shortfall of gravitas. they are going to bring that puppy down and land it on a conventional barge in the atlantic ocean. it's stunning. i still am not used to that idea of the retrieval of the main rocket. this is kerosene with liquid oxygen feathering off. that has only been loaded in the last 30 minutes. we need to remind people this is an unmanned flight. jonathan: walk us through the difference of the vanity project of space tourism and what's playing out before our eyes. tom: john has been with me with the beverage of my choice. usually when we are doing space launch, i use tang. seriously, this is up to orbit, actually doing things in space, not a toy stride with all of those tensions come with the speeds to get up to orbital velocity. jonathan: coming up to 10 seconds to launch. let's take a little listen in.

>> t -10, 9, 8, 7, 6, 5, 4, 3, 2, 1. full power. and left off. -- lift off. >> falcon 9 has successfully lifted off from launch complex 30 98 carrying our 53 starling satellites into space. moments ago we did throttle down the engines on the first stage and this is in preparation for max q. max q. is the maximum dynamic

pressure that the vehicle sees. tom: that's a key point. the maximum dynamic pressure is the differential of these very heavy payloads. the fundamental issue of this back to the space shuttle is the weight of what they are putting in space. that was an immense chemical challenge for private and public for nasa to do, to get the chemistry right, to put bigger stuff in space. just going for mercury through to apollo was a feat with a saturn rocket. but you can see and on radio you know that these rockets today are much smaller than the saturn five rocketry of the world ago. jonathan: this falcon 9 rocket topped with 53 starling spacecraft. a successful launch this morning. we are going to leave the pictures up for you. we will continue the market coverage. futures negative.

we are down by .4%. from walmart to target, margins under pressure. lisa: this is really the first salvo in terms of seeing real margin compression that is unlike what people were expecting and it is coming at the basic aspects of the u.s. consumer economy. walmart and target. what percentage of retail sales does not account for. and frankly they are still selling. it's just that they cannot pass on the costs. jonathan: let's get to equity strategist at wells fargo securities. the margin pressure from walmart to target. your thoughts please. >> it is certainly a big indicator. they employ a lot of people. as people have a tighter labor market and yet if people are spending less, the question is

can companies pass along price. this is sort of what we are looking for. they wanted to see demand cool off a bit to balance things, to bring inflation more under control. so it's sort of what we were hoping for but also a little concerning on how much this raises the possibility of recession. tom: we are looking at the physics of a rocket launch right now and they mention the maximum dynamic pressure. you did this violate in your physics of undergraduate -- ballet in your physics of undergraduate. are we at the maximum dynamic pressure of inflation right now? >> i think it's going to be harder to get that soft is splendid -- softish landing. we are seeing that's going to take several more quarters. tom: let's go astronautical --

aeronautical again if we can. the acceleration function is a squared function. guessing time on the x-axis is the hardest thing to do in this racket. what are the determinants you are going to use to guess when inflation rolls over? >> one is the dynamic between how does that good spending go versus the service spending. when you have a tight labor market and companies have to be competitive and raise wages so that consumers actually have more to spend, but how will that offset with companies being able to pass along price because consumers have more money to spend. a third component i think we are under appreciating is right now household wealth is heavily tied to the equity market. we saw a historical amount of nearly a quarter of household

wealth tied to it these. -- tied to equities. you could see that souring sentiment bleed into consumer spending. we are not quite convinced the consumer is really decelerating. lisa: can you elaborate what you said which is this particular series of reports is a little concerning with how much it raises the risk of recession. how so? >> when you talk about what is the possibility of recession, for us it is not our base case. we still put the possibility by the end of a recession by 2023 at around 30%. the main driver and something we have all focused on and relied on to pull us out of the recession post-pandemic and continue to drive our economy has been the u.s. consumer. the strength of spending and the willingness to spend not just on

goods but as covid and lockdowns relaxed, on experiences and get out there and travel and put that money to work. as that driver starts to cool down, our margins really come under pressure and not the earnings growth will turn negative. that gdp growth could turn negative. not air base case, but the tail risks are getting bigger. lisa: a number of strategists have come on and said they still like consumer discretionary. would you back away from that idea based on what we are seeing right now in these numbers? >> i wouldn't particularly back away, but perhaps it wouldn't be our number one call here. we are still positive where you can have leisure spending. reopening space. the travel industries. what we have been looking at

very carefully especially with the tightening of monetary policy has been the growth style. we think we are starting to see the bottom. we are starting to warm up to it again. tom: when we look at the market adjustment year, it is of central banks. it is off the fed. i'm focused on the nonlinearity of the fed decisions they have to make. it's frankly true for ecb as well. link equity market performance into the massive challenges the fed has after the july 27 meeting. >> you bring up a great point. how are equities going to handle it if the fed continues to tighten and we start to really see that gdp growth slow. we do expect gdp to come down but we still think unemployment rates could come even lower. in that kind of environment where jobs and wage growth is aggressive and wages are going higher, we still think equities

can go higher from here. we think there could be a change in leadership here. if growth has bottomed and we start get a better handle on inflation, that's going to vote much better for these growth sectors. jonathan: it will be harder to get a soft landing. is she talking about a falcon 9 rocket or the economy? tom: the drone ship landing will be just extraordinary to see. jonathan: i had to tea you up -- t you up, tom. tom: what's twitter doing this morning? it was a 38 handle last time i looked. this is not the elon musk of twitter acquisition. this is a visionary who said you

could take a huge hunk of rocket and put it on a barge in the atlantic ocean and to witness that is truly the singular feature of modern space technology. jonathan: always impressive. let's get back to this market because we are seeing a monster move. target is down by 21.6 percent in early trading. it is walmart volume two on steroids. lisa: what does this mean going forward. this isn't necessarily a big part of the index. we are seeing this basically speaks to consumer appetite to absorb prices. we talk about high gas prices are higher. we talk about food prices climbing in the u.s. and beyond. how much is this starting to accelerate. jonathan: average gas prices in this country.

jp morgan u.s. gasoline prices. can you imagine an average of six dollars. tom: a barrel of oil adjusted for inflation. you bring up a really important point. this is nonlinear. you go from three dollars. every time up is a hugely nonlinear feeling. i will be honest. i can't do it because i don't drive. everybody has a visceral story of what it's going to mean at 480 or 520. jonathan: something tells me governments around the world

want to get out in front of the public and site to this note from jp morgan. typically refiners produce more gasoline ahead of the summer season. this year u.s. gasoline inventories have fallen counter seasonally. that's not going to work politically. price gouging. lisa: refineries. jonathan: nuance does not work in politics. we will talk about the politics next. we will head down to d.c. from a beautiful new york, this is bloomberg. >> keeping you up-to-date with news from around the world. shares of target plunging. the discount retailer cut its profit outlook and missed first quarter earnings estimate. target says a surgeon cost shows little sign of easing anytime soon. if and freight charges or a billion dollars more than expected. -- if you will and freight charges were a billion dollars -- fuel and freight charges were

a billion dollars more than expected. -- the economy is strong left to withstand tightening. inflation in the uk2 has risen to its highest level in 40 years. consumer prices surged 9%. all that will add to pressure for action from the government and the bank of england. finland and sweden have now applied for membership in nato. a move that reshapes europe's defenses. opposition from turkey's president erdogan. he alleges both countries support turkish militants that he sees as terrorists. -- directors voted unanimously to recommend that shareholders approve elon musk's bid of $64 and $.20 a share. the board statement came as

muska appeared to be maneuvering to ditch or renegotiate his offer. global news 24 hours a day on air and on bloomberg quicktake powered by more than 2700 journalists and analysts in over 120 countries. i'm ritika gupta. this is bloomberg. ♪

>> what a lot of economists are scratching their heads and wondering about is if we really have to bring demand down to get

inflation in check, is not going to put the economy into recession. and we don't know. jonathan: neel kashkari, they do not know. futures down .7% on the s&p. the nasdaq down by one full percentage point right now. yesterday it was walmart, today its target. target is down hard. end of 21 point 5%. we have seen it repeatedly over the last hour. margins, we have a problem. tom: drew medicine coming on with a nice quick note. he says the distinction is these are largest employers. as i mentioned -- this is a guy who is congenitally optimistic. drew medicine makes real clear large employers with these kind of pressures is a unique unique moment. jonathan: we are in at around

3.5% unemployment in america. 50 is the estimate from the fed and 350 is the estimate for next year from the fed as well. can they maintain that? do you remember when those forecasts came out and diane swonk came on the show and said this is fantasy land and scott minerd said the same thing. how are they going to do this. rebalance the labor market, keep unemployment at 350. tom: we have a test tube known as the united kingdom where they have been working on this since the 1920's. the answer is the fantasy in the textbooks is just that. my core theme here, corporations will adapt to preserve their financial conditions and to preserve their free cash flow. that's what happens. jonathan: you have said that so many times over the last couple of years.

it's the challenge and how they are going to adapt. in cost. tom: at the end of summer, you've got your summer home. we have to do october planning into next year. all of that as of yesterday has been yanked forward. jonathan: we are all surprised they are surprised by the inflationary backdrop. tom: one of the first people in washington to take an interest in me at bloomberg was one david gergen. you know him from cnn, but far more is his public service to republicans and democrats in annmarie hordern's white house. gergen out. with an important book on leadership. you are the youngest person in washington. the problem is the next youngest person is 78 years old. how did we get to a washington that you cover where 80 is a

normal age for leadership? >> i can assure you i'm certainly not the youngest person in washington, but you are right. i am on the younger scale especially when you look at our elected leaders. this washington post article is the fact that all of our elected leaders when you look at the leadership, senator mcconnell, speaker pelosi, the president of the united states. the former president who wants to take on the current president in 2024 are all in their 70's and 80's and this is the world we live in where the leadership is at the upper end, i'm not trying to be in a just, but they are aging. -- an ageist, but they are aging. lisa: are we getting a sense of how that leadership is changing based on the primary results we have gotten out of places like north carolina and the ones that

we have heard from pennsylvania? lisa: the really big dramatic headline is the representative who has been ousted. he had a last-minute influence of support from donald trump. it does seem like the old republican guard really had enough with some of these headlines coming out of him that had to do with claiming about republicans and or genes on the capital, cocaine etc. this white house would maybe call him part of the ultra maga. pennsylvania is an important senate race. you have amendment's -- mehmet oz against a former hedge fund manager. this race is neck and neck. lisa: we are going to be talking about how much consumers are starting to push back on how

much consumer prices are just going up. how does that play heading into the midterms. what does that do in terms of the mix of who wins based on poles and history? >> based on history it means the democrats are really going to suffer in the midterm elections. you have another record today for gasoline prices. javier blas pointed out to me that in california, it's more than seven dollars on average for gasoline and we are not even in the peak summer driving months. at the same time you also have diesel going higher. i don't know how many times we say this on this program, but we are a farm to truck to kitchen economy so when diesel goes up, grocery bills are going up and all of that is exacerbated by the fact that russia and ukraine are really big exporters of wheat, corn oil, barley. this is also going to play into

inflation and food security. all of this is a global market. a lot of these pressures are going to hit americans at their kitchen table and at the pump and this is not going to bode well for the party in charge. jonathan: what happened to the gas tax holiday conversation? >> there is no legislation as of yet. there is talk of this nopec bill. it never really works when it reaches the white house because it would be antagonizing individuals with spare capacity to let oil into the market. potentially they will make gasoline cheaper which may have an indirect effect of not helping them. what you really need in this kind of market is demand destruction.

jonathan: that's the bottom line. demand destruction. that's what many people are focused on. tom: how many people can substitute out a gallon of gas? i remember in the second opec crisis. it was 1986. should i drive to the other side of the city? do i really want to spend the money to go a fair amount of distance? are we back to that. it will be interesting. jonathan: it's about what you call here the flyover states, tom. it's a very different way of living. and these policies are always set by people in cities. i know they call them the coastal elite but ultimately they are pulling the policy levers. getting driven by uber. tom: you go up to fort collins and see if you can get a case of

coors 32.

jonathan: bramo has a treat for you in a moment. i'm looking forward to it. the s&p down about 0.8%. good morning. on the nasdaq 100, down by more than 1%, and we took a little

bit of a dive about an hour ago following earnings from target. it is about the margins, a downside surprise, and i am surprised they are surprised. i will carry on a little bit later. futures a little bit negative. there's a squeeze on the consumer. they can't pass on the higher costs so they've got to absorb it through margin pressure. we talked about that for so long over the last year, and now you are seeing real evidence of it from two of the biggest retailers in this country. omar yesterday, and then target today -- walmart yesterday, and then target today. tom: i would be optimistic and say these companies will adapt. they are going to do it because they are ginormous. think how the little guys feel after seeing these challenges. jonathan: let's look at a little bit more clear. tom: the fed is going to capitulate. jonathan: are you after mystic from the economic side -- are you optimistic from the economic

side? guest: -- tom: i would respectfully suggest the fed is going to walk it back. jonathan: on what? tom: not sure. it is a tough task. bill dudley would say i'm wrong. jonathan: how soon? tom: don't know. you never make a time function call. jonathan: i could say we are going to have a recession, but if i don't give you the scale, magnitude, and the time -- tom: the houston astros hit five home runs off the red sox in the second inning last night. that's magnitude. jonathan: twos, tens and 30's look like this. higher by about a basis point to 2.9952%. sterling, cable negative by 0.7%. inflation in the u.k. at 9%. the bank of england stuck between a rock and a hard place. as for the euro, we've had a visual after official talking up interest rates getting back to zero.

i have to say, one of the more neutral members of the ecb, not want to be most hawkish members, talking about a be quickly getting back to zero. that is the story and foreign-exchange. let's get you some single names. let's get to bramo for more. good morning, lisa. lisa: i will get to the astros review at some point. i will not give you a timeframe. we will get to retail and a second, but before we get to that, the elon musk show, twitter. we are seeing that $38 price stick even though he proposed a $54.20 target. the board saying they are going to hold him to it. he is saying i don't know if i want to pay that. tesla your seeing sink as a result of some of the supply and manufacturing issues in china, so shares are down about 1.7%. netflix, when you start to get supply and demand shift around so dramatically, what you get is oversupply of staff. use on netflix come out and say they are laying off 150 people

as a result of some of the pressures and the lack of subscribers. those shares down about 1%. the action all in retail. target the big story of the day after reporting worse than expected earnings as a result of those margin pressures, down 22% and leading a whole host of other retailers lower who are going to report today. tjx spec could to report before the open, and that has shares down in sympathy. bath and body works so a little more than 3%. i do wonder, the consumer discretionary scum are they just going to remain permanently on sale? because those are going to have a harder time passing along those costs to everyone, especially as they are surprised by the incredible cost pressures. tom: she can do it all. she can do bonds, she can do equities. lisa: and astros at some point, but i am not going to tell you when. jonathan: she's great at that. a little bit of a bearish tilt to it. lisa: let's move on before this goes south. [laughter] tom: lisa abramowicz, thank you

so much. this is the conversation of the week, to say the least, or maybe the month. losses in the bond market. brooke masters over at "the ft" has done a tour de force on the new pimco, and a big part of that, is jerome should -- and a big part of that is jerome schneider, their head of portfolio short-term. jerome schneider says the bond math does not work, and joins us today. let's cut right to the math, whether it is off bill gross's munro trader were off of your four bloomberg screens. why does the math not work? jerome: when you look at where we are today, the market needs to look at the calibration we have seen predominantly in the front end of the market. we have seen a tremendous part of that come from the market place with regards to tightening financial conditions, which markets have really adapted to.

more importantly, i think you have to rationalize where front end rates have come. the tightening policy process has come from the expectation of higher rates, but that has also put us on pretty firm footing where we can derive a lot of income from where bonds are. i think that is the bond math, the most people -- pond math that most people are -- bond math that most people are overlooking in this environment. you have a 2-year note it is 2.7% this morning. you decompress that, it really implies that the one-year rate is about 3.3%, 3.4%. not to get too bond geeky, that is well above the terminal radix petitions of the fed. so when you think about the marketplace and where we are, investors sort of need to rationalize. tom: i'm going to cut to the chase. turning around, assets larger than when gross was there.

the heart of your call was reticence on owning bonds throughout the bull market. it has ended. when you go long bonds? when can you extend the ration? jerome: you've got to think about the purpose of bonds as a duet. you got capital depreciation, plus carry and income. that component has been understated for the past 10 years. it is back. so one part of the duet is having the second part of the symphony come into play and help a company. the theme at this point in time is fundamentally what we need to be thinking about and portfolio construction. there's a fundamental change, which is simply that not only are we dealing with financial conditions which are clearly influx, but liquidity conditions in flux. that simply means that for an investor, there's a few things they need to keep in mind. one, transaction costs are higher in their portfolios. you think about risk allocations, those need to be a little bit longer in terms of tenor and also stickier, meaning

the cost of those funds is more punitive, so we need to be thinking about ways to mitigate the volatility in the portfolios and the cost of these transactions, which means ultimately you need more cash. need more fixed income any portfolio. while it sounds like we are talking our book, when you see where we have come from since 2021 with slight yield curves, flat credit curves, we find ourselves in a pretty defining moment now where the recalibration of front-end rates and rates in general sort of puts that duet back into something a little more harmonic now. lisa: this duet sounds lovely, and i'm sure that it actually is a great narrative to paint for clients. i wonder how much soothing they require after seeing their earnings statements, the results after a quarter that was absolutely horrible, a bloodbath for many people in terms of total losses. how much do we get withdrawals from some of the short-term bond funds that exacerbate this? how much do we get banks

reassessing their teams of people and cutting jobs as a result? this can't go any back you when you see this magnitude of losses in something supposedly safe. jerome: that is a great question. when we think about the market and where we have come from and where we are today, you can't be dismissive of performance in the first quarter, but that is the beta largely. that is the re-calibration rates. the level set is very important here. came from a very low rate environment with tight credit spreads, and more importantly, relatively flat yield curves. people were reaching for return across all markets throughout 2021. so when the recalibration happened in early 2022, it should not come is this a price that there are some losses. but this is where the mass comes in. i think investors should really rationalize that starting went. when you think about the beta of where fixed income has gone, sure, bond rates have moved lower, but if you look at the front-end as an example here, the one-year index was down about 100 basis points, 1%.

on's moved -- bonds moved to $99 over the course of the last quarter. we have also recalculated that income and carry component to something closer to 3%. when you put those two pieces together, that puts this in a context of a total return which is actually so positive. while we have had a little short-term pain, especially across some markets, the fixed income market can still be rewarded for the second component of total return. that is the part i think people are going to have to rationalize. in terms of the broader market, that is something people are going to have to think about in terms of not only the changing financial conditions that are out there, but also the change of opportunity. the question is, is it really time to be a hero, per se? i think you have to think about ways to keep pedaling him effectively. to do that until we get clarity on the quiddity conditions and the overwhelming urge as jerome powell stated yesterday to continue to fight inflation can create volatility for

portfolios, and i think that ultimately is the construct of thinking about portfolio management these days, to try to limit volatility and seek out ways to produce returns without adding to volatility and portfolio construction. that is whether you and institutional -- you are institutional or retail investor. jonathan: how busy have you been? jerome: very, very busy. jonathan: that's what i was thinking. when was the last time you were this busy? jerome: 2015 and 2016, and that was the exact type of market where we had rising interest rates, people were feel for -- were fearful of where the fed was going. the impact of rate hikes on the market wasn't exactly clear. yet investors were looking for a salve. they were looking for a way to really immunize their portfolios . tom: how do you call your way back from a 12% price decline, full faith and credit? jerome: you effectively look at ways to minimize where you want

the interest rate curve, look at ways to mid my the interest rate risk and credit risk within portfolios, and not necessarily reach. stay in high-quality. there's the ways you can continue to add carry to your portfolios. jonathan: great to catch up, as always. jerome schneider of pimco. futures down 0.8% on the s&p come on the nasdaq, negative by more than 1%. target heading south and further south. down 22.6% in early trading. this is bloomberg. ♪ ritika: keeping you up to date with news from around the world, with the first word, i'm ritika gupta. shares of target fell more than 20% in early trading. the discount retailer cut its profit outlook, saying a surge in costs during the first quarter shows little sign of going away anytime soon. targets fuel and freight ill was $1 billion more than expected. additional hits came from higher pay for warehouse workers and lockdowns driven by overstocked

inventory. the eu considering whether to use proceeds seized from russian oligarchs to help rebuild ukraine. the eu will also propose issuing joint debt. ukraine's foreign minister told his european counterparts that the bill could reach $1.1 trillion. a tightening european banking transformed the investment bank at ubs and then battled santander over its botched attempt to hire him as ceo. now he is leading unicredit at a time of war and inflation. in his first tv interview since taking the helm, he spoke excessively to francine lacqua with bloomberg's "front row." >> inflation is biting. we see for a lot of low income or lower income families, really difficult to deal with the rising cost of energy. we also see that for companies that had investments or were

dependent on energy or on grain to a certain extent, their whole value change has been completely destroyed. ritika: shares of unicredit are up some 17% since his arrival last april. 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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>> i have been concerned that we need to take aggressive action to keep inflation under control, but right now i think we have a good plan in place. we've made a lot of moves. jonathan: to be fair to jim bullard of the st. louis fed, they haven't made that many moves. we've had a couple of interest rate hikes and qt. lisa: honestly, the idea when you take a look at the balance sheet, it basically has plateaued at nearly $9 trillion.

we are talking about removing liquidity. jonathan: the market has made a few big moves. futures negative zero point a present on the s&p. on the nasdaq we are down by more than 1%. stocks to watch, there's only one, target down by 22.6% in early trading. just a monster move lower. it is about that revenue falling to the bottom line and what the margins look like. the margins are not great. tom: you've got them as a lead story, but my recollection is we were at negative nine spx futures as those headlines came out an hour and 15 minutes ago, and now we are -33, so this announcement moved the market, no question. jonathan: without a doubt. you saw the walmart numbers yesterday. the challenge with margins, the product mix, and all of that. target closed down yesterday by 1.8%. i am to struggling with what is going on here and how they market is discounting some of this stuff get did we just think

the walmart story was an execution issue and somehow there was not something broader going on here? tom: i just think it is the new silence that you get from corporations. let us dive into that. this is a big deal. joseph feldman is with us. he holds court with day nicole sy -- with dana tulsi at the tulsi advisory group. i want to talk about what we lived in the real codification of reg fd. are these corporations afraid to give guidance to animals like you? joseph: well, i think the corporations are certainly afraid to give into quarter commentary that would give too much of an insight into how the earnings might show up, and when doing so they do have to make things broadly public and available at the same time, so that evidently plays into this,

and i do think you have seen corporations act differently. i've seen investor relations rational get fired over it. so i think people are very careful to not give too much into quarter information. jonathan: i struggle when i see a stock down 22% off the back of earnings on something that should not be a surprise. costs. they seem to be struggling with something that was obvious to everyone. i don't get that. if we had a big execution problem in a single name, it feels like from my perspective and other looking and they are struggling to find the right balance. these companies have gone from being understaffed overstaffed, undersupplied to oversupplied, and all of a sudden there's all of this inventory and they don't know what to do with it. how do you find the right balance in an economy moving this fast? joseph: i think that is really the challenge, and something doug macmillan talked about yesterday was the speed of all of this. that it is really hard to adjust

the business that quickly to play some catch-up. obviously the consumer is changing quite rapidly. i think you are right, i think the retailers, we saw this with amazon where they kind of were building out to the capacity that they needed at the time during the height of the pandemic, and now you are seeing some of the giveback. what is really interesting here is if you go back in history, targets gross margin has been very stable right around 28%. obviously this quarter it really dropped a lot to 25.5%, and their guidance for the year would imply that it is going to be well below the 28, may be more like 25, 26. i think that is transitory. i know the stock is down a lot right now, but if you really look closely at that line item and look at the way they are operating the rest of the business, there's a lot of pressures right now on supply chain, on fuel costs, on

everything that is hurting the business right now. tom: i had a brain freeze their because i got the fuel cost of the jet stream to davos. that has gone up, to say the least. regulation fd, that was 1999. lisa: i thing i see that little violin in the corner. i don't think that is probably where people's focus is our on the jet stream. however, this is the issue of what comes next. what is the next shoe to drop after we saw walmart and target? what is your sense of the other players that will also see similar hits that are not yet i still -- that are not yet priced and? joseph: i think those are likely to see some pressure. we have been pleasantly surprised to see home depot and lowe's performing fairly well in the face of this. everybody thought home was going

to be done, and it is not. but it does feel like we have seen a slower trend in apparel and other discretionary categories like home furnishings . that is where we see soon concern. some of the other discounters may be under some pressure today. i think you have to just start worrying about everybody on the gross margin side and see how that profitability could be impacted by that, even with stronger sales like we just saw from walmart and target. lisa: can you just frame this moment, how much of a turning point this is for a lot of the consumer discretionary areas and frankly the consumer stable companies like grocery stores and others, especially in light of the surprise in the c-suite that to us, should not have been a surprise? joseph: i think that we were all assuming that the supply chain pressures had been fully factored in at this point, and they are just not.

we are definitely seeing a slowdown or changing consumer behavior where there's more of a focus on consumables, basics, getting to work and paying those high gas prices right now. i think that lends well to the cpg companies that are out there and the grocers and other value oriented retail where people are going to be looking to save money right now. jonathan: thank you, as always. great perspective. joe feldman there. the stock is lower by 22.8%. hardly mentioned the story out of china either when it comes to growth out of china. goldman little earlier this morning with a downgrade, joining many others who have done the same thing. they expect gdp this year to be at 4% versus 4.5% previously, right on the line of a 3% handle. very close to a number that was almost unthinkable a few years ago for this economy. tom: it was unthinkable for get a cup and asked at the imf -- for geeta cope and f -- for gita

gopinath at the imf a couple of weeks ago. the trend is in that direction. jonathan: things have changed so quickly. it is some you picked up on with amazon and then on to walmart, that we have gone from understaffed overstaffed. gone from undersupplied to oversupply. there's a real seem building across three big retailers for this economy. lisa: how much does this play into this idea of a softening labor market? we understand it is very strong, but how much around the margins? netflix cutting 150 jobs. amazon curtailing staff. what happens at walmart. jonathan: on the nasdaq, down by 2.1%. heard on radio, seen on tv, this is "bloomberg surveillance." ♪

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