mark: welcome, this is first word news. cargo flows from china to the busiest ports in the u.s. appear consistent despite the ongoing pandemic according to gene seroka who runs the port of los angeles. he talk to us today about supply chain issues. >> this is going to take some time. there is an episode about every day that impacts us in the supply chain whether it's on the round, the atrocity in ukraine impacting energy and the lockdowns in shanghai, eight 3% inflation and producer prices going up 11%. all of this is in the supply chain equation. mark: he says there are no

imminent signs of a slowdown in demand from american consumers judging by the riving number of shipping containers filled with s. the u.s. justice department is investigating a mass killing in buffalo as an active racially motivated violent extremism. it left 10 people dead and three wounded in 11 of the people shot were african-americans. an 18-year-old white man was arrested and they say he posted a hate filled document online not long before the attack. new york city could soon hit a high covid-19 transmission level that would have health officials considering mass requirements and laces. new cases per 100,000 people over the last seven days surpassed 300 citywide, about 8% of people tested for covid-19 over the last seven days have been positive. british prime minister boris johnson is warning the european union that changes must be made

to the northern ireland protocol. he says the u.k. government will act on its own if the eu does not engage in genuine dialogue. london is unhappy about parts of the agreement which call for checks on u.k. goods crossing the irish sea. 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 mark crumpton, this is bloomberg. jon: welcome to bloomberg markets. kriti: let's check the price action. the volatility, the fluctuation seems to be a theme.

the vix is under 30 and below that nor. a 27 handle on the vix is where we are headed and four out of the five sessions last week, you cite yields lower end in line with that, perhaps we talk about the yield lower inflation driven by the commodity prices and food prices and metal prices which are up today. investors are still particular about what they buy. jon: we are still seeing tremendous selling pressure for was once -- what was once the hottest technology stocks. zoom slid by 3.5% and we watch the uncertainty playing out in the likes of tesla and twitter. twitter is now down about 7% so let's get an update on this u.s. trading session.

there seems to be a cautious approach to growth names. abigail: we are not seeing the follow-through to friday's rally but at this point, for the broader indexes, we're starting to see a lift tire for the s&p 500 and the dow. the nasdaq has a little ways to go in the tech names are under measure. we've been talking about what is not working. as to what is working, if the s&p 500 were to close down this week, it would be the seventh week aerobic is the longest losing streak going back to 2001. the second-best sector this year is flat, consumer staples. that's a true defensive sector followed by utilities which tell you the sector is working. on the other hand, you have discretionary, think tesla and amazon and home depot, that is

the worst sector, down about 28% step than need to have or want to have, there is a big divide there. even if we get volatility into friday, it's still a brutal environment. kriti: this was a concern where you didn't get the liquidity a few weeks ago step do we have that coming back? abigail: at this point, we have volume coming back a little bit relative to volatility but when the vix is below 30 which is an encouraging sign but when that goes above 30, volume should spike higher. that's been the case in recent weeks but probably not as much as some of the bears might want to see. as for the heirs, we know mike wilson has had a great call for a long time saying he things

it's a bear market. goldman sachs talked about bringing in the growth estimates a little bit and bringing their s&p 500 down to 4300. kriti: abigail doolittle, always a pleasure, thank you so much. let's bring in aaron brown and the chief risk manager at hq our risk management formally. your take on whether or not this is where the stock market is bottoming out or do we have more room to run? >> we certainly have more room to run. on the other hand, and see any signs that this will be a spectacular beat to a long decline. we are in the initial stages and

it's anybody's guess where we wind up. jon: how do you think these asset classes will continue to trade? you can watch the crypto market as well. >> what people need to understand about crypto was any crypto investment is the combination of two things, one is an investment and highly speculative technology and we know those will kill. the other thing you're getting is a foothold in an economy that's insulated from many global problems people worry about, inflation, interest rates, war, sanctions, institution stress. that's supposed to be one of the big appeals of crypt there was that you can get away from those things. we are not seeing that now.

we are seeing the decline because people are pulling away from tech investments and are getting more risk about long-term growth. we are seeing that's creating liquidity and other stresses so we see -- we see the stable coin failing. we are seeing liquidity breakdowns we are not seeing the kind of action that people were hoping for. kriti: if we are in such a risk off environment, is that more of a reason for capital flows to come into commodities like -- or commodity-based economies like canada as defensive haven plays? >> to some extent that's true. value stocks have been doing better than growth stocks. if you are looking to get into some assets, the all-time high

doesn't seem like the greatest decision until real estate, gold, oil, these assets come down price. they will not be incredibly attractive for people to get away from risk. for the moment come i think the risk off money will be treasury bills. jon: helpful to get your context and appreciate your time. we are tracking the markets and coming up, china's covid zero policy taking its call in the country's economy with retail sales plunging and more on that next. this is bloomberg. ♪

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kriti: this is bloomberg markets. china's economy is paying its price for the zero covid policy with industrial levels sliding to their lowest level since the pandemic again step let's dive into this china data because we have industrial output sliding, consumer spending as well but when you look at the global economy, it's

the industrial out with that has a bigger ripple effect given the chinese economy. how concerned should we be? christine: very concerned, this latest set of data is only the beginning in terms of reflecting a turn for the worse. they really doubled down on the covid policy and we are seeing that impacting the economy and we've already seen authorities in china preempt this by pledging more support for the economy by providing more policy easing but when you get headwinds like this out of china, the data is taking a turn for the worse and that puts a lot of pressure on the authorities to provide more support. jon: when people want to talk about something like stagflation, they look at the economic front data and china and what's happening in the commodity world for the

inflationary spikes. there is a global concern on basically all of those fronts right now. christine: absolutely and what's interesting at the moment is gone are the days when investors could think about commodities as a homogenous investment lock where to hedge against inflation regardless of which commodities we are looking at. with the war and ukraine in the recent data is showing us it's a different trade whether you were talking about some of the precious metals were some of these soft agricultural commodities, it really is a divergence that's starting to emerge here and it will be interesting for investors to navigate that step soft commodities are very much at the forefront this week of the latest turn in food nationalism.

gold has traditionally been good but it's being battered because of what we see in the u.s. dollar. kriti: you have these high food prices but purchasing power is a big one and you lead the fx covers out of london so i have to ask you about the dollar story and the euro-dollar parity. talk about the ripple effect of the dollar. krristine: is pretty huge because as you mentioned, it's playing into this idea of purchasing power for many countries especially for countries that are importers of various goods like energy or agricultural products. that's standing out as an issue with the weaker yen continuing as a result of the stronger dollar. they are at the forefront of being at the disadvantage there. in europe, slightly different story.

we are seeing a situation where the ecb is still looking for a soft landing for the economy and they are looking to exit an easy monetary policy but they don't want to do that too abruptly. a weak euro is a benefit for bankers in europe. jon: we are watching the loonie lose steam against the greenback even though this central bank is raising rates. it feels like there will be that momentum hanging around with the u.s. dollar so what else are you hearing? kristine: i think the debate is over this dollar strengthen what will keep powering it and are we nearing a peak? other currencies are hoping we're seeing the strengthening of the u.s. dollar but it's a question of what else we are seeing outside the u.s. that will strengthen other currencies

and a little bit of weakness in the u.s. dollar. canada is in a pickle for the central bank because they are looking to tighten policy more but we are not necessarily saying that affect on the currency which is very important for the inflation limiting effect for canada. jon: thanks very much for your help as always. meanwhile, we've been covering the story of mcdonald's.in 2021, 9% of the restaurant revenue came from russia and ukraine. you heard the headlines and now they are pulling out of russia after more than 30 years of operating in the country. let's bring in michael halen who covers this industry. this was one of the first things going through my head, how do you make up that revenue and operating income gap for making a dramatic move like this? what is your sense on what

mcdonald's will do from here? michael: it will take some time. there he -- they will continue to grow the rest of the business globally. i think the main thing we should take from this is that the franchise restaurant businesses and even company owned businesses should be franchising their international businesses. the geopolitical risk, there is issues when it comes to regulatory and legal risks when you build out your teams overseas and i think this is the hard lesson that mcdonald's learned here. kriti: we just talked about the dollar and i believe over 60% of mcdonald's revenue comes from abroad. talk to us about the dollar strength part of the mcdonald's story. michael: it's squeezing revenue and operating profit for mcdonald's and some of the other international chains like yum!

brands with reference getting squeezed due to inflation. the company margins have been contracting meaningfully over the last couple of quarters and we can to -- we expect that to continue. jon: now that we have this move by make donald's, what will you be watching for for some of the other big players who have either paused or may be gone further are not as much in terms of their actions in russia? there's a starbucks in so many companies that have operations there. michael: good question, mcdonald's had the most exposure because the owned stores there. most of the other chains we ever including yum! brands are franchised over there. that leaves them with a buffer. it's the franchisees who own and operate the stores and i don't think we are going to see any

change to the game plan for yum! brands and other chains that are sick and the office from the region given that ukrainian refugees and other philanthropic costs. kriti: i believe russia and nigeria were the two fastest growing markets forming donald's post and demo so if you don't go to -- get that growth from russia, where will mcdonald's turn to when it comes to emerging markets? michael: china welcome -- continue to be the main engine of growth from donald's, a significant portion, more than a third of their net unit growth this year is expected to come from china and we expected to grow over time. jon: good to get your insight and we appreciate it. we will track that mcdonald's story but coming up, the economic outlook looking somewhat lackluster, how big is

the recessionary risk? we will dig into that next. this is bloomberg. ♪

jon: this is bloomberg markets. for what it's worth, 2.4% goldman sachs is cutting their expectation for the kind of growth we will see for the u.s. economy this year and next. they are now 2.4% this year, down from where they were. they expect the unemployment rate to start rising as well but as the fed has a new course, that is the rally on the economic fed. take a listen to what lloyd blankfein said over the weekend.

>> do you think we're headed toward recession? >> we are certainly -- it's a high risk factor. there is a path which is narrow but i think the fed has very powerful tools. it's hard to fine tune them and hard to see the effects of the clay enough to alter it. i think they are responding well. it's definitely a risk. if i were running a big company, i would be prepared for it but it's not in the cake. kriti: it was fascinating to hear lloyd blankfein talk about the potential for recession because it seems like the commentary has changed so weekly from the united states being insulated from the global downturn to now saying it's going to be very much a part of it. jon: in part that's why we sin is battle between the bulls and bears and strategist at different firms and abigail

talked about this earlier. the goldman sachs equity team lowered their price target for the s&p 500 again for the year but they are still expecting it will be higher by the end of the are versus where we are now but there was also the reference to mike wilson at morgan stanley who is making this continued bearish case in part because of this economic uncertainty we are seeing now. kriti: you're talking about the stock market and we have to talk about the bond market as well with 10 year yields lower on the deal and lower on four out of five of the last sessions last week. i wonder how much of the growth downturn creates a bullish case for the treasury market. this will be a big deal when it comes to the dollar because the dollar is getting stronger and stronger and yields are dropping more and more even in the face of a hawkish federal reserve. we will cover this in the days ahead and the next couple of hours. for now, thanks for joining us.

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mark: three weeks after israel