manus: good morning from dubai, i'm manus cranny. we're here with the stories that set your agenda. more voices worn inflation is in transitory. the s&p 500 dropped most in a month. climate talks heat up. china and the u.s. thou to work

together to cool down the planet in a surprise joint statement injecting fresh momentum into the last days of cap 26. and elon musk cells additional tesla shares. he's now collected more than $5 billion in just days. welcome back to london, dani burger. let's get to some of the breaking news we have coming across the bloomberg terminal. some results from merck, third quarter net adjusted sales 4.90 7 billion euros. they are talking about adjusted earnings-per-share of 2.4 euros. dani: i am back, ready for the break. the industrial giants, for them may be a little bit more positive than it was.

a slight rise from 2022 margins after profit beat. seeing revenue growth at 5%-8% for next year. something analysts had expected and that definitely played through, the group was able to cope well with pressures coming from the supply chain shortages. that means their net income of 6.7 billion euros for the financial year that ended september 30, that means -- beats the consensus of 5.7 billion euros. it could be as high as 21% the next fiscal year, up from 18.8% in the annual period that just ended. this is important for siemens, one of the industrial giants. if they can have better margins if they have pricing pressure, this is something we really want to see that investors really

want to see as well. they expect momentum from healthy global economic growth from fiscal 2022. we will hear from the siemens ceo just after 6:30 u.k. time. manus: the debate is this, to what extent do we risk a real read rating of the interest-rate curve? let's go to the chart, it's the most magnificent repricing moment, not the biggest in the world but certainly the biggest since march 2020. bear in mind the point that the fear and loathing that seems transitory with the biggest inflation spike since 1990, before the big rate hike of next year. in 1990i was a beginning stockbroker, not very good.

dani: i don't want to tell you how old i was at 19. i may or may not have been born yet. i think the remarkable thing about this data is that of the economists surveyed by bloomberg, not a single one expected the .9% in month over month increase in cpi. it's no wonder we had this big repricing and markets because it was really hard to call. this is month over month, which means we didn't have the base effect to contend with and still we did not expect such a hot week. manus: does it put more pressure on joe biden? i went looking for the bubble hunters and ended up with inflation, i suppose you could say we have inflation deniers at the fed. it's just reflecting back,

talking about downplaying the real risk. larry summers we know is full of angst. but talking about speculative bubbles, you were in germany, what was your sense in those conversations, a full on risk? what did you come home from germany with? dani: i came home with everyone is enjoying the recent history of a lot of these investments doing so well, but inflation is at the forefront of everyone's mind. the european head of private equity said about the amount of leverage are putting on these companies, that risk comes squarely into focus when you look at these new readings and if that means the fed will have to embarked on a course of tightening. manus: i think the market has

five hikes, it will be a whole different regime with this determinate -- terminal rate when the hikes come. dani: it's definitely more calm than what we saw yesterday. we do have a treasury futures index, and of course it is veterans day in the u.s. which means the cash market is currently close. we have the 10 year note falling so far in the morning session. just a slight fall so far this morning. the dollar at a one-year high, one of the currencies taking the brunt of that meeting from the dollar-yen because of the yield differential between japan and the u.s. after yesterday's move. crude oil up by about .2%. is there increased pressure on joe biden to release those reserves? and the s&p 500 up .10% after

those inflationary concerns. manus: let's talk about fed chair jerome powell. he said officials will be patient on raising interest rates after announcing a rid -- reduction in asset purchases. jeremy grantham weighed in. >> my faith in the fed is so complete that when they say -- the fed in my opinion hasn't done a thing right since paul volcker. all of the others have encouraged chain theories of really dangerous asset bubbles. manus: mary daly said she's monitoring eye-popping

inflation. she spoke to are michael mccain. >> inflation is higher, it's eye-popping. it's transitory, that's what i believe when i look at the data, that it is directly related to covid. manus: let's bring in our chief asia economist, she calls it eye-popping. where are you in terms of your superlatives and your opinion as to whether it will be enduring inflation? >> good afternoon, clearly it is looking to be more persistent now that the fed hasn't is a paid, you see across everything from cars to energy cost, they've been pushing being patient on rate hikes. let's not forget the political backdrop.

we know the u.s. democratic party is pushing for change at the top of the trend. what does it say for the inflation and rate hike delays? to be fair to the other side of this, it's a supply chain story. there is a view that a lot of the chokepoints could ease up and that would put folks back on growth. clearly consumer inflation in the u.s., the u.s. and china are both in play. dani: covering the most important story for the damper taps -- perhaps the entire year. we have not just cpi inflation but evergrande to follow. juliette: a good day here in asia.

also japanese producer prices jumping to the highest in 40 years. you have weakness again, below the moving average for the third session. we also had a big jump in australian unemployment, this was unexpected after that country came out of the lockdown , suggesting that many believe this will be a separate glitch. let's look at property development, the hang seng property index up by about 3%. the best two-day gain since march last year. it looks like evergrande lives for another day. on the effective bonds due in 2022, 10% bonds due in 2023.

coming back from that brink of default. manus: juliette saly in singapore with the latest on the evergrande story. elon musk this sold an additional $4 billion worth of tesla shares, topping the earlier sale of her reported $1.1 billion. so five really dollars over couple of days. let's get to senior editor reed stevens. $5 billion for tax law -- tesla stock. >> essentially we know that the one billion you just mentioned was to pay income tax for equity options. that was part of a -- set up in mid-december.

after he took the pole to twitter followers asking whether he should sell 10% of his holdings. is this part of that? if it's not, the classic musk passion, but if this is part of the promise he made to sell his shares, we are not finished yet because 5 million only represents about a quarter of what he would have to sell to offload 10% of his tesla stock. manus: thank you so much, reed stevenson our editor on the tesla story. coming up, interest rising the fastest since 1990. we will discuss. this is bloomberg. ♪

>> there was a wide range of expectations for core cpi and headline cpi. and what we got was incredibly strong. >> inflation is thought to be getting worse before it gets better. >> it will probably continue for a while. >> the next 3-6 months were going to see continued pressure. >> we are now in the perfect environment for sustained inflation fort lee's two more quarters, if not 4-6. >> we still think the market is priced into much tightening by the fed over the next 12-18 months.

>> chair powell is not ready to do something about it. manus: our guest joining us now, thank you so much for being with us. we've been communicating globally about where we are on the landscape. levels the highest since 1977. are we looking at central banks that are inflation deniers or inflation hopefuls? >> i think clearly there is more persistence and the range of inflation now is entirely

uncertain given the nature of the cycle. the downsides and the upside is across the board for a long time now. we'll have to imbalance -- balance the inflation. were seeing the slow growth in the u.s. and globally over the next three quarters. we don't think the fed is going to shift the narrative very quickly. dani: part of the balance is now we have real wages, we have this chart that falls below the historical average. at what point do we need to worry about the demand starting to wane from consumers as this picture evolves? >> it's very interesting because

i have been looking at various consumer surveys in the u.s.. consumers are optimistic, despite the cash in the account, despite over $2 trillion in excess savings. we don't see the handoff from good demand to good expenditures because of covid. it will be about growth next few months. manus: you talk about the shock for china, the energy crunch crisis, whatever you call it. some say, down, your fat -- panicking far too much.

is my risk around the energy component specifically the oil and gas component, where does it burn a hole in your risk? >> it's likely that we will see sticky commodity prices. coming from the property sector, that might put some downward pressure but as far as oil is concerned we might see higher prices. that something that will be putting pressure on global consumption and global growth. that's why we are seeing big shocks. it still underestimated. will see much more significant slowdowns and that ties into the

story of central banks. they are not going to take the risk right now and accelerate the tightening cycle. dani: both oil and inflation in general is something that has vexed the white house. biden himself has said that elation and reversing it is a top priority. is this squarely in the focus of the white house? is there any action biden can take, any pressure he can put on to reverse some of the gains we have seen? anna: it's hard to do in the u.s.. in various surveys, biden approval rating is very low. generally how the administration is handling the economy, i don't think they can do that much. i know we should probably see a

little bit of easing over the next two months. dani: we appreciate your time this morning, what a complicated day to sort through. enjoy the rest of your morning. coming up, the u.s. and china agreed to work together to slow global warning. -- global warming. we will discuss that next. this is bloomberg. ♪

>> the world knows what a mess our planet is in. the world has heard leaders from every country, continent, for action, and the world will be

incomprehensible if we fail to deliver that and the backlash will be immense and long-lasting. dani: the u.k. prime minister on the need for global climate action. at the same time china and the u.s. are promising to work together to slow global warming and a surprise joint statement that was issued yesterday. it marks a rare moment of cooperation between superpowers locked in geopolitical rivalry. let's bring in bruce einhorn on this. what is in the climate agreement between china and the u.s.? bruce: is significant that the two sides agree that will cut emissions, including addressing issues like methane, illegal deforestation. they will establish a working group to increase action this decade. that will meet next year for the first time. they've also reaffirmed the

paris accord. there is some significant stuff here. it's not all positive, though. if the u.s. can get china to go along with the plan -- u.s.-backed plan to reduce methane emission. manus: does this affect? ? the broader sentiment the prime minister of the united kingdom said it is all about the finance. do you think i'm trying to make progress is something that will help them over the line essentially? >> i think that is a reasonable possibility. keep in mind that back in 2015 the u.s.-china agreement helped pave the way for the paris accords. we do know that the chinese said

that the two sides are committed to making sure the meeting in glasgow succeeds. dani: what about just broader u.s.-china relations? may frosty is the way to put it. does this change that at all? >> that's a good way of characterizing u.s.-china relations for several years now. at the beginning of the biden administration there was a very difficult meeting that secretary of state tony blinken had with his counterparts in alaska. they are starting -- things are starting to look up. we know that the two presidents are going to have their first face-to-face meeting probably next week. so there are signs of progress. that said, there's also a lot of

potential disagreements and flashpoints. most notably when it comes to taiwan. there were lawmakers who just paid a visit to taiwan. the chinese have had multiple incursions over the aerospace and the last few months. taiwan is a flashpoint these days. manus: someone said to me it's our chips on your island. a bit of high drama there. the richest man in the world sold another block of tesla stock, $4 billion. what's he got now? take it away. dani: he is still doing ok,

worth nearly $300 billion. of course his network has been falling because of the stock sale but i think he will still make out all right. manus: i think he's going to do ok. and there you have it. woah. wireless on the most reliable network nationwide. wow. big deal. we get unlimited for just 30 bucks. sweet. but mine has 5g included. relaaax people. my wireless is crushing it! that's because you all have xfinity mobile with your internet. it's wireless so good, it keeps one-upping itself. switch to xfinity mobile and get $200 back when you bring your own phone. or get a samsung galaxy a42 on us. call, click or visit a store today.

dani: it's 6:30 a.m. in the city of london. i'm dani burger alongside manus cranny from dubai. this is bloomberg "daybreak: europe." weighing on risk appetite, warning inflation is not transitory. the s&p 500 falls the most in a month. climate talks heat up. china and the u.s. vowed to work

together to cool down the planet in a surprise joint statement injecting fresh momentum into the last days of cop 26. and elon musk sells additional tesla shares. it was a hot read, no silver lining in the cpi report. one of the things it did was thrust inflation expectations higher. we've talked about real yields a lot, the spread between the two looks a whole lot less like 2013 , followed by a taper tantrum. manus: some gas have pushed back. been debating the highest cpi since the 1990's. when you look at regime change, a 2000 were at 400 basis points.

2010 was 200 basis points. the maximum in the 20 20's is 100 basis points. a two-year spike, eight basis points. i wouldn't call that a tantrum. dani: that is totally a fair point. the expectation for how high rates go is still very shallow. this is something we talked about yesterday. there is some concern that perhaps the backing of that curve is not priced accurately. perhaps we are downplaying how much the fed might hike by. manus: correct, that is a risk. the fed is full of inflation deniers and perhaps the economists are as well. few people are writing about economics nor have a lot of them

live through higher rates. where do you want to be on a hedge? the dollar is at a one year high. at a one year high on the dollar, dollar is there. we're looking at u.s. treasury futures at the moment, down slightly. does the eye-popping hot cpi as mary daly called it put more pressure on joe biden? the first thing i saw this morning was jeffrey gundlach on twitter. let's talk about the other big event.

it's in the post, it has just been delayed. it is eclipsing every other event, one of the largest recent drivers. some have built a massive following and can move millions of dollars worth of goods in a single broadcast. here's a look at the growth and future of e-commerce live streams. >> these two have such a big following that he wants sold 50,000 units in just five minutes. sales last year of $8.2 billion. it's made her a multibillionaire at age 36 with one broadcast with a record high volume of 36

million people. that's more than the game of thrones finale or the oscars. across mainland china, i'm on streams raked in revenue of about $149 billion last year. that represented about 10 percent of china's annual online retail sales of 610 trillion yuan in 2020. astronomical growth for an industry that was a marketing tool just five years ago. almost 40% of chinese internet users have watched e-commerce live streams. 28,000 companies now operate agencies and several look and said -- said to be considering going public. but all the capital flowing into these influencer incubators have drawn increased scrutiny from beijing. in april, regulators set new rules determining the types of

goods and services sold and how they are marketed to viewers. they also crackdown on fraud with several influencers and agencies accused of selling fake products and inflating figures. the biggest impact could come from regulations linked to beijing's common prosperity drive as part of the initiative to reshape chinese society. authorities have cracked down on the culture of celebrity, putting at risk one of the key pillars of the industry itself. for now it is business as usual but bloomberg intelligence says any potential fallout cannot be quantified until regulations or agreed. dani: look at one of the biggest revenue generators at alibaba. the world's biggest shopping spree this time around is expected to be more subdued than previous years. how is that impacting retailers in china? our next guest is head of the

u.s. firm that runs e-commerce stores in china. he also previously served as u.s. undersecretary of commerce for international trade. frank joins us now. great to have you on the program. a lot to go through with you. as we head into singles' day, setting up e-commerce for foreign companies in china, how has the way you have done business changed in the ease or difficulty of doing business as china has increasingly put regulation on the internet sectors? >> first, thanks for having me on. it's great to be with you today. the challenges are hurdles of running the e-commerce store in china, the single greatest boon to the market over the last year , single greatest impact not

surprisingly has been covid. people are less able to go to shops and stores or arm less inclined to do so. so there has been a huge run-up of e-commerce in china as there has been in the u.s. and other countries around the world. the chinese government is not opposed to the nikes or the procter & gamble's of the world or coca-cola operating e-commerce stores in china. they are fully on board. manus: frank, good to see you this morning. we are grappling with covid and also with regulatory change. how difficult has it made planning and plans to grow in china. has it stymied any of your plans are changed anything for you? >> i think it is fair to say

that question is that the tech sector itself in china is under greater scrutiny and is receiving greater criticism. the platforms themselves like alibaba have issues regarding data privacy, and issue your correspondent just talked about, concerning anticompetitive practices. those are real concern to the platforms. for the individual stores almost platforms, i think overwhelmingly we are going to know in a few hours that this year, with all these economic problems, tech sector scrutiny, single ticket sales and consumer spending and consumer spending in china continues to move up. dani: i want to tap into your expertise of u.s. and china trade. china has all -- only bought about half of the goods it

promised in its 2020 trade deal. should the u.s. be holding china accountable for so far not living up to expectations set out in that table? >> i think the u.s. has made a tactical mistake by putting all of its china focus only directed toward china. if they are concerned about china's performance and china trade issues, what they need to do is cultivate as many friends and allies in the region, in other words the transpacific partnership. to get as much good news going as possible. that in itself puts pressure on china and takes it down a little bit. the u.s. has a -- all china problems must be solved by china, i think it is asking for disappointment and that's what it's getting.

manus: one piece of news that perhaps takes the headline overnight is that china and the u.s. agreeing to work together on climate. in and of itself, is that a significant change, is that something we should be optimistic about? >> i was very glad to see that. for much of the previous presidency and a good part of the biden administration, the u.s.-china dialogue had been almost exclusively negative, one country saying here's what i don't like about you to another country. you got to have some element of this relationship which is collaborative and positive and reminds all the parties that there is a big payoff for the world if the two countries can work together. how do we monitor this and make

sure people are doing what they say? that all eyes in front of us. but at least we have a positive and collaborative statement between these two countries. manus: thanks for giving us your time, i wish you well with the last mile and the delivery there, frank lavan. good to see you. dani: coming up, we will talk more about corporate news for siemens with a slight rise for 2022 margins after the german industrial giant beat estimates. and we will hear from the ceo role in bush, coming up shortly. -- roland bush. this is bloomberg. ♪

manus: this is "daybreak: europe." you broke the numbers at the start of the show on siemens, we have revenue growth for the main division which is higher. my colleague anna edwards caught up with the ceo. >> all in all i believe this is outstanding performance. we had a strong q4. we could manufacture some products that we were shifting from one side to the other due to supply constraints. so it did not come off as perfect as it could be that overall we -- overall we are

happy about q4 performance. >> is there anything you can tell us about your expectations? do you expect to match what you achieved this year? >> our guidance going forward is number one on the top line. single-digit growth after 11.5% this year. so we are sitting on a high level and we still plan to grow. 5%-8% for fiscal year 2020 two. so we see growth momentum. we are providing earnings-per-share and we are guiding 8.7 euros to 9.1 euros after 8.32 in the current year.

this is an increase. it was a high single-digit increase in percentage. >> let me ask about your global outlook. you seem to be expecting a slowdown in global growth. is this to do with china? >> the slowdown, we have to always figure out there was high growth in 2021. so we go back to seeing moderation of growth going forward. we are relying on automation and also stability. we've seen good growth momentum from china. china is calling for a high-tech agenda. they want to have high tech manufacturing. the demand for automation is

extremely high. at the same time, there is a sustainability agenda. also talking about mobility. i believe from our perspective there is still good momentum in the markets. >> you mention some of the supply chain issues earlier. you say you are still facing challenges related to the pandemic including supply chain risk. how long-lasting do you expect it to be? >> we have two elements, one is price inflation on commodities. the other is the shortage, in particular in semiconductors. our assumption is that it will ease for the second half of the year. still it is a concern, the price

increases their. we could to some extent manage it through our price going forward. at the same time, the supply chain on semiconductors is a topic we should leave for the first of the year. we are trying to get our suppliers managed through the crisis. for the second half of this year, there is hope there is some easing from that perspective as well. >> he talked about cost inflation. other areas of your business where you're going to find it difficult to pass on higher cost and have that kind of pricing power, or do you have pricing power throughout the business? >> we do have pricing power throughout the business. we have price escalation clauses

in our contracts, so that is very easy from a contract perspective. at the same time, we are ordering our supplies very early , so from that perspective we don't see too much of an impact. on the other side we talk about our other business, we do have the pricing power and we can manage that quite well. the environmental impact is on a low double-digit million level so we are able to manage them quite well. manus: that was the siemens ceo. energy upping the guidance from 3.5. strong growth from 5%-8% next year.

the u.k. economy faces an uncertain future. some headwinds between tax and covid. we will have the gdp numbers and give you a look ahead, on bloomberg. ♪

>> the number one economic issue is when interest rates go up as they inevitably will, will asset price come down and will it be more difficult to sustain the values people had over the last year and a half? dani: david rubenstein speaking in berlin. he is the host of the david rubenstein show that errors on bloomberg television. an interesting theme, private equity markets have done so well

, but the thought of risk from inflation from china could derail the rally. manus: they have got mountains of capital to deploy in a zero rate world. dani: everyone i talked to said it is all about tech. if everyone is in tech, what happens to those valuations with inflation going up and interest rates could soon follow suit? manus: let's focus on the u.k. economy. the latest gdp numbers for the third quarter. the country's economy has struggled in this month. not just in the u.k., but globally. good to see you this morning.

will it be a supply chain excuse drama in the data? good morning. >> you are exactly right. growth is expected to have slowed after the rebound from the summer after the winter lockdown. we had the pandemic in the u.k., where you had to stay home if you had come in contact with a positive coronavirus case. it put the bank of england off of raising rates at the meeting last week. the bank of england changed its forecast for the economic outlook. if today's numbers match up with the new outlook, he will keep the bank of england on track to raise rates in the coming months, as it said it would. dani: is that fear about a slowing economic recovery weighing on other economic data? >> absolutely not. it seems the housing market is

tone deaf in the u.k. the latest house price data saying house prices rose in october and they expect them to keep rising over the coming year. that's because the shortage of new property coming to the market is weighing over all other factors. and other data on manufacturing and industrial production will come that will give us a clearer idea of what is going on with brexit in the u.k. dani: it certainly does feel like with the data were getting in that is becoming increasingly difficult to be transitory. manus: the fed are considering other -- all the options on the table.

i think lizzie should call them and tell them to move the property prices higher. dani: that's it for us on bloomberg "daybreak: europe." the european open is up next. this is bloomberg. ♪

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anna: good morning. welcome to bloomberg markets europe. i'm anna edwards. mark cudmore joins me in singapore to take us through the market action. the cash trade is just less than an hour away. the hottest u.s. i print in 30 years ways on risk appetite. the s&p 500 falls the most in a month. big day today.