>> inflation has been more stubborn than expected. >> inflation is an insidious thing. in the second half of the year we see the rate cuts happen. >> the market seems content to price in energy rate cut, may be

the real departure point for normalization is july but later prayed >> the fed will be slow to lower interest rates. >> we are seeing the market fundamentally reassess the outlook for fed cuts for this year. >> this is bloomberg surveillance with jonathan ferro, lisa abramowicz and annmarie hordern. >> the first message i received in the commercial break, i'm going back to bed. which i had a feeling some people would have that feeling. and massive week ahead. a recipe for a big week. nvidia, the investors conference later this morning and a sprinkle of central bank decisions. >> i can't get past this, capitalism will eat itself and all these interesting things. >> becoming more dependent on the state for handouts. lisa: this is the reason why

some of these big structural changes matter. the fed and the boj, the central bank decisions are they losing the plot, are they losing the narrative, are they losing the economic trajectory being transformed by other factors including some technological shifts that will lead to perhaps capitalism eating itself. jonathan: the federal reserve losing the plot? not yet. has the market, possibly? the fed was looking for three interest rate cuts this year. we've had to take the bulk of that out and do it really quickly in the space of a couple of months. is it too early to change things of the federal reserve? we get a few more months like we've seen, upside surprises, you think you'll start to hear a different message coming out of chairman powell. chairman powell was looking for more confluence about the disinflationary trend. clearly uncomfortable in the news conference at the end of

january to say with conviction the disinflationary trends will continue. the threat to that has been what's been happening and that tailwind is trying to pass. whether they talk about that openly in public quite so much remains to be seen. lisa: the concern about not having some larger thesis and when you're so data dependent the data is noisy and messy we get so much of it it's hard to know which to pick. how do you give the market a sense of forward guidance when you are saying we don't know. how do you get out of these things rather than just be subject to the whims -- the winds in different places. fundamentally a policy shift at the world's most important central bank. jonathan: i don't think they're going to help them this week. they are almost constrained by that because they told us to look at them and then it's not important i say the median.

implies three cuts because that's all they're really doing. each individual has the right view on that ultimately. in the best case scenario for them going forward if they do this piece by piece we might be getting closer to reducing interest rates. i would go back to the fed, the conditions today cut interest rates and then talk about the next decision further down the road. we had the aggressive transparency of central banks. we expect them to offer us this roadmap not for the next few months but the next 24 months, we want to know where the rates are now. ultimately where the think the neutral rate is. lisa: they don't. >> think about where we are now. they have rates up to 5.5%. inflation surprising to the upside a little bit. we've seen disinflation. how can they say we are significant restrictive. lisa: this is the question.

if they don't have any clue and they are not necessarily going to be able to guide because they don't have a crystal ball and they don't know what the rate is. let's say they cut once, we heard from the ceo of barclays usually when you start you start. how did they communicate that, how do they know that. and when to the financial conditions become a tool for that transmission. if jay powell says this is absolutely going to move the opposite direction and keep us higher for longer. stocks are going to take a hit. they just aren't necessarily going to execute that right now. i thought that was perfect. >> equities on the s&p. positive by 0.8% on the s&p 500. in the bond market yields just aggressively high through last week. still 430 on the 10 year. coming up this hour, monica descends on where she thinks

stocks have to run. isaac bolt and ski on tariffs for chinese ev's. in the former fed economist claudia looking ahead to wednesdays bankrate -- fed rate decision. the stock market hitting ahead of the decision. monica saying we need to acknowledge the strong start to the year with the s&p 500 not only a few percent away from the 2024 price target but also arguing for more selectivity and being thoughtful if you're still sitting on too much cash. we believe stocks will make new highs. monica joins us in new york. good morning to you. new highs in this equity market. talk to me about how you put cash to work? monica: the challenge has been certainty. the fed is never good to tell us what the path will look like so the challenge becomes what do i do, do i wait for certainty. anyone who tried that has missed out. we've advocated to clients just

look at what we can see, earnings reflecting. the other 493 down last year. we have a modest inflationary environment probably some cuts at some point. i don't think it needs another 25% rally but is the path to saying 5% or 6% from here. jonathan: how would you play that? is there a sector preference in any way shape or form? monica: we will see the broadening you have to go outside the magnificent seven. i think it depends where you are starting from. if you don't have enough equity buying abroad, if your over levered to tech and that's when you start looking to things i midcap, valuations are significantly lower. lisa: i was looking at your notes and it was amazing because there is this call from all different financial advisors saying get out of cash, rotate out you are going to miss out.

we talked like keeping a buffer. what is the buffer? >> it depends on what your goals are. you have to just have a plan. cash is felt good. i've seen balances go 20 or 30% plus in the portfolio. it comes down to what is my plan trying to work towards a 10% buffer? i would also argue you look at what the market is giving you. if you are really that scared of going into equities and risk assets i would say to plato in and by protection. spend a little bit of that cash. just to keep you invested. >> the winners have one a lot. the losers haven't gone anywhere. you start looking at the winners. do you pile on or do you sort of say there's more downside risk here. >> we did see some rotation out of japan into areas that looked

cheap like china. i got that, but if you are heavily leveraged to the u.s. from a risk asset standpoint in japan has been on invested in for a decade, we need to dip in is a longer-term bet. i do think there's a reason to own japan. 25% under one times book value which seems kind of crazy. you of policy shifts coming, that doesn't happen overnight. >> we've been trying to work out what happens to japanese equities if you don't get this moving the yen. we've had five days of weakness going into this decision. just a little bit of scenario analysis what would happen going from 130, 120. where does that leave equities? monica: clearly a more challenging backdrop. some clients trying to hedge out the currency exposure. again i think that's why the

japan call can be a one month or two month trade. we have to say intermediate to longer-term and i think japan looks relatively more interesting. lisa: taking a step back on whether there's a shift going on under the surface. we saw this with commodity stocks outperforming dramatically and it makes me wonder whether we are at the precipice of re-inflating of goods and whether you see that from the increase in activity met only in japan but on some degree the margins of china and the rest of the world. do you lean into that or do you see that is something that has a self-limiting aspect to it? monica: we think you could see brent mid 80's to low 90's. it does suggest a bit higher from here and probably supported for energy equities. that was the one sector that did not do well. i think you could see some rebalancing, there's always this struggle for people who want to get on board with the ev

revolution and you realize we still need oil in the near to intermediate term especially as we figure out what that transition looks like. borrowing some big geopolitical shock. from an inflationary standpoint it's good to be a less of a risk. lisa: i'm wanting to know your take on the point made earlier, kicking off the show with this theme where he thinks nvidia's conference is good to be more important than jay powell's speech. do you think that's true, especially in some ways the fed can tell us all that much because they don't have a crystal ball. monica: it's probably true for the fed this week. you would see some rotation out of some of these names that are so heavily owned. i think they'll be pretty positive. you'll hopefully hear some commentary about how this is not just a media story, it's a broad story for the s&p, i know us a jp morgan, it's a huge part of

our conversations and how we can become better people eyes are dutch advisors and more efficient. -- advisors and more efficient. we will still be here next week. >> good to see you. monica descends out. looking for the winners in the losers in the s&p 500. super micro computer up year-to-date. nvidia up, bottom of the pile tesla and bowing. two stocks in a bad place this year. >> bowing it's one catastrophe after another and tesla because there's a real change in the idea around electric vehicles. did you read about the ceo who left after the disaster, i was reading about the resale value of electric vehicles. it's very minimal. the battery only exists for

eight years. so if it's only eight years a mess the bulk of the value in the car you have to replace it. you don't get the same resale values with an engine and parts, this to me is a significant issue. >> no confidence around battery degradation at all trying to work out what that secondary market should be. found the weekend really frustrating. i was thinking back to how the media cover the former president before and it always annoyed me and they repeated it again this weekend. the comments about a possible bloodbath of the former president didn't win this election. you always have to mention the context under which those comments were made. it's not for me to tell you how you should view it. what annoyed me was not only the absence of any mention of the auto industry but the failure to respond to the policy being mentioned in the address by the president -- the former president, talking about up to

hundred percent tariff on automakers out of china in mexico. so you have to start thinking about the potential for that policy to become real and not just stay there but may be spreading. the week just totally failing to focus on the policy and just go with the click bait of the headline and just gave me a sense we could repeat the same mistakes we made last time around covering this president. lisa: you know how i feel. i completely agree with you. let's talk about the policy, why are we focusing on the noise and the theater of it, let's move on. lisa: just -- jonathan: the headline here was the potential 100% tariff and then the other stuff. that's how you should do it. equities right now on the s&p 500 above 0.8%. here's your bloomberg brief with dani burger. dani: president biden preparing

the toughest ever pollution limits on american cars to accelerate ev sales. the epa will finalize the limits in the coming days. that will help the u.s.-made to paris climate agreement commitments. it's a political balancing act. biden is trying to court voters in the swing state of michigan including autoworkers are often uneasy about the quick transition to ev. apple is in talks to run google's gemini ai into the iphone. the company's are in negotiations to let apple license gemini. for years google has paid apple billions of dollars to let it be the default search engine on it safari web browser. the coco rally shows no signs of slowing, it's doubled in less than three months and is trading at a record hybrid west african crops have been battered by diseases and extreme weather. the rally accelerating ahead of easter. now the price search is starting to bite at the grocer store.

that's your bloomberg brief. jonathan: trump doubling down on chinese tariffs. >> we are good to put a 100% tariff on every single car but comes across the line. they are knocking to be able to sell those. if i get elected. if i don't it's good to be a bloodbath. that's good to be the least of it. jonathan: live from new york city, good morning. ♪

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jonathan: just you and me this week. tite took a week off, gone on vacation. amh is threatening to take the whole week off. lisa: they are all leaving us. jonathan: skipping the fed meeting apparently. session highs this morning, this monday morning. after some very mild losses last week down about 0.1%. the bond market yields just about unchanged. under surveillance this morning, trump doubling down on chinese tariffs. >> if you are listening president xi, he understands the way ideal prayed we will but a 100% tariff on every single car that comes across the line and

you are knocking to be able to sell. if i get elected. if i don't get elected it's good to be a bloodbath -- that's good to be the least of it. it's good to be a bloodbath of the country. jonathan: the republican nominee threatening to slap a 100% tariff on mexican made chinese ev's if he wins in november. the director of policy research, isaac before we get into how this would work in practice, talk abut how this is playing in detroit, michigan. >> i think we need to understand this is a very long general election. it will be the longest general election ever, we still of 231 days of this left. i think we need to understand why the former president was saying what he said. this was to play in ohio and michigan. going through the local papers in michigan and ohio which is

what we do, it's playing pretty well in michigan. i think one of the things we will see in the next few months is both of these candidates trying to go after union workers. so this trump commentary on 100% tariff on ev's this is something meant to play for the manufacturing base in michigan and ohio. it's the same reason you seen president biden change his tone and become more aggressive on the u.s. steel. these are all politically motivated dynamics. you can have real market innovations. >> it look at their going at things slightly differently. at the moment the administration looking at the suppose a national security threat. the president saying -- the former president saying we will put 100% tariff even if they are made at the border in mexico. can you tell me how that would work in practice? can they basically discriminate against one manufacturer from

one country in mexico? >> there are always hurdles here and there is a chasm between rhetoric from the campaign trail and the reality of implement and policy but cutting through the noise i caution clients doing anything takes a while you've got to expect you have six to nine months back and forth before anything tangible went into place. but the simple answer is yes the president has wide authority on the powers to implement tariffs that would accomplish this goal in practice. of course you cannot do this where you have a singular pushback on the tariff side you would have to create a broader framing and broader status work. all of that can be done so we have to take seriously these threats where he can do many of the things he's implementing even though it's can it take a little bit of time from when and if he gets behind the resolute desk again.

lisa: wasn't it lori who said it's like staring at the sun. but essentially you mentioned this before this election cycle is like staring at the sun. it has significant implications and its blinding in their ability to respond to it. how seriously are your clients taking concepts like this? the idea of 100% tariff by someone who could potentially get the power to do that. >> there is still some disbelief that it's going to be biden versus trump to begin with. and then there is the outright dismissal of the tariffs, i think a vast majority of clients are focusing on what trump would mean for a deregulatory perspective. for health care, they are just pushing aside the risk for the tariffs. i think this is in part because of what we saw last time. the first two years of the trump

administration is focused on tax cuts. it was all of the good for the market. and then we began focusing on tariffs. this time will be different. tariffs will be a day one focus and that something trying to push across in terms of understanding what will happen if trump is the winner of this election. i think the market has to come to terms with what that means not just geopolitically but for supply chains. >> one thing that ken rogoff of harvard said, was that both trump and biden were incredibly protectionist presidents. some of the most ever. has that been accurately priced in? the fact that both are likely to have pretty protectionist policies? >> the simple answer is i don't think the market is prepared for each one of these candidates to try and out china hawk the other. again we have 230 plus days of

this to go and we will have a fair amount of trading action in particular. i don't think the market is prepared for that. i don't think they are prepared for what's important here which is former president trump going after the on shoring and near shoring themes that we've seen over the past few years. he's going after -- this could also lead to cooler relations with taiwan, cooler relations with canada. there's a myriad implications. the markets looking past in part because they are not sure it still can be biden versus trump, and they think trump is just talking on the campaign trail to get votes and immediately dismiss these policy goals when he's in the white house because of their inflationary and economic impact. i'm not sold on that. jonathan: wonderful to catch up with you. content and sequencing. going back to the first term of the former president. isaac was talking about this. the focus was on tax cuts and

then later on in the term the back half was focused on the trade war. the focus this time around is good to be on tariffs almost from day one based on the campaign is going. lisa: he's saying people are just saying it's campaign rhetoric and are these even to be the candidates. there are people still doubting that. jonathan: struggling to move on from that, of are the candidates we have right now. coming up, the brilliant claudia just around the corner. ♪

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jonathan: quite a start to the week, equities all-time highs and possibly again, positive by 0.8% on the s&p 500, nasdaq up by 1.2%, taking back some losses from the last couple of weeks. we were only down by 0.1% last week and something like a quarter of 1% the week before. lisa: does that even count as a dip, down less than 1% over two weeks? the biggest weekly fall of the year, but this is viable. jonathan: equities up, up, and away in the face of weak pricing in the bond market. 10-year back into the 4.30%'s,

both those yields higher last week by more than 20 basis points off the back of hotter than expected cpi data, backed up by an upside surprise on ppi. lisa: no one is talking about retail sales, and if they are, they are talking about them not being so bad. and when do we start seeing this narrative shift on the margins away from yields are just rising for the right reasons? which is growth. at what point does it become, yields are rising because inflation is still too sick even as growth accelerates? that has gotten thrown out. donovan popped retail sales -- jonathan: two months ago, retail sales spoke to that. two months ago. lisa: and some of the credit card data out of some of the banks, it is not conclusive. this has been a maddening cycle for anyone who wants definitive trades with convictions. this is not the time you're going to get them. this is where we are, and the fed will probably reflect that

wednesday. jonathan: dollar-yen 1.49. someone tell the japanese yen it is a historic meeting tomorrow. we have seen mild yen weakness over the last five sessions. still basically in and around 1.50, going into potentially the first interest rate hike in 17 years. lisa: you can feel the frustration of all fx strategists saying wake up, do something. this will be a massive move, yet nothing. all of these moves are coming after great expectations for so long that people have baked it in. i am struck by how much we are seeing stasis in the euro versus the dollar. these are going to be long-term shifts, but right now, is anything changes with -- changing relative to expectations? jonathan: not much. israeli prime minister benjamin

netanyahu coming back at senator chuck schumer. pm netanyahu: what he said is inappropriate. it is inappropriate to go to a sister democracy and fight or replace the elected leadership there. we are not a banana republic. jonathan: schumer call for elections to remove the current israeli government, labeling netanyahu an "obstacle to peace." netanyahu saying that another ground offensive in rough is the only way to eliminate remaining hamas brigades -- in raffa is the only way to eliminate remaining hamas brigades. it is unclear as to what happens if netanyahu is hell bent on crossing it. lisa: what is unclear is how much this rhetoric is coming as a plea to those in the democratic party who say we know, we are on it, we want to

distance ourselves from this conflict to some degree. that is going to be one of the hardest parts over the next couple of weeks, how much do you distance policy from politics when it comes to rhetoric coming out from schumer, from biden, and we were just hearing with respect to the former president trump and what he said about tariffs? jonathan: the rhetoric has shifted big-time. next story, apple and alphabet considering until, but what about google+ gemini ai to power new iphone features? there is a plan to let apple licensed gemini ai models for new capabilities as soon as this year, which would build on apple and google's years long proprietorship of the safari search engine. the potentially blockbuster a ideal threatens to draw more antitrust scrutiny. we started with this story, talked about three dimensions to this. antitrust.

how much apple is behind given they need a partnership with google. and the potential that you adopt some of this technology, these advancements come as early as september and put it in a new phone. some of us have been sitting on the sidelines waiting for new iphone worth upgrading to come and this could be the year. lisa: they are not as far along as people previously thought, looking at that, they shifted their staff that had been devoted to the apple card to the ai initiative. is there a race to get to the september finish line in tandem with samsung? samsung will unveil something around the same time with artificial intelligence. is there some sort of imperative to have that kind of timeline and not have the apple luxury of waiting and then just doing it better? to me, that is the signal here that is significant. jonathan: what is the risk that i or others go to samsung or that we do not upgrade at all if

they do not do that? both? lisa: i would argue both. if there really is transformative technology that somehow makes it a different experience, then why wouldn't people go to the samsung? why wouldn't they gain market share that apple cannot afford to when iphone still is the bread-and-butter of the organization? jonathan: because the ecosystem is so sticky. can you imagine the pain of switching to something else? lisa: i have family members against the forest ecosystem and they bow out -- the forced ecosystem and they bow out and they move to samsung, and the texts are so irritating. jonathan: fomc expected to hold rates steady wednesday and maybe first cut potentially in june. investors looking at the so-called dot plot. jay powell saying earlier this month of the central bank is not far from an initial cut as it

looks for a bit more evidence inflation is moving towards 2%. former fed columnist claudia sahm joins us. wonderful to catch up with the peer you said maybe a chance for chairman powell this week to make sure everyone stays around the three implied in the median dot. start with the dots. when can we, and how can we, get away from this? claudia: it is hopeless at this point. everyone wants some scrap of certainty, and they look at the fed and have a misguided belief that the fed is going to give that to us. the fed would like a scrap of certainty about what they're going to do later this year. my hope for this meeting, it is the most boring meeting ever with traders falling asleep at their desk. we know they are not going to cut this week, and we better not see anything material change on that summary of economic projections, in particular, are we looking at likely three cuts or two cuts? jay is absolutely -- my reading

of what he has said, he is a let's cut in june. he has go to keep it together. if those dots move towards july, which i think that is not likely, or the longer an estimate of where the rates should be, the infamous r star, either of those could get people antsy and push the successions to july. lisa: i am a long-standing hater of the dot plot. i love the way you write. i am curious whether you think it is a liability than the federal reserve is not operating on some sort of overarching thesis of where the economy is right now, whether it is a hotter and higher inflation regime or if it is going to revert back to something more pre-pandemic? claudia: my expectations on what the fed is on track to do did not change last week. we had a second disappointing read on inflation. we also have the second disappointing read on retail sales. and powell has talked about the

risk of the two sides of the mandate, those risks are coming into balance. and we saw that last week. nailed the balance of, yeah, inflation s been not so good -- clearly from february, it looks like a fluke, and those retail sales were not good numbers. i did consumer spending at the fed. those are not good numbers. that should maintain the critical coming into balance. lisa: wire those not good numbers? -- why are those not good numbers? why is that important? we heard this morning that it was not that bad, it deceleration but still quite a bit of spending and you can tell balance sheets are not terrible. why aren't they terrible? claudia: in terms of the retail sales, these were declines, not good numbers. yes, it deceleration is what we were looking for, but we know if website is the acceleration worries on inflation.

it is kind of like the snowball. it is a big economy and takes work to get it going, then you could end up with a really big snowball that is crushing us and bringing down the economy. so once you start going in a direction, there is a danger that you build up speed in that direction for the economy, for the spending side, that would be contraction in spending, a recession if we get there. on the inflation side, if that not just sticks but gets going, that is a big problem, too. so they have the potential for two big problems, which speaks to don't do anything. jonathan: i would love your thoughts on inflation. cpi print relative to expectations, likewise on ppi. were there components of that they gave you encouragement or maybe even made you uncomfortable about the path ahead? what were you focus on? claudia: encouragement,

we saw in january a pullback, so the piece that was important in cpi and pce, that was something flukey in all likelihood. the discouraging part is what we have gotten into in the core services outside of shelter, the super court, the stickies part is motor vehicle insurance, and the homeowners insurance is in there, too. that is not about the fed. motor vehicle is a knock on effect of the used car prices, prices high and making up for repair costs. there is not relief on the horizon for that piece until later in the year. that is an unfortunate part of inflation for us to latch onto, the fed to wait on, yet it is in their. it is making a contribution. it ain't going away for a little while. jonathan: you know the innerworkings of the federal

reserve more than most. how do you think they will deal with that around the table this week, and how will the chairman address it in the news conference? claudia: the goal and the news conferences to get markets to stay where they are. and the rare moment where the fed is lined up with markets, this june cut, it is forcing a balance of risk. if we do not see retail sales mentioned in the statement, then that is a sign they have gotten more hawkish. there are all these details under insurance, that is wonky. yet, it gives talks -- if you look at the top line, it gives them coverage to push out to july. i think they are going to win. july is my baseline. so it is the messaging, but the fed knows better. they know what is under their hood. it is a question of, can they look past it or are they going to get antsy like sometimes they do? jonathan: claudia, you are one of the best.

thanks for being with us. claudia sahm there on the federal reserve. looking at the data from last week, it is not how we wanted them to look at it, it is how they actually look at it. lisa: and it matters all along what the comps are showing and how much, sticky inflation or not. i since frustration from everybody, feels like a very frustrated morning. just me? jonathan: is it still q1? lisa: [laughs] i get the sense people want certainty and they are not getting it and feeling frustrated. jonathan: looking at markets, i was just thinking, i cannot believe it is still q1. seriously. feels sort of deep into the second quarter already. to your point on the election, it is eight months away. lisa: so how are we going to evolve this considering it will be literally the same story, yes, still the same candidates running. jonathan: and we will share what

was published, despite stronger core inflation, we do not expect a significantly hawkish fomc meeting wednesday, base case indicating 75 basis points of cuts this year. even if we are wrong and they imply 50 basis, jay powell is likely to devilishly emphasize the fed is on track to cut rates this year due to sub 3% year on year core pce inflation and even if activity holds up. that is the view, that even though the data has changed somewhat, chairman powell has not. lisa: they want a cut. bottom line is they want to move, and as claudia sahm said, maybe they get antsy. jonathan: that decision wednesday. other stories, here is your bloomberg brief with dani burger. dani: nasdaq stock market says it has resolved connectivity issues. premarket trading was disrupted for more than two hours.

nest says it determines the cause but did not go into detail. data shows no trades printed on the nasdaq global market starting at 4:09 a.m. new york time. they say any unacknowledged orders on the system have been canceled and put back to customers. barclays looking to expand relationships with sovereign funds and private equity. the ceo offered more detail earlier in the program. >> i think it is an important part of the shift happening, and it is happening because previously in the investment banking side, we were working with corporations. and since then, we still work with corporations in a very big way, but in addition, you have financials and sovereign wealth funds. so the growth of concentrated pools of capital makes it important for that full relationship. dani: last month, barclays announced a $2.5 billion

cost-cutting drive and reorg to boost profits. march madness games are set. millions of fans are going to try their hand at quickly predicting 67 college basketball games for the perfect bracket. good luck. defending champions yukon are one of the top seeds, alongside perdue, houston, north carolina. no fan has ever completed a perfect bracket. ncaa say the odds of doing so equate to about one in nine billion. that is your bloomberg brief. jonathan: we will do what we do every single year. try to make the midyear re-eval go a little better. lisa: is that so? jonathan: up next, all eyes on nvidia. >> when you look at the godfather of ai, it is their world and everyone else's paying rent. flex the muscles for jensen. jonathan: he is like a wizard putting on a cloak.

the jacket goes on, talk up the stock another $200 billion. just like that. that conversation up next. this is bloomberg. ♪ what about zocdoc? so many options. yeah, and dr. xichun even takes your sketchy insurance. xi-chun, xi-chun, xi-chun! you've got more options than you know. book now.

jonathan: fed decision just around the corner, on wednesday. two-day meeting starts tomorrow following a doj decision which may include the first interest rate hike since 2007. 'bramo, drumming things up. lisa: so exciting. jonathan: just saying price action is not happening going into it. dollar-yen at 1.49. elsewhere, some price action. equity futures up by .75%. a nice rally, taking back some losses of last week. yields higher by two basis

points. staring down the barrel of the highest yields of the are so far. 4.32%. lisa: larger than expected inflation, and resilience with respect to the economy and earnings. both of those together, it raises the question, how are rates going to go down that much in the near term? jonathan: it is not just about central bank decisions this week, but it is also about this, all eyes on nvidia. >> when you look at the godfather of ai, nvidia, we will see it on monday, everyone else's paying rent. it is a grand entrance but also a showcase, to flex the muscles. we believe it is a 1995 moment, this ai revolution. jonathan: nvidia's annual ai conference kicking off with skyhigh expectations, calling it nvidia woodstock. wedding on new announcements for products and more. apple is playing catch up,

sources saying apple is in talks to build google plus gemini ai engine into the iphone. bloomberg's alex webb joins us for more. nvidia conference first, what are you expecting from jensen later today? alex: expecting to see what the next generation of chips looks like and what they can do. the b100 which people know was coming but the nature of the innovations and it will determine how optimistic investors are about it meeting this incredibly vicious targets that they are -- incredibly ambitious targets they are setting for it. it is trading at a hefty premium. the 35 times forward earnings at the moment, not massively out of culture with names like microsoft. a bit of a discount to amd because amd' earningss estimates have not gone up to meet expectations of where the stock is up. what will be fascinating to see

is how similar it is to an apple event. from a trading perspective. often with an apple event, you see profit-taking. buy the rumor and sell the news. there has been a little bit of selloff in nvidia over the past few days. sometimes good news does not deliver the pop in the shares you might expect because people think it may not get much better than this right now so you see a bit of a selloff. so that will be fascinating. jonathan: strong point. talk about an apple event, fantastic reporting that apple is in talks to build google plus gemini ai engine into the iphone. we have commentary from a good friend, dan nieves at wedbush, calling it major for google to get into the apple ecosystem. i want your opinion, what this says about apple and where they are in this race. alex: i floated this idea to someone as a possible column idea, maybe you should write that apple should open up siri

to one of these other ai engines, and the response was, apple would never do that. of course, this looks to be what they are doing. it shows two things. first, that apple is not as close to having its own capacity to gemini, chatgpt4 as it would like, and also how significant and important sees this as a competitive differentiator. if you're going to have phones over the next one to three years where you can engage with and ai engine conversationally, that might be the differentiation point. apple, clearly it is a defensive move to ensure they have this tech in their devices, and they're handing over what could be very significant part of that proposition to what is, frankly, in mobile equation systems, a meaningful capacitor using google. lisa: how do they get around the idea that a lot of regulators will not like the fact that two of the biggest companies in the

world are teaming up toa be even bigger? alex: it is slightly different from the search thing. with search, it was pushing people into google plus ecosystem, so giving google the opportunity to serve out on that basis. we don't fully know how this is going to push people towards a similar thing. the way that ai is being monetized is still kind of being worked out, very much a cloud product at the moment. people providing the systems are making money from selling the cloud services. so it is a slightly different case from google being the default search engine in ios, does not mean regulators will not look at it, but it is not, excuse the pun, apples for apples. jonathan: i want to talk about gemini. it has not been a good start for google unveiling and rolling this out. i get that apple is behind, but

is this something they want to go near at this point? alex: concerns with gemini are very much in the generation peace, and that was the colossal flub that they said they needed to fix and recognized it was a mistake. this stage, it looks like, and we do not fully know, and this deal is not signed, it is reported there were also talks with openai. but to be able to engage with it, ask questions, perhaps search the web, the image piece is not entirely set. we need a little time to see if this comes into a product and if they and feel such a deal, it would be in june, and the operating system and not be until september. that gives google time to fix problems. jonathan: thank you, sir. looking ahead to the nvidia developers conference later today, talking a partnership between apple and alphabet. here is a win for us,

surveillance on tour tomorrow, i fantastic lineup, taking the show live to the bank of america trading floor. the ceo and the head of rates strategy. the head of economics, and a whole lot more across three asset programs, starting at 6:00 eastern tomorrow morning. lisa: so looking forward to it, especially given the fact that we're heading into such a massive week and to get a birdseye view on the components of an economy and flux. jonathan: getting the week started in a big fashion. live from new york city this morning, good morning, this was "bloomberg surveillance." ♪

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>> from new york city, i am in for jonathan ferro. equity markets managed to claw back losses last week. a beautiful new relationship of growth between apple and alphabet. the countdown to the open kicks in right now. announcer: everything you need to get started -- set for the start of u.s. open with jonathan ferro. [opening bell] >> investors brace for a busy week of global rate decisions. ai in focus with the