fed. >> yes, demand has got to slow down. >> that demand destruction will happen at some point. >> the question remains really, can the market still go higher? announcer: this is "bloomberg serveillance: early edition" with john keene, jonathan ferro and lisa abramowicz. jonathan ferro, lisa abramowicz and tom keene, we welcome you on the radio and television to a city in shock. so much to talk about. there is only one story in the city of new york, and that is the shooting on a subway. what we want to do is start the morning in a bit here. really, pushed aside in new york city by the signed of sirens through the night.

lisa, what an exhausting night. lisa: exhausting after a series of crises with the pandemic trying to revive, trying to get the subway back to where we were, creating the stealing of what is next? john: you see a lot of tense phone calls, i witnessed that personally in real-time yesterday morning. the city is in shock this morning. kailey: you could see anecdotally yesterday, the lines for ferries, for buses as people either could not use or were avoiding the subways. it raises the question, this is just the latest in a series of events. up 44% year-to-date, raising the question of what does eric adams do from here, and what of the biden administration do from here? john: of course, he is recovering from covid. lisa has an important brief on an ornament -- incredibly busy

day, equities are the lift, 23.78. the headline story for me is the dollar, and you see dxy out to new recent strength. most importantly, the yen finally shows the weakness many have expected to see with dollar-yen one part of that trade weight. now, the euro weaker as well. foreign exchange really front and center. lisa, advise on the morning. lisa: it is actually a really busy day, this is where we get the earnings kick off that we've been waiting for. we are not sure exactly when it will come out, probably by the 8:30 a.m. call. this follows a pretty big drop in gp more than shares -- jp morgan shares today. the market wavering around. how much does it look ahead to

the economy during the rest of the year? does it highlight consumers who are trying to pull back because prices have gotten too high and they are not willing to pay them? data follows the cpi yesterday. the headline number yesterday came at about expectations but it was read as below expectations because of that core figure. what we see from ppi expected to surge well above 10% year-over-year? how much can we see the war in ukraine affecting prices, affecting outlooks, and frankly, what does that mean in terms of profit margins and in terms of prices for consumers on the other side? the bank of canada's meeting at 10:00 a.m., i am actually watching this pretty closely. you are seeing the yield surge to around the highest in a long time and the idea that people are looking for a 50 basis points rate hike as well as

balance sheet runoff. the first of the major market banks to do this. how much is catching up to the fed as opposed to the dollar story? basically, anything that other central banks to is actually catch up. john: if you look at the litmus paper of the global system as foreign exchange, particularly in the imf world, our trip tomorrow to speak to the managing director, foreign-exchange is a signal of the system and it is as simple as that. lisa: that is what a lot of people are great about right now. it is there to look at the imf meetings as frankly, a platform where they are going to say what are we going to do about higher food prices, about the inflationary input? john: thanks so much. we welcome all of you on bloomberg radio and bloomberg television we touch on the violence in new york city. but we must remember that there is so much other violence.

the city moves on on a wednesday morning. of course, the new york post on the crime watch. three dead, at least 12 wounded in the series of new york city shootings. all of that, after 4:00 p.m. yesterday. on the specific crimes yesterday. at this time, what was the key observation you saw yesterday? >> the armed police presence, that just comes into how much police presence there is. there is a rule that officers have to conduct routine checks everything the morning and the problem here was that although those checks were conducted for this particular station, which for our international audience, is significant, this time around, there were no officers present and on top of that, surveillance cameras malfunction. john: let's get an update on

that, you and i have all heard the sirens nonstop. we are looking for a person of interest. where is he? >> we don't know that, and we also don't know what his connection is to the actual gunman right now. it is a very specific person of interest, frank james, 62 years old, connected to the crime scene by a rented van key that has the dresses going to philadelphia and milwaukee. john: we are going to talk to mayor adams today, and i have got to start with the attention to detail. for whatever the history of crime is, london has almost five times as many surveillance cameras as new york london, way behind china, a totalitarian regime, i get that as well. but was there a shock in the supporting of cameras that cbs news since were working, but the electronic into digital distribution of those cameras let out failed?

>> one of the other issues was how are they going to address that problem? the first reaction was where is the new york city spending on infrastructure when it comes to these subway stations which, to be frank, are crumbling across the city. in one of the questions were how is the police going to target the absence of these surveillance cameras? the way they did that was through social media, good old-fashioned knocking on doors. that is why you saw a 20 lawn perimeter and a 17 block spread out when it comes to tracking down a person of interest. >> lack of maintenance, some of the increase in climb -- crime post-pandemic, the difficulty in doing so given the budget deficits as well as just getting people back to the offices and getting people back up and running. how much is that a part of the story right now? >> right now, new york city is dealing with a return to work and in a lot of ways, it is lagging some of the other major

cities in the united states when it comes to coming back in the office. when you have this work from home infrastructure, the other part of this equation, specifically this particular region of brooklyn, if you don't mind me going into demographics, this is an asian american and hispanic neighborhood were 29% of the people in the neighborhood are under the poverty line. if you shut down the subway station for even an hour, there is a massive economic cost, especially at rush hour. the question here is one of economic impact and when will begin these subway lines back online? >> thank you so much. i would love to get your sense of how much the washington community is focused on this, not just from the perspective of new york city, but in terms of crime and bidens perception of overseeing a nation where crime in cities is going up at a significant pace. >> just about a month ago, the white house put out a fact sheet

talking about how crime has gone up and gun violence has gone up. this administration has constantly called endemic of gun violence in this country and after the shootings in colorado and georgia that the president told congress desert losing on to pass legislation, you are also seeing it from the hill to the white house. a number of individuals, even democrats, especially the likes of senator chris murphy of connecticut recently had an interview with politico where he spent a lot of his time after the devastating sandy hook shooting in connecticut on trying to pass gun legislation, asking the administration to make this a more urgent issue. we are leading up to the midterm elections. this will become a focal point. >> you mentioned sandy hook, sandy hook changed nothing in the legislature. this is just one any series of mass shootings we've already seen in the united states. is there really going to be any support for more bipartisanship on this issue? does one more shooting really

matter? >> is a great question because america has been here before, time and time again. sandy hook was just one of them. it is almost countless and hard to recall how many shootings there in an america, and yet legislation does not change. so, this will become definitely a midterm issue, especially as democrats who are much tougher on gun control and want to outlaw guns will try to make this really a home issue, and especially this will become an issue for suburban women, especially individuals like mothers who want to make sure their children are safe at school and are not going to be in the streets with lots of runs. tom: we will continue this discussion this morning. i noticed in chicago, the number of deaths last year, 797 homicides. certainly front and center this morning.

the mayor of new york scheduled to be with bloomberg surveillance later this morning. there will be some interesting, tough questions. much to speak of, constructive equity take. in the bond market, a constructive chernoff of the inflation shot yesterday, 2.80 down to 2.73 on the 10 year yield. the news this morning for global wall street, the yen finally gives away with international ramifications. the ministry of japan speaking on that matter in the recent hours. please stay with us this morning, this is "bloomberg surveillance." >> keeping you up-to-date. the biden administration is preparing and military aid package.

stockpiled that congressional approval. speeding up delivery during an emergency. police and new york are searching for what they call a person of interest in the shooting at a brooklyn subway stop. 23 people were injured, 10 of them shot. no suspect has been caught. detectives are looking for a man called frank james. police don't know if he was the shooter. in the u.k., inflation jumped more than expected to a 30 year high. higher inflation is on the way. a 54% increase in energy price caps. the international energy agency, china rheem poses lockdowns to contain the spread of the

coronavirus. plus, a number of members led by the u.s. have released oil from their stockpile. the world's largest seller of luxury goods defined disruptions from the war in ukraine. it says the strong revenue growth is up from 23% led by louis vuitton and -- 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. this is "bloomberg. loomberg.

♪ biden: are not going to wait to take action to help american families. i'm doing everything within my power to bring down inflation. tom: the president of the united states managing a message around 8.5% inflation, a statistic trend that maybe gave a lift to the market tomorrow. nevertheless, president -- president biden with policy plate office wednesday. very quickly here, blackrock out, i love the way they show organic growth. double-digit atf. it is an interesting stew, isn't it? lisa: the etf don't always indicate how much dominance the earnings have since a lot of those are not necessarily high income.

kailey leinz and i were trying to understand why first-quarter net inflows were $7.5 billion versus the estimate of $36.1 billion. you can see shares up about 3/10 of 1%. that came at $9.52. tom: we will tear that apart with a number of employees of blackrock. let me get that up here. 18,000 employees versus a quarter million for many of the big banks. right now, the conversation of the day on the equity markets, benjamin joins us. do you reaffirm your sterling three-year call of april market in equities? >> i think so. i think the surprise has been how resilient equities have been. you see what has been thrown at them, i think they have held up very well.

from here, we are really spring-loaded with just a little bit less bad news. i don't think a little bit less bad news, whether that be what we pointed on the fed, whether that be on inflation, whether that is on oil prices, you tend to make most of your money quickest and markets and i think that is the narrative for this quarter. tom: your morning note is piercing. i have to go to it. governor officials in japan talking the yen. you are up on the table pounding your feet saying japan is the forgotten market. how cheap is japan equity right now? >> it is pretty much the cheapest of the major equity markets. definitely a value case to be made. authorities may be concerned about the cases that weakness,

but i'm sure they are secretly applauding the level of this week yen to really help the export competitiveness of japan, really helping corporate profits, and traditionally helping japanese equities. he sort of put together, this cheap valuation, more competitive currency, this is the biggest economy and equity market in the world, and we never talk about it. i think for those who might be scared off by risks, whether it is oil, whether it is ukraine, japan has a lot of the positive characteristics without an awful lot of the baggage right now. lisa: tom asked it with a good question earlier, how long can the dollar remain ascended before something breaks? >> the dollar has been on this remorseless grind, and we have certainly seen the dollar rally historically. i think we are probably coming

to the end of it right now. when you look at the two ingredients of this, this risk off aversion and a hawkish move by the fed which i think we have priced an awful lot in here. i think we've probably seen the worst. i think you've seen sort of the most of the move. similarly, i think that goes for this remorseless dollar move we have seen so far. lisa: the focus by and large has been on these broad macro issues, the war in ukraine, the hawkish monetary policy response on the part of central banks. it is going to start getting more micro-with jp morgan reporting just a half hour from now. how low is the bar for earnings this season? >> luckily, i think it is pretty low. i think we are set up for another one. the markets, looking for

earnings to fall 5% versus last quarter. remember, these are normal earnings, despite all the inflation, despite the real gdp growth, despite the reopening economy, despite corporate passing on a lot of these cost increases to you and i. i think the bar is set very low. i think we are easily going to be fat, and i think this is a key reminder that actually, life is not quite as bad out there as maybe would like you to believe. i think this is one of the ingredients of the less bad second quarter and i hope markets respond positively to that. kailey: how much of your call that things are about to get less bad for equities are predicated on things being less bad for the bond market? as week -- have we seen the worst and fixed income to put more pressure on the equity market? >> on broader equities, but

really it has been a big rotation. it has been a big rotation into slightly cheaper areas of the market. i do think we've seen the worst of the bond movement, at least in terms of the speed. the fed is controlling both the short end of the yield curve but also increasingly the long end of the yield curve with unprecedented balance. tom: i have to leave it there, too short a visit. congratulations on the mother of all calls coming out of autumn of 2018. lisa, we have hardly touched on ukraine as the focus on new york city. we continue to monitor this search for an at-large person of interest in new york city. i want to go back to the napoleonic wars and drag it forward. you can do that with sweeney. this is a stunning report of a

sweden and particularly the political party against joining nato and other defense issues. finally throwing in the towel and saying yes, they speak of a parallel process within went to the east between sweden and russia. lisa: you characterized it well, they were the holdouts. the social democrats coming out and supporting inclusion in nato, highlighting how much of an about-face nato has really done given the war in ukraine and frankly, the offensive of russia and this is what a lot of people have been saying is one of the most miscalculated aspects of vladimir putin. he said that nato would not come together and it has been exactly the opposite. tom: you've been following this story, and it is not just about ukraine, there is a huge debate across the baltic sea, isn't there? >> there is a question of how much there still is over risk.

what threat is posed to other countries? does this get closer and closer to native territory? what is the response then? tom: sweden, social democrats favor applying to nato in june. in about 20 minutes, jp morgan earnings.

tom: good morning. "bloomberg surveillance." lisa and i will be in washington tomorrow. the conversation at the international monetary fund. we steel ourselves as a director 44 page letters from j.p. morgan. futures up 14. vix at 23.76. curve steepening up. 33 basis points from the panic. email lisa abramowicz. oil up. $106 on brent crude. gol at $1983 an ounce.

american airlines talking about 16% revenue under what they had a number of years ago. delta airlines out with numbers. more on this with helene beck er. we begin bank coverage. ken leon. they have done the heavy lifting for us over recent quarters through the pandemic. we just had ben with the single best call on the bull market i have seen. i went to christmas eve of 2018. mr. diamon delivered 14% plus per year. that's almost borderline miracle given the pandemic. how did jamie dimon do it? how'd he delivered 14% total return per year in this fractured bull market? ken: we are talking about great

management. great to be here today. jp morgan will continue to outperform its peer group over the next few years. the worry is the outlook for the next quarter and the rest of this year. to your point, the balance sheet has been the calling card for jp morgan to endure in the toughest times and outperform in the best of times. tom: i see ken leon, something about fortress income statement. when in doubt, cut costs is the mantra of banking in america. are we going to be surprised over the next coming days with cost sensitivities? ken: there are new forces underway, disruptors in the market from fintech. when jp morgan's stock went down

that's because jamie dimon was going to double up and inves in hiring people and technology. that will be a delicate dance he has. it is a bank that has to keep its pulse on the future, which means investing in technology and boosting operating expenses. lisa: are people going to be looking at the granularity of investment in tech and the idiosyncrasies of a specific bank in the banking world, pours it about the consumer and heading into recession? ken: i think you hit it on the nose. we know on the wall street side the first quarter will be difficult compared to a year ago. main street, it's about the consumer and small business. it is the health of the household and whether they are able to endure rising inflation

and the pressures that go with it. this will be a conversation about if i am a bank, may be low quality is still good because we are not seeing that. investors want to know if there are any changes or cracks as it relates to the consumer, because middle class and lower class americans are suffering now. lisa: what have we priced in considering jp morgan shares are down this year? ken: it is reflecting the bearish view we have a higher chance of going into recession next year and stagflation. jp morgan outperformed the market until the middle of february. the russian invasion of ukraine, but also questions with a rising rate environment, fed tightening, and moving from quantitative easing to tightening, this may not could be good for banks.

lisa: as we talked about the possibility of a recession, the health of the consumer, what are your expectations on loan growth and loan loss provisions? ken: good question. going to the consumer side we expect loan growth will be higher, possibly 3% to 5%. personal loans, 2% to 3%. oil loans, lack of inventory is down. on the commercial and industrial landscape there is not a distressed industry. last quarter that was up 5%. mid single digits again for commercial loans. lisa: if we can go back to the investment banking side, obviously we are expecting the dealmaking activity was weighed down by geopolitical risk in the first quarter. what does it look like going

forward? ken: the pipeline is the optimistic view. you need to take actions to close up or down significantly versus a year ago. what we need to see is more ceo confidence. i can relate to needing capital for the business or m&a. we also need to see, particularly in equity underwriting, a calendar for ipos moving ahead. the more niche area, spac's, is really done from speculation last year. the underwriting will be positive year-over-year. tom: i look at the executive derby and the splash yesterday about succession plans with mr. dimon. who is behind mr. dimon? it was behind mr. moynihan?

you get a sense it is an ok night -- organized succession derby or does it allude to what we see on the tv show "succession"? ken: these are really more stable families. it comes in fits and starts as far as what we talked about. jamie dimon has a great lineup of executives below him. particularly with women. jane fraser first. we will see more of that over the next year coming across large banks. they are very capable and it's an exciting time for leadership. tom: i want you to address what apple is doing. it was 10 his ago we have the fintech splash with apple. they took an academy award. they are building six football fields in culver city to take over hollywood. are they taking over zip codes in manhattan?

ken: is apple or amazon interested in the banking industry, that was part of jamie's comments. the large banks are going into more direct competition. with entertainment that might be a positive on the banking side. there is all these encroachments of banking. lisa: you are in delray beach. you are dealing with a situation in mass transit in new york city. there is a question about occupancy and the office space we see in midtown. how much of a going to hear from banks doubling down on new york city as a financial center? kicking off of jp morgan working on a new headquarters. ken: i don't cover the office real estate market. jamie dimon will say we are moving ahead with building a new

headquarters on park avenue. they own it. goldman sachs owns their building. in this real estate market things are going to be lower occupancy over the next few years. the hybrid model, remote employees such as myself. this changes the game for a lot of the real estate. 30% of construction in the united states happens in manhattan. tom: wow. ken: trophy buildings will get tenants. it is what happens with the vacancies. it is difficult to move them into residential or even into becoming warehouses for amazon. tom: we love ken leon. stay with us as we see jp morgan earnings in six minutes.

, we have much to talk about we have much to talk about. 14 banks reporting. lisa and i will be in washington with the managing director of the international monetary fund. lisa, this is a huge deal. finland with comments on vladimir putin. this goes back to 1939 in the winter war, the 800-mile border between finland and moscow. this is the real deal. finland steps up. lisa: talking about this nato decision as well, saying they will not necessarily move in the same kind of weight on the same kind of timescale as sweden, but doubling down on this idea of joining nato in tandem. how much is this a united front to try to protect their borders? people taking a look at how close it is getting and at what point does it to the needle. tom: please are headlines i would have never imagined seeing, yet there they are.

comments from sweden and finland. the baltic states reaction as well. mr. putin has a small spit of land in the vicinity of lithuania where he has a naval exercise but with no land access to it as part of the calculus of the eastern baltic sea. we will give you a data check. we will come back with ken leon. it is rumored that sonali basak is in the building and she will give us some color on fortress dimon. i would notice dollar, dollar, dollar. mr. dimon has to deal with a strong and descendant dollar. in moments the earnings of jp morgan. ♪ >> keeping you up-to-date with news from around the world. police are looking for someone they call a person of interest in the worst attack in the

history of the new york city subway system. 10 people were shot and 13 others hurt in the early morning attack on a train in brooklyn. detectives are searching for frank james. they say he was at the scene of the attack. president biden has ramped up his condemnation of russia's invasion of ukraine. he defines it as genocide. he stood by his comments. the u.s. is preparing the package of $750 million of military aid for ukraine. janet yellen says others are sitting on the fence to punish russia. she said the coalition will not be in different to actions that undermine the sanctions.

-- needs to raise rates. policymakers could lose credibility. another president says the fed should raise rates to the area where they neither meet up or slow down the economy. imports on effectively fell and growth slowed down. the first drop since august of 2020. exports grew 14.7%, beating estimates, but slower than the rise of the first two much of the year. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪ . ♪

>> inflation is high. inflation is too high for the fed's comfort level.

all members have said the same thing. i don't think this actually changes things much. tom: there is a comment from seth carpenter of morgan stanley on an inflation report. adjusting for mr. carpenter as well. jp morgan, spot on with earnings. following a bang up report from delta airlines, which is maybe the spirit of america in the pandemic. ken leon is with us from cfra. futures up 18. what is jp morgan doing now? we go to sonali basak and her first blush of the headlines. 78 headlines in three seconds? sonali: the good news is trading is better-than-expected, both in fixed income and equities. the bad news is provisions from low losses are higher than expected. as loans are growing they are

going got a slightly slower clip than in the fourth quarter. 5% growth in average loans. that compares the 6% last quarter. are they going to go where wall street was hoping? tom: let's cut to the chase. every report i have is dealmaking is flat on its back. is it? sonali: debt underwriting, where jp morgan is the behemoth, that's going to reach $100 billion this month. that is after the first quarter. the jamie dimon outlook on whether corporations are preparing their war chests for the tough times ahead will be -- tom: do you see anything in these headlines that 200 40,000 people will become 230,000? sonali: they are increasing

headcount. jamie dimon did telegraphic calls ahead. how much of those are variable? the question for jamie dimon is minimum wages. he said in his letter the government should be increasing minimum wage across the board. when we asked him the same question at bloomberg television he said maybe. are the costs going up across the board for his employees continuously, or will he hold them stable? lisa: shares are down about 1.6%, from a low of 2% and going up 1.2%. the banking sector coming under pressure, especially in the lookahead given the fact people are worried about rising costs. $2 billion versus $2.1 billion. given the fact the shares are down 16% this year and the knee-jerk reaction is lower, what is the datapoint wall street is watching? sonali: the stock is not

reacting well to the numbers. it shows they are more worried about the loan story. investment banking. the pipeline will be important. let my sources are telling me is that people are prolonging deals. they are going to go back to looking at them later this year, perhaps september when things settle down a little bit. without that worry about investment banking the loans and the not growing and the worry about the outlook of the consumer will be in overhang. jp morgan trades at 1.5 times earning. that is more expensive than the other banks. it is that -- is that fair value? tom: thank you so much. ken leon has had time to digest the earnings report from the most dominant bank. sonali mentions the book value. compare it to the absolute train wreck which is european banking before ukraine, during ukraine,

however you want to frame it. then it is the overlay of the big banks of america. ken leon, let's begin with what the evidence is in the quarter report that jp morgan leads on ratio analysis. ken: they do. we talked about rising rates over the last five years. the only bank that had higher net interest is what the banks were in 2016. they are obviously able to grow the banks. that is not the problem. the issue is, you need the extra kicker from investment banking. it is just noted that might be on the sidelines until the second half of this year. lisa: on that front, light investment banking for jp morgan. what is the readthrough going to be for the investment banks of tomorrow? ken: we will set them down with income from equity underwriting and m&a down 20% to 30%.

there is hard to find any leading deals right now going into a more optimistic second quarter, which is why given the uncertainties you have to put that aside and say, where is that going to be spring for the banks? you have to go back to the traditional lending area to make sure they are in good positions. tom: i want to go to the share buyback with tim cook and apple. charles peabody was out front on this with you. 6, 7, 8 years ago. are we in the full-blown use of cash flow at these dominant banks where they will buy back shares? ken: that is the full case. we are months away from the federal reserve approving the capital plans of the banks being over capitalized. we have further from jamie dimon and others. we will see significant dividend

increases or buybacks. the only risk is who will be the vice chair for compliance and regulation at the fed and whether they have a direct view -- differing view about capital ratios, the return of capital. maybe not this year but possibly the risk for 2023. tom: ken leon, thank you for helping out this morning. we will continue with through through the week. lisa abramowicz, you look at the five-year dividend growth of jp morgan ascending out of the great financial crisis. it says dividend growth at 15 percent per year. lisa: not necessarily the same growth story overall as a company it used to be. the fact you are talking about the cash use as being share buybacks as opposed to investment. $30 billion of share buybacks is a pretty intense number, especially from the interesting data coming up. the first quarter

earnings-per-share came in at $2.53. there is that miss coming in from the investment banking and other areas. i want to point out this issue. first quarter of loss provisions were up $902 million. due to inflation. how will they deal with inflation when they're not getting the revenues from the investment banking units, from the trading units they have relied on? tom: i look at this and we lose the scope and scale of jp morgan. we were talking about 18,000 people at blackrock. jp morgan has 10 times the headcount. 271,000 employees at jp morgan. the last time a look at that number it was 260,000. they seem to be hiring. what do you need to know about this story? delta airlines with a boom report. mr. dimon saying better

than good across his view of american banking. it is an ascendant dollar this morning. yen, 126 handle. stay with us. this is bloomberg. ♪

>> inflation is high. inflation is too high for the fed's comfort level. >> inflation is a product of demand and supply. demand has got to slow down. >> it will happen at some point. >> the economy looks good. they have run way to do so. >> can the market still go higher? >> this is bloomberg surveillance with tom keene jonathan ferro and lisa abramowicz. tom: good morning. mr. ferro on sabbatical but kailey leinz joins us. sweden and finland make history talking about joining the eu and nato. is a huge deal with finland. we have weak yen. the dollar is in a churn off the

inflat