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tv   Bloomberg Markets Americas  Bloomberg  October 14, 2021 10:00am-11:00am EDT

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this is "bloomberg markets" with alix steel and guy johnson. ♪ guy: 30 minutes into the trading day in the united states. nice day in the equity market. i am guy johnson. alix steel is a new york. banks bossing this market, equities up, earnings delivering. alix: earnings delivering for most. wells fargo the worst performer on the s&p and the metal rally is helping. tech is outperforming but copper and gold one of the top performers in the s&p which goes to the metal story. we go to the industrial metal index. near record highs for a lot of these guys. copper, aluminum, zinc getting an upgrade from citi.
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there is a lot of feedthrough from the higher natural gas prices into the production of these commodities. you mentioned the banks, some of them doing well. wells fargo not so much. the 530 is interesting. we cannot reclaim that 100 level. what does that do for the likes of the banks? speaking of, coming up, we speak to james gorman, morgan stanley chairman and ceo. looking forward to that interview. guy: so much to talk about. let's get a sneak preview of what we can expect in that conversation and what we are getting from the bank reporting. one major one still to come. citi today, bank of america today, morgan stanley, it is a busy morning. sonali basak, what are the takeaways?
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what are the key takeaways here. sonali: investment banking is on top. jp morgan really strong on underwriting, especially in equity underwriting that has not been deterred despite the volatile market. you get to the consumer and you see a lot of divergence. bank of america beating on the interest. stock is higher but citigroup is wavering between gains and losses. also, through the roof on investment banking and trading but people are looking through all their consumer businesses and seeing where are the weaknesses, where the gains and how far do we have to go? alix: looking forward to having you back. she is the busiest woman right now. other top stories, prices paid to u.s. producers rose last month at a more moderate pace than expected. jobless claims fell to a new pandemic low. we break it down with michael
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mckee. did good to take a break? mike: you learn how to do segues. are we setting off a debate on whether defense will raise interest rates? i don't like this chart and the reason is because the y axis is screwed up because of the pandemic. but this shows you we hit a pandemic low, 293,000 jobless claims last week. we are getting around where we were pre-pandemic. this is what we expect to happen when the extended benefits cut off in school started. people are not filing as many claims and that should augur well for the labor market. if people are going back, they can get jobs. epi is where the debate comes in. is it something the fed can use of the about or not? you look at the core. this is the headline and energy
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prices are pushing higher but the core rates stayed flat whereas the headline rate went up because headlines incorporate oil. we are not seeing as much movement in the lower levels of the core good levels as we saw in the headline. that is good news that suggests maybe some of these price pressures are starting to fade as we go forward. that is what people are going to be watching as the fed decides when to pull things together. this is the energy index. this is the problem going forward. energy for everybody is getting higher and we leave it to alix steel to tell us when that is going to stop. jay powell is on line 3 for you. guy: i will pick it up but alix will be think about the answer. michael mckee, thank you.
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shortages of natural gas in europe and asia boosting demand for oil. that deepening the supply deficit. copper past $10,000 a ton, the highest since june. where do we go from here? does this continue? eddie van der walt giving us a sense of what is happening. normally i would take this as a sign the global economy is on a strong trajectory. is that the right way to read this? but the energy read across is very confusing. eddie: there is not a story in the global economy right now i cannot draw back to the commodities complex. banks are doing well. well, inflation is high because commodity prices are high. you ask whether this is a bullish story. i think we are seeing demand destruction happening in a lot of spaces. zinc smelters scaling back
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production because natural gas prices are so high. it comes back to commodities. does it keep going? i think we have got to worry it does because if it does, even though demand is not as strong as we but like, that tells us we are setting up for a longer period of cost inflation which is not something the central bank can easily control. alix: they can't do anything to activate more supply. good perspective. we will catch you on radio in the next few hours. eddie van der walt joining us. let's go to turkey because the president fired three central bank officials. damian sassower joining us now. this was now four that voted? damien: i think only three voted in favor of the cut. president erdogan is seeking growth at all cost even if the
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bank policy credibility is completely lost and it has been. where do we stand in turkey? we have basically they are going to cut rates and it is going to plummet. the central bank is going to have to dip into reserves to defend the currency and i believe we will see rate hikes. right now, locals hold half, half, of their deposits in foreign currency and foreigners have completely exited the local market. i think less than 5% of foreign investments in local turkish government debts is down over 30%. that is where we are today. guy: going to be interesting if this goes into the geopolitical landscape. there is the issue around jet fighters and which way president erdogan goes. does he look to washington or moscow? there are all kinds of factors overlaying the story. thank you very much indeed. damian sassower of bloomberg intelligence looking at what president erdogan thinks about
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rates and inflation and how different that is to everybody else. coming up, market take on the earnings season. meera pandit is joining from j.p. morgan asset management global market strategy. we get her take on what is happening. this is bloomberg. ♪
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♪ guy: from london guy johnson and alix steel in new york. this is "bloomberg markets." bunch of banks driving bank earnings. there were other results out that we are going to focus on. you also have this metal and
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energy story having a significant impact. abigail doolittle is going to dwell on the numbers that are outside the financial sector because we do not want to ignore those. abigail: hard to believe there is something beyond the bank earnings but we have a number of big names that have reported, starting with unitedhealth group. shares being re-ordered -- rewarded after beating both top and bottom on estimates. the race to the outlook for the full year. the results are better than fear due to covid disruptions. walgreens had been higher in the premarket and now down 3.6%. they put up a strong quarter, traffic improved, the vaccine helping sales. however, they announced a $5.2 billion investment in village md. pairing primary care physician practices with their pharmacies. investors not liking it. that is often the case when you have some sort of deal and that seems to be the case. domino's pizza while off the
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lows, down 5%. seems there is pizza fatigue from the pandemic. what makes these earnings reports interesting is the fact there is not a ton of talk about supply chain. that is not the case this year however. this is the number of mentions in any given year of supply chains. going back to 2000, it is less than 1000. however, this year year to date already we are at 3000 mentions of supply chain. probably that trend could continue as there are supply chain disruptions from the pandemic. alix: such a good point and a great chart. thank you. looking through the earnings calls for dominoes, some stores had to have shortened hours because of labor shortages. they had staff shortages despite raising wages. the supply chain issues overshadowed by the labor issues. guy: i have got an answer to this which is basically make your pizza at home. it tastes fantastic.
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alix: yeah. but that means you have to make the dough on the weekend and it is just too much work. i can barely get myself together much less my kids. guy: ok, i'm just saying. it tastes pretty good and any supply chain problems are going to be very limited as you say. it is all pretty straight forward stuff but that was my suggestion. pizza rules. any issue on -- pizza fatigue? alix: that not a thing. guy: that's definitely not a thing. alix: look at any kid under 12. let's get perspective. meera pandit from j.p. morgan. you may make your own pizza but i'm guessing that. i am wondering how you are playing earnings season when the labor supply or supply shortages are what everyone is talking about and with these companies are struggling to deliver. meera: so far you have seen earnings season off to a strong start.
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we are going to see strong euro for your numbers but on a quarterly basis -- year-over-year numbers but on a quarterly basis this might have been the peak. the same challenges remain. labor shortages linked to supply chain challenges. what you are probably going to see is businesses pass those costs onto consumers. if we look at the nfib survey, while 30% are planning to raise wages -- hopefully planning to bring back more workers and entice more to come back online -- 46% are planning to raise prices. it is certainly something we are already starting to see hit margins. at the same time margins have been so robust there is a big cushion. guy: are consumers ultimately going to have a problem with that? the consumer at the moment looks in robust health. there is money in the bank, we have been hearing that from the banks. they are probably going to spend it. what impact is higher inflation
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having on consumer behavior do you think? meera: we are seeing higher impact on consumers from inflation. we have seen inflation remain elevated and even as we have seen rising wages, if you look at average hourly earnings and you annualize that, wages are growing at the fastest level in years. and yet, inflation at these levels is outstripping that. it is a challenge for the consumer and with the higher energy prices that will start to hit some of the low and middle income households for whom utilities and gas is a larger portion of the budget. it is not immaterial to the consumer but overall the consumer is in reasonably strong shape. alix: u.s. consumers will spend more on energy 43% compared to last winter. do you play the energy theme? energy stocks have had a pretty
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solid run at this time. meera: they have but i think the energy stocks -- it is funny we view them as tactical. yes the rising prices are going to help profit and we are in a recovery from an earnings perspective, that cyclical area of the market is bouncing back from last year, but i don't think those dynamics are going to last in the long run. we still are amidst this energy transition, this increase in renewables, and it will occur in fits and starts and we will see volatility across different commodities. but we have seen the swing and supply and demand in which last year we had a glut of supply and not a lot of demand. now we see the pendulum swing the other way where we have seen producers been very disciplined about production and supply, we have seen hurricane related destructions, wind related disruptions in europe. these dynamics tend to oscillate and in particular in light of the pandemic. we expect them to smooth out over time bringing energy prices
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more in line but it will take time and we could have some sticker shock on bills this winter. guy: if we get those to a point where this is starting to fade, we get back to you 2%, 3% inflation -- which the fed should be comfortable with -- what is that mean for the trajectory of rates? if the fed is ok with 2%, 3%, what does that tell us about the rate trajectory? if the fed is going to sit back and let things develop, presumably that is solid news for risk assets. meera: what you would likely see is they will keep with the tapering timeline, initiate that process later this year, and by the middle of next year that is going to help put upward pressure on yields and help the yield curve steepen, particularly as the shorter rates remain anchored at zero. it would be supportive for the cyclical stocks.
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take financials for example. we have seen the bank earnings this morning greatly aided by the loan loss reserves and investment banking fees. at the same time still some challenges from a flat yield curve this summer. as we start to really steepen into the next year that will be supportive for areas like that within the market. alix: let's go to tech. some well-known investors are like, buy tech but have an exit strategy. what do you do with technology? meera: i think even when we start to see rates rise it will be a long time before it is truly punitive and rates are one factor that might weigh on growth stocks. we think about these business models being incredibly strong during a pandemic year, during a recovery year. they are becoming quite all weather and quality portfolios. yes we want to be mindful of the areas that have run a long way but i do think a lot of these
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tech stocks are long-term holdings regardless of the rate environment given the broader dynamic around that sector. guy: always a pleasure. thank you very much. meera pandit, j.p. morgan asset management global market strategist. thank you indeed. next, the world's biggest chipmaker. more on the taiwan semiconductors next. this is bloomberg. ♪
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♪ >> time for the bloomberg business flash. i am john hyland. walgreens posted fiscal quarter earnings the p estimates. the pandemic and u.s. vaccination efforts continue to have a parallel effect on
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the structure change. walgreens up more than 8%. mixed results for domino's. revenue missed estimates and sales of domestic sales fell 2% while international sales rose 9%. domino's profit was better-than-expected. in manhattan, apartment rent has resumed for the first time since the early days of the pandemic. the median rent increased almost 6% last month from a year earlier. that is according to miller samuel. apartment hunters are grabbing units as employers call workers back to offices. that is your bloomberg business flash. guy? guy: thank you very much. let's talk about the other earnings. i do love the pizza story. the largest chip foundry seeing profits topic estimates unsurprisingly considering we are talking chip shortages for a very long time.
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apparently there is more to come for psmc. dave wilson looking into it. dave: looking out to next year they see issues in terms of keeping up with the demand. let's focus on the third quarter. some of the numbers out earlier, revenue specifically, net income , sales, cash flow, all well above a year ago. in terms of the top and bottom line beating analyst average estimates in the bloomberg survey. looking ahead one of the key things for tsmc's profitability. they have this long-term -- they came just above 51% in the third quarter. rebound from a low and the second quarter. they are projecting the gross margin might be is highs 3%.
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profitability going the right direction. not a surprise given the chip industry and the ability to raise prices next year as some of its peers have already done multiple times. also, you have tsmc shifting its business. seeing weakness ahead in terms of demand for chip used in mobile phones and computers. in the case of smartphones they have a lot of business. automakers are an issue. if you look at the biggest customers, you see where that comes together. apple, quarter of the revenue. a lot of the rest going to other chipmakers because tsmc is a foundry. they are making tips for other companies as opposed to coming up -- chips for other companies as opposed to coming up with their own. alix: we are seeing a ripple. european tech stocks at a two-week high. what is the readthrough for the u.s. chipmakers? dave: more of the same as far as
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that goes. what you are seeing in europe is what you are seeing in the u.s. invidia, one of the biggest customers higher. intel and amd up as well. gains across other chipmakers. the chip equipment makers also higher. bear in mind, tsmc committed itself to spending $100 million the next three years on capital projects, including putting up a new plant in japan. what's good for the chipmakers is good for the equipping companies. alix: fair enough. really appreciate it. dave wilson joining us there. no doubt as we end up with positive results the question becomes, how long does all of this take? when does the supply chain write itself? -- right itself?
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you get a price incentive to build more foundries and factors and you get more supply. guy: number of things to say one of which is the taiwan focus is concerning because if you look at the geopolitical overlay you look at what is happening between china and taiwan, that is a concern. look at what is happening with asml. these of the companies that make the stuff and they are saying their supply constrained at the moment. that process will unfold slowly and you want to build chip factories in different places. it is just not as efficient. alix: diversification might cost more. guy: it is going to take a while. alix: coming up, morgan stanley up 3/10 of 1%, crushing estimates though. we speak to the ceo james gorman. this is bloomberg. ♪
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guy: approaching half past the hour. live in london i'm guy johnson, alix steel in new york. normally we don't stop the show to talk about the eia natural gas storage. but given circumstances this is worthwhile. last week 118 this week 49.46. quite a significant shift measured in billion cubic feet. we have actually come in 81 which is a bigger draw. that is a really big drop. alix: it rose 81 billion cubic feet last week. that kind of fits into the narrative that we are using more gas and will we have enough gas for the winter? some utilities are starting to run coal in the u.s. lng exports getting pushed out a max capacity. this feeds into the whole, do have enough storage situation
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with storage up 81 billion cubic feet as of last week? now you are looking at something like, 3.3 trillion cubic feet is what we have in total. it remains to be seen what anyone can do about that. natural gas producers are like, yeah, we are going to produce. it just is how much cap is going to be produced not just to maintain it? guy: you have loads compared to us. alix: yeah. guy: that is the real difference at the moment. you are unable to export all the gas you produce. we are unable to fill our storage because we cannot import enough of it and that is where the problem lies. this is fueling the inflation in europe. the energy crisis is massive. alix: another big part of that is the infrastructure, certain pipelines have been delayed or scrapped, leading to a lot of gas here but where is it going to get to? that leads to other issues and
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that is why it feels like this inflationary story could be more structural than cyclical because those are not easy fixes. some utilities have already started running coal in the u.s., more so than what we have seen elsewhere. all of this kind of feeding into the narrative when earnings report. let's get more with crush analyst for morgan stanley. we welcome james gorman, morgan stanley chairman and ceo and also sonali basak. james, thank you for joining us. i will headed over to sonali for a couple of questions. sonali: thank you for joining us. you said this morning you beat expectations and almost all major business lines. you are gaining market share. where can we expect you to expand the most the next six to 12 months? james: there is still a heck of
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a way to go. thank you for having us on. we just started the whole workplace strategy and we have several million pounds we brought through e*trade that is kicking off -- e-trade that is kicking off. we are continuing to see share gains and extremely good performance across the investment banking sales and trading platform. i don't expect the investment banking pipeline to slow down. it remains very robust and as the fed starts tapering you are going to see more volatility in the fixed income space. there is a lot of stuff going on right now. sonali: you had said during the earnings call earlier to watch out for volatility. many of your peers have been worried of an interest rates. what are you most worried about as they start to close up this year? james: you know, i said you have
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got to be mindful. we are seeing sharper movements in the market by the day. some of it earlier bubbles around spacs that have gone off the boil. more political tension between the u.s. and china. our job is to be mindful and, on the one hand, have your foot on the accelerator, but the other looking where the potholes are. that is what i mean by being cautious, but honestly, in the next several months i think the market has digested the fed will have to move not just on tapering but rate increases. by the way, we are 10 rate increases from what is normal. bringing it up a little bit over the next year is not a crisis and not unexpected. sonali: you said not a crisis. do you think a lot of people worried about the next correction in the market, are those fears misplaced? james: the people are always worried. markets go up and go down. one wise person said, when you
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have got basically free money, record fiscal stimulus, global synchronized growth of course the market is going to do well. when are they not? if this environment does not make it happen, none will. that does it mean it will go in a straight line forever. i have been doing this a long time. you have corrections, moments of excess, you have reassessments, psyche changes. we go through one of those but i'm not expecting some major crisis. nothing like the shots we have been through the last 30 years that were really material. alix: we are trying to understand, as we come out of covid, what normal looks like. as you look at your business -- james: i hope you have figured that out for us. alix: i have not. that is why i am asking you. what kind of business do you become when we "normalize." james: the last 15 years the very large global u.s. investment banks have gained
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shares. the scale economics you need at the technology you need to drive these businesses is so expensive and so intense. it is a really mode around. i think scale economics have accrued to those who got bigger. well-financed management, we are managing nearly $6.5 trillion. somebody could hire a financial advisor here or there or pick up a good relationship but $6.5 trillion compounding is a massive number. i see our future as this combination of the balance of the speed of the investment bank, the balance of wealth management, but both really scaled businesses. number one or two or three in categories around the world. guy: james, good morning. it is guy in london. all i hear about over here is the portfolio managers are either looking to be paid more
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or looking to hire people at higher wages. i assume you are seeing the same over there. what is that going to do to costs going forward? james: they should be paid well if they have done well. hours have done phenomenally. i am not surprised you are hearing it. you have revenues up. they are ringing the bell, serving clients exceptionally, portfolio is performing well. i would expect the portfolio managers to do well. on rising cost, we are in a talent driven organization. we are going to do revenues this year that perform around $60 billion. we have capacity around the competition pools to absorb rising cost for the young kids coming in. that is not a material trade for an organization like ours. sonali: how long does it continue? this is not just investment banking this is in your wealth business. do you see this wage pressure on
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the industry lasting for a while? what is that going to do in terms of the ability to control expense at the end of the day? james: sonali, i don't think it is going to be that important to what we are doing. if you do not perform, it goes down. there are natural hedges within these kinds of businesses that traditional companies don't have. honestly, my focus is on making sure we pay people well for great jobs done and they will get paid great for doing that. that is our focus, but it is not an anxiety around wage inflation. very different industries affected dramatically. what i see is wage inflation around the world. alix: let's go to jobs for a second. last two you promised not to cut jobs. is that of you changing as things are normalizing? james: that was something we
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decided back in february and we thought there was one thing we could take anxiety off the employee's shoulders. they had enough dealing with covid and all the health issues and economic issues going on around them and their families. we thought that was the right thing to do as part of our core of do the right thing. we are not looking to cut jobs. we are tried to hire people. we get over 100,000 resumes a year. we have had some attrition but not great and we had very little last year. we have certainly got a lot of open positions here and we are, you know, there is no major job cutting ic see in the future at all. -- i see in the future at all. guy: you mentioned inflation. it is going up broadly in a number of areas. listening to what you said both in this conversation and on the call earlier you seem pretty confident about the trajectory we are on. you see some bumps in the road
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but you don't see inflation getting out of control. you see this as being something we can manage our way through. james: i mean, that is my assumption. the fed will manage. they will have to bring rates up. my prediction has been for a long time is hawkish. i would have brought rates up by the first quarter of next year i would start moving. i think you have got to print the bubble. money has been to free and available right now. it is not transitory very wage inflation israel at the supply change -- it not transitory. wage inflation is very real. i think we are in a period where inflation will move up. he saw that in the dot
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points that came out. 9 dots at the next meeting. sonali: i appreciate the clear language. you also said today asia was a really big part of your gain in equities this quarter around. seen a lot of volatility built around those crackdowns. how do you view the region and its ability to help you push forward in the next few months or years? james: we have a huge business in asia but all the way from -- i grew up in australia all the way to japan. china, hong kong, through south
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east asia, indonesia and singapore, it is quite a diversified business. we are not oversized in china. relative to the opportunity we do very well. we have a nature license -- nayshare license but 95% is u.s.-based. we have a huge buffer and that we are very u.s. centric with the wealth business and institutional trading businesses are diversified geographically. china is critical to us. but the current tension and whatever happens as a result is not going to change the trajectory of morgan stanley. guy: really appreciate your time today. thank you for so much of it. morgan stanley chairman and ceo gyms gorman and our thanks to sonali basak. -- james gorman and our things to sonali basak. let's talk about the numbers coming out of the banks. david, what do you make of what we just heard?
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david: they are not showing any real success. if you're beating the number because of reserves, the market is not quick to count that. they want to mirror the success with respect to their growth into the retail and asset management businesses which are less cyclical than your corporate investment banking and trading. alix: do you think the numbers we have seen for morgan stanley, like bringing in $1 billion in advisory fees, equity underwriting above $1 billion, is this the top or is there more room to boost when it comes to morgan stanley? david: great question. i thing are close to the top. it is difficult to ever call the top on anything but we are close. i also think the asset management businesses are close to a top in general. we have seen growth and profit growth purely by acquisition and scale. we wrote a position last week
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saying, distribution is not enough. these firms are very commoditized. goldman sachs and morgan stanley, at the end of the day the asset management business is commoditized. talent is going to get more expensive because there are few people that can beat the market. these firms are going to have to continue to innovate in a way we are not hearing them talk about. talk about really strong franchises, huge businesses and scale. i don't think that is enough anymore. guy: how do they do that? we have clearly seen acquisitions taking place. you listen to jamie dimon and hear him talk about fintech and the fact it is playing in a different ballpark than the one he is playing in because of regulation. is this industry just going to continue to eat up the fintech as it comes through? how did they compete with it if they can't do that? what is the strategy? there is a whole world developing in financial services at the moment that operates on a
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different regulatory framework. david: this is going to be fascinating because you got jp morgan, morgan stanley have done the right thing. they had huge numbers of customer relationships and that is one thing that, for all their technological superiority, d5 particles do not have. you cannot make money if you do not own the customer relationship. that is a large strategic advantage for the big banks. what they don't have is the ability to keep up with the protocols and blockchain technology if they do not buy their way and. they also have a lot of cash to do that. what i think you're going to see is a gradual transformation of these traditional banks into more tech savvy firms via acquisition. a gradual transformation as these technologies become -- alix: we are going to leave it
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there. thank you so much. david trainer, new constructs ceo. appreciate that. coming up, finance minister bruno le maire wrapping up with reporters. he will be joining us next. this is bloomberg. ♪
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♪ guy: finance minister bruno le maire finishing in washington. he is there with annmarie hordern. over to you. annmarie: we are dodging acorns. this guy is certainly falling. i am joined by the finance minister. thank you for joining bloomberg.
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i want to start about the tone of your trip in washington, d.c. that comes after the dispute between paris and washington. you describe the u.s. as misbehaving. do you still feel the united states is misbehaving. minister le maire: i think that is what was done during the meetings was positive and constructive. we had constructive talks with the secretary of the treasury janet yellen, with the president of the fed jay powell, with all my american friends. i will have some meetings within the white house in a few minutes. i think we are on the right way to build back and to have a constructive relationship on all financial and economic topics. annmarie: another big question is how to approach china. you say the united states wants to be a little more combative while europe wants to engage. does this just mean there going to be an inevitable division on
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the transatlantic relationship? china is the cornerstone of not just foreign-policy but domestic policy. minister le maire: i would like to insist on the fact that we share common views with the united states. we believe in democracies, we believe in the human rights, and this is at the core of the relationship between the united states and europe. then there is this big question of how to deal with china. this is a key question for all of us. united states wants to oppose china. europe wants to engage china so there is a difference of view. we need to discuss about that because it is clearly a strategy question. let's discuss the best way of talking with china, working with china. we don't think opposing china is the right way of behaving but let's discuss other questions. annmarie: another point of divide is taxation. we have the oecd plan.
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does this mean we will not see the digital levies in europe? minister le maire: the digital levy to me is not the right solution. it would mean taxation on private companies. we have succeeded in finding compromise on the strategic question for the 21st century. this is the tax revolution. this is the first time we succeeded in finding a solution on taxation issues. there is no way back. this means more fairness, more efficiency in the way we will tax the biggest companies in the world, the way we tax profits made by companies without physical presence in the nation's. that is a major achievement. france played a key role in the united states and president biden's leadership gave the final push. that is clear evidence we are working well together on those
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key questions. annmarie: but will the eu drop the digital levy? does that set the path forward? minister le maire: we will drop our national taxation as soon as the system will enter an be implemented. we will withdraw national taxation. i made a commitment to the u.s. administration. i will stick to the commitment. annmarie: what about guarantees from the u.s. on their tariffs on france in europe? did you get guarantees those would be drop? minister le maire: for the time being no, but these will be dropped if we commit to taxation, there must be commitment to withdraw tariffs. that is building a constructive
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relationship and finding relationship between the two countries. annmarie: one thing that is going on in france and europe is the energy crisis. you have been in politics and economics for decades. you know the yellow vest well. what is france going to do to ease these rising energy costs? minister le maire: you need to take short-term solutions and you need to -- that is what we are doing with the prime minister and the french president. we have decided to introduce very clear and strong decisions to protect the consumers against this increase of the energy prices. annmarie: are you worried about inflation? is that a bigger risk? minister le maire: it is consistent with the strength of the economy recovery but the level of inflation is directly linked with the energy crisis. that is why we want to protect consumers from this increase in energy prices. you also need a long-term
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solution. the long-term solution for us is a total of the whole of the energy market. we don't want the electricity price to be dependent on the gas price. annmarie: bruno le maire, thank you so much. minister le maire: thank you. annmarie: the french finance minister at the beautiful french abbasid or's residents. -- ambassador's residence. the big question going forward is how to deal and engage or combat china. alix: 100%. thank you so much. great interview with french finance minister bruno le maire. it feels like the longer-term strategic shift is going to be how to deal with china. it does feel, as you heard at the end, in terms of the energy crisis, it needs to be short-term solutions now. that would imply more subsidies but longer-term solutions
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standing behind that renewable green energy push. guy: one cannot diverge europe from the other. in the short-term europe faces a number of different challenges. france still relies and imports a lot of russian gas. france and germany imports even more. what is that leave europe and european security? france has made a huge bet on nuclear, tumor and he walked away from that -- germany walked away from that there is a patchwork in terms of energy need and demand. particularity if you are putting a green light over that parent europe relies on russia. tough place to be. alix: takes the reins? macron is trying to do that to some extent but elections are
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coming up that will prove difficult. germany working on their government with merkel stepping back. who is going to be that person to unite and lead? can macron and schultz do that together? what if he does not win? there are political relays that are going to make things more complicated to get something cohesive done. guy: there is a name you are missing which is mario draghi out of italy. he is not elected. does that change the narrative? he feels very focused on what he is doing in italy. he has taken italy back firmly in terms of its relationship with china to a european base looking at china and a cautious way. we talk about all of this and focus on what is happening with inflation, the energy story. we are joined in "the european close" by kiran ganesh.
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♪ announcer: the countdown is on
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in europe. this is "bloomberg markets: european close" with guy johnson and alix steel. ♪ guy: thursday the 14th. 30 minutes to the close. stocks bouncing quite strongly. earnings outweighing inflation and growth fears. another bounce and commodities driving miners and energy stocks. a european electricity prices jumping sharply. grids are being forced back to gas and coal. you can gas up 9% right now. germany slashing growth forecasts but bottlenecks throttle growth. ikea is falling.

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