>> there are opportunities for this rally to go longer than you would expect. >> it's a grind but i think it stays positive. >> we are not as comfortable as i think market is that the fed will get inflation under control and we will have us recession. . >> if we are going to see recession sometime this year, i don't think that's priced into the s&p 500. >> if inflation continues to fall, that's your high scenario. >> this is bloomberg surveillance. jonathan: i heard in variety

magazine that you don't like me and you were staying away for an extra day. tom: i will tear up here. it's the first time we've been together since the market went down. jonathan: your people are telling variety magazine. good morning, we are negative by 0.5%, for our audience worldwide, this is bloomberg surveillance on tv and radio. tom: just say wait and tomorrow the festivities start and it's a very important week. i think jobs day with his wage dynamics, maybe chairman powell wishes he was having this meeting next monday rather than wednesday. jonathan: you've got the data and they saved maybe we can have a pause at the march meeting. is the font -- is this the final hike of the cycle? tom: it's under debate.

i don't know what the dynamic is but what's important is the market doesn't know what the dynamic is. the press conference tomorrow will not be a small item. jonathan: the market has been ahead of the projections of the imf. this is backed up by the data out of china this morning. lisa: it's also backed up by the data of the european union where you see growth coming in better than expected but it's not active by earnings in the u.s. there is a divergent story in the currency move you've seen but with china and the euro doing really well. tom: the united kingdom is flat on their back. francis went to a positive statistic. in the last 24 hours, the idea of the brexit affect away from covid in the politics, they are a footnote.

they say the gdp slowed and was due to tottenham. it's a brexit effect. jonathan: it's more than that, we had to have tighter fiscal and monetary policy. there is a downgrade from the previous view on the imf. china is an upgrade for obvious reasons. tom: what did you observe in the united kingdom? jonathan: i did not feel recession. tom: exactly. jonathan: london is still booming. tom: when i was in paris six months ago, i said this is a slow down? jonathan: the boe is still set to hike on a thursday and europe is not out of the woods before we get excited. i look at the inflation figures from country to country and the ecb still has work to do. lisa: what kind of reopening

have we priced in? what kind of non-recession have we priced into europe and have we already gotten to the point where we priced in more than we will see? jonathan: let's look at the price action -- equity futures are down 0.5% and tomorrow is the federal reserve decision. futures are a little bit negative adding to the losses from yesterday but we are flying on the nasdaq. yields are unchanged and euro-dollar is negative. tom: i've seen this more in the media but this has gone from accommodative back to ever so slightly trending toward some fort of did some form of restriction. we've given up the whole market we've seen in england. jonathan: is that a dig? tom: that is not a day.

jonathan: i was still working. nasdaq futures are still negative. lisa: today the week begins at 8:30 a.m. the report is on the fourth quarter last year and this employment role report will give a sense of what the fed can look at in terms of inflationary pressure and then it 9:00 a.m., we get a bunch of inflation data for the month of november. how much are prices coming down for we seeing a flattening? we've been talking about how we've seen the worst, the biggest part of the slowdown in the housing market and if that's true, that tailwind is not going to be as strong as some expected. earnings continue to roll out and we just got ups which gave a worse than expected projection

going forward and the shares are dropping. after the bell, advanced micro devices and western digital. i am watching the semiconductors. the s&p followed with the others giving a negative production or a disappointing projection for the year ahead in advance micro devices and western digital will give us a view on the potential to restrict some exports to huawei. jonathan: what have you got? tom: ups, a huge earnings release. ups, capital spending on target and a 6.6% dividend increase, jonathan: and snapchat. that stock is up area tom: by look at it to do ok. jonathan: we get gm later today.

things will be interesting if we get more price cuts. lisa: the report commit yesterday falling what tesla had done, cutting some of their electric vehicle pricing. is this a price war that will go beyond the auto sector? how much does this cut into margins. tom: ford will refund part of what the people who bought the car paid. to me, that's the headline. lisa: you and elon musk? tom: can i say that on tv and radio? jonathan: we think the incoming data will be something of a the fed to pause in march, do you agree? >> i think the fed doesn't want to signal anything in that direction. they are in the process of

slowing the pace of tightening right now and they want to telegraph that they are going 25 they want to signal in the only way that they are slowing but i think it will be careful about signaling that they will pause and cut before they knows the right time. tom: how constrained is christine lagarde? how limited our her degrees in freedom of moving forward? >> i think we can see it from the inflation data so far that core inflation is dramatically above target. the ecb has its roots in the bundesbank and its inflation targeting the central bank with no dual mandate. they don't have much wiggle room, they need to go aggressive and they signal that they are on pace of 50 and the fed is slowing and will continue to go at 50 and that could be for the next two or three meetings.

then they will take the rate in europe at restrictive territory. lisa: how much do you price and the downturn you could see as a result of a tighter ecb policy as well as some of the more negative measures coming in, revealing themselves more directly? >> it's been a very interesting situation around growth in europe area we've done incredible business from the effects of tightening but we have had barely negative gdp. now the prices are lower including natural gas prices. it's essentially back to before the ukraine invasion. there is a number of the tail risk factors that we are concerned about that have receded. we obviously have monetary tightening in the pipeline but some of the other factors are

abating and we have the china reopening and some -- and that will affect some european exports. the inflation picture is very clear but the growth picture is not as negative as it was for five months ago. jonathan: what does the positioning story look like? >> there is a focus on china reopening and rightly so. last couple of sessions, some of the trades involving china are looking wobbly. one thing that's amazing is the emerging market's picture regardless of what the s&p does on a day to day basis up or down is trading quite resilient and that's evidence this emerging-market trade is potentially something that has legs. that hasn't been evident but it

starts to get going, that could go on for sustained time. jonathan: can you tell me about white that could be? let's take a stock like alibaba which is up by 60%. many people say the reopening story is happening but it has been happening so what can make this more durable? >> when we scan around the world, we tend to look at china and china ex, the other emerging markets. then we can see places like mexico, brazil trades on its own so it's not all about china. also taiwan put emerging markets is the whole spectrum and we have more than a decade of bearish sentiment on em and we can see that investors are

getting back intoem trades, fixed income and equity for the first time in multiple years. when we look at the levels of exposure, they are still low. we could have momentum going on for a long time. jonathan: this was great and it's good to catch up. it was get long international to start the year and it delivered. the nasdaq rallied from about 9% from the month of june. tom: where we -- where will we be in the next 48 hours or friday? jonathan: payroll is coming up friday and the federal reserve tomorrow in a ton of data in earnings in between. live from new york, this is bloomberg. ♪ lisa: keeping up-to-date with news from around the world with the first word. for the first time in a year, the international monetary fund has raised its global economic

growth outlook. it says the world's best mystic product will only expand 2.9% this year which is slightly higher than the october forecast. the out what was boost to because resilient u.s. demand and the reopening of china. the euro zone is on track to avoid a recession. the regions economy grew by 0.1% in the final quarter despite double digit inflation. output in germany and spain shrank but french and spain desperate france and spain recorded expansions. president biden says he won't send 16 fighter jets to ukraine. military officials have been pushing saying they would give an immense advantage on the battlefield and ukraine is asking for surface to air missiles. ups recorded -- ubs recorded estimates that were profitable. they will buy back shares this year and rising interest rates help them overcome a slump in

trading fees and transaction income at wealth management business. asia's richest man has completed his flagship companies 2.5 billion dollars share sale. investors had placed orders for about 100% of the total shares on offer before the end of the trading day. the stocks have tumbled since being hit with allegations of fraud. 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'm lisa mateo. this is bloomberg. ♪

>> we may have peaked on inflation but it doesn't mean the central banks will not further increase rates. i think they are very clear in terms of what they want to achieve. they really want to get the structural inflation down and that could come along with a real deceleration of growth. jonathan: the ubs ceo they are. let's touch base with the price action briefly.

equity futures are negative a half of 1% on the s&p 500. a sizable gain of the s&p 500 like 4.5%. yields are unchanged on the 10 year. euro-dollar $1.08 and spanish cpi came in hot. german cpi was delayed. why is it delayed? i'm shrugging my shoulders. lisa: if you look at the prices paid index on some of the data that is come through for germany, it's coming hotter than people expected so we are seeing upside surprise on the heels of energy prices that are starting to climb again but it doesn't matter. jonathan: 50 basis points after christine lagarde, do we get a repeat of their last meeting? tom: do they have the nominal

gdp to a for that confidence on monetary policy? no one really knows but i agree that if you have a hydrocarbon rebound, that changes all of the mathematics. jonathan: also the china story and the emf was clear about that. there is so much we don't know about the china factor on the demand side and what it means for inflation. tom: i was drinking my first glass of tank and i looked at 24 months of the chinese estimate. it was 3% growth area that's not good enough for the leadership in beijing. they have to do better and they will do a bite saving the real estate market. the next worry is real estate. lisa: i don't know what's going to happen.

tom: always ready to go? jonathan: just waiting for you. tom: manus cranny is with us. it's about moving from ubs at 45 . there is the train going by. can you hear me? and they go the other way. >> i can hear you, good morning. tom: cut to the chase, is this a jump condition for ubs? can they not be incremental but can they really jump up given wealth management and the angst of credit suisse? >> you try to dig into these numbers and its big deposits into the swiss bank ubs, about $8 billion so we don't know

whether it's a flow of money -- you woke up and you arrive here at ubs. i think that's a moderate distraction. the flow of money in times of angst, that's time in memorial not breaking ubs. the clients are still cautious and they are not convinced. it went from 370 down to 105. this is not risk on market and the clients are not get lee convinced. they are in cautious mode and that does not deliver conviction. tom: what is the ubs distinction? it's a blended alert going back to painewebber. what is the ubs distinction

versus other european banks? >> they have synthesized investment banking to behave as the dog on the lease to defeat wealth management. they might smack me but what they have done in the past 12 years is they have created a machine that feeds the beast. the investment banking flow feeds the wealth management. those products created within investment banking, there -- they are so much more sophisticated than they were 12 years ago and that investment bank fees into wealth management which is it dramatic shift. that's why the market cap is $72 billion. they need to reinvent themselves in the way this bank has done.

jonathan: did you notice he is in front of credit suisse? thank you for that. what happened to the nice shot we used to have down by the river? tom: i remember when there was the ferro junket. jonathan: i would always scratch my head afterwards. you have this really wealthy country and every week you would go and loads of people got loaded -- loads of money and then the central bank freaked out about where the currency was. i just never understood that. they get inflation up in the currency weaker when the economy was so wealthy. tom: they look at a worldwide search of where to move and they said we are moving the shop to zurich. lisa: why not just be happy?

just enjoy yourself and go skiing, it's gorgeous and you guys have perfect infrastructure and it's beautiful. jonathan: what we really needed was negative interest rates. tom: too tight into this week, i believe this was national bank has a large holding of apple. jonathan: how bizarre the last 10 years have an? the fact that they were building up a portfolio of u.s. equities to weaken the currency domestically. you could take any given tech name and go down the line. tom: on our way to davos next year, we can do a remote. lisa: the bigger suggestion is the asset price inflation over all of this time and this flight to quality and how the swiss national bank was the ultimate quality which suppressed inflation and created the wealth with amazing flows and didn't know what to do with the money.

are we going to drain that money or is it still there waiting to do something? tom: don't hit your mic stand. lisa: i can't help it. tom: thank you. i think it's a unique experiment but it comes to flows and part of that will be before the inflation-disinflation dynamic with a rebounding china. we haven't even talked about japan. jonathan: let's talk about japan. one more week to go and then they had for the exit. tom: we can do their team coverage in tokyo on the way to the spring meeting of the imf but at the imf, they will be interested in what the bank of japan is doing. you can help me in washington.

the worst part of tokyo to washington is the last 30 miles to -- from dulles. it's just clumsy. jfk is a certain agony. dulles, you are not stuck in traffic but it's clumsy. jonathan: the airport has gone from like the worst -- lisa: did you see that -- the fountains that change shape? you don't even look at it? jonathan: i don't have to look at it to see it. live from new york, i'm pleased the clock is done, this is bloomberg. ♪ i know some consultants with great ideas. can they help us improve our digital experience? absolutely. they've invested over $2 billion in tech.

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jonathan: where did the first month of the year go? just like that, what a rally we have seen over the last four weeks. equity futures this morning look like this -- s&p 500 down by half of 1% and the nasdaq is down. we add to the losses this morning but we are up 8-9%, why to move. in the bond market, 442 on the two-year and we came back down to like 423 and it kind of

stabilized over the last couple of weeks. yields are unchanged this morning so let's get numbers from gm. lisa: we are seeing them beat expectations across the board. $2.12 versus $1.67, talking about net sales coming in above expectations with revenue coming in pretty much in line. this will be interesting in light of the price war and what kind of guidance to they give it a time when you are seeing the likes of ford follow tesla, cutting rises? will they have to do the same thing with their electric vehicles? jonathan: if i go by general motors to date, if i make that call, why would i do that today? lisa: maybe gm will do it as well.

jonathan: am i going to take that risk? lisa: are we creating a downwards viral with price pressure when they start to see there is some sort of willingness to cut prices after so many years of price hikes? tom: isn't there a huge demand for these vehicles? so they are cutting the price or is there a doggy ev vehicle they are trying to get rid of? lisa: i was researching this last night. the margins are so much fatter for the likes of tesla than the likes of ford and gm, something like 25% margin so when do they get greedy and start competing with chinese ev markets that have a -- and mark is that the pen essential --the potential to grow. jonathan: exxon is out as well. we were looking for 330 and we

go 340 and the numbers are pretty incredible. tom: we will dive into big oil particularly off of what we saw from chevron. we will bring you earnings away from the top four or five. this is an important interview for global wall street. he nailed it last time he was on about the lift in our sense of optimism from stewart kaiser from citigroup. what is the bet right now? kaiser was right, six, 7% bounce and up we go but is just short covering where people go whoops, i got it wrong. it springs up but there is no boom. what is the idea of having oomph ? >> you give me way too much credit.

if i had to describe the year so far, it would be something that didn't play out. you came in with low expectations in europe with single stock earnings in the data has not been negative enough to justify the low positioning coming into the year. how do you keep moving higher? you get a continuation on thursday with large-cap cap tech earnings coming through. the fed is hawkish but they are reiterating a message that the market has gotten comfortable and on friday, we don't get an average earnings number that scares us and if that happens, the market should move higher. you have to do it on a month by month basis. tom: filter in the citigroup analyst. they talk to you about the revenue dynamics. if we get disinflation, what does it do to the revenue line? >> that's the issue and that in a big challenge for the bear

case. you had positive revenue growth that cap earnings higher than expected. if revenues ease, we are focused on the margin story. that is where the debate will be front and center, it will be on the quality of that eps and whether investors are willing to pay a premium for lower elegy earnings. it's an issue but i think it's an issue we don't mind having relative to expectations. jonathan: we talk about inflation as if it's an event but it's a process and you get companies defending margins and we see that with these big tech firms. is that bullish enough for you to have a tailwind for the rest of the year? >> i think it is an investors have rewarded that to some extent people are willing to look through a quarter or two of pressure if a company can give them guidance that the margins will normalize a little bit. i think this is an effect --

expectations driven. there are such low expectations for earnings, by hook or by crook, if a company can produce the earnings, i think now that we are back russians get harder. if companies can show they are making these cost cuts and it will have a visibility into where margins will get over the next couple of quarters, i think investors will respond positively. lisa: the earnings have been great but people say the resilience is widespread with better than expected results. they haven't been, they been worse than expected the then it any time going back to 2014 with the exception of march of 2020. when do we look at the earnings and maybe see big tech's reckoning with some of the margin pressure but the rest of the universe is facing it in a more significant way that hasn't been fully priced in? >> i would go back to price

action. coming into the week, we had 250 large-cap struck -- stocks we were tracking. 150 were winners and even though the winnings aren't great, the price action is telling you that expectations were washed out enough where it didn't take much. if a company cuts numbers down to where the buy side is, that stock is clean. expect tatian's has a lot to do with it. lisa: is there a clean read on tech because how much bad news has been priced in? it's not so clean with disappointments leading to big price action? >> stock buy stock, we could find that. lisa: are they poised to do better because of how much is priced in? >> our view is that early last year, it was a valuation story on tech and stocks were very expensive and rates and inflation were higher and you got that huge valuation headwind.

third quarter earnings were different were company started to talk about cost cuts and pressure on earnings. that's why think expectations started to really ratchet lower for the tech space. our view into this quarter was not necessarily that the results would be that great. it's just that expectations were so low it put risk reward to the upside. in that combination, it doesn't take a whole lot to get the stocks moving higher. this could be a low-quality rally which we think it's been. it hasn't been the best and the brightest, but we think relative to expectations, you have to reevaluate that now that you enter february. jonathan: we talk about this rally like it's only been going on for one month. caterpillar just delivered earnings and it's the first

miss. this is been playing out for three months in the minors and caterpillar. europe has been playing out since the summer. when you hear people say things like how do i play the reopening story, what do you tell them? >> a lot of people are using options to get high pay out. then it became more of the infrastructure play. how much of a consumer spending impulse can we get out of china as they fully reopen? that starts to focus people on things like luxury brands in europe. german equities have benefited from this because they have a lot of export exposure. there is still a group of the investment community that is not comfortable owning china equity directly given the policy challenges. people are looking for the second order trade. i think it was metals and mining and things like that.

tom: in the 100 years of caterpillar, laster was one of their best years. on radio and tv, we have people stratified by this eco-fed debate and they are not in the market. how do they participate in your optimism so they can possibly enjoy caterpillars near best year in 100 years? >> from in owning stocks perspective outright, we have been focused on the hike ali stocks that you own through a recession. that's high quality stocks that are buying back their shares, don't have as much downside earnings risk so we have been pointing people in that direction. i think we are still of that view. most investors i've spoken to, even though the market has rally, they haven't changed their baseline core position which remains pretty defensive. what they been doing in this

rally is using etf's or options to add to their exposure around the edges. when you sit down with them, they are not saying my view has changed from the rally. they are still conservative and want to hold onto this portfolio and they want to risk manage around it. i think you're in a larger cap, higher elegy share buyback type story. then you are trying to adjust risk around the edges. people say they can be in credit or bonds instead of equities. jonathan: people a month ago said sit out the front half of this year. then the rally starts. lisa: now it's you missed it, it's over. jonathan: it's good to see you, thank you. we are going into a big week ahead. the federal reserve coming up wednesday and we will have special coverage tomorrow afternoon.

onto payrolls friday. in between, we get some earnings and data. tom: the data is important and there was a wonderful tweet about the s&p 500 at xp at the s&p 500? jonathan: i think that's right. tom: you take out those companies and many people would suggest -- jonathan: you take out the big players -- tom: you traded 17 times earnings at caliphate or -- at caterpillar, you have to play china. jonathan: leland miller of the china beige book international is coming up next. ♪ >> keeping you up-to-date with news from around the world with the first word, the white house will and a covid emergency declaration on may 11

at will mean the end of the controversial title 42 policy that has expanded expulsion powers in a quarter of the u.s. and mexico. the emergency declaration also allowed millions of american special access to medicaid, program that provides health care to low income people. in china, manufacturing and services expanded for the first time in four months. the countries reopening from covid zero and the lunar new year holiday sparks travel and spending. it's welcome news for the global economy which is cooling and is relying on china's recovery to offset risks. brexit they say is causing the british economy $124 billion a year. on the third anniversary of the split, and analysis says the effect spans everything from business investment to the ability of companies to hire workers. they estimate the u.k. economy is 4% smaller than it might've been. united parcel service forecast sales below wall street estimates.

they are struggling with a drop in volume as shoppers return to stores. conflation is cutting into spending habits. boeing will deliver its final 747 today. the jumbo jet will be turned over to atlas. more than 1500 747s were built over five decades. the plane carried more than 500 passengers and it shrank the world and to -- and the microsized air travel. 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 mateo. this is bloomberg. ♪

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and the benefits of lower inflation is helping consumers, than the china reopening which is largely a demand impulse will have an impact on commodity rices an impact on goods prices globally and it will have a reflection or impulse to the u.s. and the world economy. jonathan: that is the risk from bruce katzman. from new york city, equity futures look like this, negative and equities are a little softer and lower over the last couple of days. we are waiting the fed decision tomorrow and earnings in between and yields are unchanged. tom: it's going to be interesting to see all of that debate. it comes down to recovering the global economy we will talk about china here and i would go back to france which is doom and gloom but they gave us a positive statistic jonathan: over the last three months, will that continue? do we have to worry about this

-- about next week? lisa: that's the spirit. tom: right now cool, we're going to look at china. leland miller, cofounder and ceo of china beige book in the micro data of china. i'm confused, i've got bloomberg economics with a fabulous article out today. they are saying we are looking at up to fiveish gdp in china but institutions have a much more cautious view on this, noodling around 3%, who is right? >> this is one of the stories that will have to play out during the year. the china recovery is set up to be a nice cyclical bounce back but this could be a quarter or two or longer depending on

whether consumers jump in which is a huge if an the second if is if there is a policy report that people thank. people think the government will jump in and start stimulating was already an organic recovery. markets are skeptical of that. tom: my experience always centers around of bail out, let's call it healing real estate. will they heal real estate with cash infusions from beijing? >> they will not heal real estate what they have been doing is culling the herd and now they will ventilate the sector. they will take out the week firms without diminishing the strong firms. they are doing that but now you have the potential for contagion because the numbers have been unbelievably bad. our december data, some of the worst property results we have ever seen so they are stepping

in and providing lines and lowering mortgage rates. they want to make sure they give some oomph to the sector but it's different across the street. you have to be cautious and what this actually means. lisa: where is the money actually going? are more people getting on planes and are you seeing the flows going to commodities to travel or is it going into staples, activities in the region? >> is too early to see the trend for the entire year because you have this first month skewed by covid and skewed by the lunar new year holiday. this month, all the pops and data were around where you would expect which is travel, restaurants, hospitality. people were traveling again and moving around so you saw a big pop in that data. going forward, or consumers going to come back? there is an assumption the chinese consumers will do this

and drive a recovery, we've never seen anything like this. we will watch the data because this is not the type of pieces we have seen play out before. lisa: what is the date of pointing out in terms of fuel combustion, the idea crude and natural gas and the coal imports from australia? how depleted are they? how much is china going to have to import going forward? >> 2022 was awful. there will be a lot of things going on early this year which are going to lead to greater commodities demand. a lot of it has to do with how much policy support continues through the year. are we going to see them double down on infrastructure and other things? if you're talking about the consumer driving the recovery this year which i'm skeptical of, then you are not leaning into tons of oil demand. you will see it in jet you look there is more travel but people

are mixing their investments because they are all this on the china recovery. that doesn't mean there will be a jump in oil demand so we have to be cautious on that. tom: does china do work from home? what it comes down to, are they back to work? with the advent of covid, our people back to work in those manufacturing plants and the ancillary businesses? are they back to work and are they taking home a paycheck? >> they are not back to work yet. the covid situation still has not calm down so maybe march. right now, they are sick or traveling for the new year. we've got to keep in mind from a year ago level, it's way down but you can't see it when you look at the pmi but things have been up from the end of last year area they are down from two

years ago some manufacturing is not seeing this superstar recovery because the pmi had an upside surprise. many factories will not drive growth this year with the economic recession looming. it has to be one good -- it happens to be one good month and the data. lisa: what about the reprising of the animosity that u.s. politicians have toward china and the potential ban of exporting supplies to huawei, how much is that play into your theory? >> i don't think it plays in much. a lot of people read into this and say things must be getting better. it's good that tensions have calmed down. this does not mean we are heading in one direction in terms of tighter export controls

and more tense policy back and forth. this hasn't changed our outlook area people have to understand that the relationship will get more brought over time this is another headwind for the economies of both countries. jonathan: we've got a lot to talk about for the year ahead, leland miller, the latest data out of china. the date it was pretty ugly, to be fair. lisa: a lot of it is because the semiconductor cycle we have seen and how you seen that widespread from the semiconductor manufacturers. they just have a glut of chips and that said, china needs the reliance on taiwan and everyone needs those chips in terms of some sort of national security. how much is this a momentary cyclical blip versus something more substantial? jonathan: the next two months is really difficult to call. you've got people saying the fed story only works if the economy slows down but i don't see it on the others, these are bright

people with completely different views and what the fed will be in march. they are talking about a pause at the march meeting. tom: that's the smartest summation i've seen in ages. sitting in the chair next to me are people who say the path is under 4% inflation. maybe under 3%. no one has a framework right now of what 2.8% or 3.2 means to our markets or our lives or our future performance across nations. no one is ready for that massive stochastic move lower in inflation. jonathan: we talked about this yesterday, most important line was wells fargo when they talked about the final mile, from 4% to

what end do we get stuck there? tom: it's a set of different meetings with polarities. it comes down to whichever inflation number you want to look at. does it come down with housing being the dormant mystery for the american people? the three of us are completely biased in new york. jonathan: and does china confuse things all over again? can you make a global call on the economy for the next 12 months? i have no idea. tom: bloomberg economics says 5% plus. leland miller says they do better and then pull back. i don't know. jonathan: do you want to do research now? you are ahead of me on that one.

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>> there are opportunities for the rally to go longer than you would expect. >> it is a grind. i think it stays positive. >> we are not as comfortable as the market is. they will get inflation under control. we will have a recession. >> if we are going to see a recession this year, i don't think that is priced into the s&p at all. >> if inflation continues to fall, there is a hike and pause

in a march scenario. >> this is "bloomberg surveillance." jonathan: what time do fed officials get out of bed down in washington? >> 8:30. ritika: you can control them now. tom: get the kids off to school. jonathan: the first is in about 45 minutes. say what you want until 7:45. good morning, good morning for our audience worldwide. the fed meeting begins in the next couple of hours when they get out of bed and get ready. chairman powell and the news conference. payrolls on friday and a ton of earnings this morning. tom: the summary here is margin dynamics for apple and the rest, amazon, and their recover story. watch wage dynamics out of the jobs report. the eci report is important as well. that includes benefit. jonathan: the chinese data a little earlier this morning. upside surprise?

all the kind of stuff we expect in the imf -- and the imf play catch up. lisa: what has been priced in? we have seen this over the past three months. we have seen a rally gain steam in certain areas tied to the reopening trade. happy priced in mormon -- have we priced in more momentum? what is the fed funds rate we are talking about? what is the new normal when it comes to inflation to expect where we expect valuations. jonathan: they are saying five. some people saying tomorrow the hike might be the last one. tom: i'm sorry. it is dated ex post. mcdonald's is trading 3% under a record high. 3% up and they had a record

high. they have done 12.7% over the last 10 years. your. -- per year. just terrible. jonathan: he is not being sarcastic. i will share the numbers with the audience. sales for the fourth quarter of 12.6%. the estimate plus 8%. lisa: came in much better than expected. sales came in better than expected but so did earnings. sales revenue much more -- much better than expected where earnings-per-share not as much but still beating. margin compression on the margins but sales are so strong. tom: they are up 29% per year from the bottom of the pandemic. i was there four times a week. terrible. jonathan: you are dripping with sarcasm this morning. tom: i want a victory lap here. corporations adjust. that is what is going on. ok, fine.

jonathan: they adjust and adapt. is that the victory love? lisa: he said give me a victory lap. tom: this is mcdonald's. it is terrible what they are doing. i think we should all have lunch there. jonathan: you guys celebrate. good morning to you. equity futures negative. softer on the nasdaq. the biggest one-day loss of the year so far. in the bond market, not doing much. euro-dollar, 108.35. lisa: today will be interesting. we have been celebrating what will happen later the week. we get that employment cost index for the fourth quarter. typically this comes in hotter than what we have seen on the wage increases. how much are we seeing a deceleration for how much the expenses for employees is going up here on year? the earnings we keep getting,

the costs are going up. caterpillar eating in the margins because of that. 9:00 a.m., the s&p corelogic price data for the month of november. how much pain have we already seen priced into the housing market? how much is plateauing? you are getting a sense perhaps the worst is in. if that is the case, it does not do much to ameliorate some of the inflationary pressures the fed would like to see abate. we have talked about the earnings. they are probably some of the most important data points. as we have in talking about, i donald, caterpillar, gm. it is not a clear picture coming out. you are seeing margin compression at caterpillar but gm is crushing it. jonathan: snap of 24% year-to-date. -- up 24% year-to-date. that is like four weeks in a couple of days. tom: snap on tools will do

great. jonathan: i'm not buying. you know what i was talking about. is this the real deal? the rally we are seeing, is this the real deal? something you want to buy and hold? ananya: good question. the thing with bear market rallies, real or not, we don't know except in hindsight. there has been data parsing done on this. here is what i will say, the world is in a much better place than it was four or five month ago. a lot of the apocalyptic scenarios have gone out the window. valuations have come in tremendously. specifically with tech we are looking at two divergent buckets. one are good companies that have good business models, high-value, copious free cash flow machines. there's a lot of cyclical headwinds. you have to work through estimates, etc.

arguably some valuations where you are paid to take the risk. the other bucket of tech, the biggest victim of the fed raising interest rates because they have a long-duration, that bucket is now a guilty until proven innocent. rightfully so in many cases. they have to wean themselves off the spigot of free money we have enjoyed this past many years. they are probably some babies there out with the bathwater. tom: i am fascinated, the intimidation. he wrote a brilliant essay in early january for the wall street journal. he said what if inflation suddenly dropped? how does your world change? talking about if inflation suddenly drops. ananya: inflation -- there is short-term inflation and a good sector that is dropping.

what we are waiting -- the shoe we are waiting to see drop is the tight labor market. those are the short-term pieces we will see some leeway on and that is what the market is pricing in. we are talking academia. there are a lot of structural forces that will not bring us back to 0% or almost no inflation with a flick of the fed's wand. there is deglobalization. geopolitical harmony the lead to the globalization of the past 20 years seems to be dissipating. we are underwriting a base case of inflation not going back down to the lowest it was, and that's ok. tom: what is the sum total return? can we be more enthusiastic to reach out to double-digit returns? ananya: we had this conversation on friday. the index level, nothing looks

particularly spectacular. it's an entirely different story. we have had companies that are bottleneck companies that control an important bottleneck for massive amounts of global activity. they have been solid compounder's for a long time and have structural trends that will let them do so. on a stock by stock bottoms of basis we see opportunities for strong returns. lisa: how much of the trade four tony three has already been put in? -- for 2023 has already been put in? are we done -- i don't say this -- the easy gains? jonathan: is it ever easy? lisa: let's move on. ananya: if you look stock by stock with active investors, the easy gains are not done. lots of companies are creating

valuations where they are priced for the apocalypse. europe, six month ago people thought they would run out of gas. they were pricing in a scenario for they would have to stop. that has unwound. you have seen this this quarter. a lot of that is still left to come. stock by stock, not index levels. the thing about the fed raising interest rates that is unheralded and unsung is it reduces competitive intensity. a lot of companies had ankle biters in their sectors that have benefited from the money and have slowed the pace of things. we think companies will rebound structurally stronger from this. jonathan: you called them disruptors. disruption. it is like the buzz word for 10 years. tom: you have to have 10 years of harvard and yale to say ankle biters. jonathan: you are ankle biters. tom: there's a massive shift

here. people forget. this is important. people forget what it was like to have a real interest rate regime affecting everybody at every moment in society. jonathan: so many people think we are one rate cut away. tom: i'm very curious of your belief it is different this time for international. there has been so many failures of the international enthusiasm. is it different this time because of the yield shift? ananya: what i will say is, i take your point on the next level. i'm talking about the building index level that is always different. some of the best performers of the past five years, most of the nasdaq and that's unfair with what they have been through, have been international companies. there are companies in europe, and health care, and semiconductors, etc., that have a stranglehold on economic

activity and they are getting bigger and better and it's been reflected in the share prices. jonathan: this is great. ananya lodaya of invesco, thank you. up next, we will talk to norway's wealth fund, the head of the fund. tom: what a different view. jonathan: we have been down 15% on stocks over there. that was equal to $164 billion worth of losses at of a one-point trillion dollar fund. tom: it is index performance. i thought they did pretty well versus people that were cratered. lisa: their mandate is to track the index. where you hide if you are benchmarked and it will have a potential -- jonathan: are you trying to cause trouble? the ceo of norway's wealth fund joins us next. ♪

lisa: for the first time many years the international monetary fund has raised its global economic growth outlook. the world's gross domestic product will probably expand 2.9% this year, .2% higher than the october forecast. the alec was boosted because of resilient u.s. demand and the reopening of china. the eurozone is on track to avoid a recession. the region's economy grew by 1/10 of 1% in the final quarter despite double-digit inflation and russia's invasion of ukraine. output in germany and spain shrank but france and spain recorded expansions. the u.s. and south korea plan to step up the scale of military exercises that have angered north korea's kim jong-un. the jewels have been scaled down or halted under former president trump. in the past north korea responded to the drills with threats and weapons tests. shares of exxon mobil are falling.

the full year profit was $59.1 billion. fourth quarter earnings beat estimates. revenue came up short. exxon announced additional share buybacks. the company kept its quarterly dividend at $.91 per share. earnings at caterpillar missed estimates for the first time since 2020. rising costs hurt the maker of the iconic yellow bulldozers. caterpillar is seen as a bellwether for the broader economy since his machinery is key for the construction, mining and energy sectors. 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 mateo and this is bloomberg. ♪

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>> the worry is with core inflation. energy and food prices are typically more volatile. this core inflation measures have shown more persistence and not pete yet in many countries. they are still far away from target. the job is not done. jonathan: that was the imf chief economist. how many times have you heard that phrase, the job is not done. from christine lagarde, from the bank of england, from chair powell. all three making decisions in the next 48 hours. the imf sees a turning point in

the global economy. the market has seen that in the last three months. what a rally to start the year. equity futures down to 31%. still above -- one third of 1%. still up on the nasdaq from the closed yesterday. up something like 8% to 9% to date. tom: it is wrapped around the mathematics of indices and the mathematics of what to do for it coming out of the pandemic. it's scope and scale, maybe no one has elected norway sovereign wealth fund, the largest bank investment. the manager is with us, nicolai tangen. when he speaks all of europe listens, all the global community listens as well. i think the headlines are wrong. they don't mention the scale. you lose $50 billion, $100 billion, who's counting? they don't understand the mass. given the size of investment you

manage, how do you move the needle for 2023. -- 2023? nicolai: we are relatively indexed. that is the main thing given to us by the ministry. we try to tweak out some excess performance. that will be what we did last year. we had more than $100 billion in excess returns. tom: on sector basis, how do you move given how tight it is given to an index you look at? what micro decisions can you make to recover and maybe go in excess of an index return? nicolai: last year we were overweight the integrated energy companies, which did well. we were underweight with ipo's. the market seem really frothy and 2021 -- in 2021.

a lot of those did badly last year and that saved us as well. lisa: you talked about being defensive. what is that mean? nicolai: 2023 is more difficult to call. coming into 2022, we had a careful stance. less extreme situations to look at going into 2023. we are more equal weight generally. it is a tough market to call. lisa: is there pressure and no to shift the mandate away from being so closely tied to the index? subject to the flows of the macro world? moving into private assets, private equity or real estate and expand the bucket you already have? nicolai: i think it's important for a large fund to be quite indexed. if you are too far away from the index and you make big mistakes, losses will be so big that nobody will keep the job.

it needs to be anchored with politicians and in the parliament. lisa: what are you preparing the residents of norway for in terms of returns? nicolai: i think it's important to make sure everybody understands we will not have a repeat of the last 25 years. rates were coming down. globalization was going really well. we are now in a very difficult -- different situation. reversal of globalization. rates have moved up. it is unclear where they are going from here. returns going forward will be different. tom: i'm honored to ask this question given your hedge fund expertise and moving on to serving norway with a huge challenge of jillions of dollars of money. what do you think of america's fixation on windfall profit taxes? does american hydrocarbons need

to be more like what i read about in european hydrocarbons? what you think of a windfall profits tax? nicolai: the one thing i have learned in this job is i'm not supposed to have any political views whatsoever. i think it will pass that question on to somebody more clever than myself. tom: he is a pro. jonathan: very media trained. tom: he did not touch that one at all. i will look at what we do forward here. if it is just an index fund and participate. talk to work sh -- talk to were people who did participate in the bounce up in january. we make a joke about the triple leveraged all-cash fund. how do people scared stiff participate in an index return level? nicolai: i think the very big question, the trillion dollar question is what will happen to global inflation when china really comes back on stream and

they started to consume the way they have done in the past and so on. will that drive raw material prices? will that impact inflation and the rest of the world so that the tightening will continue, perhaps even exhilarate? that is the biggest risk to equity markets. the market does not expect that. if that happens, we will have a big letdown. lisa: there's a question about simplification. the norwegian sovereign wealth fund is talking about reducing the number of companies is investing in. why is that important and simplicity a main goal for you? nicolai: for the moment we own 9000 companies around the world. we own 1.5% of all the companies in the world. 9000 companies. the one thing you can be sure about when you own 9000 companies, if something goes wrong anywhere the world, you own it. t go from -- to go from

9000 to 6000 will be great. minimal effect on returns but reduces the complexity in the organization. jonathan: i want to end on the major question. inflation and potential that inflation is sticking. the big losses last year were not just equity down. do you have any degree of confidence this year the more intuitive relationship with think bonds and equities reestablishes itself? nicolai: it is more likely to reestablish when rates are higher. we came in the last year with a return on the portfolio of 1%. we ended at 4.1%. that normal relationship is much were likely to hold this year than it was last year. jonathan: his sticky inflation of threat to that? nicolai: yes, it is. i think sticky inflation is one of the big threats we have here. it is certainly a known unknown.

the financial crisis, the meltdown of the nuclear situation in japan, covid. things you have never seen before, that is the real risk. jonathan: is that what you were discussing around a table that people are not discussing enough? nicolai: the really scary stuff is the stuff you have not thought about. tom: nicolai tangen, thank you, sir. sticky inflation. andrew boll said this last we get pimco. if we stay at about 4% to 5%, you have a problem. the thing that haunted many is we have losses on equities and bonds. tom: back to 1974, although back to 1788. not to be critical put on a relative basis it is underplayed how well norway did last year. is it a homerun?

no. jonathan: bonds are equities? -- four equities? -- or equities? tom: for them to perform and come in negative, look at everyone else's portfolio. jonathan: leon almost everything. the big decision for them is risk. lisa: they will try to cut some of that potential risk they might not know of the weather 9000 they currently own. jonathan: losses equal to 106 he $4 billion. the fund, $1.3 trillion. coming up, mike schumacher from wells fargo. that's all coming up going in the payrolls on friday. this is bloomberg. ♪

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jonathan: the week begins tomorrow. the two-day meeting for the fed reserve begins later this morning. equity futures bit softer. equities yesterday a lot lower. this morning on the nasdaq 100, -.4%. here's the shape of the bond market. i have to say the least able on the 10-year, two-year, in and around 350.

yields untrained -- unchanged. went to finish on the euro-dollar. looking for a 50 basis point hike. 108.38. inflation in spain still invaded -- elevated. tom: it is the parlor game and it has played out over there differently than here. i think england is being ignored. i don't know if there is a parlor game in japan but they will blink. great uncertainty waiting for data. jonathan: governor koroda. what would your preference be? the previous governor set policy on any path or handed over the mess of the balance sheet? tom: to listen to the political landscape in japan as they

confront for the first time in generations tangible inflation. far more than anything we are feeling. jonathan: all that coming up in the next month. lisa: we have earnings through out the morning and throughout the weekend last week. i find these earnings completely fascinating. pfizer came out. we don't really talk about the pharmaceutical sector that much. revenues are going down significantly for covid related vaccines. covid related remedies. this really raises the question of what risk we have going forward if people are not getting different boosters. we can get into the controversy around the bivalent, covalent, trivalent. a sign of the times. shares lower by 3% ahead of the open. ups shares of about 2%. this is a story of steady margins, of cost-cutting. there are actual revenues that came in lower than the street expected. they are giving cost-cutting enough to bring operating profit margins up the on the

expectations. how much of this be the story of the winners of this year? mcdonald's shares lower by 2%. they be desperate t -- they beat expectations across the board but those shares have underperformed significantly. how much of this has been priced in? last year mcdonald's was a massive outperformer versus the overall massive declines we have seen. i want to end on gm. we will speak with the chief financial officer and a moment, paul jacobson, about what they delivered. those shares surging on most 5% after delivering beats across the board. what is the backdrops? jonathan: can i get a cheaper hummer? lisa: you strike me as a hummer person. is that your goal? jonathan: hoosier is a hummer? -- who drives a hummer? tom: john tucker.

at five dollars a gallon, i believe he put it in the garage. through three or four months. lisa: is it electric? jonathan: he lives on the beach. tom: i don't think he can get one. with bloomberg radio, john tucker is so magnificent. jonathan: that will be the first question. do we get price cuts? the federal reserve racing, leaving investors bracing for a downshift. mike schumacher says the following, a stronger dollar around the fed announcement. any hawkish coming from powell along the lines of we will keep rates-extended period might be met with indifference from markets unless the data surprise meaningfully to the upside. we get that data a little later. tom: i'm a big liver and the eci data. dick fuld and wages and benefits and has some sophistication to it compared to average hourly earnings.

mr. schumacher joins us now. eci data brings a 10-year out of the doldrums. you think of both of the equator staying flat in the water. the real yield. where is the real yield in a year? i need an actual wells fargo bet. mike: real yield, 150 to 175, something like that. is having a tough time getting over 1.25. the fed wants to see real yield higher to make sure inflation is down and stays down for a while. 150 plus at the end of the year. tom: my study that is normal ages ago was to present, 2.05%.

i will let you give me a better number. what are the ramifications in the cycle of real yield only gets halfway there? it is just not going to go to the fear levels people are talking about. mike: i agree. going back 20 plus years, 2% + reals was -- on reals was typical. you have central banks active in the fund market. the fed and other central banks own so many ponds, they distorted that relationship and brought yields down. that's a secular decline. pushing reals up to 150, 175 is still low. much tighter than the last time around. lisa: what is going to push 10-year yield higher? mike: a couple of things. actual rate hikes out of the fed. the fed will do the usual stuff. powell will talk about not switching quickly to easy mode

but the market has heard that time and time again consistently since jackson home. they turned that out. you get a rate hike this weekend in march, the fed is actually serious about pushing rates up a little more. by the way, it is not so likely to switch into easy mode. having the economy not rollover quickly gives a bit more of a boost. it is more fed with tangible activities and rate hikes combined with economic data that shows a bit of weakness but not a real collapse anytime soon. lisa: here is the conundrum for people that look at weakness as a reason to pilot the bonds, already moving into a scenario where it is the opposite on an ongoing basis where people move away from bonds as a sign of weakness even though that could mean recession, lower inflation, and a haven trade is back on? mike: i think it boils down to the inflation call. interesting question you posed to the last guest from norway. in our view if inflation stays

high, you probably have correlations that are out of whack. if inflation drops down a bit, you get people really reasserting the typical relationship with bonds being a safe haven if equities suffer. probably a couple of months out from making a good judgment on that. tom: what will you listen for the press conference? i have to look it up. i don't have the dates mentioned. march 22 and may 3. how you listen to the press conference tomorrow, mike schumacher, trying to frame of the guesstimates of the next two meetings? mike: if i some odd chance powell is specific in terms of framing potential rate moves in march, that will be huge. i suspect we are not going to get that much out of the press conference. frankly, the more interesting meeting is the ecb. the market is so two for a hawkish response.

the ecb has been clear it will be going 50 -- not this type of potentially going forward. we are skeptical about that. we think that is unlikely. the more interesting action will be the ecb, less on the fed data. tom: the daily trauma of those headlines. does europe have the umph to enjoy a higher rate regime? mike: not really. if you think about the european economy in the last 10 to 15 years it has been characterized by low growth. italy has had no growth in 20 years. does that switch of the war ends? no. if europe figures out a way out of the logos environment, i doubt it. ignoring every thing else, you expect policy rates to be higher in the u.s. and probably the u.k. and continental europe. it will be a while before that happens. the meeting concern for the ecb is what do we do about this inflation thing we have ignored for a long time? now we have to fight it.

it has more volatility. as far as long-term, no. the european economy will not grow like the u.s. or most others. lisa: earlier in the show tom told me i skipped the lead and buried the lead when i talked about the imf and what they came out with. just really shunned the united kingdom and how difficult that situation is. why do you hate on the pound and what will happen in that economy? mike: frankly, lisa, the u.k. has some of the difficulties right now. inflation, yes. the war, sure. commodity prices are tough. you have brexit ain't over. the u.k. has a huge political problem. the bank of england is looking at saying, what do we do? we are not sure with the inflation path is. in addition to that we have this very funky political response. i would say the most likely

course of action for the boe is hikes a bit more and stops and wait. the path is much more convoluted than for other central banks. jonathan: technical term, funky. tom: very funky. jonathan: mike, thank you. mike schumacher of wells fargo. the imf has a forecast now for 2023 gdp growth for a good america at 1.4%. the federal reserve, 0.5%. i'm happy you brought up the march meeting because we getting projections. i wonder what they will click for growth and inflation. that really is going to be the pushback against market pricing for rate cuts. the meeting in march is more significant for a lot of people. tom: huge data significance here. we have a set of data that is two or three days out. inflation data end of february is critical. i will go back to the great liz ann saunders. the mystery for her is housing.

imagine if she actually gets housing disinflation? jonathan: re: acceleration of the pickup. rates have backed off. lisa: that's the problem. the gain if you're invested in housing. there is plenty of money looking to buy stuff and taking advantage of that. jonathan: march 22, jobless claims. right now 186,000. are we still in and around 200,000? you have to imagine it keeps going. tom: what i'm hearing consistently it is a fully employed america. that is what i'm hearing. jonathan: interesting conversation. paul jacobson, cfo of general motors. earnings this morning decent. the stock flying. where are the price cuts? that is next. ♪ lisa: with the first word, and lisa mateo. the white house will end a pair

of covid emergency declarations on may 11. keppel mean the end of the controversial title 42, a policy to expand expulsion powers of the border of the u.s. and mexico. emergency declaration allowed millions of americans special access to medicaid. the program that provides health care to low income people. in china, manufacturing and services expanded for the first time in four months. the reopening from covid zero continued and the lunar new year holiday spark travel and spending. it is welcome news for the global economy which is cooling able rely on china's recovery to offset risks. results former president is in no rush to leave florida. bloomberg has learned he's applied for a six-month visitors visa. that is making life uncomfortable for the white house, which will welcome also narrow's -- balsinaro's successor next month. gm expects earnings momentum to

grope. they reported better-than-expected profit in the fourth quarter. gm is counting on continued demand for its highest profit margin suvs and trucks. as expecting higher production levels as supply chain issues fade. spotify reported fourth quarter subscriber growth that beat estimates. gross margin also was better-than-expected. ad supported revenue at the music streaming giant climbed 14% at a time when brands have slowed down their spending. global news powered by more than 2700 chinless and analysts in more than 120 countries, i am lisa mateo. this is bloomberg. ♪

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>> when it comes to semiconductors in the last year's, suppliers picking up.

in general costs are coming down. also energy costs are higher than a couple of years ago. we see costs coming back from the challenges we have seen. jonathan: the general manager of the ford model e. are we going to have an ev price war in the united states? equity futures now negative on the s&p. down by 20%. -- .2%. a bit of economic data coming out later this morning going into the federal reserve tomorrow. payrolls on friday. tom: you look at the way futures are and the data today. the eci, which does hearken to general motors, is about the combined wage pressures of wages and benefits. jonathan: sticky. how sticky is that story going to be? tom: that will be interesting to see.

we will talk to a c class officer of a different cloth. he out of auburn and vanderbilt but very different. the only one in the automobile industry that tried to go to a quieter industry. he was at delta airlines for years. the volatility of everything aviation. paul jacobson, chief financial officer of general motors. lisa will grill him on her need for an electric car. lisa: i am curious, starting with the airline industry and the price wars, are we entering into a new price where the electric vehicle ilk? paul: i wore my auburn tied today. i want to thank the gm team for overcoming adversity. over $5 billion of inflation to deliver the results we saw in 2022. vehicle demand remains quite

strong for our ev's and as we look at the business, competition is no stranger to us. we have been in the business for over 100 years. i think the team is really good at competing. where we see consumer demand for our vehicles and price points is really strong. we need to make sure we get production up to meet that demand. lisa: you are saying you are not going to cut prices because people are requiring your cars regardless of what the price is? paul: we have waiting lists for all vehicles and we expect production to ramp up pretty quickly, especially into the back half of 2023 to meet our goal of delivering 400,000 ev's by the first half of 2024 and one million annually by 2025. we believe the demand is there and strong. lisa: how does this pair with the story we are seeing out of auto sales with sagging sales?

one of the worst years going back a number of decades. people are talking about demand waning on the margins. why is gm seeing such a different picture? paul: a couple of things. the quality of our launches and the new vehicles we brought to market are being received well by our consumers. i think our engineering and manufacturing teams partnered with our supply chain teams have done a great job of increasing production last year by 25% over 2021. we have been seeing vehicles move very quickly once we get them to dealers. we have seen some challenges in the outbound logistics. this is after we finish a vehicle and get it to the dealers. that has caused inventories to increase a little bit. we are up to about 50 days of inventory. if you look at the vehicles on the lot that dealers, there are about a third of what they were in 2019. some of that will be permanent synergies.

some of that speaks to how quickly vehicles are turning when they get delivered to dealers. that's a testament to the quality of the products we produce. tom: do you aviation business you were part of had a big turnaround when they started to be responsible about free cash flow, responsible to shareholders. we lost the volatility, the craziness of the aviation pricing. the fact is the automakers trade in single-digit price turnings multiples -- to earnings multiples. any pressure the boardroom of gm to get a more persistent free cash flow that earns a higher pe multiple by the street? paul: thanks for that question, tom. thanks for highlighting some of the work we did back in the airline industry. what i would tell you is, we spent a lot of time on free cash flow in particular. cash from operations and the

cash generation of the business is what is funding our journey. we have been clear about that. a strong ice portfolio and vehicle portfolio through the transformation is critically important to us. there is a lot of things i'm proud of the gm team for what they've done. when you look at free cash flow generation on the backs of the near record capital investment in 2022, it speaks to the focus we have. $10.5 billion last year. we think we will generate another $5 billion to $7 billion in 2023. tom: i don't want you to be apple reporting on thursday. are you at a point where you can take cash and reward shareholders to garner a higher price to earnings multiple versus the mr. sloan of piling it back into the business? paul: we have a very balanced

and prescribed capital allocation process. the first thing we are doing is investing in the business. we have a lot of transformation work to do as you can see for in the capital we have put in. as you start to see production of our plants coming online, we are starting to see the benefit of that. we will be incredibly well positioned for the growth in the ev market. once we have invested in the business we have to make sure we maintain a strong investment-grade balance sheet. at the end of the year and even early this year we have redeemed some bonds with the cash flow to help strengthen the balance sheet and fortify that. in the back half of the year we are returning to $.5 billion to shareholders. it's important -- $2.5 billion to shareholders. our shareholders and bondholders have to see tangible results that.

i hope to see more consistency across the board. lisa: we have been talking a lot about how the pressures between the fisher between the u.s. and china are creating some headaches in the c-suite. are you looking to reduce gm's dependency both on and infrastructure, supply chains from china, and from sales into that nation? paul: first of all, our china team has done a remarkable job. they have a lot of challenges with a zero covid policies. we are seeing a lot of covid slowdowns in late 2022 and 2023. the team is focused on that. we have strong partnerships, strong gm vehicles coming to that market. i think it will remain an important piece of it. that being said, with the deal we announced today with the americas and work we have done with controlled thermal resources and the lithium space,

you see a much more geographically diverse supply chain building for some of those battery raw materials. we will be able to take advantage of that because of our size and scale and our willingness to work creatively with partners. jonathan: great to catch up. the stock is up 4.7% this morning. it was just that conversation in five minutes. never mind three-month of work. tom: you see the share usage, the cash uses where he mentioned to billion dollars return to shareholders which is like a rounding error for ups. name the other country. this is the separation financially. price-to-earnings ratio to the end of this year, bloomberg models gm 6.37. the small electric call of start at 39.79. this is bizarre math. jonathan: that has been the

story for a while. tom: growing up in auto land i was on the eastern edge of auto land. rochester. they have always got an excuse to reinvested new product. i just don't get it. jonathan: knows price cuts. is that the takeaway? lisa: people are still blind the cars they have at the prices they have. jonathan: we asked about it. tom: he's a little more informed than we are to say the least. jonathan: you think? equity futures on the s&p look like this. -.1%. the move buffalos -- off the lows in the last hour or so. from new york city, this is "bloomberg surveillance." ♪

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>> i am not convinced we will see inflation get anywhere on target as soon as the market

would like. >> we need wages to come down significantly, i am not sure that is going to happen. >> if you look at the markets, it is easy to conclude. >> it is going to be a fed that is going to talk about the need to do more. >> the data on the road for a soft landing does not look different from recession. >> this is bloomberg surveillance. tom: good morning, everyone. on radio, television. everybody in our opening says data matters. in this half hour we see key labor data. it jonathan: if you want to guest this week what they would be more interested in, i have spoken to the people and said they wanted to see the data. that makes it interesting when

it comes to the debate on rate cuts or not. chair powell can say what he likes. jonathan: i totally agree. tom: eci data is .95% as a moving average, we go down some wage disinflation spike up despite the pandemic. the persistency of a new data point down will be critical. jonathan: then we have the manufacturing. that is the push and pull and the push and pull and real tug-of-war today. the pmi's. on the other side, i think the real test for the barricades at the moment seems to be jobless claims. yes, you hate the economy, please explain why jobless claims are 186,000. they struggle to do that. tom: it is real simple. we have beds tomorrow than critical earnings from big tech.

-- we have -- tomorrow then critical earnings from big tech. lisa: your question i'm might get answered is that the consumer. you have seen a contraction. there was a citigroup report that came out and talk about reddick transactions in january -- talked about credit card transactions in january. they are seeing gas prices coming down. you see all of a sudden mortgage rates coming down. the resilience is still there. tom: you mentioned the polarity of two of our guests here on the economy, half-full and have empty. with that disinflation, real income sustain and that helps the economy. jonathan: he does nothing look

at the data to make that call for chairman powell on wednesday. he thinks by the time we get to march, we will have that data in hand. i remember that being made about the month of september. five months ago we were talking about september. what happened to that? tom: give me statistic again. the dow jones industrial average hit below. in september you mentioned banks being up. tom: take the minors in the last three months. we have had a big rally. tom: i am sorry. 3% china or five china is a huge debate into this fed meeting.

jonathan: what does that look like in a couple of months? i have got no idea. that seems to be what everyone is fixating on. tom: it seems to be a conundrum. lisa: i can tell you about it later. tom: let's get to the data quickly. i'm going to look at what i see here and is accommodated into the fed meeting but more restrictive. jonathan: financial conditions at least over the last month or so, maybe more than that, the federal reserve chair will be honest about that. the next part of the conversation, how does the market was onto it because this market has been ignoring to some extent. tom: michael joins us right now he is in london with j.p. morgan

asset manager from queens college. mohamed el-erian would talk about the key decisions of the moment. what is your kt decision of j.p. morgan asset management with the flow of news we have in the -- key t decision of j.p. morgan asset management with the flow of news we have in the next few days? michael: we are looking at whether we get weakness in construction employment. we have seen severe weakness in home sales. historically with a lag, you expect that to feed through to her home stocks, which is happening. with that, some construction job losses, which then seems to spill into overall employment. tom: we will get to march on the federal reserve meeting.

jonathan: march 22? when we get to march 22, where the imagine the data is going to be? would use see sufficient reason for the fed to say that is enough? mike: i think that is a good chance they will stop in march. whether unemployment has gone up by then, i think my basis case we will see the middle of the year unemployment rising in the u.s. that is going to give the market confidence that the fed can deliver the cuts that are being priced. lisa: given the fact talking about how certain everything is in can see everything out, how did you tentatively position at a time where there is still for kings to be made and they are still so much uncertainty -- picking to be made and there are still much uncertainty? mike: if we do not go to

recession, the wage growth stay high. in the second half of the year they actually end up in more than they forecast. in that world, both palms and stocks would go down together -- bonds and stocks would go down together. lisa: do you think that is a likely outcome? mike: you're going to get a recession in 2023 that will allow wage pressure to moderate in the fed can actually -- in 24. my best guess the fed is going to bring rates down by two and i have percent by 2024 -- two and a half percent vitamin 24.

t by 2024. jonathan: one day think we finally start to see international outperformance? some of these moves are doable. . mike: i am bullish on china. let's not forget to, it has gone down 60% from the peak. we are down 40% from the peak. we going to see a v-shaped economic economy in china in the way we did in the west when the west when economies reopened. it has been partly priced, but not fully priced. i went around the country in q4 last year in the amount of pessimism i experienced was unprecedented. as china continues to be supportive, i think you will see chinese stocks move higher.

europe come i think it's interesting because they happened to fundamental improvements. we have seen the reopening of china, which helps the europe story in the massive decline in gas prices down 60% since december. the market reacted to that a lot already. the sharp rally we have seen in europe and back, both europe and u.s. banks were down 37% in october. at the u.s. banks were down 25%. the europe banks were rallying a long way. jonathan: great to squeeze that in. michael bell. the banks in the euro zone that is the index. the lowest in july. since july, we are up 51.3% in

the banks in the euro. tom: the rally is a broad sense of stocks. just as a general statement, there is a real belief there is a lot of gloom in shorting and gloom, forget about the shorting. we have made that up. the whole now what is critical. you see that in china were we are up against some significant resistance. how do we break through that? what is the metric that signals a breakout cushion mark jonathan: the imf getting us all ? jonathan: the imf getting us all excited. ultimately, it is the same conversation after a rally. lisa: especially with european banks which is up more than 15%. we are an out accounting on that. i am curious about how much bad news that was a baked in for so

long because of negative yields and rates, and how much they would stand to benefit from true yield, income investment opportunities that can give them some revenue stream. tom: you would hope. i have been complaining about the for a long time. lisa: people complain about higher rates. tom: i think we can continue that. jonathan: i am surprised you have not taken digs at me. tom: i have not offered my services. they said to me, you can be a guide who sales -- guy who sells the food.

is that going on right now? they have those huge numbers, is that money to the team or players? jonathan: to the scene appeared then the players get a different contract -- to the team. then the players get a different contract. we are in the wrong business. wouldn't it be fun, we would be football agents. seth carpenter from morgan stanley coming up. lisa: i am lisa mateo. arizona is on track to -- eurozone is on track to avoid a recession. despite double-digit recession and ukraine. for the first time in a year he international monetary fund has

raised his global economic outlook. the world's gross domestic product will expand it to .9% this year, that is 2/10 of a percentage point higher than the october forecast. the outlook was boosted because a resilient u.s. demand in the reopening of china. the u.s. and south korea claim to step up the scale of military exercises that has angered north korea. the drills have been halted under president trump, in the past north korea responded to the test. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg.

>> i know we can forge a path of building an economy where no one is left behind. american cities, towns, it is about making things here in america again. it is about good jobs, the dignity workers, the self-worth. it is about time we are doing it. jonathan: the president of the united states. lisa tells me he is coming to new york today. lisa: he is. if you want to move around the city, you might want to do it before that.

true story, i was reading about him coming into town yesterday and my son was there. i was like, biden is coming in. he was like, why do you say that? i was like, have you ever been on the streets when the president is coming in or the yuan is having a? -- u.n. is having a meeting? tom: this is a tunnel under the hudson river. i go maybe --. 12,653 minutes of delay they have had. john tucker of bloomberg radio, that was in 2020dr. .one year they have 12,653 minutes of delay. john tucker personally

experienced 8367 minutes of that. jonathan: do you have any comments on the infrastructure of new york city? when i first came over, he would sit down and he knew exactly what he was doing. he tried to get me in trouble with the audience. he tells me, what is your experience with the infrastructure compared to london? every single time. lisa: you know how they say pothole in some places that have mice streets. they should put it in new york city, a really big sign. tom: this is from boston. i cannot find words for the first glance from boston center across from the north and when they took out the expressly, six lanes elevated highway. i've crossed the rose kennedy garden that is there. i knew everything about it.

i knew all of the mouth. none of it -- math. none of it mattered for when the impact when they did the infrastructure project in boston. like laguardia now, we are all stunned with this dump of a airport. my amateur take, if that is what it takes to do it. it is a outrage compared to what you have in europe. it is just terrible. there is no other way to put it. you look at all of the expressways of long island and they are a absolute disaster. amory has been stuck on all of them. joining us right now. to baltimore and infrastructure, to new york and infrastructure.

seems to be a habit. what is the real back story? >> him and the vice president will be going to philadelphia to talk about infrastructure and clean water. the president is just getting out of washington to make sure the american people knew about his legislative wins. seems like a president trying to make an announcement for 2024. what better way of doing that them being the president of the united states then going out and explaining the legislative wins you had which is a bipartisan agreement when it comes to the infrastructure. this is the work that american people like to see. they want to see you fixing railroads, tunnels, bridges. that is a win for the president. it sets him counterpart for what is going on in congress. tom: baltimore, democrats appeared new york city

democrats. what kind of infrastructure do republicans want? >> infrastructure winds acrossw --wins across. if you look at at least four new york, this tunnel they want to build under the hudson, if you look at who goes in and out of new york city every day, pre-pandemic that number is about 900,000 people. the president was recently with minority leader mitch mcconnell talking about a bridge in kentucky. yes, what you are seeing this week is leading states, but at the same time he has also has a republican side appeared this is a president that wants to prepare for an announcement in 24 after he talks about one of his favorite things in the world, railroads, he is also going to be going to a campaign event in terms of for the d&c.

that also makes sense what he would be going to these democratic places. lisa: to cheer on the past victories? a lot of people talking about the banning, cutting off american suppliers from exporting goods. there are certain domestic push on the domestic front as well as international front terms of isolating china. how realistic is this? is this really gaining steam? annamarie: we should really give context about what is happening with while waiting in terms of the congress department. the congress administration had put it on a u.s. entity list. all of it technology cannot be sent to u.s. companies to hu awei. some older tech wanted to make sure that they could go up to hu

awei. right now there's going to be a pause on the licensed department. they are saying we should ban all of the technology that the likes of intel or qualcomm send into huawei. this is getting a lot of attention in washington dc. it is being pressured not just on the congress, but also the administration to take in tougher stance on china. jonathan: thank you. she knew when the president comes to new york, she did not come to new york. she stayed in washington dc. she gets it. tom: this tunnel thing, this discussion has gone on for what, 30 years? lisa: this has been a real sore

spot. we need to rebuild infrastructure. how do you build infrastructure when you are already using a lot of the stuff? laguardia was a pain in the neck to get to when they were building it because you had to go in another area and go through a separate section. how do you rebuild something while keeping the city operational? jonathan: can we do the subway next? remember what we said in the pandemic about them cleaning the subway every day. remember we said, what was the old cleaning practice? what were they doing before? once a week. what was it before? once a month? tom: compared to what i see in some ways, it is a general statement around the world. i just do not get it.

where is the will? richard was on the other day. where is the outrage? i think mayor adams is trying to get the outrage going. ask pre-manama the last time i was on the subway. there's a lot of people that has to take the subway. jonathan: how many years has it been? tom: forever. jonathan: we should do a trip. lisa: i go all the time. i will take you. tom: you take the subway to fairway, don't you?

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tom: we welcome you on radio and television. features -55 -- -- futures -55. it is a immature -- immature. we need to speak to the probe of the nuances of this. set carpenter drawings -- seth carpenter drawings from morgan

stanley. michael: the prior month wages and salaries increased 1%. these are all quarterly numbers. benefit costs were up 8/10 of a percent. on a 12 month basis, compensation costs are up. wages and salaries up i .1%. not a lot of difference between that and the third quarter. this is the fourth quarter numbers. at this point, it looks like we did not see a huge change in what is going on with the benefits, wages and salaries in terms of the fourth quarter. this is a member that the fed watches closely. obviously -- this is a number the fed watches closely. it gives us a picture where the markets are going. tom: what do you have here?

47 pages of data. i am going to tell you, markets turn. they turn here into fed day. bix comes in as well. lower yields with construction coming off of the data. lisa: the fair had been what happens with the employment index comes in higher. you see the yields come in not only on the two-year space, but also on the 10 year space. michael: if there are some good news, take a look at the composition of the wage gains. good producing industries or up 1% down from 1.3%. not a surprise given what is going on in the sectors in terms

of hiring. service producing industries now upholding 1%. that is the area where the fed has been looking for inflation. maybe there is a suggestion that inflation in the service industries has fallen in terms of wages. tom: does this change your press conference? does this change in fed meeting tomorrow? michael: it changes everything. instead of what everybody thought they will do, they will raise rates only five basis points. jay powell will -- 25 basis points. jay powell will come out and say, we need to keep rates for longer. tom: michael mckee with us front and center with our economic coverage. we take this data and take it on a more global scale, seth carpenter.

i know you're going to run our team here as they analyze eci. is china a 3% story? or is it a 5% story that can make things more complex where the chairman of the federal reserve? dr. carpenter: a fantastic question. the china reopening story is the big narrative going on in markets. we have been bullish. i think we are above consensus. five and three quarters above and may be a bit more. very bullish. for us, reopening. it when you talk about spillovers back to the u.s., when you think about what it does for chair powell, there are probably a little less dramatic than you might otherwise think. a big story for people who are investing in china and the region. let's go back to the u.s. in

terms of inflation, it is not going to be quite vague right now -- big right now. we imported a lot of goods from china but we know consumer goods prices have been falling for the last couple of months as people pulled back and redirected their spending. the first order wasn't domestic spending and consumer spending. morgan stanley china growth call with u.s. disinflation? you and i follow cj lawrence and evercore i. tom: a china call like you with substantial disinflation, do you agree with that premise?

dr. carpenter: substantial overstates it a little. we are optimistic about inflation coming down in the u.s. just a quick shout out. you have mentioned a fantastic u.s. economist. likely, they are both on the same page. the disinflationary is in the data and china is a part of that. the difference is going to be smaller than you might otherwise think. we saw it in automobiles, first tesla announced they were cutting prices, rivian followed, electric vehicles. the current situation, electric vehicle prices tend to drive pricing for new cars. a lot of the disinflation from goods was already there and starting. china helps at the margin, but it is not going to be the defining story.

perhaps people get overzealous by the dsl ration we are seeing this far this year. -- deceleration we are seeing this far this year. dr. carpenter: i think that is a risk that a month or so ago was dramatically underappreciated. we have tried to flag that risk a few times in our pieces. the scenario you lay out is a possible one, it is not at all the highest possibility. inflation does not breakthrough below three and a half percent. i think it is a risk. it is not a very high-risk, but it is one investors have to keep in mind. the only way we will know for sure is monitoring the data. lisa: in the meantime, were you looking at in terms of the

components and component price index to get a sense of how sticky this disinflation is? dr. carpenter: all of those plus the cpi data are important especially for the fed. we have a house of you that is a doublet to the markets. -- -- to the markets. we expect 25 basis points at this meeting. after that, we think they are going to be done at the fed. the only way it would not happen is if we get payrolls coming down well below 200. tom: i think we described now is not in the textbooks or coming out of all of the endemic and supply side and maybe we are getting back to a more monetary analysis. it is not the question that the jerome powell said to the world, but in what way is the chairman of the federal reserve -- to the

world? dr. carpenter: it is clear what the fed does matters and it matters a lot for the global economy. interestingly, this cycle was different in different ways. if you think about some of the economies, latin america we saw the brazilian central bank start to raise pipes in anticipation. they got out -- rates in anticipation. it has meant a little bit less than a negative spillover economies that you might have expected in cycles. we saw the yen depreciates aggressively. what the fed does have importance for the rest of the world. lisa: you said you could see jobs go down to 100,000 in the next couple of months, allowing

the fed to paul's with the rate hikes. what are you seeing in the fundamentals, corporate earnings to give you a sense that we are going to see that massive and sudden drop off in job creation? dr. carpenter: excellent question. first, even though we think this week's fed meeting is going to be the last rate hike, i do not see any way that chair powell and calix are going to indicate it will be the last. i suspect it will not be the last rate hike. the rhetoric stays on the hawkish side. i think just like my cap said just before the segment -- mike had said before the segment. i do not think the slowdown we are calling for in payrolls is all that dramatic. the last was 230 or so. it has been this persistent decline in payrolls and gets

down to a really soft rhetoric. chair powell keeps wanting the economy to grow potentially for a while. that is what we think it takes. tom: thank you so much. futures is up 47. the dead side and the cash -- debts side and the cash flow side. his headlines are simple. there cash flows are resilient. microsoft to lose a aaa rating, time for a $50 million bond issue. amazon's financial trouble, firing thousands, borrowing billions. apple's $1 trillion milestone, shareholder returns keep growing.

lisa: from a cash flow perspective, these are juggernauts. these companies are minting cash. has the valuations gotten ahead of themselves doing -- during free money era during the pandemic. you are seeing a flat trading on apple and amazon after the eci report how interest rate sensitive these names still are. interest rates lower, tech rates higher. that has been the theme and continues to be because of valuations. tom: the number is so big. i cannot say. $100 billion in free cash flow, that is a conundrum. lisa: which country are you going to buy? tom: stay with the spirit a lift to the market on eci -- stay with us. a lift to the market on eci. lisa: i am lisa mateo.

federal reserve officials are considering pausing interest rates hypes after next month's meeting if inflation is cooling. the scenario is based on a timeline sketched out by one of the fed's most closely watched hawks. policymakers are expected to raise rates by the end of a two-week -- today meeting. the white house will end the covid emergency declaration. it will end title 42. the emergency declaration also allowed millions of americans special access to medicaid, the program that provides health care to low income people. general motors expect its earnings to grow this year. it reported a better-than-expected profit in the fourth quarter. it is counted on the potential demand and production levels as supply chain issues fade.

the package courier is struggling with a drop in volume as shoppers returned to stores. inflation is cutting into spending habits. boeing will deliver its final 747 today. it will be turned over to atlas air. over five decades and more than 5000 747s were built. the plane will carry more than 700 passengers. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i am lisa mateo. this is bloomberg.

>> to what extent are these big technology companies laying off

employees. i think these layoffs put the companies in a position where it is difficult for them to show better-than-expected sales and profits. if they had better sales and profits, where are they cutting headcounts? tom: the tech path. just looking at the markets, he left off what we saw. lisa: if you have less inflation pressure than expected, you have a lift markets. tom: we are going to dive into the streaming era. it is always fun to do this with paul sweeney. with so unique about brian we deserve, he has been a great supporter about television and traditional media and advertising. everybody else says it is going to go up, you said before we went on air, maybe there's a

time where it is a time where it is real challenges. brian: yeah. there's a real problem. we are to years away from less than half the country having paid tv. it will make impossible to attritional advertisers to meet their goals through tv. tom: i said 10 days ago i was going to watch wednesday. are you watching at home? the fact of the matter is, everyone invented this wonderful lawmandolrian. is that all that is coming down to, you have got to have hits? brian: fundamentally, those people will choose the ad free options for those services. lisa: we get matter tomorrow,

google coming out on thursday, disney coming out -- meta- tomorrow, google coming out on thursday, disney coming out here at what are you looking for? brian: we're going to see a lot of negativity in the numbers. you're going to see meta-, they will have soft or negative numbers. google will probably be negative as reported. people are going to forget about the currency effect. that is not to be in five to 10% headwind depending on the company. use officer potter five -- spotify this morning -- you saw spotify this morning. 4% is a real number two think about. we have to think about how that will impact the narrative. lisa: let's look at some numbers. this one agency said north american companies lost $43 billion from july to september,

a all-time high due to the fluctuation. this is a big headwind that might be turning into a tale this year. brian: economic growth is still happening. inflation is additive. inflation adds to advertising growth. you are going to see -- in the advertising market. tom: i usually do not do this. i do not spend time on facebook, whatever you want to call it. you are the genius in this. you ann kirkpatrick and the rest of them -- you and kirkpatrick in the rest of them. a huge success in what circle berg did. does he -- zuckerberg data.

nessie need a new ceo? -- does he need a new ceo? brian: zuckerberg is the ceo. will he change his orientation around metaverse? ventas the bigger issues. if they want to grow their advertising business, they will have to find a way to invest in new areas. there's not a lot of room for growth. can they invest in different spaces if they want advertising growth? you have to decide on the strategy before you choose a different ceo. the metaverse is the right place. tom: the only what i know, lisa who can say metaverse that i do not break out and smiled. what and god's name is the metaverse? brian: i do not think it is a place i would be investing in right now. if you believe that the ceo has

a clear view about what it is. tom: what is the metaverse? you are the genius appeared you ann kirkpatrick -- you are the genius. we are having a conversation about the metaverse. what is it? brian: i do not know. if you believe that the ceo has a vision of what it is, you are betting on that ceo. would you say -- when you say should you change ceo, i am saying i do nothing anyone else would have the same vision as he does. lisa: you would come over someday and my offspring is going over the metaverse. it's whole ecosystem that is in the cyber world and cyber sphere. look, i have got kids. brian: apple may vary well get there -- may very well get there

first appeared they will probably driving in a more palatable way. lisa: just discussing the macro picture. i am curious about the interest rate sensitivity of the sector. what you're talking about, we are seeing single-digit growth. it is not armageddon. the valuations are pricing in rapid growth on free money for a long time. at one point do the earnings not matter? does it hinge on the macro picture? brian: insurer -- interest rates are what they were in the 90's, which is a pretty good era. you could have meant single-digit levels of cost of capital and have a growing industry. i think you end up killing the rapid delivery businesses. i came up with all of these crazy ideas for what i would do

with $1 billion of free money on our podcast. that is not realistic. tom: what does wbd do in 65.7% debt? brian: they're starting to sell themselves off for parts. there will probably find other pieces to sell off to pay that down as much as they can. tom: brian, thank you. are you going to do by wholesale in medicine? -- medicine? ok, very good. you impressed me with the metaverse. lisa: that is virtual reality. i really doubt that. that is just not true.

can you do that one more time? this is the discussion among a lot of people who are younger. if you look at snapchat, you can see your friends avatars in different places. you can go meet them where they are at, which is basically a meet up at four people in a certain network -- meet up app for people in a certain network. tom: i am a fossil on this. lisa: it is not on some new stuff -- sony stuff. in is on the phone. . tom: can we talk about the market? it is a nice market. 10 year yield and for basis points.

33,800 in the dow. lisa: the unemployment cost index coming in at 1% of a gain. just moderately softer than people expected. that is what is driving demand. tom: did we all get along today to seeing coup by a -- two sing? lisa: it is great to have you back. i was actually talking to you. i am glad to have you back here as well. tom: an important conversation as we spoke to the chief officer of general motors. david calhoun, much to talk about. stay with us on radio and television. this is a bloomberg surveillance.

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jonathan: live from new york city, the cost index softer than expected. yields push lower, equities push higher. the countdown to the open starts now. announcer: everything you need to get set for the start of u.s. trading. this is "bloomberg markets: the open" with jonathan ferro. jonathan: live from new york, the imf season turning point for the global economy as china's