♪ >> things up -- the fed does want to speed things up in a meaningful fashion. >> what the federal reserve is trying to grapple with is how quickly to get back to neutral. >> it is all about the fed mandate. >> the fed has made it clear they are playing catch-up. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: one more day. we are almost there. long weekend in america coming up. futures up 0.4%. for new york city this morning, good morning. whipsawed by headlines over the last couple of days. the latest headline driving this equity market, it meeting next week doing secretary blinken and mr. lavrov. tom: in the last hour, i really do think we got to get back to

"surveillance" first principles, which is a total mystery of what 47 fed speakers will say in the next when he four hours. -- the next 24 hours. jonathan: can they set the tone? can they get hold of the narrative? president mr. talking about back loading rate hikes if we need to. president bullard saying let's frontload them. we need to right now. tom: i would suggest the mathematician from cleveland has immense respect for her steadiness. john williams is far more controversial in what he can say or do, particularly wrapped around where that term in her value is. it is wrapped around his core research, his acclaimed research. jonathan: ellen zentner of morgan stanley late yesterday was 26 rate hikes for 2022. that has quickly become the epicenter of the calls, gripping around 5, 6 or seven for 2022.

lisa: if you look at fed funds futures, is it really baked into market valuations? if it is, does that give the fed more ammunition to go even faster, saying right now, what you're seeing is not enough financial tightening to really slow inflation to the degree they would like? jonathan: matt horn buck -- matt hornbach said anything of monetary policy is the last thing we need. lisa: basically, markets are expecting them to move 25 basis points in march, and to signal more rate hikes throughout. if they did not do that, that would be a mass easing. that would be a trim medic surprise, and a lot of people are saying it would be a set off -- a selloff. jonathan: would you like to do handbags now or later? tom: we can do it now. david bianco is

important. but you look at presales, and they did better than good. they raise the dividend. they said things are bad, and we are hearing that for a lot of companies. jonathan: they cannot find the staff to make the goods. don't you think that screams exclusivity? they seem to be ok that there goods trade at a premium in the secondary market, and in the primary market, we want some scarcity because our staff can only make so much, and to replace the mr. mislead of occult. tom: each of these -- is tremendously difficult. tom: each of these is different. they are all different and they are all the same. there's a gloom structure set up , and the fact is they are doing really well. jonathan: let's be clear, they

are not doing a chanel. chanel last year, price hike, price hike, price hike. you want to weigh in on the -- on this, lisa? lisa: let's look at yields. jonathan: let's get back on track. then for letting us go. we appreciate that. up 0.4 percent on the s&p, just a little but of a bounce here off the back of yesterday's move lower on the nasdaq. a bounce by 0.6%. the move that's got your attention and our audience, too, a break of $90 on wti. lisa: it does not make sense if you buy into escalating tensions as people tried to cash out of elevated valuations. why am watching today, the munich security conference kicking off. we will hear from tony blinken, as well as ukraine presidents a lincoln -- ukraine president

zelensky, kamala harris, and german chancellor olaf scholz. how much of a buildup of troops will they support in order to counter threats from russia? today we get a slew of fed speakers. to run you through the roster, at 10:45, chris weller and charlie evans are speaking. at 11:00 a.m., john williams. this is going to be really important to listen to him of the new york fed president. does he give any guidance about frontloading versus back loading ? do they feel confident enough with the numbers that they need to get ahead of it, or do they see a waning effect as some of the base effect come into play, and at 1:30, you get lael brainard speaking. how much does she weigh in? is there agreement between john williams and label rainer -- and lael brainard?

at 10 a clock a.m., you get existing home sales. this is going to be interesting because we are expecting a decline. basically, there's not the inventory. does the higher mortgage rate really matter? mortgage rates have risen to the highest since 2019. does this factor into demand for housing, or is housing somewhat immunized from the mortgage rates given how much cash has come in and given the institutional demand, looking for a place for steady incomes and rents that keep going up? jonathan: thank you. tom, what is it? tom: our next guest is may the guest i hate the most because every time he writes, i have to read the whole memo. i hated with a passion. jonathan: you hate our next guest. thank you. tom: he writes brilliant essays. jonathan: that's our introduction to david bianco. america's cio at dws. i'm going to start with bank of america. session risks are rising.

we remain bearish on stocks and credit. the next six months, a rake shake -- a rate shock morphs into a credit stock. what is your response to that? david: always say hello to my former colleagues at b of a, and i am glad that tom reads my notes from beginning to end. i try to go for provocative titles all the way to deep analysis and exhibits to support what i say. but b of a raises a very good point on all investors' minds right now. we are wrestling with that as well. how long does the cycle last? what is the longevity going to be of the expansion we are currently in? this cycle got old fast. it got old really fast. it was aged badly i inflation -- badly by inflation. the scarring of the pandemic, but also demographics, also

regulations, and now these geopolitical tensions, these are things that are exacerbating the inflation risk, and it is making us ask a serious question. there could be a recession in 2023, and this could be a very short-lived cycle. that is something investors need to appreciate, that although we are only two years into this expansion in inflation-adjusted years, we are probably seven or even nine years biologically aged. in u.s. expansions, the record is 11 years. to get to 10 years is a full life. lisa: this sounds pretty bearish. why are you still bullish on stocks? david: in part because of where stocks are right now. we will keep an eye on whether we go into proper correction territory. it is a very tense market right now. there's a lot of anxiety. it will probably be a tough friday given all of the risks that are out there with ukraine. our view is that the s&p 500

will eventually get to 5000, but it was not likely to be at 5000 in the first few quarters of 2022. this inflation needs to come down. we see signs of deceleration, but we have yet to see signs of disinflation. so 5000 is a reasonable number for a year or maybe 18 months out from now, but for now, i would argue the s&p belongs under 4500. jonathan: citi just published more fed speak, less fed guidance. we have heard from them a lot. i have not really heard much on guidance for the year ahead, the size of the balance sheet reduction. who are you listening to, and who are you choosing to ignore? david: we listen to all of them, and we are listening to the

potential future appointees to the fomc. i think there's a lot of uncertainty out there. we are trying to get all the views, but the uncertainty really pertains to inflation. the latest fuel to that fire is oil prices. you have heard fed speakers say things about the supply chain, and they can only do so much on the demand side, the supply chain needs to respond. right now, i think what we need to hear from nonfederal reserve policy setters is what needs to be the interim strategy if there is conflict in europe. i think allies like saudi arabia , maybe doing more cooperation with iran, and then turning to u.s. producers, those are the three spears that need to be used in order to make sure that russia is not successful at using energy as a weapon.

jonathan: thank you for your input as always. we all read it. i happen to enjoy reading it. i don't know what is going on with tom. i never know. up 0.5% on the s&p this morning. across the single names, deere reason the profit outlook this morning. what are you looking at? tom: dear pop up nice -- deere up nice. i will be honest, the sell side was not in love with draftkings. they are down 16% now. it is just simple, they are missing. that's all you need to know. jonathan: with tom keene and lisa abramowicz, i'm jonathan ferro. futures up. we are up 0.7% on the nasdaq 100. yields unchanged at 1.9650%. crude falling back, $89.90. this is bloomberg. ♪ ritika: keeping you up-to-date

with the news from around the world, with the first word news, i'm leigh-ann gerrans. russian foreign minister sergei lavrov will discuss the crisis in ukraine with u.k. secretary of state antony blinken next weekend in europe. their meeting was set hours after president biden warned that the chances of russian invasion of ukraine were still very high. moscow has denied it is planning an attack. the limbs had president loretta mester supports tightening policy at a faster pace if needed to fight inflation. in remarks for a virtual event, mr. said it would be appropriate to raise interest rates next month and speed up the pace of inflation if not moderating. it is the biggest acquisition ever for salinities. they will acquire a broad portfolio of engineered thermoplastics. dupont's ceo has turned the

business into a company focused on automotive and industrial focused technologies. the largest maker of farm machinery deere has raised its fiscal outlook for the full year . deere said it has been able to work around the global supply chain crisis. a giant cargo ship carrying almost 4000 vehicles from volkswagen has caught fire and is adrift in the atlantic. the 20 do crewmembers have been evacuated. among the cars on board our luxury models including porsches, audis, and lamborghinis. i'm leigh-ann gerrans. this is bloomberg. ♪

>> we will never give up on our sovereignty. we will never give up on our territorial integrity. but how to bring peace and how to stop the cease-fire, we are ready to discuss. jonathan: brilliant conversation yesterday with the ukraine ambassador to the u.s., sitting down with annmarie hordern in d.c. a meeting scheduled for next week between mr. lavrov of russia, together with secretary lincoln -- secretary blinken.

crude lower by 2% at $89.79. if you are in the u.k. right now, i hope you are watching this, listening to it, or experiencing what is happening in london heathrow. a storm unit is about to crash down into the u.k. winds are high. we are spending something north of 100 miles an hour. people are watching a380's come into land at london heathrow with the wind whipsawing. the skill of these pilots is something else. tom: i talked to a pilot about the big turn they make over the old world's fair and said, what do you do? he said we try to land safely. tom: these winds are quite something. watching these planes come down. tom: we will do a shout out to big jet with emirates safely landing there with a lot of skill. so with skill is emily wilkins,

measuring the tea leaves in washington. maria tadeo has not slept in three days in brussels as well. maria, what is in your reporting that is not within the zeitgeist? what is the thing about the weekend that we need to know? maria: it is about belarus. they are in the picture, and all of this yesterday, lukashenko, who is still the question later of belarus, said he is willing to speak to vladimir putin and that he would be willing to host nuclear weapons. that is an escalation from a country still close to ukraine, saying if vladimir putin asks us to do this, we could host nuclear weapons. this is very different to anything we have heard from the russians, but also very much against what nato is saying they want to see. i spoke to an official from lithuania, who tell me we should all be paying attention to

belarus. lukashenko is a puppet. we know that. but he's a puppet with weapons, and that is dangerous. tom: what does brussels do? what i see is the putin rulebook, which is to go bilateral and not multilateral. you are bathed in multilateral in brussels. how powerful or important is brussels this weekend? maria: it is because we know everything is being done in unity up until now. i am surprised to see this level of unity. in the united states, europe, the european union, all of them are working together, so all of this is happening in unity. yesterday, an official told me this is the thing vladimir putin miss calculated. he really believed in divide and conquer, but so far that has not been the case. everything is working together on paper, at least, and the europeans are saying we want to work closer with the united nations and the united states.

if there is to be an invasion, vladimir putin will see "the mother of all sanctions." lisa: given the fact that we do have some of the tensions that do seem to be abating, does it make sense to you based on your conversations for oil prices to be coming in for this deep sigh of relief in the sense that there's a diplomatic win in the wings for the u.s.? emily: oil prices are still a major concern for president biden and for democrats. you have seen them put ford a proposal to eliminate the federal gas tax. that does not seem to have enough moment them to actually move forward, but the fact of the matter is that they are thinking about it. biden did warn if russia invades ukraine, that could mean more energy prices, more for gas prices. so if that does not happen, that does wind up being a positive to the american consumer, but certainly the international is only one component of what is

going on with the oil and gas market right now. lisa: is there a sense that the u.s. would be willing to add money to the military budget, to add troops to the region? emily: there is definitely a sense that the u.s. needs to have a strong response, particularly with our allies in the region. i think it is a good question of exactly what that winds up looking like. the u.s. has already sent troops. they have already sent military items over to the area. they have talked about their support and their backing of this. i think we are going to be seeing a lot more in the coming days as you see diplomacy get underway, with blinken talking to sergei lavrov, the secretary of defense talking with his counterpart, with kamala harris in munich, speaking with allies in the european union, as well as ukrainian president a lot of your zelensky -- president a lot of your zelensky. i think these will kind of guide with the u.s. decides to do in the coming days and weeks. jonathan: thank you both.

the tone shift just a little bit is enough to lift this market up 0.5% at the moment. tom: the earnings story is there, but it is about the headlines, the latest headlines on russia and belarus. this munich security conference is actually a big deal, and i would point out got an online invitation to the munich ukrainian lunch, fifth annual lunch, and among other worthies, general mattis will be there to give perspective. jonathan: it is tense at the moment. claims and counterclaims dominated the perspective yesterday. just the fact that we have a conversation lined up between the foreign minister of russia and the secretary of state here in america enough to lift this market for now. lisa: does it make sense to you, but oil is doing? jonathan: work it out. lisa: that is your take? i honestly can't. i honestly can't.

i'm not understanding the pace that people are saying that it is going to be resolved. but if it is not resolved, some of the estimates we've heard of how high crude could go, it does not make sense that there seems to be complacency. jonathan: i really don't have the spare bandwidth to work it out myself because i'm distracted i big jet tv on youtube at the moment. the official reviews from the financial times. big jet tv is officially better than the winter olympics. i know exec a what you're doing right now, exactly what is on your screen. you are watching, too. tom: 133,000 people on youtube. this speaks to the reach, the new digital reality. it really speaks to the immediacy out there. jonathan: there are 133,000 people just watching planes coming into heathrow, landing. tom: the high wind, it is absently spectacular to see the boeing and airbus planes.

lisa: one of the commentators, "mad skills, nice one." jonathan: is that your impression of someone in the u.k.? [laughter] it was, wasn't it? that was it. futures up 0.5%. this is bloomberg. ♪

♪ jonathan: a bloomberg subscriber just wrote in and said lisa's english accent is more authentic than mine. lisa: oh yeah? mad skills. jonathan: beautiful thing. mad skills. i don't think i said that for about 15 years. maybe 20. futures up on the nasdaq. a bounce back by 0.6 percent. yesterday evening, a scheduled meeting for next week between mr. lavrov and secretary blinken to lift the tone. the sentiment improves in the equity market. 10 year, 1.97%. yields up by not even a single basis point. sub 1.50% still on the two-year.

it is time for the core of this fed to get a hold of the narrative of what to look for for next month and beyond. tom: the chairman has got to speak. jonathan: it is an important step forward to have the core of this fed make their voice heard about what to expect here because at the moment, frontloading, back loading, frontloading. it is very difficult to get your headings around what to expect. maybe that is a feature and not a bug because they are not prepared to define a path forward from here. tom: brainerd is the presumptive vice chairman. rainer it is someone with first rate -- brainerd is someone with first rate economic skills, but not so much around core economic theory. that is not the case for williams, and with the special voice of the new york fed, is considered a first rate monetary theorist. jonathan: and we have not heard from them for a while. cpi was hot. ppi was hot. that is the story so far. yield settle down.

unchanged for the most part through the curve. finish on this, the surprise of the week. the biggest weekly loss potentially for crude of the year so far. double g.i. -- wti negative on the week. similar move on brent. fascinating conversation. a trim in this with kailey leinz and the head of pioneer who basically said i don't care if it is $100, one hundred $50, $200, this time around we are going to be much more disciplined about drilling for more crude. tom: go to romaine, please, because a big one is landing at heathrow. [laughter] jonathan: you're watching big jet tv, still? tom: it is like a boeing something, maybe a 747. i don't know. jonathan: you just focus on that. tom: thank you. jonathan: let's get you some single names moving. good morning to romaine. romaine: we will give tom a little bit a break here. keep an eye on the big cap tech stocks. we have been talking about the

drawdown we have had in this market. i think yesterday was a reminder that a lot of these big cap tech stocks are still mired in correction. you have seen a lot of those big caps on names that -- be cap faang names falling out of favor. facebook down more than 45% from the all-time high, now dropping out of the top 10 with regards to the rankings of the most valuable companies by market value out there. it will be interesting to see what the next leg up is for this company, and whether investors are going to buy into the story that mark zuckerberg is selling with his pivot to the metaverse. intel also trying to sell analysts on its strategy going forward. at gelsinger had an investor day is today, saying we will get about 2% revenue growth this year, and that should accelerate to the mid to single high digits . most analysts are pretty skeptical of that. draftkings taking a leg down, down 17% after coming out with

earnings. deplatform user growth coming in a little bit lighter than what the street was expecting. if you m&a things to keep an eye on here. first up is pilgrim's pride. jbs supposed to buy out the rest of this company. pilgrim's pride shares down about 15% as jbs is said to have walked away from that deal. it is not clear why. they just said a special committee meeting did not go as planned. we did know there was a lot of regulatory pushback on this deal. dupont higher on the day, up about 5.5 percent after agreeing to sell off one of its polymer businesses for about $11 billion. virgin galactic, which went public about two years ago through a spac, determine giving up the chairman role and stepping down from the board altogether. tom: thank you so much. what i just saw there, this goes back to the aerospace, i just saw a major flight from qatar airways abandon the landing. i can honestly say i have never seen that in my life. cayman above the runway. couldn't do it, lifted up and

turned away. jonathan: we are talking about immense skill for any pilots coming into heathrow. for anyone in the u.k. experiencing these winds, stay safe. it is tough out there at the moment. tom: it is very important. i want to be very careful. i don't want to name the flight, but it was really a sword in every to see, and we thank big jet for helping us stay on that on radio and television worldwide. right now, colin martin joins us, fixed income strategist at charles schwab. short duration is done. you want to go out. what is the strategy to get away from the addiction of being in the triple leveraged all-cash fund? [laughter] collin: we think it makes sense to not abandon short-term holdings, but at least consider extending out a little bit further on the curve. coming into this year, we thought yields could rise a little bit to the 1.75% to 2% level, talking about the 10%

treasury yield. we are there now and we have not really changed that outlook yet, even with the tens close to 2%. when you look at the outlook for fed policy expectations for the terminal rate, it is not much higher than what the 10 year yield is right now. what we are telling our clients is that you should probably start considering extending out a low bit. yields are up. they are below where they were what a lot of investors consider historical norms, but you look at the post financial crisis era, they are not too far from where we were for most of the last decade. tom: but the real yield is not there, as jon goes to his important program after 12:00 noon. where is the yield value? collin: real yields are still negative, and that is a risk in the tips market. if you are an investor considering dominoes or tips right now, over the short run we see a bit more risk with tips.

a neck of real yield is just too low in our opinion. we think it should police be zero or little bit more positive, but when the fed shifts to qt, the tips market is a less liquid market, and as they pare back their purchases, we see the risk of real yields rising a little bit more nominal, so we think tips investors can be a little bit disappointed with tips returns underperforming dominoes -- underperforming nominals. if we get six or seven, i think spreads would likely widen a little bit. so far, the move has been relatively modest and spreads are up pretty sharply for the year, but i thing that is because spreads were so low. we were at multiyear lows back in the middle of 2021. if we got a severe and sharp

tightening like the markets are expecting, i think yields could rise a little bit from here, but we are not expecting a surge. that is our base case coming to -- coming into the year. we are expecting more volatility and less of this sharp underperformance with high-yield bonds or bank loans. so far they are outperforming based on duration, and they are only underperforming treasuries by a little bit, which to us shows that the risk is more with interest-rate risk and less about credit risk right now. lisa: which is interesting because a lot of people are starting to worry about recession risk. you would expect those credit spreads to widen even more if that really where the issue. this is really the key debate right now. can the fed affect a six or seven rate hike regime without spurring some kind of bigger economic weakness? if spreads do not widen, where is the transition mechanism for that we can -- for that we

getting -- for that weakening? what is giving you the confidence that we do not have the impairment that would cause those spreads to widen? collin: we are not in the six or seven camp, so that is part of our rationale. we are well below what markets are pricing in. we have been a little bit below market expectations for the past handful of months. there's a few reasons why we are below that six or seven. one is we think inflation is likely post to peeking. clearly the numbers are continuing to rise, but we see at least a shift in terms of supply chain bottlenecks, delivery times, prices paid indices, things like that that indicate to us things can come down. also, there are signs not just on the inflation front that it is likely slowing, and we think they can give the fed a little bit of pause as they engage in the right hikes. i think most important for our view of four to five rate hikes

this year is that that is not factoring in qt. if you factor in six or seven rate hikes while the fed is shrinking its balance sheet, that is a lot of tightening. if the fed shrinks $500 billion, $1 trillion, you don't know right now because they have not really communicated to us what their plans are. if you factor that income of that is another hike or two. we are a little below market expectations, and we think the fed will take a low bit more of a patient approach so they don't choke off the economic recovery and send us into a recession. jonathan: collin martin, thank you very much. that tips auction yesterday was really soft, wasn't it? i just wonder if we have started to get to that point that the risk last year was inflation, this year's real yields. whether that is starting to show up a little more. lisa: people are saying the fed is going to respond one way or another, and that seems to be

right now the parallel you are seeing, even as people increase their expectations for short-term inflation, that longer-term inflation outlook is actually declining. so how do you trade in that environment? jonathan: the fed speak front and center today. we hear from williams at 11:00 and brainerd a little bit later this afternoon. futures up 0.5% on the s&p. on the nasdaq, up 0.7%. just a little bit of a bounce back on the nasdaq after a big loss yesterday. yields up to 1.97%. the biggest week of losses for wti of the year so far. from new york, with tom keene and lisa abramowicz, i'm jonathan ferro. this is bloomberg. ♪ leigh-ann: keeping you up-to-date with the news from around the world, with the first word news, i'm leigh-ann

gerrans. the u.s. has ramped up warnings of a possible russian attack on ukraine. president biden says a so-called false flag event may be underway to give moscow an excuse to attack. russian officials say no invasion is planned. u.s. secretary of state antony blinken will meet with russian foreign minister sergei lavrov in europe next week. the biden administration is warning that covid cash is drying up, telling congress that the u.s. does not have enough money on hand to deal with future variants, stockpile vaccines, or develop technologies. they are asking for $13 billion to prepare for new waves of the virus. google and facebook parent meta are facing a data doomsday in the european union. one of the region's top privacy watchdogs is preparing a decision that could risk billions in revenue for the two companies. it has to do with contract terms used by meta, google, and others to illegally transfer user data

to the u.s. for processing. another sign that investor angst over tech giants remains high. the government asked food delivery platforms to cut their fees. they were also told to give preferential -- two restaurants hit by the pandemic. traders at ubs will see bonuses cut by about 10%, while on average, the swiss bank market unit took an 806 2 million-dollar hit with the collapse of archegos capital. the bonus pool for ubs employees will increase by 10%. mobile news 24 hours a day, on aaron on bloomberg quicktake, powered by more than --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.

♪ >> regardless of whether it is $100, $200, or $100 oil, we were

not change -- we will not change our growth plans. if russia decides to stop exporting, it is going to be up to the saudis and uae to decide whether or not to break the pact and increase production under those guidelines. jonathan: fantastic conversation yesterday with scott sheffield of pioneer natural resources, sitting down with guy and kailey leinz. doesn't matter, we will not make a change. crude negative this morning. we are down on the week, down on the session. wti down to $89 60 since. if you are wondering why equities are bouncing, they are bouncing because we were down how yesterday, but also we got a lift last night an equity futures. just yesterday evening, following the headline that sector terribly can will be meeting with foreign minister lavrov next week. on the nasdaq, up 0.7%. tom: as we are talking about what is going on at heathrow, the flight from qatar airlines

that was abandoned and turned left off the runway did not touch the runway. it was flight free from the -- from doha. at 39 minutes delayed. we are making light of this, but this is serious stuff in headwinds at heathrow and frankly, other airports across the united kingdom. will kennedy is familiar with this, living on airplanes. he joins us on oil. of course, his wonderful work worldwide for bloomberg. what i find interesting is the parallel, deutsche bank, dws, and citigroup, just say the $100 plus guys have it wrong as a general statement. state the case that oil is not going to go to $100. will: i think there are two ways you build that story.

clearly there is some optimism that there will be a new iran nuclear deal, which will allow the iranians to export more, and that will change the supply and demand balance for the rest of the year. it will clearly have an impact. and i think the stellar growth we have seen in demand can continue. the fed and other central banks having to tighten hard, consumers will eventually feel that in some of this strong catchup demand that we see that is going to slow down. that is the story. there are reasons that it will calm down. tom: i believe three days ago, his terse one paragraph statement, he talked about our allies given all that is going on. where does riyadh fit into that calculus? will: we'll that biden spoke

quite recently. there have been officials have in conversations. for the time being, saudi arabia is sticking to its plan to increase production slowly, but it would not be a surprise if they have talked about what would happen if the crisis in ukraine developed and deepened, and that would have to mean saudi arabia and the uae stepping into fill some of that gap if the oil were to be disrupted. lisa: do you understand the moves in oil this week? will: what we got was a really strong physical market in the middle of the week. people were screaming we need oil now, and in fact, physical oil being sold in the north sea got above $100 a barrel. i suspect what happened is that gave some refiners some pause for thought, and things have come back a little bit. some of that extreme heat we saw wednesday has come out of the market. when you layer on top of that some of the headlines we are

seeing about lessening tension, possibly with the iran talks in vienna, that will lead to a push back into the weekend. jonathan: can we finish on the supply response here? we've got some in the shale patch saying we will not do it at $100, 100 $50, even $200. is this about ability or willingness? will: i think it is the message scott sheffield is getting from his investors. whenever shale, a publicly listed shale company, says anything about raising production, they get punished by the market. investors keep saying we just want cash. we are not interested in growth. but i do think it is a bit of hyperbole. there are lots of other producers in the permian. above him, you've got exxon and chevron planning to add production because they needed to replace declining fields in other parts of the global empire. below, you've got a layer of

private producers who are not subject to the same investor pressures, who will want to increase production when they are getting $100 a barrel. so it is interesting, it is important. the permian won't grow as fast as you might think, but i think it is not the whole story. jonathan: well, stay safe. i know it is superstorm he over there at the moment. thank you, as always. this is the story right now and crude. where is the supply response going to come from? how supply constrained are we. where are -- where is the capacity, and are they willing to use some of it? sam: this is where -- tom: this is where ed morse of citigroup is acclaimed. the media gives all the headlines to $100 a barrel, five dollars a gallon gasoline, and there is a very competent group saying maybe, but maybe not. we heard that from dave bianco, as well as what we heard from mr. morse. jonathan: wti at $89, brent at

$91. lisa: there is a feeling after the boom and bust of the shale patch that they were not going to do that again. it feels like you have not seen that increase in output, despite the incredible increase in revenues they have coming in. so if you don't get this impulse responding to the price of oil, what is going to cap the prices in the near-term? this is what people are struggling with, at the same time others are saying it's got a little ahead of itself. jonathan: energy equities on the s&p this year, year to date, up 22.75%. there's some real performance on the equity market. that sector absolute flying. the nasdaq 100 is down 13%. tom: in the friday reading, it is simple here. there's so many schools of thought on what is value.

there's got to be five core strategic guesstimates of where we are to the end of the year. jonathan: lisa, you have asked the important question. how important is the crude call for the economy? this is probably the deciding factor for the s&p, but also the recessionary idea. if you get oil prices that continue to climb, goldman sachs analysts came out and said this is a big concern for them. jonathan: does the fed do less or more in that environment? lori calvasina was talking about maybe if we get an energy spike, they got to do more, not less. tom talked about the reading over the weekend. every sunday, andrew sheets and the team put out the sunday chart. the chief cross asset strategist at morgan stanley will join us next to talk about how we kick things off next week after a

long weekend here in america. futures of 22 on the s&p, up 0.5%. yields unchanged on tens, and crude with a break of $90 at $89 six seven cents -- $89.67. this is bloomberg. ♪

>> the market narrative is that we get 10% corrections all the time. that is just patently false. >> we are looking at an economy that is quite healthy and demand is strong. >> what we are seeing is more demand for hedges. >> flows into equities have been really strong. >> bonds are a bad place to be. stocks have been less bad. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. on radio, on television, on an eventful friday, the headlines, may be