♪ >> investors are hard-pressed to find a better place to invest in the future than the united states. >> volatility in terms of the rate increases, the volatility we are seeing in terms of anticipation of earnings. >> do not chase last year's performance. >> the bond market seems to be pricing in a very hawkish fed. >> it's painful. it's got a little more ways to go. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. an eventful day here. chairman powell testimony later. thrilled you are with us on

radio and television. you know my theme has been corporations will adapt. it is just a symbol for jerome powell, but the citadel transaction is another example of corporations adapting to all the cards they have been given. jonathan: that was your big call in 20 to anyone, and it was dead on. margins held up big time. an upside surprise for this equity market. a federal reserve that wants to take rates higher, and in bill dudley's words, maybe perhaps much higher. tom: the fed will be fascinating today. loretta mester will be riveting as well. i want to dovetail all of these pieces in. james dimon moved to -- moved the market yesterday. how does mr. dimon and his team react to what we see from citadel? that is where you get to the growth message we heard from mr. dimon yesterday. jonathan: to jamie dimon's point

yesterday on cnbc, the interview you are referring to come of major point is the economy is not the market. the economy, consumer balance sheets, fantastic. we need to distinguish between the two in the hours and weeks and months ahead. tom: it is going to be fascinating to see how he threads the needle around the politics of left and right. lisa: how do we determine how much weakness we can see in the market to allow the economy to continue to grind in a controllable way without some sort of wage price spiral, without some sort of disruptive bout of in-place and that could crimp growth going forward? tom: we've got to get to the data check here. to me, it is incredibly nuanced right now. there's not a lot of movement, but it is really actually quite interesting. jonathan: we had a ton of movement yesterday. the nasdaq down by 2%, 3%, and a

big turnaround. nasdaq futures positive again, advancing 0.3% on the s&p. the move in the 10 always gets the headline attention, 1.7586%, briefly through 1.80%. twos higher to 92. it is higher interest rates, more rate hikes, and as mike mckee pointed out, when we catch up with loretta mester, i want to understand the relationship between the balance sheets and rate hikes. do they complement each other? does one replace the other? that is what i want to work out when we hear from these fed officials in the next few weeks. tom: we've got to talk about inflation in washington, and that is a gallon of gas. brent crude, $82 a barrel. i will call it two dollars, three dollars from new highs. tom: -- jonathan: this story is

not resonating with the electoral base, and that is a massive problem for this administration. tom: greg valliere with a scathing note saying the democrats are off the mark, and particularly the president is off the mark. this is going to be really eventful. not another fed testimony, but something really interesting on the renomination of a chairman of the federal reserve. lisa, there is an auction today. do i care? lisa: you care because it is three-year bonds. it is fascinating to me. all of the auctions owing forward to going to be pretty interesting because we have the federal reserve that is going to be buying more bonds. they are still expanding their balance sheet. not only that, but you are having 3, 4 rate hikes getting back into the assumption for the united states this year. how about 2023? this is the issue, of do they go faster at the beginning and then stop, or do they continue with aggressive rate hikes as the likes of bill dudley would

perhaps like to see? tom: right now, brent schutte gets us started right now, with northwestern mutual. short-term is five years. forget about short term. let's bring it in big time to a three year perspective. what is the three year perspective given the cacophony right now? brent: i think in the near term, the market has likes to go higher. i know we are going through this painful rotation, which has always been a question of ours. can you actually deflate some parts of the market without causing that to leak into the broader market? so far, despite all of that commentary, u.s. value stocks have held up well. you see some of the things that did not make sense, they have deflated more than 50%. i think you continue to see that throughout the year. i think hopefully we get better news on covid. i think inflation does pull back as we shift more from goods buying to surfaces buying, and i think that allows the fed to be just a little bit less

aggressive than the market is pricing against an economic backdrop that is still strong. i think the first half is a pretty good part of the year. jonathan: just to jump in, you think this is a problem for pockets of the market, not the overall market, at least in the front half. tom: -- brent: yeah, and that was mentioned by tom. you are seeing value stocks holding up quite well. you've had an abnormal economy. an economic at a patient has occurred. we've had the forecast for a while. that has led to market abnormalities. you also have growth talks trading at record pes relative to value stocks. you have large caps trading at record pes relative to small caps. so we think that as the economy normalizes, which we think we are continuing to do, the market will have to normalize. that means that part of the market that has not done as well will do well as interest rates move higher. jonathan: take me to the second half then. brent: i worry more then because

the second half of the year, we could be moving towards that. at the end of 2019 we had a pretty tight labor market. between now and the end of the year, we could back to where we were in 2019 at the end of that time period. a leader economic cycle market where we are out of labor market slack. then the question becomes can productivity keep up. we only have around 4 million more people to hire before we are back to where we were in 2019. that means 10 to 20 months before the labor market could potentially be tight. that is when you might have more real inflation. not the one you are having right now based upon covid and some of those abnormalities. lisa: you talk about the first half and the second half and a bifurcated nature between the haves. a lot of people have said the same thing. how do you raise a strategy where you have the flexibility to rejigger at a time when everybody is doing the same thing in response to the same inputs and liquidity is being drained from the system? brent: we have been overweight

more the value in the small, cheaper parts of the market for some time, and we will continue to be overweight is markets to the middle part of the year. then we think about do we want to bring our own woody ratio down to reflect the fact that a lot of the easy money has been made, and the output gap may be closed. i still think the economy has legs into 2023 because i think productivity is the unsung story that keeps us going in 2023, 2024, but certainly the risks are rising. lisa: you said you would reduce exiting -- reduce equity exposure, and then what? brent: not bitcoin. that is a good question. i guess we will cross that bridge when we get there. i think you will seen yields normalize more in the coming months, which could provide more of an opportunity for real return at some point, but for right now we are still overweight equities relative to

fixed income. jonathan: final question. can i call negative nine cold enough for you? brent: it is cold enough here in milwaukee, but i am sitting in my placement, so it is find out here. it is zero fahrenheit. jonathan: brent schutte of northwestern mutual. i am just not familiar with fahrenheit. every time i see it is freezing, you tell me this is nothing. tom: today we are not on the edge of buffalo. jonathan: it is negative nine. that is the real deal. this weekend in new york, -12 celsius. that is just for the rest of the world. do you want to convert that to fahrenheit? tom: this is watchable, celsius versus fahrenheit. [laughter] lisa: fargo, north dakota,

negative five on friday. tom: how long did you have a used car in fargo before you ran it into a lake? lisa: it was so cold i did not plug it in at night, but i digress. jonathan: look at them. futures up 0.25% on the s&p. lisa was telling me the brain drain problem is a real thing, that young people were leaving. lisa: absolutely. you have seen a real aging and the population, which becomes a problem. we can link it back to covid because then what you have is you don't have the workers to actually help with the nursing and the other types of oedipal help when people get sick, and people are more prone to getting sick, so this has been a huge issue in much of the midwest. jonathan: from the temperature to the demographics. a little bit later, chairman

powell, 10:00 a.m. eastern time for preconfirmation hearings -- for reconfirmation hearings in front of the senate. clearly the outcome for many people is done, dusted. a lot of people feel that way. i think this could get quite heated ahead of this inflation print tomorrow. north of 7% is the immediate estimate. this is tom: tom: not a normal -- tom: this is not a normal testimony, not a normal reappointment. jonathan: this is not a normal show, either. tom: i have never wanted a commercial break so. [laughter] jonathan: put that in the promo. the audience feels the same way. twos-tens on the s&p, from a cold and beautiful new york, this is bloomberg. ♪ leigh-ann: with the first word news, i'm leigh-ann gerrans.

u.s. and russian diplomat's have agreed to keep talking. that was about the only thing resolved insecurity discussions in geneva. they are big differences over russia's troop buildup near ukraine. moscow is concerned about the possibility that nato may expand further east. north korea's kim jong-un is ratcheting u tensions. for the second time in less than a week, north korea has fired what appeared to be a ballistic missile into the waters off it ceased and coast. they moved at almost 10 times the speed of sound. jerome powell says the central bank will prevent higher inflation from becoming entrenched. still, he warns that the post-pandemic economy might be different than previous expansions. house remarks of the opening statement he will make at a senate confirmation hearing today. president biden nominated him for a second four-year term. in chicago, public schools will reopen for students tomorrow.

the teachers union leadership agreed to accepting a deal to restart classes in person. schools are being closed since last week, when teachers demanded that the city impose stricter protections against coronavirus. it is another win for organized labor at starbucks. the union that won a victory last month also prevailed at a second new york store, according to a ruling from the national labor relations board. starbucks may appeal. 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 leigh-ann gerrans. this is bloomberg. ♪

>> we still think triple digit oil is within the works heading into the second quarter. we see demand recovering quite

meaningfully, plus supply is likely going to start leveling off the next two months. a strict lockdown in china broad-based will lead to meaningful down close. jonathan: francisco blanch of bank of america there. revising their call for gdp down for 2023. alongside tom keene and lisa abramowicz, i'm jonathan ferro. equities doing ok, up 57 on the nasdaq, 0.4%. yield unchanged on 10s. back for 90 basis points on the two-year. it has been a ton of people writing and. a couple of questions. first one, what was bramo doing in fargo? we will save that for another day. [laughter] second one, it is brisk, not cold in new york today. tom: it is a horse farm.

you go into jersey, there's different new jerseys. there's a new jersey further out where everyone owns 400 acres and horses. that's al. jonathan: he's from the cold part? tom: it is brisk. [laughter] tom: it's where the horses in the spring go. it is brisk. jonathan: and he's commuted into new york and decided is not cold, it is brisk? lisa: no words. tom: he's got the boots on the whole thing. jonathan: i just can't relate to fahrenheit. this is perfect for me because i totally agree. this was from trading floor audio. "it is strange in the u.k. we tend to talk about cold weather in celsius and warm weather intern height. -- whether in fahrenheit." you say we are in the 50's. is that a jacket, a sweater? it is brisk tom: i grew up

looking out the window in the kitchen, and it was negative three or negative two. jonathan: fahrenheit. tom: yes, many days. lisa: dovetails perfectly with the situation in europe. jonathan: there we go. [laughter] tom: amrita sen joins us, director of research at energy aspects. she is wonderful at the microeconomics that gets you to 100 template dollars -- $120 a barrel on brent crude. there's never been a better time, amid the gdp takedown by goldman on china. do you have any clue what oil demand will be this year? amrita: we think it will continue to rise by about close to 300 million barrels per day. china actually isn't going to be the biggest driver of growth

because you've obviously still got zero covid policy there. we do not think they are going to lift that anytime soon. most of asia hasn't actually had much of a summer driving season as we have seen in the west. last year, a lot of parts of asia were still in lockdown or under some form of mobility restrictions. you are already seeing a lot of strong demand growth numbers coming out of there. now cases arising everywhere in the east, but once we are through this period, the summer should be very strong. lisa: what do you make of the francisco blanch of bank of america call for $100 a barrel of oil plus? amrita: we have been calling for $114 next year, an annual average. of course, it goes well above $120 next year. we don't necessarily see that this year. even though our models are showing that inventories

globally are not just at a record low level this summer, they are going to fall down, but they will be at levels we have never seen, to global basis, especially in non-oecd countries. there are risk that prices go higher, but the worry of near-term still is covid demand is hamstrung. opec has barrels to give. for us, the real spike in oil price story remains the second half of this year into next year. the caveat of that is the supply outages. we have seen so many of them. ecuador, nigeria, kazakhstan recently. without those, it will still be end of the year into next year. lisa: how much are we underestimating the higher cost to actually refine some of the oil that is going to be coming online, especially in light of some of the other material inflation we have seen around the world?

amrita: it is a great question, and some than we have been accounting for in our balances in terms of the economics. it becomes very important. we are looking at cost inflation of at least 10% to 15% across the upstream industry, and that just means that you need a higher price just for these producers to breakeven because they need that more in terms of further equipment, and just for sustaining their production. that is a minimum 10% to 15%. in some areas we are hearing about 20% inflation when it comes to oil services. jonathan: how strong is our understanding of the relationship between balance sheet reduction, interest rate hikes, and crude prices? the latter we have attentive experiences with. the former, not so much. amrita: absolutely. you talk about wildcards or the events outside of the core fundamentals of oil impacting crude this year. it is going to be hugely important. generally speaking, if we enter

a period of tightening monetary policy or fiscal policy, we are going to be in a period of lower growth, and by definition, lower oil prices. but if that is accompanied with inflation, oil tends to perform very well in a high inflationary period, so that is your juxtaposition with that. jonathan: this is really tough. that is the bottom line. this is the difficulty you have right now. what you're seeing with crude prices, when we have really tough days a round the equity market, look at where crude is, still around $80 on wti. tom: it has been persistent at $80. i think the timeline is really important. it is easy for financial media to make big headlines, $100 a barrel, but the timeline here, it has to gestate. it has to work out. what i can tell you is the pros say so much of it hinges on

china. jonathan: the gdp forecast from goldman sachs on where they think that weakness will be concentrated, the negative impact is likely to be concentrated in the first quarter, with a rebound expected in the second quarter. so there is a cut to full year gdp growth from 4.8% to 4.3%, but they think it is concentrated in the very beginning of the year. first quarter, we bounce out of that through the rest of this year. lisa: it also speaks to this broader shift, a structural shift towards greener energy that is removing some of the investment in crude, inphi also feels -- in fossil fuel's. how much does that play into higher prices and this -- i don't want to say spiral -- spiral? jonathan: sure, spiral. [laughter] activity being locked down in hong kong. more restrictions, another layer

of them. more flight restrictions. it is a difficult one for that part of the world right now. 10 year yields, 1.7675%. tomorrow, cpi. friday, retail sales. up next, a conversation with the brilliant david haro of harris. don't miss that. from new york, this is bloomberg. ♪ ♪

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jon: live from new york city on tv and radio, this is "bloomberg surveillance." tom keene look, lisa abramowicz, jonathan ferro. her equity market up .2% on the nasdaq 100 -- .2%, the nasdaq up 42. a big conversation about the front end of the curve with twos pushing higher. yields higher by three to four basis points. 93 basis points, 0.931%, and the atlanta fed president this morning speaking to bloomberg news and saying if the numbers continue to come in the way they have over the past couple months, i think a march lift off would be appropriate. we will be catching up with the cleveland fed president a little later this morning, 9:15 eastern on radio. tom: not a routine conversation.

and to hear that on bloomberg radio and tv through the morning. when you have a booking team like we do, our team is absolutely -- many of them work from home, but it has been superb. we said to them, you got to get us first-rate international investor and somebody, expert on european banking. but what we really need is someone who knows negative celsius. you get the rolodex out and there is only one name in surveillance land and that is david haro, packers fan. david, in 2008, giants packers, you are there and it was a -31 celsius when show. how cold was that game? david: it was pretty cold. you have to cover everything up and make sure that's, as you are drinking beer, that you had in your basement, you need a thing to drink your beer because that keeps you warm. you need beer. [laughter] tom: jonathan is taking nose.

-- notes. david: you have to start with a brought worse because that is feel. the beers anti-freeze and the fuel is a brought worse. [laughter] tom: thank you for that analysis from balmy chicago. david, on international investment, the fuel is a weaker dollar. will you get international equity performance single air t because you need a weak dollar, a weak dollar to make it work? david: it has certainly been a headwind. strong dollar has been a definite headwind over the better part of a decade really. now that the dollar seems to have peaked, perhaps we could add some reversal. but that is just one of the factors that has impacted international returns and strength of the dollar. it has been a headwind. i expected will probably be a tailwind but more importantly, areas like europe, coming out of the pandemic, ending the

negative real interest rates, the negative interest rate experiment will be bigger drivers. especially given the valuation differentials between say european equities and the rest of the world. lisa: let's push that forward into your call on european equities, especially getting a headline this morning from the world health organization saying omicron may infect more than half of europeans within the next couple weeks based on how much the transmission rates are increasing. is your view that you are emerging from this more quickly and will have a lower interest rate policy for longer and will allow equities to outperform in a way most people are not expecting? david: i think what will happen as this omicron rose to the world, and it kind of seems to have triggered first in the -- in europe compared to the u.s. the spanish prime ministers has we have to stop looking at this like a pandemic and learning to deal with this like a flu eventually.

rest of the world will get this message. it looks like china will be the last to get the message. what will happen is they reopen the economy and you finally are getting the synchronized reopening. this will be a major boost to the european economy, as well it for the global economy. european businesses really have a heavy export component to them. as the global economy reopens, i think you will expect to see the european economy, almost a worn tongue economic growth because the export influence it has on the economy. in the meantime, you have had these negative interest rates almost since the financial crisis. i think this will be coming to an end as well as the global financial system is fully capitalized. the reserves built up over the decade, money earned can now be used to invest, to grow.

i do believe it will be a better environment than the tailwinds hurting investors in europe and outside of the united states, the headwinds hurting them. lisa: is a way to get the most out of that call to go into european banks? david: i think that is one way, one way. i think this has been, for a long time, because we have been stubbornly attached to these, why? because the prices low. even despite those macro headwinds, they have been able to grow, i'll be at at a slow rate. you have an acceptable business performance despite the poor macro conditions. now these macro conditions are changing, so i believe you will see a buildup of capital. instead of the capital having a stay on the balance sheet

because of reserve requirements, they will be able to use the capital. you will see increase of the velocity of money and this is exactly why the central banks cannot sit on their hands. tom: we have to turn to european banking. it has been a horrific 2021 for management and all sorts of stories. you have been knee-deep in this and very visible, and i'm sure at times invisible as well. is european banking management becoming more anglo american where they will really adapt to shareholder pressure? david: i was talking to your very good report that covers this, and i think it has improved greatly. i look across our area, italy, san paulo, france, two of the best banking ceos i would say in the world, and credit suisse

which has struggled. tom: come on, david. i gotta cut you off. let's get to the chase. this credit suisse have to be put out of its misery? david: what has to happen is they have to allow change to happen via the new chairman. he is very capable. he has stabilized and repaired lloyd's. he is the exact answer to the problems. to be honest, this is the last chance. he is the answer to their problems. you need organization, discipline, a culture of risk control. this is exactly what he brings to the table. i think if they pick on him over the quarantine stuff, then it should probably be broken up. lisa: as an investor, how much time are you giving them?

david: you're being paid to wait in essence because the price of the business is 50% or 60% of book value. when run properly, it should be double or triple that. so we will be patient as long as we see progress. if it becomes unfixable as tom suggested -- by the way, many parts of the business our operating fine. unfortunately, many parts of that business, it is simple, banks make money. the object is to keep it after you make it. in credit suisse's case, they have not been able to keep all of what they made because of poor risk control and poor legal compliance, etc. if you can fix these things, all of the money that has been made in the past that has been printed away -- put away to fines and losses will be gains for the shareholder.

the engine has been producing income. it has been coming in the front door, unfortunately, because of sour leadership and management. i think it has been no secret. i think the past chairman of the business has been there over a decade presided over all of these legal incidents and market infractions. now that you have top leaders in the top organization, i believe this income that is generating can be captured. jon: you mentioned a word there, unfixable. what does unfixable look like? how do you know it when you see it? david: when you continue to see losses, and infractions, and a lack of excellence, and a lack of discipline, you need discipline. especially in financial services where you have translucent or

opaque assets. you need to be able to manage risks. you don't completely eliminate risks. you have to look at the risk reward. you have to price risk properly and balance it properly in order for a financial institution to be successful. unfortunately, this is what credit suisse is doing. tom: david, we don't care. what we want to know, aaron rodgers has a left tackle back, the gentleman from colorado in boulder. tell me the importance of the line for aaron rodgers in the left tackle. david: he's probably one of the best tackles in the league. if you give more time to aaron rodgers, that is like giving a sharpshooter -- tom: yeah. david: he becomes even deadlier. tom: it's unbelievable. thank you. john, i miss spelled aaron rodgers. i will go so much to the packers. i will never be invited in wisconsin again. jon: david, thank you.

david herro of ritholtz wealth management. tom: is that cold with a -31 degrees when chill? [laughter] jon: give me a break. let's get back to credit suisse. tom: we got two. jon: it's been down 20% since last year and david herro has been patient of this. highly critical of management over the years and here we are. it feels like, for the likes of david herro, this is the last chance at credit suisse. tom: i will go with that. what i know is what james gorman sees me at davos. he knows he will turn around and run because he knows i will ask him about credit suisse. jon: is that where you want to go? tom: i just don't get it. it has been a struggle for 20 years. jon: tom king, jonathan ferro. 9:15 eastern on tv and radio. the federal reserve bank of cleveland chair. lisa: i'm interested in that interview. [laughter] jon: i bet you are.

this is bloomberg. ♪ >> with the first word news, i'm leigh-ann gerrans. the u.s. senators are set to vote to impose tough new sanctions on the nord stream 2 pipeline. there is broad congressional opposition to the gas pipeline which stretches from russia to germany. some democrats are concerned the sanctions would complicate ongoing talks between the u.s. and russia. those discussions are aimed at easing tensions over russia's troop buildup on the ukrainian border. president joe biden travels to atlanta for passage of voting rights legislation today. senate republicans are bowing to block the measure and some of the president's allies are complaining he has not done enough to advance it. the bill would prevent states from curbing access to voting. in hong kong, authorities are doubling down on a controversial covid policy. they are reimposing some strict limits -- some of the stricter

limits since the pandemic began. schools will close again and passengers from high-risk risk countries are said to be banned from transitioning through hong kong's international airport. securities will get a minority investment in a deal that valued the electronic trading, about 22 billion dollars, of capital and cryptocurrency. paradigm will invest $1.1 billion. citadel securities is majority-owned by ken griffin. global news, 24 hours a day, on air and on "bloomberg quicktake," powered by more than 2700 journalists and analysts in over 120 countries. i'm leigh-ann gerrans. this is bloomberg. ♪

>> if you're able to withstand some of the pricing pressure and

supply chain disruptions, those are the quality companies we want to be invested in. take advantage of the volatility there. in terms of the rates increase, in terms of volatility we are seeing of anticipation of earnings. ironically, volatility around taxes creating opportunity for us. tom: this is informative. you can see that on bloomberg additional, radio and television, kristin was sharp yesterday was city private bank. lisa abramowicz, tom keene, jonathan ferro to get you to the top of the arrow or. we have loretta mester and then politicians. barry ritholtz, we knew he had the courage to go out the x exits -- x axis. your summary, which i thought was brilliant, this is an

excessive 2022. how do i invest, allocate, put cash to work if i am aberrant and excessive? barry: that's a great question and i think it is a two-step answer. the first thing the chart revealed to me is how little we have the ability to know what is going to come next. in fact, most of the pond and's and a lot of the -- pundents and a lot of the analysts barely have an idea what's going on right now. how can you expect them to forecast the future? it is one thing to say nobody could expect an externality like a pandemic in the first quarter of 2020, how do you explain the second half of 2020, and then 2021. we knew what would come and we still managed to get it wrong. given the fact humans are bad at forecasting the future, making the course corrections in your portfolio because you think you

know what will happen next, that is a fools errand. tom: it's a full's errand but i have to do something now. are you comfortable in cash right now? do you need to be invested? barry: there was an interesting article in the wall street journal yesterday about the fund management industry. put up great numbers in 2021. they were up 22%. when we analyzed why they were about 400 basis points below the s&p 500, and if you include dividends, five to 600 basis points, the key factor or at least one of the key factors was the cash they were carrying. carrying excess cash in an up ward market is a drag on performance. unless you have special insight on when the market takes a 10%, 20%, 30% drop, enough to make up for the taxes you will have to

pay your partner in crime, uncle sam, playing that game, especially around the 5% fallbacks, is silly. lisa: what you're saying is one hand is basic. that basically you cannot time the market, you cannot know what will happen, and you will invest. on another level, it is incredibly radical at a time where people are saying this is the time for active management. are you saying this is not the time for active management, people need to stick with indexes and not try to be smarter than the commonplace logic given the fact there are some any unknowns? barry: let me clarify that. when i say you cannot time the market, what i'm really saying is, for the vast majority of amateur investors, and a significant majority of professionals, market timing is all but impossible. there are a handful of people who have shown skills but there is the exception to the rule. people who have gotten this right, they are unicorns, really

rare creatures. to assume you will be the next lebron james is kind of egotistical. so there is that. second, i have been hearing this for 10 years. this is the year where active management outperforms the index. i guess if you say the same thing every year for eternity, eventually, through dumb luck, you will be right, but that is the classic broken clock problem . after 10 years of getting it wrong, the one time they will out form it is meaningless over the long haul. lisa: what is the consequence of this from a market perspective? a lot of people have been trying to understand the passive funds and what that means for investment and how efficient markets are. does that mean this is the make it or break it year for active management, and after this, the shift to passive will only accelerate? barry: so first, i think there is a key thing people get,

misunderstand about the debate. the vast majority of assets are managed actively. when we look at funds and etf's, that has become a majority passage. to recognize that distinction. second, when i make these broad pronouncements, i have to remind listeners that not everybody has the same time horizon, the same risk tolerance, even the same investment targets. if you are managing around the periphery of a portfolio and your job is to try to take advantage of volatility, i am not speaking to that crew. that is a different description than the typical mom-and-pop investor with a 401(k) or pope for leo that is a couple hundred thousand dollars. furthermore's part -- for the most part, the worse they do, the worse the returns are.

there are people who have short time horizons, completely different advice to them than the typical investor who tends to get excited when they see volatility and instead of taking advantage of it, exasperate the situation. tom: have to leave it there, we have breaking. barry ritholtz, thank you so much on the markets. there it is, lisa. we mentioned china gdp and macro babble. some industries have to deal with it now and there is united airlines with a little covid. lisa: coming out saying 3000 workers in the company contracted covid but they did say this is according to the chief executive officer that no vaccinated employees with covid are in the hospital. i believe their employees are nearly almost all vaccinated as they try to get back up and running. but they are not alone. we have seen this consistently, with disruptions in the airlines because of people calling out

sick. it is not just the airlines, a lot of industries. tom: here in new york certainly. it has to be destructive in newark as well. 85,000 is the number on the bloomberg united employees. with news flow, we have to set up not loretta mester so much but how she manages what we will see afterwards, the theater of the powell nomination. lisa: and the theater is a right way to frame this. you will see a lot of commercials made as jim was saying earlier bloomberg news, that there would be a lot of job owning. however, there could be real news if jay powell gives an indication of how much disruption in markets he is willing to tolerate or frankly even once to see as they try to get more transmission of a tighter policy through the economy. tom: up feel goes to red and green. futures flat, down future -- dow futures ever so flat. nasdaq can't figure out what to do. 10 year yield, 1.77%. it is a turn to the market as we

await the conversation with loretta mester with michael mckee and jonathan ferro. stay with us on radio and television. this is bluebird. ♪ -- bloomberg. ♪

jon: chairman pal is just around the corner. good morning, good morning. s&p 500 futures unchanged. the countdown to the open starts

now. >> everything you need to get set for the start of u.s. trading. this is bloomberg, the open, with jonathan ferro. [bellringing] jon: from new york, we begin with the big issue, chair powell headed to capitol hill. >> chair powell -- >> chair powell -- >>'s hearing -- >> what he will be talking about -- >> i'm looking forward to what he has to say. >> the fed is in a tough spot. >> they have a significant inflation problem on their hand. >> we are now looking at a seven handle. >> on the one hand, they want to appease financial markets. , on the other hand, you have the public upset about inflation. >> it has become political problem number one for