tv Bloomberg Surveillance Bloomberg February 1, 2022 8:00am-9:00am EST
>> the problem was inflation is that it is systemic in ways that is very difficult to fight. >> the yield curve is telling us the amount of space the fed has to maneuver is relatively limited. >> given the fed's positioning right now, it certainly raises the risk we could see the fed frontload rate hikes. >> they have to address this inflation problem. >> hopefully the fed does navigate this well and does not over tighten into a slowing economy. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone.
on radio, on television, earnings season upon us, and a lot of other news as well. looking at the acclaimed function, the earnings pour out. it is corporate america adapting to the cards they were given. jonathan: last year wasn't about the fed. it was about corporate earnings. it was about resilient margins and companies that adapted. the start of this year has been about the federal reserve adjusting at a big way in some point -- adjusting in a big way at some point. who of ubs writing -- luke kawa of ubs writing, it is a growth scare. things are moving very quickly. tom: that is a real gdp analysis. let's forget about the inflation story. let's frame it.
jonathan: consensus at the moment, the median estimate up at 3.8%. does that come in as the year progresses. does the federal reserve into a weaker economy, an economy that is decelerating through the year ahead? tom: lisa abramowicz, you featured that this morning, the staggering idea of the fed into march. 50 basis points, is that drifting away? kailey: people are really questioning -- lisa: people are really questioning the likelihood -- the likelihood of a 50 basis point hike. what economic data point are they going to cling to in their data dependency? is it the jobs market, or inflation front and center, or are they going to look at earnings like exxon and say they did amazingly in terms of
profitability, but the cost cutting is a markable -- is remarkable? tom: this is where we stop the show right now. we've got alisa living to give us great -- alisa levine to give us great perspective on this. cost cutting come of that is the message i here today. lisa: how much do you reduce the headcount at a time when each individual employee is going up? how do you see that being a theme as we start to see wage inflation, which is arguably a good thing, and yet the participation rate remaining stubbornly slow? tom: look at ups. what a bang up earnings. i'm going to suggest ups turned the market around. jonathan: the numbers from them look good. at&t have their and struggles. lisa nailed it. how sticky is the wage inflation for 2022? if it is, can corporations keep up with it? if they can't, we've got a problem because rents are going in one direction at the moment. even if the supply chain kinks work themselves out, we work
through them, and things get better on that front, you've still got this push higher in rents that could keep things elevated. this could persist. it could come down from 7%, the headline number at the moment. yes, it can decelerate. but it can persist above target for longer than people realize if rents remain elevated and the keep kicking higher in the way they have. tom: shout out to bloomberg economics, adding up the rent story. i am going to mention green on the screen. nasdaq 100 up fractionally, better than it was two hours ago. jonathan: she's already put it out there on twitter. futures down 0.1% on the s&p. we are negative about three points on the nasdaq 100. up 30 points. we had a dreadful month on the nasdaq 100, down 8.5%, but it could have been so much worse.
tom: that was a nice finish there. mike wilson goes the other way at morgan stanley. jonathan: the whole team, forward guidance is gone. we've got hikes, course of three -- calls for three, calls for seven. let's be clear, they don't know. you hear from the hawks, maybe we go at 50 if we need to. i don't know if we will need to. we will find out in march. it can become whatever they wanted to become. we just don't know. that is going to be a key feature of this year. for some people, that is a bug. tom: alicia levine with us of bny mellon wealth management. what do you see in the corporate space that will inform the fed of the tough decisions they have to make? alicia: the interesting thing
about earnings season so far is that with all the concerns about margins, margins have held up very well in the face of costs going higher, so that is an important thing because that is what the markets post on -- the markets focus on. what will earnings be? can we project earnings with inflation this high? the answer so far is yes. i think that is why you have seen some stabilization in the markets because the fundamentals are actually coming in better than feared two and three weeks ago. corporate america is telling you it is still ok. that is what is stabilizing here. let's paint an interesting scenario.
having 120 dollars oil destabilize markets. what if the west says we are not going to bring ukraine into nato , putting gets what he wants without blood and treasure being wasted, and oil all of a sudden has a different kind of price? if that is the case, the big shock worry to the market is over, and i think that is a realistic scenario. jonathan: some of these style calls, buy profitable tech, health care, financials. where is the energy piece in all of this? alicia: we like energy here. we just thing there has been a huge price shift upward so far, and with the calls in the market for $120 to $150 oil price, given the scenario, it may not happen, and we may be close to highs. there is still upward pressure on oil prices here, but i think
many, much of the move is already done. we like energy. but if we are talking about adding new capital today, i would not add new capital today simply because the movie is over, and the expectations for world war iii and europe are probably not going to happen. lisa: the scenario you arbitrating is not that optimistic, the idea that we will have -- you are predicting is not optimistic, the idea that we will have will prices come back down and the margin remaining intact even as you see wage inflation really raging. i wonder how much cost cutting, how much this indicates a later cycle type of stage rather than a resurgent economy. alicia: we do think we are midcycle here, and this is dancing on the head of a pin for the fed. it is a dynamic economy. it is not linear. these are not linear decisions but i think the yield curve has
told of a lot in the last few weeks, which is as rate expectations go higher for the fed funds rate and the two-year moves higher, the tenure softens -- the 10 year softens. if the fed moved 50 basis points in march, which is not our base case scenario, you don't have to destabilize rates pricing in the market. that is the lasting the fed needs to do right now because it limits their hands on the out meetings. we do think you will get fed hikes march, may, and june, and then the fed will have to reassess where we are in the real economy. i think the fed's issue here is not so much slowing the economy. it is frying in oil. it cannot do any thing about the supply chain. can do something about demand. that is its job right now, to soften the inflation picture. if it fails at the mandate, that is not going to be good for the institution. jonathan: just quickly, where
does that leave the banks trade? alicia: we like financials. we prefer the insurance companies because the insurance companies will do very well. financials have moved strongly. we have seen some of the pricing issues. think this is the year to be selective. i thing it is very difficult to play the sectors. have to play cash flow, you have to play earnings. i think the year of buying an index or a sector call is going to be very difficult. you have to buy individual companies with dividends, cash flow, and earnings power. yes, we are still bullish, and we think the fed cannot go seven times this year. it is just at the yield curve is telling them that. jonathan: alicia levine of bny mellon, thank you. you got to catch up with ethan harris at bank of america soon. that is one heck of a call from that team. tom: we will do that with respect. it is so hard to do what our guests are doing, which is gaming the unknowable.
we will check with that. i love bill dudley word magnitude, the magnitude. this is a really important guitar -- a really important economic word. the magnitude of the calls is stunning. jonathan: i learned a lot from steve major of hsbc, and one thing he said with me that -- he said that has stuck with me forever, he said a forecast by definition cannot be wrong because it is a forecast. so when even hear comes on a bank of america, of course it deserves respect. no one here has got a crystal ball on the path ahead. tom: what i learned from steve major is that west ham can make trades when it matters, unlike the tots. jonathan: that is right. we will talk about this federal reserve with patrick harker, the philadelphia fed president, at 8:30 eastern. mike mckee dropping by to help lead that conversation. looking forward to it. from new york, this is bloomberg. ritika: with the first word news, i'm ritika gupta.
there is a flurry of diplomatic activity today as western countries try to keep russia from invading ukraine. u.s. secretary of state antony blinged and will speak by phone with his russian counterpart. bird's prime minister boris johnson and dutch prime minister mark rudin -- british prime minister boris johnson and dutch prime minister mark rudin will meet with president putin. kim jong-un has now got his way onto president biden's policy agenda. in january, north korea's leader conducted more muscle tests then in all of last year, a signal that kim is preparing to fire a long-range missile that can reach across the u.s. north korea wants the u.s. to lift sanctions, while the u.s. wants an end to north korea's new clear program. federal reserve officials are showing little stomach for an aggressive 50 basis point interest rate hike next month. they say they want to avoid unnecessarily disrupting the u.s. economy. four of them they remarks
monday. kansas city fed president esther george said, "you always want to go gradually in this economy." exxon mobil posted the highest growth in years. exxon shares are up more than 20% this year after an almost 15% gain in 2021. blackstone and carlisle are in talks about teaming up for what could be one of the biggest buyout deals ever. bloomberg has learned the private equity firms are considering a bid for the generics unit at swiss drugmaker novartis. it could be valued at around $25 billion. 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. ♪ i'm ritika gupta. this is bloomberg. ♪
♪ >> he is not de-escalating. at one point he claimed he was de-escalating, that they were moving for his back. that is not the case. that is not what we are seeing. for that reason, we have that decision that the u.s. wants to keep those forces on alert, and that is something we can do for quite some time. those troops will be ready should we need them to defend nato territory. jonathan: julianne smith, the u.s. nato ambassador. good morning. counting you down to an important conversation with president harker of the philadelphia federal reserve. the equity market up 45 on the nasdaq, 0.3%. on the s&p, barely positive after a negative month last month, which by this point, you
know all about. yields in on tens to 1.7483%. payrolls friday, the median estimate is for 150,000. we just heard from the labor secretary on ms nbc, setting us up for a soft print. omicron expect it to impact january job numbers. that is brian deese. let's be clear. do they matter this friday, given that some of the banks with the biggest fed rate hike calls for this year are also in the negative camp? nomura, -50,000 for this friday. bank of america at -150 thousand this friday. they think we can get seven hikes this year. tom: i take your point that it doesn't matter like it did the last time around or maybe the next time around, but the wage inflation component along with the jolt survey, do we get jolts today?
lisa: yes. tom: she's ready to go. jonathan: what is the number, lisa? lisa: it is expected to come down a bit. i was looking at the indeed.com numbers. the number is 10.3 million job openings, down from nearly 11, so how much is this a blip, and how much does this point to the tightness in the labor market? tom: we are taking notes. jonathan: is it a tight labor market or a strong labor market? lisa: a lot of people are saying it is a tightly remarket, but not a strong labor market because of the lack of participation. if you take a look at the fact that there are 1.55 jobs per each unemployed individual in this nation, gives you a sense of what tightness actually means. jonathan: payrolls just around the corner. tom: i am taking notes from lisa. that's the only way i figure out what is going on. when we want to know what is going on in washington, one of our most popular guests, henrietta treyz, joins us,,
policy director at veda partners. just truly knowledgeable about capitol hill. i want to go to the old days where the senate foreign relations committee was a big deal. it is now menendez of new jersey, marco rubio of florida, and others. are they like the senate foreign relations committee that we used to know? henrietta: i think when it comes to sanctions and russia, there's a lot of similarities. if you ask them, they would say this is history repeating. they are going in a very bipartisan way which you could probably not say about any other committee right now. i think they have a similar objective here, which is speed. tom: what about defense and pentagon? there were a bunch of southern senators being sure the boats were built down south. at least, that was the stereotype. what is its efficacy? henrietta: funny you mention
that. home styles talking about where you are building your ships, where your domestic outlets are to get support for the defense bills. on that piece you have a bit of the differential in terms of democrats and republicans take to spend slightly different sums of money in annual appropriations bills. that is tied up right now and probably will be for the next two weeks. i think we probably see a short-term government spending bill that splits domestic spending and defense spending equally in order to get 60 votes out of the senate and that committee. those talks are much more down to the sanctions piece right now, i would say, so maybe a near-term phenomenon as opposed to the old-school guys who used to work closely together. lisa: it seems like the senate is going to pass these sanctions against russia as a result of the ukrainian conflict. do you have any sense of the economic read through if you start to game out what it means for oil prices, what it means for international trade, and in
terms of the alliance between europe and the u.s.? henrietta: it is interesting you start with the relationship in terms of trade. we have talked for how many years now about the export control restrictions the u.s. was prepared to put on china, also in a bipartisan fashion come against emerging technologies. those are all components the administration seized on immediately to challenge president putin, and those are pieces that i think they are going to continue to build off of. you had the u.n. nato ambassador speaking a few days ago on your program, talking about how this has really driven nato together, and they are working on things that a couple of months back, might have been very unrealistic to see some bipartisan work here , or international work together on this. so that is i think the trajectory they are seeing for sanctions right now. when it comes to the economic feedback, one of the things the
biden administration is doing, there's going to be feedback with the big banks, with u.s. institutions, obviously with germany and the rest of the eu as they try to target russia in different ways. i do think that one of the pieces that is most interesting is that everyone is working in conjunction together, and the sanctions are something that i think the senators have had on the back of their mind since 2016. so everyone is very prepared for the anatole -- for the economic toll. jonathan: let's catch up soon, henrietta treyz of veda partners. just seeing a headline from "defining times -- from "the financial times." aston martin, only electric cars by 20 when he six. -- by 2026. the end of combustion engine only cars by 2026.
for the sports car, it is a move towards electric. that is the direction of travel. lisa: this morning's news role has been fascinating with respect to the energy transition. you've got the aston martin news. on the other, exxonmobil is boosting spending on new oil wells by as much as 45%, so would reinvesting in some of the same fossil fuels simply because the demand is there, and the issue is been a lack of ability to produce. so this real tension here between the transformation on the green side and the reality of today. jonathan: as they try to be a little more disciplined on the oil side of things. with crude at $88, the temptation is great. coming up, conversation you do not want to miss. patrick harker comedy philadelphia fed president, will be joining us on -- patrick harker, the philadelphia fed president, will be joining us on bloomberg.
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jonathan: live from new york city for our audience worldwide, this is "bloomberg surveillance" with tom keene, lisa abramowicz, jonathan ferro. your ism data later. equity futures positive. on the s&p, up almost a 10th. tom: a nice list after the ups shock of buoyant earnings. that is where the ship was this morning. this is something we take rate pride in. the leadership of michael mckee. the worst questioner of jerome powell we know. they are not just fed president or fed governors but they are real people. patrick harker is extraordinary and a voice for technology at the fed. he is definitive in operations research.
he holds the youngest endowed professorship at wharton in their history, and when the fed needs to understand technology productivity, this is the guy they turned to? michael: let's turn to patrick harker ourselves. along with everything else you're a voting member as an alternate for the vacant boston president at this time. tom does have to pay attention to what you have to say. pres. harker: i don't agree with him on the question for jay powell. michael: now i can take it out on you. [laughter] mary daly very firm we are not behind the curve. do you agree? pres. harker: there is risk on both sides. it is worth a step back to say why we have inflation running the way it is running? supply and demand. demand is something we can influence.
the supply constraints on people and goods less so. in fact very little. does good things are happening at the same time. the question is how quickly are the supply chain constraints going to leave us? it looks right now they're going to take some time. slowing down demand is what monetary policy does. i think it is appropriate. i do not think we are behind the curve in that sense because we did not affect a big part of why there is inflation. that said, i think we need to move now or try to control inflation. that is something i firmly believe. michael: move now but how often and how fast? you know the questions. the 50 basis points in march, the seven rate increases proposed by bank of america. where you come down on that? pres. harker: we will stop the
tapering in march. i would be supportive of a 25 basis point increase in march. good we do 50? should we? i am listed as of that was the how the data turnout. when we are sufficiently away from zero. we can argue what above zero is. then we start normalizing the balance sheet, start bringing the balance sheet down, which will also reduce accommodation. it is a two step process. we want to increase the fed funds rate. at the same time, we want to start removing price shrinking the balance sheet. both things have to happen in tandem. jonathan: let's step into march and build on your conversations on the balance sheet. on march, tell me the data you are looking at, the data that will shape that decision.
some influence payrolls payrolls acquit with some -- haywood process that information given the omicron stair and the data you would be looking at into the march call? pres. harker: i heard some comment earlier from some of your colleagues or people who tweeted about maximum employment. i think we are there. really this is an inflation story. what we are looking at the science of precursors to inflation like the supply chain issues are starting to mitigate. i do not see that -- if i do not see that i would be for more aggressive policy. right now i think 425 basis point increases is appropriate, but there is a lot of risk. there is a risk to the upside of inflation that is worse than i would anticipate, but there is also risk that inflation will start to ease faster than we have anticipated. i think that is a lesser rest and a good risk to have.
this is where i need to keep flexible in respect of policy. we have to look the data and at least some of them somewhat fairly. jonathan: you need to see deceleration into march? is persistence they worry? pres. harker: persistence would continue to worry me. that is why need to see some signs, whether it is inflation itself or precursor to inflation we starting to see through it using of the pricing stone. lisa: what would you be looking for to possibly go 50 basis points? you said should we, that is not clear, could we, absolutely. what kind of inflation rate? pres. harker: i think we are looking at a fairly significant spike from where we are now. if inflation stairs where it is now, i do not see for people
basis point increase. if we see a spike we would have to proceed more aggressively. lisa: are you concerned about a hard landing being dismissed as unlikely and the confidence they can engineer this? pres. harker: is always a risk. we actually can do this if we really listen to the data and act appropriately. my first step in acting appropriately is stop the balance sheet purchases and let's start raising rates by 25 basis points. michael: you adopted a new framework which made you stay dependent in terms of interest rates. is that out the window? are we back to forecast dependents its policy works with a lag. in this case, if you look at our
dual mandate, we are there. this is one of my pet peeves. we will probably have a bad jobs report through the end of this week. just because of omicron. simply because of omicron. that said, and the media will say the economy only created x number of jobs. now the economy is great millions of jobs, we cannot fill them. it is supply constraint. respect to employment and inflation we are there at our dual mandate and that is why we need to act. michael: let me ask you the question i asked chairman powell. what is your goal in terms of the inflation rate. it was understood you were trying to average 2% over time, but he told me you're not trying to go below 2%, which she would have to do to get an average. pres. harker: at some point we
will go below 2%, but we do not have to rush it. if we can get it in the ballpark, that is good enough. the measurements are still destined -- are significant when if it is below 2%, 1.5% is not a problem. jonathan: we do not have much clarity and some banks on wall street are putting us in big numbers. matt luzetti talking about it. how is the balance sheet conversation influence that decision? is it separate your rate hike call? how does it fit in? pres. harker: that is a good question. in my mind we have to reassert the fed funds rate is the primary tool of monetary policy, recognizing the balance sheet answer removes accommodation. i would like to get the fed
funds rate up and start a process of normalization that is like watching paint dry -- that reduction will be faster and steeper than the last time you tried it. -- we put that in process, we start reducing the size of the balance sheet and use the fed funds as the tool we need to adjust if we need to adjust. no question about that. michael: do you think you will need to sell assets to get the balance sheet down, bridget lee on the mortgage side since the fed says it wants to hold primarily treasuries and you will be stuck with mortgages for 30 years if you do not. pres. harker: this is something we are actively looking at. no decisions have been made on the balance sheet question. we will take our time to think about it and bottle it.
could we sell assets? possibly. right now i would not commit any of that can try see the analysis. jonathan: do you have a number in mind when you think about bouncy production on a monthly basis? can you give us insight into your thinking about this? pres. harker: not yet. at that we have to let that play out. what matters to be more that we are committed to doing get. we are committed to doing this for the long run. it will take some time to get balance sheets back to whatever normal is. i cannot put a precise number on it. what matters now is i am committed to making sure we start the process later this year or early in 2023 and let it run to get back to normal. jonathan: this is a real-time conversation.
you're looking for tons of flexibility. are you satisfied with how the market is discounting some of the communication out of the central bank right now? pres. harker: the market will interpret what we say how they want to interpret it. i think we can be as clear as we can be, at least i'm trying to be as clear as i can be where i think powell should give and it is important market participants are seeing the same data we are seeing. we are not seeing anything different. it is all a question of interpretation. that we can disagree on. at this point we need to let the data play out. jonathan: president harker of the philadelphia fed. thank you for being with us alongside michael mckee, tom keene, lisa abramowicz, and jon ferro. let's start right here. march in the conversation further down the road. michael: i do not think there's any question the fed will be raising interest rates in march,
and it does look like the comments, they will go 25. 50 basis points is out the window and less you get a shocking news. president -- president harker said he anticipates a bad jobs report. we will see when we get the cpi later this month. it looks like we start with 25 and they keep looking around to see what is happening with the economy. jonathan: that is important one for me this friday. it looks like you can ignore the payrolls report this friday, it will not change the minds on the people on this bed. tom: i think what was important from the gentleman of operations research is in a phrase like watching paint dry, that is an important comment. -- some paint may take 72 hours to drive, this may take 70 two quarters. jonathan: years and years.
can you allow a central bank to come down at some speed and compare that to paint drying? lisa: they will try. i am not sure everyone will buy it in terms of the ramifications. the most interesting thing he talked about was this is not a job striven federal reserve. this is a tight labor market. if we get a disappointing report on friday it will be because they're not enough people to fill all those job openings. jonathan: setting us up to enjoy payrolls friday. take a long weekend. michael mckee alongside tom keene, lisa abramowicz, and jonathan ferro. from new york as we kick up a brand-new month, good morning to you all. this is bloomberg. ♪
labor challenges. we have to fight for talent. we are making investment. our mindset is that is the new normal. that is the new normal for the near term in the medium-term. tom: adrian mitchell has seen the resurrection of macy's, doing real -- doing way better than they have over the last two months. bloomberg's chief future officer program notes at bloomberg.com and youtube. this is a joy. sebastian male eclectic to say the least. you know with work on mr. greenspan and the hedge fund industry. now he has tackled in a must-read book, if you're part of global wall street and you feel is a new right as i do. then you must addressed sebastian mallaby.
you cannot miss this on amazon in your local bookstore, on venture capital and the making about new future. congratulations again for providing clarity on something mysterious. you started this project, what was the biggest mystery of the strange phase venture capital? sebastian: the big question is how do you begin to allocate capital when you're dealing with startups. there are no guidelines. you cannot discount the future cash flow because there is no cash flow. you cannot do book to value. all you have his two leggett mammals walking into your office with a dream. the sheer lack of guidepost, that is what drew me to the subject. tom: what i filing fascinating -- what i find fascinating is from the beginning and you cover all of it and the stereotypes we hold the seven day and is
venture capital then even remotely the same as now as representative by softbank? sebastian: softbank is a special case. he has such a willingness to take crazy risks. he blew himself up in the nasdaq collapse but the same time he has just taken that position in alibaba which went from $20 million in 2000 to $58 billion 14 years later. he is a case unto himself. maybe the question is tiger global. that kind of growth equity investing, which did not exist 15 years ago, has now become front and center and that is a new departure for venture capital. lisa: it seems like a lot of money has been flooding into venture capital with the promise
that even though a lot of investments are done, there will be shining stars torpedoed to the top. is it different to find those? is it harder to find those at a time when the behemoths of the world and the facebooks are buying up to many startups -- sebastian: one of the cool things about the spaces when you're doing the really heavy stuff in writing a check for $5 billion or $10 million, you will not get the big growth players involved in that. it does not move the needle for them. if you're during the early-stage staff, we have a timeline in your mind of five to seven years before your exit. whether the stock market is up or down or sideways, who the president might be, it does not matter. you will get it wrong most of the time.
you have one or two bedside of 10 will be exponentially right and that will make up your portfolio. lisa: a lot of people are talking about the productivity gap in the united states. basically we are not seeing a huge productivity boom and they feel this could change if there is some massive technological shift. based on your conversation with venture capitalists, and using a possibility percolating right now? sebastian: i think the stuff about productivity being down is partially a measurement issue. when goods are priced at zero, it does not show up in the productivity numbers. i think if you turn the question around and say i'm much do you think your life has changed in the last 20 years, how do you collect information, how do you think, all of these things are fundamentally different. i have a hard time swallowing this idea there has been no
invasion to speak of in the last decades. i think there has been. jonathan: at the end of the book you have josh lerner talking about a boulevard of broken dreams. it was a small group of people associated with san francisco and stanford and have expanded out to where we want retail come individuals, and others to take part in venture capital. i do not understand how the little guy takes advantage of the power. how do they? sebastian: i think they do not. one of the troubling things about the private investing world is it is a game for people who are hands-on, they are on the board of the company, they are super involved, they understand what the company is making. they have -- this hands-on private investment is key to the programs, an economy where you
have a lot of intangible capital. we used to have capital goods you could drop on your foot, now it is services. it is knowledge, it is software, it is intangible. we need the venture capital tom: . 10 more questions, we do not have enough time. the book is the power law: venture capital, the making of the new future. there is a lot of notes. it is not that intimidating. on radio it is thicker than normal. all i can say is this will be the definitive wall street read this summer. it addresses not only the biography and history of venture capital. lisa: is telling at a time where people are looking at venture capital to give you uncorrelated returns from a market -- i to go back to that patrick harker interview, the idea that the labor market is not the
consideration. it is incredibly strong. it is the inflationary read that is setting us up to ignore week we get on friday in terms of the job print for january. tom: i think any surprise on wages will adjust that. inflation, dr. harker would suggest it is about goods inflation. lisa, look at the tape with the green on the screen. i want to do a correction. not a correction, clarification on a simple matter i wrote this morning. on at&t, their cash dividend was 15 billion large. it was modeled at at 9 million and they surprise today with an $8 billion statistic. it takes the stop down 6% this morning. we thank at&t for their comments this morning.
"the countdown to the open" starts right now. >> everything you need to get set for the start of u.s. trading. this is "bloomberg: the open" with jonathan ferro. ♪ jonathan: from new york city, we begin with the big issue. closing the books on a message january. >> completely exhausted. >> volatility to start the year. >> this start intraday volatility. >> opportunities to reset portfolios. >> what are the underlying story lines the turning point. >> all options on the table. >> we had three hikes, now we are closer to five. >> bank of america