>> i'm john hyland with the first word news. president biden is on his way to europe. his first stop is northern ireland where he will meet with rishi sunak. he will travel to the republic of ireland to mark the 25th anniversary of the good friday agreement and celebrate the brexit deal. the biden administration has reportedly started handing classified documents to key members of congress. the so-called gang of eight committee leaders have begun receiving papers recovered from homes of former president trump, president biden, and ex vice president mike pence. mark warner and marco rubio have been pressuring the administration for months to give them access.

democrats will hold their national convention in chicago in 2000 to. the city beat out bids from atlanta and new york. the decision fell to residents biden as party leader and him one step closer to announcing his reelection campaign. it also highlights the growing influence of jb pritzker. it will be held in the united center, the largest arena in the united states. a volcano erected in russia today. it spewed ash for hundreds of miles and prompted warnings for air travel. three rural villages have been hard hit. u.s. airlines are barred from russian airspace. global air -- global news money four hours a day -- i'm john hyland. this is bloomberg.

jon: welcome to bloomberg markets. kriti: let's get on the price action. on the macro front, all eyes are on inflation tomorrow. the s&p 500 is giving us a little action. extremely light volume. people holding their breath until we get more direction on this economy and it is a sentiment you are seeing across assets. the bond market, a 10 year yield come a basis point movement of only two as we see the weight and hold move. this is important when it comes to the fx space. the bloomberg dollar seeing weakness in the opposite direction. weaker by 1%. dare i say again it is all about inflation. nymex crude with an 81 handle, higher by about 2%. that is going to be determined by the macroeconomic picture. it's interesting to see on the day where people are questioning whether or not recession is in

the near future. commodities trading higher. headlines from the chicago fed president, austan goolsbee speaking at the economic club of chicago. he says we have heard from a lot of members of the fed. prudence and patience -- they should be careful of hiking too aggressively. i think the highlight as he says tighter credit could have a material impact on the economy. this is joining the consensus that even though the banking turmoil is over in the interim, if the -- it is the aftereffects that will tighten the economy. jon: to your point, as we rolled through the week, we will see investors assessing comments like those with the inflation data and fed minutes. we have a number of individual stock stories we are tracking. in canada, a big cannabis complete just acquired another player. we just spoke to the ceo earlier

this hour. he is confident of the market share size but there's concern with their latest quarterly results. the stock is down right now. weight watchers has been a notable call from goldman sachs with a very bullish outlook, a possible $13 price -- that is where the goldman team thinks this stock could be headed after the deal for sequence, which is an on-ramp into the hot wake lot -- hot weight loss drug world. you made the point earlier that technology stocks have been struggling today but bitcoin has been finding its groove, helping a lot of crypto related stocks. bitcoin above 30,000 for the first time since last june. as we start to get ready for earnings season, carmax is an interesting one. the revenue not that interesting but the profit per used vehicle was more encouraging and we will see how other players fair with their bottom line through the week. kriti: may be boring on the

macro front but on the micro, not at all. earlier today, the imf spoke about the state of the economy and the warning of high uncertainty. take a listen to pierre olivier explain the outlook. >> this is reflecting the fact we have advanced economies reopening, moving ahead, china reopening, and we have the tightening of monetary policy. plus a little financial instability that could weigh down the lending point. put all this in the mix and that's where you have our base. the concern we have is there could be a lot of things going off the rails, in particular in the financials to ability space. jon: within that imf update, we had two reports -- the growth outlook and natural ability report.

for more insight, let's bring in maria tadeo from the imf meetings in washington. the chief economist for the bloomberg economics team also joining us. it did feel like this message of a balancing act for central banks that have been fighting inflation but also needing to be at the ready to provides to ability going forward. maria: on top of that, you have the macro update that came in and you heard it, it is off the rails. there are a lot of things that could go wrong. it's a gloomy start to the imf. when you look at the cuts, before we get into the financial system and focus on the macro, they say they are tilted to the downside for a number of reasons. the cut is minimal, 2.8% growth. but the reasons behind it they say could be problematic. they cite problems with the

banking sector potentially not over financial issues, and you alluded to this -- this puts central banks in a tough situation because on the one hand, the we know they have to deal with inflation and keep an. you have all this turbulence happening in the financial markets. if you look at central banks up until now, they have said we are going to tackle both, but there's a big question reflected in the imf as to whether they can do the two at the same time. kriti: i want to get tom orlik's view here. when we talk about the stability and growth outlook maria referenced, china is a major part of it. we are getting that at the same time china is talking about week inflation. square the two for us. tom: it is interesting. the year started on a note of optimism about the global

economy driven in large part by china's more rapid than expected reopening. we had better weather in europe, helping them dodge a recession and u.s. labor markets look pretty robust as well. in the last few weeks, a lot of that optimism has started to unwind. we have had extreme banking stress with the collapse of silicon valley bank and the rescue of credit suisse. have also seen evidence that china's recovery is perhaps losing steam more quickly than expected. data out overnight showing pretty week inflation numbers from china, including deflation in the producer price index. the concern then is that combination of new negatives, banking strat's are sputtering, -- banking stress, a sputtering chinese recovery is going to cap growth this year.

reducing the imf forecast 2%, pretty much in line with what bloomberg economics have been saying. we have a two point 7% number on our forecast. jon: speaking of forecast, maria , it seems like the imf was laying out a host of potential scenarios. i saw one where they envision eight when he 5% chance of a significant credit disruption. to your earlier point, there's a lot of unknowns, putting a lot of potential playbooks out for consideration. maria: remember -- i should be careful with my words, but with a lot of these predictions, there's often criticism the imf overshoot or under shoots. i had a number of messages today suggesting even the new projections which have this minimal cut, when you look at the brand names, they say they are way too optimistic considering the risks they cite.

obviously out there it is volatile and there's a lot of downside risks that could manifest. you talk about the banks and financial risks but remember on the global geopolitical scale, you have a big disruption coming from the war in ukraine. there is no end in sight and that has massive repercussions for the european economy and that feeds into the global picture. yes, the cut is minimal, but what is interesting is a gloominess going into these imf meetings kicking off today but we will have more at the end of the week and central bankers alongside finance ministers. it will be interesting to see how the to play along because they have a similar mandate but some would prefer to see more growth. the central banks are focused on inflation. kriti: maria tadeo and tom orlik. maria usually reports from europe. she is stateside for this imf meeting. welcome to the united states.

to maria's point, while inflation is low in china and the united states, blackrock increased its overrate call -- overweight call on inflation, saying price pressure remained sticky. a strategist writing we are going to be living with inflation. we see inflation cooling a spending patterns normalize and energy prices relent, but we see it persisting above policy targets in the coming years. that breakdown maria was just talking about between what the central bankers one and finance ministers want. i want to bring in the chief economist at ff investments. let's talk about the pace of deceleration. i think it's clear deceleration is growing around the world. but are you concerned about a more rapid deceleration or more robust drop? laura: a recession unfortunately is in my forecast, but for later in the year. right now, what we have seen is

the economy retains a lot of momentum. this is typical. it's when the fed is raising rates, we had high inflation, we had so much spending and wealth built up within our economy, it is just taking time and those tailwinds were really strong. this is where the erosion of that momentum is building. i don't know if it is a really fast drop. to me, it's a building of headwinds that will cause us probably to have a contraction toward the end of the year. this is the uncertainty that is building on itself and we are all feeling it right now. and financial markets, it is the heightened volatility and policy uncertainty. jon: we will get that fresh data point on inflation tomorrow. we've been trying to navigate what is happening in the jobs

market where even in canada, it has been a fairly tight labor market. things have held up relatively well. how does the job story play out over the rest of the year? laura: the question you are asking is one of the most important for this business cycle. i hate to say have any business cycles i have been through, but they are all a little different and they are all unique. something we saw from recessions in 1990, 2000, the mid to thousands, where we saw a very low drop in output but a lot of lost jobs. to me, that was the trend of globalization. we shipped those jobs overseas and retained more consumption. this time around, you could almost have a mirror image where because we are still short of labor versus where we were prior to the pandemic, companies are little more cautious about laying people off. the sad truth is any recession

does include some level of job losses, but one of the reasons why i think a recession toward the end of the year could be more mild is because i think companies will be a little more cautious to lay people off and there is not the scope for the broad job losses that have been the hallmark of recessions we saw in the mid to thousands in particular. kriti: let's spin ahead to tomorrow's inflation report. if you like what has been driving inflation to the upside, though you are seeing a deceleration that went from commodity cost to shelter cost. what is going to be the main driver of inflation stateside? lara: shelter is still a big driver of inflation. this has been a troublesome component. one that has taken a lot of people by surprise. we forget the fact that when the fed raises rates, it shocks

affordability. renters stay in their homes longer. couple that with under building that has been pervasive over the last 10 years, and finally, millennials, which do you have a little more money to spend on homes and by putting that off, they are spending more money on bigger apartments. put it all together and over the long run, rents trend with wages. if you have wages around 4% or 5%, that is kind of where rent growth ends up. it means we are well above where we were before the pandemic and given it is the largest piece of the consumer price index, it is causing core inflation to remain sticky to the upside. i think it is going to decelerate later in the year. it may even decelerate in the end of the second quarter but this coming month, the data we are getting tomorrow, it is probably going to be a piece

that keeps core inflation high and may cause the number to tick back up and that is not what the fed wants to see right now at all. jon: just to circle back on the kind of contraction we could see, are you painting a picture for what we might describe as a mild recession? lara: i am. we have these cyclical headwinds. higher interest rates are going to cause these interest-rate sensitive sectors to be a little slower, more moderate growth of business, but we have secular tailwinds that are going to cause more medium-term resilience. business investment and construction spending on manufacturing have been stronger over the last year. that's a good example and a reason why i'm trying not to sound too pessimistic when i talk about a possible contraction. kriti: the chief u.s. economist at fs investments. thank you for your time and

insight. a crucial inflation report coming up in less than 24 hours. on this show, morgan stanley finding concerns for businesses and upgrades and exchange more suitable for the economic environment. who would have thought of trading recession fears through the index? 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

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kriti: this is bloomberg markets. time for our stock of the hour. shares of nasdaq lower after the index was downgraded by morgan stanley. they savor to financial is better positioned in this environment. sonali basak joins us now. walk us through what this call

was. when i think trading the macroeconomic environment, i don't think of exchanges. sonali: it is a good place to start because this is really the plumbing of the financial system. the concern is they are not necessarily going to meet their longer-term targets this year when it comes to their business solutions business. remember volumes are highly impacted in times of volatility for exchange businesses in market makers, but things like listings would be cooler in a market like this which is why when you are thinking about morgan stanley's call, you see them not excited about the near term for nasdaq because that business solutions -- solution comprises 75% of the firm's revenue. when you look at this call, they are not making it overweight yet, they are just making it not underweight anymore. last year, nasdaq and sold off more than 12% and virtue sold

off 29%. they say the risks are baked in. that is the good side for everybody but they had more of those worries priced into the stock. there big pic here is sebo. a lot of what you are seeing is in the options world. they think they will benefit from something like that. nasdaq reporting earnings on the 19th according to bloomberg data, so let's see if they are beating on the long-term target when it comes to the way they look at their solutions business in the soft market. jon: nasdaq acquired a canadian company specializing in anti-fraud a couple of years back which is a reminder that the exchange operate a year -- operator in canada is trying to go for more steady eddie business, which is the solutions focus there.

sonali: it is interesting because if you look at what nasdaq is doing, they have leaned in a lot to the future of finance as it pertains to technology. it is critical when you look at the financial infrastructure, anti-financial crime is part of that. when you think of businesses that need to enter the cloud or the blockchain. the thing nasdaq thinks about is how ai will change the way trading works. so nasdaq is trying to put themselves at the forefront. it will take some time to see how this business is really change over these asset classes. jon: you cover all things wall street here on bloomberg markets. great to get the perspective on the exchange operators. coming up, when big-time asset manager raising tens of billions of dollars to capitalize on an expected property market. we will talk about a brand-new real estate fund, next. this is bloomberg. ♪

jon: this is bloomberg markets. time for today's for what it's worth. our number -- 30 billion dollars. that is how much blackstone has raised for a new real estate fund which will focus on every thing from rental housing to hospitality and data centers. it has been a rocky time for big real estate investors but blackstone seeing opportunity in a time of uncertainty. kriti: it is coming at a time when a lot of people are concerned about the commercial real estate market. talking about where the turmoil can actually come from. jon: not that they have not had some withdrawal request from some of their funds, but this is a player that has $325 billion in its real estate or polio, so the -- they know a thing or two about navigating through the ups and downs. kriti: let's see if that

reputation hold. the s&p 500 higher by about .3%. amid very low volume, the nasdaq underperforming. light volatility, everything is going to change in less than 24 hours with the inflation report. this is bloomberg. ♪ ng. cheesecake cookies? the chookie! manage all your sales from one place with a partner that always puts you first. (we did it) start today at godaddy.com at allspring, we break away with purpose. harnessing data-driven insights and boundless curiosity. we dissect the market from every angle. helping to build portfolios that redefine what's possible. because investing isn't one size fits all. allspring. purposefully divergent.

>> another low-volume day ahead of the big data report coming out tomorrow and another data point on thursday and other on friday. i'm romaine bostick along with katie greifeld, kicking you off to the close. katie: not too much action in markets. volume light wind's again, just two basis points or so, five basis points when you look at the two-year yield, pretty quiet. romaine: intereto