>> we happen to be in a very bad inflation situation. >> with rates going up with slowing growth, the combination is deadly.

>> when stocks stop growing, that's a big problem. >> the fed will probably follow the forward curve. >> it's important for the fed to ring in inflation as soon as possible. >> this is bloomberg surveillance. tom: good morning, we are on television and radio from the world economic forum in davos. it was quite a different davos it is somber but not lisa abramowicz. lisa: it is not like america where we are looking at a shooting, the worst since sandy hook in 2012 at a school with 22 now confirmed dead. how does this keep happening. as a mother and a human and american, how does this keep happening? tom: it is about an america divided less by peculiarities

but about the united states senate that seems to be the focal point for democrats and republicans. we will continue the conversation with real markets upset yesterday. the markets more stable today and yields are stable. the turkish lira is a difficult story for mr. erdogan. i think we carry forward the conversation. lisa: there isn't issue where you are dealing with dueling tragedies. we are talking about the tragedy in america dominating the davos conversation and the tragedy in ukraine. that's how much of an existential question. tom: the turkish lira is up to 16.33 step that will be one of our themes this morning on the war in ukraine.

for the president of the united states, it was most difficult last evening in the results room. >> we are in god's name is her back home, the courage to deal with and state -- and stand up to the lobbyists? it's time to turn this pain into action for every parent, for every citizen of this country. tom: whatever your politics, it is something we have seen too often. lisa said there are so many others in many not reported. it is our chronic problem. from 1600 pennsylvania, anne-marie hordern. >> after hearing the president last night pleading with congress to do something, he was

clearly emotional and obviously very angry at the state of affairs in america given that once again, he has had to console a nation. he just got back from a trip to asia but the day before, he was talking about another shooting in buffalo and then he got off that plane and yet again, he's talking about another shooting. i think today will be about whether there is potential for the senate to act on legislation that the house passed over year ago. tom: what does the texas delegation do today? besides sending thoughts and prayers. >> there's going to be a lot of thoughts and prayers and there is a lot of uproar from americans about the fact that they are over thoughts and prayers. 90% of americans want basic background checks to be part of the law. it's a tough situation for texas because the president will be dealing with governor abbott and

will be on the phone with him, making sure he knows he has the support of the federal government. you have estate and governor that was upset that texas was not number one when it came to firearm sales. they are dealing with this tragedy and an 18-year-old on his birthday bought two rifles and went into a school. there was law enforcement shooting at him but he was wearing body armor. at the same time, a terrific tragedy with the toll of 19 third, fourth and fifth graders. you will have an nra convention over the weekend. it's very poignant to bring up texas because it will be interesting to see what those local lawmakers say and do. lisa: what do we expect to hear from the president today at 4 p.m. eastern? >> cable talk about policing and public safety but given this

tragedy, he is obviously going to have to address this yet again. there is potential for him to come out with a fresh read on congress, potentially questioning whether the president would go to texas to console the states. i imagine we will be hearing the likes of that when we hear from the president. tom: thank you so much. we will continue with this coverage. we will also talk about this on balance of power with david westin at noon. we are trying to get back to economics and finance and a stock market that won't go up. chris harvey, it is somber and the bear markets as well. how bare is the bear market and what has changed in your

strategy in the last week? >> no distinctive change, we have taken off a fair amount of short exposure. a lot of the high flyers we think, the catalyst we thought would bring them down has brought them down and we are not being greedy. we are beginning to change our view on growth. many people don't like growth and we haven't liked in a long time but our first step is to take off that short exposure on the high flyers. we are also looking at breakevens. they in -- they are in the 250-275 range which is positive for growth. monetary policy and other issues are starting to slow down the economy and growth does very well when growth slows down. lisa: when do you start buying big tech? >> gosh, at the end of the day, i don't think you can just paint big tech with one paintbrush.

there are companies that have good valuations and they are steady growers and that's what you want to focus on weathers big tech, small tech or medium-sized. you want companies that are steady growers and trading at a reasonable price and matter where they are. lisa: we are looking at it narrative of breakeven rates that have dipped to the lowest levels. we are looking at people pricing in a slow down. have think gotten ahead of themselves based on concrete data that has not reflected that? >> we came into this year saying there would be a slow down and that's what you are seeing. many people are calling for recession but that talk is a little premature. we are in a slow down, no doubt about it. when you start to normalize interest rates and monetary policy, that slowdown gets more pressing. we see margins being compressed

because people cannot raise prices, companies cannot raise prices as much as much as costs are going up and that reads a lot of issues. overall, slow down will continue but if you look at fundamentals, a lot of cash and recession calls are premature. tom: we talk about the equity market and how you synthesize wells fargo economics. so much of that was invented by john silvia a number of years ago and he was front and center on the job market. what are you hearing from wells fargo research and economics about a fully employed america and role that into what it means for the stock market. >> that's a great question. tim quinlan and i talked almost on a daily basis. one of the things he points out is if we are going to have a recession, it should not express itself in the job picture in the

place to look is in claims. that's the first place you're going to start to seek distress as claims go up and then you get worried. at this point in time, claims remain pretty well behaved but when they start to spike, if and when, that's when you have to worry because that's will feed into unemployment. every time we've had a recession, on woman has spiked higher. tom: michael mckee will be with us on claims in the united states at eight early a.m. new york time. lisha -- lisa mentions the profitability of texan what kind of profit do you study when you look at big tech? when you say profit, what exactly does that mean? >> we are looking at a couple of things. from a quality point of view, we're looking at ebita and balance sheets. we are also looking at profit

margins. we want companies who have multiple earnings. we are looking at companies with multiple revenues, it's been a tough go it will continue but those are some of the things we look at. lisa: as you move to neutral from being bearish at least from the market perspective, households have a bigger proportion of the market. how does that factor into your view? >> we do look at retail exposure. it's not a big enough part or component of what we do. on a daily basis, what we want to see and many people say we will have a big washout and retail will be a big part of that but i'm not sure that's true. we look at how much retail is involved. what i think will happen and the big liquidity event that will

transpire shortly as we will have the rebalance. people are looking for a big liquidity day and they are looking about how they can reposition their book. there will be a ton of liquidity related to this just because it's month and/order end and that will be your big liquidity day. lisa: what about the relationship between consumer sentiment and what they see on the balance sheets when they look at their 401(k)s? >> depending which consumer sentiment indicator you are looking at, it hasn't been very good. if you look at the consumer balance sheet, 25% of it is tied to equities. if the equity market stays down, that will bleed into sentiment or an bleed into consumer spending and will affect the economy more than it has in the

past. i'm not sure the policymakers understand the degree it will affect sentiment and affect the economy. things happen a lot weaker -- a lot quicker is because of that exposure. tom: thank you so much. but headlines come out across equities and bonds, currencies and commodities. even with the strengthening in the russian ruble, i look at the rush of 2042 -- at the russia of 2042. lisa: we are dealing with the united states not allowing them to pay coupons to the u.s. investors. they are saying you're not allowed to and that violates our sanctions. so russia is responding by saying they will still service those debts and do it in different ways. but this is about what it means when you are not allowed to make

those payments. tom: help me here with the idea of how strong the ruble is. is mr. putin prospering? lisa: there was a great article about this. they are not able to spend the ruble's on anything. tom: an eventful and much more pleasant day in davos, switzerland. stay with us at the world economic forum. ♪

>> our only way to have independence is to grab that clean energy future.

>> talking to people here is that the euro zone and european union will not go into session but there will be a slow down but labor markets are still tight so i don't think we are facing recession but not as rapid growth as we had hoped for but who knows? we cannot take it for granted.

tom: perhaps our most delicate conversation at davos, the former of ireland. he is tiptoeing through the politics of northern ireland he is really something. lisa: he didn't want to overstate it and there is support for unification that so many desire. tom: there is a somber tone in davos with the crises being addressed. and there will be a january davos. i'm going to have a lot of fun because with headlines on the new york state thruway, general electric is in schenectady and for up to the west was a landmark for my ute. when you drove down the turnpike

from searches -- from syracuse, new york, they were a mighty presence. the chief executive officer of carrier global, you guys and president trump knows this had to make not a tough decision but what's significant about carrier is the set of tough decisions over 30 years to compete domestically and compete globally, what have you learned from it as an institution? >> we learned the work should be where the work should be and we been increasing jobs significantly in the united states but we been upscaling by adding digital and engineering and manufacturing jobs in the united states. we have work in mexico we are proud of and have worked throughout europe including eastern europe and southeast asia and in china but the work should go where the work should go and should be natural to be

in that environment and we keep upscaling in the united states. tom: somebody in syracuse, new york could watch syracuse plate basketball. how are they advances by a carrier job in mexico? >> jobs we have in syracuse are much higher content and higher labor skills than they used to be in the past. we've been adding jobs throughout the united states but the level and caliber of the talent we have added in the united states has been tremendous. lisa: how much have you had to pay people? >> we have had to raise rates. our starting wage has gone up and in some cases, it approaches $18 an hour which is up from a couple of years ago. it's moving to the higher skilled roles and we have added automation as well stop lisa: is that where you want to

go where everything has chips? hairdryers have chips now. >> i wouldn't now. lisa: i'm wondering whether you're able to get the supply that you need in your global company? >> is the single biggest challenge we have. one third of our challenges come from chips. we have worked directly with their chip manufacturers and redesigned a number of very chips around chips that are available. 30% of our critical chips we will have redesigned but it's a challenge. the additional capacity cannot come online fast enough. lisa: how do you plan ahead of the time when people are looking at a zero covert policy in china that could potentially keep lockdowns in a rolling fashion for the foreseeable future? >> we are in china for china.

we have a number of factories in shanghai but throughout china with 1100 suppliers there. we are looking at allen center adding more supply base to southeast asia to supply that general region. we still believe the economy is a very global economy. reports of the death of globalization have been highly exaggerated and we are still very much a global economy. you receive more regionalization. eastern europe, mexico and other parts for the americas including the united states. i think we will go to more regionalization but be very much a global economy. tom: plain and simple, can we keep the technological edge and 56 and 57? >> we can but we have to invest? tom: your pressure is to return.

if we were doing a straight interview, i would say what is your use of cash? >> we have invested significantly. our rnd in 2019 was low. we are very aggressive in supply chain and reducing discretionary costs but things that drive growth, salespeople, digital, r&d investments, we are doubling down on our investments. lisa: you're talking about broadening and regional lysing where you are. china is facing the worst situation going back to the highest pandemic, possibly even worsen how isolated will be be, the chinese delegate is not here to address the number one issue for your company. >> i don't believe china will be isolated. we have committed to grow 6% and

we cannot do that without investing in china and india and saudi arabia which looks strong stop we are a global company and we think china is going through a rough patch around covid but china will come back. the growth will come back but china for the long term will be a growth vector for all of us. tom: the romance of the new york state thruway and moving west from general electric to carrier to eastman kodak has been vaporized. where is it in america today? >> you see it lot of labor in the southeast of the united states. we added a number of jobs to athens, georgia and tennessee but what will see in upstate new york is the shift to more digital roles. we have changed half of our digital organization which is new over the last 18 months. we continue to refresh our organization and add more highly skilled labor in our crucial areas.

for example, we have two key ecosystems, buildings and coal change and we have added jobs. we would have a platform that gives you visibility to your indoor air quality and omission so you on a single pane of glass can see all of your factories and facilities globally and you can see your admissions at any single point and you can say why are my emissions greater in china and then you can take action. tom: we are going to break but continue. >> i was going to say it's critically important especially in europe now were 45% of the gas comes from russia. tom: i look at the mcdonald's on

3rd avenue.

so many people are overweight now and asking themselves, "why can't i lose weight?" for most, the reason is insulin resistance, and they don't even know they have it. conventional starvation diets don't address insulin resistance. that's why they don't work. now, there's golo. golo helps with insulin resistance, getting rid of sugar cravings, helps control stress and emotional eating, and losing weight. go to golo.com and see how golo can change your life. that's g-o-l-o.com.

tom: good morning, everyone. from the world economic forum in

davos, our most pleasant day here in may. it is the mountains. it is colder than i expected. lisa: i'm sure everyone is crying for us about the weather. it is beautiful here. we are very lucky to be here, and frankly, not just for the scenery, but also for the conversations. i have found it fascinating to hear what is on people's minds and how they plan to spend some sort of focus going forward with such uncertainty. tom: to give you a location here, for those of you unfamiliar with a really individual map, the first century church of davos, it is a spectacular valley shot looking down to italy and over to our east. really quite close is austria. we are nestled in the southeast corner of switzerland. nestled here as well are too many looking at the sundry crises we face. yesterday afternoon a crisis. we are crisis free this morning.

a report from kailey leinz. kriti: ill will crisis --kailey: no real crisis, but we have rolled over from the earlier gains. the s&p down about 16 points or so. at that plays out, a little more of a bid coming into the treasury market. the 10 year yield down to basis points, just shy of 2.73%. you are seeing some larger action take place in foreign exchange. it is a stronger dollar story today against everything in g10. the bloomberg dollar index up about 0.4 percent. as for some of the more micro stories out there, the one that captured all of our focus yesterday was snap, out with a profit warning on a deterioration in the macroeconomic environment, weighing on advertising. the stock was down 43% yesterday as a result. it is down another 0.6% this morning. nordstrom showing more resiliency for the higher end consumer.

it is up 4%. toll brothers also getting a list of about 2% and after covering -- after cutting its delivery outlook for the year. cooling some demand from the unprecedented pace we have seen in the housing market over the last two years. tom: thank you so much. greatly appreciated this morning. a conversation we would always have a new york, and i know that global wall street leans forward, when priya misra speaks, head of global rates strategy at td securities. within the calculus of the faith and credit, find a point where we are in what james bullard mccall a new regime -- james bullard would call a new regime. what is our new regime? priya: we have had a bunch of regimes. i think the first part of the right move was led by the front-end, by inflation. then we have the front-end starting to get engaged because of quantitative tightening. what i am arguing is we are in a third regime because now the rates market is starting to price in gross concerns, which

is why the yield curve has steepened, interest rates have fallen, led by that front-end. as people are seeing the tightening and financial conditions, and we have started to see some signs of sensitive sectors slowing, the fed may be overdoing it and therefore they may not be able to hike much above neutral. that is why i think process that correlations have come back and they are here to stay. i think growth concerns are front and center. the markets move beyond the next few meetings of the fed, where we know they're going to go 50 basis points the next two meetings, but what after that? i think that is the big focus. rates are pricing and growth concerns, as well is what happens in risk assets. lisa: how real is this narrative? because we are seeing what you're saying, growth concerns rising when it comes to concern. at necessarily the economic data, even though there has been a bit of a softening. you heard jay powell basically come out and say we are not going to be nuanced about this. we need to get inflation down. is there a disconnect here? priya: i think the issue is the

fed's tolerance for inflation. i think the market understands and i am sure the fed understands that monetary policy works with a lag in there's a large part of inflation that they can't control. i think what we don't know is it is clear and convincing signs of a decline. is inflation declining from pce from six to four? if the fed can tolerate that, they can try to get that soft dish -- that softish landing. they will have to trigger a big growth slowdown. i don't think neutral rates are much higher, so the market doesn't understand the tolerance for the fed, and i think the fed is trying to keep all options on the table. they've had an inflation credibility problem for a while, so i think they are not going to commit one way or the other, and we are going to have to watch the data. that is what makes that concern that if inflation does not show a convincing sign, the fed may not have the option to slow down, and that softish landing

looks like a dream. lisa: what you said is actually rather radical, that the fed might move away from that 2% target even though they continue to reaffirm it. what kind of target do you think is appropriate for the end of 2023? priya: i think they are going to target that 2%. i don't look we are talking about a rise in the inflation target. i think we are talking about some tolerance around getting there in three years or four years. maybe if inflation, i think the sep we get from the june meeting is going to rip like a higher inflation forecast for this year, 4.5%, 5%. if it takes a year longer to get to that 2% in the fed is able to achieve that softish landing, i think that is success for the fed. if they want to get to 2% next year, i think the only way out would be a pretty big slowdown. tom: i'm inventing a phrase right now in honor of you, the bostick meeting.

which meeting is the one that rafael bostick says will really lean over the desk and think about where we are heading? do you have a bostick meeting out there where the tip point is? priya: i think president bostick is the first one to highlight some thing we have been saying for a while, that the reaction function of the fed is going to change once they reach neutral. i would argue there's almost no reaction function right now. they went to get to neutral. inflation is too high. when you get there, we are thinking that september, maybe november. i think if we see some signs of momentum slowing and wage inflation, as well as service inflation at least peeking out, and that might happen by november, i think that is the meeting. it is not just president bostick forget i think you will see more divergence at the fed. i think there will be those who say let's not overdo it. maybe we get there a year later. then those that say we have an inflation problem, let's keep going, i think that debate is

right as they get close to neutral, in the fall of this year, that key inflection point for the fed. tom: what you just said there is sacrilege. you ought to be in davos with everyone else, speaking sacrilege. you said there is no reaction function. so what is the theory? what is the architecture we are using right now if we are reaction function free? priya: i'm sure the fed would disagree because policy is dependent on the economic outlook, but i think we understand they are a little behind the curve. should they have started tapering much earlier? should they have ended tapering earlier? should they have started hiking faster? yes. and therefore, i think they are catching up, which is why they want to get to neutral, which is why they have committed to two 50 basis points hike. once we get there, we are in the realm of neutral. we got a dual mandate fed. inflation may still be high, but if growth is starting to slow

down, and i think the market is doing a lot of the work for the fed, it is tightening conditions, cutie is tightening conditions, that is when that reaction function of all that data becomes important. right now i think they are catching up. lisa: to be clear, quantitative tightening hasn't yet occurred, but it will affect a bit of withdrawal of liquidity if people aren't is a paid in that. we are talking about the fed reaction function and what the fed will do at a time when the chinese premier came out and said the chinese economy is facing the worst crisis beyond 2020. it is worse than what we saw in february and march of that year amid the pandemic. how much does this factor very directly into the path of the fed and frankly, where treasury yields will be? priya: i think there is a growth headwind coming from china. i would also argue from europe

because europe is facing an energy crisis. ultimately the u.s. is a bit of a close economy and our labor market is extremely strong. i think that is what the fed is focused on. they talk about the supply-demand mismatch in the labor market. i think they keep it at the back of their mind, especially once we get to neutral. i think that discussion becomes a lot more important. you talk about treasuries. i would say a lot of treasury people thought it was no longer a safe haven because there was no place to hide in the first quarter. risk assets wound up performing, global growth slow, but we did not see demand for treasuries. people who have stayed away from treasuries will say we have priced in a lot in terms of hikes. if global growth is slowing i think the long end of the treasury market starts to become that safe haven. the front end still be more linked to fed hikes, but that long and will see demand i think if global growth continues to struggle. tom: priya, thank you so much. greatly appreciate it. lisa and i come up with jon,

deep into planning for january and davos per your move got to go to dick's sporting goods and support them. i was going to come back and wait to see if we were going to davos in january, and i was looking at the signal on ski boots. they are up to like $600. they go halfway up my knee here. lisa: he's already telling me i should wear full ski gear from patagonia and see how that works. tom: we've got to go full ski if we come back in january just to support dick's sporting goods missing it big, as we saw from target. lisa: there is a real question about what the main theme will be come january. tom: i have no clue. lisa: things have moved from being very definitive on esg, trying to talk about left environment goals, to very practical. there is no understanding right now, so what will there be come january when we actually have to

come to conclusions? tom: i would suggest what there will be is just what we heard, which is corporations are aggressively going to adapt and adjust to what they are given. lisa: will china be here, given the fact that there is so much focus? tom: again, january is post the party congress. we look for "surveillance" to be in china for that party congress if covid clears. please stay with us. the meetings of the world economic forum. coming up on technology, chuck robbins of cisco. ritika: keeping you up to date with news from around the world, with the first word, i'm ritika gupta. in uvalde, texas, a teenage gunman went from classroom to classroom at an elementary school, opening fire. at least 19 children were killed, along with two adults. a number of others were wounded. president biden demanded action to curb the violence.

gun-control legislation has stalled on capitol hill. cranes president volodymyr zelenskyy says there are no prospects or diplomacy unless russia pulls troops back to their preinvasion positions. he vowed that ukraine will fight until moscow returns all of its territory. zelenskyy spoke to a breakfast meeting in davos. the u.s. treasury led a key sections waiver expire. american banks are barred from receiving russian payments. chinese premier says the country is facing economic difficult is much worse than the start of the pandemic. he urged that efforts be taken to ensure reasonable growth in the second quarter. china is all but set to miss its growth target by a large margin for the first time ever. much of that is due to covid zero, which has hammered the economy. americans are returning to summer travel and being greeted

by skyhigh airfares. according to travel surgeon -- travel search engine hopper, fares are up from pre-covid levels and 15% higher than last year. they limit, nation of soaring jet fuel prices and a shortage of pilots which has led to 12% fewer flights. 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. ♪ ♪♪ this... is the planning effect. this is how it feels to know you have a wealth plan that covers everything that's important to you. this is what it's like to have a dedicated fidelity advisor looking at your full financial picture. making sure you have the right balance of risk and reward. and helping you plan for future generations. this is "the planning effect" from fidelity.

another crazy day? and helping you plan for future generations. of course it is—you're a cio in 2022. so what's on the agenda? morning security briefing—make that two. share that link. send that contract. see what's trending. check the traffic on your network, in real time, with the next generation in global secure networking from comcast business. lunch? -sure. you've got time. onboard 37 new people, with 74 new devices. does anybody have any questions?

and just as many questions. shut down a storm of ddos attacks. protect headquarters and the cloud. with all your data on the nation's largest ip network. whoa, that is big. ok. coffee time. double shot. deal with a potential breach. deal with your calendar. deal with your fantasy lineup. and then... that's it? we feeling good? looks like we're feeling good. bring on today with comcast business. powering possibilities™.

t'was a difficult year, and yet a prosperous one for those dreadful capulets. something must be done. my son romeo has sought counsel with some strategic advisors. they suggest that we marry our fortunes with...the capulets. blasphemy! our two households combined in a merger? forgive me, lord montague, the integration would be a... a... nightmare. fear not. these advisors are ey. they managed one of the largest mergers in history, creating billions in value. billions? they've divined a strategy to help us reach new frontiers and leverage our synergies. aren't they just accountants? not at all. they helped nearly 16,000 companies integrate their workforce and operations last year alone. plus, they have experts in global trade. this merger shall be a boon for our spice business. and set a course for growth. here, here! friars, send word at once. yes, m'lord.

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 >> 100% of our gas used to come from russia, but it was only putting 5% of our energy consumption, so we are very self sufficient. >> less than 8% of our gas imports come from russia. less than 5% of all imports come

from russia. tom: spain and finland. alexander stubb, the former prime minister of spain -- lisa: of finland. tom: of. finland, excuse me. were you a good. -- of finland, excuse me. were you a good player of risk? lisa: i was more of a word game nerd. tom: just got wiped out across north america. lisa: we can have a therapy session on that later. what is very clear from both of those interviews was a differentiation from the situation that germany is in with the incredible dependence on oil and gas. it is a very fragmented system, and how they fragmented system deals with it is very different nation to nation. jonathan: will kennedy now, heading our global coverage on energy and commodities. what is the discussion in

germany after the embarrassment of germans leaving rosneft? this weekend we are going into come of this june we are going into, what is the debate among the powers that be in germany? will: i think it is similar to the debate you are seeing across europe. there is in a knowledge of europe needs to and has to wean itself off its dependence on russian energy, and that dependence is writ large in germany, but it is going to be very painful to do it, given the very high inflation rates we are

seeing across the continent. these choices are very unpalatable for german politicians and european politicians. there's a real almost panic about how to balance the need to get away from russian gas without accelerating price rises further. in the u.k. this week, the regulator said that energy bills which already risen sharply this year a going to rise another 42% in october. this is disastrous for most families. lisa: this is exactly it. how much is that going to send a place like germany into recession if they try to accelerate some sort of withdrawal from their reliance on oil and gas from russia? which is the reason why it has not happened, even with the concerns around what has been going on in ukraine. how far are we into that process? how long realistically -- or how short could it take? will: the european union has a plan to go a lot of the way this year. i think that germany has said that gas, oil they want to do quite quickly, perhaps by the end of the year. gas will be a multiyear process. but it is really going to depend on their ability to source energy from elsewhere, which basically means buying gas from the rest of the world. you have created the infra structure to do that via these floating lng plants into germany, so it is starting to work through the logistical issues, but it will have a huge impact on global oil and gas

markets. they will have to buy from elsewhere and deny that gas to other countries, often emerging markets which really need plentiful and cheap supplies of energy. it is going to force the general level of energy prices throughout the global economy higher. lisa: how much does this set the conversation about sustainability back? will: i think that is a mixed picture. obviously you're going to have a lot of people say that we need to go a bit slower for economic issues and energy security issues to put the carbon question on the back burner. i'm sure you've heard that from people in davos this week. on the other hand, there's a sense in which it is an opportunity for renewable energy , that one of the ways europe can replace russian gas, much of which is used to make electricity, after all, is by accelerating its already rapid installation of wind and solar, which are cheaper, so there is an opportunity there. tom: a wednesday tradition, even in davos, we asked the

"surveillance" dumb question of the day. you said u.k. utility expense goes up 42%. are americans going to see the same lift in their utility bills? and if not, why? will: i think american utility bills are going to rise. there are two reasons why it won't be as dramatic. funnily enough, one of the freest economies in the world, u.s. utility bills are more regulated than they are. they are fixed for longer period than they are often in europe. natural gas prices have risen hard in the u.s., above eight dollars a barrel. they may hit nine dollars at any moment. that will feed through the power sector, but those prices are still a long way off where they are in europe. it is getting more expensive and it is still relatively cheaper. but yes, it will have an impact. it won't be 42%, but it will be serious. tom: what is the price on brent you are focused on? what is your tip point on brent

going up that is the next important level? will: i think the oil market is certainly heating up right now. as you see from that chart there, oil prices are fairly steady, but there's a sense in which i think you could be a long, hot summer for the oil market. clearly we've got gasoline prices at a record in the u.s., diesel prices near a record, memorial day on monday, the day in which the driving season of peak demand starts, so we will see people driving, we will see people flying. already u.s. oil refineries are working flat out, more than 95% capacity on the gulf coast. that means demand for oil is rising, and what we are seeing in the physical market is people paying premiums to get their hands on barrels now. we are not seeing and that in the futures price, but that is telling you the market is getting tighter and prices will rise. tom: will kennedy, thank you so much. i hope you come and visit with simon kennedy here in davos in the january medics. -- the january meetings.

i this is fabulous that simon and will kennedy decided to invest in davos, and i think it is a sheep farm. maybe a goat farm. i can't tell. but it is good to see them. they don't make any money on this, but they hide it in a swiss bank account. [laughter] lisa: i guess so. hide it in a swiss mountaintop, i suppose that is the equivalent for a goat farm even though they are sheep. tom: simon kennedy looks like cary grant, so they can pull it off. it is like cary grant and audrey hepburn, and they are throwing the profits into a swiss bank account that nobody knows about. lisa: so you are talking about how in january, if we are here, we're going to be wearing lots more stuff. you talked about dick's sporting goods. i want to revisit that for a second because they came out with earnings expectations. i was looking at the shares, down as much as 20% ahead of the open here in new york city. i think this is telling. it is yet another retailer

coming out significantly downgrading their expectations over the next year after snap yesterday had an absolutely horrendous day. you are seeing other retailers lose in sympathy that are comparable types of retailers. how much are we going to see this? why are ceos being so surprised by how much there has been a deterioration in the macro backdrop? tom: they have to act. i think the confidence the neutrals and the optimists have is they believe corporations will adapt and adjust, so it is clearly a retail and consumer challenge. lisa: but i do wonder how much this goes on to what is going on in china, how much supply chains have been disrupted. tom: can you check us out? because i think i'm going to sneeze. was the fondue last night? lisa: i think it is the sheep behind us. we will have a fantastic conversation coming up. tom: guys, try it in twitter land, velveeta fondue. take the brick of the lida and they put it in. lisa: thanks, tom.

this is bloomberg. ♪

as a business owner, your bottom line is always top of mind. so start saving by switching to the mobile service designed for small business: comcast business mobile. flexible data plans mean you can get unlimited data or pay by the gig. all on the most reliable 5g network.

with no line activation fees or term contracts... saving you up to $500 a year. and it's only available to comcast business internet customers. so boost your bottom line by switching today. comcast business. powering possibilities.™ this? this is supersonic wifi from xfinity. it's fast. like, ready-for- major-gig-speeds fast. like riding-a-cheetah fast. isn't that right, girl? whoa! it can connect hundreds of devices at once. [ in unison ] that's powerful. couldn't have said it better myself. and with three times the bandwidth, the gaming never has to end. slaying is our business. and business is good. unbeatable internet from xfinity. made to do anything so you can do anything.