that's turn to our colleague and good friend sonali basak, bloomberg wall street correspondent. nali: that idea of loan demand being lower is significant, especially in mortgages, where you are seeing lower demand expected by jamie dimon because of higher interest rates. they guided for the full year at about $55 billion net interest income, pretty flat relative to what they were guiding before. so where do they make money? equity underwriting was more than $1 billion. that is a lot for jp morgan. you can expect that to help that equity trading revenue, at $3.3 billion. that sets the bar high for goldman sachs, which was supposed to have, and we will hear from them pretty soon, the highest jump in equity trading revenues at expected $2.4 billion. so what i am watching for is competition. tom: we've got apple out april 28, and there's already talk sell side that they will talk about use of cash. what are we going to hear on use of cash from dimon and his cfo today? they have to be under inordinate pressure to define what they are going to do. jonathan: on one hand, -- sonali: on o

sonali basak has more. we are looking at the losses from archegos. almost $1 billion for a single client. however, it is important to remember, even with this loss, they brought in a record amount of money this quarter. without the loss, they would have maintained their lead in equities trading is a total in revenue for that business. they've had a huge jump in their fixed income trading business as well. what did james gorman have to say about the archegos losses? the family office represented around 10% of their client base. these kind of losses almost never happen. we didn't even see this kind of loss during the financial crisis. they are not planning for major changes in their prime brokerage business due to this loss. in some ways, the loss made sense at morgan stanley relative to some of their peers because morgan stanley was the biggest prime broker to archegos. as we know from our own reporting, goldman had gotten in later on, so it makes sense that their exposure would have been less than morgan stanley's to begin with. he also called the sal

george, sonali basak -- sonali basak. george, thanks for joining us. some perspective from your clients. how did they feel about investing in the next 18 months? george: it is an important question. i think most of our clients, about 70%, are very big institutions who tend to try and take a longer-term point of view . in the near and intermediate terms, the economy we believe is going to be ripping and doing very well. but i think as folks are looking longer-term, interestingly, we are returning to some of the questions that we were wrestling with pre-pandemic, which are namely how are folks going to be able to earn the returns that they need when perspective returns, certainly in fixed income markets, given where rates are, and also in equity markets, given where starting valuations are, are going to be lower prospectively than they have been historically. this is how they reposition their ships such that they can achieve their long-term objectives. that means looking further afield and equities and they might have historically. it means adding more c

they post these -- sonali basak. they post these record numbers and nobody talks about them because we are so used to seeing these numbers. sonali: just amazing results in terms of trading and investment banking. when it comes to morgan stanley, we are still trying to absorb what $911 million means in terms of a loss tied to a civil client. to what extent will james gorman say what goldman sachs said, that these kind of events can happen the future? are we still concerned about excessive leverage and risk taking? morgan stanley, that kind of commentary matters more because they are big in equities and prime brokerage. but this quarter, i am already cutting text messages from their clients, and what they are saying is $911 million is larger than what was expected, but very small relative to the revenue base. lisa: that is exactly where i wanted to go, the traders in the market trading financials, as well as people that do business with morgan stanley. is a 911 million-dollar headline the one they are focusing on, or ar

joining us is sonali basak. what is the price going to be? have the price a little higher at $360. to get to the 100 billion valuation the price we need to be around $382 point -- $382.70. pretty typical for a listing. does the coinbase valuation support other valuations of crypto companies and fintech companies as we know others like cracking have indicated their desire to go public, and does it to continue to validate this direct listing model as it is one of the biggest we've seen on nasdaq, let alone across all of the exchanges. alix: looking forward to it. very exciting moment. sonali basak, thank you very much. joining us for more is julie shery ahn, bloomberg intelligence senior analyst. if we are looking at a $94 billion valuation, julie, is it worth it? julie: there is a lot more upside than we can imagine this year if a company is able to maintain their levels of users and the revenue per user. if we look at where they were in the first quarter, around 6 million users, even if they dip down a little, the movement below that for the

sonali basak, we thank you for bringing that interview to bear.ompany helping others go green and why they say remote work be worse for the environment. this is bloomberg. ♪ caroline: over the last year, millions of people shortened their commutes by transitioning to a digital workspace. turning their living rooms and offices. from ditching time and trafficked in the longer having to warm up the car on a cold morning. the climate impact these changes have had on the globe should have seen improvement. one company is saying it is more complicated than that. although companies around the world are doing a pledge to limit net carbon by 2040, it is households that may not -- compared climate change to the pandemic in his 2021 letter to ceo's saying i believe the pandemic has presented such an existential crisis, such a stark reminder of our fragility that it has driven us to confront the threat of climate change more forcefully. as part of our work shifting series, joining me for more is the watershed cofounder and president taylor francis who is maki

sonali basak -- tom: sonali basak on the 66 page letter from jamie dimon. from rbc capital markets and their equity derivative strategist. i want to get technical here away from the basic equity block and tackle. what is the distinction in the derivative space right now if you look out over the four cross moments of variances, the skew, if you look at the nitty-gritty of derivatives, what does it signal about the latest bull market? >> a great question, one we are focused on all the time, one of your favorite words, skew, we want to ask that in great detail. he saw a vic's with a sub 20 handle, that broke down pretty big deals. the last week two things happened that alerted me. the first was we have a volatility up situation. as the market rallies we have started to see volatility climb. that's typically not a great time and the second was that skew, our favorite imbalance between hedges on the down side versus leverage on the upside, that is going much more to the downside across the board, that's not just -- it's kind of saying, volumes are obviously quit

i know sonali bassett spent the last minutes -- sonali basak going through -- sonali basak spend thew minutes going through this. sonali: you have them beating on revenue, beating on expectation at the asset management unit come up beating on pretax for that wealth management unit as well. they did come in short of expectations on their advisory business, though their equity underwriting, where they compete in an with goldman sachs, we do see them bringing in more than $1 billion in equity underwriting revenue. people will absorbency's numbers, look at how they stand competitively compared to their peers. equity and fixed income trading just below 3 billion dollars, beating expectations largely, but in pure volumes, a bit lighter than their two bigger peers. jonathan: the company bringing in inflows of $105 billion for morgan stanley. just wearing through more headlines, the -- just pouring through headlines, the stock is down a little bit. if there is some early disappointment in any of these numbers, can you see it? sonali: let me give you some perspective. morgan stanley and goldm

sonali basak is joining us now. the bonus story, surprised? sonali: not so much.inting for the people who work there because they would've been a banner corner -- a banner quarter if not for archegos. could come back later this year if performance were to turn around, but the same time this all comes with the overlay of how they retain talent, do they want to keep certain talent in certain places or do they want to cut the investors bank into a bigger scale? alix: so when we do get the numbers, how do we read through the noise of they are cutting bonuses, we will see what their losses might be. sonali: we do not. we look at the numbers for what they are and we say this is how much money you are losing at a time you should not have had these major losses to begin with. the question is how do you recover from this and make sure this does not happen later on? the big strategic questions are interesting, why is that? you have a new chairman in the next couple of weeks. the former lloyd's ceo garrett as that happens -- the former lloyd's ceo. as that happens, what do c

for more we are joined by bloomberg's sonali basak and i have seen so many companies go public with noosses at all -- no profits at all. these are big numbers for coinbase. sonali: investors liked profitability. we know they are afraid of the bitcoin volatility. profitability is significant and has more than doubled. what it turned in all of 2020, it shows how far the crypto boom can take you, and, in terms of revenue in the first three months of the year, it surpassed all of what it brought in and revenue and all of last year. a pandemic year, a lot of people stayed home trading crypto. the numbers, at first glance, are good. they did not give a forecast. emily: they did not give revenue targets. is that a problem, along with all of the skepticism and regulatory scrutiny that is surely ahead? sonali: exactly. those things are hard to ignore. the things about the regulatory scrutiny is that we knew some of it was there. the question is, how much does it ramp up into the era? it's kind of unknown. some things they will be friendly, others have noted it's an area of concern. another risk

joining us now is sonali basak. is the number one thing we need to look for for all of these guys? sonali: almost 200%. that is how much equity underwriting is supposed to surge at the top banks. of course, not all banks are created equal. citigroup a huge underwriter of spac's, but morgan stanley, jp morgan also big on ipo's. watching for regulation for citigroup and wells fargo. citigroup is amazingly trading cheaper relative to book value than all of the major banks. there are things that might overshadow them. the other big thing to watch out for, because you have wall street now expecting a 66% surge in earnings-per-share for the financial sector more largely. have the prices risen already to accommodate that gain? the year-over-year comp is tough. last year we had banks provisioning billions worth of loan losses. this year, the economy getting better. but you also have a mixed bag here. the trading surge is ebbing. we will watch for that pipeline. can it continue? and also, knowing that loan growth is as slugg

we are joined by sonali basak. around to all of their clients and say we will reassess the leverage you have. what are you hearing? sonali: i have been reporting on this all morning. this is the expectation. while it is somewhat expected, it does have a lot of shockwaves across the industry because others may follow suit and other products may be impacted. who does this impact on the client side? it impacts arbitrage, it asked the highbury -- the highly leveraged wants. my sources are saying there is a chance the biggest banks might get more business out of this, morgan stanley, j.p. morgan, goldman sachs, because they were able to walk away relatively unscathed, while credit suisse and smaller brokerages, it will be harder on their hedge fund appliance. what is more is if you are a big hedge fund, big highly levered want, you will be able to bear more easily on this environment. what does that mean? more concentration if this is not done regularly. -- not done correctly. guy: is there a market impact? if there is,

joining us with more is wall street reporter sonali basak. it seems that he will be safe here but he is the one that elevated her to this position in the first place. cross that line for me. sonali: is a tough question. you have investors trying to give patients to really turn around, get rid of some of these issues. they had green sale, then arche goes. why was it credit suisse versus the other banks that are facing these issues? what team will he have to get past these issues while also doing such a steeper review of these individual business lines? kailey: what is a going to mean when it comes to their share buybacks? what is the financial implication? sonali: beyond the lawsuit itself. that is the big worry. the buybacks, the dividends gets in trouble. let's talk also about any regulatory issues they have in the u.s. with the fed or in switzerland on top of that. right now, what analysts are saying is that they can be about the regulatory capital even with these losses. what becomes of the financial return to shareholders, not just this qu

tom: sonali basak joins us, our chief wall street correspondent. i want to go to what you nailed yesterday with the other banks, which is the efficiency ratio of fortress fraser. what does it look like? sonali: she held expenses roughly flat at a time when they are dealing with consent orders and at a time of reshaping the bank. that idea of getting 13 different markets, it will be more expensive on the front end more likely as they deal with the structure and costs. but people like that they are getting more focus while still keeping a global reach, which is unique to citigroup compared to, say, bank of america. she told analysts last quarter she would be focusing on this bank, but not overhauling completely, and she just took over. this is really her first earnings call as ceo. jonathan: let's talk about the strategy overall. do you see this as something that has been in the pipeline for a while, or is this something that fraser came in and said this needs to be done? sonali: a little of both. you see jane fraser really changing up what that fabri

thanks to sonali basak for mentioning louis vuitton to me.ook at lvmh and what they announced in earnings yesterday, and they are absolutely extraordinary. the theme here is every single statement we are going to see is going to be a beat. jonathan: and i think we have to talk about goldman again. those beats were huge. $1 billion plus in some cases. tom: stephen biggar has seen this before, research director at argus research. if you were to focus on goldman sachs, which part of the process says wait a minute about dividends, about share buybacks, and what we are going to do with the cash? stephen: it is always a good problem to have. i think the results midyear are going to enter a lot of those questions, but banks are certainly flush with cash right now. they've had moratoriums on dividends and share buybacks for over a year now. i think we are going to have pretty strong shareholder return figures come out. lisa: do you prefer the broker focused banks, the ones less susceptible to loan demand at a time when people do have so much cash as

sonali basak joins us now. the since you get from talking to this industry about what they are anticipating? carried interest has become such an emotive subject, with those at the top of the industry paying less often than their cleaners. that was the narrative that has gone round and round. what are they expecting? sonali: i've been in talks with a lot of people just this morning. one, what are the ramifications? how is this cost passed on to other people who work for a private equity firm should this happen? how is this cost passed on to investors in private equity firms if the fees were to rise even further because of these issues? you're absolutely right, this has been a total political all for most of the time it has existed. i want to point out that also, under former president trump, this was also an issue. so you have republican presidents as well as democratic presidents taking a strong look at this huge benefit for the private equity industry. private equity founders have largely gotten much wealthier

also with us, bloomberg's sonali basak. thanks for your time today.timed conversation. let's kick it off straight at the pointy end of where private equity is right now, carried interest. is it going away? is it completely going away? what are you expecting, and if it does go away, what impact is it going to have on this business and returns? sachin: thanks, guy. it is nice to be back. it is nice that you started with the easiest topic of the day. [laughter] it is too early to tell if this is going anywhere, but i think the discussion does need a little bit of perspective. i think if you are going to say buy american, market american and so on with turbines, you also have to realize that private equity is an area where america leads. it is where it excel's, where it innovates. so it is a time for cool heads and measured conversation rather than an adversarial approach. if there's anything the last few years taught us, it is that adversarial approaches don't always lead to the best outcomes. we heard from warren buffett. i think we have heard from jami

banks to coinbase, you bring this interview with michael, so we really appreciate your recording, sonali basak. coming up, we will ask if regional banks are just as optimistic about the economy is wall street. this is bloomberg. ♪ amanda: this is bloomberg markets. i am amanda lang with matt miller fulton we are taking -- keeping our eyes on citizens financial today as it beat analyst estimates for we have the chair and ceo with us. bruce, thank you for being with us. today we see softness and the stocks. give us your flavor on the quarter. what do you see by way of -- on the commercial banking side come are you seeing a real kind of rebound at this stage? bruce: i characterize the quarter as led by strong results in our people businesses, particularly capital markets, so we had a good quarter in emma day and underwriting, -- in m&a and underwriting, which is great to see. our mortgage business is starting to suffer a little bit in decline and on sale margins. still overall strong revenue levels. that was the high note, and we also did a good job managing the balance sheet. bonds were broadly

juliette: that was jim millstein speaking with guy johnson, alix steel, and sonali basak.still untreated in tokyo after it confirmed an initial buyout. let's get some details from our deals reporter. tell us what the latest is, particularly as we see toshiba on traded so far and why cbc is so interested here. manuel: good morning. it is a great deal, one of the largest buyout deals potentially if it materializes in history. first cbc, the reason is clear. they have raised a huge amount of funds and they are under pressure to deploy that capital and toshiba is one of those great brands that is still up for grabs and potentially has been a takeover target, so if you put the two into together and add the existing relationship between toshiba, who is a former cbc capital donors then you can see how the deal could potentially make sense. also keep in mind that toshiba has been under a lot of investor pressure to deliver and push the share price, so it is a conglomerate that has been struggling in a way for the last few years, and they show their crown jewel and the memory busin

earlier today, blackstone president and coo told sonali basak that investors need to be concerned aboutlation. >> steel and lumber prices are up double digits. used cars are up 25% year on year. we are beginning to see pressure on wages, in areas like hotels and theme parks. i think that is something all investors need to take into account. alix: joining us now is david kostin, goldman sachs chief u.s. equity strategist. really good to see you. it has been a long time. david: nice to be here. thanks for inviting me. alix: let's pick up what he was talking about, being worried about higher inflation. how do you make that investable? david: there's a couple of ways we can think about that. the first is u.s. economic growth is peaking this quarter and is likely to be decelerating, still growing, but i do a slower pace through the balance of the year. in contrast, in europe things are getting a little bit better. we won't see a peak in their growth rate until a little later. so the performance is likely to be from more domestic cyclical companies that have been doing well. they will pass th

sonali basak joins us with more. propriate when we have basis point -- we have yield down six basis points on the 10 year. sonali: they say that net interest income could rise to $4 billion into the fourth quarter of this year. so what is the concern? it is that there is still not loan growth, some that we heard yesterday at jp morgan. i found that firm loan to assets , on that basis they have fallen down ready percent. ash down to 30%. that was 40% a year ago -- down from 30%. that was 40% the year ago. they are underwriting some of their investment banking activities relative to their peers. there could be some questions about how they plan to go to debt underwriting, which is traditionally there big business for bank of america, and why they were relatively shorter in equity underwriting, which we know is a huge business for all the banks. expenses with the last major concern. bank of america had major covid related expenses, almost $2 billion higher than we saw previously. they said that they want to bring those e

for more, sonali basak joins us. but first, happy birthday. sonali: thank you.ughter] alix: i remember a year ago to this day, a big birthday for you, we didn't get to celebrate it. sonali: hopefully next year we can separate a bit more, right? alix: so credit suisse, what did we learn? sam: hedge funds -- sonali: hedge funds are not thrilled about this. credit suisse is planning on tightening for its hedge funds when it comes to margins. why is that a big deal? the swaps business is a loved business because there is some flex ability of that margin pressure, and there is also a line of anonymity behind that position. the question behind this is will more banks do it, and will it spread to other products and asset classes? because then it is something that doesn't just impact the swaps business. it impacts many more forms of borrowing that hedge funds do to engage the stock market. guy: this is going to become a much more dynamic process. can you walk me through how that is going to work and how that is going to affect the ability of hedge funds to take risk. so

sonali basak standing by on earnings coming out of citi. at bloomberg were leading with the news this morning that the biden adminstration is poised to impose a new raft of sanctions on russia, including some sanctions potentially around buying new sovereign debt. here's a quote from reuters this morning. officials who spoke on condition of anonymity said biden would bar u.s. institutions from taking part in the primary market for ruble denominated russian sovereign bonds from june 14. i stress the issue here, ruble denominated russian sovereign bonds, because they have been barred for taking part in non-ruble denominated russian sovereign bonds since 2014. i have already caught up with dan tannenbaum, sanctions expert, who said this would make a difference, in the same way that some of the restrictions in the capital market did around 2014. tom: we will defer to mr. tennenbaum, truly one of the nation's experts on sanctions. but i do agree, it does really show a push on foreign policy, including the border with ukraine. who i want to talk

alexandra lebenthal and sonali basak, thank you very much.head, freightwaves' ceo on the recovery as vaccinations increase. this is bloomberg. ♪ ♪ ritika: this is "bloomberg markets. coming up" , jim -- this is "bloomberg markets." coming up,s global vice president. this is bloomberg. ♪ let's check in on the bloomberg first word news. the biden adminstration will try to organize overwhelming public support for that $2.2 trillion in researcher plan. the goal is to line up re-publican voters, independents, mayors, governors. the u.s. is moving ahead with plans to retaliate against six countries that text internet-based companies -- that taxed internet-based companies such as amazon and facebook. among the goods targeted are austrian pianos, british merry-go-round's and italian anchovies. the cardinals won their first national championship since 1992. tonight it is guns like -- it is gonzaga vs. baylor for the men's title. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more th

sonali basak has also stopped by. there is an m&a boom. spac's are a big part of that. a sense that story is now starting to slow down. do you think there are concerns growing about what is happening in the spac market? cary: in general the market has rebounded incredibly from where it was in march and april, which was a standstill. the volumes you are talking about are incredibly robust. in terms of overall activity, spac for the first quarter accounted for just under 13% of level activity. there of a lot of spac ipo's, a lot of capital raised. the market is processing that. i think it is a corporate solution that offers a lot to the various constituencies. i think it will continue apace. sonali: why is it that you've seen major spac whales, why is it so hard to get a deal done? bill gates had made the point that maybe some of these companies are going public too early, right? cary: there's probably a bit of indigestion in the market at the moment. that is the primary cause. i presume that will get work through. you have rapid growth in the funding of the ipo side of t

still with us, bloomberg's sonali basak. thank you for your time today. really appreciate it.t heard, the possibility of cascading risks coming off of this is certainly there, and we have seen that in the past. my sense is that the tide is still coming in. what happens when the tide starts going out? is this whole process going to accelerate? jim: i think you are right to focus on the macro story. there's still an enormous amount of monetary and fiscal stimulus and the system, and more coming apparently, if the infrastructure bill ultimately passes. so that is providing a real cushion of liquidity under these markets. so i am not sure if the tide is going out anytime soon. it feels to me scott, who i just heard say there are probably more out there, but thus far, even this with archegos was very serious and large, but i don't think it represented a risk to financial stability. alix: part of that is because regulators have done a good job of shaping out the banking systems to not have these risks. what do you think regulators are going to do about this? jim: i think it is the f

shery: galaxy digital founder mike mauve oh grass speaking with taylor riggs and sonali basak. of the latest business flash headlines. bloomberg has learned clubhouse is reportedly in talks to raise funding from investors and values it at $4 billion. that would quadruple its value from january less than a year old. clubhouse has hosted some of the biggest names in business in hollywood. facebook removed 14 networks and more than 1000 fink accounts, seeking his way politics around the world. most of the networks from a removed were in the early stages of building their audiences. facebook says it has improved efforts to reveal the crackdown and one of its larger ones in recent months. , we discuss the mayoral election in south korea. this is bloomberg. ♪ mberg. ♪ 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 one. move your xfinity services without breaking a sweat. xfinity makes

bloomberg's sonali wasik -- basak, thank you for the update. haydn's tax plan is as big as -- bidens tax plan is as big as -- jeff bezos plays in. the vice president of the company's cloud-based services will be among our guests wednesday in our special. we will examine the global surprise shortage and talk to ceos at nearly every stage of the production process, we will speak with the global foundry ceo and covering the chips shortage from all angles in our special, wednesday. this is bloomberg. ♪ ♪ emily: the tax plan president biden laid out will likely hit tech and farmer vicki lily hard. the challenge for legislators will be to minimize loopholes that could diminish the impact, according to tax experts. i want to bring in bloomberg's laura davison who has been covering this in depth for us. what stands out to you? laura: tech and pharma have had the run of the tax code for a couple of decades. have had advantages and flexibility because they were largely in i.t. -- ip intellectual property. able to take advantage of low tax rates in the ca