>> welcome to "bloomberg markets." matt: we see equity indexes rising the s&p 500 gaining .5% as we head into a week with 100 65 companies on the s&p 500, $14 trillion in market cap in that one index alone reporting. a big week for earnings. using the 10 year yield coming up with an to basis points. right now, three point 8567. -- 3.8567.

big names in the market saying it does not necessarily mean a recession is here or coming. the number u.s. dollar index back after merging up for the last week. it had come down to 1200 but now we are back up. you see crude, that is not brent, it is west texas intermediate higher by two dollars to 79.18. jon: i am looking at energy. it will be interesting to see if crude can get back to the $80 mark. energy stocks, halliburton up 4% . a record move. venting dickinson up 5.5% after encouraging fda updates. we have seen a decline in gilead sciences after a disappointment

in the drug trials. spotify under pressure. they will have earnings and that will be one of the big themes in the week overall. matt: earnings is huge right now. a lot of people are saying don't worry as much about the fed, earnings are on the front burner . let's talk about what is going on in the macro. top economists say the risk of recession is fading fast. the record -- the message being sent keeps getting louder. we are talking about the three month, 10 year treasury curve, what jerome powell says is more important to him that has predicted last seven recessions. ed yardeni says it is all gained without much pain.

rates of pleasure having you here. thank you for your time. i read your supposition about what the yield curve might mean and i said it is elementary. how had i not thought of that. it doesn't necessarily mean it was a recession but inflation coming down at an rapid pace. why haven't we heard more of this? ed: the inverted yield curve has predicted a process. in the past, interest rates rose as the fed raised rates. they say if the fed keeps going like this something will rake and then they buy bonds. and then it sure enough something would break in the financial system and then we become an economy wide credit crunch which clearly would cause a recession. it is a process and has had a good track record of predicting

recessions as a result. the current situation has done a great job anticipating the financial crisis. we had that in the banking sector in march but the fed came in so rapidly providing liquidity that it has not morphed into a credit crunch and into a recession. the bond market investors are anticipating we might be able to have an economy growing with inflation moderating. our inflation rate is very much determined by what happens over in china. chinese economy and europe economy and global economy is weak. global investors looking not just at the u.s. situation but the global one and they see a situation where globally the economy is weak and the u.s. may be doing relatively well and inflation is coming down, let's by bonds at yields below the two-year and that is what is happening. matt: bill dudley a couple

months ago was talking about the term premium being too small. another writes that the fact that the term premium is a lot less now. that is what investors are demanding to lend money for longer durations than shorter durations. why is the term premium shrunk? ed: there is a tremendous amount of liquidity in the system. another has been a lot of focus on excess savings on the part of consumers and some say there is a half trillion or trillion dollars in excess savings but the idea is that when they stop spending it and run out, the economy goes into recession. if you look at the sum of manned deposits, look at the sum of all deposits and money market mutual funds and it is a all-time record high.

a tremendous amount of precautionary liquidity. and right now it is earning at a good yield. investors in the short-term instruments have to be concerned about when and if short-term rates start coming down will i have missed an opportunity to buy bonds and infective level and liquidity and a concern that inflation might come down so you might miss an opportunity in the bond market. jon: you put forward a bullish thesis when there were plenty of bears dancing around. we have seen within 25% move in the s&p 500 off of the october lows. you have been still floating arrange going into next year between 4800 and 5400 for the s&p 500, which could mean a 5%

lift and could mean that in closer to another 20%. is that a fair characterization of your view i have been in the camp that said it was rolling but now i would say we are experiencing a rolling recovery. one is commercial real estate is experiencing a rolling recession. i think the outlook for the stock market, and it is purely going to be tied for the outlook for the economy and earnings. i've had the s&p at 225 this year and there are numbers that have been below 200. i have 225 this year without recession and 250 next year and to 70 year after that. i think by the end of next year the market -- and 270 after

that. you have to allow me to push my limits on multiple and it gives you 5400. why a 20 multiple? it is empirical. we have the mega cap eat that now account for 27% of the s&p 500. they tried to knock them down to 20 and now they are back at 30. we have to recognize the rule of thumb that 15 is fair value for the stock markets may not apply when you have this mega cap eight phenomenon. jon: going through the earnings seasons, we saw pricing power for companies and maybe that will be reflected in this latest batch of results. some said if the inflation picture improves, all of the

sudden that takes a little bit of momentum away from the sales picture so maybe you are talking about a stall out in the s&p top line revenue story. what would you say to that? ed: over the past year or two we have seen a mini recession in earnings related to the profit margin getting squeezed. i think whatever slowdown we see in revenues because inflation moderates will be offset by improvement in the profit margin. productivity will make a comeback. ai is not the only technology that has the potential to dramatically improve productivity. there is robotics, automation and computing. i think this will turn out to be something like the roaring 20 20's. i talked about that and now i

think it is a reasonable outlook for the economy and i think by the end of the decade we will look back and say it started out awful but ended up awfully good. matt: you have written a lot of history yourself as an economist but a student of history and i want to ask you unrelated to the markets now, your thoughts on oppenheimer? did you see it this weekend? ed: absolutely. i gave it three pluses in my review. every monday morning i review movies. i can't say enough about it. it was an excellent biopic and clearly well done. the director did a fantastic job of making us really appreciate all of the nuances of what it took to make the bomb and the geo and domestic consequences of

that and the big picture, we have created this horrible weapon that has the potential that has the potential to undo creation. it covers a lot of big subjects. matt: great to get your opinion on that. really appreciate you joining us. coming up, why amc is spiking after a judge ruled against its stock conversion plan. we will talk about that next. this is bloomberg. ♪ you should get a second opinion from innovation refunds at no upfront cost. sometimes you need a second opinion. [coughs] good to go. yeah, i think i'll get a second opinion. all these walls gotta go! ah ah ah! i'd love a second opinion. no. i'm going to get a second opinion. with innovation refunds, there's no upfront cost to find out. so why not check like i did for my small business? take the first step to see if your small business qualifies for the erc.

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jon: this is "bloomberg markets." time for our stock of the hour.

amc stock surging after the blockage of the conversion plan that would have allowed amc to issue more shares. it wanted to convert shares to common stock lower. we have been covering this story. maybe we should start with the popular arbitrage which investors have been putting in place which has prompted this very sizable balance in stocks. can you explain what people have been betting on? bailey: they have in betting on that it would go sailing through. basically there was the expectation this would go through and they would be able to convert 141 and do a reverse split that would cut the number of shares outstanding tremendously -- convert one for

one and do a verse split that would cut the number of shares outstanding tremendously. you had low volume and expiration and a lot unfolded and it caused a deep plunging shares in a surge in amc. it has reversed a bit looking at a spread between the two well north of $4, double what it was back in february. matt: we are looking at meme stocks which have surged over the past few months. why do you think we have seen this resurgence in stocks that don't make any money or generate free cash flow? bailey: we have talked about carron and other stocks heavily shorted and beaten down. we are seeing the casino crowd

coming back whether it is retail traders and we see the stock market with a chunk of losses. we are seeing a lot of cash being deployed and that can add gas to the fire. matt: thanks very much. coming up, genevieve fraser the global m&a outlook. this is bloomberg. ♪ the first time you connected your godaddy website and your store was also the first time you realized... well, we can do anything. cheesecake cookies? the chookie! manage all your sales from one place with a partner that always puts you first. (we did it) start today at godaddy.com

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matt: this is "bloomberg markets." today's big take focuses on big firms downsizing. higher borrowing costs and volatility and geopolitical tension and threats of the global recession has set deal volumes down 40% to a measly $1 trillion this year. the slump has spawned epic turnover of investment bank talent. let's discuss with genevieve fraser. thank you for joining us. genevieve: thank you for having me. matt: we had the collapse of credit suisse and even coleman sachs picking up the phone went recruiters call. where are they going?

genevieve: we are popular again which is exciting. everything is in motion. it is counterintuitive in a way because what we might expect in a weak market, we could see a week talent or we are seeing strong levels of activity and what you might call a rewriting of the playbook in terms of hiring driven by a few factors. matt: what are they. this the compensation side different? do people care more about working from home? does that really mean a lot to the investment bankers? genevieve fraser the investment bankers --genevieve: the investment bankers are back to work for five days so i don't think it is much that. they felt they were paid down in

2020 one, likely for circumstances outside of their control, the broader performance of the bank and maker economic condition at -- and macro economic conditions. if they can make the trade and they can reset themselves to 2021 comp levels and get a one or two year deal where they can write out the downturn in relative security, it is a little bit of a no-brainer. if you look on the client side, boutiques are still hiring strategically and opportunistically. some are able to lean in more. the boutique platforms are more numeral and able to bring on more talent at this time but you are seeing them literally expanded to sectors where a never had a presence for. people are hiring entire tech teams and renewable teams to gain market share. you have midmarket folks who

tend to always capitalize in markets like this. they are bringing on very top talent. the foreign banks are looking to enter the u.s. market and that is another actor. the large cap banks are not hiring here there just hiring a bit more tactically and hiring even as they are letting folks go. it is a little bit of a fire and higher effect. jon: we just spoke to the wall street strategist ed yardeni painted a picture of an economy that may be in better shape than the biggest skeptics on wall street right now. to build on what you are saying and some of it is in the big take use but the idea for smaller firms to be opportunistic and what if activity does come back in a big way and a rare chance to get

talent on your team assuming we are not talking about a sizable contraction recession worry that had been out there for so long. genevieve: you are right and these places think they have the shot to bring on impactful talent. people are betting on a boom post downturn. if you at shops across the street, not just the boutiques but various shapes and sizes they want to capitalize on the m&a activity returning and they want people who can be there and well situated with the folk client base so they are ready to bounce when this happens. the entire market is not dead. there are areas of client activity if you look at tech, software, renewables.

you can at tech on to anything and that is an area where there is client activity. they are strategically looking at gaining market share before we see the full bounce back of m&a. jon: is interesting and you have mentioned those sectors of a couple times. in the stock market, investors have been trying to figure out what doesn't ai future mean for us in an area of renewables as we talk about a green economy. if you don't have historical talent overseeing the boom areas for the firm, this may be also becomes the opportunity on that front. genevieve: nobles is a newer sector. anyone focused on it is typically a legacy power banker adding into the renewable space and recognizing there is a multitude of activity. if you are not positioned to capitalize on that you are missing a large amount of fees coming with that.

people are recognizing they have gaps in coverage and bringing people on, top talent, senior md level and bringing people on who can make the impact and move the needle on their platform. matt: thanks for joining us. she is talking about the moves on the street we have been seeing. let's get a quick check on what is going on in the rockets. the s&p 500 rise, interesting moves at 4561 here we have 165 companies reporting this week. more reporting next week but bigger volume in terms of total dollar value this week come over $14 billion, $1 trillion i should say of market cap reporting. the inversion continues to grow and we will follow that story as

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>> the dow average aims to make it 11 gains in a row thanks to old economy stocks. live from studio to in new york, i am scarlet fu. katie: and katie greifeld. two hours to go until the bell rings. currently about .5% higher, well above 4500. tech stocks, the nasdaq 100 also seeing gains. currently up about .3%, we will see how that changes over the next two hours. you are seeing yields climb a little, the two year yield currently up about seven basis points. a li b