matt: very good morning from bloomberg's middle east headquarters in dubai. i am manus cranny. it's "daybreak europe." gamestop's monumental rally is abruptly halted in extended trade as wall street bets frenzy reaches jay powell. he says asset prices move for many reasons.

nasdaq futures dip on underwhelming results from apple and tesla. elon musk's group posts record revenue but lower-than-expected profit. e.u. officials demand astrazeneca supply the continent with vaccine doses from the u.k. amid ongoing fight over shortages. 10:00 a.m. in dubai. 6:00 a.m. in london and this is the view of wall street versus main street. out wall streeting wall street. this is when main street wants a piece of wall street's action. it has reached the mind of the president and the fed and the fed i think has sidestepped the issue. good morning to you because mr. powell says the financial stability vulnerabilities are

overall -- annmarie: he did not want to talk about gamestop yesterday. these chats for the most part are quite innocent. some hedge funds could be threatened with existential crisis for what is going on. we have seen this happen with relatively well shorted companies in europe as well as this morning, you can see in australia and that was powell yesterday sidestepping the frenzy as you mentioned. it's not just at the fed but the frenzy, we are buzzing about it in the financial news but made its way to the west wing with president biden, secretary yellen knowing about it and discussing it. in next big question is what does this mean for regulation? democrats have the stronghold in d.c. and they want tighter regulation. is this something that opens a window for that? manus: do you regulate and

muzzle main street, people who want a piece of the action, from wall street? there is no irony lost. of course, the flesh wounds of the hedge fund industry are really important. down 20%. melbourne capital down 30%. the question i asked myself, where is the risk with this kind of hedge fund dislocation? annmarie: these are questions we will be asking the former ceo of the london stock exchange. do not miss that conversation, coming up shortly and that point about the risk to the broader market, let's take a look at where we trade this morning. we can see that story bleeding into the wider market when the s&p 500 closed down more than 2.5%. many had this theory that what was happening with the hedge fund is that they need to cut that cash to close out the short

position. the other thing is that volatility is soaring and that is potentially forcing investors to cut leverage, exit the market. and you can see right on the screen in terms of the futures market. futures extending the losses, down .5% and nasdaq futures down .6%. we did have levels fall off of apple and tesla as well. what we always like to talk about, when there is risk in the market, what do you want to hold? the u.s. dollar, another day of gains. manus: there is no loss of the words. let's get to max kempner, multi-asset strategist at hsbc. he is not so pure about the dollar. good morning to you. max kepner joins us from hsbc. volatility is rising. people are now raising -- are you concerned we are in the foothills of a much bigger volatility explosion to come?

good morning. >> hello. i do not think so. what we are seeing now is pretty similar to what we have seen probably in june last year, what we had seen in september. last june, we had this explosion of value stocks and the explosion of the opening trades against lockdown, particularly in the equity market. that was a lot of frost coming off the market at the beginning of june, spiking towards 40 to 50 levels. we have seen similar things with the nasdaq whale at the end of august and the beginning of september. again, i think that this could be of similar magnitude here. there was a growing consensus over the last couple of days and weeks that markets have become a little bit too frothy. i talked about this here on the show a month ago that equities are really not pricing any

margin for error and that's where we are. there is an awful lot of froth in the market but ultimately, you know, i think this will prove a buying opportunity. it can go further. there is too much froth and not enough margin for error in equity markets in particular if you look across the asset classes. it was equities driving it. credit, not that much going on. the froth is in equity markets. it will be a buying opportunity because the recovery is still intact but that froth has to be taken off. >> is a good point about the frothiness of the market so where does that leave us? do we start talking about valuations, and that actual valuations matter? >> probably not that much to be honest for the short term. we have written a note a couple of weeks ago on valuations as a short-term tool, a short-term tactical tool.

frankly, it does not play that much of a role unless you adjust for metric momentum. then it starts to matter much, much more. but ultimately, you know, valuations, particularly right now, where we do not really know where the earnings trajectory is for equity markets, it's not the number one concern. i think the number one concern are these for twin -- frictions in equity markets between main street and wall street. i guess the frictions really are in between some of the value versus growth elements. think about for example things like can the euro zone, financials having outperform so much even though the bund yield has not even done anything, even though the curve has not moved, spreads have not moved. there's froth and some parts of the market, not necessarily valuation wise but just simply having output too much and that froth in some parts of the cyclical and value part of the market, that really has to be

taken off now. valuations overall still are fairly supported. if you look at the fed's guidance, yesterday, that very much speaks in favor for steadier real yields and this increase in real yields we have seen at the beginning of january, completely being overdone and the fed being very determined to sort of curve any rise in real yields, any kind of tapering speculation. that supports valuations and even current valuation metrics, particularly in the quality part of the equity market. manus: on any other normal day, it is 6:08 in london, 10:08 in dubai. on any other day after the federal reserve, we would be obsessed by the nuances that powell gave us. the whole focus on exit is premature, and substantial further progress needs to be made, sometimes to achieve the

threshold. it's amazing how that message of commitment in easy terms has been subsumed by a vix fight. what was that message to the fx market and the dollar? what is that nuance language mean for fx? max: in terms of central-bank policy, it's not only the fed. it's also the ecb when we look at what the communication was yesterday. markets should perhaps take into account that a rate cut could still be on the table so it's really globally. what it means is preserving the status quote. that means massive appreciation potential for the dollar is probably not on the cards right now. this is perhaps something more for proper risk-off and the fundamental risk-off period because we are seeing right now

something much more like we had in june last year, like we had in september last year, so in other words, nonfundamental backdrop and a nonfundamental correction in risky assets. that's not something the fed would normally really respond to unless it really threatens financial conditions. in june and in september, all that happened was taking froth off the markets. if the fed look through it and says we are preserving the state's co-as much as possible, yes, roughly steady to slightly depreciating dollar probably. annmarie: max kettner from hsbc stays with us throughout the morning. let's get to your first word news with laura wright. good morning. laura: democratic staffers are preparing two options for president joe biden's covid relief plan. one with republican support and one with a not -- without. more support is vital for the recovery. so far, biden has failed to get

the backing for his $1.9 trillion package. larry fink says the public and private sectors need to work together to confront climate change. the world's largest asset manager reveals its climate commitments. a net zero economy by 2050. >> if we are really going to be moving to a net zero carbon environment, all of society has to move, not just public companies. governments worldwide will need to invest in the r&d of how to prepare for climate change and helping us to design and build new technologies. laura: apple's cautious outlook is overshadowing a record revenue, topped $100 billion for the first time, driven by strong holiday sales of the iphone 12. the company did not provide an official forecast for the fourth quarter in a row with executives saying sales growth from

wearables will likely slow down. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. manus, annmarie. manus: laura, thank you very much. in the world economic forum is looking different this year, and this week, world leaders meeting virtually. bloomberg hopes to bring you a piece of that action. 10:00 a.m. london time. the executives from standard chartered, blackrock, and fidelity international. annmarie: coming up on the program, the spat intensifying in europe. astrazeneca refusing to cave to demand to use u.k. plans to supply the block. that story, next. this is bloomberg. ♪ so you're a small business, or a big one. you were thriving, but then... oh.

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>> not being able to ensure manufacturing capacity is against the letter and the spirit of our agreement. we reject the logic of first-come, first-served. that may work at the neighborhood butchers, but not in our advance purchase agreements. we intend to defend the integrity of our investment and the taxpayers money that has been invested. annmarie: the e.u. health commissioner rejecting astrazeneca has arguments. the spat between the two sides is continuing to -- take vaccine supplies from its u.k. factories. the face-off could add further delays to the already sluggish vaccination campaign. max kettner at hsbc, what do you make of this standoff we see

here between astrazeneca and the eurozone? do you think this is a huge rift where europe is in vaccination to your growth outlook for the euro zone? max: certainly does not help. it is certainly not positive. the risk-off vaccine nationalism is probably one that was overlooked for too long. apart from the logistical issues, really, we have been facing for a couple weeks already, you know, now comes vaccine nationalism. it may not only be europe. it may not only be the european union against the u.k. in the future, it might be other nations as well. i think it adds to the complications around vaccines, for vaccinations over the next couple of months. it not only doesn't help the european union's growth outlook, it also is perhaps a bit of a

reminder that this is not going to be a one-way street. this is not going to go into a massive reopening trade. we are going to have pent-up demand and a reopening of the global economy in three months time and everyone is going to be happy again. this is probably not going to happen. this is premature. while everyone very much sort of agrees now that the first quarter is probably going to be a write-off, there is a risk that that drives into the second quarter as well and then pent-up demand becomes delayed and then the idea of pent-up demand becomes delayed and then all of a sudden, we are talking about the second quarter. keep pushing it backwards and backwards, and all of a sudden, again, this may lead to a bit more of the froth being taken off risk assets and particularly equities. at the moment, it clearly does not help the outlook for europe but it is i think even a problem on the wider, global scale as well because a lot of people are still assuming, you know,

successful rollout of vaccinations, what powell said yesterday. while that may not be as much of a one-way street as people think, it could be turning out to be a much bumpier road. manus: that bumpy ride will have a repercussion and jolt for central banks, telling us yesterday that all options are on the table as the dollar descends into 2021. what will that invoke in terms of central-bank policy reaction, specifically from the ecb? max: look, i mean, we have seen the reactions yesterday. it remains to be seen what they can really do. of course, i think the ecb is stressing, while actually, in their findings, the reversal rate is somewhere around -100 basis points so there is the fact that rate cuts could be on the table but it does beg the question, look, does that really make that much of a difference?

another 20 basis points of a deposit rate cut, is not going to make the big, big difference for the currency? is that going to send europe down below 120 again? i very much doubt that. if really, the ecb is increasingly keen to comment on the fx rate and sort of trying to push the euro lower, i do not think that it's going to be a very fruitful, you know, a very fruitful thing to do, because at the end of the day, the arsenal is much more depleted. manus: thank you so much. max kettner, hsbc multi-asset strategist joining us this morning. coming up, the gamestop frenzy is grabbing the headlines and attention from wall street to washington. we will discuss more with a former ceo of the london stock exchange. his take on gamestop. this is bloomberg. ♪

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>> this was a very, very risky short to begin with. >> i would characterize the market is a bully and bubble. >> this is flipping houses from 2005 on steroids in 2021. >> if you go skating on the ice of investing, don't be surprised when you fall in. >> we have the tools that track changes and chatter on social media. if we think there is something unusual or nefarious going on, we can halt the stock, and then we will contact the company, make sure there is no news. >> our team including secretary yellen and others are monitoring the situation. >> i expect regulators will respond to this after-the-fact. it will come well after the crowd has his first. manus: some of the business leaders talking about gamestop's recent roller coaster. the frenzy of gamestop shows no

sign of abating and has now reached the hallowed halls of the fed. jay powell and mr. biden and the administration. let's get to the former ceo of the stock exchange in london and the executive chairman of capital markets. thank you for taking time to be with us this morning. gamestop, one guest said to me this is out streeting wall street. is this a risk to stability in the system? how concerned are you as you look at the story about the stability and fragility of the system? good morning. >> thank you for having me on your show. this is a risk to stability of the system? no. these are remarkable events. they attract attention. they take us back to the first half of the 20th century when retail was extremely powerful in the u.s. market.

this clearly exemplifies the power of technology, the power of communication in a quantum, interconnected world, and this return of retail really in the market is something of course that regulators are going to have to ponder, but if we look at the core underlying fact, we have basically a hedge fund and hedge funds were created on the basis that they could short stocks. the whole industry was based on that. if you want a story, you know, the grandfather, the granddaddy of the hedge fund industry, at one point, he cornered to cotton market. he was called into the president's office, woodrow wilson at the time, and the president asked him why are you doing this? he said i did this because i think i could do it, and because i just wanted to try. there are clearly some mechanical aspects here that

will grab and no doubt attract the attention of the regulators, but you know, if you are a hedge fund and if you take a major short position in an illiquid stock, which is what gamestop was at the time, you certainly also have to keep in mind the mechanics of shorts, and we can briefly talk about what shorting entails and perhaps this is not the purpose of your show, but to this, i think, it shows retail is back. whatever the motivation, and institutions are going to have to take it into account. annmarie: with this new trend, do you think it is this millennial meme driven generation, almost like occupy wall street in this day and age? >> this is what some members of the press and observers have said. you know, ultimately, if you put your own money in a transaction, you know, it might express some

emotion, but at the end of the day, you know, you are going to be facing the likelihood of either profit or loss so these are serious transactions. i don't think we should necessarily assume that investors, retail investors who put their money in these transactions are just motivated by some vague political notion of, you know, grievance or redress or main street against wall street. what is true, however, and you see the same dynamics in crowdfunding, you know, millions of very small investors committing very small amounts of money can now move markets. the negative impact of perhaps making the wrong investment decision at the individual level they not be that substantial, whereas on the other side, you have institutions who have to face margin calls, potential redemption from investors, so the actual mechanics of how liquidity and the handling is quite asymmetric. manus: time is going to kick in

against us. in a minute. can you sum up for me -- the risk is this. the regulators step in to muzzle the retail investor. is there some kind of a moral hazard? >> there is always the possibility of moral hazard. in financial markets. this is why we have regulators as an extremely able head of the fcc coming in to take the position shortly, gary gansler, and no doubt he will have to ponder that, but you know, as regards the financial exposure of each one of the individual retail investors, it probably does not amount to very much. so the asymmetric -- the asymmetric nature of the risk profile for that is multiplied by millions. versus on the other hand the concentration of risk i think is

what regulators would want to ponder. annmarie: thank you. that's all the time we have. nonexecutive chairman of capital markets and of course, the former lsc ceo. this is bloomberg. we are back in a moment. ♪

annmarie: good morning. from bloomberg's european headquarters, i am annmarie hordern with manus cranny from dubai. gamestop's monumental rally is abruptly halted in extended trade on wall street that's outage. the frenzy reaches jay powell. he says asset prices moved more for many reasons. nasdaq futures dip on underwhelming results for apple

and tesla. elon musk's group posts record revenue but lower-than-expected profit. e.u. officials demand astrazeneca supplies the continent with vaccine doses from u.k. plan amid an ongoing fight over shortages. manus, very good morning to you. 6:30 a.m. in the city of london. futures lower across the board whether it's europe or the united states and the debate today is about the gamestop frenzy. wall street versus main street. is that really at the core of what we are seeing play out in these financial markets? huge stock surges on some of these stocks, gamestop, tootsie roll, and the hedge funds will have to capitulate on their shorts. this is not just what is happening on global wall street but it is hitting the west wing. annmarie: -- manus: absolutely.

we do a call every morning at 4:00 a.m., and you said it's a trifecta of bastions of power. the white house, the fcc, elizabeth warren is speaking out. we have just spoken to our guest and he said there is no fundamental risk to the system. he takes us back in time to the start of the 20th century, a long time ago, when i was younger, and that is when retail investors really were triumphant. he's not worried about the system. take a look at mike's twitter account. he talked about the social position. but power, he said the system is fine. the system is stable and he is not worried really about a dislocation or disequilibrium in markets. annmarie: he did not really want to answer questions yesterday, sidestepping what is going on and keeping it to what he wants to do, which is monetary policy, which he says does not inflate the market. i'm sure many are questioning what powell said yesterday.

but i think the big question, and we brought this up with our guest on morning, which is what does this mean in terms of the broader market? is there systemic risk in what we are seeing in these individual names? manus: that was a firm no from him. let's have a quick snapshot of the market. the money goes in. you could have a vol-mageddon. you have to reflect on some of the things we have seen. it is the biggest deleveraging. this is something very important which is the have seen the biggest de-risking, deleveraging of net longs and shorts since 2014 and that is what i call wall street hedge funds, wherever you want to talk about that, institutional money, beginning to reassess, reappraise, and reevaluate the risk exposure. better opportunity to sell and you can always be trustee of the yen. let's turn our attention to

south africa and the imf. they cut the 2021 growth forecast to 2.8%, saying fixing the country's debt problems is more critical than ever. south africa has received heavy criticism for its slow rollout of the vaccine. the first doses are set to arrive on february 1, so our next guest lends money. the consumers of the country as well as other nations on the african continent. so let's get a sense of the impact of the virus, the reality on the ground, the emergence of new variants. let's get to the ceo of south africans lender. we are trying to understand what the real ramifications are of covid on countries like south africa. just how damaged is the economy, in your assessment? good morning as we start 2021. >> good morning, everybody.

we entered the cobit environment with an economy that was already growing far too slowly for the needs of the country as a result of poor economic choices over many years and lack of fiscal discipline. so the shock of covid was an accelerator on the top of an already deteriorating economic and fiscal situation so our current view is that the peak shock to the economy was in the second quarter of this year. there has been some recovery since then, but we would be forecasting that the economy would shrink somewhere between 7% and 8% in 2020 and then grow around 3% off that low base in 2020 one, which is very much in line with the recent imf forecast at 2.8. annmarie: the outlook has been very uncertain. is the procurement of vaccines creating more certainty for you? as the head of a bank, how

does that impact your management of capital? mike: front of mind for everybody has been the procurement of vaccines and looking in on a conversation that just yesterday i heard a statement that i think is true everywhere in the world, that vaccination is the best economic policy for any government anywhere in the world right now. last night, there was a two hour webinar hosted by the minister of health in south africa and not provided a lot more assurance around the extraordinary amount of work that actually has gone into the pure chairman and distribution of vaccines with the country aiming to achieve herd immunity or just over 60% of the population vaccinated by the end of 2021. manus: we are in the midst of a global war on health. all governments are going to have to change and jettison

certain sacred cows, so to speak. do you think that this is a moment for rama pose and the team to really enact reform that society will have to accept post-covid? mike: i think they simply have no choice. the maps of the current trajectory on the fiscal deficit without structural reform just simply does not work. so the government really has no choice but to use this crisis as the moment to stop talking about fiscal reform. we have done a great job of talking about structural reform for many years but we actually have not delivered on it so this has to be the year where we see real progress, in particular on things like infrastructure in general but energy in particular, which has been a binding constraint on the economy as a relief of -- those will be the two litmus tests

this year. annmarie: what would you give the grade thus far, mr. brown, to the south african government's handling of the second virus as well as the distribution of vaccines? mike: i think the government has done a really good job on the virus in general. there are always things that could have been done better but we locked down early with a very hard lockdown which was absolutely the right thing to do. we moved from level five to level four around about june of this year where we tried to regulate the economy almost product by product and then rectify that when we moved to level 3. i think and really difficult circumstances, the government has done a good job. there have been some question marks around things like tobacco and liquor where we could have lifted earlier. in terms of the vaccines, it's relatively early days on the

rollout but we have had lots of calls with government and business over both december and january and there is very strong mobilization around the necessity for vaccine purchases and rollouts and there will be ongoing engagements from business so we can play our part in ensuring that we vaccinate enough people that we can get back to a more normal economy. manus: we are looking around at various things that you as a ceo are going to understand and tell the market. we are looking at the rand. its longest winning streak in 18 years. all in on em trade around the world. it's a big consensus, isn't it? your currency has been on a tear. can you translate that currency move into the flow of money into south africa? what can you tell us this morning about flow to south africa? is it real or hot money?

mike: the rand, as most of your viewers will know, is one of the most liquid emerging market currencies, so generally, what you see over time is when there is either emerging-market risk-on or emerging-market risk-off, the rand overreacts in either direction so while there's been significant strengthening of the rand into the back end of last year, the rand was one of the weakest emerging-market currencies in the first half or quarter of last year and certainly, as we have seen more risk-on globally on the search for yields, we have largely as a consequence of our large fiscal deficit, a very steep yield curve so it's attractive to investors but from our point of view, the flow of money into south africa is still largely in the form of financial assets, bonds and stocks, and not long-term infrastructural

investment, which is what we desperately need. annmarie: thank you so much for joining us from johannesburg this morning. ceo of south africans lender that bank -- nedbank. we need to win the war against the virus says brian moynihan come about economics and stephen ayers. he says he cannot forget the pandemic. >> these dollars could be spent much more precisely. the last case was a good one. unemployment supplement, the $600 under 75,000, those are good items and future stimulus might be like that. otherwise, you get returns and how you pay for it long-term and the issue of whether it creates inflation but there's a lot of savings and we expect a good second half of the year. this is to mistake everyone makes. they talk about the economics and forget there is one simple question, which is that we have to win the war on the virus and

right now, we are going in with a much better situation from a fight in that we have this vaccine and is going into people's arms and that changes the course of this and yes, that is still out there. it's a light at the end of the tunnel that was not here last year he and in the summer. >> looks like from bank of america's point of view, the consumer is doing pretty well so far. at the same time, we had the federal reserve saying they see the recovery as moderating right now. that was the term that they years. what are they looking at? when they say that, what are they looking at, and what might give you some cause for concern? >> of course it is moderating because when he went down so low and came up so quickly, it's now an economy that's about as big as it was in the second quarter of 2018. that's a big economy so course it's not going to grow 30% off of that. that would be unbelievable. it was going to slow down much

more than normal and it would be accentuated by what you would expect. 5% growth, the expectations are pretty high for 2021. manus: that was the bank of america ceo, brian moynihan, speaking to david westin. it is upon us. the world economic forum looking a little bit different this year. virtual. it's the agenda. the world leaders and bloomberg will bring you a piece of the action all the way. do not miss today's lineup. executives for standard chartered, blackrock, and fidelity international join the bloomberg team. this is bloomberg. ♪

annmarie: 6:45 in the city of london. i am annmarie hordern with manus cranny in dubai and we turn our attention to the oil sector. london energy reported fourth-quarter results that beat analysts estimates. joining us is nick walker. very good morning to you. i'm sure you are happy with these results after a tumultuous 2020. i want to start out with where you see oil demand going from here. 20/20, we had these between supply and demand shocks. things have obviously cooled down but what do you see in the short and medium-term in the market? >> it's good that we recovered. our sense is that we should see around this level looking forward but i think when covid is behind us, and of course, it will be at some point, we expect to see lack of investment into the industry through the turmoil, we will see a strong recovery on prices looking forward so i'm pretty optimistic for the oil price looking longer term. manus: with that in mind, does that give you confidence on updating your production this year for 2021?

what kind of numbers are you hoping to put in? do you have any hesitancy in upping production? nick: we have a growing production trajectory and we met or exceeded -- we are at the top end of guidance last year. we guided that. it's a good increment and we will grow our business to over 200,000 barrels a day by 2023, so that is -- that is locked in, but we have very low lifting costs so our operating costs are around three dollars a barrel, so you know, we have got a very resilient business for low prices so during last year with the record low prices, we were able to deliver strong free cash flow around 450 million dollars so of course, we like high prices, but we also like lower prices so a lift in production is what we are about. annmarie: can i get your sense

on where you see the recovery in oil prices? this morning, we traded on brent. how high do you think we could stabilize in 2021? nick: i think that is a good outlook for now. i think once covid is behind us, i have a sense it will be well through 2021 probably into next year before that happens but i think when the world turns back to growth, we could well see a lifting of oil prices but probably not in the near term. it will probably be into next year. manus: as you can tell, she's all about the prices. i'm all about production. to be fair, i think she will get the bigger headlines. but what we do want to know is you have your field so that may go for an attack there. what can you get out of that?

that is one of your major resources. what are the production levels you are going to deliver out of that? nick: it underpins the company. is tremendous. we have seen tremendous performance since the field started up. we lifted production rates, capacity through the facility, three times, and we announced again this morning -- phase one of that is that producing now at 535,000 barrels a day, which is around 100,000 barrels more than the design and we basically got that at a very low cost and phase two is under development at the moment and will come online at the end of 2022, and that will be 720,000 barrels per day. that underpins of course the growth in london's production and that's in the next few years. annmarie: i want to move into your numbers on your

decarbonization strategy, your carbon neutrality for operational emissions. you are cutting that from -- to 2025 and you changed your name. i believe that last time i spoke to you, this was lundin petroleum and you are now london energy. how are you going to cut those five years off when you look at carbon neutrality? nick: we set out a year ago our strategy and it is underpinned by real action. we are electrifying or offshore facilities. over 95% of our reduction will be electrified by 2023. we are investing into renewable energy because we are consuming a lot of electricity and by the end of 2023, we expect to have 100% of our production fueled by renewable energy and what we cannot reduce, we are going to offset with natural carbon capture and we are committed to reforestation projects and with

that and the best performance of moving those projects forward, we were able to accelerate becoming carbon neutral from our operated admissions to 2025 and that will be a first for the upstream oil and gas industry. it is underpinned by real action to achieve that. manus: ok. thank you so much for being with us this morning. that is nick walker, the ceo at london energy. coming up on the show, credit versus the hedge fund. -- redit versus -- reddit versus the hedge fund. we discussed the fallout from gamestop, the saga. this is bloomberg. ♪

manus: it's "daybreak europe." manus cranny in dubai and annmarie hordern in london hq.

main street is beating wall street. a bruising set of losses as traders on reddit banded together to bid up some of the most hated stocks about the battle is not over. joining us now is dani burger. so let's lineup the injuries, the impact of reddit on the hedge fund. take it away. dani: it is claiming more victims. we are seeing all these hedge funds, feelings of pain. hedge funds have deal leveraged at the quickest pace since 2014. what has happened is a lot of these short that's have gotten hit, but it does not just and there -- end there. there is a contagion in the wider market. they are having to sell off some of their longer bets as well. we are seeing the entirety of the market fall. you get numbers like this. in fact, if you look at their european shorts, those all rose

yesterday. point72, down as much as 15%, but let me take you to the next chart to show you what the market action looked like under the hood yesterday and that is one where shorts really rallied a lot. again, this is not just confined to the hedge fund names. this is actually one that's now affecting the entirety of the market. annmarie: i think the question a lot of people are waking up to is how much longer are we going to see this saga play out in the market, this battle? dani: it is by far from over. this is the most call options we have ever seen traded on record yesterday. this is the favorite of the reddit crowd. if you look at the message board yesterday, they were saying do not give up yet. do not throw in the towel. the media reports, those are lies. it's not over. it is still us versus the hedge funds. not only are they jumping into gamestop still, they are also saying, let's look for other

stocks that are like this, that we can have an outsized impact if we buy up these call options. things like amc, nokia. those are extremely popular but to some extent, that is to some extent correct. look at gamestop's short interest. it is barely botched. as of yesterday, still at 140% of shares floated. that means you have shares continually being borrowed and that is how we get about 100% so people are likely jumping in, putting on new shorts on this stock that has skyrocketed so around one of the metal might have gone to reddit, but the war is not over yet. annmarie: very good point. thanks to dani burger. the war is not over yet but what we are seeing in the markets broadly speaking is risk aversion this morning across european and u.s. equity futures. they are right on the screen. stoxx 50 futures, down .8%. the stock is not over when you

look at these companies like gamestop. manus: it's not come at and equipped -- it's not. there is no risk to the system. retail is in a renaissance mode. ♪

anna: welcome to bloomberg markets, "the european open." matt: good morning. today the market to it is a sea of red. global stocks fall further from last week's record. european equity futures point to a negative open after the s&p slumps in new york the most since october. the