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tv   Bloomberg Markets Americas  Bloomberg  September 29, 2021 10:00am-11:00am EDT

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♪ guy: wednesday the 29th. 30 minutes into the trading day in the united states. from london, i'm guy. alix steel over in new york. welcome to "bloomberg markets." maybe there are dead cats out there. maybe they are made of rubber. alix: maybe they are bouncing. d skeptics are going to say you can't have dead cats bouncing, but i would argue you had to percent yesterday and we've had a lot of dip buying in general over the cycle, said to expect that 5% dip may be somewhat unrealistic, so i'm going to go with are the dead cats actually bouncing. up 0.6% for the s&p. tech nicely rebounding by about
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1%. we haven't made up the losses that we saw yesterday, so watch that space. we had a tremendous run in just the last seat -- the last 10 days alone for the yield. it does put pressure on earnings , for example, and growth for tech. this is for you, guy. sterling getting hit yet again. there's questions as to why specifically sterling is getting hit. the cable rate down another 0.6%. we haven't seen this since back in january or december of 2020. guy: to be honest, there was probably too much exuberance around what the bank of england did a few days back. now we've got this kind of inflation crisis we are dealing with. maybe we are just taking some of this back, but the move has been swift definitely. the data are so important at the moment, and trying to get a signal out of the noise is critical. the data generally have been heading down versus expectations, so we have been
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underperforming. we are starting to get data that is outperforming. pending home sales hitting the tape right now. the month on month number coming through at 8.1. prior number was -1.8. that has been revised down to negative two. the survey was 1.4. this is a significant beat in the housing market. in terms of year on year, -6.3. so maybe there's better data. it is a similar story in the u.k.. first-time buyers increasingly squeezed. alix: because if they can't afford to do something really quickly or go into a bidding war, they go into the rental market. make the rental market more extensive. it has that kind of feedthrough. that's the data picture. there's also a lot of other top stories we are following today. abigail doolittle is watching the market technicals. annmarie hordern is on the hill about the debt limit. bloomberg's helen robertson is
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keeping her eye on the fuel shortage in the u.k. we want to begin with the market technicals. it has been a very difficult couple of days. is that cap bouncing, or no? abigail: hard to say, but lots of choppy action. we can see that with the russell 2000. you can see that earlier this week, there had been a big update with the reopening trade hot as yields were rising. that hit tech a little bit on monday. yesterday, that reflation trade selling off or to small caps. net-net, down 0.5%. we don't really have a bounce here yet on the week, at least for small-cap. relative to big caps, going to the bloomberg terminal and take a look at what is happening for the s&p 500. a very important technical test, when that happened about a year ago, when you had the s&p 500 go below its 50 day moving average, hit the 100 day moving average, and then retest. that proved to be a successful test into this year's rally.
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this year we had something very similar not to long ago, below the 50 day moving average. the near-term buyers out. gas moving below that 50 day moving average yesterday. the 100 day moving average holding again, but it is often said that you buy the first test, not the second. there is something about this action as yields are continuing to move around that suggests more volatility probably ahead for stocks. guy: thank you very much, indeed. some of that volatility emanating from what is happening in d.c. president biden canceled a trip to chicago today to focus on lobbying lawmakers to move his agenda forward. treasury secretary janet yellen warning yesterday of catastrophe if the u.s. fails to raise the debt ceiling. she did that when she was facing the senate banking committee. this is what she had to say. alix: it isn't --sec. yellen: it is imperative that congress a des -- that congress address the debt limit. if not, it is likely that the
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treasury will exhaust its measures by. october 18 america would default -- by october 18. america would default for the first time in history. the full faith in credit would lightly be impaired, and our country would face a financial crisis and economic recession as a result. guy: so the 18th, that sounds like it is set in stone, doesn't it? is it? dates in d.c. tend to be a movable feast. our correspondent annmarie hordern is standing by from the capitol. let's talk about that. the treasury secretary saying the 18th is the cutoff date. we have to get it fixed by then. is it really the 18th? annmarie: there's a little bit of flex ability there. the real fact is they just don't know. this is treasury secretary yellen's best bet in terms of when the treasury would have to potentially default because they would be running out of cash. we do know that it was going to be sometime in october,
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november. bloomberg intelligence thought it was may be pushing back a little bit in october. but it is somewhere in the middle of october, and yellen has come out with this kind of line in the sand, but that really gets it going in congress . what they need to do to make sure they sure this up before this october 18 state that she sat forward in this letter to congressional leaders, as well as publicly in her statement, so what comes now is going to be very much a game of chicken because republicans continuously insist that the democrats need to do it alone, but the democrats are urging republicans to do this in a bipartisan fashion. if someone is going to capitulate, the democrats are the ones that could do it by themselves with reconciliation. if they were to do that, they need to get that process started quickly because they take about two weeks. that just leaves you with a few days for that october 18 deadline. guy: that will really cheer the market up, to know that it is that tight. thank you very much, annmarie hordern joining us from d.c. when i get home tonight, my job
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is to get in the car and drive around the area looking for fuel. basically, we are getting close to running out. school runs have to be done. things have to be sorted. that is the job for me tonight. the question i have to ask, am i going to find any? alix: are you? you should have filled it up on saturday. guy: i know. . i drove past an entry petrol station. i had the opportunity. what we have today is that the prime minister is basically bringing in the reserve team. we are going to be see in the army helping out. we've got a reserve tanker fleet that apparently is going to be brought into action. is that going to alleviate the situation? bloomberg energy and commodities reporter helen robertson joining us now. am i going to find any fuel tonight? helen: what we have been hearing is that the supply situation is much better than it was even just a few days ago. obviously at the height of the crisis, about half of the u.k.'s retail petrol, what we call
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gasoline stations, were basically struggling to supply users. over the past few days, we have seen really long queues and even essential service vehicles, ambulances for example, keeping up, unable to refuel. for example, queuing up, unable -- for example, queuing up, unable to refuel. alix: those pictures are really unbelievable. they look like the picture you saw here in the 1970's. the difference is it might be a short-term bottleneck. we also heard that over in china, they are going to consider letting power prices rise in order to combat the fuel usage, and the idea is going to be a real supply and demand price setter now. this is a power problem. there's a real power crunch globally. helen: absolutely. obviously, commodities and energies wise, anything that happens in china has a direct
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relation to the rest of the world. so obviously what is happening in china, as you mentioned, as they are trying to curb power use because basically, they can't get enough coal. that has a direct impact on other countries' abillit -- countries' ability to get cold. gasp -- to get coal. gas prices are up at record levels. so what we are seeing here is a real squeeze. alix: really appreciate it. coming up, how does all of that wind up affecting earnings? our next guest says equities might not be able to withstand the pressure from inflation. katie kaminski, ortho simplex -- katie kaminski, alphasimplex chief strategist, joining us next. this is bloomberg. ♪
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chair powell: inflation is elevated and will likely remain so in coming months before moderating. sec. yellen: clearly inflation this year is going to be above 2%. chair powell: we are seeing upward pressure on prices, particularly due to supply bottlenecks in some sectors. sec. yellen: we are seeing monthly inflation rates taper off. sen. kennedy: what do you think it will be at the end of the year, if not 2%? sec. yellen: probably closer to 4%. chair powell: these effects have been larger and longer lasting than anticipated, but they will abate, and as they do, inflation is expected to drop back to our longer running 2% goal. alix: that was yesterday at the senate banking committee, talking about inflation. now the question becomes, how
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does this feedthrough to the earnings picture? so far we have seen some pastor in terms of cost, where you can raise your prices. but how much more juice is left for those operating margins? the blue line shows earnings estimates for this year. the yellow line shows earnings estimates for next year, which really seems to be nicely tracking the s&p right now. the question is, are we going to see negative earnings revisions? we have artists who that we have already seen more downgrades and upgrades in europe when it comes to earnings. not only disinflation, but freight costs, and how much more do earnings have to come down? how do you reprice for something like that? guy: do you need to reprice? are equities a decent head for what is happening on the inflation side? are they the asset that you have to own? katy kaminski, alphasimplex group chief strategist, joining
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us now to help answer that question. what you make of yesterday's price action? was it and inflation scare, and is that a sign of things to come? katy: definitely. have to focus on what has been said. the key point is that inflation is much more persistent than anticipated. when you think about it from that perspective, it means that when you look at market moves yesterday, this is what i was really interested in seeing. you saw equity markets down. you saw bond market's down. you saw gold down, silver down, andy swiss franc. frankly, that is not a typical move that we have when we have a big retraction in the s&p. we usually see the opposite and a lot of these cross asset markets. for me, that shows that this inflation problem is serious enough that it is going to have to push us towards tightening or tapering, where rising rates will eventually come. that whole combination is really a shift in regime. yesterday's price action really
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showed that, in that we saw the market was reacting to inflation, despite some of the other noise. alix: does that extreme my the dollar was up? if inflation is coming and asset classes react to that, why would i on the dollar, and less it means we are going to see more rate hikes? katy: of course, but there's also the issue that risk off tends to be very favorable for the dollar as well, so we have to think about all the capital flows and other issues that will complicate that issue. but i think in terms of the dollar yesterday, it was probably more of a risk off play , and that everything is selling off, and that is the place to go , one of the only places to go. guy: in terms of what you do with your money then, what do you do with your money? katy: that is a good question because when you think about where you should invest in an environment where rising rates and inflation are an issue, you have to think about the problem from a very different perspective. you need to slow down and think, what is going to whether this
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type of environment a little better? i would start first thinking about rising rates. rising rates are definitely going to have a different tilt to what you see in the equity markets, so you're deftly going to see favoring more cyclicals and value stocks. just because they will whether some of those changes as we see interest rates rise over the longer-term. in terms of inflation, it is also complicated that there's many different factors we have to watch, whether it is wage inflation or supply chain disruption that is going to be the potential effect for different companies. so i think it is very much still about thinking about how inflation hits different assets and how that percolates down, and at what rate, into different sectors of the equity market. alix: so the basic playbook is sell bonds, buy some equities? or is it sell both? katy: i would say equities right now still look reasonable. there's still some good numbers
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for earnings. but for bonds, there's definitely some short signals that are starting to percolate, and that has been happening most of this year. i think that is what we are asking ourselves, if we are moving to a new secular trend in bonds where this great bond bull market finally ends and we have rising rates at some point, it is going to change the game for everybody. alix: really good analysis from yesterday. katy kaminski, alphasimplex group, think you very much. in the midst of all of this, warby parker goes public through a direct listing. it will be the second direct listing so far this week. we will break down what this means, the trend, the performance, with stacy cunningham, new york stock exchange president. this is bloomberg. ♪
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alix: the selloff yesterday did not freak out warby parker. the eyewear retailer starts
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trading today. it is going public through a direct listing. we want to get more on that with stacey cunningham, new york stock exchange president. it is always good to talk. let's talk about the internet retail company landscape. we have seen 12 of those companies have gone public this year versus nine from last year. the performance has been mixed. what is the pipeline? what is the trend? stacey: 20/20 was a blockbuster year. we had more ipos with capital raised then in history. we saw 2021 already eclipsing those numbers. what is unique about this time is very different from what we talk about when we look back at the dotcom era is the breadth of types of companies. we are seeing consumer tech, health care, some any different touch of companies going public right now. we are seeing investors become more discerning about what
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companies they are supporting. the pipeline continues to be really strong. some companies are choosing to wait a few quarters before they go public, but they are is still a lot -- but there is still a lot lined up in the short term. we are excited to welcome warby parker today through direct listing. guy: you are pregnant glasses. i feel this is appropriate. let's talk about the direct listing. you say the markets are getting a little choppie -- a little choppier. let's talk about the direct listing. using more companies will go down this route? stacey: when you are not pricing shares, not selling shares into the market, you are a little less concerned about what the market conditions might be. you are allowing investors to price the company, but there aren't new shares being sold. so it is attractive when markets might be a little more volatile. we are seeing more companies choose a direct listing not just
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because of market conditions, but because of their priorities. the cost of capital is significantly better in a direct listing because you are allowing the overall market to participate, and that the market is asian of access to that listing is a big, important driver for many companies who once for all investors to have a level playing field as they hit the public markets. alix: i hear your point about direct listings, your somewhat immune to volatility within the markets, but if we get the trajectory of yields really rising and other assets repricing that, do you think that materially impacts the space? stacey: not so much for direct listings. it is just the capital markets attracting investors, and there are drivers for why there are so many companies looking to go public. if you rewind back to the spring of 2020, nobody would have expect it we would be in such a busy ipo calendar, but it was very expensive during that time in the early days of the pandemic to raise money in the private markets, and the public
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markets were providing access to capital for companies who needed it urgently, desperately, and the public markets were really on display. so now we have seen a lot of companies recognizing value of the public markets. certainly interest rates are playing a role in that as well, but there are companies looking to be public because they are not quite as sure, we are coming off a 10 or 11 year bull run market where a lot of companies recognize that conditions might not be within their control over a period of time, and they are looking to tap into that capital so they can continue to grow and expand their businesses despite conditions. guy: we are starting to see some spac's giving back money to investors. do you think that is a sign maybe that peak spac is behind us? stacey: i think peak spac is behind us. think about the days where there were 20 spac's going public on a single day. i don't think we are going to get back to those levels. there has been a bit of a reset, which is healthy for the market. you are seeing high quality spac's go to market.
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you're seeing high quality business combinations get done. when there are already 400 plus spac's out there looking for business combinations, i certainly don't think we are going to see an acceleration of those trends, and just let the rest of the market, investors are going to pick and choose the opportunities they believe are going to deliver them the best returns. alix: i am wondering where you see growth right now in the trading business or in other areas that you need to be looking at. stacey: there is certainly a lot of opportunity within the capital markets, as well as the trading business. a lot of conversations chair gansler is having about the markets and the way they function today are good for exchanges. just think about the way exchanges trade today, with more than half of trading in many bid -- many busy stocks occurring in markets that aren't transparent and don't provide price discovery the way an exchange does. there's a lot of focus from the regulators and others on bringing more transparency to
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our markets. that is good for the exchanges, since the exchanges are the ones that set prices. we're the only place where people are displaying their prices, which leads to a better result for investors. so moving markets and focusing on that fragmentation, addressing some of the drivers that are really keeping markets so fragmented today, will be good, and certainly an area of growth and opportunity. our companies and our investors are very focused on what impact they have in their day-to-day business and their investments long-term, so we work very closely with our community on supporting initiatives around esg. we recently announced a partnership with the intrinsic exchange group to that goal also, to meet the needs of our customers. guy: do you think we are now at the point where it is going to start getting a loom more clarity on what is esg and what isn't? what has been green washed and what hasn't? we are starting to understand maybe what the rules of the road really are.
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how much of what is classified as esg right now really is? stacey: it is a great point. if you look at the number of professionally managed assets in the u.s., one in three dollars is invested in an esg strategy, but not all esg strategies are created equal. that is why we put a lot of data behind what our company is doing. we collect data across five different esg metrics that investors can use to inform their decisions and have real visibility into what companies are doing to drive the change that they want to see. guy: the glasses look great. thank you for joining us. stacey cunningham, new york stock exchange president. really appreciate it. we are going to talk inflation and distressed debt. bruce richards, marathon asset management, up next. ♪
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♪ chair powell: we would continue to add accommodation, not
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subtract it, until well into the middle of next year. we thing that is appropriate, given the strength of the economy. the test for raising interest rates is substantially higher. alix: that is fed chair jay powell speaking yesterday about interest rates, really separating any kind of tapering from that interest rate hike. nevertheless, higher rates seem to be in the cards. inflation is still a worry. how do you price that into different parts of the market? bruce richards, marathon asset chairman and ceo, joins us now. i have to guess that this is the question you are all talking about in your meetings. how does inflation impact earnings and growth? bruce: it starts with every morning meeting when we get together at marathon, the analyst team, and we talk about the macro first before we again and talk about industries and company specific news. when we talk about the macro and what we heard yesterday from the dangerous man. [laughter] he's not a dangerous man, he's the man who should really be
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renominated for another term we believe he will have the votes because we believe it is truly nonpartisan. there are a couple of senators that may be have a very adamant view otherwise, but we believe the cabinet is there. we believe the votes are there. the first question then is tapering. the fed buys every month $120 billion, eight had -- wonder $20 billion, $80 billion in treasuries, $40 billion in mortgages. they end by july of next year, who is going to buy that additional $1.44 trillion of debt? to underwrite that, does it take a higher interest rate? the answer to that, i think, is all in inflation. so if inflation is truly transitory, i think it could be underwritten well at current rates. but if it proves to be less than transitory, then windows transitory become more permanent?
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then i think it takes -- then when does transitory become more permanent? then i think it takes more duration, and investors in the marketplace aren't ready for these losses at higher rates of inflation, so the key here is inflation. you see it throughout the system. housing prices yesterday, 19% year-over-year. you see what is happening in shipping prices. you see what is happening in food prices. you know what is like to go into a restaurant in new york city or any city where prices are up 20%. labor costs are up. these aren't transitory costs. we believe are still -- we believe these are still permanent costs. guy: that is a massive issue for these companies. if we do see these prices being a sticky as you say, do you think companies that are kind about the margin, that have been supported by a huge amount of largess that the dangerous man has delivered, do you think they
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will be able to survive if we do see input costs rising? for many of these businesses, these are critical costs. you pay your people too much, you are going out of business. your suppliers charge you too much, you are going out of business. where do we sit in terms of the default story associated with this inflation narrative? bruce: the default rate has dropped below 2%, and what you're going to see is about 1%. i wouldn't worry too much at this stage about defaults. debt ratios have fallen from about 5.3 times to about four and change, so they have improved. over the last year or two years, the debt to enterprise value is also the best it has been in years. so we believe, as fluid as the markets are, as much capital as has been raised, you look at the high-yield market, there used to be x number of issuers, around 150 to 200. now you have 400 issuers a year. in fact, this calendar year, we talked about the ipo market having record issuance, also the
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high-yield leveraged loan market having high-yield. in fact, i happen to be wearing my warby parker's right now, so congratulations to the company on their ipo. alix: we didn't even know it was going to turn into an advertisement. last time you were on, we were talking about how you made some investment's into the u.k. hospitality industry. a lot has happened since then, and they are getting hit with more labor issues, brexit issues, and power issues. what is it like to do that business now? would you be investing more? do you regret the investment? bruce: no, we like the investment. hospitality is coming back. we are acquiring more. the big but is we have 1800 employers across this enterprise , and we are short about 100 tenants terms -- about 110 in terms of service, so hiring is an issue. you see it throughout all
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pricing. you can talk about energy, for instance, and what the gas lines look like. it is not because we have a shortage. it is because we have a shortage of transportation. there's 1800 less truckers that work in the u.k. today versus pre-covid, pre-brexit. so when you have natural gas, oil and gas coming that needs to be going from the ports to the stations or two companies, that is a problem when you don't have the truckers you once had. part of that is brexit, part of it is covid. guy: what do using the gap is between supply and demand? house trump you think amanda is, and how they it gap is there, and is the gap getting wider on the demand side -- how strong do you think amanda i -- do you think demand is, and is the gap
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getting wider on the demand side? bruce: in long beach, california , there are ships sitting anchored off of long beach. young those ships, what you don't read about, there's another 14 right now sitting beyond the waters where you can drop anchor because it is too far out, so just kind of moving around with the winds. but once you get it to port, you take the containers off and they sit there. that is why you see that the railcar traffic is down 15% when it should be up 5% because we are moving so much merchandise. so it is really problematic. you look at the chip shortage, the labor shortage, the prices you see for all commodities, whether it is glass, steel, wood and materials and finished goods and appliances. you can see why housing prices are up, because the price of
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labor is up, the price of land is up. the price of everything that goes into constructing a home is up, including the plumbers, electricians, but also the materials that go into a home. alix: for just a second, ever. does that create -- evergrande. does that create opportunities for you or freak you out? bruce: absolutely opportunities. the big picture at evergrande is it is a problem. it is a problem for china, a problem for its housing market. a problem for the whole segment that relies on this. there's a lot of jobs related to this and a lot of commerce related to this. a lot of industry related to evergrande. so that is a problem. here's the pecking order for all of the folks thinking about evergrande and thinking about the logic of how it is going to play out. number one, the first obligation when this gets restructured, when that day comes, and we think they can will be kicked down the road a bit, and maybe
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some coupons get paid in the interim, when it happens, the first order is they are going to make sure the homeowner that bought those homes take delivery at they are made whole. second, the trade. the folks that did the work and supplied the goods and services and appliances, bathtubs, are going to get paid because they are a road a lot of money. third are the domestic creditors are going to get paid first. finally, at the very end of that pecking order are going to be the offshore bondholders, the dollar bonds that trade in new york law outside of china. there's lots of that debt that came in domiciled. so we are in the market please buying evergrande debt, and we will continue to buy it at these very low prices. the question is the price of
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acquisition relative to the debt that you buy. you are getting close to the point where we think now it makes sense for the first time. we never bought the credit until just this week. guy: $0.25? i am hearing $0.35, maybe. that is interesting. bruce: not $0.30. guy: i am curious, the capital structure looks like it is complete we reversed. it would normally be the other way around. so basically, what you are saying is that the dollar holders are going to be last in line, and therefore the recovery rates are going to be sick can play lower than you would normally expect. bruce: it is completely unknown. what happens in china, what happens in hong kong is completely unknown variable. we have to watch first.
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alix: are there other opportunities that evergrande is also creating? bruce: we are selling down a lot of assets, so there's monetize $1.55 billion. that will go to pay off the bank. there will be other assets that sell because that includes assets beyond just the property. guy: are there any other developers in china that you think are also going to end up in the same position? are you buying credit elsewhere? bruce: we think you wait for the domino to actually fall and you see how bad it gets for others that aren't quite the problem that evergrande is today. so there i would be patient. i wouldn't want to be early. there i would want proof of concept, and this case study to play out, before we would invest more. alix: we could definitely talk for the next 20 minutes, but we have to leave it there.
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please come back. we would love to get more of an update. really good stuff. bruce richards, marathon asset management chairman and ceo, we really appreciate your time. quick update on oil inventories. we saw a pretty good build in overall inventories at about 4.5 million. refinery utilization picking up, but you are seeing a build in product inventory as well. this is bloomberg. ♪
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ritika: this is "bloomberg markets." you are looking at a live shot of the principal room. coming up, formal council of economic advisers chairman. that is at 12:30 in new york. this is bloomberg. ♪ let's check in on the bloomberg first word news. i'm ritika gupta. in japan, fumio kishida is set to become the next prime minister. the former foreign minister is
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set to replace outgoing prime minister yoshihide suga. he will face an immediate test of his broader appeal in a general election that must be held by november. in the u.k., the government taking steps to ease the shortages that have triggered chaos and gas stations. fleet of reserve fuel tankers will be deployed within days to drive the trucks. the trade association says there's been a big drop in the number of stations without gas. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. alix: guy, so are you going to get an ev now? is this a transition? guy: no, but i think a lot of people are talking about that. time to make the switch. if there are long queues, there's a lot of people driving past, whistling, which is something you would struggle with, as they go past the petrol stations in their nice after
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cars -- their nice electric cars. alix: i can't whistle, and guy knows this. there are so many players now in that field, and you wonder what the saturation point looks like. david westin sat down with jim farley yesterday, the president and ceo afford, and talked about how there are 70 players. how do you distant was yourself -- are so many players. how do you distant was yourself? >> we are sold out with the f-150 lightning, and the next ones are coming in the next few months. we are betting on the good stuff. electrified mustangs, electrified f-series, vans come our really emotional products. we think that is going to be a big win. alix: ev maker lucid motors is going to be delivering its sedan next month. ceo peter rawlinson is here with us now. the big news is you are producing the car. you are already there.
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you are leapfrogging a lot of these guys. talk to me about the demand you are expecting and what you are noticing. peter: the cars are coming off the line right behind me, and we have just had 13,000 reorders. -- 13,000 preorders. he opens the factory doors for the world to see, for valued first customers, influencers, journalists, analysts, and a whole bunch of people, including our investors, and everyone is blown away with the progress we are making. cars are coming off the line, and we are scheduling customer deliveries in october. guy: october, november, december, how many customers are going to be in their cars driving around by the end of the year? what is that number going to be? peter: we are pushing as hard as we can to satisfy as many as we possibly can. we are going to ramp production up significantly.
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but what really matters right now is getting the quality right , not getting rest into driving numbers down the line, making sure each customer has a great, quality product, and then we are on track to ramp up to 20,000 units next year with a target of 50,000 in 2023. guy: i think in your spac filing, i just want to push you a little bit on this, you said 577. is it plus or minus 577? peter: we are giving it all we have to get there, and we will be able to give you a much clearer indication of how achievable that is when we do our first earnings call for our third quarter, which will be mid-november. alix: the risks that the supply chain problems impact you on
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that? peter: what has impacted us, and i have said this many times, we have been hit with the impact of covid in our supply chain for quality parts. without quality parts, we simply can't build a world class quality car. we are absolutely committed to that. so we have the aftermath of covid to deal with for our supply chains. it is supplier quality issues. guy: you talked about last night, which sounded great. you talked about having a dream drive event. i think that is going to take place on october 12. what is the dream drive event? what is dream drive going to be? peter: dream drive is the name for our autonomous and advanced driver system. we have perhaps the most advanced system in the world today, with 32 sensors
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integrated into the car, short and long-range radar, and a 120 degree lidar system. so we will be rolling up to the world on october 12, preceding customer deliveries. alix: in terms of your targets, how many people are you going to have to hire to do that? peter: we are approaching 3000 people in the company now. i always say i would rather do more with less people. i always believe it is my job to create a critical mass of intellect rather than just sheer mass of numbers. give me less, more brilliant people to achieve that. but that said, undeniably, we are really growing our footprint here, particularly in arizona, bringing jobs into the state. great, high tech manufacturing
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jobs. guy: when you going to be manufacturing in saudi? peter: we are looking at all options for plants both in the middle east and in china mid decade. it would be absolutely great to have lance around the world -- to have plants around the world as we move towards becoming a global player. alix: in terms of capital raised , you're doing a lot. how much money are you going to have to raise to do it, and when do you do it? peter: we have raised $4.4 billion with the spac mergers. we had a healthy cash balance before that. that leads us through into healthy positions right through to the end of 2022. clearly that is before we bring project gravity into the plant at the end of 2023. clearly will have to raise more
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money because this is a capital-intensive business, and we will choose an opportune moment to do that. guy: there's a lot of people messaging and right now with a lot of questions, so people are very interested at what you will be delivering. i think the sequencing in terms of the rolling out of some of these things you're going to be doing to customers i think is on top of everybody's mind right now. peter rawlinson, lucid motors ceo and chief technology officer, we always appreciate your time. we will speak to the ceo of another automaker moving into the ev space. rolls-royce is going electric as well. we will talk to them in the next hour. this is bloomberg. ♪
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alix: live from new york, i'm alix steel, with guy johnson in london. this is "bloomberg markets." the s&p up by 0.6%. what about european markets? here's bloomberg's ritika gupta. ritika: a similar story here. we are seeing those dip buyers back in europe, but not enough for the stock 600 to recover the losses we had seen yesterday. we see the majority of the sectors in the green. i am looking at the semis. they have been higher today, but we are seeing the s&l turning lower. they gave an upgraded sales forecast, saying by 2025, they are going to have $35 billion of sales. the kb boost to some of its peers -- that gave a boost to some of its peers. asm the top performer in the stoxx 600. look get some others, like next. they also boosted their sales and profit guidance, so that has given a boost to some of those other retailers, the likes of jd sports.
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as to what is moving to the downside, just a couple of sectors, but when i am looking at is the energy space. total is lower. brent is a touch softer today. i'm also looking at those utilities, down as well as that crisis continues. we just had that headline earlier that three more energy companies will be going bust. guy: it is a story that is still ongoing. gas prices continue to climb. very much, indeed -- thanks very much, indeed. what have we got coming up for the european close? we will carry on talking about these markets. this is bloomberg. ♪
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>> the countdown is on in europe. this is "bloomberg markets: european close," with guy
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johnson and alix steel. ♪ guy: wednesday the 29th. 30 to the european close. let's talk about what you need to know out of europe at this hour. stocks are bouncing. bonds are bouncing. this all after yesterday's selloff. we are still on track for a negative month, and many are pointing to the fact that may be today feels like a dead cat ounce. the u.k. -- dead cat bounce. the u.k. is calling up its reserve tanker feet to boost fuel deliveries spike the government saying the situation is fairly stabilizing. rolls-royce talking of petrol, is going to go all electric. we will talk to the ceo later this hour. equity markets are a little higher. yields are lower. we are looking at a pound being put under pressure.


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