Bloomberg Markets Full Show (11/26/2021)

Bloomberg Markets Full Show (11/26/2021)

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From the financial centers of the world. This is Bloomberg Markets with Alix Steel and Guy Johnson. Friday the twenty sixth of November with 30 minutes into a shortened Wall Street session. What do you need to know. Stocks certainly under pressure. They're sliding. Investors rocked by news of a new virus variants that have multiple notations that might make it more deadly than Delta. Banks energy travel only. The selling rates are also repricing as traders push out potential hikes in the Fed and the Bank of England. The dollar is down. Crypto also being caught up in the selling bitcoin down circuit 20 percent now from its recent highs. From London I'm Guy

Johnson my co-host today in New York. Kailey Leinz Alix Steel is off today. Welcome everybody to Bloomberg Markets. Kylie's putting in something of a shift today. You may have seen it. If you were up early first thing this morning Covid how many hours she's been on Abbott Kailey Leinz the. So far the market is shooting first and asking questions later. Absolutely. You're

seeing the knee jerk reaction today. Guy was supposed to be an easy day Black Friday. You just talk about shopping. You know everybody still relax from Thanksgiving. That is definitely not the case. Unfortunately for me and fortunately for those invested in risk assets because it has turned into a decisively red Friday the S&P 500 right now is down one point seventy four percent were at forty six 19. And within the S&P 500 of course certain sectors getting hit harder especially the travel complexes. We see restrictions coming into play from South Africa and its neighboring countries to places like the UK. So as a result the S&P 500 Airlines index is down 8 percent at this point. You are seeing some really dramatic action in the bond market as well. A rerating of expectations for the Federal Reserve. That

first rate hike now pushed out into September and you're seeing not showing up in the short end of the curve. The two year yield coming in 13 basis points. We are south of 51 basis points in of course it's showing up in oil as well. A lot of concern about what those travel restrictions may do to demand. And as a result WTI crude down the better part of 8 percent. We are trading at 70 to 27 a barrel guy. I don't see a 1 percent move for the S&P since the beginning of October. That has certainly changed today. Kelly within the last few minutes the European Center for Disease Prevention and

Control calling the new strain quote a variant of concern. This is people across the world are reading the headlines of this variant that are spread from South Africa Botswana up into Europe. We've got cases in Belgium now one case in Belgium. Now the World Health Organization saying they now need to get to work and quickly. It will take a few weeks for us to understand what impact this ride has. Researchers are working to understand more about the mutations and what they potentially mean for how transmissible or viral and this the rind is and how they may impact diagnostics therapeutics and vaccines. We're joined now by Sam Zell Miller Bloomberg Intelligence. Sam

we talked about this yesterday and you gave me the number of mutations that are on the spike protein of this new variants a huge number. But what we don't know yet is what are the implications of those mutations. The WHCA thinks it could be a few weeks before we start to get that information. How quickly do you think we could learn about this. Because at the moment the world is panicking. Hi guy. So I think you have to think about it this way that

we've had several variants already but we've studied their mutations in what areas of the life protein they occur and what that means for vaccine neutralization antibody neutralization. So based on those not that knowledge you can try and estimate or get a feel for how immune evasive this new variant would be. And from that perspective it could be at least as bad as Beta or mew possibly worse because there's even more mutations as you said. And in terms of trying to understand when we get the data.

Remember what we have to do is to grow up the virus or create a virus that looks like it and then test our antibodies and the blood's from vaccinated people. That just takes time. Sam in terms of transmissibility and then also how severe of the disease it causes which of those is the more important information to get first. And both are important obviously. But the first one I think that we get. In fact I think we'll get an answer to both questions relatively soon. It just takes a lot more data points for you to be able to be sure. And faster transmission is not easy to calculate. What we already know that Delta is is a monster when it comes to transmission. And I think that you'll find that as the days go by and we can see that this is this virus is competing or not in different regions we just can't rely on one region such as just South Africa because there's other elements in here. And then in terms of severe disease we have enough

cases to find out whether there's an increase in disease severity or numbers of people who have severe disease. This unfortunately is going to take a lot of time. Sam we've got a case in Belgium. Somebody arrived there a female arrived there with this new variant. The U.K. is saying at the moment it hasn't sequenced any of the new variants. Would you expect though that this is already in Europe that this is already starting or will start to make its presence felt. We're putting travel restrictions on. But do you think we're closing the stable door after the horse has bolted.

I think there's probably that's likely to be the case Sky as we have seen several times over now. There is no variance that it hasn't escaped anywhere. If it's able to do in terms of competing with Delta but Delta Kunming squashed and crushed everything else. So if we had had introductions of the new variant into the UK or the beta variant in the UK they just

haven't had the opportunity to take over here. We will see whether this is able to compete with Delta. It is. I think you'll probably start fighting to get everybody. It's a given that the first sequence came out on the 11th of November. There's been a lot of airplanes coming in and out of Africa and whatever else device has got to. And of course we have to be very careful not to label this from a regional perspective. This virus comes and the very variants arise anywhere. So we have to be respectful of that. Obviously Europe is already in the midst of a valley delta serves. Parts of the US are as well. If someone had to breakthrough Delta variant infection would they in theory have enough immunity from that

that they wouldn't be infected by another variant. Is there a way to know that. Wouldn't I love to know the answer to that question because I have Delta and I have had a vaccination before. There is data. Unfortunately it's not the right as the answer you're probably looking for. There is data that suggests that if you were

infected with Alpha or the Delta variant your immune response is not very good at neutralizing the beta area. So that if this new virus is a variant is similar to any behavior to the beta variant then it's possible that those infected with Alpha or Delta that that immunity will not be that great. That was just one paper that I saw. And we have to obviously take that with a pinch of salt. It always feels like there's more questions than answers with this thing. But Sam physically you always have good answers for us. Thank you so much. Joining us from Bloomberg Intelligence and House asked for how all of this translates into the market. Fears are growing now that this new virus strain may spread more globally. And money markets are now offloading bets on central bank interest rate hikes in a hurry. Traders pushing back the timing of the first 25 basis point rate increase for

the Fed to September from June. Joining us now with that part of the story is Limbering Intelligence is chief U.S. interest rate strategist IRA Jersey. So IRA what do you make of this very decisive move today. Yes it is. So. We have moved back. We still are pricing for most of a July hike. So even though the first full hike is in price still September we're still price for July. I think importantly and one of the things that the market's really looking at here is how how additional lockdowns might affect the global economy broadly and inflation in particular. So when you look at the inflation swaps market. So what the market's pricing for inflation over the next year we've come down a full quarter of a percent in

inflation expectations for the next year and that may come down further if we do get significantly more lockdowns. And that's going to be especially hard on some of the services sectors like leisure and hospitality where you've just started to see significant improvement. Now that improvement may be you know may be lacking and that's going to just bring down inflation expectations even further. IRA how much of what we're seeing today in the rates market is

just a reaction to the big move we're seeing in oil. Well that's non-trivial for sure. But I think all of these things can't be can't be on combined rates. So there the fact that you're going to have lockdown just means you have people driving less. That means that you have you know less air traffic. You know all of

these things have an effect on oil prices. And certainly that has then a knock on effect on things like link or break evens which have come down a lot. But even the nominal moves. So when you look at just where you know 10 year treasuries or where 10 year German yields have gone over the last couple of last couple of hours you are looking at a general risk off environment. Right. Which which is not a huge shock given that the stock market's down over one and a half percent right now. And in terms of the S&P. So so yeah it's all it's all a combined move. And I would expect you know even policymakers for example to get

a little bit more dovish next week. But what are they going to do. Right. It's not like the Federal Reserve is going to turn around and stop tapering their asset purchases but they might not accelerate them. Right. Which is slightly more hawkish tilt compared to the minutes that we only had 48 hours ago. Right. So I think that this can change a lot of the narratives that you've

been hearing about in the markets. Those minutes feel like they were a month ago IRA. Of course we have to consider that it is Black Friday. It's a shortened trading day today. Liquidity is a factor. What is your best guess on how Monday goes yields to the upper downside. Well obviously we don't know what the headlines are going to be over the weekend about the variant and about the government reaction to them. But but I would expect for it for the Treasury market us to continue to rally a little bit and to see yields lower. I'm looking forward to the 10 year yield to at least test

one point four or five percent if not one point 3 8 which was the November low. And you know in these kind of dramatic moves you do tend to get some volatility. But but but people would rather own less risky assets at least until there's some clarity as to what the what the near-term future might look like which obviously like you just heard Sam you know my colleague in Bloomberg Intelligence talking about it. It'll take a couple of weeks probably before we have any significant types of clarity about this variant and its potential dangers. So so because of that you're more likely to see more risk off as opposed to as

opposed to a big snapback in terms of yields. To be a bumpy couple of weeks are always appreciate the input. Thank you very much indeed. Bloomberg Intelligence's IRA Jersey on the right story. Coming up the new variant certainly rocking the markets today. You've got the S&P now down by circa 2 percent. Julie Beale Kayne Anderson Rudnick portfolio manager

joining us next to give us her take this Black Friday or was it Red Friday. We'll find out next. This Bloomberg. First of all you want to find out if in fact it does invade the vaccines that we're doing. I mean there's always the possibility of doing what the UK has done namely block trends of travel from South Africa and related countries. We don't know that. That's certainly something you think about and get prepared to do. You're prepared to do everything you need to do to protect the

American public. But you want to make sure there's a basis for doing that. And that's what we're doing right now. Dr. Fancy speaking to CNN a little bit earlier on today. We just don't know at this point. So many of the answers to the questions. We have the NIKKEI variants certainly putting a massive dent though in global markets. Does it feel that

dissimilar to the early 2020 story but this time round. We've been through this kind of cycle a few times. We're at least getting used to it. But nevertheless the instinct to shoot first and ask questions later still very much there. Abigail Doolittle has a lady the details guy. It's interesting you're making that comparison to early 2020 because that is the market reaction we're seeing even though we have been through this before. So the uncertainty

around this new variant really showing the S&P 500 at this point now down 2 percent. Last time I looked the worst day since September. You can see the Russell 2000 that small cap index down even more down 4 percent. The last time I looked is probably even further ago. It goes back further at this point may have 20 21 and then the transports down three point nine

percent the worst day since 2020. The Footsie one hundred. The worst day since September or June 20 20 depending on the degree that it is down right now. I think probably September anyway. You slice and dice this. There's lots of pain. Stock sellers are out in force. We go to the Bloomberg terminal. We're going to see that this means the Russell 2000 back below that 200 day moving average of one saying is the first time that it does that test. You want to buy

it. But the second third fourth fifth time that is a sell the sell the index sort of news. Let's see whether or not that proves true. But it does look a little bit ominous as does this huge huge selling in the commodity space. Take a look at oil. The worst day in quite some time. Copper down lumber down. And then not surprisingly if we take a look at the havens we're going to see a big big bid for the likes of gold for bonds. And then take a look at the yen Kelly. This is the strongest safe haven yen going back from

March of 20 20 bitcoin down. Investors want out of risk assets and they wanted to safety. Yeah. Multiple standard deviation move for the yen and 13 and a half basis points in on the 10 year yield is quite a day. Abigail Doolittle. Thank you so much. So let's get more on these markets. Joining us now is Julie Beale Kayne Anderson Rudnick portfolio manager. Julie there's a lot we still don't know about this new variant. And yet the market seems to have made up its mind that it is very very bad news. Is this being overdone. Well I think it's hard to say right because we don't have a lot of data and it's very possible that if this is a really severe variant and it starts to be able to evade vaccines that this actually sets us back quite a bit. And what I worry about a lot is how structural

will the changes be that impact the market. Do we have a situation where you know dual income families suddenly switch to single income families because you know a parent wants to stay at home that has an impact a ripple impact on the economy. So I think it's important to keep in mind what is going to be temporary and what's going to be more structural. On the flip side of that if we do see weakness in the economy the Fed's going to stay step back from any tapering. The Fed is going to continue to deliver huge amounts of liquidity into the system. The taper is going to be mainly maybe elongated rather than truncated. Julie can you kind of offset those two forces for me.

Well I think at the end of the day every one of us would prefer to have a strong economy rather than one that simply supported by the Fed. We've really entered into completely unprecedented waters here. It's just call it just an experiment is like calling you know having your parents over and giving them an edible during Thanksgiving know to keep things calm. That's an experiment right. I'm in California so I can say I think we've we've never been in a situation like this frankly where we have so much liquidity. Interest rates are so low. If we go back to this 0 7 0 8 0 9 we had a huge housing crisis that was just based on low interest rates. So I think it's more important to think about the fundamentals because those are what drive long term. Right now valuations for sure are very impacted by interest rates. But I think all of us would just prefer to

have a solid strong economy rather than one propped up by the Fed. Well Julie as you say there's been a lot of liquidity. It's been very abundant but the tap starting to turn off. And you actually had you on Hatzius over at Goldman Sachs Publishing yesterday saying he expects the Fed to basically double the speed at which it performs the taper. Do you think that that acceleration of tightening may be a mistake. Well you know it's hard right because we don't we don't know how the liquidity is going to really play out through it. If you think about the rally and the amount of liquidity that we have I think it's no secret that valuations are very high. And so there is a certain amount of cynicism around this rally right. People

want to be in the market and want to be on risk assets in case the recovery is stronger than expected. But then the minute there is a whiff of danger ahead we get a reaction like today where everyone pulls out. And so I think that's a reflection of the psychology of the market where people feel they have to be invested on risk assets but are very quick to pull out.

Will they be as quick to go back in. I've been in the office for many hours now watching Kailey Leinz on television and the people that she's been talking to have generally sounded really positive. This is an opportunity. This is Black Friday. Normally I'd be shopping for stuff. I'm shopping for stocks today. This is something I want to step into rather than out of. Julie what do you make of that reaction. Because it seems to be pretty universal judging by the people that come on our air today. I think it's a reflection of the fact that everyone has seen lots of businesses that they want to buy but they feel the valuations are too high. And so this is the kind of opportunity that they've been hoping for. And I think that that makes sense

if you're trading in and out of stocks. But you know for us we're long term investors in our time horizon is five years typically. So for us this is maybe an opportunity for some quality names that make it had been a little bit overvalued. Maybe we have an opportunity there but it just generally depends on what your time horizon. Julie as we speak the 10 year yield has now dropped sub 150 where at 1 1 point 4 9 5 percent that is the lowest since November 10th. Where's your hedge. Is it bonds or is it something else.

You know hedges are sophisticated things that I know nothing about as long will the manager. But I think the the best. But what do you what do you put in a portfolio to get a little bit more safety. I think to get a little bit more safety you get into businesses that can do well even if there is more challenging variant or if the economy recovers like a good one I would think of it as an off price retailers named Ollie's Bargain Outlet which has actually been under some pressure because people are worried about the supply of closed merchandise. But the fact is is that having this much dislocation in the supply chain is a beneficial thing for them long term. And the extra benefit to them is that

if there are shut downs because their general merchandise they'll stay open. So businesses like that that have kind of upside and downside potential. Those are the ones we're really looking for. Julie we'll leave it there. Really appreciate your time this Friday. Really useful advice not only on what's happening with the markets but also on parental management. Julie Bale of Kayne Anderson Rudnick thank you very much indeed. We're also getting a move in the gilts as well. Gilts extending their gains. The U.K. 10 year yields sliding by 16 basis points. We are now at spot eighty one in terms of the percentage position on a U.K. yield. Just checking that number making sure

my eyesight is correct. OK we're going to take a look at how ETF are performing on this risk off session jets. The airline fund certainly under pressure today unsurprisingly. We'll dig into the details next. This is Bloomberg. Not only is it Black Friday but on this show it is ETF Friday. Markets sunny and risk off mode as this new Covid variant

emerges. What does that mean for the ETF. Steve Wilson. Looking at some that are certainly seeing an impact today means a lot of losses. Let's start there especially in some of the more specialized exchange traded funds. You know before the break guy you mentioned the U.S. Global Jets ETF largely airlines but also some aerospace companies taking quite a hit today down more than 9 percent. You know energy stocks going down and oil services an example. The holders trust an ETF of a ETF that's getting hit. Regional banks along with the larger ones. Interest rates coming down not good for their bottom lines metals and mining going the

way of energy. And so when it's reflected in that street tracks ETF. And you know beyond that though what's interesting is if you look at some of the work from home stocks as a group there are ETF is down. And that's largely a function of the likes of Amazon. Ali though you have some pretty substantial gains and you know Zune video the exercise bike company Palatine and so on. Now you look at ARC Innovation Cathy Woods flagship fund it's actually a little changed today. And that is as much as

they take a function of the fact that you know yields have been coming down and that's good for a lot of the companies that the fund owns. Indeed. Limburg Dave Wilson thank you so much. And coming up it might be hard to remember if you're following this market but today is Black Friday. We'll talk to Douglas Walters Eric Church its founder and CEO. That is Bloomberg. We're an hour into the U.S. trading day and it is not looking pretty Abigail Doolittle is watching those markets IPO. It is looking pretty ugly indeed Kelly. Let's take a look at what's going on here. And you can see lots of red on this screen. A guy earlier was making the point that it feels a little bit like early 2020. It looks a lot like early 2020 especially in the fact that you have some of the riskier growth here. The more tell index is in commodities selling off the Russell 2000. The

Dow Jones transports both down about 4 percent the worst day since various times in 2020. New York crude down nine point two percent. It just keeps going down. The worst day since April 20 20 the lowest since September. And then take a look at copper. Dr. Copper telling the economy also sharply lower down three point six percent now in early 2020 or continued selling in all these markets but not so much for the S&P 500 as it made all time highs with the S&P 500 right now down about 2 percent. And we can see it is quickly moving down toward that 50 day moving average on a sloping RSI when that's happened in the past. It typically means that the S&P 500 has hit that 50 day moving average. And in one case earlier this year not so long ago below

the 50 day moving average not so long ago we're looking at that Russell 2000 on its 200 day moving average. So brutal selling. As for best selling not surprising with the transports down so much it has to do with the airlines. The cruise lines travel. Also down sharply on the idea with this new Covid variant the uncertainty around it what will it mean. Will there be lockdowns. And even if there aren't will folks be more reluctant to travel. Brutal selling. On the flip side of this of course we do have stay at home stocks higher but we also have Haven's higher. Take a look at gold up about nine tenths of one percent

off of its highs. The 10 year yield though coming in 12 basis points. So a big bid for bond the haven yen. It's really extraordinary climbing by one point six percent the best day since March of 20 20 as bitcoin falls. Guy folks are out of risk assets. They're into havens on the uncertainty around this new Covid variant. And what could it mean for the global economy.

Absolutely. I don't think anybody was expecting this. I think a lot of people were expecting Abigail to be doing shopping of a different kind today. They're not buying into havens. They'd be out buying whatever was on offer for Black Friday. That's what we all thought we were gonna be talking about today. We have loads of fantastic guests lined up. Some of them made it today. One of them that is going to make it next he's going to tell us a lot about what is happening kind of right now. Crunch time in

the United States. Retailers certainly watching very carefully. Masses of shoppers hopefully returning in person to shopping for Black Friday. But the new virus variants just adding to a long list of concerns facing the retail industry. For more now let's bring in radical groups to give us an exact update on what is going on. Yeah guy. Well we did actually get some data from the U.S. and Europe actually showing that foot traffic in physical stores has actually picked up from a year ago.

But maybe this new Covid strain could put some of that into disarray. But talking about today and Black Friday well you're not going to see those typical deals that you might be used to. And Adobe is saying that even going into this black holiday shopping period we're really seeing a lot shallower bargains in some of the main categories appliances electronics sports good in some categories like told and DIY for instance you're actually going to get no bargains altogether. You're actually

more expensive. And this is coming at a time when consumer demand in the US. Well it is sky high and Adobe are actually expecting online sales between five point one to five point four billion dollars. So that is actually a record. Now if you combine this really strong healthy demand picture in the US with some of those supply side constraints low inventory and the inflation spiraling costs that retailers are facing really gives them in a way a one time a once in a lifetime opportunity to actually forego some of those promotions. So this is a strategy that these industries really betting on here that they can forego these promotions and offset inflation without impacting consumer demand at all. So they're really trying to protect their margins here. So this strategy well it may work for this year but 2022 that looks a little bit more cloudy. Will that

inflation eat up into consumer discretionary spending. And of course now with this variant as well that could put this into disarray as well. So many issues to consider. Bloomberg Quicktake Gupta thank you so much. And joining us now for more on retail is Douglas Baldesarra. Charge it spot founder and CEO Charging Spot is a leading provider of phone charging stations for retailers and brands and it uses real time data on shopping. So Douglas Black Friday in theory. That's a very hype shopping day. Are people actually going to the stores today or have they already been going for the better part of the last month. Well actually what we've seen is that consumers are not as concerned as we may have thought about the supply chain challenges that actually 62 percent of people are not shopping any earlier than they otherwise would have. And only 10 percent

are extremely concerned that they're not going to get what they need. What are they buying. Actually this year the number one category is clothing. We see a big spike in apparel sales right now. And in the past what we saw with gift cards was the most popular gifting category. The

way we kind of think about this is a return to traditional gifting to more emotional connection buying things that matter for people. And also people are getting back out there. They've been cooped up. They've maybe changed sizes. They need new clothes. They want to attend social events. And we see clothing to be the big winner this year. Except for the under 21 category they really still flock to electronics. Well Douglas speaking of getting back out there what's traffic looking like this year relative to the last holiday shopping season. We've seen a steady increase back to

brick and mortar. Interestingly those who are most concerned about supply chain challenges are shopping predominantly in stores. Those who say hey I really don't care. I don't I don't think this is going to matter much. They're shopping online. They're clicking and they're waiting for something to show up. But we've seen a steady increase back to brick and mortar to have some of those in-person experiences that we've been missing. Douglas you think that's because delivery times have started to go up either the times are going up or you're being charged for delivery in the way that you weren't before. As a result of which maybe you just want to go to the store get whatever it is you're looking for. Secure it there and then and take it home. Thus that is what we're seeing. I think that people are willing

to pay for the convenience. We've gotten much more conditioned to buying online and waiting for things to arrive. I think especially when you see the market drop today you're going to have more deal hunters out there. So I wouldn't be surprised if today Black Friday ends up being a bigger shopping day than it otherwise would have. If it wasn't for this market turmoil that we're seeing today. You mentioned that clothing is becoming a popular gift. Is that the category of retailer that is seeing

the most in store traffic. Yes. People still want to try on clothing. They want the experience of browsing. It's not as planned a shopping purchase. You go and looking for clothes not for a specific item as you might be online. And so you want that discovery. You also don't want the hassle of returning items that don't fit. And so

apparel retail we think this year we'll see a big boost. Oh consumers feeling positive. We've seen quote a lot of evidence recently contradictory evidence the consumers are worried. They're looking at what is happening at the gas station. They say prices going up. They're looking at what is happening at the grocery store. They see prices going up. That takes more disposable income and also kind of weighs on sentiments. Are you seeing any evidence

of that in your data. Well we actually do track the holiday cheer index. This year it's actually up 21 percent compared to 20 19 when we last last round. The study is up and it tends to continue to rise as we get closer to the holiday. Interestingly cheer is highest among those who've already completed their holiday shopping and lowest among those who haven't yet started. So there is that concept of retail therapy that we've heard about. Perhaps perhaps what we're seeing is

that when you do complete your shopping you get into that charity mode or it could be that causation correlation issue where those who are naturally more cheery are getting their shopping done early. But on the holiday cheer factor people are happy this season. And we're seeing that with returns to brick and mortar and increased shopping. Douglas really appreciate your time and your input and your

data. Thank you very much indeed. Douglas the charge its spot founder and CEO of the GM o my screen in front of me Caylee. The numbers are just breathtaking. Equities continue to fall and fall fairly aggressively. The latest move though coming in crude. You've got Brent down by eight point nine percent to die down by circa 10 percent. Yeah breaking below that 70 dollars a barrel level. At one point earlier on Brent making below seventy five dollars a barrel. And this was on pretty sizable volume guy. That is what is so interesting about the session. Usually the day after Thanksgiving is thinly traded. Liquidity is an

issue here. It doesn't seem like that's the case. It seems like people are actually trading all around these virus headlines. I wonder whether the pandemic has made that possible so you can still do this from home rather than having to charge into the office so people have got their set up to be able to allow him to do that. And it's a shortened session as well. So you get to react. You've got to get in early and react. You see what's happened in Asia. You've seen what's happened in Europe. You can look at the futures and figure out what's going to happen in the states. Get in. Make your move. But I think people you don't

have to go to the trading floor anymore to be able to be engaged with this ability to see how much retail participation there is here too. Yeah. What's interesting to me is why today you've had Austria going into lockdown restrictions being put back into place across Europe for weeks now. And yet the equity market has held held in there and something flipped in today's session. And I just wonder why that is. And you've seen a repricing of central bank expectations. Everything we've seen over the past several weeks going the complete other direction because the market's been reacting to every cycle in a less aggressive way. And with Delta we kind of knew what we were guessing. We knew that it was going to be coming back but there was a sense that

it was manageable and you could look through it. The market has been continuously looking through so much of this stuff with this. We just don't know yet. And that's the problem. Yeah. So we'll talk more about what we do and do not know. Coming up we're going to speak about the new variant that is concerning investors. David Navarro special envoy on Covid-19 for the World Health Organization will join us next. This is Bloomberg. This is Bloomberg Markets could get turn you're looking at a live shot in the principal room coming up Kate Nichols UK hospitality CEO. Eleven thirty a.m. in New York for the day pan in London. This is bringing back. Let's check in on the Bloomberg first what news Armour's could get to shares a Deedee Global fell in early trading after Chinese regulators were said to have asked the ride hailing giant to delist from U.S. exchanges. BLOOMBERG Iceland

Regulators have asked the company's top management to remove the firm from the New York Stock Exchange on worries over security. Sources tell Bloomberg privatization or a Hong Kong share float are both under consideration. Iran's foreign minister says the nuclear deal can be revived quickly if all parties return to their obligations and sanctions on Iran are removed. The

official told the European Union today Iran will attend talks next week in Vienna quote in good faith but needs guarantees that the United States won't exit the agreement. More data is needed about the new Covid-19 variant before the US can determine whether to halt flights from southern African countries. That's according to Dr. Anthony Fauci the chief medical adviser to President Biden. Dr. Faculty tells CNN there is evidence the new variant with the mutations that are quote

raising some concern is already present in the United States. Global news 24 hours a day on air and on Bloomberg Quicktake powered by more than twenty seven hundred journalists and analysts and more than 120 countries. I'm rich. Could get to this Bloomberg guy pretty good. Thanks very much indeed. Let's carry on with that

conversation. The new variant of Covid causing considerable concern and market gyrations. Let's bring in Dr. David Nabarro special envoy on Covid-19 for the W8 showed the World Health Organization. David we are looking at a set of financial markets that are brutal. We've got oil down really really aggressively. Stock markets are falling. Financial markets don't like uncertainty. They don't know what they're dealing with it with when it comes to this new variant. Could you help us. What do we know. What do we need to know. Well first of all I have to stress to everybody.

Viruses change they don't stay static over the months and years. This virus we know is capable of undergoing mutations and combinations of particular mutations can lead to the virus changing. There are three changes we worry about. Does it become fiercer. Does it become more easily transmitted and Dow Jones become

better at evading the protection from vaccines. The reason why we're really very concerned about this new variant is that it seems to be able potentially to do all three of those. We just don't know for sure. The uncertainty will go on for four weeks. But I can quite understand why financial markets are worried because the economic recovery we've seen in recent months has been marvelous. But it has been based on an anticipation that the world will be able to keep ahead of this virus. It looks as though the virus has crept up on us a bit the last few days. Dr. Navarro what does that mean. If there's no variance in circulation that may be able to evade vaccines does

that make the vaccination effort entirely futile. It's not entirely futile to use your words. I want to stress that in the world of vaccines you tend to get a reduction in protection but you don't move to a point where the vaccine becomes completely futile. As you said. So it'll be just a reduction if it is going to happen.

It will make life more difficult and it will mean that some reengineering of the vaccine will be necessary. But we were anticipating this. You know it's not as come into complete surprise. And I think what we have to say to everybody is we've shown in the last two years that science is capable of putting up a good fight against this virus. And it will just be a case of going back to the drawing board and reengineering the vaccines. It's doable. It just creates a bit of a hiatus. But people should not be upset. You should not imagine that all is lost. It's not. Well that's positive. Dr. Navarro it's likely from what I've read this morning that

this new strain came from an immuno compromised patient possibly an HIV patients because the virus sticks around in their system for longer. And as a result of which has the opportunity to mutate in the way that we've seen here. What do we need. What we need to do about this. How do we stop this happening. South Africa in particular has huge numbers of HIV patients. What do we need to do as a planet as a world to help and make sure that this doesn't occur again. Thank you for the way you asked that question. What do we need to do about this as a world. The answer is simple. With leaders of every major nation stop dealing with this as though it's an issue just for their nation. It's not. It's a world issue and it needs a world response. And the most important requirement now is to get the wonderful vaccines that we have right now more

fairly distributed across the world. Why is it that there are so few people in Africa who've been able to be vaccinated whilst there are people being offered boosters. And in fact being really pushed to get boosters in Europe and in the U.S.. It's just wrong and it's not the right way to deal with the global threat. So I want to quote you. Yes we need a global response and we need it immediately. Well Dr. Navarro let's talk about a certain global response today maybe a knee jerk reaction for countries like the UK restricting flights from South Africa and bordering countries. Is that an appropriate policy response

given what we know. There's a real problem about what's happened. You know the people in South Africa have done amazing work in the last few weeks to sequence this and then they discovered that there there's a particular feature of this variant that makes it easier to do that detect on normal PCR testing. And they've told the rest of the world what's happening. They'd been really open. And it's just really unfortunate. On the other side that as soon

as they tell everybody what's going on there is a kind of knee jerk reaction to stop flights. I'm most impressed that Dr. Fauci said today and I understand that his quotation that the United States needs to know more about what's happening with this virus variant before they will decide to stop flights coming from South Africa. I really want everybody to remember you don't deal with a situation like this just by closing your borders. Very very rarely are we able to hold back viruses through border closure. It's much better to work together and establish the best way to deal with it using the World Health Organization and connecting with the authorities of the countries concerned. Final quick question for me doctor and a question from the audience as well. We seem to be creating this impression that vaccines are the be all and end all that they will protect

everybody. This looks like though it's gonna be an ongoing process a rolling process. And I come back to the HIV patients as well. Vaccines won't work as well on them. And as a result of which we are likely to see a repetition of what was just happened. How do we how do we deal with that. Again as a planet and figure out that we need to a date with what is happening in South Africa and provide some protection there and B educate people that this is going to be a longer drawn out process. As

you say there was this expectation that we'd be done fairly soon. Yeah well you are just so right on everything you say. This is a long drawn out issue. This pandemic is not going away anytime soon. You can't vaccinate your way out of a pandemic. That's a basic rule of life. You've got to also use measures that stop the pathogen. That's a virus in this case from spreading. So number three everybody everywhere should be using well fitting face masks at all times especially when indoors. Everybody everywhere should maintain enough distance from others so they don't inhale the exhaled air of somebody else. Everyone

everywhere need to practice good hygiene. We need to do everything possible to avoid being in stuffy poor our circulation places and running the risk of spreading the disease. Don't just rely on the vaccines alone. It's not enough. All right. Thank you so much for your valuable time today. That is Dr. David Nabarro special on the air on Covid-19 for the W each hour giving us some answers as we look for them on this new variant found in South Africa. This is Bloomberg. Thirty five minutes to the European close. Anything associated with travel getting battered from the get go this morning. Let

me run you through some of the names. Airbus the airframe are down by 11 percent right now sub 100. Try to get ninety nine carnival trading on both sides of the Atlantic. The cruise industry front and center obviously throughout this entire pandemic in terms of the pain that's been felt that stock down by 14 percent. Then you go into the airline sector. It's interesting actually it's definitely the long haul carriers that are most exposed to this. We've already seen what has happened with South Africa. People are worried about some of the other routes closing down. We've only just reopened the North Atlantic

IAG the owner of British Airways the owner of Iberia Air Lingus etc. down by 15 percent today trading at 130. Travel stocks very much under pressure but European stocks were broadly are down and down hard and on big volume. The closes next. This is Bloomberg.

2021-11-29 19:41

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