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tv   Bloomberg Markets  Bloomberg  January 21, 2022 1:30pm-2:00pm EST

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protection against both the delta and omicron variant. that's according to a study that looked at infections, hospital admissions, and deaths and thousands of u.s. patients. research shows boosters prevent at least 90% of hospitalizations from both, delta and omicron infections. just two weeks before the start of the winter olympic games in beijing, the capital reported a growing covid-19 cluster linked to imported frozen food and international mail. today, beijing reported 12 covert infections, bringing the total to nearly two dozen. while the number is negligible compared to the rampant infections seen elsewhere in the world, and a tiny flareup is met with aggressive containment efforts in the highly guarded city. a florida man is charged with human smuggling after the body of for people, -- four people including a baby and 18 were found frozen to death in canada neither u.s. border. -- teen were found frozen to
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death in canada near the u.s. border. police arrested a man nearby, driving a rented van with two undocumented indian citizens inside. today, pope francis vowed to get justice for victims of clergy sexual abuse. german authorities are calling for more thorough investigations after an independent audit found retired pope benedict xvi mishandled for cases of abuse -- four cases of abuse during his time as archbishop of munich. he recently updated the vatican norms to handle abuse cases moving forward. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. ♪
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>> welcome to "bloomberg markets." >> here are the top stories we are following for you from around the world. u.s. stocks seesaw and choppy trading as shaky company earnings and the prospect of higher u.s. borrowing costs fuel market jitters. at the same time, netflix plummets, on pace for its worst day in nearly a decade. this comes after subscriber growth missed estimates by a long shot. as some employees continued to work from home, we speak to the ceo of selena. offering locations that might become your new remote workspace. all that and more coming up. >> there is some distance between where we were and where we are today, in terms of the markets in 2022. we are continuing to see the red. the s&p has struggled to find any winning weeks this year and it's off to its worst start for years since 2016.
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the story remains the same, you are seeing the challenges not just with netflix, but other technology stocks. just getting more broadly speaking to the story of higher interest rates and what it means for corporate borrowing and what's been perceived as a lackluster earnings as of -- as opposed in the case of some, that's the recipe we've got. it's part of what gets things started this hour -- you have two views on the volatility in the market right now, seen in the market. bank of america strategists, writing rates are up and profit down equal about termination for credit and stocks. they see it hysterically behind the curve and think the bank should hike interest rates by 50 basis points at its meeting next week. in regard to equities, he said leading indicators for profit such as new york manufacturing activity seen here are starting to head south. which is a bad sign for highly correlated stocks. >> on the other hand, you have ubs, saying they are ready to
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buy the dip. >> the market is near oversold territory. we are looking for change and stability in the market going forward. we have become spoiled in the last couple of years, not seeing pullback to this magnitude. usually you see a couple of these 5% fullbacks. we are starting to see the market approach in oversold territory. an opportunity to start buying those steps. >> for a moment today it looked like by the dip was the right strategy -- buy the dip was a right strategy. there was a little bit of fomo, but it didn't last long. we were positive on the s&p and nasdaq composite. now we just went right back down. >> i think people are starting to talk. we have seen the comments making their own right now, what was happening back in -- the rounds right now, what was happening in the nasdaq and 2000
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-- in 2000. it was a long stretch of weakness. we are watching a lot play out right now. >> i thought the interview with erik schatzker was amazing. to be fair, jeremy is often fairly bearish. he was bearish last year before the stock market went up 29%. the one signal stocks may be near the bottom here -- joining us what that story is katie greifeld. what is it? kriti: the story is all about the options market and volatility market. we are looking at the vix. about 27% higher. >> not in the 30's yet. >> but the direction of travel is definitely higher, looks like it spiked. the vix tracked a one month contract, if you look at remote futures, the one month contract is higher right now. what that tells you is it is more expensive to buy near-term protection right now than it is further up the crib. that sounds about. but we have only seen this inversion happened about four
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other times in the past year. and each time, it's coincided with the market bottom. the fact that people are so nervous right now, maybe it is actually good news. we do have a lot of earnings to get through. still potentials, right at the end of the tunnel. >> was there anything you were hearing from the experts just this week? i want to go back to basically late november. as things continued. selling create even more volatility, when you don't see what matt was alludi that''d over and over again this week -- it doesn't help that we do have earnings. the earnings we've gotten so far have not been that great. you look at the banks, the airlines, you are hearing a lot of commentary about rising costs, rising compensation costs, fuel costs for the airlines. that hasn't been sort of the buffer to fall back on that
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earnings season has been for the last several quarters now. we will see how this checks out. it's interesting that you are seeing some of the heat come out of the bond market right now. yields taking a dive. you are still seeing underperformance. because the story has shifted from valuations to fundamentals. the fundamentals are a bit of a question mark for these high-growth names, like netflix. >> the forecast of 2.5 million subscribers, -- they forecasted 6 million subscribes, they have 2.5 million. the other thing i thought was interesting as peloton is trading below levels that it hit in 2019. so before you knew that everyone you know was going to be riding a peloton, it was worth more than no. >> everyone i talked to who has a peloton absolutely loves it. >> it's addictive. >> the problem is, it's almost a
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victim of its own success. the fact that it set the 2019 levels -- that it is at the 2019 levels is not great. that's even though a lot of the growth was pulled forward. i think part of the problem is that, how do you sort of transition those people who shared bikes, and to actually buying them? -- into actually buying them? >> whether you are on the bike are watching the markets -- or watching the markets, you are getting to work. katie, thanks. the story is also evidence of the ups and downs of netflix today, the shares taking a huge head after the company reported a weaker than expected subscriber outlook for its first quarter. the stock is on track for its worst day and basically a decade's time. -- in basically a decade's time. let's get more insights now. what was your reaction to what's happening in the business of netflix? >> from a business perspective,
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i think the biggest concern is whether they will be able to -- growth is not linear, so if this quarter is lower than people were expecting, will that rebound in the back half of the year in 2022? that is one thing people are concerned about. the way we look at it is, we are looking at sign-ups and cancellations, based on our data. one thing we are seeing that is actually pretty positive is a number of cancellations has fallen at a much greater pace than the decline in sign-ups on a global basis. i think that is great for the name on a longer-term basis. that's kind of what we are focused on versus the near-term. >> are all the streamers taking a hit today? in terms of competition, nobody has as deep a bench as netflix. you know, maybe hulu and hbo have a lot of hits or reruns -- but netflix has a huge also
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subscriber base. the problem is, there are new services. paul sweeney, who worked on wall street for 30 years, covering media, says the future is probably advertising supported streaming, rather than the subscriber supported stuff. what you think -- what do you think? >> i could see why he would say that. but at this point, i would actually argue that from if you are perspective, you would rather be a subscriber than have ads. people have gotten used to that. was going to be the differentiator is the type of content. netflix and the other streamers are investing a significant amount of money and original content -- from tv shows as well as content. on a global basis. they have localized content. as long as -- globalized content. so as long as the content remains compelling, not even squid games level, but compelling enough to get people
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to watch, they can continue to grow, without necessarily going back into the ad business, the way things used to be. >> i want to dig deeper beyond intangible headlines, like growth outlook. one of the great things about the bloomberg terminal is that it compiles all of the analyst expectations going forward. when you look at that metric, six years from now, there's an expectation on wall street that netflix is going to have close to 350 million subscribers around the world. perhaps another 50% upside from here. what i'm trying to figure out is -- what was the expectation? that they were going to grow to half a billion or a billion users over the next five or six years? >> i think the estimate on this was about 25 -- 20 to 25 million net adds per year. it puts a lot of pressure on the back half of the year.
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coming in in the mid to high teens, that becomes a risk for the longer-term outlook for netflix itself. i think the other issue is because, what does this mean for their ability to grow? their subs? because netflix has great content. everybody is creating this new content. but what's going to get that additional subscriber to join? that marginal subscriber? that's where the concern is right now. part of the issue as you grow internationally as the markets are not the same everywhere. so there's still weakness in latin america -- covid related weakness. prices in india. they need more pickup there. there is still a good camp, they can revise their growth to what they were expecting, but it's not going to be in a straight line. >> it's amazing that the international content translates -- who would've thought previously that a korean show
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would be so popular really around the world? referencing "squid games," which makes me feel a little sick to my stomach, because i watched the whole thing. it's rough. let's get to peloton -- i don't want to leave you without getting your take on this. as katie was just saying, people who have them seem to be fairly addicted to them. maybe they are not using them as much as they were in full lockdown -- but it's the subscription part of the business that generates more revenue than hardware sales. >> right. i think peloton has significant demand. people are literally stuck at home. then they had to -- how are they going to do the exercise? now with everything reopening and people being able to go back into gymnasiums, it's likely that people might let their subscriptions lag a little bit or it is harder to get that incremental build.
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they announced they are halting production on their bikes for a couple of months. when we look at their bikes url, we are able to see a decline in traffic. part of that is to be able to get back and stabilize their business before they continue to build it out. i think definitely, it is going to be a lot of a harder sell, because now you've got the incremental customer -- not just the diehard person. right now it is the gym business, how do you get that next person to become a member? >> i signed up for a bar class. ms. shaw, thank you for joining us. talking to us about the big dramatic drops today. this is bloomberg. ♪
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>> welcome back to "bloomberg markets." besides the choppy trade we are seeing in equities, it is also evidence that crypto has been hit very hard. at one point, bitcoin felt at a below $38,000. -- it is now sitting at its lowest level since august. at its peak in november, it's less 40% of its value, wiping out more than $570 billion in market value. roughly $1.17 trillion has been lost from the aggregate crypto market in total.
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that leads us to our stock of the hour today, which is coinbase. it is seeing its biggest drop on record. although the record isn't very long. it's been decimated and then some today. kriti gupta is here to tell us why. kriti: it is a risk off to a partially but it's a story that's been going on for a while now. you have largely cryptocurrencies taking a hit, but with a coinbase is of course having a major crypto exposure, getting a really big chunk of that. let's take a look at how it's been doing since its debut. a lot of the selling pressure has been accelerated in these last couple of months. this makes sense from even just a macro perspective. you do see money coming out of the value trade and tech trade. the piquant correlation is pretty strong. let's go once again to bitcoin -- the bitcoin correlation is pretty strong. let's go back again to bitcoin. it is a two standard deviation
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move, double the average move easy for bitcoin. that is having an adverse effect with cryptocurrency stocks broadly. in addition to concerns that perhaps the big boom -- the idea that retail transactions, which makes up around 85% of their revenue, that is sloping. take a look at what the revenue did in 2021, the most recent data we have, it is down to about $1 billion from as high as $1.8 billion in the quarter prior. to moving some of that seam, it begs the question, is bitcoin the best way to play that bitcoin exposure? the miners seemed to be a performing. >> the standard deviation charts on a friday afternoon, well done. right now, it seems like wall street expects the stock might
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go up 90% unless they revise those. i guess as people are revising expectations, what's happening with other stocks tied to crypto retina? -- right now? kriti: the miners is where you are getting the best exposure, blockchain for example. robinhood, those are the underperformers. over 1000% and returns. >> coinbase has only been trading since april of last year. kriti: yes. it's a technical chart thing. >> thanks. we will be right back. this is bloomberg. ♪
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>> as some employees continue remote work, hospitality company selina offers co-working properties across the globe. let's bring in selina ceo rafael museri. maybe you can talk about this
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big evolution of taking all these properties around the world and really targeting millennials. what was the passion points for you on this -- point for you on this? >> i think the picture of seeing a person -- a person on a computer on a hammock is doing well on instagram, it is a huge desire from the last seven years. the entire community of remote workers wrote a lot, and there was no one global solution to work, play, and stay -- to combine those desires. it is a very special generation with very special needs. our market research shows the lack of supply to meet this demand. so we launched in six
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continence. very excited. >> we were sitting in a surf shop in panama, working for a silicon valley company, making a ton of money. the problem is supply. how do you find and finance the real estate? >> so, again, there are ways to find growth. you can decide a structure and put a lot of your capital and energy on being a developer. you need to deal with permits, it is very difficult to be great as a developer and content provider. we chose to be experts in building a product that drives connection, content, and to not put all our energy and being a developer. so using existing hotels,
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30% of hotels around the world are not meeting their demand, and to use local real estate experts to help us to fund, negotiate and grow in those geographies. with no capital out of our own balance sheet. we are growing in six different continents, thanks to our incredible real estate partners around the world. >> $350 million of signed commitments from real estate partners. thanks so much for joining us, selina ceo rafael museri. helping people work and better places for the companies they want to. this is bloomberg. ♪
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mark: i am mark crumpton with bloomberg first word news. the russian foreign minister
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insists russia is not planning to attack ukraine at a press conference following a meeting with u.s. secretary of state antony blinken. >> you claim we intend to attack ukraine even though we have said many times this is not the case. mark: he also dismissed western hysteria over ukraine. secretary blinken and mr. lavrov appeared to have made an agreement to keep talking. bloomberg has learned the united states is weighing whether to evacuate family members of diplomats stationed in ukraine as russia amasses more than 100,000 troops on its borders. under the plan, nonessential staff would be able to leave voluntarily while family members would be ordered to return home. sources tell us an announcement may come within days. london's staff at barclays could return to the


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