>> the good news for investors is the whole market probably has some legs. >> i think the so-called everything rally continues. >> as long as we don't go too far in terms of yields, there is liquidity out there for at risk appetites. >> this is "bloomberg surveillance" tom keene, jonathan ferro and lisa abramowitz. >> good morning. this is "bloomberg surveillance." your equity markets down three or four points. the banks on wall street are off to the races. tom: when they move there some real dispersion out there. the everything rally, that is

not happening right now is wait. we haven't talked about the labor report of the american economy starts today. jonathan: data point on friday. the estimate of the moment around 400,000. the conversation in the equity market, values versus growth and the former is doing a whole lot better than the latter. lisa: this feels like the beginning of last year that the idea value is outperforming. serious underperformance as big tech takes it on the chin. this as yields arise. i keep thinking how much of a head fake is this. people trying get away. they say they are less loved and then he gets turned. how much are we frontloading rate hikes. >> the fed minutes out later. i know what tom is doing, will

you be sleeping? how closely will you follow the fed minutes at 2:00 p.m. eastern. >> they are really important because it was hawkish tilt. how much with members teaming up with the hawkish ones given that he has made noise about reducing the balance sheet sooner before they start to materially raise rates. this could a lot of people think be a lot more disruptive to markets than simply raising rates a couple of times. jonathan: down about a third of 1%. the bond market unchanged. yields higher right now. a 77 handle up to tenths of 1%.

lisa: countdown to the labor market report on friday. the survey calls for a 410,000 new private payroll jobs added. i am amazed by the turn in this market. yesterday's data showing the number of people quitting their jobs rose to the highest level ever, matching the highest rate on record highlights this incredible turnover that makes the job market incredibly difficult to understand in terms of whether it's too tight or ongoing slack. you mention the fomc meeting minutes. a lot of people talking about how three rate hikes are being priced into the market. but really to me, all eyes on the newly $9 trillion federal reserve balance sheet. do they move into quantitative tightening or is just the

suggestion of it leading to a market disruption that surprises people in terms of its effect versus discussing rate hikes. this to me is important because china seems to be the wildcard in so many discussions globally. the china pmi services data comes as people say zero covid policies cannot continue in china unless they want to face a significant slowdown and people are already ratcheting back expectations for growth in the region simply because you are seeing supply chain disruptions. jonathan: this effort does continue and that's the news this morning. the news out of hong kong. just capturing where we are at, of the divergence between the united states and say hong kong or china at the moment. they will be closing jim's. this feels like 2020. in 2022 in america it's a different country.

tom: the cultural response as we mentioned in hong kong and singapore it's stunning. it doesn't even have a stagger to beijing in the olympics. we need a surveillance correction there. i will be coming out of the fog at 2:45 p.m. as chelsea takes on -- in the football matchup. seriously, chelsea is awfully good. jonathan: you have the momentum. if i had to pick a winnerchrobay means they will win. lisa next time you have totom w.

futures down by four on the s&p. wondering which countries will be facing that into hong kong, australia, canada, france, india , the u.k. and the u.s., that will take place this week and run for the next two weeks we understand. joining us now is michael o'rourke, let's start right here where we start every single year. this is the year for active management. we've a double-digit gain on the s&p 500. we are talking about this is the year for active management. what are you saying you face that conversation? >> for the first time in a long time we are seeing a different economy, a different economic

outlook where you have this inflation surge that's taking over the globe that will shift monetary policy around the world so when you look at the monetary policy of the past 13 years, it's been lower for longer outlook with the static easing monetary policy working well for index investors. i think we are going from maybe shift where rates and inflation -- and will also be fueled by deglobalization and decarbonization. if you want to navigate what could be a very treacherous 2022. lisa: give us a sense of your take on the driver -- divergence between value and growth. is this the beginning of a rotation that could persist for

more than a couple of months? >> your daily rundown was superb. i do think this argument is important. am i concerned about that? a little bit. but last year had to do with jay powell looking for that further progress in the job market and we are in a reverse situation were all of a sudden jay powell has become an inflation hawk. it's been a very oppressive influence on the economy. it also becomes a political call. in that case i think he's trying to be much more diligent this year than we've seen in the past. i think that will be the key difference going forward which i think plays out in the value

space. tom: what is the character of this bull market? michael: we had record ev financials, don't forget this easing policy we had started before the pandemic. powell started cutting rates in the summer of 2019. there has been a lot of liquidity piled up in this market. i think what we are watching for as we shift years and look to a tighter policy, whether it's tapering and eventually balance sheet --. right now the liquidity is abundant out there and that's why we see some of the aspects of this market. to go back to that value versus growth argument, that's more

than citibank or citigroup or goldman sachs. there's a big disparity in this market out here and that's what this liquidity is driving. we should see big shifts in the market. jonathan: i think it's important . what does it say to you to see that much additional market cap added to that off the back of each and every additional auto estimate. i wouldn't call it insane. it felt wild to me. michael: it did feel wild. but it is interesting because now you have them coming out saying they would bump up their production and those shares had a nice move. competition coming into the

space. traditional automakers, bloomberg has a story about volkswagen and toyota looking big. you had sony saying they will introduce an electric car. this type of market response definitely invites more competition. >> ford had a massive year last year. can they do that again? michael going over some of the big issues right now. the passive versus active debate continues. the top five overweight stocks globally, two of the most underweight names, apple and tesla still for active managers. futures this morning down about two on the s&p alongside tom

keene. this is bloomberg. ♪ >> with the first word news. the chicago public school system has canceled classes after the teachers union voted to shift promote learning on tuesday about 73% of those in favor of the move. sink in and when the surge signs and a -- and approved by the union. hong kong is imposing new virus control measures for the first time in nearly a year as omicron seeks into the community. lard -- they scrapped large scales event -- large-scale events.

singapore says booster shots will be required vaccination status as the state prepares for an omicron wave. singapore will lean on home recovery and testing. officials will share covid statistics after the u.s. said it had data and urged americans to avoid --. 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. ♪

>> i know this remains frustrating. it is frustrating to me.

but we are making improvements. in the last two weeks we stood up federal testing sites all over the country and are adding more each and every day. jonathan: a little bit of pressure on this issue. from new york city this morning, good morning. your equity market unchanged. we are down a third of 1% on the nasdaq 100. the price action muted, here is the story out of the washington post in the last couple of hours. lawmakers begin earnings talks amid another round of coronavirus relief targeting businesses and not consumers. the early effort to focus on authorizing billions of dollars to help an array of businesses including restaurants, performance venues, gyms the face of potential blow from the

story for much of the last two months. tom: we saw the distribution of money to small business the first time we went around this exercise was pretty molding and wondered how did they distribute that money given the problems before. i think my jim would get the money a year or two later which is probably the next time i will visit them. jonathan: you raise a really important point. it's also been discussed in new york city, businesses that need help. the new york mayor, the need to get people back in the offices because the businesses around those are really struggling at the moment. tom: we are seeing it out of the south. i just want to mention the surveillance cost is worldwide.

you can hear it to new york, the surveillance cough you can hear it in paris. we need you to cough more often. jonathan: hopefully i can avoid that. tom: we are working on this as well. emily wilkins joins us from a washington bureau. michigan state was flat on their back in the peach bowl. her team came back boldly and they came back without one of the best football players in the game. emily wilkins, who is president biden's kenneth walker the third. who will come in and save the day for the president of the united states? >> at this point i would say it's in the court of chuck schumer. what we will hear from president biden tomorrow will be tying the

anniversary of january 6 with the voting rights act. that is something in the senate right now chuck schumer is trying to figure out if there can be some sort of bipartisan agreement going forward and if not he needs to rally members of his own party for potential rule change. although to be frank we are not seeing a lot of movement from senator joe manchin kyrsten sinema, two holdouts on making any changes to the senate rules to make it easier to vote -- pass voting rights and other legislation. tom: contentious debate around the midterms, is omicron so dominant that the political realities of the first tuesday of november should be pushed aside? >> the washington post has reported there is bipartisan consensus working together on a

bill that could send billions of dollars to businesses for omicron. this is something we've seen them focus on and it's something we've seen support for for republicans in the senate as well as the house. there are a lot of details to be figured out between now and the time something might pass but omicron has changed the game in a lot of states for a lot of businesses and localities. there is a sense congress might need to step up to address this. >> even if it makes sense and even if there is popular support, how much support is there for additional rounds of stimulus at a time when omicron is widely accepted as end,. they say they are all incredibly inflationary. >> those are key questions. there are concerns about the amount of spending and inflation that could derail these. it comes to how big the price

tag is. in sort of making sure they are balancing that going forward. it's far less than what we saw from other amounts of spending for covid as well as of the proposed legislation. lawmakers feel comfortable -- may feel comfortable moving forward. there's been concerns the government is allocated funding the never got to the people in the first place. >> a lot of people read the headline in the washington post saying this is impossible given the political climate. you are saying there is appetite to do something to prop up businesses.

>> we are definitely seeing that. the question is how big is that appetite. is it big enough you can see those republican senators join democratic senators and actually move something forward. i think that will be the big question. washington is off to a rocky start this year. i think it's been -- going to take more time to get a sense of where everyone stands if legislation like this is actually feasible or if it's something a small group of lawmakers are hoping to get through. >> thank you. i think it's fair to say an easier start than maybe what we are seeing for the dutch in kazakhstan. the increased fuel prices, the president has had to accept resignations today.

protests have been absolutely wild. this all over apparently an increase in fuel prices. things breaking down quickly. >> what i would suggest as well is in greatly remiss that we missed our show with ian bremmer about the top list of 2022 and across all the risk is the idea of the uncertainty wrapped around vladimir putin. instability across the former soviet union and you just wonder how they respond not only this, but the set of issues laid out two hours ago. jonathan: we will stay on top of that for you. good morning to you all. -8/10 of 1% on the s&p brain

yields up almost a basis point. for our audience worldwide on radio, this is bloomberg surveillance. ♪

>> every year the same conversation. the index explodes higher. three straight years of double digit gains. equity futures negative two on the s&p. down a third of 1%, some underperformance there. here's the sector for story for you. ripping higher. just two trading days. we are down about a 10th of 1% so already significant outperformance from some financial names on wall street.

right now tends unchanged. from even some of the biggest on the fomc. ending up at a higher regime is higher than the risk of ending up on the lower. a massive change to the story of the last two years when we've been talking about rate cuts. and now this is changed. this is avoiding ending up and for that even the likes of neil supporting two hikes. >> let me go back to you on this. if we have two rate hikes does that get to accommodative are more restrictive. jonathan: i don't think so. a very small removal of

accommodation. not with real interest rates. tens on the nominal yield. that's across asset price action. let's get you some names. >> a big selloff that we need to talk about in the u.s.. but really the damage is a lot worse than what we've seen. down about three tents of a percent right now. apples and tassels of the world help and push that index lower. it's the second tier tech companies that have double digit and in many cases triple digits. both in a price-to-earnings and a price sale basis. which punched another 1% in the

premarket. the tracks of these setting up for what could be a fourth straight day of loss. you look at some of the other areas that could be affected. higher inflation and higher rates. it's lower here in the premarket. a lot of the names fall into that category. roku shares plunged. this is the second biggest hole after tesla and then you go over to china and see those tech stocks. down about 3% which points out the hang seng tech index fell for a fourth straight day. that's likely to fall for a fourth straight day as well. >> we welcome you to a wound

important conversation with christian, goldman sachs and acclaimed for very dense detailed reports on the new ford and asset allocation. >> one of the hearts the report is the check tree of the inflation adjusted yields and there's a real rate in some way will line up through a negative statistic up near a positive statistic. is that a linear function or do we have to worry about acceleration and the effect on our portfolios is the real yield moves out of this? >> i think you asked the most important question for 2022. will we get a significant increase in the yield and in particular is a going to be gradual or very quick and if you look at the last few weeks, and

tassels very clear behavior, looking at the u.k., looking at cases, the hospitalizations and death rates, is the market comfortable that maybe it won't impact this. when you go back to reflation centers, most of that increase has been inflation expectations, not the real yield. this is the story we've seen all of last year. the fed is going to start hiking. once the fed starts hiking, the real yield starts to move higher. we are expecting maybe 30 to 40 bits and then could very well be digested by equities in aggregate. always the risk that it gets a bit shaky at times.

there's a risk of a bit more volatility. tom: i'm going to move on to other topics for the moment. i wanted to speak for all of goldman sachs. i don't want to get in trouble, but when are we going to finally end active versus passive management debate? give us your take on the value of active management and what we've seen in the last 12 months. >> you mentioned the beginning already, if you start to see this as a driver become less important. alf automatically gets more important. it's a typical discussion. early in the cycle, it's all about getting the -- right.

usually there is space for active management and whichever you think we are entering that now, the rotations that have been very violent we saw that again the last few days. we saw them become less significant. i definitely think there is an increasing focus on active management. it's about market timing, timing regions and styles. but we certainly see there will be much more pressure and focus and active management on the type of return. lisa: one of the active moves has been the value away from growth. something similar to what we saw last year. is this something you think will

portend a short -- trend. >> to me the whole cycle, this strong case for being better diversified. the best thing we could have done is the u.s. large-cap growth stocks and it would've been very tough to beat. in the coming cycle we see differential between regions and styles and dimensions might narrow. between value and ask the correlations between value and growth. it makes sense. benefits could tell you if you want to avoid risk there's a strong case to strategically

think about incorporating more value stocks. but as you said yourself there are these waves and they have been in favor. there's a risk the current value rate will accelerate and maybe partially reverse depending on what we have with omicron. the fed is very likely to start the tightening process and you may have more longevity. lisa: before we let you go i want to get your sense. scott of citigroup came out and increased his s&p targets for year-end. doesn't concern you everyone is competing to be the biggest bull right now? >> we look at the positioning and i think people are avoiding

this. they are probably the margin more with equities, not really down quality. that has meant -- they acknowledge equities especially with fixed income, they have reports on those valuations and to some extent fundamentals and i think that's correct. in the coming years if you continue to keep the cycle going is if increasing the bullishness comes on very cyclical parts print we were just discussing value. leading to a prolonged period

of time which can create a certain bullishness for the cycle. we don't have that right now. jonathan: always good to hear from you. this time around compared to where we were 12 months ago, i find this year and the debate much more interesting. much more divided across asset classes on where the bond market is going to go or where the equity market will go. a tightening of monetary policy. futures down five on the s&p. from new york, this is bloomberg surveillance.

>> with the first word news, i'm ritika gupta. 4.5 million americans quit their jobs in november. the increase was across industries and pushed the rate up. the unprecedented level of resignations suggest a lingering struggle to retain talent. -- shares surged after a doubled factory rates. ford is to start taking orders for plug-in trucks. morgan stanley is making a bet on office space. the bank has made a deal to take over space that houses the headquarters of blackrock.

it is amongst the biggest deals signed in new york since the pandemic began. china mobile has surged. the largest wireless carrier was removed from the u.s. market last year. one of the targets of an investor ban -- it arose as much as 10%. 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. ♪

>> i think we are in the midst

of an exploration chamber in the u.s.. for now it's all about rates and risk appetites. jonathan: from new york city with tom keene and lisa abramowicz, i'm jonathan ferro. down a little more than a 10th of 1%. some headlines from the u.k., dropping pcr tests to confirm a positive rapid test. the health security agency announcing changes to covid testing. people with covid symptoms should still get pcr tests. what happens after that five days in america when your isolation cuts. for many corporations that demand you get a pcr tests to come in. it seems to be a shift away from this test in america. and in the u.k. it is happening now. tom: it's happening right now as

we mentioned earlier. you wonder what the united states will do. i hope we can come to an agreement on a pcr tests but 2:45 this afternoon. i want to harken back to that goal over 10 years ago. a really remarkable goal. frankly they need a performance like that. jonathan: i'm pleased you are fired up about this. i think it has to be tennis star novak djokovic getting an exemption to play in the australian open later this month. there's been a huge amount of pushback over the last 24 hours for the exception. an individual most people claim has not been vaccinated. this came from the prime minister in australia who said novak djokovic will be on the next plane home if he is unable to provide acceptable proof for

a covid-19 vaccination exemption to play in that tennis tournament. the governments taken a step back and given the pushback. the government stepping back in. tom: very fluid to say at least. i think it's important to make note of the performance on bloomberg surveillance. i thought his audition went uncommonly well. jonathan: have you decided to see you would like? which one do you want. >> i'm somewhere in between tom and yourself when it comes to age so i don't know how you do it in those stools. it took me hours to recover from that. it is pretty tough out there. jonathan: i'm pleased you are comfortable. do you want to talk about emerging markets? [laughter] >> for me this is good to be a

year at the beginning of the year we have to turn in -- that will turn into two halfs. we will see the fiscal deficits and gdp widen. we will see improvement what comes down to growth. that's across the whole of emerging markets. i don't see a demand picking up enough to really get this moving in the right direction. >> we've been talking about how men eat covid policies can continue on that track. china is at the forefront. what is your sense of how much of zero covid policy they actually have and whether it's turning to ease around the edges which is why we haven't seen a bigger downturn than many people expected. >> it is going to be very difficult to derail them from a zero covid policy. they will have to at some point,

but you are absolutely right. this new year, year of the tiger. that year-end turn shifts, it will be much weaker this year than last year. you look at golden week i'm looking for a sub 5% gdp growth in china. you are going to see 50 basis points of rate cuts in china. one of the few economies where in projecting rate cuts. we will see what happens in turkey. interestingly enough is the curve in version and some of those economies. you are seeing those curves inverse. if you're looking for where does the u.s. go from here, look no further than emerging markets. they are way ahead of the game. >> i take comfort in that.

you and i were weaned on gold. as you study emerging markets you had to read robert cole cover to cover. there is a conceit out there that the e.m. world has changed. is it true? >> let's talk about phil kagan, friedman. when you look at the 1950's and you look back at hyper inflationary spirals, especially those prior to world war ii in europe seeing many similarities to what we are seeing in turkey. these guys were out to the end of december. things are not getting any better. it's gone down on a net basis. i don't know where that will come from and this is all about locals, this is all about

lifesaving domestic households on the ground. it's really scary stuff there. we will see what happens as we go into 2022. i don't things -- think things will last jonathan: -- will last. jonathan: i won't disclosure raise tom, but it's 28, 40, or 1952 is the year of the dragon. as recently as 2012 is the year of the dragon. just a quick google. just had a quick look. china is going somewhere on this.

zero covid in 2022, of the world was with him and 2020, not so much anymore. >> you've pieced this together perfectly. we talk about what's changed as we read that is china. what's really different now is china. they were piercing about the fragility domestically if we don't understand china. jonathan: the news out of hong kong specifically, the flights being banned for two weeks from the u.s., u.k. and six other nations. restrictions around restaurants will end at six clock p.m. in hong kong. big changes taking place at the level of tolerance has been an issue over the past couple of years. a very different vaccination backdrop in hong kong as well.

much slower than what we experienced today in the u.s. and elsewhere prayed futures down. with tom keene and lisa abramowicz, i'm jonathan ferro. this is bloomberg surveillance. ♪

>> the fed has such a difficult task ahead of them. they need to engineer a soft landing. >> i don't think the fed will end up accelerating policy noted to address the omicron variant. >> it's a better way to do it to take time through shrinking the balance sheet. >> this is "blumer surveillance." -- bloomberg surveillance."