Transcripts For BLOOMBERG Bloomberg 20240703 : vimarsana.com

Scenario. We will speak with bruce richards, Marathon Asset Management chairman and ceo. We are going to speak to the mercedesbenz ceo on the state of the auto industry. Welcome to bloomberg markets. There is a knot of news flow but equities going equity equities going absolutely nowhere. Guy you must have read those headlines with a spring in your step. Alix if we are looking at a new range, 80100, that also might be a little different, but different for who . Investors or the fed . Guy im wondering how much jargon i said it, you are not allowed to. You are banned from using any oil jargon. No oil jargon. I can do it, you cant. Alix thats fine. You cant say esaf. Guy Sustainable Aviation fuel is what she is talking about. Does 100 oil mean stagflation not only for the u. S. Economy but the Global Economy . Lets bring in our panel to discuss. You can take the strudel out of his mouth but you cant take opec out of his blood. Im going to start with you. You arent opec veteran. Are we going to 100 . I use the vote i use the word veteran in the nicest possible way. Is that the direction of travel . Good morning. It is lovely to be stateside. Markets like to test boundaries. They like to test the upper band and the lower band. And this is going to be it. How quickly do you get to 100 . And with what kind of volume and size . I think everyone likes to try and test the market. I think that is what happens next. It is not necessarily whether china emboldens the growth story but you do have to have a base case before you hit peak pessimism on china. Alix he gave you shade because i always call guy old. This is where he can turn that shade somewhere else. Manus i worked with guy johnson 25 years ago. Alix it is just part of the show. Liz, the fed is going to gillooly say we dont look at oil prices, etc. Is that actually true . Elizabeth chairman powell has said why we care but what they have found is that headline, if it stays high and bleed into Inflation Expectations because if you and i see higher gas prices from oil, they be inflation over all is going to be higher. That is why they care a little bit. It is not like it doesnt matter at all. Guy liz, is it stagflation though . Is stagflation going to be the story . At that point the soft landing becomes harder and harder. Liz in europe, there is already so much stagflation talk, so that is a different ballgame. In the u. S. , 100 plus, it does not help. In this backdrop on the economic side, like alix was laying out, every week shaves off Economic Growth. In washington we have the risk of a Government Shutdown which if that goes on for a while, by october 1 if they dont get together with these spending deals, that could slow growth. That would not be ideal for the fed, these things on the backdrop slowing growth. Headline inflation going up. Im not sure it kills. I think the fed is wanting to pull off the soft landing but it does not help their case. Alix manus, what do you think about oil in terms of what the saudis want . Manus i think as we sat down and you are getting ready to compare, i think our discussion was we have to discover where the new price destruction comes in. It might have been in the depths of the pandemic. Here you are. I think this gives context. Completely unimaginable just a few months ago, striking or hyping distance. Societies need 80 fiscal leave for a comfort zone. For the big megaprojects in saudi arabia, they need 100 a barrel oil. Today, the prince speaks in canada. Itll be interesting to see what his tone is, whether he pushes the market. They took the heat out of the market by extending that through to december seven many ways we already know the shape of the supply constrictions and the deficit construct. Guy the russians are in the mix as well. Liz we talk about what saudi wants but what about the United States . The United States is now a massive oil producer. The dollar is in so many different ways, a petro currency. Does the u. S. Benefit in some shape or form from a Higher Oil Price . Liz absolutely they do. It has changed since decades ago. We wont talk about veterans anymore but yeah, they do benefit but on the flipside, or on we are on this cusp of getting a soft landing. I was looking at gas prices at almost four dollars again as a consumer. Oil prices were rising and that will help Many Companies in the u. S. As well, but they are facing other headwinds too. Even though we are doing ok, people are trading down, so to speak and buying cheaper things. I think it will help but it is like crosscurrents and the u. S. Market has other forces at play that are troubling, driving yields higher and this does not help. Alix you could argue that the administration wants 60 from the demandside but you know what helps when you have fire when you have Higher Oil Prices, ev car sales. When you get higher gasoline prices that you just cant make, youll want to go and buy and ev. Guy but you cant buy and ev because the uaw is on strike. Alix tesla . Guy you can but what do i ultimately mean . You have more restricted supply, you have higher prices for autos which is another challenge on the inflation front. Maybe prices start going back up in a meaningful way. That is what we saw in the pandemic. During the pandemic, oil prices were skyhigh because you couldnt get new or used. We know because you bought a car. You may have gotten a low yield but you paid a high price for the car. That is the scenario we are going to end up with again and that could feed back the inflationary story. Alix i have to wonder, you add on Something Like the Consumer Spending less because of the Student Loan Debt issue and having to pay more, but there are all of these things that we worry about, that we worried about for a year but it does not seem to make a difference. Liz in the stock market. Everyone thought the stock market was going to do bad this year and everyone having to revise their forecast because it keeps going, that recession, the best forecast recession that hasnt happened yet. Maybe a surprise to the upside. Manus one thing i would throw in is that we have not touched on the Petroleum Reserve in the United States which is at the lowest point since the 1980s. They released press release after press release when Jake Sullivan came. Here we are with the Petroleum Reserve. It is at a low point. That instrument that the americas had to bolster the gasoline prices that you talk about rising, it is not destructive but it is much less muscular than it was when they last clashed with one another and they are not clashing to the same extent because geopolitics is now much more important to the americans. There are whole conflicts with geopolitics which reduces and also the spr, not necessarily as muscular as it was. Alix nonexistent. Thanks a lot. Liz mccormick and manus cranny. Good to have you on this side. Coming up, more insight into the question of the day, does 100 a Barrel Oil Mean stagflation . Bruce richards, Marathon Asset Management chairman and ceo joins us next. This is bloomberg. Thanks to avalara, we can calculate sales tax automatically. Avalarahhhhhh what if tax rates change . Ahhhhhh filing sales tax returns . Ahhhhhh business license guidance . Ahhhhhh crossborder sales . Ahhhhhh item classification . Ahhhhhh does it connect with acc. . Ahhhhhh ahhhhhh ahhhhhh you deserve better than that. Im hungry, im in a hurry, i dont have time to make anything healthy. You could if you had a blendjet. Blendjet . Its the portable blender that makes the healthy choice the most convenient choice. I dont know. It seems like a hassle. Hahaha wrong. Just pour in some milk, add some frozen fruit, and bam youve got a nutritious and delicious smoothie. Mmm that is good. Youre welcome, sad office guy. Get yours today at blendjet. Com are we in in an ad . We sure are. I have argued that the era of low inflation and stable growth is gone and we are entering an era of what i call great stagflation and instability. Alix speaking exclusively to bloomberg tv earlier today. That sets us up for the question of the day. Does 100 oil mean stagflation . Does it take the soft landing scenario off the table . First richards, Marathon Asset Management chairman and ceo joins us. What do you think . Bruce short answer, no but there is a yes too. Here is the no. Stagflation is slow Economic Growth with inflation and right now we have very strong Economic Growth. You can see the third quarter, will be reported in the third week of october and it is going to come in and people dont realize this, not 2 gdp, not 1 gdp but 3. 5 to 4 . Here is why. Nominal gdp right now is growing. We saw that in the prior quarters and that will hold through the third quarter. But the gdp deflator is slowing to two. Unlike cpi. If you have 6 real, minus that 2 deflator, you might have 3. 5 to 4 and then what does the fed do when they have november 1, their next meeting obviously they have their next meeting this wednesday when they will say they will hold and do nothing. But late october, what to they do november 1 . That is the 64 question, the big question for me. Here in the United States, growth has accelerated a bit. It feels relatively strong with inflation. The yes part is does this go across the pond to europe and the ecb . They are calculate and for next year, growth coming in at 0. 8 after having raised rates to 4 . There with inflation hi, all approaching 100, 95, and germany, probably a recession right now, the answer is unequivocally stagflation for europe, yes. Guy walk me through the impact. We are all beginning to feel it. The energy story is going to rip through europe in a way that it definitely is not in the United States but i wonder what effect it will have on the United States. What effect does 100 oil have on what is effectively a petro currency economy . You guys produce a lot of oil. 100 is a good or a bad thing . Bruce it is great for the Energy Companies but not so great for the consumers. Consumers have higher wages, it is really good. Relatively full employment with higher wages is great for the consumer. Looking back for the consumer, it is great but here are three things, one of which you hit on, but first, Student Loans for 27 million of the 150 million workers in the United States, 18 of the working population has a student loan they now have to service on october 1 that they havent had to make a payment on in three and a half years. Number two is what you said, inflation is still ella tivoli hi is still relatively high and number three is the simple fact that all of that excess savings is gone, so all of that huge covid stimulus and huge covid savings plan that we had among america has now been eaten away. The consumer looking forward looks to be honorable and we are starting to see that in some of the delay quincy rates going up and some of the credit card balances and borrowing rates going up. Alix this is like a good time for you, what do you like, what are you buying . Is there really an opportunity now . Bruce the biggest opportunity is in the commercial real estate market. Signature bank, fbi is holding at auction. They released this information. 33 billion of loans. Since we are new yorkers, about two thirds of that portfolio is multifamily loans. They are selling it in 13 different parcels. We will be bidding on that. There is lots of product coming out of the banks because i think jamie dimon is right. Dont buy the banks. Not only is it stricter regulations but it is the higher Loan Loss Provisions are going to go through with the higher rates that impact the consumer, businesses and real estate. Number one is real estate and number two is businesses. Two thirds of the b3 rated companies cant service their debt without burning cash. The cash burn is real and the number of downgrades is offsetting upgrades by a ratio of two to one, so we are seeing more defaults coming through this system. Guy lets talk about where we are in this process. If you had a dollar in your pocket, or you had a dollar in your pocket, have you spent half of it, have you spent . 75 . Im wondering, are there opportunities now or are you waiting for better opportunities down the road . Bruce there is a lot of dry patter. Away from marathon, there is about 1 trillion in dry powder on private equity. Hundreds of billions among the private acquitted private credit managers investing capital in the marketplace. We have a lot of our book that we have in the markets now, earning really nice cash flow. It is the highest return weve made in a generation. Fed funds is the highest rate in 22 years. We have not seen the fed raise rates by 500 basis points or more in 40 years. It is the golden era of credit because we are getting paid such a high rate of return for making our investments. Having said that, we always like to have dry powder to be able to deploy capital in the marketplace and we have our fair share. The numbers are in the billions and we are very well poised to deploy that money when there is dislocation in the marketplace. It hasnt happened yet but it is in the process of happening. Alix what do you definitely avoid . Bruce office on 3rd avenue . Top of the list. There is a lot of cre that is going to bust and the more you keep rates higher, the worse it is going to be. There are a lot of Companies Going through some type of structural decline, and there are other companies that came up through this back market or were too early, got funded in the credit markets but they dont really have a earnings and we avoid all of that. What we would like to look for our good operating businesses with good cash flow in place that just have high debt cost service. Companies in the next few years are going to have a real issue because they are going to pay a lot higher labor costs. You see that with hollywood and the uaw and what the pilots negotiated with the airlines. The labor costs are increasing. We love to see labor cost increasing, it is good for america and good for americans. It may not be good for corporate earnings. What is also not good for corporate earnings are these higher funding costs. Apple and microsoft are making more money off of cash and the 5. 5 rate than the 2. 5 rate they pay on the bonds. While the Rich Companies are in really good shape in terms of debt service, it is the thousands of others of Midsize Companies that represent the russell 2000 that are going to be stretched. Guy the big opportunities, the bulk of the opportunities still yet to arrive. Nice to see you, thank you for breaking the traffic for us braving the traffic for us. Bruce richards, Marathon Asset Management chairman and ceo. Details on that next. This is bloomberg. The first time you made a sale online with godaddy was also the first time you heard of a town named dinosaur, colorado. We just got an order from dinosaur, colorado. Start an easy to build, powerful website for free with a partner that always puts you first. Start for free at godaddy. Com [due at target in 5 ] copy that. Make a hard left down the alley. Networks got you covered. [please confirm requesting backup. ] changing route. Go. Roadblock ahead. Back up, back up. Reverse reverse next level moments, were 30 seconds out. Need the next level network. [north corridor, hurry ] coming through or 3, lets go. The network more businesses choose. Transplant received. At t business. Guy time to go to the stats up. Top tech stories from the bay area. We are going to talk about disney, talking about what is happening with the business which is about to change quite significant lee. Caroline hyde has kindly joined us. Disney is about to change in quite a big way. Abc india, these are seismic shifts. Caroline this is an asset shakeup. The signal from bob iger is they want to focus on the streaming, the future of parks and move away from television. This is try to signal that we are looking having an appetite to get into what is disney star but the disney plus offering. It has been the signal since bob iger went out to hong kong back in july and said i am not that happy with the way in which assets in india are performing. I do this is a big one for you, guy, they have not lost all of their cricket assets but they are largely using that key driver of growth. Whether or not they look go of abc and the tv and cable channels and national geographic. There is a lot of reshuffling going on and that was talking about hulu. Alix ive been in this industry for almost 17 years and ive heard the death of linear tv since the day i started. What is the level of confidence the people have on the street that something will get done . Caroline were slightly worried about the signals. What does that mean ultimately about the way in which this has disintegrated . The void, the whole that linear tv becomes . Yes you are right. Ever since i got into it, theyve been calling for the death of linear tv. The fact that bob iger is trying to signal that he wants to get out, i dont think really sounds that great. Alix fair enough. Thanks so much, caroline. Coming up chevron ceo mike wirth joins us in studio for an exclusive interview. This is bloomberg. Discover the Magnolia Home james hardie collection. Available now in siding colors, styles and textures. Curated by joanna gaines. Fabulous surroundings. But everyones looking at their phones for Financial Insights from merrill. Is he hailing a ride to the concert hall . No. Hes making sure his portfolio and retirement plans work in harmony. They want to adopt a child and build a new home. So theyre talking numbers with their merrill adviser. Shes not researching her next role. Shes learning how to handle market ups and downs without the drama. Personalized advice so impressive your money never stops working for you with merrill. A bank of america company. se fue la luz your money never stops working for you with merrill. Pero todavia tenemos wifi para hacer las tareas. ¿y eso es algo bueno . Wifi y estudiar. Buenisimo. Wifi y pedir una pizza online seria buenisimo. Presentamos storm ready wifi. Solo de xfinity. Ahora puedes mantener una conexion confiable durante apagones, con datos celulares ilimitados y bateria de respaldo de hasta 4 horas para mantenerte conectado. Obtenlo solo con xfinity. jennifer r del 10g network. The reason why golo customers have such long term success is because we focus on real foods in the right balance so you get the results you want. When i tell people how easy it was for me to lose weight on golo, they dont believe me. They dont believe i can eat real food and lose this much weight. The release supplement makes losing weight easy. Release sets you up for successful weight loss because it supports your blood sugar levels between meals so you arent hungry or fatigued. After i started taking release, the weight just started falling off. Since starting golo and taking release, ive gone from a size 12 to a 4. Before golo, i was hungry all the time and constantly thinking about food. After taking release, that stopped. With release, i didnt feel that hunger that comes with dieting. Which made the golo plan really easy to stick to. Since starting golo and release, i have dropped seven pant sizes and ive kept it off. Golo is real, our customers are real, and our Success Stories are real. Why not give it a try . Alix we welcome now our audiences. Today we are focused on oil as brent nears 95 a barrel. Know better guest to discuss that with than mike wirth, chevron ceo and chairman. Thank you for joining us. Mike good to be here. Alix 100 oil, is that going to happen . Mike it certainly looks like it. We are moving in that direction. The momentum of supply is tightening, inventories are growing. These things happen gradually. I think the trends would suggest that we are certainly on our way. Guy mike, good morning. What impact do you think 100 a barrel will have on the u. S. Economy . What impact will that have on the Global Economy . Mike certainly those are higher prices than we tend to see out over the longterm. I think it will have some affect on the economy but weve had relatively Higher Oil Prices for most of this year and all of last year. The recession that everyone has been talking about has not arrived and so i think the underlying drivers of the economy in the u. S. And globally remain pretty healthy. I think it is a drag on the economy, but one that thus far i think the economy has been able to tolerate. Alix have you adjusted your price deck . Are these higher prices sustainable for the longer term . Mike we take a very long term view on supply and demand. We have not changed our longterm price. We really dont change that very often, and not in response to we have been in a volatile market going back to the pandemic. This has been a. Of time this has been a period of time that you would not call midcycle. Guy if i worked for you, if i worked for mike wirth and chevron, would this be my cue to say can i have a pay raise . Mike we are certainly seeing i think you are making reference to what is going on the different parts of the world stop we are seeing organized labor in many different injury many different industries, kind of assertively step forward and say we want to be compensated. We see the inflation in the economy and we have seen companies recover. We had a very Strong Program last year. We are trying to stay competitive and i would expect we will continue to do so. Alix that is guys way of getting into the strike action in australia. So far, cargoes have not been impacted. Is that a point where that would change . Mike we certainly hope that we will see is a negotiated agreement. Others in australia have reached an agreement with these unions. We have been at the table in good faith and that is our desired outcome. When we face potential strikes anywhere in the world, we have to prepare to maintain operations. Our products are vital to the Global Economy and the flow of those commodities, where it is important to keep the economy is going, not just in the region in australia but also in europe. That is our responsibility. We prepare to maintain operations even during industrial action and thus far we have been able to successfully do so in australia. Guy im sitting here in europe, i should worry about what is happening here. Is this going to be a problem when we get to the winter . Mike last winter, europe came through better than most thought. Inventories were high going in because rushing because russian gas had been flowing in. We certainly cant count on all of those things happening again, but asked inventories in europe are pretty strong right now, relative to history. I would say europe is set up much better than it was last year. The weather is always difficult to predict, but i feel like europe is about in as good a place as it could be at this point in time. Alix that is one of the weird things about looking at china grove because obviously europe wants china growth but the Energy Sector does not want china growth. What are you noticing in china . Mike it has been gradual and slower than people expected it to be, but it is coming back and i think that is one of the reasons why we have seen crude oil prices tightening. Alix is that inventory restocking . Mike always hard to tell. The data out of china isnt exactly as transparent as it has been. What i think is bubbly probably indicative of the economy is finding some traction and moving forward. We are going to see record oil demand this year, alltime record demand versus the prior year and it will grow in the year ahead. As long as the Global Economy stays relatively healthy, demand for these products steadily marches forward. Guy you mentioned inflation a couple of times already. Are you still seeing inflation . Are you starting to see deflation . What does the cost side of the equation look like . Mike we planned for inflation. What we are experiencing is consistent with how we laid out our budgets for this year. I would not say we are seeing deflation anywhere and a meaningful way. In a meaningful way. We are seeing a reduction in the rate of inflation and it tends to be isolated to certain parts of our supply chain, certain geographies more than something you described as widespread. I think wage pressure is pretty broadly distributed. Other things in our supply chains tend to be focused in areas where there is a lot of activity like west texas. Alix to that point, can you increase productivity enough to offset those costs win a lot of your spending in the next 10 years will be in u. S. Shale . Mike that is the big question that we are we are putting plans together Going Forward and thus far that has been the case. Productivity and a time we saw lower inflation was marching forward much faster than the cost which is why we saw the cost of production coming down. Those are coming into more of a balance today and i think the forward view question is can you continue to move up that productivity ramp and offset inflation or not . It is early to say. One thing that is not often talked about is we are seeing a lot of productivity gains on drilling and completions. We are still only recovering about 10 of the molecules in place. If we can improve recoveries, that changes the entire economic equation in a very profound way. It is another leg of that equation which is not necessarily productivity on the activity but it is on the recovery equation. Alix is that three plus mile laterals . Is it going to be different types of and hence oil recovery . What is the magic sauce for this . Mike we are working on a lot of things. Alix you are not going to tell me. Mike we are working on Different Technology to create different geometries so you can get more flow. Alix does that all cost more money to do . Mike it does. That is why we are looking at chemicals that can enhance recovery, enhance the interaction down at the molecular level. All of these things, you have to pilot them in the lab and in the field. You have to understand if you can scale them up. That has been the history of our industry. The technology tends to solve these things. We have a lot of smart people in this company and in this industry. Guy i said to alix this morning that she wasnt allowed to use any technical jargon. I think you guys skirted around it in that part of the conversation. Alix we were fine. Guy you get a pass on that one. Do you have lots of smart lawyers . One of the things that we were kicking around before we spoke to you this morning was what is happening with this california case and the fact that increasingly, it looks like Climate Change is going to be litigated. Is litigation the right way of dealing with this . Mike in a word, no. This is one of many such actions that we have seen over the years. Ironically, a number of them filed on behalf of people who have profited from and encouraged energy development. Climate change is a global issue. It calls for a coordinated Global Policy response, not piecemeal litigation that benefits attorneys and politicians. We do have smart lawyers. We will deal with the lawsuits. More importantly, we are working on finding ways to meet todays Energy Demand that has less Carbon Intensity and still is affordable and reliable, even as we are investing in new technologies like renewable fuel and hydrogen and Carbon Capture, to build a new Energy System over time that is inherently lower carbon. That is a constructive approach and that is where we are engaged. Alix so to this point, you guys are going to become majority owner in what could be the Worlds Largest Hydrogen Production storage facility. There is that. You have a huge Carbon Capture facility in australia. These things are huge and they are expensive and some have been around for a while. How do you know how much capex to realistically allocate before you think this is too big and it is a money suck . Mike it is a lot of judgment. You have to really select the many opportunities out there. Alix Like Hydrogen for example. Mike there are a lot of places you can invest in hydrogen, Blue Hydrogen and green hydrogen. There are Different Technology pathways. We have an entire organization that spends all of its time working on the technical and commercial, the practical engineering realities of these things and looks to find the best places to start. Certainly in the u. S. , we have seen some policy through the ira which creates incentives. Those arent intended to last forever but they can help prime the pump as we bring the Technology Cost down. There is a project in utah that is very economic today. We will take surplus Renewable Power that comes from early from wind in the western u. S. And when its more than the grid needs, which happens during certain times of the day, we can use that to convert water into hydrogen. We store the hydrogen in underground caverns and other times of the day when you want to bring that power back, we can bring the hydrogen out of the caverns can be put into a gasfired power plant along with natural gas and produce lower carbon electricity. It is technically feasible, the economics give us a return on our investment and it is a platform from which we can grow. Alix so great to see you, mike. We have to leave it there. Mike wirth, chevron chairman and ceo. Thank you so much. We are about an hour into the trading session. Abigail is tracking everything. Abigail a quiet monday, stocks down slightly fluctuating all around the map, small moves and on below average volume. The bloomberg dollar index is doing the same thing after their big gain recently. You can see yields not doing all that much. We do have the vix up a little bit. The fact that you have the s p 500 down, it suggests more volatility is ahead. Lets take a look at one asset class that is moving and that is oil. Over the last three days, this is the three chart the threeday chart. The question of the day begs whether or not we do get to 100, lets look at the technicals. When i charted it out, it is not quite as clear. I say that because you can see this year over last year, there is this perfect descending trend channel which we are hitting on right now. This bluish area tells you the buyers are very strong. They want to take oil to 103 or somewhere in there. We could actually see oil move back down into that range. It would be surprising but that chart but this chart mix the possibility that we might not even see oil hit 100 in the near term. Guy that kind of undermines our question of the day but thats fine. Alix we will go with it. Guy you never know. Next, the uaw, the strike entering its fourth day. What is going to break the strike . We will find out next. This is bloomberg. Alix this is bloomberg markets. Coming up, rio tinto s ceo joins us at 2 30 p. M. New york time. This is bloomberg. It is day four of the uaw strike stop United Auto Workers and u. S. Automakers appear to be far apart from reaching a deal. David welch joins us. The uaw says no, what is next . David 22 . We will see. I thought this deal would get done somewhere around 20 . There are other demands on the table. 32 hour workweek which i dont think they will get. Retiree benefits, a pension. I dont think they will get those but they do want costofliving allowance which kind of adds to their rays and gives them inflation protection. I think the companies are going to need to improve the formula. They have already decided they call cola again. It is just how you calculate it. There are other issues. Gm is the only one so far that is guaranteed employment throughout the life of this contract. I think ford is bubbly there too. Is probably there too, they are going to need job security, guarantees as well. The big question will be what to they do for the retirees . I think that determines whether this is a long strike or just another week or so. Guy there does seem to be the sense that this is going to get done, dont worry, a deal will get sorted out. Is there a danger that the companies and the Financial Markets are underestimating just how angry the unions really are . David i think everyone already has. When the union does something, when they refuse an offer, you dont see the shares get hit by much because the market was already there. I do think the companies themselves also may they didnt know sean fain, the new uaw resident, very well. All of this has been done in a very different way. I think that has caught them by surprise. The market doesnt know how to read it. This could go on for a while. One thing i will say, over the weekend, we did see union saying there was progress made at ford and they said they had a decent meeting with gm yesterday and they were going to reconvene with ford today. Those were more positive things than we heard. Usually sean fain would go on Facebook Live and say how terrible the offers were and how they werent respecting the work that the members do. Maybe in asked maybe an absence of negativity tells us there may be a pivot in progress. Guy we will watch this space very carefully. Thank you david welch. Ola kaellenius is the mercedesbenz ceo. We will be speaking to him in the next hour. Coming up in this hour, we are going to gauge investor appetite. That is in todays wall street beat. Chanel is coming next. This is bloomberg. That first time you take a step back. I made that. With your very own online store. I sold that. And you can manage it all in one place. I built this. And it was easy, with a partner that puts you first. Godaddy. Alix time for wall street beat. We take a look at what is buzzing in the world of banking and finance around the world. Taking a look at instacarts upcoming ipo. Joining us now is sonali basak. If i am a banker, am i nervous . Sonali it is the first thing i did before i got on the set, seeing how far down it is going. You have arm trading at seven dollars a share. I think the name of the game for bankers in town as well is the companies is this idea that ipos will not be high flyers. They will have to be smooth sailors. They have to make it into market smoothly. We know at the top end of the range, it could be worth more than 9 billion in market value. There is an interesting footnote, this idea that cornerstone investors could take up to 60 of the shares. You have some embedded demand, but getting this onto markets smoothly, after already upsizing here or increasing the price range for both instacart and clay via ill be an interesting thing before fed day when both of these things are supposed to start trading ahead of. Guy sonali, it has taken a long time to get instacart to market. Is this as good as it gets . Sonali great question. You have arm, instacart, flavio all in a row. Also showing profitability. There is a very small window to go public this year. When we speak to bankers across wall street, they say the pipeline is building in the next year, and you have a lot of company saying they want to frontload and go public in the First Quarter of next year. Remember, the election is next year, a lot of potentially volatile events for the market. It does give a sense of ok, maybe you will not get the 15 billion valuation that instacart had last year, but a 10 billion valuation, more realistic as well as a lot of retail interests. Member how many Retail Investors were pouring into arm stock immediately. Remember sophia is one of the underwriters sofi is one of the underwriters. Bringing more people into the stock tends to be good for marketing, it gives you stock as currency. These Companies Want to go public especially because the m a route has dried up. Alix i guess im having a hard time understanding the Value Proposition for instacart. When you have Grocery Stores able to build out their own infrastructure if they want, the margins are so superthin anyway. I wonder what you talk to bankers about. Sonali the margin part is a fascinating one because on the one hand you have instacart and Flavio Flavio and flavio is a clear ai story. Instacart is trying to show they can do more with their technology and data and win on that, hence pepsi being an investor into the ipo, helping give some idea that their own clients buy that story that they can keep on and expand that share. Your point isnt very well taken, that margin pressure and the fact that there are others that do this is a big question mark when it comes to instacart. The new ceo has been able to improve returns but can she sustain that . That is the post ipo story. Guy that is amazing, that process. We all we often think about it being a oneday event. Sonali, thank you very much. Lets talk about the european markets. This week is a bit of a slow burn. We really get going, the Central Banks litter on this week as data begins to kick in. A little bit of price action to begin the week and a little softness in the european markets. Every sector is in negative territory today. Some of the consumer names are the weakest, some of the luxury names are softening up. The market broadly down 1. 22 . I think we are waiting and watching what is going to happen. We have the fed coming up and a lot of data to digest. The main event, dare i say it . It is what is happening with brent crude. We are up by 9 10 of 1 . We are kinda flirting with 95. Are we going to 100 . That is the question. What impact will that have . We will come back to that question of the day in just a moment. Were going to talk about what is happening in the car sector. European luxury names. What happens in china and the unit states . Ola kaellenius is the mercedesbenz ceo and he is going to join us in the next hour. This is bloomberg. Endless hardie® siding colors. Textures and styles. Its possible. With james hardie™. Nice footwork. Man, youre lucky, watching live sports never used to be this easy. Now you can stream all your games like its nothing. Yes [ cheers ] yeah woho running up and down that field looks tough. Its a pitch. Get way more into what youre into when you stream on the xfinity 10g network. se fue la luz pero todavia tenemos wifi para hacer las tareas. ¿y eso es algo bueno . Wifi y estudiar. Buenisimo. Wifi y pedir una pizza online seria buenisimo. Presentamos storm ready wifi. Solo de xfinity. Ahora puedes mantener una conexion confiable durante apagones, con datos celulares ilimitados y bateria de respaldo de hasta 4 horas para mantenerte conectado. Obtenlo solo con xfinity. El hogar del 10g network. Enterate mas hoy. Guy nevertheless, the market is suddenly willing like it is starting on the equity front a little cautious feeling