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tv   Bloomberg Markets  Bloomberg  May 31, 2022 1:30pm-2:01pm EDT

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welcome. i am mark crumpton with first word news. question troops are slowly advancing twice the center of the last remaining cities still under control by kyiv. president boudin -- president putin abandoned another idea. president biden is meeting about gun control legislation at her
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the aftermath of a shooting at an elementary school at uvalde, texas. the president said, i will meet with the congress on guns, i promise you. mr. biden said he believed there was a chance to strike a compromise over -- compromise. hurricane agatha has made history as the strongest hurricane ever reported to come ashore in may, during the eastern pacific hurricane season. it made landfall on a populated stretch of beach towns and fishing villages. there were windows of 105 miles per hour. the storm quickly lost steam and was downgraded to a tropical depression. agatha's heavy
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mexico's southern states. hong kong says they need to do more to control covid-19. after meeting with party officials in beijing today, the executive said hong kong needs to stem the virus so that regular travel between the city and mainland china can resume. officials say infections have fallen sharply. at the beginning of the year, more than one million residents were infected. this is bloomberg. -- global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. ♪ >> welcome to bloomberg markets. >> missing out on a lot on the
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markets. final trading day in the month of may. we came off the month of april down about 9%. the month started off strong and it has been topsy-turvy, ever sense. we are still clinging onto a monthly gain. only by a faction of a percent. -- fraction of a percent. we saw a lot of weakness this month on the index, something that we have not seen in the previous month. here is year two year yield, moving in the wrong direction, based on a lot of triggers out there. jon: some of the stocks on the move, we have been watching those headlines feeding into the oil trade. you have seen a willingness with
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chevron. it is interesting to note that some tech stocks are hanging in. amazon is up for a fourth day and a fourth day and around. we will continue to look at the earnings picture. a salesforce is a little bit weaker ahead of its quarterly results. romaine: right now, we are waiting to hear from president joe biden and the chair of the federal reserve. they are meeting at the white house. it will be interesting to see what kind of comments we will get. rate hikes are far from over. take a listen. >> i support tightening policies i another 50 basis points. in particular, i am not taking the 50 basis point hike off of
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the table until i see as closer to our 2% target. >> let's get more. nice to have you back with ice. obviously, as we await some of this photo opportunity coming out of washington with the president meeting with the head of the u.s. federal reserve, we have reminded that everybody is in king about inflations, whether it is on wall street or main street. when you look at the tone of the market, what is standing out to you right now? >> i think this market has consistently fooled itself into some complacency around inflation. it is very popular to say that we have seen inflation and peak that hawkish in us. it may not in fact be the case, but when you look at home prices
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and the inflation data that came out of europe, when you look at the energy crisis right now, there is a case to be made that the next report might be a little bit of an upward surprise. it is correct to wait-and-see if there is signs of deceleration. i just do not think that we are there yet. >> when you look at the action we have seen, has that primarily been an adjustment and reaction to expectations, or is there something around eight? >> the market was quite oversold and do for a balance. it means that the fed will accelerate, so we have to be
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clear in terms of rates. i just do not think that is the case quite yet. if you look at the inflation data, goods prices are softening some but service prices, those have actually accelerated. i understand why the market -- there is some optimism there, but i think it is pretty short. >> when i think of some of the themes that came out in may, different stories from different retailers on how they are navigating inflation. i know you spent a lot of time zeroing in on how much money the consumer has in their wallet and how long they can handle some of these inflationary pressures. what will you be watching for in the months ahead? >> we are watching a couple things. it has fallen below the pre-pandemic level.
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dipping into that savings pile, roughly $2.5 trillion. real incomes are 3.5%, almost a full percent lower than they were during the financial crisis. there were a couple areas. they are looking for that demand that can come from these higher prices pinching that wallet. we are seeing a big pickup in credit card spending. for the higher end consumer, do not look, but we have seen about $13 trillion worth of market captures. at what point does that hit the higher end consumer? we think the consumer is ok for a time, but as we start moving in, we think he will see a little bit of pain there. that is what we are watching. it underscores the difficulty of
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a soft landing. romaine: i am curious about the other side of that equation. we have seen a lot of anecdotal evidence that a lot of corporations have maintained some of their budgets and related spending that goes along with that. do you think it can hold up? if so, d think it is enough to mitigate a potential lowdown in consumer spending? >> when you look out at individuals, the balance sheets quite strong. it is one of the reasons why we do not see a recession in 2022. we think it will materialize over the next couple of years. if you think about those corporate borrowers, they had no fixed rates. they are still in place. i do not think there is a huge risk to business, unless or until businesses look out and
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see one of two things. either inventories are building because of double ordering during supply chain issues or there is a material slowdown in the consumer, making those businesses more cautious. i think all of that will happen. the question is, is it a gentle easing into a soft landing or is it momentum? history is not on the fed's i. >> giving us a little bit of perspective here as we wait for comments. he is meeting right now at the white house with head of the federal reserve, jerome powell, along with janet yellen, a former fed chair. headlines crossing the terminal right now saying that joe biden will not interfere in their work. he does plan to discuss inflation with jay powell and
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expects that the fed will use its policy tools to address rising prices. the focus is on the fed and the bank of canada. local and central banks are all over right now, trying to digest pressures and what to do next. mike, we might as well start off with the fed first to know the challenges that jay powell is going through, to figure out, based on the data that we are seeing, what they are following here, what do you think of the communications so far? >> this is by a what -- a white house concerned about inflation. maybe inflation goes down by that time elections come around. there is nothing that the white house can actually do to bring down inflation. joe biden is saying, i will not
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tell the fed what to do. they said, we do not get involved on the fiscal side. there is not much that will come out of the meeting, except that we know that the fed will raise interest rate. >> we got our lesson in how they navigate presidential -- it has been interesting, to steadily see this shift of focusing on the inflation issue, firmly on the fed, to your point about midterm elections. i wonder how that potentially influences the kind of questions that come towards the fed, if you are seeing more commentary from the white house, specifically talking about the inflationary issue being a fed issue.
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>> i do not see this as ratcheting up the pressure on the fed. they know that they need to bring inflation down. they will do whatever it takes to bring inflation down. but it might do, little bit is to take pressure off of joe biden, if the american people believe it is the fed's job. >> inflationary in a week or so, we will get a big decision this week. they have already been relatively aggressive in their communication. >> they are expected to do it again tomorrow, raised by 50 basis points and setting the stage for another 50 basis points by the end of july to get them to neutral, which is sort of what the fed has done as an
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interim target. they can decide where they go from there, but they have had relatively strong growth and relatively strong inflation that they are trying to deal with. the ecb has relatively low growth and high inflation, but they only have the inflation mandate, so they will raise rates, according to the markets by 50 basis points, over the next couple of meetings. they will still be behind the fed. >> we will have to leave it there. michael mckee is breaking down the effect. coming up, tomorrow it is june 1. pride month. we will take a look at equality and diversity, and how it plays into the economy. that is coming up, next. this is bloomberg. ♪
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romaine: president joe biden meeting with the fed chair, jay powell and janet yellen. president biden: it starts with a simple proposition. respect the fed. respect the fed's independence, which i have done and will continue to do. my job is not to nominate -- not only to nominate highly
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qualified individuals, but to give them the space that they need to do their job. i will not interfere with their critically important work or responsibilities. chair powell and other leaders of the fed have a laser focus. there was a larger complement among board members. i look forward to chairman powell's continued leadership with the fed. thank you for coming in. [indiscernible]
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romaine: the president of the u.s. preparing to meet with the fed chair, jerome powell and joe biden's secretary. there are some other economic measures. we will bring that to you, but we want to move from that to a milestone here at the end of may. a lot of focus on equality and how we can strive for a more equal society. a professor of economics over at the university. it benefits us all. thank you for being here. to some of the best research i have seen is amongst various professors, striving to make the case for equality. one makes the case for the economic opportunities lost from
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exclusion. >> if we are talking about lgbtq people, we are talking about a loss of income, higher poverty rates and the effects that people have, not coming out of the education. my argument is that the economy itself has held back when they do not have the ability to be dimmed -- there. that work. so, we have found that in settings of different countries
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around the world, that 1% or more of gdp per capita is lost. >> those are really great product numbers. in general, of companies and they abilities to address unfair treatment, would you say that we are seeing improvements? >> it certainly looks like it. there are those who are taking it seriously and they are changing in other parts of the world as well. they tell us why. they say we have to do this because we need to be able to recruit and keep the best people in the market. we make them as productive as they can be. the interest is real. actually putting that into play
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can be challenging. there has been bias against lgbtq people and sometimes policies are not well lined up. they know what they need to do, i think. they are on a path. the question is if they will continue to move forward to make sure that all of their policies are in open space. >> thank you as always. joining us -- a major premium water -- a major premium. that is next. this is bloomberg. ♪
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>> this is bloomberg markets. time for what it is worth. today, gold fields acquiring yamada gold for about $7 billion, and all share deal that will make it the number for gold producer. we spoke to the chairman earlier today. >> go further. if we look at it over the next course of the year or so, it is the third-largest producer. it is the second-largest come in terms of reserves in a life index. it is the fourth largest in terms of market capitalization, but that is where there is the potential for an upside. what is even more compelling and interesting is that this company has an unparalleled growth on the combination occurring, and it is the best growth profile of all of the senior companies.
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>> this is the kind of deal that could spark more growth in the sector. >> a lot of other people are interested to see what comes next. you look good and i look good too. i am romaine bostick. this is bloomberg. ♪
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mark: the european union leaders have agreed to back a partial plan on russian oil. it would make part of the package of sanctions, aimed at punishing russia for invading ukraine. the sanctions would ban the sale of russian oil and petroleum products delivered by ships, following a two-day meeting in brussels, they spoke at a news conference alongside the european commissioner.


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