'Bloomberg Surveillance Simulcast' Full Show (10/28/21)
>> WHAT HAS BEEN A HUGE TAIL WIND IS STARTING TO TURN INTO A HEADWIND. >> WE DO SEE THAT WITH THE LAST ROUND OF STIMULUS CHECKS. >> THE RESPOND POSITIVE TO A CERTAIN LEVEL. >> DON'T MISS OUT ON THE BIGGER PICTURE HERE. >> THIS IS BLOOMBERG SURVEILLANCE WITH TOM KEENE, JONATHAN FERRO AND LISA ABRAMOWICZ. >> A SPECIAL DAY FOR GLOBAL WALL STREET.
A DAY WHERE THE BOND MARKET IS ON THE MOVE. KAILEY LEINZ IN FOR JONATHAN FERRO. HE -- WE WILL GET TO THE EQUITY STORY IN A MOMENT.
LISA, I'M THRILLED TO SPEAK WITH YOU ABOUT THIS STANDARD DEVIATION MOVE FLATTENING CURVE. THE REAL YIELD ON MOST A JUMPING CONDITION TO A NEW NEGATIVE STATISTIC AND WHAT ABSOLUTELY STUNS ME HERE IS IT'S A HAWKISH DAWN. >> I LOOK AT CANADA SETTING THE TONE FOR THE MARKET YESTERDAY SURPRISINGLY ENDING THE QUANTITATIVE EASING PURCHASES BRINGING FORWARD THE RATE HIKE EXPECTATIONS PAID ARE THEY A HARBINGER OF WHAT'S TO COME AT OTHER CENTRAL BANKS OR ARE THEY INDEPENDENT. THIS IS ONE OF THE KEY QUESTIONS ON THE PRECIPICE OF NEXT WEEK'S FED MEETING. >> GEORGE SAYS THE MACRO ANALYSIS, WE WILL DO THE ECB TODAY, OUT THE WINDOW, THIS IS ABOUT RISK. WHAT THAT MEANS IS POSITIONING. HOW WOULD A FILTER IS THIS.
>> OVER THE LAST THREE DAYS WE'VE SEEN VOLATILITY IN THE SHORT-TERM RATES OF THE DEVELOPED MARKETS GLOBALLY. SHOCKING MOVE TALKING ABOUT STANDARD DEVIATION. HOW MUCH OF THIS IS A COMPLETE INABILITY FOR WALL STREET HOUSES TO GAUGE CENTRAL-BANK REACTION FUNCTION. A TIME OF FASTER INFLATION AND SLOWING GROWTH AND A FEELING WE ARE UNCERTAIN WHAT'S CAUSING INFLATION. TOM: AMAZON AND APPLE, THE ADVANTAGE OF GOING AFTER MICROSOFT.
MICROSOFT SIMPLY INCREDIBLE. DO YOU ANTICIPATE IN YOUR READING AN INCREDIBLE AFTERNOON FOR CUPERTINO? KAILEY: OUR ANALYSTS SAY MICROSOFT WAS SO STRONG ON THE CLOUD IT MAY BODE WELL FOR AMAZON BECAUSE IN TERMS OF CLOUD THEY HAVE A DUOPOLY IN SOME RESPECTS. TALKING ABOUT WHAT'S CAUSING INFLATION, SUPPLY CHAIN ISSUES COULD BE A PROBLEM FOR BOTH COMPANIES. IT'S NOT EVEN JUST A QUESTION OF GETTING MATERIALS, BUT OF LABOR PRESSURES. AND FOR APPLE, I DON'T KNOW IF YOU ORDERED AN IPHONE 13 THERE'S A GOOD CHANCE YOU HAVEN'T HAD IT YET. TOM:
THIS IS MY REALITY FOLKS, FOUR NEW IPHONES. HOW MANY DO I HAVE? ZERO. WE WILL GET TO LISA'S PREDICTIONS. NASDAQ ON A TEAR, UP 8.88% OFF THE BOTTOM. THE FIX STACK 16.83. THE YIELDS, WE COULD GO ALL DAY ON THE YIELDS. THE 30 YEAR BOND FROM TWO POINT
WHATEVER DOWN TO A STUNNING 1.95%, A LOT OF DYNAMICS THERE BETWEEN THE TWO YEAR AND THE 10 YEAR GOING 29 BASIS POINTS OVER THE LAST WEEK TO SEE THAT MOVEMENT. BRENT CRUDE OFF THREE DOLLARS. WE NEED TO BE BRIEFED. LISA, PUT US OUT OF OUR MISERY? LISA: PERHAPS PUT YOU IN NEW MISERY. A QUESTION OF THE DAY HEADING INTO NEXT WEEK WHICH IS HOW DO CENTRAL BANKS GLOBALLY GRAPPLE WITH MUCH HIGHER INFLATION, ACCELERATING INFLATION AT A TIME OF SLOWING GROWTH. NOT STALLING GROWTH, SLOWING
GROWTH. THIS IS THE CONUNDRUM AS WE TALK ABOUT INTENTIONAL INFLATIONARY PUSHES. IS IT THE FACT WE HAVE SO MUCH MONEY TOWARDS THE SUPPLY CHAIN DISRUPTION THAT KAYLEE WAS TALKING ABOUT.
WE GET THAT ECB RATE DECISION AND BASICALLY YOU ARE LOOKING AT INFLATIONARY RATES RESINS OF HIGHEST LEVELS AND 2008 IN THE EURO ZONE. HOWEVER THERE ARE STAGFLATION OR TYPES OF FEELING IN TERMS OF TRADE AND HOW MUCH THINGS ARE COSTING VERSUS THE LABOR MARKET STILL GOING OUT IN SOME AREAS. IN THE UNITED STATES A DIFFERENT STORY. THE EXPECTATIONS FOR A NEW SUB 300,000 PRINT. ANOTHER NEW LOWS SINCE THE START OF THE PANDEMIC.
WE ALSO GET THE GDP FOR THE THIRD QUARTER AT THE SAME TIME. I WANT TO POINT TO THE ATLANTA FED GDP FORECAST. THIS IS SHOCKING, THE IDEA WE ARE LOOKING AT THE POTENTIAL FOR 4% GROWTH THAT'S DOWN TO 0.2% GROWTH FOR THE FED TRACKER OF
POTENTIAL GDP. WHAT DOES THAT MEAN? HOW DOES THIS WORK WITH EARNINGS TO CONTINUE TO COME OUT BLOCKBUSTER AFTER BLOCKBUSTER AT A TIME WHERE AFTERMARKET WE GET APPLE AND AMAZON. IT'S INTERESTING TO SEE HOW MUCH WE'VE UNDERPERFORMED IS WE'VE GONE ON WITH THE YEAR. 13% RETURNS FOR APPLE. HOW MUCH OF A SUPPLY CHAIN DISRUPTION IS PRICED INTO APPLE AND HOW MUCH ARE PEOPLE LOOKING AT LABOR DISRUPTIONS FOR AMAZON? TOM: MANY ON THE SOUTHSIDE WAY OUT FRONT WITH PRICE TARGETS THAT ARE UP. LOOK FOR THE LOWS THIS AFTERNOON ON RADIO AND TELEVISION.
THIS IS REALLY TIMELY. THE HEAD OF FX ANALYSIS AT CITIGROUP, IT DOES NOT DO JUSTICE TO A LARGE AND HOLISTIC GLOBAL VIEW. I WANT TO START WITH A GREAT ESSAY FROM BLOOMBERG OPINION WHERE HE TALKS ABOUT A HAWKISH DAWN. ARE WE AT A HAWKISH DAWN? >> GREAT TO BE WITH YOU FROM LONDON. I DO THINK THAT WE ARE. MARKETS ARE GRAPPLING WITH WHAT IS ACCURATELY DESCRIBED AS A BIT OF A CHANGE PARTICULARLY FOR THE INFLATION OUTLOOK.
THAT IS INDUCING CENTRAL BANKS TO LOOK FOR SOME OPTIONALITY IF NOT NOW THAN IN THE MONTHS TO COME. WE WILL SEE THIS CONTINUE ACROSS CENTRAL BANKS. WE THINK THE ECB MAY BE A BIT OF AN EXCEPTION. LISA: PARTICULAR WHEN IT COMES TO INFLATION, DOES THAT MEAN IT'S PERSISTENTLY TRANSITORY AND SOME PEOPLE ARE EXPECTING IN PLACES LIKE CANADA AND THE UNITED STATES WHERE THE CENTRAL BANKS ARE EXPECTED TO HIKE MORE QUICKLY THAN THEY SAY THEY ARE? >> THERE'S A COMBINATION OF FACTORS. STILL RELATIVELY POSITIVE DEMAND, BUT ALSO GENERALLY HIGH LABOR MARKETS AND INFLATION EXPECTATIONS.
THIS IS SET TO LAST A LITTLE LONGER THAN WE EXPECTED NOT SO LONG AGO. IN THAT NARRATIVE WE'VE A LOT OF SYMPATHY WITH THE INFLATION SIDE AND WE HAVE AT LEAST SOME OPENERS ON THE IDEA THIS WILL COME DOWN A LITTLE BIT LOWER THAN MANY HAD PENCILED IN. KAILEY: WE KNOW THEY STUCK WITH HER TRANSITORY MESSAGING AND THIS SHALL PASS. WHEN YOU THINK ABOUT THE FACT OTHER CENTRAL BANKS ARE MOVING TOWARDS TIGHTENING AND AS YOU SAID THE ECB IS KIND OF AN OUTLIER, DOES THAT MEAN EURO WILL LAG? >> IN A NUTSHELL YES. WE THINK THE EURO IS CHALLENGED BY THE COMBINATION OF SLOWING GROWTH INCLUDING IN EUROPE BUT ALSO ULTIMATELY BECAUSE OF SENSITIVITY TO GLOBAL TRADE IN CHINESE GROWTH. WE HAVE A VERY SIGNIFICANT SHOCK FROM RISING ENERGY PRICES AND MAJOR ENERGY IMPORTER BOTH IN TERMS OF TRADE AND INCOMES IN THE EURO ZONE AS WELL.
IN AN ENVIRONMENT WHERE YIELDS ARE GOING HIGHER IN EUROPE IN GENERAL. THESE HAVE THE POTENTIAL TO PUT EURO-DOLLAR IN PARTICULAR. TOM: I WANT TO TALK ABOUT A PHILOSOPHY THAT'S BEEN OUT THERE FOR YEARS. THERE'S A LOT OF LATIN PHRASES THROWN AROUND. ALL YOU NEED TO KNOW IS IT'S BASICALLY A TONE OF AFTER-THE-FACT. TODAY AND FRANKLY ALL THE OTHERS , THEY'VE ALL GOT TO OPERATE AFTER-THE-FACT. THE BANK OF JAPAN PROVED YOU
CANNOT GET OUT FRONT. >> I DO THINK WHAT MAKES THE SITUATION DIFFICULT FOR THE GLOBAL CENTRAL BANKS IS IT'S NOT JUST INFLATION GOING UP BUT THE UNCERTAINTY IS REALLY MUCH HIGHER. IT'S REALLY THAT UNCERTAINTY STRIVING CENTRAL BANKS TO TRY AND BE A LITTLE BIT PREEMPTIVE OLD CORRECTIONS PRINT A LOT OF THE DEVELOPMENTS HAVE ALREADY TAKEN PLACE. BY THEIR OWN STANDARDS AFTER BRING FORWARD THEIR OPTIONS TO TIGHTEN POLICY. AT LEAST TWO HAVE THE
OPPORTUNITY. DOES THAT HAVE TO BE FOLLOWED THROUGH WITH? I WOULD SAY IT'S MORE LIKELY THAN NOT BUT FAR FROM CERTAIN. TOM: THANK YOU SO MUCH. THRILLED TO SAY GREG PETERS WILL JOIN US. BILL EMAILED TO GET HIM IN. HE WILL BE WITH US IN A BIT. IT IS ABSOLUTELY EXTRAORDINARY, LET ME EXPLAIN THIS SIMPLY PRINT GIVE US YOUR VIEW AND THE CONCEPTS I HAVE IS A TWO YEAR YIELD THAT'S UP EIGHT OR NINE BASIS POINTS AND A 30 YEAR BOND BETTING ON A SLOWING ECONOMY WITH DISINFLATION COMING IN LOWER BY A SOLID 20 BASIS POINTS AT THE SAME TIME.
THAT IS ORIGINAL ISN'T IT? IT'S A RARE OCCURRENCE. LISA: BOND TRADERS ARE MUCH MORE PESSIMISTIC BECAUSE THE ECONOMY IS NOT THE MARKET. THE IDEA THE FEDS HAD TO BE FORCED AS WE SAW THE BANK OF CANADA HAD, THE ECB HAS A DIFFERENT DYNAMIC THEY ARE DEALING WITH. BUT WHEN THEY HIKE RATES THEY WILL BE HIKING INTO THE SAME ENVIRONMENT WE LEFT OFF FOR THE PANDEMIC. THE IDEA OF AN AGING
DEMOGRAPHIC AND MORE DEAD. GROWTH KEEPING UP THIS ACCELERATION WE'VE SEEN IMMEDIATELY POST-PANDEMIC. THE QUESTION IS SLOWDOWN IS NOT RECESSION. HOW DO YOU PARSE OUT THE DIFFERENCE BETWEEN THE TWO? TOM: THE SLOWDOWN, WE ARE FOCUSING ON THE BOND MARKET BECAUSE THAT'S WHAT GLOBAL WALL STREET WANTS TO DO. THIS EARNINGS SEASON IS KILLER. KAILEY: THEY ARE KILLING IT AND IT'S A QUESTION OF HOW THEY HAVE BEEN ABLE TO EXERCISE THEIR PRICE POWER. BANK OF AMERICA PUTTING OUR
RESEARCH THAT MARK -- MARGINS ARE EXPANDING ON AVERAGE INCLUDING FOR STAPLES WHICH ALTER SIN -- WHICH ARE ULTRA SENSITIVE TO INFLATION. COMPANIES ARE PROVING THE STRATEGIES WRONG. TOM: WE ARE THRILLED KAILEY LEINZ IS WITH US. JONATHAN FERRO IS NOT WITH US. ARE WE GOING TO MISS HIS EXPERTISE ON THE ECB? MAYBE.
WE WILL TALK ABOUT THE DOW ALL DAY PAID STAY WITH US. READ PETER'S COMING UP. THIS IS BLOOMBERG. -- GREG PETERS COMING UP. THIS IS BLOOMBERG. >> PRESIDENT BIDEN HEADS TO THE CAPITAL TODAY TO BRIEF HOUSE DEMOCRATS ON HIS SO-CALLED SPENDING AGENDA BEFORE HE HEADS TO EUROPE. THE PRESIDENT -- HOUSE AND SENATE DEMOCRATS CAN'T AGREE ON HOW TO PAY FOR THE MEASURE. IN TAIWAN, THE PRESIDENT SAYS SHE'S FACED -- BELIEVES THE U.S. WILL COME TO THE ISLANDS
DEFENSIVE CHINA TRIES TO INVADE A. THE THREAT FROM CHINA IS INCREASING EVERY DAY. SHE ALSO CONFIRMS THE PRESENCE OF U.S. TROOPS IN TAIWAN. CNN SAYS THERE ARE FEWER THAN THREE DOZEN AMERICANS. THE PRICE OF EUROPEAN NATURAL GAS AND POWER FELL AFTER 5 -- AFTER SIGNS FROM VLADIMIR PUTIN THE RUSH WILL SEND MORE GAS TO THE CONTINENT NEXT MONTH. THEY ASKED HIM TO FULFILL IT --
TO FILL ITS GAS STORAGE FACILITIES IN EUROPE. HONG KONG IS PREPARING TO ROLLOUT A BOOSTER SHOT. HOT ON THE LIST, THE ELDERLY, THOSE AT HIGH RISK OF INFECTION AND PEOPLE WHO WERE VACCINATED WITH THE CHINA SINOVAC'S SHOT.
THEY ARE SEEN AS LESS EFFECTIVE THAN OTHER VACCINES. 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'M LAURA WRIGHT. THIS IS BLOOMBERG.
♪ >> NOW IS THE WRONG TIME TO RAISE TAXES ON ANYBODY WHETHER IT'S MILLIONAIRES OR AVERAGE CONSUMERS. THE PROBLEM IS IT PROBABLY WON'T RAISE MUCH MONEY SINCE A LOT OF THIS MONEY WILL BE GIVEN AWAY TO FOUNDATIONS SO IT WON'T BE TAXED. THE OTHER ISSUE IS PROBABLY UNCONSTITUTIONAL AND THE THIRD ISSUE IS IT CREATES VERY BAD INCENTIVES. TOM:
THE FORMER SECRETARY OF THE TREASURY YESTERDAY. I THOUGHT IT WAS QUITE SOMETHING TO LISTEN TO SECRETARY MNUCHIN TALK ABOUT SOMETHING THAT SIX HOURS LATER SEEM TO EVAPORATE OFF THE LANDSCAPE. JONATHAN FERRO ON SABBATICAL. BEGINNING HIS SABBATICAL. WHAT DO YOU THINK LISA? LISA: DEFINITELY CAPRI. HE NEEDS IT.
TOM: HE GOT THE GULFSTREAM. PAGER AND SULLIVAN IN THE WASHINGTON POST. I GUESS DRIVING FOR THE CONVERSATION. THIS WAS NAILED YESTERDAY. A REVISED FRAMEWORK DECONSTRUCT FOR US NOW THIS NEW PHRASE, REVISED FRAMEWORK.
>> DEMOCRATS ARE TRYING TO COME TO AN AGREEMENT. THEY WANT TO COME TO AN AGREEMENT TODAY, PREFERABLY BY THIS MORNING WHEN THE PRESIDENT IS SUPPOSED TO SPEAK TO HOUSE DEMOCRATS ON A LIST OF WHAT THEY WANT TO PUT IN THE BILL WHICH IS AN IMPORTANT PART. THAT MEANS SETTLING ON WHAT THE TAX MEASURES WILL BE, THAT WOULD ALSO MEAN THEY HAVE TO CALCULATE HOW MUCH REVENUE THAT GETS THEM AND WHAT THEY CAN FIT IN HERE.
THE KEY QUESTIONS RIGHT NOW ARE ONE OF THE TAX MEASURES THEY CAN AGREE TO. NOT GOOD ON THE SO-CALLED MILLIONAIRES TAX. AFTER THAT THEY CAN FIGURE OUT AND IT DOES SOUND LIKE THE PAID LEAVE PROVISION IS OUT. BUT IT WILL BE ON THE BASICS AND NOT SOME FINAL BILL READY FOR A VOTE. >> RIGHT NOW AS THE PRESIDENT GOES TO ROME, ARE THE WHIPS WHIPPING THIS MORNING? ARE THEY COUNTING VOTES? JACK: THERE IS NOTHING TO WHIP SPECIFICALLY. WE'VE BEEN IN A MONTH LONG PROCESS WHERE THEY ARE FIGURING OUT IF THERE ARE ANY OBJECTIONS. DEMOCRATS HAVE SAID ALMOST
ANYONE AMONG THEM CAN BE THE JOE MANCHIN TYPE FIGURE AND HOLD THIS UP IF THEY WANT TO BE. IT'S LESS A WHIP COUNT AND RUNNING THINGS BY THE KEY MEMBERS INCLUDING JOE MANCHIN, NOW SENATOR CINEMA HAS PIVOTAL VIEWS ON THE TAX MEASURES. ALSO THEY ARE RUNNING THIS BY OBJECTIONS. THERE WAS OPPOSITION BY RICHARD NEAL TO THE BILLIONAIRES TAX SO THEY ARE RUNNING THIS LIST BY EVERYONE.
THEY ARE NOT TO A TRUE WHIP COUNT JUST YET BECAUSE THERE IS NO BILL. >> BASICALLY WE ARE TALKING IN THEORY. KYRSTEN SINEMA GAVE A WISH LIST OR A LIST OF PROVISIONS OF TAX MEASURES SHE WOULD BE COMFORTABLE WITH. SHE SAID IF YOU COULD SATISFY THESE LET'S TALK.
WHAT WAS ON THERE YOU THINK HAS THE GREATEST STICKING POWER AS WE GET PERHAPS A DRAFT OF THE BILL. JACK: THE KEY WAS THE 15% CORPORATE MINIMUM RATE I BELIEVE ACCORDING TO LAWMAKERS WHAT THEY ARE TALKING ABOUT IS FOR CORPORATIONS WITH $1 BILLION OR MORE IN PROFITS, SHE CAN GET ON BOARD WITH THAT. IT'S EXPECTED TO RAISE A FEW HUNDRED BILLION DOLLARS OVER THE COURSE OF A DECADE. SHE APPEARED TO BE OK WITH THIS BILLIONAIRES TAX ON UNREALIZED CAPITAL GAINS THAT GOT OPPOSITION FROM ELSEWHERE. THIS WAS NOT A BILL SO THERE HASN'T BEEN A PROPOSAL OUT. SOME SORT OF 3% SURCHARGE TAX ON WEALTHY EARNERS THAT WOULD BE DIFFERENT FROM THE RAISING THE HIGHEST INCOME TAX RATE BUT ADDING SOME BEYOND A CERTAIN THRESHOLD ABOUT $1 MILLION.
THAT HASN'T TURNED INTO A CONCRETE PROPOSAL YET? -- YET. KAILEY: PROGRESSIVES IN THE HOUSE WERE MAKING A LOT OF NOISE AND I FEEL LIKE THEY HAVE GOTTEN QUIETER EVEN THOUGH THE SOCIAL SPENDING PIZZA THEIR AGENDA SEEMS TO BE BROUGHT DOWN. >> THEY HAVE HAD THEIR SAY ON WHAT THEY WANT TO BE IN THE BILL ON THE RECONCILIATION BILL ON THE FRONT END AND REALLY HELPED SHAPE THAT. THAT'S WHY THIS IS GETTING FUNNELED THROUGH THE LENS OF THE MODERATES.
AGGRESSIVE HAVE BEEN VERY VOCAL ON THE STRATEGY OF HOW TO PASS THIS BECAUSE LEADERSHIP IT SEEMS WOULD LIKE TO PASS THE SENATE PASSED INFRASTRUCTURE BILL THROUGH THE HOUSE IF THEY HAD THE VOTES. BUT THERE IS OPPOSITION FROM THE PROGRESSIVES TO DO THAT UNTIL THEY ACTUALLY HAVE A BILL THEY CAN VOTE ON ON THE SOCIAL TAX AND SPENDING MEASURES. THERE TRY TO HOLD UP THE INFRASTRUCTURE MEASURE UNTIL THEY HAVE A REAL CONCRETE DEAL. TOM: THANK YOU SO MUCH.
AN EVENTFUL THURSDAY. WE NEED TO GET BACK TO THE BOND MARKET. THE SURVEILLANCE ROW THIS MORNING.
WE NEED TO RESET ON THE BOND MARKET. LET ME GIVE YOU SOME DATA. THE TWO YEAR YIELD, .55%. THE 30 YEAR BOND WELL UNDER 2%. FOR THOSE ON THE TEETER TOTTER, SHORT-TERM YIELDS UP. LONG-TERM YIELDS DOWN. LISA: IT SIGNALS A SLOWER GROWTH AND THE ECONOMY IS HEADING TOWARDS A ROUGH PATCH THAT PERHAPS PEOPLE ARE NOT PRICING IN. WHY ARE BOND -- PEOPLE IN THE BOND MARKET -- YOU ASK THIS OF ME EVERY DAY. AT THE SAME TIME PEOPLE SAY THE
ECONOMY IS NOT THE MARKET. THEN WHAT IS THE TRUE REFLECTION GOING ON. TOM: I'M GETTING THE WATCHING FOX SPORTS 12 NEW SATURDAY. BEST FOOTBALL GAME IN COLLEGE FOOTBALL. NOBODY IN THE STADIUM, A 100,000 PEOPLE, NO ONE IS AS -- AS WATCHING SURVEILLANCE. KAILEY: THE POINT ABOUT WHETHER IT SENDING SIGNALS IS A GOOD ONE. IT'S COME UP OVER THE COURSE OF
THE PANDEMIC ERA. THE EQUITY MARKET HASN'T FIGURED OUT YET. OR THEY FOCUS ON EARNINGS GROWTH AND COMPANIES RESILIENCE IN THE FACE OF SUPPLY CHAIN PRESSURES. I WOULD ALSO NOTE A LOT OF THE MOVEMENT IN THE BOND MARKET HAS COME FROM HIGHER INFLATION EXPECTATIONS.
REAL YIELDS ARE STILL VERY NEGATIVE. WE STILL HAVE DEEPLY NEGATIVE REAL YIELDS, CAN RISK ASSETS TO OK? TOM: WE WALKED THROUGH THE YIELD REAL -- REAL YIELDS EQUATION. WHO IS DOING THE REAL YIELDS TOMORROW? >> I THINK TAYLOR IS PAID -- IS DOING IT TOM: NOMINAL YIELD MINUS INFLATION IS THE REAL YIELD. THE RESIDUAL.
WHICH OF THOSE THREE THINGS MATTERS, NOMINAL, INFLATION OR RESIDUAL. LISA: IT ALL MATTERS DEEPLY FOR ALL THOSE PEOPLE IN THE STADIUM IT WILL BE FEELING PESSIMISTIC. I WILL SAY THIS, THE BOTTOM LINE IS THIS.
CAN WE CONTINUE TO MAINTAIN GROWTH DESPITE THE FACT INFLATION IS GOING UP. THESE ARE THE QUESTIONS WE NEED TO ANSWER. TOM: IT IS INTERESTING AND WE WILL DO MORE DATA CHECKS. I WANT TO EMPHASIZE FOR THOSE
HUNG UP ON EQUITIES THE BOND MARKET TODAY ABSOLUTELY FASCINATING. DOW FUTURES UP 24. THIS IS BLOOMBERG. TOM: "BLOOMBERG SURVEILLANCE." IT IS AN EVENTFUL THURSDAY. A WONDERFUL TREND OF JOB CREATION IN AMERICA.
WE ARE LOOKING AT THE BOND MARKET. REALLY EXTRAORDINARY RIGHT NOW. I'VE GOT TO GO TO THE TWO YEAR YIELD. TOM YOU ARE NOT QUOTING THE TWO-YEAR ENOUGH.
>> HE IS NOT WRONG. TOM: RIGHT NOW IN WHAT WE ARE DOING FOR BOND MARKET SHENANIGANS IS REALLY LOOKING AT THE TECH JUGGERNAUT AND HOW IT FOLDS OVER INTO THE REST OF THE STOCK MARKET. KATRINA DUDLEY AND FRANKLIN WAS FEDERATE -- ICONIC FOR HER ANALYSIS OF TECHNOLOGY.
THRILLED SHE COULD JOIN US TODAY. I WANT TO TALK ABOUT SOMETHING IS BASIC, SEE IF THEY WANT TO PERSIST OF FREE CASH FLOW. DID WE MASSIVELY MISJUDGE THE GENERATION OF CASH AND THE USE OF IT FOR SHAREHOLDERS? >> IS ONE OF THE KEY METRICS YOU HAVE TO LOOK AT AT A COMPANY IN TERMS OF ASSESSING THE STABILITY OR SUSTAINABILITY OF THE COMPETITIVE DAMAGE. WE SPEND A LOT OF TIME LOOKING AT CASH. WE LOOK AT WHAT ARE ALL THE PEOPLE THAT NEED TO GET PAID, IS THERE A RESTRUCTURING CHARGE. SO MANY PARTS OF THAT STATEMENT THAT PEOPLE JUST COMPLETELY IGNORE. I THINK PEOPLE GET CONFUSED
ABOUT THE INCOME NUMBER AND FORGET ABOUT WHETHER IT'S A RESILIENT. >> KATRINA HAS READ SIX VOLUMES OF IT. MOVE UP THE INCOME STATEMENT. CAN YOU PARTITION A TECH JUGGERNAUT OVER THE REST OF AMERICAN INDUSTRY.
DO WE SIMPLY UNDERESTIMATE THIS GREAT BULL MARKET THE ABILITY TO MAKE PROFIT? >> I THINK IN A TECH BULL MARKET, WOULD PEOPLE ARE FOCUSED ON IS THE SUSTAINABILITY OF THAT OVER A LONG PERIOD OF TIME. FOCUSING ON THE GOAL THAT INTEREST RATES AND INFLATION WILL PLAY. A NUMBER OF THESE TECH STOCKS ARE TRADING ON OR YOU OF THE STOCKS THAT ARE NOT TRADING ON EARNINGS, INTEREST RATES BECOME SOMETHING THAT'S VERY SENSITIVE BECAUSE ON THE VALUATION WE ARE LOOKING TO ADD VALUES. LISA: THIS GOES TO THE HEART OF THE QUESTION OF U.S. VERSUS EUROPE WITH THERE IS GREATER TECH DOMINANCE IN THE UNITED STATES VERSUS EUROPE AND THERE IS ALSO A FEELING THERE IS A DIFFERENT MORE STAGFLATION LIKE HEADWIND FACING EUROPE. IS THE CASH PERSISTENCY
DIFFERENT THAN THAT OF THE U.S.? >> EUROPE DOES NOT HAVE THE SAME TECHNOLOGY COMPANIES BUT IT DOES HAVE A NUMBER OF VERY STRONG COMPANIES THERE. S.A.P. IS ANOTHER BIG JUGGERNAUT. SO I THINK EUROPE DOES HAVE A GREAT CONSTITUTION OF TECHNOLOGY COMPANIES THAT'S NOT THE DOMINANT FORCE OR DOMINANT PERCENTAGE OF THE MARKETS. WHAT THEY DO HAVE IS LUXURY
STOCKS. WHEN YOU THINK OF ALL THOSE VERY STRONG BRANDS AND THAT THE TECHNOLOGY EQUIVALENT OF EUROPE. I WOULD SAY THOSE WERE A LOT LONGER LONGEVITY THAT HAVE BEEN AROUND FOR MULTIPLE CENTURIES. AND SO THEIR ABILITY TO GENERATE FREE CASH FLOW HAS BEEN TESTED TIME AND AGAIN IN THE STABILITY OF THOSE FRANCHISES IS SOMETHING THAT YOU AS AN INVESTOR CAN PUT AWAY AND YOU CAN WAKE UP IN THE STOCK WILL BE THERE.
>> ARE THEY UNDERESTIMATING IT -- THE POWER OF MORE DOVISH ECB WHEN IT COMES TO EQUITY PERFORMANCE. >> YOU OBVIOUSLY HAVE HAD A LOT OF HAWKISH -- COMING OUT OF THE BOE. PEOPLE ARE SAYING THERE IS HAWKISH PRESSURE ON THE ECB. ON THE DOVISH SIDE WE HAD THE BANK LENDING SURVEY WHICH CAME OUT RECENTLY AND SHOWS INCREASING PULLBACK IN LENDING AND A TIGHTENING OF CREDIT STANDARDS.
YOU CAN FIND THAT WITH THE FULL RISING NOMINAL YIELDS. WE ARE STARTING TO SEE SIGNS OF TIGHTENING. A NUMBER OF PROGRAMS THE ECB THE BEEN GOING UNTIL MARCH OF NEXT YEAR, EXPECTING AN ANNOUNCEMENT IN DECEMBER FROM THE ECB. YOU GET THAT DECEMBER MEETING WHICH IS THERE -- WHERE THERE IS A BIG ANNOUNCEMENT. LET'S COMPARE AND CONTRAST EUROPE AND THE UNITED STATES. THE INFLATION CONCERNS IN THE U.S.
ARE MUCH GREATER THAN THEY ARE OVER IN EUROPE. THE SUPPLY CHAIN PRESSURES EXIST IN EUROPE ENDED ON THING WE'VE SEEN THE SAME TYPE OF TIGHTNESS IN THE SUPPLY CHAIN IN EUROPE. THE SECOND THING IS THE LABOR MARKET THE OTHER ELEMENT OF THE INFLATION EQUATION. THE LABOR MARKET HAS BEEN QUITE
SLUGGISH. THEY WERE ASKING FOR 5% RATE AND IT LOOKS LIKE IT MAY NOT GO THROUGH. YOU'VE GOT A LOT LESS PRESSURE IN THE ECB, THE ECONOMY CAME OUT BEHIND THE U.S.. THEY WILL WATCH WITH THE FED IS DOING. >> TALKING OF INFLATION INTO LABOR PRESSURES, WE HAVE CATERPILLAR EARNINGS CROSSING THE TERMINAL.
THEY BEAT IT BY 2%. I'M LOOKING THROUGH THE PRESS RELEASE AND THEY TALK ABOUT MANUFACTURING COST BECAUSE OF HIGHER LABOR COSTS, HIGHER MATERIAL COSTS. THEY WERE ABLE TO OFFSET THAT OR WITHSTAND IT TO SOME DEGREE.
HAVE WE GROSSLY UNDERESTIMATED THE ABILITY OF COMPANIES TO DO THAT? >> I THINK THAT IS A COMPANY BY COMPANY DECISION. YOU HAVE RISING COSTS ON ONE SIDE AND I THINK WE ARE OVERLY FOCUSED ON THOSE RISING COSTS. COMPANIES CAN HANDLE RISING COSTS. I THINK THAT'S WHAT YOU ARE SEEING WITH CATERPILLAR. THEY HAD THOSE RISING COSTS. WHAT CONSTRUCTION WORKER
DOESN'T WANT TO HAVE A YELLOW PIECE OF EQUIPMENT. EXACTLY. PEOPLE TATTOOED CATERPILLAR DOWN THERE LEG. WE HAVE SEEN THIS AS AN ICONIC BRAND NAME.
THAT'S THE POWER OF THE BRAND GIVING YOU THE POWER OF PRICING. >> BE CAREFUL OR TOM IS GOING TO ROLL UP TO BLOOMBERG HEADQUARTERS. TOM: I'M NOT. WE ARE MOVING THE TREES AROUND. >> NOW I AM DISTRACTED BY THAT IMAGE IN MY HEAD. [LAUGHTER] >> TALKING ABOUT MAYBE SUPPLY CHAIN BOTTLENECKS EASING.
WE HEARD FROM AUTOMAKERS AS WELL KIND OF SAYING THE WORST OF IT IS OVER. CANNOT EXPAND IF SUPPLY CHAIN ISSUES ARE NO LONGER AN ISSUE, DOES THAT JUST MEAN THE BULL MARKET ROLLS ON AND WE CLIMB HIGHER AND HIGHER ON THE BASIS OF EARNINGS EVEN IF GROWTH STARTS TO SLOW? >> THE MARKET SHOULD CONTINUE TO APPRECIATE BECAUSE IT'S VERY MUCH A REFLECTION ON THE UNDERLYING EARNINGS OF THE COMPANY. IN TERMS OF THE SUPPLY CHAIN I THINK WHAT WE ARE SEEING IN -- IS THE SUPPLY CHAIN IS STARTED TO GET MORE ROOM IN IT. BUT THERE ARE A NUMBER OF POSSIBLE WEEKS OF TIGHTNESS. THINK ABOUT LOGISTICS.
WE USE TO WHEN WE WERE SHORT ON COMPONENTS TO MAKE THEM IN THE FACTORY AND THAT WOULD SPEED THEM UP. WE DON'T HAVE THE ABILITY TO DO THAT. I THINK SOME OF THE LOGISTICS WILL BE HIGHER. I THINK SOME OF THE COMPONENT PRICES, WE'VE BEEN ABLE TO BUILD A BUFFER INTO IT. THE QUESTION IS IF YOU GOT COMPANIES THAT HAVE GONE AFTER THE PRICING INFLATION YOU DOES NEED TO COVER BY HIGHER COSTS. THE COMPANIES GET PUSHED BACK ON THE OTHERS. SO YOU REALLY HAVE TO
UNDERSTAND THE MOST PRICE INCREASES. IF THEY ARE NOT STICKY YOU DON'T GET THE EARNINGS GROWTH. TOM: THANK YOU FOR THAT, KATRINA. YOU LOOK AT CATERPILLAR. 2020 IS SUCH AN APPARITION BECAUSE OF THE PANDEMIC. 2019, FREE CASH FLOW WAS ABOUT $4 BILLION.
NOW IT IS MODELED NEXT YEAR AT $6 BILLION AND THAT'S A PERSISTENCY OF FREE CASH FLOW WE'VE BEEN TALKING ABOUT. KAILEY: AND A QUESTION OF DEMAND. DEMAND FOR CATERPILLAR PRODUCTS HE'S REALLY STRONG. IT'S NOT TO SAY THEY AREN'T DEALING WITH SUPPLY CHAIN CHALLENGES. THE COMPANY ACKNOWLEDGING THAT IN THEIR PRESS RELEASE. BUT ON THE DEMAND SIDE, IT IS SO ROBUST THEY ARE ABLE TO GENERATE SALES AND OFFSET THAT QUITE A BIT. IT IS A QUESTION OF DEMAND AND
ASKING THE QUESTION WILL SUPPLY BE ABLE TO MEET IT. TOM: THIS GOES BACK TO DEERFIELD, ILLINOIS, 97,000 PEOPLE AND I'M SORRY, THIS IS NOT APPLE OR AMAZON, YOU DROP A CAT PIECE, IT FALLS ON YOUR FOOT, IT HURTS. LISA: AND YOU HAVE A LOT OF EXPERIENCE AS YOU DRIVE YOUR TRACTOR AROUND WITH YOUR TATTOO OF CATERPILLAR DOWN YOUR LEG. THERE IS AN ISSUE OF THE REVENGE OF THE OLD INDUSTRIALS. YOU WANT TO THINK SO YOU HAVE TO BUY STUFF TO BUILD THEM. I WONDER WHAT IT MEANS FOR AN
ECONOMY IF THEY ARE ABLE TO PASS ALONG THE ENTIRE PRICE INCREASE AND THEN SOME TO THE CONSUMER. WHAT ARE WE LEFT WITH? ARE WE IN A BETTER ECONOMY OR JUST A RESET TO HIGHER PRICES AND REVENUES ARE THAT MUCH BIGGER? TOM: I'M GOOD TO GO BACK TO REBECCA YESTERDAY WHO HINGED IT ALL ON THE LABOR ECONOMY. WILL WE SEE RISING WAGES IN THE PICTURE? THAT IS IN DOUBT. >> WILL IT KEEP UP WITH THE PERSISTENCY OF MARGINS AND RIGHT NOW THE ANSWER IS NO. WHAT TRIGGERS THE RESET? ARE WE SEEING A SHIFT IN EARNINGS WILL BE GO BACK TO THE SAME REGIME. TOM: WE WOULD HAVE MISSED THAT ANNOUNCEMENT WITHOUT KAILEY LEINZ.
DOW FUTURES UP 53, THE VIX 16.7 TWO. FOCUS, THE BOND MARKET. THIS IS BLOOMBERG. >> WITH THE FIRST WORD NEWS, I'M LAURA WRIGHT.
ON CAPITOL HILL, THE HEAD OF THE HOUSE -- COMMITTEE SAYS A PROPOSAL FOR A BILLIONAIRE TAX WILL NOT BE PART OF NEGOTIATIONS ON PRESIDENT BIDEN'S SOCIAL SPENDING BILL. THE WAYS AND MEANS CHAIR SAYS THE HOUSE IS DISCUSSING WITH THE SENATE A BRIEF -- FOR THOSE EARNING MORE THAN $10 MILLION. SENATOR RON WYDEN INSISTS IT IS AHEAD. TENSIONS OVER FISHING RIGHTS KEEP RISING.
THE BRITISH GOVERNMENT HIT BACK AS FRANCE BROUGHT ITS OWN RETALIATORY MEASURES. FRENCH AUTHORITIES SAY THEY MAY DISRUPT THE FLOW OF TRADE WITH THE U.K. AND ENERGY SUPPLIES TO THE CHANNEL ISLAND DUE TO A LACK OF FISHING LICENSES GIVEN TO FRENCH BOATS. -- INCREASED ITS EARNINGS AND CASH FLOW TARGETS BY THE EUROPEAN AIRPLANE MAKER IS ON A RECOVERY IN AIR TRAVEL PER AIRBUS IS HOPING TO RALLY TO SUPPORT A SIGNIFICANT INCREASE IN JETLINER PRODUCTION. SHALL HAS SET UP A MORE AMBITIOUS TARGET FOR CUTTING GREENHOUSE GAS EMISSIONS FROM ITS OPERATIONS.
THE ANNOUNCEMENT CAME HOURS AFTER WORD ACTIVIST INVESTOR DAN LOW HAD TAKEN A $750 MILLION STAKE IN SHALL AND IS PUSHING FOR A BREAKUP. THE COMPANY REPORTED THIRD-QUARTER PROFITS WHICH FELL SHORT OF EXPECTATIONS. 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'M LAURA WRIGHT.
THIS IS BLOOMBERG. ♪ >> SURROUNDING THEIR CHILDREN WITH PEOPLE WHO ARE VACCINATED HELPS PROTECT THEM AGAINST COVID-19. IT IS IMPORTANT WE CONTINUE TO VACCINATE AS MANY ADULTS AS POSSIBLE TO PROVIDE PROTECTION TO CHILDREN, ESPECIALLY THOSE WHO MAY NOT BE ELIGIBLE FOR VACCINATION THEMSELVES.
TOM: THE DIRECTOR AT THE CDC, WE THANK HER FOR THOSE COMMENTS. THIS IS JUST BREAKING NOW. PFIZER BIONTECH TO PROVIDE THE U.S. WITH 50 MILLION PEDIATRIC DOSES. A STUNNING STATISTIC WHEN YOU LOOK AT THE POPULATION OF 300 MILLION PLUS AND BEGINS THE CONVERSATION FOR NOVEMBER OF THIS YEAR. WE GET A RECALIBRATION ON THIS PANDEMIC WITH DAVID.
DR. DOUGHTY, THANK YOU FOR JOINING US. WHERE WILL WE BE DECEMBER 1? >> A GREAT QUESTION. I THINK WE ARE SEEING CASES GO DOWN RIGHT NOW, SO THERE IS REASON TO BELIEVE THAT THEY MIGHT CONTINUE TO GO DOWN. WE MIGHT BE IN A BETTER PLACE THAN WE ARE NOW. THAT BEING SAID WE ARE STARTING TO SEE CASES RISING EUROPE. MAYBE WE WILL SEE A DIP AND
THEN A SWING BACK UP. I WOULDN'T RULE THAT OUT EITHER. TOM: I LOOK AT THE DEATH STATISTIC IN ONE OF THE PUBLICATIONS AND I FRANKLY SEE BETTER NEWSPRINT WE ARE MIGRATING DOWN. AS YOU SEE THAT GLIDE PATH, WHERE DOES IT CLICK IN THAT WE ARE BEYOND THE PANDEMIC? >> I THINK WE SHOULD BE ASKING OURSELVES THAT QUESTION. 1400 DEATHS IS STILL A LOT HIGHER THAN WHERE WE WERE BACK IN JUNE OR JULY FOR EXAMPLE. BUT I DO THINK WE SHOULD ASK OURSELVES AT WHAT POINT DO WE SAY IT IS TIME TO CONSIDER OURSELVES HAVING TURNED A CORNER. CASES, PROBABLY NOT YET. BUT DEATHS ARE MOVING IN THE RIGHT DIRECTION ESPECIALLY BECAUSE THE VACCINES ARE GETTING OUT TO MORE PEOPLE. LISA:
I FEEL FRUSTRATION RISING WITH PUBLIC OFFICIALS THAT WE ARE STILL TALKING ABOUT THIS AND THAT SONY PEOPLE AREN'T TAKING THE VACCINE. -- SO MANY PEOPLE AREN'T TAKING THE VACCINE. TOMORROW IS THE DEADLINE FOR NEW YORK WORKERS TO GET INOCULATED. WE SAW PUSHBACK SAYING YOU WILL BE SHORT. ARE THESE MANDATES WORKING? >> THESE MANDATES ARE WORKING. PEOPLE ARE GETTING VACCINATED
BECAUSE THEY WOULD RATHER GET VACCINATED THEN LOSE THEIR JOBS. I THINK EVERY CITY AND COMPANY AS TO MAKE CALCULATIONS ABOUT ARE YOU WILLING TO DEAL WITH HAVING FEWER STAFF AROUND AT THE EXPENSE OF HAVING A SAFER WORKPLACE. KAILEY: IS THIS THE PRECEDENT? TALK ABOUT THIS FROM THE PEDIATRIC INOCULATIONS. YOU HAVE THE GOVERNOR OF NEW YORK STATE SAYING PERHAPS WE OUGHT TO MANDATE THESE FOR SCHOOLS THE SAME WAY WE DO TUBERCULOSIS AND MMR. IS THIS
THE ROAD AHEAD? IS THIS THE NEW NORMAL THAT WE HAVE TO EXPECT TO GET TO OR IS THIS SOMETHING MORE AKIN TO THE FLU? >> I THINK FOR KIDS THIS MAY BE SOMETHING DIFFERENT. KIDS ARE NOT PEOPLE WHO ARE GETTING AS SICK AS ADULTS ARE. I DO THINK THE RISK-BENEFIT RATIO IS PROBABLY POSITIVE FOR KIDS. BUT IS IT SO POSITIVE IT WOULD WARRANT BROAD MANDATES, I DON'T KNOW. TOM:
GOING BACK TO MY CHILDHOOD AND THE RAGING DEBATE AT THE DINING ROOM TABLE OVER MMR. I GET THE CHILDREN AREN'T GOING TO DIE BUT ISN'T THERE A SOCIETAL CONSTRUCT THAT WE WANT EVERYONE VACCINATED SO THERE IS AN INTERDEPENDENCY AND EXILE GENESIS SOLUTION. >> YES. I THINK THAT'S REASONABLE.
I THINK WE NEED MORE DATA TO SEE HOW SAFE THESE VACCINES ARE IN KIDS AND HOW MUCH OF THAT VERSUS THE BENEFIT WE GET BEFORE WE TALK ABOUT MANDATES. I THINK FOR KIDS AT LEAST. I THINK THEY'RE AT A PLACE WHERE IT'S REASONABLE FOR KIDS TO GET THE SHOT AND IT'S GOING TO BE COMING OUT FOR FIVE TO 11 YEARS OLD. I AM NOT SURE WHERE TO PUT WHERE WE ARE AT MANDATING THESE VACCINES, ESPECIALLY SINCE WE DON'T HAVE SOMETHING FOR THREE OR -- 04-YEAR-OLDS. TOM: THANK YOU SO MUCH. THAT'S A HALLMARK HEADLINE AS WE GO BACK 18 MONTHS. LISA: TO ME, THE DISAGREEMENT AMONG HEALTH OFFICIALS, AMONGST PUBLIC OFFICIALS ABOUT WHAT TO DO WITH THE PEDIATRIC VACCINES, YOU NAILED IT WHEN YOU SAID ULTIMATELY IT'S A SOCIETAL ISSUE OF TRYING TO REDUCE TRANSMISSION OR ARE WE DEALING WITH SOMETHING THAT HASN'T BEEN PROVEN WHICH THE DOCTOR WAS SAYING WE WANT MORE DATA AND THE THRESHOLDS TO BE HIGHER BECAUSE THEY DON'T GET AS SICK. ESPECIALLY AS SO MANY ADULTS
HAVEN'T BEEN VACCINATED AND ARE STILL SUSCEPTIBLE. TOM: LET'S DO THIS, LET'S REFRAME WITH FUTURES ADVANCING UP 12. NASDAQ FUTURES UP A SOLID HALF OF A PERCENT.
15,000 669 RIGHT NOW. WE HAVE TO REFRAME ON THE BOND MARKET. I'M GETTING GO TO THE BENCHMARK WHICH WE TALKED ABOUT MAYBE A PIVOT POINT OF 1.54% ON THE 10 YEAR YIELD.
>> WHAT DO WE PAY ATTENTION TO AND A LOT OF PEOPLE ARE PAYING ATTENTION TO THE REAL YIELDS WHICH YOU'VE BEEN MENTIONING. THE IDEA IT'S GOING MORE NEGATIVE OR THAN THEY ARE THE NOMINAL YIELDS. THIS INDICATES THE PESSIMISM. A LOT OF PEOPLE THEY SAY THE BEARS, THEY GET CRUSHED AGAIN AND AGAIN. BUT IS THE UNDERLYING ECONOMY REPRESENTING THE ENTHUSIASM WE ARE SEEING IN EQUITIES? IS IT SOMETHING WE HAVE TO PAY ATTENTION TO FOR POLICY? >> A FIRST LOOK AT Q3 GDP TODAY THAT WORKING SURVEY NUMBER 2.6% IN NON--- ANNUAL LYSING. -- ANNUALIZING. DIANE TALKING ABOUT NET EXPORTS AND IMPORTS.
EXPORTS DISAPPEAR, THAT REALLY DETRACTS FROM GDP. KAILEY: THAT WILL BE IMPORTANT FOR THE CURRENT ECONOMIC ENVIRONMENT. I WOULD ARGUE WHAT'S HAPPENING IN THE BOND MARKETS IS A REFLECTION OF GROWTH FURTHER DOWN THE LINE AND WE ARE DEALING WITH LOCAL CENTRAL BANKS BECAUSE OF HIGHER INFLATION PRESSURES AND ENERGY SHORTAGES WILL BE PRESSURED TO ACT SOONER AND PERHAPS MORE QUICKLY THAN THEY WOULD HAVE OTHERWISE. ARE THEY GETTING PRESSURE INTO HIKING AND MAKING POLICY TO TIGHT TOO SOON. IS THAT GOING TO CHOKE OFF GROWTH DOWN THE LINE. TOM:
I MISS JONATHAN THIS MORNING. THE FIRST TIME I SAW HIM HE WAS ON THE LAWN IN FRONT OF THE OLD -- BUILDING AND I THOUGHT WHAT IS THAT. THIS WAS A FEW YEARS BACK. THE ECB MEETING TODAY, IT IS NOT A SNOOZE FAST, IT IS NOT ALMOST WHAT SHE SAYS, BUT WHAT SHE DOESN'T SAY. LISA: HOW MUCH SHE EITHER PUSHES BACK ON THE ASSUMPTIONS BEING MADE IN THE MARKETS AND A CURTAILING OF THE BOND PURCHASES OR NOT. WHAT DOES SHE DO WITH THAT EXPECTATION? I'M STRUCK BY THE DIFFERENT NATURE OF INFLATION OVER IN EUROPE. THIS MUCH MORE LEEWAY TO BE
DOVISH. HOW MUCH CAN THEY DIVERGE FROM THE REST OF THE CENTRAL BANKING COMPLEX. TOM: IT IS JUST REALLY DIFFERENT FOR EUROPE AND FRANKLY THE UNITED KINGDOM AS WELL. THE ECB MEETING COMING UP. WE HAVE FOR YOU THAT ANNOUNCEMENT COMING UP. AND THEN AN IMPORTANT PRESS CONFERENCE.
YOU SEE THAT ON BLOOMBERG TELEVISION WORLDWIDE. FUTURES ADVANCE 14. >> WE DO HAVE THAT WITH THE LAST ROUND OF STIMULUS CHECKS. >> EQUITIES RESPOND GENERALLY POSITIVE UNTIL IT HITS A CERTAIN LEVEL. >> MARKETS BECOME MORE CHALLENGE GOING FORWARD.
>> DON'T MISS OUT ON THE BIGGER PICTURE. >> THIS IS "BLOOMBERG SURVEILLANCE." TOM: GOOD MORNING EVERYONE. BLOOMBERG SURVEILLANCE, OUR STUDIOS IN NEW YORK ON RADIO AND TELEVISION LISA, HE HAS A FRAMEWORK TO DISCUSS. LISA: WE ARE GOING TO YOUR ABOUT THE
FRAMEWORK PERHAPS THEY HAVE AGREED UPON. WHAT THIS MEANS TO ME IS THE QUESTION, DOES THE FRAMEWORK GET TO THE VOTE FOR THE BIPARTISAN INFRASTRUCTURE PLAN? TO ME, THAT IS THE BIGGEST QUESTION BECAUSE IT IS THE MOST CONCRETE THING THAT COULD GET DONE IN NEAR-TERM. TOM: THAT IS A CONCRETE THING, NO PUN INTENDED. LISA: BA DUM BUM. TOM: THANK YOU. FERRO WOULDN'T HAVE DONE THAT. WE GET TO THE MEETING IN ONE HOUR, THE IDEA OF A MONETARY STRUCTURE THAT SCREAMS RATES HIGHER. LISA: RATES HIGHER IN THE FRONT END. THE IDEA OF RATE HIKES SOONER
BECAUSE INFLATION HAS BEEN SO HIGH. TO ME, THE BIG QUESTION OF THE WEEK, HOW DO YOU DEAL WITH RISING INFLATION IN A SLOWING GROWTH BACKDROP? HOW DO THE CENTRAL BANKS ADDRESS THAT WHEN THE SOURCE OF INFLATION IS DIFFERENT DEPENDING ON WHAT COUNTRY YOU ARE TALKING ABOUT? IS IT DEMAND DRIVEN MORE IN THE U.S. THAN IN EUROPE, WHERE THEY ARE DEALING WITH SOMETHING VERY MUCH MORE SUPPLY CHAIN DRIVEN? TOM: LISA, WHAT IS THE NARRATIVE RIGHT NOW? WE WILL GET TO GREG PETERS ANY MOMENT. GREG PETERS OF PGIM. BUT I AM ABSOLUTELY BAFFLED BY THE NARRATIVE OUT THERE THAT LA GARDE WILL NEED TO ADDRESS AT 8:30. LISA:
THE QUESTION OF HOW MUCH SHE WILL PUSH BACK, HOW MUCH KENJI? I WOULD ARGUE -- HOW MUCH CAN SHE? I WOULD ARGUE MUCH OF WHAT WE ARE SEEING IS SYNCHRONIZED TRADING. SO HOW MUCH CAN SHE PULL BACK AND MOVE THE EURO AWAY FROM THAT DYNAMIC THAT REALLY HAS GONE GLOBAL ECHO -- HAS GONE GLOBAL? TOM: I WANT TO LOOK AT CATERPILLAR HERE. PEOPLE IN THE BOND MARKET TALK, IT IS A TRANSITORY CATERPILLAR , BUT I WONDER TO WHAT. KAILEY: I THINK THEY SEE A LOT OF THESE PRESSURES EASING UP A BIT. FOR CATERPILLAR, THEY TALK
ABOUT EVERYTHING FOR LABOR TO MATERIAL COSTS TO FREIGHT COSTS, AND YET THEY WERE ABLE TO REPORT PROFIT 20% ABOVE WHAT ANALYSTS ARE EXPECTING. THIS ISN'T JUST A STORY WE HAVE SEEN WITH CATERPILLAR. BY AND LARGE, COMPANIES ARE BEATING TO THE UPSIDE. THEY ARE RETAINING MARGIN. THE AVERAGE MARGIN EXPANSION IS 40 BASIS POINTS FROM THE EARNINGS PROPPING OF THIS EQUITY MARKET. TOM: IT DOES FOLD INTO CHINA SLOWDOWN. KAILEY: ABSOLUTELY.
BUT I THINK YOU ARE ALSO SEEING THAT COMPANIES SO FAR, AND ESPECIALLY IN EUROPE, WE WERE TALKING TO KATRINA DUDLEY ABOUT THE LUXURY SECTOR. TOM: LOOK FOR THAT OUT ON BLOOMBERG DIGITAL. SHE WAS WONDERFUL ON THE PERSISTENCY OF FREE CASH FLOW. I'M GOING TO START WITH FOREIGN
EXCHANGE. A LITTLE BIT OF DOLLAR WEAKNESS HERE. EURO-DOLLAR INTO THE LAGARDE STATEMENT, ECB HERE AND 42 MINUTES, AND THEN ONTO THE PRESS CONFERENCE. EURO-DOLLAR, $1.1607, VERY MUCH
RAIN BOUND OVER THE LAST DAYS. AND BONDS, ALL YOU NEED TO KNOW, MASSIVE FLATTENING. WE ARE NOW AT 98 BASIS UNDER A 1% DIFFERENCE BETWEEN THE TWO-YEAR AND THE 10 YEAR. TWO-YEAR YEAR YIELD HIGHER, 10 YEAR YIELD LOWER, AND FUTURES UP 14 THIS MORNING AS WELL. I NEED TO BE BRIEFED. SO DO YOU, LISA ABRAMOWICZ. LISA: WE HAVE BEEN TALKING ABOUT IT ALL MORNING. THE ECB WILL PLAN TO DELIVER
THEIR RATE DECISION. AT 8:30, WE GET WORDS FROM CHRISTINE LAGARDE. HOW DO CENTRAL BANKS ADDRESS INFLATION RATES THAT HAVE REACHED THE HIGHEST GOING BACK TO 2008, WHEN IN EUROPE, IT IS MET WITH A LABOR MARKET THAT IS WEAKER THAN HERE IN THE UNITED STATES? AT 8:30 AM, WE WILL GET A READ ON WHAT WE ARE SEEING IN THE UNITED STATES. INITIAL JOBLESS CLAIMS EXPECT IT TO COME IN AT A NEW LOW OF 188,000.
HOW MUCH DOES THIS GIVE PEOPLE CONFIDENCE GOING INTO THAT FIRST LOOK AT THE Q3 READINGS, THE IDEA OF GDP THAT WAS LIKELY TO SLOW? THE EXPECTATION IS IT MIGHT SLOW MUCH MORE THAN PEOPLE THINK. THE EXPECTATION IS 2.6%. THE ATLANTA FED GDP PUT OUT A REPORT YESTERDAY SAYING IT MIGHT JUST COME IN AS LOW AS 0.2%, WHICH IS A MARKED SHIFT DOWNWARDS. AFTERMARKET, WE GET EARNINGS FROM APPLE AND AMAZON. WE WILL TALK ABOUT SUPPLY CHAIN DISRUPTIONS COME HOW MUCH BUZZ HAD -- DISRUPTIONS FOR APPLE, HOW MUCH HAS BEEN PRICED IN. FOR AMAZON, HOW DIFFICULT IS IT
FOR THEM TO PHIL 100,000 WAREHOUSE JOBS THEY HAVE OPEN? HOW DIFFICULT IS IT WHEN THEY ARE COMPETING WITH OTHER COMPANIES RAISING WAGES? HOW MUCH MORE DO THEY HAVE TO HIKE THOSE WAGES IN ORDER TO GET PEOPLE IN? TOM: LISA TOOK A PHOTO ON 3RD AVENUE YESTERDAY, AS I WAS WALKING THERE TO BE CUT AND CHISELED LIKE FERRO, AND THE STRETCH OF AMAZON BOXES AND THE REST WAS LITERALLY HALF A BLOCK LONG. LISA: THE COMPANY IS CRUSHING IT. CAN THEY KEEP CRUSHING IT AT A TIME WHEN, FRANKLY, THEIR MARGINS ARE GOING TO BE SQUEEZED POTENTIALLY MORE THAN OTHER COMPANIES, AND THEY'VE GOT TO RAISE THEIR WAGES? THEY HAVE BEEN LEADING THE CHARGE. DOES IT GET IT DONE?
TOM: ARE YOU DONE? LISA: YEAH, GOT. TOM: OK, THANK YOU SO MUCH. GREG PETERS JOINS US NOW. LET US START RIGHT NOW WITH WHAT THE SYMBOLISM IS OF THIS NEW HAWKISH CURVE AND A SUBSTANTIALLY DECLINED REAL YIELD.
WHAT DOES IT SIMPLE TO YOU? -- WHAT DOES IT SYMBOL TO YOU? GREG: I THINK A POLICY MISTAKE, FRANKLY. THERE HAS BEEN A REAL SHIFT ACROSS THE GLOBE THAT SEEMS TO DEMONSTRATE THAT CENTRAL BANKERS ARE IMPERATIVELY -- ARE INHERENTLY HAWKISH. WHAT THE BOND MARKET IS TELLING ME AT LEAST IS THAT THERE'S TOO MUCH HAWKISH THIS PRICE -- TOO MUCH HAWKISHNESS PRICED INTO THE CURVE, AND THEY ARE TRYING TO CONTROL EXHAUSTION IS FACTORS SUCH AS -- CONTROL EXIT GENUS FACTORS -- CONTROL EXOGENOUS FACTORS. LISA: SO A CENTRAL BANK POLICY MISTAKE. WE HAVE SEEN THIS PRICED INTO
EVERY CENTRAL BANK AROUND THE WORLD COME TOGETHER IN TANDEM WITH THE DISRUPTION WE HAVE SEEN INTO YEAR YIELDS GLOBALLY. YOU THINK THAT CENTRAL BANKS ARE ON THE PRECIPICE OF AN ACCIDENT, OR DO YOU THINK THAT MARKETS ARE GETTING ROILED TRYING TO CLOSE OUT POSITIONS? GREG: I THINK IT IS A LITTLE BIT OF BOTH. I HAVE BEEN ASTOUNDED BY THE SUDDEN SHIFT IN RHETORIC OUT OF THE VARIOUS CENTRAL BANKS. I GO BACK TO BANK OF CANADA YESTERDAY. THAT WAS A NOT TOO SUBTLE SHIFT IN RHETORIC. SAME AS THE FED. TO ME, I DO THINK IT IS OVERBLOWN PERSONALLY, BUT IT IS HARD TO FIGHT THE TREND HERE. WHAT I THINK WE ARE VERY CLOSE,
IF NOT ALREADY THERE, TO THE PEAK IN WHERE THE FRONT END CAN GO. I REALLY DON'T SEE MUCH MORE SCOPE FOR TWO YEAR YIELDS TO MOVE MUCH HIGHER HERE BECAUSE IT IS ALREADY PRICING IN A PRETTY AGGRESSIVE THAT POLICY HERE IN THE U.S., AND SOON. TO ME, THAT DOESN'T REALLY ADD UP. I THINK WE ARE CLOSE TO THE END OF THIS BOUT HERE, BUT ULTIMATELY, WHAT IS DRIVING THE MARKET PLACE AT THE FRONT END IS DRIVING THE MARKET AT THE BACK END.
SO THE MOST IMPORTANT MEASURE TO ME IS FOCUSING ON THE TWO-YEAR YIELD. LISA: JUST QUICKLY HERE THAN, THERE IS THIS IDEA OF WHAT YOU DO WITH THAT. DO YOU BUY TWO YEAR YIELDS AT THIS POINT IF YOU THINK IT MIGHT BE SLIGHTLY OVERBLOWN RICK RIEDER OF BLACK -- SLIGHTLY OVERBLOWN? RICK RIEDER YESTERDAY SAYING HE WAS SELLING TIPS BECAUSE THAT MIGHT BE OVERBLOWN. GREG: I THINK IT IS CLOSE. WE HAVE BEEN SHORT THE TWO-YEAR FOR QUITE SOME TIME. WE HAVE LOOKED AT IT AS THE MARKET WAS PRICING THE OTHER SIDE TO AGGRESSIVELY.
SO I THINK WE ARE REALLY CLOSE. BUT IT IS ALSO IMPORTANT TO REMEMBER THAT A TAPER IS UPON US AS WELL, AND THE HISTORY OF TAPER, WHILE THERE IS NOT A TREMENDOUS AMOUNT OF DATA BEHIND IT, DOES SEEM TO POINT TO LOWER YIELDS, NOT HIGHER YIELDS IN THE BELLY AND THE BACKEND. SO WE ARE EQUALLY FOCUSED ON THAT PART OF THE CURVE AS WELL. SO I THINK THE MARKET HAS MOVED A LOT. LIQUIDITY IN THE MARKET PLACE KIND OF EXACERBATES THE MOVE, SO IT DOES SEEM A LITTLE OVERDONE IN THE FRONT END. I WOULD THROW IN BREAKEVEN TIPS AS WELL. TOM:
GREG, THANK YOU SO MUCH. NEW SLOPE IS JUST EXTRAORDINARY. REALLY THRILLED WE COULD GET MR. PETERS WITH US WITH PGIM. MOMENTS AGO, STEVE MAJOR PUBLISHERS OUT OF HONG KONG WITH HSBC.
HE SAYS WE ARE IN A GAME OF CHICKEN, AND HE SAYS OUR VIEW HAS NOT CHANGED, MUCH LIKE THE PRO GREG PETERS. MR. MAJOR SAYING THIS IS ABOUT WHERE WE ARE GOING TO BE. LISA: AND YOU ARE SEEING INCREASING PUSHBACK TO THE SEA CHANGE WE ARE SEEING IN THE FRONT END. BASICALLY, TRADERS EXPECT AND
THE FED TO HIKE, EXPECT IN THE ECB TO FOLLOW SHORTLY THEREAFTER, AND PEOPLE LIKE STEVE MAJOR SAY WHATEVER THEY DO, THEY ARE DEALING WITH THE SAME ENVIRONMENT, WHICH IS LOW GROWTH, LOW INFLATION, AND WE ARE GOING TO GET THOSE BOND YIELDS BACK DOWN. HE HAS BEEN A BOND BULL. HE'S BEEN RIGHT. TOM: THIS IS SO IMPORTANT. IF YOU GET A PETERS FIXED INCOME MARKET, IF YOU GET THE EQUIVALENT STEVE MAJOR MARKET, IT SAYS EQUITIES UP. WHAT DO WE DO ABOUT Q4 EARNINGS FOR EQUITIES IN JANUARY OF NEXT YEAR? KAILEY: IT IS A GOOD QUESTION THE -- GOOD QUESTION. THE BULLS WILL TELL YOU THAT
EQUITIES CONTINUE TO DRIVE THE STORY. I ACTUALLY CAUGHT UP WITH STEPHEN MAJOR EARLIER BECAUSE YES, HE RAISED HIS TARGET FOR 2021 ON THE 10 YEAR. YES, EARLY IN THE MORNING, LATE FOR THE DAY HIM AND HONG KONG, BUT HE WENT TO 1.5 PERCENT FOR
2021. HE IS STILL BACK DOWN AT AN PERCENT IN 2022. TOM: QUICKLY COMMENT ON GREG PETERS SAYING THIS IS IT FOR THE TWO-YEAR. LISA: THAT IS WHAT WE ARE HEARING FROM A GROWING NUMBER OF TRADERS. THE IDEA THAT RICK RIEDER CAME OUT YESTERDAY AND SAID HE IS ACTUALLY SELLING TIPS, SELLING THE INFLATION STORY, HE THINKS IT HAS GOTTEN OVER ITS SKIS. TOM: NO WORD ON IF THEY ARE READING STEVE MAJOR IN FRANKFURT, GERMANY.
WE'VE GOT THE ECB ANNOUNCEMENT. WHAT WE WILL REALLY SEE IS A PRESS CONFERENCE AS LAGARDE MANAGES THE EMPTY SEAT AT THE BUNDESBANK AND MANAGING THE MESSAGE BETWEEN DOVISH AND HAWKISH TONES IN EUROPE. FUTURES UP 16, DOW FUTURES UP 91. THE VIX, 16.53. STAY WITH US. ON RADIO, ON TELEVISION, THIS IS BLOOMBERG. ♪ LAURA: WITH THE FIRST WORD NEWS, I'M LAURA WRIGHT.
PRESIDENT BIDEN HEADS TO THE CAPITOL TODAY TO BRIEF DEMOCRATS IN HIS SOCIAL SPENDING AGENDA HOURS BEFORE HE HEADS TO EUROPE. THE PRESIDENT WANTED TO HAVE AN AGREEMENT WHEN HE ARRIVED IN ROME FOR A G20 SUMMIT, BUT HOUSE AND SENATE DEMOCRATS CAN'T AGREE ON HOW THE INCREASED TAXES PAY FOR THE MEASURE. IN TAIWAN, PRESIDENT TSAI ING-WEN HAS SAID THE U.S. WOULD COME TO THE ISLAND'S DEFENSE IF CHINA TRIED TO INVADE.
TSAI SAID THE THREAT FROM CHINA IS INCREASING EVERY DAY, AND CNN SAYS THERE ARE FEWER THAN THREE DOZEN AMERICAN SERVICEMEMBERS THERE. THE PRICE OF EUROPEAN NATURAL GAS AND POWER FELL TODAY AFTER SIGNALS FROM RESIDENT VLADIMIR PUTIN THAT RUSSIA WILL SEND MORE GAS TO THE CONTINENT NEXT MONTH. PUTIN HAS TOLD GAS PUMPS TO START REFILLING AT EUROPEAN GAS FACILITIES ON NOVEMBER 8. ONE OF THE FOUNDERS OF PALANTIR TECHNOLOGIES HAS STARTED A FURIOUS DEBATE ON TWITTER ABOUT PARENTAL LEAVE.
THE VENTURE CAPITALIST TWEETED THAT ANY PROMINENT MAN WHO TAKES SIX MONTHS OFF WITH HIS NEWBORN IS "A LOSER." THE TWEET CAME IN RESPONSE TO ONE ABOUT U.S. TRANSPORTATION SECRETARY STEVE BUTTIGIEG, WHO TOOK TIME OFF TO CARE FOR HIS CHILD -- SECRETARY PETE BUTTIGIEG, WHO TOOK TIME OFF TO CARE FOR HIS CHILD. 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'M LAURA WRIGHT. THIS IS BLOOMBERG.
>> EVERYBODY IN THIS COUNTRY THAT HAS BEEN BLESSED AND PROSPERED SHOULD PAY A PATRIOTIC TAX. IF YOU ARE TO THE POINT TO WHERE YOU ARE ABLE TO USE ALL OF THE TAX FORMS THAT YOU CAN TO YOUR ADVANTAGE AND YOU END UP WITH A ZERO TAX LIABILITY, BUT HAVE HAD A VERY GOOD LIFE AND YOU HAD A LOT OF OPPORTUNITIES, THERE SHOULD BE A 50% PATRIOTIC TAX. TOM: THE SENATOR FROM WEST VIRGINIA. A LOT OF ATTENTION PAID NOT ONLY TO HIM, BUT ELECTION -- BUT A SELECTION OF OTHERS, IN THIS BATTLE THE PRESIDENT WILL ADDRESS AT -- WILL ADDRESS AS HE MANAGES THE MESSAGE ON TO ROME. MARIA TADEO WILL BE IN ROME. IS IT THE G20 COMEDY SEVEN? -- THE G20, G7? LISA: IT IS THE G20. TOM: I AM DISTRACTED BY LAGARDE AND THE ECB IN 20 MINUTES. RIGHT NOW, THIS IS JOSH
WINGROVE, BLOOMBERG WHITE HOUSE CORRESPONDENT. WE ARE THRILLED HE COULD JOIN US THIS MORNING ON THIS FRAMEWORK THAT WE HAVE. GREG VALLIERE COMES OUT AND SAYS IT IS HAPPY TALK. I KNOW THE REPUBLICANS WILL SAY IT IS HAPPY TALK. ARE THERE DEMOCRATS WHO SAY THAT THIS FRAMEWORK IS HAPPY TALK? JOSH: I EXPECT THAT WE ARE MOMENTS AWAY FROM DEMOCRATIC SENATORS OR HOUSE NUMBERS COMING OUT OF THE WOODWORK AND SAYING ACTUALLY, OR AWAIT, WE ARE NOT SURE ABOUT X.
THIS IS, GENEROUSLY SPEAKING, FROM THE AT ADMINSTRATION'S PERSPECTIVE, THEY HAVE SOME SORT OF FRAMEWORK THAT BIDEN HOPES TO ANNOUNCE AN DETAIL, THAT THEY EXPECT PRESUMABLY DEMOCRATS WILL GET BEHIND. BUT THEY ARE QUITE NOTABLY NOT SAYING IT IS A FINAL DEAL. THEY ARE NOTABLY NOT SAYING THAT EVERYONE HAS SIGNED OFF, IN PARTICULAR JOE MANCHIN AND ALEXANDRIA OCASIO-CORTEZ. WHETHER THIS IS A SLIGHT TURN OF THE SCREW, AND EVEN SLIGHTER TURN OF THE SCREW, OR A BIG BREAKTHROUGH IS UNKNOWN -- A BIG BREAKTHROUGH IS UNKNOWN, BUT HE WILL WANT SOMETHING BEFORE HE LEAVES ON THAT TRIP TO EUROPE. TOM: MY EIGHTH GRADE HISTORY TEACHER
ACTUALLY SAID TO ME HISTORY COULD BE FUN. THERE WAS A GREAT CIVICS CLASS. IS ANY OF THIS THAT YOU ARE LIVING RIGHT NOW CIVICS 101? JOSH: I HOPE YOU DIDN'T JUST GIVE AWAY A PASSWORD FOR A BANKING LOGIN. THAT FEELS LIKE A GOOD ONE, FAVORITE TEACHER. [LAUGHTER] YES, THEY ARE GOING TO BE TO
AND FRO ON THIS, AND THEY HAVE BEEN FOR MONTHS, AND THERE ARE REALLY CORE ISSUES HERE. THAT INCLUDES TAXATION, MEDICARE, PAID FAMILY LEAVE, WHICH LOOKS TO BITE THE BULLET IN FALLOUT LAST NIGHT, BUT PROGRESSIVES ARE PUSHING FOR PARTICULARLY THE CARE ECONOMY OF THIS, AND WOMEN IN PARTICULAR WOULD BENEFIT FROM THAT. THERE ARE SO MANY MOVING PARTS ON THIS. JOE BIDEN IS TRYING TO FORCE IT INTO ONE PILE ON A PLATE, BUT WE JUST DON'T KNOW. IT IS AN EVOLVING ONE. KAILEY: AND THERE IS A QUESTION OF WHO THE PRESIDENT IS SPEAKING TO. IS HE REALLY TALKING TO
LAWMAKERS? IS HE TALKING TO THE DOMESTIC POPULATION, SAYING DON'T WORRY, I AM DOING WHAT I PROMISED I WOULD DO DURING THE CAMPAIGN? OR IS HE TALKING TO THE G20 AND THE CONFERENCE OF THE PARTIES AS WELL WHEN WE LOOK FORWARD TO CUP 26? -- TO COP-26? JOSH: I THINK IT IS ALL OF THE ABOVE. IT IS POSSIBLE HE COULD SPECIFY THOSE IN PARTICULAR SO THAT HE CAN GO OVERSEAS ON THIS TRIP AND SHOW THAT THE U.S. IS SERIOUS ABOUT DOING SOMETHING ON CLIMATE AS HE ONCE TO DO. THE AMERICAN PUBLIC, I THINK HE DEFINITELY WANTS TO GIVE A SIGN OF PROGRESS. REMEMBER, THOSE VIRGINIA ELECTIONS ARE COMING NEXT WEEK, AND THERE'S A FEAR THAT BIDEN'S POPULARITY IS SINKING AND MIGHT DRAG TERRY MCAULIFFE DOWN WITH HIM.
THIRD, IT FEELS LIKE ALMOST A HEAVY HAND TYPE OF APPROACH MIGHT BE TEMPTING TO HIM HERE, WHERE HE GOES UP TO ANNOUNCE THE DEAL AND BOXES AND DEMOCRATS A LITTLE BIT OR TRIES TO, TO SORT OF GET ON BOARD ONE WAY OR ANOTHER WITH THE COMMANDER-IN-CHIEF. THAT HASN'T REALLY WORKED SO FAR. SO WHETHER THIS WILL GO FAR ENOUGH TO MAKE THAT WORK NOW, WE WILL SEE. BUT IT IS A SORT OF MULTIPRONGED AUDIENCE. WHAT WOULD HE BE SPEAKING TODAY IF YOU WEREN'T LEAVING FOR EUROPE? HARD TO SAY. LISA: HARD TO SAY, OR NO. THIS IS THE ISSUE, ALL OF THESE FALSE DEADLINES THAT HAVE BEEN CREATED. KAILEY BROUGHT UP THE PROGRESSIVE WING. DOES IT AT THE SENATE, DOES IT GET THE HOUSE TO A VOTE ON BIPARTISAN INFRASTRUCTURE, WHICH REALLY A LOT OF PEOPLE SAY IS THE MAIN GOAL HEADING INTO YEAR END RIGHT NOW? JOSH: AND HEADING INTO THIS WEEKEND, WHERE FUNDING MEASURES ARE SET TO EXPIRE IF THERE IS NO DEAL ON INFRASTRUCTURE.
AT LAST COUNT, NO. PROGRESSIVE HAS SAID THEY WILL NOT TAKE THEY WILL TAKE A FRAMEWORK OR DEAL IN LIEU OF AN ACTUAL VOTE, AND THEY ARE NOT GOING TO LET THE HOUSE BILL GO FORWARD ON THAT INTERCEPTOR BILL UNTIL THEY DO, SO RIGHT NOW, THESE TWO ARE LOCKED IN TANDEM. WHETHER THEY BOTH GET OFF THE GROUND REMAINS UNCLEAR, BUT BIDEN WILL TRY TO GIVE IT A BOOST TODAY. LISA: TO DOVETAIL THIS INTO THE QUESTION OF THE AUDIENCE PRESIDENT BIDEN IS SPEAKING TO, THERE IS THE DOMESTIC AUDIENCE AND THE INTERNATIONAL AUDIENCE AS WELL HEADING INTO G20. IS THE UNITED STATES UNITED? HOW MUCH DOES THIS PUT THE UNITED STATES AT A DISADVANTAGE DIPLOMATICALLY HEADING INTO THESE DISCUSSIONS? JOSH: I THINK THEY WOULD ARGUE THAT NO ONE SEES NO PROGRESS HERE, BUT EVERYONE ABROAD KNOWS THIS IS A DIVIDED CONGRESS. I AM SURE JOE BIDEN, JUST LIKE DONALD TRUMP BEFORE HIM, WOULD LOVE TO HAVE THE POWER THAT A LOT OF PRIME MINISTERS IN THE G7 DO TO SORT OF RAM STUFF THROUGH PARLIAMENT WITHOUT MUCH FUSS. THEY DON'T HAVE THAT POWER HERE.
BUT JOE BIDEN HAS SAID, LOOK, AUTOCRACIES ARE WATCHING TO SEE IF DEMOCRACIES CAN DO BIG STUFF FAST AND WELL IN THE 21ST CENTURY, THE TIME WHEN WE NEED TO DO IT, AND HE HAS EXPRESSED REAL DOUBT ABOUT THAT. THAT IS PART OF THE REASON HE IS PUSHING FOR A DEAL, AND LOOKS SET TO ANNOUNCE THAT THEY ARE CLOSE. THE BACKDROP HERE IS THE MORE STUFF THAT FALLS OFF OF THIS DEAL, DO PROGRESSIVES JUST SAY THIS ISN'T WORTH IT? THIS IS TO WATER DOWN -- THIS IS TOO WATERED DOWN. BUYER WE BOTHERING? -- WHY ARE WE BOTHERING? TOM: OUR CORRESPONDENT JOSH WINGROVE, HE IS IN WASHINGTON. THERE WILL BE SOME INTERESTING TONES THERE AS WELL.
RIGHT NOW, LET US BEGIN REALLY AND IN-DEPTH COVERAGE OF ECB. HOLGER SCHMIEDING COMING UP IS OUTSTANDING. HE'S THE ONE GUY I WANTED TO TALK WITH ABOUT THIS, OF BERENBERG BANK. INFLATION OVER THERE IS TOTALLY DIFFERENT THAN THE ANGST OVER HERE. LISA:
IT ISN'T BEING DRIVEN AS MUCH BY THE DEMAND SIDE. WE GO BACK TO REBECCA PATTERSON OF BRIDGEWATER ESTHER DAY, SAYING THAT IN THE UNITED STATES, THERE HAS BEEN SO MUCH CASH PUT INTO SAVINGS ACCOUNTS, AND PEOPLE ARE DEPLOYING THAT CASH. HOW MUCH DO WE SEE THIS IN EUROPE, THE IDEA THAT IT HAS BEEN DRIVEN BY SUPPLY CHAIN DISRUPTIONS WITHOUT THE LABOR MARKET IN THE UNITED STATES? THIS IS A HUGE DILEMMA FOR THE ECB. TOM: EVERYONE HANGING ON THE WORDS OF MADAME LAGARDE AS SHE TIPTOES AROUND HER INTERPRETATION OF THEIR SPLIT INTERPRETATION ON PRICE CHANGE, AND OF COURSE, WITH ALL OF THE HISTORICAL LEGACY ACROSS THE ECB AS WELL. WE DO WANT TO REMIND YOU, THIS AFTERNOON AS WELL, APPLE AND AMAZON. HOW DO YOU DIGEST APPLE AND AMAZON? KAILEY: WITH AMAZON, IT IS GOING TO BE FOR THE CLOUD.
WITH APPLE, HOW MUCH DO SUPPLY CHAIN ISSUES WEIGH ON THE THIRD QUARTER? HOW MUCH IS THAT GOING TO BE A PROBLEM IN THE GUIDANCE AS WELL, LOOKING FOR TO THE HOLIDAYS? TOM: BEN LAIDLER REAFFIRMS TODAY, THERE IS A MASSIVE UNDERESTIMATION OF REVENUE GROWTH. COMING UP, HOLGER SCHMIEDING, ♪ TOM: GOOD MORNING, EVERYONE. FUTURES ADVANCE. THAT IS WHAT YOU NEED TO KNOW.
S&P FUTURES NOW UP 14. DOW FUTURES UP A SPRIGHTLY 72 POINTS. WE ARE NOT ON 36,000 MUCH, BUT THERE IS. NASDAQ UP 0.6%. EVEN SMALL CAPS REBOUNDING AFTER A REALLY DIFFICULT FINAL HOUR YESTERDAY. THE TWO-YEAR YIELD, A SOLID 0.55%.
WE WILL DIVE INTO THAT IN A MOMENT. 30 YEAR BOND WELL UNDER 2%, 1.93%. OIL WITH THAT $86 LEVEL ON BRENT CRUDE COMES BACK, DOWN 1.8%. FOREIGN EXCHANGE, I CAN'T FIGURE IT OUT ON THE SCREEN. MY EYES ARE GLAZING OVER. GET SAVED BY KAILEY LEINZ.
KAILEY: THIS IS WHAT I AM HERE FOR. I AM KEEPING IT REALLY SIMPLE THIS MORNING, EARNINGS WINNERS AND LOSERS. FORD REALLY BLEW IT OUT OF THE WATER. ANALYSTS POINTING TO A NUMBER OF SURPRISES.
THEY RAISE THEIR PROFIT FORECAST. THEY ARE WEATHERING THE CHIP SHORTAGE OK, BETTER THAN OTHER AUTOMAKERS IN THE THIRD QUARTER. THAT STOCK IS UP ABOUT 9.3% BEFORE THE BELL.
A COUPLE OF SEMI COMPANIES ALSO BEAT. IT WILL SPEED IS UP -- WILL SPEED IS UP. LABOR, MATERIALS, FREIGHT COSTS, THAT IS TRUE, BUT THEY HAD REALLY STRONG SALES THAT OFFSET THAT, AND PROFITS BEAT BY 20% HIGHER THAN WHAT ANALYSTS WERE EXPECTING, SO THAT IS UP ABOUT 1.5%. SOME COMPANIES NOT SO LUCKY. A NUMBER ACTUALLY MISSED EXPECTATIONS, ONE OF THE BE IN TWILIO. -- ONE OF THOSE BEING TWILIO. EBAY, THIS IS KIND OF AN INTERESTING ONE. I KNOW YOU PROBABLY WERE ON EBAY BIDDING FOR ANTIQUE GUITARS OR FIRST EDITION BOOKS OR WHATEVER IT IS. TOM: BOWTIES.
KAILEY: BOWTIES, OF COURSE. MAYBE YOU WERE DOING THAT DURING THE PANDEMIC, BUT MAY BE DOING LESS OF IT NOW THAT THE WORLD IS OPENING BACK UP AND YOU CAN GO INTO THRIFT STORES OR ANTIQUE STORES OR WHEREVER ONE FINDS BOWTIES THESE DAYS. TOM: INTERESTING. KAILEY: EBAY IS SEEING ACTIVE CUSTOMERS GO DOWN, AND AS A RESULT, HOLIDAY FORECASTERS COMING UP SHORT. THAT STOCK IS DOWN 5.7% BEFORE THE BELL. TOM: KAILEY LEINZ, THANK YOU SO MUCH.
AT 7:32 WALL STREET TIME, WE ARE ON OUR WAY IN LESS THAN 15 MINUTES TO AN ECB MEETING. HE WAS A SENIOR ECONOMIC ADVISOR AT THE INTERNATIONAL MONETARY FUND, AND IN A PHD DISSERTATION, TRY TO PIECE TOGETHER HIS EUROPE. WE ARE THRILLED TO BRING YOU THIS MORNING HOLGER SCHMIEDING, CHIEF ECONOMIST AT BERENBERG BANK. I WAS LECTURED ONCE LONG AGO THAT AMERICAN ECONOMISTS DO NOT DO THE MEDIUM TERM. WE DO SHORT-TERM, LONG-TERM, AND LEAVE THE MEDIUM TERM TO FANCY PEOPLE LIKE YOU IN EUROPE.
HOW DOES CHRISTINE LAGARDE NAVIGATE THE SHORT, THE LONG, AND MORE IMPORTANTLY, THE MEDIUM-TERM IN HER PRESS CONFERENCE TODAY? HOLGER: WELL, WHAT IS GOOD FOR HER IS THAT SHE WILL MOST LIGHTLY NOT HAVE TO ANNOUNCE ANY SERIOUS DECISIONS, SO SHE CAN FOCUS ON SETTING THE RECORD STRAIGHT A BIT. FOR NOW, THAT MEANS THAT THE ECB WITH REGARD TO THE MEDIUM-TERM INFLATION OUTLOOK IS NOT VERY CONCERNED. THE ECB ON THE GUIDANCE IT PROVIDED IN SEPTEMBER, THIS LOOKS FOR FURTHER UPSIDE TO INFLATION NEAR-TERM, BUT FOR SIGNIFICANT EASING OF THOSE PRESSURES AGAIN AT JUST 1.5% INFLATION IN 2023. AS A RESULT, THE ECB GUIDANCE IS NOT IMPLIED ANYTHING LIKE THE RATE HIKE FOR LATE 2022, WHICH MARKETS HAVE STARTED TO PRICE IN , AND NEAR-TERM, INFLATION IS EVEN A BIT MORE.
BUT OUR MEDIUM-TERM OUTLOOK HAS NOT CHANGED MATERIALLY. TOM: A DELICATE QUESTION, BUT I KNOW YOU CAN GIVE PERSPECTIVE. IS CHRISTINE LAGARDE ADVANTAGED OR DISADVANTAGED HERE BY NOT BEING AN ECONOMIST? HOLGER: WELL, SHE PRESIDES OVER WHAT PROBABLY IS ONE OF THE BIGGEST AND AMONG THE BEST COLLECTIONS OF ECONOMISTS AT THE EUROPEAN CENTRAL BANKS, ONE OF THE BEST WE HAVE IN THE ENTIRE WORLD.
SO SHE CAN, AND HER JOB, HER SKILLS OF BRINGING DIFFERENT VIEWS TOGETHER, OF AMALGAMATING THEM, ARE QUITE USEFUL. AND ALL IN ALL, WE HAVE TO SAY THAT SO FAR, THE ECB UNDER LAGARDE HAS BEEN A SOMEWHAT STEADY SHOP, AND THAT ALL IN ALL IS NOT BAD. I THINK SHE WILL FIND ROUGHLY THE RIGHT WORDS TO EXPLAIN THAT INFLATION IS AN ISSUE, BUT THAT MARKETS HAVE BEEN A BIT AHEAD OF THEMSELVES AND INFLATION IS LESS OF AN ISSUE IN THE EURO ZONE THAN PROBABLY IN THE U.S. LISA: THIS IS THE ISSUE. YOU SAID THERE IS A WHIFF OF
STAGFLATION IN THE EURO ZONE. WHY IS IT SO MUCH MORE INTENSE THAN HERE IN THE UNITED STATES? HOLGER: ONE BASIC REASON, NAMELY THAT THE EURO IS MORE DEPENDENT ON INDUSTRY, ON INDUSTRIAL EXPORTS, ON MANUFACTURING, AND AS A RESULT, THE SUPPLY SHORTAGES THAT ARE CRIPPLING PARTS OF INDUSTRY IN MANY PARTS OF THE WORLD MATTER MORE FOR THE EURO ZONE THAN THEY DO FOR THE U.S. ALSO, CONSUMER DEMAND WHICH IS FAIRLY GOOD IN THE EURO ZONE IS EVEN STRONGER IN THE U.S. BECAUSE THE GOVERNMENT HAS HELPED IMPROVE PRIVATE HOUSEHOLD BALANCE SHEETS OVER THE LAST NUMBER OF YEARS, SO THERE IS NOT AS MUCH CONSUMER DEMAND IN THE EURO ZONE AS THERE IS IN THE U.S. LISA: THIS IS THE CONFUSION WHEN I TAKE A LOOK AT THE EURO THAT HAS BEEN GAINING VERSUS THE DOLLAR OVER THE PAST COUPLE OF SESSIONS. SHOULDN'T IT BE FALLING OUT OF BED IF THE ECB IS GOING TO REMAIN ON HOLD FAR LONGER THAN ANY OTHER DEVELOPED MARKET CENTRAL-BANK OUT THERE? HOLGER: IN A WAY, YES, BUT THIS IS NOT EXACTLY NEWS THAT THE ECB FACES AN INFLATION PROBLEM AND THAT IT WILL STAY WITH THE CURRENT RATE FOR LONGER. THE DOLLAR IS TO SOME EXTENT
RISK ON, RISK OFF CURRENCY. IN A RISK OFF ENVIRONMENT WHERE MARKETS SEEM TO BE LOOKING AHEAD TO SOME EXTENT TO THE EASING OF SHORTAGES IN 2022, IT IS A BIT MORE LIKE A RISK ON ENVIRONMENT. THE DOLLAR TYPICALLY IT'S UP SOME OF ITS SAFE HAVEN GAINS. SO I WOULD NOT SAY THIS IS MUCH. KAILEY: THERE WAS A TIME WHEN THE EURO WAS ONE OF THE BIGGEST CONCERNS FOR THE ECB. WE ARE NOW PASSED THAT. IT IS THE BOND MARKET THAT MAY
BE CAUSES MOST OF CHRISTINE LAGARDE HEADACHES. YOU THINK SHE'S GOING TO HAVE TO TRY REALLY HARD TO TALK IT DOWN TODAY AS SHE HAS IN THE PAST? HOLGER: I THINK SHE WILL TRY TO TALK IT DOWN, ESPECIALLY THE SHORT END MOVE, STARTING TO PRICE IN ECB RATE HIKES FOR LATE 2022, WHICH, ACCORDING TO ECB GUIDANCE, ARE HIGHLY UNLIKELY. AS TO THE OVERALL FINANCING COSTS, IT WILL PROBABLY WARNED THAT THE ECB WOULDN'T GO AGAINST MOVES WHICH IT DEEMS EXCESSIVE, BUT PROBABLY NOT SAY THAT THE CURRENT LEVEL OF YIELD IS HIGHER THAN THE ECB WOULD THINK IT SHOULD BE, AND THUS WILL PROBABLY NOT ANNOUNCE THAT THE ECB IS GOING TO LEAN AGAINST WHAT HAS ALREADY HAPPENED. JUST PROBABLY TRY TO SLOW DOWN FURTHER RISES TO THE YIELD. KAILEY: THIS WILL BE ONE OF THE TWO FINAL MEETING FOR JENS WEIDMANN AS HE IS STEPPING DOWN AS HEAD OF THE BUNDESBANK. DOES THAT MEAN HE IS GOING TO
MAKE MORE OF A HAWKISH PUSH BEFORE HIS EXIT? WHAT IS THE IMPACT OF THAT? HOLGER: I THINK THAT HE WILL VERY LIKELY HAVE MADE TODAY AND IN DECEMBER HIS CASE, WHICH IS BASICALLY WE OUGHT TO STOP THE EMERGENCY PURCHASES COMPARATIVELY FAST, AND WE OUGHT TO START THINKING ABOUT THE LONG RUN OUTLOOK WITH THE NEED TO RAISE RATES EVENTUALLY. BUT HE HAS MADE THOSE POINTS IN THE PAST, AND BECAUSE HE IS A BIT OF AN OUTSIDE MANY OF THESE ECB DEBATES, I DON'T THINK THAT HIS INTERVENTION OVER THE LAST TWO SESSIONS WILL HAVE MADE A CRUCIAL DIFFERENCE RELATIVE TO WHAT IT DID IN THE PAST. IT ALWAYS INFLUENCED DECISIONS, BUT ONLY A BIT. WE HAVE TO LOOK FORWARD TO WHAT
HIS SUCCESSOR WILL DO, WHICH I THINK MAY BE A BIT LESS HAWKISH, BUT THEY RESONATE -- BUT MAY RESONATE BETTER WITH THE ECB. TOM: THANK YOU SO MUCH. GREATLY APPRECIATE IT. CHIEF ECONOMIST AT BERENBERG. THIS GOES BACK TO JOHN AUTHERS' TOUR-DE-FORCE OUT THERE RIGHT NOW, TALKING ABOUT THE HAWKISH DON. LISA: HOW DO YOU DECIPHER NEAR-TERM VERSUS LONGER-TERM STRUCTURAL SHIFTS IN INFLATION DYNAMICS? IT HAS TO COME FROM THE LABOR MARKET. TOM: EXACTLY. LISA: THERE IS SUCH A BIGGER DYNAMIC, AND YOU HAVE TALKED ABOUT THIS SO MUCH, THE IDEA OF AUTOMATION. DON'T UNDERSTAND SOME OF THE SHIFTS AND THE TRANSFORMATIONS OF THE LABOR MARKET.
HOW DO YOU GAIN THIS OUT -- HOW DO YOU GAME THIS OUT? TOM: MANY WAYS TO GO WITH THAT GOOD OBSERVATION, BUT THE BOTTOM LINE HERE IS EVERYBODY THAT I RESPECT IS SAYING YOU'VE GOT TO LOOK AT THE LABOR DYNAMIC IN EUROPE, AND FRANKLY OVER HERE AS WELL, AND IN THE CORPORATE EARNINGS ANNOUNCEMENTS, I JUST DON'T SEE THE LABOR INFLATION ENTRENCHED. 80 PARTS OF IT. LISA: -- MAYBE PARTS OF IT. LISA: I AM WONDERING IF THE ZEITGEIST IS SHIFTING AMONG THE POPULATION SEEING THE INFLATIONARY PUSHES. IF ALL OF A SUDDENLY TOLERANCE WAS VERY DOVISH, VERY DOVISH ECB POLICY AS PEOPLE SEE WHAT THEY ARE PAYING AT THE GROCERY STORE OR FOR THE CAR, THAT IS A SHIFT WE HAVE TO SEE CHRISTINE LAGARDE PUSH AGAINST PERHAPS TO KEEP WITH THE SAME KIND OF RHETORIC WE HAVE HEARD FROM HER. TOM: WE GO DOWN IN FLAMES, FOLKS. WE TRIED TO STAY AWAY FOR THREE
HOURS THIS MORNING. LISA: FROM WHAT? TOM: FROM THE DREADED T WORD, TRANSITORY. KAILEY LEINZ, TRANSITORY. AT THE END OF THE DAY, IT IS STILL THERE. KAILEY: I THOUGHT IT GOT CANCELED.
I THOUGHT WE WERE OVER THE TRANSITORY NARRATIVE. [LAUGHTER] AT LEAST, THE MARKET CANCELED TRANSITORY. THAT IS WHAT THE MARKET IS TELLING YOU, THAT THEY ARE NO LONGER BUYING INTO THAT NARRATIVE.
BUT THAT IS ONE THAT COME A TIME AND AGAIN, CHRISTINE LAGARDE HAS TRIED TO PUSH. BD INFLATION DYNAMICS ARE TRULY THAT DIFFERENT IN EUROPE, BUT I WOULD IMAGINE WE ARE GOING TO HEAR THE WORD TRANSITORY, OR SOME VARIATION OF IT, COMING. LISA: SHORT-TERM VERSUS LONG-TERM. TOM: I THINK DOUG KASS WAS ON FIRE YESTERDAY ON BLOOMBERG RADIO IN THE NANA CLOCK HOUR. YOU BUTTRESS THAT UP -- THE 9:00 HOUR. YOU BUT JUST -- YOU BUTTRESS THAT UP AGAINST WHAT WE SEE FROM GREG PETERS, AND IT IS A CONSTRUCTIVE "SURVEILLANCE" NARRATIVE. KAILEY: A FRAMEWORK. TOM:
YES, A FRAMEWORK FROM LAGARDE. [LAUGHTER] THIS IS BLOOMBERG. ♪ LAURA: WITH THE FIRST WORD NEWS, I'M LAURA WRIGHT. ONE THING THAT WON'T BE CANCELED IS AN IMAGE OF TOM KEENE WITH A CATERPILLAR TATTOO. BUT IN THE U.S., PRESIDENT
BIDEN IS SET TO ANNOUNCE AN AGREEMENT ON HIS ECONOMIC AGENDA. BLOOMBERG HAS LEARNED THE PRESIDENT WILL ANNOUNCE THE DEMOCRATS HAVE AGREED ON A FRAMEWORK OF TAX AND SPENDING PROPOSALS THAT HE IS OPTIMISTIC CONGRESS CAN PASS. HE WILL GO TO CAPITOL HILL AND BRIEF HOUSE DEMOCRATS ON THE DEAL THAT NEGOTIATORS WORK OUT WITH HIM. LATER, THE PRESIDENT WILL SPEAK AT THE WHITE HOUSE. POST-BREXIT TENSIONS BETWEEN THE U.K. AND FRANCE OVER FISHING RIGHTS
KEEP RISING. THE BRITISH GOVERNMENT HIT BACK AT FRANCE OVER ITS PROPOSED RED HILL AT TORI MEASURES -- PROPOSED RETALIATORY MEASURES. FRENCH AUTHORITIES SAY THEY MAY DISRUPT THE FLOW OF TRADE TO THE ISLAND DUE TO A LACK OF FISHING LICENSES GIVEN TO FRENCH BOATS. SHELL RESPONDED TO EXTERNAL PRESSURE SETTING A MORE AMBITIOUS TARGET FOR CUTTING GREENHOUSE GAS EMISSIONS FROM ITS OPERATIONS. THE ANNOUNCEMENT CAME HOURS AFTER WORDS THAT ACTIVIST INVESTOR DAN LOEB HAD TAKEN A $750 MILLION TAKE AND SHALL -- INVESTOR DAN LOEB HAS TAKEN A $750 MILLION SHARE IN SHELL AND IS PUSHING FOR A REORG.
-- MADE MORE THAN $154 MILLION LAST YEAR, MOST OF IT IN STOCK AWARDS. HIS NEW COMPENSATION WOULD BE A LITTLE MORE THAN $62,000. LAST WEEK, ACTIVISION FAILED TO CONVINCE A CALIFORNIA COURT TO TEMPORARILY HALT A SEXUAL HARASSMENT AND DISCRIMINATION CASE. 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'M LAURA WRIGHT. >> YOU ARE STILL GOING TO HAVE INFLATION ACCELERATING.
I THINK A LOT OF PEOPLE WILL LOOK AT A DECELERATING GROWTH PICTURE, BOTH EARNINGS AND GDP, SO NEXT YEAR IS GOING TO BE A TRICKY TIME FOR THE MARKET. TOM: WE FOCUS ON THE U.S. MARKETS AND DECELERATING GROWTH. GDP REALLY A FRONTLINE STATISTIC. RIGHT NOW, IT IS THE ECB, AND WHAT IS SO IMPORTANT HERE WITHIN THE HEADLINES THAT COME OUT IS THE EURO PRETTY MUCH SOLID, $1.1611.
I SEE BARELY ANY CHANGE THERE AT ALL. WE WILL LET THEM STREAM BY ON TELEVISION. WHAT YOU NEED TO KNOW ON RADIO IS IT IS A SERIOUS MANAGING OF THE MESSAGE BY THE ECB. WHAT I DON'T SEE OUT THERE IS ONE OF THOSE HALLMARK DRAGHI-LIKE HEADLINES TALKING ABOUT 2022 OR 2023 OR 2024. LISA: DO YOU THINK CHRISTINE LAGARDE WANTS TO MAKE HEADLINES TODAY OR KEEP THINGS THE WAY THEY ARE? RIGHT NOW SHE CAN GIVE THEM MAXIMUM SEX ABILITY. SHE WANTS TO MAKE NO HEADLINES.
THIS IS A GOOD START. THEY ARE NOT CHANGING ANYTHING. REALLY, IT DEPENDS ON 8:30. TOM: A LOT OF ADVERBS HERE AS WELL. MODERATELY, INFLATION MAY MODERATELY SUCCEED -- MODERATELY EXCEED THE GOLD FOR A TRANSITORY PERIOD. KAILEY: THERE IS. [LAUGHTER] WE KNEW IT WAS COMING, RIGHT?
IT HAS BEEN THE MESSAGE OF THE ECB, ONE THAT I AM SURE CHRISTINE LAGARDE WILL REITERATE. TO LISA'S POINT ABOUT NOT WANTING TO MAKE ANY HEADLINES, DOES THAT MEAN CHRISTINE LAGARDE DOESN'T FEEL THE NEED TO PUSH BACK ON THE MARKET AND THE PULLING FORWARD OF EXPECTATIONS, OR WILL SHE PUSH BACK AND SAY WE ARE NOT ACTUALLY GOING TO HIKE BY 20 BASIS POINTS BY THE END OF 2022? TOM: THE RANGE OF EURO VERY TIGHT, $1.1613, FRACTIONALLY ELEVATED OUT TO FOUR DIGITS AS WELL. RIGHT NOW, MARK MCCORMACK JOINS
US. HE HAS BEEN ABSOLUTELY BRILLIANT ON DOLLAR RESILIENCY, THE GLOBAL HEAD OF FX STRATEGY AT TD. WE'LL TALK ABOUT EURO AND THE REST DOLLAR, THE PRESIDENT AT 11:30 TALKING ABOUT FISCAL AMERICA. BUT WHAT I WANT TO TALK TO MARK MCCORMICK ABOUT IS THE FUN AND JOY WHEN THE FACTS CHANGE, I CHANGE.
YESTERDAY, YOU GOT A LOVE NOTE FROM THE BANK OF CANADA THAT THE FACTS HAD CHANGED. WHAT IS IT LIKE ON THE TD DESK WHEN THE FACTS CHANGE, AS YOU SAW FROM THE BANK OF CANADA? MARK: THE EDGER STING -- THE INTERESTING BIT IS MOST OF US AREN'T ON THE FLOOR ANYMORE, SO WHAT YOU SAW FROM THE MARKET IS WHAT I THINK PEOPLE ARE REALLY
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