>> i don't know how long it will take but clearly the momentum is down on inflation. >> very far away from the fed's objective. >> there is still a lot of work for the fed to do. >> the economy is slowing, they want to be sure they are on the right track. >> you can look at this as the beginning of the battle and having more work to do. announcer: this is "bloomberg surveillance." tom: good morning.

jonathan ferro, lisa abramowicz and tom keene. i appoint this reallocation friday. everybody has a rewrite for the weekend. cpi, wow. jobs report, wow. everybody has to adjust. lisa: we will pull the lever on triple leveraged all-cash for reallocating it to bitcoin or big tech? tom: fractional shares of apple maybe. lisa: when you see the bottom? how far out do you look? a month? the rally could continue in the next three weeks, or prepare for the yield curve inversion signal? still signaling a slowdown that some people say has not been priced in. we did this with ron temple in the last hour. david leibowitz in a few moments. looking forward to this raging debate about what to do here.

what to do here is always a fixed income market leads the way. the fixed income market leading equities now? lisa: right now it would send the same signal if you look at credit that equities are signaling. if we get any downturn, it will be shallow. resilient companies will remain resilient and can pay their bills. that is why you are getting the biggest inflows going back to september of 2021. i do wonder why we are still seeing yield curves inverted. why are we seeing such low longer-term yields if people believe we do have some sort of soft landing ahead? these are some of the conundrums baked into the bond market. tom: let me steal from john the mere -- lemere. kailey leinz is the cleanup to early. you are doing a more european show that we are. is there a belief the hydrocarbon disaster of europe

can move over to the united states? kailey: i think there is a sense the united states will be relatively more insulated. europe is dealing with an energy crisis that could get worse beginning today with part of the rhine river becoming impassable for cargo. tom: i don't need a tour guide here. i'm scheduled to take the tour in 2025 to go castle watching. we can't get coal so net gas goes up, right? kailey: exactly and that's the problem europe is facing. it's an energy driven inflationary shock, one that the ecb is poised to do little about on the supply side. they are still trying to hike rates into an economy weakening due to the same energy crisis and the high cost of living. tom: lisa says get to the data check. futures up 13. dow futures up 99. vix, 20.19 shows a resiliency

of equities. we have less curve inversion now. a negative 34 basis points is important. i don't know who is doing the real yield. .38% on a friday. we need to be brief. here is lisa abramowicz. lisa: i will be doing "real yield." and we have real yields across the board. the first time going back to before the pandemic, a fascinating turn of events given the rally we have seen. 10:00 a.m., this is what we are looking for. if we framed the day definitely, university of michigan sentiment friday. how long for the increase for how people are feeling when you get a reprieve from gas prices? this particular survey closely tracks gas prices. when they got up, people feel worse. how much do we see that trickle

into longer-term inflation expectations and how will the fed respond to that? 12:00 p.m., the real world. we saw on wednesday food rose the fastest going back to prices to 1979. how much can supply come back online? how elastic is this market as we deal with drought across the country? the usda world agricultural supply and demand report comes out. we get a sense of corn, soybeans, and what is going to be a host of other commodities. on sunday, saudi aramco reporting earnings. we expect a similar boom in terms of earnings. do they give a sense of this two stories from the iea and opec. we hear from the iea demand will increase as people pivot from natural gas to oil. we hear from opec they will be a surplus. which is it and can saudi aramco

get that and it cites? tom: we have two short of a visit with david lebovitz, j.p. morgan asset management. buried in your note on the struggles of the summer and into the fall and trying to say i don't want to run around with my head cut off. the idea of three years being the new short-term. how do you invest for three years as the new short-term if the present is such a jumble? david: i think when it comes to three years -- let's call that the median term -- the key is to focus on two things. valuation and the focus on earnings power. stockmarkets have re-rated this year. july was a good month. prices are not necessarily looking as attractive as they did. when we look at the equity market, there is fairly to ministers person between the extensive -- expensive names in the cheap names. sometimes people are too positive on prospects for earnings.

it is blending the combination of value and earnings growth that i think will be the best one to take over the next couple of years. lisa: your colleague said that stocks will revisit their all-time highs and then surpass them in the next three years. that is consensus if you look across the different wall street houses. it is the path they get there that is the question. what is the trajectory? how load to be go before we go back up? david: he's actually my boss so i better -- [laughter] it's a reasonable point to make. over the next three years we will see new all-time highs in the equity market. the question is much more so around how we get there. people are still talking about the fed and potential for a soft landing. the reality is the historical data does not suggest the fed is terribly adept when it comes to landing the plane gently. i think we will experience

turbulence into the end of this year at the beginning of next year. it could easily go down below 4000. the market wants to see two things. they want to see the inflation genie going back into the bottle. i think the market was to see deterioration in the labor market. it is somewhat contrary but if we see the on limit rate rise after a very hot number in july, that will give the market confidence with the fed is doing is correct. if we have a downturn, it will be relatively short-lived. the market will become double -- be comfortable. we need to see signals labor is begin to cool off. that is instrumental to getting a positive trajectory. kailey: another conversation we had yesterday was with jim polson who said he sees the case for traditional fed tightening dissipating.

it is not the fed driving the boat right now, it is the market. it is consistently pushing into looser territory, not paying attention to commentary from federal officials. david: it is concerning to see financial conditions loosening after back to back 75 basis point hikes. i think the fed will continue to move fairly aggressively. we will see what the futures pricing looks like when it gets closer to september. i think if the market is opening the door for the fed to do another 75 basis points, they will do it. what the fed is trying to do was get policy into territory that will actively slow the economy. i don't think it will fight the futures market. i think of the door opens up, the fed will step through it. it will remain on a relatively preset course into the end of the year. what i think we'll get them moving in the opposite direction is a meaningful deterioration in the labor market, but they will tolerate a higher unappointed

rate than they have historically. tom: we are drowning in the history of the moment. the idea of a search of a former president's residence is an example. you arguably went to the most prestigious history program. how do we invest and adapt to the history in the making that james mcgregor burns and others wrote about? david: what is interesting about the current environment -- we meet with clients across the u.s. and they want to know what is the big risk. usually it is something -- tom: the threat to democracy. david: that is what angle to take. there are risks we can see in risks we can see but we have more difficulty getting her arms around. if we see some sort of imbalance in the economy, housing running too hot, investment spending running too hot, we can quantify that and begin to build expectations about what a reversal would mean for the

outlook for economic growth. the problem is the real risks are coming from the social side of thing. from the political side of things. those are difficult to quantify. we have been telling clients when you can see a clear risk, you can hedge against it. you can't necessarily see the risk coming or quantify the risk that is just, that is when diversification is your friend. tom: david, thank you for visiting. this is a huge, huge deal. it is phrased different now over 50 years. how do you invest with a cacophony of history and news flow we are dealing with now? lisa: what david said was brilliant. when you cannot see the risks, diversified. when you can see the risks you can more accurately hedge. tom: channeling peter bernstein i would say. thank you, david leibowitz.

futures of 12. dow futures of 85. next week, retail sales. coming up, geoffrey yu of byu mellon. this is bloomberg. ritika: keeping you up-to-date with news around the world, i am ritika gupta. president biden is a fairly watching his reelection campaign in the month after november's congressional elections. that sets up a rematch with donald trump. president biden is described as upbeat about recent victories. most democrats would rather have another candidate. fbi agent reportedly searched donald trump float a home for classified documents related to nuclear weapons. the washington post says people did not save the document were recovered. the former president called for the reli -- release of the search warrant. san francisco's fed president

says the cooler inflation reading for july may be appropriate for the fed to slow its interest rate increases to 50 basis points next month. daly told bloomberg tv the fight is far from over and rate hikes need to be dependent on data. three of china's biggest companies plan to delist from u.s. companies from the fallout over if u.s. regulators over chinese companies in the u.s. -- has lost more than $4 billion in a series of side deals to boost compensation. the japanese billionaire took the unusual step of establishing personal stakes in a series of softbank ventures in recent years. that was a mixing of companies and executive interests that drew the ire of investors. 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 am ritika gupta.

this is bloomberg. ♪

>> former president trump is that, a former president. he is a citizen, not a president with the ability or the law abiding notion he can hold onto classified documents. a notion he might still have the

information, that in itself would constitute a crime. tom: the senator from maine and former secretary of defense william cohen on the political moment at hand. i think it's important. in the equity cave, the guy who makes us go has a chart out today that alludes to what you said earlier. in the swing year in recent days of cash losing -$4.3 billion and stocks gaining $18.1 billion. extraordinary. lisa: it is stocks and credit and bonds. it is taking cash out and putting it into everything else. somehow this has been a shift. right now there is a vote with the money. it very much is for a shift in reality.

tom: in a cave. peter, thank you for that work this morning. emily wilkins drives us forward with bloomberg government. we have been talking about political events and mr. trump. what might actually happen in washington. is it the dog days of august in washington? emily: we are hoping maybe after today everyone can finally take a breath and get onto the august we were hoping to have at the start of this year. you saw the senate work last weekend, pulling all night sessions to get through. what is left of president joe biden's proposed reconciliation package. the tax pieces, the climate peace and health care piece. the house's attorneys today. they expect the final vote around 2:00 to 4:00 this

afternoon. it is expected to pass. democrats had concerns with the bill. it did not have state and local tax caps and deal with immigration. it left other pieces on the cutting room floor. but if you want to go they were looking at a reality where they did not get anything else passed. everyone decided they would rather take what they have now then not take anything at all. lisa: we focus on the potential for a legislative victory more than the substance itself at times. i wonder how much you hear under the hood of getting something done about the blowback from allies of the united states who are saying you are accrediting companies that make cars, make batteries, make goods. that affects us badly. how will you help us? how does this affect international relations of the country trying to repair what has been lost? emily: to a certain extent it's a valid question and a valid angle to look at. i think now lawmakers are little

bit more focused, particularly those who have reelection coming up, on their own districts. what can they sell to americans? a lot of this is going to be things like extending subsidies of the affordable care act put in place during the pandemic. there are concerns of those are not extended people will see their insurance premiums go up right before the selection -- the election. climate change is a big priority for democratic voters. being able to say they got that done. the minimum 50% corporate tax on certain corporations making high amounts. democrats have seen polling shows americans are supportive of taxing companies and making them pay their fair share. these are policies lawmakers can go out and promote. there is a lot of things they were initially talking about. childcare tax credits. pre-k on a national level.

they will not happen at this point. there might be some concerns from democrats those things aren't getting done. it is really the big attitude now in washington that something is better than nothing. lisa: especially when the midterms are three-month away. as we get closer to the vote we had conversation about a potential shift in the narrative. odds skewing more the democratic party's favor than a few weeks ago. at the same time we know american politics are extremely partisan and polarized. how many mines realistically are left to change? how many swing voters are there? emily: it is funny you mention that. i was in michigan at the start of july reporting on a house race between two incumbents. i talked to all these folks. hours before the polls close i get a text for my mom like, who should i vote for? there are a lot of americans. they are not thinking about

washington right now. they are not thinking about the cpi numbers. they think about what they are paying at the grocery store and how much they are putting in their gas. they are focused on their homes, families, communities, and will not think about this stuff until october. there's a lot of time for the narrative that change. we have more cpi reports coming out. we have more to the story of the search warrant at mar-a-lago. a lot can change. tom: that is textbook. i'm imagining my mother calling up and saying who should i vote for. emily, who will vote in vaio me -- in wyoming for ms. cheney? how far down will she going to say? emily: we have seen liz cheney shifting her messaging. it's not about winning the congressional seat. it is more about her legacy is going to be in washington and the next chapter of her career, whatever that is going to be. we saw her make her final pitch to voters before tuesday's

upcoming primary. it was basically focused on donald trump and her saying he's a threat to this country. he cannot be back as president and she will do what she can to stop him. it does not sound like your normal political ad. it signals what we saw yesterday. she's 30 points behind. she will not be able to hold the seat. tom: can we agree that lynn cheney never called up liz cheney and said who should i vote for. emily: i think that family has a slightly different dynamic. tom: emily, thank you so much. emily wilkins with bloomberg government in washington. i'm sorry, lisa. that's great. we have gone so far from where your father held you in his arms and you push down the medal toggle switches at a voting booth. we are affected chads i guess. lisa: it depends where you go.

new york city still has those metal tabs. they're not electronic. all the people on the ballot, all the judges, everyone on the local and beyond when you go to the voting booth? tom: i don't. is a huge problem and speaks to the television focus and the radio focus as well at the national level where we are maybe less familiar with local politics. we are familiar with the data check. a lift to the market on a friday. futures of 12. geoffrey yu will attend. victoria fernandez as well. ♪

tom: good morning. "bloomberg surveillance" on friday. jon ferro on assignment. a friday to go into the weekend reading. it will be more than interesting on what the equity markets will do. futures up 14. dow futures up 105. still extraordinary given the move from june.

two-year yield, 2.31%. less curve inversion than pre-cpi. -34 basis points. moving it from a greatly inverted -49 basis points. brent crude, 98.45. on the individual equity stocks, lisa pulled an all-nighter to give us. lisa: analyzing rivian and electric vehicles. rivian is fascinating. their shares are lower by .2%. they beat expectations with a forecasted bigger than a speck that loss. they have not gotten production up to speed to meet all the demand. they had people making orders two years in advance. in the meantime the costs are going up of raw materials they use for all these goods. how do they deal with that

without going back to a lot of these individuals and saying give us more money? that is not what they want to be doing. jessica alba's company reported a worse than expected earnings, but also a bigger than a bigger than effective loss for the year. those shares down nearly .3%. toast is surging. i had not heard of it before today. tom: you are struggling today with these components. toast? kailey: they make restaurant software. lisa: they are up more than 13%. it comes after doordash outperformed. how much are people ordering in doing well? the chinese stocks -- this is boring. petrochina and china petroleum and chemical corporation plummeting after saying they were going to delist from the new york stock exchange in mid-september. this comes after pressure from china.

they had fallen were significantly. now down just one from percent -- i'm pointing to bed, bath & beyond. everyday when i come and i look at bed, bath & beyond and amc to see if the reddit phase is going strong. the individual traders. it is still on a tear. up 4% because why not. tom: was that the worst stockmarket report we've ever had? that was like a friday struggle. kailey: i'm all for it. she nailed it. tom: did facebook do nothing yesterday? kailey: it is called meta now. tom: tesla-free. kailey: to her point on bed, bath & beyond, and we laugh about checking meme stocks, it speaks of speculative fervor that some areas is back. isn't that the opposite of the conversation we had a month ago when the fed was tightening policy and you don't to be in those areas? what signal does that send more

broadly. tom: let's have you bring in victoria fernandez, chief market strategist at cross mark global investments. out of rice and texas a&m, she understands speculative fever. kailey: the behavior we have seen not just in the more speculative assets by risk assets in general, the equity market rallying, is it a bear market rally to you or something you can buy? victoria i'm not 100% convinced it is a sustainable rally. you look at some of the signals you want to see when you hit that bottom, then you get a sustainable rally. how week and a half ago we did not have many of those. we were getting a few more now. a number of stocks making their 20-day highs. those trading above the 20 in 50-day moving averages. the numbers are moving higher into the ranges where you want to see them. when you have got this fed determined to continue to raise

rates until they really cause pain in the labor market and bring the inflation number down, i think you have to be concerned there will be some volatility going around. the rally we have seen in the market in the last month was driven by lower yields. not driven by earnings or by equity premiums. you have to be careful. now we are seeing rates move higher. that can cause consternation for the equity market. kailey: you are saying that the fed is going to stamp this out. they are going to push back on loosening financial conditions because they want them tighter and they may be more aggressive than just saying the words that we have heard in the last week. victoria i think that is correct. financial conditions are looser now than they were in march when we started this. we should have seen this continue to get tighter and tighter as the fed moves rates up. you had the cpi and ppi reports. yes, it was positive but i don't think there is any kind of game

changer. cpi month over month the not go higher. that doesn't mean we are on this downward trajectory for that number for those economic reports. i think the fed will continue to do the rate hikes. is it 50 or 75? i'm not sure. flip a coin. i don't think it makes too much difference in the reaction. the important thing is the trend. the trend will continue to be higher. the reports coming up next month will be key in determining which one of those hikes we see. kailey: how do you play this in real-time? do you push against big tech or the biggest gainers in the last few trading sessions? victoria: you have to watch those trends. you have a lot of names that have been beaten down so badly. they are doing better now but still in downward trends. we see that in some discretionary names. we see it in some industrial names. you want to be careful and be choosy when you go in there. we still like the hmo and insurance names, signa or

metlife. we like consumer stable names. the most recent purchase we have done across large cap strategies is coca-cola. we are focusing on these balance sheets, focusing on debt ratios, on the quality of their earnings. we think this is where you'll find advantage if we have volatility in the fed keeping their foot on the gas. lisa: what about 90% through this earnings season. i did a stock mover that tom called the worst ever because it was not full of really big names. they are these little stories that tell a different story if how strong or weak the economy has. how much do you earnings matter as you talk about the fed and how much they will push back against the overall rally? victoria: if they did not matter as much -- they did not matter this much as much as i thought they would. i think it was because they thought margins would get compressed more.

we would see earnings revisions come in more than what we did during the second quarter. it was not a great earnings season but it was better than people expected. a little bit of support to the market. going forward we are seeing revisions come in for the second half of the year and for early 2023. i think it will play a bigger role going forward as we see corporations' margins get hit. we hear about layoffs. you watch the bond market closely. spreads have started to tighten a little bit. the bond market is telling us they are not too concerned right now. it will be an interesting battle as we go through the next earnings season. tom: i want to pick up on what lisa said. i'm making a joke about lisa's -- i think it was sterling, for your oscar consideration. victoria, should viewers and listeners pay any attention to the bed, bath & beyond's of the

world or focus on apple? victoria: i think it depends on what your perspective is as an investor. if you're trying to do this daily trading and you are trying to be very much on top of the momentum in the trends, it does pay to look at some of these more meme stocks to get an idea over the retail traders are and the volatility on a day-to-day basis. when you're looking longer-term, and you were speaking with david lebovitz about three years being short-term, but if you're looking three to five years out you have to look at bigger players. apple has become such a large holding in the index, the largest percentage it has ever been. you have to watch these names and see what their momentum is looking like and follow those trends. for us, we are looking at the bigger players. tom: what are coca-cola's attributes that make it applelike? victoria: you have this global player. a strong balance sheet.

there earnings were pretty stellar. at a point in time and many were concerned about the consumer. they are saying we are not really seeing that. a lot of company's talk about the dollar being a strong headwind. coca-cola is managing that as well. if you look at something considered a staple in the market in an environment where you spec volatility, and from a company that says they are seeing a strong consumer going forward, that's a name you can have in your portfolio and feel confident about it. tom: victoria, thank you so much. victoria fernandez fired up about what to do next. lisa, that is what this august friday is about. as you mentioned earlier, and i get the idea framing at the year-end past labor day now is a reach. lisa: you can be a data point everyone shifts again. we got the wage tracker data yesterday. it did not show slowing down whatsoever. it was pretty much a and under the hood there were signs of strength. at what point do people key into

oil prices starting to climb again. does that change the narrative? this is a tough market. tom: do now casts or wage trackers nothing more than marketing efforts by central banks? we have 47 indices all competing with each other to tell us where we are. do they have any value? kailey: that's a fair question as we hear federal reserve official after official sing for guidance is gone. we will depend on the data. how much of that is economic data that crosses the wire versus these caps of various shapes and sizes? that interview with mary daly. she pointed out there is another cpi read, another job support before we even get to the september meeting. a data-dependent fed will wait for more before making the call. this week will not do it. tom: you will see this role that

on monday. the bramo back to school now cast. ♪ ritika: keeping you up-to-date with news around the world, i am ritika gupta. among the items fbi agents searched for at donald trump's florida home were classified documents related to nuclear weapons. according to the washington post, people familiar did not say if the documents were found. the former president called for the release of the search warrant. the justice department has already asked the court for the papers to be unsealed. president biden once four more years. he is set to launch his reelection campaign in the months after november's congressional elections. those close to bloomberg say he's encouraged by recent legislative economic and foreign policy successes. polls show most democrats would rather have another candidate.

today the rhine river is likely to shrink to a level that could disrupt the transport of fuel throughout europe. the effect could ripple through the continent for months. the water level at a key waypoint west of frankfurt is set to go below 16 inches and continue. that makes it uneconomical for barges carrying coal and oil to transit the river. france is calling for help fighting wildfires that have been blazing for days. germany, greece, poland, romania and austria are sending resources. france is in the worst drought of record. in england, the heatwave led the government to declare large parts of the country are in a drought. england recorded his driest license 1935 -- driest july since 1935. a bursting housing bubble and a debt crisis may make matters worse. beijing is signaling homeowners are the priority of efforts to stabilize the housing market, not builders. 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 am ritika gupta. this is bloomberg. ♪

>> this is the biggest concern above energy, food costs. you look at the potential harvest this fall. not only is diesel prices rising, farm equipment is rising. all the costs continue. we cannot alter all behavior when it comes to food. you can with gasoline but not food. tom: absolutely on fire. i believe that was yesterday. i cannot say enough about the granularity of his effort. he's on absolute fire about natural gas dynamics. we welcome all of you. an interesting friday. we are trying to figure out the

rivian disaster. jon is back on monday, right? kailey: affirmative. at the very least i will not be here. tom: i talked to him at the rome airport. i believe there has been a ferro siding. we will have coverage on this later. the back-to-school now cast. a series put together by bloomberg surveillance. lisa, this begins with a haircut our parents never imagined what they would cost. lisa: my 13-year-old son got his haircut and had a full bar and it was a real back-to-school welcome for the parent. i wonder as we talk about now cast, is it propaganda for fed shops? tom: they are trying to brand them to media. i will take the cleveland cpi, which i adore. lisa: guilty as charged for both of us.

tom: all i remember is the biggest problem with the back-to-school supplies was 16 crayolas. the rich kids had 24. one guy had 72 crayolas and i had 16 crayolas. lisa: we will call dr. phil after. dennis gartman joins us. chairman of the university of akron's endowment fund. he is still writing on an hour-by-hour basis. he joins us today. lisa wants to talk about bonds. i want to talk about hydrocarbons. they are out of control in europe. they have a modest matter of a war. are we going to see methane, natural gas? are we going to see different forms of gasoline in america surge like electricity in france ? dennis: probably so. propane will probably go higher.

nat gas will go higher. inventories are extremely limited. unbelievably limited in europe. if we push nat gas to $9 million per british thermal unit, if we start moving through nine dollars, you go back to 2005-2006 where we get to $13 per million british thermal units. you have to be careful. things are likely to get tighter. it is not a pretty sign right now. lisa: you're talking about natural gas. you can apply this to certain oil inventory reports. i wonder how fragile we are heading into the winter that could reverse the optimism about the disinflation we have seen and at this week's reports. dennis: keep an eye on the term structure. that tells you anything else about what goes on in crude oil, especially crude oil. we are in a small back

operation. it has narrowed but in the past couple of days as prices of crude oil have fallen a little bit, data $88 per barrel the other day. it began to widen the argument. it is where the sophisticated and informed money leaves its footprints. if it starts to widen, we will see crude oil go higher again. you see most of the decline in crude oil predicated on a decline in the driving models in the u.s. and demanding gasoline an diesel. i that we trade $97 in the not-too-distant future. a whiting backwardation for the crude market. lisa: $95, $96 per barrel forecast into your projection for the economy for markets. especially because the trading activity has changed on this

lower -- hinged on this lower oil prices. how much is that sent yields higher? dennis: i'm afraid we are seeing the low on the yields. much higher prices in the yield, lower prices and bonds. you had something last week that not enough people are paying attention to. an outside reversal week and reversal day in the long bond future. very rare circumstance. we have only seen it once before in the last year. i would pay attention to it. it is one of the technicals i pay a great deal of head to. it probably means lower bond prices and higher yields in the next several weeks and months. i think that is the decline we've had in the long bond yields of the course of the last month and a half was predicated upon a decline in inflation, decline in crude oil, decline and livestock prices, copper

prices. those are turning back to the upside so be careful. if gold gets to $1825, the story changes completely. kailey: we saw growth stocks underperforming to such a degree. they have staged a remarkable comeback in the last month. if yields are going higher, that will not last much longer. dennis: i don't think it lasts much longer. i've got a good 14% of the portfolio out. as i said everybody, and appear market year he he loses the least is the winner. we have a meeting next week i will say we need to reduce our exposure a tad more. tom: you will reduce equities exposure even with this giant norma's rally -- ginormous rally? dennis: another 2% to 3%.

i think the rally -- the volume has not been as dramatic as it should be on a move to the upside. over the past six or seven months volumes come in on the upside. another technical circumstance to pay attention to. my position will be i would like to reduce exposure a tad, whether i get the committee to agree it is another story. tom: do you buy options on the cincinnati reds or go into cash? dennis: it was a good game last night. i think cash is probably not a bad place to be. cash being two-year bonds and treasuries and under. it's been inverted for a month and a half. i think the two's versus 10's gets there without too much difficulty. tom: dennis gartman from the

university of akron endowment fund. i'm glad dennis brings that up. that is the salient call of the week. we heard people extend out from priya misra's -40 basis points. lisa: how much of the move is because of the decline in oil prices? tom: ok, i will go with that. we have to work on the weekend. we have to put together the bramo gloomcast. stay with us. paul sankey will join us on oil soon. good morning. ♪

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>> you continue to hear hawkish, from the fed because they need credibility to keep inflation expectations in check. >> we might be going in a better direction than people thought. >> we think where -- think we are in the clear.