>> 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. >> we are not convinced price

plus -- price pressures have peaked. >> now it's a debate on how fast it comes down. >> this is bloomberg surveillance with tom king, and lisa abramowicz. lisa: good morning, this is bloomberg surveillance for our audience worldwide live on bloomberg television and radio, tom keene, jon ferro, jonathan out. we are lucky to have kailey leinz here. my take away from this week is how important gasoline prices have been to everything underpinning a lot of the rally we have seen in bonds and stocks. tom: can't be said enough. it is about a gallon a gas. paul sweeney has been good about this on "bloomberg surveillance" and radio. it can never be said enough. it seems old, seems dated, we are biased on the island of manhattan. we are wrong, it matters. lisa: it matters from every point of view not only because it allows people to have more discretionary spending because they're not putting toward the pump but also it affects things

like university of michigan sentiment survey that we will be getting at 10:00 a.m. it will affect the imprudence -- the inputs. what are you watching for the pivot point to understand whether this rally israel? tom: i just don't know. -- is real? tom: i just don't know. the news flows extreme area, the reading over the weekend will be extraordinary. we have great guests in the next 30 minutes you will hear from paul sankey on oil and the surge in natural gas in the moments -- and the moments jeffrey yu will join us. lisa: how much trading is this? you talk to people all morning long and how many people, and say it is then, it is august, go on vacation because no one is out kailey: there making volume. kailey:everything seems more dramatic in the summertime because there are less people at play but there is a sense that that is shifting, that this is maybe something more substantial. the bear market rally narrative

persistent for so long does feel like it is morphing as the market sees this week as a turning point but in the federal reserve's become a we have gotten it is not clear policy makers agree. mary daly and others all talking about how they think they have more work to do. the fight against inflation is not over. the market does not seem like they believe it. what do you make of this, the more the market has to rally the more the fed has to call and the more they come on say we will raise rates just to tell you guys? tom: i underplay that. i think the fed is data dependent and will be working off the economic data that they see and i do not play much attention to 75 feats or 50 feats there but i think what is germane is where the finishing point is within all this pontification, whether it is there in have percent or where and along suggests it is 4.75% or 5%. lisa: the data is a positive tone to markets, finishing up a

positive weeks. -- week. can we retain the fate today as people take a look at whether or not there is this inflationary tilt across the board? you have s&p up for point -- .4%, the same to nasdaq. a touch slower, the two year yield lower, though yesterday the 10 year yield rose after the auction. it was the interesting auction because it was not met with enthusiasm and this shows the risk of pushing back against some of the move we have seen to dennis gartman's point. lisa: he showed the ambivalence out there. -- tom: he showed the ambivalence out there. it is about the flow of money. we will see it. the wall of money moving is tangible. lisa: out of cash into stocks and credit and you are seeing a bit of dollar strength three inserting itself into an a great amount -- incredible amount of weakness. there somebody who tracks as well and speaks incredibly

articulately on this every time we have him on, we are lucky to have geoffrey yu. did anything change for you this week? geoffrey: not much. we have been holding onto the views of the fed needs to keep expectation [indiscernible] where the next hike is, relatively firm, looking at 75, as the markets need to be on guard and you need to be vigilant. your earlier point about flows, risk on, two very interesting sentiments. in fx market, people are looking for quality, surface economy, not the largest ones was switzerland, sweden, like singapore, with healthy services, good balance with payments and lower yields, that is what we're looking at. to lead to your point about credit, an equivalent in emerging market bonds probably on a headspace that clients are looking that as well. flow data showing apple buying

of that. so some risk on stuff only where it matters and only where there is quality. lisa: quality makes me think the dollar you the dollar is what sold off yesterday in the classic risk on tilt. do you expect the dollar to reassert its strength or do you continue to see the risk on being paired with a weaker dollar? geoffrey: i think the dollar is quite strong. we look at where the euro-dollar is and dollar sterling, dollar-yen, even after the recent information. that is where it is asserting itself. other the dollar should be asserting itself on inflation and interest rates expectation basis, it is no longer the only game in town. i think that is where money is put to our. tom: as money moves around and repositions, there is a lot of heated debate, is cash a good asset to be in? geoffrey: cash right now is a less bad asset to be in. your opportunity costs in cash is lower, not only on a normal basis because of high radicals

but on the adjusted basis as well. people are reeling the liu of cash rather than the fear of missing out. i need to be in weight cash as long as possible. that will have a structure mock -- structure. selling options and things like that, those will be taken off and that will be healthy for the market. i think people are putting money to work. tom: how do you respond to the efficacy of a two-part market where quality wins, persistent cash flows win, and everything else does not, and the ability to pick the stoxx, can you get away with that? geoffrey: no matter if it is stocks, currency, or bonds, you have to show your value. for companies and countries, show me where reform is, show me how you will improve your cash flow, show me how you are going to be able to offset your cost, your rising costs either through

internal productivity growth or take care of for example, how can you lift your track record? how do you get out of the situation where people are fundamentally reassessing the quality in the euro. the euro is running a trade deficits. when was the last time that have been on a sustained basis? what is plan b for growth and plan a is not going to work. that is where the internal changes need to happen on the macro and micro level. if you do not have quality now, show me where you can take quality again. lisa: i'm glad you brought up your up. i -- up europe. i got my electricity bill and my eyes mildly bugged out of my head and i thought it could be worse. instead of new york i could live in london or europe where the energy situation is far worse. he had a headline crossing the bloomberg earlier. we have the bright river to -- ryan river to have such a low level it becomes impossible at one point. how do does europe? geoffrey: let's start with the

u.k. 5000 pounds energy bills where households and disposable income is between 30 to 35,000 pounds. mortgage payments increasing by 2000 to 3000 pounds per year. that is probably a medic -- that is problematic. the lack of government and that comes through. there are stabilizers in place and a long-standing fiscal plans to help the households, but it comes at a cost if the household and it is being protected then industry has to suffer the gas rationing for example. for the coal industry, for germany, for the auto industry, that is coming. depending on the sufficiency elements,, that at the same time i think changes are needed. my fear for the eurozone is the downside scenario madame lagarde talked about or we contract one

point 7% next year, that is a market court case for 2023 in the eurozone. tom: thank you so much with bny mellon. as we move to jackson hole, the fed speak will be fascinating. we are distant from that september meeting and between the fed dialogue not so much jackson hole but tangential to it like we heard from mary daly, getting the tea leaves here not for the parlor game but sort of the mood of the nation will be critical. lisa: do they see the risks as being greater that they could pause too soon and allow a repeat of the 1970's or do they see a risk of curtailing the economy more greatly and having that errors. -- error? the balance of errors is what i'm watching. tom: and to translate that into the inflation path. the physics of economics, it is about inertial force, it is not torque so much but the initial force of disinflation, and the

idea that is a smooth curve down to 5% or 4% or dare i say down to 2% is just delusional. lisa: the inertial force in rent is not going in the right direction. the inertial force in food is not going in the right direction. there are inertial forces working against them. if you yet -- the oil price climbing, how much will that -- though some cold -- how much will that throw some cold water over there narrative? tom: we haven't even talked about it yet. december 14 as a meeting, what if there is a pause of this dissent in inflation? what we get there? 1, 2, 3, 4 inflation reports before summer? lisa: what if we get any adam pozen-esque idea jackson hole that they would be ok with three present. tom: that would be a bombshell. you're making news there. lisa: i'm not making news, i'm just speculating. tom: the bears would come out of the forest and listen. [laughter] lisa: i'm not saying that. tom: the moose come out of the

swath. lisa: how money others? the pheasant that how many others? the pheasant. tom: you doing anything late august, kailey? the pheasant of jackson hole, stay tuned. ritika: keeping you up-to-date from news from around the world, i'm ritika gupta. fbi agent searched laura's home for classified document related to nuclear weapons according to the washington post. people familiar with the probe did not save the document were recovered. the former president called for the release of the search warrant p the court and papers to be unsealed. president biden is preparing to launch his reelection campaign in the months after november's congressional elections, setting up a potential rematch for donald trump ear those close to president biden described him as upbeat about lead -- about recent legislative and foreign policy victories. democrats would have another candidate.

president mary daly says the core inflation reading on july is welcome and she believes it may be appropriate for the fed to slow its interest rate increased to 50 basis points next month. they told bloomberg tv the fight is far from over. she says rate hikes need to be dependent on data. three of china's biggest state owned companies plan to delist from state owned -- the three companies that will delist is china life, -- south korea's president accused the air of the company to bribery charges. global news, 24 hours a day, on air and on "bloomberg quicktake," powered by more than 2700 journalists and analysts in over 120 countries. i am ritika gupta. this is bloomberg.

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>> i have a baseline case going into september that is 50 basis points, where it has been since the last meeting. i have an open mind about whether 75 is going to be necessary. a lot of that will depend on the

labor market, inflation, and whether we start to see those things slow enough to say we have the momentum we need. tom: truly our most interesting president of a federal reserve bank, mary daly has an original story and huge shoes to fill of john williams and she is front and center on the social sensitivities of all of this economic mumbo-jumbo. dow futures up 126. i will call it a persistent to lift and it is not off of cpi wednesday or whatever we've got here. it is a nice lift in the markets. lisa: a comes from the reassessments people are going to talk about over the weekend whether there is more disinflation than they thought. tom: $100 print on brent crude, now down i dollars 60 -- $1.06. that cuts us to paul sankey. with decades and decades of

experience of the microeconomic analysis of all of this, paul, how close is america to the many deviation leaps we are seeing in european hydro -- hydrocarbons? are we linked or delinked to those? paul: good news is it is an amount of oil and gas. now we are net neutral. the u.s. oil and gas industry has done a phenomenal job on not only oil but we are the world's largest natural gas exporter. the problem in europe is they really do not produce a whole lot of domestic energy,. . they have added -- energy, full stop. the real thing that will be a concern as experts to the europe and whether that drives of gas prices high. it is quite possible. tom: you can parse a barrel of

oil like no one. let's walk -- wander over to methane and natural gas. when paul sankey sees energy one go from two to eight, what does that signal? paul: probably that we see the price in europe more like 50. extraordinary prices. the draw their, i think a cost you five to eight dollars across the atlantic -- five dollars eight dollars across the atlantic. there isn't and place it massive cool on our imports and that will be sufficiently large to pressure nash -- pressure natural gas prices in the winter. it becomes a question of where their we got hurricane season which has not happened at all and the really concerning question, the major concern, how cold it gets this winter and if we get a globally cold winter, we will have death i'm a fred -- i'm afraid. lisa: that's on the natural gas side. on the oil side, the iea saying increasing number of gas relying

electricity providers are turning to oil prices, to oil, to state of the sword edges -- the shortages. how cheap is this market relative to where it will be at the end of the year? paul: it is way below. we are over $50 per hour btu in europe and quite possibly going higher based on what tom and i were discussing on european electricity prices. exponential essentially. lisa: in terms of oil prices, that is where i was going with this. seeing this ethereum put. paul: the oil situation is different because essentially russia makes more money from oil and continues to supply oil to the market. the oil crisis is not a crisis to the extent the gas crisis is. it is going to be a major pressure upwards on natural gas prices. at the moment, there is marginal use of oil, which was

highlighted as you said. propane, for example, is a direct substitute for natural gas but also coal will be driven by the problems in europe no question. it is the russians really have not produced a supply of oil, anything like what they have done for the natural gas. kailey: here in the united states later today, the house is a specter to pass the inflation reduction act and eventually the president we assume will sign it. some of the taxes on that, how do you expect that could impact the supply landscape in the u.s.? paul: it is significant. it split the industry. the big oils, eggs on, chevron's, already have very strong methane limits and continue -- exons, chevrons already have very strong methane limits and continue to. this enormous tail, assuming a

quepasa and then implemented strongly, it will be a major pressure to the downside on u.s. gas production no question. kailey: is there a threat to the inflation reduction acts, at least when it comes to energy prices becoming more inflationary? paul: yes. kailey: all right. i think we should probably leave it there, tom, what you think? tom: i think paul sankey, thank you on short notice. i will not mince words about it, natural gas sustained here. i don't use the units because they british thermal units and i have to wear a beige suit or something if i quote those but, lisa, the fact is just looking at the measurement of natural gas off energy one, different the netherlands, is two to eight. dennis gartman talking about nine and i believe paul sankey said we would move through to 10 and that has a huge issue, and particularly with substitution.

we are nowhere near the coal substitution you are seeing in europe right now but you wonder, is that a 2023 story? lisa: coal or oil substitution. that is where i was getting at. you see that threat terminate. going forward, will you see an increasing amount of that in the united states, pushing against this push to step away from the fossil fuel burning sources of energy? honestly i think there is going to have to be some sort of adjustment whether that will reverse gains or losses we have seen recently and the price of oil. tom: we will continue on. . we have another good half hour of "bloomberg surveillance." lisa abramowicz getting real with the real yield today. drew matus will come up as well. having kailey here has been very beneficial and of course we have seen the immense team spirit visible on television. for those of you on radio, there was this extraordinary moment yesterday where lisa and kailey

just wanted to hide. [laughter] i don't know. kailey: for the record, if it is hiding as a game, i'm winning. tom: i'm sitting with a beverage of my choice on the couch last night and maria tadeo calls up from barcelona and says my spanish was wrong. [laughter] lisa: you didn't conjugate. tom: what is this photo about? they literally want to hide. [laughter] lisa: look at the banner, you are speaking about spanish incorrectly about drinking in an election. we love you. tom: this has been a great week and we will continue. this i think is bloomberg. ♪

tom: bloomberg surveillance on a friday, an important conversation with drew matus of metlife. help me with the data check, futures -19, dow futures -123. it is auction free friday. lisa: i see positive across the board actually. i think everything is doing nicely and constructive. nasdaq up .5%, the s&p up about the same, a little bit into treasuries. the lift is not coming off of

data, it is coming off of this feeling we are not getting as fast inflation. we have hit inflation in the tom: tom: fed will respond. kailey leinz in for jon ferro. i would suggest what we have seen here today in the last couple days is flows and a lot of doubt about the persistency of the flows into equities. paul: and you've seen that in -- kailey: and you've seen the and the bank of america data put together. global can be funds fuld in through august 10 was the cpi day. $11.7 billion for the flows into bonds as well. 4.3 billion dollars polled out of cash. if you are triple leveraged all-cash, seems like you might be the only one because a lot of people are putting money to work. tom: i would say that is right, it is a lonely position. drew matus joins us to sort this out. he is the chief market strategist at metlife but that barely describes what he and

maury harris did at ubs years ago and the depths of the great financial crisis -- in the depths of the great financial crisis where they suggested the american economy would pieced together and would be resilient and move forward over the coming decade. i look at the moment we are in right now and the one statistic that gets my attention is three ratios of productivity. people like you seem to concerned about a dearth of productivity and inefficiency in the economy. is that evident or can we prosper? drew: i think it is evident. one of the things most a serving is right now -- most disturbing is right now you have the gdp contracting. yet we are still hiring a ton of people. maybe we are hiring those people because the system has become so inefficient that without all of those additional people, you cannot get the job done. if that is the case, your

potential growth rate is declining. so it is bad news for the economy, for long-term inflation , and it is bad news for what is -- what the next recession might look like tom: what does it mean for assessment -- like. tom: what does it mean for investment? for the viewers and listeners just trying to get the labor day? drew: if it is sustained, it is kind of a lower trend growth story for the united states, which is obviously not something we want. we want to be in the high-growth environment with modest inflation because that is what actually outperforms and creates wealth for the economy. and of course workers benefit if they are productive. living increases the people are productive. if we are not productive, those things decline. from a long-term perspective, it is negative interest rates and negative growth for the u.s.

economy and negative for u.s. competitiveness. lisa: how long can you remain gloomy when you see optimism reflected in all of the markets? tom: i'm short-term -- drew: i'm short-term gloomy but long-term positive. i think this productivity is a situation where everyone is trying to get used to this new environment we are in. i think the new environment is an old environment. we got so used to being service sector-driven that we forgot there are cycles in the economy that do not pertain to services. there's a manufacturing cycle, inventory contractions. one of the things i have been thinking about a lot lately is is everything we are seeing just a return to economic volatility that used to be the norm let's say before the 1990's? lisa: what do you buy? drew: that's a great question

because our nearer term forecast is we are not in a recession now but it is coming and there will be a calm before the storm, which is what we are in now. i think one of the most important questions i think we are trying to figure out now is what the next recession looks like and how deep could it be, how sustained could be, and more importantly what recovery is out of it. i think now is the time for caution because i do think what we see now is false and we will get toward the and of the year and we will see people pull back on things like hiring and investments and that will affect the consumer and with the consumer will go the economy. kailey: when you say the consumer, i wonder what kind of consumer we are talking about because you have a company like apple with bloomberg reporting overnight they are telling suppliers make as many next-generation iphones this year as you did last year because affluent consumers are

still going to be upgrading their phones. yet there is a lower end of the income spectrum struggling with higher food and gas prices and maybe that is where the cutbacks on discretionary spending are coming from. if it is a consumer-led session and it is only part of the consumer base. drew: that will always be the case. when we think about the consumer, what moves the needle on the consumer is middle-class and upper-middle-class. those are the people that bury their consumption. they get worried about their jobs, they cut back on things. they are very -- the very rich and poor do not change their consumption patterns much. in one case because they do not need to and in the other case because they cannot. so it is that middle grouping that moves the needle and i would say that the middle group is looking more stressed of late. you are seeing a pickup in things i critic cards credit, --

credit cards credit, you see them balk at higher prices for large ticket items, so they are making decisions that are preparing them for potential downturn. it has not reached the level of momentum yet. and of course every time they think they should be preparing, you get something -- you get good news on stuff like the labor front. i think they are becoming increasingly nervous. kailey: you talk about momentum building. we have already seen signs of that affecting corporations like walmart and target warning because of the very margins because of the forces you're talking about. when do we see that march and -- margin erosion more broadly? do think it is coming? drew: we look at economy wide margins and when you do, they have peaked income off. there are distortion for things like ppp loan forgiveness so you have to work through that a little bit. there does seem to be economy wide margins have peaked and have begun to erode and when they wrote enough, you see larger scale pullbacks from

companies. so it gets the clock ticking toward a recession and once again they all line up with a 2023 date, whether you are looking at things like the yield curve or like margins. tom: with all the consumers going to retail sales next week, it is why equals c and the sea is -- c is big. what does consumption do? drew: i think you will continue to see the move toward services. people spend a lot of money on goods during the covid crisis. they are moving toward services and you see that is where the demand is. the real question is, how long is that going to hold up? i think the movement will hold but what is the overall level? i think the overall level will begin to decline as people begin to balk at higher prices. they have done that with things like cars and the question is

when will they begin to do it for things like airfares, hotels, service experiences that have been holding up so well? tom: where do you run at metlife? not to get into the nuances of your portfolio but what does it mean for bond prices to see that kind of economic view? drew: well, you know -- we focus a lot on credit here, so the goal for us was to pick the assets you will get paid back for holding. and some of that payback is what is the yield on it and some of it is what is the credit on it? it is the time to be a little concerned and making sure you are paying close attention to the credit component and making sure you will get feedback for taking the risk that you thought you were taking. so there is various places you can do that. also in an inflationary environment, a real state tends to be a nice inflation hedge. and at metlife, we are fortunate

enough to have an agricultural business, lending business, that provides some of that. lisa: real quick, we only have about 30 seconds, how frustrating is it to you, the market, the entire market trades risk on/risk off to a lower or higher oil price? drew: it is not frustrating so much as i think you are seeing the market respond to a return to economic volatility which most people who are trading on wall street today probably have not seen before. we got used to things moving in long trend-like movements with little volatility and i think we are returning to a period much more akin to the 1980's where you will get more volatility on a quarter by quarter basis in terms of growth. you have to look through that and really do your homework in terms of who can handle that kind of volatility as they plan for the future. tom: drew matus, thank you so much with metlife investment

management. lisa, then evidence has been thoughtful on the path to jackson hole. he called it an august euphoric overshoot. that sounds i something you wrote. what i would point to that you and i have followed is the bloomberg financial conditions index measured in standard deviations and it is extreme -- is extraordinary from the equity bottom of moving to greater than one negative standard deviation and moments ago popping through -.20 two a better statistic. it is irrefutable what these conditions say. lisa: they are loosening, which is probably not what the fed would like to see. tom: can they control it? lisa: they can control it if they come out with a 1% rate september. they could control it if they come out and make material moves to say you guys are wrong. whether they want to do that is another question. we will continue the conversation with bank of

america private bank coming up. tom: we continue the conversation with jackson hole. look for lisa abramowicz's exclusive interview with jerome powell. lisa: he's making it up. this is made up. tom: she will grill the chairman on a 1% move. lisa: [laughter] ♪ ritika: keeping you up-to-date from news from around the world, i am ritika gupta. i monthly item fbi agent for a search of president trump's florida home for classified documents. people familiar with the investigation did not save the documents were found. the former president called for the release of the search warrant pair the justice department already asked for the papers to be unsealed. president biden once four more years. the president is set to launch his reelection campaign in the months after november's congressional elections. those close to bloomberg said he is encouraged by recent

legislative economic and foreign-policy successes. most democrats would rather have another candidate. the rhine river is likely to shrink to a level that could disrupt the transport of fuel throughout europe. the effects will affect the continent for months. a key waypoint west of frankfurt is set to go below about 16 inches and continue doing billing. that makes it uneconomical for barges carrying coal and oil to trend the river. pushback from retailers over new product for customers allowing them to do their purchases in installments. it will charge retailers 3% of the purchase price each time the consumer uses the new program. global news, 24 hours a day, on air and on "bloomberg quicktake," powered by more than 2700 journalists and analysts in over 120 countries. i am ritika gupta. this is bloomberg. ♪

>> markets are completely ignoring fed speakers. >> are they fighting the fed? >> i think they are fighting the fed. they need to bring the big guns out, we need powell to speak. until he speaks, i think the market rally can keep going. tom: optimism there with principal global investors taking it down to when the chairman speaks at jackson hole. we are pleased to tell you that we will be at jackson hole with michael mckee joining us as well, really our major contact with the federal reserve of kansas city and their academic meeting. we hope to make it more academic for you. we look for that in 15 days. kailey leinz in for jon ferro. i'm tom keene and think you for

joining us. futures ever so slightly doing an advance, of 19. make that up 20 points on the standard force dow futures, up 139. this is the conversation of the day for every american family on radio, tv, overwhelmed by the cost of airfare. helane becker brings good news, senior research analyst at calwood. you do definitive work that you invented, measuring the airfare percent change. you detect a crack. is it possible airfare's could collapse come the ottoman winter? >> i would not say collapse but deftly come down. we are already seeing them declined. it looks like june and july was the peak and we have seen what you call proposed ash promotional fares come down after labor day. they are not as low as they were last fall. last fall we saw them as low as

$39 one-way. we are seeing them $59 one-way. they are definitely coming down and it feel -- and fuel prices come down they will continue to come down. tom: i'm looking for the $59 ticket in paris as well. domestic versus international. helane: domestic is significantly lower. we are seeing fares come down in october for international. september still seems to be fairly high. though i've noticed really good deals if you want to go to places like paris. have not seen much in the way of london. london is sold out. i have seen paris, price for madrid, barcelona, on markdown. there were places that have good sales for after labor day as well. kailey: i'm guessing tom will spend a couple hours later on today searching prices. tom: i don't ever listen to our interviews back, i listen back like five times taking notes. [laughter] paul: you were just talk --

kailey: you were just talking about how fuel prices will come down and that will have a bearing on fares. are you saying it is more about the input costs airlines are facing to dictate that rather than it being demand construction on the part of the traveler not being willing to pay higher. -- higher fares anymore? helane: i think it's a combination of both. we have seen input costs and fuel come down off of the peak, so that is a good event. later, costs -- labor costs are high. the department of transportation reported yesterday in june the number of employees employed by airlines exceeded the number in 2019 so we are already back to pre-pandemic levels of employment. the fact we see these huge delays continue means airports are understaffed and weather on the east coast is not helping so think about it that way. as far as demand goes, we see

strong demand, especially for ultra low-cost airlines and we see what we call trade down as people have relocated and they have to go back to their home office, paying for tickets is getting old fast so we are seeing trade to the ultra low-cost airlines and of course to your point, food costs are high, gasoline prices are high, though i have heard they have come off of the lows -- off the highs rather. maybe that makes it more attractive for people to fly again. but instead of taking five trips, i will take for something like that. but consumers get tired of high fares for sure. kailey: and that definitely impacts the leisure side. what about the business side? tom, john, and lisa have their business class tickets booked to jackson hole in a couple weeks. is everyone doing that as well? helane: yeah. [laughter] i think what we see his business travel resume.

we might not see five people going to the conference, we may only see three, but we're definitely seeing an increase in business travel. earlier this year we were down 50% to 60% and now we are closer to 20% to 30%. a couple of the airlines in their recent earnings calls say it is down. as more people go back to their offices, that leads to three days a week, you see trouble come back. tom: i talked to lisa abramowicz this weekend she said, you've gotta watch guess who's coming to dinner just to see the opening of the movie, a magisterial united airlines 707 flying from another time and place. there i am channeling a bram awaits, spencer tracy and others , and it was all great but it is about the image of the airlines. you are long on someone like kirby's united airlines.

the fact is ual has gone 9220 and you nailed it -- 90 to 20 and back up to 40. do you envision you can get back to the market high of 90? helane: probably not. the reason we say that is even if the earnings are what they forecast, so back when we had our 100 dollar price target on united, we were talking about them doing 13 dollars in earnings in 2020 and of course the pandemic interferes, we push that out to 2023 or 2024. but remember the issued shares to get through it to during the pandemic so when you add in the increase of the shares, even if they get back to the net income number, the increases of shares outstanding means you are not getting back to the routine dollars, maybe back to $12. instead of a nine dollar multiple, maybe it is an eight dollar multiple because the airlines are still losing

money in a recession, which if you recall, that 2018 to 2019 timeframe, people were saying the airlines will never lose money again. 2020 proved how wrong that forecast was. helane: you are dead on about newark to paris, united airlines. kirby has it on sale this week. that was a $9,000 ticket and i see a quota in october for $4683. that is a while change, isn't it? helane: yes. it is significantly lower. october is not a time when a lot of people travel, it is more a business time. tom: yes it is. helane: so you will -- tom: so you will join us in paris with a surveillance road trip. kailey: tickets are on you, tom. tom: helane becker, thank you for planning the next surveillance junket as they say.

kailey, i'm sorry, it's gotta begin news from shock of what we have been paying. kailey: yeah, i think we have gotten a lot of good news this week in that it has been cooler inflation. good news is good news for the equity market. depending on how the day goes, the nasdaq could be up for a fourth straight week. tom: i will not give my opinion here. i could pop -- paul sweeney was me to do a fractional bu on they friday opening, but i do not think i have the courage. kailey: two attached to the cash. tom: thank you for your support this week. it has been valuable as well. futures advanced up 21. stay with us. this is bloomberg. ♪

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lisa: i'm lisa abramowicz in for jonathan ferro. we see the positive lift in the market counting down to the open, which starts right now. >> everything you need to get set for the start of u.s. trading. this is bloomberg the open with jonathan ferro. [opening bell ringing] lisa: we begin with the big issue, fighting the fed. >> markets are completely ignoring fed speaker. >> the market is not listening. >> they don't want to hear it. >> i don't care what the fed is going to do. >> they are fighting the fed. >> the fed is not driving e