Episode summary
Concerns Over Long Term Yields and Oil Prices | Bloomberg Surveillance
Bloomberg Surveillance
· · 29 min · Hosts: Tom Keene, Paul Sweeney, Lisa Mateo, Michael Barr · Guests: Steve Englander, Paul Sankey, Andreas Utermann, Jay Goldberg
Summary
The discussion centered on why the dollar remains resilient, why US rates may stay elevated, and why inflation is still a concern even as growth and earnings hold up. A guest from Standard Chartered argued that the dollar’s strength reflects a mix of higher US rates, stronger growth, and durable productivity, not just panic buying, and said the Federal Reserve’s new chair may be able to delay hikes but not necessarily cut aggressively. The guest also said inflation looks sticky rather than alarming, using a “99 and a half degree” analogy to describe the current reading.
The conversation then shifted to oil, where another guest argued that physical shortages are moving through the chain, from base oils and motor oil to jet fuel and gasoline. He said supply disruptions tied to Hormuz, the Houthis, and shipping constraints are forcing a rethink of global energy logistics, with US gasoline potentially reaching $6 a gallon this summer. He also framed the situation as a contest between US financial power and drone-enabled disruption.
Later, a European asset manager said the continent remains politically and economically uneasy, with worries about competitiveness, energy independence, and the auto industry. He still saw Europe as investable, favoring fixed income and saying equity markets are reasonably priced, while the final segment focused on Nvidia, where an analyst argued the stock has become too large to keep surprising and faces rising competition from Google, AMD, and hyperscaler chip efforts.
Key takeaways
- The dollar’s strength was attributed to higher US rates, resilient earnings, and productivity rather than a simple risk-off move, according to the Standard Chartered guest.
- The Standard Chartered guest said the Fed chair can delay hikes, but inflation is still above target and not yet falling decisively.
- The oil guest warned that supply disruptions are reaching consumers through base oils, jet fuel, and gasoline, and said US pump prices could hit $6 a gallon this summer.
- The oil guest said the Strait of Hormuz risk is being offset over time by non-OPEC supply, but not fast enough to avoid near-term price spikes.
- The Vontobel chairman said Europe still looks investable, with fixed income attractive and equities reasonably valued despite geopolitical and competitiveness concerns.
- The Nvidia analyst said the stock has underperformed the broader semiconductor complex and faces growing competition from Google TPU, AMD, and in-house hyperscaler chips.
Notable quotes
“the market is responding explain this right now”
“he won't cut but hook cap”
“I think the dollar is value and that you know it's going to go up”
“we've characterized this as an incredible time where it's OFAX versus UAVax”
“the story of this year is for inference which is like getting AI to actually do useful things for people”
How the episode opens
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Eastern on Apple CarPlay or Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. We're going to pause here with Steven Anglader and we could do this with Standard Charter Bank and just look at the larger view.
Paul, I'm going to go to 70,000 ft on this on the dollar. The single number on my screen, which screams flight to quality, is a DXY of 99, yen back to a 159 handle. Just a remarkably resilient dollar.
Steven Englander has been a student of this since time began. Are you shocked at the resiliency of the dollar? We're not shocked.
Um because we've we've been dollar bulls in a market that's overwhelmingly dollar negative. But you know, you're always a little bit surprised at the timing. What what seems to have happened is a combination of US interest rates finally going up re reflecting some positives in the sense of US economic growth and earnings resilience
And you know as well as some negatives which is the inflation picture but the market is responding — Explain this right now I got to get this academics in what's great there and I think of John Ryden iconic at Bear Sterns with Breen as well is Paul in every dynamic there's an ambiguity this word ambiguous So if a dollar goes up, everybody's like gloom gloom bloom. But on a second order condition, it's about economic might, isn't it?
Yeah. The causality is always important. And you know, if dollars going up for some arbitrary reason, yeah, it's it's not competitive.
But if every quarter you're always surprised at how resilient earnings are and how they surprise to the upside and you're surprised at productivity growth and how strong it is, that tells you something about the return to capital and that's why money keeps flowing into the US that you know the riskadjusted return to capital um estimates seem to be you know keep going up and and that attracts capital globally in a world that's slowing down.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- long term yields
- fed chair transition
- oil and energy prices
- geopolitical backdrop investing
- nvidia earnings
Companies and tickers mentioned
- NVDA
- Standard Chartered Bank
- Vontobel
- Seaport Research Partners
- Nvidia
Watch the episode
Watch “Concerns Over Long Term Yields and Oil Prices | Bloomberg Surveillance” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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