tv Bloomberg Markets Bloomberg October 25, 2021 1:00pm-1:49pm EDT
what a lot of people forget is that facebook isn't just about the platform it is about instagram and whatsapp. we speak to experts day in and day out about these issues, these companies, and they regularly say that instagram has become the social media by, not facebook, not tiktok, not twitter, it is instagram. it is a combination of audience reach as well as targeting as well as values they provide to advertisers. that is something to watch for, how well instagram is providing an offsetting some of the challenges on the core facebook platform. facebook is going to talk up how much they are spending on a lot of the issues related to number one, safety and security, number two, funding creators. and they are going to talk about this concept of the meta-verse,
which requires a substantial amount of capital. what is interesting is last year they were at roughly 20% growth and people are expecting them to be at 20% for next year. is this a post or enter pandemic boom -- intra-pandemic boom? we will see. there are indications how people should be thinking. matt: we really appreciate your insight. scott kessler, head of technology for third bridge global. up next, we will talk about m&a. the cohead of global m&a at goldman sachs is joining us. this is bloomberg. ♪
matt: this is "bloomberg markets." . low rates and abundant cash could go to $5 trillion. here to discuss the boom is stephan feldgoise, the cohead of m&a. we were talking about $45 billion deal with paypal and pinterest. it does not appear now as that will happen. i have noticed a trend. a lot of the huge deals we hear about that we are reporting on do not come to fruition. are we going to reach a new record with a lot of little deals?
>> the vast majority sits at the larger sizes. this week and last week, this will be the most active m&a market in the street. that is eclipsing the numbers we have seen in some of the markets. dialogue continues. deals happen and sometimes don't . the velocity has been extraordinary. it continues at a robust pace. >> are at an interesting point and tipping over and what will be an all-time record for m&a. the conditions are perfect here you have the headwind of the antitrust, national security. you have credit, but that has been there for a while. but what is driving it? stephan: companies, boards,
shareholders are coming out of the pandemic. at the strategic landscape. if there is something that we wanted to do, it has only been accelerated technology enables companies to reevaluate it, but shareholders have supported it. ed: how much of this is companies and shareholders saying it is worse than taking the risk because m&a is always somewhat a risk of going out and buying another company and seeing if we can grow. stephan: boards have decided they should take the initiative. you have to have a strategy and execute and you have seen companies from old to new embrace that. capital supported them. most importantly, the shareholders and boards of the companies have supported them in doing so. matt: is any concern that we are headed into much more difficult
economic times with inflation, with a drop in consumer confidence? are companies trying to get m&a done now to gird themselves for a more difficult economic climate? stephan: i don't see boards having discussions that they are preparing for a tougher economic climate. they are seeing demand for products, supply chains stretched, the demand at off -- is off the charts. companies are thinking about how do i position myself to meet the demand versus positioning for my -- for what might be tougher economic times. all the indicators we see is demand remains strong which drives corporate earnings. ed: you had this advocated -- this it position, how robust is the supply line? stephan: we look at new deal
mandates, the number of board meetings, all of the metrics remain at levels we have seen throughout the year. that is our best forward indicator this year looking into next year. and the activity levels remain at extremely high levels. matt: how are you doing in terms of competition? goldman sachs is used to being at the top of the table, but what are you doing to fortify your position there? stephan: we are a people business and our clients interests most importantly. we have invested in our clients and the long-term client relationship to figure out how we can help be a partner to our clients. on the internal side, it is resources. we know we need to have a strong, happy workforce. we have hired a lot of people. we have done some things on compensation. it is clients and how to help clients achieve and what to do
strategically. ed: what trips up this market? stephan: we are in the business of worrying about risks. hopefully we are through the pandemic. there are different things around the world that could have an impact. inflation is a topic of much debate. will interest rates move? they have historically had an effect on m&a. there is always sovereign risk. whether you think about sovereign relationships or other things. we worry about those things and they have existed and haven't slowed the m&a market. we are always thinking about those risks. matt: i wonder if there has been any effect on m&a with expectations. i realize the business you do is big, i mean more than a trillion dollars of total deal value this
year, but do you see any businesses being driven by worries about tax changes? stephan: it has been modest. you've seen some transactions trying to get things done in 2021. do not know where any of the tax in the u.s. where the situation may not play out. most companies are not thinking about one month or three months. they are thinking 1, 3, 10, 15 years ahead. any strategic move is about the long-term position of the company, not trying to manage short-term tax implications that may or may not happen. matt: great having you on the program. stephan feldgoise, global cohead of m&a at goldman sachs. goldman sachs at top of the table in terms of average deal volume and total deal value and market share. they are winning this -- they
matt: this is "bloomberg markets." a big move for car rental company hertz, months out of bankruptcy, they have placed an order for 100,000 teslas -- 1000 teslas. a plan to electrify the rental car fleet -- 100,000 teslas, a plan to electrify the rental car fleet. how significant is this for a rental car company like hertz. >> no rental car company has done this before. it is significant for the industry and an enormous step four hertz. they were in bankruptcy and they exited at the end of june.
we are at four months into its new history, let's call it. it has new ownership. sophisticated financial player, united capital management, a private equity firm that specializes in travel. this is a good illustration of what new ownership and creative outside the box thinking that isn't bound to tran -- tradition can do in an industry that typically doesn't evolve very quickly. matt: it also sounds pretty good for tesla. you get so many people able to spend more time than just a 30 minute test drive with your car and you are selling 100,000 vehicles at almost list price, something tesla is not used to doing. erik: no, as you out, a different test i experience -- test drive experience. you have it for a day or a week
and all of a sudden you fall in love with ev's? that is part of the ideas, not just for tesla who would be the enormous beneficiary, but word of mouth of that can only benefit hertz and give them more pricing power, the idea being they can charge up for the tesla over the typical car. that would certainly help the economics of this initiative as well. matt: fascinating your great. erik schatzker, thank you for joining us hertz putting an order in for tesla. this is bloomberg. ♪
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warning of civil and criminal penalties for anyone disobeying the order. the military figure who heads the sovereign counsel in sudan says a new government will be formed and the statement came hours after the prime minister and other officials were arrested in an apparent coup. the emergency law has been declared across the country. sudan has worked to end its international isolation since mass demonstrations overthrew the longtime dictator omar al-bashir in 2019. the singapore ministry of health issued a correction order to a website called truth warriors over claims that covid vaccines are not effective, saying in a statement that international evidence shows categorically that vaccines cut infection rates as well as serious illness and mortality rates from the virus. truth warriors had also claimed that ivermectin was a potential treatment for such illness. the lira felt amidst an ongoing
diplomatic spat in turkey after a rate cut last week. the currency slid again after erdogan said that the ambassadors of 10 nations, including the united states, germany, and france, were no longer welcome. the countries are demanding the release of a permanent -- prominent businessman and philanthropist. global news 24 hours per day on air and on quicktake, powered by 2700 journalists and analysts in over 120 countries. i'm mark crumpton, this is bloomberg. amanda: high, welcome to bloomberg markets. matt: welcome both bloomberg and bnn audiences at each time this hour and here are the top
stories we are following from around the world. a family feud at rogers communication's. two men claimed to be chairman, pitting edward rogers against his mother, but really two of his sisters. we will have the dramatic details, head to. plus an fda panel is expected to give the pfizer vaccine for kids this week. we will discuss this with dr. anna derman, professor of international health of the johns hopkins bloomberg school of public health. and of the panera glint -- green pledge, announcing a commitment to become climate positive by 2050. we will discuss the move with the ceo. amanda: all right, let's get a quick check on the major averages. we are seeing a lot of upward momentum -- momentum. only financials in negative territory and we are of course seeing continued adding around
where yields in the curve will go. you can see it on the 10 year but on the internals you are seeing individual names moving strongly and the group that is the single biggest mover is consumer discretionary, which is of course large part because of tesla today, up more than 9%. more specifically tesla getting that massive order from hertz, playing into the bull story on tesla. other stocks on the move, you just mentioned pfizer with maternal lifting the whole health care group. paypal, rebounding after steep declines last week and matt, really, the enthusiasm around tesla is interesting as we are in this kind of earnings season where we will see people waiting to see what companies have to say and i would expect the whole space to be volatile this week. matt: i mean, dude.
a 100,000 car order? when the headline crossed, i thought it was nuts. and the fact that hertz is doing this with mark fields as interim ceo makes the story absolutely amazing. i was just talking to erik schatzker about this. hertz has a huge history with ford. they had the rent a race in the late 60's, shelby gt 350 and it was the first time you could ever rent like a totally awesome car from a carmaker. mark fields was the ceo of ford and now he goes over to run hertz, getting it out of trouble, essentially, making this revolutionary move, but with tesla. i think it's incredible from so many different levels. amanda: it really is and we could put a pin in the valuation conversation, but the ark of the story is magnificent, in the
sense that we could have said that tesla is great and had a novelty car a few years ago but big car companies will surely own the space, but maybe not. speaking of owning spaces, rogers communication's is in some turmoil here. two different men claiming to be chair of the company. two factions of the founding family say they have control of the board. here to untangle this, derek is with us. this is obviously not good for the company today, as evidenced by the stock market reaction. what is the next step in this saga? >> it looks like it is to the courts, where in british columbia they will be trying to get a judge to agree and he's certain to run into a fight against his sisters and mother, also on the board of the company, and the company itself,
whose position is that the board hasn't changed and you can't change the board without a proper shareholder meeting. so, that is i think the most likely next venue of battle. matt: the board hasn't changed for now. even if they are right about that for now, doesn't edward control a trust that has 97% of the voting shares? isn't the fact that he can change it at some point indisputable? >> i think that's pretty close to being right, yeah. rogers control trust holds 97% of the public company and he's the chairman of the trust and it just so happens that the person that runs the trust has a kind of rod of authority on those shares. the current consensus in the
market, yes, he can make these changes eventually as long as he holds on to that is-ish and. now, there's also debate and fighting within the entity, which is of course private, but i think you are seeing that really reflected in the stock market today, the immense uncertainty around how long this is going to take to really quote, derek, the lawyer speaking on behalf of the other side of this, talking about the fit this of a single individual being able to replace a slate of directors and that the concept of a single shareholder
replacing all the directors of one of the largest public shareholders in the country is unconscionable and regrettable. he's obviously speaking for the side that wishes it wasn't happening, so we will take that with a grain of salt. everybody likes this structure. until they don't. that's the point. a dual class structure, why was it allowed to go on it all? >> these things do permeate the capital markets, not only in canada but in lots of countries and you can understand why ted rogers set it up this way, so that he could make moves, take on debt without fear that someone would come along into a hostile takeover but now it's a much more mature company, the biggest wireless provider in canada, it owns sports teams, the toronto blue jays. you are probably going to see a debate in the public sphere about the appropriateness of this share structure, but the fact is that it exists and at the end of the day when it comes to voting, only the rogers family matters and it has been that way for decades. so. matt: yeah, i mean i think if that lawyer has an issue, he
must be against all private companies as well, you know? if you own and completely control the voting rights of a country -- company -- amanda: but it's not a private company. matt: no, but you must know that when you allow them to purchase as shareholders and get such a huge market share and wireless. it's not a secret, but it's an interesting fight and i find it also fascinating that it is at least partially being fought over twitter, making it for us even more interesting. derek, great to have you on talking about this story and we will all be following it, even the non-canadians, very closely. this dirty laundry is just so fascinating sometimes. coming up, maternal says that it's covid shot for young kids is showing strong results in
matt: this is "bloomberg markets." moderna said that there vaccine produced a strong mean -- strong immune response in children from ages six to 12 years old in a late stage clinical trial. in the meantime an fda panel is expected to ok the pfizer vaccine for kids this week and for more, we have dr. anna durbin of the johns hopkins bloomberg school of public health.
doc, i guess as with any vaccine that has only been around for a year or so, you have got to weigh the possible benefits against of the potential longer term side effects. are we concerned at all about longer term side effects here? dr. durbin: so far we have not seen long-term side effects and all the people we have been following who have received the vaccine. now, that's primarily adults but it does not appear at this point, and again we are only six months to eight months into giving these vaccines, but we have not seen, not seen long-term side effects, which is very encouraging. we will continue to follow people and of course young adolescents and children as they get the vaccine, but i would say that right now it's very, very encouraging. amanda: of course, long term is something of a misnomer in a pandemic that's 18 months old and for parents we know that the
hesitancy might be different for their children than it is for themselves. especially prepubescent children. what do we say about the science to reassure those who are worried about giving a vaccine to their kids and how worried are we about if they don't do it, about the pandemic continuing? dr. durbin: we have studied these vaccines very carefully and we only go to children after we have lots of data from the older age groups. we start with adults, go to younger adolescents and finally younger children and it is important to note that we are using a smaller dose in children and in the clinical trials we monitor the children very closely for situs -- side effects. we are looking to make sure that we don't have what we call too much reaction. fevers, headaches, sore arms, that sort of thing.
i can say that the data from the clinical trials looks really, really good. mostly because as we said we are using a smaller dose and the kids are tolerating it really well. matt: how big of a problem is covid for kids? when i was younger, many decades ago, and one of my siblings got chickenpox, my mom put us all in the same room so that we would all get it and the idea was that way you will never get it again, it's much worse when you're older, not that big of a deal when you are a kid. is that not an option here? >> -- dr. durbin: what we do know is that kids tolerate the virus very well but there are a significant number of kids who develop severe or long-term covid and end up hospitalized and in the icu and even on ventilators. so, the consequences of covid and kids, although fewer numbers
of kids affected severely, but it does happen. the other thing to consider, and one of the reasons to vaccinate kids is to reduce transmission and protect even the vaccinated older people. you know, kids can get covid, they can shed covid, they can transmit covid. it makes all of society better, the fewer people who are susceptible. amanda: here in canada they are targeting march for an end to all kinds of pandemic related restrictions. does that seem overly optimistic or does the modeling suggest that that's where we are headed? dr. durbin: when we look at the number of people who are vaccinated in the number who had covid, we are pretty much nearing herd immunity, so i think it's optimistic and realistic. the only caveat i would put their is that there is the rest of the world that still has a lot of covid circulating and if
there is a variant that can cause more severe infection in vaccinated individuals, the trend may change. but right now i am also optimistic. amanda: all right, great to have you with us, appreciate your time, dr. anna durbin, of the johns hopkins bloomberg school of public health, of course supported by michael r. bloomberg. coming up next, turning to panera as it becomes the first fast casual restaurant to set a positive climate target, we talk about that move with the ceo, coming up next. ♪
the u.n. announced that the world still headed for catastrophic levels of global warming at -- even after a slew of global warming climate changes -- climate change pledges have been made. panera bread today announcing that they are pledging to become climate positive. great to have you with us. let's start with this, the pause -- the promise to be climate positive, you are going a further step from net zero. what does it involve in your planning? >> thank you for having me on the show and i really believe that climate change is perhaps the most significant challenge confronting us at this point in time together and food production going on to be 25% of greenhouse gas emissions, i think it is a moral imperative that we all step up and do more. i believe that carbon neutrality is just not good enough.
we have to do more than that in therefore i intend to be clause -- climate positive by 2050 and i hope that our industry peers will follow that because i think it is the single biggest most important thing we could be doing in protecting the planet. matt: i just had my first child, a baby daughter, but she will be in college by that point. why does this take so long? >> 2050 is not good enough, you are absolutely right. the climate change crisis is upon us right now and we not only need to have commitments that are more out into the future, we all have to do a lot more as we stand here today. apart from the 2050 commitment, we are also making a commitment of what we plan to do by 2025. panera bread has been doing this
since 20 16, committed to reducing the carbon footprint by over 20% on that date, but we are not satisfied and we want to do a lot more and more, urgently. by 2025 there are three important commitments i want to share with you. one, 100% circular packaging. 100% renewable, recyclable, combustible. -- compostable. 50% of company-owned cafes must go green on energy by that time and then, finally, by 2025 we are committing to having at least 60% of our food and menu items to be climate positive or climate friendly. we call it cool foods. going more in the direction of plant-based. 100% circular, 60% cool foods and at least dirty percent green energy by 2025.
amanda: we have seen with climate change a extraordinary situation where the corporate world's leading policymakers. you are taking action in absence of a global framework. what would you suggest needs to happen to support his this is like yours who are taking this seriously? >> we can't rely on a singular institution. as leaders we have to come together to do our bit to meet those climate targets by 2050 and i think this is something that will require for all of us, all the leaders, what is it that i control and how can i really get after that in the near term and have more ambitious goals by 2050? that's the only way we are going to be able to address this?
matt: i want to know about how business is doing in light of not only the supply chain crisis but also the labor shortage, the difficulty in hiring. are you being forced to raise prices, for example? >> the labor shortage is the single guest challenge, near term. i think this is happening because of a demand shock and supply not coming back quickly enough. the labor market, that's what's happening with the supply chain issues you mentioned. we are investing a lot more in terms of wages, management, providing hours for training incentives and so forth, but more importantly thinking about how we can be an employer of choice for our associates because it's not only about wages. it's more than that, it's about how we treat associates, providing them with good opportunities for the future. in a relative sense we are doing
better than our peers on the metrics, but clearly we are also facing a significant challenge as we staff cafes and one goal over the next few months is to keep all cafes fully staffed and channels open and in terms of pricing the intent is always to absorb as much as we can by becoming more efficient and productive but i do think that the inflationary pressure is so high that we will have to take some pricing to fund these initiatives. matt: thank you so much for joining us. this is bloomberg. ♪
caroline: 2:00 in new york and we are live. i'm caroline hyde. we're talking trillions -- we discussed the risk on moves ahead of earnings results from tech heavyweights this week. taylor tracks inflation as we close in on the spending bill. sonali checks another market boom. we will dive deeper into facebook as documents highlight the social network's anguish over failing to attract younger users and failing to censor hate speech. continuing coverage of the global supply chain crisis, we look at the impact on retailers, consumers and the logistics. all of that and more coming up.