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tv   Bloomberg Markets European Open  Bloomberg  February 15, 2021 2:00am-4:00am EST

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annmarie: good morning. welcome to "bloomberg markets: european open." i am anna edwards alongside matt miller in berlin. matt: good morning. today, the markets say the only way is up. stocks rise as the vaccine rollout spurs hopes for a global recovery. wti rises amid a deep freeze in part of america. the u.s. market is closed today for president's day.
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the cash trade here is just one hour away. these are your top stories from the bloomberg terminal. global stocks start the week with a bang. the nikkei has 30,000 for the first time since 1990. u.s. and european futures are on the rise. bitcoins relentless rally stalls for a moment after widening wall street approval sends the cryptocurrency to new heights yesterday. it closed sunday around $50,000 for the first time ever. and the u.k. hits its 15 million vaccination target, a milestone that is set to increase pressure on boris to begin reopening the economy. now just one hour away from the start of cash equity trading in europe and let's take a look at futures this morning. first off, in europe here, pull out the euro stoxx 50 futures, gaining .6%. ftse futures up .8% and dax
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futures looking at almost .75 percent gain. we are only about 1.6 percent away from s&p 4000. you can see futures are up about .4%. u.s. stocks will not trade today . it is president's day, a holiday , and the stock market is closed. what do you see on the gmm? anna: without the u.s. today, you must keep that in mind and we are without some of the key components of the asian market that doesn't mean we have lost our momentum and optimism. that is not the case because we see the nikkei hitting 30,000 for the first time since 1990. futures point to the upside so there seems to be a lot of risk on mood out there for this monday morning. lots of markets are closed. china, hong kong also closed. we have regular trading in
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bitcoin and and oil. in terms of fx markets, the kiwi re-finding its feet after an initial wobble on the three-day lockdown in one of its cities. the dollar moving to the downside today, seems to be fairly broad trend. the pound hit 139 on the back of what we talked about an hour headlines around the vaccination story and keep an eye on oil prices, up by more than 2% on wti. a european stock futures are pointing to a positive open in the region as the vaccine rollout and slowing virus cases -- on the crypto front, that coin is falling after closing in on $50,000. exchanges in china and hong kong are also closed this monday. because these markets are closed does not mean there's not a lot to talk about with laura cooper, macro strategist. busy for a quiet day, isn't it?
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the reflation trade is back, front, and center for europe given a number of factors, not least of which, oil prices. laura: certainly is the case at the reflation trade is revising this morning so we have wti back above $60 a barrel and one of those key drivers is the fact that we are seeing price action on this recovery optimism around this ongoing fiscal stimulus as well as the vaccine rollouts. when you look at crude oil, there is this tight supply constraint factor as well and we are seeing the cold snap in the u.s. that is aggravating that side of the equation hand at this point, it remains to be seen. this is looking quite overbought at this point and signals are -- as much. this does prevent a risk this rally and it is something
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markets are going to watch, whether oil prices at these levels can be sustained. manus: is bitcoin looking overbought? it was back down about 3% and change last time i looked but yesterday, 49,700, seems like mainstream banks are getting ready to accept it. paul: -- laura: absolutely. when we look at it, the bitcoin bullish bandwagon is getting crowded as we are seeing the institutional investors pile in so last week, we saw bny mellon signal it's going to start holding some of these cryptocurrencies for its clients and we saw mastercard signaling it is likely to start transacting in cryptocurrencies and we had the news over the weekend that now, we have essentially morgan's family looking into the alternative asset as crypto coin so this does provide some impetus to sustaining the rally at this
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point. certainly, the risk going forward is as this becomes more mainstream, as it is seen as potentially more of an inflation hedge or alternative to currency debasement has far as fiat currencies, it could see governments begin to step in and know that there is a risky regulations or controls and that is something that could sap the potential bitcoin bubble at this point. it certainly does seem to be -- anna: interesting to think about what regulatory risks might hang the crypto world. on the subject of fiat currencies, the dollar is weaker today and perhaps that does go hand-in-hand with more of a risk-on vibe we are seeing across risk assets. goldman sachs talking ahead of the weekend about the weakness in the dollar they would anticipate and part of that being driven by the cyclical forces that they think will dominate. what is the latest thinking on the dollar? laura: we did see the dollar
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have a bounce earlier this month and i think we are starting to see that longer-term downtrend start to come back into play and that's because we are seeing markets 10 these narrative -- pen pen these narratives. the rising yield environment is starting to fade. we see real yields steadying in the u.s. and other yields, we are seeing this selloff in bonds across europe and the u.k., so that's kind of adding to the attractiveness. for more procyclical currencies and away from the dollar. if we look at what is happening in the u.s. with fiscal stimulus, we are seeing the deficit set to balloon on the back of this potential 1.9 trillion dollar package and that's certainly going to feed into the dollar and i think we are starting to see that play out so certainly, hard to see a near-term catalyst at this point unless we see that rising yield environment begin to overplay
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what is happening abroad in europe, for example. matt: we are only 66 points away from pushing through s&p 4000. it's definitely not going to happen today because, of course, the u.s. is closed for president's day, but how likely is it that we get through s&p 4000 and then what is the next stop? paul: -- laura: if we think about the momentum, it does suggest we are going to see an s&p 500 -- 4000 and higher. when you look at the narrative driving it, there is the fiscal stimulus is coming true. we are seeing the fed and other central banks embracing the potential for inflation in an economy that overheat so there is really no catalyst to the downside at this point. this is reflective of what we are seeing across markets, just a buy everything type of rally being supported by ample liquidity.
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it's hard to see what could stop this at this point. certainly with the sentimental factors in place, that's why we are seeing not just the s&p 500 touching record highs but the global market cap of stocks topped out at 110 trillion so you're clearly seeing this optimism across all assets. anna: thank, laura cooper. -- thank you, laura cooper. lots more to come on the program including more on the reflation trade plus we take a look at the success of the u.k.'s vaccine drive and discuss what the economy needs to do to recover. we have nigel wilson. we will talk to him about building back better. that's at 7:40 london time. this is bloomberg. ♪
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matt: welcome back to "bloomberg markets: european open." it is 10 minutes past 8:00 here in berlin, which makes it, i'm thinking about midnight in dallas, texas, just 11 minutes past midnight in dallas. right now, you can see the headline, on the bottom of your screen. spot electricity at texas's west hub surpasses the cap. cold temperatures have forced texans to use heating a lot more than usual and that has boosted demand for electricity exponentially, causing real problems across the lone star state so keep your eye on that as we start to see intermittent blackouts roll across the great state of texas. let's get the bloomberg first word news now. for that, we go to laura wright in london. laura: england has hit its
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milestone of immunizing the top four priority groups, including the over 70's by february 15. with 15 million vaccinations, the u.k. has given at least one shot to over 25% of the adult population. it and the pressure on boris johnson to begin reopening the economy. new zealand's summer of unrestricted movement and social interaction has come to an abrupt halt due to three new cases of covid-19 after an emergency cabinet meeting, the prime minister put the country's largest city into a snap three-day lockdown. she also reimposed social distancing for the rest of the country. former president donald trump has been acquitted on the impeachment charge of inciting insurrection. most senators voted against trump but fell short of the two thirds supermajority needed to convict. despite voting to acquit, mitch mcconnell described the former president as practically and
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morally responsible for the attack on the capital. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. matt, anna. anna: laura wright in london. for anybody watching in texas, it is 1:13 in the morning, not just after midnight, as matt suggested, in case that caught any confusion for anybody. matt: correcting my texas time hurts my american pride to some extent, but you are correct. anna: i'm sorry for that. let's get back to the markets. stocks extend their high. japan's nikkei hit 30,000 for the first time since 1990 on better than expected. we are joined by the senior portfolio manager at an asset management company. good morning to you. we have seen some volatility
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since the start of the year for sure in equities. any of the dips we have seen, have you treated them as buying opportunities or are you cautious at these levels? >> we are treating these as opportunities. our recovery will be positive from here on. it's more the pace of that recovery that is going to be not linear. any dip we are seeing, we think it's a good opportunity to build up our equity exposure. matt: what are your focuses in terms of, for example, industry groups p or what do you like right now? -- groups. what do you like right now? sibiana: the sectors that were in the eye of the storm when it comes to covid because of
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consumer discretionary and media. those are the sectors we think will be the next step when it comes to earnings for european stocks. anna: what kind of assumptions are you making? inflation is really going to be the center of things from here. other people saying paul volcker would laugh at our inflation fears. inflation is not what it once was. what are your expectations for how far we take this inflation narrative? sibiana: expectation is that inflation fears are probably what the market is thinking today but obviously, it will be very important for valuations the european side such as on the
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banks, for example. we actually see financials has been one of the sectors that has done better when it comes to earnings surprises on the european side. it's not important. manus: -- matt: where do you see the best recovery across europe? sibiana: we have seen those sectors that have -- in general, consumer discretionary. we are seeing the recovery of the consumer, the pent-up demand . the sector that will lead the next round of earnings upgrades. anna: what kind of guides are you looking at for overheating in this economy? you are using dips as a buying
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opportunity and you clearly see further value in stocks. we talked to a lot of our guests about whether they see any bubbles and whether there are any reasons to be cautious. what would you look for in terms of clues on that front? sibiana: earnings. when we saw the q4 earnings, we are over halfway through the earnings season and we are seeing that european corporate's are actually performing quite well so above expectations. we mentioned financials and sectors such as the commodities side when it comes to earnings expectations. earnings valuations, some people might say they are elevated. earnings are leading up to those expectations. what we are monitoring instead, those are going to be hit. there is a time, whether --
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where we are in the economic recovery so those earnings, season after season, they are leading up to the high expectations we are having in the market. anna: thank you very much. sibiana carretero stays with us actually on the program so don't go anywhere. thank you for your thoughts so far. coming up, we will get her thoughts on oil. oil rallying to a 13 month high. we will discuss that, next. this is bloomberg. ♪
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matt: welcome back to "bloomberg markets: european open." right now, we are 39 minutes away from the start of cash trading across europe. looking at some decent futures here as well as in the u.s., the
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u.s. is closed for presidents' day. nonetheless, gains on futures here. gains on futures in the u.s. as well as global stocks rally continues to roll around the world. oil is one piece of that. but commodity has rallied to a 13 month high on fears that excessively cold weather in texas may disrupt flows and highlights the fragility of global supplies amid sharp cutbacks by opec and its allies. joining us now is bloomberg's oil reporter, sharon cho. kids today probably think of the dakotas or canada when thinking about oil sources. people my age is still think of dallas and houston. how important a role does texas play in supplies? >> that's right.
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today, we are definitely seeing how important texas is to us because the freezing cold weather in texas is likely to disrupt crude oil flowing from the biggest shale patch in the u.s., and that's going to be adding to the cutback in global oil supplies that we are hearing a lot of these days and the arctic blast is gripping the central u.s. and texas. that set electricity prices soaring and traders are estimating that a few hundred thousand barrels a day of crude oil production is expected to be impacted by the shutdowns and the disrupt of oil transport and power outages we will be seeing at the moment. anna: thank you for everything. sharon cho, thank you for joining us. sibiana carretero is still with us. i noticed you like u.k. assets at this point and that could be free -- for a host of assets.
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i wonder if that is adding to your thinking around large caps in the u.k. sibiana: it's going to be a very important sector when it comes to the u.k. market. the names that we saw with the oecd inventory levels where they are, the base scenario is starting with opening q2. we see further support from here. it's another data point to further support markets and oil equities in general. matt: how important is the vaccine issue here? this is one area where boris johnson looks like a heck of a heck of a more serious professional than ursula von der leyen. sibiana: it is very important,
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the vaccine, when it comes to the pace of the economic recovery. we saw many bumps in the road when it comes to supply so the u.k. has been doing pretty well so far. we have gotten to see the economic recovery is not going to be a straight one. we saw yesterday how the oecd put out the economic forecast as well for europe and what the economy and the u.k. has done last year. even though the recovery in q4 was not as much as here, we -- the contraction was higher than in other countries, for example, in germany and the u.s. although mitt you can -- the economy can open faster than other places, we have to think that u.k. is coming from a lower place already so it needs to
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work a bit harder as well than other economies that did not do that last year. anna: just briefly, the reopening trade for the u.k. economy, when do you see that kicking in or have we missed some of that? sibiana: we open stocks well at the november rally and propel the u.k. and the market has been more -- the international cyclical stocks, you mentioned oil as well -- the majority of companies, more international companies, are benefiting from a global economic recovery. the leisure sectors in the hospital ability business. we see a good opportunity there. matt: thank you so much for
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joining us. pleasure having you on the program today. sibiana carretero, senior portfolio manager at an asset management company. coming up, we are going to talks backs after the former unicredit ceo plans to raise one for himself as well. this is bloomberg. ♪
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>> welcome back to the european market open, 30 minutes ahead of the session for this morning and a developing story, low temperatures in texas and other parts of the united states but texas in particular, the market focuses on energy prices. another red headline from the earlier one around electricity prices. rotating power outages are underway says a texas operator, giving a sense of what this is doing to the energy operations. the theory is some energy
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operations could be disrupted and that would mean wti up more than 2%, 60.69. it is presidents' day so no equity trading but oil prices are trading. in terms of the future picture for europe, we expect news to the upside following on from a strong session in the asian equity markets. let's move on to something else. sources tell bloomberg, the x credit suisse ceo plans to raise funds for an acquisition. he is the latest former top banker to take advantage of the trend for vehicles. joining us to discuss is dani burger. what is driving this boom in spac's? dani: the environment is extremely ripe to go public in general. we've seen ipo's do extremely well, but there is the costs that come along with an ipo so
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the idea of a spac, allowing a company to go public and skipping that process is very attractive. on the others, you have former dealmakers who want to get involved in private equity like companies and private equity like deals and this is a way to do it without having to raise a lot of funds. that process has come alone -- under a lot of criticism, we've seen equity say this isn't really smart when you get sponsors who aren't necessarily coming from the private equity world we ate a celebrity or hedge fund. they are a private equity firm based in france and we see other firms raising spac's because there is so much demand and people will give them money but again, the criticism comes if you list a spac, you don't say what you are going to acquire. there is risk for the investor and you have to trust the sponsors of the spac. matt: are we going to see more
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spac's in europe now, since we've seen so many in the u.s. already? >> i think europe is playing catch-up. private equity in general and dealmaking has been big in europe so far at the start of the year and on the other hand, you have people figuring out how to do's backs in europe because you can't list them in london. there are technical boundaries to having a spac in london. you need to suspend the shares while you are acquiring a new company. it wouldn't make for a good spac if you can't have the shares listed. his spac, for one example, is going to be listing in amsterdam. eve seen other europeans list, but this trend is starting to pick up. whether we see it and london, that will require some regulatory change before we see that. >> lots to talk about when it comes to spac's these days.
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dani burger with the news flow and we will be speaking to jean pierre at 9:30 on bloomberg television. let's get a business flash. here is laura wright. laura: dubai international airport saw a 70% slump in traffic last year as the pandemic slammed to the travel industry. despite the drop, ceos saying it sees it as the busiest international travel hub as the industry recovers. >> it depends on the rates of vaccination globally. we've seen very good progress in the uae, second only to israel in terms of vaccines per capita. the u.k. is in third place and once the rest of the world, saudi is 2% of the total population, gets toward a meaningful figure, traffic will recover on the back of that news. laura: a resort ceo has
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resigned, bowing to pressure after a scathing report from regulators. it found the australian casino operator had facilitated mongering -- money laundering and wasn't fit to hold a license in sydney. he recommended an overhaul of management and structure. that is your bloomberg business flash. matt: laura wright in london. coming up, leveling up. we speak to legal and general's ceo about ensuring the u.k.'s economic rebound doesn't exacerbate inequality in the country. this is bloomberg. ♪ ♪
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anna: welcome back to the market open. we are 23 minutes from the start of cash equity trading, european
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futures pointing to the upside. we are without the u.s. come about china -- u.s., without china but hong kong going strong in the asian session. laura: bitcoin is paring gains after this weekend's rally took it to a new record high of almost $50,000. it comes as the world of financial services seems to be embracing the cryptocurrency with a unit of morgan stanley considering making a bet on the digital coin. canada has approved the north first american bitcoin etf. japan's economy has asda double-digit growth, finishing in better shape than expected. gdp for the first three months in september grew 12.7%. this points to recovery. the u.k. is stepping up efforts to encourage investment in renewable energy and sustainable agriculture. the government is launching green finance hubs in london and leeds that will start working
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in the mission is to provide april. data and analytics to financial institutions to support investment decisions. global news, 24 hours a day on air and on bloomberg quicktake powered by 2700 journalists and analysts in more than 120 countries. this is bloomberg. matt, anna? anna: laura wright in london. plans to reopen the u.k. economy harold promise but research from the investment manager legal and general show the nation could be on a path to ak shaped recovery -- a k-shaped recovery with some bouncing back more than others. we are joined by the ceo of legal and general. this is going to be an ongoing activity to ss the rebalancing of the ua kate -- u.k. economy and i suppose what you are tracking is the facts around that and people's perception of it. what is your initial response to
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people who don't think the u.k. is being invested in thoroughly enough in certain regions? nigel: i think there was nothing unexpected. there were nuances around the report that were very interesting. there's pretty much universal across the u.k. that people want to see 5g a priority. there were big differences between the future prospects of the quality of life and the k- shaped recovery, which the u.s. is having as well. the data that is coming out, the data we are seeing over here, there seems to be a vaccination impact as well because, although it was a huge number in one sense, 20%, which was less than we were expecting. that reflects the fact u.k. government is doing a really good job on vaccinating.
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anna: that certainly has been something of a bright spot. when it comes to investing in the u.k. and agenda and the u.s. government talks about, you mentioned -- is it about big infrastructure projects, high street? what is it people want to see when they think about leveling up? nigel: i think it is interesting that we all agree leveling up is a great idea and building back better is a grand idea, responding to climate change is a great idea. we haven't got enough plans. the thing that came through all of our work is there isn't enough concrete plans. the outcomes we are seeing right now that people can evidence and leveling up is happening, building back better is really happening. this is really just kicking the ball under the pitch. we do this over a number of years and get a lot more data on what is going on, and sentiment
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and perceptions of what is happening in their respective areas. we've been investing in the big cities across the u.k., edinburgh, glasgow, leeds, oxford, cambridge, etc. that, we think, is a relatively easy job, but actually, what really comes in through the data is there is a north-south divide occurring. people's prospects, opportunities are very much better in the south of england right now than the north of england and therefore, leveling up is becoming an even more important item than we thought it was maybe six months ago. matt: nigel, i think the vaccine procurement and rollout development -- development, procurement, and rollout has been an example of things britain can do better than europe.
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i'm wondering now that you are broken away in terms of regulation, do you think the financial industry can actually benefit from a regulatory diversions, or do you believe the doomsayers who say the city of london is going to lose its relevance? nigel: no, we are optimistic. the world is awash in money. the u.k. has huge assets in pension schemes. there is a lot of -- in the past 12 months. how do we redirect that money into productive investments? we have to make a really big effort around climate initiatives across the u.k. as you point out, we've done a brilliant job in vaccinating, leading the way in developing growth.
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this should fuel our confidence in doing these other areas, tackling the need for more easy vehicle production in the u.k., developing our life-sciences businesses. actually, we can't just do that in the london triangle. we have to have that fairly distributed across the u.k. and getting lots of these enthusiastic local politicians and business leaders, helping them on that journey to providing capital that allows them to grow and them to reskill their people in these regions. anna: on the subject of briggs it and -- brexit, we are looking for the memorandum of understanding to be signed. i know you are focused on moving on, but is there anything you are waiting for in terms of equivalence or diversions from the memorandum, the relationship
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across the channel? nigel: yes, we are all hoping we keep equivalence because a lot of u.k. firms depend on that. regulation, can be turned better to the u.k. to encourage more investment into the u.k., a wider variety of asset classes that we have been allowed to in the past. we think we will see more pension reform in britain, which will free up trustees and allow them to invest in a wider array of assets because as we talked about earlier, there are these new wonderful opportunities coming our way. we have to make sure that we have the flexibility in our investments and the things we are allowed to invest in to create this build back better and leveling up we so desperately need in the u.k. matt: i want to ask about l&g's
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insurance business, mostly concerned with life rather than general insurance and we've heard about how covid, the lockdown has affected travel insurance. what has been the effect of life? -- on life, not our daily life, but life insurance in terms of your business in terms of the coronavirus lockdown? nigel: we've actually seen more volume in 2020 then we had, and more people got themselves insured. the pandemic had a much bigger impact on all the people who are typically not the life insurance customers. therefore, we didn't see a large negative impact on our business at all from -- and the u.k. from deaths.
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however, it was heavily skewed toward the older people in our economy rather than our typical life insurance customer, so we've had quite a good pandemic but we are looking forward to building on the positive impacts of the vaccine across britain and capturing the goodwill and enthusiasm we have at the moment and building on that to invest in more things going forward. anna: a little bit, thinking of building on things that are topical at this point, bitcoin seems to be rallying. i know that you expect enthusiasm from block pain -- blockchain technologies. how does someone with so much money to manage, how do you look at bitcoin at this point?
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nigel: we are still cautious about bitcoin. tend to not invest in holly -- highly volatile assets. we have to take the view we are investing for the long term. we tend to invest in real, physical assets and that is really what we see as our competitive advantage. we don't see us having skills in forecasting or investing in bitcoin. we do feel, however, it will play a much bigger role going forward and we can see that in the announcements in canada or the u.k. or firms investing in bitcoin. there is certainly more development. matt: great to hear from you, nigel, on so many topics. love having you on the program. nigel wilson, the ceo of legal & general talking to us about a
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number of things from the vaccines to digital currency and the blockchain technology on which it is based. let's keep it on the u.k. right now. it has had prime minister boris johnson's target of vaccinating the top four priority groups, reaching 15 million covid-19 shots by february 15th. joining us now to talk about the success is bloomberg's joe mays. what are the next steps? now that they have achieved this, which from my point of view in berlin looks like an incredible success, what is next? joe: now we keep going down the age groups effectively, which comes to more vaccinations and more shots. there is pressure to talk about lifting restrictions. indeed, there is a bloc within his party saying all restrictions should be lifted by april. really, the conversation is
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coming to when do we get back to normal? the economy needs to open up, conservative mps, we will wait and see. anna: how much pressure is he under from this -- these voices within his own party? he has a very big majority in parliament, so maybe the pressure not from the opposition at this point but within his party. had a conversation with a professor from israel last week who was talking about the cautious nature of that reopening. i guess that are is some president -- president. -- precedent. joe: johnson, if anything, the tone has been quite cau tious and they want to avoid going too far and go back into lockdown again. that would be catastrophic so they look to schools reopening first on march 8 and gradually, things opening up again, outdoor exercise, that being liberalized
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more, per herbs -- perhaps outdoor sport. the noise in the background thing from mps. anna: what does the timetable look like? you mentioned data around schools. february 22, is that when we will hear about some plan forward? joe: that's boris johnson's plan for a roadmap. february 15, now february 22. things like when groups will be vaccinated, things will start reopening. it seems the government is still not sure it will go. reports over the weekend in the papers that could be may things start opening or august. they will keep watching the data, keep watching the death rates and that will inform decision-making. matt: thanks so much. bloomberg news reporter joe mayes, talking about the u.k.'s
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relative speed rolling out the vaccine. coming up, stocks to watch including european oil majors such as shell is the price of crude oil rallies. this is bloomberg. ♪
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matt: welcome back to "bloomberg markets: the european open." we are about five minutes from the start of cash trading and we are looking at pretty strong gains in futures, almost 1% now on ftse futures. let's get to dani burger with your stocks to watch and oil will play a role today. dani: absolutely, a breaking story we've been covering this morning but look for the oil majors like shell, vp to rally -- bp to rally with crude moving higher. the arctic chill in texas shutting down operations, a few
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hundred thousand barrels a day of output might be affected. that is the number bloomberg is hearing and there are the rotating power outages. look for oil majors to rally. we have other dealnews. the purchase of a chemical maker that makes things for food, makeup, that sort of thing but it allows the company to expand further into north america. the enterprise value is $1.1 billion. analysts have been mostly positive. commerzbank said it is a strategic fit, a good size, and a good price. we do see their share price tends to weaken so that might be the effect today. vivendi, looking at spinning off their universal music group. anna: dani burger with some of the stocks we are watching this morning. thanks for that. coming up, the market open. futures, pointing to the upside. we are without the u.s. today, president's day. we might be out -- without some
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of the volume early on through the day. through the asian session, the japanese market has hit new levels, a high since 1990 at least. 30,000 for the first time on the nikkei since that period. other market closures in asia, though. this is bloomberg. ♪ rg. ♪
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anna: welcome back to the european market open. in minute to go until the start of trading. global stocks start the week with a bang. u.s. and european futures point higher. bitcoins rally sends the cryptocurrency to new heights. just missing hitting $50,000 for the first time. and the u.k. hits a milestone setting increased pressure on boris johnson to begin reopening the economy. matt: let's take a look at
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futures. a few seconds to go until the start of cash trade. we are indicating that it could be a risk on monday. lighter volume's because the u.s. -- lighter volumes because the u.s. is closed for president's day. as a result, volumes will be lower. you could have some bigger swings. here is the global macro movers board and the far left hand column is the equity indexes. you can see that spain and the ftse are already open. the ibex in madrid is up 1%. the ftse is up 0.5%. i had thought the u.k. would do better than continental indexes because the u.k. has done better than the continental in terms of vaccinations. the iberian peninsula though is
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outperforming the island nation right now. the cac and the dax should open as well as well as the aex in amsterdam. expect them to open higher. should i just keep talking until they open? let's go straight to the guest. european equities opening higher as the vaccinations rollout. on the crypto front, bitcoin is taking a little bit of a pause after closing in on $50,000 yesterday. the u.s. markets are shut as people prepare for the enormous president's day celebrations. joining us now is raffaella tenconi, 88 economics chief and
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founder. -- ada economics chief and founder. as you look at cases decline and the vaccination rollout turbocharged in the u.s. and the u.k., are you more optimistic than you were before? raffaella: hello and good morning. i would not say i am more optimistic than recently. i think the u.k. has done splendidly well and i also think you begin to see the policy adjustments that will pave the way for the long-term poster brexit growth -- post-brexit growth strategy. there are still the challenges of the relocation and the financial services. the consensus expectation of u.k. growth are slightly too
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high. in the u.s., things are unfolding as we expected. massive fiscal stimulus. clearly favorite. the situation there is definitely rosy. where i think the biggest downside is in the eurozone where vaccinations are lagging behind. there are profound challenges on the continent. my view is we are at least one percentage point to hike in eurozone growth. anna: good morning. the ftse midi up 0.8%. draghi in italy, the new prime minister there. interesting to see those markets outperform today. keeping those in mind. we will come back to the european story specifically in a moment. let me get your thoughts on
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reflation. oil prices also going higher today. energy-related stocks going higher today. wti per barrel going up 2%. i wonder how much the oil price is influencing your thinking. raffaella: reflation is an interesting topic. near-term, we will see reflation rates jumping up until the may data driven by commodities. oil prices pass through immediately. reflation and general inflation because the labor market is generally favorable notwithstanding covid. at this stage, it is definitely a cyclical story. we believe reflation will take a bit of a step back.
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the labor market is polarized. we have seen a lot of job creation in the high wage segment but job destruction in the lower education segments. high reflation for more than a few months will weigh on consumption. we think the reflation trade from a long-term perspective and this means that not only over time you will see housing inflation, commodities inflation, but you will also see a change in the structure and the stickiness of reflation in the coming years. we think that part of the story is significantly under looked. and the one that will create the biggest pricing changes in credit, specifically southern credit in coming years. matt: what kind of divergence do
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you expect to see between the southern economies and germany, france, the netherlands? will we see a big spread? raffaella: well, yes, for example, if you take italy which in the near term is clearly favored because of the draghi story. italian potential growth is de facto negative. if we put in reasonable growth assumption, our fair value goes all the way to 2% in 12-15 months' time. that may be an exaggeration but it is an honest indicator of how bad the credit spread can turn out to be if the ecb is
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slightly setback. anna: we will pick up exactly there in a moment. raffaella tenconi. she will stay with us. we will get to some of the european politics next. draghi calls for unity in italy after officially becoming prime minister. we discuss the cabinet picks and the economy that he inherits next. this is bloomberg. ♪ when you switch to xfinity mobile, you're choosing to get connected to the most reliable network nationwide, now with 5g included. discover how to save up to $300 a year with shared data starting at $15 a month, or get the lowest price for one line of unlimited. come into your local xfinity store to make the most of your mobile experience. you can shop the latest phones, bring your own device, or trade in for extra savings.
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matt: welcome back to bloomberg markets. this is the european open. just kicking off the monday session. looking at gains across the board. the ftse up 0.8%. let's head the bloomberg best let's get the bloomberg business flash. laura: australia says google and face back are nearing deals to pay domestic media companies. great progress was made. both firms opposing legislation forcing them to pay media firms. crown resorts ceo ken barton
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resigns after a scathing report from regulators which found the operator had facilitated money laundering and was not fit to hold a license in sydney. former unicredit boss will raise money for a blank check company. the company will invest in financial services. jp morgan is said to be advising on the venture. we will be speaking to him later this morning. that is your bloomberg business flash. anna: laura writes in london. the former european central bank president, mario draghi has stressed the need for unity after being sworn in as italy's new prime minister. he has unveiled the names of ministers joining his government
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including daniella franco as finance minister. raffaella tenconi is still with us. i wonder if you think mario draghi can bring a whatever it takes moment to italian politics. what would that look like? raffaella: to some extent he has done that already. if you look at his cabinet, he has mixed technocrats and politicians of the other major parties which is unheard of before. he has really created the conditions are different parties to try to give their best. the electorate is going to look at the next year and what each one has managed to receive in what are not ideal financial conditions. in some respect, he has already delivered a small miracle. the harder part is ahead.
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delivering genuine policy cooperation and implementation to turn around the growth of the economy is a very difficult task. matt: financial market seem to have confidence mario draghi can do anything. this is a man that could kill two stones with one bird. but can he bring some kind of consistency to italian politics? is it possible that mario draghi can bring some kind of long-term success to rome? raffaella: i think it depends on what he really wants to do. to some extent, he has created a cabinet that is very robust to political bickering. bear in mind that we are already seeing parties unhappy with their ministers' allocations.
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in parliament coming he has such strong support that -- in parliament, he can stay as long as he want because of his strong support. will he want to stick around? policy implementation in italy and easily take three years. between thinking about it and hitting the private sector. , instead we are -- instead, we are talking about a draghi government of maybe one or two years. to some extent, he is already at the peak of his reputation. he saved the euro once. he may want to go into the presidency position next year and retire. in which case, he would've helped the economy a little bit but not enough to change the fundamental direction which is really getting poorer for a lot of people. anna: when you think about the
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comparison between the uk's rollout of the vaccine and what we are seeing from the european commission, how is that going to influence politics in europe? by the time we see the big electoral tests, germany and france, will that be forgotten or will there be a real focus on the underperformance in terms of the early feed from the commission? and how will that play out for the european dialogue? raffaella: i think, yes, definitely, the speed of the rollout is going the way of the electorate. we are conducting some advisory surveys. i can give you a glimpse. we are pulling people in italy, france, and germany simultaneously asking them how they assess the covid crisis in relation to their own government and the eu. there is real disillusionment
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and disappointment even at the level of information distribution on covid and a lot of disappointment in france for example on how the vaccine story is playing out. what does this mean? it means that even in countries where there is a lot of eu affection like in germany, we begin to see that eroded. i begin to see the early signs that i saw in the u.k. before the brexit debate. people say the eu project is great but it is really not effective and it is associated with a role of regulation and little economic upside. in the near term, this creates some potential for parties that are somewhat away from the mainstream. but, perhaps, you see some
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distrust in bitcoin. a lot of people, not just institutions, but the average person is looking at all of this liquidity. it does not see any policy debate that is satisfactory to them on the long-term consequences of this and the epidemic. therefore, they try to look at the reflation trade and bitcoin has been a great trade for many people. the risk is that there is distrust in the information and in the institutions. and that, in my view, will be associated with higher inflation and higher credit costs in the long-term. matt: speaking of bitcoin, it is been an incredible trade for anyone that bought it before last week. there were people that did not trust it at $1000,
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or $20,000, and $50,000. how do you think that changes? we are starting to see major institutions finally start to defrost a little when it comes to crypto. raffaella: well, we are a macro research company. we think of bitcoin -- we created a model that mimics what we use for stock markets and currencies. it is from top-down rather than bottom-up. that model suggests bitcoin can double in value and maybe even triple in the next three years. the reason why it is doing that is certainly driven by the liquidity of the central bank. together with the healing of the economy. now, of course, to some extent, this kind of valuation is insane.
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there are clear technological limits in bitcoin. however, the fact is reflecting that we live in a world where the sovereign bond yields are moving into negative territory. and, i think it captures this mistrust in mainstream currencies, for example. mainstream assets. a disaffection for what is perceived to be the central banks' video. anna: thank you for putting the bitcoin trade in a big picture narrative. good to speak to you. raffaella tenconi. she will continue her conversation with matt and i on bloomberg radio at 9:00 a.m. u.k. time. bitcoin -- we will dip into this world again. it slipped a little this morning. will the wall street approval send it to new heights?
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we will talk about bitcoin next. this is bloomberg. ♪
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matt: welcome back to bloomberg markets. this is the european open. we are 22 minutes into the session and looking at gains across the board. the u.k., much like the vaccine
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rollout, doing better than the rest of europe right now. more than double the gains. the dax, up about 0.3%. let's get back to the bitcoin story. the cryptocurrency closing in on $50,000. it went to almost 49,000 -- 49,700 dollars after receiving more backing and potential backing from the finance industry. let's get to eddie van der walt. my concern about biting millions of -- buying millions of dollars in bitcoin. i would be more comfortable if i could do that with my brokers at
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goldman sachs or morgan stanley. is that kind of move going to make it easier for boomers like me to get in on the crypto rash? -- crypto rush? eddie: i completely agree. [laughter] these days -- and you know what? for a lot of people, crypto did go to zero because their exchange got hacked and they lost their money. but today, custody is so much clearer. you can purchase by paypal or by your broker or on the futures market. there are realistic ways for people to get in on this trade and that is what has caused this last leg up. anna: are we any closer to working out why it is worth what it is worth today? you might have a vague idea of
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what it may be worth in the future. eddie: i agree. i was listening to raffaella tenconi saying double or triple going forward which is quite modest when you think about the fact that it has risen 10 times since last march. it was trading around $5,000 in march. this is an explosive trait. the fact that it has gone up as much --are we approaching the top of this particular rally? matt: why do we not see something like gold following in its footsteps? for all the reasons i want to buy bitcoin, i also want to put some krugerand under my bed. eddie: that is absolutely spot on, the question. the thing with gold is it is in
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mature markets. it is an inflation hedge. bitcoin is a batch. the uncertainty built into that is what gives you the additional upside. even -- if it even becomes gold, it will have to trade at a far higher price value than it is now. it is that uncertainty that gives you that additional growth. anna: really interesting. gold is the inflation hedge and bitcoin is a bet on it becoming an inflation hedge. i still cannot wear it. eddie van der walt from the markets live team. vivendi rising 23% in trading. considering an ipo in 2021 so the shares surging as the market
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thinks about a pont spin off th mario draghi, what does the appointment of the man credited with saving the euro for the eu mean? we discuss that next. this is bloomberg. ♪
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matt: welcome back to bloomberg markets. this is the european open. 30 minutes into the session. the ftse up almost 14%. euros 600 is -- euro stoxx 600. if you look in terms of the group ranked returns, grr go is a command you can use for any of the broader indexes on the bloomberg, terminal almost all
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industry groups are rising. basic resources and energy are close behind as the price of oil rises in the defensive groups are losers. the only losers are health care, personal consumer drugs, and grocery stores. one of my favorite groups. and real estate. all down. not losing any real size compared to the gains we are seeing in media. let's get the bloomberg first word news. laura: new zealand social interaction has come to an abrupt halt. after an emergency cabinet meeting, the prime minister put the countries largest city, auckland into a three-day lockdown. she also reimposed social distancing for the rest of the country. england hit a milestone in
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vaccinations. with 15 million vaccinations. the u.k. has given at least one shot to over 25% of the adult population adding pressure to boris johnson to begin reopening the economy. the u.k. is stepping up its efforts to continue investment in renewable energy and sustainable agriculture. it is launching a green finance hub in london to provide data and analytics to financial institutions to support that investment decision. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. anna: thank you very much. the former european central bank president mario draghi has stressed the need for unity after being sworn in as italy's prime minister. weeks of political gridlock.
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avoiding an election during the pandemic. he has unveiled the names of cabinet ministers. let's get to bloomberg's maria tadeo who is standing by with a guest. maria: let's continue to talk about italy. we are joined by carlo cottarelli. he is at universita cattolica del sacro cuore and is joining us from milan. when you look at the government that mario draghi has put forward, it is a hybrid. will it work? carlo: yes, draghi has a lot of support. he is very popular in italy at the moment. inevitably, this may not the government of the best but it is
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probably the best government you will get at the moment. maria: when you look at the finance minister who is joining from the central bank, she has a lot of experience. is that a name that you think is a good name? carlo: yes. she is probably the most experienced when it comes to public finances in italy. he has been working on fiscal issues for forever. he became the chief accountant. and he has always been involved in fiscal policy for italy. maria: when you look at the reaction from the market, we see that the market is excited about this idea of whatever it takes.
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ken draghi do whatever -- can draghi do whatever it takes in italy? carlo: there are many important things that this government can do. there are things that are difficult to do. tax reform, for example. there is nothing more political than tax reform. i believe there are important things that the government can do and the priorities are to fight covid. maria: you make a good point. when you look at the policy agenda, is he going to focus on national reform or is this more about the money coming from europe and to make sure that
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they use the money well? carlo: they go together. national reform will be part of the economy plan. governor already presented a plan. everyone seems to agree. the current government will have to be full of reforms that will have to last. this is an important consideration. it is important to have reforms that will last for a number of years. we don't want the next government to undo what is being done by the current government. maria: with mario draghi back in government, there is the idea
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that this risk is going away? carlo: the interest rate speaks for itself. we will start growing by 2%. that growth rate, with that growth rate, the gdp will go up. that will bring down the public debt. by the end of this year, 28% of the italian government debt will be held by european institutions. it would be different if this was held by financial markets. less risk. maria: how much would you worry
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about the debt? after the coronavirus, we are talking about 150% of gdp. carlo: i am not concerned in the short run. in the short run, there is a lot of liquidity. over the near-term, it depends. we have to revise the growth process. maria: how could you do that? the perennial question. what does italy need in the short-term to start growing? carlo: the government can grow its physical capital.
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in the short run, the most important thing is physical capital. we need investment. the most important thing is to create an environment or climate in which entrepreneurs are happier than they were in the past. that requires a change in the system. if we can manage a lower tax rate, that would also help. over the medium term -- education is the most important thing for the long-term growth. maria: when you look at italian banks, what does mario draghi mean for them? they had been under a lot of pressure but now they are rallying. what does it mean for the financial system? carlo: the main issues -- the
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main issue is growth. it is not huge. less than 20%. we need a recovery. maria: thank you for joining us today on bloomberg. we appreciate your time. that is it for the brussels edition. matt: maria, i will pick it up. maria tadeo from brussels with carlo cottarelli. from universita cattolica del sacro cuore. my italian pronunciation is not quite as good as tadeo's.
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widening wall street approval sense of the cryptocurrency to a new high. the headline is -- this digital currency which 10 years ago was going for like $500 is now trading at $50,000 apiece. this is bloomberg. ♪
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anna: welcome back to the
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european market open. 43 minutes into the session. we are without the u.s., china, and hong kong. the ftse 100 up by more than 1%. oil prices raising oil related assets. let's get a bloomberg business flash. laura: more negative news on the travel front. dubai international airport saw a 70% slump in traffic last year. despite the drop, the airport ceo things it can maintain its crown as the industry begins to recover. >> it depends on the rates of vaccinations globally. as you have reported, we have seen good progress in the uae second only to israel in terms of vaccines per capita.
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once the rest of the world, which sadly is under 2% in total population, it gets towards a meaningful figure come i think traffic will recover on the back of that news. laura: the former unicredit boss will raise money for a blank check company. bloomberg sources say he will work with a former bank of america executive and the company will invest in financial services. jp morgan is said to be advising. that is your bloomberg business flash. matt: thank you very much. laura wright in london. social capital founder and ceo -- sometimes, you know, we write out people's names in phonetic in the prompter which i cannot read at all or even began. he is known for being a
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disruptive force in silicon valley. recently come at he has been making headlines as the superhero for the robin hood crowd on reddit. in a bloomberg front-row interview, he shared his views on bitcoin. ♪ >> well, i cannot take all the credit. we have a group chat. talking about random things for the summer. with hopes that the pandemic eases. one of my friends was talking and it sets off a light bulb. it is very tongue in cheek. i did another one that said when bitcoin gets to $100,000, i'm
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going to buy goldman sachs and rename it. i am enjoying the ride. >> i admire you for not taking yourself too seriously. the bitcoin thing, however, is very serious. north of $40,000. you cannot purchase goldman sachs yet. >> can i tell you something about bitcoin which is very important? it shows the fragility of their traditional financial infrastructure. if you look at the quantity and the size -- the real question people should be asking is -- bitcoin becomes the de facto currency that displaces gold. what replaces the u.s. dollar?
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bear with me. it is not bitcoin. what does that mean? there are companies around the world that are replacing one of fixed u.s. dollar with one digital token of a u.s. dollar and by simply making that small move, they can completely rebuild financial systems. asset management. banking and payment processing. there is a revolution happening. it is not felt as much in the united states. the financial services infrastructure is so robust. if you look at the developing world or any market where there is any form of currency manipulation or currency mobility, that is the future. bitcoin is the canary in the
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coal mine for a completely virtual, largely anonymous, and we can debate whether that is good or not, financial reality. anna: thomas speaking to our colleague at bloomberg tv. interesting conversation. you can hear more of that on coming up on the program, we look at the stocks on the move including vivendi as it considers selling off a music person. up around 70%. this is bloomberg. -- of around 17%. this is bloomberg. ♪
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matt: welcome back to bloomberg markets. this is the european open. the ship shortage hounding carmakers around the world is not a long-term concern for general motors. the president tells bloomberg how it is making an impact on gm's ev target. >> i think the pandemic really did not help a lot of our chip
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suppliers who do a great job under normal conditions. when the pandemic hit, the whole industry brought all of the factories down. a lot of that supply was still going into or shifted into consumer electronics. the thought was -- that industry may not recover as fast as some of the other industries. it takes a while to grow and do the silica and chips. -- silicon chips. once the industry came back faster than others thought, we got a hole. it is not a long-term supply issue that we can see. the other piece of it on the precious metal piece of it, we use a ton of precious metals in
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our catalytic converters and other anti-pollution devices that are inside the internal combustion engine of our vehicles in the industry. they are expensive because they are countermeasures. if you look at what you're really talking about -- it is the mixture and the composition of those in ourselves. if you own your own chemistry and you are making those, you can really do a substantial amount of r&d to eliminate those. that is all i'm going to say about that but those materials used today will not be those that we used tomorrow. anna: the president of general motors speaking to bloomberg's david westin. eddie van der walt talked about
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the moving parts in the supply chain narrative and how it could lead up to some inflation. something to look at when it comes to supply chain risks. let's get a look at stocks on the move with dani burger. it is supposed to be a quiet day without the u.s. and china with the lunar new year. dani: the drive -- the news is driving markets higher. vivendi is talking about listing universal music group by the end of the year which is something shareholders have wanted for a while for this profitable segment. but the plan was not to move it off until 2023. they also bought bob dylan's catalog late last year. that is also why bollore is also moving higher. it owns about 20% of vivendi.
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vivendi trading the highest since 2001. analysts really like this deal saying the price is good and it is a good fit. that is why shares are moving higher by almost 4%. let's look at the bigger market. a boring day but we are seeing decent gains across the board. perhaps all of these are the same fomo, reflation reflex. global equities are at a nearly $110 trillion market cap. surge is moving it -- crude is surging again. matt: dani burger looking at some of the movers and the movement in today's market and our into the session -- an hour into the session.
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surveillance is up next. anna, it has been a pleasure working with you and i hope you have an amazing year. this is bloomberg. ♪
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francine: global stocks surged to fresh records, the nikkei hits 30,000 for the first time since 1990 while bitcoin stops shy of $50,000. u.s. markets, closed for president's day. the u.k. hits its 15 million vaccination target and the euro lags behind. we will speak with the eu commissioner for the economy about the impact on the recovery. the spac revolution continues. the former u


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