>> at the end of the day, it is the supply of money that will be the key. jonathan: from new york city, for our audience worldwide, good morning, good morning. this is "bloomberg surveillance." this morning, together with kailey leinz and matt miller. i'm jonathan ferro. a week of record highs. kailey: if we get that closed, it will be the 69th time. firmly north of 4700. jonathan: the equity market has

held up and done nothing since early november. matt: we did have a rally over the last three trading sessions paid we come down from highs and gone straight up. it does look like you can still see a santa claus rally of sorts if light volume and continued gains into the new year. jonathan: you have not been lucky enough to not work this week. what happens on a week like this? kailey: nothing like we are seeing. covid-19 takes no breaks. the headlines never seem to stop. the headlines on that front getting more and more dire as the holiday weeks have progressed. not just the number of cases in new york approaching 50,000 but affecting holiday plans. jonathan: a shout out to the

team here at bloomberg for putting up a salad guest lineup -- a solid guest lineup. kailey: i am really excited to talk to mohammed of gallup. as we have seen with this pandemic, the strategist and economist say with every given wave the economic impact is reduced. even if you're not seeing restrictions put in place, people's response they take on themselves independently, that is a different story and we are seeing how that shakes out with this variant. jonathan: let's talk about it. united, down in early trading. they can't get the staff and staff the flights and there are cancellations. matt: this is a concern you see highlighted in the airlines.

we all noticed when 1800 flights are canceled on the day before christmas, but it is affecting businesses everywhere. there are many more infections with omicron. you may be breathing a sigh of relief that it is less severe in terms of disease, but you still can't go to work. you see flights canceled, cruise lines of stock, u.s. aircraft carrier or just a battleship stranded in guantanamo bay. what you don't see and what concerns me more is production lines could be halted. i'm thinking about a four f-150. you already have long -- a ford f-150. you already have long waits and if too many workers are out they will have to shut down production. jonathan: i will let you get personal on the efflandt 50. it is -- on the f-150.

if it is omicron, do we have to shorten the isolation from 10 days to five days? matt: this will be the discussion. hopefully we will come to a decision that helps the economy but keeps people healthy. it is everything. it is not just manufacturing, but it is service. if you are running a hotel and too many call in sick, what do you do? if you are trying to run a television station and to make you have omicron, then want to people are running it. jonathan: tom keene and lisa

abramowicz will be back with us in a few days. let's start with omicron. we are trying to work out what this means, the inflation debate. how does china fall into the conversation? >> we are looking at data around the world and we can see that we had a wave in south africa that was much quicker and did not have the hospital impacts we have had in previous waves. we are starting to get signals that maybe it is the same there. there is very little natural immunity there and we do not know what they have been using. everyone wert about inflation is worried about china because china remains the supply hub of the whole world.

if they have problems with supply chains again, it will add to inflation pressure that everyone has been watching in 2021. matt: when i am sitting home after a big christmas meal and i see a headline that controls -- china's central bank -- i don't know how important it is. it is very complex. the political situation is different than what we are used to in the western world. i cannot put my finger on how much movement that really is going to affect pre-what do you think? jens: we are on a very different cycle than normal, that we always used to think about the global cycle driven by how much extra demand was generated in china. this time we have a lot of other economies much more volatile. the other thing is the supply chain is in play.

they will be much more on the supply side and how they deal with essentially keeping production open and avoiding big shutdowns in regions of the country is a huge issue. and obviously it still matters what they do with monetary policy, and we shouldn't forget that in china the way to do monetary policy is different than any country in the world. therefore it is how much credit they inject into the system is crucial. given what has happened in real estate, i think it is likely they will do credit injections in certain sectors. kailey: obviously right now china is going in a direction that other major banks are not. your easing were everywhere else , you are moving towards tighter policy. that divergence is growing and i wonder how do you think about that growing divide.

jens: i think this is potentially the most important issue for 2022, given that we have inflation and varying greece of inflation in different countries around the world, he will see potential for a diversions in monetary policy. we are seeing it in emerging markets. you have countries that have high interest rates that they have had since before the global financial crisis. a lot has happened with monetary policy. it is very likely to be the case that after 20 years where china was the growth engine of the world, that is going to change and we will have a different monetary policy machine but we should not expect interest rates to go to zero. we should expect relative easing in china and then the big question is will that feed into the currency. has not been the case. they have tried to avoid the

currency being too strong. they are coming in with a strong currency that might make the transition easier. jonathan: one of the biggest surprises for me of the year in foreign-exchange worldwide has been how well the chinese currency as stood up to a u.s. dollar that has been strong against pretty much everything else. is that a surprise to you and how does that lay the foundation for what you expect 2022? jens: the way we analyze the chinese is a bit different from any other currency. have a strong focus on the balance of payments and they have a very strong trade account. they shut down all outbound tourism and that meant that a lot of the foreign-exchange state in the country. if you go from current account to capital account, it stacks up strong. they have been buying essentially hundreds of billions of dollars worth of foreign exchange reserves to counter that excess inflow and that has

been keeping the currency strong. until some of those key factors change, opening tourism again, it is likely to be well supported, even if we can tell the concerning stories about evergrande and real estate it is still strong. jonathan: good to catch up. merry christmas to you and the family. we are counting down to a federal reserve decision for the months of -- the month of march for the next few months. bank of america came out after the december fed meeting and said i will see you in march. it looks like march is the date for a move. the central bank shifts and fighting inflation and financial conditions are loose even amidst all of that. matt: i love the feature on the bloomberg where you can pull up financial conditions. it'll be interesting whether

they unwind or tell us how they are going to and when they are going to unwind the balance sheet paired with lon from $4 trillion to 8 trillion -- sheet. we have gone from $4 trillion to $8 trillion. do they need to reduce that or do we stay at whatever watermark we have reached after each quantitative boost. jonathan: should the market be closed for the final week of the year? kailey: my vote is yes but my opinion probably doesn't matter much. jonathan: it matters to me. coming up, victoria fernandez. woody futures this monday morning. -- -- futures this monday morning. what a beautiful new york it is. this is bloomberg. ♪ ritika: i'm ritika gupta.

u.s. top medical provisos warned not to get complacent. anthony fauci said the cases could overwhelm hospitals despite symptoms being less severe. an increase in coronavirus cases in the u.s. led to shortages of airline crews on one of the busiest travel periods of the year. 2800 flight cancellations over the christmas weekend. knighted, delta, and jetblue canceled 12% of flights. -- united, delta, and jetblue canceled 12% of flights. online shopping jumped. sales were up 21%. justin trudeau says china has been playing the nations against each other. he told global news that democracies should present a

united front. canada joined the u.s. and other western allies in a diplomatic boycott of the beijing olympics. a south at three and -- a self african -- died he won the nobel peace prize in 1984. desmond tutu was 90. global news 24 hours a day, online and at quicktake on bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm ritika gupta. this is bloomberg. ♪

>> it has been the fuel behind

it that we find common ground in congress to pass the bill back better actually can bring down the cost of living for working people. i am not giving up, the president is not giving up and the stakes are too high. jonathan: vice president speaking on cbs here good morning alongside kailey leinz and matt miller, i'm jonathan ferro. the s&p advancing on the way to an all-time high, .2% on the s&p. yields not much on tens. the euro-dollar, fx market unchanged. crude negative more than 1%, down $.82 on the session. the word from the vice president is i am not giving up and the president is not giving up and the stakes are too high. kailey: the white house has been trying to strike and optimistic tone after joe manchin was a no

on bill back better. but what does the path forward look like? will it be as robust as the biden administration had envisioned or what is the final warm going to look like and how much money is going to cap put into the u.s. economy -- is going to be put into the u.s. economy. jonathan: mohammed is joining us. the approval rating of leadership, is it as simple as saying it is going and one direction, heading lower? hamed: it is stuck and we don't know where it is going. this team started off with a promising approval rating, especially on the pandemic. six in 10 approved of how they were handling it. every metric the team has crunched down to the low 40's on foreign policy and the pandemic

and economy. the latest number of of oral -- of overall approval of president biden is that 43%. since the fall of kabul in september, we have not seen that number move at all. congress is doing worse than the president, 23% approval of the job that congress is doing. this administration started with the america is back, but when you look at partisanship challenges, it feels like the same old america, and this team is up against very serious resistance in terms of trying to find common ground. we don't see that in the data. kailey: that paints a bleak picture for the democratic party heading into the midterms. when we talk about build back better being something crucial for them, will that be enough to move the needle and is there

popular support for it? mohammed: it depends on the spin around it. i was starting to think of obamacare and the massive legislative acts that are different when they get past than was initially promised and envisioned to the public. it is not just the democrats, we see republicans also struggling to get approval from anyone beyond their very basic ideological base. mitch mcconnell, the republican leader, got 43% approval. nancy pelosi, 40% crew -- 40% approval. if you are not a democrat, you don't have a great feeling about democratic readership. if you are not a republican, it is about the same. matt: how big are those ideological bases and how much has that changed?

are we looking at 30% or 40% that aren't going to change their opinion no matter what happens? mohamed: that is what has changed in america. it is really about 20% on each side. america now has the highest rate of people who identified as independents. the public is non-politically minded and they have tuned out of the infighting between the two parties. you mentioned the midterm elections. it is so vertical this will be the first midterm election since president biden has taken office. the world is watching ukraine and unfortunately american ship will be watching the midterm elections. while the rhetoric has changed since the trump administration, a lot of the partisan divide has gone nowhere. unelected officials did better

in our poll in december than elected officials. when it comes to congress and the presidency, it is an ugly picture. matt: you mentioned unelected officials. i wonder about america's take on anthony fauci. he seems to be a very partisan figure. do i have that wrong? mohamed: no, it is interesting, because dr. fauci is one of the leaders that did the best. he got 52% approval, 40% -- 47% disapproval. by party, only 19% of republicans approve of the job he is doing. the surprise was justice roberts. he got the highest approval of all of the leaders we asked about her he had a 60% approval rating and that was an improvement over the last several polls of what we have done. it will be interesting to watch where that goals -- where that goes if the topic of abortion

comes up. in a year that the court is trying to argue that it is apolitical, the leader did better than elected officials. jonathan: what do you think is driving that? mohamed: unexpected decisions i would say. justice roberts has taken positions that if you were simply guessing on the party that appointed the justice, he hasn't taken the partisan line and every decision. but the supreme court is something americans don't pay a lot of attention to until there is a big story and there will be a massive story in 2022 of whether or not roe v. wade will be upheld. things could change dramatically. jonathan: looking forward to catching up with you through next year. mohamed younis

-- mohamed younis joining us there. testing and america right now is a huge issue. kailey: we can talk about the treatment process all we want. there is optimism about therapies and treating people once they are positive. but you have to know if you test positive. in new york, the lines are wrapping around every block. testing is a problem and it is not so in other countries. the u.k. has said we have had tests mailed to us for the better part of last year. jonathan: i just came from the u.k. and they are not a poster child when it comes to the virus. -- they are not a poster -- they mail it to you just like that. kailey leinz with that miller i'm done within pharaoh.

trying to figure out -- i'm jonathan ferro. tried to figure out why the market is open. bond market not doing much. this is "bloomberg surveillance." ♪

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jonathan: one of my good friends , said a week like this is not much signal. that is the story in the equity market. s&p 500 up .2%. the s&p up 25% to 26% year to date. a stellar return. a big conversation about what monetary tightening will mean for the equity market. the conversation for the fed has shifted. the middle of february, 10 basis points, the fact that the fed would tolerate higher inflation. back end of december a conversation that the fed won't tolerate inflation.

high for the year on a two year yield. the conversation and the equity market deserves more attention going into next year. and just why financial conditions are loose even as we talk about a higher move on the front end and high rates for the fed. kailey: is that the fed desired outcome if they say it signal to the market we will be hawkish and could move three times if financial conditions get easier, does that mean they have to rethink their policy stance if they need to have their reaction have the desired reaction in the market? it is an interesting question and how they set up themselves to doves easily to two times year. jonathan: the central bank of turkey goes the other. friday, turned upside down. dollar lire moving 6.36% today. i think that is friday in

reverse when you look at where the fx market has been. for many people, they still believe the experiment for the central bank of turkey is not over. matt: i think it is fascinating the riproaring moves we saw, not just friday but all last week. we were up to 17 and came down to 10 within three or four trading sessions. a big move in dollar there are. it looks like they want to get back -- two dollar there a. -- two dollar lire. -- to dollar lire. kailey: we know there are three of us working at least today even if a lot of people are not. another person working today, even though he is technically off, is the american chief

officer for private banking and wealth management. thank you for taking time with us on a holiday week. as we look onto 2022, the primary question is where in the cycle are we? >> good morning to all of you, and happy holidays. clearly we think it is the early part of the cycle and with the rapid growth behind us good we saw the peak in growth and corporate profits. we are in a midcycle phase. keep in mind that as growth slows and rounds up to 6%, if it slows to 4% this year, that is double the rate historically we have seen for the u.s. economy. 2022 is a year of normalization in terms of fiscal and monetary policy, growth and inflation. kailey: as we think about the fiscal and monetary forces easing, that is what drove the

accelerated early part of the cycle. does that mean it will come to an end more quickly? jose: we don't think so. if you look at monetary policy, it is tightening to a degree. if you think of tapering qe, it is not putting your foot on the brakes but lifting your foot off of the accelerator. we think the fed has decided to let the car move forward at its own pace more. long story short, that tightening is just beginning. even if the fed tightened three times next year and two or three times in 2023, it still remains quite low and negative, even if you get inflation toward a normal rate of 2% or 2.5%. matt: how responsive is this fed going to be two market moves? will there be a fed put still? jose: there are quite a few

vacancies. that will be somewhat a concern in the market is how dovish will the fed become. we are not anticipating they will be to dovish. we think they will move with the market but do not think this will be a fed that will move in advance or try to tighten to keep the market happy. we think they will be there to be supportive. if you want to call it a fed put, it remains somewhat in play and think they will be supportive your of markets. matt: are they looking at the bigger picture, stepping out to the 35,000 foot view? in your job title as chief investment officer for private banking and wealth management, i was talking to kaylee about the head of the sovereign wealth fund. he is concerned returns will be lower in the nest -- next decade because of central bank is

issuing. he got $1.4 trillion invested in this. are you worried about lower returns going forward as well? jose: it depends on your perspective. if you say will equity markets be lower in 2021, probably. it will be a tough year to beat at 25% to 26%. equity returns will be down from there. but 2020 and 2021 were abnormal years in terms of economic policy and financial returns. if you look at next year, market is calling for 18% growth in corporate profits. look active. the one thing -- that looks pretty active. there are four other factors, secular forces, that will drive economic growth upwards. number one is inventory rebuild, which you talked about the

deployment of inventories already and how it needs to be rebuilt on a global basis. number two is the infrastructure story, a lot of spending globally. number three is the tech revolution. everyone seems to forget that 5g is just the beginning of this revolution which will be a multiyear rollout. number four is the creation of economy to point out, sustainable world we are talking about is -- of economy 2.4, sustainable world we are talking about. it is easy to be negative, but i think if you look at those four secular trends, those will factor into the cyclical story. kailey: looking at the world through that lens, where do you want to put your money specifically? jose: if you look at fixed income, our focus is looking at areas that provide better returns and high yields in

certain parts of the world and emerging markets. if you look at equity markets, we are focused on the u.s., where we see stability of growth and earnings. even though it will be a choppy year because of the political cycle, we think the year -- the u.s. will be doing well with the expectation of 18% growth. then we look at asia. i know a lot of people have focused on the story and china, where short-term there are issues. longer-term, you will not see faster growth or consumer spending power explosion that we will see in asia over the next three to five years. we are very focused on the asian markets where we see growth and interregional trade that will take place where the growth will continue to build on itself within the region. matt: you are a voting member of the global committee and on the

subcommittee for fx and currencies. what do you think about the dollar? we have seen strength recently, does that hold in 2022? jose: we think it does. if you look at relative growth rates and the interest story, it is one of the reasons we think this story on the 10 year has been sort of exaggerated in the markets. we don't see the 10 year backing up because there are major fact there's -- major factors. it should slow and we will have a lower deficit and you will have less issuance. with good demand and less issuance, the u.s. treasury markets should remain in you see upper constraints on long-term rates. therefore, we see strengthen the dollar, absolutely. not tremendous strength but where we see concerns in the fx markets and in some emerging

market space where you have inflationary stories that are far more long-term than they will be in the developed world. it is a concern and the fx markets will continue. jonathan: wonderful to catch up with you. i hope you and your family enjoy the christmas. the 10 year at 1.49. even if you have the perfect economic forecast, you can still get the market call wrong. lining things up on inflation, real growth in america, i am not sure you would come up with it at 1.49 pre-year. kailey: we were looking at something more than 2%. the closest person was steve major who saw 1% and then bumped it up to 1.50. he had to capitulate a little and he may indeed have been spot on.

this market befuddling to so many people. jonathan: a lot of people come on shows like this and say it should be down here. but it is down here. matt: absolutely. we are only sing a forecast at 2% for the end of 2022. the market still thinks it is going higher and we still have a few holdouts. jonathan: yields basically unchanged. the s&p 500 advancing .2%. we still have to talk about the pandemic. we will do that with a professor at the university of nebraska. from new york, this is bloomberg. ♪ ritika: coronavirus infections jumped over the weekend. china reported the highest number of cases since january.

australia reported 10,000 cases for the first time since the start. daily infections in the u.s. surpass those. vice president kamala harris said the white house isn't giving up. she told them the administration is looking forward for what it calls the bill back better legislation. joe manchin said he could not support the bill and an evenly divided senate, they needed each part -- each member of the party on board. profits squeezed by higher commodity prices. industrial profits rose 38% in the first 11 months of the year. profit growth decelerated to 9%. japan with the unprecedented release of oil from reserves. the japanese kicked off their effort with a sale.

last week, south korea will start releasing next month. a top grossing film of the year globally. spider-man no way home took in more than $81 million in north america over the christmas weekend. it was released in conjunction with marvel. global news 24 hours a day, online and at quicktake on bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm ritika gupta. this is bloomberg. ♪

>> the issue that we don't want to get complacent about is that when you have such a high volume

of new infections, it might override a real diminution in severity. jonathan: one of the challenges at the moment. from new york city, good morning. your equity market update on the s&p, .2%, climbing after posting a all-time highs in america. the bond market, dollar basically unchanged. crude lower. wti at 72.81. given what is happening worldwide and especially in america with people calling out from the omicron variant, trying to decide how short the isolation period should be. does it need to come down to five days? a professor at the university of nebraska joins us. how much data do you still need

to make a decision on whether it should come down from 10 days to something like five? lauren: one of the biggest pieces of data we are waiting for and people are collecting is that initial space between exposure and when you start to be symptomatic. one of the challenges in the u.s. is sequencing was delayed. while we have made gains in that space since the pandemic has begun, we have done complacent and stop sequencing everything to understand when the new variance -- variants came out and we are comparing it to other strains. this is a big focus, considering the front line workers need support. looking at how long it takes for people to become infectious and how long they stay infectious for is absolutely a number one

priority of our scientists. kailey: that answer may be different depending on the subject in question, vaccinated and unvaccinated. as we talk about the symptoms appearing to be more mild, at least that is what the data suggests, how is that different if a person has actually gotten shots? lauren: we are seeing milder disease. there is a lot over and done to understand how vaccine efficacy is specific to omicron. are we going to need additional boosters? what we are seeing is there is more severe disease in people who are unvaccinated. the people who are in the hospital are primarily unvaccinated people. there will be breakthrough cases and that is inevitable, but the people who are getting severely ill from this disease and this variant, even though it seems to

be less severe overall, are people who are unvaccinated. we are seeing a spike in pediatric cases and many of those are because we are catching up with children being vaccinated because they had access to the vaccine later. kids under five don't have access to the vaccine and we are doing a ton of work to refine the study and looking at improving to boost the immunity. kailey: speaking of pfizer, it is not just the vaccine at play but they also have the therapy pill approved last year -- last week as well. how much does that make a difference when we talk about hospitals potentially being overrun with patients? lauren: any additional tool makes a difference. the therapies are great because they don't have to be given in a hospital setting. this is where telemedicine comes into play. we have explored strategies of

providers who are quarantining who can't be in the hospital but are well enough to work to be able to run covid clinics and things like that. the approach to staffing is creative, and this gives us an additional space to provide covid care for people who do not need to be hospitalized. if we can get medicines that to people early in their clinical course, we can keep them out of the hospital, which is better for everybody. matt: i think the prevailing thought on wall street and in markets is that this is a pandemic that is becoming and dominic -- endemic and we don't have to worry, with the exception that flights are canceled and it is holding up the economy. is that the case or are we seeing real problems with hospitals overcrowded with emergency help being called in? are we still in the midst of a real disaster?

lauren: the policies will have to adjust. what we are seeing is people who are being hospitalized, even with the potentially milder variant, so many people getting sick and still unvaccinated that hospitalized patients are coming into the hospital in droves. the hospitals are overwhelmed. i think we will get to a place where this looks like flu or seasonal respiratory viruses, but right now it is still a pandemic and causing severe disease and severe strain on hospitals and health care workers. frontline workers across the globe are being severely impacted. we are looking to get through the holidays and through these times when people are going out to parties and celebrating, and we understand that.

but we are definitely not out of this pandemic yet. for vaccinated people, we will start to approach some semblance of normal life i hope this year. but for unvaccinated people, there is real risk out there. this is still a very dangerous virus. jonathan: always fantastic to hear from you. what is interesting about this moment compared to 18 months ago, we are looking at self-imposed restrictions for individuals and how they engage with the economy. in the u.k., we have not had restrictions from governments but from individuals who just don't engage in the same way. you will not do the same degree of support from fiscal policy. it will be interesting to see how this plays out into next year. kailey: even if people aren't choosing to withhold on consumption to go out in the world, if you get a positive

breakthrough case, you have to stay home at this point for 10 days and you are starting to see that showing up in businesses shuttering because they cannot get staffing we are seeing that on roadway and restaurants and this weekend in the hospitals. jonathan: for delta and united, 12% of their schedule canceled over the weekend. matt: it is a huge problem for them, for their brands and business. i think there is also, beyond the required quarantining time and self-imposed issue, you have so much admin to deal with. i was going to fly to london last month, there was so much paperwork to fill out and reservations to be made and i was going to have to wear a mask and i did not want to go. others are making that decision which affects the economy.

jonathan: a very good experience with very fly. from new york city, with matt miller, kailey leinz, i'm jonathan ferro. this is bloomberg. ♪

>> the biggest risk is the fed. >> we will see slow -- growth slowing. >> what we need to see is thanks raise interest rates. >> i think there is more confidence in terms of tightening. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: the final week on the calendar for 2021. from new york city, good morning. this is "bloomberg surveillance ," live on tv and radio. alongside katie lyons and matt miller, i am jonathan ferro. all-time highs back, even as we throw tighter monetary policy, omicron at this market. kailey: granted, it has