tv Bloomberg Surveillance Bloomberg October 29, 2021 8:00am-9:00am EDT
>> bottom line, you cannot expect to turn up a global economy, then to it back up. >> some pushback on where rates are going. >> the expectations are pretty seriously overdone. >> there has been a shift that seems to demonstrate that central bankers are inherently hawkish. >> i think we will see the hawkish trend to continue. >> this is "bloomberg surveillance." here is tom keene, jonathan ferro and lisa abramowicz. lisa: good morning.
this is "bloomberg surveillance." jonathan ferro is off and kailey leinz is in. i wonder, as we talk about the geopolitics, how inflation really is the backdrop as we get higher than expected inflationary expectations. tom: we have been a little bit off the market coverage today, we will try to get back on track now. to your point on inflation, lisa, what i suggest for the world leaders in rome, and onto the 30,000 people in glasgow, what i would suggest is inflation is different in many different areas. not just american inflation. lisa: well said. tom: did i do ok? lisa: honestly, with the euro region, what we have seen with the ecb is they are dealing with imports. and the inflationary print is more disinflationary than in the u.s. quite but how does that
factor into discussions about supply chain disruptions, about how to alleviate this at a time when there are other issues present. tom: and we are setting up for that year and dash -- end dash, i love what michael purves said, the beta chase. lisa: it is meta, ask mark zuckerberg. i think it raises a question for november and december, what the holidays are going to look like. we have heard it may be disappointing from amazon and apple. there is a concern on whether they will get iphones under the tree. tom: i do not agree. lisa, help me. if there is a catastrophe at amazon, if whole foods does not do sales, they lose those sales, right? but it is physical stuff, we will buy it anyway. kailey: how much does that get redeployed? lisa: where this is a point you made yesterday, people are not
buying an edition, just waiting for the next one to come out. that is why we saw the shares down. the bigger picture is these two stocks account for a 10% of the s&p 500, so it is not a minor fall on the disruptions. kailey: i love the weight analysts -- way analysts at goliath, they feel the pain committees of the biggest companies out there that are feeling the supply-side issues. to your point, i talked about my apple watch yesterday, i did not want to wait for anyone because i need one now. if i did not buy an iphone 13, if i can wait another six months and get the 14, given apple's track record, will probably be better. tom: we are starting with the colonnade, peter's square, 284 columns awaiting the president and first lady there as they leave the pope and vatican, moving on to italian
dignitaries. an important meeting with mr. mccone at the french embassy. on the data front, futures -22. a yield reversal. let's take a look at the data. bring in mr. clements. -- clemons. lisa: i do not know what has been driving the whiplash, because we have not gone massive statements out of the central banks and we have not gotten catalysts beyond economic data points, yet we have brought forward so much rate hiking expectation. we are talking about a new normal. central bankers are not pushing back dramatically. scott clemons, partner and chief investment strategist at brown brothers harriman and co. i want to get your sense of the volatility at the front end of the yield curve bleeding into longer end, over the past few days, when there has not been a major catalyst that's identifiable. scott: what we are seeing is a
reflection of continued uncertainty in the economy. the big 100,000 foot lesson of the last 18 months is for all of its volatility, the financial markets are finely tuned. when you dislocate them, as covid did, complex systems do not heal quickly. and in almost any data series, be it the bond market, inflation, gdp, the labor market -- anything is still showing signs of fibrillation, that will take time to sort out. so right now the bond market is being pushed and pulled between a 2% gdp growth figure that we got yesterday, or do i believe inflation is the new normal? i think we will see more volatility on a daily basis as bond market participants sort the issues out. tom: brown brothers harriman goes back as far as the setting of st. peter's square, it is a
venerable and ancient firm, so your idea of a short term is three years. the bbh rule is short-term is five or 10 years. how do our viewers invest for andrew bbh -- for a true bbh long-term? scott: you focus on fundamentals and understand that price volatility is a feature of these markets. i have been surprised we have not seen more volatility over the past 18 months. we are getting into the bond market now, the little bit in the equity markets in september. to me, the real driver of the equity market in particular is the growth we are seeing with corporate warnings, and the growth and profitability. that's fundamental, that is not day-to-day price volatility, that is the fuel that drives markets forward. it is an under told a story driving the markets forward on a
specular tory basis, not to deny the likelihood of short-term volatility in prices. kailey: let's talk about earnings. things were going well, but then amazon and apple had big disappointments after the bell. if tech is not leading the way, what does that mean for the broader equity markets? scott: it is something that worries me because the markets have become so top-heavy in a handful of familiar names we all know about mother have stumbled. -- all know about have stumbled. they are a larger presentation in the markets. but we are cautioning investors to look through that headline volatility. we are active investors, so we can choose to avoid it some of the larger names in technology and find the companies that have been left behind, those with characteristics we think will see them through thick and thin
almost no matter where we are in the economic cycle or the market cycle. as a potential source of near-term price volatility, absolutely. some of these large technology stocks stumbling for one reason or another is a potential source of price volatility at the index level. tom: a personal note, i would love you to speak to this, ground zero of all we invented here with bloomberg on the economy and bloomberg surveillance is 1907 in the structure of american finance. you are on the board of the morgan library, and there is a study of jp morgan from 1907, when he saved this nation by simply writing a check. what is it like for you, so active with the morgan library, to be in that room where we began our modern finance? scott: you and your producers have done your homework. it's remarkable, the advice i
give to young investors is to study history, because although regulations change, markets change, the fed changes, human nature stays the same and of the panics of the 19th century and early 20th century still happen today. it's lust, fear, anxiety, desire. rereading that history come in 1907 and the actions morgan took in that library is in wonderful testimony to how fragile this economy is, put in the long run how durable it is as well, because here we still are. tom: i expect lisa abramowicz's children to be down at the jp morgan library. they will go, this is so boring. lisa: i have brought them there. they have been there. tom: how did i know that? lisa: they had kids activities,
like ancient highlighting of, you know, pictographs and stuff like that. it is great. tom: it is truly ground zero. you say to yourself, where is there a point of modern finance, and scott talking about '07 under the advent of the federal reserve in 1912. that room is where it started. you close the door, that is basically what he did, he said, we are not leaving the room until we fix this. that is what they did in that crisis. kailey: i will have to say, i have not gone to the library. tom: this weekend. kailey: maybe. tom: let's go back to rome. lisa, this meeting is not a small matter. lisa: how did this happen? it could have been smoothed over if they had been alerted to this about the summary, if they had had a sense of what was coming with the contract. it felt a little bit like an
unforced error, and i wonder how they will remedy that. tom: the president and first lady are behind schedule right now, not a surprise. to see the president of italy from sicily, then they will see his excellency, mario draghi. and then they will be stopping by that restaurant you ate at. lisa: on the remember is the pizza i had after visiting the vatican. kailey: gelato? lisa: pistachio. tom: there we go. eating across the room. -- rome. lisa: we are all in it for the food. tom: stay with us, from rome and new york, this is bloomberg. good morning. ♪ >> with first word news now, as tom mentioned president biden went to the vatican today to meet with the pope. the vatican insisted the meeting be closed to reporters who are
traveling with him to the g 20 summit. the u.s. conference of catholic bishops are weighing whether to grant him communion over his support of abortion rights. and gigi ping will skip the g 20 summit this weekend, instead addressing leaders by video link. he is continuing his preference of staying home while his government takes a zero tolerance approach to fighting the coronavirus. and microsoft is on pace to be down apple to become the largest listed company by market value. apple is falling while microsoft is little changed. if the result holds up, the software giant will have a market cap of just under $2.5 trillion, beating out apple. the last time microsoft dethroned apple was in the first half of 2020. a the quarter for big oil, chevron posting its largest profit in eight years. surging natural gas prices boosted cash flow to an all-time high. exxon mobil posted its biggest profit and seven years.
the company pledged to spend as $10 billion on share buybacks. chevron is considering buybacks as well. coca-cola is close to buying a controlling stake in the sports drink maker body armor. bloomberg has learned a deal would value it at a billion dollars. in 2018, coke acquired a minority stake in the company. power it is -- power ade is a competitor of --. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm john hyland, this is bloomberg. ♪
the inflation outlook, and that is inducing central banks to look for optionality in tightening policy, if not now than in the months to come -- then in the months to come. tom: the president and first lady, the symbolism of our second catholic president leaving the vatican now, on his way to meet with roman dignitaries, including mario draghi. this is the g 20 meetings. he met with pope francis, he met with the pope and and then as well the secretary of state for the vatican city state, cardinal pearland. this is a replay of the first lady, i believe, leaving the vatican. and we will get more coming up. right now, within the g20, within glasgow next week, francine lacqua will be in
glasgow, we must digress to what people in both jagged -- both geographies use, an apple iphone. alex, i was so fascinated at that i went to the financials last night for apple, and the jump from 2019 to now shows a company that may be the most successful cash generator in the world, so why is the market so upset this friday morning? alex: they are looking to the future, unfortunately. we knew that things would be difficult. our colleagues in taiwan have reported that they were not expecting to make as many iphones as they had expected, and now they have put a number on that, there will be a $600 million hit to revenue in the next quarter. there's some good news, that this is all about supply. the demand will continue to be there. that is different when you think about others. tom: when i look at the
technology, which of course mr. cook loves to speak about, there is an extraordinary chip here, that meant but row -- that ma cbook pro there. where are they with technology and innovation right now? alex: do you mean like, where are they going? i'm not quite with you. tom: neither is lisa or kailey leinz, so join the crowd. i'm talking about the idea of the innovation that they like to emphasize, is this just another quarter or entry into a new year? where did they stand on the innovation arc right now? alex: the latest iphone is probably one of the least significant upgrades compared to the previous years. nonetheless, which -- with each iphone they improve power and give you a better camera.
with the improved processor and camera, that means he will be downloading bigger apps, taking more high photos and video, so that means you probably need more memory. so what seems like incremental updates to the consumer is actually brilliant because it means you often have to buy more memory, and it's low-margin, cheap to buy, high-margin to sell. these improvements are building toward whatever apple will do with augmented reality. apple is already doing what facebook wants to do, they are doing it in your iphone. the more they do better cameras, they come forward with better apps that hopefully they can build into whatever smart glasses they eventually come up with. lisa: ok, i want to get a sense -- apple is doing fine. but amazon's results are more
worrying, especially to those trading the stock down. the idea of no profit potentially into the holidays, the holiday shopping time, when you have labor costs where they are. was this an execution problem or is it a broader economic problem that amazon is facing? alex: amazon always runs it's relatively -- itself relatively tight margins. the things that are concerning here is unlike with apple, where if you need an iphone, if you cannot get it in this quarter you will get it in a subsequent quarter, for amazon christmas is the big season, where you want to be making a bunch of sales. if you're not able to do them at christmas, there is no guarantee they will reappear in the new year. you look at increased costs, and to the concert as are higher wages, higher logistics costs, there are problems with the supply chain, so from an amazon point of view it is more concerning. kailey: that raises the question
of the philosophy of amazon, because the company has traditionally not prioritized making profit as it has serving its customers. alex: yes, that is true. but at every juncture where we think they are making a misstep, then they have a blowout quarter a few months later. they have the ability to cherry -- to change, tamp down spending in order to boost profit. perhaps they got planning a little bit wrong, we do not know. we do not know if they could have tightened at this picket on other things going into this quarter. perhaps they will succeed at doing so in the next year. tom: alex webb on the innovation of apple and the mysteries for amazon. this is in the context of share by backing. the goldman sachs note was extraordinary. 8% share buyback, that is a huge number. kailey: north of $850 billion worth of buybacks in 2022,
because there is a lot of cash out there. balance sheets are looking good. why aren't they doing anything else with it? why not other forms of capex? tom: we will digress. we are so fortunate as we go to economic data, michelle meyer coming up as well, michael mckee and i have covered all sorts of different events over the years, some of them involving the vatican. the symbolism today of going from my childhood and the uproar i personally witnessed over jfk as a catholic, to joe biden, who has been very outspoken about his catholic faith, has really been something. michael: the interesting thing is it has diminished as an issue. for john kennedy, it was a huge issue. in his campaign, he had to reassure americans he would be the leader of the free world and not take orders from the pope. tom: kailey leinz is going, that
is not. -- nuts. michael: but there is not a dispute in the catholic church because of joe biden's openness to pro-life -- or the pro-abortion movements, whether or not he should receive communion. but that is an issue for the catholic church and is not something that resonates with voters. interesting thing about john kennedy, when he went to rome, they had a brand-new pope. and the big question for the media was, does he kneel and kiss the ring of the pope, as catholics are supposed to do. and he did not. tom: and the jfk scar outside of the palazzo there now. we are so distant from that. now we will migrate to economic data, coming up here with michael mckee.
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tom: very good friday to you. kailey leinz is here for jonathan ferro. i believe he is in around, i am not -- is in rome, i am not sure. lisa abramowicz is with us. michael mckee, as we roll out economic data, am i right that this is more important than the gdp look yesterday? michael: it gives us the latest spending numbers. at this point, what we can see his personal income was down by 1%. i'm going to look at the numbers, but i bet can tell you where that is, that will come from government transfer payments. personal spending was up 6/10 of 1%. the headline number, we are up 3/10 of 1% for the month.
this is the number that is in the fed's mandate, their target, that is the topline number. but the core stays at 3.6% after a 2/10 percent increase, with expectations, although we thought we would get to 3.7%. so, basically, we have plateaued with the inflation numbers that the fed watches. tom: lisa committed to you have any understanding of what might -- lisa, do you have any understanding of what michael just said? lisa: people are earning less. but what caught my attention is the employment index, how much of the wages are going up or how much expensive it was to get labor. 1.3% versus the expectation from 0.9% underscores that pce index
at its highest level since 1991, the idea that labor is driving part of this. how big of a deal is this? michael: a big deal as long as it continues. if it starts to level off, it will not matter as much. in the eci, we saw overall wages up 4.2% for private industry, 4.6%, the highest in some time, but the issue is, will that continue. do we see people continuing to ask for more money because they did not get it in the -- they did not get enough to keep up with inflation. right now, we are not seeing people keeping up with inflation in terms of their wages and salaries, but it has only been a couple months. it's not a big deal so far. kailey: when we are talking about earnings season, we are talking about companies passing on costs to consumers, they have
to be tolerant of that. at what point does that become more of a question, if wages are still being held back relative to inflation? michael: you might get a good idea of this when it comes to january and we start getting the earnings reports, reports from ceos on the earnings calls about whether or not they are having to continually raise compensation and whether they can continually raise prices, those are going to be two key questions for the fed. the funny thing is, we get the fed meeting next week, and we will get the taper announcement, and event immediately on thursday morning, tom keene will go, ok, when will they raise rates? tom: that is exactly it, how did he know i would say it like that? thank you, michael. an improvement on the day, futures -19.
with a reset view on the american economy, michelle meyer, bank of america merrill lynch managing director is joining us. what did you take about 2% yesterday? michelle: it came around her expectations. we are holding to our view that the fourth quarter should show a rebound. we have stronger signs of consumer spending. when we look at our card data, we have a really healthy move higher in spending with the services economy re-engaging, with potentially an early start to the holiday shopping season, so we think we will see stronger consumer spending, business investment continuing, and contribution from inventories. so, our forecast is 6% real gdp growth in q4, a nice pickup from the third quarter. tom: major inside baseball.
how can you count inventories with the upset of supply shock? michelle: this is going to get wonky -- tom: it is wonky friday, it's ok. michelle: for gdp tech allegiance, it is the change of inventories. if you are contracting by less, it is actually a positive contribution for gdp growth. that is what we saw in the third quarter. inventories are not as down as they were in the second quarter, so that added to percentage points to gdp growth. we are adding to inventory levels, -- are not adding to inventory levels, but we can subtract. lisa: we just got spending data, how much does it enlighten us about what happened with the third-quarter gdp reading and what we can expect going forward? michelle: i think that the consumer is very much what we
should be paying attention to. as you said, it is important to understand the money in and money out. the wage data this money was by far the most important statistic. it was a big increase when you look at the cost index. it shows there is more purchasing power for the consumer, but also tells us there is more inflationary pressure building in the broader economy. businesses will be able to pass more of those costs on. they are doing it in terms of price pressure. the big picture for the consumer is there's still a lot of cash out there, there's a lot of ability to spend on credit cards. and the savings rates, although they are coming down, they are still pretty elevated. the extent that consumers have items to buy, they feel comfortable re-engaging in the services economy. we will see that in the data.
lisa: let's sit on the employment cost index, because i did the data, and this is the highest read every going back to 1990. this is a shocking increase in wages, in how much labor is demanding. what does that mean in terms of the stickiness of inflation and the response of central bankers as the fed meets next week? michelle: the fed can look past some of the noise in the average earnings, but employment cost index, they pay a lot of attention to. this is a big number. and it is consistent with what we are seeing in terms of the high amount of job openings, the fact purchasing power has shifted to the employee. we can see that in terms of labor costs. when you have wage growth of this magnitude, especially if it continues, it pushes -- you get
this push into broader prices, and that sets up for much more of a sticky path higher for inflation and the fed will pay close attention to that. kailey: we will be watching the fed decision on wednesday, but then on friday we have a jobs report. given the labor market dynamics lisa referred to, what are you expecting to see for november? -- october? michelle: we are looking for 450,000 in growth, a nice pickup from the last couple months, but not to the levels prior to the pandemic. one component in the comport will be the labor force participation rate, whether or not we are seeing a move back for supply, because that is critical in order to stem inflationary pressure and keep the cycle going. we are dealing with large supply
side constraints, and any relief it will be critical. tom: michelle, thank you for briefing everybody, as we change and adjust. lisa, some serious tweaking going on. lisa: i cannot get over the employment cost index. tom: i am glad you brought it up. lisa: it is really important, and michelle saying it is setting up a stickier path of inflation. it came in the hottest in history, going back to the 1990's. what does this mean in terms of how much the fed can push back against the hawkish tilt? tom: lisa abramowicz is on top of the moment here. looking at the eci, this combines wages and benefits. look at amazon at $18 an hour, whatever, but it is about benefits costs as well. kailey: i am glad that you brought up amazon, because this is exactly what we saw with amazon yesterday.
profits being pressured in a substantial way because of higher labor costs. you have the logistics of getting goods to people within two days, that requires a lot of human manpower and you have to pay more to get people in the door. the question is, how sticky is that? are we going to be looking at a higher wage environment and what does it mean for corporations? tom: the president is meeting with the italian leadership, but here we have playback of the president meeting with the pope. the president attending pope francis's inauguration of 2013. lisa: i expect the meeting to be quite --, given the immigration conversation that the pope has been vocal about, and vaccinations. to take a vocal stance in the pandemic is exactly what he has done has he had tried to get his
followers emerge from this health crisis. tom: the symbolism here as they marched down the stairs of the vatican, with the swiss guards, and perhaps we will see the cardinal here. this is from earlier. that's the secretary of state of the vatican state. what is important is the president would like to bring the swiss guards back to america to get that legislation through. kailey: he is facing issues on the domestic agenda. and facing challenges at this g20 meeting. pope francis has also been vocal on the climate issue. he said humanity must take action to address climate change. will we get radical action at cop 26 is the question. tom: there with the bishop of england, mr. gallagher. stay with us. this is bloomberg. ♪ john: president biden is in rome, where the group of 20
leaders will try to come up with a deal on climate. a draft seen by bloomberg news shows how much is up in the air, the push to achieve net zero in missions by midcentury is looking out of reach. the u.s. and taiwan are working to secure semiconductor supply chains, according to a u.s. envoy to taipei. last month, they were ordered to hand over information on the ongoing chip shortage. manufacturers are concerned about possible leaks of trade secrets. in the u.k., an escalation in a fishing dispute with france. a french ambassador will talk with the british government today. the british secretary wants an explanation of the disproportionate threats, and france is threatening to disrupt energy supplies over fishing rights. volvo rising, after raising $2.3 billion in an ipo. investors are buying into the company's turnaround and the
promise of an electronic future. and leon black has escalated his conflict with a former russian model who has accused him of sexual assault. he has sued her, her law firm and others, saying they are behind a conspiracy theory to destroy him professionally and personally. black said he had a consensual affair with her. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm john hyland. this is. bloomberg -- is bloomberg. ♪
everything that we do, to reflect who we are and what we hope to build, i am proud to announce that starting today our company is now meta. tom: kailey leinz, help. lisa: [laughter] he is unimpressed. tom: please explain this. kailey: i wish i could. we have to think about this conceptually, it is moving toward a cloud performing platform and it does not want to be reliant on the alphabets and amazons out there. couldn't you still have made this push into the meta-verse, couldn't you see that as your company's future and not rebrand it? would facebook have done this if it was not feeling the heat politically and it is kind of trying to muddle what's going on. tom: i would kill to get scott galloway on right now. you have to be kidding me.
there it is. a few corrections. michael mckee, and his wonderful explanation of what we are observing in rome, there was a slip of the tongue where he was confusing and presidential view on this issue of abortion and pro-choice, pro-abortion and that, so we apologize for that. the president in support of a pro-choice position. and a correction, somebody was listening at one of those colleges i cannot pronounce in oxford because i am the ugly american, and i butchered the poetry of the 18th and 19th century. the way you will remember this, i was told by the whippersnapper from oxford, is it is the eighth, keats and shelley. and the only way to pronounce them correctly is dispel them incorrectly, which i did. if i read yeats and keats, can i
tell them apart? kailey: i wish i could help you. in rome, is the memorial house, and keats died young from tuberculosis. tuberculosis is something we now have a vaccine for, and that brings me back to the conversation that the president had with pope francis earlier, we understand he praised him for his leadership and for being so vocal on the climate change issue, in particular. tom: on radio, we had yates as yates and keats as keats, and we would let some -- and we will let some english major explained to us how we went wrong. lisa knows i have been wrong for years. but kristina hooper, chief global market strategist for invesco, where do you get the
courage to participate in 2022? how can i own equity shares in the next year? kristina: to take a step back, this time last year was when it was first announced that a vaccine had been developed. actually, we heard about two that had been developed to protect against covid-19. before then, the outlook was bleak and they were expectations it would take a long time to arrive at a vaccine that would be far less effective. so, we are in a very good place today. the problems we have, the supply chain disruptions, higher employment costs -- those are good problems to have, given where we were just 15 months ago. so, as we look out to 2022, certainly we expect to see a moderation in stock market performance. we expect to see more volatility. but we have an incredibly
accommodative central bank backdrop, even once normalization begins, and we also have a solid economic foundation. tom: i look at the set up for this year and the economic foundation, and what it devolves to is a 60-40 split. how do you allocate between bonds and stocks now? kristina: you should be well diversified. within equities, you need to be thinking outside of the u.s. certainly the u.s. has been a stalwart, but we need to be well diversified, we need exposure to developing -- to developed markets, but we also need to have exposure to emerging markets. within fixed income, it will still be a low rate environment for some time to come, so we need to move out on the risk curve, have exposure to credit and high-yield, certainly have exposure to some emerging markets.
so maybe it is not 60-40, maybe it is an allocation where we see a significant portion to equities, some fixed income, and some to alternatives. kailey: when we are talking about bonds and stocks, how do you make sense of an equity market that was at an all-time high and a yield curve at its flattest since march of 2020? is the bond market sending a signal about growth that the equity market just does not get? kristina: the bond market is certainly sending some signals, but we have to keep in mind that what we are looking at is a snapshot in time and this reflects concerns and fears today. it does not necessarily reflect what's coming down the pike. i believe that we should expect some slowing. we will see a bit of a pickup in the fourth quarter, as the covid headwinds have dissipated, but
then we should see moderation and growth next year as we transition into a more normal state. this is not a bond market telling us that disaster is ahead, but it is one that suggests growth will moderate and you can own equities in a modern growth environment, you just have to choose where to be. tom: thank you. you know the bond market moving out the economic data, and i think it is basically wednesday, an adjustment, and now we are back to wednesday. kailey: november 3 will be an important day for the federal reserve, november 5 as well as we get a read on employment. that's the part of the data that has inspired the move, the idea that wages are going higher and maybe that creates more persistent inflation. tom: .55 and the two year yield is back to that set of a higher two year yield and 30 year bond underneath 2% as well. it's a snapback to the worries
we saw on wednesday versus the good news is that we saw earlier today. the real yield right now, -.91%, as well. what are your thoughts into november? kailey: i think it is the difference between the bond market and stock market. we could talk about the bond market all day long. it's been crazy, clearly a market with higher inflation, then thinking it is going to cause more early, may be premature policy tightening that will choke off growth. at the same time you have an equity market right around highs, but that will change because apple and amazon, two of the faang stocks of that are no longer going to be faang stocks because the "f" is gone. tom: we will see. we have a president on his way to meet with the president of italy and his excellency, mario draghi. i love saying that.
set for the start of u.s. trading, this is "bloomberg the open," with jonathan ferro. lisa: we begin with the big issues of supply constraints out staying there transitory welcome. >> the system is under pressure. >> it cannot keep up with demand. >> because of constraints and issues. >> there are 500,000 containers off of the coast. >> more ships than ever. >> we are looking at the ships stacking up for months. >> ports are processing more imports than ever. >> we have two months until christmas time. >> people are spending -- are thinking about spending or buying early. >> the supply chain cannot keep up. >>