tv Bloomberg Markets Americas Bloomberg May 12, 2022 10:00am-11:00am EDT
>> from the financial centers of the world, this is bloomberg markets with alix steel and guy johnson. >> 30 minutes into the trading day on this thursday. here are the top stories we're following. crypto crash and a tech wreck. a wave of risk and coming from crypto while the nasdaq 100 reaches.com implosion levels.
some of the world's biggest companies get dragged into the rout. and a spac's butter. big banks pull out of the spac craze. we speak with mark franklin, someone who is bullish on the space. welcome to bloomberg markets. 3815 was the level we talked about earlier. guy: we blew through 4000. this is an equity market looking for a way out at this point. we will talk more about what is going on, what is leading, what is lacking, where we get our cues about where we go next, but first some details on the mortgage market, because this will be pivotal for the direction of travel. u.s. mortgage rates rising to 5.3%, the highest level since
july 2009. alix, i will give you the opportunity for a victory lap here. what was it ? alix: 2.85% was my 30 year fixed. i got that from february of 2021. in one year, we have come 300 basis points higher. that's tremendous. that's a couple thousand dollars worth of extra added to your mortgage. guy: absolutely. what is interesting is how quickly this will have an effect. you deal with much larger mortgages. over here, people regularly take out two-year, five-year, mortgages. alix: that is unheard of. and you can kiss the refi market goodbye. it brings us broadly to the question of the day, the broader risk question, is this 2000 for
tech and crypto? is this what we are on the precipice of? we are joined by romaine bostick and ed ludlow. romaine, it feels like the latest wave comes from crypto, but now becoming a broader selloff. what is your take? romaine: we are not quite at 2000 yet but when you look at the key technical levels, where we have come and where we are potentially getting, the general sentiment is there is not much of a poll, so you talk about, is this drawdown we are in the midst of with the nasdaq 100 or the s&p 500 match up with what we saw then. not quite, but getting close. and we do look at oversold conditions, technical measures like how many stocks trading below the 200 day moving average, we are low but not
where we were during the dotcom bus. guy: when it burst, it hit san francisco really hard. apple down 22% today. how far could this go? how much fear is there where you are? ed: in five days, we have gone from a conversation around whether it is the bottom to have we even determined the direction of travel? you look at citigroup strategists and their note that tech is an area you don't want to be now. there's no evidence that yields will stop rising or little evidence they will stop rising beyond where they are. valuations have come down. off the record highs we saw in november, but still at highs, and remember, you pulled up the
max chart for the nasdaq 100 on the bloomberg and the direction of travel on the nasdaq 100 now versus march of 2000 looks pretty similar from what we are seeing in a visual and numbers perspective. alix: to that point, the dot-com bubble was impart part macro but also idiosyncratic in some ways, some companies that just didn't make any money. the case of apple and google is different from the likes of carvana. what are we learning from earnings season in terms of where the floor is for some of these? ed: apple is a case in point, down 20% from the january peak, and other guests on bloomberg have talked about how you want to look for companies that have a quality balance sheet, predictable earnings. apple's selloff is quite recent. if we look at the chart, we've lost a lot of value over the seven days -- the last seven days or so, but if you look at
the constituents of the nasdaq 100, it is the stocks you would expect, higher multiple, long-duration software stocks. we know the story. higher rates are coming. those discount the value of future profits. romaine: it isn't some of those higher multiple stocks, but you have to look at apple, alphabet, you might as well throw meta in, tesla, still talking about companies that have reasonable growth. many with the exception of tesla have pretty consistent gap earnings and they have massive balance sheets so the fact that all those are 20% or more below their all-time high speaks volumes about the market. the chart you are pointing out when you talk about those levels coming down, some people would look at that and say that is a silver lining. we are basically back, the mean reversion, back to longer-term averages, but other people say
it needs to go lower for them to feel comfortable coming back into this market, and ec that reflected in the volatility here. that realized volatility has not gotten back to the levels we saw in 2000 -- not gotten as high as the levels we saw in 2000 and think about the selloffs we had in 2016 and 2011 we had. we have not approach those levels and a lot of people want to before they go comfortable reentering new positions. ed: do you want me to jump in and defend myself on that? guy: i have to say, i saw you on twitter earlier on. you thought this would be a punch up. you are going to defend yourself. go. ed: i think coming on the show with you, guy and alix, we talk about a narrow focus, how we volume these -- how we value these stocks? take that out of the equation.
look at earnings season. apple and disney two cases in point. disney learned with the shutdowns in china covid is not going away. it is leaving profits on the table in its parks business, which was a bright light in its typical outlook. so forget where we are going for the world is still hard. we are talking about the tailwind of covid at the same time we are saying recession risk is a headwind. very difficult macro concerns. guy: let's talk about what is happening at a granular level with crypto. we know that crypto and tech are heavily correlated. we have seen what has been happening, understand that relationship. what i am now trying to understand is, as people are selling one asset, are we getting contagion out of crypto into the tech space? and do we end up with a bit of a
loop here between those two? romaine: i think you are getting contagion in sentiment now, and there's a big overlap between the types of investors we saw in the crypto sphere and those we sign those tech names, particularly the more speculative tech names, and as crypto comes down, you get more of a shakeout in institutions and retail investors, that has a sentiment drag on the broader market and other risk assets. i think we are already seeing that and we've heard from a few people already who pointed that out, that it is not just that correlation in itself, but when you can plot on a chart, but that sentiment, the feeling that if one thing gets hit like that, then everything else has to go down with it. ed: romaine is completely right. we talk about risk off, we are talking about cryptocurrency, avoiding bitcoin. what is interesting as we track the data is that when we see selloffs in equities, that correlation only increases. investors have the same mindset about both right now, especially
when things are on a downward trajectory. guy: friday the 13th tomorrow. i will just point that out. romaine: i did not think you were superstitious. alix: he is not but i am. i think tomorrow is scary. guy: 12, today looks pretty scary from some perspectives -- well, today looks pretty scary from some perspectives. guy's, thanks, romaine bostick and ed ludlow. talking about the swiss franc hitting parity with the u.s. dollar sitting here in london, i'm worried about where the pound is going. there's a lot of chatter about whether the pound goes to parity with the dollar. euro-dollar getting -- hitting 1.03 earlier on. the dollar goes from strength to strength. where does it stop? i am not sure at this point. we continue the conversation around tech next. how worried should you'd be --
alix: off the lows of the session, the nasdaq 100 plan on the day -- 100 flat on the day, but overall down 25%, 30% on the year. is this two thousand for tech and crypto? we ask victoria greene, cio of g squared. is it? victoria: absolutely. i have -- i hate to pick on the cathie wood-esque stocks but this is what it is about. those are the stocks getting it the hardest. you look at, say, coinbase, peloton, zoom, those pandemic darlings that are now pandemic duds. those are being hit the hardest and definitely the baby is going out with the bathwater. you talk about apple and amazon
and those that have billions of earnings and cash flow on the balance sheets, but it is certainly a bubble. crypto is a bit scary now. some of the selloff has to do with coinbase saying everybody there might be an unsecured creditor, that may be causing some forced selling by people panicking out of coinbase but don't know where else to go so they are selling. guy: how do you position into this? what was the selloff for you into this as you came through the new year? how are you position? did you expect anything like this to be occurring? victoria: no. i wish i could have called a massive rollover. we were a little bit bearish, value tilted, but we did not think it would be as ugly. i will say that the fed has been wrong as of late and, the poor fed, they never get it right. they are either too early, too late, don't communicate well.
they are never in the sweet spot of doing it right. value is where we want to be. we are watching is whether we will see that 3815 hold on the s&p 500. the mantra now is quality and cash flow, dividends, balance sheet, and boring. now we are trying to survive. at the end of the day, if there's a recession coming, it will be more mild. generally speaking, there's strength in the u.s. economy, but i also think the world is shrinking. you have russia coming out of the market, you have this commodity pressure, and there's just generally so many headwinds. typically equities can rally up that wall of worry but i think there's too much. and earnings season didn't say much even though you had pretty solid earnings come in. i don't think the fed are coming to save us. they have to hike, so i think people look at that as this outlook of, the market is terrible, the fed will come in more dovish. look at the numbers on the inflation print. they cannot. the fed is not saving us here.
alix: it seems like that put is well, well gone. let's talk about the capitulation scenario. many are saying we have not seen it because we haven't seen broad-based selling. consumer staples is holding up well in comparison. waiting for a capitulation that will hit value hard, how will you manage it? victoria: they will roll over. i don't think they will rollover is harbored that is what we want -- rollover is part. that is what we want. and i percent down day, equally all of our capitulation moment. i still think that is the best part of the market with everything being dragged down. i want to own the best debris that i can. i'm avoiding what i'm calling landmines, so let's make sure we don't have peloton or a coinbase in our portfolio that will just go terrible. there may be down days but we have protection in quality and
dividends and, again, this is a headdown, survival type market, and eventually we will be a buyer. we are all sitting around waiting for capitulation and there will be a buying opportunity at some point. guy: what would that look like? i will point out that tomorrow is friday the 13th. what does that look like? you are sitting on cash now. you sit on your hands? what do you do with that cash? you do anything with it at this point? what kind of opportunity do you think will open up in front of you if you have cash to deploy? victoria: you should be sitting in short treasury bills because with inflation they are somewhat attractive. and not to be that boring person but there's nothing wrong with a little dollar cost averaging in a downward bear market. very hard to know where the bottom is. i think you just need to call a capitulation day on friday the 13th. everything will be down 5%
tomorrow, them will be done, call it, and rally off that. you have to be careful now. the important thing as investors understand their cash flow needs. if you can wait it out and be patient, you know this will come back. i say the four most dangerous words to investors is "this time it's different." it never is. alix: before you go, your take on the crypto contagion and whether we see some deleveraging in the crypto space affecting other assets. walk us through what you are seeing there. victoria: everybody is trying to understand what crypto is supposed to do for us. it was supposed to be an inflation hedge and that's not happening. you have some people kind of got checking what is crypto supposed to be doing in my portfolio, and if it has the same correlation and volatility with the nasdaq, why am i not just in the stock market? you know, what is this asset class? people are grappling with that. and it is a fun trade.
everybody loves a fun trade and the fomo had a lot of people moving into crypto with all those crypto millionaires, maybe now crypto thousandaires at this point, but what is it supposed to do? the blockchain is obviously a valuable technology from infrastructure to industrials. there's no doubt it is a fantastic -- sorry, i had a kind of brain f -- fart there -- but what is crypto in your portfolio? not an inflation hedge. i feel you can definitively not that one off your list. guy: we will leave it there. good conversation. victoria greene of g squared private wealth. gamestop now trading again, up by 22.65%.
guy: apple is down 27%, trading $144, the january peak. technology stocks are getting hit and hit hard. apple may not be at the speculative end of the story. do you want to get in here? this or worse to come? daniel flax, neuberger berman, senior research analyst, joining us now. apple is down 20%. during the dot-com boom, it was down 80%. any chance that repeats itself? daniel: unlikely, and relative to the past, we have a more diversified company with more revenue drivers, so the iphone franchise we have seen is healthy, it is durable, services has very good growth, you've seen strong performance in the mac with the new silicon, the
wearables opportunity in many ways just getting started. there are clearly issues in china from a demand standpoint. the supply chain is hampered in places. the invasion of ukraine and weakness in europe is a potential factor but we are buyers at the current level given what we think will unfold over the next several months and year. alix: you think you would sell apple if you need to find losses elsewhere. daniel: we are getting close to a bottom and the risks around consumer demand, inflation, higher rates are real, but what we are focused on is trying to think through where is the innovation, the growth? if we look at apple, it is more than a company. it is this bigger ecosystem and you can see that with the
developer community. apple paid out over $260 billion to developers since opening the app store, so innovation, the ability to empower others to create and flourish will matter more over time, and that happens -- that helps contribute to the attractiveness of the stock price at current levels. guy: is apple value tech? is value tech an oxymoron or does apple fulfill that role? daniel: we spend more time focusing on the innovation and -- to translate into strong topline performance and significant free cash flow generation, which we think the market will value over time. as we look out with apple, for example, the developer conference next month, likely a new iphone and several new products at the call and into next year, we think that will generate strong topline growth, strong free cash flow generation, which the market
will ultimately value and result in a higher stock price over the next one or two years. alix: before we let you go, the nasdaq moving into positive territory, up .4%. what else can you buy on sale now? daniel: we are buyers of google, which we think is durable. research has strong growth prospects and the cloud business is just getting going for it we like -- just getting going. we like oracle, providing solutions in areas like drug discovery, climate, automobiles, reducing fraud. we like qualcomm as an enabler of 5g and the internet of things and continue to like amazon where clearly there are pressures but we see growth in a ws and the e-commerce business. guy: thank you very much indeed, daniel flax of neuberger berman. the nasdaq turning positive. coming up, from red-hot to ice cold. that's been the story of spac's
alix: we are one hour into the u.s. trading session. looks like someone is buying the dip. the nasdaq 100 is up on the day. abigail doolittle is tracking some of the moves. >> the s&p 500 down 1.5%, the nasdaq down more. now you see small moves. basically, fluctuating now. the nasdaq up ever so slightly. we will see what the day brings. one possible tailwind is you
have the 10-year yield down five basis points, meaning that evaluation is of less concern, taking pressure off some growth stocks. one pressure that continues, though, the bloomberg dollar index, the dollar rising for the sixth day in a row, and on the year, the 10-year yield up 1.35%, helping the dollarized. the bloomberg dollar index up or than 6% on the year, the best since 2015, not healthy -- not a help for risk assets. and it is hurting some of the growthier indexes given that, again, valuation, if you look at discretionary communication and technology, 50% of the members within these sectors are down more than 30%. that's a brutal bear market for these key heavyweight waitings to the s&p 500 and the nasdaq 100, and financials, interestingly, probably having to do with the yield curve
threatening, 37% of those members are down even though yields themselves are higher. that yield curve flattening not helping out banks in some ways. one sign of hope here, because of course we have this back-and-forth action, is the ark etf, the poster child for growth and momentum, down, down, down, but looking at the inflows , there are did buyers, talking about -- there are dip buyers, talking about coinbase, tesla. i don't know if netflix is in there, but it is now at a valuation less than 15 times of its forward pe, so eventually you will have value name investors looking at these if they think the business could be strong for the future. in question in some ways may be for netflix, but interesting, got. guy: value tech. i wonder how often we will hear
that phrase. abigail, thank you very much indeed. a couple related subjects -- spac's, of course, red-hot for a while. companies use them as a way to get listed on exchanges without doing the traditional ipo. it felt really hot for a while. now a spac index, which tracks spac's after mergers, is down 59%. 64% down, but that is not even off the highs. joining us to talk more about where this kind of concept goes next and the regulation around it, which is tightening up, ed hammond, bloomberg deals reporter, and martin franklin, api co-chair. ed: martin, you are mr. spac. you have done more than anyone else over a long time, but you have been a critic of the model, how it has been used, some companies that have gone public via spac. as you look at what is happening now, do you feel vindicated by
that criticism or is there more to come? do you think it will get worse? martin: look, i find i -told-you-so's a little boorish, but i told you it would end badly and now it is. the reality is we are not finished. we have a lot of companies that went public that had no business being public, that generated no cash flow, and with the collapse of their equities, the opportunity for them to raise additional capital will be far more limited, so i think there's another round of, if you like, revaluation that will take place and a lot of these companies will disappear. the spac model itself in certain formats makes sense. i morphed my model about 10 years ago. i went from the model that you see the last couple years to a much more aligned type of model
where you had no free shares, your investors were not arbitragers trying to buy a two year cd with some upside. these were investors looking for real vehicles to buy real companies. some deals i have done over the last 10 years are for companies that have combined to $4 billion. they are real, go through the cycles of all the other public companies out there, but they truly created unique opportunities to go public in a better model, which is at the end of the day what you want for a spac. you want a spac to be able to give a target company, for one reason or another, an advantage going public over a traditional ipo route, and we look to to do that are profitable. guy: we have seen the banks react to what has been going on and the sec's attempt to enforce greater disclosure around some
of these spac deals and enforce the people doing the sponsoring of the spac's and indeed some of the bankers involved to have some liability for projections that may or may not come to fruition. how damaging is it to the spac business that banks are stepping back and seem to be stepping back wholesale? we heard that goldman is getting out of it, bank of america and citi have telegraphed that process as well. martin: it is funny, but without naming names, one or two of those banks i went to 15 years ago said they would never get into the business, then had departments of 50 or 100 people in the bandwagon. the reality is it is a misalignment of incentives. the banks were selling a two-year cd with 2.5% front-end load as a bank. that is good business. the buyers did not care because they were buying cash with optionality because they could get the money back even if they voted in favor of a deal, and the only people -- and the
sponsors obviously just wanted a deal because they had so much money on their free shares -- at the end of the day, the people who could've put a brake on it where the people who bought the spac's, the pipes, because they are the determiners for evaluation, and if they said we are not buying this because it is mispriced or the wrong company, a lot of these deals would not have occurred. guy: you mention one company that went public via spac years ago. yesterday, you and your chairman filed something that give you the option to do something more active in that stock, potentially taken private. what can we see there and do you have plans to take a private? martin: the 13-d speaks for itself. we filed because with what is going on in ukraine and uncertainties in europe, the
company was in our view mispriced and we wanted to review our alternatives and, given our filing, we never wanted anyone to look back with hindsight and say we should have changed it. so it gives us room to have conversations. i would not say any deeper agenda than that other than making sure we stay within the safe harbors of the law. guy: it is guy in london. can i take a step back and get your perspective on what is happening? you said this was effectively inevitable, what is happening in the spac landscape, but what do you see in valuations more broadly? is this a market that will come down and produce much better opportunities? how are you thinking about the positioning -- the position you will be taken going forward and when do you think those opportunities will emerge? martin: it is a great question. the reality is the time has been going in for a very long time.
having $6 trillion or so in the system because of covid and everything else, it just created a bubble, in my view, speculative bubble, whether it be in crypto or equities, and as the private moving out -- and as the tide is moving out, like all tides, it moves out and a little in, but it is moving out, and valuations will come down, opportunities for people like me to buy good businesses at reasonable valuations, those days are coming, and it is gone like this through the history of time. we always wonder whether -- whether we are in the seventh inning or the ninth-inning. i think we are in the ninth-inning and i think is the cycle starts again, there will be opportunities that come around for people who are true value investors. guy: can you quantify that a little bit for me? talk about the tide going in and out a little bit. is it a little or is it a lot? how out of whack to you think valuations can't? martin: again, it is -- it
depends on the pocket you are talking about. businesses that were trading 25 times revenue are not sustainable unless the businesses are able to, you know, back up the story, and most of them do not, so we got pretty far out of whack. there's a lot of bloodletting in reality that's come into the system. i just don't think it's over. you look at the spac world, you have a lot of what i call the $10 to two dollars club, and i think that speculative period is over, but the question is, what are those companies really worth? so i think there will be opportunities that will come out of that, but it got very inflated and now it is becoming better, but for good companies, you know, a lot of good companies maintain i would say relatively sane valuations, and
obviously they want to climb with the same kind of variance as some of the more speculative stuff. guy: martin, you're talking about opportunities. i know from your history that when things get cheap you like to be in a position to buy. can we expect you to raise capital for another vehicle, whether that's a spac or some different format of taking companies public vehicle? martin: permanent capital vehicles are what i do, so pcv's . i don't think there's a word better than spac, but the time is coming. really, we have three public companies of which i am the chair or cochair and some private great businesses we are building and lots to do, but we do think the time for opportunity is coming again. >> could there be a new vehicle coming?
>> some variation on the theme. we will see. >> which the name around a little bit maybe. >> thank you very much indeed, martin franklin, api cochair, and of course, our thanks ted hammond, bloomberg reporter. what we have coming up. there is concern china's debt crisis is starting to spread to safer and safer companies. we are going to look at the contagion next. is the market really paying attention? this is bloomberg. ♪
president biden marked one million u.s. deaths from covid by calling on congress to maintain funding for testing and treatment. lawmakers remain in disagreement about how to pay for it. a second assignment today -- second summit today and at quelling the virus. north korea fired three short range ballistic missiles today, just days before president biden's visit to the region, the latest volley from the kim jong-un regime. president biden meets next week with south korea's new leader, who has pledged to take a tough line with north korea. a debt crisis spreading in china. a company has defaulted on a dollar bond, one of the biggest chinese property companies to default on its obligations. global news -- global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries.
i am angel luciano. this is bloomberg. alix: thanks. good to see you. talking about china, because as much as we talk about tech in crypto, china is also a risk to the global markets. what is the relevance here? how important is it? >> we saw evergrande last year, but the bonds are now down 65% year-to-date. that makes of the third worst performer excluding russia in all of emerging-market debt after ukraine and belarus, so that makes it clear. if you think about property developers in the emerging-market universe, more than half our trading below $.60 on the dollar, a high probability of default. a spillover in country guard and another large private developer in china are ones we need to
watch, those down between 10% and 20%, so that is where the pain will probably circulate. >> is this process under control? will it be a systemic problem? >> if the fed does not step in, yes. we have talked about what china can do to divert defaults with evergrande. we talked about maybe having a strong clause ice sovereign come in and build amount. we see none of that, basically no help for these private developers, and that is beijing's stance. you are a private developer, we have no stake in you, and you get caught -- you got caught, so you see into these taking these assets off their books, author balance sheets, and that's a recipe with what we should expect with sunac. they have great assets. they paid a lot of money with them -- a lot of money for them. they are getting squeezed. we will see things turn back to
the public sector in beijing. >> is there contagion from china elsewhere? >> probably not as much. a lot of the private sector now has really been -- the private property owners have been saying what creditor should expect. broadly speaking, looking back, high-yield bonds are down 22% year-to-date. i think they are worse on something of the order of 23% in april, exploding up to 28% when china was feeling the pain. things are getting better. we need some transparency on what sort of stimulus beijing is willing to provide to households, direct support. they have said nothing about the property sector either. that is what we are waiting for. >> can you give me a sense of the scale of the problem in the property sector just in dollar terms, yuan terms? >> debt needs to be paid before
the end of this year and that is our focus. obviously the sector, i mean, as goes china real estate, so goes the economy, but from a creditor perspective, that is $85 billion of debt that needs to be paid between now and the end of the year, and with the lockdowns and the fact that china is limited in its ability to influence things from a monetary perspective, the only option left to them as fiscal stimulus, but with consumers locked at home and the labor force off-line due to lockdowns, the fiscal side of their balance sheet will not have the same impact. >> yeah, especially if you cannot go to work and make the stuff you then want to buy. there was a headline that crossed that said the ruble extended gains across -- gains against the dollar. >> you have to look at other pairings with the ruble but if you look at what it implies, yeah, it is up 17% year-to-date.
you can sort of rural versus -- sort of reverse the yuan-ruble, and yeah, it looks like the best currency on earth, but it is clearly not real. i think a 56% within one year. there's still a lot of pain and russia. it comes down to the willingness to pay after the deadline where dollar creditors cannot receive payments from russian issuers anymore. we will see quickly whether russia has a willingness to pay on its debts any longer and my guess is it will not. >> it may be a critical factor behind that decision, whether or not they are receiving payments. mario thinks paying in rubles is ok. will that be the case? and russia has started reducing flows into germany. how close are we to, as the german economic minister put it, gas becoming weaponized?
and if that is the case, what's the impact not on the german economy, not on the european economy, but on the russian economy? >> i mean, we are already there. 20 european clients have already signed up for accounts with the entity they need to sign up to to pay for gas in rubles. we have 20 other companies with paperwork pending, so to speak, so we are moving there and it is the ambiguity, the fact that the eu has not been clear on whether paying in rubles doesn't constitute a breach of sanctions. we are waiting for color on that. if you want my advice in terms of what i'm hearing about what is going on in russia on the ground domestically, it is getting bad and getting worse. our estimates are inflation upwards of 22% this year and russia and a gdp growth contraction on the order of 10% to 12%, so those are pretty dire numbers, and from what i hear from my sources on the ground, things are getting really bad in russia. >> ok.
we will see where they go next. good stuff. thank you very much indeed. a lot of good stuff. we showed you janet yellen a moment ago, the treasury secretary speaking, addressing the issue of stable coins or being asked about them. janet yellen is saying that basically a stable coin emergence is an argument for a central bank digital currency, because effectively, that is what some of these are trying to be and i think her argument is why do we need that when we could have a central bank digital currency, and maybe that would provide the role that these stable coins are trying to fill? maybe we could do it better. maybe that's the argument she is trying to make. you can continue following what is happening with janet yellen's testimony on your bloomberg terminal. this is bloomberg. ♪
>> european equities are off their lows. around 35 minutes to the close this thursday. we are still down. we are still down quite aggressively but certainly not like what we saw earlier in the session. the stoxx 600 for 24, spot six, down .7%, plenty of action elsewhere to focus on. the euro-dollar with a 1.03 handle, a critical level in terms of the fx community, now down .9% euro-dollar, a lot of talk about parity, not only for that currency but for the pound as well. volatility continues in the energy space as well. looking at what is happening with natural gas, the u.k. quote is up 25%, a quarter on the price. the volatility absolutely massive. the russians may be starting to restrict flows to the germans. this is problematic not only now
but further down the road potentially as we get out of summer into autumn and winter. we will talk about where european equities go next with graham secker, morgan stanley's chief european equities strategist, a little cautious, let's put it that way, on where we go next. that conversation is coming up. this is bloomberg. ♪
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