Bloomberg Markets Full Show(11/29/2021)

Bloomberg Markets Full Show(11/29/2021)

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From the financial centers of the world. This is Bloomberg Markets with Alix Steel and Guy Johnson. Drugs to the rescue Pfizer starts work on a vaccine for Micron. And Madonna promises one early next year. Both stocks popping this morning. Markets calm down but restrictions do not. Equity is clawing back some part of the losses from red Friday. Bond yields soared. Travel stocks though lagged behind as curbs fall into place. And one hundred and fifty dollars oil. That's coming up. Prices rebound while OPEC's delays its meeting. We're going to talk to the analysts behind that 150 calling in oil for

twenty twenty three spare capacity shrinks. Christian Malik of J.P. Morgan will be joining us from New York. I'm Alix Steel my co-host in London. And Guy Johnson welcome to Bloomberg Markets guy. I was out of pocket for two days knee deep in baking. I see the price action. I see the headlines on Friday. And my first instinct is that who was trading that day. Thin liquidity. Let's

wait for the expected bounce. Monday morning. You know actually volumes were okay Friday so I think a lot of people in this new world are being able to work from home did actually step in. I admit it was a shortened week shortened session. And as a result of which we may have seen some people not there but nevertheless certainly here in Europe it was a volume. It was a high volume session. Look is it is it a bounce back. A dead cat bounce. Call it what you will. I don't know

yet. Alex I think until we know the details around what this new variant is going to do to us then I think that that answer is pending. Yeah. Or did it just take some froth out of the market which we're kind of expecting and kind of waiting for that to happen towards the end of the year anyway. I think that's a perfectly legitimate way of looking at it. You've seen voters pick up in foreign exchange you see Vols pick up in fixed income. Now we see it in equity and we now see it in credit. So maybe that was going to happen at some point. So yeah I think it was inevitable that we were going to have some some bumps along the way. We were already and I think we should bear this in mind. We were already starting to see significant

pickups in Delta happening where you are now. It's certainly happening where I am. So that was always going to be a cause for concern. That was likely to be a bump that was going to be major that was going to offset these equity markets. I don't know what it was going to be. Turns out it was a new variable. Yep. And also we were already seeing markets in some respects rollover a touch. Right. Ball was already picking up. Oil was also rolling over just a little bit. There were already some cracks within all of this which is worth pointing out as well. Which begs the question how much can we actually come back from Friday. Yeah. Though I just listening to some of the commentators that I've been on air throughout the morning they're still pointing to the fact that we're going to see a Santa Claus rally that we're going to have a run into into Christmas. Certainly in D.M.

markets housing data is just starting to hit the tape. Looks a little better than expected on a month or month basis. So this is pending home sales data out of the United States. The month on month number coming in at seven point five. The survey number just one percent. So a seven point five percent pick up. The prior number was negative 20 through a negative two point three.

That's been revised a little further lower the year on year non seasonally adjusted number negative four point seven though the prior number negative seven point two. So some signs of stability and maybe even a pickup Alex in the housing market. Yeah. Interesting stuff there too. All right. Let's go back to the crime here. And the doctor who alerted government scientists to the possibility of a new Covid Shery Ahn said people infected with Tom Keene are showing milder symptoms than those who still called Delta. Governments though across the world are still stepping up those travel restrictions. I decided we're going to be cautious make sure there is no travel to and from South Africa. Covid. There is no scientific justification whatsoever for keeping these restrictions in place. You know this school but I'm aware that the restrictions are stricter compared to other countries. But we must be as cautious as possible about an unknown risk. It

does appear that only spreads very rapidly and can be spread between people who are double vaccinated is concerned. It moved from being a very active investigation to a variant of concern within the space of 24 hours. We call upon these countries that have imposed travel bans on our country and our other southern an African sister countries to immediately and urgently reverse their decisions. And some breaking news in relation to this. The U.K. is now urging boosters for all adults. A second shot for those ages 12 to 15. U.K. urging boosters for all adults no longer pays for a guy to be old. All right. Joining us now Sanford Kelly of Bloomberg Intelligence. Hey Sam. The market reaction Friday Swift. The reaction by politicians Swift. Should it have been. Hi Alex. Yes I think so. You know I know that it's not nice for

South Africa and some of the other African nations to have flights and travel ban domains very very difficult. But then I'm also hearing that South Africa is saying that people shouldn't travel between provinces. So I don't know how why travel within the country is is not a good idea. But Préval travel outside the country is OK. So I think that that you just want to slow it down until you know more about it frankly. And and you know I'm directly affected by it. So you know it's something that we have to wait and see. So at the moment the financial markets are flying blind. We had a knee jerk reaction Friday. We're trying to calculate what our reaction is today this Monday. Can you just walk me through the

timeline of how we're going to learn more about this. What are the key milestones that we need to get to. Yes. So I would say that what we need to see is in the next couple of weeks hopefully news coming out of the various companies as to whether the third shot of the current vaccines that they've got induces an immune response that can neutralize the crop. Remember they already showed that to us for Delta and Beta. That's number one. Number two if that's not the case they've got vaccines against beta. Does that help. Because only cause a bit closer to beta than it is to other variants. So that's the sort of information I'm looking for. Which I think is the first will get in the next few weeks. And then of course the how how much transmissibility. We've heard a lot of talk so far Sam about mild symptoms in

order to sort of show that maybe this isn't a Delta type scenario. The mild symptoms automatically mean less hospitalizations and less deaths. To be honest with you Alex I don't put any stock in the comment at all at the minute. This is one country with relatively low number of cases with a much younger population than other countries. Different comorbidities and different levels of background is infection. You just can't make a decision on how bad this virus is until you've seen it more broadly infecting people for longer. So I'm afraid I don't buy that yet but I wish

it to be true. That would be nice. Yeah I think there's some upside scenarios here. But at the moment obviously the the muscle memory teaches us to be a little bit cautious in Brasilia. Bloomberg Intelligence thank you very much indeed. He'd just been looking at pictures of Professor Van Tam here in the UK briefing on

where we are in terms of the UK ISE response. The UK does seem at this point in time to be accelerating the vaccine program trying to reach as many people as possible as Alex was saying urging boosters for all adults second shots for 12 to 15 year olds. There's a kind of gap between 12 and 15 at the moment where you get one shots. You also don't get NHS access to prove you've had that shot. Two shots may end up changing that being to see whether they change the reporting standards around that second shot. We can have an ongoing response here at Bloomberg to what is happening here. Got a special coming up later on this afternoon on the other variance and the impact these variants are having. It's going to happen at four thirty PM in New York.

That's nine thirty p.m. here in London. Let's talk about the market reaction. Christine Lawrence Rabobank senior cross asset strategist joining us now. Christine fairly straightforward first question. We sort of see a massive rout Friday in credit and in equity. We're seeing a timid bounce back today. What do you make of the price action. Well I think the toy section makes sense given the circumstances but unfortunately some was quite right. We just don't know how

the Vonnie Quinn variance is going to evolve and we really just don't know what sort of impact this is going to have on markets going forward and indeed on economies going forward. So it adds uncertainty to what was already a blurry outlook. That being said we have of course see that by and by the dip mentality coming in already December is usually a very strong month. The US equities we know corporate buybacks are accelerating into year end. So outside of the record there were reasons to be bullish equities moving to year end. But this does provide that layer of uncertainty for sure. So does that mean by the dip but with a lot of extra hedges. I think so in terms of high conviction use it's difficult to

have them right across markets at the moment. What I do have is that I certainly think the US dollar is going to head higher. I certainly think we're going to see higher volatility in interest rate markets. And when it comes to equity markets the mega tech companies have done a very good job of holding those headlines. The action has has and will continue to be below the surface. The rotations into an ounce of value. I tend to think that at this stage until we do get more information on record a slightly cautious approach is warranted. That being said within the value space unlike financials unlike selective energy I'd be careful of troubled stocks at the moment. Yeah I think you're probably not alone in that.

Christian talking of the cautious response. Do you think we get a cautious response from central banks as a result of this. What I'm trying to work out at the moment is what impact this will have on Fed policy Bank of England policy ECB policy. There is a danger that if it turns out to be a a difficult variable to deal with that we end up seeing an impact on the labour market as we see lockdowns or lockdown lights being reimposed. But if that's the case then we're likely to see also higher inflation. Which way do you think the Fed and other central banks will. How will they deal with that. Well I think central banks in most developed countries already stuck between a rock and a hard place. And that counts for the Fed as well. We've seen massive repricing of the funds and I think we continue to see that as we get to grips with the the

strength of this recovery. And the labor market is a key part of that. There's a lot of focus on the unemployment rate but of course the participation rate has fallen a lot as well. And that hasn't surged frankly. And we don't know how many people have left the workforce for good and how many will be forced to return to the workforce early next year. I tend to be of the view that wage growth we've seen this year has been more about distortions and then it's less likely to continue as we move into next year particularly as we see some more Americans forced back into the light force. But when it comes to the Fed I tend

to think they're going to be pretty cautious. I don't even buy the idea that unnecessarily raise rates twice next year. I think we may well only get one rate hike next year and that's when the tapering process will. I tend to think that they're going to stick with the pace that they've already outlined rather than stepping out at the December 15th meeting. Yeah. And Goldman

though before I'm in Crown came out. Increase their forecast for rate hikes 3 3. Starting in June for 2022. So Christine what was really interesting is that before all of this. The idea that we were going to get a rotation into value cyclicals and small caps was kind of permeating in the market. Whether it was coming true is a different story. Does that push this out altogether. And then you have to go by the safety and the growth of the big tech. Or can you start to play with that

rotation. Well I certainly like it so companies at the moment they have been a stronghold and I think that continue to be. When we talk about value I think it's more about being selective investors that can be agile in this environment. They're the ones that are going to be outperform. And it is back to that old fashioned environment of stock picking to an extent as well. I think you're going to weather this storm. But of course it's bad. Actions will remain key if they do step up the pace of a print. And I think that will take the wind out of a lot of the growth stocks. But as I said that's not really my base case. I think the one thing the central banks are going to want to avoid is a

policy mistake. You look at the ECB back in 2011 they've never been able to raise rates since. And the last thing the Fed wants to do is raise rates and then be forced to unwind that. So I think the middle of next year even that is too early to to really start to put the pressure on on rates and central banks and the Fed in particular. A question we really appreciate. Thanks so much for joining us. Kristin Laurens Rabobank senior cross asset strategist. Thank you so very much. All right. Coming up here to stay with this story how the latest Covid variance going to wreak havoc on air travel. We saw those stocks

get hit really hard on Friday. They're shaking out some of those losses in the turbulence today but still the outlook not so great. This is Bloomberg. Elmo variant weighing on those travel stocks airlines trying to bounce back today but they took a pretty big beating on Friday. Bloomberg said Ludlow has more. We were talking about the rotation with value and small. Can you talk about the reopening and the travel stocks. Yeah 40 minutes into U.S. session is actually a mixed picture right. Some softness in the United and American Airlines strength and actually other stocks like cruise ships carnival up half a percentage point. And then you're looking as well at Expedia which is one of the hardest hit

Friday. Compare that with the European session. And we did actually see a sustained rebound throughout Monday's session. So far the question being where do we really go from here. Right. Morgan Stanley out with a note saying that this is a sector that is so vulnerable to vault volatility because the new cycle. What do we actually know about this variant Monday morning. More than what we knew on Friday. And that's the point that Morgan Stanley makes. That is news comes out. Expect these types of stocks to

move if you bring out the stocks 600 index travel and leisure subsector. You also make the point that even though we've seen a rebound Monday particularly in Europe over two sections we're still in high single digit declines. And there's an idea of whether this is priced in or not. You got Citigroup talking about the U.K. in particular whose measure has been to reintroduce PCR testing and mandatory self isolation until you return a negative tech test. They look at the market they look at the industry and say yep continental Europe is going to follow suit. That is a headwind to demand going into the

Christmas period demand that was waning already. I just want to talk about Asia really quickly. We got a rebound in Europe but if you look at the B gauge of airline stocks in Europe the yellow line we fell for a second consecutive day. And if you look at some of the measures that are being enacted in Japan in Singapore in the Philippines they moved very quick and very severely. And it's Asian airlines have outperformed this. Yes. Relative to the white and blue lines which of course are Europe and the United States. So we don't know much about the variant but there are different reactions with different pace in different regions. Hard to keep up. Yeah. Hard to keep up and hard to make booking plans at banks like Bloomberg and the Low

joining out there. Guy I'm assuming you had to change some vacation plans. As ever. But that's just the new normal isn't it. You book something then you have to change it. The airlines generally are getting better assets. But if you want to book ski lessons or if you want to book transfers all this kind of stuff that's money

you're basically putting at risk. People are becoming much more cautious. And Alex we think we did learn something over the last 72 hours and that is that governments are on a hair trigger ready to pull new sanctions new travel restrictions new problems for travelers. Forward very very quickly. And I think that's what the travel sector is responding to here. It's less about as Ed was saying this stuff we don't know. What we do know is the governments are responding pretty quickly to it said Philip. Joining us and the Bloomberg travel team said that's the issue here isn't it. It's not the kind of the fact we don't know anything. The fact that we don't know we haven't we've got a very we don't know much about. It's that governments have just responded straight away. Absolutely. So the governments have actually been acting really really quickly. And that's a problem

for the airline industry because it dampens confidence for bookings and especially as we're getting into the busy winter season where people are getting ready to travel. That's the busiest season off outside of summer. And so the airline industry was really hoping for some sort of turnaround this winter. And that looks like it might be hard won because while we don't know much about the various governments are reacting really quickly. And obviously that means consumer sentiment is pretty weak. Well also said I have to imagine that this is going to push back any kind of business travel as we know it.

Absolutely. I mean business travel obviously depends on the ease of getting in and getting out. And as countries put up quarantine measures and PCR testing and other sort of barriers to entry companies might actually be less inclined to send people on business trips. And that could see business trips falling and especially as you get into the busy conference season which is typically in winter. That actually might see a big fall. Yeah. Ironically there's a big travel conference happening in London this week that you and I will be spending some time out there having to come up with new plans. Really quickly. Absolutely. I mean organizers scrambling to arrange for testing for overseas delegates as well as isolation beds because it caves now mandated day to test for everybody. And that includes PCR tests rather than antigen test. So it is much

harder regardless of vaccination status. And obviously as Ed mentioned when the U.K. does something the risk is that other countries might follow that example. He said before we let you go which is the worst airline off right now. At the moment it really looks like a pretty bad news across the board. So I think the long haul carriers will be harder hit

because they tend to be impacted by government rules and restrictions. So the shorter haul carriers are the ones that are sort of easier and have it easier rather than the long haul ones. All right Ted thanks a lot. Guy I told you you should've come earlier said Phillip. Joining us from Goma. Now he's never gonna get to me like you're bad to have my croissants and beer. All right. Coming up on Twitter CEO Jack Dorsey will be stepping down trading. The stock is halted right now. I'll break it down

even more. This is Bloomberg. England reporting two further cases of McCrum within the last couple of minutes I'll keep you updated with that live from London. I'm Guy Johnson Alix Steel in New York. This is Bloomberg Markets one of the other big pieces of news today. Twitter CEO Jack Dorsey stepping down. This according to a Bloomberg source trading on the shares in the shares halted. But Bloomberg's Dave Wilson is looking at the impact that this could all have. We certainly saw the impact once the reports

started coming out about what Dorsey's future will be. Shares Twitter were up as much as eleven percent in early trading. Before that hall which occurred about 20 minutes into the trading day here in the U.S. still going on. No announcement yet from Twitter. Nonetheless though you got to remember that Jack Dorsey has run through Twitter as well as the financial payments company Square since 2015.

And over that Time Square has been a much stronger performer. I mean Twitter hasn't even been able to keep up with its peers among the fang stocks or read the expanded NYSE thank plus index. You know that's where you find the likes of Facebook. Now metal platforms and Google's own or alphabet soup some direct competition there. You know beyond that I mean you talk about competition. Look at Twitter versus Square over the last few years. You know square the much faster growing company in terms

of revenue and what's expected to add to more than double this year. The Twitter you know they're looking for a 37 percent increase which is not shabby but nothing like you're seeing out of square at this point. And you know Twitter has certainly had its challenges in terms of user growth over time as well. You know last year adding something like 40 million users this year

not even half that of course say they've had the issue with having to remove former President Donald Trump from the platform after the January 6 riots in the capital. Know so those kinds of issues aren't going away. Things like misinformation and bullying and all the concerns that show up with social media companies affecting Twitter as well. Hey David to the point how does Twitter fare during Covid particularly in light of what you were just talking about especially related to its peers social media. Well it just hasn't been able to keep up. I mean it's not as one sided as say Twitter versus Square has been over time but

it's certainly there. I mean you look at Google's own or alphabet you look at Pinterest those shares are more than doubled in the last two years. Twitter hasn't been able to manage that. And heck snaps owner Snapchat has more than you know the owner. Snapchat has more than tripled over that time. Jagow Yeah good point. All right. Dave thanks. A I really appreciate Bloomberg Steve Wilson joining us there. Coming up more on Micron Invariant here.

New York City Mayor Bill de Blasio is speaking right now. Lawrence Gostin Dawson professor of global health law will be joining us next. The latest is the New York City health chief is advising wearing masks in all indoor locations. Those restrictions are common. This is Bloomberg. Is to get vaccinated and encouraging people. Obviously in light of all the information we have the quicker. Live from New York I'm Alix Steel Guy Johnson in London. This is Bloomberg Markets. We are one hour in a training session right here in the US. What makes Abigail Doolittle is here with some of the movers and the market. So yes of course this is sort of a

move higher after Friday's carnage. But I wonder how long it lasts here. It'll be interesting to see that Alex because there wasn't a big carnage or a big sell off on Friday on big volume 2. So is today just a bounceback or is it the start of something real to the upside. We'll see. But right here are some of the top movers on the day the darkness. Speaking of the new variant Omicron up seven point six percent saying that they'll have a new vaccine ready in 2022. So not so far out. Tesla up about 4 percent. No new news on the tape but folks want in on this buy the dip day on one of the bigger

moving momentum stocks. And then Twitter of course halted earlier up as much as 11 percent on the news that CEO Jack Dorsey is stepping down. Of course he's also the CEO of Square and focusing on cryptocurrency is now from our broader standpoint. Take a look at what's happening. We're going to see right there the S&P 500 up about nine tenths of one percent. Its best day in almost in about six weeks or so. The stock 600 up nicely up one point one percent. Brent crude a big bounce back here. This is a big story and also a big bounce back for a yield. So on the

fearful day that risk off day on Friday crude oil down I think 12 percent the worst day since March of 20 20. That was a great degree of selling the fear of what the new variant could mean for the economy. Bonds had been in a big rally. But today a reversal. And in fact it's very interesting cause we're at a critical point here for crude oil. If we go into the Bloomberg terminal quickly we are going to see that in 2020. Crude oil clearly plunged right below the support the long term support of

the 200 day moving average flirted with it at one point later in the year. This is the first move back below that 200 day moving average since that time period. It's going to be interesting to see Guy whether or not these long term buyers of crude oil and other risk assets step up or again if this is some sort of head fake.

To bring it back to Alex's first question we just don't know right now. But today it does feel a bit more risk on than it did last Friday. We'll see exactly. Open house to say a little bit later on this week we'll certainly cover that extensively. Breaking news over the last few minutes. Let me just run you through it. The U.K. has two cases two more cases of macron. That's piece number one. The second piece is we're getting a statement out from the G7 health ministers. They're basically saying the macron requires urgent action. Whatever that means they're going to meet again

fairly shortly. And then Alex in terms of what we're seeing on your part of in your part of the world. So we have a daycare man vaccine mandates now that's going to come in. That is going to be something that I think is gonna be problematic. And we are seeing an increased advisory relating to mask wearing as you point out. Surprising that people are wearing masks but it just anecdotally a lot of people aren't. Lawrence Gostin Georgetown University professor of Global

Health. Joining us now to give us his take on all of this. Professor thus far do you think the response from governments is about rights or too much or too little. Well you know it's really almost nondescript. I mean the government's kind of flopping all over the place. But what they really should be doing is vaccinating their own populations including with boosters and they should also be really ramping up vaccination of the world.

That's really the only way we can prepare for this if it is infectious as we worry that it might be. Most people are going to get it. And when you get it we want you to be nicely vaccinated. And if you are I don't think we're going to have a big problem if you're not. We could have huge hospitalization searches. So Professor do you think that mandates are a good thing. I just had to pivot off of a guy. And on New York City mandating that child care workers get vaccinated by December 20th. I can see a scenario where then all of a sudden you lose child care workers and parents can't go

into work. I mean work. Yeah. I heard you Alex ISE say oh what's going to happen if we if we end up with with child care mandates. I actually do support them because if you send your child to daycare you want your child to be safe. And asking a daycare worker to be vaccinated is absolutely a reasonable thing to do. Will keep our kids safe. It'll keep the co workers safe. And it's just a smart commonsense thing that will really buttress our children against any future variance.

Just insults the Thai labor working with hair professor. In terms of understanding the clinical manifestation the new very high brings. When do you think we're going to start getting a true understanding. Because at the moment we're flying blind. Yeah. We are flying blind right now. You know we're kind of lurching from complacency because we thought we had this under control in Europe and the United States although Europe has had a spike. So we were seeing the end of the tunnel. But now we've lurched from complacency to panic.

Neither of those extremes are a good way to go. There isn't going to be a magic day when we say oh we really no understand this. But I think within two or three weeks we're going to start to understand the characteristics of this variant. And what we expect is is that yes it'll probably be quite transmissible. And if it's even a fear virus then the

Delta variant that's going to be worrying because remember Delta is extraordinarily infectious nearly as infectious as chicken pox. If if this new variant McCrum is is more infectious than that then we had a lot of reason to worry because a lot more people are going to get infected. Yeah but at this point we don't have any evidence that it's going to cause more serious disease more hospitalizations. And although probably from our experience with Delta that the vaccine effectiveness is going to be a little bit less than it would otherwise be. Vaccines will still be robust. And I do think that if needed particularly with

the messenger RNA vaccines we are going to get our seed. Professor let me ask you this. You talked about booster shots and vaccinations. We in developed markets can talk about boosters but in emerging markets we're not even remotely at that stage yet. It feels like the path forward is we have to vaccinate emerging economies. Is that what is the best way to do that. You know I'm so glad you raised that Alex because that's been lost in the conversation. If he's learned anything from this new variant we've learned that as long as source code to remains

unchecked in a largely unvaccinated population in low and middle income countries particularly in sub-Saharan Africa that we're going to get more and more variance in what is what is the best way. Every country in the world right now should ramp up its donations in a massive and coordinated way. And we should transfer technology to the South African hubs and Indian hubs and others that can make their own vaccines. So we've got a professional fund of where to stand. That

final quick question for me. Increasingly it looks like many of these new variants with huge numbers of mutations are coming from a common immunocompromised patients possibly HIV patients in Africa if they don't respond well to vaccines. And as a result of which we find ourselves in a situation where they are largely unprotected it provides the opportunity for the virus to mutate in a significant way. How do we solve that problem. You know that's a really hard problem. I mean I think the the end.

We've got an interconnected epidemic of HIV and Covid-19. And yes one of the prevailing series is is that the crime might have just developed inside me and compromised patient. The best way to do that is to get anti retroviral medications quickly and sustainably. In sub-Saharan Africa and other places where HIV is prevalent.

All right Lauren thanks a lot. We really appreciate your time today. Lawrence Gostin a Georgetown University professor of global health law. Thank you very much. Well coming up this no doubt dominated the conversation in D.C. but there's still also a lot more on depth. There you got the debt ceiling. You have money markets getting in gear for a key week as well. The budget needs to be increased by Friday. And then of course you have the infrastructure bill having a tray of veto. Partners joins us now. This is no. This is Bloomberg Markets Summers could get turned you're looking at a live shot. The principal room coming up. Stefan von

Tell the madness. Yeah that's it. And says AM in New York. Kathleen Hays p.m. in London this is Glenn Beck. Let's check in on the Bloomberg Businessweek news what these could get to President Biden meets today with CEOs of companies from a variety of sectors. He'll discuss supply chain bottlenecks on the administration's efforts to combat inflation. Chief executives from Best Buy Mattel Kroger and Samsung are amongst those expected to attend in person. This is a Wal-Mart and CBS will attend to virtually any final jury selection in opening arguments set for today in the trial of Glenn Maxwell. The pushy socialite is accused of grilling underage girls for sex with the late financier Jeffrey EPSTEIN. She faces as much

as 40 years in prison. The next flashpoint between Canada's prime minister Justin Trudeau and the U.S. may be auto content rules. Canada is leaning towards forming a common front with Mexico in a fight with the US over the origin of auto parts. The rules are part of the overhaul. North American Free Trade Agreement Canada and Mexico lean more regionally. Pretty thoughts qualify for duty free shipping that the US is allowing global news 24 hours a day on air and on Bloomberg Quicktake powered by more than twenty seven hundred journalists and analysts in more than 120 countries and which could get to. This is Glenn Beck. All right. Thanks so much for joining us for some breaking news for you. Jack Dorsey as we reported stepping down

as CEO on Twitter. The new CEO will now be Parag Agarwal. He is currently the chief technology officer. He's been that since 2017. He's been on Twitter for more than a decade. He will succeed now. Jack Dorsey so prog. I all will be CEO and also join his member of a board of the board effective immediately. There is also a Twitter announcing an independent board chair Brett Taylor. And so Brad Taylor joining the board as well as independent

chair there. So lots of news with Twitter stock now moving. Stock still halted before the news. It was up just about 3 percent. So giving up some of its gains from earlier in the session will bring the price action when it starts trading again. All right. In the meantime let's go to D.C. because Congress is finally back in session and they face a lot of deadlines here. First among them is avoiding a federal government shutdown on Friday. The current funding is going to expire then. We're joined now by Bloomberg's governments Emily Wilkins. Emily that's just the first thing that they have to do in the next few weeks. It is going to be an incredibly busy month for Congress. They've got that shutdown deadline on

December 3rd then moving a couple of weeks to December 15th. They have the debt limit that's going to need to be raised. We're still seeing a standoff between Republicans and Democrats over that. Republicans saying that they will not help Democrats lift the debt ceiling again. But Democrats are holding out not really moving forward with that reconciliation process that would allow them to do it on their own. You also have that social welfare and tax plan known as the build back better from President Biden. The House was able to move that before the Thanksgiving recess but now the ball is now in the Senate's court and there's still lots of questions about whether various policies might be changed. There's also no guarantee that we're

going to see the end of the government funding debate this Friday. We're Bloomberg News reported today that there could be another short term stopgap measure that could take us into January of next year. And that just sets up another round of debates as far as whether we're going to get a full year of funding for fiscal year 2020 to. Emily great stuff. Setting it up nicely thank you very much indeed. Emily Wilkins a Bloomberg government joining us from D.C.. Let's carry on the conversation now for we're joined by Henry has a trace of V Department's director of economic policy.

Henrietta it's a long list and there's not much time in theory to get it all done as we were just hearing. I got a short term funding of the government needs to get resolved. You got the debt ceiling. You've got the defense budget. You've obviously got build back better. Can you walk me through how you think we're going to see Congress dealing with these or not dealing with all of these issues. Sure. Thanks so much for having me. I think the debt ceiling probably is going to be a mid-January issue. So if you're looking for something to sort of kick into next year I think the debt ceiling is probably not going to be something that they address this cycle. I think they'll probably get to that next next year. I think it's pretty appropriate to

read between the lines of what Secretary Yellen has said to Congress. She has certainty through December 15th. But after that things are uncertain. Uncertain is very different than oh my gosh there's going to be a default. So I anticipate that the debt ceiling issue gets kicked in the next year. I would however really like to see the build back better agenda pick up some

momentum and steam this year because I'll start to get more anxious about that even becoming law at all. If they have to debate it in twenty twenty two twenty twenty two. Is it midterm election cycle. We'll have new data on the jobs front which continues to be better than expected. We'll have new problematic data on inflation. Supply chains will still be disrupted. And I think you could be in a situation of a mixed bag on the BBB if you lead it in next year. To that end I think the new variant of Delta if you want to fine tune of Covid if you want to find any silver lining is that an uptick in Covid headlines drives momentum for government intervention and stimulus. So I would be looking just for this specific week from behind the scenes

action on the build back better agenda. I think the size is going to get much smaller. But I think there is a path forward for it to pass before the end of this year. And of course government funding as I mentioned a moment ago needs to be dealt with by Friday and the jury's out. Yes. And they'll keep it until December 17th or next year. Well let me pick up what you were just saying. That was my question. Macron that makes it harder easier to think about something like build back better and to deal with the debt ceiling. Yes absolutely. So as IBEX CAC picks up you see renewed government intervention. Right now we're at the travel ban stage. But what is going to happen in New York for instance. Are they

going to go the way of Austria and shut down. Are they going to reinstate lockdowns. Are we going to need to have a conversation about whether restaurants and businesses need to shut down again. Gallup been talking about childcare all those issues as they become front and center again. They spur the need for federal action and create a glide path for passing legislation that otherwise would be very difficult. We'd love a crisis in D.C. So ironically as Covid picks up a new way of coming forward

even though that was widely anticipated to occur in the winter months this year whether it was Delta or some new strain the uptick makes it easier for the BBB to become law. Should it should decline or get addressed very delicately. And I think that will pose problems. Okay let let's let's look at this another way. There is a lot to do around it and we need to figure out some key compromises even within the party within the Democrats to get this done. Do you think that if we kick it into next year it's gonna become even more problematic. We're going to start to get close to the midterm. In fact all of these issues presumably the further out we push them the harder they are to solve.

Absolutely. This is a want to pass piece of legislation not a must pass piece of legislation. So if I want to pass this I need things like momentum. I need urgency. I need catastrophe and government. Voter support for federal intervention as we see inflation continue to be a problem. The calls are only gonna get louder

louder that we've had too much government intervention too much subsidization and maybe some of these federal programs should be expired so that the inflation numbers can come down and stop the federal subsidization. That's going to be one of the arguments. They're gonna have to vote on really contentious issues whether we strip out the immigration component as I suspect they will no matter what the salt deduction. Nobody really wants to talk about that on the progressive side but moderates do especially in New York New Jersey Connecticut and California. So it splits the Democratic Party. There are issues about the taxation on

excess carbon emissions. There are issues to do with the electric vehicles tax credit. Who gets to apply for them and who doesn't. There's a labor standard component in the bill right now that's going to be a problem for the Toyota plant in West Virginia which of course is principal and paramount because Senator Joe Manchin. So there's a lot that needs to be negotiated. The longer you give the party to negotiate internally the more fractious. We saw that you know for the last 11 months now. So you want this to pass with a year end deadline. And I would say the biggest driver is probably the expiration of the child tax credit that reverts back to its 2020 levels at the end of this year. So that's probably going to be

predominant talking point the next couple of weeks is hey we really got to up that expanded child tax credit of three thousand six hundred dollars per child in 2042. Ed Henry and President Biden got a little bit of a reprieve when it came to high gasoline prices high oil prices over the last few days. OPEC plus is going to be the technical committee is gonna be meeting later on this week. And I'm wondering what is your base case here. Do you think that OPEC plus goes as far as to sort of take oil off the market. I just wonder how far they're willing to push President Biden here. I think they're willing to push it push it pretty far. And you've seen the administration is willing to go in every other

direction it possibly can. Releasing some of the reserves from the Strategic Petroleum Reserve recently calling on a pack to do X Y and Z. The administration is really taking all these external measures that it can. And I think that CAC plus probably sees that and says you know the administration is going to be in a place where they're going to respond to the extent that they will. But we have an opportunity here in a shifting climate environment to maybe make some changes on our production

expectation and we'll push the administration as far as we can. And I expect that's what they'll do. Henry has a busy week. Perfect timing as you wait for Henrietta. Thank you very much indeed. Henry ISE entrees. As you can tell because at seven feet apart as director of economic policy.

Thank you very much indeed. European equities are selling off pretty hard right now. We're down toward session lows. Stocks 600 is only up by six tenths of one percent. We've gone for seventy four. Sixty six really quickly. We'll continue to keep you updated with the markets. This is Bloomberg. Thirty five minutes to go until the end of the European session. We're watching very carefully to figure out exactly what is going on because we are seeing something of a sell off right now. Key stocks. Do you want to focus on B.T. Group. That's

money which is interesting in a day like today. There are still idiosyncratic stories that are moving individual names. Beatty up on the back of that. But look at IAG and look at silhouettes anyway which I think are really interesting. So IAG probably one of the most exposed airlines in the world to long haul. Terrible day on Friday. Bounced this morning definitely now fading. That moves earning up by eight tenths of one percent to gain a little bit more traction but nevertheless unconvincing it seems at this point. We still don't know exactly how global governments are going to continue to react to this. Are restrictions going to get tightened PCR tests on arrival.

That's a really difficult one to deal with. But domestically it's interesting actually Sunni World Group up by nearly 3 percent at the moment. So the market is definitely separating out what is happening in terms of domestic stocks and those exposed to international travel. So an income a ying and yang there in terms of the reaction. What are we going to do next. We're going to continue to keep you updated as to what is happening on the European close with the emergence of a macron. David Heymann professor at the London School of Hygiene and Tropical Medicine will be joining us. He spent an awfully long

time at the World Health Organization. He's got some great contacts that he can bring us as to what is happening here not just a domestic story but also an international story. He's going to bring those two together. The closes next. This is Bloomberg.

2021-12-01 19:47

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