joining us is economist veronica clark of citigroup. bloomberg. ♪ matt: this is bloomberg markets. i'm matt miller. with greg bonnell. what can we expect from tomorrow's payroll data? joining us to discuss is veronica clark, citigroup economist. the whisper number is just above 700,000. what is your outlook? veronica: we have a forecast a little higher, expecting 850,000 jobs added in august. we do see two sided risk around the number. more uncertainty around the august print than the last few months. we could have more labor supply issues or we could also have a return to work as unemployment ends. greg: how important is this number? i think of this as a 1-2 punch, the first one being jay powell, the markets, but a week later you get this key data point which is pretty central to the fed's course. am i putting too much weight behind this number tomorrow? veronica: the fed has really refocused our attention on every jobs number. always some of the most closely watched today to begin every month. the fed ups the ante for every print. it

citigroup have that note out.more likely than a rally, but a modest s&p gain are the base case. nasdaq was down three days in a row, but you saw the pavlovian dog buyers come in. i'm a contrarian indicator. you take away the fact of the day with whatever you want. my life-saving is at the bottom of the pound run. it is certainly trading like an unpredictable pound. people are losing faith in the credibility of the u.k. situation. i'm not trading the pound, i should declare. dani: i was going to say i can't wait until some derivatives desk starts offering some sort of exotic options on the manus sterling volatility index. it is only a matter of time now. [laughter] manus: a matter of time. dani: over at the ecb, policymakers, economists, and academics have discussed to the economic implications of covid and future challenges to monetary policy. >> this inflationary spike will not lead to a new regime of ongoing higher inflation. the current inflation spike is a consequence of supply constraints meeting very strong

david livingstone, citigroup ceo. coming up, a televised debate ahead.n berlin with all the latest. this is bloomberg. ♪ >> at the moment, we are not in a situation that there is no stimulus invested in europe, more than 750 billion euros, a lot. i think we need to go back to normal standards. if you look at the growth rates, yes, we are doing well in austria, but most european countries are doing well at the moment. our unemployment rate in austria is not lower than it was before the crisis. i think the development is good, things are moving in the right direction, we should reduce the similar step-by-step. >> do you worry about a return of the north-south divide where you have tougher more dramatic economists which do not want stimulus and you have the southern countries and you end up with a political fight. >> i cannot say that competition is tough but we leave in competition. all of the european union should be competitive. there is a need to do some reforms, i think some of them did a good job during the last years, they are also developing in the

citigroup more conscious on u.s. equities -- more cautious on u.s. equities. the s&p falling for a third day. the china story is back in focus with tencent taking a hit as they are called in by regulators, a focus on gaining profits. hang seng is down more than 3%. futures in the u.s. are down 0.4%. ecb policy makers will have to decide if they dial down emergency stimulus later today. the hawks on the governing council may still not get their way. we are getting perspective from key voices ahead of the meeting. >> we are in a different universe it seems in the u.s. and europe. in the u.s. you had a commitment to purchase the same amount every month, and this is a clear-cut commitment. tapering means something. in europe there is flexibility. >> the situation in europe is different from the united states. the economy was not performing well, there was a lot of slack, inflation was too low. it is a different situation in the u.s. >> what we are seeing in inflation now, and the hawkish ecb members are once again too short-term focused. >> there will be hawks bei

citigroup took a hit in the financial crisis.t is as much as anything that explains the gap in performance. it is a pretty yawning gap. tom: what is the impact of the great stimulus we've seen, all the quantitative easing. there's almost eight hockey stick to the s&p chart. david: there is for sure. you want to see a hockey stick and then you look at the second half of the 90's, the.com era. you really see that. it went on for five years. we are barely getting started in relative terms. there is the issue of wants the government stimulus fades, what happens to stocks. that is front and center in a lot of minds. lisa: we are looking at 20 years ago, a pivotal moment. it was a turning point. we are at another inflection point in the wake of the pandemic. it is leading to some big shifts. i noticed the lowest income workers are seen the biggest pay gains since going back to late 1990's versus the highest paid employees. how are companies responding? are they expecting investors to shrink? david: you do have the concern about profit

citigroup says they go from 38 basis points down to 15, with the five basis point acquisition.be it is desperation. standard life? lisa: killing it. [laughter] tom: it is like the weekend. jon: this is not the coverage i was expecting. what do you think the administration would think of this? we have to get bigger so we can offer something to customers with a lower price. that goes against some of the thinking i have heard down in d.c., tom, over the last couple of months. tom: we said good morning to everyone on the buy side that uses bloomberg terminal's. it is tough out there. jon: futures down 13 on the s&p. -.3%. from new york, this is bloomberg. ♪ ritika: with the first word news, i am ritika gupta. president biden was unable to convince joe manchin to back his $3.5 trillion spending bill. the opposition to the size of the budget package could jeopardize the bipartisan infrastructure bill. president biden is trying to speed up efforts to cut down greenhouse gases. he will host a virtual discussion on climate change with virtual leaders. the white house unveiled a new goal

citigroup also warning we could see bullish positions, having a large impact when it comes to any small correction. haidi: a lot of this is down to if investors believe when they say invention area -- inflationary pressures. we did see the downshift from early july to august in activity. a lot of it was due to the impact of the delta variant. hospitality, dining out, travel, and the like. they talk about the inflationary pressures coming from the fact it is a downside in economic activity, a downshift in activity, not a result of lack of demand, but supply constraint. we know it is a recipe for inflationary pressure to come. shery: talk about the constraints, we have seen the scrutiny in china continue being felt across markets. and i know every other day, we talk about evergrande, bonds falling to record lows. but we are hearing news they are suspending low interest payments. stitch moving to cut ratings. we are watching them closely as we head toward the opening in china, as well. haidi: like every other day, or every day, we will ask the question whether there is a risk or what conta

credit suisse, citigroup both chiming in.igroup saying a minor correction could be exacerbated by the fact we have so many bullish trades at play. they are saying the s&p 500 is outpacing short by 10 to one. credit suisse concerned about some of those extreme valuations. taylor: thank you as always, ritika gupta. let's look at these equity markets. we are joined by gargi chaudhuri. i am curious how you are thinking about some of these other cautious calls on u.s. equities. do you agree? gargi: thank you for having me. i would say there is part of that that certainly rings true. there are some reasons to be a little more cautious about the market, especially as we see these growth numbers getting revised lower. but i think we should be a little more holistic in our views and think a little bit about what the job market is telling us. as you know, we just got the jolts data a few minutes ago. what we are constantly seeing in the data is the. job market is really strong 10.9 million open jobs right now and 8 million people unemp

citigroup is trying to persuade a court that disgruntled creditors should return 500 million dollars bank accidentally sent them last year. a trio of judges in manhattan had heard from both sides on reversing the decision but a previous court said the lenders could keep the money. the decision shouldn't -- the decision sent shockwaves through the market. sources say kkr is speaking with probe's owners, including project private equity. an agreement could be announced in the next few weeks, but negotiations could still all a part. coming up next, japan's prime minister must convince voters that he can revive an embattled economy. >> this is "bloomberg daybreak: asia." central bank chiefs, acknowledging concerns about the pains and challenges for recovery. christine lagarde and jerome powell both repeated that inflation spikes are temporary. they said growth would pick up to 4% next year, with the central banks unlikely changed under any per minister. china's national development and reform commission promised to keep gas prices stable. they will work to avoid abrupt power cuts while l

and her husband work for citigroup, travers inrance compa had insance polici sh th if t air s not fee, coul cause travele iurance half a blion, llionollars in claim we, gss whowns travers insuranc cigroup. d at is w the insurance companies saved millions of dollars buying christine todd whitman's life. amy: juan, talk about the significance of this. the personal, financial connections, what this meant for so many people and continues to mean for the sick and the dying today. juan: i think people should remember christine todd whitman did not act alone. she basically was acting under orders. it was later revealed i think by the treasury secretary under the bush administration that george bush had -- the president at the time, had directly ordered that wall street be reopened within a week of the attacks. there was a fear in the administration that the continued closing of the financial markets was going to have a disastrous effect on the world capital. so basically, once bush ordered wall street be reopened, that meant thousands and thousands of financial industry workers had to come

we've seen citigroup put out a number from a trillion dollars. putting a number on what inequality cost -- can you give us an inside track of what they are adding up here is proof why it is costing the u.s. economy so much to eat the people behind? catarina: they are looking at a little bit of a wider timeframe than the citi study. this is since 1990, so the past 30 years. they are looking at a variety of mostly labor market indicators to see how these different disparities at up to anything from employment rates, hours worked, average hourly earnings, things like that. sonali: we see the fed stepping in the first time in such a big way to look at how they can make an impact your. are there real moves being taken to close this gap, and cannot happen fast enough? -- can it happen fast enough? catarina: i think that is the big question coming out of this crisis, this pandemic crisis. we have heard fed official talk a lot about how they learned a big lesson coming out of the recovery from the great recession. we saw some of these gaps -- not all, bu

citigroup says the decision sent shockwaves through the market.s debut electric sedan is underway, with deliveries to begin at the end of next month. the company will focus initially on a $169,000 limit to production of the dream edition of the air sedan, which can run 520 miles on a single charge. >> we raised $4.4 billion with the spac merger. we had a healthy cash balance before that. and that sees us through into a healthy position right through to the end of 2022, the end of next year. clearly, we are going to have to raise more money because this is a capital-intensive business. laura: walmart is expanding its hiring push, with plans to recruit 150,000 store employees in the u.s. america's largest private sector employer says most of the jobs will be permanent and full-time positions and comes at a time when a tight labor market is already pushing companies to boost wages and benefits. that is the bloomberg business flash. tom: thank you. the ecb says europe are not planting contribute -- significant buybacks when they expire. shareholders c

. >> well i like the old reference to the citigroup ceo of decades ago pulling one out of the hat there. rob sechan your comment on big tech you own the fang stocks and doesn't seem like you're selling any time soon? >> no, everything but netflix really and it's really a hard time, right, because you have interest rates still supportive you have enormous gains. we manage mostly taxable money for clients. i think the secular trends in place for a lot of stocks are very powerful. you have some cyclicality in a number of like gogel with ads and travel and travel picking pup but it should be no surprise that as -- as delta and the jobs numbers have come into the discussion this week -- and in the prior weeks really -- but that these stocks have done well because they're really heavily tied to interest rates at least over the short term. right? and interest rates have been pretty well behaved. and so, you know, my view is you continue to have to own the stocks for their long-term characteristics. but you pick up a lot of optionality by being brave enough to tip into the market and buy some o

credit card debt goes higher the banks are baying back shares in some cases like at citigroup well below book value. don't be thrown by a week's return this is a place to be over the next year. >> yeah, i -- tiffany he is making good points but i know you like a lot of them, bank of america as well. but i hear credit card balances are going up good for the banks forgive me for being nervous about the consumer financial sheet. but you are not nervous about financials you are long and strong. >> i'm not nervous about the american household balance sheet. the savings are strong and wages increasing bank of america is a smaller position for us. just a quick note, this is part of the rotational leadership we have seen all year, right. characteristic of kind of the earlier stages of the expansion. and the economic cycle so what i do like about jp morgan and goldman sachs is they're diversified revenue. and that's done well for them through the pandemic and these are staples for us but i like the smaller kind of financial advisory firms like a houlahan lokey which is up 35% this year. what i'm

we had some citigroup economists talking about the risk of policy error.had a economists talking about a 30% probability of a hard landing. china is wanting to come down on debt but people are also asking, how far can they let this go? it is kind of a negative effect. lisa: is it an economic risk with respect to the housing market being a third of the economy or mostly a financial transmission risk? >> will economy is what people are looking for. there is a clear spillover. the concern is what will happen to properties. does that depress broader property values? that is kind of having a depressing effect. then the feeling is, if that is happening in china's economy, the deflation will spillover as well. at the same time, tear point, a lot of analysts say they do not see the same linkages that we saw in 2008 and 2007, but nonetheless, clearly the markets have already priced in a pretty negative scenario. jonathan: tom, up until very recently, this was confined to property developers in hong kong . it will be interesting to see if and how this spreads. tom:

in new york, citigroup is requiring its employees to get vaccinated but not get in other parts.aidi: huge contrast and divergence between some of the states when it comes to how masks and vaccines have been approached. let's take a look at data crossing the bloomberg. the s trillion pmi services as well as the composite number. the final number for august coming in pretty soft. 43.3. that is softer than the premium that we had. the services number also retreating, 42.9. unsurprising given that we continue to see weakness in the services component of these industries as we remain in lockdown. let's get a look at how we are setting up for major markets getting underway. vonnie: no surprise. we have the aussie trading at a one-week high. the greenback holding a 3d drop across -- ahead of the u.s. jobs report. you have the offshore yuan staying from here, steady below 6.45. trading near a mitchell a high. -- mid july hi. take a look at the u.s. holding steady after stocks rose to a record on wall street. i goldman, they see more upside for economically sensitive asset, saying that t

>> reassessing valuations in light of economic risks with money managers from morgan stanley to citigroupurning cautious on u.s. equities. earlier guests say the recovery has not been railed yet. >> things are almost back to normal. >> real economic activity is getting weaker. >> companies are starting to push back the back to office. >> major corporations have pushed off their full return. >> there was slowdown. >> the recovery delayed but not derailed. >> the variant is going to be a risk. >> but i do not think it is going to completely derail. our -- >> we have a healthy trajectory ahead of us. >> we anticipate a better 2022. >> the underlying recovery will continue. >> we are going to have to wait longer. >> our next guest says the overall backdrop remains firm and supportive. let's bring in lori heidel. great to have you with us. i really don't think you can blame these analysts for bei little more cautious in the u.s.. look at this chart on the bloomberg, how far ahead the u.s. equity markets have gotten ahead of global. 's. our valuations justified? >> the economic backdrop remains

citigroup call that a misapplication of the law that sent shockwaves.rg has learned that at least 11 game sellers have been working on 4k games. the nintendo switch 4k feature is said to be planned for the second half of 2022 hour potentially later. we hear kkr is in advanced talks to buy australian art company in a dealer could be valued at 870 million dollars. kkr is also speaking with rope's owners -- with probe's owners. a deal could be announced next week, but negotiations could still fall apart. sources tell us merck has agreed to buy nasdaq-listed acceleron pharma. the move did not win over investors. acceleron pharma fell by 8%. the move would see merck take control of a potentially lucrative hypertension drug. shery: that is it for "daybreak australia." "daybreak asia" is next. this is bloomberg. ♪ it's moving day. and while her friends are doing the heavy lifting, jess is busy moving her xfinity internet and tv services. it only takes about a minute. wait, a minute? but what have you been doing for the last two hours? ...delegating? oh, good o

in terms of the call, citigroup sees opec and allies likely to pause increases.oldman sees oil rising to $80 a barrel, jp morgan sees a similar increase, $74. we saw oil steadying around $68 in the latest session. diving into the bloomberg natural gas prices, continuing to soar. we are looking at a continuation of this which impacts heating in the winter. kathleen: that is coming soon, thank you so much. you can get around up of the stories on today's edition of daybreak. it's available on mobile, you can customize settings to get news you care about. this is bloomberg. ♪ haidi: the chinese presidents determine tatian to displace the housing bubble -- the strategy to endure severe short-term pains for long-term gains. [indiscernible] willing to endure painful reforms. i we about to see the commitment to that? guest: yes. [indiscernible] the former fed chair who brutally tightened the monetary policy. later the groundwork for future growth. china is adopting a similar approach that the president is committed to deflate the housing bubble, and investors may be unde

lisa: i want to go back to what you were talking about with morgan stanley, citigroup, and credit suisserading their expectations for u.s. equities. they are not alone. they see a slower growth trajectory. is it a big brought downdraft or a specific selloff for specific stocks? someone with morgan stanley and credit suisse, hsbc -- you just recently did get a little more cautious. can you give us a sense of what was behind your view and what triggered the change? >> if you look, you can see the delta variant has had an effect on growth. that will continue to play out in the coming months. you have seen the labor markets remain somewhat unglued in terms of the demand seems to be far out stripping the supply. there are factors that have to be taken into account. september is usually a tough month for equities. we think that will play out as well. the debt ceiling and what will happen to the 3.5 trillion dollars spending plan from the biden administration. all of those things will factor in. the one thing we are more sanguine about that others is the story is going to flip in terms of profi

tom: dead on and let's bring it to the research and observations from julia and andrew over at citigroupre both using the same language of a hawkish risk this afternoon. jonathan: if you ask people on wall street, ask the economist, is this a tight labor market or a loose labor market? it's a difficult question to answer and you will find a lot of people in different camps. some people think there's a lot of slack still. some people think we are very tight. it's not the debate you want to be having going into next year. there's no real consensus on whether we have a tight labor market or a loose one with a lot of slack. >> the dots are a shade of a mystery of q4 gdp, not so much a single statistic, but q4 gdp, better or worse? jonathan: when this federal reserve wanted to communicate rates would be low for a long time. that was a perfect method -- mechanism to do that. now they all must have the opposite problem with the dots because it might read the other. tom: i would rather the chairman communicate that any speech to the economic club of new york. the chairman can communicate that by

let's bring in global head of commodities research for citigroup.g that you have just done that lowering the oil demand forecast. meanwhile at the same time natural gas prices of course soaring across europe. how do you balance out the competing factors? >> natural gas is overwhelmingly a power generating fuel and oil is overwhelmingly a transportation fuel so their competition is limited although there is comp tegs, particularly in the winter fueled market. we have some liquids of demand, propan in particular, a winter fuel in japan but the gas market as it enters the winter is seeing low inventories in the u.s. with a lack of drilling on the natural gas side and extremely low inventories in europe because of a lack of delivery and a lack of alternative supply so the marks are really poised globally for a phenomenal supply shock on the upside, a spike of considerab considerable magnitude but the oil market is not affected by it and has its own supply and demand balances and there the inventory levels that grew over the course of the pandemic is abo

jp morgan expects revenues to be better than forecast while citigroup says earnings from trading werebably decline by one percentage in the low to mid teens. wells fargo delaying his plans for two weeks while reevaluating the impact of president biden's vaccine plan announced last week, which will require large private employers to mandate shots or testing. it's the third time wells fargo has pushback is return to the office date. haidi: here in australia, westpac will be hosting consumer confidence, as the lockdown continues for much of the country. united group slid after the executive director director was charged with insider trading related to disposal of shares back in 2019. saying he emphatically denies the allegations. lots more ahead on the trading day to come. this is bloomberg. ♪ shery: for only the second time in the state's history, californians will decide whether to out there governor in a recall election. it is a test for democrats before next year's congressional midterms. even the 2024 presidential campaign. president biden urged voters to send a message. >> in the e

citigroup analysts are speculating maybe capital flight is picking up in china as xi jinping cracks down on companies and economies. guy: we will monitor that data carefully. as always, thank you very much. taylor mentioned it at the top. bitcoin undergoing its biggest test. el salvador becoming the first country to adopt it as legal tender. joining us now is bloomberg's bailey which holds. is this going to be a widespread phenomenon? how is this going to work? >> what we are seeing in el salvador is the country has set up these bitcoin atm's so you are able to spend that as you wish. the country making big purchases to be able to deploy that. we are seeing looking at bitcoin that the general reception has been pretty poor. bitcoin is down 2.4 percent. obviously, it is a volatile currency. there have been protests in the country's capital. people in the country do not quite understand how bitcoin works. they are giving away bitcoin in an attempt to encourage nationwide adoption of bitcoin in the hopes that will spur a widespread adoption of the cryptocurrency as legal tender. looking at

citigroup says households facing a 20% increase in energy builds.s a great deal of context around this. in the u.k., they are up 9% yesterday. that's 95%. prices in the u.k. for gas, 95% since the start of the summer time. in europe, up 9% yesterday. up 93% since july. that took mario draghi into the market. you are looking at a million users looking for new homes. where are we in terms of the impact on the pound or the euro in your pocket and the real economy from the gas bike? tom: this over lining is that prices in europe are now so elevated that they are getting up to asia levels, maybe some of that supply shifts from asia to europe. manus: exactly. let's see where the cargo goes. i know you and anna get together. in the next hour, european market open. mark and anna will discuss the decline in chinese growth. germany decides it special today. ♪ (announcer) looking for a better way to lose weight and feel good? how about the one with the 98% success rate and the more affordable weight loss solution? that's golo. there are no monthly fees and it'

his heritage is in citigroup. dr. lee, thank you so much for joining us today.have not visited the ghost towns of empty property. explain how in any nation you could have microeconomic incentives that allows for miles and miles of skyscrapers that leads to the collapse of ever grand. >> the development said -- people really do not have a way of saving. buying property is really one of the most important things that chinese families do. right now, but we are seeing with the potential collapse of ever grand is the policy facing lawmakers. is it too big to fail? what we will see is the potential for beijing to step in to take on some of that debt to ensure that their property is safe. that is critical to boost consumer demand. tom: my working numbers is 200 to $300 billion. who is counting? how do they do that? do they just print more renminbi? >> this is a municipal problem. the question is -- they cannot support, because they are already overextended. that is very beijing comes in. that is where the slate of hand will be taken place. there will be a lot of smoke

citigroup making it clear he wants to buy the euro dip off the german election thanks. it sounds like inside baseball and not important. that is something underreported in primetime new york. it's a call on the politics, a dip in euro he wants to step into it with optimism on the euro experiment. jonathan: down for tenths of 1%. lisa: i'm understanding -- trying to understand what the benchmarks are for the trade here? is it virus cases? it's been a moving target in terms of the metrics to follow. jonathan: you've got to make a forecast, i get it, but the range of outcomes going into next year. equities down by one quarter of 1%. should we talk about football? 19 minutes away from jobless claims. you know more than me now. tom: i've cleared my schedule. jonathan: down 11 on the s&p. this is bloomberg. >> with the first word news. this may be the first start of a new era in human spaceflight. space access want for civilians on a three-day excursion. passengers and the dragon crew capsule include a tech billionaire and a childhood cancer survivor. the billionaires paying

she contacted leaders from banks including jp morgan, citigroup and wells fargo. u.s. funding could be exalted in october. sources tell us she is asking the business community to pressure republicans into supporting raising or suspending the debt ceiling. president biden once wealthy nations to donate more covid shots and deliver them to poor nations faster. he announced another 500 million vaccines to send a, pushing the total pledge above 1.1 billion doses. they laid out other goals including vaccinated -- vaccinating 70% of the world in a year. the late stage trials of its covid shot showed some cases. it is the first vaccine data that offered clear efficacy against the variant. the trial data also showed it prevents risk of any severity by any strain including gamma and mu. 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 vonnie quinn. this is bloomberg. shery: another big vaccine develop it, the fda plans to authorized a third dose of the pfizer biontech vaccine in the

something else in your portfolio are financials, capital one, allied financial, bank of america, citigrouphat the overall these this is for that when you have yields that are so low, it is hard to look at a yield curve and feel that we will see materials steepening anytime soon. michael: some of the names you mentioned had to be more interest-rate sensitive, would benefit more from the short end of the curve moving up. some other financials we have don't necessarily fit that mold. it is really an eclectic mix of different financial service companies that we think are cheap on a standalone basis. we are not trying to express one theme necessarily. guy: the thing that caught my eye that you wrote, you drew a line between facebook and wells fargo. i heard what you have to to say about facebook and some of the parts valuation, getting it as a discount. some people would like to see facebook broken up. elizabeth warren would like to see wells fargo broken up. that is the connection i would make between these two. draw the connection between facebook and wells fargo for me. michael: we believe b

citigroup saying wall street is just too bullish on digit at ad spending, recommending to stay away frome facebook and others, and to consider amazon. is this the right way to play the space, bonawyn >> i'm certainly not butting against alphabet i can understand the bullish case for amazon, but it's heart to -- when i'm looking at margin of error and it's 3% to a% and i'm looking to set up a short, i need more meat on the bone for me to take the risk requisite to establish that short position. that's the caveat that makes me have a bit of pause with the view there >> it's interesting, too, because effectively, guy, they're saying move away from the names largely considered as value when theoretically interest rates are headed higher. >> it's -- they threw pinterest in there as well i'm not certain why, but i'm with bonawyn on this one i think you flee from google at year own parity. in temples of a business model, it's hard to argue against it. amazon i understand. facebook brings with it its own set of problems, a lot of it facebook-induced for the seemingly hundredth time, if esg inves

we are on the precipice of something, and that seems to be the warning from morgan stanley, even citigroups people look out at the bullish sentiment facing economics waning. jonathan: it is not a downgrade for equity exposure, is it? maintaining the story, in europe and japan, may be the story abroad is equally nonconstructive. >> this ultimately comes down to a valuation question. people are expecting earnings to do well, and people are expecting the growth to pick up again. this is a pause. a lot of people are talking more about buying the pause than they are about the consequences. jonathan: this has been a challenge for a long, long time. you can get your economics right, your market call right, and your macro very wrong. >> the economic and the market response have seemed entirely disconnected for some time now. i think also there's a differentiation between what we are seeing in the u.s. and what we are seeing in japan. in the u.s., you have seen a really strong run of equity gains after the prime minister said he isn't going to be running again. there's optimism that his successor w

alix: citigroup says the energy bill could go up 20% for households across europe. to call? -- can we turn to coal? can we go to the dirtier stuff? javier: we have turned to coal united states is firing up coal powered plants tonight to make up for the shortfall. yearning -- europe is turning to the coal. it is a bad situation in europe with the big shortfall in wind generation that is forcing power companies to rely more on natural gas. guy: it is a tricky -- alix: it is a tricky tight rope. for more on europe's energy crisis, aurora energy research lead for great britain, an expert on the power market and he has worked with policymakers on u.k. energy policy and developing power assets. thank you for joining us. what is the problem? where are we falling short and what kind of supply? marlon: it is like you're probably just said, we are falling short in wind power. the u.k. is heavily reliant on wind power. we are currently experiencing about half of the wind generation we would normally expect compared to seasonal averages. [inaudible] guy: we are having a slight

the bank was set for a top role in the london debut alongside citigroup j.p. morgan.r has been stepping up its risk oversight after being hit by scandals. -- has tapped ubs for a hong kong sting as early as next year. the company could raise at least $500 million in an ipo. several chinese tea houses are eyeing ipo's after one raised 1.4 you dollars in a share sale in june. coming up, lori and gilbert says we should had to equity markets in general, and brad gibson says central bank divergence will be the topic for the rest of the year. you don't want to miss those conversations. daybreak: asia is next. this is bloomberg. ♪ haidi: welcome to "daybreak: asia," i am haidi stroud-watts in sydney. sophie: i am sophie kamaruddin in singapore. shery: and in hong kong, i am shery ahn. markets await u.s. inflation data after wall street snaps of five-day losing streak. japanese leadership front

this brings them in line with goldman sachs but ahead of other competitors like deutch, citigroup, lar, morgan. we've seen them all raising starting wages in the last few weeks as they try to stem defections in a booming business. you mentioned at the start, one yardstick to how intense the competition is, is that it isn't one hike, morgan stanley makes its second increase in a month. so yes, it's -- if you're the right kind of candidates this great. tom: seems to be across the board. maybe some envy for some of those wall street bankers as they look across to china where some are paying close to $300,000. >> that's right. never mind wall street when you have chinese hedge funds willing to shell out that much. that's how much one company that manages about $800 billion, a top chinese hedge fund is offering to labor coming out of college in fields of artificial intelligence and computer science. they are responding to the same kind of stiff competition for the right kind of candidate. these are people with a world of opportunities open to them. popular course over the years has been mov

yvonne: you talk about that note from citigroup. there are these global debt stress funds that are eyeing these assets when it comes to ever grand. there is that risky proposition. the dollar bonds may not be more safe than what we are seeing in local markets. commodities though, we are focusing on that. aluminum, we are talking about 13 year highs. we briefly touched 3008 on in london yesterday. iron ore is going in a different direction given the out put curves. we do see wti above 700 points. brent is continuing on this rally here. goldman with his call saying yeah, we could see these oil prices explode if we don't get any news from iran. they are maintaining $80 for the call of oil. the bloomberg spot commodity at 10 year highs right now. whether it is speculation or fundamentals are the key question here. we will bring it to the inflation debate here. while that spur foster -- faster inflation? the u.s. could be pretty telling here and that view that a spike in u.s. inflation is temporary. let us bring in kathleen hays with the

the chinese clamped down on the steel industry, which citigroup flagged. they signal a peak for australia's iron ore export. haidi: president xi jinping sending a strong message to wary stock investors. he wants to play a developmental role in china's financial system. this is a trade summit he gave. he said the government will establish a new stock market in beijing to support small and medium-sized businesses and innovation. let's bring our chief north asia correspondent, stephen engle. a lot of it seen as an olive branch. positivity injected, given the downside pressure we have seen from markets. >> yes and no. i have listened to a lot of speeches from chinese leaders. they are usually strong on thematics and short on details. so this is going to be the devil in the details on this new stock market. and also the pledges he is making to put the band-aid on some of the wounds we have seen, losing hundreds of billions of dollars in market value for these companies. global investors, not just chinese investors. president xi jinping giving the speech. a bit

i do not think this is a lehman moment, ubs, citigroup, we do not see the crisis for china's lehman moment in barclays? it's not a lehman moment, what is it? tom: if is not a lehman moment, it is about a financial shock and it is a huge part of the psychology and behavior of the chinese system. what will be interesting and john mentioned this, with interest-rate stability, there was a linkage yesterday. there is no question we move from idiosyncratic to contagion. it was mild when you look at important benchmarks like euro swiss, dollar-yen and particularly in the yield space is a major theme at the greenwich economic form will be yield dynamics and the zero bound. we are still -- we are still there and i thought yesterday went smoothly. jon: let's get an outlook from the chief investment officer. steve, 4800 on the s&p year-end, 5300 year end 22, and that is bullish. what is the road to 5300 year-end year? steve: it is the same story we have been telling. at the same time that we put the piece out by the way, we cut our equity exposure down from 60% overweight to 50, warning people we cou

and a bet favored by citigroup. at socgen downside pressure on platen for the coming quarters as evergrande's perspective collapses may accelerate the downturn in china's economy. and over at wells fargo switching out the chart eric nelson cautioning that the offshore u.n. could weaken about 2% over the next month. to hit 60. the red on this chart here the combo of slower growth and more tolerance for further capital outflows which nelson says will more heavily influence the currency versus equities. but as we have seen switching out the chart once more evergrande and wider regulatory concerns are weighing heavily on stocks in hong kong which saw a broad based selloff on the hang seng index as we saw tech, property and banking getting hit hard. pushing deep noor bare market territory and now near a support level that was established back in 2008 during the global financial crisis. at .., haidi, analysts don't expect a long lasting spillover from evergrande to banks and property. simple because regulators are not see

namely everything from citigroup which is trading under book value, three-minute which has 60,000 products out there, one that i love is ingredeon, that's the starches and sugars, people haven't been paying to this 2.8% dividend yield and ingredeon, in everything you eat, a ballgame and watch the boston red sox beat the yankees a. hotdog, the ice cream, all made with ingredeon products. but the meat alternative, inagreedion the main ingredient in those. that's where our research comes in. and we think inagreed -- ingredion is a great place to hide and molson coors, a 2.8% dividend yield. they have a beer blue moon which is literally changing the face of the company. they brought back their -- that dividend. and they've done very well with bringing in their influencers like the rock, dwayne johnson. and yes. shery: there's a star of the show today. haidi: i want to ask you about the dog days of summer. puns aside, going into earnings season, is this a real tantrum you're looking out for? hillary: it's a real -- what? haidi: a taper tantrum, do you see that in the earnings expectations going

citigroup, banc of america, also bringing a lot of folks back. think -- now we're in this wait and see mode where they see how that's going and how are people feeling now that they're back. and something we hear a lot as folks are coming in. but they're still doing a lot of their day on zoom. and so what will that ultimately mean for how people feel now that they're back at these desks? they haven't been to in 18 months. so i think it's still an adjustment period for a lot of these bankers. and we'll see as we move into the fall and also delta variant and all these other new variants, you know, how that kind of derails things. i think wells fargo is just out a little bit ago saying we're actually not going to bring folks back until january at this point. and forced delay for that bank. haidi: it is just moving goal posts when it comes to return to office. jenny surane bloomberg finance reporter with us. let's get a quick check of the latest business headlines. china evergrande is facing a bond interest payment worth $45 million on wednesday. last

whether it's barclays, citigroup, u.b.s. and we have bloomberg economics. so why the anxiety in the markets, why is it so pronounced this week? >> i think -- yeah. the consensus that this is not china's lehman moment. the political, economic system is different as ray dalio mentioned that the -- your debt, own currency you can deal with that and it's happened over and over again. and so this is a consensus. but at the same time, evergrande is really a -- of the industry -- real estate industry as a whole. and their liability is $20 trillion which is large. so i think the market concern is beyond evergrande, any systemic risk in the whole real estate industry. because china has tightening the industry quite a dramatically over the last couple of months. and there's some concern that they may be overtightening a little bit and a policy mistake down the road. at least that's part of the concern the markets have now. haidi: even if we believe that haircuts are really looming for evergrande and shareholders and stakeholders, are there bigger concerns about what

a new citigroup survey found most clients are braced for sticky inflation that they think is here tog in this claim a 20% stock selloff is more likely than a 20% rally. that means high prices won't just be here a few months to a year. 23% say it is transitory. stuart: you keep hearing we are setting up for the big correction. >> the s&p is up 16% for the stock market. most fund managers would go on vacation 8%. stuart: a lot of people would think the predictions of the bears are a good sign to buy. >> so far in one direction, when everyone goes one way. stuart: if it starts, we see the correction started there will be a stampede for the exit like we've never seen before. >> if they do it badly and there's a policy mistake for the fed they will be running for the exit. stuart: what do you make of senator warren saying jay powell is a dangerous man? >> her thesis that he made the banking system more vulnerable. he wasn't around in 2008. stuart: that was a diplomatic answer. >> what do you think? >> i do not approve of anything senator warren has to say. look at the dow winners, bouncin

. >> so citigroup came out with a note today, a really good ote, and the u.s.ed on renewable energy and upgrading the grid by decarbonizing it if it gets final passage ge has a 50% market share in the u.s. onshore win. that will help their business substantially. that's great if it happens if it doesn't happen i like health care, i like aviation and free cash flow, growth they beat free cash flow by 500 million last quarter, so i think that that is something to watch. the stock trades on free cash flow and it can only go higher from here. >> if it beat cash flow why is it down 7.5% in three months. >> because all of the industrials are down because we've had a rotation into defensive growth and all cyclicals have lagged minus financial, to be honest and industrials and materials have taken it on the chin and it's an opportunity and that's why i was buying cat. >> i hear you. fedex and nike are set to report earnings, both down 5% for the month and we'll debate when you should buy them ahead of the should buy them ahead of the results and we'ldohanel tt xto. and

. >> citigroup, ten years at 137 looks like it wants to go higher i expect it to catch up. >> pete, last but not least. >> looking at altria group this is a stock that hasn't been talked about a lot i'm seeing call buying right now. >> that does it for "the halftime report. "the exchange" with kelly evans begins right now >>> thank you very much, frank and welcome to "the exchange," everybody. i'm kelly evans, and here's what's ahead a wobbly month for markets as the dow and s&p slide today. morgan stanley is taking u.s. equities to underweight. they'll join us to explain why just ahead the president's tax plan includes more than 80 tax hikes and changes to fund the budget, but there are three that raise the most money and have the biggest impact on corporate america. >>> and the nfl season does begin this week and a number of betting names could benefit. we've got all the stocks to watch. we start with the markets today. nasdaq outperforming, dom, but bitcoin getting all the headlines in the past hour or so >> the trade for the nasdaq right now is interesting because it's only up about

this week and jim, the five stocks i'm calling to see if i'm diversified is disney, apple, tesla, citigroupnk you. >> i love this portfolio i love it. citi, the cheapest large bank. hope it does -- you know, they need some earnings power apple, disney, we bought it for the travel stock amazon, rock solid, as we know, and tesla, i think, is just moving up and up and up. because it's doing so well so that, that is a diversified -- this is auto, entertainment, technology, bank, multiservice financial internet. this is the portfolio that i'm looking for. and i got really good pictures with my new phone. >> i got one of you taking a picture. >> my executive producer got a picture of me taking a picture of me. this is like a mural where you're between two mirrors boom, boom that always fascinated me. let's go to betsy in california. >> this is betsy from california outside my magnificent golf course i have five stocks for you today. i want to know if i'm diversified. the first one is amat, applied materials. the second one is my transportation stock, arc best, arcb the next one is boot barn. you

. >> citigroup, ten years at 137 looks like it wants to go higher i expect it to catch up. >> pete, lastck that hasn't been talked about a lot i'm seeing call buying right now. >> that does it for "the halftime report. "the exchange" with kelly evans begins right now >>> thank you very much, frank and welcome to "the exchange," everybody. i'm kelly evans, and here's what's ahead a wobbly month for markets as the dow and s&p slide today. morgan stanley is taking u.s. equities to underweight. they'll join us to explain why just ahead the president's tax plan includes more than 80 tax hikes and changes to fund the budget, but there are three that raise the most money and have the biggest impact on corporate america. >>> and the nfl season does begin this week and a number of betting names coul

wells fargo sitting it out bank of america and jpmorgan and citigroup up in the range of 1.5% to 2% allthe bond moves and the latest on the minds of investors today. steve liesman is here with more for us steve. >> yes everything in one minute and 15 seconds. a strong bead on durable goods driven by aircraft, but showing businesses in august continue to invest we have had good numbers here. business investment up nearly 14% year over year august marked a string of strong monthly gains with only one decline. that goes back to may of 2020. so amid all of this covid uncertainty businesses have continued to invest. that bodes well for the future communications equipment and fabricated metals and appliances in august did well the ten-year yield kelly talking about, other treasuries marching higher, a sense inflation could hang around longer because of supply chain disruptions and talk of tapering by the fed. it would have been back in march. the fed governor lael brainard saying it is a bit short of the bar needed to taper but added it may be soon, adding that if the fed is going to taper yo

we've heard citigroup say they're cautious.g. stuart: making me anxious. wringing my hands. 50 actually. thank you, lauren. coming up, one "washington post" columnist insists media is too tough on democrats, they're too lenient on republicans. whoa. which planet are they on? joe concha is here to take it on. >>> cnn not happy with people enjoying themselves at college football games, certainly not. roll tape. >> i just can't get over the pictures of those outdoor stadiums. >> even outdoors where people are cheering and enthusiastic, exhaling with vigor, if there are people infected, they can infect people around them. stuart: oh, it is a terrible thing, isn't it? young people having fun. we've got the story for you, promise you. first though, illegal border crossings hitting a 20-year high in july, 212,000 people. august showed no signs of slowing down. we'll take you to the border for a live report on the ongoing crisis after this. ♪. retirement income is complicated. as your broker, i've solved it. that's great, carl. but we

when these banks start to see that spread compress, they tend to go lower in stock price citigroup sharesn 5% right now. bank of america down 4%. jpmorgan chase down 3.5% regional banks like key corp. down 5% as well. those interest rate differentials are huge with regard to the banks. keep an eye on that trade, the second worst performing sector, financials and s&p 500 look at the big technology stocks apple is down 2.5% microsoft, 2.5%, amazon, alphabet, facebook, all making up a large part of the u.s. market one place to keep an eye on, utility stocks they've been wavering between gains and losses every so slightly you can see just about flat on the session right now. the utilities trade has been an underperformer over the last couple of months it did catch a little bit of a relative bid today compared to other parts of the market, but even then, kelly, that utilities etf currently is on an eight-day losing streak. we will see if it can break it today. back to you. >> yeah. again, defensive sectors holding up except that one there are so many other stories going on in the energy and ut

it was going to be in the london debut of this company as well as citigroup and jp morgan.s say credit suisse declined to join the firm's loan group. southeast asia is battling one of the world's worst covid-19 outbreaks. this company expects sales down two point $3 billion. pandemic restrictions creating an uncertain operating environment. next, we will be talking to the rates and currency outlook with alliancebernstein's brad gibson, and see what he says there are aspects of evergrande's crisis that are hard to ignore. this is bloomberg. ♪ haidi: for months now, epidemiologists speculated that vaccinated people may need an additional two help stop infections of the delta variant. but we are getting a new review that has some turn -- some scientists questioning whether a booster shot is needed as well. is this situation where they think it will not create more immunity, or do they think that most people will have sufficient antibodies from the first two shots? >> frankly, the argument was that there is not enough data to show a booster is needed. that the vaccines' efficac