tv Bloomberg Markets European Open Bloomberg February 9, 2022 3:00am-4:00am EST
$2.6 billion in stolen bitcoin and makes two arrests. francine: off the lows in terms of volatility for now. a little bit of intervention in china. filtering through to europe. tom: the stayed media tried to persuade invs.ors in china things are looking up. there is a debate as to who were the this is actually a bearish signal ultimately. whether it is a sign of desperation from the chinese state. the u.s. ended higher. europe ended flat. year to date down around 5% on the s&p. the euro stocks down about 4%. ftse a standout, gaining 2.5%.
a positive session underway. the ftse gaining .8% and the spanish ibex up. the to us is is much more to earnings which broadly have been positive. we had a number of beats. we also heard from the french central bank government suggesting that maybe markets are starting to price in a little bit too much hawkishness on the back of the e.c.b. and christine lagarde's comments. the story around bonsd and the selloff seems to be moderating now. the yields coming off the german bundle. 178 on b.t.p.'s. it was 250 a couple of days ago. down close to two basis points. we are watching the story, whether this can hold.
there is no point trying to mop up spilt milk. yields are going higher. a look ahead to the u.s. session. the c.p.i. data out thursday that will be important for investors. when did we break through 2% on the u.s.? brent at $90 a barrel. just a little bit of selling around the commodity space. down .5%. negotiations around iran and whether they can get more barrels back on the market. still some questions about that. the bloomberg dollar index, question marks as to why amid higher yields you are not seeing more of a bid for the u.s. dollar. that is still crucial. francine: it has been a nightmare. for dollar bull or dollar bears
because of what has been going on. sectors on the move. on the lookout for any financial move. technology on the way up. a good look at technology. gaining 1.7%. then we have media and some of the auto parts also on the rise. one industry group is seeing a little bit of pressure. if i move out of the way, you can see it behind me. it is financials. the only group that is down some .2%. over all we look at some of the media space. banks are so sensitive to what's happening with bonds. after a pretty volatile six to seven trading days. tom: a little pressure on the banking space. the number of guests that we have had on the show over the last few weeks say there is more to go with the financial sector particularly here in europe. in terms of some of the individual names, a big earnings
day, g.s.k. they are looking to split off and spin off their consumer healthcare business. they have been under pressure from investors to do that. they say they are on track to spin that off this year. currently gaining .5%. a beats for the fourth quarter. equinor, these energy companies had a solid year last year and they are passing that onto investors and are on track in the transition to renewables. akzo nobel, they beat in the fourth quarter. they expect costs to ease, inflation pressures, by the second half of this year. 3% gain for equinor. we want to look at what's happening. this touches on inflation.
this chart is really compelling, isn't it? it tells us the divergence between the market sentiment on inflation and the economists. the economists still forecasting a continued run-up in inflation. looking at that in terms ofst of uscpi. the markets are starting to get more comfort that inflation is going to edge down. this is really prom nation's capital here. the yellow line is showing the economic forecast. you can see those coming lower. it is crocodile mouth shaped. francine: you speak to a lot of banks or analysts or insiders including some of the central banks. there is not much conviction from christine lagarde that her own forecast, her own economist is getting it right. they have been guiltying it chronically wrong in the last 10
years partly because of how we measure inflation. it will peak and then come down the second half of the year. here is laura wright. hi, laura. >> conservative profit for the current fiscal year. krip-related destruction. an operating profit for the last three months of 2021. easily beat analyst estimates. glaxosmithkline plans to spin off its consumer health business. earnings are expected to rise 12% to 14% in 2022 on an adjusted basis. we'll be speaking to their chief executive later today. don't miss that interview at 12:30 p.m.
shares surged for mandiant. a deal would add to microsoft's range of products. fourth quarter sales beat estimates. they reported fewer customers than expected due to the spread of the omicron variant. sales were boosted by higher first a. a doubling in airport rides. that is the bloomberg business flash. francine: thanks so much. let's get into the key market drivers. a major question which is a question of the day. i urge everyone of check out our bulldogs which is just fantastic. are we in a bond market? >> there is not really a
standard definition is there? doesn't it feel like a bond market for sure for anyone who has been a bondholder. having to cope with this massive sudden rise in yields. the question is, is it going to last very long? the treasury yields to hit 10%. that is a big threshold people are bracing for certainly. i think we are starting to see signs of the selloff. today there is a bit of a pullback perhaps hedging ahead of the c.p.i. number tomorrow. that is going to be the big one probably. there is definitely a feeling now this bond selloff may not consider at this pace. yields are at levels where it could entice some back into this markets. tom: when it comes to european
peripherals, we're the 10-year is down five basis points. currently at 180. is there a level we're looking at that would be a cause for alarm, the canary in the coal mine? >> yeah, i think it is definitely the levels that we saw during the crisis periods that people are going to be watching out for. the more recent highs that we saw for italy during the 2017-2018 political turmoil period. these are kind of the markers that people are very wary of when it comes to the periphery. we're nowhere near those levels but something that investors have been keeping half an eye on. we're getting a bid in the periphery as well. a bit of a breather for bonds after a tumultuous last couple of weeks. francine: there is a lot of talk
among reporters. thinking where we need to go back in a similar situation. there is something else you picked up. the simple and hard question, is the dollar decoupling from treasuries? we're we're seeing that this time as well francine. there is another almost here playing into it. that is relative to other currencies. i'm talking about the euro and the pound in particular. last was seen as game changers, the e.c.b. especially for the euro. there is that offsetting effect of the euro gaining now that the e.c.b. is kind of joining this policy, particularly policy hiking cycle. that is at the expense of the dollar which is moving down a little bit. decoupling from yields.
there is absolutely still the spot of the federal reserve potentially walking into a policy mistake situation beyond the two-year period that they are looking at. tom: of course higher borrowing costs. what are the balance sheets telling us about that expense? >> there has definitely be favor for companies and corporates that have been able to return money to investors. several companies giving back to investors in terms of dividends and returns. investors love that of course. the flip side is any company that is cash poor is looking very, very bad in this environment not only because of the fact they are not able to give returns to investors but also the fact that their leverage exposure makes them vulnerable in an environment of higher yields and higher rates.
francine: welcome back to the open, everyone. 14 minutes until the european trading day. some of the chinese stocks filtering through to europe. we have so far a good earnings season which is also giving the list to a lot of -- lift to a lot of stocks in general. it is now on the back foot bringing some relief to markets that were a little bit on edge. tom: swiss bank has reported more than a 50% increase in full-year profit. total net new money for the year at 1.6 billion swiss franc. still less than generated in 2020. the shares up in today's session. it was a net income beat. net new money coming in lower than the previous year. how do these results set you up
for the year ahead? >> we entered the new year with confidence. we had a robust start into the new year in 2022 both from a revenue as well as from a flow perspective so we were off to a robust start. francine: talk to us about market volatility. how will you rerearrange and change things? >> market volatility i think is driven and i can only recommend, asset management, three drivers. there are central banks in the cycle and where are evaluations? they did not fit very well together. december and january frankly, the market is eye is right and
looking for -- is gyrating. we navigated the volatility well for clients and we think that this environment offers opportunities. tom: will that lead to net new money increasing? what are your targets trying to pull more money into the business in the next few quarters? >> first of all, we have now a very robust, strong organic growth. we remain very confident and committed to our annual organic growth targets and are confident that we have the product range and the reach into the biggest investment pools across the globe to deliver this. francine: if we come back to some of your strategies, it was our understanding that you were unable to participate in positive market developments in
in 2021 when it came to strategies. what held you back and how will that change going forward? >> what we do on the equity side, it is very highly concentrated. it is a significant quality tilt with very low exposure towards momentum and obviously some things over the last year were not respectful to that. we expect the markets to become more rational and sort themselves out. they will come more into demand. we are very confident we will reach the 4% to 6% target. tom: how much of a benefit do you expect to see from a higher rates environment? >> first of all we're an investment firm and not a bank. we may have different views on what interest rates do for us.
less than 5% of total revenues. don't look at us as the classical highly leveraged bank that thrives on higher interest rates. we would see some additional benefit from higher rates too on the investment side, we would look into how far interest rate also go as we offer a lot of -- fixed income products that actually help investors to navigate lower investment environment and we think the world in total will stick to the lower side of interest rates. francine: i have to say, fair enough, but at the same time you really make a difference between the adults that are investing and the children when interest rates go up. you can see more opportunities and also more large misses. is there a target -- is itly? anywhere else in europe that you
want to grow and how can you do that? >> our biggest focus for 2022 is the u.s. the biggest market in the world. we have made significant progress for further growth in the u.s. in 2021 by doing two things. first, we made the market entry for our income boutique and sustainable equities and we did an acquisition that we announced in december with u.b.s. and acquired their swis-based u.s. client business. tom: before we let you go, getting back to the macro and what's happening with the bond markets particularly around the periphery. is there a level in terms of the spreads, german bonds that would be a concern for you, sir? >> yes, of course.
we here in europe, are strong, navigating this peripheral risk but for the year ahead wwe do not expect it to be outs of control. the political situation in italy has been stabilized. very constructive on the periphery. francine: all right. thank you so much for joining us. vontaber chief executive officer. you have to come here to london next time. next up, first quarter cash inflows faces intense competition from blackrock and vanguard. the chief executive is up shortly. this is bloomberg. ♪
milestone. also thanks to great commercial momentum we raised $75 billion in medium and long-term assets which is actually a recall. all of the categories of clients, especially with our distributors worldwide and amundi has around 600 clients which are distributors around the world and the dynamics very important at the end of the year. of course one of the reasons being that the markets were still booming at the time. tom: you expected inflation to come in higher. are we now in a bond bear market? >> once again, i think -- i remain very optimistic for 2022 for amundi. obviously in this situation, there are actually diversifying to make sure we keep the savings
of our clients safe and these rotations are important both in emerging debt, for instance, or in value equities. anna: let me ask you about bond market movements. we have seen the markets adjusting quite quickly to this rate expectation in recent weeks. does the recent move in markets alarm you? does any of the spread that we're seeing in bond markets alarm you? >> once again, it is an important subject for the industry and for the property manager. i am extremely confident because what is important in this kind of situation is to make sure you diversify properly. two elements of reassurance, the positions of portfolio have been of short duration for a very
we will speak to barclays. the doj -- stolen bitcoin and makes arrests. let's go through the intricacies later. onto the markets. chinese markets getting supported. tom: the national team stepping in after the state media appealing to investors saying that the picture is not that bad, look at the equities again. concerns around the trajectory of growth. maybe that will be supportive in the next month ahead. a decent session overnight in the u.s.. teachers are pointing to gains. assorted session. currently up 1% across the benchmark. need to shift away from the monetary policy and focus on earnings which have come through pretty well. a decent set of earnings.
that is supporting these markets. the french bank governor also stepping up with some comments. seeming to want to soften the edges around the rate hike. our team is saying that the trajectory of yields is high but for now you're getting a bit about bid. a bit of a calm across the bond markets. the ftse is up. the ftse 100 is the outperformer today gaining around 2.5%. let's look across the sectors. sector by sector. every sector was in the green, let's see if that continues. two sectors in the red. banks are down. as francine was saying, that may be to the fact that yields are coming off across the edges.
but see what changes on the back of the cpi that comes out. technology gaining strongly in the session today come up more than 2.5%. autos and parts are also above 2%. a decent session across the sectors. this is about earnings as the inks around the bond market starts cheese. we have a terminal chart that shows some optimism, by jp morgan. they say this is now the winter season for stocks. jp morgan stays they saw a signal where they jumped more than 50% above their monthly moving average. for them, they say that is a clear signal to buy in stocks. you can see that call in january 25, that is where it came in. they think it is an opportunity to get into stocks.
this key marker has a rep failed. francine: what they call that is a bulletproof indicator which is a bold call. they're looking at moving averages. your chart is wonderful. if you have them rising more than 50% on a one month moving average, which it did, jp morgan says by some stocks. joining us now to look at his bulletproof indicator is the head of european equity strategy at barclays, emmanuel cau. it is good to look at indicators of an opportunity, is or anything in the market right now the you think signals were sent to come for stocks -- signals more strength to come for stocks? emmanuel: [indiscernible] we are seeing a lot have left the market.
across the capitalization of january. [indiscernible] at the same time, fundamentally we do see earnings acting as a support to the market. a lot of stress coming into markets. we see hawkish mess is priced in. we do believe that earnings are a bit short. we're expecting them to step in on this progress. tom: how it distinguishing to be across these earnings? how much of a case of a lot of the sales are being pulled forward as a result of the pandemic that will start to ease as a theme in the quarters ahead? these margins that have managed to maintain will be more challenged. emmanuel: so far, the takeaway
is that demand is there, demand is strong. companies are looking at cost. thanks is not going away in some cases, is widening. that is a key concern for the market, some of these over earnings and will be held by that supply disruption. if you look at 2020 two, of course earnings have to accelerate. you don't get that many times is your career. -- in your career. this is lower than usual. at the same time, to be above track, there is something wrong here. without a earnings, they can go
more than the market expects. francine: talk to us about the correlation between bonds and stocks, especially when you look at treasuries, it is not like it used to be. this ever go back to a pattern like we saw in 2010, 2015? emmanuel: the speed of the moving has been a key pressure point. we had dressing rates. what you think in the market is in valuation adjustment [indiscernible] europe is doing better than the last. the question is across sediments that would act. we think of things before, a lot of hawkish this is priced in we
do believe central banks have more optionality. we might be in the position where they will not deliver. it may be of relief to the market. equities can perform in the rates can go up for the right reasons. giving a bit of support to the market to a build this. tom: help us understand where we are in this rotation. emmanuel: we think we are quite advanced. we think the bulk of it is gone for now. the next few data points will be very important.
i do believe that in a matter of weeks, a significant shift away from growth to value and to some extent, if it stabilized [indiscernible] what is a clear inconsistency in the market is a lot of the signals with equity markets of the highs, the same time investors buying in risk like auto, commodity, something has to be [indiscernible] [indiscernible] this can be sustained. tom: really important distinction there.
he stays with us. coming up. the eu digital chief shrugs off threats to leave europe saying ditching instagram would free up 20 minutes of the day. i thought it would free up a bit more of your day. francine: 20 minutes, she has at accounts on instagram. for some people, it may be two hours. my return on investment is not something i would buy into. it is so poor given the amount i spent on it. tom: follow her. a great account. forget the commissioner, francine is all over it. stay with us. this is bloomberg. ♪
points. that is the shape of play across the markets. francine: the argument between the facebook owner meta and europe is heating up. no desire to withdraw from europe after morning that data transfer rules posted update -- pose a threat to update. ditching instagram would free up 20 minutes a day for the commissioner. >> i am on instagram, if it does not work anymore, that would give me another 10, 20 minutes a day. it is for every business to consider if they want to do business in europe. this is not for us, this is present. -- this is for them. europe is a very attractive place to do business. i have learned in politics, you should never threaten to leave, you should print to stay. francine: 20 minutes a day, i for like it would free up half my day. tom mackenzie says, you should
rewire your priorities inducible else more fruitful. tom: it is the real that are so addictive. hard to put yourself out. francine: for more on this, let's bring in murder -- maria tadeo. no matter the threat, has everyone talking about whether they could live without scrum or facebook. -- without instagram or facebook. maria: there is a debate about whether we should ditch social media or not. the commissioner, this is the head of digital, she's not worried. she said, if there is no instagram, that is fine. the reality is that this is a spat that is getting very nasty between facebook, meta, and the european union. or context, this goes back to 2020, they said they had concerns about the way that data is transferred and they wanted
changes made. there has been a back-and-forth as to what we do with this transfer. facebook did say if we are not able to continue to transfer data, will not be able to operate and that would affect instagram and facebook. this is getting a lot of heat in europe, government reaction to saying, if you want to leave, the door is open. this is not where there are doing damage control, we do not want to leave, we want to invest but our concern is the way that we transfer data. we should have a can -- a talk about that. the problem is for meta is that it has the european regulator that holds the cards. tom: that is software and digital, what about hardware. -- what about hardware? semi conductor, chips. maria: if you look at the numbers, the estimate as to how big this chips act could be,
this is huge. the idea behind it is that the european union want to do more when it comes to chip and semi conductors and bring it back to the eu. they say that they want to play, the chips will not count for 20% of production. the number is astonishing. a lot of this has to do with politics. they want to break away from this dependency and make it here. there are real concerns about state aid and who will provide the money. public, private, how do you get them to work together? 10-year seems like a lot but when you look at this kind of money, it is not a lot. tom: maria tadeo on the ground without plan from the eu in response to meta. emmanuel cau is still with us. a part of that response from the
eu is a reflection of what is happening in china. can you follow the policy in europe? would you invest in the semi conductor space on the back of this? emmanuel: long-term is supportive. the eu wants to increase spending on dig light is aviation -- in digitalization. we do believe that the profitability is strong. the sector has been caught by this. from here, after the rotation, they should prevail again. the market should make a big difference. it is very much a liquidy concept. it is quite expensive but has
strong earnings. francine: when is the right time to start positioning for a recession? i don't know if it can come from a mistake or if that is what we are in the cycle. emmanuel: the curve is flattening. clearly, this is something that usually signals growth. the curve flattening is not an indicative of it. what would be more is the curve adverting. every time it inverts, it is followed by a recession. as for the curve, it sent a strong signal.
we do think the curve will flatten. a recession is not the cards until late 2023. tom: where is your preference across the european space this morning? to see that sustaining itself, to look at other jurisdictions? emmanuel: u.k. has been beneficial. there is a low tax. [indiscernible] there is a lot of value. i think the sunday to look at. if the ecb is coming to the rescue again, with very hawkish
francine: welcome back. we're seeing a bit of a lift in european stocks. the ftse 100 is gaining. the picture is supported from china, that is lifting chinese stocks. that is also giving hope that tightening will not hurt everything. tom: i'm going to mention that bitcoin is at 43,000. have a crypto story about crypto stories. u.s. department of justice seized about $3.6 billion in bitcoin. what he calls the largest financial seizure ever. the story is amazing. the tokens were stolen during a hack of the currency exchange.
the justice department says they arrested two people. joining us now is our asia crypto respondent. break down the deep tells -- the details. it sounds and norma's for the doj. -- it sounds enormous for the doj. >> bitcoin was worth about $71 million in 2016. crypto has risen so much in price and spend that the total amount was $4.5 billion. the justice department sees $3.6 billion. what this reminds us is that even though there is a lot of discussion about illicit activities using crypto, crypto is somewhat recoverable, more so than cash may be. it is more traceable. francine: this is amazing.
i hope we can put the picture up for our viewers. a surrealist artist would touch her hands and boasted that she had more pizzazz, just on that note, i find it wonderful. tom: the top line is fantastic. they are a bonnie and clyde for the crypto age. tell us more about this couple. these allegations are still allegations, they have not gone to court. what we know about the company -- about the couple? >> they were clearly interested in crypto. the people that were involved in , they were hiding in plain sight. there were talking about crypto and giving presentations, talking about social engineering , they were living a decent life
in the past three years. they had gotten some of the money out into gold, into gift cards, clearly, they did not get it all out. they definitely seem like a colorful couple. francine: thank you. this is an amazing story. repercussions for how some things get regulated. that is it for the european market. up next is "bloomberg surveillance: early edition." this is bloomberg. ♪
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>> i am on instagram. if that does not work anymore it may give me 10-20 minutes a day. >> we cannot have the same lockdown as we see in the mainland. not possible. >> there is a lack of appreciation for how dangerous the market is. >> this is "bloomberg surveillance: early edition," with francine lacqua.