welcome to bloomberg's commodities edge. let's get right to the data dig, the top market stories of the week. oil prices came under pressure after that inventory report. the bearish indicator was in the product build. one million barrels of gasoline stocks. demand plummeted from a record. it is supposed to be the busy driving season. inflation was all the talk this week. one area where we see softness, lumber prices. they have erase the gains from this year. where the bottom is, we will have to wait for big players to step into the market and buy, but it reinforces the thesis that parts of inflation can be transitory. copper prices are high. demand in china is raising question. this is a chart showing copper

imports. it felt for a third straight month in june, 428,000 tons. manufacturing growth is slowing and high prices could be denting that demand. europe ramps up its fight with carbon. reducing emissions by 55% by 2030 and neutral continent by 2050. one of the architects of the plan, frans timmermans, outlined that tough road ahead. >> we still have a lot of convincing to do of member states. if we can get them to agree with us, we can meet the goals. alix: joining us now is our green reporter. lots of stuff in this plan. what is the most significant part to you? >> the biggest difference you'll see is in carbon prices. the european trading emissions

system was laughed at when it launched. it has really come into its own. prices are at 55 euros a ton now. they are going to rise rapidly. the eu will expand that, not just cover the industries it covers now but also include airlines, shipping, which should make a dent in the emissions and lead to a higher carbon price. alix: within the actual borders of the eu, what was most significant? akshat: one thing we need to realize, this plan comes with a mechanism called a carbon mechanism, a carbon tariff. if you are exporting into the eu and you are doing it from a carbon intensive country, then

you will have to pay a price that domestic european countries are currently paying. that will be a hefty price, which the eu will need to have a conversation with countries like china, russia, and the u.s. alix: that will have implications outside of the eu. was there something else that would affect the u.s., china, russia? akshat: apart from the carbon tariff itself, we will see the eu push on technology. renewables are already one of the sources -- cheapest sources of energy there is, but the eu is pushing hard on green hydrogen, sustainable aviation fuels, steel and cement. that could have an impact across the globe because technology drivers across borders quickly. alix: appreciated, action rocky

-- akshat rathi. today, we are talking to kate and alan. i want to look at how oil companies are trying to turn green. in the beginning, it was big oil, shallow, bp trying to reduce their dependence on oil production. and it was the exploration and production companies, like devon. it is planning to cut emissions from its oil production and the power it uses as a company by 50% by 2030, 65% by 2030. devon joins peers like occidental in trying to tackle climate change. now come the oil services companies. schlumberger recently unveiled its ambitious plan to zero out its greenhouse gas emissions by 2050. they are tackling scope three emissions, which comes from the use of its products.

think fuels from cars, planes, factories. those admissions are typically hard to fix and usually avoided. schlumberger will cut those by 30%. i recently spoke to caitlin allen. i asked about some of the biggest shifts in the last five years as all types of oil companies try to go green. >> we have seen a shift in capex spend from exploration to low carbon businesses. i would say that is pretty distinct. alix: does the trend the last? >> i believe it will. for a lot of those reasons, just organic, the fundamentals of oil and gas in north america, the shale model is more of a develop it of an existing acid-base -- acid-base. -- asset base.

not just related to this low carbon stuff but also some of the underlying fundamentals of how these businesses are run. alix: there is increasing pressure for oral companies to recognize scope three emissions. is that realistic? >> when companies talk about reducing goals for scope three emissions, they are talking about changing their product mix. there is no other way to do that at this point. there are potential unintended consequences there unless we have an economy-wide carbon pricing mechanism that is formalized. i think there is some danger there. in effect, those just become somebody else's emissions. alix: is that the high hanging fruit? what is the low hanging fruit that has not yet been tackled? kaitlyn: everyone can increase

energy efficiency. that is the first step, increasing efficiency in our operations. we are seeing a lot of electric creation -- electrification of the oilfield. replacing diesel generators with solar panels, tying into highline power, a lot of experience going on with how to reduce the combustion at the wellsite. i do think in pressures -- compressors are one barrier to getting there. certain things just take a lot of energy to do. i think there will be a lot of innovation in that space, also opportunities for energy service companies, to provide the solutions to help customers meet those goals. alix: if you were to highlight one thing that will really take off and develop over the next five years, what would it be? kaitlyn: we are hearing so much about hydrogen.

we know it is very expensive now compared to what folks are betting it will be. we are hearing so much about hydrogen as being a very important part of the energy mix going forward. i would also say there's a lot of buzz about nuclear. the new generation of nuclear is far more safe than a lot of the current plants that were built on slide rules in the 1960's. there has been so much innovation in that space as well, although you don't see the money come in my opinion, chasing as quickly as you do the hydrogen equation. lots of talk about geothermal in texas. we have all of these things sitting there emitting methane. why are we not going to use that existing infrastructure? you have the right depth and temperature, you could put in a

geothermal system and start generating renewable power. we are seeing those types of conversations. also investments and innovations. bp just backed eavr technologies, one of these companies doing these systems, these take anywhere systems. there is some exciting stuff happening in that space. alix: time now for our commodity kicker. reel this in. goldfish are wreaking havoc on local ecosystems. a city in minnesota issued a plea to tell residents to stop putting the house pets into lakes because they are damaging the water quality and uprooting plants. the problem is not cheap. washington state had to spend $150,000 to rehabilitate a lake so overrun by goldfish it was affecting the other populations.

officials have issued similar warnings in australia. goldfish can be catfish when it comes to local ecosystems. that does it for bloomberg's commodities edge. this is bloomberg. ♪

kailey: welcome to bloomberg markets. i'm kailey leinz. in a few moments, we will break down the response to fed chair jay powell's testimony on capitol hill, and we will hear from ceos, on everything from

the cannabis industry to fitness to hotels. irwin simon, adam gilchrist will be joining us. let's get a quick check on the markets. it is a risk off day in the markets. the s&p 500 and nasdaq 100 are lower. big tech is underperforming today. the nasdaq 100 index down by .9%. in the bond market, yields are continue to inch lower as jerome powell stuck with his transitory messaging. the 10-year yield down three basis points. i also want to point to oil. wti is down 1%, after falling 3% yesterday. it all comes down to the supply and the prospect that opec-plus will increase output as a deal with the uae seems to be getting closer. shares of morgan stanley in positive territory only by .1%, session highs behind it

second-most profitable quarter on record. let's get back to fed chairman jerome powell, once again defending the central bank's support of the u.s. economy. he repeatedly said the fed's view of inflation is temporary, when he faced u.s. senators were day two of his testimony to congress. >> this is a shock going through the system associated with reopening the economy, and is driven inflation well above 2%. of course we are not comfortable with that. this particular inflation is unique in history. we don't have another example of the last time we opened a $20 trillion economy. we are trying to understand the base case and the risks. kailey: joining us now is diane swonk, grant thornton chief economist. he is sticking to the party line, but is this the party line? jerome powell saying this is transitory but jim bullard telling bloomberg earlier today it is time to taper.

is there agreement within the fed right now? diane: no, i think you'll see debate get heated, and this is where powell's challenge will come, especially into the summer and fall. once we get into 2022, voting members, those presidents will take voting positions and will be dominated by people who penciled in 2022 rate hikes. this debate about tapering and when to do liftoff on rates will heat up in the fed, and that is fair enough. what chairman powell has laid out is he thinks this is a level shift up in wages and inflation, and then we will settle down after we do that level shift up. it will be transitory, but if he is wrong, he says it will be transitory either way because we will deal with it. his timeframe has become more clear in all of this. through the end of the year, they'll be watching things

closely. if you don't see a change in momentum out there through the end of the year, that will make the fed act much more aggressively in 2022. kailey: when you say the fed will be watching things closely, what will they be watching? he was asked yesterday, what will you be looking for? he said it was hard to be specific, so what is it? diane: everything and anything. it is important they are watching the components of inflation that are picking up, and those seem to be related to the pandemic. he notes airfares, rental cars, hotel room rates. used vehicles, they plummeted in price a year ago and then everybody bought up vehicles. we had a chip shortage, bottleneck. he is looking at all of those aspects of inflation but also where inflation are seeing the biggest gains. it is interesting he said low-wage workers are getting a little more, we should be happy about that.

the other side of that, which is important for the fed to be watching closely as well, is that large companies that have been able to leverage the acceleration in technology we have seen, the move to online, productivity enhancing things, those companies are paying the most. small businesses and restaurants that got hammered in the pandemic cannot compete. that is something that fed policy has to deal with, and he has to watch that as well. kailey: we got the nfib report earlier this week and more than a third of them said that they have to raise wages. do you expect those pressures to grow in the months ahead? diane: with chairman powell i am in agreement, as we open schools, get them fully reopen, we will see more labor force show up and participate. whatever your feelings are on the unemployment supplements,

they are going away. a lot of factors will bring people back into the labor force. there are a lot of people who have left those old low-wage jobs forever -- i think the chairman is right about that -- and there are a lot of people getting education. i think we will see wage pressures persist through the year, but after they move off, do we see continued upward momentum in 2022? without that cycle, you cannot get the kind of vicious cycle in inflation that many are worried about. kailey: you mention unemployment benefits. i did not envy jerome powell over the last few days trying to dodge questions around fiscal policy. they kept coming back to those issues. diane: he is an artful dodger. kailey: he is obviously in a different position from where you are. as an economist looking at the fiscal equation, do you think it is leading to problems in the

economy, that it is helping to fuel some of this labor shortage? diane: no question, we more than filled the hole left by covid with the most recent round of stimulus. it is helping the u.s. economy to roar back. that is not a bad thing, but there is also heat and fire, and that is where you are seeing inflation. much of what we see in the pipeline today, where we stand at this moment, ends at the end of 2021. that is something that is pulled out of the equation, and in fact, we have not spent all of that which was allocated. some of that money they are trying to put toward infrastructure. i don't think right now we are in that position, but you could see a situation where additional fiscal stimulus, depending on the composition of it -- infrastructure, that is not

something you should be worried about paying for. you should be borrowing at low interest rates for productivity growth. but a lot of this is also spending and going directly into consumption. as much as it is needed, we need to pay for it. the elephant in the room, and i was a budget hawk with chairman powell, i met him in 2010. the issue in the room is social security and medicare. no one is talking about how we deal with those longer-term. kailey: president biden talking about the child tax credit, trying to tout that. how much of a difference will be see what was enacted today make a difference? diane: what we are seeing paid out right now is on norma's amounts of money to people with children. it will be helpful to them, no question about that. but it is only six months.

it will and at the end of the year. it is allowing people to get childcare, could help them to get back into the labor market. i think that is important, and it is expensive to have children, and to deal with this extraordinary period we have gone through. that said, it ends at the end of the year. what is interesting about this, we will get a real window from those six months of how it changes or doesn't change the economic equation for people. and when it disappears, what does that mean? that will give us much-needed information on how to conduct policy going forward. kailey: i wish we had more time, but thank you for your insight, dance walk -- diane swonk. this is bloomberg. ♪

kailey: this is bloomberg markets. i'm kailey leinz. it is time for the bloomberg business flash, a look at the biggest business stories in the news right now. applications for u.s. on employment fell to a fresh pandemic low. jobless claims decreased to 363, 00. 0. initial claims remain above pre-pandemic levels. leslie wexner is unloading $745 million in l brand stocks. that brings his stock sales in the apparel group he found it to $1.2 billion this year. shares have soared more than 700% since hitting a five-year low in 2020. wexner retired last year.

the amount of available retail space in manhattan jumped to another record. the availability rate rose to 28% in the second quarter, the highest in 10 years. asking rents fell by an average 9% from a year earlier in manhattan's major shopping areas. i can tell you the area around bloomberg headquarters, there are a lot of empty storefronts. that is your business flash update. now do something that caught my eye today. shortages in the supply chain have been well documented, and you can add another thing to that list, wooden pallets. soaring lumber costs have turned the once mundane shipping tool into a very hot commodity. even lumber futures have plunged 44% in june, but pallet prices keep rising. the category has risen for 13 straight months, jumping 31% this year.

another pocket of the economy where you are seeing some serious inflation. speaking of, that is an equation the market is continuing to look at. snp right at session lows right now -- s&p right at session lows right now. down five basis points on 30-year. a bid coming into the longer end of the curve. discussing the way forward on cannabis legislation on capitol hill with the ceo of tilray, irwin simon. stay with us. this is bloomberg. ♪

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mark: i'm mark crumpton with bloomberg first word news. torrential rain in two western states in germany has caused

severe flooding which has caused -- killed more than 40 people. the disaster has affected mobile service and internet connections, and one power provider says around 190,000 people in germany are without electricity. jeff bezos' blue origin picked an 18-year-old student to fly to space with the founder and to others next week on the company's first mission. the company says oliver will be the youngest person to fly to space. an anonymous bidder who agreed to pay $28 million for the seat is said to have a scheduling conflict and will fly later. the newly minted ceo of one of the largest alternative management firms sat down with jason kelly to discuss his vision for the investing powerhouse, pushing the firm into new markets, and apollo's role in shaping the landscape.

he also mentioned to of the three cofounders, leon black, who was forced to step down for his association with jeffrey epstein, and josh harris. >> we are in the process of a generational shift. we have now done the entirety of the generational shift. that means governance, that means one share, one vote, and that also means leon stepping down and josh stepping back on closure of the deal. mark: in the last year, apollo sought record profits, hired 300 people remotely, and had fewer employees leave the firm. global news 24 hours a day, on-air, and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. ♪

amanda: i'm amanda lang. welcome to bloomberg markets. kailey: i'm kailey leinz. we welcome our bloomberg and bnn bloomberg audiences. here are the top stories we are following for you from around the world. we will have more of that exclusive conversation with apollo cofounder mark rowen. his vision for the future of the investment giant. draft legislation to federally decriminalize cannabis in the u.s. is facing tough. we discuss the impacts of the bill with the ceo of tilray, irwin simon. and the group fitness class back by mark wahlberg starts trading on the new york stock exchange. we will speak to ceo adam gilchrist. amanda: we are watching the markets in the u.s. broadly

speaking. a little bit soft today. strength is from utilities and financials. energy and tech not helping at all. the nasdaq gathering momentum to the downside. the 10-year at 1.3, so keeping our eyes on the yield but it does not explain why financials are doing so well today. morgan stanley with pretty solid investment banking quarters. one group to keep an eye on in the news because of u.s. lawmakers, cannabis groups. many have waited for the day when legalization across the u.s. would change the story for a lot of these players. here is your look at the etf that captures some of these players. certainly not back to the high levels that we have seen in the past, in terms of where these stocks have treated. that is despite the fact that for the first time you have draft legislation on the table.

one potential reason keeping these in check, one of the drafters of the legislation, senator schumer, sounds a little iffy on the way to get it done. >> we are releasing draft legislation to end the federal prohibition on cannabis. this is monumental. at long last, we are taking steps in the senate to right the wrongs of the failed war on drugs. amanda: we welcome now the chair and ceo of tilray. as senator schumer said, a step to righting the wrongs. for your company, this is also a huge opportunity. i want your perspective on where you think we are, from this moment to actually legalized federal legislation in the u.s.? irwin: at the beginning of our

last piece, you talked about us being in the second inning. at least there is a game going on here, and there is draft legislation in place by three respected senior senators. that is a great point to be at. there is still a lot of work to do to get this through legislation, but i would agree with you, we are in the second or third inning. but there are nine innings in a game, six more to go through. as i said, there is no reason they should not draft legislation to legalize cannabis in the u.s. 90% of americans want this. cannabis is legal, whether medical or adult use, and over 37 states. voters are telling their senators and congressmen and women what they want, so why are we not listening? kailey: even if voters want

this, still a question of whether it will go through a senate that is deeply divided on party lines. how does that affect your growth trajectory? what would it look like if there was decriminalization, what does it look like without it? irwin: with it, it opens you up to the biggest market, $100 billion market. canada is a great country, but 30 million people, $365 million. europe, only million dollars were medical is. it really allows you to grow in that market. what i wanted to build with tilray is the largest sumer package business around cannabis, adult use, drinks, medical. if it doesn't happen, i have to stick to the current day plan, wrote to a 30% market share in canada, which is over a billion dollars, to grow the european

business on the medical side, hope that countries like portugal and germany and israel and other countries will legalize. what i am looking at in the u.s. are our broken coast brand, a strong canadian brand, we have taken it and brought it to the u.s. with our sweetwater beer, we are now selling ipa that has cbd and we want to expand into other categories. amanda: let me ask you, it does appear that legalization could come with new scrutiny, including fda scrutiny, which would be a game changer for some products, which have kinda flown under the radar in a way. how worrisome would it be to have that kind of scientific scrutiny on products? irwin: the fda, u.s. today

approves a lot of things through labeling. it is important because it would entrust consumers that it has gone through regulatory approval. with that, you move away from the illicit market. you know that you are buying something safe. in regards to medical cannabis, consumers and patients feel it is safe to use because it's been approved by the fda. but whenever we need to do to get it approved and legalized, be able to get the bank act approved, i think is important to do. there is so much confusion out there today, so much unknown. i hear all the time, isn't cannabis legal in the u.s.? not from the federal but in all of these states. it is all of these tax dollars. i walked down the street in new york, i smell cannabis on a regular basis. it is not being bought in retail outlets today. kailey: it has been over two

months since you completed your merger with aphria. how is that going? irwin: it is going well. like any acquisition or integration, it ultimately has its challenges, but i have to say i am proud of the team, both from the tilray and aphria side, great management teams working alongside myself. the cultures have come together, the morale is good, the energy is good. to date, we have achieved close to $35 million in u.s. synergies. remember, the canadian market has been closed since november in regards to stores. the european market has been closed. doing this, integrating, not being able to get out to markets, facilities and meet people, has been tough. amanda: great to have you with us today. appreciate it.

irwin simon is the ceo of tilray. thank you. for what it is worth, these ongoing bull markets have drawn more and more investors into passive funds, etf's. what makes them so interesting is that some of the biggest money managers in the world -- if you cannot beat them, join them. they are offering etf's. it is amazing to see the actual numbers behind it. kailey: it is crazy. only seven months into 2021. we look to set the record amount of money coming into etf's. i wonder how much has to do with the star power of kathy would and the impact she has had on the -- wood and the impact she has had on the industry.

coming up, we will hear from the apollo cofounder and newly minted ceo mark rowen. his vision for the investment powerhouse, next. this is bloomberg. ♪

kailey: this is bloomberg markets. i'm kailey leinz. with amanda lang. i want to check on the market action because we are around session lows. the nasdaq 100 off more than 1% at this point heading for its workstations -- worst day since june 3. the bond market also around session lows with the 10-year yield. 1.3 percent.

dovishness coming out of jerome powell may be to do with that. now to one of the world's largest alternative management firms. they have seen their profits searching new highs in the pandemic. apollo global management says it has managed to achieve those gains despite a noisy year. ceo marc rowan spoke to jason kelly about the nature of the private equity business. >> it will continue to be a hugely important business, a massive source of profits for ourselves and clients. as important, a massive source of intellectual capital. it is not the same growth trajectory as some of the other businesses, nor should it be. at the end of the day, we serve clients. our job is to provide them excess return. excepting more capital in excess

of the opportunities available just makes returns go down. private equity is like a farming business. you plant and you harvest. the business goes up, you sell things. for as much as people have said, and i have seen the press saying too much money chasing too few deals, i was joking, i've been hearing this for 36 years. when i arrived, i thought i'm too late, every good deal has been done. when we started apollo, i was a junior person -- too late for me. 2001 follow the collapse of the internet, telecom, 9/11, and a lot of mistakes across the board. some firms disappeared because of their performance. gp's were telling lp's a new model was 15%. i was on a panel with the head of new york state.

that is what they were telling lp's. apollo was seated next to the host. bain, blackstone, carlisle, the murderers row of investors. i was asked the question, what do you think returns will be going forward? i said amazing, 20% plus. in that fund, the 2001 fund, 44% net returns. fast-forward, and you look at the last three funds we have done, $15 billion, $16 billion. the most recent, $25 billion. the last time we announced results, 44%. the road just keeps moving and changing. it is our job to continue to reinvent ways to extract and produce value.

for us, the way i defined success is purchase price matters. some call that a value investing strategy, but that does not mean that you buy only value oriented companies. you want to buy technologies, buy into change, but purchase price matters. you do a series of transactions where you think, as a result of complexity, something being misunderstood, you can derive excess returns. i am very positive on the business. i think it will continue for a very long time. we will continue to see articles of too much money chasing too few deals, and it will continue. amanda: that was marc rowan, apollo's cofounder and ceo. for stock of the hour, blackstone entering a strategic

agreement with aig, acquiring some of its assets. day wilson has the details. dave: what we are talking about here is blackstone buying a 9.9% stake in aig life and retirement business for $2.2 billion. on top of that, they will manage assets for that business, starting at $50 billion, moving to something like $92.5 billion. the other piece of it has to do with affordable housing, as aig describes it, multifamily developments. blackstone buying these properties for $5.1 billion. it is understandable. blackstone is basically a real estate firm at this point. that is the biggest chunk of their revenue, more so than private equity, more so than other businesses. it's a matter of expanding into an area where they have

concentrated over time. in terms of aig, they are looking to separate their life and retirement business, targeting an initial public offering. the ceo said in may it was the optimal path forward for that business. they want to focus on property-casualty. they want to attract alexa blackstone.interesting to see the comparison between the shares. aig has never been the same since the 2008 financial crisis. blackstone, shares have been up every month since november. kailey: 123% in two years. thanks very much. after a year-long delay, f45 training holdings goes public. we will speak to the ceo, adam gilchrist, live, next. this is bloomberg. ♪

amanda: welcome back. while the s&p 500 continues to trade near session lows, one stock is managing to hang onto gains. f45 made its debut today on the new york stock exchange. cofounder and ceo adam gilchrist is with us now. let's start with the way this came to market and the timing. you are coming by way of a combination of a spac that was called back in the fall, came back as an ipo. does the market seem more receptive to you now? adam: we looked at the spac opportunity and decided to move ahead with the transaction group that enabled us to strengthen the balance sheet. a traditional ipo was always our preference. we are thrilled to be here today listing the company. kailey: you had first filed for

an ipo in january, the spac deal called off in october, about times at which the pandemic was an issue when we saw gyms shut down. now that they are back open, what is the demand recovery for f45? are people coming in or do they want to stay at home? adam: that is one of the most important questions you can ask. we are seeing the bounce back stronger than pre-covid numbers. the way we measure that is by visitation. our visitation is over 2.65 times a week, which is a great measurement on the fact that people want to get back to gyms. people want to get back to restaurants, be a part of the community again. we are excited where we are at. 91% of our network is reopened, so we are looking forward to getting these last folks reopened. it has been a tough year but we are bullish on the future. amanda: it seems like investors

must be, too. on a revenue basis, you are still small, losing money, but what are you promising investors? what is the goal here? adam: we have a simple goal. we want to be the world's largest franchise. we want to sprint past mcdonald's. we are excited about our prospects. we are currently in 63 countries, which makes us the largest fitness franchise geographically. we are the only gym to go to a military base, miramar military base, training soldiers. we are also the only third-party gym in colleges. stanford, usc, ut. over the last month, we side with three high schools. there are 25,000 high schools across the u.s.

our total addressable market could be anywhere north of 25,000. but we believe we deliver the world's best workout. that has been underscored with folks like stanford and the u.s. military becoming clients of ours. kailey: thank you so much. i wish we had more time but congratulations on the listing. adam gilchrist, co-ceo of f45 training. that does it for bloomberg markets. thanks for joining us today. this is bloomberg. ♪

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mark: senate majority leader set

a deadline for action on infrastructure. taking a keep sedro stepp monday to set up an initial vote wednesday for the bipartisan deal. he also wants senate democrats to agree by wednesday on the budget resolution that will carry even more of president biden's economic agenda. the european climate plan was unveiled in brussels today, designed to cut pollution by at least 55% by the year 2030. european union climate chief tells bloomberg the eu still has "a lot of convincing to do." >> they should understand that meeting our goals is a legal obligation. mark: he also said it was the