tom: why? alexander: i think we human beings have a tendency to over rationalize the past, over dramatize the present. tom: that is the americans. what does everyone else feel? [laughter] alexander: the starting point is that the war in ukraine, we did not think that conventional warfare would come back to the european borders because the cost is so high. but the reason we don't see this happening as a world war is that we will see a split europe. on one side you have russia which is aggressive, imperialist, and revisionist. on the other side, you have 40 european democracies. i think ukraine will grind this out and this will not spill over to her world war iii. lisa: how much can the u.s. be a leader if there is such a fisher within the nation -- a fisher within the nation -- a fissure within the nation? alexander: the u.s. has done very well. the u.s. is able to bring nato together, but u.s. society as such is quite split. did my undergraduate work in greenville, south carolina. [laughter] li

tom: thank you so much. when i was choking on is i read geoffrey yu's research report, and this is without question the most controversial conversation here in davos. geoffrey yu is brilliant with bny mellon, and you say they are wrong. all the people doubting dollar intervention are wrong. you mentioned giant frankel of harvard, and you say we need to start thinking about a plaza accord of 2023. why is the dollar to strong? geoffrey: the dollar is too strong in terms of valuations, but the u.s. needs to figure this out on its own accord. the dollar itself and the fed is not really going to matter in terms of financial conditions. look at the four pillars of financial conditions. fx our rent -- are ranked last. europe are finally changing their tone. they need a stronger euro to bring down inflation, but they need to realize this strengthens consumers intimate as well as the purchasing power. this is very different compared to several decades ago. when you think about what each country needs for themselves,

tom: it's a gamestop? [laughter] jonathan: it is in real profit, ash martin: isn't -- martin: it is in real profit, not speculative. so there's been a step change in the axis of funding to the best hundred been orders, and economies have formalized. you can't evade taxes anymore. all of a sudden, 80% of companies who were formerly half informal couldn't do it. lisa: does general atlantic think that latin america will emerge stronger or weaker from the current inclusionary pulse that is allowing their experts to be that much more valuable? martin: latin america is about 10% to 15% of what we do globally. in the next three years, brazil will benefit from the commodity cycle. it is a net exporter of commodities. that is a great tailwind. mexico will benefit from near shoring. these global macro tendencies will benefit the two largest economies represent six to percent of the gdp, so i think in this storm, latin america is not such a risky place. tom: i've got 14 more questions. can you visit us in new york? m

they definitely do, tom. i would say, by the way, it was just debated off the record about 50 minutes ago, they still said or told me, and i think it is remarkable, the u.s. has proven to be the bullies of the world. we talked about a year of leadig big foreign affairs. today, i heard from an official telling me that the intelligence was on point, it was perfect, they got it right. the timing was right. we spoke to ukrainians who say it is not just the weapons. it is the intel that the u.s. shares with us. it allows the ukraine to stay very competitive. in principle, the ukrainian should have lost weeks ago. this was an army that was almost outnumbered 10 to one. >> this is the international scene. on the domestic scene, we are an hour towards the labor market report that is expected to come in with another strong print how is the united states going to spin this when there are these constraints pushing up inflation, and you see the wage inflation on top of it. emily: we are going to see joe biden continue th

tom: very important. look for our technology coverage across bloomberg intelligence on vmware and broadcom. futures up 25%. -- up 25. always an important conversation, geoffrey yu, bny mellon. ritika: keeping you up to date with news from around the world, with the first word, i'm ritika gupta. huge transaction in the tech industry. broadcom has agreed to buy cloud computing software company vmware. the price, about $61 billion in cash and stock. vmware created the market for a type of software that lets businesses run corporate networks more efficiently. in china, the premier warned of dire consequences if officials don't move decisively to prevent the economy from getting worse. he told thousands of officials it recession must be avoided. apple is taking a conservative stance when it comes to building iphones this year. bloomberg has learned the company is asking suppliers to assemble roughly 220 million of the devices in 2022, about the same as last year. the mobile phone industry has got off to a diff

tom: i think so. chuck: i actually went to the game in new orleans and cheered them on, and they did a great job. they had a wonderful season. tom: you were there in mathematics. you go in your freshman year, calculus of one or two or three levels, and the talk about the first derivative and the second derivative or get i would say this to john chambers as well. you are leading the third directive -- the third derivative at cisco right now. what is your day like, trying to figure out where the stuff is coming from and where it is leaving from cisco to your valued clients? chuck: first of all, thanks for having me. it is good to be here. we have an incredible team on the supply chain side. before this crisis we are currently facing in the components world, the endless firm that rated our supply chain number one in the world two years in a row, my team thinks that was the kiss of death because the last year has been very unfortunate, but they do a great job. so my days are really about how do i help the

tom: maria tadeo joins us for the latest. juliette saly is in singapore with the latest and asian markets. they are failing to live up to their name in terra. it triggered a flight from many popular digital tokens. let's bring in andrea flock -- andreea papuc. andreea: the market remains -- it is stable to for stability but is not stable as it broke that in the u.s. dollar. once that was broken, it is done. it has undermined confidence in this. this is at a time when assets are being battered by concern about inflation and higher interest rates. this is a volatile class. manus: dialing up a death spiral. coalitions will be mind. april court rose faster than expected. that is keeping pressure on the fed to be aggressive. let's get to our chief asia correspondent on the case of the data. what this is tell us about what they need to do, the direction of travel? enda: plenty to do. very broad-based gains. they are 18%. shelter and cost of new vehicles is also up. prices really hit consumers pockets. there are signs that inflation

tom: i am trying. kitty johnson on the train with him, you have got to believe with the news flow we look at, you go, really? this is the guy that needed a quiet train ride? lisa: he did. he didn't get one. he was trying to give a feeling of confidence amid a difficult leadership right now. tom: a challenge to say the least with kitty on the train, the prime minister of the united kingdom. >> it is important we do not get lulled because of the incredible errors of the ukrainians in pushing the russians back from the gates of kyiv. because of their amazing valor of president zelenskyy, we should not believe this problem has gone away. on the contrary, i am afraid that putin, at great cost to himself and his russian military, is continuing to chew through ground in donbass. he is continuing to make gradual, slow, palpable progress. in that thought, it is vital that we continue to support the ukrainians militarily. indeed, what they need now is the type of rocketry, a rocket system, mli's, where they are

tom: the money is, the day about my ella tom i enjoyed a 93% drawdown as well. david stubbs is so chiseled, he is on the palatine about 11 hours a day. jonathan: he joins us now. david, we will not talk to you about your workout regime. we will talk to you about this market. it has been brutal. i want your thoughts on what has happened and how you are allocating capital right now. david: it has been brutal for equity and debt. we have seen is the creation of significant value in the fixed-income space. we are now starting to move some of our cash, our short-duration fixed-income out of the curve. yes, your bond yields could go higher, we have asymmetric return profiles in the government bonds around the world. you could lose a couple of percent if we see basis points up from here, but if we do see a growth scare or recession next year into 2024, you will get a double-digit return on those government bonds. we are calling now for adding a little bit of duration in portfolios. on the equity side what we are seeing is a bit of a morph from the fears of what the cen

tom: down 50% on that austrian peace -- piece. jonathan: this is painful. tom: 60% annualized. jonathan: one thing that stands out to me, the german two-year. this is quite the move that we have gone from positive 28 basis points from negative one full percentage point in the pandemic. that is a massive change. the ecb has been largely left out of the conversation, but think about what's happening. last really a raising interest rates -- australia raising interest rates, the whole world is raising interest rates. that june meeting for the ecb will be huge. lisa: they cannot just say that they will stay the course, they cannot say that they will not raise rates. the euro is definitely depreciating to a point where it is getting their attention. they are dealing with an economy that is not just energy. energy is the driving force, but the recent inflation data shows it is elsewhere. jonathan: i say everyone is raising interest rates, but that's not true. the bank of japan wants nothing to do with this. tom: if i am christine lagarde this afternoon, i will focus not on euro-yen bu

tom. tom: thank you. coming up, we will round up what has been a volatile week for markets from what we expected next week as well. that is up next. this is bloomberg. ♪ tom: happy friday and welcome back to the open. we are 52 minutes into european trading day. a solid session so far with the context of the rallies we have seen the past few weeks. whether or not this is a bear market rally is one question we will ask of nour al ali coming up in a minute. one point 5% from the nasdaq futures. hawkish signals from the fed urge investors to post concessions on concerns that it will exacerbate earnings from retailers. the slump of the cutting forecast. joining us to rum -- some it all up is nour al ali. first off, let's kick off with volatility across the u.s. data today. >> there are a lot to think that this is precisely what the market was selling this week because they are trying to soften that is why we see volatility today, but next week we buy the dip again. i do not know whether that is true, but i

tom: hostages in iran. very seriously, all across america, people thai yellow ribbons across trees for support. jonathan: i've got that bit. i did not know this on. tom: around the old oak tree. jonathan: nice. what is next? [laughter] tom: i don't know. mohamed el-erian was just like this. can we move on? jonathan: of course. tom: here to save the show, someone else who does not know tony orlando. kriti gupta with us. kriti: at least i have an excuse. i am young and inexperienced in music. the cost at the pump, how much the consumer's facing right now. let's talk about how much corporate america is facing right now. the forward operating margin looked a lot like the s&p 500 chart before the massive selloff we have seen. essentially, the story here is a lot of these companies have been able to pass on costs to their consumers and therefore are able to expand on their margins. margins hovering at a historical high going back 20 years to 2005. if you zoom in very close, you will see your to date the markets h

tom: jon ferro, lisa abramowicz, and tom keene from davos. jon is on assignment, lisa and i are here in a changed davos. the shock of may instead of january and other ideas. you know how there is a token driver. i am the token rest are. i went to bed. you are up partying all night. lisa: the davos mood is a lot more quiet sent. this is my first year here. everyone talks about the weather being former and fewer people are here. there is also a more serious tone. not only with the backdrop of ukraine, but also markets. yesterday we saw a pop. today we are giving it up. people are concerned what they're not seeing around corners with the china slow down. tom: the way we are in this bear market -- jamie dimon salvaged the market yesterday. i think that is true. we need somebody else to come out and get growthy on us. lisa: the fact that one company or one co can move the market so much -- today people will blame snap -- they came out with a letter saying the backdrop is deteriorating faster than expected. the fact that things are moving so quickl

i'm francine lacqua with tom mackenzie. tom: here are your top stories. jay powell gives has most hawkish speech yet, saying he is ready to raise rates past a neutral to save inflation. the unit of allianz will pay 5.8 billion dollars after misrepresenting the risk posed by a group of hedge funds who collapsed amid pandemic market turmoil. plus jamie dimon rebuked. a nonbinding vote rejects the jp morgan ceo's pump and station plan. -- compensation plan. francine: we focus on growth yet again and the focus on inflation and if i could wolf whistle, i would, but u.k. inflation at the highest in 40 years. tom: i would like to hear a wolf whistle. none of that within the context of the highest levels of 40 years. this is dating me, but also more importantly, points to the conundrum that the boe has with that cost-of-living crisis and what it means for real wages when you factor in what is happening with topline inflation. we had comments from jay powell saying that they will continue raising rates until he is convinced of sin stained -- sustained signs that i

tom: good morning everyone. jonathan ferro, lisa abramowicz and tom keene. from the world economic forum in davos, a very different davos this year in may, not in january. i have been stunned at the changes. i did not expect the difference in energy, the ballet of beautiful may morning. lisa: it's very different from tripping over the ice and dealing with snow and freezing. it's a very different moment in wall street. on the heels of the pandemic, a quieter davos one that is also more serious and focused. tom: you brought it up earlier. it's not a davos of catharsis out there or emotion. it's the slog in interest rates and the worries about recession. lisa: and a changed geopolitical landscape to highlight the fact that russia is not here and all that entails. what does it mean to be globalized in a world where people are trying to find how to get things quickly and reliably despite some of the disruptions? tom: -- was walking by the and he was deglobalized. we will take a quick look at markets. lisa: christine lagarde came out in a note and basically was sa

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tom: i went down in flames. jonathan: do you want to do your accent again? tom: no. it is more queens. jonathan: you want to offend them, too? [laughter] tom: aussie dollar is important. what global wall street is looking at is to triangulate comment what we are not saying with this equity carnage is the triangulation is off the u.s. 10 year yield. jonathan: the aussie story, global growth, commodities. chinese data is pretty weak. weakness we have seen in the chinese currency -- we saw the weakness in the economy, did not see it translates for the fx channel. we are now. tom: deterioration since we started surveillance. nasdaq 2.12%. the vix out three figures. on the american economy as we pick up the pieces, the chief economist of steeple joins us. lindsay, i want to talk to you about the call for a session parlor game. i do not want to take the time about who is where and -- who is where in that. how do you sit at a desk and call a recession? lindsay: we are looking at negative growth but we are not convinced we will see an outline -- an outright recession. the ch

tom: it is a lot. it goes back to deutsche bank has done, with matt was eddie leading off our coverage tomorrow, i believe. it is an actual recession call. jonathan: futures up about 0.1% on the s&p. on the nasdaq, but sadly unchanged. we will catch up with jim be uncle -- with jim bianco. mindy xu of credits we. tom: before you go, i'm getting hammered out of the twitter zeitgeist that there's way too much baseball talk. we've got to go to chelsea. i guess they are in the final things between the los angeles dodgers -- jonathan: how do you pronounce your second name, is it boldly? in this bid for chelsea? tom: the guy owns the los angeles dodgers. jonathan: the preferred bid over chelsea. i've seen numbers over $5 billion. i'm trying to nail that down. interesting because they were looking for $3 billion sterling, and at the time i thought we would have a bit of a fire sale. tom: what is the debate here? jonathan: the debate is whether he will keep the club for 10 years without selling it, and i belie

tom: thank you so much. he nails it, the messaging in davos is confusing. lisa: i think that's accurate even the potential for potential risk and how do you know that down. that is emphasized yesterday by getting a few data points including disappointing housing data and suddenly people are thinking the fed will back away. tom: well were the -- where will the bar market be in january? lisa: where will we be? tom: state with us, wonderful guests to join us in an annual visit with daniel jurgen. this is bloomberg. ♪ at fidelity, your dedicated advisor will work with you on a comprehensive wealth plan across your full financial picture. a plan with tax-smart investing strategies designed to help you keep more of what you earn. this is the planning effect. >> in the first two weeks of may, the consumer spent 10% more than they did last may on top of paying taxes. there are 8% more transactions. tom: bank of america chief executive officer, i thought he was fired up. lisa: he was talking about how the consumer

tom: one last question. the major thing lisa and i saw this week were stunning predictions on the price of energy, oil and natural gas. are you going to write this weekend about hydrocarbons? michael: probably not. tom: probably not? that is not the right answer. you are supposed to say yes. michael: energy is only 2% of the s&p 500. tom: you have to understand, casper got into union college. all you have to do is spell schenectady. lisa: michael casper, thank you so much. honestly, you asked him, are you going to be reporting on hydrocarbons? he just gave an exhausted sigh which speaks for all of us, this has been an exhausting year. tom: look at what j.p. morgan said about a clearing of the china lockdown. boom. demand comes back. lisa: that has been a huge theme this year, the one place that people have hidden is in the oil stocks. maybe it gets to be a bigger part of the index. i think it has a bigger economic implication when you talk about oil and gas and equity implications because that has already be

tom: it was a hit. jonathan: there were other songs. tom: you should have seen my hair then. lisa: we get earnings from disney, rivian, and beyond meet. they are among the stocks that did amazing during the pandemic. now down 70% for rivian. beyond meat down more than 50%. disney more of a question with streaming but the meme stocks bank have had a massive retracing. jonathan: looking forward to your coverage on that through the day on bloomberg tv and bloomberg radio. i know you are focused on the difference between what wall street will trade on today and what mainstreet feels. a big difference. when we start talking about core, who at their dinner table is talking about core inflation? tom: larry kudlow was big on this decades and decades ago and he was absolutely correct. it is a nominal statistic. phd's can go to cleveland. bill dudley, i think it is so important to get through this before we get to our good guest this morning. bill dudley focuses on what do you do when you get back to 4% inflation? even for percent could be an underestimate. the fed is still providing s

tom: thank you. let's get the bloomberg business flash with alice atkins. >> apple is lang to keep iphone production roughly flat in 2022 amid concerns that the year is increasingly challenging for the smartphone industry. the company is asking suppliers to keep at 220 million iphones. this is amid the supply chain turmoil and the work in ukraine. apple declined to comment on the outlook, which could change depending on supply chain constraints. elon musk is dropping plans for his purchase for twitter with a margin of the lows in his tesla stake. he is increasing the size of the deal to $33.5 billion. -- given the recent slide in tesla stock price. nvidia tumbled in late trade after sales for the current quarter were likely to miss projections. revenue is expected to be around $8.1 billion. china and ukraine are both weighing on its bottom line. figures in the first quarter. -- they saw growth in the first quarter. organized data in the cloud and data sales forecast show that it is raising concerns a

tom: i did not know this. lisa: there is not as much liquidity. tom: i am taking notes. this will be an interesting set of hours before we go to london. wrapped around this are the two panels i have done at the world economic forum. they have done a great job of finding experts synthesizing the tensions of their narrow fields. sir lawrence friedman is with me this morning. we talk to the finance minister of malaysia about the unique challenges there. synthesizing all this at any given bank are people like marvin love, a macro strategist and he is the one reading and listening to what the experts here are saying to come up with a market. how has it changed your market view given the crises of this may? marvin: we have had a lot to deal with and a lot to understand. i think we have been in the camp that the tightening we have seen in financial conditions and synthesizing this different inflation ramp was going to evolve the way it has. we are starting to see the substitution and a pullback in spending. having said that, the inflation story and to me more important the job

tom: good morning. from our studios in london, jonathan ferro not with us and recovering from a full english breakfast. we expect to see him on tuesday as well. we are wrapping up the week, to get to the june midyear outlook to get to the jobs report. we go back to america with chairman powell, the american labor economy. lisa: low we got yesterday -- from what we got yesterday the labor market is still incredibly strong. it's a great thing if people can get jobs but it creates another problem for the fed trying to thread a needle that is hard to threat. tom: i will steal from mohamed el-erian. key decisions matter. how do you make a key decision? the road not taken. mohamed el-erian doing his robert frost imitation. the key decisions are impossible given the uncertainty. lisa: that's the reason i find it fascinating that jay powell did capture as much attention when he said this is not going to be nuanced. we will not look at the specific drivers of inflation. we will go at it because we need price sta

>> but tom wouldn't wake up. linda called 9-1-1. >> all-star 9-1-1, what is the dress of your emergency? >> i'm in -- i'm in the parking lot by planet fitness in kingston. i was looking for my husband, and i found him in his car. and i don't know if he's breathing. >> what did you think had happened to him? >> at that point? maybe had a migraine and took some migraine medicine and lay down. >> he's not waking up, while you're waiting for the ambulance. no matter what you're doing ... >> his hands were really, really cold. and then i realized that his nails were blue. >> you've got a son somebody. >> ma'am. are you able to check to see if his chances going up and down? >> i don't think it is. >> paramedic, tim missile, was one of the first responders. >> i believe we were here within three minutes of the call. >> what did you see a soon as you arrived in the parking lot? >> mr. coleman's car was parked here, and mrs. coleman's covers part here. mrs. coleman was on the side. she was very distraught. >> did you atte

along with tom keene and lisa abramowicz. i am jonathan ferro. tom: a historic day. we are going to provide some leadership here. it is that overlay across all of the american economy. when the new is down and lift -- lisa: coming coming at 240 to 270. the higher in as far as the estimate. how much are they trying to distinguish themselves and say that lives disappointment with a live story, uber is a separate case. jonathan: there is an issue in the labor market for the likes of lyft. they are not alone. all these job openings in america, millions and people struggling to fill those vacancies. if you want to fill them, you have to pull wages up. tom: it is almost an advantage to have this lyft, uber -- because a distinction we hear from market economists is simple, the job economy is the heart of the matter, it is on fire. jonathan: later this year, do we solve it? lisa: what are we supposed to be solving at this point. how do we have job openings still hiring? companies do not plan a hiring but you are seeing all -- going up. i wonder what the fed is going to do wi

tom: dxy at 104. sterling, 122.01 right now and more important to me is watching swiss franc strength in the last few days. jonathan: futures are up 55 on the s&p. the nasdaq 100 is up by two full percentage points. looking for a strong finish to an ugly week. the 291 on a 10 year. you mentioned foreign-exchange. 107.76 on crude. it's up 1.5% on the day. tom: brent crude is getting my attention. if you are at home afraid to open the envelopes from your investment houses, this is not only the interview of the day, but the interview of the week. jim paulsen's chief investment strategist at leuthold weeden capital. he writes a complete note up and down about the courage to stay in the market. how and nine at 100% in cash right now? jim: i wish i had been all year. [laughter] i thought this would bottom out in march, so i am a little gun shy too. i look at this a little differently. everyone is looking at it like is they say cycle indian bear market coming? there's so many issues. but i look at this more

tom: very good. the vix is under 30, 20 .70, some quiet we see in the market for this historic week. right now, in an important conversation, we will go to jonathan ferro and a moment but i want to slip in one question for the united kingdom's secretary of state for business, energy, and industrial strategy, me, john, and the rest of the nation enjoying 9% inflation. i next guest is with us celebrating liverpool's dominance and more than any staying -- anything understands the gridlock of british politics. other a decade of go of gridlock nation. what is the level of gridlock right now, minister, in terms of dealing with 9% inflation? >> it is a huge challenge. it is a global challenge. we had a pandemic, we had lockdowns across the world, we had a huge surge in demand when the lockdowns were eased, and now we have this unprecedented situation in ukraine, first time in 70 years that we are seeing an actual war in europe. so these are unprecedented times in the british government is very much decided

tom: please. katie: inflation first of all is something that is very positive for commodity returns. investors have forgotten about commodities because they have not worked in a low-inflation environment. let's take oil as an example. oil prices have remained high despite very negative things like a strong dollar, weakening demand in china, yet we are still at high oil prices. what that tells me is there is still very much a commodity story that is left and i think investors have forgotten about the values commodity and a low-inflation environment. tom: i will go back to a lot of the people that invented this and the whole cta valley trout and all. do you by individual commodities as jonathan ferro does? you should see farrow over on commercial break looking at elementia him in the whole thing. do by individual commodities -- aluminum and the whole thing. do by individual commodities or do you by etf? katie: this is a good question. different commodities react differently to different environments

tom: the yen is back. nour: i know mark cudmore is a big fx man, so i will leave it as that, but to what extent, we know that june is the official start date for quantitative tightening out of the fed. it is all about money supply and there is not going to be much of it soon. part of that risk is playing the volatility game at the moment. tom: and charlotte, on the question of the market, sri lanka is its own case, but there is overlap when it comes to the question of inflation. are we underestimating the risk of supply chain problems coming out of china, the shocked investors on the warning of cisco? charlotte: it continues to be a huge issue in terms of the consumer and also getting the business running. they have got no clear idea where the governor is going to move on the policy. tom: that lack of clarity we continue to watch out of china around the covid zero policy. thank you. stay with us. we will get more after the break with charlotte ryland. coming up, as global economic ties scramble, a new age

tom: agreed. jonathan: we have not seen peak inflation by any stretch, and you got a bank of england effectively saying growth is going to get put a bad, and a central bank that is totally divided about what to do about it. i would love not to your necessarily from governor bailey, just the three that dissented and looked for a three basis point move, whether that is just about frontloading and then they are done after that, or whether they are going to be pushing for hikes through the rest of the year because of where inflation is. we have been worried we would have a federal reserve at the end of this year that would have to choose between growth, supporting it, and inflation, containing it. that is the decision the bank of england has to make right now. lisa: this has to do also with supply chain disruptions and eggs and us shocks and whether they take the view -- and exogenous shocks and whether they take the view that if it is to curtail demand. if they continue to curtail demand, they will t

tom: what is he waiting for? emily: who do you think needs to be kicked out and what you think needs to be invigorated? have seen biden with those who deal with covid and have seen some changes and a long time to get nominees into position and confirmed and approved. some have not been in position for quite a long time given this administration took control in january of 2021. you have this wide range of things throughout the government . the issue for the biden administration comes down to inflation and the economy and there is only so much that can be done. he saw the senate go ahead and give jay powell a strong green light for another term. tom: lisa, come on, they are acting like it is a two-term presidency. can they get away with that luxury? lisa: there is a lot of skepticism given the fact that joe biden is the oldest living president to serve in office so far. there is a question about the fed and their role in crimping growth. we are in a strange moment where politicians want both to essentially slow to

tom: good morning, everyone. hon radio come on television, an important date :00 our wall street time. retail sales, it is simple. i can get the full english breakfast at walmart for six dollars 54 cents. let's link walmart into what we are going to see in 29 minutes. jonathan: did you just confuse a full english breakfast with breakfast tea? looking forward to it. a: 30 eastern time, retail sales. then the reaction from chairman powell little bit later this afternoon. we have said repeatedly on this show we know how consumers feel. they tell is in the surveys. they don't feel great. consumer sentiment numbers decade lows. what are they doing? we will get a snippet of that this morning. tom: we will review what we talked about two hours ago with the backdrop we got a guest coming up that says calm down about inflation, but there's no calm in the bank of america fund managers survey. jonathan: absolutely not. growth expeditions are at record lows. you've got an allocation to equities and an underweight the lowest

tom: absolutely. we are going to get to this in a moment but we need to reappraise our soccer talk and the mets-yankees verbiage. we have a listener in cambridge, mohamed el-erian who says he wants more mets talk. the red six -- the red sox are going against the los angeles angels tonight. jonathan: i met that guy wants, he's huge. the people i was with were looking at him. a lovely guy. that was like seven years ago. tom: i'm worse than he is. right now, we digressed to commodities and there's only one commodity that matters. when the head of research talks, we talked about egbert culture, i want to talk about the smart people at jp morgan who are modeling out the demand forward. if we get through lockdown in china and we get china demand back, what exactly does rent crude do? >> that is the big question ahead of us. markets are under pressure because of the chinese lockdown but what happens when we come out of that? on top of that, there was a announcement about more monetary stimulus. at a time whe

this is bloomberg, tom? tom: coming up on the show, commodities giant glencore is to pay $1.5 billion to settle bribery and manipulation probes that have hung over it for years. details on that story next. this is bloomberg. ♪ tom: welcome back to the open, we are 53 minutes into the european trading day. modest gains after losses we saw yesterday, up .6% for european equities. s&p e minis pointing to gains in .3%, nasdaq with gains of .5%. let's get back to one of the big stories, commodities trading giant glencore will pay $1.5 billion to settle probes into corrupt payments made in africa and latin america. traders used codewords to account for bribes which earned the swiss firm millions. for more, we are joined by our energy and commodities reporter. it is a remarkable story, on some levels unsurprising, given us the details of what has unfolded and what the applications are for glencore? >> this case has been going on for a number of years now, about five years. it's been hanging over the company and f

tom? tom: thank you. alice atkins. the s&p 500 set to see first weekly gain after the eight weeks of losses. we will discuss retail numbers and investor sentiment, next. this is bloomberg. ♪ ♪ >> we cannot really think about energy without also thinking about energy security. >> you have a world that's 100 million dollars or more with basically no -- >> to go out from dependency of fossil fuels. >> i think individual countries are going to cut back. >> it is appropriate, i think, to have a gas transition for a short period, for someperiod of time while you bring technology to scale. >> a transition in energy takes probably three decades so please do not slowdown. >> it is not building more wind and more solar. >> hydrocarbon will always be part of the energy over the longer-term. >> we have gone from a one dimensional equation to bring carbon down to a three dimensional equation. francine: those were some of the guests we were talking about at davos. if davos is too optimistic in january, we will see a recession in

tom: stay with us. on radio, on television, good morning. ♪ michael: -- jonathan: what a messy market. your equity market down another 1%. negative follow-through on a brutal session yesterday. "the countdown to the open" starts right now. >> everything you need to get set for the start of u.s. trading. this is "bloomberg: the open" with jonathan ferro.

tom: we love your insights. look at the camera please, we see looking down the barrel, this is important. you should say you think there is a bottom in the market that is nearing, what are you watching for to give you that sense? >> i think you're right. i think markets have repressed much lower, we still have robust equity backdrop. but like earnings season was ok, still some strength in consumers, we see some strength with companies with stronger brand names, there is underlying quality, but markets are capitulating. when you get past this high volatility, then that could potentially bottom out. that is the point i keep stressing, you can't fight this negative momentum. you need to step back and wait for your moment. francine: what is dictating the trend? is it undermining stocks? bloomberg.com >> >> i >> think it is a combination of factors. inflation that was higher than expected, we talked about this idea of decomposition is, we got to the extremes. very aggressive policies that we need tightening. it seems

tom: it is just clumsy. jonathan: silly. tom: team surveillance is a vast team. jon ferro fell off his chair over the weekend. there was a small football match of manchester united. one of our team members and their offspring featured on nbc. well-behaved children, scarred for life by the support of manchester united. it is just harmful. jonathan: i cannot believe joe has made his kids manchester united fans. tom: they converse daily with -- o'neill. bring the photo up again. all you need to know, as usual, the younger offspring is more trouble. jonathan: joel has been a floor manager for some time. tom: these kids are caa called. they are destined. jonathan: thanks for that, tom. tom: good to see that. jonathan: very good to see. tom: john, i am going to look at this historic day and apple says it all. there are so many different stories across the market coverage to make one blanket simply sick statement about the markets and where we are with the central bank is off the mark. jonathan: the federal reserve has to come through with a massive move. they are set t

tom and francine. tom: the irish nationalist party signifying is now the biggest group in northern ireland ireland's generally assembly. the result marks a significant shift in the region's balance of power. joining us now is our dublin bureau chief. talk to us about the significance for those who are not initiated into northern irish politics. >> as you say, it is the first time since the powershare was established, that we have had a nationalist party with the most seats in the assembly. that is a historic first. it's the first time they will get to nominate the first minister for the region. it does mark a big change for a country which was founded originally around a unionist majority. francine: what does this mean for some of the key issues including the northern ireland protocol? >> that is the key sticking point as it has been after brexit. the democratic unionist party who lost the top spot have said they will take part in the power sharing government unless the northern irish particle is scrap

tom: good morning, an

tom, good morning. bank of america says we are in a state of paralysis and not panic but honest says you need another 5% of a tanking day before the hurly-burly is done. tom: before the hurly-burly is down. goldman-s says swings will remain large into the path -- until the path of inflation as clarified. will we get that clarity on wednesday? the cpi is expected to come in softer. we checked in on the markets. $20 trillion in market cap wiped off global equities compared to last year. you are seeing that pressure. you saw it yesterday in terms of the bloodletting on wall street. the biggest drop -- down to a 13 month low on the s&p. dropping around 17% year to date. the futures point to a bit of moderation. nasdaq futures gaining 0.9%. technology was worse. you would not want to swap places with kathleen would after an almost 50% drop in terms of that etf on concerns of the more frothy parts of the tech market. here in europe again ending lower on the session yesterday but pointing to gains on the futur

tom: we did. jonathan: did you watch the game yesterday? tom: that was special. jonathan: a special summer coming up in the transfer market. tom: are we leaving tuesday night or wednesday night? jonathan: if you want to get out there? i haven't got tickets for it. i haven't seen that signed up by management. maybe we can find some tickets. do you still want to go? tom: i would call the tots. jonathan: maybe we can get you a couple of tickets for the big game thursday night. tom: i want to get four rows back behind the bench. they have fancy designer coats they have. each firm is different. i've never been to a soccer game. jonathan: we've got to change that step maybe we take the week off. tom: what is the derby that newcastle plays? jonathan: they are in a different league. those kind of teams go up and down. tom: yankees-mets, crushing it. jonathan: red sox? tom: the only reason the red sox aren't the works in the world is because of the beloved detroit. lisa: i wouldn't know. i know it's depressing in the markets so keep your moment of zen going to stop i don'

tom: the u.k. chancellor of the exchequer speaking to bloomberg about the cost of living crisis and the positive response out of westminster. emmanuel cau, barclays head of european equity strategy is still with us. to what extent, do u.k. equities still provide a defensive space and the environment we are in now, given [indiscernible] emmanuel: the sector composition has been the favor of the u.k. market. what has help leap with 100 to perform so well is the inflation hedge that investors are looking for. but also a fairly strong rating in defensive sectors which have been in demand. very much about sector composition. the ftse 100 derives profit from abroad. tom: would you recommend increasing exposure to that index? emmanuel: one of our key overweight in europe is the large-cap u.k. index. because of the right sector composition. we are more cautious on the ftse 250, 1 of the worst performing. anna: if energy and basic resources are the only sectors that have gone positive year to date, that is

this is bloomberg, tom, francine. tom: volkswagen has maintained its outlook for the year. higher prices and demand for cars have helped counter the supply chain crunch. the german carmaker reiterating that its projections are at risk from the fallout from the war in ukraine. ceo herbert diess spoke to bloomberg earlier. >> the overall situation with covid in china, the war in ukraine, semiconductors in short supply, this is a challenging environment. i'm happy we could show resilience in the first quarter. we hope that the situation in china will improve over time. semiconductors should improve so we have good predictions for that. so i think that we should be able to show some more resilience. >> what makes you so confident about the development in china? china imposes some very harsh lockdowns to fight the covid infection waves. there are concerns about the broader economic cooling, are you going to be able to offset that or are there potential risks? >> you are right. china is still very unpredictable. what's going to happen there. but all our plans are working at low v

tom: than $9 trillion balance sheet? scott: we are going to get some very important information about the pace of the runoff, and about the selling of mortgage-backed securities which is something we are waiting for as well. it's an important question, because that is what kicked off the rate move at the end of last year. it was the fact that the fed had looked at qt earlier than market participants had expected. so i think this is incredibly important. in the u.k., we will get more information this week. the ecb is paramount. the qt program is really important. the way that that is delivered will affect this term premium issue we are talking about. francine: there could be huge bids to bonds. scott: i think any sign that that fed is reflecting on the pace of rate hikes which is not something in the near term would be a significant, and a shift in the qt program would be significant. the reason we remain short of treasuries is we are getting rate hikes, we are going to get qt across the board. and remember, we have only

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tom: i strongly agree with this. you are going to see a massive honing of business plans and tactical execution going into labor day to get ready for the compensation season next year. i really can't say enough about how much fixed income has gotten hammered. we have never seen this. i've lived this, but this is much worse. your down in bonds. you constitutionally can't buy jp morgan equity. what do you do? you clip coupons. that is the old phrase. you claw your way back. it is a motion in fixed income of clawing my way back that is going to be the story for late-summer. jonathan: how do you claw your way back in the equity market? i think what we often forget is basic math. if you drop from 100 to 50 and lose 50%, that is where we are in a lot of funds, and a lot of names in this equity market. tom: you differentiate -- i'm laughing, folks, this is a joke that jon and i have -- you differentiate between value and growth, and the answer is you grow your way out of a bear market. how do you do that in bonds? jonathan:

you don't agree, tom? tom: i think the fed is going to do what the fed does, and the president knows it. this is a president that has a very clear history of lbj in the middle 1960's. but it is ok, lisa and i did not agree on valve eta -- on velv eeta cheese fondue in davo's either. jonathan: brian deese is going to be joining us come of the national economic council director. five minutes away. from new york, this is bloomberg. ritika: keeping you up to date with news from around the world, with the first word, i'm ritika gupta. european union leaders have agreed to back a partial ban on russian oil, part of a package of sanctions aimed at honoring russia for invasion -- at punishing russia for invading ukraine. it temporarily allows eu nations to buy russian oil delivered by pipeline. that exemption is needed to get hungary to sign on. invasion in the euro zone accelerated -- inflation in the eurozone accelerated to an all-time high this month. consumer prices rose point percent from a year ago. food and