>> believe the fed -- hopefully the fed gets this right. i think the chances of that are fairly low. >> people are going to get a little bit nervous about strong data because obviously the big fear is the fed is going to be more aggressive. >> even with more fortified rate hikes, the economy should be able to strong through. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: hello, february. from new york city, for our audience worldwide, this is "bloomberg surveillance," live on tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. your equity market down 0.25 percent on the s&p, leaving behind an ugly january. tom: really interesting. step away from it. when you are in triple leveraged all-cash, you can do that. i'm sorry, the recovery the last couple of days was pretty good.

it was the way the nasdaq took the rebound, not even halfway back. i understand there was real carnage, but the vix this morning, 25.02. we were at 32 a cup of coffee ago. jonathan: that drawdown could have been so much worse. that was the move that closed out the month. you are still laser focused on the earnings. ups front and center this morning. tom: i think it is huge, bigger than the microsoft announcement the other day. we've got apple coming up against amazon on thursday. but fedex and ups are the backbone of the nation. everyone looks at them. it is like john deere was 40 years ago. everyone is focused on logistics, and it is a bang up set of announcements from ups. jonathan: in the premarket, up almost 7%. lisa: we get alphabet after the close, tomorrow facebook, and thursday we've got amazon. i just keep thinking, rarefied

air. that is where we are at. how good do earnings have to be to justify valuations, especially if you start factoring in higher benchmark yields? jonathan: and on the yields come on the fed, leaser hornby -- lisa hornby, hopefully the fed gets this right. the chances of that are fairly low. what is a soft landing? lisa: a soft landing is the economy returns to a more sustainable pace of inflation and growth. 3% inflation, 2.5 percent inflation, 2.5% yields may be. the chances of orchestrating that without some sort of big downturn is what a lot of people are very concerned about. jonathan: on the nasdaq, we are down 0.2 percent. tons to get through this morning. yields in three basis points on tens. well off the highs of the year on tens, and on twos we pull back as well. in the fx market, euro-dollar

firma by 0.3% going into the ecb thursday. crude backing off a bit, down 0.5% at $87.77. lisa: still looking at some of the highest oil prices going back to 2014. how does that factor into the inflationary backdrop that fed officials? ? are grappling with and about 90 minute -- that fed officials are grappling with? it about 90 minutes we speak with patrick harker, philadelphia fed president. we've heard this is maybe not necessarily as predictive as it has been in the past, that basically this is a muddied indicator. however, a lot of people are thinking otherwise as we see the flattest yield curve going back to late 2020. at 10:00 a.m., a slew of economic data, including the job openings information from the month of december. how much does this show the decline in openings as a result of omicron?

how do we factor that in as a temporary blip in a year of temporary blips? we are getting manufacturing pmi's for them of the january. again, how much do we see that decline as a result of omicron, and how much does this indicate a bit of a slowdown after the huge surge in physical goods people bought last year? aftermarket, alphabet reporting earnings. they are down a little more than 6% year to date. you have seen a similar drawdown for facebook, down 6.9%. they report tomorrow. amazon reporting thursday, down more than 10%. they are the standard for what happens when people are demanding more in wages. how much is wage pressure going to be a key issue for this earnings season, and frankly for some of the more people intensive tech companies? jonathan: i am pleased you brought that up. last year that stock did nothing. lisa: and basically, this year the question is how do they gain that momentum at a time when those wage pressures are only

accelerating. jonathan: the earnings coming out through this morning, a boost to the dividend that ups, a cut to the dividend at at&t. what do you see? tom: at&t is a really nuanced story here. on a cash basis, you look at the cash amount of dividend paid. at&t now at $15 billion. people were modeling $9 billion. they say after this transaction, they will be at $8 billion. evidence matter. this is the distinction between dividends and share buybacks. dividends are like gospel, like a really serious thing, and boards have trepidation in lowering the dividend. telephone dealing with that now. jonathan: we have seed not in london -- we have seen that in london repeatedly. going is now, troy gatzke, chief market strategist at -- troy gayeski, chief market strategist at fs investments.

why is it looking doubtful? troy: so far this year, the good news is markets have been aggressively repricing future tighter monetary supply and fed policy, but the bad news is that the fed really hasn't done anything yet. they have only reduced their bond purchases from $120 billion to $100 billion in january, which is still a pretty epic level of liquidity injection, and yet here we are fighting multiple compression. when you think about the technical damage that was done and the fact that investors across the board are really ratcheting up the potential and the magnitude of fed hikes, and behind that you have balance sheet drainage, it just looks like blasting through the highs in early december for the nasdaq is a much lower probability proposition then if you ask me the first week of january. lisa: you have been such a big proponent of bitcoin as a hedge

against some of the inflation. you have seen it absolutely destroyed this year. how are you thinking around that, given your allocation? troy: when you think of crypto or bitcoin, it is really a hedge rather than week to week market price action. when using about the market environment today versus six or 12 months ago, has money supply growth slows, you have more upside and less downside, and you are fairly late in the cycle, so those are the two negatives in the short to medium-term. in positive side of the ledger, you still have continued adoption, so just like equity markets are going to be push and pull between a stronger economy, stronger earnings, and multiple compression, and the crypto space is it a push and pull between late cycle money supply growth and gradual adoption, not only in the u.s., but globally. clearly this year will be much choppy are for crypto than last

year or the year before. there's no doubt about it. tom: you make an allusion back to 2018 as well. what was the struggle of 2018 is how few did well. the answer here is about profitability. explain the power of profitability this year. troy: if you look back to 2018, the reason we use that as our base case is a very similar environment. you did not have the inflationary pressure at that time, but you had relatively robust economic growth and 22% earnings growth that year, obviously driven in part by tax reforms. a very strong year for the economy, for corporate fundamentals, yet 90% of investable assets were down because the fed was not only hiking rates, but also draining their balance sheet. fast forward to today, you should get better economic growth somewhere around 10% with a little bit of upside surprise, yet here we go again, multiple compression is tied to higher

rates and the potential for more aggressive balance sheet tightening or reduction. when you look at history of the markets, most years you end up with better market outcomes than economic outcomes, and in years where you have much worse outcomes, that is really driven by the fed tightening, whether it is 1994, you go back to 2017 or 2018, that is always the explanatory variable. it'll back at 2018, equities were down 4% and change. it was not a disaster. that is kind of our base case for this year, where it will be a gradual bleed in multiples offset by stronger economic fundamentals, but fortunately, the risk to recession is exceedingly low, and four or five fed hikes is not going to change the stricter he of the economy meaningfully. jonathan: always wonderful to catch up with you. great to see you. we have all seen those charts.

you have seen the charts of the forecast for the 10 year yield 12 months out and the actual 10 year yield that gets nowhere near it. have you seen those charts for the fed funds rate as well? the lines are somewhere up there and the actual fed funds rate is really shallow, and just dives underneath with no problem at all. we have been conditioned by that. every single day, just out on twitter, gauging what people think about things, you put out those forecasts for the federal reserve rate hikes this year, from bank of america at 7% down to barclays at 3%, you get a series of replies, you write. try zero. we have been so conditioned by the last 10 years that the fed under delivers. it does not overdeliver. that is where surprises can come from. lisa: i could not agree more. some people are saying wait for the real reaction in equities when you start to see the action and not just the talk because he's to have the likes of peter tchir saying they are just jawboning the market. if that is the case, if they

follow through, it could be the catalyst for something more significant. jonathan: i heard from greg staples yesterday, he doesn't buy it either. he does not by the shift. tom: to the theory, i just flat out don't agree. i think there was a natural disaster called a pandemic, and may in honor of bill dudley, there's a center tendency to higher inflation, but all of the surprise here could be to the downside if and only when goods inflation rolls over and normalizes. jonathan: futures down 0.2 percent. we will continue the conversation. nasdaq futures down about 0.1 percent. yields in three basis points at 1.7430 percent on tends. on tv and radio, this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta.

more high-level talks on ukraine set for today. u.s. secretary of state antony blinken will speak by phone with his russian counterpart sergei lavrov. russia said it has yet to respond to written proposals on how to de-escalate tensions. meanwhile, the u.s. and u.k. are preparing economic sanctions for russian elites and their family members if moscow invade ukraine. kim jong-un has blasted his way onto president biden's foreign policy agenda. in january, north korea's leader conducted more muscle tests then he did and all of last year. that is seen as a signal that kim is preparing to fire a long-range missile that could reach across the u.s. north korea wants the u.s. to lift sanctions whilst the u.s. once an end to know if korea's nuclear program. federal reserve officials showing little stomach for an aggressive 50 basis point rate hike next month. they say they want to avoid disrupting the u.s. economy. four of them made remarks on monday. kansas city fed president esther

george said, "you always want to go gradually in this economy." blackstone and carlisle are in talks for what could be one of the biggest buy out deals ever. bloomberg has learned the private equity firms are considering a bid for the generics unit at swiss drugmaker novartis that could be valued at around $25 billion. ups benefited from higher prices and rising holiday deliveries to post profit that beat estimates. a package carrier also came out with an outlook for this year that was better than expected. ups boosted its quarterly dividend by 49%. 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. ♪

♪ >> we are living in very unique times. this is unlike anything any white house is experienced before. well, maybe 100 years ago. we will continue to follow the president as he continues to put plans out there for moving our economy forward. jonathan: labor secretary marty walsh ahead of payrolls. your equity market softer, -0.3%. yields in three basis points on tends, 1.7430 -- on tens,

1.7430. euro-dollar, 1.1268. the range of estimates is pretty wide. 150,000 is the median estimate. just working through some of the estimates out there, nomura pops out, looking for negative 50,000 this friday, but still calling for a chunky move in march from the federal reserve of about 50 basis points. there you go. for a lot of people, this does not make a difference. tom: i don't have any brilliance here. i get the omicron thing on the jobs report and all. i believe we have bill dudley scheduled later, which will be really important. your good friend marty walsh, the former mayor of boston, i ran into the secretary of labor day, and we had a private conversation, and i have to keep this private area he swore me to secrecy. but the former mayor of boston was heated about roger clemens

and mr. ortiz in the hall of fame. we are going to have to leave it there. but this is a guy attuned to the people of new england. jonathan: to be clear, did you talk about the labor market at all? tom: no i did not. [laughter] jonathan: just on baseball. tom: i talked to the gentleman from dorchester about ortiz and a guy that pitched momentarily for the yankees. jonathan: any thoughts about a may be making a run towards the governor? tom: no. who cares? we always treasure his comments with jon ferro after the jobs report. maybe we will see that on friday. emily wilkins with us right now of bloomberg government, and of course, the jobs report is front and center. give us the political angst right now as people return. what is the new sweat of democrats and republicans in washington? emily: for democrats, this week

is going to be all about the u.s. competitiveness bill that has a number of provisions that directly target china and beijing. this is a huge relief. they are facing tough elections in 2022. they need something concrete to take back to voters beyond the infrastructure done last year, and this is a way to get back on track. it is not joe biden's build back better, but it is a way they can say they are addressing concerns about the supply chain, potentially inflation, showing that the u.s. is strong on international issues. the question is we know the house is on track to pass legislation this week. from there they are going to have to meet up with senate colleagues and get together to try to figure out a path forward on the two different bills that have been passed, and i think that is the big question. are you going to see them come to an agreement? are republicans going to let democrats give a win to president biden?

tom: we do this differently than others. jon ferro has made clear the british model is superior. when they meet, what is it actually like? they go into a room, house and senate leadership, and argue to compromise on the two bills. how does it actually work? emily: usually lawmakers are selected get you want people who know the issues, who have been working on the legislation. they get together, a lot like other negotiations on legislation where you've got different people in different rooms hashing through things, ordering takeout. a reporter >> to see that. that means it is going to be a long night. it is something they want to get done. it is not a formal deadline, but one thing to keep in mind is march 1, the day that biden will be going to congress to give that state of the union address. progressives have said they want movement on build back better by then. that does not look likely, but certainly they want to give biden something to tout when he

gives this national address. lisa: jon was talking about the range of job estimates for this friday, and this could potentially be the first negative rent of president biden's term. how do the democrats frame this at a time when they both want to pass this legislation, but also want to tout the economy that continues to strengthen? emily: i think about how the democrats have been talking about things like inflation. they knowledge it has been an issue, but will say joe's americans are still struggling and that the government still has a role to play in helping them through the pandemic. everyone knows how to spin in this town. i'm sure we will see it in a way that benefits the president agenda. but i think at this point, it is interesting to note that at least in regards to jobs numbers and where unemployment stands, those have been things democrats have really hung onto as potential bright spots and said

things that biden is doing are working out, even while we do see inflation continue to be high and continue to see supply chain backlogs. jonathan: emily, thank you. david rosenberg out on twitter, "the chairman repeatedly went back to 2015 in the last news conference. the last time we sorted a rate hiking cycle, the economy was not a strong. the economy is stronger than it was then on several fronts. "this claim from the fed on how great the economy is doing compared to late 2015 is nutty. what would things look like today absent an 11% deficit to gdp ratio and a $9 trillion fed balance sheet, twice the size back then?" that is the claim from david rosenberg. tom: it is the other side of the coin. we are going to have no dudley on, who is clearly in a different position.

oh, dudley we do not have today. thank you for telling me that, amy. got two sides of the argument, and we are going to bring that to you through the entire week. blanchflower, rosenberg, others. they don't buy it. jonathan: we will catch up with patrick harker. i've got to ask and how useful the payrolls report will be for him on friday, how useful will it be when so many people are choosing to look right through it. lisa: and frankly, when inflation is their primary mandate, it sounds like they are buying into the story that is a very heated labor market. i do find it interesting, disco and back to the david riesenberg -- just going back to the david rosenberg place, do they feel like they are in a better place than they were? jonathan: consumer sentiment i think speaks loudly on that. my favorite tom keene line of the morning, "i'm not going to

share what he told me. it was a private conversation. but this is what he said." there's a reason that matt winkler years ago tried to ban the word but'with bloomberg staff. -- the word "but" with bloomberg staff. g staff.

jonathan: leaving behind dors months for the s&p 500 going all the way back to spring 2020 -- the worst month with the s&p 500 going all the way back to spring 2020. the follow-through today, just a little bit positive as we kick off the month of february, up 0.1% on the nasdaq 100. losses on the s&p, -0.14%. the surprise for me and others, banks barely eked out a gain. to your yields get your attention, up more than 40 basis points year to date. they back away from the 1.20% level. 1.1421 sue -- 1.1412%.

closed out 2021 at 77 basis points. popped through $90 as we got some steepening earlier in the month. and the flattening came through, just like that. to you yields started to begin more rate hikes, started to think about the prospect that could hurt growth down the road. goldman out with that gdp cut, and you do wonder how many other banks on wall street follow their act. tom: sell side economics has to adjust. jonathan: we just on the treasury market in europe too. what is important about this line in the sand, -50 basis points at the front end of the german curve, what is important about trading just above that level, that is the first time we have traded inside the depot rate at the ecb since 2015. the first time really since qe

really kicked off at the european central bank. it has been a long time. so what are we thinking about in markets at the moment? the bar is up here for the federal reserve. where's the bar for the ecb? perhaps they deliver one at the back end of this year. so where is the scope for surprise, and what does it mean for the fx market in the back half of this year? that is what we are wrestling with in foreign-exchange as the euro pops back to a 1.1 to handle. -- 81.12 handle -- a 1.12 handle. tom: people are adjusting in real time. how does europe adjust to that inflation? how does christine lagarde adjust? jonathan: president lagarde, the ecb meeting this thursday. that is the cross asset price action. let's get you something will names and say good morning to romaine. romaine: exxon mobil crossing

the wire right now. 85 billion dollars in revenue. that is a beat on the top and bottom line numbers. we were talking about the best score they have had going back in about eight years. baked into this is a little bit of caution. you could see some hold up with regards to diesel demand, gasoline demand. it says jet fuel demand to track a little lower than what the previously anticipated, and there are a lot of cost cuts baked in this report. we did get that report yesterday about them moving one of their offices out of houston to another location in texas. they also talk about a reorganization of some units here. keep an eye on on mobile. those shares slightly higher on the day by about 1% in the premarket. we had ubs earnings a little earlier. shares higher by about 7%. cost issues a big will there -- a big deal there. the good news is they were able to raise prices to offset some of that. at&t finally providing details of that spin off of warner media. shares down about 3%, partially

because that dividend is going to go down pretty sick of it in late. a soft recall over at tesla, having to do with a rolling stop feature. this is going to be basically and over the air type of recall on the software itself. the share is higher by about 0.3%. after the bell we got a slew of earnings we are going to be keeping an eye on, including amd, starbucks. those shares higher in the premarket. also getting paypal, general motors, and a few others. tom: lots of good earnings analysis. no one fixed income, the vix to 24.78, we look at bonds as well. ian lyngen with us, bmo head of u.s. rates strategy. did you get out from under the desk in january? ian: i did spend a fair amount of time under the desk in the month of january. art of it was the massive repricing that occurred in the very front end of the curve, as

we all really recalibrated to a fed that has truly delivered on a hawkish pivot, and frankly, this is one of those moments where there is so much uncertainty that we don't even know what we don't know in terms of what the fed is going to be looking at come the middle of this year. a lot of moving parts right now. tom: in the equity market we parse bull and bear market. in the bond market, are you preparing for a bear market, which is price down, yield up? ian: i will argue the opposite. we just got a full pricing in of what i will characterize as a result julie -- as a relatively pedestrian hiking cycle, for five hikes this year, a few more next year, balance sheet runoff, and look at 10 year yields. we are hovering around 1.75%. all of the action is playing out in twos, threes, and fives.

i think the moment for a truly bear market in treasuries has passed because, as has been pointed out, the market is worried about what happens if the fed goes too quickly. are we going to see gdp figures revised lower, expectations lower throughout the course of this year? that follows pretty intuitively, given what the fed is doing. lisa: how much does the flattening in the yield curve derived from the fact that the fed has not outlined their balance sheet reduction plan, and when you start to do that, you will see longer term rates move up, which some people, the likes of bill dudley, expect to happen? ian: i would say that this notion of a pedestrian tightening cycle that i outlined involves balance sheet runoff organically that does not include outright selling into the treasury market. that would be a surprise factor. we don't think that is going to happen, but in the event that that does occur, that is where

you get 10 and 30 year yield materially higher, at least on the initial announcement. the other way we get there is if we get more inflation in the system than we are already expecting and we are met with a fed that is not as responsive as it has been. if we get higher than expected inflation over the course of the next three or four months and the fed ratchets up rate hike guidance, so we get to 6, 7, 8 this year, i think that is where you get more massive flattened or -- a more massive flattener. but there is a case for a bear steepener in tens and 30's. if we got to the point where the fed delivered seven rate hikes in 2022, 10 year yields are not

going to keep pace with that. we are already starting to see breakevens compress. we are already starting to see fives-30's as flat as 32 basis points. we should get to flat or inverted over the course of that process. that begs the question of if the fed would stop because of that. tom: part of the lyngen n erd-fest is you do the mass, you do the bond stuff, but you are a student of the history of this. how does any central bank raise rates into a slowing economy? ian: they are supposed to do it very gradually because they are attempting to engineer a soft landing, but if we think historically, central banks have a very bad track record of doing that effectively. what makes this particular cycle different somewhat is that we have already seen a lot of realized inflation in the system. the market is trading off of

typical late psychodynamics, and for the fed to hike to the point that it shortens the recovery, it is not a policy era. it is a policy trade-off because the fed wants to hold on to its credibility as an inflation fighter. i think that is going to be this year's story. jonathan: ian lyngen there of bmo capital markets. a policy trade-off for this federal reserve in 2022. lisa: how much is too much, and how much is the yield curve indicative of what is going on? that is kind of shocking, ian lyngen saying if they go seven times, it would definitely invert the yield curve. would they care? jonathan: standard chartered, we think the curve could be flattened and potentially inverted by year-end, the work of steve englander and the team. tom: standard chartered with the reputation of emerging-market

frontier economies, southeast asia. their intellectual staff led by mr. englander is first rate global wall street. jonathan: "we think belong and will draw comfort that inflation has peaked and increasingly question the resilience of the growth outlook." we have quickly transitioned here. i've gone through the median estimate repeatedly. it is very close to 4%. then people start to question growth off the back of the policy response at the federal reserve, responding to that high inflation. oldman first. who is going to follow? lisa: there's also a question of how much policy makers will move away from supporting the markets. looking at real yields going back into the negative territory, people take a look and say that demand is just going to intensify if you start to get growth concerns. so how do we get out of this to positive real rates like many people are expecting and some of the more bearish calls? jonathan: exxon sees wider

margins with breakevens at $41 a barrel, sadistic about the breakeven of $41 and the price on the screen right now, just south of $88. exxon, the biggest profit since 2014. tom: i have real trouble with this. for years, a financial company that happened to do oil. i am an oil expert on this. i will leave it to javier blas, will kennedy, and our world-class team. they are moving from dallas to houston to save $6 billion. they got a 10 year annual return of under 3% per year. it has been great, but they are in catch-up mode. jonathan: the stock is up in the premarket, up 24% and some year to date. what a move off the back of what has happened with crude. energy equity is where the outperformance was in a massive way on the s&p. your s&p down 0.1%, leaving behind the biggest monthly drop going back to march 2020, down

5% on the year. this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. in the u.k., prime minister boris johnson is again under fire from members of his own conservative already. a report into partying in downing street during lockdowns slammed failures of leadership at the top of johnson's government. johnson promised conservatives he will get back on track, but many are not convinced he can turn things around. while, police are still conducting their own investigation. winter olympics may be more of a drag on beijing's regional economy than a boost. covid flareups and pollution curbs are weighing on consumer and industrial activity. a ban on public pix pickers -- public spectators means there won't be the usual bump in tourism the city hopes to gain by hosting the games. the ceo of ubs says geopolitics is the bigger fear for him and not inflation. he spoke with bloomberg after

the swiss bank reported better-than-expected earnings and gave an upbeat outlook. >> everybody is>> making their own analysis for inflation, but you can work with that. geopolitical tension and the potential events coming from it, that is more difficult. ritika: ubs pledged to buy back about $5 billion of shares this year. 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. ♪

>> when you have companies like apple and you can pick any other

name within that large cap tech universe, they have come under pressure, but maybe for the wrong reason because these are not companies where you're looking at discounting cash flow in 10 years, as we saw last week . they are generating terminus cash flow in real time -- generating tremendous cash flow in real time. jonathan: great lineup of guests this week. alongside tom keene and lisa abramowicz, i'm jonathan ferro. your equity market positive on the nasdaq, negative on the s&p, negative on both for the year so far. on the s&p, down zero point 1%. on the nasdaq, up a little more than 0.1%. yields into 1.7465%. the artwork that comes from some of these audience members is just remarkable. tk nails it again. stock market traders down 3%. crypto traders down 40%. and there he is, looking comfortable. i think that is a shot from

about 2005. triple leveraged all-cash, sitting pretty and happy. tom: that hat is history. kennel fee chewed it to shreds. we all know the triple leveraged cash fund is a joke, and that has to go back to enhanced bond products of 20 years ago, but as we had ben laidler on, i think it is important to understand, taken a one month's perspective, it is hazardous to your health. jonathan: as high as they are in some places, he thinks it is justified because profitability has been that good and the runway for growth is decent. tom: i have beenwading -- i have been wading through 20, 30 pages on apple, going out for years, five years. the perspective on alphabet is simple.

google is up when 4% per year for the last x number of years, and the free cash flow is an active growth. kriti: we really want to talk about the earnings picture, which brings me to my chart of the day. on a logarithmic scale, we looked at the value of alphabet, and just look at the regression on it in your basis. it is a straight line up. this is really interesting. plenty of companies make money. plenty of tech companies have a chart that looks like this. but have about actual -- but i will bet actually has a -- but alphabet actually has a far more cyclical exposure. add in the cloud picture, the idea that this technology has been around for ages, but they are just now, corporations are now adopting it from a wider perspective simply because of the work from home era, and that

is playing into alphabets bottom line. tom: the "bloomberg surveillance " summary of the cloud, which i still don't understand, is there's tons of growth available . i don't know if they are in the second inning or the fourth inning. what does that mean for amazon, google, and the rest of them? kriti: on a revenue basis, it does not make up that much of the revenue yet because it is going to. this technology has been around for ages, but no one has been adopting it until recently, until the pandemic, when you start to see a lot of these corporations really invest. alphabet, about 8% of their revenue comes from their cloud business in particular. put that into perspective from amazon, which we will be hearing later in the week. about 14.5% of their revenue comes from the cloud. put that into perspective with what we heard from microsoft last week and their asia

business. that makes up about 35% of their total revenue. it is not making up the majority of their gains, but the idea, and i think dan ives of wedbush was spot on on this, he was saying this is going to be the focus. you can talk about cash, but cloud is really where it is at. lisa: i am looking at microsoft returns because microsoft reported incredible earnings, and their shares are down 7.5% year to date. it was not enough to materially claw back some of the losses we have seen. the good news has been baked denver so many of the tech names. how much do we count that in terms of how hi there earnings bar is? -- how high the earnings bar is? kriti: you have alphabet, meta-platforms, and amazon far more exposed to what is going on with the consumer picture, as

opposed to apple and microsoft, which have far more pricing power. that is something that support the idea that perhaps those gains are priced in. pierpoint, apple and microsoft, even with that kind of expectation they were going to have some pretty strong earnings , coming out even more on top of that and still seeing the stock rally, that is really good news for apple and micro soft. whether that continues onto apple, amazon, and meta-platforms, apple actually has a history of becoming a leading indicator for that consumer spending picture in the united states. we all know that consumer spending picture is really what is under threat. lisa: we hear tech analysts talk about fundamentals, but how much are all wall street tech analysts now rate traders? kriti: a good chunk of them. when we were looking at the positive correlation between big tech and the 10 year yield, people ask me, why are you

seeing this correlation positive when you continue to have big tech continue to rally, but yields continue to drop directionally on a longer-term basis. the reason for that is simply because on an intraday basis, they move together. tech higher, yields lower, but on a longer-term basis, the margin of the move is what is significant because on the upside, tech tends to have a much larger move to the upside. take out the last couple of weeks where you have had all that selling pressure. on the downside, yields tend to move far more when you see that bit into treasuries. because you see that dynamic where you see tech higher on one side, yields lower on the other side, that is creating that divergent for the long-term. jonathan: thank you. what are you asking for here, lisa? for dan ives to have his fed rate hike guesses at the bottom of the release? lisa: this is what you've got to do. how much do fundament of matter? jonathan: given what is

happening right now, can we talk about fundamentals exclusively? can we just talk about what is happening in the rates market? it is where the conversation has gone to. lisa: how much does the bar get higher and higher? we were talking to ben laidler, and he was saying every 50 basis point move apps up the bar in terms of where earnings have to come in. at what point is it an earnings story? jonathan: amc entertainment, fourth quarter revenue about $1.17 billion. the estimate was $1.09 billion. that is a beat. keep up with this one, tom. in the premarket, up more than 12%. tom: variety feature to this. i don't know what the big movie was recently, but is it a return of movies, or was that a one-off? jonathan: lisa, your thoughts? lisa: honestly, they have to

figure out the new experience. jonathan: that single name is about more than the return to movies, that is for sure. amc up by 14%. lisa: reddit, is that the imprecation here? jonathan: in some ways, and a whole lot more. lisa levine of bny mellon -- alicia levine of bny mellon. from new york, this is bloomberg. ♪ ♪

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>> the problem was inflation is that it is systemic in ways that is very difficult to fight. >> the yield curve is telling us the amount of space the fed has to maneuver is relatively limited. >> given the fed's positioning right now, it certainly raises the risk we could see the fed frontload rate hikes. >> they have to address this inflation problem. >> hopefully the fed does navigate this well and does not over tighten into a slowing economy. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone.