tv Bloomberg Surveillance Bloomberg April 29, 2021 8:00am-9:00am EDT
>> the fed has got to be a lot clearer both on the inflation side and the real side, and fiscal policy has to confront the fact that we do have to pay for things. >> we will see a rise in real yields, but it is not going to be anything like what we have seen in the past. >> we understood covid was easing, and that is starting to get rest into the market. now we are delivering the earnings to justify that. >> we know that economic data is great. this is all reopening, fiscal stimulus. how much does behavior change? >> this is not just overheating. this is like starting a fire, so
inflation could be overshooting. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. a simulcast, bloomberg radio, bloomberg television. a simulcast of stock upgrades. google up, apple up. maybe tomorrow morning, amazon up as well. it is the good news of big tech overlaid upon the good news of the distinguished mayor of new york city. jonathan: the bulls on the south side get more bullish. goldman upgrading their rating from sell to neutral on apple. the original view of a downside to the iphone in the midst of covid was clearly wrong. i'm with you, the news that crosses from the mayor of new york city, mr. bill de blasio on ms and bc, saying that new york city willfully -- on msnbc,
saying that new york city will fully reopen on july 1. unclear what that means. things are getting back to business. tom: you mentioned it earlier as you interpolated the vaccine news in germany. i'm sorry, it is a bundle of worldwide good news. jonathan: a record day of vaccinations in germany north of one million. anything north of one million is the equivalent of doing 4 million vaccinations here in america. that is a fantastic number. we are clearly heading in the right direction now. euro-dollar got the scent of that a number of weeks go. tom: the stark reality here of the fancy nest of finance and markets and all the -- all that we do on "bloomberg surveillance " is the reality of what you heard from the president last night. a huge part of the public does not care about price target upgrades to apple. lisa: one thing joe biden was
talking about is that the pandemic hit the lowest income earners the hardest and actually allowed savings to grow pretty substantially among the highest earners. what i thought was interesting was that jay powell echoed this, talking about substantial further progress in the employment market, not necessarily having to do with the number. he said yes, there are pockets of froth within the market, but then said i won't see it has nothing to do with monetary policy, but it also has a tremendous amount to do with vaccination and reopening of the economy. but perhaps that has already been priced in. tom: help jon here as he prepares to blow up "the real yield." what has high-yield and ig said about what full-size and credit is doing? -- about what faith and credit is doing? lisa: one thing i was looking at last night is that the duration of those bonds has been lengthened.
companies are selling longer and longer maturities. perhaps it is a bet on inflation because they are saying we think our money will be worth less to pay back this debt later. jonathan: i am trying to -- tom: i am trying to figure out what the padres are doing. jonathan: i think you just miss lisa making a really bullish refinancing argument and making it somewhat bearish. [laughter] north of 70%. the maturities are longer, the rates are lower, and arguably the balance sheets are better. are we making the argument that this is bearish because these companies think their debt is going to be worse? lisa: i'm not saying it is bad to refinance, but with respect to refinancing, the refinancing that they took on during the heart of the pandemic because of lower costs. i'm talking about investment grade companies selling 30 year bonds. why would they do that when they have a record stock i love cash on their balance sheets unless they help that rates were historically low, and that going
forward, they are not going to get as good of a deal? jonathan: what's new about that dynamic? it's always either a suppliers market or a buyer's market. this economy is doing really well. lisa: i jesse so much cash on these companies' blance sheets and wonder. jonathan: do you think at the -- do you think apple is weak right now? they are issuing debt. lisa: correct. i'm saying, why would they do that unless they thought that the rates were so good they might as well lock it in now? jonathan: they were talking about that a year ago, three years ago, four years ago, five years ago. a bearish argument amount -- a bearish argument around credit. the bearish argument of our own credit hasn't changed. it's been the same one for the last five years. lisa: i don't think i am making a bearish argument, though. what i am saying is that it
simply says that companies see this is an opportune time to finance themselves, even with the cash they have in their balance sheets, and this is a view on the economy going forward. jonathan: i totally agree. tom: i'm glad we got there. i'm looking at apple debt nominated in swiss franc's. let's take a look at the data with a left on the markets. futures up 29, dow futures up 136. the vix comes in, but not like i would think. 16.91. thank you to dean curnutt for wisdom there the other day. the real yield like a rock, 0.79%. jonathan: yields higher by four or five basis points, 1.6575%. euro-dollar, $1.21. good news out of europe, much needed as well. hopefully in the same way we looked at europe several months ago, we will look to certain markets and months to come that they can turn the corner, too. tom: one of the realities here
is that markets will clear. we are thrilled to bring you michael holland of holland and co., for several decades giving perspective. you have been a steadfast bull. you have old shares including apple. once again, we see corporate officers adapt to the cards they are dealt. michael: adaptation is the means for survival. mr. darwin told us. the adaptation for companies has been remarkable, given the last 14 months. i think it is incredible not just to watch people like apple and google, etc. do incredible things because the wind is at their back, but in addition, you have the rest of corporate america, as lisa was talking about, doing a lot of smart things. smart to raise money when you have very low interest rates and lock it in. if you can't find ways to use
that money for business purposes , you can always give it to your employees or the shareholders. jonathan: looking at the share price reaction, great numbers. not a huge responses to upside surprises for the equity market. what if the reader cross on that -- the reader cross on that? michael: i think you are ending up with good news being greeted with a, well that is good, or really good news, saying we will applaud that. but if you get slightly less than good news, you have seen the results with things like interest yesterday -- like pinterest yesterday. lisa: does this change anything for you in terms of how hot this cycle could run or how long it could last? michael: as tom said at the open with me, i've been around a long time, so i have learned not to try to pick peak earnings, where
does this thing peak out. i have no clue. companies don't have a clue. . how about the shortage of semiconductors? who knows if it is going to be two quarters from now or two years from now? the reality is things are very good. tom: for our radio audience, it is important to note that michael holland comes to us with the famous holland and co. clipper ship company behind him. [laughter] you have been an asia bull, and once again we see spectacular resurgence out of this pandemic out of asia. do you invest in american multinationals, including apple, because they will win in asia? michael: we still have a little
bit of taiwanese exposure, a little bit of china exposure, but i am focused on the u.s.. i think all of the good things going on in that part of the world to me are somewhat sublimated by the current craziness in the political mike and nations of china. so i actually have some trepidation about having any of the people i care about having their money in that part of the world right now. it has nothing to do with running business. in the u.s., i am just delighted to take advantage of whatever china and taiwan can do for us here, including produce those semiconductors. tom: you are the only fancy guy i know who hasn't moved to florida. are you long new york city? michael: i am actually not a good candidate to head down to florida. i can tell you it is a very nice
place to visit. i just love being here. my second choice would probably be london, closely rivaled by boston. we are lucky enough to have been able to travel around. jonathan: that's the most diplomatic way to insult a city, to say it is a nice place to visit. [laughter] with him, though. new york city, the traffic is back in a big way. lisa: have you gone to the park during the weekend? it looks like times square. i think everyone is out enjoying it. tom: this is true. lisa: tom is like, the first true thing you said. [laughter] tom: i was out mowing the lawn the other day. lisa: and central park? tom: yeah. [laughter] the mayor gave me 1/3 of an acre . jonathan: the rental market is picking up, too.
coming up, henrietta treyz, veda partners director of economic policy. tom: have you and lisa made up? jonathan: just getting into it a little bit, having a chat, talking about credit. futures, 4200. tom: i'm shocked. that is an exclusive. [laughter] jonathan: lisa is one of us. she says what she thinks. that's not passive-aggressive. you know? just say what you think. in new york, everyone gives you a hug. it's so good to see you. it's been so long. it's been so long for a reason. [laughter] lisa: oh my god. jonathan: don't you experience that, guys? it's been so long. from new york, this is bloomberg. tom: have a beverage. it's transitory. ritika: with the first word
news, i'm ritika gupta. president biden is betting he can sell the american public on sweeping change. in a speech before congress, the president called for higher taxes on the wealthy to fund massive investment in the nation's social security net. he's asking for trillions of dollars for infrastructure, childcare, education, and subsidies for working-class families. policies may force the president to abandon some of the more ambitious ideas. new york city mayor bill de blasio says the city will fully reopen on july 1. kids can go back to school on the first of september. new york has been embarking on a slow, step-by-step come back, and infection rates have eased. mcdonald's appears to have turned a corner on the coronavirus pendant. the fast food chain reported its first quarter of global sales growth in more than a year. mcdonald's posted same-day sales that rose 7.5% in the first three months of the year.
million a year and pay a lower tax rate on their capital gains than americans who receive a paycheck. we are only going to affect 0.3% of all americans by that action, and crack on millionaires and billionaires who cheat on their taxes. jonathan: that's the big effort of the president of the united states in an address to congress yesterday. good morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. equity futures shaping up as follows on the s&p 500. going into initial jobless claims 12 minutes away, some data we haven't discussed just yet. we will do that a lot more in just a moment. equities up 29 and 340 200. we advanced zero point and through 4200 -- and through 4200. we advance 0.7%. record vaccination numbers out of germany, and in new york
city, mayor bill de blasio talks about fully reopening on july 1. tom: spx futures near a record high. i just did a fancy 10 datapoint extrapolation, and claims are a little but ahead of themselves. you really wonder if they keep the trend of the last number of weeks, that is a hugely constructive number. jonathan: we could have maintained that trend, that's for sure. tom: right now, henrietta treyz joins us, veda partners, on the soiree out of washington last night. i want you to explain in the white marbled halls of washington how politicians line up tax policy around the president's mention of 0.3% of taxpayers. why aren't they more representative of the rest of america? henrietta: one of the interesting things i hear from senators, including moderates like joe manchin, is that they want to tax laws like the tech
work -- like they tax work. what can you functionally get the votes for with no margin for error? where can you get those 50 votes in the senate? i don't see much movement as realistic, may be a couple of points here or there. tom: this is really important. "the washington post" talks about the narrowest of majorities. when do we come to our senses that the president can't be bold? if we do, is it within hours, days? or is it by july? henrietta: most investors should have seen that when they couldn't pass the minimum wage hike, the $15 an hour, and they lost eight votes. i think july is probably a good timeframe for when we will start to recognize that we are going
to be mostly deficit financing the cost of this bill. the administration and democrats generally have been doing a great job of avoiding the conversation around reconciliation and deficit increases that will have to be authorized with this bill, and that's because president biden rolled out this ambitious agenda to pay for it. so july seems right to me based on what we see from the budget committees. we know speaker pelosi is marshaling this through the house. i think reconciliation comes right after. september is a possibility. it might be a headline risk that looms until september, but that is my thinking as well. lisa: what will be after it gets pushed through the congressional sausage? henrietta: the cost of this bill which is currently $4 trillion, gets slashed by at least half, so to trillion dollars is the maximum sticker shock spending number that moderates in the senate can stomach. that means the revenues needed to offset the costs are going to
come down by at least half, and we haven't even started talking about the deficit hike. so the real question is going to be when do we see this spending level. my expectation is that doesn't get discovered in earnest until the senate starts to cover this bill, and then the deficit hike number again will be the other key input point to see how much revenue we need. all of this is going to effectively wait until july. you can skip over the next few months. the hassle pass a big bill that is maybe $3 trillion, $4 trillion. then we can forget about that as soon as we get to the senate. lisa: if you look at equity trading, you can see a lot of people believing that they don't believe taxes will be raised all of that much. what will they be looking for in september? will it be higher than they expect, or just more enforcement of loopholes? henrietta: when you start hearing lawmakers talk about enforcement and collecting taxes that are due by beefing up the funding for the irs, that should tell you all you need to know,
which is we are not going to go after new taxes. we are not going to create some new tax stream. we are going to go after the ones we have already collected, try to reduce fraud, waste, and abuse. i think investors are stuck in this mentality that whatever the president says, goes. they hear 39.6% capital gains tax, and that is what they go to. then you see a couple saying maybe 28%. imagine if the number is 23%, 24%. i thing that is where we effectively end up. the same with corporate rates. it does not have to be 28%. it could easily be 24%, 23%. that is what the business community is pushing right now. don't take assaulted 25% or 28%. -- don't take us all the way to 25% or 28%. i agree the market is not pricing it in, but when you are on the phone with people talking
about where tax rates are going to go, they are surprised that they will not raise that much. jonathan: it would not be the first time was a week where we are drowning in fiscal news in america and we miss the foreign that creeps up on us. what are me -- what are we missing right now outside of america? henrietta: i thought these part of the speech last night that was the most compelling was the china component. the relationship is going to be component in the back three years of the biden adminstration. they are not going to pass any legislation after this bill most likely. so the u.s.-china relationship, that means everything from export control restrictions, beefing up manufacturing in the high tech sectors, monitoring the south china sea, dealing with taiwan, the eu and the u.k. to combat china only multilateral basis. that is the next three years. jonathan: henrietta, great to catch up. you got a flavor of it there. we've got a chance to do things
domestically. after that we move on pretty way to foreign policy. almost exclusively, maybe. tom: rumors of announcements of ambassadors coming up as well. it is a busy presidency, and it is back to a more traditional presidency then we certainly saw with mr. trump. the hardest part for me is the scope and scale of the numbers we are talking about. i still have trouble getting my head around the size of the numbers and how quickly those are coming on. jonathan: you just sent me a message about breakfast conversation etiquette. what is this? tom: i am just trying to keep you guys happy. jonathan: try to keep your mealtime discussions pleasant, something that isn't controversial. it is always a good idea to discover what you like about the food you are eating when everyone else is eating the same meal. tom: you guys were having a transitory argument. jonathan: lisa and i love a heated conversation. lisa: it is important. jonathan: we have been debating
jonathan: a little bit of breaking news in the united states. from new york city, good morning , alongside tom keene and lisa abramowicz i'm jonathan ferro. economic data just around the corner. let's bring in michael mckee. michael: big numbers coming out. let's start with jobless claims. 553,000, that is down from 547,000 on revised from last week. we will see with the revision is joint looks like -- we will see what the revision is. looks like still 547,000. not much of a change. 553 thousand is little bit higher than anticipated last week. we are also in the range of 500,000 on a solid basis.
a decrease of 13,000 because they revised up to 566,000. it goes down a little bit. we are at least in the range of what we have had the last couple of weeks, which gives you an idea this is the new range. gdp is just coming out. the number comes in a little bit softer than anticipated. the forecast was for 6.7%. we get 6.4% for the first quarter gdp. this is the first estimate. frequently those are revised higher. we could see that happen. what we are looking for is to see the breakdown. personal consumption comes in very strong, 10.7%. last quarter it was 2.3%. we will look at that and go stimulus checks come everyone out and spent them.
the gdp price index is not that relevant. it is double what it was in the quarter previously. this is averaging over three months. it is not the latest numbers. we will get the latest gdp pce inflation numbers tomorrow. tom: what is interesting, a shout out to steve stanley at amherst pierpont that had a more cautious trend than what the survey was. what is the biggest mystery? is it investment? is it government? what is the mystery for mike mckee of gdp forward. michael: it'll be harder to separate things out because what we are looking at is the rebound from very distorted figures. you will get a strong personal consumption number of 10.7% at this point. people are spending their stimulus checks. spending had been delayed.
ordinarily if you want to see the breakdown between gdp, personal spending and businesses. the problem with businesses is they are trying to catch up too. i am looking at the data to see if i can find that. have not gotten to the charts. let me see if i can find that as jon, maybe you can tell us what the markets are doing to react to this. jonathan: i will jump in. michael: while i find the information tom wants. jonathan: equities elevated. yield still up. we advance five basis points. lisa: i would argue people shrug off these employment figures as noisy and irrelevant at this point, which i find interesting. i'm wondering if you can weigh in on that, especially because you can see continuing claims rose last week. do we just disregard these
numbers entirely at this point? michael: i think you do. the continuing claims numbers represent claims, not necessarily people. they are also a week behind. we are going to be seeing that down on a more slow basis. you see the revision higher to last week's initial jobless claims. that will hold into continuing claims in push it higher. i have some numbers on gdp. it is interesting. gross domestic investment, which include structures, falls 5%. the big drop is in structures. we do not see as much office buildings and large buildings during the first quarter. when you look at nonresidential fixed investment, it was up 9.9%. business spending in general up a lot, just like personal consumptions.
american spent 10.7%. businesses spent 9.9%. that is a strong number. equipment was up 16.7% and intellectual-property products, computers, etc., 10.1%. we have the strength and business spending. what held down this whole thing -- i am trying to get the inventory numbers in front of me. the exports were down 1.1%, which is interesting because we saw that number yesterday for march was much higher. inputs -- imports were up 5.7%. the trade deficit is still await on spending -- is still a weight on spending. at the end of may we will get the second look. jonathan: 553,000 on claims against a revised 566,000. the wrong kind of upside
surprise but the trend is still lower. looking at gdp, 6.4%. the estimate is 6.7. core pce 2.3% come the estimate 2.4%. up 30 on the s&p 500. we hold onto those gains. yields higher almost five basis points. tom: david kelly with us of jp morgan. i will go with the first look at gdp. the nominal gdp statistic of 10.7% with a big prices paid statistic. does that signal and inflation that is here or inflation that will come? david: a little bit of both. there is clearly inflation right now. you can see it in things like lumber prices. you can also seat and the difficulty businesses are having in hiring workers. they will have to pay up in terms of wages. vehicle sales are pretty strong,
but inventories are very low. that is pushing prices up. i think we are seeing that. one other thing in this report of numbers that is interesting is inventories fell at an annual pace in the first quarter. if you get is hard to find stuff, you're right. this will cause manufacturing to crank up and the rest of the year. as inventories are restored, it will add further boost to this economy. we had a savings rate over 20% in the first quarter. i can see this economy really geared up to boom in the second quarter. i think we will get better than 10% growth annualized in the second quarter. jonathan: can the companies meet the demand? is there still reason to be bullish in the equity market? david: i think so. i think you have to focus on the cyclical sectors, the value sectors. they should do very well.
i do not think interest rates will stay at this level. i think they have to go up with the pace of acceleration we will see over the next few quarters. lisa: how you look at the data given the fact people did not seem to trade off of it. what data are you looking at to determine if this is something more than transitory? david: you'll most have to have an -- you almost have to have a new model of inflation. the old rules, the phillips curve, they do not really work very well. it is a complicated process. you have to put together the pieces. the wage part is very important, and also the physical part. president biden announced a lot of plans yesterday. if he guessed that through congress, usually it is spending now, taxes later. i think you get more stimulus. if you get the stimulus i think you have inflation that sticks. the federal reserve says it is
probably transitory. by the time they know whether it is transitory or not we are in the middle of next year. the question is how long do you wait to be sure it is transitory? michael: that was a half -- tom: that was a hat trick of transitory. that was very good. he is killing it. david kelly, very transitory of you to come on. with what we've seen in the last week or five days, do you have any clarity past labor day of this year? david: we can see the gdp story. this is just going to keep on accelerating we know we have people anxious to get back to doing normal things. the fourth quarter this year is the first quarter they will feel normal and i expected to be a blockbuster quarter in terms of economic activity. i think the holiday season will be huge. things get much more murky into 2022.
jonathan: does david kelly have to go back to the office soon? david: my second vaccine on may 8, two weeks later i intend to go to new york. jonathan: we look forward to seeing you. hopefully can come back to the studio someday at one point in the next several years. david kelly. who knows when that happens. lisa: the ambition. jonathan: at some point. lisa: we could stick him at a podium. jonathan: morgan stanley probably raise the question, the execution risk around the story. there will be huge demand. there is massive consensus around that. can we meet it? lisa: i am wondering about the employment challenges. are there enough people to fill the jobs that are required. when david kelly is talking about manufacturing, do we have the infrastructure to ramp it up here or does that lead to a deeper trade deficit?
what is the morgan stanley estimate on payrolls? tom: north of 42 million and a lot of others catching up. 900,000 is common. there is a real shift in the last number of days. emails say let's lose the jargon. to be clear to you and our international audience, labor day is a holiday at the end of august into september. a great tradition. the tradition of labor day. jonathan: i have lived here for five or six years and tom talks to me like i've just arrived off the boat. you called me a foreigner and now you're telling me what labor day is. i appreciate that. super helpful. lisa: i will say this is going to be the question. this is completely ignoring that and moving forward. the idea of the supply demand dynamics and can we ramp up supplies too much? should i keep going? jonathan: you can.
lisa: you think it will take years before people get into the studio with us? jonathan: what do i know? lisa: wait to put it out there. jonathan: coming up, the man who know something about apple, the big bull on wall street. looking for a 185 on apple. it is dan ives of wedbush. he joins us in the next hour. tom: apple's success is transitory. thank you. jonathan: equities up .7%. lisa abramowicz, tom keene, jonathan ferro. this is bloomberg. ritika: president biden is proclaiming america has turned the corner on the pandemic and is on the move again. he promised tax hikes on the wealthy to pay for ambitious plans to spend trillions on education, childcare, and other
democratic priorities. he says his infrastructure proposal will a jobs maker for those without college degrees, those who largely supported donald trump. president biden also called on congress to pass stricter gun safety laws in response to recent mass shootings in the u.s. he asked lawmakers to pass three house approved measures. he also pushed for a ban on assault weapons and high-capacity magazines. a surge in coronavirus cases early in the year detert many people from -- deterred many people from seeking medical care. sales of blockbuster cancer therapy came up short. caterpillar reported first-quarter earnings that beat estimates. the world's biggest maker of mining and construction system says rebound in the economy drove demand for its signature yellow machines. flap in north america but rose in other regions.
focusing on inflation deviating below 2% and we have used our tools to keep it up below 2%. if we see it moving above 2% it risks inflation expectations moving up, then we will use our tools to guide inflation and expectations back down to 2%. no one should doubt we will do that. this is not what we expect tom: the chairman of the federal reserve system on target with an interesting press conference. our special thanks to diane swonk for attendance from chicago. i thought she was very transient about the choice the chairman faces through the rest of 2021. joseph feldman wrote a brilliant note on amazon three days ago. the ink is barely dry and he probably already has to change the model. how do you approach amazon this afternoon after what you witnessed from google and apple? joseph: i think you will see
really good results out of amazon, especially fourth-quarter the first quarter so far has proven to be quite strong for all of the retailers. amazon will be a big winner. the amazon business has been strong. last night they announced a new deal with disney plus. they are continuing to be a juggernaut in the retail and technology, and just dominating our numbers will probably go up. our model will have to adjust after their reporting. i'm expecting good results. lisa: a juggernaut with a target on its back. we saw apple trying to get ahead of that. are we going to hear something similar out of amazon? joseph: i think they are. they continue to invest in the future. they are getting closer to the customer with more facilities, whether it is distribution or grocery.
they are leveraging new technology. we will have contactless shopping at a new level because of the technology amazon has. distribution capabilities continue to improve. aws, they are becoming more dominant there. with more people working from home and that likely to continue, aws becomes more important to have things in the cloud. they will continue to push and lead the direction for most others in the consumer space. troy: there is also -- lisa: there is also a question on the employment space. amazon saying it plans to raise wages were a lot of workers is that enough? $.50 to three dollars an hour for most workers. amazon has had so much pressure, including the unionization push. joseph: i think they have done a good job, better than most people expect. the average wage is pretty
strong. they have been very competitive. i hear a lot of retailers talk about needing to compete with amazon for talent, particularly in distribution and even at retail. amazon has done a good job. people want to work at a company that is growing fast and has a lot of strong prospects ahead. tom: i am at free cash flow back five years. we model out to 52. we have gone from six gazillion to 52 gazillion in a long cup of coffee. where is the dividend, where is the share buyback, where's the stock split, went to these guys grow up and become -- when do these guys grow up and become a dell component? -- a dow component.
joseph: the stock split seems newer than a dividend or buyback. they've been able to show profitability that they should be able to start to think about redeploying that cash to the shareholders in some regard. i get it, you want to hoard some cash to be able to continue to invest, but we are now in that new territory where i agree you will have to see some of that. tom: lisa, 26, 31, 41, 55. 26 to 84 gazillion in another long cup of coffee. lisa: which raises the question, what are they going to buy? joseph: they can buy whatever they want. they have a lot of opportunity to grow their footprint get closer to the customer. whether that will be through
distribution facilities or grocery stores, a lot of our contacts in the real estate community indicate amazon has been pretty aggressive trying to build out their grocery network. they have more than enough cash to do that. i do not think they want to buy a retailer. i think they would rather grow it themselves. maybe they can get leases or something. it is not clear that is where they would make an acquisition. lisa: when you say they can buy anyone, i am sure they have the cash. i wonder the antitrust push, is that just lip service words that a real threat? joseph: as big as they are, there is a big guy in bentonville that is quite large themselves on the retail side. they have quite a few competitors in the cloud. i'm not sure they have this monopolistic power people are concerned about. there is strong competition in the space of retail and technology. tom: joe feldman, thank you very
much. great to have you. absolutely fascinating. you sum the zeitgeist right now. we are talking about fancy pants bloomberg stuff and president biden is talking about two thirds of america that can barely get to the next payment -- the next paycheck. lisa: it is also jay powell recognizing the bifurcated nature of this recovery, which raises the question is this boom economy enough to bring up the lower income individuals. it is a $.50 or three dollar an hour wage increase enough to do that? these are the questions embedded into the employment statistics we parse through every week. tom: the theory was there in february before the pandemic that we were bringing up the bottom. we recapitulate that and then what to me is the big question. lisa: you have to think about
the savings. we talked about the $5.4 trillion in excess savings. is that because people got checks from the government or do not go on vacations? tom: i have the answer. ian lincoln told me. gdp was about goods. not services. goods exploded up. lisa: that is the reason some people are thinking the semiconductor shortage will actually wane when people start to do less with the goods and more with experiences. tom: i look at it as logistics. we will get you through an economic -- an eventful thursday after the economic reports and the drive to the close with the important earnings from twitter and amazon. we do it with a market lift and a persistent lift. there has been a vengeance of a bid for the last two hours under spx.
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what a week. from new york city for audience worldwide, good morning. "the countdown to the open " starts right now. we begin with a big issue. can supply meet the boom in demand? >> there is bottlenecks everywhere. >> certain things are in short supply. >> 16 months of inventory needs to be reduced in 12. -- needs to be produced in 12. >> supply chain issues. >> largely outrun by the demand side of the economy. >> commodity prices can go up. >> this will be passed through to the consumer. >> many companies are missing out on sales because they cannot meet demand. >> a lot of the bottlenecks are the result of people leaving the workforce. >> the basic question.