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tv   Bloomberg Markets  Bloomberg  November 11, 2022 1:30pm-2:00pm EST

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-- a dramatic setback for vladimir putin. it was part of a territory that putin illegally annexed and he said it would remain russian forever. russia says it will hold its first nuclear talks with the u.s. since the invasion of ukraine. according to the foreign ministry, discussions will be in cairo.
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a significant recalibration of china's covid zero policy that has isolated the country. beijing has reduced the amount of time travelers and close context must spend in quarantine and pulling back on testing and a controversial system that penalizes airlines for bringing virus cases to china -- that too will be scratched. president biden maintains it has an unwavering commitment to fight climate change. at the climate change conference in egypt, he said the u.s. is on track to meet its paris agreement goals. pres. biden: and some total of the actions of my administration is taking puts the administration on track to achieve the pairs agreement goal by decreasing 50% by 2030. john: there is concern that republican gains could doom attempts to provide 11.4 billion dollars in international climate finance. global news 24 hours a day, online and at quicktake on bloomberg, powered by more than 2700 journalists and analysts in over 120 countries.
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i'm john hyland. this is bloomberg. jon: welcome to bloomberg markets. kriti: the s&p 500 flying on the back of a rally, up .8% on the s&p 500. the bond market is closed but dollar weakness continues for a fifth straight day, down 1.3%. the dollar weakness feeding into the commodities picture. copper and oil higher. some being fueled by the china quarantine rules getting lightened further and further.
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jon: sector was, energy leading the way. on the nasdaq, 9% over two days. advanced micro devices rallying on news of the chips with a market gain. even -- easing covid restrictions and china are helping. coinbase is a company that is navigating that and also navigating the need for workforce reductions. shares of 11%. we are continuing to watch the fallout from changes that twitter, including the fake twitter account that created uncertainty for eli lilly, there down 6%. kriti: you mentioned coinbase, remaining in turmoil as the ftx saga continues to on travel --
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unravel. larry summers compared to the downward spiral of another company. larry: a lot of people have compared it to lehman. i would compared to enron, the smartest guys in the room, not just financial error but certainly from the reports, whiffs of fraud, stadium naming so early in the company history, vast explosion of wealth that nobody quite understands where it comes from. kriti: certainly something we will keep an eye on. he mentions enron as opposed the other righty of bankruptcies that have been flooding the sphere, as we talk about recession talks. sam friedman no longer the ceo of ftx. he tweeted, i am sorry again that we ended up here and
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hopefully things can find a way to recover and hopefully this can bring some amount of transparency, trust and governance and hopefully we can do better for customers. joining us to talk about this is sonali basak. what can we do when it comes to credibility here? how do you come back for this not just for ftx but the crypto industry broadly? sonali: given that ftx is seeking chapter 11 protections in bankruptcy, we can see more than 130 entities around the world will be facing a way to pay 70 back in some form over some period of time -- pay somebody back in some form over some period of time. assets and liabilities were
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listed in this is one of the biggest bankruptcies in the last couple of years. certainly some of the biggest we have seen and the crypto space overall and is a harbinger of things to come when you see how many were connected to the ftx empire that are not listed as of today in any of these filings and proceedings. jon: obviously things have moved quickly, to your point. we are looking at the road leading up to today and bloomberg has done its own reporting on the data room that had been set up by sam freed to talk to potential investors in the last 24 hours. it has happened quickly about receiving billions of dollars. even those documents speak to how quickly things were changing and when people have to make decisions on massive multibillion-dollar investments based on what they are seeing in real time, there was a lot of uncertainty.
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cinelli: -- sonali: what happens from here is he has stepped down and the person who will be overseeing the rest of this seeing was a man who stepped in and the wake of the enron scandal and helped do the same. enron is an interesting comparison. to the point, what is there to offer investors anymore, what is left, especially when this is calculated in the form of digital assets? who gets paid, when and how. we have seen large investors. going back to what was said before, that is the big problem. should we see issues among other companies. voyager digital was part of the ftx empire, skybridge as well. there are questions about what they do in relation to ftx and
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what comes next all these companies? jon: lots to continue watching unfold. the turmoil in crypto started as we heard referenced with the deal between finance and ftx -- binance and ftx. he spoke about the decision. >> the deal did not make sense from a financial perspective and from new users, we had very high overlap. we cover all the regions they cover and much less users than us. from a technology product, i think we have a superior product or they don't have anything we don't have. our intention was to save the users. but the news of misappropriating user funds and u.s. regulatory agency investigations, we would like, we can't touch that anymore. jon: joining us for a roundtable
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discussion is david pan. the reality that binance and ftx had a tense relationship, how are we going to look back at that role and create a lot of chaos and on the certainty throughout all of this? david: over the past two years ftx has grown exponentially and was the rival to binance and bin ance has been there for a long time. it was interesting to see how the deal fell apart and it will be interesting to see what happened to the rest of the industry, especially for binance , with a benefit from the fall of xt of -- ftx or will they have more scrutiny?
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kriti: let's broaden this and talk about something a lot of people were worried about is contained june -- contagion risk. when we first heard of the commencing of the chapter 11 bankruptcy, you did see a fade in bitcoin and nasdaq and s&p 500, only to rebound. talk to us why someone who is not directly invested in crypto should care about the story. cam: the primary interest is rubbernecking. i had half a dozen people tell me already they cannot wait for the film on this to come out. from a dramatic perspective, it is a remarkable story, the rise and fall. from a financial perspective, if you drew a diagram of people who trade crypto and trade
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speculative stocks, you probably have a fair amount of overlap. from that perspective, losses on one front can influence behavior and risk mitigation on the other front. from a systemic perspective, i am more skeptical. if you look at the combined drop in market cap of crypto from the highs about a year ago, it lost roughly $2 trillion, which is a lot, but it is actually less than the combined loss of market cap of just amazon, meta, and tesla. from a loss perspective in an aggregate basis, the wealth effect from the crypto demise is not that big compared to what we have seen elsewhere.
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on an individual level, someone heavily involved will feel differently. jon: the story of venture capitalists who have put so much money to work in the crypto area and ftx as well, what do we know about the road ahead on that front? david: we have already seen firms accepting losses from ftx. we reported that softbank is expected to lose nearly $100 million in ftx. it is a very dramatic event and a lot of the investors are caught off guard by the sudden fall of ftx and we will see what
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happens next. as far as we know, ftx is in touch with a variety of investors in the industry. kriti: the next steps will be fascinating. thank you as always. coming up, encouraging signs on the inflation front. kathy bostjancic joins us next. ♪ -- this is bloomberg. ♪
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kriti: this is "bloomberg markets." markets responded positively to inflation your u.s. consumers are still feeling the pinch. the you michigan sentiment -- the michigan sentiment survey dropped where they said inflation is eating away at living standards. here with more perspective is kathy bostjancic. a pleasure to have you on the show we thank you as always. i want to talk to about the inflation story.
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i am curious about some of the pricing of federal reserve cuts. is it still fair to say 2023 will be the year we see that? kathy: thank you. happy to be with both of you. i think rightly so the markets were very encouraged by the weaker than forecast inflation numbers yesterday. the markets had been fearing another strong increase in prices and not getting that, not surprising that the markets have rallied so much and reduced the expectations for the funds rates going forward. i think it is premature to think about rate cuts at this point. i think what we are about to see unfold is the fed dialing back from 75 to 50 basis points. that should happen in december.
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and then another month of decent inflation readings and then the next pivot is when do they go on hold? i think 5% is still a possibility. rockets are pricing in lower than that. what the fed has told us -- markets are pricing in lower than that. the fed has told us that it may be two months and they are looking at the entirety of the picture. jon: i wonder how that comes across in the form of language. the boston fed president, susan collins, and her interview with bloomberg talked about the risk of over tightening. is that the kind of language you would anticipate more hearing from fed officials? kathy: i think you will hear both. on one hand chairman powell and others have made it clear that
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erring on the side of too much complaint -- restraint, there are others, collins and probably the vice chair who are starting to say, we have done a lot and many to the primitive increase in the fed funds rate and the tightening of financial conditions. we know it will impact the economy with a lag but let's make sure we don't overdo it. if you look at core goods prices, they are going in the right direction. we know that core services will be a bit stickier. they do need to calibrate and i think dialing back and going more slowly make sense at this point. kriti: in terms of being stickier, looking at perhaps rising oil prices and food prices, etc., what catches my
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attention is that gas prices will ultimately come down. we are seeing them come down as oil prices retreat. food prices, save for the price of syria for the average american, you are not -- price of cereal for the average american, you are not seeing that. talk about the stickiness and the timeline we can expect americans to get used to that. kathy: you are absolutely right and that when we talk about inflation slowing, it is the pace of increased rates and it doesn't mean we will revert back to lower levels. gasoline and oil prices are a different story because they can be volatile and you can see reset in the price level. but other items can unfortunately mean they rise at a slower pace. we need to look at things in a sector by sector basis.
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food prices have been painful. you are seeing year in year increases that eats into households'budget. if there is excess inventory, like in apparel, we saw a decline in apparel prices. it is category by category, but the best we can hope for in terms of overall inflation is not necessarily the overall prices but a slowing in the rate of change. jon: great to get your perspective. appreciate it as always. we also want to get to developing story with a story that estee lauder is in exclusive talks to buy tom ford at $2.8 billion, according to the ft.
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as we look at the price of the estee lauder shares, currently 4%. we will be right back. this is bloomberg. ♪ if you wake up thinking about the market and want to make the right moves fast... get decision tech from fidelity. [ cellphone vibrates ] you'll get proactive alerts for market events before they happen... and insights on every buy and sell decision. with zero-commission online u.s. stock and etf trades. for smarter trading decisions, get decision tech from fidelity.
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jon: this is "bloomberg markets." time for today's for what it's worth, 0.2%. that is how much the u.k. gdp shrank in the third quarter, the first time since the final down of the pandemic, as the cost-of-living crisis squeezing spending. the former u.k. chancellor spoke earlier about how liz truss is to blame for some of the
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weakness. >> we were going very fast, even after the mini budget. i said we should slow down. she said we have two years and i said you would have two months. jon: we have talked so much about the central bank story and at the other side you have a lot of government officials when it comes to the economy that do finger-pointing. kriti: for the u.k. recession, this is something people were talking about, to say it is actually happening, this could be a protected recession that bloomberg economics said would be a much longer recovery then you might see in the rest of the world there that is absolute fascinating. jon: and something we will continue to watch. we are watching the markets also. the inflation story is
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continuing to keep investors on the bond side. kriti: the s&p 500 up .8%. the s&p up .8%. stick with us. this is bloomberg. ♪
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♪ >> a bear market rally or the seeds of a next bull market? a lot of questions about what comes next after that monster rally yesterday. taylor: trying to recoup 4000 on the s&p 500. the bond markets are closed today. happy veterans day. you are looking at another day of significant dollar weakness.


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