>> 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

darda at the american economy. claims at 8:30 gets us ready for the jobs report tomorrow. jonathan: then we look ahead to next year as well and a federal reserve meeting on december 15. there are two kinds of forecasters, those who don't know and those who don't know they don't know. which one are you as we go into next year? tom: helane becker will join us on international travel later in the hour. i look at what is going on in germany, the article that makes clear shoals is making a mark. jonathan: more testing -- clear shoals pop -- making it clear schultz pop -- making it clear scholtz is making a mark. tom: you see the vic's back near

30. what are you see in bonds, and credit? lisa: you are not seeing a material tightening in financial conditions. yes, you're seeing riskier yields go up, but it is nothing that dramatic. funding costs are still very low. to me, this gives the federal reserve a green light to continue with its plan because right now, people do not be concerned about another taper tantrum. whether that will hold remains to be seen. tom: what kind of a day are going to see? jonathan: i wish i knew that, tom. [laughter] tom: i just got to say, you wake up from the "surveillance" map which is there -- "surveillance" nap, what is

there? jonathan: when we saw there was a case in america yesterday, that was expertly -- that was absolutely ridiculous. of course there's a case in america. how contagious is this? have you got any idea right now? tom: no i don't. lisa does. the theme here is ferro and keene have no idea what is going on, and lisa is totally clued in. i'm going to look at the vix, 29.51, little bit of angst. jonathan: i'm going to look at crude, $65.78. jp morgan looking for $150 on brent in two years time. we will try to get that for you on the bloomberg terminal and on bloomberg.com as soon as we can. tom: adapting to all of this is brent schutte of northwestern

mutual. there's been a run on energy and then a pullback. how do you manage sector weights at northwestern mutual when we see such segmented performance, occluding -- performance, including an oil? brent: i think you try to discern what is going to happen as you move to the end of the day. looking to next year, used will have a goodly financial conditions. you have a fed that is tapering a bit and may increase interest rates, but what impact do you think that is going to have on economic growth? given where consumers are, it could certainly have an impact on the market, and i think it pushes people towards those names you mentioned because the other names in the market are expensive and overbought. yes, they are secular growers, but how much of that has been pulled forward by the delta variant, by covid?

i think there are stew opportunities and things like energy, value stocks, where they are incredibly cheap, and i hope someday again in my career we focus on valuations over hope, dreams, and needs. jonathan: you asked at what point would higher rates hit the market. given how deeply negative real rates are right now, what are the answers to those questions? brent: to me, financial conditions are going to tighten a bit, but are they going to tighten so much to cause a recession? are they going to harm economic growth? i don't care how they got the money. the consumer debt to net worth is 21%. it was 24% in 2008. cost of that debt is still incredibly low, and most of the consumer debt is fixed because it is in mortgages that have been fixed for the past 20, 30 years. at the margin, we were inching along the economic cycle, but we are nowhere near the end yet. lisa: does it change your

scenario at all that the federal reserve is seeing inflation is the bigger threat right now, potentially in a labor market that does not get back up to speed? that is the pivot that we seemed to hear from jay powell. brent: i heard chair powell stated that he does not believe inflation is going to leave a permanent mark. i think the fed doesn't want to appear to be tone deaf. i think they want to give themselves some optionality. i think they believe me that the tapering is necessary. i think the fed wants to try to see long-term growth in the is economy by bringing people back into the labor market. if they don't come our longer-term growth rate is much less. why do believe they are going to try to stick around as long as they possibly can, like they did in the last economic cycle, to see if they could get the participation rate up because that helps determine what our growth rate can be. if we are at the levels we are currently at now, we could be in some trouble. lisa: how far you'd go in terms of -- how far do you go in terms

of going into risk? do you go into airlines when they are beaten up? do you go into banks on the idea that yield curve dynamics will change in your favor? brent: we never go all in. we do run balanced accounts where we have exposure to different factors. my fear is as i travel around and look at what people are doing, they are so heavily on the growth side. you have seen some of those etf's and stocks pulled back a bit, but i think there is still room on that side, and i want to make sure people still have money tilted towards things like value, things like small caps, and were small caps are historically as cheap as they have been, they are expecting to grow earnings more next year. jonathan: just to be clear about this, i can't just hold onto the s&p and sleep well at night through next year. brent: no, i think you need to own other things beside the s&p. arch of this market remind me of 1999. that scares people. that should not scare you. that means you should be outside

of things that have done and crudely well for the past five or six years. earnings growth, that may not actually happen. at some point, valuation will matter again. i am hopeful that is in 2022. jonathan: that always gets people, for good reason. whenever people bring up 1999, there's a reason they are scared. tom: what i heard, interview after interview, is simple. you can do an analog to march 2001. technology is partitioned into those that may have profit challenges, but a lot of technology that is minting money. that is different. jonathan: can you speak to that, the names that are for heavyweights in this s&p 500? they are meeting a lot of money. brent: that is a nuanced difference between now and 90 99. how much of that was pulled forward because of covid? how much has already been priced in? the gap between growth and value is as wide as it has been. some people have abandoned value

altogether. i have heard people say that on your network. i think somatic investing is eventually going to require those companies, not the ones you mentioned, but other companies, to bring the earnings forward and produce them or get at some point the bill comes due , and if rates rise in 2022, if the economy continues to grow and interest rates elevate, i think that bill comes due next year. jonathan: brent schutte, great to catch up, as always. looking ahead to next year. we talked about the for active management, and maybe it is time to move away from the index. let's be clear, this year the index has delivered big time. brent pushing against that for next year. lisa: this does assume we will be entering a to mulch was that's a tumultuous -- a multiple us -- a to mull to us -- a tumultuous period next year.

this is a key distinction in a lot of prognostications for next year, talking about a difficult second half of 2022. jonathan: is this the flavor of what we've got down the road? lisa: if this is the flavor, it is not that spicy, not that concerning, considering we are still close to all-time highs. however, what does that volatility do with respect to funding, with respect to general risk valuations? jonathan: it is a question we will keep trying to answer. how much work does this fed need to do to tighten financial conditions, given how deeply negative rates are right now? we have an idea of how loose things are right now and how deeply negative rates are. we have an idea of that. tom: i would suggest if we had john taylor of stanford university on, he would say we are to accommodative. i am sure we hear that from professor taylor. but i think in the new math of this fiscal reality, nobody has a clue where we switch from accommodative to restrictive. lisa: even me, by the way.

he keeps saying that i know everything. jonathan: you agree on something. lisa: we agree. tom: can i point out, brent schutte just crushed it. i just shut up. i am starting my taxes this morning. i just want to point out that the score today is lisa 2, jon 1. jonathan: how did i get one? i thought it was negative five, using my leg what against me. tom: going down in flames. jonathan: what this segment. tom: jon, you nailed that. jonathan: up 22 on the s&p. up 0.5 percent. heard on radio, seen on tv, this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta.

apple has a problem it was not expect and with the iphone 13. apple has told suppliers that demand has weakened for its newest phone. five months ago, president biden declared the u.s. emerging from the coronavirus. now the virus is threatening to resurge across the region. today he will lay out measures that include stricter testing from abroad and a continued mask mandate. antony blinken met with his russian counterpart sergei lavrov today in stockholm. the kremlin says it sees growing risk that ukraine may attack russian backed separatists. in brazil, the economy has slipped into a shallow recession.

that has dealt a blow to president jair bolsonaro just as he prepares to run for reelection. china is on the verge of lifting an almost three year grounding of the boeing 737 max. chinese regulars have lifted the last safety related obstacle to bringing the max back, issuing an airworthiness directive. china was the first country to ground the plane in 2019 after two fatal crashes. it is the world's second largest aviation market. 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. ♪

>> right now with the inflation data the way it is and with the job market as strong as it is in many dimensions, i do think that

we have to be in a position that, if we need to raise rates a couple of times next year, we are able to do that. so again, quickening the tapering is a fed optionality. jonathan: that was loretta mester, the cleveland federal reserve president, catching up yesterday. good morning. tom keene, lisa abramowicz, and jonathan ferro. your equity market fading a bit, then bouncing back 0.4 percent. nasdaq 100 futures slightly negative, down by about six points. we are -0.03 percent. yields are higher by not much now, by two basis points to 1.40% on tens. you're stuck mover of the morning's apple in the premarket. reporting here at bloomberg, the company telling component suppliers that demand for the iphone 13 lineup has weakened, according to people familiar with the matter. $160.40 in the premarket.

your big bull on the street right now is dan ives of wedbush at $200. tom: we look at the opportunity right now. also want to point out we are looking for a miracle press conference out of germany, which could be of interest. tom forte joins us, d.a. davidson. let me cut to the chase. do you buy the dip? tom f: you do, although i worry that the $160 price of apple is on a growing assumption that they will enter electronic vehicles. but if you look at multiyear upgrade cycles for 5g, i think that is still intact. potential softness in demand to me sees consumers responding to the news that they are not going to beale to get the product they want. you see there is still a delay

for the pro and the pro -- 40 -- further -- for the mac and the pro macs. tom: how do you price in verizon and t-mobile? to me, it is like 15 years ago. it is stunning the price deals are giving people. is that in the stock? thomas: it is in the stock because i think, as you pointed out, it is back to the future to the extent that the carriers have invested billions of dollars to upgrade their networks and want you to have a 5g phone. if you see the verizon ads that they will take your broken phone and give you full credit, it is remarkable, because it was not that long ago when they stopped giving a stipend and you saw people buying their apple on

monthly installments and payments and things of that nature. lisa: there is a question about whether this is an idiosyncratic issue having to do with people waiting for the 14 model of the iphone for apple, or whether this is actually a sign of how some of the supply chain disruptions dampen demand, that people don't want to go to the stores if they don't know how long they have to wait. which is it? thomas: great question. i think it is the latter of the two. i think the consumer unfortunately is being trained that if you want a consumer electronics product this year, you are probably not going to be able to get it, so some of them are not trying. lisa: is there a larger take away about other electronics companies, other companies that rely on the chip sector which has been particularly wait upon by some of these supply chain disruptions? thomas: on the most optimistic front for supply-chain disruption, i think you can look at large-scale retailers like

best buy, and you may realize they can't get product shipped from asia on the shelves in time or holiday, so they quit trying. we cover a headset manufacturer that has had to reengineer their product three times to adjust for chips available. so the chip situation could be a full year 2022 situation, but we may see some improvement in the supply chain sooner, independent of chips. tom: every sell side research's report, there's a listing of risks. as president -- is president xi in beijing a risk for cupertino? thomas: under tim cook's leadership, it is less of a risk to the extent that he has done an amazing job managing china risk. i think what you are seeing mostly unfortunately has been in criminal pressure on alibaba,

tencent, some of the domestic technology companies on data concerns. tim cook has done an amazing job managing the risks in china, but i think it is less of a risk because of the work tim cook has done. lisa: what do you think is the biggest distinguishing factor for apple as we see a rotation into the rest of the sectors that really have gotten beaten up or not really recovered to the same extent? thomas: i do think that there is a perception that apple and some of the large tech stocks, amazon, google and others, are somehow a safe haven, so maybe that view goes away next year. but i did not think we saw as much sector rotation out of technology as i expected in 2021 on an improving and reopening economy. this 5g upgrade cycle i think

can carry that whole stock independent of sector rotation in 2022. tom: do you want to announce a price increase right now? we need to make some news here, mr. forte. thomas: i'm sorry, not at this point in time. my concern is that some of the $160 is the expectation that there is a tesla or rivian or something like that in apple, and there's a call option embedded in the price, so i will continue to monitor the demand. they had a $6 billion it to revenue in the september quarter related to supply chain. so look for additional details in the december quarter at this point in time before considering increasing the price target. jonathan: tom forte of d.a. davidson on apple. brian deese, the director of the national, counsel for the white house, putting up some really important data over the last few weeks. they put out a supply chain

dashboard, just to give you a few on how things are improving. imports arriving at ports of l.a. and long beach are up 16% year-to-date. gives you an idea of how much volume goes through these ports. here's the improvement since november 1. so-called long dwelling containers, sitting on the dock for nine days or more, down 41% since november 1. that is good news, making some progress here. pick up a little bit in the ism yesterday, too. tom: i must admit the people looking for a slowdown in real gdp, call it under 4% or so, they have fallen quiet. jonathan: the outlook for next year is decent. that seems to be the big variable for the likes of morgan stanley, the risk that we get an earlier move from the federal reserve. lisa: and honestly, this is the reason why you are seeing some optimism. on the flipside, you have services coming back on.

do we see the service sector inflation started take over before goods inflation starts to fall back? jonathan: the s&p advancing by 0.3%. on tv and radio, don't forget, we are live on sirius xm channel 119 as you head into work. ♪

hey, angie! you forgot your phone! hey lou! angie forget her phone again? yep. lou! mom said she could save up to $400 on her wireless bill by switching to xfinity internet and mobile. with nationwide 5g at no extra cost. and lou! on the most reliable network, lou!

smart kid, bill. oh oh so true. and now, the moon christmas special. gotta go! take the savings challenge at xfinitymobile.com/mysavings or visit an xfinity store to learn how our switch squad makes switching fast and easy this holiday season.

jonathan: jobless claims in america seconds away. tom keene, lisa abramowicz, jonathan ferro. on the nasdaq 100 down 32. this curve is flatter. yields are higher at the front end by almost five basis or its. the 10 year up only two. here is michael mckee. michael: the big surprise of last week lasted just a week. claims rise to 222,000. everybody's job dropped -- everybody's jaw dropped when we got the report of 199,000 last week. the revision, the numbers have been revised up for last week, or revised down -- let me see.

i do not have the exact. tom: are you ok over there? michael: they have a lot of numbers because they are doing historical comparisons. jonathan: there's nothing worse than when you're trying to get your words out and tom just reaches in. tom: p is world-famous at this. -- he is world-famous. on "surveillance" you can make up numbers. michael: there were two claims last month, john and lisa standing in line and that was it. this is reassuring because it is more realistic than the 199,000. ok, here is the number. 194,000. we thought it was 199,000, now it is 194,000.

we do not know what really happened. this is a little more realistic at 222,000, back in the range we were in on an ongoing basis before last week. tom: the two year yield is little bit higher. jonathan: when tom says i look at this and he takes a beat it is because he is not listening to anything. i look at this i look back to 1922 -- futures are up 17. i am with you. yields higher by five basis points. the curve is flatter targeted payrolls tomorrow. this is the claims data we have been waiting for for 18 months, back down towards the 200,000 we were living at before the pandemic. tom: michael mckee, one more observation if you have the correct numbers. michael: i have the correct numbers. the four week moving average is 252,000, that is a job of about -- that is a drop of about

21,000. we are seeing claims drop off. jonathan: great work as always. payrolls tomorrow, tom. the median estimate 546,000. tom: the theme this week has been uncertainty. one of the best people we know to measure uncertainty is the gentleman out of the wisconsin complex. michael darda joins us. happy 39th. you mix in the stock market synthesis with wonderful economics. i want to start with the animal spirit that links the markets to our economy. what does our nominal gdp look like forward? michael: it looks incredible going into the fourth quarter. we have tracking estimates pushing 10% for real gdp poorly annualized in q4. the pmi data get your date would've been consisted with at least a 5% real gdp handle for

you for. i think it will be stronger than that. with high inflation we have nominal gdp running well into the double digits. this is a hot economy, but markets are generate because of concern about this new variant, and obviously chair powell -- we have a bit of a dustup in volatility. these things happen at this is an economy with tremendous forward momentum. that is a good thing. tom: what is the choice the fed will have, not at the december 15 meeting, but if i wander onto a great terminal function, fomc, if i staggered to january 27 for the march meeting of next year, what will be the choices the fed has at that time? michael: i think the fed does

want to wind the taper up for midyear next year so they have the ability to start placing short-term interest rates if the economy continues to perform as it has been. let's take a step back and recognize the fed is still doing want to take it easy, albeit at a slower pace each month with an unemployment rate in the mid-4%. during the last cycle the unemployment rate fell only slowly. this is a much more rapid recovery and we are far along towards full employment, with the fed still doing qe and short-term interest rates at zero. that is the policy that will cement a more permanent inflationary backdrop in place if policy does not adjust. we are talking about retiring temporary and transitory. a big part of that is adjusting the policy stance to a more neutral level and that will require the fed to wrap up

quantitative easing sooner. that is right thing to do in my opinion. lisa: take it a step further. in order to fight what you see is a persistent high inflation rate, what does the fed have to do, how much do they have to act next year? michael: if they get going sooner, that should actually increase the probability we do not have a hard mandate later on. what you do not want is a situation where the fed fall so far behind the curve inflation and inflation expectations become embedded and there is a panicky catch-up to adjust policy later on. that is the go-stop cycle. in the stop part you see severe recession. better still start -- better to start doing adjustments that are not panicky or radical when the economy is strong and hopefully

preserve the business cycle going forward. that is the key. i think it is important to understand we have double digit average nominal gdp growth since the economy bottomed last year. in the last cycle nominal growth was running 4% per annum on average with sub 2% inflation. variables are nothing like that this time. much stronger. if we go back to the old milton friedman concept, which is money times velocity equals prices times output. prices times output, nominal gdp. by definition the fed has a much more accommodative monetary stance and they will need to adjust that. lisa: i will 10 -- i will channel danny blanchflower who would come out and say people are ignoring warning signs on the peripheries.

the idea that consumer confidence felt romantically in the face of something inflation -- valve dramatically -- fell dramatically in the face of some of the inflation reads we have seen. how do you respond to these issues? is this a new normal we are facing in the fed has to reckon with or if we keep policy easy to we start seeing more people back into the labor market? michael: on participation, i do not think anybody knows exactly what is going on. the hope is with schools reopening at the pandemic receding until this recent news that we start to see a pickup in labor supply. that may still be in the offing. so far the numbers have been disappointing. in the meantime the labor market is tightening drastically. we have gone from a missed 50% unemployment last april to the mid-fours and the fed is still

holding interest rates at zero. the question is how far do you want to cook this thing? inflation is already high. even if headline inflation falls next year, it is simply incorrect in terms of magnitude and timing. you have a lot of forward momentum in this economy. confidence is looking soft but you have a strong labor market with jobless claims. we just got the 222,000 figure. that is an extremely good figure. this is not new in terms of this debate. we had previous waves of the virus before the vaccine that did not stop the recovery, did not stop growth, did not stop unexpectedly high inflation. at some point those making the arguments over and over again all have to think about adjusting their view. jonathan: we have seen a lot of

adjustments in the last week. mike darda of mkm partners. about six months ago richard clarida to came on the show and we asked him when will you know if you're wrong about the keyword and he said year end. here we are at the end of the year and they're making a change. tom: you mentioned ucla where alan mentzer studied. you look at the history makers and economics. anna schwartz, alan mentzer, richard timberlake, there is one constant theme vice-chairman clarida studies and lives, they wait for the data. jonathan: the data is better. claims in the right direction. let's throw in this. the employment to population ratio. to wait and try to get that back to pre-pandemic levels.

can they tolerate higher inflation as they do that next year? lisa: the answer seems to be a resounding no. they cannot be patient. continuing claims fell below 2 million, the lowest level since early march 2020. taking a look at some of these benchmarks as far as getting back to pre-pandemic times. it speaks to michael darda's point. jonathan: on the open we will talk about some of these points with megan greene. good morning to you all. looking forward to coverage of payrolls with you live on bloomberg valence alongside tom keene, lisa abramowicz, i'm jonathan ferro. the best payrolls coverage on the planet coming up at 9:00 -- i am joking, it starts at 6:00 eastern time tomorrow. it is a joke, all right? from new york, this is bloomberg. ritika: house democrats have

come out with a short-term spending bill to try to prevent a government shutdown. this weekend the bill would find agencies through february 18 and would have to pass both houses of congress by midnight friday. that would require cooperation from senate republicans. the bloomberg plus alliance meets to decide -- the opec-plus alliance meets to decide whether to go ahead with oil prep -- the cartel and its allies will hold off adding to their output, forecasting there'll be a surplus of oil in the first quarter. the m abroad very it threatens to lighted a large gap in access to coronavirus shots. affluent countries are raising ahead again. the u.k. is moving to secure mrna shots catered to omicron. tesla is moving its headquarters from california to texas.

the company's new base will be at its factory in austin. elon musk says the shortage of affordable housing in the san francisco bay area and long commute times were hurting tesla's ability to expand. the owners of major games have left out there players and a failure to reach a collective bargaining agreement. for now the lockout is mostly symbolic. spring training does not start until february. players say salaries are not keeping up with revenue growth. 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. ♪

tom: good morning. bloomberg surveillance.

lisa abramowicz and tom keene. jonathan ferro getting ready for an important 9:00 hour on television. we'll be on radio at 9:00 a.m. breaking news out of germany. angela merkel and olaf scholz speaking. these headlines are separate. lisa: the idea they are imposing curbs on nonvaccinated individuals and limiting gatherings. they are aiming for 30 million vaccination sought -- shots through year end. the hospitalization rates pushing through limits through parts of germany. you noted the key digital conference held in germany in munich has been canceled for this year. tom: is 189 miles from munich to davos and this is a real important idea. yesterday dod in munich was canceled for january 2022, no doubt getting out in front of olaf scholz and chancellor merkel.

this is the first symbol of the long factor we see. in austria, terrible. switzerland like the u.k.. germany in between and migrating in the wrong direction. lisa: is so frustrating, because the vaccination rate in europe is better than united states. you wonder what we have to come when we head into the winter and you wonder when we can leave the pandemic era and enter something more endemic. tom: the headline, buddhist dog to have meant -- the headline, mandatory vote on vaccination. helene maxwell, what does it symbolize from europe and we see those tensions, over to america economy and aviation? helene: good morning. thanks for having me.

we are concerned about that because typically what happens in europe gets exported to the united states with some type of a lag. we are going in the wrong direction. we need to move forward. lisa made the comment this is endemic. we all get flu shots so why would we get booster shots for the coronavirus. it is a type of flu, a bad one. it order to have vibrant economies you need vibrant airline industries. the only reason the world has been able to get as vaccinated as it has in the past year has been because the airline industry, fedex, ups, and others have distributed all of this vaccine that has enabled us to get to where we are. why wouldn't we just keep moving forward instead of moving back? lisa: what we would end what we could and what we should do is not necessarily what is happening, and we are seeing

these restrictions back in place. we are seeing global conferences canceled like the dlt in munich. what is the potential ramification for an airline industry heavily indebted from the pandemic dealing with reduced capacity, reduced numbers of travelers, reduced business travel, how much of a hit will they take? helane: i do not know the specific answer to that question , because to your point about liquidity, all of the airline scrapped as much cash as they could last year and worldwide governments supported the airline industry to the tune of $200 billion. that money is still on balance sheets. if you look at all of the u.s. airline specifically, which is my purview, you will see they have huge liquidity positions. $21 billion of liquidity. they were not going to repay debt that quickly.

their goal is to keep the liquidity in case of scenarios like this where you see continued restrictions in place and where we make it difficult to travel for business because you require testing. it makes it impractical to do a one-day trip to europe or a two day trip to europe. i think the liquidity side of the equation is fine. your point about demand, we think we are seeing demand ex-b usiness travel and international that exceeds 2019 levels. 2.4 million people were screened on sunday, which is a pandemic record. we are clearly within 10% of where we were in 2019. i think that is a good sign. i was at an industry event last night. a few airlines were there. they said they have not seen any

impact, but are expecting it impact. they have not seen cancellations for december yet. they are still seeing december bookings. lisa: to put this in relief, if there is a downturn in travel, if the u.s. implements curves similar to europe, are there airlines that will not be able to survive? helane: probably, yes. it will be tough stop we do not have any sell recommendations -- actually we do have one as i think about it. if we go into a downturn again, even with their massive liquidity -- one or two airlines. tom: this is the gloomiest helane becker. i owed united airlines at 90, he told me to get out and i got crushed. you loaded the boat in march of 2020. is this an opportunity to read jobs march of 2020 again? lisa: do your point about --

helane: i think so. we have seven or eight buys. i went out to lunch yesterday and the stocks were up and i came back and they were down 6% or 7%. i think it is a significant overreaction that i think there opportunities. tom: helane becker, thank you so much on something we all care about stop we do this off stunning headlines out of germany. i wonder how does austria and switzerland react to what germany does? lisa: we have already seen in austria something similar. we have seen a lockdown on nonvaccinated individuals. you wonder if you get follow on's in other places. there is a big question. i am curious about what the vaccination rate has to be for there to be -- i did not want to say herd immunity, but some sort of prevention from transmission. you are seeing high rates of

vaccination in some of these places and you're still seeing capacity in certain hospital winds. tom: dr. hotez did not miss a beat, i believe the statistic was above 80%. the vix showing the change in the market, the fixed 29 point -- the vix 29.72. we have much more coming up. stay with us with the breaking headlines out of germany and the set up as we go to jobs day tomorrow. bloomberg surveillance, we are on tv and radio. i want to speak to the many years of joy on sirius xm channel 119. i remember saying why do we need to be on sirius xm, they just said shut up, tom. lisa: how often to they do that? tom: they put me in my place. there is like 100 gadzillion

people on sirius xm. coming up at 12:00, ian bremmer. this is bloomberg. ♪

jonathan: following the biggest two date loss of the year, higher on the s&p. your equity market positive 11 points on the s&p.

"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: we begin with the big issue. drawing a distinction between the signal and the noise. >> jay powell saying it is time for them to exit the market. >> he knew what he was doing. >> i am in the flexibility camp as well. >> this is still going to leave us in very loose monetary policy territory. >> i am not in the camp that suddenly he is more hawkish. i do not buy that. >> i actually do. >>