>> right now we are just bordering on calling for a recession. >> if we did get one there is a lot more room for spreads to widen and even exacerbate there's losses we have already

recorded. >> there is some believing -- it does undermine the strength of the economy. there is enough to possibly support a soft landing. >> the first time in the history of the fed two policy instruments, it may be able to escape crashing the economy to bring inflation down to its target level. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. hon radio come on television, an important date :00 our wall street time. retail sales, it is simple. i can get the full english breakfast at walmart for six dollars 54 cents. let's link walmart into what we are going to see in 29 minutes. jonathan: did you just confuse a full english breakfast with breakfast tea? looking forward to it. a: 30 eastern time, retail sales. then the reaction from chairman powell little bit later this

afternoon. we have said repeatedly on this show we know how consumers feel. they tell is in the surveys. they don't feel great. consumer sentiment numbers decade lows. what are they doing? we will get a snippet of that this morning. tom: we will review what we talked about two hours ago with the backdrop we got a guest coming up that says calm down about inflation, but there's no calm in the bank of america fund managers survey. jonathan: absolutely not. growth expeditions are at record lows. you've got an allocation to equities and an underweight the lowest since 2020. jp morgan's mark alanna much thinks we are pricing in risk. tom: of course, we are on our way to davos. of course, the song will echo across happy valley, "the hills are lies with the sound of gloom

-- "the hills are alive with the sound of gloom." price down, yield up. lisa: that has really been what is driving the gloom in equities because it is a full sail repricing. when it comes to retail sales, what is better or worse for the bond market? if we get a good retail print, does the fed have to do that much more to crimp demand and some of the inflationary pressures? if we get a weak print, is that a good thing because it means perhaps we are starting to see some moderation in some of the trends? things are getting flipped on their head in a major way. jonathan: -- tom: it is the fifth time they have done this, an ipo here in the oil boom for aramco. jonathan: the trading unit ipo, something they are apparently considering, according to our sources. they are lining up the banks. jp morgan, morgan stanley for

that potential trading unit ipo. the valuations sky high right now in that particular part of the world. tom: cold elon musk be involved? jonathan: i'm not sure about that. would you let's talk about the twitter deal? lisa: of course he doesn't. [laughter] tom: let's talk about what matters, which is brent crude $115. an hour ago, even with a good tape and the data check we need to do, brent front and center. jonathan: futures up 1.5% come of the nasdaq up by 2%. that tells you about the lack of confidence after we have been beaten up in this market so badly over the last few months. you'd's higher by three basis points. that inverse correlation is back. yields bouncing by three basis points. 3.20% the high two months ago. tom: now joining us, and this is a really important conversation for you on radio and television,

with 30 plus years of brown brothers harriman, synthesizes and all of the eco-bible into the markets -- eco-babble into the markets. all of the fed speakers, how do you tell them to calm down about inflation? tom: i think it pays -- >> i think it pays to be a simpleminded economist given what you laid out at the top of the hour. i would run the fed -- i would remind the fed that the price of anything is the interaction of supply and demand. if the fed has the ability to influence demand through monetary policy, but does not have the ability to influence supply, to a degree that lingering inflation is a result of lingering supply chain disruptions. the fed should not get overeager and raise interest rates too much to try to choke off inflation that ends up not being

demand driven to begin with. i think that is the story for inflation and the balance of this year. jonathan: let's talk about the story for this market. the jp morgan investment bank saying we are pricing in too much investment risk. do you agree, and how do you measure that? scott: i think that is right. i think the market is too pessimistic about the risk of inflation. in an environment where we are adding jobs, roughly 500,000 a month and wages are rising, combine this together, consumption is 8% of personal gdp. going into 2024, there's a recession out there. but i don't see that in the near term. where i think the anxiety arises is we are still in the midst of this transition of economic leadership away from the policies for a more easy pundit terry -- easy monetary policy and a lot of spending back to a more normal driver of economic activity.

i think people are looking at the glass as being half-empty. there are a lot of half-full notions out there. lisa: are half-full notions can -- are half-full notions something that would continue -- that would urge the fed to continue hiking? what do you say to counter that? scott: well, i think the entered that is what is really important , i think this is a source of a lot of volatility in financial markets, the important thing is not that the fed is raising interest rates, but why. admittedly that is very subjective. but if the fed is raising interest rates out of growing confidence that this transition of leadership was taking place, that is a pretty benign and even supported outcome. if the market can confirm that the fed is playing catch-up, that is a very disruptive

outcome. i had the push and pull between those drives market volatility not just a today, but sometimes even our tower. we have all seen these days in which the market opens strong and closes in the red or vice versa. i think that is likely to continue for some time to come. we are telling our clients to get used to the kind of intraday volatility that has characterized to the beginning of this year. lisa: given that, where's your highest conviction right now? >> with the rise in interest rates, we have begun allocating into traditional fixed income of the first time in close to a decade. for our clients at brown brothers harriman, plans are offering a better trade for risk and return them we have seen in quite some time. beyond that, the carnage in equity markets has left a lot to find. i take a very simple measure and look at the percentage of stocks in index trading below their 50 day moving average. as of last night's close, 78% of the s&p was below us a few day

moving average. 96% of the russell 2000 and 99.95% of the nasdaq is trading at the lowest 50 day moving average. that does not mean every thing is cheap, but certainly means there are plenty of trade-offs i've risk and return. tom: let's say you go down in flames with your inflation call. instead of getting 2% to 3%, you fail, you are wrong, and we get 4.2% inflation by the end of the year. that is a sea change from where we are right now. what does the stock market do if clemens is wrong? scott: that is probably more disruptive for the stock market. i think at the same time, the trajectory of inflation is important. in that environment i would want to own companies that have pricing power. companies that can pass through

those higher input costs to their end customers. that tends to be associated with brand loyalty, essential products and services, all the kinds of quality markers. not that they are immune from an inflationary environment, but they are a lot more resistant to it. jonathan: great to catch up, as always. scott clemens of brown brothers harriman. someone said to me the other day it is not about class half-full, glass half-empty. it is about if you can find a liquid in the glass. lisa: which is perhaps why they are hoarding cash right now. this is an issue why we are seeing a federal reserve policy we have not seen in the modern era. it is unprecedented and how much it is joined by the ecb and a lot of other central banks other than japan. jonathan: the team at walmart is breaking down the earnings on the analyst call at the moment. our team at bloomberg is giving

us some insights into what is going on. on wages, the first item the ceo calls out is a wage increase. the company ended up with more employees than it expected as people came back from covid leave more quickly than expected. it left the company with more staffing than it needed. the company resolve that issue through what they mostly say is attrition. the bigger issues, it is not just about the labor market. supply chain costs and the shift in spending away from general merchandise, which typically has higher profit margins then groceries. that for many people is going to be the bottom line. jonathan: the substitution -- tom: the substitution effect is a huge deal. a lot of people i would suggest have not lived it. i'm sorry, one of the first screaming fits i had at bloomberg was over words like attrition. i believe that his firings, is what they are trying to say.

attrition's. attrition. jonathan: i know. how many screaming fits have you had since? tom: four or five, that's all. [laughter] lisa: one of my first ones. tom: a percentage. that is to dilute. jonathan: from new york, this is bloomberg. ritika: keeping you up to date with news from around the world, with the first word, i'm ritika gupta lisa: in the u.k. get the -- in the u.k. the government's about to take a step that is likely to escalate tensions with the eu over trading arrangements in northern ireland. they will lay out legislation to override parts of the brexit deal in the coming weeks. foreign secretary liz trust says it plans to proceed with the legislation in parallel with talks. elon musk says he will go ahead with his 44 billion letters

takeover -- $44 billion takeover of twitter, but only if the company can sustain -- can substantiate accounts of fewer than 5% of bots and fake accounts. twitter says it is agreed to the full price. turkey president has put the brakes on nato's nordic expansion. he says he will not allow feeding -- allow sweden and finland to join nato because of their stance on kurdish militants. several eu defense ministers are optimistic that the turkish concerns can be resolved. it could be one of the world's biggest listings this year. blumer is learned -- bloomberg has learned saudi arabia -- learned saudi aramco is considering a spinoff of its trading unit that could have a valuation of more than $30 billion. ♪ 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 fed is still trying to bring down, slow the economy, slow employment, and bring down open positions because they are still worried about inflation

being too high, and it will be well above target for the foreseeable future. jonathan: jan hatzius of goldman sachs on the path forward. good morning. equity futures positive 1.5% on the nasdaq 100. two names to talk about, home depot and walmart. transactions at home depot just a little bit softer. the average ticket higher. that stock up by 3%. walmart down by 6%. this issue about moving away from general merchandise, focusing on groceries, lower profit margins versus higher profit margins, this is what companies like walmart right now are dealing with as this cost-of-living issue gets that much bigger. tom: we see it with retail sales across america and the huge body of america, the millions of labor at walmart. dana peterson is going to be with us after the retail sales numbers, but we are thrilled to

bring you someone hardwired to the retail of america, and particularly the aspiration that all of us are guilty of. dana is the chief research officer at tell c advisory group and lives new york retail like no one i know. i was absolutely crushed at the price rise on the celine hoodie sweatshirt come amends. i thought it should be in my closet. there it was. it was $800, and all of a sudden it is $990. everything is going up and rice, right? dana: it has. we are seeing price increases across the board on many different categories, especially on luxury goods. the consumer's buying, and we are seeing a wide range of consumers buying in terms of demographics and age group or get the brand matters and they find ways to pay for it. tom: what is so important here from the days at bear stearns

where you are doing channel shops, going through abercrombie & fitch, is the way we buy this stuff is fundamentally changed. how important for you and joe feldman is a firm, is paypal credit, is the access of get that sweatshirt now and pay for it later? dana: it is a sea change. it is very important, and frankly, it lists the sales and the companies are learning what to produce because of the options that they have buying in-store and online. the world today is more integrated, and we are watching influencers, watching instagram, in order to pick up the trends that are going to mean something on main street. lisa: what you expect in right now in these retail sales numbers? dana: i think april should hopefully be a little bit better. we saw gas prices coming a little bit. we still have an environment like was mentioned earlier, a

shift to services from goods. we are expecting a big summer season of vacation. you have 2.6 million weddings occurring this year. on average, people spend around $430 every time they go to a wedding, so you will still have some of that good spending. april should have been a little bit better, but inflation is a headwind, and that is in every aspect that companies are dealing with. jonathan: as people change the way they pay for luxury goods, do we have to change the way we think about who is shopping there? typically think we -- typically we think the high-end come earner for the luxury goods. dana: i think you've gotten the millennials and the gen z's. the brand awareness, the calibrations are making these luxury brands younger and younger while still keeping the ease house -- the ether's -- the ethos and the income of the hiring demographic. jonathan: we can spot the

average age in that line. what is going to happen here? it does not look that as you look further forward. dana: we need the chinese to come back and spend. right now you are seeing some tourism happen with europeans coming to the u.s.. we will need that asian traveler. but the product innovation is key. we have seen what demand can be. you seen it from lvmh, was happening with tiffany's, what is happening with balenciaga. they are luxury brands that matter to these consumers. lisa: there's a bigger issue, which is at what point will higher borrowing costs really matter, especially as more consumers do start to lever up in order to keep their purchasing at the same levels as before inflation took off in the way that it is now? dana: overall the consumer at the lower end, they are struggling. the middle income consumer continues to get some higher wages, and those wages are allocated, it may not be too goods, but allocated to services. above that made here is the question if there is a pullback

given what debt levels could look like. tom: your thoughts and joe feldman's work on amazon has been great, but i'm going to editorialize and say amazon has been a train wreck. your thoughts on how they turn it around. dana: there's work to be done there. the narrative two or three years ago that amazon was going to take over retail isn't there. it definitely costs more to be able to ship than ever before. everyone basically expected what was happening online to continue the growth, and we are seeing the shift of return to stores from digital sales that is helping the physical store retailer, and frankly, digital sales are moderating. jonathan: balenciaga is a brand i just don't get. what is balenciaga about? the oversized shirts, the oversized shoes. tom: i actually watched a short video on the guy, balenciaga.

he went bankrupt like three times, and every time he came out, he revolutionized what he did out of spain. it was always with drama. i guess that is what it is. i don't get it. jonathan: i'm convinced that in a few years they say, got you. this was all will joke, but you bought it anyway. i just don't get it. dana: i think one of the things they do, you can go by their windows like i did last night, they are putting things in their windows that, whether it is big inflated balloons in the look of a person, they are basically creating that something you need to see. and frankly, there's a difference between heritage and authentic luxury like what you have with the quality of the goods at hermes, and what is happening now that is in demand because of limited supply. tom: what does your universe do when we come off of china lockdown? dana: for luxury goods do very well, but also, don't forget

what china supplies. every manufacturer is looking to diversify their supply and able -- and being able to get the goods is key. jonathan: dana, thank you. tom: did you know that these sweatshirts, i thought if you bought a luxury sh it is n -- a luxury sweatshirt it does not shrink in the wash. lisa: can we put to bed the idea that women spend so much more than men? [laughter] jonathan: who was insinuating they did? lisa: that is typically the stereotype. jonathan: i would never suggest such a thing. [laughter]

jonathan: seconds away from economic data and america. good morning. live on radio and on tv, this is "bloomberg surveillance." equity futures up 115% on the s&p 5 -- 1.5% on the s&p 500. with some economic data, here's mike mckee. michael: it looks like americans are spending, if not a little bit less than they had been anticipated to spend, with retail sales on a month over

month basis up 0.9%. that is stronger than the month of march, which had been revised already up to 0.7%. it is a little bit less than the present that was anticipated by economists. the retail sales is up 0.6%, half roughly of what it was in march. retail sales without auto and gas up 1%. that is important because gasoline and food have especially been taking a bigger part of americans' budgets. grocery stores were down 0.1% during the month of april. gasoline stations were down 2.7%. that is interesting because we had thought gasoline prices had started to go up again, but they probably held about steady during the month. the percentage change is not as much. here's an interesting thing. on a year-over-year basis,

gasoline sales are up 36.9 percent, so you can see in inflation impact there. a couple of other numbers to point out here. electronics and appliance stores up one present after a decline of 5.2%. maybe that is a little bit of a rebound in what people are buying out of housing. the clothing and clothing accessories up 0.8%. non-store retailers, this is the group that includes amazon, 2.1% higher. that is a bigger change than the prior month, which was just 0.4%. food service and drinking places we talk about in honor of tom, up after 1.9% the month before, so that little extra he had at the hotel the other night contributing as always. doing his best for the american economy. jonathan: equities up 1.3% going

into the print. if you want to see a move it is at the front end of the yield curve. i think we can round that up and call it nine basis points higher at 2.66% on the two-year. it seems to me we are trading off the back of the gas number, which was an upside surprise. some really decent revisions across the board. tom: i look at this on a three-month moving basis. the revisions really matter to me. what is important on the celebration of the two-year yield taking a breather, we are halfway back to that 2.80% level. jonathan: 2.66% on the two-year. the heat is still on, right? michael: it does suggest we will see ongoing strength in the of his economy, which is what the fed wants to see. jim bullard just out with some headlines, one of six different fed speakers, including the chairman forget i'm not speaking today. well, i am speaking right now.

bullard saying he expects that household spending will hold up because the strong job market. he thinks the tighter fed policy is already having an effect, and i think he's there talking about the housing sector, and he does not expect recession in the u.s. or europe even though the europe -- even though europe and china are risk factors for the u.s. right now. lisa: we have been talking about how good news may be becoming bad news for the fed, the basically these numbers coming in strong and the upward revision from a negative to a very decidedly positive level for the prior month in the core group in the comparison control group really gives the fed mourns the div to hike further. how much pressure does this put on them to make additional moves? michael: it probably doesn't add a lot to them. what they want to see is where they are in july with retail

sales once we get through the next two months, the man june numbers before the july meeting, and then we will see where they go when they get to september because at this point, we know the economy is strong. it is a question of windows that additional weakness we have seen in housing because of higher mortgage rates bleed over into the rest of the economy. jim bullard suggesting it is not going to a whole lot, but we will have to see. jonathan: mike, thank you, sir. upside surprise, equities still elevated, 1.4% on the s&p. yields pushing higher by five basis points on twos a little bit more. that is a fed still facing the heat a bit here. tom: we've been looking at a wheel, $115 on brent, but all of a yield is front and center with a seven basis point move. dana peterson divides wisdom, chief economist at the conference board with their heritage of study of the american consumer. i know you're going to tell me

all consumers matter, but which consumer matters to jay powell? is the walmart consumer, the housing success, home depot consumer, the luxury consumer? which consumer matters? dana: you are right, all consumers do matter, but i think for the fed, that is very concerned about your lower and middle income persons who are struggling in higher inflation, whether or not they will start pulling back in consumption because prices are rising. they are also concerned about young millennials looking to buy that first home, and as interest rates are rising, it makes it more difficult for them to get out there. lisa: we are seeing people start to real average with credit card spending. we have been talking about that all morning. how concerned are you about this triggering more action for the fed or perhaps patting numbers

in a way that is sustainable for the long term? dana: many people are starting to shift their buying habits. a consumer confidence survey shows that in the present situation, people are optimistic. they are starting to buy cheaper products, buying less. but they are also thinking about reducing their expenditures on purchases. when it comes to big ticket items, they are going to delay those purchases. certainly if people are using their credit cards to supplement their incomes as they are buying necessities, that is a problem, and certainly higher interest rates will just make their balance sheets even more fragile. lisa: you pointed to what people are saying. what they are doing may be some what different because we are hearing pessimism about how people are paying, but when it

comes to retail sales data, they are coming in strong. when it comes to home depot, came in strong. which side are you? are people not doing what they are saying? dana: just going back to our last consumer confidence survey, the presence tuition showed that people were still in great spirits, the labor market was doing well. people are looking ahead, concerned about the economy in the future, and certainly they are expecting that with higher prices and rising interest rates , that that may affect their consumption, but may also feed into their labor market prospects. but people are doing now is consistent with the data, but also looking ahead. tom: on the supply front, we have guests talking about what i am going to call a rapid decline in inflation fears.

we get to the end of the year and things are just flat out better with less inflation. do you buy the story? dana: that is really incumbent upon external factors. number one, do we see a resolution to the war in ukraine, where you don't see the upward pressures on commodity prices, including food, energy, metals, semiconductors? it also presupposes that the lockdowns and china don't continue. certainly the chinese government has a zero covid policy and shuts down entire cities. so unless we see those external factors alleviated, then it is hard to imagine a connection later on this year. jonathan: good to get your views, dana peterson of the conference board. goes back to the conversation we have had all morning. the output numbers are decent read we are told repeatedly that consumer balance help --

consumer balance sheets are strong. for that reason, people think the fed has to go further than many others believe. lisa: right now the tolerance to higher rates seems to be a lot higher than some people might want because it means the fed has to go further and really raises a prospect of that downturn. this is the reason why it but -- why it could be consistent people believe the biggest tail risk is the fed hiking more than it expected, but over the longer period, that would probably trigger some sort of downturn, and that is what a lot of people are trying to bake into some of the pessimistic views we are seeing expressed in markets. jonathan: we've got to think about where the states have landed your we are talking about earnings from back in march. those changed march through april, into may, going through this summer. things are going to get harder. lisa: and it is also important to keep reminding everyone that retail sales are a nominal basis , so this means on a real basis, they are negative or get they are going down. he saw that the total get were

down by 8% or more. but in terms of the volume, when it came to the revenues, they were up more than 11% because of this higher prices. at what point does that bite the real economy? jonathan: chairman powell coming up this afternoon. the amount of fed speak we've got through the day is phenomenal. what you looking for? tom: it is going to be a drinking game after arsenal. whoever is data dependent. i mean, come on. jonathan: is that your new drinking game? you said all the time. tom: i had a wonderful conversation years ago with richard berner, who worked at morgan stanley. just real quick, they are talking too much. my problem that? lisa: the fed officials? jonathan: yes. most people would agree. they are all talking too much, but is it all of them, or would you just like to hear from more person debt from one person a little more often? i will leave it to a pro on

that. jonathan: but they are data dependent. they are data dependent. tom: i'm sorry, they are data dependent. jonathan: there we go. this is bloomberg. tom: they are data dependent. ritika: keeping you up to date with news from around the world, with the first word, i'm ritika gupta. elon musk casting more uncertainty over whether he will actually by twitter. musk says he will not move ahead with his $44 billion takeover unless twitter can prove that ott's makeup fewer than 5% asked that bots makeup fewer than 5% of its viewers. twitter says it is committed to completing the deal at the agreed-upon price. the u.s. senate has over whelmingly moved towards package of more aid for ukraine. the package of military and

humanitarian assistance has been held up republican rand paul, who has demanded changes. abbott laboratories reached a packed with u.s. authorities that will allow it to begin making baby formula again at a troubled plant in michigan. the plant has been shut since four children were made sick by bacteria. two died. accrued -- a court still has to approve the treatment. there was strong demand for home improvement supplies despite rising interest rates. customer transactions fell in the order, but the average ticket increased. 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. ♪

today's challenges require real insights, to get to tomorrow's opportunities. ( ♪♪ ) what can we expect in the coming year? this has been a record- shattering year for m&a. five trillion dollars in deal value. and we're still very bullish on the deal market for 2022.

in this kind of climate, what are you advising clients to focus on? we really think companies need to elevate their risk management processes and also scenario planning. what's your outlook, kim, for the 2022 labor market? organizations really do need to take a pivot on their lens of their people and talent from a cost center to make that a value creation center. for key insights into what matters today and what lies ahead for business, this is real time business with ey.

>> most forecasters>> have the real economy growing at an above trend pace in 2022, and also in 20 when he three -- in 2023. so just taking that as a benchmark, it looks like above trend growth for the u.s. economy is the best base case to have. there are always risks around that, but i think that is where we are. tom: and so it begins, an eventful day of fed speak. we will continue this on television and radio throughout the day. mr. bullard of st. louis speaking at the council, and many others as well.

futures up 60, vicks comes in hundred 27.26. -- comes i -- vix comes in 27.26. craig up to this cricket that is with us. -- kriti gupta is with us. kriti: this begin almost four recessionary spending, this is an import ratio because as you look at home depot relative to walmart, that ratio tends to drop in recessions. guess what it is doing right now? it is dropping pretty steeply from the start of the year. it is import to keep in mind the way the price action is working is that it mirrors times of recession. but here's the thing, we are not in a recession you are seeing signs of growth, but not necessarily an actual recession which is why this is important. is the market selloff overdone?

tom: greatly appreciate it. it is like the sun coming up in the east. you can understand that any criminal or civil litigation, there are events down the road where you go after the big fish. that has happened this morning with a publication by our banking senior reporter, which barely describes his expertise on new york and global wall street. thank you so much for joining us this morning. this is about a hong kong conglomerate, online trading, whatever. the stock does not matter. the lang of archegos -- bill hwang of archegos, it goes the wrong way. is he suing for letting the beans out? sridhar: we know what happened, bill hwang with charges for the total collapse of his family

office. months before his liquidation, there was another big shot on his stock. the chinese take on robinhood, he sought to get out of that position. but soon after he was caught in one epic short squeeze. he lost nearly $4 billion. tom: this is not martha stewart or anybody else on insider trading, where it is pretty much cookie-cutter. don't you just go back and look at the emails, look at the transcripts, or is this about more cleanness time -- more clandestine studies within the court system? sridhar: we had no indication of the time that they thought anything was amiss or that bankers could have done differently, but since the emerging target from the doj doj, it appears as though the archegos theme has stalled the

justice department that they should review the transaction and see if morgan stanley goes incomplete. an army of investors were targeting massively shorted stocks. from what we understand, bill hwang and archegos one the justice department, one the other authorities looking into it to view the transaction and make sure everything was on the up and up. lisa: there's a distinct and between punting blame and casting liability. what is the potential liability for morgan stanley should bill hwang be proven correct? sridhar: that is where we go on a completely separate track. we know about the archegos probe , but we also know morgan stanley is the only major wall street institution that has said it is facing a probe into its block trading practices. it even said it faces potential civil liability with some of those claims making claims against them. there's no indication we have

right now that the justice department is even taking the claim seriously enough to go knocking on morgan stanley stores. but the numbers paint quite a stark picture. lisa: is it fair to dovetail this particular probe to a wider issue where you are seeing whatsapp communication, cell phone apps, all of these individual types of services being probed by the banks themselves, trying to keep track of what their employers are doing at home so they can better deal with regulators? how connected is some of that? sridhar: there's no doubt we are living in the regime of the everything crackdown. clearly the prosecutors, there's a change in mindset. they are going in on a number of fronts. they are all over it. tom: i am in a triple leveraged all-cash fund, so if i buy 100

shares of home depot, nobody cares. if i own 1.373 million walmart and i want to unload 260 6000 shares, how do i do that? sridhar: you would not be able to do it discreetly, soup better make sure you pick your bankers very carefully. tom: this is critical, folks. you know going into you are sell or buy of a block trade that it is going to be visible. lisa: you know that the bankers -- sridhar: you know that the bankers will channel the market area maybe there isn't any other way for them to do this. there are only so many restrictions they can play some people, and that is why the justice department may have a case for these moments in the purse place -- in the first place. tom: i think arthur levitt would be great on this as well. this is not about individual traits or small insider trading

that we mentioned earlier. when you've got 1.69 one million anyone to unload 32,000 shares, in some ways it becomes public. lisa: that has been the big argument in bond trading for trying to keep it less because people don't want to move the market ahead of different transactions. in stocks, the hope is for things to be liquid enough that even a block trade should not with markets. however, this is a good point. we have not seen forced selling. we have seen people slowly move away or shift allocations, but not forced selling yet, even with all of the pessimism. how liquid is this market when there is forced selling? tom: brent crude we can walk away from, down to $114. the bond market is not there, but it is migrating back to the higher yields of a number of days ago. lisa: retail sales confirmed, a

strong consumer. i saw it with renaissance macro research, neil dutta showing that retail sales is up some 18%, so it is being inflation. a sickly the health of the consumer gives people confidence the fed can keep going -- basically the health of the consumer gives people competence the fed can keep going. tom: christine lagarde scheduled to speak as well. the vix, 26.73, a better market. stay with us on bloomberg radio and bloomberg television. ♪ a comprehensive wealth plan for your full financial picture. with the right balance of risk and reward. so you can enjoy more of...this. this is the planning effect.

jonathan: live from new york city, good morning. the countdown to the open starts right now. >> everything you need to get set for the start of u.s. trading, this is "bloomberg: the open" with jonathan ferro. jonathan: live from new york city, we begin with the strength of the u.s. consumer. >> the consumer has been the heart of this economy. >> consumers are spending. they sti