>> welcome. i am john hyland with the first newsprint all cords and -- covid origins are on the table. a joint team from the who in china had said the spread of the virus between animals likely caused the pandemic. this week, the energy department joined the fbi in saying a lab leak from china is more likely to be. russia's president vladimir putin met with members of his security council today after denouncing a attack as a terrorist attack. officials in kyiv dismissed that as a set up aimed at building

public support for putin's invasion. in the party gate scandal in the spotlight. a preliminary report by a panel says boris johnson may have misled parliament on multiple allegations. once prominent south carolina attorney convicted of murdering his wife and son has been sentenced to life in prison without parole during the trial, prosecutors said richard alexander murdoch light, still and used his family's considerable clout to his advantage. the jury deliberated for less than three hours and found him guilty of the murders. global news powered by more than 2,700 journalists and analysts in more than 120 countries. i am john hyland. this is bloomberg. ♪

>> i am amber in for john. welcome into bloomberg markets. kriti: let's start with the price action. we are seeing right on the screen, we were in pre-markets. it turned around, s&p 500 higher by one point or percent. technicals are crucial. bond market, stocks are getting, bonds are, as well. dollar weakness, dollar yields dragging the dollar. we are going to ask as we start to reprice what the terminal rate is on the federal reserve. cannot forget the commodity check. nymex crude trading by a 79 handle. amber: let's take a look at big moves we are seeing. costco growing sales for february at the slowest pace since the beginning of the pandemic. signs of a consumer slowdown. nordstrom ditching its canadian assets to focus on troubles in the united states. broadcom vesting expectations in its most recent quarter.

meta-, one of the best-performing tech stocks right now saying it is going to cut prices on its virtual reality gear in an effort to get people to use it. kriti: thank you. let's get over to the broader economy. brent crude using the bellwether, sharp drop after the united arab emirates said to leave opec. they denied the claim saying they plan to stick to the current opec deal this year. -- joins us now for more. julia, up, down, all around. that is what the oil market is doing. walk us through the report and what turned the markets around. >> the wall street journal reported the uae was considering leaving opec-plus. keep in mind, they have talked about this for several years. the you a >> to monetize. they have spare capacity. they want to put more oil in the market. they feel opec-plus is not giving them the spare capacity.

wall street journal reported that. our reporters at bloomberg heard they are anonymously saying, no, that is not true. it continues to stay with opec and will continue. this dissonance, what we are seeing is traders are saying, the reason this is happening is the uae once more output. maybe, they are trying to get that way by talking to the media and showing they would be willing to pull out but they do not want to. right now, their quota is around 3 million with opec. 3 million barrels a day. the uae has the capacity for 4 million barrels a day. they want that capacity. that might be the next tension with opec-plus. amber: when you look at opec broadly, they must be satisfied right now. prices around $80. we have not seen a lot of volatility. to that end, do you think this is something even the idea that entertaining another one million

barrels could receive a lot of pushback, especially from the likes of saudi arabia? julia: i think so. a lot of people are bullish right now because of china's recovery. when china completely comes back on the market, we are going to see some people be tall trading. peak demand. they could be persuaded that we will lead more arrows -- need more barrels on the market in the second half of the year. i think that is a possibility. you are right. they are happy. it is $80 a barrel and we are not in peak driving season. that is something to consider. amber: i'm glad you mentioned that. kriti: you are all over analyst notes and what could come next. this upcoming week is sarah week in houston, the super bowl for the energy players. i imagine a lot of the conversation is going to be how high oil prices can get. what are you hearing? julia: this came off the heels of international energy week in london where the traders were partying. you've got these back-to-back weeks. what we have been hearing is

everyone is bullish. some traders are wondering, if everyone is bullish, should i be bearish? hearing from these companies, last week was traders that -- at international energy week in london, this week is companies and big oil market movers and deciders. i think seeing how they think demand is going to play into it is going to be interesting. it sounds like everyone is bullish on 2023. amber: thank you so much, julia. joining us on the oil story. turning now to fresh economic data. a stronger than expected ism services report signaling that the labor market is still tight. however, we got a read on other indicators. new orders in january rose shines of -- signs of economic growth. importantly and perhaps a catalyst for the markets, prices paid continued to slip for a fourth straight month offering some relief on the inflation front. joining us now is nationwide chief economist kathy best

chance of joining us. i am losing track of the different types of inflationary indicators we can use. we are down because it does not look great in manufacturing. we are up today because things seem to be loosening on the services side. where you going for the most accurate read of what is happening on the inflation front? >> hi, happy to speak with you. rate question. there are a voluminous number of measures and sometimes they are contradictory. i would say, clearly, the consumer price data due out on march 14 is the most conclusive reading for inflation. that is going to give us a good guide of what the fed's preferred reading, the pce price indices. the things i am watching. let's look at the ism report, both services and manufacturing. services has eased, but that

price index level is still high. look at the comments, yes inflation pressures are easing. but, it is still very elevated. i think that is what we are seeing on the service side of the economy, which is overall running strong. that is a problem for the fed, it keeps service inflation hi. i worry a bit, we've got news to this rather steep disinflation on the good side as bottlenecks have become unwound. as supply chain bottlenecks. with china reopening and coming online with oil prices potentially going higher, that feed into other commodity prices and lyft goods prices and headlight. it is a lot of crosscurrents to consider. kriti: what is striking to me about this particular report, it proves perhaps the january reid was not a fluke, it wasn't a seasonable our ration. which brings me to, how high can the services growth go?

is this a trend or are we talking about a more broad re-acceleration of the economy? kathy: i think that is what everyone -- whether you see that in financial markets, the volatility one-day, one week we are down in the equity market. bond yields are rising. and vice versa. you have days like today where both are rallying. everybody is really trying to understand what is the truth of what is going on. i would say february is going to tell us a lot about how persistent -- and the degree of strength. with january, ours is it is unlikely you maintain the type of strength you saw in january. -- is likely to slow, likely half a million by 250,000 or so. retail sales consumer spending should slow. the key part is what happens with inflation. that is going to influence the federal reserve.

your question about how long can we stay on this elongated runway? we are talking about landings, soft landing, hard landing, may be no landing. i think we have more runway here because the labor market has been so strong. once we start to see weakness, eventually, we should. one way or the other, the federal reserve is going to rein in demand and inflation. maybe there is a lateral part of 2023 and two 2024 story we are looking at. kriti: right now, the market is exciting rates to tap out at 5.5%. amber: do you think the risk is to the upside or downside given the information you have? kathy: i think it is to the upside in our base case view. the fed does raise the target to 5.5%. i think risks are on the upside. it doesn't necessarily mean they will go there. they could decide to get to that level as -- at 5.5% and hold it

there longer. they have options. i think it is going to come down to the february data and particularly march 10, employment, march 14, inflation, it is going to determine whether the federal reserve goes 25. i think they will go 25. it is a high threshold to get to 50, but it is not out of the question. that is why markets are pricing in odds of that of that happening. if the fed doesn't inflation significantly cool, they may feel they need to do more. kriti: kathy of nationwide, walk us through the talking points of the inflationary story. what do you do from here? from the corporate perspective, coming up. cosco share slipping after reporting the slow list monthly sales -- slowest monthly sales state since covid. this is bloomberg. ♪

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kriti: this is bloomberg markets. let's turn to the retail story. shares of cosco falling reporting its lowest monthly sales gain since april 2020. one of the worst performance on the s&p 500. cfo saying there is weakness in big-ticket discretionary items. i think it is a combination of the economy and concerns out there. let's bring in bloomberg's john edwards. you have been with us all week. you have heard a lot of different realtors -- from different retailers. analysts said, i wish we would see a membership price hike because that is how good the earnings out -- earnings were.

is that enough to take the stock? >> i guess there is disappointment that a hike hasn't come around yet. the company is saying it is a matter of when and not if. we will see that membership fee go up sometime later in this year. overall, cosco is seeing what i think a lot of retailers have reported this season, which is basically results are good right now. they are concerned that the consumer might he weakening as we go deeper into the year, especially when it comes to as the cfo was saying, as higher priced this questionnaire he items that people are shying away from as in flesh and nine -- as inflation remains elevated. kriti: it is a tough place for cosco to be if there is some sort of consumer slowdown. isn't there value proposition supposed to be beneficial to consumers at this time where they are dealing with high cost so they are more willing to go to costco to add up savings they can? john: yeah, i think that is part

of why you are seeing them be cautious but not catastrophic. i think they will probably continue to benefit in a lot of their merchandise categories. they have a large grocery operation which has been holding up well as people shift their focus to necessities. the cfo did say that overall -- on a overall unit basis, they are continuing to do well. overall, it is not a dire situation for costco. they probably will benefit a little bit from that trade down phenomenon that we are starting to see more of. kriti: at the core of costco's business model idea of economy scale, you are essentially able to sell items for much less -- sell bulk items for less per item. watching price hikes in the membership fee but actual items themselves, is costco's appeal

as a bulk item provider dying? john: i think they are operating at -- in the same environment as everyone else. even if there price myths -- mix shifts higher, people will still turn to them as offering lower prices overall then they a lot of their ordinary retail competitors. they are not the warehouse stores. i think they are well-positioned. like so many retailers this season, they are being conservative in their outlook. amber: thanks so much, bloomberg's john edwards for joining us on costco. time for our stock of the hour. today, we are looking at rod,. shares rallying after posting solid first-quarter results. a look being viewed as attractive. joining us from san francisco, more on this is ed ludlow,

cohost of bloomberg technology. these results stand in contrast to more val, trading down. what was it about broadcom, what were they able to lean against in this quarter to best expectations? >> broadcom had projected confidence in december. the difference about this company and its leadership particularly, the ceo is they have very carefully managed supply even when there was great , elevated demands. they did not want to see two great stockpile. that is the first point. there is some evidence that at least in the corporate spending theater, bucking the trend in terms of the relevance of their products is still there. they are heavily reliant on apple, who are at this time there single biggest customer. that was a big part of the prediction projection of $8.7 billion revenue in second quarter.

above expectations, they fixed the narrative of the earnings season that the market is rewarding bullish when it comes to guidance. kriti: rewarding bullishness but also rewarding key phrases. say the word ai, it feels like it since the stock on a rocket ship. rod calm did that -- broadcom did that. how is a chipmaker going to diversify ai? ed: they talked about the man there, elevated demand in the short term due to interest in ai particular lee on the corporate side. what is interesting is the types of chips broadcom does, application specific circuits. what is so cool about those chips, they are programmed for specific function that -- at high efficiency. they can handle a task at a high level of performance, which makes them good for ai processing. when you think the height of scale, google as an example, those have read through to ai would building up their

infrastructure in that space. they also make switch trip -- switch chips which transfer data between data centers and computers themselves. that is a process that artificial intelligence has to leverage. they are giving modest commentary about interest being there from customers, but the market recognizing that they are well-placed if there is indeed to be an investment room when it comes to ai. amber: those that are skeptical about broadcom think the pace they are on is unsustainable. if there is some kind of slowdown, i wonder to what extent ai could be meaningful enough to offset that. ed: bullishness is relative to your industry. if you think about the broader outside of ai, the broad spectrum of chips, they are one of the biggest chipmakers in the world. they see a slowdown of sales broadly in the second half of this year, but maintained able still see year on year growth. there are a number of conveys, yes some against the high bar from the pandemic era demand

seeing significant drops year on year topline growth. we will have some, if not modest topline growth and the readthrough from what we heard last night is ai is a can tripping factor to that. amber: thanks so much to bloomberg's ed ludlow for breaking down the results of broadcom. coming up, a new survey shows the bank of canada could be set to pause its interest rate hiking cycle. we will talk about the widening gap between the boc and the fed. this is bloomberg. ♪ to where they're going. and at chevron, we're working to help reduce the carbon intensity of the fuels that keep things moving. today, we're producing renewable diesel that can be used in existing diesel tanks. and we're committed to increasing our renewable fuels production. because as we work toward a lower carbon future, it's only human to keep moving forward.

♪ we all have a purpose in life - a “why.” maybe it's perfecting that special place that you want to keep in the family or passing down the family business or giving back to the places that inspire you. no matter your purpose, at pnc private bank, we will work with you every step of the way to help you achieve it. so let us focus on the how. just tell us - what's your why? amber: this is bloomberg markets. now is time for today's what it is worth. four point 5%, the consensus number of where the bank of canada will keep rates according to a new bloomberg survey. what makes this number interesting is that it is the

same as the last interest rate decision. it will be for the first time in eight meetings that interest rates in canada do not go up. it stands in stark contrast to the u.s. federal reserve, which is expected to increase rates by at least 25 basis points at the next meeting. canadians are believed to be more interest rate insensitive given the levels of indebtedness in this country. we have also seen signs of inflation cooling on a more sustained basis than other parts of the world. kriti: it is interesting. we are looking at 4.5%, when we are talking about 6% in the states. it begs the question, who is leading who? the bank of canada was one of the early movers. he fed dragged their feet. i think it speaks when you have that hawkishness out of the federal reserve. is that respective to the dollar? do you see weakness in the loonie? amber: we have seen that show up. it is an open-ended question about whether that means we

could see -- we could import inflation into canada. but, you highlight the bank of canada goes on its own. we cannot ignore what the federal reserve is doing. to what extent can we continue to diverge before it starts showing up in painful discounts on the canadian dollar? kriti: i think that is an issue every -- almost every central bank in the world is having. arguably, the boj as well, which contributes to that sustained green on the screen when it comes to the dollar. let's take a look at markets. in s&p 500 higher on the day by 1.3 percent, marked by the outperformance and the nasdaq. 1.7% rally among those tech names, broadcom is going to be significant. ai been helping those names fly across the board. bond market, to year end front end of the curve in closer to 5.5%. 10 year yield, getting closer to

4%. round numbers are the name of the game. the dollar a little weaker on the session, down .4% giving a bit into print and crude. stick with us, me and remained taking you through the closing -- me and romain taking you through the closing bell's. ♪ to guide you through a changing world. ♪

romaine: a sour start to the week, flipping to a soaring finish on this friday afternoon over 4000 on the s&p 500. romaine bostick alongside kriti cuba -- gupta. kriti: it is a bend to the bond market. there is a lot going on when you look at the eco-data and what is getting repriced from the federal reserve. romaine: we talk about that big jump up in treasury yields this week. we are getting a fall in those heels. i do not know if tha