alix: it is 30 medicine to the u.s. trading day. the s&p's tipping point. the market slam approaching the 4000 mark with exodus from equities. dollar jumping on safe haven joys while rough ale bostick advocates for just 50 basis point rate increases. insurance headache. allstate bets on the higher rates to customers as inflation hurts earnings. we will speak to the ceo tom wilson. from new york, i'm alix steel, with my cohost in london guy johnson. welcome to "bloomberg markets." it is a pleasure to be back. it has been 15 long weeks. it is a pleasure to see you. guy: it is fantastic to see you.

we have been missed -- you have been missed. everyday we played that intro, guy johnson and alix steel, so you have been in our thoughts. . it is so fantastic to have you back, and we've got so much to talk about. your journey over those last 15 weeks, we'll talk about the details in just a moment. i think there's lessons in all of this for all of us. so let me just say, from the whole team, from everybody, it is great to have you back, and we are going to look after you and make sure that your transition back into work is as easy as possible. so let's get on with that work and talk a little bit about what is happening today. we've got data that is breaking. we will go to alix story -- we will go to alix's story in the next block because i think it is relevant to the u.s. and the

economy entirely. u.s. continuing to build inventories, understandably considering the trade story around the world. that is the data right now. markets firmly in focus. alix:alix: all of that really leading to the question of the day. what is below 4000 for the s&p 500? what kind of washout are we going to see if we break below that? katie stockton is founder and managing partner of fairlead strategies. we wanted to get the technical take of that. if you go below 4000, what is next? katie: welcome back to you. the level i was watching was 4200. 4000 to meet is basically a foregone inclusion at this point. the 4200 level was on three different technical factors, one being a fibonacci retracement level, and those are very common ways to discern importance on the charts. with this report we received,

the s&p 500 support level based on the same fibonacci retracement is roughly 3815. we use support levels as a gauge of downside risk. they are not really predictive, but they do show an area of potential buying pressure in a chart, so we believe that with the breakdown, it does increase risk perhaps to that 3815, but along the way we will always be looking for signs of downside exhaustion that are more than just short-term in nature. guy: michael hartnett bank of america says the average for most people since the start of 2021 is 4274. you get below 4000 and a trap door opens. i hear what you are saying about the fact that the key level has already broken, but how significant is 4002 a lot of people out there? a lot of people bid this market up. dipping below 4000 could be a big line in the sand for them. katie: it is a round number.

anything that has that influence on market sentiment, it is a big deal just by the nature of that being a round number. in the same way, 10 year treasury yields clear you 3%, these are all big hurdles on the charts. when you take a step back and look at the s&p 500 index for one, with 4000 4200 whatever it may be being taken out, it starts to look like a head and shoulders. it is a pretty common technical term. it is just showing a lower high reflecting that a loss of long-term upside momentum, so something that is not new to the market, and the breakdown happens after you have already seen that loss of momentum. that is pretty meaningful. we started to see it late last year in our indicators. if you look at the monthly bar charts, we had things from an overbought, oversold perspective. we started to see this down take in momentum that is still with the market, so momentum right

now is unfortunately to the downside across time frames. we would expect it to ultimately improve short-term, and yet what we are seeing from the market right now is a non-reaction to oversold conditions. we take issue with that. that does reflect usually a down trending market, so we are going to assume that this downtrend is going to keep hold in the coming months. alix: does that mean you want to be selling reps at any point in any asset? katie: we've been recommending folks be hedge. what you do see when the markets are going lower is every thing part is abates in the downside. there's very few places to hide. so we are encouraging people to sell strength, just like you say, especially to stocks that have broken support levels of their own, of which there are many. in fact, a review of the s&p 500, we found about 70% of the stocks in the s&p 500 had downside intermediate term momentum. it is pretty high, and that mix it so much harder to vantage of

any upside. it just means that a lot of these stocks are trending lower, so anytime someone is putting on a long position, it is effectively countertrend. of course, we don't want to have to sell everything, so keeping some core exposure is usually the right thing to do, but you can manage around that by putting on these hedges. guy: talk to me about the nasdaq. 20% down already. how different does the picture look, if at all? katie: it is quite similar, but what i would expect is that the nasdaq 100 index would underperform with additional downside in the same way that it has done recently. i say that in part because we believe that the mega caps have not fallen terribly out of favor collectively, especially with the help of apple, which is been a relative outperformer, i would say. with apple, if apple cracks come of that is going to have a bigger negative impact on the nasdaq 100 and the s&p 500, given its footprint in apple. so we are also watching the

support level. the neck support area for the nasdaq 100 is roughly another 18% to 20% lower, so we are watching 10,600. it does not believe -- it does not mean it will see that same kind of downside follow-through, but it does hint at greater risk. alix: talk about relative outperformance, that brings me to value. when you look at the charts, how much can value outperform growth? katie: we are always looking for relative performance, and we would expect value to outperform in a more defensive tape typically. we like to have exposure to defensive sectors that's overweight in this kind of environment while still reducing overall equity exposure period. so with the rotation of some of these more defensive sectors like financials, which could not have been considered as stretched as technology, which is more heavy in growth, those

areas of the market should outperform. guy: what is the canary in the coal mine for you right now? where are you looking for a lead indicator? katie: there's a lot of things. i wish there was a simple answer to that. what we tend to look for in terms of identifying a tradable low would be number one, support discovery. looking for momentum to start to shift. it does not have to shift fully, but some early indications of that, sometimes that appears on the chart in terms of positive indicators. so that is the type of thing that we look for. we look for oversold buy signals. we look for a loss in downside momentum generally speaking. and then things like, on a short-term basis, outside up days. it is a combination of factors we are looking for to suggest that a low is in place, and usually those lows are put in when sentiment is just awful. i have to say, as much as you

all feel the pain of the recent market, the sentiment i transactional measures is not quite as bearish as you would expect it would be. guy: ok. i hear that. that's not how it feels, but i hear what you are saying. it feels like a per he rough tape out there at the moment, but maybe there's worse still to come. always nice to get some good news on a monday. katie stockton, really appreciate the time. katie stockton of fairlead strategies, founder and managing partner. as we speak, the s&p dipping a little bit further, 4041. obviously we continue to watch that 4000 mark, but katie taking us away from that a little bit. more signs that we are at risk of a bear market. ian harnett, absolute strategy research chief investment strategist, is going to be joining us next. it is going to be fascinated to hear how he is viewing this market. more downside to come?

we will find out next. this is bloomberg. ♪

alix: welcome to "bloomberg markets." if you have been keeping score, it has been 15 weeks since i've sat in this chair, and the markets have moved insanely over those last 15 weeks. i want to do pull this comparison that showed where the s&p, the dollar, the 10 year, and oil were on my last day in office versus where they are now. i cannot believe i missed a 30%

plus move in the oil market. [laughter] guy: i have to say, commodities have been front and center, so you definitely missed out on what has been an incredible story. i think every day we have talked about commodities, and it has been a wild ride. kailey leinz i know is watching in that chair, keeping it warm, and huge thanks to her. what she has said at the beginning of every month, and she said it again at the begin of this month, is i can't quite make up my mind whether or not i can't believe it is may. whether we are already so far through the year, or i can't believe it is only may. because it is been in a crib lead bumpy start to the year. i think we've all got stiff next , basic -- stiff necks, basically. alix: i just want to fill in our

viewers a little bit about what is been going on with me. i am triple that asked with the covid vaccine. i did get covid at the end of -- triple vaxxed at the -- triple vaxed with the covid vaccine. i did get covid at the end of january. i did have long covid with brain fog. i am still not 100%. don't know what i will be like in 10 minutes, don't know but i will be like tomorrow, but i appreciate the support. what it has made me think a lot about, and i mean this sincerely, i work in a company that has an kodaly support of staff and policies, and there are a lot of people that don't, and there have to be millions of people dealing with this. i tell you, it is severely debilitating. i really have to wonder what this economy and labor market is going to look like in five to 10 years when people are really coming to terms with what the long-term effects are from covid. guy: i think we saw that on friday. everybody was expecting the

participation number to go up or get it is not. people are not coming back to the labor market. the question i posed friday is where is everybody. why are people not coming back into the labor market? i think what you have just laid out encapsulates some of the problems, the experiences, and the difficulties people are having right now. they are either looking after somebody that has had covid, got long covid, got medical issues stemming from covid, or they are worried about putting themselves in a position where they may catch it. you saw the debate over the weekend between anthony fauci and the white house, what was going on there about the correspondence dinner, thousands of people getting together. the possibility of big numbers further down the road cannot be ignored. so i think a lot of people are so very nervous, and i think that is keeping a lot of people out of the labor market right now. do your point, the long-term effect is going to be multipronged, and we are going to have to think about it from lots of different angles. alix: one of them is the medium term, maybe long-term outlook. the day-to-day is just still is

volatile for me in the markets, which brings us back to the question of the day. what is below 4000 for the s&p? ian harnett, absolute strategy research chief investment strategist, joins us on set which is a well-deserved surprise for me. what is below 4000 for you? ian: first of all, it is a pleasure to be your first guest on set, and always a pleasure to work with you and guy. we are at an absolute crucial point now. your previous guest was talking about the short-term technical points. but if you go down to the next technical point, it had been such a nice run-up. 200 a moving average is right down around the 3500 area. so that is the kind of risk that we've got here. one of the things i was looking at this morning is people are saying after this kind of correction we've had, 16% down from the peak, surely this is a buying opportunity already. but have a look at equities versus bonds in the last three months. equities are still up relative

to bonds, or pretty flat relative to bonds in the last three months. the real buying opportunities come when we are much lower than that. so our models are still saying that this is a bear market signal for equities versus bonds, and we want to stay out of it, and potentially either those bond yields have to come down a long way or the equity market probably will test that 3500 level. that is a pretty shocking number. guy: great to see you, and thanks for joining us in new york. do you think about cash right now? a lot of people keep telling me you don't want to be in cash because you are taking the inflation hit, but what you are not doing is taking the absolute hit of being in the markets. this is what i really don't understand about this whole argument. if i stay in the market, stay invested, and stay broadly invested, i'm going to see a relative hit from inflation or an absolute hit because the market is going to be declining.

do you just want to be in cash? ian: you are absolute right. cash has an attraction all of its own in this kind of environment. you can see what you've lost against the bond market, in the bond market and in the equity market, so we have been overweight cash in our portfolio that we have been recommending to clients and also overweight alternative assets like commodities generally, although i am beginning to get concerned about that. i would prefer to be in real estate rather than commodities on the industrial side of real estate. but cash has a real attraction at this stage. but we would say it is actually now time to get back into bonds. with those treasury yields back over 3%, i think there is real attraction in the bond market, particularly if, as we think, economic growth is going to go from a synchronized global slowdown to a recession, and we are going to see breakevens coming down aggressively as earnings get crunched in the next six months. alix: i've heard that you're

seeing bond etf's start to attract some kind of hedging flow due to that. so what do you do with the dollar? ian: i think one of the issues for the global economy, and one of the reasons why we worry that this is a global slowdown, is that dollar strength. the u.s. continues to grow faster than the rest of the world. the upward bias for the dollar is there. we think the dollar has still got further upside, but that's one of the problems that causes issues for the global economy and one of the things that causes problems for those earnings outlooks. so i would still stay long the dollar. i would still be very nervous therefore about international markets and about em particularly. it is still too early to buy those emerging-market equities. guy: can i take you back to the bond market for a second and talk about the different durations on offer here? we're going to get the inflation data later this week from germany, from the u.s. if we are getting near peak inflation, if bonds are starting to look attractive, which bonds in particular?

do i want to be buying the front end because maybe that move has gone too far and selling the ration? how do i want to play that from a curve point of view? ian: we think the whole curve is going to come down here. you got a situation where economic growth coming down, we think that people's expectations of the fed futures have gone too far. it is illustrative that over the weekend we have not really seen much change, even though the 30 year picked up quite a long way. at the end of the day, you're going to see duration when out. if breakevens come down, if oil prices come down, commodity prices come down as we anticipate, then you're going to see that back end of the curve come down as well. i think the other thing i would say is that some of our models are painting an awful picture for the euro zone. we are talking about earnings growth in the euro zone down 20% year on year. i think bu are going to bends -- i think bunds are going

to be a great buy here. guy: thank you for spending time with us. ian harnett, absolute strategy research chief investment strategist. let's turn our attention to what is happening with geopolitics. vladimir putin invoking the world war ii fight against nazi germany to justify the invasion of ukraine. we are going to break that down next. this is bloomberg. ♪

guy: russian president vladimir putin tried to justify his invasion of ukraine is a battle comparable to the fight against nazi germany. he spoke at the annual victory day celebration in red square, which marks the defeat of germany in 1945. mr. putin: these countries did

not want to listen to us. they had completely different plans, and we can see it today. they openly prepared the operation in donbass and the invasion of our historical lands, including crimea. guy: he talks a lot about the donbass region. obviously that's where the heaviest fighting is right now. joining us now to discuss, bloomberg's washington correspondent annmarie hordern. he did not label it as a war, which a lot of people are citing as being significant. if he had, it would have led to a mass mobilization. it was a more subdued speech than many anticipated. how is it being received in d.c.? annmarie: many thought, as you say, he was going to label this a war. there could have been a mass mobilization. he did not even mention the country ukraine. it does look like he's really trying to focus on the donbass region. we should note that these 10 weeks of this invasion, russia still has not been able to fully

capture a single city. their biggest triumph is mariupol, and yet it is still not fully in russian hands. so what you saw from president vladimir putin is a very different speech than what he would've likely wanted to give preinvasion, when he thought it was going to be a very swift capture of ukraine, but we should note this is a really important day for not just put but the russian people. they celebrate it every year and mark it every year because 27 million soviets died during world war ii. he's using this rhetoric to try to make this comparison, which we know was not true, between world war ii and what is going on ukraine. guy: and as president zelenskyy made clear in his address today, many of those were ukrainians. the view from washington increasingly feels like we need to degrade russia's war machine, so not only can they not fight in ukraine, but they can fight elsewhere.

can you talk me through how that is taking shape? annmarie: we heard as well from the deputy treasury secretary this morning, basically saying just that. they are going after the infrastructure of not just the entire economy to fund the war, but also the military, making sure there's export controls on technology and the like and things that russia would continuously need to continue this war or potentially invade other countries. guy: we will talk more about this in the next hour. thank you indeed. coming up, atlanta fed president rafael bostic says rate hikes are already pretty aggressive. we will talk about that next. this is bloomberg. ♪ ♪

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alix: we are on our end of the u.s. trading session, down about

90 points for the s&p. kriti gupta is tracking some of those moves. kriti: the selling is indiscriminate, but there's some nuances i want to point to our audience. energy has kind of been this inflation hedge, a defense of trade to some extent. what tech used to be post-pandemic. now you are seeing that trade flipped a little bit. the information technology index, which has been leading that incline over the last couple of weeks, is actually outperforming the energy index. that is something to keep in mind. let's take a look at what sectors are officially in bear markets now. the nasdaq is 25% lower from its high, but that is not the case for all of the sectors. you see the s&p 500 down 50% -- down, 50% for members down 20%. perhaps that is why the energy sector is underperforming today. a lot of traders saying this is not a question about

fundamentals driving selling. it is about returning to normal valuations. one trader told me the s&p 500 now will likely go back to trading to a 16 or 18 pe multiple instead of 20 to 21, and that may be a driver for more selling. let's talk about what is doing well today. that is the dollar. green on the screen, that dollar strength continues. the problem is that makes the stock market we were just talking about a little less accessible for foreigners. that is going to be something we are really going to be watching. guy: really expensive for me to come to new york. enke very much, indeed. kriti gupta on what is happening with the markets. the s&p 31 points away from the four thousand mark. the federal reserve bank of atlanta president rafael bostic says inflation is still too high, and the fed needs to act decisively to take control of that narrative. but he makes it clear that there are limits to what the fed is prepared to do here. rafael bostic spoke in an excuse -- in an expose of interview with michael mckee. >> when i thing about our

policy, the first thing on my mind is that inflation is too high, and we need to act definitively and purposely to try to get that under control. i think if you look at what we've done so far in the last two meetings, we heavily started that process. for me, 50 basis points over the last 20 years you know is already pretty aggressive move. i don't think we need to be moving even more aggressively. i think we can stay at this pace and this cadence and really see how the markets evolve. my expectation and hope is that as we move closer to our neutral levels and far away from our accommodative stance, we are going to start to see a lot of the tightness and the tension in the economy start to moderate, which can then give us options and choices as to what we do after that point. michael: how far do you go? where do you think you will be by the end of the year, by the end of 2023?

rafael: that is a very good question. i think we need to be getting into the neutral range. as you know, different people have different ideas about what that looks like. for me, i am looking between somewhere -- at somewhere between 2% and 2.5% as our neutral range, and then let's wait and see what is happening. a lot of discussions about uncertainty, or as assessed carpenter was referencing, saying there's a lot of volatility, a lot of stuff that is going to play out. once we get to that neutral level, i think that will be fine. from my view, we are going to move a couple of times, maybe two, maybe three times. see how the economy responds. see if inflation continues to move closer to our 2% target, and then we can really take a pause and see how things are going. michael: does that mean not move at a meeting, or would this just be a rolling decision as you go along?

raphael: for me, i think all options are on the table at every meeting. depending on how the economy is responding, it could be that the economy is responding strongly so we don't need to do anything. it could be that the economy is responding maybe a little less strong, so we might move to 25 basis points, or we may stay at 50. i'm really going to keep my mind open. i am going to observe what happens in the economy and then adapt my idea about what appropriate policy looks like based on that knowledge. guy: a lot of economists and many of your colleagues have said you are going to have to go beyond neutral to restrictive. if you had a 4% inflation rate and a 3% fed funds rate, you've still got a negative real fed funds rate. why don't you think you're going to have to do that? raphael: my hope is that a lot of the things that are really out of our control, things like

supply chain disruptions and the like are going to start to get to a better place. when the labor market responds, there was a story just last week about retirees coming back into the workplace. those are things that might relieve some of the tension we are seeing in labor markets and allow producers to start to increase their supply of products that then reduces the imbalance between demand and supply because all of this inflation is about an imbalance between high demand and low supply that is out there. we can start to see movement on the supply side, that means we will have to push less on demand, so that inflation i'm hoping will come down. how fast, we will have to see. that will determine whether we have to get into restrictive territory, and if we do, how far. i'm totally open to that, but i would've say we have been doing surveys throughout the entire pandemic. every one has come with predictions that have turned out to not be the case. so i'm going to try to be as humble as i can, be as true to being in the moment and trying

not to anticipate too many steps out in advance because there's a lot of stuff that's going to happen. alix: that was atlanta fed president rafael bostic speaking with bloomberg's michael mckee. you go to florida without a tie. i don't know what is happening anymore. i want to focus on what bostic was saying about the neutral rates. how much higher is the fed going to have to go above neutral, and how quickly? michael: there's a lot of dispute about that. i might mention that rafael bostic -- that raphael bostic himself told me not to wear a tie. we were at the hoover conference last week and the consensus seems to be you are going to have to go above 3% may to 4%. got the outliers like larry summers who say 5% or 6% because you need to get real rates up. if you have 4% inflation by the end of the year is the fed forecast and you have the fed at 2% to 2.5%, you've still got

negative fed funds real rates, so they are probably going to have to go farther than they anticipate. but they will be keep an eye on all of the numbers that come out. we get cpi on wednesday, ppi on thursday, import prices friday this week. also friday we get the numbers on what consumers think in place and will be. so there's going to be a lot of debate and a lot of volatility in the market says people will try to figure out dow hard they had it. guy: just mechanically, it is likely we are going to start to see inflation coming back down again. the question is, how quickly does it come back down again, and to what level? is there a sense at the fed as to whether or not what is currently priced into the markets is going to be enough to bring us down to target? i don't know where the fed wants to go on inflation. i'm assuming it is target, but i don't know. michael: there's two ways to

look at that. one is that if bostic thinks nothing changes, we are going to see inflation come down, not just mechanically, but because some of the things that went up during the pandemic are going to be coming down again. you're already seeing that with used car prices. at the same time, there is so much unknown out there. he, like other fed members, is emphasizing that. if we see energy prices rise significantly from where we are at the moment, you're going to have a problem with inflation that then could get into the core rate. if diesel prices continue to rise, that is going to raise shipping costs, and that will flow into the economy. so there's a lot they don't know at this point, and they can only kind of make the policy or decide where they are by looking at where they are the moment. it is kind of hard to know what is going to be happening down the line. guy: california, then florida.

mike mckee getting all the great gigs. mike, thank you very much, indeed. bloomberg's mike mckee. we will have another exclusive interview coming up. they just keep on coming. cleveland fed president loretta mester is going to be talking to mike. really looking for to that conversation as well. coming up, we are turning our attention to what this all means. -- to combat inflation. used car prices are higher. if you want to fix a car, it is more expensive. a whole range of factors in the mix here. we will talk to the company's ceo tom wilson. that conversation is next. this is bloomberg. ♪

ritika: keeping you up-to-date with news from around the world,

here's the first word. i'm ritika gupta. the u.s. government had a record tax hall this -- tax haul this spring. according to treasury department data, treasury collection is running at a record high of some 43% over the same period in 2019 that surprised wall street, shrinking the budget deficit. president biden will give a speech tuesday on his efforts to fight inflation. rising prices threatening the democrats' slim chances of holding on to congress after the midterm elections. he will contrast his proposals in a plan by florida senator rick scott. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. guy: thank you very much, indeed. let's turn our attention to the insurance industry. allstate reporting first-quarter earnings that missed estimates. the insurance company identified

inflation as the main culprit. there have been more accidents apparently as well. the main problem here is that used car prices are very high, and if you want to fix a car, parts are very extensive as well. as a result of which, the company posted a combined ratio, a key measure for the insurance industry, north of 100. joining us is allstate's ceo tom wilson. great to see you on the program today. what we are all trying to understand right now is how long does the current state of affairs last four. how long to car prices stay high? how long do parts stay high? you obviously have a huge vested interest in this. what do you see coming next? tom: good morning, guy. alix, nice to see you back in the game. we think inflation is going to stay for a while, so we've had to adapt. we reduced our expenses, raise prices, and changed the way we invest. but out to think of inflation

as a pig going through a python. the python is the economy. it swallows a pig. it takes a long time for it to get through there. so you get chip shortages, not as many new cars being built, a lot of money in the economy, used car prices up 40%, and it costs more to fix them, so we have to raise our prices. same thing happens to housing. same thing happens to oil. next thing you know, people are increasing wages because they don't have it of money to live on. so we think it takes a while to go through the economy. alix: great to see you. that analogy probably made by day -- made my day. the question is how high do you have to increase your rates to offset this sort of slow moving, very large inflation and back? -- inflation impact? thomas: so far we are up 6.5% in the last six months, and we think we will have to go higher from their. of course, the reason is if your car used to be worth $20,000 and now it is worth $28,000, and it

gets wrecked or we need to fix it, we have to charge more money. we have to pay more money to get it fixed. we have to find a way to recover those costs. guy: do you think some of your competitors are going to continue to raise prices? i am just wondering how much switching you are going to see happen compared to where the market is in terms of people shopping around. people are shopping around for everything right now. it's groceries, gasoline, everything. how do you see that working out? thomas: first, everybody has got the same issue. all the auto insurers, home insurers, same thing. not as bad as in cars, but in automobiles, prices are going up. everybody is raising. people will shop more, which is why we've built what we call transforming growth, which is trying to build a digital insurer on top of what is an analog company that we digitize. we are trying to reduce our

expenses. we have a product where if you don't drive much, so if you drive less than 10,000 miles, you should be buying mile wise, paying by the mile. alix: i would love you to put another hat on as well. you previously served on the board of the chicago fed. i'm wondering if you can conflate those two jobs. when you're taking a look at demand destruction, for example, which is basic it with the fed has to see in order for inpatient to come down, from the ceo's seat, what is it going to take to get that kind of demand destruction, where people stop buying used cars, stopper placing old parts? thomas: it is going to take a while. i don't think this is the kind of thing we can expect two or three rate hikes in nine months are going to make a difference. it is going to take a while for it to work through the economy, so i think you have to be patient. i think the markets have to be patient with it. what you are seeing out of that, of course, is interest rates have gone way up, which is why

we changed our investing late last year, and you are seeing it in equity prices. as those two things change, i think the economic activity will follow, but it is going to take time. they are not going to raise rates and people are going to stop investing or stop by and goods. it will take a while. guy: can i take you back to the pay-as-you-go model? you see any evidence that people are driving less because of high gasoline prices? thomas: a little bit, but why do people drive? about 1/3 of the time you're driving to work, about 1/3 of the time to do errands, and about 1/3 of a time for entertainment, to go on a trip. that last will come down. we track about 26 million cars every day. miles in total are now at or above where they were pre-pandemic.

it has changed the time of day. so you see less commuting because people have decided commuting is overrated. but you see more in the last category. i think that will come down some in the next couple of months. alix: commuting is definitely overrated. in all of this, and you mentioned it earlier in terms of the newer technology you have been dealing with, i want to get your perspective on how your workforce and your wages have changed as we try to grapple with what the labor market is willie going to look like in this time of higher inflation. thomas: it has been a crazy couple of years. we had 80% of people in our offices and 20% remote. today it is about over 90% remote. we are getting more people back into the office. not all of them want to commute and come into the office. so we are having to adapt and give employees choice. we were one of the first company to say you can choose if you want to come in, if you want to work permanently remotely.

the challenge for us will be making sure they are still feeling affiliated and they align with our purpose. it is a little bit easier when you are doing culture in a physical place, and it is not because you've got 10,000 people in one building. it is because you do it in pods. so we are trying to create these virtual pods to help people still feel affiliated with us, so that will bring turnover down, and we can continue to grow. alix: we appreciate your time today. thank you for joining us. we look forward to the next time. coming up, we will stay with the selloff. the nasdaq 100 really taking a nosedive, off by two point 5%. shares of rivian taking a dive after a lockup period for certain insiders and investors comes to an end. details on that next. this is bloomberg. ♪

alix: shares of rivian tanking as some early stakeholders are about to get their first chance to unload shares. all of that is the market continues to trade lower. the nasdaq 100 off by 3%. here with more is bloomberg's ed ludlow. who is selling rivian right now? ed: reports over the weekend that ford is selling a block of shares. ford holds about 12% of rivian. we are trading at $24 a share, way off from the post-ipo hi, so it is really a curious time to sell, it seems. they are selling a block reportedly at 8 million shares. they still have, by my count, 94 million shares in their holdings , selling at the bottom. guy: well, maybe the bottom. what kind of signal does this send? this is either an opportunity to

buy the shares they could not by earlier or signals that those closest to the company have doubts. ed: this is a stock that is sensitive to all the things we are seeing in the broader selloff. higher rates, a higher multiple stock. they've encountered supply chain problems. have earnings on thursday that will give us a good lens into how they are managing that. you and i have talked about this before, investors have choice in this space. previously tesla was the only game in town. now you've got options. but the timing is curious. we asked amazon with a plan to do. they are another big shareholder. they declined to comment on whether they will sell down their stake, but they said we are committed to at least working with rivian, and amazon is a customer of rivian massoud is a couplet hated stock story. will the retail investor come in here? that is another question. alix: i was doing caused with different analysts, like what i miss in the last 15 weeks, and some any of them said companies

like this, rivian, carvana, do they go to zero? if you cannot deliver any free cash flow, who is going to step in and buy it? ed: i speak to a lot of existing shareholders. rivian has a balance sheet that most companies would be jealous of. they've got the cash. they are now revenue-generating. they are ramping up production. but the euphoria we had post-ipo , realities said in. they've scaled back their full year production target to 25,000 units from around 50,000 units that the installed capacity of their factory gives them. they are struggling in the real world, and that is it. we are struggling with the nuts and bolts of making cars. i went to the factory. it is real. there's stuff going on there. but the equity investors are taking a more skeptical view on this company. guy: is there a signal, if you are looking at rivian, do you look at tesla and say there's an equal problem, or look at tesla

and say these guys are going to be the winners in all of this, they are miles ahead of everybody else? how do you read from one to the other? ed: tesla in terms of the stock story has not been immune to rising yields. it has caught up in that rates, higher multiple narrative. but it also has outdone itself during the pandemic. it circumvented the supply chain issues that legacy auto and the newcomers like rivian have really struggled with. it has consistently beat expectations on the top and bottom line throughout this pandemic. the stock has been under pressure. so the question is when you come in and buy. guy: great stuff. thank you very much, indeed. the s&p is now trading 4019. this is bloomberg. ♪

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guy: stocks are being hit hard again. in the bond market, bunds our bid, btp's are not.

the countdown to the close starts right now. >> the countdown is on in europe. this is "bloomberg markets: european close," with guy johnson and alix steel. guy: 30 minutes to the close. it does not look pretty in europe. european equities down hard. miners are down. you saw what happened overnight with copper and iron ore. luxury stocks down ready hard as well. lvmh, 52 week low on that stock. the euro at one point was bid, but is now back down. the dollar, strength to strength. what is interesting is in the bond market, the safety ts