Transcripts For BLOOMBERG Bloomberg Surveillance 20240622 :

BLOOMBERG Bloomberg Surveillance June 22, 2024

Their losses. The shenzhen composite fell more than 2 . Earlier this month, china plus government took unprecedented steps to bolster its stock. In greece, the latest talks on a bailout have begun this morning with the disagreement. Prime minister Alexis Tsipras says lawmakers have approved austerity measures, the creditors disagree. They say more reforms are necessary before greece can get any of the 95 billion worth of aid. Donald trump is worth 2. 9 billion. The celebrity president ial candidate has said he is worth more than 10 billion. The bloomberg billionaires index shows that the majority of his fortune comes from real estate holdings. Bp has reported his slowest quarterly profit in at least 10 years. The British Energy company has been hurt by the end of the boom in trading. The conflict in libya forced bp to write down almost as hundred billion dollars. Brent oil is 20 below its peak in may. The newest book from dr. Seuss has hit stores today. What cap should i get . Is the first book released by him in 25 years since he died in 1991. It was rediscovered in 2013. Tom there it is, dr. Seuss out with i am not even going to talk to vonnie about that. Dupont earnings out to get my attention with an accelerated share buyback. Lets go to the data check right now. Equities bonds, currencies commodities rebound of 12. Tony dwyer joining us in the next hour on the equity markets. Crude is stunning 47 up. 08. On to the second board, if you would. Brent crude, 52. 87. We are not near a 49 handle on brent, and that is a big deal. The brazilian real weaker. Here is russian ruble contained, measured, a little bit of depreciation. Up we go with this painful single spike. At the 70 level, and we are up again. Brendan it was assumed they would move. That rebalancing. That has not happened yet. Tom sanctions matters here. It is an oil economy. They were banning something from the netherlands. Brendan sections on russia do not matter so much on russias counter sanctions on everybody else. Tom wrubel 60, down 10,000. Oil is a big story, but we need to look at the continued carnage in china. All in china wait for the next step by government authorities to staunch declines in the equities markets. Not a plunge today,. Tom, when will we see the Chinese Government act . I think we already saw action last night. The main reason for the drop in the market yesterday one of the main reasons was concerned from investors that the government was going to exit prematurely from extraordinary measures to stabilize the market. That is what we saw shanghai down 8. 5 . Yesterday china made a statement denying those rumors. I think that was enough to put a bit of a floor under the market today. Brendan is there any risk with the fallout that the Chinese Government is going to have to concede that it cannot make its 7 growth target . One of the big concerns for china plus government, one of the reasons they have been so aggressive, is the concern that this will start spilling over into the real economy. The high equity valuations that boosted spending at the shops. They boosted for china plus equity brokers, which had a direct positive impact on gdp. We are seeing the markets spinning into reverse in the second half of the year. All those positive impact are going to take are going to turn to negative impacts. Tom tom orlik, thank you so much. Greatly appreciated, Bloomberg Televisions Bloomberg Television Bloomberg Intelligence in china today. Neil joins us this morning and harry challenger at bnp paribas. What is different about the decline of oil this time versus what we saw in february and march . Harry the difference this time is in the supply segment. Earlier decline in januaryfebruary was a reaction to opec maintaining production point at the levels they were producing. This time around they are focusing on u. S. Supply, and the fact that it is not declining despite the huge decline in count that we had. It is a question of how much oil we have and where is it. That is with the market is focused here in where the market is focused. Brendan is it a natural floor, the rebound . Harry 50 will be difficult to break on the downside. Brent is looking at the global factors, large increases that in iraq are shifting the imbalance. People are worried about the return of a ram that will not happen until next year. Saudi production is at an alltime high, and iraq is increasing and boosting its production. Tom what will russia do . We saw the panic and 70, and i am not saying they should panic right now, but the vector here is should russia truly panic in march . Do you sense that they will act again . Harry there is not much russia could do. Back in november of last year they tried to talk with opec, and clearly they would continue producing. They can rebound the market and extend the time. Relative to oil prices, russia could only be tom thank you so much. Neil, i want to rip up the script, but lets stay on oil for one second. What did you learn about the responsiveness or elasticity of how americans enjoyed oil prices being lower this time around . Can we responded do more consumption . Neil you saw a pretty dramatic cut in mining Capital Investment across u. S. Firms pretty quickly after the initial drop in Oil Prices Back in june. The consumer response is a bit more difficult to model, but i would say for those that have said that in sumers literally spend the windfall, the savings rate is not higher today than it was last year. It is the same, which means that people basically spent one of her windfall a guy. Disposable income and Consumer Spending running right on top of each other. Tom we have something going on this morning vonnie which is the new whisper in terminal value. I missed this. It is my fault. I screwed this up. Dupont cutting their dividend, back to 1904. Vonnie not only that, but they missed on the top and bottom line. Second quarter operating at 1. 18 versus 1. 21. Tom it is one of the whispers in the continuum of three years or four years. Remember that morning when dupont cut the dividend . Is this what we have in store with a lower nominal gdp, lower terminal value . Will we see bluechip stocks lower their dividend . Neil in terms of i am not a believer in secular stagnation. Certain companies are going to come under pressure as the unwinding of the commodities super cycle continues, and we will reestablish a lot of the relationship that existed before , such as in the 90s when you had a inverse relationship between copper and oil. Brendan i love this, the difference between neil duut tta and tom keene. Tom they have the noise of the spinoff here. There is some m a noise here. I do not want to be draconian, but you wonder brendan, i go back to rip up the script further, the brazilian real to the mexican peso. It heats things up. Neil there is a threeday heatwave in new york. Brendan i wish i could quote the exact person who said that you know you are in trouble when your Approval Rating is lower than the inflation rate. Tom in brazil are these are little whispers. Quickly, do you link emergingmarket angst back to your optimism on the American Economy, or is it removes . Neil you cannot operate in a vacuum but the question is whether these Downside Risks are able to meaningfully alter the underlining trends in the economy. I dont see that. We have been talking about global firecrackers going off for the better part of the last year, and there is we have 280,000 jobs a month going into this, and now we are at 215,000 . That is not a big deal. Tom neil dutta. How about a twitter question. What is your oil called now . What do you do with oil now that we have seen it further south, at 52. 77. Gold a little soggy this morning as well. Stay with us. From new york city, this is bloomberg surveillance. Tom good morning, everyone. Bloomberg surveillance. Lets get to top headlines this morning. Here is vonnie. Vonnie in a few minutes, president obama will become the first sitting president to address the African Union. It is the last stop in a fiveday twonation african visit. Theres likely to be a changing of the guard at procter gamble. Bloomberg news reports png that he may announce his retirement this week. He has served two terms as ceo. More than 1000 experts in science and technology are warning that kill the could threaten humanity. A leader from the future of Light Institute says homicidal machines like hollywoods terminator could become very real. Among those signing the letters, stephen hawking, elon musk, and steve wozniak. [brendan yawns] brendan are you going to do that to me vonnie . We have to turn from killer robots to pharma. Exit celebrex, enter e brands. Pfizer reports at 7 00 this morning. Merck does, too. We are not going to talk about killer robots. We are going to talk about looking at pfizer. Are we looking at allergan, what is left of that business . Does pfizer want botox . That is a very interesting idea but i think for pfizer the bigger priority is getting more r d and deeper in the pipeline more along the development stage. Pfizer is preparing to potentially split the company in two. They added high spirit, and that business is large. They need to add on to the innovative part of the business and add more growth, find more compounds to come to market. Allergan is an interesting idea, but i do not think it is quite what they are looking for right now. Vonnie will they be able to make it up on cynthia this is i think the first full quarter of it is going to be a popular drug for breast cancer. They are doing a collaboration with merck. They are behind the curve in oncology, but they know that and they are pretty aggressive. Tom a million use ago people talked about them for financial return. What is the level of panic over their Financial Performance particularly at pfizer, which is a relative underperformer . Cynthia i think there is a common sense that pfizer does not have the pipeline the common pipeline that they used to. I do not know if that is substantially fair. Tom what is the financial sweat Anthera Pharmaceuticals . I do not see it. What is the financial sweat at the pharmaceuticals . I do not see it. Bloomberg. Com i think cynthia i think everyone thinks they are going to buy the growth. Vonnie what about merck . Cynthia merck has another oncology product. Investors are waiting to see how that will work as well. There is a lot of attention on what happens with their oncology franchise. That is a big growth driver for oncology and merck as well. There are big developments coming up with their hepatitis c product. Tom thank you so much. Cynthia koons at bloomberg this morning. In the next hour, we look at the equity markets, some of the challenges. One of the new things is the dividend cut at dupont as well. Anthony dwyer will join us as well. He is looking for a pullback to find crude acquiring shares this morning. Stay with us. Bloomberg surveillance. Tom good morning, everyone. Bloomberg surveillance. Tom keene, Brendan Greeley and vonnie quinn with me today. This is mark gilbert with his greatest spirits off our london desk. Where is europes jpmorgan . I thought this was brilliant. The regional banks in asia and europe are just different. Tom this is a brilliant oped about the culture linking banking with politics. Tom how is Deutsche Bank perceived in germany . Did you have a Checking Account with them . Brendan i did, actually. I think my Checking Account with Deutsche Bank is still in arrears. At my old address, evidently blue warning envelopes kept arriving until they stopped arriving. Somewhere there is a file on me at Deutsche Bank. To your point, it is a National Champion and it was supposed to be germanys interNational Champion. That did not work out. Tom neil dutta is with us this morning. You work at the major banks here. Some in washington would say they are too big, but are they big enough to compete with a big European Bank . Neil i would think so. The u. S. , we have the most liquid, the deepest Capital Markets in the world. Those are backed up by major institutions, and i think we can have reasonable debate about whether they are too big or not, but they provide a very Important Role in the functioning of the Financial Markets. Brendan there was a piece that looked at the euro bond market how it is becoming more liquid with qe. Is it a more qebased development, or is it longterm that the Financial Markets could become more important . Neil that is going to be the case. One of the benefits of what happened recently is that it actually creates some space in europe for further fiscal integration, further banking rate integration, and as that happens, you will have more dispersion in the Financial Markets. Will that the throne the u. S. In terms of its preeminence . I do not think in any of our lifetimes. Brendan i like that neil dutta says further fiscal and banking integration, as if that is a thing that just could happen. Neil but europe is a process. Brendan greece and its creditors head back to the negotiating table. The process is not double dash is not over. The latest cycle of talks next, when hans nichols returns from vacation. This is bloomberg surveillance on Bloomberg Television. Good morning. Tom good morning, everyone. Bloomberg surveillance. Vonnie quinn has our top headlines this morning. Vonnie in china, regulars have assured investors the government has not withdrawn its support for equities. The shenzhen composite fell more than 2 , one day after a route wiped out 600 Million Dollars 600 billion in market value. Earlier this month, the Chinese Government took unprecedented steps to prop up stock. Secretary of state john kerry returns to capitol hill today to testify before House Committee. The secretaries of treasury and Housing Department will join him. Lawmakers could approve or reject it. President obama says he will veto a rejection. New york has decided not to fix laguardia airport, considered to be one of the worst. Instead, it will be torn down and rebuilt with help from delta airlines. A 4 billion terminal will reopen to the public in 2019. Vice President Joe Biden once compared the airport to an airport in the third world. Joseph biden this will pull money off the sidelines to invest in a Virtuous Cycle of more efficiency more productivity, and more good middleclass jobs. Vonnie laguardias main terminal was built more than 50 years ago. Vw edged out toyota in the First Six Months of the year. The copy sold just more than 5 million vehicles. Vw benefited from stronger demand in europe, helping to offset the slowdown in its biggest market, china. And a first for the nfl, a female coach. Jen welker is joining arizonas staff for Training Camp and the preseason. She was the first woman other than kickers to play in a mens pro league. Tom interesting. Brendan i love that. Tom lets turn to greece right now. One thing is certain all of us were worn out by the endless acreage over greece the endless bickering over greece. It is relatively quiet. Surveillance has not spoken to hans nichols in weeks. I say we need to give him some love her and hans nichols returns. Define troika for me. We talk about troika. Who are they echo are they organize . Hans the old troika was the European Central bank, the International Monetary fund, and the eu. The new term i will bungle this it is a chariot driven by the chariot it is a chariot driven by a goddess. Tom is it a pleasant discussion . How are the greeted at the Athens Airport . Hans not well. They may get to the airport fine but it is a question of which hotel they are staying at. That kind of bickering delayed the start of the talks. The troika officials wanted to stay closer to the hotel. There is a fair amount of tension. Brendan let me get this right. They are arguing about where to stay but i am glad you are back because there is also a substantive disagreement as well. Hans it is how much access they will have to the finance ministries, how much will they get access to labor. Will they get access to health . They need the numbers to come up with something and they will have the numbers. The bigger one is who gets the points. Does greece get to keep the points . Brendan i want to go to something that of course, Yanis Varoufakis is still with us, and oped this morning. He had a big plan that was leaked. The idea was to allow to that allow multicancellations of arrears between the state of the private sector using an existing webbased payment platform suddenly and a comment like greeces would acquire degrees of freedom. Everybody gets liquidity. My question is, is he the most entertaining finance minister ever, and why cant europe let him go . Cons they will not let him go because he keeps cropping up. This time Hedge Fund Managers release the details of this parallel currency liquidity plan. There are many remarkable things about him, not the least of which they were planning on hacking into their own computers. They never executed this plan, we should be clear. And the authorization that mr. Yanis varoufakis said he got from mr. Tsipras. Yanis varoufakis took that authorization. He is an old childhood friend. Now Columbia University comes up with the plan. Greece is saying to

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