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tv   Bloomberg Markets Americas  Bloomberg  October 6, 2021 10:00am-11:00am EDT

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♪ guy: wednesday the sixth. 30 minutes and that the trading day in the united states. from london, i'm guy johnson. alix steel is over in new york. welcome everybody to "bloomberg markets." a hair-raising ride in european gas markets. equities on a roller coaster as well. alix: it would really curl your hair if you are in the equity market over the last few days. you had a bounce off the lows in the equity market, but that didn't hold. now you have equities rolling over here. i'll individual sectors -- all individual sectors now down one full point. this would be a sixth consecutive day of moves for the s&p. we haven't seen that in quite a while. if you get a little bit of a
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relief here, we are seeing finally some buying coming into the bond market. yields lower by about two basis points. that shifted when you got the adp number in the vix bouncing yet again. we bounced off the lows and we are now again at 23. guy: the average back to 1990 is 19, but are we heading to a more never go -- a more volatile period? we've got adp data. this ahead of a big payroll number coming up on friday. bloomberg's mike mckee is going to cover that number for us. joe mathieu giving us the latest on the debt deadline. bloomberg's todd gillespie watching energy prices. let's talk about the adp number. mike mckee, walk us through the numbers. michael: as we know, adp is not a very accurate predictor in terms of numbers, but it does
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give us a sense of direction. it sets us up for friday's payroll report. adp comes in better, 568,000. you can see that is better news. better news from adp manufacturing, from the ism manufacturing. a little bit lower for services, the yellow line in terms of the ism, but still relatively high. all those people who fell off the jobless roles when the extra federal benefits stopped, theoretically they should be looking for jobs. here's what we are going to look for on friday. it has come down a lot, 488,000 come up that is still about twice what we got in the month of august. 450,000 would be the number comparable to adp, and unemployment down a tick. no changes in the participation
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rate. here's the bottom line. does the fed continue with its taper? jay powell was asked that at his last news conference. here's what he had to say. "for me, it would not take a knockout super strong report. it would take a reasonably good employment report to feel like tapering. we will find out friday. alix: a lot of things seem to be reasonable, but then turn out not. another key risk to the markets, what's happening in d.c. democrats and republicans must decide how to handle the deadlock over the u.s. debt limit is the country edges even closer to a catastrophic fault. here with the latest is bloomberg's joe mathieu. where are these negotiations headed? joe: senate majority leader chuck schumer has set up a vote
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for this afternoon on a debt limit bill that has already passed the house, but it is expected to fail because republicans still won't touch it. if this sounds familiar, it is not just you. this is the third attempt schumer and democrats are making to handle it this way, prompting likely a couple of other solutions in the next couple of days. i will note president biden today, as we have been reporting at bloomberg, is gathering a list of ceos from some of the biggest companies. jamie dimon, brian moynihan among them. it is a pretty wide swath here. the president tries to apply pressure here to republicans, knowing all the while that minority leader mitch mcconnell is unlikely to move on this, so the question is what next, what now? democrats can either go the way republicans are encouraging to, which is via reconciliation just like that massive 3.5 trillion dollars spending plan.
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this would likely take the better part of two weeks. that's how long we have into a possible default, so this morning there has been a lot of talk in washington about the nuclear option, getting around the filibuster with a simple majority vote, which can be done among democrats. the question is, can they do it? senator joe manchin and kyrsten sinema, who have been obstructionists to the biden economic agenda, are not in favor of the nuclear option, so it is unclear if the democrats have the vote on this, there president biden said just last evening that that is a real possibility. it is not something he prefers, but it could be the way this ends. guy: thanks, joe mathieu joining us from d.c.. it will be interesting to see the carveout related to that filibuster. as i said at the top of the show, a hair-raising ride for the gas market.
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u.s. natural gas futures extended gains from the highest settlement in 12 years. european prices soaring, and then really collapsing today. we are still up significantly over the last few weeks, but a real wild ride in the market today. todd gillespie, who covers natural gas for bloomberg here in europe, joining me on set. what do you make of today's price action? we get a huge fate off of that move. todd: i asked what was happening. we are seeing similar price action with natural gas today. basically promising new market rules by the end of this year
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we've got as many as 90 million people who will be struggling to switch on their gas cookers, switch on heating for the rest of this year into winter. we got estimates of the u.k. price soaring 30%. this market is really looking haywire right now. as you said, we had some of those gains pare after vladimir putin said russia could step in and try to essentially alleviate the crisis. we've got lots of talks over nord stream 2 and the pipeline there that still has to properly come online, to see whether we can get extra supply coming to europe as well, which might help mellow the price, but who knows? alix: comparing natural gas to dogecoin, that sort of says it all. thanks a lot, todd gillespie joining us there. what do big-name investors think of the price action today? we will go today to of the bloomberg invest lobo
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conference. that is coming up next. this is bloomberg. ♪
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alix: live from new york, i'm alix steel, with guy johnson in london. this is "bloomberg markets." will note due bring you to day two of bloomberg invest global, where sonali basak is joined by the carlyle ceo. >> it is about using the virtual environment the right way. if you do this the right way, you can adapt and you can be better at what you do.
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that is what we are pushing for. sonali: speaking of adapting, we are at such a tense point in markets today. there are risks mounting by the day when it comes from washington to china. on top of your list of worries, what concerns you most about the trajectory of the investment environment? >> the investment environment no doubt is incredibly complicated right now, and navigating it is going to be a challenge. but we have been in this for many decades, and we have a long-term perspective. i think it is important to understand that where there is volatility, where there are competitions and complexities, there is also huge opportunity. if there's one thing i have learned with respect to the challenges over the past two years, carlyle is able to
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bid incredible well because of our platform. if you have a global perspective , deep industry expertise, and an ability to think about private equity and private credit, and ability to think about real estate as well as infrastructure, you can now see that is the playing field we have, where we can fit it to where the opportunities are going to be. some of the things we are very focused on, if you think back a couple of years, accommodation, the fact that there was fiscal spending and the resurgence you saw off of controlling covid are now probably going slightly and the other direction. the fed is talking about tapering, so you can see it is still going to be accommodative, but maybe a little less accommodative. certainly the fiscal spending, everyone is talking about that right now. not sure it is going to be as large as people thought. the bounce back of the economy,
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it has bounced back, but it is decelerating. it is growing, but not as fast as it was six years ago or a month ago. all three of those things are potential headwinds. you have to balance that with the fact that technology is creating real change. business models, new companies are disrupting, as well as digital technology, all is creating enormous opportunities around the world. so it is appreciating both that is really the key here. sonali: there's a big debate about inflationary trends versus inflation, which is what we are seeing right now. how much does inflation concern you right now? >> a little bit of inflation is not the worst thing in the world. but i am much more worried about
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the impact on interest rates and valuation multiples. certainly in price -- certainly prices are incredibly high. to the extent that transitory price pressures become a little less transitory and it gets into expectations, and to the extent that through policy and other things, you see rates start to come down, you could see corrections. certainly china has already gone through a correction. we may be seeing a little bit of that right now. who knows? but we are in the long term business. whenever things like this happen, it creates opportunity. personally, a healthy correction is not necessarily a bad thing. all expansions need some type of
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health correction to ensure that excesses are restored and crazy behavior gets pushed out. personally, while it could be painful, a healthy correction is not necessarily a bad thing. sonali: do you think that right now is a good time to be selling assets, given where evaluations are? >> we are lucky, we are always selling and we are always buying evaluations are high, and we are going to get vented to that in certain set, certain companies, certain investments that we have held. but at the same time, we see enormous opportunity, and we are putting more money to work and investing in regions and industries we find incredibly attractive. we are always selling, always buying, but make no doubt about it, when valuations are high, we will take advantage. sonali: i would be remiss if i
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didn't ask you about some of the challenges and china, given the work you do outside of carlyle on many different advisory boards. what is the concern among your clients and peers right now that you are seeing? what advice do you have for anybody looking at the crackdowns in china? >> it is one of the most important issues of the day. my perspective on this, and i have described it this way, there are some short-term bumps, but that region of the world always has some short-term bumps along the way. the bigger picture when you step back, they are underexposed. they are under allocated to that region of the world for with that region of the world represents to the global economy. so the question isn't should i be investing in that region or not. it is really what is the best
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way and how should we be doing it. in my mind, i think there's more opportunity in that region of the world than not, especially since valuations have corrected a bit in that part of the world. i do think mindset needs to be one of very long-term to be consistent and to be committed. it is not a region where you can go in and go out. it is a region where you have to appreciate the bigger picture, how important it is to the global economy, how essential it is in the modern-day well constructed portfolio, and thoughtfully think about how we consistently invest in that region of the world with the best partners so that we can take advantage of the investment opportunities there. sonali: i want to get your opinion on the debt limit because we are seeing the bank
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ceos go to washington or attend a virtual meeting today. what concerns you? >> i think it is the politics and the rhetoric. when i go to capitol hill, and i just came back from d.c., and i meet with both sides of the aisle, everybody appreciates and understands that of course we are going to have to raise the ceiling. yet the politics and the rhetoric are getting in the way. i am very confident our policymakers and leaders will figure out the right answer here . exactly how or when they do it, my crystal ball is not that good , but i am not as worried about the debt ceiling and not not being resolved. i think it will be. it is just a matter of when and how. sonali: that is the ceo of carlyle, just over a year into his tenure as the sole ceo. i hope to talk to you again soon.
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guy: as sonali just said, the ceo of carlyle speaking as part of day t of the bloomberg investwo -- day two of the bloomberg invest summit. it is a fantastic lineup. all you have to do if you are a terminal subscriber, live . some really solid guests being lined up for that. the politics obviously is something the market is having to deal with right now. it does seem as if energy prices are may be taking attention today, but this issue surrounding what is happening with the debt ceiling is a looming problem for markets, which at the moment seems to be taking it in their stride. but as we know, markets can only focus on one thing at one particular moment. alix: so many jokes about being a manna not being able to multitask with that, but i will say what i found interesting, you could hear it throughout the rest of the lineup, corrections
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or healthy in taking things in stride, particularly when it comes to china. you haven't really heard anyone say i am really concerned. the idea that if we are longer-term investors, it is going to be ok. which goes to the point that the s&p is still up 13%, 14%. guy: it is up a lot, and he's clearly concerned about valuations. what he's clearly focused on right now is rising rates and this idea that if that persists, that is busily going to jeopardize long-term, longer duration assets. the technology sector certainly seems to be front and center. are we going to see this pivot continuing from tech into the financials and the energy space? a lot of people still struggle with the energy space because of yes g. this idea about a healthy correction that kind of allows a course correction, but the
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course is still in that direction, but we are going to correct a little bit. we will wait and see. the market is set up to defend itself on the downside down through around 10%, 15%. beyond that, like could get fun. alix: we haven't seen that kind of correction and so long. obviously, the debt ceiling would be one for sure if we didn't rind up raising it. that could be a catastrophic event. lots of fun things to talk about today. guy: absolutely. fun may be in the eye of the beholder. we will carry on the conversation. we will talk more about the markets and get a view from blackrock next. this is bloomberg. ♪
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♪ alix: -- ritika: it is time for the bloomberg deutsche bank's
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asset management unit dws is starting a new review into claims by a whistleblower of so-called greenwashing. investors learned that just over a month ago, the regulators are investigating over allegations that esg figures were overblown. saudi aramco is close to claiming the position of the world's most valuable company from apple. the oil giant has soared thanks to higher oil prices. its market value is now $2 trillion, not far from apple's $2.3 trillion. that is your latest business flash. guy: thank, indeed. the equity selloff hitting all 11 s&p sectors to varying degree or get let's find out exact what is going on. the moves are important here. dave wilson, over to you. dave: you are looking at commodity producers of one sort or another leading the way down. andrew vstoxx the worst performers among those 11 groups
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in the s&p 500, followed by raw material producers. then you find real estate and finance. it is interesting to see them both down at the same time because you look at what is going on in the bond market and you see lower yields. that tends to be not so great for the financial companies, but better for real estate. to see that kind of broad-based weakness, especially in those finance related areas of the market, that gets your attention. beyond that, you look at the relationship between growth and value stocks in the way that has changed over this year, you are now getting to the point where it doesn't matter which you own, the faster growing companies or the cheaper shares. there pretty much delivering the same performance this year. that is a reflection of the weakness we have seen in the past few weeks in terms of the growth stocks. beyond that, when you think about industry moves, citigroup talking about how if you figure bond yields are rising as they
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do, you are better off and finance then in technology. today you are kind of seeing the opposite with bond yields down and the financial stocks doing worse than the technology companies in the s&p 500. nonetheless, that is the call moving forward. we will see if it plays out. alix: really interesting price action over the last 72 hours. dave, thanks a lot. so what do you do? you've got the nasdaq 100 finally turning positive here. rates are still pushing higher, but it is been a brutal couple of days. we will break down where the flows are and what to do with blackrock's head of ishares investment strategy in the americas. this is bloomberg. ♪
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alix: why from new york, i'm alix steel -- live from new
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york, i'm alix steel, with guy johnson in london. this is "bloomberg markets." the nasdaq now flipping into positive territory. abigail doolittle is looking at all of the technical issues behind the moves. abigail: volatility really is the name of the game. this chart tells the story. we can see the big drop off on october 1, and then up, down, up, down, trying to get a footing. that's see whether this index can get back to the top of the range. the range itself does not really matter. we have this choppy period. one of our market producers came up with a great stat, which is we are in the first period a 5% moves up or down in 16 months, basically since the pandemic crash, the bear mac you -- to bear market in march of last year. it will be interesting to see in what way does this range break. as for what is behind this volatility, the s&p 500 has been in a volatile range over the last three months, up and now to
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the downside below that 100 a moving average are you take a look at the 10 year yield. this does not include the huge plunge on the 10 year yield as havens were sought the pandemic, but we do have this uptrend. the uptrend is continuing, suggesting that the recent backup and rates from about 1.12% on the 10 year yield to above one point 50%, that is producing the volatility for stocks. but the uptrend looks like it is in play. we could see that 10 year yield go to 2% or so. that pressures tech. let's take a look at a great long-term chart of the s&p 500 tech index. we are looking at a weekly chart. this is the 200 week moving average. back in the bubble, the s&p 500 tech index was about that average. we are now the most extended since the bubble for tech, about 70%, which suggests this could go further. the thing to also keep in mind is the weekly rsi is going lower.
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if we start to see lower lows as we did back in 2000, there could be some real corrective action ahead as rates potentially rise, bringing concerns evaluation, plus so many other factors folks are worrying about. rates really seem to be the driver, at least relative to this chart. guy: absolutely. choppy markets seem to be increasingly the narrative. the volatility story picking up, but rates right at the center of the action. gargi chaudhuri, blackrock head of investment, joining us. let's talk about what a higher rate environment will look like. how are you thinking about it? if we get the 10 year up to 2%, which doesn't seem that outlandish considering where inflation is now, what are the impacts? gargi: thank you for having me. when we think about the rate moves, i think we often forget where we came from. there's a lot of talk now about
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how interest rates move from 20 basis points or so over the last month, but what were rates doing at 1.30% to begin with when we have an economy growing close to 6%, perhaps 4% next year? you ask about the forwards, and we think interest rates can move higher from here? yes, given the fundamentals. you point out inflation. that is definitely very topical today and this month. but also on the growth picture, given the job market and the strengthen the economy in terms of what we are seeing in the labor market. can interest mates move higher -- interest rates move higher? yes, but they are moving higher because the economy is in a strong place. alix: fairpoint, which brings us to that question of technology stocks. see groups says global technology stocks could underperform by 10% to 15% if we get the 10 year at 2%. would you agree with that kind of move, or does it matter the why of that 2% level?
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ritika: why -- gargi: why, and the composition as well. a few things we would look at. of course, the speed of the move is important, big the components. what a real rates doing? that is a big driver of how companies are looking at the input costs. so real rates more recently have been stable. in fact, at -93 basis points on the 10 year real rate, that is actually a very accommodative level. if you are asking over the next two to three weeks in technology stocks, can continue performing -- to under form the broader complex, sure. but if we only move up to about 1.7% to 2%, does that really over the broader, longer-term stop technology from rallying? we don't think so. guy: i'm really interested that
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you talk about what is happening in the economy in such a positive way. clearly, there is an argument, as you say, that rates are going to go higher, that the economy is rushing ahead and growth is going to be strong. but there's a strong element as well within what we are seeing of cost put inflation. that is a drag. why are you so convinced that the glass is half-full rather than half empty? gargi: there's definitely a little bit of a cost push inflation, yes. we are seeing some of the supply chain disruptions. that is very topical to all of our lives right now. two years ago, none of us knew the cost of shipping of 40 foot containers from shanghai to li, now we are watching that on the bloomberg all the time, so that is an index i am sure we are all watching. so yes, there is cost push, but at the same time, let's look at
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what is happening in the economy. there are 11 million open jobs. we just saw the adp number come out about an hour and a half ago, and we saw over 500,000 and that adp payroll print. the labor market is still doing well. companies, if you look at the intent to do more capex, that is still at a really high level. when we think about what we see from consumers and just the ability to spend and the strength of the balance sheet of consumers, that is incredibly strong. so i think all of that tied gather in an environment where interest rates are still extremely accommodative, a $10 billion, $15 billion paper here or there should not matter when the broader picture is of interest rates still remaining very low. i think all of that added together mix is positive. -- together makes us positive. alix: in the meantime, there is headline risk from d.c., no
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doubt. where do you go to hide out? i was struck this moring when the tenure wasn't getting a bid, even though you had a deep selloff in european and u.s. equities. gold wasn't really getting a bid. gargi: that is a valid point. investors are really confounded with the move in the interest rates market, and i would say some of that is really reflecting the fundamentals in a way that it hadn't after march of 2021. i would say one of the areas we are telling investors to really think about is more of the quality sectors of the market, so really looking at companies that exhibit that quality bias, that are able to better price -- that are pass on higher pricing powers, that have lower debt and more stable return on earnings. i would also say that investors should probably think more about inflation protection to their portfolios, and think about that quality bias not just in the equity portion of their
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portfolio, but also in the fixed income portion of their portfolio. alix: fair enough. thanks very much. really great to get your per spec. just some breaking for you here, oil inventories coming out, and they're a bit rich. you're seeing oil down by about 2% on the news. you've got a build in inventories in cushing, as well as products, as refiners come back online after hurricane ida. if you are looking for oil, you definitely have it there in the u.s. guy: you've got gas, the oil, you got everything you need now. alix: gas prices here were at a 12 year high yesterday. we are feeling pain. guy: nothing like they are over here. and i think this is going to be interesting to see because if you assume that energy prices could be an economic drag here, u.s. looks a much better place than europe does. europe is going to rely, it looks like come on vladimir
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putin. the u.s. doesn't have to make that decision. alix: no, but look what happened in texas in february with the deep freeze. we had natural gas, we had wind, and look at what happened? we are still feeling the repercussions are that. so we are not totally immune either. guy: texas feels like an idiosyncratic story. texas is a big place, but nevertheless, it is isolated. alix: but look at california. they have a lot of alternative energy, but i still have to import natural gas because of their environmental standards. yes, it is idiosyncratic, but it is going to be messy. the energy transition is going to be messy and expensive. we are definitely learning that. guy: absolutely. and if you are interested in a 40 foot container box coming out of shanghai to los angeles, $12,172 is the amount. alix: we are burgeoning like diane i didn't how are you look at these indicators before this all went down. coming up, dream big.
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that's the name of the new kkr insurance survey on asset allocations. where the big heavy hitters are putting their money, this is what we need to know as we transition to an inflationary environment. kkr's head of global macro and asset allocation joins us next. this is bloomberg. ♪
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♪ >> the problem is stagflation. that is the real risk. so many portfolios are massively exposed. >> there's not a lot of places to go in a regime like we are in now. >> it is a very good time to be liquefying assets. >> markets are liquid, so
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exiting make sense. >> i'm not saying the market is going to go down 20% tomorrow, but there is sensitivity. >> do you still want to own equities? >> if we've got reasonable equities, they are the only alternative for most people. >> what you don't want to own his long duration fixed income. they are your more of honorable place to hide. alix: those are some of our guests at the bloomer can vest conference speaking about inflation, stagflation, higher rates. henry mcveigh, kkr global head of macro and asset allocation. kkr spoke to more than 50 cios from the insurance industry who oversee nearly $7 trillion in assets under management their lifeblood depends on rates. henry, great to see you. thank you for joining us. what is the biggest shift you have noticed? it's been three years since you last -- since you have left on
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the survey. what is the biggest shift for high-yield? henry: thanks for having me. as many of our viewers may know, 60% of life insurance and retirement company all global antic, so we interviewed 50 cios globally that oversee hundred percent of the overall insurance market, so i massive amount, $7 trillion. what you saw from 2017 through today was a real move into real estate credit, private equity, private credit, and structured products. generally, people were selling investment-grade debt, trying to get higher yield, particularly after the pandemic. that is where we have been. i think what the piece really highlights through the survey and through our conversations with our partners is where they're headed. the number one thing that came out is infrastructure. it really plays off of some of the clips you just said which is people want asset-based collateral with cash flows that has some pricing power.
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so infrastructure is becoming a much bigger part of the overall asset allocation, albeit from a small base. you're still seeing growth in real estate credit, growth in private equity, but what is interesting from the cios' per spective is they are moving up the quality curve in the liquid and illiquid markets. they are just finding nontraditional investments that can provide return in an environment where you have to say the central banks are creating a real issue for savers by putting rates down to zero. that is really the conundrum and what we have been working with our partners to try to work through together. guy: these funds are supertankers. they move incredibly slowly. got to go through a number of different layer's to get decisions made in terms of making these shifts. what are they saying to you about the timeline on which they are operating at the moment? how quickly can they make these pivots? henry: that is an excellent
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point because we are talking about a tanker ship. the average cio interview overseas, more than 100 billion dollars in assets. thing about what happened from 2017 or 2018 through 2021. they increased their nontraditional investments by 12%. that is a massive shift, and it came at the expense of liquid equities, as well as investment grade debt. what the intentions we learned from the survey is that trend is actually going to accelerate, so i would think, using the right risk management tools, the right portfolio construction, you will see that continue to increase because even though rates are up a bit from lows, they are still low relative to where we were. just look at the survey were you see that the average yield has dropped 100 basis points from 4.2% to 3.2%. that is a massive amount when you are trying to create yield for retirees.
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alix:alix: which leads me to the question, what are they most worried about? we talk about political risk and inflation. what are they worried about? henry: we had this real bifurcation between some form of -flation. a lot of worried about deflation, some are worried about reflation. life insurance company's are probably more concerned about deflation because they have actually extended the duration of their liabilities and they want to match their assets, so lower rates would be cried problematic. on the property-casualty side, we are seeing input costs going up, and insurance companies are worried about having replacement costs going up, and worried about reflation or inflation. so it is a pretty bifurcated market, but i think what they agree on is that we had outsized stimulus, and there's going to be some reaction in the capital markets over the next couple of
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years, some are concerned about a deflationary bust, or that we have over stimulated, and that is going to lead towards reflation. as a firm, kkr is the largest investor in what we do. we are tilting more towards the reflation camp, for what it is worth. guy: what about the stagflation argument? henry: i think one of the anomalies of this cycle is that real rates stay low and we have decent nominal gdp growth. when you look at what is going on with productivity, productivity is booming. so the idea that we don't have any gdp growth, particularly at a time when consumers have this much excess savings, i don't see that. so i think we are all entering a new period where the fed has a forecast for four years where inflation is above their trend. we went through a decade the last cycle, and you guys did a great job reporting on this, where the fed only saw inflation
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go above its mandate two times in 10 years, and now we've got them saying it is going to happen for four years consecutively. so we are all going to learn together on how to do this, but our tilt has been more collateral based cash flows, more upfront yield, and focus on areas where complexity and illiquidity accrues to your favor, and i think you see that in partnership with our clients. alix: something that also changed is the shift into this green energy transition. it has been pretty serious, but there's been a lot of questions as to the kind of money you can quickly allocate to, overpaying for assets or investment. i'm wondering how these tanker ships invest in that theme. henry: what came out in the survey as they are playing that through equity as well as through credit. infrastructure credits become a big business for our clients.
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i think you were touching on this earlier. there's this delicate balance, and what you're seeing is the shift towards renewables is a very powerful one, and we are hugely supportive of that, but some of the infra structure is not in place to really deploy the capital in a thoughtful way, so we have had to focus on areas where we have areas of expertise , and there is actually the infrastructure in place. at the same time, we can't leave the old economy behind. you are reporting on the u.k. come over natural gas prices are high. in the u.s., oil prices are high. this is a global phenomenon where there's going to be this tension between what we think is a $70 trillion investment opportunity over the next couple of decades, offset by this pressure that can't happen may be as fast as some of the politicians are mandating on their decarbonization acts. it is where we have to work together, private sector, public sector. we have a huge infrastructure business, and we are navigating
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that alongside our clients, but it is tricky. guy: one final quick question from me. when you look at investment's in your portfolio right now, how strong is the correlation between those assets? how much of them, when it all boils down, is the same trade? henry: that is not the case. you look at real estate versus infrastructure versus private equity relative to insurance assets, that is important. if you had to say what is the one thing you watch, it is credit. this cycle, we do a lot of internal models in terms of what drives growth over time, we think we are going to have plenty of in demand because of the injections into the system, higher savings. but the achilles' heel would be the financial conditions tighten. that is not our call, but what we are watching is the rate of money supply. so i'm sure we will be back talking about it, but that is the area we are looking at this
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morning. guy: henry, we always appreciate your time. thank you very much for sharing so much of it with us today. henry mcveigh of kkr. this is bloomberg. ♪
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♪ alix: we are about half an hour away from european markets closing. we are off the lows. here's ritika gupta. ritika: a pretty ugly session today in europe, but off the lows. it really is those concerns about inflation feeding and from the energy market, where we have seen soaring prices and gas. we have the race to the gains in gas for the day, but really hitting energy supplies. -- energy suppliers. they are facing big cost pressures now. we did see in the session earlier that yields were rising, but banks were getting hit. we have some of those moves were
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first, but still, barclays down 1.3%. it is red across the screen in terms of sectors, but there are individual movers weaving went to the upside. ? is soaring, the top performer in the stoxx 600 after beating on its earnings, announcing a share buyback, boosting its profit forecast. very interesting time for grazers in the u.k., with bids from the likes of morrison's. we are also seeing hsbc getting an upgrade, and that is being lifted. back to you. guy: what have we got coming up? apart from the european close, traffic -- trafigura's chief economist is joining us next. this is bloomberg. ♪
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>> the countdown is on in europe. this is "bloomberg markets: european close," with guy
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johnson and alix steel. ♪ guy: wednesday the sixth. what do you need to know out of europe? the roller coaster ride continues. yesterday we were up. today, stocks fade, that we are off our lows. we are now starting to catch a bit of a bid in the bond market. yields coming down. the wild ride also continuing in european gas markets. what we had today is a massive fade often earlier spike. we faded massively. we are still up circa 20% this week. the reason for the selloff? vladimir putin saying that russia stands ready to help. i'm sure that is going to go down well in europe. talking of stocks, let's go back to some individual single

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