♪ >> there is a real risk that the fed is about to embark on a policy mistake. >> inflation has been a lot stickier, a lot higher, and is broadening out. >> i do think there's a peak of this inflation story that will have to be squeezed out by the fed. >> they got a little bit too far behind the curve. they are trying to get aggressively in front of the curve. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: live from new york city, for our audience worldwide, good morning. this is "bloomberg surveillance ," live on tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. your equity market down 0.5% on the s&p. it is claims and counterclaims. tom: we got headlines out moments ago. you see those first on bloomberg.

it is simple, russia defense ministry just talking about belarus drills and troop movements. this is not what we are waiting for from lavrov and putin, but some words from russia. jonathan: the u.s. disputing russian claims that there has been a true pullback. russia disputing u.s. claims that there has been a troop buildup. 10 year yields down by three basis points, a brief break of 2% again. tom: we are seeing some movers. we discussed five minutes ago oil does not give us the kind of haven support you would expect. i would really single in on gold , which is sort of a new region, higher gold prices. jonathan: we've got to highlight earnings as well. walmart will drop any moment now. lisa: the key issue people are looking for is how much consumers maintain demand, keep buying as much stuff, even at higher prices.

you have seen the k-shaped recovery really exemplified by some of the earnings with some of the stores that cater to lower income workers seeing more of a hit than the guccis of the world. jonathan: we've got some that speak, too. tk can hardly wait. tom: you know who is not speaking? jonathan: i'm excited, aren't you, tom? tom: yeah, we did more of our good friend from st. louis. it is almost at the point you say who is not speaking. jonathan: chairman powell, and that is who we want to hear from. you have to wait until the middle of march. working for walmart earnings as well, with futures down 0.4% on the s&p. on the nasdaq, down 0.5%. fourth-quarter revenue, $152.87 billion. that is quite a nested -- quite a number, isn't it? tom: they mentioned a planned share repurchase, but it is pretty much on track.

you look at the foreign-exchange adjusted net sales increase, about 3%. what i am seeing is pretty much on track. jonathan: the guide is online with growth outline for last february. he stuck up by about 1.75%. -- the stock up by about 1.75%. lisa: i wonder if we will talk about this quarter as beats rewarded by meager gains, and losses met with losing 1/4 of your value. yes, i am harping on roblox. 8:30 am, we get u.s. jobless claims. continuing claims will probably fall to a new low for the post-pandemic existence. when do we say we are there? when do we say we have reached full employment? this has been one of the conundrums that a lot of people are trying to parse through. how much slack is left? how much does this feed into wage inflation that has been coming in hotter than a lot of people had expected?

exec leaves are expected to speak at credit suisse's financial services forum. how much are they going to talk about the consumer? how much are they going to talk about the savings getting depleted and the fact that you are seeing signs that lending is starting to pick up, particularly in the riskier sectors? central bank speak continuing. east beachy philip lane, the chief economist, is speaking at 9:00 a.m. i am particularly interested in what he has to say because the ecb faces a less certain directory of inflation and growth. st. louis fed president jim bullard at 11:00 a.m. and cleveland fed president loretta mester speaking at 5:00 p.m. there's so much uncertainty, highlighted by that options volatility move index that measures the implied volatility in treasury yields, which is the highest level going back to march 2020. jonathan: just to return to the walmart numbers combat first look, the numbers looked decent.

the ceo -- numbers, at first look, the numbers looked decent. then that line on supply chain costs. we have navigated higher supply chain costs well. tom: i do agree, the forward view of walmart is sometimes reluctant to do that over the 20, 30, 40 years, but they've got to do a forward view. that will be important. walmart has 2.2 million. the size is unimaginable. jonathan: but what about the change at amazon? that has been a big story. that has increased so much over the last few years. tom: and amazon is in a completely different framework. retail to retail here is complete the wrong in comparing the two, but nevertheless, as mike mckee mentioned yesterday on retail sales, online sales were up 14%. that is some inflation lift as well, but still he big number. jonathan: walmart up 0.7% in the

premarket. with us now, binky chadha, chief global strategist and head of asset allocation at deutsche bank. where are those earnings going to come through -- come from, revenue growth or margins? binky: good morning. we are at $230 for s&p earnings this morning, about 10% earnings growth. i would say our earnings growth numbers basically come off of our house economics view for the u.s. and globally, and that is all it basically is, simply, unless one starts looking at a more disaggregated level. i think the points to note here are basically, obviously as we were coming out of the pandemic recession, we have a huge growth rate that are gradually

decelerating get the question is how much will growth decelerate this year. as i said, we think around 10%, that is coming off of 50% and 70%, that is a gradual reversion basically to trend. 10% sounds kind of high, but outside of recession, that is kind of what we've had on average. tom: you've got a great analysis in your note, all on the deutsche bank platform, follow the money. look at the flows that are out there right now. ukraine, russia, washington. is that part of flows? is geopolitics part of flows? is the pandemic part of flows, or are we finally removed? binky: i would say if you look at flows, the most important thing to point out here is that clearly, we've had quite a lot of volatility across markets, but if you look at flows into risk, s&p 500 u.s. equities have

held up her markedly well. if you thing about what we got in terms of equity flows last year -- tom: come on, you and i are ancient enough where we know that a bear market is 18% and a real bear market is 30%, and we are hysterical over 7%. do we need to steel ourselves for more? binky: i would say we did get intraday down to 11%, 12%. we did manage to close down 10%. it is a pretty big deal in terms of a move. the market narrative is that we get 10% corrections all the time. that is just patently false outside of recessions. we had basically a shock to risks markets. we saw churning through the pullback, but it is just a pullback, i would say. tom: what is the vix value here? the forward vix as well.

reading spot vix, is it a value for you in discerning mood of market and future of market? binky: yeah, and very importantly in this particular market because retail investors have been involved in a big way, the options market is on par with the cash market in terms of volume, may be a hedge if you are thing about notional volumes traded, and the vix is implied volatility rather than realized. the difference is the risk premium, so one of the mysteries of the economic and financial market recovery since the pandemic was why vols remain so elevated. we ascribe that very much to the increased use of the options market, and right now there's very little question that basically the vix is pretty elevated, and as a result, you have seen as a shooting of the systematic strategies down to

the 20th percentile. if you hold the vix here, you need a steady diet of incremental bad news. absent that, the vix will come down. tom: we've got a steady diet of breaking news. we will have to leave it there. but don't be a stranger. we are thrilled you came into our offices here at bloomberg. jonathan: binky chadha of deutsche bank. that headline that jumps out from walmart, the cost of four q. lisa: supply chain costs in the u.s. were more than $400 billion higher than expected in the fourth quarter. that said, let's put this gain in perspective. this is the first time since may 2021 that walmart shares have risen after earnings, so actually, this is an anomaly rather than the norm for a company that really does represent the u.s. economy. jonathan: tells you something about expectations. 136 point -- $136.09 on walmart

and the pre-market. right now, nato secondary general jens stoltenberg speaking. they call on russia to do what it says, withdraw. tom: the withdraw is the heart of the matter. early in the blinken statement, he went right to minsk, to the two agreements of 2014 and 2015. by all analysis, those were broken immediately. they need something new. that is a decision tree. putin says minsk means this. stoltenberg and the west says minsk means that. that is what we need to learn about today from vladimir putin. jonathan: futures are down 0.4% on the s&p. on the nasdaq, down 0.5%. this is bloomberg. ♪

ritika: keeping you up-to-date with news from around the world, with the first word, i'm ritika gupta. russia is adding up to 7000 troops to the 102,000 already near ukraine's border. the kremlin calls that assertion fake. it said earlier that some russian forces in the region are returning to their bases. and while, european union leaders will discuss the ukraine crisis today. europe looks to be gradually leaving depend of it behind. germany is becoming the latest in the region to unwind restrictions that has disruptive -- that have disrupted lives for two years. chancellor all of schulz says most -- chancellor olaf scholz says most will be rolled back by march 1. bloomberg has learned that chinese medical experts will probably be brought in to help. local media say the push will begin in early march. federal regulators are investigating complaints about

tesla cars that suddenly break at high speeds. the national highway traffic safety administration says it has received 354 reports of so-called phantom breaking, no crashes or injuries reported. there has been no comment from tesla. airbus is leading the worst -- is leaving the worst of the pendant behind, posting record net income last year and has plans to reinstate a dividend. they retained the crown of the world's biggest playmaker for the third year in a row. 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. ♪

♪ >> despite moscow's claims, we have seen no signs of withdrawal or de-escalation so far. on the contrary, russia's buildup appears to continue. we continue to monitor developments very closely. jonathan: those headlines just income of those comments from jens stoltenberg, the nato secretary-general. futures this morning down 0.4% on the s&p. with tom keene, lisa abramowicz, and jonathan ferro, the commons

overnight breeding some risk aversion through this market. yields just north of 2%. a brief break of that level. euro swissie in the swissie's favor, the euro down by 0.2%. tom: we can triangulate out very nicely to see the market mood. there is a new phrase, and i will let you define it. maybe prime minister johnson can define it for us, a nato-russia council. what is that? jonathan: seems to be something the nature secretary-general is calling for. one of the headlines, "we are ready to discuss some of these issues in a nato-russia council," calling on russia to come to the table. tom: more discussion, i presume after some formal withdrawal, whether it is from the debated part of ukraine or on the borders of belarus, as we heard from the russian military in the last hour. we will continue to monitor this for you, but also get

perspective from an expert in international relations. julie norman is out of the university college of london, also on a broad swath of international relations, and we are thrilled she could join us today. want to go back to angela merkel and 2014. angela spent emphasizes this in putin's world. forget about 19th and 20th century navelgazing. clock cannot be turned back. if the clock is moving forward, what are we moving forward to? julie: it is a good question, and we have seen things seem to be changing, but also staying the same this week. we did hear that russia was releasing some footage of withdrawing troops. that of course has been challenged by the u.s., by the u.k., by nato, who are looking for actual facts on the ground, to see those words translated into action.

at the same time, we see dip a medic efforts continuing. we heard nato calling for a nato-russia consultation, it for them that has been provided in the past to provide communication directly between nato and russia, calling on that to continue. the good news is that all sides, including russia, or at least locally open to diplomacy, and as long as that is still an option, i think we will still see a lot of efforts in that area. there might be a little bit of wiggle room there. tom: where is the wiggle room on saving of face? we spoke to the wonderful david rubenstein yesterday in a conversation with secretary kerry. he and i were talking before we went on air about our childhood and cuba and the missile crisis, and trying to figure out how to have khrushchev save face. what is the formula you see for mr. boudin to save face? julie: this is going to be the challenge because all sides are trying to appear resolute, but

all sides also need to have some degree of flux ability. as you mentioned, we have seen similar situations in history before. the key is to bring it back from this crisis point to what nato has suggested might be a sort of new normal, ongoing threat of potential russian buildup, but not quite to this sense of imminent buildup that we had before. there is some room for discussion. we have heard that there are some comments -- there's some commonplace in terms of missile placement, troop deployment, and interpretations of the minsk agreements, but of course, the key issue is about eastward expansion of nato, and especially future admittance of ukraine. i think what is challenging here is content wise, there is some room for compromise, simply because all parties are aware that ukraine is not going to be admitted into nato anytime soon,

so it is a pretty open secret, but the tricky part is trying to put any kind of parameters around that that are not precluding sovereignty or nato's open-door policy, and are not giving into russia, essentially holding ukraine hostage to have that compromise take place. lisa: what does putin want already -- what has boudin won all caps what has putin -- what has putin won already? julie: he's got nato to think about these options that had previously been quite broad and out there. even if russia does not invade, he has created a situation where this rethinking of what this post-cold war security is going to look like is very front and center now for europe, for the u.s., and really trying to take some of those security concerns seriously in a way that probably had not done before. jonathan: thank you for taking time to catch up with us.

the nato secretary-general jens stoltenberg continues that news conference. that press conference is ongoing. if you are just tuning in, the headline so far, stoltenberg saying no sign of russian withdrawal so far. he calls on russia to do what it says, withdraw. he goes on to say something you have picked up on, ready to discuss issues in a nato-russia council. the nato secondary general continuing to speak right now. tom: to move onto to the table and diplomacy, the history here goes back way before 2014, but for the sake of conversation, let's start it eight years ago, seven years ago, and the answer is it has never been successful, but it moves the can down the diplomatic road and seems to be one of the strategies this morning. jonathan: before we get down the road and solve some things diplomatically, we got to work out the current dispute, the claims and counterclaims so many people are waking up to this morning. lisa: there is a fear they are

going to trip into some sort of military conflict is all of these tit-for-tat claims leave people with egg on their face. i think that is why they are looking for a face-saving exit. most people don't think this is going to be a lasting influence on markets. they say these things never have lasting influence on markets, so then it becomes a tail risk, especially if it is not priced in. jonathan: for europe, perhaps maybe. in europe right now they are already facing some energy issues. the price of gas has gone through the roof over the last several years. you add to that another energy spike. where is the belief in the european economy? lisa: is this time different because of how tight energy supplies have been? we keep harping on a very strange move in oil today, the fact that it is down even though you have this escalation intentions is a little bit odd. jonathan: coming up, draghi chaudhry -- coming up, gargi

chaudhuri. on the nasdaq, we are down about 0.5%. with tom keene, lisa abramowicz, and jonathan ferro, on tv, on radio, this is bloomberg. ♪

♪ jonathan: waking up to disputes, claims, and counterclaims. if you look at the earnings from walmart, things look good. if you look at geopolitics, you won't know where to look. futures down 0.5% on the s&p, the nasdaq, and likely -- and the russell as well. we will keep bringing you those headlines as they come through. the bond market, let's talk about the fed and the fed minutes. did it change something for you? for jp morgan's mike caroli, they are -- mike feroli they are ready to go. a move at every single meeting this year. tens at the moment just north of 2%. do you yields backing away from

1.60%. -- two year yields backing away from 1.62%. the reason jp morgan has made a move, the ecb is set to make a move as well. switch up the board and finish on euro-dollar. the end of last month, we opened up the final trading day of january with a 1.1 1% handle. came very close to 1.15% handle. the idea being that in the past, the fed had to back away because it had to worry about the dollar getting too strong. does this take those concerns away? tom: i think there has been's good work on this, include bruce kasdan -- bruce kasman and youngkin fells of pimco -- and joachim fels of pimco. jonathan: i remember being woken up.

wasn't it my christmas vacation? lisa: first thing in the morning. merry christmas. jonathan: 15 basis point move. i missed the flight, tom. [laughter] the things i will do for this program, the links i will go. lisa: touching. jonathan: just to have a phone conversation about the bank of england. let's get you some single names and say good morning to romaine. romaine: we are heading into the final leg of the earnings season. the biggest of the day is walmart. the guidance is very bullish. the company guiding at about 4% topline revenue growth. they are also saying that a lot of supply chain issues and the costs associated with that, the labor costs associated with that, that is really being made up for in the increase in sales, so little bit of a read into how these retailers that benefited during the pandemic, to see how much strength, how much upside is going to be

contained post-pandemic. walmart shares up almost 3% in the premarket. keep an eye out competitors like target, shares of about 1%. they report in about a week and a half. it will be interesting to see what are some of the issues that led to walmart's beat and raise for the year, we also see that flow into a company like target. keep an eye on doordash. a lot of people left this stock for dead. it was down about 50% from its all-time high. shares higher by almost 15% in the premarket. the growth story here was pretty strong, 35% growth year-over-year, but more importantly, they get a forecast, that not only did they say the number of orders is going up, but also the value of orders will be going up in the first quarter. so again, a pandemic stock that looks like it is going to show some strings post-pandemic. still a reminder that we are still in that pandemic. tripadvisor came out with earnings, the travel website still showing a lot of issues with the lack of travel area they also have a big restaurant business as well, restaurants

bookings. those shares down about 8.5%. the company did say they expect some of the issues they saw on the fourth quarter to abate in the first quarter and into q2. keep an eye on roku. that comely reports after the bell tonight. hasbro shares up about 4% right now. remember, hasbro owns a lot of board games and digital gaming in addition to their toys. also fox once the company to spin off some of the gaming division. tom: this is important. gargi chaudhuri joins us, head of ishares investment strategy americas at black rock. she brings to the discussion a first rate accounting background out of ohio wesleyan. i have not said this since i had no gray hair. are we finally in a land of

accounting? are we going back to my youth, where we are really worried about inventory dynamics and long-term inflation dynamics as we look at companies? gargi: first of all, i don't know if we ever left it, but on the inventory, if you look at the spending, we are still looking at pre-pendant levels. we are still about 4% above where the trend for good spending was, but we are down meaningfully, 18% or so from the highs that we saw bright after the pandemic. so i think as we shift away from goods spending back to services spending, and of course, services spending is not back at trend yet, i do think that kicks off -- that takes off some of the pressure that has been felt on inventory. obviously the supply chains getting resolved a little bit, down 25% by our measure, also

helps move the inventory battles a little bit. tom: i know you are a direct reported to laurence fink, who has been vetted for secondary of treasury and the rest. but your note is stunning and how shopper refuses to play the number of rate hike forecasts. explain the reticence that you have in your research note of gaining what the fed is going to do on rate hikes. gargi: i think we have all been really surprised. coming into this year, many of us, certainly myself, were expecting something along the lines of maybe three rate hikes at the most, and when we saw that hawkish pivot in the beginning of the year and then in the january fomc meeting, we realized that the fed does want to speed things up any meaningful fashion, and they are getting really scared with the headline cpi number at 7.5%. having said all of that, we all have to remember that monetary policy works with a long and

variable lag. the question i ask is do we really think that we can get seven rate hikes and a balance sheet unwind, and that not impact growth at all, especially if we are to believe that inflation is going to come back down a little bit from these really high 7.5% type numbers to a little bit more palatable level, 3%, 3.5%? i think we have to be very cognizant that many of us got this wrong in terms of how we came in in the beginning of the year, but i still think to expect 7% and not give the economy a chance to react to the rise in interest rates is probably not likely. lisa: that brings me exactly to where i wanted to go. we have seen this in cripple rotation into stocks and away from bonds, the biggest going back to 2013, and j.p. morgan says it is not going to last

because of exactly the dynamic you are going to talk about. at some point, stocks will look up to the growth fears that come along with a faster pace of rate hikes that we seem to be pricing in and certain pockets, but not all of them. do you start to see the beginnings of that in any of your flows data? are you also expect in a rotation back to bonds and out of stocks? gargi: what has been interesting this year is that flows into equities have been really strong. i think the shift we have found is that many of the flows are now into sort of traditional value away from growth, and that could mean value sectors, value sectors, but also europe. this is the first time we have seen more flows go into europe than the u.s. equity markets. to answer your question more directly, do i think the flows are going to immediately stop and go back into bonds? as we look back a few more years , as we go back to 2018 18, 2019, there are still $3

trillion or $4 trillion more that did not go into equity markets. i think everything on geopolitics aside, we don't know how the russia-ukraine situation is going to play out and what that might do to safe haven flows, but keeping that aside, i think as long as the gross dynamics in the u.s. stay strong, stay above potential, i think it is likely that investors are going to allocate into equities. it might be broader equities. it might be europe, it might be,, it might not just be u.s., which was the story of 2021. jonathan: i am totally have to let you go. thank you. aargh charter he of -- gargi chaudhuri of black rock. the connection going down with black rock in about 30 seconds. no one thinks larry is literally there, ready to pull the plug on a camera. futures down about 0.3% on the s&p. on the nasdaq, down 0.5%.

the last hour we have heard from the natives of attorney general jens stoltenberg. the u.s. treasury of defense lloyd austin to give his thoughts on what is going on. tom: it will be interesting to hear from these voices, but as well, we are waiting to hear from a lavrov comment with putin. got to digest it right now. but it is a movable feast, and what we hear from secretary austen will be most important. jonathan: when we get those headlines, we will bring them to you. we have heard from the nato secondary general. no sign of a russian withdrawal so far. we call on russia to do what it says, withdraw. that is the tone we have seen from him, from the president, from the u.k., and across nato. lisa: there's not a cheer resolution to this. i think that is why that whole idea into the new normal really stands out. this has been repeated several

times by the nato secretary. how much are we going to see the tit-for-tat of some sort of rolling basis, and how does the market value this at a time when you already have tight oil supplies and energy markets have already been really disrupted? jonathan: keeping an eye on crude right now. lloyd austin, the defense, walking to the podium right now, i am told. tom: i don't know if we are going to hear from him or not. we are going to wait and see. he is taking a deliberate time here. the gentleman with years of experience, particularly organizational experience, general austin begins his comments at nato. of course, the united states has heard from secretary of state blinken yesterday, making very clear that this is an allied effort. jonathan: coming up, terry haines on this situation. we will catch up with him in about 30 minutes. from new york city, with tom keene, lisa abramowicz, and jonathan ferro, this is bloomberg. ♪

ritika: keeping you up-to-date with news from around the world, with the first word, ritika gupta. the cdc says it once to give people a break from wearing masks. the agency is reviewing its masked guidance and is shifting its focus to covert hospitalizations as a key measure of how severe the outbreak is. the current policy is that if people live in an area with high transmission of the virus, they should wear masks in indoor public places. in canada, prime minister justin trudeau's emergency orders aimed at cutting funds to protesters have cast a wide net across the canadian financial industry. portfolio managers and security firms are taking a harder look at who they are doing business with. any suspicious transactions must be reported to the country's anti-money laundering agency. more details coming in about the u.s. investigation into how morgan stanley executives handled trades between the bank and outside fund managers. the recordings are of

conversations including one of morgan stanley's top equities executives in block trades. he has not been accused of wrongdoing. the ceo of intel is tired of wall street doubting his comeback plans. pat gelsinger gives himself an a-grade for his first year of running the chipmaker. gelsinger is spending $20 billion to build the world's largest chip making facility in ohio and planning an expansion. 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 have seen a lot of volatility because of these geopolitical risks. we are seeing oil climbing on

news from russia. we have seen it declined slightly on news coming out of iran. that is also a very important geopolitical risk factor right now. jonathan: that was ellen wald, senior fellow at the atlantic council. futures are down 0.2% on the s&p. pulling back their .3% on the nasdaq. no big drama here. we are down three or four basis points on tens, just about holding 128 2% handle on the 10 year yield. -- holding onto a 2% handle on the 10 year yield. at the moment, we are hearing from u.s. defense secretary lloyd austin on the situation he sees, the diplomatic effort, and the standing of nato at the moment. let me pick up on that headline. he has never seen nato as relevant and as united as he has today. we still have time and space for diplomacy to work. that is the diplomatic effort to get on the state of affairs at the moment, we don't see russia withdrawing any troop. we see russia adding more

troops, even in the last few days. what they are very hypervigilant about at the moment and have been for the last several weeks, alert for so-called false flag operations. those other words of the defense secretary in the last couple of minutes. tom: to me, that is a key headline. this is a gentleman who started his career out of west point in germany. absolutely critically in the crucible of 2014, he took central command over from mattis. that is not ukraine, but if you look at putin, it is the concept of the eurasian leader of russia that was the absolute heart of general austin's responsibilities on a daily basis. jonathan: when he talks about how united nato is, it is important to recognize that every stating we are getting now, regardless of who the individual is delivering that statement, they are all on the same

statement yesterday. we continue to wait for comments for lavrov and putin this morning. we also identified that oil is a matter, and the dynamics of oil supply and demand. kriti gupta, what do you have? kriti: on a surface -- on the surface, lower on the day. news also of iran talking about getting closer to an agreement on the nuclear deal. underneath the hood is really where all the action is in the oil market, specifically when you're talking about backwardation in brent. that brings me to my chart of the day. we are looking at the time spread between second and third month contracts for rent. it goes all the way back to the 90's, the highest since 1991 during the gulf war, even higher than when you saw the onset of the libyan war. it signals that it is extremely strong demand. oil tends to be in the usual state of backwardation when you see healthy demand, but it has never been this strong. tom: this is the fancy people in oil looking at 60 or 90 days at the demand guess. and my right and that?

-- right in that? kriti: pretty much. when you look at the spot prices, a lot of people forget to look at the physical prices. some amazing reporting talking about dated brent. essentially, physical cargoes, those prices have already hit $100. tom: i urge you to go to the abramowicz living room and see physical oil when it was at a negative price. lisa: no, i sold it at the highs. tom: with us now is julian lee of bloomberg. you are wonderful at the guesstimate of this. how is your oil demand guess right now, and how does mr. putin and russia play into our demand calculations? julian: i think demand is clearly running ahead of supply at the moment. i'm not going to put a number on it. there's plenty of numbers out there. i'm part of a news team rather than an analytical team. but what is quite clear from

this very steep backwardation, the big premiums for prompt supply, is that people are trying to get hold of oil now to meet demand that is right here, right now. the problem is supply has not been growing fast enough, and it doesn't look like it is going to grow fast enough, so prices are rising to a level that is necessary to try and choke back some of that demand growth. yes, there are undoubtedly geopolitical factors in play. certainly the movement of troops around russia's border with ukraine is part of that. certainly the talks, will iran come back, won't iran come back, is part of that. but all of that is on top of the market that is fundamentally very strong and very tight. jonathan: tell me about the try and get -- tom: tell me about the triangulation we see.

what is really interesting is the dialogue between russia and riyadh and riyadh and washington. maybe there is even an oil dialogue between washington and russia we don't know about. explain that conversation right now with riyadh as the center. julian: riyadh finds itself in a very strong position at the moment. it is one of just a very tiny handful of countries that can boost production. russia may be able to, but it may not. the americans, the u.s. shale patch seems to be very unwilling to boost production in ways that it has in the past. i think it concentrated a lot of power certainly in the oil patch in saudi arabia. the discussions between saudi arabia and russia have been very much about managing the return of supply in a very gradual way. they have been extort nearly

reluctant to open the taps more quickly than they planned back in july of last year. the oil dialogue between washington and riyadh is very strained at the moment, partly because of the reaction in the u.s. administration to the killing of jamal khashoggi. that i think makes it that much more difficult. that mix it more difficult for the conversations that need to take place to actually happen. jonathan: pentax is -- fantastic to catch up with you. this is an ongoing issue area at how supply constrained in thi -- supply constrained is this market at the moment? lisa: the backwardation we are seeing in the market, basically people are kicking off barrels of oil, the physical oil they are struggling with. you can see this with inventories at the cushion plants in the united states, which is a key area of storage, at the lowest since 2018.

so you are seeing real depletion amid the speculation that is driving some of this action. jonathan: this is what jeff currie would always say. this is not an anticipatory asset class. what does it take to clear it? at the moment, it is a higher price. tom: that is certainly consensus, with ed morse of citigroup going the other way. within all of the work russell and matheson and our team asked work rosalind mathieson -- work rosalind mathieson and our team in europe have done, it is one phrase that sticks out in the bloomberg coverage, and that is legally binding guarantees. maybe that is what we will hear about from lavrov and putin. jonathan: it is the language to look out for on the other side of the conversation. michael holland of holland and company joining us. we will get his thoughts and just a moment. futures down 0.25%.

-- 0.25% on the s&p. 1.9998% on tends. for our audience worldwide, heard on radio, seen on tv, this is bloomberg. ♪

>> what we are seeing over the past couple of days is more demand for hedges. >> we just don't know how much of this will suffer correct. >> over the long-term, we are still sticking with the view that things will moderate. >> we think it is going to be a subpar year for growth. >> focus on the here and now earnings, not those far in the future. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. on radio, on television, a momentous thursday. claims in 30 minutes, but far more