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00:00The most crucial moments in the trading day. This is Bloomberg Markets the close with Caroline Hyde Romaine Bostick and Taylor Ray. It is 2:00 p.m. in New York. It is currently 6:00 p.m. in London and we are live from remotes world headquarters. This is Bloomberg Markets Close and Caroline Hyde. I am Taylor Riggs and we are of course doing very special guest today. Katie Greenfield our Bloomberg Cross Asset reporter. Romaine Bostick is off today and he misses the energy crunch that heats up crude topping a hundred fifteen dollars a barrel. That said stocks are hit and have a pause on that rally. Bonds stand. The record losses though remain as out today as Taylor takes on what the unprecedented bond rout means. Katy here with the cross asset correlations we've got you covered. Vladimir Putin adding fuel to the fire demanding gas payments in rubles as a key adviser quits that as President Biden heads to Brussels to turn up the pressure on a faction group of NATO allies. Plus all TV ratings broken. That's the claim being made by Byron Allen chairman and CEO of Island Media Group. He joins us to discuss his suit against meals and TV. All that and much more coming on this hour. But breaking had some further sanctions none of it involving energy. But Katie we really actually seeing for once a flip reverse in the direction of bonds and stocks. Absolutely. I mean yesterday the story was definitely stocks up yields a complete opposite picture. Today you have yields much lower stocks lower as well. Yeah. And it continues to be one that we check in on the markets as we see these correlations. Just take a pause. Well correlations still working in terms of bonds on the upside and stocks moving in an opposite direction. But of late we've got rather used to this. S & P 500 on a tear. Suddenly a stellar record. What stellar rally that we had the previous week. Just today we take Reeva Riva Reader off by eight tenths of a percent to your yield on the other side having rallied so high so hard we come back down to a two eleven on the two year. New York crude though not going anywhere otherwise than up up 4 percentage points as we continue to see concerns about whether or not we could see sanctions hit upon Russia in terms of energy as yet still being directed at oligarchs still being directed at political people. And at the moment though we also focus on the supply side here in the United States and the pound. I just want to focus in on this because we talk about inflation day in day out here in the United States. In the U.K. it hit a 30 year high but this was very much factored into the market move. And we sort of overall have a trouble and arrive kind of by then by the new sell the fact pound off by four tenths of a percent. But as we were just saying another kind of day wild swings for Russia's ruble. And we've just been getting headlines from that Air Force One gaggle is President Biden arrives and heads to Brussels and talk to us. Anne-Marie of course as we see some of these breaking headlines that involve potentially well Russia starting to react to the tit for tat the JI saying that and saying that they want to ensure that there is no systematic sanction busting. That's according to Jake Sullivan of course the adviser there. And also trying to say that China can't circumvent some of these Russian sanctions. Anything new that we learned. Do you think. Well I think Jake Sullivan just coming out and making it pretty clear that tomorrow Russia could expect more sanctions. Wall Street Journal had reported that as many as 300 members of Russia's State Duma will be sanctioned. These are lawmakers but also oligarchs and the like. And then at the same time they're going to make sure that alongside their allies there are no loopholes that any companies or countries that are trying to do business business with Russia could skirt around when it comes to China. What's interesting is Jake Sullivan talked about that summit that's coming up April 1st. So just as the president leaves Europe the European Union just days later will be sitting down having their own summit with Beijing. And they want to make sure that they are working in lockstep with Europe that the message is consistent that you can not help Russia skirt around these sanctions nor should you be helping Vladimir Putin when it comes to weapons and his invasion Ukraine. Anne-Marie it's also interesting when you think about consistent messaging not wanting to perhaps maybe go too far to create a hole that China then can come in and step in and fill what is sort of that tactical play of trying to install sanctions that wanted to make sure China as well won't sort of come in and offset some of those. Well they want to make sure that China is not helping Russia skirt around the sanctions and that business just moves to China. And I think the administration has put China pretty much on guard about this. We heard this from Gina Raimondo when it comes to the tech space. Meaning if you skirt around those sanctions or help Russia skirt around the sanctions there will be costs for China and Chinese businesses in terms of the technology they need from the United States and other allies. But as you say Taylor it's a very difficult line to walk of cross because same time they're trying to show resolve and a strong stance against Putin. At the same time they're doing the exact same thing when it comes to China. And in theory of course these headlines are hitting as President Biden arrives in Europe to talk with NATO. Do these headlines and these sanctions alter the course of what's expected at this event or was this pretty much on what was expected. Well Jake Sullivan said a lot of this yesterday at the podium at the podium in the press briefing room at the White House about what to expect in terms of there will be more sanctions and there will be this effort to make sure they can close those loopholes on the sanctions that do exist. Interesting though he did point to Friday morning. The president on Friday will be in Poland. And he pointed to Friday morning about more details on the U.S. his efforts to try to help Europe shore up energy supplies. Really the toughest part of the sanctions that they've not gone so far to to impose yet would be European putting sanctions on Russian oil and gas namely natural gas and the United States. And Jake Sullivan on Air Force One as the president travels to Brussels is talking about the fact that they are trying to help Europe when it comes to energy security. That can mean more LNG coming from the United States and other players in the world like Cutter. Really appreciate that perspective there from our Bloomberg Washington correspondent and reporter and live there in Brussels. Caroline we try to come back to the markets as we always do and see sort of the impacts of all of this. You certainly at least see some of the impacts today on the bond market as Katie mentioned at the top of the hour. We're coming off of two or three sort of straight days of yields much higher today. You come off a little bit of that of course here today on the 10 year yield you're falling again about eight basis points or so in yield in the two year olds down about 7 basis points or so. You also had a pretty decent 20 year bond auction as well. So bond markets you're trying to give us some signals coming down a little bit from some of the recent highs that we've had. You change of the board. We go cross asset as we usually do and take a look at the equity markets. We talked a lot with Gina Caroline Hyde earlier this week about what some of the technicals are telling us. So we pulled this up here right about the 200 day moving average. We are right there. As you see the 50 come down the 200 go up a little bit. So you're sort of bouncing off some of those key technical levels as the market tries to find its footing and also tries to digest the sentiment as well. Something we're discussing a lot with Gina Martin Adams. We're going to dig into all of this sentiment into technicals into fundamentals have Ben. He's with us from Medley Global Advisors Global Macro Strategy managing director. It's a very global picture for us today at the moment. Ben talk to us first and foremost about where we are in terms of stocks the slight pullback today. But in general are we marching higher in general. Can we push through the inflation picture. I think so Caroline I think that this is a short term momentum. The market fell last week and it was really three things that came together. And so obviously defensive messaging on inflation has been taking with a lot of credibility by the stock market because getting ahead of the problem is obviously a good thing in the future for at least getting inflation that control. Then we have China pledging stability for its markets and it actually reiterated that message yesterday. And believe it or not and Russia do be it good bottle. Bond last week averting hard to falls. More coming through here that they will continue to make payments. I think that underpins the market short term at least for this move. Let's say 40 cents higher or above on the S & P. But as you see today there remains uncertainty as to sanction continue to be put on markets. Do leaves out of that can again fracked energy prices significantly. And therefore I think you see some of this is today on that basis. Is there serve a long term view though despite maybe the downturn today that you mentioned that there is an equity market that has confidence that this Federal Reserve will tackle inflation and come after it. I think they said it's a data they basically make the message loud and clear enough. They're ready to move. With more than 25 basis points not just in one meeting but maybe two or three meetings. And so a bond market off basis as units of Fed signals that the stock market discusses this. Well that does mean that you're going to slow down the economy to an extent that inflation really comes down. I think that combination leads into this revival. The Su Keenan growth stocks. But let's make one clear assumption here. We're doing this on the basis of the economy still strong. The economies of both potential that you can hike rates with that much because if the initiative in the UK would have averted much faster and that short machina yet. Now that's I think why stock markets take this message from the Fed credible and positive. And Ben like you said I mean a 50 basis point hike at this point definitely on the table. But what is striking to me is that if you look at inflation rates even expectations they're still moving higher really across all tenures and press. What you make of that disconnect that the Fed is very eager to control inflation here and yet it feels like the bond market maybe doesn't believe that. I should point gain any good if you actually take the break evens data one year and two year and a five year tenure is a huge fan. Now she like a franchise second range of outcomes a little inflation for much higher flash 6 percent to maybe back down to 3 percent. So I think that's what the market's trying to figure out. In bonds Hang Seng rarely exactly low. With this inflation issue hike rates and how is this going to affect the economy. Because it it would have to slow down the economy to get to this lower inflation rate. So the bond market I think is consciously trying to figure out like how many reduction really needed to get us back to this 2 percent of a certain period of time. It seems that we're settled for now at 10 or 11 number of hikes with nearly 50 basis point hike in between to get there. I think again stock market is measured by positive background. Meanwhile though I'm talking of inflation. We see oil price ever higher. We've got U.S. crude mandarins dropping Ben. That being a geopolitical story as well as a supply side story one that potentially the Federal Reserve can't control. How much you keeping a car an eye on the commodities moves and how much does that worry you. While there's a significant risk Caroline Hyde against you know college the energy aspect is really good analysis on the dangers of the physical market. And in crude oil it really leads you to much more higher oil prices by the summer range close to 50 dollars per barrel. You know that is and remains a big risk for the economy itself if you're hitting that type of levels. There's going to be friction is going to lead to real slowdown. So we have to keep watching it. And as you see it just not really able to be controlled either by the Fed or even by all back for that matter. Because of those crude barrels from Russia being displace. And if you look at the outage that happened in the Caspian Sea and not our number of crude barrels from Russia's place to shoot out date of that physical market crude ish and therefore the pressure on corporations will remain banned. We're taking a look at investment grade and high yield spreads. They'd started the why did a little bad. But then it sort of seems like valuations that look so attractive you actually had some buyers step into the market. J.P. Morgan's Bob Michael was one of those what our credit spreads telling you. So find amazing actually that you have the credit index itself down almost more than 9 percent or so year to date is the worst sell off. I think is as good dating back as far as 9 1990 or so. And yet this credit percent remains a good thing because really this is a story about duration and a sensitivity off of bonds to interest rates. The credit duration is nine years or so. Treasury duration is seven years. Each time rates go up by 1 percent which we just went through. Yeah you get these losses or the credit index but the credit stress itself don't change. I think what Michael McKee are investors are looking more at the actual deals being an interesting entry point at this moment given the extent of the sell off. But let's keep in mind if the economy will slow down because of the timing you mentioned benefit and higher oil prices or suppression on the economy. I can't see spreads stay here and it would likely have to widen. Really appreciate it. Many moons of course a medley Global Advisors really appreciate your perspective as we kick off the show you guys looking at equity markets is heading lower just a little bit. Coming up we're going to hear from our exclusive interview with San Francisco Fed President Mary Daly her insight on fighting inflation and what rate hikes will mean for the economy. And we'll be speak with media mogul Byron Allen chairman CEO and founder of Allen Media Group. His latest on that lawsuit against Nielsen and why he claims his TV networks are undercounted in the ratings. And we're pushing you forward to that closing bell. We are going to get more insight on today's trading. And we're going to do that with Brad Stone senior portfolio manager at CIT Investment Associates. All that more coming up. This is Bloomberg. Federal Reserve Bank of San Francisco President Mary Daley saying that she is quote everything on the table for the next policy meeting in May. She spoke exclusively to Bloomberg's Michael McKee from the Bloomberg Equality Summit earlier. The traditional way that we've done it over the last couple of decades is you raise the interest rate you rest a meeting you raise the interest rate you rest estimating meeting. And it's really that gradual approach that was bent to see what's going on and then make adjustments. But the S & P median was 7 increases in 2022 and that suggests quite a bit of front loading on policy. And I'll remind people if I may that we're also going to make balance sheet adjustments and as early as in the May meeting. But that hasn't been decided completely yet. But that's another. Now that's generally considered equivalent to at least another rate hike. And then and this is something we often don't talk about either. We're making these adjustments at the same time. Other central banks across the globe are making similar types of adjustments tightening policy. So we could get a lot of tightening in financial conditions globally. And that is something we have to think about. So I do think relative to previous periods of tightening this is quite a bit of front loading just as the ECB has indicated. Well Chairman Powell said on Monday that he's open to a 50 basis point move at the next meeting and the market is certainly taking him at his word. Are you willing to support that. I think the data will tell us whether 50 basis points or 25 basis points in the balance sheet is the right recipe or 50 basis points in the balance sheet. These are all the tactics of how we get the policy rate adjusted and the data will help guide us. If and I so I would hate to front run those deliberations but I will absolutely confirm what Jay Powell has confirmed for himself which is that I have everything on the table right now. If we need to do 50 50 is what we'll do. If we need to do twenty and balance sheet. That's what we'll do as the data will help us determine how much is necessary. The important thing I think everybody would listen they would like to know is that we're committed to moving the policy rate in alignment with what the economy needs. And right now it doesn't need all the extraordinary support that we've been offering. That was San Francisco Fed President Mary Daly speaking earlier at Bloomberg's Equality Summit. And coming up we are going to be taking a look at shares of midair now. Take a look at those deciding right is efficacy data in children under six. They've trailed some of those expectations. We're going to have more of that in our Stock of the Hour next. This is Bloomberg. Time now for our top calls a look at some of the big movers on the back of analyst recommendations and first up take a look at eBay. They're upgrading T-Mobile to overweight from sector weight. The analyst is highlighting the company's 5G network saying that T-Mobile will continue gaining market share in the wireless market. Shares are well they're mostly unchanged on the day. Next up Credit Suisse is slashing Adobe's price target to 525 from 625 a share while maintaining a neutral rating. The analysts citing the potential for decelerating revenue growth saying that headwinds facing that company they appear more than transitory. Shares are off. They're almost 11 percent. And finally Raymond James is downgrading knocked to a market perform from a strong buy rating removing that 260 dollar price target. This is after some customers were impacted by a security breach. The analyst says that the breach does create credibility ahead of some of that. And shares here are off Caroline. Just about 10 percent. Some big moves that on the back of cyber which is front and center at the moment. Meanwhile let's get our Stock of the Hour. And this time we're talking a little bit of biotech shares. Madonna falling after the company released data from its vaccine trial on young children. Bloomberg Quicktake Gupta joins us now. Why the fall. Well Caroline it looks like investors are just a little bit iffy on the efficacy data because there's about 7000 children in this study under the age of six and the efficacy data coming in about 40 percent. But some bizarrely Bloomberg intelligence was saying that usually the lower limit that's acceptable for this efficacy data is 50 percent. So then it's the question is will this even get approved. That is one thing. But one thing I will just mentioned as a counterargument is that I think a lot of people are comparing this to pre Omicron when you had efficacy levels for these vaccines like 95 percent. But you've got to remember that Omicron isn't immune. In Berrien. So that means is it really a fair comparison here one to watch particularly those with small children desperate to see potentially them vaccinated. But in a safe and meaningful way which could go up to really interesting on all moves from a done I mean. Well let's have a quick check on the rest of the markets guys because Katie S & P 500 not having as strong today as we used to. No not at all. And it's interesting. You see tech outperforming a little bit here not down as much but it looks like energy is your only choice to stay. That's the only sector in the room because Taylor. Neal I was going to say you're pushing this ad nicely to the commodities closed Caroline that you get to do in about three minutes time in sort of interesting story is sort of classic risk off kind of day when you're thinking about the equity markets and folding that over into the bond markets. It is price higher yield lower. Is it risk of course of watching Ukraine. That's a great question. It's hard to have conviction in any single narrative when it feels like the story switches so quickly. I agree. Maybe a bit of profit taking too from New York. This is look. This is Bloomberg Markets the close of his to 32 that means settlement of oil has just occurred. Let's have a quick check on how the commodities market is played out today. Well the 5 percent higher on New York crude once again getting a push up. This after we saw a government report coming from the United States this time really showing that crude inventories there. On the downside the supply side still a problem particular when you have storms particularly damaging some pretty vital export terminals that is in the Black Sea. So all of this once again adding to the supply side headache that is fronting oil investors. I'm looking also at NIKKEI because this day decided to rise by almost at about 15 percent. Remember Nicole surging. We've got these new limits in place over the London Metals Exchange and we've had some pretty sharp moves on the back of it ever since of course we reopened to be able to trade Nicole. So currently I looked at the limit on the upside but we saw some significant buying for once after several days on the downside to the tune of 15 percent. We're looking at sugar up 5 percent. This is an interesting one because interestingly Xi Jinping and push higher this after. Actually it's all to do with oil prices because as oil prices go up then maybe it's a little bit more prosperous for some of the raw sugar makers to well produce ethanol rather than sugar in and of itself. So you've got the Brazilian exporter's diverting some of that cane to be making biofuel instead. As energy prices rise and gold on the nine tenths of a cent higher this article wants see a bit of a bond rally. Yields push lower and we decide potentially oil is somewhere to be buying into on the day. Let's talk about oil a little bit. Caroline Hyde think it was interesting. We got that EIA crude inventory report this morning. And I think some of the big key headlines that we took from this was the draw in some of those crude stockpiles. It was boosted a little bit by the Strategic Petroleum Reserve last week. But total nationwide crude inventories are still down by about six point seven million barrels in that week. One of the biggest weekly draws that we've had in about 13 weeks. So Caroline we've been talking a lot about this than some of the good research of course that has been coming out of some of our Bloomberg intelligence folks as well on some of these supply and demand dynamics for this crude market. We just currently seeing some breaking news that is impacting of course a former secretary of state here in the United States Madeleine Albright. She has passed away at the age of 84. This of course being currently said by the family of Madeleine Albright of course a very well-known figure in politics a leading light when it came to women in power. And so certainly one that we will be dwelling on in a moment. We'll bring you further details on the passing of Secretary of State Madeleine Albright. For now let's return to what is currently a geopolitical story and one that Madeleine Albright herself would have been focused on for many year I'm sure not being Russia Ukraine. That of course is feeding into what have we seen in the commodity space the higher oil prices the higher energy prices and indeed the search for something sustainable that is different. We're going to dig into the best of Bloomberg intelligence now because it got some really interesting research being done by Fernando Valley Bloomberg intelligence senior industry analyst about well the use of diesel. Talk to us about recycling of diesel. How does one even do that. Well it's really the recycling of other oils into renewable diesel. So essentially you're taking oil that would have been soybean oil palm oil or used restaurant oil and converting it into renewable diesel can actually run in your car. It's chemically chemically identical to fossil fuel diesel. And a lot of refiners have pushed up because of incentives that you receive on a state and federal level to produce that renewable diesel. But with the rising oil prices as Caroline Hyde you and Taylor Riggs saying we saw the big drop in diesel inventories. The margins are very elevated. We actually think they might start reconsidering some of the conversions from fossil fuel to renewable fuel because of those dynamics especially how it pushes up food prices as well. Really appreciate. There are various Bloomberg intelligence. Fernando Valley always wish we had more time with you but we do want to get back to some of that breaking news. Caroline Hyde you talk about the former secretary of state Madeleine Albright the first female secretary of state in U.S. history. We know sir from about 1997 to 2001 under President Bill Clinton. And you think about sort of a woman at that time a master is a P H D. We're looking through her biography looking at Columbia for a degree that she received all the way back in 1975. Think about some of the historical leadership that this woman has provided. And again sort of the first female U.S. secretary of state and becoming then the sixty fourth I believe U.S. secretary of state again under President Clinton. Certainly a lot of historical moments coming from this one. And an immigrant you know this is a woman that immigrated with her family to the United States back in 1948 coming from Czechoslovakia. So a woman who knew what it was like to be. The American dream to a certain extent. Absolutely. I'm looking at the statement from her family and they highlight that you know she rose to the heights of American policymaking and she received the Presidential Medal of Freedom in 2012. That is the nation's highest civilian honor. So really an incredible woman an incredibly incredible policymaker. And she served calls went on off to politics to serve as the chair of the Albright Stonebridge Group since 2009. She of course was a distinguished professor. We went onto to advocate to teach her to give off her foreign service and education now. And she was also of course bestowed with many a medal. But really as three women sat here with the joy of being able to talk about the role of economics of politics off of women such as Madeleine Albright with which you know we stand on the shoulders of giants. There have been women who have gone to significant areas of strength. And we see continued evolution in women in positions of power. We have yet another CEO of a female being announced today 17. Now you're getting an interview chief executive of a female. So in London we have Madeleine Albright of course really a leading light in terms of women holding positions of authority in the United States. Tend to think about the moment that we're in right now the Russian war on Ukraine. And you think about the history that Madeline has brought as well. I'm reading through her biography here and a master's degree a PGD or a certificate in Russian. She wrote her master's thesis on the Soviet diplomatic cause a doctrine of course dissertation on the role of journalists in the Prague Spring of 1968 taking graduate courses. Then later again that person becoming her boss at the U.N. National Security Council. So the history that she has of traveling and learning Russian travelling to Paul Allen. And then you think about where we are now at this moment and sort of in some crazy way coming full circle where some of all of those issues still not yet resolved. Caroline I mean of course Czechoslovakia with where she came from was war turmoil in and of itself to become the Czech Republic. We want to of course be discussing all of this with Joe Matthew Washington correspondent a man who can shed a little bit of light on the legacy of Madeleine Albright of of course the former secretary of state. Joe what do you make of her passing. What's the big deal here. We're talking about a pioneer. This is this is a larger than life figure here in Washington D.C. in the nation's capital and of course globally having been the first female secretary of state in U.S. history. I'm sure Hillary Clinton would make clear as she has indicated in the past that she may not have had that job herself if it weren't for the road paved by Madeleine Albright. Of course also the US ambassador to the U.N. helped to assemble President Clinton's National Security Council. This is someone who was steeped in diplomacy and helped to drive the conversation in some very interesting times. Joe it's interesting as well. We're thinking about where we are at this moment as well. I'm taking a look through her biography and traveling to NATO summits. Speaking as a U.N. ambassador to the United Nations what do we remember about some of the biggest moments she's had on some of those big geopolitical stages. Well you know it's interesting that you asked that because very close to her passing she weighed in on this and said that Vladimir Putin would be making an historic error if he continued a full invasion of Ukraine. She referred to his revisionist history and his absurd assertion that Ukraine was was created by Russia. So it's fascinating actually as you ask that to know what she actually would have thought if she was on Air Force One right now with President Biden heading over to Brussels somewhere that she spent a good deal of time as a faithful member of NATO. She referred to the Russian empire in and in Vladimir Putin's warped world view saying that she was disturbed to watch what was happening and attempt to establish the pretext for a full scale invasion. And of course following that op ed in The New York Times she did exactly that. He is pursuing this full scale invasion before our eyes. And Jill I mean sticking with Madeleine Albright's legacy of course she served as 64 a secretary of state from 1997 to 2001. What was the defining moment would you say of her tenure as secretary of state. Well that's a great question. I mean her tenure itself was a defining moment just in that she was a pioneer in the first woman to have the job. And having spent the time that she did at the United Nations brought a very interesting perspective to this role as the highest ranking woman in the history of the United States government at that time. But what are our policy in Bosnia if you think back to where we were then in the Clinton administration. It was one of the more important moments there. And in dealing with North Korea that was this was you know. Well we were talking about Vladimir Putin. It was Kim Jong un who was going to be considered the great threat to the United States. This is back when a missile test would stop the world and would lead the headlines. And she was pivotal in dealing with those crises at the time. Yeah I'm reading here. Back in 2000 she became one of the highest level Western diplomats to ever meet Kim Jong il. Of course then the leader of course of communist North Korea during a state visit to that country. So really some broad international experience as well. Appreciate you jumping on the line for us. That was our Bloomberg Washington correspondent Joe Matthew. He of course does work on Sound ON with Joe Matthews. That airs at 5:00 p.m. Eastern weekdays on Bloomberg Radio. We'll be back. More with some news from New York. This is Bloomberg. Want to turn now to one of our favorite segments of the week. Any moment the global bond markets. They have suffered some of the most unprecedented losses since about peaking last year. Take a look at this chart that we have on the terminal. This comes on the heels of central banks including the Fed really now starting to look to tighten up some of that policy to combat surging inflation. Joining us to discuss is Chris Forgot his senior vice president and managing director of municipal investments at Valley National Bank. Chris is responsible for the bank's 2 billion dollar muni bond portfolio. Talk to us about the losses there because it does feel like there's been a significant draw down. How have Munis reacted to the volatility within the Treasury market. Thank you for having me back first of all. They've really reacted poorly in terms of performance. You've seen ratios gap out from all time lows throughout 2021 68 percent ratio in the 10 year Treasury throughout the average was the average throughout the year 2021. They're now back to 92 93 percent which sounds really attractive but it's actually the long term average. So they've really underperformed by about 24 or 25 percentage points from where they were previously. How do you think about meanies coming off of that 25 basis point lift off with the Federal Reserve but expecting much more this year. How do you think about the performance of Munis in a rate hiking cycle. I think they're going to perform in line with treasuries. I think we've gotten back to an average as I mentioned earlier but I think net net they are in interest rate products so they're going to perform in-line with what we expect treasuries to do for the long run. It's going to get cheaper. The front end is really going to cheap it up a lot I think. So then do you stay on the short end even though that's going to cheapen up more. How do you think about duration. I think you want to manage duration appropriately and I think more of a community. Two strategies. One is a barbell. Go a little bit long. Stay short. There's a lot of risk in that. I think more stick to the belly a little bit neutral in terms of duration and you'll probably weather the storm a little bit better. One thing we've been talking a Chris here on the Treasury side is some of the curve inversions that we've seen at least on the front end. I am curious how you think about Muniz that follow if there is a Treasury curve inversion. Does that signal a recession. And then of course what does that mean for some of the trading municipals. You know I think municipals will invert with treasuries. I'm anticipating inversion in the Treasury curve to 10 sometime in the second quarter of this year. And as you indicated that tends to lead a procession or lead into a recession I should say. And I expect that to be the same with municipal market. Yeah. Think about more here as you think about not only some of the duration in the barbell strategy that you mentioned but when you take a look at spreads I think it was interesting on the credit markets you've seen a little bit of a widening now. But valuations look cheap enough that people started to come back in. How do you think about spreads when it comes to me. I think you're going to hold in here. You look at what happened with the infrastructure bill and it's really provided an influx of cash. I dare say it's a windfall to misspell cities that have kind of boosted their overall credit quality. And so I think they're going to hold in relatively well. And I think we've seen some of that already with some of the ratings upgrades that have happened in the past year stimulus money. You talk about rating upgrades and some of the big conversation have been states and local governments are now actually flush with cash maybe in some positions better off than they were pre pandemic. Has the stimulus money been spent or are you still factoring that into future upgrades and credit spread compression still factoring it in. You have until about 2026 to spend the money. So they misspent all these have a long lead time to actually have to spend the money. And then what is going to be the follow on effects. Some of the things they've spent the money out have been very Covid related but we've also seen some very non Covid related infrastructure spending. Long lines of almost revenue based opportunities are being a little forward looking in their approach. He's not like the classic revenue toll bridges. Right airports reopening. We're talking about the MTA. I think a new leader trying to lead the MTA system here. How do you think about sort of these classic reopening plays that we traditionally talk about within the equity market and you're actually still very much talking about here within the bond market. I think with the influx of cash they've gotten through the Covid spending and or the anticipated influx of should they spend it it provides that low level of support for them. So I think they're going to come back. OK. And I think they've really weathered the worst part of the Covid storm. Can you get specific for us here. What are some of the credits. People have often talked about maybe the MTA system right if New York is back. How do you think about maybe some of these individual credits. I gotta be careful. Talk about specifics but I was trying to get nailed in there. I give you credit for that. When we look at some of the the revenue plays out there I really want to be able to dive deep in and see do they have a history of good prudent management. We're looking to the MTA. I think they've done some good quality upgrades in terms of how they're approaching this. They've got a real headwind in front of them in terms of where the revenue comes from and the challenges with the infrastructure within the city though. Really appreciate it. Chris Fogarty their senior vice president and managing director Municipal Investments Valley National Bank. Caroline over to you. We thank you Taylor. Great interview. We now want to switch gears a little bit because media mogul Irene Allen has filed a lawsuit against Nielsen claiming its TV ratings are broken providing unreliable. Counts a few as he's seeking billions of dollars in damages. Allan joins us now from Los Angeles to discuss the suit. But also we want to get his take on the current media landscape on a few potential bids. He's currently involved in fire and it's always great to have some time with you. Thank you. First and foremost the Nielsen suit. What would what better what changed you wanted to be seen. We we need a different many different platforms. This isn't working in my humble opinion. This is a monopoly. They Nielsen has filed numerous lawsuits that has shut down other innovation competitors. And it's a monopoly. And when you get a monopoly. These are the results. You get what we believe and in our opinion inferior an inferior service inferior product and pricing. That's not competitive. And it's unfortunate that for the most part this is the only thing that the ad community will use as their measurement platform. But I think the ad community is very comfortable with this because they know it's being underreported. Look at what happened with this past Super Bowl. They had to. They were commissioned by the NFL to go and and recalculate the Super Bowl ratings. And they went up almost 25 percent. They found millions and millions of viewers that they didn't find before originally came out. I think it was like 160 million viewers. And then how they recalibrated came in at 205 210 something ridiculous. Also when you look at the folks that have come our way since we filed this lawsuit it is truly remarkable the folks. I mean this is in my home humble opinion. This is going to become a very very large class action lawsuit probably one of the biggest in corporate history. We have cable networks out there that have said that their ratings went down double digit double digit price simply because someone had a birthday and they went from being 54 to 55 and they were being measured in the demo of 25 to 54. Right. And all awful sudden somebody in Wisconsin had a birthday and a major cable network had a double digit decrease. The stories that are coming in are just insane. Well Byron we don't have a lot of time here. So I want to jump in and ask you know you describe Nielsen as a monopoly. So how do you fix that system. I mean is it a matter of having more ratings companies or what do you see as the alternative. I think they have to have more. You have to have competition. Competition is good. What would the NFL be with one team. And it's great that we have 32 teams which is why the Super Bowl was a national holiday. Competition is good. It's great. It brings out the best of us. And we need to sample more. We need to go deeper. We can't have you know a couple in the middle of Iowa representing 20 30 percent of these ratings. It's insane. And by the way they admit to these issues and they say they're going to get better. The problem is what they're trying to get it together and get it better. We're losing money. We're losing billions and billions as an industry billions of dollars in revenue. So we want to work with you but you got to get to the table and work with us. You can't continue to to not have major major sampling. You have to increase hiring. We have to get your pricing right. I love how you vote out there and the Super Bowl that I want to bring up the NFL. Well broadly. And the potential of the Denver Broncos is that still happening. Well I can't speak to that. But I think you know listen here's what I would say about the NFL. It's a league that's been around over a hundred years. 70 80 percent of the athletes are African-American. And unfortunately they've never had an African-American owner. It's long overdue. Everything in my power I will do everything in my power to help them achieve that goal. That's the most I could say about that. So it's a you know you know the Denver Broncos is a phenomenal franchise and the NFL is an amazing organization. And Roger Goodell does a phenomenal job of managing and running that that that league. And he's been there over 40 years. You know he's an amazing individual. He got started there when he was 23 as an intern. He's been there over 40 years. And his firing. We have just about 30 seconds. But I do want to ask about the broader Anthony landscape whether you're eyeing any more deals specifically in the media space. Are you kidding me. We are highly acquisitive. You know we can't buy our acquisitive. We are highly acquisitive. Get our hands on it. We're going to buy it. Our shopping cart will never be full. And we have one of the biggest shopping carts on planet Earth. If it's for sale we're buying it especially if it's media and it's streaming and it has anything to do with advertising it. We're gonna buy even if it's not for sale we're buying. Firing. Come on. When you bought it. We love having you on the show. I'm sorry it was so short. Byron and Great Top Time the chairman CEO and founder of Allen Media Group Bloomberg Television and police have been out to Nielsen for an interview on the lawsuit. They say there's no substance in it. This is Bloomberg. Come down to the clue Bloomberg's comprehensive cross platform coverage ahead of the US market starts right now. This is Canada the closed just 60 minutes left in your trading session. Caroline Hyde Taylor Riggs. We've got to get Greifeld in the House today. We're joined by Carol Massar and Tim standing because we go cross platform TV radio YouTube to discuss well not about turn today. Bonds they rally stocks they drop. Exactly right. The only thing we can count on is volatility. You know pick your market. What's interesting is despite some of the downward moves here that we're seeing U.S. stocks we saw it in Europe overnight. You know we continue to see money go into Chinese stocks. We're seeing it certainly in the U.S. listed Chinese 80. I know. I say it a lot. The NASDAQ Golden Dragon China up another one and a half percent. It is up folks 50 percent in the past seven trading days still down 60 percent from that February 20 21st time. But if you want to know where money is going. That is certainly one place I'm keeping an eye on. Bank stocks this afternoon under pressure as we see continued concerns about global growth. Investors trying to understand just how Russia's invasion of Ukraine affects the global economy. Yields also falling a bit of course. The KBW bank index down about two point six percent. Twenty three of 24 names in their lower. Still though I should note up seven point seven percent just since March 7th earlier this year. It's always maybe there's a bit of profit taking going on today as we see the S & P 500 off by nine tenths percent 41 points lower. That's four thousand four hundred seventy is where we trade although I will note volumes once again lower down 25 percent versus your usual 20 day average Dow Jones off by more than a percentage point on the industrial average currently down by three hundred and fifty points. The Nasdaq big tech down by nine tenths of a percent and the Russell 2000 actually underperformed the small caps getting beaten up by one and a half percent. And if you take a look under the hood like Tim mentioned you can see financials really getting hit today at the bottom of the pile. So too is health care. Maybe as Madonna takes a dive here what's winning though. You have energy way up top. They're up almost 2 percent. That makes a lot of sense when you look at crude oil prices up about 2.8 percent right now. Take a look at some of the individual movers as well. Like we usually do. I think when you think about some of the inflationary pressures General Mills comes to mind. They were up after boosting sort of their sales and earnings forecasts for the year passing on those costs for your Cheerios. Caroline Hyde and some of those cereals that you loved on sugar cereal is it not the little high ones. Super cute. Look I just opened up a big can of worms. Let's move on to a firm. They had a price target this last 80 from 140 over at Morgan Stanley saying that they expected the buy now pay later lender to struggle in this current macro economic environment. But this year is doing the opposite. You're up about one point six percent on the day. And some of the cannabis stocks Caroline Hyde did this for you. Stocks like Tilbury Sandell growers they were rising in March. He smokes cannabis. You Rod is in your living room. I don't buy into this seedy vibes and you know we don't go with that. Nothing wrong with new THC retailer just across the street from the office. So you need to dabble. We were just speaking of course to a CEO of a company that's just been doing a bit of MBNA. A little bit earlier on the one o'clock we had Charlie about Shiloh. Carrasco lives on after they spent two billion buying up some other companies. Let's have a little look across the board. What's happening in Taylor's favorite to you. We're not talking cannabis for her. We're talking bonds. Oh yes we're talking relative strength index. I get all in on the technical today because we have been. Well if you're looking at yields way over and above where you should be on a technical level above that 70 of course this meaning that that's a technical sort of buy signal if you flipping aversive it of course you're looking at the price you're looking at the yields. But this is really starting to show how far how fast we have rallied in the two year yield and how perhaps we're going to see a little turn of events. And certainly we saw that in the 20 year bond auction today. Yeah. Bonds the new cannabis perhaps. Or maybe Fed speakers or the new cannabis. We certainly have heard from a lot and rightfully so. And they are deftly shaping the narrative when it comes to the trader helping you say shape it. Hey are Michael McKee. If you haven't listened to this conversation you Duffy should catch up with it. San Francisco Fed President Mary Daly he caught up with her at the Equality Summit. Here's a little snippet of the interview. And basically she's saying the Fed's going to do whatever it has to do. Check it out. They will absolutely confirm what your cheer pals confirmed for himself which is that I have everything on the table right now. If we need to do 50 50 is what we'll do. If we need to do twenty five and balance sheet. That's what we'll do. The data will help us determine how much is necessary. All right Mary Daly of course the president of the San Francisco Fed catching up with our Mike McKay at the Quality Summit so 25 50 doing whatever they need to do to him. Yeah. The part that Mike pointed out to us when he was on our program just a little earlier today is not necessarily 50 at one meeting. Perhaps if they start to work with the balance sheet at the next meeting then they have to take that into account then so there could be some combo balance sheet run off and also raising interest rates. Yeah we'll see. But if you look at what the market is pricing right now I see about 43 basis points priced into the May meeting whether that they also you know start to run off the balance sheet they announce that at the May meeting remains to be seen. But it sounds like there's going to be plenty of fireworks ahead. And I think one thing sort of bringing it back to the markets that we've been trying to grapple with and wrestle with today is sort of this stocks can be that inflationary hedge. But if you're thinking about a big rate of change in a big magnitude of those rate hikes. Caroline do you think about sort of that higher discount rate and then the pressure on some of those longer duration assets like we've talked a lot about with the tech stocks for example and how thus far the tech stocks have managed to weather this inflation storm. They managed to be the purchase of choice over and above the small caps certainly. But we continue of course to remember that it's not just inflation that affects us inflation affecting the United Kingdom as well. Big number there but it's also geopolitics Russia Ukraine that continues to be the push on oil prices today. And Carol I think we want to weave into that narrative just for a moment. A woman who would have cared greatly about the geopolitics of today and the passing of Madeleine Albright of course something that just took us in the last hour and something to just really focus on a woman who just to rise to that level and the American dream to a certain degree no first woman. Right. As the U.S. secretary of state Tim and I were both reminiscing. One of my most memorable moments of my career was actually interviewing her over in India at a World Economic Forum event. She Czechoslovakia and I'm Czechoslovakia. So it really kind of resonated with my heritage. But she was just incredible in terms of her level headedness and talking about geopolitical events. And certainly I do think you know this is at a time like this. She wanted you would want to know what she has to say about this event. Yeah. Not event but occurrence of events if you will. Well on Bloomberg TV earlier today I looked up and saw pictures of her from years ago with Vladimir Putin. And I think it's really remarkable at this time that we're reflecting on her life with what is happening in the global world right now and what President Biden is going to be focused on when he lands in just a few hours in Europe and spends the next couple of days there bringing us back of course to the current events. Tim as we always do and try to get them further ramifications of that sort of at the top of the hour Carol. We got a lot of headlines about Jake Sullivan and some of further sanctions that maybe were expecting and some of those headlines that will come out in the next few days or so. Look for some more clarity in terms of policy and what the NATO allies will be doing. We will certainly be tracking what President Biden has to say with those allies and following it. All right. Well more to come. In less than an hour's time we'll continue across platform coverage tackling Fed policy. Fed speakers and geopolitical. We will continue to count you down to the closing bell on this Wednesday. And for more market analysis let's welcome Bryce senior portfolio manager at CIT Investment Associates which has about 16 billion dollars in assets under management. Bryce we are curious how you're thinking about the gyrations within the equity markets and some of the buying opportunities with some of the valuations that are more attractive on these pullbacks and how that fits into your long term narrative. Yeah we used to be in the buy the dip camp but we had definitely left that as it relates to the equity market because there's just too much to be headwinds and the volatility is is intense and with good reason. You know there's so many difficulties going on but there are always opportunities. So in time people had this sense that there is nowhere to hide there. There are there are some good things out there we like as an inflation hedge. We like residential apartment rates if you will because rents are just really going to be popping. I mean we're already seeing that across the board. And yeah you mentioned earlier that technology has been kind of a safe haven. I think that in that space where you really want to focus is cyber security because of all the cybersecurity wars that are going to be ongoing for a long time with Russia and China. NASDAQ. So so the ETF hack is you know it's probably going to be kind of a safe haven in this in this world of volatility. There's spiders other objects in this world of volatility. Are you hopeful that the Federal Reserve can usher in a soft landing. Are you on the optimistic side that this volatility will will not dissuade the Federal Reserve from staying the course in tackling inflation. Or what do you think might happen. Was the balancing act for you. Well you know just harking back to your previous segment there is a bond investor I think when you're dealing with the aggressive Fed you're going to need a little cannabis therapy. The it's going to be brutal. They're going to be aggressive and they're not going to be very effective at stopping inflation. So a lot of the inflation pressures have nothing to do with monetary policy such as you know high energy costs and people not going back into the workforce and shipping blockages on the West Coast. None of those types of things are going to be helped by higher rates and a lower balance sheet. You know mortgage rates going up over 4 percent makes makes life more expensive for everyone. So the initial hit is all negative all downside from what the Fed's going to be doing. Now in the longer term you know it's it's it's medicine we need to take. So you just have to be ready for that for the next nine months is going to just be really really bumpy as far as a soft landing go. And I think that's a mirage. That's a that's fantasy. The headwinds facing us in 2023 are going to be the effects of a three trillion dollar fiscal cliff. Higher inflation will persist. And then and then you've got higher taxes coming along with this ongoing energy crisis and persistent inflation. Well first before we even get there aggressive but not effective monetary policy if that's the course. I mean how does that play out particularly in the bond market. I mean does that translate to higher yields or what happens. Inversion. It's a yield curve inversion when the Fed is going to raise rates in spite of their ability to succeed and rein in inflation. You create you know stagflation not necessarily totally but as people ratchet in their growth expectation due to higher rates and all the other headwinds the long end of the curve comes down or at least doesn't go up as fast as the short. But this persistent movement up and fed funds we think they're going to hit 2 percent by November. If we looked like we're in the high end a month ago now it looks like we may be on the low end of expectations but credit spreads are telling you that the economy is OK. That it's I love the confusion about credit spreads and the message that it gives because it it's there's two things going on. The corporate credit curve is always steep because every year of additional maturity there's another year of risk of default. Only the Treasury curve can be flat or invert. So there's always there's going to be this widening between the two. That has nothing to do with credit quality but it gives it gives a signal to people that looks like it's a recession but there won't be a recession in 2020 this year. I mean quality is going to be fantastic. Companies are in pretty decent shape. Believe it or not it won't be till next year. There's a little bit of a problem. But that said spreads will widen this year because the Treasury curve inversion while the corporate curve remains steep. Price is always great to catch up with you with your fixed income perspective on where to put your money in the latest ETF Brad Stone. We thank you so much. Senior portfolio manager at City Investment Associates. They well meanwhile coming up coming down to the closing bell I mean Roland Koch chief investment strategist for John Hancock Investment Management. Plus Wall Street's retreat from Russia. Nearly a dozen lenders have cut back business in the country putting billions of dollars at stake. We discussed in today's Big Take and that brings us to today's triple take. Biden heads to Europe. We discussed this with Christine Benzene a senior fellow and head of geopolitics team over at the German Marshall Fund. You've got Lauren Zebari the Brian CAC executive director of the Cyprus Project at the Harvard Kennedy School as well. This is been. Forty three minutes go until that closing bell. We take a look at the market action and it is a lot of red across the screen near some of the lows of the session you're off about 1 percent on the S & P 500 A Russell 2000. Some of those reflation free trades. Those are off about one and a half percent because you're seeing bond yields actually come in today. You've had some significant re in sort of that re flash dairy trade underway and a little bit of that has reversed today. You're down about five basis points or so on the front end of the curve on that to your guilt. And now you'll do little. I wanted to do this with you because I think it's so interesting. Been talking a lot about the twos tens. But Dupont also been highlighting the three month tenure that's also been sort of on this steepening path. We tie in what this means and dare I say it back to the mean stocks as well. We are just 40 minutes to that closing bell. We get to you up to speed with the day's options trading. Abigail probably not doing options on the yield curve but maybe you'll give me some options on the beams. Well Taylor maybe that 310 curve steepening a little bit. Maybe that's why some traders retail traders have the nerve the courage to go back into the meme stocks because it is name Mania 2.0. Tim big name of Delta derivatives. Thank you so much for joining us today to talk all about these meme stocks. And it's amazing because we've had so much going on this month. The humanitarian crisis the disaster over in Ukraine the most important of course. But from a market standpoint oil commodities stocks bonds such a smokescreen in fact it seems for these mean stocks. Meanwhile one of the main stocks up about 700 percent from its February low. Will this continue. Now we shall see. As always Abigail and I think you know the reaction of the overall market pull its fed which I think caught a lot of the big players by surprise. And I think that kind of got me mania to really motor higher. From there it was already kind of creeping in. But given the fact we're seeing implied volatilities on a lot of these mean names not anywhere near where they were the first time they ran up you know using GameStop which is kind of the poster child for the meme mania we're seeing implied volatilities about half what they were before but still well over 100 EMC the same scene. So I think we might have a little more leaks here but it's certainly looking like the market and the option market is seeing the meme mania may be coming to an end sometime soon. We always know how it ends. We just don't know how high it goes before it comes to that conclusion. Yeah. Or how long this mania could last. You know relative to GameStop you're just talking about of course today came out that Chairman Ryan Cohen increased his stake to eleven point nine percent. And you know he's clearly seen as a tremendous trader as an active activist investor if you will. Do you think that if we see fundamental news on these names that could keep it going. Yeah these stocks fundamentals to be obviously you know the end of the day don't come into play too much. They certainly hope to put an ultimate kind of flaw in the stock when they ultimately have lower but to the upside they just keep going until the shorts are basically out. So valuations even up here are fairly stretched to say at least on these names. And I kind of like just going out using this kind of mania to sell way out of the money in time strangle. So in GameStop I sold the 500 colt and the 50 dollar puts for one in 20 dollars for that trade. So I'd be willing buyer at 30 bucks. We're willing seller up around 5 20 on GameStop. If not I'm getting paid some pretty rich option premium for that. So I think you know me mania is back for now. But as always I think once the market cools down like we're seeing today the main names will probably follow along with it as well. Well that certainly gives you a lot of time and space and just taking a little bit broader. Very quickly Tam do you see in terms of this Senate risk on sentiment. Do you think that it will extend more so to the S & P 500 and the tech indexes. Because of course the Nasdaq 100 into today up 9 percent I believe since that Fed meeting pretty strong. Some of those big tech names participating too. Would you consider taking a look at those names. Yeah I think we're still range bound to further notice. Big range. No train. So using the S & P 500 40 680 upside is kind of the upper end of the range. 40 200 on the downside held a couple of times. So play it in there. Be more of a trader in this market environment. Use rallies to trim out dips to get back in. Sell the reps. Buy the dips but do it within the range. Tim Vega CEO of Dub and Derivatives thank you as always for joining us for Options Insight Taylor. Back to you. And thank you as always. Abigail Doolittle. Let's get a quick check on some of the other business plus headlines and other big stories that we're following at this hour. It was a good year to work on Wall Street. We kind of knew this story right you guys. The average bonus paid to employees in New York securities industry last year. It rose 20 percent to more than two hundred fifty seven thousand dollars. That is according to an analysis by the New York State Comptroller Thomas DiNapoli. The figure was more than the state's projections which should help this city exceed its expected revenue from income taxes. And speaking of the financial services industry UBS Group will allow some of its U.S. employees to work remotely full time. The Swiss bank estimates that about 10 percent of its workers in the U.S. will go from no more than 70 percent will be in hybrid roles. UBS has more than 20000 employees here in the U.S.. And that really sort of brings up a good conversation guys about flexibility. And if that is going to be part of UBS is pitch. You got a hybrid and perhaps maybe in some cases a full time remote as people are sort of rethinking our commitment to the workplace and whether or not indeed some whether Europe has a different tactic on all these things. It is to be the United States where the banking has a different viewpoint. But overall it'll be interesting to see which parts of the business decide to go remote. And then indeed a lot of traders have to be at their desks. But you know I'm married to a man whose company is totally you know apparently has no particular headquarters anymore and seems to work for him. It's the same for my husband. He works from home all day. I see him with the cat. I'm pretty jealous. But it is interesting to see you know UBS sort of used this as a recruiting tool because you know it's been too easy right. Yes exactly. And you have to think that's pretty attractive given that it's been two years. A lot of people have shaped their lives around the fact that they can work from home. Katie I are not allowed to work from home. We would sit at home all day with our cats. I'll tell my boss that we wouldn't get anything done. I love coming to the office. There is a vibe upstairs I have to say. Just running and getting ISE coffee. There is definitely energy back in the office. Meanwhile there is a little less energy when you're looking at the S & P 500 or off by what is it nine tenths percent as we speak. A little more energy in the bond market today. This is back. So all this week we've been talking about sentiment heading perhaps wrong button suddenly for the retail the day trader was starting to see institutional price perhaps start to buy the dip. But when you're looking at the Bank of America retail clients in particular. Well there's a bit of a focus on the selling of the stocks for the first time this year that has been going on. Katie what's happening. The sentiment in retail for us is institutional this moment. Well the data shows that retail investors sold more than 800 million dollars worth of shares last week. That's after they poured almost eight billion dollars since January. So the timing here really terrible because January February were pretty rocky months. But I mean if you look excluding today of course risk assets has been returning and you've seen stocks rebound so massively over the past week or so. And you saw that in the conversations with Jeanie yesterday talked about some of the sentiment in the big bearishness. Virginia had been like well no one's talking about all the bearish is priced in. What does that mean going forward buying the dip at the wrong time for retail. Yeah I mean we'll see if they come back. They have bought the dip very strongly over the past two years. Maybe they'll come back. This is bring back. The most crucial moments in the trading day. This is Bloomberg Markets the close with Caroline Hyde Romaine Bostick Ken Taylor Ray. Counting down to the close. That's 30 minutes to go until the end of trade. Sort of a risk off kind of day. Katie Wright with equities lower and bonds catching a little bit of a bid. Absolutely. And you can really see that at the sector level. If you look right now you can see it's pretty much a sea of red. We do have some bright spots there if we look at energy stocks. Oil is higher. But so the biggest losers today is definitely financials as those yields fall Taylor. And I want to talk about the tech sector as well because you have that near down at the bottom of the screen. What's interesting is Netflix is actually still getting a little bit of some repercussions from some of the news that they had a few days ago about limiting the password sharing in a few of those other countries. Netflix is off about one point seven percent. The latest comes from CAC saying that while the strategy actually is a little bit of a positive here. Shares are still reacting a little bit to the downside. Take a look at video. You're off about two point six percent even though analysts are actually positive on the chip maker after sort of that investor conference where they announced a lot of new products saying that you know what this actually could drive a lot of growth for the company going forward. But again shares are up about two point six percent. Take a look at posh Mark. You want to do a turnaround story Caroline. This stock was off as much as 9 percent earlier this morning turning this around. They had a sort of an outlook guidance coming off of the quarterly reports yesterday. A lot of analysts viewed as weak. But hey this year a rebound in here. And then take a look at Apple of course the big bellwether. Some of the biggest notes I've read this morning Caroline. Dan ISE at was one of them just continuing to say the iPhone 13 demand is just unbelievably strong. And so those shares are up about one and a half percent on the day. I'm going to be the antithesis of a bellwether. I know you're going to do that because I mean shout out to AMC the most actively traded stock on the day currently in terms of volume is saying GameStop as well. Really catching a bit of the last couple of days will seize up more than 35 percent. We're seeing more being written across some of the stock twits some of the Reddit communities going back into this meme stock frenzy. Let us not dwell on fundamentals. Yes. Ron Cohen of course has been buying back a little bit more in terms of increasing a stake in GameStop for all of this. Taylor really interesting in a moment where we feel real retail sentiment is on the downside. Maybe some mean stocks actually catching a bid. But we're going to turn our attention to mean stocks or some other risky equation right. You must've been the one attending the show meeting this high because yes we are going from stocks to curb down. We all know the investment being COWAN. They've now actually started a digital asset unit. It aims to offer institutional clients access to spot cryptocurrency trading. Another step that puts it at the front of Wall Street's push into crypto. Joining us now is Bloomberg's Eugene Young who covers crypto market structure for Bloomberg. And you sat here two days ago with one firm who'd made the big posting. We said who's next. And you said we're still digging and researching. And so it seems at least for now we have an answer. Yes. Now we know that call in today came out and announced that they're starting their digital asset unit and they're actually going to offer to trading off spot crypto currencies. So this is a move unlike others that we've seen before. This is one of the first early push by a traditional Wall Street bank going into the crypto spot space. And they will start with providing the trading of 16 crypto currencies which is a big number. It not only includes the bigger ones such as Bitcoin it's area. They're also offering the trading of the alternative up and coming coins such as so Nana and Unit Swap. Interesting that of course the FCC is still reticent to sign off any ETF that are spot crypto spoke in Bitcoin at least. What is it that gives COWAN comfort here. Is it purely the response to demand from their clients. So Colin told us that they really believe that they have a first mover advantage here. Just being a smaller and more nimble bank compared to other bulge bracket bigger Wall Street banks they believe that they're able to work with their legal and legal department compliance department or regulators in a way that's that gives them a faster way to reach solutions providing cryptocurrency services. And we note that Covid is a boutique bank. So unlike some of the other bigger banks that takes deposit from consumers they are subject to a different set of regulations. So that that might also give them an edge to take advantage of this window of opportunities before the bigger banks moving into the spot crypto space. Well Ben Cohen plan to do with that first mover advantage. What are their ambitions in the broader digital assets space. So their starting was to swap infiltrating the custody of it with under a partnership and then a custody. Yes. Aren't party was poli sci to off to offer the custody of the assets. And that's a unit that has already gotten a trust license approval from the New York Department of Financial Financial Services Department. And going forward this is the more interesting part. They're actually going to offer institutional clients to access to defy and an FTSE IVA. And these are some of the newer and more risky corner of cryptocurrency markets that so far are being mostly dominated by retail traders. But they're going to offer an institutional access to this space. Really appreciate it. You too young of course covering the crypto market structure for us at Bloomberg. We'll jinx it and say in a few days you can come back and tell us who else is next. Does that just continues to come out with some of the news flow. Still ahead we're going to be counting you down to the closing bell. Emily Roland Koch chief investment strategist for Jan Hawk John Hancock Investment Management. She joins us next. This is Bloomberg. 80 minutes until this market closes I'm a little bit of profit taking a little bit of risk aversion on the day S & P 500 Matt Miller percent to get yield for once gets a reprieve. We see yields push lower. We get a little bit of a respite from the selling that was so hard. And some of the bond market the New York crude market though still pushes higher. We still see that inflationary impact coming from the commodity space. Meanwhile talk about inflation. What we saw over the U.K. fed a year high inflation woman 6 percent. And I'm really trying to understand where that pushes where she soon CAC and some of the UK government at the moment. The pound actually coming off as many had factored in not push higher in inflation. How many. Ronan's with US companies. Seiko chief investment strategist for the John Hancock Investment Management. We can go across asset with you Emily. It it's always so good to focus in on what is sentiment like on the market because at the moment we are just getting very used to volatility. Yeah I mean we've certainly seen some capitulation as far as the selloff in equity markets has gone. Nice little bounce here especially last week. The bond markets a little bit of a different picture. You know we always think about these equity market drawdowns as an opportunity to buy the debt. We're having a bear market in bonds. We don't often think about bear markets being in the fixed income market but we've had one of the worst drawdowns that we've had in decades. As far as the aggregate bond index goes and we're still not seeing that capitulation which is prompting people to lean into higher quality bonds we actually think investors are going to want to own them and add to duration as the cycle progresses as we get closer to a recession. But for now continuing to see this almost relentless back up in bond yields to start 2022. Why are valuations then in corporate bonds attractive enough for people to get back in. I think it was Bob Michael Barr. J.P. Morgan finally came out this week and said it's gotten so attractive we can't help but look at maybe even jump to. Why hasn't there been more of a push in. Yeah I mean I think the fear of course is around higher commodity prices which of course is prompting inflationary pressures to continue to build and then a hawkish central banks globally. You know Powell can't seem to even you know he's getting hawkish by the minute by the day. And that's definitely being priced into the bond market. You know I think it's interesting that investors tend to hate bonds you know right before we love them and we're seeing investors really starting to sell fixed income. That's pretty unusual when you look at the flow data for investors not to be you know buying bonds right now. And we look at the yield potential right now as being pretty attractive. You're getting somewhere around 4 5 percent owning corporate bonds. You add in a little high yield bonds there. You're getting closer to 6 percent in particular like the upper rungs of the credit spectrum within high yield bonds. You know a year ago you were getting two to three percent. So we are actually looking opportunistically as this backup in bond yields continues to play out. I mean Roland great to get that initial take with you. Stick around with me coming back to any moment. I mean in close co chief investment officer over at John Hancock she's gonna be sticking with us as we march. Was this closing bell we see 15 minutes until the close of play and then S & P 500 DAX under pressure of bull market pushes higher. Russell 2000 that is your underperformer on the day Taylor. Yeah I do really wonder Caroline. We've done a good job and started putting this into the scope size and scope here for us coming off some of the best weeks that we've had since November of 2020. Sort of a significant rally again yesterday and sort of putting today's selling into perspective. I think the difference here though is the reaction in the bond market and it is a price higher yield lower kind of day and we haven't even gotten to the yield curve. I'm looking at the two cents right now toggling around 20 basis point. I can't wait to get Emily's perspective on what the signal there actually is this time around and is Abigail Doolittle was saying earlier is actually more than three month tenure. Yeah. You know in terms of what the Fed's really looking at which has been on a huge steepening as of late believe it or not. And it's not by means of getting a. That seems to be the strength that she was. Who knew it was only legs and crypto all the time. It says Covid under the close and counting. Hi I'm Taylor Riggs. And I'm Katy Greifeld. Romaine Bostick is off today. She misses a bit of a bounce back that we've been seeing suddenly in the bonds and then pull back in terms of stocks and months again basically moving in lockstep when you have yields pushed lower stocks push lower you previously would seeing yields push higher and stocks to shy. Now the correlation reverses but still seems very much intertwined. When you're looking at the S & P 500 and the US two year yield at the moment and take a look at the VIX Caroline because you're seeing a little bit of the volatility that we're still hovering near some of the low levels really the twenty three on the VIX as you mentioned the 10 year yield that is rally today price higher but nowhere near sort of back the two and a quarter level which was the previous sort of maybe major technical level that we were looking at. And we certainly blew through that in the last few days. And of course the energy sector is a big one I'm following is one thing about some of the big outperformance today with crude touching another 113 or so a barrel. Still with us Emily Roland Koch chief investment strategist for John John Hancock Investment Management. Thank you for sticking with us through these closing bells. How were you thinking about how these equity markets can perform in sort of this tightening cycle when you think about not just tightening but the magnitude and the pace at which we're tightening. Yeah. Taylor I think it's you know obviously a challenging environment. This great pivot that we're seeing from the Fed is clearly impacting send demand and causing some volatility across equity markets and ultimately stock prices for oil profits. And we when we look at next twelve month earnings estimates we continue to see them climb higher. You know six out of the 11 sectors in the S & P 500. Right now we're showing positive earnings revisions for twenty twenty two areas like technology which we've been beaten down pretty significantly this year showing some of the best earnings revisions we've seen in some time. So we do think there are pockets of opportunity here. We do think fundamentals are actually going to matter. I know this has been like a completely you know macro driven market but fundamentals are going to come back into this spot like a spotlight. I think earnings season is going to be incredibly important. I think what investors should do here is really focus on owning quality companies companies with great balance sheets lots of cash on their balance sheet great earnings growth prospects good earnings stability and most importantly the ability to grow organically even as the economic backdrop returns to more modest levels of growth. So we do think equity markets represent a great opportunity particularly here in the U.S.. And Emily something that caught my eye is that in the past week actually since the Fed meeting if you will the financial conditions they actually have eased a little bit in the days since. And I'd love to hear your perspective on whether that might give the Fed a little bit more cover to lean even more hawkish than they've already signaled. Yeah I saw your tweet about that earlier. Katie and I think it's a pretty notable dynamic. The other thing that we're watching closely are high yield bond spreads and they actually have come in over the course of the week from after peaking closer to 400 basis points over treasuries. So those are the types of things that we look for in terms of you know understanding if there's something more sinister brewing underneath the market right now and we're really not getting any major signal of distress there. So that certainly does give the Fed cover. They're absolutely going to be kicking off continuing to raise rates into this environment certainly into the spring maybe into the early summer months. But we do think that the Fed is very cognizant of the fact that the yield curve is flattening. We do anticipate we may see an inversion sometime over the next few months year and we think that that will give the Fed the ability to really kind of slow down potentially pause once we do see that yield curve inversion. OK. Notable that the Fed takes an eye on the fundamentals. From your perspective on the Federal Reserve do very much about inflation. How much are you looking at. Starting to talk about stocks as the inflation hedge. Are they all. Are you looking at investing in energy still. Yeah so we've had some exposure to energy by being overweight the value factor. So that's that's been there for us and hasn't been our favorite sector in the market. You know we have been really focusing though on the U.S. equity market. And again we've seen it come on sale. You know we've seen this big compression in valuations to start the year. And that's really really what it's been about. Again the earnings engine is on but sentiment steers have fed tightening. Geopolitical risks have really causes multiple compression here to start the year. So we think again there's some legs to this market here. Clearly been a challenge but we want to continue to overweight stocks versus bonds. And so the cycle moves closer to late cycle yield curve. Inversions don't mean that you need to hit the panic button right away. It means you got to start positioning more defensively. But typically on average once the yield curve inverts the equity market hasn't peaked to about 10 months later and then four months after that you get the recession. So there is still time. You know averages aren't always great to use but they can serve as a playbook as we navigate this quickly moving fast aging cycle. Got to stay nimble. We're going to stay nimble quickly with Taylor. We'll be back with was Emily Chang in a second patella. Just dig into what you're looking at in terms of some of the stocks of the you know Carolla we've been focusing a lot on some of the U.S. equities as well. But there is a sort of a U.S. listed stock here picked to do oh take a look at this stuff about 5 percent. Earlier it was actually earlier leading some of the Chinese stocks here higher after a UBS upgrade. And know that Carol talks a lot about this in radio. That NASA Golden Dragon Index is now up 50 percent off some of the March 14 lows. So this is certainly talk that we're looking at as we think about the rebound in some of the Chinese equities as well. We flip up the board. And Emily let me bring you back in here. I'm taking a look at a chart of well some of those widening credit spreads certainly on investment grade and a little bit of high yield. But we came back into that as well and know that you touched on this earlier. But I am curious sort of how you're thinking about the fundamentals of some of the credit quality as well as you look at this. Yeah. So it's a great question. We continue to embrace credit here. We like the trip will be part of the corporate bond market. We like double B's within high yield. And the idea being that the economy is still on solid footing. We look at things like the Conference Board's leading economic indicators and we're at around 7 percent year over year growth. That's really really solid. This is an environment in which we could continue to see corporate upgrades. We could see those fallen angels. Those that will be high yield bonds get upgraded as the economic cycle continues here. So that's really the sweet spot for us. We're avoiding the lower rungs of the high yield bond market. We have seen some significant spread widening. I'm sure you have another chart on that and bringing you in areas like triple CS. We don't think that the risk reward is quite there at this point but we want to continue to embrace credit. We like things like floating rate bronze again for this base kind of free yield curve inversion prerecession. It's too early to get overly defensive. We think about the kids in the backseat of the car saying are we there yet. Are we there yet. And I think that's what investors are doing right now. And we're not quite there yet. Credit's OK right now. I mean Roland go and cos I said we thank you. Co chief investment strategist for John Hancock Investment Management. Always great to have you with us. Meanwhile the fallout of Ukraine and Russia remains from a corporate level. We have a Kohl's confirmation that Reno is now indeed looking to suspend manufacturing activities at its Moscow plant. Interesting step after it had been under significant pressure. Meanwhile though we take you to the bell. I'm beyond beyond the bell. Bloomberg's comprehensive cross platform coverage of the U.S. market close starts right now. We are about two minutes away from the end of the trading day. Caroline Hyde Taylor Riggs Katie Greifeld in the house coming down to the closing bell. It's take us beyond that bell. It's our global Simon call cost of course. Carol Massar Tim Stanek as we go cross platform TV radio YouTube to discuss what is while a pullback in sentiment somewhat a pullback in risk on a trade and suddenly a little bit of profit taking. CAC. Yeah it really is. You certainly feel the tone a little bit different than what we've been seeing certainly yesterday. And I think about what Tim said earlier in terms of those bank stocks those financials really taking it on the chin really your broad performer here. If I look at the S & P major industry groups down about one point seven percent to Caroline Hyde just had a great chat with Doug Ramsey the CIO at the Loopholes Group who's really defensive right now and said essentially you know if you're still fully in the market right now it's not too late to pull back because he thinks that the lows that we saw last week could be undercut. Interesting. I guess that's what makes markets. I think we've heard maybe a little bit of a different tone coming from Emily Roland of John Hancock saying that's still the fundamentals look good particularly when you're looking at credit. Certainly liking some of his investment grade names as well as sort of hinting Katie that that inversion of the yield curve if we get it doesn't immediately say panic. Yeah I mean there's two sides to every trade. We're definitely seeing that now. But I think that's a great point on the yield curve that actually the 12 months after inversion they tend to be kind of OK for equities. And of course you have to consider the magnitude of any inversion. Of course we're talking about this now with the twos tends curve about 20 basis points away from that negative territory. I mean Wall wasn't just being led to believe that a three month tenure. That means you by means don't miss it. My job is done now as the technical by factor. Meanwhile we're looking at the S & P 500. Not having a buy signal today went down by fifty five points as those bells ring were off by one and a quarter of a cent on the S & P 500 four thousand four hundred fifty five. We're down to a similar degree one point three percent on the Dow Jones Industrial Average. We're off by 450 points. Let's call it NASDAQ of one hundred eighty six point eight hundred one point three two percent in the downside. Russell 2000 was the underperform of those small caps getting beaten up today. That's something we'll pull out and see how the Russell 2000 fell by one point seven percent. But context is due as of course we have seen in the past week a significant amount of buying in stocks Taylor and Carol and all of us Rhonda one of the lucky one of you her family. Hey listen you know Carolyn you breaking down those major equity averages and we're pretty much on the S & P and Dow NASDAQ finishing at those lows of the session. S & P 500 just a little bit of a further breakdown 413 names in the index lower today. So as Caroline mentioned definitely risk off trade here on the equity side. Only 90 names Taylor gaining some ground. Yeah you certainly see that within the sector level too Carol. Right. Take a look at the sector winners and the sector losers. There's actually only four sectors within the S & P as we dive down about two notches lower that are still in the green. Of course energy continues to be in that trade after another big day for crude markets. Energy is up about one point eight percent. Technology and autos are still up there as well but certainly not getting the big boost. The likes of energy has. Everything else for our radio audience is actually pretty rad and it's pretty red on the screen and take you down to what here has been the big underperformer on the day. It's a lot of the banks now we've talked a lot about today being the yield story kind of day. And then it's tech right. It's semiconductors hardware equipment and software and services. And that sort of Carol has been an interesting theme is when yields have been falling tech traditionally has been some of the big out performer but not today. No. Exactly. All right. So let's get to some of the day's gainers and certainly kick it around a lot. Quite a range here. Does Chinese stocks I mentioned it earlier. We did see a bounce back and they continue to see money pouring into it. One of the big gainers in the Chinese trade those U.S. listed Chinese advisors was PD D up another 4 percent. But at its highs today guys it was up almost 17 percent. But finishing the day with a gain of about 4 percent. So it's been on quite a run here. And vs energy. Taylor talking about energy we continue to see gyrations as that shift potentially will take some time from fossil fuel to others. But those in the solar space continue to get attention and phase energy among them at its highs up almost 5 percent. Finishing the day still though with about a half a percent gain. It's up for seven days in a row. So it's been on quite a run. And a little known company named Apple which was up two and a quarter percent earlier in the session still holding on to a gain of just under 1 percent here. A lot of analysts out talking about expected expectations of signs of robust iPhone 13 demand. So that certainly give a kick to Apple in today's Tracy Alloway. Speaking of Apple we got a headline from Google about something that Apple is certainly keeping an eye on. Google is going to let off developers offer their own billing systems. The Google Play store is beginning a test of outside billing with Spotify. This for years has been an issue for app developers who have kids huge who've complained about Apple and Google's Android system essentially being a gatekeeper and taking a toll when somebody uses enough purchases or subscribes to something through the app store of their respective platforms. I'm watching shares of Apple and after hours not moving much at this point. And we know that's an issue that app developers have complained about for years. The commission what was it. Cut it to 15 percent. But this is huge for the companies like Spotify. This is why you know the epic games have been taking Apple to court. This frustration from app developers that they had to give so much of the cut in purchases. I mean I was interviewing a app developer just the other day. House was all about really the frustration of Apple and how much of a chunk of change they take whenever a purchase is made by the play store or vile app store. Their argument of course Caroline is that they're the ones who are providing access to this customer. Right. And they're of course keeping the app store safe for their customers. But yeah important to watch Spotify in after hours. How about that 2 percent right now and then we'll keep an eye on Apple as well. Hey let's get to some of the decliners that we saw today. Speaking of tech. Talking about Adobe shares finished. They have down by more than 9 percent falling after the company gave an outlook that was seen as disappointing. The company actually referenced stopping sales in Russia in Belarus. Part of the issue and its guidance shares falling nine point three percent. We saw price target cuts of Credit Suisse Deutsche Bank Piper Sandler Barclays and more OK to the digital identity verification company. Shares falling for a second day in a row over this hack. At least two downgrades due to the breach the company did say earlier today. Late yesterday I should say that about 2.5 percent of its customers may have been affected. And in Chris Go Labs the marijuana company finished the down seven point five percent. We interviewed the CEO of the company earlier today on Quicktake. I know you did as well on Bloomberg TV. Charlie back. Tell him you said that businesses are very complementary. And I'm talking about the acquisition to buy Columbia care for about two billion dollars in equity create a multi-state operator in about 17 states. So the biggest a pretty big acquisition when it comes to the marijuana industry. I mean A that we've actually kind of seen on hold a little bit amid this geopolitical tension and market turmoil. Of course geopolitical tensions still very much affecting the commodity space. We go cross asset for our audience. And I look at Brent crude up 5 percent WTI up almost 5 percent. One hundred and fourteen dollars is where we trade at the moment as we see supply side concerns. Once again this is inventories pull back in the United States. That data not looking so pretty. We have concerns about the Black Sea as well and some of the export terminals there. So overall the supply side a headache for oil that pushes it higher steel up more than one point three percent. We see zinc up metals catching a bid. Interestingly overall we do continue to see this inflationary pressure coming from commodities. That feeds into the affects market overall. Aussie dollar up four tenths of a percent and commodity related currency Norwegian crone up eight tenths of a percent as it feeds off the all move notable British pound off by four tenths percent. This is a buy the rumor sell the fact kind of a day for the British pound because this is inflation running hot. Once again gas prices need I say more. The UK seeing a 30 year high and its inflation rate. And that's why of course we start to see the concerns about what we should shoot not what some of the Treasury Department can do to alleviate the stress on the consumer and what really it can do to alleviate any sort of risk of a recession in the UK. I look therefore at a mixed picture in the bond market the United Kingdom the gilt market catching a bit on the 30 year. But overall we sell off in Japan United States. Well Canada for once actually seeing a real pullback in yields on the 30 year bond. Kind of a similar story in the US Taylor. It is as well. Sort of priced higher yield lower as we're going into safety. Again today again Carol I'll keep it quick. I think just sort of what's notable is the last two to three days of yields higher. So that helps put into perspective some of the yield drop that we have today. You're back down to 1 to 10 on the two year and a two twenty nine on the 10 year. And this sort of brings up this theme of what the bond market is telling us about. Is this sort of another big rally in the equity market that we get in the midst of broader bear markets or as you were seen speaking to your earlier guests more just sort of defensive moves that are underway. Well I'm going to say what the two year anniversary right from the Covid drop in terms of markets. And it's really kind of amazing Katie you know the volatility the moves that we've seen in the last two years and yet we are still in a market environment where there are a lot of questions out there a lot of questions big questions about the Federal Reserve in particular. I mean the reason by the dip worked over the past two years was you knew the Fed was there to backstop markets at pretty much any sign of turbulence. That's not the case now. So we're we're headed over the next two years. I mean it's a great question. One hundred percent roughly the S & P 500 has increased since that day. Two years ago the NASDAQ 100 about one hundred and eight percent. We were at twenty to thirty seven on the S & P 500 and we're at 44 56. So a little perspective. All right guys a lot going on. We covered a lot of ground and we're of course waiting for more ground to be covered as President Biden gets to Europe. And we'll be following all of those headlines as well. That's going to do it though for our cross platform coverage on radio TV. And you too. We will see you again. Same time same time. Excuse me same place tomorrow. We look forward to catching up with him and Carol that meanwhile will mark its coverage coming up. Right now we're breaking down the unprecedented losses in the global bond market. We had a reprieve today but it's been a one ride for the last quarter. A painful one. This is Bloomberg. RASCOFF Kind of a day on the markets worst days as much the 11th for S & P 500 we pull back one and a quarter of a percent. The Nasdaq also feeling the pain. Big tech getting a bit of a sell off. Is it profit taking that's going on in the Russell 2000 we felt by one point seven percent. Is it concerns about Russia Ukraine the tensions still building there and indeed what can be achieved in Europe. Has President Biden heads over to Brussels. But we do see the immediate pullback interestingly in borrowing costs in yields. Now remember we have had a phenomenal run. This is the two year up escalating to more than two point one maybe near two point two percent on the two year. Now the technical signals the relative strength index showing this has gone too far too fast in terms of yields. And now we start to see a little bit of buying in the two year. We see a pullback in yields across the board actually in the United States. Still inflation front and center for many. What would the Federal Reserve do about it. That is why we've seen the push up in yields and we still see a pull up in oil. We see this on the back of Russia Ukraine. What will we see in terms of maybe further sanctions at the moment. It's very politically focus on individuals. Will it move to the energy part of the equation. That is what many are worrying about as we see inventory levels pull back in the United States oil pushes higher by 5 percent. Tina. Yeah. Let's take a look. Of course not only at oil but then going back to some of the Treasury movements that we had today global bond markets while they suffered a little bit of this sort of unprecedented losses since peaking last year. We have this great chart earlier showing that the Bloomberg Global Aggregate Index the benchmark for government and corporate debt total returns it's now fallen. Eleven percent from some of the ISE that we had back in January of 2021. And that is the biggest decline from the peak stretching back to about 1990. For more let's bring in Alex Harris our Bloomberg facts and rates reporter. Alex I think what sort of struck me this time around is the broad based drop that we've had in some of our bond total return indices that seem to span investment grade high yield credit leverage loans mortgage backed security. I mean you name it sort of felt like a total bond sell off across the board. Yeah. Taylor I mean but if you think about it it makes perfect sense. You know on two fronts. One you have the inflation front. So you know you're you're just getting less purchasing power and that's going to hit bonds. And then also you have the Federal Reserve pulling back. And that is going to hit mortgage backed securities. That is going to hit credit. That is because because the Fed by nature by design of quantitative easing they've been propping up these markets for four years at this point and by trillions of dollars. And so I think that's also what you're getting this effect of. It's like oh gosh you're getting home you're getting a pullback on all these fronts. And I think it's really just more of an early signal of what's to come that no market is going to be immune from the pain of the Fed raising interest rates and pulling back on its balance sheet when they're ready to do so. And Alex I know you watch the front end of the market very closely. So I have a little bit of a curveball for you because we've been talking about this three month to 10 year yield spread and the fact that that spread is actually steepening while every other curve it feels like starts to flatten. How do you explain that dynamic. You know Katie the interesting thing is I think Peter Boockvar likely securities in New Jersey actually had a really interesting chart. He actually looked broke that curve down to the three month to two years segment and saw it all. All of that movement is really in the front end of that curve. So if you were to break down the three to 10 three month to 10 year curve even more it's really in that three month to your part that you're getting this really really big acceleration and this big steepening. And that's just a reflection of how fast the market has priced in these Fed moves. You know as now we're thinking about meetings where we could see the Federal Reserve raised by you know 50 basis points possibly. I know Jefferies today had updated their call and they think the Fed could go by 50 basis points at May and June meeting. So that's you know 100 basis points of rate hikes in two months. So I think that's really what you're getting is that it's a reflection of how aggressive the Fed is being or the market is being in terms of pricing these interest rate hikes here. Alex we asked of you a lot. But underneath the hood is anything worrying any technicals at play any any issue with just financial conditions at the moment the way in which the market pumping is working there's anything everything going pretty smoothly. These are just dramatic moves. Things are working. You know they're there. We're seeing a little bit of I wouldn't even say it's it's troubling. But in the repo market I think you're seeing a market that is now very very short. And so you're getting a lot of investors that need to go out and borrow things like Treasury bills and two years securities and they aren't really available. And so you're just seeing them get very very expensive which is all pretty normal. But I think you know two weeks ago a week ago we're still talking about conditions on the credit side and everything going on with Russia's invasion of the Ukraine. You know that is sort of tended to stabilize a bit. I think it's because you know there's a recognition that maybe some of that funding or those concerns are more European based. You know any other banks or institutions that needed funding have come in and got that on a generic basis. So really I think things are working. It's just everything is just so out of proportion because I think that depth and market liquidity in the Treasury market just isn't what it used to be. And so that's what we're reeling from. Really appreciate it. Alex Harris there are Bloomberg Markets and rates for our keeping our eyes on the bond markets keeping our eyes on some geopolitical events as well. We'll do that next. From New York this is Bloomberg. The world is remembering Dr. Madeleine Albright today her final op ed slammed Russia's President Vladimir Putin for making a historic mistake by invading Ukraine. She said quote Putin is sure that Americans miserable his cynicism and his lust for power and that in a world where everyone lies he is under no obligation to tell the truth because he believes that the United States dominates its own region by force. He thinks Russia has the same right. Those of course some of the last words that we were hearing from Dr. Madeleine Albright. Joining us now of course to discuss her legacy her memories some of her achievements. Secretary Leon Panetta of course of the Panetta Institute for Public Policy. He served as President Obama's secretary of defense and director of the CIA and was President Clinton's chief of staff. Thank you for joining us. We were reading her words from some of the last op ed that she wrote there just about a month ago for The New York Times. As you think about her legacy as secretary of state the NATO summit she visited the U.N. ambassador. How do you think about sort of where we are now at this moment in some of the accomplishments as well from Dr. Madeleine Albright. Well it's a it's a sad moment because Madeleine Albright was I think. Not only a patriot but she was a tough dedicated public servant who believed deeply in what our democracy was all about. After all she was born in Prague Czechoslovakia and she was raised to understand what communism was about and what the threat from Russia was all about. And so deep down Madeleine was without question a Cold War warrior who really believed that it was important for the United States to stand up to Russia. And during the time that she was secretary of state during the time that she served she was very interested in trying to move NATO actually eastward because she believed that the NATO alliance would be critical to efforts to confront Russia. So if you look at events today Madeleine was ahead of her time. Secretary Panetta as we of course understand that President Biden is indeed landing in Brussels as we speak. And about to head to the NATO summit that's going to begin. Belgium prime minister as well expected to meet President Biden at the airport in just a few minutes. We wonder therefore what you make what the United States's role is in all of this. Can we have a more coordinated NATO. Can we alleviate some of the division that is currently present between Eastern Europe between what certain countries want when it comes to maybe energy sanctions upon Russia Visa V what Germany wants as well. Well it's absolutely essential to ultimately what happens in Ukraine. I think the United States having put together this very strong alliance now NATO nations and that was not an easy task. And I give a lot of credit to President Biden for really working it and building the kind of unity that was important because you needed that unity not only to implement the sanctions that are impacting on the Russian economy and squeezing Russia but for the weapons that were being provided to the Ukraine by the United States. And our allies have all been providing very important weapons systems to the Ukrainians and to carry on the battle against Russia. And they've done it in a brave and courageous way. And lastly to be able to reinforce our position in NATO. We've deployed troops. Others have deployed troops. They're probably going to add additional troops as a result of the Brussels meeting. I think it's very critical right now for the United States and our allies to not only be unified but to be tough in confronting Russia in what they're doing in Ukraine. And secretary sticking with Ukraine and what we're seeing unfold there. And in light of the secretary's works do you think that this will find a diplomatic end. Well you know I think we've just seen the end of phase one. It's been 30 days since the Russians invaded Ukraine. Obviously they thought within a few days they take the capital and that Russia would be in charge of the country. That did not happen. So this first phase basically represented a failed effort by Russia in terms of their invasion. The second phase is probably going to be a siege kind of siege warfare approach where they're going to use a lot of artillery a lot of missiles to basically. Implement wanton destruction in Ukraine and killing a lot of innocent men women and children that I think is going to lead to one of two directions either a prolonged war that will ultimately turn into an insurgency or it can lead to a negotiated off ramp for the Russians. Obviously my hope is that by putting Putin in the corner he's in now that ultimately hit he'll decide in order to save his own neck in Russia that he's going to have to find a negotiated settlement in Ukraine. That's my prayer. How do you think about further risks on the horizon of course. Looking through some of the achievements of Madeleine Albright you take a look at how is she at one point was some of the highest ever Western diplomat to go to North Korea at that time meeting with Kim Jong il the leader there of that communist country when the tumultuous time that we're in now some of the worries has been pushing Russia further away from us and closer to China. How do you think about some of the other risks stemming from this. Well you know Madeline. Really understood the importance of strength. And really believe that the United States had to be tough. I mean she was she was someone who advocated are going into Kosovo. And she was very strong about supporting not only NATO but making sure that we were doing everything necessary to basically confront Russia as somebody was born in Czechoslovakia. She understood what Russia was all about. I think we need to take lessons from her that this is a moment where we have to be tough in dealing with Putin. Putin understands force. And the more Ukrainians can fight. In Ukraine the more Putin loses. So right now is a moment when we are really going to have to stand tough stand strong provide the weapons that are necessary to Ukrainians and continue the pressure on Putin because that's the only way we're going to ultimately be able to achieve the protection of a democracy in Ukraine. Really appreciate your time and perspective particularly on days like today. Former Secretary of Defense Leon Panetta. Really appreciate it. Caroline that sort of moves us nicely into some of the next 30 minutes in this deep dive as you think about sort of the unification of NATO. Think about the legacy Madeleine Albright helping to sort of get that under way and then the continuation of that as you have the president there of course in Brussels. She of course came from what at a time Czechoslovakia. She fled after the war an immigrant in June United States someone who understands that the emotion the cultural expectation of Eastern Europe and how effective that for NATO potentially can be whether or not it's inherently NATO's growth that has pushed Russia to where it is. And I'm really now what some of the diplomatic efforts could be at play how Biden brings that and unifies NATO in its current environment. Absolutely. I mean the stakes are so high right now. And it's I'm really grateful that we had a chance to hear Secretary Panetta perspective on what exactly the U.S. needs to do here needs to be strong. That does it for Bloomberg Markets. The close coverage stays with us. We're triple take coming up next. This is Bloomberg.

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Bloomberg Markets: The Close (3/23/2022)

Caroline Hyde, Taylor Riggs & Katie Greifeld bring you the latest news and analysis leading up to the final minutes and seconds before the closing bell on Wall Street and tackles the plan for new Russian sanctions, the current TV media landscape and the impact of Madeleine Albright Guests Today: Ben Emons of Medley Global Advisors, Chris Brigati of Valley National Bank, Byron Allen of Allen Media Group, Bryce Doty of Sit Investment Associates, Emily Roland of John Hancock Investment Management, Secretary Leon Panetta. (Source: Bloomberg)

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