that led that reporting, it was the u.s. asking china to join them, so clearly the bigger priority right now, according to that report, for the u.s.. lisa: but perhaps showing that china would be on board to some degree. otherwise, why would they even put this out there, unless they think it makes them look good? because there is a more hawkish tilt when it comes to china policy. if they are going to coordinate with anyone, why them? jonathan: crude down now about 0.5 percent. your equity market unchanged, positive not even a single point on the s&p 500.

yields at 1.63%. this sake -- this is a pre-thanksgiving file week early. tom: can i say good morning? greenberg turkeys, small business, their whole place burned down and they rebuilt it. tyler, texas. jonathan: very american.

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jonathan: live from new york city, good morning. here's the wednesday morning price action. unchanged on the s&p. on the nasdaq palma -- on the nasdaq, positive by a little more than 0.2 europe 2% -- more than 0.02%. -- little more than 0.15%. the 10 year, the two-year come of 30 year. here's the rate call over at morgan stanley. they think you wrap up qe by the middle of next year, you hike in the first quarter of 2023, and they believe the 10 year yield ends next year at 2.1%. right now, 1.6353%. that is the bond market call. ellen's and her making the cause

-- ellen zentner making the call on the fed. the likes of mike wilson saying that high yield is going to start to shrink margins, and of course, multiples. that high yield hurting multiples specifically. for this market, that means an equity market that heads back towards 4400. tom: she looks for inflation to moderate in february. that is a belief, a study by the very qualified economist, and that brings that nominal gdp in, and that is how you get to the lower multiple call. jonathan: multiples come in, yields go higher. let's finish on this, dollar-lira right now. seven days of gains, the longest winning streak since the middle of october. this gives you an idea of how many times we have seen this. this is it over five years, just to indicate that we had a 3% handle in 2018, and a 10 handle on dollar lira.

the next big call for this one, cpi december 3. do we pop through that level when we get through the cpi from turkey? tom: we got to get perspective on a stumble -- on is stumble -- on istanbul. jonathan: looking for to that. let's get more with romaine bostick. romaine: keep an eye on the retailers. target out with earnings, comp sales up about 12%. margins narrowed a lot more than what the street was looking for, and transaction value was actually down here. this was a big concern. we saw that yesterday with walmart. they are getting more sales, but not necessarily pricing at a level that would keep those margins widening. we are going to wait for the conference call to get a little more clarity on the outlook here, but that is the set up for target. meanwhile, the opposite direction, lows shares up 3% -- lowe's shares up 3%.

comp sales a little more subdued, but margin expansion and transaction value is higher, so you get a little bit of a sense of not only where people are spending their money, but the difference in pricing power that certain segment of the retail space have over others, so home-improvement doing well, traditional retailers having a little bit more trouble passing on some of those higher costs, particularly freight costs. keep an ion visa, shares -- an eye on visa, shares lower in the premarket, after retailers saying they will stop accepting visa in the u.k. fees had gone up a lot more in the u.k. because of brexit and the separation of the european union. amazon for now going to hold the line on that. keep an eye on that space. with electric vehicles and the ev space, rivian seems unstoppable at this moment. it closed out yesterday at a100 53 alien dollar market cap,

effectively the third-largest publicly traded carmaker out there, despite the fact it only makes a few hundred cars a year at the moment. lucid group rallied more than 20% yesterday, overtook both ford and gm in market value, now the six largest car company publicly traded in the world. up 11% in the premarket. the new it's -- canoe is up about 25% in the premarket. an electric vehicle company that doesn't really make electric vehicles yet. optimistic on the future for all of these names. tom: thank you so much. driving forward those we deal earnings we have seen as well. this is what we love to do at "bloomberg surveillance," on radio, on television, is try to get out in front of the story. how does e.m. react to chair brainerd? how does e.m. react to chair powell? how does e.m. react to a resilient dollar? thierry wizman joins us. to say he is interest rate and

currencies strategist at macquarie doesn't describe the decades of work thinking about e.m. i think i knew you, caspian securities, a million years ago, and then of course the storied effort at bear stearns as well. stan fischer wrote the redbook off of the crisis of 1998 on e.m. dynamics versus the big countries. are we in a similar point as we were with the ghosts of the 1990's? do you see hints of that now? thierry: i certainly do, and i think i mentioned this on your program many times in the past year, but ultimately, the markets have a memory, and the memory they have right now is of highly indebted emerging markets. a lot of them suffered through a pretty cataclysmic pandemic, and the only policy response they could muster politically was to spend quite a lot of money on relief efforts. the problem is this has left them with a high level of debt,

and that means there's a high servicing cost for households, for businesses during the pandemic, and especially for sovereigns. that alone should worry investors. is debt sustainable in the emerging markets? will there ever be a wholehearted attempt to adjust fiscal spending to bring that down? no one knows, and this is part of the problem. we have not had enough concrete signals from emerging markets that they are willing to try to bring back net sustainable. some of them continued to spend. when you couple that with some of the central banks and emerging markets, not all of them, but some notable ones turkey, are cutting interest rates are get that make for a double amount of worry. you have to worry not just about that dynamic, but worry about more inflation and capital flight as well. these are things that cratered the emerging markets in 1998, a combination of high debt, fixed

sustained rates that were unsustainable. absolutely there are hints right now of that. jonathan: you picked out turkey. how much of an economic experiment are we witnessing right now in that country? thierry: it is hard to measure experiments. you could say it is unprecedented, and what i mean by this, if you want to use that as a metric, is that most central banks when they are confronted with 19% inflation or so would if not reduce interest rates, at least hold them steady on the premise that they could build a good case inflation will come down ultimately. but that is not what turkey is doing. turkey is going the wrong way. whereas other central banks in emerging markets have been raising rates, they are cutting rates.

so they that we really don't know how it is going to end up, but certainly it is promoting capital flight right now. that is why you have dollar turkey going up. until president erdogan relinquishes his belief that lower interest rates are what turkey needs right now, i think there is pressure on the dollar to continue to rise. lisa: there's a larger question here based on the politicization of the turkish central bank that could dovetail into something we are seeing in developed markets. how much does the potential perception of a politicized federal reserve chair feed into also a weaker dollar on a broad aggregate level, and a similar manner, albeit completely different what we are seeing in turkey? thierry: i would suggest that the analogy is not that far off. lisa: really?

thierry: yeah. look, central banks should be independent because we don't want central bank policy to be influenced on a high-frequency basis by the political environment. with regard to the u.s., there is a chance that if, in re-nominating and reconfirming a new fed chair, let's say it is lael brainard, for argument's sake, if the market believes this is a politicized decision, you could see inflation breakevens in the u.s. go up. the margins start to price in more inflation over the longer haul. the dollar could come down, but other central banks have problems with regards to politicization. i think what is going to be relevant here is how the administration spends this nomination if it is not jay powell who is renominated. can they convince the markets that lael brainard is not that different from jay powell?

i think it is a clear signal they need to make in order to not overly react to a change at the head of the federal reserve. jonathan: didn't we see this play out for years ago when chair yellen was dropped for chairman powell? thierry: yes, but we weren't in a situation where we had such high inflation for years ago, and that is the difference. back then we were still in a disinflationary environment for the most part, and because of that, most investors, most traders didn't do much worrying about the prospect that the fed would be politicized because the implications seemed so far away. presumption was that it was so far away that it could hardly matter. but we have a different situation now. inflation in the u.s. is running

at 5%, running at some double digits in the rest of the world, and i think in that context, it is more important we display some access to make room for financial independence. jonathan: a comment at the end there that i know got your attention. lisa: the idea that there is an analogy between what is going on in turkey of the united states should there be a political decision at the helm of that central bank is quite something. jonathan: it is always a political decision, isn't it, tom, ultimately? tom: yes, that is it. it is that simple. it is about politics. based on the anecdotes i have seen, this is simply a president undecided. jonathan: tom keene, lisa abramowicz, jonathan ferro. your equity market unchanged. "bloomberg surveillance this is"bloomberg surveillance -- this is "bloomberg surveillance ." ♪ ritika: treasury secretary janet

yellen is warning congress that it risked say government default if lawmakers don't raise the debt ceiling by december 15, the date when the new infrastructure bill requires the treasury to -- the european union is targeting key commodities in a move to prevent deforestation. it is unveiling new rules for companies selling soy, beef, palm oil, wood, and coffee. several barclays shareholders have raised concerns about terms of former ceo jes staley's de -- jes staley's departure. staley stepped down in the midst of a regulatory probe into a probe guarding his relation ship with disgraced financier

jeffrey epstein. same-store sales rose two point 6%. analysts anticipated they would decline. pro basketball star lebron james and his teammate targeting a new name for their home court. now known as the staples center, next month, crypto.com will replace the office supply store chain as a sponsor. the arena will rip able -- will reveal its new name on christmas day. the deal is worth more than $700 million over 20 years. 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 ritika gupta. this is bloomberg. ♪

>> we are turning the economic

environment back on, but we had a massive amount of monetary and fiscal policy all over the world that is having an impact. i certainly feel like the market anticipates higher rates at this point in time. the question is how much, how quickly. there's a chance that central banks can unwind this massive stimulus in a way that doesn't create some sort of taper tantrum or some sort of a real shock to markets. but there's also a chance it can't be done that way. jonathan: that is how you say something without really saying it. tom: man, you heard me laughing. jonathan:jonathan: the ceo of goldman sachs. you think he just didn't want to step on the toes of jan hatzius there? tom: we are hermetically sealed, and i could hear you laughing as i am i think. jonathan: i didn't know david solomon was such an economist. on the one hand, this. on the one hand, that. it was actually a great conversation at the new economy for them over in singapore, but come on. tom: the printable owner of the

company said we need to be present in the pacific rim, whether it is beijing or singapore, and we have the courage to do this with the singapore government during the pandemic, and it is really important conversations on stage and off stage as well. that was, jan hatzius was taking notes. [laughter] jonathan: there's a chance there might be a tantrum. there's a chance there might not be. lisa: he actually did say something, though. tom: oh please, lisa. lisa: he did. when he said they are periods of time where greed has far outpaced fear. we are in one of those periods. my experience says those are not long-lived. the question is what is going to stop it. that is actually saying something. jonathan: i said it was an otherwise good conversation. just looking at fairly specific parts of it where he said something without saying much at all. tom: what i would say right here would get me in real trouble. jonathan: you stay out of trouble. tom: david wilson is looking at me saying, stay out of trouble. jonathan: equity futures

unchanged on the s&p. yields unchanged on the 10 year bond, 1.6319%. tom: thank you. greatly appreciate that. right now, we will move over. david wilson with his really wonderful, foundational book on all of this mumbo-jumbo, looks to total enterprise value. help me here. market cap plus debt, take away the cash. what are we looking at? dave: we are looking at it because the folks at prescott capitol looked at it in terms of the russell 1000 value and growth indexes, and just comparing the two, you look at our data, you see the russell 1000 growth enterprise value is about 5.4 times sales. you run the numbers on the value index, it is 2.4. you've got a three point gap between the two. that surpassed the peak back in 2000 as the dotcom era was

ending. o'er the flipside of that argument, that is a great rotation coming into value stocks. tom: this is fabulous. in the past, is the growthiness now the same as the growth -- the growthiness now the same as 2001? dave: it is not the same in that now you have companies that have a whole lot more revenue, a whole more earnings. it is less speculative in that regard. nonetheless, you do have that element, and you focus in on the electric vehicle makers as an example. look at rivian being the world's third-largest automaker, lucid group having more market value than ford or general motors. you have to wonder what people are anticipating that would justify those kinds of market

values, so there are pieces of what we saw back in 1999, 2000. it is the thing that you just can't put it across the broader market necessarily that way, especially when you figure the kind of revenue and earnings we are seeing out of microsoft and apple and alphabet and all the rest. lisa: the idea that this is becoming an increasingly common theme is one i would love to get your sense of. we were speaking with ben laidler earlier, saying we would possibly see a repeat of the first quarter of this year, and next year, the idea that we will see this rotation accelerate into value, into some of the less loved stocks, is that the new consensus? dave: it is getting there. there are certainly people anticipating it is going to happen. that said, bear in mind what happened this year. the fact that we can talk about the highest ev to sales on growth relative to value since

2000, it tells you what people were anticipating at the beginning of the year didn't exactly happen, so the question becomes if it starts to happen next year, would that be different? that really is the issue as you look forward in terms of the balance between growth and value stocks. tom: david wilson, thank you so much. for those of you on radio, it is just a huge green spiked up now as we saw in 2000 and thousand one -- and 2001. remember 12 months ago, when jon kyl up -- when jon golub pushed that tech is dead? the numbers 12 months trailing, nasdaq outperforms spx. granted, it includes december and all of that from last year. even on a year-to-date basis, nasdaq is only 100 something basis is away from that spx excellence. jonathan: where were we at the close last year?

3600. 3600 for the close last year on this specific day. last year in the middle of december, i put out all the calls for the following year from the lot. that day the s&p 500, middle of december, was at 3647. jp morgan looks for 4400. goldman sachs looks for 4300. and we all laughed. most people said that was ridiculous. here we are at 4700 at the close yesterday, and do you remember all of the small caps and how the russell would outperform the s&p? i think we've got about 5% of outperformance against the russell so far year-to-date. tom: i will take the point, nasdaq comp versus the nasdaq 100 has maybe a different feel to it. to all of our listeners and viewers, the certitude that you hear in these reports has to be leavened with a lot of humility. jonathan: the shock this year, people were bullish.

they were not bullish enough. lisa: i do think it is interesting there is such bifurcation between the likes of google and microsoft and, for example, amazon, which really lagged behind. there was a huge divergence within the tech giants. i do wonder how much this is actually generated by something real like the cloud, like true adoption in a transforming economy versus just a rates call. i am not clear on that. jonathan: what about the dispersion and some of the retail names? walmart has done nothing all year. amazon has done nothing all year. then you have home depot up 70% you to date. tom: people that are parsing this, you are always going to have winners and losers. the question is why. to me, it is the battle with amazon in the perception that some of these companies are doing better against amazon than others. jonathan: just quickly, your favorite hotel, the ned in london, they are opening an

outpost in new york city next year, according to open with the new york times -- according to "the new york times." he's just obsessed with it. there you go. equity futures unchanged. from new york, this is bloomberg. ♪ ♪

>> i think there are a lot of uncertainties across different axes of the market debate. >> the market is really torn with higher inflation. >> it is difficult to see how multiples expand further. >> we think this bull market has legs still. >> stocks at the end of the day are an inflation hedge. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. on radio, on television, a wednesday simulcast. it is eminent that i begin conversation with jonathan ferro. we are very eminent.

i'm