lisa?isa: honestly, it has been such a rough market, i keep going back to one guest before we went on air. she says this is getting a little nervous, today's trading action. matt, are we seeing catharsis today? matt: well, i don't know if it is catharsis but i do think it makes sense in the wake of an astoundingly strong cpi were on friday. this economy is going to require higher real yields to slow down. and to put some downward pressure on inflation. and that is exactly what we are seeing this morning with yields of across the board, real yields leading the moves higher. and the yield curve flatter. one of the key themes at morgan stanley has been the funding of the yield curve and we do think it will invert again as it did this morning and it will invert a level that we have not seen for decades. tom: matt, you are an outstanding student of behavior with your expertise on japan. michael wilson is maybe the strategist of the moment with a real cautious call on 2001 into this year. he look

lisa: from new york city, for our viewers worldwide, i am lisa abramowicz, in for jonathan ferro. "bloomberg real yield" starts right now. coming up, u.s. inflation accelerated to a fresh 40-year high, pushing consumer sentiment to a record low, inverting the curve, keeping pressure on chair powell. we begin with inflation in america. >> u.s. cpi index. >> the headline number came in hotter than expected. >> what i worry about is a lot of people embracing the idea. >> the risk really is that inflation becomes unhinged even further than we have seen. >> the reality here is that everybody knows inflation will not be transitory. >> in the face of 5%, 6%, 8% inflation, you still have a country of only 1%, so the country is well behind the curve. >> the fed has more work to do. >> we are clearly in a slowdown. >> we have made the turn on employment. >> there's lots of bad news. everybody knows with the bad news is. >> nothing from where they are going. >> the fed will be raising rates. lisa: joining us now to discuss, jim stevens and a guess from goldman sachs. jim, i want to start wit

lisa has an individual stock story. lisa: they are all down. today is a gloomy wednesday.ay is a new day when it comes to the relationship of oil to the deflationary backdrop. there has been a shift, the inflation that is going to potentially cause a recession, this will impede the demand for oil. you are seeing that with oil prices down, seeing declines across the board in some of the majors in the oil sphere. chevron, the tit-for-tat between president biden and -- president biden came back with, i didn't know you guys were sensitive. chevron shares down 3%, exxon mobil shares down about the same. given the crude space and occidental down 3%. i want to take a look at the winners and losers after yesterday's rally. tesla up more than 9% after elon musk talked about job cuts and gave more clarity on twitter. those shares falling 1.5% as people reassess because of this broad-based, risk off field. yesterday, they did not participate in the rally. netflix is suspected to announce another round of job cuts after beefing up during the pandemic, those shares down 1%. meta -- met

it's from lisa. oh, lisa -- what are they saying? i am looking at his comments about the likelihood of recession, a 50% likelihood for a global recession. also, how the inflation we are seeing is a threat to democracy, which needs to be countered more dramatically. he's confident that there will be something to combat this. he also talks about a banking union in europe, mergers, and the idea of consolidation to weather the storm. we are looking at a new landscaper you have a growing number o executives saying thatf there is a greater than 50% chance of a global recession. that is the feeling on the tape today. tom: for the american audience, and i met him in davos, the only equivalent i could think of in american banking is brian moynihan. he's steeped in the retail experience. and this headline is not temporary inflation. it's the theme of the next 90 days, isn't it? lisa: chris in savings has a leg up and that he took deutsche bank, when they expected it to be taken by another banking entity, and made it viable in a way that people

lisa h.: that is the problem. until the market can coalesce around when the risk rate belongs, how can we decide on a path for riskier assets? you need some stability in that rate forecast. i do not know how you want me to measure the volatility question. i think the answer is more volatility, continued volatility , until we get certainteed these inflation readings will trend downward. lisa: if someone were listening to this program they would've heard christian bitterly make the argument you do not want to be in cash. if you miss a couple days you miss 10% return. what is the argument against that in your quest for liquidity? lisa h.: it depends who you are managing money for and what asset class you are managing what your targets are. at the end of the day we manage fixed income portfolios and these are meant to be the ballast, the sleep at night portfolios. we have a different risk budget and target than christian does, but you cannot have all liquidity, which is why i suggested decent portion of your exposure

lisa: right.ey pointing to the international concerns as one of the financial stressors that we should look at it in addition to the social ones. tom: we will look forward into july and maybe july and august at food challenges. a look at corn, a bushel of corn is stable through the week in america. futures are up 29. stay with us. this is bloomberg. ♪ so many people are overweight now and asking themselves, "why can't i lose weight?" for most, the reason is insulin resistance, and they don't even know they have it. conventional starvation diets don't address insulin resistance. that's why they don't work. now, there's golo. golo helps with insulin resistance, getting rid of sugar cravings, helps control stress and emotional eating, and losing weight. go to golo.com and see how golo can change your life. that's mom:l-o.com. how was school? dad: wow! ♪ vo: music can help you express how you're feeling. when you can't find the language, find the lyrics. >> how do you actually get inflation under cont

lisa: i love it.ot of tones in the notes is what has been priced in already and how much i we priced in a recession in deeper stocks and how much have stocks been bid up so much, so high that that is a no go? i am looking at people pricing in scenarios that are gloomy and doomy. at what point do we realize we are going to a nadir in terms of sentiment? you just have to wonder, how much gloom can people take before people step back and say what has been thrown out with the bathwater? tom: really well said. this is the heart of the matter into june and july. mike wilson over at morgan stanley, the recession draw down is already 60% of the gloom. kailey: he said that his father to go. 3000 is the level he is looking at on the s&p 500. you also happy to oppenheimer saying the market -- you also have peter drop in hammer say it is vulnerable to further deterioration. mark jp morgan says too much recession risk has been priced in. there is a wide divergence on the outlook. i wonder how much is going to come

tom: lisa, help me here. lisa: don't be a drag.ughter] tom: what in god's name is a crypto ecosystem beside a made up marketing phrase? lisa: you can call it whatever you want but people bought into it. with coinbase it is not just the average joe or retail investors that bought into it, it was institutional investors and individuals on wall street who wanted to leave wall street to go to the crypto universe, the ecosystem of crypto magic. a lot those people actually saw their jobs revoked at coinbase recently. the left goldman sachs, they left blackrock, and then had a notice that said, we don't have a job for you. how much were the tea leaves saying things work rapidly shifting? tom: there is a small new york city toothpaste company called colgate. do you think they sit around the desk talking about the colgate ecosystem? lisa: i am not sure how to respond. [laughter] but they are ecosystems. kailey: it is an emerging ecosystem. that is abundantly clear and you see these projects that people had hope in devolving. lisa: you want

lisa: no. tom: ok. [laughter] lisa: see if he writes in sterling.2 to do -- up by tupper lake, exxon has moved from 27 billion to a modeled 88 billion. i think they are making money, mr. biden mentioned them this weekend. kailey: that they are making more money than god. this is something he has repeatedly come back to. the energy companies are the ones responsible for higher prices at the pump, he says they are prioritizing profit over the american people. he is looking for someone else to blame other than his own administrations school policies, which is why they are trying to point the -- point at the federal reserve. tom: lisa, are you filling up? or are you doing the top thing, you spend $22, spend more, spend another $22. lisa: we ended up trying to empty the tank to see how much it would cost to philip the whole thing, -- fill up all thing. it was great. we had the kids in the car, it was fabulous. tom: she got the matt miller gallon. i think she is out $250. we are watching the markets this morning, and the underlying economics of them. futu

i'm alongside tom keene and lisa ran bridge -- lisa abramowicz. i am jonathan ferro. tom: summer, september 2 is the biggest report of the year. jonathan: then we get to the fed meeting in the big debate about whether we get a pause. we have had pushback. tom: are we going to be at neutrality as we end the summer? julia coronado, i thought, was brilliant. to be get into destruction mode in the autumn months as we try to figure out were neutral is? jonathan: we have had a lot of complaints this year. -- this week. tesla, elon musk. a warning internally saying he has a super bad feeling. lisa: i've had that song in my head," i have got a feeling." what does this actually mean? can we take him at his word? 10% of his staff to cut is specific. is he looking at supply chain issues in china, demand issues? what is going on here to lead him to have this super bad feeling? jonathan: in the last hour, we did talk about companies failing to come out and talking about how bad things might be. we are certain to hear more and more from companies. we heard from microsoft yesterday,

lisa: i'm gloomy and neurotic. jonathan: there's no me a call puffer lisa. bonded -- not a mere culpab -- mea cupla for lisa. tom: listen the last 10 years, up 16% per year in europe only 9.7% if you take up 10 best days in the last 10. jonathan: if anyone's wondering why we're in separate studios maybe you can work that out. i think you need a vacation. [laughter] nasdaq 100 up. good morning to you. yields with a lift as well put up another five basis points. 3.2 490. as we start to ease the quarantine restrictions in china. lisa about two years behind the rest of the world. lisa: whether this is some sort of relief from the zero covid policy remains to be seen. saying oil really the main driver of inflation. it's not entirely the main driver. the s&p, price index. we have seen it rising at a record pace. unbelievable to see a 20% increase in the price of a home. how much we see that cooling-off and how much that has consumer confidence. how much does this diverge. the survey which is shown a record to deterioration in how people are feeling. we haven't see

jonathan: lisa? lisa: we talk about data dependency.an we start stripping out certain data points and say they are irrelevant. thank you for that edification. jonathan: you want any more time? we can say it is relatively speaking less important than the numbers we get tomorrow. i will be diplomatic for once. out of opec, that meeting has started and they are looking at maybe increasing things by 600,000 barrels a day instead of the scheduled 430,000 according to delegates. they might decide on july output and on august hikes as well. some of the latest from delegates speaking to our team. that is the latest from opec. jonathan: what did francisco blanche jessee of bank of america? this is so important to keep going over at. you have an oil analyst saying it does not matter what opec does if they boost output by 400,000. ultimately this is about refining capacity and through summer the price at the pump for the consumer is going to be problematic. lisa: you had another oil analyst saying they are using the barrels they have, but that jus

lisa: lisa: he very well could be right.looks possible and likely as long as there is some cooperation with the international sphere. i just keep going back to what he is saying, that the bond market is rallying and have stocks priced in the slowdown necessary to justify some of the levels we are seeing in the yield market? tom: we will have to see. it will be an interesting day in foreign exchange. futures are up 26. dow futures up 2.01. good morning to jonathan ferro. he may be back on monday. this is bloomberg. ♪ ♪ >> the fed will be able to slow demand sufficiently. >> the fed is changing their policy narrative so quickly.

lisa: you know that i love gloom. the pop in the market is highlighting the fact that you could be looking in certain spots. yields up a little bit, priced down in bonds, but nothing extraordinary other than the foreign-exchange channel. tom: brent crude 116 gives us a little bit of a lift. greg anderson, steven gallo at bmo capital markets model out 138 yen and make clear it could go much weaker through 140 and even higher than that. speaking of great experience, megan horneman joins us now, director of portfolio strategy at verdence capital advisors. how have you reallocated? what is the nuance you have done in the last couple of days? megan: we are looking at areas of a market that you mentioned earlier had priced in that pessimism. we noted session's are rising, highly likely over the next 12 months, but what has the market priced in? when you look at the small and mid-cap space, developed international, these parts of the market have fallen in the u.s. between 30 and 40%. this is pricing and a lot of that pessimi

lisa: potentially. i think this has been the problem, the sell side analysts have stopped doing work, this is the era of array gift he -- reg fd. cannot say anything until the exact minute. tom: oh. lisa: that their lawyers say it. tom: i have been screaming about reg fd and the effect. it is tangible. they cannot talk until they are right there. lisa: they cannot talk until they are right there. the analysts have stopped going work, they just listen to the words coming out of the mouths of either corporate management or our federal reserve chairman. it is really awful. investors are smarter than that. our guess is, there is a large amount of earnings disappointment that has been priced in. we need to see those estimate cuts kick in so we can ascertain what is the real price earnings ratio of this market. right now, it is a bit artificial. tom: lisa shalett, morgan stanley. thank you. lisa wants to be like, what are you talking about? the answer is, reg fd changed the way the sell side communicates with

lisa: have we seen? seen a number of investors come on our show and say that we have reached peak yields and we are going to have this summit or perhaps they will get together and commit to fighting inflation. do you think we have reached the pivot point? >> i think we have reached a point where the risk around the current yields is much more symmetric. it has been a one-way train given that central banks were behind the curve when it came to fighting inflation. what that means is you are at a point where the risk to that are much more symmetric. i think it's early to say that we have already peaked. we might still see some upside surprises and inflation. if recession is not imminent, these things can still push higher from here. it's fair to say it's no longer the one-way train that it used to be. jonathan: just on china, perfect timing. we've had no inflation impulse from china for six months if not longer. his beijing suddenly starts pumping again out of necessity, that could be a different story. he

lisa: we definitely don't want to see pictures. we are very for happy -- we are very happy for him except don't tell us. tom: you are in aisle eight of whole foods looking at ginger ale going really? lisa: the reality that we are going to be hearing about it yet again on capitol hill with fed chair jay powell saying it's bad and we are going to find it and that seems to be the tone as things get a little bit darker at least in markets for economic projections. tom: it is a mess of a thursday out there. we've got jobless claims. we have to drop the nasdaq. it's a bear market trend, but it's a drop. lisa: i'm not watching that. i'm not giving a lot of credence to the draw up. i'm looking at oil. i think oil is the most fascinating metric on the board today. second day of declines at a time when people still see a shortage in the market. this is pricing in demand destruction and recession. is this the last shoe to fall? are we heading to an ed morse future? how does this factor into the expectations for recession. tom: let's partition

lisa: that is a great point.arly before we left, and it was definitely a bit of a scramble. it seems almost arbitrary where you end up having to test and where you don't have to test. how much what it actually open the window to more people coming in or reduce some of the frictions versus, remember when we used to talk about the comfort that consumers would feel knowing that everybody had tested negative? tom: we have to blow up the show. we have to completely blow up "bloomberg surveillance" this morning in our last three minutes. elon musk reiterates request to twitter for more information on spam. spam has done a really good job on twitter. they do better on instagram. but what is really important is plain spam does better than spam with pineapple. lisa: aside from your culinary preferences for spam, i'm looking at twitter shares that are dropping pretty significantly on this headline, down about 5% just ahead of the open, now down below $38 a share . basically, isn't this just telling us the deal is off in an

lisa: nice.ny time a move in the equity market is called "nice," just shows you how long it will last. jonathan: give the bulls something. it has been a tough year. tom: can we move on? we are going to move on here. out of the crisis there was analysis like chair yellen getting the analysis wrong in the last couple of days. the calling to inflationistas may be it wrong 10 years ago. mickey leavy, working with bank of america, now in barry berke markets. it is people who worry about inflation with all the heritage of alan meltzer and others, the shadow open market committee, and now you are amid high inflation. how do you interpret the ancient worry of inflation now that we are amid real, tangible inflation? >> you just feel it everywhere. the inflation was generated in a classical manner, excessive monetary and fiscal stimulus generating too much demand. at the same time, supply constraints. you feel it. it is an inflation tax. you feel it imposing itself on real purchasing power. the question is

lisa: thanks. jonathan: this is bloomberg. ♪ ritika: keeping you up-to-date with news from around the world, the chinese prime minister traveling outside of china for the first time in 100 days. this is part of the sweeping security abating in 2020. he is marking the 20th anniversary of jenny's will in the former french colony. reacting to the nato decision to admit finland and sweden, they're welcome to join. the russian president said nato and nordic nations are different compared to allowing ukraine to join. pugin also says if nato faces -- put in also designate of faces best, russia will have to respond. they must choose between former president trump and the constitution, they cannot be loyal to both. cheney called him a threat they've never seen before, she is vice chair of the committee investigating the attack on the capital. increasing the package, part of a deal with senator joe manchin to get this passed. they're facing smaller tax hikes. suspected north korean hackers believed to be hin

jonathan: lisa: lisa: how much is this becoming the base case as the economy is not forcing the fed to be more aggressive? what happened off the back of that data yesterday? tom: 306 on the 30 year bond. 2.92%. 500 people used to park their cars on the yield. it was a great perkins in 1997 so we need great perks on bloomberg surveillance. i will wave us out. this is emotional. ritika: keeping you up-to-date with news around the world. the price of oil fell after a report that saudi arabia will pump more crude step they have indicated to western allies that they should russian output declines financially. opec coalition is meeting today day. president bynum is likely to visit saudi arabia this month as soaring gasoline rises are affecting him politically. he would meet with the countries affected ruler. -- effective ruler. president biden has blamed him for the murder of the washington post journalist. facebook is enjoying multibillion-dollar advertising. the chief operating officer is stepping down from advertising. she was supposed to rein in large-scale misinformation. russia says it

lisa: ok, look. understood.the trading argument, where you have to stick to your guns and have some strategy. the strategy changes when you talk about rates not being in a bond market, you are saying this has been the death of it, we have watched this cycle breakdown. now, you are having central banks telling us it is over, and they are not going to hold your hand. they do not have the ammunition to do that because inflation is their priority. how does that change the 60/40 mentality, the ideas of bonds, ballots, as a profit driver that helps you sleep at night when you have lost more than 12% in benchmark bonds? barry: i will give you a specific question based on what we did. earlier this year, we looked at the risk assessment of various treasuries. anybody who is long treasury inflation protected securities, those bonds are doing fine. when we looked at what we were getting paid for taking the risk of duration, the yield is the same in the beginning of the year for seven and 10 year bonds as they were for thre

lisa: [laughter] wow.athan: i am hoping one day they take a listen and replace the switcher. -- the sweatshirt. i think in the moment, a lot of people try to take a macro signal from one retailer. it is so much more complex than just that. if there is a change in the strength to the consumer or a change in the basket? a bit of both at the moment. a change in the basket. which is why i keep bringing up the airline sumer. the healthy american consumer, it is pretty decent now. you asked a retailer, different story. tom: what we are trying to do, we don't want to go into general -- we want to go into -- to bring in these challenges quickly. jonathan: what happens to the stock? lisa: how can you get confidence? twice in three weeks, downward of projections forecast. jonathan: really hard. the market was three weeks ago when target first came out with --. it doesn't cost as much as a sweatshirt. this is bloomberg. ♪ jonathan: live from new york city this morning. good morning to you on tv and radio. this is blo

lisa: there you go.r way, the point of the story this morning is that the narrative for commodities, for oil in particular, has shifted from supply-side, supply been constrained, now to real concerns about the demand picture and whether that destruction that you see is going to kick in in a meaningful way. tom: we are going to do this on oil later. we will be joined by an exquisite guest on the macroeconomic supply and demand of hydrocarbons. lisa: it's important to understand why we are seeing weakness right now and if it's just a pause or something akin to what we hear from citi. tom: if you're in helsinki, you look across the pond, to estonia, down to latvia, and a very much larger lithuania, and the conference of world war ii that give a hunk of land to russia. it is surrounded, and i mean surrounded, by poland and lithuania. maria tadeo with the president of lithuania in this hour. ♪ ♪ tom: "bloomberg surveillance." good morning, everyone. we are waiting on a conversation with our maria tadeo, the p

lisa: exactly.signal to meet is that the fed is watching carefully what has been developing in markets and they want to weigh in, but they are in their quiet period and they can't. when you do not have the fed's representatives owning up a storm, how do they get the message out they are shifting and they're going to move in an aggressive way? tom: but are we talking about 75 basis points tomorrow? lisa: that is a 50-50 chance. you love the parlor game. do you want to play? let's play. citigroup moments ago saying 75 basis point rate hike is likely but 50 is more likely. at what time do they have to just do it? tom: i will go with that. first of all, they are doing it right now. they have the path underway and there are different arguments either way. kailey, i look at this, and we don't have to talk about bitcoin right now, but we can talk about the parlor game and the likely 75 basis points tomorrow. to me it is silly. kailey: but you have a string of economists on the street lining up behind 75 to

lisa: i find it weird. especially after him saying if you don't want to work in the office don't come in. is this his way of getting attrition? is this his way of getting attrition -- remains to be seen. jon: resilience. you mentioned microsoft. pre-announcing, what did the stock to, finished positive. brainerd pushing back against the fed pause, positive. two weeks of gains facing down a lot of bad stuff but still doing ok. tom: a week ago, totally agree. was brilliant on my property at 9:00 a.m. laughing in the face of the market down 2% on microsoft. he said they are killing it. jon: we will talk about payrolls in a moment. we will get to your payrolls report as we look ahead. a preview for a couple of hours time. the nasdaq down .5%. we are up on the week for second week of gains. yields are higher on the week on the session up by a basis point. lisa: i think the stability we are seeing in yields has been one of the underpinnings of this resilience. the feeling that either way weakness will cause the fe

lisa: shocking numbers. weaker, we are getting a little bit of a reaction in markets if you want to -- the cfa talk i learned from you, tom. we are looking at a little bit of a retracement of the gains from earlier, the nasdaq, futures up .6 percent. s&p up .4%. the two-year getting a bid under 3%. how much are these numbers going to reflect the true softening we are seeing in markets with job openings being taken off the market, and things people say are the stealth softening of the u.s. labor market? tom: how important do you as a five-year look forward for five years out, the 510 inflation expect patients at the university of michigan tomorrow? michael: it is going to be very important. because it will inform their expectations, that is what drives the fed. that is why we went to 75. tom: citibank with an important call for a much higher rate and terminal value, all the other mathematical mumbo-jumbo. 10:00 a.m. tomorrow morning, i think we all agree, inflation expectations are important. they have spiked

lisa: you hike into weakness. we have been talking about this as a theme, the ecb facing the same reality. my issue is what happens if they come out more dovish that people are expecting? what if they confirm only a 25 basis point rate hike at the july meeting and the expectations, they're not going to go to 50 basis points, we see a sigh of relief or longer and yields in the region climbing more dramatically because inflation will get away from them? jonathan:, and without getting too technical, how do they manage the periphery? what is the balance sheet strategy to make sure yields search as they start the rate hike cycle? lisa: and what is the political revocation of specifying, if they're going to support the italian bond market, rest of the dutch peripheral market when they want to support weaker members economically at the same time that they have to move away from low rates? tom: brent crude entered a peak, 124 40. we went back and forth last night, i do not do the math on number of leaders to a gallon conv

lisa: but it is vegan, so it is all good.hould make clear, folks, tang is not a property of kellogg. romaine bostick with the clothes this afternoon, a report on how, will move forward. i have been screaming about this to lisa. she says, shut up. we love equities, bonds, stocks, but when price goes down in bonds, there is a thundering silence. winnie cisar has lived this at creditsights. i am done 16%, 21% annualized. is that a bond bear market? winnie: certainly feels like it to a lot of investors but we are also seeing a pretty attractive reset in yields which is getting attention back into the market where we have investment-grade yield now above where they were during the peak covid volatility in march of 2020. that income generation policy is feeling better now despite those terrible numbers this year. lisa: which is why i'm not surprised you are seeing some anymore inquiries from investors. what are the questions in terms of the parameters of risk, stress case in these risks? winnie: what does that recession look like?

lisa: predictable. also curious to me, because it raises the threshold for them to pivot, and they will have to. did you see the positioning overnight? the highest level since 2013. they were trying to say stop it, this is not going to work. jonathan: how many jjb's are they willing to own? most people assume they will nationalize the bond market. most people i speak to say it is not much of a market anyway and it has already been nationalized. central bond market in japan and seemingly no willingness to turn away from that anytime soon. italy on that front as well. coming up, and the next hour, victoria fernandez. we will catch up with her around 7:00 a.m. eastern time. this is bloomberg. ♪ ritika: keeping you up-to-date with news from around the world, i'm ritika gupta. ukraine is one step looser to becoming a member of the european union. bloomberg has learned the european commission recommended it to candidate status with conditions they will have to meet on the rule of law, justice, and anticorrupt

tom: lisa has got the hummer h2. lisa: i'm operating on fumes.g like what matt miller has in the driveway which is four pieces of metal. do you see demand destruction out there yet where a gallon of gas is or is it above six dollars? matt: what we are seeing is consumers filling up with less gas more often. every time they go, instead of filling up the whole tank, maybe you put in half a tank hoping prices come down next time you need to go. tom: or maybe you just can't afford it. and matt, there is a thing this week, the charge card usage in america truly, without exaggeration, is a moonshot. matt: more people putting gas on credit. if you have a ford f1 50 raptor with a 36 gallon tank, you are going to need to do that. tom: lisa's take is only 32 gallons. she is like the bw rabbit. tom: a lot of conversation today. coming up, she wrote saudi ink. president biden and riyadh. we speak with ellen wald of the atlantic council. stay with us. ♪ ritika: keeping you up-to-date with news from around the world. ukraine must clench a new loan program. acc

lisa: no, you were the one who called it that. jonathan: very frustrated, lisa. just let me get to the bond market. it is a day of celebration for the queen. [laughter] lisa: i am going to quote you on that. jonathan: yields unchanged at 2.91%. lisa: a day of celebration. 8:30 am, opec+ meeting via videoconference. how long do they actually meet for? is there more of an indication from saudi arabia that they are planning to increase production to offset a decline from russia? how does this trickle out into gas prices? there has been this disconnect between crude and the refined good. in the u.s. we are seeing gas prices continue to climb to record highs. how much further doesn't have to go and how much can lower crude prices in the near term really change that dynamic all that much? eight: 30 a.m., u.s. initial jobless claims. how much does this follow want to this feeling of tightness we got yesterday with the jolts data, with the job openings data? two job openings nearly four every unemployed american. where are the workers? when are they going to come back? w

lisa: yeah, i will pick this up.t coming out after having shares plunged hermetically, trying to shore up investor support. increasing their dividend despite the fact that prophets have gone so much lower in terms of projection. tom: i can't say enough about that. use of cash is a quiet optimism of people pushing against recession gloom. one is katrina dudley, folio manager of franklin mutual series and we are thrilled she can join us today. this is precisely what you're talking about at the bottom of your research note. we will get to the government in a moment, but what you're talking about that is so important as we will adapt and avoid the big are -- r recession. katrina: i think you're right. when we look at a big recession, you need to look at the downturn in order to have the change or see the negative downturn that constitutes a big r recession. why it is a little r recession, look at the housing market. it will continue to support the economy. while we are getting a little more flexibility, there is not a lo

lisa: it was weaker.curious to see this inflation report, how much people decelerate spending in certain areas, or example, airline tickets. tom, that is a habit of yours. tom: they have come down a little bit, i look at new york, lax, it has come down. we will maybe get more data on that with this report and the weekend as well. at 8:30, michael mckee joins us with important -- an important view of the inflation report, then we speak to esteemed economists. red and green on the screen. this is bloomberg on bloomberg radio and bloomberg television. ♪ ritika: ukraine clenching new loan program, according to the country's finance chief, invading russian forces pushing its budget and national reserve. the financial minister tells bloomberg the key to these -- long-standing donor, talks about a eight package are underway. a possible visit by the president of china provides -- may provide more momentum. he may join a ceremony to swear in a new leader as well as celebrate 25 years of chinese rule, the enterpris

lisa: don't get ahead of me. yes.han: i am looking forward to reading that on the plane away from here. lisa: [laughter] jonathan: damian, thank you for jumping in the seat. >> lisa, you are here every day this week, not once do you ever try to speak in a british accent. just a little bit. jonathan: how much money are you getting paid for that? i gave you this to make a golf course, not come after me. damian: i would never do that. never. jonathan: get me away from these two. counting you down to the market opening. thank you. i think it should be the market omen, not the market opening. futures s&p, up .1%. from new york, this is bloomberg. ♪ ritika: president biden will convene world leaders from two dozen countries in a summit today. focused on repelling the fight against climate change. the virtual summit is on track to be the largest gathering of world leaders focused on climate action ahead of a united nations summit in egypt this summer. the war in ukraine is more evidence to accelerate the need for clean energ

lisa: what's your view on curling?now that you bring it up, there i was indavos with great food and right there in the lobby, they have the granite thing that was used in the winter. jonathan: i almost broke my hip. thanks for getting me out of trouble quickly. on microsoft, insider reporting estate they are slowing hiring across the company. that report follows the story of the last week that they are pulling back to the estimates on fx headwinds, something is building there. lisa: it's not just microsoft and amazon and not just specific areas like retail. it's broad based, the areas that benefited most during the pandemic step jonathan: the futures are down about a half of 1% step new york, this is bloomberg surveillance. ♪ so many people are overweight now and asking themselves, "why can't i lose weight?" for most, the reason is insulin resistance, and they don't even know they have it. conventional starvation diets don't address insulin resistance. that's why they don't work. now, there's golo. golo helps with insu

lisa, what did you say? lisa: we will see. i am looking at the key question. have we priced in the federal reserve? have we priced in how hawkish they will eventually be? this really underscores how much of that has been baked in and how much there can be destruction to market as they come to the realization that the fed is not going to back off. >> can you imagine how foreign that would sound to you? that somehow good news is bad news? lisa: we all see it when we go out. we fill our gas tanks and we see how much higher the gas prices are. is it good news for the upper class or is it good news for everyone? right now, it is not good news, so i think that would be relatable to many people. jonathan: yield the big ones at the treasury market. the inflation report just around the corner. looking very closely right now. up .5%. lisa: it comes after saudi arabia raised prices on shipments to asia. it is raising learns about how much back after the beginning of driving season with gas prices at a new record high of more than $4.85. how do we deal with this, given th

lisa: i'm looking at gamestop down more than 15%.s this matter to the overall averages or is this just noise on the periphery? >> i think every single stock is noise around the periphery. we can take a signal from what those stocks are doing. bnp paribas had a play on the frothy is names in the market. taking a poll of these stocks, not any one of them will move the needle. we focus in on them together. tom: did you say the cappuccino index? >> yes, the frothy is names in the market. tom: what are you going to do with a basic call for the equity markets away from a cappuccino index? is it about profit and free cash flow forward? >> i think the best single metric we can find for equity markets is earnings forecast revisions. whether it's upgrades or downgrades, what we've seen is the downgrades have been concentrated on the growth and. when you look at the nasdaq, it looks pretty poor and the s&p looks more reasonable. when you look at something more cyclical like the russell 2000, that looks over k so that's an gauge we look for. tha

lisa: is this the beginning? this is what people were talking about yesterday and a lack of understanding from the notes on wall street as to what was happening was it a lack of buyers were forced selling? when do we see something break? tom: the night uva beat duke, where did this language come from, it's on ladylike to call this cathartic. it's called a bear market. kailey: it is and that begs the question of now that we fallen into a bear market, have we not yet seen what you actually need? futures were higher but they are well off session highs. it was not much of a convincing rally this morning. tom: we will get to that in a moment but lisa, i want to frame out the tea leaves i see now. there was an ugly last 12 hours. moments ago, pound sterling broke down into a new weakness of 120 -- $1.21. i would also point out that maybe what matters is that two year yield. lisa: it's coming off the highs we saw yesterday since 2007, real yields is what i am watching on the 10 year versus the highest levels going back

lisa: why are u.s. companies going to have a harder time passing along the cost to consumer then in the developing world given the fact that there is that strength the consumer? >> if you look at earnings so far, yes, we have been of the view that growth expectation is rosy needs to come down but companies have demonstrated a reasonable billeting in the u.s. to pass through some of the costs and demonstrating pricing power. looking forward, cpi is high with an eight handle and ppi is even higher in parts of the developed world. the margin story will play out that will impact the pricing power and the profit outlook going forward. companies are trying what they can but ultimately, it's a market cap story can we think it's going to be hard to do that on a sustained basis which is why we are cautious around the earnings outlook. jonathan: thank you. she reflected what we are hearing from target this morning step the stock is down by 7.3 percent. it's the middle of may on repeat. what surprises people is th

lisa: got to move.hey will eventually have to move away from this, they are buying record amounts. the yen is going the other way. people are betting against them. that is my speculation we are not calling it a market rate -- market. i am done. jonathan: good morning, romain. romaine: lots of economic data says, what people say on the ground. when you look at the premarket action in the u.s., the 100 biggest volume movers, all but two of them are in the red. a huge reversal coming off of yesterday's rally, it started to wobble as it not close to the close. people realized it is about those shaky economic conditions. the ceos of the companies they have been warning us about, apple shares down 2.6 percent this morning. everything in the tech space is lower, as is everything in the retail space. the ceos have been telling us consumer spending habits are shifting. the ceo of ford was speaking at a conference, talked about the idea of the new electric vehicle, it has basically been rendered on top of rising

lisa: this is the issue.uch pain needs to be meted out now to get to where futures are down the line in terms of where the price at the pump has to go to? kona: i think so. i think you are right. even at $120 per barrel, we did not necessarily see the demand required. you need continued price pain and to see more supply. lisa: can you just put a number on that? where do you start to see demand destruction? kona: we got that before it started coming off again, so that is the target you are looking at, really where we start seeing demand destruction kick in. tom: talk to me about the distance from tunisia to egypt right now. it is a sideshow to many of our viewers and listeners, but it seems to be a reality to the arab spring. how critical now are food prices along the southern mediterranean? kona: absolutely critical. they are hugely dependent on imports and always have supplies coming from ukraine and russia, the world's largest exporters of grain. the ukrainians are out of the picture. russia is trying to me

lisa, we have a lot to talk about in this bond market. lisa: yet, although stasis right now. people believing the fed is going to move just enough is basically the idea of a soft landing now becoming more on the page? how much is peak recession fears a little bit past us? jonathan: futures negative .25% on the s&p. on the conversation, i could run with that. that we have seen this mechanical peak. which is the point paul krugman was trying to make earlier. lisa: inflation, still the main problem facing the u.s. economy. janet yellen's words, not my. jonathan: no doubt. from new york, this is bloomberg. ♪ as a business owner, your bottom line is always top of mind. so start saving by switching to the mobile service designed for small business: comcast business mobile. flexible data plans mean you can get unlimited data or pay by the gig. all on the most reliable 5g network. with no line activation fees or term contracts... saving you up to $500 a year. and it's only available to comcast business internet customers. so boost your bottom line by switching today. comcast business

lisa: come on.athan: this is bloomberg. ♪ ritika: a new governor to lead the sixth central bank at the end of the year, marks 17 years of steering monetary policy. he will be succeeded by -- who heads the swedish financial supervisory authority. the news comes as he has made a momentous policy shift, the central bank is addressing a surge in inflation. -- expressed interest in acquisition of abn amro bank. bloomberg learned -- biggest bank has reached out for a meeting with the dutch governor to discuss. 18% on the news, negative interest rates way on results and executives waited for programs on a banking union in the block. airlines working hard to convince passengers it is safe to fly, but having a tough time to convince staffers to do the same. officials facing an unprecedented neighbor crunch resulting in long lines, delays and cancellation of hundreds of flights worldwide. the staff shortage is sure to be a topic of discussion at the national transport association meeting. global news 24 hours

lisa: that's really good.: i've been working on a chart which is the inflation-adjusted real wage in america. it really shows the challenge that chairman powell had with the collapse of the economy at the beginning. i'm going to cut him some slack. lisa: the transitory will go down. jonathan: i look forward to your book that your cutting them some slack. futures are down, this is bloomberg. ♪ this is xfinity rewards. our way of showing our appreciation. with rewards of all shapes and sizes. [ cheers ] are we actually going? yes!! and once in a lifetime moments. two tickets to nascar! yes! find rewards like these and so many more in the xfinity app. psst. girl. you can do better. ok. wow. i'm right here. and you can do better, too. at least with your big name wireless carrier. with xfinity mobile, you can get unlimited for $30 per month on the nation's most reliable 5g network. they can even save you hundreds a year on your wireless bill, over t-mobile, at&t and verizon. wow. i can do better. yes, you can. i ca

lisa: good morning. thank you for being with us. this is a huge moment we are leading up to in a half an hour. economically and politically. tom: what i would note, markets on the move. we saw the adjustment yesterday of ecb, continued eager euro moments ago, -- weaker euro moments ago. lisa: the move is up in the short term with inflation, down when it comes to growth. how much does a strong -- growth concerns are going to be on the front burner the remainder of the year? tom: i think we will get there. deutsche bank showed the ambiguity that we see of a buy part report, we got top line emotional, 8% like inflation, maybe 9%. then, we've got this core number, a number of people, including goldman sachs, saying, you know what, maybe we get the first sign of ebbing co-inflation. that: plug city feeds into the mystery of american growth. lisa: that raises the issue of margin compression, how much of what we saw from target, other retailers, our outlier issues dealing with the composition of sales, versus an endemic issue? matt: the co

good morning, lisa.standing over here listening to you guys trying to figure out the road schedule. i will be happy to remain silent. i'm looking at the partition between services in the tech world versus hardware. services continues to be robust, demand is there despite concerns about supply chain disruptions. salesforce came out after the bill yesterday, increased their projected earnings. amazon and alphabet, they are also big web service, cloud service providers. those shares getting ahead of the market. amazon up a percent. you were talking earlier about tesla. i was also looking at tesla shares after elon musk said if you don't come to the main office 40 hours a week, find another job. those shares are down .6%. how much of an aberration is it for one of the representatives of the younger crowd, the more millennial crowd coming out and saying this? that was my take away from this. typically it is the younger set who are more amenable to staying and working from home. how much does this go against t

lisa: absolutely not.eams of lawyers our meeting right now to understand and a lot of lawyers are staying quiet. jonathan: the legal aspect of this is highly highly complex. tom: within the zeitgeist of disney, the leader of disney is in contract discussions with his board this week and maybe i saw this in variety but disney down in orlando was really the first test case of this on any numbers of these social measures. this is going to be front and center for the bloomberg world to this week. we are here right now. jonathan: building on the gains of last week. yields last week lower. today i by three basis points. crude positive .2% and euro-dollar big week ahead for central bankers. a whole range of them speaking. a panel hosted by francine lacqua in central portugal later this week. live from new york, this is bloomberg. ♪ mom: how was school? dad: wow! ♪ vo: music can help you express how you're feeling. when you can't find the language, find the lyrics. >> this fed is behaving much differently than we

lisa: this is the concern.re does employment have to go, where does employment -- unemployment have to go to get inflation down? larry summers warned early this inflation way for be much higher in fashion than people expected. he was right. his concerns are worth heeding. tom: i would love to talk to him now. president biden is doing his part jetting around the company on air force one to make fuel demand go up. 63,500 gallons of fuel to make air force one go. joe mathieu can do this math, joins us from washington. joe, not to be snarky, but it is snark monday. what is the president's plan this week to tame gasoline and inflation? joe: book a trip to saudi arabia. he was asked, i am not confirming, but i am going because of reasons other than energy. he is going to pop up there at some point. it says a lot about what we have been through the last year with regard to energy prices, to see the president going to a nation he called the pariah of the world, to try and unlock more supply. he is booking a trip to phi

lisa: that's a good point.er audience for these hearings, e justice department itself. they are building a case that isn't just rhetorical. they are laying out evidence for the justice department. there are committee members and mocrats also in the house who say there are criminal charges they think should be put forth by the justice department after this. it's their decision, but it's clear they are trying to build a case and hand that off to the justice department. john: jeff, lisa, thank you very much. lisa will be back at her post on capitol hill tomorrow starting at 10:00 eastern time for live coverage of the second day of the january 6th hearings. judy woodruff will be leading the "newshour" team on your pbs station. check local listings, or visit our website or youtube page starting at 9:45 eastern. that's "pbs news weekend" for tonight. i'm john yang. join us online and again here tomorrow evening on the "pbs newshour." for all of us at pbs news weekend, thanks for spending part of your sunday with us.