>> is going to be a market where people have to have a slightly longer term view. >> the markets are not asleep on this. the fed has been very clear that one way or another, they are going to bring inflation down. >> monetary tightening most hurts risk markets. >> the economy this year will be will to flee solid, but valuations need to come down. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. it is a domestic, diplomatic,

and economics and finance friday. the secretary of state of the united states reaffirms a policy back to world war ii. there will be an open door policy for nato. that is the heart of the matter, as the secretary of state speaks in geneva. jonathan: just one of the big issues for russia as a look towards the ukraine. the russians would like that door to be closed for ukraine. the members of nato can't guarantee that. the separate issue around all of that is the strategic weaponry stationed in ukraine. the president said that maybe they can do some thing on that issue. today was not about negotiations. i think secretary blinken was clear about that. he called it an exchange of positions and ideas. tom: to go into the history of this and a path forward, i've got a wonderful look back to 2014, but right now we have to look at these markets.

they are shocked by netflix. jonathan: i am looking at a single name down when he percent. that single name had a market cap of $200 billion. heavy everything -- have you ever seen anything like this, a $200 billion name moving toward percent? -- moving 20%? tom: no, no. as you mentioned earlier, this was flat out not signaled to the sell side. jonathan: i imagine the sell side, the analyst community are slightly embarrassed by this. to project out 6 million subs and this company says we might have a two handle, clearly there's a communication error here. tom: lisa abramowicz, i think to fold it in, you have been leading on this, at the end of the day, it is just about inflation. lisa: not necessarily for netflix because they are trying

to raise prices. that is a separate story. but inflation very much concerning to a market that does not understand how it is handed -- how it is having ramifications on the economy. i keep going back to george saravelos talking about this cycle, that people don't want to buy as much stuff, that people in lower tiers are suffering real wage losses. how does this dove teal -- this dovetail into a time at which the fed is forced to hike? tom: jon, let us walk through the data check to get to our good guest before we get to tina fordham, and we are monitoring the headlines of the secretary of state. i'm going to go continental europe. i litmus paper is always euro against swiss franc, as secretary blinken speaks, and it is going to go strong swiss franc. jonathan: the meal looks the same this morning. it tastes different. the equity market is lower, down about 1%. this time, the bond market is not shaking up the

equity market. the equity market seems to be shaking up the bond market. down three basis points again, down six basis points yesterday. that is why people speak of this self-limiting selloff in the treasury market, because at some point it starts to bite into the equity market and the equity market moves start to flow back to the bond market. are we just taking a pause from what we have seen in the first three weeks of this year? tom: we dive into earnings season next week with a lot of technology names. nadia lovell joins us now out of an optimistic ubs. tell us what you have framed in the first few weeks of january. how have you amended and adjusted the ubs view? nadia: we have not changed our view much. fairly the market has had a choppy start of the year, but does feel as if much of the selling might be behind us. we are approaching support levels on the s&p 500, and the

market was near oversold territory, so we are looking for some stability in the market going forward. i think usually you see a couple of these 5% pullbacks a week. we have seen the market approach that oversold territory and think about buying those dips. jonathan: you've heard those phrases, catch a falling knife. don't put your hand in a food blender. when it feels uncomfortable, that is when you should buy. how uncomfortable is it now? would you buy the dip on this? nadia: we have been somewhat unusual on tech for some time. we think tech will continue to face pressure from rising interest rates, and yield valuation needs to come in a little more. there are areas of tech, though, that we do like, and we will use the opportunity of indiscriminate selling to build some opportunity for the

long-term term, specifically in areas like artificial intelligence, big data, cybersecurity. there's an opportunity to build in high-quality names with sustainable business models. lisa: do you think the market has gotten ahead of itself with expectations? nadia: our base case is that we expect three rate hikes this year starting in march this year, followed by june and september. we are looking for balance sheet run off to start later this year. what is driving our view is that we continue to believe that inflation will moderate as the year progresses. we think that will alleviate some of the pressure on the fed to be more aggressive and bring back monetary policy to mutual. lisa: your firm calls for three rate hikes this year versus the four baked into market expectations. i wonder at what point do you start to see tech becoming a buy.

what is the tipping point to say now is really the time to go overweight and go all in? nadia: i think what you need to see, we will be watching the earnings season very closely, so tech companies can put up good numbers, which traditionally they have been able to do, so i think you got another 5% or so pullback in tech, it becomes a little bit more attractive. now we are really focusing on value. we think value into need to be well-positioned, particularly as rates move higher, financials. we are also looking at energy, given the continuing upward pressure we have seen on oil prices, and we think oil prices will stabilize at a higher level, so wishing that energy is also one of the best opportunities now on the market. tom: this is my own bias, full disclosure. i am absolutely fascinated at the comparison of microsoft using spare change to go after activision versus the travails

of netflix. i don't want you to do individual stock here, but what is the value of profit right now? what is the value of free cash flow right now? nadia: having good profit growth and also having a strong balance sheet and free cash flow can be a very powerful currency in this market. as you are seeing valuation and some of these tech companies, it is providing opportunities for m&a, which is already playing out early in the year. so we do think that is very valuable. a lot of these tech companies are flush with cash, and we would not be surprised to see even more m&a activity this year. jonathan: how does the international story stacked up now against the u.s.? i have heard people throughout names like japan, maybe take a look at china as they start to ease. how did they start to stack up at the moment? nadia: we do have a preference to the u.s. in terms of looking overseas,

eurozone looks interesting. china, we are still neutral on china, but the market has re-rated downwards over the last year, and there might be some opportunities there in coming weeks. but right now, we are neutral on china. jonathan: nadia, thank you. this equity market down 0.6% on the s&p. on the nasdaq 100, down 0.9%. we often say buy the dip, but it sounds so easy until you have seen one, a 10% correction. this is why people always make things sound very simple and easy in financial markets, and then we are met by a 10% correction on the nasdaq 100, if you are in cash, nudge nudge, wink wink, tom keene -- lisa: if you take a look at what we saw from netflix, there are real questions about how quickly it can get back to pre-pandemic levels of subscriber additions, how it can pass along costs to

consumers when they are trying to expand to areas much more hit by the pandemic. i am just looking at this, and the fundamental story will confirm the selloff that, as you said, becomes only more painful to buy. jonathan: over in geneva, secretary blinken still speaking at the moment. this headline jumped out for everyone because it is the essence of the problem right now. the united states will not go back on a nato open-door policy. i say the essence of the problem. not for the u.s., not for europe, not for nato members. it is a problem for russia. tom: let us go back to the foundation essay on this. this was hugely controversial eight years ago. university of chicago. it was blistering, the criticism from a liberal elite to what the realpolitik experts said, and it was just real simple, as the gentleman of chicago wrote in foreign affairs magazine. i guess we are unable to get

that quote up for a second time. what he said is simple. the west screwed this up. they over extended towards russia. here it is now. "the triple package of policies, nato, eu expansion, and democracy promotion added fuel to a fire waiting to ignite. a huge expanse of flat land that napoleonic france, imperial journey, and nazi germany all crossed to strike at russia itself," that is the fear of putin. jonathan: russia wants to close the door. the u.s. wants to keep it open. one of the many issues discussed in geneva. we will catch up with tina fordham, the global head of political strategy at avon hurst, very shortly on the split will story. on the nasdaq, noun 0.9%. a haven bid for treasuries at 1.772 3%. from new york, this is bloomberg. ♪ leigh-ann: with the first word

news, i'm leigh-ann gerrans. as tom was discussing, and geneva, russian foreign minister sergei lavrov says the u.s. secretary of state antony blinken promised to respond next week to moscow's demands for security guarantees. he also repeated that russia has no plans to attack ukraine. blinken says he told lavrov that the u.s. stands firmly behind the ukrainians. he also says that the kremlin needs to address u.s. security concerns. investors are bracing for the prospect that netflix is entering a new fillets of -- a new phase of slower growth. share fell as 20% after the forecast for new customers disappointed. netflix also says the slowdown will continue for at least another quarter. china is vowing to curb the influence of technology companies. authorities say they will also route out corruption tied to what they call the disorderly expansion of capital. this is something that -- banks

here in england are starting to bring staff back to the office now that the government has changed guidance on the matter read barclays is reversing its hybrid working arrangements. hsbc has told workers they can return and they will no longer be required to wear face masks. deutsche bank will also start bringing workers back to its london offices, and the rock superstar known as meatloaf has died. his 1970's album "bat out of hell" became one of the best-selling albums in history, with more than 40 million copies sold. meatloaf was 74 years old. 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. ♪ sec. blinken:sec. blinken:

discussion today was minister lavrov was frank and substance --sec. blinken: discussion today with minister lavrov was frank and substantive. we stand firmly with ukraine in support of its sovereignty and territorial integrity. jonathan: sec. blinken from geneva. from new york, this is bloomberg. alongside tom keene and lisa abramowicz, i'm jonathan ferro. futures are down hard on the nasdaq by about 1%. on the nasa 100, down 146. on the s&p, down about 28, 0 point 6%. yields are lower this morning, down three basis points to 1.77%. on the week of the nasdaq off by almost 5%. going into the opening bell, it is going to be more than that coming out of it. two year yields up by only four basis points on the week. it is a different flavor to the end of the week now. it is a treasury market bid. it is pure risk aversion. it is not the first two weeks of the year yields were blasting

higher, it was shaking things up in the equity market. it has flipped. start of the year, the dog was wagging that hill. right now, the tail -- wagging the tail. right now, the tail is wagging the dog. tom: it is also, as lisa mentioned, getting into next week. how many netflixes are there to come next week? jonathan: you've got the multiple issue as well, the valuation story. we still have not worked out what that balance sheet reduction is going to mean for this market, and the numbers at the moment, deutsche bank, met lose eddie and peter huber, throwing up big numbers -- matt luzetti and peter hooper throwing out big numbers. tom: we just got a 27 handle on the vix, which speaks volumes. our goal is to bring you experts, people with zero bs about the things of the moment, and we have hit a homerun out of the park here over the

massachusetts turnpike with tina fordham, head of global political strategy at a longhurst -- at avonhurst. thrilled to have you on at this historic moment. sec. blinken's family is steeped in eastern europe, steeped in this fractious relationship between russia and the west. i featured the realpolitik moments ago, the idea that nato is overreached. how does the president of the united states react to mr. putin's belief that we have overreached? tina: the president needs to hold the line, and secondary blood can -- and sec. blinken, just like angela merkel, knows that you cannot show weakness to vladimir putin. dividing the west and nato is

part of what is happening here. jonathan: -- tom: how do we show strength away from sanctions? what other avenues do we have east of kiev? tina: while we have all been busy fighting covid, russia has been able to make significant inroads in destabilizing its former satellite states. lithuania, for example, belarus, with the support that has come from moscow. also support from moscow to current eu member states. that is why, to those who ask why now, i would say we've got u.s. midterms in november, as all americans know. we've got a new government in germany. we have the u.k. focused on its own troubles. if there was ever a time to test the resolve of europe and the united states when it comes to

enforcing borders and other measures, now is that time. i think the question, to refer back to what you were saying, is whether the sanctions that have been suggested, these massive sanctions are going to be enough to deter putin, who might be thinking that we won't be willing to do the big stuff like sanction russia against swiss, for example. lisa: there may be lessons we can take from some of these meetings, in particular the relationship between the united states and the european union. is it significant that antony blinken went first to meet with olaf scholz and emphasized everything he said, we will work with our allies, we have decided on a plan, is that notable, a notable departure from the previous him this duration, enough to create -- the previous administration, enough to create a coalition? tina: you are right that it is more of an effort coming from

washington than usual, but when the u.s.-russia bilateral meetings were announced in geneva, the europeans were very concerned about decisions being taken about europe without europe in the room. since then, tony blinken has been at pains to emphasize the importance, but speaking to you from here in london, there is plenty of reason to be concerned that the failure of this diplomatic initiative is going to lead to a serious gas price crunch in europe, or a gas supply crunch, rather, and a price hike. of course, ukraine is also important agriculturally, so we feel it is perhaps more realpolitik for the united states. lisa: if you were advising multinational companies about how to prepare for some sort of escalation here, what mindset should they get in as they prepare for either sanctions or even military altercation?

tina: i do advise big multinational companies and institutional investors, and one of the things i have emphasized in my methodology is that we cannot treat these types of events as tail risks. nobody needs a geopolitical analyst who cries wolf all the time, so as a long-standing russia watcher, i am saying now that this conflict is entering very serious territory. you need to stress test against wicking up to a headline that says russia crosses the border into ukraine. there are some less destabilizing, but still concerning possibilities. perhaps, and annexation of part of ukrainian territory. remember, we've got russian troops stationed in belarus in addition to those on the border with ukraine.

tom: mr. putin is catching up very quickly. let's look at putin in the heart of the matter, which is the russian people have always projected south to the waters. they need a navy. it has been that way forever. explain to us mr. putin's feelings of ukraine as an avenue to curb my -- two crimea, to the black sea, and how the u.s. navy and nato should respond. tina: i love what you are saying. i lived in st. petersburg for a time a million years ago in my student days. it was frozen half the year, so it did not have direct access to the water. the russian empire, of course, came before the soviet union, having the channels, and it has always been important.

he does see himself as russia's, one of russia's great leaders come alongside this are -- alongside the czars. he's written extensively about this. because extend, for example, is in context. putin dreams of having pro-russian border states along the border are starting to track. the quote you put up interested me very much. it is one of the most important professors of international affairs and leaders on this. what he says it's perhaps nato has overreached, a goodbye a lot of the investors i talk to. why are we doing this? why are we poking the bear? here is where we bring in u.s. diplomatic history that says the united states can so that -- you is -- the united states cancels out any regional hegemons. china and russia have a big

thing in common, and that is wanting to be the regional hegemons. of course, that worries all of the smaller countries around them. so will the u.s. be able to maintain its global positions? that is what is at stake in ukraine, and that is what sec. blinken is going to be trying to project. jonathan: thank you. i think that final point is so important. tina fordham of avonhurst. those issues are different, but they have a lot of things in common. tom: that is a real clinic, and i will be honest, this discussion folds right into your framework of economics, finance, and investment. this is not discrete and separate from the real world of bloomberg surveillance. jonathan: for geopolitics, and the issue of the moment, which is inflation and what happens with energy markets, this situation with russia is vital.

lisa: they rely on russia for so much of their natural gas, at a time when natural gas prices are really leading the inflation reports that led to some 5% in the euro region. interesting to see how the united states tries to shore up trust with the euro region as a kind of go it alone in these meetings. i thought it was fascinating, the fact that they still went to the meetings to represent europe's without europe in the room, now trying to reach out with an olive branch. jonathan: the federal reserve is next week to get the week after that is the ecb. we have heard from ecb president christine lagarde this morning. she said in the last hour the ecb not seeing inflation spiraling out of control. the ecb must be data and state-dependent. no question the ecb will act when conditions are satisfied. no doubt when we get to the end of the year, we will believe those conditions are satisfied. tom: there is such a cultural

overlay here. i agree, the eu calculus is so different from what we are seeing. but what it comes down to, it is amazing just in the last 48 hours with the data that madame lagarde mentions how things have changed. jonathan: i think a lot of people, you and i talked about this going into the end of last year, many people are waiting for the end of this first quarter because the bar just starts to get higher, and there is this hope inflation fades. so can you forecast policy after march? probably. can you forecast that help seeing the inflation numbers in the summer? that is a little more difficult. tom: you sound like a professor. it sounds like economic mumbo-jumbo. our audience is going to feel it that way. already on -- our audience says, don't give me this 12 month overlay. they are like, wow, prices are up. jonathan: i am pretty sure it is

an insult, although i know tom loves professors. [laughter] my dad always told me if you can't do, you can't teach. lisa seems very upset by that, so i to get back. [laughter] this is bloomberg. ♪

jonathan: an hour away from the opening bell. this equity market is not looking good again. nasdaq 100 futures down .8%. on the s&p we are -.5%. the first time in over 20 years the nasdaq was up 1% intraday and finished down over 1% on back-to-back days. that has been the story. into the bond market, yields are lower again. down three basis points. next week, the federal reserve decision. tom: let's get smart. we need to get smart with someone with a claim in academics but also apprise you do not know about, apprise at

harvard university. they find the people doing well. bonnie wongtrakool is one of those people. we are thrilled she can join us in the world of portfolio management at the western asset management. thank you so much for joining us. i am loving your essay. you talk about our predetermined path. as madame lagarde mentioned, our data dependency. tell us about our determent data dependency. we are slaves to it. bonnie: the fed will be very data dependent. the fed has been focused on the hawkish communication, but at the end of the day the fed will be looking at the data. we have seen volatility in the rates market because the market is calibrating what they perceive as this new fed. as i said the fed is focused on one thing, the evolution of the data.

we are not seeing the case for what is being priced into the rates market. we are seeing a slowing down of the economy. we are expecting a moderation of growth back to trent. we have seen retail sales disappoint so i think we are seeing the case for our view. michael: you have a little bit -- tom: you have a little bit of experience. you know where the bond bear market is. are we price down, yield up, a bond bear market? bonnie: we are not calling for a bond bear market. our fundamental view is the economy will slow down. it will not be growing at the same space we saw before. we are seeing disposable income on a real basis decline in wheezing that reflected in numbers like the retail sales. that would not support a bond bear market. we are seeing that reflection in the way the treasury curve is behaving.

more verizon the intermediate part of the curve where the long end is remaining contained. there is a view but long-term growth will be consistent with the trend we saw before covid. lisa: when we talk about disposable income, i go back to the idea that real wages are deeply negative going back to 2008. disposable income is coming down. how much does this push the fed to move more quickly to hike rates to try to curtail some of the inflation that is stripping away their earnings? bonnie: it is a bit of a balance. the fed wants to address inflation. it is on the top of consumer's minds. at the same time they want to encourage participation in the labor force so people can reenter. we still have workers that are prime age. there has been a lot of talk about early retirement. we are talking about primates workers not yet back in the

labor force. we think the fed wants them to come back. the fed will have to balance between those disco sides of this mandate. -- between those two sides of this mandate. seeing whether we can get workers back in the labor force and having the labor force participation go back up. lisa: is this formula calling to buy duration? are you buying the selloff we saw -- bonnie: we are constructive on duration. we think you have to have some treasuries in your portfolio for diversification purposes. we also think that these current rates that they do provide value. we think the fed is overpriced and we can see some rally in the market because there is going to be a realization that is

overpriced and rates could come down. tom: those are really important comments. you are constructive on duration , you want the curve to go out of maturity to buy the price from a price to move up and a yield to go down. translate that to the fed parlor game. i do not know whether western asset pays attention to the fed parlor game. are people screaming for four rate rises? are they wrong? bonnie: it is possible we could see four rate hikes. tom: that is my fault. i messed you up. continue. bonnie: it depends on the data. it is not our call. for them to get in the full four rate hikes, you probably want to see some acceleration. you notice the fed call is going to moderate over the year. -- inflation is going to moderate over the year.

they are expecting that in the second half of the year. if inflation continues to be elevated that is not consistent with our view or the fed view. it has to come down and go on a downward trend going into the end of the year. tom: what do we do? with western assets it is a more long-term investment. your idea of short-term is three years and five years. what do investors do who will not be in netflix, they will not be in the equity market, need to click a coupon or find total return. what is the mixed of fixed income that looks most appropriate? bonnie: we think the spread product is well valued and it can do well, even if we see some tightening in financial conditions. we are generally overweight across the different classes, corporate credit, structured product, and em. within corporate credit we believe in are rising stars that are analysts have selected.

we think those will continue to benefit as the economy continues to mend. we think there are select reopening trades within airlines, cruise lines, autos that still look good. we also like bank loans. the spreads are very attractive, default rates are coming down and we are seeing ratings upgrades. i do not see the big -- the biggest reopening trade is emerging-market debt. it is priced extremely attractively and if we are approaching this point where the p divergence between the fed and other central banks is coming close, that is a good condition for emerging-market performance. lisa: given the fact there is so much turmoil expected this year and we are coming off low yields , what you say when people talk about the volatility and how you hedge against it and the potential returns they can expect. big institutions, pensions, endowments. what is an appropriate --

bonnie: in terms of hiking volatilities we think treasuries are the best diversifier. this is a relationship that is held over time. the other thing is diversification in general. our philosophy at western assets is to have a bloop of diversified trade -- a group of diversified trade where we have high convictions and think the portfolio will do ok even if our base case does not come to fruition. jonathan: thank you as always. bonnie wongtrakool. this next headline comes with a warning because it is incredibly divisive. this is coming from reporting and a swiss german newspaper. the world economic forum to take place in davos may 22nd to may 26. a press release is being prepared. tom: we go to the sources as well. we need to nail this down in

may.

why did they not give some sense their subscriber numbers would come in so much lower than expectations and what does this being for other companies? i understand it is an idiosyncratic story but the bar is high-end and disappointments are severely punished. tom: i am crying icicles instead of tears. lisa: i knew it would start. jonathan: can you say that in german? tom: [attempting to speak german] jonathan: just to be clear, this is a report coming out of switzerland. the press conference -- the press office has not had a response and i'm sure many of you could not care less. [laughter] i want to talk about netflix a little bit more. lisa: please keep going. jonathan: netflix down 20%. this is not a penny stock, not a playground. tom: seriously come into the

weekend, what does it mean for the confidence into the earnings to look forwards next week? jonathan: the confidence around this name has been hammered. we have seen moves like this after earnings with netflix. to see a move bigger than 20% you have to go back to 2012. it was not a $200 billion name back then. isn't it time to grow up? tom: that is exactly it. i hate the bundling of the fangs. they have $1 billion in free cash flow, microsoft have $65 billion, they are not comparative as institutions. lisa: were you talking about netflix? is it time to grow up a little bit? jonathan: i was talking about netflix. david kelly will join us. an adult conversation on bloomberg tv. the chief strategist at j.p. morgan asset management. lisa: [laughter] i do not even know where to

begin. jonathan: will cover the bond market on bloomberg real yield to restore your faith in programming. from new york, this is bloomberg. leigh-ann: bitcoin fell to the lowest level in more than five months as the world's largest cryptocurrency drops below $40,000 and hit a high of almost $69,000 in november. virtual coins have become a symbol in the retreat in speculative investment by the prospect of tighter monetary policy. china quietly urging banks to increase lending after a slow start to the year. bloomberg has learned the pboc has given window guidance to large state owned lenders and regional banks and is urging people to extend more credit to companies and households. bank lending was lower than a year ago. ibm has agreed to sell its ibm watson business to private equity firm francis: partners. terms were not disclosed but the

price was said to be more than $1 billion. ibm watson health helps medical providers manage data. ibm's new ceo has been focused on faster growth. bloomberg has learned intel plans to build what is expected to be the world's biggest silicon manufacturing site. the company will spend $20 billion on the chipmaking hub in ohio. pat gensler tells time magazine the company will use the new facility to research and develop its most advanced chips. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am leigh-ann gerrans. this is bloomberg. ♪

>> we have seen the accelerating phase you need in a bubble. that had taken place last year.

the nasdaq up over 100 from the low but also up 58% from december of 2019. even granted that covid decline, it was a hell of a year. it was year of acceleration. the nasdaq has started to weaken. tom: the wonderful jeremy graham foam. gmo and co-founder. he is to be kind and cautious. we have 14 topics. lisa abramowicz and tom keene on bloomberg radio and television. barry ritholtz joins us. skeptical reader of the sell side. we will rip up the script and talk about something jon ferro brought up this morning. i was too polite to bring it up. you and i will nail this right

now. netflix started in a 36 mile commute of two bright people from santa cruz on the way to san jose and san francisco. it is truly one of our great companies. not only that but they reinvented themselves three times. they have the greater silicon valley arrogance about not informing the sell side of the state of the company before earnings. is that what happened yesterday? barry: you are more kind than i am. whenever people say earnings missed estimates, that is always backwards. earnings are going to be what earnings are. the estimates got it wrong. it is not the responsibility of netflix to do of the thing -- to do anything other than share the occasional update with the analyst community. it is up to the analyst community to figure out are they hitting targets, will we do what

they think they will do? this is been ritually priced for a long time. it obviously had a wonderful surge benefiting from when everyone was locked down, stuck at home, could not go out to the theater, athletic events. a lot of what is going on is the market betting that the lockdown cara is coming to an end. i do not think the analyst figured that out. whether it is subscription growth or total hours viewed. tom: i will take your point in the industrial dover of the boring midwest has 18 analysts and they are a cultural way from the big tech analysts, aren't they? barry: yes. the challenge with looking at netflix, they are a content creator. they are a service. they are a subscription model,

and they were a film studio. when you add those things together, how are they selling their product, how much of a spending, how much they borrowing? to give the benefit of the doubt to the analyst community, this is a very difficult company to get a handle on. there's a lot of moving parts. that said, i was not expecting it when he percent decrease. look at how far -- i was not expecting eight 20% decrease. -- i was not expecting a 20% decrease. we look at how far netflix ran up into the pandemic this is not the greatest surprise. lisa: it might not be the greatest surprise to you but obviously a lot of analysts got it very wrong. it is leading a lot to wonder what else did they get wrong? what other miscalculations in terms of the dynamism of the clientele, is that a fair crossover or do think this is a unique story? barry: when we look at s&p 500

earnings and we average somewhere around 65% of companies actually exceed earnings consensus, more than half, that is telling you the analyst community are just spit bawling -- just spitballing and companies are manipulating them to play the game, into the case of companies like microsoft and apple, where they are leading by hundreds of billions of dollars, that has been the game for a long time. when we look at the past year or two, the numbers have been substantial. it is much greater. off the top of my head, around 80% of customers were beating analyst expectations, significantly above what has been traditional, and that suggest the entire model of guessing earnings and guessing revenues is deeply flawed.

it certainly never helped me make money in the market. lisa: help other people make money. which be buying the dip we have seen, particularly in tech stocks, in the nasdaq in particular? barry: it is very early in whatever sort of correction we are having. my guess is what we are really going through is the market wrapping its head around rising rates and adjusting to that. we knew it was coming eventually. for a long time it looked like two years in the future. now it is two months in the future. that is part of this. keep in mind we have had an amazing run, not just since the pandemic lows. the past decade has seen spectacular double digit growth of the s&p 500 based on record fundamentals. everybody wants the spread of the fed.

look at the earnings growth over the past 12 years. it has been spectacular, not counting the pandemic. the market has had a brief run based on fundamentals and it looks like this will be a pause to digest the gains. this does not spell at the end of the bull market. tom: breaking news. barry ritholtz, thank you for perspective on netflix. united states of america weighs evacuating diplomats and family members from ukraine. lisa: under the plan non-essential staff will leave voluntarily while family members would be ordered to return home. an announcement may be within days. this comes african ciliary tones from the russian foreign minister and secretary of state -- this comes from a and aerate tones from the russian foreign minister -- a very different message moment after the meeting ended. tom: the 10 year german yield is

the litmus paper of the european system. gdbr 1 zero index on the bloomberg sows -- shows the emotion of the announcement. we are seeing a significant move. we have yet to find support to the price of the german benchmark yield. a quiet day. lisa: yes, a quiet day ahead of next week spent meeting. we have the geopolitical landscape come the central bank landscape, and the tech earnings next week. the take away is nervousness. we see that nervousness increasing and growing. you are still not getting a bid into stocks. the game has moved a far away from the fed story. jonathan: i will look at it -- tom: i will look at it from the vix, 26.90 is not the 21 where

we began the week. we continued the tomato was news of the day on bloomberg radio and -- we continue the tumultuous news of the day on bloomberg radio and bloomberg television. stay with us on bloomberg. ♪

jonathan: can you believe we are only three weeks into this? 2022. your equity market is down and down hard on the nasdaq.

the countdown to the open starts right now. >> everything you need to get set for the start of u.s. trading. this is "bloomberg: the open" with jonathan ferro. jonathan: from new york, we begin with the big issue. looking ahead to the fed. >> the next meeting is very important. >> the fed meeting. >> the fed will have to move. they have to immediately stop q. week -- stop qe. >> in march it is go time. >> anything that moves low to begin with and then risk the policy mistake. >> if they risk the policy mistake it is because they move too slowly. >>