Skip to main content

tv   Bloomberg Markets European Close  Bloomberg  October 8, 2021 11:00am-12:00pm EDT

11:00 am
european close," with guy johnson and alix steel. ♪ guy: friday the eighth, 30 minutes of the close. european stocks just drifting as u.s. job growth disappoints for a second month in a row. the euro tracking a little bit higher, still around or below 1.16 against the dollar. ireland abandoning its 12.5% corporate tax rate, removing a major hurdle to an oecd deal that could deliver a minimum tax rate of 15% for global multinationals. we will talk about that in a moment. the eu is set to explore joint gas purchases and storage as weather forecasters worn that temperatures and wind speeds are set to drop in the near future. exports continue to china despite a major fire at a processing plant in eastern
11:01 am
siberia. let's take a look at where the markets are now. equity markets just drifting right now, down i around 0.2%. incredibly choppy week. we are continuing to see gas prices coming off, but we still remain at very elevated levels. alix: oecd deal, just say it real fast. within the markets, it looks like we are buying energy, we are buying value. energy up almost 3%. wti at $80, the highest level since 2014. financials getting a nice boost as well. outside that, the s&p tech leading the way. the nasdaq 100 trading a little heavy. i should point out volume not great across the board for all the major indices. the nasdaq 100 off by 0.25%. this could be a reason why you are seeing a nice bid to financials. the twos-tens curve steepening at 1.28%. the front end really anchored by the fed if we are going to make
11:02 am
that this tension between the taper and any kind of hike on that jobs number. the back end for yields being led higher. his because of the u.s., or what is happening in the u.k.? potential growth issues in the u.k. dragging up that long and. -- that long end. guy: alix continues to blame us for pretty much every thing at the moment. [laughter] it is not all our fault. maybe the gilt market has been having it is proportionate affect, but nevertheless, not all our fault. i promise. the u.s. job report may be a contribute in factor to all of this. basically, the september number the slowest this year. there's all kinds of weird things happening in the labor market in the united states. people are not coming back into the labor market that many people thought would. marty walsh is the u.s. secretary of labor. spoke to jon ferro a little earlier on on this very issue. sec. walsh: this is a worldwide
11:03 am
issue with the part is patient right in the workforce. we clearly have more work to do. people are concerned about the delta variant. people are concerned about their health. i think people are reevaluating their work-like balance and changing careers. guy: let's recap what we know, what we don't know, what we need to know, with bloomberg's international economics and policy correspondent michael mckee. where is everybody? where are the workers that we need to fill for the job openings we know exist? peter: maybe we need to ask -- michael: maybe we need to ask an astronomer because the numbers are a black hole. we have not only stalled out in closing the gap, but this is the rate at which we would have added more people to the employment roles had dependent not happened. so we still have a pretty big gap to fill.
11:04 am
it didn't change all that much with this report at 6.8 million people, depending on how you are counting it. they are not there to hire. we've got the jobs open, but we don't have the people there. take a look at some good news in this report. it wasn't all bad. one thing we did see was a rise in hours worked of 0.2%. that tells you at least the overall economy is not rolling over because those who were at work were working harder. interestingly, hours worked did not go up for people in the leisure and hospitality industry. a little bit odd, maybe because people were staying home and not going out. the two factors could be related. that me just defend my colleagues in the business of forecasting. this is the difference between what we get in terms of jobs in the forecast. as you can see, it was very close for a long time. of course, nobody could account for the pandemic. look at what is happened since.
11:05 am
a lot of volatility. there's no models that account for what happens when you reopen the economy, so it is very hard to forecast why you got zero to 700,040 forecast. it isn't easy, guys. alix: mike mckee, thanks a lot. really appreciate that. other stories we are following from new york, global talks to reshape the global tax landscape are resuming today. ireland, austria, and hungary announcing they would sign onto the deal. irish finance minister and the u.s. treasury secretary talked about the agreement earlier today. >> the agreement, which i believe will be maintained in the oecd, is now for 15% as opposed to at least 15%. i was making the case for that kind of clarity, that kind of certainty. it is now there, and it is one of the key reasons why ireland
11:06 am
has decided to join the agreement, and i hope this agreement is successful. sec. yellen: this agreement will be finalized in coming weeks, and four and headquartered multinational corporations will face a tax in all places they do business, just like u.s. headquartered multinational corporations. alix: joining us with the latest is caroline connan, bloomberg's tax reporter. what is the inflammation timeline -- the plumbing patient timeline? caroline: we will have a statement from the oecd about one hour from now. clearly the fact that ireland joined this deal removes a major hurdle in the implementation of this global minimum tax of 15% because ireland's historical corporate tax rate at 12.5% was blocking the eu and moving forward. some hurdles remain because some
11:07 am
countries, for example poland, are seeking to exempt some activities and could have this in limitation partly on tangible assets and partly on payroll. then some countries like china are concerned that companies with big revenues globally with very small subsidiaries could be hit harder, especially chinese multinationals such as tencent or china life insurance. you also have the hurdle of how to share profit from the digital taxation. in fact, india could ask for this global tax deal to be slightly delayed because they want to share a bigger profit from digital taxation. the u.s. senate has already threatened to block ratification, though still a few
11:08 am
hurdles towards the global tax deal, and if it all goes according to plan, limitation should start in 2023 with a transition period of about 10 years. guy: everybody saying if it is not now, it is never. thank you very much, indeed. let's talk about what is happening with elon musk's travel plans. the tesla ceo yesterday in austin, texas which is going to be the new headquarters. today, berlin. tesla hosting thousands of locals this weekend at its german factory. that factory has been delayed by several months due to legal challenges. when are we going to see completion? this is a huge part of the plan for tesla in terms of its rollout in europe. joining us with the latest, aggie control from berlin. -- aggie cantrill from berlin. what is he going to say? aggi: he's inviting 9000 locals
11:09 am
from the area to this factory just outside of berlin, and what is interesting is that this factory has come up against a lot of pressure from environmentalist groups and local organizations, people criticizing the environmental impact of the factory, but also its impact on things like the groundwater for the surrounding agricultural area. i think a lot of this will actually be an effort to try to get this people on side because this project is still awaiting a lot of those approvals, and it is worth noting that this factory that is part of a much bigger project from tesla is also part of a requirement for german automakers to also be responding to the changes and the needs for electric vehicles in the future. daimler, volkswagen, bmw have all made commitments to transform their own output to make more ev's in the next 10 years, and it is going to be important to see how they can
11:10 am
respond to the likes of tesla in their own country. guy: it is also going to be interesting to see whether we've got enough electricity to power all of these cars. thank you, aggi cantrill joining us from berlin. europe is apparently going to see cooler weather next week. apparently when speeds are going to drop, but heating demand is going to pick up. that is going to add pressure to already strained energy markets, where price moves have become extremely volatile. here with the latest, rachel morrison, bloomberg energy reporter. we have seen incredible he volatile markets this week. i can't remember if it was wednesday or thursday when gas surged to the moon. what happens next? meteorologists are telling us it is going to be colder, but less windy. that doesn't sound look a great combination. rachel: that's right. today is a little more calm after a dramatic week, but we do expect the weather to get colder. winter is starting.
11:11 am
at the same time, when speeds are going to drop -- the same time, wind speeds are going to drop. although things have calmed down at the end of this week, next week there could be more, and we have one analyst firm saying today that if it is a cold winter coming european gas stocks could drop to zero, which would be quite dramatic. alix: do we have an idea about what happened in china? they say they can still get gas to china and it is not an issue, but siberia, one of their plants is on fire. do we have an idea of the implication? things like that are definitely going to have a psychological effect on this. rachel: yes, these kind of fires and accidents happen from time to time. we understand that this fire was actually on part of the line that wasn't being used which is why supplies continue. but we are in such a precarious position now that even slight this become more serious, they become more difficult to deal with, and it all feeds into how
11:12 am
the market views supply situation, and the market is nervous at the moment, so any kind of fire, videos on twitter, that could really set things off. guy: the pictures on twitter were quite incredible. maybe this is going to affect the near, but is another piece of infrastructure that is under pressure. thank you very much, indeed. the problem therefore is may be china, if it doesn't get the gas it needs, maybe buys more on the open market, which is a competition story with europe again, and therefore exacerbates the situation even more. alix: or goes to coal when everyone is trying to compete. so the trickle-down effect could be more significant. guy: it is not good news. let's put it that way. coming up, we need to feed this into the stagflation narrative that we have been talking about this week. the growth narrative, is that strong enough? are we going to see inflation
11:13 am
outpacing it. if so, what you do with your portfolio? we will be joined by mizuho international head of multi-asset strategy peter chatwell. this is bloomberg. ♪
11:14 am
11:15 am
>> thanks to the exceptional response, we are now witnessing a highly atypical recovery. we still need to manage the exit from the pandemic very carefully because this unusual speed of the recovery is also creating frictions that could reframe growth -- that could refrain growth. guy: christine lagarde, the ecb
11:16 am
president, saying the european economy and its recovery thus far, highly atypical. i think if you look at the payroll data out of the united states, everybody is scratching their heads. the economists are struggling to get a grip on what is happening on both side of the atlantic. the europeans in many ways not suffering the same labor market story we are seeing in the united states and in the u.k. peter chatwell, mizuho international head of multi-asset strategy, joining us. at the moment, we have a huge amount of demand for labor, but a lack of supply. the fed is trying to figure out how to taper its policy, the finesse that policy. it wants to keep the labor market strong, but we've got this mismatch at the moment. the ecb has a different challenge to deal with. the bank of england is having to do with all of this at the same time. if you look at what is happening in the rates market at the moment, alix keeps blaming the u.k. for what is going on in terms of rates going higher.
11:17 am
but is what is happening in the u.k. ultimately going to be the story elsewhere? peter: the u.k. is something of an outlier i think because what is happening is the market was egregiously mispriced. the market was thinking u.k. rates were going to be like european rates. no, u.k. rates are going to be like u.s. rates and probably above because the u.k. economy hasn't rebalanced, so it doesn't really have much goods for eternal consumption -- it doesn't really produce much goods for internal consumption. it is very vulnerable to these imported inflation cost. that means the potential to put rates up higher than the market is currently priced in. we think we can get bank rates up to 1.5% by the end of the cycle, 2025, and that is still nowhere priced into the curve. alix: if that happens for the boe, where is the fed on that?
11:18 am
i am interested to see how much of this differential we can get. peter: the fed has a completely different set of scenarios. you could say that the u.s. economy also has twin deficits, but it has the reserve currency. that means that the fed reaction function will be completely different to that of the bank of england and some of the other central banks you have seen moving rates up. the fed come on the other hand, has the systemically important currency, has the economy which is quite to having low interest rates, but i think the main problem the fed have if they try to put rates up faster than currently priced, if they try to follow the right path that is priced in for 2024, it would be horrendous because the dollar would be so strong that it would
11:19 am
cause for the globe a major slowdown, and it would mean the fed can't actually deliver on that path. guy: so what happens next? we've got a really confusing labor market. we've got inflation picking up. we don't know whether that will be temporary, transitory, call it what you will at this point. what do you do with rates? where do we see the story going? if inflation is going to stay as high as it is at the moment, rates have to at some point start moving up. or do we end up with a more permanent cap between the 2 -- more permanent gap between the two? peter: real rates are something we will have to deal with. i think the ideal outcome is that that's will be inflated away, to a large degree. guy: so you don't want to own bonds? peter: largely, you only want to hold bonds if you have to. it would be much better, rather
11:20 am
than holding rates products, it would be better to behold and credit products because at least they are giving you some upside in this inflationary environment. it is going to feed through into higher revenues for corporate's, for example. it is going to create more volatile markets and a stronger real economy, which is good for financials. so what i think, there's two dynamics i would like to capture. i would like to capture inflation protection, which you can do through curve steepeners if you can only trade in rates, but also capture credit spreads. i know that there are a lot of concerns that credit spreads are very tight, and that could be an undesirable investment choice. but i don't think, with the exception of the bank of england, lift off is anywhere near for most of the central banks, and for the ecb, i don't think they will lift off the cycle. alix: the way you are describing it, it seems like you have to
11:21 am
also own equities in this environment. peter: yes. that is the challenge because if you look at the s&p 500, everything is baked into the price that probably takes into account next year's growth as well. it is a difficult environment when you're looking at u.s. equities, and particularly te ch. if you look at the more cyclical equity markets, europe is a clear good candidate, and i would say japan as well, particularly with the weakness that japanese equities have suffered in the last three weeks . that is a major upside trade. i think for equity investors, to rotate out of the u.s. into japan and into europe, still there is upside in that inflationary environment. guy: there seems to be two scenarios for the fed. they either go early and deal with the inflation story, and that is one scenario for the shape of the curve, based they are late and lift off -- but if
11:22 am
they are late and lift off aggressively, one is flat, when is steep. what do we know -- when do we know what it is going to be? peter: it would them easily because -- it would immediately cause a bull flattened and risk equities would selloff. and by forced to, i mean unless we are faced by runaway inflation, where wages spiral higher. today's data doesn't show that. he unemployment rate came down. wage growth didn't accelerate. i don't think the wage spiral is imminent at all. but structurally higher inflation is something we have got to get used to. as long as central banks don't rush the fed, the ecb, than they will be able to lift off, but it will have to be much later than they are currently talking of in their dot plots. the taper has to be very slow. the exit has to be very managed,
11:23 am
and therefore they have got to tolerate inflation going uncomfortably high. alix: if i say to you what is a safe haven asset right now, and the middle of this it is confusing. where is your safety net? peter: i would say if the central banks are able to avoid rushing to a tightening, if they can continue to deliver on the new mandates they gave themselves, i trust they saw this situation coming, then i would say that em credit is a good example of something that could behave in a safe haven in this inflationary environment. generally speaking, still there is upside to some inflation products as well. guy: peter, thanks for coming to see us in person. peter chatwell from mizuho. this is bloomberg. ♪
11:24 am
11:25 am
11:26 am
guy: let's take a look at where european markets are trading as we head towards the close this friday. the payroll number weirdly, despite being a massive miss, has actually delivered very little in terms of volatility for global equities. you have seen it in the states. you have seen it here in europe. the dax is tracking a little lower. the cac 40 is down by around 1.5%. relative to where you would have thought we would have been, considering the scale of the mess we have seen coming out of the u.s. payroll number, i am surprised we are not seeing more volatility. volatility is quite low as we come to the end of the day, the end of the week. only russian gas can save your of this cold winter, according to wood mack. we will get the author of that next.
11:27 am
it's moving day. and while her friends are doing the heavy lifting, jess is busy moving her xfinity internet and tv services. it only takes about a minute. wait, a minute? but what have you been doing for the last two hours? ...delegating? oh, good one. move your xfinity services without breaking a sweat. xfinity makes moving easy. go online to transfer your services in about a minute. get started today.
11:28 am
11:29 am
guy: a mixed picture in europe
11:30 am
as we come through to the end of the day. an incredibly choppy week and as i said before the break, you would've thought given the miss we have seen on payrolls we would've gotten a bigger equity market reaction. european stocks are going sideways. you have the cac down a little bit. in normal times that would not be a very big move. in these times it is a little bit bigger. the dax is a lay down .2%. europe is going sideways. it has been a choppy week. let's take a look at what the week looks like. this is the stoxx 600. it looks like a seesaw. we used to call it risk on, risk off. that seems to have been the story. there is a lot of economic data. the gas story has been front and center.
11:31 am
equities are still up which is worth thinking about with all of the things that have been thrown of his equity market. very few of them have stock. we are in the high 50's, but nevertheless it has been an incredibly choppy week. let's take a step back and look at what has been going on from a sector point of view. that is worth dwelling on to give you an idea of the kind of rotation we have seen. the grr gives us that as well. individual stock stories were focusing on but the grr gives you an idea of what is happening. the rate markets and the bank story have gone hand-in-hand. we have seen yields higher. that is helped the banks out. banks are looking as the winner this week. basic resources, the energy is there as well. both of those sectors have picked up strongly. the bottom end of the market, travel and leisure.
11:32 am
more broadly a lot of confusion about what the state of play is in terms of travel rules and higher energy costs will feed into that sector. retail has not had a good week, real estate has not had a good week. thanks, basic resources, and energy are the real take away. the other narrative has been the inflation story around commodities. here you have the one week -- this should be the one week natural gas story. gas shooting to the moon. wednesday we got the big move wednesday. then this big move down as vladimir putin came in. you can see it, the move up, then down. on the week gas prices are down 10%. at one point it looked like it would be a different narrative. i want to wrap things up by taking a look at the individual stories. i have gone through the mrr
11:33 am
workweek. what i can tell you is tesco is one of the real standout stories. the u.k. supermarket sector is front and center. a lot of people circling the u.k. in terms of picking up assets. private equity looking at the story. looking into the week it was what will happen with morrison. out of this week it is what going to happen to the u.k. consumer. is the cost-of-living story going to be the one that ends up being a huge issue. if you have to pay your gas bill, you will not be able to buy other things. that is something the u.k. will have to deal with. alix: already you are seeing shortages on shelves of items. let's take down into the gas story. you had a plant in russia explode, there is an explosion and a fire. they say it is fine and you can get all of their gas to china, but if they cannot come if they
11:34 am
cannot china will have to go back on the spot market and by more natural gas. that will distort the market even more. let's break it down with wood mackenzie. they say the region and europe will be dependent on russian flows will joining us is nasa dod argo -- is massimo d i-oroardo. does roger have the supply to refill the tanks we need and supply europe and meet their full demand? massimo: the point is how much pipeline capacity they will have to supply gas to europe. at the moment they are using existing capacity up to just how much people would want to supply. what we think is if they use all their capacity and they certainly have the gas for it in the winter is relatively normal in europe, we do not think europe will have an issue in
11:35 am
meeting demand. the question is whether the winter will be called. that is a different outcome. guy: what is the best case and worst-case scenario for europe? massimo: the best case which is the normal weather condition across europe and also across asia. we think under that condition the market should end the winter in a situation where storage will be below a normal winter but still in a relatively comfortable position. if you get a cold winter in your -- in europe and a cold winter in asia, that could reduce input -- imports to europe. additional demand for the winter in europe and less energy imports. that is the worst scenario.
11:36 am
that is only additional russian gas that can save the markets. alix: that is the worst case scenario. i wonder if we are setting ourselves up for a one-way trade? what happens if the winter is warmer and we are still in 76% storage capacity in europe. that is not zero. where is the upside risk? massimo: the upside risk, to your point, if the winter is warmer than average, then demand could be 10 to 15% lower than normal. in that case we could end up in a situation where storage could be at the 35 for normal weather conditions. what the market is concerned with is the cold, not knowing where the gas will come from if that happens. guy: in terms of individual countries, who is the most
11:37 am
exposed? the u.k. looks front and center right now. how different will each individual country be in europe if we are going to see the worst case scenario? is it going to be everybody in the same boat or a different countries going to fare differently? massimo: in the spectrum of countries, you have the u.k. which will be in a varied position because it's storage capacity is extremely low compared to demand, it could be as much is only 10 days of storage demand left in the winter. it will be dependent on gas coming. if the situation gets bad -- on the others, you have italy, where there is a requirement to build gas into storage regardless of price economics.
11:38 am
to some extent italy is in a better position than other less regulated markets because it has been able to fill up storage. obviously the market is well interconnected. on one extreme you have the u.k. alix: walk me forward to next year. what is the long-term effect going to be. vladimir putin was blaming the fact that europe it had been opting for more stock market buys versus longer-term contracts. obviously putin will be talking -- it is not an irrelevant point. we had been transitioning the market. those 15 to 20 year contracts were harder to come by. does that change? massimo: it is sad to think we will go back to a lot of long-term contracts. there'll be changes in contracts. you can see buyers making sure they have access to imports. what can save the markets in
11:39 am
this situation is adding more gas into storage, is something the european commission is trying to get -- the fact that that is one option to save the day. it is effectively trying to develop additional storage, possibly regulated storage and develop strategic reserves so when we get back to situations like this that could be the supply of last resort. that could be a way to manage a situation like this, which could spiral if there is a cold winter. guy: if we do get the worst case scenario, how does demand destruction work? presumably that is what we would have to see. how is the process of demand destruction work if there is not enough gas and gas prices are too high? massimo: if there is not enough
11:40 am
gas, some of the gas that has been sold through contracts that specifically consider the possibility of a demand -- some of those contracts will be left to be triggered. those are part of the agreement between buyers and sellers. it is much more likely some of those contracts will be treated -- will be traded instead of europe going down to zero storage. guy: that would likely slow economic growth down. we leave it there. massimo di-odoardo. thank you very much, indeed. a quick look at where european stocks have settled. not the kind of reaction you would've expected given the miss we saw in payrolls. we have gone sideways in europe. the ftse 100 getting the best of it. the taxes down. the cac 40 dipping a little bit.
11:41 am
guy: here in the -- alix: here in the u.s. you're taking a look at a steeper yield curve. also bank earnings come out next week. we will dive been to what to expect with betsy graseck, morgan stanley global head of banks and diversified financial research. this is bloomberg. ♪
11:42 am
11:43 am
11:44 am
ritika: let's check it on the blue bird first word news. for the second month in a row the u.s. economy added fewer jobs than forecast. payrolls rose 194,000 from the smallest advance this year. the unemployment rate fell to 4.8%, partly reflecting a
11:45 am
decline in the size of labor force. all of this could complicate the fed decided to scale back monetary support before the end of the year. our hurdle has been removed on the path to an unprecedented deal. island will abandon its 12.5% tax and push for a floor of 15% on corporate profits. the oecd is boosting a crucial meeting on taxes for 140 countries. 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: big banks report earnings next week will jp morgan on wednesday, bank of america, morgan stanley, citigroup on thursday, goldman sachs on friday. i want to get a preview with etsy gray sick. -- with betsy graseck. what is this quarter about? betsy: this quarter is about two
11:46 am
things. showing that buybacks are accelerating, and two, showing that nii has a forward path, has an opportunity to go up as we look forward. guy: is that this quarter or next quarter? betsy: some stocks you will begin to see this quarter, particularly in the consumer finance names, particular on the card space. of the big banks we will begin to see that in their card portfolios. overall, we are looking at a 2022 story. it feeds into some of the stuff you been discussing, interest rates rising and loan growth is accelerating. a lot of people pushback on that but it is happening. alix: where is limb growth accelerating? betsy: number one is in card. we have credit card in the u.s. running at 2.5 percent up on a year on year basis. a quarter ago that was shrinking. that is new news.
11:47 am
there is a lot of debate as to how much of this is true revolvers versus trans actors just spending more. that will be an interesting discussion. this eni book, a lot of people are looking -- the cni book, a lot of people are looking at when we will get the commercial and industrial loan book. it is already growing in services, in financials come in government. where it has been shrinking is the supply chain, utilities, energy. when will that supply chain flip? we think we are beginning to see the signs of that, because very nascently today. as ppp rolls off, we think you will see a sharp pickup in c&i lending? guy: where will i get the biggest bang for my buck in
11:48 am
buybacks? betsy: is in the card space where you've had a high level of capital coming into the pandemic and even higher now coming out. as well as reserve relief still coming, still a lot of reserve relief to come through. which name is that? we think that will be number one. the other big stock is going to be wells fargo. wells fargo has a significant amount of excess capital and they have the asset cap. they will be in the running for biggest uptick. alix: what is the best way to play this inflection point? we are seeing consumer credit growth in then we will see the supply chain and industrial credit loans. how do you play that? betsy: the way we are positioned today as we are overweight in our portfolio a little more towards the card names.
11:49 am
capital one, american express. as we move into next year, we do expect to see picked back up in this eni oriented stocks. we are overweight today with that trade in his regions financial. they have a spew and importantly they are not involved in a big deal. they have done some small acquisitions. they are boosting their's eni loan growth for these acquisitions. i think they will be sooner. guy: the market still feels top-down rather than bottom-up. when it comes the inflation story the macro is driving a lot of things. how good of a hedge are the stocks you cover if we are going into a higher inflationary environment?
11:50 am
betsy: the bank stocks should do very well in a rising interest rate environment. importantly, i know the market will be beginning to discuss this question of what is good inflation versus bad inflation. good inflation is when you can pass that higher input cost onto the buyer of your product. it is when your wages are going up faster than daily necessity basket. our view today as we are in a good inflation scenario and that is a positive. it is a scenario that should bring rate hikes sooner rather than later and a scenario where the borrowers are able to service their debt and potentially even take on more. we are very positive on the banks for a variety of reasons, one of which we think loan
11:51 am
growth will pick up. another one is the curve steepen's. those two things have not yet come through. we do expect that will be happening as we go through into 2022. alix: a broader macro question. if you look at the kbw bank index versus the s&p versus the 10 year yield, you have seen the kbw outperform, not totally keeping pace with the 10 year. if we just take into account the big guys going into next week, have they topped out? have they maxed out on this inflation,/reflation play? betsy: that is not my opinion. we still have some upside for the big stocks. bank of america, citigroup, we are overweight citi. we are underweight bank of america and j.p. morgan. it is a function of their valuation being a bit more full
11:52 am
than the rest of the group i cover. they're still upside for the names. what we have in our outlook? we have two rate hikes in 2023, and with all of the talk of inflation the question on the table is could that be sooner? that would drive up my estimate and make the multiple -- make it more attractive to him the stocks. it'll be interesting to see what jamie dimon says on wednesday. at our conference in june he did a bit of a might drop, he did a market to market on nii where rates were in the curve was. he has not spoken publicly since then, at least in a large forum on this topic. i wonder, is he going to say that given this rate outlook that we'll will end up having an uptick in net interest income as we look forward. guy: pretty down on the bond
11:53 am
market for quite a while. a busy week. thank three much for setting us up for it. betsy graseck, morgan stanley, thank you very much. this is bloomberg. ♪
11:54 am
11:55 am
alix: energy moving higher. heavy trading in the u.s.. coming up, the imf on monday, the world bank annual meetings will begin. what the leadership will look like will be in question. my personal favorite, william shatner it will go into space with blue origin. i feel like to me that will be the biggest deal next week. guy: a lot of star trek jokes next week. alix: after brush up. guy: i will spend my weekend thinking of all the decent quotes into decent jokes. alix: that is a good call. guy: we have minutes from the
11:56 am
fomc next week. that is interesting in terms of the insight we would get. it is rearview mirror. as we've just been hearing from betsy gray sick, j.p. morgan will be a firm focus. the bank story will be interesting next week. earnings from bank of america, you morgan stanley, you have citigroup come you will wells fargo. friday goldman sachs plus retail sales. we will find out what alex has been up to. alix: i'm definitely buying stuff again but now i'm thinking christmas. buy now, stockpile for christmas. coming up, constance hunter joins "balance of power" with david westin on bloomberg television and radio. this is bloomberg. ♪
11:57 am
this halloween, xfinity rewards is offering up some spooky-good perks. like the chance to win a universal parks & resorts trip to hollywood or orlando to attend halloween horror nights. or xfinity rewards members, get the inside scoop on halloween kills. just say "watch with" into your voice remote for an exclusive live stream with jamie lee curtis. a q&a with me! join for free on the xfinity app. our thanks your rewards.
11:58 am
11:59 am
>> from the world of politics to the world of business, this is "balance of power" with david
12:00 pm
westin. ♪ david: from bloomberg world headquarters in new york to our tv and radio audiences worldwide , welcome to "balance of power." the big news has been the question of u.s. jobs numbers, which came in disappointing. i will bring in my colleague, bloomberg's michael mckee. disappointing numbers but some people say there is underlying strength. michael: there was some not so bad news. you have people looking to the overall hours worked, which rose .2%, suggesting the economy has not slowed down tremendously. we did see the unemployment rate fall to 4.8%, largely because people left the labor force. it is not a great report but most of the categories that did go dow


info Stream Only

Uploaded by TV Archive on