tv Bloomberg Markets Bloomberg November 11, 2021 1:00pm-2:00pm EST
welcome to bloomberg commodities edge. let's get right to the data dig. the main debate is how tight is the oil market? what can the u.s., opec, and everyone else do about it? the eia came out with it short-term outlook, and it found the market will be oversupplied, and prices will fall next year. drillers will increase supply, and this all leads to $80 and below by december, 62 by the end of next year. we will see what that means for pump prices and for president biden in a moment. i want to talk about other commodities in crops. bullish for soybeans and wheat. usda lowered its export estimates to china, that is the
huge gap there in the white line. also tight supplies in wheat pretty much everywhere. russia could actually restrict supply. that all leads me to my final chart. some serious food inflation is coming down. the world's food import bill will be jumping more than expected this year. vegetables, fruit, grains, and meat. all of that increases the threat of hunger ticket early in the poorest nation. let's get into the ring with the top story, what the white house will do with these high prices. options range from releasing from the reserve, to continuing to pressure opec-plus. i spoke to the pioneer natural ceo and asked what president biden could do to convince you to pump more oil. >> the president is realizing
all the efforts when he came into office of stopping offshore leasing, drilling on federal leases offshore, new mexico, in the powder river, it is starting to backfire some, but at the same time, i don't think they have realize what has changed in the u.s. investors want cash back. we are giving 80% of our free cash flow back to the investor. investors do not want us to grow anymore. alix: joining me now is thomas from bloomberg nef. do we release from the strategic reserve? >> it could happen. politically it sends the right message, but it is like trying to change the direction of the wind by blowing at it. it is very short-term. oil is a global market. this is just u.s. reserves.
to have a meaningful impact on prices, it would have to coordinate with other countries. something similar was tried in 2011. it pushed down prices for a few months, and then they bounced back again. it can provide short-term relief to next year when maybe the market might be a little looser, but it is not a long-term fix. alix: the other one gaining in popularity is banning exports, which i feel like has problems written all over it, because oil is a global market. that will increase any product imports we have. it will also tamp down any reinvestment we have in the oil sector. >> the last point is the most critical. if high oil prices are a problem for the u.s. and world generally, the solution is the u.s. shale industry. right now, prices are high. as that person mentioned, investors are not putting their money in.
if exports were banned, they would be even more skeptical, and that would cause long-term damage to the industry. alix: another one is practical but not very sexy, changing the regulations around biofuels. that would help prices directly and sort of bypass oil. what do you think? >> my skepticism there is that it takes time for that to scale. biofuel mandates are in place, they work. the question of what the total capacity of the u.s. to produce biofuels is, but if that is the long-term solution to go, we should be looking at options like electric vehicles. this all goes back to fuels, economy standards that have been going on since the 1970's. the federal government has a successful track record in policies to control oil demand in the long-term, but these all
fall into the category of long-term fixes. the government can affect the long-term dependence on oil, but short-term, less options. alix: thomas, thank you. time now for commodity in chief, where we talk to one executive in the commodity world. today, it is indonesia's coordinating minister of investment. the country has big net zero emission goals. by 2030, renewable energy, mostly solar, will make up 42% of its power. by 2050, stopping all sales of fossil fuel cars. by 2060, renewables will make up around 100% of power usage. but there are some big hurdles. indonesia produces a ton of coal, and is currently china's biggest supplier of over 21 million tons. on the plus side, it is helping
the economy by boosting exports. the downside is a lot of indonesia's coal is low-grade, cheaper, and less efficient for the climate. other institutions want to speed up the end of southeast asia's coal addiction by closing plans and going green faster. indonesia wants to help but it's coal plants are relatively young. their weighted averages around 12 years, making it harder to retire then. they also have some price agreements to protect operators revenue, and pricing carbon is just too low. at $2.11 per metric ton, it is a fraction of the price of developed nations. indonesia says it has to balance jobs, revenue, and growth with its emissions target and green goals. i sat down with the coordinating minister of maritime affairs and investment and asked him if they could retire coal-fired plants even faster.
>> weekend retire the old coal-fired and may be the new coal-fired, moving to geothermal, solar panels, and others, but then your commitment to financing and technology have to be there. without that, you cannot do it. alix: what kind of money will it take? >> it depends. my commitment with senator john kerry, when we had dinner in washington, we can make a pilot project for 5.5 gigawatts, maybe $30 billion for the next eight years, up to 2030. alix: there are other things you can do at home, and you mentioned that you been doing them. one of them is a carbon tax. it was less than half of what many expected it to be. why was it less, can you get a
higher carbon tax price? >> as i mentioned, we are very flexible on that. we can do whatever to make a benefit for both sides. don't forget our commitment, my commitment to our next generation of indonesians, my grandchildren. that is a powerful message. some countries are trying to remind us, lecture us. you don't need to lecture us. but again, we have limitations. but we need support from the countries. alix: i do wonder, the current energy crisis we are experiencing, where there is not enough alternative energy, not enough lng on the waters to get around, and we find that we still need coal, does that make your life harder or easier to
speed up this transition? >> my lesson i learned from the current energy crisis is that we have to be careful in planning, executing our energy transition. like what happened in the u.k. recently, also some other countries, we need to have renewable energy that can provide a base load of electricity. alix: it doesn't push back any coal retirement plans? >> once again, the countries, we follow you. alix: developed countries are shutting down their coal plants faster but you are still a huge supplier of coal, and we need it, as we have seen in energy crisis. does that slow your ability to shut them?
>> of course, we need financing. the coal price is good for us but not the environment. we are ready for any option, but we have to be clear on our targets and commitment. we don't want to see a yo-yo, yes today no tomorrow. in indonesia, we deliver what we promise. alix: over at cop26, indonesia said it did not quite agree to an thing for station by 2030, promising to keep the forest cover study. that means any trees cut down will be replaced. in southeastern venezuela, golden nugget's are now the currency of choice. instead of paying in boulevards, residents break up of gold, often wrapped in paper bills.
you have local merchants who are happy to accept the precious metal. a one night stay in a hotel costs have a grand. a haircut is 1/8 of a gram. smalltime operators of illegal mines typically pay laborers in gold nuggets, so there is plenty to go around. and of course, this makes digital transactions nearly impossible. that does it for bloomberg's commodities edge. this is bloomberg. ♪
coming up, we will speak with the ceo of vmg partners, as the consumer focused company goes public via spac. and we will speak to a key executive at reef. and if you are feeling hungry and lonely, we will bring you the latest on singles' day with ann berry with wheelhouse talking about the consumer and shopping holiday. quick check on what is going on in the markets. s&p 500 rising .1%, so offer a couple days in a row, now a little bit of a rebound. 46.52. the nasdaq up .2%. much bigger gains for the tech stocks. we will focus in on a lot of those today.
bloomberg dollar index up .25%. nymex crude had been gaining this morning, now lower. brent crude lower as well. wti trading at $81.14. tesla stock is much lower on the week after elon musk sold $5 billion worth of shares. for a deeper look, we are joined by dana hull. we saw the tweet, obviously, the poll after elon's brothers sold his shares, but he has not gotten quite to the 10% stake that he was talking about selling off. dana: and this can go on for days. yesterday, we got two forms to show that elon exercised his stock options were about to expire in august.
this is something that he really spoke about publicly about in the fall. ok, elon is now selling his options like he said he would in the fall, but what about the 10%? last night, while people were trying to have dinner, we got eight more forms to show that he is beginning to sell, but he still has quite a long way to go. matt: it has hit tesla shares. the market cap was literally decimated. what are we looking at today? dana: shares have recovered. elon is selling some of his shares, as he forecasted he would do. what we don't know is if we are going to get more form fours today or if it will dribble out. you are seeing the share
recovery because basically there is no question now. yes, elon is selling. part of the share move on monday could have been when the transaction took place. matt: i'm curious to get youtak. you have been covering the sector for many years. we have a new entrant which we have all seen coming miles and miles, but now they are publicly traded, worth $180 billion, and they are putting their products out into consumers hands. what do you think? dana: the valuation is amazing for a company that has just begun delivering its first few vehicles. you are seeing an inflection point where investors are betting that electric vehicles are the wave of the future. everyone likes to pit the ev makers against each other, but really, rivian is a threat to legacy automakers. they are coming out with a vehicle that customers are it has backing from the likes of
amazon. you are seeing this high valuation because investors increasingly see you looked up occasion as the way of the future. matt: and don't forget about the gear tunnel, which i think is the coolest part. dana hull, thank you. i want to get to something that caught my eye. as everyone knows, i am in the market or a house, or an apartment. but apparently i need to act quickly. a u.s. survey out today from the national association of realtors shows that homes sold at a record pace of just one week after hitting the market. sellers also received full asking price. so this environment has caused the 10-year in homes to fall from 10 years to eight years, the largest year-over-year decline. it also means consumers are rushing to make these decisions, maybe jumping to quickly and
matt: this is bloomberg markets. i'm matt miller. shares of consumer and retail focused spac vmg consumer acquisition began trading on the nasdaq today. the company is backed by vmg partners, the first institutional investor in brands like kind bars, spin drift. here with us is the vmg ceo aarti kapoor.
great to have you on the program. it is an interesting time to go public. are you concerned that maybe we are at the top of the market here? aarti: not at all. the spac market has seen its ups and downs but we feel strong conviction around the long-term opportunity for retail consumer focused spacs. public markets have never been more relevant to retail companies. you can get an ipo or direct the sting to get you to market, but if you are at a critical inflection point, like the companies we are going after, you are still left to fend for yourself, managing quarterly expectations, managing the street. if you have any experience partner by your side like vmg, you have a game changing outlook. with 15 years of consumer retail experience, we can help companies with all kinds of brand management, operation, finance, and there is really no
comparison to the spac alternative. while we have seen some choppiness in the market, the last couple of months have shown that consumer retail spaces can do well in the market. if you are a growing company, you can benefit from having expertise at the table. matt: let's talk about the consumer. the consumer seems to be fairly flush with cash, but on the other hand, facing some serious inflation. how do you view this economy for retail consumers? aarti: it is an interesting question. there's a lot of data out there, interesting surveys, and we are still figuring out where the consumer is heading. you still have habits from the covid period, where folks went through channel shifts, moved everything into the home. you see some consumers stick with those new habits, but we are also seeing robust data for the return of restaurants, fitness, a number of in person
services. a bunch of ipos have happened recently that really shows that consumers still want to get out and want in person experiences. we think there will be an omni channel future, and consumers will want to spend in and out of the home. matt: we just saw a list of your brands. a lot of our viewers will be familiar with them, but is there a common thread that all of these brands have? is there a vmg dna peace to all of these brands? aarti: absolutely. this goes for the spac and also vmg on the private side. they have proof of concept, they have shown they have a strong offering, but they still have a lot to grow, whether it is channels, geography, products, or more. they are looking for partners who can drive topline growth and
develop the infrastructure to support it. we have invested in brands across food, beverage, beauty, personal care, pet, wellness. all those companies are at that critical inflection point. as it relates to the spac, we want to stay close to home. we are well-positioned to add value in all of those verticals. you also see a broad range of business models, whether brick-and-mortar, digital subscription, on driving tremendous value. matt: do you have your eyes on any targets? aarti: we don't have a specific target in mind, but between our boots on the ground, covering the industry for 14 years, we have a tremendous advisory board with lots of great ideas. we have really invested in relationships throughout the ecosystem. now that we have our capital, we
will be hitting the ground running soon. matt: thanks for joining us, aarti kapoor, ceo of vmg consumer acquisition, coming from a long career in investment banking, launching her spac on the nasdaq today. we are talking about a day where it is pretty good to be on the nasdaq. the s&p 500 is little changed, the dow is down. the nasdaq is up .6%. small caps are doing even better. this is bloomberg. ♪
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are still available. cash shortages, gang violence, and political instability have paralyzed large sections of the nation. the problems have escalated since the july some of the murder of the president. xi jinping had delivered the first doctrine on communist party history for the first time in 40 years, giving him the mandate to potentially rule for life. only two others have authored so-called historical resolutions, and both use them to dominate party politics until they died. the u.s. has sanctioned two cambodian defense officials for corruption related to a naval base linked to china. it is the latest move by washington amid continuing concerns about beijing's growing influence on the country. the naval base along the gulf of thailand is a source of tension after reports emerged that beijing signed a secret
agreement along its armed forces exclusively use parts of the base. manhattan apartment rents are surging the most on record, fueled by workers committed to finding nicer digs in the city in anticipation of a return to the office. the median rent rose 18% in october from a year earlier, that is the biggest annual increase in data going back a decade. global news 24 hours a day, on-air, and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. ♪ amanda: i'm amanda lang. welcome to bloomberg markets.
matt: i'm matt miller. we welcome our bloomberg and bnn bloomberg audiences. here are the top stories we are following for you from around the world. alibaba's shopping extravaganza. we will speak to ann berry about singles' day. ghost kitchens and deliveries are booming. we will speak to the reef chief creative officer about one of the largest restaurant launches in history in partnership with dj khalid. and we break down the numbers of beyond meat following rough numbers that hit the stockard. amanda: they are not alone in seeing declines after results, but overall a positive attitude for the markets. a mixed picture on the internals for the markets. s&p 500, financial, material
doing well. text along for the ride. the nasdaq is the better performer. tech name doing very well. not so much for disney, netflix, the other way. seeing some strong reaction to individual earnings reports today. new york crude at the bottom, $81. we are watching west texas as well. increasing pressure, it would seem, on the white house to look at the strategic reserve. for what it's worth, perhaps in a sign of the times, certainly a surge, a nugget bound by bloomberg news. an independent recruiter says he has never seen so many eight-figure hiring packages. firms are also offering flexible
lifestyle components to lure talent, which is fascinating to me. people have talked about the need for more flexibility for a while. the corporate world try to respond with beanbag chairs, but it took a pandemic for them to understand that people want to work differently. maybe it will finally come to pass. matt: i wish they would work somewhere else that other than the tri-state area. i am looking for a house. no matter where i'm looking, bergen county, westchester, long island -- mark crumpton just did a story that rents are up 18%. i feel like there is a game of musical chairs, and i can tell the music is about to stop and there is no place to sit right now. i'm concerned about that. and nobody has made me an eight-figure offer. amanda: if we are going to bring this back down to your personal level, you should get a raise where rents are going up 18%.
to the powers that be, matt miller needs a raise. matt: time for stock of the hour. beyond meat is heading for its worst day in a year after its fourth-quarter outlook came in light. kriti gupta has more. before we get into this, have you had a beyond meat burger? >> i have not. i am vegetarian, so the taste of meat is not something that i crave. matt: i don't think it tastes very much like meat. >> apparently they are everywhere. matt: but they are not, otherwise, they would not be only expecting $80 million in sales. >> it comes down to what you're hearing across industries. growth is tapering off. the spending boom is coming down. you mentioned, 85 million
dollars to $110 million. wall street was expecting $114 min. it's not just about revenues but margins. margins are getting squeezed by raw materials, freight, and they are putting more money into headcount and labor, and more marketing. they want to make the argument that plan days to meet is healthy for the environment, something that they will keep talking about. despite those significant strides in product placement, places like mcdonald's. i was told before i came on air, there is a mcplant patty, so maybe i will have to try it. amanda: i was thinking, i wonder what vegetarians think about something that is not meat but tastes like meat, which limits the potential buyers.
packaging companies, some develop from the pandemic, others did not. will they be able to hang onto the momentum? kriti: for beyond meat, the majority of the world is not vegetarian. package food companies have been lacking restaurants. people are not needing to bring that restaurant field back into their homes, which was a major theme in 2020. that is why you saw some of the revenue for beyond meat and its competitors skyrocket. right now, not doing so well compared to those restaurants. matt: if you want to try beyond meat, one way to do that is with a little bit of hamburger helper. we are seeing headlines. general mills is weighing a sale of its brands progress out and helper. they are working with goldman sachs in order to explore a divestiture, looking for around $3 billion for that potential
chief investment officer at wheelhouse, who is dedicated to growing consumer categories. we were just talking with aarti kapoor of vng, and she says the consumer is in a good place right now but inflation is starting to pop up. is that a concern for you, for consumers? ann: it is not a concern now because this holiday has a particular flavor to it that mitigates any concerns about patient. saving rates are high, the national retail federation is showing significant growth in purchases because of the every openings we are seeing. we are seeing growth in clothing, out of home wear, certain items used outside as people go to outdoor activities once more. we will see real demand in this
post-covid environment in these holidays numbers. amanda: where does the concern about supply chain, shipping, schedules fit in? we have been born there will be great delays but it does not seem to affect the willingness. will there be a slow down in the delivery of those purchases? ann: we are seeing some mitigation of that in terms of the planning from the products, businesses, and retailers are doing ahead of fulfilling the thanksgiving and christmas holidays in the united states. we have seen businesses we work with trying to manage their merchandising, forced to select certain products that will be in stock, so retailers are managing their inventory around stock. we are seeing consumers more than before being pushed to certain items, as the supply chain forces retailers to
promote certain brands rather than others. but i think it will be manageable. where it manifests itself is in pricing as demand outstrips supply. matt: singles' day is a pretty amazing phenomenon, really is a shopping holiday now. as it got anything to do with being single? ann: it was originally the anti- valentine's day event in china, but it is so much more now come in the way that black friday still doesn't have the significance that it had. it is really almost a week, 10 days worth of retail activity in china now. what is exciting about it, if you look at the products that are being bought this singles week, these are not things traditionally associated with a hallmark holiday. we are seeing a push into things like nft's, particularly in the luxury space.
it is about a real period of time where consumers are experiencing -- experimenting with new and different ways of shopping. amanda: for the first time this year, i was served up marketing different retail sources about singles' day. i find it a little offensive because in many countries, it is a day to remember our veterans. is this something that will be pushed more globally, and what is the back story to that? why is this moving beyond china where it has meaning, and beyond it does not? ann: really let's take a moment to thank all of who served. certainly, i would not like to see anything hijacked from those who serve courageously. if you look back at different holidays -- for example, black friday was uniquely american.
i am from london, grew up in the u.k., and now black friday pops up in the united kingdom, which doesn't even celebrate thanksgiving. it is quite the opposite. just an example of how marketing can create certain events. but i do think they knew to be specific to certain cultures if you are trying to move from one country to another. in this case, the u.s.-u.k. has certain shared cultural norms, so there was an easiness in translating that retail event. i don't think it is as easy for something as singles' day to be in other markets. matt: are we setting ourselves up for disappointment for christmas? i got a text message from vodafone, about the fifth time they are delaying my new iphone. i ordered in september and i don't think it will be here until december. will this be a problem around christmas? ann: yes, i think apple
proactively came out and said we will see problems with the supply chain. they did not supply an end date for when they will see this remediated, so i think you can expect to see this kind of thing with electronics, certain apparel, other items in home wear. that said, it will be interesting to see how much the consumer pivots to gifting experiences. will bc theater -- we see theater tickets, maybe going to see a show. it will be interesting to see if there are category shifts this holiday season. amanda: thank you for being with us, ann berry. coming up, it is one of the largest restaurant launches in restaurant history. dj khaled expand his horizons
across three continents in partnership with ghost kitchen company reef technologies. we have the man behind the launch with us. before we go, this is a booming trend, just wings. the delivery concept of chili's was raking it in. the celebrity halo is important for these companies. you saw it, but you are probably excited that mcdonald's is partnering with mariah carey for a mariah menu. will that get you through the door? matt: i am a massive fan of mariah carey, absolutely love her, i have a live in japan bootleg that i hope i never lose. but i am more of a wendy's guy, as a native of columbus, ohio, the home of the most delicious
amanda: this is bloomberg markets. i'm amanda lang. alongside matt miller. most of us know him as a musician, somebody with an over-the-top lifestyle, but today, dj khaled became the cofounder of one of the biggest restaurant launches in history. a delivery only model launching in five countries and jumping on a growing business called ghost kitchens. with us to discuss is alan philips, chief creative officer
at reef technologies, the largest u.s. operator of ghost kitchens. for everyone that has heard of dj khaled, there will be someone who has never heard of a ghost kitchen. what is the concept you are taking global? alan: the concept is that we have hundreds of kitchens strategically placed in urban markets in the u.s. and canada, in europe and the middle east, and these kitchens are in close proximity to the customer. we are able to run around six to eight concepts out of one kitchen and deliver them through all of your different platforms, uber eats, grubhub, etc. matt: the idea is this is not a restaurant i can go into on 53rd street. you just have a kitchen set up with no front, just pumping out meals the entire time. alan: yes, available for both
pickup and delivery. we go as close as possible to the consumer. we work with different brands. i heard you mentioned before, wendy's. we have a couple hundred locations that we are working on with an. we help them reach their customer in a more efficient way. the traditional restaurant model requires significant capital. we can stand up the same kitchens for about 10% of a traditional restaurant. we have a brand called man vs. fries, an independent operator out of oakland. he had one location. he worked with us, and now he has 100 locations and a multibillion-dollar run rate, with little or no capital on his side. amanda: when it comes to a product like wendy's or a long-established fast food chain, i bet they would have set
in stone ways to manage quality control. how you manage with something like any of the others that are slightly less different, new, could change as time goes on? alan: it is no different than operating restaurants for hotels or anything else in the hospitality business. we all run kitchens, we put the right standards in place, we focus on health and safety. we make sure we are putting on a product that is great. it is actually easier to work with someone like a wendy's than an independent operator because they have a system in place, they've been working with franchisors. it's just a matter of execution. at reef, we have a dedication to quality. that is the most important thing. matt: i know dj khaled from my cybex baby seat, and now he is into restaurants. what brought this partnership
about, what is it about? alan: reef and khaled are both miami born and raised with a global reach. dj khaled's legendary creativity colliding with the reef platform. in the same way that youtube enables users to share videos and photos, reef can help to share food experiences in a way that has not been possible before. if you take this idea out over time and think about when you are watching your favorite food show on netflix, and then you see them making a great pizza, and you want to order that pizza, that can be delivered to you in 30 minutes. this partnership with khaled is a prelude to that future, the future of everything coming within your community, and you spending more things that you want to do, less on the things that you need to do.
our locations diminish pollution, congestion, increase the amount of jobs in a neighborhood. matt: thank you for joining us, alan philips of reef, talking about their business model and partnership with dj khaled, as well as their delivery of wendy's. for amanda lang, i'm matt miller. this is bloomberg. ♪
that russia may be weighing a potential invasion of ukraine. tensions are flaring between moscow and ukraine over migrants and energy supplies -- moscow and the block over migrants and energy supplies. israel has started a drill in the format of a board game to test the nation's readiness in the case a covid variant would enter the country. it tests resistance of systems that enforces quarantines and watch border crossings. moderna is defending the safety of its covid-19 shot from a barrage of questions about associated heart risks in young people. the chief medical officer company's vaccine appears linked to increased chances of an inflammatory heart condition known as