♪ >> the next couple months is going to be a really rocky road. >> gold is a perfect manifestation of policy uncertainty. >> the uncertainty effects are much worse this time in 2019. >> it's almost impossible for me to say we've seen the bottom, we can break out of this trading range and is -- it is time for us to act. announcer: this is "bloomberg surveillance" with jonathan fara, lisa abramowitz and and reorder in. jonathan: good morning, "bloomberg surveillance" starts right now. starts bouncing after snapping a

losing streak, sentiment improving as officials indicate the presence major tariff announcement may turn out to be far more targeted. that is leading investors focus on the incoming data. looking ahead to taking the temperature on consumer confidence later on in the week before getting another reid on u.s. and nation. lisa: this to me raises the question, what is going to be more important, the current economic data or what the tariffs may or may not the? how much credence can you put into headlines when you talk about maybe it is only the dirty 15% of your talking about with active tariffs. those dirty 15 include china, the european union, some of the u.s. major trading partners, so it really comes down to where the economy is now and how susceptible it is to some of these shocks. jonathan: this is a snapshot of our current thinking is and things are always best described as fluid. it always comes down to the mind of one man, donald trump and that mind can change repeatedly between now and next week. annmarie: in the reporting is that the negotiations behind the

scenes are continuing to happen. even scott bessent who talked about the dirty 15 also said these unions could come to america first and maybe strike a deal before april 2. what i would say is overwhelmingly the reporting is talking about reciprocity and selective tariffs. i don't think they are going to get a sectoral tariffs, it is going to be country specific. and what i would say to those people is if you have a trade deficit with the u.s. for your tariffs are much higher than the u.s., then you have a problem. but potentially if you lower your tariff rate, you may be able to be in the clear. jonathan: there was a massive focus on this over the weekend whether april 2 with the date of peak uncertainty, if we could move on, move past this and equities could deliver somewhat of a relief rally. the day we have certainty could also be the day we appreciate the economic consequence of it. lisa: this to me really goes to the heart of the anxiety right now. no one expects certainty on

april 2. the question is what is the new paradigm and how much is that going to have ramifications on the hard economic data? it's why i think that this week's pce report it's going to be interesting. that said, it is likely to be more of the same. the hard data showing everything a status quo might be a slight deterioration of where the soft data deteriorates. jonathan: kicking things off with a better tone this monday morning. equity futures firm or by 910's of 1% on the s&p. coming up, we'll catch up with keith lerner of truest following a winningly for equities, terry haynes of pangea policy and michael darda on positioning for the end of the business cycle. we begin with stocks higher on sites that the next round of tariffs might be more targeted than expected. on a shorter-term basis, markets are becoming stretched to the downside and our work suggests the market is in the ballpark of

a bounce. keith, what gives you the indication that maybe we are in that ballpark for a better bounce from here. keith: great to be with you any great to see some green on the board this morning. back in february, we actually downgraded equities when we were around 6000. around march 11, a lot of our work suggested that the market had gone too far too fast to the downside. we had a two point contraction over two weeks. this directly outside the pandemic a last 10 years we haven't seen something more aggressive than that. we saw some technical indicators become extremely stressed and we also saw some things like the call ratios spike as well. you put that altogether on a short-term basis, and we do think it is a bounce within a choppy range at this point. jonathan: credit to you, you

downgraded equities back in february. it's not just tariffs, though. this is that bank of america had to say going into the weekend, that deepseek and doge are much bigger wall street driver than tariffs. and this is where things get complicated. how relevant is april 2, have we already discounted the tariff story or not? keith: i think it is relevant. it is many different factors happening at the same time, but the tariffs are certainly a factor. you think about a market multiple, evaluation is based on confidence. and a keyword we keep hearing is uncertainty. that uncertainty has led to that kind of quick contraction. and by the way, uncertainty, we always lived with uncertainties. are you being compensated for that uncertainty? even right now we reset expectations a bit, we are getting a relief of something that is perceived to be better than expectations but also going

back to the original question, deepseek was a competitor that opened up a different view of the chinese technology companies that we didn't have six months ago in this market. altogether that also suggests the upside of the multiples relative to the beginning of the year is likely somewhat constrained as well. lisa: there's a real question at u.s. exceptionalism based on that uncertainty tax on valuations that already are elevated, and i think that if something a lot of people have been grappling with. you have to have a different kind of risk-adjusted metric in the united states with this level of uncertainty that removes the luster of former u.s. darlings. do you think that is an appropriate way to look at market valuations, and a reason to be a little bit skeptical of u.s. equities here? keith: on a short-term basis, we do think we have a bit more upside. i think we can probably rally, i think maybe we can get up to 59, 6000.

then we will maybe see some selling pressures. but specifically, u.s. still has some of the best companies in the world the matter what. the best free cash flow, earnings growth and so forth. i think you just had an opposite as far as expectations and you had a little bit of good news go a long way in europe. on a short-term basis, you saw it about a week ago, you had the biggest one month reduction in u.s. overweight. in some ways, this u.s. exceptionalism collapse relative to the beginning of the year, with a short-term rally we are talking about, i think you will see money go deep back into the u.s. and probably to the mag seven. lisa: a number of people have come on and said maybe this flow into europe is overplayed, maybe people have gotten over their skis with optimism that german is going to unleash a stimulus and really change structural aspects of their economy that hindered growth.

are you saying it is over, it is done, go back to the u.s.? keith: no. listen, i think the physical changes from germany are significant and time frames matter. over the next year i think that your allocations, you probably want to add more weight international than a year ago. i'm just saying on a short-term basis, europe outperformed by about 20% since december, and market still move in a straight line. you kind of reset the bar for the u.s., you have an elevated bar for europe. and a lot of that outperformance has been defense names specifically, they just moved so much that i think there is maybe a little bit of an unwind. i do think that fiscal stimulus is a big change, deepseek is a big change. basically what we're saying is like an accordion, you want to bring in those bets as you see

this short-term rally that we think has short-term legs. annmarie: long-term, how do you view the united states? right now we are discussing only one pillar of the trump agenda, which is tariffs. what happens when you get more deregulation and the extension of tax cuts? keith: that is that the question. ultimately that is a positive. after the election the market was all focused on all the positive. now we are focused on all the negatives. in a couple of weeks we start talking about tax policy again. i think it will be more of a measured picture as we move deeper into the year. to your question, i still think the u.s. on a relative basis, especially as you look at that longer-term, the majority of the most successful companies are still in the u.s. so we still want to be overweight u.s. long-term. i'm just saying that relative to the last couple of years, the magnitude likely has to come in somewhat because of how much we outperformed and some structural

changes like we talked about in europe. the other thing that's interesting, chinese tech and u.s. tech moved in tandem from 2015 to 2021. it is when china started to accelerate or the government start the crackdown more on the chinese technology companies. so as they have eased up now, those markets have performed better. you are seeing some better innovation out of china as well. annmarie: another way of asking my question is you upgraded cash from less attractive to neutral. when would you actually say no, that cash needs to be put to work now? keith: i think we are going to have a bit of a bumpy road this year in general. at some point we were there strongly neutral again and we have that cash, we are not really ready yet to deploy it.

some of the advisors we spoke to, they couldn't move that quickly. try to dial back more toward the neutral overall exposure. i still think at this point we will have some better opportunities because even with the tax policy debate that comes up, i think it's going to be kind of a choppy period. jonathan: appreciate your update. looking ahead to next week, april 2, so-called liberation day. for who? lisa: liberation for the uncertainty tax or not necessarily. a lot of people don't expect this to necessarily be some sort of conclusive moment. what i do find interesting is we are getting challenges to this idea that u.s. exceptionalism is over, that the money flowing into europe is going to stay.

should bring the transfected the u.s., so a really muddled picture on multiple fronts. jonathan: positive by around 1% on the s&p 500. with an update on stories elsewhere, with your bloomberg brief. >> donald trump's incoming wave of tariffs is poised to be more targeted than originally expected. sources telling us the upcoming liberation day tariff announcement set for april 2 is that to exclude some countries from widespread reciprocal tariffs. meanwhile sap has unseated danish pharmaceutical giant noble notice -- as europe's most -- $344 billion. meanwhile, shares are down over 70% year-to-date as it faces pressures and pressures in the weight loss drug market. and to "no white" fell short of forecasts, disney saying it delivered ticket sales of 43

million dollars in the u.s. and canada, shy of the estimated range of $45 million-50 $5 million. jonathan: cost $250 million to make. absolutely bombed. wanted to get you up to speed quickly. women's march madness bracket, do you even know? annmarie her during his winning. annmarie: am i? lisa: as you can tell, paying a lot of attention. annmarie: i will admit i cheated. the producer sat with me. jonathan: she did this for you? annmarie: it was a joint effort. jonathan: worldwide global including everly else, you are just one point behind mark robin of apollo. annmarie: thanks for that news, happy monday. jonathan: we are counting down to the tariff deadline. trump: april 2 is going to be liberation day for america.

we've been ripped off by every country in the world, friend and foe. that money is going to be coming back to us in the forms of tariffs. it's going to be numbers like nobody's ever seen. jonathan: live from new york city this morning, good morning. ♪ we invent them, we design them, we build them. and one day, we have to let them soar. ♪ i'm always coming home ♪

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♪ jonathan: annmarie didn't know and now it is the only thing she's talking about. annmarie: i'm leaving in the bracket, have you heard? jonathan: we are up by 1% on the s&p 500. yields are higher by three basis points. this morning, we are counting down to the tariff deadline. from: april 2 is going to be

liberation day for america. we've been ripped off by every country in the world, friend and foe. we've been ripped off on trade, we've been ripped off on military, we protect people and they don't do anything for us. it is just so unfair for years and years. now some of that money is going to be coming back to us in the form of tariffs. tens of billions, it's going to be numbers like nobody's ever seen. jonathan: the white house narrowing the scope of tariffs said to be announced on april 2. sources telling out the levees will not exclude some nations and the president previously announced, sector specific tariffs are now on hold. tyler kendall dredges now from washington for more. what has changed relative to expectations going into next week? >> the biggest headline appearing to be that the white house is no longer planning to implement those sector specific tariffs on april 2. these were tariffs against

specific sectors, to give you example of how quickly this has changed. trump told reporters coming back on air force one that we could've expected those sector specific tariffs to be stacked on top of the reciprocal tariff plan. at this moment it does not appear that they are moving ahead with that, but it could come later. the other important part of this reporting is that now appears the broader reciprocal tariff plan could be paired back and at some countries could be excluded if they don't have tariffs on the u.s. or they run a trade surplus. importantly, kevin hassett said that he felt that markets needed to change their expectations because not every country cheats the u.s. the trade. to be clear that has not been the messaging into really last week when scott bessent said that we could expect them to target a so-called dirty 15, the top 15% of our trading partner that make up the bulk of the balance with the u.s. here.

importantly though, we should note that these tariffs could still result in levels not seen in the u.s. in decades and this white house really is banking on tariffs bringing in revenue but at the same time this is considered to be a more narrowed down approach. change, but i like the word flexiity." how much example, one thing that is still held from over the weekend is that we are not expecting carveout as of now, even if these negotiations continue coming in and out of this white house for negotiations. we did see one serious step in talks when it comes to china over the weekend, u.s. senator steve daines for montana returning from beijing, the first top u.s. official to meet publicly with a chinese diplomat since the administration has started. still, as of now this administration saying that it is going to particularly target those countries and we know that when it comes to how he feels countries are either cooperative or being more combative, that will be factored into this.

that's why we are particularly watching the european union and those specific countries we are expecting to get hit with tariffs. just quickly, i would add that we saw australia, one of those countries that have been really hoping for those steel and aluminum exemptions over the weekend, their treasurer saying that they expect seismic shifts to the global economy. jonathan: they are not alone. thank you. something we haven't given a ton of thought about, particularly in europe and in china, but the weaker data started to emerge last week. might this be a small data point for financial markets, business confidence in canada absolutely collapsed. this is not something the market has really traded on, but something we could be trading on in the months ahead. annmarie: something the bank of canada is made moving on or not moving on in response to that potential weakness because they do see that coming down the pipe which raises this other restaurant, suddenly they don't think they are going to suffer as much as they did earlier this

year in the heels of some of the tariff that are about to be placed on. jonathan:jonathan: let's just start with your base case. what do you expect to see april 2? >> one is i think your reporting has been excellent on the idea that these are going to be less sweeping, less hammer like. my take on this has always been secretary besson's view that the tariff direction is always path-dependent. what he means by that is the reaction of other countries outside the united states to what the united states wants in terms of lessening or rationalizing tariffs and economic behavior more generally. and i think what you're going to get is you may it less than

meets the eye on april 2 but what you are going to see is a lot of negotiations between an awful lot of countries and the united states about how to lessen tariff barriers and failing that, maintain them. and maybe some nontariff changes as well. so again, one kind of uncertainty for another, i think. annmarie: jonathan said earlier the most correct word when it comes to situation, fluid. what kind of behind the scene negotiations, what is peter navarro saying vs. what is kevin hassett saying? >> i'm sure they are negotiating among themselves and navarro is a hardliner where hassett isn't. i would look to what is happening outside the united states as well. i know full well that commerce secretary lutnick's people have been giving sets of requests and demands to different foreign

countries so that they can react, respond, and hopefully change things, and that is one of the reasons why i say that i think forward here, this is very much going to be an uncertain field. this doesn't end april 2 one way or the other. lisa: when scott bessent was talking about the dirty 15, he also said some of these tariffs may not get into play because a deal was negotiated before hand. do you expect a number of companies to negotiate deals before next week? >> i do. some do, and a lot don't. that depends on the individual political and market situations as much as anything else. there government and the ability to react and respond to what the united states might want, and on the other hand, the coherence of how the united states, frankly, communicates its own demands and requests. we've seen that before for example in canada and mexico tariffs.

i'd expect that to continue here on a worldwide basis, frankly. lisa: maybe this is inside baseball but when i was reading about how the tariffs would not be as broad-based as previously expected i was thinking who is leaking this? what is the reason behind the concerted effort by the white house to send a message hey guys, it's not going to be that bad? is this a message to markets or a sign that this white house cares more about some of the turmoil in markets and perhaps they are letting on? >> probably a little bit of both, but more of the first. the president's statements are fundamentally not for markets. markets should pay attention to what the president says of course, they are fundamentally not for markets. presidents are tone-setters. trump is almost over the top at tone-setting, but what you are getting underneath that from beseent, from lutnick and

others is a desire to tell markets the reality of this is going to be somewhat different. not completely different, but there's going to be more nuance and sensitivity to market concerns. jonathan: appreciate it as always. this is something we suspected now for quite a while. maybe we will see all of this unveiled on april 2, but to actually see the policies implemented may take months and months after that, something you've indicated time and time again. annmarie: especially if we don't know how they are going to enact these tariffs. that is a national security letter. but they could need to have more weeks or months to get public comment. what i think is very interesting is jamison greer is getting on the phone with his chinese counterpart. a lot of conversations taking place in the lead up to this liberation day. lisa: the conversations of

different themes. are they about fentanyl, immigration, trade imbalances, something else that really doesn't have to do with anything above? these are the reasons why it's difficult. you talked about the dirty 15. china, european union, mexico, vietnam, taiwan and japan. just of those. jonathan: what a phrase, isn't it, the dirty 15. lisa: it's not a small group, either. jonathan: pretty ugly stuff. coming up, the fcc threatens to block, day for companies with -- threatens to block m&a for companies with dei.

>> formed by a lot of poor. equity futures posited by 1%. -- report, equity futures up by 1%. that is unlocking some gains across the board. lisa: talking about sector specifics. we keep talking about the so-called dirty 15, scott bessent put it that way last week. a real question about what the dirty 15 really is and how high the bar is considering they are our major trading partners. jonathan: it's a sign of the beast economies on the planet. let's turn to the bond markets.

in the bond market, yields at the front end are capped. the belief that chairman powell will go one way or the other, hold or cut. just locked in, lisa around four. lisa: after fed chair powell's comments last week, a lot of people said this is a fed chair who is more biased to cut them remain on hold because he seems to be emphasizing the weakening and growth from inflation that he says is transitory. we are expecting almost three rate cuts. that is how much it has gotten up to in market expectations. jonathan: lisa mentioned fx. euro-dollar is shaping up as follows. positive -- mike wilson and morgan stanley, relative to performance versus international developed equities

can swing back in favor of the united states. a weakened dollar should offer a tailwind for u.s. revisions. lisa: it makes exports more valuable and profitable as well. this is the argument people were making on the flipside. first quarter earnings were likely not to be as good because the dollar had gotten so strong. if you ever said on its head, you can how much -- imagine how much of a tailwind it would give. some people are using it as a contrarian indicator. jonathan: the dollar was weakened again this morning. president trump's next round of tariffs on april 2 is shaping up to be more targeted than expected. sources telling bloomberg that trump is set to exclude some countries. lisa: there is over 100 countries. jenny leonard was talking to me about this. trump really cares about the dozen that have massive deficits with the united states.

the question is those 10 or 12, does this mean he will bring down or not go as hard at them and bring down the reciprocal rate or will he still be very aggressive on those countries that matter to him the most. lisa: i wonder if the cats on the bag -- out of the bag. it isn't political he popular anymore to say we will come to the table and drop off tariffs. i wonder how much it's going to make it difficult for there to be certain deals and frankly to remove tariffs on the table. >> how many times has howard come on this program and talked about the fact that he will be having phone calls with his european counterpart and with the auto companies. the conversations are happening now. what gets done between here and now is still very fluid. i would remain that president trump wants to be flexible but there is no change. he's still the tariff man. jonathan: my hope is it brings the two sides together and they can negotiate lower tariffs on both sides. you are right to talk about

public opinion. public opinion has moved completely in the other direction. i'm not so sure that's the sentiment in canada. i'm not sure that's what the canadians one. lisa: it's hardening the lies and saying we have a country and we are our own entity. to talk about a 51st state is a kick in the shins to some of the people in canada. it raises the question of how much people are going to be more entrenched, even if it makes economic sense to come to the table and eliminate tariffs. jonathan: the tariffs are canada and europe. you can't say it's only going to hurt america. lisa: people have ignored that over the past month and talked about european exceptionalism because of the pall of uncertainty. the pall of uncertainty over the night states hangs over europe as well. jonathan: u.s. and russian officials meeting in saudi arabia today as president donald trump pushes for a cease-fire in ukraine.

ukraine's defense minister: talks between the u.s. and ukrainian officials productive and focused. annmarie: the technical team of the united states sat down with the ukrainians today. -- yesterday. today, they are sitting down with the russians. this is a moratorium on strikes and energy infrastructure and the black sea deal. this is the easy part. these types of negotiations are happening in 2022, 2023 and 2024. they were off the shelf deals. what's going to be hard is getting actual peace agreements on the 20% of land that's ukrainian, that's been russian held through this war. they are very aggressive. this administration wants a deal by april 20, a 30 day cease-fire. that's in a couple of weeks. lisa: the big question about whether vladimir putin will come to the table is the key question

at this point. my interest is saudi arabia's role. they are the epicenter of all of these negotiations, time and time again. the sort of circle of power is shifting. jonathan: the new switzerland. let's finish the story. snow white missing box office forecasts, widely expected to bomb and it did. the live-action remake delivered ticket sales of $43 million in the u.s. and canada, lower than the estimated range of 45 million dollars to $55 million. lisa: you can get into the politics and the casting. it got a 44% on rotten tomatoes. it was neither good enough to admire or bad enough to joyfully secure. what is it with these remakes in

human form of these classics that were lovely? annmarie: part of the problem is people want the nostalgia of the classics. david hand, this american animator, his son passed away, he worked on this. his son said his father would be turning in their graves. he said it's a disgrace that disney is trying to do something -- trying to do new woke things and the viewer is not into any of that. there is a lot of controversy on woke and what they should be doing with nostalgic storylines. the issue comes that may be viewers don't want it becomes too controversial. at the end of the day, you spend $250 million and nobody is watching it. jonathan: they are so worried about offending someone that they offend everyone, it's a movie that nobody wants to watch. this is not just cultural identity politics and all that stuff. let washington, d.c. have that

fight. this is business. you spend almost $300 million on a movie and it has absolutely bomb. you come across as embarrassed by your own source material, not a good position for disney to be in. they seem to find themselves in that position time and time again. lisa: if you are going to replace -- remake something, you can't replace certain characters with virtual images because you aren't sure how you want to do with it. it's a question of dealing with source material had on rather than around the edges. jonathan: going to various theaters like one in houston at 8:00 p.m., no one is buying tickets to this thing. it was shocking. let's move away from this story. we could spend a lot of time on this. the u.s. federal communications commission threatening to block

mergers and acquisition proposals from companies that promote d.e.i. policies. that could impact billions of dollars worth of deals in the communication sector. franklin joins us for more. it's not the m&a boom that we expected. can you give us the 35,000 foot view? what's happening here and where are things going? franklin: thank you for having me on this morning. a number of things are happening. the secretary of the treasury best and, two weeks ago, proclaimed that maga does not meet the m&a grade again. the expectations we had going into this administration have been let down. the statement by the fcc chair i think indicates that their broader policy focus is going to

be reflected on m&a. and d.e.i. is clearly something that is extraordinarily important to this administration . and the fact that they may, this is still a may, bring that lens to certain transactions is reflective of that. this is not ronald reagan's ftc or doj, when it comes to merger review. it is much closer -- this is a populous version -- populist version of what we saw with lina khan in the last administration. >> one of the princes him's was it was inconsistent. it went after certain companies like affordable luxury that seemed like random, made-up concepts that undermined the concepts that different corporate executives would have that would be signed off and what wouldn't.

is that something you are seeing continue in this administration? franklin: i think there is a hesitation on the part of senior executives and boards of directors. i don't think it is necessarily about the merger approval. because i think most of these transactions will ultimately happen, which has historically been the case. the issue is really around the broader economy at the moment. and i think that there are concerns. you are talking a minute ago about rate cuts and the weakening economy. and what's going to happen with exchange rates. mna is not going to happen where there is uncertainty, whether it's about tax rates or exchange rates or the economy. once there is greater clarity, and i think as we get into this administration in the course of the next few months, there will be greater certainty. my expectation is that the back

half of the year will be quite busy and robust because there is that certainty that is lacking to some extent at the moment. annmarie: i would love it if you would give us a reality check. there have been articles of the undermining of the legal system and how this would challenge deals of the corporate actions that would take place. do you think that is all noise and essentially what we are seeing is corporations acting illogically amid an uncertain economic environment that will come around and operate business as usual later this year? franklin: my expectation is it will be very much business as usual. we'll certain companies deemphasize d.e.i. and some other policies? absolutely. by and large, what we are going to see is what companies do today.

u.s. and non-us companies. they adapt to the political and economic realities of the moment. and that's what boards and managements are paid for, to evaluate that and look at what's in the best interest of their shareholders, how do they create the most value for their shareholders? to me, that's business as usual. i am seeing that and expect to see that going forward. annmarie: we are seeing that from the likes of last week. jp morgan's call and -- calling it doi, diversity, opportunity and inclusion. is this rebanding for the -- rebranding for the trump world? franklin: there is a large misunderstanding created by politicians that somehow d.e.i. was discriminating against certain people or classes, people like myself.

older white men. the reality is it was making sure that people who were underrepresented, who were talented had opportunities. to some extent, it might be rebranding. to some extent, it's also education to the fact that companies, law firms and investment banks aren't discrediting. they are in fact simply making sure the best and the brightest have opportunities that are retained and promoted. i think that's what's happening great i think that will become clearer as time goes on. it's a bit of a rebranding. it's a refocusing. jonathan: we appreciate your opinion. thanks for joining us. i wish we had named it development opportunity investment. and i wish they had focused on

socioeconomic status and invested in those unities and got all of those companies to do that and except this will take 10, 15, 25 years and you can't just do it at entry-level jobs. you can't just say we only want one kind of person from one kind of college. elvis worked in practice is not exactly how this worked in theory over the last four years. lisa: there are a lot of companies that are arguing that and have companies that go into middle schools and elementary schools. i've seen it. there is a question of how it's being messaged in a time where the previous regime had one image and this regime has another image. what are companies actually going to do to reach the goals you laid out? a lot of people would agree on them. jonathan: equities on the s&p 500, up by one percentage point. >> mark carney calling for a federal snap election to be held for 28th, while giving a stark

warning about president trump, saying donald trump wants to break us so america can own us. carney looking to convince canadians he's the right person to defend the nation against u.s. aggression. a u.s. delegation that includes michael waltz will visit greenland this week. the territories election winner says it shows a lack of respect and is seen as a move to exert pressure on greenland as president trump ramps of rhetoric that the u.s. should take control of greenland. arkansas upset st. john's amid another legendary run for john calipari. uconn's quest for a third straight title ended with a loss to florida. there are zero perfect brackets

left. jonathan: up next, navigating a regime change. >> the fed, like so many others, are navigating a regime change. communicating in a way that convinces people the e.u. will have the possibility of rate cuts, because growth is problematic. jonathan: that conversation is up next with michael darda. live from new york city, this is bloomberg. ♪

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jonathan: equities on the s&p are a firmer by a little

more than one full percentage point. maybe the effort on april 2 will be more targeted. bond yields are higher by four basis points. the 10 year is at 4.2864. >> the fed, like so many others, navigating a regime change, communicating in a way that convinces people that the e.u. will have the possibility of rate cuts, not because inflation is coming down but because growth is problematic. doing so without fueling inflation expectation which already is worrisome. that's what we need to do. jonathan: investors are preparing for a total shift in global trade. the next round of trump's tariffs are planned for april 2. michael darda wrote the following. if the trade war leads to the

end of the business cycle, cyclical sectors will fall hard. michael joins us now for more. welcome to the program. let's back up and get an understanding of where we are in this cycle. the survey data looks weikel -- weaker. is it inevitable that the hard data will come next or do you think that's avoidable? michael: thanks for having me on. that's the risk. we have seen a really large and pronounced rollback in both business and consumer confidence. obviously, we know there is not a direct we've through into the real economy. but the risks have gone up here, in terms of growth slowing or the business cycle potentially coming to an end. markets reflect that with the 10% correction that we have seen so far this year. i think we need to be a little careful here.

i would not just be buying the whole index here simply because we had a 10% correction. the investment sentiment surveys have crashed. usually that is a bullish contrary indicator. s&p 500 valuations as a whole still remain elevated, more than 20 times forward estimates. those estimates by our analysis are probably a percent to 10% too high here. i think you have to pick your spots. lisa: that's where i wanted to go, the idea that sentiments have been so bearish. and why you don't think that is a buy signal today. i wonder what you would have to see in the economic data to give you confidence one way or the other. a lot of people are saying don't pay attention to the hard data because it is lagging so far behind some of the quickly moving soft data. michael: that's the critical question. even these february releases that we are going to get this week, they are important may be

a little stale. unfortunately, i think we will have to see a few more months of data to see if this uncertainty, which has ratcheted up dramatically is starting to chip away at the real economy. two things to focus on would be critical labor market indicators. obviously, layoffs have stayed fairly low and stable here. first time jobless claims are about 10% above where they were right before covid crashed the economy. that is still a pretty good level. if that starts to shoot up, that will give confidence in the soft landing continuing. spreads are still very low. they have been moving higher. i watched those two really carefully as we -- i would watch those two really carefully as we move forward. lisa: the former chief economic

advisor to president obama set everyone overstates how much this matters for the economy. >> in terms of the hard data, for sure, definitely not in terms of these confidence measures. i think those are certainly responding to the headlines. i think that comment is correct. typically presidents don't have that much sway and they have to work legislation through congress. in this case, because you have so much of the policy changes on tariffs taking place through executive orders, i think it is a little different. we can see that in the behavior of financial markets, confidence surveys. bloomberg has a nice uncertainty index, which is ramped up dramatically. so, this is imparting risks to the soft landing. it looked like the fed had a low probability event but had nailed

the soft landing in this trade war trade i think it puts the fed in a difficult position. jonathan: michael darda with the latest on the survey data. another few reads of consumer confidence later this week at a time where chairman powell seems to have poured some cold water over recent rates. lisa: over the university of michigan survey. he was not saying that in 2022. jonathan: so annoying, isn't it? up next on the program, norman of csis and sharon miller of bank of america. the second hour of "bloomberg surveillance," is up next.

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>> the next couple of months could be a really rocky road. >> there is a perfect manifestation of policy uncertainty. >> the uncertainty effects are much worse this time than 2019. >> it's almost impossible for me to say we have seen the bottom and we can break out of this trading range and it is time for us to add. >> this is bloomberg surveillance with jonathan ferro, lisa abramowicz and and reorder in. -- and annmarie hordern. jonathan: the nasdaq 100 bouncing back.

up by 1.3%. the hope is that we can avoid a barrage of tariffs and a so-called liberation day will be a targeted day. lisa: this is enough to release a little bit of that side that people have. what this shows to me is there are people lined up to buy u.s. equities. any sign of good news, even if it is --, we are not getting a lot of details. there is a structural change where people are saying is the end of american exceptionalism over and we are going back to there might still be value here. annmarie: the only thing i will caution is donald trump cares about the 10-15 countries scott bessent called the dirty 15 preet we don't know how harsh they will be on those 10 to 15 and the measures they will take and the domino

effect that will have on trade. jonathan: we are at the mercy of the thinking of one individual and that individual could change their mind. this is a snapshot of where the administration might be right now. things are fluid and could change between now and a week away. lisa: which is why i asked the question last hour, who's behind some of these headlines? is it the economic wings of the white house advisors were saying we need to address the weakness and some of the calls we are getting from the corporate executives? that to me is a real question. jonathan: consumer confidence later this week, we will get two reads of that. the survey data has been really soft. will the hard data follow? consumer confidence reads dreadfully. lisa: deutsche bank saying we are likely to see more of the same. that i think is what a lot of people are counting on. annmarie: i go to the c-suite.

this is what mohammed told us when it came to the spiral of inflation on the way up. what's happening with consumers? what is nike and target and dick's sporting goods and the airlines telling us? they are taking a positive spending as much. jonathan: we will see what happens. in the next 60 minutes, we will catch up with deepak of deutsche bank. henrietta and sharon miller of bank of america. stocks are higher. deepak writing that we believe the u.s. equity market could move higher in a three steps forward, two steps back pattern. after the recent setback, we scale back our s&p 500 target to 6300. what are you expecting april 2?

>> i think you need to establish the base cost of trader tariffs on the economy. what's the impact on slow growth and higher inflation from the trade of tariffs? i think the liberation day might give us some insight into what that cost is going to be. as you said, i don't think it's going to be concrete. i think it is a moving target. you really can't make too much out of it. it is a pivotal moment in this first six months of the trumpet ministration. jonathan: it might be considered as a day where we could move by peak uncertainty. it can't get a lot worse than this. others have made the point over the last week or so that perhaps that's the moment we get the certainty and realize the economic consequences of it. the moves we have seen in equity markets have not been about

tariffs. they've been about other things. how much weight would you put on that argument going into next week? deepak: there is some credence to that. overseas, the markets have been going up for a few reasons. i think the overseas markets are screaming to pay attention, u.s. investors, to us. we have had such a strong bias over the last decade or so. i think trade and tariff cannot be taken lightly. just because it has an amplified impact to the economy. it might take a while for us to get a grasp of that. i don't think april 2 means that there is a shelflife and there is a time point after that where everything is hunky-dory. it may take a while for us to get a sense of what the impact is going to be. lisa: what do you make of michael wilson's argument that some of the damage we have seen to the dollar will help u.s. companies boost their earnings at a time where it's been a headwind over the first quarter? deepak: it could and it should. the potentially weakening

dollar, given the s&p has 40% coming from the overseas market, that should help. but then you have the trade and tariffs impact which could easily subtract another 1% to 2% from the earnings. one of the main reasons was the earnings for this year to next. we went from 275 to 270. i think it plays both ways, lisa. the other thing that we haven't seen yet which might be positive for the second half of the year was the deregulation story. we have not seen too much of that. that could have a positive impact on mna. lisa: how much do you see this as a zero-sum game? where there is a ball of money and it is shifting from place to place. now it is shifting to europe and china with the promise of fiscal

stimulus and possible reform, do you see it that way? that it is one of the other at the expense of the other? deepak: not really. i think you can have stimulative measures. i think what the market, especially the boh survey that just came out is suggesting is european equities are growing at the fastest pace since 1999. that tells me the changes in the fiscal policy and the monetary policy is making investors take notice of europe and germany and putting money, and china is going through its own -- i would make the point that it is not because of the lack of exceptionalism, other countries are getting it together. lisa: at a certain point, you have to imagine that if this does continue, and yields are going to respond. do they hamper that? deepak: indeed.

i think that is where you want to be very closely focused on what the rates market is telling you. the fiscal capacity that a country like germany has is completely different to where we are in the state. germany has not had this kind of fiscal stimulus that they are planning, you're looking at close to one trillion euros. which includes decarbonization and infrastructure and defense spending, which might be another 400 billion euros. you are looking at 4.3 -- a $4.3 trillion economy that might have one trillion euros of input over the last 10-12 years. that will increase gdp by 1.5%. that is quite meaningful. i don't think at this stage in the u.s. we can afford that. we had a post-pandemic byproduct of all of that stimulus in case

of unintended consequences. i don't think we can go that route. there are certain countries that have a much bigger capacity for physical change and you are seeing that happen, which i think is positive for global investment. the other thing i would say is there is a great cutting globally. ecb is only slightly restrictive compared to where the u.s. monetary policy is. you look at the 4.5% upper range and are inflation rate, it is much more stricter in a way. both policies are making european countries, especially germany, take notice. annmarie: do you think there is still upside when it comes to term and equities? deepak: i would say a little more. when you look at when it started over the last three months, you've seen the multiple for euro stocks going up two percentage points.

15 times earning to 17 times earning. historically, there has always been a discount vis-a-vis u.s. equity markets. right now, that discount is 30%. it's coming from 35% to 45%. the underperformance cap has been reduced. i would not be surprised -- jonathan: you might have to look through some week economic data in europe in the meantime. in 2025, when the tariffs started to hit, europe -- start to hit, europe and china are going to file. -- feel it. lisa: people seem to be discounting -- jonathan: we appreciate your time, as always. lots to talk about and think about. with an update, let's go to the

bloomberg brief. >> president donald trump's incoming wave of tariffs is poised to be more targeted than originally expected. sources telling us the president's upcoming liberation day tariff announcement is set for april 2 and is set to exclude some countries from widespread reciprocal tariffs. u.s. and russian officials are meeting in saudi arabia for closed-door talks, following discussions between america and ukraine. they aim for a cease-fire in the war. on sunday, pope francis made his first public appearance since being hospitalized more than a month ago. the pontiff was discharged from rome's hospital and returned to the vatican after thanking crowds that gathered outside to see him. that is your bloomberg brief. jonathan: up next on the

program, the fractured democratic party. >> i knew when i cast my vote against the government shutdown that there would be a lot of controversy. i did this out of conviction. our caucus is united in fighting donald trump. jonathan: that conversation is next with henrietta treyz. live from new york city, good morning. ♪

jonathan: equity futures positive. the nasdaq 100 up by 1.4%.

the hope, and i stress the hope because this can change, is that maybe we can avoid a barrage of tariffs next week and things are more targeted. as these tariffs come together on april 2. lisa: what's interesting is the nasdaq 100 is leading after underperforming the rest of the complex. does this mean people feel a sigh of relief? that the tech sector won't be as effective considering the dirty 15 still includes china and the european union? jonathan: deepseek and doge have been a bigger wall street driver than tariffs in q1. april 2 is affecting the global data. china and germany stocks are up 20% or so since the u.s. election. no one really believes the trade war equals a recession and a bear market.

have we been trading on these trade tariffs? that's been the discussion throughout the weekend in the notes i've been reading? -- reading. lisa: a lot of people say not really. there are pockets of it. if people were looking at that, why is it such the opposite of the trade last year when the rest of the u.s. was supposed to catch a cold when the u.s. sneezed? suddenly that was not part of the equation. jonathan: futures up 1.2% on the s&p and 1.4% on the nasdaq. up next, the fractured democratic party. >> i'm not stepping down. i knew when i cast my vote against the government shutdown that it would be -- there would be a lot of controversy. i did this out of conviction. in my caucus, we have a disagreement as to some people voting one way and some people voting the other way. but, we have all agreed to respect each other. the caucus is united in fighting donald trump. jonathan: here's the latest.

democrats calling for chuck schumer to step down after he boated for the gop spending bill. this is senator bernie sanders and alexandria ocasio-cortez, who drew tens of thousands for their fighting oligarchy tour. tyler kendall joins us with more. where does schumer stand now? tyler: he remains defiant amid these growing calls for his removal and the stark criticism that is coming as it appears democrats are divided over how exactly to counter president trump's agenda. for example, the government shutdown vote that is leading to this criticism, schumer aids said they knew it was a lose lose situation because on one hand, they wanted to affirm spending guardrails but they knew they could be blamed for a government shutdown, particularly when it comes to federal workers. we have to keep in mind that president trump has enacted much

of -- unilaterally. congressional republicans have set up the next big item, the fiscal agenda to be passed. they need a simple majority so democrats won't have the chance to engage much when it comes to those negotiations. we should put into perspective that chuck schumer is not up for reelection until 2028 and there is no democrat buying for his top leadership posts and that we need to happen before we have serious conversations about a potential change in leadership at the top of the party. we should note that there is going to be a heightened focus on the midterms read they will challenge democratic incumbents with progressive challengers. it will be a tricky math game and democrats will have to tread carefully. in the house, there are 13 democrats that represent districts that president trump won. they will have to thread the needle in areas like that considering there are such slim majorities.

annmarie: 27% of voters say they have a positive view of the democratic party. 7% say those views are very positive. how much work to they need to do to close this gap? tyler: it has appeared that democrats have struggled with exactly how they want to counter the trump agenda. first, we heard it would be against president's policies. then we started to hear it shift toward elon musk and the doge efforts. we are stunning to see democrats, senate democrats go home to their home districts and hold town halls, listening to constituents about how they would like to see this move forward. we have to keep in mind that president trump won when it came to his economic plan rate perhaps that is the part that we have heard democrats say they are looking to capitalize on. they are attempting to coalesce on a broader message that can counter president trump and his

agenda. jonathan: maybe we can avoid a barrage of tariffs next week and perhaps, according to people familiar with the matter, the effort on april 2 from the president of the united states might be more targeted. henrietta treyz joins us. welcome to the program. i'm sure you read our reporting over the weekend. i would love your opinion on what you made of it and what you are expecting for the next week. henrietta: amazing reporting as always. your trade teams are incredible. i think that the targeted tariffs idea is something we could see repeatedly from the trump administration. the universal tariff is not realistic. . it's not surprising that certain countries are carved out entirely. i think other product funds will be part of. we have the lower tariff -- carved out. we have the lower tariff rates.

i'm interested to see which countries -- i would point out india as a nation that could be seeing its own section 301 investigation. that is something that concerns me along with the pharmaceutical industry. once those tariffs come on, they do not come off. annmarie: the market might be breathing a sigh of relief. the scope and the net the administer she is casting may not be as wide. when it comes to repeat offenders when it come to the -- comes to those trade imbalances, it might be quite harsh. henrietta: i don't think it's understood how insidious these tariffs are. -- their products crossed the border eight or nine times and they are not even a finished product yet. before you get your tomato at the grocery store, the seed that

it is grown by has crossed the border's eight or nine times. these stories will come out as the tariffs go into effect. and the economic feedback of that multiple round tariff and the complete lack of clarity from the trump administration on whether or not it is usmca compliant, none of that is clarified and that will be months to years in the making. annmarie: are they going to be any tariffs that come in on day one? henrietta: i expect for april 2 two need to pack at least a little bit of a punch. at least at the expense of the auto manufacturers. present trump has had a serious issue with them for years. everybody should remember how serious the risk of those tariffs were in his first term. i'm exciting those to be ready to go on april 2 as an example. lisa: there are ongoing hearings with ustr from a number of different trade partners to understand the economic scope of some of the proposals as you

were mentioning. the latest in washington has to do with ships. ships built in china, getting taxes on capacity. some of the goods shipped around need to be shipped on u.s. ships in order to avoid certain tariffs. a lot of people point to the fact this is unfeasible given the number of u.s. ships. what are you expecting to learn economically him some of these hearings that we have underway? >> i want to see which states come out in support of this. there will be domestic shipbuilding that happens in the united states. we want to watch what states those are in and which districts, who will collect revenue and fees and who stands to gain from those tariffs because that is underscoring another reality of this administration which is that federal spending is about to explode. whether it is the tax bill that will be $5 trillion, exclusively deficit financed if the governments meeting with the parliamentarian goes their way. we are seeing additional spending on defense, immigration

and shipbuilding to the tune of $342 billion in the current senate budget. there is a lot more spending to come. lisa: as we look to next week, it seems the scope will not be as large. annmarie: at some point, will we have those sectoral tariffs that were supposed to be paired with this reciprocity on april 2? henrietta: great question. i would look at any section 232 investigation. those are sector specific. this deal on tariffs is sector specific. the president has the same kind of agenda on things like copper, uranium, lumber, dairy and all kinds of different components that target divisional nations to a more extreme account. watch for the investigation. as i pointed out with 30, those may take six months to complaint. -- complete. but once they go on, they do not come off. the china tariffs and the 301 have been in effect for seven years and rising.

china is in violation of the phase i trade agreement. they have not followed through on their commitment to buy 80 billion dollars worth of goods from us. they are below 2017 levels. there is a lot that can change, even if some of these pieces are walked back, which they are not ready to go on. i would align myself with your previous guest which is to say there'll be a lot more here. april 2 is not the beginning of the end, it's the beginning. jonathan: that's not to the music -- that's not music to the ears of the equity market bulls. annmarie: potentially we are still going to be in negotiating mode this week as well as after april 2. this could go on for weeks and months. as we've been saying on this program a number of times, uncertainty is a feature, not a bug of the trump administration. jonathan: later on this week,

another read on consumer confidence. we get two rates on that through the week. just how awful are things for consumers right now? based on the sentiment surveys, pretty dreadful. you're not seeing it in the hard data just yet. lisa: can you dismiss it? that's a conversation people will continue to have. jonathan: up next, craig trudell. in new york, this is bloomberg. ♪

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jonathan: equity session highs are up by 1.2 percent on the s&p 500, nasdaq up by 1.4. two hours away from the opening bell. we've got your morning movers. >> a big mover is 23 and me, down 40% after the genetic testing company said they filed for chapter 11 bankruptcy protection. they said that their cofounder and ceo, one of the biggest names in tech, has resigned. next up, ace k, and american home decking company, up 20% on some m&a action. james already, which sells building materials, agreed to purchase it for 8.7 $5 billion.

the ceo of james hard you was actually forced to defend the deal after shares plunged in sydney trading because of concerns that there is too much uncertainty to place a big bet like this on the u.s. he says he is focused on the long term opportunity and not the immediate risks that he says are posed by this administration. last up, super micro computer's is now up just slightly after goldman sachs downgraded the stock to sell. they said the competition in ai servers is only intensifying and that supermicro competitors have done a better job capitalizing on the opportunities, so for that reason they think that market share leadership for super micro computer will decline. the stock is up 40% year-to-date, something to keep in mind. jonathan: thank you. more on that through the hour. the canadian prime minister called for a federal snap election on april 28, describing the vote as consequential and saying that donald trump wants

to break us, so that america can own us. lisa: can you make a deal with a feeling that seems to be galvanizing his party? i will say, it's a good time for him to call a snap election considering how much sentiment has shifted away from the conservatives towards the liberal wing in canada and it seems to be what he's doing. suddenly he has a real chance and likelihood of winning the election. annmarie: in january conservatives had a 20 point lead. whether it was rhetoric or tariffs, it's brought the liberal party together and more canadian constituents backing the liberal party. he now has a better shot because of the republicans in the united states, donald trump. jonathan: the former prime minister, unpopular at the same time, him getting out of the way is a relief party. we brought this up with ambassador mcmillan over the last week or so, it's kind of surprising to me and it works against what this administration wanted to work towards. you would have thought that a prime minister looking towards a

donald trump could have created a north american powerhouse with energy and energy abundance at the epicenter. now they will have someone not willing to work with them based on the polling at the moment. things are tighter than they could've been. lisa: going to the ultimate question of what was the intent here? was there a collective intent to create something like a trade union, like what nouriel roubini was talking about with mexico and canada? annmarie: we talked with ambassador mcmullen about this idea of conservatives in both countries. this is what the alberta premier said to breitbart, she was trying to get the administration to pause the tone, the rhetoric, the actions on tariffs to help the conservatives get into power and it has backfired. lisa: not everyone can do what germany is doing, that amount of fiscal easing that you are about to see in germany. they have the willingness and the ability. i'm not sure canada and prime minister carney can make the same bat. that's a problem that canada has

got right now. the tit for tat doesn't serve them well either. what you could see in places like canada could be dreadful. we got a taste of that in the last week. lisa: economic sentiment is plummeting and it's asking the question of how quickly this will trickle out when other economies are feeling even more. jonathan: taking a back down to washington, d.c., chuck schumer saying he won't step down even as fellow democrats turn up the heat, facing backlash after voting for a recent gop led funding bill that averted a government shutdown. annmarie: poly market, overwhelmingly 77% he'll remain minority leader. i will say this, tums of rumor and chatter that when he is up for reelection, potentially congresswoman alexandria ocasio-cortez could be looking at his seat. it annoyed a bernie sanders so much over the weekend that when he sat down with abc and was asked about this, he said he got

up and wasn't doing nonsense, he wanted to talk about real issues. this is percolating in the beltway in new york. lisa: highlighting a democratic party schism ahead of any further election, who has the gravity of power? does it end up with a more centrist urban democrat that has been in the congress for a while? or will it be the aoc's of the world? you saw that over the weekend with rallies and with chuck schumer saying look, we didn't have the leverage in their isn't necessarily the ability for us to do this. this is my job, i take the fall. they will have to reconcile this schism. jonathan: agree or disagree with policies coming out of the oligarchy, it's popular because it focuses on economic policy, not identity politics, something democrats have struggled with now for a number of years. annmarie: sanders talks about economic policy constantly, but he said i'm in my 80's, tired, i'm from vermont, but he is

drawing crowds because he talks about economic issues that he has always talked about. jonathan: bernie sanders, filling some big stadiums. the second lady is heading to greenland this week as trump continues to discuss purchasing the nation. the white house national security advisor and economic energy survivor part of the group. annmarie: i think she's going to be going to a dog sledding event. many people are looking at that in saying that we can get on board with that. talking about europe. then you hear that the national security advisor is going and also the energy secretary and you think -- maybe there's actually more movement behind the trump rhetoric around wanting to acquire greenland? the sense that i got in washington two weeks ago from the nato secretary general was that he is not envisioning a future where he needs to get involved with nato countries going back and forth, but clearly the u.s. sees this as strategic. jonathan: style versus

substance, this is bizarre. come from nowhere for many people. substance, has refocused the minds on the geostrategic importance of this part of the world. it's coming up in conversations in many ways where it really wasn't over the last several years and perhaps should have been? jonathan: my question is, what could the u.s. do if they owned greenland that they can't do now? it has a lot of power over that region with respect to an army base there, as well as the right to engage from there. it raises a question, what would be gained by taking it over? annmarie: i did ask someone this. whatever you have in mind with what you want to do in greenland, why can't you do it within the framework of nato? they said it was bureaucratic and would take years. for them it's about speed. jonathan: earnings numbers dropping moments ago. byd reporting after announcing new cars that power up with a

charge in just five minutes. craig has more. first look, looks like upside surprise. what were we expecting from this company? greg: i think we are seeing a bead on the top and bottom line. as you alluded to, this is a company that is not only coming off of an incredible year, but it is adding to the momentum with real tangible progress on product and innovation. you know, maybe of the sort that you wouldn't have expected to see from a company like tesla years ago. you are seeing that from the chinese, now. with the pyd announcement last week of 400 kilometers worth of charge in five minutes, xiaomi really gaining momentum in china, they are up today with plans to raise over $5 billion to fuel their ev expansion, you are just seeing the chinese

competition for tesla going from strength to strength, here. we are seeing it in these byd numbers, actually, them re-taking a lead over tesla in terms of annual revenue. just a real strong number out of china and out of the companies that are sort of taking the fight to tesla in that market. jonathan: for a long time we said the u.s. innovates, you -- europe regulates, china replicates. i'm not sure that's true anymore. are we seeing this again with byd and the fast charging with the immense range these vehicles could have in the future? i've said it repeatedly, this is the most competitive market on the planet, the auto market in china. is tesla getting squeezed? can they compete there? craig: even elon musk would say, and has said, that this is the

most competitive. i think that he still has articulated this believe that tesla is still ahead of these companies. yet, that is where his competition is toughest. when you look at what pyd has been doing over the last few years, the lead they have built in that market, the momentum they are managing in europe, even in spite of the tariffs, i think it is still the case that this is a manufacturer that is highly relying on the domestic market and is having some challenges with growing overseas , but we are seeing here in europe byd really continue to grow in spite of the fact that they are getting hit with higher tariffs. we have seen those tariffs really slow some of their peers, their chinese compatriots. byd is really continuing to grow in lots of markets across europe. lisa: is there vision a bit too good to be true over actual

reality? i ask this with the respect -- with respect to their promise of cheaper cars with chargers that can fuel up in five minutes. are these things safe? are they viable in mass production? craig: that's a really important set of questions to raise. of course, we have seen over the years, you know, automakers stage these events where everything is sort of set up just right and these are effectively stunts. i will say that byd does have a track record of not necessarily getting out over its skis, overpromising and under delivering. there are also questions, as you alluded to, of is this the type of charging you want to be doing routinely and regularly? the answer to that is probably not, but that applies to electric the apples on the market today. you use these super charges, byd would refer to it as flash charging. you use them when your absolutely need to and are on a

road trip and don't want to spend 30, 40 minutes or more waiting to power backup. for the most part, i think, ev owners are, you know, living their lives in a way where they don't necessarily have to use these quick chargers all the time. if you can charge overnight, it's better for the longevity of your vehicle. there are a lot of caveats and questions we are going to have to tease out. just how big of a deal the announcement last week was. annmarie: it was over a decade ago, but elon musk told us that byd has big problems and he thinks they need to focus in on china and make sure they don't die. byd is not dying, they are thriving. how does tesla respond? craig: you know, i think that one of the things that tesla has really sort of dug in its heels on is this idea that a narrow

and really small focused lineup is the way to go. i do think that you have to sort of second-guess that strategy, given the lead that byd has jumped out to. how many more models they have to offer. how much more diversity they have in the lineup. and how much more affordability they bring to the table. half a dozen models that you can get from them that are substantial discounts to the cheapest model 3 that you could buy in that market. you know, there's a real question of how much tesla can compete. will they maybe stick to this? in the sense that perhaps they could be more profitable or stand a chance of greater profitability by sticking to this more premium strategy? perhaps. but that means giving up real growth and that is only going to feed into this broader trend we have seen from tesla, which is that on a global basis, this is a growth company no longer rowing. jonathan: appreciate the update,

craig trudell, from bloomberg, on the latest with byd, top and bottom line from that major car manufacturer out of china. lisa: at the same time that we have seen a miss from tesla around delivery and performance in china, it goes to the question you asked. imitates, regulates, innovates, over in china, how much are we seeing true innovation in china like we are seeing from and financial i'm a potentially, challenging what we see in the united states in a significant way? jonathan: in an industry that has had several fine it -- huge barriers to entry, an argument that many officials in washington could make that argument. lisa: that if you have this idea of potentially increasing the barriers, it might be helpful to ours, or could potentially stymie some cross-pollination. these are ongoing conversations and i don't have the answer. jonathan: force people to manufacture, force people into

joint partnerships. there was always the accusation that they are taking that technology to get a foothold and now there are advancements. we talked about imitation in that country for a long time but now that they can have these value added advancements in the way that you would expect them to come from the u.s., now they come from someone else. annmarie: china has a long-term view. they own the entire supply chain of batteries. not just the raw materials, but the processing. i think of their long-term view is that you cannot just buy our batteries anymore if you are tesla or someone else and wanted to say i had a five minute charging battery. you have to buy the car and we will be the detroit of the world. jonathan: geopolitically it makes the rest of the world vulnerable as they push towards net zero and the green efforts of the last decade or so. you can make a climate argument. can you make an international relations argument? a gums -- becomes more dicey on that front. jonathan: if there is a big -- lisa: if there is a big barrier,

how much more do they sell cheap goods to the rest of the world? to your point, it's an interesting one. if china benefited from u.s. ideas, forcing them to bring factories there, is the u.s. going to miss out on getting chinese ideas if those barriers are up significantly? jonathan: that's the latest on byd. now we've got your bloomberg brief, stories from elsewhere. >> israeli airstrikes killed two members of the acting cabinet of hamas on saturday. the 20 member governing body has only nine remaining officials at this time. hamas confirmed the deaths saying that they were among the fatalities following the roughly three months e -- cease fire that expired earlier this month. a chinese premier saying that shiny -- china is ready for shocks as the world prepares for more tariffs next month from donald trump. he told foreign business leaders that the country should open up markets in the face of growing

economic threats. u.s. officials asked italian egg producers if they can ship products to the u.s. amidst shortages. the italian egg producer head was surprised to hear the request and "thought he was on candid camera," as the u.s. experiences its worst ever bird flu outbreak. jonathan: up next on the program, a feature, not a bug. >> this mentality is not about where we are. it's a feature of the cycle. we just have to learn with it. jonathan: up next, we catch up with sharon miller -- sharon miller at bank of america. this is bloomberg. ♪

jonathan: session highs on the s&p 500 up by 1.2% on the nasdaq 100 this morning, positive by close to 1.5. under surveillance this morning, a feature and not a bug. >> this opportunity is not a bug of where we are in the cycle. it is the feature of the cycle. we just have to learn to live with it. a lot of consternation over what happens on april 2. april 2 will indeed be an important day. we will know a lot. but we will also not know a lot. it's the start, not the end of the resolution, not the end of the uncertainty. jonathan: the companies on the front lines uncertainty, bank of america writing the following -- despite continued optimism,

small business uncertainty is on the rise according to aggregated credit spending data, they are spending card spending across the board. sharon miller, cohead of business banking at bank of america, joins us for more. good to see you. good morning. the little spots of weakness we have seen emerge, what's behind it? sharon: we are seeing weakness in manufacturing firms, especially the smaller firms. those with 500,000 revenue and below. as you look at the larger companies, we are still seeing strength there. still seeing strength and retailers. with the exception of furniture. jonathan: -- lisa: which really shows the ad hoc nature of it. i'm wondering about the difference between big and small businesses. small business is slowing card spending around -- across the board. is small versus big the right distinction to make? sharon: i would say small versus

medium. anywhere from start up to 50 million in revenue. small to midsize companies are in their. generally speaking we are talking about $1 million and below. annmarie: what's the stand out? when did industry has been strong at the moment? sharon: restaurant spending a strong. we are seeing strong strength in shopping. going out to eat. all of those types of retailers. e-commerce. i think that there are some trends there. so, you have to see what the data is telling you, not necessarily what the consumer is telling you. lisa: does this card data tend to point to strength or weakness depending on where we are in the cycle sharon:? it's a wait and see attitude. there are things on the horizon with some dependencies businesses are thinking about, whether it is tariffs, the business environment, taxes, how is it all going to come to life as they think about capex? jonathan: saying on capex, how

do you get a decent idea on whether those decisions are being delayed, pushed back, or totally derailed? which one do you think it is at the moment? sharon: i think delayed. it's a wait and see attitude. people are still spending on the business, though not as strong as we saw last year. there is some wait and see out there. they don't know what's going to happen. as i'm talking to clients around the country, that is what i'm hearing as well. we want to expand, we want to invest. we are holding off a bit to see what's going to happen. jonathan: these companies have a massive role to play and employment in the country and we are starting to focus even more on the hard data and the employment numbers and jobless claims coming in every week. going into a wait and see economy, how long until you start seeing firing instead of hiring? is there a typical timeline? are we in no man's land? sharon: i wouldn't say no man's

land. we've got to watch the data every week, every month. but i would say that in business formation and for those who are actually putting together plans to hire businesses, we are seeing an increase in the number of new businesses opening that are talking about -- i'm going to employ people. so, that is good news as you think about where we are today versus pre-pandemic levels. lisa: are there significant exceptions? we talked about the ad hoc nature of who gets what hurt and who doesn't. are there areas, small pockets with real deterioration? sharon: we are seeing a bit of deterioration in manufacturing, especially in the firms with less than 500,000 dollars in revenue. furniture is the only retail category where we saw the klein. those two areas are areas we are watching. jonathan: i feet -- i find the retail point fascinating, and it reinforces reading too much into

the survey sentiment. for him, for many economists, they are looking at this hard data holding up and there's not much to see. lisa: taking surveys online, people tend to say they feel less good. they all ran to online. i feel terrible -- why -- then they say i'm going to go shopping. this is what has been bearing out. annmarie: retail therapy. jonathan: that's on personal. [laughter] lisa: no no, i'm just saying it's like those things where they rant and then they move on. jonathan: is that how you approach friday? lisa: "you want my opinion on the world?" [laughter] pretty much. jonathan: sharon miller, appreciate it. up next, blackrock, the toussie group, kelty budget sick, nationwide, troy boyarsky of fss. the third hour of "bloomberg surveillance," up next. ♪

- people couldn't see my potential. so i had to show them. - i've run this place for 20 years, but i still need to prove that i'm more than what you see on paper. - today i'm the ceo of my own company. - it's the way my mind works. i have a very mechanical brain. - why are we not rethinking this? - i am more... - i'm more... ...than who i am on paper.

>> some kind of direction where this administration is going. >> most investors we speak with our not being in terrace. >> i don't know if the inflation effects of tariffs would last me moving beyond this year. >> the effect on growth is much

more long-lasting and significantly more consequential. >> the projections for growth are not consistent with a progrowth president's agenda. >> this is "bloomberg sureveillance" with jonathan ferro, lisa abramowicz, and annmarie hordern. jonathan: your scores look like this on the s&p, up by more than one full percentage point. nasdaq 100 hire by 1.5. perhaps we of on a barrage of tariffs next week. maybe the april 2 liberation day effort might be very targeted. we will get a read on how people feel about that this week. consumer confidence, we look to umich to see how people feel on friday. lisa: jay powell pooh-poohed that as a major metric given it has not complied with the data we keep getting.

at what point will the soft data catch notice, cap stock investors' notice? people seem to be pressing and volatility, that kind of any kind of downturn. annmarie: we need to remember what we've heard from officials saying they are currently in negotiation mode with some countries and may be the tariff very will not be that high if we come in with a deal and they say we will come out with a threshold if you don't hit us on april 2. maybe the scope will not be as big. when you are looking at 15 countries that have massive deficits with the u.s., they can be harsh. what is the secondary effect? jonathan: how many times have we seen this movie? one post from the president, markets swing the other way. is that how vulnerable we are, the president posting? lisa: who trades on these

headlines? how much credence can you give them if you are betting your portfolio. there will be traders on the margin that do it. i wonder about deepseek, coming out and talking about new technology that could potentially increase the efficiency of certain artificial intelligence models. that is its own story, a question around how believable it is what they did. how much of these stories are driving other things? jonathan: get a cheap ticket for snow white. come back to the markets. lisa: people watched it, and then they sold. annmarie: did you watch it? jonathan: i watched the trailer. we were anticipating this ever since the lead actress was announced. this was always the direction of travel for this movie. lisa: all i can say is i watched

a fantastic movie over the weekend. jonathan: can you tell us what it's about? lisa: an exotic dancer who speaks russian, who gets on with a russian oligarch's son. my point is, -- i'm not going to tell you. anyways, it is good, it is original. when are we going to move away from nostalgia to originality? never going to bring up movies again. i gave the very bare condors, basic understanding. annmarie: i always get nervous when she starts to talk about film. jonathan: coming up on the program, john delvin on target u.s. tariffs, dana telsey on the outlook for retail. troy gayeski warning investors

to buckle up. we begin with stocks higher on a more targeted u.s. tariff approach. as john balaban saying we remain overweight as policy uncertainty should ease over the period. good to see you. more confidence being long stocks versus bonds. help us understand why. jean: on the bond side, we are high conviction that we are observing a resetting of rates higher. we see fiscal spending being everywhere. this is an important reaction to the policy of the u.s.. that has still to play out. being underweight bonds is our conviction. on the equity side of things, we remain of the view that we are -- uncertainty is maxed out. never seen it before along with other policy levers, objectives are not clear.

all that together, that cannot last, not good for anyone. as we get more clarity, i think markets will be able to get on with whatever is the destination. jonathan: markets in the united states? what about markets elsewhere that have rallied into this decision? thinking of china, europe. jean: this has been the opposite. the rest of the world outperforming the u.s. on a six to 12-month horizon, we expect the u.s. to go back to the lead. all the european side, even though we are positive, we used to be underweight, we think this is a more narrow story. military spending, momentum for a few months, but we don't think this is a macro story that will carry europe for the next 12 months. lisa: if you put these two ideas together, the idea that we are seeing a structural repricing of

rates, expecting the u.s. to take the lead later this year, do you think overall equity returns will be constrained by this repricing of rates globally? jean: we don't think rates are coming down. we think the 10-year in the u.s. which has been railing is not the story that we will see going forward. they will be an adjustment. there are forces that will reassert themselves. we are still bullish on ai being a powerful source of drivers overturns. we think it's possible to withstand higher rates, moderate increase in rates. if we get a very significant adjustment in rates, which is not impossible given the policies put in place, that would channel equities. lisa: do you think the u.s. will be the main beneficiary from this ai megatrend you been talking about for a while?

you and your colleagues are starting to think about china as also being, maybe not as much of a beneficiary, but a significant one with the advancements we are seeing? jean: both are set to advance from the ai story, china and the u.s. a bit of a middle east story, as well, but not a global story. we think this is more powerful in the u.s. the u.s. eventually provides an environment that we are more comfortable with on the macro perspective. the ai story playing in both spaces. the macro backdrop is more positive in the u.s., which is why we've a the u.s. over china. annmarie: the uae saying they are going to invest more than $1 trillion in ai, but a lot of that is contingent on them getting access to the chips. is that the leverage that they hold? jean: that is part of it.

first of all, it is a story that is a high buyer entry, massive capex to be a player in that. it is possible for other countries with deep pockets to play a role, but i think the u.s. has the upper hand on that on the stage. annmarie: when you see news like that but then you also see banks coming out and raising the probability of recession, how do you weigh the two? jean: we have talked about the six to 12-month horizon with the view that eventually we get back to a better place, but for now the uncertainty is at a peak level. i don't think i've seen such a range of views on what may happen. the commentary on the outlook is as wide as i've ever seen. as a result, that is holding back people. we don't think a recession is in the cards, there is a lot of

resilience. in fact, i don't think recession is the biggest risk. the biggest risk is long-term decisions. if they are put on hold, we will see a lower structural growth rate in the u.s., and that is a bigger deal than recession. lisa: you talk about later this year we will get to a better place from a policy or certainty level. what does that mean when we talk about uncertainty being a feature, not a bug of this administration? jean: i will give you one example of the tariff. right now there is uncertainty about what will be the impact of that for the u.s., trading partners. you can argue that it will be minimal for the u.s. once the data comes in, the leverage of this bargaining chip will be waning. it will be harder to dismiss the damage from tariffs, just make bold statements about higher

tariffs. jonathan: is that the moment to buy bonds, when we see that, or is there another reason that you don't believe treasuries will play that role this time around? jean: we don't think inflation is resolved. the fed has painted the most optimistic scenario, included in their forecast on the tariffs. jonathan: you don't buy it. jean: people need to see. we have hopefully tax extensions coming in. this will make the deficit wider. saving is much more uncertain. the fiscal story is one of the visits. jonathan: when you open up the s&p, look at the forecast from the federal reserve, which one is aspirational, i don't buy it? jean: the most revealing part of the press conference last week was when asked about whether this is a one-off story,

inflation, the chairman was careful to say we are not sure. when he answered the question later about when they would get concerned about inflation, if we started to see inflation appear in parts of the economy that had nothing to do with tariffs. that definitely stood out for me. jonathan: do you not think it is a one-off? jean: it could be, it was last time, because it was targeted. i think there will be some adjustments. the cost of doing international production will be higher. it is not just a tax or tariff. jonathan: you have heard the argument, because anxiety is higher right now, people will not be able to ask for a raise, you will not see the second round effects of that spike in prices. what do you say to those people? jean: we have a very tight labor market.

the fed sees it as in balance. we have seen immigration play a massive role with the labor market coping with tightness. that is the big story going forward. i'm not sure the bargaining power for which negotiation will ship to that much. jonathan: ask for a pay raise. lisa: you are on a mission. jonathan: i don't like that psychology. not asking for a bowl of whatever. this is not oliver. jean boivin, thank you. please, can i have another? what was he asking for, back in the day? let's get you in else on stories elsewhere. with your bloomberg brief, here's yahaira jacquez. yahaira: donald trump yet to announce terrace are more targeted than indicated. he says the april 2 liberation

day tariff announcement will be more focused and could exclude some countries from widespread reciprocal terrace. 23andme is moving forward with bankruptcy proceedings in the u.s. to facilitate a sale. the dna testing company plans to continue operating during the process. 23andme was valued at $3.5 billion when it went public in 2021. now court documents show it has 270 $7 million in assets and over $214 million in liabilities. london's heathrow airport has defended its handling of friday's unprecedented shutdown, saying it would not have been able to operate on interrupted. the statement comes in response to comments, there was enough alternative power supplies to keep the airport running. jonathan: thank you very much. the morning calls, plus dana telsey of the telsey advisory

group on her outlook for retailers. that conversation is next. this is bloomberg. good morning. ♪

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jonathan: the opening bell, one hour, 13 minutes away. equity futures on the s&p up by more than 1%. on the nasdaq, up by 1.4. let's get some morning calls. goldman citing ai competition and margin pressures. super micro is down close to .5%. jeffries upgrading fedex to a buy. finally, morgan stanley initiating coverage on general

mills with an underweight rating, saying a stable backdrop but more secular headwinds. let's stick with the consumer. investors looking ahead to consumer confidence this week. dana telsey writing, frenetic is an apt word to describe the current environment. volatility in the stock market reflects the anxiety out there. good to see you as always. our people pulling back? do you see it in the channel checks? dana: we are. when you look at the earnings results coming out for retailers lately, the fourth quarter feels almost divorced from what you have in the first quarter and going forward. the guidance that companies are giving out for the first quarter, in essence, we always know the consumer area is a third and fourth quarter-weighted, but now the first quarter is expected to be weaker than consensus. so you need to accelerate even

more rapidly. the word frenetic, the reason i like it, i looked up the definition, anxiety inducing of activity in a wild and uncontrollable way. jonathan: consumption has been resilient for the last few years but beneath the headline numbers, it's been very bifurcated. low income consumers have been squeezed for years now. high income consumers have held up. is that still the case? dana: the higher income consumer has moderated spending a bit. you look at what delta airlines said a few years ago, the premium airline. you are still seeing the uber high do very well. hermes results in the double-digit increases. everywhere else, not as robust as it has been. consumers are discerning. cosco says they have seen a shift of people eating at home. we see more evidence of that behavior.

what do you need to win? new news, events, activation to drive interest. i was downtown at the opening of the new printemps department store. there was a wait around the block. there is interest in newness. lisa: do we have an idea of who is using this as an excuse? why not throw all of your problems out there, clear the decks, do what you want? dana: some of the companies who have been performing poorly, you can do that. certainly, you look at some of the lower end department stores that have had those issues. but many of the others are hoping they can see that sulfur. -- sellthrough. the ones that are leading, breadwinners, discounters. you see some weakness in the luxury brands that have not been as strong.

some of the european brands, doesn't have the same robust posture that they did before. we just got a new gucci designer, so we will see what happens. annmarie: who do you think will be caught in the crosshairs when it comes to tariffs? dana: areas impacted the most, footwear companies, some of the dollar stores. the speed at which you need to diversify, you can diversify to other areas, split the cost of manufacturing and raise the prices. but diversifying and raising the cost of pricing takes time. there is a reason companies went to china. it was fast and cost-effective. annmarie: when it comes to april 2, maybe it will be more selective than the broader scope, how are these companies preparing for that? they will not be able to move manufacturing in weeks. dana: they are including it in

the guidance. it includes the tariff implication to the point where they know how much the tariff is. anything else, they will need to reset again. in the early writings, you are right, it is not a lot of the apparel world, but it is other areas that raises the price for the consumer. lisa: we have heard reports about certain companies -- walmart in particular -- that have gone through chinese suppliers, cut your costs by 10%. they say, no thank you. much are you seeing this effort, until ultimately they have no choice but to raise prices? dana: i am hearing it from the smaller and the bigger players. they are all looking at other areas to diversify manufacturing, not in the u.s. because of how expensive it is. going to south america, africa, other companies that are working

to do that. jonathan: macy's is down another 25% year to date today. do we need another luxury department store in new york city? you mentioned printemps. dana: location is different on wall street, but certainly when i was there, people were down the block. jonathan: i wonder if that lasts. dana: we will know in a month or so. the location is a bit odd forgetting visitors all year long. annmarie: how are they communicating that? printemps doesn't want to be known as a department store. dana: they want to be experiential. lisa: like a heron's -- harrod's. lisa: the reason why is the reason you ask the question, do

we need more department stores? people are thinking the same thing. macy's was not a pleasant experience because it did not really do it well. jonathan: downtown is a bit of a ghost town on the weekends. we have enough foot traffic for this? dana: it will take time for everyone to see it and go back on a repeat basis. annmarie: i am willing to go downtown to see it. dana: i agree, i will go back to check it out to see how they are differentiating themselves. you would think there are other locations like the barney's building, but that is much bigger, and you need an anchor to bring people up madison avenue. jonathan: i used to like it there. it is still empty, right? dana: madison and 61st. jonathan: we have to sort that out. dana telsey, thank you.

i was downtown, lots of people out having lunch. then you go to printemps around the corner, line around the block. annmarie: 25% of the brands that they are bringing in you cannot get in the u.s. i am very excited about this because finally got the access. that is the attraction. maybe the restaurants. lisa: the experience aspect is important. i think about that with my own younger cohort at home. they talk about the experience of going to certain places, why they are willing to go. it is interesting, i candy. jonathan: i couldn't care less about the experience. i want a friction-pre-transaction. dana: there is something for everyone. jonathan: i don't want to talk to people. annmarie: these shops must see you and ron. i'm the kind of person that you

see, offering champagne, i will try on another blazer. dana: i love the wow of seeing something new. jonathan: coming up, kathy bostjancic, troy gayeski. annmarie, how much before you buy anything? annmarie: but then you buy even more. lisa: then she takes out the plastic. let me tell you. jonathan: from new york city, good morning. ♪

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jonathan: the opening bell, 60 minutes away. equity futures posited by more than one percentage point on the s&p 500. nasdaq higher by 1.5. there is a reason why equities have bounced so hard this morning. reporting over the weekend from the team in washington, april 2, the much-anticipated liberation day, when the president said he would unveil some major reciprocal tariffs, we understand based on officials familiar, the effort might be more targeted. annmarie: liberation day light. maybe it is those dirty 15 countries, as scott bessent spoke about, how harsh are the measures going to be on those countries?

those are the questions we need to be asking into next week. jonathan: a snapshot of where the administration is right now, and things can change. things are fluid. always fluid in a trump administration, and they will continue to be especially when it comes to trade. joining us now is michael mckee, our economics and correspondent. you are speaking to raphael bostic later today. what else is in store this week? mike: nothing today. tomorrow, consumer confidence from the conference board. very interesting to see if they track what we have seen from the michigan numbers. a lot of disappointment among americans in terms of what is going on. and then get durable goods orders. thursday, we start off with seeing what the trade deficit

is doing, jobless claims we watch every week. friday, income, spending, pce inflation report, the one that the fed follows. we expect that to go up a little bit, something we can ask president bostic about today. then you get the final michigan sentiment numbers. we will see if that officials who are speaking this week will have any more clarity on what is going on. basically we have two a day, fed speakers including raphael bostic today. he will be joining me today at 1:45. we will be talking about things like, how do you know anything about which way the economy is going until april 2? jonathan: looking forward to getting more fed speak. when you go to last week, a lot of attention paid to an unmoved

median dot. you said, look at the distribution of dots. could you break that down for us once again, explain how much daylight there may be between some speakers on the fomc and what we heard from chairman powell in the news conference? mike: we had two for the december dot plot, two people above the ideal. in other words, fewer than two this year for the fed. now we have eight. we have leaning on the open market committee of not even getting to two rate cuts this year. a couple of them even say none. i guess you could call it a hawkish but it is more of a pessimistic view that the fed will not be able to cut rates more this year. it wouldn't take much to move them in that direction if inflation stays the way it has,

sticky the way it has. jonathan: looking forward to your conversation with the atlanta fed president raphael bostic. not a lot of people talked about that hawkish skew we saw in the dot plot last week. lisa: it was erased by jay powell's transitory word, the idea that they will be able to see if the tariff-induced inflation is just going to that particular area. if you look at the center of this committee, they see stagflation as an increasing likelihood, and that is a very difficult recipe for the fed to fight. jonathan: kathy best young chick -- kathy bostjancic writing, the fomc may shift its focus from inflation to slowing economic growth and potentially deliver a rate cut earlier in q3. welcome to the program. that is the number one question that so many people have. if the federal reserve has above

target inflation, are they in a position to respond to downside risk materializing in the economy? what gives you the confidence they can do that later this year? kathy: good morning, jon. i should highlight that our baseline forecast is they don't, that they wait until the fourth quarter and we have only one rate hike for the year. what i was illustrating, we continue to see downside risk building. you see the economic data. even if these tariffs are more targeted, not as negative for growth or inflation, you still have a lot of uncertainty out there, even after april 2. it will have a little clarity but still uncertainty. that is corrosive to economic growth. my concern is there a downside risk to the baseline, and maybe the fed needs to come in in the third quarter. they have to balance things. inflation versus growth.

chairman powell opened the genie bottle and said transitory. if they really do believe that, then they can shift to growth. they will look through the tariff impact. but tremendous uncertainty at this point. lisa: the market is baking in three rate cuts this year by the federal reserve. do you think that increases the risk of inflation picking back up in the scenario you laid out where inflation is sticky, and a lot of it can be attributed to tariffs? kathy: financial conditions over all are a bit volatile, a lot of it due to the equity markets. we also see corporate ground spreads -- bond spreads widen. even the bond market is pricing in more easing. i don't think overall financial conditions have eased that much. if you look at the 10-year

yield, it is quite volatile but still remains high, mortgage rates are high. i don't see easier credit flowing to the economy and really jazzing things up. if anything, it provides a buffer, but there are still a lot of headwinds hitting the consumer, businesses. lisa: raises the question of whether fate cuts will be effective and boosting growth. will they be the same put on asset prices that they have been traditionally? kathy: what the market really wants is that trump put. we don't seem to be getting it as much. again, there is good news that the tariffs announced on april 2 could be more targeted, sectoral tariffs maybe not on top of that. we have to be careful in thinking that the fed will just come to the rescue.

they could support growth, if needed, but so much is coming out of the white house, the economic policy changes are really swapping the fed affect. annmarie: is it too early for jay powell to call it transitory when we don't know how harsh these targeted tariffs will be, and we don't know the retaliation in those countries may take on the united states? kathy: like many people, i shuttered a little bit when i heard transitory, because we don't know. we could continue to get this gripping account of tariff announcements. that could mean the inflation impact glass longer, even if it is not as big, it could last long, and that could complicate things. i think it was a little premature.

there forecast is what it is, it shows a temporary increase in inflation and then growth slowing. putting that transitory stamp, i think that was premature. jonathan: i think people are confident because they believe the labor market is not as tight as it was, the potential for people going out and saying i want a bigger paycheck and the company following through, has somehow been dampened by the employment anxiety we have witnessed. we have some pushback from blackrock, 20 minutes ago on that point. he said you had to think about the lack of immigration we will see over the next several years. this labor market could be tighter than people think alongside that tariff effort, which would make us vulnerable to second-round effects. how do you think about the labor market dynamic? that is probably the most important one. kathy: it's a great point.

asking for a raise, employers have more power right now. but on the other hand, as you pointed out, less immigration means a tighter labor market. if you look at the household survey, they dissect foreign-born, domestic workers here. all the jobs that were treated network for foreign-born workers. we have people retiring who are baby boomers. we do need immigration to keep the labor market fluid. it could get tighter than we all think, especially in certain sectors. whether that transcends who the whole labor market, wage growth going up, maybe a different story, but where immigrants are prominent, agriculture, home working, there you could see some pressure. jonathan: appreciate your clarity.

kathy bostjancic shot nationwide. we came out of the pandemic and a lot of people got things wrong. going into this, you have to be really open-minded on what the consequences could be in the coming years. lisa: jean boivin's point is a will taken one. the u.s. will reassert itself. in the process, there is a supply demand dynamic that will allow people to keep asking for wages. it is unclear to assume that these companies will not be able to pass along price increases. companies have figured out that consumers are less price sensitive, less aware of what the prices of certain things should be. jonathan: so keep asking for that pay raise, the conclusion of our conversation. troy gayeski joins us now for more on the markets. use a buckle up. why? troy: we came into this year with an extremely low, 0%

probability for recession. we are going through a substantial rebalancing of the u.s. economy. the president and the u.s. treasury secretary are openly talking about recession risk, potentially correction. it just takes more time to rebalance from a consumption economy when there is so much more domestic fixed investment. humility is clearly a term that should be used now. that is why people embraced asset allocations, so they don't need to overreact when we go through these rough patches. jonathan: let's talk about the data first and then we can get to the market outcomes. sentiment surveys have been shaken up. a question about the inevitability of that bleeding into the hard data. how do you see the former informing the latter? does one means the other one breaks, or can we avoid that? troy: recession risk has gone

from basically nonexistent to may be 15, 20%, still a low probability. in times of uncertainty like this, it is best to go back to the hard data, look at the contributing factors to gdp. we know consumption will be lower. probably slightly lower still from the soft data. when you look at the hard data and think about business investment in particular, you see the atlanta fed q1 gdp forecast, we are talking about 8% growth quarter over quarter. probably between 55 and 75 basis points of additional business in the u.s. it's a very strong data point. the consumer is certainly weaker than two years ago, but the labor market is tight. initial claims are still incredibly low. continuing claims have still come up a bit but still low by

historical levels. altogether, it gets back to the fed's forecast about uncertainty. slightly lower growth with slightly more inflation. the fed will have to sit on their hands, may be cut by 25 or 50. not the end of the world, but certainly much more challenging for equities. lisa: that kind of picture, do you agree with jean boivin that yields will remain higher than where we are right now? given the fiscal borrowing over in germany and also the fact that in the u.s., we have both deficit concerns and inflation that will likely remain sticky? troy: if we were long a ton of duration, i would be nervous now. the reason is partially what you stated. we just went through a significant rebalancing, recalibration of recession risk. the 10-year only dropped to 4.3.

we know the fed will cut over the next several years, not dramatically, but enough to cause a re-steepening of the yield curve. there is more of a risk now to that part of the curve as the economy goes through this transition point. be ready for a yield curve steepen or. we will probably get more going forward. the offset to that is how much spending can be cut. that is still a very open question, as you know. the supply dynamic is still very problematic. over 70% of the treasuries issued will be issued over the next 10 years. treasury is playing with the maturity dates to keep pressure off the back end of the curve, but that is a lot of supply that needs to be absorbed. lisa: was it incorrect for this fed chair, or perhaps premature

to use the word transitory, when you expect the steepening of the yield curve as an implication of the more the fed cuts now, the stick your inflation will remain over the long-term? troy: i sort of cringe myself when i heard transitory again. there is so much uncertainty right now. stating that after april 2 you will have this clear picture, it is just not true. we are putting a first round, may be going after the dirty 15, as opposed to every trading partner we have. then you will have retaliations on tariffs. there is a lot to play out. when you think about asset allocation, why investors embrace alternatives, still owning fixed income despite the risk we have discussed, a lot of that gets back to, when you are going through periods of uncertainty, you want things that can perform.

by the way, it has gone through the last five years in the last 25 years. jonathan: thanks as always, troy gayeski. this is the debate of the moment. it is april 2 the peak of uncertainty or is this just a new wave of it? lisa: what does that mean for all of these investments to come together? m&a put on hold, it goes to capital investment also put on hold. frankly, it goes to hiring decisions, which has also been somewhat stagnant. is there going to be a resolution moment? annmarie: it will answer some questions but not all of them. what happens when it comes to the retaliatory effects? what happens with their response? also the sectoral tariffs, when are those going to come into play? jonathan: equity futures right

now on the s&p near session highs, up by 1.2%. with an update on stories elsewhere, here is your bloomberg brief with yahaira jacquez. yahaira: republicans returning to washington today will tackle their toughest issue yet, tackling the massive tax bill. it faces multiple challenges including the overall size of the deal, elements to include, and how to offset the costs it will incur. byd reported sales surpassing the $100 billion mark last year. in total, there revenue came in at $107 billion, beating analyst estimates and leapfrogging tesla, who reported $98 billion in revenue. the last time byd surpassed in revenue was back in 2018. united airlines is set to begin charging customers more to access its airport lounges.

individual united club memberships will now cost $750 or 94,000 reward miles per year. the move aims to combat a rise of overcrowding in lounges since the pandemic. jonathan: thank you. stop using them a long time ago. find a nice restaurant in the airport to get better service. my would you want to pay up for that? lisa: getting a jonathan ferro guide to life. annmarie: that is amateur hour. show up 15 minutes before you start boarding, then you avoid everything. jonathan: i cannot do that, i have too much anxiety. get to the airport two hours before. annmarie: you would hate traveling with me. jonathan: three hours sometimes for a longer haul. lisa: i love that we are getting the way to life with jonathan ferro.

jonathan: transactional, like the president. in and out. setting you up for the week ahead. lots of economic data and fed speak. live from new york, this is bloomberg. ♪

jonathan: the opening bell, 30 seven minutes away. equities near session highs, 1.2% on the s&p. nasdaq up by 1.5%. train very much in focus, economic data will be, too. pmi data at 1:45. mike mckee will be catching up with atlanta fed president raphael bostic.

tuesday, consumer confidence. thursday, a reading of gdp, jobless claims. friday, core pce, umich consumer sentiment which is now less important after last week? lisa: the surveys will color the information we get. any additional tea leaves we get from the white house that will dictate things. two temper this week's gains, today's gains, that nasdaq has outperformed the s&p 500 for a fifth straight week. jonathan: it has been tough for the nasdaq. later on today at 2:00, you'll hear from the president of the united states delivering remarks alongside the governor of louisiana. joining us now from washington, tyler kendall. what do you expect to hear later this afternoon? tyler: 2:00 eastern is when we expect those remarks with the louisiana governor. reporting that john day is expecting to announce an

investment announcement at the white house. local reports that the the company was looking to build a steel mill in louisiana, prompting speculation that the governor's visit could coincide with a potential announcement. we know automakers have been lobbying this president for carveouts when it comes to those tariffs. one of the prerequisites was to move production to this country. we should say that if those sector specific tariffs don't go into place on april 2, that would be a welcome development for the auto industry. jonathan: what is it like to travel with annmarie? tyler: my goodness. you have to be prepared with everything just in case we cut it a little too close. jonathan: thank you. lisa: exciting, living on the edge. jonathan: missing a flight and

being stuck in the airport longer than you wanted to. coming up tomorrow, cameron dawson, libby cantrill of pimco, krishna memani. this was "bloomberg sureveillance." ♪

>> kicking up the week with a little bit of optimism here. 30 minutes until the start of cash trading. i am matt miller. dani: bloomberg open interest starts right now. ♪ matt: kicking off the week with confidence. traders bet president trump reciprocal tariffs will be targeted on april 2 rather than sweeping. china steals itself or shot. ceos including tim cook and albert bourla are in beijing as chinese leader prepare for tariffs that exceed expectations. byd beats. the chinese electr ak