tv Bloomberg Markets European Open Bloomberg May 18, 2021 2:00am-4:00am EDT
♪ anna: welcome to bloomberg markets: the european open. i'm anna edwards. mark cudmore joins me to take us through all the market action. just less than an hour away and hear your top headlines. stocks climbed despite concerns over the pandemic. japan's economy shrinks and this year's world economic forum meeting is off. mike novogratz tells bloomberg bitcoin will be pressured for weeks among elon musk's mayhem.
the u.s. president joe biden tells the israeli prime minister he supports a cease fire between israel and hamas, a big change in tone. welcome to the european market open. it is just 7:00 in london this tuesday morning. later than that in singapore. let's get to mark who has been tracking the markets through the european night for us. what are the markets saying to you? mark: good morning. your first line sums it up. stocks are rising despite pandemic concerns. the main story is that overall, we are seeing asian equities perform very well. their best day since early march, outperforming the taiwan stock market. generally, we have seen tech do well. it is helped by the fact the dollar is slightly soft generally, this is despite the fact away from markets the big topic of conversation has been restriction across the asian region. let's get some breaking news.
anna: we have some macro data from the u.k. around the fight against the virus in asia. we are getting the unemployment rate for the u.k. economy at 4.8%. the estimate was 4.9%. the prior number was 4.9% so the market was anticipating no change. the unemployment number has come down a little bit. this is data from march, pre-the reopening in any real sense for the u.k. economy. a big focus is when we are going to see a peak in unappointed because -- unemployment because still projecting a large number of jobs in the u.k. more people are coming back into the workforce but bloomberg economics suggests we could see unemployment peaked at 6% at the end of 2021. that is some of the dynamics to keep in mind as we go through the year and as we continue to focus on what the reopening of these developed economies can
do. let's think about where we are on the bigger picture, the pound. a bit of upside for the pound. let's have a look at where we are. we saw a modest drop for european markets and u.s. markets. today, we see expectations have arrived. modest in the u.s. but more modest in europe. expected to see some movement to the upside. italy will end its curfew on june 21. in terms of a european dynamic, very different for the asia conversation and that may be reflected in what we are seeing this morning. in terms of the u.s. futures, also pointing to the upside. improving in the last 20 minutes, moving further to the upside. mark, what did you see? mark: three big themes to draw attention to. first of all is this great equity performance we are seeing across the region. japan and korea leading it but the fintech is above that 50,000 level. it has been remarkable given the
amount of tragedy we are seeing in the country. overall, the stock market also going along with his general risk on field and stock markets across asia. commodities are strong get again. top of the list is copper which i will come back to later in the program and this is driven by what's happening in chile. the dollar is weak again. we are seeing currency show up at the top of the great on the fx column because the dollar is weakening across the board. very steady weakness across the dollar to test the multiyear lows in the bloomberg dollar index in the coming days. anna: where did you think we are able to put these concerns around the virus to one side on certain days and make gains on risk assets? we are still with some of the same headlines surrounding the clamp down on various levels of activities around the virus. we could still be concerned about inflation or not concerned about inflation depending on which side of the argument we fall. it is not like anything has
changed materially on any of those fronts. mark: i think on the virus, there are two big things. one is vaccines are clearly working. if you to global daily fatalities, excluding india, where the 70 average has fallen to the lowest level in six months as of yesterday. this is around the world, the u.s., u.k., israel. many countries that were previous epicenters are seeing a complete slump in the numbers of fatalities. that is because vaccines are making progress. they are slowly winning globally despite the tragedy that is happening in india. the other themes is we are seeing a large diversions. asian stocks and asian assets have been underperforming in the past few months as they go back into this next wave. it is not that the virus is having no impact on the global economy, it is not get a global story. it is hitting asian assets. overall, the rest of the world is doing ok. perhaps the final thing to note is the fact that india is the
one exception. i said asia is underperforming. india has not underperformed so much despite it being the epicenter. that is one story i cannot explain. anna: let me think about something else and that is outperformance by japanese assets. the japanese stock market, the nikkei up by more than 2%. the topics doing well as well. that is being led by electric appliance. i know that toyota is trading at a record because that has demonstrated some resilience to the chip headaches that have messed up production capacity of various global automakers. what do you make of the strong performance in japan? we've had gdp data out for japan but not quite outward looking. mark: two facets. one, it is really a consolidation of the weakness we have seen recently. japanese equities have been underperformers. they have been lagging a lot of the region and globally. this is a little bit of a bounce back.
another one is those bottom-up stories you have been talking about. there have been several good earnings stories and several good announcements from japanese companies. as for the macro data, it has not been positive. it has been very negative. as you say -- japan, we kind of know it is a sluggish, slow growth economy. people rarely trade off the big macro stories in japan the same way. anna: mark, thanks for those thoughts so far. mark stays with us all this hour. you can get up-to-date analysis and insight from mark and his team on your terminal. coming up, we hear from mike novogratz about what is next for bitcoin. plus, amid the musk-induced mayhem, michael burry makes his own bet against tesla. we break down the details from the 14 f filings. we speak to elizabeth marino, france's diversity minister, on introducing quotas, the talent
>> we expect purchases to continue at the current pace, so we have made substantial further progress. through the april employment report, we have not made substantial further progress. as the data comes in, we have to evaluate that and make a judgment on that. we will certainly give advanced warning before we anticipate scaling back the pace of those purchases. anna: that was the fed vice chair richard clarida to saying the u.s. jobs report last month shows the economy has not reached a level that warranted
scaling back the fact's massive bond purchases. he is saying it is not time to talk about tapering just yet. in terms of the bigger inflation debate, i was reading a piece by our colleague that says everyone will find data that supports that view over the next six month or so. if you think inflation is transitory, you will be able to find data that looks as if you can find data that supports that view. if you think it is not transitory, that it is becoming ingrained, you may be able to find data that supports that. it will be a long time before we get to the bottom of this. mark: i thought cameron's piece on this was excellent, as it always is. richard clarida was not going to say anything different. you can always find data in the back of the arguments. one of the big problems is transitory data, we will not have the answer for many months. many won't know until early next year. it will be a long time before it has good conclusion and people will spend the data no matter.
it in many ways, it makes the fed's comments pretty boring in the next few months unless they turn hawkish. any dovish reiteration is just the status quo and it does not matter. it is when they turn is when we should pay attention. anna: that is important. we will keep that in mind as we ate evaluate the news flow -- as we evaluate the news flow. u.s. stocks have risen as investors weigh the growth against virus cases in asia. investors will be watching fomc minutes out tomorrow for any comments on tapering and inflation. we are joined by the head of equity capital market at ubs. good morning to you. is now a good or bad time to be talking about, in your world, the equity capital markets world, is it a good time for businesses trying to ipo? we have seen quite a lot of that activity. it has not gone smoothly, things have been volatile. what is the overall environment like for ipo's? >> data suggest this is unequivocally a good time.
we are on track for a record year for european ipos. it has been a big catch up story year to date in europe relative to what we saw post-covid in the u.s. and asia. i think the forward-looking guidance will be taken very much from where the u.s. interest rates settle and what the implications are for the equity markets. mark: good morning. we're seeing a large part of this ipo surge that is tech driven which makes sense because many of the new companies are tech. is it more about tech companies specifically are willing to give europe their backing? or is it more the general story that europe is making much better catch up progress on the ipo forefront across industries? gareth: the start of all of this is a strong secondary equity market. we are pretty much an all-time highs from an equity index perspective. that gives vendors and potential ipos very attractive valuations to prepare their openings.
and the investor base is looking to put money into what is now a tired bull market, so they are very open to exciting stories. most of which, as you suggest, have been found in the technology space. anna: we're showing a chart now that shows the extent of the european tech industry which is impressive. a 21 year high in tech ipo's. something we have not seen since the dotcom boom. we will think about that for a moment. what about the areas we have seen it be difficult? why is that? i'm thinking of dark trace. they had to cut their ipo price ahead of it. is it to do with -- clearly, alpha wave got caught on a bad day perhaps. is sentiment broadening around tech stocks or are investors able to cut through with these individual stories? gareth: two points. one is any specific story will have its own nuances.
that will be examined on a case-by-case by investors. i think it is important that you look at the broader theme rather than specific stocks. secondly, it probably is an indicator that we are in an environment where investors are getting more selective and the bar to coming to market has gone up. therefore, they are a bit more sensitive to broader market sentiment at the point that it is specifically pricing. mark: how do you see the post-brexit competition between london and many of the main continental financial hubs in terms of the ipo landscape? gareth: the u.k. has continued to be a very attractive place for companies to list. there's a very high regard for the corporate governance. there is a large pool of investors with significant liquidity that like investing in the u.k. we are also seeing the beginning of a more constructive environment from regulators as well to make the u.k. an
attractive place to live. and certainly when you look at the discussion as to where you live, you are seeing the u.k. winning in many cases where investors are looking at the options of the u.s. or the u.k. they've proven pretty agnostic to where the stock actually lists and they are really focused on the underlying equity story. anna: we have seen a number of names in the travel space raising money during the height of the pandemic, from a european perspective and more recently. how receptive are investors to that kind of money raising at this point? the kind that is needed to shore up balance sheets, essentially? mark: this story for capital markets in 2020 was exactly that . it was post-covid. investors looking for high quality assets that perhaps were relatively distressed in the equity price and investors were willing to look through the covid prices -- crisis and back those good-quality companies. this year has been more a story of growth and ipo's, and much
more selective on the capital raising front, partly because so much got done last year. there's no doubt for high-quality stories, investors are willing to take a longer-term view and support them with new equity. anna: thank you so much. gareth stays with us a longer on the program. 43 minutes to go until the european market open. let's get a bloomberg first word news with laura wright's. laura: president joe biden has told prime minister benjamin netanyahu that he supports a cease-fire between israel and hamas. it is a shift in the u.s. approach following days of rising criticism for not taking a stronger stance. it adds the pressure to end the violence that has killed at least 220 people, mostly palestinians living in the gaza strip. italy plans to phase out its curfew and restart the economy as the number of covid-19 cases is going down as the vaccination programs steps up.
rome wants to remove the curfew to low risk regions on june 21. the number of deaths and italy felt to 93 in sunday, the first day below 100 since october. president biden says the u.s. will share at least 20 million doses of covid-19 vaccines with foreign nations by the end of june. it will be the first on the white house released doses abroad that could have been used domestically. it is on top of 60 million doses of the astrazeneca vaccine that has not been approved for u.s. use. 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. anna: thank you. coming up, on a roll. spac listings pickup in europe. the boom is fizzling out of the u.s. more on this story next. this is bloomberg. ♪
>> we are going to be spending a lot more than netflix. right now between the two of us, we are spending $20 billion a year on content and we expect to spend more than that. together right now, we have almost 100 million subscribers. neither one of us have really deployed aggressively outside the u.s. we are differentiated in a meaningful way in the u.s. now with the extraordinary ip that john and his team have built together with discovery. it is a very differentiated and compelling offering. anna: that was the discovery ceo speaking to us in the wake of the company's plan to combine with at&t's one or media -- warner media. following that bloomberg scoop. let's get to another story, spac
listings are picking up in europe at the fastest pace since starting last year. so far, london has missed out because of less favorable rules. but the u.k.'s market regulator is looking at spac listing changes to ramp up blank check ipo's in the british capital. gareth is still with us. let's talk about specs in europe and the potential for them. do you see london catching up with others in europe? should london be trying to catch up with others in europe? gareth: we have seen over $100 billion in issuance in the u.s. year-to-date. we have seen the beginning of those amsterdam and frankfurt offerings -- from an investor perspective. we would expect over the coming months, a pretty significant pickup in issuance there. the u.k. has some structural differences where historically we have seen spac's in the u.k.
which have been successful. i would expect the u.k. will have the same structures and rules we have seen in frankfurt and amsterdam, and will be a viable alternative for issuers as we go into the second half of the year. mark: i will ask you a difficult question. it is complex but i am looking for a simple answer. where do you think we are in terms of the state of ipo's versus direct listings versus spac's? some would say ipo's is a legacy thing that will slowly fade out because people will either go to direct listings or spac's. do you think that is the case? gareth: there are effectively three, or four very credible options. there is the m&a route, the traditional ipo route, and we now have the potential to do spac's or a direct listing. what history tells you is that direct listing, unless you have a pretty mature and pretty
diversified shareholder register before you get to your listing are pretty challenging to do and that is why you have scenes such a small dump off. spac's are not new. they have been around for a long time. the value of issuance is new and we believe that we will see a normalization in the amount of issuance and it will be a credible alternative. but as things normalize, it will be the big platforms that have a really voice in the market and the longer-term. anna: what do you think is the biggest threat -- i know we have seen things slow down in terms of spac's -- what is going to drive any slow down? regulation, accounting, bodies keeping up with the latest developments? what is the threat? gareth: it is a combination of
two factors. one is the regulatory outlook and the rules. the second part comes back to the general level of stimulus and low interest rate environment that we are in the economy. therefore, the amount of cash on the sidelines as we see interest rates normalizing, which we have begun to see in the u.s. -- the amount of money available for these issues will naturally shrink and that will create a normalization of the levels of issuance we are seeing. mark: you said it has been around for a long period of time but in many ways it feels like the market has exploded. are we about to reach maturity once we get more regulation? does that mean it is going through the evolution of becoming entrenched in the financial landscape? gareth: you had $80 billion of issuance in the u.s. last year, over $100 billion this year. i think there's no doubt they are around tuesday. the key question is they have a
two-year window to find opportunities to find their acquisitions. so, the clock is ticking on that. so, we will have to see, a, how that plays out and how successful they are at finding the end target. secondly, given the previous points raised, i think we will see a normalization in the volume and pace of issuance which is unlikely to continue in the same vein we have seen of the last 18 months. anna: thank you very much for your time. have a good weekend. gareth mccartney at ubs, thank you for joining us on the european market open. coming up, we are going to be speaking to elisabeth moreno, france's diversity minister on introducing gender quotas, the talent pipeline, and ethnic minority representation. the extent to which france is measuring and collecting data, what do they plan to do to improve performance on these issues. we will speak to her shortly about that. we will also be back to the market conversation.
>> welcome back to the european market open. half an hour to the start of cash equity trading. futures pointing to the upside. nasdaq futures up by 7% of 1%. we talked a little bit about where this is coming from i the fact the market was focused elsewhere rather than on the deterioration in what we are seeing in the fight against the virus in some parts of asia. there are other stories we need to focus on. i know that you have been focused on something that has been happening in chile. it's an interesting story because it links into
commodities, it links into politics. how politics changes the pandemic. >> absolutely. i think this is a relative story for the european audience. i think they will wonder why a country of 19 million people has got an economy that is only slightly bigger than finland, why is this particularly relative to its happening in politics overnight. what has happened is the left-wing groups has one power to rewrite the new constitution, but that is not the only thing. there is a new world deal that has just passed the lower house last week that looks to come through on the mining industry in chile. and the reason this is so relevant to all of that there is the fact that chile is by far the world are just copper producer. he produces more than twice as much copper than the second-biggest producer, but peru. we know that copper has been one of the key elements of driving this massive commodity search that is playing into the inflation story. the inflation story is the bigger theme that comes from the commodity story. that commodity story is very
dependent on chile. this new government is coming in , people are saying this could be a really material negative for supply over many years to come. it will be a very tough situation that is going to squeeze supply and supply really depends on copper. so some of that domestic therapies are dramatic. we have seen the currency fall for 2%. stock market has fallen 2% in the worst since march of last year. those don't matter as much as the global implications of copper in the inflation everywhere. anna: and we have already seen that some of the asian mining companies have benefited from this. this supply constraint can be positive and we have seen some of the asian copper minors moving higher. we will see this down to the london nifty mining sector when we open and 28 minutes time. at step away from the markets and turn our attention to something else political. the effort to boost the female representation. the lower house of the french parliament has passed the draft bill which mandates gender and
executive committees. companies will need to have 30% women by 2027 and 40% by 2030. it follows the success of what was imposed in 2011, requiring companies to have at least 40% by 2017. within the eu, france is the only member state to have achieved this figure in 2016. we are joined by the french diversity minister. minister, very good to speak to you, thanks for joining us on bloomberg television. we want to start our conversation thinking about this bill in the lower house. the quota of women on the executive committee, what have you learned from the way that quotas have worked elsewhere in the economy that makes you confident this is the right move? >> good morning, i am very pleased to be with you this morning. what i have learned, just for you to know, i have spent the 30 past years of my life in the consulate world. as a female leader, i have always dreamt about these
moments where we will consider women for their competence, and that is exactly what is happening in france now. we have been speaking about these things for quite a while, everywhere in the world because i have lucky to work with american companies, with chinese companies, european companies, and the have always had to face these glass ceiling issues. in france is fighting against that now. and actually we started fighting against that with who permitted us to move from 9% of women on board in 20 -- into thousand nine to 10 years later. 45% women. it means that you can push the boundaries and make things happen with laws. >> you said we would talk about it for a long amount of time, and that is correct. this is one of the campaign promises four years ago, why did
it take so long to get this bill through? was it because of the underlying costs for businesses or the political differences? >> i think we are really going through a kind of cultural shift where everybody knows that diversity in companies brings a very positive sentiment. in france, like almost everywhere in the world, you have less than 30% of the women leading large companies. in france, among 120 companies, we have less than 30% women leading these large groups. and we have had to wait for emmanuel macron to decide that gender parity would be his great call to see a significant difference between fear of our country when we speak about politics, when we speak about
social activities, cultural activities, so on and so forth. i really believe the right combination is the combination between public policies, what the associations are doing on the floor, because they can tell you that feminists are fighting very hard to make things happen, but also the evolution of companies who have really understood that they could not leave it aside. 52% of the talent is becoming a real issue everywhere in the world, and i think after these very difficult moments we have seen with the pandemic, where women have suffered a lot, it's really time to stop talking and acting and that's exactly what france is doing. anna: is it time to act differently when it comes to improving the representation of ethnic minorities on boards or in other parts of public life? i know in france it's not possible to collect the diversity data on ethnicity.
is it time to change that? >> actually, it is possible to collect those ethnic data. but to be frank with you, i am going to tell you, i am a black woman, and i'm going to tell you that you don't really need to collect data to know all of the qualities that -- all of the inequalities minorities are facing. yesterday was the fight against homophobia. we know that we have these discriminations against lgbt plus people. we know we have these inequalities on gender, we know we have these inequalities on ethnicity. in all of these things have very well been understood. that is the reason why we had launched, in february of last year, a platform to fight against all kinds of discrimination. we have 25 times of discrimination and i can tell
you that we are not lacking lows, we are lacking respect of lows. and i am really fighting against all this discrimination because they are unacceptable. they all start to take our human dignity, and we all need to fight against that. and it's not only a question of my ministry, it's a question of the entire government being mobilized against these discriminations. anna: why take a different approach around ethnicity to the approach you have taken around getting more women into the workforce? you say you can collect data on ethnicity in france, but i understand it's more limited to the ability to collect around gender. do you not think you need to have targets around it or is that not part of the french agenda? >> it is, for the moment, it is not part of the agenda. in france we have this
philosophy that we call universalism, which means that, in the french republic we only want to recognize people per seat, not because they are women, not because they are lgbt plus, not because they have a different ethnicity or whatever. what we are trying to do is to fight against all kind of diversity. i have decided to take some measures with the government, like power to make sure that diversity is considered in a more broad manner across companies, because one of the discriminations we recognize in our country's discrimination in the employment, whether it is under recruitment or on the career mobility. so we are creating a tool that we call a diversity index, which aims to measure the level of diversity of our companies, so
they can make the right decisions on how to hire, how to train their people, how to centralize their human resources, and make sure that people understand that diversity is not a threat, instead it is something that can really help any company to perform as we have seen in many studies. so we have ways in our load to measure the level of diversity of companies, and we are going, and they are very legal, and we are going to use those tools so companies can be much more inclusive than they are today. anna: so there are other ways. minister, thank you for joining us. elizabeth marino, french diversity minister. let's go to bloomberg business flash, the top corporate stories we are covering today with laura wright. laura: amazon is reported to be
in talks to buy movie studio mgm, that's according to the information. it would be the e-commerce giants biggest push and entertainment yet. variety said the deal could value the company behind the james bond film at $9 billion. mgm and amazon declined to comment on the report. credit suisse has left the stand in recent weeks with the latest and defections following the implosion of the capital management. this was bank had the biggest news from the collapse, writing down $4.7 million in money set aside for bonuses to limit the financial hit. apple is said to be facing continued delays in delivering its new high and ipad pro, it officially goes on sale in about a week, but supply chain issues may buyers may not be able to get their hands on one until july. bloomberg sources say apple products are struggling to sue boost -- reduce it in large quantities.
anna: welcome back to the european market open. european equity market futures pointing to the upside, pressing on growth optimism with a reopening story rather than focusing on the fight against a virus and parts of asia. last night was the final deadline for hedge funds to file their 13f's. major hedge funds during the first quarter of 2021. a hectic quarter mass by reddit fuel trading in we remember it well, dani burger does. she has the highlights. good morning. most funds seem to be playing on this. >> i think it's really interesting to see this as a big focus of this earning.
and they really played onto this idea of tech underperforming in the first quarter. or perhaps they even contributed to it. we already know that hedge funds have a short on the sector, but here we can see what happened to long positions. we don't know whether a lot of these funds abandoning tech has to do with concerns over high valuations because of the inflation trade, or perhaps because of this stay-at-home trade waiting period but a result of that with funds cutting things like peloton, crowd strike, zoom, and those reports being favorites last year. it's also interesting to see some of the high valued names, like tesla. this is one very specific trade. got a lot of attention overnight. putting a short position against tesla, specifically buying about 800,000 contracts worth of put options because of the teen is.
we don't know when he made this trade, when he puts when it would have expired, but it plans to reason he would have put money off of this considering tesla did fall in the first quarter. >> tech is one side of this trade, how did hedge fund managers treat the more cyclical parts of the market? >> it would stand to reason if they are dumping the high-value names that they go into cyclicals, but this one is a little bit more uneven, warren buffett i think is an interesting barometer, but he is always a guy that says don't bet against america, but warren buffett continues to cut his financial positions. maybe this is him saying that interest rates are likely to remain low, but he ends with goldman sachs, gets rid of wells fargo, something he has been doing for a while. he did dive into bank of america and this is quickly becoming a very large holding for warren buffett and it has a big consumer exposure. that is warren buffett, we did
see other managers buying more banks for example, so that's not necessarily an even look, but i think it's interesting warren buffett going all in on one bank, but not necessarily betting on the entire sector. anna: dani burger with the latest. emerging between the east and the west, parts of asia struggles with a pickup in virus cases. let's get more with juliette saly in singapore. juliet, quick developments in the last couple of days. the case rates are still much higher in some developed markets where we are seeing opening up as the dominant narrative and parts of asia. but the culture around handling it has been different from the start. tell us about the way that the virus resurgence is turning up in your parts of the world? juliet: you look in singapore, yesterday we had 21 cases, and that has caused us to go into a partial lockdown, 21 cases in
your part of the world would probably be something to celebrate. the concern is that it could pick up in a number of cases in asia, excluding india, as you can see in my chart, and it all happened very quickly. just a few weeks ago we are reporting that singapore was a place to be to whether the pandemic. the complaint is that there are 42 unlinked cases in the past week, up from seven. there is a concern of if this is spreading more broadly in other parts of asia with the likes of taiwan. that has caused things to change suddenly. we know the hong kong, singapore travel bubble has been closed again. it is showing in the data, we had japan gdp figures coming through today. this was the biggest strength expected, down 5.1% on an annualized basis, and really causing these concerns about whether or not you will see a double dip recession coming through in japan. and of course they are putting questions on other big events.
are the japanese olympics going to go ahead? >> absolutely. we were discussing earlier in the program about how vaccination programs clearly work and are making slow progress. where is asia in terms of the vaccination rollout and how will that affect the recovery? juliette: a lot of these asian countries have relied on covid zero. the fact that there was little transmission. the pickup and vaccination is not as high as it is in other parts of the world that we see in europe in the u.s. that is where we see big diversions coming through between the east and the west. as you can see on the chart, singapore has a ministered 65 doses per 100 people. in terms of people vaccinated, it's about a fifth of the population. taiwan is very much lagging behind. daniel from our bloomberg opinion said, shouldn't a country with one of the highest per capita incomes be aiming higher? singapore has a way to go, and
he's talking about a lot of these covid zero nations that rely on zero transmission rather than vaccination pickup. saying striving for perfection may be the deepest fall when it comes to the overall level reopening. anna: that low vaccination rate is in japan. weighing in on all of the conversation around the olympics. juliette saly bringing us the latest. coming up on the program, we are looking at stocks to watch. the u.k. tobacco company. more on this story. this is bloomberg. ♪
equity markets futures point to the upside, nasdaq futures up by 9/10 of 1%. dani burger has a breakdown and we start with heineken. dani: bloomberg scoop that heineken is looking at possibly a takeover of the south african wine and spirits maker. they are working with advisors, they made an approach. sources familiar tell us that it has a market value of $2.3 billion. this would be one of heineken's most significant transactions. south africa was one of their best performing markets. sticking with this theme, imperial brand is also out with earnings. they do see tobacco profitability getting better without -- throughout the rest of the year. basically maintaining their forecast, but did warn they could see higher taxes in the u.s. as the country looks at ways to make up for that pandemic spending. finally, they are clear that they are flush with cash. buying a u.s. electronic value chain operator yesterday, and
today, it spanish outlet reporting that they might delist it, and they would do it by buying back the shares. also look for that specific unit also rally today. anna: dani burger, our reporter took us through. mark, give us time to wrap through. you suggesting we mentioned the dollar. down by around a quarter of 1%. the dollar would retain bids because of growth spreads and haven demands. i started to wonder whether the resurgence of the virus would act around the dollar. certainly not this morning. mark: the bloomberg dollar index is at the lowest since january 7. we are only about half a percent from the six-year low of the bloomberg dollar index in its broad strike. this is not about one. we are seeing across the board
in asia, currencies reach towards multi-month highs. i think this is going to be in ongoing feel of the next month for many years, perhaps. the idea of having a dovish central bank, we will have deeply negative real yield and one is not good for the currency. anna: we will keep an eye on that one, seeing australian dollar in new zealand dollar. i hope the currency is moving upside. general risk appetite being expressed through fx market in that form. mark, thank you for spending the past hour with us. i will be back with the market open. futures pointing increasingly to the upside with markets focusing on the global growth reopening story with parts of the european narrative. we will be back with how these markets open, it's tuesday morning shortly. this is bloomberg. ♪
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anna: welcome back to the european market open. japan, the world economic forum. bitcoin will be pressured. michael makes another big short. and u.s. president joe biden tells the israeli prime minister about a cease-fire. a big change in tone. let's take a look at the futures picture there. we keep that in mind with the geopolitical tension, the virus, the fighting going on, certainly in parts of asia, with the vaccine rollout in many parts of the world. futures pointing to the upside, positive this morning. we have heard about italy in the its curfew in june. a little bit hopeful, the vaccine rollout continuing at pace here in many parts of europe, certainly across the
european continent, all of that adding up to higher expectations, perhaps. putting to one side the concerns around the resurgence of the virus in asia. european equity markets, that's have a look at where they open this morning. we are expecting futures higher, and to the upside, the ftse 100 up, and the cac 40 up, the ibex over in spain up by 7/10 of 1%. and then the french media space, the french market this morning, and we will return to that story shortly. and some m&a this morning, as well, in some sectors. we will add all of that together and see where that takes us. here in europe, we have most of the equity markets open. now, asia stocks and equities with investors weighing growth.
a pickup of virus cases in the region. there is a wide range of uncertainty, and that is making it difficult to strategize on what is next. let's get more from a cio, who joins us this morning. james, two to get to a conversation about your specific holdings -- good to get to a conversation about your specific holdings, with the last few days, where are we in this cycle? the early stage, or whether we are late in this cycle. this started back in 2009. what is your thinking, james? james: really nice to be with you. i must admit it is really difficult for us to know what stage of the economy we are in because of what is happening in the world in the context of what we have experienced before, but the fact is, we have never gone through a cycle with government
intervention and money printing being such a big part, and with interest rates being as low as they are in the negative in the case of so much debt being printed in the world, so it is a very different cycle from what we have previously experienced. government interventions, the printing of currency, we would be at the very end of the cycle. if it were continuing, we would be at the beginning or the middle, so sort of circumstances that i think make for a very messy picture. anna: so a lot of that depends, james. maybe to summarize your review, you mentioned the negative rate environment. the capital markets or the european debt market. seeing a bit of a build in the
german rate environment. maybe a positive number on the german 10-year. moving in that direction, is that something you are banking on? james: all around, i think they will move away from it, and i think that the inflationary pressures are building up in the system and will probably force us in that direction, and that makes it very difficult to know what bankers will and should do. we in the world have been enjoying a disinflationary environment for several decades, manufacturing from offshore centers, the integrated global supply chain, and you have a much freer movement of labor in europe and north america, etc., etc., and a lot of that is coming to an end and actually reversing. inflationary.
i think that has really large and misunderstood consequences for the economy. anna: how much is that changing? are we seeing a sea change? talking about the past decades and some who are not concerned about inflation say it is difficult to break that. that is really entrenched. with the inflation we are seeing at this point, it is transitory, and we will go back to that disinflationary narrative. others are saying that this time around, there is a substantial seachange. james: there is the constancy of human nature and how fallible we are, from history. and the idea of memory is one we do not talk about, but there is a consideration. going through decades of disinflationary pressure, and it
would leave the prognosticators to look at what is going forward, and when you look at a seachange, the changes we are going to see going forward -- so i don't know. i really think we are in a period where inflation is going to pick up. things in scarce supply, like gold, commodities, i think there is probably a great deal of misunderstanding about that, and i think that will provide a bit of a shock to the system and how central banks will be able to counter these, and i do not think there will be an attractive option for them going forward. anna: ok. we will pick up on that conversation shortly, james. james with more on gold and inflation and strategies around holdings in just a moment. i just want to get back to one
of the stocks and the intentions in south africa. we had this story earlier with our colleagues bringing the scoop, with the south african brewer, and we are getting confirmation. sales with an announcement saying that heineken has looked at a potential acquisition. just getting some confirmation there. and it is not moving all that far. coming up on the program, a record high last month. the ceo of galaxy digital says bitcoin -- that interview, next. this is bloomberg. ♪
1%, sort of easing the losses, but at focus, doordash with postings of job listings in germany, so a lot of these delivery companies likely to face new competition. to the upside, one of the biggest gainers is a vendee, and there are there holdings -- is avendi. 10% of their stake, they might look at selling. also looking at new structures when it comes to universal music group. also, we are seeing just the mining sector doing really well. the materials sector a top gainer today. of course, a lot of this is because of the macro picture. brent is also higher today, as well a lot of demand when it comes to the markets like the u.s., despite the lockdown in asia. of course, brent and the weaker
dollar, the bloomberg index since january. anna: dani burger with the latest movers. what dani was talking about, one stock down over 6% this morning, meaning the telecom sector is the only one in negative territory today in europe, being weighed down. vodafone. over at goldman-s, there is the capital expenditure that is overshadowing the growth strategy. let's switch focus to cryptocurrencies. likely under pressure for weeks to come. a record high last month. one analyst says he still expects bitcoin to go higher. >> i think bitcoin will be somewhere between 40000 and 55,000 for the next chapter to
build up new momentum and go much higher. >> how concerned are you about the short-term volatility being introduced by elon musk? >> elon musk is an important figure in american business, certainly. and the global retail, crypto will be an icon. he was positive for bitcoin. he has caused some issues. when he said was he worried as bitcoin gets more and more interesting, which it will, it will have a negative impact. that is true for every industry. we should see a response from every industry to say, hey, in this gap of time -- which i think is 70 years away -- we should do something to offset our footprint.
it is in banking. it is in crypto. it is in tech. >> saying that one of the hottest currencies is a joke, doge, sort of whipping people into that one and sort of multiplying the joke, and then other jokes. harder to make the case that this is a serious industry with a straight face. >> i do not want to discredit the doge community or other communities. what you're seeing is a response to the monetary policy in the u.s. and the world and the frustration people have had with the system, and this young generation is saying we can band together and create our own way of investing. trying to steer our clients away from projects we do not think have long-term sustainability,
but it proves something about communities that band together. if you go on my crypto twitter, you can see just how tribal it has gotten. making negative doge comments, and you have like six death threats. underneath it all, there is a huge revolution going on, where people are trying to rebuild the financial market and the structure. anna: that was the digital ceo of galaxy. james, a very different view on the prospects of bitcoin, cryptocurrencies as a whole asset class, or is it just the one? james: i really wish you would not have asked me this because i actually know mike and respecting. as a human being and as an investor. look. bitcoin, for me, is a ponzi
scheme and an absolute lie built on a whole bunch of fraud. forget about the ecological disaster, serving no purpose that i can see. conducting transactions with bitcoin. a lot of excitement. elon musk even said they would take the bitcoin payment for tesla. and there was a 30 minute window for a payment that was not long enough to transfer the bitcoins that needed to be transferred. so then you say, ok. let me try to reinvent the idea of bitcoin. well, guess what? commodities are going up. if ever there was a time for a purported value, this is it. so as commodities go up and inflation begins to show its
head, crypto declines precipitously, because some unpredictable ceo makes a comment about it, and that affects the entire value, and the entire ecosystem is in question. it is unsound and ill-conceived. the biggest problem i have with it is you have to look technically into bitcoin, what it stands for and what it does, more than 50% of bitcoin in the world is bought -- this is something that people don't understand. when you want to buy a bitcoin, you send it in, $1, and you use the tether than to buy the bitcoin. the fact is, there is supposed to be, and people have created it, saying it would be one dollar for each one, to create a tether, but in fact, there are more tethers than there are dollars. so people what to trade their bitcoin back into dollars, the whole thing would collapse. the whole bitcoin ecosystem
would collapse, and even if it does make sense. even if cryptocurrencies get adopted, ethereum is a superior trip currency from a technical. why would i be $50,000 that i know for a fact would be obsolete? anna: so the criticisms you make about bitcoin, are they about coin specifically and not some of the others? james: anna, it is really about bitcoin and about the fact that at the end of the day, every cryptocurrency that reigned supreme for the moment will be replaced by a technologically superior one down the road. not that it is useful. to conduct a bitcoin transaction
, over 60,000 times as much processing power as an average credit card transaction. we published a paper saying bitcoin is an ecological disaster, and it happens to be worth zero. getting debt threats, i did not get that because i am not as well-known, but some of the biggest companies in north america pointed out the extraordinary flaws in the whole blockchain architecture. so the crypto community, there is the excitement of being part of something new, but it has not found a proper use yet, and it has been around for well over a decade now. anna: thank you very much. stay with us, if you could. james, the cio. we will get more on specific holdings. that is coming up.
i wanted to ask you about one of your specific holdings. you were a shareholder. other shareholders with the group coming around to your way of thinking. and the company, the yellow buses in the united states. just to clarify, tell us how much of the company you own, and do you have support of the shareholders with the sale? james: yes, we own about 16% of the company. we have been contacted by many investors who are also absolutely frustrated, which i think is so ridiculous, with the assets. so the largest operator in north
america is proposing to sell our crown jewel assets, which it got for no less than 90% off of the company. they are proposing to sell it for a negative premium for less than one times book value. the only comparable asset was a transport company which a couple of years ago sold for 5.6 times value. the evaluation is extraordinary. and we think that is the result of the process. anna: ok, and the company says some are retreating from the global expansion. the company says they want to use this money to pay down debt on their u.k. operations. the shareholders, are enough of them of the same view as you?
james: we really hope so. we really do hope so. we have been contacted by very large investors. i do not see -- this company try to sell a public transport business during a pandemic. that is like a turtleneck in july. a couple of days before the company announced the transaction, we had presented the company with much more attractive alternatives for the buyers, a normal premium. and the company completely refused. and it got leaked by the chairman to us, rob perlman, unable 22, he said it could be 25% better, and you want to at least make them feel good.
anna: we will certainly reach out to first group to get comments on some of the things you have been saying. greyhound may also be up for sale. james: there is another. we have actually been contacted by private equity firms interested in greyhound, and we have reached out to management, and they are not responding. what is going on with this company? it is an absolute abdication of the responsibility by the chairman, by the board of this company, and there is confusion. we think they would do so much better. before this, the stock was 30% higher than today. that tells you about the value destruction. over the past two years, none have been presented to investors to sell the company or sell the
assets of a company at a discount of this value. it is a new low. anna: james, we will certainly reach out to first group to get a response about the decisions they have made. and we will present whatever they reply with. the ce -- cio of coast capital, james. coming up, joe biden calling the is really prime minister, benjamin netanyahu, to have a cease fire, pressure on the u.s. president. this is bloomberg. ♪
market open half an hour into our european trading day. let's dive in to the sector picture. it is an interesting one. all pictures asked -- generally speaking the picture is one of growth hopes outweighing concerns about the virus in today's session. we saw this through asia. the last hour we talked about the political developments in chile, which could have an impact. right now, 180 -- we see oil moving to the upside. there is one sector in negative territory and that is telecom. we see that sector being weighed
down by that heavy weight. let's switch focus now to geopolitics. president joe biden has told benjamin netanyahu in a phone call on monday that the u.s. now supports an immediate cease-fire. we are joined by bloomberg's -- is the u.s.'s stance on israel hardening? >> it represents a shift in town,, the president telling the israeli president that he is is seeking an end to the conflict. he is not demanding a cease-fire, which is something other nations have been calling on the u.s. to do. the chinese foreign ministry just called on the u.s. to do so
a few moments ago. the u.s. of course has been very engaged behind the scenes and diplomatic efforts to defuse the situation but publicly they have been very careful to say things like is real -- " israel has a right to defend itself." is it enough of a single -- signal to the israeli prime minister that he needs to wind down his hostilities with hamas? anna: we have developments around lebanon as well. >> we had a volley of rockets fired from lebanon into israel last night. there have been a couple of rounds now towards israel.
that is a reminder that no one can afford to draw in the players in the region. there is a broader stake here between saudi arabia and the uae for example. if this draws in those players you get a setback on efforts to open up travel. worst-case the abraham accords exam all -- abraham accords collapse completely. anna: thanks for the insight. thank you for joining us. it is 8:30 three here in london. as many countries begin reopening their companies, returning to international
travel is more possible than ever, flying is likely to look different than i did a year and a half ago. we spoke with the chairman of emirates airlines to get his thoughts on the coming season. >> the decision is left it to an external government. they are the ones who are slow. with us there -- we have more than 130 aircraft. seven are in-service. we are trying to push more and more, but governments also have to open. >> getting back to pre-covid demand levels, michael o'leary said we will need a vaccine
passport and that will take over from the pcr. do you see that happening? >> we talk at the uae, we have vaccinated -- 12 million doses have been given and that is more than now population --our population. of course we need some kind of structure -- whatever name it is given -- that will make people happy to see that it is less work they have to do. >> you support vaccine passports? >> whatever it is called. there should be a procedure easy between governments. >> the u.k. is probably one of your most important routes and yet we were not included on the
green last. why was that -- green list. why was that? >> there were people who pushed a lot because we were open, people who came during the new year's, enjoyed it here and here in dubai we are keeping our distance. everyone is wearing their mask, doing what is necessary. on the airline side, you will see we took every measure to be sure that our passengers and our staff on board and underground -- >> has they u.k. been transparent enough? >> i do not think so.
it is very difficult to understand -- if uc the israelis talking now- -- i think we need to look to see what is really happening and prove to the world the also that the uae today is in the top three in terms of vaccine. >> has the u.k. told you what you need to deliver to them? >> they have always demonstrated. anna: that was the emirates chairman, who was talking about the return of international travel. coming up, corporate panic buying is pushing global supply chains to a breaking point. we will discuss those supply chains under pressure next. this is bloomberg.
our european market session. it nasdaq futures up by 1/10 of 1%. we are watching -- at 10:00 a.m. you key -- at 10:00 a.m., the u.k. will have data to report. it will be interesting to get the retailers' perspective on inflation at this point. and it trusting -- an interesting point that will be taken up by -- no doubt that inflation seen will rear its head there. a euro though as the pandemic ravaged country after country consumers were the ones panic -- a year ago as the pandemic
ravaged country after country consumers were the ones panic buying. now it is companies doing that hiding -- panic buying. something we talked about many times on this program. when you look at the big picture, what is behind this huge supply crunch we are seeing for corporate's? >> it is like you said, manufacturers complained their supply chains are being turned upside down and behind that is the massive supply for consumer goods as markets reopen from the pandemic and manufacturers are struggling to meet that demand. they either can i get the goods they need to -- cannot get the goods they need or they are
facing skyhigh prices for them. it is commodities like iron or, copper -- iron ore, copper, shipping containers, adverse weather events. when you take it altogether the company we spoke to saying the breadth of shortages and price spikes they are seeing now are unparalleled to what they have seen in previous spikes in volatility and it is hurting pressure on them to pass those costs along to customers. anna: i wonder how many companies are learning important lessons about the resilience of their supply chains. so many supply chains are built around the just-in-time principal. what does this mean for the
world economy? enda: you have all this pressure coming to factories. the question becomes are they going to hike the price for the good they are making and charge their customers? economists will say to you a lot of the pressures out there right now are transitory. it is because of the pandemic disruption and the thinking is once all of that smith's out then you will see all of this come back to earth. we have spoken to a lot of manufacturers. we have been following this. let me give you one example on shipping container shortages -- once we get over the holiday period that blockage will smooth out, but that did not happen and if anything these
blockages have spent are even more so across the whole range of commodities you can think of. they are very optimistic and there is thinking that there is pressure on these factories to raise prices. anna: with the price rises we have seen and nasa shipping on a number of -- thank you for joining us. thanks to into current -- enda. >> amazon is in talks to buy mgm . that is according to variety. it would be the e-commerce giant's biggest push into entertainment yet. mgm and amazon declined to comment on the report.
how the dozen senior bankers not credit have left the company -- bankers i credit suisse -- bankers at credit suisse have left the company. heineken is in talks to take over south african wine and spirits group. it would be the most significant purchase. south africa is one of their best performing markets. anna: last night was the final deadline for hedge funds to file -- it gives us a glimpse into hedge funds in the first quarter . let's get into some of the highlights with dani burger.
were any of these hedge funds trading around the same theme in the first quarter? >> there was a clear shift in how hedge funds decided to treat big tech. big tech underperformed to the overall index so not onlys did hedge fund profit -- only did hedge funds profit from that, but they were also likely behind it. all three of stocks saw their positions reduced by these hedge fund managers. we do not know if this is the reflationary trade about it is a clear thing that happened to stocks that were very popular this time last year. one criticism we have heard from
test live from a well-known hedge fund manager of big short fame. on twitter in december he talked about a short position. we got what he did in the first quarter of this year. he shorted tesla. it we do not know when he would have exercised to these, but we can bet he did make money given the first quarter for tesla was not a good one. anna: anna: that is -- anna: that is what they hedge fund sector thinks of tech right now. what about cyclicals? >> not exactly a cyclical back. he added some to a gold company
but he cut positions in these three banks. he has been trying to exit wells fargo for some time now so he leaves all these three. warren buffett did power for their into bank of america. this is very retail consumer oriented banks. that fits into his theme of saying " america is doing well." anna: dani burger with insights. coming up, we will be back with the macro. u.k. implement rises more than expected and the economy reopens. we will get the view on that. mark cooper joins us next. laura cooper joins us next --
telecom sector though. let's talk to laura cooper. your thoughts on what is pushing us higher here? in the asian session we went higher despite concerns about clampdown's and the virus there. >> that appears to be the case today. there are a number of factors. one, we are seeing the dollar on the back fight. that bodes well overall for risky sentiment. investors are focused on european recovery. we are seeing europe taking the growth recovery baton from the u.s.. i do think investors are still focused on the fact that europe is a cyclically exposed equity market and we will see them benefit from that broader global
narrative anna:. -- global narrative. anna: you made -- in the short term, we see a stronger pound. that has much to deal with the weaker dollar story. what stood out to you as being a positive from this data set? laura: we have u.k. employment rising into positive territory for the first time in a year. focus should be on timely indicators in the furlough scheme. for the u.k., it matters how much am -- how soon employers are able to bring back on workers. the more workers are off that scheme before it unwinds, that will bode well for that recovery outlook.
focus for investors will be more on that print tomorrow around inflation. we are expecting to see a spike like we did in the u.s.. it is the bank of england's response to that number that markets will be watching. anna: we have been on a wild ride recently -- we are earned -- we are close to record highs on the commodity index. you have been asking which assets will be hot at the commodity rally's and. -- rally's end. laura: it is spurring a breakout across a number of asset. material stocks in the u.s. relative to tech is seeing a breakout. commodity currencies like the canadian dollar is up 5% this
quarter alone. if we do see those gains begin to slow, that will weigh on key inflation hedges. supply constraints demand a global recovery. anna: we saw rent prices going -- oil prices going up. thank you for joining us on the program. that is at for the european market open. surveillance early addition is up next -- early edition is up next. this is bloomberg. ♪
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ensure additive nest and draw investment from the united states -- to draw investment from the united states, canada will be able to -- with a willing partner to ensure competitiveness and draw investment from the united states, canada will be able to -- >> there is not enough tax in the world for the private sector to be able to pay for this. it will have to be a private-public partnership. ♪ >> it will be somewhere between