>> the damage is done, the pricing of the yield curve affects the fed it's going to do a lot. >> how much of the sector is going to have problems as rates go up. >> everyone's looking at is this a cycle ending bear market. i look it it as a normal correction. >> the fed is effectively trying to thread the needle wearing oven mitts blindfolded.

>> this is "bloomberg surveillance" with tom keene, jonathan ferro and lisa abramowicz. jonathan: can we avoid a seventh straight week of losses. from new york city this morning, good morning. this is "bloomberg surveillance live -- "bloomberg surveillance" live on tv and radio. tom: a churning to a monday. the currency market is there, the equity markets just can't get a bid and there's the drawdown on radio, standard & poor's -16%, maybe that's expected in the nasdaq in particular the nonprofit making nasdaq crushed. jonathan: mike wilson exceeded crushed even more. this could pass 3400 on the s&p. valuation and technical support live. tom: everybody was adjusting a

not to criticize this extremely difficult to do the point of where you're going and the timing of verio going and a lot of adjustment over the weekend. i'm just an essay everybody is data-dependent including equity market strategist. jonathan: last week the fed president gave the game up for a lot of people. again and again, i expect financial condition to tighten even more. i would like to see continued tightening of financial conditions. what does that tell you? lisa: this is kind of what they welcome. this is what they're trying to gather in the market which is a less optimal financing condition for people who want to get out there and get going because it's antithetical to what they are trying to do which is essentially slow demand. i wonder how much of the decline we've seen so far is because of tightening and how much more could, if people do agree the growth scare is real. jonathan: data point of the morning out of china, in

shanghai they did not sell a single car last month. what a story developed there over the last few months. lisa: why buy a car if you can leave your house. the revocations of that in economic data that was worse than people expected. now we wait for china to respond with policy measures. jonathan: down towards four this morning. lost time is never found again. they're looking for something the low fours on gdp. our collided talk with richard haass last week. it's real simple, they on the high ground here, this is the leadership in beijing that has to react. i don't think we are calculating the pressures they face as they go to that party congress. >> build on that. some people think we go four

point one, maybe even 3.9. you have them looking for the high threes. what can they do? tom: on china there will have to figure out a covid policy that dovetails with a china that's working. what you're doing now is not working. is no question about that. are you the liberal lockdown amendment or in an end to the lockdown. every interview with outcome study china and vaccination. >> futures on the thought of 1% in the s&p. down a half of 1% of the nasdaq 100. yields how are for five straight weeks. then last week yields lower. by betty basis point, and lisa, euro-dollar how many calls overseen. >> was coming to spray to parity. if the ecb does decide to hide

weeks, it's a resilient if they don't decide. what to do. in the u.s. this is counter to retail sales tomorrow. the economic data point of the morning, empire manufacturing data coming out, the latest read on what happens in may with respect to manufacturing and respect to deliveries and demand. especially in light of the consumer sentiment survey that came out at the lowest levels going back to 2011 really decelerating more than previously expected. the new york fed president is planning to speak at the mortgage bankers association event in new york. i want to understand his view on housing as mortgage rates rise to the highest levels going back to 2009. at what point do they make a hole in the housing market. there's a news conference after meeting of eu and u.s. officials. the trade and technology council talking about supply chain issues. how do we deal with russia and the invasion of ukraine and the

oil prices in particular. among those joining the u.s. commerce secretary. both the european commission, not only having to do i was saying this before with russia and ukraine but really china because that seems to be the elephant in the room. tom: front and center particular after that data this morning. evan brown, you've got a strong dollar call. a framework for the way you're thinking about this market. how important is this change? >> it is important because it creates i think more uncertainty because we seem these persistent surprises and -- surprises in inflation that they have to continue to ratchet their tightening. we have this dynamic where you're starting to see inflation peak but where will be level out at. that's the big question over the

coming months really the second half of the year. with -- what's forecasted after this trend, down a little bit or below expectations. we are so data dependent right now is that a change in trend. so the potential economic outlook and concerns for markets are really uncertain and that may continue volatility. tom: is growth dead? >> i do not think so. talking economic growth? tom: i'm talking growth stocks. jonathan: we've been talking economic growth. [laughter] tom: i expect that kind of answer from lou -- from lou. use the snark. growth stocks. >> it is definitely not. we've seen a significant

derating of growth stocks obviously. disproportionally where it should be happening were seeing where you would expect when you bring out the excess and put all this money into the space. you just don't have the future earnings power. talking about some like apple, this is a company that has persistently been able to put up earnings and will consistently be able to do that in the future. some valuation depression yes. maybe some earnings coming off yes. but those stocks are far from dead. lisa: even after being optimistic, particularly early in the year on the prospect for stocks to keep outperforming. >> earlier in the year we were quite optimistic and then we had the series of shocks i think that stagflation is early in the u.s. to talk about, we are still in a pretty good economic environment.

policymakers are trying to slow growth and hopefully they thread that needle, but in europe and with what europe is dealing with with ukraine war and what china is dealing with with covid. these are shocks no question. you are seeing stagflation in places like the u.k., that's something we have to hedge against and everyone knows commodities are replaced to hedge in that area. it is a tough environment for your typical stock bond portfolio. >> your strongest conviction view, is it foreign -- can you give us an idea of where you think this is heading. evan: i think it's at least parity on euro-dollar. like i said, those growth risks are much more a feature of the

ex u.s. growth environment. europe and china not making decisions purely economically driven. hades brave and commendable their moving in the direction of an oil embargo later this year. that is a very risky strategy. that is a big concern on economic growth. china, it's cultural. they're trying to protect their elderly population in pursuing with this policy and finally you got solid u.s. economic growth but you also have people like a dove on the fomc saying we need to continue to raise rates and tighten financial conditions, all of that plays into further dollar strife in there.

jonathan: euro-dollar parity for the team over at ubs. dollar cnh at seven. tom: over the weekend we began to finally see that. this is a big thing for wall street firms for global firms in city firms. it is not as un-american, but there's just something about parity which i think people really run from. it's a tougher decision than saying we will go to 105. jonathan: this time it suggested the europeans don't want to do there. tom: this is one of the great signs of a slowdown and juergen have to translate. this is a minister for safeguarding all over the british news. everybody's got in the u.k. news. this is someone with a very serious job, all sorts of social issues. the minister says in london take on more hours and get a better paying job.

this shows up like clockwork. jonathan: i don't know what to say, tom. i'm at a loss for words. just how detached policymakers are from reality is unreal. tom: it's like a switch -- it is a gay swiss watch. jonathan: the one thing -- it is like a swiss watch. this is bloomberg. ♪ >> it is another dramatic change in europe's security triggered by russia. finland and sweden announced plans to join the nato alliance. turkey is unhappy that sweden has been linked with kurdish militants active in turkey. china's economy paying the price. they fall into the worst level since the start of the pandemic.

industrial outlook unexpectedly fell in april was consumer spending shrank 11.1%. economists at goldman sachs have cut their forecast for growth. mcdonald's is leaving russia after within three decades. and take up to $1.4 billion. they said in the wake of the war in ukraine continued ownership of the business in russia is not consistent with the company's value. jetblue began a 3.3 billion dollar hostile takeover attempt of spirit airlines. it is urging shareholders to vote no on the takeover by frontier airlines. jetblue says it would pay the higher price if spirit agreed to

a consensual transaction. 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. ♪

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>> this is really the moment for europe to take itself to the next level.

to legally enter ukraine in the process. >> sitting down with maria tadeo. from new york city this morning, good morning. on the nasdaq 100 down tenths of 1%. yields essentially unchanged on the 10-year. goldman sachs, complaining about working conditions. i just love the way this is going to work out. on a serious note to get the unlimited time off. you don't go with the maximum or limited you have to go with the minimum if you want people to take time off. a new minimum at golden -- goldman is 15 days off. >> there will be lots of giggles on this. it is an addiction and it's not

funny. i will make it clear it's a really serious issue and as matt miller brilliantly said in the 5:00 hour this is about the united states of america and it goes back to the construction of the work ethic, i will put it about 1820 or 30, they codified franklin earlier and it's a unique american disease. jonathan: it's counterproductive in a lot of ways. if that can be carried out through the business i think that would be super effective. tom: i think it is easily solvable. jonathan: are you admitting after having a go at us in europe a long time you admitting they should go the european way? tom: i'm not saying that. jonathan: basically. tom: the bottom line is at gunpoint you say you are taking off x days avoid you are doing,

we will shut down your phone and security and computer, just do it. jonathan: you are sounding european i've got to say. tom: what is a holiday, two weeks? jonathan: two weeks i think consecutive should be forced on everyone. if you get paid leave without a doubt. tom: right now maria tadeo in brussels with us for the interview with ukraine foreign minister. maria, what did we learn in the interview? what was the distinction that mattered? >> there are two things he made clear. they were disappointed by the fact they didn't get the treatment sweden and finland cat when it comes to nato and the past hope is joining european union. the other takeaway is the peace talks with russia are over. they had been on the phone for

weeks but now if you listen, he made it clear we don't want any type of cease-fire. what we want is a big victory. making it clear to russia do not try again. lisa: we had the idea of and sweden joining nato. how significant is this and were looking for in terms of response from putin? >> this is a watershed moment for finland and sweden. if any of us have been asked to get with the potential of these countries join, two months ago it would've been no. this is a huge u-turn in their policy. they say this is a security threat and they are prepared to act. a lot of european officials are skeptical about the spread they see the mass, this is very well prepared and they were very nato

compatible. they are ready to go. the expectation is by the end of june, this will get clear. there is a veto that's unhappy about sweden. overall, everyone i asked tells me by the end of june it's a done deal. jonathan: we've seen opec meetings last from 10 to 15 minutes, what is the relationship between this administration, other partners in the gulf and what they're going to do about the energy situation. >> today, the united states is trying to show a massive show strength in this relationship and try and fortify at. you've seen the high list of officials making their way. the new leader after the death

of his late half-brother. with the vice president leading the investigation. dusty delegation. on top of that we have the secretary of defense, climate envoy john kerry, the list goes on. u.s. official said to me about strengthening the relationship. this comes at a specific time in this administration. the golf had -- gulf had security issues. they did not want washington reentering at the same time the u.s. is asking for something. so far the kingdom and the uae with their capacity are snubbing them. jonathan: she is not on vacation just be very clear. >> it looks like a vacation. jonathan: she is not on

vacation. it looks like it and sounds like it but it is not. tom: there are 14 hotels in abu dhabi with healing pads where that helicopter lands on the hotel and john is just simple you can watch the sunset soiree there. >> i can give you a quick glance of the ocean. jonathan: on this not a vacation trip. >> this is where some of my other colleagues are. jonathan: that is not a vacation. tom: everything -- >> i have yet to go to the beach. lisa: basically these segments are turning to why aren't we able to go to the places they go literally every time. jonathan: if i hear any more complaints. tom: what is the mood in

helsinki? >> about tomato? -- about nato? they have been preparing this for a while now. this is an army they feel is compatible. tom: i am just trying to get a road trip there. jonathan: thank you. not on vacation. tom: the sun never sets. lisa: it is unlimited. jonathan: futures down one third of 1%. this is bloomberg. ♪ at fidelity, your dedicated advisor

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jonathan: lisa talked about crashing markets. exactly the same when it's on air. futures down. the nasdaq down about a half of 1%. wondering if we will make it seven or not. it has been brutal out there.

goldman on the equity market, downgrade from year-end. this fed has told us they want tighter financial conditions. essentially the fed has told us there's not one, equities up and a weaker dollar and all of the above. be ready to push against that. maybe who knows again. that's a change we need to get our hands around. evan talked about a trend inflation story. peak inflation to hire trend inflation. what does that mean for this market and for the two-year? they are at 350 year-end on a two-year. right now on the two-year, 258. bank of america do not think we've seen the peak.

they think the fed will push forward and when we reassess they will be reassessing in a way that drives yields higher, not lower. take a look at euro-dollar right now. 1.0 426. we came very close to taking out the intraday low of 2017. can we get close to that level on friday? this is the call coming through again and again by people. we bounce, we rip, it's different for some people this time around. the ecb is really struggling. what on earth can they do about it. tom: calculated at 1.16 and we get ever farther away from the map of decades ago.

is it like dow 10,000. it is an emotional statistic. the difference is a big deal for them. jonathan: no one is putting a baseball cap on and celebrating. lisa: we heard from certain officials coming out saying they are concerned about the weakness in the euro that could essentially become a problem due to importing inflation. >> the ecb meeting looking forward to it. i can't even keep a straight face as we say that. >> we are continuing here in the u.s. equity market, the sentiment driven market. one of the biggest barometers for risk sentiment out there. coming off a seventh straight weekly losses despite that rally on friday. shares lower down 6/10 of 1%.

not really seeing a lot of this, in. one of the outliers is netflix. this is on the back of an upgrade, taking this to a bioequivalent rating. this will be a slow growth company but it will be immensely profitable citing the moves the company has been putting on the table, a staggering sum of its more popular programming and then keep an eye on mcdonald's. the end of an era here. now basically going to d arch business in russia, selling off all of its business is in russia. it appears that era is over. a lot of deals going on out there today. jetblue hostile at spirit

airlines. lower than the bid jetblue had on the table. they will bring it back if spirit is willing to come into this. nevertheless spirit airlines up on the day just slightly weaker. keep an eye on the april 1 close of twitter right before elon musk disclosed that passive stake. stocks rallied. but now it's going to retrace all of its gains. those shares down in the premarket. tom: before the advent of financial media there was an understanding bonds were not just full faith and credit.

the financial media only quotes full faith and credit, lisa has made a career of looking at credit. in the old days you what a blue book and you thumbed through it and looked at corporate bonds. and they said you can enjoy losing money in corporate bonds. how much are we losing now with the aggregate index down 10% plus. >> a couple of weeks ago we talked about how the high yield total returns were off to their worst start on record. i think the key risk for bond investors in our view is that's been entirely driven almost by the rate component. in the event that we do get a recession which is not our base case. but if we did get one there's more room for spreads to widen and exacerbate those losses we

recorded here today. that is one of the key risks to the market. tom: investment grade old-style bonds as part of the aggregate index, what do you do where equity people say we will go to cash or a think there's a dialogue, what to bond people do when they want to go to cash. >> they often move quality or short in duration. actually moving too far up the quality sector also has its risks because those of the companies that are likely to move ahead on aggressive shareholder return irrespective of the slowing economy. we white -- we like that thought of triple b bond rated terms. they are likely going to behave in a more conservative fashion

relative to their highly rated cash rich pharma and tech companies that will do, and day regardless of the backdrop. >> where are we in terms of pricing what we have in the credit market now. that was not due to the extra cushion of yields for potential defaults. now we are shifting into something else. how far in that process are we? >> we have not priced in a lot of default risk and specifically zooming in on the high-yield market and we do think that that's probably appropriate at this stage. our economists are not expecting recession as their base case this year. even if we do have a downturn and growth slowed substantially, the high-yield market is unlikely to experience the uptick in default we are used to seeing in previous cycles. we didn't have a default cycle

that long ago. in 2020 had the weaker firms cleaned out of the market. energy and metals and mining are also in a much better position now relative to previous cycles. and then also we have a lot of cash on hand. so to answer your question specifically we are not baking and a lot of default risk in the market. right now it's based on current spreads of 450. that's probably not inappropriate given the higher quality. >> a lot of people would agree with you and we see this note after note. things don't have to get that bad in credit because people pushed out so far because there was this washout. what does that mean in terms of how high the fed can go with the rate before we have a real problem in credit. the 10 -- potentially would respond, not everybody is having

a bad day. >> a large amount of that is already reflected in futures for example. i think there's a lot of room to go for financial conditions to tighten and for the fed to deliver on the hikes that are priced in. the market i think credit investors are expecting that. the key risk for credit is if we had it freezing up the primary market activity such that corporate if they wanted to access the debt market could not. right now we are saying a lot of supply volumes are due to an unwillingness to access the market on the side of corporate's as opposed to an inability and that goes back to what you mentioned. corporate have the luxury of being patient. they spent most of 2020 and 2021 spending cash. they are not at the whim of the market in terms of having to

execute in these conditions. really on those windows of stability you are seeing that activity. much more challenging in terms of timing that appropriate. jonathan: tom will be so jealous that real yield got the plug. tom: why would i expect anything else? jonathan: amanda is a good friend of the show. tom: let me tell you the real world here. i have a gmp's 10 years out in january. i'm enjoying a 15% climb in price annualized 39% climb. for retail that's the real world. jonathan: coming up, the former secretary of defense.

are we going? tom: plug the real yield. jonathan: you are going to have to get over it. futures down on the s&p. this is bloomberg. >> keeping you up to date with news around the world. twitter is on course to wipe out all the gains. shares are lower in premarket trading today. muska tweeted the deal is on hold. germany plans to quit importing russian oil by the end of the year german officials are confident they can solve logistical problems in the next few months. the declined before the war in ukraine. ryanair issued a guardedly optimistic outlook.

a strong booking trend could still be disrupted by a number of factors. >> in every past recession we grow stronger and faster because they get more price equity. we will be the beneficiaries of a downturn and i look forward with some optimism to an economic downturn. we keep pressing -- passing on value. >> they are expecting what it calls a reasonable profitability this year. u.s. officials investigating a public act of killing in buffalo as violent extremism. an 18-year-old white man was arrested, posting a document online.

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. ♪

>> other companies i think are growing -- going through situations in china, the never ending lockdowns. i put them in that camp. jonathan: the senior research analyst at rosenblatt securities. this is "bloomberg surveillance." on the nasdaq 100 down about a half of 1%. yields unchanged. tom: let's jump to over the weekend, food.

the food on your menu or the grocery store. i'll seven is particularly expensive. the core of it all. wheat. lisa: this is really where you are seeing a lot of pain when it comes to food inflation. india creating an export ban, they are not actually going to lift they will try to address the food shortages right here at home. we will see wheat futures have digested this action. they are going down and testing the level in mid-march. ukraine and russia together make up over 25% of the world's grain supply. when you see this issue with india which isn't even one of the biggest exports it brings the question or the spotlight how many other countries will

follow the same pattern in order to talk about the domestic interest. tom: front and center the u.n. food indexes basically a moonshot at this time. enda knows that china is not a moonshot, our chief asia economics corresent. how surprising with the numbers today? >> things are even worse than people were expecting. it shows how deep the lockdown and the restrictions are impacting the economy. the big thing for me was the big drop in retail sales. we saw these surveys. within that, youth employment was a record rate. that goes to the core of the government party mission.

definitely showing effects of the aggressive covid zero strategy. there is a view that it's at the bottom. the question is how long will it take to recover from here. lisa: a lot of people are looking to policymakers in china for some fiscal easing. in order to ignite and reignite the economy. can chinese authorities do anything to fill in this pain in a very widespread at a time when people are the pace they were before. >> they are calling it -- the idea is they can't get forward to covid zero. the central bank is taking those steps to get money to the

economy. so really it's more about putting a floor on the amount of pressure. we did have one material over the weekend bringing down mortgage rates for the first time homebuyers. it demonstrates policymakers are going beyond more my new show measures. it does indicate officials are concerned. >> i know public sentiment is somewhat a difficult thing to --. how much has you jinping lost support since they in their homes can't get enough

vegetables or suffered more broadly because of a lack of transportation and personnel. how much has he lost? >> answering that on a scientific basis, anecdotally in terms of open-source social media, there's a lot of discontent on the ground. certainly the foreign chamber is raising their voice saying this is unsustainable. today in the chinese press basically underscoring the economy has to be looked after. all that said, there's no hint of a political pivot from the top. the public messaging has been covid zero is the way forward. they do not want a public health

crisis on their hands. for now there's a question of how can they manage covid zero. tom: you have chastised me that have gone deep into china 1200 feet from the harbor in hong kong. from shanghai, what does the lockdown -- what is the lockdown like in the rest of china? >> you are right, right around the rest of china there are variety of not -- it's restrictions. even beijing for example. it's not technically underway lockdown but it is under rolling restrictions. that level of disruption we've

seen across the country. shenzhen went into a lockdown maybe two months ago and they contained the virus. there was optimism that there was a way out. most saying if they do contain omicron this will continue spreading and it will mean more restrictions and more downward pressure on the economy. jonathan: always good to catch up. the very fact this is the official data we are talking about is dreadful. lisa: that's why everybody has shadow statistics to understand the ramifications for europe and honestly have we fully priced in what that means with respect to supply chain, further inflation. jonathan: the impact of covid

lockdowns proved larger than expected and set to extend it to june or even beyond. they've gone down to 4.2 from 5.1. >> within that note is the idea of medicine to the rescue. china has chosen not to do that. to me it's much more of a medical issue. >> the worst is perhaps over as the government looks to set up its support or step up its support. from new york city, good morning. this is bloomberg surveillance. ♪

>> the fears we have today are tied to one thing, inflation. >> h