♪ manus: good morning from our middle east headquarters in dubai. dani burger along with me. the senate passes biden's $550 billion infrastructure bill. focus turns to the trillion dollar budget plan. still too soon? it is not a time to make a call

on tapering. inflation dynamics are changing. along with u.s. c.p.i. data. more supply chain pain. delivery times on chips surged more than 20 weeks. the longest wait on record. it is tight out there. dani, good morning to you. seeing a full year. a net loss of up to mid three digit points. free cash flow from m&a about negative 1. 2 billion. they are confirming the full year. for the third quarter, earnings 266 billion vs. a loss this time last year of 693 a year ago. the sales 8. 6 billion.

lighter than the estimate of 9. 60. how are you looking on the a.b.m. numbers? derek: this just crossing. going -- dani: going to be october. the final 2019 dividend. when it comes to the numbers, spain in line here. stronger when it comes to the quarter profit. it really is all about the dividend. manus: it absolutely is. if you can do the dividend and i suppose tantalize the investor with the share of buybacks. i mentioned the thinksen krupp numbers. charlie evans talking about the

progress. it is that infrastructure bill. $550 billion of new spending. you look at alcoa, some of the moves that to being place last night, this tells me, are we fully priced for the infrastructure move or is there more to come? dani: these are really strong numbers and nasdaq fell half a percent yesterday. higher yields might play into that as well. a lot of crosscurrents here. manus: it is about -- bulldozers, dani. talking about autmated bulldozers. dani: if i wor to buy a

bulldozer, it would probably will autmated. i have no idea how the drive something like that. the you're looking at a dollar. king dollar slightly higher. we have the c.p.i. numbers out later today. when it comes to equity marks in the u.s. and europe. biden's infrastructure plan is the biggest spending on u.s. public networks in decades. president biden: america, this is truly how we build back better. this bill is going to put people to work modernizing our roads and highways and brings so commuters and truckers don't lose billions nationally. manus: he has been thinking of the detells a on this and the

key takeaways. we know bridges and roads. the new york times is heralding a trillion dollars. bloomberg is $550 billion. define the difference. >> first, a broader strategy where he wants to get trillions of extra dollars in the u.s. economy. half a trillion on infrastructure. broad band. fresh water. new power sources as well as your typical roads and brings. that was u.s. recovery story and inflation story. this is a win for president biden's administration. he got some votes from the republican side. moving forward for the next steps of negotiation where he will start getting to the multitrillion dollar levels, that is going to be a lot more

complicated. on the economic front and terms of the infrastructure, there is a long way to go. manus: ok. thank you very much. that is a win for the economy. we'll see how that translates. let's get to the head of strategy at r.b.c. glad to have you with us. you look at the performance of alcoa. is the infrastructure bill, is it all in the price or are you getting ready to be more active in deployment for a much bigger scale of infrastructure? >> infrastructure is a very important sector for us. the sector has morphed. we think there is a secular growth place here.

there are further opportunities, particularly in what we call green tech. these are companies which have developed solutions to tackle the environmental challenges that we have and we have an angle to construction, certain building materials. so these are -- i think it is very important. we think it is very important to have exposure to this sector. there is more to come. more good performance to come. dani: is that just in the u.s.? is the u.s. bill discreet the country? do you see it achieving anything globally? >> it is a big achievement in the u.s. in europe there is 760 billion plan so much of which would be

deployed to infrastructure. so there is more government spending on infrastructure itself and also on the greening of the economy and therefore this will keep very well underpinned in our view. manus: i had a number of conversations how is the smartest way to access infrastructure? do i buy the steel? the diggers? the machines? or do i buy those companies that'll in 20 years earn a revenue stream? the microsoft. the f.a.p. revenue stream off the consequence deployment of infrastructure near term? >> well, probably a little bit of both. when we think about infrastructure, we think about road maintenance and airports. certainly there is spending.

some impetus in those structures. it is worthying about how all of this is put together. as you mentioned, the exens which are developing, to make sure all of these systems work, may also be good opportunities. you have to look into each company and see what is the structure of their revenue from where from which business their businesses come. and look at the model from their point of view. dani: we heard from evan saying he is looking for a mull. jobs report. plural there. when it is time to start pulling the trigger on a taper. this difference in time lien we're hearing from policy maker to policy maker, how do you position? is it a wait and see or are you preparing for a taper to happen sooner rather than later?

>> in terms of the taper, we expect an announcement. we think it will be a one-year process. the interest rates will be increase at the earliest toward the end of 2022. when we look at the tapering, we get questions from our clients, our investors, we have to remember particularly for equity investors, it will still be a lot of liquidity in the system. monetary policy. continue to be loose for many months to come. if you look at previous tightening cycles. there have been 17 since the 1960's. in each of these case it was tightened too much.

in nine it didn't. the median return on equities was 16. 5%. the year after it was 9%. in all likelihood, we expect positive gains from equities, modest gains from equities over the next several months and therefore a lot of overweight positioning in equities. manus: that is a very clear math m&a mat cal justification for that over the next few years. how do you think the bond market will come to bear on that? when the mortgage market needs to sell more bonds to compensate for a loss of income. they say the trigger point is 1. 3 on the bond market. do you see a -- rates higher on rates and 10-year government

bonds and do you see a trigger points for the rerating to the higher level as morgan stanley said at 143? >> we do think that year will creep back up. they have come off their lows already. we have more difficult -- to find opportunities. given where we expect yields to go and given that spreads are really tight. there is one area which is of particulto us. european -- more attractively valued. bank capital which has been a lot of work on it over the last 10 years since the financial crisis. the regulatory background is stronger. this is where we put a lot of our -- in this particular area.

dani: you going to stick with us. much more to come. now the first word news. hi simone. >> hi, dani. we're seeing the nationalist grip on power halfway through their second term in poland. they fired the deputy leader of a small satellite party in the coalition. the move comes before they vote on tightening control over the media by ousting the u.s. owner of the biggest prieft television network. new york governor andrew cuomo will step down in two weeks to avoid impeachment over sexual harassment allegations. he maintains he didn't harass anyone but admits to being thoughtless the way he approached and touched women on his staff.

kathy hochul is to take over becoming the first female governor of new york. powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. manus? manus: thank you very much. coming up on the show. the delta variant in china. how do the economists -- the consequence for chinese growth? this is bloomberg. .

dani: west bounding back to bloomberg day break. i'm dani burger alongside manus cranny in dubai. capacity for china and google mobility data across the continent is showing the impact

of government restrictions to combat. we have not just this economic concern but we have restrictions in china. we have -- your view over equities over the month has it changed at all? >> yes, it has. we wept from market weight to overweight. the influx in china has decreesed since december. the crackdown on exand of course the delta environment is -- variant is leading to more restrictions. we're cautious. we're seeing g.d.p. forecast being downgrade and earnings

will likely follow. to a greener economy. i think the focus has been very much on growth in china for investors. the fact that it has strong growth potential and the fact that the authorities are also putting importance on the social fabric of the country, that has been overlooked. we expect more regulation. already healthcare is one area that the government is looking at and it could be more things to come. a caution in the short-term.

manus: the portion on the equities side. a lot of people come on the show and say actually we want to be overweight. the fixed income story in china because of a, pboc ben even lens people seem to be wanting them overweight. they are happier being overweight, fixed income. have you got exposure to fixed income in china? >> we do have exposure. certainly more, loose monetary policy. and also the fact that bonds will be included in indices and bench marks and investors. incomplete passes tuitional investors are still very underwelterweight and therefore in order to manage their positions will have to invest in a bit more. it is one area where we are still constructive.

dani: you talk about the short-term perhaps some concerns there. you talk about maybe some of the long-term plays in green investments. i wonder for some of the skepticism or concern you have in the short-term if there is anything you're watching for or anything that can change your mind to get more heavily involved in the region. >> the investigation, the antitrust investigations, whether these are coming to an end, that would be a very important factor. tology is very important investment area for china and it is affecting share prices. should this come to an end and this of course, more lenient monetary policy, improvement in g.d.p. forecast, all of these are factors which we are looking at at the moment. manus: thank you so much.

bonds a strategy at r.b.c. asset management. thank you for joining us. we will have a conversation with the london stock exchange. coming up, the supply chain pain. delivery times on chips. 20 weeks. the story on bloomberg. ♪

>> the chip shortage can affect us as with everyone else. there have been different work demands and different solutions. we see that easing a little bit but it will be something that is going to be front and center for

the next couple of quarters. manus: the indian car maker mahindra's c.e.o. with his view on the krip crunching. it is having -- chip crunching. let's get to our asia transport reporter. the longer wait time on the chips, is it supply or delivery and logistics? what is causing the longer weight time? >> i think it is a little bit of both to be honest. these things don't happen overnight. it takes months for chip makers to boost output. even a couple of years if you're talking about billing a new plant and that of course costs billions of dollars.

the pandemic is causing disruption. to give you an idea, the cars that we're seeing today use a lot more semiconductors than 10 years ago. about 40% of the total cost of a car these days comest from electronics components. this is the supply of these things can't be ramped up in a short period of time. that's why i think you're seeing these times stretched out. we're about 12 months into this chip shortage now. dani: if it takes a long time to remedy these problems and ramp things up, what are they doing to deal with this in the meantime? >> some of the short-term mechanisms we're seeing is automakers have been shutting production lines or closing a factory down for a period of days but long-term we're seeing automakers sort of think about a

range of strategies that can see them through this. nissan, for example, pushed back the time on lek vehicles due to the chip shortage. other cars have been directing them to higher models. they will get bigger profit. they are saving the chipes they have for some of their higher end vehicles. we had a clip recently from india's mahindra saying it was going the hike the prices only solve of its models. -- some of its models. i think there is a range of tactics that automakers are inclined to get through this. manus: thank you very much. as soon as we see a turnaround

on those supplies,. let's check in on some of the commodities. we saw the equity story come through from the infrastructure bill. it wasn't as oppressive leapt. let's check on the oil. we jumped this morning. a little bit of a bag. we saw stock tiles drop by 1. 1 million barrels. if you look across the rest, they are not showing a roaring infrastructure bid are they? dani: how much of this has to do with -- the stronger dollar from hawkishness. does that mean we're not going to get the same rally? >> you reminded me, goldman of course. yeah. that's we work together. goldman is wary of the dollar. peak growth and peak inflation. in the middle of july.

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dani: good morning from bloomberg's european headquarters. i'm dani burger alongside manus cranny who is leave in dubai. this is bloomberg daybreak. a major hurdle cleared. the senate passes biden's $550 billion infrastructure bill but focus turns to the more contentious $3. 5 trillion plan.

it is vital to understand if inflation dynamics are check aing. highly anticipated u.s. c.p.i. data is out later today. manus. good morning to you. we're seeing some of the chip -- moving higher. it is bold out on parade. manus: absolutely. bigging beautiful american rally. a movie title. of course it has been a long time since we had a 5% drop. let's carry the travel theme forward. we had dubai's numbers. let's recap those. a 40% drop in the first half. it is confident the numbers will rise on the back of the travel.

the world's largest travel hub expected to hand over a million passengers over the next 10 days as the summer holiday ends. paul, good to have you with us. when we last caught up, you said we expect to recover 90% of the prepandemic capacity by the autumn. are you more upbeat? will you hit that level by the end of the year? good morning. >> good morning. if we're going to get soming of restrictions, some of the things we have seen are positive. the u.a.e. has relaxed

restrictions on travel from india and south asia. they are key markets for us. if that is the case, i think it is much greater than the first half. we are optimistic. if the relaxation of restrictions continues we should be on the road to recovery. dani: what about more continued relaxing of restrictions? do you see it going to green soon? >> we're not resting on our laurels having managed a government -- we do a vaccination program that has been so successful and the management of the pandemic by the government has been equally good. we must get to the recognition of vaccines by the government

and also travelers can enjoy the same relaxation and restrictions as the u. sarvetion applying overseas. the u.a.e. has relaxed restrictions and also it is now recognizing overseas vaccinations. i think it is -- hopefully the numbers will be down as people have the confidence to travel. manus: we'll broaden the conversation in a moment. let's push one more type. how confident are you that the british government will recognize the u.a.e. vaccines? are you very confident that'll come in a matter of weeks? please qualify the progress on regular in addition of vaccine

in the u.a.e. into the u.k. >> well, it seems very much those conversations are -- it is probably an issue. we have ad advanced system in the u.a.e. people with load their vaccine records into the audio tape and now we're trying to be able to do the same arrangement with various governments overseas including the u.k. so that these vacs numbers and proof of vaccination can be recognized by the authorities. we have to wait for the right solution to emerge. and push toward a complete reaxation between the countries. dani: how kreusht is it in order to get that traffic that you're

looking for to have this vaccination recognition, to have an evening of restrictions, to have no quarantine? how crucial is that come october? >> obviously, it is what we're pushing for. this year, it is not just as tht six weeks away from the dubai air show. the 50 td anniversary of the u.a.e. all of the important events plus p wonderful welcomes that we're going to anticipate in the u.a.e. across the winter and i'm sure it will attract a number of businesses that we haven't seen before. manus: let's hope that will come toward. again, reflecting on the bench mark you said i am hoping to employee 3,500 new staff.

have you done that? with the ramp up and the business profile you have given to dani and i, how many more additional people are you going to hopefully hire by the end of the year? >> we have actually changed our business model slightly and we're now a situation where we're working with outsource partners to provide some of the resource wes need. we have a massive experience program underway. that is designed to transform the experience. and we the idea is of course that post pandemic people will -- the confidence channel. all of our staff have been fully vaccinated so we can convey that confidence to our travelers. s there are going to be a few thousands people that we're hiring. definitely we are in the market

to have additional resources as the traffic ramps up in the next few months. manus: just give our audience -- a perspective on the floe. sorry, dani, in terms of we have u.k. we're opening up the hubs. are you expecting a bigger surge in asia by a hub and/or an e equal surge in intrau.k.-uaetraffic. >> i think the biggest uplift is going to be the point -- between dubai and overseas destinations. london has been our most populous rout. other points in the u.k. are very important. we have nearly 30 frequentities.

i think these are going to be very much filled with people who are going to be visiting dubai and we should see some business. this is very good for us. we believe that the points of traffic from those or begin origins will be some. if you have three passes involved, re-really the restrictions are going to have more of an impact. i think over time those will come back strongly as well. we have the services and the policy and products and the -- the ground. in order to have the confidence. we are expecting a surge, mostly in point-to-points traffic.

dani: thanks so much. i know you're in london at the moment. that pull to warmer welcomes a good one. manus, i want to quickly mention some lines crossing. the retailer raising their full-year profit guidance. profit jar gin about 4. 3%. the e.p.s. view, one vs. 2019. that is what they are upgrading. it is basically a two-year on year comparison. we will be speaking to the c. forks of ahold. now let's get to the first word news. >> thanks. the u.s. senate passed a $550 pillon infrastructure plan representing the biggest burst of spending on public works including roads, rail, water and

broad band in decades. the bipartisan 69-30 vote park s a victory for president biden's economic agenda. now it goes to the house. new york's governor andrew cuomo will step down in two weeks. bowing to infrastructures to face impeachment over multiple sexual harassment allegations. he admits to being thoughtless the way he spoke to and touched women on his staff. lieutenant governor kathy hochul is to take over becoming new york's first female governor. a chinese court sentenced a man to 11 years in prison for spying. he was found guilty of stealing and providing state secrets to other countries. the sentencing comes at the same

time extradition proceedings are being held against huawei's meng hongwei in vancouver. this is bloomberg. manus? dani? dani: thank you very much. we have the european crisis that is literally rocketing to records this summer. a taken to energy market action. gas, electricity, renewables. this is bloomberg. ♪

manus: it is daybreak europe. i'm manus cranny in dubai. dani burger alongside me in

london. businesses are reopening and workers are returning to the office. dani? dani: at the same time power prices in the german market are heading for the highest average summer level in about 20 years. let's get more from bloomberg's editor for gas, power and renewables in europe. why are energy prices so high this summer? >> we're coming back, you know the worlded is coming back. people are returning to the offices. really we are seeing the return of energy demand that we haven't seen since the pandemic. we're seeing a shortage of natural gas used to produce electricity. as a result it is a real knock huffoff effect that you see in the -- knockoff effect that you see in the power markets all over europe. manus: if this is the state of play in the summer, it is a very warm summer.

very hot. people returning to offices. what does that do to winter? they are mean winters in europe, aren't they? >> yeah, if we are at this level in the summer, what is the winter going to look leek? when you look at prices and you see that prices for the summer an winter about the same which is odd in a normal situation. it gives us some hope that the winter might not be as bad. one of the big things that the market has tat moment is the in order stream pipe lien. -- nordstream pipeline. we're basically hoping that the gas stories, we see this big crunch. we hope it can get better at the end of the year if nordstream dom comes online of course.

dani: inflation. will this have an economic impact in terms of inflation? >> you're right. inflation is going to be a problem in europe like it is going to be a problem elsewhere in the worlded as well. energy prices will contribute to that. you have seen this in places like spain with the spanish government reducing energy taxes. consumers are paying the price. manus: we're seeing that across the spreads as well. a real tightness. we're going to go towards 26. this is a manifestation. if the fires were not the personification of global warming then you look at this in the power markets. what do you think it is going to do for governments when they

gather? >> i think it is going to be really difficult for governments and it has the potential to become a real issue if you think about people paying high energy bills, there is a chance they are going to turn again and say why am i paying this cost? we have already seen yellow vest protests in france. that started with -- we can argue really with why but it started with fuel costs. we can see that becoming a headache for governments who are trying to strike -- nail down an ambitious climate deal. manus: great to have you with us this morning. a very tight market. the very latest in markets. quick snapshot dani of what is going on with the bond and the equity market because this is the equity story. i don't think this really tells or does full justification. we're giving 1/10 of 1% back.

if you inside the u.s. market story, it is the steel make rs, alcoa, the real beast of infrastructure that have been the alpha there and actually as you said, nasdaq gave back .5%. with haven't had any major c.e.c. entertainmentses. you still get 17% in these equity markets. dani: you know i love these. we are .86% away from doubling since the march 2020 low and we have had 64 all-time highs since then. that is quite some impressive superlatives. a higher yield also might be helping. some of the cyclical names hurting the nasdaq 100.

manus: you know who would be proud of you? i don't think he would like the way i talk about markets i think matt would be so proud of the way you used .6%. i really do dani: you and trashy don't belong in a sentence together. i refuse to hear it. manus: one could argue that is going to be the new sophistication. it is going to draw people in. they are going to want to work in bitcoin. a german currency for the millennials but your currency is bitcoin. we'll give you the bullish predictions. this is bloomberg. ♪

>> this was a setback. no doubt about it for this past week. we're playing the long game here. we think the more education and other members of the crypto industry do with lawmakers help them understand the personal knowledge for crypto, the more we can shape the right regulation to make sure we are presenting customers and at the same time not hindering crypto innovation from happening in the u.s. and moving it offshore. dani: speaking to bloomberg about the impact of crypto currency oversight in legislation passed in the senate yesterday. bitcoin has made a staggering comeback or at least it is trying to. peaking from 50% from recent lows. it could test new highs. let's get more from our asset reporter. calls coming out for $100,000 again. what has been driving this most

recent leg in the rally? >> it has been certainly a surprise. three weeks ago we were talking about bitcoin under $30,000 and potentially dropping as low as $20,000 and now we're back up to $45,000 and suddenly we're talking about $100 again. the latest enthuse from the u.s. overnight and people in the industry were a little surprised that the price is still rallying off that setback but there is some view that the acknowledgment of the crypto industry in that infrastructure bill is just another milestone in the kind of added credibility for the industry that the crypto industry is here and it is not going anywhere. manus: the taxation or the burden of taxes that would fall on crypto. it is not as high, i think as some people had perhaps presumed. you talk about bullish targets.

there have been some analytics in terms of if bitcoin tracked a percentage move you would end up with something much higher than we are now. what are the most bullish of the bullish targets? >> well, certainly if bitcoin manages to catch up withether. it has outperformed bitcoin this year. even with that jump to almost $65,000 back in april. ether is still ahead. it is pretty bullish considering we still have not come close to that. the closes we got was almost $65,000 back in april. it would be optimistic to see that happen by the end of the year. tom lee says bitcoin crossing the 200-day moving average is a bullish sign and he this it could get to that by the end of the year.

$100,000 by the end of the year. again, the bulls are back out now that the directions are pointed upwards again. dani: we talk aboutether and bi. are they picking up in popularity? >> when it comes to doge coin, the creators said it was a bit of a jobing. the fact that these coins continue to stick around. there are people putting money into it. there are people putting money into it. it is real to them. it is forpt watch that push and pull from bitcoin and led by ether, the second biggest coin. i think it is interesting to look at the ratio there where it has been waxing and waning throughout the year. that is another key indicator that investors in the industry are always watching. manus: eric, thank you very

much. to the moon. eric lam. daybreak europe is up next with francine lacqua. anna is on holiday. ♪

francine: good morning, everyone. welcome to bloomberg markets. i'm francine lacqua live in london. mark cudmore joins me. good morning, mark. good morning, everyone. here are your top headlines. a major hurdle cleared every of the senate passes the infrastructure bill. and now turns to the more contentious $3.5 trillion budget plan.