mark: i'm mark crumpton with first word news. democrats are getting closer to an agreement on a roughly $2 trillion compromise version of president biden's spending bill. nancy pelosi says that she is optimistic after a meeting today with the president and chuck schumer. the deal could allow the house to vote on a separate $550 billion bipartisan infrastructure bill that has been held up by progressive lawmakers, who first want it on the larger bill. -- who first want an agreement on the larger bill. pandemic relief spending sustained at the federal government's massive borrowing needs and to the treasury department says the deficit for the fiscal year, through september, was $2.77 trillion compared with or $3.1 trillion seen in the previous year.

the gap was $897 billion less than forecast in the administration's budget outline earlier this year. the battle over a strict texas abortion law is going to the highest court in the nation, the supreme court has agreed to hear arguments in the case.that leaves the law in place for now. the decision to let the law stay in effect came over the dissent of justice sotomayor order. it bands abortion -- bans abortion after six weeks of pregnancy. the backlog of ships outside of los angeles and long beach, america's largest gateway for ocean freight, is poised to get worse. there is a record of 80 vessels waiting off of southern california, with more on the way from asia. the bottleneck that started almost exactly a year ago shows little signs of letting up, according to a bloomberg analysis of shipping data.

global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. ♪ amanda: hi, i'm amanda lane -- lang. welcome to "bloomberg markets." matt: and i'm matt miller. ubs sees investment-grade debt heading for its worst animal performance since the global financial crisis. we speak to the strategist behind that call, the head of credit strategy, matthew mish. shares of intel hitting their lowest level since january, more than decimating the company and

erasing $20 billion in market value, as the chipmaker reported third-quarter results and detailed a spending plan that will pressure profitability. we'll hear from the ceo. that in burwell they are forming a new club with the price of $180,000 to join, more on the membership that enjoys private getaways and access to exclusive investment opportunities. sounds exciting. amanda: let's get a check of the markets. which are also exciting, in a different way. the kleins the board, but the overall -- some declines on the board, but overall, take a look at the tech names. they are really suffering. the communications group is down at last check about 3%. and that is as snap warns that changes by apple will affect its outlook. it's also addressing supply chain concerns.

but it is really that apple connection that could be influencing others, like google and facebook. we are waiting for their earnings. interesting action elsewhere, including digital world, talking more about that later. but bond expectations for how fast inflation will rise over the coming years has topped 3% for the first time a record, th e rate climbing more than nine basis points, reaching the highest level on record in gloom data that goes back to 2002. matt: uh, i was waiting for the chart. it looked you little bit blank, but that is better than had we seen it. am there is. matt: there is the u.s. inflation expectations, jumping to their highest level that we've seen pre-financial crisis.

an even worse picture, if you think inflation is a bad thing, in other countries with the u.k., for example, see massive rises in the five year, five year. now in the market, one of the big concerns. but jay powell spoke earlier, saying prices that should come down once the supply chain constraint uses -- eases. new says they will start to taper their bond buying program. so we will bring a matthew mish from ubs, talking to us about his call that we highlighted at the top. matt, you expect the drop in return to be almost as bad as what we saw in 2008, 3% compared to 5% during the financial crisis. matt: right. it's the third worst return we

have had in 30 years. that's obviously driven by rates, specifically the rise in breakevens, but remember the investment rate market is 30% long-duration. so, we actually saw a relief, because the 10's and 30's have a flattened so much. -- have flattened it so much. obviously, we are coming out of covid at low starting points. historically, you have never seen back to back years where there are negative returns. our forecast next year still has 10 years going up four basis points and credit spreads widening in the second half of the year. there is a silver lining, it will not be this bad in 2022, but i think returns will still straddle flat, particularly as a get into the back half of 2022. amanda: we have to ask about the quality question, and whether or

not there is real risk here in parts of the market. there was always going to come a day when the rates would go the other way into the bull run for bonds would be over, but what about those who will face factors causing this -- the margin pressures, will we see rising defaults? matt: simple answer is unlikely. two reasons, one is from the rate side, companies have a nice cushion built up from basically refinancing risks. on the investment grade side, companies have turned out maturities, less so on the leverage loan side, but the rise in particularly the intermediate rates. you are looking at investment-grade high-yield firms that still have coupons at that are over 100 basis points higher than today's market yield. i do not say risk from the perspective of repricing of the cost of funding, but what i see is moderate risk around margins. and basically the earnings

strength that we have seen potentially peaking, then decelerating into next year. most of the data suggests the weakness would be in consumer cyclicals. it should be manageable. inflation historically, has pushed up or contributed to higher nominal gdp, and quarter profits, whether you are talking about gains in real gdp or inflation, corporate profits are sensitive to nominal gdp more so than real gdp. matt: we have a viewer writing in, he wants to know where you see the most event risk in terms of sectors over the next couple quarters? matt: i will answer it candidly, we think that there will be a reflation or recovery trade in the next few quarters. we do not see a lot of risk in those areas people are pointing to, where there is low-quality issuance. we like leveraged loans, they

are basically up about 4.5% on the year and i think they will finish up 5.5%. look at private credit, that market is up about 5% or 6% and it should finish around 7% or 8%. i think we are looking at the end of the year. i would like to have a better answer, but i do not think there's a lot of risk from a credit perspective. in terms of 2022, i would say that you should get more concerned about areas that have seen growth in low-quality debt, a strong use of proceeds away from refinancing, like dividend recaps, m&a as participants earlier this week discussed. that is more of an issue when growth fades, but we see that as a second half 2022 story. much less concern for the next few quarters around credit risk. certainly more concern around interest-rate risk.

matt: you mentioned m&a, and we have seen already a lot of it this year, or whether -- or will there be continued strength with it? matt: we are expecting a letdown next year. the backlogs are fairly strong, there is cash on the sidelines, and normally you see debt growth and m&a transactions tend to lag gdp growth. i think that m&a will remain strong. when you think about what the world looks like, not in the next few quarters, but the second half of 2022, i think you can get more concerned about is continuing to add to what some people point to today as vulnerabilities, and ultimately this cycle, which is access leverage and debt growth. but i do not think we are at that point now. and i do not see that in the next two or three quarters, to be honest. amanda: from a strategic point

of view, would you recommend positioning at the shorter duration end of things? as we have seen a warning of interest rate hikes in the past, although they were head fakes. matthew: we are pushing clients towards assets less sensitive to those risks, private credit is an area that we like. we like shorter duration high-yield. you can also find nice floating rate investment-grade notes, or in this case we also like bank bonds that are short dated as ways to basically on the former side get adequate yield, mid-single digit yields on an annual basis come on the latter side just looking to essentially pick up small -- and wait for higher interest rates to reinvest that at more attractive rates. matt: thank you for joining us, matthew miss, head of -- mish,

head of credit strategy at ubs. it has been to the moon for former president donald trump's media company, shares of digital world acquisition company, dwac, rose as much as 1225%. the spac company will merge with a private company, trump media and technology group. it triggered 12 trading halts today. his fans on social media have pumped the stock, fueling heavy trading. and it has been a pretty amazing journey to watch. i mean, three days in a row now of rallies and growing from nothing to $1.5 billion market cap today. amanda: keep in mind, this is a

blank check company, a blank page company. we do not know what the company will do. he has grand plans for it, but it is not doing anything at. to me, it is emblematic of a point in the market where money seeking a home, even if it does not know why. matt: my personal take is this is a little bit different because it concerns a president of the united states. even if the president's son is not an artist and people are willing to pay half $1 million for his paintings, it makes sense people would buy stock in a company that wants to buy a president's nonexisting media assets. a stock going in the opposite duration, intel shares are falling. the market cap has been literally decimated, and then some. we will tell you why, next. this is bloomberg. ♪

matt: this is "bloomberg markets." shares of intel have fallen more than 10% after the chipmaker reported earnings and and projected -- reported earnings and more spending. the ceo sat down with us to discuss the results. >> my projections have not changed. pat have: always said the second half of this year is the worst. it's the bottom. qi, or every quarter next year, will get incrementally better, but we are going to see shortages that persist into 2023. this is the bottom, and it will

start getting a little bit better every quarter next year, but we will not see reasonable supply demand balance until 2023, it just takes that long to build new capacity, to expand capabilities in manufacturing, and to see a rebalancing of the supply chain across the industry. overall, it clearly impacted our q3, and we expect q4 results to have better revenue results. amanda: that was intel's ceo. we want to break down the earnings further. ian is with us from san francisco. obviously, concerns about spending, and intel warning without help from government and may not get its arms around that plan to build fab in america. tell us why the stock is reacting so badly. ian: in another part of the interview with pat, he said,

look, we are going to become a growth company. you looked at us as a value company. we are going to be a growth company, and it will cost a lot of money. and the margins you have seen, the amazing margins, are going away. they will be 10 points less. for people who are still bullish on intel, that's the confirmation of their worst fears. this is going to be a hard road for this company and it will not happen tomorrow. matt: what do we see then? i noticed that the pe is a measly 10. compared to growth companies, they have a long way to go. ian: exactly. on top of him saying we will double spend on equipment and go from a real rate of $14 billion a year to as much as $20 billion a year, he is saying that next year sales will be flat, and at

that is not a growth company yet. underneath this, analysts are worried about them, saying, it cannot continue to grow at the rate it's growing, the market commander losing market share. that is the environment they are in. new plants, he says, new technology, will get us back, do not worry. but that is very much in the future. amanda: ian king, we appreciate it. watch a shares of citi, as they say they plan to conduct third-party racial equity audits of its operations. we'll bring you more information as we get it. what they hope to do with the information, how they will be held to account, those are questions we will ask. certainly a sign of how serious they are taking that subject. stay with us. ♪

amanda: this is "bloomberg markets." we know that there are plenty of networks for wealthy individuals and their families. 360 is a new invitation-only investment and networking group for people with a net worth of more than $100 million. the entry charges $180,000. for more on this, suzanne woodley. what is our 360 trying to do? >> it is an invite only, exclusive membership network that is taking a more holistic approach to wealth. it is like you have made hundreds of millions of dollars, but sort of have you really focused on your family, your purpose in life and your

philanthropy, making it as powerful as possible? it is moving from a focus on the monetary side it to the much broader view of your different kinds of capital, emotional and social capital, things like that. matt: there's already a network like this. i think of that as a group of wealthy people. we will talk with michael on monday on bloomberg radio, i believe, who runs that group, but how is this going to be different? will they compete for members? >> i do not think it is a competition, i think that they each have their niche. tiger 21 is great and people in that group tend to have at least $10 million in liquid assets. but generally have an average net worth of maybe $100 million. and tiger 21 also takes a

holistic approach, but it is known for being investment focused. they have the portfolio defense, a process where you meet with 15 people in your area and you present or open the kimono on your portfolio and everybody can weigh in and be critical, or positive, or just give you feedback. that's one of their main claims to fame. i they that they both can coexist, although some of the people who started this were former tiger 21 chairs. amanda: that is the question, how much turn will there be in this kind of organization, is their room for the organization? >> yes, as you know the world's wealthiest are just getting wealthier. and, you know, that pie is growing very quickly. and i do not -- i think they can both coexist.

and i am sure we will see other organizations cropping up. matt: if only i could find my bitcoin password, i would apply as well. amanda: [laughter] matt: i believe this was the most read story today as well, so congratulations to you on that. our viewers and listeners, if you have the bloomberg terminal, you can find the most read stories from our brilliant bloomberg news editorial staff, like suzanne, and i highly recommend doing it. we are finding out more about citi in that this was an investor proposal previously, that goldman sachs and other said, no thanks, we do not want to do a third-party audit on race, now it looks like citi is caving and doing it. amanda: interesting. we will await the outcome. stay with us. ♪

mark: i'm mark crumpton with bloomberg's "first word news." pfizer says the covert shot was

91% effective against symptomatic cases in kids age five to 11. a key hearing is scheduled next tuesday when an advisory panel will decide whether the vaccine should be cleared for young children. the u.k. covid-19 infections continue to rise. health officials say one in 55 people in england had coronavirus this week compared to one and 60 week before. infections were still highest in children aged seven to 11. millions could soon have roosters sooner than expected. officials are considering plans to cut the six-month wait to five months. bloomberg has learned the eu is rolling out terminating a post-brexit trade deal if the