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

Good morning. Another incident between Iran and Israel adds to investor nervousness and some predict the flight from risk assets will contin [View in browser]( [Bloomberg]( Good morning. Another incident between Iran and Israel adds to investor nervousness and some predict the flight from risk assets will continue. Plus, Netflix disappoints with a plan to withhold some key subscriber numbers. Here’s what people are talking about. — [Sofia Horta e Costa]( Want to receive this newsletter in Spanish? [Sign up to get the Five Things: Spanish Edition newsletter](. Markets on edge Treasuries are up and S&P 500 futures are dropping as investors try to discern the rapidly developing situation in the Middle East. The market reaction was stronger initially when US officials said Israel had struck targets in Iran, [though the flight-to-safety has since eased]( in Friday’s trading. That’s after officials in Tehran downplayed the incident and sought to allay concerns of further escalation from Iran, where state media said an attempted Israeli drone strike had failed. The dollar is now flat, for example, Bitcoin has rebounded and oil has erased much of the morning’s spike. Investors were already nervous heading into today’s session, pulling money out of [stock funds yet again]( and taking outflows to more than $21 billion in two weeks, says the team at Bank of America. A senior Barclays banker predicts [the flight from risk assets]( will continue. Dangling 5% yields Bond powerhouses including Pimco, BlackRock and Capital Group are [dangling the prospect of 5% yields]( to lure investors into actively managed fixed-income funds. The pitch appears to be working: about $90 billion flowed into active bond funds in the first quarter, the most for any three-month period since mid-2021. Fund managers see a window of opportunity for investors to lock in yields before the Federal Reserve cuts interest rates — even if the prospect of that happening gets more distant by the week. “Investors are getting the best compensation on fixed income in 20 years,” according to Ryan Murphy, head of fixed-income business development at Capital Group. Netflix disclosure disappoints Netflix shares are dropping more than 6% in early US trading after its decision to stop disclosing two key metrics to investors from the first quarter of 2025. Analysts said the unexpected move, which will remove numbers showing paid quarterly membership and revenue per subscriber, will make mapping growth more challenging and implies a slowdown. As Paolo Pescatore, founder and analyst at PP Foresight, put it: “the movement to no longer disclose quarterly subscriptions from next year will not go down well.” The decision cast a shadow on Netflix’s otherwise[blowout first-quarter numbers](, with 9.33 million customers added in the period — far more than expected. Paramount’s new suitors One of the biggest gainers in early New York trading this morning is Paramount, the parent of CBS and MTV, with the stock up almost 10%. That’s as Apollo Global Management and Sony [consider a joint offer]( to buy the film and TV giant, reports my colleague [Lucas Shaw](. A joint bid could complicate the exclusive talks [already in the works]( between Paramount and Skydance Media, setting up a potential bidding war between the Sony-Apollo group and technology mogul David Ellison — the son of Larry Ellison, co-founder of Oracle. The New York Times says Sony-Apollo would offer cash for shares of Paramount and take the company private through a joint venture. Coming up… The US economic calendar is light — one thing to watch will be the Federal Reserve’s release of its April Financial Stability Report later in the day. In terms of central bank speakers, Chicago Fed President Austan Goolsbee is scheduled to participate in a moderated Q&A at the SABEW annual conference. Earnings are expected from American Express as well as Procter & Gamble. Colombia releases its trade figures for February. What we’ve been reading This is what’s caught our eye over the past 24 hours. - Some hedge funds [may be too big to fail]( for the bond market, IMF warns. - Armani [doesn’t rule out a merger](or IPO in his firm’s succession plan. - Apple pulls Whatsapp, Telegram and Signal from its [app store in China](. - Unilever will [water down]( its ESG targets as the CEO focuses on profit. - [“Energy nerds”](are obsessing over home electricity. - Japan’s government edges closer to expanding [childcare allowances](. And finally, here's what Ven’s interested in this morning German and US government bonds emerged as the securities of choice in a comprehensive study of haven assets back in 2020. The experience may be no different this time around: bunds may rally in Europe, and together with Treasuries, will be the haven of choice for investors if tensions escalate in the Middle East. Crude oil will also benefit, though any rally will be driven more by supply concerns given the geographical epicenter of the conflict. Gold has surged some 17% over the past couple of months, but the timing of the rally suggests that investors do see it more as a haven play now. That’s because its surge isn’t explained by factors that would typically send prices higher. For instance, longer-dated inflation-adjusted yields in the US have increased since the end of February, making it an atypical scenario for gold to rise. Not only that. A couple of months ago, traders were pricing in some 85 basis points of policy loosening from the Fed this year. Now, though, they see less than two interest-rate cuts — another factor that should have sapped enthusiasm toward gold. The long and the short of it is that bullion should continue to do well if the conflict stays on the front burner. All told, just into the fourth month of the year, investors’ playbook for 2024 had already been upended with most of their favored trades — weaker dollar, stronger yen and oodles of Fed rate cuts — all having found no traction so far. A potential escalation of the conflict in the Middle East adds one more curve ball to the mix. Ven Ram is a cross-asset strategist for Bloomberg’s Markets Live. 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. [Bloomberg Markets Wrap: The latest on what's moving global markets. Tap to read.]( Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. 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