♪ >> what is important here is how the investor risk appetite has been. >> earnings will start to matter more. >> there is a risk to growth, especially in the second half of the year. >> financial conditions have not tightened enough, clearly. >> i think it is a bumpy ride. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: what did russell crowe say, "are you not entertained?" can you do the accent? i that tom can -- i bet tom can. futures down seven on the s&p, negative a little more than 0.1%. this morning, it is quiet. this month, anything but. tom: russell crowe celebrating ash party winning the australian open, no doubt. what i love here is the battle

you have outlined, the parlor game of rate increases and all of that devolving back to economic growth. how do we know? we are going to be friday or next monday with a lot more data under our belt. jonathan: we are expecting it to be softer and payrolls. you may even have a negative number. will that change the rate hike conversation in any way? tom: it is going to be asterisked by omicron, no doubt about it. you see 2% gdp maybe something for q1. how do we frame the second quarter gdp? maybe we begin to see that exact one week from now. jonathan: the new consensus on the street becomes five hikes. lisa: really, the question is, is this as good as it gets? at a certain point, are we going to get better growth ahead than we have seen over the past decade, or is this the peak, and

is the inflation going to decelerate growth anywhere that could potentially be problematic ? that i think is what you're seeing suggestions of in the yield curve. jonathan: that is what is fascinating about the steve englander call, a more definitive slimming as the year progresses. slowing not just of inflation, but growth for the back end of this year. that is the standard chartered call. tom: he talks about a risk rally. after what we saw friday, and i am not in any way predicting the market, we begin february this monday with a 28.80 vix. there is some angst out there, but nothing like what we saw he would you go -- saw a week ago. jonathan: up another 0.4% on the nasdaq, up 57. earnings, earnings, earnings. amazon a little later this week. the s&p 500 down nine points on

the day. down just a bit on the month, 7%. in the bond market, yields are higher at the front and the back end. 1.7856%. lisa: is this going to be a frontloaded federal reserve? ? is a 50 basis point rate hike at the march meeting completely off the table? 11: 30 am, perhaps san francisco fed president mary daly will talk about it. this goes to the quote in "the financial times" over the weekend, the atlanta fed president saying if a 50 basis point rate is required, than i am leaning into that. you pointed out this does not mean he supports a 50 basis point hike, but it means it is not off the table. maybe a 100 paces point hike is not off the table. but do they see a problematic amount of inflation that they want to get ahead of, and do they suggest with their moves at that is what they are doing?

today, the u.s. census bureau coming out with a report about the incomes of older americans. the reason why this is interesting to me is because deeper dissipation rate stays very low for those 55 and older in the united states, basically retiring. it is not a great job market for the jobs they want to do, especially if there are problems with respect to covid, so how much do we see any information on that? qatar's emir will meet with president biden. how much support as the confrontation between russia and ukraine gets worse? crude for $90. i was looking at returns this month, more than 16% you have seen that kleiman brent crude. jonathan: on -- that incline in

brent crude. jonathan: unbelievable. it is 100 basis points now for march? lisa: anything is on the table, honestly. what seems likely is a 25 basis point hike. it seems unlikely they would go 50 basis points, but what they say about the balance sheet, what they say about the parameters that would push them to hike more, is really where my focus is. jonathan: thank you. oneness now, sarah hunt, portfolio manager at alpine woods capital managers. how active were you this month? sarah: we were fairly well positioned coming into this month, so we have been active in terms of what we are looking for that might have gotten hit with the rest of those stocks. we were somewhat active, but we were fairly well positioned coming into this because we were concerned about this selling into the end of last year. tom: if someone is bullish, where is the opportunity right

now? sarah: there's a lot of opportunity and some of the tech stocks that got hit. i think part of that was apple saying that part of their supply chains have eased. i think that gave people comfort that some of the issues they were concerned about her getting a little better. tom: joe feldman has operating income at amazon, and again, over a longer timeframe of 24 months, it is breathtaking, the gross. when you look at the tech stocks , you are not looking at one-week performance or one quarter. how is your timeline to judge the value of tech? sarah: i think the timeline has to be pretty long. some of the companies have grown fairly well for a very long time. when people start to talk about the tech issue earlier with the rate tightening issue, there is a bifurcation in technology for companies that can. i really think that is -- that

you are really starting to see that. some stocks have gotten hit with all of this that i think are decent values. you've got some 15 times earnings stocks in some of the chip acres. some of the chip equipment maker's are cheaper now than they were before. i think there is some real growth because you will continue to move where we are making some a connectors. if supply chain issues have taught us anything, i think people are going to be basing their production on semiconductors in other places because they don't like the dependency, so i think there's a long runway for some of these stocks to grow, and that is what people are going to be looking for as we go forward. lisa: as always been a valuation issue, at least for 2022. some people are looking at the potential for real rates in the united states to go to zero. kostin among them -- david kostin of goldman sachs among them. how long before you start going in and buying some of these high-quality names? sarah: historically, we have never seen negative rates before. just getting back to zero should not be a cause for major concern. i think growth can still happen

under these conditions. the problem with inflation is it is systemic in ways that is very difficult to type. -- very difficult to tighten. that is going to be a longer-term issue. the housing problem as rents go up is going to be non-transitory as well. i think just getting back to zero is not a tragedy for most of this group, but i think the longer-term question is going to be what does that look like going forward. where do rates go, and what happens in the interim to inflation? lisa: a lot of people saying it is the cyclicals usually in into and not necessarily the growth name that have benefited low rates. do you disagree with that >> are you saying that these big names have the greater capacity to grow with inflation? sarah: some of these big names have the capacity to continue to raise prices. the problem is you have a

tailwind on one side and a headwind on the other. i'm not sure that is going to be the biggest place to meet money, although we think some of those stocks have come down, too. it is really just looking at individually, stock by stock, what does it look like for them in the future for the next two or three years. what does it look like? what does the interest rate due to them, and what do the end markets look like? that is kind of an individual stock stock analysis that has to be done. jonathan: what a busy month. all of that work for a flat market. thank you very much. i was just were minded of rbc's lori calvasina having this conversation. i think it was the front half cyclicals, back have both. there's growth in the economy -- this growth in the economy becomes a little scarcer. tom: we don't need to go into the mass because my brain is not functioning after watching too much for all, but it is real simple.

she says we have repriced. we have re-gauged the fed and all of that, and from here up, it is that simple. jonathan: just working things out, it is just kind of calculating what would happen if something else happened, the sb that hundred down 10% from the peak, gin ret -- january 23 to january 27. the real 10 year treasury yield rose by 60 basis points to zero. by 15% to 3800. if it rose by 100 basis points, all else equal. that is not the base case at goldman come but that is an important copulation to start thinking about a like more. lisa: really, the risk is to the downside. you ask have we repriced, have we factored in rate hikes, perhaps we have. here's where the balance sheet

comes into play because the balance sheet could bit in chile have avon more of an impact on real rates, and the global tightening cycle also having a real effect on where real rates and long-term rates really end up. these are some of the questions that have not been priced in. jonathan: are you surprised no one has downgraded their forecast a month into the year on the s&p? i am just waiting for it. i'm not saying they should. i am just waiting for it. lisa: you're getting the ends of it. downside risk. jonathan: that's where it begins. tom: slippery slope, jon. jonathan: thank you. the countries in this morning, tk -- the contribution this morning, tk. [laughter] good morning to you all. this is bloomberg. ♪ ritika: with the first word

news, i'm ritika gupta. u.s. senators are close to agreeing on a russian sanctions bill, according to foreign relations committee chair bob menendez. the measure could include penalties even if vladimir putin does not send troops to ukraine. the biden administration will brief lawmakers this week on the standoff. ridge prime minister boris johnson has received that report of the government investigation into the so-called partygate scandal today. the probe into possible wrongdoing over parties at downing street during lockdown. johnson will respond to the report in a statement in the house of commons. north korea has added to the largest series of missile tests since kim jong-un took power. it appears to have fired one of its biggest ballistic missiles in almost five years. it flew southeastward for 30 minutes before landing in waters outside japan's economic zone. in pro football, it will be the

cincinnati bengals versus the los angeles rams in the super bowl. the bengals rallied from an 18 point deficit to beat kansas city 27-24 in overtime to win the afc title. in the nfc championship, the rams overcommit deficit to win. the super bowl is a boy 13th on the rams -- is february 13 on the rams' home field. 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's bipartisan support to sanction russia now. punish put in and send more weapons to the ukraine now so they can defend themselves. more troops to nato. i would just say this to president putin. if you invade the ukraine, you will destroy the ability of future presidents to treat you and russia as normal. jonathan: senator lindsey graham , the republican from south carolina. from new york city, with tom keene and lisa abramowicz, i'm

jonathan ferro. we give up some of the gains on the nasdaq now, positive just up 0.05%. end of the bond market, yields are higher at the front end and the long end, up to basis points on tends to 1.587 6%. big rally on crude. wti right now, year to date up that much, on the session, 87 dollars. through 90's on brent. -- through $90 on brent. you're not allowed to complain about penalties in rest of the world football when american football has some of the worst overtime rules i have ever seen in the nfo. makes no sense. the college overtime rules, they are good. why can't they just do that in the nfl? tom: because they are slaves to tv. they are slaves to getting the game done to go to the next game. i believe with the zeitgeist, they are trying to amend it to something

commonsensical. i assume they will do that at the end of the season. jonathan: the college rules makes sense. each side gets a turn in possession. you see what happens. i just don't get it. the way it worked out yesterday is the way it worked out anyway, so that wasn't a big deal. but to have a coin flip and have first score wins, i don't know. tom: i would suggest every other major sport is sobered by the success we have seen the last couple days. what is really important to understand here is the nerd fast known as -- the nerd fest known as "bloomberg surveillance," if anyone involved with us is playing morning wordle and guesses that the word is libor, that is a pretty sad statement. annmarie hordern down in flames onwardle -- in flames on wordle this morning. how do you pick libor? you can do that. that you can't do that. -- you can't do that. annmarie: there were two

letters, l-i, and that was the first thing that came to mind. tom: let's move onto to the white house today. they've got a lot of optionality. we talked about ukraine earlier. i see rumbles that bill back better -- that build back better may have a third or fourth life. do you buy it? annmarie: i buy it in the sense that this is the president's senior economic agenda. he spent last week talking about it. while he does admit he's not going to get the entire package done, there are potential hopes that chunks of it will be able to get through. the democrats are certainly hoping that at least this cautions could take place before he gives that state of the union march 1. it would be very challenging at the moment, given how difficult in the to do list they have in february to get something done before the state of the union, but potentially there are talks that they are going to be discussions regarding build back better.

but remember, key to this negotiation is going to be senator joe manchin, who just last week in west virginia on local radio was talking a been -- talking again about how concerned he is about higher inflation. tom: in the moment, it is february, and we frame march. windows democratic party panic set in about their prospects in november? annmarie: i think that is already starting to set in. you can see how they are selling some of the bills on the hill. this week is focused on a china competitive bill. gina raimondo has been forthright, talking about how this is the way you can fight inflation on one part, and also the administration, the democrats, we'll talk about that as a way to fight and be competitive with china. for them, this is twofold. that is a message they want to take with them into november. there's other things like the sanctions and talking tough on vladimir putin, and they're going to be looking across the aisle, showing that they can

work in a bipartisan fashion, and everything for the democrats also going to turn to the supreme court nominees. these are some of the top agenda items for them in february. they are certainly worried about midterms, but they can use these kind discussions back home with their constituents. lisa:lisa: meanwhile, inflation definitely front and center for potential voters as oil prices are rising to the highest level since 2014. any further discussion in washington dc about not just releasing reserves, but also possibly propping up production in the united states? what is the plan? lisa: the plan at the moment --annmarie: the plan at the moment as they are continuing to talk to opec+ allies. we can see whether they will want to increase production. really, there's two countries that could potentially do that, saudi arabia and the uae. saudi arabia for the most part has remained that they are just going to continue along the path that the group has outlined, and many of the other countries are struggling to reach their quotas, so it does put the

administration in a very hard place. even if the administration wanted to go to chevron or exxon and say i need you to produce more oil and gas, these are not state companies the way aramco is to saudi arabia. so it is difficult for the administration, and it is a very hard position they face because they clearly want to get gas prices down. when you look at brent crude north of $90 a barrel, this is alarming to the white house. jonathan: did she spoil it? lisa: she spoiled it for the control room before the segment. jonathan: did she give away couple of the letters. ? are you -- the letters? lisa: are you going to ask me to confirm this spoiling? i really enjoy wordle, so i will just leave that there. jonathan: thank you. we need guy johnson in london on standby to ask plain all of this when we actually get the report. we understand from the prime ministers spokesman that

partygate and its report will be published as received, and they will publish that before the prime minister's statement. i don't know when it will be published and i don't know when the prime minister's statement will be. tom: what are they going to say? in i think it is commanding heights, they got the liquor list of winston churchill on the boat over to delta -- over to yalta. i never imagined that much alcohol, and i think it was all drunk in like four days, not only by the prime minister, but a cast of 100 characters or whatever. we have gone from yalta and churchill drinking down to what, six tricks? -- six drinks? jonathan: we are going to find out. it depends on how much of this is redacted because there is an ongoing police investigation as well. tom: i'm just going to suggest on the second floor, where they have those lovely cocktails, is that partygate? i think it was.

jonathan: i think you might be suggesting that this is a reason to visit london. [laughter] remember when tom became the brexit correspondent just so he could go to london every two months? from new york, this is bloomberg. ♪

♪ jonathan: live from new york city, looking to close out a brutal month of january if you are along the nasdaq. i'm sure it hurts. futures down about 0.5% on the s&p. we turn into negative territory on the nasdaq right now, coming in about 0.1%. the russell where the underperformance is, down by 1.2%. on the month, down about 7% on the s&p. as you might've heard some of the worst month going back to march 2020. i promised we would talk about the standard chartered bond market called. we can do that now and take a look at two. they go from 1.1% to 1.6% for the end of q2, and they look for a subtle move lower to 1.5% to end the year. this is how they frame the call, the hockessin us upfront, and much more dovish as the year

progresses. they'll are -- they are looking for hike, hike, pause in july, and then stop. that is why they see the peak on the two-year in the middle of the year, not at the end of it. we are about your to date up 47 basis points. let's talk about the shape of that curve. there in mind that standard chartered thinks the fed backs away. two is up a lot. twos-tens rolling over. on the year, down around 17, 18 basis points. that is a flatter curve your to date. over the last 12 months, down 37. the curve is flatter, flatter, flatter. tom: for those of you on radio, jon is showing the correct arithmetic trend. to get the first and second derivative, you go to logs on the y-axis, and it is breathtaking how twos-tens has flattened. jonathan: the heavy lifting has

come from twos. a lot of that is behind these calls we are hearing on wall street now. lisa: the idea that they are not going to go much further, the determine rate is not going to be much higher than it has been in the past, i think that is the highest degree of uncertainty, that long-term run rate, that we just don't know. tom: i think it is a really important point. determine a rate is a massive -- the terminal rate is a massive guessing game right now. this week's data may allow people to judge a better terminal rate. jonathan: you used the g word, and i think it is so important. guessing. let's talk about where the chair of the federal reserve was at the back of plenty 18, guessing. he was talking about maybe, probably, we are far away from neutral. market started screaming in december. they backed away. the chairman last week said they could hike interest rates may be a fair bit without threatening the labor market. we will see. as for the labor market this coming friday, we mentioned the bank of america call. they are looking for

construction on payrolls. macron induced, negative wonder $50,000 -- -$150,000. bank of america still safer steam ahead, but we will see. -- still say for steam ahead, but we will see. let's say good morning to a very busy lady. good morning, kailey. kailey: good morning. we are all busy here. potentially some deal action for citrix, about to be bought by slightly below where it closed on friday. it is trading down about 3.25 percent. also moving to the downside is robinhood. this stock hit a record low last week. then cathie wood came in to buy a couple million shares. not a lot of people apparently joining in that before the bell. one mover higher is spotify. i am sure you have been paying attention to the saga over the

last week or so. a lot of concern about joe rogan's podcast, very popular, not the most accurate when it comes to covid-19 vaccine information. joe rogan apologizing, saying he will try to do better research. that stock up about 120% after wiping $4 billion worth its market cap last week. there's also a number of stocks moving higher on analyst recommendations, one being tesla , getting upgraded with a $1025 price target at credit suisse. dan leavy saying he's hard-pressed to find another stock that checks as many boxes as tesla does. it is up 1.4 percent. netflix getting upgraded at citi. subscriber growth may be slowing, but pricing power is going to be important. it is up 2.6%. you also have in vista getting upgraded at morgan stanley, so it is higher to the tune of 1.4%. tom: ed l husseini -- ed l husseini joins us from columbia

threadneedle. what do we get if we get growth slowdown? ed: that is an interesting conversation what we get if growth slows and what markets do at the conversation of growth slowdown and continuing to tighten. we will know when we are approaching neutral when we have that widening and credit spreads. we may be at the early stages of that right now. tom: we are in the early stage of gaming the fed. i'm fascinated how you put it into play within the fixed income market. you talk about credit spreads widening. how do you actually play that to protect capital? ed: particularly in the treasury's market, we look for carry. at the moment, the carry opportunity is in the front end,

so the belly of the curve are quite attractive. the risk is that the fed accelerates the base for tightening. once you get to the three to five year segment, the carry gives you enough cushion for an event where the fed starts to slow and potentially under shoot the price. i think that is the sweet spot for me at the moment, the belly of the treasury curve. lisa: you were talking earlier about credit spreads. i want to go there because typically people look at that as a leading indicator for risk off sentiment, although we have seen equities really selloff. credit spreads have been pretty tame. you seeing them increase a bit. have they lost their ability to be a forecasting agent? ed: no, i think credit spreads in aggregate remain the best indicators of financial sentiment. the fed at the marmon -- at the moment is targeting an important force multiplier for with the fed will do with the fed funds rate in the course of the next 12 to 18 months. the fed needs those credit

spreads to widen. the fact that they have done very little in the course of this month, they have moved, but relatively modestly, really reflect the fact that fundamentals are very good. corporate fundamentals are exceptionally strong going into this year, so the fed is going to have to fight those fundamentals in the course of the year. i think it is too early to write off credits present as an test credit spreads as an indicator -- credit spreads as an indicator of what is going on the market. lisa: could they see more spread widening because of the revaluation you are seeing in the high-value stocks? it is the scene kind of discussion you are seeing and bonds. ed: it is this combination of where the specific point. the fund mental's are good. they are cash rich. the leverage has gone up. the cost of servicing that debt is exceptionally low at the moment. so we have that exceptionally good backdrop.

we also the good backdrop in terms of the consumer. what we are starting to run into is the fed starting to move and the fed tightening financial conditions, and growth starting to slow organically. the handoff from q4 to q1. q4 growth with a 6% handle mckee one tracking about 0%. that organic growth slowdown should start to see -- should start to show up in wider credit spreads, rigidly slow -- relatively slow at the beginning. jonathan: your first comment, i made some notes. credit will let you know when nutro is. we may be in the beginning stages of that now. the fed has not done anything yet. so i'm just wondering, if we are in the beginning stages of now, how high can they go? ed: this is the big debate. this is the disconnect. the yield curve is telling us that the amount of space that the fed has to maneuver is

relatively limited. they can go five to 6, 150 basis points or so. that will likely start to invert the curve unless we get some surprises on the fiscal front. at the moment, fiscal policy is moving in the other direction. the amount of space the fed has is quite limited. i think credit will catch up to that by the end of the year. jonathan: if it is slowly, then quickly, then all of one -- then all at once, is this a sit in cash and wait? ed: that is a really difficult question. if you look at certain segments of credit, there are quality issues. i think the stress of underlying corporate balance sheets provides a's buffer going into this environment, so it is quite different versus 2018 and 2017. at the same time, we should start to see in aggregate wider credit spreads.

what you are planning for is how much protection you have in terms of a carry, particularly in higher-yielding segments of credit, versus how scared are you of the fed accelerating the pace of tightening over and above 150 base -- 150 basis points this year. that is the balance of the mound. -- balance at the moment. jonathan: interesting stuff at the moment. can you imagine that this process might already be beginning, and yet the fed has not even had liftoff yet? lisa: it is all in expectations. physically, you have seen a repricing in stocks, but you have not seen wholesale repricing and credit you do seen some repricing, but not too quite the same extent. what ed was saying was that you will see it as the fed takes action. so do people get ahead of it? i think you asked the right question. why not get ahead of it if you really believe that? jonathan: of course it is based on expectations, but this is why

, often and frequently over the last 10 years, the more this market prices and of the fed, the less the fed can actually deliver. you see it time and time again. the forecast on the street above and beyond what the fed ended up delivering. tom: it is an overlay of it is time to visit off of the pandemic, but also the natural disaster that is this pandemic. what do we do if we get a constructive overlay of omicron on all of this gloom about higher rates? i don't think anybody has a clue. i certainly don't. jonathan: you will catch up with a senior u.s. economist at morgan stanley. they are baking and four for 2022, and perhaps more. get 0.5% this morning. good morning to you all. this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. the united nations security council will debate the issue

today and depending on says moscow has increased the number of troops that have been deployed along the ukrainian border. russia's president vladimir putin says he has no plans to launch an invasion. atlanta fed president rafael bostick says the central bank could do a half-point interest rate hike in march if needed to fight inflation. in an interview with "the financial times, bostick -- "the financial times," bostick stuck to his protection. the bank among them will give a big clue about how far and fast it will move in fighting inflation. according to a bloomberg survey of economists, they will raise and just rates to 0.5%, completing the first back-to-back increases since 2004, and raise they question of whether more will follow. star podcaster joe rogan has

pledged more balance and better research for his shows, seeing as neil young and joni mitchell pulled their bees are from spotify last week. they protested rogan, who has had houtz spoken that who has had outspoken critics against the vaccine. the shift to working at home has spurred blue-collar americans to seek a career change. a new study by the oliver wyman forum found the desire for more work flux ability was a key motivation, and said almost four out of five who tried were successful. 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. ♪ ♪

>> $100 is certainly within the realm of what we could see in

the next few months. longer-term, we think markets rebalance and prices will moderate. jonathan: what a month for crude. mike wirth their comedy chevron ceo. alongside tom keene and lisa abramowicz, i'm jonathan ferro. your equity market slightly negative on the s&p, slightly positive on the nasdaq. yields are higher by two or three basis points on tens by 1.7963%, up a little bit on the day. on the year, your to date, an unbelievable move come up by almost 50 basis points on twos as we start to race to pricing a fed hike this year. tom: we talk about the difference and you'll between the 10 year and the two-year, so-called twos-tens spread. in the oil market, the vanilla spread is those two visible giants. brent crude, the global price of west texas intermediate, always a difference to craig -- to kriti gupta.

kailey: we are --kriti: we are getting very close to that level, which is crucial. the spread between wti and brent, this is significant. you have not seen this kind of drop in a while, at least in the last year. a lot of this has to do with the russian risk, pricing and that geopolitical premium that is so crucial. the idea that not only could you start to see an actual invasion from russia, the odds really ramping up for that, but also potential sanctions even without that rough invasion. at least, that is what is going through congress. that is what is getting priced in in particular. you mentioned the crucial level. bob mizuho -- bob michele at mizuho securities points out it is too cheap for international refiners to ignore. international were finals -- international refiners by u.s. oil instead of u.s. oil buying

international, and it ends up upsetting that trade balance. tom: we go to the perspective of javier blas of bloomberg opinion on the dynamics of oil. i did in the extrapolation of oil today, and we had $100 by fibroid 22nd. -- $100 by february 22. why is it going up? javier: demand seems to be much stronger than we would have expected. it certainly has priced into the upside. omicron has very little impact on demand. the consumption numbers, we are beginning to upgrade those numbers higher. the market simply needs more oil from opec, and opec's increasing production on very little increments, and actually failing to deliver the increases that they promise. everyone is saying this is going to add around $400,000 a barrel

--400,000 barrels a day. the market is moving to whatever it is, and that is going to be the u.s. shale path. tom: can russia affect the price of brent crude? javier: it can certainly affect the price of oil. it is one of the largest exporters, only behind saudi arabia and the united states, and of russia was 2 -- it could make the oil market tighter than it is today. i don't think russia is going to go that route, but what we have seen is that russia is already struggling with increases in oil production. it is failing to increase is much as we would expect, and that is because russian oil companies are reaching to the limit of what they can do in the short term. lisa: we saw gas demand has declined in europe, or has not

risen as much as people expected, because there's signs of demand destruction as a result of the price. how much will this actually help correct prices? javier: it will help, but prices helping are reducing the demand. they demand we have seen in europe, stu a lot of the population prefer to use their cars rather than public transportation because of fears over covid. that is enough to impact prices over demand. i will give you a number, for example, from my home country of spain. in november we saw the best consumption for that month in 11 years. that is a sign that consumers are not using public transportation and it is the private bubble of safety or security. lisa: how much are we seeing marginal suppliers start to pick up the pace, thinking in particular of the shale patch?

javier: we are beginning to see an increase in shale production is going to increase significantly this year. it is not going to be back to the days of drill baby drill, but the supply is there for u.s. producers to increase production. recently, one of the consultants in america, as you say, the price is not for shale producers to pump more. it is a crime for shale producers to increase production, and they are responding. jonathan: the last time we were here when prices were this high, and month later the saudis started a market share war. what has changed in the eight years since then? why is this moment perhaps different from the moment back in 2014? javier: one thing that has change significantly as we have a lot less investment in the industry. every investor has moved out of oil, and that means the big oil

companies are not as willing to invest as they were in the past. this is a rally that has been driven by strong demand, but on the background, there is a lack of additional supply. whether that changes with $90, $100, is debated in wall street. the big change is that the market supply response is not as quick and effective as it was a few years ago. jonathan: fantastic, as always. it is good to hear from you. eight years and a lot of change. a lot has changed in eight years. tom: but also i would note, we are seeing a lot of other commodities move up. coal is basically at a record high on usage. it is a misjudge of demand given the challenges of a tangible, ever-changing future.

lisa: we are -- jonathan: we are talking about a similar story. ultimately, the lack of incentive for people to put money back into the ground and to pump. tom: what are we going to do, go after big oil when we hit $100 a barrel? if we hit 91 dollar seven cents on brent crude, if we go up nine dollars, does the dialogue change? jonathan: we have been going after oil for much of the last eight years, and that has intensified. lisa: this really talks about the gap between trying to get to a green transition and the fossil fuel's that fuel our world. one commodity i have been watching is aluminum, it has had an incredible rally and it is because partly the cost to get it out of the ground is increasing on the heels of the higher fossil fuel costs. jonathan: i am happy to call it aluminum. lisa: i don't know if i'm happy

to say it aluminium. jonathan: 5:30 local time, you will hear from the prime minister, 10:30 eastern time. tom: the world will stop for that. jonathan: i have no doubt about it. from new york, this is bloomberg. ♪ ♪

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♪ >> i like to say the fed specializes in crowd control. they are coming undone and being compromised by inflation. >> inflation at a 7% handle is just not except about. -- not acceptable. >> i do see chairman powell wrestling with inflation as you see much higher volatility. >> it is not going to be a year of a rising tide lifting all boats. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. a monday