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tv   Bloomberg Markets European Close  Bloomberg  April 1, 2021 11:00am-12:00pm EDT

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guy: from london, i'm guy johnson. alix steel is over new york -- over in new york. we are counting you down to the european close on "bloomberg markets." as france prepares to enter a month-long lockdown tomorrow, the world health organization describes europe's vaccination program is on except bleak slow -- as on except bleak slow -- as unacceptably slow. opec facing a proposal for a series of output increases over the next few months. we will be joined by goldman sachs's global head of commodities research. and details emerged about deutsche bank executing a stock trade swiftly. let's take a look at the markets and show you what is going on.
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we are beginning to fade a little bit into the close. we've got payrolls tomorrow. that is a huge risk. we are up to 422 on the stoxx 600. we need to get to 433 four a new record. alix: here in the u.s., the s&p top 4000. obviously, tech is leading the way. i wanted to highlight more idiosyncratic story. micron reported a pretty strong quarter yesterday. check out the infrastructure stocks. by the rumor, sell the news -- buy the rumor, sell the news. is that what we are seeing here? the 10 year yield getting a nice bid. an ism blowout tomorrow which some forecast to be very bullish, and your yield now
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under 1.7%. guy: let's talk about what is happening with european stocks. i appreciate that the s&p is north of 4k. alix: you are the one who once a hat -- who wants a hat. guy: i do. i've got a 2k hat. i want a 4k hat. we are at 432 on the stoxx 600. i just talk about the french lockdown. you see that extended across the continent as well. yet, equities continue to pair ahead. the real economy and what is happening in financial markets again continues to confound. reporter: that is the case because forward-looking markets are looking for the fact that yes, europe is eventually going to reopen. we are going to see that growth recovery catch up to the u.s. europe is also caught in that u.s. reflation trade. if we look at what happened in the stoxx 600, it is near a record, but this comes after
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four quarters of consecutive gains, and over the past three months, that has been driven predominantly by banks, energy, and travel and leisure, so those stocks that are going to benefit from that reopening trade. the question now is how much cannot continue to extend? notably, as we do get this negative sentiment potentially creeping more into the european backdrop. alix: the more we are pricing in europe eventually reopening, the stronger the euro is going to be. what are the tailwinds for -- one of the tailwinds for european equities has been the stronger dollar. how to long -- how long do you think that is going to last? reporter: the s&p had autos propelling the dax to highs above that 15,000 mark this week, and that has been driven by the export oriented index, driven by that weakness we have seen in the euro. i do expect with this story of u.s. growth exceptionalism continuing at least through the second quarter, against this
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european backdrop that is not yet catching up, we do still have these lockdowns coming through, so that actually builds moment them to the downside for the euro. further out, we do have that stimulus package coming in through the u.s. we are going to see eventually that rotation away as cyclical upswings occur outside of the u.s., and eventually that should bring support to the euro. in the near term, i do expect euro weakness will continue, and that should provide a little bit of that tailwind needed for european equities. guy: volume is a little like today, but you and i are about to enjoy -- a little light today, but you and i are about to enjoy a four day weekend. alix: rub it in. guy: that is it sadly what i am trying to do. [laughter] i'm stunned the markets are as punchy as they are today. reporter: it is surprising we are seeing investors carryover risk through the key event risk tomorrow. my colleague wrote recently on the blog that we do see bond futures on payrolls day that
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occur on good friday swing well outside of their daily trading range, so he does expect bond fireworks tomorrow. while you and i -- you and i could see some price action. alix: i'm not working tomorrow. i am joining in on that per sec a -- that proseco jobs number. joining us now for more on the equities rally is john bilton, jp morgan global head of multi-asset strategy. your reaction to highs on european equities? john: it is all looking at what is set to be a period of above trend growth, driving some really punchy ism data earlier on. still very strong pmi's a little while ago. i think what is most important here is a lot of the talk around everything from infrastructure builds to global recovery, data around the vaccine rollout in
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the u.s. continuing to be supportive. remember, we are only about a year away from market lows, and typically your average cycle lasts seven or eight years. the idea that the s&p couldn't or shouldn't be powering on towards new highs will probably be wide of the mark when we are still relatively early stage. it is confirmation that that kind of early cycle play, but without a doubt, we think that the earnings are going to deliver this year, and we think the set up for the u.s. is very good economically, although renter interestingly -- although rather interestingly, it could be another reason that starts to see beneficiaries for some of this u.s. economic strength. guy: ok, but on the flipside, you've got france in a low lockdown -- in a new lockdown. europe is locked down. i do wonder whether that narrative will continue to be ignored by markets.
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i appreciate that there is going to be some bleed across the atlantic from what is happening stateside, but nevertheless, in the near term and probably in the medium-term, things look quite tough for europe. john: that is a very fair point, but also worth reflecting the fact that the pmi's, the manufacturing once are the highest we have seen -- manufacturing ones are the highest we have seen -- manufacturing ones are the highest we have seen on record. composite pmi's have come in very strongly. we are still edging towards that magical 50 mark. i think what is important to look forward to is that we are in what could can -- what could be considered to be peak pessimism. but if you look at the monetary policy environment in europe in particular, lower for
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considerably longer than the ecb. you look at the regulatory set up in the outlook for the banking sector, a much cleaner read across in terms of earning and prospects there. you look at the household balance sheet, you see significant savings boosts. so there is a significant amount of debt of demand, even before we look at the international and global economy that can be supported for europe. so yes, certainly none of us like to be in lockdown, but i think we can look forward to this being the market pricing the better forward curve of growth and recovery from where we have been rather than what looks like the headlines today. alix: it feels like that is what the markets seem to be telling us recently. how much of that is already factored in? where will you see the beta for that? john: i think you've got to look at where you've got evaluation gaps. we seen europe have really strong performance over this quarter, partly because of its value tilt, which i think was
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mentioned earlier in the program, but as we have seen yields pickup and yield curves stephen, particularly in u.s. dollars, what that translates to is a better environment for value. one area that we think will be continue to be a positive outlook for the market is the banking sector, although it has significant surge from its lows. it is still priced to tangible book value of around 0.6, 0.7 which is significantly below the 1.3 times you have in the u.s. so there's a huge valuation gap to make up. guy: there's always a discount, john. i appreciate it is big now, but there is always a discount across the atlantic, europe versus the united states. talked earlier on about the process we are going through, and talked about it still being early in the cycle. i wonder how long you think this cycle is going to last. we are starting to see talk emerging, morgan stanley talking about this, that you want to rotate away from the early beneficiaries of the cycle
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turning, the value stocks, the small caps, start rotating into mid-caps. are we already starting to enter that phase? john: john: you look at the performance -- john: you look at the performance relative to the s&p 500, small and mid-cap stocks have already been delivering that kind of performance. so i think it is a little premature to be starting to talk about where we might be moving towards later cycle. we are moving through early cycle very quickly, and that is something you can pickup from seeing how rapidly credit spreads divide, and that seems to be a very good leading indicator of how small and mid-cap stocks perform. what we are seeing is a much lower level of corporate default rates. in fact, some of the pricing of defaults even at today's levels looks a little but i relative to what we expect it to be in a continued environment relatively
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easy financial conditions. a relatively quick move for early cycle where you that that -- where you get that kind of high beta rally, but then then extended period of many cycle where you get cyclical outperformance. what is different from this cycle relative to the last one is we are seeing a path to higher yields and steeper curves, particularly in the u.s. that is an outlook which suggests that value can run a little bit better than it did in the last decade. certainly, although we are seeing yields down a bit today, giving a boost to those longer duration sectors like tech, we think that by and large, as yields gradually move upwards from here and curves remain steep, that is going to be supportive of the value stocks and value sectors. that is why, notwithstanding the valuation cap between the u.s. and europe, we still think europe has got some way to run here. alix: before i let you go,
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really quickly, how do you wind up looking at infrastructure? if you have $1 trillion coming from the u.s., how does that configure your allocation? john: ultimately, this is additional potential boost to growth which is further carrying that. but bear in mind, this is going to take rather longer to push through than the stimulus bill that recently went through. there's a lot more on the table here in green initiatives, how it gets funded, whether it is from taxation or from other forms. that is going to take a lot more negotiation. it is one of the reasons why the market maybe is not taking this in the same way it has taken the $1.9 billion stimulus bill we saw recently. this is a slower burn negotiation. but i think what is crucial, and this implies -- this applies in europe, the corporate sector, we are seeing a very different approach to capital spending and investment generally in this
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cycle, and that potentially points a light on productivity having some gains from here. guy: enjoy the four-day weekend. john bilton, jp morgan asset management global head of multi-asset strategy. news from opec, opec+ agreeing to resume gradual monthly output hikes, according to a delegate within the last few minutes. this is bloomberg. ♪
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guy: investors weighing, debating president biden's infrastructure plan and the potential inflationary impact
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that all of this fiscal spending ultimately could have. earlier today, we caught up with bob prince, bridgewater associates co-cio, about that inflation question. >> there's a lot more potential to create inflation through this type of policy because you can literally put money into people's hands to go spend. there's more potential for inflation. but the question is inflation of what. so you've already had inflation of asset prices, and the qe world inflated asset prices because that's where the money went. whether we have a secular rise in inflation depends on a lot of other forces. it is not just a u.s. question. it is a global question. 80% of the countries around the world have an inflation rate of less than 3%.
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the central banks have been very successful in bringing down inflation over the last 40 years. so you have a limit inflation and stable inflation is a global phenomenon. that is not just a u.s. phenomenon. so if you were going to have a rise in inflation, it would probably have to be global. other countries are not stimulating to the extent that the u.s. is, particularly china. china is in sort of a steady state. on the other hand, any given country's inflation rate can also be impacted by their currency. if you had dollar depreciation, that could raise u.s. inflation rates relative to other countries' inflation rates. it would be deflationary for other economies. so the inflation question i think is just more complex. however, the thing that we can say is that the existence of inflation will be one of the key constraints on whether the mp3
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world and whether the central banks, whether the fed will continue to have the latitude to pursue these policies. without inflation, they have a lot of latitude, as well as the government, to continue these policies, but with inflation and currency depreciation, they start to hit the roadblocks and the constraints. guy: what does this mean for returns? what kind of returns are you targeting in this new kind of environment? is it different to the kind of return structure you expected before? it has been a very turbulent time. your returns have been hit. do you expect your returns to improve from here? john: if you look at the returns of assets as they come packaged, they are likely to be low. you start with direct yield on cash. you have negative yield on cash. real yield on cash has been a source of destruction in the last 10 years of about 15%. now you have negative real yields on bonds, and all assets compete with cash and bonds, so
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yields of other assets are also coming down. looking backward, that has elevated their prices, but looking forward, that has reduced their expected returns. so the whole return structure has dropped, and that is particularly relevant in the u.s. and europe and in the west, where they are faced with the zero interest rate problem. when you go to china and asia and the east, you don't have that issue. we shouldn't just look at the world through the eyes of the west. we should look at the investing world globally, and we think in terms of actually balancing east and west in terms of your exposures, and recognizing the unique risks, but also the unique opportunities in those two worlds are very different in the nature of their opportunities. so you really want to be working with both hands on both sides of the world in an investment portfolio. alix: that was part of our
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conversation with bob prince, bridgewater associates co-cio, earlier today. it is part of the approach that he seems to be taking for going back to work, which i found interesting as well, at a time where we are getting notes from p wc saying take fridays off at noon, but it is a hybrid we will all do what they seem time. guy: do you remember when we talked to a professor out of california a few weeks back, and said basically, you have to have everybody back in the office at the same time, both from an ability to get the most out of your team, from a quality point of view? it looks like a lot of firms are now adopting this. you can work from home, but we need to be on the -- we need to be in the office on the same day. you've all got to be in on a tuesday, wednesday, thursday. you can be at home on monday and friday. alix: for work for ken moelis and get $10,000 from into health.
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it's a really fun conversation. check it out online. coming up, how the german lender avoided a hit in the archegos collapse. this is bloomberg. ♪
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alix: more details emerging over the fallout from the archegos driven fire sale in the markets. deutsche bank had exposure to the firm and was able to sell its holdings just in time and emerged unscathed. joining us with more is steven arons, bloomberg reporter. how did they do it? steven: if you look at the timing, it says they sold friday, and by that time, other banks had already started selling their exposure. so it looks like they could've been late to the party, and yet,
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they really dodged a bullet there. guy: they are offloading their prime business. was this luck or still -- or skill? because speed was really important here. steven: i think it is a mix of both probably. you needed good timing to pull this off, but as i said, this case is after other banks had started selling their exposure, so it must be luck as well. alix: fair enough. but it does say something that the likes of morgan stanley or goldman sachs avoided the kind of losses that credit suisse didn't. where is deutsche bank right now in reforming its business, where credit suisse is going the opposite direction at this point? steven: it seems like those banks have turned some kind of corner here.
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they had a lot of growth last year, and they will have 20% growth this quarter, so it is really going well for them, and the changes they implement it in the investment bank should have some -- they them plummeted in the invest -- they implemented in the investment bank should have positive effects. guy: i appreciate that they managed to get out of this tight spot, and they seems to wriggle out of wirecard as well, which is a pretty big positive for investors. but they are skating pretty close to the edge right now, i would have thought, as they try and do this. it is working out right now, but is this delivering what it needs to from an investment point of view? investors are looking for this to become much more of a corporate focused bank, taking out some of the riskier ends. are they actually delivering that? it comes back to this luck question. steven: the turn in the
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investment banks which is now happening, which is surprising, that puts risk back on the balance sheet. they are big and fixed income trading. they still have equities on the balance sheet. that can still be a problem. so there is still an amount of risk. it could come back to hunt them, you're right -- to haunt them, you're right. guy: thank you very much, indeed. the european close is coming up next. we will give you the final numbers as we head into the long weekend. that is coming up next. this is bloomberg. ♪
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european stocks are closing down your let's go through the price action. volume quite light. we are continuing to ratchet higher when it comes to european stocks. we are just shy on the stoxx 600 of a record. we may get there but it looks like we are struggling. 432 is where we are. we came in 433. very close to that record. we'll see what comes through on monday. let me tell you what is been going on with the individual markets. pretty even stevens. we are up .6%. tech has been broadly leading on both sides of the atlantic. europe has less of it as a result of which we do not see the significant bounce we are getting stateside. interesting to see the s&p through 4000. let's look at the breakdown in terms of the sector story. the tech narrative at the top.
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we see yielding goats down a bit. as a result you can pry some of these stocks better over that longer-term. financial services also up. energy, we will talk about opec in just a moment. energy stocks are the biggest drag. maybe white london is outperforming a little bit. let's look at individual names. the french technology company down 12.6%. there is concern about units in the united states, the market not liking this french technology company. lufthansa we have seen an incredible run so far for travel and leisure stocks, but there is always been overhanging concern some of these airlines will start looking for equity raises. lufthansa is starting to flag that. it is looking for an equity rate
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and flagging that and have a meeting of shareholders. that stop reacting to that, down 4%. delivery, this is a huge story in london. -- deliveroo, this is a huge story in london. expected to shift in london as a tech hub. that got shredded yesterday. today it has continued to fall. the final story is credit suisse. we were just talking about deutsche bank. it has been a shocking five days for credit suisse. you can see the impact. that is friday when all of the action happened. monday morning that stop gets -- that stock gets knocked and it continues to decline. five days, credit suisse down 17.5%. alix: opec-plus meeting still underway. they are looking to gradually raise oil production over the
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coming months. oil taking it pretty well, right now up .3%. will kennedy, bloomberg editor for commodities, joins us now. give us the latest on how these conversations are unfolding. will: the ministers are currently in a virtual zoom call to discuss policy moves. that is going on at the moment. going into the meeting never two options on the table. the option to hold for a month or to gradually increase production. it seems at the moment they are heading towards the section option -- the second option. there is a polin neri agreement to do that. we do not know how fast that -- there is up limit neri agreement. -- there is a preliminary agreement. i think the market is taking it well because the next expectation is they will go fairly slow. it will be 200,000 barrels a day each month and rising demand,
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the strength of the recovery we are seeing in the u.s., especially with people flying and driving more. guy: is this about what customers want as well? customers are concerned about a high oil price. india has talked about it, the u.s. has talked about it. there is a balancing act. will: i think these audis who are desperate for their -- i think the saudi's realize they cannot -- it is interesting there was a conversation between the saudi oil and the new u.s. energy secretary, the day after which she tweeted she wanted a constructive relationship and saudi arabia should prioritize affordable energy. prices going toward $70 a barrel, that threatened three dollars a barrel in the u.s.. that is definitely part of the consideration.
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guy: looking forward to continuing coverage. thank you ray much, indeed. -- thank you very much indeed. will kennedy. jeff currie, goldman sachs global head of commodities research joins us to give us his take. how do you expect the supply side to evolve from here? jeff: this announcement is pretty close to being over home plate, which is why the market has taken it rather benignly. i would say the consensus view and our view was zero in may, one million in june, one million in july. what you are likely to get now in that reversal of the original unilateral cut, you'll probably get something like 250,000, 350,000, 400000 and then a reversal of the cot. it amounts to the same thing. the only difference is you are getting a little bit more upfront, a rounding error for
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all practical purposes. the bigger question is what is going on in demand-side. the demand numbers rocksolid in the u.s.. two things to point out about the demand picture. one, it is not just mobility and a rebound in services. the ism shows it is part of manufacturing. the other point is when we look at growth right now, and this is apparent with the pmi in germany last week, it is not just about china and commodities. the west is an important part of this story. it is broader across the economy and across geography. yes you have lockdowns in europe but we think that is temporary. alix: i am wondering how you look at the supply side in relation to opec. part of the conversation was that russia and kazakhstan were going to want another exemption but the uae and iraq were going to state not again, we want to
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sell the oil we want to sell. what kind of pressure to we think we saw from them? jeff: 20% of opec cannot reach their quota because of underinvestment. the fact that saudi arabia could cut production by 11% and watch prices rise by 40% and we still not see a supply response in the current environment is telling you near-term supply is inelastic. those that have the ability, core opec and russia are sitting on the spare capacity matters. we will probably some of that increase in the coming weeks. the key message is the -- guy: you've laid out the demand story, you've laid out the supply side. how to prices go higher from here? given the set up with a story in the states and what is happening in europe, in the market, where
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do prices go, can they be more elevated? jeff: our target is $80 a barrel on a brand basis. when you've heard it from opec, they expect demand to be up 3 million barrels per day over the next three months. there supplies up one million. that means the deficit we are already in is likely to accelerate. we do expect inventories to be normalized late q3, early q4, at which point we need to start talking about bringing on new production. there is still investment going on. you've seen a small increase in drilling, but nothing that significant. the bigger point, thinking about not only is there strong demand going on in energy and metals and across the commodity complex , there no investment in supply. saudi faces and inelastic supply curve near-term.
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we have seen no greenfield investment in metals. reduction in latin america, the exports are down 20%. i can keep the list going on and on. the upside is substantial across the commodity complex. alix: that is why many are calling for a super cycle and the base industrial metals whereas oil is shakier in terms of the super cycle. what role do you feel like biden's infrastructure plan will do to move the supply, the super cycle supply thesis, as in we need more copper, we need more lithium, we need more cobalt? jeff: let's not discount oil from the super cycle story. the investment in green does not hit demand growth until 2024 or 2025 and we do not see demand rolling over until 2031. over the next three to four
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years the stimulus from this infrastructure bill will increase demand. we estimate $2 trillion of green capex increases u.s. oil demand by 200,000 barrels a day. a commodity super cycle story is never about some by your supply can only -- is never about supply. supply can over -- to only create a one-off increased. in order to have a stable supply need a demand story. every super cycle in commodity has been associated with three distributional policies towards lower income households. what was the 1970's about? the war on poverty. what was the chinese bull market ? it was the outsourcing arbitrage that redistributed middle-class america and europe into china that created the sharp increase -- you basically transport wealth to rural chinese workers and it bought a lot of commodities.
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i think the key point, it is a demand story in this infrastructure bill is part of the broader demand story. guy: just as an aside, the white house is pushing the lines of this infrastructure package, and i'm sure this is designed to allow the u.s. to compete and stay ahead of china. if you think about where the money is being invested, i wonder whether it makes the united states more dependent on china. thinking about rare earth, but there are plenty of other factors. the u.s. will be sucking in huge amounts of imports to make this happen, and some of that will be coming from china. jeff: let's take rare earth metals. there are other places you can get them. the u.s. has enormous reserves of rare metals. they do not touch them for strategic reasons. thinking about talking about the
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lower cost of metals, you can take them from china. you can take them right now at lower prices. what is the super cycle thesis predicated on? we call it reving commodity demand. what does vr stand for -- it is versatility in supply chain initiative. creating resilient supply chains. you have a semi-cold war going on with china. as a result you start to create more resilient supply chains. we are seeing that in the u.s.. china pushing bout -- pushing back on exports is part of that versatility of supply chains. i would like to point this out? when did the americans build their strategic reserves? the 1970's, during that cold war. we have a similar dynamic in place. alix: what is goldman's favorite way to express all of this view? jeff: we like to buy bcom it is
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a balanced index. i am talking to bloomberg. alix: we like it. jeff: it is a balanced index. give energy, you metals, you have agriculture. we find it to be the best to play the story. guy: it was down last month. how should i think about that? jeff: it was down 2% or 3%. given the fact it was up 25% over the previous three months, the market is consolidating, it is taking a breather. we are confident and convicted in the story as we look into the end of q2 and q3. we view the pullback as a buying opportunity. alix: always fun to catch up your jeff currie, goldman sachs head of commodities research. we will have more later on in commodities edge. that is more about hydrogen landscape, which will be hot in
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the next 15 years. we will take a look at that coming up at 1:00 today. guy: looking forward to that. let's check where european stocks have finished the day. first day of april. we are pushing ever higher. the ftse 100, the dax, and the cac 40 all higher. energy stops acting as a break. the start of a new quarter. light volume today as we head into that long weekend. this is bloomberg. ♪
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ritika: i am ritika gupta live in the principal room. coming up tomorrow, jobs day special on bloomberg tv and radio beginning at 6:00 in new york and 11:00 in london. this is bloomberg. let's check in on the bloomberg first word news. pfizer's coronavirus vaccine
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remains highly effective after six months according to new long-term results. follow-up data from the final stage trial shows the vaccine was 91% effective in presenting systematic cases. the timeframe one from one week after the second dose to six month after. meanwhile there are racial disparities in vaccination rates. across the u.s., according to data compiled by bloomberg, states have inoculated almost twice as big a share of their white population as their black population several states, including arizona and florida, the gap is more than twice as big. they cite is taking longer to build up trust amongst committee of color -- unemployment relates -- unemployment rates remain near the lowest levels of the pandemic. jobless claims or 719,000, well above economist estimates.
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global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am ritika gupta. this is bloomberg. alix: more details on opec-plus. they will gradually increase their output over three months. about 350,000 barrels of oil a day in may and june. 44,000 barrels in july. this was a surprise for the market. no one was expecting this. prices totally holding up. still holding 63 for brent. guy: it is amazing that is going on. interesting to see how this works its way through. there is a lot of countries pushing more into the market. alix: cheating is totally ok to say in that circumstance. guy: i was just being british and polite. alix: sorry. i am new york. i am kind of rude. [laughter] guy: it will be interesting to see how this works its way through. can you manage a gradual increase without everybody going
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for it, because at the moment they have done an ok job in terms of that. i think the pushback will increase. it is interesting to see libya, you look at the shipping data starting to increase its output. ritika was talking about the payroll special we will be doing tomorrow. major equity markets in the u.s., france, germany, all closed. it is good friday. they are still release numbers. i'm still scratching my head on this one. let's get an idea of what we can expect in terms of the jobs number. bloomberg's mike mckee is here to set it up. the lowest is 250,000. the average is 650,000. a lot of people suggesting the number could be as high as one million. are we starting to get in gear with the jobs recovery in the united states?
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michael: i think that is what we say. i love how you said we are putting on a special. we do not know we are turning the corner, but everybody suspects we are because most of the data has been very good. forget the jobless claims numbers. the other numbers we have gotten in the last month have been good enough people are predicting it is turning around to march. the other only issue is how big is the turnaround. you have incredibly wide diversions from 232,000 to one million. the ism number that came out at 10:00 wall street time today. it was the highest since 1983. extremely strong numbers, except the number of people who have been hired in manufacturing is not keeping pace. we are getting the production,
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but not the hiring. we are expecting 35,000 new manufacturing jobs or replacement manufacturing jobs tomorrow. it is not yet certain how all of this will play out. alix: what about wages? michael: wages will be expected -- affected by who goes back to work. 650,000 is the median forecast for the day, unemployment falling to 6%. the real question is service industry workers. service industry workers were laid off the most. they were the ones at the restaurant and things like that that lost their jobs. they have struggled to come back. they are still below where they were. at this point, if they come back that will depress wages because they get paid less. if they do not come back, wages should stay high. it is a number you cannot count on until we get closer the employment levels we had before the pandemic. guy: let's talk about that.
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janet yellen talking about returning to full employment late next year. what kind of prints do we need to see if we are going to get back to those levels? michael: right now we are about 10 million jobs short. if we will get there by this time next year you'll need about one million a month. there are some people who are predicting that kind of gain. neil dutta has said the next seven months we should see one million jobs a month. also remember even if you go back to where we were, we would not be where we should be because we would've been adding another 200,000 jobs a month. you are still going to be 12 million or 13 million behind. the number a lot of people are watching, and it is on our jobs report estimates page, is the participation rate. the fed wants to see people coming back in the labor force, looking for jobs and getting
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them before they will decide we are at full employment. alix: really appreciate it. thank you ray much. i'll be watching you tomorrow morning. bloomberg's michael mckee. this is bloomberg. ♪
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alix: live from new york, i am alix steel with guy johnson in london. more updates from the opec meeting. it looks like the deal is done. they will be increasing production starting in may, about 350,000 barrels in may and june a-day and upping that in july. we do not know what saudi arabia will do. they were cutting in one million barrels. we do not yet know what that will mean. guy: it is interesting the conversation had with the u.s. in which the u.s. hinted at the fact they do not want oil prices to get too out of control. the only thing that will upset -- you do not want anything to upset this recovery.
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let's not let them get out of control. alix: the sally's do like a surprise -- the saudis do like a surprise because the market was not affecting this coming up, elise gould is the economic policy institute senior economist. guy, you and i have more to do. guy: you're only going to be there for half an hour. you're going to do commodities edge, which today is a good thing to be doing given what is happening with opec. i will be there for the full l our garrett will probably -- i will be there for the full hour. this is bloomberg. ♪
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kevin: from bloomberg's
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washington, d.c. bureau to our tv and radio audiences worldwide, i am kevin cirilli. taylor: from new york, i am taylor riggs. welcome to "balance of power" where the world of politics meets the world of business and it is the world where our world collide. i want to talk about gina raimondo where we think about my world falling into your world of d.c. and politics. what struck out to me, not only being the first governor of rhode island, taking on unions, trying to preach some of that fiscal responsibility, and now folding into your world of politics. what do you make? you spoke with her earlier. what were the key takeaways? kevin: first and foremost, it is not every day you get to talk to someone who has the experience level in the public and private sectors, and now she is utilizing that notches for domestic

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