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tv   Bloomberg Daybreak Americas  Bloomberg  April 19, 2018 7:00am-9:00am EDT

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as long as trade does not derail it. meetings kick off this morning. yield curve here. yield curve here. not only flattening by inverting. could a slowdown be on the horizon? commodities crushing it. aluminum, nickel, kid, outshining precious metal. david: we come in on a shot of midtown manhattan. welcome to "bloomberg markets," on this thursday, april 19. alix: blackstone reporting earnings -- solid. cents a share beating estimates. first-quarter net inflows, over $18 billion. david: everyone is rushing to blackstone. interesting to fit in with the bank earnings. the other financials. blackstone is attractive. alix: we talk about it as a private equity firm but it is not a morbid they have a private
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equity section but it is so huge. private equity -- it is kind of a bank in many respects. it does a lot of things that banks do. alix: especially grating products for retail investors. lighter than estimates by a couple million dollars. estimates, $400 million. i don't know if i can understand that. david: pretty good. alix: equity market softer. no real direction. s&p futures lower down by four points. mixed dollar story. talkingrve we were about yesterday that it 29 basis points, steeper today in 39 basis points. oil getting a boost along with commodities. opec and non-saying they are almost at five-year average goals to rebalance. that should happen in the second quarter.
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focusing on currency cross. below 120.breaking that was a currency pay they had forever. s and b got rid of years ago. back down. breakseuro rallies and 120, what happens to the swiss franc? no one knows. david: we have had a long period of stability, all of a sudden it has moved. alix: could we wind up having data roll down in europe, does that change the situation? david: moore for mario draghi to watch. morning brief. it is thursday. 8:30 a.m. this morning, jobless claims. lagarde will hold a news conference at imf in d.c. more federal reserve -- randy
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quarles and others. joinedirst take, we're by caroline, they executive editor. a commodities chart. outperformance we have seen in industrial metal. the blue line. precious metals, yellow line. white line, overall commodities index. is this a sustainable rally? how does that filter in the markets? >> this is the exact opposite of what we saw in oil as it was crushing. that was a positive supply shock. mainly supply-side. not telling as much about global economy. a lot about supply dynamics. on this, same thing., inverse more supply-side -- sanctions and just two months ago we were talking about aluminum glut and a price fall imminent.
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expectations around this, i do not know what signal we can infer. alix: the issue becomes the spread. nickel had the monster rally. coal, sanctions, that is where it could bite. without this, what about the s&p? oil market, what happens if there are sanctions in iran? how broad-based this gets is key. there are people saying there is no reason for it to slowdown. at the end of the day yesterday, alcoa raising their forecast saying it is not just sanctions or delays. factory expansions in china -- etc. we do not see this and a great david: how much of this is fundamentals. as opposed to geopolitics? president trump could change sanctions tomorrow. with that reverse things? whatere are fundamentals,
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caroline just alluded to with china is a good point. what caroline just alluded to with china is a good point. inflation picture -- a good sense today on how much people think this is a one-off or more sustained because we have that five-year option and that will give you a sense whether people are getting excited about inflation again. signaled fed minutes one of the things business contacts were telling him -- they think it is easier to pass along prices when it is highly visible. like the commodity space -- gas prices. perversely,,g if usually if you have a rising commodity prices it would take away from pricing pressures -- that relative price dynamic. i'm wondering here maybe this is a kickoff for a more sustained thing than a hit to corporate margins. something they feel more comfortable passing along. david: the yield curve. our second story. you can see in this chart -- you can see on dayb , -- on tv touched on the
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lowest since the recession, coming back up today five basis points. why do we care? is this all about recession? >> we care. it is hard for the fed to ignore because of the relationship tween the yield curve and the slowdown in the economy. there are other technical factors at work. treasury selling short dated paper -- having an impact. there is a reason we are hearing policymakers talking about -- is this a bigger signal we need to be concerned about? james bullard, there is disagreement within the fed. that is why people care. david: we hear policymakers talking both ways. james bullard says i am concerned. randy quarles says this has nothing to do with a recession. >> if the fed wants to worry about why the yield curve is flattening and be concerned -- take a look in the mirror. if you have a long-term, it is hard to see why 10 year yields would get very far above 3% assuming the term premium negative. they are continuing to hike.
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in that dynamic -- why should we worry about yield curve? there are two ways to think of it. inverts -- a signal that people expect policy to ease over the duration of that spread between 10's and that is a signal for economic slowdown. the other worry is that this is a cause of the slowdown because it destroys one half of what banks do. credit transformation, destroying maturity transformation. i'm not sure there is value and looking at 10's for what banks are doing. alix: our third story -- imf growth. imf updating growth forecast for short-term, 2020 or 2022, they get nervous. the wildcard -- trade. meetings ando the the minutes today, what will be the rhetoric? >> two issues.
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trade is permeating this conversation. commodities. it is been a big driver in the markets. the president, when he was campaigning talking about trade -- he still surprised everyone with sanctions and chilly tariff s. that is been a major concern and how that will play out in the world economy and also the markets. that is the second thing. the imf saying -- this volatility will continue. you're seeing that anxiety. financial stability and specifically talking about leverage loans yesterday in the risk assessment. you're getting more issuance, more demand on the front, you wind up having worst rated loans riske clo's, creating especially when there is debt. >> for now there is debt but there is the reasonable ability to service that debt. alix: $64 trillion? >> in savings on the other side
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of that equation. if that is the worry -- we will learn the imf white straight. trade.- the imf likes we see economic surprised indexes trending down. above 50 and we have the imf updating growth forecast, the bank of canada saying the global economy is stronger than january. to link the three stories -- yield curvew much is signal and how much the imf forecast turns out to be right. alix: at one point height commodities was a good thing. thank you both. coming up, aluminum, nickel both hitting high. sanctions continuing to boost mental. more about the demand story behind that. this is bloomberg. ♪
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♪ this is "bloomberg markets,", deutsche bank resumes. kim hammons has been ousted. hammons call it the most dysfunctional play she ever worked for. meanwhile the head of investment relations has quit. first quarter sales getting a boost from american spending more on pets. revenues rose 2.8%. pet care business improved and stronger demand for natural food and online sales. results.weighed on proctor and gamble adding a stable of popular medicines to the line of.
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-- the lineup. agreed to buy the business for $4.2 million. that is your bloomberg business flash. alix: thanks so much. what you get when you mix sanctions with speculation that market becoming for major mining companies? becoming for major mining companies? an explosion in industrial metal. nickel hitting the highest level since 2015. aluminum at six-year highs. anding us now, lori heinel, patricia ribeiro -- and andrew cosgrove. andrew, i want to get broad scope. is the rally we are seeing in aluminum, nickel, is that sustainable? andrew: you have to differentiate. aluminum, different factors. u.s. sanctions, paris, real things that are happening. the nickel market -- a lot of confusion.
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there was a notice that was floating yesterday -- nickel saids rose because the lme they were going to delist brands that were tied to previous production. this was 2017 in october. i don't want to say fake news but nickel is rallying on false pretenses. alix: fair point. i, if we get the rally on industrial metal, this chart, metals outperforming precious metals and the broader commodities, are we in a good global growth environment? that would have been the argument one year ago. lori: certainly we are in good global growth environment. we've seen momentum picking up. that should not surprise. there are other factors. china, largest producers of aluminum, in tightening capacity. auto demand increased in the u.s. and other places -- on the
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back of the hurricanes, starting to flag. at this stage we are in a top point. david: to pursue that -- how much aluminum uptick is pure sanctions? if it is -- does that have anything to do with nickel? nathan: there is a certain amount. -- lori: market moves really on trading. these are traded markets as well as fundamentals. it is hard to distill what is driven by the russian sanctions or other things. versus fundamentals. we think fundamental backdrop is strong -- the supply demand dynamics have led to a higher price that would be warranted at this stage in the economy. if anything, we're seeing a leveling off of the global growth in demand. alix: you will have to dig deep, andrew. if you don't know how aluminum is made, it is refined, then it goes to smelter. walk me through the supply chain
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and where the gaps are due to sanctions? or alumina, the largest refiner in brazil is operating at 50% rate. with that said, over the next two weeks we will hear whether or not that refinery can come back in the short-term -- over a two month. period or whether there will be extended range into four q. that is keeping pressure on prices now. very good for alcoa. they are net long aluminum. willhing to a alumina, they be able to sell the metal to china? will they be export? dicey because china does not want to take the other side given trade protectionist measures now. the economics say that shanghai
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price needs to fall by $350 at this moment. shanghai lower by $350. david: the relationship between global growth and commodities. not only aluminum or nickel. i am reminded of oil and the problems of getting shale oil -- because the bottleneck with pipelines. are we at risk of slowing down global growth? certain infrastructure and geopolitical risks causing bottlenecks? nathan: there -- lori: there are signs that we are at the capacity in some areas and the ability to bring these things online has variable time frames. you used to be able to get fracking going quickly because you had a lot of drills ready to go. once you have to drill new things it takes longer. you deftly have a risk that you could have certain inputs of productive capacity getting
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inflated in outsized ways. we will be watching how that feedster to inflation numbers. -- how that feeds through to inflation numbers. alix: you strip out energy and the rally is not impressive. walk me through that. lori: a couple things. we've seen energy prices go up. energy stocks benefit. there always winners and losers. the other side -- those manufacturers who rely on commodities seeing the prices increase will take a hit. one of the things we are watching, earnings momentum being driven by fundamentals. industry, company by company basis. we encouraging investors to be more discriminating and look at active managers who can exploit this pricing's. -- this pricing. -- mispricing. alix: what other sector
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rotations can you make? lori: one of those is regional. favorite market, u.s., despite volatility. we have reached new highs. the combination of market correction and earnings growth has meant a re-rating in a u.s. stocks to 20%. the u.s. is one of our favorites. large-cap u.s. because of exports. looking at sectors -- we like consumer sector, we've seen confidence. we still like banks, despite yield curve concerns. they are lightening on other areas that have been, gotten ahead of themselves like health care and technology. alix: last word to answer. $3000 aluminum? nathan: andrew: no. alix: bold. upgrade after upgraded david: david: thank you for being with us. coming up, the flattening yield
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curve. we'll discuss the dilemma to fed officials. coming up next. this is bloomberg. ♪
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♪ david: the yield curve flattening for most of the last year. terminals chart, the blue line is yield curve, between 2 and 10 and the white is five and 30. it has come up today but it has been flattening this last year. question, is the reason we care about this -- we keep hearing about five quarters after it reverts, we get a recession? lori: that is a major reason we care. people try to draw conclusions on the environment. what we would argue is that misses subtext.
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we're worried about the curve flattening. the near see that in term because receipt synchronized global recovery. david: you have one fed member agreeing -- randy quarles is not worried. mr. bullard saying he is worried. us the markets don't believe in long-term growth story in the u.s.. lori: the markets don't believe it will be outsized growth. they're trying to come to term with this dynamic, improving corporate earnings -- is it sustainable or based on one-time factors versus a fed tightening. we've seen real yields rise. we have seen other things constraining factors -- availability of credit is starting to be impaired. the big thing -- what stage does the employment picture create wage price spiral? that is not our core view.
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fundamentally, is this really a breakdown between what the administration says will happen with tax cuts -- more capital investment that will drive up productivity and long-term growth -- as opposed to a market thinking it will be a sugar high? great point. a when we survey companies and look at third-party service intentions -- they say they will invest. that is the largest are in terms of response of what they will do with the capital. the other side -- they have done other things. give money back to investors, money to workers. there is still this wariness about whether companies will follow through about what they say are their intentions which is to invest. if they invest -- that creates a virtuous cycle around improving productivity as well as enabling market to go higher. alix: the trade has been the short treasuries. you can see positioning for 10
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year treasuries around record shorts. you also have guys like franklin templeton doubling the anti-on treasury short position. will that be the pain trade or the winning trade? lori: there is tension between global growth ultimately to inflation coupling with rising deficits -- does that lead to repricing of treasury risk? that would signal that rates should go higher. or do we have this sweet spot -- back rates act of up, there is more organic demand? we have been buyers when we have seen backups because we think we are in a sweet spot where we will continue to have growth at a good level but not to the level which will create inflation pressures which would drive rates markedly higher. alix: is it the same in europe? lori: one of the things in
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europe -- there are more risks there that the central bankers get behind the curve. they have this dual mandate around inflation and whatnot. there is more risk in europe. that is an area we have been staying away from. , of state heinel street global advisors. coming up, trade tensions affecting investing in emerging markets. trillion of debt in the world, from the imf. two thirds of that increase coming from china. this is bloomberg. ♪
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♪ bloomberg is daybreak, i'm alix steel. not available kind of day. s&p futures down by three points, waiting for a catalyst to move markets.
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european stocks, flat. the ftse up by 2/10 of 1%. u.k. retail estimates coming in worse. what that means for the bank of england as the ftse goes higher. asset classes dollar, mixed dollar story across the board. dollar totally flat -- unchanged. if they can break the 120 level. the curve, 34 basis points, difference between five and 30's. selloff in europe, led by the market, the likes of spain and france. the market having a hard time absorbing as yields push higher. aluminum continuing rally. op the highs of the session and oil -- wow. available a0 barrel. confusion in the market if it is sustainable. what it take for investors to believe it? david: always a good day at the
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show. let's find out what is going on outside the business world. kailey leinz is here. kailey: good morning. the u.s. and japan will engage in a new round of trade talks. they do not agree on what sort of deal they're aiming for. president trump and shinzo abe discussing trade at a news conference in florida. the president wants a two way deal. shinzo abe says the tpp is better for both countries. more fallout from the accident on southwest airlines. they will order inspections on engine fan blades like the one involved in the failure that killed a passenger. they will conduct ultrasound inspections. elon musk has taken the next step in the search for planets outside the solar system. spacex launching a planet hunter spacecraft. it is expected to matt planets ranging from small worlds to gas giants. global news 24 hours a day,
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powered by more than 2700 on air and on tictoc on twitter journalists and analysts in more than 120 countries. i'm kailey leinz, this is bloomberg. imf and world bank group annual spring meetings are underway in washington. michael mckee is down in washington covering. global growth but maybe cautionary indicators? absolutely. >> this is the strongest global growth in years but there is an overlay of worry at the imf world bank meetings about what happens next. it is their job to worry about what happens next. they cc of trouble. -- they see seeds of trouble. debt. ratio, because of the tax bill, worse then countries like mozambique and even italy,
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one of the other poster children for debt. there is concern about inflation. has aood thing, alix commodity show -- look at commodities. if inflation goes up and we see markets and central bank's react, are investors ready? the imf does not think so. they're worried about emerging markets -- there vulnerable to fed rate moves in the united states and a u.s. downturn because so much debt is priced in dollars. also concerned about debt to china, one belt, one road. a lot of people to talk about. david: the of a theme. a good day for alix to have her commodities. we will pick on what you said. emerging markets. the imf in the report had a chart about financial conditions tightening. we have one dealing with u.s. and europe. we will pull that up.
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they been loosening for a while but they are certain -- but they are starting to tighten. the imf things that could reflect poorly on emerging markets. >> they price debt in dollars -- most of it. interest rates rise -- it is harder for them to pay back. they do not think it is a crisis yet. not like 1997 -- the age of financial crisis. on the far right, it is a growing concern. something to keep an eye on. there are concerns about trade affects. nafta negotiations and what the trump administration might do with china and how that might affect emerging markets. a lot of parts that go into products exported from china to the u.s. are originally made in emerging markets. a lot for e.m. finance ministers to be concerned about. david: imf has data in the report tracking trade flows to industrial production -- how closely correlated. mike mckee, thank you so much.
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alix: you read the imf thing off the chart. david: i might as well show up a alix off. alix: this is a chart we are talking about. two issues for imf and emerging markets. debt and trade. that story. gdp.t to two thirds of the increase in global debt since the financial crisis has come from china. emerging markets back out of china, the red line, not seeing the same impact. what does that mean if you are investing in emerging markets? joining us now, patricia ribeiro , she manages the $2 billion emerging-market fund, biggest allocation in china. patricia, what do you do when the imf is concern about chinese debt? patricia:
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jim to what they are saying. -- you pay attention to what they are saying. the debt coming from the local governments, they are able to borrow cheaply and spending aggressively. in areas that they need to spend but others they did not need to. what we have seen more recently is the central government has been coming down and tightening quite a bit and making the local governments deleverage and the risk. derisk.erage and that is part of why we are seeing gdp decelerating. alix: you are an equity investor. do you look at companies that purely have domestic exposure? patricia: that is where we spend most of our time. ift parts of the economy -- the economy is growing 6.5%, the expectation for this year -- what are the parts of the economy that are growing and
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accelerating? since late 2016, the consumer is coming back in china. we saw deregulation helping the consumer, the tax, lowering taxes on luxury goods, more internally. governmentng the trying to stimulate domestic economy. that is coming through in areas -- example, consumer staples. a lot of trends we are seeing, premiums in the chinese market. the consumer is not only spending more, they are spending more in premium brands in china. beer. china resources here in general has not grown in volume. we are seeing the consumer shifting more to high and brands.
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brands trickling into earnings. travel, another area. there is a lot of pushing from the government to stimulate domestic travel in china. middlepportunities, level hotels in china. alix:lori, how do you like china? lori: we are cautious on china. we are bullish on emerging markets at large. we see relative valuation, demographics favor the emerging world other than china. you have increasingly diversified economies with policy flexibility. we are neutral, slightly underweight on china but markets at large, we are overweight. david: the imf report again so my partner can make fun of me. [laughter] alix: into it. david: globalize growth, no question.
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if you take the dominant european, u.s. markets they are trailing into 19. places like mexico, brazil, that is where you see increased growth into 2019. what you think of those? lori: last year, economies that did the best were brazil and russia. we know about russia. one of the big themes -- you have to be nimble in emerging markets. you have to look at where growth trends are aligning with good geopolitics as well. those are markets susceptible to dollar strength or trade, as with china for example. -- of the things we focus on where are those places where there are local consumerism? india, for example. mexico. you have to watch foryou have ts from a macro standpoint. david: india, do you have to worry about oil now? lori: india being a consumer economy on oil -- definitely
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something to worry about. you have more vibrancy to the economy. regulatory and tax reform happening. industries, starting to reach mature asian. -- maturation. there are counterbalancing factors. energy prices, commodities, aluminum, when you start to see those things go up dramatically, importers suffer. that balancing act is tenuous. countriesing, other having domestic demand picking up, where do you see those opportunities? patricia: brazil. brazil has been coming out of recession. we can see whether market has been improving. with that, the consumer coming back in brazil. we have exposure to retailers like magazines. the banking -- the banks are doing well in brazil. there has been opportunities in brazil.
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mexico, more recently, we're seeing more stable in terms of macro scenarios. latin america is growing -- not as fast as asia. intoitely coming out positive growth. david: talking about geopolitics, referring to russia. what about mexico -- the election and the potential president as well as nafta. does that make you nervous about mexico? lori: nafta is the wildcard. the rhetoric -- nafta has been more positive than one year ago. there seems to be other trade partners a bit more in the crosshairs. those dynamics playthose dynamiy day as you get there is factions, procreating more alliance -- strengthening the alliance -- and those that are more wary. lori, thankcia and you for being with us. great to have you.
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blackstone rates it in. money from investors. more on the record year of fundraising for pe firms on the wall street beat. you can turn on your radio and listen to tom keene and jonathan ferro from 7:00 to 9:00. bloomberg surveillance can be heard in new york, boston, the bay area, washington, dc all across the united states on sirius xm radio. this is bloomberg. ♪
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♪ alix: this is "bloomberg markets,", --
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kailey: coming up, the colombian finance minister live from the imf. ♪ david: angela merkel and emmanuel macron, you can see them, speaking in berlin on eu reforms and trade conflicts with the u.s. a week before they come to washington to talk to president trump about the trade. this is part of emmanuel macron's tour. he wants reforms and he wants angela merkel to be a partner in that. alix: interesting because he says we will continue to apply the iran agreement. there are questions. sanctions. will waive on may 12 and if they don't what
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happens to germany and france? if they don't comply what that does to iran sanctions if effectiveness? david: with the may 12 deadline coming up. there are a lot of questions, mr. bolton does not like iran. will they tighten up sanctions. ? will europe go along? if they don't it will not be affected. alix: especially when there are european countries in iran. blackstone reports, first quarter earnings beating estimates. more than $18 million in net inflows. you heard me right. the vix, wild swings in volatility prompt fresh claims the vix is rate. -- rigged. presidentank, a new of cerberus. david: ed, let's start with blackstone. earnings per share, beating estimates by a longshot. >> they are done phenomenally
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well. $.65 a share. they are more than $.10 above the highest estimate. they ramped up aum, staggeringly high. assets.lion of alix: i couldn't even get the number out. i messed it up three times. >> so huge. first results since they announced changes at the top -- changes at the top coming down the track. they continue to grow. continue to attract huge inflows. one thing is interesting -- we're not seen them showw up in megadeals we used to see. david: what direction mr. gray -- is it changing? is it too soon? >> i think it will be a continuation. it is been successful. i am sure gray will continue the
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trend. his background as real estate and he is turned blackstone into a real estate long firm. real estate was half of what it was doing. it will remain a core part of operations. it is quite difficult to imagine blackstone would get bigger on real estate. it is such a vast part of the business. alix: how can you continue to grow aum 22%? at some point that is not going to -- >> is a constant tension. how can you do these lean mean things? alix: the other top story -- this was amazing yesterday. it had the street talking. the second story has to do with the vix. there5 a.m. yesterday, was a sudden bed for extremely far side down options. the s&p would go to 2100.
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the vix would shoot up. by 9:30 a.m., early indications pointsnd 1750, up two but s&p futures did nothing. using derivatives to move the vix. >> potentially questionable behavior in the vix. they've come out and said there is nothing wrong and if there was they would identify a quickly. -- identify it weekly. 11 sent surge -- $.11 surge on a calm day out of the blue. 13,000 puts on the s&p 500. they replaced just before market open at 9:30 a.m. normally it never exceeds 75 daily volume. david: circumstantial evidence is overwhelming. it cannot be coincidence.
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then they say this is nonsense, there was an academic report saying someone is rigging the vix. >> this is not the first time. thereal problem for cbo, vix has become such an important part of foundations and so many things are used as a gauge of what people are feeling. rate -- youg to be have to change assumptions about all kinds of things. have people in their doing forensic work. alix: it does not mean it is rigged. it is such a fine line. trading commodities but moving commodities, stockpiles. i'm just saying, you should be able to play it. david: is that good news or bad news for cbo? it doesn't make the vix more reliable. >> they are playing by 11%. david: big play.
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let's turn to the third story. former coo of jpmorgan has a new job -- going to cerberus. >> potentially, a successor at deutsche bank -- did not get that seek. apparently because he wanted to stay in the u.s. cerberus had the position in deutsche bank already. reasonably large. he will have some relationship with deutsche despite not taking the top job. been outtop, he has there for a while since he left jpmorgan, and talked about the head of another firm. david: explain his job. co-ceo of those -- two ceo's. >> he is no longer working for jamie dimon and will do more deals.
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a, may be ceo different director, he has done hedge fund in, investment banking -- now he is in private equity. alix: did deutsche bank decide against them? >> he said he wanted to stay in the u.s. alix: yes. david: it looks like the deutsche bank job is a hard job. many thanks to add hammond. -- ed hammond. coming up, jeff bezos saying premium subscribers have top more than 100 million. alix: if you have a bloomberg terminal, check out tv . watch us online, click on graphics and interactive directly. check it out. this is bloomberg. ♪
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♪ david: i am watching amazon. jeff bezos has a note to shareholders. i read it. it is like taking a page from warren buffett. a lot of philosophy. who are we and where do we go? he revealed something important. exceeded post-launch, 100 million prime members globally. more than 5pping billion items worldwide and more new members joined time than any previous year." they keep adding members at a faster rate than before. alix: 5 billion was so striking. worldwide. if europe is going to be expansion for them, europe does not necessarily like our big tech companies. curb that? david: china, forget about it.
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they have alibaba. how do you keep going globally. europe has shown a surprising ability to deter. alix: margins below 2% since 2011. no one cares. a lot of large numbers come in and you can expand and margins begin to matter. david: not just to you sell to but where you get stuff. more than half their stuff is from third parties. alix: they have to pay third-party so less for them. coming up, kathy jones, will be joining us. we continue to monitor flattening yield curves and commodities. this is bloomberg. ♪ this wi-fi is fast.
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i know! i know! i know! i know! when did brian move back in? brian's back? he doesn't get my room. he's only going to be here for like a week. like a month, tops. oh boy. wi-fi fast enough for the whole family is
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simple, easy, awesome. in many cultures, young men would stay with their families until their 40's. ♪ alix: don't mess it up. imf upgrading global growth
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forecast, as long as trade is not derail. imf meetings kick off this morning. yield curve flattening, inverse, a slowdown on the horizon? commodities crushing. aluminum, nickel outshining precious metal. russian sanctions offering that. david: a view of washington for the capital. that is where the imf and world bank are having meetings. welcome to "bloomberg markets," i'm david westin here with alix steel. alix: tom keene works 97 hours straight and comes back and get sick. david: but he enjoys it. ushy, s&pity market, m futures down three points. euro-dollar flat. dollar mixed on the day. yen weaker on the dollar. mushy on currency. 33 basis points, the spread
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after touching 29 yesterday. europeanbd selloff in bond market. selloff in beefy european bond markets. outperformance continues. $70, calls for $3000 aluminum, what does that mean for global growth and inflation? conversations through the next hour. today, the:30 a.m. jobless claims. it is thursday. a.m.tine lagarde at 8:45 holding a conference in washington as part of the imf-world bank meetings. we hear from various members of the federal reserve including randy quarles. let's get an update on headlines outside the business world. we turn to kailey leinz. kailey: the trump administration pulling out another argument to support mike pompeo's nomination as secretary of state.
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senate democrats who failed to back him could undercut the proposed summit with north korea. mike pompeo made a secret visit to north korea to meet with kim. more fallout from the fatal accident at southwest. regulators will order inspections on engines. airlines will be told to conduct ultrasound inspections of fan blades when a certain number of takeoffs and landings. in the u k, a sign that prime minister theresa may faces challenges on brexit. the upper house of parliament has overwhelmingly defeated a key part of the policy. the loss could push the u.k. in staying with a customs union in the eu. the lords action is not binding but it is likely to end up in the commons. global news 24 hours a day on air and on tictoc and on twitter powered in 120 countries. this is bloomberg.
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alix: thanks. this will come as a big surprise but lyle brainard sounding dovish speaking to regulatory reform at the 2018 global finance forum in washington. warning about elevated risk in business leverage and asset cycles. cyclical pressures building after value is stretched. talking about financials and the offer. buffer,orts raising the and we are likely to see a reduction in that -- a stark difference from other areas of d.c. david: it strikes me how much he is talking regulatory. -- how much she is talking regulatory. easing off requirements for banks. randy quarles talking, that is his job. is the vice chair for regulation. she is not shy. she does not want to ease regulation anytime soon. alix: she doesn't want to raise
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rates. still seeing signs of imbalance. no big surprise. we will take a look at anything she says about the yield curve. david: let's talk about the yield curve. flattening for most of the last year with spread falling to levels not seen since before the crisis began. it has steepened today. we have a terminal chart. 5-30's,2-10's and coming down consistently. joining us now, kathy jones. >> david. david: tell us about the yield curve. we are hearing conflicting things from the fed. randy quarles saying, do not worry. molle james bullard saying, worried. 2.9%, 10 year yields
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.end to peak here we are. the 10 year close to 2.9% but they are still raising short rates. mechanics, flattening curve. the market doesn't see inflation on the horizon. they are looking at it as temporary and a coming down. david: does the ftse a potential recession? a do they -- does the fed see potential recession? they have to move up rates? >> they are boxed in. forward guidance, we are not going that far. on the other hand, they have to raise short-term rate to get ammunition particularly as they are unwinding balance sheets. alix: you raise the point of not seeing inflation and that is why the back end cannot raise. longer-term question -- crude versus 10-year breakevens what
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you could swap with aluminum or nickel -- overall commodities -- if inflation moves higher? -- three and a quarter, 3.5 or so. is it sustainable inflation? or is this a one-time thing because of chill tariffs. wholesale prices going up but can they pass? alix: there are companies that want to pass on price increases and they are starting to but they are also scared. then others say, do it. michael mckee at a q&a. that could be -- that is the future mechanism. >> if it works we get higher sustainable inflation. one-time commodity price shocks do not always end up sustainable inflation. sometimes they hurt margins. sometimes demand declines. david: pursue that.
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inflation well anchored. --t could slip the anchor commodity prices, shocks, wages? >> wages more likely. we start to see wages pick up saw that a big way and leading to more spending -- i'm old enough to remember real inflation cycles when people would buy things today because they will be more expensive next week. there is not that sense out there. it is not ingrained in people that the inflation prospects are that high on the horizon. alix: how do you play that? treasury shorts for the 10 year new record high. big-name investors continuing doubling down on short positions. what do you do? >> i would not be playing short treasury game. i don't see downside in yields here but i don't see outside
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either unless we start to see feed through in sustainable inflation. also, rates are higher than they are around the world. comparable government bond yields are so low, it is hard to stretch yields more from year unless we start to see europe, canada and everyone else to better. david: kathy jones of charles schwab, stay with us. breaking news. takata went through with the offer. rejected theirre , they will pounds 50 keep negotiating. they want to remain discipline with respect to terms. it sounds like shire might want eda may havend tak to be more disciplined. takeda trying to take over a
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much bigger company. there are questions about how they will finance it. the ceo has come to the united states this week to see if they could put together a deal. they made an offer. it is now been rejected. they will keep talking. alix: you point out the consolidation in that sector anyway. if it is not then it will be somebody else. a week goes by we do not have some consolidation of some form. clearly it is going to happen. alix: highlighting apple as well. out with a note, shares are down, off 1%. guidancerter revenue could miss estimates at the midpoint, limited upside to 2018 shipping estimates and valuation -- still continuing to see high end inventory trade through the quarter and still waiting for the upgrade activity to drive
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iphone x and iphone 8. checks indicate limited new features and product lineup inhibiting differentiation versus current lineup. iphones,verpopulate there is less of a distinction and less of a replacement cycle -- that is the whole point. a super cycle. david: such a profitable company. at the same time -- the story is what have you done lately? something besides an iphone? another arrow in the quiver? how are you going to make the iphone different? i like the iphone x. it was not revolutionary. alix: super weird. what are you doing? --id: the facial recognition you actually have to move. alix: totally freaked me out. leverage lending heating up. record high in 2017. more on the state of credit
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markets, $164 trillion of debt making the imf anxious. this is bloomberg. ♪
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♪ debto.o much 160 $4 trillion and imf warning that valuations of risky assets still stretched with credit cycle dynamics emerging reminiscent of precrisis. this makes market exposed to a sharp tightening. also watching for corporate bond spread. much demand for leverage loans from firms with low credit ratings. joining us now, randy schwimmer, churchill asset management, senior managing director.
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still with us, kathy jones. randy, you invest in private credit. where is the biggest leverage risk? randy: this is not unusual. 10th year of recovery, sounds like we are in store for another one or two years of solid earnings. it pays the government agencies, regulatory jurisdictions, rating agencies to be focused on what if. the difference between now and 10 years ago with the credit crisis was that the banks are in much better shape than they were. the amount of deals being underwritten and held right now is a fraction of what there were before. the megadeals. we are not seeing them anymore. $10 billion plus buyouts that 06 timeframent in ' are just not there. people are worried as we get to the end of stages of the cycle. the private credit side of
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things is more stable than the public markets in part because these are loans we manage at churchill do not trade. if they do, it is by appointment. there is not that kind of liquidity out there. they don't tend to flop around as the equity markets have. there has been appetite for leverage loans. you can see that in issuance. there is so much demand for clo's. there has been appetite for leverage loans. the conversation seems to be that there is inherent risk. you have not great credit borrowers issuing because they can and there is so much demand. >> that is the crux. the imf is getting at -- setting the stage for a problem down the road. and yieldsy shrinks, go higher if people pull those or if we hit a bump in the road in the economy we will see default and that will be a problem. david: randy, banks are in
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better shape than they were 10 years ago. there is also another difference. central banks have injected money into the marketplace globally and now we have the united states -- huge fiscal stimulus. there is more money. in my sprints, limited, people are going to make that borrowing decisions. how you protect against that? randy: one of the things we have done at churchill and private credit in general, focus on fundamentals of the companies we are lending to. the middle market has been sheltered from shocks going on systemically in terms of valuation, which you wrote about yesterday in a great piece -- the risky assets out there are more equity-based. on the credit side, we are basically traditional loans to company backed by private equity firms -- we are a principal and interest firm. that is it. typically these loans are
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yielding 7% for investors. there is no equity upside. there is limited downside. the kind of safety these loans provide -- because you are secured by assets of the business, top of the capital structure, unlike fixed income, and you have covenants, -- those businesses have bonds like covenants, our businesses are smaller. they do not have access to bond markets. you broughtad up covenant light. i was interested in the feedster between companies having debt in earnings. we have seen companies with high quality credit outperforming those that don't. if earnings roll over and growth slows, how quickly does that trickle? >> quickly. the market will anticipate this. no surprise we have got debt on the books and corporate leverages.
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no surprise that the public market has covenant light. you could probably see that trickle through quickly. alix: etf's. in the market in a way they have never been before and a lot of guys on wall street think that is the next biggest risk. etf's invested in junk bonds? >> i am not expert on etf structure. it is less about structure than the underlying issuance. if you're going to be cautious, you need to because just ahead of the turn. catching that will be tough. david: randy, private credit? randy: correct. david: you have to pay attention before you loan. if things go south, you cannot get out. what happens in a real downturn? dody: one of the things we is partner with private equity firms putting significant amounts of equity capital into businesses. we have been doing this for 15
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years. we have sponsors who we work with well. our incentives are aligned. when there is a problem at the company, they had capital to inject to help us out. we are at the top of the structure. we are most protected. we have our collateral. having that partnership with a sponsorship whose money is at stake is critical. david: randy schwimmer of churchill and kathy jones of charles schwab, thank you for being with us. coming up, aviation safety. the inspection into southwest continues. we discussed with jim hall. coming up next. this is bloomberg. ♪
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♪ david: if you fly commercial airliners, 737's, pay attention.
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the investigation into the engine failure on southwest flight 1380 continues with indicators pointing toward failure in the rotor blades. former chairman, thank you for joining us. you have seen the reports we have had, strike me as being specific about the possibility there was failure in the blade that broke in two places. does this narrowing down quickly? james: it is/ . the issue of uncontained engine failures pertaining to southwest airlines is going to be a continuing part of the investigation. david: there was another instance with a 737, same model, and 2016 -- there were no fatalities, they lost cabin pressure and had an emergency landing. didn't the manufacture recommend
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sonographic inspection? james: yes. the faa will undertake another inspection as a result of this event. david: what is the relationship with the ntsb and the faa? why didn't the faa adopt regulation requiring that before? james: that is a process. they are in charge of regulations -- the regulatory response, in regards to any ntsb event, accident investigation. david: from your knowledge, likelihood of using a sonogram that they would be able to identify fatigue within the blades? james: i would leave that to one metallurgists, as someone who provided oversight -- they are good at doing that.
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it is very hard to find. that is why think the continued experience of this event on one particular airline that has different operational use than other airlines is something that will have to be a focus of this investigation as well. whether there should be more frequency where you have the type of use that southwest does on engines. david: they had a visual inspection a few days before with this aircraft. the question was whether it was enough? james: correct. whether there needs to be new technology in terms of inspecting these blades because the whole structure of the engine is changing as they are creating engines with more thrust. david: is it specific to this engine?
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has there been similar problems to other engines? james: there have been other uncontained engine failures with other engines. this one is the one that was on --h aircrafts in the event the aircraft event that occurred in 2016. to anothers turn accident being investigated by ntsb. the tesla crash, the fatal crash in los angeles. what is their jurisdiction when it comes to automobile crashes? james: extensive. as in aviation. i was very disappointed to see tesla's reaction to the investigation. the reason aviation is so safe and people can get on commercial airlines with such insurance is the transparency of the investigations conducted by the ntsb and then the regulatory actions and safety actions of both the industry and the faa in
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regard to information. when a manufacturer like tesla tries to withhold information from the ntsb, investigation, that is a concern. david: all the more important we go to autonomous vehicles. jim hall, thank you so much. from coming up, we hear the colombian finance minister, joining francine lacqua in washington dc at the meetings today. the market, mushy. selloff in europe, commodities soaring, equities flat on the day. this is bloomberg. ♪ ♪
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♪ alix: this is bloomberg daybreak. i'm alix steel. arbitrator, do nothing with stocks. the real action is in the bond
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market over in europe. the selloff led by the u.k. in the u.s., we have a steeper curve. coming in at 33 basis points. commodities continue to soar higher. oil at $70. initial jobless claims dropping. all talks of the same story of a stronger jobless market. the philly fed business outlook jumped to 23, which was higher sequentially. the philly index, prices were higher in new orders came in weaker, but the employment index very strong. samentinues to be the story of a strong employment world. david: it is a strong and growing economy and inflation has not picked up. looks like we were as we were. alix: steady as she goes.
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[laughter] david: there you go. with the an update first word news. >> the u.s. and china appeared to be digging in on the long haul over trade, forming allies with the standoff from steel to semi conductors. the focus has shifted to washington in the semi annual meeting of the monetary fund. meanwhile, the u.s. and japan say they will engage in a new round of trade talks. they don't agree on what sort of deal they're aiming for. president trump and shinzo abe discuss trade at a news conference in florida. the president wants a two-way deal and abe says the transpacific partnership agreement is better for both countries. lawyers at the justice department are days away $6m approving sinclair's billion purchase of tribune according to the new york post. they said sinclair has agreed to sell many stations it will
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acquire. the federal communications commission us to reviewing the deal. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. alix: thank you. back on washington, apple was off almost 2%. analysts say that third crew revenue guidance could miss the endpoint. hello non-iphone cycles. futures in an new upcoming line. not good news for apple if this is right. alix: and analysts said in a note the other day that investors need to be propped -- prepped for disappointing results. volume is well understood by wall street, but the issue might not have that
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much of an effect on shares, but it is a continue cycle of the super -- upgrade. david: next november, -- i haven't heard about the new big thing they are bringing out. alix: they said, apple remains and it uninspired -- apple remains an uninspired investment for now. that sounds yucky. [laughter] david: now, we will turn to decatur. they said it rejected their offer. joining us is eric who leads a team covering consumer news in europe air air, this has been talked about a fair amount. sinclair did make an offer, but it has been rejected already. eric: they made an offer april 12 they said and up against an april 25 deadline from the takeover panel to declare their intentions, or walk away.
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so now, they have made an offer that was rejected. but the two sides are still talking. david: i know it says it is part cash and part stock. do we know which is which was some are? said 17 out of the 46 per share is in stock, so there is a big portion that would have to be financed by the banks. , this at the same time has been rejected, they said beingill talk about disciplined. are there any possible interests? eric: that has been a subject of speculation. the shyer share price rose again today. there is some speculation that we will see one of the other
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former giants coming out of the woodwork and launch a competing bid. alix: we also heard that mark is selling their over-the-counter units to procter & gamble. it is not the only one making a ton of deals. the generic drug business will be sold as well, and shire has agreed to sell its cancer units to a french company. can you walk us through the consolidation and the need for that in the drug space? eric: sure. as you said, there has been a flurry of activity in the sector really since early this year. it has been accelerating and we have had a $1 billion deal of day this week. all of these pharma companies are looking to optimize their portfolios. they are trying to get out of consumer health businesses. pfizer was unable to sell its consumer health business so far, but now merck has done so with a
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deal with png. that is something they are trying -- they're trying optimizer portfolios so they are stronger in research, in developing drugs that could be potential blockbusters, looking into areas like rare diseases, areas where the potential payoff is greater. , but also where they are more focused. that is what is driving a lot of this. and there are a lot of potential acquirers out there and a lot of things potentially for sale. that isnd the premium being offered on the offer rejected is quite substantial. is it research? are there particular drugs in the pipeline that cicada wants or needs? they are in between biotech and a former giant, but in an an easy area. for takeda, the appealing thing is a have to do something.
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they have had a lot of their drugs go off of patent protection in recent years. there are not a lot of growth prospects if they don't do anything. if they don't do anything big outside of their domestic market. that is why they are looking at candidates like shire. david: eric, thank you so much. really appreciate you being there from london. coming up, we will hear from a resale car dennis, the colombian -- we will hear from a reseal car dennis. -- we will hear from a reseal cardenas. tom keene will be there. bloomberg surveillance can be heard in boston, new york, and washington on sirius xm radio. ♪
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♪ >> coming up on bloomberg --kets, oil prices surging as opec and its allies discuss the crude bill. i want to bring in rob, a portfolio manager. $6ard his capital has billion of assets under management. the equities continue to underperform. ones will move higher as oil prices trade around $70? >> a lot of different equities. we think the energy midstream
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move higher. oil prices are up 15% this year. a disconnect really represent investors to pick up high-quality companies that , andte with central assets pay pretty strong dividend yields. if your expected return of 10%, that is a really great place to be. alix: public take for investors to buy in on this? what do they need to see that greater conviction that they collect they won't give burned like in 2016? rob: good question. the biggest thing is they need to see bigger commitment from opec that they will not return production to the market. that is what everybody is waiting for. i think you are seeing signs of that happening every, single day. we're seeing inventories fall, globally and in the u.s.. talkinghearing opec
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about a long-term alliance with russia where they would monitor and keep inventory levels lower for a longer period of time. that would reduce oil price volatility. oil price volatility is the key a tortoise to bring investors back to the energy sector because there is a lot a great things happening in the energy sector. alix: opec and its allies say they will see a balanced market in the second quarter, but then talking about extending the cuts into 2019. if we are balanced, we don't need the cuts. what you calln balanced. inventories have an elevated the last three or four years, so we will be back to inventory levels that were consistent with the last three or four years. that oro back beyond before that, inventory levels have been much lower historically, so what they will try to do is get back to a period of where it is a normal inventory level. the bottom line is this, opec wants and needs higher oil prices. we have been saying that at portis since the beginning. they like the fact they cut the
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production in saudi arabia by half a million barrels a day. but will revenue is up over $100 million a day. they are earning $100 million a day even though they cut production, which is fantastic. will produces want to keep that going. alix: with those cuts, you have brent --between -- and between wti and brent. how are you playing that? rob: that is important. that emphasizes the critical nature of energy infrastructure. that bottleneck, that differential is an opportunity , likepeline operators energy transfer product partners, all of those better building infrastructure and have
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existing infrastructure, and are building new infrastructure represents an opportunity for them. alix: thank you so much, rob. great to get your perspective. wti nears $70. tune in today 1:00 p.m. eastern so we will break down what it will take for investors to want to buy back in. we are also talking about lng. david: we will all be watching. the imf and world bank group's annual meetings are underway in washington. francine lacqua is there with the colombian finance minister, mauricio cardenas. francine: we are delighted to interview him. the colombian finance minister will give us the flavor of what will be talked about. mr. cardenas, thank you for joining us. a lot of the talk will be on trade-in tariffs. what does that mean for your
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region? but the longest-serving finance minister in your region, and do u.s.-chinahat the trade war will hurt the economy? mauricio: we are and we are concerned. there was a summit a week ago. leaders talked about this. this is a main concern for many reasons. one, the u.s. market. u.s. market is very important for many of our economies, including columbia. so, any recent tariffs in the u.s. will be discussed. also, the fact that there will be a trade war, and the response from other countries, will also mean protectionism in other parts of the world. where will this end? there will be more products coming into the market and lower prices. francine: do you think this will be a trade war, or is this just a president who wants a deal, or rattling the cage?
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we don't know where it is going to end. we don't know what the ramifications may be. it could be between the u.s. and china, but others may come in. the world economy will be affected because there will be more products that cannot enter the u.s. or chinese market that will end elsewhere, including in the economy. our producers are concerned. francine: commodity producers or coffee producers? mauricio: manufacturers, agricultural producers in general. because they are concerned. businesses, open markets are fundamental. by the way, columbia is an open economy as well. many products from china and the u.s. and in columbia -- it will be disruptive. francine: if you look at the , other countries are
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industries that would lose more if there is a trade war, and would anyone benefit from it? mauricio: no one is going to benefit from it. francine: there is not an industry that is exempt? you don't see any glimmer of hope for anyone? mauricio: no. it will be damaging for most of our producers. why? because they rely on the ability of selling their products globally and also because for them to have more products coming into the economy because other economies have been closed , it is something that will also be negative. francine: let's talk about colombia in your currency. it is a currency that a yeargthened the most this so far are at point does it become too strong? and at one point do you intervene? question that is one everyone is asking me these days. it is not only the currency that
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has appreciative the most, but it is the market with the highest yield for foreign investors. that is why we have been getting a lot of foreign capital. francine: you do something about it? the currency has appreciated 10% relative to the beginning of the year. with currency that depreciated for five years ago, so that currency is much more competitive than four or five years ago. the central bank board will meet next week. we will talk about this. , will wesarily intervene because we have to wait and see where this is going to. a lot of this is caused by high oil prices, so we will have to say, our high oil prices are something that will stay for a long time? or would they go back to the $65 range? that is a question still the needs to be answered. francine: ok, but if you model
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where it is, is there a threshold? is there a currency line? is there a pairing you target? mauricio: no, no, we have a flexible it strange rate that his death that has been very productive. have a flexible strength rate that has been very productive. i would not think about intervention at this point. we are helping some of the exporters that have been affected by the appreciation of the currency, like the coffee producers. we are helping with very specific interventions. francine: you said the central bank could talk about a 60 basis point cut. mauricio: we will see what happens, but the main message is there a space for the the posit rate. the economy needs some stimulus. we are going to grow 2.7% this year, which is better than last year, but still far from our potential. mauricio: we keep being promised
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3%. when will he be promised 3%? mauricio: it will be likely. the 3% growth, everyone is predicting that for next year. francine: does the central bank of a communication problem? mauricio: i don't think so. francine: the imf say one thing and then the investors are expecting it. mauricio: the one lesson that has been learned is that you cannot say in any communicate or press release is what you will do in the next meeting or so. things change. francine: but the fed guides them. mauricio: with the information we had today, this is what we think is going to happen, but never tie your hands. francine: do you think the price in the market is an effective
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tool cousin mark mauricio: no. i don't think the market is expecting something, you cannot do something different. one thing is the expectation. the way that economies are formed of the opinions of others. but the central bank has its own mandate and they have to decide. they don't have to basic decisions on what the market gains. growth, whenthe 3% will begin to see dividends? mauricio: is in some specific sectors like tourism. columbia is growing double the rate. the hotel occupancy rate is the highest in our history, so tourism is the first sector seeing the benefits. agriculture as well. growth had above average for the economy and never culture. we will start to see more into more of this.
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this is very important for us. investors are taking note of this and bring more capital to columbia, so it is good. francine: you have been a minister of finance for a long time, and our elections coming in columbia. what will you do after? mauricio: i should start thinking about that, but i don't have the time. i basically have to take a vacation and then see what is next. francine: public sector, private sector, the imf? mauricio: i am open. i am open. i am open to options. i like politics. it is the air i breathe. so we will see what happens. francine: i know you are an effective communicator. i got here at 2:00 a.m. last night. i flew on economy so i am tired. we call it intelligence
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austerity. you can preserve government expenditures in infrastructure and the social sectors. francine: minister, thank you for joining us, even after an economy flight that got here at 2:00 a.m., and is still with us at 8:00 a.m. alix: thank you so much. francine lacqua with the columbia finance meter -- minister. christine lagarde speaking at the imf. outlook and financial stability report. what i am watching is what is wall street is talking about, the manipulation of the vex as a saying that the gauge is rigged. turning us on the phone is a macro risk advisor. does this potential manipulation
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make investors not want to use the vix? >> i will not comment on whether it is manipulated or not. in terms of investors using the vix, it plays a role in that if you are thinking you are going to hold a vix feature option coming you have to consider this could swing one or two point in either direction of where was the night before, even without the market moving. it is something to consider something we tell people, you should trade out of these things to avoid any potential surprises. alix: the argument against manipulation is, this is a normal arbitrage, a be nine environment -- a benign environment. do you buy that argument? >> it is a reasonable argument. yesterday's sentiment was out of line. just to give you context, the butwas looking at 15ish,
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then basically the settlement was pushed up two points. i don't want to get too far into it, but essentially, some of started bidding for far down options in the s&p in that pushed the vix element up. intentional ors otherwise, that is something for someone else to decide, but it does seem weird that they would need to buy those options at that moment. david: whether it was manipulation are not, it is not good for the cboe to wonder about that. they want to make sure it is really legitimate. what could they do to make sure that no one is manipulated? >> the first thing to do is really, you know, look into it. the various claims going on, i am sure they will. but something that the europeans do is they take an average, and oft could maybe lesson some
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the concerns. there is some liquidity benefits you give up by doing that, but there are a number of ways they can look into the settlement process. alix: thank you so much. we really appreciated. great to get your perspective. you sent this to me last night and i said what is this? that does it for bloomberg daybreak: americas. i will be subbing in for jonathan ferro who is on a beach in columbia. what to make of the world bank warnings about global growth and potential debt issues. plus, those ranging that raging commodities. this is bloomberg. ♪ this is bloomberg. ♪
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♪ alix: from new york city, i'm alix steel. "theis the countdown to "the
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open." ♪ alix: coming up, the imf upgrading its global growth forecast, but warns inflation and trade could disrupt the current economic environment. trouble with the curve, threatened to not only flatten, but inferred. could a growth slowdown be on the horizon? and cold cash and hot commodities. nickel and aluminum outshine precious metals. is a sell thet bonds kind of story. a really mushy market overall. a mixed dollar all morning long. selloff in the bond market in europe. two. 90 is how we appear include continuing its rally up 1%. what it means for inflation and the equity markets? imf meetings in washington warning the


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