>> it's a really tricky time for the market because things are slowing. >> growth continues to slow. >> a lot of great news priced integrate companies. >> talking about some sign of cliff dive, that is not happening. >> this is going to be a defining earnings season for winners and losers. jonathan: live from new york city for our audience worldwide, , good morning, good morning. this is "bloomberg surveillance, live on tv and radio. equity futures in the s&p 500 down .2%.

wrapping up bank earnings with first republic later. looking forward to tech reports later this week. tom: i love the dan ives, it, the winners and losers. we get apple may 4 we will have an idea. starting with marty patel and tech ownership is cool. jonathan: looking forward to that conversation. tomorrow we get google, microsoft. wednesday, meta. lmvh market value hitting $500 billion, the first for a european listed company. tom: chris bryant owns the story with bloomberg and reports on the rate of change and new europe. this goes back to the imf meetings and talking to the former prime minister of italy about eurosclerosis.

and maybe is finally gone. jonathan: consumer boom time in china making a comeback. we caught up with patrick armstrong on friday. this quote from him, if you feel safe owning it, it is probably too expensive. what did he sell in the last quarter? he sold lvmh. lisa: and looking at hermes as a potential add-on. when have we priced in fully the chinese boom? they are concentrated in the luxury sectors and we cannot ignore that. jonathan: got numbers on the panic of q1 for credit suisse. these are the numbers. credits we saw $69 -- $59 billion of outflows, culminating in the deal. they lust within $200 billion of

swiss -- they lost $200 billion of swiss. i would've expected the numbers for q1 2023 to be a lot worse than they turned out to be. tom: i wonder if they keep going. and for the american audience think up this morning, this is incredibly a swiss domestic issue. we have to look at it within the prism of domestic politics. lisa: my question was -- what does this mean in terms of how difficult or less difficult will it be for ubs. they are of 2% after the earnings report. 258 money managers had left, so they were losing talent. how do you keep the talent out also having the ambiguity of what a four-year process could be of acquiring quite a suisse? tom: do they get this done

quickly or is this one of the three year grand plans? i can't imagine they can do it over three years. jonathan: they signals it could take three or four years. given the way the regulators behaved, how that news conference went, if you just listened and went over it again and asked to guess what the outflows were, i am not sure he would have come up with $69 billion. i would've thought q1 was that much worse thank you for -- then q4. tom: i wonder what the wealth management assets like for ubs. jonathan: this is said look at ubs stock, positive come up 2%. the equity market is negative on the s&p by .2%. last week in absolute snoozer. down 0.1% on the s&p 500.

we have had a move this month of positive 0.6% on the s&p. tom: you look at the moving averages and exponential moving averages, there are three of them and what happens when you snooze is they conflate together and we are not at a perfect point but it does speak to the quiet that is out there. i think it is based on earnings. jonathan: 10 year yield lower by three basis points. the two-year north of 4%, let's call it 4.16. lisa: goes to the uncertainty of whether we are accelerating or decelerating when it comes to the economy. u.s. chicago fed national coming out at 8:30. very curious to see the unexpected pop in manufacturing

indexes which i thought was interesting. are we seeing a turn after the recession in this one particular area that was really driving the optimism of a disinflationary momentum? we also get, you talk about the vix index. look how low it is. some people say it is not accurate. the cboe is launching this one-day index that will demonstrate the volatility and perhaps will demonstrate whether has been massive diversions from the vix and the move index. this has been one of the biggest questions, why are we not seeing that if so many people are bearish? we are getting first republic bank earnings after we have seen a slew of regional bank earnings that are not listed the index. we have gotten a lot of news and it hasn't mint terrible and we haven't gotten catastrophic surprises yet not been enough

over the last couple of months. jonathan: tom mentioned this conversation at the start of the conversation. you still hold a lot. can you tell us going into earnings. >> this will be a huge number for stocks. we still like the tech sector because the understanding there is a lot of inventory we worked off that we may have to wait for the second half of the year is well understood in the stocks have anticipated it. can they have a decent result when markets go down because of that? we would rather ride that out and say the companies have long-term growth and strong balance sheets to stand even if we have a deep recession. tom: i look at tech and 70

people are afraid of tech conservative. how do you look at a measured conservative cash flow from a high flyer that could be trouble? margie: i don't know about the high flyers. i like to avoid the high flyers that might have trouble just looking at companies that have improved market, leaders, cash on the balance sheet and pay dividend. tom: u.s. a name? -- give us a name. margie: we think broadcom is a good stock because it is diversified in the dividend. lisa: we talk about when to know when to cash out. some of the big tech have been profitable. when do you say that is enough? margie: i think that is true but on a relative basis we really don't know how deep the economic

correction we will have, will it be mild or severe? tech prices may come down because pe has expanded but we don't know if other sectors will have disappointing earnings if we have a big recession. that is the push and pull of the market where you want to be positioned. lisa: have you seen reaction from some of these earnings? margie: so far this earnings season, which is about 20% or so, the results have been surprisingly good and the market was looking for signs that companies will tone down earnings expectations in the quarter we -- will be disappointing and we are waiting for the correction we haven't seen. jonathan: we seen corrections the earnings margins in the smaller banks. just in terms of taking a step back and trying to understand the broader economy, what is the

relationship between declining interest margins and bank lending to the rest of the economy? margie: i think everything rolls back to the fed and their super aggressive policy last year that really put the banks in a box on the interest margin. we have to see the yield curve get not so inverted is a big thing and see a little more stability from the fed. we think we have already seen even before the distress, bank lending standards tightening up. they have been on the watch and are in good shape as far as that is. jonathan: we get more data on that next month. thank you for that, margie patel their. -- there. the federal reserve decision is next week on may 3. may 4, you will hear from the ecb the same day you get the apple earnings. a number we got from bloomberg,

i wasn't aware of this, the divide between information technology and the s&p. s&p 500 i.t. index up 19% in 2023. the s&p 500 up close to 8%. that is the information technology strong the since 2009. that is a big gap that has opened up. tom: it is and i look at bass and think we are recalibrating. -- i look at that and i think we are recalibrating. equity return, we are back out of the bear market. that is a fact the bears have to adjust to, led by technology, 12-month month trailing statistics. if you go to the bloomberg wei function, we are flat or down 3% down 20%, led by the tech recovery. lisa: interesting is the bifurcation.

a number of big stocks driving the rally and everyone else is in knowers land -- nowhere land. we are looking at a market weighted s&p even if you have cash producing behemoths surge. jonathan: this number, 40 4% of the s&p 500 market cap reporting this week. a big week coming up for bank earnings. what do you think spurs it this morning? tom: instituting a rebuilding plan, the worst performance by a professional team ever, ever, ever. jonathan: really that bad? tom: it was appalling. i wanted adele to come in and play fullback. jonathan: i was at home laughing. tom: you are the pro. you should fly over there and talk to them.

equity futures -.2%. live from new york, welcome back. this is bloomberg. lisa: with the first word, i'm lisa mateo. another blow to president micron and his blow to enlist china's help on the war in ukraine. china told them they don't have sovereign status as independent nations and those comments triggered furious reactions, especially in the former estonia and lithuania. china has backtracked and said they respect the independence of those countries. in sudan, the effort to evacuate diplomats and other expatriates picked up over the weekend. the u.s. and u.k. military were able to lift officials to safety , a temporary cease-fire between the sudan army and the support forces militia it has battled since april 15 two have failed.

house speaker kevin mccarthy says the chamber will pass is $1.5 trillion debt ceiling increase this week. bloomberg has learned mccarthy has not yet lined up all the votes he needs. mccarthy told fox president biden must negotiate in order to avoid a u.s. default. last week the president called the republican plan wacko. 69 billion dollars of outflows for quite at suisse and a large write-down of the wealth management unit underscoring the challenge for ubs in retaining talent and clients for ubs following the takeover. global news 24 hours a day, online and at quicktake on bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm lisa mateo. this is bloomberg. ♪

>> i cannot imagine someone in our conference that would want to go along with biden's reckless spending. this is responsible and something we sat down for months and had input. we will vote and pass and send it to the senate. >> the repercussions are huge. you would literally see interest rates go up for mortgages, for loans. you will see the stock market plumb again. jonathan: this debate is worse than fed speak. that was house speaker kevin mccarthy and senator klobuchar on cnn. this will continue up until and

maybe beyond the date. the broad market, good morning. welcome to the program. earnings from big tech later this week after the bell after the close you will hear from first republic. a lot of struggles for that and numbers later. futures -.2% on the s&p. it come in three basis points, 3.5394. if you want to talk politics, diplomacy, or lack thereof, the chinese ambassador telling french tv over the weekend that x soviet states don't have sovereign status as dependent nations and today, from the foreign ministry spokeswoman of the kind yes chinese communist party -- chinese calmness party, they do respect them as having sovereign status as independent nations.

-- chinese communist party saying they do respect them as having sovereign status as independent nations. tom: all these nations put foot in mouth and it usually happens on the weekend. and then you correct it and move on. i guess that is what they do. lisa: i don't think they can move this quickly from that kind of thing because it confirms people suspicions that they are perhaps more in russia's pocket than they previously thought. tom: we are talking about a calendar item of april earnings. how about a calendar item of what you do in war and they start now. i know annmarie hordern is looking at this on the eastern front of the river through ukraine and looking -- getting ready for a summer offensive. jonathan: haven't we decided to call it strategic ambiguity and

we have done it with this white house and administration. was the strategic ambiguity for a mistake? tom: i don't know. it is foot and mouth corrected. that seems to be where we are going. claire in his analysis, terry haynes joined us -- clear in his analysis, terry haynes joins us. tax receipts came in a little light moving this debt crisis discussion from autumn, maybe forward and to june as well. were you surprised the tax receipts for iris came in light? terry: not particularly because the irs warns it is early and that was done just before the april 17 deadline. i would expect them to bounce

back up a little bit. that doesn't mean we will get a lot of wiggle room or breathing room in terms of dealing with the debt ceiling. they will still have to do that in the summer. tom: the bloomberg surveillance audience has been looking to autumn and they have a meeting and then didn't happen and that it is pulled forward. where is it pulled forward june or july? terry: i would say more likely july. i looked at the past years receipts and in the last fiscal year we had receipts bigger than anticipated. i think the thumb on the scale here is for a little more time than less. but still, that is put -- that is in political terms. it is concerning to me the really hasn't been a start to

negotiations. i haven't sang for six months this is 30% to 40% -- i have been saying for six month this is 30% to 40% resulting in default. lisa: gaming out with the fed is going to do, how much do people also hate the discussion about joe biden versus donald trump yet again and this seems to be what is coming. we expect to hear perhaps from joe biden tomorrow that he is officially running again. but when you look at a recent poll that is not popular. terry: i take issue with some of the headline writers who wrote that a trump-biden rematch is something the voters are sour on. i will be non-consensus about this. republicans, four out of 10 want trump.

that means six out of 10 don't and there is a clear alternative into santos -- helps desantis. on the democratic side, no real challengers. the mild surprise is that on friday you had six national polls for presidents and polls are what they are of course. four with biden as the democrat and to go with harris. democrats must five out of the six. democrats lose five out of six whether it is trump or desantis. this is teetering as we speak as biden prepares to announce. i don't think independents help much because they tend to self identify with one party or another even though they don't want to formally call themselves d or r. lisa: going back to the debt ceiling debate, how this plays

into something that seems a repeat of what we have seen before. terry: i learned three things in law school, it depends as much as possible. it depends on trump and you will find that among a lot of political professionals as well. there is a lot more enthusiasm on the democratic side if it is trump you are trying to beat. if it is someone else, there's probably a lot less enthusiasm. the polls and the election probably run based on that assumption. jonathan: taken the temperature over the weekend, i saw several articles that said the death of a run that was never announced. what do you make of that? terry: i think governor desantis'demise is early he is the major trump alternative and a position he wants to be in.

i don't think he is interested in being the front runner because you get all of the arrows if you are the front runner. he has been surprised to some extent by the focus and energy of the developing trump campaign as well as the suppose it apostasy of florida members that might support him who are instead going to trump. to me, that is all fixable. that has a lot more to do with the signal sent to desantis by florida legislators that they should -- that he should pay attention to them. jonathan: thank you. the debt ceiling x eight after the tax receipts -- x date after the tax receipts. tom: i am biased on this at my

childhood like a switch -- swiss watch, but the answer is i am hugely biased like wall street saying, it will go away. and yet i am watching markets say to me, maybe this time is different. jonathan: there is always that worried. tom: this is lisa's world. lisa: things have gotten more polarized. and it emphasizes how partisan wall street and washington has gotten. jonathan: affects markets. one point 10 on euro-dollar. ♪ i could totally live to be 100! why do i keep taking such good care of my- since we started working with empower, we're able to get all our financial questions answered,

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jonathan: welcome to the program. the s&p 500, slightly softer, down .2%. the nasdaq, -0.2% with some losses last week. the bond market, two-year, 10 year, yields lower by two basis points on two-year. four point 1585 the hold of friday -- 4.1585 on friday.

on the euro, 1.10. the fed decision wednesday followed by the ecb thursday. it was written that we do not have high conviction in the may catalyst of a fed pause but we think there will be ecb and fed divergence over the coming three to four months as the ecb has more work to do and less banking tension uncertainty. i don't think he is the only one that shares that new. tom: he really carries weight. perfect timing. we see the euro yen breakout strong, weak yen. it is a huge deal against strong euro.

explain to mere mortals of what the euro yen breakout means. >> we have had a situation where we had significant baking tension -- banking tension. and we have had relief from that. euro-yen went up 4% or 5%. there are banking tensions in the euro zone pushed to the background. in the u.s. it is more complicated. very significant movement and we have elevated speculation about whether japan will do something. incredible volatility around bank of japan meetings and another one this week. now the new bank of japan leadership is essentially signaling they will still be patient. they are signaling they are not in a rush. those other things pushing

euro-yen significantly. tom: and 15 years your book was definitive on what the euro, has europe escaped eurosclerosis? experiment coming out of the advent of the euro, had they escaped permanent unemployment and found a more anglo-saxon rocks terry -- prosperity? jens: when there is a crisis in europe the leadership comes together. the coronavirus episode was another example of them doing more and next-generation eu funds being dispersed around the european union to support countries that need it. we have essentially a degree of union building and that was something that was missing. that is certainly helping.

there is talk about having a banking union. when you have tension there is focus on supporting the banking system in various ways. we are not there yet. one thing that is important and different from when i wrote that book is we have those political tensions that caused uncertainty about, do the different countries have the willingness to do what it takes to stay in the euro zone? we don't have those debates in the moment. there is no debate and italy or spain or other countries leaving. if you do opinion holes -- polls , it is something that cements the euro status despite the difficulties there is with integration. lisa: this is why a lot of people earlier said european equities in particular were a place of brightness for the year given not only all of this potential optimism but the idea

they are not as tech heavy at a time when there would be rotation out of that. it hasn't worked out that way. big tech continues to lead in the u.s. will they create something to rival the tech giants in the u.s.? jens: european stock trade, in the banking space has worked out. bnp has recovered and up significantly on the year. the fact that interest rates are rising and the banks have done well, it europe doesn't have a banking sector -- tech sector to speak of and the u.s. will be leading that. we have a situation where it european equity markets have outperformed the u.s. equity markets for the first time in a long time. don't forget that we had a situation where last year we had a very serious energy crisis in

the euro zone and now energy prices dropped very notably. part of the reason why we had the euro strong, european stocks can do well this year is that the energy crisis has abated and consumer confidence has come back. services pmi have risen over the last months. we have really recovered from that energy shock and away that supported the european economy. the ecb is facing inflation and the combination of to fly -- high inflation and growth means they will have to continue to keep going. lisa: it sounds like you are bullish on european banks and equities were broadly as well as the euro. jens: i was tweeting aggressively a month ago and i did a summary tweet yesterday and there was no particular reason to think deutsche bank was about to go under and we have recovered from that

dramatic shock. there is still some reason to think we are out of zero interest rate world. for the euro, the ecb will support it. the big question is what is global growth going to do? that is super important for the dollar. we have some question marks in the asian markets. tom: on his china fit into speculating or betting on a given currency pair? which pair gives you the greatest efficacy to play your china gas? -- guess? jens: china stimulus, growth recovery, currencies like aussie dollar. we had a period in january and february where china linked assets all around the world from casino stocks to tourism, all rallied hard. now we have come to a point

where it feels that some of those trades are fully priced and the longer-term growth concerns starting to feed into price action. we can see that in chinese equities rolling over. it is kind of one of those things where perhaps we got it fully embedded and stopped to look at the medium-term picture in that short-term shock. tom: so are you saying that -- is the best pair for a china guess? jens: both of the assets that are moving. we have very high frequency tracking of chinese growth where we look at what is the momentum, and we can see at the end of march when we had a peak in chinese growth, over the last three or four weeks we have seen real momentum in the chinese economy peak out. therefore you have to be more careful with those sort of china

growth assets right now. jonathan: wonderful to get your perspective on that. jens nordvig there. you got a bottom in the currency in the euro-dollar and a couple days after that at the end of september, the euro stock bottom and then it is now up 50%. outperformance has been phenomenal. from jp morgan, we are remaining europe versus the u.s. for now. the time to take profits on the trade is approaching. we talked about the outperformance in tech to start this program and we are all thinking the same thing, can that continue? another is the outperformance regionally. within the u.s. tech outperformed. when you look at things geographically, europe outperforms. does something have to give here?

the time to take profits on the trade fast approaching. tom: it is easy to make alpha off the bottom if you guess it right. you have to get it right and up goes tech and you mentioned facebook, meta is up. i am looking at the biggest thing in the room, which is china and the arch that is, -- arch bet is do they deliver 6%? lisa: let's say they do have 6% gdp growth and they achieve that which some houses on wall street have upgraded it to, will that give the boost to the global economy many people are expected? tom: what does polasky say? jonathan: to lisa's point, this

is what timeframe you look at. it is about whether we have those kind of numbers year. when you look at the market and what we are pricing, it is what i read responding to, focused on? the days of focusing on 5% or 6% might be fading and now we might price in next year and think about the economy and gdp fading. lisa: the year-over-year comparison is fairly easy when it comes to gdp, happens on a longer trajectory and really high unemployment and the younger populations causing stress internally. a lot of questions and that is the reason why it where the most notable moves is how much oil prices have declined over the last couple of weeks spite the reopening. jonathan: aro, google, microsoft wednesday, -- let's go to

google, then microsoft wednesday. tom: bezos structuring or pandemic restructuring at amazon is maybe the great story we are not talking about. they have to report on that. i have no idea what we will hear. other than they will raise prime $10. jonathan:, much is it? tom: it is like 100 something a year. do you know at the currency of oz over john is, -- azerbaijan is? it is cheaper than paris. jonathan: a street race. tom: like monte carlo. jonathan: equity futures down .2%. yields lower by three basis points.

lisa: keeping you up-to-date with news from around the world with the first word, i'm lisa , mateo. possible presidential candidate ron desantis met with japan's prime minister. desantis said he appreciated japan's effort to boost defenses . japan has increased military spending in part due to china's threats toward taiwan. the u.s. has asked south korea not to boost chip sales in china. that is according to the financial times. beijing has launched a national security view into micron, one of three dominant players in the global memory chip market. samsung and -- are the other two. richie sunak's government will try to clear the void of the

lobby meeting with major business leaders and investors after it dozens of companies with the confederation of british industry. there allegations of rape and sexual misconduct by staffers. the end of the line for bed and beyond. they will close -- bed, bath and beyond. they will close stores and the company filed for bankruptcy protection. they employ 14,000 people in the u.s. and puerto rico. global news 24 hours a day, online and at quicktake on bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm lisa mateo, and this is bloomberg. ♪

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>> growth continues to slow and that continues the pressure across profits and put us further into this earnings recession we have been in. nothing is collapsing.

there are fears the carryover from the banking crisis and things would fall apart. that is not the case but things get worse. jonathan: and tested to hear from the deputy cio. lots of tech earnings in our future. later this afternoon, you will hear from verse republic, a bank that got into a lot of trouble in the first quarter. we can put numbers on the trouble over at credit suisse in the first quarter. tom: i want to go back to dan suzuki. that is the sentiment out there. ben whaler nailed it in his note, we are talking about this poor sentiment from richard bernstein and dances again -- and suzuki -- dan suzuki. jonathan: i think it is time for new leadership and a very different equity market to be invested in. tom: the week, i will take it

over to may 4 and the apple earnings as well. we have to have team coverage of what we do in switzerland that is always the case. manus cranny always ponies up for the zurich $25 bowl of parsnip and coriander soup. that is how expensive zurich is. let's start with credit suisse behind you and ubs off of your right shoulder how many bodies will go out the door? mannus: probably enough a lot more than you, myself and john anticipate. the dissection of this institution was around 9000 jobs. by the time the new incumbent, returns to ubs, many years ago we sat down in an interview and he said i have to lay off 10,000 people and it never got there.

the numbers will be much more than 9000. if you want to understand the smell of fear, it is in the price tag of 61 billion swiss francs walked out the door of the bank. that is nowhere near as brutal as the implosion in the fourth quarter, a stench of liquidity or lack thereof. the $60 billion is nowhere near what the market anticipated. the question, what did you get from the institution here that has seen over $170 billion go out the door and the space of six months? that is a risk to the trade. how do you draw a line on the stench of the exodus? jonathan: that number that you put on the fear of q1 was much smaller than i thought a lot of people think it would be, $69 billion.

what are you hearing about this? did the regulator get to scared? it didn't sound like 69 billion of outflows, it sounded more than that. mannus: it did or you have to look at other numbers. credit suisse had to draw down $100 billion in liquidity and have warned clearly there would be further substantial losses and the liquidity lifeline given to them by the government was something they may well have to tap again. there are two different types of money out the door. one our deposits. the flick of the switch, gone within minutes and hours and more important set of assets we need to consider are the sticky assets which are part of the institution that has been around or 160 years. this is one of those moments where every mouth manager are

knocking on the door and this is the moment where the risk to this institution is not just a dissipation of assets under management but rose up into something much bigger. that is the risk to the big trade. it is less than the 100 billion on the street but the rich don't hang around when they smell fear. 57% of outflow is process from wealth. lisa: a lot of other people walked out the door, including the talent on the money management side as people try to gauge whether or not ubs will offer credit suisse individuals jobs. what did we learn over this particular earnings system about how difficult the integration process will be for ubs and how they will want to expedite it? mannus: you had one individual, and there are many, but i will focus on one.

this is the moment and you are the sole leader of wealth management as it stands in ubs. we understand he has been on the road in asia. asia will be the battleground for the super wealthy across china, hong kong, and asia and to keep them is to keep that. european money will be harder and i have tried to move from one institution to another. they promise a lot and a lot did not deliver. they owe me. tom: what are the good intentions of the zurich and swiss people? there is a less utterly structure maybe from americans to canada. how does swiss matchstick polyp -- domestic politics play out on those tubing -- on those two buildings behind you? mannus: politics is a dirty

business in every country in the world. politicians must be seen, heard, and they must defend the people. but the reality of it is, as much as the politicians make jangle the keys of angst and the government here, the reality is, this institution would have gone under. these small banks around here around the nucleus of zurich, they pulled the lifeline. that is what invoked the downfall of credit suisse. counterparty reaction, you saw it in 2008 and the politicians have to signal they are standing up and doing the right thing. that is their job. but when the battle is lost and

done, there are only three victors. jonathan: absolutely phenomenal reporting from zurich. manus cranny in zurich switzerland covering credit suisse. tom: ubs tomorrow, lisa mentioned it and maybe it is more important than the sadness of bankrupt or taking out credit is sweet, but what is more important is manus'street tread -- street cred. this is far more emergent condition but the stuff is a mess. jonathan: a big mess. and the numbers informed the conversation we will have tomorrow, what kind of institution? we understand the number at ubs but the state the bank was in when they took it over. lisa: perhaps it wasn't the worst case scenario but you see

flight and hesitance to keep working at a place where supposedly you will have an integration process that will cause a lot of layoffs and take four years. after -- you have to wonder what people are saying when they say treat ubs like a competitor. at what point is the message getting muddy? tom: these are well-meaning executives making it up as they go. here is a paragraph, dylan read, in 1991 and then in 1997 acquired by swiss bank corp. intern acquired by ubs in 1998. that is the kind of dealmaking that is the heritage of zurich to see 1, 2, 3, 4, and now this final blow up that has riled up the swiss people. jonathan: how much of the money that went out the door and

credit suisse in q1 went in the door at ubs in q1? i would love to know that figure. there say they will have relationships with both banks with the high figures. lisa: whether this is the logical place or look to others to diversify. we are getting a bunch of earnings. we got coca-cola and it came in massive with organic revenue for the first quarter at 12% beating the estimate of 9.6%. if you are one with pricing power, you can price upward and you can shrink so much. jonathan: do you want to see tom complain about that? lisa: you think you're getting a certain thing and then you are done right away. tom: it is called college tuition. jonathan: equity futures -0.2%.

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>> it is a really tricky time for the market because things are slowing. >> growth continues to slow and that pressures profits. >> there is great news praised integrate companies right now. >> if the consensus is talking about some sort of cliff dive moment, that is not happening. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa

abramowicz. jonathan: this is bloomberg surveillance on tv and radio. alongside tom keene and lisa abramowicz i am jonathan ferro. your week is going to look a little something like this. after the close later we get first republic. terrible quarter. then later in the week google and microsoft. on wednesday meta, facebook. on thursday, amazon. next week apple. tom: i will steal from the beatles, eight days a week. maybe it is nine days a week to get to apple. each story is different. i am off the google story and i am fascinated how google may have stumbled in the last year strategically, how they frame the story forward? michael: consumer -- jonathan:

consumer price tolerance has been a thing over the last two years out of the pandemic. getting another flavor of that this morning. lisa: i am looking at coca-cola. they beat expectations. their earnings-per-share was $.68 versus $.65. they beat on how much the revenue has increased. how much is this because they are able to choose prices, they will shrink the cans used to get eight ounces the dow you get four ounces and you pay the same. you get all of the tweaks and you have earnings that are better than good and you are seeing that and a number of big brands. tom: she is fired up. up 7% pre-pandemic. up 70% off the bottom of the pandemic. we will all die and no one will drink coke. boom. jonathan: tell us what you really think. lisa: i think on one hand when you get the pushback for getting

less and paying more and you see that with the airlines and certain consumer brands. the reality is we are not seeing it in a dramatic way yet in certain categories, which is the reason why everyone comes on and says they're looking for companies with pricing power, that is what they are saying. who will give less and demand more? tom: why do we do this economic babble? it goes down to the banner on television. first quarter adjusted organic revenue growth of 12%. i have never seen that number and it is pricing units. you are right. they have maximum pricing power. jonathan: you want to talk about real pricing power? lvmh. we have a $500 billion company in europe. it is the luxury player. more than 30% year to date. tom: lvmh and her ms. together

-- and hermes together make up 21% of the cac 40. i even said cac 40. jonathan: when is the last time you said that? tom: ken prewitt and i used to argue, he would be quoting the cac 40 and i was like nobody cares. there is. jonathan: lvmh is 13% of the cac 40. tom: is this the new goat -- lisa: is this the new gold? i wonder how much of this is being driven by revenge spending of people in china who can suddenly travel and go out and i wonder if this is the main story behind some of the luxury spending and the fact that people who are in the upper income gained a lot more during the pandemic and now having to

spend. jonathan: it was interesting what patrick haas said about this. he rode the wave and then he sold it. the interesting about the why, why he sold it. the second point was once a company rallies this much he thinks there will be pressure on lvmh to make another big acquisition. tom: that is why they did the deal last week. i hear about this all the time. i am an amateur. good morning to any number of people in new york who have helped me on luxury finance. there was a day when not all but part of laura p anna was taken out and no one in the industry has ever recovered from that billion dollar transaction. what would they pay for you name it? tom: we did try naming it on friday. we went through along list of luxury names. lisa: we cannot find one for them to acquire.

tom: that they do not -- jonathan: that they do not own already. tom: i've never been and. -- i've never been in it. jonathan: staff wealth. tom: no labels, no branding. it is like a succession thing. jonathan: your equity market looks like this. tom: i got the san diego padres and the red sox. [laughter] jonathan: let's get to the equity market. -0.1%. yields in three basis points. 3.54 on the 10 year. lisa: a quiet day ahead of big earnings. we have chicago fed national activity for march. u.s. dallas fed manufacturing activity for april. do we see the same resurgence we

saw in last week's pmi? then we get the change in vix index that people have been looking at. the markets organization is creating a new one that might reflect the day-to-day volatility better. so far we're not seeing any kind of indication from the benchmark index we will see an increase in volatility, which has a lot of people curious. aftermarket we get first republic bank earnings which will give some indication there. jonathan: joining us is senior vice president at federated -- i want to start with what you are looking for and whether you expect those names to validate what we have seen so far in stock performance this year. linda: thanks for having me. you just mentioned the vicks being low. one of the reasons is the vicks -- the vix is heavily weighted

by these names, some of which are big tech names. those names will do better than fair, that is what we are up against now. it will be hard for tech companies to give us earnings that would surprise enough to move the stocks since it is a crowded trade right now. tom: with immense respect for federated's ability to be in the equity market, is this a bull market? linda: i heard you say earlier today that we are in a bull market again. we believe we are still in a bear market, a mixed market. we think we have seen the worst of it. what we are in is a slow-moving market, and we continue to believe in federated hermes that we will be caught in a wide range and probably for another

nine to 12 months we are looking at a 1% gdp this year and next. i've been thinking of a fun word to describe this is slowflation. slow growth and inflation that will be more stopper than you would have liked. tough to be a bear. lisa: you talk about tech and how that has led indexes. you talk about the s&p market weighted cap it has outperformed the equal weighted cap for the quarter going back for the first time since march of 2020. i am wondering whether that has to reverse, whether that has to right size itself. those behemoths are generating so much cash and are still demonstrating a lot of sales. linda: that is the problem. it is tough to make a big bet like that against behemoths that are doing so well. it is great to see that at least

they are joined by a staples company, coca-cola. the big behemoths will carry us through a slow growth environment. it is hard to see a big increase in terms of the stock price when you are such a behemoth. what it does is protects our economy from what could be a bad recession. they are in such great shape and as you've already mentioned there is still so much money on the sidelines into consumer pockets so they can pay up for those little cans of coke. jonathan: have you noticed everyone says the same thing, let's play defense, and then they have different definitions of defense. some state's utilities and health care, others say tech, others say it is luxury. what is defense to you? linda: that is interesting? what is a bank? a bank used to be a bank in now a bank is a tech stock. for us defenses it is a turtle

who wins the race. it is a company who is mature and has a lot of market cap, a lot of cash to weather their way through different difficult environments and strong enough to give you a nice income stream. jonathan: i think we lost that connection at the very end of those comments. i think we understand where she was going. what defenses to linda and what defenses to other people. tom: this is inflammatory. how do you participate scared stiff? that was x months ago. covid. the bottom. how do you participate now after recovery and how you participate when you not participate in the bounce after the pandemic? those people have regret for what they missed in the recovery and that is why you have to build confidence to get in the market now.

my answer is triple leveraged cash flow. jonathan: there all of tension. the s&p 500 north of 4000. cpi up. unemployment -- can you reconcile all of those things? lisa: i cannot. there are people who say a soft landing is still possible that could involve a fed rate cut, but if you believe this economy is stronger than it has been heading into other recessions, hard to see why the fed would cut rates so aggressively. jonathan: drew matus and of metlife coming up in the next hour. your equity market negative about .1%. lisa m.: with the first word, i'm lisa mateo. house speaker kevin mccarthy says the chamber will pass his

$1.5 trillion debt ceiling increase this week. bloomberg has learned mccarthy has not yet lined up all the votes he needs. mccarthy told fox president biden must negotiate in order to avoid a u.s. default. last week the president called the republican plan wacko. another blow to president macron and his plan to enlist china's help on the war in ukraine. china's ambassador to france told french tv the former soviet states do not have sovereign status as independent nations and those comments triggered furious reactions, especially in the former soviet bloc countries estonia, lot via, and and lithuania. china has backtracked and said they respect the independence of those countries. in sudan, the effort to evacuate diplomats and other expatriates picked up over the weekend. the u.s. and u.k. military were said to airlift their officials to safely. a temporary cease-fire between sudan's army and the rapid support forces militia it has

battled since april 15 appear to have failed. the ceo of nbc universal is leaving after admitting to an inappropriate relationship with an employee. jeff shall says he deeply regrets the incident. he has served as ceo since january 2020 and work it nbc universal parent comcast for almost two decades. it is the end of the line for bed, bath & beyond. the chain will close all of its stores and liquidate inventory over the next two months. a turnaround attempt failed leading to the company to file for bankruptcy protection. bed, bath & beyond employs about 14,000 in the u.s. and puerto rico. i'm lisa mateo. this is bloomberg. ♪

>> i cannot imagine someone in our conference that would want to go along with bidens reckless spending. this is something everyone has had input in. we will hold a vote and we will pass it in sent to the senate. >> the repercussions are huge. what will happen? you will see interest rates go up for mortgages and loans. you will see the stock market plummeted again. jonathan: house speaker kevin mccarthy on fox news and a democratic strategist on the market, amy klobuchar on cnn.

senator klobuchar a wonderful analyst. jonathan: did you put that in? jonathan: market analysis from politicians -- last week speaker mccarthy did the same thing when he was taunting markets, trying to get a reaction. our number one president obama did the same thing. i remember the same thing. trying to encourage a to force people to something. it is a game i do not think people want to play. lisa: they want a freak out so they can say this is a problem. if you do not have the empirical data of money is getting lost, it becomes harder. tom: 2011 snuck up on me. i believe it was 2011. serious washington angst. it snuck up on me quickly. i wonder if that is where we are on this monday morning. jonathan: mike mckee talked

about last week. we got numbers on tax receipts for treasury. they have fallen below expectations. it brings the date forward. tom: will catch up with this right now and catch up with relationship transatlantic. john has led on this coverage. julie norman joins us at the university of college london on u.s. politics. i am taken by the distance across the atlantic. emmanuel macron has been avoiding domestic issues in france and i saw it in asian paper the idea of america as observer. what is the level of our isolationism right now? is united states of america going to be a global observer? julie: i definitely do not think we are at that point it i do not think china's read on us is quite right in that regard. we have seen that the u.s. is playing a key leadership role in

europe with everything going on in ukraine and were over will need to be a leader and how the world at the u.s. engages with china. not all of europe will go along with everything the u.s. posits on that front but the u.s. will not be stepping back on that regardless of who is in the white house after 2024. tom: what is the diplomatic stance the u.s. needs to do. are we patient and removed or do we need to be assertive to rebuild relationships with europe? julie: is a good question because i think both parties have a will to have the u.s. be seen as a leader internationally. you do not want to be on the back foot, you do not want to be leading from behind. at the same time there is an unwillingness to put resources behind that. that is what we are seeing from the more populist or maga of the republican party. the sense is is it worth giving

the resources to foreign policy some would rather see at home. it is hard to not spend those resources and still have leadership. i think biden has been leading into that multilateral role. if we have a change in the white house in two years that will look different. lisa: john was mentioning about this perhaps faux pas over the weekend, french media interview with the chinese ambassador talking about the potential for not recognizing former soviet states and their statehood as much as the rest of the world does and then trying to walk it back. what you make of this? julie: it did seem like a faux pas, but one you had to assume had some kind of strategy behind it. i think right now we see china trying to play different actors to their own benefit. that includes russia, that includes the u.s., that includes

europe. i do not think some in china will be shy about saying things they know will be provocative. that they know will push europe the wrong way if they can help them in some of their other aims with russia and walk it back when they need to. there is little bit of testing the waters going on. it is a curious statement, especially in this point to say that. i doubt that is when they will be coming back to but it could be a testing the waters sort of move. lisa: you said something compelling, that they might be looking to curry favor with russia. you get a sense of what the relationship is, not just russia relying on china, but china on russia for strategic or lines of trade perspective? julie: you said it. russia needs china much more than china needs russia. right now china is taking advantage of the moment.

they know russia needs a market for oil, for cheap energy, for cheap exports, and so china is taking advantage of that. i think this performative romance relationship we see highlighted, i think that is a bit overstated. to me if the war in ukraine, if russia becomes too much of an albatross for china, i do not think they're going to stay but it up where they will use it to their advantage. china is savvy about being nimble with their relationships, taking advantage where they need to but being able to pivot out when it is not going in their direction. jonathan: we used to call things like this will for your diplomacy. is this a return of that? julie: a little bit. china is figuring out what their new diplomacy will look like. they have never been at this place when they have this much maneuverability, this much strength, coming out of covid

and trying to find their footing again. they have a lot of influence on a lot of part of will world where they do not be poor and they have many more options in front of them. jonathan: great to catch up as always. julie norman of ucl. if you're just tuning in, some remarks from the chinese ambassador to france over the weekend that ex soviet states do not have sovereign status as independent nations. uproar in obvious places across europe and the response this morning from the foreign ministry spokeswoman saying "china respects the status of the former soviet republics as sovereign countries after the soviet union's dissolution." it made a lot of headlines over the weekend. tom: is a history lesson and it goes to what vladimir putin actually says. you have to look at what comes out of his mouth in these speeches. maybe it is lost in translation. he harkens back, not late

soviet, not middle soviet, but early soviet union expertise to an empire he desires to rebuild. lisa: what julie just said was that china is looking to curry favor with russia and that might've been an attempt to do that, given to them and say we are on your side, and then walk it back and say western nations that are perhaps more upset about this alliance, saying it was a slip of the tongue, and tried to play both sides, which gives you a sense of how tenuous this dance is. tom: they are currying favor except tim cook is flying around in india and china. people in china with the latest apple toy. i go back to lvmh who just made it clear hong kong is not where it is in the family will move across all of the major cities of china and they will do the louis vuitton thing and the rest

of it. that is just as important to me is that you diplomacy. jonathan: the treasury secretary put it simply when janet yellen said there would be no decoupling. tom: a name bloomberg surveillance knows. catherine mann owns the high ground on this on this linkage of business china with business america. does that trump all? jonathan: the link between business europe and business china will be tough to break, if they do try to sever it. s&p 500 -0.1%. kick off the week with a lot of earnings, coming up. ♪

jonathan: slowly moving off the bottom. your equity market almost unchanged on the s&p 500. welcome to the show on tv and radio. negative not even 0.1%. unchanged on the nasdaq. almost flat on the s&p. two year yield north of 4%. we are down a couple of basis points to 4.1628. the fed goes quiet into their fit decision. next week on wednesday teeing up a 25 basis point hike from the federal reserve, and then what? tom: i remember when it was quiet.

jonathan: the briefcase looks heavy. that kind of thing. tom: you're right. we have to get to may 3 in the jobs report is after that. we have gdp report now. in maple -- jonathan: may 4 the ecb. everyone lining up to say the same thing about the ecb, they will hike more than the fed this year. seems to be the direction of travel. lisa: would you say the most consensus trade islam euro-dollar? jonathan: yeah, and overweight european equities relative to the u.s.. jp morgan starts the week writing about that and they finish with this line. "we think the time to take profits on the trade is approaching." there are a lot of consensus trades. we talked about the overweight

of europe versus the united states and within the u.s. tech versus everything else. lisa: the contrarian trade start to emerge. we were talking about coca-cola and shrinking cans of soda. they did a report their first quarter, organic revenue growth the dramatically surpassed expectations, up 12% in the quarter. that was the estimate heading in. those shares not up that much. a 1.4% gain. those shares are range bound. even some of these stalwart consumer names not exactly doing gangbusters this year. ubs shares, adr rising 1.6% ahead of the open. this on the heels of what we saw from credit suisse. john, you said it does not seem that much. $69 billion in outflow relative to the emergency rescue. maybe this means he'll be easier for ubs to acquire credit suisse

and make it work. tom: tomorrow they will speak to the swedish people like manus cranny did, but the bottom line is to they drop a bomb and say this is our first layoff number come our first rightsizing number. lisa: the one bombshell would be if they gave you a new framework for how long it would take and it is a lot shorter. they might get a sense of that. jonathan: the pr story will be fascinating because of their inflows look tremendous relative to the credit suisse outflow and you put a number on credit suisse, what number was it in the end? lisa: they paid $3 billion? jonathan: whatever it was. credit suisse and ubs, ubs has to come across about the savor of swiss banking and not someone who got a maker deal from the regulator. lisa: one more stock. bed, bath & beyond. tom: is it finally done? lisa: is a meme and how quickly

it is going down. it did file for bankruptcy. it is going to liquidate all of its stores. tom: i thought they have been doing that for 10 years? lisa: we saw that with david's bridal. they filed for bankruptcy. tom: is that like susan's divorces? great store. lisa: i will let you discuss that in a moment. if they do not find a buyer imminently they will close all their stores. this is different. tom: can we pause. lisa: and talk about susan's divorces? [laughter] tom: how many kids sitting on a couch with the laptop lost money on this garbage doing the meme thing? how much money was lost by people doing the meme thing with bed, bath & beyond? lisa: i wonder if people will

miss going in on those long shelves going up to the ceiling covering all of the very industrial fixtures? that was the whole thing. jonathan: there is clearly some brand value in that name. interesting to see what happens. a lot of people said the same thing about toys "r" us. lisa: and blockbuster. jonathan: there you go. tom: let's jump in with ed al-hussainy, senior analyst at columbia thread beetle. i love how he finds a strategic tone to the reset for 2023. 2023 on timing, scale, and scope. the magnitude and timing all tied together. what is the timing scale and scope of jerome powell as he confronts the rest of the year? ed: is a tough juncture. there are so many unknowns and if you look at the past six months the degree of doubt around what is driving inflation

, how quickly monetary policy from last year will constrict the economy, and now what will happen with the devolving banking shock has amplified what the fed is facing. in many ways doubts at the core of the fed's reaction function. jonathan: there seems to be some confidence inflation will come down. there is a debate about what price we will pay for it. do you think we should be confident inflation will return to 2% anytime soon? ed: i think there is a really good chance that is going to be the outcome. the question is what is the timeframe for that? the fed is in scope for that to happen over the next several years. market pricing is confident that will happen as early as the beginning of this year, the end of next year. the direction of travel is clear. the fed's conviction around bringing inflation down to 2% is

clear of the timing is a huge question. jonathan: there is one other inconsistency. we have priced in all of these rate cuts. at the same time people have the view we get a soft landing. why would the fed cut rates in a soft landing? ed: market pricing is essentially a probability-weighted view of the world. the fit cutting 25 or 50 basis points before the end of the year, there is a much higher probability the fed will cut 100 basis points if there is an accident or could zero if inflation is sticky. market pricing is a weighted average of that. will the fed cut in the event of a soft landing? what matters is they have conviction inflation is coming down. if inflation is heading down towards 2% rates are too high. if it is stuck above 2%, right now is running closer to 4%, the odds rate cuts will be on the rise are quite low.

lisa: what kind of accident would be enough to make the fed cut rates? ed: in my mind the labor market is key to the question. we are starting to see signs of slack at the margins of labor market. wages have started to slow. so far it has been a picture of overall health. the labor market turns very quickly. if we start to see the unemployment rate creep up, if we see wages decelerate towards the end of the year more than they have over the last 12 months, that'll be a strong signal to the fed they have done enough. lisa: that is not an accident. that is the design. to get unemployment higher to bring inflation lower. if this was not enough to get the fed's attention, they did flick the silicon valley bank and what happened. it seems to be contained. has the idea of an accident been taken off the table? ed: that is a really good table.

the accident comes through the lens of financial conditions. if there is a disorder in the -- if there's a disorderly widening of credit spreads, a change in conditions, you will see the fed act and bring forward the easing cycle. are those things predictable? no. tom: let's do a basic fixed income monday morning retail question. now that i garner a coupon, nominal or real, can i own longer duration, grab the coupon out there, and wait, and even if i see price go down i have the coupon. are we back to that mindset? ed: i think it is very attractive. the key question for retail investor is am i going to park in cash versus longer duration assets, whether high-quality credit or treasuries. we think extending that duration

right now. tom: give me a number. ed: anywhere between 3.5% or 4% on the 5-year note is attractive and you can add to that if you're looking at credit. tom: the idea that a pro is looking at a five or six year duration where in muni bond 20 years as a short-term. jonathan: if i can take one thing away from the conversation, what you said about the market pricing cuts being a weighted average of range of views is so important. gershon distenfeld talked about the same thing. this means either we have priced in too much or not enough. lisa, think that is the problem neil dutta has. he is much more constructive on the economy than a lot of people saying recession, recession, recession. he is saying if you have a financial accident it will go way beyond what is priced in but if nothing happens they will hold and do exactly what they

say. i wonder how much we are making of this gap between the fed and market pricing? you think we are making too big a deal? ed: i think that is right, it is not a big deal. there is a gap between terminal pricing. it is possible they go more. inflation has been moving sideways. beyond that when markets are pricing seems quite reasonable. it puts the front end of the treasury curve and makes that a little bit rich. the moment you get to the five-year at the 10 year on the curve those look quite attractive to us. jonathan: always smart. rate to catch up. lisa, what you make of that? lisa: we are in a soup and right now when people are trading and market pricing is trading round these ambiguities, we have no clue what she was going to drop next, and if no shoe drops we are in a strong economy and could get no recession and no

need or a light recession. it is a messy moment where people do not know what is happening. peter scheer eroded great. "road to nowhere." he says i am not excited to write because i am not angry enough to write. tom: not -- jonathan: got angry enough to write is the title of peter tchir's research note. coming up we will catch up with gator -- dana peterson of the economic outlook board. that is just around the corner. lisa m.: keeping you up-to-date with news from around the world, with the first word, i'm lisa mateo. possible presidential candidate ron desantis met with japan's prime minister. it was a chance for florida's republican governor to burnish

his foreign policy credentials. desantis said he appreciated japan's effort to boost its defenses. japan has increased military spending in part due to china's threats toward taiwan. in the u.k., prime minister rishi sunak's government will try to fill the void created by the implosion of the countries main business lobby. rishi sunak meets today with about 200 major business leaders and investors after dozens of companies quit the confederation of british industry. there have been allegations of rape and sexual misconduct against cbi staffers. the u.s. has asked south korea not to boost chip sales. beijing has launched a national security review into micron, one of three dominant players in the global chip market. south korea's samsung and sk hynix are the other two. lvmh has become the first

european company to have a market value of more than $500 billion. sales to china and a stronger euro have boosted the luxury goods making. the rising value has turned the ceo into the world's richest person. according to the bloomberg billionaires index, he is worth about $212 billion. credit suisse reported $69 billion of outflows in the first quarter and took a large write down in its wealth management unit. all of that underscores the challenge following the emergency takeover. global news powered by more than 2700 journalists and analysts in over 120 countries. i'm lisa mateo. this is bloomberg. ♪

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hand tale side of the u.s. dollar, so the only way to get u.s. meaningfully higher is starting to price in recession and we do not think that is in imminent factor. jonathan: luke kawa just phenomenal. looking for a stronger euro outperformance in european equities. that is where the outperformance has been against the s&p 500. zero stoxx 50 absolutely crushing it. the equity market is negative zero point 1% of the s&p 500. i am happy to offer the guide for earnings. tomorrow microsoft and google. wednesday you will hear from meta-. thursday amazon. next week apple. tom: i miss luke kawa. he is always awesome. he is the youngest brightest guy

we know. this may be the year where the leafs have a pause. jonathan: lisa and i maybe not the appropriate person to discuss it with. tom: they have taken two from the hugely wonderful tampa bay lightning and the answer is maybe this is finally -- i do not think luke has ever seen the maple leaves win. jonathan: he was happy. let's put it that way. . and the knicks got it done yesterday. basketball experts. tom: let's go to someone who knows what they're talking about. steven englander. i have to go to 60,000 feet. i saw in the economist this weekend, the death of the dollar. you are a child and talking about the death of the dollar.

how close are we to where we would lose the power of the dollar as a controlling exchange? steven: first i have to talk about important things. since i am from montreal i think the maple leaves have got what they deserve the last 30 years. with respect to the dollar, i think any kind of dedolarization is going to be limited and very slow. on the other hand, we see the business cycle turning against the dollar. we have seen european equity markets and global equity markets outperforming u.s. equity markets. we do have this concern in a big part of the world about how safe their dollar assets will be in the event there is a geopolitical issue with the u.s.. a slow process of

dedollarization does not mean a slow process of dollar weakness because the u.s. still has funding requirements. all you need is to have less money coming in. tom: for our corporate audience you have to hedge every transaction for safety, is there value to hedging foreign exchange transaction right now or is it money wasted? steven: there is always value to having some hedges. once or twice fx strategists like me have been wrong in our forecast. more than once or twice. i think just to lower the volatility of your earnings you want to have hedges. even at 1.10 against the euro, the dollar has room to weaken. maybe it is a story of hedging glass. lisa: i am looking at the idea

of central banks and whether they turn to the dollar as a reserve currency, and to build off what tom was talking about. there was a story in the financial times about how cold purchases by major central banks have risen to the highest since 1967. you can see a lot of them are going to continue to build gold resources. you get the sense there is a sudden concern on the part of major central banks about the use of the dollar as a reserve? steven: i do not know if it is a saturn concern. -- i do not know if it is a saturn concern -- i do not know if it is a sudden concern. we started with sanctioning sudan and now the use of sanctions has broadened. any country that things they might be on the receiving end of u.s. sanctions, it is not as if they can get out of dollar quickly, with hair cut discount

dollar assets and try to avoid them if they can. it is not as easy as it looks. on the margin they are looking for alternatives. lisa: you think there is a weight on the dollar that have not been there before that it cannot rally quite as much in periods of global research a recession because it is not going to be the go to place -- periods of global concern or recession because it will not be the go to place for the banks. steven: people toss around the word recession, including me. what most of us are looking for is sluggishness. a technical recession but nothing that looks like the middle of 2020 or 2008. with that kind of sluggishness, i think you are still going to be on the dollar weakness part. i think on top of that you have all of these other factors,

including the outperformance of equities. for a long time the attractiveness of the u.s. equity market has been a major force bringing money into the u.s.. now there may be better places to do it. in addition to the geopolitical issues and in addition to the debate being about the fed pause or when they might begin to cut. the dollar is kind of expensive to have all of that weight on it right now. tom: the standard chartered mandate is the mandate of emerging markets. there is a romance to the history of the bank. which lesser em currency gives me the best big figure return? steven: in asia we like indonesia, we like malaysia, we like the high-yield or's. we think those will be attractive. in emerging markets we like brazil.

in latin america we like brazil high-yield or's. if the world outside the u.s. is recovering. it is better down the road. tom: appreciated. -- jonathan: appreciate it. steven englander of standard chartered. we go back to september, what were we on euro-dollar, 95? we were talking up cable parity. it has been a monster move in risk has moved with it. we have the stress at the end of september. equity market weakness started to come through as well and then that started to resolve itself. lisa: how much of this is because of energy and the warmer than expected winter and how much is china reopening, putting all of money into the european economy, them being behind the u.s. in terms of the fight of inflation. you put that together, it makes sense. tom: we spend most of our time

looking at interest rate differentials, what will the ecb do. the usual central-bank parlor game. steven englander is talking about flows of money. the flows of money have been i have to buy apple. the money flows into the united states. is that marginal flow broken is the big question 12 months out. jonathan: we have heard the reference to the dollar in the last five minutes. we should probably get stephen on to talk about it. on the one side of the dollar smile you have the u.s. exceptionalism story. on the other site you have everything really bad. dollar strength. it is the everything else bad part of this people are not confident about. luke kawa talked about it. you can have a situation where u.s. growth slows in the world is still ok. if china gets into trouble we have a different story but we do

not see it happening because of the growth we have seen in china off the back of the reopening. lisa: i will say something a little sacrilegious. macro stories right now i am having a hard time with because you can come up with any macro story you want. when you say things will be bad, what areas? if you have something bad in manufacturing but not services things can be ok. what will qualify as bad enough? you can use the data and get a completely different market reaction. tom: there are tons of narratives out there. stephen at morgan stanley, he is talking up dedollarization as a concept. jonathan: i remember doing a conference with him and it was an absolute clinic. the guy is awesome. should try to catch up with him again. drew matus coming up.

with your s&p 500 negative about .1%. ♪

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one >> there is a lot of fears of the carryover from the banking crisis and things are going to fall apart, that's not the case. >> we are starting to see some

stabilization. >> our view is the fed will be torn with the unemployment rate starting to rise and a goal of 2%. >> the fed is cutting and the economy is not so good. >> this is bloomberg surveillance. tom: good morning on television and radio, a monday toward an earnings season and a fed meeting and i'm sorry, i look at this monday and it's a 12% organic growth. what will be the other surprises this week and earnings? jonathan: tons of earnings this week. mega cap tech is part of that story but i'm interested in putting some numbers on the drama of the last quarter. we did that with credit suisse this morning and ubs tomorrow. first republic after the close in last significant name for the drama of the last three months

in the banking sector. tom: it clearly shows regional bank tensions. the regional smaller bank chart are two different rules. jonathan: there are little inconsistencies that don't really hold up. the vix has come in yet you also talked about financials which have not recovered. lisa: as time pointed out, the regionals, even after you got numbers, that haven't been that terrible or horrible surprises but on the flipside, there wasn't anything to give people optimism. the business model was flawed at times dead it at -- at a time when the banks had to struggle with deposits. tom: i didn't realize that this

idea of 12 months trailing standard & poor's down and nasdaq, i think we are all set with gloomier outcomes than what the number really was. jonathan: it's been phenomenal on the nasdaq. i think we are up about 15% but across europe, the cac 40, we haven't talked about it once in five years. we've done it a couple of times this morning. it makes up 10 -- more than 10% of the index. the cac 40 is up 20% year to date. tom: we do this with the idea that it started in 1987 and it was an index in paris before that and they went to some form of digital trading back then.

i can't say the french name. lisa: and emmanuel macron in china having a nice discussion about trade with g zheng paying -- g jinping -- xi jin ping. tom: can we get a belief on the euro? they are looking for $1.15 euro. jonathan: it's about the moves that have materialized. we have to go back to the conversation. it's kind of time to close out the move. consensus overweight europe, we

get it. we've seen big news already so is it time to close the position. on the s&p 500, negative 0.1%, no drama here with yields at three basis points. the euro through $1.10. the currency bet is positive 0.1% and crude is back in the 70's but not doing much this morning. tom: drew mattis joins us now. he has an optimistic tone on the american economy. we underestimate the technology

overlay of the united states of america. you have a more optimistic tone on risk right now and part of it is because technology? >> i think so, we have a recession to get through. everyone who said there was not going to be a recession is now saying there will be and there is some dour momentum in the economy but will we come out of it and how good will it be? it could be as what we saw in the 1990's. when we come out of this recession, you should see a return of the higher labor force partition rate and older workers returning, workers staying in the workforce longer because they will be healthier and you will see productivity gains from the technological advances we had made during covid. jonathan: what do you think the catalyst to return will be? >> i think it will be a couple

of things, people are trying to figure out what to do with 35 plus years of retirement. with lifespans continuing to improve, do you want to sit around the house for the last 35 years of your life? most will say the answer is no. secondly, what can you do with the money you've saved for 35 years? you can do more in 25 years if you work an extra 10. i think people will generally be healthier with significant improvements. on the time i started work, people promised biotech miracles. they kept saying year or the year after and we actually saw some of them and we been so distracted by everything going on in the world that we haven't recognize that there have been significant improvements on how we can change what goes into your body and how to fix things and how to make people healthier. jonathan: so people will live

longer and they are with the decision. i'm trying to work out why it wasn't 8% inflation and it hasn't happened in a major way in the last couple of years? >> one of the reasons we haven't had inflations because no one expected inflation. if no one believes inflation can happen then it won't. it really takes a mindset change to allow for of inflation to occur. people don't think it's unusual for a price to go up 1000% but we are now seeing things going down. our flirtation with high inflation i think is going down we should be a level by the end of the year that is consistent with long-term in ration expectations. and we should be able to move on and maybe learn from the experience.

hopefully, the central bank will learn from the experience and make -- and time inflation is running high, maybe easing is not the right way to go. lisa: are you going heavily into fixed income right now and saying this is a great time to capture these yields if this is simply a flirtation with inflation? >> i still want to wait a little bit. you want to start looking at riskier assets whenever an -- when everyone else doesn't and that tends to be at the start of a recession. the people who convince themselves that a recession could never happen, that's what you want to buy when they are selling. lisa: what do you buy right now? do you stay on the big tech list? >> you just gather your nuts and pile them in a tree. things look good right now.

i don't think now is the right time to take a huge amount of risk because i think prices will get better as it becomes more obvious that recession is coming. you were talking about the vix earlier and part of the reason it's going down is because everyone is coalescing around a view and if there is not a dispersion, then the vix calms down a little bit in the view is congealing. jonathan: how expensive is playing defense getting? >> it's not cheap. you can play defense actively or passively. the cash idea is playing defense passively and you are getting compensated for it. jonathan: great to catch up with drew. tom: it's a bigger view. it's what it means for equities. when i look at metlife, it's a

longer term view. their short-term view is three years. jonathan: put that together with what we had from the imf last week. lisa: this is where some people are and you wonder how this is baked into market expectations. going into the sectors that benefit the most from ultralow rates -- tom: people are still talking about the imf five-year view. it captured the attention of optimism. jonathan: it was a bizarre meeting. tom: if the managing director was sitting here, i would say it's a bizarre meeting, how do you move forward? the answer is they've got to reset and the events will be so much of how they reset. jonathan: we need to reset as well and looking ahead to tech earnings this week and onto next

week when we get a federal reserve decision and a payrolls support for the united states. we will catch up in 20 minutes time with dana peterson. before we get there, here's a snapshot of the equity market. we look a little something like this -- negative by not even 0.1% and yields are slightly lower. there won't be any fed speak a quiet time for the fed and for those of you tuned in wondering why i am smiling, i'm so happy about it. we complain when they speak and we complain when they don't. lisa: keeping you up-to-date with news from around the world with the first words -- house speaker kevin mccarthy says they will pass the debt

increase this week but he has not yet lined up all the votes he needs. he told fox that president biden must negotiate in order to avoid a u.s. default. lastly, the president called republican plan blackmail. another blow to emmanuel macron. china's ambassador to france told french tv that the former soviet states don't have sovereign status as nations. those comments triggered furious reactions specially in the former soviet bloc countries. china has now backtracked and says it respects the independence of those countries. in sudan, the international effort to evacuate diplomats and other expatriate picked up over the weekend. militaries were able to airlift officials to safety in the temporary cease-fire between the sudan army and the rebel forces appear to have failed. coca-cola has posted first

quarter revenue growth that beat estimates. consumers were willing to pay higher prices for sodas and juices and energy drinks. the average price across a mix of products grew by 11%. it's the end of the line for bed, bath and beyond. they will close all of its stores and liquidate inventory over the next two months. the turnaround attempt failed leading the company to file for bankruptcy protection. they employ about 14,000 people in the u.s. and puerto rico. global news powered by more than 2700 journalists and analysts in over 120 countries, this is bloomberg. ♪

>> some of the bags had released a couple of weeks ago so that's a big signed all of these banks are preparing at worst for the beginning of a recession or at best, for a softening of the economy. jonathan: things are great but not terrible either. live from new york city, going into a big week for earnings with bank earnings later.

your equity market is not doing much last weekend this morning. last week, negative zero .1% and this morning, the same. yields are down three basis points in and around 350. we have stabilized a little bit, dare i say it? tom: looking at equities, bonds, currencies, it's not a snooze fest but stabilization captures it perfectly. maybe i look at dollar -- mexico, that shows you the stability. jonathan: looking forward to earnings later on and we will look at first republic. tom: wanted to bring in hermann chan. he is the bloomberg intelligence on regional banks but this is a guy with multiple bank experience including the privilege of working for mmt bank.

jonathan: it's a pleasure so give us some knowledge. first quarter terrible for first republican facing existential risks and panic. what are you looking for later? >> what we are looking for is the first quarter having been challenging. have the deposit stabilized going to the end of the quarter? and what's their plan because they need a way forward if there is a big hole in their balance sheet. will they sell loans and assets to shore up? will they look at other strategic opportunities? there are many questions heading into the quarter. tom: give us a window into management. the bank blows up in the old guys go out the door and they literally go out and find unemployed executives who are good people and the new executives come in to try to

right the ship so what do they do with the bank they don't know anything about? >> the folks you are talking about, the former ceo of fifth third came in to shore things up and there is a rolodex of former ceo's that are out there that the fbi see puts on hold to come in and take over and lead the institution. tom: for you younger people, rolodex is a little turning thing, you were to john. jonathan: i remember the rolodex. i lived it but thanks. lisa: helpful. i did read that story of the rolodex of former bankers. i'm curious about many of these banks will pass along the interest rate increases they see from the fed to depositors. one story by goldman sachs published over the weekend said

that every 10% drop in bank profitability reduces lending by 2% and this could potentially accelerate in a massive way due to the deposits. >> we are talking about deposit betas that prior to the svb fallout was closer to around 35 or 40% of all cumulative beta through the cycle of fed rate hikes. the banks that are weak -- that we are covering are talking about 40 or 50% of the fed funds to their depositors. that means funding because are rising will continue to rise in net interest margins are narrowing. it affects the profitability of these regionals and it's something we are watching closely. lisa: they had to pay up for deposits and at the same time, they are struggling with the loans on their books, about 40% i believe of the smaller bank loan book is commercial real estate. how much do you get a sense of

the pain of that? >> there is marginal concerned that the commercial real estate exposure will create loan losses for the group that it will be elongated and won't happen overnight. it will be a couple of years because these loans mature on a rolling basis. a couple of things raise their guidance for the year. the pressure is starting to come to fruition but it is something bit seems manageable at this point. tom: it's on the goldman sachs website, 4.75% 12 month cd and chases next to nothing in citigroup is less. bank of america is less than nothing. there are visibly a huge differential. jonathan: i don't think they

will try to compete. it's almost an expectation that they would work this thing around because there is concerned on deposits about return of capital and once they think about return on capital, it will just go somewhere else. can we finish with scenario analysis? if one of these major banks that tom mentioned wanted to buy first republic, how would that go? >> it would need the regulators blessing because the -- they tend not to let a large bank acquired regional banks anymore because of the sheer size of these trillion dollar balance sheets they operate. if first republic were to be acquired, it would be a regional that would take it over presumably. jonathan: i can understand why the politicians would be unhappy but why would the regulator the unhappy with it now?

would they be ok right now? >> it's more of an issue with the large banks that they don't want to make them larger. jonathan: don't we like that now? >> we do to a certain extent but there are regionals that have balance sheets. jonathan: any names in mind? >> i wouldn't presume but there are banks that have the balance sheet and the capacity. tom: pre-pandemic, jp morgan, $2.7 trillion, i think that's right. that's total assets but it's going up $1 trillion. they are getting bigger whether they play or not. these guys are embarrassed by their success. lisa: the good news is you can speculate and how much the regulars don't want the big banks to take over the regionals but the big banks don't want the regionals because they don't want to take on the liabilities.

that's what jp morgan did in this previous quarter. jonathan: that's a point lisa: lisa: well taken. i don't think they want them. it's true but we like big. that is the theme we keep hearing is that there is a sense the bigger banks are going to be more successful and suddenly in washington to, they are the white knights. jonathan: and they were a problem 10 years ago. hermann, thank you. in the next hour on bloomberg tv, great line to pick up this week with so many earnings coming up. we are actually going to do something interesting with mike shoemaker. -- schumacher. i think we've noticed the market is starting to adjust a teeny bit on the front end. things are starting to happen.

tom: we're going to visit the land of ira f jersey on this. jonathan: then we will talk about how that will spill out if the tension spills over. lisa: can you imagine if congress members talk about the t-bill market? they will say you should be frightened. tom: thank you for watching in the philippines today. i got an email from manila. this is like what brinkley used to do. he would lean back like this. jonathan: then you are off mike. tom: it creates space in the room. thanks for watching in manila. jonathan: do you think people want to hear space in the room? tom: absolutely. ♪

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tom: bloomberg surveillance, what an interesting monday morning. i had the plague for a couple of days but i'm better now. i missed a lot but as you said, it's a snooze fest but it's not. the narratives are amazing. lisa: they are corporate specific with actual information on companies with coca-cola passing along many things we are getting the sense that perhaps things are not as bad as we previously thought with marginal regional fed data showing the chicago fed national activity

index came in slightly better than expected in the month of march. still down but on the margins, we keep seeing this in corporations or the data. tom: real estate tomorrow with the case-shiller series. a couple of months behind but we will look for that. it's a big earnings week so stay with us for all that coverage. how can the tech guys come out at 4 p.m. and the banks come out at 7 a.m.? lisa: remember the one earnings time when all the big companies came out the same time? it's something john feels passionately about that they should come out after the bell to give us time to ours through it. tom: we have dana peterson who joins us on the state of america. where is your gdp statistic that we will see this week? we were at 3.2ish so give me the

conference forward statistic you were working with now? >> we are looking between 1.5%-2% growth in the month. we had a strong january in terms of consumer spending but february and march were pretty pathetic. we also think business investment continues to shrink as well as residential investment. the wildcards are trade and inventories which are not exactly while. tom: if you take out inventories and trade dynamics, you get into a domestic view. are we in domestic final sales recession now? >> probably not in the first quarter but we think the second quarter we definitely will see some negative readings. that will certainly be negative consumer spending and business investment and residential investment. lisa: have you been surprised at consumer confidence hanging in

there even though the economic data has not turned around more than it has? >> our overall measure of consumer confidence continues to move back and forth. it's definitely down from where it was from the peak last year or the year before. when you look at expectations, consumers still expect a recession at some point and had been signaling that for the last 12 out of 13 months. something is about to happen and when we asked ceos, they continue to believe there will be a recession and it won't be long and won't be deep but it will happen. lisa: how much is this consistent -- consistent throughout industries. >> when i look at the labor market, it's split into three pieces. you have the former pandemic darlings not doing so well like technology and retail and transportation and warehousing and finance but then you have the ones in the middle that are

not doing anything and then you definitely have those industries that are still adding workers. that includes health care and hotels and restaurants. tom: with inflation coming down, do we get an inflation adjusted wage that is level or increases or do we still have negative real wage growth? >> real wages are actually slightly positive now because headline inflation has come off. underlying inflation, energy is still pretty tricky and wages are slightly positive. we think with that, consumers are saying to themselves, at least gasoline is not as expensive as it was. it's not eating into budgets as much but food and other services are still pretty expensive. tom: i look at the back here of all the economic data coming

out. i believe we have to get to a fed meeting may 3. what matters for chairman powell and the rest of the voters at the fed toward may 3? what part of the new economic data will matter? >> certainly, this week's gdp report for the first quarter but also that pce deflator inflation, whether or not we still continue to see stickiness at the core orbits just a function of what we saw in cpi. also daily lending data from banks to businesses and consumers and see how much that dips because if it dips considerably, that tells the fed that maybe this is the last hike they will need to implement but if inflation continues to be a problem, we might be looking at two more hikes. lisa: we are speaking with dana peterson at a time of great uncertainty of where we are in this economic cycle. there was a lot of discussion early this year about whether we would go back to the low growth

kind of environment we had for so many years and if the rates would go back to that in the next few years. do you see that as a likelihood akin to what the imf has set the past couple of weeks? >> we think growth beyond this year will pickup but still be material below what we are used to seeing, probably closer to 1.5% and 8% growth and that's not the 2% we saw before the pandemic. inflation will be tough to keep down because there will be structural drivers of higher inflation. that means the fed will keep interest rates higher for longer in order to get inflation back to the 2% target and maintain it. lisa: so many people before this said this economy could not handle higher interest rates and suddenly, we are seeing ongoing road in the face of interest rates that are the highest going back to the 1980's.

people believe the fed will eventually have to cut but you say not really that much given how much inflation will pick up. what does that mean about what the right rate is? >> when i look at the economy, different aspects of it are behaving differently. if you look at the housing market, residential investment has come off and that moves first when the interest rates rise. business investment has come off a little bit and consumers have pulled back on spending on durable goods which are things they need to finance. the last shoe to drop his services and i think it will take some weakness in the labor market or even a belief that consumers believe they might get let go even though they may not and that should bring things back into balance. tom: you open this conversation by talking about sub 2% growth. can i assume it was part of

america is in recession and how big is the part of america that feels recession even though the gdp information is positive? >> people with lower incomes because much of their paychecks get eaten up by inflation but we all see worries among people who have higher incomes especially the middle class because they are the ones who pay the taxes and pay a lot in terms of inflation, they are meant very much affected. it's those groups that i think are feeling the pinch right now. tom: thank you so much. i guess it's a roll up up when a stock goes from 5-8 on its way from 5-10 with a proposal of $1 trillion capital over a name that we in the media know a lot which is get he images. this is the ownership of dam

near all of the famous photos we live with each and every day. lisa: trillium capital has offered a nonbinding proposal to buy getty images for $10 per share in cash. getty shares responded pretty dramatically ahead of the open, up 40%. this comes at a time of real question of how to generate value. they have stock images for media content that people use on a regular basis that becomes part of the framework of what we see and yet you have to get paid for it. tom: a tiny company, 200 employees or so and what's important here like the music copyrights, with these photographs, maybe the revenue growth is shaky but their key bits of margin is apple light, 32%. they are leaving taking out a

net income of $.10 on the dollar modeled out with a positive free cash flow. peel and musk -- elon musk would love a statement like that for twitter? lisa:lisa: there is the idea that a lot of hedge funds and firms in general are looking for ways to find incredible value in old companies. they really made their mark in a different kind of model for media. how do you get paid and generate capital at a time when people still rely on these images? they are also getting things for free online. tom: it's a small transaction but i i think it's emblematic of the ownership of digital product. they don't own this photo. this was just out on twitter. it's a birthday for his dog but this is not owned by getty

images. the level of cute here is off the chart. the beast is named after the great mahovolich. he was truly one of the best in hockey. he is three years old today and we say birthday greetings. lisa: it's basically an archetype of cuteness. tom: can you imagine when he starts talking bonds and fixed income? anyway, happy birthday to the beast. futures are negative and dow futures are -15 and the vix is under 18 would say thank makes it a bull market. no one has told me we got a bull market. 17.56, is it a bull market? i can't get a straight answer. lisa: big tech is been doing

well. if you look at some of these companies, they are of more than 70% year to date. the equal weighted index is not so much, more range bound. tom: can we talk about oil under 80? lisa: last week was a pretty significant decline in people expect to slow down despite china coming back online. tom: bitcoin sliding under 28,000. lisa: jon doesn't find that compelling. tom: he should guest the crypto show. lisa: you can let him know that. tom: stay with us, bloomberg surveillance, good morning. lisa: keeping you up-to-date with news from around the world, with the first words -- possible presidential candidate

ron desantis met with japan's prime minister in tokyo. it was a chance for the florida republican governor to burnish his foreign policy conventional's and he appreciated japan's efforts to boost its defenses and japan is increased military spending in part due to the chinese threat toward taiwan. house republicans want to resume construction of the wall along the border with mexico to deter migrant crossings. the homeland security committee is set to unveil a bill today that would require spending for border infrastructure and technology and would boost the border patrol from 19,000 agents-20,000. the foreign minister of ukraine has made an urgent appeal to the european union for more military equipment and ammunition. he spoke to the eu ministers by video link and told them there is no rational arguments why ukraine cannot get modern western combat aircraft. the ceo of nbc universal is leaving after admitting to an inappropriate relationship with an employee.

jeff schell said he deeply regrets the incident. he served as ceo since january, 20 20 and worked at nbc universal comcast for almost two decades. the replacement has not been announced. lvmh has become the european test the first european company to have a market value of over 5 billion dollars. the rising value has turned the ceo into the world's richest person. he is worth almost $212 billion. global news 24 hours per day powered by more , than 2700 journalists and analysts in over 120 countries, this is bloomberg. ♪

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>> we still like the tech sector because the understanding that there is a lot of inventory to be worked up at the question is

can they have decent results and will the markets go down because of that? we would rather ride that out and say these companies have good positions in the industry and strong balance sheets to withstand even if we have a deep recession. tom: let me take a moment, she started also strong in a monday. she is legendary in every good way. i want to explain that this is what bloomberg surveillance is about. this is someone who does something old which is a balanced portfolio but unlike no one i know, she can move from bonds to equities to dividend growth and back and forth. she is the most supple person i know and actually doing that. lisa: in a time of so much gloom, she's been pretty risk off consistently. she's been going more into the saver bonds. tom: this guy is rich

greenfield. he was a sell side analyst. it was a vicious time for ipos but he has aged nicely. he joins us this morning. let me cut to the chase. i've never seen more capital deployed and misallocated in 14 different ways. how bad will the rationalizations of labor be across the rich greenfield space? >> the reality is that people saw a lot of what i would call over hiring during the pandemic where think there was this sort of incredible surge of activity around a lot of these companies. they were depressed for a nano second and then we so this massive explosion in these digital businesses. you are seeing a rightsizing

now. look at what's happening to companies like meta and google in alphabet etc. but even netflix and others are seeing this across the world with had chronic -- headcount reductions not because businesses collapsing but it's just that they got a little ahead of themselves in terms of hiring a just brought on too many people relative to overall revenue growth. tom: you when your team have been leaders in trying to monitor the consolidation of what we call entertainment. i saw photos of people buying the taylor swift merchandise and it was like four miles long. i want to talk about the consolidation under monopoly and where prices set. will we have one or two or three entertainment vendors at the end of the day? >> right now, things are pretty amazing for the consumer.

yes, you have the legacy multichannel bundle you and i have been watching melts down over the course of last 10-15 years. people like to call it cord cutting boat we are in this year and now where consumers are in the driver's seat. what used to happen is having to wait and call it to change or service and someone had to come out and swap a box and canceling was a pain in the neck and now whether it's netflix or disney plus or whatever, a click of a button and sign up and if you're not happy with your service, you literally click cancel. there is no waiting for someone to come to your house. i don't think we've ever had a better time and entertainment for the consumer than we are right now. more content and you're in control of what you pay for for for the first time. lisa: this frictionless ability in banking but also with respect to entertainment, given the

options, does it make sense that simply cutting workers like what we see at meta and disney is enough to engender a new era of growth? does the meta-cutting of staff justify a 77% gain this year? >> absolutely. you think about what's happened there, they have gone back to what they are good at which is selling ads. they're one of the best companies in the world for helping small businesses around the world move products on shelves. that's what they do. they are incredible and direct response advertising, nobody does it better than them. there was a lot of distraction a lot of focus on the metaverse and virtual reality in the future. i think mark zuckerberg realized he needed the street support with investors to believe in the story. he can still build his long-term

metaverse vision but he has to do it in line with the growth of the company and that's what got disjointed. he has re-focused relocated capital more appropriately and i think the team has never been more focused on selling the core product. that's ai driven contact and ai driven advertising and that's with making meta-stock work now. lisa: does the same kind of thesis hold true for disney which i think is cutting 15% of their staff? does it give the same sort of optimism? >> you don't have the underlying growth at disney. the meta-story, while it has amazing growth of the last deep -- decade, there is more to come but disney, the challenge is threefold -- what do you do with hulu, this extra training service, don't know whether the nbc news changes that process at all.

you've got hulu and then you got espn. sports costs keep going up so what do you do with that? big problem that the two of you should think about is disney content, that engine of growth is the lifeblood of disney and it really hasn't been working over the last couple of years. marvel and lucasfilm don't look is strong and when was the last time you were talking about a blockbuster disney animated title? they've got a lot of work to do across disney's businesses. bob iger is talented but he has to figure out all three of these big issues and find the successor in the next 18 months. tom: comment on what i saw twice over the weekend, the fond desire of tim cook to the rescue . it could be apple -- disney or

apple that were whatever. in your world, there seems to be this savior transaction for troubled companies that apple would buy you. why would apple by any of this stuff? >> i don't know. why would you want to own cable networks that are disappearing? why would you want to own all of these assets when apple has enough capital. they can make movies, they can make tv shows, they can hire the best talent. if they want to become hp over the next decade, they can spend to get there. -- if they want to become hbo over the next decade, they can spend to get there. would they love to own a studio? sure but all of these companies come with so many more assets. they have mls and apple tv+. do you need to buy espn? just by the good stuff, by the

actual content. i don't think you have to goa and by one of these companies. they can't figure out a growth strategy so maybe we just want to get bought out. tom: exactly, your single best right now? >> when you think about recovery stocks right now, the two that stand out that a rebounding off of their lows come i think you would put spotify and snapchat there. tom: thank you so much. a great snapshot there. one of the surprises here is we are doing digital experiments. the first glow of your newsletter coming out, i didn't expect this. it's like 42 people have signed up. lisa: are you calling me a digital experiment?

you should sign up. you can sign up. it's bloomberg.com/surveillance. we have these conversations and you think about how many themes people play off each other and it's great to get a sense of people parsing through everything. tom: let me translate, this thing is worth looking at because of the click through's. they are off the chart in most newsletters our ego but you don't do that. here's what we talked about today on the showed so how many clicks do you typically have? eight, 10, 12? lisa: it's pretty small. tom: they are focused. lisa: people want to hear the interviews. tom: surveillance newsletter, it's a bramo effort as well. lisa: it's a group effort.

tom: futures are flat, good morning, this is bloomberg. ♪ 92% still active? seems high. seriously? it's just a bike. wait. they make a treadmill with an intuitive speed knob? yeah. want to try? 92% stick with it, so can you. start a 30-day home trial today. terms apply. as a business owner, your bottom line home trial today. is always top of mind.

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>> live from new york city, good morning. the equity market totally unchanged on the s&p 500, the countdown to the open starts now. >> everything you need to get step -- set for the start of u.s. trading, this is bloomberg the open with jonathan ferro. jonathan: live from new york, first republic's first-quarter results after the close, fed officials going quiet before next week's meeting, and markets consider the dreaded debt