Bloomberg Surveillance TV: March 11th, 2026

0:00When the rest of the markets slow down, the futures market keeps moving. Did you know that CME Group S&P 500 and NASDAQ 100 futures trade nearly 24 hours with great liquidity? In the ETF markets, volume and liquidity lessons after 4 p.m. until the next morning. But with futures, you get trading opportunities both day and night. Learn more at cmegrope.com slash equity futures. So there's a lot of noise about AI, but times too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now, a global workforce of 300,000 can use AI to fill their HR questions, resolving 94% of common questions. Not noise. Proof of how we can help companies get smarter by putting AI where it actually pays off. Deep in the work that moves the business. Let's create smarter business. IBM. All businesses are the pulse of every community. They bring people together, create opportunities, and drive growth.

1:02Chase for business helps business owners like you with personalized guidance and convenient digital tools all in one place. With that guidance and your determination, you can take your business farther and help build a brighter future for your community. Learn more at chase.com slash business. Chase for business. Make more of what's yours. The Chase mobile app is available for select mobile devices. Asian data rates may apply. JP Morgan Chase Bank NA member FDIC copyright 2026 JP Morgan Chase and company. Bloomberg audio studios podcasts radio news. This is the Bloomberg surveillance podcast. I'm Jonathan Ferro along with Lisa Abramowitz and Amory Horton. Join us each day for insight from the best in markets, economics, and geopolitics. From our global headquarters in New York City, we are live on Bloomberg Television weekday mornings from 6 to 9 a.m. Eastern. Subscribe to the podcast on Apple, Spotify, or anywhere else you listen.

2:06And as always, on the Bloomberg terminal and the Bloomberg business app. Join us now for more. Steve, welcome to the program. I read the recent note. Let's work through it. Do you still believe this is just another brick in a so-called climber wall of worry? Well, Jonathan, there's a fine line between a wall of worry and a brick wall. So for the moment, we think it's still another brick. But as you guys have been highlighting, it really is a matter of how long this goes on. The market is trying to look through the valley here, you know, to the other side of the valley. And you can see that in the shape of the yoke, the yoke, or you can see it in the shape of the wall curve, of the futures market, you know, oil, energy futures. I think the spot oil is about $10 higher right now than the futures price at oil at around

3:1067, same way, you know, with with the volatility index, the, you know, the wall out on the outside of the curve is down in the low 20s. The thing is, it's still higher than it was at the beginning of the year, both volatility and oil, even if you go out more, you know, further, which is what the market, the stocks are pricing off of. I mean, we've talked about this on your show that oil market is a spot market that has to, you know, trade commodities on a daily basis. The stock market is looking at the future price of oil and, you know, that price is lower. But the longer this goes on, the future and the present start to combine. So I think you're right to be focusing on how long this lasts. And the market is trying to look through this. It's fortunate that we cut our target price on the S&P prior to this whole thing happening. That was just pure luck, I'd suppose. But the reason we did that was we didn't anticipate there'd be some kind of a correction.

4:13And we're kind of setting the levels at which we would re-enter the market with new cash. Because I think, you know, if your target on the S&P is lower, which it is for us, you know, you need a little more upside before you're going to step in, especially to a situation like this. Now, we're holding firm, we're watching events just like you are and waiting to see if and when the end comes near. One thing is sure, it's going to end. You know, that's not a question, a question is how long? It's either going to end with a regime change or it's going to end, you know, with some sort of ceasefire and a kind of hobbled Iranian regime. But one way or the other, this will end. Steve, you said that the one challenge to your relatively constructive view for the year ahead of single-digit returns until 2027 was sustained levels of $90 or above of crude. I'm just wondering what does sustained mean? How long does it have to remain above $90 for you to materially change your view?

5:16Yeah, I don't know that we have a precise number of days, Lisa, but, you know, somewhere probably in the two to three-month range, you know, if you had $90 that long, you're going to have two impacts that are going to have to cause us and I think others to drop their economic outlook in terms of the growth rate. We're still a 3% growth this year and we've got earnings very, very strong this year and next. But, you know, if you go three months or so, you're going to really start to impact economic activity, particularly on the low end of the consumption bandwagon, if you will, which is kind of where we were expecting a recovery this year because of all the things going on with the one big, beautiful bill. And the lower it goes on, the higher the risk that this one-time price impulse gets kind of normalized and fed into a broader inflation in the economy, which then takes off the table, the rate cuts that we have in our forecast.

6:19As you know, we've got two or three cuts out there over the next 12 months, which we think we're still on track for, but if oil stays up for two or three months, maybe the people started asking for raises against that price and then it bleeds into a broader inflation. Hi, Steve. I just want to deal with the word defensive. I guess, trying around a lot. Defensive means different things at different times and it's highly dependent on the shark. There are times when tech has defensive qualities, staples, the usual one, but this feels different. What is defensive in a moment like this one? We think defensive is some of these hard asset companies. We were talking about this what I was on the show last time, you know, in more in the value space and certainly defense companies are defensive right now because they're hard asset companies that also are seeing good, strong top line growth for obvious reasons. Energy companies are big stocks in the value indices, form of companies, strong dividends,

7:21broad, you know, broadly diversified and well defended, you know, product modes, if you will. So it's these companies that are very broadly diversified, not as reliant on, you know, where the market is valued, have a good dividend yield. And in a single digit return environment, you dividend yields of 4%, 3% start to look more attractive if the market's gone up 20%, no one cares about the dividend yield. So I think those are the kind of defensive areas that we like here. We like them coming into this. They've actually underperformed some of them, not all. I mean, the financials are also in the value indices. They've underperformed, obviously, but, you know, we like those areas here, especially coming out of this. Provided we don't have to take another haircut to our economic growth. Stay with us. Mulplumberg Savannah is coming up after this.

8:25When the rest of the markets slow down, the futures market keeps moving. Did you know that CME Group S&P 500 and NASDAQ 100 futures trade nearly 24 hours with great liquidity? In the ETF markets, volume and liquidity lessons after 4 p.m. until the next morning. But with futures, you get trading opportunities both day and night. Learn more at cmegroup.com slash equity futures. Hello, hello, I'm Malcolm Gladwell, host of the podcast Smart Talks with IBM. I recently sat down with IBM's Chairman and CEO, Arvind Krishna, and I asked him, how can companies use AI to its fullest potential to create smarter business? My one advice to them, it is you can scale, don't pick the shiny little toys on the side. For example, if anybody has more than 10% of what they had for customer service 10 years ago, they're already five years behind it.

9:28If anybody is not using AI to make their developers who write software, 30% more productive today, with the goal of being 70% more productive. So we are not asking our clients to be the first experiment on it. We say, you can leverage what we did. We're happy to bring out all our learnings, including what needs to change in the process because the biggest change is not technology, it's getting people to accept that there's a different way to do things. To listen to the full conversation, visit ibm.com slash smart talks. Support for the show comes from public. Lately it feels like there are two types of investing platforms, some are traditional brokerages that haven't changed much in decades and others feel less like investing and more like a gain. Public is positioned differently. It's an investing platform for people who are serious about building their wealth. On public, you can build a portfolio of stocks, options, bonds, crypto without all the bugs

10:32or the confetti. Retirement accounts, yep, high yield cash, yes again, they even have direct indexing. Public has modern design, powerful tools and customer support that actually helps. Go to public.com slash market and earn an uncapped 1% bonus when you transfer your portfolio. It's public.com slash market and paid for by public holdings, brokerage services by public investing member Finra SIPC, advisory services by public advisers, SEC registered advisor, crypto services by zero hash, all investing involves risk of loss, see complete disclosures at public.com slash disclosures. Let's turn to the Federal Reserve, the Republican Senator Tom Tillis, praising Fetchan nominee Kevin Wash following their meeting yesterday, but not wavering on his promise to block any fed nominations until the criminal pro into the current share, J. Powell ends. The former St. Louis Fed president, Jim Pullup, joins us now for more. Jim, welcome to the program, set the stage, how difficult a moment is this for an incoming

11:32Fed share? Yeah, so you just got to get through the nomination process first and as I understand it, anyway, I don't think anything's going to happen. Nobody is going to be on the Fed board any time soon the way this is going. Administration will have to come to some kind of deal. They don't seem to be talking about that. So I think it's all for now. It's the second time we've had to deal with this, Jim, before it was largely in the president's hands. And for whatever reason Biden stored, he stored, he stored and waited a long, long time to reselect, re-nominate chair power for a second term. And some people, even people who are on the committee at the time, said, that's what stopped this Fed Reserve from hiking quickly enough to respond to the energy crisis and the inflation pandemic shock coming out of the pandemic. Now, Jim, I just wondered this time around, how critical this moment actually is, with a fragile labor market and pressure once again on inflation coming from energy. Well, it's always critical, always lots of interesting things going on.

12:36I would say about this shock, it's not like the 70s. I mean, this is, of course, this is going to bring up, you know, harkening back to the 70s. But the US is a leading oil producer today, it weren't at that time. So I think the recession threat from this shock is probably smaller than it would have otherwise been because you've got the supply side kind of offsetting demand destruction that could occur. So I think, and then on the inflation side, well, you know, the Fed looks through, oil price shocks, anyway, they look at cornflation. So there's only a small effect on cornflation from this. So it's really whether inflation expectations would start to rise because markets would start to think that the Fed was going to accommodate this shock, which is what happened in the 70s. I don't think that committees have much of a mood to do that. So I think it's a different situation, even though this is a really big shock,

13:39it's a different situation than what we saw earlier in the post-war era. Jim, what gives you confidence that there's enough momentum in the underlying economy to make this not an issue of demand destruction, not an issue of the consumer increasingly crimped? Yeah, I just think, you know, the shock would hit the US economy and that would be, you know, gas prices are certainly something that we all pay every day. So that has acted like a tax in the past, but you've also got a supply side, you know, being the world's leading oil producer, which is offsetting some of that. I would also say that we've seen actually a higher oil prices in the past, 145 if I recall correctly in 2008 and in real terms, that would be over $200 a barrel. So that's a very different scenario. Markets are right to focus on how long would this conflict continue to go on? You know, US could withdraw at any point, saying it's declared victory

14:43and withdraw. So we'll see what happens here. We see Jim expectations over at the ECB as well as the Bank of England for a potential rate hike increasingly priced in and responds to higher oil prices. Do you think that people will start thinking about the same here in the US? I don't know if they go that far. I think more would have to happen before they go that far. I think the more likely scenarios that they just stay on hold longer than they otherwise would have in order to send a signal that they want to keep inflation under control. But again, it's the inflation expectations, probably that matter more than the oil price movements directly. Well, we already see airlines across Europe and Asia increasing fares. They're raising the fuel surcharges given what's going on in the war. Also, in America, we are farmed to table society. All of our food comes because of petrol and gasoline on trucks. Isn't that going to be a problem for this Federal Reserve, not just the fact that

15:44gasoline prices this morning are closer to $4 a gallon than three? Yeah, I mean, it's going to be a problem for airline inflation. But the committee looks at core inflation. So the whole point of that is to say that they're not going to react to movements in food and energy prices that can be pretty transitory and have historically been pretty transitory. So what they want is the underlying trend in inflation. And you could look at at core PCE inflation, which the committee likes, or Dallas fed trend media inflation, which throws us some of the high and low price changes that occur in the price change distribution. So, sure, yeah, people are really paying these things. It really does matter. Yes. But when you're trying to make policy for the medium term, you've got to look through some of it. Stay with us, Moulinberg, Savannah's coming up after this.

16:49Hello, hello, I'm Malcolm Gladwell, host of the podcast Smart Talks with IBM. I recently sat down with IBM's Chairman and CEO, Arvind Krishna. But I asked him, how can companies use AI to its fullest potential to create smarter business? My one advice to them, big areas you can scale. Don't pick the shiny little toys on the side. For example, if anybody has more than 10% of what they had for customer service 10 years ago, they're already five years behind it. If anybody is not using AI to make their developers who write software 30% more productive today, with the goal of being 70% more productive. So, we are not asking our clients to be the first experiment on it. We say, you can leverage what we did. We're happy to bring out all our learnings, including what needs to change in the process because the biggest change in our technology is getting people to accept

17:53that there's a different way to do things. To listen to the full conversation, visit IBM.com slash Smart Talks. Support for the show comes from public. Public is an investing platform that offers access to stocks, options, bonds, and crypto. And they've also integrated AI with tools that can assist investors in building customized portfolios. One of these tools is called Generated Assets. It allows you to turn your ideas into investable indexes. So let's say you're interested in something specific like biotech companies with high R&D spend, small cap stocks with improving operating margins, or the S&P 500 minus high debt companies. Chances are there is an ETF that fits your exact criteria. But on public, you just type in a prompt and there AI screens thousands of stocks and build a one-of-a-kind index. You can even backtest it against the S&P 500, then you can invest in a few clicks. Go to public.com slash market and earn an uncapped 1% bonus when

18:56you transfer your portfolio. It's public.com slash market. Add paid for by public holdings, brokerage services by public investing member Finra SIPC, advisory services by public advisors, SEC registered advisor, crypto services by zero hash, sample prompts are for illustrative purposes only, not investment advice. All investing involves risk of loss, see complete disclosures at public.com slash disclosures. Small businesses are the pulse of every community. They bring people together, create opportunities, and drive growth. With a widespread presence in communities across the country, Chase for Business supports small business owners at a local level. That makes it possible for you to connect, learn from each other, and grow together. There's a real commitment to seeing small businesses succeed. The Chase for Business team has knowledge and expertise that span a wide range of financial areas. They can help you make more informed decisions as you navigate the complexities of running your business. They'll help your business grow with individual guidance and convenient digital tools all in one place. With that guidance and your determination, you can take your business farther and help build a

20:01brighter future for your community. Learn more at Chase.com slash business. Chase for business, make more of what's yours. The Chase mobile app is available for select mobile devices. Message and data rates may apply. JP Morgan Chase Bank NA, member FDIC, copyright 2026, JP Morgan Chase, and company. The IEA, considering a record release of emergency oil reserves to ease surge in crude costs, this coming as German and Japanese officials announced plans to release part of their own national reserves. Samantha Dahl, the co-head of global commodity research at Goldman Sachs writing, because the straighter farmers' flows data are noisy, and the broader situation remains fluid. We've not changed our oil price forecast, but estimate the large upside risks in longer disruption scenarios. Sam joins us for more. Sam, good morning. Morning. What's your assessment of where we are right now? Never mind the PR effort coming from officials at the moment. What's this disruption currently look like? Yeah, so we're losing about

21:0215.4 million bears a day of supply from the region. If this release goes through and it looks like it will, it can offset that by about, let's say, two and a half. Well, the fastest ever release that we've had from the group was at a pace of two and a half. So you can talk about a three to four hundred million bear release, but it's not going to be all at once matching the pace one to one to the loss. So on that, we are still likely to be losing over ten million bears a day of oil from the market. So when they say four hundred, someone like you has two to two point five per day. Yeah, because at least that's what we observed in the past. What is the max pace that they've released? So you can't really count on anything bigger than that. It might happen. We have to wait and see, but based on what we've seen on net, we're still going to be losing a lot of oil day by day. And it matters because what the market is looking at is, okay, here's the size of the shock. This can reduce the size of the shock a little bit,

22:04but still it's a very large shock. So if it continues for long enough, that's when prices go back to that kind of panic mode of demand destruction. You know, when we cross a hundred dollars a barrel, to me, that's the signal being sent. It's like, oh, we can't manage this fast enough. So we need to destroy demand a little bit faster. This release can slow this down a little bit. I think Lisa was just mentioning this that, you know, it keeps the curve a little bit more managed. But when we saw the headline come out of four hundred million barrels a day, actually, we saw prices take back up a little bit. Is the market panicking that policymakers think this is going to last a lot longer? I don't think it's a panic yet. I wouldn't call it that, but remember yesterday, we also had a little bit of conflicting headlines as to whether the US head escorted a thinker or not. So I think the rebounding prices that we saw late yesterday might have been associated with that. Also, the flow through Hormuz is not really improving

23:05and to be fair, the data that we have seen so far, even though it is noisy and it is revised all the time so far, it does suggest that flow through Hormuz have not really improved. When it comes to some of that misinformation that we're seeing, how does it make it that much harder for traders, for the market to position? It creates a lot of volatility. The past two days are a perfect illustration of that because again, I think the uncertainty on duration makes such a big difference. If this is a one-month shock and we know ahead of time, it's a one-month shock, okay, we get the release, we offset most if not all of it. India can access some of the sanctioned barrels from Russia as well. We're actually okay by the end of the year. There's no panic, there's no demand destruction needed. But if it's a one-month shock but we don't know that yet, the market has to price in the risk that it might be two months, it might be three months. So that sense of urgency to destroy a little bit more of demand now to avoid

24:09inventories going to critically low levels shows up a little more. So this is what keeps us from above 100, now below 100, maybe this is going to be over soon, more confidence, oh, but the flows are still low. And then you're hit with this release from the IA, okay, so maybe the pace of drawdown in stocks is not quite as fast. So to your point, it keeps the market guessing, what are we trying to manage here? So the two aspects of it that we're going to be tracking day by day, number one, the volumes. What is the disruption every day? And what can be offset by these releases? That's number one. But number two, how long is this going to last? Where is that confidence that this can be contained within a month versus say two or three months in which case the market needs to hedge against much bigger disruptions? I'm struck by the dissonance between the financialization of some of these futures contracts and the physical world, which takes time is messy, needs to be restarted, has time lag. I'm just wondering based on what we've heard so far

25:12about closures or stoppages, how long you think it will take to restart some of the production that has already been taken offline? Yeah, you have a little over six million bears a day already down from production of crude oil in the region. We estimate that if it were to restart today, it would take about four weeks to get back to normal. Four weeks, four weeks. So I guess how are people saying if this resolves in the next week, there won't be a prolonged increase risk premium on oil prices? I guess can we just say that from here on out, we can average $80 a barrel or $85 a barrel for the rest of the year. If it ends in a week, let alone longer. Yeah, it's a good point. We have to remember that going into this year, the market wasn't as surplus. So we are coming from a position of comfortable levels of inventories, inventories in OECD. They had been at pretty average levels going into the shock. If you look at the USSR, okay, it wasn't the low side. But overall

26:15commercial stocks were pretty average. China's strategic reserves are higher than normal. So we came in, okay, in stocks and with a surplus. And now we're eating away into that surplus and getting potentially into a deficit. So yes, to your point, there is a sustained impact on storage. But especially if we do get the release from the IEA, that can be modulated over time. So that storage won't look that comfortable for a few weeks, but over enough months, say five, six, seven months, where that release from the IEA ends, then you can be back at a more comfortable position. Asam, Lisa told you about the time it takes. Can we sit on that just for an extra beat? The difference between cutting production and shutting-in production. What's the difference between those two headlines and why is it so significant? So the way that we think about it, it's more the difference between stopping exports and stopping production. So for example, if I stop exports today, but I have spare capacity at my inventories, then I can just stockpile,

27:20stockpile, stockpile. When the chaos comes down, I can just send that back to the market. So your delay volume is as opposed to losing them. But when you're shutting-in production, when you actually halt your production, because you don't have where to put it, then that's production lost. This is the Bloomberg surveillance podcast, Bringing You, the best in markets, economics and geopolitics. You can watch the show live on Bloomberg TV, weekday mornings from 6am to 9am Eastern, subscribe to the podcast on Apple, Spotify or anywhere else you listen. And as always, on the Bloomberg terminal and the Bloomberg business app. If you follow markets, you know the value of long-term thinking. You plan, you diversify, you prepare for volatility. But in life, even the best strategies can't prevent every bad day, a fire, a loss, a disruption that demands immediate attention. When that happens, what matters isn't just what you planned, it's who shows up. That's

28:21where Cincinnati Insurance comes in. For more than 75 years, they've helped individuals and businesses navigate life's toughest moments with care, expertise and personal attention. Together with independent agents, Cincinnati Insurance focuses on relationships, not transactions. Their approach is grounded in experience, follow-through and trust built over time. Bad days happen. And when they do, you deserve an insurance partner who understands risk, respects what you've built and is ready to help you move forward. The Cincinnati Insurance companies, let them make your bad day better. Find an independent agent at CINFIN.com. With Bolly from Eyeshares, you get access to both monthly income and growth potential in one simple ETF. It's the best of both worlds. Discover Bolly, Eyeshares large cap premium income active ETF. Eyeshares, the market is yours. Visit www.ishares.com to view perspectives for investment objectives, risks, fees, expenses and other information that you

29:24should read and consider carefully before investing. Risks include principal loss in the use of derivatives which could increase risk and volatility. Monthly income is not guaranteed, prepared by BlackRock Investments LLC. Deadline shift, plans change, and sometimes you just need promo products fast. Turn to forimprint. Forimprint has hundreds of promotional items available with 24 hour turnaround. From custom apparel and drinkware to trade show gear, writing tools and more. And there's 360 degree guarantee promises your logo will be printed with care. Your order ships fast and it'll show up right and on time. That's the certainty of forimprint. Check out the full 24 hour selection at forimprint.com. Forimprint for certain.