tv Bloomberg Surveillance Bloomberg August 13, 2021 8:00am-9:00am EDT
>> market is going higher, and my bullishness is based on the perception that there is no crash or credit crunch. >> we will get worried about inflation, and that could brings a stock market correction. >> we do not think that the fed is bothered by this degree of inflation. >> it is reasonably valued. >> this reopening trade has not started yet. >> this is bloomberg surveillance with tom keene, jonathan ferro and lisa abramowicz. tom: good morning, a simulcast,
a bullish only on radio and television. you heard there from the rest and you will hear from alicia levine in a moment. the glass is half-full. jonathan: you will not hear from her in the last five minute -- in the next five minutes. i wonder how many people agree with margo at j.p. morgan saying that we believe that bond yields bottomed and we are on an upward trajectory for the rest of the year, that is a call from j.p. morgan. tom: we heard that from david constant framing out of 4900 and john, 5000. john gallup will appear on another property of bloomberg this morning. tom: night -- jonathan: 9:20 eastern time. my property, our property, we all share in this. it is the multiple contraction that is really interesting. he called in for a bigger game -- again, but his real call,
where the bullish is is in earnings, it is not on margins. tom: maybe the pe goes to 22 down to 20 level. we will talk to alicia levine on that, but that hinges off of the bond market and sustained lower yields and you get comfortable with equity multiples. lisa: that is part of it, the bond yield story, which a lot of people think they will. the other side of it is what we are talking about this week. if we will not be bullish is supply chain constraints. we are looking in the increase in delta variance and obstructions and input costs going up. how much will this pressure margins, willing to differential if you are able or ub -- a bull or uber bull is margins. tom: one of the things we will talk about. i see green on the screen but i will point out the vix 15.60 up. jonathan: let us keep drilling
that one. the 10 year from 112 last wednesday, a big turnaround. yields are a little bit higher, and on a session just a little bit lower. i go back to the call from morgan stanley, a handle on unemployment and the risk that we do not get this late cycle recovery in label supply, if that does not develop, then that changes the game for the fomc. tom: that is one of the worries and we are tuning up for michael key -- michael mckee at jackson hole. the backdrop here, and others this week, david constant, talking about up we go, you agree? >> i do agree, and mostly this is predicated on what is happening with bond yields and the market and the massive liquidity that we have and the caution of the fed. you have to be in equities, and
recovery is here, and the unemployment picture will get better moving forward. it is clear that the rolling off of unemployment insurance that -- in the 26 states has been a benefit to those unemployment numbers and we will see the rest for the rest of the country as teachers go back to work. we are really moving forward despite this mysterious delta variant which seems to have a 45 day spike, very strange. it appears to be rolling over in the question is is if it will smack the northeast in the autumn, and that is the risk. other than that, markets and liquidity. jonathan: a couple of pieces to the puzzle. let us start with your call on the labor market. how expensive will it be, thinking about wage growth, and what will it mean for margins? alicia: if you look at the state where the unemployment benefits have rolled off, the wage growth
has slowed. so, essentially the federal government has become a competition with private industry right here for labor, as that rolls off, i suspect that you will see a slowdown in wage growth, and that will in fact -- affect the inflation picture and the bond market is telling you that. the pricing of inflation is higher in the short-term and lower in the long-term and lower than the range in which the fed is comfortable. the market is all in on that, but of course the risk is that it does not happen and then there will be a convulsion. to the extent of that story, we are good and coming into two important inflections, september 6 where unemployment insurance rolls off and teachers going back to work. that should be a bump for two months into the jobs numbers. jonathan: leasable want to follow-up up on the final point. there are a couple of points that you made, labor supply recovers inflation decelerates,
let us get to three. what does it mean for what you want to own in the equity market in a decelerating environment? alicia: we have been calling this midcycle, which means he wants to own quality. the easy gains in the junk companies is over. the trading 40 times at revenue, that trade is over. you want to own quality, earnings power, and you want to earn cash flow. those are the stocks that will outperform. what does that mean? a lot of sectors can do well, but you want to be focused. you cannot just throw a dart at the board anymore which you could have done 15 months ago. you wants to own quality earners in every sector. we like cyclical, they sold off because of the skepticism of where we were going. we look at the company is, not the headline once, but some of the mid-cap ones that have not moved.
and we also like tech and software. on top of that you have to add health care because health care is one of the study growers. delta is a risk, very hard to model this out, but as i have said, for the most part the market looking -- is looking through this as a short-term phenomenon. lisa: we have heard from corporate executives that the supply chain restraints are lasting longer and we see the disruption in china leading to further delays in shipments. how does this factor into higher prices and margin pressures aside from the labor costs? alicia: the inflation and supply issue is clearly lasting longer than expected. what we have seen is the market is comfortable with it. transitory does not mean months, it probably means corridors in the same with the supply issue. for the most part the market is
comfortable and margins for earnings are coming in high. so, we are seeing noises, but i think it is too early to call it a trend. if you look at the travel companies that are predicting slower growth in the third quarter, this is not a disaster, this is a hick up on the way forward. that is how the market is taking it. a huge risk is inflation lasting longer and it is higher than the transitory number, i think that is a risk. ultimately you will not get 5% year-over-year inflation growth forever, it will probably come down to 3%. definitely higher than opposed global financial crisis. tom: very quickly, our people enthused? bny mellon you have a good look at retail. our people -- are people enthused or numb? alicia: people are cautious, we
are nationally -- naturally cautious when markets are like this. the earnings will bill -- are going to carry us so the market is left were risky because it is cheaper. earnings are extraordinary so you will see numbers going up despite any thought of tax increases, numbers will go higher which will carry the market, and with it there will be a bedrock to price action, so that is why i am bullish. it does not mean you cannot have a five to 10% pullback, event not had that yet. but, you know the direction of travel is upward. tom: thank you so much. all of this uproar about field of dreams and that, the fact that the british do it build -- better, we made it better -- we made jokes about ted lasso. they are actually going to do it this afternoon with goosebumps, to me, 17,000 seeds of i guess it is the brantford b's versus arsenal's 61,000 seats, what
does it feel like to do that for the first time since 1947. jonathan: some of those stadiums are exciting to be in. let me take you one day, that is west of fullham. you mentioned to highfield road with that kind of excitement, the stadium was packed and i hope to see the same later. what i am excited for, i not a lot of -- i know a lot of people called stratford an expensive library, but it will be so nice to see a flat capacity stadium over the weekend, that is what i am excited for, the fans in the stadium, and if this administration opened up travel so i could go over to europe it would've been one of the first thing i did. tom: what is great about this and the only equivalent is aaa baseball in america where two or three teams would come up into the majors, and the baltimore
orioles would go down. it is unthinkable in america and it is cool to see this. jonathan: do they take the risk from a business decision, you get up to the top tier, you spend the money and take the risk to stay there or to preserve the balance sheet because you think you might go back down and you need to survive and you do not want to take the risk of falling down. it is a big financial calculation. inferred-arsenal a few -- brantford and arsenal. i am so proud of you. now you know something. tom: i could care less about this than lisa and that is saying something. jonathan: that is not true, because i know i will get a message out about 7:15 in the morning and you will be getting ready to watch united league, i know you well. tom keene, lisa abramovitz will not, jon ferro will as well. ♪
ritika: regulators have authorized an extra coronavirus dose to the most vulnerable people, americans with weakened immune systems will get the shot including some patient who has had organ transplant. the pan is struggling with its worst wave of coronavirus infections and their calls for mandatory lockdowns in a country that has avoided such measures. the number of daily cases in tokyo have quadrupled in three weeks. the prime minister has rejected calls for lockdowns. the general election is three months away and it is unclear how voters would react. in afghanistan, the taliban is putting pressure on the national government before the u.s. military ends its mission. they captured two major afghan cities and they are now estimated to hold two thirds of afghanistan. the u.s. plans to send in 3000 troops to help evacuate personnel from the american embassy.
they reported better than expected results. the flagship business is growing to 115 million subscribers. themepark reservations are running ahead of the quarter that just ended despite the coronavirus surge caused by the delta variance. bloomberg yearned that european soccer organization is putting a final touch on a $7 billion rescue package to help teams in europe recover from the impact of the pandemic. the rescue would impose a new salary cap to prevent teams with superrich owners from gaining an unfair advantage. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. ♪
are delicate, and they are fragile, and that is another good example where after the quarter, we are probably going to decelerate. jonathan: it is a conversation we need to keep having and that was fs investments on the situation in china. alongside tom keene and lisa abramowicz, this is bloomberg and here are the futures up by .2 advancing 0.05%. yields are unchanged, 1.539. a bit of a snooze. euro is stronger, of elements in china through the week. that is one to watch. tom: it is a bit of a snooze, but with international relations and the mysteries of china, there is a lot going on. our washington team will tune into the white house and what is going on if -- in afghanistan. now we go to hong kong with our chief ager correspondents, what is the back story. away from the headlines and
obligatory research pieces, what is the back story you see on the economics and reality of politics for beijing? >> i think there is a shift on the way at the moment. in beijing they are clearly doing some pretty serious housekeeping of the economy and the model, the structure, and oversight, and i think they are learning lessons in sending a signal that they do not want to same -- to make the same mistake that the west has made. that is what we are seeing, a much tighter oversight on what they call much tighter enforcement rule of law in key sectors like technology and national security all the way to this -- to food production. jonathan: the regulatory situation, i want to understand what is happening on the ground as they wrestle with the delta variance. what is shutting down? enda: there is a real scale at
-- scare at the more -- at the moment. the port was partially closed since wednesday because one worker got infected. that reflects the approach that they have taken trying to keep control of the delta variance. now, a lot of manufacturers are worried and they are worried that the shipment will be late from china to the u.s. and the rest of the world. and remember, we are going into the key shipping season in order for consumer goods to come out of china. people are nervous. one reason they are nervous is that one port right behind hong kong was shot in may for the same reasons and it is ricocheting through international shipping. lisa: what is the threshold that shuts down some of these ports? is it one person having the virus that is enough to torpedo an entire area? or is it something more sustained? enda: it is one person, it is a
very aggressive approach to isolating those infected, testing everybody and anybody who might have been in contact with that person, and of course, overriding whatever activity those do -- those people do in the meantime. it is aggressive in china and hong kong, and there are steps taken to contain the strip -- the steps of the virus, we are hearing people asking when it will move beyond this era of covid to rebuild their economy and how long that -- can they remain cut off from the rest of the world. it is an aggressive approach and they are taking their foot off the gas, but they are asking how long they can keep up the approach. lisa: there is also the issue of corporate executives have to hear for the future. do you hear anyone shifting supply chains away from china because they do not know how long this will continue where how many shutdowns it will be?
the threshold is solo to shut down an entire port. enda: on the virus a lot of executives will tell you they just do not know, the broader supply chain story shifts and ebbs and flows and it said it might shift during the trump years in the move in china was marginal in the end. ultimately, even though china is making it more responsive, china offers scale, and that is why manufacturers go there to manufacturer their goods to sell to the rest of the world and to manufacture and capture the power of the china consumption story. executives are looking beyond the scale that china offers but it is just not enough. tom: the major houses, the western houses on their research on the pacific rim, are they
greater gloom than what i see in the media on china, or are they brushing the gloom aside? enda: they are a ghetto -- getting a little bit downbeat. these controls are covered by two thirds of the economy, the restrictions at the government is putting in place to control the delta wave. regular infections are still low, it has to be said, but people expect there will be a hit to retail sales because what is going on. economists are preparing the forecast for china, there is no doubt about it, but we are still talking about growth may be circa 8%, which is still very robust. it all depends on the containers getting early and so they are freeing up things, but or -- or are they still sticking with the regressive approach. and that will have an impact on retail sales and with the
manufacturing story. it is totally up for now, the economists are looking for growth, but it is an open question in terms of how deep this will be to china's economy. jonathan: you are a true gentleman, thank you for staying up late for us. that was enda on the latest situation. we have seen downgrade after downgrade and we have heard them from goldman sachs and others. but as it was pointed out, still looking for a handle on growth in china this year. that is not bad. lisa: not at all, on the flipside this increased the prices that was manufactured in the u.s. and how much do they have to pay to get goods. if you look at the shipping costs, they have risen dramatically, and you do wonder what he was saying, people have not shifted their supply chains away from china that much, even with all of former president trump's rhetoric. jonathan: will this trigger a
second wave of supply tensions for the months to come? tom: i will go to supply chain -- tensions, but it is more tangible to me if the inflation worry, but you have to believe that the price will fix that, it has got to go on later than you think, but you have to believe that the supply tension gets off. jonathan: i think the real change we are grappling with, china has been exporting distillation, and this time because of the supply issues they have been exporting for some degree inflation. the base case is that those conditions would heal as the year grew older, you have to push the view out. push it out to q2, and i have no idea how long that will persist, but persist as a keyword. tom: u.s. markets betting that it will persist and it will get fixed, certainly we have seen that in equities. jonathan: coming up, the situation on the equity markets in the global economy and the
jonathan: life firm new york city from our audience -- for audience worldwide. alongside tom keene and lisa abramowicz, i am john -- jonathan ferro. equity futures are positive up three but not doing month. yields are at a basis points of 1.3522. the euro advancing .1%. we are down to 70 and down .4%. the record high after all times i -- after all-time high in the equity market. tom: that is the theme of the day and we will see how it unfolds. it is an eventful friday off disney earnings, and the summary is better than good. it can be beyond intimidating to line up your phd's when your thesis advisors.
for him, it was agony, the theme is essays on the analysis of changes in the conduct of monetary policy, chiseling marble at princeton, and he joins us today, what was it like to go in front of your phd advisors at princeton, who were those guys? >> mark weston, michael weston was my main advisor. it was a great moment. i would not have remembered the typo so thank you for bringing it up. tom: you have bernanke moving one way and michael woodford on the others, it must have been intimidating, is that kind of brainpower going to show itself at jackson hole, are we going to dovetail one third with the more holistic economic -- economics of bernanke? jean: interesting, to be honest we are wondering what we will
have. our view is that there is maybe too much hope that this will be policies -- policy signaling, so i think this might be a disappointment, and may be returned to hard-core like used to be the case meeting with those deficits last year. lisa: based on your tenure at the baked of canada and central bankers and having them as colleagues, do you think they are concerned by how much control they have or can -- or perceived control not only benchmark rate but risk appetite in general. jean: concern, i am thinking that they are pretty aware of central bank being in the front stage since 2008, we only -- we have been the only game in town, so we have gotten used to the attention, but i think this is it normally, fiscal policy is
now taking the policy from them. i think we are at the junction where we think we are changing it. and how they communicate around and the potential for mistakes is pretty high, we have seen it. we are losing a bit of a long-term anchor on 10-year yields. and it is because of the uncertainty around central banks. lisa: we are losing a long-term anchor on 10-year yields. what does that mean to you? jean: when you look at the price movement when we went from pricing two years with the 10 year yield on the way out to what we see now, a complete disconnect between the macro outlook and the yields. you know, there are stipulations for that, but one of them is a big debate about -- around what the central bank is doing and, i think that is part of the story.
tom: i look at the entire economics right now, in the world -- the word we keep talking about, and we make jokes about it, it is really serious, microeconomic foundations, the ambiguity of what will happen. given the thrust of inflation, what is the key ambiguity of which way the financial system cuts, evan they higher inflation? what is the key mystery? jean: i think this is exactly what is very unusual about the situation, the range of outcomes that we are inflating collectively. based on inflation and what the central great -- the central bank is doing, and what is the longer extension. this is a wide range of outcomes in the markets in those environments tends to interpret the news flow and then go from one official outcome to the
other, and these are more like binaries. and i think what the consensus is that this is a constructive environment. we are seeing the inequity and we are pro-risk at this stage, so that is the consensus. from here, and unusually wide range and we are facing binary outcomes. tom: jonathan ferro led the conversation about stock and flow, and when we look at the death of deficit as a skit -- static object, a bathtub the size of an olympic pool, should be we should be -- should we be worried about the size of the pool of these things that we worry about? jean: yes, i think if you just take a step back and looked since covid, the amount of spending has been put on the table including with the infrastructure bill this week
and the pure reconciliation that we will see going forward, we are talking about the announcing the 40.2% gdp in spending, than what we had pretty covid. that is a large amount, that is your stock point. we are pretty relaxed about this given the rate that is being said, but i think we are much more now subjective and facing an environment if there are rates, it will be more disruptive to the stocks much larger now. lisa: on the show earlier, it was said that inflation is contained and it is the same. that basically this is a faith-based assertion that has yet to be proven and it goes to your call about the question marks underpinning where treasury yields are. do you agree that inflation is controlled the same kind of view as subprime is contained of 2007
2006? jean: i think it is more than subprime, because inflation is in our butte -- our view a self fulfilling -- self-fulfilling denominator. it is what markets believe it to be. we are saying that without evidence that inflation will break out. we think it will be contained, ultimately, that feels like our baseline, but that is a given, and that is far from a given. we are not expecting that before it happens. i think that is fair, we have sympathy for those points and i think it is underappreciated. tom: thank you so much, we greatly appreciate it. really informed discussion of some of the dynamics that we see. i really want to step up this weekend, and we can set it up financially with his horrific moment in afghanistan and infrastructure and all of that, but your comments yesterday on coventry, and your comments
today on the opening of the season, it is so foreign to the field of dreams and the manufactured commercialism of iowa. in america, you are lucky if you get a narragansett beer and two cold hot dogs. it lost its road when the queen park ranger's. you get a chicken and mushroom pie, that we know that anybody who goes to see qpi, they are not sitting in the fancy seats. jonathan: if you want a pocket pie, that is a trichet -- that is a treat, but not a posh treat. you ask for a pocket pie, chicken and mushroom is my take, shied of -- side of checks. -- of chips. you have a pint of beer with that and that is wonderful. gloucester road is an old stadium with that energy and i remember the west ham fans when they moved from the bowling ground stadium in upton park
they moved to this grand -- brand-new fancy stadium, the fans hated it. does that resonate with you with an rate in boston, the olympic stadiums are the stadiums that the fans appreciate? tom: this is something that the ownership dead. when i joined bloomberg this was a raging battle in boston and they had the courage to rebuild fenway park which desperately needed it and save all of the character of it. i bring this up because it believes it will dock in -- darken the door for a more interesting show at 9:00. when i see that i cannot envision the vip boxes, or even whatever it is called, the fancy -- you have to be out in the seats. jonathan: i know from the fact that when hammond goes to see the queen parks rangers he seats in the cheap seats.
governor king i saw at villa park 10 years ago and i was sitting right in front of them, and he was not in the cheap seats. because, at that point it was a nightmare. mohammed is coming up later from queens college. we will talk more about it. jonathan: thank -- tom: they named it after the queen park rangers,. jonathan: i am not sure that is why they named it. we will get up to speed with the inflation story and then the equity market story. he has the big bull on the street. we have seen an all-time side -- all-time high after record high in this equity market. tom: the bears have been humbled. we used to see how they will publish tonight and into the week. jonathan: what will the bears do over the weekend, what does hebert do? lisa: they are very quiet. jonathan: they come back monday and get fired up and growled.
lisa: no, i think that the issue is that there is no joy for a bear, because you do not win you keep losing. if they all get snuffed out, is there a risk in markets? the bear this -- the bearishness is giving people confidence. jonathan: this is my frustration with the permanent bears. they seem to have this free option with nora x asked with no expiration. they are right, fantastic, genius, they sound smart all the time but over the decade they miss the whole bull market. lisa: i think that is fading based on where we are seeing markets go. jonathan: the gain of more than what we are looking at, 100 percent, have we doubled the s&p 500 since the lows of last year? equity futures up three and .1%. when they are right they are so smart. that is not aimed at you. you know it is not. lisa knows it is not, i'm
thinking about the others out there. from new york city, this is bloomberg. ritika: with the first word news, a divided u.s. supreme court has cleared the way for some eviction proceedings to resume in new york. a provision gave renters a shield if they said they were experiencing hardships because of the pandemic. the court sided with landlords who said they have been devastated with what they contend is an unconstitutional law. three dudgeon -- three judges dissented. hospitals are being pushed by the latest surge. more than a dudgeon -- more than a dozen states are dealing with storages. in florida the -- they asked for more ventilators. volkswagen took their first significant drop of falling 19%. they had warned that the global semi does -- semiconductor shortage what heart bw.
the big drop-off came in china where it plunged 28%. the would-be successor to chancellor angela merkel met with elon musk to place the suv factory. it gave him a chance to burnish his can i chills with forward thinking voters less than two months before the election. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. ♪
a product wherever and whenever they can get it. the physical retail store it is back, there are more reopening of physical stores than we have in years, i am not talking about reopening a closed door, i am talking about opening new stores. tom: steve developing the world excludes the exclusive for retail stores. not only is it a movable feast in retail, but a friday end of an august weekend, it is looking forward to back-to-school in the holiday season and you get up front by moving your targets higher. chelsea and her team acted this morning, nudging up walmart and saying that target -- target is the place to be with joe feldman launching target at the higher. i featured the chart earlier. thank you for joining us on a -- on the state of retail. what is the y before -- behind your enthusiasm, what is the month -- what is the umph
getting retail to the end of the year. >> i think number one it is the consumer and the dollars that they have in the pent-up demand that they have for gathering and being together in a safe way if this variant can be controlled. the other thing is the innovation that companies have. more new product innovation, button more new product, but also in transaction transformation, whether it is curbside or digital, the convenience that consumers have is greater than ever and it is exciting. tom: what is the lesson learned from the pandemic on inventory management that is so much a part of the failure of margins? is it something that carries over that they learned about inventory? dana: reduction helps to drive profitability, managing inventory is key, can you do more with less and can you personalize the offerings that
you do not have an abundance of goods leading to markdowns? the headwind is definitely supply chain getting goods into the u.s.. we hear that from company after company, and it does not seem like that will normalize before the end of the year, so we will have tight inventory levels to the second half of the year. lisa: how are companies dealing with the supply chain issues? dana: they are bringing goods and by air, it is not a cheap way to do things, but it helps to meet demand and you would rather not lose the sale and bring those in that you can sell at full price. some are transitioning from the west coast and east coast ports, but reduction in inventory and lower levels than what we had in the past will lead to a much more balanced promotional environment in the future. lisa: as the delta variant breads, or underestimating the return to rick or mortar?
-- brick-and-mortar? dana: we are seeing physical store footprints encouraging, it is improving, conversion is higher than traffic. consumers are going with destinations in mind. there is a concern that will traffic slow a little bit if we see the delta variant expand? now companies know how to manufacture and deliver the whole experience with the channels which is more profitable than a single channel customers. tom: big box, what is your single best buy? dana: look at what target and walmart are doing. i think the big box discounters are capturing more consumers. lisa: how much longer can it continue in the terms of spending given the fact that we see prices rise and we are expecting wage increases to slow? dana: when i see the wage increasing -- increase is
slowing, prices are rising in footwear and other categories. child tax credits will be there through the end of the year and the savings rate is high. i will see a sustained demand of enhanced spending through the christmas time period. lisa: is where people spending changing? i know we went through the cycle of devices and an explosion of people trying to buy clothes that fit them. where are the hotspots right now? dana: into the year end by category, innovation, whether it is denim, or footwear, and look at luxury, the strength has been solid. i think the other hotspot that we will see, take it look at off-price stores, basically they were not open for a significant part of last year and they do not have the digital channel and that will be a benefit to that also. tom: one final question, you are a beast of manhattan, new york city.
we all drive around and see empty stores, how do you react when you see empty stores on 2nd avenue, on your madison avenue, and fifth avenue, or way over on the west side, how do you respond? dana: it is depressing, i want to see life and stores coming back. we are seeing people coming back to live in manhattan, we have seen an uptick in apartment square -- sales and the improvement in madison avenue. i am hearing of an acceleration of openings. we need the vibrancy to come back, even in the flatiron district. a harry potter store opened but we have some the closings. tourist will help -- tourism will help bring traffic. tom: thank you very much, greatly appreciate it. they will update their enthusiasm.
lisa, i want to give you some time to bond, it has been a very equity week, what did you observe on bonds? lisa: there was a kick up in yields, it contained. we saw a big increase, but if you look at inflation metrics and the labor market, people were questioning the logic behind this and jean saying it does not necessarily make sense and we did see it tick up and the price go down in the yield is up a little bit but just a little bit. tom: on a field of dreams weekend we will do this, a major shout out to henry paulson, a goldman sachs man in chicago who wandered to a tour of duty in new york city and i believe he did public service and washington as well. hank paulson has been the philanthropist of birds in america. we go to iowa, field of dreams, baseball, and commercialism. it is like bear cam in alaska,
except it is the eagles of iowa and this is one of the coolest bird projects in america, and this is the breeding of eagles in iowa and learning from that process. this is a photo in the early morning of iowa and it is not some manufactured cornfield. lisa: bloomberg surveillance exclusive, we have the representation of action and markets represented by that eagle that is just sitting there in iowa. tom: i think that looks like mom. there is mom and dad, and i think that his mom. lisa: we mentioned bears and i want to be clear of something. when i am skeptical or trying to look around corners it is not an investment call, just because markets have hit record high does not mean the end of skepticism, and i think the difference between people calling for the world collapse is different from looking around corners. tom: that is like a chicago philosophy discussion, you have
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bell. the countdown to the open starts right now. announcer: everything you need to get started -- get ready for the start of trading, this is "bloomberg the open" with jonathan ferro. ♪ jonathan: live from new york we begin with a big issue, record high after a record high. >> day after day of record highs. >> new record highs. >> reaching record highs on the s&p 500 and the nasdaq. >> equities look relatively attractive. >> we have not had a significant correction of 10% or more in almost a year. >> in the short-term we are almost euphoric. >> equities become the proverbial term -- there is no alternative. >> we are seeing a very strong economy, a strong recovery, and a lot of cash on the sidelines. >> you have