we have a hold on jp morgan. lisa: you are looking for more lending so what type of lending do you expect to see growing, consumer or corporate? >> it's going to be more of the consumer going forward for the first quarter of this year. what i'd like to see in the fourth quarter is low balances and other consumer personal loans to get back to normal levels. the personal savings rate which was at 18% is back down to a normalized rate of 7%. with the holidays extending, the cart loans will be the first indicator. tom: the total return of jp morgan is 15.3%. they struggled over the past two decades, only up 8.3 percent per year and in the last 30 years, jp morgan has delivered 15.7% per year. i am fascinated by this. his jamie dimon and the rest of them working within it double digit or single digit framework? >> they have been double digits and when you look at most metrics over 10 or 15 years, jp morgan will rank at the top stop during the low rates of the last five years, jp morgan was the only one to show positiv

cheryl: that is certainly the question with jp morgan. we saw gutting up $6 billion on nii and spending more than $7 billion year-over-year on an expense basis. does that play out in the long term? will that be enough to gain share across the board in all businesses as they highlighted, but also a more competitive environment in many areas, in cars, against fintech's, for example? i think jp morgan is very disciplined and does a good job of managing, but the question is the long-term game versus short-term valuation and growth trajectory. will those investments be coming to for ration? caroline: as a portfolio manager looking to put money to work and assess the financial strategies you have, is it where it will outperform in 2022 and we have seen such outperformance with the financials in the bigger banks where the yield curve goes? where do you start to look now? cheryl: i think we are more positive due to the regional banks and community banks. it turns the spread based lending tied -- dynamic. when we think about the large money center

bank earnings kickoff with jp morgan, citigroup, wells fargo. jp morgan down 6% right now. we will talk with david konrad. this is bloomberg. ♪ jon: this is bloomberg markets. i'm jon erlichman. along with matt miller. the big story we've been tracking, the wall street performance, our stock of the hour. taking a look at what is happening with jp morgan, wells fargo, citigroup. kriti gupta is joining us now. in some cases, these names are lower. kriti: going into earnings, they had some pretty high expectations. not only massive loan growth, but the rate hikes would boost stock and their bottom line. top of that, trading revenue in the fourth quarter, where we saw the volatility spike, the opposite of what we heard. let me run through some of the highlights. jp morgan, not great when it comes to the expense management. they missed of the estimates, but revenue was up 28%. wells fargo beating expectations but they say their lending growth will accelerate next year. citigroup having an investment banking surprise. at the end of the day, not putting up those profits that the

, jp morgan down 3%. tom: james dimon is going to listen to the computer scientists from the university of dayton. here is a name you don't know. lori beer is maybe the most important pair -- important person at fortress dimon. they go to a $12 billion spend forward from $11 billion. they are spending way above where they were in 2019, and that outlook is there five-year manifesto forward on technology. jonathan: that has been the story of the last several years. don't you think the story for the moment, the fresh input is compensation? tom: absolutely. there's no question. this is not about fancy investment bankers living in 6000 square feet in tribeca like you. this is about -- it is hard to say that with a straight face, folks. jonathan: people are going to be searching for me on the wrong side of canal street. carry on. tom: i think you are dead on about compensation. it is fascinating, particularly for the wealth managers. what is so important about what ken leon said is citigroup wants to be like ub

jp morgan and yesterday, goldman sachs. huge gains going into this year, at the beginning of this year. people take a look at these expenses and they say wait a second, revenues are growing as quickly and wait a second to your question earlier, the staying power is the beginning of an opening salvo of wage increases. the concern here is that people are seeing huge market shortage of housing and have not been able to build in certain areas. we are expecting permits to come down as a result of some of these southern states. 4:00 p.m., president biden is planning his first congress of the year, only the second since he took office. i'm very curious how he deals with oil prices. we were just talking about that. the idea that you are dealing with oil prices at the highest level since 2014, possibly heading to $100 per barrel. jonathan: some feisty q&a, maybe. thank you very much. back to 2016, just about to take a visit to a negative yield on the german 10 year. at that time i ask a young man whether he liked europe and he repli

it is not have to represent starbucks or arial or jp morgan. there is truth with a capital t and there is truth of a small t. david: this country is divided between the left and the right. the government is not functional in many ways. are you optimistic about the country's future or do you think we are headed to a dark path? mellody: i'm worried about polarization and i think we have to work harder to be more willing to listen to other points of view. i think that warren buffett view -- if you are born in america, you have won the lottery. i think america's promise remains a very great because we have had a certain spirit in this country. i think it is in our dna. if we can realize our best selves, which is what america was founded on -- inclusion in terms of religion and walks of life, the melting pot, if we can realize that, our opportunities are endless. the question is will be allow ourselves to realize that. david: some people would say you are on a lot of corporate boards and nonprofits, you have married a wealthy famous person named geo

i'm contributing to organizations like ariel jp morgan. david: if somebody says i want to bundle the optimism and enthusiasm for life that you have, what do you think is the key to being so optimistic and energetic? mellody: gratitude. when you have the life i have had, every day feels like a blessing, beyond anything i have ever expected. if that is the way that -- if you look at the world, it ends up being a much better life. i told people at ariel my worst day is still awesome. i have had some bad days but in the context of what i know that can be really bad, worrying about where you are going to sleep or eat, nothing. it gives me empathy for people who have those struggles. because i never forgot, i'm always grateful and because i'm grateful, i think i am supposed to work hard and do better. i'm supposed to be optimistic because the contrary is -- it just doesn't seem right given the opportunity i have had. what to i have to complete about? it doesn't mean i don't have moments of complaint, but in the context of my life, i have perspec

it is not have to represent starbucks or arial or jp morgan. but i think i am allowed to say what i think. at arial i talk about truth. there is truth with a capital t and there is truth with a small t. david: this country is divided between the left and the right. the government is not functional in many ways. are you optimistic about the country's future or do you think we are headed to a dark path? mellody: i'm worried about polarization and i think we have to work harder to be more willing to listen to other points of view. at the same time i take the warren buffett view. if you are born in america, you have won the lottery. i think america's promise remains very, very great because we have had a certain spirit in this country. but i think it is in our dna. and if we can realize our best selves, which is what america was founded on -- inclusion in terms of religion and all walks of life, the melting pot, if we can realize that, our opportunities are endless. the question is will be allow ourselves to realize that? ♪ david: some people wou

tom: that is karen ward with jp morgan. coming up, could china's central bank have some wiggle room? we will discuss that next. this is bloomberg. ♪ tom: happy wednesday and welcome back to the open. we are 15 minutes into european trading day. gains of 5% across-the-board. every index is solidly in the green after the performance from wall street. asia is doing well as well. every sector apart from health care is in the green this morning. inflation in china. it is rising at a faster -- slower pace last month compared to november. that is according to the pboc. there is some space to recover from that. still with us is karen ward with jp morgan. what do you make of the rates in china? karen: the story is the very positive news they have about interest rates. the overall theme is exactly that. last year, china height its myriad of spending. you had china tightening while global markets were using, and we look at this year -- were easing, and we look at this year. coupled with a macro picture which is relatively resilient,

it is not have to represent starbucks or arial or jp morgan. there is truth with a capital t and there is truth of a small t. david: this country is divided between the left and the right. the government is not functional in many ways. are you optimistic about the country's future or do you think we are headed to a dark path? mellody: i'm worried about polarization and i think we have to work harder to be more willing to listen to other points of view. i think that warren buffett view -- if you are born in america, you have won the lottery. i think america's promise remains a very great because we have had a certain spirit in this country. i think it is in our dna. if we can realize our best selves, which is what america was founded on -- inclusion in terms of religion and walks of lives -- walks of life, the melting ought, if we can realize that, our opportunities are endless. the question is will be allow ourselves to realize that. david: some people would say you are on a lot of corporate boards and nonprofits, you have married a wealthy fam

i assume it is jp morgan. alison: i would say jp morgan and goldman sachs. jp morgan is more of the broad winner. if we look at the market share gains of jp morgan over the last five or 10 years, trading has been a big area. cash equities was the one area they did not have a leader but ship -- a leadership position, but they have fixed that. on the repo side, the deposit share they have gained. in part, it is digital, making them more efficient, but increasingly, these banks are on the offense in terms of customer facing technology. we have jp morgan spending $15 billion. they said their costs are going to be 8% to 9% higher this year, and trickling into next year, and that is due to technology investment. goldman sachs also saying technology talents. i think we have to dig -- have to take a step back and look at what that means for the industry. lisa: we are all talking about comp, but the story still is that net interest income is rising, particularly at some of these big lending companies also seeing their loan books expand. have we accurately priced in t

jp morgan. citigroup, wells fargo, we will get you the breaking numbers when they cross, you're watching mornings with maria live on fox business. ♪ ♪ ♪ want seamless and easy. with ibm, you can do both. your company can monitor threats across your clouds, address all those regulations, and still create all new experiences. trustworthy ai powered security. that's why so many businesses work with ibm. it's time for our lowest prices of the season on the sleep number 360 smart bed. what if i sleep hot? ...or cold? no problem, the sleep number 360 smart bed is temperature balancing so you both sleep just right. and it senses your movements and automatically adjusts to keep you both effortlessly comfortable. so, you can really promise better sleep? yes! you'll know exactly how well you slept, night after night. we take care of the science. all you have to do is sleep. and now, save $200 on the sleep number 360 c2 smart bed queen, now only $899 plus 0% interest for 36 months and free premium de

on inflation, here's the other thing jp morgan said is worth watching. while the labor costs were definitely a very key aspect of that tension so far, it could lead into other areas, and while jamie dimon has said that many parts of inflation have been transition area, other parts like housing, wages, oil are much more sticky. so how does that play into not just the banks, but also their clients, which will be hesitant to be spending and investing when they have to deal with those costs as well? guy: talk to me about regulation because this is where i am curious, particularly with reference to where we are going here. we have just seen a new fed banking regulator nominated. we've got wells talking about the regulatory environment. that institution has obviously been in the spotlight. how tough is it going to be in a regulatory environment going forward here? sonali: it will be much harder than it has been the last four years or more. think about the headwinds they have. the fact that the big banks have gotten so much bigger, now you have jp morgan invest

i feel that i am better off contributing to organizations like ariel, starbucks, and jp morgan. david: if somebody says i want to bundle the optimism and enthusiasm for life that you have, what is the secret? what do you think is the key to being so optimistic and energetic? mellody: gratitude. when you have had the life i have had, every day feels like a gift, blessing, feels beyond anything i have ever expected. if that is the way that -- if you look at the world, it ends up being a much better life. that does not mean days are not hard. i told people at ariel my worst day is still awesome. i have had some bad days but in the context of what i know that can be really bad, worrying about where you are going to sleep or eat. nothing is that bad, nothing. it gives me empathy for people who have those struggles. because i never forget, i am always grateful and because i'm grateful, i think i am supposed to work hard and do better. i'm supposed to be optimistic because the contrary is -- it just doesn't seem right given the opportunity i have had. what do i have to complain about?

i feel that i am better off contributing to organizations like ariel, starbucks, and jp morgan. david: if somebody says i want to bundle the optimism and enthusiasm for life that you have, what do you think is the key to being so optimistic and energetic? mellody: gratitude. when you have had the life i have had, every day feels like a gift, blessing, feels beyond anything i have ever expected. if that is the way that -- if you look at the world, it ends up being a much better life. that does not mean days are not hard. i told people at ariel my worst day is still awesome. i have had some bad days but in the context of what i know that can be really bad, worrying about where you are going to sleep or eat. nothing is that bad, nothing. it gives me empathy for people who have those struggles. because i never forget, i always am grateful and because i'm grateful, i think i am supposed to work hard and do better. i'm supposed to be optimistic because the contrary is -- it just doesn't seem right given the opportunity i have had. what do i have to complain about? it doesn't mean i do

street was traumatized, by jp morgan, not bank of america. they're talking about holding expenses flat. they're a very digitized bank. these guys, not as digitized like wells fargo and bank of america is highly sensitive to interest rates which means it is in great position for 2022 if the fed raises rates they've have $6.5 billion more and if the fed does nothing the only reason we don't own bank of america for the trust because we like wells fargo. bottom line, the banks are all over the place this earnings season which goes to show you the important of individual stock picking all banks are not created equal and we get big sell-offs where everybody says woe is me. take a look at this business tyler in california. >> caller: hi jame, thank you for the work that you do i want to ask is when do you think would be a good time to buy visa people seem to be itching to go out and spend and some will be here. >> right that is a great question now we own mastercard and for the charitable trust and jeff marks and i said that is cheaper and better an

stanley, goldman sachs, and capital banks citi and jp morgan can differentiate themselves and pick up the slack. although they fell a little bit in lieu with jefferies, but not as much. >> and jefferies had other positive trends, advisory, equities at capital markets. it wasn't all bad. wilf, thank you. we will see you soon we appreciate it >> pleasure. >> ty. >> kelly, here with more on what to expect from the big banks and the impact of rising rates, tom misho, president and ceo of kbw and a number one adviser on bank m&as tom, good to have you. let's pick up where wilf just left off that is on the trend of m&a. do you see it continuing into 2022 not just in the banking area, but more broadly. >> we do we think that m&a is going to be one of the bright spots for investment banking going into % the year so much so that we are forecasting a 100% year over year improvement in jp morgan's m&a revenues tomorrow morning when they report the broader investment banking story we think is going to be one of conflicting trends. we think m&a is going to remain strong remember, too, the role of

in equities more than jp morgan. that absolute number is still higher. a lot of competition in equities revenue. but how is that sustained through the end of the year? you want that fic volatility to remain higher, but it is awkwardly cyclical, unfortunately, for with the banks start to reagan. the -- what the banks start to rake in. guy: you look at the cost story, and i am wondering what the fed is going to think about this when it looks at what is happening in the labor market. the banking sector deals related to the real economy. costs are rising very quickly. they are having to pay for talent. that is eating into margins. is that something that is going to be replicated more widely i think is a question the equity markets have to answer, and i think you look to their earnings picture here. is this something that is going to carry on? looking up the commons from goldman sachs, looking at become it's for jp morgan last week, we are going to pay up for talent. how much longer can they keep doing that? sonali: some

we have identified out here that citigroup is not jp morgan. what is the urgency jane fraser faces to right the ship and move forward? ken: she wants to have a great narrative for the investor day probably in march or get this is cleanup. this is getting out of consumer markets where it is hard to manage those businesses, and they take up a lot of time. you are not going to get rewarded in the stock. so they are streamlining to have a presence outside the u.s. in corporate investment banking and wealth management. this means they will be able to reduce expense. i think that is her big case for the strategy. but it is going to take time to get out of those markets in terms of closing the deals. jane fraser is on the right track. it is just going to take longer than doing just the domestic turnaround. jonathan: i want to bring in sonali as well. we have been talking about where she would exit, where she would stay. is that the expectation this morning? sonali: there was a big reshaping at citigroup in the last year, and the idea that this will co

we just heard part two of my interview with jp morgan chairman and ceo jamie dimon. he spoke about the pandemic's impact on the labor market and the value of doing business face to face. dagen, i was struck by the fact that jamie said for the first time in his life he is seeing huge pressure on wages and competition for talent and people. dagen: especially in a high-skilled industry like banking and financial services. i wanted to hearsay more about the incoming mayor eric adams, well, not incoming, the new mayor in new york city because early days but as one example my chase bank branch is closed because of the vaccine mandate put in place by the previous mayor that's frank and there's no vax or test option, it's vaccine only. they can't open the branch because they don't have enough people who are willing to get vaccinated and i'm sure my branch in my neighborhood is not the only case but it's these kinds of localized extreme mandates and new york city is unusual but this is going to throw a bigger wrench into employment here in particular in new york. dagen: i kno

we saw from goldman and jp morgan. i would have to pay more to keep their best people, and it has an impact on the bottom line. manus: david, thank you very much. no one will be escaping the pain of the wage price spiral. let's start there, sticky wages last only as long as profits remain sticky, according to someone over a standard chartered. how hot will it be for wall street overall this quarter? >> those hot wages will stick around as long as the banks are active on the banking side for trading and whatnot, but to your guests point on loan growth, that's really where the opportunity is in the bank. we own jp morgan and bank of america. we are not long the idea that the pipelines will be full into years. they will be empty into years and that wage pressure will be missing is they will be firing people left and right. dani: so if it is all about the loan growth, does that mean you want to pivot more toward bank of america, more toward lenders who have that greater consumer exposure? >> it's a great question. yes, but

tom: jp morgan says we are there. they are modeling -- lisa:, does that have to do with the omicron pickup? how much does that have to do with the recent slow down versus something more restrained because of the consumer not spending. this is uncertain. tom: bob michele was trashing me to death saying i actually remember paul volcker. lisa: he said he remembered him to. tom: is this the most interesting fed meeting in ages? will: it is fascinating -- lisa: it is fascinating, they have a difficult task ahead of them. tom: we will have wonderful guests with us to get perspective. i'm looking forward to a conversation with priya misra. we will also hear the conversation with jerome powell. all this conversation led by michael mckee. he will be in the press conference. stay with us. bloomberg radio, bloomberg television. good morning. ♪ jonathan: your equity market is bouncing into this one. higher on the s&p by 1.6%. "the countdown to the open" starts right now. >> everything you need to get set for the start of u.s. t

and for jp morgan it was $15 for 21, and 12 for 22. it is not as though it should be a surprise to anyone anywhere. the environment is normalizing a little bit. people are building in a huge degree of normalization, and it is a forward number. it is normalizing, and in terms of cost and pay, it is going the other direction. is this increased pay that has to happen across the sector. >> there two things. i think it is a real phenomenon. all the lower levels. on the other hand. the big dollar chunks, especially for the debit banks, is from senior people. that will be very revenue dependent. the other thing to keep in mind is that 2021 was an extraordinarily good year. nobody was going to pay for next dollar of earnings-per-share for goldman in 2021. there is quite honestly a natural incentive for ceos to sort of push as much incremental spending as you can into this year. i'm not saying that there isn't any cost inflation, but there is also a feeling of having a great year, you know, and let's give ourselves some room next year. just to

jp morgan, analysts are expecting a 16% decline in fixed income trading. but investors need to start getting used to more normalized trading environment. in this quarter, you will have investment baking making up some -- banking making up some losses but not all of them. jp morgan, they are expected to bring in more than $3 billion, but still expected to be slightly less than what they are going to be making at that trading division overall, even with muted expectations on what those numbers could look like. matt: we have seen basically no movement in affects -- in fx, but volatility could come back. are we expecting these kinds of forecasts and the outlooks, are you psyched? sonali: i am because rates could make a comeback and commodities trading, look for what that might look like at citigroup, goldman sachs and who is making money off that business. fixed income is a broad environment. it is not just bonds. as rates start to rise, could it get more interesting in fixed income? when it comes to jp morgan, bank of america, last year, debt underwriting als

i listen to jp morgan, i listen to what other banks have set as well. jamie dimon is talking about investing huge amounts of money in technology. how should i think about valuing these businesses given that appetite that exists to almost turn these institutions from being financial institutions to being quasi-tech companies? walter: last year, the hot item was by now, pay later, and valuing these software companies at 10, 15, 20 times sales, and here you have the banks considered expensive if they trade to 2.5 times -- trade two to 2.5 times book. think the sector has been redefined in terms of value and what we would pay for a given asset. banks have really stayed in that bucket of you can't pay more than 2.5 times book. so i think is that business transitions, you have the potential to see summary rating and some of these areas to pay a little bit more than you would have traditionally for banks. guy: walter, great to catch up. we really appreciate your time today. water todd, greenwood capital cio. we will carry on the conversations around these bank

jp morgan, citigroup and wells fargo reporting tomorrow. analysts are saying the weaker trend in fixed income is a general trend that we will see at these other banks as well. remember the jp morgan copresident last month said that on the trading side they were expecting results and for the quarter to be down about 10%. that included fixed income going down and equities to be about flat. but the saving grace for these banks obviously will be that m&a advisory, saying all last year we hit a $5 trillion worth of deals and the banks are very much expecting overall about 15% hike in the fourth quarter on m&a but about 10% down on the fixed side. manus: the market lived through some of these, so get ready for a pretty stupendous first quarter. they want to kickoff the sale of their retail -- mexican retail banking. what do we know about the interests on this? >> she came out last year and said they're getting rid of 13 retail markets across asia as they focus around wealth hubs. this week they announced the sale of the retail operations in mexic

. >> this is after we have gotten morgan stanley and jp morgan already. we have the payout for david solomon after a banner year at goldman sachs, $35 million, including base pay of $2 million, unchanged from 2020, as well as annual -- >> unchanged? >> that's the base. let's look at the rise in the variable compensation, $33 million, 70% higher, in the form of performance-based stock. >> he is doing ok. >> $35 million for solomon. another executive at morgan stanley got a $35 million package, and jamie dimon. who is going to quibble over $500,000? i mean, is there some coordination. obviously they are not coordinating, but there -- but is there some metric they are all falling into? >> you have to make sure your cvo doesn't leave the bank. at the same time, you see the banks have different metrics in which they say they are judging the ceos on. at morgan stanley and jp morgan, they did fight some of the inclusion and equity across society that the bank has been moving toward, but a lot of it is tied to pure performance, make no mistake. >> james gorman go

hugh gimber, jp morgan asset management, sticking with us. the president is poised. we think we are going to be hearing from him in the next few minutes. we can see the podium. the president speaking shortly. we will bring you his comments live in a few minutes. this is bloomberg. ♪ >> we are seeing a lot of positive signs. we know in 2022 we are still living within the pandemic, so we have work to do as we move forward. you mentioned inflation. the president is focused on bringing inflation down. president's economic policies continue to work. we will continue to move forward in 2022 to make sure we get americans back to work. alix: that was marty walsh, the u.s. labor secretary, speaking to bloomberg in the last hour. we are awaiting jobs were marks from president biden. the u.s. on image rate falling below 4% in december, even though they headline number was a bit disappointing. still with us, hugh gimber of jp morgan asset management. higher yields, tech selloff. that has been the result of these numbers. does this clear the way for a march hike for the fed? hu

at its zenith, jp morgan was trading close to 2.6 times tangible book. what's happened here, valuations are starting to matter when jp morgan comes out and reports a tangible book of $71, people are doing that math and what's the right valuation if you think it's two times, then you have $142 stock but i don't think you have a stock that was trading north of 170 or so. and i think that's what's going on i will mention quickly, that these insurers came within a whisper today of a 52-week high and sold off late. names that are sensitive to higher rates you'll find that in the insurers >> guy, thank you. all right, it has been a very busy tuesday so far. but we have much more to come and here's what's coming up on "fast money" next. >> announcer: game on. some huge moves in the video game space as microsoft nabs activision for more than $68 billion. so is it time to level up on the names? plus, big energy oil hitting a seven-year high. can this trade keep pumping higher much me asmoy"omg or"ft ne cin up [copy machine printing] ♪ ♪ who would've thought p

we need to have the conversation with jp morgan asset management. we have known bob for a long time. typically you goes against the grain. bullish when other people are bearish. he is talking of the cash position. i have not heard bob talk like this for quite a while. tom: i agree. what is great about bob michele is he writes and speaks incredibly clearly. you will ask him questions, shut up, and listen. jonathan: a very different bob michele in the last few months. lisa: we are looking where there is a lack of age. we keep hearing this -- lack of age. we keep hearing this. there is a lack of clarity. you wonder at what point cash becomes a flexible tool or fit is a combination of assets. jonathan: the cio and head of global fixed income it jp morgan asset management. you will remember, a liverpool fan as well. tom: it is the first thing that he will mention. jonathan: in a commercial break that is all he will talk about. tom: he probably wants liverpool to put david ortiz's number up. jonathan: of course, that makes sense. how many liverpool fans d

one stock -- jp morgan, the worst performance in the previous session. they have unexpected expenses, they surprised the markets at a time we are seeing the fastest inflation in the u.s. and decades. jamie dimon saying it is clear that wage and other inflation is in transitory. bloomberg has learned that goldman sachs topped 1% and has received a special payout of millions of dollars in addition to annual bonuses after a year of record earnings. >> when it comes to inflation expectations, we have heard so much fed speak over the last few days and many fed speakers have floated the idea of hiking as early as march and potentially four or five moves throughout the course of the year. bill ackman thinks the fed needs to shock and awe the market. coming out with a 50 base move in march to restore credibility. bill ackman says this would have a reflexive affect to moderate the need for more aggressive and economically painful steps in the future. this aggressive action -- he is not alone in saying this. we heard from a chief economist, henry kaufman saying if

morgan stanley, jp morgan have been encouraging people to come back. other firms have been creating more flexibility. some have even opened offices in new locations like west palm beach and miami, so you are seeing greater flexibility. compensation is always a consideration. alix: let's stay on the return to office. morgan stanley, we have reported, they have been on new york city for a lease with some blackrock offices. we will not be working from home forever, we will need some space. how much of a deal breaker would that be? two years ago, nobody would have blinked an eye. how is that affecting junior talent now? leslie: junior people need to be working with senior people in a collaborative way, frankly. i believe in the in-office experience, i believe it's important. i believe a generation of talent will not develop fully if they don't get back to the office for at least parts of the week. i think there will be more flexibly going forward that in the past. even firms like morgan stanley and jp morgan who are encouraging people to come back, it may

i caught up with -- of jp morgan. i asked, and the ecb sit up the rate hiking cycle from the federal reserve this time around? she does not think so. works alongside michael -- alongside bob michele. i imagine the swiss would love to see it. tom: right now, to advance over the forward exchange discussion amid all of the news flow we have this morning, could -- craig -- kriti gupta. kriti: if you look at the last three or four corrections in the last three years, two of them were spurred by apple hitting those $1 trillion milestones. but what reverses those big corrections? i did some digging, and those buy moments tend to be driven when you start to see a weaker dollar. it really tells you that those foreign investors tend to buy the debt first before domestic investors. this is kind of in to with what you have been hearing, especially in the last quarter of 2021, when you did see that growth taper off a little bit, and a lot of it has to do with the buyers, they simply weren't there. tom: in your weekend reading, wha

>> jp morgan and morgan stanley both. jp morgan has had good years the last couple years. you can expect them to have performed well in the commodities market. look what has happened in the last year quit negative oil prices. you had the european gas and power market. they all should get a nice lift out of it. alyx: it is impressive for goldman because the commodities trading arm was the black swan for them for a few years. it raises a question. are we at peak trading? is this the best we will see in the fourth quarter? >> it could be. the fourth quarter will be weaker than the third quarter, but for the year it has been a strong year, not quite as good as last year in fixed income trading but better in equities trading and so forth. it is all about the future, the run rate. for equities trading, there has been a benefit in that business from the ipo's. we had a record year. m&a, we had a record year. there has been a huge benefit to equity trading from the primary side of the business, but going into this year we see the opportunity for fixed income volatility to return.

it is been nothing but the opposite jp morgan, goldman sachs, brokers like jeffries, cowhan and it is down, it is going the exact opposite way so financials have being rerated lower will go flat the first chart is xlf and you see the well defined down trend and this is xlf relative to spy. we've hit this line four or five times and i don't think anything of more of the same, likely to continue to fail at this line. second is xlf, the last chart of the two, itself. and it is talking about a well defined channel. we have moved from the top to the bottom this is the channel over the past ten months. and so at the bottom it probably sort of starts to meander and do nothing. i think xlf were loved, now they're not interesting if you will and so betting against volatility. >> so the technicals line up tony, what is your take and is this a trade you could be inclined to make >> it is because this is really a question of timing iron condor in order for it to profit, the asset needs to trade sideways an that is always tricky to identify because a lot of traders tend to put on iron condors once

joining us from the jp morgan conference is rob davis, the merck ceo. thanks for spending time with us today. you have taken over mid to endemic -- mid pandemic. how is it looking? what are the challenges? rob: thank you for having me on the show. it has definitely been an interesting ride. it is all good. we are performing quite well. we made a lot of great progress in 2021 the -- a lot of momentum in what we've achieved and the growth we will deliver this year . we will see that momentum continue with growth into 2022 and even beyond that into 2025. as we look at it, we are facing unique challenges as we deal with the impact of covid and the pandemic, but we have come to it fairly well and feel good about where we are in our future going forward. guy: -- alix: unlike other companies, we are depending on you to get through the pandemic. any data on how your drug deals with omicron and other potential variants? robert: as it relates to omicron, we have done preclinical testing, and it does appear to work well against omicron. we believe it should. when

bank, particularly jp morgan. jp morgan has expected expenses to rise to 77 billion, almost a 9% increase. there are also modernization costs. wells fargo says the expenses due to -- but there is pressure on pay across the spectrum. junior bankers got a lot of attention when they crossed the $100,000 a year mark. bloomberg had a report on friday that the top 1% of goldman sachs ranked the best 400 people and all will get special payouts on top of their base and bonus pay. that's millions of dollars of what they are earning in multimillion dollar pay packages. they are doing this to fend off poaching from other corners of wall street. shery: the competition for talent is really heating up. the issue is the loan growth was expected but that hasn't materialized. what happened? >> there's some indication loan growth was going to be picking up but it was flat on the air, especially where the consumer was concerned. loans were down 10% on year for wells fargo, up only 1% at j.p. morgan edits consumer businesses. wells f

who were reporting, we're talking about jp morgan, citi, wells, black rock, and goldman sachs coming out, and these are different areas of financial services as well so, this was supposed to be the time for financials, right we were supposed to be seeing rising rates, we're going to see better interest margins and yet here we are. so i think this is a situation where these whole sector is essentially stuck. but also we've gotten into a situation where a lot of the bad news has already come out. so i think this is an interesting setup potentially for something called an iron condor an iron condor is a strategy that we could use when we believe that we might be range bound for some time. now the thing about getting into a situation where your betting it is not going to go materially higher or materially lower, is to be mindful of catalyst. we've seen many of those come and go and that is not to say we don't have some important ones coming up we have the fed next week and that is important. one of the things that is when you use an iron condor, we're going to be getting into a short opt

with the jp morgan who she was discovering. by going in a systematic thorough way through his papers and through material that had not been utilized in the past. she was willing to revise her revisionism in effect and that that's you know, you've got to admire. people like that. i mean there aren't a lot of people like that. anyway, so the consequence was it took her? 14 years to write this book which i think his universally. regarded as the definitive work on a on a very look, she she was willing to accept. complexity and nuance that morgan is is one of the classic gilded age plutocrats who invite caricature. i mean, he was a caricature himself you look at the pictures and you know, the famous red red nose, you know that he medical condition then it's been retouched in some pictures and i mean, he looks like an ogre. and and for years, we thought the very term robert barron. there's a whole category of post-civil war larger than wife capitalists johnny rockefeller andrew carnegie henry clay frick. i mean, you know know the peo

all of the talk about the fed rate hike, four hikes from them and citibank and jp morgan. if this conversation about banishing reduction, the start of so-called qt, there was some discussion that may be that announcement would rub place -- replace a call for a rate hike. tom: i get the overlay of the balance sheet dynamics but i would overlay that with the possibility that we get better growth and persistent higher inflation that is unacceptable to all. jonathan: that is the mystery of july and august of this year. the fear is that growth fades in the back half of this year. maybe it starts with the cyclicals this year then may be in the back half it is back towards the growth story. 25 basis point moved to 1.77. we went through 1.80. we are going back to highs we have not seen since 2020. tom:tom: i look to the german 10 year yield to see if that goes positive. it is january and you need to do something now so you may be smarter 12 months from now. the shortest -- best answer i know is a physical subscription to current affairs magazine. this month is no different. " the

jp morgan is conservatively positioned. they have a blend between merchant banking and consumer banking so they're balanced coming into a situation like this. they make money from expanding rates. they're building a digital banks. they're firing on all cylinders. he is correct, the economy is strong, it can stand higher rates, particularly if you're going to companies that make great stuff at the top of their industry and they're at the leader board. that is exactly where you focus right now. maria: keith, real quick, what about tech right now, that is the area that seems to get crushed every time we see this nervousness play out on wall street over the fed's move. >> well, it's a great irony because people are worried about the fed, right, which is talking about 7, 8, 9% inflation. many of the tech names are going at 35, 40, 50%. if you're worried about inflation, that's exactly where you want to be because they're the companies growing and changing our world. jp morgan doesn't get to grow without tech. pfizer doesn't get

the jp morgan report cited the embracing of defi from various institutions. tokenization of assets and creating a playground where defi done in -- defi is done in a compliant way. also excited about gaming. the reason gaming is important is because it is kind of like a gateway for adoption. and fts were a great -- gateway for adoption in 2021. individual adoption was happening more rapidly. in 2022, gaming is the intersection of all of the good things about nft's, gameplay and defi. some of the games we are seeing, the creativity we are seeing and the game with occasion of using your own new ye -- your own unique defi -- unique nft will get closer to a metaverse environment. that is why even web two companies like facebook is so interested in the metaverse. emily: golden cross or death cross, we shall see. john wu, president of ava labs. twitter exploded recently when a writer suggested norton's antivirus software was sneakily mining crypto and charging users for it. >> norton lifelock elicited a torrent of tweets. -- pointed out that it's product included a

kailey: that has been the story with goldman and jp morgan. they were the first to say no, we are bringing traders back to their desk. you have to adapt to the times. given this surge and how quickly it is spreading, they have to consider the health implications as well. jonathan: one of the risks we will talk about with ian bremmer, 20 minutes away. from new york city, for our audience worldwide, a happy new year two -- to you all. from new york, this is bloomberg. ♪ >> president biden has reaffirmed the u.s. support for ukraine's sovereignty. in a statement, the white house said the u.s. and allies will respond decisively if russia invades ukraine. sanctions on russia banks are among measures recently being discussed. lloyd austin says he plans to quarantine over the next five days after testing positive for covid-19. he says his symptoms are mild and he will attend readings -- meetings virtually, when possible. his last contact with president biden was december 21, one week before he experienced symptoms. goldman sachs is encouraging peop

we hear from a jp morgan strategist daniel hui. this is bloomberg. ♪ >> i believe mr. kishida has a cautious stance over regulation of share buybacks, and because he is giving consideration to each company's visual circumstance, so i do not think it will impact capital markets. shery: the stock exchange present speaking exclusively to bloomberg, you can get more on that segment in japan ahead. it is time now for morning calls ahead of asian trading day, chinese internet stocks may be set for a rebound, that is the view of a citigroup analyst who sees sediment turning more positive in the back half of cyclical recovery. a recent meeting between regulators and chinese internet companies, citigroup says the government is still supportive of the industry and the worst of the crackdowns may be behind us. paul: goldman sachs has raised its latest forecast for rate hikes, global economist expect five 25 point basic -- basis hikes, 1.5% by the end of the year. jerome powell's latest comments make it clear the fed is open to a more aggressive rate of tightening. turning now to

it certainly weighed on jp morgan. how much is this idea of higher compensation, higher wages and other payments staff going to be a really dominant seen this quarter? >> i think it will be a strong theme throughout the quarter. it is something where a lot of investors are focused on it because it is one of the few levers the banks have full control over. you heard them talking about interest rates and the broader economy and banks are often really reacting to that. and don't have as much control. they do have more control on the call side, but we see that pressure building throughout the year whether it is junior investment bankers or senior folks. goldman having to pay more to their partners. there does seem to be a very hot job market both on the sell side and buy side on wall street and you are seeing that reflected in the banks results. anna: so that is something we will continue to focus on. something else the ceo of wells fargo mention was the higher interest rate. this is something that don't do anything about

jp morgan, citi, and wells fargo kickoff earnings. does the fed have the stamina to tackle inflation to the degree they need to? dr. doom himself who of course was very vocal during the 1970's, henry kaufman says no. he says to turn the market around to a more non-inflationary attitude, you have to shock markets. you cannot raise interest rates bit by bit. manus: but did we make it to the end of the week really intact? the dollar flopped and rolled over. yields almost exhausted themselves. they were out of puff by the time they got to the end of the leg. i like the way you put it, have the fed locked themselves in? four rate hikes, five rate hikes, that is not tightening, merely adjusting to normalization. a more normalized world. you are going to have 70 banks due to hundred rate hikes this year according to martin malone. a paradigm shift in liquidity. dani: that's a lot of doom and gloom for a friday. i thought we were supposed to be happy the weekend is approaching. but you are right. 70 banks. ella from pictet says the front end