>> it is very tough to take what powell said. >> there is a huge amount of uncertainty out there. >> i don't know inflation is a one-way trip up in a one-way trip down. >> aggression on the -- inflation on the good side has come down. we still have services inflation. >> transitory camp or not transitory camp, we have both. >> this is bloomberg surveillance with tom keene, jonathan ferro and lisa abramowicz. jon: live from new york city this morning, good morning this is bloomberg surveillance.

equity futures doing ok. stop is negative by almost 10%. tom: we need to is fine to everyone on radio and television what the so what is. this has been an over decades soap opera. the first thing is, what is taking so long to straighten out this institution? and with outside investors coming in, mostly with saudi arabia cut their money, who is going to put them out of their misery in some? shape or form? ? jon: we have been doing this for the best part of 10 years plus. news for 2023, substantial loss in income. these are things you never want to say as an established bank. by 2024 we will be profitable. lisa: no one wants to say that as a ceo. perhaps we will make some money into years or a year.

this isn't exactly an encouraging sign. how do you bring back investors at a time when competition for wealth management is so hot? how do you bring back that confidence after a decade of the same kind of debacles? tom: i went through the 20 page fixed income deck, real some for -- real sophistication, it has the regular cheerleading on page one but they dive into the troubles. i love what they say, in october idiosyncratic events. that happened at the brimhall's. it is not they are in denial with it. they are struggling to explain what happened. a wonderful deck on their ratios and ability to be a sound swiss bank, they point out the timeline of crisis and there are not two crisis yet trading under

france's bank. last week we went out for beverages, we reached the point of viability. jon: we all know some supremely talented people that work at this bank. i am sure many of you at home know some talented people at credit suisse as well. lisa: this is going to be an ongoing issue. if you cannot retain the talent, how do you draw in the flows when it becomes a self spiral of video syncretic events? how do they chart a path forward to give their clients confidence at a time there is still a lot of competition? jon: we have cut this -- we have seen this cut with deutsche bank. lisa: maybe deutsche bank is saying, come on guys, keep

going. tom: deutsche bank, they are both in the same level of crisis but this is much worse. buried in the footnotes they show the equity salvation after october from outside investors. what is going to be interesting today and into the coming days is where is the next charge of cash come from? taking a full convertible funding, it is paper from down the world -- from down the road when he saves the bank. jon: a statement this morning, 98 percent of our clients has stayed with us. the broader market doing ok. s&p futures up 9%. a little bit later on we get jobless claims. looking for a maybe take -- maybe tick higher. 190,000, put that in perspective

for us. tom: it is at a place where experts stammer. they don't understand it. it is a safe way to put this raid unemployment rate that goes back to 19 out of 69, you had that great gallop, that survey yesterday that half of america is flat on their back. jon: looking ahead to jobless claims. lisa: this is going to be important because a lot of people are questioning this idea of inflation that takes hold of markets to start the year in the face of strong market data. 8:30 am to give you a sense of trajectory over the past two years, incredible momentum in the number of people looking for unemployment benefits. what is this? is this aberration or a highlight that shows how strong the labor market we saw on saturday -- on friday really was. yesterday's 10 year auction it

was really interesting. the u.s. playing out 21 billion-dollar notes today at 1:00 p.m.. this follows yesterday 10 year auction that took the lowest proportion of dealers taking down the notes going back in the history. there is so much demand for 10 year treasuries at 3.6% which raises the question, are they seeing disinflation that's sticks? or is this the amount of money in the system and something people are looking at for potential rates in the market? we get a host of lift, expedia, paypal. earnings this morning, we just got pepsi better than expected. a motley picture. the reason why i pointed to lyft, was consolidation of market share. how much do we see that going get bigger even still and more resilient during a period that is really choppy? jon: joining us now is ben laidler global market strategist

at etoro uk. i want to start with european banks. is this a credit suisse problem or is this a european banking problem? ben: it is a credit suisse problem. banks in europe have been some of the strongest quarter in european markets, a lot of them hitting highs. they are loving this environment. they have been beating earnings expectations. a sector with the biggest earning beat this quarter. you are seeing a lot of earnings with the ecb hiking interest rates aggressively the first time in over a decade. banks are a great place to be even if credits maybe isn't. tom: our london desk has a terrific ben laidler article today showing the trend where everybody is ripping up the script of a great bear market. as you and i know, the trend followers get on board first and

those with a theory, structure are delaying, still very cautious, not committed to any form of upmarket as you have been. what is the process of not the trend followers, but when everybody climbs on board the lately market -- the ben laidler market? ben: they may not be great but they have absolutely gotten -- whether it is the easing inflation sharp, lower of one yield, the opening of china. it is very attractive from a bullish there -- a bullish standpoint, technical backdrop. cash levels are 5%, 6%, depending on where you look. short positions are very high. that has been gasoline on the fire.

less bad fundamentals. that sets you very positive here. one or two things are going to happen, either fundamentals are going to keep delivering, in which case some of these bears get pulled into the market, or markets inevitably, we hit a bump in the road and markets come up, but even then bears are really sensitive and take advantage of that. lisa: you said if we get a big cpi report next week we will get the bears back in the market, that goes against what a lot of people think, if we get a big cpi number, people will get scared, the central banks will have to tighten even more. what makes you think it will be bullish? ben: a good cpi report will increase this pain's, this turned up in the fundamentals and pool people back into the market. they are coming back either way

because positioning is pretty extreme. either they drag back into the market because they buy into the last -- the less fundamentals, or from a risk-management point, the 15% rally off the s&p 500 has been even more dramatic to the rest of the world, it has been a brutal risk management reality check to a lot of investors. jon: it has been one heck of a pain trade. ben laidler, thank you. market still bullish. yesterday was absolutely dreadful. pushing ahead to cpi next week, let's give you a sneak peek of what you can expect in the inflation report. estimation so far of numbers sporting -- numbers pouring in, medium estimate 5% month on month. energy and food looking for 4.4% core stripping out food

year-over-year 5% down from 6.7%. lisa: the question is how big of a move could there be in markets at a time when the labor market keeps delivering such hot kind of gains. david over at deutsche bank put out his view -- changed his view. it becomes more vulnerable as the year progresses. because of potential stickiness and the lag effects, commute -- cumulative lag effects. the bears are getting more nuanced in time -- in terms of how much downside there is. you are laughing because you are saying, they are just wrong. perhaps. tom: don't put words in my mouth. lisa: this is an india credit sent -- this is an idiographic .

tom: a great joys of bank -- a great deutsche bank call. i have trouble with a recession call when i see corporations adapting. frito-lay company is adapting. the joke is pepsi, they are in the bags of potato chips. what was the first lays potato chip? was that in america? jon: i don't eat potato chips. in the u.k. we call them crisps. tom: can somebody get me a bag of crisps from upstairs? jon: chips are what you guys might call french fries. we call french fries as a skinnier chip. chip is like a fat potato. tom: i am skinny because i had too many chips. jon: you are skinny?

ok. i am not going there. tom: pepsi kills it. jon: we have got to do disney in a moment. futures up .9%. this is bloomberg. ♪ lisa: keep you up-to-date from news from around the world with the first word i am lisa mateo. ukrainian president is in brussels today after stops in london and paris. he has been thanking allies for their support and urging them to provide more weapons for the fight against russia. the death toll has gone over 16,000 from the earthquakes that struck turkey and syria. rescue crews still finding survivors more than three days after the quake hit. the u.s. has deployed an aircraft carrier to the region to provide assistance. credit suisse warns it faces a substantial loss this year after clients withdrew a record 120 billion dollars in funds in the fourth quarter.

confidence has been deteriorating in the swiss bank which poses a fifth quarterly loss. credit suisse says that was driven by losses from the wealth division and bankrate disney ceo plans to cut 7000 jobs as part of a dramatic restructuring of the world's largest entertainment company. disney is seeking $5.5 billion in cost savings with more than half of that coming from its budget from movies and tv. disney is reorganizing the company into three divisions. 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. ♪ ve the energy that our world needs. ♪♪ welcome to a new era of energy.

>> that is why we created a new program. it needs to be in line with the results more or less. that is the current thinking and the future thinking. the new culture when it comes to compensation and principal going forward will be paid on us. jon: a difficult time for credit suisse ceo. we will cash out -- we will catch up with the stock in a moment down.

equity futures up .8%. court officials saying the same thing. -- core officials saying the same thing. more hikes are coming. lisa: they are all saying the same thing. jon: mike mckee said yesterday they should all come out one by one and say what he said and point to chairman powell. tom: you have an acclaimed economist in england and her opinion is measured and in matters. does a given regional bank president of the fed, does there opinion matter? jon: presidents can go rogue. they want to communicate we still have work to do. they are all saying the same thing. we want to touch base with the fx market briefly. for those of you waiting for the german cpi report. it came in earlier at 9.2%. we were looking for 10%.

came in at 9.2% from 6%. super noisy. changes to how they work these things out that we have got to work out the next couple of months. tom: no one has worked for credit suisse story harder than francine lacqua. she is once again in zurich. i have 14 questions but let me start with assets under management. i give credit suisse great credibility. they did really nice powerpoint in england. the basic idea, assets under management, their savior are cratering. is there any reporting they have stanched the extent of assets? >> not really. you have 100% hit the nail on the head. the concern is not stress. if you look at the chief executive, we had a conversation this morning and he is delivering on what he said. energy to get to his investment boutique that will become credit

suisse in the next few months rated they will report separately. they have managed to seg. the term and had promised what they were going to do is extend the outflows. the numbers are absolutely horrific. $120 billion. when you ask what will they do about this, they say there is an outreach program -- an outreach program. do you put your money in credit suisse? i don't know the answer to that because investors don't believe it right now. tom: over the years you have covered the bank over the years, an ever larger part of a swiss institution versus the swiss people and the swiss government. is there any back story the governments involved to slow down the pace of acquisition by connor and by saudi arabia? francine: what you are talking about is investment bank, which

we are is expecting some kind of other anchor investor. there are a number of rumors it could be a lost fund, private individuals -- it could also be private individuals in the gulf. it could also be buying up a boutique former berkeley chief executive in the past. swiss regulators don't want to do anything to get messy. the model of credit suisse is very simple. focus on wealth management, something ubs is doing a lot better at the moment. but if you don't get clients to be able to stick with you, you have a problem. the regulators probably could have done a better job. this also stems from last october. remember when there was a meltdown with credit suisse chairs because of the social media storm. at the time they were not ready to put that to rest. they were not ready with issuing message of supports. this is looking at ubs, credit suisse.

investors wondering who at the end of the day will do much better. lisa: there is a question how they are trying to lure some of these assets back, some of their clients back. in your interview with credit suisse ceo, you asked him about this. he said they are reaching out to a lot of clients and management is "hopeful we bring a fair part of the outflow back in 2023 and the rest will come later." hope is not a strategy, what else are they doing other than, please come back? francine: i could not get much details on what this outreach program is. does this mean you call the clients? they haven't lost that many clients. they said it is about 2% of clients. that could be because they are tied up in longer-term investment strategy or moneylending. what they need to do is probably call some of their big fund clients and say stick with us, we will give you something back. this only happens when things get better, and this could take a long time.

what i really pressed the chief executive on is when he is expecting profitability, reliable profitability it so when they start making these massive losses and getting on a better foot, he says let's write off 2020 three. it will be tough. he is hoping for 2024. until the headlines get better, i don't know why clients would put more money in them unless they get offered something in return. jon: looking forward to your coverage through 2023. francine lacqua in zurich. that stock is down. walt disney company rallying higher than 6.4%. bob iger back in the hot seat. 7000 job cuts. 5.5 billion dollars in cost savings. tom: action planning at the thing park at disney, he is going around on the teacups. there is a little humor there

this morning. have you ever done the teacups? jon: i have as a kid. tom: anaheim is way better than orlando. jon: the farrow family once went to disneyland paris many years ago, decades ago. it didn't work out. lisa: didn't work out for me as well. tom: there is only one. anaheim. that is the original one. it was a long time ago. but it is magical. it really works. my point is, a guy on twitter, you look at the amount of money -- jon: if you take the right kid? lisa: [applause] [laughter] jon: what child do you prefer to take to disney? tom: can i finish?

jon: you are saying one child has a better experience than the other? tom: can i continue? i looked at the subscription netflix takes versus disney, which is much smaller. he is building subscribers but they are giving it away to catch up with netflix. lisa: the clarity of his strategy is what stands out. you have job cuts but you also have three different portfolios within the company. the idea of the entertainment part, streaming business is put to one side. espn and sports is another, and then you have theme parks, cruise ships and others. then you can understand each strategy, rather than, we do not know what. jon: a big change. show me the money, show me the profits. show me subscribers in the streaming business. two years ago that was all it was about. i don't want to say all roads lead to higher interest rates,

but there is a change that relates to that. tom: margin pre-pandemic $.20 on the dollar, right now they are modeling out $.16, $.17 on the dollar. lisa: the cost of content, being able to throw free money, that is over. content has become extraordinarily expensive. we need to justify it more. that speaks to your point about higher rates and earnings. jon: would lisa be the right kid to go to the thing park with you? lisa: he is on set with two people who are not the right kid. jon: there is no love here. our dell technologies advisors can provide you with the tools and expertise you need to bring out the innovator in you.

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jon: equities rallying this morning. up .3% on the s&p 500. this is bloomberg surveillance buried alive from new york with equities up on the nasdaq more than 1%. i want to talk about the bond market briefly. two year yield, 10 year looks like this. 4.4127 on the two year yield, down about two basis points. after all the fed speak, four fed officials, with one message, all with the same thing to say, new york fed president said looser financial conditions or

more supportive financial conditions might imply a higher interest rate to make sure we get to the goals we are trying to achieve. the goal is to get interest rates even higher. every single one of them essentially said the same thing. tom: i am glad you did the bond market but it is also the relative yields. i look more than the actual yield than total return losses. i want to cut to the chase, you have a .2% spread down around 80 basis. the lower is -- the lowest is december 7, lower by three basis points. we are getting to new, stronger deeper curve inversion which is part of this fed discussion. jon: on curve inversion, they had three cathe first call was g to go from 5%. the second curve was 5% in 2023 and the third is -- a lot of people might be thinking what recession? president biden speaking

yesterday said he thinks no recession this year. and maybe even no resection next -- no recession next year. lisa: a lot of people don't see a recession as well pushed out to 2024. can we really get behind macular inflation? the fed has to eventually kill the momentum which by definition creates negativity later. tom: the curve inversion right now is center tendency back to the early summer of 2020 one, right on the trend of greater inversion -82 basis points rate what is concerning, one standard deviation, which is not a big move, is -100 basis points. i have never said that. that is how this trend has a weight to it. jon: if you are willing to accept a yield that is 82% lower on a maturity that is eight years longer, you are sending a

message. there is a reason you are willing to do that. lisa: which speaks to this question of, the fed has to raise rates in order to torpedo that growth, to torpedo inflation for later on that will make we .6% yield on a 10 year treasury worth something. jon: that is ultimately what is in the call. the call implied by the pricing market. it has been for the last number of months. tom: february 14 is an important inflationary report. one of our most popular guests, everyone leaves -- leans forward for ian shepherdson, she is -- he is ian economist at pantheon economics. -- pantheon macro economics. what do you see in the inventory right now?

ian: a good shock. a reverse in the headline from what we saw last year when the economy grew by nearly 3%. half of that growth was crated -- was crazy in the inventory data. in terms of appearances, markets are going to struggle over the next couple of months. a huge payroll print, probably going to get big numbers, partly because of warm warm -- warm weather in january sales, home sales. we are also shaping up for a negative gdp number. this is going to be hard to read and very confusing. tom: does a negative q1 gdp mean a recession? ian: no. the nba are defined recession in much more broader terms. falling out, falling incomes falling employment. i don't think we are going to get that. the market shorthand is two quarters following gdp.

there is a good chance we get that. my guess is the u.s. is well-placed to skirt a formal mbr recession. the state of the financial session provides a cushion. the fed is hammering away at rates. there debt services is very low. balance sheets are strong. savings build are there for some people. there is a lot of protection against what the fed is doing. that pushback means we can probably start around recession. if we have one, i don't think it will be very bad or very long. my base case, we dodge it altogether. lisa: what does that mean in terms of how quickly inflation will dissipate? ian: this is the good billion dollar question, can we get sustained inflation we need without recession? there are very encouraging signs. the downshift in wage growth over the next year and a half, since the crazy peak in 2021

when it was over 6%, the fed was worried about a spiral, vice chair said a couple of weeks ago she doesn't see a spiral. wage growth is hovering just around 4%, still on the high side, but it is coming down without unemployment going up, because persist the patient is gradually creeping higher, the labor market is normalizing. if we can see in the next couple of quarters run wage growth -- quarters wage growth gets higher, -- this is speculative. the trend is in the right direction but we haven't gotten to the destination we need to be at just yet. lisa: this sounds great. a lot of people have bought risk assets on this call and then used car prices went up. i point to this small sector because it highlights good inflation that is not linear. because lack affects imply this is not out there during the years of the pandemic, there

isn't the same number of vehicles to get resold and suddenly those based effects are no longer beneficiary to inflation. how good is it to watch inflation that were the basis of this trend altogether? ian: falling goods inflation has been the big driver of what we have seen. our prices have been a good part of that. we saw an enormous jump in new vehicle sales in january. up nearly 18% in one month. that is a strong indication we saw her used vehicle sales. we have -- we do not have that data yet. i don't think any dealer is expecting to see -- they have had to go to auction to find inventory and prices spiked. it is going to hit the cpi and we know we are going to get some lumpy numbers. for those people, the fed, the markets, the next couple of months could be tricky.

margin compression for car dealers is going to pull prices down quite a long way. tom: take your pantheon ability in asia and the reopening of china and estimate the resilience of the american economy. equity is up today, pepsi coley -- pepsi-cola with bang up -- etc.. is it because of china reopening? ian: china reopening is helpful, especially for u.s. manufacturing grade of what happens in chinese manufacturing today has a meaningful impact on what happens on u.s. manufacturing down the line. there is a clear line between the two. the covert wave was less disruptive than we feared it would be. the rebound of some of the services is pretty strong already. that is going to transmit to

u.s. numbers. what looks right now like a nasty squeeze on u.s. manufacturing probably is going to be easing by the spring. manufacturing is only 9% of payrolls and 11% of gdp. it is not a game changer but it is helpful at the margin. it is a part of the story why we don't have an out base forecast in the u.s. recession. pet china state in the whole, that would have been more of a problem. the margin is helpful. chinese inflation, ppi inflation is still negative, minus 3%. a year and a half ago it was plus 11%. that is working through gradually disinflation pressure in the u.s., coupled with the domestic margin we are seeing in retail. those two things together is a nice story. we have still got falling prices in china and stronger growth. it is the right combination and we hope it persists. jon: should mansi get relegated?

ian: if they cheated. tom: he answered that question five days ago. ian: it would put us more firmly in the champion seat. i wouldn't mind. jon: ian shepherdson of patheon macroeconomics, thank you. i will not eat crisps. tom: we grew up on these. jon: i will not eat crisps at 6:30 in the morning. no one wants to hear that. lisa: that crackling. tom: 14% organic revenue growth. frito-lay it was 18%.

pepsi, their view forward -- jon: is this how we are going to do earnings from pepsi as well? when we first started doing the show and it was just on radio, i will go into the studio at about 7:00. 6:45, i would get there early. he would turn up at 7:05, five minutes into the a block and he would be eating his breakfast and he is trying to speak while he was eating his breakfast. lisa: what was he eating? jon: i have no idea. it drives me absolutely insane. tom: they wanted me to go to egg whites. jon: are you done now? tom: seriously, folks, we are taking real pride i can speak for the network but also for us, earnings is more than just apple

and alphabet. pepsi matters. lisa: the interesting thing about pepsi, they didn't blow the estimates out of the water for the fourth quarter, but what they see going forward appears like market compression. this speaks to this gravitational force of trying to cater to consumers and how greater discretionary power. jon: you are the worst. lisa: real domestic idiosyncratic eating. it is sma r. there is a whole industry around it for kids these days. jon: are you having high-level thoughts and someone starts crunching? futures up .75% on the s&p. this is bloomberg. lisa: keep you up-to-date with news from around the world with the first word i am lisa mateo.

rescue crews continue to pull survivors from under the rubble of collapsed buildings in turkey. hopes are starting to fade more than three days after two massive earthquakes killed more than 16,000 people in the country and syria. the u.s. has positioned an aircraft carrier in the area for assistance. biden administration still resisting calls to provide flight jets to ukraine. secretary of state antony blinken won't permanently rule it out. he says the u.s. has adjusted what it has sent to the ukrainians. the administration has been sending fighter jets as too provocative of a move. federal reserve keeping up hawkish calls for interest rate hikes. four policymakers speaking at events wednesday, delivering separate messages. warning the fight is not over yet. first abu dhabi bank pushing ahead with a potential offer for standard chartered. bloomberg has learned a bid it's

possible once a cooling-off. -- cooling off period takeover lapses. abu dhabi exploring an all-cash bid in the range of 30 billion dollars to $35 billion trade in megadeal involving the brooklyn next and the phoenix suns. multiple reports the nets have agreed to trade superstar kevin durrant in exchange for three players in a series of first-round draft picks. that completes brooklyn's dismantling of the team that once included durrant, james harding and kyra irving. 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. ♪ leverage. [whispering] -frothy markets. psst. virtual real estate is a lock. ♪ cold hard cash ♪ j.p. morgan wealth management knows the world is full of financial noise. i'm looking at your asset mix and plan. you are right on track.

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>> i am not sure confidence is keen anymore. there is a lot of average content that is sticky. there is too many platforms. at some point you need to rush

that back. jon: always fantastic to catch up with the man spv muffet. disney shares absolutely flying. the stock is up by more than 6%. positive 6.4% after their company announced a massive restructuring plan including 7000 job cuts. $5.5 billion in cost savings. the returning ceo saying we are going to take a hard look at the cost for everything that we make across television and film because thing is very competitive world have just simply gotten more expensive. and that's something that is already underway here. tom: what i would suggest, this is so important, maybe disney is the one blue chip stock where people have been the most rattled. if you look at disney, the great blue chip from 2008 out to 2021

where we work up -- we woke up on the non-profitability of streaming, 16.7% per year, that was the bob iger triumph. jon: and the good days, subscriber growth, stay at home, streaming. it has changed. tom: it has changed hugely. for those of you on radio, we will run the manda lori and video. jon: do you want to explain what it is? tom: it is a star wars spinoff. i am not in love with it. queen's gambit i thought was phenomenal. , majestic -- majestic. you haven't seen queens gambit? jon: not yet. tom: to give s -- to give us a brief on this, geetha ranganathan bloomberg analyst

intelligence -- bloomberg intelligence analyst. iger cannot get out of his way. he is bringing in three dollars and change for his model. can that work for disney to complete would netflix? geetha: disney did raise prices by 38% in december. we didn't get to see the impact of this in this quarter they just reported. we will get to see that through this year. there is a huge delta between that article for disney plus and netflix. they did that intentionally when they were in that landscape. now we are in a whole new face. that was one of the things missing it in the disney presentation. while we saw so much on the cost front, we didn't necessarily see

a strategy to regulate growth. jon: let's talk about costs, five point $5 billion in savings, 7000 jobs to go. where do those cuts come from? geetha: the 5.5 billion dollars, they have to divide it between content cost and noncontent cost. disney is spending upwards of 30 billion dollars every year on content. of that, about 10 billion to $11 billion is on sports rights. there is not a lot of flexibility there. on the remaining, they are looking to cut 3%. those content costs are what they're looking to trim. you also have about two point $5 billion noncontent cost where they are going to see the workforce reduction. a huge chunk of that is going to be on marketing spend. they have already abandoned

their subscriber targets for disney. they are not going to go out aggressively in terms of marketing, product launches. that is where you are going to see a lot of the trimming of expenses. lisa: where are they in growth or profitability? geetha: profitability right now, the way they are approaching the equation and the mass, they are looking to take out costs. eventually as we go back to that point, they are going to have to accelerate revenue. eventually what is going to happen, we saw that with the unwinding of splitting it to three segments, entertainment, espn and sports, parks is firing on all cylinders. with entertainment we are going to see linear networks pulled into the streaming business and that will eventually give them much more pricing power. closing in that gap between that four dollars and $11 on the streaming site. lisa: what did you make on the

comments have the old regime talked about spinning off spm -- espn and not selling it? what was your take away? geetha: this age-old question for disney, caught between a rock and a hard place. espn is a huge cost center. about tend -- about $10 billion to $11 billion. that is no chump change for a business losing about $4 billion on the streaming site. they absolutely need to have it. there is this tricky balancing act between linear tv and streaming. the future of the entire tv bundle for the whole media ecosystem hinges on what bob iger does with espn. he has to play his cards very carefully. by separating it out, it gives them a path to the future to maybe spin it out but they still want to extract whatever they can from it right now. tom: the three of us did a

retreat last week with mackenzie and we want to be cutting edge. disney plus, paramount plus, discovery plus now inflames, we are thinking surveillance plus. we are looking at surveillance plus and thinking, this has got to work. windows all the stupidity end? and they realize the customer is in charge? geetha: the customer has been in charge raid with all the streaming platforms, the customer has won with the amount of choice. discovery is coming down. they didn't see that much of overlap with discovery plus and hbo. they want to maintain the subscriber base they have. shark week is huge for them. tom: i love it. it don't make fun of shark week. geetha: i love it too.

jon: where is this going? geetha: we are in this phase of rationalization. you talk about stability, now there is this sense of rationalization and they are very much in the streaming shakeout. it is well underway. tom: geetha ranganathan, fantastic. this industry, the culture of it, it is in total chaos. with that announcement yesterday. tom: geetha said the customer had one. i think that was true a couple of years ago. i don't feel that way anymore. i feel i am losing. the credit card company is winning because of the fees they are getting from a -- from the amount of streaming built up. geetha: the customer has power. that is what streaming is all about. the ease of cancellation,

signing up, signing off from a service. there is definitely a lot of choice. it really comes down, not content thinking but platform thinking. these platforms making it more user-friendly. making discoverability so much more easier. at first it was having so much content, now it is having better features. more bells and whistles. tom: friday night, english football, saturday morning? i cannot find it. jon: the amount of friction in the user experience to get out of one app, get into the other app. lisa: surveillance plus includes saturday morning guide with tom and john -- tom and jon. tom: this is serious stuff.

jon: geetha ranganathan of bloomberg intelligence. it has gotten to that point where it is ridiculous. i wanted to watch a documentary on disney plus yesterday and i went on hulu to see if i could find it, because it was meant to be there. tom: the tom keene story, that is what you are going to watch? jon: i couldn't find it. tom: they put nfl football on amazon and the ratings went down. michael barr said people cannot find it. lisa: is there a search function like roku? jon: speak to the remote control. lisa: you could do a search function. jon: then there is peacock then on to paramount. lisa: and then you throw them remote -- you throw the remote.

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>> i think it is tough to take what powell said and say risk on. >> i don't know inflation is a one-way trip up at a one-way trip down. >> maybe some of the biggest, most aggressive inflation on the good side. we still have this services inflation. >> the transitory camp or the not transitory camp? we have both. >> this is "bloomberg surveillance." jonathan: can we pause for her beautiful new york city looks

this morning? absolutely stunning. good morning to you, tom. tom: it is like an early spring. we have a non-winter. jonathan: we had a weaker winter. i think we are getting to 11 or 12 centigrade. what is that in fahrenheit? let's move on. futures positive .3% on the s&p. lisa: people understand. is fantastic to watch it on a screen from afar. it is beautiful. i love it when the sun comes up. but it's been so warm. where is my winter? jonathan: this is how bears feel. lisa: s&p -- tom: nasdaq up a stick this morning. are we 13,000 nasdaq? is visible market? jonathan: i'm thinking february

14 might have something to say about that. it is all about cpi next week. lisa: if we get a hotter print, how much momentum gets taken out versus a rally reassert itself? if the cpi comes in softer, if we get this feeling of disinflation at people buy back, the immaculate disinflation story takes hold. jonathan: looking for 190,000 up from 183,000 previously. contrast that data point to what we're hearing from companies. the walt disney company the latest essay 7000 job cuts. buy now, pay later. 19% of the workforce set to go. part of the jp morgan business around mortgages, some cuts there. just not seeing it in the labor market data. lisa: then you have the likes of pepsi coming up better-than-expected. hilton beat estimates.

the idea of travel. you have been saying that a lot. you have this service sector not able to add the employees during the pandemic quickly enough and are now re-staffing and bringing people back on. how much to the headline layoffs reflect true softening in the labor market? jonathan: corporate discipline is back. the quote of the week goes to microsoft. i have not heard a tech company say your margins, my opportunity for a long time. he name checked google. from now on the gross margin of search will draw forever. there is such margin in search which is for us is incremental but for google it is not. they have to defend it all. that is punchy stuff. lisa: artificial intelligence is changing the game for search. that is why google torpedoed yesterday.

there attempt to chat gpt was not as successful as people thought. tom: are you telling me bing is going to take over search? jonathan: do you bing? tom: i looked at it 14 years ago and said, are you kidding me? and then i moved on. jonathan: i love it when you do that. maybe we are taking this too far. it is early days but it is notable to hear satya nadella say we want some of that. lisa: we want some of your business and we have the infrastructure and programmers to make it happen, which highlights how transformative some of the technology really is. second, like good artificial intelligence programmers are in massive demand. jonathan: lisa will run you through the day in a moment. yields coming in a couple of basis points.

lisa: we will get more sense of whether we go further or lower in terms of yield higher or price on the 10-year after the incredible auction yesterday. jobless claims at 8:30 a.m. we look at the chart of initial jobless claims. tom: on radio it is a great chart. lisa: it shows how high they were after the pandemic lockdowns and how they have compressed some of the lowest jobless claims we have seen on record. i know it is a chart crime. 1:00 p.m., the next auction. tom, you have to pay attention to the auctions. yesterday's 10-year auction was really important. do you get the same kind of flood of international cash coming into the u.s. market? they do see the fed successfully bringing inflation under control. tom: i think you are way out front on this. you brought to my attention the t-bills near 5%. people like me don't know that.

lisa: perhaps everyone is like this is a really good deal. that is also affecting the cost of money. just in terms of rationalizing some of the expenditures. aftermarket we get earnings including lyft, expedia, yelp, paypal. it's a question on the consumer. we get a sense of how strong and resilient the consumer is in the face of pent-up cash and a labor market that is very strong. jonathan: lyft up around 2.3%. david lebovitz from j.p. morgan asset management, good morning to you. question nine just by a t-bill and quality year and walk away? david: it's interesting. the conversations with clients are, you take advantage of the near-term opportunity that has manifested itself in thick stone -- fixed income?

do you begin to step in with the idea that over the course of two or three years you will outperform but with higher volatility? a lot of people are embracing the trade. to your point about the rally we're seeing and the expectations around inflation, it will take one that inflation print, one unfortunate jobs print or a fed member to move risk assets in the other direction. we want to continue to play a relatively -- play it relatively close to the chest. tom: how much are you in cash? it's jermaine going into this inflationary report in february versus the last week of december. what is the recommendation on a cash position? david: we are comfortable holding more cash. if your baseline is a 60/40 portfolio up to 5% in cash makes sense. cash is paying you something. it is not like you are sitting

there earning zero, which was the case for the better part of the prior expansion. it does feel like markets are a little ahead of themselves. it will come in opportunity to deploy the cash at a more favorable valuation. tom: we have a fabulous article about how trend followers are getting on the bull market trend. a lot of people are rationalizing this. you and j.p. morgan are living this in real time. are you detecting able market trend or is there so many secondary ideas out there you just can't get on board? david: i would say more the latter relative to the former. the big thing nobody is talking about is where the vix is. volatility is low, below 20. that brings trend followers back into the market. you look at what has gone on and equities. they are latching onto that. what gives me pause is the market tension i see between equities and rates that evolved

since powell spoke at the january fomc. you see rates move higher. equities move higher. that move higher has been led by the names that were most sensitive to rates in 2022. maybe i'm missing something but it feels like a tug-of-war here. i think the bond market will end up being right. lisa: 20 look for in reassessing that cash or holding? david: it's about expectations. on the earnings front expectations are beginning to align with reality. the bigger risk is around the inflation story. what keeps me up at night -- not my kids -- the other thing is you talk to investors and they say, look, we are seeing disinflation. growth is better than expected. if growth is better than expected, inflation probably will not come down as quickly as everybody is thinking. i wonder if we will have the

term disinflation up on the shelf with the term transitory and it will be something that generated a lot of fanfare but failed to allow the rubber to meet the road. lisa: is the goods inflation coming back? does the service sector inflation more significant? is it weights prices that are going up not reflected by the absolute numbers because of compositional effects? david: the labor market component and the pass-through to services prices. they will look see what is going in housing, focus on the wage price spiral taking hold. what we are seeing from the labor market is businesses, if they can operate with five people but they have seven, they are not laying out the additional two because they worry they have to hire them back at a higher price. that will support inflation going forward. i think we can hit relatively attractive levels by the middle of the year. we are we at the end of the year? the inflation print probably has

a three candle at the end of 2023, something that a lot of people are talking about. jonathan: all roads seem to lead to the same question. why is tech outperforming? david: there are a couple of reasons. on one hand i wonder if it is a little bit of a dead cat bounce. they got so beaten up in 2022 that it is starting to come back into vogue. the other thing you are seeing, and you were talking about layoffs, and we talked about this the less, is with you, tech is taking its medicine. the primary levered to defend margins is reducing their labor footprint by reducing their employee expense. to an extent the market is saying they are doing what they need to do to maintain profitability. look up beaten up they were from the valuation perspective in 2022. what i struggle with is the idea that the fed is closer to cutting that we think is the case. i think that is tangential to

the broader narrative, the idea that down the road we end up with lower rates. jonathan: whenever tom talks you just keep going and that is the right thing to do. any advice for any newcomers that my want to join this program? keep talking. david lebovitz, thank you. is this a dead cat bounce? tesla. look at the intraday low of the year so far and look at the move since then. we are up by 99% from the low in early january on that name. that is a monster move. lisa: is it just sentiment or did something change? the deliveries from china? jonathan: coming up, victoria fernandez. looking forward to that a little bit later. lisa m.: keeping you up-to-date with news around the world, i'm

lisa mateo. it is day two of low to be zelenskyy's surprise to her of western europe. he's in brussels after stops in london and paris. he's been thanking allies for their support and urging them to provide more weapons for the fight against russia. the death toll has gone over 16,000 from the earthquakes that struck turkey and syria. rescue crews were still finding survivors more than three days after the quakes it. the u.s. has deployed an aircraft carrier to the region to provide assistance. credit suisse warns it faces a substantial loss this year after clients withdrew a record $120 billion in funds in the fourth quarter. confidence has been deteriorating in the bank that posted a fifth straight quarterly loss. we spoke with the ceo. >> the results are unacceptable. that is why we created a new transformation program and a new credit suisse.

simpler, built around client needs. in the near-term very probable -- profitable. lisa m.: their trading revenue has fallen 96% in two years. five eicher -- bob iger plans to cut 7000 jobs. disney is seeking $5.5 billion in cost savings, with more than half of that coming from its budget for movies and tv. iger is reorganizing the company into three divisions. global news powered by 2700 journalists and analysts in more than 120 countries, i'm lisa mateo and this is bloomberg. ♪ -diversification, futures, options. fiduciary. leverage. [whispering] -frothy markets. psst. virtual real estate is a lock. ♪ cold hard cash ♪ j.p. morgan wealth management knows the world is full of financial noise. i'm looking at your asset mix and plan. you are right on track. great, thanks.

our easy-to-use app and local advisors are here to help you figure out what's right for your investments. j.p. morgan wealth management.

>> the idea of shooting down a balloon that is gathering information over america and that makes relations worse? i made it clear to xi jinping that we are going to compete fully with china. we are not going to look for conflict. that has been the case so far. jonathan: the president speaking to pbs yesterday evening. this is how china responded to some of those remarks and that address and the state of the union. the quote from the chinese foreign ministry spokeswoman.

"the u.s. remarks are highly irresponsible and violate basic diplomatic protocols. we are firmly opposed to that and contend that." -- condemn that." tom: it's one of the stories out there. i give major credit to elizabeth economy, the original work at the council on foreign relations. she has lead on this in two books for five years. the way they do federalism in china, at some point where he gets some real pushback. biden has to step lightly given the domestic realities of china. jonathan: does anyone in the u.s. government believe that was a weather balloon? tom: no. i don't think so. the reporting is there are many of these, we just don't see them. jonathan: just to put those remarks from the chinese ministry spokeswoman into better

context. lisa: nobody believes they are weather balloons. this raises questions about xi jinping's power to mystically. this will not resonate in the u.s. were people say, maybe we shouldn't say anything. tom: we will get to china and the president of the united states and what we witnessed in the last week. annmarie hordern joins us now. and maria tadeo. john and lisa want to focus on what we see domestically. i have to go to the headlines and generalize about jets over ukraine. the idea of a visit to the united kingdom. i would know a typhoon from a typhoon jet. how close are we to jets being used by ukraine in their war with mr. pruden? -- putin? maria: before we get into that,

the mystery has been revealed. float a mere zelenskyy -- volodymyr zelenskyy is in the building. he has done london, parents and today it is brussels. the debate around the tanks has settled and ukrainian say we need planes. that was the message in the u.k. and yesterday in paris and probably the message today. for an international audience, the idea he is here for ukraine is useful. he will get face time with 27 heads of state. the top european institutions in the same place. beyond that is the message to the european audience. every tv and newspaper will show what's going on in brussels. we are waiting to hear the results of the meeting. he will respond and say we need those weapons. we have to pay attention to this. ukraine is concerned not just

about the date of the invasion but the spring offensive. a regrouping and retraining of russian forces. lisa: there's a groundswell of pushback about how much aid to deliver to ukraine. we did not see that emphasis in the state of the union with president biden. what has been the response to the european push to support ukraine heading in the spring? annmarie: the president was asked about this at he says i have a firm commitment. judy woodruff followed up and he said it will go on and continue to go on. it is pretty ironclad that they will stand there and support ukraine. the president is still keeping that line that the aide will continue. there has been pushback. the pushback we have seen from the likes of speaker mccarthy's

a lot of republicans saying they want oversight on this. some of that is stepping up as well. you can imagine the united states -- talking about that they will continue this commitment to support ukraine. the president said he keeps nato united. that is something he is proud of. the other thing to watch was it was fascinating. secretary of state blinken's comments on fighter jets. he did not outright say no. he left a tiny window open, saying their response has evolved. we have seen that response evolved with the abrams tanks. lisa: we heard the pbs newshour interview, some comments on china. the aftermath of these balloons that we understand are in a number of different places and have been used for a while. he was asked about whether this

escalates the tensions with china. he seemed to shoot that down. is there any real threat for many of these surveillance balloons? maria: i don't think this one incident will push them off track and what they're trying to do with china. they want to try to have a better dialogue but make sure they are in constant communication. at the same time he's been clear with xi jinping they will compete aggressively with china. the interview off the line he had lived the state of the union saying name the leader that wants to trade places with xi jinping. he said xi jinping is under enormous pressure. he's not doing well at home domestically. to jonathan's point, the foreign ministry said in this is not part of normal different attic -- diplomatic procedures and

that international community knows the number one spy community, the united states. american lawmakers want to talk tough on china, but something we talk about a lot is at home this been a lot of trouble for xi jinping. whether or not it is the debt issues, the housing market downturn, the fact that individuals are getting covid and official figures are not talking about that. it's a more inflated number. these are enormous to vesta concerns for xi jinping and that pushes his party to really want to hamper down -- hammer down the rhetoric on the net states. jonathan: going back to the g20 in bali, it seemed like a talk to -- softer tone coming out of xi jinping. annmarie: they feel like their backs are against the wall. we don't know if this directive of this spy balloon came from xi jinping or other parts of the

chinese communist already. to his domestic audience he has to make sure he is talking tough. he has to do that at this time if he is struggling a little domestically as they try to rebuild the economy coming out of the field covid zero policy. -- failed covid zero policy. biden said when he called fusion peeing over the summer he said look what's happening in russia now. mcdonald. all these companies are leaving russia. who do you think in the future is going to be investing in china? jonathan: great point at the end. annmarie and maria tadeo. tom: i do agree. you would lisa have been good on this. there is the horror of the war and turkey. the overwhelming geo story is

china, europe, china-america and china-china. jonathan: america-europe getting more interested as well. one to watch this year. lisa: especially with the inflation reduction act and the response you get from your. -- europe. jonathan: they have to put something together. consult good complaining to the united states. we don't like your subsidies. america just turns around and says come up with a plan. tom: the hotel room in paris? jonathan: that's a change in the topic. is is ge aerospace, advancing flight for future generations. ♪

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jonathan: one hour away from jobless claims in america. something like 190,000, which is ridiculously low. equities up .3%. .7% higher. a bounce back and the nasdaq by a full percentage point. yesterday a course of fed voices saying the same thing. yields unchanged at 442.42. a single basis point. we want to talk about europe and credit suisse getting hammered. the euro-dollar.

107.71, slightly stronger. inflation data out of germany delayed by a week or so. 9.2%. you can focus on the change or the number. 9% in germany is not good news. lisa: it was higher than what people expected when they drafted the fictitious cpi global number for the euro region. that will get revised higher as well. tom: deutsche bank was the number 1 -- the deutschmark was the number-one currency when i started studying all this. 9%. jonathan: that is why he was e-work pushback from the bundesbank to the ecb effort, get those dovish calls to say, hey, slow down. 9%, no thanks. lisa: so far the region has been contained, the spread has been

contained. the pressure is not doing more and curtail. we are here for the post spreads. jonathan: things change. lisa: let's look at the earnings. we have been talking about disney at how much that share price is popping after the announcement of the organization and the $5.5 billion in price cuts, cost-cutting. 6.4% gain. does this get it wrong? where is the revenue growth going to come from? the parks business is a cash cow. sports is a good revenue producer. on the content side how do you get the same subscriber growth if you're not spending on the content? i'm looking at pepsi delivering better than expected returns for the fourth quarter. significantly better. shares up 120%. the -- 1.8%. the companies that have the cash are not investing in growth.

they are giving bigger dividends. we see this in energy and the share buybacks. jonathan: tax the dividends. tax them. that is not my call. if are not investing in your company, those excess profits, tax them. lisa: investors are rewarding those dividend payments pretty substantially. when the energy companies don't do that, their stocks go down even if they delivered incredible earnings. jonathan: they invest in something more productive than my need to invest? lisa: i'm looking at hilton. hilton shares are higher, up by 2.5%. this is interesting. the consumer story is very strong. that is what we saw and the earnings. people are still traveling. the service sector very strong.

this is what everyone is talk ing about with the inflation that has not dissipated. jonathan: disney cut 7000 jobs. all sometimes. lisa: thank you. well said, tom. you did great. tom: this is a joy. one of the jewels of the bloomberg terminal is btmm go. it was religion when there was gravity in the market. you would go there many times a day. jon, we are there. jonathan: what did you learn from that? tom: there are real rates, higher rates. all of a sudden there is a changed attitude with a lot of younger people never witnessed before. jonathan: is the volatility from last year going to come back? tom: i don't know if the volatility will come back.

it's a whole new world after all. we are back to world before harry styles was in one direction. jonathan: 2010? is that the marker? tom: i'm sorry. it's a whole new world after all. we are back to what we remember a long time ago? >> we have yield to get in the bond market. u.s. ig, looks so attractive to where we were for most of the post gse decade. tom: david lebovitz called it a dead cat bounce. winnie: i don't want to call it that because we had targets for forecast. i have validation thereafter people were telling me they were too constructive. i don't live in three weeks into the year. that part does not feel as great.

there is reason for some caution. we are worried about the cpi print. tom: tactical caution? winnie: that means don't buy everything at the moment. may be put on some hedges in your portfolio. we still think the long-term looks good for ig and high-heeled. expect some volatility. -- high-yield. we saw the volatility surrounding duration and concerns around where the fed will go and where will inflation go. you have to look through some of the noise, for the jumble in the data and play long-term and the credit markets. jonathan: strategy did not survive first contact, something like that. it feels like 2023. you see one year and about a month. what do you do then? winnie: looking at 2024, to be honest.

a lot of people look at 2023 as a transition year. using the word idiosyncratic. some acute issues and that market that we will see the opposite in default. as things normalize, and we don't expect the fed to be pivoting or cutting rates into 2023. we expect them to be on hold. we think the credit markets can withstand the elevated yields as liquidity returns to the market and investors step up and say bonds relative to equities look good again. that feels like a good long-term trade. tom: i am looking at the entire span of the winter world. i'm looking back at the chart 30 years. i have curve inversion of 105 basis points. 114 was the recent low. how do listeners and

viewers scared of the stock market participate in a never before seen world? winnie: great question. tom: i'm not thinking clearly today. winnie: focus on where there is opportunity to capitalize on other relative value wonky this in the market -- wonkiness in the market. you should be looking at the belly of the curve. if you're interested in picking up excess return opportunities, look at what is fundamentally sound in the next two to three years. we like the energy sector and the high-yield market relative to what was historically. credit markets are different than they were over that timeframe. you have to give a lot of credit to what is not different and

better and also what is scarier, that long-duration ig trade where bonds are super discounted in terms of dollar prices but spreads are not that attractive. should i be buy all the duration? we are not taking a trade. lisa: we were focused on yields and how much more expensive it would be for companies to borrow. is it more the stability of rates where they are? the sense of predictability that gives a green light to invest? winnie: winnie: that's a good point. as companies try to manage the balance sheet they are focused on my access to capital. if i go to the new issue market on the wrong date, am i going to be severely punished? there were a lot of punitive days in the market. this year that has not been the case. it has been the opposite. issuers can be very much

rewarded for it. jonathan: winnie cisar. we have seen about a year's return in a few weeks? lisa: why some people are getting uneasy. it's a higher-quality asset class that used the be is interesting. it shows the lag effect of the cash at the balance sheets and the strength of companies and how much better quality some of these left for dead companies were. perhaps in the 80's but not anymore. jonathan: triple b companies get downgraded to junk. lisa: i have a couple of notes about the downgrade trade and how excited people get. if you have to let the fear and greed continue -- jonathan: what happened with that? lisa used to write about it every week and i would quote lisa. lisa says triple b's are huge issue.

that's a problem. then we have the pandemic. we faced the downturn. what happened to the big risk we used talk about? lisa: it materialized with the pandemic. all of a sudden the fed stepped in and said, guess what? corporate bonds are a-ok. we will make sure you have access to capital. everybody got money. now the trade is a little different. there is much more of a motivation for management teams to move back up towards the triple b rating. if you are triple b, ok. we don't want to get that downgrade to double be right now -- double b right now. it's a harder market to access the type of liquidity we need. i think we are seeing a shift in terms of how people are thinking about ratings.

chair powell is no longer the oprah of ratings. you get a car. you get a bailout. practice that one, tom. it is lost on tom. up next, jim zeller. big chat coming up on private markets. tom: it is really timely actually. jonathan: equity futures up by .7% on the s&p. live from new york, jobless claims 50 minutes away. this is bloomberg. ♪ lisa m.: keeping you up-to-date with news around the world, i'm lisa mateo. day two of volodymyr zelenskyy's surprise to her western europe. he's in brussels today after stops in london and paris. he's been thanking allies for their support and urging them to provide more weapons for the

fight against russia. rescue crews continue to pull survivors under the rubble of collapsed buildings in turkey. hopes are starting to fade more than three days after two massive earthquakes killed over 16,000 people in the country in syria. the u.s. has positioned an aircraft carrier for assistance. first abu dhabi bank is pressing ahead with the potential offer for standard chartered. a bid is possible once a cooling-off period required by u.k. takeover rules lapses. first abu dhabi is exploring $30 billion to $35 million. a mega deal involving the phoenix suns. there are multiple reports the nets agreed to trade kevin durrant and tj ward to the sons in exchange for three players and a series of first-round draft picks. that completes brooklyn's dismantling of the team that included durrant, james harden and kylie irving. five iger -- bob iger plans to

cut 7000 jobs in a restructuring of the world's largest entertainment company. disney is seeking 5.5 dollars in cost savings. iger is the organizing -- reorganizing the company into three divisions. that lisa mateo. this is bloomberg. ♪ ♪

three nights, esg... the broker will take your bonds. -diversification, futures, options. fiduciary.

leverage. [whispering] -frothy markets. psst. virtual real estate is a lock. ♪ cold hard cash ♪ j.p. morgan wealth management knows the world is full of financial noise. i'm looking at your asset mix and plan. you are right on track. great, thanks. our easy-to-use app and local advisors are here to help you figure out what's right for your investments. j.p. morgan wealth management. is an elegant ev. yeah, with 389 horsepower. ♪♪ it's electric. with an edge. ♪♪ >> we are saying effort begin to pay off. we have further to go. it might be a long fight with interest rates higher for longer than summer are currently expecting.

i will not hesitate to do what is needed to get my job done. jonathan: governor waller with the message, the federal reserve on the same page here. official after official. more hikes to come. lisa: 14-- tom: 14 people spoke and we got 14 answers. bullard was not there. everybody is on the same page. did david rubenstein interview all of the? jonathan: no. perhaps he will later this week. tom: i'm looking at the market. i'm sorry. green lift. jonathan: lyft sticks. tom: we will get right to it. jim zelter. he will try to keep up.

there's a fire sale going on in zurich, switzerland. you have a nodding acquaintance with it. apollo took on assets from a beleaguered swiss bank. jim: good morning to all of you. the transaction you are referring to, we thought for years there is a great theme going on in rate evolution of a lot of assets in the banks that are moving to the alternative side of the business. spg is a tremendous finance company of finance companies. it has a 20-year track record. bringing that team on, 300 origination platforms underneath it, it is our objective of fixed income replacement. getting investment-grade returns but doing it anymore thoughtful

and less risky manner. a massive transaction for us. it was very nuanced. we will talk about that on the earnings call today. we think this whole area of credit -- i saw your past gu est -- the economy is doing well. you can get double digit yields. in this product business is investment-grade risk at tremendous spreads. tom: i learned a long time ago at the heart of this is you correctly mentioning you need to retain 250 more bodies as you bring them over. explain the incentive of how you will incentivize those people to join apollo. jim: like we have done for decades, tom, we bring them in. we haven't aligned aligned business plant that is not just about growing the assets but doing it in a productive way where credit losses are

negligible or zero. we are aligned on a trajectory in the business. we are aligned with the investors get at the end of the day. it's about investor returns. we are aligned making a productive business that increased to the shareholders of apollo. we do that in an aligned basis, that is the success long-term. with this management team, who was extremely excited to be part of a business where we can offer this type of long-term trajectory in terms of benefits and compensation but in alignment with the shareholders at the funds, at apollo, and the most vertical aspect is long-term predictable capital. so they can go about their business, execute their business and grow their business with long-term, sticky, matched assets. it is no more complicated than that. jonathan: you deployed a lot of capital recently.

we have seen the correction take place in public markets. this conversation about if we have seen the correction in private markets. how do you think that will play out in the next 12 months and with that will mean for the volume of transactions we can act from you in the next quarter's? s? jim: the theme we talked about is price matters. we are in an environment for years folks asked how we are going to perform at a higher rate environment. i think the results of the last 12 months show us that. it is easily the best time to be in investor in new issue vintage credit. i've been here for 18 years. you are getting double digit returns by lending at the capital structure. voracious demand. we are not seeing -- it's a bifurcated economy. for us, if we followed the discipline of price matters, we

are lending to great companies that are well-positioned. the reality is, it is difficult to put one term in which way the economy is going in terms of upside, downside. it's very bifurcated. many industries are consumer-led. the cruise industry, the hospitality industry. those that are much more hard are having a challenging time. autos and such. a lot of companies need capital. we have expanded our capital base. not only the size of the capital but the breadth of our capital. we can offer scale solutions down in the mid single digits which are accretive to our earnings of our retirement services. that makes a lot of sense for us. we are thinking about the committal return for a unit of risk. for us it is a great time to be in our business. lisa: do you expect we will miss

the default cycle altogether? jim: it will be one where certain industries get hit harder. we always talk about going from two to 3% -- 2% or 3% or 4%. it will probably take up higher but not broad-based across the high-yield sector. it will be concentrated in 45 industries. -- four or five industries. companies are much more focused on returning capital to shareholders. what's going on in the big oil majors, at disney and a lot of other companies, they are very focused on cash flow generation. that is what we have done for 32 years. that's a playbook that lasts. for us, there will be a certain degree of a credit cycle but it will not be broadbrush across every asset. at least we're not running our

business with that in mind. lisa: a longtime private credit was institutional investors. over the past few years, pre-pandemic mostly, there was a push into the individual investor. how much is that still the opportunity versus going back and doubling down on institutions? jim: they are both growing. the institutions have been in this business for 30 years in terms of equity and the alternatives. in the last three or four years, global wealth channels, the wealth has been created in the u.s. at asia and europe and india and hong kong and such. there is a voracious appetite for high quality managers who have proven themselves in products that make sense. education, appropriate fees, appropriate liquidity. we think it is a once in a decade opportunity. it is not surprising a handful of firms are focused on it.

when we did investor days 16 months ago, it was one of our three critical priorities or initiatives, along with origination and capital solutions. it is still front and center for us. i think this rate rise actually makes it quite attractive for many folks to enter this world. we are building a tremendous resource base to create products, investor program, and service clients necessarily. jonathan: manchester united, once in a decade opportunity? jim: i'm more focused on u.s. ports but there's an amazing amount of sports ecosystem financing going on. we expect to be part of that going forward. jonathan: do you want to elaborate on some of that? jim: these sports are global. you and tom have your view on certain teams in the premier league.

i would not get in the middle of you two on that one. jonathan: jim zelter, if you ever want to look over there, we can consult. tom: i would collect mr. levy. jonathan: we will mediate. lisa: thank you, jim. securitize it. tom: it will be great. jonathan: jim zelter of apollo. tom: this is all burgeoning. we have never been here, jon. how did these guys respond when we this invert? -- dis-invert? someday we will not have curve inversion. lisa: a lot of people say if you don't discover the price, maybe it did not happen. jonathan: that is very philosophical. lisa: i've heard that before.

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>> it's true we are not going to go into recession anytime soon. >> everyone is waiting to see how bad things are going to be and it is implying right now it's not so bad. >> to us the u.s. equity market

is fighting the fed big time. >> the rate hike is likely in march. the question will be may or june? >> is it possible after some pause they will have to raise rates again? >> this is bloomberg surveillance with tom keene, jonathan ferro, and lisa abramowicz. tom: staggering to that inflation report may be a jumble today futures of 27. the nasdaq up a stick as well. john, where are we? the nasdaq up 14% today. the dow jones industrial underperforming. jonathan: what happened? lisa: disney. tom: it's a movement to risk. ftse there is something going on here. jonathan: disney, 7000 jobs to

go. we are going to see a fit of the workforce go there as well. tom: glad you remember that. jonathan: put it together and that is what we are going to see in jobless claims in 29 minutes. she was in that nice opening moment there there is a massive disconnect and's people say there is a disconnect. some of the incoming information, some of the things we are hearing. tom: something isn't right and that's going to be the thing. we note in the equity market hugo to bonds, define what is going on lisa, what is going on i mentioned the three-month 30 year's truly 30 year inversion. lisa: the bond market believes the fed is going to raise rates. if that is the take away. they believe the fed. what they are also perhaps also

believing it's going to be immaculate disinflation. you're going to get inflation coming down without the pain that jay powell talked about. that is the disconnect in markets, can you get inflation coming down without the pain, without a recession, without an uptick in unemployment? tom: immaculate disinflation. jonathan: is that disinflation? going from 10 to nine? some will say it's a problem. tom: we are all waiting for february 14 for different reasons. there won't be an acquisition of roses. jonathan: usually you get complaints about the cost of roses. are we suspecting any disinflation? lisa: you'll tell us? jonathan: you on it now or -- lisa: will take it next week.

what are you buying? tom: i haven't gotten there yet. i have retail people sending me stuff. jonathan: retail valentines. he just lays back sitting there and says people send me stuff. tom: they are sending me photos. misses keene has been sending me photos of stuff. and i'm just -- jonathan: futures only s&p 7/10 of 1%. people send you stuff, ok. yields look like this, claims 26 minutes away. down to basis points. tom: it's interesting here and i'm going to go to the two-year yields. i have curve inversion, something is going on here. jonathan: look at how much has changed already. to close the year oster, 442 so we have round-trip.

10-year, something like 30 basis points which is something like back in january. tom: what do you do given the jumble and i love it, tori of fernandez says something isn't right. victoria, what isn't right? >> i wish i could lay it out that simply but we just don't know. you are looking at this data and you're saying the puzzle pieces aren't fitting together because if you tell me we are going to have inflation of 5-6% with s&p valuations and 18 times or a little over 18 times and i have the federal reserve and central banks same we are going to continue to hike rates you have and averted yield curved, that is 110 basis points inverted and you've got many growth. following almost 4% annually for the last three months.

you look at that and say no problem, the economy is in great shape and i just don't believe you on that. but you can come and tell me consumer balance sheets are good, corporations are cutting costs in order to help their margins. the labor market is superstrong and let's look at credit. with lisette there we can talk a little bit more about credit. we see 160 billion of issuance in the u.s. in the month of january. that tells us may be we aren't going into procession, so tell me how you fit all these things together. we aren't finding a solution which means more uncertainty, more volatility and that means you have to be very cautious with your portfolios. jonathan: 24 hours ago there was a massive disconnect and went on to say history is not kind to these kind massive disconnects. do you think there is a bigger

disconnect in equities or credit? >> i think the credit is coming around. the bond market is believing the fed and that is somewhat new. let's look back a couple of weeks ago when we saw yields dropped pretty dramatically here in the u.s.. global yields did not follow. it's like the u.s. market was saying they didn't believe the fed. they started to come around after powell's speech this week. i think the larger disconnect right now might be in equity markets. a lot are saying this is more of a but we have to be careful because, look, yes, we had a golden cross. we saw move bought -- movement around a golden cross. again, you have to look at the trend lines and right now they are still down. i think that is where we see more disconnect. i want to be cautious, i don't want to buy into something that turns into a bubble.

i would rather be late to the party. lisa: the question around being conservative has been a serious one over the last 12 months because some of the instruments have seen some of the worst losses going back decades. just moments ago he was talking about vacations portfolio are you in the sinking? >> you always like to hear people say cash is king buffer as we feel like you need to be in stick. you need to have a balanced portfolio. you can't be tactical and take advantage of the means you are seeing. i hope you added income last year like we did we extended duration on our portfolios once we hit the 4%. we were adding to our equity portfolios because we had a lot of state names. i think you need to be tactical. take a little bit of a short term view and make small trades. don't make big bets in a market

like this. let's be tactical, let's be opportunistic, but you also have to be cautious and a little more conservative. jonathan: victoria, that was great as always. i think a lot of people are feeling, this feels off. tom: in the value, it's not big banks it's not strategies, it's not marching orders on a monday. cross mark is out there with real portfolios, real money at risk away from the idiocy of many. betty's the massive value where victoria and her team are saying something isn't right. jonathan: sometimes it takes confidence to do that. a lot of will on tv say have conviction, i think you come into this year you see jobs

coming in at 517,000, unemployment dropped three point corporate -- two 3.4% and you see wage growth not accelerating and disinflation trends starting to take shape. lisa: people talk about a rolling recession but i left they tori is comments. -- but i felt victorious comments. i feel like you aren't looking at all the data and that is the take away from all of this. jonathan: julian was saying if you are not confused right now you're not attention. if you are not confused you are not paying attention. tom: i will also say this goes back to a heated interview, october was a low. this was a kind of jumble. there is a lot of gloom, there is a lot of people not playing,

i go to the jp morgan chart of three days ago showing the huge amount of people that have disbelief in this market. i look at the nasdaq and i really don't know why other than some good earnings. jonathan: some of the earnings haven't been great. yields are higher again, and couldn't figure it out. it's like all roads lead to the same question. tom: they believe in lisa's immaculate disinflation. lisa: is that really what it is? tom: i think it is a duration play. lisa: cross rationalization. yes. all right, maybe. jonathan: look at meda, a couple of months ago. it has rallied so hard since then. how dare you try and overspend in a rising interest rate environment? and they came back with massive

cuts. lisa: we haven't addressed the existential questions. there are still some of these hanging over questions but our cost cuts enough to cut to growth? jonathan: where is the stock now? that is 7.7%. it's been a rough morning for them, has it? lisa: it's been a tough time. jonathan: 2020 three is a write off, see you in 24. tom: points are clear and hugely detailed. jonathan: huge mess. stocks down 7.7%. ♪ >> keeping you up-to-date with news from around the world with first word, i'm lisa mateo. ukraine's president is in brussels. as he did in london and paris he is seeking more military aid for

the war with russia. allies should consider sending long-range missile systems and fighter jets to ukraine. the death toll has gone over 16,000 from earthquakes that struck turkey and syria rescue crews were still finding survivors more than three days after the quakes hit. meanwhile the u.s. has deployed an aircraft carrier to the region to provide assistance. a substantial loss this year after clients withdrew 120 billion dollars in funds in the fourth quarter. confidence has been deteriorating in the swiss bank which posted a fit straight quarterly loss. we spoke with the ceo. >> the results are unacceptable. that is why we created a credit so use. very profitable. >> trading revenue has plunged

96% in less than two years. first quarter profit for pepsi co.. it's a sign shoppers are willing to pay higher prices for beverages and snacks. organic sales growing 6%, that also beat wall street excess -- expectations. global news 24 hours a day on air and on bloomgerg quicktake. powered by more than 2700 journalists and analysts in over 120 countries. i'm lisa mateo, this is bloomberg. ♪ ♪♪ what will you do? will you make something better? create something new? our dell technologies advisors can provide you with the tools and expertise you need to bring out the innovator in you.

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>> we are analyzing them. we shared information with dozens of countries around the world. both from washington and the embassies. we are doing so because the united states was not the only target. jonathan: antony blinken the address he didn't think he was going to make a couple of weeks ago. but he was going to come back and say we seem to have found something comment agreements.

positive seven tons of 1% we are 13 minutes away from jobless claims in america. lisa has gone through the estimates a few times this morning but worth repeating. i guess we will find out on a 13 minutes. over the jewels in some of these other surveys what i am hearing is there is enough oddities going on that creating short-term moving averages is hazardous to your health. jonathan: how many people have been laid off from tech jobs? lisa: you wonder about banking area. they were trying to hire all the tech investors. jonathan: convinced the new generation this was the place to be. jonathan: we will give you three things. what were they giving away? a peloton? lisa: i wasn't keeping track.

jonathan: it was crazy for a bit. tom: never been on one. jonathan: neither have i. tom: are you shocked? jonathan: neither have i do they have one in your gym? tom: i don't think so. jonathan: just asking. tom: we are going to continue. a couple of movies with jennifer aniston and we know ben stiller. we all know sean penn. someone else sanctioned by mr. boudin. and tennenbaum -- mr. tennenbaum. what does it feel like to walk down the streets of new york sanctioned? >> i wear it as a badge of honor, i have done something right to garner that kind of

attention but it was definitely not on my 2022 bingo card to be banned from entering russia. that was a surprise. tom: everybody jokes about it but how -- this is serious stuff how did you react to it that you are now sanctioned? >> there is no change in my life. my name was spelled wrong, my company's name was spelled wrong. that was kind of the view, my releasing shinned? everybody to get better than i would have expected that i have not changed my life to dramatically as a result of this. lisa: wendy running push by the u.s. population mostly republican against providing much more aid to ukraine in despite given the long-standing tension with russia? >> i think it's going to earn as and other zelenskyy visit. he is on the european tour right

now, you know, to continue to generate support. especially february 24 is the one year mark. he needs to continue to rally support around the world. when push comes to set -- shove there is not unified republican support. i think the focus now and i can certainly appreciate this having worked on other aid packages in other countries is just the accountability of where the money is going to ensure you can track where it is spent, what it is spent on. but when the rubber hits the road, that will not be a popular opinion especially with how strong zelenskyy's administration is. lisa: we have moved away from the possible escalation debate and it has moved into the backseat of people's consciousness even as people continue to fight and continue to die. can you talk about why the

escalation no longer is present in the conversation? >> when we were sending bullets and germany was sending helmets, there was talk of escalation. now zelenskyy is after fighter jets and there is talk of escalation but russia hasn't necessarily made good at least to the scale of the bluff and luster with making good on those threats. it really is hard to see what the line is and we hope that it stays, we hope that it ends but realistically speaking it is kind of the boy who cries will fit this point. jonathan: it's been a thought for a long time that trade prevents conflict. it hasn't worked in europe. maybe sanction could work as well. any evidence that sanctions are working anywhere? >> i think about a year ago sitting here or there, somewhere in this area talking about this. sanctions and isolation were never going to keep russia out of ukraine. that being said, russia is very

rapidly working towards economic obsolescence. they are working towards countries like cuba and iran where they will have very few trading partners. there is talk of iranians building a drone plant in russia. realistically speaking, the world has proven and continues to prove it doesn't need the russian economy and this is the miscalculation for mr. payton on this entire crisis. tom: i think i mentioned this to you before. one of my first great missed because, what was the next marginal sanction that can have impact? >> speaking of south africa they are in the process of holding joint military exercises with russia and china. they have been warned facilitating any sanctions or circumvention will not end well. there has been threat of

secondary sanctions but realistically speaking there is still more levers that can be pulled on this. lisa: john talked about trade a preventing conflict. is there any probable pushback to the incredible trade relationship at a time of rising >> >> engines? there is no decrease and i think that is why when you have seen issues between the u.s. and china, china has taken a measured response to chips fans, to other sorts of measures that have been placed on them not just by the u.s. but by europeans there is recognition that china does need the west end of the west needs china. how that manifests itself is a real question but trade data still seems static at this point. there doesn't seem to be any material disruption.

jonathan: just seems to me, to build on what lisa said, the faces -- the challenges the u.s. faces germany seems to be the weak link in both. what can be done about that? >> you are beginning to see companies, what a potential escalation could look like from a western resolved from a sanctions standpoint. you are seeing businesses that were caught flat-footed and what that meant for their businesses in russia to prepare accordingly to make sure it doesn't happen to them. not to do anything preemptively, although there have been movements of supply chain out of china to diversify but you are seeing a lot more companies take seriously what could happen to their businesses in the event that china escalates things and to have a playbook on the shelf now. jonathan: how did they spell your name? >> they added another n. lisa: three n's >>.

they will never find me. [laughter] jonathan: coming up on the open, tony tore as we count down in about five minutes time breaking down jobless claims for you. tom: i just noticed he is cut and chiseled to sean penn. >> that's the nicest thing you ever said. lisa: happy valentine's day. jonathan: is that your gift? that's beautiful. lisa: that's inflation. jonathan: beautiful. ♪ but i count on personal financial advice. my ameriprise advisor understands the markets and me. she knows my goals and can help me reach them with confidence. the markets may fluctuate but you're still on track.

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tom: bloomberg surveillance we have claims and i want to take you back to the spring of 2020 one claims jumped from 199,000 to 878,000. that was the beginning of the shock of the labor economy we are looking for a suitable jump today. michael mckee joins us. that is not a jump is it? mike: the survey would not be a jump we do come in over expectations. 196,000 but that is still very low. we are not looking here at a major change in the initial

jobless change numbers. claims do continue to rise bit. however, that is not a significant jump either. it looks like what is happening is we are hearing layoff announcements that haven't completely happened yet and a lot of people are getting jobs. quickly once they lose jobs because they are continuing the claims number, it doesn't jump up significantly. at this point, the jobless claims numbers are not telling us a lot except for the fact that this is a very strong labor market and it just goes along with what jay powell is saying the other day about if you think labor is the cause of inflation, they got work to do. tom: when we have a layoff banner and it could be today or who ever, how long is it until those numbers enter the michael mckee world? mike: it depends on the company's plans. they cut a lot of jobs.

if they are doing layoffs people may be offered jobs in other parts of the company but also they have to give what they call more notices. sometimes honored in the breach but that does push out some of the actual departures if you get severance and it's more than you would make in jobless claims if you are not eligible for aid until your severance runs out. it delays the arrival of the layoffs and i don't think we are going to see mickey and minnie in these numbers for a couple of weeks, if not months. lisa: we aren't getting much reaction in markets i guess as you would expect. these are somewhat noisy numbers and it's very much in line with what we were expecting. what do you make of the belief of immaculate disinflation that seems to be pervading markets? are they sufficient to bring down inflation to the 2% target despite the robustness that we

see by every indicator in the labor market? mike: it was originally proposed a sort of a sarcastic idea that how could you have immaculate disinflation is beginning to look like they might be able to do something like that but it is still way too early to tell. i will tell today rich miller from our economics team has a story about rolling recessions and i think this may explain something that a lot of people have been wondering about. you go back to the 2015 era where we saw a recession in manufacturing, especially the oil industry and it didn't show up in the overall numbers. we are seeing layoffs in the real estate sector in the mortgage sector, that may move on to other sectors at a time where it starts to improvement. we have seen some signs of that. tom: michael mckee, thank you very much. he will be with this for a very

busy week for jon ferro will pay a lot of money for roses. lisa: and people offer you gifts. tom: nasdaq up 1.2%. we have an important point here we have, moments ago, out of manila to tent spread let me explain this the difference in yield between the two year and the 10 year printed nt five basis points it breaches through what we saw in early february. lisa: what's interesting is it's being driven by a rally in the 10 year in other words people are seeing even more value in buying 10 year treasuries for 3.6% which are yielding the least relative to two year treasuries going back a long time. tom: we are back to december 7 on that. on the american economy chief economist the state of the

american labor economy it's a jumble to me claims on jolts, everything odd. what do you end woman to trust make of our job economy? >> it's obviously an incredibly tight labor market. the low level of claims releasing sub with what we saw with job growth. if you look at the nonseasonally adjusted numbers you usually get 2.8 or 3 million lost jobs in january. this time you get a boss of 2.5 million jobs. what we really see is employers are holding on to their employees. we know how challenging it is to hire people so it is more a story of wanting to hold onto people. we also see that with the claims this morning. we think that the job growth is obviously very strong but it is

more about the differential. jumped up on a one month basis it was a little bit fishy. it's really the mismatch that's going to matter more than the total drop growth. tom:'s wage growth going to cooperate so lisa can see her immaculate disinflation? >> well i hear talk of -- people talking about it is easy to point out that we have already had it for three months. this is not a one-off. you have three months of slower inflation while you have the strong wages. we think it's going to get much more challenging. we are going to get to the middle of this year and beyond. we also see supply chain challenges and then also the energy transition is going to keep some upward pressure. we expected to keep coming down. average hourly earnings were pretty mild with the 0.3% increase and if you look at

production of supervisory workers, the slowdown into this year is more encouraging. lisa: if you get the sense of disinflation based on the euro from your composition of the way the data is drawn up how do you get confidence? how do you give confidence that there's going to be a stickier inflation later in the year when all and best anecdotal evidence is speaking to the other? >> as you point out you've got those base effects. we don't think it's going to come back down to what he saw between the global financial crisis and the covid pandemic. we have higher inflation on a trend basis between 2.5 and 3.5 multiyear bases going out. it could tip pretty low this year. even if we just see the shelter numbers of flatline that would have very low inflation numbers. those higher numbers are going

to keep rates higher and offer opportunities for investors so is not a lot of confidence about to the middle of this year if he has a lot more to do with the long-term trajectory. we also think they are navigate about. if lisa: that speaks to know the ending scenario in a time where a lot of people are pushing out potentially even for years any type of recession, are you among those? >> it could go out or it could happen this year. we have a 50-50 chance of a soft landing versus a mild recession. it's going to come back to employers. if they keep hiring, you've got consumers, you've got job growth and wage growth and that will keep the economies head above water. if companies get spooked that's going to lead to recession. is going to have a lot more to do with the lack effects. much more important than whether the fed stops at five or 5.1.

businesses are reevaluating those decisions now. tom: you earned your stripes at the philadelphia fed which is one of the most interesting research capabilities giving the geography as well. echoes back to the study of the core american economy which i'm going to call domestic final sales. when you take out the foreign dynamics and you just look at this thing domestic final sales, is it how full or half empty? >> we definitely see the slowdown and that is our preferred measure. is like looking at core cpi, we go with final sales just like the government as well. we see an appreciable slowdown in the economy. it was early positive in the recent gdp report. what we see is the natural slowdown that's going to happen

anyway from covid it is also the impacts of the federal reserve's policy. residential investment has been hit hard and that is what they are trying to do is engineer the slowdown and power -- powell just of the other date what we do see is the slowdown. it should help bring inflation down. we have to go see which way that breaks. tom: lisa it's a stunning chart. you have a pandemic, -9% on final sales to private domestic types. i hope we go to the stimulus boom of positive 15%, a cup of tanning and we come right down and we are settling right now on moving average bases on every form you -- actually below where we were. lisa: justin fox roto: that is fascinating about how jobs are

coming back to the united states in a way they hadn't for decades. you see certain areas of industries or the landscape has shifted. you can talk about globalization, you can talk about the durability, the safety and security of trying to diversify your supply chain. but that is perhaps underpinning some of the resilience in the labor market that isn't weakening. tom: this goes back to the credit so barbara the financial isolation of the elites in america things like mean fracturing is now within a regime of higher interest rates money actually cost something and it's a whole numeral. as go to disney as a whole new world after all. lisa: which really goes to the michelson view of things can you get and is yet and still get a rationalization in valuations faced of many costing something?

that is one of the questions. you get the financial's agent of the u.s. economy that is getting unwound just a bit. tom: i talked about early this morning what i looked at first thing monday which was the value line geometric growth fund and is you the ambiguity right now. it is hanging on a trend of leases with futures up 30, nasdaq up 1.2% as well. i don't have my radar on dell 35,000, jon ferro does. lisa: he has that. tom: extrapolating after the 35,000. lisa: absolutely, yes. tom: coming up catherine rooney mira. stay with us this is bloomberg futures up 30 points. >> keeping you up-to-date with news from around the world with the first word on lisa mateo.

ukraine president is in brussels. as he did in london and paris he is seeking more military aid from the war with russia. european parliament resident said allies should consider sending long-range missile systems and fighter jets to ukraine. rescue crews continue to pull survivors from under the rubble of collapsed buildings in turkey but have been starting to fade after massive earthquakes killed nearly 18,000 people. the u.s. has positioned a aircraft carrier for assistance. president biden facing questions about his age he was asked some concerns some voters me have about his health. president biden is 80, the oldest president in u.s. history.

british billionaire jim ratcliffe has hired jb -- j.p. morgan chase to advise him on a bid for manchester united. the english premier league club, manchester is the biggest brand in global football. there is one estimate it will suffer more than $4.9 billion. global news 24 hours a day on air and on bloomgerg quicktake. powered by more than 2700 journalists and analysts in over 120 countries. i'm lisa mateo, this is bloomberg. ♪

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was also the first time you hit this note... ( screams in joy) save 20% with the lowest transaction fees and keep more of what you make. with a partner that always puts you first. godaddy. tools and support for every small business first. >> there is not yet much evidence that the rate hikes we have done so far are having much effect on the labor market. we need to bring the labor market into balance.

may be the best understanding of delta t at the fed. that aerospace got out of illinois he has always been interesting and is really august on the access. can we go there? lisa: the extreme. on the edges may be. tom: one of the comments we saw was 14 spit -- fed speakers. lisa: we are not getting as many fed speakers we are not going to play into that. tom: getting into trouble. jon ferro preparing for the next hour. can we just say there is an ump h to the market here? there is i have a -85 basis point. the not back to december 7 but this is new 2023 inversion. lisa: the reason i think the equity left is interesting is

because it comes after the 1.7 percent decline in the nasdaq. have we reached the point where people are not in the let's make it rally mode? this move we are seeing ahead of today suggests people are looking to buy more than they are looking to double down. tom: this is a joy. freight now we are going to go down memory lane which is that a guy named david malpass got a job in washington holding a bank. there was absolutely definitive emerging-market coverage. there was something about it in the air, in the pixie dust. chief market strategist catherine rooney vera i have to go back to all of it what was it like as bear stearns, in my opinion invented em coverage on wall street. >> thank you for that kind

introduction. i miss it. ian was a strong point. i was in emerging-market research. tom: it was a different battle. as bill rhodes would say the central banker to the world. jerome powell is he the central banker? what is a power of our central bank leader now? >> emerge in markets -- emerging markets do poorly in hiking cycle with the dollar appreciating in value. that's why we saw emerging markets get devastated last year. i think, tom and lisa, we have seen emerging markets be the darling year to date. it was one of the worst performers in 2022 because the

fed seems it is going to stop producing. i still think it's a little bit early to jump into that trade area i think the momentum could carry is higher for the next month or so. but the fed could do more and more than the market is currently anticipating. there is a certain euphoria, i think right now for the riskiest paper and for the reversion. lisa: euphoria, can you build on that? what is driving the for you other than positioning squeeze? >> i was speaking with your previous guest and she said everyone is jazzed about the china reopening china is a very important trade partner for latin america. it is important for asia. as china reopens, the surrounding areas, malaysia, thailand, those areas are going to get a bounce in tourism.

a weakening dollar is very favorable for emerging markets. economic growth this year is going to be stellar. india, more than 6% growth. that's going to be positive versus the markets are here in the u.s. we are going to be flat at best. lisa: just to sort of put something concrete around this, do you think right now china reopening has been fully priced or even overpriced when it comes to how it has been presented? >> yes, and i think before i recommend going long on a sustainable fashion to institutional or even retail investors we have to see it pullback i think the u.s. recession is not particularly in the equity markets. we have not seen difficulties. there is a lot of name in the emerging space that have not had the financing difficulties that i do expect to come to the floor as we feel the repercussions and

the ramifications of 500 basis points tom:. if you are lecturing at the university of miami. you are going to tell them we have had a depth. three men 30 is at 130. there is the announcement what is the signal of deep substantial inversion? >> it's been fun to be an adjunct professor especially in this time of our lifetime. i will go back to emerging markets again. they did their homework. brazil increased markets. i think that's part of the euphoria, plowing into these countries, these geographies that are very juicy in yields. tom: i've got to ask, lisa asked for me as well, both of us tried to price a condo in miami and

fell off our chair. you are living it. >> i made fish -- beneficiary of it. tom: give us a snapshot into the sustainability of the florida boom. can it continue? >> we have diversity both in the diaspora so all those people are coming. it's not just the new yorkers that have bid up. but also the waitlist to get into schools. it's very difficult to get into the private schools because of the influx. i think it is diverse i think the mayor and the politicians have done a fantastic job of enticing capital and its diverse in nature. i'm one of the new yorkers that moved down years ago. tom: there is grass coming up

through the driveway. >> we have a yard. lisa: that was the most interesting thing you said, not florida real estate i am still looking at the 2/10 spread which shows you how much of a nerd or whatever you want to calming, but i'm watching right now equities rally continue to extend the rally even the rally even though people pile into 10 year treasuries at a time when they are expecting more rate hikes. this doesn't add up. do you understand this? >> i think victoria fernandez said it very well. i have been saying this for an extended period of time. 4.7% it makes sense to me. i think it's a good idea to be in cash and cash equivalent some of my top picks continue to like which are staples, they underperformed this year. you tend to -- utility, energies, and health care. i think we need to remain defensive under the expectation

that this can't continue. we can't have record low unemployment and a 53 years, productivity kind of dismal, and labor cost still rising with the fed getting to his 2% inflation target. tom: thank you so much. joining from miami. had to have the miami view. are you and i going to be the last two people here? lisa: you think jon ferro is a family person? are you going to wear like a short sleeve polo with the bowtie? tom: that's not me. i have been done a couple times. lisa: you're not a beach kind of guy? tom: the florida thing, i'm, i can't get there. a lot of our guests have moved. lisa: yeah and a lot of it is the tax shift they are doing. i want to build on what you were talking about. tom: this is an historic moment. lisa: what you are seeing is the

deepest inversion going back decades. we have reached inuvo new low on the closing basis. what this indicates is people are willing to accept that much lower of a yield to invest for 10 years than in the short term. again, why is tech rallying in the face of this? it raises a question. tom: i'm going to go back to peter fisher of dartmouth. it's a four box prisoners dilemma. the tens are moving, the twos are moving. you can have all up, all down, or moving like this. on radio this is working out. the ambiguity is massive. lisa: the fed is going to have to keep raising rates. that has been the conclusion from the bond market. tom: futures up 34. this is bloomberg surveillance. ♪

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jonathan: the difference between a two year and a tenure yield, 85 basis points. the most inverted we have seen since the early 1980's. equity futures still elevated. "the countdown to the open" starts right now. >> everything you need to get set for the start of u.s. trading. this is "bloomberg: the open" with jonathan ferro. michael: live -- jonathan: live from new york, coming up, president