5 Things You Need to Know to Start Your Day: Americas

Good morning. Former bond king Bill Gross turns away from Treasuries, Boeing’s woes continue and the Bitcoin rally cools ahead of the SEC’s [View in browser]( [Bloomberg]( Good morning. Former bond king Bill Gross turns away from Treasuries, Boeing’s woes continue and the Bitcoin rally cools ahead of the SEC’s crucial spot ETF decision. Here’s what’s moving markets. — [Charlotte Hughes-Morgan](. Gross shirks treasuries Global bonds rebounded yesterday, after sliding in the opening days of 2024 on concerns the rally late last year had gone too far, too fast. But Bill Gross, who earned himself the title “bond king” at Pacific Investment Management, has signaled he is now [steering clear](of Treasuries. In a post on X, formerly known as Twitter, Gross said he sees 10-year Treasury Inflation-Protected Securities offering 1.80% yield as “the better choice” if one needs to buy bonds compared to “overvalued” US 10-year Treasuries at 4%. As of 10:30am GMT, the benchmark 10-year yield was trading above that level. Gross [made millions]( at the end of last year after reaping the rewards of the furious bond rally on a big bet the Federal Reserve would pivot toward interest-rate cuts for 2024. Boeing’s woes More bad news for Boeing as the fallout from the mid-flight fuselage blowout on an Alaska Airlines flight continues. Both Alaska Air and United Airlines have reported finding more [loose bolts]( during maintenance checks on grounded Boeing 737 Max 9 planes. The Chair of the National Transportation Safety Board said her agency may broaden the probe into other Max 9 jets beyond the model on which the accident occurred. A wider inspection would hinder Boeing’s plans to get the aircraft back into service and avoid a lengthy grounding. Yesterday, [Emirates President Tim Clark]( flagged Boeing’s recent quality control problems and said the accident marks a setback for the manufacturer. Boeing’s shares closed down 8% in trading yesterday and dropped 0.4% in premarket trading this morning. Hear more about the Boeing investigation on our [Daybreak Podcast](. Bitcoin steadies Bitcoin has [dippedÂ](after briefly surging past $47,000 on bets that the US is poised to approve the launch of the nation’s first exchange-traded funds investing directly in the world’s largest digital asset. Yesterday, Blackrock, Ark and several other prospective issuers of the exchange-traded funds [ filed amended forms]( for their applications with the SEC. The regulator is due to take action on at least one of their applications by tomorrow. Bitcoin’s boosters say ETFs backed by the largest crypto token would represent a watershed moment for digital assets but SEC Chair Gary Gensler has repeatedly argued that crypto is rife with fraud and misconduct. Billions of dollars are at stake, representing potential inflows from retail and institutional investors alike. Place your rate cut bet Market participants are[rushing to determine]( just how soon the end of quantitative tightening could start. And the bets are diverging. Strategists at Bank of America and Barclays are angling for a first cut in April, with the runoff wrapping up by mid-summer. Deutsche Bank expects the unwind to start in June, and Morgan Stanley says policymakers want to give markets plenty of time to prepare and won’t act until September.  Federal Reserve Governor [Michelle Bowman]( said yesterday that inflation could fall toward the Fed’s 2% target with interest rates held at current levels, offering potential backing for lowering borrowing costs if price pressures fade. Bank of Atlanta President [Raphael Bostic]( also noted that inflation has come down more than he expected. Coming Up... US equities are currently poised for moderate declines at market open as the tech-led bounce at the start of the week fades. Treasuries are trading fairly flat. Coming up on the data front, we’ll get the NFIB Small Business Index and the US trade balance today, but the data shouldn’t move the dial too much where markets are concerned. The real focus this week will be on that December inflation print due Thursday. It’s a quieter day for corporate earnings as well, ahead of the spate of reporting from Wall Street later in the week. The Fed’s Michael Barr is set to speak on bank regulation later. Life expectancy in the US keeps going up and many of today's 5-year olds are likely to live until 100. How to build an investment portfolio that benefits from the aging society? How to protect retirement savings from inflation? Share your thoughts in a brief MLIV Pulse [survey](. What We’ve Been Watching This is what’s caught our eye over the past 24 hours. - iPhone survives [16,000-foot fall]( from the Alaska Airlines flight - Read [The Big Take](: Xi, Biden and the $10 trillion cost of war over Taiwan - A Chinese billionaire is the [second-biggest]( foreign owner of US land - Hedge funds target ‘[catastrophic](’ ESG lapses for huge returns - Blackstone’s first private equity fund for rich individuals gets [$1.3 billion]( - Peruse Bloomberg Businessweek’s [50 Companies to Watch in 2024]( - Bottled water contains [more plastic particles]( than previously thought And finally, here's what Joe’s interested in this morning There's a lot of debate about why inflation has fallen as far as it has over the past 18 months. How much was the Fed? How much was it about healing supply chains or broader normalization of economic activity? Well, whatever the answer, one big factor -- at least on the headline level -- has been the fall in oil prices. In late 2022, WTI crude was in the mid $90 range. Today it's a little bit over $72, with just this week Saudi Arabia announcing more price cuts amid growing supply. One reason global supply is high is simply the unexpected recovery of US supply. After a lot of talk about how US oil producers were prioritizing profitability over volume (this keeping a lid on production) we recently hit all-time highs in daily output according to the DOE. Anyway, on a special [new episode of the Odd Lots podcast](, we spoke with Lael Brainard, [the NEC Director at The White House](. We talked about the general state of the economy, why the labor market has remained as resilient as it has, why Americans are frustrated with the state of the economy, and what further can be done to lower the cost of living. What's interesting to me is that she wasn't particularly inclined to brag about the above line. When it comes to energy needs, Brainard and The White House haven't made a big deal about US production hitting all-time highs. And when it comes to securing future energy needs (which will be significant, especially if the US grows as an industrial powerhouse) most of the talk is about alternatives or renewables, rather than oil or natural gas. Politics isn't my thing of course, but as I said on the podcast, my sense is that if the former President were in office we might be hearing more about the above chart a little bit more. Check out the episode on [Apple](, [Spotify]( or elsewhere. Follow Bloomberg's Joe Weisenthal on X [@TheStalwart]( Like Bloomberg's Five Things? [Subscribe for unlimited access]( to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. 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