>> i see inflation largely continuing this year >> they do not want to raise interest rates too soon and slid down the economy. >> i very much agree that the labor market is tight. i very much disagree that the labor market is strong. >> we are seeing a slowing down of the economy. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. deep into 2022 come on radio and television, exhaustion at hand.

a fed meeting tomorrow. jonathan: three weeks and a couple of mornings. that is how far into 2022 we are, and there is a reason why so many people think the fed can't get it done this year. they have done nothing yet, and we have already seen monster moves in this market. tom: i've got to believe after what we saw yesterday, i know they don't care about the stock market, the president doesn't care about the stock market. tomorrow's meeting is first, do not harm. jonathan: hawkish risk at tomorrow's meeting is increased, giving some investors now expecting dovish reaction to the decline in equity prices. one of the views out there this morning at citi. tom: we will look at the tea leaves. one key tea leaf we have just disguised -- we have just discussed, the market shows some of the angst out there. lisa: but not enough, a lot of people are saying, to get the fed's attention. this goes to the point jon just

cited. is the fed put dead? frankly, if the fed put is dead, does the fed want to give that statement really loudly at this next meeting, saying we are not scared of your jitters? in fact, it is our intention? tom: my data check is simple. after the exhaustion of yesterday afternoon, it is a different screen then yesterday. i don't see the ukraine tension on the screen that i saw 24 hours ago. jonathan: i see a similar move in the nasdaq, down 2%. the s&p 500 down 1.5%. in the bond market, yields essentially unchanged at 1.7689%. the pace of the move will always matter, but let's talk about levels. at the end of 2018, we were through 500 basis points. spreads are 200 basis points and change south of where they were at the backend of 2018. yes, the fed won't want this to get out of control, but when you look at levels versus levels, we are nowhere near the kinds of levels that scared them last

time around. tom: the conversation on economics, finance, and investment is what matters, and in these markets, we are thrilled bring you this morning geoffrey yu of bny mellon, with holistic dovetailing in of currencies and commodities. what were you looking at specifically on your bloomberg terminal? geoff: two words, real rates. we need to look at where real rates are. real rates determine risk premia. real rates affect everything as long as they are going up. risk appetite will not be in a good place. tom: can a central bank affect real rates, the first derivatives, the second derivative of real rate movement? geoff: they can affect that headline levels by massaging what the giphy indication is going to be at the -- what the communication is going to be at the front end. unless the fed announces yield curve control, i think they

should just let the market find a clear level of where real rates need to be. if they are prepared to push that forward, allow financial conditions to tighten, so be it, but they have to manage it. ethics and equity valuations, these interact with each other all the time. jonathan: let's talk a couple -- let's talk about a couple of those interactions. real weights up a lot the last three weeks. tech down a lot off the back of it. real rates up a lot. what has fx done? that is the link that has broken down a bit for me. geoffrey: real rate differentials, if you look at dollar versus em, dollar versus latam, versus central and eastern europe, fed is not actually ahead. we had the hungarian central bank surprise to the upside, managing inflation, hitting much more aggressively compared to the fed. this time around, the u.s. is

following. one area this is not happening, asia. china's real rate problem is the other way around. ethics is taking on a life of its own -- fx is taking on a life of its own. jonathan: within g10, within em, there are all of these different things going on. are you saying this is not going to be this router dollar story through 2022? geoffrey: absolutely not through this year. that is what looking at flows and positions are indicating. we saw cpi surprise to the upside overnight. brazil right now which of the best told currencies, a real rise in rates going up. you just talk about an election for that country this year. you want to own them on the funding side. they don't want to own swedish krona. swiss bank still relatively under held. so the currency is still alive and kicking which you would not associate with a risk off environment. lisa: how much is this predicated on the idea that will

not be a risk off environment, that the fed will do this and not trigger something? geoffrey: certainly the more aggressive calls out there speak to the market being gradually priced out, so i think the fed is going to manage this. on the other cited it, perhaps more problematic, where his growth going to come from. what about china? what about asia? this used to be the growth and then -- the growth engine for the last 20 years. what is going to happen to the import mix, to their consumer, do their household? lisa: at what point do the growth stories overtake the rates stories? they are probably going to ease rather than tighten policy. geoffrey: despite where 10-year

rates are and the yields are, it is pricing in a relatively pessimistic scenario. they are not reopening the economy, and covid and pandemic management is not going to come anytime soon, but over the last two or three weeks, we have heard them talk about tax cuts. if the chinese consumer can become alive and kicking, china actually starts to turn things around and export demand. that would be a good thing globally that can complement what is going on in the u.s. right now. europe i am of two minds right now, but overall, i think there is value in chinese equities, and that is what our flows are showing. tom: within all the blair of the news -- the blur of the news and the research, the opinion, are minds are spinning right now. tom porcelli of rbc capital

markets talking about a fed that once's -- that wants to slow growth. fine. can a central bank affect that? are we asking too much of central bankers? geoffrey: central banking absolutely upsets that if they have the right levers. you can slow growth in consumption heavy economies by impacting household cash flow. you can more than raise lending rates if debt financing costs start to go up or they are already high in the u.s. and the u.k. but the fed will not try to slow growth. the fed is trying to slow inflation and manage inflation expectations. the slowing down of growth, restraining it is a byproduct of that, and they want to engineer a soft landing. no central bank wants to engineer a hard landing. jonathan: have you got a sterling call off the back of this mess with the prime minister? geoffrey: the mess with the

prime minister should not impact sterling until we see a change in fiscal policy. i see u.s. certainly higher, but the boe can perhaps hike a bit more, and sterling could perhaps recover, so we will see what happens with number 11. jonathan: is it geoff yu just everything for the city of london? if people wonder why i speak so quickly, i have to think faster to catch up with people like geoff yu, just to keep up. tom: i tell this to people. what is it really like because you guys all talk so fast? i say, you've got to remember "the big short," the way they talk in the big short is normal. it is normal on the street. we all go a mile a minute. jonathan: that real rate story critical for the market. jonathan: what is driving -- lisa: what is driving the real rates story?

it has already been an entire year in three weeks at a couple of mornings. it really was the rates story, the idea of the fed tightening policy, and then it became a story of declining longer-term inflation expectations. does that matter as a driver of real rates and terms of what the disruption is in the equity market. jonathan: we are down by 2.5% on the nasdaq 100, on the s&p down 1.9%. tom: you look at the dow down 400, but to me there is a deterioration in the last 10 minutes as well. one of the things that is so important to understand is how delicate you and i have to traipse on the brakes. part of it is the development in engineering and state-of-the-art engineering class at bloomberg. we are gifted by a rising technology, and the '-- and the 'bramo cam is one of them.

it is so decked out, it does not even frame out the photo. we cannot get it in. but the tripod is important. it goes back to that 1950's look. jonathan: is that the 1950's? tom: there is a good shot. lisa: i appreciate that. tom: she documents our every step. jonathan: lisa, you would be ok with this, just letting everyone know what you tell us in the brakes, wouldn't you? lisa: would you be ok with that? [laughter] jonathan: tk, sorry for you, tom your s&p is down 1.8%. the nasdaq is down 2.5 percent. yields aren't doing much on tens, about 1.7654%. crude unchanged, $83.18. tom: i did not know who giselle was. i learned something with damian today. [laughter]

ritika: with the first word news, i'm ritika gupta. the kremlin warns that the u.s. decision to put 8500 troops on alert for deployment in eastern europe exacerbates tensions. the biden administration says if the troops are sent overseas, they would help nato forces in the region. more than 100,000 russian troops have been deployed near the border with ukraine. moscow denies it is planning an invasion. more problems for british prime and is a boris johnson over allegations of those wall breaking -- those lawbreaking parties during the pandemic. police are now investigating the claims, and johnson's office has confirmed that there were gatherings. verizon has given a signal that free phone promotions and 5g expansion costs are not hurting the bottom line. the largest u.s. wireless provider beat estimates for superb -- for subscriber growth,

plus gave a full-year earnings forecast that was better-than-expected. ge's fourth-quarter revenue missed estimates. the company was hurt by supply chain pressures and the effects of the omicron variant. it is a setback for ge ceo larry culp, who plans to break up the conglomerate next year. bloomberg has learned nvidia is planning to abandon its purchase of arm. it has made little to no progress in getting approval for the chip deal. and while, softbank is stepping up for an arm ipo is an alternative. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪

>> there is a confirmation of unity in the european union. there's a confirmation to help ukraine to address this crisis, and also there is a readiness to take measures as necessary and to impose new sanctions, both individual and sectoral sanctions on russia. jonathan: that was the ukrainian abbasid or to the european union. here's your price action, down about 70 points on the s&p, -1.6%. the nasdaq 100 down 324, down 2.24%. yields aren't doing much. tens at 1.1743% -- 1.7743%. lisa has to control her temper.

[laughter] euro-dollar coming in 0.5%. on that currency pair, 1.1270. we heard from the white house deputy national security advisor on siena in the last hour, pointing out that troops are ready to go at a moments notice when nato decides. this following the news that the u.s. has 8500 troops on standby, ready to bolster nato presence an eastern countries. tom: my response was to say, 8500 troops, i guess spread from finland and estonia down south. what you do against a reported 100,000 troops in russia? we go to alex purdue, who give us a lot of smarts -- to alex brideau with eurasia group. we are thrilled he could visit again. i am thunderstruck at the granularity of eastern troops, think vladivostok, taking the

trans-siberian railway all the way over to belarus. you don't do that unless it is for a reason. why does mr. putin have eastern troops in belarus threatening kiev? alex: we have seen other signs of that happening as well over the last few months, troops coming from siberia as another example of this. it does point to a buildup on the russia-ukraine border. you have some of these troops in military exercises, and that is another part that is being put on the ukrainians to come to some terms made back in december because they want a ban on ukraine's membership in nato. troop deployments in eastern europe is not just about ukraine. it is also about the threat putin perceives coming from the

u.s. and nato on russia's western border. tom: is the threat cultural? is it the westernization of ukraine? alex: ukraine's turn to the west , particularly to europe economically, and to the you u.s. unsecured -- and to europe and the u.s. on security concerns, ukraine had been very close. there had been very close relationships between ukraine and russia, and after 2014 in particular, we saw that really decline. it is in many ways a very different relationship now because of the conflict of the last eight years, because of economic changes. putin has been pushing against that over the last several months, but i think the security issues really have come up in the last couple of months as being the priority. lisa: if you could game out what

you think is likely to happen over the next few weeks, what would you say? alex: i do think diplomacy has a real chance here. we think it probably will in the end lead to some level of de-escalation in the coming months, but this is going to be a real challenge, seeing all of the escalation and posturing we have seen in the last 10 days or so after the first round of talks really not go well between russia and the west. but there are still areas where russia and the u.s. in particular can have discussions, including on these issues of nato's presence in eastern europe, including issues like missile deployment, nuclear weapons. there's a whole host of things putin wants to talk about, and potentially with president biden , and thinks a senate deal could be struck. there is room for progress over the next several weeks, but it is going to be slow going, hurt

to a certain degree by escalations we have seen over the last few days. lisa: how concerning is it from your perspective that china and russia are increasingly teaming up at a time when the u.s. is trying to regain its status with the european union as the alliance? alex: i think it is a concern certainly for washington to see this close relationship. i would say the russia-china relationship has gotten better over the last several years on a number of fronts, particularly on the security side. i think it is unlikely that we are going to see a formal strategic alliance where one comes to do the defense of the other in a major conflict, but they will give each other a certain level of support, and in this particular case, the russians in particular appreciate the fact that the chinese government has given a nod towards some of russia's

security concerns when it comes to the u.s. and nato. jonathan: thank you, as always. over in london right now, the prime minister boris johnson briefing members of parliament on the tension between russia and ukraine. of course, the u.k. at the epicenter of a lot of this. tom: what is the u.k. position? jonathan: looking to lead in a way the french and the germans, as numbers of nato, are not right now. germany often seen as a weak link on big geopolitical issues. i think in this case, they are no different. tom: is the prime minister beholden to russia for hydrocarbons? alex: certainly not ash jonathan: certainly not -- jonathan: certainly not in the same way the germans are. coming up a little bit later, the professor of economics at columbia university is going to weigh in on this situation in the economy and the federal reserve. we will keep you up to speed on the geopolitics.

futures down by more than 300 on the nasdaq 100, down by more than 2% on the, down by 1.6% -- on the s&p, down by 1.6%. lisa: is this really fears of the fed trying to get ahead of the announcement tomorrow, or is this concerns about growth really decelerating? i think that will determine which stocks people decide to sell, which people will buy, and what is the reaction after tomorrow. tom: to me, the take is flighty. there's no trend here. jonathan: it is a continuation over the last few weeks. we were going into federal reserve. some people believe the fed is going to back away. it is all up for grabs tomorrow. lisa: do you think this is essentially the equity markets waking up to the risk that bonds saw two or three weeks ago? jonathan: without a doubt. valuation the rating we are

seeing in tech, without doubt. in the middle of december come the federal reserve came away from that thinking it was dovish, that it was the minutes that were the wake up call, and then from 2022 onwards, we are counting the rate hikes. 4, 5, 6, 7, 8. from new york, this bloomberg -- this is bloomberg. ♪ ♪

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jonathan: live from new york city on tv and radio with tom keene and lisa abramowicz, i'm jonathan ferro. it is yesterday all over again. down 350 on the nasdaq 100. down 3.4%. the s&p 500 down 1.8%. a bid into the long end of the treasury curve. on 10, 1.7583. crude with a little left, up .2%. in the fx market, the dollar is stronger against everything in g10. euro-dollar -.5% to 1.1276. tom: for global wall street i would watch the persistent

dollar. the 210 spread is at four basis points. not where it was yesterday and the tumult. the schedule has changed. a fed meeting tomorrow. you want to know what glenn hubbard says of columbia university. in the meantime we have to separate not just a book but an important book -- we have to celebrate an important book. i will do the book with glenn hubbard before jonathan and lisa grill him on the present moment and what he would do as the chair of the fed. congratulations on a blunt title, the wall in the bridge. you minced no words. as a republican policy advisor there is the wall of trump and the bridge to the future. this is a brilliant and extremely concise book. i love what jason furman said about it.

you go back to our best intentions. on page 122 you have jfk with great intentions, but lbj cannot implement the trade assistance, he could not build the bridge jfk tried to build. that is one example. are we going to repeat a fractured american history? glenn: the growth we celebrate tails disruption. disruption is a demand -- and the supply can be walls of protection or bridges like kennedy tried to do. in u.s. history we have done it right. lincoln didn't. fdr did -- lincoln did it, fdr did it. that is the theme of the book. it is really about adam smith. tom: a delicate question. to the republican party get

beyond the trump certitude as defined by the wall in the bridge you would like to build? glenn: i think both parties can get behind bridge ideas because there about two points. preparing people for the world that is and will be and reconnecting people who get disconnected from an economy influx. that is something that does not have a republican or democrat flavor. people as disparate as paul ryan and president obama have had many of the ideas we have talked about. lisa: one thing tying the hands of republicans and democrats is the inflationary backdrop. how do you incur more debt at a time there does seem to be a concern? how do you think the federal reserve should handle it at the meeting today? glenn: most of the programs i advocate are fairly small. that is the shocking political thing. i just lies ways in which we could pay for it.

-- i describe ways in which we could pay for it. the fed has acknowledged it is behind the curve and trying to catch up. the question is not to add to demand -- i think the fed gets that. the key will be communication and what wall street thinks about stocks and what the economy thinks about near-term growth stock -- growth costs. lisa: how high can rates go until it becomes a real problem given how much debt has been incurred by corporations and the united states? glenn: not that high. even if we shifted interest rates up to 200 basis points, which is hardly superhigh, you would have real problems than the federal budget. the fed is independent. it will do what it takes to bring inflation under control. it is a warning to officials in washington we have to take the federal budget more seriously. tom: the moment we are in as

defined by ira jersey of bloomberg intelligence is a balancing of a rate policy and a balance sheet unwind. let's call it qt, which is not an original thought. are you optimistic we can do original economics? glenn: it is harder than people think it is. it is academically quite possible. you can do the math and try to count the oakland rate hikes what qt would be -- count in equivalent rate hikes what qt would be. qt is not just the opposite of qe. i think the fed is taking this very carefully. tom: does that extend the x access? we had this conversation earlier with claudia psalm -- with claudia sam. is the solution the x axis is longer than any of us presume and they will take their time

and wait for data? glenn: the fed will certainly wait for data. how much time the fed has depends on inflation readings. you do not want to let inflation get in grades in the wage bargaining process. the fed could wind up moving more rapidly. lisa: glenn hubbard of columbia, i am curious, for the economics profession, what the takeaway is after the fed got inflation so wrong. it was not just the fed, it was pre-much everyone. how did that happen? glenn: i do not know that i would call it pretty much everyone. the number of economists said they were adding to demand. a period of supply constraints were binding. there's a policy error that need not have happened. lisa: if you think this is a policy error that need not have happened, can it be curtailed by aggressive fed action, or do you

think this has longer-lasting influences based on wages, based on rent prices and some of the other pressures? glenn: i think the fed can get this under control. it has all of the tools and all of the institutional incentives to do that. having said that, it is hard. history is not kind to the view you need to have this kind of fed tightening without any economic or financial pickup. the fed is walking a tight rope. jonathan: did this fed chair deserve a second term? glenn: i think so. chair powell acted very seriously in the coronavirus pandemic. the bias would be towards a sitting fed chair who is doing a good job. jonathan: ultimately the president made the decision to give him a second term. for some people he lost a lot of credibility with his inflation call. are you saying that ultimately you can win that back and waited

back quickly? glenn: you can but it is not without cost. it would be better had a policy error not been made but yes, the fed can win this battle. jonathan: let's talk about the costs. how big you think the costs will be? some people say soft landing, other sadist too late, recession inevitable. how large do you think the costs will be? glenn: i would say the chances are better for a soft landing of the fed is clear it's communication and everybody understands what is happening. the risk would be if inflationary fractures -- inflationary pressures move faster than the fed thinks -- that is the tight note -- the tight rope i was referring to. yes, the fed can cut costs. jonathan: they should look

through what is happening through the morning with equities down and down hard. glenn: that is for the fed to decide. i do not think the fed should be in the business of putting a put to the stock market. jonathan: important comments as always. really enjoyed catching up with you. glenn hubbard of columbia university. a fed decision tomorrow. tom: a big fed decision tomorrow. important comments from glenn hubbard who has often been talked about about of governor vice chairman or even the chairman of the fed. this book is a gentle surprise. fear and opportunity indiscretion -- in destruction's wake. what is fascinating is the idea of harbored speaking for a republican party that is not have a voice. it we fascinating to see if the glenn hubbard politics is there in late 2022 or 2024.

jonathan: you say you would like to see more of an economic division? tom: my opinion is people like glenn hubbard have been sidelined. jonathan: the classic i do not have an opinion but here is my opinion. lisa: i think you asked a good question going forward for the federal reserve. what will the pain be they inflict? what will the collateral damage be for a tightening cycle after this inflation we have not seen in decades. that is where we are seeing the jitters pricing in, the uncertainty of the subsequent slow down. jonathan: to go back to what andrew hallman horst was talking about, there is a feeling that the fed will back away tomorrow. the bar is too high. at the start of the week you can make the argument come and things have changed in 24 hours for some economists on wall street come at the start of the week you could make the argument risks were skewed to a -- the

argument citi is making is that now everybody thinks the fed will back away because what is happening with the nasdaq down 2%, and therefore we have the risk of a hawkish surprise. you can tie yourself up in knots tried to work out tomorrow. my take is as follows. i am not convinced of the fed chair has given up on the essence of transitory even if he has given up on the work. we need to find out is the fed chair ready to break the back of inflation or wait and see what happens from spring onward when many people expect inflation to come back down. lisa: you think we will get the answer? jonathan: it should give us a clue. lisa: he should get control of the narrative. tom: jagged theoretical? is 2 -- can i get theoretical? is tuesday still the start of the week? jonathan: i think the week started yesterday. the week starts right now?

tom: right now. jonathan: important clarification. the s&p down 1.6%. kate moore of blackrock joining us in 20 minutes. she is never going back. this is bloomberg. ritika: president biden had what he said was a great call with european leaders on coming up with the unified position on russia and ukraine. he tweeted they discussed joint efforts to deter further russian aggression. the uss as many as 8500 troops could be sent to eastern europe to help bolster nato forces. another missile test from north korea. kim jong-un appears to have filed two missiles off of water off its east coast. it has fired more missiles since august of 2014. it has also warned the u.s. it

might end its halt on testing long-range nuclear devices. american express is putting the pandemic behind it. the company is boosting forecasts on revenue and profit after spending on its cars rose to a record. american express is also increasing its dividend. johnson & johnson forecast 2022 sales and earnings to beat wall street estimates. the health care giant is preparing to separate its drug and medical device unit from its consumer business. the drug unit accounted for more than half of the sales last year. 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 ritika gupta. this is bloomberg. ♪

>> on this idea growth is decelerating, like so many

things, potential sightings. it is like ufos. potential sightings. not confirmed. the housing market is accelerating. people will be much more willing to finance an asset if they think it will go up in value. tom: neil dutta with renaissance macro fired up about the gl oom crew. it got gloomier after he spoke in that huge rebound. the dow -300, the vix up. lisa: we feel the same generate uncertainty with the nasdaq leading the way down. tom: dollars strength 96.19. more data checks on television and radio through the morning. there should be a four hour conversation. it can be with ryan williams with his experience across institutional real estate in his own effort back by all of the

beauty of the investment industry. we are thrilled ryan could join this morning. i have eight questions but lisa has 12 questions so i will get out of the way. what i see driving around new york and driving around america are empty commercial space. you say it is because of amazon, it is because of digital. it is the pandemic as well. are the rental prices of that space coming down? ryan: is a great question and good morning. i think in commercial real estate there has been a story of winners and losers. we focus on asset classes we think will be resilient, that we saw accelerating pre-covid. we focus on multifamily industrial, and selectively opted. dear question, i think the calls for the office market being dead

were overblown. there definitely will be assets that are distressed and stressed , specifically those were the landlords are unwilling to put in the work to create greater comfort for the tenant base. a lot of the you are seeing our properties that are in flux because the owners are not willing to invest to make sure those properties are not the highest quality market, or they are properties that are being converted, which is another tremendous opportunity to converted office to lifesciences or retail to industrial space usage. that is where we see the opportunity, those abilities to be flexible and invest in quality. lisa: has the move to the sunbelt been overdone? ryan: another great question. we do not think so. we have been investing in the sunbelt for six years. pre-covid. we employed not just

institutional investor approach to selections of markets we think will be outperformers, but we also use data science. one of the differentiated elements. we have been focused on markets we see is affordable and high-growth for a while. we think markets like phoenix, charlotte, north carolina, all markets where we have a lot of presidents because of the relative affordability. there will be some saturation in many of these markets. we have started to look for our next cadre. as long as there is good affordability and job growth, good access to amenities, i think you will continue to see folks moving out of the urban centers into many of these markets. lisa: i apologize to cut in but this is a sensitive and very important question i keep seeing ask. how much has institutional investing pushed out individual

real estate investors in some of these regions? how much has the institutional push changed the dynamics? ryan: significantly. that is one of the founding principles of cadres. i believe individuals and institutions should be able to invest alongside each other. i saw firsthand that many communities that were being invested in by institutions were changing overnight. people do not know their neighbors and communities. what we have been able to do is build a platform -- tom: we will run out of time and what we are talking about is a third rail for our listeners and viewers. steve schwarzman will pony up a good billion dollars to buy 4000 homes. i cannot remember the numbers. fancy guys like you are taking over the housing and rental business.

when does that end? ryan: first of i will say i am not a fancy guy, i am from baton rouge and i grew up not owning real estate and that is why want to break out of the institutional world to start a platform to level the playing field. i think it will end when there is greater awareness the current model is not sustainable. there has to be greater access and focus on economic inclusion. tom: who will police that? the politicians or the market? ryan: you'll see a little bit of both, fortunately or unfortunately. i think there has to be greater economic inclusion. there has to be a focus on the committee you are investing in. it cannot just be about profits. otherwise you will see a lot of the unrest we have seen over the last couple of years arise again. tom: don't be a stranger. ryan williams. thank you so much. a third rail topic we rarely talk about.

lisa, i'd like -- i thought your question was great. this is a third rail topic coast-to-coast. lisa: is do this with institutions buying up not only the multifamily homes, but also single-family homes. the idea that bidding wars are taken out of the equation because those homes are snapped up like that. how much does that push the first-time homebuyer out of the market? how much is that a huge driver of the gains we have seen and how much does that make the housing market in sensitive to changes in mortgage rates at a time the fed is trying to use this as a tool to possibly tighten monetary policy and crimp the mortgage market growth. tom: the fix up -- the vix up. i am fascinated what microsoft does not want to say. they have $130 billion cash and equivalent. i guess they're using some of that. maybe they will do a debt deal

12 hours after the earnings report. they will lowball their success today, don't you think so? lisa: is a fine needle to thread because they have to show the dominance of their cloud computing platform. they have to show the momentum as people go back to person and brought forward a lot of the growth. how are they competing against amazon? i get your point. at the same time they have to prove their worth the people have put out. he baton margin 20%, it is top out there. lisa: are you investing in them? tom: i do not own shares. abi doing a 401k. lisa: they have a high bar will stop dan ives saying this is the most important earnings season for big tech. tom: the close will give us some light on microsoft and what we see for other technology.

"balance of power" at 12:00 today. the deputy secretary of treasury will join us at 12:00. on radio, on television, this is bloomberg. good morning. ♪

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jonathan: here we go again. good morning, good morning. equity futures down hard.

"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. major volatility. >> volatility is back. >> is a roller coaster. >> yesterday was one hock of a selloff. >> is not surprising to see the dramatic shifts back and forth. >> there's a lot going on for the market to digest. >> we have rich valuations on some of these stocks. >> we think you should be buying. >> a lot of opportunity for long-term investor. >>