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tv   Bloomberg Surveillance  Bloomberg  June 23, 2021 7:00am-8:00am EDT

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♪ >> the fed is not going to kill this recovery lisa: we've got -- this recovery. we've got gdp growth this year and next very strong. >> growth generally peaks about a year into the recovery. that's kind of where we are. >> i don't know that we are going to go back to spending in the same way. i don't know that we will go back to buying the same kinds of things. >> of course the economy is experiencing some friction. we rebooted the global economy. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: from new york city for our audience worldwide, good morning. this is "bloomberg surveillance ," live on tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. equity futures this wednesday morning totally unchanged for the s&p 500, positive 0.01%. a headline crosses from ifx.
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russia firing warning shots near a british ship in the north sea. -- in the black sea. tom: up through istanbul, crimea to the north, bulgaria to the left, and the sprawl of what i will call eurasia to the right. guess what? the ships are bumping into each other over there. jonathan: one more thing to monitor. many people think as we work our way through summer, this summer gets choppy or, and maybe it won't be until september that we resolve some of the issues on the economic side. tom: to take it over from international relations, what we saw in geneva with president biden and mr. bruton come over to the black sea, you are right. it is a total mystery of gdp. every single discussion to a gdp analysis.
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250 dollars of earnings on s&p 500, that goes back to a boom economy analysis. jonathan: to what degree do you think growth will decelerate from 2021 to 2022? lisa: a lot of it has to do with savings. how quickly will they spend this? you started by talking about the russia situation. the geopolitical tension. there's a question of how vulnerable our markets right now to an exogenous shock. based on all of the cash in the financial system and in people's savings account, a lot of people are saving not that fragile. what could potentially shake the market and create that volatility, especially in light of the big shrug the markets gave? jonathan: a total snooze this morning. i will whip through the price action for you stateside. yields higher by a basis point to 1.47 50%.
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movement on dollar-yen through $1.11. it catches your eye, doesn't it? $73 on wti, up 0.75% on crude. lisa: we talk about inflation. what inflation are we talking about, when you see commodity prices this high? restaurant prices have actually increased the most since 2009. a bloomberg story out about this. and people are paying it, going out and spending. tom: stop the show. lisa, nine dollars for a cup of coffee? i saw that yesterday. jonathan: where did you go? tom: -- place, keeper of the a mex. nine dollars for a cup of coffee. continue. lisa: maybe we will get a comment from the host of fed speakers we have today.
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adding to the incredible rounds of fed speak we have gotten this week. there has been a bifurcation on the federal reserve the ones that matter, and perhaps the one that matter most are jay powell and the likes of john williams, taking a very patient and transitory approach to the inflation we are seeing in tom keene's nine dollar coffee. 10:00 a.m., we get u.s.-made new home sales. new home sales have been doing very well. the only question here is what kind of supply is there in terms of lumber prices being as high as they were. they have come down quite a bit, as well as the very high prices keeping certain people out of the market, not wall street firms like blackstone. the u.s. is looking to sell $51 billion of notes. there was less demand for these to your notes as people compare for perhaps the fed to taper, perhaps to hike rates, perhaps as soon as 2023. jonathan: a lot of perhaps
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there. if you are playing the transitory drinking game, you do not get as drunk as you use to. the emphasis has shifted just a bit. lisa: it comes on the heels of the nonvoting members including jim bullard. how much does this actually reflect what will happen for the federal reserve especially because jay powell took a markedly more dovish tone yesterday in his testimony to the house committee? i thought it was interesting to see the shift in tone and the way it is changing. jonathan: julia coronado talked about the chairman going in front of congress, starts speaking for himself a little more than a chairman who goes in front of the presser after an fomc meeting. tom: i just go back to the chairman is making it up as he goes. we forget. jonathan: we don't forget. you tell us every day. but i agree with you. tom: the real yield at -0.86%. i've never framed that until a
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year ago. jonathan: let's bring in brian levitt, invesco global market strategist. what has changed for you, if anything, in the past week? brian: i don't think anything has meaningfully changed. you always tend to see more volatility when there's either some policy uncertainty or some expectation that the fed may bring forward tightening. you got all the usual trappings of that. a flatter yield curve, stronger dollar, cyclicals underperforming. but i'm not surprised also to hear the language of fed chair jay powell. they are committing at going at this gradually. the real unemployment rate is still elevated. the bond market is not signaling substantial inflation, so this is going to be a gradual process. to me it is still the early stages of the cycle and a good backdrop for risk assets. tom: a good backdrop for risk assets, but does domestic go -- does invesco have to shift domestic? brian: i think you will have two
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stories going on. one will be a slowdown in the u.s. economy as we start to move into 2022, and that gets back to favoring technology companies and true growth businesses, and the u.s. does quite well at that. what you are also going to see is more of a recovery start to emerge in the emerging markets part. when you think about the time to buy the united states, it was when things were darkest, and that was of course last march. so similarly in the emerging economies, we are awaiting a better, more sustained vaccine rollout and improvement in the economic activity. so i don't think it is necessarily one of the other, but i do think a slowdown in the united states is going to shift us away from the cyclical parts of the markets to the more growth oriented parts of the market, the technology companies. lisa: i'd what point do some of the inflation or pressures we see, albeit transitory, dampen growth in and of themselves?
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restaurant prices are going up so significantly. the cost for housing, the cost for rents starting to pick up. these are basic expenditures that will perhaps crimp people's willingness to spend in other areas. at what point is this become a headwind to growth? brian: i think it will become a headwind as we move through this year. we've talked bout the pent-up demand and the shift away from buying stuff, going out and enjoying experiences. people are willing to spend on the vacations right now because they haven't done it in so long and the savings rate is so elevated, but at some point that starts to hit, and at some point we will see some sticker shock on some of these experiences we are currently enjoying. i would expect that pent-up demand to start to moderate next year around the same time that the fiscal support will be moderating. we may see a fiscal drag next year, and as we are shifting to experiences, businesses are
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taking time to rebuild inventories. we say we can say transitory anymore. this is a moment in time where we turn on the lightswitch, the consumers are back out, businesses are trying to rebuild inventory and bring back. you see some inflationary pressures that that does start to slow consumption a bit and slow down the economy as we move into next year. jonathan: we asks the question, what do you want to own, the faang's or big tech, gross or cyclicals? -- growth or cyclicals? brian: it is big tech. you had this great recovery trade where the yield curve steepen meaningfully. the fed is keeping rates anchored and lung rates going up from 50 points, i think to a high of 1.75%, which is great for the banks, great for the reflation trade. in order for that to persist, you would have to think that is moving to a new higher sustained level of growth or inflation.
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we are moving from recoveries to expansion. technology starts to rise to the four again, and as you slow down, similar to what we saw in the middle of 2011 for the next call, technology stocks tend to do well in a slower, more stable economic environment. jonathan: i figured that is where you might be. bran levitt, invesco global market strategist. just to update you, this coming from the russian news organization interfax, russian armed forces intercepted a british navy destroyer that violated its border, according to the defense ministry. the u.k. ship was three kilometers into russian waters, and they ignored warnings. tom: and again, it has been busy. i believe we've got the board ready to go of the complexities of the black sea.
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many of the countries around it, you go north into the black sea, and the answer is i believe it is beyond busy. it is extremely busy as these different countries jockey for position, and we all know tension of the western allies in support of ukraine, with 1700 miles of shoreline versus the sensitivity to russia and their taking of crimea a few years ago. jonathan: that's the international political story. let's talk about the domestic and briefly. the counting starts and continues and could continue for weeks in new york city. lisa: the expectation for eric adams to remain in the lead currently, although still a lot of twos, threes, fours, 12 rounds of counting. jonathan: wow. more still to come on bloomberg
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radio and bloomberg tv on that. later on this equity market, mike wilson of morgan stanley. what a timely conversation with the chief u.s. equity strategist. he will be joining us at 8:00 a.m. eastern time. we won't ask the man from morgan stanley about his vaccination status. lisa: yes we will. jonathan: tom might. lisa: we totally will. [laughter] jonathan: futures unchanged. this is bloomberg. ♪ ritika: with the first word news, i'm riddick a good. in a sign of possible easing tensions, topped chinese and american diplomats may meet at age group of 20 -- at a group of 20 meeting. there have been talks about a meeting between chinese foreign minister and the u.s. circuitry of state antony blinken, as well as a possible phone call between residents biden and xi jinping -- between presidents biden and xi jinping. the target of administering one million doses of the covid vaccine in a single day ahead of the tokyo olympics and a general
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election. organizers have dropped plans to sell alcohol at venues. hong kong's pro-democracy newspaper apple daily is to publish its last print edition tomorrow. the paper owned by jailed media tycoon jimmy lai was halted after a new national security law. hsbc holdings has apologized to customers in hong kong after an update to its online and mobile banking terms triggered fears over overseas actors to its services in the financial hub. the policy underscores growing concerns over pressures on businesses as china tightens its grip. evidence includes the recent order for lenders to stop dealing with the pro-democracy paper apple daily. they say it will happen over the
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next six months or so. they say the 13.9% holding in the bank will be sold to a prearranged trading plan. 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. i'm ritika gupta. this is bloomberg. ♪
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♪ >> in the fight for voting rights, this vote was the starting gun, not the finish
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line. make no mistake about it, it will not be the last time that voting rights comes up for a debate in the senate. jonathan: senate majority leader chuck schumer there. good morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. wednesday morning, here's the price action. 4235 on the s&p, unchanged. euro-dollar, $1.1934, unchanged. 10 year yield unchanged. in the commodity market, you do get some change. wti, $73 24 cents. not much price action off the back of this story. i want to bring up the update for you from our team, first reported by interfax news. russia used bombs and gunfire in warning shots against a british navy destroyer in the boxy, according to the defense ministry in moscow. they go on to say, according to the russians themselves, they allege the ship was three
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kilometers, two miles into its waters when the is the -- when the incident occurred. the allies don't recognize crimea as russian territory, so you wonder if that is where the tension is at the moment, that particular space. tom: you look out of the ritz-carlton in istanbul, you turn left and go up 370 six miles northeast of crimea, and you are right, that is where the focus is. the focus is on crimea. i believe the western countries don't even recognize those territorial waters. jonathan: light on detail right now, but that is all we have read it when we get some more, we will bring it to you. tom: let us turn to the battles of new york city and the election of the democrat primary that we have. republicans, i believe four reported there. wendy benjaminson, we interviewed all four republicans in the city of new york, and we are thrilled she could provide
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wisdom today. what i find fascinating here is the comptroller election, where the progressive won. mr. adams appears to go more conservative did this city turn left overnight, or did it not? wendy: it is hard to tell right now because we do have 12 rounds of voting to go through until we know who wins the mayor's race, and eric adams is not a stepping stone, but certainly progressive's had a good night and the lower level seats. they still don't have a big win in any of the major seats. mayor of a big city or governorships or things like that yet. tom: there are 51 council seats covered by term limits. what i find fascinating, and maybe this is the dynamics of american democracy, new mayor and a hugely new city council as well, and to get to the political lines and particularly what mr. adams said, this
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appears to be new. are we going to see that nationwide in every city. wendy: it will be really interesting to see how the country comes out of the pandemic politically, if they are ready to cast off the old and seek something new. we will know in the 22 92 midterms first -- the 2022 midterms for certain and races later this year, but it is hard to tell right now. may be country is ready for something new after a rotten 2020. lisa: meanwhile, the next runner-up wiley got north of 20%. how could she end up being the winner should these additional 11 rounds of counting take place? wendy: so now i've got to explained ranked choice voting. [laughter] it is very complicated, but essentially, in the next round, all of the people who were below a certain percentage last night are going to be eliminated. the second choice that those
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voters of, say, ray mcguire, whatever their second choice was will now be distributed. so if someone voted for ray mcguire and then voted for wiley at the second choice, mile wiley gets those votes. it is possible even with a nine point lead that eric adams has that they could in 12 rounds of doing this catch up. lisa: what do people think in terms of when we will know and who will be the ultimate winner? wendy: the board of elections says the latest we will know is july 12, which is weeks from now. we will have another announcement x tuesday and another announcement following that. it is very rare that the first night winner doesn't ultimately win, so eric adams is heavily favored to win. lisa: tom, i know you have a pressing question here, but is there a precedent for this. we have not seen rank of ownership in the same kind of
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way in a mass scale quite like this before, have we? wendy: no, this is the biggest race to be conducted with ranked choice voting. we had primaries in new england i believe, and lower races in new york city like city council, but not something as big as new york city mayor now. tom: crosby, stills, nash and young 50th anniversary, deja vu remastered, it is phenomenal. let's go back there right now. axios publishes moments ago large city homicides 30% on average. are we on the edge of a sony and 19 6 -- a nixonian 1968, law & order? wendy: eric adams is for the new version of stop and frisk. he was to bring back plainclothes anti-crime task force, which was suspected of using excessive force come about democrats are calling for redirecting funds to social services, so he is certainly a tough on crime democrat, which i haven't seen in some time.
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jonathan: some of the numbers, shooting incidents up 64% in 2021 over the same time last year. hate crimes more than doubled according to nypd statistics. tom: i'm going to defer to lisa abramowicz. is it safe to say the sirens never stop? lisa: of course, but that's always the way it's been. having grown up in the city in the 1980's, i will just say -- ok, you can complain after the show. tom: hold on. lisa: honestly, this is not the same city as back in the 1980's or the 1970's. people are concerned we are going to go back to that, but that was another era of burning trash heaps and gunfights that were very different in nature than what we see today. just putting that on the record. jonathan: i don't mean to interrupt. those are phrases you lean on to cut through people. do you notice how i don't have one?
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tom: the ferro charm school. [laughter] jonathan: coming up next, mark cabana, bank of america head of u.s. rates strategy. yields unchanged at 1.4666%. tom: wendy benjaminson is looking at this going, is this what it is like every morning? jonathan: she can't wait to run out of the city of -- the studio. lisa: so can i. jonathan: this total 180 has been pretty remarkable. lisa: this idea that suddenly people thought we were going into a disinflationary environment with a more hawkish fed, then everybody took a deep earth and said, maybe not. they are still patient -- deep breath and said, maybe not. they are still patient. jonathan: euro-dollar unchanged. tom: yen 111 is a big deal to me. weaker yen. jp morgan has it out to a stunning member.
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jonathan: we just yen since march 2020. the currency pair is the highest since march of last year. all right? [laughter] from new york, this is bloomberg. tom: hold on. ♪ ♪
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jonathan: live on tv and radio from new york city, for our audience worldwide, this is "bloomberg surveillance." down about four on the s&p, negative almost 0.1%. the russell and the small caps underperforming, down by about 0.3%. we will touch on the individual movers in just a moment. 1.5 zero 70% at the high-end of the 10 year. right now, 1.4683%, up i not even a basis point. your 30 year advancing. the likes of him ezra looking to put that back on. outside of the bond market and into the fx market -- thank you,
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tom. i'm also pleased notice because you watched for what to watch for yesterday. dollar-yen out to 111 briefly, the highest since march 2020. i'm winding you up now. a weaker japanese yen. in our survey, we are looking for 109. right now, 110.93. tom: really advocating a stronger dollar as well. jonathan: it is good to be back, day two. time really flying. there are the movers with taylor riggs. taylor: i hear bitcoin never closes, but we got a close if you will come above $30,000 yesterday. you saw an advance of some of those bitcoin related docs, and some of that continues this
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morning and premarket trading. coinbase is the one we talk about with that direct listing. we are at peak hype cycle when it comes to some of these bitcoin related direct listings, so shares of some of those bitcoin related stocks are ones we are following let's go to the smaller cap space. gemini therapeutics, this is a company that announced initial data from a study related to macular degeneration. this stock is exactly what is happening, saying the stock >> you -- the stock reaction is overdone. this stock takes a breather this morning, but clover health and others that were up 5, 10, 12% yesterday, those rally this morning. finally, microsoft. let's do a $2 trillion valuation .
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206 $25 nine and nine cents is the number $265.99 is the number we are looking at right now -- $265 90 nine cents is the number we are looking at right now. tom: mark cabana rights exceptionally -- part two -- mark cabana writes exceptionally detailed notes. what i want to understand is your dynamic moving to a lesser negative, higher real yield. is it sudden? is it a jump condition, or will it grind ever higher? mark: we anticipate that real yields will be moving higher in a more gradual manner over the second half of the year. it is largely a reelection of two things. one is a shift in fed policy, which we heard a bit of last week. the second is the market realizing that the fed's influence in that space is going to wane.
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we believe the fed has had a disproportional impact on the tips market, and suppressing real rates. as the fed marches towards taper later in the year, we anticipate seeing real rates rise. we believe that move will be most concentrated at the five-year point, where the fed footprint has been the largest, so it is going to be consistent with a fed that is dying on the extent of the accommodation it is providing, and that is going to be a modest headwind for financial conditions more broadly. tom: i look at where we are on yields right now. we have had a reset. your research note shows that we've had a reset. how long do you have to wait to see the action you describe now? is it going to be steady as we go for a number of weeks or months and then boom, or do you really look for some action here in july? mark: we seek it will take lace over a couple of months, and it will take incoming data to validate this theme of ongoing
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substantial progress the fed is looking for, and it is going to require the fed's general shift in tone to be evidence of a continue to move away from this resolutely patient stance they've had. so we are not looking for a big jump in rates at any point soon. we certainly think tremendous demand and the bond market over the whole second quarter, and we aren't is abating it is going to be warm a slow grind higher, both in real rates and nominal's. but we really think real rates are going to be able to move in the second half of the year. lisa: when we start talking about monetary policy theory, people's eyes glaze over, yet they don't when you talk about housing prices, about a 24% increase in the average price of a u.s. home. there is a question about how much the fed is behind as they continue to buy mortgage debt, despite the incredibly low rates and incredibly hot housing market. will this be the first target of some sort of taper, and could
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you see this being accelerated as housing prices and? -- prices increase? mark: we know this has gotten attention among fed officials. we don't know how the discussion has evolved quite yet on asset purchases. we are likely going to need to wait until a few weeks time. we can assume that there are certainly some that have advocated for the buying of mortgages and mortgage bonds versus treasury bonds. in our base case, we anticipate that the fed will allow for a proportional big trees -- proportional decrease next year, and that they are going to reduce the amount of buying in both of those asset classes similarly. but i would say that the risks are skewing, and may be allowing treasuries to last for a little bit longer. because as you rightly suggest, the fed recognizes what is happening and financial
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conditions. they are well aware of the very rapid increase in home prices, and they don't want to necessarily be stoking a potential bubble in home prices. so they are conscious of that, and there certainly are risks that they ultimately end up filing back in the mortgage space more than they do in the treasury market. lisa: we have seen mortgage debt underperform recently as a result of some of these comments out of the federal reserve. using that is appropriate? do you expect this underperformance to continue as the fed edifies this, that they will begin tapering mortgages perhaps sooner than their treasury purchases? mark: we think it is going to be an ongoing headwind to reduce support from one of the biggest hires in the market. the fed and private commercial banks right now. we do anticipate that the market will begin to price in that it is going to have a smaller foot in that market.
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it is important to note that mortgage spreads are quite tight , so in some ways this is a bit of a healthy market development. you can certainly make a case that the fed footprint in the mortgage market has been too large, and that reducing that footprint will allow for the market to potentially function a bit at her than it has been because it is going to allow more room for some of those private commercial banks to step in and get more of what they have been looking for. tom: tell me what a rates guy thinks about the market right now. i think intellectually, whatever buddy once is to get a real yield that is tangible. what does it equities? mark: it is going to be a modest headwind. higher real rates are going to be leaning against financial conditions, and it is going to perhaps take some of the recent frothiness or exuberance out of that market. i don't think the fed would see that as particularly problematic. what they want to avoid is a
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real sharp tightening in financial conditions that ends up weighing on confidence, weighing on business sentiment, and weigh in on the consumer. but i think what they are hoping for, and there's a great hope for them, the process can move a bit more gradually, where you see real rates move higher, and that can maybe take some of the air out of the equity markets. but what they don't want to do is take dram. jonathan: what is the scenario you are right about, the taper tantrum of 2013, or something closer to december 2018? mark: we think that in many ways, we have already had the taper tantrum in q1. that was a very rapid rate move, and one in which price action was gappy at times. we are not sure we will see some
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thing similar to that today. what we do anticipate is that rates are going to move higher and likely in a slowing gradual manner as a result of all of the demand we have recently seen. demand is very strong from the asset management community. we don't necessarily think it is going to go away anytime soon. what we do anticipate is that ongoing improvements in iconic fundamentals will allow for a steeper path of fed policy, for rates to increase, and we do and has made it somewhat gradually over time. when you look at the levels on tens right now, we don't think they are consistent with economic fundamentals, but it is consistent with some of the very strong long and demand that we have seen and that we continue to hear about from our clients. jonathan: we have been saying it consistently for some time now. tom, you asked an important question, what does the rates story mean for the equity market. here's one to ponder. what do higher real rates mean
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for growth equities? think about that for a moment. if higher rates start to choke off cyclical growth, what does that mean for equities? tom: the word that is used within the mass, and frankly within finance, is ambiguities. the answer is it can push either way, and the gloom crew loves to jump on it. mark alluded to that, that there would be headwind here to equities. but there is a whole other side of the coin where normalization of rates back to something that we would call normal is hugely bullish for capitalism and for the system. jonathan: what is normal with the world of zero? tom: there's nothing normal. we got to exit that. lisa: there's a question of whether the signals we are getting, particularly when it comes to long-term inflation, are somewhat manipulated by the zero rate environment we are in
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over the next five to 10 years. jonathan: it's been like this for long enough that maybe this is normal. coming up, james sweeney, credit suisse chief economist. equity futures down two. heard on bloomberg radio, seen on bloomberg tv, for our audience worldwide, this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. senate republicans want democrats -- republicans blocked democrats' election overhaul. the bill failed to advance on a 50-50 partyline vote, short of the 60 needed to overturn a filibuster. there may soon be more travel options for britain. boris johnson's government is preparing to allow those who have been fully vaccinated against covid-19 to travel to more than 150 countries without the need to quarantine upon their return to england.
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popular europe and u.s. destinations would be included. the changes are unlikely to come before august. the u.k. government is set to consult on new rules for on-demand video providers. streaming content from the bbc is subject to a code overseas. the u.k. will also consider selling data on channels for television. glaxosmithkline says it will carve out its consumer unit via a spinoff and cut its dividend by about 30%. in a statement, glaxo says it will list the unit in mid-2022 on the london stock exchange, part of a strategy set out to sharpen the company's focus on developing drugs for cancer, hiv, and other diseases. the wait time for semiconductors has had a record of 18 weeks, thinking industries from auto, makers -- from automakers to
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consumer electronics. it is up seven days from the previous months. 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. i'm ritika gupta. this is bloomberg. ♪
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>> i look at bitcoin in particular as digital gold, so
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if you're going to belong gold, bitcoin is a better version because it's got the same metro -- same macro tailwinds, but is also very early in the adoption curve. now hedge funds are ok with it. real money managers are ok with it. insurance companies ok with it. you are playing an adoption game and playing a macro game, so i am still a big buyer of bitcoin. jonathan: that was mike novogratz, the galaxy digital ceo and chairman. at the low yesterday, $28,000. just sort of $34,000 now. alongside tom keene and lisa abramowicz, i'm jonathan ferro. getting you set up for the price i can this wednesday -- for the price action this wednesday. in the fx market, euro stronger. euro-dollar moving by about 0.1%. crude holding onto the $73
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handle. tom: we will watch that carefully, particularly off of the news in crimea and the black sea. right now, david wilson on the equity markets. what have you got? dave: talking about google's alphabet. it's two classes of shares in the s&p 500 that have kind of diverged from one another. you would think that people would pay for the right to vote. you would be wrong. in fact, the nonvoting shares of alphabet, class c, have become more valuable. they have performed better this year than the voting class a stock, and that plunge you see in the last couple of months is the value of the class a, so the voting rights that go along with that stock are really worth less than zero at this point. tom: is this just so the principals of google get to
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control the company? dave: that has been the case all along, which is what makes this interesting. the voting shares have traditionally cost more. there's been an average premium of 1.3% since the nonvoting stock was created in 2014. that has turned around. all along, larry page and the cofounders of google have maintained majority voting control, so it is not like that has really changed. trading is pretty much the same. what has changed is it is the relationship between these two classes of shares, and you almost wonder if it is in some kind of a rationality in the market that has separated them. tom: dave wilson, thank you so much. for the news on the black sea, we go to moscow's greg white.
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why is moscow threatened by allied ships in the lexie -- in the black sea? greg: this is right near the big russian base for the fleet and the black sea. it happened around noon time. the russians claim crimea after the extended conflict with ukraine. the u.s. and its allies don't accept that, so there's tensions there, and the russians warned not to trespass in the area. tom: the stereotype is the black sea is a very busy see, with geopolitical tensions. is that true from your reporting and your experience? is the black sea over shipped, if you will? greg: there's a lot of action there, but certainly this is not an issue of congestion or they
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diverted here because they needed to get someplace faster. there are contested waters here, so the nato allies and russians are playing this cat enough game for decades, going back to the soviet era. this looks like a bit of an escalation from previous ones. the u.s. accused the russians, of a destroyer of him into close to them. this time russia says they used fire from cannons on the border control ship, which certainly isn't something we have seen in a long time. lisa: there's a question of whether this kata and mouse game -- this cat and mouse game matters. is the market correct in shrugging it off and saying it is pretty much par for the course? greg: at this stage we have not heard from the british side at
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all on this. so far the only account we've had is from the russian side, so we have to take that into account as we try to assess what happened. this is certainly an escalation, but there are lots of these tensions along the border, things like that. the market i think it's pretty cautious about this stuff. we are not talking about direct combat. the whole thing only lasted about half an hour. it is not clear where it will go from there. it does suggest a sort of volatility of having all of this military hardware includes proximate he come about the same time, it can go for decades. tom: my book of the summer is "2034," where ships are bumping into each other and the south china sea, and in the fictional plot, bad things happen. is there a basic premise here that ships bouncing into each other, bad things can happen? greg: certainly there is an
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element of that, but the british sent this destroyer there to send a message. it seems highly unlikely that they would have entered what the russians claim our territorial waters without trying to send a signal. so i think it is a bit of that, but certainly it is a crowded see and there's an awful lot of traffic for oil and grain and all sorts of other stuff that comes out of russia. but this is more about a cold style cat and mouse game to see how far each side will go. jonathan: greg white, great to catch up. talking about it so casually, aren't we, tom? about russia, the united states, the u.k. that story a year or so ago, that the russian jet did that inverted maneuver. did you like that? tom: of course, there were the arguments about syria and the
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mediterranean. the hand motions on radio really work. jonathan: that's why i did it. tom: i look at these events, and i just try to put it in historical context, which is, as greg just said, he's the expert, he said there's a lot of ships floating around over there. lisa: history has changed, the. is the threat cannons, or is it cybersecurity? what do markets respond to more? i would argue they respond much more to cybersecurity, not necessarily cannons in the black sea. that is telling in terms of the market response. jonathan: inverted. there you go. tom: are you doing the shadow thing? [laughter] on radio, i am doing the wingy shadow thing off the back wall. there it is. jonathan: that's good. thank you. tom: there's the rabbit. lisa: oh my god, tom oh my god
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-- oh my god, tom. tom: lisa, don't talk over me. [laughter] jonathan: heard on bloomberg radio, seen on bloomberg tv, lisa does that a lot. [laughter] tom: she's out of control.
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>> i'm not surprised also to hear the language of fed chair jay powell. they are committed to going at this gradually. >> i think more surprising in the market was hearing taper talks start. >> growth generally peaks about a year into the recovery. that is kind of where we are. >> whether it is fiscally or consumption, there is really nothing we see out there right now. >> of course the economy is experiencin some friction. we rebooted the global economy. tom: good morning,

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