tv Bloomberg Surveillance Bloomberg November 3, 2021 7:00am-8:01am EDT
>> because they knew the impact on the equity market. >> the labor market picture right now does not scream hike now. >> the fed is not trying to kill the expansion. they are trying to expand it. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: the fed decision hours away. from new york city, for our audience worldwide, good morning. this is "bloomberg surveillance ," live on tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. your equity market just off all-time highs. futures softer by 0.1%. it is all about chairman powell a little bit later. tom: we will have special coverage with some terrific guests lined up.
after the press conference, it is the then what. the jobs report is getting no respect today's on. -- no respect two days on. jonathan: the extra leverage senator manchin may have gotten overnight by the political events in this country. tom: some predicted it, many did not. the republicans win. new jersey is a job dropper. we don't know yet. 88% of the vote in. we will see how that goes. but it is is a readjustment. the liberals had a tough night. jonathan: you raise an important question here. what is the big surprise, the swing in virginia or how tight new jersey is? lisa: new jersey i think is the bigger surprise, but the fact that both are occurring at the same time are raising the
cloud of democrats potentially losing the 2022 elections. jonathan: the president of the united states returning to the united states with a few problems. tom: i think so, starting with what he did not accomplishing rome, what he did not accomplish at g20. in scotland, he's got to come back and he's got to accomplish. i think a new dawning awareness of his pull positioning here one year in. jonathan: he wants crude prices lower right now. equity futures lower by four. four-day winning streak into wednesday. we are down about 0.1%. crude, $81 90 two cents. pylon the pressure for opec to do something. the united states keeps leaning. will they finally break? this is about twos for me.
how much pushback we get a little bit later. tom: 0.45%, i am going to call that a lower yield than what we saw a week ago, 10 days ago as well. twos-tens spread, 108 basis points. as george sarah vallas just pointed out, what do you take of a real yield that won't budge higher? tom: financial conditions -- jonathan: financial conditions are still loose. lisa: the key question for the fed, for the ecb, for all of the central banks around the world, is employment. how much do we get offset to this higher commodity prices from wage gains? eight: 15 am, we get october adp report expected to soften just a bit. i don't know how much we can derive from this when it comes to friday's report. but i am looking at, participation rate. how much is it coming back to where it was pre-pandemic? it has remain subdued. then of course, employment costs.
how much are they coming up? wages, especially as you see an increasing shift towards the power dynamic. the treasury department of the united states is planning to release its refinancing announcement. the expectation is for the first decline in debt sales in the united states going back to the direct aftermath of the 2008 credit crisis. how much does this mean a lesser deficit? how much does this mean that going forward, any taper gets offset? at 2:00 p.m., the fomc releases there policy decision. then of course, fed chair jay powell gives his press conference. two-year guilds have come down recently, as tom was talking about. part of the reason why is the pushback we are getting from the likes of ecb president christine lagarde, but also the australian central bank coming out and saying we will give up yield curve control, but don't expect us to hike rates anytime soon. jonathan: full coverage, special
programming, the fed decides on tv and radio, a little later this afternoon. what do we knew when they moved back to new york city? tom: the special welcome is to suggest they go below 59th street. i think that is a good idea. lisa: have you taken the advice? jonathan: to your favorite mcdonald's? tom: drop down into deepest lower manhattan, like the 30's. jonathan: murray hill is what you suggest for david stubbs. let's ask what david thinks of that, global head of macro at j.p. morgan. this talk about this market. the fed decides a little bit later. what are you looking for? david: for the record, i used to live in murray hill. jonathan: i that you did. [laughter] david: we are expecting the fed to fulfill market expectations. tapering $50 billion a month. probably pushing back
significantly on the fact that the end of tapering will bring a rate hike. if you look at those conditions of five-year five-year inflation expectations, they are still contained. look at the participation rate, you see a gradual recovery. that is before the impact of schools going back, of increased availability of childcare. it really starts to impact the female labor force. that is where a lot of the workers have left. we are expecting them to come back into the labor force over the next six to nine months. for us, that means may be the first rate hike is may be late 2022, not in the summer. tom: what is so important here is j.p. morgan has framed a courage to stay in the market. what do you say to people now scared stiff? david: there's always reasons to fear things in the markets at any time. you can look for the next six to 12 months and find may negative
catalysts. the first thing is look at the incredible strength we are seeing in earnings. it is surprisingly market, surprising all the analysts. we have seen major upgrades to revenue on the topside and tremendous cost control, even in an environment of difficult inflation for input costs and for the labor market. we still see companies delivering on that productivity, still putting new technology to work. you have other things coming into play right now. major buybacks, for example. as you are seeing in the previous segment, monetary conditions are still very loose. look at the high-yield market. there's almost no defaults in the last few months. the trailing 12 months default rate, very low. this is an economy still primed for growth. earnings still rising. fixed income, it difficult place to be with high yields and tight spreads. that is why we remain overweight inequities. lisa: there's a question about fiscal policy on the heels of the election that took place
yesterday in the united states. how much do you expect the democrats to come together with some sort of fiscal proposal that does not include materially higher taxes in a way that perhaps has not been priced into the market that could be even more buoyant? david: you made the good case that the entire year, we have had about a five dollar hit to the earnings from the expected corporate tax changes. we see the discussion now moving over to personal taxes and more of a paid for package. primarily, what the market wants to see his fiscal policy addressing america's challenges. america needs infrastructure, so let's pass it, firstly. i think america also understands the democrats have certain priorities and wants to pay for those priorities in a responsible way. i think it would be a bigger hit if these things didn't get through at all than if they get through with certain tax mothers
-- tax measures that are unpalatable to certain parts of the market. you put the bills together, there is still a modest amount of fiscal support. without them, is america going to address those challenges and infrastructure, and climate change, and everything else it faces? that is what democrats were elected to do. i expect them to eventually do it. jonathan: i am trying to understand how you get exposure to that theme right now. what are you doing to get exposure to the success of the democrats taking on the challenges you just wrote out for us? david: firstly, it is not clear exact label will be in the composition of the bill. the framework can be partially changed. i think the market has been positioned for a while for this, for continued fiscal support, for infrastructure plays. but i am not sure if this is the biggest issue for the market right now. i think the biggest issue is what is going to be the strength of growth next year, will be shortages of things like semiconductors, the turmoil at the ports, the trucking
shortages start to impact growth , and will margins compress. will margins compress based on some of that cost inflation? our bet is actually no. we think they are going to actually be maintained, and that is why we think earnings growth, although it will decelerate as we go into midcycle, and earnings valuations may come down a little bit comedy the market still has upside based on those fundamentals. no matter what happens in washington, upside has some huge shock. jonathan: it is good to have you back in new york city. david stubbs of jp morgan. tom: i'm sorry, we've got to do this. david stubbs in new york. it screams got to get out the amex, go nuts, 2nd avenue deli. jonathan: which one? just deli on 2nd avenue? or is that the name of the deli? in case anyone is confused.
tom: they've got foreign accents, lisa. what can i say? the pastrami deviled eggs, 2nd avenue deli. jonathan: ok, i've lived in more of manhattan then you have. that is for sure. [applause] and i have seen more of manhattan then you have. lisa: the tirade is coming. ok. tom: maybe david will take us to f5zmvy■;ñ tom keene, lisa abramowicz, jonathan ferro. i have not lived in maryhill. equities down 0.1%. can you see me in that sports bar saturday night, wearing my college hoodie from years ago? what is that about? i will never understand it. tom: i once lived across from where katherine hepburn lived. jonathan: grown adults wearing what they used to wear a students. anyway, if you want to explain, you know where i am on your terminal. they already are. [laughter] alisa levine of bny mellon coming up on this equity market.
all-time highs this fed decision day. this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. it is a blow to president biden and democrats' hopes of keeping the congress in next year's elections. in virginia, republican glenn youngkin defeated terry mcauliffe in the closely watched governor's race. a year ago, joe biden won virginia by 10 percentage points. the central bank is likely to announce it will start producing its asset purchases, and chair jerome powell will probably say that the tapering is not raising interest rates anytime soon. hong kong is in final talks with chinese officials about reopening their shared border, according to local news media reports. it would be a major breakthrough on reviving travel exchanges that are crucial to hong kong's economy. discussions are said to be focused on whether hong kong will adopt the mainland's health
code system. in sports, the atlanta braves overcame years of frustration to win the world series for the first time since 1995. they beat houston 7-0 in game six. . jorge sola was named most valuable player. the strike against deere will continue. numbers of the united auto workers union rejected a deal with the farm machinery maker. deere's latest offer included larger pay hikes and a signing bonus of $2500. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. --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. i'm ritika gupta. this is bloomberg. ♪
are winning. we want every legal vote counted. jonathan: this was tight. the news is it wasn't meant to be tight. the incumbent new jersey governor and the republican gubernatorial candidate. alongside tom keene and lisa abramowicz, i'm jonathan ferro. your equity market down 0.1% on the s&p, we are negative for. in the bond market, yields in a couple of basis points. the commodity market and focus, too. we are down 2.4% on crude to $81.91. can we take a look at expedia -- or rather, zillow? i have expedia on the mind because i and booking a vacation. can we take a look at zillow? tom: going to murray hill? [laughter] jonathan: we are down 19% on
zillow. tom: i have no sympathy. i'm sorry. jonathan: zillow shutting its home flipping business. they've got to sell 7000 homes. i love the comment from the ceo. i think everyone was saying they would become a market risk taker. tom: i am not going to give my opinion. it is just children playing. jonathan: you think this is children playing? tom: it's a joke. jonathan: i can't tell when he is being serious or not. tom: they bit big on house flipping. jonathan: right. tom: how is that different than robinhood with the tangible assets? it is basically the robinhood of housing. jonathan: is that how you describe it? tom: i don't know. lisa: but he has no opinion. [laughter] tom: can we get going here on politics? jonathan: we are down 19%. tom: the 9:00 hour, i will
grilled mayor adams of new york city on his police force. to me, that is the emotion of new york city this morning, in a very emotional minneapolis, with perspective forward for the president. jack fitzpatrick joins us from bloomberg government. i don't want to go into the election returns. we are all sick of it. we've got new jersey to worry about as well. i want to talk to you about how president biden speaks to the democrats on long island that may get a -- that may give it up to republican district attorneys , how they speak to the democrats in kentucky. what do they do? jack: it is a tough issue for democrats on the social issues, on issues like policing, probably looking at virginia on schools. really, i think the president at this point once to shift the attention away from some of the more divisive issues and not talk about it quite as much as some other more progressive democrats may want to, and try
to get a piece of legislation passed so that he can sign it into law and focus more on the economic recovery. tom: can they whip the votes into legislation and successful law given the outcome of the past when he four hours? that's the past when he four hours? -- the past 24 hours? jack: the past 24 hours does not help them at all. i suspect they will try to move quickly because the virginia results can be a bit of a rorschach test. each side has their own views on what that loss means for them. clearly, democratic leadership once to move very quickly, and if they can sort out the complications with the salt tax, the state and local tax deductions, and a couple other things on the tax front, it is possible for them to whip the votes, and that is what they want to do, to have some sort of
accomplishment they did not have to campaign on a -- to campaign on in virginia. lisa: does this show the power of the middle, the independent? jack: if not the independent, then yeah, the middle, the moderates. if you look at the results in virginia even in the suburbs that democrats really dominated in the 2018 midterms and the 2020 election, it wasn't just a matter of low turnout for democrats. the numbers are pretty high. they just moved as percentages towards republicans. so the issues are there that are more persuasive for republicans than for democrats right now, which is one reason why on capitol hill, they want to change the subject with an accomplishment for democrats on the economy rather than the social issues that have been really tough for them. lisa: to push that forward, are the strategists you are speaking to saying it is more likely that democrats get a lot more done before the 2022 midterm elections?
because frankly, there has been a big warning flag sent to the most progressive members of the party. jack: yes, there's plenty of time for them to have really significant accomplishments. -- tim kaine said specifically it would've been really nice to have gotten something signed into law before this election area but they can do this in a matter of weeks, if not a couple of months, and pass something to act on a year from now in the midterms. tom: let me give you some micro reality. dearborn, michigan, the son of a lebanese truck driver does
really well. runs for office, actually wins. abdullah is the new mayor of dearborn. he supported aggressively the senator from vermont. how does he and the rest of democratic party politics moved to the middle? jack: i am not sure if it is a matter of those types of candidates moving to the middle, but there is a reality check when they have to decide how to work with the centrists in the democratic party. there are key races coming up like pennsylvania, where you may see somebody like john federman run on a pretty progressive platform in 2022. i think it stands to reason democrats are still depending on those progressives. the question is when they have to negotiate with kyrsten sinema
and joe manchin, how much do they leave off the table, rather than those types of candidates moving to the middle themselves? jonathan: the president schedule today, what is it? jack: i've got to admit i've been very focused on capitol hill, and i a little off of europe. i may not have an update for you on that. tom: it is "surveillance." you can make it up. just invent the schedule. jonathan: please don't do that. i have been fighting that for years. thank you, jack. when do we hear next from the president? it will be very interesting. lisa: the only public event on his agenda is meeting with his covid task force, so really interesting to see how empty it is when he is dealing with oil prices, dealing with democrats at home, dealing with the aftermath of people saying what did you do that we all lost. tom: i also see lunch at ben's chili bowl. jonathan: that's what you see in the agenda? just in case someone believes you, do you want to clarify?
jonathan: it is fed decision day this wednesday morning. good morning to you all. equity futures come in three, negative zero point 1% after four days of gains and another all-time high on the close yesterday. on the russell, we are positive about 0.1%. in the equity market since september 22, up 5.35%. equities up. at the same time, we have been pulling forward and pricing higher. the potential -- and pricing higher the potential for a rate hike. we had a 22 basis point move on the front-end of the curve since september 22. yields come in a little bit in the long and to 1.5278%. this is important. if you want to tighten financial
conditions, can you get this done with rate hikes? these financial conditions are staying loose. tom: for those of you on the radio, jon probably hasn't seen this headline out moments ago. we have a winner in our new word after transitory. you can use this on the data check. the new word is lengthier. inflation transitory, but lengthier than expected. jonathan: raises the question, how do they move away from this? how do they move away from this t-word without validating the price move if they don't want hit? lisa: and if they don't move away from this word, how much do they lose credibility from people on the ground? tom: i took it in the context of we need a lengthier data check. continue. jonathan: i will add on just a little bit more to make it lengthier. it is an important moment for this federal reserve, stuck between a rock and a hard place.
what is next with interest rates, and what is their view on inflation? how does the latter inform the former? let's finish on this, just for you, tk. on crude, this administration leaning hard on opec+. will they fold? this morning, crude in, $82.22. tom: you mentioned iron ore in china. that is a topic for another time. i am looking at the trend on commodities, and the trend is in place. jonathan: was that lengthier enough for you? $82.22 on crude. let's get you some movers with romaine. romaine: everybody right now is taking a look at bed, bath & beyond. this is the second-biggest volume mover, the largest percent gain or on the day, up about 53%. this is largely because of an buyback program the company announced yesterday and a deal apparently it has with kroger to add some of those private label
brands into kroger stores. it is not really clear how this is going to affect the bottom line. remember, you're talking about a company that three of the past four quarters has missed on eps and revenue. we don't get their next earnings report until january. keep an eye on lyft, a 70% jump in revenue in the most recent quarter, as well as the 51% jump in ridership. they say they will be profitable on a full year basis this year, those shares up 13%. its main rival uber reports tomorrow night after the bell. tonight after the bell will be qualcomm get keep an eye on that for insights into the -- will be qualcomm. keep an eye on that for insights into the chip problem. the biggest decline are out there right now on a percentage basis, zillow down 16%, over the previous two sessions, down 19%.
it is abandoning the home flipping business it started back in 2018 with a lot of fanfare and a lot of criticism. even just a couple of months ago, the ceo was saying this was still a good business. they actually sold two bond feels that were part of this -- bond yields that were part of this home flipping business. there's a 25% reduction in their overall workforce. however, some people not necessarily the it hard. cathie wood is buying into this dip. she's actually the fifth largest shareholder of zillow. ark innovation buying shares last night that they could to about seven point one million overall. we will see if that pays off. the stock is now down 51% from its all-time highs in february. that is yesterday's coast -- that is based on yesterday's closing price. qiagen said to be in talks with bio merrill for a potential tie up. we will see if this deal can get
done. qiagen had a big deal last year to combine with thermo fisher. a smaller deal here, rr donnelley apparently in a deal with atlas holdings to be bought out for about $852 a share. at about 2:00 a.m. this morning, chatham, basically its largest shareholder, said he was willing to pay $9.50 a share. it is about a two deal on an. enterprise basis. -- on an enterprise basis. tom: thank you so much. we can rip up the script with abby joseph cohen. she's unclaimed with goldman sachs. she is one of the people that keeps the fearful in the market part of the painting over at the goldman sachs shop. we are thrilled that the advisory director joins us this morning. i am going to rip up the script, and i can do this for someone who wrote aristotle on
investment decision-making in the financial analyst journal a million years ago. we are all getting lengthier. we are all playing the parlor game of extending the x-axis. we have been here before, haven't we? abby: we certainly have, and it is a pleasure to be with you and the team. another word we could use is protracted. basically, there are several factors now behind the inflation that we are seeing globally. some of these may prove to be transitory, yet protracted. that includes some of the supply chain issues. but some of them do represent the sort of inflation that one gets during the course of an economic expansion. the ones that i am looking at most closely have to do with wages. we have seen a notable pickup in average hourly earnings, and on the one hand, that is terrific
because it says something about the ability of consumers to continue to spend, and it also tries to get across the idea that we did go through an extended period prior to the pandemic in which wages are not quite keeping up. however, if those wages get embedded in the economy, what we see is that core cpi, and more importantly for the fed, core pce moves up. but the expectation of my goldman sachs economist colleagues is that we will start to see that calm down. one other point, if i may, we are still in a period where year on year comparisons are really difficult to do because we are emerging from this extraordinary period. a year ago, personal spending was negative. this year, it is positive. so what do we think is going to happen? there are going to be some price pressures and supply chain
pressures as well. jonathan: let's -- tom: let's do some cornell mathematics here. we can look at wage growth. i agree with your core theme there as well. the gloom crew speaks of abba wrapped -- of abrupt. your shop says calm down. state why we should calm down and avoid the fear of dynamics. abby: one is, as you point out, the mathematics. the year on year comparisons are really fraught right now, and we would much rather look at an extended period of what is happening at the core level. the other thing we need to keep in mind is that there are several factors out there that work in the opposite direction. that may suggest that economic growth will actually have the brakes somewhat applied, even if the fed doesn't do anything.
what are they? number one, we are seeing right now a change in fiscal policy. i am not talking about the packages that are stuck in congress. what we are seeing is that the programs that were previously implemented are rolling off, so the increase in federal spending which was, as you know, robust and equal to that 9% of gdp earlier in the pandemic?ívgç■gçw going to be growing at about 1%. fiscal policy isn't changed, it will be down about 2% next year in 2022. so that is a bit of a break. the other thing that we have to keep in mind is that we are not seeing the sort of rebound that many had expected in terms of employment. i am not talking about the unemployment rate. i am talking about the participation rate. there are many groups of people saying either they don't want to come back into the workforce or
they don't want to do it now. this includes working moms who are having a problem with childcare, and their kids are not get vaccinated. it includes retirees, the baby boom generation, a very large cohort in the united states. let's not forget the missing immigrants. in the decade prior to the pandemic, that 10% of the net growth in the u.s. labor force was due to immigration, both at the lower end of the spectrum and at the high-end. we have seen that reduce. one more factor, if i may, and that is while the u.s. and many other nations are slowly now emerging from pandemic restrictions, china is extremely tough on these restrictions, and china has 30% roughly of the world's global manufacturing capacity. if they tighten up or stay tight, that has implications for economic growth.
everyone has been focusing on the supply chain and the inflationary aspect. it also has impact on the growth. lisa: all of this sounds fairly negative. however, i wonder if the biggest pain trade in markets is not being bullish enough because it frankly supports the idea of real yields being as negative as they are, and there being a supportive backdrop for risk, at least within monetary and fiscal policy. do you agree that the pain trade is not being bullish enough, potentially failing to be so? abby: the economics team i work with does believe this will be a protracted process, that the fed , if it does announce this afternoon as they had signaled that they are going to taper, they will taper very gradually, and then the rising rates from the fed funds level could be a year off. but we have already seen, as you pointed out earlier, that interest rates have already risen in anticipation of this
happening. so the key for the stock market in particular will be economic growth and earnings growth. here again, i would urge people to recognize that those year on year comparisons are going to be very difficult to do simply because we are coming from a base that was so incredibly depressed in many industries that to talk about that growth rate decelerating, earnings still growing, but the growth rate decelerating, the second derivative is still going to be a good number. jonathan: i've just got a final question to squeeze in. are we doing the tom keene, abby joseph cohen christmas special this year? tom: her people have not talked to my people. jonathan: i look forward to this every year. are we doing it? abby: it will depend on what tom has to say. whenever i get that invitation, i am ready. tom: can i summarize that i
believe ms. joseph cohen just predicted spx 6000? that is what i took out of that. [laughter] jonathan: is that your invite for the christmas special? abby: i didn't hear that. tom: it will never happen again. [laughter] jonathan: abby joseph cohen when there of goldman sachs on this equity market. the headline for me is lisa is sounding more bullish by the minute. you just ask the guest if the biggest risk is not being bullish enough. lisa: the biggest risk i see broadly for risk assets to be destroyed would be wages, would be inflation actually going up more than expected. these people are all coming on and saying it is not going to happen. jonathan: ok. from new york, this is bloomberg. ♪
listening. i think this is a critical message in and of itself. when you bring rate hikes forward because we are responding to supply shocks that today has inflation higher, it does not mean that inflation will necessarily be higher and continue to grow. jonathan: fantastic to hear from jim caron of morgan stanley investment management. some fantastic voices on a fed decision this afternoon. from new york, with tom keene and lisa abramowicz, i'm jonathan ferro. we are in down zero -- we are down 0.06%. no drama into this wednesday. record highs. yields in a couple of basis points on tends to 1.52 96%. on twos, we have breached 50 basis points, and then we come back down again. yields in yesterday at the front end just setting us up for that fed decision a little bit later. tom: we haven't said enough about how the gloom crew has been humbled.
they have gone silent. but seriously, as you say, four days, but you can almost say october. jonathan: do you think he was saying that to you, lisa? lisa: no, it is not all about me. carry on. jonathan: is it not? [laughter] lisa: let me put it this way. if real yields remain this negative, there's a hard argument to be made that we are facing some kind of bear market. if real yields go more positive, then all of a sudden, you have a different scenario. if inflation picks up in a way that people are not expecting. that is what i was going to say. jonathan: what are in this year, 20 something percent? tom: that is lisa on the edge of joseph cohen. right now we will move forward, as we saw the president visit with the pope the vatican. we now visit with david wilson. we will do it now with transportation stocks. this goes back to the 1930's in
driving the theory forward as well. what does it mean if the transports do better? i still don't get it. david: the idea is if you are making a lot of stuff, you've got to ship it places. so you should see transportation stocks moving along. tom: they confirm the good news. david: exactly. some variation on that theme that rich bernstein was highlighting the other day in his latest research note is looking at what he called earthbound logistics companies on the one hand, and star trek like ventures into space on the other. there's been so much excitement around companies like virgin galactic or whoever. and on the other hand, if you look at these airfreight companies, think fedex, ups, they are moving a lot of stuff. as a result, they are actually doing better over the year or so
than the s&p 500, whereas you look at what is going on with these space stocks, they haven't been able to keep up with the index. tom: is amazon an airfreight company? david: it is to the extent that it is handling its own business. that is a piece of amazon÷bq: this point. how much they are doing for other companies, and can you really buy their service independently, that becomes the issue. no doubt they are a competitor to fedex and ups come but a lot of that is their own business, just being able to move goods around. so what you've got in the end is a group that, no matter how you look at it, the traditional kinds of transportation companies are doing really well. yesterday was all about avis budget and bringing the dow transports down in line with the dow industrials. lisa: hold on, you can't make the avis story about something fundamental when they basically mentioned the word electric and their shares shot up. that seems to be all you have to
do. i'm looking at electric cars, and you get an incredible rally. is there something more here? david: maybe not as far as that goes, but this stock has been rising for a while, and it wasn't just about electric vehicles. if you go out and try to rent a car at the airport, it is a lot more expensive than it was pre-pandemic. so the auto rental companies are the beneficiaries of that and have certainly played out that way with avis budget. lisa: how much is this priced to perfection at a time when we see inflation in consumer prices, when we start to see the hint of consumer pushback in areas that are getting more expensive? at what point have we baked in estimates for the future that cannot continue without more material wage growth? david: that becomes a question for the broader market. in terms of the transports, i am having visions of all of these container ships that can't even dock, let alone have their goods move wherever they need to go. so you would figure that the
demand we are seeing is going to last for a while, but the question you raise really hangs over not only transportation, but also the broader market. tom: this goes to your point, the way you are driving around manhattan. jonathan: you know what i would like? i want a subscription service to a car company. one brand or a collection of brands, where i can pay a monthly subscription. they drive themselves, arrive at the door, and go away. maybe avis can make it. it is a bet on the future that maybe avis gets their first. lisa: do you really think so? jonathan: i don't know. i think about five people cover the company, don't think? tom: david, you have seen this before. you have run our equity coverage for decades. the bottom line is there's always a silly season. how do silly seasons end? david: not well because people take a step back and say what kind of a business is there really here.
they have gone through it already to some extent with autonomous vehicles. tom: they worked out. david: i mean, we are not really there yet. people kind of got ahead of the business in terms of the shares. tom: can i editorialize? i was at heathrow and i got in one of these gorgeous electric cars like the one you drive. years isn't black, but it is fine. i was thunderstruck how nice the car was. i was just blown away at the way it went down the road. jonathan: do you have to ask for permission to editorialize? jonathan: this is our cop-26 -- tom: this is our cop-26 we are doing right now. the bottom line is london is so far ahead with electric vehicles. jonathan: why were we talking about space earlier? tom: space has underperformed fedex. jonathan: ok. abe wilson, thank you. i watched "dune" over the weekend.
tom: what was it like? jonathan: i have this thing watching movies where i don't learn anybody's character names, so i have no idea. tom: i had trouble with it. did you like it? jonathan: it was a long introduction to the second part was my experience of that movie. that was it. v(xuit's like part one before pt two. lisa: is this our space coverage? jonathan: this is it. i just ottowa -- thought i would mention it. i went to the movie theater. tom: i had to watch for the 14th time "pitch perfect 2." it was great. we know all the words. jonathan: fed decision day, believe it or not. your equity market is down three on the s&p. lisa upset about the move on avis yesterday. lisa: 108% because they said they might add electric vehicles. jonathan: i am not here to explain it. tom: the way you parked that electric -- jonathan: i would up to just
>> i think the narrative on inflation is a little bit confused. >> i think the markets are overly alarmed about inflation. >> i think central banks are always behind markets. >> a lot of economists see that growth and inflation slows pretty heavily. >> what we have to figure out next is what normalization looks like. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. on radio, on television come across this nation, we will look away from the politics in this hour. david westin will f