>> there's going to be a push pull between fear of the fed and the fed moving off of accommodation. >> as valuations support, it is not particularly good in some segments of the market. >> a lot of frost, a lot of -- a lot of froth, a lot of money has gone out of the more speculative parts of the market. >> this is a stock pickers market, but you have to do your homework. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: what a move in this bond market. from new york city, for our audience worldwide, good morning. this is "bloomberg surveillance, live on" this is "bloomberg surveillance -- this is "bloomberg surveillance," live on tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro.

yields on twos through 1%. tom: we are sliding into tuesday. no we are not. there is some real market action out there. it is going to cut different ways depending on what goldman sachs does, but far more the earnings tone into this week, and critically into next week, is just the key point. mike wilson of morgan stanley emphasizes that. jonathan: mike wilson looking for 4400 year end the s&p. lori calvasina saying this will dictate the rest of this year, the tug-of-war between the strong economy and the headwinds of policy in early 2022. tom: there's no question about that. this is how we make the sausage on bloomberg. i can't spell jon's name right now. how about the wilson-golub divide? we see a huge divide between the bulls and the bears.

jonathan: through 5300 at the top end. lisa: lori calvasina said the range is really wide. we admit that. but that is because the market right now is torn between about average economic growth trajectory -- above average economic growth trajectory and the fed being more hawkish than investors think. when does the fed come back into play as a result of market disruption? jonathan: bob michele says it is much lower than you think if you are looking at the equity market. the question you asked in the previous hour i think is an additional one at the moment. four hikes is the base case for so many people. where is the upside surprise coming from? lisa: pgim fixed income says this is a buy for some of these bonds with yields at these levels are get at the same time, if you start to see wage increases at the levels previously expected, is that a game changer for the long-term inflation outlook? tom: is the pgim call an outlier

call, where they are saying step in here and by the price for lower yields? lisa: yeah, if you look at most forecasts. people seem to think the longer-term treasury yield is going to continue to go up. but then you go to the stephen majors of the world and pgim fixed income, and it is a moment that is highly tenuous. we'll go back to the normal that we saw three years ago? jonathan: because it there at the moment, where does that fed funds peak? something a little north of 2%. i don't think we have fully recognized the real adjustment in that debate just yet. lisa: i think you are right. however, i think a lot of people are uncertain, and you can see people trying to hedge against this upside, which is the reason why people are so underweight bonds versus stocks the most going back to 2011. jonathan: jamie dimon says 5%, 6%, 7%. over what timeframe, i am not sure. the guy is a genius, that

everyone was talking about that and they weren't talking about expenses after that call. yields up three basis points on tens. in the commodity market, we will talk a -- talk a whole lot more about this one, 88 on brent. lisa: let's see if goldman sachs can complete the same patrick in talking more about his outlook. would goldman sachs comes out with earnings, we are going to be looking at compensation. we are going to be looking at expenses, at the same time we are expecting a really big boon for their trading and banking sectors. how much are they benefiting from the rising rate environment versus some of their peers? they are outperforming on a one-year basis based on the s&p 500, but on other financials, they are underperforming because they are less tied to that rising rate environment that a lot of people think will recover. at 8:00 a.m., we will be with standard chartered's chief

executive bill winters. how much has the equity market been shunned by foreign investors? we have seen them lag behind in terms of recovery. there has been a lot of rate hiking to try to attract foreign capital. the wildcard also china, at a time when they cut rates and come out with a 4% handle on growth at a time when a lot of people are really depending on some of these nations to really juice momentum globally. at 8:30 a.m. get the entire manufacturing survey, a read on how much a hit the economy has gotten from the omicron variant. i will be looking at supply chain disruptions. are we going to see any kind of easing in the prices paid? these kinds of indicators take on new importance in such a quickly moving economy. jonathan: let's get straight to this bond market with kathy jones, the chief fixed income strategist at charles schwab. thank you for being with us this morning. i am trying to work out, after how much work we have already

done your to date adding interest rate hikes into this market, whether this is the beginning of the end or the end of the beginning of the conversation about higher interest rates. kathy: i think we are discounting a lot. we are looking more at three rate hikes, but i think the focus ought to be on the balance sheet. that was the surprise that came out of the minutes of the fomc meeting, that not only were they poised to raise rates, but they were poised to use the balance sheet as well. i don't think the market has really quite figure out how the fed is going to do that. they have not really revealed much to us. that to me tells me how much they are going to try to maneuver the long end of the curve while raising rates at the short end, so i think three rate hikes, not four this year, but maybe an early start to the runoff of the balance sheet as early as june or july, and that is going to have, i think, implications for the markets.

tom: very importantly, whether you look at the twos-tens spread every day or the nominal yield, or friendly the real yield, if you are having a cup of coffee with liz ann sonders and she turns to you and says where is the pivot point, where is the fixed income yield point where things change, what do you respond? kathy: i would say if we got real interest rates in the positive territory, that probably is something that would be a pivot point for the markets. but i think that if that happens , short-term real rates move up, we get a pretty good flattening of the yield curve. that is something the markets have to deal with. tom: can you predict an inverted curve? do you have enough information to go to an inversion where the two-year is at a higher yield than the 10 year yield? kathy: i don't think so, and i

think that is where the balance sheet comes in. i think the fed can use the balance sheet to avoid an inversion of the yield curve. so we are not forecasting that for this year or even next year. i think that remains to be seen. that would not be our base case forecast. but it is a risk to the market. you see the back end of the curve already flattening out as we talk about that rate hikes that have not even materialized yet. lisa: although it is not just a fed rate hike that will read to a higher rate on that 10 year yield. i was reading a note talking about how much a rate hike the runoff of the balance sheet will count for. is it going to be four rate hikes, the equivalent of that with the balance sheet roloff taken into effect? what is your view on that? is this a time to buy short-term rates, or do using it is appropriately priced based on that outlook of the balance sheet?

kathy: i think the short end of the curve is probably appropriately priced, and i think there's a little bit more room on the long end, but we are actually telling people to start legging into a little bit more duration. we have been short duration forever, it seems like, for the last couple of years, and we are actually advocating starting to move into a little bit more duration at these levels because i think the fed is going to have more difficult he hiking rates rapidly than the market believes . we've got slowdown in the economy coming because of fiscal policy changes. we are already seeing some of the rollovers in certain areas of the manufacturing sector. you mentioned china slowing down. i think that the expectation is very high for the fed to hike rates very rapidly, and i don't think they will be able to live up to that in 2022. jonathan: awesome as always. good to see you. kathy jones of charles schwab. can we tease ahead to salida subramanian, joining us in the

next hour? fed tightening into an overvalued market, the s&p is more sensitive than historically higher rates. if cash yields rise, they are margin pressures from wage inflation, supply chain issues. they continue. you mentioned that point where things change. is it 1% on twos? does that get it done? tom: no, i would suggest not, within all the literature i read. you've got the nominal space, the current yield with inflation figured in, and as kathy jones mentioned, her analysis of the real yield, the property of jon ferro, you can see that friday afternoons, but that is to me the key issue. you looking at the nominal space or the real yield space? i would always tilt to the most space because that is where the animal spirit of the country is. jonathan: if you are looking at real yields, are you looking at the levels or the adjustment we have seen so far your to date?

the fact that still we have deeply accommodative monetary policy? lisa: and to add to that, do we look at the headline level or the underlying components, and some of the whole we have seen in valuations? to me, this is the question. will we see a broadening out that will reach the index level, or will it be this rolling correction that really hits names hard? jonathan: that is with the bears -- that is what the bears struggled with. savita is at 4600 year end s&p. where were we on friday's session on the s&p 500? 4663, let's call it. right now, futures done a little more than 1%. down much more on the nasdaq 100 get from new york, this is bloomberg. ♪ laura: with the first word news,

i'm laura wright. major u.s. airlines are warning of catastrophic disruptions from wednesday's scheduled rollout of 5g wireless services. a trade organization urged government regulators to prevent 5g from being implement it within two miles of where aircraft fly. airlines are worried new signals could interfere with aircraft instruments. a study from israel found a fourth dose of the pfizer /biontech vaccine was not enough to prevent infection by the omicron variant. researchers say the vaccine did raise antibody levels, but only offered partial defense against omicron. in china, the central bank is promising to use more monetary policy to spur the economy and ease credit stress. there are signs that the country's real estate market is getting worse. the property sector shrank at a faster pace in the final three months of the year. in the u.k., workers were already seeing all of their wages swallowed up by inflation last year. average earnings rose 3.5% in

november, below the increase in consumer prices for the first time since july 2020. blackrock ceo larry fink is heading back critics who say that considering environmental impacts in investing is a political motivated fact. in his annual letter to ceos, fink wrote, "we are capitalists, not environmentalists, but companies will be left behind if they do not embrace sustainable business practices." 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 laura wright. this is bloomberg. ♪

>> inflation is very high. we would not want to see it persist at very high levels. we have a 2% inflation goal, so it is very much on my mind and my colleagues' minds. jonathan: your equity market is down 48 on the s&p, down 1% on the nasdaq, down 1.66%. that is the bad news for the equity bowls. the good news, we are through the second saturday before and fomc decision, which means we are in the quiet period. you will have no fed speak this week. yields up three basis points on tends to 1.8162%. yields higher by six basis points. on tends we are up a couple of basis points. on twos, up six.

accrued up to $85 on wti, just short -- on crude, up to $85 on wti, just short. tom: i look at the vix. 21.5 seven really doesn't show a breakout to new fear, but it is an elevated an important tuesday. jonathan: and the goldman call lisa mentioned, triple digit crude q3 this year. for everyone that said yeah right, triple digit crude, we are not far off it, are we? tom: i have not done the extrapolation. i'm glad you mentioned it. annmarie hordern has never extrapolated in her life, bloomberg washington correspondent. i want to go to one billy joel and his great song "allentown," where he talked about the restlessness that was handed down. the congresswoman from the seventh district of pennsylvania susan wilde is restless, to say

the least. she is scared stiff. she barely won. she's a moderate democrat. what do the susan wildes do if they are restless in allentown? annmarie: it is a very difficult moment for the democratic party, and we saw this over the weekend in a number of op-ed's, talking about this hold the progressives have on the party. you can see that with what is going to happen this week, the push forward on voting rights even though they know they are not going to be able to get an inch. the problem with the moderates is that they lead up to the midterm elections, it is every day, kitchen table issues that americans are frustrated with right now. you can see that in poll after poll, talking about the fact that the biden administration and democrats are not focused enough on inflation. these are the kinds of issues

they want to see legislators talk about, and that is the precariousness, and you have her u -- you have representatives like you are talking about. tom: i think we forget that there are these elections that are a little bit close. i had to look it up, 51.9%, rounded up, 52% to 48% in the seventh congressional district. does bernie sanders, does aoc, does the left, does the president care about those people? annmarie: the president would definitely tell you he cares about his entire party and wants to read percent all of them. but the issue is even if you have a number of liberal agendas and more liberal lawmakers coming into congress, what this last year has shown is that even if you have these ideas from these progressive wings, and

even if you have control of the house and the senate and the white house, it is still a struggle to get many of these liberal items through. voting rights, old back better -- build back better is completely benched. they came in with a lot of steam and excited to talk about an act, and you now see it is just very difficult to actually get through, even as they hold a majority. it is slim, but it just goes to show that even holding a majority, this is very difficult and complicated. lisa: we started the segment talking about one of those main challenges biden has in his list of things he's got to worry about. that is inflation. given the fact that president biden's approval rating is as low as it is, how is the oil price really affecting the negotiations with russia at an increasingly tenuous moment between russia and ukraine? annmarie: the oil price is rising and potentially going to

triple digits, as goldman sachs was saying, at some point q2 this year. it is a massive headache for the administration. when prices were this high in the fall, we saw a lot of jawboning in terms of trying to get opec to pump more. we saw a release from the spr. they are still working on the release of that first one. what it is incredibly complicated, and evens they were to entice opec+ two pump more, we should note that most opec+ countries are struggling to reach their capacity now, russia being one of them. even if they wanted to be able to pump more, it is going to be and could bleed difficult or get they are going to be dealing with higher oil prices for the next month, and it does not bode well for the fact that american consumers are already frustrated with higher prices and inflation. lisa: is this factoring into foreign policy? it is not just russia, but with china, which came to some agreement to do their own oil

release in tandem with the united states, and we have yet to see everything come through on that front. annmarie: when it comes to geopolitical negotiations with russia, of course, natural gas and oil will come into the fray when they are discussing what kind of sanctions or export curves they are going to put on russia. it is more difficult for europe. they are on the doorstep, and particularly for germany. right now, we are waiting on whether the german regulators are going to greenlight nord stream 2. for germany and europe, this is a much harder issue when they are negotiating with russia in regards to ukraine because they want to be able to make sure they are talking tough on russia, but at the same time, they are dependent on russian oil and gas in a very different way than the united states is. so it is much more of a complicated issue as the u.s. trying to -- the u.s. tries to entice its allies, to talk

tough, and to put on tough payment systems. jonathan: how dare david solomon interrupted marie -- interrupt annmarie. we got to go. 2021 was a record year for goldman sachs. revenue comes in at $3.1 billion. estimate was at $3.7 billion. trading revenue a little light. equity sales and trading revenue, $2.12 billion. six sales and trading revenue -- fic sales and trading revenue. the stock a little lower following this in the premarket. tom: i would note, return on tangible equity, 24.3% for all of 2021. q4, 16 .4%. maybe that indicates the ebb that we saw at j.p. morgan and goldman. we dive into this on the break. i want to look at the vision forward on expenses. jonathan: down a little more

than 2%. david solomon saying 2021 was a record year for goldman sachs. the numbers at first look, just a little lighter on some of the trading numbers. we will get into that in just a moment. from new york city, for our audience worldwide, this is bloomberg. ♪

♪ jonathan: live from new york city, for our audience worldwide, alongside tom keene and lisa abramowicz, i'm jonathan ferro. equity futures down 44, off by almost 1% on the s&p. on the nasdaq, down 1.5%. stock of the morning, goldman, down more than 2% to $372. goldman sachs four q eps, $10.41 billion. we were a little bit lighter here, lisa, on trading on both fic and equities as well. lisa: which raises an issue for goldman sachs, which makes its revenue on that entire complex.

i also think it is notable, not only do we see lighter there, we saw a real increase in expenses that outweighed the increase in headcount, which grew by 8% over the period. jonathan: overall trading revenue, $3.99 billion. when you break it down, equities come in at $2.12 billion. fic sales and trading revenue doing ok. overall, just a little bit later on both those measures put together. the guidance we get from goldman this morning, from ceo david solomon, saying the following. 2021 was a record year for goldman sachs. if the extorting area -- the extra performance is a testament -- to diversifying our business and delivering strong returns for shareholders. tom: i just saw buried in the deck here compensation and benefit expenses, up 33%,

demonstrating strong performance. they are dealing with the same thing everybody else's dealing with, which is rising expenses. jonathan: in the headcount increasing 8% during 2021. that is the trend. we have not talked about this kind of thing for a long time. the question is, will we repeat this conversation for the next several years? tom: it is what we see from bill winters of standard chartered as well. i really don't have consumer banking back to 2019, but it seems to be a thumb up. jonathan: goldman down in the premarket by about 2.5%. weighing in on this, sonali basak. your first take, please. sonali: costs are higher. that compensation number, the jump we see is more than double the compensation increase your seeing at j.p. morgan by percentage terms. with that said, goldman sachs is

able to keep non-compensation costs down, and the efficient regency -- and the efficiency ratio for the year has shaved 10% off, so goldman sachs is coming in more efficient. the trading you guys have mentioned, that equity trading in volumes is really what people are worried about. an 11% decline is what i am seeing, a larger jump than we saw at j.p. morgan. the gap has narrowed quite a bit at a time where both of these banks have taken tremendous share, especially in the wick of archegos because both of these banks are massive prime brokerages. tom: as you look at this, and i will step back and take a 16,000 foot view here, is the solomon back different than the blankfein -- is the solomon bank different than the blankfein bank? sonali: while trading is very important, more than 40% of revenue, you do have a major

investment, billions of dollars worth of deals made towards asset management and consumer banking. so in the year, what are you going to see? the deals closing, them adding thousands of people when it comes to consumers in places like dallas and atlanta. so i wonder what the trading headcount looks like moving forward. tom: alison williams parachutes in with bloomberg intelligence. wonderful work across all of banking. i was stunned by the slide, i believe it was page 14 of j.p. morgan come on technology investment forward. does goldman sachs have the same technology oomph we see from fortress dimon? alison: i would say they have both done well in terms of investing in technology. goldman sachs, their revenue growth has just been outstanding this year, and a lot of that is

due to harvesting some of their gains in their asset management business on the proprietary side of things. the equities, the equity investment income, if you will. that has given them tremendous operating of rich. for this year, we expect that. lisa: how worried about you -- how worried are you about this miss in trading revenue are you? alison: it is a miss, but it is -- certainly we are not seeing some of the more dramatic declines we saw at jefferies, where there was obviously a lot more volatility. it is a major business for them, but when you look at the fees, obviously much more concerned if there was a miss on the fee side because that is where they have been a leader in m&a. they did see strong growth there. they really saw a beat there.

really solid beat for investment banking overall. fic trading coming in about in line. so equity trading not as good, and it is a little bit difficult sometimes with all the moving parts to project these streams, but i would be a lot more concerned if we were looking at numbers below the 2019 levels, and we are not. lisa: there's a huge focus on tech spending, and goldman sachs' head count rose by 28%, mainly on that tech build out. how do you try to value the way they are building out there tech presence and adding staff? alison: i think that is the difficulty for us outside investors is trying to evaluate the technology. that is an area where you do have to say i am going to trust that this management is making smart investments, and if you look at the success both of these firms have had over the last several years in terms of

gaining market share and getting traction and some of the newer businesses, for j.p. morgan it is just tremendous amounts of share they have gained, especially on the trading side. those investments have paid off, and the banks that made those investments for five years ago, especially on the institutional side in the trading business come on the retail side, deposits collecting business, those investments have paid off. so it is hard to tell from the outside, to evaluate that today, but we just have look at management and markers. tom: there's a great function on the bloomberg where i can pretend to be alison williams at any moment. j.p. morgan has a sterling price-to-book of 1.83% off the bq function. goldman sachs, 1.3 to present. can mr. solomon aspire to a j.p.

morgan like valuation? alison: i think that is a little bit where they are going in terms of i versus high-end their businesses and moving away from the more transactional institutional type businesses. part of the rees-mogg goldman it's a lower multiple is because they are more tilted towards these more transactional type businesses. investment banking is a great business, but as we saw in 2020, it can stop on a dime when there's huge amounts of volatility, so i think it could be a boom, could be a bust, but as they start to build out, goldman sachs in particular, they are building out their asset management's nest towards outside investors.

they have started these consumer businesses, and so they are working to get more to that over the long term. jonathan: wonderful as always. no doubt we will catch up with you tomorrow. goldman down about 2.75% in the premarket. retrade about $370.64. sonali basak looking ahead to bank of america and morgan stanley. just a second look at goldman for us and a push ahead tomorrow as well. sonali: the interesting thing, if goldman sachs shows tomorrow they have come in above morgan stanley because they are still above j.p. morgan, then we have a problem here. you have goldman sachs exceeding the longtime number one in equities trading, and what overcomes that over time? goldman was also the number one equity underwriter, so competition is higher than ever. to tom's point earlier, morgan stanley from price-to-book ratio

is trading at the same valuation as j.p. morgan. last year was really a plot change, these massive transformative investments, where goldman has made smaller and smaller deals. so does the paradigm now shift and does the topline matter more than everything in this competitive environment tom: very quickly, if someone makes $20 million off of a trading desk at goldman sachs, what do they do? you know all of these people. you are wining and dining them. what do they actually do after a year like that? sonali: sam: -- sonali: they may go to citadel, honestly. this is a very competitive environment, and you have the big hedge funds, but you are asking about talent. that tech talent going up. you were talking about laurie beer at j.p. morgan. demand to watch at goldman sachs, former amazon executive who came over as partner, who is he going to hire? jonathan: really strong this

morning. looking for to the coverage tomorrow as well with bank of america and morgan stanley on deck. j.p. morgan was cut to equal weight on friday from overweight with mike mayo, getting all the attention at wells fargo securities. "spending the benefits of rate increases," that's what j.p. morgan is doing in the mind of mike mayo. "making sure this historic increase in extent is will level off." tom: that is mike mayo getting out front. jonathan: 8:30 eastern time, we will get the view at standard chartered. bill winters, the ceo. don't miss it. about 50 minutes away. futures up on the nasdaq, down by 1.6%. we are talking about 2%. this is bloomberg. ♪ laura: with the first word news,

i'm laura wright. in the u.k., prime minister boris johnson accused him of lying to parliament. dominant cummings said he would sweep -- dominic cummings has said he would swear under oath that johnson knew about a young street party at the height of lockdown. johnson has said he was not aware of the plan for the party. oil tanker owners will have to wait another six months for the market to improve, according to opec. north korea has confirmed the latest in its biggest string of missile launches since 2019. kim jong-un's regime says it tacked it the fourth set -- it tested the fourth set of lunches this month. toyota expects to miss its annual output goal because of a persistent shortage of

semiconductors. the world's number one automaker hoped to build 9 million cars in the fiscal year that ends in march, but it is having to pay her in february target due to the chip crunch. donald trump is planning an expansion of one of his biggest properties. trump national in miami. the president has said he will create 2300 homes, as well as retail and commercial space. he calls it perhaps the most exciting development in the country. . 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 laura wright. this is bloomberg. ♪

♪ >> transitory will be effective because in order for the trend

to continue, there are technical and legal requirements, and it is difficult to imagine how it will all function. jonathan: the ceo of naftogaz. good morning to you all. futures down 42 on the s&p, down 0.9 percent. on the nasdaq, down 1.45%. yields higher on tens by two basis points. on twos, much higher. twos through 1%. the last time we could talk about a 1% was in february 2020. contributing to the move we see in the bond market, the commodity market just short of $85 on wti, up 1.3%. idiot dollars on brent very briefly. tends to wake up to as we get back on wall street. we are down 3.7 percent now to

three point 76. there's a seam on wall street, investment banking bezos expected, compensation higher, headcount higher-than-expected. that is the theme on wall street this earnings season. tom: also look back at february 2020, where we saw a two-year yield at 2.43 percent. maybe the distance to get the two-year back. javier blas scheduled to be with us on oil, but first, kriti gupta joins us on oil. kriti: let's talk about where people are putting their money. you're seeing them pulled out of the stock market come out of the treasure market. where you go over those returns? it looks like hedge funds are going to the muck had a that --

to the market like that. people are getting more bullish on the commodities sector. you have some of those forward curves in backwardation, which tells you there's expectation of future contracts being more in demand. the idea that the oil demand is not going to slow down anytime soon. you also have geopolitical tension in the mideast. some rebels sending drone attacks over to the uae. lastly, some concern about whether or not russia can actually keep up with the oil bets they have promised. tom: thank you so much. all of it wrapped up in the world for sale, and award-winning book by javier blas. we are thrilled he could join us this morning. i just looked at oil demand back 20 years. it is a beautiful, rising chart of oil prosperity. we are getting back to it off this pandemic. you assume that will demand expect trend? javier: it almost has gone back

to trend. we had around 100 million barrels a day over the winter, and the expectation is that is going to continue. you look at the futures market, the demand is going to continue to rise into the summer, and summer of 2022, it may be the summer that 2021 and delta took away from us. we could potential he had an all-time high over the summer or later part of the year. tom: you and i were weaned on the excellence out of deutsche bank. everyone off took the xls spreadsheet and tried to memorize it as well. i want you to play in right now the russia plug-in. adam once told me it is so darn hard to know what russia is going to do. do you have any clarity of what russia is going to do on supply and on demand? javier: not much of what adam

will pay, but clearly struggling to increase production. it is going to take effort. it is going to take a bit of time. the notion that opec can easily increase current production, i think we need to look at russia increasing very slowly, and with saudi arabia and the united arab emirates, the only members of opec+ that actually have enough spare capacity that if they want more production, they can do it on a very short timeframe. lisa: which is the reason perhaps we got this big reaction to the attack on the united arab emirates, because it is a swing producer at a time of such tight supplies. what is the longer-term outlook based on the reaction? in markets is it simply that oil prices will stay where they are

come or that any disruption will only send things higher? javier: i think the market is a bit binary. obviously we have supply disruptions. we are going to have higher prices. when we had a relatively small supply disruption in ecuador, that was in up -- that was enough to send prices up. we are not going to get much clarity from china until the end of the olympics and the chinese new year, so there is a better balance, but market is very tight. there's also the financial market that is going to play its role, above $90 a barrel, lots of call options. if we heed those levels for options, then it will push the market higher. jonathan: i think "the world for

sale" should have won the "ft" book of the year, but i don't think the could stomach even get to a bloomberg opinion another year. thank you, sir. javier blas of bloomberg opinion. tom: the movie is coming out memorial day. jonathan: do you want to ask him if he's sold the rights? javier: no, we talked about before. lisa: who plays him? tom: who plays javier? tom hanks. [laughter] jonathan: they headcount, those gp numbers -- those numbers from jp morgan to goldman, that seems to be the big issue for the people running the bank, not the people working at the bank. lisa: right, the people earning the money are enjoying this. the issue is that the actual compensation is growing at a faster pace than certain sectors of revenues. this is the concern. are they going to actually be

worth it longer-term? it goes back to a question you asked. will this be an ongoing kind of price increase they see on each individual employee, or are they going to try to make this a one-time thing at a time of such uncertain inflation? jonathan: sonali pointing out that overall revenues up 8%, compensation soaring over 30%. it feels like revenge not just for the last 12 months, but the last 10 years. i think you're not going to get the small violin on a program like this for wall street traders, but i think for a lot of years, they have looked at record profits across wall street, you are working at a bank, you see massive stock buybacks and are wondering, where is the pay? where has it been? this seems to be where the bigger push is. i think it is 10 years worth. tom: should we assume that paying your staff more is a bad thing? jonathan: it depends on what the revenue profit line has been doing. if you are making loads of

money, i don't think it is a bad thing at all. for stock investors, i thing it is a good thing as well. the problem that investors will have is if comp and expenses are going up and revenue is not doing the same. from new york city, this is bloomberg. ♪

>> the problem you have early in the area -- in the year is the fed. >> markets are underpriced for the potential for an increase in the terminal right. >> destocked market has been asked regnery skeptical of the fed -- the stock market has been extraordinarily skeptical of the fed. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. on radio, on television, not your