matt millers and for jonathan fair with lisa abramowicz. the president is on the way to jeddah. emory horton in jeddah. this is bloomberg futures, up 10. >> we have the fed here that has said they are going to do whatever they need to do for inflation. >> right >> when risk assets are moving this fast, the risk asset takes over economic data. >> the higher probability of a recession. >> this is "bloomberg surveillance."

tom: good morning. bloomberg surveillance, a very eventful friday. the president traveling in the middle east, the most historic moment in 90 minutes. costo, -- also, matthew miller in for jon ferro this morning. lisa, the news flow is extort your. what is your story on this friday? lisa: retail sales and university of michigan, also what fed officials have to say. bank earnings are interesting, but wells fargo is not jp morgan. it is not clear-cut, bell weather as perceived by the market. the market is shrugging off what could be viewed as a fairly ms. -- fairly big miss. tom: global wall street, what

occurred this week is urban version--curve inversion, 19 basis points. we have been out front of this, maybe i am overemphasizing the emerging-market decay. lisa: it is another symptom of the dollar strength. it is another knock on effect that is going to cause serious issues. we are seeing that with our own damian sassower pointing out in the credit scare of sovereign debt, in emerging markets you have seen five years of profit wiped out in a couple months. that is what we are seeing. how much and how far can this dollar go as a haven bet at a time when there is so many nations feeling the other side of pain? tom: it is interesting to see this. i'm going to fold the dollar check in with canada out to -- the biggest shock of the week. matt, the biggest shock of the week which folds into the german

gas debate in this autumn, the heat wave in europe. they are talking of modeling of 100 degrees fahrenheit in london this weekend. this codes to l -- goes to leeds and shrewsberry. matt, you have lived there. how is it different in america? matt: i am not sure if we're going to hit the one hundreds here. in new york city, we will. that is a typical temperature for earl and in august. the interesting thing to me, this week has been the euro going down through parity. that is so tightly connected to the gas issues. tom: connect the two. matt: as jordan rochester said a couple of times this week, as we had gas concerns, as we get closer to a rationing of gas use in countries like germany, the

economy, the economic concerns just skyrocket. that is why you see the euro dumping down below a dollar. tom: the frenzy on friday is a cacophony. it is like we are getting hit from all sides the vix tells me equities have been resilient. are we surprised? lisa: some would say yes. if you listen to so many surveys, consumer is still spending. there is still enough strength. the job market is incredibly tight. we are looking into a storm from a place of relative calm. that is the conundrum causing the calm we are seeing in risk assets. tom: did we see a -- high yield down to investment. lisa: people not seeing any kind of catastrophe, how much specifically people are looking for yields in not seeing the default cycle in the same way as in the past. tom: retail sales this morning, i think they will be more important than the 9.1%

inflation report. the sheltered attributes of that inflation report jumpstarted the persistency of inflation that some are guessing on. matt: the retail sales number to me, in conjunction with bank earnings and the color we get from executives are key. we heard yesterday from chris waller, we heard today from claudia psalm the optimism that the u.s. consumer has money stuffed away from the stimulus. on the other hand, credit card spending is rising. question for me is, how leverage does this give the consumer to keep spending? lisa: there is a fairly big correction i want to bring. -- below billion dollars, corrected to being over $10 billion. which coheres to what the ceo is talking about. huge correction. this is reversing it, they beat

on that interest income. that is helping support their bottom line as charlie sharp has been talking about in the press release. tom: we have to stop the show right now, this is important. when there is a correction, we do not care who screwed up. we just want to report it to you. the market participants, tell me in the control room, wells fargo stock is doing premarket is doing better. sonali is with us as she looks at the mother of all corrections. >> the correction came up on the net interest income line. it is important because they need to make money elsewhere. mortgage leaders talking to our dow, we reported consumer banking has been doing better, marginally about 2% in terms of revenue year-over-year than expected. you see other lines of the consumer business doing better. you have charlie sharp saying

loan balances are increasing, but net income did klein in the second quarter. it is a mixed bag for wells fargo. they need to earn -- interest in terms of credit quality. tom: i will put up with the stock is doing. i will call it down substantially. lisa: it is still down. sonali: it is a credit cost. it is the worry, yesterday's numbers do not give you tomorrow's success. tom: everything changes as may be you get to a normal spread business in baking. vix, 26.21. yields, you've got an inversion. let's pivot off a 10 year yield, a two point 93%, below 3% level. that curve inversion, 19 basis points, .9% points. i want to mention, italian

spreads did widen out off of draghi. is it a resignation? lisa: he tried to resign. the president rejected it. they are trying to figure out what is next. it has been a crisis in italy, which raises huge concerns for ecb and has to face the prospect of being accused of political --. tom: hopefully, we went for a wider spread there. italy, the takeaway of the german yield is more grim. dollar resilient, 108.34. sterling, 118.40. an important conversation out in atlanta, the fighting texas add gees -- aggies, victoria green joins us. victoria, it is nice to talk to somebody that actually knows how important texas a and m football used to be. somebody at that game is going to go, i need to reallocate.

i need to have courage to be in the market. how do you reallocate amid this chaos? victoria: you are looking for defense still. it's not time to buy the stuff sold off the hardest. i think as earnings are all in, you can see they are all mixed at best. unitedhealth is good, pnc, good. morgan stanley, more mixed and downtrodden. listen to what these people are saying. a lot of the ceos are not super bullish. they are warning about loan losses on the banking side. we are looking not to buy the step yet. we think the fed is going to have to move. a lot of pressure is on the consumer. we talk about how consumer spending has stayed relatively stable, but that is because they are borrowing. when you look at how much the consumer debt is rising, even though consumers have been spending and travel has been robust, it is not that they are saving or pulling this from

cash, they are adding to their balance sheets and adding debt. something we are watching, we feel the consumer is very stressed right now. the u.s. economy lives and dies on its consumer. lisa: what displaying defense mean at the time when the fed is very much in play and bonds have been out of favor majority of the year? victoria: we would focus on the 92 120 day response. we do not want duration. we want to be boring. i know that is silly, but boring is fantastic. we went cap stocks making a lot of money. we are playing defense and health and staples. we are looking for companies with resilient revenue streams, a strong dollar. a ross store, a costco that is mostly u.s. revenue. you're going to be hit less on this dollar, i feel that is a big headwind for a lot of multinational companies that is being underestimated now because, as the world continues to evolve and the u.s. relative to other countries is possibly

going to tighten faster and raise rates faster, i do not see the dollar pressure easing off. i think versus the euro and yen, because it is all relative, the dollar is going to be extremely strong the next foreseeable future. matt: my good friend paul sweeney, three decade wall street anaren, his number one rule --veteran, his number one rule, do not fight the fed. you point that out as one of your convictions, as well. is there a point or you see the fed start to turn over that you start to go in there? victoria: absolutely. if we have capitulation or the fed starts to put anything dovish and, you know how we love to look at the meeting minutes and parse out tiny changes to see what they may be thinking. i would be looking at the data. they are going to hike until something breaks, either the economy is going to break, the labor market is going to break or the quantity is going to break inflation might rake. those are the things are looking

at, what is going to give first. we are in this massive tug of war, high inflation, tight labor. click to of to the markets absorb them well. the fed only cares about the market if liquidity dries up. we are looking for those scenarios -- canaries in the coal mine. the fed is going to need a reason to change, it is going to be status quo and hawkish until something changes in the data. tom: thank you so much, g squared for being with us. i want to scope out wells fargo with a drop down from a 3880, almost a 39 level, down to middle 37. we have made halfway back on wells fargo with net income correction. lisa: they have increased their provisions for credit losses. perhaps, that is what people are picking up on for a bank exposed to the consumer. they are saying interest income was a huge benefit to their business and expects it to continue to be, given higher

interest rates, given where we are in the environment. going forward, it will be interesting to see what they have to say about the mortgage business that has lost favor with a lot of investment banks, considering the fact mortgage rates are high. also, how much they see the consumer weakening currently, versus the strength we hear from others. tom: what is adventurous is the equity market with a nice lift. futures up 13, dow futures down 28. for the third day in a row or so, we have the larger indices leading the nasdaq higher. that somehow changes in the afternoon. right now, dow leading spx for actually, leading on a percentage basis. nasdaq 100, nasdaq up .3%. we are going to continue most importantly to monitor the travels of the president of the united states. he will move south to a historic

visit. the kingdom of saudi arabia, and marie is in --annemarie is in jeddah waiting for the president. this is bloomberg.

>> i fully support another 75 basis point increase. however, my base case for july depends on incoming data. if that data comes in materially stronger than expected, it would make me lean towards a larger hike at the july meeting. tom: one of the best researchers in america, who will join us later.

vincent reinhart of the fed knows well, christopher waller is truly one of our great thinkers on economics, the governor of the federal reserve after his ownership of research at federal reserve bank of st. louis. i want to dive deeper into jerome powell, the central banker of the world and bounce off lawrence mcdonald and his appearance yesterday and the great work of damian sassower. we quote the dow, we quote the standard 500, focus. the five year yield each up, lisa, is 16.5%, it has gone from par down to 72 with three days of erosion this week. em bonds are graham, according to damian sassower. lisa: and according to every metric you look at, because of issues having to do with commodity prices spiking with a lot of these nations being commodity importers. i think of egypt and how hinged they are to ukrainian wheat.

if you think about the butterfly effect that is going on globally, it is creating distress. tom: as you prepare to get the delight 27 fed meeting tomorrow, -- july 27 fed meeting tomorrow talking to the international monetary fund into august. annmarie knows this, it is 109 degrees in riyadh so she decided she would go where it is cooler. it is only 100 degrees in jeddah . a strategic move for annmarie. what kind of heat will biden received from him? annmarie: it is hot in riyadh, but it is much more humid because we are on the red sea. the president is coming into a difficult line to walk when he sets foot in the kingdom. he will be meeting the king first, and that meeting with mohammed.

all eyes are on this meeting. this is the pivotal moment of the trip. mohammed is gracious for the administration to come and meet him, especially the president. i do not think he will get the same heat others in the administration have gotten from mohammed. i think he will make it clear that, i am the individual. i am the king's son. i am running day-to-day operations for my father. if you need something out of the kingdom, you have to go through me. lisa: how much are we going to have hear about the potential capping of -- a lot of people think -- do not think the sanctions have worked in an acting more pain on russia than the rest of the world. annmarie: great question. the administration wants to enact this, but needs a lot of individuals countries on board with this, opec russia is part of opec plus, and has strategic relationships when it comes to

the energy market with the kingdom. they have to get those shippers and insurers involved if they are going to have a price cap. we should know what is happening in the market right now is that russian oil is still leaving russia, just heavily discounted. a lot is going to india, a lot is going to china, a lot is going to the middle east. a lot is going to the port and united arab emirates, into the middle east and being exported out, depending on whether or not it is going into vaseline, diesel, jet fuel. there is the market working in a sense of a price cap, a russian crude is heavily discounted to those buyers. matt: those digital and's are going straight back to europe and the countries that sanctioned russian oil initially. putin is making a ton of money throughout this. back to saudi arabia, back to president biden strip. for you were a washington correspondent, you spent a good decade going to opec meetings

and covering the oil market closely. are we wrong to be worried about spare capacity? it does not look like a lot of opec nations have so much. is that a station we should be making, the base level can produce and the base capacity? annmarie: it is a great question to be asking. yes, you should be worried about in the sense you have opec countries not hitting their targets right now. when you look at nigeria, libya for that matter. there are only two countries that have this spare capacity, which is the king of saudi arabia and the united arab emirates. there are a lot of question marks about how much spare capacity they have when they pump that oil, they were able to do it for about three weeks and that was it. the question of, what spare capacity they have, and how long could it last? the kingdom has took a lot of pride in making sure they can deliver barrels on the market, but you have to think that if you have the uae and the kingdom

going full on oil market, prices will probably rise because they will realize there is not a lot of spare capacity. i imagine the conversation is for a gradual increase of barrels to the market. tom: what is the price of this? what is the military hardware we have to migrate to protect them from the insurgents of yemen? annmarie: we are not sure yet in terms of what the administration is going to sign off. we do know that when it comes to the kingdom, there has been a lot more conversations with the defense industry, as well as our pentagon. they definitely want more defensive missiles, that has been and ask for decades and years. i think what the kingdom is looking more so from this visit is the fact that what it symbolizes to the region, which is that our partners are still with us in the region and the buck stops at them. americans are the strategic partner in the region, and they want to send that signal to to

run. tom: we are minutes away from the most historic meeting. it does speak to the regional stability, starting with tunisia or three weeks ago, not to be the gloom of an arab spring, but with yields in each up at 16%, it speaks of arab fragility. lisa: we are hearing from janet yellen getting concerned about fund flows into emerging markets, cautioning against volatility there. it could become an area of much bigger distress. you are right to point to egypt, it is one of the key nodes when it comes to the lack of wheat exports coming from ukraine. how do we look at that and avoid a social unrest if you see the prices of the basic staples of the daily life being risen that much? tom: i want to take 48 seconds and talk about the gloom we are

going to see on wall street internet this week. we are going to do wall street tonight. starting 3:00 p.m. friday, doom and gloom. a single bullet from douglas kass, who trades often. sometimes, makes money. he goes, i am buying. that is a lonely voice. matt: absolutely. especially because a lot of people think we are only halfway through this correction. michael burry has been tweeting it. tom: we talk about many different opinions tonight. i believe professor summers will walk in the door tonight. tonight, lisa and myself. wall street week

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tom: good morning, everyone. matthew miller in for mr. ferro. futures up 14. vix, 26.11. brent crude back above $100 a barrel. other than that, it is stasis. i want to take 12 seconds and

note a grim and tally and -- italian inflation report. it is out 8% in june, back to 1986. what is stunning in the report, for low earners where they subgroup that out, it was 8.3% in the first quarter, and 9.8% for low earners in italy in the second quarter. the uneven burden of inflation is tangible. on individual securities, lisa. lisa: i want to take a look at the bank earnings. we did get earnings from wells fargo showing they did have in-line interest income, which was the supporter. shares down .8%. you're looking at blackrock, shares unchanged. blackrock reported earnings with a decline in the amount of

flows, with a decline in total assets and a decline when it comes to withdrawals from their active funds. if you look across assets, unitedhealth was interesting and reported earnings, they beat estimates by a significant margin. they increased their forecast going forward, which is interesting at a time when so many people are expecting health care costs to increase and push to inflationary costs. maritime digital and microstrategy doing well because of the bitcoin gain we are seeing. marginal, but it shows how much these are adding to the marginal mood and fraud their assets. tom: -->? matt: the main reason i care is we show, or learn how connected -- is. his ftx, his other funds had

their tentacles deep into these different crypto lenders and businesses. it is amazing, some have called him the jp morgan of crypto. tom: how is he doing 60,000 down to 20,000? how is this guy doing, giving -- given these losses? matt: i think he is doing all right. tom: he can buy the hummer jon ferro is looking at. michael collins, joins us now. michael, i love your research note when you talk about the relative value trade, the relative value rationalization that is out there. amid this volatility. you cannot do it, can you? michael: the markets, the credit markets are performing in a pretty controlled way. the selloff, as brutal as it

seems, has been orderly. but, there are a lot of good relative value opportunities right now. i do not know if it is a great time to jump in and by rates or credit, but there are a lot of interesting opportunities. tom: what does a relative value trade --constructive -- construct a relative trade for us in real time. michael: the one that hasn't been working is in our plain old state treasury market. that 20 year treasury, which they have talked about for a long time and issued a couple of years ago and put on a treasury future recently, is one of the cheapest bonds in the world on a lit have basis. this is inside baseball, but you can buy a 20 year treasury, dollar 10 year and 30 year treasury so you have no interest rate risk or curve risk or credit risk and pick up a lot of relative value. tom: that is called a parakeet,

a golden eagle. i do not know. lisa: it is called trading into a less liquid asset. tom: everybody makes money. lisa: more in terms of premium, then you can cash out. michael, how much can you go into less liquidity for more yields at a time when everybody is saying liquidity reigns supreme? michael: that should not be an illiquid asset. it is a 20 year, on the run treasury that was just issue. they just did and out on option of this week, they have -- an add on option. trading with this huge, illiquidity premium, that should not exist. that will eventually earn money. maybe it will take 20 years, but that will earn money. there are other, less liquid assets starting to feel the pain. lisa: what i wanted to ask, when

people go into less liquidity, they might be adding on a unger term outcome -- betting on a longer term outcome. there could still be illiquidity crisis. how much are you banking on that not happening by trading into certain instruments like this, versus saying, it does not matter because longer-term is longer-term. michael: i get asked all the time about, what are the crack's in the system, what are the things that could bring this system down. it is hard to find them. credit quality in corporate america, in the high-yield market is solid. liquidity is good. he banking system, notwithstanding some of these earnings issues we are seeing, the banks are solid gold from a credit quality standpoint. they are solid from a capital standpoint. the housing market, notwithstanding the fact we saw it go down. prices will be lower than they

are now, but they are not owned on a levered basis. matt: i just bought one. i stretched. lisa: the areas -- michael: the areas i'm worried about our, think of the commercial real estate market. if you had to sell 100 pieces of commercial real estate today, you would have to take a 15% haircut. that is something that has to happen. matt: fortunately, i funded my purchase shorting jgb's. i cannot believe we have not talked about the yen. at 138.70, is it a no loss proposition two short this currency as a carry trade? michael: there is never a no loss proposition in currencies. i try to model current sees 30

years ago, it is really hard. there the most -- they are the most difficult asset to figure out a fair value on, they tend to trend. the dollar, is going up. every other collins -- currency is going down, versus the dollar. the great thing about currencies, they are the great equalizer. the u.s. is the strongest economy in the world right now, we have inflation, a central bank hiking rates aggressively. the dollar strength will ultimately weaken our earnings, we can our economy, get inflation down and support these other economies that need it. matt: what do you buy right now on the curve? i was talking to gary shilling's who is buying the dollar. he is buying the 30 year long bond, that seems to be consensus. michael: i talked about the 20 year, but that is a nuance. i think adding duration in the

u.s. and other places in the world, european rates, even though they are lower than ours, there are more rate hikes priced in by the european central bank in europe than there are from this point on in the u.s. i do not think they are going to get those. i think interest rates in general has probably gotten too high around the world, and they are going to come down over the next six, 24 months. i think that is probably one of the first things to value. tom: what is a tenure target for you? what is the p jim feel for where the 10 year is holding. michael: i think it is going to be two before it is four. tom: wow. michael: the fed might get that fund rate to three and a half, but it is going to be lower. it might be lower 12 months from now. that is part of the cycle we are in.

we are in a big inflection point. economic activity around the world and the u.s. is rolling over a lot harder and more quickly than the fed would become trouble with. we are at a stagflation was. if you look through this new your -- new york term inflation risk, inflation is going to be lower. tom: really showing the divide that we see from a distant 2% yield, to a distant 4% yield. lisa: right now, what we are seeing is that a number more -- number of people are weighing in on that 2% rather than the 4%. there is a survey that was just published that showed about 50% of the u.s. recession is currently baked into the economy and what economists currently expect. how much that has changed from a couple months ago. tom: citigroup earnings, lisa, thank you for mentioning it.

i was wrong on this. we have the proverbial seattle slew of economic data shape. retail sales could adjust that recession guesstimate. lisa: it could adjust how far the fed decides to go, they are meeting in about 10 days. how much is it going to take this cue from the consumer strength, or lack thereof? what is the worst print for the market right now, higher than expected number if you get people going out and spending, that encourages the fed to be more aggressive? or a lower than expected spend that confirms the weakness people are baking into their expectations? tom: five europe, total tenure inflation view -- five year out, total 10 year inflation view. we will see how unanchored we are. matt: it is interesting the conference board numbers are not nearly missed constructive. tom: huge divides from the

caution of atlanta gdp out to more constructive data, as well. we have constructive data in the market with futures up 12, thevix 26, dow futures up 37. good morning. ♪ ritika: president biden once saudi arabia to increase its oil outputs to curve soaring hassling prices in the u.s.. he travels today from israel, he meets with crown prince and there will be no public announcements on boosting or supply -- oil supply. a person familiar says talks will continue with the opec-plus cartel. a huge blow to president biden's ambition -- ambitious economic agenda. a top leader mentioned he would not support tax increases. he will back proposals on a health care and drug prices.

european union falling behind on its high-profile performances to deliver a central aid package to ukraine. almost two months ago, ecb president ursula von der leyen sent $9 billion in loans, only a fraction of that has been agreed on so far. the eu is suffering economic pain following inflation and the cost of russian gas. cutting 20% of its staff, company warned of a prolonged downturn amid the collapse in crypto prices and broader economic instability. -- has seen itself cut in half the past month, the average price of an nft dropped by nearly 40%. airline delays in the u.s. is mostly self-inflicted. share of delays caused by airlines as opposed to weather or air traffic control has surged to the highest level on record, according to data reviewed by bloomberg news. global news 24 hours a day, on air and on "bloomberg

quicktake." powered by more than 2,700 journalists and analysts in more than 120 countries. i am ritika gupta. this is wennberg. ♪

>> as far as ecb is concerned, there is a shutdown that is going to lead to a sharp decline in growth. policy becomes more tricky than it is in the u.s.. tom: exceptionally strong yesterday with us, subadra rajappa head of u.s. rates strategy atsociete general. we are focused on that, we think it is going to be -- we make jokes at the snooze fest, that is unlikely into next week. someone who knows this, someone

who lives where i do not know where it is at the map. luxembourg, the vicinity of belgium, germany and france. sebastian galli has done good work over the years, thinking with important research notes with nordion. lisa: sebastian, thank you for being with us. right now, we are looking at what could be a storm in europe next week, and especially with nord stream one supposedly coming back online. what does the ecb do? what do they do to get ahead of this in the face of italy? sebastian: complex situations, my colleague pointing out that the odds are strong that the pipeline will stay at a low debit. the reason is, we are in a war between the west and russia, the ukraine half to strike us because they have to hit the source of funding and weapons

going into ukraine. the ecb knows this. according to the --, maybe 2% of high inflation because of natural gas prices spiking higher. what can the ecb do when it is so far behind the curve, it needs to reassure the ecb governor is credible. she is a good communicator, she is reassuring. she will probably do a good job bringing the rest of the council with her. she has to accelerate to the pace of rate hikes. maybe they will surprise us with 50 basis points at this meeting. any to reestablish the narrative. having done so, they are left like the united states and hiking may be too much because it takes a long time between the hiking process and inflation coming down. the ecb is hoping at that -- is that oil prices collapsed on the back of a global recession. the process has started, it might take a few more months. eventually, it should be lower

and it will help the united states but also europe. lisa: we are talking about the idea of the ecb going more aggressively, it raised the concern of italy, bond yields surging as the ecb moves away. the ecb said, we will reinvest some of our holdings into are regions that need it. how difficult has it come from a political perspective, given what is going on with italy with the potential disruption in government? sebastien: it is a blank check. europe over the years has a social contract that, if you do the right thing, we will do the right thing with you. if you have parties such as five stars starting to break apart this contract looking only at their own interest and not national and european interest, the entire thing can blow apart, it has happened in several emerging markets. argentine air -- argentina, that

is a situation italy has faced. they have the votes to do it even without five-star. it is not as bad as it looks, but the ecb cannot give something unconditionally to italy that italy delivering something good from a legal point of view, and a political point of view, it is difficult to have some anti-fragmentation tool that is perfectly efficient. they can do a lot. they could give us funding to manage wealth managers. matt: that would be great for you and the governing council, probably for the most part once to do that with the transmission protection mechanism, the tpm is what i am sure we will be calling it in a couple of days. not the bundesbank, they are not all for this. how is that relationship going to work out? sebastien: you have this good

cop, bad cop regime in europe. spain will play the good cop, germany will play the bad cop and the french will oscillate between the two. this is how europe essentially works, even with spain, italy and france but not one that can express. if you look, there is a legal framework. germany and austria, northern countries are important politically. you cannot give a blank check to italy to do whatever it wants when five-star spends more. there is no problem, as long as it is for the people i care about. it just does not work. the german say, it is our time to play the bad guy. he has been nice until now. matt: levels are you watching in terms of spreads? we saw a btp moon spread flow to 220 basis points. what is concerning? sebastien: it is not that

concerning. what it tells you is that the market is risk seeking. we have pg i am coming and saying, less exaggeration. this is something that is common among asset managers. we are still in that process of inflation overshooting and not being certain with the dynamics are, they are so incredibly complex. as it maintains curves and relatively low levels, italy might seem frightening for a while until the fragmentation tool came in or the perception of it. it could have been worse. consider, the risk reward is not particularly good right now because the equilibrium is unstable. it doesn't take much for it to go much higher or much lower, and i believe the ecb will do the right thing at the right time. but, it is not a free check. tom: thank you so much, greatly appreciate it this morning. futures up 11, dow futures down

36. fix -- vix getting near a 25 level, which i would suggest as a huge deal. as we go to citigroup, in six minutes, i want to drift back to jp morgan yesterday. there was a fair amount of gloom about that report, i am sorry. i saw a lot of news organizations say, yeah, but, three hours later. lisa: our first major reaction was, look at that. there is a suspending share buyback. jamie dimon came out and railed against regulators, railed against the stress test that required them to hold back on the share buybacks or build enough capital and said, things are fine. the consumer is looking fine. this is not going to be an armageddon and markets. tom, you are looking at a i for kadant message of the now versus -- bifurcated message of the now

versus later. tom: i'm going to go into the divide between the european banks and american banks. citigroup is the arch international bank. going into europe right now seems to be a challenge. matt: absolutely. going into europe has been a challenge for a solid decade. it has always been difficult for foreign banks to come in and make money, there are not great examples of those who have. tom: james fraser is going to report on what citigroup is doing. off of wells fargo, with confusion off the corrected headline. wells fargo, morgan stanley and jp morgan out. citigroup, next. futures, up 11. good morning. ♪

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>> what is happening in europe is impacting the u.s. >> i think we are near the peak of cpi. >>