WEBVTT - Bloomberg Surveillance TV: April 8th, 2026 0:00:02.360 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.640 --> 0:00:15.400 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.480 --> 0:00:18.680 with Lisa Bromwitz and Amrie Hordern. Join us each day 0:00:18.720 --> 0:00:22.280 for insight from the best in markets, economics, and geopolitics 0:00:22.400 --> 0:00:24.880 from our global headquarters in New York City. We are 0:00:24.920 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.720 --> 0:00:31.280 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.280 --> 0:00:33.919 anywhere else you listen, and as always on the Bloomberg 0:00:34.040 --> 0:00:35.840 Terminal and the Bloomberg Business app. 0:00:36.680 --> 0:00:38.720 Here's the latest, the US and Iran agreeing to a 0:00:38.760 --> 0:00:42.640 two week ceasefire, with Tehran vowing to reopen the street 0:00:42.800 --> 0:00:44.960 for moves. Joining US now is someone who's worked in 0:00:44.960 --> 0:00:47.600 the Defense Department, who's worked with military forces in the US, 0:00:47.600 --> 0:00:52.120 has extensive experience in this entire region. Seth Jones of CSIS, 0:00:52.360 --> 0:00:54.120 thank you so much for being with us. I want 0:00:54.120 --> 0:00:57.760 to start with your response to the ceasefire. How realistic 0:00:57.880 --> 0:01:00.880 you see it holding for after that two week and 0:01:00.920 --> 0:01:02.560 even entire two week period. 0:01:03.640 --> 0:01:06.320 Well, look, I think it's helpful that there has been 0:01:06.880 --> 0:01:11.080 there have been negotiations between the US and the Iranians. 0:01:11.280 --> 0:01:15.320 I think it's helpful and a step forward that we 0:01:15.360 --> 0:01:18.919 are at a ceasefire. I just think even in talking 0:01:18.920 --> 0:01:22.520 to Israeli officials recently, I think they do not expect 0:01:22.840 --> 0:01:27.560 the Iranians or Iranian partner forces to abide by any 0:01:27.600 --> 0:01:31.080 deal over the medium to long term. There were already 0:01:31.800 --> 0:01:35.400 sirens going off in Tel Aviv last night for potential 0:01:35.440 --> 0:01:40.240 incoming Iranian rockets. So I do have low expectations that 0:01:40.319 --> 0:01:43.040 this is going to stick over the next two weeks. 0:01:43.560 --> 0:01:45.800 So what do you think has actually been accomplished, Seth. 0:01:47.000 --> 0:01:49.120 Well, it's hard to say. I mean, when I look 0:01:49.120 --> 0:01:52.800 at the ten point plan that the Iranians have put together, 0:01:53.600 --> 0:01:57.320 most of those, at least many of the points are 0:01:57.560 --> 0:02:00.360 completely unacceptable for the US of the long run. They 0:02:00.360 --> 0:02:04.640 are the withdrawal of all US forces, particularly combat forces 0:02:04.680 --> 0:02:09.600 from the region, Iranian control of the Strait, and a 0:02:09.680 --> 0:02:15.360 number of other things, allowing Iran to have missiles and 0:02:15.560 --> 0:02:21.040 drone programs, and then compensation for the damage that Iran 0:02:21.120 --> 0:02:24.160 has incurred over the past several weeks of the conflict. 0:02:24.560 --> 0:02:27.680 I mean, I don't think any there's no realistic expectation 0:02:27.760 --> 0:02:30.639 that the US is going to provide compensation probably worked 0:02:30.680 --> 0:02:32.079 off states along those lines. 0:02:32.520 --> 0:02:36.480 I think there's a lot to hammer out seth on 0:02:36.480 --> 0:02:38.760 that point, in terms of a lot to hammer out realistically, 0:02:39.000 --> 0:02:40.760 what do you think could be achieved from that ten 0:02:40.800 --> 0:02:43.480 point plan? What do you think of the lowest hurdles 0:02:43.520 --> 0:02:44.080 to be too. 0:02:45.800 --> 0:02:50.160 Well, I think the lowest hurdles would be some kind 0:02:50.200 --> 0:02:55.600 of a joint arrangement involving countries in the region, particularly 0:02:55.680 --> 0:02:59.720 ones that are on the Straight of Hormuz that share. 0:03:01.120 --> 0:03:02.520 Any tolls that. 0:03:04.200 --> 0:03:07.280 Are charged to commercial ships going through the region, and 0:03:07.320 --> 0:03:12.239 potentially also some security of commercial vessels that go through 0:03:12.240 --> 0:03:15.000 the region. So it's not all on the US's shoulders, 0:03:15.560 --> 0:03:19.600 but it'll hinge on really how much trust any of 0:03:19.600 --> 0:03:22.200 these countries, including the US, have that the Iranians want 0:03:22.240 --> 0:03:24.680 fire on commercial vessels, and I think we'll have to see. 0:03:25.800 --> 0:03:28.320 And then you obviously talk about the toll, the toll, 0:03:29.240 --> 0:03:32.320 this tollbooth not being a realistic prospect, can maybe could 0:03:32.360 --> 0:03:34.639 you talk a little bit about what's on the sanctioned 0:03:34.639 --> 0:03:37.800 relief side or also the offshore frozen funds as well, 0:03:37.800 --> 0:03:42.760 which could maybe provide some compensation in Europe that toll 0:03:42.800 --> 0:03:43.440 booth instead. 0:03:44.160 --> 0:03:47.480 Yeah, I mean it's possible that there could be some 0:03:47.600 --> 0:03:52.160 sanctions relief for Iran. I mean, the challenge is that 0:03:53.280 --> 0:03:57.640 both the current Trump administration and even the Biden administration 0:03:58.520 --> 0:04:04.160 had pretty tough sanctions against Iran. I find it unlikely 0:04:04.240 --> 0:04:07.000 that the vast majority of those sanctions are going to 0:04:07.000 --> 0:04:13.200 be relieved with the prospect of Iran continuing to have 0:04:13.440 --> 0:04:18.880 a range of partner forces and pretty significant capabilities. But 0:04:18.920 --> 0:04:22.080 there could be some sanctions relief that comes with any 0:04:22.160 --> 0:04:23.440 kind of longer term deal. 0:04:23.720 --> 0:04:26.440 So a few percents of how closely aligned the US 0:04:26.680 --> 0:04:29.960 is with the GCC, with Saudi Arabia and United Arab 0:04:30.000 --> 0:04:32.680 Emirates and cutter and the other nations in the region. 0:04:33.839 --> 0:04:38.039 Well, I think they are aligned in some ways. I 0:04:38.040 --> 0:04:41.640 think that, you know, one challenge right now is some 0:04:41.800 --> 0:04:45.320 Golf states appear to have openly called for the end 0:04:45.520 --> 0:04:49.800 of the regime in Iran. That does not look like 0:04:49.880 --> 0:04:54.160 it's going to take place. The Supreme Leader Son is 0:04:54.200 --> 0:04:57.720 in power at the moment, the regime is largely the 0:04:58.320 --> 0:05:01.360 Islamic Polutionary Guard is still in place. But I do 0:05:01.440 --> 0:05:04.680 think there is a joint viewed get the straight open. 0:05:04.720 --> 0:05:07.000 I mean, I think it's a single most important issue. 0:05:07.000 --> 0:05:09.400 I think that the US shares it's a common interest 0:05:09.400 --> 0:05:10.239 between the Gulf states. 0:05:10.240 --> 0:05:12.000 In the US, is there a sense of what it's 0:05:12.040 --> 0:05:14.480 going to take seth in terms of have we actually 0:05:14.480 --> 0:05:17.680 taken ground troops off the table? Have we actually taken 0:05:18.160 --> 0:05:21.960 a further more aggressive stance in the region and put 0:05:21.960 --> 0:05:23.240 that aside for the time being. 0:05:24.839 --> 0:05:28.920 I don't think we've taken the prospect of using either 0:05:28.960 --> 0:05:31.880 ground or naval forces completely off the table. They're still 0:05:31.920 --> 0:05:34.440 in the region. The US has naval ships that could 0:05:34.440 --> 0:05:38.640 be used. The US also has ground forces that could 0:05:38.640 --> 0:05:42.240 be used, whether it's to take islands in the in 0:05:42.279 --> 0:05:45.120 and around the Straight of Foremus or on the shoreline 0:05:45.120 --> 0:05:48.760 of Iran. So I think if the US wants to escalate, 0:05:48.800 --> 0:05:51.120 if it does not feel that Iran is abiding by 0:05:51.240 --> 0:05:56.400 any kind of a deal, it could use those forces, 0:05:56.440 --> 0:05:58.240 either naval or ground, as a back. I mean the 0:05:58.240 --> 0:06:01.440 problem is there would be risky. You do risk naval 0:06:01.440 --> 0:06:04.040 forces getting shot at. I think I should cruise missiles 0:06:04.160 --> 0:06:06.400 coming from around, So there are some risks involved. 0:06:07.000 --> 0:06:10.520 Stay with US mulblinderg surveillance coming up after this. 0:06:19.839 --> 0:06:23.960 I'm readercent of energy aspects writing. Even after Hormo's flows restart, 0:06:24.320 --> 0:06:29.600 most producers will need will need several months to restore production. 0:06:29.760 --> 0:06:32.240 I'm readacent, joins us now, I'm I would love to 0:06:32.240 --> 0:06:35.240 get your sense of just how much has changed given 0:06:35.400 --> 0:06:37.120 the truth that was Now it's last night. 0:06:39.839 --> 0:06:42.000 I think I completely agree with what Javier said. If 0:06:42.000 --> 0:06:45.320 you read the statements, they're actually two quite different statements. 0:06:45.880 --> 0:06:50.400 We're hearing from refiners and lifters who are trying to 0:06:50.480 --> 0:06:54.000 kind of get a ship in. Firstly, the cost is prohibited. 0:06:54.120 --> 0:06:56.719 You know, you're talking about more than forty dollars a barrel, 0:06:57.839 --> 0:07:00.719 even if you can get insurance. There's a huge amount 0:07:00.720 --> 0:07:03.440 of confusion with regards to whether they need to pay 0:07:03.440 --> 0:07:05.480 the Ranians, how they're going to pay the Ranians, because 0:07:05.520 --> 0:07:08.640 payment to be made to Theirranians is not easy given 0:07:08.680 --> 0:07:13.280 the sanctions. The Iranians are actually sending out messages to 0:07:13.520 --> 0:07:16.440 vessels outside the strait saying that you know, if you 0:07:16.680 --> 0:07:18.400 are actually going to pass the straight or if you're 0:07:18.400 --> 0:07:21.240 going to come in, you need our permission. So this 0:07:21.280 --> 0:07:23.679 is by no means a straight that's open for business. 0:07:23.840 --> 0:07:26.800 To be very clear, what I would say is that 0:07:27.480 --> 0:07:30.840 we are likely to see the ships that are within 0:07:30.920 --> 0:07:33.480 the Strait right now whether they're empty or whether they're 0:07:33.480 --> 0:07:36.840 loaded with crudent products. We've counted, our cargo tracking team 0:07:36.920 --> 0:07:40.520 counts about two hundred and fifty vessels. Those over time 0:07:40.920 --> 0:07:44.760 could potentially move out with Iran's permission, but I don't 0:07:44.800 --> 0:07:47.200 think you'll see vessels moving in, and I think that's 0:07:47.240 --> 0:07:50.480 going to be the critical thing unless you actually have 0:07:50.920 --> 0:07:53.560 a complete cease far, not just a two week one. 0:07:53.840 --> 0:07:55.880 But we know that hostilities. 0:07:55.240 --> 0:08:01.040 Have ended, Amrita. When thinking about the growth versus inflation 0:08:01.120 --> 0:08:04.560 trade off, I'm just wondering, have you seen any evidence 0:08:04.680 --> 0:08:07.720 of demand destruction in these last several weeks? 0:08:09.960 --> 0:08:12.160 Great question, because you know, and you guys were just 0:08:12.200 --> 0:08:15.760 talking about the divergence between actual kind of physical prices 0:08:15.760 --> 0:08:19.200 and futures prices. The problem is everything is being reflected 0:08:19.200 --> 0:08:21.560 in the physical price, right. You know, dated Brentons trading 0:08:21.600 --> 0:08:23.760 above one hundred and forty dollars do buy traded back 0:08:23.840 --> 0:08:25.920 in a few weeks ago at one hundred and sixty 0:08:26.320 --> 0:08:29.680 dollars per barrel, and that's actually being reflected in products prices. 0:08:29.920 --> 0:08:32.040 If you look at diesel, if you look at jet fuel, 0:08:32.320 --> 0:08:34.920 they've been trading over two hundred dollars for barrel, even 0:08:34.960 --> 0:08:38.079 in the US, and yes, we have seen some demand 0:08:38.160 --> 0:08:41.920 destruction in parts of Asia, partly also because governments have 0:08:41.960 --> 0:08:45.040 stepped in and asked for rationing in advance or as 0:08:45.160 --> 0:08:48.560 kind of the crisis has progressed. So we have definitely 0:08:48.600 --> 0:08:52.319 seen about a million barrels per day of reduction, mostly 0:08:52.360 --> 0:08:55.359 in jet fuel also, you know, given the flight cancelations 0:08:55.360 --> 0:08:57.760 in the Middle East, but also in like NAFFA, LPG, 0:08:58.040 --> 0:09:01.560 so steam crackers, you know, things or units that would 0:09:01.600 --> 0:09:04.040 actually make plastics effectively. 0:09:04.120 --> 0:09:04.240 Right. 0:09:04.240 --> 0:09:07.160 So again the challenge we have in this is that 0:09:07.480 --> 0:09:11.040 because this is hitting Asia first, it's a really long 0:09:11.559 --> 0:09:14.400 time lag before it hits the West, right, whether it's 0:09:14.440 --> 0:09:18.000 the products itself jet fuel, gasoline, diesel, or the end 0:09:18.040 --> 0:09:20.280 products it's you know, the clothes we're wearing or all 0:09:20.320 --> 0:09:22.720 the kind of plastic goods that we consume, and that's 0:09:22.760 --> 0:09:25.640 why there's so much complacency in the market. But yes, 0:09:25.679 --> 0:09:27.800 we have seen the demand destruction and I don't think 0:09:27.840 --> 0:09:28.400 it's over. 0:09:28.320 --> 0:09:32.360 Yet, Rita, How long is that lag time before maybe 0:09:32.360 --> 0:09:35.120 you're going to say ongoing higher oil prices and higher 0:09:35.200 --> 0:09:38.360 products product prices, even if the cease fire were to 0:09:38.360 --> 0:09:38.920 hold today. 0:09:41.520 --> 0:09:43.640 Yeah, Look, the damage in some ways has been done. 0:09:43.840 --> 0:09:44.040 Right. 0:09:44.120 --> 0:09:46.520 We were all kind of talking about this big surplus 0:09:46.520 --> 0:09:49.319 in oil markets. Our surplus was definitely not as big 0:09:49.320 --> 0:09:51.200 as some of the US investment banks out there, but 0:09:51.240 --> 0:09:53.559 still it was a big surplus that's been wiped out. 0:09:53.600 --> 0:09:53.840 Now. 0:09:54.480 --> 0:09:57.440 All that Russian oil that was on water floating around 0:09:57.559 --> 0:09:59.720 that's now gone. India's taken all of that. So for 0:09:59.760 --> 0:10:02.240 the market, we're pretty much starting from scratch, right, so 0:10:02.320 --> 0:10:04.760 we are going to be trading in a higher range. 0:10:05.679 --> 0:10:08.560 But more importantly to your question that when do we 0:10:08.679 --> 0:10:11.000 see that impact. It's about a two and a half 0:10:11.080 --> 0:10:13.520 month lag because Asia would be buying the crude in 0:10:13.559 --> 0:10:16.600 March that arrives in April, they process the or they 0:10:16.600 --> 0:10:19.040 make the products, and then they send it west. So 0:10:19.080 --> 0:10:21.640 the earliest the West is going to feel the real 0:10:21.720 --> 0:10:24.959 pinch is mad really into June. So we haven't seen 0:10:25.040 --> 0:10:27.480 the actual shortages being felt yet. 0:10:28.600 --> 0:10:32.200 Stay with us. Mulplinberg surveillance coming up after this. 0:10:41.400 --> 0:10:44.120 Julian Emmanuel of Evercore is I joining us here in 0:10:44.160 --> 0:10:46.760 the studio. Julian, Before we get into it, what's your 0:10:46.800 --> 0:10:48.960 response to the ceasefire and how much you can really 0:10:48.960 --> 0:10:49.640 buy into it? 0:10:49.960 --> 0:10:52.360 Well, so I think we just have to step back 0:10:52.720 --> 0:10:56.480 and say two things here. Number one, there's a huge 0:10:56.520 --> 0:11:00.400 sire of relief that the incendiary language and and the 0:11:00.440 --> 0:11:03.760 inflamed rhetoric of the last three days on all sides 0:11:04.120 --> 0:11:07.280 is being set aside for hopefully at least two weeks, 0:11:07.280 --> 0:11:11.040 perhaps longer. But then when you think about where the 0:11:11.040 --> 0:11:16.480 markets were and are you know, taken individually the degree 0:11:16.480 --> 0:11:21.400 of hedging in stocks, credit bonds all bearish, and oil 0:11:21.559 --> 0:11:25.560 all bullish were at extremes going back to the pandemic. 0:11:26.200 --> 0:11:29.560 Taken collectively, the amount of hedging, and I've been doing 0:11:29.600 --> 0:11:32.160 this for a while. I was a junior trader on 0:11:32.200 --> 0:11:35.160 the floor during the First Gulf War. There is no 0:11:35.320 --> 0:11:39.880 precedent for the collective amount of hedging. So from that perspective, 0:11:40.240 --> 0:11:43.560 you know, this is a sigh of relief that we 0:11:43.600 --> 0:11:47.079 do think has some staying power. But again, as we've 0:11:47.120 --> 0:11:49.920 been saying, the devil will be in the details over 0:11:49.960 --> 0:11:50.800 the next several weeks. 0:11:50.880 --> 0:11:52.880 So if it has staying power, that means it's something 0:11:52.920 --> 0:11:55.120 that is tradable and that you do see upside here 0:11:55.160 --> 0:11:57.599 in a number of different markets. How much is it 0:11:57.640 --> 0:12:01.080 concentrated in the United States versus say, Europe versus say, 0:12:01.200 --> 0:12:02.080 Southeast Asia. 0:12:02.840 --> 0:12:06.400 Well again, if you go back to the oil price, 0:12:06.480 --> 0:12:11.720 which is essentially the lynchpin for everything here, the sigh 0:12:11.760 --> 0:12:16.320 of relief being breathed in Europe this morning is proportionately 0:12:16.440 --> 0:12:21.439 larger because the effect on elevated oil prices on Europe 0:12:21.480 --> 0:12:24.719 is also proportionally larger. But when you think about it, 0:12:24.840 --> 0:12:28.720 our view has been that the bull market that started 0:12:28.760 --> 0:12:32.000 in October of twenty twenty two has further to go. 0:12:32.600 --> 0:12:34.880 We thought that a week and a half ago as 0:12:34.880 --> 0:12:38.760 you were plumbing back towards sixty three hundred and frankly, 0:12:38.920 --> 0:12:42.080 what we find in bull market history is the stocks, 0:12:42.240 --> 0:12:47.360 themes and geographies that lad and US tech has been. 0:12:47.559 --> 0:12:50.680 All of those end up leading. So from our point 0:12:50.720 --> 0:12:53.920 of view, the biggest thing is the fallen yields here 0:12:54.360 --> 0:12:59.559 telling you that that is an endorsement of higher multiple equities. 0:13:00.320 --> 0:13:02.720 Clearly what is gaining the most this morning. You can 0:13:02.720 --> 0:13:05.400 see this sort of this rush into big tech seeing 0:13:05.480 --> 0:13:08.600 valuations is more attractive after the selloff. I wonder more 0:13:08.600 --> 0:13:11.160 broadly though, about the drop in yields, because you aren't 0:13:11.160 --> 0:13:13.840 seeing necessarily yields going all the way back to where 0:13:13.840 --> 0:13:16.160 they were on February twenty seventh, and you're not seeing 0:13:16.240 --> 0:13:18.200 oil prices go all the way back to where they 0:13:18.240 --> 0:13:20.680 were on February twenty seventh. And even if this deal 0:13:20.720 --> 0:13:23.880 isn't acted in some form and a prolonged ceasefire, it 0:13:23.920 --> 0:13:27.080 takes hold unclear how much oil prices go back to 0:13:27.120 --> 0:13:29.880 where they were. Does there have to be a higher 0:13:29.920 --> 0:13:34.320 inflationary understanding going forward that will affect those bond yields? 0:13:34.400 --> 0:13:38.400 No, And look, to be clear, our has few is 0:13:38.440 --> 0:13:42.400 that the landing zone for oil is certainly going to 0:13:42.400 --> 0:13:44.960 be much higher than it was. This is a structural 0:13:45.080 --> 0:13:48.040 change that will take years to work through the system. 0:13:48.360 --> 0:13:52.120 So we're looking at a brand price that ultimately lands 0:13:52.120 --> 0:13:55.320 in the mid to high eighties, WTI the low to 0:13:55.400 --> 0:13:59.319 mid eighties, and for stocks, both of those are perfectly 0:13:59.400 --> 0:14:02.360 fine given the fact that over the course of years 0:14:02.360 --> 0:14:08.719 and decades the reliance on oil for equity markets has diminished. 0:14:09.240 --> 0:14:13.320 Obviously it is still quite significant, as we've seen by 0:14:13.360 --> 0:14:17.160 the threat, but again here for us, it is not 0:14:17.840 --> 0:14:22.040 if you continue subsiding from here, is not at all 0:14:22.400 --> 0:14:26.120 a material headwind for either growth or the equity markets. 0:14:26.200 --> 0:14:29.840 How much of a linchpin will potentially earnings be even 0:14:29.880 --> 0:14:31.640 more so now given the fact that that has been 0:14:31.680 --> 0:14:34.760 the one aspect of the market that has upheld all optimisms, 0:14:34.800 --> 0:14:36.720 starting off with delta later this hour. 0:14:37.080 --> 0:14:42.000 So if in the middle of February, before the conflict began, 0:14:42.640 --> 0:14:47.440 I told you that earnings would be revised higher between 0:14:47.600 --> 0:14:51.640 here and then, you'd have called me a fool. Earnings 0:14:51.680 --> 0:14:56.440 have been revised higher, and actually we are below consensus 0:14:56.640 --> 0:14:59.600 projecting an earnings growth rate of over eleven percent for 0:14:59.640 --> 0:15:02.840 twoth thousand and six. And the history of double digit 0:15:02.920 --> 0:15:07.680 earnings growth is incredibly powerful. Since nineteen ninety six, eleven 0:15:07.760 --> 0:15:10.600 years of double digit earnings growth, the market has been 0:15:10.680 --> 0:15:12.680 up ten out of eleven years. 0:15:13.320 --> 0:15:16.840 This is the Bloomberg Surveillance Podcast, bringing you the best 0:15:16.920 --> 0:15:20.480 in markets, economics, angiopolitics. You can watch the show live 0:15:20.560 --> 0:15:23.560 on Bloomberg TV weekday mornings from six am to nine 0:15:23.600 --> 0:15:27.320 am Eastern. 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