>> we welcome our audiences with the first word news. i am john hyland. bloomberg has learned that the u.k. is considering sending challenger two battle tanks to ukraine. that we the first time a western country has given ukrainian forces tanks to fight russian troops. last week, the u.s. and france announced they are sending infantry fighting vehicles to ukraine. in brazil, the president is asserting his authority over rioters who sought to unseat him. security versus our disbanding and arresting supporters of the former president who stormed the nation's capital. more than 1500 people who were camping in front of military

headquarters in brazil and demanding a coup were detained today. new york city, more than 7000 nurses at two major hospitals one on strike today. the nurses at mount sinai and montefiore say pay should be higher. the pandemic led to high turnover, forcing hospitals to fill the gaps with expensive travel nurses and push margins negative. virgin orbit is on track for britain's first-ever space launch tonight. the takeoff of a modified boeing 747 jetliner with a rocket under its wing is plan between 11:40 and 9 p.m.. manchester united in liverpool are among elite clubs being targeted for buyouts, which just hosted the most extensive world cup ever. any potential deal with further cement strategy of investing sports assets, in part to boost the country's profile and boost wealth away from natural

resources. 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 am john hyland. this is bloomberg. ♪ >> welcome to bloomberg markets. kriti: let's dive right into the price market here. green on the screen with the equity market. ordering up about 1% on the day. this is significant. it is the official first real trading day of the new year. equity markets were open last week as well, but now you are really seeing volume elevate. volume is 30% higher on a 30 day average. is it taking into account holiday moves, but everyone is back from vacation and back at trading desks, back to investing in the equity market. but it's not just equity market

alone. the nasdaq outperforming tech, really leading the charge here. the bond market comes to the forefront. they made a little bit of a u-turn and then some. yields now lower on the day by about four basis points. stocks and bonds both bid at the same time. no longer seeing one or the other dynamic at play. yields slightly lower, the dollar really taking a hit here. weaker by about 0.7%. now that we see the weaker dollar, it fuels some of the game from the commodity complex. crude trading at a 75 handle, up about 2%. jon: in terms of sectors, it is pretty widespread within the s&p 500. you have eight of 11 sector groups moving higher. to your point, technology has been leading the charge. if you look at the nasdaq 100 performance, you have names like tesla at the top of the leaderboard right now, not just

because of a rally in technology, but because a lot of the rally is tied to optimism surrounding china's reopening. a company like tesla has strong ties to that market. to give you a sense on the willingness to take risk, you have crypto stocks led by the likes of coinbase, which is up 18% as we see investors coming back to hard-hit bitcoin. not to say everything is in the green right now. as we see worries about the road ahead for the economy, we are seeing some of that play out in retail. you have the name like chicos, taking their shares down about 9%. lulu lemon with a warning about its margins weakening as it deals with higher costs. that is taking a tumble to the tune of 8% so far today. kriti: something we are going to keep an eye on. interesting in the macro sphere to see the pivot going into the earnings season. j.p. morgan reporting later this week. goldman sachs doing it next week. the banks kicking off a reall u.

as u.s. stocks are higher in the dollar is falling, let's focus on the inflation story and the recession risks for the year ahead. joining us now is sebnem kalemli-ozcan, professor at the university of maryland. thank you, as always, for joining us. we are pleased to have you and your making your debut here on bloomberg. with course no the ones who will ultimately decide this phase of 2023 or 2022 is a recession in hindsight, i am curious, can we actually see a recession in 2023 that is this for session concept? sebnem: thank you for having me. the answer to your question is yes, we can see a recession in 2023. we can date the recession on the technical definition of a

recession. the point is we are living through a soft landing right now. at this point, there is no reason for me to think that this is going to be a deeper session with a huge increased unemployment rate unless there is another shock that hits the economy. so far, we are going into a soft landing. if we do witness a recession in 2023, and there is a high probability that that will happen, i think that will be off the session. jon: what are the indicators you're looking at for now that paid the picture of a soft landing? sebnem: right now, the goods inflation coming down. we still have an issue with the services inflation and the tightness in the labor market. but the goods inflation is on the right track. that's the definition of a soft landing. you are adding downward pressure on prices.

without a significant increase in the unemployment rate, we know why this is working out like this. everything started with goods inflation, linked to supply chain disruptions. now, that is coming down. but because the economy is structured back to services outside the pandemic during the recovery, now we are having pressure there. since that is going to start coming down soon, given the tight monetary policy stance from the federal reserve, i think we can bring down inflation without a significant unemployment rate, which is the definition of a soft landing. kriti: i have to ask, if indeed you do see a soft landing, to what extent are rate cuts a part of that story? something markets are still rising and has offered a cushion, to some extent, to the federal reserve that they can tighten further than they need to because they are able to use that tool. to what extent do you think they

will end up having to cut rates? sebnem: no, remember there are two sides to this. the fed has been doing the right thing all along. the fed has tools, and those tools are going to operate on the demand side. they can slow down demand and that is exactly what they are doing. this whole issue is about bringing that demand and supplied to balance. the entire problem in the labor market as it tightens is about that in balance. the issue, of course, is on the supply side. that is something that must happen naturally, because we are outside the pandemic right now. at the demand side, it increased a lot, given that many fiscal policies to get out of the pandemic. what the fed is doing is trying to reverse the effect of that by

the increase in demand. the upward pressure of prices coming from the demand side is going down. that is what the fed has been doing. of course, given the lag and forward-looking nature, the standard monetary policy is very important. that is exactly why it is not just about increasing interest rates, but also keeping them there for some time, just to make sure we are in this tight monetary policy, so that demand pressure comes down sufficiently enough that supply and demand come to balance again and we can solve this problem in the labor market, which is leading to wage inflation and the cost to shop that fits into inflation. kriti: a lot to digest. sebnem kalemli-ozcan, professor of economics at the university of maryland. we thank you as always for your time and insight. more coming up ahead. this is bloomberg. ♪

kriti: this is bloomberg markets. turning now to the political gathering in mexico. president biden today is meeting with the mexican president and canadian president justin trudeau at a summit aimed at reducing tensions over migration and road policies. joining us live from mexico city is annmarie hordern. annmarie: thank you so much. alongside these issues is trade. i am joined by canada's trade minister mary ng. thank you so much for joining us. in north america, this is how we

function. may, myself, and i model. you three countries need to work better together. one of the biggest disputes brewing during this conference is going be energy policy. do you think there's going to be inroads made? minister ng: i just had a productive meeting with my counterpart. i would say absolutely. we are going to continue to work together. i have been listening to the canadian investors who have made investments here in mexico. it is really important that trade agreements are respected. but certainly in my conversations with the secretary, this work will have to continue between our three countries. to goldie's comments, i am thrilled that businesses from all three countries are here on the margins of the north american leader summit, which really does show the opportunity to be working together and for us as governments to be working together.

but also the business sector. annmarie: when it comes to the energy dispute, it could be viewed as protection. but mexicans don't really agree. with this lead to a panel looking into it or at the very end, tariffs? minister ng: all options are open. it's an agreement that also provides for mechanisms for dispute. but as trading partners, and ones that are like us, who do enormous trade volumes, i would say that this is one of the most successful trading relationships in the world. the three countries have been trading together for 30 years. if i look at 2021 trade volumes, we have done nearly $2 trillion every single day. it is $4 billion per trade.

these are significant numbers in trade between the countries. it is important that when we have issues we have to resolve, we work very intently on resolving them. but our agreements also give us mechanisms for resolutions. everything is on the table, but our preference of course is to always find a resolution where we can. annmarie: justin trudeau, york prime minister, said that the u.s. and canada want to make it clear that if they were to negotiate this and put this beside them, there could be potentially more foreign direct investment into mexico. is there a timeline that at some point you are going to have to move to plan b? minister ng: the prime minister is absolutely correct. his misses expect to have pretty debility and transparency. what are we really talking about here? we are talking about an opportunity to work together to create greater green energy and greater renewable resources, a sustainable economy and environment here in mexico that

canada very much wants to be part of. we are all very motivated to try to find a solution. like i said, i met with the secretary today. i implored on her that we must continue to do this work together, to find a resolution. but as i said, all options continue to be available to us. annmarie: considering all options on the table, i want to pivot to the inflation reduction act. with seen a number of u.s. allies coming out, angry at the u.s. for what they say is unfair trade practices. what is canada's response? will it mean more money in the spring budget and to what industries is canada going to try to target to combat subsidies u.s. companies are going be getting? minister ng: the inflation reduction act is a recognition that the fight for climate change and to build an economy that is green is something that

the united states is committed to, and so is canada. if i take a look at one of the areas that we are very pleased at working with americans on is the building of green automobiles, electric vehicles. we have been building cars together for 100 years. our economy, and that sector in particular, is deeply integrated. if you take a look at a vehicle today, it crosses our borders about seven times before it is finally assembled. annmarie: just to make it. minister ng: just to make the car. the future is going to be the future of electric vehicles. canada has important, critical minerals that go into those batteries. the batteries and the assembly of those into electric vehicles is going to be a really important part of our economy. we have already done our part. we will continue to do our part to make sure we continue to stay competitive, so we are supporting our industries in this important value chain that is about building an economy that is great. annmarie: when you talk about

wrong materials, i immediately think of china and the hold they have on lithium. is there a point where canada would give preferential treatment to the u.s. or mexico for lithium? they're looking more within this trilateral relationship rather than abroad. minister ng: i would say canada has already started doing the work with its critical minerals strategy. we are very committed to developing those critical minerals in canada in a sustainable way. creating a value chain and supply chain with our friends who also share our values, and the rule of law. we already have an agreement with the united states where we will absolutely be part of working together with europeans and japan as well on developing critical minerals so that we have those important minerals into whether it is consumer products, automobiles, the technology of the future. it is going to require those

intervals, which canada has. we are committed to developing them sustainably with our partners, which includes indigenous peoples. we are going to do that with our partners in a rules-based way. annmarie: finally and very briefly, i just want to end on this moment at the g20, because i know you are there, as was i. xi jinping went up to justin trudeau and confronted him about leaks to the media. you are the trade minister for canada. you have been going all over the indo pacific to look for partners. does this make your relationship much more difficult with beijing after that confrontation? minister ng: we have a multifaceted relationship with china. we just saw at the end of 2022, we hosted cop in montreal in canada. we did that with china. there are areas we are going to cooperate, especially on issues like climate change, or china has to be part of that solution. there, we will cooperate. we will also stand up for values

important to canadians and the rule of law that is important to canadians. in that context, we will at times challenge china. canadians expect us to do that and we will continue to do that. but i am very confident that canada, and our trading agreements and relationships here in north america, in the indo pacific, to which we are growing and expanding, with our partners in the european union, we are very well-positioned to keep doing the work we are doing, leading with canadian values, and standing up for what is important to canadians, which is the rule of law. annmarie: thank you so much. that was canada's trade minister, mary ng. all options are on the table when it comes to the energy dispute. jon: thank you so much. annmarie hordern in conversation with canada's trade minister mary ng. the aftermath in brazil after people stormed congress, the

presidential palace, and the top court on sunday. the latest details, next. this is bloomberg. ♪

jon: this is bloomberg markets. i am jon erlichman with critique up to. time now for today's "for what it's worth." 0.7%, that is how much bloomberg economics estimates will be shaped from economic activity in brazil thanks to the unrest we saw over the weekend. let's get an update on how things have been playing out. bloomberg's julia has been covering everything as it has unfolded. what can you tell us know about the recovery efforts underway? julia: it is really the day after the president putting up a show of strength. he met with congress leaders, supreme court justices, all

three buildings attacked yesterday. really putting up a united front. the justice minister just said they have detained about 1500 people so far. they are still clearing protesters from military facilities where they went to after they were clear from congress. it's really just assessing the extensive damage done to the three buildings there. kriti: can you talk us through some of the market reaction we have seen across brazilian stocks, but more specifically the real? julia: in the morning, assets were underperforming by a ton. now, you see a little recovery both here and a bit of slip in u.s. stocks. it's a bit more even ground. but brazilian assets have been underperforming since last week, as investors worried about what the new president will do now that he is in power. jon: that's what i was going to follow up with, julia. in terms of what you're hearing from professional investors on how they are viewing brazil going forward, what are you

going be watching closely? julia: it for now, most people we have spoken with after yesterday's events say whatever happens in the short-term will just be short-term. the reaction to the riots, but people are worried, investors are worried, because the new president has been signaling more spending. resilient investors never like that. lack of control, fiscal accounts, we are seeing underperformance. people are mostly very cautious on brazilian assets. kriti: certainly something we will see if it sticks throughout the rest of the year. commodities continue to make a little bit of a comeback. bloomberg's julia let take, thank you as always. it is a fascinating story. we are looking at a brazilian real that is quite weak against another favorite, the mexican peso. jon: as we watch the markets in north america as well, just a quick recap on things how -- on how things have been playing out in north america.

today, investors giving equities a fresh look. the s&p 500, as we had to break, up about .5%. this is bloomberg. ♪

clinics beds on a goldilocks scenario. happy monday, everyone. >> happy new year. >> what is the cutoff? >> i think you can continue to do it. lunar new year has not started.