>> we should see progress on inflation in the coming months. >> if you think the u.s. has an inflation problem, europe has a bigger one. >> the economy is not collapsing. >> the markets have not done anything. no one is right. no one is wrong. >> this is "bloomberg surveillance." jonathan: live from new york city, good morning. this is "bloomberg surveillance." equity market slightly positive

on the s&p 500. is the bumpy road to nowhere started to go somewhere? tom: it is going to be fun to talk about equities, bond. you are taking a break yesterday. we notice a two year yield going to 4.23%. a change over the last four days. jonathan: yields higher for four straight sessions. chairman powell nymex ago talking about -- nine months ago talking about pain. that morning s&p 500 opened 4198. it closed yesterday 4198. let's go to the german words. higher interest rate, softer labor market conditions will bring down -- unemployment last

summer, 3.5%. unemployment now, 3.4%. tom: we have 47 fed speakers and an important meeting today. the answer -- we have migrated forward to a better place. the most important thing that happened yesterday, carl icahn said i got it wrong. how many people feel like him this morning? i think a lot of people miss spx 4200. jonathan: michael hart, it will be so unbranded for stocks to up into a recession. suck them in before the hard landing. lisa: he is not wrong. have they already been suck in? has it come in tech sectors, particularly those tied to ai? where has the pain been? perhaps index level looks one way but

kbw regional index down 20% year to date. this is not been a consistently range bound market under the surface. tom: amy wu silverman -- what is going on beneath the surface. the bigger picture. the peak of 2021, how far down are we? the answer is we have come back a long way but still we are beneath where we were. nasdaq down 16%. we got further to go to hill. jonathan: do you want some games? nvidia of 100%. meta up 105% year-to-date. it was all about the name change. on the equity market we are just about a positive. going into the weekend looking for more gains positionally. yields on the bond market just

about unchanged. if you want more excitement look to europe. for all the talk things are starting to unravel for the long since trade -- consensus trade, records high. lisa: take those narratives and stuff them in the market and get unpredictable response. looking at g7 talks as president by the looks -- gathers with other leaders. hopefully we get messages, not only with respect to u.s. and debt ceiling, but also trade, supply chain resiliency, china. 8:30 a.m. morgan stanley meeting kicks off. i know that is one of the main issues and today for to speak, it is the big issue. no one cares speaking about fed governor at 11 a.m..

tom: this is a small matter. this panel is an honor of john williams, grade publishing colleague tragically dying of cancer in 55. german the commonness with great -- economists with great credit. jonathan: he was an advisor to powell as well. tom: this is the guy, i suggest lead the charge on this think we tossed around. jonathan: looking forward to the fed speak this morning. eric friedman joins us. always wonderful to catch up with you. are we had a risk of being sucked in to an equity market rally before the big fold? eric: we think there is a risk of people capitulating to the upside.

our viewpoint has been what you shared earlier in program, we think variables work against both corporate profits and consumer. our strategy has been, despite concerns about were fed ponsetto out -- fed fund to sell out and consumer tracking area, we have done so with degree of debate amongst our team, but it is the right decision to shrink up the track. i think 4200 has been the level. if we see that level exceed on good volume, you can see people say let's throw in the towel and wait for better opportunity to be more negative. tom: level one see if a -- level 1 cfa, what i see are

corporations adapting into what they have been given most of them delivering some form of surprise. why does that and in first quarter of this year? why can't corporations keep delivering? eric: you have done a great job talking about resilience and adaptability and that is a theme for the last nine months. all the macro concerns out there. i do think the issue the consumers face as aggregation of higher interest rates and liquidity, which i know is a topic that is under covered, but you have variables coming up. we think the fed keeps rates higher for longer. when the debt ceiling is resolved, the treasury is going to come to market with more issuance and when that happens you see more capital flow away from the system. you have china likely slowing down is liquidity injections. you have qt going on.

all the variable stack themselves up against the idea of persistence resilience. we do not know when they all come and confluence together. lisa: on the headline index level, it is perhaps resilience. under the hood, it is probably a bubble. or it is potentially a complete downdraft we look at the regional banks. when you say investors are getting sucked back in before it crashes, are we talking about tech going down? eric: i think a crash is probably unlikely. we think more of a melt up any gradual migration lower. there is the risk people are talking about of mid in moment the people did not see. cap risks are there -- gap risk are there. technology is still bolstered by cap x.

ai has been the tailwind for a lot a tech spending but there's probably more consumer related stocks more vulnerable against those the bet against those. technology has a desire from cfos to get bigger stronger faster through investing in calm services. it is not the area we would bet against. we think more likely consumer site is the area more vulnerable deeper into the year. lisa: it's tech no longer interest rate sensitive? eric: we have been debating that 2020 playbook scenario. what you have seen the last couple of weeks, as rate has gone higher tech has gone -- better. these are longer duration assets and we look at it cash flow model, you have to have interest rates come down is just cash flow further as continuing that

investors would like. our viewpoint is because the fundamental basis is still there, -- there has been bubbly conversations about ai and that is something the markets have been responsive to. but until we see corporations really hold back on cap x communication services and big data is cybersecurity, it is the top area to not invest in. i think there is decoupling happening with rates and tech, but cap takes the key to pay attention to a post to rates. jonathan: great to start the morning with you. eric friedman there. they lived for your outlook for net income. $9.25 billion to $9.5 billion. looking at the stock in premarket, we look good. up more than 3%.

tom: guidance will be important. can i do the jump they are doing right now? free cash flow turnaround, things look good. what is really important here is what do you do with deere to keep this going? the answer is you have -- this is the dream lawnmower. when i was kid and this is what the adults use and it is why john deere is doing so well. 220 sl precision cut. it is a little big. jonathan: how much is one of those? tom: the basic when you push from behind with beautiful cussing ability is about $3200 -- i think ability is about $3200.

there safety futures there. what is great you can get the motorcycle and thorough event built right in there and do the lawn. jonathan: the numbers look good. the high end of the pervious ranges the low end of the new range. lisa: my favorite was net income for second quarter, $2.86 billion. the estimate $194 billion. jonathan: on equities about an hour from now looking for to that conversation. futures about positive on the s&p 500. interesting couple days against we can build on this morning. good morning. lisa: keeping you up-to-date with news around the world. with the first word, i am lisa mateo. president biden is urging his negotiators to keep pursuing a debt limit deal. in a call from japan where he is attending g7 cement, the president said he is confident

congress will act in time and avoid default. house speaker mccarthy indicated both sides it may reach an agreement as soon as this weekend. ukraine president zielinski will travel to japan to join g7 leaders in person. officials added an extra session to the summit schedule on sunday to accommodate his schedule. he visited european capitals asking for more weapons. u.s. and taiwan have agreed to increase their trade relationship. it is the first tangible result from initiative the face of strong opposition from china. taiwan initiative is for formal trade agreement and does not address issues such as tariffs. it because the outlook for a visit to the u.s. next week by chinese commerce official. republican senator tim scott reportedly airing tv adverts as iu and new hampshire -- in iowa and new hampshire and plans an announcement for potential run

for president on monday in north charleston, south carolina. he form of expository committee allowing him to raise money while weighing a white house bid. another development for disney as engages in high-profile fight with barda governor ron desantis. the world's largest entertainment company dropping plans to relocate to 1000 california workers to a new corporate campus building in florida. disney is causing a luxury hotel at the zalando amusement park. -- orlando amusement park. global news powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. ♪

jonathan: live from new york city, good morning to you all. getting commerce from white house secretary on the debt ceiling negotiations. resident will get an update from negotiating team later today. update on the treasury cash balance. the cash balance has dropped to $68.3 billion as of may 17. that is down from $94.6 billion a day earlier. compare the latest will rework one week ago. latest $68 billion. we could go $140 billion.

-- a week ago $140 billion. tom: i've been told by experts it is not a lot of money and the trend here even though you say it is volatile? pop up on the monday, this trend is not a good. this trend is not good. lisa: it is hard to take risk of asset off of the table and that is what some people have been saying. jonathan: it speaks to why the president is cutting the trip short. it is a feeling it's going to happen quickly. when janet yellen came out and talked about as early as june 1, there was a feeling it was a multiweek cushion in the mix. tom: where is that date right now? jonathan: i think it might be early june as opposed to early june with a cushion. tom: we go to someone who knows

the answers to these questions. annmarie joins us. g7 leaders are meeting to greet and having dinner. what was the emotion at the memorial to all we have and hiroshima? annmarie: it is very emotional day. it is a powerful statement to have president biden alongside other g7 leaders go toward this gravesite -- tour this gravesite and the museum, a very chilling effect, and you have the prime minister of japan wanted to use this moment, this is his home town, and he wants to talk about the future. he must make sure nuclear

nonproliferation is on the agenda. i have been to the hiroshima museum before and i've been to it again recently on this trip. what stands out to me is the very end there an exhibition about nuclear atomic weapons around the world and it ends in 2010 signing the new treaty. what we have today? russia suspending the new treaty in february. you can see how far the world has come for so much more we have to do. the symbolism is going to become more important when vladimir putin will be coming to the g7 summit in person to address world leaders at a time when vladimir putin is using threats of atomic war and nuclear weapon as he to invade ukraine. tom: that will be a key moment. a long trip home. getting out to asia is easy.

getting home is always a challenge. give us the immediacy of the debt study from japan. annmarie: the president will cut within a short he is attending with other leaders to get on the phone with his negotiators. that's how he started his day friday morning in japan, thursday morning washington dc on a call with his team. he wanted to see where they are to make sure there is progress moving into the weekend. the mood music is positive. we had speaker mccarthy say there could be a deal taking shape by the weekend. set a majority -- tentative majority chuck schumer saying i will call back senators if there is a deal we can call next week. we need to carry this, patrick mchenry, chair financial services, key ally mccarthy says there's no deal just yet.

there's going to be a lot of negotiations going into the 11th hour and as white president is cutting his trip short and why he will be leaving hiroshima directly. because next week he is -- the feeling of do or die to make sure they can get the agreement over the finish line and get it passed. lisa: how much is president biting coming under pressure from his own property -- president biden coming under pressure from his own party? annmarie: i think the president understands it is divided government and he has no choice if he wants to lift the debt ceiling, is going to have to negotiate republicans, which is what he's doing. he said he did not want to see work requirements when it comes to access the health care, but did not make these same red line other social safety nets. and that is going to be a key issue from some progressive. the president has to -- his team

of negotiators -- walk the fine line to make you sure he's able to give in to some public and demands to get a debt ceiling lifted and u.s. is not default. june 1 is becoming close around the corner and it is potentially a start of when we could see u.s. default. but at the same time he does not want to go back and redo what this administration hails as massive regicide of wins over the past two years. you think of inflation reduction act act, chip's act. it is a balance the white house is working right now at is why the president has brought reed with him to make sure he is kept up to speed on negotiating happening in washington. jonathan: these are serious issues. but you are at g7. can you explain to our audience with a lick spittle is?

annmarie: i think you are better at the translation but i will say, i know we are discussing right now. if anyone has not read the story, applico story in europe about -- politico story in europe about what boris johnson was had -- said to have said about emmanuel macron and it is not appropriate or polite for morning television program. jonathan: so experience. so professional. tom: this was alix steel and guy johnson she would have gone right for it. jonathan: that was quality. amh in japan, keeping it right up there. classy. i would not be. according to an mx aid, lori said -- according to an ex aid,

pretty brutal stuff. tom: i think they are bouncing off everything. there was -- they said united kingdom and france with all of the challenges versus the culture wars and entities of the united states politics and maybe that is true with new leadership we have. jonathan: the more i am reading this story come i am dying. if you read a lead paragraph that ever sounded like this, various boris johnson wants called micron vladimir putin lick spittle. lisa: what a story. emmanuel macron meets with georgia baloney who he has really contentious relationship with. they're going to have a sideline meeting people are interested in what that's going to be like.

how much does this colored some of the discussion set of -- that is going on that also has hair going on them? jonathan: let's move on. preeminence were coming up shortly. there has been a live in the market. big two day on the s&p 500. tiding two day rally on s&p. s&p 500 to the highest levels of the year so far. from new york, this is bloomberg. ♪ ♪ good night! hey corporate types. would you stop calling each other rock stars? you're a rock star. you are a rock star. no more calling co-workers rock stars. look, it's great that you use workday to transform your business. but it still doesn't make you a rock star. so unless you work with an actual rock star. hi, i'm ozwald.

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jonathan: getting you to the weekend with equity markets voice for another morning of gains potentially on the s&p 500. s&p 500 yesterday having a look at 4200 on the s&p. at the close short of that level but ultimately at the highs of the year. the bumpy road to nowhere as a starting to go somewhere? in the bond market, it feels that way. every single day this week higher into friday. two year started the week south of 4%.

right now, 4.25%. tom: you go to the spread market . euro-yen is one of the things to look at. euro compared to japanese yen is not bursting through the resistance at 150 but it is getting there and has been there. jonathan: on the euro side, break of 1.08. it stays they are just about. three days a dollar strength. euro weakness's. the currency pair at a close yesterday levels we have not seen since march the lows since march. your weakness started to come through the back of week european data and resilient u.s. data. on the japan side, gdp, inflation, and a governor of the boj who wants nothing to do with tom:tom: -- we cannot waste time on this but i promise to read up

on japan. 7% nominal gdp. 4% inflation back to 1982. with deflation they have had. they have a fictitious real growth based on fictitious monetary policy of massive accommodations. what anybody would say is not if it ain't broke, fix it. it is broke and it is going to get fixed. huge risk to the global system. jonathan: similarly displaying little interest in making a move anytime soon. lisa: every note seem to concern they believe they would not make any move even though it does seem inflation has ticked up but they say they come out with a long-term study of how to move away from this. no risk at the june meeting table banding yield curve control but six months from now,

perhaps it is a different story. jonathan: let's talk about fed speak. chairman powell later on. here is the quote from priya misra. we see another 25 basis point hike, then pause, didn't rate cut. we expect the fed to cut by year end and then cut a more as economy enters recession. tom: good morning. you are focused not on 10 year or two year, but at five years. why are you suggesting dynamics in five years would be a more attractive place to be? priya: it is all about how far you are from first grade cut and where is the fed going to cut the rates to. we are six month away from the first rate cut. the risk are they do not cut this year but they start to cut the next year. they're looking for a slowdown.

once they start to cut, we think they're going to cut more than what is priced in. the market is pricing what we are calling the end points of the cuts at 3%. 3% is higher than that estimate of neutral rate. the market is not pricing ever session far from it. the market is pricing a normalization. we enter a recession and it is going to be a recession because of bank lending standards as consumer savers buffers runs out and we might have fiscal drag. as economy slows down, the fed is going to cut more. if the cuts are six masoud, i think it is tricky to be in the very front and -- months out, i think it is tricky to be in the very front and. i think five-year is the sweet spot. three or five-year are attractive because they are positioning for the fed whenever they start to cut, just idea

they cut a lot. tom: where is the 10 year yield? jurrien: -- priya: 10-year is benefiting elizabeth. must the pause happens, look at what is next. the economy does not move -- is not that volatile. right now, we are seeing slow down. i think it's move -- lose momentum. where looking at 10 year below 3% by year end at 2.5% by next year. 10 year will have a significant move. i like the five-year more because it's more sensitive to economic data. lisa: that have been talking resilience in retailers and their sales and a lot of companies able to pass along price increases which is one reason people are rethinking the view you put out there.

it is unlikely for the fed to cut rates significantly in next 12-24 months. michael hartman said the biggest pain trade next 12 months is fed fund rate rising to 6% instead of 3%. how realistic is that? priya: we are looking for one more hike. listening to fed speak, i think they would rather pause and stay on hold for longer than push the -- what is 50 basis points amongst friends? i think it is a high bar for them to keep going but i think it is very high bar for them to start to cut. they're looking for 4.5% unemployment rate by year end. where there, we are in a recession, but the fed might say it was our -- in our forecasts. i agree if inflation increases

somewhere -- the fed is telling us they want to slow things down. agreei think they're going to p hiking and as a result they will overdo it. i think we are in restrictive territory. it takes a while for different parts of the economy to slow down. i think it is so tricky to trade this market. you have to be -- remember as to step in. we step in yesterday. we are long-duration here. we get another sell off. the technical us with all the fdic sales, we should think about that as well. one hundred billion dollars fdic is selling on fixed income paper. is a part of the reason why we have risen in rates. at the economy slows down, i think it is a big pain trade as well. lisa: if the fed does raise rates, is it enough to break backs of some of the regional banks that are drawing on some of the emergency lending facilities even though the crisis if it was one has simmered off? priya: deposit outflows have

stabilized. there are still continuing to leave banks and i think that is going to continue to have -- it is very hard for banks to compete with deposits went money market funds give you 5% and at the fed continues to raise rates, i think that gap continues to be wide. i think the regional banks are in trouble, not so much because of massive outflows, their entire business model, they are fighting from the fed at the fed at 5%, it is hard to find your assets which you bought at 2%. i think that is going to be a slow drag this year and beyond. tom: you are out rages when you talk about inversion and large immersion and lonely. can you frame out -- let's assume we get beyond the debt idiocy -- keyframe out 6% three month t-bill? -- can you frame out 6% three month t-bill? no

one is looking for that. all my radar is up. priya: the big pain trade as if inflation remains high. it is the best indicator of market expectations of inflation. it extremely mispriced. it is sub 2% in near term. i think the market is saying inflation will come down and it is why the fed would not raise rate. what if inflation become sticky? that was the biggest aspect of our call, inflation is slow moving and lagging. if inflation stays high, there is your case for the 6% fed fund, but is that movie five-year? the more the fed raises rates, the more they will have to cut. i have to think they take rates to restrictive territory then they keep it there for a while tilting slow down that's going to meet they're going to have to be more accommodative. jonathan: what is 50 basis points between friends? priya misra wonderful to catch

up with you. what is $5 trillion between friends? lisa: can you imagine at dinner? jonathan: deer are more than 6%. lifting their outlook, ceo chairman john may saying there continues to benefit from bareboat market conditions and improving operating environment. tom: it is a huge symbol of manufacturing american might. i'm not see with the dollar conversion here is to lift it up . a little bit of a weak dollar. that has the play in it. lisa: there is a story about how many billions of dollars of headwind or tailwind for companies depending on where they were on the dollar, but putting that aside, the fact

that construction foresee sales up 15%, to give you a sense of how much they increase their profitability. but here is the issue -- how much is this because price of food is going up? farmers are wendy to form more and replacing their -- wanting to far more and replacing their equipment and wanted to do so at higher rates because the price of food is going up. tom: there's always that by the new toy out there but it is a symbol and i say it plays into global wall street as well because in the cfa curriculum you make or break on the equipment leasing. break is the operative word there. jonathan: the stock is up nicely in premarket. here is the outlook for deere. here is the outlook from -- on the dollar and china.

this story starting to break. the big dollar short consensus call you heard so much on. things started to move the other way. jordan rochester publishing this, european and chinese data surprises in freefall pointing to weaker growth expectations and with it a stronger dollar in the midterm. i saw a lot of that in my mailbox yesterday. tom: can they slow down liverpool? jonathan: that coming up next. this is blue. . -- this is bloomberg. lisa: keeping you up-to-date with news around the world. with the first word, i am lisa mateo. white house negotiators say they are making steady progress towards reaching a debt limit deal. in a call from japan were president biden is attending a summit, he told them

he is competent congress will act in times of -- in time to avoid default. g-7 nations will agree to work together to track diamonds from russia. bloomberg has learned they will stop short of slopping mask out an outright ban. earlier attempts this ancient russian gyms in europe have met resistance from importer nations like belgium were countries argue such a was shift the trade elsewhere. xi jinping says china is ready to help central asian nations bolster security and defensive cap abilities. he was wrapping up a summit on nation leaders. his decisions to assemble five former summit states without russia's president -- u.k. has laid out is strategy in the battle for dominance in global semiconductor market. government committee -- committing 1.2 billion dollars to bolster the industry the next

decade, that is far less than other countries. prime minister rishi sunak says u.k. will focus on where it streams are such as in research and design. u.s. tractor maker deere rates is full year profit forecast saying rising earnings thanks to strong demand for farming equipment and easing of supply -- easing supply chain problems. it is the world's largest producer of farm machinery. global news powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. ♪

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of higher interest rates. jonathan: that a governor -- is the fed governor. they did not make headlines yesterday. this it did of the dallas fed who said data in coming weeks should show it is appropriate to skip a meeting as of today though we are not there yet. that is the call from president logan going into the mid june meeting. we find out if chairman powell is willing to walk through it when he speaks this morning at 11 a.m. eastern time. news coming from axios. saying treasury secretary janet yellen has warned bankers potential debt ceiling default will have repercussions beyond financial system and assisted early june x-date israel -- is real. when she came out and said early

june, there's always the doubt it is conservative and there is a failing base of the cash balance that perhaps that early june date is more real than we thought it was a few weeks ago. tom: the only way to understand this is to go into treasury and you stand there in the classroom. -- cash room of her cash actually moved for the united states of america and we are all including our politicians on both sides removed from the cash iness of society. jonathan: slowly getting real. lisa: maybe it's while we are hearing real talk from kevin mccarthy and president biden saying there is something that needs to get done next week.

it needs to get done. perhaps it is the date because it is a real deadline. jonathan: that the deadline for the debt talk and we hear more on that the next hour or so. here's what we are hearing from the south side that it may be this view on europe, china, rest of the world is starting to break. what we are hearing from jordan rochester wrote european and chinese data surprises in freefall. really pushed eurozone data surprises to be close. points to weaker growth expectations and with eight stronger dollar in near-term. taking a look at euro-dollar the past 10 days. a break of 1.08. 1.0793. that is a big change from 1.10 if you weeks ago. tom: i'm going to go at rapid speed. what is the significance of out past seven?

with the symbolism of 7.01? jordan: for markets, it is a big deal but for as we think maybe it is the 7.25 level where people are more uncomfortable. we had a statement call saying they want to reduce speculation in currency market. we have seen that before. it is why we see rally a bit today. the momentum in chinese economy has changed significantly from what we hoped it would be if you weeks ago. that has been driving the underperformance but also u.s. side of things as well. he had a more hawkish statement from regional fed governors. that is help the fed pricing just as well. combine that together, we are looking for 730 in -- by middle of july. it is a quick move.

we have been in low volatility environment. people have gotten bored of seeing risk. it is not really the scenario for us. we think it's going to have a big move to come. jonathan: people starting to think about maybe going the other way in fx market after big consensus you build up. can you the best way to play that through g10? jordan: absolutely. the market keeps reminding you cannot lean back, i have this long term medium view. you have to be active and respond. what is happening here is data in europe has underwhelmed. i thought at first we could ignore it. i thought factory orders folding lower could be corrected in -- following lower could be corrected in the next months but

we have seen the forward signals also turning lower. momentum is gone. we're not sure euro-dollar. we think the better trade a short cable. because next week we have u.k. cpi and we think there's going to be a big drop in the number. we could go below 8%. we have been around 10% for roughly seven months. it has been painful for the consumer. hopefully next week we get this signed bank of england has than enough and get that below 8%. 7.9% of team is looking for. we get that, pricing of the boe, around 45 basis points the next two meetings, that might had lower. we think there is one more rate hike to come. lisa: i love how you describe people getting bored as they put out one trade for too long and switch over to someone else. sounds like junior high school version of macro trading.

i am wondering from -- it is so tough to stick with any one trade for a considerable period of time. jordan: it is quite like 2000 21, a difficult year for us. 2020 we have the vaccines invented. the euro rallied. dollar weakness. then the beginning of january and president biden democrats 20 senate seats in georgia. the market was overly positioned for dollar weakness at the time. that is where we got to, most client meetings, two weeks ago. we think euro goes higher, the pound goes higher, the yen goes higher. that is changed essentially with data surprises and market moves. it is more uncertain out there. his was be more 2021 for nine months of the year we had a

zigzag of the dollar. it was only in q4 2021 we'll get a purist since vladimir putin was restricting added to the deli strength and we had inflation -- dollar strength and we also had inflation in u.s. as well. jonathan: is that why you are only willing to make a short term tactical call with regard to the strong dollar? jordan: to be tactical is important. you the make money here and now so yes. after that we think about long term. long-term i think euro does head higher but in trade movie in euros favor suggest euro should be 1.15. in short term a look at fed cuts price in around 45 basis points,

i think that should be more towards 25 and then perhaps the market might start to fate of that. tom: if you are sitting in livable on the median term -- liverpool, in the median term it is not matter. jonathan: are you doing that? jordan: maybe not. jonathan: -- tom: as and develop was not supposed to be fun this year but it is. jonathan: you must be happy. jordan: it is fantastic. to be at the top end of the table and look at 5678 and think we have a chance of being there is fantastic. >> added talk about can be shipped playoff finals in the next week or so, wish me luck. i have explained to you who the

sky blues are. commentary sitting looking at a promotion. tom: i am clueless on this. if i did not keep up with it. jonathan: -- tom: if they win the leak they are in, it does, tree -- jonathan: this is the playoffs. big money. they can be back in permit leak. -- the premier league. i was be on the s&p 500.

-- equity market positive on the 500. ♪

>> wishes the progress on inflation in coming months. >> if you think u.s. has an inflation problem, europe has a bigger one. >> this was the realization the economy is not collapsing. >> the markets have not done anything. no one is right. no one is wrong. >> this is "bloomberg surveillance" with tom keene, lisa abramowicz, and jonathan ferro. jonathan: live from new york

city, good morning. this is "bloomberg surveillance." your equity market just about positive on the s&p after closing yesterday hog -- highest since august 25. tom: that is where we have been. we are up at the top of the column looking at spx, vicks yesterday got down to 16.02. can you say breakout? absolutely not. there is no way you can say to be reach beyond to new territory but on the friday, the bears are looking at the ceiling can going what do i write about for monday morning? i'm not going to be that harsh. carl icahn said it cost them $9 billion but he is playing a different game. studies on wall street, you can remain -- strategies on wall street you can remain intact bears because we have not broken out with enthusiasm.

jonathan: item on the equity market at a bull if you see a bear, hug them, they need it. it sounds brutal but if you think about range of the year so far, 3800 at low end, 40 200 high-end, sneak peek at 4200 yesterday. lisa: i will defend the bears a little bit. this is the year index rating -- trade has died and i will say when we talk about index being range bound i think that goes against what some of the trades have been under the service which have been relatively violent. nvidia and on 100% gain. take a look at microsoft, google, amazon, trades getting steam on a i, capital expenditures. at a certain point, is it really a market going nowhere or market splintering under surface? tom: what is not be spoken about is not nvidia or what apple is

doing. it is the gloom of s&p x bear market has made it halfway back. nobody's talking about -- it was pretty ugly, pandemic and all that and we made it halfway back. even the bears are not think they want to give credit to that. jonathan: we spend months talking about this, revisiting the lows of october. the grinder just continues. you get to this point and i find markets interesting from psychological aspect of it and it is what michael harton is talking about this morning with this quote, it will be on brent for stocks and moat up into recession, set them in and you -- right before the hard landing. there were not in the names he talked about. they have not been high in equity market off the lows in october. they are wondering should i get in? lisa: eric freeman talking about how he is generally pessimistic. can you get short big tech?

kind of tough. take a look at capital expenditure. it is still happening. even people seeing cloud on the horizon are not sure it is the interest rate sensitive but vulnerable as it has been in past. tom: i thought a real moment yesterday was jim beyonca -- bianco disagree with come for -- comparo. jonathan: summed it up brilliantly. too anxious to get short, to nervous to get along and stuck somewhere in between. tom: he has four kids in new hampshire in summer camp. jonathan: that is going to cost you. tom: he is a saint. his note was on fire. yes the right of them to pay for summer camp. jonathan: in the bond market,

yields turning higher. 365 on the 10 year. lisa: people price in rate cuts they price in earlier this year. we have g7 talks taken place. i'm curious to hear what they have to say about china. we hear about what president biden update from washington dc on debt ceiling later today 8:30 a.m. morgan stanley annual general meeting. stay to see if there are comments what to expect out of lending standards, regional banks, what the reit to is to the business and fed speak includes john williams, michelle bowman, and main event fed chair jay powell and former fed chair been in the conversation, does he endorse or we have been hearing and splintering views. jonathan: it is a tough call. you're going to a june meeting a do not know what the debt ceiling scenario looks like. latest reporting is that the president will leave g7

dinner early. the plan is for him to get an update from his negotiating team. latest from axios suggesting that early june day, janet yellen pushing the story. that it is real. tom: it is different from how president trump will handle it but with great respect to all, this president has miles of legislative experience. it is a symbolism. i do not know what he does after the dinner. maybe he watched pga championship but it is a symbolism leaving g7 dinner to get briefed on what is going on -- it is a theater of it as well. jonathan: they want us to understand that. they want us to talk about that. tom: they want republicans to talk -- understand that. jonathan: he may be abroad, but he's going to leave dinner early and prioritize domestic issues.

tom: he was two years old when hiroshima happened. this was the last world war ii presidents and the theater. jonathan: joining us now see equity strategists. are you too nervous to get longer too anxious to get short? >> we have been sticking with wide range you just reference. 3800-40 200, we are there right now. we think on the high-end you trim and on the go and you find more rates the by. and will already bargains these days? -- what are the bargains these days? tom: what is john deere symbolize with the build of free cash flow and ability to adapt to very good numbers? linda: the recession everyone is

waiting for is not come. where are the bargains now? are in small-cap stocks. you were talking before about how strong the stock market is. as we all know, it is a narrow advance in the stock market. if you look at the united states, the last seven weeks we've been trading at an extremely tight range in the last six weeks. the pain trade is up and were looking at this and saying it is 4200. it is driven by a handful of stocks. the brent extremely weak. the weakest it has been in 45 years. what is that mean i'm supposed to do? history says it is not clear. nothing is particularly clear and for the first time today i am the word malaise. we said that word a lot in the 70's. what do you do? you clip coupons

and if you have a long-term view, small caps have been crushed. lisa: do you think there is a trade in big tech you can get long or short do you avoid because it is been so volatile and the focus of this narrow breath? linda: yes, it is but tech trade in largest cap. technology is fantastic but also as we know, these biggest names are driven by excitement for ai. it is more on the stocks but i saw an interesting statistic that says this -- these companies has the cash flow that make -- deserves where they are in s&p 500. they are strong and extremely strong versus the rest of the market. the rest of the market has gone nowhere.

it is an ideal stockpicking environment. you can find other ideas beyondu today. lisa: a market trained by years of financial oppression and the macro trade. do you feel like people flood in wrong point rather than going towards the stockpicking trade and say maybe we were wrong? linda: it can do that. in of what people are doing or holding back -- a question i get -- the question i get asked often is what can i buy? people are tired of waiting. please give me my recession is when my boss put out there --

what's my boss put out there. you cannot have a recession yet. people are not talking about their still $1 trillion of excess money out there in our consumer hands looking to be spent. that is why we need to be patient whether we are bullish or bearish. we need to spend the money down that will include buying small dips in stock market. you have to do your homework. jonathan: send up steve. we are sending our best to you. thank you. would you? -- what do you make of ai? lisa: i would understand where people are using it. i do not by it's going to be something that intermediates everyone's jobs but which are -- of companies can strip out the greatest number of workers are bolster how people can be productive in their positions? want to understand more of that and less ai is going to cure the world. jonathan: or end the world.

i bet it is the easiest trade. nothing to lose. if you believe ai is going to go to the end of the world, armageddon is the easiest trade out there. it is on the upside. the world is going to end. maybe it won't. tom: the toxic brew trade. when we come back on to talk about -- jonathan: who do that in a moment. -- we would do that in a moment. equities just about positive on the s&p. from new york, this is bloomberg. lisa: keeping you up-to-date with news around the world. with the first word, i am lisa mateo. president biden is urging his negotiators to keep pursuing a debt limit deal. in a call from japan where he is attending g7 summit, the president said he is confident

congress will act in time and avoid a default. house speaker mccarthy indicated both sides may reach an agreement as soon as this weekend. ukraine president zelenskiy will travel to japan to join g7 leaders in person. officials added an extra session to the summit schedule on sunday to accommodate the schedule. over this past week, he visited european capitals asking for more weapons. public and senator tim scott reportedly will begin airing tv adverse -- ads and plans an announcement on potential run for president monday in north charleston, south carolina. last month he formed an exploratory committee allowing him to raise money while weighing a white house bid. shares of footlocker plunging. the retailer cut its full-year sales outlook and reported first-quarter sales fell more than 9%. footlocker also said merchandise inventory or 25% higher than at

the end of the last -- first quarter last year. deer has raised its full-year profit forecast. the company sees rising earnings thanks to strong demand from farm equipment and easing supply chain problems. as a bellwether for the health of agricultural industry and world's largest producer of farm machinery. global news powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. ♪ did you ever stress about us having three kids? no, that was always part of the plan. three kids?! this was never part of the plan! these kids order the lobster mac 'n cheese! what if she wants to play golf? we're going to have to outlaw golf. absolutely no golf in this house! not under my roof! since we started working with empower, all of our financial questions have been answered,

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>> there are two types of people we talk about that debate, there are those that put in bloomberg terms that ann-marie horton would interview that how you 40 50% chance we default. there the wall street types that tell you there is a 2% chance. i'm probably in the 3% chance that we are going to see default. rosie political theater. -- we are going to see political theater. jonathan: a ton of political theater. i'll that it is reporting from annmarie we speak to in a moment. president will leave a g7 dinner early. the plan is for him to get an update from his negotiating team.

there's a feeling we might have a framework for an agreement as soon as late this weekend. i can only offer you the numbers. welcome to the program. treasury cash balance dropped to 68 point $3 billion in may 17. this can be a really volatile number. if you do it week on week, that is $68 billion number down from 140. tom: that is a key number. at the staff level they're going to go do you realize with the vector is on this? what are they do they break 50 billion? jonathan: that to do that at the higher level and then get it through congress. it is a lot of work in the process to be done. tom: i'm more optimistic about this. i think the discussion and come to jesus moment is going to happen sooner than later. distracted by all of this in japan, annmarie joins us,

bloomberg washington corresponded with president biden at the g7 meetings. i want to get one question in forget back to the debt battle -- before we get back to the debt battle. joe biden was two years old when this bombing happened in japan. it was an exhausted america. coming up from show your where macarthur was. -- australia where macarthur was. allie's dying -- allies dying in papa new guinea. there's a new america in the specific. what is our american exceptionalism right now as we reacquaint ourselves with the specific -- pacific? annmarie: it is so difficult about this trip. john kirby yesterday said president can reschedule trip to an australia and papua new

guinea. he cannot reschedule a potential default and it is something that is a concern for all of these world leaders, g7 or not. but he said to me, what they have seen excessive months and years with united states putting bigger emphasis on their work in the region and that is what you see here on the g7. the debt ceiling ceiling looming large and the president. it is changing his plans. many critics saying the dysfunction in washington under mining the goals. the president still going to have these important conversations including the quad on the sidelines here of the g7. tom: discuss the john kirby interview yesterday were at -- clearly frustrated at how the debt debate has taken over the meeting. jonathan: he did not want u.s. to become detonation and not pay

its bills. i'm looking at the axios reporting that treasury secretary yellen telling people publicly, privately this early june x-date is real. did you get that sense it is real? how real is the date? annmarie: when we first got that, she said as early as june 1, but i got the sense from her when i sat down with her, that there is an immense amount of concern in treasury. they want to see congress act. she did not want to discuss potential contingency plans if there were to be a default on which payments u.s. to prioritize. it is something not just looming large here i g7, clearly looming large on her and treasury because she is not change that posture. it early as june 1 and what you hear in terms of political

rhetoric right now is they are rushing to get this deal done by the end of may. i think that speaks volumes to the concern that as early as june 1 is serious that first week potentially be when u.s. could suffer a default if they do not have a deal and they do not lift the debt ceiling. lisa: does the backdrop weaken -- weekend and come together on some sort of china plan? annmarie: i think the president wants to come here with a bank message to his partners -- a message to his partners to make sure everyone is aligned when it comes to dealing with china. what you hear now from officials within the european union, united states, they do not want to decouple, they want to de-risk. it is an important message the president had to bring, especially on the hills of

emmanuel macron trip to china and the interview he came talking about strategic autonomy. u.s. wants to see g7 speaking with one voice when it comes to china but now the president is coming here and in answer questions about concerns from all of these world leaders on whether or not you as is going to default because they know the damage that would do to the global economy. in that respect, does create a little bit of a wrinkle for the president, heavy -- having these negotiations, shoring up his allies to have tougher language on china especially when it comes economic coercion but at the same time making sure to say to them to assuage the concerns the u.s. will not become the latest risk and issue for the global financial system. jonathan:amh great to catch up with you. tremendous reporting as always.

bringing you the latest in the market. we had a numbers from deer who has raised their outlook. i know you will look at this in a few moments, but footlocker not exactly doing the same think of this morning and it is hurting others. lisa: this is the issue of the zombie roll up. how many of the companies that have struggled with their footprint, their brands are continuing to struggle while others again? are you seeing winners take all at a time when losers lose market share. footlocker has struggled. this is coming after weakening. have you ever gone into footlocker? jonathan: not for a long time. now the direct consumer from nike is so good. you can get it delivered. tom: this is a debate at home.

jonathan: i am a low-cut kind of guy. lisa: high tops are coal. -- cool. jonathan: i am not cool. lisa: you want to the -- jonathan: self wealth. -- stealth wealth. these are just recommendations for the general public. tom: bloomberg intelligence has been good on this on the luxury think. two posh people do stealth wealth is united kingdom? jonathan: proper posh people? no, they knew hand me downs do not buy close -- clothes. lisa: i went to school with

people who most of whom did not have money when i was growing up and everyone dressed real nice and the people with money did not. one my friends wants ask about this divergence and he said, i cannot afford to dress like that because of the way i will be treated. jonathan: the posh kids have bad fashion since because of -- they go to the schools and are told what they wear and they had a trade uniform for sunday, is uniform, life. then that is it that it is a bunch of hand-me-downs. it is also why they are so uptight, tweet. -- tweed. lisa: and they did not go to footlocker. jonathan: they do not know what footlocker is. from new york, this is bloomberg. ♪

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jonathan: this week this market got a little more interesting. it was getting boring. nine month highs on the s&p 500. back to the levels we saw open chairman powell was in jackson hole, wyoming. that morning we opened it 4198, sometimes the stability is blurred. it has been a bumpy road to nowhere. late last year talking about

threatening to go back to the lows. beyond the index level, beneath it are some big news. in the bond market, two-year high on friday. 4.2616 on the two year yield. tom: i am cautious for the weekend. you do it within the vix of 15 point 99. we have fallen below 16 on the vix. it's a 15 handle. i know it's not that much different than 16 but it is different. a 15 down from 20, 30, real sweat. we are miles from the toxic brew of a fix of 27. jonathan: eating a way at the

views out there. a dip in the first half, second half, overweight euro. the euro threatened 1.11 and is down to 1.07. the data has started to shift and the other direction. i got note after note, deutsche bank, eating away at this rate cut calls encouraged by the dallas fed eating away at the dollar shorts. lisa: at what point can you go along for the dollar? i am really interested in specific names because those stories are clear that the overarching macro story.

basically, revenue declining as much as a percent this year. even with inflation, though shares are severely lower. 25% decline. deere has some incredible people. there income rose, to give you a look, a 30 percent increase in sales. disney has had a number of stories. the political story was walmart canceling to investments in florida. and they are closing this star wars deemed hotel. espn is spinning off into a separate entity. a very interesting time. jonathan: the wall street

journal reporting, how are they going to price that? the model at the moment involves people who pay for cable who don't watch espn but espn gets the money? lisa: msg new service is priced at $30 a month. tom: i saw that number and you have to be kidding me. i am paying a joy enormous amount to watch a little bit of mets baseball. and all the rest i watch off of mlb. everyone has their own story. i don't know where big numbers like $30 comes from when i get men delorean for six dollars. jonathan: you have to imagine it's the end of the cable bundle. tom: for an international

audience, if you pay $60 a month, espn gets five dollars. everyone else gets to dollars. jonathan: if i have who low, surely espn will be featured on hulu? lisa: you don't like boxes. jonathan: it is so much easier to have tv connected to broadband with the streaming package with everything on it then have someone come in for a box with cables all around the house. lisa: so buy it here, $39.95. jonathan: i'm not here to sell cable. interesting story around disney and florida. governor desantis is an interesting guy.

he wrote an op-ed in the wall street journal which i encourage everyone to read. is he too smart for his own good sometimes? are you leaving behind this idea that the republican party stands for the party of business? there is tension here that is emerging. lisa: a little? it significant. this is the reason why this $900 million investment could potentially be disney's revenge. this will be an interesting moment for the governor of florida. jonathan: you wonder how this will play out. he hasn't announced his run yet. i don't buy into the polls. it is still too early for me. when you get pulled you say i'm going to vote about the person i know the most about. let's see what happens in the

next couple of months and were broadcast interviews. his age is away. i'm interested in what the strategy will be. do you just talk about woke, liberal policies this, liberal policies that? tom: we are going to have to see and we have a team that will go through that and part of that is folding into the culture wars and what we do with finance and investment. jonathan: the cultural forces affecting the federal reserve. the fed is much closer to rates hiking then the beginning. they should start to position for the normalization of the yield curve. tom: he writes brilliant notes. he does this with all spring. the chief investment officer for

all spring. what are you hearing from your clients? we really say that in the bond market. but all of the meetings you have at all spring, what do investors in bonds feel now? what did they want to do? george: thanks for having me on this morning. good morning. what do clients want to do? two things really. number one, they are reconditioning themselves to yield. yields move higher. they are trying to optimize their yield position and that means if you're an individual you're pulling money towards the front end of the curve. in the flow data, and conversations, and our own activity across the curve. what we try to do is encourage clients to think beyond tomorrow.

to think beyond three months out. it's difficult to do. try to get clients to extend their duration by longer maturity bonds and in doing so blocking today's yield for the future. as you get close to a pause in the fed cycle bonds do well. if you wait for the goldilocks moment when the fed is on hold or maybe even cutting, you've left a tremendous return on the table. the opportunity cost for cash goes up and not down. the second component is four-year duration buyers, your long-duration managers, those folks look at this market and say i don't need to be a hero. i can't lock in the type of yield that an institutional investor typically wants which is different that individual.

with 5-6% yields for 10, 20 or 30 years is precisely what the institutional investor wants. there is this tension in the market. consumers moving towards the front end, institutional on the long and in the macro behind it. we have seen bond markets fall into the lower end of the range. we are in the upper end of the range for the 10 year. at the next phase of the cycle is precisely where bond investor should be looking at right now. it is not tomorrow, but it is coming. that's what were trying to set up in our portfolios. lisa: because you can't do coupon clipping, -- george: credit markets are doing well.

companies themselves capitalize investment grade and high yield companies are in good shape. inflation is not a universal bad. you put up the earnings reports of companies earlier and you have a wide range of companies that are doing well right now. it is a segmented market. credit selection becomes important. those good companies are paying attractive coupons. that coupon clipping and compounding an portfolios is very powerful. we are watching stocks move higher but we are also watching the bond market generate nice, solid returns in clipping a coupon to invest, spend, pay out. that's a very different dynamic we see in the bond market then we saw 10, 18 months ago.

it is the reconditioning of why do i own a bond and how should it perform in my portfolio? we are having those conversations every day. bonds are back. they are back in the central part of many investors portfolios and are aligning themselves very nicely with equities and help create diversification in your portfolio. jonathan: it is wonderful to get your perspective. george bory there. i saw a taxi with the commercial on top, that's a massive change. henrietta treyz is up next.

lisa m: white house negotiators say they are making steady progress towards reaching a debt limit deal. in a call from japan, biden told them he is confident congress will act in time to avoid a default. kevin mccarthy said both sides could reach an agreement as soon as this weekend. the g7 nations will track diamonds from russia. they will's pop short from slapping moscow with an all-out ban. the 14 countries in the u.s. led and pacific trade talks are closer on making it deal on supply chain issues. the focuses on systems that would provide early warnings

when countries see a risk of supply chain disruption. dianne feinstein has suffered complications during her long illness. they included a neurological disorder. she turns 90 next month. she was absent from the capital for months and has announced she will not seek reelection. global news powered by more than 2700 journalists and analysts in more than 120 countries. i am lisa mateo, and this is bloomberg. ♪

>> our viewpoint is the fundamental basis is still there. there has been some bubbly conversation about ai and that is something markets have been

responsive to. until we see corporations hold back on capex services, it is a tough area to not be investing in. jonathan: some monster moves in the tech sector. nvidia is up 117%. the biggest gain, the second-biggest meta-up 105% yesterday. ai is a baby bubble. what's interesting about this, this one is developing against the backdrop of 5% interest rates. tom: what is the level of

hysteria for the weekend? what is the level of ai ferment this weekend? jonathan: fomo. i missed out on this. tom: because of ai? lisa: one side is fomo if you're an investor and if you are a humanitarian is about the demise of the worker. they are questioning the role of human beings where robots can do a better. jonathan: if you believe that, you should be superlong. tom: in hanover, new hampshire, the dartmouth bubble. in 1956, four bright people got together and began to think

about ai. to provide further wisdom mandeep singh steps in. is this something that will go away like it is gone away seven times before? mandeep: in the last 10 years what we have seen this machine learning coming to the scene and enhancing the printout activity, it could recommend you stuff that you may be thinking. this is the logical evolution in terms of ai getting smarter. tom: what is different now? mandeep: it can be a personalized voice assistant. it can be an assistant to a student who is looking to learn new concepts. it can be so real-time and accurate it will make you

productive. that is where we are going with this because of the amount of data and the digitalization that is happened over the 10-15 years. the algorithms are getting smarter and smarter. jonathan: it is easy to call this a bubble. i am always reminded of this clip. there was a journalist who went around and they went to an analyst about amazon and why it was priced. the journalist said this is ridiculous are you telling me that amazon should be worth more than sears? a lot of kids are watching this now and they don't know what sears is. you do not want to be that guy. is this one of those moments when we talk about this type of technology? mandeep: it feels like one

because every year there is a new buzzword. last year it was blockchain but it never caught up to that level where you can think it would be that disruptive. we are talking about the chip industry getting disrupted. we may not need as many cpus as we need it before because gpu's are more effective. the formatting of searches will change. those are the types of things where you are disrupting existing industries. that is why i think this is more real. lisa: there's a question about all of the prowess will be locked up in the googles and microsoft or if it will be a more democratic process of development among smaller firms?

how big of a cushion could this have for a broad swath of the tech industry? mandeep: there will be an evolution of standards. there needed to be more standards and regulators will come onto the scene as well as terms of how i-8 gets developed and what type of data we can use. the chatgpt models are on open internet data. same thing with meta-, amazon and they have an inherent advantage because of all the data they have. lisa: we've been talking about the armageddon situation where robots can impersonate humans. and a lot of people are thrown out of work and have to rely on a universal base income to exist. are we headed towards that kind of dystopian existence based on automation?

mandeep: you could automate a lot of pass and where i think ai can make a difference is in the terms of an autonomous software. for me, auto drive e is the chatgpt situation where you leverage large amounts of data and you are making that decision real-time. there are so many use cases where you can drive activity as a result of large amounts of data processing you have available. i don't think all the jobs will disappear. it is about productivity and what helps you drive productivity. tom: yesterday was one of these can we throw out some of these books? and i throughout the book wage curve.

well it replace classic books? mandeep: i think they can help you teach basic concepts wearing creates a level playing field for students in the class. not everyone can pick ups concepts right away and this allows someone who has a personal assistant and may not get as much of that book that he wants. jonathan: we will pretend to do half the things we need to learn? it's never made sense to me. that education has not changed with the birth of all this technology over the past several decades? lisa: they're going to have to change real quick. whether it's removing access to

gpt, it will have to be a different kind of teaching and the use of ameliorated devices. tom: what this will do as a separation of people who get it, have done the courses, pass the exams and everyone else will be faking it with ai. there will be an elite group of people that worship alan turing and did the hard work. jonathan: will they have social skills? tom: hell no. lisa: i am getting a recommendation for positivity on fridays. one of these days i will not talk about armageddon. we will get there. jonathan: was i meant to be constructive? that did not sound constructive.

these are the questions that people have been talking about. it's not that under the radar. is this something you have been talking about? mandeep: clearly it can affect everyone's job including research analysts. tom: the two year yield, thus the story of the morning. jonathan: ok, that's a transition. it is very close to 4.3, yields are up every day this week. the equity market and s&p 500 are at nine-month highs. david bailin from citigroup coming up. we will talk to david and just a moment. what do you say tom, the kurds to be in the stock market? how much courage do you

need right now? we will count you down to the fed chair later today. ♪ we dissect the market from every angle. helping to build portfolios that redefine what's possible. ♪ because investing isn't one size fits all. ♪ allspring. purposefully divergent.

>> the economic data is slowing enough that the fed is able to take their foot off the brakes. >> i don't think we will see a

hike. >> if the fed wants to raise rates we think it will hurt the economy. it is quite possible we do get that soft landing. >> this is bloomberg surveillance with tom keene, jonathan ferro and lisa abramowicz. tom: on a friday, it is a bull market friday and we welcome all of you on radio and television. 16 is 15.95. jonathan: the two-year guild, 4.27, a big change encouraged by the words of the dallas fed chair. it could show that it's appropriate to skip a meeting. she is leaving that door wide open. tom: skipping a meeting, is

ignoring dinner. lisa: that's a dessert spoon. tom: every green tea ice cream the president is missing. jonathan: i think they want us to be talking about, he will leave dinner early and talk about negotiations. the fact of the matter, they are hoping there is a framework for the agreement. the treasury's cash balance has come in from 140 two something like 60 billion, 68 billion to be specific. tom: we have an important wall street guest with us.

john deere with the 36% up. lisa: there are glimmers of shoots at something. people are taking risks off the table to tie ideas together. at what point will corporate resilience lead the way up in the sense there is optimism and capital expenditure and profits as people keep spending? tom: let's start the data with the vix. jonathan: two decent gains on the data. the highest level we have seen since august 25. that was the day before chairman powell spoke in jackson hole, wyoming. we had some pain going into october but were closer to where we are.

4.268 on the two-year. tom: forget about the theory, for most people it is about missing a bull market. for others, recalibrating. for many others it is the fear of being in cash. david bailin from citigroup. you've been in the markets throughout all of these processes. how do you have the courage to be in the market after a run to 4222. david: this is why market timing is terrible. it's a question of than what you own and not when you own it? what's in the equity portfolio?

for the past 12 months we been defensively positioned. that is paid off. and now you see rotation, ai and tech because you're going through a revolutionary period of time. getting exposure to the technology and companies who use this technology is going to be important. then there are pockets of value out there. look at financials. if a year from now if financial stocks will be higher, if they are well-capitalized they will tolerate the market. ultimately, this is essential to our economy and it should not be marked down 30%. the most important thing is looking for. jonathan: the answer to this question, i hear it on financial news programs. how much to allocate to one thing or another?

isn't that highly dependent on who you are and where you are in life? david: you have to determine what your spending patterns are and actually have a plan. regardless of that, if you think about how portfolios are constructed. there are some great ideas. a great example today, is the fact that right now, you have foreign stocks at their cheapest level, as cheap as they were back since 1935. the dollar is at its highest level and no one talks about putting money overseas right now. that's an example of where you do asset allocation. what is going to happen between now and several months from now, people will focus on 24 and they will want higher equity allocations. lisa: are you even weighed when

it comes to places like private credit that offers a tremendous amount of yield? david: the point you made is extraordinary. if you can get in the fixed income market and equity rate of return should you do it? absolutely. private credit is an example. the credit risk is not there now. these are the kinds of things that should be put into portfolios on the fixed income side. you've touched on this, the people who are focused on deposit rates in one month yields will miss the fact that now is the time to move their duration out and build resilient portfolios that hold those rates for longer. lisa: do you think rates are

going to come down? is this a golden period of time? are you seeing this as an opportunity for outsized returns that won't come again? david: you will see the same thing in the bond market. we are investing into a slowing economy. even the resolution of the debt agreement you were talking about , that will take away stimulus, take liquidity out of the economy. we are now talking about investing for 2024, to what the market will look like next year and that's what's going on in the markets. jonathan: you mentioned opportunities abroad and i want to work through these numbers with you. dax is at a record today.

someone is buying it. david: i'm talking about emerging markets. jonathan: let's go there. chinese data has started to disappoint. what is it about e.m. that works for you? david: you have a lot of companies in brazil and china where there earning stories are picking up markedly. we have seen earnings from internet stocks and they are being ignored. we are overweight there. they have done a great job with real yields, the race will come down. they will benefit in terms of their stock price appreciation. you have to do this in anticipation when it is not fun to do it. thus the same thing with ai. if you think about which companies will benefit by building an ai department like they do their i.t. department.

those companies who use it will be the beneficiaries of it and you identify it. jonathan: how do you identify it? david: think about a consulting company. how is it that they will modified the business they will provide to clients? they will teach ai. they will build ai. companies that go out and build models using ai. you can identify who is doing it. my joke internally is that ai will tell you who is using ai. you will see which companies are actually using it and that will be a determinate and how you go about investing. tom: u.s. multinationals have international exposure. there is a start up with 60% of revenue is foreign revenue. can we go back to the old days

where people buy u.s. multinationals as a foreign proxy? david: i'm not exactly sure because of the valuation difference. let's talk about energy stocks in europe. my view is you have to be conscious of valuation. everyone is focused on the u.s.. when we look at 2024, people will be focused on global investing. jonathan: this was great. it's great to see one person. david: you need to invest in a company that makes the dessert spoon. lisa: i like the small ones. jonathan: let's get to the euro, one point 08 against the dollar. president lagarde speaking at the media, the ecb needs to

buckle up and deliver the inflation target. interest rates need to be sustainably high. they are determined to deliver a 2% cpi target. this is a single goal ecb. jonathan: a formal federal reserve economist is joining us and 20 minutes. we are looking forward to that. this is bloomberg. ♪ lisa m: keeping you up-to-date from news from around the world. president biden is urging his negotiators to keep pursuing a debt limit deal. and a call from japan, the

president said he is confident that congress will act in time and avoid default. kevin mccarthy said both sides could reach an agreement as soon as this weekend. floating near zelenskyy will join the g7 leaders in person. they have added an extra session on sunday to accommodate his schedule. over the past week he visited european capitals asking for more weapons. a new report from barclays is talking about netflix. continued expansion will be putting pressure on the yen. tim scott will begin airing tv ads next week. he plans an announcement on his potential run for president in

south carolina. last month he formed an exploratory committee allowing him to raise money for a white house bid. shares of footlocker are plunging. they reported first-quarter sales that fell 9%. merchandise inventories were 25% higher than at the end of the quarter last year. global news powered by more than 2700 journalists and analysts in more than 120 countries. i am lisa mateo, this is bloomberg. ♪

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>> the market is not pricing in a recession. the markets are pricing in normalization. if we enter a recession it will be bank lending standards. we might even have a drag. jonathan: a global rates had. we are looking for a deal between kevin mccarthy and the president. a deal could come into congress. going into that mess into the

opening bell. we have had a decent rally into friday. on the s&p we had more weight to the rally. yields have shifted higher, 10 year yield 3.66, on a two-year 4.88. tom: you wonder what bernanke is going to do? jonathan: if chairman powell says what logan said you have a big move on your hands. i don't know how he manages that later? tom: the spx 400, coupons are the themes this morning. a lot of people like me have no

guilt. lisa, you have been great on this. it's not just three months, you can go out further. lisa: the weight is pulling people from getting too bullish. why go into stocks if you can get 5% bonds? tom: henrietta treyz, let's translate the reality of this friday. the idea of recess, we are running out of money we have been in the cash from of the treasury. we will run out of gold, cash, notes and the senator is asking for a recess? henrietta: you can watch the treasury secretary, the banks

and their predictions but to watch the congressional calendar when they pass debt ceiling bill. pay attention to the congressional recess schedule. tom: what does it say right now? henrietta: right now we will probably see bill on sunday, monday morning. speaker mccarthy will file the bill that he and president biden's team reached. they will hopefully not vote on a bill until wednesday or thursday of next week. anything before that, and i'm anxious about the trump moment. the houses moving first. the democrats on the house side that provide the bulk of the votes are not going to have local cover from democrats and the senate. we will see the house move first and i hope there will not be a vote until wednesday or thursday

of next week. at that point, senator schumer could call his caucus back. 11th hour really does mean the 11th hour and they could well have to come back two days before the x state and pass the bill in the senate. that is what i am bracing my it investors four. lisa: what is the risk that there is a technical default because someone makes a mistake? henrietta: i don't think there is any risk of thought. i am afraid of a tarp like moment, i think the odds of a failed vote are 40%. but that's a good week before we need a bill to pass. i know they need 10 days to get it through, but if you're from the senate or house and you've

seen these bills come into law. they can work all night long to get it done. the risk of default is 2%. i have not bought the hype this entire process. i don't think there is a risk of default. lisa: the hype made by all of the congress members and president, but his changed over the past two weeks. ? henrietta: if you want me to get on my soapbox. the last time we had a balanced budget was under clinton. instead of using the cereplast, we pass tax cuts and blow up the deficit. we dated and the trump years, 7.8 trillion of deficit and now in the biden administration with looming 3 trillion in cuts and were talking about 500 billion

worth of deficit reduction. it is a political show designed to say the republican talks about federal spending, no new taxes. and democrats have to explain what they spent the money on, working family aid, the energy department, it's about scoring political points. that is where we are in this charade. tom: i would suggest the charade began in new hampshire when george bush senior when he got run over on the tax verbiage that we have been living with for years and years. let's presume that tax verbiage does not change? everyone is going to want a tax cut, everyone wants a free lunch? henrietta: in 2025, right after this next presidential election cycle.

the entire of the 2017 tax cuts expire. at that point, we will blow up the deficit and again by extending those packages for another year or two just like we did in 2010 and 2012. if there is a red wave you will see a material reconciliation bill that is a repeat of 2017 which was a 5 trillion tax bill. it will be more expensive in 2026. jonathan: rents and repeat. i think you got a sense of how henrietta feels about this. the debt part just keeps on growing. tom: it does, what is so important here is the free lunch we have had from our

superiority, demographics where we have been able to go to bernanke and powell to other factors where reduced r-star doesn't get overrun by growth. lisa: where is that good, where is that bad? even health care that is helping people, how do you fix it? there is not an honest discussion with people are trying to score political points. jonathan: we spoke about this earlier this week. if you get two points for passing legislation or three points for fighting. i am going for points and they are three points for fighting. lisa: there is something interesting that republicans don't think this is winning points to have the u.s. default.

all of a sudden, there doesn't seem to be anyone saying this is positive. earlier on, maybe it's like do or die. no one thinks that now. tom: some republicans, in the middle of the pandemic 60%, 18%, we are getting tax receipts back up to the historical norm of 21, 22. jonathan: in the next hour, emily roland along side jim caron for morgan stanley. this is bloomberg. ♪

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>> -- tom: thank you for being with us. lagarde may be pulling equities back with comments out of europe. the euro slightly stronger. just in the last 10 minutes, features of. lisa: people have not wanted to buy into this rally and suddenly the tone has shifted. it is sort of, we have been missing out and there are sustainable trends. i'm not going to get conviction behind that. tom: my amateur take it is not

fear of missing out what people who have placed us -- bets short. lisa: out about the people waiting to buy the dip and it doesn't come? what do you do with your cash? tom: there will be a fed discussion at 11:00 a.m.. we will look to michael mckee and others. it is with the famine of the federal reserve. it will be in honor of an economist that came up with the idea, you know john williams of the new york fed. this is thomas law about, who if you are studying economics in german, you know the german economist everyone is talking about, and that would be claudia

sahm. she joins us from sahm consulting. they came up with this theoretical construct that has been a gift because we have had a lower r-star that has allowed us to have debt. claudia: they do matter. one of the big reasons the deficit -- the first year under president biden, the second year you saw as the fed raised interest rates the cost of servicing some of the debt that took a hit in the deficit. these relationships are there. we get into r-star territory i get uncomfortable because conceptually it is beautiful but our world right now is not beautiful. we have seen the fed move it

around. it is hard for me to the stomach. if we get to a good place, i will take it. tom: i totally agree it is a beautiful theory. but the fact is we live in the real world and richard clarida have -- has been brave to say that. but if we get a higher r-star with bigger debt and new hire interest payments the government has to make, does the american house of cards fall apart? claudia: i don't think so. if there is falling apart in the next few weeks it is going to be the debt ceiling. this pressure it is putting on the deficit and government borrowing is not my first order concern. it is the case we went from very low interest rates to moving fast. the fed moved the interest rate up and that was what feelings about r-star was.

they translated to getting we are getting r-star wrong. the logic is it is tough to see it right now. lisa: how much should fed chair jay powell pushback about rate cuts? can he do anything to make people believe they are turning the other way? lisa: is preaching to the choir in terms of the high interest rates. there is no one who is going to say are you going to cut rates so you are lined up with markets? i think that will get a lot of support for what they've done last year. lisa: lori logan, the dallas fed came out and said she is not there yet and the data doesn't confirm the idea of a pause in seemed very open to another rate hike in june. do you think that could be disruptive for the financial system, that the smaller banks that have experienced dress that

could be brought over the edges another 25 basis points are do you think it is of little consequence? claudia: this is not a make or break in our economy. what had -- what i have been impressed with listening to the chatter at the fomc, you have a mixed bag. it bostick said he was ready to pause. you have participants in the fomc who are giving us lots of different messages and it is so much relief to know they must be having a very robust debate and that is what we need it right now, to make sure people are thinking through it. tom: i will go to the work out of it vcu talks about we have an emotional point on inflation where we begin to fall apart, where inflation matters you are acclaimed for your work on our limited attention about

inflation. if we have disinflation, does america's view of inflation called down and cool? claudia: yes, not because they are watching the cpi. as food prices are going down it is really important for households. i don't think there is a magic number where it falls apart. i think it will be an external event, which the turmoil and the banking center was the real thing and i was very surprised they didn't cause well that was still in motion to meetings to. if they are laser focused on getting nation now. and i have been asked they just stuff at three and, no, they are going to to one way or another. tom: the heart of the matter and we say this in the passing of robert lucas, the giant in new york, the institution is ex post.

how much disinflation do they need to see before they actually do what they should have done a number of months ago? claudia: they continue to chop up inflation into what they are worried about. the thing that worries me, and they know this, inflation is the last place the rate hikes show of because it takes time to filter through the economy. with that the consumer price index and the mismatch in openings and people searching for work the starting to close. they are getting signals about where inflation will be in the next six months and they are shrugging it off, we have to keep going. lisa: we are speaking to claudia sahm and a lot of people are saying

we are looking at artificial intelligence and technological advancements that could change the way we work and have education and live. from your vantage point at the fed, how much are they looking at these technological advancement as disinflation or inflationary and putting that into their model and understanding what is the right parameter to look at the current data? claudia: ai is not in the fed's models for monetary policy. and the fed is about stabilizing business sector. ai and what we call amazing innovations is five years or 10 years out. it will not be big enough to make a dent. they do some long-term modeling but with the supply shocks from code and the war in ukraine, they didn't have good tools. this is not even in their models for supply shock.

lisa: this is why a lot of people are saying they just don't know and why they are holding less clout in the markets. at what point do you feel the fed has high ground in understanding where we are in terms of the macro regime and what error this relates to? claudia: they are going to celebrate the day when we hit 2% on a sustained basis. that is what they are looking for. i personally think they have gone past the point of being data-driven. that means every time something comes out the markets react to it. they shouldn't be creating volatility. tom: explain the sahm will. everyone is hanging on what you say. how close to a recession are we? claudia: nowhere near.

the unappointed right -- rate rises slowly. and if you have a half percentage increase in the unemployment rate relative to the past year, you are in a recession two months or three months into a session. it is not a forecasting tool but are we there and it is zero right now and given how slow unemployment moves, covid was different, but it would take quite a while to get from zero to .5. it is an empirical relationship that held in the past but all of our empirical relationships are blowing up and it was conflicting with the data. it is tough and i appreciate the humility powell gives when he talks. tom: thank you very much to claudia sahm.

there are headlines that come out that give pause. the gentleman from australia will pause. lisa: james gorman is planning to step down from morgan stanley within the next 12 months. shares of morgan stanley lower by 1.7% as you see the immediate knee-jerk plunge. remember that they are having their annual shareholder meeting today, so perhaps this is the big takeaway. james gorman who has led this company and made acquisitions a lot of people really shrugged at he expanded it in a way that it to a new level. tom: colombia and then to mckinsey and with mathematical skills, what is interesting is he is revered for what he did with wealth management in the acquisition of assets for morgan stanley. i should say in the limited

headline we have, there is no discussion of the chairman word and you wonder what that will be. lisa: what is the replacement going to be and what does the mean and terms of the longer-term trajectory after the successful acquisitions and their ability. this was announced at the annual meeting. and he is going to be executive chairman after stepping down as chief executive officer. tom: who can we talk about who could speak about the bench in morgan stanley, ellen zentner or jim karen -- carrion. sonali basak joins us. is this a surprise? should holly -- sonali: we know

morgan stanley has been prepping the bench for a while. think about how many people have grown up under him and have left the firm and the two men under him, they are homegrown. they have been there for a long time at the most pivotal moments at the firm up and down. ted pick at the securities division helped make this a tough transition from cutting and adding to the fixed income business, how competing as the top prime broker in the equities business and at the wealth business, andy saperstein, the longtime lieutenant to james gorman, the question is and waiting for the headlines on this, at what point are they going to announce who is taking over? lisa: let me read the statement, this from gorman at the annual meeting, he said it is the board and my expectation that it will occur some point in the next 12 months, talking about his

departure and becoming the chair of the board. that is the current expectation the absence of a major change in the external environment. also a key question was this a decision he made independently for a lifestyle issue question mark was this some sort of strategic shift by the board made basically without is desiring this departure? sonali: it is hard to have evidence of that. when i started covering morgan stanley they were worth much less than goldman sachs and now they are worth much more. that divide has just increased despite many doubts. i remember years ago there was a conference call and you had analysts asking why he wasn't raising the bar more for morgan stanley and you had james gorman stepping back saying, be patient, we've got this. ultimately, he was right. there has been a lot of when you

look at the next level of the firm. this is very classic morgan stanley fashion. they announce when change and give you time to absorb it and then they announce the next. lisa: it is interesting me about the point that unless there is a shift in market conditions at a time when people have been talking about a financial crisis that never transpired and no people are almost talking about this stasis or calm. is this viewed as a comment period where they can actually make shifts like this without any major disruption in do it easily? sonali: a fascinating to talk about this when people are worried about a potential recession. morgan stanley has seen some of the worst days since 2008 and they know what it is like. it is calm enough to start transitioning. this is the time for the next generation to step in. tom: ok, maybe, paul davis wrote

this five months ago for bloomberg and thinking to the washington post for publishing paul davies. goldman sachs is "far, far behind morgan stanley." it is all about asset management. where do saperstein fit into that? my basic take is to pick is the older guy and has the swagger of -- ted pick is the older guy and has the swagger. sonali: in the trading business, these are a bunch of loyalists. this goes back to when keller was there and you worried about traders leaving without a solid person they trust to leads the troops. on andy, he has tens of thousands of financial advisors across the united states. they are less swashbuckling than the traders and investment bankers but it is steady and

they bring in the big bucks. tom: who decide that any firm who takes over? sonali: the board, but james gorman is on the board. tom: how independent is the morgan stanley board versus a guy that many people suggest is the ceo of the decade on global wall street? sonali: that is a great question. morgan stanley's board is diverse and committed. it has changed quite a bit in recent years. it has talent from the former securities and exchange commission, from japan during their deal with the financial crisis. it is quite independent relative to what you are seeing on wall street and that is what kind of makes the succession plan successful in the eyes of wall street. it is consistent and broad and diverse. lisa: if you're just joining now, the news of the day is

morgan stanley ceo james gorman planning to step down within 12 months. the shares popped lower about 1.7% but have retraced to just .6% as people digest the news. it does seem like this has been in the works and something they have been planning for and pulled the trigger a bit earlier . is there a sense of shift in the strategy of this company going forward or do you think it is stay the course and keep the homegrown talent and keep bugging away? sonali: they have always had wealth as a huge driver in asset management with the asset manager five or six years ago you couldn't see them becoming more than a train dollars in asset management. that had to change and it changed quickly for acquisitions. the question will be if they choose one man or the other, which part of the bank could suffer from any potential attrition or concerns. tom: goldman sachs 1.03 priced,

morgan stanley, 1.53. the guy is so modest he has underplayed what he did with managing money. that is the massive theme. you said he will stay as an executive chairman? lisa: is going to be chair. tom: what does the chairman do? sonali: they make sure nothing goes wrong and come back if something goes wrong here the initial market reaction tells you a lot. he is iconic at the home of morgan stanley and has changed more than any other bank has it changed. tom: nally bassett, thank you -- and ollie bassett -- sonali basak, thank you. we are looking at what is going on in wall street and spectacular about the synthesis

in the changing political economics in china. and as you do, there are books where you saying, this is the one this weekend. the new china playbook beyond socialism and capitalism. it is the academic read of the moment. thank you for joining us in new york. where did capitalism go, the model of chinese capitalism and what does the new post capitalism look like? dr. jin: capitalism is still there but it will never be above politics. there will be more regulation going forward. china will avoid becoming an american capitalistic society. they want to focus on industrial technical power. there are new goals in the new era, new generation to shape the contours of the economy. lisa: we got news about alibaba

as one of their capitalist success stories spitting out cloud business because potentially of stress they were coming under from the chinese communist party. how much is the new push hampering the economic capitalist push that has -- it has been focusing on for a number of decades? dr. jin: it will be a constant struggle between more growth and innovation and regulation. we are seeing china's government coming down harsh on monitoring or trying to prevent monopolies and protecting consumer data. the economy is in its worst state and they need the private sector and innovation. lisa: i am going to ask an unfair question. are people happy? dr. jin: as people on the street and overwhelmingly it will be yes. lisa: kisses against the common feeling in western media that -- this is against the common feeling in western media that

they are buckling. you are saying people like this direction? dr. jin: last three years haven't been helpful and people were unhappy towards the end. in general if you ask any random person, they will feel like my kids are getting educated, there are opportunities and my life is bright. lisa: we are talking about china as you have the g7 meeting taking place with western leaders trying to compete more directly with china and keeping it from becoming antagonistic. can you get an idea of how antagonistic this is getting, given the central asian meeting that xi jinping is holding on the other side? dr. jin: the temperature needs to be taken down but different countries view the security and economy in different ways and view china differently and china understands that heterogeneity. the u.s. and china relations are important but we see the leaders trying to take the temperature

down but misunderstandings don't help. munication is key. -- communication is key. lisa: does china still want to be the economic leader? dr. jin: it could become the largest economy in 10 years. let's not underestimate the 600 million people in china today still with less than $300 of income per month. that is a huge boost of consumption power. lisa: we have been talking about morgan stanley and james gorman stepping down. they haven't talked about western banks getting out of china and the temperature has gotten too hot for them in the ducal interference. how much will the china growth without western companies participating having much presence there? dr. jin: they need western companies and investors there but i would say the financial system is the sector were china is most open to foreign

institutions. the severe loss of confidence of private businesses are making them hold back. tom: thank you for joining us today with the london school of economics. this is just the right size to get a huge perspective on all the changes going on in china. we need to return to an historic moment on wall street, james gorman announcing at the annual meeting that he will move away from duties as a chief executive officer. it will be good to speak to allison williams leading all the banking coverage at bloomberg intelligence. allison, what a shift in the morgan stanley and john mack and before to it james morgan brought? what did he bring?

allison: even though there has been a shift and there is a focus at the firm, the institutional business has thrived under gorman. i think the changes today are a natural progression. it was two years ago that the firm had named ted pick and andy saperstein and they are the heir apparent's. ted pick really transformed the business and did a great job with fixed income trading and took over equity trading and moved up. andy saperstein running the bigger wealth fund in the business. tom: david brooks at the new york times wrote an essay about the smooth guys versus the nerds . so you've got as a generalization the romance of banking, the meet and greet of banking, transactional nature of banking versus managing money

and picking up a fee along the way. which has the high ground of morgan stanley right now and can they both coexist given whoever become ceo? allison: i think they can coexist. it is the latter that has grown in importance regarding see business. -- c business. from an investor's standpoint, the investors do tend to favor a more stable recurring revenue type business and that is more of the wealth and asset management is this. we like to remind people that is a business not immune to market pressures. if the market has a dramatic downfall that will reduce the fees. as we saw during the pandemic in very volatile times, the banking

businesses, m&a and underwriting can come to a halt. the big asset base, trains of dollars won't go away overnight. lisa: can't be what -- can you speak to what sonali basak was saying that it is time for the younger generation to come in? allison: it is story by story but it is a time, also as you are discussing, a time of relative stability. there is always uncertainty and concerns about the economy and monetary policy but you do want to pass the baton in a relatively calmer period. we saw this with lloyd blankfein when he said several years ago things are stable, it is time to

pass the baton before we go into the next round of some kind of volatility. and that was the right move. when the pandemic took hold david solomon was in place. you did see he gave a caveat if there is some kind of disruption he left the door open it would be a smooth transcription -- transition. tom: thank you so much. there is another major story going on right now and it is moving our kits. futures up. the vix up from 15.97. these are stunning headlines. john williams of the new york fed, is really strong statement in writing and he speaks of the relaunch of the r-star interest

rate back to pre-pandemic level. the very key headline, pandemic didn't end era of low rates. there is your market lift. lisa: when what we are from the imf and everyone pooh-poohed that we were in the olden days in here comes john williams saying that we are going back that and what fed policy is remains to be seen. tom: you saw what we saw from lagarde, where they are going to go to higher rates to call him a much more difficult inflation. what are we going to see from powell at 11:00 a.m.? lisa: the indication that john williams said they would hold the rates until they get inflation down to the same as before the pandemic. tom: much much more to palm on

bloomberg television. jay polaski, good morning. jonathan: what a morning so far. live from new york city. good morning. the countdown to the open starts right now. >> everything you need to get set for the start of the u.s. trading. this is bloomberg the open with jonathan ferro. ♪ jonathan: live from new york, here we go. the s&p 500 closing out the week in nine months i as president biden looks for a