>> what we are seeing is a boost. >> fire rates consistently to slot on the economy to generate slack in the labor market. >> we are likely to see slower and slower perils. it's important to not get

distracted with what is happening in this tech sector. >> this is bloomberg surveillance with tom keene, jonathan ferro, and lisa abramowicz. tom: it's difficult, we will have difficulty for you in 29 minutes. the minimum, it's complex. jonathan: just pick sites. tom: 200 two 202. jonathan: the labor market this week has been resilient. if the adp is worth anything to you we have a surprise from that. jobless claims really low you can throw on top of that what we have seen with job openings. 1.7 openings for every single unemployed american. the official data is screaming things are ok. then you have a load of other people that think this is as

good as it gets. tom: it's a game we have right now. neil comes out and says real income look pretty good and they do because inflation, particularly in important sectors like utilities is coming in a bit i want to know what secretary process to say this morning. jonathan: they hope neil does this right and the pessimists are wrong. tom: because it really feels yielded is right. -- neil does is right. john come as her to make it right. tom: -.19 tells me chairman powell once a gloomy report to did? lisa: this administration might want that until 20 24 and then it doesn't because they don't

want inflation to keep going so where does the fed come into this? what we heard from priya is they may have to torpedo this 5.5% holding it there for a year. nobody is gaining this. jonathan: there are two phases to this. first phase is the hiking cycle. maybe we had the bulk of that. then comes the pause. they believe the pause is a tool. it's not a moment in time or you stop there for a month, i think they really believe the pauses a valuable tool to look around until they are absolutely convinced inflation is heading back. tom: ubs on equities here, lisa, i'm sorry people are taking the pause and extending it out chamberlain, pre-a an hour ago

was standing on the duration of curve inversion. lisa: that's what i find it so amazing that the market is still praising cuts through the end of this year. you have economists coming out saying they are going to hold, they are going to hold at the market sister not going to hold. jonathan: the vanilla spread -76. jonathan: the call from priya and for those of you that missed the conversation calling for yield curve inversion this year recession at the backend. and ultimately fed funds go through 550 and stays there. tom: the dow is stronger. give me some data here. jonathan: equities down 1/10 of 1%. the jobs report just around the corner getting into the yields higher by a couple of basis points on a 10 year crude had a

really interesting start to the year. go back to the first two sessions. 73.5. ," tesla off the radar this warning but renting in just under 103 right now we are going to dovetail this length of duration, the duration of 2023 and the ramifications of fixed income over the equities space. nadia levels joins us. what is see how much of it? the length of the mean how do equities react to a holding fed, a longer diversion? what do equities do? >> i think it's going to be a challenge for equities if you have the fed on hold for a very long-term. that is going to impress your margins. it's going to express evaluations and also overall

pressure earnings in 2023 as economy slows down so i think it's going to be a tough market. even though we have a 3700 price target for june on the s&p 500 we think the market is going to trade lower than that in the first half of the year as those earnings cuts continue to happen and we think it's going to start really with the upcoming earnings season should -- season. duncombe it be away from the index the full story what do you think the opportunity is? >> we think the opportunities continue to be in the more defensive areas of the market. and also energy. energy has had a roaster to the year. some of it having to do with the oil prices, the rising covid cases in china but we think that the factors that pushed it over $100 in 2022 we are going to

continue to see the investment in energy and production disruption continues we see that environment that went into place in december. we also have the refinement product embargo. china reopening is going to put pressure on all oil prices. that should be supportive to the energy sector in 23. lisa: can you give us color from your conversations with clients? how many have come to you instead why should i invest in stocks at a time where i can get four point 5% reliably on investing in to your treasuries? >> i think what we are hearing from clients is definitely a mixed bag. some have power on the sideline. we are seeing continued interest in the fixed income market and that's going to be our message as well.

recommend high-grade bonds as a way of seeking incomes as well as structure pots or you can get some yield as well as outside protection if the market should pull back further so it's been a mixed bag. some clients waiting for additional pullback and some rightsizing their exposure because believe it or not tech has been a dollar for so long. we still think there is more downside to tech so we do advise clients to write said that position. lisa: including what we were hearing from dan ives talking about the potential for upset in tech later this year how much things have been beaten up are you saying that everyone says they are bearish on tech but they are still of and have to right size to where we are now and the where the expectations are for earnings? >> absolutely we have heard that. we are also, when you look at

tech from a valuation standpoint this sector is still not cheap. they still trade at a 20% premium. even this week we have heard from make a cap software company that it could take time. we saw a massive demand over the last two years and we are seeing they could take two years for the normalization to happen. even your semiconductor space, we are seeing we is here in demand providers and also in data sectors so we think there is a downside to tech. we see the numerous layoffs in think there are more to come. jonathan: nadia, thank you. that is the second voice in the last 20 minutes or so talking up or rather talking down. nadia level -- lovell things tech is our future.

tom: i would go up the adults are telling me look at the income statement. i would go up and look at what the changed expectations are for revenues. if you get disinflation trend you would stasis. you have to believe relevant growth comes in. jonathan: lisa is on the money. a lot of people say why take the risk? lisa: i wonder how much of that is a discussion at a moment of such uncertainty when people can actually get income elsewhere at what point do equities get cheap enough to offer the offset and the potential upside again, i don't how much people are talking about this but when you talk about cash it is just hiding. it's just you are getting income that might be up of the dividend yield you are getting on many stocks. jonathan: if you haven't been around many years would you, especially if you listen to the show. and you heard the numbers 2,

3000 on payroll but there with the recession conversation we are hearing from so many people about the negativity and the pessimism there is a difference between the arguments you make on the market and the economy. tom: it is the heart of the matter and we need to see a that say it with some humility because we don't have published. they have to put thing down on paper. what they put on paper is a lot more important with the yammer on about on bloomberg surveillance but nadia and the rest of them, this is tough. jonathan: you talked about the outlook the on three months. tom: if you said to me right now over a beverage of my choice right now i would say the single idea that shows the struggle, stuart kaiser there are so few things for him to choose from

that is the feeling i get right now. jonathan: jp morgan next friday. earnings friday. izzy time. -- busy time. going to skip cpi, going to skip seat -- jp morgan. tom: are you serious? jonathan: i'm deadly serious. a january vacation. lisa: look at that, just fascinating. jonathan: second week of the year. lisa: happy new year, guys. where are my running shoes? jonathan: job report about 20 minutes away. >> keeping you up-to-date with this around from the world on lisa mateo. the u.s. jobs report is out in less than 20 minutes and it will help determine with the federal

reserve does next. the estimates are that employers added fewer jobs indicating the labor market is cooling and a higher rate hikes aren't needed. the data released shows the stock market is service again. republicans are making history on capitol hill. they blocked kevin mccarthy from becoming speaker of the house on 11 ballots that is a civil war record. it leaves republicans fractured. so far, he hasn't been able to get enough votes. sweeping changes on the way at the center for disease based harsh criticism for its delayed and inconsistent response to the pandemic. the cdc will require all employees to be ready to deploy to combat a national health crisis. the clock has started on

vladimir putin's cease-fire. ukraine has dismissed the troops as a ploy president zelenskyy called it a bid i moscow to get a break in the fighting to step toward. holiday travel meltdown is prompting southwest airlines to revise is outlook. the airline canceled or than 1600 flights in the last year. it expects to report that loss for the fourth quarter. i'm lisa mateo, this is bloomberg.

>> clearly slowing but we are not calling for a recession in 2023 we are still there. i don't think we are in the majority with the few but the fact the economy is holding up is part of our view there. jonathan: a more constructive

take at morgan stanley going into the payroll support, 14 minutes away. is it shaken up on the s&p 500? negative about 1/10 of 1%. 3.7 four the numbers we are looking for, 202,000 is the estimate for the month of december the previous number was 263 the last eight months we have had upside surprise after upside surprise. the headline number, unemployment set to stay at 3.7% according to our survey. still looking for the handle on wages in america. tom: thanks to tom for selling for weighing in on that. would begin strong with the federal reserve system. thrilled that randy crosser can join us.

going to go steve lebanon here. what a tour de force he has had just a pole in the social aspect of where we are. i want you to explain how blind we are on this jobs report, how blind we are on the american labor economy because the overlay of technology. do we actually know a job economy when we see it? or are we just completely blind off the pandemic given the modern technology? >> certainly blind but i don't want to go so far and say that everything is completely unprecedented. obviously things are a little different then the typically are. we have had this calling up her strength in the labor market what's amazing is the fed has continued to raise rates, continue to tighten monitoring policy.

we have seen the housing market start to turn down, we have seen a lot of tumult in the private and public equity markets. we haven't seen a cracked. my guess is when it happens is going to happen quickly. our model says it will go smoothly. practiced things seem to go more rapidly. some uncertainty there but i do think it's a point it's going to crack. i'm should the fed use new models are rely on the new ones? because the labor market refuses to crack. >> they are experimenting with new ideas something about they can have this as immaculate disinflation were we just reduce the number of openings because that has been in record levels

for people seeking jobs. this could potentially come down without the employment rate going up dramatically and wages start to moderate. we have never seen that before i wouldn't put all my eggs in that basket. they are thinking about some alternatives but i tend to be a little more traditional. lisa: do you believe in the view of things that the fed might have to go to 5.5% in terms of eternal rate. at the strength of the labor market that we continue to see. >> i have been saying this for a long time, the fed is going to end with a five handle weather is closer to five or six is going to depend on the strength of labor market, wage inflation, and other aspects of the economic activity and inflationary pressures. i do think they are thinking of

five or above. i think the inflation rate bolster to come down but if you keep the non-interest rate of 5%, effectively the real rate is going up. is going to be tightening, more likely to get significant slowdown. >> which is why the market doesn't believe the federal have the gall to keep going with that. so how would you push back against that considering you can wear the hat how would you say they do with their -- with political pressure. if you do see disinflation and weakness. >> i think they have done a lot of the political heavy lifting already it's much easier to hold rates when the unemployment rate is going up. or reset when it's not going up significantly so believing it

rapidly we got close to 5% where the terminal rate is. almost at zero and now we are talking around five so in some instances i think they have done up lifting already. it is much easier to just hold and it is to be raised. tom: treating stuff on the social aspect of our american labor economy. so much of his work and others in chicago is to say our central banks needing to take a different tact? we have to stay on traditional central bank, or do we need to think about new ideas forward out of this endemic? >> i think we do need to think about new ideas going forward because obviously the world got

it wrong. they said transfer tory and it was fun for a few months but then it was six and nine months that we were hearing this and it was clear after about three months or so that maybe we shouldn't go towards it. understanding the supply-side in more detail and thinking about how they can best communicate. unfortunately it's not like he has not yet -- even with how much inflation went up even if they got it wrong people didn't say these guys don't know what the talking about inflation is going crazy so i want and percent wage increases. we do want bigger wage increases but inflation expectations have gotten out of line. they have that kind of right so far. jonathan: looking forward to your coverage as we break down the jobs report coming in about seven minutes.

when mike mckee turns up in a studio, that's like the moment. jonathan: what's funny is the entourage that comes behind him. standing over here warming up. jonathan: six minutes away what are you looking for? >> change in service industry wages versus manufacturing goods producing. the fed has been worried because there is a shortage of employees we will see how many people get hired there. >> do you see this idea where we searches see weakness or is this trying to find a needle in a haystack? >> i was thinking about this this morning because there was disagreement about whether the household survey are correct in the philadelphia fed.

did some calculations and there are a lot fewer jobs created it when you look at the rest of the anecdotal data it doesn't seem we are seeing a lot of weakness. the fed page hook was saying they are finding out little easier to find workers with the companies wanted to hold onto workers. tom: how much of the huizinga dynamic is in that important sector? >> it's not as much because construction workers are all part of counties. we have seen component. it's a much bigger deal for the cpi. jonathan: did you read the beige book? tom: with great honor. i want to get my tang zero

appear i read the orange book. marone got so angry about the beige book he invented the orange book. jonathan: what a legend. he will be missed. mike, you have to stick with us. we are about five minutes away from the jobs report. 37441 if you are familiar with the #can do an estimate for the headline number which is 203,000. the payrolls report up next. ♪

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jonathan: payrolls report, 24 seconds away basically unchanged done a 10th of a percent on the s&p 500. bond yields a little higher. yields up by around two basis points to 3.73. up to 448. the number we are looking at somewhere around 200,000 the official data here is mike mckee. >> we are waiting for the data to drop your and it comes in almost on forecast. 223 thousand jobs created in the month of december according to the bureau of labor statistics which is a little better than the 203 that was anticipated.

not too far off from that. let me just see here if we have, i don't have an immediate revision yet but i will get to that. changing private payrolls 200 thousand. unemployment rate drops to 3.5% from 3.7%. that will get there attention on wall street as jack nicholson would say. earnings up 3/10 that is smaller than anticipated. full's to 4.6% from 5.1%. here come the revisions, 256 so a slight revision done in november from december again december, 223 and the unemployment rate was revised down. usually don't see this. so it looks like we still have a strong labor force here. strong labor market jobs are being created, but average

hourly earnings are dropping and that's got to make the fed a little bit happier. one thing interesting here, participation rate ticks up to 60 -- 62.3 so more people looking for jobs. jonathan: that is what we are trading on right now. wages i comingn softer. getting a little bit of a lift. if you can guess where yields are wheat you race some of the move the front and yields were a little bit higher now they are currently up by about a basis point. and other upside surprise on a headline number but it is the data elsewhere that will get the attention of many. it is the softer than expected we've grown -- wage growth. tom: standing up and down cheering. jonathan: all the gloom about

the recession it's hard to make the case. for those out there may be looking for something that might give you a little bit of an indicator of things what do you make of how it's worded? what do you make of that? >> it suggests companies did not have to work their employees harder because maybe they were adding workers. it doesn't make a huge change but it does indicate a little less net income in the economy. here is something interesting. the establishment versus household, these household numbers go up 717,000 so may be what we had been seeing in the job losses on the household site is an anomaly that has worked itself out and the two sites will come closer together. tom: i took the unemployment rate on the bloomberg, i ticket on the y-axis and the moving average across just before the pandemic 3.6 is right where the

moving cross, the moving average crosses right now. if we returned to pre-pandemic labor force, i mea you smoothed everything out are we basically back to december of 2020? >> it looks like we are getting there. then number, there were a number of people out there and i will give credit to steve stanley the idea that the labor market is tight enough and there are enough job openings that you can see the unemployment rate continue to fall. that is what is apparently happening right now. this is an interesting conundrum for the fed because they are anticipating that the jobless rates should go up so that it will reduce pressure on wages but instead the jobless rate falls. jonathan: right now we are 3.5%.

if you are just tuning in, the headline number, upside surprise people on wall street focused on the wage growth figure coming and to 2023. wages to the downside. we were looking for 3.7 that is down from a revised figure of 3.6. the participation rate a little bit higher. not a major move. that is the equity market. yields almost where they were on a tenure by about a basis point to 372 not really moving here at 446. lisa: this doesn't really clarify much. as mike digs through the numbers versus manufacturing versus services where is the weakness versus strength and how big is that bifurcation how does the fed fuses? -- view this? not clear. tom: let's go back to randall

crossan her. as lisa said massages the data within equity left in the market bonds. a little bit of curve inversion, i don't want to sell that. this is an elizabeth warren jobs report. we are employing americans. these are good numbers. we need to revisit this. why does the fed want unemployment? why do they want us to have less jobs? that is a huge confusion for our listeners and viewers. >> it is an important point to me because is not that the fed wants fewer jobs but they want to lower the wage growth. they are worried about persistent inflation, 70-80% of all the costs of our production in the u.s. is related to jobs and wages. if that is going up really fast

it can make it difficult for inflation to come down. this is the immaculate disinflation report that you are starting to get lowered wage growth, lower employment rate, high growth in jobs. as i said before this has never happened before we have been able to bring the growth of wages down in the inflation rate down without having the unemployment rate go up. this is one of the theories we are talking about that the fed is putting forward. it would love to see this happen that the wage rate growth comes down without a significant increase in the unemployment rate. this is one months number so let's not assume that we have a victory here. what is consistent with this optimistic view people have that maybe we can get through this without a significant recession. lisa: let's see -- say this is

what we were talking about how many does it take for the fed to adjust given the balance of risks that this is not actually an accurate picture and that inflation is still trying and that the labor market is too strong for the fed's wishes. >> they are going to continue to buy insurance. they're not going to say the inflation is going down just like over all, britain. they're not going to say that at all. they're going to continue to raise rates at the end of the month likely continue to do that in march. but maybe 25 basis points rather than 50. i think that's where it's going to be but these are going to be buying inflation because this is new and untested hypothesis maybe it will work but they're not going to take the risk, declare victory and then the rates start to go up and then

they really have to move interest rates up because they worry about credibility. jonathan: wonderful coverage from you, as always. the university of chicago and the federal reserve, we hear from sherman alex next week. tom: i believe so. >> i think it will be a little longer than eight minutes. you've got the attentional between -- attention between the low unemployment rate. former goalie for surveillance hockey team points out there was -- it did fall again but it just shows that wage pressure seems to be using at a time when the unemployment rate is falling which is kind of not what you would expect. this raises the debate and those of you at the trading desk can answer it, 25 or 50? jonathan: that is depending on

cpi next week. lisa: this report increase the chance that the fed would go 25 basis points at a number of consecutive meetings i thought that was fascinating because the balance of risks, they want to buy insurance in his words. jonathan: the tenure now up by three basis points. the two you're not doing much. and of those payrolls reports worth people are working out what to do with this. coming up in the next hour labors equity market at 9:45 eastern. tom: i want to hear from michael collins. lisa: i think it's a great match. it's going to be fascinating to hear. tom: your head has to be spinning. jonathan: not a doubt. i'm going to run before you offend anyone else.

tom: i think it's a conundrum. did you say the word, michael, conundrum? >> a different conundrum, though. tom: futures up 15. right now jeff rosenberg joins us, part polio manager at black rock think you for joining us this morning. i want to ask you the question i was going to ask the professor but i will go to professor jeff rosenberg and that is can you substitute a duration or a stasis in that policy for going up to a higher rate? can you actually get away with that? >> it depends on what we are looking at today and what it implies about inflation. today is about wage inflation and can the fed get away with a pause is really about whether they are making good on the

inflation trajectory as the market is expecting it to decline. they will pause if inflation is climbing but they aren't able to if they are achieving their objectives. just want you to comment on a second the report is mixed between the unemployment rate in the wages. as we have seen for a number of reports the payroll report has become kind of the stepchild of economic reports, relative to next week's cpi. what's important here is what can we look through into this report as to what it says about inflation? obviously, the headline on that is average hourly earnings and that is a little bit positive that i want to size up the report the big expectation is you have this persistent expectation that goods deflation is going to deflate one thing

out of the report that i think is interesting to highlight is that if you look at the goods component, wholesale trade, retail, transportation, those are up a total of 26 k in terms of the monthly payroll games. that is a significant change relative to the pace of about a three much average. if you look through and squint a little bit it is worth noting that this is a little bit of a different story that we've had an expectation that the good side is deflating. it tells you a little bit of a different story that move you are seeing signs of life in the goods. we see that into next week's cpi report. it's going to be a big change relative to market and that's one of the interesting takeaways from today's payroll report. lisa: people don't to nuance well especially after on to the

fence for so long. as you push through the nuances of the data what do you do? how does it shift what you actually do with the markets which you buy, what your thesis is for 2023. >> this is the thesis for the market consensus. goods deflation is supporting the peak inflation expectations. really feeds in to the market, the bond market expectation that the fed can pivot says he have the tension on the services. to take on the headline you get a little bit of support for that because you see average hourly earnings coming down but this is still a strong labor report, still a strong labor market and we are not yet seeing a significant tightening in labor markets from this significant markets in interest rates. it may also point to a lack of sensitivity outfit obvious candidates. lisa: i am looking at the market

reaction and you can see yields significantly lower on the front end. down to 4.4% it's nothing to write home about considering some of the volatility we have seen but would you lean against this? it's nothing more particularly than shocking to go against her people think in terms of a hawkish fed and if they're going to hold rates at 5%. >> i don't think you can read too much in today's report as i said it's mixed it's got a little bit of everything or else it would've been something for every point of view. i think you stare really closely at some of the data there is a suggestion here that the consensus view on the good side may be mind a little bit. i wouldn't read too much into that. i think they are a mixed message. >> if you are joining us joe wiebe rosenberg with this. we continue with a look at the

market futures up to 47 it is a better equity market off the report. a bit of distant version in the two tents spread we are in. lesson version here seen by the report, michael mckee calls it a conundrum. jeff rosenberg, how do you allocate here the hallmark of what we seen over the last two days on surveillance in conversation is everyone extending out there view? everybody is reaching out. how do you allocate a portfolio given off the uncertainty right now where the safety may be to just take a stasis back, out in 2023. >> there is a lot of sort of false changing in positions that associated with euro head

outlooks in terms of the calendar. we have not changed much in the terms of the married to four we left off last year. this is a market that is split between soft landing and hard landing scenarios where the consensus expectations around declining inflation leads the ability for the fed to pivot and what's interesting what we saw earlier this week is the tension it creates what this financial condition component of policy transmission. the fed wanting to push back i think that means for polio positioning you're going to take with the market -- market gives you. what the market is giving you right now is an inverted yield curve your breast -- your best around the clarity of soft and hard landing consensus views

around inflation being realized stood to get validated in the data. tom: the bloomberg financial conditions, i'm watching the number one statistic negative .20. it's going away from where chairman powell wants to be to accommodate estate. interest rate strategist for brevard intelligence. what does this report validate? i'm going to call this a good report but what does this good report due to validate your outlook for 2023? >> i do think it is showing we are seeing at least a little bit of moderation in the labor ache -- income growth. when i look at aggregate labor income i look at the total number of jobs times the weekly earnings and that is spawned quite significantly. it is not just over a little 6%

now in year and basis and as long as it keeps coming down the fed is probably nearing the end of its interest rate hikes. we put in our monthly we thought the fed was only going to go 25 basis points because they are in calibration mode. that means we have seen the peak in almost only -- most years so a continuing of this trend i think the fed will be happy. lisa: you think we have seen peak yields on the front and despite the fact that an increased number of people are saying the fed is going to have to shock the market into cooperating. >> it depends, when you look at the front end i am talking about further out the curve. even if the fed goes to say 5.5% then fair value for a two year yield is actually only about 4.6%.

it's not that crazy, particularly since the higher the fed goes the more likely the market is going to brace for deeper cuts very late this year and into 2024 so as we get the fed pushing against the slowing economy were going to see a deeper, the expectations for deeper cuts and that's going to keep most of the yield curve, if not as inverted as it was certainly yields that are at these levels are maybe even a lot lower. lisa: i have been struggling with this idea that we got above expectation. there are signs every inflation, signs there is resilience. is that enough for the federal reserve to back away? do you think it is possible despite the rhetoric? >> i don't think things will rip at this point the fed has quite a while someone said yesterday when they looked at futures and they sit on my gut the rates are so high.

they are only high in the last decade not given hat -- how our careers were prepared. i think it is in calibration mode even if they only have 25 basis points in january it doesn't mean the can't go to 6% it just might take them in another six weeks or three months in order to get there. so really they are trying to calibrate because jay powell has mentioned they don't want to hike too much but the problem is they don't know where the final numbers should really be in order for equilibrium. as you mentioned financial conditions you will see financial conditions have eased but they have also eased from the last couple of months. the are still much tighter than they were. tom: we look forward to that after the jobs report.

he sits here, lisa, you bring him in because i'm in the glow of watching the mckee magic. lisa: this is the most interesting part. tom: even marty wash doesn't have the spreadsheets. lisa: before we get to mike i want to give you a sense that the nasdaq right now is that more than 1% in premarket trading. you can see trade slower. this is a market that is basing the idea which is the immaculate disinflation. this idea that the fed could after 25 basis points you have been looking through all of the details of the report what is the divergence between services, between manufacturing what is the underlying belly of this report selling you? >> i was plugging in the numbers for the changes and services wages actually come in lower

than the increase in goods producing world. it was only a 310 scheme for service producing so maybe what we are seeing is a kind of return, pre-pandemic trends? >> is there anything seasonally that could have something to do with this in terms of people not getting new jobs in this latest report or changing or anything like that or is this just really a clean rate? >> hiring has changed a lot but we did see retail jobs added this month but they perceived tracked it in november and that is not usually what happens. there could be some aspects to that i noticed that there is no real category that jumps out at you with a lot of jobs. we have been anticipating that. manufacturing 28,000 construction is so 8000 so even the housing is rolling over the

mortgage brokers lost 7.5 thousand here is my interesting data of the day. we know there are 440 people in washington who at this point are not getting a paycheck. they haven't been sworn in yet. tom: they keep looking for the maccarthy ankle. tom: michael mckee on radio and television. we look at the ultimate conundrum which is picking up the pieces of an equity market to forget in 2022 making her first appearance on bloomberg surveillance where people have allowed her to come in before trading season. i don't want to go economics on you right now, i want to go on what your team is thinking about into earnings season. what is the number one ministry?

>> i think is where is the margin growth going to come from later in the 2023 when we look at the consensus expectation if is pricing in a recession. earnings are now expected by the consensus to fall for three consecutive quarters overall for the s&p 500 so the consensus is getting more bearish but where they are getting a little more optimistic is getting the idea that we are in the midst of forming our popcorn on the index if that is the case we are likely to see earnings in 2024. it's a bit of a conundrum of where that is going to come from. the consensus right now, comes from tech. showing some degree of improvement as of the first quarter where is that going to come from? so i think we have, companies

are going to have a lot of questions to answer. lisa: what the rate hikes will have on specific industries thought to be very interest-rate sensitive i'm thinking of big tech you are seeing nasdaq at a pop today how long does this make sense to you or if the fed doesn't become as restrictive as some people think that it will become a wholehearted positive for the tech sector? >> at think there is a lot of conflicting twins with respect to texts. first, our view would be that tech hasn't even priced in the rate hikes that we've had let alone the rate hikes yet to come we and we look at hydration or lunch ration stops short to duration. tech is hydration sector and among the highest still trading at a standard deviation. that really flies in the face of

what we are seeing with rates currently so that's one thing to consider. the other thing to consider is the tech is the only one. until those two things it sort of square off in a much better condition i think it's going to be really difficult for a tech to perform well even as the fed pauses. if tech is still the earnings like her it's not a big case to get excited about tech. tom: you have 45 seconds you have a wonderful portfolio launched two months ago. how much did it tank in the last 60 days of the year and how are you going to pick of the pieces on your portfolio in 2023? lisa: the s&p portfolio hasn't really to flee well because it is a value-oriented portfolio with a focus on profit -- profitability as well as momentum. it has little energy exposure at

the moment. it's been a tough place to be over the last couple of months and it has a little type of exposure as well it's been invested in an area of the market that gets a little less attention. but also is less volatile, more profitable, and has significant value. it's generally designed to be a longer-term portfolio so, you know, two months time is a little rough for a benchmark but it is done. tom: long-term in your world. thank you so much. i'm going to talk this all year they have a really smart, whether you agree with that or not doesn't matter it's great to study the bloomberg intelligence m.v.p. portfolio just as a study on value. lisa, i was making a joke about this earlier i don't think we got the on bloomberg television and radio. >> banner >> up about this being the elizabeth warren jobs report. it's going to be interesting

because they don't want to signal on bloomberg television and radio. > the all clear sig for getting ahead of themselves. they are looking at an unemployment rate that rivals the levels going back to the 1960's. they are talking about even amid the strength the fact that wages are not increasing as what is possible how much do we have to see for people circuiting more optimistic about some sort of more healthy and normal they were market that's where we are people -- a solid 1.1% futures up $45. three67 points. a better statistic, less fear please stay with us through the day really going to be interesting on radio, on television, this is bloomberg surveillance.

♪ open starts now. announcer: everything you need to get set for the start of u.s. trading. this is "bloomberg: the open" with jonathan ferro. jonathan: live from new york we begin with the big issue, payrolls beat again. the job reports deliver another upside surprise. wage slowed more than believed. >> payroll. >> payroll. >> payroll. >> what can we look into this