tv Bloomberg Markets Americas Bloomberg May 18, 2021 10:00am-11:00am EDT
guy: tuesday the 18th. 10:00 a.m. in new york, 3:00 p.m. in london, 30 minutes into the trading day stateside. i'm guy johnson. alix steel is over in new york. welcome to "bloomberg markets." it feels like a slightly quieter market today. european markets, european currencies definitely on the front foot. the dollar under a bit of pressure. alix: good to have you back. did you buy jeans, most important? guy: i went uniform shopping. i got stuff for work, which i haven't done for the last year and a half. so the wardroom is looking much better -- the wardrobe is looking much better. alix: this is a big deal. the real action is definitely in the currency market. otherwise, not that much movement. bank of america had their latest fund managers survey.
bitcoin is now the most overcrowded trade. bit going down by about 2.5%. that might explain some of the recent volatility. the nasdaq 100 pretty much going nowhere. euro-dollar having its best four-day streak since the end of last year. the bloomberg dollar index right around a three year low. all of that had indications that had, locations. new york crude at $65. brent at one point hitting 70. you would expect a weaker dollar should be good for the commodity market. not so uniform today. guy: the other take away from me from the bank of america survey was just how positive everybody is on europe. in some ways, that feeds through into the flows story, and then into what we are seeing in the currency markets right now. the question is at what point does this start to become problematic. that is going to be something to watch out for.
one dollar 22 cents is ok. $1.25? we will see. alix: let's get to some of the other top stories of the morning. jp morgan is making some changes to its c-suite. it named daniel pinto as sole president. sonali basak has more on these leadership changes. sonali: this is huge. gordon smith, the person who went down to washington last year when jamie dimon had his heart surgery, and he's somebody who's been a long time deputy. however, he's over 60. we knew that the reigns are going towards the next generation of this bank. think marion lake, jen pip sack. this has been a rumor elf -- a rumor mill for a very long time. what we know about jp morgan is they like to build their bench very deep so that people get a lot of different experiences.
the two women are overseeing a business that serves half of all u.s. households, and it is really giving them a chance to run a business that is a heartbeat of the american economy. guy: absolutely. we've already got one woman running a big u.s. bank. it would be nice to have two. sonali: and it's funny, very similar businesses. jane fraser had also been out of that consumer business over at citigroup. guy: it is interesting to see the depth they are trying to build in terms of the skill set, understanding business from top to bottom. if you want to run the business, you've got to understand it, and that seems like what is happening here. we will look for coverage throughout the rest of the day. massive implications for wall street and consumer banking in the united states. another factor that is also part and parcel of this story, the housing market in the u.s. still strong, but falling more than forecast in april.
is it now supply chain constraint? is that the story we need to be talking about. rising material costs, we have been talking about them for a while. is that holding back the construction sector? let's find out. bloomberg economics' senior economist joining us now. reporter: i think the story in april is just a simple normalization of the swings we saw from february to march. february was affected by severe weather. in march, we saw a big catch up. now things are normalizing. that is why we see a big decline in april, simply because by historical norms, april is a very strong month and we are seeing strong replacement -- strong retracement from march that would result in a severe decline in housing starts. i think what is important to know is that we are severely under building relative to demand, and if you just look at
a simple chart of new home sales and housing starts specifically purposed for sale, you will see that the demand is particularly stronger than what builders are producing. you mentioned a lot of different things such as a severe shortage of labor, severe shortage of material. these are all building into this concept. alix: great point. linda shall into -- yelena shulyatyeva of bloomberg. for more on retailers reporting earnings this morning, abigail doolittle has more. abigail: you can see that home depot and macy's in particular are really knocking the cover off the ball. it has to do with a common nation of pent-up demand, consumers want to get back out there, reopening, and of course,
those stimulus checks. in fact, home depot stock at this point is the only one of these that is lower. earlier, all three of these had been higher, but at this point, home depot is not higher. on the earnings call, not really -- they are ducking the question, really, of how much of their strength has to do with stimulus because they have not provided guidance. on the other hand, walmart and macy's beat similar to home depot, but they also upped the outlook, saying that it looks like folks are coming back to shop and go out to the malls. walmart's best day since number -- since september of last year. the super composite retail index is interesting because on the year, this one is really underperforming, up just slightly. the biggest component of this index, home depot up 25%. a low of 11%, than target, amazon and gamestop. it is interesting that on the year, that index is just about
flat. guy: it is interesting to see where the drivers have come. dave wilson talking about that, in terms of the drivers for the main indices. more on that to follow. later today, we've got an interview with macy's chairman and ceo. that conversation at 3:00 p.m. new york, 8:00 p.m. in london. republicans say that they are on track to deliver their counter offer to divided biden adminstration's infrastructure package. let's talk about this. bloomberg congressional reporter laura davidson joining us. what are we expected to hear? laura: republicans are coming up with their counterproposal. they initially proposed a 558 billion dollar infrastructure plan, a far cry from bidens $2.2 trillion plan. this will come out later today. we will see if it is closer to that $2.25 trillion. republicans have said we are not
going to do 2 trillion, but maybe we will do $800 billion, $900 billion. the key question is can republicans and democrats agree on what should be in this proposal and how to pay for it, and this is where the negotiations are really going to get tough. republicans say they don't want to do any tax increases, so coming up with nearly $1 trillion of user fees, public-private money, getting more money from the irs in terms of enforcement, they are going to have to crunch the numbers and see if they can come up with a big agreement. this is really a critical test of what biden campaigned on. he could be a dealmaker, he could cut these deals in congress. we will see, and we will really know in the next couple of weeks if there will be a bipartisan for structure built riff democrats will choose to go it alone and pursue their more progressive agenda. alix: coming up, more on u.s. infrastructure spending, plus the m locations for the market. legendary -- the implications for the market. which a dairy investor --
♪ pres. biden: when i ran, i said i wasn't going to be a democratic president, i was going to be a president for all americans. the bottom line here, we are going to see if we can reach some consensus on a cumber mise -- on a compromise. > i think there's an opportunity we can work together on infrastructure. sen. mcconnell: there is certainly bipartisan desire to get an outcome. >> as long as it is not anything about tax increases and it is dealing with him for structure. sen. mcconnell: clearly, senate
republicans are not interested in revisiting the 2017 tax bill. i think the president and vice president understand that. alix: that was president biden and republican congressional leadership discussing the prospects for a cumber mise at the white house last week, that super not uncomfortable meeting. they are set to counter president biden's proposal today. joining us now, abby joseph cohen went, goldman sachs senior investment strategist. lust to get through with her -- lots to get through with her. i replaced do have you on today. abby: very pleased to be here today. alix: so what are the short-term and longer-term implications of an infrastructure proposal, and how do you model it if we are looking at $500 billion or $2 trillion? abby: i think we need to set the stage first, and that is to say that the united states has really fallen behind as a
country with regard to interest structure investment. if we look at the way we used to spend in this category, for example, as a percentage of gdp, it has fallen very sharply. so what we basically find is two things. number one, the condition of our current infrastructure isn't so good. the society of civil engineers gave us a c-report. doesn't sound very impressive -- a c- report. that doesn't sound very impressive to me. let me give you one number from the recent survey by the world economic forum. they looked at infrastructure in many different categories, and one of those categories had to do with computer and telecom technology, and how it has been adopted within the economy. the united states, which has the strongest tech companies in the
world, ranked 18th, which means we are not doing a very good job. a lot of this has to do with the very unevenly distribute it broadband in the united states. guy: abby, compared with who? who is the u.s. falling behind? because the first name this brings to mind is china, and then we get into the whole geopolitical narrative. is it china, europe, or somebody else? abby: it is both. if we compare ourselves to china, it is a little bit apples to oranges because as a developing economy, you would expect them to be spending more on infrastructure as a percentage of gdp. but we are falling behind our own record. if you look just at federal investment in infrastructure, it is now about 2.5% of the federal budget. a couple of decades ago it was 5%. if we compare ourselves to other developed economies, that is
where i am really concerned. because what we see is other nations have a very specific policy plan in place where they believe keeping their infrastructure up to snuff and ready for that when he first century industries is really a priority, and we have not done that in the united states. other countries ranging from canada, australia, france and so on really have much more significant direction not just from the national government, but also from their local government in this regard. alix: and we see it all the time. even though colonial pipeline was ransomware, that is clearly still an issue. you are looking at the bridge on the mississippi river. you had the texas freeze and their grid as well. what dollar amount has your research showing that we need to fix it, either public or private? abby: i am not in a position to judge that, nor do i think is anybody in the investment community. so instead, we use the data from the civil engineers, who
actually go out and examine and inspect tens of thousands of bridges, many millions of miles of roadway, and their estimate is that just to fix what we have is on the order of $2.5 trillion. guy: let's talk about this from an investor's point of view. i am looking at the united states. should the united states carry a discount because it's infrastructure isn't good enough? and if i am an investor, how do i invest to make sure that i am seeing the benefit in my portfolio when the u.s. does spend money? abby: those are wonderful questions, and things that we are, as a nation, in the process of trying to sort out. until we have a sense of how things play out in washington, some of this is very much on quicksand. we don't quite know where we are going to end up. so let me try -- try my best
to answer your questions. i think there is recognition by both parties that we need to invest heavily in the 21st century infrastructure that will help not just our urban areas, but our rural areas, and our rural areas are falling fall behind -- falling far behind with regard to broadband. how can you have precision agriculture if you don't have a wi-fi signal? there are the kinds of issues we are looking at. number two, we are also looking at where we have fallen behind not just in terms of government spending on it for structure, but also in terms of private spending. one of the things that does encourage us a little bit is that we are seeing pickup by some companies, some industries in terms of their long-term investment in capex, r&d, and so on, but it has not kept pace with the dramatic increase in corporate cash flow. so that is something of concern to us. the other thing to keep in mind is that the u.s. model is
different from many other nations. we had a federal system. we rely on the federal government to do some things. we rely on state and local to do other things. i mentioned before that the federal commitment as a percentage of the federal budget is now half of what used to be. when we look at the state and local level, we run into other problems because so many state and local governments are having budgetary issues. what do you cut back? you cut back on the things your voters don't see. what don't they see? they don't see the water pipes that are buried. they don't see the under structure of roads and so on. so we have a lot of different maintenance in this country, and i think we really need to address those issues. fix what's broken, and think about what we need in the future. alix: if we get $2.5 trillion from the government, is that inflationary? abby: i believe that we need to look at what the money is going
for. we are talking about, for example, and i am just making this up, $2.5 trillion over a 10 to 20 year period, which is what the civil engineers did, i don't think that is inflationary for a couple of reasons. number one, because it is not being spent all at once, and number two, it is an investment in the future. we really have to distinguish from a policy perspective spending that is spending for spending's sake versus spending that really invests in the future. what does that include? infrastructure for sure, research for sure, and education belongs in that category, too. and this is not a new concept. abraham lincoln, perhaps the first infrastructure president, believe very strongly that you needed to invest in colleges and engineering schools, and you need to invest in the young people who could move the nation forward, and it was that sort of
investment in the 1860's, during the middle of the civil war, that really set the united states up to become a leading nation by the beginning of the following century. guy: as we wrap this conversation up, i have to get your take on what is happening in financial markets, particularly equity markets. what is your sense of valuations right now? we are going through a huge rotation. this from a financial debility point of view, do you think we are starting to get a little frothy here? abby: the valuations clearly are at very high percentiles relative to history. the only valuations that are not are things like equity risk premium and so on that key off of inflation and interest rates. as you have done such a great job discussing, the fact that inflation interest rates are on the way up, i think we have to recognize that returns overall in the u.s. equity market from this point will be very modest, and perhaps volatile compared to what we have enjoyed, especially
over the last 12 to 15 months. but i think there is a rotation going on. investors are looking at where earnings growth will be coming from, and what appeals to me is that investors are acting like investors again. there's less emphasis on momentum and more emphasis on relative valuation, and which of the companies that have the strongest cash flow growth and are investing that cash flow for longer-term purposes, including capex, including basic research, because those are the companies that will be leadership companies over the next handful of years. guy: abby, always interesting, always insightful. thank you very much for your time today. we greatly appreciate it. abby joseph cohen went of goldman sachs, indeed -- abby joseph cohen of goldman sachs, thank you very much, indeed.
♪ guy: 24 minutes past the hour. live from london, i'm guy johnson. alix steel is in new york. this is "bloomberg markets." let's talk about the future of bond. amazon reportedly in talks to buy mgm studios, its biggest push into entertainment. mgm's library includes bond. some classics in their, "dr. zhivago." alix: "gone with the wind." guy: dave wilson is here to tell us more. dave: the information in
"variety" that a deal is in the works, saying amazon has been talking with metro-goldwyn-mayer for weeks, and possibly a $9 billion deal. why would they decide to go this route? using about all of the competition that amazon is now you think about all of the company -- you think that amazon -- you think about all of the competition that amazon is now facing. netflix, disney+, paramount+, hbo max, apple tv, youtube tv. you have to think about a way to combat all of that programming, and -- all of that competition, and programming is one way to do it. amazon has its own movie studio, but it takes time to build up franchises the way that mgm has over time. to have this come on the heels of at&t's agreement to spin off warner media and combine that
with discovery, it really does get your attention. you see where the whole lineup comes with amazon in terms of their actual business, they want to be able to bring in more subscribers, and a way to do that is to have the kind of program that metro golden meyer would have -- metro-goldwyn-mayer would have. alix: we have reached that breakdown. i was talking to bloomberg intelligence yesterday, -- ok, we have some working news. colonial says the pipeline system is currently down. we assume that every thing is working, but the communication system is down. we will bring you any headlines as they cross. this is bloomberg. ♪
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london. this is "bloomberg markets." home improvement may still have time to run. home depot posting stronger-than-expected results in the first quarter. it mirrors the sales boon we have seen at macy's, as well as walmart. stocks are rolling over a little but here. consumer reporter jonathan roeder joins us now. you have been listening to all of the calls. i just want to get your take away. can we see this kind of strong sales growth in the future? what is the negative stock reaction telling you now? jonathan: that is the big question people are asking right now after home depot. obviously you have a 20% gain roughly before today in the stock on this year. so people are asking themselves how much of this is from the stimulus. there's this pent-up demand that we are seeing, and across retailers, people are still, to an extent, stuck at home. but that is changing quickly with vaccination rates.
people are getting more into restaurants and travel. so there could be this big boom from home spending. guy: is that what we are seeing for macy's? macy's points to a pickup in closing sales, apparel starting to pick up again. is that the shift we are going to see? home depot to macy's maybe represents that. abby: i don't know. -- jonathan: i don't know. i don't think it will be that neat of a line from one to another. there will be bumps and dips in the road for both. i think overall, home depot clearly is positioned pretty well going forward, even as this home spending boom does fade. macy's has a little more structural issues they are working through, but they clearly see that there is a
rebound happening, and they expect those sales to accelerate. guy: we are going to leave it there. thanks for the heads up. thank for giving us a walk-through of what we have seen out of retail, generally pretty positive. it is interesting to see the stock reaction not so positive, but we have come a long way. beyond retail, you've got to think more broadly about what is happening with inflation, building across consumer and industrial sectors. elias sabo, codi ceo, joins us now. they make everything from safes to outdoor fitness gear. thank you for your time today. let's talk about inflation. how strong an input factor is it for you right now? elias: good morning, and thanks for have me back on. we just got through our first quarter earnings call, and we saw really robust demand.
i just heard your guest talking about home depot and macy's, and how retail sales have picked up. we saw that with really incredible demand, and i think because of the demand pickup, we are seeing inflationary pressures that are manifesting throughout the portfolio right now. mostly on the commodity side today, but then we are also seeing it in select areas like shipping. i will give you an example, containers cost double what they would have cost four months ago for cargo ship's, and even worse than that, the time has extended to double, so we are seeing companies that want to move up in the queue are paying premiums to the doubling of costs that i happened, so we are seeing rapid increases in inflationary pressures, and as a result, we have to push those through. typically it comes with a little lag, but it is definitely having a material impact. alix: what was surprising on the calls for home depot, macy's,
and walmart's they didn't seem that distressed about the inflationary impact, meaning they can pass the costs on. how successful have they been at doing that? is there a lag? what do you do, and how do you do it? elias: we started seeing our costs really rise in the first quarter, and it was sort of at the end of the first quarter where it started becoming a little more acute. as i talked to our investors a couple of weeks ago, we do have the benefit of operating leverage with demand rising so quickly. that offsets a lot of those costs, so some of that can be absorbed in. but ultimately, you're going to have to push it through to your customers. depending on what type of distribution you have, we have agreements with our retail partners that pricing has to move in 60 or 90 day increments, so we haven't pushed through as quickly as costs have been absorbed. i would say for the retailers that you just mentioned, they are going to start seeing their vendors push through pricing
may, june, july, and i think that is when you are going to start to see consumer inflation start to pick up or materially. guy: one of the conversations we continually have about inflation is that it is going to be transitory. i am trying to understand what transitory means. how long do using this lasts for? how long do you thing are going to be in this room phase? what does that mean in terms of the way that you're planning? elias: on the first part of it, on the boom phase with demand, we are checking and really looking at this very closely on a day-to-day basis because one of the things you don't understand, having only goings -- having only gone for a pandemic wants, is how some of these demand pattern changes, how lasting they are going to be. so there's a big shift from services to goods, and now that
the economy reopens, do goods start to come down in favor of service economy growing? we are looking at that very closely. what i will tell you is the amount of things, and we get this data in on a daily and weekly basis for all of our companies, our bookings continue to exceed our sales levels, so any time are above a one book to bill ratio, you have in anticipation that demand is going to continue to taste -- to stay strong for some period going forward. in terms of the question about transitory of elation, it really comes down to there was a lot of capacity that got ratcheted out of the system when the pandemic hit, and it has been very hard to bring that back on as quickly as demand has come back on, and personally, i think there's a lot of deflationary forces. we had to adopt technology, adopt different ways of working as part of the pandemic. that should be long-term deflationary, disinflationary at a minimum. but what we are seeing his capacity struggling. alix: on the flipside, i am
curious as to how you see consumer spending in your business because that will sort of illustrate if those impulses will outweigh those impulses you were just talking about. are they spending now because they are worried prices will be more extensive and the future because of supply constraints? or are they still holding off, assuming there will be a cheaper price later? elias: every time we run sales, we see big booms. i think there were a few things that have really caused demand to increase, and these are some of the uncertainties that you just have to deal with. we had unprecedented levels of transfer payments that occurred, along with direct stimulus payments that people got. we would see demand in our direct to consumer channel spike the next day. when we run a sale, we see demand spike significantly, and the level of increase is similar to what we would have seen historically. so consumers are still looking
for sales. i don't know that it is as much dependent on an expectation of runaway inflation that is happening, so you need to buy today in order to not pay significantly higher prices tomorrow. we have seen this trend towards demand growth across all of our consumer businesses over the last six months, and it has really been steady and hasn't started to turn down at all. so it feels a little bit more sticky to us. alix: interesting. i'm waiting for all of the sales to happen that just aren't coming as much. elias, get to catch up with you. that is why guy went out to sales. guy: you are really upset about this. alix: i was going to help the retailers clear their inventory, and there was no inventory. that was the problem. guy: absolutely. talking of inventory, residential, commercial. alix: sure, inventory for stores, ok. guy: i am trying to make the
ritika: this is "bloomberg markets." coming up, judith hartman, ngc cfo. this is bloomberg. ♪ alix: some breaking news for you. bank of america is going to raise the minimum wage to $25 per hour. that is the headline crossing the bloomberg right now. i'm interested to see what areas this affects the most, and other banks will have to wind following suit. this is another company raising
wages, from mcdonald's to amazon, and all different areas of the market. guy: is this what wage price inflation looks like? what i am wondering, we are seeing, as you say, headline after headline. we are raising arm and mom wage. why are we raising our minimum wage -- raising our men wage. why are we raising our men wage -- our men wage -- our minimum wage? we are struggling to attract the people that we need. while there is still quite a big output gap, clearly there are significant clusters now where companies are struggling. alix: here's another one in the release, that it is also going to require u.s. vendors to pay employees dedicated to the bank $15 an hour or more. let's say the labor shortages based on whatever you blame it
on, but these wage prices are sticky. you are not going to all of a sudden takedown minimum wage because you can get workers. a signing bonus, that is different. but this is a sticky thing that will have a more meaningful impact. guy: the other thing is at the moment, these companies, and some states, they are competing with the additional benefits you are getting from government. maybe you need to compete against that. maybe you do need to lore people back into the labor market, and this is one -- two lower -- one way to lure people back. alix: but you know that the extra juice from the government is ending in september. so maybe in addition, there's actually a wage deficit, a worker deficit in certain industries, and this is legitimately the way to fill it. guy: and it is not that there's a broad deficit. it is that there is a deficit of people with the necessary skills , and this again comes back to what is happening within the
administration at the moment. we are going to have a conversation at 12:00 eastern. republicans are going to unveil their infrastructure plan. following from that is the democratic plan about investing in people infrastructure and making sure that education, the skill set is there to be able to fill the jobs that currently are not being filled because those people don't have the skills necessary. this is what the result is. you can see how it all fits together. alix: if you have this paired with vaccinations going quite well, dr. fauci just saying that u.s. vaccinations looked to be pretty good against the indian variant, and you have states like new york lifting their mask mandate tomorrow, is that all going to play into a very strong reopening narrative? in the markets, we think it is priced in, but this can all happen fairly quickly. that is going to catapult the u.s. in a different kind of way. i don't know. we will see. guy: the other thing is if you start paying more, you are going to want to keep more and invest in those people, so may be
companies and the government can work together here, but companies need to invest in their people. up till now, they haven't had to. but maybe they will want to invest more to retain that talent. that is going to be something that is going to be interesting post-pandemic as well. the other factor about what is happening here is with the mask mandate, how are companies going to return to offices? i was talking to a friend of mine who is an investor in the property sector. he was talking about the kind of wework style business model really making potential since at the moment because companies aren't going to want to, for the time being, invest in new office space. the softbank group coo, wework executive chairman, was talking with bloomberg and said the demand is now higher than it was before the pandemic. he spoke to bloomberg's ed hammond. ♪ >> companies are not looking
forward to going back to a traditional way of signing a 20 year lease and setting up this non-flexible headquarters. that's dead. the office is very different today. the world's most valuable companies are basically sending us their employees because they don't know how many days they are going to be working because they don't know where their business is going to grow. when you are the only company in the world that has over 1000 buildings in the most important cities in the world, the demand for we workspace today is higher than it was prior to the pandemic, so the pandemic allowed we work to reinvent itself on a most cost flexible basis, i know you have a wework that should be a profitable company by the end of this year or the beginning of next year at the latest, and demand for this type of flexible office space is higher than ever, and i think
the world is going to redefine in terms of where flex ability becomes the most important part that a company can offer its employees. >> obviously, wework announced last month it would be accepting payment in the form of cryptocurrency. it also said it would hold someone its balance sheet. today we saw elon musk say tesla would no longer be taking bitcoin over concerns about the impact it has on the environment . obviously, the environmental impact of mining bitcoin has gone up significantly over the past few months. is that the right move? is that something we are lightly to see wework follow, or is that just a reaction to a short-term trend? >> the reason why we decided to accept cryptocurrency was because our customers were asking for it. we listen to our customers a lot , and we have to. they tell us how our offices are looking, the types of setups
they want. when employers say we would like to pay you crypto, we have accumulated a significant amount of west and crypto we would like to use to pay for rent, we decided to basically accept crypto, and at the same time, as people pay us and crypto, to us it is just another currency. we got euros, dollars, pounds, crypto, japanese yen, so it makes no difference. when a customer says they want reimbursement in crypto, we pay in crypto. we have some landlords who say i would like you to pay me in cryptocurrency. so the way wework looks at it, we listen to what our customers want from us, and they wanted to pay in crypto. that's why we took crypto is a form of payment. >> do you have a level you would be comfortable going to in terms of your total money going in and out in the form of crypto? >> today as it -- today it is a
very small part of our business. i think crypto cannot be ignored. we will go wherever our customers want. if they want crypto more, we are going to accept crypto. if they want to pay in traditional currency, we will except normal payment as traditional currency. two us, this is nothing more than a move to help our customers satisfy some of their needs. obviously, our first customer in the large one was coinbase. them being the largest exchanger of cryptocurrency, they were the first customer to pay us in cryptic currency. alix: that was wework's executive chairman speaking to ed hammond. you can listen to that whole conversation in today's bloomberg businessweek event on your terminal at around 11:15. let's get to bitcoin for a
second. on one hand, certain areas of the world are accepting bitcoin as payment. on the other hand, you have a key man risk and elon musk, which negates the fact of a stable reserve currency. then you have china also saying they are reiterating again that digital coins cannot be used as a form of payment. so how does the conversation really materially change? guy: elon musk has clearly undermined the case which has been building over the last few weeks and months that this is something that is investable, something that you can use as a store of value, and that feeds back into this narrative that there's a wall of institutional money that is going to be coming into bitcoin, which has been one of the prime drivers. it was interesting to listen to that conversation, talking about wanting to accept payment. i wonder how quickly wework transfers that money into a more traditional currency. not that i would say bitcoin is a currency. 27% to the downside in 10 days.
alix: they are certainly treating it as a currency if they are accepting it as payment, but to your point, are they trading it after they get it, like kind of a game? guy: that puts a lot of risk into their treasury accounts, doesn't it? alix: i mean, it worked for tesla. guy: it did work for tesla, but tesla in some ways is a controller of the destiny. elon musk has that ability to move this around. i'm not saying that he is, and not saying that there is something being done on that front, but tesla did work out. but turnaround was pretty quick, wasn't it? alix: i think it is fair to say he does move the market. we are not saying whether or not that is purposeful. but he tweets, and it moves. that is the thing. i guess you can say if the fed tweeted, it would move the dollar. but not 27% and 10 days. guy: no. that is certainly some thing you don't see with major currencies.
alix: this is "bloomberg markets ." it feels like the market is kind of calm, but the dollar is not. looking at the bloomberg dollar index now. still down 0.4%. you are looking at potentially a three year low for the dollar in that index. guy: there's definitely a flows story here, and what is happening with european equities. european equities nearly touched a fresh record high, just north of there on the stoxx 600. there's definitely a flow argument. you look at the bank of america fund managers survey today, a pretty crowded trade judging by that study, and it will be certainly something people
watch to see if it continues. alix: we have been talking about the fund managers survey for bank of america all morning. bitcoin is the crowded trade, but there's no more flows into european equities then emerging markets, so that is something, too. that is a big shift. guy: the narrative has changed relatively quickly. i remove are talking about this on the days it suddenly started to happen. you started to see the vaccination program gaining traction, and that was a huge impact in terms of an arabic -- in terms of the narrative. karen ward of j.p. morgan asset management joining us next. that is coming up. this is bloomberg. ♪
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johnson and alix steel. ♪ guy: 30 minutes to the close. what do you need to know out of europe? the dollar is down again. the euro and the pound gain on the reopening trade, despite concerns about the indian variant. european stocks with any whisker of all-time highs. they faded that move earlier. telecoms is actually the drag. and lamborghini will spend big in an ev transition that will drive yet another challenge to tesla. the stoxx 600 with any whisker of all-time highs, 446. we are now trading 443.