Bloomberg Television brings you the latest news and analysis leading up to the final minutes and seconds before and after the closing bell on Wall Street. Today’s guests are Deutsche Bank’s Binky Chadha, Parametric’s Nisha Patel, William Blair’s Dylan Carden, Exclusive interview with Carlyle’s Jeff Currie, BNY Mellon’s Sinead Colton Grant, DOW’s Jim Fitterling, Monex Group’s Jesper Koll, University of Chicago’s Raghuram Rajan.
Stocks and bonds on a roll on day one of the Fed’s policy meeting. Live from Studio two at Bloomberg headquarters in New York, I’m Scarlet Fu. And i’m Vonnie Quinn. We’re kicking you off to the closing bell here in the united States.
So let’s get a check on where markets stand because we did have a bit of a shakeout in positioning earlier on in the session. The stocks index, all of the members of that index were lower. Right now, that’s not quite the case, although the index itself is still down
About three quarters of a percent. We definitely saw a bit of an improvement in video. For example, had a 5% swing today. It was down 4% at one point, up more than 1% at this point. The two year yield is giving up a couple of basis points, right, for 6894 as we
Await the FOMC decision. The yen, interestingly enough, just below 151 traders more focused on Carrie now and the yield differential between the Japan economy and other economies, including the United States. And look at Brent crude well above $87 a barrel.
Carlos Yeah, and of course, the theme here is central banks around the world are in transition mode. You mentioned Japan. The Bank of Japan started the week by ending its experiment with negative interest rates. Whether it follows up with more rate hikes remains to be seen. Next up is the Fed.
It is moving in the other direction as it deliberates the benefits and costs of being patient on a rate cut. Now, the inflation outlook will help drive the timing of that eventual cut. And right now, oil prices, as you mentioned, vonnie, extending gains to a five month high.
Alix Steel. We’ll sit down with commodities expert jeff Currie now at carlisle to get his forecast. So Vonnie, you put it all together. It is certainly a waiting game right now in the path of least resistance is stocks holding near record highs, gaining and treasuries advancing as well.
Exactly. And you can see that in graphic form. If you look at the financial conditions index, scarlet conditions have been loosening once again. We did see this period back in 2022 and a little bit earlier on in 2023 where there were tight conditions. And of course, the Fed chair spoke about that.
Here you’ve got conditionings loosening even more than they have been. What will the Fed chair say about that? How much of the Fed’s work is being done by looser financial conditions, which, as you said, includes everything from stock prices to volatility to longer term interest rates?
And how hawkish will Fed Chair Powell be able to stay in light of this charts? Gala’s all good questions. And of course, how does this affect asset classes? Not just equities, but from equities to fixed income to commodities? Let’s start with the stocks angle and
For that, we welcome Binky Chadha. He is chief global strategist and head of asset Allocation over at Deutsche Bank Securities. Binky, always good to see you. Thank you. Thanks for coming in today. You have taken note of this stock rally, noting that it’s fairly bullish and it has room to go.
I guess the question is what pause is it? Because right now, not a whole lot, is it? That’s exactly correct. I would argue, you know, that the equity market’s been going up very, very steadily and very, very fast. It’s actually a monthly rate since early November of about the lower 4%
Annualized that and you’re talking about 65%. So there’s little doubt that it has to flatten out, the channel has to break or we get a pullback. I think it’s still a bit early to get a pullback. There’s a whole set of arguments for thinking about it. Number one, of course, you know, the
Thing to look at is positioning our measure of equity positioning. You know, so it’s z-score a measure that sort of aggregates a whole set of measures. So minus one plus one is the typical historical range where we are right now, we’re in the upper half of the range, so about 0.6.65.
So the market’s clearly overweight, but the extent of the overweight is actually tied to the macro data. And so, you know, positioning is not extreme. I mean, it’s been at one, it’s been higher than what occasionally is. And so there’s nothing intrinsic about
Positioning that suggests that we’re going to suddenly get an unwind. Of course, it can happen, but it’s unlikely is the way I would put it. I think you do think stocks are more attuned to fundamentals, meaning the strong economy and earnings prospects or Fed policy right now.
Right now, I would say it’s clearly the macro economy and improving prospects. I would call it, you know, the cyclical overhang of the last two years that we are going to fall off a cliff and go into a recession is is basically slowly lifting. You can see that in the macro forecast
Is still getting raised, but next quarter is still, you know, lower than this quarter. It’s not at zero. The next quarter was always at zero or a negative number. And that’s, I think, the change. But, you know, it should be at least the
Same as it is, if not higher. I would say since current quarter estimates, whether and other things are actually down a little bit. So it’s really the macro it hasn’t shown up in earnings upgrades yet. And what I would say is that critical link is really.
You know, corporate’s this cyclical overhang and these negative expectations have clearly had an impact on corporate behavior. And there, you know, if you look, for example, at CEO confidence, especially CEO confidence in the economy, which was very, very low, is coming back pretty
Hard and fast. And so I would expect in the next earnings season. So which is, you know, it’s still a month away and that’s why I say it’s still a bit early. You know, we would expect that improved confidence to basically show up in better guidance and therefore earnings upgrades in last quarter.
I mean, if you listen to companies on earnings calls, I mean, there were plenty that saw an improvement in demand. And, you know, it was like, but why aren’t you raising your guidance? It’s because, well, there’s this macro concern of what’s going to happen to the
Economy. So I would argue, you know, still has a ways to go to lift. I would say the one place where you are basically seeing the cyclical overhang lift is payouts are rising and especially buybacks. Yeah. So we spoke a little bit about positioning, but, you know, broader,
Bigger picture take on what’s moving equities up. There’s always changes in positioning. They always get the most attention because they create sharp, sharp moves. But there’s also inflows into equities and there’s buybacks. Yeah, that’s I was going to ask you is
Looking at your Z score charts, it’s very obvious that, you know, positioning in tech is extremely elevated. Yes, not so much at all. In fact, extremely under represented our healthcare and many of the defensive. Does that need to change in order to sustain this rally? Well, you know, I wouldn’t necessarily agree
Completely with the defensive, but yes, positioning does need to rotate out of mega-cap growth and tech. And again, before that, for especially the cyclical parts, not necessarily the defensives that you mentioned, you know, you need this cyclical overhang to lift. You need people to start believing that
The cycle is going to go on. And I mean, we’ve had six quarters of GDP growth that averaging 3% and everybody’s still talking about a slowdown. Well, fewer people are, but there’s still plenty. Yeah. All right. Thank you. Try to really appreciate your joining us, giving us your take here on
Equities. Think he is chief global strategist and head of asset allocation over at Deutsche Bank Securities. We’re just getting started here on the close because coming up, we’re going to shift our focus to global commodities and in particular, whether oil has more room to run. Our guest is Jeff Currie, formerly with
Goldman Sachs, now chief strategy officer at Energy Pathways at Carlyle. Plus, our talk of the hour, Super Bowl microcomputer shares falling for a second day after the company was added to the S&P 500. We’ll look at why. And shares of Nordstrom jumping on a
Report the founders may take the department store operator private. All that and more coming up. This is the close on Bloomberg. Wednesday, the Fed decides they are scared stiff of getting this wrong. The markets are just primed for the big green light. Trust Bloomberg to bring in investors coverage and exclusive analysis,
Including Powell’s press conference. We want to see more good data. We’re still seeing sticky inflation. How dependable is the data? How long does it need to be good? Six, seven, eight month. Tune in to Bloomberg Surveillance. The Fed decides starting at 1:30 p.m. Eastern time. Tax changes everything.
We’re going from a 4 to 5% growth rate to two and a half percent growth rate is slowing down, and in that the restriction on economy accomplishes purpose. Meanwhile, the consumer is very resilient and that’s providing an anchor to windward that the Fed has latitude
That a lot of places don’t have, that they can be hold too restrictive and let the economy really catch up. They’ve got to be careful. They don’t overshoot. So this is the tension we’re in right now. That was, of course, Brian Moynihan, the
Bank of America CEO, speaking earlier today on Bloomberg as investors await tomorrow’s big Fed decision. For more insight on central banks and bond markets, let’s bring in Nisha Patel. She is fixed income portfolio manager of separately managed accounts at Parametric. Nisha, great to see you.
So obviously, the Fed is going to be a big catalyst for what’s going to happen across asset classes right now. But and we’ve seen that there’s been a bit of a repricing in the bond market, but right now everything looks pretty good. You had a 20 year auction that generate
A stronger demand than many would have expected. Would you read a lot into that? The auction aspect, I would, right. So I would argue, given that we’re back up to a kind of the 430 level where we were a few weeks ago, fixed income and I think biennials here represent a lot of
Value. You’re looking at yields that are close to the S&P 500 earning yields. So this starts getting to a point where now the market has caught up to what the Fed has been indicating anyways to 2 to 3 cuts. Right.
We’re not going to be kind of in a doomsday scenario that was being priced in at the end of last year in January. So in my view, this is not entirely shocking to me that the auction has gone as well as it has.
It is we’re seeing this also in the corporate bond market space, right. With just record amount of issuance being absorbed just month over month, which is just absolutely incredible. So this is an indication to me of just incredible amount of value in terms of where we are in bonds.
And look, a lot of cash on the sidelines that needs to find a home. Even if we are higher for a little bit longer. How hawkish will Fed Chair Powell be able to be tomorrow? Look, I think you pointed out kind of financial conditions and how loose they
Are, right? Not not as tight as they’d like to be. So I think it’s going to be tough for him to be very hawkish. I’m expecting that you’re going to have relatively unchanged kind of language in the overall statement from from last time. Now, with the uncertainties around the cuts, right.
Whether we still see the three or whether we move that to two. I still would anticipate that Chairman Powell is going to say, look, we need to see more data. And one of the interesting facts here is that weaker retail sales, right? I mean, to me, you know, I know in
Certain folks have been pointing to consumer spending being very strong, and there’s no doubt about it, that’s carried us to where we are today. If we start to see more cracks there. Right. I do think that that starts permeating into labor markets and that figure to me
Stands out. So I don’t think with a lot of the mixed data that we’ve been talking about that there’s going to be much change in his tone. I don’t anticipate he’ll be more dovish than he was, but he’s not going to be more hawkish either.
You mentioned the spate of corporate debt sales and the take up of that. The investment grade issuance is like there’s no tomorrow and high yield spreads have tightened to a two year low of about 300 basis points versus treasuries. Do you worry that there’s complacency?
I do. Look, if we’re looking at, you know, overall allocation and what we’re advising to our clients is that we like our quality. Look, even investment rates are tight as well, certainly on the tighter range. But I don’t think you have much carrying
Much room that if we were to tilt in the opposite direction as spreads widen and out in the high yield space, you don’t have that cushion in the investment grade space. I think we’re more properly priced right. This is where credit oversight matters.
I believe in the earlier kind of segment the speaker had mentioned strong balance sheets, corporate earnings. If they remain strong, I mean, I think the investment grade space and higher quality bias is what we’re recommending to our clients at Parametric. And you know, one thing I’ll point out,
We talk about kind of fixed income yields here. There’s been kind of one amount of carry, right? We talk about kind of how much more rates would have to move or spreads would have to widen for investors to pretty much break even.
We’re seeing yields here that are providing so much more cushion than we ever have before in the previous, you know, you know, about four or five years. So I think that presents an incredible opportunity for our clients. Speaking of cushion, Nita, are you
Expecting any kind of massive positioning change or even, you know, mediocre positioning change posts, BOJ exiting wisely, etc.? Look, I think the Fed is going to be really much focused on the US macro data here. And certainly, you know, looking at
Position, I mean, look, we’re having kind of central banks that are going in different directions here, which makes us tricky. But it’s been no doubt that inflation here has been running more rampant, right, than other parts of the world. And the Fed is going to be much more
Focused on kind of the US economic data here. So I think we’re going to continue to get that guidance. And, you know, certainly this makes us tricky going to tomorrow. Last thing I’ll just say is, you know, three cuts.
There’s not a lot of room for that in the second half of the year if we start in June. It’s possible, but I think that’s kind of the guidance that the Fed will likely still give us, that more economic data will give them maybe more room in the May meeting to possibly adjust.
We might just not have enough yet. We just won’t get it in the statement of economic projections. Yes. And it would come through through communications on a On a regular basis. On a regular basis. All right. Well, so we’ll look for volatility from Fed communication lines to come and
Really appreciate your joining. Thank you. Nisha Patel of Parametric and Bonny. I think that was a great question about the BOJ, because even though it sounded like the BOJ did a lot, it was actually taking kind of baby steps. But there are big question marks about
How this affects long term demand for U.S. assets like Treasuries. Yeah, absolutely. And you see the yen weakening all the while. We’re at 151 practically now, and there’s still something like 300 basis points between, you know, the Japanese ten year, in fact, well, 250, 250 basis
Points, beating the Japanese tenure in the U.S. ten years. So, you know, you do wonder if it’s all happened already, if investors were already positioned for this or if there’s more to come. Yeah, well, for now, the carry trade lives on, right? I mean, the yen is still cheap to borrow
Relative to other currencies. Coming up, Nordstrom reportedly is in talks to make the department store chain a private company. Roughly six years after a similar attempt proved unsuccessful. And what’s different this time? We’ll have more after the break. This is the close.
It’s time now for our top calls. A look at some of the big movers on the back of analysts recommendations. And first up is Zoom initiated with a hold and a $70 price target at Jefferies, which sees a slowdown in growth. Jeffrey says the video conferencing
Platform remains in transition and new product offerings may not quell concerns against stiff competition from the likes of Microsoft teams. Shares right now about two thirds of 1% at $66. Next up, you’ve got Redburn cutting its recommendation on software companies MongoDB and Snowflake. The analyst Alex Hietala, says Snowflake
Lacks a clear generative advantage, making it vulnerable to future trends. He also says market expectations beyond the current year remain, quote, overly optimistic. The shares currently marginally higher by 3/10 of 1%. And finally, let’s take a look at 3 a.m. an upgrade to overweight from equal weight over at Barclays after the
Industrial conglomerate named William Brown as its new CEO. The analyst Julian Mitchell sees a more attractive risk reward profile as well as an increased range of potential catalysts ahead. Mitchell also tells investors the CEO transition opens the door for additional productivity measures and higher margins.
The shares right now up by a third of 1%. And those are some of our top calls. Now, moving on to retail, we are keeping a close eye on shares of Nordstrom after Reuters said the founding family is in talks to go private. Joining us now to share his insights is
Dylan Carden. He’s an analyst at William Blair with a market perform rating on GW and Dylan. Thanks for speaking with us. If the Nordstrom family is reportedly behind this bid to go private, I’d like you to refresh our memories because back in 2018 there was an attempt to take
Nordstrom private as well, but that kind of fizzled out. What happened back then? Sure. Yes. And thanks for having me. So 2018, the family was rumored to be trying to organize a I guess you would call it a family buyout. You know, at the time, they owned around
31% of the company, predominantly held by that sort of third generation support generation that runs the company now. The biggest hurdle at that point was just simply the debt costs that they were being quoted to the tune of. At the time, the whisper number was 12, 14%.
So if you layer that kind of debt on a business like this, it doesn’t leave a lot of room for maneuverability, which at the time was kind of what they were trying to do. So I think it was just simply a hurdle
That they couldn’t get over. What kind of valuation would it go private, Adele, and what would they be able to raise presently? Yeah, the historical range has been upwards of the mid-teens. I mean, the stock more recently has traded down in the high single digits.
I think if you’re taking this out now, you obviously have to offer a premium. 52 week highs, $23 and change. So you’re looking at $25 probably to get this over the line as far as approval from the street, which would put it in
The 11 to 12 times p e range. Do other shareholders matter in a potential take private deal here? I mean, are they likely to raise objections or have a say, a significant say? Sure. I mean, between so there’s now a wrinkle in that. There’s an insider holding from Puerto
De la Liverpool, which is a mexican department store chain that only just under 10%. So all insiders at this point effectively control closer to 40% of the business. I mean, I’ve long thought that there was an activist play here, just given some of the mismanagement and value destruction of the business over the
Last decade plus, you would think that any long term shareholder in this name is relatively exhausted. It sort of the fits and starts. So I would think that there would be broader approval if you can get out and sort of the mid 20 range of things, that wouldn’t be an issue.
What about the debt? Sorry, continue. Now, particularly you’re talking about getting out, you know, getting over 51% of the vote with the family already there, 48% plus the Puerto de Liverpool. Yeah, I’m looking at the dysfunction on the Bloomberg right now and it looks like at least that is fairly manageable there.
There’s some do 20, 25, then 2028. And you know nothing major major until 2046. Are debt holders going to be okay? And I’m bored of this. Last I checked, the bonds weren’t moving, which were kind of interesting in its own right.
It’s two and a half times levered. It’s not you know, it’s been as high as three and a half in its history. I think if you’re looking at, you know, you talk about $25 take out price, you know, and what the buyers would have
To take out less the a family interest you you’re looking at 2.83 billion and you’d have to kind of attribute to this business which 12% would get you to over 300 million and just service costs. Right. Which is effectively what they’re going to do on operating income this year.
So it’s less about kind of leverage profile and more about, you know, the maneuverability that you would have if you saddle this business with more debt. Dylan, do you think what’s happening over at Macy’s with Ark House and Brigade Capital making a bid for Macy’s and Macy’s finally agreeing to open its.
Looks to them, according to Reuters, is that having any kind of impact on what’s going on with Nordstrom? I mean, how how does it influence the developments taking place at Nordstrom? I mean, certainly, first of all, it’s a totally different set up. Macy’s is a real estate.
Macy’s is a historical roll up story of every single regional department store in the country that effectively at the time owned their real estate. So in Chicago, it’s Marshall Field’s, which owns a fantastic building in the loop. Right. So it’s a different 68% of Macy’s real estate is owned outright.
Nordstrom, you’re looking at maybe 7% that’s owned outright. There’s a couple more sort of leasehold improvements that get you a maybe 20%, but they’re just not the same kind of security, if you will, in the real estate backstop. So this is a different beast altogether
Where you’re left just simply with the operating assets more or less. Right. So I think this is a different conversation. But certainly every time Macy’s gets acquired, this sort of this rumor comes out for Macy’s, you hear it brought up for Nordstrom as well. So I think, yeah, the hindsight bias
Here is that this doesn’t get over the line. Right. Just between 2018 or today, Liverpool, any time Macy’s kind of goes through this this this process, this this doesn’t really feel different. If you read the headlines, it looks like they’re just trying to pitch it to private equity.
So I’m not getting terribly excited about this at this stage. All right. Good stuff, Dylan Card, and really appreciate your putting that into perspective for us. Dylan Cardin over at William Blair with an equivalent of a hold rating on Nordstrom. Not putting too much stock money into
This idea that the founders want to take it private. It’s interesting, isn’t it, Scarlett? I mean, it seems like this is something that happens every few years, and one of these times they’ll make it right. I mean, Michael Dell managed to make it happen. It was a whole different kind of company.
But, you know, some of the major retailers, this is what happens is sort of a you know, they go public and then they get taken private again and then they go public again. Yeah, but the way to clean it up. Yeah. A good point, though, is that the real
Estate is not clearly the gem here the way that it is for Macy’s. Nordstrom has to really rely on its comparable sales, which of course is subject to how much consumers want to spend on luxury items. All right. We’ve got much more coming up on the clothes. Jeff Currie, the chief strategy officer
At Energy Pathways at Carlyle, is coming up next. This is Bloomberg. And I want to welcome our Bloomberg Radio, TV and audiences. I am Alix Steel live in our Houston bureau with a very special guest. Jeff curry for his first and exclusive interview here.
I have to read your title, Jeff, because it’s been so long. I’m not used to a new title. You are now chief strategy officer of Energy Pathways over at Carlyle. Congrats on the move. Really good to see you. It’s great to see you. It’s been a long time and it’s only appropriate.
It’s here in Houston at Ceraweek. I know I haven’t seen you in, like, years in person, so we’re going to get to why Carlyle? And what are you doing there in a second? But because I have you, I have to ask about macro.
The move we’ve seen in oil. I know copper is down today, but so we’ve seen a tremendous move in the last two months. What do you make of the commodity rally, supply or demand or both or what? It’s a classic late cycle commodity price rally.
You know, as I said back in the beginning of the year, I made the point being short oil and commodities in a late cycle expansion is like being short natural gas in a blizzard. Don’t do it. A couple of things that you always want to point out.
Let’s start with the US. The US is running a 6% fiscal deficit, the largest deficit ever in history in a peacetime non recessionary environment. Think about this. If they do it in a recession, it’s because of providing, let’s say, unemployment insurance. They’re doing it full employment, red hot economy, and they’re turbocharging
An environment that is already being stressed. That’s why Bitcoin and commodities are the two best performing asset classes out there. So let’s layer it in. What if we get Fed cuts in the next few months? Are we turbocharged? The upside here is significant and let’s
Put on that top of that what China is doing. They have their cash for Clunkers program. Plus they’re stimulating everything from EVs to batteries, solar panels. Why? Because they’re trying to boost manufacturing, offset the weakness in property.
So you have a really strong China and you can see that in the pie is they’re crushing their margins, but people are going up. And then finally, let’s turn to Europe. Remember that great destocking we were talking about last year? Well, they’re restocking now.
And so all of that points to a much more positive commodity price environment. Again, your late cycle expansion is when you want to be low in commodities. You have a favorite. I always like oil and copper you got. Yeah, copper is the one that I really like.
And the reason why not only is it part of the energy transition story, but what is I A’s chips in copper. You need copper to get the air going. So how are you going to power all those chips? You need? The electricity and you need copper. Yeah, exactly. Electricity.
That’s a big talk here in Houston as well. So. Okay, So you like copper, You always like the or you always like oil. Just one more quick thing on oil. What’s the upside, do you think, if we’re in sort of a range is going to be a volatile range? Is the upside 100?
Is it triple digits? Is it early 91? Is it Well, let me ask you this. All the strength you’ve seen recently and the consensus range at 70 to 90. Do you really want to be short $2.50 from here? Probably not.
So I think we’re going to see it bust well outside of that 70, 90 range. I don’t want to speculate how high we go. It’s not my job anymore these days. But I think, you know, the risk is clearly upside. I think the main point is I want to be
Long oil and the rest of the commodity complex in this environment. Okay. So let’s get to the new job. So you basically went from 200. I know you live in London, but 200 west to one. Vanderbilt is a big move for you. I mean Goldman, one St James market and. Okay, fair enough.
They’re still the one there. Why did you make the move? What is it about Carlyle All Star It’s an iconic franchise, you know, they were the pioneers in private equity. And if you want to have a voice in a
Seat at the table in energy transition, you need to be at a platform like that. Second, and do not underestimate the importance of this is the Washington connection. Energy transition is a policy initiative and being in the center of policy, given that policy in the market and access
Those are two together is going to be what solve climate change. Carlisle is very well positioned for that. And then third, it’s a world class energy franchise. They kept the brown and the green together, put them together long ago when it wasn’t fashionable, stayed the course.
They’re committed to energy. Also, they have experience in critical minerals and without the copper zero saying you don’t have energy transition. So bottom line, it was the best place I could possibly go to be involved in the energy transition and have a voice. So what does the transition mean for
Carlisle? Like its is it brown to green? Is it You keep some brown, you keep some green, do you Green. Brown. Like what color spectrum I get. Yeah. I think to answer that question, let’s go back to the observation. The transition is uncoordinated and messy. I don’t think I’m using a term, you
Know, it’s that bottom line, it’s history. It’s running into a lot of issues. It’s just inherently going to be messy. So active management is the only answer. And when I say active management, it’s not actively managing green by itself because that’s not managing the
Transition. You got to manage both the brown and the green together and the pathway. Between the brown and the green, and it requires knowledge of both. I like to point out a heart surgeon doesn’t does not know about the heart. They know about the body and how the
Heart and the body relate. And I think the same applies here. The second is transition risk. There are going to be many pathways between the brown and the green, and those are all the uncertainties that the markets facing uncertainty in price volatility, uncertainty in green
Formation, technology, policy risk and owning both of them hedge that risk. And then finally, I want to make the point that divestiture does not solve the problem. If you take emissions, take them out of the portfolio, they don’t go away. They go to places like China, Indonesia,
India, which are burning record amounts of coal right now. That’s like I say, by owning the emissions, you control the emissions. So I think by putting the two together is really critical in terms of creating a new pathway to solve climate change in the energy transition.
Do you think it’s going to be traditional energy and oil companies that we’re so familiar with sort of putting their money into new things and new technology or about making their operation greener? Or is going to be about like that cool new small, clean tech company that we’re
Going to invest in. It has to be both. Okay. Again, you know, I like to point out, you know, it’s in our DNA. We know how to solve these problems. We did it with the war on acid rain. And it’s like, you know, one of the big
Russian producers of platinum, a platinum said in the 1970s, Did we know putting platinum and palladium into the exhaust pipe would solve the aerosol problem? You know, back in 1965 or 70? No, you had to try it. And I think that by creating, trying all
Those different pathways, eventually we will discover the pathway. So I don’t want to say there’s one group that does it. Also, take the catalytic converter. It was BASF and Englehart that solved a lot of these problems back in, you know, when the war on acid rain.
So I think there’s going to be a lot to be discovered and learn as we try those different pathways. And that’s part of the experimental process. So we’ll all of this wind up being inflationary in the medium term, or are we going to see sort of higher forever
Commodity prices or is it going to be from really volatile commodity prices, what’s going to be the result of that volatility? I mean, we saw. Yes, yes, yes, exactly. It does not have the flexibility to rebalance itself.
So we go from ten what, you know, 12 to 18 months ago to about 25 or buck 30, where the lower back to 175. But that’s the type of volatility we’re going to be in for. And that volatility needs to be hedged.
And again, when we think about owning the brown and the green, you think about when oil prices go higher, interest rates go up, higher interest rates hurts the green. Now, think about when oil prices go down, interest rates go down, The green goes up as the oil goes down.
So owning both the green and the brown together gives you that hedge against these types of uncertainties. Do you think the political risk is a big one? And I’m really talking about the elections in the US and in that has the has the ship left the channel?
Like are people and asset managers and energy companies already investing regardless of policy or is policy a key moment to make this transition? I think it’s a lot of it going to be a lot of give and take from the green side to the brown side, right? It’s both.
You have to actually have both. And, you know, I don’t want to take a strong view here what happens in the immediate term. But I think right now we’ve seen that the Brown push ahead more recently, as you know, I like to point out, you know, three years ago, everybody was green,
Green, green here. It’s very weak this week. You know, they’re all question it. The reality the truth is somewhere in between. And I think that right now we’re on one extreme. It’s going to move back to the center again. But again, I’m going to go back to
Emphasizing owning both hedges that kind of risk. Do you think that what’s the return profile that we should be expecting for energy transition projects? I know that’s a hugely broad thing, but there was a lot of criticism that, oh, you’re going to have wind projects are
Going to return 5 to 7%. We need high teens like we see for oil returns. What do you think this is going to evolve to be in a volatile commodity environment? Well, well, ultimately, when we think about these returns,
The way I like to think about it, the brown gives you the cash flow today and the green is going to give you the cash flow tomorrow. Think about the green is being a long duration asset like unprofitable Teck or
Or you know put in crypto anything that is is a long duration type instrument while the oil by owning both of them, you’re going to be in those different environments. So I can’t say that there’s going to be an explicit return today. The one thing I do know is owning cash
Flow today, balance against owning that longer duration asset gives you that flexibility in that balance to get a stable long range return because what we find the green does great in a recession. When interest rates are low, the oil does great. An environment like right now when you’re laid side expansion on both
Across the entire cycle, you’re going to be okay. You’re having fun, Love it. Are you liking it? Absolutely. Absolutely. It’s so good to see you. So much for coming by. Pleasure. Appreciate it. Jeff Curry, I will read this again, chief strategy officer of Energy Pathways over at Carlyle. Back to you guys.
Thank you so much. Bloomberg’s Alix Steel in houston with jeff curry, formerly of goldman sachs. Vonnie he looked pretty relaxed. He looks very relaxed. I guess houston will do that. You do that, too. And you know, when when they talk about
The energy transition, it struck me while they were talking that maybe the better term for it is energy evolution because transition makes it sound like we might see it in the next five years or ten years. It may not be done in a generation. It might take several generations to
Take a long time. And also, transition does seem like there’s going to be a flipping of the page at some point and then we’ll have transitioned. But I’m not sure if that will ever really be the case. Yeah, absolutely.
And from now on, let’s just talk about energy in terms of green or brown to another, it sounds like it’s all down level, the green and the brown. All right. We’ve got much more ahead on the close. This is Bloomberg.
Time now for our Stock of the Hour. And today we’re looking at the super microcomputer. The stock down on the news of a $2 billion share sale. It was down yesterday to the potential deal was sent a price before trading began. But the I.T. company is delaying the sale until after
The market closes. Bloomberg’s Abigail Doolittle is with us with more. Well, what goes up must come down. This is a classic case of that. And given the fact that this stock over the last year into one day last week, I think it was last Monday, up more than
1200 percent. Now, over the last four days, down 24%, the worst stretch since August of 2023. So the selling pressure initially, as we talked about yesterday, had to do with the S&P 500 inclusion sell the news. And then this morning it was down on this news that they were going to do
This share sale, 2 million shares. But what was supposed to happen? It was supposed to happen before the opening. Now we’ve gotten the news that it actually didn’t go off, which means there wasn’t enough interest, or at least that’s what I surmise.
They’re going to try to do the offering again after the close. It was supposed to raise $2 billion, but now all bets are off. I mean, how many people want to buy something that’s really on sale? Maybe there’s the sense that it’s going to go down further.
And technically, I can make the case that this stock will go to $600 easily. That happens to be the 75, 75 day moving average, which is about as many trading days as you’ve had this year, $600 a fall from current levels of 600.
It’s generous because it started off around 300 earlier this year. You could really make the case that all of this year’s rally is going to go out the window. And of course, the reason for the rally, they do make those server some of the AI chips in video chips in particular, get
Stuffed into those servers. So it gets wrapped into the AI package and lots of volatility. I want a timeframe on the decline. Abigail, thank you so much. I’m not going to do anything with it. I just want to know that Bloomberg’s
Abigail Doolittle coming up, we’re going to count you down to the closing bell with Shana Caulton grand CEO over a billion. Why mellon wealth Management. This is the close on Bloomberg. This is the countdown to the close. I’m Scarlet Fu alongside Vonnie Quinn
And vonnie. We have a bit of a rally on our hands. Yes, we do. Scarlett is so fascinating because we started out the day it looked like we weren’t really going to have big moves, right? I mean, starts two days of fed meetings.
But if you look, we have the stocks index, which is down, but it was down much more earlier on. In fact, at the beginning of the session, all of the stocks in the stocks were lower. Chip stocks for the most part, were leading the declines today.
But as I say, we are improving things just a little bit. And video, for example, is up more than 1%. So you see the Sox index, they’re down less than 1% now. We have given up a couple of basis points on the two year yield.
So we’ll see what happens to that tomorrow after we get the detailed summary of economic projections and, of course, talk from Fed Chair Jay Powell. And we are still below 151 on the end. We’ll see what happens if that rises beyond 151. Yeah, well, that yield differential is
Certainly top of mind for investors. Even if the BOJ did end, it’s a negative interest rate experiment. So for some more market analysis, let’s bring in now Janet Coles and Grant. She is CIO over at CNY while Mallet being NY Mellon Wealth Management. There you go.
I got it out. Janine, so good to see you. And you got it. Great to see you. Happy birthday to you. When it comes to the Fed, it’s kind of unusual. We’re just saying that it feels like there’s a little bit of certainty heading into this Fed meeting because we
Know there’s not going to be an interest rate cut or hike. It’s all a matter of updating the dot plot. If we get a hawkish dot plot, meaning the Fed adjusts to two rate cuts from the current three, is that going to generate a good reaction in the market
Or bad reaction in the market? It’s a complex question because we’re seeing a reaction that isn’t typical when you’re talking about future rate cuts. But here’s how we think about it. If the Fed is not going to cut as much, which by the way, is our view, we think
It’s less and later than what the market has priced, then it means the economy is doing better. Yes, perhaps we’re not seeing quite as much progress on inflation. But you look at the consumer performing well, you look at how we’re seeing the innovation, the announcement from NVIDIA
Around new chips. There’s just a lot of enthusiasm behind this market. So, yes, the Fed might be cutting last, but it’s good news rather than bad news. So less than later meaning to cuts this year, correct? Yes. So we have persistently been less and later than the market.
So when the market got to six in the euphoria after the December Powell comments, we were at four. And given everything we’ve seen with slightly hotter data, we now think it’s more likely that you have two rate cuts and they don’t start until the fall. Okay, So put that together in terms of
Where you want to be in equities right now. If there is less than later and stocks will see that as good news, do you want to still be in the most crowded part of the market, which is big tech and big cap stocks? You want to be in a number of places,
But we do like technology. So the three sectors we like our technology, health care and industrials. Now, yes, technology has been a very popular trade, but there’s good reason for that because of all of the positive cash flow, the track record of innovation, there’s a huge tailwind
Behind it. And we do think you’re going to see a broader benefit rather than just six or seven big names dominating the space. Health care had a terrible 2023. So there’s a lot of room for that too, to come back. And then within industrials, there are
Benefits across the board where we’re seeing, for example, some some areas within commercial aerospace related to extending the life of planes that are seeing a lot more business these days rather than perhaps the purchase of new aircraft would be purely us based. At this point, though, you’re a little cautious.
International and emerging markets. Yes. Now that that does not mean zero exposure, but it means that you need to pick specific names in in international developed or in emerging markets. However, you’re correct that we’re overweight the US, we’re underweight international and emerging markets, and that’s really driven by a couple of
Things lower expectations for economic growth in those regions, and particularly with emerging markets. The dominance of China in that index, headwinds coming from the property sector, which we think are going to persist at least through 2024, if not longer, we’ll stay with international.
I want to get your take on what the BOJ did yesterday. It sounds like they did a lot, but they had telegraphed too much of the moves and the way that the yen is reacting, as vonnie mentioned earlier, weaker, not stronger. Given that the boj exited negative
Interest rates policy, how do you start thinking about the positioning that will change and the ripple effect across asset classes here in the U.S.? And first of all, it’s a momentous move from the BOJ. Yes, they telegraphed it, but no central bank ever wants to surprise the market.
I’m not at all surprised by the currency market reaction. The fact that the yen is actually weaker because currencies respond to the rate of change. And while the Bank of Japan has effectively increased rates a little, very, very little.
You at the same time, in the U.S., the Fed is going to cut rates less. So the the differential means you’ve got higher rates in the U.S., higher than expected rates. And so the dollar is going to continue to strengthen. But look, I think around the globe, the
Bank of Japan was probably the only central bank that was delighted when inflation started going up because they’ve been trying to do it for 30 years. And now they’ve reached a point where, particularly given the wage negotiation results last week, they think they’re
Going to see that inflation persist. So the problem this morning was that they only announced their action today. They did not give any indication of future rate increases or further rate increases just to bring it back to the U.S.. Your target for the S&P 500 for the end
Of the year is 5000 to 5400. Right. So that’s a big possibility that we could see a decline from here or a nice increase. Well, we’ve had a tremendous start to the year. So we do think it’s possible you’re going to see a period of consolidation before then moving higher.
But look, that range assumes a recession, probability of 15%. So we’ve taken that down from where we were last year, which was 40%. So all told, we’re very positive on the US market. If anything, you could see the market end the year higher than the upper end
Of that range. You also see the dollar staying strong. Is that going to be a headwind for earnings for big cap stocks? Modestly, I think it’s and it’s really modest because it affects about 10% of earnings. What we really want to see is markets in
Europe, markets in Asia performing more strongly, which helps the earnings of those companies. When we talk about the dollar being stronger, this isn’t in the magnitude of a 20%, 30% increase in the dollar. It’s more like 5 to 7% higher. All right. I really appreciate your joining us today.
Ned Kolton Grant is CIO over at CNY Mellon Wealth Management. Vonnie, we have a day in which we’re waiting, of course, for the closing bell and everyone’s waiting for the fed to come out with its decision. No rate change, right? We know that. But the dot plot is where the focus will remain.
And I feel like you’re right guarded normally, there’s not a lot of movement a day before the Fed comes out with, you know, particularly a whole new set of economic projections. Right. But there is plenty of movement, plenty of churn in the market today.
And as you said and as Janet said, well, almost 9% of the S&P 500 this year. So there is plenty of room in either direction for stocks. Very well said. And I think with the S&P 500 bumping up against so many strategies target for the year, the question is whether they
Have to start playing catch up or not or whether they’ve caught up enough given what we’ve seen so far. All right. Let’s get you closer to the closing bell with full market coverage right here on Bloomberg as we take you to the bell and beyond. This is Bloomberg. Beyond the bell, Bloomberg’s
Comprehensive cross-platform coverage of the U.S. market Close starts right now. We’re about 2 minutes away from the end of the trading day. Scarlet Fu and Vonnie Quinn here with you, counting you down to the closing bell. And of course, we bring in now our radio colleagues, Carol Massar and tim
Stanwick, so that we can welcome our audiences across to Bloomberg Television, Bloomberg Radio and our YouTube audiences are streaming. So Carol and Tim, normally Vonnie and I were saying on a Fed day, on day one of the Fed meeting, you don’t have a whole lot of movement, but this feels like an
Exception. What is this? It’s like what are the what are investors now? I mean, here we are having buying into the last few minutes of trading. So, folks, we’re have these major equity averages pretty much at their best levels. And I’m just kind of watching tick by
Tick because it just seems like each new trade is just pushing these major equity averages even higher and higher in these last few moments of trading. Look, I think it’s fair to say that the reversal in some of the big tech names has a lot to do with it. Specifically in video.
Abigail Doolittle was on our air earlier and she pointed that out. It was down earlier. It was higher later in the session. And it’s one of the biggest companies out there. So when it moves, the indices move. Yeah, exactly, Tim.
And when it comes to yields, you know, we did see that big spike last week and we did give up a couple of basis points on the two year. But for the most part, those yields are holding on to gains.
And I guess it’s all much of a muchness. Markets have pretty much priced in what they see is going to happen tomorrow. So if we’re going to end today with gains, how does that sort of stuff for tomorrow? It’ll be interesting because we have the most of the day to get through before
The FOMC decision comes out at 2 p.m. But right now, we’re definitely ending on a high note here with the indexes continuing to to move up with the S&P 500 now, right about session highs gaining a half of 1%, almost 6/10 of 1%. Even the Russell 2000 is participating. Yeah.
I’m just curious if what we get in the commentary in that press conference tomorrow from Jay Powell, does he in any way try to dial back what he said when he was up on Capitol Hill, Scarlett, does he in any way start to say, well,
Maybe it’s less, maybe we don’t get rate cuts, which is what we kind of continue to hear from some of our own market commentary and guests on? Would generate a huge reaction. Maybe we don’t get any rate cuts. All right. There you have the closing bell as we’re
Looking at the S&P 500 closing up half of 1% at 5178. The Dow industrials doing even better, up 8/10 of 1% at 39,110. And the Nasdaq kind of bringing up the rear, up by 63 points, 4/10 of 1% at 16,166. As I mentioned, the Russell 2000 small
Cap index also gaining ground, about half of 1%. All right. And so we’re just finishing off our highs of the session on those major equity averages. Just taking a little bit of a deeper look, vonnie into the s&p 500.
Most names though, in the index today ending with a gain 384 names to be exact. 115 to the downside for unchanged. Isn’t it fascinating? Carolyn i feel like if we look into the eye map of the s&p 500, you’ll see how much green there is, which is really
Interesting given where we started out the day, those few little bits of red we need there, the semiconductors and even the semiconductors, they were only down, you know, a certain amount. This is almost like the markets of yore where we had, you know, less than one percentage point moves.
I feel like we’ve got to used to volatility and this kind of a market seems, you know, almost muted. All right. A lot of green, as you said, Vonnie. So a fair amount of names for me to choose from. I’m going to go to Nordstrom and this
One up 14% at its highs today, finishing the day with a gain of just above 9% back 9.4% to be exact, as after a report that the founders are looking to go private. This was according to Reuters. They were citing people familiar Nordstrom working with Morgan Stanley
And Centerview partners to reach out to private equity firms and gauge their interest for a potential deal. No certainty that a deal will ultimately happen. And you did see this news giving a boost to some of the peers throughout the session. Macy’s and Kohl’s did follow Nordstrom higher today.
Macy’s, remember, is also facing a takeover approach from a group led by Arcus. Again, Nordstrom finishing the day up above 9%. All right. We know Nvidia holding its big developers conference this is data the CEO Jensen Huang giving a keynote yesterday.
And what’s interesting is two of my gainers have to do with what he had to say in that keynote synopsis. A top gainer number three gainer in the S&P 500, number one gainer in the NASDAQ 100. This after the Nvidia CEO said that synopsis during that two hour
Presentation yesterday saying that the companies that will use Nvidia’s new Blackwell based processors synopsis and also access above them to put more AI enhancements into their products. So you saw both of those names synopses up more than 4% and ANSYS up about 2%. One more real quickly, number one gainer
In the S&P 500, we don’t talk about it a lot. International paper is actually industrials. I know. Exactly right. Up about 11% here, very heavy volume. They appointed KKR as Andrew Silver. Now to succeed Mark Sutton as CEO. He’s been there since 2014. They’ve been looking for a CEO since last September.
Analysts weighing in saying this guy, this new CEO is private equity background, could provide opportunities to pursue some strategic alternatives. So maybe there’ll be some changing, maybe some unlocking of value at that company, too. All right. Well, on the other side, I got the decliners, starting with the worst
Performer on a points basis in the S&P 500. Kind of a chip theme here as well. AMD Advanced Micro Devices fallen today by 4.84%. Andy led chip stocks lower after NVIDIA, a huge competitor to AMD, we should note, did unveil those new more powerful chips the Blackwell after markets closed on Monday.
So this was the first day of trading after the world saw those chips. Andy fell on the session as much as 7% before paring some of those losses. And then another day lower for Supermicro computer. This is kind of an interesting story. So before the market opened this
Morning, the company said it was offering to sell 2 million shares of common stock in a public offering that could raise as much as $2 billion. Shares fell in pre-market by about 11%. Later in the day, though, Bloomberg News
Came out after the company pushed back the expected pricing of the sale to 2 million shares after the market closes here in New York. That’s according to people familiar with the matter cited by Bloomberg. So that pricing, which was set to happen earlier in the day, between 900 to $1000
Each, is now considered a so-called marketed deal. So depending on investor demand, shares may potentially price outside of that proposed range. This according to people cited in the story. And then an honorable mention to MicroStrategy wrapping up its worst two day run since November of 2022.
It did slump as much as 18% earlier in the session, finished lower by 5.7% today. It fell yesterday by 16%. That was more than ten times the drop in a Bitcoin. Get this, the company now owns $14 billion worth of Bitcoin. That’s more than 1% of all bitcoin that will ever be issued.
Yeah, it’s a proxy for bitcoin. Yeah. You know, the company was never cash in bitcoin and I forget what they actually do. As an actual company itself. They just buy Bitcoin. They just buy Bitcoin and MicroStrategy. Yeah, exactly. All right. Under the microscope. Oh, right. I get it. Now,
That’s their strategy. And Bonnie, just a quick mention here. The S&P 500 managed close at a record high. We have 5178.51 as a new high. And it just eclipsed what we saw last Tuesday. Here’s what we have in the yield space.
Demand for the 20 year was stronger than many would have expected, especially for a fairly unloved tenor. So that helped turn yields around. And you have yields all coming down across the board, across the curve as we head into the FOMC meeting tomorrow. All right, guys, as we await that Fed
Decision, our attention certainly to the Bloomberg and among our most read stories on the Bloomberg has to do with Wall Street and specifically bonuses. The average Wall Street bonus dropped slightly last year as banks kept compensation reined in amid an ongoing deal slump in the number of employees
Working in the securities industry ticked up, so the average annual cash bonus fell 2% to $176,500 in 2023. It’s the lowest since 2019. Yes, but it is the lowest since 2019. But the drop that we saw was far less dramatic than it was back in 2022 when the average bonus slumped 25%.
We should know that industrywide the bonus pool was $33.8 billion, unchanged from the previous year and far below the $42.7 billion total in 2021. We should note that the analysis was done by the New York State Comptroller, Thomas DiNapoli. It’s certainly an important metric for tax revenue. Yeah.
And the other interesting thing, because you can take a lot of metrics, right, is that the workforce in the financial industry climbed last year to 198,500, which was up 3.6% from 2022. Yeah, that’s even with firms like
Citibank cutting into a lot of jobs, A lot of that is because the growth in the job increases were in across the private space rate, private equity, private credit, all those all asset investment firms are doing a lot of hiring. All right. Got another story.
Goldman Sachs, Jp morgan have been leading the charge to get employees into the office more often. But it’s their smaller peers, their smaller banking industry peers who are more likely to demand full time onsite work. They’re like, get back to work.
What really amazed me out of this, Carol, was that Castle Systems, which is a security firm which has been tracking attendance since the pandemic, says that attendance in New York, where a lot of these companies are based, maybe not the smaller banks, it’s still only at 50%. It’s still only a 50%.
It doesn’t feel like it when you take public transport. I was just going to say that, Scarlet. And I think I mean, I think part of that has to do with September nine, Friday. That’s what I was going to say. Like on certain days, you know, when people aren’t necessarily come into the
Office Fridays, the one I noticed the most, I noticed that other places got to stagger times. They got to come in either earlier or way later. I noticed that he thinks the smaller banks will respond to that, people saying, I’m just going to come in later. No. Yeah, that’s
All I have to say is we’re here five days a week. Right. But it’s interesting, right? Like, I just I am just amazed at like that post-pandemic narrative how it’s kind of changed dramatically. And maybe it’s a New York thing. I don’t know, but I don’t know. We’ll see.
All right. That’s a wrap, guys. Off to the Fed meeting. Next time we’ll be talking about we’ll have the decision. We’ll know what Jay Powell has to say. So it’ll be interesting to watch that. And market reaction. That’s a wrap across platform radio, TV, YouTube, Bloomberg Originals, Beyond the
Bell, folks. We’ll see you again same time, same place tomorrow. All right. Coming up, we’re going to break down what to expect, expect ahead of the Fed decision and the big decisions with Raghuram Rajan. He is the formerly with the IMF and Reserve Bank of India. This is the close. And.
Welcome back to the clothes. I’m Scarlet Fu with Vonnie Quinn instead of the usual FOMC drift. On the day before the Fed decision, we actually got a rally on our hands, a modest rally. But the S&P 500 closing at a new record high.
And in fact, it was the first back to back gain for the index in about two weeks. Treasuries recovering from their recent losses. You have the two year yield coming down four basis points to 4.68%. Today’s ten year auction actually
Generated stronger than expected demand, even as the ten year is kind of a strange tenor. It’s not as in demand, not as liquid as the ten year or the 30 year or anything else we want to point out, of course.
Dollar yen, the yen weakening here even after the Bank of Japan exited negative interest rate policy and of course said that it will no longer be buying ETFs and indicated that it’s going to drop yield curve control. First of all, it’s pretty well telegraphed.
But also there is a massive gap still between the US and Japanese rates and Bitcoin down 5.4% right now, down more than $10,000 from its intraday high last week of more than $73,000. All right. Let’s move on to individual movers here. Nordstrom gaining almost 10% on the day,
According to Reuters. The founding family wants to take the department store operator private. They’re working with banks to reach out to private equity firms. So more on that to come. International Paper, a big advance are up 11%. The card Web producer named Andrew Silver Nail as its new CEO effective May
1st. Silver now is an outside hire. He was formerly at manufacturing companies like Newell Rubbermaid. He’s also a veteran of KKR, so he might be injecting some new ideas into the company. Fusion Pharmaceuticals gaining almost 100%, so almost doubling in value today. Record high record advance.
This is after AstraZeneca agreed to buy the biotech, which focuses on targeted cancer treatments. The price tag here is $21 per share, or $2 billion in cash upfront, plus another $400 million, depending on whether they meet some milestones. And Advanced Micro Devices down almost 5%. The worst performer in the Nasdaq 100
After its rival Nvidia, yesterday unveiled its new black wall chip. And of course, that prompted a decline in some of the other chip companies, including Marvell Technologies Coherent and Rambus money. Well, Scarlett, the world’s largest Bitcoin ETF, has posted a record daily
Outflow that’s sending Bitcoin and other crypto related stocks lower after that recent surge. Joining us now is Bloomberg Intelligence ETF analyst James Savours. So, James, how much are the prices of these ETFs a reflection of the price of Bitcoin right now and how much have they
Got to do with demand? Yeah, so they definitely have a lot to do with demand, right? So all these things are going to do is they’re going to track exactly what the price of Bitcoin is doing. So the return of Bitcoin is going to be the return that you get in these ETFs.
But the flows going into or out of these are definitely going to be impacting the price. That said, they’re not the whole market, right? Like people don’t look at outflows or inflows to S&P 500 ETFs and say that that’s the reason the S&P 500 is moving.
Yes, they’re a part of it right there. We saw a huge outflow from Gbtc yesterday, as you mentioned. We saw the first daily outflow yesterday for the entire group and something we haven’t seen in over a month. But for the most part, it’s there just a piece of the overall pie.
Right. So it’s the broader market that is causing this. This sell off and sell offs are to be expected in Bitcoin if it’s very volatile, if nothing else. Yeah, it’s very volatile. We’ve seen this before. What I also like, I suppose, and like when I say like, I mean I’m amused by
This circular argument or explanation for why Bitcoin is rising or falling. One of the explanations for why Bitcoin is falling today is that MicroStrategy, which has become a proxy for the digital coin, is done buying Bitcoin for now. So that has pushing Bitcoin prices lower.
How often do people cite these explanations as opposed to, Oh, there’s just a technical driver here? Yeah, I mean, every time there’s a huge run up or a huge collapse, there’s people coming up with all these theories about exactly why it’s happening. I mean, it’s probably an amalgamation of
A bunch of different things. I’m sure that’s probably some of the reason why some people are selling. They were they were trying to front run the ETFs and front run Michael Saylor as he’s buying these assets. And it seems like he’s stopping the flows in aggregate that I mean, these
ETFs took in $2.5 billion last year. They’ve taken in 12 billion since they launched in early January. So this has been an absolute smashing success for the ETFs. But if anyone is telling you they know exactly why the price of Bitcoin is moving at any given day, I would take
That with a grain of salt. Obviously, though, the ETF story itself has lent this 170% runup that we’ve seen in Bitcoin since since October. And like you said, we’ve seen a big pullback right now. But if anything, you can trust Bitcoin to to give you, it’s going to be
Volatility and big drawdowns. Every time we look at bull markets in these in Bitcoin, we see massive drawdowns ten, 15, 20, 30 to 40% on the way to new all time highs. So if you’re investing in Bitcoin, just understand that it’s going to be a very volatile asset.
Yeah. And given the rally that. It’s hard not surprising to see such a violent draw down at that, James. Well, I appreciate your joining us, James Seiffert of Bloomberg Intelligence. Meanwhile, we know that Dow’s CEO Jim Fitterling sees a big difference in demand between the US and Europe.
Alix Steel is in Houston right now. She got a chance to sit down with the Dow CEO and here’s what they had to say. Is this an economy, a US economy that needs fed cuts? What’s your take on a global scale?
You know, it’s starting to feel like the economy is gaining a little bit of strength the beginning of the year. It’s not it’s not robust, maybe a little bit early to tell if this is a long term trend, but it’s been a decent start to
The year. Electronics has been a bit stronger than last year. Last year was kind of a weak spot. So our outlook is good. Automotive had a good year last year and I think despite the discussion around electric vehicles and some of the flat
To negative sentiment that’s in the news, the reality is I think it’s going to be another good year in the automotive sector. Housing’s been the slow start, but there’s been an uptick in single family home starts, which is good. That usually has a ripple effect through a lot of other durable goods manufacturing.
We haven’t seen that yet. So a modest good start to the year and we just see how things develop. That begs the question that if we do say get 2 to 3 cuts this year, for example, from the Fed, is your expectation that we see accelerated growth, higher inflation,
Like does that actually start more growth? Well, I think in the commodity space and in our industry in particular, we tend to lead into a slowdown. And so we started to lead into this 18 months. Middle of this year, it’ll be 24 months
Ago and we typically tend to lead out. And so it’s too early to say we’re coming out, but you can start to see shoots that are like when we see a recovery. And of course, that demand, you know, what’s missing from the economy right now is the durable goods demand.
And when that and construction demand and when that comes back, those are high volume applications. And that demand pull is going to mean that prices are going to move up a bit. I don’t know if I would call that necessarily inflationary, but that’s just the cycle.
What do you think it’s waiting for? I think it’s waiting for rate reductions for the mortgage rates to come down. I think that’s the next big thing that typically triggers a kind of a shoot up in the housing market and then that
Triggers a lot of other services and durable goods demand that comes behind it. So we may see a second half recovery. I’m hoping sort of what I’m hearing from you, that they’re hopeful. Is it a similar picture over in Europe? So the chemical sector in Europe is
Under a lot of pressure. I mean, input costs are high. The economy there is weaker in many sense compared to the US. What’s your take? European consumer demand is not nearly as strong as it is here in the States. And of course, though, the weight of
Higher energy costs has hit the consumer in a lot of different ways. Now we’re seeing an improvement year over year. Obviously, energy has come down, but natural gas is below $10. A million BTU landed in Europe. But we sit here today at a dollar 60 and
Maybe the long term trend is 250 to 357. Still, that’s a difference. Still a big difference. And electricity, which most consumers purchase. Electricity costs are double, maybe a little bit more than what they are here in the U.S. So I think, you know, there’s a big question when I look at my downstream
Customers in Europe, I’m always questioning how long will they be there? And if you don’t have a domestic market to service in Europe, you really can’t afford to export from Europe. So if you don’t have a domestic market to service, you have to say, you know, what is my footprint need to be?
How long can I be there in order to be part of that economy? That’s a big deal. I mean, you’re talking about the automotive industry, construction industry, like, is that going to move? What what’s your best sense? A lot of big a lot of technology comes
Out of there, too. I mean, beyond just the industry, a lot of the technology that we use around the world starts in Europe. And so, you know, exporting technology obviously is a little bit easier than exporting product, but we’re already starting to see imports of electric vehicles from China into Europe. We’re seeing
China’s become a lower cost competitor than Europe in petrochemical. So you’re starting to see product move into Europe. The Middle East obviously has been a big supplier because of their cost position into Europe. Europe’s getting a bit of a reprieve right now because of the Suez Canal situation.
So operating rates are up a little bit. But I think that once that Israel-Gaza conflict is resolved, then we’ll see things go back to normal. Is it fair to say that you wouldn’t build a new chemical plant in Europe right now? Be very tough.
You’d have to be in a very specialized downstream market that you knew could handle the higher input cost. But I would say in general. Be a very tough. And that was Dow CEO Jim Fitterling sitting down with Alix Steel in a wide ranging conversation.
They mentioned EVs and the presence of Chinese EVs in Europe and how that’s a stiff competitor. Now, there certainly we’re not seeing Chinese EVs in the U.S. But Bonnie, I know that you were working in Dubai for a few weeks. Are there EVs in the Middle East?
Not too many electric vehicles, I have to say. Not that I saw. Of course, I might have been hanging around the wrong circles, Scarlett, but yeah, the dealerships no end in sight to the dealerships. And they were high end dealerships. Let me tell you. I can imagine from Aston Martin to
Lamborghini, I mean, Maserati one after another after another, didn’t see too many EVs on the roads and they were very congested roads. That’s not to say that it won’t happen overnight, though, because when, you know, the kingdom or one of the Emirates decides that something should happen, it
Happens. Yeah, but for now, gas is cheap, too. So it’s not like people are necessarily incentivized to look into other kinds of vehicles, home grown Home Depot, Miles said. All right. Coming up, we’ve got the top three where
We focus in on some top three movers and shakers at the center of the day’s biggest stories. This is a close. Each day the Fed decides they are scared stiff of getting this wrong. The markets are just primed for the big green light. Trust Bloomberg to bring it. Investors coverage and exclusive
Analysis, including Powell’s press conference. We want to see more good data. We’re still seeing sticky inflation. How dependable is the data? How long does it need to be good? Six, seven, eight months. An end to Bloomberg Surveillance. The Fed decides starting at 1:30 p.m. Eastern time, Tax changes everything.
It’s time now for the top three. Every day at this time, we take a deep dive into the folks at the center of some of the day’s biggest stories. And first up is George Lucas. The legendary Hollywood filmmaker is on Team Iger. Lucas says he is supporting Bob Iger in
The Disney CEO’s proxy battle with activist investor Nelson Peltz. As you know, Lucas became a significant shareholder after selling his production company to Disney a few years ago. It’s heating up. Yeah, I mean, he’s the largest individual shareholder. He’s been around for quite some time. He’s George Lucas.
He’s had a very successful tenure. And I’m sure, you know, he was very happy to do the deal back in the day. And he’s been with Disney since then. So in a way, why wouldn’t he be nostalgic and be very happy that Iger is back and be on his side? Yeah.
So we have Jamie Dimon and George Lucas on Bob Iger side along with Blackwells and I believe value. Right. And then you have Nelson Peltz and Jaber Sylla, the former Disney CFO, and a Perlmutter. So you’d like to think that sort of what
Would be in the best interests of all shareholders and all, you know, participants will happen. But I guess, you know, we’ll have to wait and see. All right. The battlelines being drawn. I’m taking a look at the idea that Oprah
Winfrey is helping very much the sales and also the reputation of some of these weight loss drugs. Right. So the we go with and the, you know, the Zep and now we have another one. And of course, Ozempic the the original. I said, you know, it wasn’t maybe
Perhaps the original, but she hasn’t actually named which one she’s taking because that would sort of, you know, boost sales for that particular drug and maybe not help the others so much. But it’s fascinating month Scarlett Yeah she had a one hour special where she actually confronted the CEO of Weight
Watchers WW and said why do we need Weight Watchers if we have these drugs? And yeah, it wasn’t a clean answer no and it’s it’s a very difficult thing to talk about this whole issue because on the one hand you want people to be very happy in their bodies, whatever they are.
And on the other hand, it gives a lot of relief to a lot of people. Absolutely. All right. The third person we’re watching is Aaron Taylor-Johnson, who I didn’t know who he was, but I figured it out because a number of sources are reporting the
British actor has formally been offered the role to take over as the new James Bond. Handing the baton from Daniel Craig, I can see is perhaps he’s 33 years old, so he’s been plenty of time to grow into the James Wan role and could do it for like a decade.
It’s a 10 to 12 year role. Yeah, I’m kind of interested to see who might be the next Bond villain as well. Did you know the nine Murray has expressed interest He would like to be a Bond villain. He’d be like, Kill you with his words. I love that.
This is very exciting skill. Yeah, exactly. And they need a director as well. I’d love Christopher Nolan too, but I don’t know. Ooh, I like that. I like that. All right, You have it all sorted out the next morning. Number 26, we’re going to preview what to expect from tomorrow’s rate decision with
Raghuram Rajan of the University of Chicago. This is the close. It is a big week for central banks, and the world’s largest negative interest rate regime is finally over because despite a historic rate hike from the Bank of Japan, you look at the yen, it’s falling to its weakest level this year.
Let’s get a better understanding of what the BOJ’s move means with yes recall of the monarch’s grip. He joins us now from Tokyo. Yes, good morning to you and thank you for joining us. The BOJ trying to normalize its monetary policy.
How significant is the move yesterday? Because even though it sounds like it’s pretty huge, a lot of it have been telegraphed. No, that’s exactly right. But it is very, very significant because it shows that Governor Ueda and the Japanese policy elite now has confidence
That the recovery is real, that it is really sayonara, deflation. They waited a long time, but now that they’re moving, the confidence is there. And as a result of that, you actually find that Japanese institutional investors actually are confident to put their cash balances at work and seeking
Riskier asset, and that includes increased overseas investment. Okay. Yet when you look at the currency reaction, some people are saying that reflects concern that this is kind of a one and done situation and does not necessarily signal the start of further increases in the rate in the benchmark rate.
Yeah, I do not agree with that. I think that we will see further rate increases here in Japan. Quite the opposite. What is going on here is that finally, for the first time in 30 years, incomes are growing. The top line income for insurance companies, for pension funds, all of this is growing.
So as a result of that, the pool of Japanese savings that needs to be deployed overseas is actually growing. That’s why the yen is weakening. It’s good yen weakening because there’s more capital being deployed from Japan. You know, yes. For all we hear from the Federal Reserve
Is that we’re watching the incoming data. We have to wait and see. You know, be patient. Stay with us. But we aren’t seeing that in the Bank of Japan. So we just got the spring round numbers. And and as you said, it looks like there’s going to be huge wage increases.
But are we sure that that’s going to feed into the economy the way we think it is? I think the answer is absolutely yes. Like, look, we had 20 years of wage increases of only around 1%. Then last year we got 3.1% and now we got 5.3%.
I mean, that’s really the beginning of something very, very important. And remember, because the supply of labor is shrinking in Japan because of the demographics, these wage increases are not just a one off, but they are structural. And as a result of that, you know, it is
Very important that the Bank of Japan normalizes interest rates and actually, in my opinion, is going to start to actually step on the brake, you know, over the next six, seven months. That’s fascinating. But, yes, we’re just, you know, an overall tally of this very, very long
Experiment. Would you deem as a roaring success, you know, overnight after sort of 17 years? And it’s interesting. I think the answer is that it is a success. I wouldn’t call it a roaring success because like everything in Japan, everything takes such a long time. Remember, we basically have had, you
Know, zero interest rates here, you know, for almost 30 years. So it took a long time. But yes, thank you. Finally, it’s happening. And like everything in Japan, when it happens, it happens very fast. Well said. But as you mentioned, zero interest rates for over 30 years.
It’s hard to change people’s mindset. Yes, institutions may start to take on extra risk and may put money to work, but people are still in this mindset that you can’t get any return on your money in certain kinds of assets because
Of the interest rate regime. How does the Bank of Japan or how does the government perhaps kind of push people in that direction? No. And you put your finger on the pulse the way they’re putting, you know, people’s mindset is tax incentives.
As you’re aware, we have these changes in the NISA rules, you know, so that now the amount that you can tax free invest in riskier assets has basically been doubled. And Mr. and Mrs. Watanabe are beginning to respond to that. You’ve seen record inflows into domestic equity funds here by Japanese retail investors.
So it’s a combination. You’re right. Retraining long, long entrenched habits is something that may take a little bit of time. And the government is working together, which is very important. You don’t have the Bank of Japan acting on its own strong coordination with the Treasury, with the prime minister’s
Office. Japan is one team, one dream, one team, one dream. Love it. Yes, for the whole of monarch’s group. Thank you so much for getting up early for us. Yes. For call joining us from Tokyo with the longer term impact of the BOJ’s rate increase. Now.
We are done with the OJ that’s checked off. Next up is the Fed leaders at Bank of America weighed in on the policy that the Fed is considering during a special Bloomberg Surveillance broadcast from the bank’s New York headquarters. Take a listen.
Financial conditions would tell you that monetary policy is not yet sufficiently restrictive outside of maybe loan growth and housing. It’s difficult, in my view, to find sectors of the economy that had obvious interest rate effects. The Fed has latitude that a lot of
Places don’t have, that they can be hold too restrictive and let the economy really catch up. You’re at a point where positioning is starting to turn more positive on economically sensitive themes. Rates at some point should move lower. They’ve got to be careful they don’t
Overshoot. Are they going to show three cuts or two cuts? We think it stays at three, but it’s going to be a very close call if there’s a little uncertainty about when to start. The June meeting is now right around 5050 in terms of whether the Fed will go or not.
If we don’t get them, I think that’s the risk for some of these more credit sensitive areas, like real estate, like small caps writ large. So it is a bit of a pivotal point, we think, for markets. Let’s continue this deliberation about the March decision from Raghuram Rajan.
He is professor of finance at the University of Chicago Booth School of Business. Professor, good to speak with you. Thank you for joining us. As you heard, Mark Habana of Bank of America saying the June meeting is 5050. From where you sit, what will it take to
Start rate cuts in June? Well, you’d have to see inflation come down once again. As you know, core inflation has been picking up over the last couple of months, and it’s at a rate that the Fed is very uncomfortable with. Everybody’s expecting housing inflation to come down. Hasn’t shown strong signs of that.
It’s come down a teeny weeny bit from last month, but that’s still a very high rate. And of course, labor markets are very tight still and therefore services inflation, which is very low, services are labor intensive. That’s also pretty strong.
So the Fed would like to see more evidence that inflation is coming down from this plateauing, which we see over the last few months. That will be, I think, enough for the beginning of rate cuts, How many calls and at what frequency is still up in the air?
Absolutely. So more data, as Jay Powell has mentioned several times, is what the Fed needs now when it comes to the dot plot. Right now, they have three rate cuts pencilled in for 2024. The big question is whether they adjust that and we start to see two.
What do you think that discussion is taking place right now inside the FOMC? Well, clearly, they want to avoid pushing the economy to a recession, but they also want to avoid sort of starting to cut and seeing inflation very stubborn or even going up and then having to turn around and start raising
Interest rates again. So once and done, they want to do but they don’t want to kill the economy in the process. Of course, a lot depends on how corporations behave. Are they still able to pass through price increases? Are they able to hold on to margins? Wage growth is still reasonably strong,
And if corporate margins narrow because corporations can’t fast through higher price increases, then you may start seeing layoffs. You may start seeing the slowdown. That will be a signal for the Fed to to relent a little bit. On the flipside, if corporations are
Still able to pass through price increases, they’re holding up to their margins. Demand is still strong. You don’t see inflation coming down. The Fed may actually feel it has to has to do more. And the ideal situation is, you know, corporations don’t pass through anything.
But wage growth also slows down because people start seeing layoffs and worry about asking for more when they see layoffs. And we have that proverbial soft landing. I think all three possibilities are still there, maybe 50%, 45% for soft landing and the rest on the other stuff. You’re right.
If the data hasn’t materially changed and it really doesn’t seem to have changed all that much right, then why even consider cutting at this point? Well, you know, I think the Fed is trying to hold out some hope.
And you can ask, is that the Fed’s job to hold out some hope of rate cuts? I think, you know, you’re seeing some signs of slowing. Credit card delinquencies are up. You’re seeing, you know, high profile sort of recruiters like consultancies, the accounting firms.
They’ve slowed down the hiring. We can see it in some of the MBA hiring that we look at. So there are signs of slowing, but it’s obviously not enough. Part of the reason is we have interest rate sensitive sectors that are typically react, not reacting.
A lot of people sitting on 30 year mortgages, Those interest rates are moving up. Unlike, for example, in Canada where the. They’ve started moving up and are cutting back into demand. So, you know, things are different in the U.S., but you are seeing some signs. The question is, at what pace does the
Slowing take place? Is it enough for the Fed to actually start cutting? And, of course, you know, higher for longer has effects in the markets in the Fed, you know, doesn’t seem to want to upset the markets totally rather than whether it’s in June or later in the
Year. What does a 25 basis point cut do to the markets and to the economy more particularly? Well, it’s again, as the discussion with Japan went, it’s the beginning of a sequence of events. Right. So in that sense, the market may well celebrate and but that’s part of the
Fed’s problem. It has to take into account the loosening of financial conditions when the market celebrates as it ponders the cut. I have to cut, but only if I see the direction of movement such that it doesn’t reverse when the markets start celebrating. I think as important as is, the cuts are
Also what it plans to do on the quantitative tightening, which maybe we get more information on in this meeting. Maybe, although it sounded like at the last meeting, the Fed chair was really wanting to make that something that they
Did after any kind of rate cut, it was kind of like they want to keep it on autopilot, not have it be something that investors fixate on. Do you think that that’s still the the plan here for the balance sheet?
Well, they are running it down at about 90 billion, you know, per month. And the problem to some extent is they’ve run through the reverse repos, which is what the mutual funds held at the at the Fed. There’s about 300 or 400 billion left in that.
So very soon we’re going to run through that and then you start cutting into the reserves that the banks hold at the Fed. And that might be a different kettle of fish than running through the reverse repo because that could impact real liquidity. Think of, you know, the reserves the
Banks have as cash that they have. And, of course, they have a lot of liabilities which require cash. And if you run down that cash that they have at the Fed, they may not be able to service those liabilities as easily.
And you get liquidity problems building up in the markets, as we saw in September 2019. So the Fed wants to be very careful. It doesn’t create that problem. And so it’s debating what is the appropriate level of the Fed balance sheet.
And it becomes a more serious question once they’ve run through the easy money that the mutual funds are holding at the Fed. Yeah. Lots of moving parts here as the Fed tries to. What’s the word threat? A very fine needle here. Raghuram Rajan of the Booth School of
Business at the University of Chicago. Thank you so much. Thank you. We have some breaking news money. JPMorgan Chase, the biggest bank in the U.S., has boosted its quarterly dividend to a dollar 15. The previous dividend was at a dollar oh five. So this is an increase here to a dollar
15. Some might say it’s a little bit of a surprise here. I was just checking in. Jp morgan has a dividend yield of about 2.17%. So there’s certainly room to move up just by looking at that number. Well, certainly the dividend estimate was for a dollar five, so the dollar 15
Will be a nice surprise for those who are anticipating a dollar five in after hours trading. We’re now seeing Jp morgan move around at all, really, but we’ll see how it trades tomorrow because that certainly will be a nice boon to investors in JPM. It’s already up 13% this year and 50%
Year over year. Carlos Now people are looking to enter banks, see them as a value play, even if some people say it’s a value trap. If you look at how equity closed on the day, we managed to make a record high,
Which is kind of a surprise given that it was day one of the FOMC and not a whole lot of people were expecting a lot of action because typically everyone just kind of waits and sits on their hand until that.
The decision comes out on Wednesday at 2 p.m., but a record high for the S&P 500 and Treasuries also rising as well. Exactly. And if you look at the yen, we have seen a move in the end, but we’re still below
151 and Bitcoin, of course, that’s got to hurt a lot of people below $64,000. Absolutely. This is the close on Bloomberg. And. And. The Supreme Court. Let Texas start arresting and deporting people who enter the country illegally. Refusing to block a new law.
Joining us now from D.C. is Bloomberg Balance of Power co-host Kelly Lines. So, Kelly, tell us a little bit more about this ruling. Well, this ruling is a loss for the Biden administration that wanted to stop Texas from being able to enforce this law, essentially arguing that it undermines federal authority to conduct
What is happening at the U.S. border. But the Supreme Court, with a 6 to 3 ruling, the three liberal justices dissented in this ruling, essentially is allowing Texas to begin enforcing this law immediately, which, as you said, would allow them to essentially arrest
And deport anyone who crosses into the state of Texas illegally. There have been some concerns about this law that was signed in Texas back in December that it could lead to, for example, racial profiling of individuals who are in Texas. But nonetheless, that law will be able
To be enforced. All that said, this does not end the legal challenges to this law. There are still ongoing legal proceedings in a lower court. The Fifth Circuit Court of Appeals in Texas, which could still act on this moving forward. Essentially, the Supreme Court decided today not to override whatever the Fifth
Circuit may do, but to let the Fifth Circuit Circuit decide this first. Thank you for explaining that. I can get really complicated. I appreciate the easy, simple explanation there. Something that just occurred to me. It is Tuesday and there are still a number of primaries. I think we all kind of lost interest
After both nominees clinch the nomination. But there are some interesting down ballot races that could be that could have a lot of big ramifications. Walk us through the ones that you’re paying attention to. Well, the big one is going to be in Ohio. Scarlet is the Republican primary to run
In the for the Senate seat that is currently held by incumbent Democrat Sherrod Brown, one of the probably most vulnerable Democratic incumbents in this election cycle. It’s a three way primary. Donald Trump has thrown his support behind businessman Bernie Moreno, who currently is leading in polls, leading right up to the primary today.
But really, this is going to be a test of the strength of the Trump endorsement in this cycle. If he performs well, that may have wider indications for how Trump support could could influence the outcome for these candidates that have his backing moving forward.
Of course, there also is thinking that for Sherrod Brown, Moreno would be one of the easiest beats for him that he could potentially defeat him come November. Something else interesting for a Bloomberg audience, though, is that in this race in particular, crypto money
May be being spent because Sherrod Brown is the chair of the Senate Banking Committee. He is not necessarily been a friend to the industry, quite critical and skeptical of crypto overall, whereas Bernie Moreno is a crypto evangelist, if you will, much more supportive of the
Industry. So all these super PACs we see have tens of millions of dollars to throw in this election cycle. It could be spent in Ohio and that is obviously specific to one industry and more, Bloomberg, if you will. But wider really what Ohio could be a
Tell on is the Trump versus anti-Trump wings of the Republican Party, whether it is kind of the MAGA base or the establishment that ultimately comes out on top in Ohio is going to be interesting to watch. Okay. Highly funded Senate race there.
And Kelly, I’ve lost count of the number of times we’ve talked about the funding of the government, but there is another deadline that is coming up. And so far it looks like we’re going to get things done. Well, there’s a caveat to that, Scarlett, because on the one hand, we do
Have a handshake deal that was made last night between the White House and congressional leaders to basically do these final six appropriations bills. They figured out the hang up over the Department of Homeland Security bill in particular. It’s issues over the border that had drawn out this process for a little bit longer.
But the problem is we haven’t actually seen the text of the bill yet. And that is where the clock could be working against Congress, because once the text comes out, the rules in the House indicate lawmakers have to have 72
Hours to read it before a vote. When you get to that 72 hours and then it goes to the Senate where procedurally any one senator can disrupt the proceedings and without unanimous consent, these things could take a while. It’s possible that come midnight Friday,
We still don’t have this passed both houses in both chambers, if you will, in Congress. This could stretch out over the weekend, which either means there might be a temporary lapse in funding that wouldn’t necessarily be felt to a large extent because it is a weekend or they could
Pass yet another continuing resolution, a short one just for a couple of days so they can actually finish the legislative work. And keep in mind, this is to address the fiscal year that started on September 30th, and we’re now almost halfway through. Yeah, I love that you guys remind us of that.
It just goes to show how much of back work we’re doing. Kelly Lyons, thank you so much. And of course, you can catch Kelly and Joe Matthew on balance of power coming up at the top of the next hour.
Still ahead, we’re going to tell you what you need to know and what you need to watch for tomorrow. This is the close on Bloomberg. Looking ahead to tomorrow, Red, it will be Flint pricing its IPO. So I want to bring in Bailey Lipschultz, who of course, covers IPOs for
Bloomberg. What’s interesting about the Reddit IPO is how much they’ve allocated to Reddit users. Yeah, moderators, people with high karma points. So some of those die hard users getting allocated. Carl, about 8%. So when I talk to money managers, that’s a potential wildcard. Well, they want to flip on the top and
Whether or not they’re going to want to kind of hold on for dear life like we saw with the GameStop in the AMC’s of that meme stock craze. What range are we looking at and what are the whisperers around what’s going to happen? It’s kind of people are talking it down
As Sarah Labs is in my name that’s pricing this evening and I’ll trade tomorrow. So that’s going to kind of show us where investors are kind of valuing some of these technology names. But it does seem like when we’re looking at the range on the high end, valued at
$6.4 billion, the bankers investors I’ve talked to aren’t really kind of penciling in on the upper end of that range. Okay. And you mentioned a sterile lab that’s also going to be pricing as well. What kind of demand is there for that? A lot of excitement. AI, chips, semiconductors.
It’s pretty much every buzzword that you need in 2024. So they’ve already raised the range. They’ve already upped the amount of shares they’re selling. When I talk to bankers and investors, that’s the deal. Again, pricing tonight, that’s kind of a
Question of how high will they push valuation and how strong of a pop can we see tomorrow when that company starts trading? All right. Bailey Lipschultz giving us a couple of names to watch for this week with IPO. Thank you so much. All right. Let’s look ahead to what else we’re
Watching for tomorrow. There’s only one thing, right? Well, obviously, these bills note the FOMC decision at 2 p.m. Jay Palace news conference begins at 230. And of course, we’ll give you all the details in terms of the dot plot, the projections on the economy, interest rates and unemployment.
I’m going to have 2 hours of market moves afterwards, see how the markets digest that. But of course, as Bayley was saying, the Reddit IPO is going to be pricing and that’ll give us an idea about appetite from retail investors, not just for the Reddit IPO but for other stocks as well.
Absolutely. And of course, pricing is tomorrow, which means the stock begins trading on Thursday. And the central bank parade doesn’t end because the European Central Bank president, Christine Lagarde, will be speaking at 4:45 a.m.. She will. And later on in the day, it’s the end of
The opener. And so I know you were going to be watching not just Wednesday, but also Thursday. You’re not going to get any sleep over the next couple of days. Shohei Ohtani of the L.A. Dodgers, newly of the L.A. Dodgers, we should mention. And of course, we do have some earnings
As well, including Michael. That does it for us. Balance of power is up next. Have a great evening, everyone. This is the close of Bloomberg.
2 Comments
I just love his name is BINKY. Don't @ me
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