alix: more than halfway through the trading day, u.s. stocks ready to in a -- bna turnaround mode. this is bloomberg markets. ♪ alix: let's take a check in here on u.s. markets. the y here is i have no idea, but the s&p is up .6%. the nasdaq outperforming by one percentage point. the nasdaq was an underperformer in the last five days and now it is the outperformer. we are reversing the losses we have seen in the last week. one thing that is perplexing is

crude. you would've thought an outage, it would be a lot higher. we were up 4%. no energy stocks trading a little heavier, how does that make sense? i don't know. you do not have any kind of rally in the bond market. you have a selloff picking up steam in that spread between the two and the tense, 83 basis points, it is perplexing. take a look at the shares of meta. they are getting more than 1% and this stock is rising, the company facing a major test to its metaverse strategy. antitrust enforcers want to stop it from buying a virtual reality startup. they are arguing this plan will give it a leg up in dominating the ev market. star then, alex branca is at the hearing in san jose and joins us. how importance is within this company?

alex: this is important. this is a company that every time he wants to expand, it makes an acquisition, instagram, whatsapp. this is a new push for them but an important one. we have seen the company feature within at the product conferences and for all intents and purposes they hope that at the end of this hearing they walk away with this company. alix: if it can't go through with it, is there a plan b? do they need to rethink stuff? alex: they have talked and we have seen at the court filings there was some discussion about building something like this. but that was scrapped when they decided to acquire within. that is a key point of this argument as they sued the company to block this deal. that is why the ftc views this as anticompetitive for the future of the virtual reality fitness market. they are kind of adding to this portfolio. this is fitness.

you could see them look acrostic gaming, marketplaces and business tools as well. alix: do shareholders want this deal to go through? alex: the ceo of mark zuckerberg for sure wants this to go through. he is driving the company at this virtual reality future energy something shareholders have had some questions about. for meta, proving that vr can make money for the company, and that is the next era of computing like mark zuckerberg thinks, you would think investors with dig around for this future and they would like to see them building out this portfolio and finding things consumers will pay for in the virtual reality world. alix: and asking for patients. that will take time. -- patients -- patiences. alex: it is super unusual and super interesting. they are saying that this deal

is not necessarily anticompetitive the second but will tamp down competition in the future of a really new interest -- industry, the our fitness. experts will say this argument has not been made in a while. you have to look back to pre-1970's when the government really got involved, talking about the future of markets. if this does go their way and the judge grants them the injunction to block the steel and meta-walks away from this transaction, it could be precedent-setting or message setting for the ftc whose charwoman has been very blunt about looking to rein in the power of big tech companies here in silicon valley. alix: indeed. great to see you, alex branca joining us. speaking of legal matters, some headlines and surrounding ftx. manhattan prosecutors are leading the doj probe into the class of ftx. in the team will be meeting with federal prosecutors in new york, the current ceo will be part of that, this week in manhattan

their meeting so that continues to unfold as we look ahead to the hearings about ftx and crypto next week on capitol hill. let's get back to the broader markets. today i caught up with peter oppenheimer, who spoke about the value versus growth trade in the months ahead. >> i don't think it's going to outperform in the next decade. in many ways it is probably the law that -- the wrong way to be thinking about this as a binary split between growth and value. what i think it's going to become more of a hybrid. i do think this is going to continue to outperform as real rates rise and you get structural tailwinds rather than headwinds. i also think that characteristics are shifting and investors are fine to put more value on sustainable margins and earnings, cash flows, then purely on revenue growth. alix: let's get another take with the head of u.s. small

mid-cap strategy at bank of america securities. how would you understand deep value and is that a good bet right now? >> thanks for having me. we do think value looks well-positioned versus growth for the year ahead. that is true both within the broader market as well as within small and mid-caps. i think we are in a backdrop where near term we still expect interest rates to be higher fundamentally. that hurts a lot of the secular growth stocks. there fundamentals for many of these growth stocks have been deteriorating. you've seen earnings revisions for the nasdaq trending down relative to divisions from the s&p 500. meanwhile, value is still cheap and under owned by investors. we would be selective and focused on companies with attractive free cash flow, value attribute that tends to work well in these backdrops. value leadership tends to broaden out more when you're in

a recovery period. alix: city said -- citi said they are not pricing in the contractions anymore meaning it will be hard to find that value. do you think that is harmful for the market still pricing in a downturn? >> we do. we were neutral on the s&p for the year ahead. we have a 4000 year end target on the s&p 500 for 2023. we think the market could go down before it goes up and bottoms in the first half of next year. but equities are not as adequately pricing in a recession as some pockets of the mock -- pockets of the market, namely small caps. that is where you have seen the russell 2000 trading at recessionary multiples, rising in a deep recession. and we think small caps could work well in this backdrop of continued high, albeit slowing

inflation. they have a lot of commodity exposure, we expect commodity prices to remain higher for longer. so we think small caps are one of those pockets that are pricing in the recession adequately. alix: interesting, because in a recession you don't want to own small caps but this has been a well telegraphed possible recession. aside from energy in the small caps space, what other areas do think it will be interested in the small-cap world? jill: typically you don't want to own small caps going into the downturn, but we think it has been priced in by that segment today and if you look at the backdrop we are in, there are parallels to the 1970's and early 80's when the fed was trying to tame high inflation and small caps did very well in that backdrop even in the downturns in the 70's. we think that within small caps, you want to focus on quality. you want to focus on areas that are going to benefit from -- we think capex spending will remain

resilient. restoring of u.s. manufacturing, that should benefit small and mid-cap domestic companies. so focus on quality, capex and restoring beneficiaries. think energy and financials look well-positioned, financials are one of the highest right now and we will be focus on it area that looks more call low-quality that it looks prior to recessions, a lot of companies that have profits. alix: the index is up 15% in november. european equities pretty solid in november. s&p is not so great. i'm wondering if you think this comes out of europe into the u.s. or is there a risk that more u.s. money can go to that extra value trade? jill: our global strategists and teams have been incrementally more positive, particularly in

the second half as we see reopening. europe, similar to the u.s., we see more downside risk in the near term before some recovery later in the year. we think it's deftly going to be a year of two halves where there is a downside risk to equities. near term we would focus on the pockets of the market where we see opportunities as we mentioned and we have been saying for the u.s. market overall you want to out decks rather than index so avoiding those mega caps within the s&p 500 and focusing on some other stocks that are more attractively valued and small caps or the equal weighted s&p. those are where we see opportunity along with quality income, some defensive sectors like consumer sake -- staples. alix: the price action has been audit the last five days. what signal are you taking, 7/10 of 1%? -- .7%?

jill: we think it's going to be volatile. the yield curve tends to be a long lead signal of volatility which suggests it should continue to be higher. we think the market is going to go from focusing on the fed to the economic backdrop and the recession. that is one reason we expect it could be a volatile next several months and we would expect equities could fall further. we think the s&p 500 bear case scenario could go as low as 3000. but typically the market bottoms ahead of the economy so we could see a bottom and then a recovery in the second half of next year. alix: thanks for catching up, jill. now for first word news with mark crumpton. mark: in saudi arabia, the chinese president met today with crown prince mohammad bin salman. they are the top world x -- oil exporter but they are both looking to diversify their

energy mix. as part of the visit, chinese and saudi companies signed investment deals with green hydrogen and solar energy. president biden will announce a $36 billion bailout for a struggling teamsters union pension fund today. it will help shore up one of the largest multiemployer plans and deliver help to the presidents union allies after he angered many in organized labor by signing legislation and posing a contract on railroad workers. volatility hit the price of west texas intermediate today after the keystone oil pipeline was shut down due to a leak. tc energy says the leak took place near steel city, nebraska. no word on when the pipeline will be back in operation. keystone carries oil from canada to cushing, oklahoma and onward to texas. the house of representatives has passed a bill that should

provide federal protection for same-sex marriage. the vote was 258-169 with 39 house republicans voting in favor. president biden will sign this bill into law. democrats were concerned that the supreme court could reverse rights to same-sex couples after it overturned the roe v. wade decision that legalized abortion. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. ♪ ♪

from one company committed to building a world that works, to three that will focus on a future that does too. this is ge healthcare, creating a world where healthcare has no limits. this is ge vernova, helping generate and move the energy that our world needs. this is ge aerospace, advancing flight for future generations. this is the next generation of ge. alix: this is bloomberg markets,

i'm alix steel. tc energy declared -- after an oil spill into a kansas creek forced the company to shut the line. our reporter is joining us now. how much oil was actually affected? >> that is the main question we are awaiting answers on. we don't know how much volume of crude was spilled or how long it is going to take before the line can be restarted. those are key points we are waiting clarity on from the company. alix: what happened? weeks typically happen. there is a lot of technology or drones that go and a lot of money goes into making sure this does not happen. what went wrong? >> again, we don't know the specifics of this incident yet. but we can tell you more broadly in the industry the way we

detect leaks is based on a pressure system. when you have oil flowing through these pipelines, the way they detect a link -- a leak is when there is a sudden switch of the pressure and the flowrates that usually tips off the people in the control rooms to check whether there are leaks. there are also times when there are people who have just wandered, walking their dog for example, and they notice there is a slow leak. so there are different types of ways you detect leaks on various systems. depending on the type they are carrying, in this case they detected a change of pressure as of 8:00 p.m. yesterday and they shut down the system immediately which is what they tend to do. they're still investigating the cause of the leak. alix: i remember taking an infrared helicopter ride once, and expensive way to check leaks but better than walking a dog. it seems counterintuitive to do

this in the main pipeline in the u.s.. >> is another huge question in the market and it is not like this market can afford it, we have seen the market so volatile in the last few days. big swings up and down. as of now we don't have a clear picture from the company as to how long it might take. most market participants are taking cues from what has happened in the past, for example in 2019 when that pipeline was shut due to a leak again in north dakota. it took almost two weeks to come back so people are trying to estimate based on what has happened historically. in this case it is important to know that the leak has gone into a waterway. it was into at creek. that might complicate recovery efforts and it depends, once the investigators are able to have a look and incest -- assess the damage just how quickly it can be restarted. alix: thank you, thank you very

much. exxon raising its annual share buydown best buy back after posing its highest profit, kevin joins us now. we got a lot of readouts from exxon of the last 12 hours, or were highlights that strapped to you? kevin: they increased the buybacks for the second time this year to $50 billion through the end of 2024. they are quite incredibly confident of the financial returns in the future. they also stuck the capital budget to their medium-term range, which shows they not -- they did not respond to superhigh princes earlier this year and a fairly restrained capital budget. but it is up significantly on 2021 and 20 as well.

the big takeaway, they're still very confident. they're investing a lot into r u.s. shale. as opposed to the big mega projects that we have seen in previous up cycles. certainly over the past decade or so. those megaprojects are still quite high risk, especially when we have energy transition. these take decades to pay off. alix: there has been a lot of concern about asset or resource maturation, with productivity falling off a little. if we keep pumping money into it does not prolong the -- prolong it in a way? >> it does. exxon and chevron have such large positions within the basin

that their assets are unaffected by that. it is big enough that they can maintain a high production profile for many years to come. it is certainly positive for the basin overall. they like it because it is a short cycle production. make can invest today, get quick returns and it is low risk. alix: something you also broke on this was a huge pay rise you get if you work at exxon. mike oil companies are the place to be. he would not have thought that a few years ago. kevin: that's right. it has been all about tech and bankers but this year oil companies are where you want to be. it is the highest salary increase program in 15 years, average increases about 9% but top performers giving anywhere between 15% and 25% increases. certainly good news after a very tough two to three years, at the

exxon main campus at the moment. alix: do we take anything macro wires when we learn from exxon and chevron in terms of investing at the high end of the range, but still having the capital discipline and an enormous amount of buybacks? is there a signal here? kevin: i think so. both companies are spending more money on shareholder returns this year than they are on capital spending which is quite a reversal for much of the past 10 to 15 years or so. these companies, they are not chasing production anymore. they're not spending all they can on trying to get extra barrels. there really rewarding shareholders quite significantly at the moment. so we should not expect that the oil majors are going to increase production usually over the next few years or so. partly that is to do with

climate change. there is a lot of risk over how the energy transition is going to look. but also paying back investors on what has been a miserable decade for energy investors. alix: great story and great scoop, kevin crowley, thank you. they're letting me do this because i'm subbing come out more on energy, isn't it awesome? releasing the billionaire visions report. it is important to look at. this is bloomberg. ♪

alix: this is bloomberg markets, i'm alix steel. talking about something that caught my eye, the billionaire index from ubs. it checks out what the billionaires in the world are looking to invest in over the next five years. the top sector was energy with

44% voting for energy over the next five years. pharma, biotech, software and services and equipment. energy stocks in the s&p are up 58% so far this year. it has been a tremendous run up and cannot continue or is this the top for oil prices? if we are moving into alternative energy, do energy company -- energy companies really have that kind of upside? or are we going to see consolidation and that provides upside? kevin crowley was talking about resource maturation which means the stuff you are drilling, he will not get much more out of it so you need to buy smaller companies to beef up your portfolio. is that where the beta and the alpha is going to come from from the energy sector? it is interesting, that is where the billionaires are going. you do that or use a counterintuitive, it should be interesting over the next decade. coming up we will speak with ed from libya's red needle.

-- from columbia thread needle. we will break all of this down, this is bloomberg.. ♪ well, we fell in love through gaming. but now the internet lags and it throws the whole thing off. when did you first discover this lag?

i signed us up for t-mobile home internet. ugh! but, we found other interests. i guess we have. [both] finch! let's go! oh yeah! it's not the same. what could you do to solve the problem? we could get xfinity? that's actually super adult of you to suggest. i can't wait to squad up. i love it when you talk nerdy to me. guy, guys, guys, we're still in session. and i don't know what the heck you're talking about.

♪ >> i'm jon erlichman. welcome to bloomberg markets. >> i'm alix steel. let's check the u.s. markets. if the downdraft of the last four days is anything to raise questions in the market so is the s&p at .8%. the nasdaq 100 up 1.3%. no idea why. it feels like we are reversing a lot of the selling the last few days. crude goes nowhere fast despite a pipeline outage in the u.s.. the 210 spread in the fed

meeting in cpi next week, 83 basis points, a big flatter. we saw a lot of buying the last few days, maybe short covering positions on the market. selling pressure definitely continues. >> certainly, the easy place for investors to jump in today has been technology. it has led the s&p over all helping individual stocks, for instance gamestop, despite a challenging quarter of about 9%. some argue that is based on upbeat comments from the ceo. let's not forget the situation in china and reopening plans to get a -- today giving a lift to macau operators like las vegas sands. siena had a well-received quarter. data equipment player is popping 20%. then we are waiting for numbers from costco later today to give us a read of the consumer. >> i'm looking forward to that.

their sales came in a little heavy earlier. it is a traitor down happening or not? earlier we caught up with kelsey barrow from j.p. morgan who thinks that the market is too positive on the fed's ability to hit a soft landing. >> the market is very focused on the fact that they believe that inflation will continue to come down. the leading indicators are there. they are there more than they were the last time that we got a week cpi report and it ended up being a false down over the summer. look at, for instance, supply chains. look at and import prices. look at rental prices. these things are coming down. so i think that the market now is really helpful, for a soft landing. this is where we would say maybe there is too much optimism. >> let's keep the conversation going for more insight on the fed and rate plans ahead.

we are joined by ed al-hussainy senior interest rate and currency analyst at columbiathreadneedle. do think in the market now there is perhaps too much optimism around the soft landing idea? >> good question. we are really struggling to price a terminal rate above 5%. whether that is a vote of confidence in the fed and their ability to land the economy by keeping rates below 5% next year, or, some degree of over optimism, particularly when you look at risk assets, i think the jury is still out on that. >> the last week has been weird when it comes to price action. we saw a huge rally in the bond market. yields a lot lower. i did not understand why the rally continues so hard. today more of a selloff. how much pricing can you really take in in the market? >> not a ton. i would start with the front end of the curve. there, again, we struggled to

keep rates above 5% in terms of peak rates, terminal rates. we have struggled to keep the pause price in that the fed has clearly signaled his coming in the coming quarters. we have essentially priced in a peak a shade below 5%. then quickly going into an easing cycle. that is a very optimistic scenario at this point. >> alix also mentioned some data points we have to be watching heading into next week along with the fed decision. certainly, on the inflation front, plenty to digest. what will you be watching for? >> obviously the cpi print is quite important. to me, the fed's reaction function at this stage, and their ability to communicate a couple trade-offs are very important. in my mind, two things are the top of my list. first, the slowdown in the pace of tightening versus a higher terminal rate or a higher peak rate is the key trade-off the

first half of next year. second, there is a pause likely again at some point in the first half of next year. versus the duration of the pause, they are likely to stay on hold for longer as data continues to accumulate next year. that is very difficult to communicate and not allow financial conditions to ease. so not get the market to excited. that is a very difficult challenge for the next week. >> how does he do that? looking at the probability of a cut to fully priced by september, the cut is being moved forward. how does he price of that out for the rest of the year? how clearly does he have to say, we will not cut in the face of a recession? >> we will see. i think powell was trying to build that case with the speech focused on the labor market last week. we will see them essentially build a dashboard of indicators, particularly, labor market

focused indicators. that will commit them to staying on hold for a good duration of time next year. so, unless there is something disorderly, unless there is an unforeseen shock, it is likely they will say, look, we will stay on hold until wage, for example wage growth comes down and is consistent with 2% inflation. until we start to see more slack in the labor market, perhaps in the form of higher unemployment. until we start to see actual realized inflation, particularly, on the services side come down as well, we are likely to stay on hold. that commitment is not there yet. that is the challenge for them over the course of the next several meetings. to build the commitment and feed it into market pricing. >> that is the u.s. story. globally you are looking everywhere now including around emerging markets. what are you seeing? let's -- >>. you german mark -- emerging

markets, when you look back on 2022 broadly speaking, they have held up well. we have seen significant outflows. the backdrop to emerging markets from a growth perspective has not been good. particularly with a step down in growth in europe and china. at the same time, despite the shocks, despite a stronger dollar, repricing in u.s. rates, the asset class has held up well. as you look forward to 2023, most of the pain is now behind of asset class. the bulk of the re-prices in the dollar and u.s.. with the china reopening story you have green shoots. i am getting more optimistic on the asset class. >> what is your strongest conviction heading to next year? >> the local rate story is very attractive. emerging markets hike rates. -- hiked rates pretty early ahead of the fed.

real rates at the end of this year are looking quite attractive. barring some unforeseen shocks through commodity prices and so on, the starting point for real rates and em is looking quite good. the second thing on how it is from a credit perspective. we have very attractive risk-adjusted yields year in em, risk-adjusted spreads in em. that, again, with a backdrop of a lot of pain behind us, are starting to look quite attractive. china exposed credit is on the bleeding edge there. >> thank you ed al-hussainy of columbiathreadneedle. coming up, two big stories. carvana shares rising as the firm considers new debt options. and elon musk's bankers consider providing him with new margin loans backed by tesla stocks. we will have the latest next. this is bloomberg.

♪♪ energy demands are rising. and the effects are being felt everywhere.

that's why at chevron, we're increasing production in the permian basin by 15%. and we're projected to reach 1 million barrels of oil per day by 2025. all while staying on track to reduce our carbon emissions intensity in the area. because it's only human to tackle the challenges of today to help ensure a brighter tomorrow.

>> this is bloomberg markets. i am m alix steel with jon erlichman.

carvana shares are higher as the dealer is consulting with bankers and lawyers regarding options for managing its bank load -- debt load. eliza, what is carvana doing? what are its debtholders doing now? what -- >> carvana has almost $6 billion of debt outstanding and the holders are worried the company will not be able to repay all of it. that includes heavyweights in that world like apollo, pimco, blackrock. they hold the majority of the debt and they have banded together to make sure carvana cannot pull any new financing move that will prime them, in other words, take precedence, mean they are supported dated in the stack of creditors to get repaid if anything is liquidated. >> based on your reporting, clearly there is, at times, tension between investors and companies. but, this is also a story about trust amongst investors

themselves. is that right? >> absolutely right. there has been a significant trend in recent years of creditors positioning themselves against each other in order to do the kind of maneuvers that i was referring to carvana doing. one holder of the debt will make a sweetheart deal with the company to provide them new financing on the condition that they can trump all of the other creditors in the restructuring scenario. in that condition their debt will be senior to everyone else's. >> eliza, this all for 11 for all thing is unusual when it comes to restructuring. i am wondering if it is a template we will see next year as the environment becomes harder. >> right. it is a bit unusual, certainly in recent years when the -- when it has been so hard to find yields that the investors and fed have leaned towards trying to grab it all for themselves in a move where they make the

sweetheart deal with the company. but, we absolutely might see more of this. especially as the credit markets turn and every company is becoming a little more wobbly. it seems likely investors are weighing the risk and reward of trying to get out ahead of their peers or lying with their peers -- allying with their peers against the company. >> what will you be watching closely in terms of where things go next for carvana? there is a lot a volatility in the markets around given all these moves. >> what i will be looking at will be the upcoming interest payments. carvana has relied on a lot of debt financing to fuel its expansion. it has sizable payments coming up in the first half of next year. if the company, or even, the creditors, are deciding that a

real wholesale restructuring needs to be done, they might do that before putting any money out the door in the form of interest payments. >> eliza, helpful context. a good roadmap and a great perspective on where we are today. eliza ronald hannon on the carvana story. another story where debt is playing a key role. elon musk's bankers considering providing the billionaire with new margin loans backed by tesla stock that would replace some high interest debt elon musk took onto finances takeover of twitter. joining us is sonali basak who helped break the story. i remember when the deal for twitter was coming together. you were talking to different bankers about what would happen with the debt load. there were always questions. i guess it gets even more complicated given the environment we are in. what can you tell us at this point? >> the deal has been the talk of the town. the leveraged loan market and hung deals have applied to certain situations. twitter is one of the riskiest,

certainly one of the biggest here. it is not the entire debt package. it is the unsecured portion. a multibillion dollar package we are talking about. why? because it was capped at 11.75%. the banks have been really worried about losing money on it. as they are offloading the debt, we reported previously bids were coming in low. as low as $.60 on the dollar. in my own reporting i will tell you this is a war on wall street. you have private credit, other investors, banks, private credit trying to bid down the debt. there is rationale here for this margin loan instead. because, it will lower the interest rate payments for elon musk himself. the question becomes, how much does he pledge of tesla? what does he pledge? does it actually happened? it is up for consideration still. >> at what price? if tesla's stock falls enough

there will be margin calls. it does not seem out of the ordinary that that would happen next year. >> tesla is one asset. he has other assets as well. there are other things they could do. the market could recover a little next year. how long they save off the problem will be interesting to watch their work through. it does not need to be handled today. i am hearing there is a chance they might want to deal with the situation closer to next year. that way if the market recovers a little banks would not take as much of a loss. that interest payment, that $1.2 billion annual payment that he would have to take on is more than twitter makes, really. so, it would be helpful for him in some regard to swap out that package if you can make it work. to your point, it is not an easy deal. he would have to pledge more of his tesla shares, to which he has pledged a lot already. >> so, a lot of moving parts, sonali. to go back to what you are

saying, at least with some of the debt, the bank was looking to find an audience for. we are talking about institutional investors. not a strong push on that front until next year? >> that could be possible and it is the preference for the banks. when you talk to bankers, they will say, please, it is fine. we do not need to fire sale this data. the $.60 on the dollar. is not something they are interested in doing now. but it is negotiation at the end of the day. of can force -- of course investors want a cheaper and the banks want to sell it as a higher rate. where the market clearing price will be will determine the loss will -- the banks will ultimately take on the debt. why is this interesting? it has tied up 50% of wall street. if they can get it cheap, plenty of people would want this at $.50, $.60 on the dollar. at this time they just cannot make that happen for them.

>> right reporting sonali. thank you. sonali basak joining us on the twitter tesla debt story we are tracking. we will take a quick break. when we come back, candidates proposed changes to a foreign investment law that looks to protect its critical mill industry and other agencies from chinese firms. we will get the latest on that next. this is bloomberg.

from one company committed to building a world that works, to three that will focus on a future that does too. this is ge healthcare, creating a world where healthcare has no limits. this is ge vernova, helping generate and move the energy that our world needs. this is ge aerospace, advancing flight for future generations. this is the next generation of ge.

>> this is bloomberg markets. i'm jon erlichman with alix steel. 21 billion dollars, canadian is the amount of foreign direct investment by china into canada last year. canada now wants to change its foreign investment laws in the name of national security. the proposed legislation does not mention countries, but it is part of the trudeau governments

new policy approach to china. brian platt has been tracking the story. he joins us from ottawa with more details. brian, the back story is there was a new strategy, the indo pacific strategy, that this government outlined last month. is that correct? >> that is right. there is a larger strategic shift underway. canada is trying to pivot more towards other allies in the region. that is especially korea and japan. but really any asian country in the indo pacific. that is more like-minded. to allow canada to pivot towards those countries and a start to protect some of it sectors from chinese state-owned doctors. really, the big one we are talking about here is the critical minerals sector. such as lithium. when it comes to electric vehicles. >> brian, will this hurt to develop end of these assets? does canada and its other allies have the money the will, and the investment to do that? >> so, i am told that, yes,

there is enough money out there. frankly, canada always has trouble attracting business investment and foreign investors. that is maybe one of the biggest questions here. if you are getting chinese investors out. and again, i emphasize, the legislation does not name china. it is agnostic when it comes to countries. but it is shaped around china. it means canada has to go find other investors in other countries to do it. but there is so much demand for critical minerals now. if we are talking about that sector, you would think there should be other opportunity here. >> brian, we should point out, even before the idea of legislation, we have seen some action by the canadian government. specifically, tied towards a chinese firms recently. can you tell us more? >> yes. there were three lithium projects that canada's industry minister ordered chinese investors to divest from.

canada has been criticized in the past for being too free in allowing chinese companies that have connections to chinese state-owned enterprises to take stakes in some of these projects. when it comes to energy projects, critical minerals, mining, canada has been criticized in the past for being too open in that regard and not subject seeing it to enough scrutiny -- subjecting it to enough scrutiny. this is canada trying to change that narrative. >> retaliation. do we expect any? >> well, china has shown in the past is willing to, for example, on agricultural imports, to use that as retaliation. that is definitely something to watch. >> brian, thank you. thank you bloomberg's brian platt. breaking news. the ftc is set to sue microsoft over activation as soon as today. the ftc is set to sue microsoft over activision as soon as

today. microsoft stock of over 1.5%. activision blizzard sales down by as much as 4% on that headline. >> we sare reports back to november about this possibility. remember, when we are talking about acquiring a major game player by a company that already has a massive franchise in xbox, this was already's going to be -- was always going to be one of the considerations. in recent weeks we saw markets trying to get their head around what this might look like, trying to get a sense of what strong lobbying team microsoft in washington can perhaps put forward to get to the finish line. this is probably a development a lot of people were waiting on based on buzz these last few weeks. >> now it looks a lot bleaker. the ftc is potentially suing microsoft over activision blizzard as soon as today with activision blizzard saw -- a

stock down 4%. as we had to the close that is a jon erlichman and i am alix steel and this is bloomberg. ♪

>> to be you up-to-date with news from around the world this is the first word i am arc crumpton -- mark crumpton. baltimore zelenskyy tells putin -- bloomberg that vladimir putin's threat about nuclear weapon should be treated seriously. they say they should be no room for compromise on crimea or russia. >> as a last resort there is a danger he may use the nonconventional weapons. he once threatened them, and biological terrorist weapons. we are serious about this. >>e