tv Worldwide Exchange CNBC April 7, 2022 5:00am-6:00am EDT
it is 5:00 a.m. here at cnbc global headquarters. here is the top five at 5:00 a more aggressive fed strategy the central bank is eyeing steps to shed billions from the balance sheet and ramping up rate hikes. the oracle of omaha. shares of hp taking off after berkshire takes a stakes. and amazon facing scrutiny from regulators around the use of your data and lawmakers set to take on the hot button issues of
lawmakers sts trading stocks ane conflict of the. he's back of the he's back tiger woods is back at the masters. bringing big attention to the game it is thursday, april 7th. you are watching "worldwide exchange" here on cnbc good morning i'm frank holland in for brian sullivan let's kickoff the hour with the check on the markets and your money. stock futures right now are flat we are seeing the dow pretty much flat. nasdaq up slightly higher. this is as stocks are facing a t two-day losing streak. the central bank ready to tighten monetary policy. unloading $95 billion from the
balance sheet. on the back of the fed minutes, the bond market. the 10-year yield ticking at 2.57%. above the 2.5% benchmark that put tech stocks under pressure and wti back under $100 a barrel this is after theiaea planned to tap 60 million barrels after the release from the u.s crude oil under $100 a barrel. $97 currently. time to go worldwide right now. a tongue twister, julianna you are in the london newsroom >> frank, i don't blame you. european equity markets are on the mend we had a tough day yesterday state side, you saw sizeable
losses stoxx 600 dropped 1.6% this morning, it is green. the one outliar is ftse 100 is trading 12 points lower. we have seen a strong demand for sterling that is an inverse relationship. that is the standout here. otherwise, broad based rally this morning from the sector, this is what the split looks like health care up 2%. leading the gains. chemicalstravel. basic resources off more than 1% the oil and gas basket with the under performance in shell it is in focus the oil giant said it will write down $4 billion to $5 billion with the exit in russia. that is different from the activities in the market the energy giant added the
change will not impact the company's earnings thanks to rising prices and profits from higher lng trading frank, over to you. now to the morning's other top stories. president biden with a pair of nominees serving at the s.e.c. silvana henao is here with that. >> reporter: the president is helping to fill key positions. tapping to fill the seat of outgoing lee the president also picking an s.e.c. attorney temporarily working with the senate banking committee staff. both will need to be confirmed by the senate before taking the position the army corps of engineers is withdrawing the permit for spacex the move is made after the company failed to provide
environmental information to the agency requested spacex was looking to build several pieces of launch related infrastructure elon musk previously threatened to move operations to florida if the approval didn't happen in texas. and samsung is projected a record revenue for the first quarter results. it expect a 50% jump in profit from the previous year frank, it is citing memory chips and latest on smartphones out later this month >> thank you, silvana. turn our attention to d.c. sanctions against russia describing major war crimes in ukraine. nbc's rie jackson has more fro
washington good morning, brie >> reporter: good morning, frank. president biden says sanctions will stifle the russian economy for years to come. there is pressure for the u.s. and allies to do more to stop russia's war a bird's eye view reveals the scope of the devastation caused by russian forces. stories of those on the ground, some rehe covering bodies are giving accounts of atrocitatrocs >> nothing less than war crimes of the rcrimes >> reporter: president biden unleashing a new round of sanctions targeting vladimir putin's daughters and russian banks. >> they will not touch their money. they will not be able to do any business here. >> reporter: the president says sanctions so far have wiped out the last 15 years of russia's economic gains
ukraine's president wants more pressure applied on russia saying sanctions have failed to stop putin's attacks the u.s. is holding off sanctioning china and india for buying russian oil money that helps fund putin's war. >> there are loopholes that piece by piece and one by one, we're trying to close. sometimes that takes time. >> reporter: the administration vows to hold russia accountable. that includes assisting with international war crimes investigation. >> the world sees what is happening in ukraine the justice department sees what is happening in ukraine. >> reporter: as russian forces withdraw from kyiv, we are seeing the destruction left behind ukraine still bracing for more in other parts of the country. lawmakers on capitol hill are calling for a federal report on evidence of war crimes committed by russian forces in ukraine frank. >> brie, thank you for latest. turning attention back to
the markets after the rough day on wall street that saw all three indexes in the red nasdaq down 4% in the last two days investors are cautious over a looming recession and increasingly hawkish fed and forecast across multiple sectors. data from mastercard showing americans are returning to the pre-pandemic spending pat ttern. i discussed with linda kirkpatrick. >> spending on goods and services they are focussing on passions and categories that are related to travel and live entertainment and indoor dining and other in-person activities a shift. >> we are seeing a few shifts in the market joik me now is a member of the
cnbc council ivory, thank you for being here. >> thank you forego having me >> inflation up 8% over the last year over the target of 2%. we are officially over the word transitory what are you most concerned about? the balance sheet or the time going? >> it is both. you know, tightening into an environment where gdp is slowing already. that is reflected in the flat yield curve. not compensating bond investors for time or we are seeing that with earnings per share guidance which is negative. more companies are negative for three consecutive quarters that was bad enough that they are tightening by raising the fund rate. the balance sheet is spooking the markets and just to add contact. the federal balance sheet is $1
trillion in 2008 to $4.5 trillion in 2014 to close to $9 trillion today if you look at the chart of the s&p 500, and the federal reserve balance sheet, they are almost in lock-step you can reduce the balance sheet. you can allow the bonds to roll off. as the bonds mature, they will not refinance. another $1 trillion matures in 2023 they can get more aggressive and actually start selling bonds on the balance sheet. that is far more aggressive than the market would tolerate because not only are you re-hypohicating debt, but you are competing with the federal reserve. that may be one reason you see yields on the long end start to
rise >> the market is concerned about the plan i know you are concerned about consumer spending. we had $1.2 trillion in stimulus unlikely we get anything like this this year that is one of the reasons you are staying away from tech and growth stocks. you are down on those. what areas are you bullish >> i'm bullish on gold you had the segment on russia. what the united states is essentially doing is weaponized the u.s. dollar. that may help buy gold in portfolios gold does well in the environment with inflation it is not that inflation is going to go down, but not up a same late as last year anytime you see a rate of change basis and inflation and economy is accelerating, gold does well. there are bond proxies and consumer staples these are defensive in nature.
it is interesting to see what happens with bond yields it may come to pass as the economy he slows down and the fd stops getting hawkish, that makes bonds more aattractive particularly with a safe haven trade. bonds on the long end are defensive in this environment. >> we will have to keep our eye on bonds ivory johnson, thank you when we come back, jay powell and the fed looking to ramp up the window and the supply chain pressures. the ceo is speaking about that we will go live overseas where secretary of state blinken and nato members are mapping out the strategy over the continued invasion of ukraine.
joining us now is patrick bousquet-chavanne. thank you for being here. >> good to be here, frank. >> cross border ecommerce is someone from another country is buying something from the u.s. and shipped to them in that country. first off, let's talk about supply chain issues and logistics issues when we went to the store over the last year, stuff wasn't there. is that helping or hurting ecommerce? >> frank, it promoted ecommerce. we had a unique period of two years where consumers around the world look on accessing global goods. they discovered buying directly from brands and retailers, overseas was convenient. they trusted the process we are seeing a lot of cross border purchasing right now.
the consumer goods space should reach about $750 billion by 2023 a massive growth the last couple years. we see now in the sustained way as consumers are getting used to cross border >> you work with global brands like neike and este lauder. >> i think consumers experience has to be local as possible. you behave in a certain way and used to methods of payments in the markets. as brands reach out to global consumers, they are offering the same and convenient and trust worthy paymenting options and direct communications with the brands our view is with the technology and the service we provide to the global brand partners is
key. >> if you go on a site and it is in euro or yen, i have to figure out a few things one question as you increase sales across borders, you face more supply chain challenges how does esw ease the challenge? >> the u.p.s. reliance is bringing two ecosystems together technology through easing and light flagging to the brand and one of the platforms it is trading on we serve to the consumers a local experience prices which they are used to in their local currency we take care of the duties and taxes that are relating to i international sales so there is no surprise. we offer to them in most markets around the world, a very local
price which includes duty and taxes. so that is no surprise when you check out. when u.p.s. comes in, that expensive brand in u.s. and logistics and the platform combined with our ecosystems will get brands in the u.s. to offer service in four weeks time now with the global consumer base >> patrick, you have insight into the global freight and rates and delays and things like that nike and este lauder and partnership with u.p.s what do you hear about a freight recession here in the u.s. as far as log jams we have disruption like the port of shenzhen shutdown what are you seeing from customers? >> i think it is sustained challenges, frank, that emerged in autumn of last year we saw how challenging the winter season was for the brands
in the fashion side of the business or the goods space. the disruption has been massive. we hoped for recovery faster the war in ukraine is not helping to normalize the availability of the we see thatting going on probably throughout the remaining of the calendar year although we expect the peak season to be in a better place by the time we get into september or october and november continued pressure on capacity and inflation ramping up on the supply chain side and rampant across the board at esw, we go to leverage $1.5 billion globally to offer clients the most efficient way
possible and they fulfill international demand >> thank you, patrick. coming up on "worldwide exchange." we look at how the congress investments stack up data that may surprise you that is coming up next >> announcer: today's big number 55%. that's the share electric vehicles will make up of total car sales by the end of the decade according to research by goldman sachs. ( ♪♪ ) i call it the wheel. okay. this is a miss. edison, can i be honest with you? i-i-i-it stinks. (speaking japanese) like i was saying, it's ftx. it's a safe and easy way to get into crypto. ehhh, i don't think so. and i'm never wrong about this stuff. never. when hurting feet make you want to stop,
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on capitol hill today, a hearing to dive into the costs and the roles of congress when it comes to trading stocks data shedding light on members of congress and investing. we have ylan mui with are more on the findings. people are waking up this morning. >> reporter: good morning, frank. a lot of outrage of the potential for members of congress to trade stocks and profit from their policies are they actually making any money? well, not really, at least not anymore than the average investor research found that if anything, lawmakers under performed the broader market they looked at eight years of trades in the house and senate and compared to a similar basket of stocks. over six months, stocks purchased by members of the house or families, per formed 26 basis points worse than index.
senators or families were 27 points later none of the readings were significant. the researchers looked at the best performing stock picks and portfolios for those accused of insider trading. none showed abnormal returns there are caveats here it is impossible to know how much money any single lawmaker made or lost because financial disclosures don't give us new detail to calculate that because the research focused on average returns, it is possible that could mask one-time gains from insider or inappropriate tra trading. this is all part of the debate we will hear today when the house holds that hearing and if lawmakers should be prohibited from trading particular stocks is this all about the profits or public perception? >> a lot of thoughts about it of
the hot button issue for sure. my question is does it hurt or help the push to ban trading in con congress >> reporter: this research cuts both ways. you can say if they are not beating the market, they are not trading on any insider information. you expect them to do better than the average invinvestor on the other hand, maybe they are getting insider information, but don't know what to do with it and not very good at investing overall. i think really what you hear from lawmakers they want to avoid even the appearance of a conflict of interest especially at a time when trust in congress is so low. i think that is what is fuelling the debate over whether to ban lawmakers from trading individual stocks. they don't want to have the whiff of problems. >> thought provoking research. ylan mui, thank you. still on deck, gm looking to make a splash with the return
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ferguson is here. and secretary of state b blinken is meeting with nato we are live overseas and warren buffet t in a buying mood. we will outline his big interest in hp. it's thursday, april 7th welcome back to "worldwide exchange." i'm frank holland in for brian sullivan 5:30 a.m. on the east coast. here is how your money is looking. stock futures are flat across the board. dow is flat. nasdaq is slightly higher. this comes as stocks come off the two-day losing streak. the central bank appearing ready to tighten monetary policy and unloading $95 billion of assets in the balance sheet starting in
may. on the back of the fed minutes, let's check the bond market. the 10-year yield at 2.57% something to watch as it continues to be over 2.5% yield. oil market right now wti back under $100 a barrel this after the iaea states it is tapping 60 million barrels from oil reserves on top of the reserve release from the u.s crude oil is under $100 a barrel $97 this morning a check on crypto. bitcoin is lower 1% lower right now we are seeing crypto lower with the exception of ripple. let's get to the top stories. that includes warren buffett's latest with silvana henao. >> reporter: 11.4% stake in the
company hp it is worth $4.2 billion based on yesterday's close the third big investment since the shareholder letter in february the s.e.c. is investigating how amazon disclosed its business practices that's according to the report from the wall street journal the focus will include how the company uses third party data for its in-house brands. there is no factual basis for the use of other data according to the company. and the chevy volt is coming back into the market after the probe of the battery fires those led to a recall of every vehicle. gm will run relaunch ads during opening day games of the mlb
the company says it is still expecting record sales for the volt in 2022 and beyond. frank. >> thank you for that. turning attention to the latest on ukraine. that country's thapresident accusing russia of hiding evidence of killing civilians. this as the mayor of mariupol said that 5,000 civilians have died since russia invaded. in brussels, blinken and nato ministers are meeting on the next steps on addressing the crisis the ukraine foreign minister asking for more weapons for the fight against moscow we have sylvia amaro with the latest what is the latest from brussels >> reporter: good morning, frank. we are seeing nato foreign affairs ministers meeting today. they are discussing further help to ukraine this at a critical time in the
invasion of the country. yesterday, we heard from nato secretary-general saying that there's no evidence that president putin has changed intention to control the whole of ukraine it was against this back drop that the foreign affairs minister said earlier this morning that ukraine needs more weapons. >> my agenda is simple it has three items on it it. weapons, weapons, weapons. we are confident that the best way to help ukraine now is to provide it with all necessary to contain putin and to defeat russian army in ukraine and in the territory of ukraine so that the war does not spill over further >> reporter: one nato country, czech republic , announced it i
sending tanks to ukraine we will see if others follow suit frank, what practical help will nato come up with at this meeting in terms of what they will do to support the ukrainian army >> sylvia, a lot to talk about where is the eu in terms of energy sanctions against russia? >> reporter: we are seeing at the moment the eu going ahead with the ban on russian coal actually two european sources told me this morning that this ban will be implemented as of august in the meantime, they are discussing a potential ban on imports of russian oil this is more difficult for the europeans than putting an end to russian coal there is more momentum behind that we cannot exclude the further sanctions from the eu over russian oil. for the time being, frank, that is discussion.
>> sylvia, thank you very much turning attention back to ukraine. a concern for federal reserve members forcing them to hit pause on the bigger rate increase at the march meeting according to the fmoc. a number of members are hawkish to tackle the continued threat of inflation including shrinking the central bank balance sheet by $95 billion a month. for more on the path forward, let's bring in roger ferguson. thank you for being here this morning. >> thank you, frank. >> you know, your insight is valuable the fed minutes yesterday are haw hawkish. markets not happy with the tone. is there an overreaction is there something in there about the more aggressive stance that the markets are overlooking that could be beneficial >> well, i think there are a couple of things to recognize. it is more hawkish it laid out exactly what the
plan is for the gradual reduction in the size of the balance sheet. recognize also they were clear about the uncertainties they confront on both sides while they put more weight on inflation. it is a clear and present danger they will be very data driven. i think the plan is for two or maybe three basis point moves for this year. i also read that as we saw in march, if external circumstances require change of plans, they are ready to do that a fed is clearly wanting to get inflation under control, but recognizes the external environment which is uncertain than the plan itself. >> it sounds like the fed is staying as nimble as it can to battle inflation the tightening in may is earlier
than expected. maybe $1 billion is more than you expected you had philly president said it will be raised to avoid recession. how does the market interpret these messages >> interpret as the following. one, inflation is a clear and present he danger. two, the fed knows it is behind the curve and has to move more expeditiously to catch up. they should recognize the fed will use both of the tools, steadying of interest rates in a methodical way and quantitative tightening of the balance sheet. all of those things are true. the march meeting showed it. the incoming data willi tell th fed and they are planning to change their plans it looked like a number of
people on the fmoc were prepared to go 50 basis points. because of the lead of the chairman, we were comfortable going 25 basis points. this is not a set it and forget it fed this is a fed that has a plan and it will take incoming data as part of its guide certainly they recognize something else the financial conditions, what is happening with interest rates and equity valuations will have an impact on the economy and outlook. they are looking at markets to look at the measure of financial conditions the fact that stocks sold for two days is also important >> before i let you go let's talk about the sell off. tech stocks hit hard by the meeting. how mindful is the fed of the wall street impact and main street inflation hitting a lot of people people having a hard time buying
food and putting gas in the cars >> i think it starts and you heard it from governor brainerd. the main street impact that is in their minds for the reason you pointed out. inflation is a tax on low and moderate income individuals. it is inconsistent with the fed's dual mandate i think main street is very much on their minds the other thing on their minds is the market. in equity valuation particularly they look at that not as an end to it self, but because it reflectsi something called the wealth reflect and confidence. the movement of equity market is not a direct goal, but indication of how the economy might play as individuals feel more or less wealthy obviously, they also look to see from the market and other survey data what is happening with the
market expectation on inflation. i think the market is signaling in some areas concern and inflation may run hot for longer than they want the fed takes in signals from the different areas, but in the inflation message, it is primarily a main street message. they look at wall street because that tells us something about wealth effect and consumer confidence >> we appreciate your insight. former fed chair roger ferguson. still to come on "worldwide exchange." tiger woods is set to tee off with the return of the golf's greatest and what it means for the game's bottom line. before we head to break, nfl and nhl and mlb making investment in the digital platform fanatics. it totals $1.5 billion if the nfl, $320 million total shares of levi's jump on the
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the first round of the masters is set to begin two hours from now with 91 players looking for the green jacket hideki is the returning champion, but everyone is focused on one man tiger woods. the five-time masters winner is set to tee off at 10:34 a.m. he is set to return 17 months after the car accident that nearly took his leg. we have damon hack with the latest this morning. we appreciate you being here. >> a huge day. tiger playing for the first time since november of 2020 all eyes on him. exciting here in augusta >> let's talk about the eye of the tiger. not the metaphor you have to tell it us
how did tiger look did he give off the normal tiger aura before the crash? >> at the age of 46, it was the same tiger he had a one-on-one chat with me before the press conference. he looked serious and all business his stare was as reminiscent as in his 20s he has a noticeable limp especially walking down hill the right leg in rehab he said he would not wish it on anybody. i asked him to compare playing on a broken leg. he said this is more difficult he said he believes he can win the masters tournament and he can be the player he was before the car accident. >> damon, i have seen out the golf channel you say the swing looks good and the back looks good. is the leg that much of an issue? i hear augusta is wet this year
which may be a challenge >> that is right good years and dry years, augusta national is the most difficult golf courses to walk it is hilly. uphill downhill i ran into champ steve el elkington. he said his back looks great he has to deal with the leg. that is less than everybody else in the field it is a big question because the course has taken on more than 1 inch of rain the last couple days it is a hard walk in good times. it will be a very difficult walk for tiger over 72 holes to see how that leg holds up. it is a matter of how he handles the pain and mix of rehab and workingo out and rehab and rest. >> we will not leave without getting your prediction, but first, why is tiger not wearing
nike >> it is all about comfort he is wearing a footjoy model shoe it is about finding the width and comfort in the leg his foot is a different foot and different leg. he had many fractures in the right leg. it is about finding the pr proper fit for the shoe. he is a nike man we know that he is looking to navigate the hills of augusta national. walking uphill walking down hill. he has to swing with comfort and walk with comfort. it is about finding a way to make it to sunday evening, which he hopes to have a green jacket. >> tiger thinks he is going to win. what about you >> we will hear tiger roars. i think he makes the cut i do not pick him to win he pulled the habs rabbit out oe
hat so many times. i'm picking brooks koepka to win this masters i think we will hear atiger roars, but brooks koepka will win the masters. >> damon hack. when will we play? >> call me spring has sprung. we will make it happen >> thank you, dam on. and still on deck, we layout the trading day ahead and what may be in store for the markets with the hawkish fed taking shape. if you missed "worldwide exchange" follow us on all of the podcast platforms. "worldwide exchange" will be right back
watching bonds with the 10-year yield right now at 2.575% for more on the trading day ahead is asset manager chief strategist john stoltzfus. >> thank you for having me here, frank. >> we saw the reaction in the markets yesterday. a lot of concerns about the potential for the economy to slow down. is that why you're seeing or why you think we saw the selloff yesterday or is there some other factor >> frank, it is normal for the market to react adversity initially as the the fed gets the rate hike cycle under way. it doesn't price us much what surprised us is the lack of
prot appreciation the fed is pivoting. it tapered the bond buying program. that is gone it has raised for the first time and set plans for raising 50 bips it is talking about reducing the balance sheet by $1 trillion of the wbalance sheet. >> you are saying this is a bernancke legacy allowlluding to more transpareny is this too much information >> i don't think it is tmi i think it is quite good that it does this. it is just it takes a while for the market to digest it.
you know, i think the fed chair is on the way to do the right thing here i think the market just is saying i'm from missouri, show me, if you remember that slogan. >> we had roger ferguson on earlier. i talked to him about the fed measures wall street versus main street tech stocks hit hard by the fed minutes. a lot of people on main street are hurting with inflation and gas prices going full scircle looking at 401(k). >> i think the fed is considering main street first. after that, there is consideration of wall street there is a knockoff effect teacher pension or police pension or fire pension, et cetera this is something the fed takes into account when it does the surveys from
the regional fed offices we think the fed is doing the right thing. related to tech, the selloff is indiscriminate what is important is separating the wheat from the chaff there is something important in the lives of the businesses and consumers. it will do better as things begin to pick up. >> john, i want to ask you about a pick you say this is simply people taking profits without fomo. people have been standing up with the tech names and thinking the market will do up, up and up. >> i think the thing is the historic long-term effect tells you good businesses will weather all kinds of situations in the economy. the prospects of the secular basis for the technology and what it can do for all 11
sectors, including itself, are really good drivers here i think people learned a lot over the course of the last 13 years. >> interesting john stoltzfus, thank you for your insight >> thanks, frank. that does it for us on "worldwide exchange. "squawk box" is coming up next thanks for being here. (vo) verizon is going ultra! and now, you can too with the offer you just can't miss. for a limited time, get a 5g phone on us! (mom) delightful. (vo) with no trade-in required.
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good morning the fed getting more aggressive. considering plans to shed billions from the balance sheet and ramp up rate hikes. oil major shell is revealing the financial hit from leaving russia details straight ahead. and hp shares soaring after berkshire hathaway revealed an 11% stake in the company it is thursday, april 7th. opening day and first day of the masters. "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from the market site in times square. i'm rebecca quick along with joe
kernen and andrew ross sorkin. let's look at the u.s. equity futures. there are green arrows, but barely dow up 38 points nasdaq up by 80. this comes after stocks fell once again yesterday the dow was down less than .50%. the nasdaq was the big loser took it on the chin. down by 2.2% this all happened as treasury yields continued to climb. minutes from the fmoc show the h fed is looking at raising rates and looking to increase interest rates. yields down this morning they were up throughout the session yesterday. 10-year yields 2.579%. andrew let's talk about shell it will writeoff $4 billion to $5 billion in the value of