United States Of America, Lisa Shannon, Morgan Stanley discussed on Bloomberg Surveillance


Side of the economy come spring summer as we're getting beyond the worst of COVID We were expecting huge pickups in things like travel and vacation linked items And I think that that's really going to be one of the areas where we see the severe impacts of these kind of energy prices particularly if they're persistent So our call for to own consumer services is really had to become a lot more muted and that's where our concern is focusing is on consumer behavior Lisa when talk about multiples it has to do also with fed policy with the idea that rates may not go lower in response to the shock but rather the opposite and that's certainly what number of people are considering with that still 7 rate height call over a Bank of America as John was mentioning How have you reached your expectations for the fed for yields and the relationship as negative real yields don't seem to make a difference right now for this risk sector Yeah so look that is in an incredibly tough position and our sense is they absolutely positively have to get off the zero bound if for no other reason than they need some dry powder to do something in the next 6 months if in fact we have a recession And so I know that this sounds perverse but they kind of have to give themselves some room while they still can And so we're in the camp that says Powell's got to stick to his guns Here he's got to get at least two or three hikes in before kind of the fourth quarter Now that's nowhere near Maybe the 6 or 7 that were discounted at the worst moments But I think what this really puts into question is whether they can do balance sheet action because as we know when you have these kind of huge spikes in commodity prices it really has an impact on global dollar liquidity And so we had been in the camp that says you know he's really got to start working that balance sheet and working balance sheet down I think that's the thing that more than interest rate hikes that's been thrown into question is whether they can do anything on the balance sheet with this kind of market turbulence Lisa Shannon thank you As always from Morgan Stanley a tough time for anyone trying to work in this equity market and work out the future here Looking ahead to Thursday these are the estimates So Mike Farley over at JPMorgan goes with 8% Morgan Stanley and zeta of the team go at 8% might gaping and Barclays is 7.9 Ethan Harrison Bank of America at 7.9 The median term is 7.8 but some really well-known figures there on Wall Street looking for an 8 handle They're looking for an 8 handle and then we'll see from there I mean I guess I really wanted John as a Thursday inflation report matter anymore 'cause it's such old news I mean I can't believe I'm saying that What's on my can We ignored payroll didn't we Yeah That's what we did on Friday Lisa and we're going to ignore America Except that it's a starting point rather than an ending point A lot of people thought that we were going to see peak oil prices and peak energy peak inflation And that's obviously off the table right now John can I point out and I want to be careful because we don't do technical analysis tick by tick on surveillance But the fact is I'm going to do it John Oil coming off the bottom of yesterday is making a series of higher lows That's not an opinion that's a fact The year to date move now looking along the year to date column on the Bloomberg terminal up 62% year to date on WTI up 63% there's the move The president of the United States sector ban U.S. imports of Russian crude as soon as today The headline from our team at Bloomberg the president of the United States set to ban U.S. imports of Russian crude as soon as today Here's the important additional headline The U.S. will do this without the participation of European allies So go through this again The president according to our sources set to ban U.S. imports of Russian crude as soon as today and they will do that without the participation of European allies crude right now one 22 70 by 2.7% standing by AMH down in D.C. And Marie you have to break this one walk us through it Well John it's pretty obvious given the fact that the administration has come under immense amount of pressure one if they weren't going to announce this it was going to come from Capitol Hill The second is we need to remember these imports of Russian oil and other petroleum products already on a massive low into the United States because already the market for 6 days market participants have been shutting these assets They do not want to deal with what is now considered potentially Putin's toxic assets They didn't know if legally you'd be an issue morally obligations So already this was already happening in the industry and now the U.S. is just putting a stamp on it They have more interesting part is that obviously this is them acting unilaterally in the sense that we did have Canada also do this but Canada imports so little because they are a major producer But still this will put more pressure now on Europe which at the moment just can not do it They can not survive without Russian fossil fuel So walk us through the details here at Marie of exactly what they're going to be banning of how long it's going to last whether it's retroactive what exactly are the logistics of putting through a band like this unilaterally given the fact that Russian imports may only account for 3% of all crude shipments but 8% of our refined goods and other petroleum products Yeah well considering also in this band is oil LNG and coal but obviously oil is the most important one And while it sounds like a little bit Russian imports into the United States actually ranked third ahead of Canada and Mexico and even before a U.S. key ally in the gulf Saudi Arabia Now for a while this was a huge feat and win for the Kremlin The president Putin has wanted to kill U.S. shale as part of the reason why they were so almost reckless in sense of the price war during the pandemic in 2020 And then they were also just exuberant the fact that actually the United States of America was accepting Russian crude even over a key Saudi ally So symbolically this is very important Unsure of how long this could last but in the sense.

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