tv Bloomberg Markets Bloomberg April 26, 2021 1:00pm-2:01pm EDT
raise taxes on the income, investments and estates of the wealthiest americans to levels not seen in more than four decades. americans making over a certain amount a day will face higher marginal rates. some americans will face increased rates on capital gains. the last time they were that high, jimmy carter was president. al gore says we are now at the start of a time that may be unlike any other. the former vice president spoke today at the bloomberg green summit. >> we are now in the early stages of a sustainability revolution powered in part by machine learning and artificial intelligence and the internet of things and the biotech revolution, a revolution that has the magnitude of the industrial revolution with the speed of the digital revolution,
and many are saying it is the biggest business and investment opportunity in all of history. mark: concerning climate change, mr. gore said from the time scientists started sounding the alarm about it, "we have waited way too long," but says he is optimistic we are crossing the political tipping point. the philippines is the latest nation to record more than one million covid infections. officials are assessing whether to instate a month-long lockdown in manila or relax it. the philippines has the second-highest covid-19 caseload and southeast asia -- in southeast asia after indonesia. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg.
matt: it is 1:00 p.m., 7:00 p.m. in berlin, welcome to bloomberg markets. here are the top stories we are following. countdown to the fed decision. we will discuss the latest in the race, what to expect from the fl mc. we will bring you the latest on the virus and vaccines as the u.s. continues to expand its reopening while countries like india struggle to contain record infections. and e-sports and pro racing crossover e-sports giant volo shea becomes the first to acquire a real-life sporting franchise ahead of its planned public offering. we will speak to the ceo, rupert
cook. let's take a look at what is going on in markets. there's not a lot of movement. when you look at cross asset classes, you see the s&p up .2%, but other benchmarks not even moving that much. the 10 year barely budged. brent crude is down, but only .8%. when you look across the slew of assets from gold to fx, there's not a lot of change on the day with the exception of bitcoin. right now, $53,000 roughly. that is up 6% from friday,'s close, 12% from yesterday's. this is where you see a lot of the action today. we also have a five-year auction today. and a looks like the treasury
issued five year yield at 0.89% before the auction. that doesn't look to have moved much after the auction. seems to have been successful. we are joined now for more on rates but markets reporter katie cry filled. -- katie cry filled. -- reporter katie. -- that went a little haywire. are we over that? >> it feels like. this is the case with treasury auctions. it does not seem to matter with markets until they do. we seem to have gone past that. if you look at how the treasury market is changing, fine. nothing much changing although we had that softer two year auction earlier in the day. when you look at the flows going
into bonds, because nominal yields have not been changing that much, dropping a little, but if you look at the flow picture, you have seen more of a bid for those short duration treasury etf's that focus on the one to three year part of the curve coming out of duration heavy funds that focus on 20 year plus treasuries. even though there has not been that much movement in the rates, that selloff has cooled a little. you are seeing tension build underneath the surface by flows. matt: we also have a focus today and tomorrow, katie, on the bloomberg green summit, which kicked off today. you pointed out that in terms of esg investments, it is quite a crowded field. i do not mean that there is a lot to invest in. the opposite. there are few targets and everybody is in them. katie: exactly.
there's a lot of demand for not that many assets now. this has been a problem in etf's over the past decade. you have seen in real estate. you have seen it more in the high disruptive tech names. now it is coming to esg. the issue or the concern is that if you have all these billions of dollars, just this wave of money, it will disrupt liquidity. it will be harder to trade these names. should these inflows turn to outflows, that could exacerbate selling. you saw s&p tweet one of its benchmarks last week. it had held 30 names. it expanded that to a target of 100 names to address those concerns. you have seen such demand in the esg space they needed to boost the number of targets to sort of spread that money out. matt: katie, thank you very much. katie talking to us about the markets. let's dig deeper in terms of the
stock of the hour. big earnings week. no company as closely followed as apple, when it releases the numbers wednesday. it gupta with a preview. -- ritika gupta with a preview. >> the big tech players releasing earnings this week, tesla today after the bell kicking it off. they will be led by apple with about $28.8 billion expected. we have got that big announcement from apple today. they will be increasing their spending and the u.s. to $430 billion. that is an increase from the $350 billion it pledged under the former administration. that is huge. the company has the need to do it. they are worth about $2 trillion. its shares are up 200% since its last spending climb in
2018. it has been accessing those debt markets. we have seen its cash pile to be on the rise. for those questioning its credit outlook, bloomberg intelligence saying not to worry. it is not likely to be too disruptive. they have a strong balance sheet so it will not disrupt those buyback and dividend plants. speaking of, that is expected to be in this announcement coming up wednesday as well. over the past five years, apple spent about $270 billion on share buybacks and about $67 billion on dividends. matt: have we heard anything from apple about the tax plan of this new administration? ritika: that has been a key point to this whole story because apple consistently gets the majority of its profits abroad. that has put it more in the spotlight under biden's administration and the tax plan they went.
-- they want. apple made a point to say it is the biggest u.s. taxpayer and over the last five years has spent about $45 billion for contributing that to the domestic corporate taxes as well here, matt. matt: ritika gupta, thanks very much, focused in on apple for our stock of the hour. a newspaper published findings that showed that in the swift canton -- swiss cantons of swe iss and another, one in six people is a millionaire. even more interesting is the amount of tax that they pay. 7.5% in the aforementioned cantons, which is why they have moved their, but only 15% across
-- have moved there, but only 15% across switzerland, which is the highest tax rate that has incredible services, and incredible safety net, and runs efficiently. interesting picture into how much money the government really needs to take to run the country smoothly. certainly in a small mountain country, switzerland, it works quite well without you working for it for very much of the year. coming up, dr. joshua sharfstein of johns hopkins as we get headlines now that president biden and indium prime minister -- and indian prime minister narendra modi spoke today about the covid situation and india, where they continually break -- situation in india, where they continually break records for the most covid infections per day. this is bloomberg. ♪
mark: -- matt: this is bloomberg markets. i am matt miller. getting word that president biden and indian prime minister narendra modi spoke earlier about the covid situation in the country of india. the u.s. offering vaccine materials and therapeutics, but they need more. joining us now is dr. joshua sharfstein, vice dean at the johns hopkins bloomberg school of public health, so clearly our founder and majority owner is heavily involved in that. i want to ask about the india situation for more of a -- situation from more of a selfish point of view. it is a tragic situation. we continue to get horrible numbers.
but does the developed world realize how much of a problem that could be for them if it comes back around in the form of reinfections with new variations? dr. sharfstein: there are multiple ways that what's going on india -- going on in india threatens the world. the first is the sheer amount of suffering and catastrophe happening and the ways that could affect families in india, over the world, and the economy. you have this biological concern that if we allow the virus to spread unimpeded across the world, it will continue changing and destabilize, potentially, other countries that have it more under control, so it is a serious problem. we are only now seeing the full, fearsome potential of this virus a year into this and we have to jump in to help india. matt: in terms of what we can
do, i imagine that they just need so much, from hospital equipment to vaccines. they are going to need long-term health care help as well as so many people get covid. i guess it is a smaller percentage that get long covid, but that will be massive number when you look at the population. what needs to be done? dr. sharfstein: india has an enormous pharmaceutical and vaccine industry. the world has been counting on them to make vaccines for many countries across continents, so really making sure the industry can stand up and produce a lot of safe and effective vaccine is incredibly important to the entire globe. and then you have the urgent issues. oxygen, protective equipment for health-care workers, staff. there are all sorts of supplies
necessary to help with the surge . this will be a challenging time. remember that this can spread exponentially. what you are seeing today could be doubled in the next week. that's the kind of growth that makes everybody realize how much is at stake. matt: in terms of what we are seeing in the u.s. and here in europe, things seem to be going better. certainly in the u.k., they have given one shot to at least half the population. the u.s. well on its way there. today, ursula von der leyen saying at some point u.s. visitors will be able to come back here if they are vaccinated. how does the vaccine rollout go forward after pretty much everyone who has one today vaccine has gotten it now? -- has wanted a vaccine has gotten it now? dr. sharfstein: there are three groups -- people who really want today vaccine, banging on the
pharmacy door. in the u.s., those people are now getting vaccinated, or know when their appointment is. the second group is the wait and see group. they are interested. you have to find them, answer their questions and they will get vaccinated. that's the main stage in the u.s. that may be 30% of the population. there are a lot of people there. that is not as easy as opening a football stadium and vaccinating everyone who shows up. you have to go out, answer questions, do mobile vaccination. that will be the nature of the effort. matt: thank you for joining us today. you have been a real help. dr. joshua sharfstein there of johns hopkins. still ahead, e-sports giant veloce becomes the first to acquire a real-life sporting franchise ahead os planned public offering r.
matt: this is bloomberg markets. i am matt miller. traditional sports came to a halt in 2020. the e-sports industry saw explosive growth. fast forward to now. one of the leading e-sports companies, veloce, launching a funding round to continue expansion ahead of its public offering and expanding into physical sports. ceo rupert spence and -- ceo
rupert svendsen-cook joins from london to talk about this. let's talk first about the physical foray. tell us about extreme e-sports. rupert: extreme e is a brand-new electric racing series. we had our first race three weeks ago in saudi arabia. they race in parts of the planet affected by climate change to raise awareness of it. we have a legacy project. the idea is to raise awareness and a call to action, really, through sports. matt: rupert, funding these efforts is a billionaire's game. it is not cheap. how are you getting the funding to build the cars, to get the drivers, to ship them from event
to event? rupert: it is true. motorsport is expensive, especially a new one, but launching such a series in the middle of a pandemic has been a real challenge, but from a commercial standpoint, of course, the series is very well-placed. it is all about championing electrification, quality in sport, because we have male and female drivers. it is actually -- you know, we are having a lot of success from a commercial standpoint. matt: let's talk about the actual -- you know, the core business, your e-sports business. as much as i love physical racing -- i am a huge fan of moto gt and i wish fr1 -- f1 were more interesting -- i have not gotten into virtual sports.
what is your audience and what is the growth like? rupert: just hearing your previous guest, covid has done us a lot of favors, perversely. last year, we had something like 20 million views a month across all of our platforms. now we are at 250 million plus every month. really, i think it is only going to continue to go one way. matt: yeah, the ioc has apparently announced in inaugural slate of -- announced an inaugural slate of licensed e-sports events for the tokyo olympics. what do we expect to see their? -- there? will you participate? rupert: yeah. some of our teams will be representing their nations in this olympic event. we will see this only become more and more a part of and
formally recognized by the olympic committee. the generations coming through now, will stte even my -- through now, whilst my generation and older compare the videogame to the real world, but the core demographic we have, it doesn't look like anything. they do not compare it to that. it is a sport. i think it will be recognized in that way eventually. matt: i am a huge carl duty guy -- huge call of duty guy. i love video games. i remember when turtle from entourage was in mike tyson's knockout competition a decade or two ago. is this something like that or does it go beyond video games? rupert: i think it will go beyond video games. i think the key metric is the viewership and the engagement.
i think with that comes a fan base, so a lot of the e-sports and gaming tournaments now, they have a viewership and a fan base that far exceeds that of traditional globally recognized sports, so i think it will continue to evolve and because of the fact that it is virtual, there's a lot more possibility from a creativity standpoint of what competitions can look like. matt: what is the crossover with crypto? i have heard something about a token you have issued, rev, to help finance the business. rupert: it was our first subscriber to our pre-ipo around. and really, they are very well-established in this space. they are behind the mba top shots as well as -- the nba top shots as well as other organizations.
they have had success. they are a strategic partner for us going first. we believe in the value of the rev token. matt: very cool. rupert, thank you. rupert svendsen-cook is the ceo of veloce. coming up, the fed is expected to hold steady when it makes its latest announcement wednesday. we will tell you why bank lending has fallen below pretend -- below pre-pandemic levels even with continued qe. shouldn't not be boosting bank lending? isn't that the point, at least partially? we will discuss. this is bloomberg. ♪
announce new cdc guidance on mask wearing. cnn reports the president's remarks expected tomorrow will include an update on whether vaccinated people still need to wear facial coverings outside. on sunday, dr. anthony fauci told abc that evidence is quite low -- that evidence of outdoor risk is quite low and allowing people who are vaccinated to go without masks outdoors would be common sense. the pandemic is getting worse in india, where there have been one million cases of covid in the last three days. the united states plans to send india more raw materials and financing aid. the prime minister of india implored indians to get vaccinated and disregard rumors of side effects. the head of the wto urged rich nations to support more covid-19 vaccines, singling out the u.k. and the u.s. as she reiterated the need to ensure countries are
not left behind if the world wants to get through the pandemic. >> vaccine nationalism doesn't work. those countries that are not sharing or exporting, to do so as quickly as possible, i urge them. it would be great if we could get the u.k. and u.s. to export some of the vaccines. >> while more than one billion covid 19 vaccine doses have been administered globally, more than 400 million of those have been shots given to people in the u.s., u.k. and e.u.. -- e.u. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg.
amanda: i am amanda lang. welcome to bloomberg markets. welcome. here are the top stories we are following for you from around the world. count down to the fed decision. what to expect from the f lmc -- fomc and why lending has gone lower despite the policies the fed has put in place. shares of tesla are gaining after its earnings report after the closing bell. can they maintain their lead in the face of competition? we talk with their research ceo. apple commits $430 billion in u.s. investment. we discussed the plan that will add 20,000 jobs in the u.s. over the next five years.
really an astounding amount of money even considering a five-year time horizon and that it is apple, amanda. amanda: it is that kind of optimism that is helping to fuel investors, as are some of the earnings we are seeing. it is a huge week for tech earnings and that maybe turning the attention back to growth stocks, though for that s&p 500, while positive, tech is in the middle of the pack. they are not showing leadership in energy, financials, materials. in toronto, we are also seeing gains. it is a fed week, so we are not surprised, other than for specific stocks, to see modest trading. we know the fed considers the expansion to be moderate. the pandemic still at hand. and great accommodation still.
i want to bring in cameron, who is bloomberg's macro strategist. really interesting to note that even though the fed remains super accommodative, bank lending has turned down, which raises -- cameron cannot hear me. sorry about that. can matt hear me? ok. sorry about that. matt cannot hear me and i think cameron cannot hear me either. we will come back to cameron as we watch the federal reserve this week. the note today pointing out that we have seen lending dropping among the biggest banks. that obviously is going to be a big point of interest for the fed. went to note that we are looking at some heads here from changes
in capital gains. following loans out there that -- this is from -- obviously we are expecting more from the president this week about -- at the very top -- the expectation is this will not fly anywhere, not with democrats or republicans, but we are seeing just the top sliver that would be affected here, so effectively a kind of wealth tax. this is not a bad point to bring cameron crise and on, if you can -- cameron crise in on if he can hear me. the fed's actions on keeping monetary policy loose is supposed to increase liquidity through lending. the question is whether the -- whether it is working the way the fed wants it to work?
matt: cameron is not back, but i am back. it is fascinating to see these headlines come across and to see the administration kind of defend this. changes in capital gains only applying to people with a $1 million plus income. it is actually more than a defense. it is a change from what we thought would happen. we thought it meant that anybody with capital gains would be taxed at a higher rate. that is what i thought at least. what they are saying is that only those with more than $1 million in annual income would be affected by this capital gains increase. i wonder if that means if you have less than a million dollars a year in income you still get your capital gains taxed at the lower rate. maybe that makes this bid -- this easier to deal with, but
a portion of the administration is saying they are doing this, the tax changes for talks earners would -- for top earners would be done in the name of fairness. that is a great way to sell it, i guess, although some people may be do not think it is fair to redistribute wealth in that way. it is the kind of thing that causes a lot of political debate. amanda: it is where it gets very political. of the selling point would be capital gains taxes stay where they are for the majority and this only hits the very wealthy. we know they are very influential politically, so it is a tough line to walk. matt: absolutely. i want to tell our viewers as well that cameron crise -- i recommend reading his column, ni macro man go. he is having technical difficulties making it difficult for us to get him back. maybe with the infrastructure
plan, broadband will be everywhere and even cameron will be able to hang with us on the television program. tesla earnings out after the closing bell. we will speak with gordon johnson shortly, glc research ceo. earnings could get a huge boost th to tesla's purchase of bitcoin in february, putting 8% of its cash in bitcoin. even if unsold, a 30% rise from the close of february 8, so it could be about a $450 million boost. it looks like a smart investment right now. amanda: it was also seen as a huge vote of confidence for bitcoin, as you will recall, that bitcoin would take this action. it will add some volatility to the stock. we will talk with an investor
matt: this is bloomberg markets. i am matt miller with amanda lang. we have been talking about tesla. it is out with earnings after the closing bell. take a look at the options implied move for tesla. this will tell us the possible move that we could see either up or down after the earnings are released. 6.2%, basically.
a bigger implied move then you would see around the earnings of any of the big tech companies, apple, alphabet, amazon or microsoft. a shout out to dan curtis for putting this together for us. a market cap change of $43 billion around tesla after earnings. bigger for apple, $83 billion because of the size of the company. amanda: shout out to dan curtis. the implied volatility not only to rise. tesla watchers will know you better have a stern stomach if you are to handle this. it is news driven. the question -- what can tesla say or do to summarize its quarter to match the expectations that are somewhat lofty for this company? matt: may be -- maybe more news or sentiment driven than
fundamentals driven. gordon johnson, gl j founder, let me get your thoughts. tesla had numbers that people were surprised by. we are seeing some ancillary effects that bode well for the earnings report. what are you looking for? gordon: thank you for having me on. with respect to the earnings report, we think tesla has picked all the low hanging fruit. they have been in the world's three largest car markets. in the eu and china, their share is dropping. in the eu, they had a market share of 35%. it is down to 11.5%. in china, the first quarter of last year, roughly 20% market share. that number dropped to 13% and
jumped back up to 17% due to price cuts. they are cutting prices now to push volume. we think of their core auto business. there earnings will be -- from a revenue and margin perspective. two things -- credit sales. we don't know how much revenue they will recognize in credit sales. they can boost their numbers with credit revenue in q1. we do not think they will get a lot of credit for that. and bitcoin. you have to sell the bitcoin to recognize any fundamentals. if they do not sell, we do not think they will get the boost. amanda: in terms of what will give it a boost, there are high expectations for topline growth. if it disappoints, is this like last quarter, a quarter where you see a selloff, or are you in the camp of those investors who think you purchase
going into the quarter? gordon: we are not. those credit sales are going away, so when you strip out the credit sales, historically, 28 of the past quarters, all of their existence, they have only been profitable for four excluding credit sales. earnings for tesla are not really important. you are talking about a company that has a $700 billion valuation that sold 184,000 cars versus vw that sold roughly 2.5 million cars. you need to see tremendous growth out of tesla. in q1, despite massive price cuts in china and across the world, their total delivery volumes were only up 4%. why do people like tesla?
they say they are an innovator. car and driver ranked tesla second to last in reliability. when you look at the report done on their actual range, the range of their cars, every single one of their cars fell short of the stated range significantly. that shows you that not only from a technicalogical -- and you have competition entering. when you look at the second and third and fourth quarter, things get cloudy and the stock will start a trade-off. matt: this has been a dangerous game to play. people betting against tesla have been losing millions of dollars, even billions of dollars, for years and years and years. why does that change this year? gordon: the reason it changes this year -- and when you say
years, that is not accurate. really, the stock took off last year. what happened? a lot of these stocks, spac's, stocks that do not make money but have a lot of momentum behind them took off. if you look at 2019 and before, it was up and down. the issue for tesla this year -- again, they have picked the low hanging fruit. what are they announcing incrementally? there's not a significant lineup of models versus 50 or 60 cars coming from competitors this year and more next year. market share falling in europe and china. sales in the u.s. down. in the three core markets, they are declining. they have implemented significant cuts in price. despite that, the only group by 4% in china. even with the price cuts, it is not translating to growth. that will become evident through this year.
what is important today is what is the profit, excluding credit sales, which they have admitted are one-time in nature and going fully away next year? if they lose money excluding credit sales, that's a problem. we talk about china. all of the state run media in china, all over the internet in china, you are having reports come out that tesla's cars have issues. this is becoming a big problem in their second largest global market and their highest growth market, china. this will affect their sales in q2. the story is starting to become undressed. we will see the emperor has no clothes. you will see that if you look closer at the data. amanda: interesting, gordon. we are watching closely ahead of those earnings. gordon johnson of glj,
appreciate it. apple has said it will spend $430 billion in the u.s. over the next five years. we will dig into that. and at the bloomberg green summit today, al gore talked about the recent investment in green through the infrastructure bill. have a listen. >> we are now in the early stages of a sustainability revolution powered in part by machine learning and artificial intelligence and the internet of things and the biotech revolution, a revolution that has the magnitude of the industrial revolution with the speed of eight digital revolution -- of the digital revolution, and many are saying it is the biggest business and investment opportunity in all of history. ♪
billion for the u.s. they say that could create thousands of jobs over five years. mark is with us now. in terms of apple's spending and what it signifies, we have seen a huge shift in thinking around supply chains. is this part of that? is this part of an on shoring process where might this have happened anyway? mark: this would have happened anyway. they announced a $350 billion u.s. investment over five years about two years ago, so this is perhaps an extension of that. they are upping the dollars spent by about $80 billion here, part of that on a new campus in north carolina, which is the biggest news of the day. this is their first east coast campus. they will hire 3000 people.
they are investing money in the community. they are spending over $1 billion to build this. that is what i am focusing on, what this new campus means, and this general idea of them placing new offices and campuses across the country. matt: that is the cool part too, mark. you are lucky enough to already live on the west coast, but if i read it correctly, they will add 5000 jobs in san diego, which has to be the most perfect place to live in america. what is the job creation total going to be directly in terms of apple hires? mark: i tend to agree with you. in terms of apple hiring, it will eventually be 20,000 over the next seven to 10 years. the 20,000 number they put out today represents supplier hiring as well, but if you look at all of it, 3000 jobs at minimum in north carolina, 5000 and
southern california -- in southern california, and they have a new campus in austin, texas next year that will house 15,000 employees eventually, probably in the latter half of the decade, but i think the big story here is that apple is sort of trying to be the company to i do not want to say kill silicon valley, but i think what they do realize is that the next generation of the workforce do not want to live in silicon valley. they want the jobs to be where they live and the places they want to be. amanda: one quick question i have got to ask is about the margins. i don't just mean locating in the u.s. -- san diego ain't cheap -- but also building your own ships. -- chips. will this eat into profits?
>> nothing has changed in terms of how these devices and components are being produced. they were being designed in the u.s. anyway. the components are shipped to china and taiwan for production and that is not changing anytime soon. matt: mark, thanks. great to talk to you about apple. mark gurman is our technology guru coming to us out of los angeles. looks like he is in the los angeles office. i think i might rather be in san diego or san francisco, but i admit i do not know l.a. well enough. toronto? do you prefer toronto to the west coast, amanda? amanda: anything on the east coast. matt: you are and east coast person -- an east coast person. matt: i am matt miller. this is bloomberg. ♪
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president biden is poised to unveil a plan that would raise taxes on the wealthiest americans to levels not seen in more than four decades. americans earning over 400,000 dollars a year will pay higher marginal income tax rates. those taking in $1 million or more will face a levy of up to 43.4% on their capital gains. the last time rates got close to that, jimmy carter was president. mr. biden will unveil his program in the wednesday night speech to congress. the u.s. supreme court will consider a major new second amendment dispute over whether the government must let residents carry a handgun in public. the justices have agreed to hear an appeal by a new york gun rights group and two people who say the state is violating their constitutional rights by issuing caring licenses -- carry licenses only to those who show a special need for protection. the high court has not released