situation. vladimir putin is demanding binding security guarantees against nato. the biden administration and allies have been discussing export controls on russia including curves on sensitive technology and electronics. a court today convicted saying sue chee of criminal charges, sentencing her to for years in prison. the charges were related to illegally importing walkie-talkies and breaking pandemic rules. she has been detained since february when her government was forced out in an early morning coup. the omicron variant has spread in a porch 80 near beijing. officials told millions of residents not to leave unless essential. the variant is now at the doorstep of the capital, less than one month from the

olympics. in australia, novak djokovic and was back on the tennis courts, hours after a judge revoked his visa cancellation. last week, officials decided he didn't have enough justification to enter the country unvaccinated to play in the australian open and detained him in a hotel. the government could still cancel the visa a second time. 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 ed ludlow. this is bloomberg. ♪ matt: it is 1:00 in new york, 6:00 in london 2:00 a.m. in hong , kong. i'm matt miller. welcome to bloomberg markets. here are the top stories we are following from around the world.

stocks on pays for their longest losing streak since the number. we will bring you market coverage and bricked on what is driving losses with tracie mcmillion with wells fargo. and we get insight into the health of the luxury auto industry with torsten muller-otvos, the ceo of rolls-royce. they unveiled their new electric specter. and then we go to the jp morgan health care conference to speak with the ceo of novavax, as the company shipped its first doses of the covid-19 vaccine to europe. breaking news. tiger global lost money in december, more than 10%. that means it lost 7% for the entire year of 2021. the first annual drop for tiger global since 2016. it is just the third annual loss for the $100 billion hedge fund it its two decade history.

tiger global lost money last year. let's take a look at what is going on in the markets. the s&p 500 fallen 1.4% right now, has been down 2% today. the nasdaq getting hit the hardest, aztec stocks lead the way down. the 10-year yield has been impressive, rallying over 1.8%, the first time reaching that level since it started. right now at 1.7763. the bloomberg dollar index rising but not a huge rally. we have seen this monster rally in yields, rates, but the dollar has not kept up. 1187 on the bloomberg dollar index. the 10-year yield gaining 30 basis points over the last six days. really a massive move higher. nymex crude also higher.

78.20. that is still a high level for west texas intermediate, getting close to that $80 mark. here is something that caught my eye in regard to the turmoil in the market. jim b young go tweeting out some context just how bad last week was for violence, included a chart. he wrote the 10 year note at its worst week in 42 years, with a total return loss of 4.24%. only february 19 80's saw a bigger loss for a calendar week. that was four point -- the fifth worst of all time. 1980 was when paul volcker was trying to fight inflation, saw yields go up to 21%. for more, let's bring in tracie mcmillion wells fargo -- from

wells fargo. how did you experience this incredible run in rates last week, and do you think we are done with it? tracie: i say we are probably not done with it, with the 10 year hovering around 1.8%, that is still lower than the fed's target for inflation, which is 2% in the long-term. at 1.8%, that is still a negative real yield. we think rates will continue to climb here. we see them ending the year 20 to 70 basis points higher, around 2%, 2.5%. probably a little more pain in the bond market before we end the year. matt: what does this mean for stocks? i was looking at the run-up in the 10 year, and it's pretty striking, especially when you compare it to the s&p yielding less than 1.3%. all of a sudden, boring 10 year

treasuries are yielding 1.8. tracie: investors are always looking for that relative advantage. with interest rates moving higher, we see them discounting future earnings at higher rates. that brings down the prices that investors are willing to pay for equities. we think that is what we are seeing in the equity markets. as you point out, the dividend is now lower than the 10 year treasury, so that will have some investors moving over to fixed income for that relative advantage. but remember, there is more to the equity position than the dividend. there is also the growth potential. we think earnings growth will be in the 10% to 12% range this year. that will drive equities higher. matt: 10% to 12% is pretty bullish for 2022, even with this wave of omicron.

we are showing the chart right now, 10-year yield's pickup over the s&p dividend yield. if growth is there at that level, that would impress a lot of investors, pulled them back into the stock market, if they made this rotation. what do you think causes that, are you not worried about everyone calling in sick with omicron? tracie: we think in the first quarter, omicron will have an impact. it will have an impact in terms of probably some giveback in growth. also it could have an inflationary impact as well with workers calling out sick, possibly some supply chain tightening. but we think all of that moderate in the second quarter. we see growth starting to recoup some of the losses, lower growth that we saw in the first quarter, and we see inflation

moderating over the course of the year. matt: what do you think about four rate hikes this year? that is the latest forecast from goldman sachs. the dot plot the fed put out themselves shows three rate hikes. before that we were thinking about two. how does that trajectory affect your strategy? tracie: what is kind of missing from the conversation here is that the fed is still accommodative. right now, the fed is still buying bonds. they will be accommodative through march. that is when they will probably start to tighten by increasing interest rates. we don't see balance sheet reduction this year. the fed will have to calibrate their response to what is happening in the markets, what is happening in the economy, what consumers are doing. yes, the tough talk right now is already having an impact on the fixed income rockets, equity prices, but it will also have an

impact. they want to avoid disruptions in the economy and the market. we may be assuming at this point that they will have to tighten more than they actually will. matt: it is interesting that we will also watch the runoff in the balance sheet. i hear some people say that quantitative tightening move could even count in terms of financial conditions as one rate rise. what are you looking for in terms of financial conditions? tracie: what we are looking for in the coming year is that financial conditions will continue to be fairly attractive. we will be, like i said, accommodation in the first few months, and then we will see the fed probably tighten twice this year. that is lower than what the street is expecting, but we think the second half gets more complicated. the fat is active, starting to

see some stimulus runoff, and midterms are in the second half. they may have to be a little more cautious than. matt: great to get your insight. thanks for joining us. tracie mcmillion is the head of global asset allocation strategy for wells fargo. a record year for rolls-royce. we will speak to the ceo on what was behind the car year's banner sales and what to expect this year as they release the electric specter. this is bloomberg. ♪

matt: this is bloomberg markets.

i'm matt miller. rolls-royce achieved a record year for sales in 2021, delivered or cars than in its 117-year history as a result of surging demand for all models. joining us now is, to talk about that demand. thanks for sharing some time with us. i know 2020 was difficult. a drop of 26% in sales. i'm assuming because of lags in production. have you managed to ramp that backup in 2021? torsten: first about, thanks for having me, great to be on your show. 2021 from the very day onwards was a very positive year. we already entered into 2021

with a strong order book coming from a strong fourth quarter in 2020. 2020 started on the back of the pandemic very weak. we were even forced to shut down plants for two months. but the record result this year is still up. plus 49%. these are unprecedented levels for us. the interesting thing is, we have seen growth in all markets worldwide. for the first time in my 10, 12 years i have seen not a single market fading or being in recession or whatever. every market is very strong and going unbelievable. matt: the demand that propelled an all-time record for you last year, you see that continuing at the same levels as we enter into 2022? what does the order book look like right now? torsten: the order books look

very strong, even better than how we entered 2021. we are now sitting on an order book that reaches into october already this year. that basically means that if you order a rolls-royce today, you will not take delivery until next year. that is what i call a healthy order book, good situation for us, to sit on what i call one-year waiting times for one of our lovely products. matt: what is the best selling vehicle you have got? i have always loved the ghost, but the phantom is more luxurious, and the suv has to be the newest, most exciting thing. what are you selling the most of? torsten: the new ghost is a stunning success worldwide. also on the back of black patch

ghost, we have seen brilliant sales numbers. ghost and cullinan are head to head. cullinan, after being in the market for so long, is going from strength to strength. both cars are caring the main volume. there is the pinnacle phantom. even better than last year. we have not seen a single weakness in a single model. everything worked extremely well. i am very glad about it. matt: i love the powertrain, a huge draw for the rolls-royce. but you have incredible technology built into the cars as well. i imagine you probably use more chips than any other product in the industry. what is your experience getting a hold of chips? i am sure your parent company

gives you a little bit more because you have better markets. torsten: exactly. that is how it plays. i am glad that we are part of the bmw group. we always got preferential delivery for semiconductors. whenever we wanted to get, we got. that enabled us to build all of the cars on waiting lists for clients, and we didn't lose a single car last year. i also foresee this happening this year. in total, the bmw group managed chip prices well. when you see the performance in total, bmw as a brand, brilliant, now leading the segment. matt: they have done a great job there. it is not just the technology and drivetrain. you use woods and leathers that other carmakers cannot get a

hold of, even when not in a supply chain crisis. has that cause you problems, have you been able to deal with that as well? torsten: we were able to deal with it as well because we were able to forecast early enough. we see the trends continue into bespoke cars. for that reason, we stock these precious materials that you were mentioning, and we were on the lucky side that our prognosis was spot on, forecasting what kind of materials we would need, what quantities we would need. that enabled us to build all cars up to spec. matt: when will we learn more about the spectre? i have been delving deeply into the world of ev's lately. i have a look details about the size of the battery, possible range, when will i get these kinds of details from you? torsten: later in the year, not

now. it is a brilliant car. rest assured, i have driven it already. it is now in the testing program, extensive testing program for the car. we can talk later in the year about technical details. rest assured, it deserves the nameplate rolls-royce, and it will be magnificent. that is the most important thing for our clients, it needs to be a rolls-royce, and then second, electric. matt: if you need any help with the testing, you know who to call. i think bloomberg's hannah elliott actually has a rolls-royce. anyways, thank you for your time, torsten muller-otvos. giving a look into his order book. the pfizer ceo describes why the drug join is partnering to develop drugs for rare genetic

diseases. this is bloomberg. ♪

matt: this is bloomberg markets. i'm matt miller. let's get a check on where markets are right now. we have seen a decline in stocks to kickoff the week, pretty big, but it's getting a little bit better. the s&p 500 was down 2%, now down 1.3% after a rough week last week. we are seeing tech stocks move out -- lose out the most. the 10-year yield at one point was up above 1.8. still, 26 points higher than it was six sessions ago. the dollar index not doing a lot. nymex crude falling to 78.15.

let's take a look at cardinal health. they are falling after the drug distributors said inflation and supply constraints could c ut adjusted eps. pfizer says it will pay as much as $1.3 billion to partner up with other companies to develop technology to manipulate dna. albert bourla says the partnership will allow it to expand into experimental science without risking as much capital. >> sometimes being a could partner provide better results than owning a company. we have proven that this works well with biotech. i don't say that you will not see also acquisitions from our side on this front, but right

now, in this specific area, partnerships will give us exactly what we want without dedicating the amount of capital that would be needed if we wanted to acquire the company. >> what does that mean for capital allocation elsewhere? what kind of door doesn't open up if there are a series of bets and partnerships? >> this is one of the top priorities that pfizer and myself are having. number one is to stay ahead of the virus, covid. this is with the company needs to do because that is what the world needs. but the number two priority is to invest a lot of capital that has been accumulated over the normal course of business. it used to be an investment in science. we believe we have the

development machine, the manufacturing, the commercial machines, all of these platforms are waiting for new sites, breakthrough science to come in with solutions for humankind. this is where the capital will go. matt: that was the ceo of pfizer, albert bourla, today. let's take a look at cryptocurrencies. we have been talking a lot about this story of cz. he has been estimated by bloomberg you have about $95 billion in well, putting him as may be the 10th richest person in the world. that number is dropping as the valley of bitcoin falls. now down about 2.2%. 41,381.

it has been a rough time for bitcoin as the stock market falls and the fed starts talking about unwinding its balance sheet and raising rates. kind of the opposite reason that people were buying bitcoin. shares of novavax are higher today after the drugmaker announced it started shipping its covid vaccines to europe. we will discuss that with the ceo of novavax. stan erck joins us next. this is bloomberg. ♪

>> iran's foreign ministry says it wants a copper has a nuclear deal with world powers that

removes sanctions, including on oil x arts and will not settle for an interim agreement. the comments come as efforts continue to revive the 2015 accord that limited iran's atomic activities in return for u.s. sanctions relief. the u.k. education minister says the country is on a path toward transitioning from pandemic to endemic. the minister also suggested it would help to cut isolation periods to five days to ease workforce shortages. public schools in chicago are closed again for the fourth straight academic day. authorities have not reached a deal with the teachers union over more measures to prevent coronavirus. teachers voted to shift back to remote learning. the district because that an illegal strike.

new york mayor eric adams has revised the death toll in that dudley fire, saying 17 people were killed, two fewer than thought. a malfunctioning space heater is to blame for new york city's deadliest fire in three decades. he says there is no reason to believe the building did not comply with fire code. 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 ed ludlow. this is bloomberg. ♪ >> jon erlichman. welcome to bloomberg markets. matt: i'm matt miller. here are the top stories we are following for you. we will go to the jp morgan health care conference to speak with the ceo of novavax, as the

company ships its first doses of the covid-19 vaccine to europe. and jay powell sets to face the senate tomorrow. his confirmation hearing could shed light on future regulatory plans amid the hawkish fomc minutes. talking a big game, take two's had to be buying zynga in a deal valued to be at $11 billion. why this has take-two's shares plummeting. jon: we will keep that deal focus in check. when it comes to the broader markets, we see a continuing selling session on wall street and toronto, pressure when we think about the weakness on technology stocks. the s&p 500 has come off of its weakest levels of the day but we are still down for a fifth day. for the year, down 3%. we will talk more about the interest rate environment and

how that is creating a reassessment of sorts in the stock market. also, the market getting a fresh assessment from what is happening with novavax. let's turn to the latest on covid-19. that company announcing it has started shipping the first doses of its covid-19 vaccine to europe, making the drug companies entry into that market. president and ceo stan erck joins us now to talk about this development. thanks for being with us. let's start with the news in europe and how you got to the point where shipments could be sent to europe. stan: thank you. it is a big milestone for the company. we started shipping our first product last month by shipping 10 million doses to indonesia. they have started back sitting there, so that is a first for the company. we followed up with shipments to the u.k. starting today.

we will continue that through the first quarter, planning on shipping 27 million doses there. a few days ago we got an increase in that order, adding 42 million doses in the second quarter, so there is a lot of pent-up demand for the vaccine. on top of that, we are waiting for approvals within the next 90 days for places like australia, canada, the u.k., and hopefully the u.s. it is a big transition for the company. matt: what kind of efficacy are we looking at in this vaccine? and tell us about the covax commitment you have made. it is a billion-dollar commitment. stan: it is a billion does commitment. that is very big for us. we had funding from world organizations that funded part of the work in the early days.

we decided that we would follow the policy of equitable global access. we wanted to get doses out into the low and middle income countries as soon as possible, and we have done. that will be a big part of the business going forward. i'm sorry, what was the first part of your question? matt: the efficacy of the vaccine. how well does it work? stan: we have at least the best were on par with the best vaccines, 96% efficacy with our trials when you measure against the original strain. when you measure against variants, which we were able to do, you got anywhere from 86% to 96% efficacy, so we have a really good vaccine coupled with the fact that it is very tolerable. very benign safety profile.

we think we have got a good batch. on top of that, we can ship the vaccine using just refrigerator temperatures, nine-month shelflife, so a lot of favorable characteristics. it will help us to get the product shipped and used globally. matt: a lot of people complain about the boosters, they don't want to get shots, but we do get flu shots every year. i am hoping that at some point i can get a combination yearly booster. is this a possibility with your vaccine? stan: great question because that is exactly what we are doing. we started a combination trial last september, knowing that these two could be used together , possibly in an annual seasonal vaccine. we now know it has become more clear that you need to boost covid.

we don't know if it is six months or every year like the flu is. but we did an animal study that showed they both work well. we started the human trial in september. we will be getting data in a couple of months on our combination flu covid vaccine. the goal is to get that into the marketplace and a couple of years. that would be a great breakthrough, so that everyone could get one shot with a combination vaccine every year. jon: given you have this european milestone, and i'm sure people in north america are watching closely on the regulatory front, you alluded to these markets where you have applied for approvals. can you give us an update on the fta process, in terms of canada, when you're expectations are for the approval process? stan: canada has been an important partner of ours early on as well. in both canada and the u.s., we filed our complete package of data to the regulatory agencies.

canada has been working closely with the other regulatory agencies in europe, is evaluating our application right now. in the u.s., same thing. we filed all of our data. there was official guidance by the usda that you had to wait 30 days from filing that data to the official act of asking for emergency use authorization. that will be in january. that it is up to the regulators to review the process. matt: in terms of other things you are working on, what else is there, or are you completely focused on covid-19 right now? stan: no, in fact, we have a panoply of respiratory vaccines, rsv, flu, covid. they could eventually all be in a single syringe.

we have done trials in all populations, elder folks, pregnant women for rsv. we have an effective platform for repertory vaccines. on top of that, we have a malaria vaccine in phase three clinical trials with our partners. we have a very potent platform of vaccines. jon: before we go, i know you have fielded a lot of questions on this covid-19 vaccine and its effectiveness versus omicron. given what has happened with the overcrowded variant being more focused on that kind of treatment, but can you tell us on that front? stan: we found out two things. one, our current vaccine, has brought protection against a number of variants, makes broad

antibody responses including two what is circulating now, delta and omer ron. the second part of that is the moment we heard about omicron, we started working on that vaccine. in december, we made a vaccine, put it into production, where you start scaling up production. we are doing that now. our expectation is to start a human trial this quarter. then we have to look at the data. it may be that our current vaccine is sufficiently potent against omicron. then it is better not to change the vaccine. or maybe we need an omicron specific booster. the data will tell us that. we will let everyone know after we have talked with world health organization's about the best way to go. matt: great to get some time with you, thanks for joining us today.

a very important milestone for your company in this pandemic. stan erck, ceo of novavax, talking about their highly effective vaccine. coming up, digging further into the moves that we see in the rates market ahead of the repricing of fed hikes. kathy bostjancic joins us, chief u.s. economist at oxford economics. this is bloomberg. ♪

matt: this is bloomberg markets. i'm matt miller. with jon erlichman. it is the call that has everyone's attention on wall street today. goldman sachs' jan hatzius

expects four rate hikes this year. with inflation probably still above target at that point. we no longer think the start of runoff will substitute for a quarterly rate hike. that is one key part of this. we continue to see hikes in march, june, and september, and have added a hike in september. they no longer think the supper to for runoff. they are adding a quarterly rate hike because of that, not expecting four rather than the three, which already surprised us as hawkish. we were looking for two before we saw that dot plot. it is really starting to get revved up in terms of expectations. jon: absolutely. that is why many are anticipating what kind of

comment we will get from jay powell this week in front of congress. bill dudley making the case beyond goldman sachs, that may be the fed has to go even further than that, maybe not just four but five. he took issue with how the fed had characterized what was happening in the job market. did they misjudge what was happening there that got us to this point where they have to act faster and the market is jittery? matt: interesting when you grow that in. a weaker than expected jobs report last week, and yet, we added 6.4 million jobs in 2021. i think that may be the most on record. let's get some insight on the fed with kathy bostjancic, chief u.s. financial economist at oxford economics. let me first get your take on, i guess it is a parlor game of sorts, but how many rate hikes do you think the fed will have to do, will be able to pull up

this year? kathy: it's a great question, something we are all grappling with. we officially have lift off in may, three rate hikes for this year. after seeing the really hawkish minutes last week from the federal reserve from this prior policy meeting, it started to make us think that the balance sheet runoff, the shrinkage of the balance sheet could start midyear next year. we penciled in june, maybe july. i have to say, after seeing the payrolls numbers on friday, what you just spoke about, have sympathy for the call that goldman made, maybe rate hikes start in march. we have two fed officials, bullard and another saying that it is live. it could be march. certainly, four is well within

hand. jon: we have got to look at the data and see where we go from here, but going back to those comments i referenced from bill dudley, looking at what we had in front of us, the fed making an assessment that was not necessarily as accurate as possible on the jobs market, that argument that the participation was lagging. is there something you can pinpoint in the fed analysis that we had been hearing prior to this? clearly, the market has been somewhat rattled by this. kathy: the fed's pipit is not just on the stance of policy, but the view of the labor market, as you outline. they really pivoted in terms of what the land maximum employment means. they now have doubts about how quickly, the full extent of the rebound in labor force participation rate. you are looking at inflation

that probably hits 7%. you have a tight labor market. laborforce supply is not rebounding sharply. below 4% unemployment rate, so the fed feels the pressure to act. did they miscalculate? it is difficult with several waves of the virus to really get a handle on what is happening in terms of participation. i think that was the issue. matt: you could read all the bit of politics into it as well. the progressive wing of the party was pushing for a change that would have been possibly more dovish. you bring up the omicron issue. it is difficult to forecast. it looks like 5 million people called in sick to work last week in america. is this having an effect on our economic growth, real, long-term effect?

or is it just a speedbump, a mild cold in the grander scheme of things? kathy: definitely will have an impact on q1 output, economic activity, with so many people out and not able to work. we lowered first quarter gdp pretty substantially. there is other data that points to slower growth, especially on retail sales data, but we have lowered it to around 2% for q1. but we do look for some rebound. we don't think it is a determinate suppression of what goes in the workplace. we see growth rebounding to over 5% in the second quarter, assuming we contain this omicron impact to the first quarter of this year, during the winter. jon: a lot to consider. we will wait for more comments from jay powell this week.

i appreciate your time, kathy bostjancic. the road ahead on rates. coming up, take-two interactive has acquired is inga in a deal north of $11 billion. we will break it down in our stock of the hour, next. this is bloomberg. ♪

jon: this is bloomberg markets. i'm jon erlichman. along with matt miller. we've been watching this big deal of the day, take-two acquiring zynga in a multibillion-dollar deal. investors don't seem to be liking the move, if you go by the share price of take-two, which is having one of its worst days going back a decade. i was talking to you on ipo day for zynga. i was standing outside their headquarters in san francisco.

everyone was walking in with their dogs. you quickly learned that the company was named after the founder's dog. a company that was very much in line with, let's shake things up at a different work environment, and also embrace mobile gaming. i guess that is what take-two is interested in. matt: imagine if i could take steve to work. we would all be better people, and steve would love it. i do remember that. at the time, farmville was the big thing, when everyone on the subway was doing. remember alec baldwin got thrown off a plane because he would not stop his "words with friends", also a zynga game. i couldn't believe the value on this thing. is it worth $11 billion? kriti gupta is examining it for

us. kriti: analysts would say it is absolutely worth that. enterprise value just shy of $13 billion. if you look at just how much of their revenue makes up for that, they are paying top dollar. 64% premium. five years of their revenue for this acquisition. let's put this in perspective with other global game makers. they have been under a lot of pressure, part of that due to school we openings. who thought parents would want to make their kids learn? the chinese market restrictions as well. we have also seen a lot of takeover activity. revenues growing 9.4% annually. if you look at the videogame market, it is a split between traditional consoles and mobile gaming. that is what is going on with the mindset of take-two, the idea that they are trying to enter this digital market, going

past their franchises of grand theft auto and others. matt: talking about probably the biggest videogame deal that has ever been done. if you look at the enterprise value, $12.7 billion. stay with bloomberg. we will speak with the take-two ceo at 3:30 new york time. we will see if people start bringing dogs to work. do we have a picture of steve by the way? jon, it's been a while since you have seen my beautiful baby boy. and he is an avid bloomberg user. this is bloomberg. ♪

ed: here is your first word news. covid infections in new york

city may have reached a peak. it has been one month since the first case of omicron was identified. hospitalizations have dropped since the end of december, according to the department of health. inflation in the u.s. has probably hit its fastest pace in four decades. the consumer price index will come out on wednesday and is forecast to rise 7%. that helps explain a shift in the federal reserve's approach to monetary policy, along with consumer anxiety about the economy. a new study has found that t cells that fight common colds make people less likely to contract the coronavirus. the study provides further evidence of the protective effects of t cells that is gaining attention as the pandemic enters its 30