WEBVTT - Bloomberg Daybreak: June 1, 2022 - Hour 2 (Radio) 0:00:02.680 --> 0:00:05.840 Live from the Bloomberg Interactive Berger Studios. This is Bloomberg 0:00:05.920 --> 0:00:09.119 day Break for a Wednesday, June one, two Coming up 0:00:09.119 --> 0:00:11.800 this hour, Wall Street kicks off a new trading month 0:00:11.840 --> 0:00:14.480 after May saw the sp five hundred seater on a 0:00:14.560 --> 0:00:17.880 bear market. Treasury Secretary Janet Yellen says she got it 0:00:17.960 --> 0:00:21.240 wrong last year on inflation. The Fed starts to shrink 0:00:21.280 --> 0:00:24.000 its eight point nine truly a dollar ballot sheet, and 0:00:24.040 --> 0:00:27.440 the US ramps up military support to Ukraine. New York 0:00:27.440 --> 0:00:30.600 Governor Hukill introduces new gun reform measures, Plus the first 0:00:30.640 --> 0:00:33.839 funerals have again for the victims of the Texas school shooting. 0:00:34.080 --> 0:00:37.640 I'm Michael larn More. Ahem, I'm John Stashon sports blowout 0:00:37.640 --> 0:00:39.600 wins at home for the Mets and the Yankees. Rangers 0:00:39.600 --> 0:00:44.720 in lightning play Game one at the Garden tonight. That's 0:00:44.720 --> 0:00:48.639 all trading ahead on Bloomberg Daybreak on Bloomberg eleven three 0:00:48.680 --> 0:00:53.120 on New York, Bloomberg one, Washington, d C, Bloomberg one 0:00:53.159 --> 0:00:57.639 oh six one, Boston, Bloomberg nine sixties and Francisco Sirius 0:00:57.800 --> 0:01:00.120 x M one nine team and around the world Old 0:01:00.160 --> 0:01:03.800 on Bloomberg Radio dot Com and via the Bloomberg Business 0:01:07.440 --> 0:01:10.560 and good morning. I'm Karen Moscow, I'm Nathan Hagar. Bloomberg 0:01:10.600 --> 0:01:12.840 Daybreak is brought to you by B and Y Melon's 0:01:12.840 --> 0:01:16.240 Pershing Inside Conference back in person June fifteen through the 0:01:16.280 --> 0:01:20.000 seventeenth in Grapevine, Texas, a must attend event for financial advisors, 0:01:20.000 --> 0:01:24.000 registered today at Inside dot b n y Melon dot Com, 0:01:24.000 --> 0:01:26.840 and US futures are mixed this morning. It is six 0:01:26.840 --> 0:01:28.640 and went on Wall Street. We checked the markets every 0:01:28.680 --> 0:01:31.720 fifteen minutes throughout the trading day. On Bloomberg. SMP future 0:01:31.800 --> 0:01:33.960 is up five points down, futures up a hundred, twenty 0:01:33.959 --> 0:01:37.039 four nasday futures are down thirteen and the ten year 0:01:37.040 --> 0:01:39.400 treasury down four thir Day seconds held two point eight 0:01:39.440 --> 0:01:42.200 six percent, yield on the two year two point five 0:01:42.240 --> 0:01:45.520 seven percent. Nathan Karen. US stocks begin June after a 0:01:45.520 --> 0:01:48.480 month where the SMP five hundred was basically unchanged, but 0:01:48.560 --> 0:01:51.960 that does not explain the extreme volatility during the month 0:01:51.960 --> 0:01:54.760 of May. The benchmark index surged more than eight percent 0:01:55.040 --> 0:01:57.760 after falling within points of a twenty percent drop from 0:01:57.760 --> 0:02:01.040 a record, signifying a bear market. Peter Oppenheimer is chief 0:02:01.080 --> 0:02:04.000 Global equity Strategist at Goldman Sacks. If you look at 0:02:04.040 --> 0:02:07.440 the history for markets, at least when you get pea inflation, 0:02:07.520 --> 0:02:10.200 you do tend to get a recovery in risk assets, 0:02:10.280 --> 0:02:14.119 and that's generally because it starts to alleviate pressures on 0:02:14.120 --> 0:02:18.960 on interest rates. By that stage, you've usually had markets 0:02:18.960 --> 0:02:22.960 already pricing in an economic downturn. So at the point 0:02:23.040 --> 0:02:26.320 where people think that things are bad but getting less bad, 0:02:26.520 --> 0:02:29.080 you tend to get a recovery. Goldman Sacks. Chief global 0:02:29.120 --> 0:02:32.240 equity strategist Peter Oppenheimer still says he expects markets to 0:02:32.240 --> 0:02:35.080 be very volatile over the next few months. Well, Nathan. 0:02:35.120 --> 0:02:38.200 Helping to lift sentiment this morning is corporate earning shares 0:02:38.200 --> 0:02:40.600 a sales Fource up eight percent in early training, the 0:02:40.600 --> 0:02:43.280 company raising its annual profit forecast. We get more from 0:02:43.280 --> 0:02:47.000 Bloomberg's Don Christner. It signals demand for business software is 0:02:47.040 --> 0:02:50.880 holding up in the face of macro economic instability. Salesforce 0:02:50.880 --> 0:02:54.120 said fiscal year earnings excluding some items will be as 0:02:54.200 --> 0:02:57.520 much as four dollar seventy six cents. Analysts on average 0:02:57.639 --> 0:03:01.680 estimated annual profit of four dollar sixty eight cents. Salesforce 0:03:01.840 --> 0:03:05.200 is the leader in cloud based customer management software now 0:03:05.280 --> 0:03:08.239 during the pandemic. The company expanded its products for business 0:03:08.280 --> 0:03:12.639 productivity with the purchase of the messaging platform Slack at 0:03:12.639 --> 0:03:15.600 a price of twenty seven point seven billion dollars in 0:03:15.639 --> 0:03:18.280 New York. I'm Doug Chrisner, Bloomberg Daybreak. All right, Doug. Thanks. 0:03:18.360 --> 0:03:20.840 Crude oil is also on the rise this morning, trading 0:03:20.880 --> 0:03:23.519 at a hundred sixteen seventy five cents for a barrel 0:03:23.520 --> 0:03:26.160 of West Texas Intermediate. This comes ahead of an OPEC 0:03:26.200 --> 0:03:30.000 plus routine meeting tomorrow to discuss supply policy at more. 0:03:30.280 --> 0:03:33.200 City Groups Global ahead of Commodity Research, says triple digit 0:03:33.200 --> 0:03:35.480 oil should be a lot lower. We have to just 0:03:35.800 --> 0:03:38.080 look at the cost structure of the industry. You have 0:03:38.120 --> 0:03:40.960 to look at where new production is coming and where 0:03:41.040 --> 0:03:43.280 would be coming even if we didn't have a hundred 0:03:43.360 --> 0:03:46.720 twenty three dollar red and I'd say it's more in 0:03:46.720 --> 0:03:48.920 the seventy dollar range than it is in the d 0:03:49.120 --> 0:03:51.680 twenty dollar range. City Group said. Moore says demand for 0:03:51.680 --> 0:03:54.520 oil and refined products is falling as the economy starts 0:03:54.520 --> 0:03:57.440 bracing for a recession. Well, Nathan, inflation is still a 0:03:57.440 --> 0:04:00.120 major focus for markets and the top political challenge for 0:04:00.160 --> 0:04:03.080 the White House now Treasury Secretary Janet Yellen is admitting 0:04:03.120 --> 0:04:05.520 she got it wrong last year when she said inflation 0:04:05.560 --> 0:04:09.800 would only be temporary. There have been an anticipated and 0:04:10.000 --> 0:04:14.880 lord shocks to the economy that have boosted energy and 0:04:15.040 --> 0:04:20.680 food prices and um supply bottlenecks that have affected our 0:04:20.720 --> 0:04:25.600 economy badly that I didn't at the time, didn't fully understand, 0:04:26.040 --> 0:04:29.800 but we recognize that now. In an interview as CNN, 0:04:29.839 --> 0:04:33.000 Secretary Yellen said she's encouraged that corporations have started to 0:04:33.040 --> 0:04:36.000 come down, but she says she cannot rule out future shocks. 0:04:36.080 --> 0:04:38.480 The Secretary Yellen was at the White House yesterday Karen 0:04:38.480 --> 0:04:41.280 for a rare meeting between President Biden and FED chair 0:04:41.400 --> 0:04:44.320 j Powell. President used it to declare that he respects 0:04:44.320 --> 0:04:48.720 Central Bank independence while shifting responsibility for taming decades high inflation. 0:04:48.920 --> 0:04:51.440 I'm not going to interfere with their critically important work. 0:04:52.080 --> 0:04:57.279 FED as tool responsibilities one full employment to stable prices. 0:04:57.560 --> 0:05:00.920 This was President Biden's third in person session Powellson's taking 0:05:00.920 --> 0:05:03.320 office well. The FED will also be in focus today. 0:05:03.400 --> 0:05:06.080 Nathan's set to start shrinking at eight point nine trillion 0:05:06.080 --> 0:05:09.240 dollar balance sheet. The Central Bank also releases the Beige Book, 0:05:09.279 --> 0:05:12.120 and we get more from Bloomberg's Michael McKee. The question 0:05:12.200 --> 0:05:14.640 is what will investors learn from the Beige Book that 0:05:14.680 --> 0:05:17.560 they don't already know. Are there hints in the anecdotal 0:05:17.600 --> 0:05:20.760 reports suggesting some goods or services are seeing prices the 0:05:20.839 --> 0:05:24.239 level offer decline? Will there be any indications the labor 0:05:24.279 --> 0:05:27.560 market is loosening? Overall, the Beige Book is likely to 0:05:27.600 --> 0:05:30.919 assess the economy continues to expand at a moderate pace. 0:05:31.040 --> 0:05:34.480 That's the phrase the Fed usually uses. Consumers are still 0:05:34.480 --> 0:05:37.960 spending and manufacturers are trying to keep up. The survey 0:05:38.080 --> 0:05:41.479 is one input into FED policy decisions, but the Central 0:05:41.520 --> 0:05:44.000 Bank has already suggested it's made up his mind to 0:05:44.160 --> 0:05:47.640 raise rates at the next two meetings. Michael McKee, Bloomberg Daybreak. 0:05:47.680 --> 0:05:49.640 All right, Mike, thank you now. The latest developments on 0:05:49.680 --> 0:05:52.760 the war. President Biden says he will give Ukraine advanced 0:05:52.839 --> 0:05:55.679 rocket systems another weaponry to help at the battle with Russia. 0:05:55.880 --> 0:05:59.680 Amy Morris has details from our Bloomberg newsroom in Washington. 0:06:00.040 --> 0:06:02.240 The President made the announcement in a New York Times 0:06:02.320 --> 0:06:06.200 article published last night. As senior US official hotels Bloomberg News. 0:06:06.360 --> 0:06:09.360 The package includes missiles that will allow Ukraine to strike 0:06:09.400 --> 0:06:12.679 locations as far as eighty kilometers away, and while world 0:06:12.800 --> 0:06:15.679 leaders have publicly called for such a move, one concern 0:06:15.800 --> 0:06:18.880 is whether Ukraine would use them to strike targets inside 0:06:18.960 --> 0:06:21.919 Russia that would risk expanding the war and pulling in 0:06:22.000 --> 0:06:25.080 NATO countries. The White House plans to formally announce the 0:06:25.120 --> 0:06:29.400 new seven hundred million dollar security assistance package today in Washington. 0:06:29.480 --> 0:06:32.520 I'm Amy Morris Bloomberg Daybreak, Right, Amy, thank you. President 0:06:32.560 --> 0:06:35.760 Biden will also be addressing the baby formula shortage and 0:06:35.839 --> 0:06:37.960 the country. The White House stade the President will mean 0:06:38.040 --> 0:06:41.920 virtually with infant formula manufacturers this afternoon. Finally, care In 0:06:41.960 --> 0:06:44.120 the world's richest man appears to have had it with 0:06:44.160 --> 0:06:48.039 this whole working from home business testas CEO Elon Musk 0:06:48.080 --> 0:06:50.800 wade in on the debate on Twitter by elaborating on 0:06:50.880 --> 0:06:54.200 an email he apparently sent to the Electric Carmakers executive 0:06:54.200 --> 0:06:57.680 staff under the subject line remote work is no longer acceptable. 0:06:58.040 --> 0:07:00.640 Musk wrote that anyone who wishes to do remote work 0:07:00.839 --> 0:07:03.200 must be in the office for a minimum of forty 0:07:03.200 --> 0:07:07.080 hours per week or depart Tesla right now. S and 0:07:07.120 --> 0:07:09.120 p futures are up three points. Stown features of a 0:07:09.200 --> 0:07:12.640 hundred sixteen NASTAC futures are lower by nineteen points. The 0:07:12.680 --> 0:07:15.520 tenure treasury yield right now two point eight six percent. 0:07:16.000 --> 0:07:18.400 Local headlines and a check of sports. Up next to 0:07:18.480 --> 0:07:24.960 this is Bloomberg Sounds six o seven on Wall Street 0:07:24.960 --> 0:07:27.440 board sixty degrees in Central Park dealing with an accident 0:07:27.480 --> 0:07:30.720 on the westbound Belt Parkway a cross Bay Boulevard. Details 0:07:30.760 --> 0:07:32.880 coming up at Traffic. First Michael bar with Warre on 0:07:32.960 --> 0:07:34.640 what's going on in New York and around the world. 0:07:34.640 --> 0:07:37.400 Good morning, Michael, Good morning Nathan. New York Governor Kathy 0:07:37.400 --> 0:07:41.240 Hocill introduced a new package of gun reform bills aftermass 0:07:41.240 --> 0:07:44.400 shootings in Buffalo and U Valley. It is a total 0:07:44.440 --> 0:07:47.320 of ten bills that would tighten New York's gun laws 0:07:47.320 --> 0:07:50.840 and closed loopholes. Hocal says New York already has some 0:07:50.880 --> 0:07:53.040 of the toughest gun laws in the country, but clearly 0:07:53.480 --> 0:07:56.800 we need to make them even stronger. Among the proposed 0:07:56.920 --> 0:08:00.480 legislation is increasing the minimum age require meant by a 0:08:00.520 --> 0:08:04.480 semi automatic rifle from eighteen to twenty one. The victims 0:08:04.520 --> 0:08:07.320 of last week's mass shooting and the Texas grade school 0:08:07.320 --> 0:08:09.800 are being laid to rest in New Valley. The first 0:08:09.840 --> 0:08:13.560 funerals were held yesterday. A gunman killed nineteen children and 0:08:13.760 --> 0:08:17.080 two teachers. One of those teachers was Eva morrell As. 0:08:17.440 --> 0:08:21.480 Her sister, Maggie Morrells Thomas says she told Governor Abbot 0:08:21.480 --> 0:08:23.640 that if he wants to help, he could change the 0:08:23.640 --> 0:08:27.720 state's gun laws. There's no reason why this type of 0:08:27.960 --> 0:08:33.959 weapon should be among us people here. These things belong 0:08:34.040 --> 0:08:37.959 in the war. There's no war in the classroom. There's 0:08:38.000 --> 0:08:42.320 no war out here in Valdi. Maggie Morrellus Thomas says 0:08:42.400 --> 0:08:45.040 she does not want anyone to forget her sister's name. 0:08:45.440 --> 0:08:48.240 A woman wounded in an April New York City subway 0:08:48.280 --> 0:08:52.040 shooting is filed a lawsuit against gun manufacturer Glock. In 0:08:52.080 --> 0:08:56.000 her lawsuit, Eileen Stewart said Glock endangered the public health 0:08:56.040 --> 0:08:59.840 and safety with the marketing, distribution, and sales of its gun. 0:09:00.480 --> 0:09:03.079 Ten people were shot and wounded as a man fired 0:09:03.080 --> 0:09:06.400 dozens of bullets and the subway train full of morning commuters. 0:09:06.880 --> 0:09:09.360 New York is suspending its gas tax for the rest 0:09:09.400 --> 0:09:11.760 of the year. It would save sixteen cents per gallon, 0:09:12.120 --> 0:09:16.320 joining Connecticut and suspending its gas tax. The energy Department 0:09:16.360 --> 0:09:19.400 says the nationwide record average for a gallon of gas 0:09:19.480 --> 0:09:21.960 rose three cents in the past week to four dollars 0:09:22.000 --> 0:09:26.719 sixty two cents. Governor HOCl announces new LI Double R 0:09:26.960 --> 0:09:32.520 terminal in Mentown, Manhattan. It will be named Grand Central Medicine. 0:09:33.080 --> 0:09:35.720 You're talking about a place as iconic as Grand Central. 0:09:36.720 --> 0:09:39.680 You can't change that. And this conjures up the images 0:09:39.800 --> 0:09:44.240 of glory in a time early nine, nineteen eleven twelve, 0:09:44.320 --> 0:09:49.840 when when the world was stunned by the magistrate of 0:09:49.920 --> 0:09:53.160 this building itself. Governor Hocal says it will be completed 0:09:53.200 --> 0:09:55.719 by the end of this year. Global News twenty four 0:09:55.720 --> 0:09:58.480 hours a day on air and on Bloomberg Quicksay, powered 0:09:58.480 --> 0:10:02.520 by more than journals snatalists more than twenty countries. Michael Barr, 0:10:02.600 --> 0:10:09.440 this is Bloomberg Kin. Michael, thanks, We're coming up to 0:10:09.480 --> 0:10:11.560 six ten on Wall Street. John stash Ore has the 0:10:11.559 --> 0:10:14.280 Bloomberg sports updates and Nathan Mets and Yankees were both 0:10:14.320 --> 0:10:16.840 at home. They won by a combined score of nineteen 0:10:16.920 --> 0:10:19.800 to one. It was ten nothing for the Mets over Washington. 0:10:19.880 --> 0:10:22.840 They had seventeen hits. Mark Hanna had four, Jeff McNeil 0:10:22.960 --> 0:10:26.080 three home runs for Sterley Marte and Edwardo Escobar, and 0:10:26.120 --> 0:10:28.320 the Mets have won five in a row, scoring forty 0:10:28.320 --> 0:10:31.320 four runs in those five games, twenty three runs in 0:10:31.400 --> 0:10:33.199 the two games so far with the Nationals of the 0:10:33.280 --> 0:10:36.200 day game today at City Field the Stadium, Yanks over 0:10:36.240 --> 0:10:39.000 the Angels nine to one, four run first and include 0:10:39.000 --> 0:10:41.439 two run homer by the newest Yank Matt Carpenter. Jose 0:10:41.640 --> 0:10:43.959 Trevino later with the two run shot. Plenty of run 0:10:44.040 --> 0:10:46.800 support for Jordan Montgomery, who normally does not receive it. 0:10:46.840 --> 0:10:49.120 He got his person under the year Wild started the 0:10:49.160 --> 0:10:52.280 Stanley Cup West Finals Avs and Oilers in Denver. They 0:10:52.280 --> 0:10:55.200 combined for five goals in the first period, six more 0:10:55.240 --> 0:10:57.199 in the second. The has led seven to three, it 0:10:57.280 --> 0:11:00.040 was cut to seven six Colorado held on a on 0:11:00.120 --> 0:11:02.520 eighth to six. Don't expect a game like that tonight 0:11:02.559 --> 0:11:05.240 at the Gardens. The Rangers in Lightning begin the East 0:11:05.320 --> 0:11:09.280 Finals too. Terrific goalies the Rangers igors Ches Turkin, Tampa 0:11:09.320 --> 0:11:13.160 bay Is Andre Vasileski, the Ranger defenseman Adam Fox to 0:11:13.360 --> 0:11:18.240 the top goalies. Obviously, uh does his track record speak herself, 0:11:18.240 --> 0:11:22.280 but Jest's it does to what he's done this year 0:11:22.320 --> 0:11:26.199 has been in Stanley. Impressive. So that's the two good 0:11:26.200 --> 0:11:29.120 goal is uh, you know? Coming together the lightning to 0:11:29.200 --> 0:11:31.240 the two time defending Stanley Cup Chace. They just won 0:11:31.280 --> 0:11:33.880 their tenth straight series. Who was a sweep of Florida? 0:11:34.240 --> 0:11:36.240 Who was the top seed of these fifty nine bat 0:11:36.320 --> 0:11:39.520 between Raphael Dala Novak Djokovic who leads thirty to twenty nine, 0:11:39.520 --> 0:11:42.480 but Nadal won four sets. He's into the semifinals of 0:11:42.520 --> 0:11:45.560 the French Open. He's won the tournament thirteen times. John 0:11:45.600 --> 0:11:49.040 stash were Bloomberg Sports Nathy okay, John thanks SMP futures 0:11:49.080 --> 0:11:50.920 up a point and a half. Right now down, Future 0:11:50.960 --> 0:11:53.960 is up a hundred four points. Stansta features down twenty 0:11:54.000 --> 0:11:56.600 eight points. The tet your treasuries down for thirty seconds. 0:11:56.600 --> 0:12:01.400 The yield two point eight five per cent. You're listing 0:12:01.520 --> 0:12:08.760 to Bloomberg Daybreak. Bloomberg day Break brought to you by 0:12:08.800 --> 0:12:11.920 Hofstra Universities Frank gez Art School of Business, top ranked 0:12:11.920 --> 0:12:15.240 online NBA program with the Real World Foundation. Learn more 0:12:15.280 --> 0:12:22.560 at Hofstra dot e d u slash Go Brad markets 0:12:22.679 --> 0:12:25.760 headlines and breaking news twenty four hours a day at 0:12:25.760 --> 0:12:29.680 Bloomberg dot Com. The Bloomberg Business Out and at Bloomberg Quicktake, 0:12:30.320 --> 0:12:39.800 He's a Bloomberg Business Flash and I'm Cameron Moscow songs 0:12:39.800 --> 0:12:42.080 in Europe and US dock in Next Future are struggling 0:12:42.160 --> 0:12:44.760 for direction today admitted debate over the scale of central 0:12:44.760 --> 0:12:48.200 bank monetary policy tightening needed to fight inflation. We checked 0:12:48.200 --> 0:12:50.640 the markets every fifteen minutes throughout the trading day on 0:12:50.679 --> 0:12:53.040 Bloomberg and right now, S and P futures are little 0:12:53.120 --> 0:12:56.320 changed down futures up in ninety eight and NASDAG futures 0:12:56.320 --> 0:12:59.040 are down twenty six The decks in Germany's at a 0:12:59.120 --> 0:13:02.600 quarter per cent, tenure treasury is down five thirty seconds. 0:13:02.640 --> 0:13:04.640 He'll two point eight six percent, the yell done, the 0:13:04.679 --> 0:13:07.640 two year two point five seven percent, nine mex screwed 0:13:07.679 --> 0:13:09.920 oil up one point four percent of a dollar sixty 0:13:09.960 --> 0:13:12.360 three at a hundred sixteen dollars thirty cents, and barrel 0:13:12.600 --> 0:13:14.920 comic school is down nighted tenths per cent or sixteen 0:13:14.920 --> 0:13:18.040 dollars eighties cents at eighteen thirty one sixty announced the 0:13:18.080 --> 0:13:20.400 euro one point oh seven to two against the dollar, 0:13:20.480 --> 0:13:22.840 British bound one point to six and the yen at 0:13:22.880 --> 0:13:26.200 one nine point three eight and Bitcoin this morning, lower 0:13:26.280 --> 0:13:29.200 down six tenths per cent at thirty one thousand, five 0:13:29.679 --> 0:13:32.600 nine dollars. That's a Bloomberg business flap show. Here's Michael 0:13:32.600 --> 0:13:35.040 bar with more on what's going on around the world. 0:13:35.080 --> 0:13:37.840 Michael Barn, thank you very much. President Joe Biden said 0:13:37.960 --> 0:13:41.240 he'll give Ukraine advanced rocket systems and other U S 0:13:41.280 --> 0:13:45.199 weaponry to better hit targets in its war with Russia. 0:13:45.480 --> 0:13:48.280 The White House plans to announce the new seven hundred 0:13:48.280 --> 0:13:52.000 million dollars security assistance package today. The first funerals for 0:13:52.120 --> 0:13:55.040 victims of last week's mass shooting at rob Elementary School 0:13:55.240 --> 0:13:58.920 began yesterday in New Valley, Texas. In baseball, the Yankees one, 0:13:59.000 --> 0:14:00.960 the mat shut out, the Nine Sationals en Zepp, the 0:14:00.960 --> 0:14:04.760 Red Sox Orioles, and A's lost the Giants one. In 0:14:04.840 --> 0:14:08.440 the NHL Eastern Conference Finals tonight, Game one as the 0:14:08.520 --> 0:14:11.360 Rangers host the lightning Global News twenty four hours a 0:14:11.440 --> 0:14:13.880 day on air and on Bloomberg Quick Take, powered by 0:14:13.880 --> 0:14:17.200 more than hundred journalists analysts more than a hundred twenty 0:14:17.240 --> 0:14:21.120 countries at Michael Barn, this is Bloomberg. This is the 0:14:21.240 --> 0:14:25.120 Big Take, the best of Bloomberg's in depth, original reporting 0:14:25.160 --> 0:14:28.000 from around the globe. This is a really fascinating story 0:14:28.400 --> 0:14:31.520 that's caused a lot of outrage among investors. This is 0:14:31.560 --> 0:14:34.400 so fascinating. The market shotdown in a way it's never 0:14:34.480 --> 0:14:37.400 done before. That's gonna have consequences for years to come. 0:14:37.560 --> 0:14:42.480 The big take on Bloomberg Radio. It's six times seen 0:14:42.520 --> 0:14:45.400 on Wall Street Live from the Bloomberg Attractive Broker Studios. 0:14:45.440 --> 0:14:47.840 This is Bloomberg day Break and our big take this 0:14:47.880 --> 0:14:50.240 morning is on the war in Ukraine and how the 0:14:50.320 --> 0:14:54.960 surge in commodity prices sparked by Russia's invasion is helping 0:14:55.000 --> 0:14:58.800 to fuel the Kremlin's war machine despite massive sanctions from 0:14:58.840 --> 0:15:02.440 the US and its outli Bloomberg Dow's oil strategist Juliant 0:15:02.520 --> 0:15:05.200 Lee joins US Now with more on this Bloomberg Big 0:15:05.200 --> 0:15:08.600 Takes story. Juliant, good morning. You know, the sanctions were 0:15:08.600 --> 0:15:13.040 supposed to starve Russian military financing, but it's almost like 0:15:13.080 --> 0:15:15.720 the wars created a feedback loop. Is that the right 0:15:15.760 --> 0:15:17.120 way to look at it when it comes to the 0:15:17.160 --> 0:15:22.960 impact of oil price surges. Well, good morning, It's good 0:15:23.000 --> 0:15:26.160 to be with you. Um. Certainly we you know, we've 0:15:26.200 --> 0:15:30.400 seen some big rises in headline prices not just for 0:15:30.480 --> 0:15:34.120 oil but for other commodities as well, and there's a 0:15:34.800 --> 0:15:39.360 temptation to to see that feeding through UM to Russia 0:15:39.440 --> 0:15:44.680 and Russia's earnings, and undoubtedly they have benefited to some 0:15:44.800 --> 0:15:48.680 degree from that. But I think it's important um also 0:15:48.840 --> 0:15:53.080 to look at the sort of discounts that Russia is 0:15:53.160 --> 0:15:57.760 having to offer, particularly for its oil exports, to get 0:15:57.760 --> 0:16:01.560 a real sense that things are starting to happen. And 0:16:02.040 --> 0:16:06.640 the oil embargo that the European Union has now agreed 0:16:07.000 --> 0:16:09.920 that really hasn't come into effect yet, so everything that 0:16:09.960 --> 0:16:13.240 we've seen to date has been very much on a 0:16:13.680 --> 0:16:18.280 voluntary basis by buyers. And what we have seen is 0:16:18.320 --> 0:16:21.720 that in the last month or so, the sort of 0:16:21.760 --> 0:16:24.320 discounts that Russia has had to offer for its crude 0:16:24.360 --> 0:16:28.160 have been in excessive thirty dollars a barrel. So that 0:16:28.200 --> 0:16:32.720 means that while we're seeing Brent and West Texas intermediate 0:16:32.800 --> 0:16:36.080 that sort of hundred and fifteen hundred and twenty dollars 0:16:36.080 --> 0:16:41.040 a barrel, Russian crude is still selling below a hundred 0:16:41.080 --> 0:16:43.840 and you know, in some cases below ninety as well, 0:16:44.040 --> 0:16:48.600 so still a high price UM. But those self sanctions 0:16:48.680 --> 0:16:52.640 are having an effect, and the mandatory sanctions that are 0:16:52.760 --> 0:16:56.960 coming will have an additional effect. And now the Russia 0:16:57.160 --> 0:17:00.880 has been able to sell its crude at a discount, 0:17:01.040 --> 0:17:05.440 it's been sort of shifting its supply chain as well, 0:17:05.520 --> 0:17:09.640 hasn't it to try to find those buyers. Is there 0:17:09.640 --> 0:17:12.520 anything that the US and its allies can do to 0:17:12.640 --> 0:17:17.720 sort of tackle that the purchasing of Russian crude by 0:17:17.840 --> 0:17:23.440 other nations. Well, there are certainly things that could be done. 0:17:23.440 --> 0:17:28.399 I mean that there is quite clearly precedent for secondary 0:17:28.440 --> 0:17:33.080 sanctions against buyers of Russian audio. Only have to look 0:17:33.119 --> 0:17:38.040 at the sanctions that were um imposed both by the 0:17:38.160 --> 0:17:44.120 Obama administration and by the Trump administration subsequently that targeted 0:17:44.800 --> 0:17:49.080 um sort of other buyers of in that case Iranian 0:17:49.160 --> 0:17:54.080 crude UM, and those were both success That's successful in 0:17:54.119 --> 0:17:58.960 their own right in reducing sales of Iran's crewed around 0:17:58.960 --> 0:18:03.000 the world, and it's it's possible that something like that 0:18:03.080 --> 0:18:06.080 could be done with Russian crewede. I think that the 0:18:06.200 --> 0:18:09.719 problem is that we are in a very different market 0:18:10.520 --> 0:18:12.800 to the one that we were in when sanctions were 0:18:12.840 --> 0:18:17.920 imposed on Iran. The underlying supply demand balance is much tighter. 0:18:18.400 --> 0:18:22.280 That's why we're seeing the big run up in prices, 0:18:22.359 --> 0:18:27.640 and in some senses, what I think that the Western 0:18:27.680 --> 0:18:31.600 Powers want to do is not necessarily to choke off 0:18:32.640 --> 0:18:36.200 the the all of Russia's oil a sports. They want 0:18:36.200 --> 0:18:38.800 to make it more difficult. They want to make it 0:18:39.480 --> 0:18:43.840 more expensive for Russia to export its oil. They certainly 0:18:43.880 --> 0:18:47.880 want to reduce the volumes, but I doubt that anyone 0:18:48.000 --> 0:18:50.960 who's looking at the state of the oil market would 0:18:51.080 --> 0:18:55.560 would really want to see no oil coming out of Russia. 0:18:55.640 --> 0:19:00.719 I know that it's a um a high a desirable 0:19:00.720 --> 0:19:06.040 outcome for Ukraine and for anyone who looks at it 0:19:06.119 --> 0:19:10.800 purely from the lens of Russian income and the ability 0:19:10.840 --> 0:19:14.600 to fund the war in Ukraine. But the cost of 0:19:15.119 --> 0:19:18.840 a total halt to Russian oil exports I think would 0:19:18.840 --> 0:19:22.160 be huge. Much more on this in our Big Take 0:19:22.359 --> 0:19:26.320 story Russia's two hundred five billion dollar oil and gas 0:19:26.320 --> 0:19:30.879 bonanza is funding Putin's war. Bloomberg News oil strategist Julian 0:19:30.960 --> 0:19:33.120 Lee thanks for being with us to get a glimpse 0:19:33.200 --> 0:19:35.400 at what's in this Big Take story. You can read 0:19:35.480 --> 0:19:39.440 much more on Big Take, Bloomberg dot Com, slash Big Take, 0:19:39.880 --> 0:19:43.399 or ni Big Take go on the Bloomberg Terminal and 0:19:43.520 --> 0:19:46.440 looking at oil prices right now, NIMEX screwed is higher 0:19:46.440 --> 0:19:48.480 on this session by one point four percent, up a 0:19:48.560 --> 0:19:52.000 dollar fifty nine and a hundred sixteen barrel. Brent is 0:19:52.080 --> 0:19:55.200 higher by one point four percent at a hundred seventeen 0:19:55.200 --> 0:19:59.840 dollars seven cents. Future is little changed at the moment. 0:20:00.840 --> 0:20:08.560 You're listening to Bloomberg Daybreak Bloomber eleven three oh weather. 0:20:08.640 --> 0:20:10.760 Chance for showers and storms this afternoon with highs of 0:20:10.800 --> 0:20:13.359 the low seventies. More showers likely tomorrow afternoon as well, 0:20:13.359 --> 0:20:16.640 with highs of the low eighties, clearing upper seventies for Friday. 0:20:16.720 --> 0:20:23.680 Right now, sixty degrees in Central Park. Broadcasting live from 0:20:23.680 --> 0:20:27.760 the Bloomberg Interacted Broker Studio in New York. Bloomberg Eving 0:20:27.840 --> 0:20:32.440 Preen to Washington, d C. Bloomberg to Boston, Bloomberg one 0:20:32.440 --> 0:20:35.600 O six one to San Francisco, Bloomberg N sixty to 0:20:35.680 --> 0:20:39.320 the Country, Sirius XM Chento one nineteen and around the globe, 0:20:39.359 --> 0:20:43.000 the Bloomberg Business app and Bloomberg Radio dot Com. This 0:20:43.320 --> 0:20:51.920 is Bloomberg Daybreak. It's six thirty on Wall Street to Boarding. 0:20:51.920 --> 0:20:54.560 I got Nathan Hagar and I'm Cameron Moscow. We're just 0:20:54.600 --> 0:20:57.119 about three hours away from the open of US trading. 0:20:57.119 --> 0:20:59.000 Time for the five things you need to notice start 0:20:59.080 --> 0:21:01.600 your day. Brought to you by I b k R 0:21:01.720 --> 0:21:05.159 Investment Advisers switched to Interactive Brokers for lowest const global 0:21:05.200 --> 0:21:08.679 trading and turnkey custody solutions, no ticket churches and no 0:21:08.840 --> 0:21:11.960 conflicts of your interests at ibkr dot com slash r 0:21:12.040 --> 0:21:15.159 i A first u s dogs begin June, coming off 0:21:15.200 --> 0:21:18.080 a volatile month that left the SNP five hundred basically 0:21:18.160 --> 0:21:20.960 unchanged and made the benchmark index surge more than eight 0:21:20.960 --> 0:21:24.640 percent after falling within points of a drop from a record. 0:21:25.000 --> 0:21:28.800 John Stults FIZ, chief investment strategist with Oppenheimer Asset Management, 0:21:29.040 --> 0:21:31.280 says he could see the index begin to rise again. 0:21:31.680 --> 0:21:33.679 The last time we saw a market that was in 0:21:33.720 --> 0:21:36.199 the process of coming out of a crisis, which was 0:21:36.240 --> 0:21:40.879 two thousand and nine. The SNP declined from January to 0:21:41.000 --> 0:21:45.080 March oh nine. It then rallied sixty to the end 0:21:45.119 --> 0:21:48.960 of the year. Hoppenheimer Asset Management chief investment strategist John 0:21:49.000 --> 0:21:52.520 Stolts FIZZ says it's possible the SNP makes a similar climb, 0:21:52.760 --> 0:21:55.400 but amidst he may have to adjust his projections well. 0:21:55.400 --> 0:21:57.919 Inflation is still a major focus for markets care and 0:21:57.960 --> 0:22:00.680 at the top political challenge for the White House. Now, 0:22:00.720 --> 0:22:04.160 Treasury Secretary Janet Yellin's admitting she got it wrong last 0:22:04.200 --> 0:22:07.080 year when she said inflation would be temporary. There have 0:22:07.240 --> 0:22:12.199 been unanticipated and lord shocks to the economy that have 0:22:12.359 --> 0:22:18.520 boosted energy and food prices and supply bottle knicks that 0:22:18.640 --> 0:22:22.760 have affected our economy badly that I didn't at the time, 0:22:22.880 --> 0:22:27.120 didn't fully understand. Treasury Secretary Janet Yellin tells CNN she's 0:22:27.200 --> 0:22:30.520 encouraged prices are coming down, but can't rule out future shocks. 0:22:30.960 --> 0:22:33.480 Nathan Secretary Yellin was at the White House yesterday for 0:22:33.520 --> 0:22:36.440 a meeting between President Biden and FED share J. Powell. 0:22:36.760 --> 0:22:39.760 Jane Sperling, senior adviser to the President, says the President 0:22:39.840 --> 0:22:42.520 used the meeting to make clear he respects the Fed's 0:22:42.560 --> 0:22:45.919 independence as it looks to cool inflation. We understand that 0:22:45.960 --> 0:22:49.040 our Federal Reserve is independent as while they have a 0:22:49.119 --> 0:22:52.760 dual mandate at times where inflation becomes the highest concern, 0:22:53.040 --> 0:22:56.200 that they're going to take steps to dampen that inflation 0:22:56.560 --> 0:22:59.320 and that's going to be raising interest rates, and the 0:22:59.359 --> 0:23:03.040 President is going to respect that. Independent Senior adviser to 0:23:03.119 --> 0:23:06.280 President Biden Jeane Spirling speaking with Joe Matthew on Bloomberg 0:23:06.359 --> 0:23:09.840 Sound on airing weekdays at five pm Eastern on Bloomberg Radio, 0:23:10.080 --> 0:23:12.080 the Federal be had focused again today. Karen is it's 0:23:12.080 --> 0:23:14.600 set to start shrinking it's eight point nine trillion dollar 0:23:14.680 --> 0:23:17.680 balance sheet. It also releases its spage book today, and 0:23:17.760 --> 0:23:20.280