>> the fed has now understood that it has been behind the curve and needs to step in. >> the fed will bring down inflation. >> despite the tough talk, i don't think they will really go beyond neutral. >> this hawkish rhetoric from central banks around the world is not going to stop anytime soon. >> if we look into 2023, the story of slowdowns then is because of the hiking of interest rates. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: live from new york city, for our audience worldwide, good morning. this is "bloomberg surveillance" on tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. futures down 0.8% on the s&p. the situation in china shaking things up big time. tom: i think china really has a profound impact today, but there's also some real nervousness not about the

weather companies like coke moments ago, but lots of other companies on what they will deliver. this is a tape with a lot of nuance that needs to be followed tick by tick. jonathan: just how low is the bar for big tech? tom: i'm going to channel dan ives here. what a great value he has been to "surveillance." there's two worlds of tech out there. i strongly agree on that. you've got to parse each and every company. are they in the profit makers, the structurally sound makers, or are they not? jonathan: coca-cola out just moments ago. lisa: they just slammed expectations. earnings-per-share coming in at zero dollars 60 one cents versus the expectation of $0.58 -- at zero dollars 60 one cents versus the expectation of zero dollars -- at $0.61 versus the

expectation of $0.58. companies can pass along the price increases to consumers. is this a good or a bad thing for the fed? tom: i'm going to look at the bloomberg here. don't quote me on this, but coca-cola we pandemic was 38 billion dollars in revenue. they are modeling something like $43 billion. at every company i got to go back before february 2020. jonathan: the ceo saying he's confidence in the full-year guidance. at least someone is competent in the outlook for 2022 >>. lisa: how much is this because they are such a big company, and the biggest companies are doing the best with consolidation in a way that small companies do not? jonathan: he believes

that if elation has peaked, the revenue story has peaked, the earnings season has peaked as well. that is the mike wilson view. tom: i read every word of it. he has been right about some real caution on the market. he goes overweight big pharma, biotech, which i think is important, but you are absolutely right about the conflation of nominal and real analysis led by the dynamic of inflation, and it is a lot of moving parts. i like how he says not a grizzly bear market, but a grizzly market. jonathan: let's whip through this price action. on the nasdaq 100 we are down 0.8%. on the month we are down about 10%. what a move lower. lockdowns and shanghai. will they spread? that is the story this morning. big move on dollar-yuan. euro-dollar struggling, not what

you would expect after the election result in france. tom: -- lisa: i thought it was almost a guarantee we would come into a stronger euro because emmanuel macron won, and here we are the weakest going back to march 2020 as china rears its head as the main story of the day. today we are going to be focus very much on earnings. we got those coca-cola earnings, and the shares were up momentarily even after posting such a big return year to date, more than 10%. we also get activision blizzard in about half an hour. the first of the slew of big tech, and whirlpool after the market. let's whip you through what we are expecting. we've got meta on wednesday and apple and amazon on thursday. we will be looking at any hints of supply chain disruptions, particularly of chips and from the iphone in china. 8:30 a.m., u.n. secretary general cutera's meets with

president erdogan ahead of the trip to see vladimir putin later in the week. at 10:30 a.m., the beginning of a lot of economic data this week. u.s. dallas manufacturing activity for the month of april setting up for what i am really watching, which is sales, personal income, personal spending, and core pce which will come on friday. core pce expected to come at the fastest pace going back to the early 1980's. again going back to that mike wilson note, how does the federal reserve look at peeking inflation? does it matter, or if it does not come down all that quickly come are they really going to have a very difficult decision to make? jonathan: they are meeting next wednesday, may 4. thank you. the gnostic 100 is poised for its worst month coming all the way back to november 2008. it has been that long since we have seen the nasdaq down 10% and a single month. that is where we are right now. sarah hunt of alpine woods says, "we think parts of tech will eventually be looked at like staples is none of us can live

without our phones or our internet. sarah hunt joins us now. are we there yet? sarah: i don't think we are quite there yet. we are still in that knee-jerk reaction of rates are going higher, growth is slowing down, so cell technology. you have seen some of the tech stocks hold on pretty well. in that sense you could say that maybe it is there. i think the earnings are going to be important, but it is what they say about the future and the problems we are seeing out of china that is going to be important for any of the hardware makers. if you just think about technology in general, we have to start thinking about parts of it. tom: i would say a 29.77 vix is not catharsis, but did you see elements of catharsis thursday afternoon and friday afternoon? sarah: what we saw friday was pretty much across the board selling. i was looking to see if there were any areas you could see any

money to work doing anything else. it's felt very bad in the last month or so, every time you thought you were getting a bargain. it feels like you got a better chance at a better bargain a few days later. so i think it has become very tough as we go into the fed and earnings season in some of the tech stocks, but the story in china is really different and really bad relatively speaking to where we were expecting it to be two or three weeks ago. so i think that is definitely weighing on the other headwinds the market is facing, which is both the fed and a potential consumer slowdown because of the higher energy prices we are seeing. lisa: i don't envy your job, especially when it comes to the commodity prices we are seeing. issues in china are dampening demand on the others. how do you reshape a commodity view in light of the renewed weakness over in china? sarah: ironically, the fact that

china is slowing down may help the inflation story a little bit read it may give the fed some room to not go as far as they want to go or think that they keep saying they are going to go. but i look at a longer-term picture on energy and say we still have a big cap between what we expect to do in transition into other fuels and what we actually have on the ground right now, and i think you got some demand on the commodity side that gets weaker because china is catching up to the fact that the supply has not been invested in deeply enough, and i think that is when you're going to have longer prices for a longer time. jonathan: sarah hunt, thank you. on that point, morgan stanley put out a note in the last week or so and said essentially that the demand outlook is not good. oil demand is likely to recover more slowly than we previously expected, but this is more than offset by weaker supply outlook driven by russia and iran which is why they upped their price target on brent crude to $130

from $120 for the third quarter of 2022, on the supply story, not on demand. lisa: the interesting thing is they are not alone. they'll have the same story. even energy traders. yet all of the traders cannot make those bets because of margin calls and other issues at some of the clearinghouses because of what happened with nickel, because of what has happened with respect to the volatility. so how accurate of a reading are we getting in real time as the release of the strategic petroleum reserve really dampened prices in the near term? that is a fascinating dynamic heading into the next quarter. jonathan: we are getting a warning on demand this morning, that is for sure, after the events in china over the weekend, where reports are suggesting that citizens are getting penned in in certain places in shanghai. the fear is that could spread to beijing. the fact that we are still doing this two years down the road, covid zero in china, that is weighing on the outlook for pretty much everyone. nomura aggressively cut the rate forecast on gdp.

they said, "open to rapidly slowing frequency data in april and signs that beijing is unlikely to end its zero covid strategy we have cut our annual gdp growth forecast to 3.9%. " tom: it will be original if the fed and other banks can raise rates, the major economy banks can raise rates into those kind of statistics. in terms of the market and with the vix at a 30 level, i was really remiss on this last week, which is 12 months trailing and what the markets are doing. you know we get this off the wei screen on the bloomberg. we are sort of back to the malaise here of dow flat, spx up 2%, gnostic 112 months trailing, -8%. jonathan: always thinking about what is new, and what is new in the price action is this move in the chinese currency. there were a number of times last year where the economy did

not look good, but the chinese currency kept hanging in there. this time around it is five days of weakness for the yuan, the renminbi. to see a 1% move on the currency pair, that is super rare. tom: it is on the pacific rim as well. you see it in asia dxy, which is asia without japan, and it is a four standard deviation moonshot for the bloomberg dollar index from april fools' day. jonathan: it is not just the chinese currency either. pound sterling, 120 seven. just rip roaring dollar strength out there right now. cable, -1%. from new york city, coming up, gene tannuzzo, can emily a thread needle -- columbia threadneedle global head of fixed income. he will join us in the next hour. ritika: keeping you up to date with news from around the world,

with the first word, i'm ritika gupta. in france, emmanuel macron has won another shot at convincing europe's that his plan can work for them. he beat nationalist marine le pen with more than 58% of the vote. he acknowledged that some of his boat came from people who wanted to keep le pen from winning. it is the highest level u.s. visit to ukraine since the russian invasion. secretary of state antony blinken and defense secretary lloyd austin met with volodymyr zelenskyy in kyiv. bloomberg has learned elon musk met with twitter executives sunday about his takeover offered. the company is said to be turning more receptive to that $43 billion bid. the offer includes backing for morgan stanley and other financial institutions. twitter has previously considered thwarting that attempt.

the price of oil fell below wonder dollars in concerns that luck and china would hurt global demand. -- fell below $100 on concerns that lockdowns and china would hurt global demand. private equity firms including kkr and cbc capital partners are considering bids for toshiba. toshiba's management and shareholders have been at odds for years over the company's future. 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. ♪

jonathan: some breaking news for you. the offer from elon musk, $54.20.

the price now getting close to it, up more than 5%. twitter said to be on track to reach a deal with elon musk as soon as today. according to a source, they are in the final stretch of renegotiations. they may ink a deal as soon as today if these talks go well. they also say the deal could be delayed or fall apart. this coming after a report over the weekend that elon musk met with twitter executives over the weekend. twitter, $51 $.65. we are up by more than 5.5% in early trading. tom: i go to the terminal and the acclaimed bq screen and look at price to sales. twitter is such a growthy story, and so much about hopes and prayers and all the rest of it. we all know this ballet. i really don't go to profit metrics. i just want to know what the price to sales is. i've got a working number of 7.69% at a price of $48, now $51, $52. maybe we will get to eight times

sales. jonathan: the price action spoke for itself. this market did not really think we would get anywhere near a deal. that has changed over the weekend. elon musk met with executives come our story this morning. we are now trading in the 50's again. lisa: that is the most significant part, regard us of what happens. it seems like the twitter board is fighting less and engaging more, and this is a change from initially when we heard about the offer. this might not be a hostile takeover the way a lot of people expected at the outset. jonathan: ed ludlow joins us on the phone. he's been following this closely for us. what has changed over the weekend coming into this week? ed: a lot. it has been a busy weekend -- jonathan: i think we might have lost ed ludlow briefly. take a beat and we will come back to you in just a moment. $51.51, up more than 5%. as we said over the weekend, elon musk reporter lee met with twitter executives.

that story first reported by dell, "the wall street journal." our story reporting that twitter mayi -- may ink a deal as soon as today. tom: morgan stanley supposedly involved in that. using that change the dialogue? jonathan: let's get back to ed ludlow. run me through it. ed: tom is exact a right. over the weekend, elon musk held calls with key investors. he met with twitter executives. this is him playing his best hand according to sources, trying to sell his best vision of how he changes the twitter platform, how he boost revenues. he's being really active in this, and it is just how it played out over the weekend. he has his bankers working the deal. he himself was working the deal. according to a bloomberg source, if all goes well, something good come later today. tom: how important is it that

morgan stanley is reportedly involved? they have a huge tech history out there. these are names people can become dribble with. how important is that in the banker to banker chat? ed: crucial because of all of the parties involved in this. elon musk is trying not to just secure the debt financing, the 25.5 billion dollars part of the deal, but also investing equity partners, high net worth individuals. he has to convince a lot of folks that he wants this deal to happen. lisa: not only that he wants to deal to happen, but that he has financial interests at heart when he talks about the deal. he talked about how he wanted this for the idea of free speech, not necessarily an economic interest. that does not sell to investors, does it? ed: no it doesn't, and you are exactly right, there's a key piece according to sources that contradicts that, which is in the powerpoint presentations, which has shown there were slides about how he lands to

boost revenue. this was a question for twitter, how they monetize the full potential of the platform. they have very modest topline numbers compared to some of the social media giants they compare with. how is he going to approve that -- going to improve that? apparently that was a big part of his selling. lisa: you talked about the $25.5 billion in debt financing. of the equity investors, how much is elon musk himself backed by tesla shares that could be put on the line should this bid go through? ed: that is really important. elon musk only has $3 billion of cash and cash equivalents as part of his net wealth, so one hypothesis was that he would sell down some of his tesla stake to become more liquid. he has other options. according to sources and our bloomberg reporting last week, he could front $5 billion to $10 billion of that by selling down tesla shares or even some of the things he has another businesses like boring or spacex.

the names we have been talking about across private equity are still there and are still being mentioned. silver lake already has a seat on the board. it will be interesting to see how that remainder of the financing plays out. jonathan: do we know what elon musk's plan is for the platform? ed: concisely it is four buckets. the first is that he wants to open source the algorithm. he's constantly complain about bots. a lot of bots tend to reply. he wants to get them off the platform. there's been a big question about, for example, president trump, band for the platform. elon musk has said he does not believe in outright bans, but perhaps timeouts. i was going to see a yellow card in rugby or football. i know tom is going to kill me for that one. the third bucket basically being democratizing the platform. i talked about open source of

the platform, but i think he's pretty fed up with the content moderation uncertainty, that he basically tweeted a few days ago it is the far left on the platform in the far right on the platform that are annoyed, you know your policies are any pretty good -- are in a pretty good space. jonathan: ed ludlow following the news on twitter. "the wall street journal" reporting that perhaps we could secure a deal this week. our source at bloomberg indicating we could reach an agreement as soon as today if negotiations go smoothly. twitter in the final stretch of negotiations about a sale to elon musk, according to a person with knowledge of the matter. here we are in the premarket approaching the offer price which is for $54.20. a turnaround again, getting closer and closer to that offer price from elon musk. lisa: assessing the value

themselves, so they can go back to elon musk and say it is not high enough. i thing it is fascinating that is pitch to wall street got so many investors on board. i wonder how much that is a game changer for the board. if it is not just elon musk coming at it alone and going rogue, if he's coming in with real wall street money, does that change the nature of this bid? jonathan: fair to say that someone who won't be supporting the bid perhaps is bill gates, given the tweed over the weekend. did you see that? lisa: oh my goodness. absolutely low. he came out again and talk about how he's not going to be distracted in the same kind of way. if you want to describe the tweed, you can go ahead. jonathan: i will take a pass. he's not exactly taking a low profile as he negotiates this particular deal. futures down about 0.7% on the s&p. on the nasdaq, down 0.8%. a massive week for big tech this week. we will hear from microsoft and alphabet tomorrow. earnings from facebook on wednesday, apple on thursday. the main event this morning, a shakeout off the back of what is

happening in china, the lockdown spreading potentially from shanghai to beijing. that takes treasury yields lower and crude lower. twitter up more than 5% in the premarket to $51.50. that gets your attention. from new york, this is bloomberg. ♪ ♪

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jonathan: live from new york city this morning, good morning to you all. a shakeout in the equity market worldwide starts in china, bleeds over to europe, and continues stateside. futures up on the s&p 0.9%. on the nasdaq 100, down by more than 1%. the worst month for the nasdaq 100 potentially going all the way back to 2008. tom: since time began. jonathan: thank you for that, tom keene. romaine bostick with some moves this morning. romaine: the selloff we saw last week appears to be continuing on this monday morning in the premarket. on friday you had about 97% of the member's of the s&p 500 decline, the biggest percentage we have seen going back to november 30. that is a key date because that was the date most people thought the fed turned hawkish, when

powell give that testimony before the senate committee, saying it is time to retire the word transitory and speed up potentially the rundown of the balance sheet. three of the top five weightings in the s&p 500 lower on the day off of 2% plus declines on friday. all of these complete reporting earnings this week in the set up pretty brutal. soft, amazon down double digit percentages on the year so far. apple down about 9%. keep in mind we are also going to get a few others like alphabet come as of the potential for some volatility here heading deeper into the week certainly going to be in the cards not only because of the hawkish pivot by the fed, but as you mentioned, some of the concerns about potentially additional lockdowns and china. if you are looking for a bright spot, there are about 12 s&p 500 companies in the green this morning. twitter being one of them, those shares higher by about 4.5% after the latest bloomberg news report saying that the twitter board is in discussions and potentially near the end of the discussions with elon musk on that $54.20 bid. it does appear that they might

be warming up to that. we should point out this is the closest the shares have actually traded to that since that bid was announced. the real pop came when musk first disclosed that past estate , but they have been drifting in a holding pattern as a lot of investors do not want to fall for the okey-doke. something keep an eye on as we get deeper into the day. tom: into an oven for earnings week as well. for the third or fourth time since the beginning of the pandemic, they come into an 11 level on the amount of reserves to his stic -- amount of reserves statistic, the rrr, for china. we get a get move right off of this. jonathan: quite a move on the currency pair on dollar-yuan. it is the fifth straight day of chinese currency weakness, something we have started to see this year more recently.

something we did not see last year. tom: in any case, making it up as you go, particularly wrapped around covid. subadra note -- subadra rajappa knows that at societe generale. on a monday morning, and i have called it recalibrate monday, everybody is readjusting into the equity market, and i would suggest your world always leads. if i am in the equity markets, what is a single sentence i need to read from socgen fixed income this morning? subadra: the fact that you have the fed next week is going to be really what drives market sentiment for a good portion of this week. for the most part, the market is fully priced in for a 50 basis point hike at next week's fomc meeting, so it is going to be a little bit of an adjustment. a lot of news like you mentioned

earlier on china, as well as developments overseas with the elections in france, so it is not a whole lot of fed news that the market has to adjust to. it has more to do with events happening this week as we are fully priced and for what to expect from the fed next week. jonathan: how do you think investors would internalize a potential rapid slowdown in the chinese economy, something that perhaps we did not expect three or four months ago, maybe even a 3% handle on china gdp? how do you express that with the federal reserve determined to hike rates? subadra: that is a very good question because it is a very difficult needle to thread get they want to fight inflation, but a slowdown in growth is going to be very impactful, especially in a country like china. if you are going to see a mini full slowdown in growth there, it is going to reverberate through the rest of the world. for the most part, the u.s. tends to be somewhat isolated. i think the effect is going to be much more felt in europe. but broadly speaking, i think

meaningful growth in china is going to be a concern for the u.s., and that is kind of what is already in the price if you look at the flatness of the curve. the market is really concerned about a stagflation environment where the fed has to raise rates and push front end yields higher, but that growth might ultimately falter, and that is really where the difficulty comes, when the fed starts to thing about adjusting monetary policy. that is why i think they might raise rates close to neutral, but it is going to be hard to go well beyond that this year. lisa: what is neutral, subadra? subadra: the fed's expectations of neutral is around 2.25% or 2.5%. i think getting there at the end of the year is going to be pretty challenging. they might be able to deliver 50 basis point rate hikes in the next couple of meetings, but beyond that, the trajectory for growth, the fed is going to be

able to continue to raise rates aggressively, especially given the fact that they are going to be unwinding the balance sheet quite aggressively during that timeframe. lisa: we are talking a lot about asian currencies really losing value and watching the yuan today not really gain back or pare some of those declines. we talked about the japanese yen depreciating and how that would influence treasury yields, that it could lead to a lack of buyers from japan into the u.s. market. how much is that an undid -- an unintended consequence of some of the curry move -- some of the currency moves because of what we are seeing in the dollar? subadra: i think that is an important consideration. throughout the course of this year i would say that treasuries have not looked attractive on a currency adjusted basis, but what i am more concerned about is yield curve control. you are starting to see the beginning of the end, starting to see the market push back

yield curve control. if japan were to make any adjustments or sort of step away from its easing monetary policy stance, if long end yields start to rise off the back of that, that could be a catalyst for higher yields in the u.s. it does not have to necessarily be capped from demand coming from overseas accounts, but if global bond yields continue to rise, that is going to push treasury yields higher as well. tom: i did something this morning. i cannot remove or the last time i did this. i believe i had no gray hair. i looked at the bloomberg total return index over full faith and credit, credit, corporate credit rather, and the high yield. these are bear market statistics. does your world understand they are in a bond bear market? subadra: it is interesting you bring that up because last week we kind of sat down and looked

at returns in a variety of assets, not just bonds. equities are also down 10%, bonds down 10% year to date, so in some respects you are looking at investors, maybe the best trade to do for investors is to move into cash because investors are looking not just in bonds, but also in risky assets. so this is sort of a transition or a phase to figure out what the fed is going to do, where the markets are going to settle in. i think the near-term strategy should be towards perhaps moving some of your holdings into cash because you're going to see negative returns across the board in risky assets, as well as in treasuries. jonathan: great timing to catch up with you this morning, given what is going on in china. what on earth does that mean for this treasury market? over the weekend on credit, morgan stanley up in quality. the emphasis from them.

tom: i read every bit of that note. it was interesting to see wilson come out for the same shop and really dovetail on where we are. they use this word relative, relative to what? what is interesting in a bear market, all of a sudden relative analysis becomes absolute analysis, which is omg analysis, like omg, i am down that much? jonathan: with mike wilson, i think what he's talking about is you could get some relative outperformance and absolute down market, but what he is looking for now is some real pain at the index level, and that is the bear market you have been talking about through this morning. on the credit side, where morgan stanley was interesting is that they were ok with credit, ok with default risk. they thought this year was good enough. the way they were doing that was just through leverage loans. leverage loans over high yield, the rate story pays into the leverage loan story, but

ultimately they are ok with credit, so take that risk. that is the preference they have closed out over the weekend, and that is probably the key move. lisa:lisa: we talked about interest rate versus key credit risk, and they are saying the pain has come from a resetting of the fed expectations of how high rates could go and how high inflation could go, not based on the idea that companies would default in the near term. default rates are still very low. that has changed, not necessarily that they see defaults surging, but that the interest rate story has been baked in, people have gotten a sense of what the fed is going to do. now we are going to talk about a slowdown, and that has to reset some of the corporate credit worthiness that we see right now. jonathan: i heard the same thing from goldman. i caught up with their credit strategist over the weekend. they are looking for the same quality story. twitter up by about 5% in the premarket off the back of our story suggesting that we could have a deal between twitter's board and elon musk as soon as today. tom: i have never looked at his

twitter feed. he's got more followers than you. i had no idea. 83 million followers. jonathan: he's got things to say about a range of issues. tom: he's got a retweet on spacex. jonathan: is there something oc want to bring my -- something else you want to bring up? tom: you were talking about bill gates. i missed that story over the weekend. lisa: let's not. tom: thank you, lisa. [laughter] lisa: i will give you an out. jonathan: a picture of tom keene in the evening after a long meal and a lot of drinking. tom: my word. did you hear that mom let's not? it was a certain tone. [laughter] let's not. jonathan: the alpha price, $54.20. tom: let's quote the dow. jonathan: let's not. tom: let's not. [laughter] jonathan: this is bloomberg.

ritika: keeping you up to date with news from around the world, with the first word, i'm ritika gupta. bloomberg has learned twitter is on track to reach a deal with elon musk on the $43 billion takeover offer as early as today. still the talks are set to be fluid and a deal could be delayed or fall apart. twitter had previously considered supporting that attempt. u.s. secretary of state antony blinken and defense secretary lloyd austin met with ukraine's president volodymyr zelenskyy in kyiv sunday night, the highest level visit since russia invaded. the u.s. promised ukraine more military aid and said they cannot attempt a repeat of the war. in france, voters have given emmanuel macron a second term, winning more than 58% of the vote, but his 17 point margin was barely half of what it was back in 2017, and many voted for

macron just to keep le pen out rather than because they are enthusiastic about macron's vision. a rising number of cases in beijing has sparked jitters about an unprecedented lockdown of the capital area policy makers are trying to avoid a shanghai style crisis that has already wreaked havoc. 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. ♪

>> i believe that we share the same resolve, which is to tame

inflation, which is to use all the tools that we have to do so, but we are facing a different beast. jonathan: christine lagarde, the ecb president come on cbs. they are way more exposed to what is happening in china relative to the united states, and there is a slowdown building in china with the potential of lockdown spreading from shanghai to beijing. that shakes things up in the chinese equity market, shakes things up stateside. we are 0.8% lower on the s&p, down by 0.9% on the s&p 500. this month has been absolute brutal for the nasdaq 100. big story in the premarket is twitter, up more than 5% in the premarket at $51.70. did trade at $52 very briefly. came close to that level, then backed away. tesla also bit lower off the back of some of this, down by more than 3% as we report today that we could reach a deal as soon today. tom: i would suggest that that markdown from $54 down to $52 or

just under is about normal. there's always a little bit of squishing us there. jonathan: came very close to $52. closing this one up is going to be very interesting. i am fascinated to see if he can close a deal and if -- and what he is going to do with it. tom: michael nathanson is scheduled somewhere this morning. right now on china and the challenges, critic of death -- kriti gupta. kriti: we've got to talk about this potential for a beijing lockdown. here in the states and across commodity markets, something to keep in mind is what this is doing to the apple -- the actual stock market. how cheap is cheap enough to buy the debt? we are looking at the msci china and x going all the way back to 2007, and looking at their pe ratio. we are doing something a little fancy here, using standard deviations. the p/e ratio has dropped one

standard deviation. it speaks to just how much weakness is in the stock market. " surveillance" has been talking about the week offshore renminbi. when you look at the cheapness of this market, is it enough to catch that did? right now -- that bid? right now, it does not look like it is. tom: joshua sharfstein joins us now, vice dean of johns hopkins bloomberg school of public health. of course, mr. bloomberg, his acquaintance with this network and television program as well. i calculate flu on 50,000 deaths as 137 deaths per day. you presume that we are on a migration to a flulike statistic? dr. sharfstein: we could be.

i think that is exciting, of course. we are seeing hospitalizations start to creep up in this country, and with that, deaths will probably turnaround too and start to go up. i think this is from this ba-2 very end. so i don't think we are on a one-way path to the 100s, but it is possible that we could get there. a lot depends on the virus and a lot depends on us. lisa: how do you understand what is going on over in china, the fact that they are not moving away from covid zero, talking about deaths and talking about trying to contain the spread of something that we all know was uncontainable once omicron came into the picture? dr. sharfstein: what is very interesting is in our country, we have a lot of people unvaccinated. they tend to be younger. our highest vaccination rates are among the elderly. it is the opposite in china. in china, some of the lowest vaccination rates are among the elderly, and they are very

susceptible to severe illness, and even those who have been vaccinated with just one shot, it is not necessarily the best vaccines. but having said that, i can't argue that they are between a rock and a hard place because locking down an entire country of so many people to prevent the spread of a virus that is incredibly infectious is a battle that is very difficult to win. lisa: based on your experience, how much of a vulnerability is it when you put that kind of strain on a health care system with isolating people who might not be mortally ill because they have covid at a time when there are people with other problems? do we have a sense of what the non-covid mortality rate is when you put that kind of stress on a health care system? dr. sharfstein: i think what they are doing right now is not

stressing the health care system. they are trying to keep the virus from spreading so they don't have so many patients, and perhaps they are concerned that they don't have the health care system to take care of it. but you are right, by those kind of extreme measures, there are all kinds of consequences. you are talking a lot about the economic consequences, but the mental health consequences, the other health consequences are pretty severe. it eventually just can't continue this way because the virus is always going to be out there, so they will be in this perpetual state. so something has to give, and we are just going to have to see what happens. jonathan: joshua sharfstein, great to catch up with you, sir. so much going on this morning, just to process what is happening in china is a big effort. then the twitter story overlaid on top of everything else. it's look at twitter and the premarket. a shift higher comedy stock at $51 70 cents, up more than 5%. reporting over the weekend started with "the wall street journal" that hollande musk was meeting with twitter executives. reporting suggested we could reach a deal as soon as today. and then backed up by reporting

for mortars -- from reuters. this is about as close as we have come to it so far, $51 90 eight since early in the session. tom: i got price to sales again, and this is really rough off the bloomberg. we've got a lot of moving targets here right now. let's call it twitter eight times, a rich valuation. i thought snap -- i got that wrong. 10, maybe 11 price to sales. this to huge valuation. facebook meta is four times, five times sales. this is a rich valuation for twitter on acquisition given where instagram is. jonathan: clearly there was a shift over the last week when the board started to take things a little more seriously, as we got more and more detail about the financing behind elon musk's offer. lisa: if they are bringing in the big beam as investors of wall street into the deal, they believe we do not necessarily have a rogue actor in elon musk

who simply wants to use twitter as a mouthpiece or a vanity project. it has to be something more. if you're dealing with some of these players are yet what i find interesting is if they see top value in $54 20 cents without negotiating further. what does that mean in terms of the deal that other wall street investors are getting? how did he convince them that that was the right sprite target for something that seems fairly unquantifiable right now? jonathan: it is the only offer on the table right now, isn't it? do they think people would come in and make a similar offer, something bigger? given the fact -- lisa: given the fact that we are talking about how every tech company wanted a media platform, why not? the fact that there were not other bidders tells you a lot, given that they are considering so closely the softer after saying he were going to fight it and it was a hostile takeover. jonathan: how many big companies using there are that could close that d1 get past the regulator? lisa: that is a fair point. jonathan: elon musk slaying solo with an offer.

i am fascinated to see what he does with this company if he can close it. futures at -0.8% on the s&p, on the nasdaq down by 0.9%. good morning to you all. the situation in china shaking up this market worldwide.

>> i think we are going to end up living with more inflation. >> stagflation has two parts of it. you've got to focus on the stagnation as well as the inflation. >> many consumers are going to falter even further under the weight of what is likely to be more interest rate hikes. >> i don't think the markets should take comfort in that. >> this is still an economy that is operating above trend that can be resilient to some shocks. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone.