Skip to main content

tv   Bloomberg Markets  Bloomberg  November 15, 2021 1:00pm-2:00pm EST

1:00 pm
this follows sunday's explosion outside a hospital in liverpool. officials are treating the incident as terrorism, the second in a month. in october, a conservative lawmaker was fatally stabbed at a meeting in his constituency. four men have been arrested in connection with sunday's explosion. chuck schumer wants president biden to tap the strategic petroleum reserve to help lower gasoline prices. leader schumer says consumers need immediate relief. the president has hinted he may take action on fuel costs. polls indicate many americans blame the president for failing to contain inflation. in the philippines, president duterte will run for the senate and the 2022 elections. his decision to run clears a path for his daughter to seek
1:01 pm
the post of vice president after he threatened to run against her. the announcement ends speculation about whether he would run for vice president once his six-year term expires next year. international enrollment at u.s. colleges have plunged in the midst of the coronavirus pandemic. the total fell 15% during the last academic year, the largest drop in more than seven decades. the trump administration's immigration stance is also seen as a factor. it means a loss in revenue for colleges. international students often pay full price. 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'm mark crumpton. this is bloomberg. ♪
1:02 pm
matt: it is 1:00 in new york, 7:00 p.m. in berlin, and 2:00 a.m. in hong kong. i'm matt miller. welcome to bloomberg markets. here are the top stories we are following on the bloomberg and from around the world. we will cover all things in washington as president biden says infrastructure spending will help to ease inflation. he signs the bipartisan bill into law, but what hurdles does the rest of his agenda face, and what can we expect in his meeting with chinese president xi? two former fed presidents tell bloomberg the fed will likely have to raise its target funds rate to keep inflation in check. the bank of canada governor says that central bank is getting closer to raising rates. we will discuss all things monetary policy. and the company building satellites for the likes of nasa and the u.s. defense department is set to go public via a spac.
1:03 pm
we will discuss the terran orbital deal with marc bell. first, let's take a quick look at what is going on in markets. we see the s&p 500 putting up gains today but now losses. light now at 4681. not making a lot of movement in either direction. -- right now at 4681. the benchmark rate is holding steady. the 10-year at 1.6180. the 30-year climbing back over to percent, although just barely -- 2%, although just barely. the global benchmark of brent trading higher than that but also losing ground today.
1:04 pm
president biden and china's xi jinping are scheduled to hold their first virtual summit today, expected to last several hours. topics ranging from the economy to taiwan to sanctions. to discuss all of that is diana choyleva of enodo economics. thank you for joining us. appreciate your time today. what do you think we can expect from this summit, given that u.s. and china relations are at a low point, i think it is safe to say? diana: there has been a sharp deterioration in bilateral relationships, as you say, but we have seen signs over the last few weeks that both sides are willing to put at least a temporary floor under that deterioration. the biden-xi summit today is the
1:05 pm
pinnacle of that on both sides. although we will have temporary styling of relationships, the fundamental systemic differences remain. this continues to be an all out power competition that will be the defining for striving not just politics but the economy and markets. matt: put aside the geopolitical's like taiwan, south china sea. what are the business concerns, market and financial concerns that these two global powers are fighting over? diana: course, we have trump's trade deal, america urging that china abides by the terms, but
1:06 pm
it will be up to the u.s. to lower or abolish some of the tariffs. we will be looking at that as a follow-up from this meeting. the biggest issue is technology and access. you are familiar with china's dual circulation idea, which you can summarize as close off everything you can at home but open up where you must. china, certainly, has thrown the doors of its financial sector for legal and to foreigners and we have seen some key interest from wall street. but from the u.s. policymakers point of view, they don't want american savings to be financing the expansion of their key global rival. those issues need to be figured out as well.
1:07 pm
matt: is there a win-win possibility here, or will we see the end of the summit -- is upholding the status quo good enough? diana: it is very difficult to see a win-win. one of the areas where the chinese and the u.s. could cooperate was climate, is climate. what we have seen in terms of the achievement of cop26 is a small step forward. indication that the existing and aspiring superpower could eventually find a way of cooperating on key global issues, but i cannot think of any other one bar climate -- maybe terrorism -- where there is cooperation. matt: speaking of the superpower status, i'm sure you have read
1:08 pm
"2034," the novel, and it's a fiction, but since i have read that, hearing about taiwan, it is a notably scary situation then i would have thought of previously. is this an issue that is going to go on for decades? diana: well, actually, it is a key risk that all investors and business leaders should be paying close attention to on a two to four-year horizon. we have an entire team tasked at looking at the likelihood of a taiwan conflict. the probability right now military conflict involving the u.s. over a four-year horizon is over 70%. this is really the number one issue. matt: glad to get some time with
1:09 pm
you today. thank you for joining us. diana choyleva of enodo economics talking about the upcoming summit and the issues that biden and xi will try and deal with. coming up, we are talking satellites with terran orbital, a firm that has agreed to a $1.6 billion spac deal. that will furnish the company with about $400 million. we will speak to ceo marc bell, and an investor, jeff ransdell, about what the influx of cash means for the company's future. this is bloomberg. ♪
1:10 pm
1:11 pm
1:12 pm
matt: this is bloomberg markets. i'm matt miller. terran orbital, which built satellites for nasa as well as the u.s. defense department, is merging with a spac with plans to go public in the first quarter of 2022. the deal will value the company at $1.6 billion. here to discuss is terran orbital ceo marc bell, as well as jeff ransdell, founding partner of fuels venture, which invested in terran. let me ask you about your business, what kind of growth plans you have, and why you have decided to merge with a spac in order to raise the funds. marc: we looked at all the ways of going public. a spac had the most likelihood of closing, which is important because we needed capital. we will be building out a new
1:13 pm
facility in florida. the state is putting in $300 million to build the world's largest satellite assembly facility. additional facilities in california. matt: are you competing with the likes of elon musk and jeff bezos, or are you building stop for them to put into space? marc: we build stuff for them to put into space. everyone talks about launch vehicles, whether spacex or rocket labs, but somebody has to build those satellites, payloads. 50,000 satellites going up over the next 10 years and somebody has to build them. we are the largest independent manufacturer of satellites here in the u.s. matt: that is fascinating. jeff, we talk so much about spacex and blue origin, virgin, as well as nasa and the defense department. nobody talks about the stuff
1:14 pm
that we are shooting up there. is that what got you interested? jeff: space is definitely an investment theme for private equity in the public markets in general. the problem is always trying to find the right company that makes the investment themes you are looking for. terran orbital checked all the boxes. you are talking about a company doing business for real customers all over the planet. world-class teams. you are talking about five-star generals, senior people behind this company, world-class engineers building things that come out a sci-fi movie. and then marc bell. he was one of the reasons that we leaned into this particular investment. he has a legendary resume of success. it seems everything he touches turns to gold.
1:15 pm
this transaction is no different. matt: the other interesting thing about fuel venture capital that i want to ask about, there seems to be this bubbling economy in florida. there always was during the great space race, but is it coming back? are you seeing a lot of companies look to raise funds around the space coast? jeff: i think it is even more than that. it is all the way down south to miami. right now, miami is the epicenter of the tech ecosystem. we started this firm in 2017 in miami for strategic reasons. a lot of people thought i had lost my mind when i did it. fast-forward to 2021, it looks like we made some pretty good decisions. anybody who is investing in the private markets, especially in technology, are setting up offices. you have founders all over the world migrating to miami.
1:16 pm
a part of it is because of our mayor, francis suarez, working hard to bring all of this together, and it is here. i have been in miami for 21 years. never seen anything like it. it is booming. matt: let's talk about the technology you are building and what is capable of, marc. i first heard about smaller satellites that are capable of observing earth 10 or 15 years ago, from i think tim draper's crew doing some investment in that. what kind of satellites are you building, how will it change the way that we live? marc: we build all kinds of satellites, everything from communication to imaging, new imaging technology, hyperspectral imaging. lots of ways to image of the globe. there are things that you can do from space that were just not economical before.
1:17 pm
everything from helping with global warming to deforestation of rain forests to national security. there are norms amounts of uses to what we do. matt: you were a pioneer in small satellites. people from my generation think of these things as these giant vehicles that give us cable tv, but you are, for example, helping investors assess climate and the effects of that. marc: one of the companies that we owned was started by the pioneer of satellites. that is what started this whole revolution that you are seeing today. all of these satellites would not have existed if not for this venture. matt: let me ask you about this spac deal. is this an exit for you, will you stick with marc and terran
1:18 pm
and work in this area? what does it mean when they go public in 2022? jeff: we have a couple responsibilities. we have a holding period. we are in for at least six months. then we will distribute the shares to our investors. those investors will make their individual decisions. obviously, they'll be leaning on us for guidance on what to do. i will say this clearly right now on national television, but i think this is just the beginning of what terran orbital will be doing. let's just say that this is just the launch. the ceiling here is really endless. this is an incredible company with great people behind it doing incredible things. i am an investor for the long run. will not be selling my stock. matt: jeff ransdell, founding partner of fuel venture, and marc bell, ceo of terran orbital
1:19 pm
talking about the plans they have in going public and investing the cash. time for the bloomberg business flash. shares of casper sleep surging more than 90% after arranging a buyout that will and its tenure as a public company. duration capital management has agreed to take the company private for more than double of what the stock brought last week but also well below the $12 ipo price in 2020. bnp paribas is considering a sale of its u.s. unit. the bank has been a part of the expansion into the u.s., but strategic value has dimmed. bank of the west could sell for up to $13 billion as a whole. the head of general electric aviation is open to acquisitions. it could bring the jet engine maker new capabilities. ge said last week the company would be splitting into three
1:20 pm
with aviation being one of the standalone companies. the ceo says electric occasion technologies is one area where deals could bolster the company's portfolio. that is your bloomberg business flash. from new york, i'm matt miller. this is bloomberg. ♪
1:21 pm
1:22 pm
matt: this is bloomberg markets. i'm matt miller. let's get to something that caught my eye, the price of coal. prices in the u.s. central appalachia surge to the highest in more than 12 years. the global power crisis has driven up demand for the dirtiest fossil fuel that many had thought was on a rapid road to extinction. with demand surging, efforts to reach a deal to completely quit coal failed at cop26.
1:23 pm
higher prices mean u.s. consumers will certainly pay more for energy this winter and adds one more layer to the inflation story. look at that chart, just going up. rising commodity prices -- speaking -- it is time for our stock of the hour. it will be about chicken, i think. tyson foods is gaining after reporting better-than-expected earnings, thanks in part to surging prices for beef and chicken. kriti gupta joins us for more. kriti: we talked about the rise in amenity and inflation prices. matt: i don't always think of chicken as a commodity, but it is. kriti: for the consumer, not great, but it is helping tyson's bottom line. not only helping their income
1:24 pm
and eps, but the shares are the highest since 2020. compare it to their peers, and tyson has something special going on for them. not just their chicken, but beef. that has change the games when it comes to margins. beef shares of tyson has increased, even though all of their advertising goes to chicken. it is actually beef that is driving the train. matt: those volumes rose, prices jumped. does that payoff on the bottom line? kriti: it does. like every other company, it is dealing with freight costs, supply chain issues, but beef is a game changer. if you look at the margins for 2021, when you look at all of the other categories, beef is the only one that is rising. that is why tyson is outperforming right now. matt: i have one out of left
1:25 pm
field. have you seen the 1992 doc film? i think you should watch it. we would always watch in college. there is no voiceover, but they just show these life situations. one part of the film is a chicken factory. i will say, it is a little bit disturbing. it may make you think how much chicken you eat after you watch it. kriti: i am a vegetarian, so noted. it is economical for me. i will watch it and report back. matt: gritty grouped with our stock of the hour. -- kriti gupta with our stock of the hour. facilitating discussions among world leaders, the program includes topics like finance, trade, climate, cities, health.
1:26 pm
it is different from the g20 meeting that we just had or cop26, because it allows business leaders to get together and talk about these problems. maybe they will do a better job of solving them down the government leaders who converged at the aforementioned two conferences. quick look at what is going on in the markets as we go to break. the s&p is unch right now. this is bloomberg. ♪
1:27 pm
1:28 pm
1:29 pm
mark: president biden and xi jinping have plenty to discuss during their first virtual
1:30 pm
summit. still, the expectations for a major breakthrough are low. the summit set for 7:45 tonight washington time. relations between the countries are tense, there are disputes over taiwan, human rights, and the origin of the coronavirus. new research shows that if you cape -- take the common antidepressant prozac, your risk of dying from covid may be lower . a study published in the journal of the american medical association says about 9.8 percent of the 470 covid-19 patients in the study who were taking prozac died, compared to more than 13% of patients with similar characteristics who weren't taking any antidepressants. kenosha, wisconsin, the judge in the trial of kyle rittenhouse has dismissed account of possession with a dangerous rep and -- weapon.
1:31 pm
the teen is charged with killing two unarmed protesters last year at of black lives matter rally. rittenhouse still faces additional charges. the lawyers for the teenager say that he acted in self-defense. stephen bannon turned himself into the fbi today after being indicted on charges of contempt of congress. he has refused to provide information to the congressional committee investigating the attack on the capital. he's expected to make his first appearance in court today. global news, 24 hours per day, on air and on quicktake, powered by 2700 journalists and analysts in over 100 20 countries. i'm mark crumpton, this is bloomberg.
1:32 pm
amanda: welcome to "bloomberg markets." matt: as each day at this hour, here are the top stories we are following for you from around the world. after an on affected hawkish decision, cap acklin weighs in on rates. plus president biden is hoping to ease inflationary pressures when he signs the bipartisan infrastructure bill today after getting it through congress and the u.s. and u.k. expand their booster availability as new cases hit record highs. and austria faces another lockdown. all of that and more, coming up. amanda: a quiet, negative session across america. we have been in negative territory here. utilities is the single best performing group of that market.
1:33 pm
worst-performing, tech and consumer discretionary with a bit of treading water on the high levels that these markets sit on. you can see where the 10-year is sitting we have seen some action in the yield as we watch central bankers around the world talk about what they plan to do and what they are seeing with that potential disconnect between the path of interest rates moving higher in the concern some investors now have about the inflation we are seeing and for what it is worth, there has been a lot of chatter of late coming from bankers and others about when, how much to start raising rates. the bank of canada governor said that for their policy industry rates they will not raise rates until economic slack is absorbed. that we are not there yet but that we are getting closer, which is consistent with what we have heard elsewhere, including policymakers reassuring canadians that they are serious about inflation.
1:34 pm
that was the scene -- the theme this morning, the former bank of new york federal reserve president bill dudley echoing the same thing. have a listen. >> i certainly expect the peak to be well above what's currently priced into the finance markets. the crystal ball as cloudy as you get further out. amanda: i know we are all having the same conversations with people about the credibility of central bankers, right? they need to be able to reassure the markets that they see it, that they will act, but there is a bit of uncertainty around the credibility right now. matt: because what can they really do about inflation? the first issue is reducing the
1:35 pm
stimulus, pulling back on the bond buying programs that the fed and other central banks have been involved in to the tune of hundreds of billions of dollars. is that really necessary when you have got the economy zooming along and inflation rising? maybe not. on the other hand, raising rates doesn't really help you stop a supply constrained inflation. but it will bring the economy to a lower level. maybe a slower acceleration. still, gains, or even reversing the gains through contraction. i think that macklin and others like him are thinking about these two things separately. amanda: for sure. and it's interesting that you make the point about the fiscal side, the other piston not in their control but arguably stimulative, of course. infrastructure coming in in america. i want to bring in our canadian government policy rate policy
1:36 pm
correspondent here. what matt is talking about, people talking about mp3. it's not just interest rates anymore. it's q. week plus a fiscal piece. are the banks in danger of growing -- blowing their credibility on matching inflation where it is? >> certainly the bank of canada as you know is a single mandate central bank that just target inflation and doesn't have a dual mandate like the federal reserve, so they have been ahead of the curve. you could clearly see concerns over the last few weeks at the bank on the inflation front. they made it very clear that over the last month inflation is now at the forefront of their decision-making and they are thinking that inflation is not as high in canada as it is in the u.s. that it is approaching 5% and there are worries there about violating that kind of
1:37 pm
precise inflation mandate. the concern is not necessarily do we have control over global supply chains. i think they are looking ahead a couple of years and thinking that they want to make sure that the global supply chain issues driving inflation today don't get embedded in wage expectations and don't kind of have the secondary effects that turn into persistent inflation down the line. not necessarily looking at today's inflationary pressures. they are trying to prevent that from becoming embedded permanently. matt: how long is this going to last? i was looking at a house over the weekend that i didn't get because of a bidding war. i'm looking to purchase an electric pickup truck, like a lightning or a riviere income a but i known going to be on the waiting list for two or three years and will probably pay way over msrp for a mildly used
1:38 pm
vehicle instead. all of these things are pushing my pricing so far out into the future, it doesn't seem like a could possibly be transitory. >> well, that's right. some people worrying that prices will be higher in a year, they will bid up the prices even though they are already at a higher level so that is concerning. the bank of canada has been very clear, they are looking at two things. even though it is believed that inflation is transitory, they are looking at inflation expectations and wage expectations. if it sees people starting to expect inflation to veer away from what is historic in canada, 2%, or if they start seeing these pressures start driving wage expectations higher, you will see it more aggressively
1:39 pm
then people anticipated and investors are now anticipating a relatively speaking pretty aggressive bank of canada, five rate cuts over the next 12 months. two after that. sorry, did i say rate cuts? rate hikes, five over one year. seven over two years. that's relatively aggressive from the bank of canada. if we see wage expectations pickup, we might see that accelerate as well. matt: all right, theo, thanks for joining us, talking to us about central banks, the bank of canada, and the inflation issues everyone is facing right now. coming up, we will be talking about president biden's historic one point $2 trillion infrastructure bill. 500 and $50 billion in new spending today. we will speak to a former morgan stanley infrastructure ceo and he is one of the foremost
1:40 pm
experts on infrastructure in the united states. definitely stay tuned for that. this is bloomberg. ♪
1:41 pm
1:42 pm
1:43 pm
matt: "bloomberg markets this is -- this is "bloomberg markets." later today president biden will be speaking about and signing the recently passed infrastructure bill that he hopes will bring down inflation. the market though is raising inflation expectations. here you can see the rising breakeven across the duration. this is really quite striking, you can pull this up on the bloomberg, it shows that consumers are concerned.
1:44 pm
this is just one way of showing how concerned they are. amanda: the market is signaling its understanding of where inflation is going but there is another way that the president through the infrastructure could help with supply chain and it's an interesting look. look at the container freight rates. extending declines, suggesting supply chain problems may be easing as they track the composite container frame rates for eight of the busiest east-west trade routes. you can see it here, it's the longest streak in decline since 2018. it suggests that even as we are all getting hot and bothered on the budget issues, they may be beginning to wane. matt: let's hope they get a bit
1:45 pm
faster, right? i'm about to ship a 40 foot container from rotterdam to new york, and if it takes months and months, i won't have a bed to sleep in. joking aside, when i moved to germany a few years ago, a 20 foot container was $2000 and i have been quoted 20,000 for the same size container, now looking to ship things back. 10, 10, 10 times higher in just the span of five years. here to talk about infrastructure, but in terms of not my move but rather president biden's, a former morgan stanley infrastructure ceo. you will be going to the signing ceremony today and washington, d.c. and i know that you think that infrastructure investment is necessary. is this enough?
1:46 pm
>> thanks for having me today. it's not enough, but let me start by saying look, it's a huge win for the american people. we are able to pass one point $2 trillion of infrastructure investments that will benefit multiple infrastructure sectors across the entire united states, increasing productivity for years to come. i have to say that president biden may have achieved the unachievable, passing an infrastructure bill on a bipartisan basis when it eluded, what, probably the last four presidents. amanda: it exists, it is stimulative in nature. i want to talk about what that would look like because we know it because several dollars to transfer one dollar between several levels of government. it supports a lot of jobs,
1:47 pm
government jobs. will it be the right kind of infrastructure? is one thing to sign it into law, it's another to turn it into not just shovel ready projects, but the infrastructure that you need across america. >> you have one hundred billion dollars for roads and bridges, which we have been talking about with the surpassing bottle -- bottlenecks with a big impact on roads, bridges, and ports. it's a big impact. $60 billion in broadband. $50 billion for water, which is extremely important to avoid what happened in flint, michigan. cybersecurity is another critical element. we can go down the list. something you said that is very important, will there be efficiency and criteria that allow us to allocate the responses directly?
1:48 pm
president biden announced to the former mayor of new orleans is going to be coordinating this and i think that's an excellent choice. you need to have someone that came back from going through major issues like hurricane katrina and more importantly understands the basic needs of cities in the united states. i think he should do an excellent job. matt: the inflation problem, at first glance you would think all the spending would drive inflation. on the other hand, if things are made more efficient and can flow more smoothly, longer term we should be able to avoid inflation. that's the president's point, anyway. how do you see it? >> i think that both are correct. there will be a small regional increase in inflation but at the end of the day, 500 and $50 billion over eight years
1:49 pm
invested on a $22 trillion economy, that's not going to have any real material impact on inflation. it may have a regional impact when you start a project like this to hire people, but it will have some inflationary in the area. as you unblock the problems we have in our economy, you can improve roads in transport and so on and so forth, increasing productivity that should help inflation. amanda: we say infrastructure, people should hear traffic. fixing the road causes congestion while it's being fixed. we know that is a major reality. every city is crackling with how to improve infrastructure. is the productivity shortfall priced in? an understanding that that is going to come at a costs and
1:50 pm
human terms in the short term? >> there is an understanding and it has been priced in. the trucking industry, right? critical to the supply chain? it loses $70 billion every year because of congestion. that's the equivalent of 400,000 truckers being idle for an entire year. thinking of pandemic, we have an economic pandemic in the logistics system in the united states every year and that is what we are trying to do. remove the blockages so that we can have goods and services move much more efficiently. your container boxed coming from germany should not cause that mucks -- that much. matt: thank you very much. put in a good word for me. >> i'll try. [laughter] amanda: always good to have you. we will have much more on this,
1:51 pm
head to. stay with us.
1:52 pm
1:53 pm
amanda: this is "bloomberg markets." we are of course as the holidays quickly approach watching rises in covid cases. cold-weather in many parts of the world at this time of year, expanding booster availability is a priority as we see case counts on the rise. we have a senior scholar from the center for health security at johns hopkins bloomberg school of health with us. it feels tricky, we know that we are getting these seasonal increases. even the vaccinated, covid is rising again. not a crazy amount, but it's rising. where do boosters fit in?
1:54 pm
how much security should give us? >> the most important thing is people getting their first and second doses and that the vulnerable people get their boosters. since nothing lasts forever, we know that at some point an additional dose is going to be necessary for everyone. you know, the vaccine is still giving really good protection against severe outcomes, but i do think that people out there will be further reducing the risk, though. it depends on your life and the exposure that you have, but opening up the eligibility will allow people to make the choice. still the most important thing is to prevent severe outcomes and that's really the first and second doses. matt: i'm just visiting new york, normally i'm in berlin. i don't know how it is here, but we have a big contingent of anti-vaccine or's, people worried about bill gates controlling the vaccine industry
1:55 pm
, wanting to inject you with nano bots or spread 5g somehow. i'm not 100% clear on it. but the problem has led to a new all-time high in infections in germany two years after the pandemic started. in the surrounding countries you are seeing the same problem. austria is back in lockdown. what is leading to this kind of misinformation or are they right about the nano bots? >> misinformation really reduces trust and it's often caused by social, political, or profit efforts. it really makes communicating hard about how you need to protect your family. we did a costs analysis and i know you care about these types of things. 5% to 30% of non-vaccinations, costing us between $50 million
1:56 pm
in $300 million of harm per day. these things are not just words, right? it translates into real action and real costs and that's a big problem. matt: tara, thank you very much for joining us there from the center for health security. reminder, the johns hopkins bloomberg school of public health is supported by michael r. bloomberg, founder of bloomberg are -- bloomberg lp and the owner of this broadcast network. for amanda laying, i'm matt miller, this is bloomberg. ♪
1:57 pm
1:58 pm
1:59 pm
announcer: the most crucial moments in the trading day -- this is bloomberg markets the
2:00 pm
close with caroline hyde, romaine bostick and taylor riggs. denise: it -- caroline: this is bloomberg markets, the close. the trinity are back together and we are looking at treasuries falling further. investors manage strong economic data versus that threats of inflation. taylor on treasuries and all eyes on fed speak, we've got you covered. we are eyeing infrastructure with pete buttigieg as president biden tries to win back public optimism for spending aimed at repairing aging infrastructure. how can it alleviate immediate supply-chain concerns and tanks to? as


info Stream Only

Uploaded by TV Archive on