tv Bloomberg Surveillance Bloomberg September 1, 2021 6:00am-7:00am EDT
stagflation is something we really have to monitor right now. >> it has an impact on very specific services. >> inflation will remain elevated, i think probably looking at a 3% inflation. >> we have time before it will become the major driver again. >> we have the fed missing their inflation targets. >> this is "bloomberg surveillance," with tom keene, jonathan ferro, and lisa abramowicz. jonathan: hello, september. good morning, good morning, this is "bloomberg surveillance," live on tv and radio, alongside lisa abramowicz and tom keene. i am jonathan ferro. another month of gains. tom: ben laver top text, the good folks over at credit suisse, expands the deal, a very careful short note but the idea of getting to 5000 15, standard
and poor, a solid 10% move over what, john, the next 14 months or so? he says it is earnings, earnings, earnings. jonathan: seven months of gains, tom, and the fed has capitulated. wells fargo looking this year but next year looking for a move down toward that kind of level, and that would be an annual decline for wells fargo and chris harvey. that raises the question, tom, if the fed starts paring back accommodation, what does it mean for that market, despite these market gains? tom: while you were gone on your three week trip working on the galley for drawdown meditation, what we heard from people was a raging debate, all of this economic battle, jackson hole and the rest of it, into how to the markets respond? the markets are speaking. they are not working.
jonathan: tom, i thought we had a moment, 3, 2, 1, om, and then lisa abramowicz. [laughter] lisa: the one thing i am looking for in the theme, frankly, of the day, and all the data that is coming out, as how much of the delta variant has dampened the economic momentum, and that, i think, is going to be the theme. it does not necessarily mean a decline, but it is the pace of deceleration. jonathan: here's your equity market. the price action looks like this. we advance .33 percent to kick off things in the month of september. a new camp in the bond market. we are camping around $1.30. yields unchanged for the session, but we have had the shift higher, tom.
tom: the value has been very range bound, jon, but it is a new place to become away from that 1.12. jonathan: tamping out around 1.30. tom: we have been doing the same thing. it has been rampant down quoting. people love it. jonathan: they love it. my apologies. i am back. tom: deviations out on the dow, are you ready? 37,500. jonathan: is that all? tom: that is the trend right now.
higher, higher, higher. lisa: tom keene was camping out under any capacity. i will just say that image will not fade today, throughout the day. today, i am looking at a lot of economic data, and particular 8:15 a.m., we get a preview of what to expect on friday. we get the u.s. adp private employment. actually come again, exceeding 600,000, twice as much as the previous reach. again, the theme of the day is how much has momentum been dampened by the delta variant, by the worries about higher inflation? also today, at 10:00 a.m., i am particularly interested in the ism manufacturing data coming out of the united states, after we saw input prices climb yet again, unfilled orders rise to a record in europe overnight. how much of that is what we are seeing in the united states? how much is it crimping the ability of people to go out there and buy stuff. toilet paper, evidently, back in supply. why are we talking about toilet paper? a virtual meeting to discuss those october supply increases, production increases. they brought about 45% of all idled output back online since
the peak of the pandemic. they were expecting to bring that back out, and the expectation is they are not going to change that. but really, again, jon, the pendulum of supply and demand here, as we see people cancel travel plans, how to gauge that delta variant, how it has impacted travel, and how much people are canceling from their trips? jonathan: it is painful. we are scraping the barrel. tom: no pun intended. [laughs] jonathan: i saw it in the "wall street journal" as well it i think you are being loose with the word "big story." lisa: [laughs] you have been out for a while. this is indicative of the feeling of where we were back in march, back in april, this feeling that we are going back in time, and i think that is significant, jon. jonathan: lisa, thank you. tom: jon, for those of you worldwide, jon gets lisa so riled up. [laughter] jonathan: hey, listen.
a record big story. payroll, the range is still pretty wide, 600,000 separating the low and high come of the low b and 400,000, the high being one million -- hgh-- high, the low being 400,000, the high being one million. tom: again, the dispersion. jonathan: let's check in with roger bootle, chairman of capital economics. roger, if you wrote that book today, what with the title be? roger: i might attempt to call it "the rebirth of inflation." i probably would have adopted a different title. the title time, 1996i published it, the bundesbank was upset
with me. i worried about inflation, just so you know. tom: roger bootle, we had jeff lacker where inflationistas got it wrong, and i talked about jackson hole and modern monetary theory. in the last years, have we simply moved our price dynamic over to a balance sheet dynamic, whether it is fiscal policy, or is it all debt that we see out there? roger: i don't think either of those things. what has happened is a combination of two things. first of all, we continue to have serious supply factors, which are bearing down on inflation, and those are things i and identified in the middle 1990's. they have been continuing. for a variety of reasons, we have had a relatively weak
demand, and then countries like the u.s., think those two conditions are now changing, and the u.s. economy is surging. you have got this massive stimulus from policy, at a time when i don't think we have quite the same downward inflation on prices, and many cases, there are upward pressures on prices. as for mmt, i think it is, quite frankly, profoundly misguided. lisa: roger, can we get sustained increases without more wage inflation? based on where we are, wage inflation that we are not seeing? roger: well, you can in some circumstances. i think they are pretty unlikely. you have to have either a very marked shift toward profits or big increases in external costs, which are pushing inflation for considerable time. i think, really, to continue with high inflation, we are going to be wage inflation. at the moment, there are some
signs of that. it depends on where you look. in some countries, wage inflations are going up quite a lot. it makes it difficult to forecast the policy. the answers aren't always obvious. they aren't given to you on a plate. you don't suddenly think the whole process will follow immediately. it happens over time, gradual. tom: roger, one question, very important here, you worked at the bank of england, helping governor bailey. do you presume smooth curves and smooth reaction function when we are finally over with the stimulus party, or do you have an angst out there about jump conditions we do not see coming? roger: well, i am worried about a jump. this is one of the reasons i would act on policy sooner rather than later, in both the states, actually, and the u.k. the current levels of interest rates are absurdly low. the monetary stimulus is
extraordinary in the course of history. we have got to move back, and i would do it sooner rather than later, and do it gradually come in order to avoid the thing you're referring to, tom. that is to say, at some point or another, we get a shock, and the markets are going to overreact. jonathan: roger, so good to hear from you, roger bootle, capital economics founder and chairman. tom: while you are gone, jon, seriously, a huge topic out there, and mike mckee lined up all these fed presidents. lacker is a former official, i felt was a little more candid, but jon, it is out there against the bulls, who are extending out their x axis well out into 2022, 2024, and say it will continue. jonathan: somehow, the end of the cycle is around the corner. lisa is always thinking about that. i am not poking fun at lisa
here. we are asking that for legitimate reasons. i'm sure that will resonate with you. this time around, it is not a worry about the fed being too tight, it is about the fed being to lose, which would ultimately lead to the end of the cycle. lisa: people are saying this time is different, and it is because of the fiscal impulse in addition to the monetary impulse, and it really comes down to the labor market and how much wages go up. that is why this friday's jobs report is so important to the fed. tom: it is the pendulum of charmin. jonathan: the pendulum of charmin. tom: maybe jon does not know charmin. jonathan: believe it or not, i needed toilet paper at some point. lisa: [laughs] tom: the pendulum of the stoxx 1000. jonathan: i am familiar with charmin. tom: nice to have you back, jon. lisa: [laughs] jonathan: yields are 1.30.
it is good to be back. from new york city, good morning. tom keene lisa abramowicz, jon ferro. "bloomberg surveillance." ritika: with ferns toward news, i am ritika gupta. -- with first word news, i am ritika gupta. the taliban supreme commander will be the top leader. what to do about afghanistan's struggling economy. new orleans is hot, hungry, and most likely will be without electricity for days to come. no power since sunday when hurricane ida came ashore. utilities have not been repaired. it is unknown when repairs will be complete. they say to stay away from now -- for now. the u.s. supreme court took no action as the most restrictive abortion law in the nation took effect early today. the texas law bans abortions
after the sixth week of pregnancy, a time when many women do not even know they are pregnant. the supreme court could act today, although there is no firm deadline. in china, new outbreaks of the coronavirus halted production this month. global news, 24 hours a day, on air and @quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am ritika gupta. this is bloomberg. ♪ itika gupta. this is bloomberg. ♪
out to do in afghanistan over a decade ago, and we stayed for another decade. it was time to end this war. jonathan: the president of the united states with what many has described as his most forceful address to date. from new york city this morning, good morning. alongside tom keene and lisa abramowicz, i am jonathan ferro on s&p, we advance .33% after closing out the month of august. in the bond market, yields are little bit higher, but half a basis point, 1.30. payrolls report coming out this friday. before we get there, u.s. dollar 1.1821. the isc members as well -- the ism numbers as well. tom: how big are the ism numbers? jonathan: high-frequency data, so to speak. the monthly data i think is important, tom coming to get a read, not just for the united
states but also the pmi out of your band china. the nonmanufacturing pmi out of china, service is starting to slow down. tom: e.m. tensions are tangible out there. we have damien on a sabbatical. that was informative. jon, are you doing "the real yield" on friday? jonathan: at 1:00 eastern, and then i will start next week. i negotiated that yesterday on my return. that was conditional on my return. tom: "the real yield." jonathan: thank you. i'm sure you will do a great job. do we want to get our guest down in washington? [laughter] tom: itom: was told you were going to go to anne-marie -- ann marie. annmarie welcome back. jonathan: thank you, thank you. i did not get that from tom, i
get that from you. what was the response down in d.c. and all around this country? annmarie: certainly, and he vehemently, jon, went into his critics about, one, the hasty withdrawal. he says he respectfully disagrees, that even if this was done in june or july, he would have still had the mass flow of individuals to the airport. and then of course he outlined it once again, his withdrawal from afghanistan and why he does think, for the national security interests of the united states, this is the best choice. you have some in d.c. who say this is time to end this war, and they agree this president, but then you have the likes of richard haass, immediately taking to twitter, the ambassador of the atlantic council, talking about there was a third choice the president did not advance, and that was maintaining a small troop base in afghanistan. we had the previous administration of troops and what we had on the ground was
just a few thousand, he said this could have been a third option. the president did not go here. but it was a very forceful speech. tom: annmarie, what is our intelligence in afghanistan now? how do we get smarter about the new taliban and a new government? annmarie: it is a very good question, and it is very uncertain. recently we had cia director bill burns testify in the senate, saying it is just a matter of fact, without troops on the ground, we will have less of a pulse on the intelligence there. what comes next is a question in terms of how do you have this over horizon to do these airstrikes, to be able to implement and strike isis-l which the president said yesterday, we will come out of you. does the -- we will come after you. does the president mean a more trustful dialogue with pakistan? this is something we have to wait and see. tom: annmarie, we had a fabulous day of conversation yesterday with john bolton, the congressman from ohio, who
terrific military background and military, and on and on, and the constant theme that. this is biden alone the pentagon is not on board, the state department is not on board, many experts in the white house are not on board. is that your reporting? annmarie: the president said yesterday when he decided to withdrawal, which he also went through the timeline in terms of his options, we have to remember the prior administration, all last year, whether it was in public, reports of the trump administration dealing the taliban, he says that they were on board in terms of the execution. he went with what the military national security and state department, but of course they call that the blob in d.c., the foreign policy individuals. and that, certainly, the rhetoric from them is that there should have been a presence, and they would want to maintain a presence in afghanistan.
. at the end of the day, the president also just realizes that whether or not americans agree with the hasty execution withdrawal, by and large, americans want to get out of a 20-year war. lisa: meanwhile, president biden' approval ratings has taken a real hit. real clear politics showing president biden has a lower approval rating of every postwar president apart from trump and gerald ford, at this time in office. at this point, is it stabilizing, are some of his communications helping to fortify some support? annmarie: in terms of the polls? just not sure yet that it is working. i imagine one thing americans will be keenly looking out for is the remaining 200 individuals on the ground. the president, in an abc news interview on august 18, said truthful stay until all americans are out. on august 20, i was in the room, he said make it clear, we will not leave until all americans are out. but there are still americans in afghanistan, and there is no diplomatic presence, and there
is no military presence, so i would imagine his next execution to make americans who want to get home we'll get home safely will impact the president -- will get home safely will impact the president. a list of what americans care about them afghanistan did not make it. it is covid, consumer prices, getting kids back to school. lisa: people also care about things like hurricane ida, which left a lot of people in louisiana without power and facing flooding. there is a concern here about how president biden can harness this to get the corporate infrastructure plan, which could bolster some support to protect against excessive flooding or outages, like what we are seeing now. how much is that taking a front seat in washington, as they try to push infrastructure forward? annmarie: i imagine ida is certainly taking a front seat in washington. yesterday, we spoke with senator cassidy in louisiana. he just got his power back on the evening before. he joined us on the show. he talked about post-hurricane
katrina, they fortified levees and pumps that did not work. this is potentially a talking point for the president on why this bill should be passed. bipartisan infrastructure bill has bipartisan support. that is bridges, levies, pumps, potholes. it is the stock infrastructure which potentially ida could help in terms of the climate team is sure. many -- client change issue. many scientists say the speed at which ida hit was definitely fortified and much stronger due to what we have seen in terms of global warming and climate change over the past decade. jonathan: annmarie thank you, our washington correspondent, on the latest in d.c. tom keene with what we have not been talking about over the last several weeks, and that is what lisa mentioned moments ago. tom: absolutely. it has been day yesterday. jon, frankly, on september 1,
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jonathan: live from new york city, for our audiences worldwide, good morning on tv come on radio. futures positive, .33%. tom: september, jon. jonathan: i'm with you. on the same day, and the same month, the same calendar. we have a 10-year unchanged, bank of america comes in, from 1.90 down to 1.60. a look now from the look forward, seven-year yield, tom, basically unchanged. the italian 10-year yesterday, a
little bit more of a hawkish tone coming out of the ecb yesterday. not so much this morning. it is what it means for the italian bond market. i did not see a big move in the eurodollar. yields are back 71 basis points. once again, we are talking about the same thing, in europe, it has not really changed much. the italian data seen by many as a credit callout, and that is the thing for many, tom. tom: they really want to emphasize this. the financial media looks at the standard and poor, the dow, but jon, it is just as important when the houses move their yield debts around, and i think you do a great job there -- jonathan: thanks. tom: in this case, 1.90, down to 1.50. jonathan: tom, when i get a
compliment from you -- tom: once a year. [laughter] jonathan: disingenuous or not -- tom: thanks so much. ronald temple has been here before. with lazard asset management and head of equities, he is not only managing institutional money up and down but also the emotions of that. ronald temple joins us this morning. ron, i love in your notes the word "normalization." you say we have many normalizations going on right now. what are those? the important one ronald: ronald: is the labor market normalization. this is where the rubber meets the road we have children, in theory, going to school. hopefully that works out. we have the return to the office or the return of the labor force. i think we underestimate how much has been tied up in caregiving the last 18 months. this is that time when return to
school plus the expiration of the expanded unemployment benefits should affect millions heading back to the labor market. one anecdote here, we are 1.7 million workers below where we were in january 2020 in terms of the total number of employees that normalization. is important the second is a normalization of consumption. the consumption of goods is still down 7%. and it also matters, by the way, where we consume those goods, not in midtown manhattan but in new jersey. tom: in deutsche bank, we read like gospel, folks, years ago, off the fleet desk a million years ago, and the one thing, ron, you and i have seen over the decades is corporations adjust. how are corporations adjusting right now, coming out of this
pandemic? ronald: you definitely see corporations adjust in terms of how they handle workers. you have got quite a few companies who are now saying three days and we could spend two days at home. it is a major change, by the way, for the economy of new york city, think about it, if you are working from home two days a week, that is two days a week you are not buying your sandwich downstairs, you are not commuting, taking mass transit. i think companies will have to navigate that return to work, and they will have to think about technology budgets, travel budgets, and they will navigate this. frankly, i think they have done a pretty good job so far. lisa: ron, i want to dig into two points you mentioned, especially with the childcare issue, you mentioned supply chain disruptions, and we will get to that in a second. i do wonder, when it comes to a labor market, how much has permanently changed, and how
much will people realize there is not as much flak? women are more likely to say that they want to stay home more permanently than go back to work after dealing with what they debt with over the last two years. how much are you looking at a permanent shift that changed things as we know it? ronald: this is one of the most challenging topics in the labor market right now, how much of this is a return to what we called normal. to your point, there might be quite a few parents, women and men, who stayed home with children and think that their lives have been more fulfilling in that regard. the other thing that has been interesting, in this regard, is wrong people who are -- in many cases, they are going to say you know what, i am going to throw in the towel and -- towel
and enjoy retirement longer. as chair powell said friday, the real unemployment rate right now is more like 7.5%, 7.4%, to be precise. when you add back in the number of people who left the labor force who are no longer being counted as unemployed or in the labor force, that is now 3.5 million, 4 million people, they are delivering childcare or caring for elderly relatives or other people who might be immunocompromised. lisa: from an equity markets perspective, this matters, because ago to the cost companies pay in order to keep employees and how much that will increase. how was this factoring into your assessment of which companies you would rather own into? ronald: so, i am still of the believe, by the way, and i said earlier that we will get a much better signal early in october when we get the job data for the month of september. this friday's number is important, but this is a measurement in the middle of august. when we get to the week of september 12, that is when the
labor department will measure unemployment for september. we will get a perspective of employment benefits as well as a supply of labor. lisa: forgive me for interrupting, but a lot of people cannot afford to wait. we have to get ahead about. what do you do now, as an equity strategist, without this key information? ronald: very important. once we get the data this friday, we are going to be watching what we hear from companies. what we see so far is at the low end of the spectrum, the highest spectrum of wages and the low end of wages. the highest we have seen for years, that is not new. with the expanded unemployment benefits, there has been quite a bit of price pressure for companies to have employees between minimum wage and $15 an hour. i think that is a pressure point we are watching. we are also watching cost pressure in relation to shipping and transportation. you hear a range from dollar stores to the semiconductor
supplier, we are trying to figure out how transitory are they and how long will it take and which companies can navigate this the best? tom: ron temple, we had a guest talk about price takers and the luxury of being a price maker. are the big, popular tech stocks price makers? i mean, amazon and apple and the others, do they have the equivalency of being a rubber plantation in singapore? ronald: it is incredible in terms of some of the stats. if you look at the market, real gdp in the second quarter this year's 2% higher than it was in the second quarter of 2019. strip out the pandemic and go back pre-pandemic. the real economy up 2%. s&p earnings of 26.5%. tech earnings up 60%, in terms of the biggest tech companies. so you have seen some pretty incredible price making, you could argue, and parts of the tech sector. i do think there is an argument to be made that some of these
coming to have yet again demonstrated the power they have in the market and their ability to navigate in the pandemic and then basically keep the market share they gain whenever we recover. jonathan: hey, ron, good to catch up, labs are capital -- lazard asset management. there is real debate around that , tom, still, going into payrolls friday. tom: we had a heated interview, i cannot remember, jon, but they were heated, that the labor market is much more tighter than perceived. jonathan: that pushback coming from the fed hawks, too, lisa. lisa: a shift of people retiring, people choosing to stay home, meaning there are fewer available employees. what does that mean? that means higher wages per uc walgreens following cvs, increasing the minimum wage to $15 an hour could how much is that the bare minimum? how much will we see that as
they compete for employees? tom: small caps up .7%. i'm sorry. this is a bull market. jonathan: nasdaq did nicely last month. tom: i mean, come on! the gospel, as we started summer, is tech is dead. jonathan: morgan stanley asking that question, too. we have gone from reopening to the midcycle transition. they are still trying to figure that out, tom. tom: for those of you who follow us on more than an hourly basis, from been labor over to mike wilson over at morgan stanley. there is a debate out to the end of the year. jonathan: we are trying to work out the what next after the midcycle transition. lisa:lisa: there is thinking that with the big tech companies, there are few employees relative to the cash flow. that point is going to be more and more salient as we start to see these, because they will be
more immune to that pressure. they have better deals with the tips of players, for example, and the automakers. -- chip suppliers, for example, and the automakers. jonathan: morgan stanley put up sellers again for the analyst classed. we need the associate class to flex their muscles, if you are middle-management at the bank right now, you are doing all the work. lisa: and, frankly, the carry through, the bleeds through, the minimum wage increase is
dramatic, because you're right, all of the people and the others of the chain say hey, what about us? jonathan: looking down at the analyst chain saying, you don't want to do the work, so shouldn't we get paid more? and then morgan stanley and the ceo's are saying, tom, get into the office, and they are like, we know how to get our jobs. you want us to come back and train the people who just got a pay rise? the equity market up 14 on the s&p. i am sure those across wall street are saying, keep going. lisa: [laughs] 100%. jonathan: from new york city this morning, good morning. this is bloomberg. ritika: with the first word news, i am ritika gupta. president biden is defending the withdrawal of afghanistan, saying he is not going to extend the 20-year war forever. in california, firefighters battle high winds for people waging fire in the south lake tahoe. they have mostly been able to keep the fire away from homes and cabins, along the southern shore of the lake. the blame is on one of more than a dozen wildfires we have had a california. $30 billion, a potentially fatal blow knitting into the trust to page shareholders before final
approval of a deal. the move opens the door for canadian pacific to revive its own offer. european factories with unfilled orders rise to an unprecedented level, as they struggle to meet demand will having to deal with the buckling of the global supply chain. a shortage of production relative to orders, a record set back in july. global news, 24 hours a day, on air and @quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am ritika gupta. this is bloomberg. ♪ this is bloomberg. ♪
covid nevertheless. what we do know for sure is that vaccination works and people want to get vaccinated. it is the only way we will get past this. jonathan: that was senator mitch mcconnell of kentucky. from new york city this morning, good morning, alongside tom keene and lisa abramowicz, i am jonathan ferro. we kick things off for the month of september. in the bond market, unchanged, yields on the 10-year yield, tom, 121, and the euro-dollar just above 1.18. 1.18.19. tom: internationally, dr. bhakti hansoti, internationally experience from moving from disease to disease. dr. bhakti hansoti, boosters are all the rage right now. let's go back to microbiology
101. the thing called the tiger or the concentration of whatever the antibiotic is in the system to ward off the plague and bacteria. do we care about the tighter concentration in the systems of mrna virology vaccines? dr. hansoti: we care about the antibodies that are produced in response to the vaccination, whether that be the mrna vaccine or the other vaccine. there are two types. we do not know right now what is the critical amount of antibodies needed to prevent you from getting, transmitting covid to others. we do know that those anti-bodies, titer, go down over time, and the lower your antibiotic titer, the less
likely you are -- more likely you are to get sick with covid. tom: i guess we are on schedule with boosters. there seems to be trepidation. what you say for people who say wait, one-shot, to shot, why do i need a booster? dr. hansoti: you absolutely will need a booster. the question has never been -- what we need a booster? the virus changes, mutates over time, as we know, boosters are necessary. the question is -- when do we need a booster? when you have a global supply chain shortage, should we be prioritizing boosters or unvaccinated individuals? who should be getting boosters and what the dose of that booster is. also, with the covid vaccine, there are numerous different types of vaccines, so does it make sense for the third shot to the same as your first and second shot, or should we be giving you a different type of vaccine? lisa: dr. hansoti, before we get to boosters, what part you get
vaccinated before we see a big reduction in transmission? israel recorded its highest ever caseload, even though it has a pretty high vaccination rate. dr. hansoti: sure. the issue is there has been lag time. there vaccine rate went up as the number of cases were going up. it takes time for you to build an antibody response. you get a second shot, and you have a good response. i think the last issue with the israel data, there is no magic number. upwards of 80% is what we anticipate. lisa: how close are we to accelerating and ramping up to that? i saw europe celebrated the 70% rate overnight, basically saying, "we are getting there," and yet case counts are still concerning. dr. hansoti: again, it is due to the lag time, whether the measure is one-shot versus two shots and two weeks after, which is when you get the immunity.
we are getting there. vaccines are effective. they have gone up in the united states. there is a bigger drive in baltimore. there is an initiative where they come to your house and vaccinate. they are trying to meet people where they are at. i don't know. i worry about the large proportion of nonbelievers, conspiracy theorists who are absolutely adamant they cannot be vaccinated. there is a fair number of that in the united states. tom: bhakti, september 1, is the delta variant crested? i mean, what is the first and second derivative on the new spike in hospitalizations and such? dr. hansoti: there's two ways to look at the data. the first is relative to dominant variant, yes, delta is a dominant variant, however, cases still go up. it is too early to call. we are moving toward the peak,
and it is not quite reached yet. tom: you have got events with 30,000 people with no masks on yet a certain number of people are absolutely hysterical that everybody has to have their mask on. jon ferro is confused. lisa abramowicz is confused. i am confused. dr. hansoti: you know, it is about individual perception of risk, and this challenge has always been, if, in this country, we have always struggled to have ed universal policy that is -- an universal policy that is accepted by all. individual perceptions of risk, or present the ability of change. i would say right now, the recommendation is absolutely have your mask on, especially if you are indoors. if you are at an outdoor social event, have your mask on unless you can create social distances of greater than three feet. we have to go back to basics. jonathan: ok.
i wish we could make it simple. dr. bhakti hansoti of johns hopkins. we are not where we hoped we would be at the start of the year, looking at the final order of this year, tom, as we look to wrap up the final month of q3. citi is down 20% with the 21 hi. delta airlines, to be more specific, and the airlines have really struggled off of the story. tom: i know you hit three countries, seven beaches -- jonathan: i wish. tom: what did you actually learn traveling? jonathan: we have not sorted this out. i think everyone who has traveled knows that. one thing we have not come to grips to his any reciprocity between the united states and europe. tom: there we go. jonathan: europe has broken down again. things are not looking good as far as they travel situation is concerned. the "financial times" has led with an essay this morning, an opinion piece. here is the quotation on the
relationship between the isas in europe, and more specific, the relationship between europe and the president of the united states. "being likable is not the same thing as being a good ally." on that count, your pass started to see continuities between biden and trump -- europe has started to see continuities between biden and trump. tom: i think it is clear, folks, you know, jon, the three of us go over and do london coverage, lisa and i can come home, september 1, you can't come back to your second home, right? jonathan: that is right, tom. i still can't come back. a third country, say turkey or mexico in a couple of weeks. tom: why? jonathan: is it politics or is it science? i do not have the answer, unfortunately. i wish i did. from new york city this morning -- it is good to be back --
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>> in the short-term, stagflation is something we really have to monitor right now. it has an impact on very specific services. >> inflation is going to remain elevated. we are probably looking at 3% inflation. >> there's owing to be a time when the fed becomes the major market driver again. ex there's a 20 year history of the fed missing inflation targets. >> this is "bloomberg surveillance." jonathan: coming off seven straight months of s&p gains. good morning, good morning. i'm jonathan ferro alongside tom keene and lisa abramowicz. tom, the rally continues. tom: i think when you left it was a number of difficult days.