>> you have all of the three worlds biggest economies suffering from these shocks at the same time. >> we also run the risk of a second repricing lower if we see demand destruction rollback. >> could see prices peak backup, complicating the picture for the fed. >> i wonder in july whether the fed will have the stomach to do another 50. >> the fed has been way behind the curve. >> this is "bloomberg surveillance." jonathan: this market needs a therapist. from new york city, good morning, good morning. for our audience worldwide, alongside tom keene and lisa abramowicz, i'm jonathan ferro. futures up .8%. there is a bounce. will it stick? tom: with a little bit of hope

and prayers. maybe it is a shift on the fed guessing game, but as lisa mentioned, earnings are better than good and strategists readjust. jonathan: we look forward to cpi tomorrow. that is the major one for this market. tom: i agree. it is going to be interesting to see. i know you already know the numbers. i'm still not used to an eight-figure. jonathan: we are looking for another one tomorrow. wall street will look for one thing, and the newspapers will go with something else. lisa, the front pages -- and i would argue this administration too -- will look for deceleration. wall street will be looking month on month. tom: they -- lisa: they are also going to be looking at the components. what is driving ongoing inflation? i'm wondering how much of the new search is due to supply chain disruptions. whether that changes the story for a federal reserve which is

trying to fight demand-side inflation. cannot do much about the supply-side unless they cram how much growth there is. jonathan: is it enough to change the tone of what is happening? lisa: i have to go back to the components. if you start getting a mechanical peak but you see real momentum in wages, real momentum in rents, how could they justify not hiking quickly into that? how can they change their town? also if we do not get a significant deceleration, does that change anything if you have inflation running at 7%? jonathan: a ton of fed speak coming up. equity futures right now, a little bit of a bounce. some real pain in the nasdaq 100 over the past few days. the nasdaq now up by 1.2%. yields yesterday lower and not higher, particularly at the front end. today on tans, down a basis point. just about holding on to 3%. lisa: how much this really is the focus.

bond yields going down in tandem with equities selling off. a lot of people think it is a good sign. this is traditional risk off. does this signal some sort of shift, some floor in how low things can go? today janet yellen is testifying to the senate. she is going to be testifying in a session called the financial stability oversight council annual report to congress. how much does she strike a slightly different tone than president biden when it comes to inflation and how long it will last? he is counting on it to rollover before the midterms. today we get that fed speak. loretta mester is going to be speaking with michael mckee at 11:00 a.m. others include jon williams, raphael bostic, as well as chris waller. do they give an inclination to the question jon was talking about? what is the put come in? at what point today say, we are not going to raise rates as much of the market expects.

how much does it matter what the components of inflation are, with supply-side inflation very different and people having so much money to spend and deploying it? at 11:30 a.m. we do get boards from president biden on inflation. how does he deal with gas prices that are rising to new highs, even of the price of gas has been coming down and the price of oil has been coming down? how do we deal with refineries? how do we deal with investing in fossil fuel set a time when they're trying to push a green agenda? jonathan: i wonder if they will talk about this market too. he was the stock that looks ugly. peloton was down 60%. in the premarket it is down almost another 17 percentage points. they are just saying all of the wrong things right now. revenue comes in softer than expected. they are also seeing a small increase in cancellations due to a subscription price hike. not what you want to see and it is still falling. tom: my workout is surrounded by

immersive technology. they have immersive technology. jonathan: we joke about it, they don't work anymore. show me the money. tom: the money is, the day about my ella tom i enjoyed a 93% drawdown as well. david stubbs is so chiseled, he is on the palatine about 11 hours a day. jonathan: he joins us now. david, we will not talk to you about your workout regime. we will talk to you about this market. it has been brutal. i want your thoughts on what has happened and how you are allocating capital right now. david: it has been brutal for equity and debt. we have seen is the creation of significant value in the fixed-income space. we are now starting to move some of our cash, our short-duration fixed-income out of the curve. yes, your bond yields could go higher, we have asymmetric return profiles in the

government bonds around the world. you could lose a couple of percent if we see basis points up from here, but if we do see a growth scare or recession next year into 2024, you will get a double-digit return on those government bonds. we are calling now for adding a little bit of duration in portfolios. on the equity side what we are seeing is a bit of a morph from the fears of what the central banks are going to due to the fear of the growth slowdown. we have seen earnings be pretty stellar. they have been upgraded around 2% in the past few months. obviously the question for next year is, can they hold in? tom: david, wonderful to have you in our studios. i want to take you through a jp morgan timeline versus a robinhood timeline, each is where the market was eight months ago. you did one of our interviews of the year last year on technology and what we do not see out there.

one of the things we do not see is the seeds of disinflation. discuss that. david: i think we are on the cusp of a multi-your upgrade cycle across corporate america and the corporate sector across the developed world, or a range of new technologies are going to come in to augment and replace labor. you have tight labor markets i think that is going to lead to this inflation as we move through this cycle. then you round up productivity as well. that is exciting, but here is the problem. that takes a while. it takes a while to invest, it takes a while to integrate these systems. we have had such a persistent cost push, inflation issue for corporations. earnings have been stellar. a few years from now i'm sure these improvements will be getting in. between now and then, unfortunately i think we have quarters of margin compression. that is what the equity market is worrying about, but i think it also opens up the possibility we are seeing an entry point for

certain technologies, certain providers of these new technologies, which is going to set us up for excellent returns and the next few years. tom: critical, as alluded to in mr. diamond's letter, this is not about the pandemic and technology getting ahead of itself because it had to. were looking at this as a much more persistent and structural industrial shift? david: i think those are two very different things. there was a huge amount of investment brought to do with the pandemic. if you look at physical tech spending, in terms of investments in the gdp reports they are strong. they could be soft in the next couple of quarters because of that bounce, but what we are talking about here is moving into a new regime of tighter labor markets, with shorter supply chains, of a desire to make things closer to home. and the need to do so at a cost effective price will force people to adopt elements of

automation, not just in manufacturing, but in the service sectors as well. lisa: aside from specific pockets of tech, are you prepared to say we have seen the book of selling and it is a good time to add risk more broadly? david: if you look at the sentiment in markets, it is obviously incredibly bearish right now. we had numbers we calculated on this. uss sentiment across volatility, pricing, etc., if you buy at these levels you usually get a 7% turn versus 3% at another time. a tradable rally. is it likely? sure it is. you just need a catalyst for that, a soft cpr print tomorrow could be one of those. a hot one would be pretty tough for the market to take. broadly, though, i think we are in a period of more volatility than return. we have to get past not only the tightening of central banks, but also the impact on growth . fully that impact is modest inflation -- modest, inflation

eases, and you have this fabled soft landing. the scary part is if growth slows significantly, inflation is more sticky, then the growth next year is going to be meager and fears of recession will pressure risk assets. jonathan: that is the problem right now. what do we get? david, always great to catch up with you. to return to that peloton story, we are down 17.5%. we have already taken out the pandemic gains for this stock. this line from the ceo, lisa, talk about a company wrongfooted. the balance sheet has been managing inventory. we have too much and that inventory has consumed an enormous amount of cash. what a change in fortunes for this company. lisa: is it an outlier or one of the examples of how much it brilliance that was during the pandemic? it is shocking to see people talking about sex and the city

issues they had with some advertising. jonathan: what? lisa: remember that episode with chris and he died on the palatine? -- palatine? -- peloton? jonathan: this line, tom ash [laughter] lisa: just going to move on. jonathan: thinly capitalized. to lisa's point, is this a peloton story, or other other palatine's out there? tom: in the old days maybe they would never have gone public. $4 billion of total revenue, the margin -- margin is nonexistent. is this a publicly-traded company with a persistent cash flow? maybe. when i am on my peloton i get a exhilarating motivation. lisa: it carries over to the morning. jonathan: would you allocate any

of this -- any of your cash to this stock? peloton down 17.5% in the pre-market. equity futures up. we have a bounce. from new york city, this is bloomberg. ♪ ritika: keeping up-to-date with the first word, i'm ritika gupta. president biden will highlight his efforts to stem inflation in a speech today. it comes at a time when soaring prices threaten democrats's chances of holding onto congress. the president will draw a contrast with a republican proposal to raise taxes. just in time for summer driving season, u.s. gasoline and diesel prices have set a record, according to aaa. gasoline prices have had $4.37 a gallon.

americans are expected to drive more this summer than in 2021. president biden has signed a measure designed to make it easier for the u.s. to send weapons and supplies to ukraine. the legislation cuts redtape but don't -- but does not -- does not include additional funding. shares of palatine are falling. the fitness company reported third-quarter revenue that missed estimates and its outlook. revenue was well below expectations. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm ritika gupta. this is bloomberg. ♪

>> you heard my president several times. he said we should have these negotiations. my president is ready for these negotiations. unfortunately we do not expect president putin to be a part of these. jonathan: always great to hear maria tadeo catch up with ihor. futures positive .6%. we fade a little bit here. still positive on the nasdaq, up 1.4%. peloton, down 16.8% and just saying all the wrong things right now. a miss on earnings, a miss on revenue to be specific. a miss on the guidance as well. going forward they say inventory

is eating up cash. it is leaving the company thinly-capitalized. tom: it is really struggling. we are going to get more stories like this where plans blow up and law up in different ways. can we say that peloton is old news right now? it is not that we did not know the specifics here. jonathan: there is nothing new about this, but i think it is interesting. you have a company seeing great demand, so they build up inventory, and here we are, demand is gone. just nothing like what it was. if you see the pandemic story, great story, the likes of cathie wood and others who like these kind of names, then all of a sudden they get fade. that is what we are dealing with. lisa is talking about how many peloton's are out there, that is the dynamic we are trying to think about. tom: including the two in our living room. joining us now joe mathieu and maria tadeo. we look to maria tadeo for a

morning breeze. maria, i was shocked to get the research notes from international relations and those more wall street-y on the speech of mr. putin and his fragility. how is his health discussed in brussels? maria: tom, you have to be very careful about that, because we know that there is not a lot of information. the russians, of course, say that is completely a no go. the image of putin, the man who is a military genius but also in good health. you don't know anything about his private life and he simply won't go there. when you look at the european institutions, i want to be incredibly careful. after vladimir putin is not clear what will happen to russia. the big thing europeans want to avoid is not repeating that mistake of a president biden, suggesting there should be

regime change. lisa: what are the next steps for the european union with respect to this oil band we do not have details on? maria: i think this is another big mess for europe. it is the same old story. the politics, the energy, security, defense, the oil are all connected. today you have ursula von der leyen, who leads the commission, on a plane to see victor portland to convince him he should approve this embargo. again it is a tricky situation where the politics, the internal dynamics of the european union prevent quick action. there is debate in europe as to whether or not this principle of unanimity should be dropped. remember, they have to agree. the thing is agreed until everything is agreed. that is how brussels work. increasingly there are voices who say we have to dig it. we are too slow. lisa: we are hours away from

president biden's speech. what has stuck so far that he has tried? joe: that is a good question. you will have an opportunity to pick through some of the things the administration has tried. it is pretty obvious that as many swings as the administration has taken here in is not really made contact with the ball. they liked to talk about the putin price hike, but energy prices were soaring before the war began. inflation was an issue before we ever started talking about ukraine. today he's going to suggest that -- or urge congress to pass a lot of ideas that have never been able to pass before. build back better. think extended child tax credit, lowering the cost of prescription drugs. there is going to be urgency, but there is a reason why they didn't pass latched -- last year and in a midterm election it

doesn't look like they have great potential to move either. tom: swinging back to the fore in front of mr. biden, the bottom line is he needs help from brussels. how allied are the allies right now? how is that perceived in washington? joe: you're going to see an example today with mario draghi visiting the white house. that is going to be a united front. they may not agree on everything. italy has a much different relationship with russia, but that is going to be an important optical presentation for the white house. the president is still asking for money. it was some days ago he asked for $33 billion in this latest -- and this latest war funding has been bogged down in a conversation over covid response funding. at this point it looks like they're going to break them apart. president biden gave it the ok. he said, i realize we don't have the votes, strip it and let's

pass that humanitarian aid as a clean bill. as we understand, according to the pentagon, the administration will run out of its authorized drawdown money in nine days. jonathan: joe, thank you. tom, would you like to think maria? tom: maria, thank you. jonathan: thank you, maria. i'm scared to say maria's second name now. maria: you got it right. jonathan: we appreciate it. tom: and javier as well. maria: that was terrible, tom. [laughter] don't. a lot of practice. jonathan: maria, i will catch up with you later. thank you. sound on with joe mathieu at 5:00 p.m., with maria tadeo joining him. they are going to have some fun. tom: italy, germany, to the moon. mr. draghi joins the white house and you have been world-class on this. italy to germany 10 year, doubles out to two percentage

points. that is a reality mr. draghi faces. jonathan: the ecb meeting was great. that is the market. let's talk about the politics. italy's relationship with russia has been different than the united states. it is worth remembering that only a number of months ago when we had a massive russian troop buildup on the border of ukraine and many people were accusing the russians of preparing to go into -- in, and the russians were denying that, the italian business leaders were looking for a meeting with putin to talk business. that is how much things have changed. there is a fear that maybe they will snap back. that perhaps they still could. i know that is not the consensus view, but still that fear returns. tom: it needs reporting from rome. a surveillance road trip. jonathan: will you practice your pronunciation of italian names? tom: no. i have to get through the

spanish names first. [laughter] jonathan: just don't. just don't. futures up .1% -- .5% on the s&p. this is "bloomberg surveillance." ♪

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jonathan: coming up the back of a three-day losing streak on the s&p, we have a little bit of a bounce. on the nasdaq, up 1%. the nasdaq year to date battered, bruised. yesterday down more than 8%. that group on the s&p 500 much lower. commodities down too. an interesting move at the front end of the yield curve we need to keep talking about. 2.5775%. last wednesday, 2.85%. yields lower again today by a basis point. tens are breaking 3% now, 2.9987%. it starts to get interesting. it is not just about equities

down, bonds down. i would look at breakevens. breakevens started to go the other way as well. you know the calculation behind this. take the yield of the inflation, subtract that from the closest nominal maturity, take those yields, put it altogether, that yield, the implied inflation rate, that is coming back in. those are inflation rate expectations. growth down, inflation down, growth scare in yesterday's price action. lisa: perhaps the fed won't be able to go as much as people previously expected. that is what we are seeing baked into a market that is increasingly concerned. how much is this because the inflation we are seeing is coming from supply chain disruptions, which is not long-term inflationary? that is more stagflationary, more concerning for growth, and that really underpins some of the moves we have seen. jonathan: this is not a judgment of the future, just an observation of the last 24

hours, but it is notable that this is going the other way. tom: we will get to kathy jones in a moment. the foreign exchange market in a jumble. two reports in the last 10 minutes, abraham reb ari at citigroup reframes a strong dollar and also says yen quiet sent until -- yen we have sent -- yen quiescent until a 135 level. where is that scope and scale in the bond market? we don't have an acquittal interview in the bond market like strategists are guessing and foreign-exchange. jonathan: that's the cross asset price action. let's get you some single names of stock movers in the premarket. let's get to romaine. romaine: the macro story driving the equity action, but raising a lot of questions as to whether people are overlooking the micro. apple is down 16% now from that all-time high. a company with $95 billion of

free cash flow, $100 billion in net income, and a p/e ratio that is smaller than more than half the member's of the nasdaq 100, now near oversold conditions. you are seeing a bid come back into this market, only up about 1% after slipping up 8% over the past few days. it will be interesting to see whether these stalwarts of the market can reassert themselves. do you put apple in the same basket is upstart, down 52% right now? this is the lending platform, basically saying it's going to have trouble meeting its guidance for the year. this is pretty much across the board on the main metrics. higher interest rates, and you talk about the fact that loan growth, loan balances are creating a risk spectrum here. affirm down about 14%. so if i also lower in the -- sofi also lower in the premarket.

not providing anything new. those shares down 41% here in the premarket. the company also said some deal it had with an unnamed grocery store chain is affecting its earnings. some shift in how that company recognizes. peloton now down almost 25%. i'm not going to rehash the numbers, but i want to point out the inventory numbers on this are absolutely astonishing. go back to june 2020, inventory is something like $200 million on the balance sheet. as of march, you were at $1.4 billion on the balance sheet. the company says don't worry, we will sell all of that. this is more the cash flow issue rather than a structural issue. investors not buying it. tom: romaine bostick, thank you so much. right now, kathy jones, chief fixed income strategist at the schwab center for financial research. a given bond etf's down 16% at

price, 19% annualized, big loss. i would suggest the bond market handles price decline and a bond bear market differently than the equity market. what are you observing from schwab clients as they enjoy price decline? kathy: well, i am not sure they are enjoying price decline, but what we are seeing is investors trying to take on a little more income by going into longer duration bonds. this has been our call recently, sue sartre gradually -- recently, to start gradually adding duration as yields go up because you have the opportunity now to get some relatively attractive coupons at prices that are often below par, so that means not only the opportunity to earn more income in a portfolio, but also

potential capital gains. lisa: where is the biggest opportunity when you talk about those coupons? is it in credit, the riskier the better? or is it in full faith and credit u.s. treasuries? kathy: i would slice it a little bit more carefully than that. there are two areas we really like. one is municipal bonds you can get on a tax-equivalent basis for a very high income earner. north of 5% in high-quality municipal bonds. we are ok with investment grade, but we want to stay a little more careful because we do think we are going into or we are in part of the credit cycle where we were see some -- where we will see some further spread widening. we are not crazy about high yields because this is the part of the cycle where high-yield usually does most poorly. people forget it is not the beginning of the rate hike cycle , it is usually the end of the rate hike cycle when the economy is starting to weaken that you

start to see those high-yield spreads really go back. lisa: we saw a pretty big move in spreads yesterday in the high-yield sex or -- the high-yield sector, which is something new to get and yet suddenly, we see some sort of indication here. is this just the beginning of a widening of a protracted selloff in credit, or is this basically some sort of mini capitulation that will be buyable for investors? kathy: i think it is the former and not the latter. we have seen ccc's really underperform for quite a while relative to the higher end of the high-yield market, but as we get into higher rates, you are starting to see the impact on cash flow for those weaker companies with weaker balance sheets, maybe not as great at cash flow. that is one reason why we don't like loans as well now, simply because we are starting to see the effect of interest rate

increases. that is probably on the ability to meet those obligations on weaker credit. so definitely would not be chasing high-yield at this stage of the game. tom: there is a religion in the equity market that if you go down correction bear market or worse, at some point you grow your way back to where you were in the market high. there's long spans where this has been a challenge. how do you do that in the bond market? if i am x percent down from december of 2020, how do i grow myself back with yield if i don't have attendant growth underneath it like i have in stocks? kathy: well, it depends. if you are holding individual bonds and you hold them to par, you are still going to get your principal and your interest payments by default all the way along. so you earn whatever that current yield was when you bought the bond. if you are in a bond thud,

usually takes longer, but what will happen is the manager is reinvested for higher income, and on a total return basis over tisumihat rates don't go sky high from here, which we don't think is likely, you earn your way back with the income. jonathan: thank you for being with us this morning, kathy jones of the swab center for financial research. citi just published, "have we reached peak inflation, peak hawkish nests? the equity market selloff and fed officials pushing back against 75 basis point hikes raises questions about whether we have reached peak hawkish miss -- peak hawkishness. we see the potential for a fed to take another hawkish step, guiding to a higher terminal rate at an upcoming meeting." that is the citi view out there this morning. tom: that is the x axis on

inflation. go back to i think it was ellen's and their of morgan stanley, trying to define transitory as one quarter, two quarters. we are out as a consensus opinion three and four quarters, and they shove that x axis out. what do you do if you come down to 4%? jonathan: 4% when? we push this out further. does the fed have to go further too? lisa: if the fed does go further, what does that do to corporate debt? what does that due to the trillions of dollars of debt that has been borrowed from a governmental as well as corporate level from when the pandemic started? remember when we were talking about how the fed couldn't raise rates that far because of all of the debt that has been incurred in each successive cycle? what is going to happen now? now that we are talking about inflation at such a high level, this is what people are wrestling with. it is unprecedented. tom: i was not rude with kathy

jones like i was with maria tadeo, but on a given broad bond etf, i need to make 5.9% coupon per year to get back to the highs of the summer of 2020. where am i going to find a 6% total return in bonds right now? jonathan: especially with this inflation outlook from the fed. here's a goal for you. new york fed president williams saying right now they see inflation easing close to 2%, the fed's goal, in 2024. tom: there it is. that is the jan hatzius view, folks. jonathan: we've got to wait a whole lot longer to see that. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. -- longer to see that. alongside tom keene and lisa abramowicz, i'm jonathan ferro. this is "bloomberg surveillance ." ritika: keeping you up to date with news from around the world, with the first word, i'm ritika

gupta. sanctions in russia own oil will be on the agenda today when italy's prime minister mario draghi meets with president biden at the white house. he resolutely back sanctions despite his country's reliance on russian energy. in finland, the parliament's defense committee has concluded that the country should join nato. finland started on the path joining the alliance after its neighbor russia invaded ukraine. three out of four finns now support joining nato, up from just one out of five before the invasion of ukraine. ferdinand marcos' has brought -- ferdinand marcos' son has brought the family back to power. tightening restrictions and

shanghai and expending a mass testing sweep in beijing. more people are being shipped off to government isolation centers, under a new definition of what it means to be in close contact. they reported the lowest 80 total -- lowest daily total since march 16. pfizer has agreed to buy bio haven pharmaceutical for $11.6 billion in cash again in a group to treatment for migraine headaches. and while, bio haven shareholders will get one half of a share of the new bio haven, which will retain some of the compounds and develop and. that compounds in development. 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. ♪

>> the reality is we he thick about what russia is doing in ukraine, it is a key contributor

to some of the price increases we are seeing in energy and in food. today russian ships are blocking the affinity of -- the ability of food to get out of ukraine. you have seen energy prices rise because of the geopolitical uncertainty. what we are trying to do with our sanctions is to end that invasion as quickly as possible. jonathan: the u.s. deputy treasury secretary. the president speaking later on this morning, 11:30 eastern time. looking forward to that. futures up 0.7% on the s&p. on the nasdaq 100, up 1.2 percent. yields lower. a gain by two basis points. a break of 3% on the 10 year. tom: no question about it. here's the question of the day as we go to javier blas on oil, with a question yesterday that went viral worldwide to global wall street. his comment, "the traditional relationship between crude and refined products is broken. diesel truck oil has fallen to a 30 year low. oil distillation bassett he has

fallen, the largest decline in 30 years -- we'll distillation -- oil distillation capacity has fallen, the largest decline in 30 years." how do you center on a broken refinery mechanism, a broken refinery process? how does that get fixed? javier: it is very difficult. at the moment it seems we hit the refinery wall. we don't have enough refining capacity that we can use. there's a still refining capacity, but it seems outside our reach. there's a lot of refining capacity in china. so we need beijing to relax export controls of fuels so some of the refining capacity of china can be used. but otherwise, i'm afraid prices are going to have to work their way into reducing demand, and that is a lot of economic pain. tom: where is the pivot point on

brent of the many experts you speak to? javier: i think let's not focus on brent. we can focus on the cost of refined products because now the gap between brent and where refined products are trading is so large that in refined products, we are already there. we have seen demand instruction in many parts of emerging markets forget it is also a question of the dollar. we are beginning to see demand destructions in africa. in nigeria, the airlines are starting to ground all the flights because they simply cannot afford jet fuel anymore. lisa: we are looking at record high gas prices in the united states. how much further do they have to go based on the people you speak, given this issue with refined goods, not just simply the price of oil? javier: exactly, record gasoline prices at the retail level today in the united states.

also, let's not forget, record prices for diesel. i think we are beginning to hit the demand instruction level also in the united states, but the problem is we are getting into the summer season, the driving season, after two years of covid. everyone wants to get out and enjoy the countryside, explore, see family. so i think we carry on for a few more months, and then the demand destruction really hits in september, would probably also we see a lot of slow economic activity. lisa: in about four hours we will hear about president biden talking about inflation. is there anything this administration can do to actually accelerate some of the manufacturing so that we can have a supply-side response to these high prices? javier: the administration can help with the response for oil production, but that is also going to take time. it takes at least six months for any response to happen.

on the refining side, very little can be done. jonathan: when they talk about price gouging, what do you make of that? javier: that is the typical thing that politicians in the united states and in europe say when they don't have any options and they need to blame someone. there is no price gouging. one or two petrol stations or gas stations are taking advantage of this for sure, but it is really -- is it really what is driving the market? no way. it is just a simple excuse. jonathan: did we get that right, tom? i think we did. maria is going to write in. javier has never complained. it is maria i worry about. lisa: but he did try to correct us, just to expand what it is. javier blas. jonathan: we will keep learning on "bloomberg surveillance." futures up 0.7% on the s&p. in the nasdaq 100, up a little

more than 1%. we will keep coming back to this conversation about crude. crude. crew right now, $102 on wti. to javier's point, that is not what people are paying at the pump. they are paying something else. tom: i've got a jet fuel price here. it is a double. you know what i am really watching worldwide? rice. rice is the thing to watch. thailand rice, india rice. those are the things that are going to break the back of the food chain. jonathan: food prices elsewhere problem at a come together with what is happening with energy. where are we, $4.33 a gallon on average in america? lisa: even higher than that as we move towards the summer months. we are not even at peak driving season yet. this goes directly to the food price, and frankly, to other inflation we are seeing as well. how much does that contribute to the inflationary surge? food is a separate issue, but oil and gas, based on the

transport, as a much more global effect. if you don't get that coming off simply because of refining capacity, not just even oil supply and demand, how much does that exacerbate what we are already seeing? jonathan: the president at 11:30 eastern. you've heard the point about price gouging and what javier had to say in response to it. there's the politics, and the harsh reality of what is happening on the ground. these are complex issues. lisa: the oil companies reported their second-biggest take-home profit after -- take-home profit ever, and they were not giving much of it into investment. they were just giving it back to their shareholders. some people might say this is bad policy or this might go against what the president wants , but other people would say this is good economics. the prices will come down. there is a shift away from fossil fuels. why should they invest? what is there bang for their buck at a time when there's a lot of years until they get some sort of return on what they are investing? jonathan: it sounds a bit cliche, but as always, the

solution to high prices is often high prices. tom: that is absolutely correct. i just look at my inflation-adjusted saudi oil chart of some note over decades and decades, and we are just above the second opec wave cusp on inflation-adjusted oil. i did not know that. jonathan: to fold that into the price action of the moment and the price action of yesterday which was interest in about yesterday is that we had one of those days where we had this flesh out in commodities, this flesh out of what happened with commodity equities, the energy producers on the s&p 500, and we had inflation expectations come in, not break out. that was a change. i'm not saying it is going to continue, but it was interesting to see that just yesterday. tom: it is the battle that is out there. john williams leads on it, with a view out to 2022 and 22 any three. -- and 2023. he has a very constructive past back to some form of normal price change.

jonathan: lisa shalett of morgan stanley, looking forward to catching up in about five minutes' time. the president of the united states speaking at 11:30 eastern time. ♪

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>> we have a perfect storm of weakening global growth. >> don't panic as you see this sea of red. >> i don't think this is time you can go hand over fist in the bond market. >> we have not yet been convinced that we are going to see outright recession. >> markets have been may be too aggressive in the short-term and not thinking too much about what happens next year as well. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. on radio, on television, even full-day before and inflation