u.s. moving into ukraine diplomatic. we are sending about -- biden is sitting about 100,000 troops to ukraine amid fear of a russian invasion of ukraine. the french president is taking aim at a core issue of the country's presidential campaign. he is pushing to strengthen the european union's of sternal border against migrants. he is excited to run for a second term. conservative and far right candidates have made migration a priority issue, criticizing what they see as the french president's in action on stemming migration inflows. not being vaccinated against covid-19 may end up costing you more than at the doctors. -- more at the doctor's

office. ensures could turn on applicants who refuse the covid-19 vaccine or charge a surcharge. ghislaine maxwell wants a new trial. she was convicted in december of grooming and sexually abusing under age girls with her former boyfriend jeffrey epstein. she says a jury's disclosure of childhood social abuse denied her a fair trial. she is suggesting that the juror might try to destroy evidence of his bias against her. global news 24 hours a day, on-air and at quicktake, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg.

>> good afternoon. i am matt miller, welcome to bloomberg markets. here are the top stories. oil retreats from a fresh seven year high as opec and allies agreed to make another output increase in march, we discuss with the global head of commodities research and strategy at jp morgan. after the global surge in m&a, 2022 sees a strong start. how long can the boom last? christina, goldman sachs position finance head towards us to discuss m&a and the bone in deal activity -- and the boom in hill activity is just one of the factors.

let us take a quick check and what is going on in the markets after three days of rallies. s&p 500 up three quarters of 1%. of the s&p 500 on friday -- the s&p 500 opened at 3300. we made some decent gains after troubling weeks. u.s. 10 year yield is down as investors by the debt. 174.31 is the yield. the bowe bergdahl index coming out at $11 .76. -- the bloomberg index coming down at $11.76. something that caught my eye in the energy sector and that is gas. it is soaring more than 10% above the five dollar mark. this comes as the u.s. gets hit

by a blast of cold weather. a deep-freeze is returning later this month. they are worried about high supplies enter the chart goes parabolic here -- low supplies and the chart goes parabolic here. as we see the cold weather sweeping through the midwest and we are hearing about airport closures throughout texas. stay on watch when it comes to that gas. we have seen this happen in europe where prices are even tighter. opec-plus has agreed to make another modest increase in oil production. crude prices remaining around a seven year high. will they come down? one of the big questions is spare capacity. the global head of karate's research and strategy at jp morgan -- of research and strategy at jp morgan. to the opec countries have

enough to make it up -- do the opec countries have enough to make it up? >> opec agreed to proceed with a hike in march. it is not equal a monthly increase. is below what they have been quoting because some of the members clearly had trouble meeting production. they cannot get the numbers which they are hoping for. matt: i am looking at opec on the bloomberg to find a spare capacity and we see it in saudi arabia which has been described as the shock absorber of opec. elsewhere, it is not there. uae has some and iran has some. how much more can they pull out

of the ground? >> you are correct in terms of some members underperforming. there are many difficult issues preventing production that has been cut over the last two years. at the same time, a couple of the members like saudi arabia and the emirates do have the ability to increase capacity. the alliance views themselves as balancing the market and they are observing what the inventory has been doing and they want to make sure that the supply that they bring into the market actually matches the required demand. from that perspective, what we have been observing so far, we did have a small increase in inventory. it is not that much, not even close to a traditional high as we would have expected. it is actually very measured

responses to make sure that you are not overseen relating the market. matt: putin is saying that encouraging ukraine will be tragic. on the human side, it would be horrendous. in terms of energy prices, how much would a move the market? -- would it move the market? >> the geopolitical risks are rising. russia is one of them, we also have three attacks on the emirates. that is something that we have to keep in mind. in the case of russia, are estimates is that the tensions will increase from the current levels. versus the fair value, it is

about $85 and the market is going up to about 88. a significant amount of risk premium that could eventually make the situation escalate from the current level. matt: what about on the gas side? we are seeing amazing price moves over the past month in european natural gas contracts and of course russia is one of the biggest suppliers to western europe. what kind of price action can we see there? >> similar to what we were predicting in oil. the risks are high, we are trading, there will be escalation in tension. in gas, we believe that the prices could get close to $100 80. higher than what we are currently trading. a massive move.

matt: western europe needs to reduce its russian gas intake? can anyone deliver the supplies that they need? >> not at the moment, no. we saw the news in the administration, reaching out to other partners. we have producers, another source of natural gas supply, they gain nothing but it can be done quickly. we are ready and next capacity because you need to produce again. that is already constrained. it the case of the qatar, they were explicit them adored of their supplies where -- they were explicit that they had supplies based on their agreements.

nothing could be done on a short-term basis. matt: thank you for joining us. coming up, bonuses on wall street, hitting heights not see in a generation. are big takes next, this -- our big takes, next. this is bloomberg. ♪

matt: big bonuses are back on wall street. pay packages at u.s. investment banks have not swelled since the late 2000's. raising bonuses for dealmakers to the tune of $30,000 -- 30%. or more on the big take a story, congratulations. -- for more on the big takes story, congratulations. the big banks are fighting for talent and it is about the social norms for it is accepted to pay big money that it was in 2020. >> wall street was a problematic time. a year after generous government

support and that the industry stayed competitive with the market rebound. they stopped giving investors a lot of money and that caused them to be accused of being tone deaf. they had to show some level of restraint. something changed in 2021. other industries are more lucrative, executives feel that they are in a position to open up their wallets and really pay up for there stock -- their stock violence. -- balance. matt: they showed restraint and that led to an exodus of big money makers. we went to private equity and hedge funds -- they went to private equity and hedge funds. >> once the government

intervened, you had this trading bonanza. this dealmaking bonanza. you had a staff at all of these big banks working longer hours than before. yet, they were getting this message that we cannot pay up. you have 20-year-olds making fortunes in crypto overnight. you see part of equity does not have a feeling for pace. the top executives are being paid. was they started defecting, that was a serious way for people who ran the country's largest banks and they had to come out on the front foot and respond to that. one way is to pay up. matt: it is also worklife balance. we saw videos about how kids were overworked and they needed more time for life. as a banker boxes said that there is no worklife balance and we will pay you a lot. >> of that is not a problem that

can be solved overnight -- that is not a problem that can be sold overnight. they do not know another type of life. to them, you will be worked to the boat and they believe it is absolutely the good and right thing for you. what they can control is the money that you make and wall street can be very competitive. matt: great story, we love it. you can read the story on the bloomberg. go to bloomberg.com. still ahead, some of the big bonuses tied to the huge surge in m&a. goldman sachs remains in the top spot as a financial advisor on deals. we speak with the firm's head of global acquisition finance. this is bloomberg. ♪

matt: this is bloomberg markets. investment banks are waiting more than $100 billion in massive debt packages to help in the battle of global acquisitions. goldman sachs is at the top in market share over the past 12 months in m&a and going back much further beyond that. joining us now is the global head of global -- head of acquisition finance at goldman sachs. she joins us with our star m&a reporter. let us first ask you about the boom that we saw last year and the first month of this year as well. are you readying if building blocks for that to continue? >> absolutely. great to be here.

great to see you in person, hopefully will be out in person in may. a great year, the m&a market was a horrible try -- was a $4.7 billion market. we did $4.1 trillion last year. importantly, we saw sponsors continue to take gain market shares. in the m&a market, therefore point $7 trillion -- that $4.7 trillion was higher. that compares to the peak of 55% a few years ago. we are seeing sponsors. >> we have seen this phenomenon or the equity has come in a lot -- where the liquidity has come in a lot and flown into the market. where does that money find a

home? i look at corporate balance sheets, they look strong. sponsors have a ton of cash. where does all of the low liquidity actually find a home? >> if you take a look at the first month of january, the floating-rate product, the loan front product was extremely robust. we had the single largest lbo value in the history of the loan market. $30 billion came through the loan market. 9 billion lbo loans priced in the first month of the year. four transactions accounted for $25 billion. the size and skill of the transactions occurring is going up meaningfully. a few days ago we announced we refinancing a loan is $15 billion.

there is a lot of supply to fill the demand for the asset class. >> that is citrix. that was one of the top five. i wonder, from where you sit, you see the market go through various phases. you have seen it go -- let us say several cycles and many cycles within those. at the moment, it looks relatively expensive compared to where it was recently. historically, it is still cheap. i wonder how companies are thinking about that. are they expecting to come back in or do they go in on the basis it may go back up? >> if you take a look and what is happening last month and compare it to the types of 2021. we are only 150 y.

in historic terms, pricing lbo debt at 6.5% is very attractive on a historic basis. the loan market is flat to the end of the year. the technical is extremely strong. i predict corporate horrors will realize we have a rising -- our borrowers will realize we have a rising rate and readjust their cost of capital to 150 basis points. as rates rise, that will rise as well. it is an orderly calibration of the cost of buying companies. matt: i was when to ask if the rising rates act as a prod.

with the risk to the upside, does this get clients to go out into the market sooner rather than later? >> if you are an acquisition -- are in acquisition finance, you have a narrow window. you are talking about opportunistic financing, now that the market has fallen from the volatility, you went to see what issuance. -- you are going to see more issuance. that is why we are very bullish on credit and the volume of transactions that we see happening in 2022. >> we have talked about the equity markets and geopolitically, there is a lot that could go wrong. i hear this bullish tone being struck. i wonder from where you sit,

what do you see as the number one risk that could turn this the other way and put us into a struggling market? >> through the credit lens, i would say something more akin to a stagflation environment. the equity markets are watching growth rate very quickly and -- carefully and we are watching markets. geopolitical shocks would not be great. that would derail the credit markets more. it would be a real surprise to the economy. if the fed did not maintain an orderly rate raising environment. matt: how much of the concern is volatility? >> it is manageable. you can be patient and also when you see a window, it is quite manageable. we are going to be in a more volatile environment. that is the reality of recalibration of risk. i am not too concerned about it.

matt: thank you for your insight. coming up, shares of general motors are falling in today's session, even after a pretty big jump yesterday. we speak with the ceo. she weighs in on the results and the supply chain and chip disruption. this is bloomberg. ♪

mark: welcome to the bnn bloomberg audience. british prime minister boris

johnson is dismissing criticism about the conduct of his government and brushing off new coals for a vote of no confidence in his leadership. this after more reports of parties in downing street during covid lockdown. the prime minister told the house of commons it was "more vital than ever for the government to get on with the job of running the country." beijing is ensuring the public that the covid-19 situation is under control, with the olympic games set to open later this week. the city's spokesman says the current pandemic situation in the capital is controllable and headed in a good direction. the city has mass-tested millions and sealed off several neighborhoods, while avoiding a strict lockdown for the entire capital. cold and ice are set to sweep texas, raising the risk of power outages and boosting energy demand in what will be the biggest test of the state's electric grid since last year's

catastrophic lockouts. temperatures in midland, the heart of the permian basin, are expected to remain below freezing until at least friday. the cold weather will raise demand for electricity and natural gas, and could knock out power for many people. the washington team has a new name. the team formally known as the redskins will be called the commanders in 2022. the squad dropped its old name and logo because of complaints that they were offensive. the last two seasons it has been known as the washington football team. 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'm mark crumpton. this is bloomberg.

matt: i'm matt miller. welcome to bloomberg markets. there other top stories we are following. after reporting earnings, gm seeing signs of an easing in the chip shortage. you will hear from mary barra on how 2022 has the potential to be a very good year for the automaker. it is an earnings beat for d.r. horton as it boosted production as builders battle choque to supply chains and labor constraints. the same cannot be said for paypal, as it heads for its worst day ever on the market after missing fourth-quarter earnings estimates and slashing forecasts. the company lost a quarter of its value today. all of that and more coming up. let's get a take on how to -- how the major averages are looking. right now, up more than .25% on the tsx index. hello to our bnn viewers.

the s&p rallying up, .6%, bringing its loss for the year to about 4%, which is better than the 7% saw at the close on friday. the nasdaq up .2%. he did not see that big a rally in tech stocks, which may be surprising after the beat at google. we are waiting for facebook results after the bell. general motors, down after beating the estimates, with one dollar 35 in earnings. -- one dollar 30 five cents in earnings. after making 13 for $4 billion last year, general motors trading down with a bit of a buy the rumor, sell the news situation. that brings it today's what it's worth. gm, its lending unit is cashing in on record used car prices. it looked at a $2 billion game

last year. this is from the reselling of vehicles that came back from expired leases or anything the company took back in trade or reprocessed. that helped gm double its annual profit actor -- after taxes to $5 billion, paying a dividend of 3.5 billion dollars back to the automaker. does it have that cushion this year? the used market is still very strong, with prices quite high. the automotive industry has been slammed by the global chip crunch. that is what is holding those prices up. earlier today bloomberg had a chance to catch up with mary barra and ask her, is there any light at the end of the tunnel? mary: as we look at the end of the year we have been working closely with semiconductor manufacturers to make sure we have the best possible forecast for what we are going to be able to build this year. last year we were hit hard with covid impacts in malaysia.

that is where we say the opportunity to see on a global basis greater than 25 percent increase from a production perspective. that is assuming we are not going to have any dramatic changes from a covid or supply chain perspective, but we vote confident. also what is exciting is, you know there is strong demand for our vehicles. i think 2022 has the opportunity to be a good year. jonathan: i want to hit that demand story. a balance between the chip access and pushing it towards the high-priced vehicles, now it is almost the opposite. you get the better access, you get the better volume, but the average price comes down. how do you balance that? how do you optimize the balance there for 2022? mary: we had record performance this year, and hats off to the gm team. as we get into next year not only are we going to be selling across many more segments. last year in 2021 we focused on

our most in demand and capacity-exchange vehicles. as we open it to other allocations to other products, it is different from a profitability perspective. we also are investing in growth. we are investing for the future. you know there is a huge opportunity not only from an ev perspective, but also across the board from a software perspective. whether it is ev's, we see an opportunity to grow from a services amp subscriptions perspective. jonathan: you have to help me with the numbers. the numbers we have seen in this industry are huge. the team at bloomberg came out with a story, ford, yesterday. you said we are going to be increasing spending. is the answer always going to be more when you are asked how much you need to throw at this story? mary: we have already announced that we are going to invest 35 billion dollars, and we have been investing that in michigan.

$7 billion for conversion of a plant to build trucks, ev trucks, as well as our third battery plant. our fourth battery plant will be making an announcement in the first half of this year, as well as an additional ev truck plant. we are seeing customers' willingness to adapt -- adopt ev's. we are going to continue to do that, and we have the capability to do that. you will see our number grow as we continue to invest in ev capabilities. jonathan: at the end of the call yesterday you talked about a dividend. mary, where is it? do you need to achieve to bring that back into play? mary: we had a capital allocation framework for the last several years to generate a return, as well as has -- have an investment-grade balance sheet, and return the rest of the shareholders. with all of us in front of us to

accelerate ev's and the software-defined vehicle, want to make sure we have maximum flexibility. that is why we are not created stating the dividend as we currently assess the situation. there still are other mechanisms to return value to shareholders, what we want to have the flexibility to support our growth. matt: that was mary barr, general motors chair and ceo speaking with jonathan ferro. for more gm and on the auto industry in general we welcome david wells. he has our detroit bureau chief. david, it doesn't look like the market was terribly impressed, even though they beat by $.15, and forecast as much as $15 billion in profit before interest and taxes this year. what is letting investors down? david: it has been a wild ride with this stock the last day and a half. shares initially did not do well yesterday in aftermarket trading, because people looked

at the high line guidance you talked about, at $15 billion. the company just made about $13.5 billion in -- let's just call it pretax income. it did not look like there was a lot of growth. then as you sort of dug through the earnings statement and letter to shareholders, when you listen to the analyst call, they are sharing -- they are saying they are seeing signs of relief and you will see sales growth this year of 30%. that starts to get general motors back to normal. as you digest more, you've got this $2 billion we got from selling used cars. you will still see very good growth from a finance company this year, but there is headwinds, other commodity prices are going up, so even if semi conductors do well they're going to have issues with other supplies, other parts and things like that. the market puts it together and says, ok, even with strong

growth, even with semi conductors, you know, some of that pressure alleviating, you're still only going to make what we did last year, so we will wait and see if there is a better growth story. i think investors are kind of at the moment just pulling back and waiting to see what happens with gm. matt: i'm glad you brought up ford. it is interesting to me to see ford trading at a higher market value than gm, considering general motors has historically been so much bigger. is the idea that gm has come late to the party with the electric silverado and sierra? they did an all-electric pickup truck in the late 90's, but the lightning has grabbed all of the headlines. david: ford really stole a march on gm here. fort has been talking about its

ev strategy for three years now. they do have the home or for sale right now, but it is low-volume. they have a cadillac. it will be well done. ford came out with a mach e it is doing well. and the lightning you just mentioned will be out before gm has its electric pickup truck out. gm has done a lot of planning, and they have a very legitimate strategy with this platform. they have laid a terrific foundation for that. two battery plants underway, the third one announced. they're going to have three pickup truck plants making electric pickup trucks. it's not here yet, and, you know, the market is waiting and seeing, and ford is already doing it, so ford is getting credit for having moved quickly to get a couple vehicles to market. matt: i have noticed the anya --

online configures have not hit for the 20 sierra and the silverado, or the 20. a lot of these products seem to be coming really late to the market. is that all down to chips? david: yeah, you know, look, i've driven by one of gm's pickup truck plants in michigan and there are a lot of trucks parked out in the yard. he said they have $600 million in vehicles in inventory, basically unfinished. they need some kind of semi conductor or module. they have $600 million worth of vehicles parked in the yard. that could be playing into what you are seeing online. that the vehicles are not there yet so they are not switching over the model year yet, so they are not able to configure the 2022's. matt: i can't even configure a 2022 mustang. i'm telling you, man, this is ruining my february. thanks so much for joining us. david welch there talking to us

about general motors and ford. remember, we get there earnings on thursday. quick note on amc. we have seen them double their issuance of high-yield debt. there were selling $500 million of junk bonds to refinance expensive debt. they have now doubled that 10 $950 million. this is related quite well to what we were talking about with christina. they see a window and ac rates rising, and they go to get it. paypal plummets. my payment volume is the weakest it has been in two years and fell showed of analysts' expectations. the stock lost a quarter of its value today. that is next. this is bloomberg. ♪ [speaking foreign language]

matt: this is bloomberg markets. i'm matt miller. time now for our stock of the hour. paypal is headed for its worst day ever after missing fourth-quarter estimates and slashing forecasts. certainly it has been cut down by a quarter. they lost, what, $50 billion in market cap today? >> it is not looking good. they have had one of the worst performers for the s&p 500. it is kind of a recovery trade, almost, in the skies. you have the idea that not as many people are using fintech broadly. those gains he were seeing, they are not going to come up with that same momentum. when you look at total payment volume, a climbed just 23%. compared to that period where paypal was soaring, so spending

slowed in the fourth quarter. a big part of this is just e-commerce. supply chain concerns, inventories were cut too. matt: i'm wondering if this is about competition. i am the oldest of four brothers. and i'm pretty old. we were splitting the cost of flowers for my mom, and all of the younger ones paid with venmo or something i don't have. and they messaged me and said, ok paypal it because you are so old. is that an issue? kriti: it is an issue, that is a thing because it is easier, right? paypal is a more antiquated in terms of how you use online payment systems. things have evolved since then and you are not the only one who thinks that way. we are seeing that with ebay as well. they are moving some of their expenses over and away from paypal. the ceo saying ebay's migration to managed payment happened way faster than we anticipated. so you are seeing some of that volume come from ebay as well.

matt: what are they going to do about it? are they going to the blockchain? are they going to do something cool and new? they have a plan? kriti: they are still trying to get those accounts up. it is how many more people they cannot. they are looking at 20 million new accounts this year. but put that in perspective because they have also had a goal of 700 50 million active accounts by 2025. they have cut that to four and a 26 million. not a pretty picture when it comes to usage, but also they are trying to pull out some of those fake accounts that had been -- that had joined for incentives. they're pulling out about 4.5 million accounts. that means fewer accounts on average. matt: better than bad actors, right? kriti gupta with our stock of the hour. wharton pops up -- pumps up production. it has been very bad, obviously,

as someone who has been looking for a house. he will discuss earnings next. this is bloomberg.

matt: this is bloomberg markets. homebuilder d.r. horton managed to increase production as home listings sank to a record low. prices going the other direction. the homebuilder reported quarterly orders that beat expectations. here to discuss, ken leon, research director at cfra research. paul sweeney and i have been asking on bloomberg radio for a year, when they going to boost production? it is not as easy as that, right? they need the raw materials, they need the labor, and it was difficult to do. what is the outlook? ken: there is a 20-your housing

shortage, and the financial crisis did not help. when you talk about large builders like d.r. horton, got 551,000 lots that they are going to be building high-velocity for entry-level homebuyers. that is huge, because the owner -- own versus rent, that is now tilting toward ownership. this year rental rates are going to be up 15% to 20%. places like new york, definitely north of 20%. that compels a lot of people to take a good look at buying a home. that might be 1600 square feet, and d.r. horton is the leader for entry-level homes. we upgraded the strauch -- the stock today. it is a great into price -- entry price at $90. our target is $120. they got more than half of this

year's business book 10 backlog. matt: you cover the whole gamut here. you cover the homebuilders, plus the lowe's and home depot. what is a rising rate environment going to do -- especially to the homebuilders, to the buyers, right? ken: it's a great question, and from my perch, looking back since 1980 homebuilders and housing can still do well in a rising-rate environment, provided the economy remains stable to strong. i think we are in that situation as we look at 2022 and 2023. mortgage rates probably have more impact on whether it is nice to own a bigger home versus my example of moving out of expensive rentals into very affordable entry-level homes. so, there it really matters in terms of salary.

not so much the wealth effect from the stock market. i think there will be some moderation, but this story is changing, matt, to not just being one of growth, but a return on invested capital. these homebuilders are getting record low, in terms of mortgages and return on equity. north of 30%. we have never seen that before, and unlike my example of the financial crisis in 2010, these builders were highly-leveraged. they are not today. they have record-low that to total capital ratio. it is a pretty strong position to be in. matt: 30 seconds here, but we have seen rising input costs for raw materials. obviously wages have been rising as well and that does not look like it is going to stop. can they pass this inflation along?

ken: so far they have pricing power. we'll see price increases moderate, but we also think inflation will moderate as well. the large builders, they have, really, the scale and muscle to get more attractive rates with subcontractors. matt: great to have you. thanks so much for your expertise. ken leon is the director of research at cfra research. he covers the big banks, the homebuilders, as well as lowe's and home depot. great to get his take on the market. i'm matt miller as we rally into the close. this is bloomberg. ♪

mark: i'm mark crumpton with bloomberg's word news. russia is calling the u.s.

decision to move more forces to eastern europe "unjustified and destructive. the kremlin warmed he could complement diplomatic efforts to resolve the crisis of ukraine. president biden announced he is sending about 2000 american-based troops to poland and germany, and shifting 1000 soldiers from germany to romania. amid fears of the russian invasion of ukraine. it is time for the nation to accept a covid-19 is here to stay. that today from senate minority leader mitch mcconnell. speaking on the senate floor, mcconnell said it is time for the state of emergency to "wind down." he also said he wants unallocated pandemic relief funds to be accounted for, and he questioned the need for additional virus relief spending. u.s. airlines have grown to more than 3000 flights for today and tomorrow, as a powerful winter storm spreads across the country from