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tv   Bloomberg Markets Americas  Bloomberg  March 17, 2021 10:00am-12:00pm EDT

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the day we have all been waiting for, wednesday, the 17th of march. 30 minutes into the trading day in the united states. from london, i'm guy johnson. alix steel is over in new york. welcome to "bloomberg markets." hugely anticipated fed meeting. alix: finally. it feels like this is the one everyone needs to watch. there have been boring once. this is definitely not going to be one of them. mission accomplished, that is probably what we are going to hear from the fed, especially when it comes to the dot plot. maybe we will hear something about a supplement to leverage ratio. the impact, higher yields. markets really seem to be testing the fed this morning. that means weaker tech, down 0.8%. 30 year yields pushing higher, at one point hitting the highest level since 2017. 10 year breakevens also popping higher as well, at one point hitting the highest since 2013.
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the superlatives kind of just continue here. what does it mean for the dollar? it is turning into a stronger dollar session. euro-dollar flat, but nonetheless, that $1.20 seems to be key. how much higher can yields push? how much higher can the dollar go? all of that having an impact on other asset classes. guy: it is going to be fascinating. it happens at 6:00 here in london. it's normally at 7:00. we've only got four hours between london and washington this week. let's talk about what everyone is watching for. we will get a huge amount of data today. economic summary projections a huge part of the story. that's start with dots. let's talk about 2023. at the moment, the bulk of members of the fomc down there, no change. we've got five members above that. basically, what you need to see is four members shifting higher
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to give us the possibility in 2023 of one rate hike. some even believe we could get as high as two rate hikes priced in at the moment. but basically, you need four of those to go up. to get around 1%, you need eight of them to go up. i am watching these dots to see what the outlook is for 2023 for rate hikes. that could get the front end moving. alix: let's get more detail on fed decision day. mike mckee, bloomberg international economics and policy correspondent, what is going to take to move in 2023? michael: it is going to take a big change in the fed forecast. this is not really a forecast, though the market takes it that way. the forecasts come in the summary of economic projections. what we are going to be looking at is whether the fed moves towards the markets. since the beginning of the biden adminstration, when the stimulus
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became real, the $1.9 trillion, take a look at the blue line. that is the bloomberg consensus forecast for what growth is going to be. now you've got people like goldman saying 8%. the white line is where the fed left us back in december at 4.2%. so they are going to come up. the question is how far. and if they come up, what does that mean for their inflation outlook? we will get that answer from jay powell in his press conference. here is what he is probably going to talk about, the fact that we still have a big hole in the labor market. we have 10 to 12 million people still out of work. even though we might see some inflation during this coming year, shortages of materials from higher energy prices, we are not going to see a long-term inflation problem until that closes, that hole in the labor market poses. one of the things we will be watching today, the supplementary leverage ratio. this is a complicated issue, but
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basically, big banks have to hold more capital against their assets. when the assets at this point keep growing because the fed keeps buying treasuries and putting money into the banks' coffers, banks then say they can't afford the higher capital ratio, and they would like some relief. the fed suspended it last year. will they do so again? we may get an answer today. we may not. alix: appreciate it. all of that driving the inflation debate that seems to be dividing the markets. this is a really interesting chart. it is the spread between 10 year breakevens and five year breakeven rates, so the long-term versus short-term inflation. the lower it goes, the more the short-term inflation breakevens are moving higher. that is exactly what we are seeing. basically, the market thinks the fed could control the short-term inflation picture, feeling more
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positive about higher inflation, but the longer is still a significant issue. let's break this down even further. joining us now is nathan sheets, pgim fixed income chief economist and head of global macro economic research. what does the fed do about that, nathan? nathan: my guess is that jay powell didn't get a lot of sleep last night. [laughter] this press conference, and he's got some -- this press conference is a big deal, and he's got some communication challenges he has to address. on one hand, rising rates are an indication of healing in the economy and consistent with their dual mandate. if it happens to rapidly, that can jeopardize those goals, so they do care about pace as well as double of treasury yields.
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how are they going to communicate on the one hand, we are going to have a turbocharged economy through much of 2021? but the fed is not just looking to see whether we recover from the pandemic. the fed wants to see a sustainable increase in inflation over the medium term. i think powell is going to say effectively, we need to see where the economy lands in 2022 for we are in a position to judge our progress toward our 2% average inflation target. guy: you take me right where i want to go. good morning. do we get lift off at 2% core pce? is it 2.3%? how big a difference is it between the 2% and the do 13%, in terms of the signaling -- the
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2.3%, in terms of signaling? nathan: i think in response to that question, jay powell is going to emphasize it is not inflation at a point in time. it is average inflation over time that you are looking at. they want to see numbers that make them convinced they are going to be at 2% on average for a while, and i think from the fed's perspective, whether we get up to 2%, 2.3%, or even 2.5% in the second half of the year, it is not as material as all of that suggests for inflation over time. alix: which is exactly what that breakeven chart and that spread was showing. what happens if we wind up getting gdp upward revision that looks quite large relative to the unemployment rate? and if the inflation increase
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looks small reddit build -- small relative to the dip in the unemployment rate? what happens? nathan: i think there are going to be a lot of questions about how the grow forecast, the unemployment forecast, and the inflation forecast interact with each other. i think the answer that jay powell will give is that there is scope for a lot of rebounding woes, just drawing on resources that are out of the labor market. people who have left the labor force over the last year or so. you can get rapid growth with relatively low inflation, and what seems to be more moderate declines in unemployment, but they may not seem commensurate with the pace of growth. guy: if we see the dots
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indicating a rate hike in 2023, the market is going to look at that and say you never get one rate hike. you always get more. then it is going to extrapolate. how does powell deal with that? if those dots up, how hard is he going to have to lean in to have to lean into stop the market extrapolating? nathan: the dots are a key part of the press conference. i think that many in the markets are particularly focused on that 2023 dot. my expectation is that jay powell and others at the center of the committee have worked hard to convince their colleagues that they will need to keep rates at zero through 2023. but if you see a rate hike priced in, and i think even if it is one rate hike, the markets are going to take that as a
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green light for larger interest rates to surge higher. and exactly as you say, once it starts migrating upward, it is not clear that one rate hike in 2023 is where it is going to stop going forward. alix: the market, location is clearly huge. if we just talk about the inflation impact and how you are -- how your investment portfolio relies on that, i am really struck with how different the main investment players are looking at this. i was talking to bill gross yesterday, saying he is looking at inflation screaming higher. scott minerd at guggenheim says we will get a reality check, but it is still going to remain subdued. blackrock says fears of inflation are totally premature. this is setting us up for some real binary action within the
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market if you put money behind these calls. nathan: indeed. we will have some inflated -- some elevated inflation readings over the second half of the year , but the economy is going to look and feel a lot like the economy did before the pandemic. aging demographics are still there. high delta levels are even higher than they were before the pandemic. it is unlikely that firms are going to have much pricing power over time, and i think that argues more for a moderate growth, low inflation, and relatively low rate environment. i think from a market standpoint, things are going to be a little bumpy in various markets over the next six to 12 months. but when you look beyond that, i think it is back to the future. it is back to the pre-pandemic
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world. guy: last question from me in this area. a statement of confidence, that is how powell has described the yield move we've had thus far. how much higher does it go? at what point does it stop being a statement of confidence and start being a problem? nathan: my sense, having worked inside the federal reserve, i have an idea of how they think about long-term interest rates. the fed is not worried about a rising 10 year treasury, even if it has a 2% handle on it. if it is happening in the context of rising expectations regarding growth and inflation. so i think we are a long way from the point where the fed is going to feel that increases in
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the 10 year are choking off what would otherwise be a strong and powerful recovery. if rates start to rise for other reasons, then the inflation conditions that people are expecting would be much more concerning. but in this environment, i think jay powell and his advisors are quite relaxed about the implications of a higher rate, if not the pace at which they are rising. guy: nathan, stick around. we've got much more to discuss. this is going to have global implications. nathan sheets of pgim fixed income stays with us. we will take a look at what this means for china and the united states. china on a very different path in terms of the fiscal front. tune in for some great coverage coming up on that fed decision. 2:00 p.m. in new york, 6:00 p.m. here in london. that is an hour earlier than normal. make sure you turn in.
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-- make sure you tune in. this is bloomberg. ♪
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guy: three hours until the fed decision, a decision that will have global implications. the fed is taking a different approach when it comes to getting out of this recession. i want to compare and contrast china. the two economies learning different lessons from the last crisis. last crisis, china went big. that's what we've heard from janet yellen. as a result of which, it basically invested in roads to nowhere and cities that nobody once to live in. this time around, china is taking a much more cautious
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approach. the united states, the lesson learned was we didn't go big enough, and as a result of which, we are ending up with a huge amount of stimulus we are seeing injected into the economy. we had the national people's congress last week, a much more cautious approach from china. this is the fiscal deficit, basically not blowing out in the way it had done previously in past crises. in fact, looking relatively stable compared with other countries. it is fascinating to see these different lessons learned, but i think the chinese are really relying on the fed and the biden adminstration to deliver this fiscal boost because the export market is still going to be hugely important for them. they need the u.s. economy to be motoring if they are going to make the transition with their own economy. alix: 100%. so let's ask the expert, nathan sheets of pgim fixed income, still with us. you take a look at the different paths stimulus has taken in the
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-- has taken in china and the u.s. what is the difference between now and 2010? nathan: as you emphasized, the chinese have long felt that they went to big in 2008, 2009. as a result of that, there was a hangover of debt and leverage in their economy. in the united states, the biden adminstration concluded the obama administration didn't go big enough, so it is go big or go home. we just did $2 trillion of stimulus, and there's likely to be several more trillion of infrastructure that will come this year as well. there's also a fundamental difference. this gets to the key point, that the united states has been hit harder and in a more sustained way by the pandemic. i think that has also been part
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of why the united states has been more aggressive than china. that response that we have put in place is very helpful to our economy, to all the recovery, and will help support chinese exports. guy: can i just take you to europe for just a moment? there is a spat raging across the english channel. ursula von der leyen talking about potential restricting shipment of vaccines to the u.k. the u.k. now responding, saying the eu wasn't planning to block exports. this is obviously highly charged political theater, but it is going to have a huge economic impact if the eu can't deliver the kind of vaccine rollout that is going to be required to get the economy out of this pandemic. just compare and contrast what you are seeing in the fixed income market between the united states and treasuries rising,
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bund yields rising higher as well across the eu. how wide do you think spreads can get? how big an anchor do you think bunds will be on treasuries, for instance? nathan: i think the difference between europe and the united states right now is quite substantial. one of them you highlight is the pace of the vaccine rollout. but i think underneath it, we are seeing that the u.s. economy is just proving to be more resilient and more flexible in the face of this shock. that has provided significant impulse to grow, along with the ongoing fiscal stimulus. as a result of that, i think the fed has been fairly relaxed about where rates were going. the ecb has taken a much different view. the ecb has been more concerned
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and responded to some extent during its last meeting. my feeling is that the gap between 10 year treasury yields and bunds could widen meaningfully further over the course of this year, as we seek a much stronger recovery in the united states. i think a really interesting question is if that is correct, what intern that means for the currency market. guy: we are going to have to leave that one hanging. a cliffhanger from nathan sheets. thank, indeed -- thank you indeed. nathan sheets come up each income chief economist -- nathan sheets, pgim fixed income chief economist. this is bloomberg. ♪
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ritika: it's time for the
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bloomberg business flash. housing starts in the u.s. fell by more than forecast last month. residential starts dropped 10.3% to an annual rate of just over 1.4 million. harsh winter weather is getting the blame. bmw getting a better than expected boost in profits this year. bmw wants about half of its total sales to be electric. four president trump's net worth -- former president trump's worth has fallen since he took office. the riot that got him impeached is ruining his brand. few industries in the u.s. have been hit quite as hard in the last year. that is your latest business flash. guy: thank you very much, indeed.
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cold winter weather constraining activity in the u.s. housing markets. we are going to talk with the ceo of a top consultant, who is going to be talking to us about this. i also think we need to mention what is happening here with the oil market. alix: but it ties in because there's a lumber shortage and copper shortage for the housing market. that is a supply chain issue. the question is, do you see something similar happening in the oil market? is there a super cycle in oil the way there is an copper? the iea came out and totally poured cold water on that today. they said, even if demand picks up, opec has plenty of production capacity if there is a resurgence in demand. we will see oil demand recover, but it will take until 2022, but it won't have the velocity it might have had another cycles. guy: yeah.
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the thing about this is that a lot of people seem to be predicting a super cycle. a lot of banks have been raising their targets. certainly suggesting we are going to see significantly elevated prices. there's chatter around $80, $90. alix: saying that may be gasoline demand peaked. that would be huge. that debate evolving in the oil market and the commodity market. otherwise, lumber, copper, all of that feeding into the housing market. we will talk about all of that in just a moment. this is bloomberg. ♪
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this is "bloomberg markets." housing starts dropped in february more than forecast, in part because of bad weather. but something that is going to affect the housing market is the supply issue. there's a lot of demand, and there is a supply chain problem. we were just talking about that, with things like lumber. guy: that is the commodities hit, but you are focusing on the mortgage story as well, which i think is important. i thought it was fascinating considering they have been on an absolute tear as of late because of the supply imbalance in the united states for housing. i am really curious to figure out why they have dropped as much as they have. but a fact that is worth mentioning is what is going on with the bond market. yields have been rising, and that is obviously rippled straight into the housing market via the mortgage market. i don't know where alix fits -- alix: below, below.
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guy: alix was keen to point out she fits basically right at the bottom of yields. [laughter] that has a material impact in terms of the demand story, which is going to be worth paying attention to if we continue to see yields checking higher. this has been a real hot button story. housing absolutely powering back. alix: 2.75%. i've got to keep saying it. joining us for more insight is jack truong, ceo of james hardie, the world's number one producer of fiber cement and fiber building solutions. it is good to get your perspective on this. let's get a quick snapshot of where we are right now. it has been very strong. does it continue? jack: good morning, and thank you for having me on. when we look at the data that has come out for housing starts,
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it is not surprising to us. we expected it because if you look at the month of february, 10 days of the month was under a deep-freeze, and over 50% of the new construction really happens in the south, and texas was in a deep-freeze. but when we looked even further down to the data, we saw that the completion rate was an increase month over month and year-over-year. that means that builders were able to complete the homes because most of that work was done inside. we also look at the permits. permits was 70% increase can pick was 17% increase -- was 17% increase year-over-year for the month of march. so it is a really strong housing market we see a james hardie. guy: how much pricing power have
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you got at the moment? clearly there is a strong demand story. are you raising prices as that demand picks up? jack: our products are very unique, and fiber cement. they deliver protection to the homes in terms of durab maintenance, and fire resistant. it is really about the value we deliver, and it is something that we look at in terms of the price value. throughout the past year, we were able to do a continued increase of price that we do every year. alix: talk about the supply chain issues that you are noticing within the market. guy and i talked about lumber, as well as copper. there was a report that plastics are going to see a deep hit of supply due to the texas deep-freeze. where do you notice it? jack: for us, we are the world's
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largest fiber cement producer in market, as you mentioned. during the past two years, our company has transformed to become a world-class manufacturer, and that means that we adopted the lien methodology based on market demands. through market demands, we are able to run a network of plants sufficiently. during the past year, during the pandemic, our team has worked very closely with our customers up there, along with the builders. most builders already know what they plan to produce six or nine months from now. as we get closer to the builders and our customers, we took the future forward demand to be able to translate that to the production plan within our lean network of plants. by doing that, we were able to, as we produce the products that flow from our plants directly to our customers, and through that
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transformed process, allow us to actually serve the market better than before, and we are able to pick up the surge in demand and give more supply to the market. guy: as you say, you're really close to your customers come the builders. are they experiencing problems elsewhere, and terms of trying to get the materials they need to construct the houses that they are tasked to do? it's a bit like the chip industry. at the moment, the car industry, when it's got everything it needs apart from that last little chip to make that car get out of the past three -- out of the factory. are using the same thing with the building industry? jack: we do. lumber has been a big issue in housing. new construction, at least. that is why you saw escalating prices in lumber, and any other items sourced outside the u.s. that also become an issue.
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but certainly in our business, we expose through the new construction market 1/3 of our business, and the other 2/3 is really in refitting and remodeling. 44 million homes are 44 years and older. those homes are really prime to be re-sided and remodeled. it is really the growth opportunity for our company, being able to communicate and market the james hardie fiber cement exterior solutions that deliver the aesthetics and the design possibilities, now that the homeowner tends to stay at home more, work at home more. that a static is changing quite fast. alix: cannot i continue with
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rates on the rise, in that you could take out a home equity loan and redo your house because rates were so low? do you see any sign of that slowing? what yields but they damper on it? jack: it is a large number. we have essentially 44 million homeowners out there with homes more than 40 years old. if it is 5% of those homes that homeowners really need to reside, that is 22 million homes -- that is 2 million homes. so it is really an opportunity for brands like james hardie to communicate and tell that story to the homeowners, and really be able to make that decision. guy: you have worked around the world in a whole different range of industries. 3m, for instance.
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you worked at geographically different locations as well. you worked in asia, as well as europe, if i am not mistaken. jack: that's correct. guy: how different do you think the market is in the u.s. right now versus the rest of the world? particularly europe, but i am curious to get your take on asia as well. jack: there is certainly the style of construction that is very different from geography to geography, but there is one common factor that is really the same. in u.s., europe, or asia-pacific, particularly australia and new zealand, there is a lack of skilled labor. there's a lack of affordable housing. right now as we speak, there's a lot more about homeowners who want to beautify their homes. that has really been a big change in consumer behavior that
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we have picked up during the past year. guy: really appreciate your time and your insight for the inferencing -- insight for the interesting conversation. samsung the latest to sound the alarm. the shortage could delay the launch of its flagship smartphone. we will have that story next. this is bloomberg. ♪
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ritika: this is "bloomberg markets." coming up, we will hear exclusively from wells fargo ceo charlie scharf at 12:00 p.m. eastern. this is bloomberg. ♪ let's check in on the bloomberg first word news. strong words from president biden about russian president vladimir putin. the president called putin "a killer," and said he would pay a price for alleged interference in u.s. elections.
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a 21-year-old man is being held for the murders of eight people at three massage parlors in the atlanta area. at least six of the victims were asian women. the violence has sparked questions about curbing discrimination and violence against asians that has escalated during coronavirus. president biden says he will be talking about the shooting shortly. in germany, chancellor angela merkel's advisors have cut the growth forecast in a warning about the cover he -- about the recovery. they also say the recovery could be jeopardized by a jump in coronavirus infections. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. guy: thank you very much, indeed. let's talk chips and figure out what is going on. we have a shortage. we know that.
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but that looks like it could become potentially more widespread. samsung says it is seeing a "serious imbalance in global semiconductors." our reporter from bloomberg intelligence joins us now. i thought samsung made much of these chips? and if you've got samsung saying it's a got a problem, i think that gives us an idea of the scale of the issue we've got here. how serious is this becoming? reporter: this is a pretty big deal. one of the things that happened was we saw inklings of this from the auto industry, but one of the things written early on is the fact that this is not an auto specific problem. this is not a handset specific problem. this is an industrywide problem, and the cascading effect of this, whether it is one end market or another, one type of chip or another, whether it is
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application processors or display drivers, this is going to be pervasive. i use the old adage -- regardless of the complex of the of the product, regardless of the price point, you won't be able to ship electronic gear, whether it is a tencent part -- a $0.10 or a $10 part. you are going to have that same problem in the case of one thousand dollar high-end smart phones. this is a problem that is going to stay with us at least through the second half of this year. alix: so how do we fix that? it is not just the actual shortage. it is also freight rates are quite high. there are other input issues that also affect the end pricing for the buyer. how does that get fixed?
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what kind of capex cycle does that look like? jack: -- reporter: in the near term, i don't think any sort of government incentive or think tank sort of process is going to help. we are going to have to operate these factories at samsung, at ti, 24/7, and find the extra gear in our 10% of extra volume. that is all we've got in the near term. and we are going to potentially expand capex through the next cycle, so that our production capacity of these factories is 20%, 30%, 40% more come the next cycle. and that is two years from now, three years from now. in the near-term, we are going to have to add 10% extra capacity in these factories. run an extra shift maybe, and
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find band-aid processes to deliver that extra oomph of volume that is now demanded. guy: there's been a lot of talk about the fact that regions like the united states, like europe, are suggesting because of these supply chain at the moment, they need to have local supply. they need to have fabs in the united states and europe. how realistic is that conversation? reporter: it just goes to show you that over the last decade and a half, we have put all of our eggs into one basket, the china basket, from an electronics manufacturing perspective. we have increasingly concentrated our chip manufacturing in the taiwan sort of basket. as a result of that, when currencies like this, you overlay the geopolitical issue on top of that, and it shows you
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how vulnerable our supply chains are. in the long run, companies and other manufacturers are trying to diversify their electronics manufacturing chains away from china, into vietnam, thailand, into india. from a manufacturing perspective, intel is going to be front and center in this. let's move our manufacturing supply chain away from taiwan, or at least the risk that a little bit. the u.s. and europe are going to play an increasing role in that global defragmentation. in the near-term, i don't think that is going to help a whole lot because you are still relying on korea and taiwan for that advanced chip supply. alix: it really feels like it is spreading to some any industries. thank you. coming up, bloomberg's equality summit is underway. we will hear from al kelly, visa's ceo, coming up next.
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this is bloomberg. ♪
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♪ ritika: it's time for the bloomberg business flash. i'm ritika gupta. ford has told more than 30,000 workers to use the office only when they need to, even when the pandemic is over. the automaker is describing it as a flexible hybrid work model. the offer is for office workers, not those on the assembly line. the international energy agency says all markets are not on the verge of a new price super cycle. in its monthly report, the iea says plentiful supply means any concerns of a shortfall are misguided. saudi arabia and its allies shock traders with plans to keep a tight grip on output. americans are planning to spend the $1.7 trillion they've saved up.
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a year of the pandemic has devastated lives, jobs, and the economy, but those with disposable income are ready to go out and splurge. some are calling this revenge splinting. -- revenge spending. alix: thanks so much. let's go now to the bloomberg equality summit, where caroline hyde is speaking to al kelly, visa chairman and ceo. >> to have the resources and the expertise to go digital versus the small business owner that hasn't, we've put people on the streets. we have people going door-to-door to merchants to talk to them. we can't do that nationally, but we have been doing it in city centers and a number of cities around the united states. we have made a commitment globally to digitize 50 million small businesses over the next couple of years. and again, it is critical that these folks go digital so that
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they are able to compete with medium-sized and larger competitors that they find themselves up against every day. >> are you optimistic right here, right now, as we have seen the stimulus unfold in the united states and around the world? are you feeling that the businesses serve are coming out the other side? >> i am optimistic, but i do balance that. we must be careful. we are not pass this pandemic yet. i sit on the board of one of the big medical centers in new york city. yesterday we had 760 inpatient covid patients. many of them in intensive care. we have seen brazil and italy go the wrong way in terms of coronavirus cases. we have seen these variants. but on the other hand, we have seen real progress on the vaccine. what science has been able to do in terms of bringing multiple vaccines to fruition very
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quickly, and governments now working to get shots in the arms of consumers, is critical. i thing about two things in terms of the importance of the recovery. one is consumer comfort. are you comfortable going back into restaurants? are you comfortable going back to a movie theater or fitness center? the other word i think about a lot as mobility. today still, much of the borders around the world are locked down. it is very difficult to go from one country to another. in some cases, a virtual impossibility. in some cases it is totally restricted by the government. we have been following the travel restrictions of 200 countries for the last six or seven months, and while they have eased up a little bit, they are still quite rigid. i think until we get to the point where we have consumer comfort with going into more dense environments, and we have easing of restrictions that promote more mobility, i think
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we will make some progress in the recovery, but i am hoping and i am hopeful that as we enter the summer months in the northern hemisphere and we get more and more people vaccinated, we will see more opening, more travel, etc. i do believe that consumer travel is going to come back quickly and fairly intensely. i think people are either stuck somewhere or they are so desirous of seeing children and grandchildren and parents, seeing friends knock things off their bucket list, places that they want to visit, events they want to go to. but i think that we will see an increasingly positive environment as we get into the second half of the year. we must all remain vigilant. all of this mask wearing, social distancing really does work and help. but all of that said, i am optimistic about our future.
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>> let's talk about the optimism you have for visas future, and internally within your employee base. let's talk about the people you work alongside because diversity inclusion is something i know you have very much taken a focus on, just yesterday announcing a new chief diversity officer and head of corporate responsibility. what was the reaction to that? >> the reaction has been incredible. i've had at least four or five emails of people who tell me they cried or it brought tears to their eyes. by the way, we have had a chief diversity officer over time, but in our hr function, and i think what we are all realizing is that diversity is a lot more than a loan agenda. as i alluded to earlier, as part of bringing diversity and inclusion from a set of well organized and very important
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activities to it being a real business imperative, i want to do set a tone right from the top , when i was able to recruit somebody that i had some history with, a woman named michelle clark, who has been the ceo of the greater greensboro united way -- guy: that is al kelly speaking to caroline hyde at the bloomberg equality summit. you can continue a following that summit. coming up, chris watling of longview economics. we will get his take on the fed and what is going on in europe with the vaccine rollout. what are the academic applications that? -- the economic applications of that? this is bloomberg. ♪
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guy: from london, i'm guy johnson. alix steel is in new york. this is "bloomberg markets." shots fired. ursula von der leyen, threatens vaccine export restrictions to the u.k. lockdowns spreading across europe right now. frans is expected to announce additional measures tonight for regions -- france is expected to announce additional measures tonight for regions most effective. we will hear about plans for the electric era. let's talk about equity markets. we are waiting to see what is going to happen with the fed a little bit later on. we are down by around 0.6%. you can also see a similar story in the currency markets. euro-dollar flat, just north of
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$1.1907. but in terms of what is happening in the bond market, we have seen yields coming up, now beginning to fade a little bit. but it is all about the fed. alix: we are seeing a pretty strong push for higher yields. i mean, fives, 30's, we continue to see the higher yields in the u.s. pushing pressure on the equity market, particularly on the tech market. the nasdaq 100 the underperformer. how much are investors trying to test jay powell into the press conference? this of course having the perverse effect of driving yields elsewhere higher, like in europe, that don't have the same growth perspective. instead, they are dealing with a lot of issues when it comes to growth, as well as vaccine disturbed asian. guy: absolutely -- vaccine distribution. guy: absolutely. the spat certainly heating up
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between the u.k. and the eu. ursula von der leyen and making a threat to withhold vaccine exports to the u.k. >> we need to ensure that there is reciprocity and proportionality, and i want to be clear on reciprocity. if the situation does not change , we will have to reflect on how to make exports to vaccine producing countries dependent on their level of opening. guy: joining us now is bloomberg's western europe managing editor chad thomas. what are the implications of the eu banning exports of vaccines to the u.k.? chad: it is really twofold. first of all, the u.k. is in many ways very dependent upon these exports from the european union. over the last six weeks, they
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have exported 10 million doses, so you can imagine if they shut off the spigot, what that means for the vaccination campaign in the u.k. this has much wider implications for all sorts of things, including the relationship between the two countries. the u.k. shot back very quickly this afternoon after von der leyen's comments, and response to a question from our own colleague, or brussels bureau chief, but the u.k. expects the eu to stick to previous commitments around vaccine. alix: i just don't understand how we can talk about vaccine nationalism within europe when they don't even want the vaccine to begin with, and even if they wind up approving it again, there's going to be a lot of psychological damage when it comes to astrazeneca. chad: that is really the great question here. on the one hand, you have the you talking about banning exports and complaining
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basically to astrazeneca about the speed with which they have been manufacturing the vaccine, while at the same time, this week they stopped usage of the vaccine in most eu countries out of concern over blood clots. we are waiting for a merchant is abated review from the european drug rayleigh later -- drug regulator -- we are waiting for a much-anticipated review from the european drug regulator. so the use of the vaccine will probably start sometime in the coming days in europe, but nonetheless, you have created a huge problem in the middle of a rollout that has already been troubled. they have stopped using one of the key vaccines for at least a week, and there are many people now in concerns about whether they will take the sexy not all. alix: -- take this vaccine at
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all. alix: chad, thank you a lot. joining us for more is chris watling come along view economics ceo and chief market strategist. -- chris watling, longview economics ceo and chief market strategist. what is the longview cost of this? chris: it is more delays, more lockdowns, more government debt to cover all of those issues further or whatever. it is not great. it is not the most impressive logistical exercise. i guess the other issue, perhaps more peripheral and longer-term, is raising that sort of nationalistic type language again we are seeing out of the commission with brexit. you've had this in the u.k. for several years now. so you bring all that together and it doesn't help the relationship going forward, and adds to friction, and therefore probably inflation on the margin. but it is primarily just a
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timing issue. i don't think this thing is going to cause too many major problems, as long as people get vaccinated and people get back to normal. guy: it is going to have a big economic impact, as you say. the u.s. is powering ahead. got fiscal policy, monetary policy, he vaccine rollout that is working, all leading into the united states and making it kind of advance at a much faster rate than what we are seeing in europe. yet the equity markets, you look at the performance year to date, the s&p is up by 5%. the cac 40 is up by 9%. you are not seeing much divergence in terms of equity market performance. why not? do you think that equity market performance starts to change? chris: no i don't. think the primary driver at the moment is come on the very big picture, scale. the market is about 50% growth
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stocks. if you look in europe, some of those markets have barely got a few percent in terms of growth within their market sector composition. therefore, european markets are much more about value and global reflation, a lot of the global companies and industrials, or banks that have keyed into the global bond yield. so directionally, bond yields and french yields and so on. so the story is much more about the global bond yield story, the growth stocks underperforming in the states, and the sector waiting then it is about the euro though -- the euro zone economy versus the u.s. economy. in this sense, the lockdowns aren't that important in terms of bond yields globally and in terms of relative sector performance. i don't think it is a big issue. alix: but that feeds through to the stimulus conversation in the u.s. i want to bring in what the
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slovakian central bank governors said. "my concern is to compare with the u.s. fiscal impulse, the european one will kick in with a major delay. we are talking months and years, and the physical reaction is really lagging behind and needs to pick up." how do you see that unfolding? chris: that is a fair point, but the reality is this economy has always followed where the u.s. and china have gone. if the u.s. and china are starting to motor, once the euro zone starts to unlock and gets vaccinated, it will follow that trend. the best correlation is global trade outlook. one of the big drivers of global trade is the u.s. consumer. to my mind, the u.s. consumer is alive and well, and is going to be spending a lot of money for several years. that is going to drive a lot of global trade growth and export growth. obviously in the likes of germany, where 50% of gdp is exported.
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it is a big beneficiary. so the recovery is stalled by this renewed lockdown momentum and france and so on in europe, but the reality is it will come back, and the most important stimulus in the world, u.s. this go on monetary stimulus -- u.s. fiscal and monetary stimulus. but those are what drive the economy in normal times. guy: today is about the fed, and i am fascinated to see what it has to say a little later on. that jay powell press conference is a much left -- is a must watch event. what impact do you think it is going to have on european government bonds? treasuries are already shooting higher. we are going to see an impact in europe. can europe afford that reaction if, for instance, btp's start moving up? is that going to be an issue? chris: first and foremost, i
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would say they may do. you never know. everything is on the table in that sense. but i think if they did signal it, but you would see as a temporary short-term flattening of the curve. so short dated yields up a bit, and longer dated off a bit. so the implication for btp's would be a similar kind of trade. i think the yields would fall slightly from where they are at the moment. so i don't think it is going to happen, but if it did, i think that would be the main implication, rather than yields taking off to the moon on the 10 year. i don't think that is a credible thing to expect at the moment, given where the economy is. i think that yield backed up aggressively on that announcement probably wouldn't happen, and i don't think the nouncement will happen anyway. ix: but if they say nothing and they don't get in the way of higher yields, what is going to
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the moon? chris: i think yields are ready to stabilize. bonds are deeply oversold on price. there is oversold as they were in early 2017, as oversold as they were during the taper tantrum. and after those events, what happened was the price stabilized, the yield stabilized, or the yield softened a bit. if you look at the housing market in the u.s., it looks like it is just coming off the top a little bit. and the market regulates growth in normal times. loads backup, growth slows a little bit -- yields back up, growth slows a little bit. so i don't think powell needs to control those yields. i think they will control themselves and soften over the coming months, contrary to popular chatter. guy: we are going to talk about central banks in more detail in just a moment. chris watling of longview
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economics is going to stay with us. we will talk about all of the other central banks. clearly it is all about the fed today. the economic projections are going to be key. tomorrow, the bank of england. how optimistic is bailey going to be? we will see. thursday, turkey. thursday, indonesia. friday, the boj. it is a big week for central banks. chris is going to stick around. plenty more to discuss. this is bloomberg. ♪
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ritika: let's check in on the bloomberg first word news. a 21-year-old man is being held in the murders of eight people at three massage parlors in the
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atlanta area. at least six of the victims were asian women. the violence has sparked questions about curbing the discrimination and violence against asians that has escalated during the pandemic. strong words from president biden about russian president vladimir putin. the president called putin "a killer," and said he would pay the price for alleged interference in u.s. elections. u.s. intelligence concluded that putin conspired to hurt bidens changes. ursula von der leyen and eu leaders today that they shouldn't rule out the potential use of emergency legal powers. she called the covid-19 pandemic "the crisis of this century." global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. guy: thank you very much.
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a huge week for central banks. one of the key tools in the fight against the pandemic. vaccines, fiscal policy, monetary policy. 2:00 p.m. new york time, 6:00 p.m. london time, we get the fed. how hawkish are they going to be? still with us, chris watling of longview economics. let's talk a bit about this. the communication from the bank over the last few weeks turned into a more relaxed sort of approach to what is happening with the british economy. there does seem to be a reflection in a similar way to what we heard from the fed that what we are seeing in gilts like treasuries is a reflection of the short -- of the recovery trade. how hawkish do you think governor bailey is going to be tomorrow? chris: i don't think he's going to be very hawkish.
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but you are right, the town has changed in the past couple of weeks -- the town has changed in the last cup -- the tone has changed in the last couple of weeks. there is a tone that is coming out that growth is looking a little bit more short, as you said. the backup and bond yields has been much more about real bond yields in recent weeks then it has been about inflation, so that is a good message from the bond market. i think the governor and the chief economist are picking up on that, and picking up on the inflation risk, and gas is disappearing pretty fast, whether you are looking at the u.k. or the u.s. i don't think the tone will be hawkish, but i don't think it will be dovish from the bank of england. they are ahead of where the fed is in terms of starting to talk
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about the risks of may be removing a bit of accommodation at that stage. that is all i characterize it as, probably a bit more imbalanced. alix: how far can they go? how far can they diverge from the fed in that? [no audio] chris: -- sort of trend. there's a bit of a risk there. there may be a debate about the different sized output gaps in each economy. but they can't go too far away from what the fed is saying because you will get a very big currency move on the back of that. but yeah, i think they are certainly ahead, and there is a bit of divergence. guy: in terms of the u.k. recovery, walk me through what you see happening. we are about to start reopening the economy. there's a lot of talk about pent-up demand.
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how quickly does that come through here in the u.k.? we are certainly seeing it in the united states, but i am wondering if the same could be true here. whether or not we are going to get a short-term inflationary spike, the bank of england typically looks over these spikes. i am wondering what the approach will be if we do see significantly higher inflation. chris: i think the approach is to look through the first half inflation spike as a base effect, and look beyond that and think about the risks there. what as to your point about how strong can consumption be once the economy is opened up, i think it could be really quite chunky. i think the parallels with the roaring 1920's we are seeing are very valid, both in the u.k. and in the u.s.. there's more stimulus in the u.s., but there's an awful lot in the u.k. there's 5% of gdp in cash sitting in household bank accounts that is waiting to be
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spent as the economy is unlocked and the service sector opens up. people talk about the death of the u.s. consumer. i don't buy that for a second. and a lot of these surveys say people are going to save this money, but once things get going, we will see what will we see with the british and american consumer. they want to get out, they want to go to restaurants, they want to go on holiday, and consumption will be pretty strong for quite a while on the back of that. i think it is a strong economy you will see here and in the u.s.. alix: i wonder what that all winds up meeting for emerging markets. if you are buying more stuff, you are going to import stuff, so that is good in a certain capacity. on the other hand, if you have a more stable outperformance in growth, how do you see that affecting em? chris: that is a great question. the main trend that tends to play out in the stock markets is a stronger u.s. and u.k.
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consumer at the same time. u.s. means more imports. global exports are going up. that is great for emerging markets and they tend to outperform in that environment. it also tends to be a weak dollar environment. when we had home-equity withdrawals surging in the u.s. ahead of the financial crisis, a bit like what we are starting to see germinating now that will come through over the coming years. that was also a weak dollar time and a good time to own emerging markets. so i would favor emerging markets. i think that is an important part of the puzzle at the moment, and will be a beneficiary from this strong demand seen in the u.s. and the u.k. guy: you have sounded really positive. i'm sort of concluding and wrapping up the calls you have given us. why do you not think the fed is going to be more optimist on growth?
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that those dots are going to go higher in 2023? it may just be one, but it would be enough to send the markets off. the picture in the u.s. is really strong. you talk about consumption coming through. why is the fed not going to react to that? chris: i think the fed is focused along with the treasury and the states on the unemployment rate. i think that is the main focus, and they don't want to do anything to disrupt that at this stage. maybe the dot plots shift a tiny bit. it depends how much and how many people and so on. but really, i think jerome well's message is been consistent. he doesn't by the inflation story. he is not worried about elevated asset prices and liquidity. he's focused on unemployment and getting it back to something like a 3% or 4%. as you know, participation
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rates and the un-limit rate means there's a lot of distance -- the unemployment rate mean there's a lot of distance there. we will see in a bit. the dot plots might move, but i don't think jay powell will change much. alix: thank you. chris watling of longview economics, good to see you. bloomberg's covering that -- that decision at 2:00 p.m. eastern, 6:00 p.m. in london. this is bloomberg. ♪
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♪ ritika: time for the bloomberg business flash, a look at some of the biggest business stories in the news right now. robinhood is offering a new promotion for traders just as millions of americans receive stimulus checks. the trading platform is offering some customers bonuses of up to $250 for new deposits for the next two weeks. that offer comes just weeks after robinhood's cofounder was grilled by congress for features that critics say entices users
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to trade excessively. shares of uber are lower today after the ride-hailing company said it would reclassify all 17,000 of its drivers in the u.k. as employees. that will allow them to get a minimum wage and specific benefits. that is your latest business flash. guy: thank you very much, indeed. let's talk about what is happening in the car sector. a huge week. who is apple going to pick when it comes to the partner it is going to use to rollout the apple card? dan ives at wedbush says it is likely to be vw. dan is going to be joining us next. bmw, some say, could be a more likely target. it is going to be an interesting conversation. this is bloomberg. ♪ is is bloomberg. ♪
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it's moving day. and while her friends are doing the heavy lifting, jess is busy moving her xfinity internet and tv services. it only takes about a minute. wait, a minute? but what have you been doing for the last two hours? ...delegating? oh, good one. move your xfinity services without breaking a sweat. xfinity makes moving easy. go online to transfer your services in about a minute. get started today. alix: live from new york, i am alix steel.
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this is bloomberg markets. bmw is saying profitability will double this year. the luxury carmaker joining libels -- joining rivals in seeing a rise in electric vehicle sales. they told matt miller the time is not right for strategy. >> we did not have any factory stoppages. we cannot exclude this might not happen in the next couple of weeks or months, we cannot exclude that. we have a balanced supply management, and until now we did not have any affect. matt: with this it advantage, i wonder why the shares have underperformed all of your peers? i keep coming back to this because i was playing with the graph in mike bloomberg. even if i look at since march 23
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or since you stepped in august of 2019, if i look at a five-year period, bmw shares continue to underperform volkswagen, daimler, general motors. what can you do as the ceo to help boost that valuation? all of her: look at -- oliver: look at today. we have shares of more than 4%. that is the first step to a more balanced valuation. it compares -- what is the starting point in the comparison. in the last year we increased our share price by more than 100%. i think we are on a good way. the second thing is i think it was not so clear what the strategy is after the i3.
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we started with the electrification of the i3 in 2013 and then we took some time until the markets were large enough to supply the right products. the time is here and now, and we will have by 2023 12 fully electric vehicles. behind me you see the ix and the i4 will be after this year. it becomes clearer to our investors what is our long-term strategy. guy: the bmw ceo talking to bloomberg's matt miller earlier on. they are all doing the same thing, focusing on the future rather than the here and now. the here and now is tough. you saw the car sales data out of europe down 20%. the stoxx 600 auto index up today again. you can see that is the five-year story, which probably does not capture what we are trying to talk about. recently this is a sector that
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has been massively outperforming. it is a pivot to the future, to the tesla uplands that is driving the investment community. craig trudell is the head of coverage of the european auto industry at bloomberg. it is brilliant in the last month, but certainly in the last few days made a major pivot in terms of investor appreciation of what could be possible for the european auto sector. this is a sector that was left for dead and is now rising from the ashes in quite a meaningful way. they are learning from tesla and it is working. craig: that is right. the company you're seeing that most clearly is volkswagen, where herbert diess is following the elon musk playbook, rapidfire announcements. he joined twitter recently.
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his first post was a day get elon musk. -- was a dig at elon musk. he is trying to own the news cycle. we have seen volkswagen to a battery day type event that helped matters. just yesterday, their annual press conference, rather than focus on the financial results, they center the conversation around electric vehicles. that is what the investment community wants to hear right now. a few weeks back ubs took apart the id3, volkswagen's first dedicated electric vehicle and h impressions. ever since then we have seen a lot of optimism reflected in the share price for volkswagen. alix: when it comes to the strategy, which one do investors like best? the all in eb, through -- the all in ev, throw it all in, bmw
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warning you do not want to go all in. which one are investors rewarding the most? craig: for a long time there was this general assumption that electric nickels were going to be less profitable, they were going to be costly, and therefore you wanted -- do really want to put all of your eggs in that basket. i think you heard that from the ceo of bmw just now. they wanted to wait for the market to get bigger before they did more than just put their toe in the water with regard to electric vehicles. i think tesla really change that. that is why the ev message has broken through. they have seen a message in terms of their valuation as a result of that. we saw that all through 2020. it was not only tesla but a lot
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of these electric vehicle upstarts like ne-yo and some of these other companies listed in china, these automakers with small sales but a clerestory about just electric vehicles. you saw the valuations blowout for that name. guy: volkswagen i do not think has fully answered the question about how it migrates from where it is now. loud and clear it will happen. thanks very much indeed. bloomberg's craig trudell talking us through volkswagen and bmw, the german auto sector completely pivoting. one of the areas they are weak in is software and trying to find the right partnership with software is going to be interesting. dan ives at wedbush securities says volkswagen is now the most likely ev partner for apple. we spoke yesterday about dan's
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call to bernstein's global head of research and got his take on which way he thinks apple will jump. arnst: i see bmw as a better offer because there are brand synergies, stronger manufacturing capabilities. the company is already partnering on quite a few technologies. we will see if they want to make the apple car. if you asked me i would say munich would be a better partner than volkswagen for apple. guy: let's talk to dan ives of wedbush securities. dan, why volkswagen? why is that the best fit for apple? how seriously do you think they will take this move?
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dan: volkswagen are diving into the deep end of the pool on ev. the reason it is bw -- vw is because of the modular buildout, that fits well with what apple is trying to do. from a partnership perspective -- they're going all in on ev. if i look at bmw, it makes a ton of sense strategically. i think ev is dipping the toe in the water. this is why vw, you go through everything. i think the ribbon on top of everything else is the quantum ownership. i believe that as a potential game changer in terms of battery technology. but all of that together, i believe apple and bw announce a partnership by summer -- apple and vw announce a partnership by
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summer. guy: -- alix: what does that look like? this is unusual for apple? is the car going to happen apple logo? is it still going to have a vw logo? they are not a manufacturer. they will need a car company if they want to get into this. how does that look? dan: it is a matter of when, not if apple gets into ev's. alix: why? dan: there are 5 trillion reasons for apple to get into the ev market. we are talking about golden -- it will -- apple from the outside looking in, which is why a partnership is not just the most likely, that will be the path. in terms of the look, it is going to be something that could be a vw, but ultimately an apple branded car.
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there are other partners they are talking to. we talked about hyundai, ford, maybe a neo. they are going to the ev dating game. when they walked down the aisle, i think it is vw. guy: what does apple bring to the party or to the wedding? vw is trying to push ahead with software. one thing tesla has done is generated its own proprietary chemistry and its own proprietary software. volkswagen can do the chemistry. it will find it tough to do the software but it is making a big effort in investment. whether you bring an apple, what happens. what does apple integrate into these vehicles? how much apple software is there going to be and how much of the apple software has eked out into the rest of the vw product line? dan: you have what i view is the
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best consumer brand in the world and they bring the technology from cupertino, i believe self-driving. that will be important in terms of what brings economists to the table. and it comes down to why would they want to partner with apple, i believe even if apple gets 3% to 5% market share, that could be a significant growth driver for apple. vw bringing the apple brand. you are seeing it with ford, gm, vw. a $5 trillion market in the next decade. it is something automakers have to quickly pivot. right now in the ev market, it is tesla's world, everyone else's paying rent. right now there is a window of opportunity and that is what apple is looking for. alix: i am wondering how it
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works on a licensing basis, as in why just volkswagen? is there a model apple could pursue light in the app store but with cars? dan: there could be more partners, especially geographically focused. that is why they were talking to hyundai in terms of how supporters of the korean market and also the modular structure. i do believe it is a global brand and it is one you are talking about, let's them brandley apple car, even though it is produced and manufactured. i believe it is a red share model, and more and more putting software into that in terms of what that but ultimately look like in terms of apple card. in terms of -- an apple car. in terms of ev, 10% penetration in the next three to four years. alix: really good to catch up. thank you so very much.
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super interesting story. dan ives of wedbush securities. coming up, the doors to the magic kingdom are about to reopen. we will here with the disney ceo on their part reopening, next. our producer, nicole, is really excited about this. this is bloomberg. ♪
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ritika: i am live in the principal room. coming up, national association -- national education association president becky pringle at 1:00 in new york, 5:00 in london. this is bloomberg. emily: i am emily chang in san francisco. i want to welcome everyone to this special simulcast disneyland is said to reopen on april 30 with limited capacity just one year after being shut down amidst the pandemic. during the time the company has doubled down on streaming efforts with his need lots and
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espn plus. joining me is wall disney ceo bob chapek from disneyland. great to have you back on the show. everybody is curious about the demand picture. we are hearing speculation of a roaring 20's come back. how would you characterize the demand you are seeing as you look at bookings into the summer? bob: we are thrilled with the response we are seeing from our guest in terms of future reservations and intent to come back to our parts. it is a function of two things. confidence we are seeing the light at the end of the tunnel for the pandemic, but also tremendous trust in our brand. we have been able to operate across the world, at walt disney world, for example, for the last nine months. we had the nba bubble that was so successful. guests know disney will do it right. that leads them to want to come back to our parks and experience
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the magic and know we will be responsible as we do that, and they can have a great time. emily: the date is april 30 for california, but you have 50% capacity limits. you can get up to -- 15% capacity limits. 25% if we get to the orange tear. investors want to know if you can make money with these kind of limitations? no out-of-state residents as well. bob: as we have said from the beginning, there are couple of requirements. the first one is we have to be able to do so responsibly and make sure everybody has a great time while also being safe. at the same time, we are only going to open up if it can be creative to shareholder value. will be able to cover our expenses and make a contribution towards profit. that has been the case since we started reopening our parks nine months ago that will be the case with disneyland. we are confident we can do that.
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as conditions improve and the constraints are relieved, we will be there to ramp up and make sure everyone has a great time. we'll bring more people back to the magic of disney. emily: what are some of the new technologies you have used over the last year you think might stick around post pandemic? will temperature screenings continue? will you use the reservation system more? bob: in addition to all of the health guidelines we have been following across the world, masks, temperature checks, increased hygiene, six-foot social distancing, we are also going to be introducing a new reservation system that will enable our guests to have a great time no matter when they choose to come to disney. nobody wants to go through a pandemic, but our teams have been hard at work making sure when we reemerge we will do so in a way that will improve the guest experience, even for a
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pre-pandemic situation. our action since we have reopened has shown that our guests are even more satisfied than they were prior to the pandemic. we have learned to operate under constraints all the time, like delivering the disney magic you expect. we have been in a fortunate situation where we have had a lot of demand in the past. in many cases that has exceeded what we can supply in terms of how may people we can put in the park. there's been no situation that has been more like that then we have had upon reopening and having to operate under tight constraints. we have gotten even better and better at it. i think it will create a reemerging scenario where magic will be even greater for our guests when they come back to our parks. emily: disneyland paris looks like it will be the last to reopen. they were scheduled for april 2. that has gotten pushed back.
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you think it will reopen by summer? bob: we certainly hope so. we follow the guidelines of local governments and local health agencies in terms of telling us when it is safe for us to reopen. i agree with you, that will probably be the last of our parks to reopen again. when it does, we will be there to operate responsibly and make sure we have magic for everybody. emily: disney plus has been a remarkable success. you just passed 100 million users, you released ryah and the last dragon recently. i know you will not share numbers. can you tell us how well that early release premium model on digital is working when customers know they can get it for free a few months later. is that something that will stick around when people are going back to theaters? bob: there are two reasons to do
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this right now. what is pandemic oriented. people have some level of anxiety about returning to theaters or the theaters are not open in big numbers. that gives them an option, flexibility to watch the film without necessarily having to wait for three or four months to see it, but there are also fundamental consumer changes where people are becoming impatient. they want to see movies the way they want to see them when they want to see them and how they want to see them. we have been thrilled with consumer receptivity for our premier access strategy. whether or not this becomes a big part of our strategy going forward is going to be up to consumers. they vote with their pocketbook spirit they will tell us how they want to watch movies and we will be responsive to the consumer. they will drive that evolution just like they are driving the evolution from the linear broadcast world over to the direct to consumer world in general. emily: you still have a may 7
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release date for matt whitaker -- for black widow, and if the name of the game is consumer flexibility will it still be only in theaters on that date, and are you sticking with that may 7 date? bob: as you know, flexibility is something we've been working hard. our situations change. just a few weeks ago theaters in new york and los angeles were not open. now they are open. we are waiting to see how guests respond, how prospective theatergoers respond to the reopening spirit we will remain flexible -- to the reopening's. we will remain flexible. in terms of how the films come to market, whether it is black widow or any other title. if consumers are happy, we love the three optical window. -- we love the theatrical window. we have had unbelievable success in theaters and we think it is
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important to build our franchise. we do not think it is the only way to do it so we will remain flexible. so much is changing in such a dynamic environment. it is hard to predict what will happen with consumer behavior in the next month when it comes to reemergence in the world of normal. we will be watching very carefully and make the call when we have to. emily: you have a big rights negotiation happening with the nfl. just got a big deal with the nhl. you've said you want all rights deals to eat all espn -- all right deals to involve espn plus. what are the possibilities for the nfl on the espn plus? could you get the sunday ticket package? bob: we want to make sure any deals we do with any sports entities going forward not only envision the ability for us to toggle at will towards our direct to consumer platforms
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like espn plus, but also operate creatively for our shareholders. those are two requirements we will have going forward. our ability to toggle from linear to direct to consumer is really important. we believe we can do so in a way that is naughtily going to make our shareholders happy, but make our guests happy, and lead them into this new world of direct to consumer businesses. at the same time a lot of people still like to watch broadcast and linear, so we will practice a hybrid model going forward. emily: are you still planning to release nomadland in china as planned given the controversy? bob: we are proud of nomadland and all of our 15 academy award nominees this year. such great films, such a great opportunity for our guests to watch our films, not only in
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theaters, but also on disney plus. as the governments across the world enable us to take our films there on various platforms we will be there for them. emily: bob chapek of disney, thank you so much for joining us and thank you all for listening and watching. alix: thanks much, emily. taking a look at the next 24 hours. the fed coming up at 2:00. the boe tomorrow. u.s. secretary of state lincoln and national security advisor -- secretary of state blinken and the national security advisor will be with their counterparts in alaska. coming up now, former fed governor dan tarullo, former sec chairman mary jo white will be joining "balance of power" on
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bloomberg television and radio. lots of heavy hitters coming up on that program. guy: other things to focus on, one of which is alix steel and i will be going to bloomberg radio. we talk about the dispute redirecting between the u.k. and the eu. we an hour away from the fed rate decision. we'll becoming you down to that and the crucial press conference. so much over the next few hours. great coverage coming up. this is bloomberg. ♪
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david: from bloomberg's world headquarters in new york to our tv and radio audiences worldwide, welcome to "balance of power," where the world of politics meets the world of business. i am david westin. we start with a check on the markets. joining us is abigail doolittle. nasdaq down again. are the markets waiting to hear from the fed? abigail: it is all about the fed. typically ahead of fed meetings you see markets fall. today we have big moves across asset classes. relative to stocks, we mainly have stocks lower. the nasd leading the way as yields are climbing. right now we have the 10 year yield at 1.68%, its highest and more than a year. that brings into question the valuation, the reflation, inflation. i think that is the big question. traders and investors looking for color as to whether or not fed chair jay powell stand by what he said a couple weeks ago in terms of not being worried about inflation, and if it should pop up the fed has too

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