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tv   Bloomberg Markets  Bloomberg  April 27, 2022 1:00pm-2:00pm EDT

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kriti: let's dive straight into it. overall markets higher in the equity space after a lackluster report out of alphabet. better report out of microsoft. looks like a reaction to what you are seeing on the back of yesterday's nearly 3% decline in the s&p 500. we have continuing yields up higher seven basis points. you have the euro-dollar, when you see that interest-rate move, you are seeing the dollar even stronger. parity potentially on the horizon. we will end with crude down .8% even as we talk about the inflationary environment. growth concerns are weighing on the commodity. we start with the tech picture. microsoft and alphabet shares moving in opposite direction. here is bloomberg intelligence senior analyst.
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46% growth in the asia business. how long can they keep it up? >> police for a couple of quarters there should not be an issue. --at least for a couple of quarters it should not be any issue. but with the scale and size, we think the growth rate goes down 3% to 4% potentially in subsequent quarters. kriti: i'm looking at $104 billion on microsoft balance sheet. how much more of that money can they spend? not does not take a genius to know that a dollar today in an inflationary environment is going to be less tomorrow. are they going to be spending that money? anurag: yes, and in addition to that they would generate 60 been the dollars.--$60 billion. we expect a majority of that will go with a combination of acquisitions and buybacks. so far they have had no problems getting the acquisitions through antitrust regulators. but if there's any hindrance in their ability to acquire more entities, we think the bulk of that is going to go through buybacks. kriti: anurag, talk to us about
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the china of it all. in this slowing growth environment, a lot of concern from covid lockdowns in china, how much of that gets through to microsoft shares? anurag: for microsoft it is not that big a deal. it is a bigger deal for apple and other manufacturers. it will be a big issue for them and less so for microsoft. kriti: anurag rana, always a wealth of information when it comes to microsoft. let's switch from microsoft alphabet, reporting aware first-quarter-- a rare first-quarter miss. here with us is jackie dollars. jackie, i'm curious about this alphabet story. is this the kind of a end to that monster tech growth we were seeing? none is alphabet signaling more pain ahead? jackie: it was a rare mist because alphabet typically is viewed as the steady eddie of tech stocks.
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even here we were able to see that they were not immune to the effects of the war in ukraine and the broader pullback in the digital ad spend that reverberated across europe and is starting to trickle down into that regional revenue which dipped compared to last quarter. questions with they had to answer was related to youtube ads. this is a bright spot for the company. it was supposed to be the next leg of growth. and now they are facing much tougher competition from tiktok. the question is how do they grow the user base and ultimately monetize it? kriti: let's stick with that theme. i don't know if you are an active user. i'm not an active user of tiktok, but maybe i should be. this seems like a demographic change, something that meta wonders about several quarters ago and got punished for it.
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a really key point in terms of trade negotiations between the united states and china, how much regulatory scrutiny hits tiktok. how much does alphabet have to worry about here? jackie: when they are pinning their most promising area of growth on the short form video, which tiktok excels at, youtube's answer is there product called shorts. they have offered this ad-free in the past, but what they made very clear is that they plan to pull the free aspect back. advertisers are interested in this type of short form format. they want to monetize that you survey -- monetize that user base. that is really impressive growth, four times bigger than its size last year. what they are looking to do here is figure out ways how to support content creators and ultimately grow the user base that will take them to the next
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level. kriti: bloomberg's jackie davalos joining us to talk about alphabet. we thank you as always shares of meta platforms lower due -- let's bring in michael nathanson, a senior research analyst. we really appreciate you joining us. what kind of precedent has also been set for meta? >> a president of concern. -- precedent of concern. they want about slowing growth in the first quarter. alphabet came in lower than forecast. people are concerned about the second quarter guide. this is despite just 90 days ago. kriti: i want to ask you about the tiktok of it all because that comes up over and over again. it comes up with facebook. to me, what is interesting is
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that tiktok came up a lot during the trade war and it was a piece of the trade war negotiations that was not taken that seriously. in terms of ad spend, is tiktok the next social media platforms? michael: it is a place for a massive amount of engagement. they can monetize -- is very engaging format, very short form. people don't want to leave that enronment and click out and go watch an ad. it may not be the best format for monetization. you heard that from you too. they are exploring how to monetize it. they have 30 billion views, but how to monetize it. meta has the same question. it is an engaging format, but hesitate dollars share out of youtube -- but does it take dollars share out of youtube and meta? we don't think it does. it was not much of a focal point
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the past two years. because meta raised it, it is now part of the conversation. people are concerned that maybe this is the beginning of a real slow down for you too. kriti: michael, i feel like within the entire tech space, you did start to see perhaps meta platforms, twitter, snapchat, pinterest, even alphabet take on this role as a more economically sensitive business compared to the likes of apple and microsoft. talk to us a little bit about that discrepancy. how exposed are these social-media companies to the slowdown you are seeing in europe? michael: no, i wrote a note this morning, that was my point. these are advertising companies, and advertising companies are always in a macro environment. interest rates where they are, energy where it is, inflation where it is. discretionary spending because of a surplus now coming to an end because of fiscal stimulus.
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it makes perfect sense that you will see a slowdown. other companies you talk about, corporate budgets seem pretty flush. i expect that to happen when facebook, google miss last night, alphabet missed. not a surprise. numbers came down. they are planning the economy and the economies pictured by the negative fact -- the economy is pressured by the negative factors. kriti: what is the catalyst year? michael: the catalyst for the broader market is looking at these factors in the rearview mirror. supply chains being fixed. energy prices coming down. consumer confidence coming back up. it is all tied together. what drives these stocks is the earnings privations training more positive. -- earnings privations training more positive.
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it is the first time in years we have had to cut numbers for alphabet. cutting for meta and snap a quarter ago. we get to a place where numbers are too low and expectations can get better. that will be a couple quarters away because of all the factors that you guys talk about everyday on bloomberg. kriti: what does the cash of this all have to do? there is so much cash in these tech companies -- apple, microsoft. when you look at alphabet, $133 billion. meta platforms, $48 billion. what do they do with all that cash? michael: that is why i buy on both of those stocks because you look at valuation, take cash out of it, these stocks are trading low the market multiple. i don't see a lot of m&a because of regular toy pressures. alphabet had abide that-- alphabet had a buyback. meta brought back a ton of stock
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in the fourth quarter. you get share repurchases. the big m&a is off the table, which is good. these stocks are not expensive. they are not blowing up the way netflix blew up. i think they're really good multiyear. we know what is in front of us, slowing macro. to your point on cash, cash is an opportunity for these guys to buy back stock. kriti: i want to hit why they have so much cash in the first place. with the record issuance from these big tech companies across corporate america, a lot of these tech companies are able to borrow at rates in 2020 near zero, or with limited premiums, because of extremely low interest rates from the federal reserve, but also similar because of the safety of them. they were able to borrow at rates similar to what u.s. government borrows at.
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do we see more issuance in big tech futures? michael: no, they issue because they could, but look at their business models, they are cash machines. as much as you want to find a bear call in selling alphabet, the model is too good. i don't think the cash balance grew because of issuance. these guys have a business model that prints money. we take the long-term view here. we know the new term is bumpy. but i'm very confident that search is going up in value every day as an advertising platform. kriti: michael nathanson of moffettnathanson, always a pleasure. here is mark crumpton with "first word" news. mark: a warning from russian president vladimir putin. he told russian lawmakers there will be "a lightning fast
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response" if the request interferes with the war in ukraine. that follows comments this week by the russian foreign minister sergei lavrov there is a serious risk of nuclear war over ukraine. united states called lavrov's marks "the height of a response ability." federal agents have arrested the head of archegos, which clamped after the market turned against its position. bill hwang and his former cfo have been charged with fraud. the collapse led to billions in losses for investors. former president trump is a killing a new york judge's ruling holding hint--appealing a new york judge's ruling holding him in contempt of court for failing to comply with the subpoena by the state attorney general. the challenge, filed wednesday in manhattan, seeks reversal of a naval 25 finding that mr. trump violated a court-order to deadline to hand over records to
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the new york attorney general letitia james. current and former world leaders have gathered in washington to pay their respect to former secretary of state madeleine albright. led by president biden and former presidents obama and clinton, about 1400 mourners packed washington national cathedral to celebrate the life of the first woman ever hold that post. madeline i rate--madeleine albright died last month at the age of 84. 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. i am mark crumpton. this is bloomberg. ♪\
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>> our guidance here is very clear -- to pay in rubles is a breach of our sanctions. we have around about 97% of all contract that explicitly stipulate payments in euros or dollars. companies with such contracts should not exceed to the russian demands. this would be a breach of the
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sanctions at a high risk to the companies. kriti: this is "bloomberg markets." i am kriti gupta. that was ursula von der leyen, european commission president speaking earlier today. gas suppliers have paid in rubles even after russia said it stopped natural gas flows to poland and bulgaria. let's turn to annmarie hordern, and a senior energy trader at cibc private wealth management. i want to draw on your experience covering the oil market, covering this region. i'm curious about what the president -- what the precedent is here. what are europeans and governments preparing for when it comes to halting gas flows? annmarie: there is no prece dent for what we are seeing today, and also that russia started with poland and bulgaria. it looks like putin is testing the waters a little bit before
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going after the massive players. what comes to mind is germany. we heard the german economy minister, he said 35% today they are still getting from russia. we have seen flows disrupted in the past. there have been feuds before, between russia and ukraine, notably in 2009, the depths of winter, very cold and slovakia had to tell factories to shut down. that would be one of the harshest issues we could see europe go forward. we are not there yet. the weather is on europe's side. the issue comes to if more countries are going to be added to this list, and european countries do not want to pay in rubles and putin cuts off the, they will have all--putin cuts off the tab, they will have a hard time next winter. kriti: build on what annmarie just talked about. we heard from the french finance minister and him supporting an
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oil import ban. you heard j.p. morgan call for -- how high can roy price his coat?--how high can oil prices go? >> i don't think that is on the table. demand instruction probably starts around 150. wti start studying more extreme as we move higher. that is not to say we cannot see some outsized shock, in the event, to be clear, that all russian gases -- gas and oil finds its way to end markets. right now russian oil is finding its way to end markets. it is finding its way to india, finding its way to china. we all assume this was going to be a bigger event than it is turning out to be right now. with less than a million barrels of russian crude being withheld
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from the market. that potentially exists, but it exists in an extreme environment where everybody is a sanction, and that would require secondary sanctions from the u.s. to put that through. kriti: to rebecca's point, demand destruction is going to pressure prices a little bit lower. is that actually what is playing out? annmarie: they certainly would like lower gas prices. the united states is doing a lot to try to attempt to bring down prices right now at the pump for consumers, because this is the most important issue that they are facing politically as they head into the midterm elections. we saw them expand the ethanol piece. they did that a few weeks ago. they tapped teh sdr a few times to lower the price. there is talk on the hill about doing more through legislation before november to bring down gasoline prices.
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but at the moment people are still taking to their cars and getting on planes. but at some point there potentially could be demand destruction. we have yet to hear from this administration actually encouraging people to not drive. no one wants to come out -- politically that would be very challenging to tell people to try to ratchet back their use. kriti: something else the administration has been vocal about is getting the american shale sector to ramp up production one of the hesitations to do that is volatility in the market. is it worth investing if two years down the road you don't get the return on investment? rebecca, is that a possibility, the ramp up, something where markets are pricing in? rebecca: oil markets are pricing in a pretty consistent ramp-up in production, but not in excessive. no one is changing estimates from a was built into last year's production. they are not saying, ok, now we
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will grow at 10%. there was always going to be a wrap up--ramp up at the back end of the curve. but it is not accelerating this year into next based on crude being higher. i think that is not going to change for a couple of reasons. first of all, there is a serious amount of cost inflation with services to get rates working and frack crews out to drill. there is our cost constraint at play. secondly, these are longer-term turnarounds, and they will not profit on that prudential months -- on that crude until months where the environment might be different. i nothing anybody in the oil industry -- i don't think anybody in the oil industry wants to make a bed. they have made that in the past and been burned. and in the event that leases are more expensive, or we are going to try to support the fossil
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fuel industry, they are very much intent on weaning off of it and that is another restriction. kriti: it is one thing to ramp up production and ease gas prices and a completely other think to actually make money for a sector that has been burned and burned again. rebecca babin and annmarie hordern, always a pleasure. this is bloomberg. ♪
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kriti: this is "bloomberg markets." i'm kriti gupta. something that caught my eye, two things that usually don't go together, crypto and mortgages. a lot of the crypto volatility we saw early on, five, six, 10 years ago, elon has dissipated. --a lot has dissipated. does that make it a more acceptable currency, a commodity?
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something that is starting to seep into the real-estate market and we are seeing mortgages secured in part by bitcoin holdings, in theory him -- ethet reum holdings. there was a question about what happens with future mortgages. can you secure a mortgage with something that is so volatile and which some people have said could go as high as 100,000 per dollar to zero? coming up, it's a mixed bag for earnings. we will talk about canadian oil sands and the fall of boeing. this is bloomberg. ♪
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mark: welcome to the bnn and bloomberg audiences. i am mark crumpton. ursula von der leyen is saying
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giving into moscow's demands to pay for gas in rubles is a breach of sanctions. european companies have been scrambling to respond after russia cut off gas to poland and bulgaria since those countries did not pay in rubles. in myanmar, a court sentenced to oppose the leader to five years in prison on corruption charges. she was convicted of accepting bribes in return for political support. she has been sentenced to a total of 11 years behind bars since the coup in 2025. bloomberg green convened top leaders to work on solutions to shape the future of our planet. white house national climate advisor gina mccarthy told bloomberg how president biden believes his agenda fits in with the war in ukraine. gina: his belief is, and he stated it every time he talked about oil and gas prices, is
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that our only way to have independence, our only way to have security against challenges that dictators like putin present is to actually grab that clean energy future. that is the only way we are going to make this work. mark: early in his term, president biden promised to cut the carbon emissions of the second largest emitter in half by 2030. a severe disorder in children is spreading. at least six states are reporting confirmed or suspected cases of pediatric hepatitis that matches the description released last week by the centers for disease control and prevention. more than 160 cases in otherwise healthy kids have been reported from a dozen countries. some children have needed liver transplant. health officials are not sure what is causing the illness. global news 24 hours a day on air and on bloomberg quicktake. powered by more than 2700 journalists and analysts in over 120 countries.
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i am mark crumpton, this is bloomberg. >> i am jon erlichman. >> and i am kriti gupta. you are seeing the stock market higher by 1.3% but not a risk on mood across the asset classes. yields higher by seven basis points. what you are also seeing is a stronger dollar. does not get in the way of the global growth story. that is the concern, when you see the crude market down 7/10 of 1%. jon: no doubt. outside of that macro story of debt by we have had these earnings stories to navigate. one of the things investors wanted is the willingness on
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companies to hold their hands and make them feel confident. we saw that today with visa with respect to card spending. we saw it with microsoft and that cloud business. we also saw it with teck resources benefiting from the boom in commodity prices. shares in canada are up but they are dealing with commodity issues and the slowing global economy which is weighing on the outlooks. you are getting different flavors across many industries. kriti: let's stick with that theme of earnings. today, bob dole says rates factor into everything. bob: this year is a tug-of-war, the tailwinds earnings and valuations, which is directly rated to interest rate increases. kriti: let's dive into a single name earnings story. boeing tumbling 15% making it the biggest drop since june 2020. this after the playmakers
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revenue was worse than estimates. joining us is an expert, george ferguson, analyst for bloomberg intelligence. thank you for joining us. the boeing ceo has 400 planes in storage. is that the ticket out of boeing's underperformance? george: i do not necessarily think it is the ticket but a big portion of recovery. that is a lot of airplanes stored in inventory that absorbs cash. boeing will do a better job at generating cash as they get those planes delivered. the challenge is a lot of them, we think over 100, 150 or so, are slated for chinese airlines. china still has not authorized the max for flights inside china. that is a big challenge and that is why they talked about that on the call today. china's willingness and the timeline for reauthorizing the
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max there. jon: in terms of this inflationary impact, george, where do we see that mostly impact a company of size and scale like boeing? george: boeing i think can find a way to sidestep a lot of the inflationary impact. a lot of their supplier contracts are longer dated, they buy materials over multiyear periods at fixed prices. i think boeing is in good shape for sidestepping the initial inflationary impacts. if they persist, they will have to reset those contracts at higher prices, but right now they are ok. it is a function of getting deliveries up to generate cash. kriti: speaking of deliveries, i want to talk about who is buying these planes. china was one of boeing's biggest customers years ago. now only making 3% of revenue. who is buying boeing planes?
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george: i think that is a good part of the story. we need more of it. boeing went out last year and sold a large number of maxes to customers like southwest, united, ryanair had an order. we see successful airlines around the world that prefer to operate the max. in our view, that gives us confidence the max is a good airplane and in demand. the product itself is not the challenge but you are right, china is a large portion -- in a typical year -- airbus drove deliveries last year into china because china keeps taking airplanes despite weakened demand. it hurts not having china take boeing airplanes. they took the majority of narrowbody planes before the pandemic from boeing. that is why it is challenging right now to have the airline
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not be able to fly in china. jon: george, the bloomberg team has been watching the stock slide and what that means for the overall valuation of a company like boeing versus an airbus. what does it mean when you're talking about boeing slipping below its rival in the eyes of the market in terms of how strong this business is? how does that play out in the world of booking orders and talking to customers? george: there is probably a perverseness to that. airbus has done well, executing better than boeing right now. but airbus, because customers could not cancel orders, the max delays allowed canceling orders, boeing has more availability in its delivery skyline over the next few years than airbus. that is one of the reasons airbus wants to raise production rates so they can free up spots to sell more airplanes. it becomes this challenge of if
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you have to wait five years for an airplane, you might go to boeing who can get in a couple of years. but airbus has executed better than going through the pandemic and through the initiation of the new narrowbody airplane. it shows. jon: george, thank you for the breakdown on boeing. george ferguson from the bloomberg intelligence team. we have seen that big slide in boeing shares but one of the best-performing groups this year has been the energy sector. in canada, we have seen formally encanta, benefiting from higher prices of oil and tripling the dividend. let's get more from our reporter. this will come as no surprise to anybody who is watching what is happening in the oil stand this year. tara: no, that is certainly the
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case. if we look at wti, over $101 per barrel. i was looking at the breakeven point and it is $35, $36 per barrel. they are possibly targeting $33 by next year. hiking the dividend to $.42 per share is a 300% increase and it is starting next quarter. that is not all. they are continuing to pay out to shareholders, setting up a new framework. they are going to target 50% of free cash flow to shareholders through dividends and buybacks until they can get the net debt down to $4 billion. that will be a 100% payback for shareholders. synovus energy has deep pockets. this was a deep corridor.
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profits of $1.6 billion which is $.81 per share. the same quarter last year it was $220 million or $.10 per share. huge increase in this beat analyst expectations. if we look at cash flow per share, $1.30 per share, up 132% from last quarter and analysts were expecting something from $1.08. definitely beat expectations. kriti: let's talk about the return to the company itself. not only did the triple their dividends they also increased capital expenditure at a time when a lot of companies are hesitant to make long-term investments. cenovus not shying away from it. tara: it is not. it is increasing what it is going to be spending by $300 million. this brings that total spend between 2.9 billion dollars and $3.9 billion. they are saying it is due to
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increased costs. this is where it gets interesting. they are talking labor cost increasing, some of the covid-19 costs above and beyond, inflation, supply chain constraints. this is something we could expect from different energy companies and other companies as well given the higher costs all of us are facing as well. jon: no doubt. kriti: go for it. jon: sorry. i was going to ask, on the others of the fence the fact they are committing so heavily to shareholder storylines is a reminder that it has been not exactly the environment to get into the business of pumping a lot of energy. tara: we have seen a number of producers being hesitant to do so. i think that has been the theme. if you think about canadian producers, they are lean and mean after so many years of oil being low and it affected them.
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we have seen so many layoffs, especially in calgary. at the price of oil up incredibly high we are talking $101 and breakeven for cenovus. this is a lot of free cash flow but even with that there is hesitancy to increase production. we will have to see how that plays out. kriti: tara weber, wealth of knowledge joining us from bnn bloomberg. coming up, some covid cases in china might be starting to stabilize. that still ahead. this is bloomberg. ♪
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kriti: this is "bloomber markets ." i am creating gouda with jon erlichman -- i am kriti gupta
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with jon erlichman. hong kong is the last of the economy is ranked as the city experiences the worst epic ever. china near the bottom amid its battle to stamp out omicron. this is such a big issue for markets. can exports get out of china making their way to the rest of the world? jon: certainly impacting so many different markets given the economic heft of china. let's get more perspective on china's covid response. amber d'souza epidemiologist, at the johns hopkins bloomberg school of public health joining as. in terms of china declining on the list of resilient economies when it comes to dealing with covid, as we watch the situation playing out in beijing what can we say about the effectiveness of those extreme lockdowns we have seen in shanghai? what can we say based on what we have seen unfold these last few weeks? amber: china has a severe zero
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covid policy. they have had dozens of cities in china in lockdown. we heard the most about shanghai which has been in lockdown for a full month. initially it did not seem to be controlling the rates but shanghai has seen decreases the last two weeks. rates have decreased substantially and there were less than 50 deaths in shanghai recently, which is one of the thresholds. they have signaled they may decrease those restrictions in shanghai. kriti: can you talk to us about the testing regime? how is that going? amber: so, yes, testing is very robust in china. they are having very widespread testing of millions of people in beijing and so far, we have not seen rates being that high that would lead to severe lockdowns in beijing, but it is a concern. if rates increase, they will see that.
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they have seen a sizable proportion of those testing positive are children and those in day care. they can target some other strategies to where they are seeing cases. jon: in terms of what you're going to be watching most closely, obviously, as kriti was alluding to, the markets are watching whether or not china can get things under control given the size of that economy. what is going to be key to keep an eye on? amber: in china, you have to not look only at the deaths but he was testing positive because they have had a strategy where if the number of positives are increasing, they go into lockdown. that is we are keeping an eye on, comedy positives there are. so far, it seems they are containing. they are finding at able to quarantine the positives. we will have to monitor whether that remains the case. kriti: what about the ramifications for the chinese public in particular?
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i think the markets are concerned about exports and supply chain issues. but we also have to talk about citizens themselves. are they dealing with things like food shortages, for example? amber: indications suggest they are. the situation is somewhat dire. from a western perspective we have more cases than they have in china, but there is a different political strategy of response. while the number of cases in the cities is not that high given their different political response to cases, it has led to a situation where there are food shortages because the lockdown has been so consistent. when we have lockdowns in the u.s. people were still allowed to go to the store. that is not the case in cities here. that is very different. jon: amber, kriti mentioned the resilience rankings. does a country's ability to be
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resilient based on past efforts go along with the unknowns allow them to be resilient? amber: i cannot guarantee. i think they have shown in the past that once they reopen they are able to get back into action quickly. one would hope that would be the same economically this time when they loosen restrictions. and there is tremendous pressure within china to loosen restrictions. if the cases continue to decrease, i am hopeful we will see those restrictions ease. kriti: amber d'souza of the johns hopkins bloomberg school of public health, thank you so much. michael bloomberg, founder and majority owner of this network, supports that school. quick check on the markets. s&p 500 back higher again, up 1.3%. does it consider continuing into tomorrow as we come up with meta earnings after the bell? coming up, general motor's ceo
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seeing positive movement in the supply chain backlog. we have the details. this is bloomberg. ♪
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>> live from toronto this is "bloomber markets." i am jon erlichman alongside kriti gupta in new york. for what it's worth, general motors finding a way to get some numbers that were crowdpleaser's on wall street as they navigate a whole host of issues. providing an update on their electric vehicle push. projected by 2025 saying it will make 2 million ev's a year and getting there as quickly as possible against rival ford. in terms of the bolts they are looking to sell, 50,000
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including a record number of deliveries in the united states, 40,000. mary barra, ceo of the company, spoke with bloomberg about some of those key issues we were wondering about heading into earnings season, including china and the supply chain. >> when you look at the supply chain it is complex and we are looking with the lessons learned from the semi conductor, from covid, of how do we need to strengthen the supply chain, make it more resilient? there are steps being taken on balances. what is the way to make sure we are not constrained like we have been the last year, year-and-a-half? > the heart of the matter is you have to build a better battery. i need an update. mary: we think we are very competitive right now with the batteries we have and we think with the chemistry we are launching with ltm, it is 40% less expensive. the silverado will have 400
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miles of range and that is less than a year away. we think we are in a leading position with our battery chemistry technology and we are not stopping. we have more work. we are working not only with lg but solid energysolutions and other partners. i have been in meetings just in the last several weeks of talking to new battery makers because we want to make sure we have the best technology from an energy density, efficiency, cost perspective. the beauty of the ltm platform that is the foundation for the hummer and the lyric and all vehicles going forward from an ev perspective is it is chemistry agnostic. as we see opportunities to use new and validated chemistry we can do that with minimal disruption. jon: mary barra speaking with tom keene earlier today. we are going to get flooded with so many different models. i think about gm with the
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electric chevy blazer is one example of the vehicle they are betting big time on. in this battle, which we often tell through the story of tesla, very clearly watching gm versus ford will be fascinating. kriti: both will be fascinating. you heard mary barra talk about how secure the supply chain is. it is not just about china and the chips needed, it is about lithium, it is about cobalt in africa. these are questions people are going to have to ask as more people invest in the ev space. localizing supply chains. we will keep you updated on all those updates. for jon erlichman in toronto i am kriti gupta in new york. this is bloomberg. ♪
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mark: keeping you up-to-date with news from around the world here is the first word. i am mark crumpton. russia says it stopped natural
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gas flows to poland and bulgaria, making good on the threat to cut off buyers if they refused vladimir putin's demand to pay in rubles. some european companies have already given into the ultimatum which triggered a warning from european commissioner ursula von der leyen today. >> our guidance here is very clear. to pay in rubles, if this is not foreseen in the contract, to pay in rubles is a breach of our sanctions. companies with such contracts should not concede to russian demands. mark: meantime, president putin threatening "lightning fast retaliation" against any country that tried to interfere in russia's invasion of ukraine. russia has exchanged jailed american trevor reed for a russian pilot. the former marine was serving nine years after assaulting two police officers. he was swapped

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