It is almost jarring. Back monday. Alongside lisa abramowicz, im jonathan ferro. Tom actually dropped me a message this morning at about 4 00 a. M. , looking at the price action and this rotation we have seen. I think its got everyones attention. Weve had a fake after head fake. Is it real this time around . Lisa every investor we speak to says buy any dip. Buy the big tex stocks on any dip whatsoever the big tech stocks on any dip whatsoever. Now people are going back into them. You have to wonder what it would take to make people truly believe in the cyclical story. It has to come from the data. Data just isnt there. Jonathan i think you have to get a lift in treasury yields. That takes Economic Data and real improvement. That is where thanks stalled in early june. Lisa i will also say the reason why tom keene was messaging you at 4 00 a. M. Is because he doesnt want to actually move up on floor. If i had to move, i would also be procrastinating. Jonathan are you joking about this . Lisa no i am not. Jonathan tom is really moving a bicycle floor. That is where he will be moving up a single floor. That is where he will be the next three days. Lets start with the equity market and get you up to speed worldwide. Equities up 0. 7 on the s p, positive 23 points. Looking good this wednesday morning. In the fx market, eurodollar 1. 1769. 0. 67 , year up to ahead of cpi in the united states. We will bring you that later this morning. Joining us now out of london, chiefbevan, ccla investment officer. Is this a head fake, or something more sustainable . James i certainly think equities will grind higher because i believe the Federal Reserve and the treasury will continue to provide liquidity, and that has got to be good news for the Quality Growth Companies that have been taking the market ever higher. However, i would have two notes of caution. One was the Market Reaction to the news from russia yesterday that they have found a vaccine for covid19. Although it was early stage, the markets initial reaction was interesting. What we saw was the big tech stocks sold off, while bank stocks rallied. It was also the case that precious metal prices dipped and yields rose. I think this is a real taste of what will happen if the covid19 crisis passes by. Equally, i worry that investors have been very undiscriminating in terms of what they have been prepared to buy in this liquidity driven melted. It is the case that we can make sensible Investment Decisions on quality stocks. If you press me for where the s p 500 might finish this year , i might ber 2800ised if we get to this year and 3800 next year. When i look at the default atumes in q2 that came in 41. 1 billion, that is in comparison to the previous record of 39. 5 billion setback in 2009. While liquidity can stop markets in a credit crunch, they cant provide companies in trouble with cash flow. Sooner or later, those companies will be found out. That is why it is so important to through into what is going on at the company level, where it is achieving sufficient revenues to provide longterm access to the capital markets. Lisa i want to stick on this idea of liquidity versus solvency, liquidity versus the recovery story. It seems to me that you believe in a further rally in equities, yet it is going to remain a liquidity story, albeit with some progress on the virus front. How much can it remain a liquidity story to sustain this type of rally . Can it just be concentrated in the big tech names with the idea that they will stay solvent through this, even if you have those bankruptcies increase . Or do you expect there to be some sort of rotation to sustain that Going Forward . James what i have found very interesting is how we people, when challenged where equity values are Going Forward, is that the price earnings multiple for the s p 500 as an index is currently over 22 times. The average since 1960, 15 times. Therefore, on that simple basis, equity markets do a substantial markdown. Forgets that argument what has happened to bond yields. Bond yields have been cratered in the way we have described. Therefore, we can justify a much higher valuation for the equity market. If one is going to think about the fair valuation of equities based on a companys return on equity, cost of equity, and growth, then the tech stocks still look reasonably good value. I dont think this is the right moment to give up on quality growth. I worry that there are plenty of people talking about companies with high operational and financial hearing benefit financial gearing benefiting from an upset. Jonathan youve raised a really important point. Lets get to the first one on benchmark valuations through history. What is the effective way of doing that . James if you are going to look at history, youve got to be very clear about which portion of history you want to look at. I would say that the really important issue is to look at the connection between bond yields and valuations, and by extension, the equity risk premium. The Forward Return to taking equity risk relative to the current bond yield. I would say there, we are still looking at equities being cheap, hence my expectation that we can get to 3500 for the end of the year. Wrong if goes horribly bond yields rise very dramatically, and there is a selloff in global treasuries. But i dont see Central Banks and governments permitting that to happen because to get rid of the real cost of the debt overhang that is now around the next of the global around the necks of the Global Economic participant, the real value of that debt is run down. For me, the longterm losers are the bondholders. The obvious longterm winners are investors in good, quality companies, so long as they buy a decent Free Cash Flow that is sustained. Jonathan lets assume they can, particularly here in the united states. Havent they just fixed to the equity gain . Doesnt that mean financials cannot work in this regime . James when i think about financials, i would say two things. One is that we should not anticipate that the treasury yield curve in the pricing of debt in the marketplace are one and the same. I am absolutely aware that there are Companies Issued debt in the marketplace, yields that look way too low for the riskiness that they represent to investors. But nevertheless, there are record deals going through in the bond markets at sensible prices, whereby banks, if they replicate those yields in loans to customers, will be able to make returns. Is that i think there will be some real winners, and yet some real losers, within the banking sector. I think the muscularity of j. P. Morgan means that they will Grow Market Share with more pricing power. They have made some very significant acquisitions in recent years, and i think they have driven the efficiency gains of those acquisitions through, of jpm. A bull james i want to move forward to talk about lisa i want to move forward to talk about the election. I remember when we were talking about trade tensions. This saturday, the u. S. And china are going to talk about the phase one trade deal. They are going to assess the progress. China is still very much behind. How much does this factor into your trading at all . Does this factor into your investment theses, or is this more smoke on both sides leading to some protracted cold war that is already in existence . James i think it is a really important point. I would say one of the reasons a globalweakness is , i would observe that people are of the view that trade tariffs simply hurt consumers because if you are a Chinese Company exporting to the states, you get your money for the product. We all know that the china government has been subsidizing exports. The loser is the consumer, who has to pay more when the tariff is applied. On the capital account front, i think that team trump recognized that china has a huge demand for global capital, huge chunks of the cash generated by u. S. Quantitative easing ended up in china. That is the reality of the credit flows to china. The u. S. Is clearly going to look at this, and i think one of the things we can observe is there has been very considerable borrowing of dollars outside of u. S. , which has depressed the value of u. S. Dollar. End to to see either an the aggravation that has been escalating between china and the decision soutright the uncertainty is removed, the dollar has room to rally. I am not in the school of thought that the dollar is one way and one way only, being down. Nor am i of the view that the renminbi has any chance of becoming the global reserve currency. Jonathan james, great to catch up. Wonderful to speak with you. Good to hear with you, sir. Coming up on this program, jeffrey wright, Eurasia Group analyst. From new york city, futures up 24 on the s p. This is bloomberg. Ritika with the first word news, im ritika gupta. Joe biden is captain khan Kamala Harris is counting on, tariffs is counting on, harris counting on Kamala Harris ties to the Africanamerican Community and progressive record. Before being elected to the senate, she was californias attorney general. China wants to discuss tiktok and we chat at upcoming trade talks with the u. S. Bloomberg has learned the chinese will bring up president on the perspective bans products. A Virtual Meeting may take place this week. Billionaire media mogul Sumner Redstone has died. He turned his fathers drivein media chain drivein theater chain into a media empire. He had been in Failing Health for some time. It is a move that will make tesla shares less expensive, splitting shares in a five for one exchange. That has a stock rising today. Tesla is up 228 this year. 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. Im rick kuchta. This is im ritika gupta. This is bloomberg. Theres no disputing that some of the actions taken by the trumpet ministration on china were long overdue. It is just back to how they are doing this. Jonathan that tension will bleed into the weakened does both sides sit down for virtual talks on the progress of a phase one trade deal. We are hearing that china wants to bring in wechat and tiktok into those conversations. For the price action this morning, positive Risk Appetite improves. Positive on the s p 500 by about 23 points, up 0. 7 . Rotation on, rotation off has been the story over the last couple of months. In the u. S. Tenyear, yields higher by three basis points. Jp morgan bid for five straight sessions coming into wednesday. This morning, up another 1. 7 . We are still down on the year by more than 25 , but certainly treasuries and the move we are seeing in the last few days giving these bank stocks a bit of a lift. Lisa jp morgan shares, without even todays rally, up about 9 in the past week. Youre seeing something similar for citigroup. The banks are ranked in order of size, and that is how big the returns are. The biggest are getting the biggest boon from the higher yield. Interesting to see how long this can last. Jonathan i imagine the last one he for hours the last 24 hours werent fair for senator warren, not the vp pick, and these bank stocks rising. Lisa i think thats fair. Jonathan lets get to jeffrey wright, Eurasia Group analyst. Kamala harris, vp pick. Does this do anything to make inroads . Think it probably helps somewhat with africanamerican democrats, who are a very important constituency for the party, but in general, President Trump is going to do all the enthusiasm for democrats. I thing as the campaign really kicks into gear, as you saw in the 2018 midterms, the negative partisanship, the feelings that trump inspires in the democratic base, i think is going to be enough motivation. So harris is really a tick to do no harm. Shes a pretty safe pick. You start with somebody who is not going to hurt you, and she certainly does that. Lisa given that she is in line with where joe biden was going, or that seems to be the party line, what does that mean in terms of the u. S. International policy . I say this ahead of trade discussions between the u. S. And china, and increasingly hardlines from President Trump that he will probably be campaigning on. Harrissi dont think selection changes much. Trump has tried to attack biden over china. For them so far because the own thing voters really care about right now is the coronavirus in the economy. With somehink comes political help for the ticket. I dont think she brings a whole lot of policy heft or changes to the place that biden was already in on policy. Biden has a very welldeveloped operation from his years in the senate and his time as Vice President , so i think her influence on Foreign Policy is probably going to be pretty small. Maybe on some domestic policy areas you see her impact. Lisa we really dont have any kind of agreement, stalemate in washington when it comes to the second round of fiscal support, even as we have an Unemployment Rate that seems to be stabilizing about that 10 rate. Do voters in general, from what you can tell come of you President Trump is doing what you can tell, view president doing what is right . Jeffrey i dont think that voters in general are paying close enough attention to understand the machinations going on in congress. I think basically, the longer they go without a deal, the more it hurts trump. It is generally a very simple equation. The incumbent is on the hook for the economy, whether that is fair or not. You can say that democrats are holding out, but ultimately, trump owns the economy, and the longer it goes without additional fiscal support, the more severe this downturn is going to be. I think regardless of who blames who for what, trump is on the hook here because hes the president. He owns the economy, for better or worse. Jonathan jonathan do you still assume we get a deal done in washington before the end of the month . Jeffrey maybe not before the end of this month. Theres a good chance now that it stretches into september, but i think theres a good chance before the government funding deadline, which provides another mechanism for congress. Jonathan what are the signposts that might change your calculation and say theres a chance we wont get a deal . Everyone we are speaking to around 1. 5s a deal trillion. What would change that for you . Trumpy i think if decides he doesnt want a deal iymore, which is possible, think that move would be against his own political interests because he really needs fiscal support for the economy right now. But we have seen him make moves in the past that were not in his own interest, and it is possible that he gets so frustrated with pelosi and schumer in the way they have tried to handle this negotiation that he walks away from it. I think that is the most plausible way that you dont get a deal. Jonathan jeffrey, great to catch up. Jeffrey wright there of Eurasia Group. Special coverage of the Democratic Convention starting monday night on Bloomberg Radio and tv, and then the Republican Convention kicking off. Full coverage of that as well. We just cant get round the table and have a conversation, never mind striking a deal down on capitol hill. Lisa wall street expect a deal. I am trying to understand. People are saying there is going to be a deal. A deal in september is not the same thing as a deal in two weeks. Ainre is a material p the longer this goes on. Markets will start pricing and even a late deal, which will have economic consequences. This is a new wants, but it is an important one. Jonathan maybe it needs to show up in the Economic Data, but i dont see any sign of this and the equity market at the moment whatsoever. The president made his announcement over the weekend. You might have expected a little bit of chaos on capitol hill. Didnt really happen. The issue is, how do you even quantify how much more economic damages done each week that goes by . Jonathan i think kathy jones of Charles Schwab put it nicely. The policy mistake is being made. The deadline was effectively the end of july, and here we are in august. Lisa people are saying the Federal Reserve is going to come in and just do more if the federal policymakers do less, fiscal policy doesnt come in. That seems to be the best we are seeing, with some of the higherquality names continuing to rally. Jonathan coming up on this program, anna han, wells fargo equity strategist, and Michael Mckee on the Economic Data. U. S. Cpi and around 40 minutes. We will bring you the data live. Equity futures up on the s p 500 0. 7 . This is bloomberg surveillance. ,onathan from new york city this is bloomberg surveillance. We are live on bloomberg tv and radio. Tom keene is away. He will be back on monday. Alongside lisa abramowicz, im jonathan ferro. With your Economic Data in united states, here is Michael Mckee. Michael we are looking at Consumer Price index. It comes in double what had been anticipated. Up. 6 . That is performance similar to the ppi yesterday. Excluding food and energy, also a. 6 rise. We were only expecting a. 2 rise. Pushes the yearoveryear number to 1 . That is up from. 6. A significant jump in the last month. The rate goes up to 1. 6 . A significant increase over the past month. Taking a look at the breakdown of some of the numbers, the gasoline index accounted for a quarter of the monthly increase 2. 5 e headline number, up for energy itself. Gasoline up 5. 6 . Food decreased. 4 . Food at home down 1. 1 . Reflecting the fact more people were able to go out for lunch and dinner to restaurants. The other number Everyone Wants to watch is housing. The primary residence index, which is the cpi equivalent of homeownership, up. 2 . We had a string of. 3 gains. It does suggest home prices may be falling, at least the price increase is being arrested. We are seeing that in the new york area. It may mean combined with lower Mortgage Rates we will see a lot more housing activity. We saw the Mortgage BankersAssociation Numbers jump this morning as we hit record lows on Mortgage Rates. It looks like we are not going to see a major increase in inflation, but we are seeing it move quickly and that is one reason we are seeing breakevens on the five and 10 year note rise quickly. We are seeing fiveyear breakevens, and hopefully we have the chart. They are up significantly compared to where inflation is. There is a debate in the markets about whether this reflects the fed pinning the short end, or whether people are believing we will get an outbreak of inflation. Jonathan stay close. Looking at equities. A delayed reaction. We rollover a little bit. Still positive 19 points on the s p 500. In the bond market, treasury yields with the lift going into the number, lift coming up, up almost five basis points on the 10 year 2. 69 . Even the two your guilt with smaller moves that is your twoyear even the twoyear yield with smaller moves. The euro up. People will take this report and go what you did, go through the individual components, and then asked what is sustainable, what is oneoff, what lasts, what lives with us . How would you respond to those questions . Michael it looks like we are getting back to a little bit more normal given the fact the economy has opened up. You see a rise in usedcar car trucks and prices. That was a significant increase. One of the outliers in this report other than gasoline and reflects the idea people are buying again, but not buying new cars at the same rate because the economy is running more slowly. When you look at the Interest Rate reaction, i am looking at the fiveyear breaking the 50 day moving average. You are seeing people repricing for more normal. The question is do they believe this continues and we run into supply shortages down the road that will keep prices rising, or are we just normalizing after unusual weakness . Lisa the 10 year yield also breaking out, close to. 69 . I find it interesting you have yields rising and you have stocks selling off, giving up some of the gains in premarket trading. Does this indicate a stagflationary bet where people are saying high prices will reduce the buying power of consumers, not necessarily indicate faster growth ahead, or does this indicate the economy is recovering in a meaningful way that will benefit the average consumer . Michael it is hard to tell from one months data, but the anecdotal information is the economy is running more slowly than it was in early june. It will be an open question on wall street until we get more specific data. Retail sales coming up. That will be important in wall mind to see whether this is an indication of stronger growth or whether there might be stagflation down the road. We have not had that since 1970s, im not sure if is coming back, but it will be a question for investors was we wait to see how the growth side comes out. Jonathan michael will be back with us later this morning to pour through the Economic Data. Lets get to the price action. A little under one hour away from the opening bell with equity futures up 22. In the fx market, the dollar weaker against the euro. There is your treasury move almostyields higher to. 69 . Closeuesday, we had a north of 50 basis points. Quite an unwind in the treasury market. Not just nominal yield, real yields, too with the lift this wednesday morning. Lets continue the conversation with anna han, Wells Fargo Securities equity strategist. Lets start with a simple one. I wonder whether we are overestimating europes recovery and underestimating what is happening in the united states. What is your take . Anna we saw europe be one of the first areas to fall with the covid crisis. We are of the believe that first in, first out. What they do not have was the size and depth of the monetary and fiscal stimulus we have had in the states. While they are progressing, if you want to put in, it is difficult to say who is the front runner. Delayedwdy price in a second fiscal support deal in washington, d. C. We are not getting one this week and it is unclear it went and democrats will get together . Anna we missed the deadline before the summer recess started. We know we have another deficit plan due at the end of september. As we get closer to the u. S. Election, it will become a big indicator of how the economy will go forward and what things will shake out for equities. Lisa what data to give you confidence there is a continuing recovery and not a stalling out a lot of people were talking about when looking at the High Frequency data . Anna you have to acknowledge we are seeing some stalling. Slower, but we are seeing far from a reversal. As we get the sequentially improved story in indicators like in earnings, or even with , still muchfidence better than we were in the winter. Those are the signs things are progressing slowly but surely. Jonathan are you comfortable embracing cyclicality . Anna we do think cyclicality, in particular with the covid data, will be the winning play longerterm. That is not to say this melt up does not have us more cautious than usual. Jonathan what are the cyclical parts of this equity market you would be uncomfortable with . Break it down sector to sector if you can. Anna when you dig in sector to sector, when you think about cyclicality and where value may be uncomfortable is where is the trap . Where are the areas of the market that look like they are cheap but will not have the multiple expansion as rapidly and as easily as you would expect. Are in a financials market. Jonathan the financials, the bank, and low yield which will be here with us for a long time. Anna, great to catch up with you. Anna han, wells fargo equity strategist. Inflation coming in hotter than expected on cpi. This is what it does for the market. Pointsare up four basis 2. 68 . In foreign exchange, the euro firmer. 1. 1787. Lar up to equity futures up. 8 , positive 26 points. James bevan of ccla likes jp morgan, the stop is down 25 yeartodate, but we have had a lift over the last five days and the why is in the bond market. Lisa it is in the bond market given the fact that there is no alternative. I am looking at the inflationadjusted data. It looks like real yields are going lower than where they were earlier today. Im trying to understand how people look at this inflation data and decide whether it is a good sign, whether it means it is good for the economy and whether it is a bad sign and means purchasing power is declining. That is a key struggle underpinning the data. Are we seeing a stabilization in an economy that is still highly injured, or are we seeing Something Back towards something more normal. Jonathan it is good that people are spending. If the supply shock, i would argue that is bad news. Especially when we do not have support on the physical level. A much bigger effort in washington, d. C. I take your point, whether we have already made the policy mistake in washington. You can characterize whether you think it is a policy mistake or not. Maybe you think it is the right thing. What we can all agree on is it will have consequences. Look at the gdp print out of the u. K. An ugly quarter. Quarter on quarter, 20 . 20 for the second quarter. The implement rate is 3. 9 . Why . There is unprecedented fiscal support paying people to stayathome in a furlough program. That Program Expires in october. What the u. K. Offers is a case study at how you can carry on supporting people home when they cannot get a job. What you will see in the next few months as the fiscal support comes off as the consequences in the Economic Data. Lisa this is a strange recession and im struck by the calm before the storm that seems to be underpinning the commentary. Moodys put out a report talking about how delinquencies in Consumer Debt has come down yearoveryear and how they expect a rapid increase in delinquencies Going Forward as some of the government stimulus comes off. That is the unknown, and that is why we have seen such a big built of money put aside by big banks. Jonathan coming up on the program, looking forward to catching up with angelo zino. In your market, we are positive. 8 on the s p 500. From new york, on Bloomberg Radio and bloomberg tv, this is bloomberg surveillance. Ritika joe biden and Kamala Harris will appear together in a virtual fundraiser today. It is their first appearance since the democratic president ial candidate made the california senator his running mate. Harris is the first black woman and first asianamerican on a major Party President ial ticket. State officials concerned about slower than normal mail delivery are extending mailin ballot deadlines. They are also making backup plans to smooth early voting in the weeks before the election. Experts warn tens of thousands of ballots might be thrown out. The postmaster general appointed by President Trump is being blamed for slower service. The Postal Service says it is working with election officials. He stimulus stalemate drags on the principles in the negotiations to get a virus relief package have not spoken since friday. The white house is democrats must reduce their demand for Unemployment Insurance and aid to state and local government. Mcgrath say republicans must put another 1 trillion on the table democrats say republicans must put another 1 trillion on the table in addition to their conditional offer. Moderna will supply 100 million doses of its initial vaccine in an agreement. The company is already getting 955 million in government aid to test the vaccine. Billionaire Sumner Redstone has died. He was a Movie Theater operator who became a media mogul late in life by buying viacom, paramount pictures, and cbs. He controlled his assets through his closely held national amusements. Ownership of the company will pass to a family trust. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. I am ritika gupta. This is bloomberg. This is now lifeanddeath. We are talking about the lapse alreadyits that is triggering food insecurity, homelessness, and it will not be anytime soon. Swonk speaking to us in last when he for hours. Coming up, looking forward to speaking with priya misra on a five day selloff on the treasury market. Lisa she is the perfect person to talk to, also about the incredible amount of supply from the u. S. Treasury with another 10 year note sale. I will be looking forward to listening to that interview. Right now i want to shift after the bell. We will be getting earnings from lyft following the worse than expected earnings from hoover. Joining us to talk about it is angelo from uber. Joining us to talk about it is angelo zino. Angelo thanks for having me. As far as lyft is concerned, we will be looking at three things. Claritye trajectory or on the rideshare and recovery within the u. S. Most people are aware lyft more leveraged to the u. S. Relative to uber. Any kind of clarity on that side of things would be helpful given what we have heard from uber last week. It seems like a trajectory still noy low, and i would say longer expecting a hockey stick type recovery in that market. Second, looking at what type of improvements they are making. If we can see any type of clarity in terms of profitability in the future, that clearly is what investors care most about. If we can get any type of clarity on that side of things i think that will be important. Finally, commentary about the gig economy. In california, some Important News coming out. All eyes this fall with the election and proposition 22. Any commentary they have on that side of things will be critical in terms of the performance of the shares. Lisa that is a lot. Lets unpack. I want to start more broadly with the ridesharing industry. We have seen turmoil as a result of covid, question of whether the drivers will be safe, whether riders will be safe. How much does this pandemic fundamentally change the outlook for the sharing economy in general and the ridesharing industry more specifically . Angelo a lot of people are underestimating the potential longterm permanent implications this will have on the overall industry. The fact there will be a lot more people working from home. In terms of the airport traffic, which is definitely a highermargin type of business, we think that eventually recovers in 2021. 10 or 15 of their revenue. As far as the work from home longterm somek of the numbers we saw in terms of ridesharing market, longerterm, 75 to 80 of the numbers you have seen in recent peak quarters. That is going to have a longstanding impact on what the potential is for profitability. Lisa why do you have a buy rating on uber . Angelo we think investors are underestimating the potential in terms of the eats side of things. We think the acquisition of corner shop and the postmates will help in terms of that side. If anyone is looking to play a recovery on the ridesharing side of things, i think uber provides some sort of cushion in case things were to not evolve the way they were supposed to. The actual potential longterm for uber plus the actual valuation along with the cash balance, they will be able to navigate the storm very well. I would also say that we will look at projected downturns like this. Often the strong get stronger and the week get weaker. Get weaker. This will have a negative effect on lyft coat lisa where you see shares going . , we seein terms of uber a gradual recovery. We think the shares could gravitate towards 36 per share. Proposition 22 will have a major impact in terms of the outlook on both companies. We will wait and see on that. Lisa that is where i wanted to go. The Regulatory Court ordered california that all ridehailing companies reclassify their drivers as employees. What is the fundamental effect of this ruling . Angelo it remains to be seen. Day,ink at the end of the if proposition 22 does not come to pass, eventually if uber and to treatforced california drivers as employees, ultimately we think uber and lyft will look to pass a lot of those higher costs to the consumer. That will result in less employee drivers, it reduces the supply of the network, and that affects the revenue of these companies. We think it will be a loss, not only for the companies, but for a lot of jobs. People look atf the implications, but it is definitely a negative in terms of not only the cost side of things, but also the revenue potential. Concerned,ber is less than 10 of the revenue goes into california. That is a nice hedge relative to lyft, where we think over 20 of the revenue is going into california. Lisa just to finish up, i wonder if you ever think that Meal Delivery will be a profitable business given the promise and the fact that it did to the liver it did contribute to ubers bottom line. Angelo we do. We are a lot more bullish about uber eats today than a few quarters ago. The pandemic has had huge implications from that side of things. I think they have also been able to look at the potential opportunities in terms of Grocery Shopping and other ways on the eats side of things. We remain optimistic on the eats business and as we look over the next 24 months, i think we have a potential for adjusted ebitda profitability on our side of things. Lisa angelo zino, thank you so much for being with us. We are expecting the lyft earnings after the bell. In the are seeing markets following the bigger than expected inflation rate, the Consumer Price index rising. 6 . We are seeing an interesting rotation back to the cyclical trade, with s p futures outperforming the nasdaq. We see a lift to treasury yields continuing the trend ahead of the 38 billion auction of u. S. 10 year treasuries later today. Gold now up after yesterday having its worst selloff since april 2013. ,oming up, Eric RosengrantFederal Reserve bank of boston president. From new york, this is bloomberg. Jonathan from new york city for our viewers worldwide, good morning, good morning. The countdown to the open starts right now. Up 25 on the s p. We begin with the big issue. Investors facing a familiar question, whether to leave the big e market behind and embrace the cyclical losers. Patrick armstrong saying state defensive. Prefer growth over cyclical companies. Cyclical companies have had a big rebound, but i think the longterm Winning Strategy remains the year to date winners. Harvey of wells fargo embracing cyclicality. Chris if you look at a lot of cyclicals they are all too national. If you look at valuation and balance sheets, they are very good. The things that are contrary opportunities, the things that are tied to the economy are the things mispriced at this juncture. Jonathan