>> right now, we have an incredibly strong economic outlook. inflation is a concern. >> it is the timing is far down the road. >> the fed does its thing. sometimes it makes the stakes but generally it has pivoted successfully. >> everyone is afraid they will get it wrong and the chances are they will get it wrong. >> the near term pain could be

so severe you just can't see through it. jonathan: life arm -- life from -- live from new york city, for our audience worldwide, good morning, good morning. this is "bloomberg surveillance, live on tv and radio." features positive by 1%. we are set for a seventh straight week of losses. tom: so many just said happy friday to me and i growled at them. the that is it. the correlations and starting with jane foley, foreign-exchange telling me there is an immense amount of tension. jonathan: what was the highlight for you or rather the lowlight. tom: the highlight of the week is that it is over. it has been incredible stress. the highlight is the safe haven clicked in wednesday.

the first thing i do is look at euro swiss and see 1.02 nine, different from a week ago. there is a little safe haven field. jonathan: i will throw treasuries in. yield lower by 20 basis points. grinding lower again. lisa: on the long end. any fed speak we have gotten this week has confirmed that any weakening and the stock market is by design. it is not a fault of their plan but they are looking at this to tighten financial conditions. people seem to be downgrading their expectations because of how weak the economy looks and a couple other data points. jonathan: it is an objective angle. fed speak of the week? lisa: the kansas city fed came out yesterday and said this is by design, i am paraphrasing, but basically confirming the same point. this is not a fed ready to

commit, this is a fed saying great, that is how we execute tighter financial policy. jonathan: what we have to work out is under what conditions? what is the threshold for that to happen? lisa: we keep going back to credit. can companies finance themselves? you are seeing some cracks forming but nor near the of stress we saw another big disruptions in the market in prior years. jonathan: equities up 42 on the s&p 500, up by 1% on the nasdaq 100 up by 1.5%. yields higher by basis -- a couple of basis points. little sentiment coming in this morning. lisa: how much could the chinese government stimulate the economy in the face of the slowing economic trajectory? bloomberg economics expect china' s economy will lag behind

the u.s. is in gdp -- u.s.'s in gdp for the first time in -- since 1976. a quiet day. everyone heading to davos and trying to figure out how to position for the week ahead. earnings will be interesting in light of highest food prices ever and how can we see record profits in the daytime of shrinking margins. she seven wraps up in germany, poised to agree to an aid package to ukraine to keep the company -- country operational. at what point is your leader in fiscal stimulus, so -- is a your up the leader in fiscal stimulus. president biden heading to south korea, touring a samsung

company. i am curious to what they will say about possibly assuring up supply chains. jonathan: the potential for a meeting with the saudi crown prince and the president of the united states. reporting from our team suggesting that could happen at some point in the near term. lisa: what is the political fallout from that? the u.s. needs gasoline and how much will they turn to the middle east sure that up rather than talking about domestic production. jonathan: looking to get that story. tom: i agree. it folds into the death of the gentleman from the washington post, mr. khashoggi. this is a different tinge and tone in washington than normal diplomatic discussions. jonathan: joined us is jane

foley, from rabobank. re: currency positive or negative -- are we currency positive or negative? jane: the start of the week we had a tight labor market and that raised the question, is the labor market here and we've already had four rate hikes from the bank of england and yet the labor market is tightening. that has led some commentators to say the bank of england will have to do more in order to create that to bring demand down. and now we had the confidence at the weakest levels since 1974. that highlights the cost of living issues we have in the u.k. it is difficult to reconcile this tight labor market with too much demand on one hand and that

there also is a cost of living crisis and people are feeling the pain of higher food and energy prices. so what does the bank of england do? that is what we have to determine. tom: there is modest hysteria over a repeat plaza accord. in those are way out, euro 90, weak euro. yen, weak. do you have any scenario are those two would weaken and the dollar would strengthen? jane: back to lisa's comments. the fed is tightening interest rates and that means equities will go down and the dollar is likely to go up. that is the reality of the central bank tightening liquidity. i find it difficult to

understand the fed and the central bank has to get together and soft and thus often -- and soften. the possibility that europe could be an eight recession if there is an oil bargain -- an oil embargo. i think the dollar is strong. can the yen pick up? we have seen some safe haven with the yen and eight swiss bank, that are than expected data from japan last week. for two months in a row, we had to turn it up but it appeared with energy and commodity prices strong that would be road the ability of jaman -- japan.

that is coming back to some extent. i still think the dollar is going to be king in this environment. lisa: how much more can it continue to be bigger king? how many of the gains have been baked in with the narrative you put out is basically the wildly -- widely expected one? a bullish call on the euro versus the dollar, because this is baked in and now the only it surprises could come to the positive side from europe? jane: i am not sure that is the case. to be honest, we have been having this conversation since december. every time we get a more hawkish fed. and recently, martin negative news about the global economy and that is why i think china is a big part of this. more cases in beijing of community spread of covert and

that -- is the trend that there was no community spread care that had raised expectations about the loosening of restrictions. if we get more community spread, that will dampen the expectations about chinese growth even more. for europe, there will be a recession at the end of the year because it seems there will be an embargo on oil. i don't think everything is baked into the price. i think the dollar will have a safe haven. there is more risk for growth. jonathan: recession ear end in europe, is that with rate hikes or without. if it is baked in, do they really want to be hiking? jane: reality is that the window of opportunity for interest rate hikes will be very narrow.

more and more people from the ecb are looking to the news coming. they will try to pump up euro as the week euro will make conditions worse. i think i the end of the year, i think the growth conditions could be too, especially if there is an oil embargo. jonathan: thank you, jane. jane foley, rabobank. what spooked people is that we thought the story was understood and we have been talking about it for months, inflation, what it would mean for margins and then target came out and you start to realize that even if something is talked about and you think it is well understood,

it doesn't mean it is well priced. tom: it is the time continuum of it and the price analysis with real economy analysis. jonathan: equities up by one percentage point in the u.s.. bonds higher by three basis points. running out another volatile week, from new york city, this is bloomberg. ♪ ritika: joe biden is on his first trip to asia, touring a semiconductor samsung tour. later on the trip, meeting with regional leaders to build support to counter security threats by china and north korea. speculation at kim jong-un's

regime may -- while the president is in the region. seven finance ministers meeting in germany to guarantee aid to ukraine. u.s. senate has passed and made package for ukraine of more than $40 billion. the administration said it would provide ukraine with another 100 million in military assistance. in china, steps aimed at boosting the economy for key interest rate by records amounts, lowering the five-year loans and reducing mortgage costs. it may help counter weak loan demand. nasa launched a star liner space capsule, headed for a round of you with the international -- for a rendezvous with the international space station.

global news 24 hours a day, online and at quicktake on bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm ritika gupta. this is bloomberg. ♪

>> including government and it appears there will be more than

18,018,000,000 -- more than 18 million. jonathan: equities heading higher for now, futures up 1%. on the nasdaq, positive 1.5%. equities down for a seventh straight week. you have to go back to 2001 for a weekly losing streak as along as this one right now. yields higher by a couple of basis points on a 10 year here the dollar has been week. euro-dollar pushing 1.06. tom: what are your thoughts on dollar? jonathan: starting to see some weakness creep in. thoughts more broadly, we talked about this with jane fully of rabobank.

a central bank rate hike, currency positive or negative, which one is it if you think europe has gone into a recession? a difficult call. tom: with the finance meeting and the ecb upon us right now it will be difficult. joining us is annmarie hordern. also maria tadeo. i know channeling all the way over to seoul korea and looking for permission to dance, no question about it, what is the real ask that the president is doing besides meeting with those at bts? annmarie: for those who don't know, bts is a very famous k pop band which have gone viral to the pandemic. the first step off the president

about face plane is the samsung factory they are building. he will make this a domestic -- the first step off of the president's plane is the samsung factory they are building. they are trying to have a new economic framework, something that could fill in for the tpp since amerco pulled out. the u.s. ambassador to japan said this to reporters, asian governments don't know what they are signing up for. is it negotiations are a framework to start negotiations, but the point is too tight -- try to counter china's point. tom: the president in asia and everyone will be in davos looking at, history of it all. close schwab has talked about this moment in history is a thing -- a theme of the world

economic forum. i am calling it the holiday from history is over. what do we do england this week and next week to readjust the path forward with the war in ukraine? maria: i think we will not have to wait until tomorrow until after. it is about today and the g7 because the finance ministers are meeting in the german finance minister told us they will commit almost $18 billion -- 18 billion euros to help ukraine. this country could face a time where they don't have hard cash and can't pay for things short-term. biggest obstacle was short-term funding for ukraine, so clearly there will be a conversation, but today this is a done deal at the g7. a much bigger issue is what happens with the war and the

reconstruction of this country. that is definitely the long-term picture. and how can you help ukraine when the war is the long-term comfort -- win the war is the long-term conversation. lisa: we are seeing the gas cutouts from russia come to fruition. we are seeing finland's importer said they will see russian gas cut off. how much is your trying to get ahead of this? how much will we hear from other nations getting cut off in the next few days? maria: in the case of finland, this is a country that is well diversified. i don't think it will be an issue for their economy short-term. they were ready for this. they were expecting the move in anticipation. russia is only doing this now because of the nato membership they put on the table. when it comes to the bigger

buyers in europe, i spoke to a central banker of italy and he mentioned the uncertainty around energy. and germany, these are two countries that the russians don't want to upset. they are a big buyer and they know anything they do in those countries will have repercussions. they are ready for it, but this could happen. but for the time being, we are seeing companies prepared to pay in rubles which is not exactly what the european guidance said, but you see the real business prevails. lisa: the real business prevailing as we see the white house working toward the first visit with the crown prince of saudi arabia. what is the thinking, especially after frankly president biden has called him a pariah on the world stage and expressed concern about human rights issues? why is he changing tones? annmarie: higher oil prices

starting to move away from the stand office -- standoffish approach from the crown prince. everyone knows the man leading the country everyday is mohammad bin salman. there have been talks for a while for a meeting and now there is more weight on it. this is going to be very delicate how this becomes public, in the sense that is it just a meeting with mohammad bin salman, the saudi's run the gcc, will potentially other partners be there like kuwait and qatar. the relationship between the kingdom and america was deeply -- has been deeply fraught since the killing of jamal khashoggi. the biden administration that

released that report showing this had the hands of mohammad bin salman on that killing, the cia declassified report. a very tricky relationship. local gas prices another record. we are not even at peak driving season. they are the only country that has spare capacity. jonathan: that is the bottom line, things getting tougher at home. trying to reconcile that abroad. tom: how we have forgotten the pacific rim. the president to speak in a minute. shining through davos with funk and so. i am going to light it up like dynamite. bts to meet with the president. ♪

jonathan: live from new york city, i can't promise you there want to be more a singing, so sit tight. [laughter] futures up 1%.

tenth street week of losses on the s&p 500, if we close that way it would be the longest losing streak 2001. on the way, still lower. twos, tens, 30's, bonds starting to kick in, yields lower. last week by 21 and this week by five or six. up on the day but down on the week by a couple of basis points. tom: how wacko it is right now. when you put that board up, my eyes flip between the 10 year and 30 year because i don't know where i am. the yield has been so whipsawed. jonathan: not far off from where the 10 has been.

now it is close to 3.1% on 30's. the curve is flat, if you look at it that way. looking out in the commodity markets, down 11% on something like copper. copper is something i am looking at with china in their efforts starting to kick in. on the lme, we are up. crude gets my attention, just because we could have a meeting with the saudi crown prince and the president of the united states. that could be important. think about how long the opec meetings have lasted. they need to last longer and do more and that is what this president wants to see. tom: in the history, back in 1986 in the time where opec collapse and headed to grow out of their arrogance, it grew in oil. but industrial metals and coal

off of a china reopening his front and center for june. jonathan: cover higher, crude lower. tom: we are regrouping with meetings for someone who stopped us in davos. savita subramanian was with bank of america holding court on esg. she is the head of quantitative strategy. esg seems so yesterday's story giving -- given record coal prices. how does the shock of the many global risks full over into moving forward in the stock market? how do you regroup now to get ready for 2023? savita: i think that where we are now is it is past time for esg investors because the best-performing areas are defense, energy, two areas

typically excluded from the esg and these types of investors. i think the worst is not behind us. we published yesterday that the realistic worst case for the s&p would be 3000 3200 -- 3000, 3200 . investors are saying give me any reason to be bullish and i think that is because clients are asking that question. there is a pervasive sent to get -- sentiment that it is priced in. what you want to buy is still very late cycle inflation. we are still overweight energy. to your point about china reopening, energy -- oil could be depressed right now given the

fact that the second largest economy in the world is off-line. i think that materials look less interesting to us, commodities and metals, because we are seeing slowing trends in china despite the fact that they are trying to stimulate the economy. we are also seeing a shift in demand from finished goods and big to get items and services. under that back up, it makes sense to continue to go along oil but move off of raw materials. tom: a guy named ken lewis at bank of america, i always thought he was brilliant on his specific written -- pacific rim strategy. they were measured and attempted to be responsible. i want to know what you think about the bet on pacific rim equities given a china reopening. is it worth playing or do you stay in the u.s.? savita: i think you stay in the

u.s.. we have seen a very interesting rereading of countries based on energy security, companies that don't need to import oil are probably enjoying a unique advantage. i think second of all, the u.s. is further along in terms of trying to stimulate the economy and push up interest rates. we have corporate and consumers who are better capitalized, basically gotten all of this money from the fed and government. when i look at the u.s. relative to the rest of the world, i still think the state -- is a year or two where the u.s. will outperform. emerging markets still of potentially risky, not to mention if we look at the economists, advising growth forecasts outside of the u.s. aggressively and those are all reasons to stay local and state

u.s. focused, i think even small cap could do well. the economy will potentially see a lift as companies start spending again. the most surprising thing during this earnings season, even though all of these companies are very negative in terms of what they expect over the next couple of years, they are still telling us they are going to spend more than we think they are going to spend. capex cycles are good for small caps. it is interesting to see that capex is still a theme that companies haven't dialed back. jonathan: this week on -- this week, staples has been hammered. the difference between how much the consumer is spending and how. a massive focus on the weakness.

the signal you are getting there was weakness out there, you think the biggest story was a shift in how they are spending, not how much? savita: i think so. how they are spending and just labor. there is a dramatic shift in terms of under supply to oversupply we are hearing from companies, and that will benefit some of the more labor-intensive areas of the consumer sector, like supermarkets. we have seen these companies perform well aware we are seeing alleviation is inth labor supplies. that is potentially a positive for margins. we are overweight staples for the long haul because our idea is as the global economists warn of rising recession risks, we think that staples, health care, no matter what you have to eat your food.

in a stagflationary backdrop, the best performing sectors are energy, consumer staples, utilities, to a lesser extent materials. you want to stay defensive and overweight sectors that benefit from inflation. lisa: you sound actually somewhat pessimistic yet your outlook for the end of the year is incredibly optimistic at a 4500 target. are you thinking of downgrading the 4500 as the base case come and if not, how do we get there? savita: our charting is made up of a few different factors, one of which it is our view on interest rates. that is the factor. most of the big moves this year have been accompanied by a move higher in either real rates are the equity risk premium. our view is that real rates continue to move higher but we start to cpe multiples

essentially stabilize. if that is not the case, we would be more negative, and that is the key factor for us. every tiny move in interest-rate has an impact on the s&p 500 in terms of its longer duration. the s&p 500 is now a 35 year bond, supersensitive. jonathan: are you saying this is ethan's fault or mark's fault? whose fault is it? savita: [laughter] those are both excellent book we see them incorporate views. tom: we are watching. keep going. jonathan: we are done. lisa: thank you so much. jonathan: they are all friends

over there. 4500 year end, whose fault is it, both. futures positive more than 1%. tom: serious stuff linking in the economics, we have humility on the market guess forward. it is always forward and i have to believe it is centered around data dependency but expecting the unexpected. what is the unexpected out there? i am optimistic on china reopening. jonathan: if you would have told me that equities would be down by eight weeks but it has been that kind of week. lisa: margin pressures are bigger than some expected, including the ceos of the companies experiencing that how do we at -- experiencing that. as we heard yesterday, maybe this means they are going to

accelerate price increases. jonathan: she cut on the copper market. and a story that you picked up on, we are seeing it all over the place. lisa: is this compositional or wholesale retracement of the pandemic era economy? jonathan: futures on the s&p up 1.1%. from new york city, this is bloomberg. ♪ ritika: keeping you up-to-date. i'm ritika gupta with bloomberg's "first word news." joe biden is on his first trip to asia. he is touring a semiconductor plant. in japan, he will meet with regional leaders and support plans to aid ukraine. bloomberg has learned that president biden is considering a meeting with mohammed bin salaam

. by one account, the world has only 10 weeks of wheat consumption reserve, the lowest since the 2008 financial crisis. a firm spoke to a u.n. security council meeting on food security, dire. pimco and blackrock set to start debt talks. a credit group, sri lanka defaulting for the first time in history the economic meltdown has led to an economic crisis. $250,000 to -- who said she was

sexually harassed by elon musk on a corporate jet. he calls the accusations untrue. global news 24 hours a day, online and at quicktake on bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm ritika gupta. this is bloomberg. ♪ what if you were a global bank who wanted to supercharge your audit system? so you tap ibm to un-silo your data. and start crunching a year's worth of transactions against thousands of compliance controls with the help of ai. now you're making smarter decisions faster. operating costs are lower. and everyone from your auditors to your bankers feels like a million bucks. let's create smarter ways of putting your data to work. ibm. let's create

[applause] >> thank you. very generous. president, thank you for that introduction. it is great to be back in south korea. i am honored by the welcome you have given me to your beautiful country.

congratulations again on your election. [applause] and your inauguration. i and my country look forward to a productive few days together where we can get to know one another better and explore ways to take the alliance between the republic of korea and the united states to even greater heights than already exists. vice chairman lee, inc. you for welcoming us to the samson semiconductor -- thank you for welcoming us to the samsung semiconductor factory. innovation our countries can and must build gather period and joined by my secretary of commerce, and the front row, who is working everyday to bring us closer to that goal. i have just seen how this plant makes the most advanced semiconductor chips in the world. they are a wonder of innovation,

design, precision and manufacture. semiconductors enable our modern lives from automobiles to smartphones to medical diagnostic equipment. when it comes to the most advanced chips like the ones made here at samsung, there is only one of three companies in the world that makes these chips. it is an incredible achievement. because these chips, only a few nanometers thick, are the key to propelling us into the next technical development. artificial intelligence, quantum technologies, 5g, and things we haven't thought of at this point. this plant reflects the close bonds of innovation between our countries. much of the technology and machinery used to make these chips were designed and produced in the united states, and by uniting our skills and technological know-how, it

allows the production of chips that are critical to both our countries and are essential sectors of our global economy. jonathan: the president of the united states alongside the president of south korea on a campus by samsung. the dependence on china and chip production in that certain parts of the world a key issue for this tour of asia for the president of the united states. tom: samsung, three santa meiners -- three nanometers, don't ask me what that is, but we would like to see that in the united states what this chip is about is the distance from soul to the dmz and the border. it is only 49 miles is my recollection. in the image for radio listeners is there are masked

people behind him. jonathan: this runs into tuesday and includes a trip to japan over the weekend. lisa: how much is he going to shore up ideas and partnership ahead of china and a potential we saw exercises ahead of that and how much of the focus will be on semiconductors, especially given shortages. jonathan: equity futures positive by 1% on the s&p 500. on the nasdaq, up 1.5%. the earnings keep pouring through. the latest just recently. tom: 4.2% is the statistic. i thought it was a good set of numbers spirited by nominal gdp. you go up 9% on one measurement of sales and that is about right given the inflation lift of the

top line gdp. jonathan: the stock up by 4% in the premarket, they see a full year net of an estimate of around seven. north for the outlook. tom: all wrapped around the food shortage. lisa shown the painful chart of international interest in emerging markets. that brings us to damian sassower. the dollar resiliency we are seeing is focused on the big pairs. what does resilient dollar mean right now for em? damian: you have to look at it through different lenses. if you are a true emerging market investor, it is about

funding currency. you found that the 20 major currencies are down. dollar strength is something we have learned to contend with in the emerging-market space. it is about finding the right funding currency to find your positioning abroad. lisa: as a biden heads to asia, china announces additional rounds to try to stay late the economy, cutting mortgage rates the highest in history. how much affect the think it will have? damian: they were welcoming president biden with rounds of military exercises in the south china sea. the lockdowns of the big story there. it is demand for loans and lending and credit in china, which is lagging. it doesn't matter how much stimulus you inject into the system, you have to get

consumers spending and labor outworking that is the issue in china. jonathan: the important work, how many screens does sassower have? damian: we have a lot back here. who is going to be watching the red sox, not many people. jonathan: does anyone do that anymore? tom: last night was glorious, but what is interesting, as damien logsdon, they have to assist new york with their electricity. jonathan: thank you very much. damian sassower of bloomberg. tom: can we have his life? he has that backdrop at the pga. jonathan: have you been watching

the golf? tom: i watch it for a little. jonathan: it breaks my heart to see tiger struggle. i hate to see it. don't like watching it. tom: that was dinner conversation last night. i don't know what to do. jonathan: the first few holes he did well. the body just doesn't seem to be there right now. tom: these guys are very visible they run out of steam. sometimes it is like black ink -- black pink, when they are singing. jonathan: what is that? tom: these girls are doing it in korea and it is not bts. jonathan: could you give me a song? tom: i would like to do that, but if i did it on radio i would be in trouble. ♪

>> right now, we have an incredibly strong economic outlook. inflation is a concern and i agree with that. >> conflation is a 50-50 bet. the timing is preferred down -- >> sometimes it makes