>> 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

great as to what we will do on amazon and apple. it's a reset of the uncertainty of april into may. both companies said we are still minting jillions but ... jonathan: it's the forward-looking always matters. post-pandemic paid back supply chain issues and that's what happens. tom: the nitty-gritty matters but also the bigger picture. we will talk about a pause for the fed and when that will be. jonathan: the apple numbers came out and i thought the 97 billion-dollar quarter in revenue is pretty decent. you look for the line on china

and it looks out k and then came the explanation on china for the current quarter, different story. jonathan: lisa: they say they will take a 4-8 billion dollars charge on that because of supply chain disruptions. they didn't see any of the impact in first-quarter earnings. you will have to trust that the ramifications are pretty bad. tom: they mirror -- they may very clear that ipad is problematic. jonathan: china is the issue and hopefully we work through that issue. it's not a reason to panic and sell the stock on a non-demand issue. lisa: he says over all, how bullish view of apple is unchanged but it speaks to all

of the concerns. amazon represents not only the situation globally but also how much people are facing the headwinds to have the extra hang up apple is phasing with china and it feels like a weight. jonathan: it provides oxygen for the story. lisa: i worry about that. jonathan: futures are down 1% on the s&p 500. yields are a bit higher by three basis points and the euro is stronger. in about 10 minutes, we will catch up with the ecb chief, must. the oil majors in america are doing ok. lisa: we've gotten earnings from exxon and chevron this morning. we will get phillips 66 before the bell and how much do we get

the political pushback? they tripled their share buybacks and chevron reported the best earnings going back a decade. how much does this become an increasing liability? business levels, makes no sense for them to increase production but they are near their record highs and this is ramping consumer spending going forward. we are looking forward to the ecb chief economist joining us on bloomberg surveillance after a slew of data that came out of the euro zone including inflation. 7.5% is shocking. the kicker of the gdp coming out quarter over quarter at 0.2%. this is the bad story the ecb is facing, slowing growth and lehigh laois and and that's leading into the euro and how do

you put those together into monetary policy that it reflects the inflation rate of real rates in europe that are beyond precedent. today we get a slew of u.s. data we are focused on the employment cost index. how much will we take a look going forward at the further momentum in employment because when the likes of amazon are worried about the people they hired because it's too expensive given what they are doing with growth in sales. jonathan: thank you, headlines from china this morning, intervention from u.s. policy makers. they want to support growth and back off the regulatory side which has been a big issue for the tech sector over the last 12 or 18 months. from dow jones, the reporting is that china is seeking a pause on regulatory campaigns against tech companies including twensen

and people have been pretty bruised by that trade. tom: this is a stew of headlines. beijing is considering a push for direct involvement in big tech companies. i think we need to make clear this appears to be the chinese companies, not direct involvement and apple. jonathan: the regulatory campaign has been against putting much everyone in china. i'm sure the u.s.-based companies hope that's the case as well stop joining us now is emily rowland with john hancock investments. let's talk about the month we just had. we are down by more than 9% on the s&p 500 -- on the nasdaq.

people are wondering when they can get back into tech names. >> it's been quite a roller coaster ride. we've been on a roller coaster ride in terms of tech earnings. we think what's happening is we are moving away from this time of a rising tide lifted all boats. we no longer have accommodative fed policy and fiscal stimulus and now we are getting to see with the fundamentals look like or technology firms. we're seeing a big diversions between the winners and losers. what we are watching is there has been indiscriminate selling across markets and there are a few winners that deserve attention. we are looking at the technology companies that exhibit the ali characteristics we love, great

balance sheets, good return on equity. tom: emily, cut to the chase. are you long amazon this morning? >> we have actually stayed away from consumer discretionary. there are couple of big names that don't exhibit those quality characteristics and don't have the cash on the balance sheet stop we are more overweight in traditional technology names that will is those great balance sheets and those organic drivers. you have to be able to compete in your industry as the macro tide goes away. lisa: is amazon no longer a growth stock? >> if you think about the indicator, you look at the year-over-year comps and that's the biggest challenge for amazon out of the pandemic step they had years of extraordinary demand for that business model and now we are wondering what the organic growth drivers going forward. jonathan: great to catch up, what an earnings season it's been.

the numbers are pretty solid and it's all about the outlook. as we wind down earnings season, that's were restarted in the quarter but what will happen in the future? lisa: the fact the nasdaq was already down nearly 20% heading into the big tech week shows you how pessimism is already baked in ansi further declines in the shares after earnings speaks to the pessimism and uncertainty. bifurcation within big tech might be the story. jonathan: we will go with that conversation. for our next conversation with the ecb chief economist, inflation is 7.5%. did you think we would get back to 10.5% cpi in europe? tom: for our american audience, this is one of the giants of modern economics.

this is must listen, must watch for global wall street stop jonathan: cpi and europe is lower than the united states. the ecb is moving in the wrong direction so cpi comes in at a bit higher. winding downqe and then what? i'm space between that which ends in july? we haven't seen a rate hike from the ecb. tom: i'm looking at the core theory which is it some more tepid run rate and a more sluggish nominal gdp. it's absently unacceptable compared to the united states. jonathan: the way reframe it is a rock and a hard place for central banks in europe. lisa: you characterize it as

emerging markets. how do you enjoy the weakening economy? 38 percent increase in oil and gas. it crimps the consumer and that is the dilemma that the ecb is facing. jonathan: the ecb chief economist will be joining us in five minutes time. good morning, futures are down 9/10 of 1% on the s&p 500. amazon is trading lower by roundabout nine full percentage points. on radio and tv, this is bloomberg surveillance. ♪ lisa: keeping up-to-date with news from around the world, i'm lisa matteo. the chinese communist party leadership has ignited a market

rally. they promise to boost economic stimulus to spur growth and contain the countries worst covid outbreak since 2020. they say 30 should keep the economy going with a reasonable range and promised to guarantee supply chains. inflation in the euro area has climbed to an all-time high. consumer prices rose 7.5% in april from a year ago which was in line from restaurants. -- with estimates. federal reserve chair jerome powell is likely to slow the pace of rate hikes after frontloading the next couple of months. that's according to economist. they expect the fed to raise rates half a percentage point next week and in june in the economist say the central bank will do a series of quarter-point increases. russian forces have pounded targets from one end of ukraine to the otherk which includesyiv

as the head of the united nations was visiting. chevron posted the highest quarterly earnings in almost a decade. there is demand for energy and russia's strain supplies was led to higher prices from everything from natural gas to diesel. exxon pose a very that missed estimates and took a 3.4 william dollar charge related to its russian operations. exxon will boost his share buybacks or graham to as much is $30 billion throughout the year. global news, 24 hours a day, powered by more than 2700 journalists and analysts in 120 countries. this is bloomberg. ♪

jonathan: live from new york city on tv and radio, this is bloomberg surveillance. futures are softer on the s&p 500. we have a euro that stronger by a half of 1%. tom: a little bit of a lift in the euro this morning and a time of huge disruption in the uncertainties we face into the month of may. jon will address the ecb and i will introduce philip lane. there is no wetland at the fed with the inaugural chief, must in germany. this is considered a key position in global economics. i want to go back to a paper you did from trinity to harvard years ago. you did a paper on economics and the scientists and engineering of it all.

do we throw the textbooks out now? can modern engineering work given this moment? >> i'm familiar with that paper that i can't take credit for it. the basic question is still very relevant. it's a lend of respecting the signs of the textbook and we live in the real world where we have to understand the actual data arriving and come up with policies that work in the real world, not just in the textbook version. jonathan: let's talk about the real world and the data this morning. the rising core inflation comes in at 3.5%. how worried are you about the

second round of facts and how weekly should you react to that pressure? >> clearly, all sectors of the economy, core and non-core has to just to three factors in europe. one is the very large increase in energy prices which matters directly but also matters indirectly because every sector uses energy. every business with use -- which uses energy. the second factor is the pandemic that's working two different channels. with the renewed wave of lockdown, we have the reopening of the economy this winter including the early weeks of q

one. a lot of sectors were still locked down which showed a lack of activity in a world which left pricing pressure. as we reopened those sectors in their going to normalize prices in the third element is the war. it started in late february as you know. this is a source of great uncertainty for the european economy and it interacts with the energy shock. it has a direct effect in terms of your trying to form its outlook and how the work plays out is the most important topic. jonathan: the latest minutes published by the ecb showed you

call for a rate hike sometime after the end of asset purchases. from your point of view, you want to disentangle the rate hikes from asset purchases. you suggested recently that would give them extra space. do you think you still need that extra space given the data this morning? >> the idea is to have an option. that could be invoked quickly. it covers a range of the long and for a few months and the short end of even a week. it's an option but it's not a fixed window of time.

here we are at the end of april, nearly six weeks from yesterday to the june meeting. after that, we have another number of weeks and so on. i appreciate those who are trying to form market adjustments. i much more focused on the prophet. we need to take into account the data we saw today and we need to look at gdp. we are in the middle working on projections that will inform the june meeting. we were clear at sequence he in terms of policymaking but also in terms of the information we have. i don't really want to run ahead of that sequence. jonathan: do you think pricing adequately reflects the way you are communicating? is that any interest to you

whatsoever? >> i think policymakers are confronted with a number of factors. as you said earlier, our current policies were developed at a time when it was imperative to tackle inflation. we have been saying that on a step i step basis, conditional on this where we think we are not returning to that trap. we will not be normalizing interest rate policy but the interest rate will move. the question is exactly when

that will start stop we have been assessing recently that we should be data-dependent and to respect the uncertainty we face. jonathan: can i just jump in here? i see the data change and then i don't see any changes whatsoever. do you still need the extra space between rate purchases and rate hikes? jump back in. >> just look at the large changes in the ecb monetary picture since december. we made decisions which were not universally appraised at the time about the purchases including the announced end of

the past purchases at the end of march. in terms of step one, scaling down the purchases kamala has already happened stop step two is not only ending the past but concluding those purchases. we signaled the strong expectation that this is coming up in our last sequence is the issue about moving interest rates the story is not the issue of moving away from 0.5 for the deposit rates. we have to still be data-dependent for that. it's the scale and the timing of normalization. we talk about the high uncertainty and it's occurring everywhere. there are mixed dynamics in the

euro area. in the near term, the risk is very high. on the other hand, the high energy prices are eating into disposable income and reducing consumption. the war has its effect depending how goes in terms of mapping into lower consumption and investments in extra pressure on energy. i will hold to this perspective and a lot remains data dependent i would emphasize that i don't think you are hearing anyone saying that the current deposit rate of -0.5 will remain. it's all about the prudence and robust and durable way of having normalization. jonathan: looking at the move in

the euro, it's been brutal over the last month with the euro dollar down about 0.5%. we can all agree it has possible and click haitians. are the latest development problematic for you? >> i think i have always taken this view that the exchange rate is an important economic bellwether for europe. the euro area is a big trading block. the exchange rate matters. when we are working through june, that appreciation will be an important factor. one channel is the mechanical effect on prices but when we think about the investment and

exports for the euro area, it's a bigger variable. this move is significant. anyone looking at that and trying to think about market policy, that would be one trend along with the other trends we need to combat should be integrated into an overall assessment into that forecast. lisa: how much does it affect your outlook for a recession in europe? some think the chance of a recession in the european sector is low, do you agree? >> there is still a lot of momentum from the recovery from the pandemic step that's true especially when you think about year on year. we were still very far below the

9 -- the 2019 levels. it's not just about that kind of base effect but the momentum we have seen is not very high. we know from the near time indicators what's going on now that there seems to again, i don't think it is the most interesting way to frame the question because even if the economy continues to grow, compared to the prewar baseline under all scenarios, the path for output is not going to be as high as we were hoping before the war broke out. the basic analysis applies regardless of whether everything ends up being so strong or puts

us into negative territory. it is not so much about what we know today, we all know the possible scenarios about the intensification of the interaction of energy supplies and other scenarios. this is why, at the ecb, we have been publishing scenarios, emphasizing, don't just look at the baseline but adverse and severe scenarios. lisa: are you saying the market is wrong? the market is pricing in a recession in the euro region, that those scenarios look a lot more likely? are you saying the risk reward is less pessimistic from your perspective? philip: i don't think, again, i don't want to spend any time commenting on that. the market has a significant

risk premium inflation, gdp, and there is a factor there, the urge to look for protection will be higher when you confront this with the risk of higher inflation and lower output. understanding the data, risk management, true forecasts are influencing market pricing. jonathan: the chief economist of the ecb. fantastic to catch up with you. thank you. tk, let's talk about it. ultimately, inflation is moving in the wrong direction for policymakers and the balance sheet is expanding even if they are winding down qe.

that space is the focus of this market. tom: i think their model is so original, and philip lane, they don't have a trilema like japan. there are 19 different stories, and the heart of the matter is 7% inflation in germany, is it the same as 7% inflation in portugal? all of this technical nuance is all about them avoiding trichet, the bank of japan, they have to be delicate and keep their optionality open. tom: if you are just tuning in on tv and radio, just catching up with the ecb president. cpi pushing higher this morning through 7%.

futures -.9% on the s&p. the big conversation is about big tech. let's get you some single names with kriti gupta. kriti: a lot of this is stemming from what you will see in apple and amazon. apple warning about supply chain issues, potential $8 billion in losses coming out of china. tim cook build his legacy on securing that supply chain, so not good news for apple. different story for amazon but you can argue that it is similar because they invest so much in their labor and warehouses, when you see the slowing spending narrative, the margins are not there. down over 9% this morning. talking about the slowing down of the consumer, spending is tracking into the intel story as well. lower pc demand. tesla is another one we had keep

our eyes on. up in contrast to the other moves we are seeing, after elon musk disclosed he already sold $4 billion. we have talked about how the twitter deal would be funded. do you sell tesla to buy twitter? that is the trade that appears to be happening. today, a sigh of relief. exxon mobil, chevron, both reporting earnings this morning, both recording record profits over a decade. this comes down to the growth narrative. you are starting to see a slowdown in the record big profits. tom: appreciate it. to follow on with professor lane, we speak to thierry wiseman. hayes understanding of the history of what we have lived in

april, going from the loving and mundell to m.i.t. and wizman. philip lane tiptoed around that, and it's about trilemas. let's start with "control." are we going to get into bigger problems if we have visible control like in japan, or less visible control was like europe? thierry: one thing i do agree with dr. lane, it is a delicate time for the ecb. i am of the view that there is a clear path forward, even when inflation is driven by supply shocks. there is a great risk there will be secondary effect core inflation, and that there will also be effects on secondary

inflation expectations. the data in europe this morning is clear in that respect. christine lagarde said in february and march that the preponderance of inflation in europe was energy driven. yet we are getting numbers this morning that seems to belie that view. i don't think there is a dilemma here. the path is clear. they should be raising rates, moving toward normalization of the balance sheet. i think the market right now is pricing in three interest rate hikes from the ecb. at the very least, that is the right magnitude that we will see come out. i don't think there is a dilemma here, i think the path is pretty clear. lisa: if the ecb raises rates three times this year, does that make the euro stronger or weaker against the dollar at a time when that will slow growth when it is already slowing? thierry: economists like to say, all else equal.

especially when you consider inflation in the u.s. might be topping out in the next few months, especially when you consider that the sanctions on russian energy are probably going to drive european inflation higher, european expectations higher, drive the sentiment at the ecb to be more hawkish relative to the rhetoric coming out of the fed, which i think has reached maximum option is. -- hawkish this. however, and this is with a capital h, there are a lot of events over the next couple of weeks that could do real the euro once again. i would point out most significantly to the things that president vallone amir zielinski has planned for the war between now and russia's victory day on may 9. we are entering into a time of maximum risk for the euro, not minim. lisa: the dollar rising to the highest levels going back to

2002. was that capitulation, the recent peak for the foreseeable future? will that be the haven tree that will persist over the next few months? thierry: the dollar has been strong against other majors but not for the same reason across the majors. that is why it's difficult to make a broad breadth umbrella statement about what the dollar will do. in the case of the chinese yuan, the dollar has gotten much stronger in the last two weeks in part because the market has capitulated to the view that china will be slowing because of covid and that is an intractable problem. that is different from why the dollar has risen against the yen in japan. that has to do with a yield spread between the u.s. and japan which are primarily driven by the doj's reluctance to move toward more hawkish policies. in the case of the euro, it has little to do with monetary policies. it has more to do with the risks

emanating from the more, specifically the growth risks, which is what the market is focused on, as opposed to what the ecb will do on inflation. right now it is difficult because the dollar is strengthening. a perfect storm has coalesced many storms around the world. you can see one or two dissipate, but that doesn't mean that all will dissipate. it's possible the dollar stays strong against the euro because of the more but starts to stabilize against the yen because the boj has a change of heart by the next meeting and japanese inflation starts to rise. tom: thierry wizman, the challenges for the boj. next week, the challenges for this federal reserve. tom: the federal reserve will be radically different, for the american audience focused on the original meeting. can we assume it will be a 50 bps move?

jonathan: at this point, i think we can. tom: we will talk about arthur burns, greenspan, but it is a walk in the park compared to the way you saw professor lane walk around the niceties that he and christine lagarde have to deal with. i would assume -- she said they are data dependent -- that the germans will be apoplectic over the duration of 7% inflation. jonathan: their projections will be interesting. he mentioned that given the weaker euro. we wind down qe in q3, and then what? tom: how do you do an x axis with a major war going on? jonathan: it's an expensive way of saying some of this stuff is transitory or not. do they have the luxury of waiting?

look at where inflation is and where it was? what have they done with policy? tom: they were transitory. jonathan: futures done 1% on the s&p. this is bloomberg. ♪ lisa: keeping you up-to-date with news from around the world, i'm lisa matteo. president biden has broad support in congress for a $33 billion ukraine aid package. lawmakers could finish work on the measure by may 9, but if democrats insist on attaching coronavirus treatment and vaccine action, it could be delayed. officials in china are defending the zero covid strategy. they say the outbreaks are coming under control with cases in shanghai showing signs of turning around.

law enforcement authorities are searching deutsche bank frankfurt headquarters and -- in a potential money laundering case. deutsche bank is said to be cooperating. elon musk sold about $4 billion of tesla stock after clinching the deal to buy twitter let.'s analysts and investors suspected that he may need to sell some of the stock to sell -- he mentions job cuts and ways to boost cash flow. 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 lisa matteo. this is bloomberg.

>> we said that in this year, we

expect supply to improve dramatically. that is true. we sent the second half would have significant improvement in supply. that's happening. having said that, we still have more demand than supply. jonathan: the issue of the last 18 months. that was the qualcomm ceo. good morning, futures negative on the s&p. the nasdaq down by 1.36. amazon is down by 9.7%. if you work through the release from amazon yesterday after hours, the ceo said we are no longer chasing physical capacity. our teams are focused on improving activity and cost efficiencies throughout our fulfillment network. tom: that is the key single sentence from what we heard yesterday. we are not going to do price target. we are going to talk to brent hill.

major headlines the day he launched from ubs over to jeffrey's. i want to talk about silicon valley arrogance. you are really good at this. how do you feel about the feeling that we are only in this for our consumers, we are not going to harm our consumers, the inflation is something that we will deal with separate. are they forgetting their shareholders because they are thinking only of their consumers and they need to input inflation fighting increases right now? brent: i think they have protected us in the pandemic. they went from 20% growth to 40% growth overnight. you cannot automate the delivery of toothpaste via a drone and some software. they had to build this capacity out.

now we are starting to go back from clicks into bricks. wandering into walmart, target, our convenience stores to pick up goods, we are locking back into physical stores. the world is returning to normal and they cannot just automatically snap their fingers and go back to normal. it will take time to unwind his. -- this. they have overcapacity now. it takes time. tom: if i want to buy, hold, or sell 1, 2, 3 years out, did you find confidence on the call yesterday that they can manage out from this pandemic to a good outcome of growth on the income statement? brent: i think they have been great sources of value for shareholders over time. the answer right now for tech is all of tech is in the penalty box.

we are seeing a massive downswing post-pandemic hangover. multiples living with the aliens the back to earth, and we have a potential recession we are all staring at in the next year. right now every asset classes under duress. it is not only amazon but the rest of tech. over a one to two-year period, it's a great investment. if you look at the recurring software and add business, and these two businesses could potentially account for amazon's entire market cap on this pullback if you look a few years out and put multiples on the sum of the parts. the aws business is only getting stronger. i think you have to separate the business between software and add business and the retail business. the retail business is in a tailspin in the short-term with

decline in actual demand, as well as costs they have to get a hold of. price increases have to come in, but this takes time on the retail side. most of our investors are looking at the other part of the business, really looking at the aws and ad business. lisa: i'm looking at your price target of 3700, buy rating on amazon. they are down in premarket trading. what makes you think they can get to that 3700? is this a bet on a ws out the commerce business? brent: it is the sum of the parts when you take the parts of the business and stripped them down, look at what multiple you pay. if amazon was a standalone company, 2023, the division of

aws will do $100 million in revenue plus. most investors would pay eight to nine times forward revenue. that is worth $900 billion for that business. you take the decline in the stock and start to add of the ad business, media business, subtract the retail business -- tom: you have mentioned this twice, but i need to get this in. are you telling me an acquisition of amazon shares this morning, that i'm getting the cardboard box business for nothing? brent: not for nothing but you are getting it for a multiple depending on where it opens. not a huge multiple. you are getting their free call option over time that that can come back and stabilize. you have to look at it from the sum of the parts, not from just

the retail business. that is what everyone is doing. we are trying to think about it more thoughtfully over a period of time. when you have 60% market share of the big three in the cloud against microsoft and google, i am not worried about their sources of profitability. this is a 30% to 40% margin of business over time that no company will leave once they go to. jonathan: your view seems to be the view on the sell side right now. the market seems to be interpreting things differently. you have conversations with the buy side, what is the pushback you are getting? brent: no one wants to buy anything in tech. it is not just amazon. pull up a chart on microsoft, google. we are in a buyer's in wall street on software.

jonathan: awesome to catch up, brent thill. that is the buy strike right now. when things move away from the situation, as they inevitably do, you start to get this bifurcation in tech and we don't treat all names the same way. tom: exceptionally important interview. i will be as direct as i can. tech animals hate to do parts of the analysis. what is the value of cloud, what is the value of the new advertising business, what is the value of the cardboard boxes? you just heard brent thill talk about some of the parts, analysis on amazon, that was meant arising. jonathan: i think he said $900 billion for aws. that will take about 10% off of that. that is the point he is trying to make, you are not trading at a high multiple for the other

side of the business. futures on the s&p are down about 1% on the nasdaq, 1.4%.

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>> this is a new macro regime. the risk premium has to go up everywhere when you see these types of moves. >> we don't see a soft landing is the most likely outcome. >> this cannot go on forever with food inflation and gas inflation where is. >> the dollar has been the key where people hide when things go wrong. >> this is bloomberg surveillance with tom keene, jonathan ferro, and lisa abramowicz. tom: