tv Bloomberg Daybreak Europe Bloomberg May 24, 2022 1:00am-2:00am EDT
dani: this is "bloomberg daybreak: europe," i am dani burger in london alongside manus cranny in dubai. the stories that set your agenda -- manus: stop/as its profit forecast, but -- snap slashes its forecast, but jamie dimon says storm clouds they dissipate. >> i'm calling the storm clouds because they are storm clouds and they may dissipate. if it was a hurricane, i would tell you that, like we had in 2007 or 2008. they may not dissipate, we are not wishful singles -- wishful thinkers. manus: hike first, ask questions
later, raphael bostic says a pause may be needed after two more half-point increases. georgia says get to 2% and then reflect. plus, christine lagarde's plan to tighten burke's colleagues -- itks colleagues, wanting to move faster. our conversation with the ecb president later this morning. spend, spend, spend. samsung will play out the dollar. on chips and biotech over the next five years. they are to boost the investment in tech by 36%. these are major commitments to overcome the chip shortage by samsung. dani: this kind of goes into what i was thinking about this morning, i was telling about you -- tell you about it on the break, we are in this negative feedback loop come all of the
earnings we are getting and you can add samsung, spending because they are concerned about supply chain and economic shocks. it is being viewed through this lens of inflation and slowing growth. manus: absolutely. the alpha in this is about job creation. if they are going to up by 30%, they will create 80,000 jobs through 2026. this will also tie back into on shoring, reassuring, inward investment. it is a much bigger geopolitical concept, on shoring and globalization. it is another way to look at this expenditure domestically. dani: exactly, and spinning on chips goes into that as well. that stick into the markets, nasdaq 100 taking a nosedive. snap losing over one third of
market value, worried about the macroeconomic conditions. they say they will deliver on the low in of the forecast. it is sending ripples across the market. especially with big tech players. back to this idea that we are looking at individual earnings. be it snap or walmart, what is it mean for the growth and inflation picture because investors are really concerned? negativity across markets spilled into the s&p 500, and euros stocks down have a percent. china, csi 300 down. we had more fiscal stimulus in the form of tax relief, however both j.p. morgan and ubs downgrading the china economic outlook. that is overpowering any sort of help kind is getting from the government. manus: i think that lack of exit strategy ubs addressed when they cut to 3% is the essence of the
angst. the stimulus might not be enough. jamie dimon encapsulates the issue, or could be a recession, there are storm clouds, but it is not too thousand seven and 2008, not a hurricane. oil comes off the china downgrade, 10 year yields grappling with bostick, who wants a pause. the dollar regains a little strength, up 1/8 of 1%. bitcoin back just under the $30,000. the big story is mixed crude come on the downgrade in the growth outlook for china by jp morgan and ubs. what have we got? dani: while we are talking about markets, the euro was up yesterday, down slightly this morning. we will have an interview with ecb president christine lagarde from the world economic forum shortly after 7:30 a.m. london time. first, let's get to reporters
around the world for the top stories. juliette saly is looking at the snapchat slump. manus: stephen engle closes the president's closing day trip to asia. snapchat as you said slammed after hours, cutting the earnings forecast for the second quarter and the warning dragging down other social media companies. they are all on the block. juliette saly has that in singapore. juliette: snap benefited during the pandemic when everyone was at home, but now the ceo saying in a memo to staff that they are facing the same challenges most companies are facing, labor disruptions, supply chain shortages, the war in ukraine. their second quarter were cast lowered, and it was already below analyst forecasts, now 25%
year-over-year revenue growth and a slowdown in hiring. they're looking to fill 500 rolls by the end of the year. that's about a 10% growth for the remaining seven months of the year. it's much lower than the 41% year on year total headcount growth they had. an analyst telling us the company has been having difficulty bringing unattainable, unrealistic investor expectations down to earth. you have companies competing for advertising dollars at a challenging time. this morning follows the likes of other big tech companies we've already heard from. meta cutting spinning plans and twitter announcing a hiring freeze. a 30% drop in after hours trade on snap weighing down a number of tech companies, underlying growth slowing as these companies mature and it gets more competitive to attract ad
dollars. dani: i've had a hard time this morning not making a snapchat pun about the markets. thank you, juliette saly. the kansas city fed president said she expects the central bank to raise rates to 2% by august. and with 50 basis point hikes expected in the next two meetings. we are joined by enda curran. was bostick talking about a pause? he said something like that before, but giving more detail, talking about september. is this a tone change, a shift to have the fed or nonvoting member say it might be worthy for us to put on the brakes this year? enda: i think it is a pretty hawkish message, but they're also acknowledging way minute, at some point they have to see
how things are playing out. we had comments overnight from fail bostick, esther george, the hike is clearly there to curb inflation, but when they start seeing evidence inflation is coming up, they will see what pace of rate hikes to go from there often. -- thereafter. the san francisco fed president also made the comment that she didn't see sign of recession so she is not in the camp to keep hiking rates. i think the bigger takeaway is as we go into the second half of the year, it might be a different picture for the fed or we might see a slowdown in the pace of rate hikes. none of course we could see a pause in what the fed is doing. manus: thank you very much. it's more -- it's about more pain for equity investors relative to where the fed sees the neutral rate going to. enda curran, our chief asia
economics correspondent. was it or was not a gaffe? joe biden's comment that the u.s. will defend taiwan militarily provokes china. his trade representative says the u.s. must be strategic about removing tariffs on chinese imports. >> as with everything in this relationship, be strategic. we have to keep our eye on the ball in terms of how to effectively realign the u.s.-china trade and economic relationship. manus: joining us now is our chief north asia correspondent, stephen engle. the quad meeting is ongoing today. yesterday it certainly wasn't a high moment in terms of communicating the message of america over taiwan. what is going to be the biggest take away today? stephen: there is so much that is happening on this biden trip,
from south korea to japan and now the quad meeting. i think the u.s. trade representative summed it up in one word -- strategic. the biden administration is looking at these various groupings and in particular the quad, the regional grouping between japan, the u.s., india and australia, which jamie dimon talked about a tsunami, this was formed after the 2001 tsunami in the indian ocean. it was disaster relief and it has morphed into a regional grouping of shared wariness of china, let's put it honestly, even though many of the deliverables from today will be on more mundane issues like countering illegal fishing. that is the big packed they are announcing. the comment yesterday from joe biden about taiwan, essentially affirming a reporters question that the u.s. would come to the defense of taiwan militarily if taiwan were attacked, he said yes.
and china's response saying it was deplorable and would put relations on a bad track, it just shows the tension between china and some regional groupings the united states and australia are backing is still very hot. dani: all right, thank you very much. stephen engle. manus, we were talking about fed policy, it is worth pausing on ecb policy as well. yesterday, the euro touching a month high, with christine lagarde blog post about exiting subzero by the third quarter. this is very strange, it is a golden rule of banking. she is laying out plans for july before we have entered june. manus: i like what marcus says, the dropping of strategic ambiguity on rate increases. very forthright forward guidance. if you look at the debate, where
is the neutral rate? we are so myopic in debating the neutral rate in the u.s., where is it in europe? that's what blackrock says, they may overreach. it is beginning of davos. let's get back to the slopes. we won't ask her to sing the sound of music. francine how are you? francine: we won't sing the sound of music. but we will ask francine -- ask christine lagarde about the blog post. imagine the nightmares, you are the president of ecb and you have like six people giving interviews and the hawks are pushing to tackle inflation and the other ones have less of a voice. we will see what she says on that and the way forward. but i am delighted to talk about what chief executive think about inflation and central banks.
richard, thank you as always. i love our davos catch up. this year, chief executives are worried after two and a half years of craziness they have had. >> i think the big news for the trust monitor is along with running a good business, societal issues like diversity and inclusion, sustainability, now they have geopolitics. geopolitics is rated just as highly by the public in terms of corporate responsibilities, and in fact, if you left ukraine, you got a 30-plus point -- excuse me, left russia. if you stayed, you got a 38 point drop in trust. the litmus test for business now includes are you working with repressive regimes? where you stand on human rights? it is a big tent. if you are a juggler, you have three balls in the air. francine: the longer-term, secondary effects of sanctions
is food inflation, how difficult will it be for chief executives to bridge those inequalities? richard: again, on the trust barometer, trust went up in democracies but only in the top three quartiles of income. the flatline was the bottom quartiles. we've never seen a trust cap as long as -- in institutions as today. germany, 25 points, u.s. 23, japan 21. the people on the bottom are looking at the top and at the grocery store saying i am unhappy, please pay attention to me. i am tinder on the floor. francine: it is only politicians or business executives? richard: in january, the big finding is that trust in business is higher than government because confidence is the word. 50 point france between business and government on the matter of confidence. they think this will get things
done. business's plate is full annually have two hands. francine: what can they do? there's a lot of people that don't trust institutions and they will be squeezed by the cost of living and will go through a nightmare because of food inflation, they might not be employed by companies that can make a difference. richard: i think companies have a really important role in the next months to figure out how to re-skill workers. if we have a recession, there will be redundancies. also to make sure food is somehow made affordable. unilever is doing a good job of affordable food with some of its products. the essence of the argument for business is, are you trying to help me get through this as a consumer or are you just going to tag price inflation on and make a higher profit? francine: what is the mood like? when you set down, you said the chief executives are hoping for a soft landing but preparing for recession. richard: i think the capital markets are giving signals that
maybe it will be tough for tech. times up on ev's, and we are looking for profit. if i can't raise prices, i have to look at cost. chief executives are also worried about, again, how he are going to be off their target -- their docket? not only because if the world's lives between the u.s. and china, what side am i on, can i straddle as india does, for instance, or will i have to choose? there isn't going to be a lot of inbound investment to china from american companies now, there's a lot of political pressure. francine: can they straddle? with all of the sanctions the u.s. and the west put on russia, the u.s. dollar, the dollar supremacy, also treasuries put into question. richard: look, american and british companies, 1000 companies have come out of russia. again, they've been rewarded by
consumers, employees and others to say that was the right thing. the broader question is, the china-america conflict. it is really important those two countries find a way. francine: will day on business? richard: the theory was if we have great business ties, the politics will follow. it is hoped in fact that continues to play a role, because between rare earth and parts for cars and things like that, we are inextricably linked. i think trust relies on four things -- ability, dependability, integrity and purpose. if ceos can keep those in their minds when they are deciding how to play the game, it is a better way. francine: how are you finding this davos? it is the end of may, but also a lot of criticism about why davos is happening even what we are living through. richard: i think davos has
actually been great because it is smaller, ceos are really looking to talk, and there is much less -- less cold. [laughter] francine: that helps. richard: but also it is an incredibly important time to make sure that -- you do see a zelenskyy yesterday, and you do file lagarde -- file lagarde working to keep the level of the euro. government has not disappeared and business is not on its own. francine: there are people that haven't seen each other to be for 2.5 years, parts of the world cut off because of covid, coming back, and you can see that buzz and people talking again. do you think the pandemic changes the work from home environment forever? richard: i think working at the office is an essential part of a successful business, but the process is dragging out on the basis of people being comfortable working from home.
they say look how well the companies have done. but i think certainly we are trading on relationships we have had for two years. i went to an office the other day and have the staff i had never met because they had come in the last two years. there is a bonding aspect of return to office. you look at midtown manhattan and it is still pretty empty. francine: we just had a survey, if you want to go to the office in london, go on friday because no one is there. richard, thank you for joining us. the trust barometer, i encourage everyone to check it out on social media dani: the trust barometer in the friday office attendance barometer good indicators of where we are headed. francine, thank you. francine lacqua at the world economic forum. she will be back throughout the program with more interviews. that's get the first word news with juliette saly. juliette: sources tell us some
ecb officials are worried president christine lagarde will not raise rates fast enough. a blog post spelled out the timetable for exiting subzero monetary policy by the end of the third quarter. it implies a 25 basis point hikes in july and september. bloomberg understands that makes caucus official uncomfortable. don't miss our exclusive interview with the ecb president, christine lagarde, live from the world economic forum in davos shortly after 7:30 a.m. and in time. jp morgan shares have jumped the most in 18 months on monday, after jamie dimon made upbeat comments about the state of the u.s. economy. at his first investor day in more than two years, the country's biggest bank give more details on wide-ranging pans -- plans to boost returns. shares and other lenders also gained or than 5% on the news. airbnb is shutting operations in china are choosing to focus instead on outbound chinese tourism, as a country continues
its aggressive approach to containing covid-19. the short term rental company is said to be planning to end its domestic offerings this summer, despite a big push on the mainland, china accounted for only 1% of airbnb revenue in the past two years. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. manus? manus: thank you very much. big fight back from jamie dimon when they have a go at your pay. coming up on the show, a ceo speaks exclusively to bloomberg at davos. we talk supply chains, and future plans for the chipmaker. that interview is next. this is bloomberg. ♪
dani: welcome back to "bloomberg daybreak: europe," i am dani burger in london, manus cranny in dubai. the until ceo sat down with haslinda amin in the talked about future plans for the chipmaker, supply chain challenges. pat: we think the supply-demand balance is 20-24. we have seen a number of equipment supply chains move out, so our equipment coming in has moved out. overall, 2024 -- 2024. haslinda: when you look at the ports in china, for instance, 60 ships waiting to unload. it is causing a lot of headaches. pat: oh yeah. the supply chain issues in china, but it is on the back of
other supply chain issues, so we are already beaten down and have to work through it. maybe some consumer softness gives us a little bit of breath but we are still out to 2024, and rbc the shanghai ports have created more turbulence. haslinda: we talk about a global slowdown although we've seen pushback saying we are not looking at a global recession, but definitely a slowdown. demand destruction, what assumptions are you making? pat: we are seeing some softening on the consumer side. haslinda: can you give a number to that? pat: there was a meaningful -- a number of percentage points softer. we originally were expecting the pc industry to be up a couple of points this year and it is sort of flat, maybe down a point. a meaningful swing. on the business, commercial side, no change. continuing to have real strength
in those areas of the market. i think with inflation concerns, tightening of monetary policy, continuing supply chain challenges, things will probably choppy for a couple of quarters. manus: the intel ceo speaking exclusively to haslinda amin at the world economic forum. dani, if you think of the breaking headline we had this morning about samsung investing in chips, my favorite line so far is this columnist who just hit the terminal, lagarde gives the dollar what it needs. she certainly put a floor in the euro and that's what we have seen. i encourage everybody to look at this. it spells it out. who killed the dollar? christine. dani: [laughs] to be fair, it was already down,
benefiting from a growing risk appetite, but it is true. as we are concerned about corporate earnings coming in, weaker dollar would benefit u.s. multinationals and em as well when they deeply need it. many people might welcome this change in tone or the laying out of policy from christine lagarde. manus: she certainly punctured the hawks. we've got to get a quicker flexion to jp morgan. when you are getting punched on your pay, you give the market what it wants, net interest income. that's what jamie dimon did, he gave it aplenty. up 26% on the last year. yes, there is a risk of recession, isn't there? it bolsters the whole narrative around the growth to value. dani: exactly. i find this interesting because in order for j.p. morgan to do well, you need a certain kind of recession, which jamie dimon says it might not be as bad given the economy i
manus: this is "bloomberg daybreak: europe." these other the stories setting your agenda. dani: the rally snaps, after snap slashes its forecast. but jamie dimon says strong clouds over the u.s. economy may dissipate. >> strong economy, big storm clouds. i'm calling them storm clouds because they are storm clouds, they may disavow. it was a hurricane or a tsunami, i would tell you that. they may not dissipate, we are not wishful thinkers, and honestly wanted to turn out well so we can handle all of that. dani: hike first, ask questions later. fail bostick says a pause may be
needed after two more increases. for us, roaming sin frankfurt, christine lagarde's plan irks colleagues wanting to hide faster. our interview with the ecb president later this morning. manus, it is a talk of ecb tightening getting to neutral by the third quarter that did its job. it put a peak in the dollar. manus: a peak and a punch. where is the neutral rate in europe? everyday, where is neutral and the united states of america? but how progressive will the ecb be? you are right, the dollar was wounded, winded and waylaid. before christine lagarde spoke. but that is on the run and on the hoof. she really took the wind out of the hawks's sails.
one person still says a 50 basis points could be on the table for june or july. i think that's very contrarian. there's also something else driving the kind of momentum in the euro, and that is that they have been cutting their dollar longs. oil is down, china downgraded. i am amazed about the response mechanism and rick -- in risk assets on such an atrocious downgrade by jp morgan and ubs on the oil market, down 6/10 of 1% viewed that does not stack up for me. yields dropped 2.3. according to jamie dimon, it is not too thousand eight, it is not a hurricane. dani: snap snaps the stock surge. that is close, i'm trying. because of snapchat's earnings,
they are warning about the macro economic conditions and the fact they would have profit on the lower end of their guidance. that undid the tech rally from yesterday, snap losing a third of its value -- value. the wider equity index falling in line, u.s. futures on the low , down more than 1%. euro stoxx future also lower and china down more than 1.25%. a lot of it having to do with yes, we have stimulus coming in the form of cash relief, but mornings amount over the economy. both ubs and jp morgan greeting the china canonic outlook. it is also day two of the world economic forum in davos. over there is francine lacqua standing by. that's get over to her. she has an interview. francine: yeah, we are joined by catherine russell from unicef the talk about data, how you use it, and the money that flows to
help children around the world. thank you for joining us. first of all, you've been on the job for months. in the thick of it. so many things happening around the world where you have to help filter. what data do you look at to decide where to go first and how you deploy resources? catherine: data is so important and i think unicef is the biggest collector of data at the un come up we are seeing cascading crises for children. covid has ended up with 100 million more people in poverty, children in poverty, children out of school, really terrible climate problems. i was just in the horn of africa, where it hasn't rained for the fourth year and people are suffering, animals are wasting away. i have seen babies wasting away, terrible things to see. and other crisis, the biggest example is ukraine. but it is not the only crisis, we also have yemen and syria.
francine: is there a danger that when we put a spotlight on a crisis, we forget about the others? catherine: attention makes a big difference, and for us, a lot of these crises were already underfunded -- yemen and afghanistan. they go on so long that i think people, the media, the public gets kind of tired of it. then ukraine comes, it is a war in europe, so it makes sense there is so much attention, and having terrible impacts on children and others. it gets a lot of attention and it deserves the attention, i would never suggest it doesn't, but it does detract from others. francine: is there underlying something about skin color? this is something we have heard a lot, criticism that people care about ukraine because they look like them. catherine: it is hard for me to assess why. i think it is certainly the case, all of my colleagues in europe are assessed with the fact that it is a conflict in their backyard. that is slightly different. i've seen huge numbers of people
coming across the border. it is devastating to see that, the largest number since world war ii. it is understandable there's concern. there's also worry in europe about what it means for them in terms of what would russia do next? luckily unicef doesn't get into politics but i hear a lot of that. francine: how much of the concern is funding from the private sector? i know there is more private-public partnership. you were telling me that unicef knows how to deal with crises, but logistically it is finding the money to go to the places that need it most. catherine: that's exactly right. we get a lot of our funding from governments, but the private sector has an important role to play because they can fund us for programs that will make a huge difference and fill in holes the governments aren't able to do, and also work with us. it's not just funding, it's working with us on ideas and concepts and testing things. that's where the private sector can be innovative and make a huge difference. francine: have you spoken to people at davos, what is the
question you get the most? catherine: what can we do to make a difference. what is interesting at davos, i think people come here because they want to make a difference, these businesses, they want to be part of the discussion of the future. children are all about the future. for them, to think about how they can do their businesses and philanthropy in a way that helps children i think is valuable. francine: how easy do you think it will be for europe to absorb a lot of migrant children running from war-torn countries? catherine: it is a lot of children for sure. europe has stepped up. i went to romania, poland, they are doing an amazing job. but it has been a huge crush of children. and mothers, mostly, almost no fathers. you talk to the mothers into children, they all talk about going home, in part because they left their husbands and fathers. they see it as temporary. but the countries have to plan for a being more long-term and thinking about getting these
children into schools, language training and the rest. it is a big endeavor. francine: how do you cope personally? you are seeing and exposed to so much horrible news day in and day out. catherine: there are days, very tough days. we do a lot of work on acute mel trish and on babies and i saw that -- malnutrition in babies and i saw that in afghanistan. you go to the hospital room and the babies are the classic wasted away and the hospital rooms are almost silent, which is a strange feeling. the doctors say it is because the children are too weak to cry. those visits give me nightmares and i can't shake those images. francine: we have nutrition? catherine: we do, and that is the upside. we know how to help those children. that is a resource question. we have a therapeutic formula to feed these children and quickly turn them around, but it is a resource question. francine: thank you for joining
us in the great work you do. catherine russell, the unicef executive director. back to you. manus: francine, thank you. francine lacqua at the world economic forum with catherine russell. let's get up to speed with the first word news with juliette saly in singapore. juliette: china ruling on a broad package of measures to support business and stimulate demand as it seeks to offset economic damage from covid lockdowns. the state news agency says the package includes 21 billion dollars in additional tax rebates and about five times that in railway construction bonds it -- bonds. some ecb officials arrayed christine lagarde will not raise rates fast enough. a blog post set up the timetable through the end of the third quarter and implies 25 basis point hikes in july and september. bloomberg understands that has left talk is officials uncomfortable. -- hawkish officials uncomfortable. don't miss our interview with
christine lagarde live from the world economic forum shortly after 7:30 a.m. london time. social media stocks took a hit after the bell in new york after snap cast its forecast below previous guidance. the company says the macro economic environment has worsened further and faster than anticipated. its second-quarter forecast for year-over-year revenue growth was already below analyst estimates. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. dani? dani: thank you. juliette saly in singapore. coming up, don't miss our exclusive interview with ecb president christine lagarde live from demos shortly after seven: -- from davos shortly after 7:30 a.m. london time. ♪
>> until has been an incredible company as they -- intel has been an incredible company as they build a pc, but qualcomm is different. qualcomm has been built -- has been treating processing technology to have a computer in the palm of our hand. >> is there a risk to moving away from niche? >> what is happening to qualcomm right now, and that's one of the greatest opportunities in our history, which is the mobile technology scale is incredible. you think about a smartphone today, it is a developing platform. what it is is an advanced computation device that is connecting. when we look at the digital transformation happening across every energized, we see the
demand for technology and other industries. the company could seen to be driving communication in communications, but it is coming a connected computer on wheels. >> you fended off an acquisition pitch from broadcom this morning. broadcom may acquire vmware. do expect this will be the future, to have scale and sustenance we you need -- sustenance, you need to consolidate? >> it is for broadcom to column -- a comment. for me, they are more of a softer company with some of the acquisitions in the past and i think vmware is a software company. we are going in a different direction. i think we will continue to be a semiconductor company focused on the growth we have in this industry. especially at the edge. and we will continue to see not
consolidation but conversions of all of those opportunities. >> how much are you trying to move away from relying on one region, on taiwan, for example? or some of the other major semiconductor producers as you focus on hardware. >> this is a great topic of conversation. what we saw over the past couple of years i think globally, if there is a silver lining, we saw semi conductors are important. as chips are going in pre-much everything. even as we saw shortage of semiconductors, people are buying more goods and services. what is happening in the future? we need a reliable supply chain. we have done better than some of our peers because we've been diversified since the beginning. we are very well balanced between taiwan and south korea, with samsung, and also using chips from global foundries and when he 5% of chips come from
manufacture -- 25% of our chips come from manufacture in the united states. we think we need to have a geographically diversified supply chain. manus: the qualcomm ceo at the world economic forum in davos. a rights issue by air france, 2.3 billion euros. the sovereigns will participate, france and another lens will participate in the rights issue in a of klm. they had assistance last year and that was a big issue for them. everybody in on the rights issue. it will be to repay the covid aid they took on board in the middle of the pandemic. dani: exactly, and again, they
delayed paying that back last year because of the surge in omicron and the effects there. it will be about -- they've confirmed the target of two to two a and a half times net debt by 2023. let's turn to the broader markets and latest comments from the fed, we have a kansas city fed president thing she expects central banks to raise interest rates to 2% by august, also adding that further tightening will be guided on how inflation decelerates. speaking of which, a 50 basis point hike expected the next two meetings, and the atlanta fed president says -- we have been transfixed by the euro and dollar the past show. having bonds talking about pausing -- bostick talking about pausing drags down the dollar further and you add to that with christine lagarde. have we reached a peak in the greenback?
paul: it is possible and i think people have been working that carefully the last couple of weeks, since the yen spiked above 130 p it started to come back again from the very weak levels. the dollar on the flip side is starting to ease up a little bit along with a decline in treasury bond yields as well. the euro next may have a hurdle to get over. christine lagarde was pretty clear, although some economists seem to be unhappy she is not being more aggressive. although it seemed to be hawkish statement, maybe there will be some revisionism, thinking that course is set in stone. there is little more upside for the euro from there. manus: she has got optionality. the fed are being expeditious --
i love that word. john writes in his piece, his not to the market was extreme vigilance. maybe buyers have optionality today. you mentioned the bond market. here we go. steven major, major protagonist of where volatility in the bond markets go. he says inflation is wrongfooted for pretty much everybody. a forecasting error since pre-much where it was when we look at the past major bond upsets. you should think twice about positioning for still higher yields. i know he likes lower bandwidth but this is a big call by major. what are you talking about around this? paul: well, and i think major has been right in being more bullish on bonds than the average strategist or man on the street, and a lot of people have lost a lot of money betting
against bonds until this year, when the selloff we've seen has been close to the biggest selloff we've ever experienced in the bond market. we have seen some stability and the possibility that some longer-term investors are coming into the block at these levels and like it. it depends on your view of inflation and how entrenched it is. if we don't start to see the real numbers starting to show the deceleration a little bit more clear, the market can still be jittery, even with yields tucked around the 3% level. the other thing that is really key now for global markets actually is not just the outright yield level, but the volatility in the bond markets as well. it is starting just to come down a little more and that could give people a little more certainty in the corporate bond space, for example, and even feeding into the equity at least -- equity space. at least it has stabilized, as
long as it is not 10 basis points here or there every day, maybe that can give investors a little more confidence across the rest of the asset class spectrum as well. dani: we haven't even talked about snap this morning, i think manus is more of an instagram guy than a snapchat guy. you could have fooled me. instagram today, tiktok tomorrow. snapchat losing a third of its value, warning about the macroeconomic headwinds. doesn't make since we are extrapolating this for the entirety of tech, the facebooks and googles of the world? paul: immediately when we saw the market start to move this morning at the start of our day as it u.s. investors were going home, we were a little bullfight old. -- befuddled. it was a big surprise.
i think if you look at what they are saying, investors are looking at the redial on advertising spend and thinking hang on a second, if that is spending -- if that is slowing down, that's one of the first things to go when we face cutbacks and recessions, maybe it is the macroeconomic risk that feeds into all of the tech companies and their business models that is starting to get priced in and gave people jitters. the flipside, you could say we had a great day yesterday in the markets. we are getting back some of the value today. let's see whether the bounce from the lows we saw friday can hold a couple more days this week and give the market something of a base or if we will have another allergic reaction today. manus: i think it comes down to the quality of the slowdown. jamie dimon talked about the storm clouds they may dissipate. i think his whole point is if we have a slow down recession, whatever it comes out at, in his
words, it is different, it is not 2008, it is not a hurricane. it goes to the heart of it all -- the consumer, rather than balance sheets. paul, we will see you through the morning. that is our executive editor for asian markets, paul dobson. coming up, an exclusive, christine lagarde in davos on bloomberg. ♪
dani: jp morgan shares of the most in 18 months after chief executive jamie dimon made upbeat comments about the state of the u.s. economy. that's get details. joining us is charlie walz, on track of all of the investor day comments. not a tsunami, it is storm clouds. walk us through the comments. charlie: a poetic stance from
the head of america's largest bank, explaining that the u.s. economy has storm clouds and they dissipate. sort of a moment of zen. slightly more fuller's comments on the u.s. economy that seemed to bode well for the banking sector at large. jp morgan shares have been troubled this year, and they were the top five performer in the s&p 500 yesterday. you saw that sweep across the banking sector. citigroup doing well and number six and bank of america rounding out in the top 10. analysts on investor day were generally happy after a very difficult five months for jp morgan with a lot of concern about expansion. manus: we are all searching for that moment of zen. christine lagarde joins the bloomberg team in just over 30 minutes. this is bloomberg. ♪
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