>> more than halfway through the trading day, new york stocks down and crypto in focus. i'm pretty good. bloomberg markets starts right now. let's dive into those markets. stocks are down to the tune of .6%. the dollar is stronger. as we see yields come down a little bit, the 10 year yield two point 86. i would say this is the fourth day this week we are seeing yields lower. yes, the dollar is a still stronger.

a little bit weaker, but stronger relative to some of the other currencies. commodities lower as well. how much of this is a risk-off story? let's dive in with mike regan. que as always for joining us. i'm curious about this macro situation. we have seen this nonstop selling year-to-date, but i have to ask, how much of this can be weaved together by fundamentals? mike: certainly the inflation numbers are not behaving the way anyone one of them to. it does look like cpi and even ppi, possibly, peaked in march. the question is whether they peaked and they are going to descend rapidly or plateau at levels that are still way too high for the federal reserve to be comfortable with. anyone looking for that sign of peak inflation did not really get it this week. ppi numbers this morning sort of backing that up. it is really a matter of the fed

is full steam ahead with their campaign to raise interest rates, and downshift the balance sheet. i think that is going to continue to weigh on risk assets until there are signs that the fed is really -- is willing to back off a little bit. whether it be that financial conditions tighten so much that the risk of raising rates further is too much for them, or whether they think they have had an impact on inflation and it is time to ease up. but for now it is just nothing that really allows people to get too comfortable with risky assets. crypto market obviously, how much the contagion is affecting the stock market and other markets is debatable, but certainly there probably is contagion happening. and probably more to come that we don't know about yet. at least that is the concern on a lot of people's minds. kriti: isn't the crypto market -- i mean, how many players that

are involved in these markets, the fx market, an enormous stock market, actually have that exposure to crypto? can you connect the dots of why crypto would be the macro indicator the rest of these assets follow? mike: there is obviously the easy to point to examples of a company like tesla that has a lot of bitcoin on its balance sheet. microstrategy has been aggressively buying crypto for its treasury. the new players in the game, coinbase, robinhood, who are pretty directly exposed to crypto. you start adding up those little micro exposures and starts to get noticeable. and in the hedge fund world there are certainly people that are playing with crypto, and in other markets. one really interesting blog post this week putting out this big jump in front and yields earlier in the week. that was right when crypto was really collapsing pretty hard.

granted, the stock market was too, so kind of hand-in-hand, with the thinking being that, well, if you are sort of exposed to leverage and margin calls in crypto or equities or any risk assets, you know, those front and treasury instruments are what you are going to unload first. it is really hard to pick it apart and determine exactly what contagion is causing what, but it certainly is on top of mind of a lot of people that we don't really know exactly where the crypto contagion and exposer lies -- exposure lies. the worry it is there and it will start showing up. the thing with contagion is it starts showing up in unexpected places, like that front end of the treasury curve. so, certainly front and center as far as part of the contribution to this volatility. kriti: and a lot of volatility there is. bloomberg's mike regan, a pleasure as always. traders pointing to the chaos in

crypto. a focal point of their concern. tara developers now halting new transactions to avoid further damage to its blockchain. to break it down is david pan, who covers digital currency. walk with -- walk me through tara. i am a novice when it comes to crypto, but why is this a stable coin so important? david: terry is one of the two general types of stable coins. we have tara and usdc, who are impacted by fiat currencies like the u.s. dollar. then you have the algo stable coin. terra is one of the stable coins. it is backed by an algorithm of trading and management. people are incentivized to maintain the pact by making

arbitrageurs. arbitrages. kriti: they are called stable coins. they have not been very stable lately. one trading $.70 on the dollar. i'm curious why that peggy collapses. have seen this in fx currencies. a lot of that has to do with a country's specific story. but for terra, can you explain the dollar peg and the ripple effects there? david: the whole family of algo stable coins, each of them have their unique mecha for terra, the reason terra has been going down so sharply is because it resembles the sovereign currency mechanism. for example, we have seen in the past the local currency was packed to the u.s. dollar, and then you got all of these hedge

funds, whoever has the deepest pocket, the most liquidity will be able to threaten the central bank so that they can make huge multi-billion dollars of money out of it, out of the trade. i think it is the similar situation for terra. it is backed by bitcoin, and so i think that is the main reason why we are seeing people -- the reason it has been impacted so quickly. kriti: i have to ask you, what reverses this? what makes tara coin and t earr -- terra stable? david: one of the most obvious things is the person behind this project. he has been seeking external capital from x -- from institutional investors so he can buy more bitcoin, to inject

more capital to keep the pact. kriti: fascinating stuff. david pan, my go to for all things cryptocurrencies. time now for bloomberg's first word news. he was mark crumpton. mark: nancy pelosi says lawmakers week will consider a bill on gasoline price gouging. president biden would have the authority to declare an emergency that would make the sale of gasoline at "excessive prices" illegal. >> families are struggling to pay higher prices at the pump. oil and gas companies are recording record profits. the seven largest oil companies and announcing buybacks that could total $41 billion this year alone. again again we see gas prices rise when the cost of oil drops. and price gouging needs to be stopped. mark: during her weekly press

conference speaker pelosi also addressed the roe v. wade issue, saying republicans are "mobilizing dangerous extremist agenda to criminalize all forms of reproductive health." the british economy unexpectedly contracted in march. first domestic product fell .1 percent from february as the cost-of-living squeeze forced consumers to cut back spending. that is slowing down on the bank of england's ability to keep raising interest rates, as well as putting pressure on prime minister boris johnson's government to respond. you can european union failed to resolve their differences over northern ireland's trading arrangements today. that can lead to a diplomatic crisis and a potential trade dispute. u.k. says the current arrangements result in northern ireland being treated differently than mainland great britain, and the u.k. may have to act on its own. the eu says unilateral action is not acceptable.

policymakers at the federal reserve face pressure for more aggressive action after a hotter than expected inflation report. so far officials are sticking with their strategy to raise interest rates by .5 percentage -- .5%. jamie moeller told yahoo! finance that the high point moves are a good benchmark for now. 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. ♪

kriti: this is bloomberg markets. i'm kriti gupta. airbnb has announced what it is calling its biggest change in a decade. it includes a way to search consumer protections. emily chang is standing by with brian chesky. emily: thank you. ryan, thank you so much for joining us. this new way of searching makes it so much easier to discover things you never would have thought of. i thought omg was the coolest category, then i discovered

castles in france for $100 a night. do you think tonight is the right time to change the way you search? brian: because travel has probably changed more than it ever has a since world war ii. because of the pandemic, now millions of people don't have to go back to an office five days a week. because of that it means they are more flexible. can go away for the summer, they can go away for three day weekends. the book and travel for a lot more time. we realized the way you search online for the 25 years has not changed. it is a big search box and asks you where you are going. but most people are flexible and cannot think to type in all 100,000 places on airbnb. we thought the world has changed, travel has changed, it is time for airbnb to change. now you can search by castles, by frank lloyd wright homes. you can search by all different types of places. you can search by vineyards, golfing.

emily: there is a new 24 hour helpline to try and meet that hotel level of customer service airbnb has kind of been lacking. how money people did you have to hire to make this work, and what kind of resources have you had to build up on the backend? brian: it is a little hard to know how many people because we hire people based on how big the demand will be the summer. but we have staffed up. you do think it is a great investment. but we are offering is a new product called air cover. it is end-to-end protection for every guest. in the unlikely event a host cancels, airbnb will handle it. you can call us, we'll get you an equivalent home or refund you. we have a whole operation to take care of this. airbnb doesn't have a front desk, but we are trying to provide the next best thing to provide that consistency of service. emily: we have spoken to some hosts that worry guest are going to take advantage of this. some folks are talking about

listing their own properties elsewhere. how are you addressing this tension with hosts and how much tension have you gotten? brian: we have not gotten meaningful resistance at all. hosts are happy, and i will tell you why. air cover is also offered to hosts. every host on airbnb gets $1 million damage protection. $1 million liability protection. this is something we offer for free. air cover for guests is something airbnb takes on. we took on this financial burden to provide this protection so that a host does not have to. this is very important. emily: we talked last week you said airbnb is still expecting a high travel summer. but inflation is above estimates again this month, and when you look at your average daily rates for the third quarter they were almost 30% higher than they were in 2019. customers really going to spend more to travel when they are choosing between travel and gas and groceries? brian: first of all, the reason the price per night went up is mostly because people are

booking more expensive airbnb's. before the pandemic a lot of people were traveling by themselves and rebooking 1, 2 bedroom homes. now they are booking bigger homes to travel with family and groups, and there has been a shift to north america and europe, and these are higher priced per night. you are correct, though. a lot of people are going to be able to afford to travel, but another thing -- airbnb was started during the great recession in 2008. used airbnb because it was a more affordable way to travel. after two years of people not being able to leave their home, i believe they want to get out and this is going to be a travel rebound unlike anything we have ever seen before. emily: you have got airbnb shares down to new lows, and i'm still curious how you are watching this broader market turmoil. what is your take on this? brian: i'm not watching the broader market turmoil, and i would hope share mode -- shareholders know i am accessed -- i am obsessed about the

inputs of the stock price. our job is to make sure we have the best service, we have enough host, they are prepared for the travel season. you're going to play a long game and i think long-term shareholders will benefit from that. emily: i wonder how this impacts retention and recruiting, though. we are seeing a lot of companies that really soared in the pandemic struggling. coinbase, robinhood as well. do you think this could impact hiring or is -- or the mood in silicon valley? brian: we are completely overwhelmed with hiring. two weeks ago we announced airbnb employees can live and work anywhere in the world. and we are not going to lower your pay. this we made that announcement more than one million people visited our jobs and career page. we only have 6000 people at the company, so i think that there might be some broader considerations, but we have quite a lot of interest, and i don't think that will change. emily: twitter announced a

hiring freeze and cutting costs, potentially rescinding offers for a different reason. i wonder if this on top of other companies, -- pausing hiring, if this could be a moment of opportunity for you. do you see this as a chance to attract i'm not be a magnet for new talent? brian: a lot of people are reaching out to us from other tech companies, maybe because other tech companies are asking people to go back to the office. make no mistake, airbnb is stepping on the gas this summer. emily: how are you stepping on the gas in china? we are seeing ongoing covid lockdowns there. i know it has been a priority in years past. what trends are you seeing and when you expect them to recover? brian: our china business has primarily been people in china and china -- obviously crossing a border, so it is cross-border travel -- going to other countries. japan was a popular corridor. south korea. they are going to europe. they're going to other places.

because of the situation in china with covid there is not a huge amount of outbound business. her business in china is not super robust and it is probably going to be a while. it is going to check with the health crisis. emily: i'm curious how often we are going to be seeing releases from you. copayments are something users have been asking for. how optimistic are you about crypto? we are seeing a cake caught up in the broader market turmoil as well. they definitely be part of airbnb's future one-day checkup brian: we are going to do two releases a year. every may we are going to do a summer release. do it in may, time for the summer travel season, and in november we are going to do a winter release. we will do a month before winter, so we will do it and you can expect a lot of updates november, but i'm not going to comment on crypto except to say we have been looking at it. emily: in the meantime i know

how much a priority design is for you, especially seeing this redesign today. you have been working with johnny ives. how involved was he and what have you learned from him? brian: i have learned so much from him. he inspired a lot of thinking, but i think what i will say is that jonny's work is coming in the future. mostly what you saw today was our internal teams. emily: you have been living and working on airbnb for the last several months yourself, along with your dog, sophie. what have you and sophie learned so far? what have been your favorite saiz -- stays? oh, we got sophie. they she has. brian: her name is sophie supernova, because she emits more energy than a collapsing star. here is what i have learned, emily. the more you are away from home, the more you want to be at home. when you are working at home you want really great wi-fi and you want that to be verified. we want the kitchen to be

stopped. want to be in a great neighborhood you want to walk around in. it reinforced a lot of the ideas that we ended up pushing out yesterday, including the idea that people are more flexible. for example, i went to ann arbor, michigan. the reason i went was because of the frank lloyd wright house. i would have never discovered it if i had to type in ann arbor on a map. i think people are going to discover a whole world of possibilities. don't just have to go to rome, he don't just have to go to vegas or miami or l.a. there are hundreds of thousands of communities and there is a whole world of possibilities people are waiting to discover. emily: where are you and sophie going next? and what are going to be your top priorities for the rest of this year on airbnb? brian: we are here in new york right now. we are open to ideas. if you have ideas, we are ready to open. emily: we are a little disappointed you did not bring sophie into the studio today. brian: next time.

emily: i appreciate you coming in. airbnb ceo brian chesky, thank you so much. kriti: emily chang, a fantastic interview. brian chesky, we appreciate you. the house gop leader mccarthy subpoenaed by a panel probing january 6. and not just kevin mccarthy. you also have representatives jim jordan and mo brooks all subpoenaed by the congressional panel investigating the events of january 6, the right at the u.s. capitol. we will bring you more news as we get it. for now, this is bloomberg. ♪

kriti: this is bloomberg markets. let's get to something that caught my eye. something no one seems to be talking about, but it is a huge deal. the mexican rate decision and

inflation in latin america. we know the bank of mexico is poised to make another 50 basis point rate hike. that is the expectation in about 35 minutes. for now i want to show you what the inflation picture looks like in latin america one back to 2020. inflation hit latin america first. take about it, food prices, energy prices. it is going to hit those emerging markets first. if you are looking at 8.3% year-over-year inflation from the united states, the base affects coming into play here. pick up what you are seeing from some of these other countries. brazil, up 12.1%. mexico boasting 7.7 year per -- 7.7 percent year-over-year. what are the ramifications, the ripple effects for food costs? there are a lot of latin americans who do not have the disposable income americans and europeans do. that is going to be something to keep in mind, as well as the fact of what the implications are of dollar strength and companies looking to move their supply chains to mexico.

these are all questions i'm sure will be addressed in 35 minutes. keep an eye out for the bank of new mexico -- bank of mexico rate decision. for now, this is bloomberg. ♪

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>> welcome to the bnn and number guardians. president biden marked one million u.s. deaths from covid by calling on congress to maintain funding for testing and treatment. lawmakers remain unable to agree on how to pay for the fight. today the u.s. opened its second summit aimed at quelling the spread of the coronavirus. finland and sweden are inching closer to joining nato. finland's president and prime minister through their weight behind an application. sweden's government is likely to do so as well. the nordic countries are seeking to deter aggression from russia.

sky warns there will be consequences if they join nato. #ones that will be consequences if they join nato. the u.s. department about your culture reports set production in ukraine, one of the world's biggest growers, will drop by one third compared to last season. more is restraining harvests in ukraine, one of the world's major wheat, corn, and vegetable oil producers. demo north korea, kim jong-un has ordered all cities to be put under lockdown after the country reported its first covid case. in the past, north korea has always denied it had any cases. a claim that has been doubted by outside experts. the country also has refused vaccines from the outside world. 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.

>> i'm jon erlichman. welcome to bloomberg markets. kriti: i'm kriti guba. a risk-off session. you are also seeing a bid going into bonds. the risk-off move continues, but what i-my ion is that currency strength. you are starting to see the dollar and mexican peso flat right now, despite dollar strength against major currencies. we are going to keep an eye on that as the bank of mexico has its next rate decision in 30 minutes. the bloomberg commodity index down. commodities broadly -- food, metal, oil -- all taking a bit of a breather. jon: hard to avoid those volatile technology stocks. even though some of the most beaten-up names are coming off their lows we are seeing sizable pressure for some of the biggest

names in the business, including apple, she officially moved into bear territory, joining microsoft and alphabet. all of those stocks are down at least 2.5% on the session so far. kriti: we continue to see pressure on those tech stocks. yesterday we spoke with brett winton, director of research at ark invest. >> you either believe this decade is going to be one of technological innovation or you don't. it is clear right now the market is not pricing assets based on their fundamentals. asset prices are being whipped around by asset flows between asset classes. so, from our perspective you are getting amazing sale prices and innovation assets. jon: we know that ark invests in some stocks that are down 80% in some cases this year. the market is starting to focus

on the biggest names in technology. i alluded to apple. its shares taking a hit to the tune of about 20% off its peak in january. so, joining other tech names in their territory. have certainly been concerns about the supply chain realities. let's get some more on the apple selloff and the broader tech landscape. tom forte is an analyst with da davidson, and also ed ludlow. tom, i will start with you. as i alluded to, the first part of this is selling pressure started with smaller companies with skyhigh valuations, but with apple were talking about a massive business that is also starting to see weakness in its stock price. does it suggest to you that that love affair is starting to fade further largest company in the world? tom: thanks for the question. the way i think about it is, when it comes to technology stocks in general the tide is

going out. and the tide is going out is affecting not just a small and medium-sized market caps you were referring to, it is also getting the big ones. it is hitting amazon, it is hitting apple. it is hitting meta, alphabet. i think when you look at apple and that $8 billion negative impact in the june quarter from supply chain challenges and a shut down in china, that is significant. that is potentially more than the $6 billion impact in the december quarter, and the december quarter is it its biggest quarter. so challenging times for apple shares right now. kriti: and, it wasn't too long ago that the stock market broadly was treading on operating margins and how much of the costs to get passed on to the consumer. now it seems to be trading on valuations. where is apple fall on that spectrum? ed: this is the point, right? with 24 times forward, we have

come down from 29 times forward earnings to 21 times forward earnings. the direction of travel and the narrative around the fed and rates is not clear yet, right? we haven't really talked about where we find the bottom, and what i find interesting about apple is a lot of the selling we have seen, you know, jon talked about that 22% drawdown we have seen since january. a lot of that selling has been in the last five days. it has some immunity to what we saw on those longer durations. now apple is catching up. i also questioned tom, when do we change direction? what makes us feel confident on a company like apple again? jon: tom, i want to ask you an analyst question. in terms of the communication you are having with a company, are you finding as we see this selloff right now that there is going to be a deeper dialogue with wall street to make the

case? obviously they wanted to make sure we knew you alluded to that supply chain concern, that that was coming, but are you anticipating more conversations with the company than normal? tom: i think it will be a regular cadence. question will be what -- will be, when they report the june quarter, how did they think about supply chain disruptions for the september quarter? a lot of the capacity that went dark is up and running. but i do worry about this broader selloff in general, and i do think the fed is trying to thread the needle when it comes to raising rates to lower inflation, while maintaining full employment, while potentially trying to avoid a recession. i think the second half of this year is going to be challenging for technology stocks in general. kriti: tom, the last time you are on our show we were talking about apple earnings. you asked me a question -- i ask you a question about netflix, and you said perhaps some of the streaming pain can be

contributed -- attributable apple plus's success. we heard about disney's streaming success, where they are warning about some of the conditions for the back half of the year. is apple subject to the same conditions? tom: when i think you are seeing and what we wrote a white paper on is that u.s. market for subscription on-demand services has hit saturation. i think you are seeing a lot of businesses where consumers subscribe to a couple and rotate based on which is showing the new show at the time. i think winning the best picture with coda is putting pressure on netflix, and less so on disney plus in what looks like a saturated u.s. market for subscription video on demand. jon: ed, let me bring you back into the conversation. i was asking tom whether the communication starts to change. does anything change in silicon valley? we had google's big developers

event this week, but i wonder if the tone starts to change for these big technology companies when it is hard to ignore these concerns about the economy, about the consumer, and what is happening on wall street? ed: there is the fundamentals conversation. we have had guests saying you want to look for companies with enviable balance sheets, where they find growth in any environment. apple fits that description. if you strip out the narrative around the fed and rates, we want to hear about innovation. want to hear about how these companies continue to grow outside the pandemic. any of the things that are, for example, tailwinds to some companies in the reopening, or offset by the recession risk. apple has proven they are a pocket of strength. in china the mac with its new in-house chip resonated with buyers for the first time. so, continue to follow mark gurman on the bloomberg terminal. what are the innovations coming

and how will that impact consumer sentiment for the step the year outside the macro picture? kriti: tom, to build on ed's point on innovation, we heard apple is about to rip -- to retire is ipod touch. i have fond memories of my first apple product, but i have to ask about this design cycle. does that mean as you retire the ipod touch, are there going to be a speeding up of the design cycle or a slowing down? tom: the good news is apple has a regular cadence of new product announcements. gives them almost -- it gives them an opportunity to communicate they are continuing to innovate. for example, there should be an iphone 14 this year. a new ipad, laptops, things of that generation. under think the innovation will stop, but i also do share some fond memories of my old macs, so i share your pain.

jon: it really hits home, but luckily i still have it. maybe i can sell it one day as a collectors item. tom forte from da davidson and bloomberg's ed ludlow. thank you, as always. coming up we stick with the volatility in the markets and turn to banks, stepping away following -- following a regulatory clock down -- crackdown. this is bloomberg. ♪

kriti: this is bloomberg markets. i'm kriti cooped up. some of wall street's biggest banks are scaling back or ending their involvement with fax after the sec issued new guidelines. sonali basak, walk us through it.

>> today a few days after some of the biggest of the heat had started to come down with the banks pulling out of the stock market we saw some major spacs announce. intraday this index is actually rising once again, but if you look at the longer-term trajectory here, you are seeing the index down more than 60% over a year. a lot of spacs have not worked out for investors. volumes have also come down dramatically. if you look at the first quarter of last year, almost $140 billion of spac's announced. but that volume has also subsided dramatically as banks and investors get a little nervous about the rules in the u.s. around how spac's will work. jon: no doubt those sec rules, and just looking back at how lucrative this ended up being for some of those banks. i know you had been tracking that over the last couple of

years. sonali: i remember when the spac's were blowing up, so was the ipo market, and you had underwriting fees rising a lot for banks. remember, both ways you had them also striking a lot of deals. so, advisory fees on the other end. spac advisors also made a lot of money. more spac's now are aligning those numbers to performance, so we will see how the market changes. affiliate is not over yet. kriti: i will pick it up from here. stick with us. you're going to have a special guest. mathieu chabran joins us here. he is the cofounder of tikehau. he joins the conversation. he is very involved in spacs. let us know what you make of these high-level plays taking a tumble. mathieu: thank you for having us. it is interesting we have these trends to discuss. we announced in europe in the middle of market changes in the u.s.. i like to say that spac is a

great technology that may have been sold to the wrong investors , who went after the bad companies. that is maybe why we had this situation in the u.s. hopefully we are bringing the silver lining to this situation. just announced this $4 billion spacing in europe. given the ecm market, i am very positive and optimistic that spac will come back in favor as a turnkey solution for people looking to access public markets. kriti: there is so much talk about bank -- banks pulling back from the market, yet you did just announced a $4 billion transaction -- a more than $4 billion transaction in a spac that involves you, bernard arno. bring us behind the surface here. what are the banks saying as they bake in some of these potential guidelines and rules moving forward from the sec? mathieu: i was about to say, the sec came out and it is very much

u.s.-specific. that is where you had the highest level of issuance last year. we decided we had an s-1 ready to go and we decided to pivot to europe. obviously europe is our home market. we issued one spac in singapore. i find it fairly ironic we are about to announce these transactions combining with fl entertainment. it is a real company, 3 billion dollars in revenue. it is one of the world's largest producers of tv content and betting, like peaky blinders. you would know that from netflix. this avenue, and banks are well aware of that, in the turmoil we are going through, to find this alternative to the equity capital market. the banks here are welcoming

announcements like the one we made last week. i'm expecting more to come. in the u.s. we know if that is what is happening. there was a lot of excesses. maybe the wrong investors, a bit of fast money. what we try to do is spring term long-term private investors -- private in a sense -- entrepreneurs who could value the merits of these transactions. hopefully a silverlining to the spac market. jon: i just want to care -- to clarify. if there is still banking interest, some of our reporting suggests goldman sachs and bank of america are distancing themselves. which banks are we talking about here? mathieu: you have two legs to a spac, right? first you raise the money on the public market and have underwriters, right? you have an investment by u do that.

and they are being -- you have an investment bank doing that. they are being paid for that. you have the business combination which is this private company who is going to merge into the publicly-traded vehicles. then the banks get paired on the second leg here. effectively what the regulator is trying to prevent is a conflict of interest that will be either you help sponsor raising money, and you find a target. spac's were blamed for this option, and that is what they were trying to prevent. if you work with one bank, obviously all of their investment bank will be happy to do some m&a, to find some alternatives. i'm expecting a different set of banks now to work together. that is their issue, it is not the sponsor issue. i think it is critical and that is why we try to demonstrate with pegasus, keeping the

alignment of interest. there has been way too many talks about this alignment of interests on these stocks. for example, we the sponsors, tpo capital, and we invested close to $100 million. kriti: we have less than a minute here. i'm wondering if we could get some commentary on the broader market. you are taking companies public into very choppy waters. are you concerned that is another leg down in the market here? mathieu: we have started when i would qualify the beginning of a new cycle. i'm chung to stay away from all the noise on the tech side, on the digital assets i. i'm looking at the fundamentals of business, asset allocators as investors. we have talked at length about that. i think what has changed since we last spoke is now the credit market is now widening -- widening on both the investment-grade, high-yield, so even moving away from the big

yields, i'm talking the day-to-day financing of the real economy. it came as a shock. sometimes i'm surprised that people were surprised. we have been operating in a negative interest rate environment in many places. in europe investment-grade was trading at negative yield. that was an abnormal environment. now we are getting more normalized policy, it will be a more healthy market for investors to do the rational analysis. can there be another leg down? certainly. if interest rates keep rising that is one thing, but i'm more focused on the credit market. i am a leverage finance banker, and the credit markets have always been a leading indicator. i think this aspect has been a little underestimated. we all know there has been a lot of leverage put in in the past 10 years. that is what we should be focusing on. jon: thanks for the time.

mathieu chabran joining us. and our thanks to sonali basak as we continue to watch the stock market. to reiterate, the s&p moving toward session lows after already coming down about 18% from its recent peaks. now down 1.5% intraday. will be watching. we'll be right back. this is bloomberg. ♪

jon: there is a live look at the s&p 500. at session lows right now, down more than 1.5%. and making its way toward an official bear. we came into this trading day down 18%. for what it's worth we wanted to bring you the reducer price index story. we kicked off the day with the

inflation reality as we saw those numbers coming in for final demand, up 11%. right now you have a lot of ceos navigating the headwinds. here is some perspective from the chief executive of siemens. >> we see impacts, an eventual impact on q2 coming from lockdown. this is a complete lockdown for five weeks. we will start ramping up again on the manufacturing side, which is good. on the others we have a bottleneck in the supply chain. 30% of the ships waiting to be unloaded are waiting in front of shanghai. that can have an effect on how fast we can ramp up and compensate for this lockdown in shanghai. kriti: it is those chip shortages across the board. we have to keep an eye on these producer prices that are not just dealing with some of these energy companies, some of these automakers, but a lot of these

companies kennel longer, perhaps, pass on the costs consumers. jon: absolutely. as we watch those margins under pressure and we continue to watch what is happening not just in the bond market but the s&p 500, near session lows. for kriti gupta, i'm jon erlichman. this is bloomberg. ♪

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mark: keeping you up-to-date with news from around the world, here's the first word. the house committee investigating the january 6 attack on the u.s. capitol has taken the step of subpoenaing house gop leader kevin mccarthy and four other republican lawmakers. there are certain to lead to extended court clashes potentially rooted in the constitution's speech or debate clause that shields lawmakers. present by him was set to talk with