>> 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 a dearth of headlines

recently out of russia, but all eyes on belarus and the plexi. -- and the black sea. jonathan: that could be the story into the we can. we have talks scheduled. that improves things just a little bit. sentiment improves off the back of that. secretary blinken gets set to meet minister lavrov next week in europe. tom: oil a little bit in as well. david b uncle -- david bianco and for sizing -- emphasizing oil prices. let's talk about what stocks have done. they have looked at earnings such as deere and others and said, not bad. a lift this morning. jonathan: when it comes to a protect more broadly, a massive punch lower, down by 3% on the nasdaq 100. for me today, it is about the fed speak, the core of the federal reserve, getting a hold of the narrative around what to expect next month from the fed. maybe you hint of what we can get subs italy --what we

can get subsequently. balance sheet one, size of reduction, and point to come i want to end -- point two, i want to understand the strategy. the consensus on the street is frontloading. i would say it is frontload rate hikes and hope inflation fades in the back half of the year. later today, 11:00 eastern, williams of new york, and then governor brainard. those are the two to watch. tom: what is the bond market listening for, particularly from governor brainard? lisa: a 50 basis point rate hike. tom: she is nothing to say that. lisa: no, but the whole idea that loretta mester raised perhaps they should go tentatively now and wait to see how the inflationary backdrop evolves over the year was new. is there a consensus on the frontloading? what does that frontloading look for?

will she can from the balance sheet reduction people are talking about and focus on the mortgage debt in particular? are they going to make a more aggressive push as we get rent climbing at the fastest pace on record? tom: the vix comes in, 26.69. ugly close yesterday as well. s&p up 22 points, 0.5%. we've got 140 dow points higher. jonathan: is that where we are, up 0.4%? yields unchanged at 1.97%. we talked a lot about brainard and williams. don't rule out governor waller either. governor weller has been quite outspoken at times. governor waller has flown solar before. -- flown solo before. crude is lower, $89.92. big week, biggest loss of the year so far. tom: let us get right to it. andrew sheets with us, writing a

wonderful summary of the morgan stanley view in this cross asset analysis. what will you write this weekend? i'm going to front run your clients now. i want to know the theme you focus on as you write this weekend. andrew: the theme we have been very focused on in this -- focused on is this idea that the year could be in three parts. i think we are in the hardest part right now. the first quarter where the growth uncertainty is the highest. the inflation uncertainty is the highest because inflation is high and it has not yet started to come down yet. the policy uncertainty is the highest because we have not had that important march meeting where the fed will give us quite a bit more detail on policy and where the geopolitical risk is the highest. so i think these are still reasons we are not advising investors to buy the dip, so to speak, but these are also factors that could look very different as we are thinking about april and may, and i think

that is also something that is important. tom: over the last -- jonathan: over the last few weeks, what has built up a something interest in on the growth side. you framed that inflation first, then the policy response to it. the next leg is the growth part of the story. just how bad do you can get is going to be? andrew: i thing this is where the china policy response is very important. the fiscal story more broadly is very interesting. you have contractionary fiscal policy in the u.s. and the u.k., but you're going to have a easing fiscal policy in china on our forecast and easing fiscal policy in the euro zone because the recovery fund funds are finally going to get spent. so i think this is a compex picture overall. morgan stanley economists think growth this see her -- growth this year is going to be solid. but i still think this is part of the year where that uncertainty and growth is pretty high and there's a lot that

could happen and a lot we don't know. so hoping for more clarity on that, but don't think investors are going to get that clarity maybe until you advance further in the year. jonathan: what would you be buying? andrew: i think this is a market where you do have a diverse vulnerabilities and exposures to this narrative. so we take a step back, what investors are worried about is valuations are high, inflation is high, central banks are behind the curve area but valuations are not high and a lot of non-us equity markets. inflation is not high in much of asia. central banks have not been slow to react in parts of e.m. so focusing on cheaper global equity markets, focusing on markets where we are more bullish on fixed income in china , where we think inflation is low and policy is still going to be easing, and even some of

those emerging markets where they are way out front and much margaret von policy, it is on those markets where we feel more comfortable receiving interest rates, being more constructive on duration. most markets were not constructive on duration. lisa: do you think markets are pricing in the six rate hikes that the bond market seems to be pricing in? andrew: on the u.s. side, we still think not quite. the s&p this morning is roughly where our strategists, where my colleague mike wilson thinks we will in the year. that does not apply a whole lot of risk premium to reflect the increasing rate risk, and the fact that we think real interest rates keep going up. but we think stocks in europe, stocks and japan, i think those markets are fine if rates are a bit higher. this are rates with very high equity risk premium. it is a lot of ability to absorb higher interest rates. those are markets that we think and in the year higher by double digits. so i think there is a real

divergence there, but in the u.s. assets where we are most concerned of a little risk premium. lisa: how are you thinking about oil? if oil prices stay where they are and climbed to $100 a barrel , how does that change your asset allocation in the u.s. and beyond? andrew: there's obviously a big debate around oil. we are in the more bullish camp. our thinking is that demand is ultimately going to be reasonably strong this year, or demand is going to keep increasing because morgan stanley is forecasting nominal gdp to increase by about 6% this year. that means more oil is used. supply remains very low, and that supply is going to take a long time to ramp, as you were discussing in the last segment. it is just not really responding to higher prices in the way it usually does, so strong demand for limited supply, all of the mixes thinks the price will be

higher -- that makes us think the price will be higher. tom: i have been focused on growth. i love what you said about pretty good growth, is what morgan stanley sees. to me it is the great growth gas of 2022 -- growth guess of 2022. what is the market price for, tepid growth, morgan stanley growth, or poignant growth? andrew: i think this is fascinating because i think it depends on what market you are looking at. if you look at the copper price, it looks like the market is expect in very good growth. if you look at the completely flat u.k. twos-tens curve or the inverted u.s. twos-tens curve when you're forward, it seems like the market is very skeptical that growth can hold up to interest rate hikes. so i think on a process that pays us -- cross asset basis, there's a difference depending

where you look. we think the market can price any higher interest rate that central banks will be able to hike further before the cycle ultimately ends. this is also a case where we think the oil price can rise further to price and more growth optimism, and on the equity side, i think you want to be expressing those cyclical exposures outside of the u.s., in european cyclicals and parts of asia where we think there is much better risk-reward around this idea that ultimately, growth will be ok, albeit with high uncertainty. jonathan: looking out for the note this sunday. always a best way to start the week ahead. a long weekend coming up. futures up about 0.25%. on the nasdaq, up about 0.3%. the bounce fades a little bit. we got a scheduled meeting with secretary blinken and mr. lavrov. we have asked all morning, will

it stick? crude down about 1.8%, down the session, down the week. the hope that maybe we get crude supply by come -- by some kind of deal with iran. the pullback is interesting given the tension around ukraine through much of this week. he fed is going to be something to watch as the day progresses. we would your from brainerd, williams, and the third piece of the story today which i know you're are super addicted with right now, storm unit bettering the united kingdom. what you are seeing at the moment are some highly skilled pilots landing some really large planes into london heathrow, and this channel right here, big jet tv on youtube, getting a ton of people tuning in to stare about this gray skies and these planes pop through them and execute some unbelievable landings at london heathrow. tom: let us close the loop on one of the flights we looked at. this is qatar flakes three.

we believe that successfully landed. it looks like it is a little better right now. i think the conditions may be the patchy blue sky, maybe it is the backside. jonathan: we hope things improve and hope everyone in the u.k. stays safe. futures up 0.25 percent. from new york city, this is bloomberg. ♪ leigh-ann: keeping you up-to-date with news from around the world, this is the first were news. i'm leigh-ann gerrans. russian foreign minister sergei lavrov will discuss the crisis in ukraine with u.s. secretary of state antony blinken next week in europe. their meeting hours after president biden warned that the chances of a russian invasion on ukraine were still very high. moscow has denied it is planning an attack. cleveland fed president loretta mester supports tightening policy at a faster pace if needed to fight inflation. in remarks for a virtual event, mr. said it will be opprobrious

to raising just rates next month and speed up the pace of inflation. she expect inflation to remain above 2% this year and next. in hong kong, chief executive carry long -- executive carrie lam will delay its election to continue to fight the coronavirus. meanwhile, hong kong will get mandatory for all residents to have a covid test. 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 leigh-ann gerrans. this is bloomberg. ♪

♪ >> when putin>> makes calculations about whether there should be war, he is going to have to look at the russian economy, which is in no great shape at this moment. if he wants to have a war, he is going to have to suffer severe economic consequences. jonathan: the words of the managing director at team at advisors -- at tm at advisors. enough to get this equity market a bit of a bounce. the meeting next week between sec. blinken and minister lavrov. the nasdaq up 0.3% per get that bounce fades as this session grows older. we rolled over just a little bit. yields unchanged on tense. euro-dollar going nowhere at on .1315% -- at 1.1395%. tom: thanks to our booking team

for a great job on short notice. now we finished strong with seth jones. to say he is director of international security at csis does not describe the institution, the center for strategic and international studies, is america's definitive house on analysis of war. dr. jones, thank you so much for joining us today. the founder of csis, his ship is in the black sea. what is the effect of us showing the flag in the black sea to vladimir putin? seth: i think what it means right now is that the united states is not going to back down with a gun to the head of the ukrainians. it is worth noting that despite what the russians say, they've got tactical groups surrounding ukraine, 500 combat aircraft within striking distance,

and 40 combat ships in the black sea. by the u.s. showing its own flag , it is not known to back down in this crisis. tom: you have done a real analysis of the cost of war. any kind of conflict would involve injury, great deaths, great damage. you agree -- do you agree? seth: i do agree. part of the issue is on what the russians do. if all of ukraine pushes to the border, it has the likelihood of creating significant cost not just on russia and its own economy, but on soldiers. the russians just try to take a slice of ukraine. we will see how nato and the u.s. respond. part of the answer to your question depends on how far the russians actually go in

conducting war. lisa: what kind of military altercation is russia prepared for, based on your experience from the special operations forces in afghanistan, just with military buildup? seth: we have 150,000 total forces composite about 50,000 belarusian forces. that is enough to invade at least part of the country. they have also been using a lot of irregular units and cyber operations, so they do have the ability to invade a big chunk of the country in the hopes that the ukraine government under zelensky collapses. that is a serious threat to the entire stability of ukraine. lisa: what do you make of the u.s. approach, which a lot of people are calling unprecedented, of releasing intel in real time to the population, basically letting them know exactly what the troop buildup is, what they are hearing, and the disagreement among the parties? seth: i think it is quite

helpful. the russians are the ones that have generally practiced historically to lead the narrative. what we have seen by the u.s. is getting intelligence out, and using commercial satellite imagery to verify with the administration has been saying. we can actually assess both of those things operating here. tom: what is interesting to me, and this goes to your book, you talk about irregular warfare. i thing my word for that is guerilla because i am the amateur. if russia prosecutes the role of war -- prosecutes guerrilla war, does ukraine have the troops to defend? seth: i think we have seen that the ukrainian population has demonstrated morale here, including ukrainian leadership.

they have some weapons to do that. i think what they will need is long-term support if that is what this ends up becoming. tom: what is the price if putin takes x number of square miles up towards belarus, maybe wrapped around belarus? let's imagine a line where they take some territory. what is the cost to him of doing that? seth: i think the cost to him would be, if he uses russian conventional forces, battle tanks, armored personnel carriers, helicopters, those can be shot down. you can use tank missiles to hit those tanks. that poses a serious threat. to use irregular units, that puts less pressure on putin because there's less likelihood

of dead russian soldiers that the conventional invasion would involve. jonathan: wonderful to catch up with you. just getting a headline i want to get your reaction to. it is tough to read this stuff at the moment, so i want to be delicate with the language. this says that the rebel leader in ukraine is saying that children, women, and elderly people will evacuate to russia due to an escalation of conflict at the contact line. how do you respond to that? how would you interpret headlines like this? seth: what it suggests to me is that we have seen it on both sides that contact line, that they are trying to move civilians out. what set suggests is combat operations, and we were looking at satellite imagery overnight of russian backed battle tanks in the area, so the russians actually have the military

footprint on the ground. this does suggest an increasing likelihood that there will be some kind of ground conflict. jonathan: thank you for your time this morning, seth jones of csis. your equity market story fades again, not even up 0.1% on the s&p. on the nasdaq, up a little more than 0.1%. according to the separatists comedy combat -- separatists, the combat is due for escalation. tom: looking at the ruble basket, we use dollar ruble at bloomberg, and i am going to use this very carefully, it is a spike of weakness in ruble right now, 75.80 come out to 76.20. that breaks the resistance trend. jonathan: equity futures just about positive on the s&p and the nasdaq. yields come in almost a basis point. crude is still lower, -2.3% to

$89.68. coming up, kelsey barrow, fixed income petroleum manager at j.p. morgan asset management. from new york -- income portfolio manager at j.p. morgan asset management. from new york, this is bloomberg. ♪ bloomberg. ♪

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jonathan: live from new york city on tv and radio with tom keene and lisa abramowicz, i'm jonathan ferro. let's get straight into the equity market. lower on the s&p, down .1%. the nasdaq just about holding onto positive territory. we got a bounce off of a scheduled meeting next week between anthony blinken and sergei lavrov. that was building conference. then we have rolled over. rolled over through the morning. according to interfax donbas separatists say women and children will leave for russia, evacuating women and children and taking them to russia. tom: no question. not to waste time from kelsey barrow, but the swissie show

stronger and goldbach above $1900. jonathan: yields in a couple of basis points. tom: will continue to monitor headlines. kelsey barrow has one of the toughest jobs on wall street. there is a guy named michael she has to report to end he is tough as nails. that means pro acuity. we do not talk about overnight index swaps comment that is massive inside fixed income baseball. it is something you see in chapter 23. kelsey barrow joins us from j.p. morgan asset management. what you are focused on is not the swap overnight insect -- interest swap -- translate for mere mortals. kelsey: the forward ois curve is a path for the fed funds rate into 2023 and 2024.

one of the things that is interesting about the curve right now is it is starting to invert so the market is pricing in rate cuts in 2024. this is unusual because the economy is still extremely strong. 500,000 average job growth per month yet we are seeing these cuts. the bottom line is this will continue until the market is proving wrong. they need to see the cut this is unusual because the economy is still extremely strong. happened, see the economy not break down as a result of higher rates, that is the only way you get the higher terminal rate. tom: for you and me, our world stops friday night at 7:00 p.m. i will have another drink but i have to read the j.p. morgan weekly prospects. for a lien company will publish tonight off of the fed speak today. can the fed speak today move your world? kelsey: no. this is what i noticed from the minutes. i know you do not like to read the minutes, but let me tell you what is not said in the minutes. jonathan: kelsey did her

research. kelsey: it is not what they said, it is the words they did not say. the words they did not say, transitory. transitory is drawn from the lexicon. the other words, gradually or steadily or measured. they have refused to characterize this cycle. tom: so you talking 50 basis points for sure? kelsey: if the market is allowing it they are going to walk through the door. jonathan: i talked to bob michele and he wants to see 50. what he said is what happens if we do not get a 50 basis point hike, he thinks we get an adverse reaction because the market believes we have not got control. what would you look for? kelsey: the market does not look to be surprised at the fed does not like to be surprised by the market. if the market is pricing in 50 basis points, the fed should

take that opportunity and go with it. they want the market to follow the data. over last couple of weeks we got the cpi report, we got the payrolls report. all we are seeing is the economy is still red-hot. unless jay powell walks this market back, if the market is pricing 50 basis points the fed should walk through that door. let's talk about credit strategy. what is it? kelsey: in credit we are seeing opportunities but we want to start focus on getting higher in quality and focusing on structures that are shorter duration. that is securitized credit, bank loans. we are looking at em local this year, which is interesting. you would think with the central banks on the move this would not be a good time for emerging-market local debt, but actually it has been one of the only areas of the fixed income market that has had positive returns. my observation is em central banks who were hiking like crazy in 2021 have had the foresight

and the diligence that dm central banks did not have and the ones that were hiking rates now have the question and are able to withstand more of the volatility with dm central banks moving forward. lisa: until a couple weeks ago the fed has dominated all headlines, now we are being distracted by the russia-ukraine conflict. there's been a huge divide into what the fed response would be and what the market response would be should the escalation continue to get worse. what is your view in terms of doesn't make it more likely for the fed to hike more quickly or rest? -- or last? -- or less? kelsey: we know treasury services safe haven. the seven to 10 year point is what will rally when there is a lot of uncertainty. when i look at the minutes they mention geopolitical tensions a number of times and they only

mention it in the context of higher inflation, upside inflation risk. i do not think this conflict is going to stop the fed from removing accommodation. lisa: this is the key concern for a lot of people relying on the fed as a put, maybe not exclusively, but what is the implication for market that could be torpedoed by an economy that is slowing in the face of these higher oil prices, in the face of faster inflation, but with a fed that does not respond? kelsey: the fed is in a challenging spot. we have been saying this for a while and it has not gotten any better. the fed will need to watch financial conditions closely. at this point financial conditions are still very easy. they watch that. i know they watch credit spreads. at this point, although they are wider on the year, there is not an issue with companies being

able to get the liquidity they need. tom: the committee expects it will soon be appropriate to raise the target range. the committee decided to have issue with companies being able to get the liquidity they need. tom:lunch. i am reading the minutes. this is more boring than i suspected. jonathan: kelsey came out with a call this year before everybody else, which is the ecb will hike this year. you said it in early january then week after week, everybody started to join in. what changes for the fed this time around when the ecb is set to get involved as well? kelsey: the selloff in u.s. treasury yields are not generally sustainable unless they are global in nature. it solace in 2014 and 2015. when the fed tries to go on its own the dollar strengthens, that tightens financial conditions, and the fed has to back down. the fact that all of the central banks are moving together is powerful. the ecb, sure. they are still a long way behind the fed. they want to see wage growth.

they have to and qe before they focus on raising rates. they are going to get there. the next shoe to drop, this is still far in the horizon, these are the types of things we are thinking about further out in the future, what happens with the boj and their yield curve targets, what happens when someone else comes in and we start to see inflation move higher? right now inflation is still negative but there's a lot of distortion. we still think inflation is still low in japan but we could be getting closer to positive inflation soon. jonathan: if he is the last man standing, what would drag him away from this? kelsey: in the near term he will stay put. we saw the bank of japan continued to defend their yield curve target, they are not in any rush. nothing is putting the same pressure on them. they strive negative inflation where they do not need to deal

with the headline of 7% or 8% inflation like the u.s. had. when you think about what causes a more meaningful repricing in term premium across developed market nations, you have to think beyond the u.s. and you have to think about the boj, the ecb, and all the moving together. jonathan: next time 1:00 fridays, we all read the minutes on bloomberg real yield. lisa: some of us read them on bloomberg surveillance. jonathan: kelsey, thank you ray much will some headlines from the president of russia. he says the drills in belarus are defensive and do not threaten anyone in says russia is not against talks on u.s. security proposals. the stance of the russian president right now. tom: it is. vladimir putin with the headline moments ago. a lot of headlines. kyiv just needs to discuss

conflict with separatist. in the minsk agreements. russia does not want to speak to kyiv, they want kyiv to speak to the separatists. jonathan: it has been quite a ride. we got a lift to the equity market initially after a scheduled meeting between antony blinken and sergei lavrov. that into negative territory off and interfax report that the separatists the president of russia is talking about are evacuating children, women, the elderly back to russia and away from the contact line. these headlines from the russian president settling things down again. we are getting whipsawed from headline to headline. the uncertainty is massive. the equity market -- reading this equity market is tremendously difficult. lisa: especially since oil does not seem to be responding and that seems to be one of the triggers of economic fallout.

the troop buildup in some of the less tradition or military forces, cyber warfare and other things, really does indicate the preparation for some form of altercation. that to me as one a lot of people are concerned about. jonathan: that was his interpretation. the russians to 90 plans to invade ukraine. futures unchanged on the s&p -- the russians deny any plans to invade ukraine. to weigh in on all this, looking forward to catching up with mohamed el-erian, bloomberg opinion columnist and queens college president. tom: he never talks to me. jonathan: that is because you're not very nice to him. you have to be kinder. you think kelsey will come back now. lisa: tell him you like the mets. tom: that is the problem. i do not like the mets. jonathan: he is coming out in 20 minutes. this is bloomberg. tom: maybe i will leave radio

and, hang out with you. leigh-ann: the u.s. now says russia has as many as 190,000 personnel in and around ukraine. it calls at the most significant military mobilization since world war ii. the u.s. has ramped up warnings of a possible russian attack on ukraine. russian officials say no invasion is planned. the irs is adding a second search team to expand its capacity to process u.s. tax returns after criticism from members of congress who say taxpayers are waiting for months to get the refund. the irs also outsources some functions to help file returns quickly. john deere has raised its outlook for the fiscal year, top earnings is boosting demand for the company's iconic green tractors.

deere says it has been refund. able to work around the global supply chain crisis. shares of drafting are following. the company added fewer customers than wall street had expected despite spending hundreds of billions of dollars to attract new gamblers. draft james is also forecasted -- draft kings is also forecasting a loss. bloomberg has learned traders at ubs -- the market took a hit. overall the bonus per for ubs employees will increase around 10%. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am leigh-ann gerrans. this is bloomberg. ♪

>> has we shift away from good spending back to social spending

, and services spending is not at trend yet, i think that takes off some of the pressure that has been felt on inventory. obviously the supply chains are getting resolved a little bit. tom: quite good yesterday. she is against consensus. she was adamant, forget about six or seven rate hikes. we will see where that stands as we go to the close at 4:00. adamant, forget about six or seven ratestay with blood bloomberg television through the day on fed speak. we now digressed to retail. we may be amateurs but we are certain it is original what we are doing retail america right now at every price point. steve sadoff invented much of what you perceive in modern luxury retail. i have always said he invented the word exclusive. he is now senior advisor to

mastercard -- former chairman and ceo of saks fifth avenue. it is extraordinary. it is about rampant price increases at luxury. have you ever seen this before? steve: i have not seen it in years. the luxury sector is strong. you saw growth in the mid-40's, you saw price increases right and left stop obviously they have supply chain cost indexes but they're pricing at margins, in some cases above margins. this is not just a high end luxury. i think accessible luxuries are seeing a lot of increases in pricing and the consumer is paying. the high end consumer wants to spend money on themselves. international travel is way down and they want to treat themselves. they have been stuck at home.

you are seeing it come about in terms of luxury spending. using it broadly in terms of overall spending. i thought you might start to see a slow down in january, but the reality is the consumer is strong in january. tom: let's take this wider. i go to feldman at dana tall sees group who said home depot is getting it done. home depot is not tiffany's. with that said to we miscalculate the slow down, and can you say to growth will be better based on what you see at mastercard? steve: right now i am seeing a strong consumer. you saw 7% growth in january, you saw high single-digit growth through the holiday season, and this was across segments of the consumer. it is in store as well as online. online has grown 60% at the beginning of the pandemic. brick-and-mortar is back, people

are back at the department stores. i do not know if i see that slow down coming. clearly you have the child tax credit, you have the markets volatile, you have rising interest rates. are there clouds on the horizon? of course there are. the supply is starting to ease. i think you're in a situation where inventories have been online. if inventories start to rise you will get back to discounting in the fall. i worried about where the consumer is going. it has not shown up as a weakness yet. lisa: is the signal different from the low income individuals and the high income individuals? steve: i do not think you have seen it yet. because you have support programs running through january with child tax credits, i've not seen that bifurcation. i would expect you start to see the middle of the market, the

lower end starting to take a hit as you go into the year. year. obviously the high end market is volatile stop right now it has been holding up well. if you look at whether it is the dollar store or the outlets, they have been holding up well. luxury holding up well. department stores have had the best performance in years. 10% growth through the fall season. this is an economy where the consumer has been booming. you do not have people traveling, you do not have airlines. hotels are still constrained. people have been buying stuff. there is still pent-up demand relative to the availability of some categories. i would expect to see it continue for a bit but there are certainly questions about what happens into the middle of the year. lisa: i was doubting apparel sales were up nearly 40% in january, which is a -- i was noting apparel sales were up

nearly 40% in january. are there certain areas that are driving the spending that will fade back? what do you see for the composition of consumer expenditures? steve: i think we are in an apparel moment. people have been pent up at home and wearing sweatpants, now they want to get out and they are going to events and parties but not addressing the same way they used to. it is not the same suit you are wearing. you want fashion but you also want comfort. there is a whole new styling going on. those tend to last for several years. my guess is the apparel sector will hold up well in the next year or so. that is what i feel good about which could be good for the department stores and it could be good for specialty apparel retailers. the restaurants, the travel will start to recover strongly as we

move from pandemic to endemic. tom: steve state of with master -- steve sadove with mastercard. the lead story, moving the swiss franc to a stronger swiss franc, vladimir putin and his neighbor in belarus. the one headline, i will let you decide what you like. lukashenko will decide with putin on my presidency. that is a stunning headline. lisa: also lukashenko discussing economic sanctions with vladimir putin, vladimir putin saying he did not pay attention to invasion reports. there is a question how they will message the imminent seat of the invasion with the u.s. pushing that narrative and russia pushing against it. the market reaction is interesting. we saw some concerns about individual citizens, nonmilitary

personnel being moved out of some of the rebel territories in ukraine. interfax reports. the interesting thing to me as we saw an immediate response and equities, rolling over, how much people are ready to respond if there is an altercation this something that indicates how much people are not pricing that in. tom: i will go to the ruble which pulled back from the good news of last 12 hours, back to where it was 18 hours ago. i want to look at the curve flatness of the united states, the panella curve, the 210 spread, nowhere new the angst of monday and tuesday, but nevertheless the curve flattening harkens back to where we were 24 hours ago. it will be an extraordinary weekend. lisa abramowicz and i and jon ferro would like to say thank you to our team, project leave the efforts to give you this

morning seth jones. a spectacular day of international relations. the story continues on bloomberg radio and bloomberg television. good morning. ♪

jonathan: we are giving up the overnight gains. from new york city, good morning. your equity market dead flat on

the s&p. "the countdown to the open" starts right now. >> everything you need to get set for the start of u.s. trading. this is "bloomberg: the open" with jonathan ferro. jonathan: live from new york city we begin with the big issue. whipsawed by headlines. >> the headlines have been flowing fast and furious. >> markets are clearly up and down. >> struggling to connect the dots and understand how bad this is. >> development in russia and ukraine. >> this is a big airpark bit of uncertainty. -- a big air pocket of uncertainty. >> if russia does invade ukraine all bets are off. >> another region the federal be careful.

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