suisse having a first credit loss from the war in ukraine and fresh litigation expenses. francine: i want to know what you watch on tv. this is one of the things we are trying to get to the bottom of that, the fact we are seeing a repricing in yields, what that means for stocks. futures gaining -- bureau stoxx 50 gaining. tom: the wall street session ended in the green. we continue to watch the comments from the fed officials thing may be a level above the neutral rate will be adequate. we continue to monitor that as we adjust to this inflationary picture. the ftse 100 is range -- the geopolitics of this new war in the ukraine, and the donbas. when it comes to france, that debate between marine le pen and emmanuel macron later this

evening. it will lead up to the final book in the presidential elections of this coming sunday. spanish ibex, let's see how things are playing off the victim story and maybe there's going to be some intervention to support the currency. also, you see the selloff in the bloomberg dollar index. lower by .10% -- .2%. if the yield story, the 10 year 2.92, talking about the real yield. what is not going to mean for risk assets more broadly. brent up 1.2%. francine: what are you watching on tv? we'll get to that moment. we saw netflix, taking the other streaming services down with it.

looking stable on the upside, can construction chemicals, thanks on the upside, only four industry seeing a bit of pressure, technology, energy, health care and basic resources. the range between those are losing and those are gaining, it is not a huge amount. the lowest is about .7% lower. tom: individual stocks to bring to your attention, credit suisse, setting itself up, mending -- reminding us it is expecting a loss. we get those earnings next week provisions around exposures, also additional legal costs. currently down 2%. not catching a break as it tries to navigate the scandals. danone, sales bolstered by the stock division, up 4.5%.

looking to sell off its u.s. unit of grubhub, taking weight -- overall sales from this company down, 3.5% lower currently for this online delivery company. francine: i want delivered groceries more than take away. i should be helping some of those stocks. let's get over to managing editor to look at u.s. financial conditions. >> absolutely. another variation of the idea of positive real yield just about getting into positive territory. that is because an incredible surge recently. they're just getting positive. this is another way of looking at this angle. this is u.s. financial conditions. the plus -- difference between the plus index and lower one as it adds the dutch housing.

one of the themes is that we have seen, tighter conditions, we have seen extremely sharp tightening, yet financial conditions are still more loose -- looser than any time in history until 18 months ago. this is going back the last 30 years, we have the whole dot-com bubble, the tech bubble and 99. with the housing bubble, yet this is an extraordinary situation. even though we are seeing yields go higher, even though we are seeing tightening of the financial conditions, until they get loose, scott's -- stocks will continue to be volatile. that may happen later this year when the fed does properly tightened. >> that does set us up for the

next discussion. what means for assets. now with our architect editor, and chief investment officer wealth management at union. the question of the day is which assets are most likely to be impacted by this move into positive territory, around the edges for real yields when it comes to the tenure? >> i think the immediate consensus among investors is that tech stocks are in danger with this move. they are the epicenter of the bond selloff this year. also at idea of the federal reserve moving to tighter policy conditions, that is not great for growth stocks in general, particularly for these highly valued tech stocks. other things in the pipeline as far as assets that are in the danger potentially would be credit names that have been

benefiting as potential alternative to government bonds that are selling off. now we are seeing treasuries yielding enough to compensate investors for inflation. he definitely see rotation away from those riskier fixed income names, into more the traditional treasuries. it is finally getting something to investors they were not getting before. >> when you look equities and europe, they still have not present a possible oncoming recession. why not? >> and europe's of the heavyweight we've seen in things like mining and energy stocks, we see earnings quite strong in europe, given the high prices. when we look underneath that, you will see more challenge moving forward. >> just 3%.

2.98 for the u.s. tenure. 2.96 as the tenure. it is three points are -- is 3% the level at which you start to seek more exposed profit, the valuations are looking stretched. >> 3%, 3.5% on tenure is going to be the point here. perhaps not the equity market, poverty markets which are very bubbly, pointing out historically when you've got affordability where it is now in the u.s., at this level, you start to see this flattening out, even declining. we think that is something that is down the road for investors in the next few months. bloomberg.com christian, going >> back to that real yield ideas, means we could see

changes in stocks, there such divergences of this is just a matter of time, when, not if. >> it really is this between the two asset classes. this is one of the signals i was looking for potential sign of the bond selloff pausing for now. bonds are attractive enough to investors who are looking for weight to shield against inflation. it is probably not a bad time to look at that idea as well. other diversions place as well between treasuries and other parts of the bond market, particularly at some those emerging markets the previously look a lot more attractive because of that real yield differential. probably less so now that we are hearing u.s. tenure real yields. >> when you're -- the foreign buyers start to weigh in, are we starting to see that now?

>> not quite yet. i think we're are pretty close. we are not seeing foreign buyers come into the treasury market because of the hedging costs are quite high from here. i think what you're going to see is the impact on growth, were 10 year yields go from here, the point christine made is exactly right. what we are seeing is from the spread. credit markets are tight right now. the pickup you are getting to take on the extra credit risk, we think doesn't compensate you, or make it more interesting relative to credit. >> i'm going to play devil's advocate. there's a feeling in the markets that if inflation rises, you cut your spending, which is why we are seeing uber eats and the other one, netflix go down. or, if you are a devil's advocate, you say i don't watch netflix, i watched amazon or apple tv.

>> two very interesting schools of thought in terms of takeaways from the netflix debacle. is it really consumers getting away from discretionary spending and trying to figure out their spending and prioritizing their needs or is it just people going into the real world and stop watching the netflix and meeting people in real life. it could potentially be the latter, seeing as we are seeing restrictions falling away and the activity generally picking up. still, other indications, credit card spending not necessarily showing a decline in consumer spending. perhaps this is a reallocation of what consumers are spending on. they stopped hanging out in their houses, going out in the real world. francine: tom is still fan -- our markets either, norman bowman -- norman villamin, chief

investment officer. tom: coming up. credit suisse warned it expects to post a first loader plus next week to litigation and exposure to russia. more on that next. this is bloomberg. ♪

francine: welcome back to the open. 13 minutes into the european trading day. equities are being supported, euro stocks 500 -- investors evaluating the resilience of the global economy, looking at covid lockdown in china and hawkish messages from the fed. we said that credit suisse expected to post a loss for quarter one. from where we are joined by marion. i'm surprised by that fact they put the snooze out a week earlier. what does it mean for the recovery efforts -- in the worst year since the financial crisis? >> credit suisse has now -- and five of the last six quarters. yes, it is bad. it is bad for a rate, it is bad

for moving on. from the last two years of scandals and provisioning. last year resulted in more than half the management team being replaced. there's been significant changes on the board of directors. at least there being forward, we are telling you ahead of time, we are not going to let you be caught by surprise. they are required to do this. we will have to see how this impacts next week, the analysts now are having trouble assessing how big the loss will be. tom: the stock now down 2.5%. where you looking for next week from those earnings? >> most importantly will be to see how that wealth management businesses been affected in terms of reputational hit, but also with respect to russia and ukraine, was how many individuals get sanction. these are high net worth individuals, this is the crux of the wealth management business. credit suisse does have exposure to russian individuals.

we will have to see how much that business impact plays into the results going forward as well. we did see jp morgan reported earnings last week, significant reserves and business that might be impacted by russian crime. francine: thank you so much, joining us. norman, when you look at what inflation does to some of the banking stocks and what interesting, increase in rates, this should be a sweet spot. a lot of banks are enjoying this. how much volatility will be in the sector. norman: it should be a sweet spot. a big challenge for a lot of banks right now will be on the credit side is to go forward and see the economy. this rising rate dynamic that was put forward in the positive banking sector will give way to the credit issue that should

come over the course of the next year. not going to be a headwind for the sector. tom: what is the case for cyclically oriented stocks. does your preference at this point, how do you justify further exposure to cyclical stocks? norman: we think we are late cycle in the global economic recovery, certainly in europe and the united sates. what we are looking for our visibility on earnings and we think the sectors that can deliver that over the course of the next few quarters are going to be the cyclical sectors. with prices in the chinese commodity sectors because of the strength of their order books. this employs the uncertainty in financials due to their balance sheet concerns looking ahead. francine: what do you do with tech at this point, they are high-priced some of these tech

stocks that you look at valuations and with real yields rising, it undermines some of those valuations. norman: valuations are an issue. tech has been hit since the start of the year, most valuations have come down. i think high quality tech with high quality earnings, big cap tech names to present an opportunity from here. investors will have to deal with multiple the ratings. what you need to focus on is companies that can generate earnings growth the offset much of the writing that lies ahead. tom: how much duration you want to be adding at this point? norman: we are not adding duration at this point. it is getting tempting as we get percent on treasury yields. instead what we are looking to do is manage credit risk. we think that is the next cuda brought in the bond market -- coup de grace and the bond

market. long-term credit, not taking directional positions within the bond market currently. francine: what kind of credit arbitrage? norman: we think there's an opportunity for active credit to kirk now. quite a lot of banks are running some challenges in terms of the credit markets. investors, where they have benefited previously over the last decade or so from falling yields and declining spreads, now you see a lot more diversion going forward. managers who can pick credit are going to be valuable in the current environment. tom: norman villamin, cio wealth management. francine: coming up, subscription canceled. netflix plunges 25% after hours

as it loses customers for the first time in a decade and signals more pain ahead. [indiscernible] this is bloomberg. ♪

tom: welcome back to the open. 20 minutes into european trading

day. gains -- after's day on wall street. technology, autos leading the gains this morning. yields coming up on the u.s. 10 year, the dollar is also softer. up to dust .2%. francine: streaming giant netflix is losing customers for the first time in 10 years, sending shares tumbling post market. despite shows like projection. he says he is planning to include a low price version that could include advertising. >> adding consumers epic would like to have a lower price and have an advertising tolerance get what they want. is something we are looking at now. try to figure out over the next year or two. francine: theoretically, the concern is that -- don't worry

about it, this is the pandemic. it is a bit of a shock they are expecting to lose more customers going forward. >> the key question, have we reached key -- peak netflix and chill. increased cost of living and inflation at the forefront of consumer's mind and competition, other players such as disney+ and amazon prime. netflixes also facing increased cost of production studio and labor, netflix has increased prices this year. disney+ hasn't done that. there are younger platform, trying to increase their market share. also the conundrum of 100 million households who piggyback off existing account holders. i confess, i have been on my brother's account for 10 years. tom: i didn't realize. members of my own family. i didn't realize i was going to

advocate. >> i want to know why i'm paying for it? tom: what is the longer-term outlet then, the change in the business model? >> they wanted gain more subscribers, one way is to create a platform where there are no adverts, they lost 200,000 subscribers. this quarter they are projected to lose over 2 million. it is lost its status as one of the pandemic darlings. headwinds come and go, they were caught up in the tech rep at the end of last year. -- check route at the end of last year. direct to consumer content is here to stay. tom: talk -- top for you. >> i have netflix. content is king.

tom: francine is part of the issue. in terms of the future state sides up we are looking at losses on the s&p, .3%. in the u.s. yesterday, some economic data, now playing at losses of .7%. urine europe, gains of .4%. >> it is interesting, saying interest rates will likely exceed neutral level in the campaign. we are looking at real yields tom:. tom:two point 4% is approximately where you are looking at neutral. after bullard came out that 75 basis point. i explained that on the table, and helsinki, as the country debates ditching neutrality and joining the nato alliance. what does it mean for russia? this is bloomberg. ♪

francine: welcome back to the open. 30 minutes into the european trading day. here are top stories. turning profits on tenure treasury yields for the first time in two years. will -- the end snaps the losing streak. cancel cultures of netflix plunges 25% after hours after losing customers for the first time in the decade. plus, profit warning, credit suisse posting a loss. we are looking at the markets.

real yields rising. tom: particularly the technology sector. we are looking at netflix anyway , overt subscribers being produced, the loss of subscribers. the read more cross -- brought across the tech sector as yields rise, real yields edging into positive territory. let's have a look at how things are shaping up 30 minutes into the session. the benchmark is .4%. we continue to watch what is happening in ukraine and russia, that second stage of the war in eastern ukraine, macron and the central banking picture, continuing to underscore the idea of 50 basis points very much in play for the next fed meeting in may. some of these earnings along with the macro picture. let's see how things are playing out across other sectors. late in the day, the i-8, oil

remains in focuses of the energy composes -- components. technology gaining 1.3%. thanks up 1.3%, despite credit suisse and law morning about a loss in the first quarter. in the red, basic resources, energy and telecoms sound -- down .8%. francine: finland parliament debating whether they should drop neutrality and join the nato alliance. there considering this in the wake of the russian invasion of ukraine. we are joining by our guests. this would be a game changer if they decided to join. >> it would. this very unique debate that would undo decades of foreign policy and make a clear stance

to join nato and the consequences of the war in ukraine. we are joined by elina valtonen. you are party of the national coalition, you have made it clear you are in favor of joining nato. the obvious question is why now? >> i think the war in ukraine has showed everybody that we need the deterrence that nato brings. also, finland and sweden would be a good addition to the alliance. >> you sweden, finland, both of you will make a formal decision by the end of june, we are talk about weeks not months. why are you expecting from the debate today? >> probably a lively calm debate in the finish way. -- finnish way. >> to me, what is striking, this is the political level, when you look at the conversation, it has

completely shifted from no we don't want to do it too maybe it is a risk to yes we should join. what is pushing this? >> i would definitely say the finnish people have taken the lead on this. we have been doing closely with nato, we have strong incorporation with many nato countries. >> the term neutral is used differently. >> we are part of the european union, we have agreements with different countries. it is natural. >> you have this huge land border with russia. they have said nato is a threat, be aware of the consequences of this. are you worried about this language when it comes to finland, with that huge border? >> we will -- [indiscernible]

we have strong defense forces. i think with we will be a good addition to the alliance. >> you are not moved by any potential threats? this is something you say is a foreign country, whatever russia says, we are going to follow through. >> i don't think russia will be surprised. >> as a result of the war, i guess. essentially, they push you into this. >> also because there already in their minds, a nato country. we cooperate closely with nato and different nato countries. and we are in the european union. i don't think it is a huge surprise to them. >> this white paper that came out last week, presents the basis for this, also telling us,

frankly russia's foreign policy issues could be the biggest threat. so far, it was clear, -- what has prompted that? >> the way russia has acted in this war. it's been an eye-opener to everybody. [indiscernible] >> both guarantees of that. you have -- we think of the people of ukraine, i wonder, when you see the situation on the ground, as a member that potentially join nato, how does it make you feel? we have seen at times, if you don't belong to alliance, you are left to your own devices.

>> you never know happens in the future. i wouldn't directly compare this to ukraine. [inaudible] >> including energy? >> i think so. let's see what happens. any other way, [inaudible] i think we will be making a decision which will decide our future for decades to come. not so much on the situation in ukraine. >> thank you for joining us on bloomberg. especially on the state, a very important conversation to be had. in many ways, the change of fate and european defense happening

in real time with the situation in ukraine. entering a crucial phase in the battle for donbass. tom: that historic shift from finland towards the nato alliance. murray at their with elina valtonen. don't miss today's big take, along the same lines. kremlin insiders are quietly questioning the costs of pollutants war in ukraine -- putin's war in ukraine. francine: does it mean there could be a regime change? coming up, open sponsorship, and tennis superstar serena williams. talk with -- next. this is bloomberg. ♪

francine: welcome back. 40 minutes into the european trading day. gaining 14 -- .4%. investors weighing the impact of riskier assets when they have netflix to contend with, covid lockdowns and china and a hawkish fed. europe stocks.

tom: she's been dominating the tennis court for more than two decades, no serena williams is taking on the business world. she is throwing her support behind open sponsorship, it is a marketing platform that provides -- connect friends with athletes. joining us now is open sponsorship ceo ishveen jolly. talk to us about what you do and what this funding from serena williams will allow your business to do in terms of growth. >> thank you so much. open sponsorship, where the largest sponsorship -- the largest brand -- as a former sports agent, i realized there was a spot in the market where it was tough to find the right athlete subdue the deal, make sure it joined her why butte,

why is it not a platform that does this for you and makes it secure and easy. that is what we started. obviously, we recently closed a great brand, serena williams was a big part of that. sales marketing, expansion, expanding into the u.k., thinking about new verticals. francine: it is such a brilliant idea. we were joking if we had a company, or a brand, we would choose sports. it is not easy. you have to match with your values. there's been some a scandals, how do you protect the brands, being associated with someone who go south. >> i think those cases are usually the anomalies. of course it happens. what's interesting, the trends of the way the sports and

sponsorship are going, where it is usually shorter term. at the top 1%, all of her endorsements are multiyear. people are writing that way. a lot of the stuff we do, the top 1%, it is short term. let me work with a couple of athletes during the games. today, you probably don't even remember. we are seeing less risk. i'm going to work with you during this time, it is unsocial, and it is forgotten. and we pick up the next star. some people would argue that is not the best way. my mind, it works. it avoids a scandals and legacies. tom: i understand why. many of those will not be instantly recognizable names.

lebron james is also on your list. it's easy for me to reach out to others a list sars and say let's do a deal. >> that's a great question. i would say the main reason is there's no risk. 50% of our athletes are signed up by agents. it is hard. it is easy to find people for like nike or coca-cola. if you think about when munis repertoire brands or renaldo, -- verticals you never thought you'd be talk about unicorn companies. when these companies are born, fintech or any kind of tech, you have all the relationships, for think of performance marketing,

they come from a different background. there the conduit to a lot of these tech companies that have huge budgets that don't necessarily go to these sports conferences there the ultimate way of getting deals done. francine: we should have a branded best of her. -- brand ambassador. this is a transaction between brands and sports personality. i've always been fascinated when you look at some of the brand ambassadors, how did they choose that luxury watch company and not another company. talk us through the thinking. >> ultimately, it comes down to the check size. can they afford to pay the premium that is required. a lot of these athletes, if you think about 12, they have few days got -- you days off. -- think about golf, they have

few days off. with these athletes are posting on the social feeds. that is so visible to their fan base. it can be a big backlash, if you are begin, why are you posting this. you always talk about healthy eating, now you're promoting this product. sensitivity is a big part. convincing brands is a big part of it. there is so much -- so many ways you can spend your marketing dollars. you should spend on sports and athletes, is a bit of a check. tom: ipo in the plan? what is the timeframe? ishveen: there is still a lot to do yet. francine: we tom: need a brand ambassador. tom:tom: we still need to pick one. francine: we don't have the budget. tom: ishveen jolly, ceo of open

sponsorship, backed by serena williams. francine: let's get to the first world news. laura: sergey lavrov houses as a second phase of the works in ukraine. early indications are he could go better for russia than the first. after a ferocious night of artillery bombardment along 300 mile front line in the east, russian forces took a pocket of territory, including s of the on tuesday. according to the ukrainian regional governor. as a result, they threatened to hold as much is 40% of ukrainian troops in the region. prime minister boris johnson has -- apologize to u.k. parliament for breaking covid roles he devised. he is already paid a fine for attending the downing street events on his birthday. he may face more fines when they complete their investigation

into other gatherings during lockdown. >> let me also say, not by way of mitigation or excuse. but purely because it explains my previous words in this house, that did not occur to me then or subsequently the a gathering in the cabinet room just before a vital meeting on covid strategy could amount to a breach of the rules. i repeat, that was my mistake and i apologize for it unreservedly. laura: french and nationalist leader marine le pen are gearing up for their life debate wednesday evening, a high-stakes event just days before the final ballot of the presidential election. more than 16.5 million people tuned into their previous debate in 2017.

at 2.5 hour sparring match in which the two candidates traded insults and fought over the sluggish economy. global news 24 hours a day, on-air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. francine, i know you're going to be all across the french elections this weekend. francine: i will be watching on london time. i usually force the kids to watch as well. i remember it five years ago, she has become enter her own in terms of what she wants to do. they have to do a lot more to protect citizens. it may work. tom: she's been doing her homework. showing that -- the latest poll 55-45. how realistic these poles are. the margin of error. francine will be doing special

coverage throughout the weekend. across the final presidential vote. coming up, positive 10-year treasury yield for the first time in over two years. we look at the broad implications for markets next. this is bloomberg. ♪

francine: welcome back to the open. policymakers debate uncertainties about the economy. the bond market takes another step toward pre-pandemic reality. yields climbing above zero for the first time in two years. marcus, when you look at what's happening, why are we so surprised this is happening, if we have a hawkish fed? >> indeed. i can't really see or hear anything. as far as i'm concerned, the u.s. fed is going to hike as much as it can. until it stops and it will break the economy. that unfortunately is what is to happen. it could have high total, if

they hide too much. that is what central banks have to do. tom: how do you follow what we are seeing with the fed and the moves in rates versus the boj insistence that is going to step in and cap yields in japan. that rate divergence we continue to see? >> all i can say, they have taken on the bank of japan and usually lost. i think they will continue to buy as long as they see fit. that will be quite a lot longer now than people would expect. they are not going to break. they may change, but they are not going to alter their approach. you have to understand, inflation is what they want and need for their economy. i don't see the weakness in the

end scaring the japanese so much. they have a much stronger outlook. francine: you wrote a brilliant piece saying who will buy bonds that the fed no longer wants. how much dislocation on the market will we see because of that? >> i just think the fed has more control, then people give them credit for. i think they will be able to play with it. the reality, there plenty of people, they're probably going to buy bonds rather than stocks. i don't see too much, 3% or something, there will be domestic buying. there needs to be domestic. it's not going to be china or russia. the point is the fed can change

the yield curve before wants to. the total alteration is much shorter in u.s. treasuries. tom: we have to leave it there. that is it for the european market open. markets up .3%. this is bloomberg. ♪

>> we have revised our projection for global growth downwards and both 2022 and 2023. >> china, supply chains, new variants, what happens in ukraine. those are giant elements. >> this is "bloomberg surveillance: early edition" with francine lacqua operating -- with francine lacqua. francine: here's what's coming up. charles evans expects the fed