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00:00KAILEY EUROPEAN EQUITY MARKETS RISK APPETITES STALLING A BIT GLOBALLY. KAILEY: NOT NECESSARILY TRUE IN ASIA OVERNIGHT WHERE YOU HAD MOST STOCKS HIGHER. THE MSCI ASIA PACIFIC INDEX HIGHER FOR THE FOURTH DAY IN A ROW ON THE LONGEST WINNING STREAK BACK TO EARLY FEBRUARY. THERE WAS ONE MARKET IN PARTICULAR THAT SAT THAT OUT, AND THAT WAS THE CSI 300 IN CHINA. YOU HAD STOCKS HIGHER IN JAPAN AND HONG KONG. WHAT IS INTERESTING IS YOU HAD THE CHIEF -- THE ECONOMIC CHIEF IN CHINA MEETING WITH BIG TECH COMPANIES TALKING ABOUT SUPPORT FOR COMPANIES IN THE DIGITAL ECONOMY. THE QUESTION IS WHETHER OR NOT INVESTORS BY THE IDEA CHINA WILL DO THAT AND WHAT DIFFERENCE WILL IT MAKE IN AN ECONOMY THAT IS SLOWING IN THE FACE OF COVID ZERO? WE SAW THAT REFLECTED IN TENCENT RESULTS THAT CAME OUT AFTER THE ASIAN CLOSE THAT SHOWED THE SLOWEST REVENUE GROWTH SINCE 2004, SHOWING THE IMPACT OF THE TECHNOLOGY CRACKDOWN IN CHINA. I WOULD POINT OUT THAT THE JAPANESE YEN IS THE OUTPERFORMER IN ASIA AS WELL AS G10, THE ONLY G10 CURRENCIES STRONGER AGAINST THE DOLLAR, STRONGER BY ABOUT .1%. KRITI: LOOKING AT GREEN ON THE SCREEN IN ASIA. SEEING THE OPPOSITE FOR THE S & P 500. DOWN .4%. THIS IS IMPORTANT BECAUSE IT COMES OFF THE BACK OF THE 2% RALLY. PARING BACK SOME OF THE MONSTROUS GAINS WE SAW YESTERDAY. THE 10 YEAR YIELD IS DOWN TWO BASIS POINTS. NOT THAT MUCH REMOVED GIVEN THE VOLATILITY WE HAVE SEEN THEM IN THE LAST WEEKS AND MONTHS. IT IS IMPORTANT TO TALK ABOUT WHAT KIND OF MOOD THE ENVIRONMENT IS. CRUDE HIGHER, 1.14 -- 14 ON NYMEX CRUDE STATESIDE. RIGHT NOW BITCOIN IS DOWN .8%. THE VOLATILITY IS USUALLY ABOUT 4% IN ONE DIRECTION OR THE OTHER. .8% MOVED TO THE DOWNSIDE IS NOT THAT VOLATILE IT DOES SEEM LIKE WE ARE HEADED TOWARDS A RISK OFF DAY. ANNA: IN EUROPE I HAVE NOTHING TO TELL YOU. WE ARE PRETTY GRAY ACROSS THE MAP. EITHER SIDE OF THE FLATLINE ON THE GERMAN MARKET, THE FRENCH MARKET, THE FRENCH MARKET COME AND THE U.K. MARKET. WE ARE EVENLY SPLIT IN TERMS OF SECTOR PERFORMANCE. TECHNOLOGY IS ONE SECTOR. ENERGY STOCKS ARE MOVING HIGHER. OIL GIANTS A LITTLE HIGHER IN THE EUROPEAN TRADING DAY. ONE THING THAT HAS BEEN ANYTHING BUT BORING IS THE INFLATION STORY IN EUROPE. WE GOT EUROZONE INFLATION DATA A MOMENT AGO, CAME IN PRETTY MUCH AS EXPECTED. THIS IS WHERE WE ARE ON THE POUND. DOWN .9%. A HIGH INFLATION PRINT BY RECENT HISTORY. IT WAS NOT THE 9.1% THAT HAD BEEN TABLED BY ECONOMISTS. YESTERDAY WE SPENT A LOT OF OUR TIME REPRICING IN HIKES FROM THE BANK OF ENGLAND. TODAY WE ARE RETHINKING THAT A LITTLE BIT AND WE SEE THE POUND DOWN .9%. THE FIVE YEAR YIELD IN RUSSIA. BECAUSE OF PLANS BY THE BIDEN ADMINISTRATION TO STOP THE RUSSIANS FROM PAYING THEIR DOLLAR DOMINATED DEBT IN DOLLARS, AND AS A RESULT WE HAVE SEEN A SPIKE UP IN YIELDS. ENERGY BUSINESS IN SPAIN UP. IT HAS BEEN STRUGGLING A BIT, DEBATE SHAREHOLDER HAS DECIDED THEY MAY TAKE OWNERSHIP WITH THE BIG CASH OFFER AND DELIST THIS BUSINESS. THE TRAVEL BUSINESS OWES THE GERMAN GOVERNMENT QUITE A BIT OF MONEY. THEY DECIDED TO ISSUE SHARES TO PAY BACK THE GERMAN GOVERNMENT AND THE STOCK -- AND THE STOCK TRADING DOWN 11.4%. LONG COVID DEMONSTRATED IN THE MARKET. KAILEY: AS FOR WHAT ELSE IS AHEAD ON THIS WEDNESDAY, G7 FINANCE MINISTERS AND CENTRAL BANKERS WILL BEGIN A MEETING IN GERMANY. TARGET REPORTING ITS EARNINGS RESULTS BEFORE THE BELL IN NEW YORK. INTERESTING TO SEE WHAT KIND OF INFLATIONARY PRESSURE THAT COMPANY IS DEALING WITH AFTER DISMAL RESULTS FROM WALMART YESTERDAY. IT IS ONE OF THE BUSIEST VOTING DAYS OF THE U.S. 2022 ELECTION WITH PRIMARIES IN IDAHO, KENTUCKY, NORTH CAROLINA, OREGON COME IN PENNSYLVANIA. KRITI: HAWKISH REMARKS BY JEROME POWELL WHO SAID THE FED WILL KEEP RAISING INTEREST RATES UNTIL THERE IS CLEAR AND CONVINCING EVIDENCE INFLATION IS IN RETREAT. POWELL SPOKE DURING A WALL STREET JOURNAL EVENT YESTERDAY. > > INFLATION IS COMING DOWN. WE WILL BE WATCHING FOR THAT. IF THAT INVOLVES MOVING PAST BROADLY UNDERSTOOD LEVELS OF NEUTRAL, WE WILL NOT HESITATE AT ALL TO DO THAT. HONESTLY WE WILL GO UNTIL WE FEEL WE ARE AT A PLACE WHERE WE CAN SAY YES, FINANCIAL CONDITIONS ARE IN AN APPROPRIATE PLACE, WE SEE INFLATION COMING DOWN. KRITI: LET'S GET MORE WITH BLOOMBERG'S DANI BURGER. HOW SIGNIFICANT WERE THE COMMENTS? DANI: WE KNEW HE WAS HAWKISH. ONE OF THE THINGS I FOUND INTERESTING WAS HIS ENDORSEMENT OF THE MARKET PRICING IN THAT HAWKISH NEST. HE MENTIONED THE TWO YEAR YIELD. ON HIS COMMENTS WE SAW THE TWO YEAR YIELD RISE 13 BASIS POINTS. HE ALSO TALKED ABOUT THE FACT THEY ARE NOT JUST HITTING AND HOLDING. THEY WILL NOT WAIT TO SEE WHETHER SOME OF THE SUPPLY-SIDE CONSTRAINTS START TO EASE. THEY WILL DO WHAT THEY CAN AND THAT MEANS DEMAND. THAT IS WHITE IS NOT SURPRISING WHEN JAY POWELL WAS ASKED ARE YOU CONCERNED ABOUT THE TURMOIL IN THE MARKETS. IT ALL GOES TOWARDS THE GOAL OF TIGHTENING FINANCIAL CONDITIONS. FINANCIAL CONDITIONS HAVE BEEN TIGHTENING. THEY HAVE A WAY TO GO TO MEET THE TARGET, BUT I THINK THIS TERMINAL, IT IS THE BLOOMBERG U.S. FINANCIAL CONDITIONS INDEX, YOU HAVE TO PULL UP EVERYTHING BECAUSE THIS SETS THE BACKDROP FOR THE CURRENT POLICY BACKGROUND. ANNA: IN EUROPE WE HAVE HAD U.K. INFLATION DATA. LAST TIME WE HAD INFLATION THIS HIGH I WAS EIGHT YEARS OLD. DO NOT REMEMBER HOW THAT FELT. 9% IS THE U.K. NUMBER. DANI: I PROBABLY SHOULD NOT TELL YOU WHERE I WAS AT THAT MOMENT BECAUSE I MAY OR MAY NOT HAVE BEEN ALIVE. 9%, FIVE TIMES HIGHER THAN THE BANK OF ENGLAND TARGET. JUST YESTERDAY WE HAD THE TIGHT LABOR MARKET DATA, THE LOWEST UNEMPLOYMENT IN HALF A CENTURY. IT MEANS THEY HAVE TO DO MORE. WE SHOULD ACT MORE FORCEFULLY TO CREATE MORE SLACK IN THE ECONOMY GIVEN THE INFLATION NUMBERS. IT IS ALSO INTERESTING THAT GIVEN ALL OF THAT, MARKET REACTION WAS ONE OF SENDING THE POUND WEAKER. IT WAS ALSO ONE OF PRICING OUT RATE HIKES. THE POUND DOWN NEARLY 1%. IT SHOWS THE MARKETS DISBELIEF THE BANK OF ENGLAND CAN HANDLE THIS. THIS IS A MARKET TRADING LIKE IT IS PREPARING FOR STAGFLATION. ANNA: BLOOMBERG'S DANI BURGER WITH THE LATEST ON THE BROAD MARKET THINKING ON THE U.K. STORY. SWEDEN AND FINLAND SUBMITTED THEIR APPLICATIONS TO JOIN NATO, MARKING THE START OF A FORMAL PROCESS THAT WILL FORTIFY EUROPE'S DEFENSES AND MAKE IT MORE SECURE IN THE FACE OF RUSSIAN THREATS TO THE REGION. THE U.N. SECRETARY GENERAL SPOKE EARLIER. > > I WARMLY WELCOMED THE REQUEST BY FINLAND AND SWEDEN TO JOIN NATO. YOU ARE OUR CLOSEST PARTNERS IN YOUR MEMBERSHIP IN NATO WOULD INCREASE OUR SHARED SECURITY. ANNA: BLOOMBERG'S NATO REPORTER NATALIA JOINS US NOW FROM BRUSSELS. WHAT IS HAPPENING NOW THAT SWEDEN AND FINLAND SUBMITTED THEIR BID? NATALIA: THE NEXT STEP IS FOR NUMBER -- IS FOR NATO MEMBERS TO ACCEPT THE APPLICATION. MEMBERS ARE MEETING AT THE MOMENT BUT IT IS UNCLEAR IF THERE WILL BE SUCH A STATEMENT BECAUSE ALL 30 HAVE TO AGREE THAT THIS WAS ALWAYS SEEN AS A FORMALITY, BUT NOW THAT TURKEY HAS VOICED LAST-MINUTE CONCERNS IT IS UNCLEAR HOW MUCH THAT WILL BE DELAYED. KRITI: CAN YOU EXPLAIN TO OUR AUDIENCE WHY TURKEY IS BLOCKING THIS? NATALIA: IN THE RUN-UP TO THESE EXPECTED BIDS, THE FOCUS HAD ALWAYS BEEN ON RUSSIA'S REACTION. ALLIES HAD SAID EVERYONE WOULD BE ON BOARD. NOW TURKEY SAID SWEDEN AND FINLAND WERE SUPPORTING KURDISH MILITANTS AND IT IS UNACCEPTABLE THE COUNTRIES HAVE RESTRICTIONS IN PLACE ON WEAPONS EXPORTS TO TURKEY. NATO TRIED TO PLAY DOWN THE ISSUE, SAYING THEY WERE CONFIDENT IT WOULD BE RESOLVED. THE CONCERN IS IF THEY BLOCK, IT WOULD BE A MAJOR VICTORY FOR VLADIMIR PUTIN WHO HAS BEEN CALLING AGAINST FURTHER NATO ENLARGEMENT. EVEN IF THERE IS A STATEMENT TODAY IN TURKEY ALLOWS THE PROCESS TO START, THE CO.'S IT DOWN THE LINE. KRITI: NATALIA IN BRUSSELS, THANK YOU FOR JOINING US. THE U.S. LOOKS TO REDUCE NEW DELHI'S DEPENDENCE ON RUSSIAN ARMS. THE PACKAGE COULD INCLUDE FINANCING OF AS MUCH AS HALF BILLION. MEANWHILE THE BIDEN ADMINISTRATION IS EXPECTED TO BRING RUSSIA CLOSER TO THE BRINK OF DEFAULT. ANNMARIE HORDERN JOINS US NOW FROM D.C. SO MUCH TO DIGEST. GIVE US THE LATEST FROM THE CAPITAL. ANNMARIE: IF TREASURY DOES GO AHEAD AND NOT ALLOW THIS WAIVER TO CONTINUE AND ALLOW IT TO ELAPSE, IT BRINGS RUSSIA CLOSER IN THE DATA SAGA TO ACTUALLY DEFAULTING ON ITS DEBT. THERE IS SOMEONE IN THE TREASURY WHO SAYS THEY'VE NOT MADE A FINAL DECISION. THERE WAS A LOT OF DEBATE ABOUT WHETHER YOU CONTINUE TO AROUND -- CONTINUE TO ALLOW PRESSURE TO DRAW DOWN THEIR MONEY. IF YOU PUSH THEM INTO DEFAULT THAT WILL BE CATASTROPHIC FOR RUSSIA'S ECONOMY. THE FINANCE MINISTER MAINTAINED THEY CAN PAY OFF THEIR DEBT, BUT DOING SO USING RUBLES, SO THERE DOES SEEM TO BE A BIT OF QUESTIONS AS WHAT COUNTS AS A DEFAULT. WE DO KNOW THE TREASURY IS EXPECTED TO LET THIS TEMPORARY EXEMPTION LAPSE, AND THAT MEANS IT WILL BE MUCH MORE COMPLICATED FOR RUSSIA WHEN IT COMES TO PAYING THEIR DEBT. KAILEY: MEANWHILE, LET'S FOCUS ON DOMESTIC POLITICS. TODAY'S THE DAY AFTER A BIG PRIMARY TUESDAY IN WHICH WE SAW PRIMARIES IN A NUMBER OF STATES INCLUDING PENNSYLVANIA WHERE IT IS TOO CLOSE TO POP THAT REPUBLICAN PRIMARY. WHAT ARE WE LEARNING ABOUT THE POWER OR THE LACK THEREOF OF A TRUMP ENDORSEMENT? ANNMARIE: IF YOU LOOK AT THE MAP, A TON OF PRIMARIES LAST NIGHT. PENNSYLVANIA IS WHERE IT HAS BECOME VERY DRAMATIC. WE DO NOT KNOW ABOUT TRUMP'S HOLDING PENNSYLVANIA BUT ACROSS THE MAP YOU CAN SEE SOME OF HIS GRIP IS WAVERING. SOME OF HIS FITBITS -- SOME OF HIS CANDIDATES WON AND OTHERS DID NOT. IT BECAME OF LAST-MINUTE A THREE WAY HEAT. NOW IT IS RAZOR THIN BETWEEN FORMER HEDGE FUND MANAGER DAVID MCCORMICK AND MEN THAT AWES -- AND DR. OZ, THE ONE BACKED BY PRESIDENT TRUMP. IF YOU LOOK AT THE MAKEUP OF DAVID MCCORMICK STEAM, A LOT OF X TRUMP EMPLOYEES. WE KNOW IT IS SO RAZOR THIN, BOTH OF THE CANDIDATES DID COME OUT AND SAY IT IS TOO CLOSE TO CALL, WE WILL HAVE TO GIVE IT SOME TIME. THIS IS AN IMPORTANT RACE. PEOPLE ARE NOT JUST FOCUSED ON PENNSYLVANIA BECAUSE OF THE DRAMA BEHIND IT, BUT ANALYSTS ARE SAYING DEMOCRATS ARE POISED TO LOSE THE HOUSE. THIS IS A MOMENT, THE SEAT WILL BE REPLACING A SENATE SEAT FROM A REPUBLICAN SENATOR. POTENTIALLY DEMOCRATS THINK THEY CAN MAINTAIN CONTROL OF THE SENATE. THIS IS A KEY SEAT. VERY DIFFERENT IDEOLOGIES IN THE REPUBLICAN PARTY AND IT IS RAZOR THIN. KAILEY: IN NOVEMBER IS DRAWING EVER CLOSER. THANKS TO ANNMARIE HORDERN IN WASHINGTON. NOW LET'S GET BACK TO THE MARKETS AND LOOK AT TWITTER. IT'S BOARD SAYS IT PLANS TO ENFORCE ELON MUSK $44 BILLION BID. THEY ARE TRYING TO INJECT CLARITY IN THE SITUATION AS TRADERS BET ON ELON MUSK WALKING AWAY FROM THE DEAL. WE SPOKE TO NATOSHA LAM YESTERDAY. > > I THINK TWITTER HAS SO MANY CHALLENGES, WHICH IS WHY YOU HAVE SEEN CEOS COME AND GO, MOVE AROUND, WHY YOU ARE SEEING WHAT IS HAPPENING WITH ELON MUSK RIGHT NOW. RIGHT NOW I FEEL LIKE ELON MUSK IS A CAP PLAYING WITH A BALL OF STRING -- IS A CAT PLAYING WITH A BALL OF STRING. KAILEY: I LOVE THAT SIMILE. LET'S LOOK AT HOW TWITTER IS TRADING, SUBSTANTIALLY BELOW ELON MUSK'S OFFER PRICE OF $54 A SHARE. RIGHT NOW $38 PER SHARE. ANOTHER STOCK TO KEEP AN EYE ON IS ONE OF THE BIG MOVERS OF YESTERDAY, WALMART. AFTER IT CUT ITS PROFIT FORECAST DUE TO INFLATIONARY PRESSURES THE STOCK HAD ITS WORST DAY SINCE 1999 IN THE TUESDAY SESSION. THIS MORNING NO REBOUND TO BE SEEN. IT IS A BIG PLUNGE TO THE DOWNSIDE -- BOTH ITS QUARTERLY RESULTS AND FORECASTS MISSED EXPECTATIONS.

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First Look With Surveillance: Fastest Inflation, Twitter

Anna Edwards, Kriti Gupta and Kailey Leinz take you through what to watch today. (Source: Bloomberg)

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