tv Bloomberg Markets Bloomberg March 14, 2022 1:30pm-2:00pm EDT
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president biden making a visit to unspecified destinations in europe, according to people familiar with the matter. the president has sought to reassure nato allies on the eastern plunge that they have u.s. backing as russia presses on with its invasion of ukraine. a negotiator and advisor to president volodymyr zelensky's chief of staff says there is now a technical pause in talks with russia, which will last until tomorrow. the focus of the talks had been on securing a more substantial cease-fire. so far, there have only been brief pauses in the fighting to allow refugees to leave. democratic senator joe manchin of west virginia says he will not back president biden's nominee for the federal reserve, ceremony raskin. senator manchin has joined republicans in opposing raskin over her stance on climate change.
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pennsylvania senator pat toomey told bloomberg today that manchin's opposition likely scuttles the nomination. jp morgan will lift its ban on hiring unvaccinated people starting next month. the largest bank in the united states will also make wearing masks voluntary. jp morgan says masking in its corporate offices will be voluntary for both vaccinated and unvaccinated staff, effective immediately. global news 24 hours a day, on air, at bloomberg @quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg.
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>> welcome to "bloomberg markets." matt: i am matt miller. oil takes a slide, crew dropping more than 5%, touching below $100 per barrel since the start of the month. we will keep our eye on that. plus, chinese stocks post their biggest plunge since the global financial crisis. jp morgan calls the internet group on investable. we will explain why we will speak with sean boyd, the executive chair of eco-minds about whether they are expecting further drops for the precious metal. jon: matt, let's get back to the story of the averages. the canadian market, which has benefited, has run out, and we will talk more about that in a second, but matt talked about the weakness with chinese
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related stocks tied to the uncertainty out of china right now, so that has been felt in the technology sector. outside of financials, you have not seen a lot of conviction buying out there, and then we come back to that story of commodities and that price of oil, which we just talked about. we have watched such wild action on a daily basis. there is a look at the one-month chart for wti. we saw that surged toward 125, and here we are making our way back toward 100 right now. i had a conversation with rebecca babbitt, a veteran energy trader, who tried to quantify how much of the moves we are seeing each daegis tied up in political risk, and she estimates it is around $30 a barrel, going back to where we were late last year, around $85, and at that level, that was a better representation of the supply demand dynamics coming in to 2022, that there was not a lot of geopolitical risk out
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there, but my point in that estimate is, you can go up or down, i guess, when you are talking about a $30 per barrel association with something that is pretty intangible like geopolitical risks. matt: it really changes the picture in terms of the supply chain for energy products, right? we are going to see company is completely rearranging how they get the fossil fuels that they are burning, certainly in europe, and even here in the u.s., and canada to some extent, you are going to see one group of oil producers never being used again, or at least not for maybe a couple of decades, it looks like, and that means we are going to have to find other ways to get it, for example, in the shale, we are going to have to try to convince those producers to produce more, and
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that is going to take more than saying, you know, we gave you 9000 leases. go to your job already. jon: that is part of the energy crisis conversation we are covering, and of course the headlines a key part of the story, matt, and we have these reports the white house is discussing plans for president joe biden japan trip to europe. the eu diplomats are discussing a sanction package against russia. let's get some perspective. a director for global risk analysis, wonderful to have you with us. mark crumpton in our newscast was talking about the technical pause between talks between russia and ukraine. how would you interpret the conversation at this point? >> we are getting valuable information from the talks. the only thing we know is there has not been much progress so far in addressing, you know, the
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key issues that remain on the table. clearly we are seeing russia downgrading its initial demand from the talks, taking off the table the demand for ukrainian government and the immediate demilitarization but still very much insisting on ukraine recognizing crimea as part of russia, as well as recognizing the independence of the separatist republics, something that ukraine does not want to concede. on big issues, we are still very far away. however, i think the two sides may issue more agreements on cease-fires, in order to ease what is now increasingly desperate situation on the ground for casualties and refugees fleeing hugh grant. matt: and refugee -- fleeing ukraine. matt: and refugee corridors, right?
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russian soldiers are still firing on these escape corridors, where they are trying to get out of cities, i think they have 12 set up across ukraine. is that one of the issues, that they will be able to nail down in talks? oksana: it is very difficult to see for all of those corridors to be able to observe. the truth is that the situation in ukraine at the moment is very fluid and extremely dangerous there's a lot of military forces in ukraine, russian forces in different positions. it is very hard to guarantee. we don't often see people trying to flee and then really confronted with forces, so it is really quite desperate. clearly the key issue now is what to do with major cities, such as kyiv and kharkiv, where
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they need to be able to leave those towns before further edits collation of fighting, which we expect in the coming days. jon: oksana, let's put that on context with the bloomberg reporting about the trip by the president to europe, certainly something that could send a message to nato allies. i am curious to know what vladimir putin with think about that trip as well. what are the risks and potential rewards of the president making his trip to europe? oksana: it is very important that the united states and europe have been coordinating , and we have seen coordinated sanctions, policies, support for ukraine. but perhaps we are now at a very critical point, where there are growing concerns about the spillover of the crisis. there is growing demand from ukraine about further escalation, and also about the dangerous escalations on the
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ground, and therefore, you know, president biden wants to reemphasize this unity with europe but perhaps also explore other options for the west to be able to deal with this potential further escalation. and we have seen of course russia packing a peacekeeping base in western ukraine, only kilometers from the polish border. matt: you know, oksana, we have been asking for weeks, what is vladimir putin want? the defense ministry official i spoke with today said he wants to get back to the ussr, and he clearly wants to create some kind of laden's round -- realm with ukraine. how difficult would that be to do with 40 million people that are fighting back?
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oksana: absolutely. we have seen progress in the last week or 10 days on the battlefield. russia is making very big progress taking over the ukraine territory. they think they are able to do that, and clearly they have to change their military tactics, and we see the use of indiscriminate weapons. or they have to find a way to negotiate their objective. and clearly the objective of taking control of the entirety of ukraine now looks completely beyond reach. it is also difficult to imagine at the moment that russia will be able to take control over the last city. so perhaps putin will be able to concentrate on its allegiance, close the russian border, where russia is seeing some progress and perhaps tries to convert it into some tactical gains. but strategically, very difficult to see how that will
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deliver on initial objectives that will put on the table at the start. matt: caps on, thank you for joining us -- oksana, thank you for joining us, oksana antonenko, control risks group director for global risks analysis. chinese tech stocks had its worst day since 2008 could we will break down the crash in our stock of the hour, next. this is bloomberg. ♪ this is bloomberg. ♪
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matt: this is "bloomberg markets ." imf miller with jon erlichman. u.s. stocks are session lows. one getting hit hard are chinese tech stocks, bringing us to our stock of the hour. we are going to focus on tencent. it is not just tencent, though. >> is not just tencent. matt: it is unbelievable how bad these chinese stocks are. >> it was not long ago that it was called un-investable. there's regulatory scrutiny. remember, shenzhen is the technology hub of china, so when
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you see companies like foxconn, for example, shutting down their plans, it is going to hit the major chinese companies that are based there. on top of that, jp morgan also pulling the plug on those chinese tech stocks, downgrading 28 stocks that work listed both in the united states and hong kong. those chinese adr's having the worst of it. jon: un-investable is a scary concept when you think about companies like alibaba and tencent creating loosely have a trillion dollars in value in the markets, going back to where, i guess they were, call it at their highs come in 2020, you know, it is pretty astounding to see those drops, considering this company still have large market caps. kriti: to your point, remember what a great investment these were considered at the start of 2021, that you were not only going to invest in these big
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tech companies, but you were getting your e.m., your cyclical, too, but to your point, you are seeing a massive decline in the tech index on the other site of the world. you are seeing this in tech broadly in asia. matt: can we go back to that chart for a second? it says 11% loss, but i am seeing a drop from 11,000 to less than 4000, so really that is a one-day loss we are talking about. this chart shows he really a 60%, 70% drop from the highs. kriti: do you pull out of the market because everyone is pulling out of the market, or is this the time to buy? that is where we see the conversation of uninvestable come back to the forefront. does a selloff like this, at some level, do you start to see people buy again? that is the question, by the
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jon: this is "bloomberg markets ." i am jon erlichman with matt miller. we talked about the roller coaster ride for oil. let's stay in the commodity train, and take a look at what is happening with the price of gold. recently we saw bullion moving to record levels, getting pretty darn close. now we have got this story, as we take a look at spot gold, down 1.5% of the day, to talk a little bit more about the rising
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rate environment, which for a euro rate asset, maybe not all that alluring. but in an environment where we endlessly talk about inflation, there has been a lot of appetite for gold recently. matt: absolutely. we are trained from a young age to think of it as an inflation hedge. on the other hand, if you are getting no risk for more and more, or more returns on no risk, then gold looks less attractive, especially if that return turns real, jon, that made change the game, although there's still going to be people who see gold as kind of the ultimate inflation hedge, especially when you are in the midst of real geopolitical tension, of war. jon: absolutely, and gold has that loyal contingent as well. let's talk to somebody was in this business each and everyday. sean boyd is executive chair of the canadian gold mine agnico eagle.
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not just in canada but australia, finland, and mexico. sean, i guess the other context here is gold had such a big move so quickly, some people had to wonder if we would see a little bit of a pullback. what has been your observation with what is going on in the market? sean: as we have talked in the past, i think the table was already set, in terms of the trajectory of inflation, as we moved toward the end of last year. and it was really sad because of the decades or so of stimulus, and that created inflation. it created high levels of financial asset valuations, so that trend was in play. and then we had the russian invasion of ukraine, which created that volatility. but i think on balance going forward, the trip be this week is how does the fed begin to start threading that needle in terms of managing inflation, as you said, but do it in a way where it does not stock market
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does not hurt the economy. that will be the challenge. matt: we still see real yields that are very negative, certainly if i look at the 10-year, it here in the u.s. is down below -80 basis points. if you see those start to turn positive, is that a real problem for gold, or does the uncertainty of war really create a huge tailwind? sean: well, it is really inflation, and what is the inflation rate? we have gone from people using the word "transitory" to using a word that is more apt now, which may be "indebted." are we in this inflationary environment? if we are, the fed knows what they have to do to get it back in the bottle, but can they actually do it? i think that will be the trick. certainly from a geopolitical perspective, that creates some volatility, but i would ask this now, you know, it was not just the sort of expanding money
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supply, it was that stability in the world which helped to create these valuations and financial assets. are we at an inflection point in inflation, interest rates, stock market valuations, in the economy, in world order and stability? are we had an inflation point? -- inflection point. there are some big moving ports, -- parts there. do we have the confidence in the fed that they can manage this, or in the politicians that they can manage that? we would argue that they are not going to get it right, and that is why you should own some gold. jon: sean, i want to squeeze a quick one in here before we have got to go get production levels, given where crude is, what about in your industry? what about the nymex for you to increase production right now? sean: you can't. that is one of the attractions
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for gold. mind supplies lack, the lead time for these mines, if you have a pipeline project, his long. we can't just turn on a have as an industry and put more gold under the market, so the supply-demand equation actually works very well for the gold price going forward. matt: sean, thanks so much for joining us. sean boyd, executive chair of agnico eagle mines talking to us about gold. now, jon, we have seen markets turned down. we started the day higher, even as, i think, and a lot of people were questioning the big drops you are seeing in china, actually the tech stock there. we did see the nasdaq kind of lead us down. the s&p and the dow were still positive -- i should say the dow jones industrial average is still up. the s&p has been dragged down about .33 percent. now that i look at the dow
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again, it is also down more than 50 points. all the major american benchmarks are turning lower. jon: one of the interesting dynamics, this could end up being the worst session sinc march. ifs -- since march. if tech stocks are down, you see investors get into oil and gold names. none of the sectors have been doing well. at best, it is some of the interest in financials, outside of the fed, but it has been red on the screen so far today. matt: i should also point out that bitcoin, although started the day out that 1%, is now gaining a quarter of a percent. either started up 2%, now it is down about .25% you're and so crypto is turning lower as well. for jon erlichman, i am matt miller. this is bloomberg. ♪ r. this is bloomberg. ♪
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volodymyr zelensky will deliver a virtual address to the u.s. congress wednesday morning. in a letter, nancy pelosi and chuck schumer saying that only members are invited to attend ukrainians have shown extraordinary courage and determination s national security advisor jake sullivan has started talks in rome with china's top diplomat. according to people familiar with the meeting. these are the first high-level in person talks since russia's invasion of ukraine. the biden beijing to use its influence on russia to end the war. senator joe manchin says he will not back president biden's nominee for the federal reserve. sarah raskin. senator manchin, who represents west virginia, opposes raskin over her stance on climate change. the top republican on the senate banking
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