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00:00JONATHAN: LOOKING FOR A BOUNCE THIS MORNING. FROM NEW YORK CITY, GOOD MORNING. EQUITY MARKET UP 55, ADVANCING MORE THAN 1%. "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: LIVE FROM NEW YORK CITY, WE BEGIN WITH THE BIG ISSUE, QUESTIONING THE FED PUT. > > I DO NOT THINK IT IS DURABLE AT ALL. > > THE FED PUT SHOULD BE QUESTIONED WHEN YOU HAVE INFLATION. > > THE HIGH LEVELS OF INFLATION. > > THE FED HAS ONLY STARTED TALKING ABOUT INFLATION. > > IT IS VERY MESSY. > > IT IS CLEAR CENTRAL BANKERS WANT TO REMOVE ACCOMMODATION. > > THE FED IS IN A POSITION WHERE THEY CAN ACCELERATE THE TAPER. > > AND A STEP BACK FROM THE CURRENT POLICY PATH WILL BE SCRUTINIZED. > > THERE IS NOT A LOT OF WIGGLE ROOM. > > YOU HAVE THE PROBLEM OF INFLATION. > > I AM NOT CONVINCED THERE IS THIS PUT. > > THERE'S A POLICY UNCERTAIN ISSUE WITH JAY POWELL AND THE FED. JONATHAN: JOINING US IS LISA SHALETT, PETER TCHIR, AND KEITH LERNER. WHAT DOES IT SAY ABOUT THE MARKET THAT WE ARE 2% FROM ALL-TIME HIGHS IN HAVING THIS CONVERSATION UP QUESTIONING THE FED PUT? LISA: WHAT IT SAYS IS THE MARKET STILL HAS UNBELIEVABLE FAITH THAT THE FED IS BASICALLY COMMITTED TO A GO SLOW STRATEGY AND THERE ARE STILL A LOT OF INDIVIDUAL INVESTOR MONEY ON THE SIDELINES. WE ARE SEEING THE SEESAW ACTION DESPITE SOME OF THE MORE HAWKISH COMMENTS FROM THE FED BECAUSE I THINK SOME OF THESE LESS EXPERIENCED INVESTORS ARE STILL ADDICTED TO THIS BY THE DIP MENTALITY AND WE ARE SEESAWING BETWEEN THE LESS SOPHISTICATED MONEY AND INSTITUTIONAL MONEY. JONATHAN: HAVE WE HAVE CHALLENGE FOR THE BUY THE DIP MENTALITY. PETER TCHIR, YOU WROTE FOR THE FIRST TIME WE ARE FACING A SELLOFF WHERE IT IS UNCLEAR WHAT THE FED WILL DO. THE PATH SEEMS TO BE FEWER BOND PURCHASES AND EVEN RATE HIKES. THAT CHANGES THE BUY THE DIP FUNCTIONALITY. TO WHAT DEGREE IS THAT TRUE? PETER: IS LARGELY TRUE. YOU HAVE A LOT OF FACTORS THAT AFFECT TRADING ON THE FIRST DAY OF THE MONTH. AS A REALIZATION HITS THAT THE FED WILL TAPER FASTER AND START HIKING, IT WILL TAKE SOME SUPPORT OUT OF THIS MARKET. YESTERDAY'S REACTION WHEN THE LONG END STARTED TRADING TO LOWER YIELDS, THAT IS NOT GOOD FOR THE ECONOMY OF THE FED HIKES QUICKLY. I THINK WE WILL HAVE TO DIGEST THIS. IT'LL TAKE A COUPLE OF WEEKS FOR THAT MENTALITY TO SIT IN. A LOT OF PEOPLE ARE HOPING MAYBE POWELL BACKTRACKS. I DO NOT THINK HE WILL. JONATHAN: ANYTHING OF DECEMBER 2018 AND INFLATION WAS AROUND TWO, AND NOW IT IS WRAPPED -- IS THAT THE GAME CHANGER? PETER: INFLATION FEAR, HE IS HAVING TO CHANGE. JUST LIKE DECEMBER 2018 WE ARE GOING INTO A PERIOD OF THIN LIQUIDITY. THINNER MOVES THAN WE SHOULD IN BOTH DIRECTIONS. JONATHAN: KEITH LERNER, YOUR REACTION? KEITH: GOOD TO BE WITH YOU. FROM THE FED'S PERSPECTIVE WE HAVE BEEN AVERAGING OVER 600,000 JOBS LAST SIX MONTH. WE HAD A GOOD ADP REPORT TODAY. THE ATLANTA GDP IS AROUND 8%. IF YOU HAVE ALL OF THAT OUT THERE, IT WOULD MAKE SENSE TO PULL BACK SOME OF THE STIMULUS. EVEN WITH TAPERING YOU STILL PROVIDING STIMULUS. I ALSO THINK IT AFFORDS THE MAXIMUM FLEXIBILITY. THERE ARE STILL UNCERTAINTIES AROUND THE VARIANT. IF VARIANT BECOMES MORE PROBLEMATIC YOU'LL SEE A DIP IN TONE IN THE MESSAGE, JUST LIKE WE SAW A DIP IN TONE AND THE MESSAGE LAST MONTH FROM THE FED. ANYTIME YOU HAVE THE FED AT THE MARKET YOU HAVE A PICKUP. IF WE LOOK AT LAST FRIDAY, IF YOU LOOK ONE YEAR FORWARD, THE MARKET HAS BEEN UP 18 OUT OF 19 TIMES. WE STILL THINK THE PRIMARY TREND IS HIGHER WHILE IN THE NEAR TERM IT WILL BE CHOPPY. JONATHAN: BUILDING IN LET'S ABILITY -- BUILDING IN FLEXIBILITY. I WANT TO START WITH THE WORDS OF THE FEDERAL RESERVE CHAIRMAN. THIS IS WHAT HE HAD TO SAY ON PULLING BACK MORE QUICKLY. > > VERY STRONG AND INFLATIONARY PRESSURES ARE HIGH. IT IS THEREFORE APPROPRIATE TO CONSIDER RAMPING UP THE TAPER OF OUR ASSET PURCHASES, WHICH WE ASKED AT THE NOVEMBER MEETING, PERHAPS A FEW MONTHS SOONER. JONATHAN: THAT STARTED THE GAP LOWER. OR WE CHARTING A PATH TOWARDS RATE HIKES OR BUILDING IN WHAT KEITH LERNER JUST SAID, FLEX ABILITY FOR WHAT MIGHT COME DOWN THE ROAD? LISA: I AM IN THE FLEXIBILITY CAMP AS WELL. I THINK POWELL HAS BEEN A VERY EFFECTIVE COMMUNICATOR. HE KNEW EXACTLY WHAT HE WAS DOING, STANDING PAT IN HIS DOVISH STANCE AROUND PATIENCE AND TRANSITORY UNTIL HE WAS NOMINATED FOR HIS SECOND TERM. NOW WE ARE ON THE OTHERS AND HE IS SAYING SO MUCH FOR TRANSITORY. WE MAY NEED TO ACCELERATE BECAUSE THIS ECONOMY IS QUITE STRONG AND INFLATION IS MORE PERSISTENT. THERE WAS NO NEW DATA BETWEEN OVER THE LAST 10 DAYS ON THAT ARGUMENT. THIS IS POWELL BUILDING IN SOME FLEXIBILITY, GETTING A LITTLE BIT MORE HAWKISH SO THAT HE CAN GO EITHER WAY NOW, FOR TICKLY DEPENDING ON WHAT HAPPENS WITH THIS VARIANT. JONATHAN: THIS IS DIFFICULT TO ANSWER, BUT THE ONE DATA POINT WE HAVE HAD IS HE GOT NOMINATED FOR A SECOND TERM. YOU THINK CLEARING THAT HURDLE, GIVE THE AUDIENCE HE WAS SPEAKING TO, WAS THAT A FACTOR IN ANY OF THIS FROM YOUR STANDPOINT? LISA: 100%. JAY POWELL HAS BEEN POLITICALLY ASTUTE ALL THE WAY ALONG AND I THINK HE ABSOLUTELY WAS CALCULATING THIS ENTIRE MOVE. JONATHAN: YOU WONDER HOW MUCH SIGNAL WE SHOULD TAKE FROM THAT IF THIS WAS DRIVEN SOMEWHAT BY THE POLITICS. LISA: ABSOLUTELY NONE. THAT IS MY POINT. I AM NOT IN THE CAMP THAT SUDDENLY HE IS MORE HAWKISH AND WE ARE SUDDENLY GOING TO HAVE THREE HEIGHTS IN 2022. I DO NOT BUY THAT. JONATHAN: PETER TCHIR, DO YOU BUY THAT? PETER: I ACTUALLY DO. THIS HAS BECOME A POLITICAL HOT POTATO. INFLATION IS ON BIDED'S LIST EVERY OTHER DAY. INFLATION HAS BECOME A POLITICAL ISSUE. HE IS UNDER A LOT MORE PRESSURE THAN UNDER NORMAL CIRCUMSTANCES AND THAT IS WHY HE IS CHANGING HIS MESSAGE. IT TIES IN WITH EVERYTHING YOUR OTHER GUEST WAS SAYING ABOUT HOW POWELL IS BEHAVING POST RENOMINATION. THIS INFLATION FEAR, THERE WILL BE A NOT MORE PRESSURE -- THERE'LL BE A LOT MORE PRESSURE ON THE FED. JONATHAN: THIS IS WHAT WE HAVE A COMMUNICATION PROBLEM, WHEN YOU CANNOT DRAW A DISTINCTION BETWEEN THE SIGNAL AND THE NOISE. HERE'S DEUTSCHE BANK'S CALL. "WE HAVE MOVED LIVED OFF FROM JULY TO JUNE AND CONTINUE TO ANTICIPATE THE FED WILL RAISE RATES AT A QUARTERLY PACE. THIS PATH WILL BE CONSISTENT WITH THREE HEIGHTS IN 2022, THREE IN 2023, AND TWO IN 2024. " JONATHAN: KEITH, WHERE DO YOU COME DOWN? KEITH: THE MARKET HAS SOMEWHAT OF A SHORT-TERMISM. YOU THINK ABOUT HOW MUCH THIS HAS EVOLVED WITH WHAT PEOPLE THOUGHT THE FED WOULD DO. LET'S THINK ABOUT SIX MONTHS FORWARD. WE ARE LIKELY TO START TO SEE SOME OF THESE INFLATION READINGS COME DOWN FROM ELEVATED LEVELS. THAT WILL GIVE THEM MORE FLEXIBILITY, AND ALSO THE ECONOMY IS IN GOOD SHAPE, BUT YOU'RE ALSO LIKELY TO SEE THE ECONOMY START TO COME DOWN FROM THE ELEVATED LEVELS. IF WE GET A MOVEMENT FROM GOODS TO SERVICES, YOU SHOULD ALSO SEE EASING IN THE SUPPLY CHAIN. AT THIS POINT I THINK THE MARKET IS GETTING TOO MUCH CONFIDENCE THE FED WILL MOVE TOO FAST RELATIVE TO OUR EXPECTATIONS. WE WILL LIKELY HAVE ONE OR TWO HIKES NEXT YEAR. JONATHAN: KEITH SITTING ON THE FENCE, LISA SAYING THERE IS NO SIGNAL, PETER SAYING THERE IS SOME SIGNAL. LISA, HOW WOULD YOU INVEST DIFFERENTLY? PETER, YOU SEE THE SIGNAL, WHAT DOES IT MEAN FOR ASSET ALLOCATION? PETER: I THINK YOU HAVE TO BE CAUTIOUS IN THE COMING DAYS AND WEEKS. CONTINUE TO FOCUS ON WHAT HAS BEEN WORKING. WE WILL SEE MORE GROWTH, MORE SUPPLY CHAIN BUILDOUT, WE WILL SEE LOGISTIC NEEDS IN THE U.S.. THAT IS MY CONCERN. THEY CAN ABOUT STRONG U.S. GROWTH WITH HIGH INFLATION, BUT AS WE READ DOMESTIC SIZED OUR ECONOMY, THAT WILL BENEFIT THE MOST. JONATHAN: LISA, IS THERE DAYLIGHT ON THE ALLOCATION PROCESS BETWEEN YOU AND PETER? LISA: I DO NOT THINK THERE IS PROFOUND DIFFERENCE. OUR PERSPECTIVE IS THE FED, IT IS NOT POLITICALLY CORRECT FOR THE FED TO SAY WE WANT INFLATION IN THIS ECONOMY, BUT I BELIEVE THE FED WANTS INFLATION. THEY HAVE BEEN FIGHTING DISINFLATION FOR THE PAST 13 YEARS AND THEY WILL GO SLOW. AS A RESULT, WE THINK THE PATHWAY FOR CYCLICAL STOCKS AND FOR GRADUAL RISE IN NOMINAL RATES AS WELL AS REAL RATES IS VERY STRONG. WE LIKE THE CAPEX CALL, THE CYCLICAL CALL, FINANCIALS, ENERGY. SOME OF THE NAMES WE HAVE BEEN TALKING ABOUT. WE THINK THE RUNWAY FOR THOSE NAMES IS MAYBE LONGER THAN THE BOND MARKET IS SIGNALING. JONATHAN: FINANCIALS COME INDUSTRIALS COME ENERGY, MINING. KEITH LERNER, YOUR RESPONSE? KEITH: WE HAVE BEEN VERY POSITIVE OVER LAST WHAT HE MONTHS. WE ARE STILL POSITIVE, BUT WE ARE REALISTIC THAT WHAT HAS HAPPENED WITH THE FED, WILL THIS CREATE A BIT MORE VOLATILITY? HONESTLY EXPECT MORE MODEST GAINS. AS FAR SECTOR POSITION, WE THINK A BARBELL APPROACH MAKES SENSE. EARLY IN NOVEMBER WE UPGRADED TECHNOLOGY AFTER BEING NEUTRAL. IT BROKE OUT OF A ONE-YEAR RELATIVE PRICE RANGE. WHEN PEOPLE HEAR ABOUT COVID THEY WILL GO BACK TO TECH. WE ARE PARING THAT WITH FINANCIALS AND ENERGY. WE THINK THE ECONOMY IS STILL ON SOLID FOOTING. THE FED IS NOT THE ONLY THING IMPORTANT FOR THE MARKET. EARNINGS HAVE ACCOUNTED FOR THE ENTIRE GAINS THIS YEAR, AND MARKETS HAVE RISEN AS THE FED HAS RAISED RATES, TYPICALLY AT A MORE MODEST PACE. JONATHAN: MARGINS HAVE BEEN TREMENDOUS. YOUTH LEARNER, PETER TCHIR, LISA SHALETT STICKING WITH US. COMING UP, THE OMICRON VARIANT FEELING FRESH UNCERTAINTY ABOUT THE OUTLOOK FOR AIR TRAVEL. > > THERE IS A BIT OF A QUESTION MARK CREATED AROUND THE NEW VARIANT. OVER THE COMING DAYS AND WEEKS AS PEOPLE GET MORE CONFIDENT THE VACCINE WILL HOLD, WE WILL KEEP MOVING THROUGH IT AND WE SHOULD NOT SEEK TOO MUCH OF AN IMPACT TO DEMAND. JONATHAN: THAT CONVERSATION COMING UP NEXT. FROM NEW YORK, THIS IS BLOOMBERG. PRES. BIDEN: I'LL BE PUTTING FORWARD A DETAILED STRATEGY LAYING OUT HOW WE WILL FIGHT COVID THIS WINTER. NOT SHUTDOWNS AND LOCKDOWNS, BUT MORE WIDESPREAD VACCINATIONS, TESTING, AND MORE. JONATHAN: THAT WAS THE PRESIDENT ON MONDAY. THE WASHINGTON POST REPORTED THE BIDEN ADMINISTRATION IS PREPARING TESTING REQUIREMENTS FOR -- REQUIRING A ROAD BE TESTED BEFORE BOARDING FLIGHTS REGARDING -- LET'S BRING IN BLOOMBERG'S JOE MATHIEU FROM D.C. FOR MORE. WHAT ELSE ARE WE EXPECTING TO HEAR FROM THE PRESIDENT TOMORROW ON THIS? JOE: A GREAT QUESTION. IT LOOKS LIKE THE ADMINISTRATION IS BUILDING THE PLANE IN FLIGHT WITH REGARD TO TRAVEL RESTRICTIONS. PRESIDENT BIDEN ADDRESSED THE NATION ON MONDAY WHEN WE KNEW EVEN LESS ABOUT OMICRON. WE STILL DO NOT KNOW VERY MUCH. THAT IS WHY THE ADMINISTRATION CONTINUES TO SAY IT IS BUYING TIME, TRYING TO CREATE SPACE TO ALLOW MORE DATA TO COME IN AND FOR MORE ADJUSTMENTS TO TAKE PLACE LIKE THIS ONE. TO YOUR POINT, THAT WOULD BE A MAJOR CHANGE, REQUIRING ALL PEOPLE COMING IN FROM OUT OF THE COUNTRY TO SHOW A NEGATIVE TEST RESULT WITHIN ONE DAY. THEY ARE ALSO CONSIDERING A SECOND TEST WITHIN THREE TO FIVE DAYS OF THEIR ARRIVAL, AS WELL AS A POSSIBLE SEVEN DAY QUARANTINE. WE COULD BE GOING BACK TO THE FUTURE IN DEALING WITH THIS NEW VARIANT. THE PRESIDENT PROMISED TO SPEAK MORE ABOUT IT TOMORROW. HE WILL DO IT FROM THE NATIONAL INSTITUTE OF HEALTH. JONATHAN: WE ARE ALL LOOKING FORWARD TO THAT. SIMULTANEOUSLY THEY ARE PUSHING FOR OTHER PEOPLE TO GET VACCINATED. IS THERE EVERY -- IS THERE ANY EVIDENCE FROM THE REPORTING WE ARE SEEING THAT THEY WILL TREAT THE VACCINATED AND UNVACCINATED DIFFERENTLY WITH AIR TRAVEL? LISA: IT LOOKS LIKE THE TEST -- JOE: IT LOOKS LIKE THE TEST WILL HAVE TO TAKE PLACE REGARDLESS OF YOUR VACCINE STATUS. THAT IS THE ONE THING THE WHITE HOUSE CAN SAY. THERE HAS BEEN A CONCERN, SOME PEOPLE THINKING THEY MIGHT WAIT TO GET BOOSTERS, MAYBE THERE WILL BE A NEW FORMULATION, THAT IS A REAL CONCERN FOR THIS WHITE HOUSE. THEY WANT PEOPLE TO GET BOOSTED NOW IF THEY HAVE NOT ALREADY AND NOT WAIT FOR MORE DATA. IT WILL BE TWO TO THREE WEEKS BEFORE WE HAVE HARD DATA ON THE WAY THE EXISTING VACCINES INTERACT WITH THE NEW VARIANT. JONATHAN: GREAT TO CATCH UP. LOOK FOR JOE ON BLOOMBERG RADIO. BACK WITH US IS LISA SHALETT, PETER TCHIR, KEITH LERNER. LISA, YOU TALKED ABOUT THE MOVE INTO THE CYCLICALS. HOW DOES THIS CONVERSATION SHAPE THAT IN ANY WAY? LISA: OBVIOUSLY WE WENT THROUGH THIS IN THE AUGUST SEPTEMBER TIMEFRAME, WHERE TO THE EXTENT WE HAVE SLOWDOWNS IN THE SUPPLY CHAIN WE ALSO MAY HAVE A SLOWDOWN IN DEMAND. AS FAR AS WE ARE CONCERNED, WE THINK UNTIL WE KNOW MORE, THOSE ARE THINGS WE CAN LOOK THROUGH. AS WE KNOW, THOSE THINGS CURE IT PRETTY QUICK. EVEN THOUGH THE HUMAN DAMAGE WAS THERE. JONATHAN: IT IS A GUESSING GAME. OUTSIDE OF THE VIRUS AND THE DATA ATTACHED TO IT YET TO GUESS HOW POLICYMAKERS RESPOND AND HOW THE CONSUMER RESPONDS. YOU HAVE AN EDUCATED GUESS ON BOTH? KEITH: WE ALWAYS WORK IN AN UNCERTAIN WORLD. IT IS ABOUT RELATIVE OPPORTUNITY. SOME OF THE CYCLICALS ARE AT A 20 YEAR LOW RELATIVE TO THE MARKET. THAT IS WHY SOME OF THIS IS BEING DISCOUNTED. AS WE LOOK BACK OVER LAST TWO YEARS, THE ONE THING WE CAN BE CONFIDENT ABOUT HIS CONSUMERS AND CORPORATIONS HAVE ADAPTED. I MENTIONED THE RECORD PROFITS. I THINK PEOPLE SHOULD HAVE OPTIMISM WE WILL ADAPT NO MATTER WHAT HAPPENS WITH THIS LATEST VARIANT AND WE WILL MOVE FORWARD. THAT IS THE LESSON WE HAVE LEARNED OVER THE LAST TWO YEARS. JONATHAN: I THICKLY HAVE IDENTIFIED THAT OPTIMISM EVERY TIME WE GET A BOUNCE. THINGS WE DO NOT KNOW, TRANSMISSIBILITY. SEVERITY. AN EARLY PICTURE, BUT NOT A FULL PICTURE. YOU'VE HEARD FROM VACCINE MAKERS THERE IS SKEPTICISM AROUND THOSE COMMENTS. THEY ADMIT WE HAVE TO WAIT FOR THE DATA. AS AN INVESTOR, WHAT YOU DO? THIS IS WHAT LORI CALVASINA HAD TO SAY PEOPLE SAID TO HER. LORI: WE DID A SURVEY YESTERDAY AFTERNOON AFTER BIDEN SPOKE AND HE -- AND MOST PEOPLE IN OUR SURVEY ARE NOT REALLY DOING ANYTHING WITH THEIR PORTFOLIOS YET. THEY NEED MORE INFORMATION. INVESTORS ARE GOING TO NOT GO BACK INTO DEFENSIVE'S. THEY WILL STICK WITH TECH AND CONSUMER DISCRETIONARY. JONATHAN: PETER TCHIR, THE WORDS OF LORI CALVASINA. WE FOUND MOST PEOPLE ARE NOT DOING ANYTHING WITH THEIR PORTFOLIOS YET. WE NEED MORE INFORMATION. ARE YOU DOING THE SAME THING? PETER: I PUSHED A LITTLE BIT TOWARDS COMPANIES THAT BENEFIT TOWARDS WORK FROM HOME, BECAUSE I THINK WE MIGHT BE SLIDING BACK ON THAT BECAUSE IT IS THE WINTER AND PEOPLE DO NOT WANT TO DO THE COMMUTE. I AM COMFORTABLE WITH OUR ABILITY TO DEAL WITH THE NEW VARIANT. ONE THING YOU HAVE TO REMEMBER IS THIS VIRUS, AS AWFUL AS IT WAS, DID NOT AFFECT YOUNGER PEOPLE THAT BADLY ANYWAY. THE FEAR CONTINUES TO GET OVERBLOWN. YES IT IS BAD, AND YOU DO NOT WANT TO BE IN CERTAIN RISK CATEGORIES, BUT WE HAVE ALREADY LEARNED TO DEAL WITH AND MORE MORE PEOPLE EXCEPT THAT IT IS DANGEROUS, BUT IT IS NOT AS DANGEROUS FOR AN AVERAGE 35-YEAR-OLD PERSON AS IT WAS LAID OUT TO BE. I THINK WE WILL MOVE THROUGH THIS, WE WILL CONTINUE TO TRAVEL. AS LONG AS THE GOVERNMENT STAYS OUT OF THE WAY WE WILL HAVE A DECENT ECONOMY. JONATHAN: THAT IS A BIG CAP YACHT -- THAT IS A BIG CAVEAT, AS LONG AS THE GOVERNMENT STAYS OUT OF THE WAY. WE KNOW THE U.S. RESPONSE TO THIS VERY DIFFERENTLY COMPARED TO CONTINENTAL EUROPE AND CHINA. THIS APPROACH THE MARKETS, HOW THE CHINESE MIGHT DEAL WITH THAT , HOW THE EUROPEAN GOVERNMENTS MIGHT DEAL WITH IT, HOW THE U.S. GOVERNMENT MIGHT DEAL WITH THAT. PETER: IT IS PRETTY ME -- IT IS PUTTING ME ON HOLD FROM BUYING EM AND EUROPEAN STOCKS. UNTIL WE SEE HOW THEY REACT TO THIS VARIANT, BECAUSE THEY TEND TO BE MORE DRACONIAN, I CANNOT GET COMFORTABLE SAYING BUY TO THOSE. IT LOOKS LIKE EUROPE WILL NOT MUCK THINGS UP, I WANT TO GET INTO EUROPEAN STOCKS AND EM. JONATHAN: LISA, DO YOU FEEL THE SAME WAY? LISA: THAT IS WHERE WE SEE THE OPPORTUNITIES ON A RELATIVE VALUATION BASIS AND IN TERMS OF THE RUNWAY FOR CORPORATE PROFIT RECOVERY. WE HAVE BEEN IN THE CAMP THAT SAYS THE RECORD PROFITS OF THE S & P 500 REFLECT A LITTLE BIT OF A MISMATCH BETWEEN PRICING POWER AND REVENUE AND ACCOUNTING FOR WHAT WE THINK ARE GOING TO BE RISING COSTS. WE ARE IN THE CAMP THAT SAYS THE S & P 500 HAS SEEN MAXIMUM OPERATING LEVERAGE AND MAXIMUM PROFIT MARGINS, AND WHERE THERE ARE STILL MARGIN OPPORTUNITIES AROUND THE GLOBAL RECOVERY IS OUTSIDE THE U.S.. ONE THING WHERE I WOULD DIFFER FROM MY COLLEAGUES IS ON CHINA. I DO THINK WE MIGHT SEE SOMEWHAT OF A MORE MILD RESPONSE FROM THE CHINESE GOVERNMENT, GIVEN THE FACT THE ACTIONS THEY HAVE TAKEN , THE ABSOLUTE ZERO-TOLERANCE, HAVE CREATED UNBELIEVABLE SUPPLY CHAIN PROBLEMS, BUT HAVE ALSO WEAKENED GROWTH IN THEIR OWN ECONOMY AT A TIME THEY ARE PURSUING THEIR REFORM PROGRAMS AROUND ECONOMIC EQUALITY. I THINK WE MIGHT SEE A DIFFERENT AND MORE MODEST APPROACH TO CHINA AS THEY ALSO LEARN TO LIVE WITH IT. JONATHAN: LISA SHALETT, PETER TCHIR, KEITH LERNER STICKING WITH US. IN THE U.S. WE ARE STILL UP ON THE S & P 21.6% INTO WEDNESDAY SESSION. LATER, THE TRADE IS FACING AN UNCERTAIN DECEMBER. FRESH VIRUS CONCERNS AND A BIT OF A PIVOT FROM CHAIRMAN POWELL. THAT CONVERSATION IS STILL AHEAD. FROM NEW YORK CITY, THIS IS BLOOMBERG. JONATHAN: FIVE MINUTES AWAY FROM THE OPENING BELL THIS WEDNESDAY MORNING. YOUR EQUITY MARKET UP 1% ON THE S & P, ON THE NASDAQ UP 1.2%. GET TO THE BOND MARKET. A FOCUS ON THE FRONT END. CHAIRMAN POWELL WAKING UP THE RATE HIKE CONVERSATION. YIELDS HIGHER BY TWO BASIS POINTS. JUST SHORT OF 60. ANCHORED GOING INTO CHAIRMAN POWELL'S TESTIMONY IN THEIR WAKING UP AGAIN. MORNING CALLS. GOLDMAN DOWNGRADING D.R. HORTON TO NEUTRAL FORECASTING LIMITED UPSIDE. COWEN NAMING GENERAL DYNAMICS ONE OF ITS BEST IDEAS, SEE YOU NUMBER OF CATALYST FUELING EARNINGS GROWTH. BAIRD UPGRADING CAPITAL WANT TO NEUTRAL, HIGHLIGHTING THE STOCKS'S APPEALING VALUATION. THAT IS UP 2.9%. CHINA'S BIG TECH CRACKDOWN LOOKING FAR FROM OVER. MORE THAT CONVERSATION IS COMING UP. YOUR OPENING BELL IS UP NEXT. JONATHAN: 24 SECONDS AWAY FROM THE OPENING IN NEW YORK. AT LEAST IT IS NOT BORING. A MESSY END TO THE YEAR AS WE ENTER THE FINAL MONTH OF 2021. FUTURES UP 1.2% ON THE S & P, THE NASDAQ UP 193. THE STATE OF TREASURIES JUST AS MESSY AS THE EQUITY MARKET. YIELDS UP, YIELDS DOWN, YIELDS UP FOUR BASIS POINTS. UNCHANGED ON EURO-DOLLAR. PRUDE BOUNCING BACK -- CRUDE BOUNCING BACK, $68.34. IN THE EQUITY MARKET WE OPEN HIGHER ON THE S & P 500 AS WE ADVANCE A LITTLE BIT ON THE BENCHMARK. THE STORY OF THE EQUITY MARKET OVER THE LAST FEW DAYS, WE WERE LOWER ON FRIDAY, HIGHER ON MONDAY, LOWER TUESDAY. THE VOLATILITY FOR ALL TO SEE. HERE'S JP MORGAN'S JACK CAFFREY ON JUST THAT. JACK: VOLATILITY WILL BE LARGE AND MORE SUBSTANTIAL OVER THE NEXT SIX TO NINE MONTHS. WE ARE TALKING A LOT ABOUT THE ECONOMY, ABOUT THE FED REACTION FUNCTION, ABOUT THE OMICRON VARIANT. WHEN I LOOK AT HIGH EXPECTATIONS OF COSTS -- ACROSS CREDIT, WE DO NOT HAVE AS MUCH ROOM FOR ERROR AS WE MIGHT HAVE HAD IN THE PAST. JONATHAN: BACK WITH US LISA SHALETT, PETER TCHIR, KEITH LERNER. YOU MADE THE POINT THAT PERHAPS WE SHOULD BE -- SHOULD WE BE GETTING READY FOR MUCH MORE WHAT WE HAVE SEEN, MORE VOLATILITY? JONATHAN: PETER TCHIR, GO FOR IT. PETER: I THINK WE SHOULD EXPECT THAT INTO YOUR END. IT IS VOLATILE. PEOPLE ARE SHAPING RETURNS. CREDIT MARKETS HAVE BEEN HEAVY. WE ARE SEEING HIGH-YIELD STRUGGLE A LITTLE BIT. ULTIMATELY WILL WANT TO BE LONG AND TAKE RISKS. CYCLICAL SPECS A LOT OF SENSE TO ME. I WANT TO BE IN EUROPE. I THAT WE HAVE TO GET THROUGH THIS PERIOD. I THINK IT WILL BE ROUGHER THAN CURRENTLY PRICED IN. JONATHAN: LISA SHALETT, YOUR VIEW? LISA: AS YOU KNOW AND MANY OF THE CLIENTS OF MORGAN STANLEY KNOW, WE BELIEVE WE WILL GO THROUGH THIS PERIOD OF VOLATILITY AS WE MAKE THIS TRANSITION IN POLICY. WE HAVE BEEN CALLING FOR A 10% TO 15% CORRECTION AT THE INDEX LEVEL. THAT BEING SAID THERE STILL A LOT OF STOCK PICKING TO DO AROUND THE EDGES AND THOSE CYCLICALS, FINANCIALS, INDUSTRIALS. JONATHAN: WHY HAS IT BEEN SO DIFFICULT TO GET THAT CORRECTION WHEN WE HAVE SEEN THE TURN SURFACE? LISA: THIS IS SOMETHING THAT HAS BEEN A CHALLENGE FOR US. WE CONTINUE TO BELIEVE A LOT OF THIS HAS TO DO WITH THE CONCENTRATION IN THE S & P 500 INDEX ITSELF. WE HAVE TALKED ABOUT THE FACT THAT THE TOP 50 NAMES AT VARIOUS MOMENTS HAVE ACCOUNTED FOR AS MUCH AS 40% OF THE MARKET CAP OF THAT INDEX, DOES PRIMARILY TECHNOLOGY NAMES ARE MASSIVELY OVER OWNED. THEY ARE CROWDED, BOTH BY RETAIL AND INSTITUTIONAL, AND WE KNOW THEY HAVE BEEN THE FAVORITE OF NEW FLOWS THAT HAVE COME IN OFF THE SIDELINES FROM THOSE INDIVIDUAL INVESTORS OVER LAST TWO AND A HALF MONTHS. THOSE FLOWS HAVE BEEN A POWERFUL SUPPORT THAT INDEX. JONATHAN: IT FELT DIFFICULT, YET WE ARE 2% AWAY. WITHIN 2% FROM ALL-TIME HIGHS. WHAT YOU MAKE OF THAT? KEITH: IT SPEAKS TO THE RESILIENCY. THERE IS BITTER MEDICINE OUT OF INFLOWS THIS YEAR. TO LISA'S POINT, THERE IS A BALANCE BETWEEN GROWTH, CYCLICALS. MONEY HAS BEEN ROPED IN FROM ONE AREA TO THE OTHER. I THINK WE AS WE MOVE INTO NEXT YEAR THE SHALLOW AND INFREQUENT CORRECTIONS WE SAW OVER LAST YEAR WILL BECOME MORE FREQUENT AND DEEPER. VOLATILITY IS NOT JUST A NEGATIVE. VOLATILITY PROVIDES OPPORTUNITY. WE WILL HAVE MORE TACTICAL OPPORTUNITIES NEXT YEAR. THE LAST YEAR IS LONG THE VOLATILITY INDEX. JONATHAN: IS A BROAD-BASED RALLY WITH A CYCLICAL TILT. ENERGY, CONSUMER DISCRETIONARY, FINANCIALS LEADING. LAGGING, REAL ESTATE, HEALTH CARE. A RATES PLAY EMBEDDED IN THAT. I CHINA ASPECT THE DISCUSSION, PLANNING TO RESTRICT COMPANIES FROM GOING PUBLIC. ONE OF BEIJING'S BIGGEST STEPS ON CRACKING DOWN ON OVERSEAS LISTINGS. FOR MORE ON THOSE NAMES, LET'S BRING IN ABIGAIL DOOLITTLE. ABIGAIL: THIS IS SUPER INTERESTING, EXCLUSIVE WORK BY SOME OF OUR BLOOMBERG COLLEAGUES, THE IDEA THAT GOING PUBLIC WITH FOREIGN ENTITIES IN CHINA WILL BE RESTRICTED. BY CLOSING A LOOPHOLE THAT HAS BEEN USED SO FAR CALLED VARIABLE INTEREST ENTITIES. THIS IS A WAY FOR FOREIGNERS TO OWN STEAKS. THIS WILL STEM THE TIDE OF CAPITAL TO CHINESE ENTREPRENEURS AND WALL STREET BANKS RELATIVE TO COMPANIES LISTED UNDER THIS STRUCTURE. THEY WILL NEED TO MAKE ADJUSTMENTS TO THEIR OWNERSHIP STRUCTURES, INCLUDING ALIBABA AND DIDI. DIDI IS UNDER PRESSURE TO DELIST FROM THE U.S. EXCHANGES ANYWAY. THERE WILL BE AN EXCEPTION FOR COMPANIES USING THIS CHAPTER IN HONG KONG WITH REGULATORY APPROVAL. THE HANG SENG ENTERPRISE INDEX AT A FRESH 2021 LOW. NOT A LOT OF COMFORT FOR THOSE INVESTORS. SPEAKING OF ALIBABA AND DIDI, ALIBABA ONE OF THE BIGGEST IPO'S EVER, GOING PUBLIC IN 2014. IT IS ON PACE FOR ITS WORST YEAR EVER SINCE THAT TIME. DIDI DOWN ABOUT THE SAME AMOUNT. BOTH LOSING 315 BILLION THIS YEAR. ALL OF THIS CAUSING THE QUESTION TO RESURFACE. IN CHINA, ARE THE SHARES INVESTABLE? JONATHAN: THAT IS THE NUMBER ONE QUESTION. DOES THE ISSUES. THE LISTING ISSUE AND THE -- TWO ISSUES. THE LISTING ISSUES AND THE OPPORTUNITY. IT IS INTERESTING TO ME THAT AFTER DEBATING THIS FOR YEARS ABOUT THE LISTING RULES OF CHINESE FIRMS IN THE UNITED STATES, THE DEBATE HAS ALMOST BEEN EXCLUSIVELY TAKEN BY U.S. POLITICIANS WORKING OUT WHAT THEY SHOULDN'T SHOULD NOT DO. IT IS THE CHINESE COMMUNIST PARTY THAT HAS MADE THE DECISION FOR THEM. WHAT YOU MAKE OF THAT? PETER: THIS HAS BEEN ONE OF OUR THEMES FOR TWO YEARS, THE RE-CENTRALIZATION OF CHINA. CHINA IS REESTABLISHING THE COMMUNIST PARTY. THEY HAVE STOPPED THE JACK MA'S OF THE WORLD FROM BEING PUBLIC FIGURES. EVERY TIME I LOOK AT CHINA, I CAN THINK ABOUT IS THE REGROWTH OF THE COMMUNIST PARTY ESTABLISHING ITSELF AND I THINK IT MAKES CHINA RELATIVELY ON INVESTABLE -- RELATIVELY UNINV ESTIBLE. I THINK WE ARE GOING TO HAVE TO PULL THINGS AWAY FROM CHINA TO COMPETE WITH THEM. JONATHAN: KEITH LERNER, PETER TCHIR IS FOCUSED ON THE ON SHORING EFFORT IN U.S. MANUFACTURING. KEITH: I DO NOT KNOW IF IT IS UNIVESTABLE BUT IT IS VERY UNATTRACTIVE. CHINA BY ITSELF ACCOUNTS FOR 34% OF THE EMERGING-MARKET INDEX. BEFORE THE REGULATORY CRACKDOWN THE PROFITS WERE UNDERWHELMING. NOW YOU HAVE THIS REGULATORY CRACKDOWN IN THE PROFIT TRENDS WE GET WORSE. YOU DO NOT KNOW WHAT MULTIPLES TO PUT ON THIS. IS IT A PROFIT MOTIVATED COMPANY OR A PRIVATE COMPANY? IF YOU LOOK AT SOME OF THESE RECENT REPORTS FROM THE CHINESE TECHNOLOGY COMPANIES, THEIR MAIN POINT THEY ARE TALKING ABOUT IS NOT PROFITS, IT IS WE ARE LOOKING TO DO MORE REGULATION, MORE FOCUSED ON PROSPERITY. THAT MAY BE FINE FROM AN ECONOMIC STANDPOINT, BUT FROM AN INVESTOR STANDPOINT WE WOULD STAY NEGATIVE SHORT-TERM AND LONG-TERM. IF YOU HAVE MEAN REVERSION, WE WOULD USE THAT TO GET MORE UNDERWEIGHT. JONATHAN: I'M HAPPY TO GIVE YOU THE NUMBER OF JAY PELOSKY BECAUSE HE DISAGREES WITH YOU BOTH. TAKE A LISTEN. JAY: NOW SHIFTING TO ASIA. I THINK BOTH JAPAN AND CHINA ARE INTERESTING. BUYING TECHNOLOGY IN UNITED STATES WILL PROVE TO BE A MASSIVE MISTAKE. I THINK THE OPPORTUNITY IS TO LOOK AT THINGS THAT HAVE ALREADY BEEN BEATEN UP AND BY THOSE. THAT IS CHINA. FOR ALL OF THIS UNCERTAINTY CHINA WILL BE ON A GLIDE PATH IN 2022. JONATHAN: LISA, YOUR RESPONSE? LISA: AS I THINK YOU KNOW, WE WOULD TAKE THE OTHER SIDE OF THE NEGATIVE. WHILE WE UNDERSTAND IN THE SHORT TERM, THIS IS A TOUGH BLOW FOR A LOT OF AMERICAN INVESTORS, THE REALITY IS WE THINK CHINA IS PLAYING THE PART THEY HAVE TO PLAY. THAT IS MOVING TOWARDS THIS PROGRAM OF COMMON PROSPERITY ALLOWS THEM TO SUSTAIN THE PROMISE OF DELIVERING ANOTHER 300 MILLION PEOPLE TO AN EMERGING MIDDLE CLASS OF CONSUMERS, DELIVERING THAT TO THE WORLD. THAT IS CHINA'S PROPOSITION, THAT IS WHAT IT HAS BEEN FOR THE LAST DECADE AS THEY MOVE AWAY FROM BEING A PURE EXPORTER AND MANUFACTURING AND INFRASTRUCTURE DRIVEN ECONOMY. I THINK THEY NEED TO DO THIS. WE ARE INVESTING IN CHINA, WHERE A LOT OF THIS BAD NEWS IS DISCOUNTED. WE ARE DOING IT THROUGH SHARES BECAUSE WE DO THINK THE COMMUNIST PARTY "GETS THE JOKE" AND THEY WANT CAPITAL FLOWING INTO THEIR ECONOMY. THEY JUST WANT CHINESE CITIZENS TO GET RICH FROM THEIR COMPANIES, NOT AMERICAN INVESTORS. JONATHAN: HE WENT STRAIGHT TO THE ECONOMY. OPTIMISTIC -- YOU WENT STRAIGHT TO THE ECONOMY. OPTIMISTIC. NOT THE SAME AS BEING ATTRACTED TO THE EQUITY MARKET. THE ECONOMY IS SAID TO BE GOOD. HOPEFULLY THEY DELIVER MORE GAINS. WE ALL WANT TO SEE PEOPLE OUT OF POVERTY. WHEN IT COMES TO THE EQUITY MARKET, CAN YOU GET THAT EXPOSURE MORE SAFELY GIVEN THE WORRIES WE HAVE HAD? YOU COULD WAKE UP ONE DAY IN THAT PARTY CAN CHANGE THE STORY FOR YOU JUST LIKE THAT. LISA: I AGREE WITH THAT. THE WAY YOU WANT TO APPROACH INVESTING IN CHINA HAS SHIFTED. USING THOSE MULTINATIONALS AS WAY OF GETTING EXPOSURE TO THAT GROWTH IS ONE PART OF THE STORY. WE DO THINK THERE ARE GOING TO BE COMPANIES THAT ARE WINNERS IN CHINA THAT CAN BE ACCESSED INCREASINGLY, WHO ARE GOING TO BE TECHNOLOGY LEADERS, WHO ARE GOING TO BE CATEGORY KILLERS IN THEIR OWN RIGHT, WHETHER THEY ARE SUPPORTED ON THEIR JOURNEY TO GET THERE THROUGH STATE OWNED ENTERPRISES OR NOT REMAINS TO BE SEEN. WE DO THINK THE PROFIT POTENTIAL IS THERE. JONATHAN: PETER, CAN I GET A FINAL WORD FROM YOU ON ALL OF THIS? DO YOU LIKE THE STORY FROM A DIVERSIFICATION PERSPECTIVE? THAT ARGUMENT HAS BEEN MADE THROUGH THIS YEAR. PETER: I JUST THINK THERE IS SO MUCH UNCERTAINTY AROUND CHINESE POLICY AND HOW THEY WILL TREAT TAIWAN I WOULD STAY AWAY FROM THAT. THERE ARE OTHER OPPORTUNITIES, THEIR OTHER AREAS, LATIN AMERICA, EUROPE. THAT IS WHERE I WOULD RATHER INVEST. THE RISK OF CHINA CONTINUING WITH ITS CENTRALIZATION AND REINFORCEMENT OF THE COMMUNIST PARTY IS TOO RISKY TO INVEST. JONATHAN: PETER TCHIR, KEITH LERNER, LISA SHALETT, ALWAYS FANTASTIC TO CATCH UP WITH YOU. WE ADVANCE THIS WEDNESDAY MORNING. ONE STOP NOT ADVANCING IS MODERNA, TAKING A BIT OF A BEATING, DOWN 7.5%. GETTING HAMMERED IN EARLY TRADING. WE HAVE BEEN WHIPSAWED OVER LAST WEEK. ONE CURRENCY HAS BEEN WHIPSAWED EVEN MORE. TURKEY DIRECTLY INTERVENING IN FOREIGN-EXCHANGE. > > TURKEY ASTANA MARKET I WOULD TOUCH. THIS DOES NOT LOOK LIKE IT WILL END IN A GOOD OUTCOME. JONATHAN: THAT CONVERSATION JUST ROUND THE CORNER. FROM NEW YORK, THIS IS BLOOMBERG. THAT CONVERSATION AT 10:00 EASTERN. THIS IS BLOOMBERG. > > EVERYBODY KNOWS INTEREST RATES IN TURKEY, INTEREST-RATE POLICY IS HIGHLY UNORTHODOX. THEY HAVE BEEN CUTTING RATES WHILE EVERYBODY ELSE HAS BEEN RAISING RATES. INFLATION IS GOING HIGHER. REAL INTEREST RATES ARE COLLAPSING AND THAT IS NOT A WAY TO STABILIZE THE CURRENCY. THE CURRENCY IS IN COLLAPSED TERRITORY. JONATHAN: ON THE TURKISH CURRENCY. WE WILL GET TO THAT IN A MOMENT. BREAKING NEWS ON THE ECONOMY. PMI FROM MIKE MCKEE. MICHAEL: PMI'S ARE DOING WELL AROUND THE WORLD. IN THE UNITED STATES AS WELL BECAUSE WE ARE BUYING STUFF. THE MARKET PMI FOR MANUFACTURING COMES IN AT 58.3, DOWN FROM THE BLUEBERRY NUMBER BUT OFF BY ONE POINT -- BUT OFF FROM THE PRELIMINARY NUMBER. AROUND THE WORLD THE NUMBERS HAVE BEEN PRETTY GOOD WITH THE EXCEPTION OF GERMANY, THEY SAW A SLIGHT DECLINE. THE REST OF THE EUROPEAN NATIONS IN ABOUT THE SAME OR HIGHER THAN THEY WERE. IT DOES SHOW MANUFACTURING IS ONE SECTOR THAT IS WORKING AROUND THE WORLD. JONATHAN: LOOKING FORWARD TO THE COVERAGE OF THE ISM AT THE TOP OF THE HOUR. MICHAEL MCKEE, ALIX STEEL, GUY JOHNSON BREAKING THAT DOWN. A CURRENCY PAIR WE NEED TO DISCUSS, DOLLAR LIRE, THIS CURRENCY ALL OVER THE PLACE. THIS MORNING DOLLAR-LIRA A MOVE OF 1.9% IN THE TURKISH LIRA'S FAVOR. THE CENTRAL BANK SELLING CURRENCY FOR THE FIRST TIME SINCE 2014. THE CENTRAL BANK SAYING UNHEALTHY PRICE FORMATIONS IN EXCHANGE RATES. DAMIAN SASSOWER, YOU DO NOT SAY. DAMIAN: FOR ME THE QUESTION IS WHAT ARE THEY SELLING AND WHERE IS IT COMING FROM. RESERVES IN TURKEY ARE NEGATIVE. IF YOU GO BACK TO 2019, TURKEY IS THE ONLY ONE OF 19 EMERGING-MARKET ECONOMIES TO SEE THE RESERVES DECLINE. RESERVES HAVE ACCUMULATED AGAINST ALL 18 EMERGING-MARKET MAJORS AND ACCELERATED AT A QUICKER PACE THAN MONEY SUPPLY IMPORTS. IT IS NOT HAS ACCELERATED AS QUICKLY OF THE DEBT BUILD, THE RESERVE SITUATION IS RELATIVELY STABLE WITH THE EXCEPTION OF TURKEY. NOW YOU HAVE LEVELS WELL ABOVE THE MARCH 2020 HIGHS, WHEN THE CENTRAL BANK GOVERNOR WAS REMOVED. THINGS GET WORSE. JONATHAN: WHEN THEY WERE DOING THIS WE HAD THE TURKISH LEADER REPEATED THE SCRIPT ABOUT WHAT HE THINKS ABOUT WHERE INTEREST RATE SHOULD BE. DO YOU SEE ANY OF THIS BLEEDING OUT INTO THE REST OF THIS UNIVERSE? INTO EMERGING MARKETS ELSEWHERE? DAMIAN: NOT ON THE RESERVE SIDE. IF YOU LOOK AT THE RESERVE SITUATION, THERE'S NOT ANY REAL RISK OF A RUN ON ANY CURRENCY, WITH THE EXCEPTION OF THE LIRA. FOR ME IT WILL BE ABOUT HOW DOES THIS SPILL OVER INTO THE BANKING SECTOR AND ABOUT HOW THAT SPILLS OVER INTO THE BROADER EU. EUROPEAN BANKS ARE BACKSTOPPING. THAT IS WHAT WE ARE LOOKING FOR. WE DO NOT SEE ANY EVIDENCE YET BUT THIS IS GETTING PRETTY BAD PRETTY QUICKLY. JONATHAN: IT HAS BEEN A ROUGH RIDE. A SIMILAR STORY IN THE COMMODITY MARKET IF YOU HAVE BEEN LONG OR SHORT CRUDE AT SOME POINT BECAUSE THIS MARKET HAS BEEN EVERYWHERE. CRUDE THIS MORNING POSITIVE 6.2%. WTI UP 2.5%. I WANT TO BRING IN JULIAN LEE FOR MORE ON THIS. IN OPEC MEETING JUST ROUND THE CORNER STOP HOUSE THE STAGE SET FOR THIS ONE? JULIAN: IS UP IN THE AIR. OPEC IS MEETING RIGHT NOW. THIS IS LARGELY AN ADMINISTRATIVE MEETING FOR THE GROUP. THEY HAVE BUDGETS SET FOR NEXT YEAR AND THEY HAVE TO ELECT A NEW SECRETARY GENERAL AS THE SECOND TERM OF THEIR CURRENT ONE EXPIRES IN 2022. THEY NEED SOMEONE TO REPLACE HIM. ONCE THAT MEETING IS CONCLUDED, WE WILL START ON A SERIES OF TECHNICAL MEETINGS WHERE THEY WILL START TO LOOK AT SUPPLY DEMAND FORECAST THAT HAVE BEEN PUT TOGETHER BY THEIR ANALYSTS. THIS WILL ALL LEAD UP TO THE MAIN OPEC-PLUS GATHERING, ALL 23 MINISTERS MEETING REMOTELY TO DISCUSS TOMORROW AFTERNOON'S, WHAT THEY WILL DO WITH PRODUCTION FOR JANUARY. AT THE MOMENT THE DEFAULT POSITION IS TO ADD ANOTHER 400,000 BARRELS A DAY. THERE IS A GROWING SWELL OF OPINION THEY WILL DECIDE TO PAUSE THAT FOR JANUARY, PERHAPS FOR LONGER, AND PERHAPS CONSIDER A REDUCTION IN SUPPLY. JONATHAN: UNREAL TURNAROUND. THAT POSITION WAS 15 OR $20 AGO, WHICH WAS A MONTH AGO. WE WILL CATCH UP WITH YOU LATER IN THE WEEK. COUNTING YOU DOWN TO THE OPEC MEETING. WE NEED SECTOR PRICE ACTION. WITH YOUR SECTOR PRICE ACTION, OUR STOCKS EDITOR DAVE WILSON. DAVE: ALL 11 OF THE MAIN INDUSTRY GROUPS ARE HIGHER IN EARLY TRADING. COMMODITY PRODUCERS LEADING THE WAY. ENERGY ON THE MATERIALS, WE ARE SEEING CRUDE OIL MOVE UP. THE CONSUMER DISCRETIONARY CATEGORY ARE BENEFITING FROM GAINS AMONG THE TRAVEL STOCKS. A PATTERN GOING BACK TO THANKSGIVING. DOWN FRIDAY, UP MONDAY, DOWN YESTERDAY, UP-TO-DATE. TRAVEL STOCKS HELPING THINGS ALONG. I WANT TO FOCUS ON BIG TECH, SPECIFICALLY LOOKING AT APPLE. THOSE SHARES ARE HIGHER FOR THE 12TH TIME IN THE LAST 13 DAYS. OVER THAT PERIOD OF, UP MORE THAN 13%, HELPING SUSTAIN THE CLEAR STOCK EXCHANGE IN THE FAANG PLUS INDEX. ALMOST ALL OF THOSE HIGHER TODAY. THE ONE EXCEPTION THE CHINESE SEARCH ENGINE BAIDU. APPLE IS A STANDOUT. JONATHAN: THE LEGEND, DAVE WILSON. THERE IS A BIG CONVERSATION ABOUT GETTING THE YOUNGER PEOPLE AT BANKS INTO THE OFFICE TO LEARN FROM PEOPLE WITH MORE EXPERIENCE. IT TAKES PEOPLE LIKE YOU TO BE AROUND TO DIG THEM. YOU BEEN AROUND 31 YEARS AND YOU ARE ONE OF THOSE SPECIAL PEOPLE THAT A LOT OF PEOPLE AROUND HERE LOOK UP TO AND DID LEAD ON AND LEARN FROM. I CAN TELL YOU, WE CAN MISS YOU. THIS WILL BE YOUR FINAL HIT ON THIS PROGRAM. I WANT TO SAY THANK YOU FOR EVERYTHING YOU HAVE DONE. DAVE: IT HAS BEEN A PRIVILEGE OF LAST 31 YEARS. I HAVE TRAINED A FEW JOURNALISTS AND FORMAL CLASSROOM SETTINGS, DAY-TO-DAY IN THE NEWSROOM, THAT HAS BEEN A BIG SATISFACTION FOR ME. JONATHAN: IT HAS BEEN A GREAT PRIVILEGE TO SHARE THIS NEWSROOM WITH YOU. THANK YOU FOR EVERYTHING YOU DO AND WILL CONTINUE TO DO FOR ALL OF US. DAVE WILSON, OUR STOCKS EDITOR. COMING UP, THE MARKET MOVING EVENTS YOU NEED TO BE WATCHING. FROM NEW YORK CITY, YOUR EQUITY MARKET HIGHER A LITTLE MORE THAN 1%. THE ISM AT THE TOP OF THE HOUR. SEVEN MINUTES AWAY. JONATHAN: 25 MINUTES IN, NO FIRM CONCLUSIONS. THE SESSION IS YOUNG. THE RUSTLE UP 1.6%, THE RUSSELL UP -- THE NASDAQ UP 1.1. SWITCH OF THE BOARD AND GET TO THE BOND MARKET. YIELDS WITH A BOUNCE ON THE 10 YEAR, 1.4749. KEEP AN EYE ON THE FRONT END, LIVED BY TWO BASIS POINTS. STILL SHORT OF 60 BASIS POINTS. LET'S GET TO THE TRADING DIARY. DATE TWO ON CAPITOL HILL FOR CHARIMAN POWELL AND SECRETARY YELLEN TESTIFYING BEFORE THE HOUSE. ISM MANUFACTURING AT 10:00 EASTERN. PRESIDENT BIDEN DELIVERING REMARKS AT 12:30. FED SPEAK ON THURSDAY. ANOTHER ROUND OF ADDITIONAL JOBLESS CLAIMS. WRAPPING UP THE WEEK ON FRIDAY WITH PAYROLLS FRIDAY, YOUR MEDIAN ESTIMATE IS 548,000. THANK YOU FOR CHOOSING BLOOMBERG TV. THIS IS BLOOMBERG.

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'The Open' Full Show (12/01/2021)

Jonathan Ferro highlights the market-moving news you need to know heading into the opening bell on Wall Street. Stocks rallying with strong economic data overshadowing concerns about the spread of the omicron variant and the Fed's signal to step up efforts to curb inflation. Morgan Stanley's Lisa Shalett, Academy Securities' Peter Tchir and Truist Advisory's Keith Lerner discuss the Fed dropping the "transitory" tag on inflation and China. (Source: Bloomberg)

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The only daily news program focused exclusively on technology, innovation and the future of business from San Francisco. Hosted by Emily Chang.
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