>> we are looking at a change in regime. we are looking at a fed facing real inflation. >> the fed put should be questioned when you have inflation. >> the fed is already behind the curve. >> by the time you get to the back half of 2022, things look very different. >> there's a split opinion on the fed, and if you are wrong, you find yourself in a much worse position. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. on radio, on television, two hours of economic data. at 10:00, ism manufacturing.

in 15 minutes, will it be a better than good labor economy? jonathan: then added onto payrolls on friday, and then to simmer 15 for fed chair jay powell in this federal reserve decision. are we on a slow march, may be a quicker march, towards that rate hike? tom: is he betting on an employment economy? jonathan: that was in include -- that was the conclusion you heard in his voice yesterday. if he is considering a quicker taper, is he also considering the next step? that is the debate the market will have. tom: what will he from chairman powell today? the house is different from the senate. it is a more fractious. lisa: we will hear more posturing in terms of issues that people want to push forward. jon ferro to said he's going to be looking forward to december 15 after that decision by the federal reserve. this is new. he was going to take the year off after november. this is different. we have action. jonathan: i was going to be

here for the 15th any 16 -- 15 to end the 16th, and then away -- 15th and the 16th, and then away. i thought this week, the central bank would become omicron dependent, and the surprise from yesterday was that we didn't see much of that from the chairman. tom: if you are just joining us on radio, on television, korea speaks, france speaks, and vendor lien -- and von der leyen in brussels spoke. that was something. we need a mandate? jonathan: the eu commission president vocally saying that she think we should consider mandatory vaccination across europe. that is a big shift. we have seen it in the likes of austria, germany considering it, now the whole of europe. tom: our guest this moment is so important. i am just going to say the data today more convincing then we saw two days ago. jonathan: up 55 on the s&p,

advancing 1.2%. a bounce on 10-year treasury yield's as well to 1.5749%. a bounce in crude, up by 3.8%. finally, a bit of movement in the two-year after chairman powell yesterday and again this morning. we approach 60 basis points at the front end of the curve. tom: jeff currie of goldman sachs out with an important perspective on oil today, saying everybody calm down. everybody is exiting. there is some gamma talk there as well. he's more optimistic about a move back up. right now on fixed income, bob michele joins us for a good conversation. to say he is head of global fixed income, currencies and commodities at jp morgan fixed income, barely describes it here. do you buy the dip in bonds? i am totally confused about what to do with full faith and credit or just credit right now. do you clip the coupon, or do you just go to cash? bob: you sell government bonds

and by credit -- and buy credit. there has been trimming this repricing. there's a lot of concern that the fed is going to move too quickly for the market and will lead to recession, and that is ultimately why the curve has inverted. that is nonsense. they are miles away from anything that looks normal, and i think this is an opportunity to get rid of any remaining government bonds you have, and then go back into the credit markets, go back into investment-grade and high-yield. you can do it in u.s. and europe, and those are the things you are buying on sale. jonathan: that were normal, what does that mean anymore? bob: for me, it means getting the central banks out of the market and leaving it to people like me to price. there's a very different operating model than what we are used to from the central banks. when i started in the business, the central banks extended

credit to the banking system, and they controlled the cost of funding, and they relied on the banks to extend credit into the economy. now they are controlling the cost of funding across the entire economy. it has gone too far. it has got to stop. participants in the market like myself have to get involved again. jonathan: that is a desire. is it a forecast? bob: what makes it a forecast is jay powell yesterday saying it is time for them to exit the market, which i think they are going to do. they should announce that they are going to double the pace of tapering, so they should be out of the market by march, and then we should see rate hikes pretty soon after that. so they are going to start that journey to normal, and we are going to help them on that path. lisa: i do wonder that when you say it is a buying opportunity for credit, particularly riskier credit, this is a good entry

point given the fact that we are still so vastly below where we were before the pandemic when it comes to yields. why is this an opportunity at 4.8% coupon on a junk-bond? bob: for a number of things. for one, corporate profitability still remains very high. companies have a lot of financial flexibility, and the company's we are talking to don't see any significant drop-off in aggregate final demand, so there topline is going to grow. they do see the input cost pressures, and they are starting to pass some of those along. by the way, they have been raising dividends and buying back shares. they can dial that down a bit if they need to. but right now we are looking at a consumer that is slush with cash, that is out there spending. there may be some headwinds from the omicron variant. we will see over the next couple of weeks and a couple of months. but for now, corporate profitability looks good. i want to be a part of that.

lisa: do you think central bankers will ever get out of this market and let people like you truly price it, or is there some sort of implicit put that if things get volatile enough, they will step right back in? bob: that is the debate. i start off by saying i'm use to one model, but when i look around our trading floor, a very large percentage of people only know the current model, which has existed since 2009, were central banks do intervene in all sectors of the bond market. so i think it is a tool that they have learned to deploy. it is not going to go away anytime soon, and they are going to have to gauge that with all of the other tools that they have. and yes, financial conditions indicators are one of the reasons that you buy gifts in risk assets. as long as they look at those things, they are backstopping the markets. tom: bob michele with us of jp morgan, on radio and television. i am going to ask you about the

pacific rim and about the greatness our david wilson notices in equities. what you do with international paper right now? i don't mean turkey. but what do you do with the jp morgan opportunity in international fixed income? bob: you go for it. we have had a lot of conversations about emerging markets, specifically emerging-market equities, and how earnings for companies across asia in particular have come in higher than anyone anticipated a year ago. the stocks have gone nowhere. they have even drifted down compared to the double-digit returns in the developed markets. next year is probably the year the stock prices catch up to earnings, but earnings are still going to look pretty good, so we are also buying credit in china and across the emerging markets. tom: is -- jonathan: is europe a piece of that as well? bob: yes. and in fact, we are looking over

the last bull of days of going back into the european bank sector, particularly the alternative, the additional tier one securities and lower tier two securities, the bank hybrid securities, so we do see some opportunities there as well. jonathan: let me finish with this question. what did you think of chairman powell making that move a week after securing renomination? did that stand out to you at all? bob: the easiest path for him would have been to do nothing and coast through the hearings on his reappointment. to suddenly start the tapering process, disrupt the markets, to me is taking some risk. what i want to know is what changed from monday to tuesday, and what is going to change today from yesterday. jonathan: i couldn't agree more. it has been a month since they announced tapering, and now we are having a conversation. what has changed in a month to say that maybe we should accelerate things?

tom: what use here he is a grizzled pro like bob michele getting down to the nitty-gritty. what changed in 24 hours? that is a whipsaw. for people not in the game on this, we are all talking about the market action. we are forgetting about the losses earned and made over the last 48 hours. i really wonder what the carnage is out there. jonathan: my final question to bob michele is usually football related, so we will keep it consistent. tom: not alabama-georgia. jonathan: not alabama and georgia this weekend. another championship for liverpool? bob: another championship for liverpool. off the charts. they are a goalscoring machine. jonathan: bob michele of jp morgan asset management, good to see you. you asked if he was comfortable -- we asked if he was more comfortable get back to 2% on tens or liverpool winning a championship.

did you notice that we are going to lose the premiership football off of hulu? taking all the games to peacock and usa, paramount. come on. tom: it is paul sweeney's fault. jonathan: how many streaming devices do we need to watch the football? tom: exactly. it is a crime. jonathan: it is a crime. bob, good to see you. thank you, sir. equities up 55 on the s&p, advancing 2%. from new york, was bond yields higher, and crude up to $68.28, for our audience worldwide, heard on radio, seen on tv, this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. federal reserve chair jerome has given a clear sign that this central bank -- chair jerome powell has given a clear sign that this central bank is moving

to tighter monetary policy. powell acknowledged that the trend of rising prices is proving more powerful and persistent than expected. that could lead to interest rate hikes sooner than anticipated. u.s. and japan are amongst the countries ready to impose new travel restrictions to restrict the spread of the omicron variant. president biden is expected to require all air travelers to the u.s. to be tested within a day of their departure. meanwhile, japan will deny reentry to foreign nationals returning from 10 african nations. japanese airlines have halted new inbound bookings for this month. a u.s. advisory panel has narrowly recommended approval of merck's coronavirus pill after a lengthy debate about the safety of the potentially game changing treatment. the pill isn't in the do treat mild-to-moderate covid in adults at risk of developing severe illness. once again come of vladimir putin is accusing the u.s. and its allies of threatening russia. he told foreign ambassadors at "the threat on our western frontier is growing."

the issue has to do with a buildup of russian forces near ukraine. tomorrow they will have the highest level talks in weeks. a trial is being held in new york. the issue was whether match and its controlling shareholder cheated tender executives out of billions by lowballing the dating app's valuation. 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. ♪ chair powell: the economy is very strong and inflationary pressures are high, and it is therefore appropriate in my view

to consider ramping up the taper of our asset purchases, which we announced at the november meeting, perhaps a few months sooner. jonathan: chairman powell shaking things up in his testimony to the senate banking committee yesterday. goes before the house a little later this morning. good morning. tom keene, lisa abramowicz, and jonathan ferro. here is the price action. equities up 54 on the s&p, advancing 1.2%. this equity market has been all over the place. the nasdaq 100 advancing 1.3%. into the bond market, yields down, yields up, yields down, yields up. that is the story again this wednesday. loads up four basis points to 1.4834%. crude with a bounce up by 3.2%. euro-dollar, $1.13. blame mike mckee. payrolls around the corner. that next fed meeting, december 15. tom: we need to note the real yield has done nothing here as we await adp.

jonathan: how much work to we need to do to tighten financial conditions? tom: we are so far away from the end of accommodation. we are so far away from that rare occurrence. restrictive as well. jonathan: lost all connection with any kind of meeting to what the word normal is. here's mike mckee. michael: good morning. we were trying to figure out exec you where the numbers come out, but they do add more jobs than we had in the prior month from adp. last month was 400 something. they have now revised it to 571. it is hard to tell because they come back and significant revise it. 534,000 for the adp employment change, which is better than the forecast of 520 5000, and it does support the idea that we saw some improvement in september. a lot of analysts inking the november numbers has gotten better, and that will support

the fed in its efforts to move toward tapering a low bit more quickly because now they have enough people who have the jobs. jonathan: no big moves on the back of these numbers. yields still higher at the front end by three basis points on twos. on tens, yields up to about 1.48%. tom: it is a different feel than it was two days ago. i know you are going to dive in and look at the subsections of adp, and we go over this every months, but more than any other month, i am tilted to tenant like a.m. this morning and ism manufacturing. how important is that to you, and how do you use the 10:00 a.m. data with what we see now at 8:15? michael: we are looking to see whether the manufacturing sector is strong, but there's really no question that it is at this point. we have seen signs that exports are ramping up, which would get an indication in the ism numbers, and we have seen signs obviously that prices are remaining high, so we will be looking at prices paid number

for ism. it is close to a record. if that continues, we will see more pressure on the fed to do something. you look at manufacturing in this adp report, they are predicting 50,000 additional jobs were created in manufacturing, which would be a significant number and suggest that maybe some of the logjam and finding workers is easing a little. lisa: the reason why so many people are trained heavily on the adp report is because perhaps it will give you some insight into friday's payrolls report, which may be one of the most important jobs reports of the year, especially given the new data dependent federal reserve. how much is there a connection between adp, between the jobs report, and a real-time indicator of a labor market still in flux by a pandemic? michael: it depends on what you want to use it for. if you want to use it to predict the absolute number you are going to get in terms of payrolls, it is not very good at that, but it does give you the

magnitude and direction of the way things are going in general, so it will add to the idea that we are seeing additional job gains and maybe lead some people to adjust their forecasts a little bit. the question is, for the payrolls report, how many people are coming back in the labor force? are we seeing that logjam break? tom: we are going to do this in honor of david wilson, looking at the equity market. you are going to jerome powell today are you what i notice is off of the crater of november 26, apple premarket with a $168 level is up. it is sort of the american stock. it is like people are voting for technology even though president biden is worrying about a part of america that is not participating. michael: i think what has happened is a little bit beyond

my pay grade. dave wilson is better at this that i am. when you have concerns about what is going to happen to the economy because of the virus, people tend to think that tech stocks are going to be more valuable because people are going to be working from home and using more technology. that may have something to do with it. the issue that came up this morning somebody asked me about was the reaction in the markets to powell yesterday. obviously there was a big reaction in bonds and stocks. they both sold off. today they seem to be coming back, which would be good news for the fed, basically telling them we are not going to have a major taper tantrum, that the market accepts the idea of the fed changing his mind. jonathan: mike, thank you. just reading the headline for mayor bill de blasio. time for a total vaccine mandate for all air travel. just the opinion coming from new york city mayor bill de blasio. incidentally, it is going to be interesting to see what the adminstration does tomorrow, if they unveiled new travel

restrictions for testing. how do they draw distinction between what is required for people who have been vaccinated and people who haven't? if there is not a distinction between the two, given their push to do this, we have got to ask why. tom: we are all living it. it seems like people want to move around. lisa mentioned that earlier. i think all of the politicians, including the exiting the blahs you -- exiting de blasio, are saying let's go. jonathan: he is discussing a mandate for air travel. they are discussing a mandate more broadly in europe this morning. tom: we have more with elaine kamarck of the brookings institute. how has president biden screwed up? elaine: well, i think there is one screwup, which was

afghanistan. that began a slide down. but i think basically, he is coping with a very complicated situation. if you haven't read it, have a look at the book on the carter presidency. the chapter on inflation is just heartbreaking because there's not many policy levers that presidents have to deal with inflation. the fed has some, and the president can jawbone, etc., but a president facing an inflationary cycle is really any mess with no good options. i think the most important thing the president is doing now is acknowledging that there is inflation happening, hoping that it is transitory, as some of his economists have indicated. tom: you on the high ground on the compare and contrast to the 1970's. when people say we risk the is

more 1970's, how do you respond? elaine: i don't think we can quite compare it. you can compare the political angst that was going on in the 1970's, but we can't quite compare it because we have this unique situation in the pandemic hanging over us. we have all of the disruption. we have the supply chain problems, etc. there are some people who think we are going to come out of this just fine by the spring. biden will have passed two major bills. the money will start flowing into economy. the logjams of the ports will be on jammed. things will be be settle down just in time so that the midterm elections are not a bloodbath that some people think they are going to be. lisa: is there any chance of that? is there any chance the democrats can salvage the majority in the house? elaine: it will be tough to

salvage in the house, but the senate i think is quite doable. you may see in a republican majority in the house and a democratic takeover in the senate, so as long as there is one house, i think the president will be very pleased. and also, in the house, the one thing people are forgetting is that what the census showed us was that 90% of the counties that voted for president trump have lost population, and the areas that voted for biden, the suburbs, the urban centers, they gained population in the last 10 years. it is glacial, but there is a mammoth demographic shift going on here which makes it easier for the democrats to avoid at least a terrific bloodbath in the midterms. lisa: i have to go to some of the controversy over travel in light of the pandemic, and many

countries are becoming more closed. i am wondering, from an election standpoint, how this is being translated to the public for both the democrats and republicans, this knee-jerk response to closed borders at a time when the science really says this virus goes beyond. elaine: well, i think this is one of the trickiest things politicians have to deal with. clearly, in not just our country, but all of the world, people are sick of staying home. they are sick of the closures. they are sick of the mandates. all sorts of paranoia is arising around the mandates. there's this bizarre notion that someone floated the other day that in south africa, they decided to help joe biden with the midterms by deciding to have a new covid variant. i mean, there's all sorts of craziness going on out there. i think the politicians have a tough road because they want to keep the spread down because

they get blamed if the spread gets out of control in hospitals are overrun, etc. on the other hand, people are really tired of staying home. so they will have to push the vaccines, push testing as much as they can, and try to get through this until we get to another long decline in the virus. jonathan: it certainly help to get crew down -- helped get crude down. not saying that was the intention. elaine, always enjoy hearing from you. your commodity markets, a bounce back up to $68, up more than 2% this morning. tom: there's a million opinions out there this morning. jeff currie of goldman sachs writing up on oil. javier blas also important, given a substantial retreat here. jeff currie thing for a real clearing of the market here, rampant selling against trades, and he would look that we reprice higher.

jonathan: the outlook for demand just got a sledgehammer take into it in friday's session, which i think the likes of jeff currie and others think maybe it was taken too far, too soon. for new york, for our audience worldwide, with equities up this morning, good morning. this is bloomberg. ♪

jonathan: the adp report, 544,000. the median estimate, 548,000. going into the opening, up 52. on the advancing -- on the s&p 500, advancing little more than 1%. is the bounce you're looking for after monday and tuesday. hard to keep up. the move fades, 1.4698 on 10. tom: let's get right to it with the data charting as we going to claims tomorrow and jobs on friday. we get a briefing from julia coronado. wonderful work at the fed over the years.

iconic work on the tough part of the 2007 crash. i want to go back to first principles, the isl m model. i want to look at what nobody talks about. the is curve. there is a major bet by david blanchflower that we will see disinflation x quarters out. does that come from that is curve shifting so hard? julia: you are talking about a productivity boom that would lower the inflation temperature because supply capacity would expand. that is one possibility. investment is running incredibly strong. we know the pandemic has full forward a lot of business transformation projects. especially in a tight labor market, the incentives are to

reduce labor input. that would be productivity enhancing. we definitely can expect as a baseline forecast the productivity performance this cycle will be better than last cycle. everything points to that. that would be part of it. one of the things danny blanchflower has been looking at is the decline in consumer sentiment and whether that will weigh on spending. that would be a much more negative demand decline. we have not seen that in the data. consumer sentiment has fallen off a couple of months. delta inflation. consumers are powering ahead and reporting the best labor market they have seen in decades. tom: can you inform us on the back that if we get productivity, we do not get wage growth. that is the great fear of those

worried about high interest rates. julia: the thing with productivity is you can get wage growth. that is the story of the 1990's. we had some of the strongest real wage growth, which was just fine because productivity was delivering that. that is what we are seeing in some of the leisure and hospitality, the restaurants paying their workers more but reducing their labor input and therefore not having to you -- not having to raise their prices as much. that is the sweet spot that workers can get raises if there is a shift in regime such as the labor market is tightening up and labor incomes can keep up. the labor share of gdp cannot decline like it did last cycle. then workers can benefit from those productivity gains and we can get that nirvana of moderate inflation pressures and good

real wage growth and stronger topline growth and good profitability. lisa: how long can this nirvana last if wage growth is not keeping pace with consumer inflation? julia: that is the problem of the last cycle, and actually the last two, where when wages do not keep pace and labor share of gdp fell. that contributed to some of the low inflationary pressures, the fragility of the cycle, the weak demand environment. you need robust demand to meet the feds to percent target. if we go back to the old world where workers are gamed from growth, workers do not get their share, then you can get back into that disinflationary environment. all signs point to something that looks better this cycle.

that is the dividend of the go big go early macro strategy. we are all focused on the negatives of the high inflation. over the next couple of years what we can see is better productivity. that could meet inflation can cool back down towards the fed target, and profitability could remain robust and wages could remain robust. that will be what you hope for. so far so good. lisa: one aspect does raise big questions. that is the profit margins for u.s. corporations remain at the highest knowing back to the 1950's. yes they've raise the wages of their employees but their profits have risen way more at a time when you do see the consumer prices outpacing wage growth. how long can that last? is this what is occurring at a time labor is not have the organization it did in the

1980's? julia: great question. what we are seeing in record profitability is we are booming. the go big, go early macro strategy was you boom out of a recession, you do not limp out of a recession. we are booming, the economy is booming. wages are booming. demand is booming. where do we settle down? are firms able to match the challenge of the tight labor market with productivity enhancing investments? if so, they can maintain their margins as topline grows cool. we are not going to see wages continue rising at 5% annualized pace next year. do they cool to something that keeps pace with the prices and allows them to continue spending at a healthy pace? what we are hearing from

companies as they are actively investing into this and trying to meet these challenges. we will see. we have seen a lot of resiliency. most people are forecasting a good year next year as well. tom: i am totally confused. i am truly confused on the idea of what is the savings and how will it be used at the margins? what do you say? julia: that is uncertainty. i do not like the term excess savings, which presumes the prior level of savings was optimal in some way, and we know the distribution of income and wealth was so unequal many households come in fact a majority of households did not have a minimum of precautionary savings. we do not know. now let more households -- now a

lot more households do have cash on hand. we have seen the savings rate return to pre-covid levels. that still leaves a chunk of money in reserve and we do not know how much consumers will dip into that and exhaust it. we do know we are not going to get the repeat of the fiscal support that delivered that cash. at a minimum, households are going to be making decisions differently based on their expectations for labor income, whether or not they dip into that cash reserve will tell us a little bit about the growth impulse this year, but going forward we are looking at a more organic growth momentum. the baton is being passed back from policy support to private sector momentum. lisa: have we learned from jay powell yesterday that inflation is now more important mandate that employment for the federal reserve? julia: yes.

i think the way he will describe it in the way he described it yesterday and will elaborate on it is actually they may not be seeing a conflict in their mandate. the labor market, if we are adding half a million jobs a month, we will get to full employment quick. it may be one thing they have learned from the october round of data is that inflation surprised again to the upside, but so did jobs and so did consumer spending. the overall picture is that of a boom. they do not need to be as supportive. they need to appropriately recalibrate policy, that means speeding up tapering and bringing forward rate hikes. jonathan: thanks for being with us. julia coronado there. the words of the federal reserve chairman come at this point the economy is strong and inflationary pressures are high,

it is therefore appropriate to consider wrapping up the taper of our asset purchases a few months sooner. that will be the conversation two weeks from today at the federal reserve. tom: capital economics says adp says faster taper. jonathan: and then onto payrolls. tom: that is where we are. i'm not focusing well because today lisa had a nailed it and you and i did nothing. jonathan: she wins every morning. tom: why are we here? jonathan: if we took scores we would lose every morning. tom: i give up. can you say wants to meet, tom, you nailed it? lisa: we said that. we said that about chickens. tom: you threw a chicken at me you are so upset about it. lisa: [laughter] jonathan: of 58 on the s&p. tom: check it is a big deal in

arkansas. the first time i saw tyson's chicken, it was yellow. that is their marketing gimmick. jonathan: lisa shalett of morgan stanley will join us at the top of by our. -- at the top of the hour. i look forward to the opportunity to be on my own and operate in a different gear. more relaxed. it is very zen from 9:00 to 10:00. lisa: weight is the book? jonathan: the book comes out for christmas. lisa: what is the title? jonathan: we have not got there yet. tom: he sold the movie rights from capri. lisa: who plays john? jonathan: i am playing myself. like sylvester stallone in rocky. he wanted to play himself. the tale of a hero. it was in philadelphia. equities up by 1%. i am going. this is bloomberg. ritika: at the u.s. supreme

court today, it is the most consequential abortion case in a generation. justices will listen to arguments on mississippi's ban on abortion after 15 weeks and the landmark roe v. wade ruling. a decision upholding the law would give states the okada curve access to abortion. cases of the omicron variant are popping up. meanwhile, president biden is expected to announce new pre-boarding testing requirements for all travelers in the u.s.. japanese airlines have halted new inbound bookings for this month. in turkey the central bank is struggling to shore up the lira. it is the bank's first intervention in the foreign exchange market in years. it has been in freefall since erdogan renewed his commitment to lower interest rates. exxon is promising to lower

greenhouse gas emissions 20% by 2030. it is the most ambitious also far but fall short of commitments made by its rival. it comes after a board room coup by investors seeking major changes in exxons climate strategy. -- is returning to capitol hill. the last time she was there she released documents saying facebook knew about the mental health -- she will face questions on how to fix the problem she revealed. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am ritika gupta. this is bloomberg. ♪

>> there is a bit of a question created around the new variant. over the coming days as people

get more comfort that the vaccine will hold, we will keep moving through it. we should not see too much of an impact to demand. tom: there we are with robin hayes of jetblue, the chief executive officer. for all of us, particular travel picks up, we are staggering on bloomberg surveillance, particular with our aviation coverage, from story to story. guy johnson has led our coverage on airlines, on the transatlantic, on the global come in joins us now. i do understand that with our wonderful guest, the key question is the new manchester united and how they will do with arsenal this weekend. other than that, it is getting the planes in the air. guy: i think that will be a critical question for shai weiss. we could start on the football. arsenal?

manchester united? that is what tom wants to know about. shai: are we live? arsenal, of course. guy: we have an answer. let's talk about what else is going on, now that we have cleared that up. omicron. what impact is that having on the business? shai: i am reminded that we met 23 days ago outside of terminal 23 in heathrow for the day of opening up the corridor between u.k. and the u.s. here we are 23 days later and we have a new variant. i think it is early days on this one. my intuition tells me it is probably more trans visible. not -- more transmissible, not as severe. it probably emerged a few weeks ago, possibly in october. we have adapted. south africa has shut down.

there is a flights from south africa back to the u.k.. we will deal with it. this industry has shown resiliency and so are we. jonathan: the government -- guy: the governments are reacting much more quickly. has that surprise you and is that the right or wrong thing to do? shai: it has surprised me and i think it is the wrong thing to do. travel is so omnipresent in our lives. you put accommodation of politics and pandemic, airlines are the easy target for changing of signals to the public. i was not surprised. i they we should evaluate the situation quickly. what i am telling my team is as quickly as you introduced those measures, if things turn out they are not as significant, take them back immediately as well. testing, opening of borders. guy: you were the north atlantic

may be shut down again? shai: i am not that concerned about that based on the comments president biden made a few days ago, which were the most calm of the political leaders. let's look at the information. there should be data driven. that will make the calls. travel is not the way to stop a pandemic. this variant is everywhere in the world. shutting borders hurts houses and millions of people. businesses and gdp is reliant on it and read every single piece of help we can get. travel enables that. lisa: what has the north -- guy: what has the north atlantic looked like since november 8? what does pricing the plight? what does pricing look like around the holidays? give me a data dump as to what it looks like since then? shai: i will try to be organized in my comments on the data dump.

post november 8, tremendous bookings across the atlantic. we have seen load factors building nicely in december, and we will probably still be flying between 60% to 70% load factors. in the week of the eighth, you cannot get a seat on a virgin atlantic from london to the u.s.. the variant has changed this a bit, but i think we are neutral in december. new bookings are offsetting cancellations, there have been cancellations. for easter and the summer, we are still building momentum and still building load factors. if you look at the expected january load factor, it is trailing quite nicely come anywhere in 60% to 70%, some up to 80%. a very good response to the opening of the borders. omicron is a dampening effect,

but not enough as a long-haul carrier focused across the atlantic -- neutral, at this point. guy: what is the state of your finances at the moment? there is a suggestion you are in talks with the shareholders to raise more money. can you confirm or deny that? are you comfortable in terms of where you are with the balance sheet? there was talk of an ipo. you've never confirmed that to me. is there still talk of an idea? is that a discussion that is happening? shai: we were trailing ahead of our plans i significant margins leading up to november and december. we have a cushion. any airline executive is thinking about their capital structure. we are never short of needing more capital. all options remain on the table. we explore them robustly. i am very confident that virgin

atlantic will have a good balance sheet going into the recovery phase that starts in december and onto december 2022. guy: arsenal up by how many? shai: 2-1. guy: arsenal over manchester united. shai weiss has spoken. tom: manchester united, so much going on. we look at claims tomorrow and onto the jobs report. before that we see this important ism statistic. i'm not a big believer. this time i am wrong. it is a big deal. lisa: what we have seen through ism manufacturing survey is some healing of reparation. there is a repair going on. we are seeing supply chains see the worst of what they've experienced.

you are still seeing a lot of complaints. this is where the headline number will be interesting. diving underneath that to the commentary will be more so. how much is manufacturing picking up despite the disruptions, not because of that easing? tom: sustained equities over the show. dow futures up 331 points, spx up 56 points, and the vix in. the angst is like a 28 or 830 a 30 vix and we are not there. lisa: what strikes me is how much people are being whipsawed. the idea the moves we are seeing in the market are not convictions but shifting around rapidly at a time they already had an amazing year. risk management strategies seem to be rolling the price action. tom: my perspective of the last two weeks is how much time lisa abramowicz has taken off. it is good to have you back with

us. jon ferro will be here tomorrow. onto the jobs report on friday. at 10:00 this morning, ism manufacturing. important conversation from washington. this is bloomberg. good morning. ♪

jonathan: looking for a bounce this morning. from new york city, good morning. equity market up 55, advancing more than 1%.

"the countdown to the open" starts right now. >> everything you need to get set for the start of u.s. trading. this is "bloomberg: the open" with jonathan ferro. jonathan: live from new york city, we begin with the big issue, questioning the fed put. >> i do not think it is durable at all. >> the fed put should be questioned when you have inflation. >> the high levels of inflation. >> the fed has only started talking about inflation. >> it is very messy. >> it is clear central bankers want to remove accommodation. >> the fed is in a position where they can accelerate the taper. >> and a step back from the current policy