challenges now. >> inflation is stickier than we anticipated that's possible the fed has to be more aggressive. >> our central bank is a much more tighter and willing to hike rates than anywhere else in the world. >> could be worse if the fed moves fast. > this is bloomberg surveillance. jonathan: live from new york city for audience world wide, good morning, this is bloomberg surveillance live on tv and radio. futures are negative 7/10 on the s&p 500. tom: picking up the debris off the shocks we saw on apple and amazon in the way they were looking at 4:35 p.m. last night. with the recalibration and the tech earnings, recalibrating to get us into the early hearts of

the summer and the number one word this morning is uncertainty. jonathan: that's for sure and those two names, amazon and apple read life into everything everyone is worried about -- breathed life into everything everyone is worried about. amazon this morning and early trading is still down almost 9%. tom: it's interesting to see what the sell side says. citigroup rim -- maintains optimism with rice ticket of -- with a price tag of 54. they are looking for a lift in the stock. they are saying this is a recalibration short-term with a maintain of all that optimism long-term. jonathan: that seems to be the consensus on wall street this morning. it's somewhat of a perfect

storm. they believe that from here the news is causative. lisa: many would agree because you have the impulse from china with the stimulus there and the year-over-year inflation coming down. there is structural issues here physically with amazon and how much they built their warehouses and hired people, can they support that footprint in a post-pandemic economy at the same time as all the issues are happening. lisa: the revenue numbers from apple were great. jonathan: and then came the alpha. that's where the problem is. lisa: 4-8 oh you dollar charge due to supply shortages, those slow down and shortages would not show up in their current numbers. going forward, this will be a problem so how much is what china did overnight going to offset that? jonathan: what did china

actually do? lisa: nothing. jonathan: i've heard this twice now in a week. lisa: they said we will support investment and every connie but we will still do lockdowns -- our economy but we will still do lockdowns. jonathan: let's see if they actually do something. good morning, we are down 9/10 of 1%. crude is up as well. lisa: crude is an increasingly political story. we will get a slew of big oil reports from chevron, exxon and phillips 66 before the bell within the next couple of hours. gasoline prices have come down from the recent highs but not that much and they are still hovering near highs north of four dollars. at one point is this become a political talking point.

7:15 a.m., we get to speak with the european central bank chief economist who will join us as we deal with some inflation data and economic data out of europe they came out about an hour ago, showing inflation at the fastest rate on record. gdp growth, order overcoat are to quarter of 0.2%. how they look at this and say we can support growth but we are also supporting a euro that's been pummeled in the face of weakening more broadly? what is the balance they are looking for. we get personal income and spending for the u.s. today at 8:30 a.m. and then he university of michigan survey at 10:00 a.m. we know fed chair jay powell has been keyed into this as a sign of looking at how much inflation has ramped up. jonathan: looking forward to

that this morning. tom: the only equivalent in recent fed history would be john williams in new york. jonathan: cpi 7.5 percent. core cpi in europe still has a three handle. tom: you are killing me. you know how i feel on this. i have trouble with the parsing of inflation data. i'm sorry, what does it mean for the households? answer is the big number, everyone is getting crushed by core cpi. jonathan: amazon is down seven 5% . tom: jonathan: let's start with

the earnings. can you reconcile the earnings in america with the worry over the future? >> you can talk about the wall of worry. we track 34 markets and only seven over the past week were up. the market is very worried now. all of the issues from the companies you talked about will way on the u.s. but it will affect what happens over the next three months. tom: are you looking out over the uncertainty of a rising earnings and focused on the gloom? do you just look out beyond that? >> we try to look young that. beijing is trying not to go into lock down. they announced people can go back to work but let's say you

want to be positive, be very careful what you wish for. if it's going to be a 2009 credit cycle than supply chain issues especially commodities and inflation may impact that. you ain't seen nothing yet so be careful what you wish for. lisa: how much could we see oil prices surge in the face of that stimulus in addition to the likely band that germany is backing on oil coming from russia? >> pick a number. i'm looking more at iron ore. iron or and copper in the australian government said iron ore should be longer-term. even the chinese agreed with this. for go back to it 2009

situation, china will not do this. the aussie will be stronger. oil is going to be impacted as well stop is that what the world needs now? we want to see chinese need to cup. lisa: is that harmful to the growth outlook? >> careful what you wish for on the demand side. the chinese can go out and spend right now step to go to the european capital and the u.s.. there is a $200 annual deficit that is not going to the world economy now step actual activity will be difficult.

jonathan: china issues should be worry in the june quarter and subside in the december quarters when we get a new i've known. it's been said that china issues are not a reason to panic on a non-demand issue. is this the quarter of big worry? >> no, i don't think it is. the drivers of the worries from the war to policy and zero covid policies, they are extending well beyond the course of this cycle. if the fed sets out a clear policy path over the next quarter, it's possible we could get information from the ecb. then we could see the current rhetoric from policymakers and lawmakers where there is no sign

of it yet. jonathan: awesome to catch up,. apple outperform ratings, $200 rice target. tom: i'm going to go to the fa screen and look at the price target of these juggernauts. we don't understand the growth we see here. apple ebita is showing balance sheet adjustments. the growth is staggering from 76 large to an estimated 133 large this year pre-pandemic outs to this year, those are numbers that the mind cannot grasp. jonathan: those numbers are huge. lisa: however, if you get any kind of decline, what is the valuation this time when you

reinvest what the cost of money is? this is the concern and what i've been struck by whether we're talking to the gm ceo or hearing from apple is the idea worry about china. how do we know it will subside and how do we know this by chain disruptions will get resolved? we've been talking about the imminent resolution of these kinks in the chain. jonathan: it's been three years now. tom: that's the pandemic, apple up 40% annualized. jonathan: that's not bad. tom: don't get me going. jonathan: that's what i'm here for. tom: this is generational, this is a statement of american excellence in technology, tim cook looked at the apple people and they were worried about the product and tim cook said be the ball. jonathan: sounds like a man was very long apple.

caddy shack last night. jonathan: this is bloomberg. lisa: china's coming leadership has ignited a market rally. they have promised to boost economic stimulus and to deal with the worst covid outbreak since 2020. they said the a 30 should keep the economy going in a reasonable range mr. guarantees by chains in key sectors. inflation in the euro area has climbs to an all-time high. consumer prices rose 7.5% in april from your go. that was in line with estimates and numbers will raise pressure on the european central bank to end the crisis and raise interest rates. russian forces have pounded target from one end of ukraine to the other which included kyiv which was attacked while ahead

of you united nations was visiting. russian troops receded -- this is a change after russian troops receded a couple of weeks ago. analysts told investors that elon musk might need to sell stock to cover the equity version of the deal that he personally guarantee step he pitched to bankers before the twitter deal was done and mentioned job cuts and weight the cash flow. global news, 24 hours a day and on bloomberg quicktake powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg ♪

>> let me be clear, we will not let russia intimidate countries out of this crisis. we will not allow them to use oil. jonathan: equity futures are down by the s&p bite seven/10 of 1% on the s&p. amazon and apple are not exactly writing high this morning. we will catch up with the chief economist of the ecb in about an hour from now following cb i at 7.5% euro-dollar and a 105 handle. that's a rarity. earnings from chevron and aps

coming in later than expected. the estimate was $3.44 but net income profit is the biggest profit since 2012. tom: they don't hide it and i give them rate credit on this. it's a huge incentive to hide it but they come out and say that compare and contrast with their obligatory comments on the tragedy of the ukraine. i love the per barrel idea. they have it in a clear paragraph, it was 40 something per barrel. you see it in the income which was a huge move. massive operating leverage to a six billion dollar profit. jonathan: the team at bloomberg is breaking down the numbers. we are only investing as much as

half in new projects compared to 10 years ago. if you look at the output of chevron, they expect overall output flat to 3% this year. that's what's getting politicians in washington pretty annoyed step tom: tomorrow night in washington at the white house correspondents dinner, i will read through jp morgan's dissertation on oil. jonathan: you are just the life of the party. tom: absolutely. emily welcomes -- emily wilkins will be working the room. maria, i've got to give deference to emily wilkins with the release on oil. just as simple as i can, how many minutes is it until the left stands up and says we need a windfall profit tax? emily: what they are really

focused on now is the ftc and altering their t2 look at some of these major oil and gas companies and look into whether there is some sort of price manipulation going on. nancy pelosi and chuck schumer were clear that this is the path they have decided to go on in terms of holding oil accountable. that's their message to the american people and that's why gas taxes and gas prices are so high. tom: maria todeo, is this war so grim that we don't see it in the zeitgeist of the western media and that the fighting is so difficult that we are almost removed from it because of this violence? maria: we don't and i would agree. every time i see ukrainian officials they say that. given the fact that they have

weapons coming into the country, the nature of the war will change. ukraine is on the defensive now but they believe if they get more weapons, they can now go on the attack and reclaim some of the attacks the russians have taken away. potentially, this is a war that will continue until the end of the year. for the russians, they have two weeks left to make some gains in the pressure is on the russian troops and generals to get vladimir putin something he can present on that national day parade may 9. when you look at russian tv, they announced this openly. not just a war in ukraine but a war on nato and we are moving closer to world war iii. you hear this repeatedly every night on russian tv. lisa: what about other television stations across europe?

what's your sense of how people are getting increasingly worried about some baroque moved by vladimir putin if he doesn't make those gains in the next couple of weeks? maria: everyone is concerned about this. we have seen the fighting has gotten very aggressive and this is why they are prepping other sanctions which could potentially include oil. yesterday kyiv bond and the united nations secretary-general is there. the more pressure there is on vladimir putin to deliver something, the more aggressive they get step there is a lot of concern that we are perhaps not paying attention to the situation in moldova. this is still an issue and we are seeing it play out been moldova this time. lisa: we are seeing a $33

billion proposal from president biden for ukraine for military equipment. how much support is there to pass this bill? emily: there is a lot of support in congress from democrats and republicans. because there is so much support, democrats are trying to add additional measures to the bill. president biden called for additional covid aid to be added to the ukraine eight. congress was about to give $10 million for vaccines but that got held up because of an immigration issue that republicans tried to attach the bill. that's the title 42 that keeps popping up. it's to restrict migrants crossing the southern border. that's supposed and next month and republicans want to keep it in place and that's mixed into all of this, meaning this ukrainian aid that has so much i partisan support could be delayed or stalled if it gets mixed in with these other

issues. at this point, we know what the request is but we don't know what the legislation that congress will take up will look like. something we will be looking for next week. next week, the senate will be here and they will move on this but the house will not begin in d.c. which means the soonest we will see some legislation will be about mid-may. jonathan: thank you. next week will be about monetary policy. we are looking or a 50 basis point rate hike from the fomc. tom: whatever you think about gdp, that will be front and center but we still had to that there. i haven't looked out to may 4 but there is more information today. jonathan: the earnings include

3.4 billion dollar charges associated with russia for exxon but we will dig into those numbers in just a moment with futures down 3/4 of 1%. this is bloomberg. ♪

jonathan: big oil in america is making more money than god and is not share -- it is not shy about it. chevron just had a huge buyback and we will catch up with the white house making noise about it. we are down about8/10 of 1% on the s&p 500 stuff to names make up about 10% of the index. they breathed life into everything everyone is worried about now, supply chain issues in the pandemic payback. the apple numbers were not that the outlook for the current quarter is enough to drag us down 2.7%. the apple numbers for the last quarter were better than good.

that captures your concerns right now about this economy. let's talk about your pet well and that will be the focus as well. we will catch up with the ecb. the euro is stronger today and yields are higher again on the german to year. tom: as we speak to the ecb in a bit, how does he discreetly trade german inflation versus any other kind of inflation? jonathan: how does he treat what is happening in the fx market? we know it matters. tom: are you paid in euros or sterling? jonathan: i am paid in u.s. dollars for seven years now. lisa: we need to talk to phil today. jonathan: come on, it's u.s.

dollars. is that helpful? tom: are you done or do you want to continue? jonathan: i am very much done. tom: on the passing of the great ned johnson, we speak of the visceral nature that was fidelity. abigail johnson has done the number one class act of following a giant in the industry and it all started with the visceral treatment of securities, analysis and technical analysis. there is a physical short room with little bitty pins and sheets of paper and we are joined this morning. is the chart still there? >> it's still there. 27 years ago when i was hired,

my last interview of the process with -- was with him. we spent countless hours just pouring over the little trends. tom: did peter lynch go in the chart room? >> yes, everyone should look at charts even if you are a hard-core fundamentalist. the charts will tell the narrative. tom: we all agree on that. what's the most important chart right now this historic uncertainty? >> a long-term chart of the dollar index is in wharton especially the broader dollar index. it's not at the levels it was in 2014 and long before them. all the components that make up financial conditions whether it's equityp/e or real rates is one of the most charts because

that's what the fed is trying to drive in terms of trying to slay this inflation dragon. we are in a ready interesting part of the market cycle. where it ends and what needs to rake if anything, how it ends is something we are trying to come to terms with. lisa: what are the charts telling you now that we have a significant majority of the major tech and other companies reporting earnings? >> this is the crucial component of the overall map of the stock market. we know we are in ap/e the fed is trying to slow the economy by raising the cost of capital for everybody. the stock market is not immune to that. you look at discounted cash flows and you calculate the present value of future cash flows.

earnings are being reported pretty well. they percent of companies so far are beating estimates and 200 companies out of the 500 have it so far. using the weekly bloomberg numbers i look at, the estimate for this year is rising from 10-11% so far and that's important because that goes into the numerator. the cost of capital is the denominator and that's going up as well as rates right everywhere. it's a toggle or with price intersection of a falling p/e earnings. lisa: that's the map but in english, we looking at a better or worse outlook the next 6-12 months then we saw before this earnings season? >> earnings estimates are rising and not just for energy. energy is the obvious place to look for that. when you look at the 11 sectors,

estimates are rising across the board. there has not been a lot of erosion to the profit margin that you might expect coming from the inflation numbers. coming -- company seem to be passing along the increases in costs. tom: it safe financial crisis and we are in double-digit return. don't we owe ourselves a single digit year? do we need to pause in 2022 into next year just to take a breath within the system? >> yes, the 1994 cycle you remember during the greenspan days, there was no transparency so he just did what he did. that was a cycle where after a decent run, the market had to sit around and do nothing year and it went up after that. tom: do you go to cash when you

do nothing? the giants of fidelity and the others, they went to cash like nine or 10%. >> know, if you are running an equity fund, it's not an allocation fund. there could be rotation so if you are are going to grow in a slow growth environment and falling valuation environment, utilities and staples become part of the mix and went inflation is running hot, energy and maybe financials are in the mix. it depends on where we are in the cycle but generally speaking, when we talk to the broader investors, timing the market is a tough thing to do. you have to get out at the high end get in at the low we saw during the pandemic cycle when the market was down 35% five weeks and roared back how difficult it is to time those

exits and entries. have a broad and diversified port folio is probably still the best way to navigate this. you are right, the market doesn't always go up. it only goes up 60% of the time. if you can write it out long enough, the long-term return is about 10 or 11%. lisa: what's your biggest conviction over the next six months? >> it's about the terminal point for the fed cycle. we are all thinking the fed will go 50 next week and then another 50 and another 50. it's important because the markets have already priced that in. real rates on the 10 year went from minus 1.52 zero so the fed is in warp speed as far as trying to get to neutral and passed neutral so the terminal point is the affordable part and

when you look at the libor curve, it peaks out that -- at 3.5 percent next year and comes down a little bit. that relationship, the two year model is inversely core rated to -- correlated to the p/e ratio and that tells me it's about three points too high. tom: i've got will dan often company that over 15 million headaches and analyzing amazon. how do your people deal with short-term emotion that we hear from lisa abramowicz every day? >> it requires a lot of discipline and it requires a long-term view. when i was a younger technician at fidelity and i would point to a risk of a 10% drop in the market, someone with a large

fund, a long time horizon would tell me that might be a problem for some but for me it's an opportunity to load up. tom: are you loading up on amazon this morning? >> no, i don't do individual stocks. jonathan: that was a good effort, tom. great to catch up with you as always. let's go through the headlines in russia. they have inflation north of 16% and they just cut rates to 14%. the bank of russia is seen the key rate reduced further this year. for some who suggest that the decent measure of pain the country is going through, perhaps suggesting not much. they see gdp in 2022 falling 8-10%.

they had growth that 2-3% and that is a monster revision from the central bank of russia and i imagine a lot of people believe it will go lower. tom: exactly, which interesting is how you define this word pressure. there is an academic study of what that means. these are recession numbers, down 5%, now 7%. 25%, down 30% gives you an indication of what the gloom crew is talking about in russia. i will not say we will get there but that's the scope and scale you need. jonathan: this is the dilemma, massive downside risk to growth. what do you do? lisa: it looks like vladimir putin is taking a page after the turkish presidents book icing we will cut rates even though no central bank has ever been successful that way. jonathan: from new york city

this morning, this is bloomberg. ♪ lis president bidena has broad support in congress: package. lawmakers could finish work on the measure by may 9 but democrats are insisting on funding for coronavirus vaccinations and treatment and action could be delayed indefinitely. officials in china are defending the covid zero strategy is the best way to fight the pandemic step they say the current outbreak is coming under control with signs of the turning around and shanghai. the lockdown has been criticized for the economic cost. 4 u.k. companies expect to his price in the coming year. almost six in 10 companies expect they have to raise prices .

barclays said the market is making activity in its own debt securities. it's trying to fix a paperwork blunder that saw it mistakenly issue $58 billion of u.s. securities. they should say it shows material weakness. amazon acknowledged its hiring warehouse during the pandemic is catching up with the company. they say it lost monday -- money in the first quarter and forecast another loss in the possible current quarter. revenue from the main in-line -- online business was inevitable during the pandemic. this is bloomberg. ♪

>> it is very clear in all of my discussions with functional

european commission that they are hard at work coming up with some sort of cohesive package. russia could begin turning off more countries before the eu begins to announce its actual energy package. jonathan: the sanctions expert, from new york city this morning, futures down negative on the s&p 500. the outlook for amazon and apple for the current quarter, those two stocks suffering in early trading. yields higher by four basis points. more data out later this morning with a stronger euro this morning. we will have a conversation with the chief economist at the ecb. one central bank that gets our attention is russia cut rates from 17% to 14%. michael mckee had this to say. european payments for energy making up the forex reserves, things are still bad but it's a joint loophole that keeps russia afloat.

he says they can cut rates because there is no currency fight with capital control. they are holding money in the country. tom: it's dead on a ghost of yesterday about the possible trinity. whether it's yield curve control and russia controls matter. they have an immediate effect. jonathan: china is quiet over the weekend. tom: we saw that. this is the joy is to provide clarity on when you change the rules of what you do. ellen wald is a senior fellow and has a wonderful book on the fabric of the royal in saudi arabia. it's real simple, can an embargo work on oil against russia? >> i don't think in this case an

embargo can work on oil against russia because are so many different points that russia is able to export oil. you've got multiple ports. you've got pipelines and ports they share with other countries like kazakhstan. that would be hard to battle. what we are talking about is europe embargoing itself against russian oil and that oil will go to other sources. there is news that indian oil companies and indian refineries are looking to secure some long-term contracts with russia to import russian oil. there really isn't anything that the eu and the united states can stop that from happening. tom: does your after india?

>> they can definitely exert pressure on india. it's a huge country with a huge population that has no domestic oil production. they have to import all of their oil in their oil sector is growing and their population is growing. they are looking to develop their country and they need access to oil and they will not just bow down to what europe wants because of the conflict that europe is in with russia. they were able to get them on board with the embargo to iran but russia's a whole different ballgame. lisa: perhaps there is a lack of willingness to ramp up production in the u.s.. chevron earnings and exxon earnings are out stop those are still under investing relative to where the were over the recent past.

3.4 billion dollar for russia. what do you think of that number? >> this is a big number. it's interesting to see how they are doing the right downs for getting out of their assets in russia and yet we are still seeing huge profits and huge earnings in these companies. one would expect we would see that reinvested upstream or downstream. instead of seeing that, we are seeing a massive amount of money being put toward share buybacks. it's benefiting long time investors. they've been on a downward trend for many years and now with high oil prices, they are looking forward to seeing their share prices go up. one of the other issues with oil

production in the u.s. is the bottleneck, supply chain issues in the regulatory regime that's making it difficult and costly to ramp up production in a hasty way. lisa: exxon tripled their share buyback. they did not boost their dividend but they are expected to later in the year. how much does this make business sense for them? maybe it doesn't make sense for them to boost production or is this something where they see it is no advantage because of this how the supply chains are now but longer-term would make business sense. >> i think you can make an argument that they could increase their revenue if they did increase production. if you think production will not bring oil prices down that much, these other geopolitical factors

are with causing prices to rise. wti is up to $106 per barrel and germany says it won't oppose an oil embargo against russia. that's not something that increase of darrell's per day in the u.s. will combat. if you are looking at the long-term picture, it does make sense not to shell out a lot of money in a hasty way to try to increase production that you might not be able to because of these other factors. instead, it makes sense to pay down debt and do these share buybacks. these companies will probably be in a good position going forward but from the perspective of the consumer, it certainly looks like they are taking advantage of the situation. jonathan: thank you.

they like to compare this quarter's profit to where they were two years ago. lisa: they have been doing amazingly well in terms of profitability but she highlighted some real uncertainty here. it doesn't make sense for them to invest in production. it will be hard to get out of the ground and this is the political debate we will hear throughout the weekend and in the weeks ahead. jonathan: crude output in america is creeping higher. tom: i will say that paul sanke has let on this. they don't have the labor and they don't have the concrete and they don't have the pipeline. i haven't seen a lessening of that. jonathan: a big conversation in next hour coming up. tom: absolutely, an important

conversation to set the tone for may. jonathan: a stronger euro is a rare thing these days. euro-dollar is positive and the chief economist of the ecb is in the next hour on this show. ♪

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>> what we are seeing right now in the mac a we haven't seen or 30 or 40 years. >> think about the macro environment, we have more challenges now. >> inflation remains higher than anticipated possible the fed has to be more aggressive. >> our central bank is a much -- as much more willing to hike rates than anywhere else in the world. >> it could be worst desert could be worse as -- if the fed moves as fast as they are telegraphing. >> this is bloomberg surveillance. jonathan: live for our audience worldwide, this is bloomberg surveillance on tv and radio stop futures are down9/1 on0 the s&p 500. tom: it resets us into may. i thought the conversation was