♪ >> the fed is already behind. >> everything points to them getting much more serious on inflation. >> we might see core inflation at 6.5% potentially in february. >> they are going to start that journey to normal and we are going to help them on that path. >> the market has positioned itself for a little more normalization. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: we are getting an avalanche of rate hike calls this week. 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 advancing 0.6% on the s&p 500. rate hikes for 2022. tom: we went through it. i've been waiting for the data to come in. i'm looking at the wall of

information we've got on the zeitgeist. brazil is going to come out with data. turkey is going to come out with data. the u.s. is going to come out with data at it: 30 today, and we will all move forward. the market is up. jonathan: the market is saying, we don't know. yet they are willing to say 2020 to two liftoff is just off the corner and then some. lisa: jay powell basically gave them that signal when he talked about the taper. this with a game changer. the interesting thing is, as tom said, the market is up. we are not seeing a tightening in financial conditions even if you see -- even as you see people pricing in rate hikes for 2022 and 2023. jonathan: the optimism of q1, and then we look at q4 and rollover. tom: i am going to talk about the duration. everyone is short-term two years. you learn a lot from the 30

year. through the week, the 30 year has come in a low bit more to 1.77%. it was at 2% two cups of coffee ago. jonathan: that curve is flatter. lisa: the issue to me, is it significant in terms of a recession predictor? people say this is typically the most reliable indicator of a downturn, but we are years away from that. jim reed of deutsche bank saying it is typically 18 months after inversion, and we are probably a year or two from inversion. jonathan: do you think they want to hike if this is the direction of travel? lisa: do you think it really matters? bob michele of jp morgan was saying yesterday this is just people watching out of their positions. right now the balance of risk with inflation is perhaps necessitating them to move because otherwise, the market will do it for them. tom: i hate to say this, that is the smartest comment i've heard today, which is this idea of don't underestimate washing out of positions.

i think that is important. jonathan: yields higher by three or four basis points on tens, up to 1.44 percent. your equity market futures up 31, advancing 0.7%. equities pushing higher on the s&p 500. euro-dollar, $1.1337. $66 on wti. lisa: today at eight: 30, we get u.s. initial jobless claims. the expectation is for us not to see a repeat of last week's 199,000 claims, the lowest number of people filing for jobless benefits going back to 1969. here is my key question for the federal reserve. what is the threshold? how good does the job market have to be for them to go forward versus focus on an inclusive labor market recovery? how much is inflation sucking the oxygen out of the room?

today, opec+ is wrapping up its second day of talks. the plan was to increase. will they continue to do that given that people are now worried about omicron, given that the price of oil has climbed by more than 20% since late october, and will they do that if they know that president biden is desperately hoping that the increased production? he is still planning to release oil from the strategic oil reserves. president biden is planning to speak on the latest steps to fight covid-19. what is he going to say? he's going to tell people to be more vaccinated -- to be vaccinated, to be more cautious, but people are exhausted. how does he avoid a surge in the winter when this does hinge on an economic recovery, and the midterm election next year do hinge upon? jonathan: more on this now. apple, -2.3% in the premarket.

great reporting from that he met bloomberg. the company has told component suppliers that demand for the iphone 13 lineup has weakened, according to people familiar with the matter. we are down 2.34% to $160.91. tom: to remind on profit ability and use of cash, apple is still being modeled with $100 billion in free cash flow off the bloomberg terminal. i don't even know how to grasp that, that is such a big number. jonathan: there are still symbols out there -- still some bulls out there. if you haven't got it ready, i'm not going to buy it. lisa: part of it is that the 13 model is not that different from the 12 model, and they are going to have a more updated version in 2022.

so if it takes long enough, people are going to wait for that extroversion. how much of this is people getting tired of waiting for the new version? jonathan: or is matt miller said, you just don't like it. maybe they just don't like the phone. tom: i am still paying for afterthought's lost airpods, the things that go in your ears. jonathan: apparently the kids are going back to the wired headphones. tom: we are doing that. vet bill has a set now. you've got to have the little dingy-dongy thing. jonathan: technology updates, that's what people tuned in for. [laughter] subadra rajappa of socgen joins us. the curve is flatter. what is your message for clients at the moment? subadra: the messaging is very

pessimistic. the market generally speaking seems to be holding up fine. equities are doing ok. but the yield curve flattening as much as it has is somewhat troubling. as you pointed to earlier on in the segment, where do we go from here? this is where we are starting from, and the fed is about to deliver may be four or five hikes in the next year. what happens to the curve? will the fed actually allow the curve to flatten too much and policy ultimately lead to a recession? that is why i'm struggling with how flat the curve is. to me, i feel like the fed is not going to allow the curve to flatten too much and tighten policy that way. lisa: what do you do with the flattening yield curve? do you take down risk, or do you just say this is something to watch to get a sense of the trajectory of fed policy?

subadra: a lot of this might be position unwinds and things like that, but you've got to ask yourself why are you in treasury bonds with 10 around 1.4 or 1.45%? to me it doesn't make sense when you're consistently getting -1% returns to hold onto treasuries. it really doesn't make a lot of sense to pile money into treasuries at these levels. tom: your company, for decades, owns the high ground on derivative mass. where is the derivative opportunity now in fixed income? subadra: i think investors have broadly been very careful. volatility has been very high. in the past, you have seen investors come in and sell volatility and own extra carry by way of short vol strategies,

but right now, they don't know how things are going to go, and if anything, if you look at the bond market and try to extrapolate the passive where 10-year gilts could be a year from now, it could be anywhere between 270 on the upside and 1% on the downside. so there's an extremely wide band of probabilities of where things could go from here on, and i think investors broadly speaking are very cautious. jonathan: we are getting a ton of questions on this from audience members. there's a difference when someone speaks for them self in a speech, when they speak for the committee in a fed news conference, and when they provide testimony to congress. do you think that is what shapes things perhaps this week for the fed chair, that the audience was an audience of politicians, of people that are going to renominate him? subadra: the audience is always the world because everyone is listening to everywhere he is saying. it is a good thing he's already

gotten the nod for riemann nomination from the biden administration. i don't think you will have much of an issue on that. i think you will want to focus on messaging, jettisoning the transition -- or i should say, the transient nature of inflation argument, and focusing much more on perhaps speeding up tapering. so i think that is the message he really wanted to get out in the testimony. i don't think he is really that concerned about getting renominated or any of that because i think broadly speaking, he wants to tee the markets up so that any change in the taper announcement is not a surprise. jonathan: he's done that in a big way this week. thank you, subadra rajappa of socgen. we have these conversations on programs like this, and then you get messages from other people saying this is what i want to know, what is behind this. and of course, you never know what an individual is thinking,

and i don't one to get into the business of working that out. lisa:lisa: there's skepticism of a sudden pit and why the pivot was done so quickly. nonetheless, the data does it seem to support economists as well. it is not going to die down so quickly. jonathan: it is not just the fed chair saying this. there's a lot on the committee now, singing from the same hymn sheet. tom: santa is looking for this. the cost drop pro headphones. you need this. jonathan: how much is it? tom: i don't know. jon, you would look so good in that. jonathan: what are they? those look dreadful. tom: i don't know. this is what the kids want. jonathan: if this is the shopping channel, i'm not selling those. [laughter] i care about our audience memory. what are they? what is the cable? what is the band around the top?

tom: you've got to have those. jonathan: i will take a pass. from new york city, this is bloomberg. ritika: with the first word news, i'm ritika gupta. apple has a problem it was not inspecting with the iphone 13. bloomberg has learned the company told suppliers that demand for its recent model has declined. apple has cut its iphone 13 production goal because of a lack of parts. five month ago, president biden declared the u.s. was on the verge of defeating the coronavirus. now the virus is threatening resurgence across the country, and the omicron variant has been detected. today the president will lay out his latest plan to quell the pandemic. it will include stricter testing for travelers from abroad and extending a mask mandate. the u.s. government has moved another day closer to a brief we can shut down. congressional democrats and republicans are still trying to reach an agreement to pass a temporary spending bill for friday's deadline.

leaders have not been able to turn a threat over their objections to federal vaccine and testing mandates. the turkish lira is trading near a record low again after president erdogan fired the country's finance minister an ongoing fight over monetary policy in turkey. erdogan once lower rates -- shared one want -- erdogan wants lower rates. 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 u.s. needs to get back on a sustainable fiscal

path, where the taxes are rolling in, where employment is high. the inflation we are seeing is still clearly connected to pandemic related factors. i would also add that it has spread more broadly in the economy and i think that the risk of persistent higher inflation is clearly risen. jonathan: fed chair jay powell. inflation is broader, stickier, and we need to adapt, and that is what we are doing. equities are positive on the s&p , positive 0.4%. nasdaq futures are down about 0.1%. up a basis point on tens. speaking of fade, get to today's stoxx 600. over in europe, session lows, -1.5%. with pointing up at europe was closed when we started to slide a little more late in the session stateside yesterday. add to that session lows, and we rollover a bit on the s&p, too.

tom: for our american listeners and viewers, how devoid of technology is the stoxx europe 600 jonathan: the beauty of the bloomberg terminal as i can give you the weightings just like that. health care is about 15%. industrials is about 13%. technology right now is about 7.5%. tom: that is amazing. jonathan: if i get you the s&p 500. tom: why don't you use the dow? [laughter] jonathan: on a sector basis, 29% information and technology compared to 7.5% on the stoxx 600. that is the issue right now. that is why we can see the valuations spread between europe and the united states. it has been that way for a long time. tom: maybe if you come over here, you fail, you succeed, and the mr. jobs will start a small company like apple. i hereby declare on oath that i

absolutely and entirely renounce and abjure all allegiance and fidelity to any foreign prince, potentate, state, or sovereignty. that is the oath to become a u.s. citizen. we are thrilled that kb became a citizen yesterday. millie wilkins joins us. on the immigration debate, where does that sits right now in washington? emily: the hot news on immigration is all wrapped up in that social welfare and tax plan, the so-called build back better. democrats have been pushing to get emigration into that package. progressives have pushed for it. they know it is important for hispanic and latino voters. the fact of the matter is that the reconciliation, not everything can go through that process. it has to be stuff that really relates to federal revenue and spending, and a lot of proposals on immigration not have that direct connection. it is more of an indirect thing.

so lots of discussion and debate right now about what, if anything, can be included on that, but that is about the only moment in we have. it is a very partisan issue. it is something congress has not really delved into since 2013, and there's no signs that there is the momentum to do anything big on it besides whatever small thing can go into this larger package. tom: it is a fair question i think to say where do we stand on the importing of professionals like at bloomberg, including our computer people today. where do we stand on that and amick that microsoft needs immigrants? emily: if you delve into immigration policy, there's actually a lot of bipartisan consensus. there is also a sense that the u.s. needs to get the workers in maine to harvest lobsters, the workers and farmlands across the

u.s. to be able to harvest, to make sure it got them left there. a lot of it gets stuck in that question of citizenship. obviously citizenship is not necessarily needed in the u.s., but unite to -- but you need to try to get as much ado can on there. everyone wants to add more and more to a package because there's a sense that so few things actually get to the president's desk and signed into law that anything that has momentum isn't immediately weighed down by other priorities. lisa: let's talk about some of the restrictions we see going forward. a friend of mine is going home to nigeria. doesn't know if they will be able to come back. it is unclear what the restrictions will be in a month

or two months, whether there will be a quarantine period. what is the sense of tolerance in the political war, the nations of doing so on both sides of the aisle? emily: we will hear joe biden address this a little later today. we are not seeing at this point any quarantine for travelers. obviously things are fluid. it could shift as we learn more about the omicron variant, but the changes are really more directed towards keeping the economy -- cdc guidance that could potentially allow students to stay in schools even if they have been exposed to the coronavirus. there's also discussion about how to make sure that workforces and workers are able to be on the job and that the economy can keep going.

we are still going to see things like mask mandates, booster shots for all americans. divide and the adminstration is continuing to push those things. but if you look at what they're going to be coming out with today, it really does speak to the fact that the biden administration is very well aware that americans want the economy to reopen, that they want to put dependent behind them, and trying to figure out the rules and processes that need to be in place for that to happen. jonathan: thank you as always. there's a big difference between what we might hear from the administration and what we are seeing play out in europe right now. when it comes to travel, the african nations are a separate issue right. for the rest of the world, this is about stricter testing right now. the thing that was in the washington post earlier this week, the story was whether we would have this additional five to eight day quarantine being introduced. i have not heard that just yet. for the airlines, but we have been talking about, if you said five to eight day quarantine,

the airlines are going to struggle with that going into the holiday season. lisa: that seems to be the balance in terms of the mood in the united states. it is different in europe. it is different in places like portugal, which have upwards of 80% vaccination rates, and is implement and pretty strict lockdown types of measures. you do wonder whether the threshold will become more unified with people trying to travel around the world. jonathan: we fade a little bit this morning, negative about 1.5% on the stoxx 600. you'll's fate a little bit on tens to 1.43% this morning. tom: as i mentioned earlier, the 30 year bond speaks volumes. it has been to me the item of the week. jonathan: near the lows of the year. you are watching "bloomberg surveillance" on tv, listening

to it on radio. don't forget, we are live on sirius xm channel 119. from new york city, alongside tom keene and lisa abramowicz, i'm jonathan ferro. this is bloomberg. ♪

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jonathan: 60 minutes ago i said i've got no idea what is going on. this equity market has faded once again. equity futures up just 0.2%. nasdaq futures lower, -0.2%. russian futures well-off session highs. we've been putting together all of this stuff about the omicron variant, but also trying to discuss what is going on with the federal reserve. there's a lot taking place, a lot of factors behind some of the moves we have seen. let's look at tuesday, tens, and 30's. twos are just short of where they were last week. 59 basis points now. here's the spread at the moment for the rate hike calls. barclays looks for three next year, four in 2023.

all the way out in 2023, morgan stanley saying patients, q1 2020 three. most of wall street is in and around may, june, july for that left off of the federal reserve. what i think will be more important here is to work out not would lift off is, but the repast looks like from then onwards. do they need to do more? rates right now are deeply negative on a real basis. that is the two-year sorted out. let's talk about the yield curve. twos-tens coming into this year, 79 basis points. then we started to steepen as we priced in the positive demand stock. all of that enthusiasm about the year ahead, the curve was steeper into the end of q1, and now we are staring down the barrel of the flattest levels of the year so far. if you are the federal reserve right now and you are thinking about making a move or at least

retaining that optionality, how keen will you be to make a move with the yield curve moving in this direction? tom: i would suggest there are phd's at the fed as well that are talking about oil. we will get to that in a moment. these uncertainties are huge, and they fold into the shape of that curve. jonathan: they fold into the estimate we are looking at tomorrow. we will talk about the labor market when we get jobless claims. 800,000, the high estimate. south of 400,000 at the low end. the different between the two-year yield and a 10 year yield, the cross as action. let's get you some movers this morning and say good morning to kailey leinz. kailey: you mentioned that nasdaq futures are lower. one big heavy weight is apple. bloomberg reporting overnight that apple told its suppliers man for the item -- the iphone 13 is waning. apple cut production targets for its new iphone because of supply-side challenges for this

year. people may be waiting for the model after that. some suppliers all down in the range of 2% to 3% as well. corbo, skyworks, qualcomm all under pressure. snowflake is a big mover to the upside. the cloud software company actually reported after the bell yesterday and gave a really bullish forecast. that stock is up about 13%. boeing is higher. this is a 737 max story. china is poison it for return to the skies. a codeveloper of black to smithkline -- of glaxosmithkline's antibody treatment looks like it will be effective against omicron. the vaccine makers not so lucky. moderna looks like it will be down for a third day. it is already down 16% in the last three days, lower again this morning. tom: thank you so much.

if you are part of global wall street this morning, this is not only the interview of the day, but maybe the interview of 2021. long ago and far away at deutsche bank, adams a minsky had a team to dream of on hydrocarbons. they were read cover to cover worldwide. christyan malek part of that team, and he is now at j.p. morgan, where he has a powerpoint migrating base case oil out to $80 with possibilities well over $100 a barrel and even out to $150 a barrel. off the j.p. morgan london desk, he joins us this morning. within all of the hyper detail of your wonderful report is the idea that united states shale production will not come on. boy, do a lot of people disagree with you. why are you skeptical shale will produce at $100 a barrel. christyan: thank you for your

kind comments. shale is in a straitjacket because of the dividends, and they got to decarbonize. when you layer all of this on, the reality of this fiscal baggage related in part to transition, related in part to the black premium which is, i am a shale oil company. i am going to give more cash act now. when you put that altogether, clearing $75 to $80 before you are able to to invest and grow your capex once again, three years ago that was down at $40, 50 dollars, so things have fundamentally changed. it is not just the majors. jonathan: $150 on brent, let's go there. opec, you say show me the barrels. let's go through it. christyan: i think ultimately, what we have now here, i love

today's headlines. we can debate this all day long. the question people are asking is what do they actually have over the medium term. we have been running this super cycle thesis from spring of last year, and it was almost right in front of us. we are obsessed with underinvestment in the majors. what about opec? you've got fiscal problems, whether broader issues, supply chain issues. you throw them altogether, and our policy comes out at half of what the market deems it to be. what does that actually mean? we don't think that can actually clear 250,000, up to that amount by the second half of next year, so when you run that analysis, you get around $120. but fast forward and that scenario, there is this sort of penny dropping moment in the market, which is these guys don't have the spare capacity. when we have looked at 40 years of history around when has spare

capacity been in the single digits, that is when the risk premium shoots up, and that is how you get to $150. it is the market saying we've got no cushion here anymore. jonathan: i want to go through these numbers with you so our audience can get their heads around them. for opec spare capacity, you are at 2 million. consensus is at 4.8. that is a 2.8 million spread. can you walk me through the numbers, why you think everybody is around five? christyan: we've gone through the west african countries, and what we are looking at is the oil in the ground, how they finance the oil production effectively as the spare capacity, and where the logistics of the supply chain are and whether it is conducive for them to be able to do it. when we look at this, we break it into high risk, low risk, and

medium risk countries. high risk countries, you got iran, libya. remove the sanctions, and let's see what you got in terms of actual barrels. we think they have more than 240,000 in addition to where they are already out at the moment. then we moved to the medium risk, and russia is in that camp because they have had reservoir problems. they have had to deliver storage into their own inventories. equally, they are under invested and they can't act quickly enough because it will hurt their reservoirs. then you have the low risk countries like saudi and the uae , which have been investing in their spare capacity over the past three years, and therefore, when demand calls for it, they will be able to deliver. we are at 2.8 million barrels of spare capacity in the market, but it is a long way down, and people asked me, when is that actually don't play out? how can we actually going to play out -- going to play out?

how can we believe this? lisa: the idea of $100 a barrel oil comes from the idea that demand is going to pick up back to pre-pandemic levels by march of next year. how does the omicron variant play into this at a time when we see people canceling their travel plans and we see a lot more uncertainty in the global vacationing space, if nothing else? christyan: you are absolutely right. the whole thing is anchored on demand. it is like, 99 .9% of our thesis. but demand continues to recover and grow. we have already ingested -- already adjusted in q1. we do think to add on risk, because we do see demand recovery to buy the dips, and potentially, this is what

qualifies for a risk on trade because we don't think that hospitalizations will actually end up catching up with the cases. in other words, it won't actually fundamentally impact the demand outlook. if we do see demand potentially damaged, we are around 100 million barrels for next year, i do expect opec to take action. tom: the perception in america is the democrats are against american oil. our conversation with secretary granholm, what she emphasized is oil is one global price. is it? christyan: it is one global price, and it is set ultimately by the marginal producer. if the marginal producer can't deliver going to productivity or federal land restrictions or wall street, that marginal role

moves to whoever does have the spare capacity, and at that point, the question is what oil price do they want. when we think about e.m. countries, i understand the point about wanting to keep prices low, but that global price drop ultimately drives significant revenue for a lot of the poor em countries, so there's interesting tension between consumers and producers. there's balance between having to give the west restrict inflation versus the em countries that rely on this as a revenue source. but the bottom line is the marginal cost is shifting to opec. it all comes down to how much additional barrels they have. you can ask them to do whatever you want, but the question is, can they actually do it? lisa: just real quick, does this

give them incredible cover to be able to not boost production for january at their meeting that ends today? christyan: it gives them color and it gives them a breather -- gives them cover and gives them a breather, and at that point, when demand recovers, we don't see it being damaged, but as it continues to grow, you have a higher oil price and a sunnier day. jonathan: before you run, i want to make sure we use all the time we've got with you. just flee, do you think this asset class has taken a bit of a hit recently? christyan:christyan: it is a great question i do. this bear market for oil ultimately creates this volatility kind of paralysis, which is i don't want to go on holiday and come back. with that in mind, i think being able to put a floor on price is important. that is opec's role in some

ways. but equally, the geopolitics of oil can often get in the way. this is where if you take a step back and cut through it all, we've got to come back to what is the marginal cost to produce this. $150 oil call is clearly bold, but people are missing the detail, which is what we are seeing is the long-term prices are what you are going to need to produce additional barrels. jonathan: absolutely fantastic to hear the work that goes behind a call like that. just brilliant. christyan malek of jp morgan. tom: just absolutely brilliant. on oil, jeff currie later today as well. jonathan: looking forward to that. from new york city, on radio, on tv, this is "bloomberg surveillance." ♪

>> the markets will have to significantly reprice at some point. the fed will probably have to go

faster than they expect. they will probably have to go higher than people expect. that is going to be a bit of a shock to markets. jonathan: bill dudley, making the point that maybe they have to go faster. when i first heard dudley say that in the middle of this year, it was at a conference with him and mohamed el-erian about six months ago, and it was out there. it was contrarian. not anymore as we close out the year. tom: they look like geniuses on the trend. who knows on all of that? one thing we do know is the linchpin of all of this will be the deepest thing on the market, which is the u.s. dollar. we welcome kriti gupta to join us here. this is exciting for us. who was it, dave who? kriti: dave wilson i think was his name. it has been a lot of hedging at

the moment. we have seen this huge buildup in his elder. in the last couple of days with that equity volatility, you start to see hedges. fx portfolios essentially having to really deal with equity volatility by shoring up their portfolios or selling with the dollar, and the ripple effects are going to be in the euro, and em which just kind of counterintuitive to the broader narrative. that chart shows you that that buildup, that hedging has been there for a while. but in the last few months, it has really accelerated. tom: it is a chart showing the lines going up. lisa: the idea to me of blackrock, when he came out and said he's increasingly going into the dollar and bullish on the dollar because it is a great hedge for stock volatility, it has been the most reliable hedge. how much of the action you are seeing in the dollar really stem from macro bets looking for some

sort of reliable hedge? kriti: i think you nailed it there. even in 2020 the inverse correlation, you had the dollar essentially feeding into equities. the dollar lower, stocks higher. essentially, foreign investors could not make it easier to happen to the stock market. tom: she's been here for a cup of coffee and she's already siding with lisa. do you see how she said lisa nailed it? jonathan: taking you on early on. lisa: you guys are trolling. [laughter] tom: this is a one-day show with kriti gupta. kriti gupta, think you so much -- rudy he go to, thank you so much -- kriti gupta, thank you so much. damian sassower gives us the brief this morning. an open-ended question to you. what matters on this thursday? damian: i think all eyes are

on the turkish lira, especially after erdogan replaced the minister of finance. he served under three prime ministers. he was replaced by a deputy finance minister who is close with erdogan's son-in-law, formerly the economics are, response for going through the fx reserves and spending about $28 billion of them to protect the lira. to me, it is looking forward to 2023 come over the smart money is betting on perhaps a regime change at the top. so that is what we are focused on here today. lisa: we have also been talking extensively about whether this is idiosyncratic, or rather this is someone that could become a little more systematic in terms of its connection to the broader market. how isolated is turkey as it sees its currency weaken to some of the weakest levels we have ever seen?

damian: this is really isolated. if you look at the reserve positioning across the whole of emerging markets, 18 of them have seen their reserves go up over the better part of the last 18 months since the pandemic. any reports relative to money supply, turkey is in a very different situation. is going to be week earlier a, how does that affect the banks and spillover into the broader double financial market, which appears to be limited given bank balances and the like. jonathan: you take any confidence that the move is only about 1% or 2% of the back of what happened overnight? does that tell you about may be the exhaustion of selling the turkish lira? damian: not really. there's really no speculation.

we have cpi coming in tomorrow. it is going to be at 20%. the one week repo rate is now i 15%. the current account surplus has come down and just the last two quarters. the economy is in trouble, and we are seeing a bit of unrest on the streets. the akp, erdogan's ruling party is at an all-time low. it is not good for turkey, but not so bad for the rest of the emerging market complex. tom: does it move from idiosyncratic to contagion? we have asked that many times this week. how contagion-y is turkey getting? damian: look at european banks, look at some of the banks that have been sitting there. that is really the extent of the

contagion in my eyes. we can get into the political risk and the migrant crisis. we can get into the canal that erdogan is supporting, but why bother? at the end of the day, we see delta risk reversals at an all-time high in turkey, and no one cares. tom: this looks great. for those of you on radio, let's be honest, it is work from a hunting lodge for damian sassower. it is like 70 acres. jonathan: that is cozy. tom: he shops everything at the accord market. everything at the lodge is gluten-free. jonathan: good to catch up. good to see you. i am distracted because the u.k. works and pension secretary said on british tv this morning, but what it's worth, i don't think there should be much kissing

under the mistletoe. lisa started spoiling the holiday season earlier in the show, and now in the u.k. they are saying no kissing under the muscle to -- the mistletoe. tom: are they letting down? there is sort of a mystery to what heathrow and the united kingdom is doing so far. jonathan: there is a new testing regime. they are tightening that. is got to go back today two. was going to be interesting for me as if they do anything longer than that. anything comes to 5, 8 days again. that is going to be a huge problem for the hospitality industry, for the major cities in the u.k. like london. lisa: friendly, that is why you saw the huge moving the parent company of british airways the back of this. have you ever done that with mistletoe? is that actually a thing? do people actually do that? jonathan: do people do that, tom?

have you ever got the mistletoe with mrs. keene? lisa: he's pretending to be deaf. [laughter] just saying, get me off of the set. it is too awkward. jonathan: he didn't like that. tom: my agent ken cooper says put a cork in it. [laughter] jonathan: up 15 on the s&p. we fade a little bit. this is bloomberg. . ♪

>> you can lose money slowly or you can lose money quickly. >> a lot of what is going on in the market now is pure risk management. >> the level of accommodation is so high. >> all signs point to something that looks better the cycle. >> corporate profitability looks good. i want to be a part of that. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. on radio, on television, and incredibly busy hour. we will look at apple. we will look with michael dart at the american it -- michael