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00:00And right now we are two minutes away from the end of the trading day. Romain Bostic here with Katie
00:04Greifeld taking you through to that closing bell with a global simulcast. Carol Master and Tim Stenevich join us. Welcome
00:10to our audiences across all of our Bloomberg platforms, television, radio, our partnership with YouTube. Another interesting day in the
00:17market, Carol Master. We should point out. Yeah. We started bombing Iran back on what was it? February 28th. The
00:22S&P 500 at one point through from there all the way down to the end of March fell 8
00:28percent.
00:28We have now rallied about 7 percent off of those lows, including the two and a half percent gain here
00:35on this Wednesday afternoon. So everything's awesome, right? Everything's fixed. Everything's done. Close the books on this one. We know
00:41that that's not the case. We've seen some back and forth. But it is interesting to see that it's not
00:46like all of a sudden markets have undone the enthusiasm that we've seen today. Even energy markets, they're still down.
00:52Oil's down a lot. So, yeah, that's kind of where we are.
00:56I'm glad you went to oil, because even though the S&P 500 and the Nasdaq have recovered somewhat, oil
01:01is still a far cry from $60 a barrel, with WTI and Brent both above $96 a barrel.
01:06So maybe that's the place to look for how investors are thinking about this fragile ceasefire.
01:12How about the bond market, Tim Stenevich?
01:14That's a great place to look.
01:15Because you take a look at what the 10-year Treasury yield has done on an intraday basis, a total
01:20U-turn when it comes to the benchmark there.
01:23So bond traders really giving up those gains that we saw, definitely out of step with what we saw with
01:29the equity market today, which pretty much has been resilient through all of the back and forth.
01:33Yeah, we should point out the VIX down around 20, the Bloomberg dollar spot index losing about 8 cents of
01:39a percent on the today, pretty much erasing most of the gains for the year.
01:43And, of course, we're going to talk a lot about where energy prices themselves are, as you alluded to here,
01:49down significantly on the day, down more than 10 percent,
01:51but still up about 40 percent or so from where we were prior to the start of the war.
01:56The Dow Jones Industrial Average adding 1,300 points here on the day, or roughly about 2.8 percent.
02:03The S&P 500 up 166 points, or 2.5 percent.
02:07The Nasdaq Composite and the Nasdaq 100 each rallying about 3 percent on the day.
02:11And you see the Russell 2000, the S&P 400 mid-caps each up about 3 percent as well.
02:17All right, let's go back to the S&P 500, if I may.
02:20And you've got most names, no surprise, as we've seen, really, a risk-on rally takeover on this Wednesday.
02:27Katie, 421 names to the upside, 81 to the downside, and you've got one unchanged.
02:32Let's take a look at the sector level, because it is so telling, the fact that you have 10 sectors
02:38in the green, a bright green there, the lone slice of red.
02:41Wait, can I guess which one?
02:42Yeah, please.
02:43Oh, actually, it's right there on the screen.
02:44Yeah, it's energy.
02:45It's down 3.7 percent.
02:48Your biggest gainer in terms of a percent change today was industrials.
02:53That sector higher by about 3.8 percent.
02:55Communication services, materials, consumer discretionary, but still across the board, huge, huge gains.
03:01All right, guys, let's go to some of the individual gainers, if I may.
03:04Just bringing up my list, Meta among them at its highs up about 9.5 percent, finishing the day with
03:09a gain of about 6.5 percent.
03:11It was a best performer among those MAG-7.
03:15It debuted its latest AI model.
03:17It's called MuseSpark.
03:19It was created by Meta Super Intelligence Labs.
03:22MuseSpark will power the Meta A chatbot.
03:24It is a closed model, meaning its design and code will not be made public, unlike the company's prior open
03:30source strategy.
03:30We've seen Meta and Zuckerberg, Mark Zuckerberg, really kind of refocus that company on AI.
03:36The model is the first major test for Zuckerberg's new AI lab and is seen by executives as a refresh
03:41of Meta's AI strategy with several larger models in development.
03:45So, again, some outperformance there.
03:46We were just kind of joking, right?
03:47We've talked about this before, the metaverse.
03:50It's in the past.
03:51It's all now about AI for this company.
03:54All right, let's talk about airlines.
03:56Katie, you talked about what happened in the energy sector.
03:59A couple things going on in this space.
04:01If you look at the S&P 500 Super Composite Airline Index, all nine members were higher in today's trade.
04:07The group overall up 5.7 percent.
04:11Delta, also an outperformer, up about 3.7 percent.
04:15Delta expects to incur more than $2 billion in higher fuel costs through June because of the war, U.S.
04:20war in Iran, prompting the carrier to tread carefully.
04:23Stick, though, to its previous full-year profit forecast.
04:25So, no update there.
04:27The company, the CEO, Ed Bastian, telling reporters that earlier that it's looking to do more fare increases beyond what
04:34it has already levied.
04:36Airline shares, though, globally surging today after President Trump agreed to that two-week ceasefire in exchange for Tehran opening
04:44up the Strait of Hormuz.
04:45We know, though, throughout the day we got pushed back from Iran.
04:47So, we're still kind of questioning where that is.
04:49But, nonetheless, the group holding on, for the most part, its gains.
04:52And then flip it on over to Levi, Levi Strauss & Company.
04:56That went up 10 percent in today's session.
04:59It was up as much as 16.5 percent intraday.
05:01It's most in a year on an intraday basis.
05:04Company boosted its adjusted earnings per share and revenue forecast for the full year.
05:08Also reported first-quarter earnings and sales at topped estimates.
05:12And the company's CEO joining us here earlier on Bloomberg Business Week and just saying that all categories are doing
05:21really well and looks like the momentum is expected to continue.
05:25We should put out the CFO, long-time CFO there for about 10 years.
05:28Harmeet Singh, he is going to be transitioning away from the CFO position and leave the company.
05:35But this is a guy that really has been crucial to turning around this company and really bringing it back
05:39as a public company.
05:40Also, wears a lot of denim.
05:42He does.
05:43Like all of them.
05:43That tracks.
05:44Yeah.
05:44Don't we have denim on today?
05:46Yeah.
05:46Like below the desk?
05:47I mean, but not like the Levi's, you know, the Levi's executives, the Levi executives.
05:50Oh, yeah.
05:51Anyway, one sector that did not do well today was energy.
05:56ExxonMobil shares fell by 4.7 percent.
05:59Energy stocks fell after the U.S. and Iran agreed to this two-week ceasefire in exchange for Tehran reopening
06:04the Strait of Hormuz.
06:06As you've been following all day, there are questions about to what extent that ceasefire is holding and to what
06:10extent traffic is actually flowing through the strait.
06:13Meantime, ExxonMobil shares fell after it's announced that it lost 6 percent of its global production in the first quarter
06:20due to the war in Iran.
06:21The company said two LNG production lines at a facility in Qatar were damaged by Iranian missile strikes, and the
06:27damage will take a prolonged period to repair.
06:30Also under pressure today were shares of fertilizer companies.
06:34CF Industries fell by 5.7 percent today.
06:38The two-week pause in the U.S. and Israeli war on Iran could lead to lower chemicals and fertilizer
06:42prices if supply disruptions sparked by the war ease.
06:46CF Industries is a large producer of chemicals that go into fertilizer, including ammonia, urea, and more.
06:50A large producer of nitrogen-based chemicals.
06:53That fell by 5.7 percent today.
06:55And have you guys ever been to Kura Sushi, ticker K-R-U-S?
07:01I have.
07:02You have been to it?
07:03No.
07:03Oh, you haven't.
07:04Okay.
07:0488 locations, 22 states in Washington, D.C.
07:07Romain, have you been?
07:08I have not, but I've been following this story.
07:09They've got hundreds of these locations around Japan and around the world.
07:13It's like an automated sushi bar revolving.
07:16Yeah, I've seen it.
07:17It seems pretty cool, actually.
07:18Yeah, I've seen the one in D.C., yeah.
07:19Yeah, shares tumbled today.
07:21It's like, you know, somebody, you know, puts their hands on that little dirty conveyor belt.
07:24No, they put their hands on, they pull, there's a lid, you pull off the lid, you pull the plate
07:28out, then you put the plate onto this conveyor belt when you're done with it, and that counts the price.
07:33You really researched this.
07:34You know, sometimes you've got to watch YouTube videos at your desk.
07:37Sometimes you've got to do it for work.
07:38Why are shares on 18%?
07:39Shares fell the most in close to two years.
07:42The company said that annual, or the company came out with its annual guidance, and that disappointed some investors.
07:47Management said on the call that given the war, it felt it was, quote, prudent in terms of its guidance
07:52to just add the upside from second quarter results, but not to extrapolate further from that.
07:56So a little uncertainty about consumer spending as a result of the macroeconomic backdrop.
08:02And that is your update there on what's going on in the sushi world.
08:05Let's check in on yields once again.
08:07When you look at where yields actually ended on the day, and you see that unchanged there on that 20
08:13-year there, it gives you a sense here that nothing happened.
08:17But it was an incredibly volatile day.
08:18We came into early this morning with a lot of buying in the Treasuries, in fact, a lot of buying
08:22globally with regards to government bonds.
08:24At one point, we saw the two-year yield actually drop about six basis points, and I think we saw
08:28the 10-year yield drop about four basis points.
08:31But, of course, that was completely reversed as we moved closer to the closing bell.
08:35And we're basically on change across the board as a lot of people really questioning what actually comes next.
08:41Yeah, and I guess, you know, I don't know.
08:42I was thinking about the S&P NASDAQ 100, you know, well off the oversold position.
08:47If you look at something like RSI, Relative Strength Index, it's actually closer now to being overbought.
08:51And so I kind of think about this bounce.
08:53Is it fundamentally based?
08:55Is it just reactionary to headlines?
08:57And I think, again, I'm thinking a lot about the earnings season and what we get.
09:01Like we got from Delta.
09:02What do we get in terms of outlooks?
09:04Ed Bastion not changing his outlook, not updating it, not changing it at all.
09:09So what kind of transparency or outlook do they feel comfortable committing to?
09:14I think that will be certainly key, especially as they try to make sense of the headlines that continue to
09:18come out about this war.
09:20Yeah, it's notable to hear from consumer companies.
09:22It's notable to hear from a company like Levi's against this backdrop.
09:26They argue, and Michelle Goss argued this on our program, that they have so many affordable price points and so
09:30many different price points that they can kind of hit the consumer wherever that consumer is.
09:33But I guess I'm interested to hear from the big banks next week, JP Morgan, Bank of America.
09:37They have such a real-time view on the consumer.
09:40What are consumers doing with their spending?
09:42If they're spending more on fuel, where are they pulling back?
09:44And what does that do for these company earnings?
09:46That's true.
09:47I mean, the banks, as you say, they do have a unique perch there when it comes to the economy.
09:50But you know that the banks, at least their trading desks, have to be making money hand over fist right
09:55now.
09:55You think about this volatility that we're seeing in the market.
09:59Yeah, you know, you put your hand over the fist.
10:02And now you have more money.
10:03That's how you do it.
10:04I will say just quickly to Carol's point on whether this is fundamental or something else going on.
10:09There was a really interesting note out from Goldman's trading desk division basically saying you take a look at hedge
10:14funds right now.
10:15They are covering their short bets to the biggest extent since about 2020 or so.
10:21So I'm really interested to see how this rally develops, whether or not it can sustain itself over the next
10:27few days or so.
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