>> welcome, i'm john hyland with the first word news. in louisville, kentucky, a shooter killed four people and wounded others. he is dead and it is unsure whether he was killed by police. he was a former employee of old national bank. the doj investigating into a highly classified document that reveals how the u.s. is -- spies on other countries. there were assessments on the war in ukraine and intelligence gathered on diplomatic allies. former president trump repealing a decision that would require

former vice president mike pence to testify in a january 6 investigation. the judge in washington rejected the claim of executive privilege. taiwan is seeing signees -- has seen chinese military drills like this before. the reaction is on par with the one last year when nancy pelosi visited. china began the drills when the taiwan president met with kevin mccarthy last week. global news on air and on bloomberg originals, i am john hyland, this is bloomberg. ♪ john: welcome to bloomberg markets.

kriti: -- on a five day average, i love to look at the shorter timeframe. you are looking at 4099 on the s&p 500. down only .1%, marginal amid a light trading volume. closed overnight, you are looking at the 10 year yield. higher by one basis point, the inflation report on wednesday, something to keep in mind. the dollar is where the action is an one more sign on how thin the volume is even in the currency markets. the bloomberg dollar and invite .5%. but a good chunk comes from the mexican peso, a function of brent crude in focus, and the handle on that commodity. matt: a bit of a pause with tech stocks.

trending lower, close to 1%, investors assessing the latest price cuts by the electric vehicle maker. hard to ignore, more than 45%, the going concern, working with advisors on the option, the s&p continue to track pioneer, 6%. happens with exxon? we will dig deeper coming up and on the top gainers on the s&p, schwab shares moving higher by 4%. any signs of confidence, the markets will take. some of the client money that came into schwab in march was seen as a boost in confidence to that company. kriti: a lot going on. waiting for the economic data. inflation numbers will be crucial. especially as we get it snapshot of the health of the american

economy. stephen was shadow -- stephen had this about the recession. >> even the retail sales numbers at the end of the week are going to unfold, they are going to tell you there is more resilient in the economy than he thought. we're going to go to a second half of recession but not all are created equal. some recessions are shallow. some are very deep. jon: one read of the economy can be seen through chipmakers, samsung and taiwan semiconductor cutting this. we think about the memory chip production move and the market reaction, walk us through what it signaled to some of the other players. >> that is the point.

samsung's largest memory chip maker when prices -- samsung keeps powering on and causes the others to suffer more pain than it can usually stomach much better. this time it is saying no, we are going to slow production and help out the pricing environment. that is a seismic shift and goes counter to what has happened in the past. we are seeing micron stock react positively. the ceo is saying please, everybody needs to cut back. we need to be rational and that is happening. kriti: put that into perspective in terms of the readthrough for the american chipmakers, from a stock market perspective, even though there are nuances to the types of chips, it feels some perp your best simple. samsung is cutting production and certain members are rising in the stock market, some falling. what is the readthrough to the u.s.?

ian: there are very few memory chipmakers left. this used to be dominated by the u.s. and now you have only got micron and a little of western digital. the stocks are performing well today. for the rest, it does not mean much because they got forced out of the memory chip market years ago. jon: when it comes to the market share battle, because samsung, some of the past restrictions on production cuts were in the hopes of gaining more market share, does it send a broader message around who is going for what market share in an environment like this? ian: you nailed it. it used to be a battle for market share to give you the -- to make you stronger when demand came back. part of the tactic was forcing

out weaker players. but we have three large producers, arguably four. how many companies can you force out before the market becomes unhelpfully concentrated? regulators say take a look. probably the turf war in computer memory is probably over. we are probably down to as few as we can have which would explain a little of why we are not still going all out to get market share in this situation like now. kriti: something we will be keeping an eye on. i was in barcelona two weeks ago and around the 14th century gothic cathedral, i saw a samsung marketing campaign. it is incredible to see their reach. ian king, we thank you for that crucial perspective. let's stick with the tech space and a company that gets those

chips, apple pc shipments dropping faster than most rivals with a 40% decline in the first quarter. personal computer sales have been down across the board since pandemic lockdowns are no longer impacting demand. overall pc shipments down 29%, below 2019 levels. senior technology analyst is joining us saying this is healthy now but exposure to china is a risk. joining us now, what do you make of this? is this a course correction from the massive spending into apple products from the pandemic? >> that is one thing. but we are also looking at tough comparisons to last year. last year they launched new magma pro with a new chip that helps sales. you have got to deal with as well. i chose is that consumer spending in at apple product is getting weaker. apple is not immune to a

slowdown and consensus numbers for q2 or upcoming results need to come down over the next couple of weeks. it is our take away. matt: -- jon: you never know with apple and the new products, whether it jazz his people up. i know you have shared your own views on how the second quarter or heading into the second half might shake out. can we reach a firm conclusion on weakness based off the first quarter numbers? >> one thing you have to figure out is apple really dictates test the growth is dictated by the iphone. this is when the newer version comes out but that is not going to happen in september and october. people who want to upgrade probably will wait until the new phone comes out. so the tail end of the upgrade for the year is not going to be as strong and you mix news about

consumer spending slowdown, macbooks slowing down, ipads negative. there is not a lot to be excited about. kriti: we know a lot of products are being released by apple, the ar headset. let's talk but the services side, their stores. we are getting reports that there are talk of unionization among the workers. is that going -- how is that going to affect the bottom line? >> it does not expect margins as much as people think. on the services side we will see continued weakness on advertising and gaming. that is also an area that could be under pressure. kriti: senior analyst on a rug runner -- anurag rana. the pivot away of technology, shares of natural resources rising on a report that exxon mobil has helped preliminary talks on a possible acquisition. what you need to know about a

potential deal. this is bloomberg. ♪ what do you see on the horizon? uncertainty? or opportunity. whatever you see, at pgim we can help you rise to the challenges of today, when active investing and disciplined risk management are needed most. drawing on deep expertise across the world's public and private markets in pursuit of long-term returns... pgim. our investments shape tomorrow today.

kriti: this is bloomberg markets. i'm kriti gupta. rising reports that exxon mobil -- joining us is julia. walk us through the details of this potential deal. what is in it for exxons? >> pioneer has some of the best acreage in the basin and exxon is looking to expand its midland position. because the acres are neighboring, it is good because

when you frack you drill down and out. this would add decades of drilling inventory. kriti: it could be a crucial piece of the bottom line. we know exxon is a massive global company. we have to wonder to what extent and what timeline this includes. if this deal even happens this year but enough to drive up shares by 6% in today's session. we are going to broaden the discussion on global energy markets and bring in a true expert. ed morris joining us at city. let's talk about the pricing. 85, 84 handle on brent crude. to what extent is the chinese reopening priced and? -- priced in? >> it was overpriced in, there was great exuberance and earlier data turned out to be related to something else in which demand looks like we was up a million

barrels a day. but that was the chinese new year phenomenon. it happened last year the year before and we are waiting to see what is happening. but it is a slower recovery. it is not a goods recovery, it is a services recovery. it is not a big investment recovery and property markets are not seeing any expansion but contraction. we will wait and see. but it will be an end of the year from around -- phenomenon. jon: initially you had skepticism on everybody who became bullish. how do you feel now? ed: the market has changed a lot. where the risks are, still to

the downside rather than the upside. with more supply in the market, with opec cuts, demand being crippled by prospects of economic slowdown and recession. production has grown and all of that has moved into the export pool, taking away market share from other companies -- other countries. >> did the timing of the opec bus cut suggest they do not think it will rebound as quickly as they sick? -- essay? ed: -- there was a period of time when they thought oil prices were going up with the mortgage crisis and impacts on global credit and the u.s. banking system, we had oil

prices close to $150 in july 2008 and going down to the low 40's by december of the same year, a five month period of time, a drop of more than $100 a barrel. they have good memory of what is happening in 2000. that was the problem between opec, two big countries, russia and saudi arabia were russia said they were not going to cut and the saudi's said you have to , there is to be a pandemic. if not, we will show you the consequences. they started producing and inventory flew to a high level and prices were negative on the nymex. i think it was a precautionary move to try to preempt what was bound to happen in the market with oversupply and demand slowing if not reversing in both the united states and europe. kriti: we know in that circumstance, we did see prices go negative, though briefly.

talk about the fact that if we are talking about the our word and recession, the bond market is pricing and when it comes to fed cuts, what kind of price target are we looking at for brent? ed: not in the 40's or 50's. circumstances are different from what they were when we had the price collapses in the past. 2008 and 2020. in all of the earlier period's of the price crash in 2020, inventories that accumulated to high if not record levels. product inventories are at or below with the level is in the last five years at the lowest point. crude inventories did rise considerably in the first quarter of the year. but it was toward the middle of the range, not to something over exuberant. inventories are not going to be unloaded. as prices go down, they won't be

competing with production. we will not have the underlying causes of the fundamental price crash. but we think prices could go down. much below the preferred opec plus price abating to 70 and a touch below. think there will be market mechanisms at work in the opposite direction, including the u.s. buying of strategic petroleum reserve oil. it includes china accelerating, we have china with discretionary inventory build. sometimes as much as $500,000 not 500,000 barrels a day. certainly we are not going to have an oversupply of indus -- inventory. we might be flirting with 60's but not for long. >> outside of inflationary and recessionary risks, what is the biggest downside risk for crude?

edit: on the supply side and the demand side, we are underestimating the return of oil from iraq, iran, growth in venezuela, which could be 100,000 barrels a day. in nigeria. we have growth in ill lot of non-opec countries. but it could surprise us and add 1,000,000.5 barrels a day if things go in the -- a million and five barrels a day. in the non--- in the opec production capacity, we have more in that we have before and we will see what the countries do if they have to fight a drop in prices. on the demand side, recessionary risk looms large. people like perry summers say the recession is going to be worse than people are capping and they have good reason to think it might be worse.

the demand may not evolve to the degree we think. we think it will be around 1.4 million barrels a day. it can be lower, and which case the opec plus has not cut enough. jon: i know we don't -- you don't cover the stocks or companies, the center of energy consolidation, but given the -- doing deals as existing players or no deal's it all, without surprise you? ed: we had that last year. it was low. if there were ever an opportunity, we had prices going up, independent companies were drilling and adding to the reserves of larger companies but there was not that much activity going on last year.

what is the right price in this kind of market? when we have u.s. companies with relatively low breakevens, what is the rational response to a world in which we are seeing demand and headwinds that are significant in the years ahead? is the right attitude to hold back on the reserves and not produce them or to produce as much as you can while you can earn money? >> fair questions to be asking. the global head of commodities research at citigroup. our things to julia as well from the bloomberg team. we are also watching the metals market, tech and glencore disagreeing about how it will play out. they're turning to shareholders for answers. next. this is bloomberg. ♪ , colorado. we just got an order from dinosaur, colorado. start an easy to build, powerful website for free with a partner that always puts you first.

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i'm jon erlichman with kriti gupta. for what it's worth, $23 billion is what when court offered for the bid for teck resources. have said no and said they are going to split up the businesses. there is going to be a shareholder vote later this month. today we saw a sizable tech investor in support of text plan -- of the plan. in any event -- electric vehicle filled world, there is a view that will be a valuable business. there are restrictions on how this plays out and what the move ends up being. kriti: you are looking at tech and shares down about 2.5% on the day. a stopped to keep in -- to keep

an eye on. the s&p 500 down about .2%, more markets coverage ahead, romaine bostick takes it from here. this is bloomberg. ♪

romaine: it ain't over until the fed says it over. the fed's fight to the economy may have another round or two to go. romaine bostick alongside katie greifeld. happy monday. we had a four-day weekend for you. katie: i was working from home thursday. we did have friday off. thrilled to be here with you all week. we are going to have a good time. romaine: is the market going to have a good time? it is going to be a