>> this is it -- is not an environment where the momentum takes on a life of its own. >> there has only been 5-10 names holding up the market leading to this rally. >> the challenge with long invariable lakes is that they are long and variable. >> this is bloomberg surveillance with tom keene, jonathan ferro, and lisa abramovitz. jon: life in new york city this morning. good morning. this is bloomberg surveillance.

i am jonathan ferro and your equity market on the sb 500 slightly softer and you go through the research, morgan stanley still bearish. one person saying the bond market appropriately priced for the world they were anticipating. tom: some of the highlights of that through the data are very valuable. everyone is asleep this more -- morning on the markets and i will go right to the two 10 spread. 83 interest points. jon: exports from china, the latest data. the first up here for what, three months? lisa: a lot of people are looking for some sort of recovery and we keep getting information that it is not

happening. whether -- it will be interesting whether china mass -- matters as much as a has in the past. jon: in matters if you are europe. someone from jp morgan talking about the diversions between any fracturing and services and indicating, if we get services -- tom: that is in the zeitgeist, the idea we will see services slow down. all of that to me and you mentioned the research notes, there is a midyear reset going on and my favorite note so far, kaiser and citigroup. he was good about -- this is the fact, in america, we are willing to pay a stupid premium for growth. we will take -- pay whatever it takes for growth. what will change that? jon: american exceptionalism

back in the equity market. we have to squeeze in some golf. --gulf. you have -- tom: i fell apart with the pga. the players' headrest blank -- spending but one person was really good. the pga is broke. [laughter] what this is really about is that they are not major league baseball or not the nhl with the huge canadian deal. through one reporting is the reality, the pga is broke and they did not have a choice but to affect not a merger but some form of saudi arabia investment into american golf. jon: the canadian open, sponsored by -- we could have some comments of

that through the weekend and this morning potentially. let's start with the price action on the s&p 500. equity futures down a touch by 0.1%. the 10 year, 3.6736. 1.07 on the euro dollar. lisa: as been fluttering -- it has been fluctuating between 1.065 and 1.07. the china data showed a big disappointment in experts. -- exports. do you have a surprise for the trade deficit in the u.s. isn't as great because of these dynamics? tom: this is not a normal trade data point today. lisa: because of this dynamic to understand how much decoupling is potentially happening. a bloomberg conference is happening in new york. don fitzpatrick of soros as well

as ray dalio of bridgewater and brian moynihan up nick of america, a host of speakers to set the stage. tom: it sets the stage to me talking to someone tomorrow. lisa: it is always setting the stage for tom keene. today is the bank of america tech conference. two people will be speaking. it is nvidia's world? romaine: it is not --jon: it is not, it is tk's world. lisa: you brought it on yourself. jon: been, you have heard the gloom and the doom on the equity market, the bears aren't changing their minds with the people who are constructive on the equity market want to leave tech behind and rotate to

sickles, are you pushing back at both those themes? >> definitely. right now, both are going up. especially the increase in earnings forecast. it is shocking for the bears. it is a reflection of this resilience that we are seeing in be economy -- the economy. that is the story so far. i think that growth will slow from here. tech, defenses will continue to be the place to be and i would not be two attracted by the siren calls of deregulated small caps or cyclicals or commodities so this tech exceptionalism has further to go and it makes sense to me. tom: let's go off your great call at the end of 2018, you get a leg up and we have had a leg up since october into april

market with you -- that you mailed. what is the second effort? how do we drive higher after the easier leg up call? ben: we are a little bit in no man's land and we are looking for the economy to slow a little bit and that is inevitable given the 5% rates and what has been going on in the banking sector. the question is how big. i think that will drag inflation down with it and that will hasten interest rate cuts. it is the first fed cut which i fully inspect to see by the end of the year and i think that is the catalyst for the market and that will come with a fairly shallow macro slowdown which will pull earnings down with it. i think investors will look over that and i think this is an equity market full of defenses and tech that cares a lot more about inflation and interest rates than it does about economic growth. lisa: are you saying that equity

markets are more defensive than anything else especially if they are led by big tech, which you see as defensive and could rally even in the face of a fed rate cut which will have an on the heels of economic weakness? ben: the stock market right now, it is not the economy. it is very long duration. small caps is 15% of u.s. equities, that is the most second -- secular bid at u.s. equities. i think that is the key distinction, it is not immune but it is very defensive to a slowdown that is coming in slow down that i think will be fairly modest. i think the recession story is off the table. tom: one thing i find is a nuance is the belief in the health care sector of joining technology for game. what will be the catalyst for health care to but --do better? ben: health care has been

disappointing but it shows a lot of these tech characteristics, the defense of growth, the strong balance sheets, these big modes --motes. his hat -- it has not had the growth rate that tech has but it has seen growth. a lot of drugs coming to the market that have turbocharged eli lilly, pfizer. i think you can downplay or overlook the growth health care has ended has a lot of those other defensive growth characteristics, that have been awarded elsewhere in the market may be on a less than s&p 500 multiple. i think it stacks up as a decent place to be. jon: i want to finish all momentum. we have known each other a long time. sometimes when you see moves like this, you need to park your i q and sit there and chase the rally. how do you do that?

can you walk me through the process, when you see names up 150% and people come on programs like this saying things are stretched and the next week, we are up another 15%. how do you go about that and what kind of prices do you do to think about, -- don't be too smart about this and go with what is working? ben: i do think the biggest risk right now is not being in the market and every week, i see 10 billion being pulled out of u.s. equity funds. this is a massive pain trade. you need to be in the market, be diversified. don't chase that one stock wonder. the biggest risk is being out of the market into some massive pain trade for people. when sentiment is this bears, you don't need good news but less that news and that has been

the story all this year. jon: thank you. then later -- then later --ben laidler. lisa: this is all driven on people thinking big tech would fall behind and it was anything but and now only are they out of stocks, they are out of tech names and if they are playing catch-up, they may be chasing something at the end of at least a boom if not the rally. jon: we have talked about this one million times. you overthink yourself into cash and you sit there and you cannot move. tom: the research on this, good morning vanderbilt. the research is clear as a bell that it is so much harder to go from cash back into a short position or a long position. lisa: although i will say you hear things like defensive growth. what does that mean? when we talk about growth

defenses, what is it mean to have risk versus safety if you have the entire development of a new industry? tom: ai is way overrated. the apple -- virtual reality -- did you get one? jon: i can see you in that headset. [laughter] tom: i don't get it. jon: hardly anyone wore the headset. tom: what i notice is they released a new macbook pro. it seems reasonably priced and has no headlines and that is where the unit growth is coming from. jon: i hate it, some of the reviews of this thing. tom: surveillance on tv. jon: what you will click on based on the movement in your pupils. tom: if they see my eyes coming, will they see my glasses? jon: i am not sure how it works tom. the camera is not pick you up. [laughter]

there is a commercial for apple. live from new york city, good morning to all. equity market futures just a little softer. lisa: we have to get a pair of those of -- for tom keene. i am lisa matteo. former vice president mike pence has announced he is challenging his former boss donald trump for the 2024 republican presidential nomination. in a video released today, he said " different times call for different leadership." he joins a crowded gop roster. ukraine is rushing to evacuate people from flooded areas after that explosion at a major dam in the southern part of the country. the blast flooded villages and inundating buildings and threatening surprise -- supplies. kyiv has blamed russia. in canada, more than 100

wildfires continue to burn out of control. thousands of people in quebec have already fled their homes and more evacuations expected. the effects are being felt as far away as 500 miles. according to swiss air quality, new york was the most polluted major city in the road tuesday night as smoke from the canadian wildfires blanketed the city in his --haze. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am lisa matteo in this is bloomberg -- i am lisa matteo and this is bloomberg. ♪ it can happen to the people who teach us

and rescue us, the people on our team and in our family. it can happen to the people who serve us and the people who served. the people we work late with and stay out late with. it can even happen to the person in the mirror. opioid use disorder is a disease that can happen to any of us. it's possible recovery can happen to any of us, too.

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that not only are they devoid of character, but they don't care. you will have no doubt in your mind's who i am and what i stand for and whether i deserve it. i intend to seek the republican nomination for president of the united states in 2024 and i want your support. jon: that was the former governor chris christie announcing his bid for presidency. the field getting bigger and bigger for republicans. the former president leading the way. tom: i looked at 538. christie is not listing in the polling and pence is listed and this is the 530 release. here's a partial score, trump 54%, ron desantis 24% and the gentleman from indiana, 5%. haley, 5%. i don't know where christie fits

into that pole. jon: that first debate will be bossed --box office. a lot can change between now and then and that first debate. tom: there is a mystery to it. the length of time to get to the election and the primary season is there. there is a changeable mystery to it other than the fact that the former president demonstrably leads the way. jon: if you just tuning in, welcome to the program. the running is stalling. they get stalling -- futures just about negative. yields up a couple basis point and the 10-year 3.6775. disappointing data out of china and it was all about export data and the exports following a little more than anticipated and the euro doing ok. holding onto 1.07 against the

u.s. dollar. tom: remember when -- we were almost there. we will get to turkish food down the road. it has been ugly here for a couple challenged economies. we have someone hugely popular with all of you. wendy schiller of brown university, director of the taubman center of american politics. give me history here on how people of low polling, either party, can advance towards primaries. if i see from 538, 50 4% desantis -- 54%, and dissent is less than half of that, are there any history of single-digiting people doing any better? >> no. we were talking about george herbert walker birch --bush, and

we talked about the big mo. he ended up getting the nomination. the difference for donald trump in august is that everybody on the stage will be attacking him in a subtle way but he will use -- but they will use him as the target. that is a new position for him. he emerged as a star but everyone else is trying to make their own case and now they have to attack him subtly, not to anchor his supporters and making a case for themselves. that is a problem for the debate for everyone challenging trump. howdy do that well -- how do you do that well? tom: you have a definitive textbook which is rated -- great civics 101. i said you needed to rename the textbook follow the money. are all these people running

because of a financial advantage in running? wendy: that has become a new cottage industry with the advent of social media and making a will -- a reputation without mainstream media, you have a way of getting speaking gigs. it changes everything but i think you need the biggest money donors to make it through the primary season. you want to -- if you want to challenge trump, chris christie, where will he get the money? for they back him. for they back mike pence -- will date back mike pence? -- will they back mike pence? where are those big money donors going to line up? they have been announced for trump but they aren't lining up -- there is so little movement towards ron desantis but they back off with the disastrous announcement of his campaign. where will they go? that will make a difference

between now and august. lisa: one other signal that will be important is whether there will be unification among republicans on key issues. how much of it is a unified view -- from the traditional globalization models? wendy: this is an amazingly important point because our -- there is no regional because -- and you need the big money to worry about regulation and free-trade and taxes and that is constant. they want stability and certainty. they don't want payoffs. it is not funny but trump presents a chaotic future. we don't know what he would do at any given moment but ron desantis has proven to be someone who may not be predictable and want to jump the stop -- jump the shark in terms of regulating business. his -- is he a reliable

investment? that is what i think investors are looking for. we saw mccarthy's that signal clearly to wall street. i will make sure the trains run on time and i will not crash the economy. lisa: one question i hear from analysts, if the rhetoric from both sides of the aisle is rewarded if it is inflammatory -- inflammatory towards china, how are we going to soften the tensions even as tony blinken heads over to beijing? wendy: the question is, how much knowledge and credibility do these republican candidates have for foreign policy? trump made china the enemy. and with covid, blaming china. how do you walk that back? he won't be able to do that, ron desantis had a asia trip trying to sell himself as someone who can notion -- can negotiate

himself on the road stage. mike pence has a calm demeanor. the rest of the candidates except nikki haley don't have much foreign policy experience. who do you really look to and say this person could get elected and we can do business with them? that is what -- where joe biden has been select measured with china. the secretary of state is attacking china but not attacking china and that will be calming as a signal to the business community. jon: there is one name we haven't mentioned, governor youngkin. there is a feeling that the words -- where's governor desantis does, the more governor youngkin thinks about making a run. wendy: i don't think he has the ability -- i don't know if he has the ability to jump to the stage with force or energy. he has a big platform.

we have lucky with his opposition but -- and virginia is a swing state. do you really nominate someone who cannot absolutely deliver their own state? ron desantis will deliver florida. al khor did not deliver tennessee. these are things moneyed people worry about. jon: it is wonderful to get your perspective. wendy schiller of brown university. usually with pollution, it is blamed china and it has been different over the last 24 hours. it is blame canada and the wildfires. tom: don't blame canada but yes. jon: not literally. tom: many wildfires in canada. this is from air matters. i use this map -- app when i am in china and manhattan is worse than deli.

shanghai always polluted, 80 in new york city expanding from a 45 level. washington dc is worse than new york city now but the forecast here is good. the forecast in deli is not good. jon: you can really see it -- feel it landing in jfk coming through the smoke. this orange tint to it. lisa: it would have been a good day and a sunny day and a clear day and it felt like the rain clouds are coming in but it was not raining. jon: ram on the equity market. bramo on the equity market. [applause] -- [no audio] -- [laughter] ♪

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jonathan: give me some love. do you feel unloved this morning? tom: i am surrounded by naples and ac milan. it was like an italian lovefest. lisa a: it feels a need to do some youtube clip funding. jonathan: do you feel neglected? tom: no. i had two days off. my vacation is this job. i feel like i am on the pga. i haven't taken a vacation in a long time. jonathan: here's your equity on

the s&p five market -- futures market. the nasdaq is going nowhere. it has been going somewhere. since early may when the fed last met, the equity markets and the nasdaq 100 is up around 12%. in 12% move even with this in the bond market. when the fed last met, may third, at the end of the day, we were at 3.80. we have added 70 friend of curve and the equity market is doing nicely. tom: ellen zentner did a review a couple days go from morgan stanley. here is the midyear review. down up 1%. nasa composite is up 27%. where was everybody? it was a lonely crowd. saying get on board. jonathan: we are back to the

secular growth stores were the economy says it does not matter because it will be bigger than the dawn of the internet, ai. the pain train with the a and i. lisa a: is the pain trade at rail? is it getting people out of their positions -- bearish positions or does it have legs? tom: the study here is what is the level of gloom out there? the answer, i believe correct me if i am wrong, is pretty gloomy. there are a lot of people betting against this move. lisa a: how much do you see people saying they are gloomy and the economy will roll over but when you ask about positioning, they say you'd -- you find offensive growth. are these stocks that have good solid income which is big tech? jonathan: we want to go up in quality. in quality is what you hear from

every cross asset strategists on this program. tom: it is asking about the markets. we had this jon ferro's leadership yesterday. a modest effort out at pimco. we are going to dovetail into a conversation with alberto gallo. john, i want you to bring him in on the detailed discussion on and off at pimco about the moderates and and the long end. about the term premium, bring that into the sock about price down. jonathan: you have to start with the inflation target of the federal reserve which is 2%. you have to make it cool on what they will tolerate. pimco believes they will tolerate to point something percent. they think they will return to 2%. something maybe even approaching three.

there is a cool on the long end that you start to price in this long term premium around the inflation story and end up with a steeper curve. this is the quote from the likes of -- the call from the likes of pimco and i think you are thinking of a similar bank. >> we had 500 basis points of hikes and the job market is solid. or is something makers are not doing and that's the long end of curves. if you think of a large company in u.s., you can find a 6% spread and invest in t-bills. same for homeowners. 98% of homeowners have a mortgage issued at lower rates. if you just hike even to 6%, that is not really tightening. you are doing half your job as the federal reserve. what you need to do is make sure the long end funding costs also go up. that is how you tighten

financial conditions and so far that has not gone up. central bankers are serious about what they are doing, there needs to be some seriousness in the finer point of the curve and that will hold -- will hurt financial conditions but that has not happened yet. jonathan: do you think they need to rethink qt? the kind of maturities they let roll off, may need to resell them? >> suppose you let hikes get close to high 5% or maybe 6%, then inflation remains above 2%. what do you do with qt? need to start thinking about qt. you cannot just hide the short-term rates. you need to think about targets on that. briefly about this at the end of may, they talked about this. or is a lot of sensitivity there. there is a lot of banks but also non-bank financial institutions.

we need prices to calm down. we are not going to have a recession here but we are in a surprise recession. china potentially is not investable so everyone will have fewer assets in the u.s. like tech. surprise, it has a high duration so we do not like it in this ironman -- this environment. lisa a: do see this scenario you are talking about, there is a surprisingly hawkish federal reserve. wouldn't this be a huge support for the dollar especially in this recession period where people are consolidating their money? >> the market has gone up and a lot of currency is going up. what if we have a persistently hawkish central bank and the long end goes up, we are having a fixed at 14, credit express and cds are at record lows.

there are some pockets of value but you want to be, -- careful about the second half of the year where liquidity will contract, there is a lot of treasury should -- valuation. lisa a: how do you play a pain trade? >> it is important to sustain the trade. are some longs the are very interesting with double-digit yield. obviously rates are higher but you can get 10% plus yields in some durations of the markets. some are in europe. jonathan: double-digit yield where? >> we are talking about national champion banks in greece or italy. there are very few countries that are going into the investable universe from being less investable. greece is one of them, from high-yield to investment grade. jonathan: are you thinking about

the unique credits of this world? these big banks? is that what you have been doing? >> it is more popular now but in march and april, there was a big opportunity to buy smooth are keeping up. we are also having differentials around six months or longer in the credit cycle between europe and the u.s.. default will rise but they will have the floor in europe and will probably fight in the u.s. everyone has long, high-quality quality credit. it is the easy's call but spreads are changing on investment grade. they do not really pay you. you need to have some bills if you want and have some high-yield. lisa a: has there ever been a time when you finish positive on european trade? i ask this because you flagged the joke that when an alien gets

here for the first time, they destroyed a european bank. >> we had peaked bearishness in march and april. that is where i got excited. unfortunately, the window was very short. there is still value. we do think something else will break between now and year end. lisa a: how much does china factor into whether you are going to be willing to double down on europe? -- on e.m.? >> china has definitely been a drag on e.m.. in europe, the chinese foreign demand is weaker but domestic spending is really high. there is no government that has thought about austerity as far as i can remember. that is very supportive. tom: nice bond talk. how did natalie do it? how did naples and italy do so

well? >> naples is always a contrary and. it took 20 years since bardo now -- maradona. tom: what are the best practices in napoli. the loser tots can do? when was the last time the tops won? what is the best practice to where tottenham is better than good? >> i think they are investing where players are undervalued. it is definitely a team that has less spending capacity than others. jonathan: they have a history of picking up fantastic players with huge sums of money so it will be interesting to see whether they can hold onto those players. the owner of napoli, in the

family, they also own a city which is looking to get promoted this year. their family is having a great year. tom: it is exciting. i see all these changes. i like the greek investment great idea. the idea of tottenham having a new coach from glasgow, right? jonathan: from celtic. they need to spend money and do something about the squad. i get the feeling this will be a repeat of what we have seen before time and time again. alberto gallo of andromeda capital. we need to talk about golf, pga. i cannot believe some of these players took this moral stance against money from the saudi government, only to find themselves on the pga tour with the saudi government, without any notice given to them whatsoever. we are talking about players who

turned down hundreds of millions of dollars. i am going to be fascinated to see how this works out. tom: brazing kwame early captures the shock of this. greg norman who basically spearheaded this for lav and the saudi's was left in the dark. the theme i am getting after reading into this is simple. the pga tour is broke. that is the reality. jonathan: it is amazing how the deal came together over the memorial day weekend. meeting in london. tom: and venice. jonathan: the whole thing has just gone under the radar. is that a gondola or a kayak? [laughter] in a gondola.

how is your stability? tom: nothing without dramamine. jonathan: from new york city, equities unchanged. bloomberg.com -- this is bloomberg. lisa m: keeping you up-to-date with news from around the world. with the first word, i am lisa mateo. the latest economic outlook forecast a 2.7% expansion of world output this year and 2.9% in 2024, both below the average in the seven years before the pandemic. with the war in ukraine, the shocks of covid, and persistent inflation, major central banks are all weighing on the recovery. the cost of follow similar outlook from the world bank. antony blinken is said to be planning an official visit to china in the coming weeks for talks with officials, possibly including president xi jinping.

he had a trip planned in february but it was scrapped after washington found a chinese five long crossing the u.s.. citi's frazier visits china this week. citi says frazier met with the top financial regulator and deputy governor of china's central bank. her visit follow similar recent trips by american business titans including j.p. morgan chase ceo jamie dimon and tesla's elon musk. global news, 24 hours a day, on-air and on "bloomberg quicktake", powered by more than 2700 different journalists and analysts in over 120 countries. i am lisa mateo. this is bloomberg. ♪

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>> i think there's going to be volatility ahead. we think we are at a time for markets where there has been a

tremendous amount of tightening injected into the system. they are dealing with a period where we expect to see the economy slow. there is a surprise to the downside that will lead to ongoing volatility. expect the volatility to work its way into equity markets. jonathan: absolutely fantastic to catch up with the pemco cio dan iversen. does not often engaged with the media but when he does, you listen. what is amazing is about hearing the cold water over the equity market, we see this in the second outlook and it is something brought up with him yesterday. tom: about 12 years back, they had a massive house call about hoffman and bonds. i can guess the major prices, pemco nailed that better than anyone. jonathan: far more enthusiastic especially relative to the

equities enthusiastic miss. that will be the pitch for pemco the rest of the year. tom: we are going to talk about this later. i hope he is with us. it is going to be fascinating to talk about. the vix speaks volumes. jonathan: the fact it is so low and equities are so resilient. if you are just tuning in, equities are positive. equities on the s&p 500, just a touch of green. it was very calm this morning but away from the index, it has been amazing to see the market this year. the rip you have seen and the likes -- in the likes of nvidia, meta, amd, even amazon. tom: my summer is still on the back end of the pandemic, the

biting stimulus -- biting stimulus. there were horrific images we see from a war in ukraine. we are briefed by allete affixed. she has been exceptionally good about the continental europe you of this war. it is a war we forget our democrat -- we forget that. our dams supposed to be blown up? >> it constitutes a war crime to blow of a dam and use infrastructure in this way which is used as a means of warfare to change the situation on the ground and next the civilian population in an incredible way. it is something ukraine has warned against for months and months. tom: i assume there will be

where crime processes that go on for years and years. what does president biden do today given the preaching of this dam? >> the u.s. announced they are planning to declassify intelligence which will point to russia as the perpetrator of this dam collapse. allies of ukraine and the u.s. have come together in condemning this attack, basically siding with ukraine in this catastrophe. it is very clear the majority thinks this is something russia is behind. lisa a: is this a major escalation that will change the course of this war? >> it is an escalation in terms of how this infrastructure is used for warfare means. the most important part is what is the effect on you raines continents? what is this mean for the war?

this will have to have an effect. by russia time, it will slow ukraine down but does not come entirely unexpected for ukraine. it means they will probably have to shift the counter affect east instead of west but it is something they are planning and may have taken into account that russia can do this step and the dam may collapse. lisa a: investors and strategists waking up right now who work in money have moved on. i do not read that much about the ukraine war as a tail risk in any material way, at the same time you see potential escalations. how are you viewing the potential risks in time when a lot of people are hoping for solutions not seeing any on the hot horizon? >> it is very much a waiting period. waiting for how the war continues at this moment because

the tension has built up over the last months about what will happen. the next step is the ukrainian counteroffensive which will continue and is likely to offer some successes. then, this counteroffensive. the hope is this counteroffensive translates very terribly to enter a poetic level and get russia to the table on terms to some extent acceptable for ukraine. tom: not to make light of this, but can ukraine directly retaliate for the blowing up of this dam? >> ukraine cannot. this dam has been mined over the last year and has been under russian control is russia occupy this territory. what ukraine has done since russia started these unprecedented attacks on kyiv almost daily, ukraine has the send its own drones to moscow to

diverge and bring terror to the russian homeland but it does not have the means to respond on the scale that russia usually responds to what we might -- so what we might see is some further small incursions into russia and drones reaching russian cities. but certainly not something of this scope. jonathan: incredibly controversial over the last couple days. liana fix, or counsel on the war between russia and ukraine. later this morning, stand coming up later. we are going to take some of that around 9:20 time. what an investor legend. 30% returns over three decades in his fund. phenomenal performance for a long time. tom: he has never gotten the credit for this. i had the privilege of talking to mr. soros about this. hugh is much more healthy -- he was much more healthy then then

he is now. it was strategic and tactical training. he continues to do that. he has had some challenges along the way. he has been very good about his challenges. stan druck and miller, when he gets things wrong, he is first to say that was wrong. jonathan: what about the early 90's in soros when it was druck and miller -- druckenmiller that joined us? tom: for the bankers banker, remember the conversation we did in davos? he knew the teller names in cincinnati but moynihan had to pill up the pieces. we forget about how these people got to where they got including stan druckenmiller. jonathan:.com for starting later this morning. we will have full coverage for you over the next couple days.

ai. we don't want to do the global macro stuff and just sit on the fed income. ai is going to be featured in that. lisa: we are going to talk about specific names. where people are saying the fed is not, front, and focused the way it has been the past couple decades. what do investors who have their trading in macro do? i must do they go back to the single sector in ai type of enthusiasm? jonathan: they can identify trade they want to hold onto. tom: i was just thinking of the percentage of people who feel behind. jonathan: you think? it is growing as the year grows older. tom: can you imagine? you are 800 basis points behind the market. jonathan: and he talked to the team of bloomberg and said by the time you get to, you are

looking around -- andy talk to the team of bloomberg and said by the time you get to four, you are looking around. looking forward to that chat. some of the price action for you this morning. good morning. s&p 500, just about positive the last 80 minutes or so. really no drama at the moment on the benchmark of the s&p 500. the 10-year yield is a little bit of at 3.6852. no fed speak this week because we are in the quiet period. we have tons of t-bills coming to market. hundreds and hundreds of billions over the next several months. we can chat about that. from new york city this morning. your market looks like this. the equity market is slightly positive. we are hoping in new york that we see the sun today.

maybe we can even breathe, bramo. that would be nice. lisa a: hopefully it is not just a glowing ball of orange. ♪

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>> this is an environment where the momentum takes on a life of its own. >> it has been five to 10 holding up the -- names holding up the market and the rally. >> the challenge of long invariable legs as they are long invariable. >> i think the die is cast for the fed to not do anything at the upcoming meeting. announcer: this is "bloomberg surveillance" with tom keene,

jonathan ferro and lisa abramowicz. jonathan: good morning trevor audience worldwide. alongside tom keene and lisa abramowicz, i am jonathan ferro. painting the sky orange in new york the last 24 hours. positive on the s&p 500. going into the federal reserve one week from today. momentum is taking on a life of its own. >> the momentum is there. what matters is the app i use, particularly when i am in china. the idea that washington has a bigger cloud than new york is tangible. this afternoon, we get more of this? lisa a: that's a sure addition of the weather channel. yes, that is my understanding. tom: there is fog right now, worse than new delhi and shanghai. it is the unexpected that you can get to bring it back to what

we do every day. what is the unexpected? what is the wildfire we could see six months forward, that is the raging debate? jonathan: i thought that was beautiful but you often ignore mine so i ignored yours. we are a team, we ignore each other. let's look at what the s&p 500 looks like. just about positive. yields high by a couple basis points. we .6832. pretty high, even with another weak points coming out of china. tom: we have for movie to 7.13 which is a huge deal. you want to make it 7.12. there is some tension's out there. i don't know what they sung to but nevertheless, they are there within the quietude. jonathan: a break from chairman powell, a week from today. lisa a: the chairman powell

press conference is going to be fascinating and a rhetorical gymnastics act where it is a skip, pause, what do we do? how much are we quietly pricing out the rate cuts in a material way people are not talking about, john? we are looking at the u.s. trade balance for april at 8:30 am which i think will be interesting after data from china talking about how exports really declined in a material way. do we start to see the suits of re-globalization or a shift in the trade balance today? the bloomberg press conference happens in new york. stan druckenmiller, don fitzpatrick of soros fund management, ray dalio of bridgewater and brian moynihan. very curious to see how they shipped.

applied materials cfo bryce hill. should be interesting as well. jonathan: the chief market strategist of sf investments is joining us now. troy, you heard us talking about this taking on a life of its own. how are you managing the story this year? is it unavoidable now? >> it is really amazing that even though liquidity has been drained substantially, the head expanded their balance sheet in march to do the many banking crisis relief measures. you are still $20.6 trillion of money supply or $5 trillion in money markets. equity markets found a shiny new penny called ai. it has great growth potential but we have already taken some of these companies 30 or 35 times sales. our team's perspective in the near term is nvidia is one of the only companies that will

benefit from it directly to the prior point, it is a very narrow rally. the number one thing we are looking at as we are about to have the greatest equity -- the quibi market over the next 12 months. tom: i thought your research was great. i want you to take your research dynamics and fold it into your wonderful phrase that demographics is destiny. how does demographics is destiny advantage american technological exceptionalism in the stock market? >> great question. in terms of the four liquidity path, the next three to six month will be the first time since the end of 20 or close to market history where you have bank lending officially stagnating which is real economy bad. in 21 and 22, when the fed was draining their balance sheet --

in 22, bank regulation stagnated. the fed is back to doing really close to their 100 or $110 above drainage which is rough or my supply. on top of that's, thankfully the debt ceiling was raised but now you will have close to a trillion dollars of notes and bond issuance over the next six months. these three factors are coming together at a time when equities are back up to over 19 times learning so it does not paint a great risk reward picture. tom: when you have been great about this. how do you justify staying in the market? i don't hear troy gayeski going to cash or bonds. how do you participate in the market? >> the cold key to this cycle, which we are calling the galactic conversion after 13 years, very similar to the last decade, you want to focus on

strategies that already have a rich opportunity but on the margin have gotten slightly better because of constraints in bank lending. one example is secured commercial real estate lending, another is private credit. what we are trying to do is resent our defensive positions, which courtesy of the 14 hands on the vix, you can put up downside detection pretty cheaply relative to where we were six months ago. decent trade coming out of 2022 but still provide downside protection. if you can make high single digits in strategies that have much less upside risk, that is the way to go. do not need to make 15% or 20% to hit your actual goals. you just need to make high single digits to potentially low teens. i am not a fan of calling tops or bottoms but there is a lot less upside left in the rally and potentially meaningful

downside over the next six months, driven by liquidity stock and also by the highest per ability of recession we have had since the pandemic. tom: is apple a defensive stock? >> defensive is a strong term. we think of it more as a quality place to hide out or quality stock to hide out in when there is so much uncertainty in the economy. you can think of this is more of a flight to quality when obviously the banking system is struggling from an earnings standpoint. cyclicals and values have gotten hammered. compared to some of the other growth, defensive is a good way to think about it. jonathan: great to get to review. troy gayeski of fs investments. dan ives, raising apples price target from $205 to $220. reflecting increased confidence in the upcoming iphone cycle.

based on our current analysis, roughly 250 million iphones have not been upgraded in over four years and says apple up for a major installed base upgrade cycle heading into the anniversary 15 year release. given the gains this year, he has been writing 23 in a big way. tom: we can point out there is all this talk about the phone costing $900 or $1000 or $1200. the prize the last 12 months, which is when you see the moonshot of apple -- apple off last october, is you are buying them through the phone companies which are hugely subsidizing the purchase. are the $1000 purchases for people? the answer is no. jonathan: monthly pay plans. tom: we all know the math and are living the math but the answer is that dan ives and

other bowls of apple have said the gloom crew of apple have wronged the actual math of how you create the revenue stream. jonathan: fair valuation could be in the $3.5 trillion bookcase which has a full handle. lisa a: the caught up with him yesterday and he was saying, not only is this a specific company issue you are actually having incredible robust sales, whether it is the actual phone companies, or everyone needs to have a staple of $1000 hardware in their pocket, it is also a larger question of intelligence he sees apple capitalizing on with devices that everyone will purchase all over the world. jonathan: and no one has done a great job of explaining this though. apple, ai. what is the question, what is the deal? lisa a: it is hard to see. whether you have devices like

siri which could provide you with even better quality of life. tom: i don't use it. wildly intrusive. all the stuff at home. lisa a: kids are differently -- they act a little differently. tom: really? [laughter] lisa a: just this talk to a phone the fact of. "call mom", "call dad." jonathan: is that what they do? lisa a: yes. jonathan: i am such a slow adopter. tom: i think apple respects a huge amount of people are such a slow adopters. jonathan: they wait and do it better. you know why i activated facial recognition? the units for bloomberg. tom: i still don't do that. jonathan: it is awesome.

it is fantastic. upgrade. tom: this is the old technology of bloomberg. jonathan: you are going to download the old app. the b unit is fantastic. no turning back. it is a beautiful thing. there is sure promo for this morning. principal asset management coming up this morning, seema shah. the equity market keeps adding weight to the market rally of the year so far. the writing is stalling just a touch going into the fed one week from today. equity markets slightly positive on the s&p. from new york, this is bloomberg. . lisa m: keeping you up-to-date with news from around the world. with the first word, i am lisa mateo. former vice president mike pence has announced he is challenging his former boss, donald trump, for the 2024 presidential

nomination. in a new video before a kickoff event in iowa, he said times call for new leadership. he joins a crowded roster with more than 10 candidates that is still growing. in canada, more than 100 wildfires have continued to grow out of control. the effects are being felt as far as 500 miles away. according to swiss air-quality cue air, new york was the most polluted major city in the world tuesday night as smoke from the canadian wildfires blanketed the city. ukraine is rushing to evacuate people from flooded areas after a explosion in a dam. the blast flooded villages, threatening supplies of drinking water and electricity. he he has blamed russia but the kremlin denies responsibility. new york has topped as the most

expensive city to live in as an expatriate. it is due to soaring inflation and rising accommodation costs. geneva and london remain at third and fourth place. singapore was pushed to fifth. cathie wood's funds boosted their shares of coinbase. the company was accused of operating an unlawful exchange. data compiled by bloomberg show three flagship funds for over 313,000 shares of the currency operator tuesday. the stock tumbled as much as 21%. global news, 24 hours a day, on-air and on "bloomberg quicktake", powered by more than 2700 different journalists and analysts in over 120 countries. i am lisa mateo. this is bloomberg. ♪ ♪ leverage. [whispering] -frothy markets. psst. virtual real estate is a lock. ♪ cold hard cash ♪ j.p. morgan wealth management knows the world is full of financial noise.

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most important, it is china. 60% of that growth is said to come from china. if the chinese economy weakens sorg grows much lower than many international economic institutions believe, this can lead to bare sentiment. jonathan: there is the iea executive director catching up with francine lacqua earlier this morning on the oil front. plenty to talk about. plenty to talk about on a growth as well. a report this morning calling for week global economic growth with inflation sticking around. that is becoming a wider and wider view. just about unchanged on the s&p 500. slightly green. yields a little higher by a couple basis points. 3.6 871. just sort of maturity.

slightly stronger, one point 0720 on the euro-dollar. if you looked at that's, you would not know that data out of china was weaker once again. for the first time in three months, that global growth story is not getting a helping hand from china that. it would at the start of the year. tom: it is a global growth story under adjustment. let's review it quickly. you have four, 5, 6 global institutions. i will say keep the at the -- it has been underplayed. a shift out one year, two years, three years. i remember talking to larry about this years ago and the benchmark was 3% growth is a global recession. i think we are there. it has been underplayed. oecd readjusting and recalibrating. claire joins us right now, the

chief economist at oecd. let me cut to the chase. at the margin, does oecd confirmed the shocking duration of weakness that imf modeled a number of months ago? claire: we have global growth improving over the period we are forecasting today. we expect global growth to moderate to 2.7% in 2023 and then jump slightly to 2.9% in 2024. these are low numbers for the global economy. the outlook is certainly without change and action that global growth would return but at week levels. tom: this is a shocking number. am i wrong? for all our listeners and viewers, am i wrong that 3% growth is a global recession

with this 3% of view? can the oecd say it is a global recession? >> it is not a global recession. we are protecting the global economy will -- grow at 2.7 and than 2.9%. that is not recession but a lower level than we have seen. lisa a: you want governments to pull back? why? >> what we saw his fiscal policy played a really important role during the crisis. in 2022, governments extended high levels of fiscal support which was necessary. but now as we are seeing energy prices falling and other prices began to fall, it is time to target the fiscal support better so it is only going to be vulnerable people who need it and move away from the blanket support put in place. lisa a: people have been

predicting a recession for quite a while. we are at a time where in the u.s., the promise of artificial intelligence seems to be bending and pushing people into equities. how do you feature the concepts of psychological intelligence i -- technological intelligence in your forecasts? >> technology is evolving rapidly. the potential upside in terms of productivity gain is potentially very high. at this early stage of understanding with the impacts of artificial intelligence can be, there are some estimates that at this point are uncertain. there are going to learn a lot over the coming months and years in terms of feeding it through to the numbers. there is a high potential upside for artificial intelligence. it is hard to put a number on this at the moment as we are learning what it is capable of and what the wider impacts be on the labor market.

tom: you bring an incredibly sophisticated, british view of economics which is enjoyed. facetiously, you have enjoyed horrific inflation in the u.k. the phrases tossed around and bloomberg news mentions this. maybe the oecd. "inflation-plagued recovery". what is your optimist him that -- your optimism that inflation could deflate? >> we project inflation will fall rapidly this year and in 2024. there is a risk to this from core inflation and tight labor markets. wages are expected to rise. there is a lot of potential for the labor markets in terms of bringing more people into the labor market. a lot of opportunity. that will help. there is an opportunity to bring

more women and all the workers. if you bring more people into the labor market, that would ease those pressures. jonathan: can we talk about the inflation that we witness every month? how important is that pressure with the pressure we are seeing currently? or is some debate as to whether the federal reserve still believes in the dreaded word of "transitory" and says just wait a little longer. >> obviously the picture is different for different countries but tight labor markets are a key part of what is going on at the moment. core inflation is proving to be more persistent and in some ways is going up in some countries. it is mainly driven by tight labor markets. and what we thought about tight impressions feeding into wade's impressions. jonathan: clare lombardelli. wonderful to catch up with the.

the outlook, it is not great. global economy is weak and inflation is sticky and sticking around. tom: of the american exceptionalism, i don't even know where now is, but can we all agree this is the arch missed call of the first six months of 2023? recession gloom in america did not happen. but i am getting global gloom from imf, and the oecd, a little less. it will be fascinating to see how the gdp in america moves forward. jonathan: the recession call is clear. just keep pushing it out. lisa a: i was going to say, how relevant are some forecasts at this point? given how much uncertainty there is an the fact it is not seeming to factor into our performance. jonathan: catching up with

morning hand from bank of america later. this story and -- more later. people just are not interested in this cycle right now. it is to can sing. you know what is winning and if you place bets, you can. tom: everyone will have to recalibrate. it's call it a neutral call to heed caution or a bearish call, you have to readjust even the first six months of the year. it is going to be fascinating to see how people recalibrate and use the s&p as a benchmark. how you recalibrate this forward into the mystery that is q4. jonathan: we have spent 6, 7, eight, pushing nine months talking about lowe's from october. -- at what point do you say we did not get that right? lisa a: the pain trade.

how do you know if you are jumping in at the wrong time? jonathan: exactly. just before you get smacked in the face. tom: it is an over bowl and all that. i think this is a short -- short squeeze. jonathan: nvidia goes up on that right? tom: but then what? what do you do with packaged food, taking zero, do you believe in the equity evaluation of tang zero going forward? lisa a: i don't. tom: it is a 19 multiple. that is ridiculous. jonathan: apple, we will talk about in a moment.

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jonathan: welcome to the program. to get you up to speed, not much going on. equity market pretty much unchanged. mastech unchanged as well. nothing unchanged about it this year. the nasdaq is absolutely flying. since the last time the fed mets, up something like 12 plus. look at the bond market, the two-year yield is around 4.51, adding around three basis points. adding around two or three to

the 10-year yield at 3.6852. pricing out cuts but pricing in may be a few more hikes for some of you out there. the type train keeps going up. apple trade up close to 4%. amazon up 40% or 50%. nvidia is flying. lisa a: this is the reason why you see this potential capitulation with a lot of people coming out and saying right now that we cannot fight this kind of melt up because it is not just a melt up. jonathan: 220 is the target. two point 05 was the previous. amazing to see. lisa a: nvidia shares are up 0.8%. the rest of tech is down. meta down 0.4%. apple down 0.3%. not much of this to scream about

but nvidia continuing to charts gains despite the waffling on the others. jonathan: apple at 178.65. just to go over dan ives. 220 from 205 is the case. saying the hyperreflexia technology giant's massive position of strength as it has into an iphone for upgrade cycle. goes over numbers about how many people have not upgraded their felt and how many will do so. tom: john tucker of bloomberg has an iphone that was in raiders of the lost ark. lisa alludes to this that there is a fixation that it is only seven names. there are a lot of other names but they are not up 30%. mention meta. facebook is up a lot as well but there are a lot of other names

with a nice, appropriate lift that, you today of twentysomething percent. to me, it is not just seven names. jonathan: some work to do over the coming week. ahead of the fed decision on wednesday, maren from blackrock saying -- marilyn wilson from blackrock saying we think it likely the fomc will keep current policy rates unchanged next week as it continues to digest and economic data. this would not necessarily mean the end of the hiking cycle, however, and we have seen plenty of pockets rhetoric from various fomc members in recent weeks. tom: alberto golomb -- gallo framing 6% in terms of yield. no one is looking for hiking to get to a full 6%. marilyn watson, from formal

income strategy. the pain in the bond market is down 7% on bloomberg. we have come back 6% or 7%. a simple question, now what? you assume price up yield down? do you assume a new leveling or do we revisit price down yield up? marilyn: we are seeing a huge volatility in fixed income markets this year. now that we have seen the resolution of the debt ceiling negotiations, we now know we are going to have a huge amount of issuance coming with the balance again. we know we have a lot of issuance coming there. another amount of supply needs to be absorbed by the market. on the other hand, also some liquidity from the system.

at the moment, we talked about fomc and look at data coming through, in terms of the jobs data, the market remains incredibly tight. we have seen softening in terms of sentiments of the data. consumers continue to spend the real estate housing market. the economy remains on a very different footing at the moment coming into next week. it is certainly not a done deal. they need to absorb and continue to look at the lags of previous rate hikes. tom: take the macro view and bring it over to a strategy.

do you manage for coupon or total retardant? >> we try to look at both. if you have a flexible and constrained approach to fix income, you can have both. you can have very high quality decent pairing, which given the spreads today, you also have a decent amount of buffer. you also have to see a significant price from here to see further lots in total return. but we try to do is look at where we have low volatility and decent parity and liquidity. we have a wide range of different liquidity as well. where we are stripping out effectively into today's environment where we see a lot more this. it is much easier to capture that value. of different valuations between

names in equity markets and high yields in the investment grade corporate. the bond market today's a very different beast than the one a year ago or five years ago. the amount of opportunities out there now are so much larger. if you construct a very balanced portfolio with a lot of different receptors, we can get a lot of income to carry but also protect returns. lisa a: i cannot member the last time the two massive bond shots you had such different views on where long-term rates will go. i'm thinking of blackrock and jp morgan asset management. the entire curve is going to be at 3% or below, sent by jamie dimon. how do you push back against the feeling we are not going to go back to a low rate era and see something that departs from the last 20 years? marilyn: first, we do think inflation is coming down but it

will remain elevated over other higher levels we have seen in previous cycles. inflation is or looks like it --. it is highly likely or possible the fed will hike again. we have a huge amount of issuance in becoming mark as well. on the others of this, we do have a lot of demand from investors who are still partying in cash or doing money market funds on the sidelines. when you look at long-term, with the economy and growth, you're talking about the tech sector before which continues to see a huge amount of investment in this area that is continuing to drive productivity. i think there are a huge number of factors that means nation in

rates will remain higher for longer. lisa a: how much higher? where do you see the curve settling at? >> we could see higher from here over the next few months depending on how economic data comes through and depending on what we see in terms of the stresses that continued people through in the booking sector and elsewhere. there are reasonable levels now if you look at the fixed income markets compared to the stock market. i would say the equity market is maybe overpriced. from here, it could be higher but it depends on the data we see coming through in terms of inflation and the economy over the next few months. jonathan: usually it is the equity people commenting on bonds. i have heard this a couple times in last 24 hours. the bond investors throwing shade at equities. what is that about?

marilyn: it has been a long time coming. [laughter] i really think now the bond market has a huge amount to offer. jonathan: marilyn watson, thank you. from blackrock. 12 days of turkish lira weakness . the dollar-lire with a 7% move today. here is the latest reporting from the team at bloomberg according to people with knowledge of the matter. the treasury and finance ministry under a newly appointed chief. they asked the central bank to ease off on the currency market interventions by state banks. that is the latest move. we have a 23 handle on the dollar-lira. tom: what is critical is the volatility, almost the oscillation day-to-day has been hugely managed over the recent

quarters and years. it gives way to breathtaking speed from 21 to 21 point 50 and then a moonshot the last few hours. this is almost uncontrolled is the word i would use. it is a thing called browning in motion. it is within the oscillation. forget about the vix. just the oscillation over a time series. it is behaving radically different than preset and is behaving right now where it cannot find a bid to the turkish lira. jonathan: you know this word well. india idiosyncratic. often we hear that, we pushback. this is one of those situations where it is truly idiosyncratic. lisa a: if you have a monetary policy where you cut rates to mark inflation or do not believe

in economic theory considered by everyone else, huffs this can be considered a video idiosyncratic. what measure can people get. jonathan: still trying to figure out the policy in turkiye. we have a couple things to do with -- to talk about golf, pga, and all that. i also need to talk about turkiye. tom: we have to wear de-valuation so they have a tough condition where they reset at a weaker currency and that would be the solutions. i am sure it is the orthodox policy. jonathan: pushing ahead later this morning, michelle girard of the natwest markets security division. cpi data coming up tuesday. the federal reserve and chairman powell coming up a day after. one week from today. lisa m:[speaking non-english language] -- keeping you up-to-date with news from around the world. with the first word, i am lisa

mateo. the global economy is set for a weak recovery according to the oecd. the organization's latest outlook forecasts 18.7 percent expansion of the world outlook this year and 2.9% next year. both below the average in seven years before the pandemic. she says the war of ukraine, the shocks of covid, and policies of major banks are always on the recovery. u.s. secretary of state anthony blinken is set to be planning a trip to china in the coming weeks for talks with top officials, possibly including president xi jinping. president lincoln had plans to visit beijing in february but scrapped the trip -- secretary blinken had plans to visit beijing in february but scrapped the trip after the chinese balloon. the dull family office wants to diversify their portfolio.

they have primed an influx of trap -- cash and stock. the cloud computing company counts dell as its largest shareholder. she says she will use the proceeds to add more real estate to the portfolio and expects to invest in credit. pga tour and saudi arabia backed challenger golf and avoided calling their proposed partnership a marcher -- a merger. but bloomberg learned it is already raising serious concerns with u.s. and european antitrust orators. it is being viewed as a brazen play with red flags creating a giant monopoly. the u.s. doj will review the deal. i am lisa mateo and this is bloomberg. ♪ ♪

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i intend to seek the republican nomination for president of the u.s. in 2024. >> today, before god and my family, i am announcing i am running for president. together, we can bring this country back. the best nays for the -- days for the greatest country on earth. jonathan: the field is getting bigger, wider, broader and much larger for the republican candidate race. still, the biggest candidate is donald trump. we are going to race through this and get straight to enrico doran. s&p 500 up by 0.1%. yields higher. 10-year yield up by three basis points. 3.68. not much economic data between now and tuesday when he gets cpi. then off to the fed a week from now. tom: there is more interest than

normal given the chinese export tone we have saw. it is supposed to be quiet after a week of unemployment. the unemployment numbers were a week of wow. equity numbers strengthening in the last hour. it is a little bit. jonathan: a huge debate over the labor market from payrolls. the establishment survey, the household survey which gives a better read right now. michael mckee has done a phenomenal job of explaining this. tom: we are going to talk to enrico and about politics. jonathan: how much bigger can the republican field get? tom: the next candidates will be at the margin. will there be enough of a stage for every candidate to get on during the first debate? lisa a: do they have enough signatures to get on the stage? tom: annmarie hordern joining us. do they have money? it takes money to run.

annmarie: at the moment, they have money. if they cannot continue, they will start to peter out. to run, you also need at least 40,000 donors from 20 states or more. this is where the former president dominates. he gets low numbers but tons of them in terms of campaign donations. when you see chris christie jump in and mike pence, they need to makes for they can also get on the stage. tom: can mike pence take the evangelical vote from the president? without question, mike pence has been the most consistently evangelical politician in america. annmarie: that is his game plan. he sees this as his path in the primary to make sure he is in front of the evangelicals. obviously, what you are seeing here is what many who are against trump want to avoid, is what we saw in 2016 with this

plurality. i don't know why you are laughing. tom: radio, you are missing out. it looks like hollywood squares on tv. jonathan: introduce centre tim scott to the world. how interesting is he right now? annmarie: he is interesting because he will be a difficult person for people to be in a dusty put in a box. he has shown he can legislate. he is the governor in south carolina. you did an immaculate view on the -- immaculate interview on the view the other day. a group of women. he got views on all sides. he served who he was and talked about his mother. he did not get bombastic even when pressed or lose his confidence. he is an interesting name that many people want to see how his

campaign can progress. obviously, it is so early on. the issue they will all have, or what the governor of new hampshire, chris sununu, says if you need to know when to go out. what he wants to avoid into larry hogan wants to avoid -- jonathan: how do you know when to get out? annmarie: it seems easy to look at numbers and the timeline to 2014 and no analytically who should be leaving at what time. what if you just invested all this money and time into one race, you will want to give it your all. it will be difficult to watch. lisa a: these new entrants like the governor of north dakota, including people not necessarily on the radar -- annmarie: he is. if you see his campaign video, it was a good story. but can you be president is different -- a different question. lisa a: with all the stories and

great advertisements, does this take power away from former president donald trump or give him more? annmarie: the were people that potentially get on the stage, what you heard from chris christie last night is difficult. this is harsh language for towards the former president. this could be difficult for him. the thing donald trump wants is more people. they will divide the remainder of the votes he does not have. he has 30% of the base. tom: jonathan: stop it -- tom: stop it. he is miles ahead. 52%. annmarie: the work people in the race will divide the remainder of the party vote. he has 30%. tom: is the zeitgeist in washington that the former president is locked up right now? annmarie: not exactly. jonathan: i of about chris

christie running for president. annmarie: people say his campaign is a, because the to get on the main stage and help push donald trump out. jonathan: to allow people like senator scott to deliver a positive vision for the country. that is what it felt like. just felt like governor chris christie was there as the, because he candidate to disrupt things -- there as the kamikaze candidate to disrupt things. lisa a: there are giving him big money not because they want him to win but to be the, kazi -- k amikaze. and mariko former vice president mike pence did not mention donald trump at all. normally if you say i am a former vice president, you show a picture of you and the man you served next to.

he did not mention him but yes, no one will attack donald trump directly. chris christie was a different story. gloves off, even going after donald trump's family. the former president is the first one and abortion will be a huge one. it is difficult for republicans to answer. chris christie was iraq. he said i am antiabortion but will not have a national ban. tom: i get what is going on here. red sox-yankees friday. annmarie: and aaron judges out. we wish him well. it is not a fracture. tom: they took the series to the daughters without aaron judge. that was impressive. annmarie: he got hit. jonathan: you just said that was good. he ran into the what your response was it is good.

annmarie: because he wants aaron judge out of the game. he is a red sox fan. it is so rude. we are in the center of manhattan. tom: i want to again last night. it was painful. jonathan: the season is over already? tom: know, april 15 or april 20. it is very clear is i am enjoying a lot of yankees baseball. jonathan: the game has changed. tom: i cannot say enough. the great fred lynn had double knee surgery and said even he is watching more. a huge difference. it is hugely athletic like aaron judge. annmarie hordern is right, it was a stunning catch. jonathan: is it just the pitch clock? tom: it is shipped.

they move players around based on research. this put 20% back on batting average the balls of the meadow and back on third. jonathan: so basically people got so good at their job that the game got boring? tom: basically the team -- the tv told him home run derby was the way to go in the league said no it is not. jonathan: it is good to see you and marie. -- annmarie hordern. seema shah at principal asset management. this is bloomberg. ♪

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>> our base case is that sometime in the next 12-18 months you're going to have a recession. >> we are entering the phase

where we can expect activity to begin to slow. >> we think it's going to be a little up-and-down right for the rest >> of the year. >>i think there is confusion in the markets and that's ok. >> this is bloomberg surveillance with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning everyone. on radio on television it's a quiet day. no, it's not. a little bit of optimism, a lot of people pushing against that and you see it in the turmoil over the first two hours of bloomberg surveillance equities jonathan: left. positive on the s&p 500. we can talk about the doom and gloom. we are talking about the pain trade with the a i i according to city. lisa cut up with him in the last 24 hours embracing his price

target. and pretty constructive on this equity market as well, tom. the job market refuses to land but wage inflation is coasting lower is the ai euphoria leading the stock market into the mother of all mount tops. he says might prove conservative, tom. not controversial. that could be interesting. tom: everybody adapts. what's so important to me is the stages as lisa mentioned earlier. the basic idea of the ec story of hoops i was short convexity going the other way and right now it feels to me we are at the and then what? and you wonder how the inflation report and the fed meeting will help. jonathan: this is happened even as we start to think about another rate hike. someone i mentioned moments ago

emmanuel making the point that this can take on a life of its own and based on these massive most parabolic moves that we've seen in the likes of nvidia it feels like it has taken on a life of its on. tom: what's important here calling for recession it's this core idea where i was guilty of this as anyone, economics is linked to investment. a be it's not. lisa: what's that expression that you can make a call and even if eventually you're right the timing means you're wrong. it feels a little bit like that. a recession eventually but if everyone keeps pushing back what is to push back against some of the melted areas that people seem right now the market? tom: the heart of it to me, lisa, basic idea how do

companies respond and i'm still predicting the mothers of all issuance every cfo out there has to same load the boat, get the balance sheet straight right now. lisa: and we are seeing that. the ceos are the strongest because they are able to do that at rates that are not break the bank. tom: let's get to the daily here. 83 basis points of inversion and continuing tension there. jonathan: it is up by zero point 15% on the s&p 500. if you ask what the differences, that's how you time it. an investment is a trade gone wrong. i think people are hoping that his not going to develop into an investment which is a trade gone wrong. they are looking for the rotation. as you see it keeps ripping. tom: the bloomberg event

structure is extraordinary. we have fronts down with a technology conference which is world-class. right now this moment in new york, there is bloomberg invest. brian moynihan will be speaking from bank of america. that's all fine and well and there will also be tactical discussions around bloomberg invest. chief global strategist joins us this morning i love seeing how buried in your note we have underweight in some way equities. slightly underweight. you have the adverbs going there. how do you do and equities strategy when you see what nvidia is doing now? >> within our equities we have a large cut. the recent we have it is back in february it was threefold.

we behalf -- we have a slowdown coming. towards the end of the fed hiking cycle and large caps have a great international exposure. so that was the reason and now you add nvidia. that is playing out fairly well. but of course you have to think about your s&p 500 target. could it go back to the global? the math doesn't add up. jonathan: doesn't add up for the s&p? does the math add up for the euro stoxx 50? >> the euro stoxx 50 we keep having this conversation with clients about the u.s. exceptionalism. about six months ago it was like maybe for the next decade we could have higher inflation. it is in the sentence he. then you have to move back into ai and the euro suspect. that's what everyone is talking about. is it tactical?

at the moment the u.s. is not the favorite region. in the 10 year period, it's 100% the u.s.. jonathan: how is london thinking about this now? the stock was flying. are they thinking in the trade quickly? >> i think there's a lot of disappointment and i think they are quickly cutting those positions. at the moment so many people are positioned for bearishness. they have to cut wherever it makes the most sense. i think with the china story, there is a general feeling this is going to be very disappointing the second half of the year. it could still reach the gdp target that we are not looking at the stimulus measures that we would see in previous cycles. the china trade is coming down because of the european exposure to china. that is also coming down. lisa: you said people are

looking for ways to express their bearish views. what other places are you seeing them express their views at a time when it's dangerous to do so and it's unclear the best way to really express that? >> if you can do broad, fixed income is the best place to show the bearishness. quality, defensive, those are the areas probably high-yield is not the area you want to focus on if you believe a slowdown is coming. there are still alternatives. the trade continues to play fairly well. you so that during the svb crisis. infrastructure continues to pull and perform extremely well so if you are one of the people that doesn't believe there's a slowdown coming there is a way to play this. maybe not as controversial. lisa: have you shifted your view on what you believe is defensive and i ask because we keep hearing about how some of the big tech stocks have gone from

high beta interest-rate sectors to the star wars of the markets as the engines of growth, the place you have to be if you want to be safe. are you buying that? >> it is typically where you want to go if you believe the economic environment is connected. the ai, that is an additional sector story. suddenly we buy into the idea that technology is the future. we actually made a reluctant decision to cut our tech exposure last year in 2022 because of the fed hiking cycle coming up. we continue to be the long-term believers in tech. jonathan: that was the right decision at the start of 2022 because tech was brutal. where are you on the lows of october because we used to go back and forth on whether we retest those lows. then we had a 20% rally. are we retesting those lows?

>> i'll be honest, i think this is a difficult decision to make. the tech story means it's unlikely. if you don't get that pullback and you get the momentum story, and actually then your getting melt up potentially deep positioned on the line if you don't get a recession sooner the later it is the harder it becomes so you want to get the way. if that happens then maybe you get it out but next year will be a tougher story. jonathan: we mentioned lvmh patrick armstrong came on this program april 21. he told us he recently sold ovi mh. it talked on april 24 that is down almost 10% since then, tom. we had a serious move lower on

some of these names. it's not your today, granted, but they've been coming off the back of this china story. tom: to be polite 30 some of them i believe are higher so these are fully valued the real debate, i'd love to know what mr. armstrong knows. i'd love to know what patrick armstrong thinks about now what for luxury after a 10% pause. to me, that's a mystery. jonathan: you made a point that day that we were coming into the year and going closer to 30. that was based on that. tom: i got back to boring, conservative cereal makers, so acres and trading in 20 multiples. lisa, that is just surreal to me i just don't know what to do with that. lisa: the lvmh story is interesting to me. is that really going to be the

telltale sign of china demand? is that the read on where we are in terms of how much the reopening was priced in and how much the deceleration is starting to see been and is it a leading indicator for other areas in europe at this point? jonathan: it's taking the temperature out of china. they reopened the story out of china. turned out it's the back end of last year. didn't last too long into this year. chinese equities has been a tough trade in 2023. tom: you have to remember here it's moved so far so quickly you have it at 7.11 which no one imagined. jonathan: we will talk about emerging markets we also need to discuss the pga liv golf the controversy around there and how upset would you be if you left millions of dollars on the table to take a moral stance and your employer did the opposite? we will talk about that in just

a moment. >> keeping you up-to-date with news from around the world with first word, i'm lisa mateo. it's official former vice president pence has announced he's challenging his former boss donald trump for the 2024 republican presidential nomination. in a video released today he said different times call for different leadership. he joins a crowded gop roster with more than 10 candidates that is still growing. more than 100 wildfires continue to burn out of control. thousands of people in québec have fled their homes and more evacuations are expected today. the effects are being felt as far as 500 miles away. new york was the most believe did -- polluted city tuesday night. kathy woods funds boosted their

holdings of coinbase. the shares slumped after the company was accused of operating and and also -- an unlawful exchange. but more than 419,000 shares of the cryptocurrency exchange operator tuesday. the stock tumbled as much is 21% . we will have more on this story later this afternoon when we speak with brian armstrong at 12:30 p.m. wall street time today right here on bloomberg. global news 24 hours a day. powered by more than 2700 journalists and analysts in over 120 countries. i'm lisa mateo and this is bloomberg.

it's easy to get lost in investment research. introducing j.p. morgan personal advisors. hey david. connect with an advisor to create your personalized plan. let's find the right investments for your goals okay, great. j.p. morgan wealth management.

>> i think it's a closer call than i would've thought so several months ago. i will say i still think that

the reasoning that the chair put forward which is that we had this dislocation a banking to the biggest bank failures in u.s. history. markers have moved on to the next thing that some challenges remain. jonathan: fantastic to catch up if some of the weakest and brightest that of pemco. that was former ted vice chair. global economic advisor. s&p looks a little something like this. positive 0.1% not too much drama. plenty of drama over in the g olfing world. take a listen to what jay monahan had to say. >> obviously it's a very dynamic and complex couple of years. and for players i'm not surprised this is an awful lot to ask them to digest.

this is a significant change for us. in the direction that we were going out this ultimately is a decision that i think is in the best interest of all the members of the pga tour. jonathan: commissioner monahan if you could compare and contrast that to comments he made speaking to jim nance have you ever had to apologies for playing on the pga tour? he made a moral stance on not joining liv golf encouraged by people. and i'm googling now not what time he tees off today it's what time his news conference is. to find out how these players felt the players who left hundreds of millions of dollars to support this tour only for them to go behind the scenes and make this arrangement. tom: the shock is genuine is a complexity of the moment. we are gifted in that we have

emerging markets expert damian sassower with the real understanding of his golf. important conversations and shock of this announcement. he joins us from the 15th whole at the golf club that i wish i was that. i'm going to cut to the chase brendan quinn and the athletic absolutely nailed it this morning. he said golf is broke and the saudi's are coming to the rescue. how broke is golf? >> they are not broke they just didn't have the resources that the saudis do. they can't compete on a global basis. have to take the position without knowing much information here which if this makes it more affordable, more inclusive than perhaps the merger is good but my goodness tiger woods, scotty sheppard, rory mcilroy hundreds of millions of dollars left on the table because they were listening to their commissioner

who now just took the money himself. it is just an unbelievable turn of events. jonathan: don't worry about the other players have we got any idea how this is going to work? if he goes back onto the pga tour and plays with people who did take the money how are they going to figure this out? >> he came on yesterday saying there will be a fine for the live golfers who did initially but good luck enforcing that and what is the monetary about going to be? you are absolutely right. there was a players meeting yesterday at the open in toronto. it was not good. it was a firestorm. i think right now what you have to do is take a step back and say you know, look at mma one strikeforce and the merger in 2010 look at the nhl and the

world hockey association back in 1979 when they marched. antitrust will be all over this. a deal is not done until it's done, jonathan. i think we still have to wait to see the details. jonathan: for paul too. -- football two. we saw several football players towards the end of their careers making the trip over there. can you tell me what the strategy is here from the saudi government to make these big investments in global sports? >> i can't speak about all the case of the pga they didn't have the resources and the pif in saudi arabia new it. this was an investment. this is deeper pockets and they had information about the state of affairs of the pga and the fact they felt they could basically compete against them. that's competition, that's what it is. i don't want to beat a dead horse on what's going on we don't have all the information yet, but there's got to be a lot

of bet lead. quite frankly, what's to prevent these players from going off in breaking away from pga on the heels of this? jay monahan, you know there's been accusations. there's so much here to unpack and to unwind. we are a far way from a deal being done. tom: the way the deal gets done is to get solved with money. again a framework agreement i've never studied that i don't know what that means. sounds like what we call a handshake agreement. the solution here is the saudi's will find -- fund either directly or indirectly equivalent multimillion dollar packages to i'm guessing an amateur 20 big names. right? >> i don't know if it's going to be making the purse bigger i'm sure it will have something to do with it. perhaps changes to the game or perhaps smaller fields as opposed to having hundreds of

players may be a field with just the best players in the world. how much money is being invested in the sport of golf to make it more affordable, more accessible ? that is the key point here. tom: i think this is so important here. you're telling me they are going to change the masters? they're going to change the pga? >> no there are going to be events introduced to golf that are going to be more aligned with what we saw at liv and i'm not just talking about the style of playing. that happens on the peach were -- the pga tour also. what a bigger purse means and a smaller field means to the golfers who are struggling to make ends meet to go from one tournament to the other. those days are coming to an end to really quickly there's going to be a lot of money thrown at the sport and a lot more people getting paid.

whether it's distributed more evenly from the bus to the horse that remains to be seen. lisa: do viewers care? i think of manchester city and how people think it's a fraud in terms of how much they bought their players. the fans are really happy because they are winning a lot but is there a similar feel if you have winners people are going to follow the teams? >> lisa, i think it's difficult to take the moral high ground with anything. i think that was a defining moment there. the fact that you have some of the best players in the world who can win a professional tournament basically not able to play. i think that is where the rubber met the road and i think jay monahan obviously he buckled under the weight of that. i think that's really where we are now the fact that bringing the best players back together to compete in tournaments is good for the game of golf. but it's the players that play the game and there's a lot of dissension there. people turn away hundreds of

millions of dollars and those that accepted it and there's going to be no middle ground because those that did accept it they took riskier. -- took a risk here. you know, the fact if the matter is they took the risk they earned their report and it only took six mins to see it. jonathan: it's a hard lesson. that's for sure. damian sassower. the virtue signaling of corporations in the united states of america. this is a fantastic example of that. there, you have some very wealthy, well-paid players who made the decision to take a moral stance because they didn't want to chase even more money and then the people who encourage them to take that stance made a very different decision. tom: i go to the heart of the matter print enough this with the athletic the tour isn't like the other major sports. we think of pj as a major sport. it's not.

they are just looking at them and going ok how do we get there? the fictive -- the 50 people how do they survive the tour? jonathan: traveling the country golf clubs in the truck. tom: people like that barely surviving is that what we call a major sport? i don't think so. jonathan: i will say liv golf has some good ideas. do some stuff that make sense. from new york city this morning jay polonsky coming up. all in the next hour on bloomberg tv. at pgim we can help you rise to the challenges of today, when active investing and disciplined risk management are needed most. drawing on deep expertise

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but then he got us t-mobile home internet. i was just trying to improve our signal, so some of the trees had to go. i might've taken it a step too far. (chainsaw revs) (tree crashes) (chainsaw continues) (daughter screams) let's pretend for a second that you didn't let down your entire family. what would that reality look like? well i guess i would've gotten us xfinity... and we'd have a better view. do you need mulch? what, we have a ton of mulch.

tom: bloomberg surveillance, good morning. all sorts of other good things as well. lisa abramowicz and tom keene getting ready for the 9:00 hour i believe it's amazing how the strength got him back. lisa: a tough turn around i will say. it was illuminating to hear how a number of different shops are shifting to this longer view of higher rates. tom: may be the high point today other than we going to mike mckee her in a second the basic

idea that 6% is talked about more. lisa: we are hearing this from strategists because you are hearing this sort of dynamism in the economy. tom: interesting to see joining us now on data michael mckee joins us. it can be important as a trade balance. mike: it's a minor importance. it does fall into the second quarter it comes in lower than anticipated at $74.6 billion. but that's up 10 billion from the month before. it may be a minor drag on growth but we'll have to see how the rest of it plays out. the atlanta fed is down 1.9%. so at this point we are seeing relatively strong growth. this is like pre-pandemic growth.

tom: it's not a recession. mike: here's the interesting news that came across this morning. in you talked to the oecd and they are pessimistic but the business roundtable america's biggest ceos out with their latest quarterly survey and 87% say growth will increase or remain the same. and that 65 percent say their capital expenditures will increase or remain the same. so there is still optimism. lisa: when did people get so wrong and what is the fed looking at to reassess the perhaps intelligence of a skip, pause, jump. mike: i don't make forecasts so i don't anything. it's hard to figure out what's going on post-pandemic with the unusual dynamics of that recession and the fact that everybody got fired at once and everyone got more or less

opportunity to go back to work at once ended take it. it has been hard to tease out the impact of course for the bls seasonal adjustment it's become very difficult. so some of the numbers are off we don't know exactly where we are but we are stronger than anticipated. the interesting is the labor market because it's still a strong and not behaving as the fed expected it to. lisa: to that point how important are jobless claims tomorrow? mike: it's not a very exciting week. it would matter if they were hugely out of line especially if they go up a lot but i don't think they are as important as they happen because we've got a lot of other labor market data that is still pointing to strength. there's a lot of things to keep an eye on their. as long as people have as long

as people have jobs they spend what they get in their paychecks. tom: i did not know that. michael mckee, thank you so much. as we go onto the fed. mike touched on what i want to speak to. the head of the u.s. economics and michelle buried in your report is a stunning call that america is unprepared for. you were saying you want to get back to 2015. that is we are going to get back to an 18 month a 5.5% unemployment rate. walk us through this stunning shock, forget about the pandemic of getting to an unemployment rate in 18 months the end of 2024 that gets us back to a 2015 rate. >> i hate to be the pessimist in

the seat have more optimism that seems to be taking hold about the economy. but i'm just not convinced that we are going to be able to see growth at the kind of for so you that we are saying now. we have a recession in our forecast before the end of the 2023 and that is going to be accompanied by a weaker labor market and arise in the unemployment rate over the coming 18 months. it really is in our view it's a timing thing. the fed is done in terms of removing monetary policy foundation thing into restricted territory. we've seen rates move up we've seen money supply contract. we've seen credit conditions tightening and we just think these monetary legs are long and a but we do think that that will come to aid on the economy and we will, unfortunately, and up

in a recession. tom: i use the famous bloomberg surveillance arrow function to make a glide path to a 5.5% unemployment rate in 18 months. by any definition, it's a jump condition. what will that do to our markets to see a hugely jump condition when we get to five .5%. >> it will mean that we will start you're going to be saying negative employment reports that you would typically see over the course of a recession. i do think that it will be accompanied by expectations and actual action by the federal reserve to move policy from this very rich strictest stance. all of this is not something that the markets are preparing for. actually markets are going the other way. they are beginning to price and

-- in action is. even stepping back from this outlook for recession and higher unemployment rate i would say here we are pushing back in general around this idea that the fed is going to have to do a lot more and that even without a jump in the unemployment rate you can start to hear fed officials making the case that it isn't labor market costs that is driven inflation higher. it's supply chain disruptions. it's other factors. it has pushed inflation higher and that actually would set the stage for the fed not having to be as aggressive in terms of raising interest rates even if the unemployment rate or to stay , doesn't rise as we expect. the fed doesn't have to get the unemployment rate up. the seeds are being sound for the fed to make the case that they don't have to get the unemployment rate up to five or

5.5% in order to get inflation down back to target. lisa: given that you are pessimistic how do you play the pain trade which is up? >> we found ourselves pushing against the idea of rate cuts and now we swing to we are sort of on the others have being able to say i think you've got to look through, you know, look through this and look for opportunities on the market is moving the consensus is my being where i see economic fundamentals. absolutely, we can tell you whatever story based on series of data. i see some worry some underlying signs of slowing and dicken it was a little bit more stress. it's more imbued in terms of credit developments and credit market tightening and some of the rise in default rates.

these are signals we are watching that will play out. again looking to sort of question the move and the consensus and position for what will be a longer-term move is what we are beginning to talk to our customers about. lisa: what waiver you pushing hardest back against? is it what we have seen in more speculative areas? >> you know, and again we don't to stocks here i will say that in the conversation that we are having it really is i think at the moment based on pushing back against the idea of economic resilience that we will be able to avoid a recession. obviously, as we get stronger than expected payroll reports

our call for recession looks less and less likely. again, talking and questioning and looking at you know the underlying fundamentals i would say the inflation front because for a long time without weaver skeptical inflation would come down. we are now of the opinion that it will moderate toward the end of the year. the core inflation number will get done under 3% at that something that the market is not really focused on either. tom: thank you so much. michelle girard with us. same a quick visit see -- same equivalency. let me see what that is right now. fractional movement in the nasdaq this morning. the vix 14.07. i don't think we talked about bonds here is still shows a complete odyssey -- oddity of 83 basis point vanilla curve inversion.

nobody is making i'm in we were there. that's big news i get it. but i'm sorry we are still massively inverted. lisa: it used to be that a curve inversion, typically not until it diss inverted so that so people are saying. they can be two years out. 15 at the last eight processions there is this question around the accuracy of this. the bond market is sending a more pessimistic message and what stock traders are telling it and that's the descendants that your hearing where you got fixed income traders trying to recommend certain plays and saying this can't last. tom: secretary is over answers talking about janet yellen made clear the going to rebuild the cash award at the federal government after the debt unwind there's a lot of good research this morning. it's easy to be gloomy but then when gloomy events like the debt crisis get solved then what?

we are all waiting to see what the then what is in a fixed income space. lisa: earlier this week may be the bill sales following the debt ceiling resolution would cause a sucking sound of liquidity out of the market. tom: absolutely. lisa: a lot of people are saying we just have nothing else to talk about. thus the town that i heard from a lot of people. tom: will have to see. two year yield two point 45%. get ready for a 4% yield. the vix 14.07. oil, west texas 72.56. stay with us. this is bloomberg. >> keeping you up-to-date with news from around the world with first word, i'm lisa mateo. ukraine is rushing to evacuate people from flooded areas after the explosion at a major dam in the southern part of the country.

the blast flooded villages inundating thousands of villages and threatening supplies of drinking water and electricity. they have blamed russia, the kremlin denies the responsibility. antony blinken is said to be planning a visit to china in the coming weeks for talks with top officials possibly including xi jinping. he had plans to visit china in february but scrapped the trip after washington identified what it said was a chinese spy balloon. citigroup ceo james fraser visited beijing this week. she is the latest executive to travel to china despite growing geopolitical tensions. she met with the top financial regulator as well as the deputy governor of china's central bank. her visit followed some other recent trips by j.p. morgan chase ceo jamie dimon and elon musk. a new record as traders say state lenders had halted dollar

sales to defendant. the currency dropped about 7% weakening for a talk straight day. it has lost more than 12% since the second round of elections since last month. francis is in a hospital today undergoing surgery to treat an intestinal blockage. the vatican says that the 86 euros would be put under general anesthesia and would remain hospitalized for several days. he ferments in charge of the vatican and the 1.3 billion strong catholic church. global news 24 hours a day. powered by more than 2700 journalists and analysts in over 120 countries. i'm lisa mateo and this is bloomberg. ( ♪♪ ) ( ♪♪ ) -awww. -awww. -awww.

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>> i think the crypto industry if it's going to have success going forward has to come into compliance with basic public

policy about disclosure, about avoiding conflict, properly segregated customer funds and guarding against fraud and manipulation. without that, this whole area stands a chance of collapsing like a house of cards. tom: the chairman of securities i'm not going to mint swords. in all the work i've done up bloomberg a single previous book i've ever seen was a book of the year in 2016 may be 2017. " the curse of cash" it says so much of what we are staying in unregulated things. he had death threats, on and on. he said to me a number of years ago what is taking so long?

so long as it occurred in the last six days, chief criminal correspondent katie greifeld joins us right now. is this about criminal activity? is that what gets us talking about it? >> when it comes to coinbase and finance i'm not sure about the criminal part. the common thread is this really rests on unregistered securities. these lawsuits really hinge on the fact that their position is that they were letting u.s. customers basically trade with they say are unregistered securities. tom: that's criminal activity, right? in a relaxed way. but that's bad activity. >> it's definitely bad. that's the common thread. the allegations against binance go much deeper than that. in binance's case it's both finance and the ceo. lawsuits against both of those

entities were as coinbase didn't specifically name the ceo. tom: what was the shock of this across the creek sphere? lisa has two bureaus oil in her living room she brought out a price of like -40. she had to report that to the irs. lisa: and child protective services. [laughter] tom: i cut to the chase here this is unregulated securities which if it wasn't bitcoin, we would be saying that's bad behavior. are these guys in trouble? >> definitely. the sec wants them to give up their ill-gotten gains and in binance's case it's probably the more interesting case. it has a lot of parallels to what we saw with ftx. they are concluding -- saying misleading investors some breaking security roles.

tom: so people like me are like what took so long. huge supporter and all that, old parts like me are saying what took so long? what to the young turks say? >> i would say they're not surprised. to your point a lot of people had been asking what took so long. we knew this was coming. tom: the crypto believers are they overwhelmed that coin this has been taken to task? >> i would say probably the shock at this point among the crypto centers on just sort of the shock and when you think about you had to back to back actions against the two largest crypto exchange is in the world. that's probably the surprising part here. in coinbase's case, they said the sec had of art that they were considering action. bloomberg broke the story that the sec was looking at something. binance, again, that is the bigger whale.

tom: i'll go with that. this is pretty grim news it went on to 25. liquidated the oil. tom: where is the support level on bitcoin? why isn't that discussion happening? >> this is something that's been developing as we saw all the shocking headlines back to what we saw with the not over a year ago. it quite has been kind of completely disconnected from the news that's happening with these companies. a lot of the participants that helped pump the price have been fleshed out at this point. what's left is the true believers who are going to sell. lisa: that is exactly what i wanted to go. no longer is bitcoin necessarily a macro play. it's back to where it started in

terms of who believes in this blockchain technology as a way of cross-border finance. is that really what we have gotten back to? >> i think so because you look at the money. we see spending into crypto companies has basically dropped off a cliff at this point. i haven't heard from the institutional money managers that i talked to whether they are considering adding bitcoin. that was a good conversation about 18 months ago. now, at this point, its correlations to the nasdaq 100 are coming down in terms of what drives the asset class. it really flows in and out. people who control substantial amounts of picc line, the retail participant has flushed out. lisa: katie greifeld, thank you so much. tom: we have breaking news, what do we have here? lisa: five days ago there was an article in the atlantic about chris lift the head over at cnn

and today the new york times is reporting who booster of cnn is no longer. he is out five days after the article which people characterized as jamming he tried to change some of the ways the network was right after the trump era as well as some sort of details of his leadership moving his seat from the newsroom up to the 22nd floor. it was seen as sort of assigned of not reading the room. tom: it's a little unclear. maybe he will be leaving the company i'm not sure what the dynamics here of this very much breaking news story. it just goes back to a fixation within three zip codes. it has larger ramifications. lisa: cnn is not allowed. they have their own story and certainly there are

idiosyncrasies to it but there has been a question around the role of network news and it's sort of ironic to be speaking about this but it's true. there is a way people get news whether it's social media, streaming types of networks, i think there aren't a lot of bigger questions hanging over the industry that are being felt. tom: we will see that and it will continue to be a story certainly for all of us in the news business and the media. reportedly reported by the new york times. chris licht didn't move s&p futures here. lisa: he did not affect invidious price share. -- nvidia's shares. tom: we are in the dearth of economic data. within the quiet year this goes

around to the maid year update lisa: softening the protections for economic tim and gwen. they are upgrading what they are saying as result against in the u.s. economy. sort of the light effects of the stimulus during the pandemic and i just wonder what that means for the fed if this is true does that mean they do have to sort of go to your point, take 6%. at what point to step become destructive forces this is an economy that can handle it. tom: they are going to be data-dependent. maybe the most important thing i heard today mike mckee on the business roundtable which is fancy ceos sitting around trying to seriously gain the path forward and the answer is there

was an inherent optimism there. the big adjustment is we have all lived is this yield. every conversation rep to run equities and technology is about the yield that has come in in the last year. the answer is now what? yields reverting back to where they were 15 years ago. lisa: and how long do they stay there? and when does it actually trickle out in companies that have already refinance? tom: you have one side we haven't even touched on today which is the site of great disinflation. the idea of yields coming down maybe to the point where no one expects it to come in. very valuable trip to pemco, clearly their feeling is it will have a higher yield and some normalcy within a 5.29% three-month low. futures up three. nice lift to the market as well.

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jonathon: from equity market just about positive on the s&p of hundred. countdown to the open starts right now. announcer: everything you need to get set for the start of u.s. trading. this is bloomberg "the open" with jonathan ferro. ♪ jonathon: live from new york, coming up, stalling from a fed rate decision. a weak economy played by inflation. -- played