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tv   Bloomberg Markets European Open  Bloomberg  November 16, 2021 3:00am-4:00am EST

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a payment as elon musk dumps more stock in the electric carmaker. the future is in europe are pointing to gains of about 0.3% as investors way out increasing concerns about inflation as voiced by the voices of dudley and williams as well. in the u.k., the focus is on the jobs numbers. 160,000 additional jobs added at the end of furlough. will that change the dynamic for the bank of england's andrew bailey as he looks to the december meeting. the sterling pound rising on the back of that that the boe will move in december. our opening -- the cac 40 is gaining 0.2 percent. and germany also gaining 0.2 --
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0.2 percent. christine lagarde walking back a few years around inflation in the rate hike for next year is unlikely indeed. to virgins is what we are seeing -- divergence is what we are seeing. we are looking at the 10 year bond of minus 0.22. sterling is up, gaining about 0.3%. your euro-dollar is gaining by about 0.1%. we are going to check in on how things are breaking down sector by sector. as you can see, you have staples, materials, inflation, technology as well also gaining. in the u.s., pressure on the nasdaq as it yields gained to
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1.6 percent and you saw some around the optimism for technology. industrials are a bit of a mixed picture. health care is lower. financials also gaining taking into account the fact that yields are higher. in a fitting financials and a bit of a squeeze on technology. let's check in on some of the individual stocks that we are looking at. st micro, there is a story around the fact that the european commission could be considering allowing some flexibility in terms of state aid for the semiconductor sector within the euro zone. that debate has been fierce amongst european commission officials. the french and the germans will certainly want more support and it seems they may get that on wednesday. a strong few minutes for vodafone gaining almost 4%.
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the company came in with earnings that beat estimates and that is being reflected in the share price action. and diageo gaining 3%. they upgraded their forecast and they are hoping to increase their market sure -- market share. pretty optimistic about the outlook. that is the european markets, trading higher as continental indexes head for their seventh straight week of gains. according to strategists from three investment banks, there is more upside to come. they all favor european equities right now. they have never been this cheap in comparison to u.s. stocks. morgan stanley says the msci europe is a valued at a 33% discount. at this point, i will bring in
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francine who has been waiting patiently. she is in singapore for bloomberg's new economy forum. welcome to the show. how are things in singapore? >> we are very jetlagged but it is all about central banks. we heard from christine lagarde and neel kashkari and andrew bailey all giving us their thoughts on inflation and the inflation to be and what it means for the future. >> there is nothing that leads me to think this is a long-term change in inflation expectations. we are seeing pressures that are real. even though they are real and people are having to pay it, the challenge is that if we overreact by changing the path of monetary policy to try to deal with a one-time affect, that could lead to a worse long-term outcome for the economy. >> bottlenecks are unwinding.
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we can expect the price pressure on goods and services to normalize gradually. as a result, we still see inflation moderating in the next year. but it will take longer to decline then we had originally expected. >> it is not going to supply more gas or more computer chips. the risk for us is that we also see that in this recovery, the output gap is now approaching being closed and the labor market in particular looks tight. and that is the big issue at the moment. >> let's get into the markets. eddie joins us from our mliv team. sterling is supported when we look at the u.k. but there is also a lot of focus on bitcoin and the biden-xi summit that
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seems to be overall supportive of stocks. >> there are so many moving parts. it is difficult to keep your focus on what is really important. the signal -- i think one of the main things we are looking at is still what our policymakers going to do? i think when we get more fed speakers, i think that is what we should be focusing on. tom: what is your view on the debate about european equities versus u.s. equities as we look ahead to 2022? >> such a good question. european stocks are cheap. they are valued really low. the question is, are they cheap for a reason? when i look at european stocks i think about words or companies like quality, durability, luxury. what i don't think about is
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disruption and unicorns and the excitement you get from u.s. companies that say, we are going to change the world. european companies are dependable. investors don't want dependable. they want disruption. they want companies like tesla. for european companies, they are struggling with an old continent that is growing slower than many of its counterparts across the world. they are cheap that they may be cheap for a reason. >> there was a great chart. it shows the discount. what did you do with crypto today? >> i love crypto. there -- they are so much fun to cover. we are back to levels that we were at two weeks ago. we are seeing steep drawdowns. it going at 60,000. even ethereum is selling
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off. i don't think though that the momentum has completely drained away. crypto has traditionally had strong final months of the year. >> eddie, from our mliv team. you can also check out the live blog which is very good. joe biden and xi jinping talked about the need for cooperation in there for summit. >> we need to establish common sense guardrails to be clear and honest where we disagree and work together where our interests intersect especially on vital global issues like climate change. neither -- this does not favor one or the other country, but it is responsible leadership. >> our senior editor in
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singapore joins us now. great to speak to you especially face to face and in singapore. it was interesting to see president xi asking for a rational policy from president biden and then president biden talked about trade with china. >> i am thrilled you have come to me to talk about it here. this meeting was really important. it went over by about 30 minutes. it went a little longer than people expected. and when you're talking about china and the u.s., you are looking for signals like that because the readouts can be bland and written in international speak that may or may not mean something but you are looking for concrete symbols and that was one. real concern on the american side is to make sure that competition does not become conflict. that is really critical especially in the space of u.s.
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and china where sometimes the sides speak past each other and they have symbolic things going on with naval passages and air flights where tinderbox is can get lit and you don't want that to happen accidentally. even sitting down at the table is a positive sign. the talks going longer is a positive sign. they did not reframe the entire relationship at this meeting but they were never going to. the critical thing here is to get people on the same page. tom: what was the readouts from the chinese side? how have they been spinning this summit? >> the chinese got out first which i was intrigued to see. they got out before the americans and they set a little bit of the tone. there was some initial confusion about just what joe biden had talked about vis-à-vis taiwan but it appears there is no real difference in the u.s. strategy
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regarding taiwan. no real change there. overall, the conversation was simple -- was similar in the readouts. the chinese side said a couple of times that it was important to see where the americans -- what they did forward to put meat on the bones of the discussion. >> was the cooperation on climate change in glasgow the beginning of smoother things? >> i use the word green shoots in this relationship for a reason. climate is one that we have talked about for a long time as an area of cooperation. it is something they fundamentally agree on. they agree that someone needs to do something about climate change. these are the two biggest actors in the world. i do think this was a potential area of cooperation. another one that i would signal is ongoing. the 737 max recertification -- i
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know boeing is watching for this and i know traders are as well. that is something i am keeping an eye on. that is one thing that you could look at to see if we are moving in the right direction. tom: the outcomes on the importance summit. even though it was virtual and ran over time. does this change fundamentally the direction of markets? does it remove tailwind risks? >> it underlines how the biden era is different from the trump era which was very adversarial. we did have talks but they were always adversarial and we never
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knew what was going to come out of them. we are in and era of or predictable foreign policy from the u.s. and that is a good thing. and i think markets will react to that. there are still problems between the u.s. and china that will take many years to sort out and that will continue to play out in the markets but we are expecting less volatility on that front. >> eddie from our mliv team and i urge everyone to check out his fantastic blog. cryptocurrencies under pressure. we look at what is driving things lower. this is bloomberg. ♪
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tom: welcome back to the open. we are 16 minutes into the trading day building on record gains. there are modest gains, zero point 2%. the close in the u.s. was mixed to lower. in terms of how it breaks down sector by sector basis, telecoms is at the top. personal care and construction at the bottom. the repricing of rate hikes in focus. let's get the bloomberg business with laura wright. laura: elon musk has sold more tesla shares. he offloaded about $930 million
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in stock adding to what he sold last week. the share price plunging. jp morgan has sued tesla for warrants that have expired above the strike price. tesla and jp morgan are disputing adjustments made to the contract in the wake of elon musk's threats to take the company private. michael burry has ditched some of his biggest bearish bets. a regulatory filing shows his firm close to positions against tesla and arc. -- and ark. he has also deleted his twitter account after arguing with elon musk. he rose to fame with his successful bets against mortgage security during the financial crisis. saudi arabia's sovereign wealth fund has waded deeper into the u.s. stock market with claims in
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the market and transportation. that is according to the regulatory filing with the sec. francine: thank you. i am going to pick it up in singapore. cryptocurrencies under pressure. it going sliding to the 60,000 level. let's get straight to our bloomberg reporter covering crypto in asia. joanna, thank you for joining us. i don't know if it is a drop or a pause in the rally. what is behind it? >> it is a few things. one of which is we had the infrastructure bill signed and there are some crypto taxation privileges making people nervous. leaving the market fragile. china has come out and warned people, especially state owned enterprises about crypto mining operations and it might boost
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power prices. it is another thing a lot of crypto operations have left china but it can still make the market nervous. we have had a couple of things contribute to the drops today. tom: given the institutional pickup to the crypto space, could investors look through some of these short-term concerns? >> they probably can to an extent but crypto is so volatile , you could have another huge drop from here and when you have drops, they are big drops. it is hard to tell but it is still the case thatt ether is up and bitcoin has doubled. it has been a good year for crypto even though it is off the highs that people have looked for in the last few weeks. francine: what is in your near term outlook for crypto prices? i know there is a crypto exchange that was subpoenaed.
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>> there are a lot of people on crypto who are saying it will go to 100,000 by the end of the year. that is the big refrain. bitcoin has been stuck in this range of the low 60 thousands. this is going back to the bottom of that range. if it goes below 60,000 come at you could see more concern. but the bulls are still there with that 100,000 number. coinbase and s.e.c. -- they are inquiring about things. the sec is looking at crypto companies. regulators around the world are doing that. crypto is becoming more important and regulators will look at what they see as something that might have some uses but can also be a real problem for retail investors when you have frauds and issues
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in the market. it is not too surprising that the sec is active in some of these places. tom: regulators are from china to the u.s. looking at this space. saudi arabia, russia and the uae saying opec-plus will continue raising opec output but cautiously. we had to abu dhabi next. this is bloomberg. ♪
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>> what is the difference between a phase out and phase down? i don't know but for a large number of countries, during the process of transition, they will have to rely on whatever means of energy they have. i mean if suddenly someone could enhance the availability of petrol, diesel gas in the market, people would not have to use that. but it is not india alone. now, what often happens is it is a convenient play to take the focus off oil and gas and suddenly talk about coal as if that were the main issue of discussion here. as i said, there is a little
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play around here and whatever the language or where it came from etc., there are a lot of countries that will in the short run have to make sure they are supplied with electricity. francine: india's energy minister there at the adipec in abu dhabi speaking to our anchor, yousef gamal el-din. we returned to adipec where it yousef gamal el-din is still there following the developments. saudi arabia -- how does the energy minister plan to address the issue? yousef: he has quite the character and he made some very strong comments around what he thinks are unsustainable levels of energy prices paired the country has had to cut taxes to try to offset the impact on indian consumer is trying to keep oil and gas affordable to more than a billion people. it is not an easy task and know
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you have the energy transition on top of that as well. he has held a lot of by laterals here in abu dhabi and he said he made the strong impression that more needs to be done on that front. we also made get something about strategic reserves beyond the united states. he said that is only in emergency. tom: what else have you been hearing about that debate in washington around strategic reserves? yousef: everyone has a view on this. it is quite a spectrum of opinions paired the latest we had was from dan yergin. he made the point outlook, even if the u.s. blocked exports, it would not have a meaningful impact on what happens with gasoline prices. united states at a seven year highs. strategic reserves will be more important near thanksgiving.
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this is a hot potato. tom: bloomberg's useful if -- yousef gamal el-din. coming, russia looks to get act on track with the international delivery of its vaccine. this is bloomberg. ♪
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tom: welcome back to the open. we are 30 minutes into the european trading day. biden and xi cool down hostilities and call for cooperation in a longer than expected summit. andrew bailey feels uneasy about inflation and evidence mounts that a shortage of workers will drive up british wages. and jp morgan sues tesla over a payment as elon musk dumps more stock in the electric carmaker.
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francine, the debate around inflation with x fed officials is heating up pressure on the fed to speak up its taper. in europe, equities seem to continue to grind higher and the geopolitics -- you are the region most affected by the dynamics between the u.s. and china. in singapore for the bloomberg new economy forum, how are things looking? francine: the focus is firmly on president xi and president biden and the summit that could lead to a better working relationship. there was nothing new but they did speak and the body language was good and it lasted 30 minutes longer than expected which is giving a nice lift to european stocks on the back of gains we saw in asia. we had a conversation with bill dudley formerly of the new york fed and markets continue to try to figure out the risk that policymakers are airing by
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treating this elevated price possibly with a monetary alice e adjustment. the dax remains elevated. the ftse is flat but we had some encouraging job numbers. rate hike is back on the table according to some analysts for december. we are also watching cryptocurrencies. this is what the groups are looking at. it is always great to look at the groups because this is where we are seeing the most discounts or not. you can see health care, construction, chemicals to the downside. focusing on energy with our yousef gamal el-din at adipec talking about brent and wti. tom: let's look at covid. russia's covid-19 vaccine, sputnik five has been plagued by delays in international deliveries in recent months. our next guest heads the russian
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firm which is responsible for marketing the vaccine abroad. the ceo joins us now. thank you for your time. can you give us an update on production volumes of sputnik and your goals for exports over the next 6-12 months? >> production delays have been fully resolved. we are completely on schedule with all of the countries. we are already in 71 countries. it is important that russia is making a big contribution. we are looking at 50% of middle income people outside of russia. for the first time, we are releasing those numbers. we have provided the sputnik vaccine to almost 100 million people outside of russia. and that compares to 200 million
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people outside of china. around 15% of the contribution and we are completely on schedule to deliver vaccines and we expect to be in the 15%-20% of the market share of countries going forward. francine: good morning. how do you explain the disconnect with what russia is saying on how many doses have been delivered to countries outside your domestic market and the likes of venezuela, argentina, turkey and other saying there has been significant delays for the second dose? >> the delays were resolved three months ago and it is the media trying to percolate those ideas. but there are zero delays for the second dose delivery. this is an old story. the new story is that sputnik light has developed a booster
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for the philippines. it could increase efficacy and antibodies by up to 10 times. we have philippine officials saying -- preferring the spot in our -- the sputnik booster two pfizer and moderna and others. we need to be clear on some of the media messages because some people talk about cases in russia where in reality, germany has more cases now than russia while having half of the russian population. the real story is a russia is using sputnik successfully and money countries like argentina are using it. this is a unique contribution that we are making. tom: why do you think the world
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health organization has yet to give sputnik approval? >> we are in a great dialogue with the who. we expect the approval by the end of the year and we are just going through some bureaucratic procedures. it is important that no one doubts the safety and efficacy of the vaccines. now, even our biggest doubters say, we know sputnik is efficient and safe. we see argentina data. we hope to be done the bureaucratic procedures by the end of the year. francine: how do you explain the persistently low vaccination record? a lot of people are hesitant about getting the vaccine in
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russia, would you support a mandatory vaccine? >> you are right and i think we need to increase vaccination rates. they are increasing and we are already at near 50%. it is important what we are doing. we are sharing successful examples of sputnik use inside and outside of russia and working together jointly with the media and other annual factors -- and other manufacturers. there are no questions that vaccines are a fundamental solution. we are working with astrazeneca and others on joint efforts. tom: there is a geopolitical element to the global vaccine program. there is also the geopolitics of de la rue's and the crisis on the belarusian and polish
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border. what would moscow need to see to rein in lukashenko of belarus? >> let me stick closer to vaccines. we stay away from politics. i think many people try to make vaccines political. we always say that vaccines should not be political. i will not comment on any of the political issues. francine: on the political side of the vaccine, are you politicizing covid and the vaccines? >> they need to apply for registration and permission in russia. astrazeneca and others, we are working well with them. they just need to apply and we are for vaccine combinations.
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we started the first trials with other vaccines. we are moving forward with the partnership. and now, we believe people are producing a better immune restaurants so we believe vaccine combos are a way of the future. francine: thank you so much. we will talk a little more about politics next time you come on. coming up, payrolls -- u.k. payrolls rise after the government's furlough program. we take a look at what that means for sterling and the bank of england next. this is bloomberg. ♪
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tom: welcome back to the open. 42 minutes into the european trading day. a lot of optimism building on record gains in euro. we still have the support from the ecb, christine lagarde saying the monetary policy will remain supportive at least through 2022. and then you have to factor in the higher covid infection rates in europe. but inflationary pressures
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arguably less acute within the euro zone versus what you are seeing in the u.s. you are in singapore for the new economy forum. you flew over from london. what was that process like? a city state that has gone for zero. francine: it is different from london. this is the main city center where you have a lot of office blocks and everyone is wearing masks even outside. it is closely monitored. you have to show your vaccine status. and very little places except cash. the process was pretty smooth but this is one of the first outside organizations, the bloomberg new economy forum is one of the first to gather in the city so all measures have been taken to make sure there is a smooth process or the delegates. i am excited about the summit which starts tomorrow.
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we will talk about foreign policy with henry because endure. i am doing two panels. a conversation on ai and some of the new things they are doing to break down protein to make it into an ai drug that could revolutionize the future of some medicine. and then, david solomon. i will be speaking to him for about 25 minutes. he is the goldman sachs chairman and ceo. here is laura wright. laura: president biden and president xi highlighted the need for cooperation in their first face-to-face virtual summit. the videoconference lasted more than three hours covering topics such as trade and the state of taiwan. conversation was open and respectful. president xi said the countries should not engage in winners and losers. e.u. may ease restrictions on state aid for the semiconductor
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industry. the eu commission could agree to a new policy when it meets on wednesday. a draft of the policy paper -- the french calling for more intervention to overcome the global supply crisis. boris johnson has said it would be perfectly legitimate to suspend parts of the brexit deal with the eu and the u.k. is demanding -- is demanding a major overhaul due to the impact on northern ireland. suspending the deal risks to be a retaliation from the eu but the prime minister says his government still wants to negotiate a solution to the escalating trade disputes. 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. this is bloomberg. tom, francine? tom: the u.k. jobs market tightens in october bringing 160 thousand more people into employment and absorbing workers
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on the government furlough program during the pandemic. it has given a lift to the pound this morning which may be playing into some underperformance for u.k. equities so far in early trading. thank you for joining us this morning. are you and the team pricing in a hike in december on the back of this jobs data? >> i think the whole market is expecting u.k. base rates to rise in the next year. that is being priced in given the reaction in certain sectors. i think what the market needs now is for us to start on that steady diet of rate hikes. it was not too long ago, march 2020 where u.k. was at --. we can stomach that. they just need to see that
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happen. francine: can they afford to go before the fed? >> i think many people want -- many countries want to get ahead of the fed to protect their own currencies. what you have seen is the markets betting against the pound. and that is hurting some u.k. domestic stocks and you are starting to see like we saw after brexit, elastic being stretched with the u.k. and domestic earners. tom: you have been talking about the de-rating of some companies. do you think there may be an opportunity around that? >> you see a lot of sectors having done well and producing
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strong upgrades in 2021 as we come out of the pandemic. i can point to companies like -- . these are companies that have benefited from increased spending and savings rates. what you see is those earnings rates not being rewarded with re-rating. people are worried about earnings momentum in 2022. these companies in particular that are u.k. domestic are trading at double discounts. we see continuing strong earnings momentum so we are adding to those parts of the market. trading normalization is something that investors are worried about. big covid winners are not trading very well as investors wait to see what the economy looks like post furlough and
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post the increase in rate hikes as things return to normal. we think that interest rates were much higher than what they were. we think that opportunity has presented itself as we move into the normalized territory. francine: what is your take on brexit? could you see an environment where rates go up because of some of the inflationary pressures but at the same time, we have much harder and harsher words from the eu that will translate into an economic shock for the u.k.? >> the impact of brexit and the slower longer-term growth and what that means for the u.k. economy has largely been priced in. it was priced in and 20 -- in 2016. because the u.k. had one of the worst covid experiences, it is
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seeing higher gdp growth forecasts and brexit has already been priced in. we are seeing big headlines around fishing and ireland but the impact on the u.k. economy will be limited and that has already been priced. it is sentiment towards what is now seen as an isolated island nation. but in terms of u.k. earnings momentum, we are still an international index. we are still insulated from the big headline risk. tom: ok, thank you very much on the headline risk around brexit and the opportunities amid some of the derated companies and the u.k. jp morgan sues tesla over a payment and elon musk dumps more stock in the electric car maker. this is bloomberg.
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tom: welcome back to the open. we are 53 minutes into the european trading day building on record levels in european equities. you lower the u.k. and you lower spain's. -- and you lower spain.
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let's get back to all things elon musk and tesla. elon musk selling more shares in the company. he offloaded about 930 million dollars of tesla yesterday adding to what he already sold last week. joining us now is dani burger. how close is elon musk to selling the 10% that he promised in the twitter poll? >> he has a long way to go. he has sold around 7.3 million shares. he has more than half left to go. a lot has been made about that and the timing of the pole and if he had already planned to sell some of these. he had rearranged some of this pure he talked about in september saying he had a big bulk of options that were expiring and he wanted to exercise them. he had taxes to pay. it does appear at that this
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sale is part of that. this is what the aftermarket looked like for tesla. this does not think -- this does not include the most recent sale. we should get a new beat on tesla. francine: a new legal complaint was also filed yesterday. jp morgan sued tesla over unpaid warrants. what exactly is the dispute? >> it is minimum. $162 million or a trillion dollar company and a mega bank, it is a trivial amount. this is potentially a relationship that is becoming fraught over a small amount. and in some ways, it is this infamous tweet from elon musk coming to bite him. there were warrants that jp morgan had issued to tesla saying if tesla closed above a
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price, then tesla would owe jp morgan money. elon musk tweets this and jp morgan says this constitutes a significant event. otherwise, it looks like tesla will have to pay that. tesla took issue saying this was not a valid thing for them to do. ap morgan issued -- jp morgan issued in the complaint saying not only were they appropriate but tesla shares would close above the new strike price but the original one as well. a testy complaint. we have not heard a response from tesla. that is important what you are emphasizing, this is a small amount of money potentially bridging -- potentially burning the bridge between these two. francine: yuan climbing on the news of the president biden and president xi meeting.
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the bar was so low, because they ran over 30 minutes, we are putting a stamp of success on that. tom: that is it for the european market open. surveillance, early edition is next. this is bloomberg. ♪ moving is a handful.
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>> we risk losing our edge as a nation and china and the rest of the world is catching up. >> now, we are getting it done taking up for lost time and laying a better foundation for the future. >> people that are out of work who want to work, they are also suffering and we cannot lose sight of them. >> america is moving again and your life is going to change for the better. >> this is bloomberg surveillance with francine lacqua. francine:


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