>> there are a lot of real fundamental issues that will be pulling down inflation. >> do we stay in this nominal gdp dwarfing real gdp environment driven by still elevated inflation? >> you have to take it all into account. >> i think we see 50's in the near term recovering for the end of the year. >> what's different is that if we have a recession, it be a fed induced recession. >> this is bloomberg surveillance. jonathan: the band is back to gather. tom: happy.

jonathan: we did that yesterday. larry david said you can have three more days. from new york city this morning, good morning. let's talk about tesla, the stock down by 12% yesterday in a bit of a bounce back this morning by 1.5% or so with huge pressure on that stock. tom: i have no idea where the tipping point is for elong mosque. -- for elon musk. he has 11 or 12% of the company but with this plunged down and this new leg lower, the nickel thing is where is the tipping point for him? jonathan: he is down 60% since the start of q4.

it's been brutal. tom: you are already promoting your show? jonathan: i'm promoting the research at 940 eastern time on bloomberg television, if anyone is interested. lisa: it's not showing up in the price. it's down 70% over the last few months but i'm wondering whether we see a similar type of decline in the deliverables for other automakers. do we get a sense that tesla is not alone and if it is, does it get punished more for possible loss of dominance? jonathan: it's apple as well. apple down yesterday down by more than 3%. the lowest level since june of 2021. tom: it's earnings and i will go

to revenue. carl weinberg had a brilliant note out saying china could go either way. he says there's too much uncertainty but he says the certitude of the china opening has to be measured. jonathan: futures are more broadly elevated by a third of 1%. 13 points up on the s&p 500. euro-dollar is positive. take a look at france this morning. tom: i'm watching disinflation. there is a linkage of fertilizer prices to food prices. they have cratered and that's

the signal of a potential disinflation. jonathan: yields are coming down by another for basis points. lisa: the data is confusing. you see the weaker than expected inflation from france and stronger than expected ism services data out of europe so this is copley kadant and perhaps we will get more complication at 10:00 ai -- 10:00 a.m.. do we get the job openings coming down as fast as people want or do you see ongoing resilience, ongoing stickiness and how tight the labor market is which flies in the face of the weaker than expected inflation predictions. we were talking about tesla weakness. how much do we see that in other vehicle makers. we get u.s. vehicle sales to day.

shares across the board for automakers have been pummeled over the past 12 months. they have been down more than 50%. tesla is in a world of purpose or the other automakers as they faced ship shortages and people who cannot afford automobiles that have gone up in price. i want to understand the terminal rate and the balance of risk. do you feel there are more fed members concerned about hiking too fast and stymieing a recovery, creating a crash to send given the deceleration of inflation? do we see transitory light creep in? jonathan: you are talking about the tea word this early in 2023? tom: i couldn't judge it yesterday with dr. bremmer yesterday.

jonathan: there was a sprinkle of bullishness. tom: i was sitting there with dr. bremmer. lisa: i'm still here. jonathan: it was time off over the holidays. you've got three reasons to be bullish through q1, what are they? >> i think the inflation and interest rate in 2022 will break and we will probably get our six straight month of lower inflation and we are getting visibility on the fed interest rate cycle.

the sooner that comes, the sooner that gives relief to recession expectations and valuations. also, china is going for broke and that's what you will see with this surprisingly quick loosening of the zero covid policy. the second biggest economy in the world and if they can stabilize, i think it goes a long way to reducing the recession risks. global equities cannot do well unless tech does. it's a third of global equities and i think earnings will be under pressure and we forget how cyclical some of the tech stocks are. that's what you are seeing with apple and tesla right now. valuations have been absolutely crushed. i think that's where you will get tech relief this year.

tom: you pull economics into your strategy and the key theme of your economics as we see in elation adjust from goods disinflation to a service sector disinflation. give us the level of confidence in that process. >> i take it more about the speed. everything was seen so far has been goods disinflation and easing up the supply chain which is great and has given you five straight months of declining inflation and it looks like our second straight month in europe. what the fed needs to see is that continuing to spread into the labor market and services. if we look at the forward-looking or coincident data, the ism prices later today and employment data, these are the type of things i'm looking at. it's sort of a mirage of u.s.

housing inflation. if you look at that, it's all easing. it's easing quicker and i inc. you will get more data points starting today which gives a less bad outlook and that's all you need to see. you need a little bit of less bad news and that will take markets higher. lisa: we had some bad news yesterday and today when you look at inflation easing faster than expected in the euro region with some stocks trying to rally but not tech. what will send tech higher other than depressed valuations? >> i think tech will take time but i don't think it will lead. it was a drag on the market last

year and there's a huge drop in tech earnings and we saw that with the tech revisions coming down right hard. a lot of that i think we'll get offset by valuations. coming into last year, that was like 100 30 times pen now it's 25 times. that may not be the right number but you seen a growth and valuations. i don't know what the right number is but you seen a dramatic turn around. i think that will be a key support that was missing last year. jonathan:jonathan: we talked about tesla so can you talk about apple? what about the price action through december and january? >> it's the same story. these are consumer discretionary which was the worst performing sector last year.

investors worried about the slowdown in demand and the cost of living crisis on the consumer and the consumer reached for that $50,000 tesla car, the high-priced piece of apple hardware and the market is telling you know. the closer we get to recession, i think all those concerns are going to continue to at jonathan: we appreciate your perspective. we are looking ahead to earnings later this month and apple will be end of january. can you explain what is going on with kevin mccarthy in washington, d.c.? tom: the word that was used was squandered and a majority

already squandered their first hour, their first minutes in office. it goes back a hundred years. it's going to be interesting today and it does merit scrutiny to see how this soap opera unravels. lisa: this is history. kevin mccarthy is the first person to not get elected house speaker in the first round going back to 1923 and only the second person since the civil war. this is highly unusual and i don't know why the market is not responding. you look at the discussions -- honestly, i wonder whether this raises the specter of not being able to get stuff done, real stuff that needs to get done this coming year. jonathan: you spent months laughing at british politics.

come on, guys. ♪ lisa: it was chaos at the capitol, republican kevin mccarthy saw his longtime ambition of becoming house speaker slipping away after humiliating show down with the conservative minority. he could not get the votes he needed to become speaker. he will try again today. the federal reserve is about to shed more light on why it's worried that strong inflation may linger. the fed will publish the minutes of last month policy makers meeting. fed officials published a new projection saying they expect inflation will end higher this year than previously thought. inflation and france unexpectedly slowed last month consumer prices froze 6% after

record increases of 7.1 percent in october and november. that's a relief for central bank policy members who opted for a smaller half-point rate hike at its last meeting. investments building -- aimed at building a chip industry, top officials are discussing ways to move away from costly subsidies that have done little but encourage american sanctions person. global news, 24 hours a day and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. ♪ the first time your sales reached 100k was also the first time you hit this note... ( screams in joy) save 20% with the lowest transaction fees and keep more of what you make. with a partner that always puts you first. godaddy. tools and support for every small business first.

>> is today the day i wanted to have? no, i wanted to set up a number of investigations. none of that transpired. we need to work out our differences and we will only be stronger to accomplish these things. jonathan: representative kevin mccarthy of california struggling to get the votes to get the -- to be the next speaker of the house.

hakeem jeffries was nominated. > a sad day for the house of representatives as an institution. a sad day for democracy. we are prepared to try to find common ground with the other side of the aisle, to solve problems on behalf of the american people but we don't have a willing partner. in house republicans. jonathan: a messy 24 hours for house republicans. tom: we are seeing a lesson in civics. we will get an update right down. -- right now. there is massive symbolism with the president of the united states and the gentleman from kentucky. they cross at that bridge between covington and cincinnati and you know the waffle house there. that's what it's about come republicans and democrats coming together with fat and pork and building bridges.

can these republicans do that a week from now, year from now, four years from now? annmarie: literally building bridges -- the president will be showcasing the work he did with republicans and getting that hard infrastructure over the line during the first two years of his presidency. he will be standing there with no -- with none other than mitch mcconnell, the longest serving senate leader and he celebrated that milestone yesterday. a very different scenario than what is going on on the other set of congress. to your question, what we are seeing happening in congress which at this moment, it is groundhog's day in d.c. the house is speak a listen there are only members elect.not a single individual was sworn and because the first order of business which is ceremonial is to elect a speaker and if they cannot decide who is going to lead their party, this

foreshadows and asks serious questions about how they will form a government and how they will honor u.s. debt and how they will potentially coalesce about another ukraine package. it doesn't seem this will be a viable congress. tom: bramo is lit up like a torch. lisa: i'm not rolling my eyes, i'm emphasizing what you are saying. please go on. this is what people are worried about and i'm surprised we didn't see any reaction in the market. it's a similar dysfunction we saw in 2011 that led to the debt default debacle and a selloff and an agreement. the turmoil to get there was significant so why won't it be repeat of that? how can we avoid a gridlock into your end? annmarie: not just significant in terms of politics but in the sense the u.s. was downgraded in

2011 and we saw this from the republicans in 2015 when the hard right wing of the republican party ousted john boehner. now you are seeing it all most on a different level and a different scale. a lot of individuals -- i was getting a ton of messages on the terminal from people saying it's baked in and it will be a show and they will greet -- agree on mccarthy. when you wake up this morning and he is on the phones overnight and you've heard from many of the 20 individuals -- this was a rebellion against him from 20 individuals and he could only lose for. not saying they will switch their vote, how will they get anything done down the line? this is not just passing simple legislation which you can see more ideological and policy differences. this is becoming more personal. lisa: who is leading the

rebellion? a lot of people are on the fence. is there a leader to the opposition or is it a free-for-all? annmarie: it's really members of the freedom caucus but not all members. it's a group of them, notably you have the likes of boebert and matt gaetz who sent a letter to the architect of the capitol asking why you had representative mccarthy moving his boxes and furniture into the speaker's office given the fact that he was not yet elected speaker. you have these rebellious individuals and a lot of it is also it's not just about policy. they don't want to see him become speaker of the house. tom: i think of skill police and others who are supporting mccarthy and yet they are also

picked to be future leaders of the house. let me pick on jim jordan of western ohio as well who is he taking his cues from? where are the cues coming from for these 20 people other than a primal libertarian scream? annmarie: they are trying to make a point and it doesn't seem like they are going to back down given the fact that mccarthy has given up a lot of concessions, even making it so much easier for a no-confidence vote, being able to fire him on the spot. when you think of jim jordan, he was at one point a fierce rival of mccarthy and now he is an ally. he nominated him on the floor and met gaetz nominated him but he will get 218 votes. tom: what is the theology of jim

jordan, wrestling coach of ohio? what is his belief? talk to our international audience about this. annmarie: he is part of the ultra maga-right of the republican party. he is not part of the rebellious group. he is actually voting for kevin mccarthy to become speaker. it is individuals that are coalescing around him. he is ultraconservative but he is not going to get to 218 and everyone knows that. you have the likes of representative skill lease -- skill lease - scalise. jonathan: how much longer can this go on? annmarie: days. at one point in history, it went on for two or three months. it could go on for days and they could have a similar situation today at noon and adjourn until

they figure out who will become speaker. no legislation can get done until they have a speaker. tom: marjorie taylor greene of georgia, wikipedia has her as an american politician, businesswoman and far right conspiracy theorist. she is for the gentle man trying to be speaker. she has had to these people that you are out of your mind. i think that's just critical to line up the docks. - ducks. jonathan: annmarie has lined this up. tom: she doesn't talk to me. jonathan: how strange is it to have an individual like that as the voice of reason? annmarie: she says they are big obstructionists and they need to get on board and she was not even given a concession for herself and she's not on the committee but she still going to back kevin mccarthy.

she thinks what her friends in her freedom caucus are doing is showing the american people that they cannot govern. you have this very awkward moment with this individual who is a qanon individual who has dealt into the conspiracy theories being the voice of reason on the right. jonathan: amh down in washington, thank you. tom: it's embarrassing. is it the same as the british government embarrassment eight months ago? lisa: why are you prodding this? jonathan: we will have this conversation after the commercial break. wikipedia is your source? ♪

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jonathan: equities are trying to balance but are slightly positive. one stock to watch right now is salesforce. they have too many people leading into an economic downturn. they will cut the work force by about 10% in a restructuring effort area tom: mark benioff with some turmoil there. the stock is 3.5 standard

deviations offer a solid long-term trend. this stock has been on a cash flow driven revenue building trend and it's been decisively broken with this pullback. jonathan: the workforce cuts will mostly come over the coming weeks and they say the plan will be substantially complete by the end of 2024 so 10% is a big slice of the workforce so who is next? lisa: salesforce had been in turmoil for a while. there had been questions around its future and a decline in its valuations. how much does this indicate the difficulty of tech to revive itself? it's also software, some of the basic functions that companies were looking to during the pandemic but find themselves overcome now.

tom: they are adjusting. jonathan: there is another dimension to this. select real estate exits office space with reductions as well. we had that big conversation. do we need to renew that conversation? tom: based on my conversations in new york, yes, there is a moment with the work from home off the pandemic that is tangible. lisa: is this just a tech specific theme or broader? you see tech companies pulling back on office space and you see morgan stanley and goldman sachs saying get back to the office, it's full-time and you see that with more and more companies.

it's a difficult one to parse given the layoffs in tech companies versus the resilience in the ongoing commitment to office space at other places. jonathan: they said we hired too many people leading into an economic downturn. who were the individual companies that were able to beef up for us. maybe the later -- the labor market will not have a big downturn because some companies could not hire who they wanted to. lisa: can you see the retailers and service sector continue to hire? tom: i'm going to wait for the

data. jolt is today, it's jolt wednesday. on january 13, we know a lot more than we know right now you jonathan: we are looking at delivering 200,000 payroll numbers friday? unemployment is still 3.5%. you've got these big tech companies screaming no, we are doing something else. lisa: at what point does that bleed into the broader numbers but we are not seeing it yet. where are these tech layoffs we have been reading about? tom: there have been reports that these people are losing their jobs and getting jobs again quickly.

jonathan: we had that story out a couple of weeks ago about goldman sachs making major cuts and hsbc was talking about sending out emails to people let go. lisa: just trying to beef up talent in the u.s. it's armageddon for the jobs picture. jonathan: the whole situation was bad. there was a hierarchy of banks that attracted the talent but others weren't able to. these other banks want to beef up in certain regions. lisa: this isn't a picture of pain for the labor market by any means. jonathan: it's about where we will wind up.

how long is the lag from the timing and how sure is the lag? it's a guessing game. it's a guessing game for central bankers. tom: all my thinking over the holidays including a 10 .9% rise in champagne is a result of the pandemic. jonathan: you can't know that. i'm talking about job cuts and he's costing up -- and he's talking about the cost of champagne. tom: some put the numbers at 100,000 jobs to live with some of the wage pressure. jonathan: conversation finished? lisa: i thought that was pretty good. tom: this is important. the pandemic ramifications -- jonathan: you are on the edge of laughing, i can see it in your

face and the euro-dollar is $1.06. tom: i can't believe what the bollinger costs. jonathan: france joining the club this morning. germany as well. they reckon we can hit $1.10 bite euro-dollar by the end of the month. it's been the case in the first few months that this happens typically. tom: a huge value to bloomberg surveillance last year and he starts strong this year. the first thing i looked at was adxy, the pacific rim but let's bring it to the euro side. it is the week dollar trend intact led by strong euro? >> happy new year, everybody. yesterday was a tough day. we saw a big move come over 1%,

bigger than the normal january move for euro. it's been similar to the entire month. it tells you that volatility was alive last year at is still alive in the first few days of this year. low liquidity with people dusting off their holiday emails. there is that negative seasonality. a 64% hit ratio since 1990, euro-dollar heads lower on average 1.3%. we are betting on the 30 6% -- on the 36% chance that it goes higher. the european growth data will point toward recession but not as bad as what people think. the pmi was revised up for the euro area and reopening in china will help boost the european economy as we are seeing natural gas and electricity prices much lower with the warmer weather.

the ski season has been awful but that's been fantastic for industry, looking at lower levels of costs and boosting production. we are having a growth story and yesterday was weird. we had the northwest german numbers and that signaled that german cpi would come in week. the french numbers suggested the same. euro numbers this week will be weaker than thought. perhaps the fed won't need to be as hawkish as what the market thanks. the growth numbers might offset that. growth up at inflation down and that revises the real gdp estimate. therefore, i think euro can stay supported in january. lisa: how much does your one dollar tencent target hinge on the weather? >> the weather is already baked

in and we had that cold snap in december. we've already got the story of germany having blackouts. that's gone to the sides it was unlikely we will run out of gas. next winter to be a bigger problem but what we have seen is that germany has just switched to coal burning and that's allowed for the guests story to weaken as a problem for the eurozone. jonathan: we're does the ecb fit into this call? >> it's a tough one to use the ecb view and put that directly onto the euro area we are trading at stagflation when it comes to the framework for foreign-exchange. the ecb will be hawkish and that will boost european yields. we are seeing portfolio yields into bonds for the first time. by raising rates, that won't

help growth so those two forces are at odds with each other area if the fed pauses as we think they will, that will keep your dollar supported no matter what the ecb does. tom: pc wearing a fancy tie? jonathan: he might be. >> you are right. jonathan: he has a team emblem on it as well. why are you wearing a tie? tom: i watched the highlights of the futbol game. >> it's been one of the worst runs for tottenham in the league since 1988. for villa, we've got a new manager and things look to be on the up. jonathan: he should be doing a

podcast. thank you with the fx call. is he allowed back on? tom: steve majors will show up. jonathan: you can wear that tie if you like. tom: crystal palace claims the same arena as rochester. jonathan: i didn't know that. are you making these up? what are you talking about? tom: they are playing today. jonathan: we haven't got time to do this. crude is 74 dollars. ♪ lisa: keeping you up-to-date

with news from around the world, it's back to the drawing board for republican lawmakers today in another attempt to elect a house speaker. after three rounds of balloting, kevin mccarthy was unable to gain the majority of votes from his own party. it's the first time since 1923 and only the second time since the civil war a house speaker was not elected on the first ballot. the european union is moving toward requiring covid test for travelers from china. they have agreed on a draft opinion that includes masking and preflight testing requirements. several european countries including italy and spain have already imposed testing rules on flights from china. sam bankman-fried now faces a trial in october on the collapse of ftx. in a court, he pleaded not guilty to criminal charges. u.s. prosecutors say they expect to produce all the evidence for the case in the next four weeks. job cuts are on the way at salesforce.

the cloud-based software companies says it plans to cut about 10% of its staff because of restructuring. salesforce employed almost 80,000 employees in the company said it hired too many employees leading into the economic downturn. global news, 24 hours a day and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. ♪

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>> if china reopens fast, we

could see the commodity markets tighten. to some extent, we are worried it could reignite the commodity strength. jonathan: that is a risk coming into this year. here is the price action -- the s&p advancing by 0.4 percent lifting the nasdaq as well. the euro was down aggressively yesterday and down today as well. the team at bloomberg said this is the strongest start for treasuries going back to 2001, the strongest new year's start. tom: that's worth following. the yield dynamics have been boring. the yield lived at the end of december, we are not halfway back from that.

that was a hell of a yield lift. jonathan: i think we were about 200 basis points out that where we are now. the equity market was at all-time highs a year ago area the lititz reporting from the team, chinese bureaucrats are discussing plans to resume importing australian coal after a two-year ban. relations perhaps improving between china and australia. china clearly needs the commodity to reopen. tom: our conversation yesterday with the former prime minister of australia, he will be the australian ambassador. jonathan: are we going to see a different approach from the chinese foreign ministry? is it a subtle hint of that? tom: i will defer to those wiser

than me but the clear tone i got yesterday was he's powerful even though he has a tough road ahead. jonathan: we've got to focus on the big commodity story this year. tom: the director of research joins us now looking at the different hydrocarbons including coal. is there a substitution of effective germany uses coal and if china uses coal, does that just rent reprice? >> no, thankfully not. it impacts gas hugely. when we've had gas prices surge, we have seen in europe prices go up a lot.

there is no direct link simply because one is being used more than the other. tom: are the micro economics in place for oil to surge to maybe $100? is that in place at the beginning of this year? >> i would say the beginning of the yearno, but i think the second half of the year and particularly if china opens up and we are hearing headlines about that, we have tended to forget what we saw in the west. it took us two years to get over the pandemic in terms of airline travel and car travel. this is a multiplier effect when china reopens. people from other parts of the world will go to china and china is so connected to the rest of asia, these countries have huge

trade relationships with china, 25-30% tourism and chemical exports linked to china. we will see big demand numbers but the problem now is we have seen these big freeze ups in the u.s. and that means the root balance has weekend. we've seen so many refineries having to forcefully shut down because of the coal which has lost crude demand so that's why we are on softer footing. it turns into seasonal turnaround so it's a few more weeks of softness. lisa: what is the canary in the coal mine when it comes to the reopening in china? what source of energy will we see the first pickup in demand that will represent the next phase of the china reopening and the effect on energy markets? >> that's a great question

because you guys were saying that when china does reopen, they will need oil energy products. not just oil and oil stocks are not particularly high's we should see them come out and buy crude oil if not this cycle, definitely the next. they will need coal and gas as well so i would genuinely say all three of those and metals we have already seen. energy imports should outperform the other commodities because with the reopening, the focus shifts back to consumers which goes directly into energy consumption as opposed to metals which was more infrastructure driven last year. lisa: some people say china spent the last year stockpiling crude and they will not need an excess in supply even if they do reopen in full, at least not for a long time. do you have a sense of how those

stockpiles in china are? >> we track stockpiles in china to our best ability on a daily basis. this is a big misnomer. china's oil stocks have been rising for sure but over the course of last year, they have been drawing down stock on a consistent basis. china was barely importing 9 million barrels a day instead of 11 so that stockpiling took place in 2021 but not last year. as they reopen, they need to buy again. tom: i've got lng moving here and there. a simple question with your expertise -- is the united states energy independent? >> it's definitely more

independent than it used to be. the u.s. still imports some oil. that has to do with the location and the ability of certain refiners to run certain crudes but it's exporting natural gas now and it exports well over 3 billion barrels of crude. there is still global linkages and that's where i don't like to use the word independent because brent still the biggest driver of gasoline you buy at the pump. it's not an island and therefore, yes, it's independent in the sense that it's exporting more product but at the end of the day, the global linkages have not roque and down because of the way the refining system is set up. jonathan: best guess for where you think crude will end up this year? goldman says $110.

where are you at? >> i would be triple digits as well and people are underestimating china's reopening and the multiplier effect on demand. that's basic one-to-one economics and the effect it will have on the world economy. bad news for inflation but it's definitely something to watch out for. jonathan: thank you for another triple digit crude call for year end 2023. tom: can we say it's in the zeitgeist? the lift is there and people were shocked by an $80 call. i have real hesitancy in announcing we will move to $100 per barrel. jonathan: that's a $30 spread. she thinks people are underestimating the impact of of the force that china's reopening

will have for this economy. lisa: the multiplier impact struck me. not only people in china moving around but people going to visit china, the incredible commerce that gets reignited of china fully reopens. given all of the shifts culturally and china, what does the new reopening look like in terms of the international commerce travel? it still remains to be seen. jonathan: where does the demand show up? i want to know whether revenge spending will take place. do they go abroad the same way they would have three years again -- ago? what are you thinking about? have you been revenge spending? tom: it could be madison and 63rd. jonathan: will they fly into new york to do that? tom: will the chinese tourists

returned to europe as well? jonathan: sarah hunt is coming up. ♪ and it's easier than ever to■ get your projects done right. inside, outside, big or small, angi helps you find the right so for whatever you need done. with angi, you can connect with and see ratings and reviews. just search or scroll to see upf on hundreds of projects. and when you book and pay throug you're covered by our happiness

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>> there are a lot of fundamental issues pulling down inflation. >> do we stay in this nominal gdp dwarfing normal gdp environment? >> you cannot ignore the short-term data. >> i think we see equities down in the near term, possibly recovering toward the end of the year. >> what is different is if we have recession, it will be reduced. announcer: this is "bloomberg

surveillance" with jonathan ferro, tom keene and lisa abramowicz. jonathan: live from new york city this morning, good morning. for the audience worldwide on tv and radio, this is "bloomberg surveillance." breaking news, salesforce to cut 10% of jobs. tom: i think it has been signaled with the executive 5% pay minimum to people shown the door. there is a fuller rate -- flurry that people exiting big tech are finding new jobs. i do not know if that is true, but prime age workers are pretty much employed. it is the old people and the young people that have not come back to work. jonathan: the statement from leadership tells you the story

pretty quickly. as revenue accelerated through the pandemic, we hired too many people. the leadership say they take full responsibility for that. lisa: and there were many industries that did build the workforce. it raises the question. how representative of the broader labor market is this? there is inherent tightness that is represented in the numbers. jonathan: let's talk tesla and apple. let's start with apple. bush, he is well known. lowers the price target to $175 as demand headwinds creep into the growth story. apple remains our favorite tech name but had a difficult december and a difficult start

to the year. tom: up 40%. i would suggest in the 14 times over the year we called not for the death of apple but the stumble of apple, the heart of the matter is new product. the fan boys looking for the new product. do they need new product? or do they just need to sell these? lisa: dan ives talks about the stability of the iphone sales but apple is cutting back on orders around max, ipads, and airpods over a softer consumer backdrop. jonathan: i think that contributed to the losses we had in yesterday's session. tom: no question about it. the surveys are statistically valid in counting the lost number of airpods in the house. [laughter]

try to get to double digits. jonathan: how many have you lost? tom: under the couch it has to be four. jonathan: you can find the case. tom: you bring the case in -- jonathan: and they will give you a spare? tom: and they will give you a spare. jonathan: i did not know that. tom: i did not either. jonathan: how much do they charge? tom: a lot. they are ridiculous. i don't have them. jonathan: i have seen you with them. tom: do you use airpods? lisa: no, but some of the family do. the worse is when they go through the wash. [laughter] tom: do they survive? jonathan: putting it through the wash on accident. tom: i'm sorry. they went through the wash. jonathan: apple up 6/10 of 1%. futures up one third of 1%. what continues is this move lower in bond yields.

3.6753 right now. tom: it is not a big deal yet, but moving that direction. i would suggest the market is waiting on the data. you are big on ism. is this a big deal today? jonathan: without a doubt. we need a read on this economy. we will get that today and through the week. lisa: at 10:00 a.m. ism will be interesting. we will see if it picks up after dipping. i am also watching november u.s. jolts data. how much do we get a sense of the labor market loosening just a little bit given the dynamic tom was talking about with older and younger workers staying out of the workforce? who is going to fill the roles in big tech and banking sectors?

they are still very much in demand. we also get u.s. vehicle sales with toyota, gm, honda, ford tomorrow. the shares of these companies have been absolutely hammered. ford down more than 50%. is it just tesla? do we see an increase in the supply chains easing after china's reopening? what about demand given pricing and how difficult it is to get financing? at 2:00 p.m. we get fed meeting minutes. do we get a sense of the balance of risks? are people more on the lael brainard train? how much are we seeing peeking out at 5% of that fed funds rate being baked into fed expectations today? i think any indication of what was underpinning a meeting that seemed to be a shift in tone for the federal reserve will give indication of how they're going to play this balance of risks.

jonathan: looking for that clarity later. joining us a sarah hunt, chief market strategist at alpine saxon woods. i want to start with two names. apple is at 18 month lows and tesla started yesterday with the biggest one-day low going back to 2021. is there any broader signal out of those companies? sarah: good morning and happy new year. thank you for having me. i think there is specific things going on with tesla. apple has something to do with people have been looking for that as the last drop on the tech side. it was down quite a bit more than it had been until december. i think to the argument the market needs everything to go down before it starts to figure out where it is going next, that might be a good sign if you are looking at those terms. on tesla's side, you have things

going on with production numbers, the concern about financing, the concern about the consumer and the cold snap has issues with electric vehicles. there could be a lot going on about the broader market rather than tesla. tom: if we get disinflation, what you equities do? sarah: you could argue that we had disinflation when rates were at zero. equities did pretty well. i think the question is, where do rates go? i think that is the biggest issue for equities, what is going on in the bond market. when i say does going to be a difficult year it does not mean it has to be down, it just means volatile. i think all the data coming back and forth is going to be part of that. disinflation worries people for a lot of other reasons because it makes debt more expensive. but for equity markets themselves, lack of inflation was not a big backdrop for them.

lisa: what about commodities? this was the best trade for 2022. do you see that continuing? or do you see a rightsizing with the actual performance and energy equities? sarah: it is interesting. listening to amrita sen before, energy is the biggest beneficiary on the commodities side. it is a question as china opens up and there is a question in terms of where are we going to go globally? are we building more things or are we just moving people around more? i think the material question is up in the air. but anything related to energy, including coal and even the steelmaking side -- there was a story this morning that china was looking to australia for coal -- i think those will be in demand because you had a slow

down in china. i think it is hard to see that group not responding well to any kind of opening even if it is uneven. jonathan: we get a repeat of the leadership from last year this year as well on the s&p? sarah: i think -- energy had a great year last year but it has taken a hit the last few days. they have gone on sale. you are down 8%, 9% because oil dropped and we have gotten warm weather and natural gas dropped. i think there is real opportunity. longer-term we have a longer tail on hydrocarbons. i think those stocks have a chance to perform through a couple of years because there has been overinvestment and prices should stay pretty strong. jonathan: sarah hunt, always great to hear from you. another voice talking crude prices through the year ahead off the back of this china

reopening. tom: china reopening is the heart of the matter. everyone out there it was asia dxy. guess what? i cannot say it is there, but finally we have a weak dollar trend in place. jonathan: we did pandemic economics in 2020, 2021, 2022. are we going to do it again? tom: this is the key question. jonathan: it is. lisa: china reopening, we will do pandemic economics to a degree. but the war in ukraine raises a question about energy. whether we start to see cold weather start to change the disinflation story. how much of the disinflation we are seeing is an energy story that could get offset by china reopening, weather and any other development? jonathan: warmer in new york today. lisa: it is super warm.

tom: it is warmer here too. lisa: you are saying it is warm? jonathan: it was warmer. tom: folks, he does not wear a coat. [laughter] you want to pretend you are in london. jonathan: i wear a coat. tom: it is thin. lads in the city where it. ll bean, freeport, maine, with the boots up to his knees. jonathan: just getting in and out of the car and come into the office. lisa: a real nature man. [laughter] jonathan: i am not going exploring through central park. tom: do you where the vest that is in right now? jonathan: the midtown uniform? tom: the midtown uniform. jonathan: i have so many things to say. [laughter] if you want a promotion -- tom: mike wilson wears one.

jonathan: just drop it. tom: he wears the midtown uniform. jonathan: mike wilson will join us in the next hour of morgan stanley. this is bloomberg. ♪ >> fashion and financier. keeping you up-to-date with the first word, i am lisa mateo. kevin mccarthy saw his longtime ambition of being house speaker slipping away after a humiliating showdown with the conservative minority. in three rounds of balloting, he could not get the votes he needed to be speaker. he will try again today. the fed is going to shed more light on white is worried strong inflation may linger. they will publish minutes of the fed policymaker's meeting. they expected inflation would end 2023 higher than thought.

easing price pressure throughout the euro area. consumer prices rose 6.7% from a year earlier after record increases of 7.1% in october and november. that is a relief for european central bank policyholders who opted for a smaller rate hike. russia raised the death toll from a ukrainian rocket attack on its troops new year's day. the kremlin says 89 soldiers were killed, the largest loss it acknowledged. they blamed the mobile phone use for exposing their location. global news 24 hours a day on air and on quicktake by bloomberg. powered by more than 2700 journalists and analysts in over 120 countries. i am lisa mateo. this is bloomberg.

>> i nominate hakeem jeffries for unity in congress and progress in our country. democrats are united behind hakeem jeffries. i recommend hakeem jeffries as speaker. [applause] jonathan: that was representative pete aguilar. here is the price action to kickoff trading. wednesday morning, i am losing track. we look like this on the nasdaq. yields coming down six basis points. yields at about 3.67.

this is the strongest new year's start going all the way back to 2001 for treasuries. lisa: this bothered me. can you say that with one day? it has continued into two days. tom: it is financial tv. lisa: but this is it. i thought, really? it is the best sense 2001? how much our people trying to get ahead of the year's projections, go into the bonds and then we flip the script? jonathan: why so angry? lisa: i don't know. it seemed ridiculous. jonathan: michael mckenzie wrote that story. i thought that was interesting. thank you. would you like to apologize? lisa: no, but it is good to give us size and scope. jonathan: issue done? lisa: i am being escorted out. i just felt it did not tell us that much except the trade is

completely getting used in the first part of the year. jonathan: that is the move for the year. [laughter] lisa: it is getting ahead of the year's moves. tom: she is daytrading with bramo. [laughter] it is under debate. lisa: exactly. tom: annmarie hordern killed it in the first half. we mentioned ohio and kentucky today. nancy pelosi of baltimore and california voted for mr. jeffries. it is the way democracy is supposed to be. what are we going to see from the other party. what should we watch for from the republicans? annmarie: you mentioned former speaker pelosi, or current given

the fact we do not have a working 118th congress. but what you will see from the republicans is no one has yet given into mccarthy. at this moment, yesterday his final tally, he lost another vote. one that he did not in the first and second. 20 individuals. this is not five or six people, these are 20 people he needs to negotiate with. what you want to see today potentially for his path is whether or not he can make any progress on bringing that down. if all members are present, he needs 218 votes. tom: axios' amrita talked about moderates. which is mr. mccarthy? annmarie: depends on who you ask. you will have some on the ultra maga side to believe he sold

himself out to climb the ladder. but you have some on the moderate side who would say, especially during the january 6 insurrection and wanting to shore up his place in the republican party, showed his fealty to the former president. we have seen those pictures of him making the pilgrimage down to mar-a-lago. but you could say he is one of these centrists and he wants to do the politicking of congress and be speaker of the house. that is his aim which is why the ultra maga have an issue with him even though he was blessed to be speaker by the former president. ideology wise they do not match up. jonathan: have the people voted against kevin mccarthy articulated what they want? annmarie: there is not much left for kevin mccarthy to give. he made one of the biggest

concessions which is saying five individuals, five lawmakers, a very small group, could call for a no-confidence vote. you know how those work. we have seen a lot of this play out during the backbenchers with the tories that led to a referendum. this reminds me, for the international audience, what happened in the united kingdom. but potentially one concession could be making it to one individual lawmaker calling for that snap vote giving more leeway to some of these ultra maga individuals to have more say on some committees. but again, it does not seem there is any concession besides mccarthy exiting and then coalescing around another individual. it has become personal. lisa: what is the drama we have seen in the house republican party about what we can expect in 2024?

annmarie: i think what you can expect is this is going to be a big fight in terms of the presidential election for 2024. this is a very divided congress. but before we get to 2024, what does this say about the u.s. being able to pay its debts? not come onto the brink of a government shutdown? not coming onto the brink of falling off a cliff and being downgraded like it was in 2011? they had to strike a deal with the obama administration in terms of cutting funding by $2 trillion over the next decade. this foreshadows how difficult some of these very important and big policy negotiations are going to be the next 12 months. jonathan: annmarie hordern, we will catch up with you later this money. thank you. you know who was untouched by this? governor ron desantis in his inauguration speech.

had this to say. he criticized the federal establishment in washington, d.c. he singled out the inflationary spending binge and said the current administration recklessly facilitated open borders, making a mockery of the rule of law. he finished with florida is proof positive that we the people are not destined for failure. tom: he has got to move from florida out through the process of this ridiculously long american presidential dam. jonathan: when does that start for him? immediately? tom: he is hiring people, figuring out how to raise that money to spend that money. but seriously, how do you in the modern day -- mckinley said on the porch in ohio 120 years ago, it is gone. you have a far superior effort in the united kingdom. what is the process, lisa, to

how desantis expenses reach? i have no clue. lisa: especially if we get -- and you will mock me for this -- but the debt default question. if there is a problem with this -- tom: that puts a cork in my mouth. [laughter] jonathan: i am not saying we will not discuss the potential. lisa: from a political perspective, humor me, how toxic -- tom, come on. [laughter] jonathan: we should have one onset. lisa: i wonder how much the dysfunction you are seeing in the house threatens the political prospects of people trying to be leaders in the republican party. can they get the ultra maga, maga and centrists? jonathan:jonathan: together i think a lot of neutral observers would say the current president

barely campaign. he allowed people to have a vote on whether they wanted a second term of president trump. if ron desantis is the candidate for the republicans, the current president is going to have to do something he did not do much of in the last campaign. tom: you are on a street today. you said something an hour ago that was brilliant. the real question of january is what will the sitting president to? it has fallen to the wayside. i am sure they are happy about it. jonathan: we were told after the holiday. we are waiting for the announcement imminently. coming up, the potential of a debt default. [laughter] ♪

volatility resulted in a significant slowdown in m&a activity. many are wondering what's ahead. for more on this, we're joined by sid khosla. sid, what can we expect? look, you're right, it's been a volatile m&a market and also uncertain economic times. so and you know, you got to remember, we're coming off a very, very strong m&a market over the last few years. so we're seeing our clients be, you know, cautiously optimistic about the future. but at the same time, you know, being very thoughtful about the investment decisions they're taking. we are also seeing they're being very focused on core decisions around where a competitive advantage lies for them and then making structural decisions about their business at this time. you know, i believe in early 2023 is when some of these decisions would start unlocking. and we'd probably see a very dynamic m&a market back for them. ♪ as a business owner, your bottom line is always top of mind. dynamic m&a market back for them.

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jonathan: equities up to kick wednesday morning. equities up on the s&p and nasdaq. advancing nine points. [laughter] you are killing me this morning. are you stretching? is that the new year's workout? tom: like every other clown. [laughter] when does the new year's workout end? jonathan: the 15th. i saw a great story yesterday but ultimately, there was a gym, a luxury gym, banning new

members january 1. anyone who goes with regular frequency know what happens in january and they hate it. their routines are disrupted, there are too many people. they call them the part-timers. [laughter] tom: the biggest problem for me is this thing is right by the furnace. [laughter] i am sitting there and that he is coming off of it. jonathan: for the record, we used to work out back in the day together. good times. [laughter] i walked into the gym and he is smashing machines. [laughter] lisa: just letting them smash. you are one of those. tom: how can you get through 20 minutes? lisa: slamming. [laughter] tom: i'm sorry. it is good and i'm trying to get beyond february 1.

how are you doing? ? jonathan: i am ok. tom: are you cut and chiseled? jonathan: we are not at that point in the year yet. [laughter] tom: i'm still searching for that. jonathan: i do not know where this conversation is going. tom: let's save ourselves. jonathan: you want to peak in july and then maintain and then in september -- lisa: let it go off a cliff. [laughter] tom: yeah. [laughter] lisa: the people on radio love that. tom: on bloomberg radio, i am so sorry. jonathan: i do not know if there is anyone left. [laughter] lisa: i am not going to lead with apple. i am going to lead with salesforce. salesforce seeing a gain after a brutal year. shares of 3% after announcing a 10% workforce reduction after beefing up during the pandemic. we were talking about the

potential for reducing office space. i wonder how much that is going to be a theme. microsoft shares, lower 2%. there was discussion about what is going to happen going forward with their cloud computing areas. ubs downgraded them to neutral from buy. this goes to the question of these darlings of the pandemic era. were they overbid? it raises the question as people get optimistic about the chip sector having already built in the reduction in. demand we have already seen pain baked into the prices. i think that took us to a series. jonathan: that is the best thing we have done this morning. [laughter] the biggest earnings report ever. given the price action in

december and the doubts not just around supply but real doubts about demand. tom: the doubts are always there. dan ives says it is the rock of gibraltar. jonathan: 175? tom: yeah. good morning, lawrence haverty, always a reason not to own apple. that is the way it has been for umpteen years. vassili serebriakov joins us now at ubs. what i find so fascinating and it links into ian bremmer's eurasia group is the historic strong dollar we saw. what is the view on em forward?

do you presume stronger, better em off of the weaker dollar this year? vassili: i think em might be lagging. the dollar has had a great run. what drove that? fed tightening, debt seems to be coming to an end, hopefully, troubles in europe, certainly in terms of the gas price pressures, china covid lockdowns are opening earlier than expected. i think all of this is leading to dollar weakness. one key ingredient we are still missing is the global growth recovery. the dollar tends to outperform in recessions and vice versa. as far as em assets are concerned, what we really need is a broader growth upswing around the world. it is less of a problem for the g10's.

that is a ubs call but you want to be more patient on emerging markets. tom: where is the major pair opportunity of the major payers? which has the greatest opportunity in q1? vassili: i think it is the euro- dollar. i would have said the yen weeks ago but that has moved a lot. it may be an overreaction. you do not want to buy the at these levels. i think the euro is well-positioned. the movement in gas prices has been pretty dramatic in terms of going back to the prewar levels. we have seen some of the short-term and long-term flows improving for the year-end. the biggest is the shift in policy. i think people forget about the wall of money coming out of europe since 2014 when the ecb drove rates to negative. that is changing quickly and those yields only become more

attractive. you still have the growth fears. it is not instantaneous but given where we are trading around 105, 106, it is pretty good for the near term. lisa: when you talk about money flow back to europe, how much of that is from china as it reopens? vassili: that could be part of it. you know, overall, i think investors will rethink portfolio allocations significantly this year. part of it is just what you talked about before. in a world of zero rates, this looks attractively amazing. in a world of nominal rates, you are looking at more diversified allocations. i think rising interest rates in europe puts the fixed income back on the map. in terms of equities, if we see inflation normalize, that should support some of the value stocks

that europe has. i think it will be a gradual process but it seems the starting point is fairly depressed in terms of allocations to european assets, and even in terms of reserve managers from central banks around the world. lisa: let's talk about the other side of that trade, the dollar weakness. i want to dovetail what you said. the reserve picture and the political questions around dollar ownership that cannot be exercised during a period globally. do you see the deceleration in the dollar to be surprisingly big because of these geopolitical threats people are going to express? vassili: i think there is going to be a part of it. i am never going to jump to the conclusion the dollar is losing its reserve crisis status. i think what we are talking about is a more complicated

world politically in terms of supply of commodities, in terms of things like shoring and so on. i think the great round the dollar has had is starting to lose some of its momentum and it is only going to happen more into this year. it is not just going to benefit europe. we are looking at g10 commodity producers like australia, canada, which we think are well-positioned in this world where commodity prices are reasonably supported. and those countries can feature an attractive domestic economy and political structure. tom: very quickly, after talking yesterday about australia. australia is linked to china. is that long australia against a set of currencies? vassili: we recommended long australian dollar against canadian dollar versus the u.s.

australia is much more than china. if you look at the structure of commodities, it is more about the screen transition, industrial metals important for things like electric car battery manufacturing. australia has well-positioned. it is partly china, partly china reopening, but it is a bigger green transition story as well. jonathan: wonderful to hear from you. vassili serebriakov of ubs, thank you. i want to pick up on the boj. waking up to news this morning they announced the fourth day of unscheduled bond buying as we go deeper into 2023. you wonder, is that the place to watch? that is where we closed out the year. is that where we start the year? tom: i think the adults were saying when this theory

collapses you get to 110, 105 strong yen. we are 30% of the way there. but we made a lot of ground here, strong yen against weak dollar. i think the theory is still in place. jonathan: completely detached from the global bond market last year and now we are talking about catch up. you have a central bank that needs to come in and stay there and stay and stay even when you see a big rally in treasuries yesterday and again this morning. lisa: apollo put out something yesterday saying almost 50% of jgb's are owned by the bank of japan. how do you make a market from something that has been frozen in another era? this has been the big question and then the further question is, what effect does that have on the rest of the world? interesting note from stephen major at hvc saying it will not

have as significant an effect if the bank of japan eliminates some of the yield curve control policies. this is one of the main questions of this year. jonathan: the one we have got to explore. if they do x, i have no idea what they are going to do. if they pull back and talk about hiking interest rates, we have a different dynamic in the bond market. you have the boj hiking potentially, the ecb doing qt. the fed thinks they are going to pause and they think qt continues through the rest of the year. lisa: when does the downturn happen? and does it offset the tightening and allow an easing in some of these tighter monetary policies? jonathan: treasuries this morning south of 3.70. this is bloomberg. lisa: keeping you up-to-date with news from around the world with the first word. i am lisa mateo.

back to the drawing board for republican lawmakers in attempts to put in a new house speaker. kevin mccarthy was unable to gain the vote. only the second time since the civil war and house speaker was not elected on the first ballot. the european union is moving toward requiring covert tests travelers from china -- covid tests from travelers from china. several european countries, including italy and spain, have already imposed testing rules on flights from china. in the u.k., food inflation in stores jumped to a record high last month and retailers are warning prices will stay elevated another year. according to the british retail consortium, food inflation rose 13.3% in december. the organization says the war in ukraine has pushed up the cost of animal feed, fertilizer and energy. ftx founder sam bankman-fried

faces a trial in october. he pleaded not guilty to criminal charges. u.s. prosecutors say they expect to produce all the evidence for the case in the next four weeks. it is the best year for british hedge fund manager crispin o day. they soared 152% last year and leveraged by his short wagers on long dated you can government bonds. -- u.k. government bonds. global news 24 hours a day on air and on quicktake by bloomberg. powered by more than 2700 journalists and analysts in over 120 countries. i am lisa mateo. this is bloomberg.

>> this policy you turn on zero curve it, which was executed on 7th december, will raise

questions in chinese political circles about the fallibility of xi jinping's political judgments. therefore, that creates a dent in the armor for the long-term. jonathan: that was the former australian prime minister catching up with tom keene and ian bremmer yesterday. we will build on that in a moment. i want to run you through the price action. positive kick things off this morning. rolling over just a little bit. 3.6865, higher from where they were 12 months ago. we had a massive move higher in bond yields worldwide with the exception of japan. that will be a conversation for later this month. the euro-dollar is 1,0602.

pmi is relatively ok but still dire. cpi has disinflation. tom: number one thing i am watching. jonathan: still too high for the ccp. tom: where do we come down? i am going to state this and i was on the beach and i was really distracted, but the bottom line is spain, france, there is a disinflationary trend. january 12 is really important. jonathan: what beach? tom: the beach beach. [laughter] lisa: you can do better than that. tom: you were in cornwall and i was on the beach. jonathan: we are making up stories. tom: yeah, we are. yesterday was a joy with ian bremmer. we have ayham kamel with us.

you are right about iran, make it discrete and separate except you cannot do that. thank you for joining us this morning. cnn within the last hour reports of iranian drones downed in ukraine made with complex u.s. and western parts as well. how does that complicate the iranian's story? that they are using drones to be used against ukraine? how does that complicate your top risk for the year? ayham: i think it falls in line. the iranians have chosen to side with russia. that makes it much more complicated for washing to engage diplomatically, having tehran support putin with drones and other ammunition. but also, the europeans have a

voice in this. they have always seen iran as relatively engaging constructively at times. now it is taking a very negative position on an issue that impacts european security. tehran is going to react. tom: tehran is going to react. how does europe respond to iran this year? i should make it a u.s.-centric conversation, but it seems so tied up with russia. how does brussels, how does europe respond to the islamic state and iran? ayham: you have seen more willingness to introduce sanctions based on the issues in iran. trying to create caps on what is iran is willing to do. but in terms of nuclear diplomacy, if the europeans do not work at bridging the distance between tehran and

washington, you do not have the jcpoa revival or revival of the nuclear agreement. the europeans are important in the story. but washington is the one that holds the keys to any deal with tehran. lisa: how much are you starting to see moves away toward reducing washington's role? i say this as credit suisse put out this report talking about how middle eastern countries will start accepting payments for crude in yuan of china? do you start to see any shift toward a greater opening up and diversification away from the u.s. in the commerce? ayham: i think part of that is happening independently. it is a big story and it is a lot of the middle eastern parts engaging with china. president xi was in riyadh in

december and arab leaders were there also to engage. the message is america's partners in the region are looking for other partners. i think more of that will happen primarily as a form of hedging. you want oil contracts, for me, are going to be a minor story. riyadh is not going to price most of its barrels and sell most of its barrels in yuan. u.s. dollars remain the core currency they would like to do business with. the same for other countries in the region. what is important as china is beginning to chip away in a region that has been primarily influenced from washington. lisa: how does the middle east compete with russia with respect to supplying crew to china? ayham: i think you are seeing an opportunity here for different middle eastern oil producers and gas producers.

they have been willing to take a share of that in expanding exports toward europe. for opec and the oil producers in the region, saudi arabia primarily, although it has a productive relationship with russia, it sees an opportunity to capture the european market. there is certainly room. but russian barrels are also going toward asia, so there is more competition. tom: what is the path of a theocracy in iran this year? what should we watch for? so much of us are removed from iran. what should we watch for from the religious and civil debate within iran? ayham: really great question. the theocracy is struggling. it has legitimacy crisis and

potentially, we could have a succession crisis. the supreme leader is aging and without him as arbiter in the system we might have an actual protest movement, diplomacy problems, pressure from israel and internal power struggles. watch for the power transition or power issues that could emerge if he passes away. jonathan: ayham kamel, thank you. just a bit of news from you -- for you following the news in washington. kevin mccarthy struggling to get enough votes to be the next speaker. this from the former president, donald trump. some really good conversations took place last night. it is time for our great republican house members to vote for kevin, close the deal, take the victory. he goes on to say, republicans do not turn a great triumph into an embarrassing defeat. kevin mccarthy will do a good

job and maybe even a great job. the former president moments ago. tom: you wonder where this advances. this is got to be his path given all the turmoil around the former president. this has got to be his path. where does donald trump fit into that? where does ron desantis fit into that? jonathan: this will be another test of how much sway he has within his party. tom: i guess so. i go back to the congresswoman from georgia who you think would be voting with these people. she did not mince words. marjorie taylor greene said, i am sorry, let's go. jonathan: what is the timeline for this? how long can you do this for? lisa: you can do it for weeks. you cannot politically though. this will be devastating because they cannot do any other order of business until they get house

speaker. that freezes any activity for a major governing party at a time when, as donald trump said, this is a victory and it will be turned into a defeat. jonathan: do you think this is campy material? you thought it could be. lisa: the theater of it is political drama. the bigger implication is that gridlock is even more entrenched in the republican party let alone the overall congress. that creates real question marks around policy. jonathan: equity futures right now up to -- 2/10 of 1%. mike wilson thinks there is potential downside ahead. mike wilson of morgan stanley, arguably the strategist of the year on wall street. he joins us next. ♪

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>> the recession will be --i think will happen later >> than people anticipate. > recession is unlikely.

>> we are past peak inflation but we are not at the target. >> recession is likely. >> the risks are high and we have to shift on the inflation risk side to the growth riverside. >> this is bloomberg surveillance --this is bloomberg surveillance with tom keene, jonathan ferro, and lisa abramovitz. tom: the team is busting my chops with the opening montage, recession, recession, recession. it is out of control and i have never seen navelgazing on economic souls and -- slowing like i have seen. jonathan: unemployment around 3.5% and wages at 5% and she is asking, where is recession?

tom: martin feldstein and jeffrey frankel at harvard, these are the smartest guys on the block and they cannot predict recession and why do the pundits think they can. jonathan: we have to understand the trajectory of earnings. the average forecast on the street -- our next guest mike wilson will tell you it is about -- to get there. tom: the income statement and the income statement, cash flow as well and we will keep this sort to get to mike wilson. we said -- lisa, we are going into important economic data and jobs on inflation on january 12 and it comes to gaining q1 gdp. lisa: the data has been better

than expected except for the labor market where there is the strength it could fuel inflation. the data has cooperated and you have a china reopening and warmer weather which has taken off the edge of the fears around oil prices. it is our concern, how does that play into whether a recession is delayed? tom: maybe not a technical moment but lower yields is the message. jonathan: it is the strongest new year's stock turned back to 2001. yields down five or six basis points. tom: the dollar weaker as well and futures up 11. let's get to mike wilson with the question, the top charges we have observed, chief u.s. equity strategist at morgan stanley. do you change your day to day grind at morgan stanley and the

classic ideas, are you bottom-up and top-down and there is the factor analysis out of m.i.t. years ago. what is the process of wilson strategy for this year? mike: happy new year to all of you and the process never changes. we do all of the things you mentioned. at certain times, we emphasize one over the other and going into 2023 is probably going to be more bottoms up and more dispersion among stocks, even perhaps within sectors. we do work this week with next week's notes. that emerged at the end of last year because at the end of the bear market, the big kahunas and the market cap leaders have to fall and we are seeing that this

year and the end of last year. we have been talking about that. tom: where is the partial differentiable on the income statement? as revenue the greater mystery? mike: it is all about profitability and we have been talking about this one factor since january and february, operational deficiency and that is what the market is paying for and continues to pay up for companies that can deliver to the bottom line. whatever growth we know will be softer than last year and we don't know if it will be negative because that ties into the question about recession. being up bond investor is harder than being a stock investor. in the equity market, we don't care because if you don't get a labor sector, the margins will be worse so we will get a nasty earnings recession and the companies can deliver on a cost efficiency will be the ones that can perform until you trace whatever this downturn will be.

jonathan: we are starting to see the cuts emerge in big tech and does that make you more contractor -- constructed on the sector in -- constructive on the sector in 2023. mike: that is one of the areas where the two areas are -- the marches as well as topline and that has to get wrung out but there are concerns about tech companies, they are not good cost betters --vetters. they want to invest aggressively through all periods of time and they are not good at costs and they will be late on that. it will take longer than you think and the market degradation can be severe in those areas and there are parts of tech that have gone through that and the other thing is be careful how you define tech and if you look at the top six stocks in the s&p, only two of them are tech

companies and the other them are -- the others are consumer retail. lisa: how has the potential reopening of china change your view because you have been talking about the potential of earnings down term for a while and a lot have changed with respect to china. mike: at factors into our analysis -- it factors into our analysis and from a earnings standpoint, it is less important. china accounts for 4% of s&p revenue. it is not that significant and for certain -- for some companies, it -- is very significant. china has not been close for a production standpoint. they have been doing these welding markdowns on factories -- and the factories have been open. this is about consumption at the domestic level and today is positive for the chinese stock

market and that is what we upgraded china and i am not sure if it is a good beat -- a good deal for the u.s. stock market. lisa: this that make you change your view at all or is that basically what is to be expected before the downturn we see in the first quarter? mike: we are seeing the last and part of that is holiday spend. i think they will hunker down and we have heard some large consumer retailers talk about the dynamic, where they expect demand to follow sharply once the holiday season is over. we are confident about interest rates like housing and autos. those are obvious victims. we are expecting a sharp downturn in this -- consumption, as it stands or of profitable

spending. discounting the return is one of our themes this year. jonathan: do you and the team still believe there is 20% of the downside at the index level? mike: we do and we think 3000 is an achievable number given our confidence in our earnings forecast. ironically, i would say in the absence of a recession, and companies decide not to drop aggressively, that target looks more achievable. that may sound counterintuitive. that is how we are modeling it and our bear case is we avoid a recession but not a slow down and that would be a 3000 scenario. katie: my quote from last year -- someone said the gravity is back. my theme for the year is the great zombie roll up. not that companies morgan

stanley follows but the garbage companies that had a 16 year free ride. what happens to them in 2023? mike: it has begun and we have seen what is going on in the cost of capital goes up, these business models don't work and we have had 15 years of easy monetary policy globally that is being normalized. even though we have a few of your ago and that is going to run ram shot. i am not sure that is a bad thing if we can do it in a way that is not to -- to disruptive. we need a normalization of the plastic capital because it is not healthy for the broader economy and not healthy for five companies to account for 25% of the market cap which is what happened. we need a more democratic economy where medium and small sized businesses have a fighting chance. mike: --jonathan: amazing.

happy new year. mike wilson of morgan stanley. 20% plus downside at the index level and accounting for the next six months potentially. tom: a great economist -- it wraps around certain things happening and i would say pushing against that potential is a disinflationary trend that possibly is in place. jonathan: some people might make the argument that the china reopening could be the story. we got some pushback on what it means for corporate earnings on the s&p. lisa: production hasn't stopped and that does not ease supply chains much and he makes the argument that weaker inflation data may be bullish for bonds but not for stocks and it is bears for the demand picture. could you see a stock market

decline, and the economy hangs in there? the economy more resilient. romaine: the opposite -- jonathan: the opposite of 2020. tom: her insight is critical that they are separate in the economy is separate from the stock market. jonathan: that is the story of last year. tom: the story of last year with the bond market and the singular -- the singular distinction last year was the bond market crater. jonathan: 60/40, punished. equities up 4/10 of 1%. very dramatic start to 2023. from new york, this is bloomberg. >> keeping you up-to-date from news from around the world, i am lisa matteo. donald trump interjecting himself into the fight up kevin mccarthy's bid to become speaker

of the house and the former process and -- president says it is time for republicans to vote for mccarthy. the federal reserve is about to shed more light on why it is worried that strong inflation may linger. the fed may punished minutes of last month's policy makers meeting and fed officials published new projections that they asked backed -- expect inflation will have 2023 higher. russia has raised the death toll. the kremlin says 89 shoulders were killed and the largest lost acknowledged. and blame the shoulders mobile phone use for exposing location. job cuts on the way at salesforce and it plans to cut about 10% of its staff and will take up to $2.1 billion in charges. as of >> -- last of kroger, they

employed 80,000 people and they say they employed too many people. mortgage applications fell in the u.s.. they were down more than 10% and the rate for the average 30 year loan rose almost 6.6%. 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. >> thank you. -- i am lisa matteo. this is bloomberg. ♪

>> the fiscal situation -- markets have been tolerant about this. recession is likely because of what the fed has to do. they have to drive up rates efficiently. tom: --jonathan: fantastic conversation with bill dudley. that last line is controversial in the fed has to drive up the unemployment rates efficiently to slow down the economy and this is something someone was talking about to meet yesterday. she thinks it will be harder to get unemployment from where it is now around 3.5% to 4.5% and

she thinks the fed has more work to do and this is a conversation we will have. lisa went through the economic data. job openings in america is 1.7 job openings her unemployed american. an amazing statistic which was higher last year. it was through two. lisa: this was -- points to tightness in the labor market and people wonder it is difficult to get workers. -- to apply for those jobs and still speaking to the tightness. jonathan: job openings coming later and later this afternoon, minutes for the federal reserve. tom: mckee has lectured me, j

olts is underestimated. we will dive into what is going on in washington. emory horton, i thought was great. we get perspective from greg valerie. i looked at the 20 names of these congress people against mr. mccarthy and a lot of what we would call political normality. one of the congresspeople, the gentleman from the ninth district georgia, called the capital attack of january, quote, " no insurrection." as butch cassidy said, "who are these guys? " greg: i have been doing this for a long time and i have never seen anything as crazy as this story but the handful of members

of the house denied the republican control for the house. jonathan: --tom: mr. trump said this should not go on for a long time. could that be enough to sway them today? greg: it might and there's talk a lot of republicans will be going to sean hannity and other conservative commentators to see if they can dissuade these rebels. i am not sure it will work and i think this drags on for weeks. lisa: what about the voters? is there a sense that this is what people want to break things up and destroy the status quo? is that the voters' will. greg: not really. i don't think the voters will be pleased to see this dysfunction

and for the markets, i don't sense that this is the biggest story. if this drags into the spring, people will worry about the debt ceiling and a credit crunch and some sort of default of the u.s. budget and if this drags on, i think it will become an error 10 for the markets. lisa: i have been talking about this this morning, cohost had thought i was be histrionic. how serious could get and what are the parallels between be republican congress and 2011 where we saw a downgrade of the debt ceiling debate go to the last minute? greg: most of the centers who don't like mccarthy want this to happen and they would like to see a debt crisis so that is something you have to be concerned about. another important point is that,

let's say kevin mccarthy does win. other party members could scuttle everything. they can still prevail. lisa: why do they want to see a debt ceiling scuttle? greg: because it will curb spending. they feel that is the only way you can get discipline on spending. they are furious that mitch mcconnell is going with joe biden today for a new bridge construction and there is bit -- division under money. some republicans wouldn't mind to see a debt crisis. tom: the historical moment goes back to auh20. i don't want to go to a history lesson but there are ramifications to be behavior. does it make centrist democrats

stronger? greg: absolutely and it weakens the republicans and there was, paul ryan was a quality house speaker and john painter was a quality house speaker. their careers were scuttled by a tiny minority of radicals who did not want to compromise. jonathan: greg valliere, thank you. just to set the record straight, -- none of us are saying this will not be a story at some point in 2023. lisa: you are saying the market would not be responding. jonathan: why what it? -- what it? -- would it? lisa: it is exhausting because it happens every year and it feels like it has a different term -- tone. jonathan: what happens, people buy the bonds.

make it make sense. lisa: maybe. possibly. jonathan: who knows? don't want to make a market call. tom: i will not make a mark -- market call. i will be honest. i have family members who are hysterical over the decades about the rising debt. i have lived through cycle after cycle. it gets fixed like it did. there is real turmoil and i remember that clear as a bell with the downgrade. i was on the set with the head guy from s&p and he was explaining this historic moment. you got beyond it. jonathan: what was his name? we used to speak to people at the rating agencies all the time. the u.s. issues.

tom: it is a tangible worry. jonathan: on the fixed income market, we will catch up with someone from invesco. the veto may be not bullish at the index level but thinks there are things to be done beneath the surface and maybe a little contrarian in the near term and we will talk about the importance of january. lisa: that was interesting. basically saying people have gotten so bearish that perhaps that is contrarian. jonathan: after that, we will catch up with someone of the new street research on tesla and what has happened in the next month. tom: i will never tell you what to ask on your program? she is so good at esg and i would love to know where esg goes in 2023. she owns the high ground on this

quantitatively. i would love to know -- where is the super mania on esg. jonathan: she has a lot of thoughts on the decline of globalization. worthy of a longer conversation. she is coming up in a hour from now. what you tune in? -- will you tune in? tom: i am. jonathan: bill sweeney is trying to get him to focus. lisa: i was going to say -- jonathan: i like the font. lisa: the color. jonathan: from new york, this is special. [laughter] ♪

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tom: when we say good morning, the first day back and we enjoy it. lots to about and jon ferro prepares for his 9:00 hour and that -- the insight from mike wilson that we got is nuanced and important. what i saw from him is he will use every bit of analysis he can use to figure out where we are going and their is not a certain formula. lisa: even though the stock market has done well in the economy has suffered, it is going to be the opposite where you get a downturn in the stock

market to the tune of a 20%, even though you would don't -- you don't have a commensurate downturn. tom: conrad dequardros joins us. there's a careful analysis and i will go to the blunt instrument, the first day back yesterday and the bottom of 5th avenue and all i heard was recession gloom. could you ask really predict a recession -- actually predict a recession? conrad: we can talk about the risk and trying to determine the timing of recession is difficult. i would say all the stories about the first day back and recession risks up, nothing has changed between the end of last year and this year and we have signals that are ominous. we have signals from the market

in the inversion of the yield curve but we have a lack of confirmation in some of the economic data and that is something we will be looking at. we have this continued strength in the labor market and a unemployment rate that has not been rising. that is a signal. before we get that, declines in job openings and potential he over the course of the year, we would expect to see contraction of profit market. those are the variables that we would look at. tom: are you suggesting that this morning's data has value? is it ism or jolts? what will you focus on? conrad: the more important beliefs will be -- semi-are the job openings report. ism is important. this representative of a relatively small part of the u.s. economy, manufacturing in

employment terms, less than 10% of the economy but the job openings report is key and it will be the -- the predominant numbers for the fed. the fed is looking for softening in labor and we can measure that through job openings data and we have 10 million job openings and have 6 million people unemployed so there is a significant excess demand for labor relative to the supply of unemployed workers looking for work and this will be a key variable for determining how the labor market progresses over the course of the year and how the fed feels about his progress about have -- bringing the man into line with supply. lisa: we are starting to see disinflation in goods. how about seeing more disinflation without people losing their jobs and hoping -- without hoping for an increase in employment and a decline at

the pace of how much wages are increases --increasing? conrad: it doesn't have a lot to do with the labor market and the demand. we are focused on the stance of policy which has been easy, and even with -- you can have these periods in which you have cost pressure in either direction but whether or not those cost pressures work their way into bottom prices depends on policy. the less i is seven, we had a price paid index fell blowing -- falling below 50. there is anecdotal commentary about those cost declines not being passed on to suppliers and that is reflective on the posse that is accommodative. going forward, on the cost side, we need to look at things like the market and the strength of the labor market and the tightness will determine labor costs but the extent to which

that feeds to prices in either direction, whether copies past -- pass-through declines on the good side or increases on the labor costs will depend on the stance of policy and the fed says they -- set a much more realistic outlook on the path of inflation and they are looking for slower inflation and lowering the target and that is reasonable getting inflation below 4% and the fed is looking for a higher -- funds rate. achieving that real fed funds rate and that is a signal that they are starting to move policy into a restrictive stance and that will give us success in bringing inflation down. lisa: the fed said there was more of the concern of over tightening and stymieing any sort of inflation coming down and we heard that from jay powell. and brainerd perhaps leaving the

charge. how much will that be reflected in the minutes we get? conrad: i read the fed being much more closely aligned and-ites -- than i expected and the fact that there are 17 out of 19 fomc participants that expect to get the funds rate over 5%, that seems to be a cohesive group and there is a couple people who have a lower outlook but if you look at september -- the lower -- lowest projection for the fed funds rate for 2023 in december sep's was the highest in september and we had a shift towards a more hawkish stance by the fed and i think it was broadly held by that of pistols -- fed officials, given the number who think the funds rate should be about 5% so it was fairly hawkish and i would expect to see that concern within the

minutes about getting inflation to target. they raised their inflation forecasts so it is taking longer. tom: we have a generous amount of time with you and we go -- fear to tread it to the 70's. back to the 70's and people are making a big deal about money supply -- supplies going in and money expansion and falling off the cliff. and ed hyman's has it on the chart. do you and john care about what m0, and the money supply coming in and being reduced? conrad: money is important but whether that is appropriate -- appropriately measured by some of the aggregates. the fed will provide whatever money is necessary to keep the

fed funds rate at the target which is not as useful anymore given the excessive amount of bank reserves. i don't think m2 is an important variable in what we have seen is a slowly -- slowing of the growth rate at m2 but if you look at the levels, it is high and if we look at other measures of money in the system, whether they are the bank reserves and very large amounts of money flowing to the fed from groups like money market mutual funds, it is hard to make the argument that money is getting tight. the fed will get there and we will start to see -- we have that balance sheet that has been reduced and the fed funds rate that has been moved higher. the fed will move to a tighter stance and that will begin to bite in 2023 and that will give us the pullback in job openings and the moderation of inflation. m2 is that the measure i am

looking at. tom: the unfair question is the shades getting to restrictive and an official suggest maybe on the edge of the super restrictive and how close to restrictive policy all are -- policy arbery? -- r.o.e.? --are we? conrad: i don't think we can describe a negative real rate as description -- description -- restrictive. even in be environments where there were more -- being up -- below the target then above it. posse with the inflation rate and the fed writing be inflation battle, we have a policy rate that is below where it was when they were more worried about inflation being below targets oi the policy rate -- so i think

the policy rate is not yet tight and i think the fed will get it tight and if we measure it in -- along the lines of a real policy rate, it will be combination of the fed moving the nominal rate up and the inflation going down. tom: conrad dequardros with us. my own way i look at this within the myriad ways, is the real yield. we made that -- where we were talking about tuition and now it is 1.43% and i did a fancy technical thing, 2.05 is february years ago and speaking loosely, we are distant from that. lisa: the higher that real yield and inflation and -- inflation-adjusted yield, the more restrictive the fed is perceived as an we are at eight west are restrictive degree.

this really is a question, at what point this is matter again to a federal reserve that has look to markets to be the instrument to transmit financial policy? tom: when i was on the beach, this is the one thing i looked at off the phone, the bloomberg financial conditions index at -1.44 is more accommodative. lisa: sounds like a thrilling beach trip. did you hit the sand? tom: it was black sand. lisa: where is the speech -- this speech? --beach? tom: at the pacific. jay powell has not had a good holiday and we have become more accommodative. lisa: he did not push against it in the last press conference and

people were surprised, why wasn't he saying people need to price in more pain? there is a hope that the u.s. economy can avoid some mass downturn but it speaks to mike wilson's point, does it mean that stocks can avoid that pain? tom: why is the bond market going the other way? this is the jumble we are in. lisa: a lot of this is going on in europe, the faster than expected decline in inflation. tom: that is what i am looking at and at january 12, we will have full coverage for you of that inflation report. futures up 6/10 of 1% and features of the down -- of the dow jones industrial average of 125 points. >> i am lisa matteo. donald is telling housing -- house republicans not to turn a great triumph into an

embarrassing defeat of kevin mccarthy and the former president says it is time for officials to vote for kevin mccarthy to be speaker of the house. the vote failed three times. the european union is moving towards requiring covid test for travelers from china. advisors have agreed on a draft opinion that includes masking and pre-bright -- flight testing requirements. some countries have imposed testing rules. in the u.k., food inflation jumped to a record high and retailers are warning that prices will state elevated for one more year. according to the british retail consortium, food inflation rose to 13 point 3% and the organization says the war in ukraine has pushed up the cost of animal feed and others. sam bankman-fried faces a trial in october, and he pleaded not

guilty to criminal charges. u.s. prosecutors say they expect to produce the evidence for the case in the next four weeks. cathie wood has reaffirmed his -- reaffirmed her support for tesla. funds backed by woods -- on tuesday when the stock plunged 12% and would has acquired more than 938,000 shares of the company since october. 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 lisa matteo. this is bloomberg. ♪

>> the windfall profits tax is not going to encourage more supply. it is not likely to reduce prices and it could do quite the opposite and if we want more energy price -- production and

more supply, putting taxes on energy production is for not a good idea. tom: michael work is at chevron. this is an interesting guy. -- creating mayhem and you go east and there is what is called the mineshaft. that is where they meant engineering --mi engineeringnt. michael wirth -- is a chemical engineer. mr. rubenstein joins us. this guy reminds me of alan mulally with four more -- ford motor. how is michael wirth different from other ceos at the oil patch. david: he is our kit --

articulate and smart and low-key and doesn't do many interviews but he has done his job very well and i think he has built the company into a strong position and has a market capitalization of about $300 billion and the company keeps growing and doing well and he lost out at acquisition to occidental but other than that, most things he has pursued, he has achieved. tom: the stereotype is that -- oil companies will do a joint venture. is there a new effort chevron? -- pat for --path for chevron? david: the paths were shelved and they will not be put together again and oil prices

went up to $120 per barrel in the oil companies have decided not to pursue those ot billion-dollar project so they are using the facilities and the oil fields they have and they are exploring new ones but not for expensive things that we see in pr take -- the arctic. lisa: even as profits surged to record highs, we are talking about a $37 billion profit for chevron last year and that is more than 40% higher than their last record and how is this serving for mike wirth and is it a liability or is it a boom that we can deliver after a pandemic reality? david: whenever oil prices are high, companies like oil -- chevron do well and they are used to the beating they get from the press and people in d.c. and they have been able to stall profits in -- when i was

in the government, we had a windfall profits tax and did not work in the 1980's and i doubt that will pass again. i don't think that will happen and there is no doubt that oil companies are not that loved by the public and ball everyone likes to use the gasoline and oil, they don't seem to love oil companies and i think the oil company executives have gotten used to that. lisa: that brings a question about whether there is still opportunity with fossil fuels that a number of these big oil companies have been trying to diversified away from with certain esg type efforts. did you get that sense from mike wirth that this is justifying further investments from fossil fuels that would otherwise be diverted to -- david: to be realistic, the

renewable space is a small percentage of the overall energy consumption in the road and it will not change despite the best efforts of everyone to do so. the major oil companies are going to get the bulk of their profits in the sailboat future from oil and gas and renewables are there but it does not contribute enough to the bottom nine -- line. tom: i want you to turn to what is changed year in the last 16 years and we have had a free ride in the cost of capital and it was dire straits as money for nothing. we are back to what you remember in your youth. capital cost something and a return of the risk-free rate. talk to the younger people that have never experienced this. what will change? david: it is difficult to raise capital and difficult to get the returns that pleases investors. and when money is free, it is

easier to do investments. it is harder now. every generation has lived through these ups and downs and my children's and vent -- generation recognize it is harder than it used to be. disciples come and go. suspected -- i suspect federal reserve will keep interest rates reasonably high and by the fourth quarter, some easing will occur. for the for seeable keep -- future, you won't see rates go down. tom: i don't want you to give away the fed -- family secrets but do you you amend the federal rate return of expectations? do you bring them in 100 beats and dampen the expectation because this money costs something? david: of course. rates in the private equity -- in recent years, because interest rates have been higher and things in the mid-17% net

internal rate return is likely and thought to be desirable so you do lower your expectations. lisa: i want to wrap up with this question, as tom talks about zombie rollouts, how much capital is there to make big acquisitions or even medium-sized ones after companies have are on -- after companies are on their back? david: there is a great deal of capital for equity investments and the debts capacity is smaller than it was because many banks are holding on to loans that are probably underwater and i don't think they want to put more lines on the balance sheet until some of the loans are cleaned up. some of the buyouts, the technology is underwater and a good example is the twitter loans. those loans are not up to par and the major banks will not put

up major amounts of new debt to finance large buyouts but at wrote capital, you will have a fair amount of capital for that. tom: thank you so much and looking forward to his conversation with micheal wirth of chevron. colorado engineering was so intimidating and i was there a number of years before him and it was beyond intimidating with the heritage, the colorado college where david miller pass went and --millpass went and it was a heritage of engineering. lisa: i wonder what the correlation is for people who go into engineering and their love of rockclimbing and skiing. tom: theoretically, that could be possible. it is the time of stephen stills

birthday. there was a time out there of a fervent of music and other things. lisa: we will leave that for the break. i am curious about how some of these ceos of big oil message after a year of blockbuster returns and blockbuster profits into a time where fossil fuels have renewed interest and you raise the question about esg and it is a good one. how much people have deemphasized that at a time where it serves as -- tom: big oil will climb on board. this will be a real discussion about after the pandemic and what we have seen with the war in ukraine, what is the new esg look like? it is an important debate. lisa: another question, other countries are investing more in

other nations after the political risk with russia and that is something in terms of rejiggering in the global picture. tom: today is not normal. conrad dequardros says shut up and jolts, job openings is an important statistic. lisa: there are fewer than 1.7 jobs for each unemployed american available and there is a feeling that there will be a less tight labor market. tom: features up 19 and dow futures up. i noticed that 22 point 83, a little bit elevated over where we were even three weeks ago and we have not mentioned bitcoin all money -- morning. 16600. stay with us this morning on "balance of power". look for washington's events

later this afternoon. good morning. ♪

jonathan: live from new york city, good morning. your equity market positive .5%. "the countdown to the open" starts right now. >> everything you need to get set for the start of u.s. trading. this is "bloomberg: the open" with jonathan ferro. jonathan: we begin with the big issue. falling on hard times. tesla and apple facing down investor skepticism.