tv Bloomberg Markets Americas Bloomberg October 20, 2021 10:00am-11:00am EDT
guy: wednesday the 20th. 30 minutes into the trading day stateside. you could argue with some exciting things happening. welcome everybody to "bloomberg markets." as i say, on the surface, it doesn't look exciting. stocks inching back towards records. bitcoin is already there. alix: also, for s&p, we are now the sixth day on the upside. we haven't seen that kind of winning streak since all the way back in july. it is hard to find a real driver as was -- driver of what is leading. health co-names -- health care names are all outperformer's in the s&p. that going up 3%, yet another record. you had that first bitcoin futures etf, the second day of trading up 5%, helping that
outperformance. the curve steeper. that is better for banks. not a lot of movement in the bond market. volatility down quite a bit. pimco, you heard welcome fells just talking about this, sentiment rolling over, but there is no alternative. therefore, buying stocks, and buying continues to come down. guy: i think it was john authers talking about tina+, basically being pushed pretty hard. let's dig in. let's get to our top stories and get a little more detail as to what is happening here. bloomberg's abigail doolittle has the stories we are watching. the virus is back in part of the conversation again. big opinion columnist asked neeson -- bloomberg opinion
columnist max nisen has a piece on this. the democrats are starting to make some progress. baby steps on the president infrastructure deal. netflix certainly one of the movers we are watching carefully here. the earnings season in full throated roar now, and it is having an impact on the market. what are the details? alix: that looks certainly --abigail: netflix certainly having an impact on the market. now down 1.7%. they beat adjusted earnings estimates. sales coming in right in line, so still coming out of the pandemic malaise, weighing on netflix to some degree. deutsche bank cutting shares on the fact that valuation is very high and all of the good stuff is priced in. but prior to the report, the options market pointed to an 8% move up. we are simply not seeing the
kind of volatility. united airlines has been down. they posted a narrower loss than expected. ceo scott -- scott kirby voiced concerns on rising jet fuel costs. it looks like you may see that one flip higher. let's take a look at a number of the health care stocks. here's the good on the day for earnings season. you can see big gains right across the board. anthem up nearly 6%, an intraday record high. they beat and boosted the full year outlook. biogen up 1.8%. they also put up a solid quarter, despite the fact, and boosted the outlook, despite the fact that the take-up of their alzheimer's drug is a little slower than may be hope for. abbott labs up 3.6%. they beat and boosted, and a lot of it has to do with covid testing and strong demand. alix: bloomberg's abigail
doolittle, thanks so much. in new york city, all city workers are now required to be vaccinated get employees not vaccinated by next friday will be placed on administrative leave. that is we are getting closer to the booster. max nisen has the details. it has been a while since we've had you at the top of the show. what is the state of play of covid? max: ever evolving and very complicated. speaking first about new york mandate, just ongoing movement towards more stringent and broader vaccine mandates, in this case eliminating testing exemptions, something that makes sense because frequent testing is very expensive, and opening that up as an alternative isn't really effective at protecting people as mandating vaccines. then these upticks you are seeing in the u.k., that it's
unfortunately the reality we are going to be living and heading into the winter season. as long as you don't have universal vaccination, you have vaccine efficacy fading and some people. you have very different levels of intervention around the world. you will see these rolling outbreaks, but the good news is that over time, fewer and fewer infections are going to lead to hospitalizations or death due to vaccination and prior immunities. guy: the health secretary here in the u.k. is briefing a couple of hours. we will see exec he what he has to say in terms of the progress or direction we are going to take. max nisen, thank you very much, indeed. you don't often get to say these days that we are seeing progress d.c., but maybe we are actually seeing some right now. democrats making way in breaking the stalemate on president
biden's agenda. here to talk about some of the concessions being made, bloomberg washington correspondent annmarie hordern on capitol hill. annmarie: certainly they are trimming, and potentially if they drill down to $1.75 trillion, that would cut in half that ambitious $3.5 trillion package. but there is momentum, and what you can see coming out of these meetings yesterday at the white house, the president meeting both wings of the party, the progressives and centrists, you can see what is going to be ditched and what potentially will live, and what might live, but not to its full extent. the child tax credit will likely get a single year renewal. the hope was that would go to 2025. you can see how they are already seeing some concession being made from the left to meet the centrists on the right. also, things like the community college provision, that is getting ditched.
then there are question marks like the clean electricity program. if senator manchin maintains he could not vote for that, that is something that is still ongoing discussions. how do you fill that hole pin julie of carbon tax, or tax relief for renewable companies? we need to see what they come up with. but you can start to see a bit of a framework of a blueprint of where the concessions are being made. this is really what the president is trying to do, trying to bridge both wings of the party to be able to make it tolerable for moderates, but at the same time, not lose those progressive folks. alix: thanks a lot, bloomberg's annmarie hordern. coming up, stocks inching towards record highs. strong earnings, yet overall uneven inflation, uneven growth. how do we square those? this is bloomberg. ♪
alix: live from new york, i'm alix steel, with guy johnson in london. this is "bloomberg markets." fears of stagflation may be easing with the treasury curve steepening for a second date. lloyd blankfein spoke with bloomberg's erik schatzker on the challenge of raising interest rates. ♪ >> some things that are inevitable that have been of some concern is how we manage interest rates, going back to what i will call normal, but normal history. if everybody owns paper that has been issued at 0.5%, 1%, 2%, and interest rates go to 5%, not an
unreasonable place over history, what happens to the market on everyone's portfolio? as a result of low interest rates, people are then taking extra credit risk. maybe sovereign risk. extra credit risk in order to get higher yield. that will break people's hearts because things are stable, but the market gets disrupted, it tends to be the weaker credits that separate from the weaker. there's a number of things that can go wrong when the money starts to get allocated by assigning a cost to money that is more inconsistent with history, and that is a long way from where we are now in the market. >> are we about to have an inflation problem? >> there's a lot of remedies in the world, painful as they are, for inflation.
it is very hard to get rid of deflation. so if you had to air on one side or another, you should err on allowing inflation to take and not want to get yourself into a kind of deflationary japan for 25 years, as a reference. guy: lloyd blankfein, former goldman sachs chairman and ceo, speaking exclusively to bluebirds erik schatzker. let's talk more about some of the things he just talked about there. anastasia amoroso, i capital -- icapital network cheap investment strategist, joining us now. how different does the strategy need to be? anastasia: if we were to go to 5%, the strategy would be very different. every asset class around the world would need to be repriced.
that poses a big risk to valuation, be it in public markets, private markets, and so forth. but i think lloyd would also agree this is not the scenario that we foresee in the near term future. i think the likely scenario is that inflation is going to stay elevated forget we are still going to be running core pce through 4% for the next few quarters, and slowly but surely, we are likely to come down to 6% , 2.5% by the end of next year. the fed may or may not act on that, but they are not going to react by hiking multiple times and a quarter. they are likely to go at a very measured pace. i think that is a scenario we can put aside for the time being . the scenario we focus on today is how are we going to overcome these inflation challenges and overcome the supply chain issues so that profitability remains intact for corporations and purchasing power will remain intact for corporations and consumers as well? alix: that is all we are
listening for on all of the calls. where do you think that is priced in, and were using there is more potential downside to be priced in dealing with that? anastasia: i think a lot of the supply chain fears are starting to be priced in. i really see q3 as a quarter for peak shortages and p lays, and we even had i think general motors reported the other day, thing they likely have seen some of the instruction in q3, and things are likely to improve for auto production in q4 and into 2022. so i think we are largely pricing that it, and there's three different indicators i would point to to say may be a lot of these things are priced in. first of all, the shipping costs a lot of companies have worried about. if you look at the shipping indices, the price for container ship rates -- the price for container ship rates has started to come down because we are not
seeing as many delays on the port of l.a., for example, and are starting to get some of the core workers back to work. we are starting to see movement in trucking employment as well, so that should alleviate bottlenecks. the last factor i would went to, the reason why there's also the manufacturing intermediary shortages, that has to do with factory closures in asia, which are very ciccone and and strict. i think these will begin to fade as the cases abate. guy: just seeing singapore go back into lockdown, so it is not going to be a straight road. it might take away from the earnings season thus far, that the consumer is going to pay, not the corporation. we are going to see prices ultimately passed on. do i avoid anything with consumer exposure? anastasia: i think it is a little bit challenging for the consumer industry. the good news is that corporations are raising prices to make up for higher input costs, so they are largely
preserving the margins. the other piece of good news i would say is that they are also raising wages, and wages are running 4.6% year-over-year, so consumers are able to buy. those are two positive things. but i would still, from an investment perspective, shy away from consumer staples and consumer discretionary because at some point, after three price hikes, i am not so sure. even though we are seeing shortage, it is still going to take months for them to fully resolve. and by the way, some of the consumer companies are using contract rates versus spot rates. i still think because they have thin margins, this margins can -- parts of infotech where margins are really wide and you
don't have the same sensitivity to rising labor costs, for example. alix: here's my broader questions. do markets tear? when you have pimco saying we have uneven growth, sentiment is rolling over for all of the reasons you just outlined. risks are piling up on that. but the vix is at 15 and we are still around record highs for the s&p. anastasia: there's a few reasons why markets are shaking off all of this. seasonality has a lot to do with it. your after year, we have a volatile september, volatile first have of october, and then things tend to pick up. i think the reason this happens is because a lot of concern builds up in september. this year it is the debt ceiling, the different physical worries, the supply chain. then we tend to resolve a lot of those concerns as we approach year-end, and that is what the
markets are going through today, little but of positive resolution. the other thing is there's a lot of concerns in raised, but take a look at the earnings numbers. first of all, i think we have a 13% earnings surprise this quarter, and now the growth rate for q3 has been ratcheted up to 30%. that is not something to sneeze at. that is a very positive number. the margins are 12.5%. so i think that is why there's a tendency to shake some of these fears off. if i look at 2022, earnings growth is still likely to be 9%. so all in, this is a positive backdrop for markets. guy: $65,920 is the current price of bitcoin. buyer or seller? anastasia: it is a little bit difficult to make a short-term call on bitcoin here because i will say we have seen a tremendous rally, and we are looking at levels that are overbought. for a lot of our clients, for a lot of holders, this is a
longer-term allocation. they hold and stick to it as part of their strategy. i would think about buying in on any dips we get because longer-term, if you think about there is close to 40 million in bitcoin investors today. if that 40 million goes to 80 million and suddenly higher than that, that network value should continue to drive the price higher. so i think it is an important part of the portfolio. it has the low correlation and a high risk adjusted expected return, so i think it does have a place in the portfolio, but it has been quite a rally near term. alix: that was a yes, but maybe not today. anastasia aromas -- anastasia amoroso, thanks very much. tune in tomorrow for a special edition of "bloomberg markets: the close" and "what did you
miss." don't miss that. it starts at 2:00 p.m. tomorrow in new york. coming up on this program, two out of three netflix subscribers have seen the korean series about people deep in debt playing children's games with a deadly penalty if you lose. "would game -- "squid game" drives netflix to its biggest sustainer growth -- biggest subscriber growth all year. is it sustainable? this is bloomberg. ♪
♪ >> what we saw as the quarter continued into september, we saw acceleration in our growth which is what we had been hoping for and expecting, but it was good to see as we got into the strength of our schedule. guy: netflix cfo spencer neumann talking on the analyst call yesterday. subscriber growth doubled from last year.
tepid fourth quarter outlook may be leaving people a bit concerned which is why stocks may be drifting a little bit today. dave wilson is breaking down the figures. dave: when you talk about a bit of disappointment with the fourth quarter outlook, we should point out netflix looking for a .5 million new subscribers to be added in the quarter, and analysts were pretty much write about their and the bloomberg survey. but they are already forecasting the quarter will come up short. we will come back to that any moment, but just looking at subscribers, you can see there was that pandemic driven burst last year in terms of people willing to sign up for the service and pay for it because they were spending so much time at home. that has faded this year. now it is coming back. that is a plus. clearly, the popularity of "squid game" has been a part of that.
beyond that, you look at google search figures, and you see that indeed, there were more done in the early fourth quarter then in the third quarter, so there is the potential for "squid game" in the period as well. but be free cash flow issue is definitely out there, money that netlist can use to repay debt, to make new programs, that sort of thing. analyst were looking for it to be positive in the third quarter, and it was negative, so you had a cash outflow. on top of that, netflix is talking about being negative this quarter as well, though they are anticipating that once you get to next year and beyond, it becomes positive. alix: how much of that can we attribute to things like what you are talking about, a pure by the rumor, sell the news? netflix is already trading so well. dave: there's no doubt on the latter point. you only have to go back about
two weeks to see a record for the stock. to put it in perspective, it is only down about 3% or so since then. you can argue that what we are seeing today is a case of selling on the news. you could also argue that there's enough things to be disappointed about given the performance of netflix shares over time that if you are looking for weak spots, you found them when it came to things like the earnings forecast and cash flow. alix: dave, thanks a lot. just want to break some news for you. majority leader chuck schumer is speaking right now on the senate floor. he is going to stick with nancy pelosi and the white house later today. he is calling for the fact that everyone must compromise to reach an economic agenda deal, but does say they are getting closer to an agreement, and that democrats are united and the desire to reach a deal this week. got to wonder if he is speaking for everybody there, or if the
hope springs eternal at the end of the day. guy: united democrats doesn't sound like something we have experienced recently, doesn't it? salt is still on the table, which is one of the top stories we are watching. everybody focused on that. i would imagine, including you. alix: absolutely, deducting those state and local taxes for property. we all really care about here. coming up on the program, we are going to talk more about what i also care about, which is commodity prices. you're getting a bit of a dip today. part of that is an inventory issue. part of that is the market trying to suppress energy prices. we are going to speak to ed morse, the citi global head of commodities research, joining us next. this is bloomberg. ♪
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it wasn't that long ago in reality that we were worried about oil storage, worried about inventories. we were worried because and get any more oil into storage because there wasn't any storage left. that situation is reversing rapidly. alix: yes. which period of history are you talking about? because so many times, we have been worried that there hasn't been enough storage. now the question becomes where are we in terms of production and storage in the u.s. for natural gas, as well as oil. inventories actually saw a bit of a draw rather than a build a 41,000. cushing also saw a very big draw of two point 3 million. gasoline inventories saw a draw. refinery utilization was down by about 2%. we are slowly drawing out storage on crude oil supply, as well as the product supply. how this sets us up for a cold winter, that has really been the
question. joining us to help us answer all of the questions as we wind up having oil spill over $80 is ed morse, citi global head of commodities research. what is the state of play supply and demand wise in the u.s.? ed: it is very tight. we are having inventories pulling down to lower and lower levels. it is not just the u.s. come about across -- the u.s., but everything we can observe get the numbers would like to look at in days of forward coverage in inventory, healthy would be above 55 days. 60 and over, that is where we were. it was april of last year that we ran out of storage and oil prices went negative. this time we are worried, with a
cold winter, that foreign demand coverage for the oecd as a whole and observable inventory, it is all most unheard of. two it is almost an exact reverse 14 or 15 months ago. guy: you guys are fine over there. you guys are in energy island. it is the rest of us having her get what you think the outlook is going to be in europe and in asia? ed: we are absolutely self sufficient in natural gas. you get spot prices of lng in asia hovering around 33 dollars, $35. the same level at the heart of europe. so yes, it is a very tough entry for most of the rest of the world.
alix: guy always says this to me. you guys are fine. you are going to be energy independent. but we are not actually producing it. so why do you think that price signal is so broken? ed: it is partly broken. it is not fully broken. it is the discipline of the publicly traded companies, the privately owned companies are really ramping up their drilling activity, and i don't know what the production number was from the eiea today. we are getting the return of everything shut down from hurricane ida, and we are well above the low point. so i think we are about to see a year ahead which is going to look more like 2019 than 2020 or 2021. we are going to see an order of magnitude of u.s. production
growth if you include ngl's, along with crude oil. so i think the drilling has kept up enough that it is going to continue to increase, and we will soon see the public companies adding to what we have already seen from the privates. alix: production was actually just 100,000 barrels a day short of the high saba for hurricane ida, so we are producing more oil here. ed: in the permian is just about what his former peak was. guy: you guys are fine. we over, less so. what is the worst case and are you in your winter? ed: he worst case scenario for europe, we've had a dozen of these in the last 30 years, if we have weather like we had in the last 30 years, europe will run out of natural gas available in inventory, and god knows what the price means because it means you got to hit a price that really raises consumption to get the market even.
so double or triple today's prices within the rome of reality. $100 natural gas in the city -- and the electricity equivalent of it if the weather is really cold. alix: your most recent note shows the different drawdowns in inventory for natural gas, based on how cold it is going to be. we are seeing a really cold winter of 2005 and 2006. your inventory is depleted completely. but in a better case in area, we are still relatively depleted here. so i am wondering how quickly you think europe can stock up if we have the average of the last four years. ed: the question is where is the inventory going to come from. we know the main source of supply is no longer lng. the lng available in the world has been taken up, and the chinese have gone into a bidding war with whatever extra
molecules there might be, so nothing is going to come in by the way of lng area a little bit maybe if hydro turns in brazil. but we are not talking about a lot of natural gas, and so far, the russians have been facing the same problem as everyone else. low inventories because of the high temperatures in the summertime, so they couldn't produce enough to fill up their own inventory, let alone europe's inventory. that will make a huge difference , but like the weather, we don't know what the russian supply is going to be. guy: maybe it is just next november. what can china do? china is trying to manage the markets, trying to basically change the landscape. it is focusing on coal.
it is trying to manage the price there. how in control you think the chinese authorities can be of their own destiny when it comes to energy prices this winter? ed: they can be in pretty decent control. they have either cut off or rationed electricity to certain industries that are heavily energy intensive, and yes, you are looking at a chart of where: min tories were in china at the beginning of winter. so you can pay the workers, but shutting the energy intensive industry, aluminum, copper, zinc that are impacted by it, that means lower rate of growth. economists have already dropped expectations of chinese growth for this quarter by 0.5%. they may have to double down on that, depending on what is going to happen in terms of industrial availability over the winter
time in china. alix: i have to ask about the copper market because it is also a china story. we have seen record creation on -- record backwardation on lme. trafigura had to constrain a lot to meet client demand. is it an idiosyncratic thing, or is this what we will continually see as we go through this green energy transition? ed: copper is a particular problem in that we don't know where the supply is going to come from. the supply that we can identify is much more expensive than the average supply of copper. whatever happens in the near-term, rising prices right now, probably dropping at the time we get to the end of winter. but the issue with copper is the increment of molecule of demand goes into a greener planet. more than half of our expected copper demand will be incremental to today's demand,
based on greening of the world. copper is really a part of that for the time being, so copper prices will go up again. guy: great to see you. stay warm. thanks very much, indeed. what are we going to talk about next? bitcoin rallying to a record high after a strong debut of the first u.s. etf. we will talk more about this next. this is bloomberg. ♪
leaving some to figure out whether it is related to cryptic currencies. bitcoin rose to a record high today after a strong debut by the first u.s. exchange traded fund. investors may have traded a lot of the new bitcoin users etf on its first day, but crypto bull cathie wood was not among them. here is wood at the mocon's to toot global conference st milken institute global conference -- the milken institute global conference on her reasoning. >> there's more having to do with contango versus or normal backwardation, so not yet. >> the fund from proshares is based on bitcoin futures and is the first of its kind in the u.s. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm john hyland. this is bloomberg. guy: thank you very much,
indeed. let's stick with that bitcoin theme. record highs today, at what point -- at one point up over 3%, after the launch of that proshares etf. it surged more than 120% this year. the bitcoin story for goldman sachs with the first u.s. bank to enter the crypto business under then lloyd blankfein. he spoke about why they got into this early. he talked to bloomberg's erik schatzker in the front row interview. ♪ >> a lot of bright people think it has a bright future. i'm telling you, i have a whole foot and four toes into the whole world. it is not something i gravitate to i can think of a lot of reasons why it won't work. but i remember when they were auctioning off spectrum for cell
phones and saying, why would anyone need a cell phone? just pull up to a phone booth. i thought, who would carry that clunky thing? the point is there are a lot of things in this world that have worked out awfully well. >> for somebody who used to run a bank, you sound pretty constructive. >> i ran a bank. you have to celebrate fact from opinion. nobody knows the future. there's all sorts of things, there's a lot of things that in directions that i couldn't and wouldn't haven't dissipated, and no one else would have either, so to just come out and say that he market already in excess of $2 trillion that faces all these regulatory headwind that a lot of people really don't like and
would enjoy seeing crushed, it doesn't look like it is flourishing, but on no day does it look like it is dying. >> do you own any crypto? >> no. alix: so one of his toes is not in on crypto. you can see the rest of that interview with lloyd blankfein, former chairman and ceo of goldman sachs, on your bloomberg terminal. let's get more on the second-highest traded fund ever that traded hands yesterday and it's market debut. katie grice held -- katie gri feld joins us now. now what? katie: it looks like it is still in high demand, even after the huge demand we saw yesterday, just under $1 billion worth yesterday. in the first 15 minutes today, you saw over 200 million traded, so it will be fascinating to see where that number ends up. you also have options available
on this. it will be interesting to see how that shakes out because that should be a pretty meaningful for retail investors, as well as institutional traders, to be able to hedge their positions on the etf or be able to maybe supercharge some of that, so fascinating watching this in real time guy: what is the chat about this? it was interesting to hear cathie wood talk about contango's and backwardation. but the concern here is obviously that as you roll forward, you have to pay a higher price, and ultimately that is going to eat into returns. is this something that is going to end up with a fairly limited audience because people will realize they are having to give some of their returns away, and therefore returned to the physical market? or is this going to become something that a wide specter of people ultimately use and suck
up that cost? katie: that was the expectation, that you would not see people rushing for the tf because it is futures base. this is something we deal with all the time when we talk about commodity etf's, we'll etf's in particular, the have to do with those contango costs. that eats into returns. but just looking at the trading in the past 24 hours, that doesn't seem to be a concern for some of the investors going into this fund. we know that is a concern for the issuers. we also know that invesco in particular dropped their pursuit of the futures bitcoin etf. they did not say why, but they said they will still pursue a physically backed etf, so it is definitely something the issuers are thinking about. surprised to see investors are still going for this. guy: great stuff. it is amazing to see this thing still going on day two. such a strong response. we are getting headlines out of germany.
unsurprisingly, angela merkel is indicating that she will leave the succession planning for jens weidmann, who announced he will be stepping down earlier as head of the bundesbank, to her successor, which looks like trent finance minister left schultz. it does seem as if -- everyone was surprised, but it does seem as if this is now becoming the way to bundesbank heads leave. we have seen time after time that they have decided to leave. still don't know exact why he's going, but he says personal reasons. it will be interesting to find out exactly why. he was, of course, passed over in the race to become the next resident of the ecb. haven't seen a german yet taking that role. whatever going to talk about next? one of europe's private equity firms, eq t.
♪ alix: european private equity firm eq tia's shifting focus to target long-term investment in companies they expect to shape the future. the ceo and managing partner spoke to bloomberg's ed hammond. >> what is different is that eqt is a firm, we want to have a positive impact with everything we do. when we thought about how do we sharpen our pencil and have even more than already today, we said we want to have a fund which is really differentiated. the two things we felt were kind
of missing in the market was one, to be able to really invest for the long term to drive long-term transformation, and the other is a bigger fund that also links real impact targets to the fund's performance and compensation. we are calling this an impact led strategy. instead of a lifetime of 10 years, which is typical of private equity, it will have a 50 year life, and the holding. will be eight to 10 years instead of three to five years. so it enables us to have a slightly different mindset and think even more about driving the kind of transformation needed for both the environment and society over time. >> did you if i'm at right now is much like the rest of m&a, extra ordinarily high valuation, seeing companies often compete
in fairly heavy bidding wars. i wonder how a firm like eqt retains discipline on the also manages to deploy capital. those two things seem to have a lot of tension right now. >> what we have been building since 1994 is really trying to focus on somatic investments, so we are trying to find companies and industries backed by long-term secular trends. then we try to find businesses where the price that we pay for the company today is not the determining factor for the return of the investment over time. the companies where you can really drive innovation, drive internationalization, do that on acquisitions, take real transformational leaps like a company i mentioned on our orderly earnings call, the largest yellow school bus company in the world, where today come all of those buses
are diesel driven. our thesis actually transforms those buses to electrical vehicles, making them more future proof, more environmentally friendly, and safer. we are trying to find companies like that where the price we pay today, we can still make a very attractive return by driving that kind of transformation. guy: introducing -- interesting stuff. that is the eqt ceo and managing partner speaking to ed hammond. that is where i think we will see a lot of the effects coming through. you can get granular. you can get temp to some of these obvious levels. you kind of walk around and can just see opportunity after opportunity. you talked about yellow buses. that seems like such an obvious thing to do. kids going to school, there are thousands of them. if you can transform those buses, that is going to have a huge effect. alix: there is so much cash waiting to be deployed, and
let's not forget there's billions of money in spac's that have to be spent over the next couple of years as well. there's a lot of stuff happening, and i just wonder what is evaluation for a lot of these guys. how much more are they going to have to continue to pay up just to get something on the books? guy: i think it is going to be interesting. are you as an investor going to be best served? i appreciate that we have to have a conscience, but are you going to be best served from a returns point of view by going into this space? there's an awful lot of money floating around at the moment. we need to talk about what is happening in the european markets. we are seeing a subdued session thus far. the earnings story is the narrative area inflation front and center. that is next. this is bloomberg. ♪ is is bloomberg. ♪
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johnson and alix steel. ♪ guy: wednesday the 20th. what do you need to know out of europe this hour? u.k. inflation staying above 3% and now expected to climb to 4% or higher. we will discuss that in a moment. jens weidmann quitting the bundesbank. the surprise move for personal reasons comes after he was passed over for president. angela merkel saying within the last few minutes that it will be up to her successor to pick his were placement. covid cases continue to climb across europe. the u.k. secretary will hold a conference, expect it to urge the elderly to get boosters. his government is still ruling out lockdowns for now.