WEBVTT - Bloomberg Daybreak: September 23, 2022 - Hour 1 (Radio) 0:00:03.480 --> 0:00:06.840 Live from the Bloomberg Interactive Broker Studios. This is Bloomberg 0:00:06.880 --> 0:00:10.319 day Break for Friday, September twenty three two. Coming up 0:00:10.360 --> 0:00:13.200 this hour stops fall around the world as higher rates 0:00:13.240 --> 0:00:17.400 field fears of a slowing global economy. Goldman Sack slashes 0:00:17.440 --> 0:00:20.439 its forecast for the SMP five hundred, oils on track 0:00:20.480 --> 0:00:23.759 for its fourth straight weekly decline, and Credit Suite share 0:00:23.880 --> 0:00:26.680 slumped to a record blow. We'll tell you why officials 0:00:26.680 --> 0:00:29.240 believe several deaths of the Manhattan Nursing Home are from 0:00:29.320 --> 0:00:33.960 legionnaire's disease. Plus referendums begin today in Russian occupied Ukrainian cities. 0:00:34.120 --> 0:00:37.080 I'm Michael barr more ahead, and I'm Scott Sladenburg. The 0:00:37.159 --> 0:00:40.440 chase for sixty one will have to wait another day. 0:00:40.640 --> 0:00:44.959 All that and more coming up in sports. That's all 0:00:45.040 --> 0:00:48.800 strain ahead on Bloomberg Daybreak on Bloomberg eleven three, on 0:00:48.880 --> 0:00:53.280 New York, Bloomberg one, Washington, d C, Bloomberg one oh 0:00:53.360 --> 0:00:58.120 six one, Boston, Bloomberg nine sixties and Francisco Sirius XAM 0:00:58.200 --> 0:01:01.240 one nineteen and around the world Old on Bloomberg Radio 0:01:01.360 --> 0:01:08.679 dot Com and via the Bloomberg Business. Good Friday morning, 0:01:08.760 --> 0:01:12.319 I'm Amy Morris, I'm Nathan Hagar. Futures are moving lower 0:01:12.440 --> 0:01:14.720 this morning. We're coming up to five oh one on 0:01:14.840 --> 0:01:17.280 Wall Street, and we check the markets every fifteen minutes 0:01:17.360 --> 0:01:20.720 during the trading day. On bloomberg SMP futures are down 0:01:20.720 --> 0:01:23.720 twenty four point, Staff futures down a hundred sixty three. 0:01:24.080 --> 0:01:27.679 Nastack futures are lower by ninety points. The tenure Treasury 0:01:27.760 --> 0:01:30.240 is up one thirty second yield three point seven one 0:01:30.920 --> 0:01:34.200 yield on the two year, four point one five British 0:01:34.240 --> 0:01:38.319 pound at one point one one against the dollar. Maymy, Nathan, 0:01:38.360 --> 0:01:40.720 it is all about the markets this morning. V S 0:01:40.800 --> 0:01:43.400 and P five is on track for a second straight 0:01:43.480 --> 0:01:47.000 weekly loss. Yesterday had closed at the level lowest levels 0:01:47.000 --> 0:01:50.280 in June ten. Your treasury yields trading near its highest 0:01:50.400 --> 0:01:53.240 level in a decade, to your rate climb for eleven 0:01:53.320 --> 0:01:56.640 straight sessions. Ryan D. Trichet's chief market strategist at The 0:01:56.640 --> 0:01:58.920 Carson Group, September is the worst months of the year 0:01:59.160 --> 0:02:01.520 when you're week heading into it like down fifteen percent 0:02:01.560 --> 0:02:03.560 for the year like we were this year. Septembers are 0:02:03.720 --> 0:02:06.960 really really rough and can be dicey, So sure the 0:02:06.960 --> 0:02:10.080 Fed matters. We're not ignoring that, but the stage was set, 0:02:10.120 --> 0:02:13.960 honestly for some for some potential weakness. Carson Group Chief 0:02:13.960 --> 0:02:16.920 market strategist Ryan Dietrich says the SMP five hundred is 0:02:16.960 --> 0:02:20.120 just two and a half percent above the low setback 0:02:20.160 --> 0:02:23.000 in June, and there could be more pain ahead. Amy 0:02:23.080 --> 0:02:25.840 one Wall Street firm is saying the selling is still 0:02:25.880 --> 0:02:29.120 not over. Let's get that story from Bloomberg's Lisa Matteo. 0:02:29.560 --> 0:02:32.520 Goldman Saxes slashing its year end target for the SMP 0:02:32.639 --> 0:02:35.880 five index to thirty six hundred from forty three hundred. 0:02:36.040 --> 0:02:39.400 That implies a four point two percent drop from yesterday's close. 0:02:39.639 --> 0:02:42.320 Goldman says a dramatic shift in the outlook for interest 0:02:42.400 --> 0:02:45.840 rates moving higher will weigh on valuations for equities. The 0:02:45.919 --> 0:02:49.519 higher interest rate scenario in Goldman's valuation model supports a 0:02:49.600 --> 0:02:54.000 price earnings multiple of fifteen times compared with eighteen times previously. 0:02:54.280 --> 0:02:57.720 Goldman said the risks to its latest forecast are still 0:02:57.800 --> 0:03:01.040 skewed to the downside because of the rise odds of recession, 0:03:01.320 --> 0:03:04.160 a scenario that would reduce corporate earnings and wide in 0:03:04.200 --> 0:03:07.040 the yield gap. However, the bank strategists say a year 0:03:07.120 --> 0:03:11.239 end rally to is possible if inflation shows clear signs 0:03:11.240 --> 0:03:15.280 of easing. In New York, Lisa Mateo Bloomberg Daybreak. All right, 0:03:15.320 --> 0:03:18.560 thank you, Lisa. Meantime, cash is king. Bank of America 0:03:18.639 --> 0:03:23.079 strategists say investors are flocking to cash and shunning almost 0:03:23.200 --> 0:03:26.560 every other asset class as they turned the most pessimistic 0:03:26.639 --> 0:03:30.079 since the global financial crisis. The banks has cash had 0:03:30.080 --> 0:03:33.320 inflows of thirty billion dollars this week, while global global 0:03:33.360 --> 0:03:37.040 equity funds saw outflows of seven point eight billion dollars. 0:03:37.120 --> 0:03:40.360 Now we saw more losses overnight in Asia. Amy stocks 0:03:40.360 --> 0:03:42.960 in Hong Kong led the declines. Let's get the latest 0:03:43.000 --> 0:03:45.920 from Bloomberg's Juliette Sally. In Singapore, the m s c 0:03:46.040 --> 0:03:49.240 I Asia Pacific Index posted its sixth weekly declined, the 0:03:49.280 --> 0:03:52.880 longest streak since May. Equities with down Friday in Hong Kong, China, 0:03:52.920 --> 0:03:55.920 Australia and South Korea. Japan was closed for a holiday. 0:03:56.200 --> 0:03:58.480 Alsie bondi old spiked the two year up by as 0:03:58.560 --> 0:04:01.200 much as twenty eight basis point into the hyacinths. April 0:04:01.240 --> 0:04:03.800 twelve and the off show you one continue to hold 0:04:03.800 --> 0:04:06.440 past seven to the dollar, despite the PBOC setting a 0:04:06.480 --> 0:04:10.320 strongerly unfixed for a record twenty second day in Singapore. 0:04:10.360 --> 0:04:14.200 Juliet Sally Bloomberg Daybreak, Thanks Juliet. The stellarf is also 0:04:14.240 --> 0:04:17.120 continuing in Europe, where the region is poised for another 0:04:17.160 --> 0:04:20.080 weekly last for starts. Let's get those details live with 0:04:20.160 --> 0:04:23.960 bloom Bloomberg's un parts in London. Good morning you, Good 0:04:23.960 --> 0:04:26.520 morning Karen Nathan. European stocks declining today at the end 0:04:26.520 --> 0:04:28.640 of a week that made very clear that central banks 0:04:28.680 --> 0:04:31.120 are not done yet. You have stocks the hundred now 0:04:31.160 --> 0:04:35.279 down one percentage points, with energy shares leading losses. Adding 0:04:35.279 --> 0:04:37.760 to that decline not for the first time, credits sweet 0:04:37.880 --> 0:04:41.320 shares slumping to a record load today. That's after the 0:04:41.320 --> 0:04:43.680 troubled Swiss bank was forced suits and I report that 0:04:43.680 --> 0:04:47.760 it's considering exiting the US markets and banking also and focus. 0:04:47.880 --> 0:04:51.000 In the UK government's mini budget today, the cap on 0:04:51.120 --> 0:04:54.960 bankers bonuses inherited from the European Union is to be scrapped, 0:04:55.120 --> 0:04:58.640 a planned increase in corporation tax also to be scrapped, 0:04:58.800 --> 0:05:01.400 and the top rate of inc tacks that is going 0:05:01.480 --> 0:05:04.360 as well in London. Immuno Spoobook day breaking. All right, 0:05:04.400 --> 0:05:06.479 you and thank you higher interest rates around the world 0:05:06.560 --> 0:05:09.360 have oil on track for a fourth weekly declined crude 0:05:09.440 --> 0:05:11.680 rings on track for its first quarterly loss in more 0:05:11.680 --> 0:05:15.000 than two years, as concerns about a global economic slowdown 0:05:15.040 --> 0:05:18.039 way on demand. Checking prices now, NIMEX Screwed is down 0:05:18.040 --> 0:05:20.080 two point two per center a dollar eighty five at 0:05:20.160 --> 0:05:22.960 eighty one dollar sixty four cents of barrel. Brent is 0:05:23.000 --> 0:05:26.120 down two percent at eighty eight dollars sixty nine cents, 0:05:26.160 --> 0:05:28.960 But those losses for oil may be short lived. Some 0:05:29.240 --> 0:05:32.280 of Wall Street's biggest banks see crewed rebounding in the 0:05:32.320 --> 0:05:35.800 fourth quarter. JP Morgan Chase is forecasting Brent CREWD at 0:05:35.839 --> 0:05:38.359 a hundred one dollars about the final three months of 0:05:38.400 --> 0:05:41.760 the year. Goldman Sacks targeting one twenty five dollars. Brent 0:05:41.920 --> 0:05:45.400 is trading around ninety dollars today. Analysts say low inventories 0:05:45.440 --> 0:05:49.040 and sustained demand will keep prices elevated despite concerns of 0:05:49.080 --> 0:05:51.760 a global flowdown. All right, let's turn to corporate news now. 0:05:51.800 --> 0:05:54.839 Amy Boeing is in focus this morning. Companies agreed to 0:05:54.880 --> 0:05:58.359 settle an SEC investigation into safety issues on its seven 0:05:58.400 --> 0:06:02.080 thirty seven Max planes. Get the details from Bloomberg's Jeff Bellinger. 0:06:02.760 --> 0:06:05.800 Boeing has agreed to pay two hundred million dollars to 0:06:05.800 --> 0:06:09.960 settle sec allegations that the company and former CEO Dennis 0:06:10.040 --> 0:06:13.599 Mullenberg failed to disclose issues with the seven thirty seven 0:06:13.640 --> 0:06:17.440 Max jetliner. Muhlenberg will pay one million dollars as part 0:06:17.480 --> 0:06:20.920 of the agreement. Regulators say Bowing and Muhllenberg did not 0:06:21.040 --> 0:06:24.480 reveal safety problems with the seven thirty seven Max, which 0:06:24.560 --> 0:06:27.599 was involved in two crashes that killed three hundred forty 0:06:27.640 --> 0:06:30.880 six people. The twin tragedies prompted one of the longest 0:06:30.880 --> 0:06:35.080 groundings in aviation history. Boeing previously paid a two hundred 0:06:35.120 --> 0:06:38.000 forty three million dollar fine as part of a two 0:06:38.040 --> 0:06:41.039 and a half billion dollar settlement with the US Justice 0:06:41.080 --> 0:06:45.400 Department to end a criminal investigation that was in January 0:06:45.480 --> 0:06:50.400 of one. Jeff Bullinger Bloomberg daybreak. All right, thank you, Jeff. 0:06:50.400 --> 0:06:53.600 FedEx cutting costs and increasing its rates. The giant package 0:06:53.640 --> 0:06:55.760 carrier is looking for as much as two point seven 0:06:55.760 --> 0:06:58.880 billion dollars in savings to deal with flowing demand and 0:06:59.080 --> 0:07:01.960 a tight labor mark. Get Last week, FedEx chair suffered 0:07:02.000 --> 0:07:04.360 their worst one day and forty years after the company 0:07:04.400 --> 0:07:07.600 pointed out worsening economic conditions and the futures are worsening. 0:07:07.600 --> 0:07:10.400 This morning Amy with SMP futures down twenty five points, 0:07:10.400 --> 0:07:13.640 now to own futures down a hundred seventy Nastack futures 0:07:13.640 --> 0:07:16.840 are lower by nine points. Straight ahead your latest local 0:07:16.880 --> 0:07:25.239 headlines and a check of sports. This is Bloomberg. Thank you, Nathan, 0:07:25.280 --> 0:07:27.240 five oh seven on Wall Street. Now we bring in 0:07:27.280 --> 0:07:29.280 Michael Barr with more on what else is going on 0:07:29.320 --> 0:07:32.560 in New York and around the world. Thank you very much, aamie. 0:07:32.640 --> 0:07:36.360 New York City's health officials believe fine people have died 0:07:36.360 --> 0:07:40.280 in the Manhattan nursing home of Legionnaire's disease. The outbreak 0:07:40.320 --> 0:07:43.080 over the past year took place at the Amsterdam Nursing 0:07:43.080 --> 0:07:46.600 Home in Morningside Heights. Authorities say four deaths have been 0:07:46.600 --> 0:07:50.720 confirmed to be connected to the legionnaire's disease. Officials are 0:07:50.720 --> 0:07:54.360 investigating the fifth death. Florida Governor Around the Santis, is 0:07:54.400 --> 0:07:57.800 being sued by a state lawmaker for allegedly wasting hundreds 0:07:57.800 --> 0:08:01.040 of thousands of dollars and state funds to fly dozens 0:08:01.040 --> 0:08:05.200 of Venezuelan migrants to Martha's vineyard in Massachusetts and what 0:08:05.280 --> 0:08:08.800 critics have called a political stunt that tricked vulnerable immigrants. 0:08:09.200 --> 0:08:13.600 Florida State Democratic Senator Jason Piso from Miami also asked 0:08:13.600 --> 0:08:16.160 the court to stop the Santists from transporting any more 0:08:16.200 --> 0:08:19.280 migrants to other states. Meanwhile, the Santis says about ten 0:08:19.320 --> 0:08:23.040 thousand dollars paid to an aviation company to fly migrants 0:08:23.080 --> 0:08:26.880 to Delaware has not been put to use. He was vague, though, 0:08:26.920 --> 0:08:31.120 about payments for sending migrants north. The policy is we 0:08:31.160 --> 0:08:35.360 want to voluntarily transport away from Florida so that we 0:08:35.400 --> 0:08:38.000 don't have to bear the costs, and that there's a 0:08:38.120 --> 0:08:41.720 vendor that is doing that for US. Governor de Santis 0:08:41.720 --> 0:08:44.720 made his comments at a news conference in Miami Dade. 0:08:45.160 --> 0:08:48.040 Voting has begun in Moscow held regions of Ukraine or 0:08:48.120 --> 0:08:51.400 referendums to become part of Russia. Ukraine and the West 0:08:51.440 --> 0:08:54.720 have denounced them as shams without any legal force. The 0:08:54.800 --> 0:08:59.560 referendums follow President Vladimir Putin's order of a partial mobilization 0:08:59.559 --> 0:09:02.440 that could at about three hundred thousand Russian troops to 0:09:02.480 --> 0:09:06.200 the fight. Former US Ambassador to Ukraine William Taylor says 0:09:06.200 --> 0:09:08.960 Putin is looking for a way out of the war 0:09:09.120 --> 0:09:12.560 now that Ukrainian advances have made peace talks less likely. 0:09:12.840 --> 0:09:16.880 He's running out of soldiers. He thinks by instituting this 0:09:17.040 --> 0:09:19.680 draft or this call up, he may be able to 0:09:19.679 --> 0:09:23.360 replace these soldiers that he's losing day after day on 0:09:23.480 --> 0:09:28.160 the battlefield. Former Ambassador Taylor spoke to ABC. NASA plans 0:09:28.200 --> 0:09:32.080 the slam a small harmless asteroid as an experiment. A 0:09:32.120 --> 0:09:36.440 spacecraft named Dart will zero win on the asteroid Monday 0:09:36.440 --> 0:09:39.320 and tent on slamming it head on at fourteen thousand 0:09:39.320 --> 0:09:41.960 miles per hour. Scientists say the impact should be just 0:09:42.160 --> 0:09:45.400 enough to nudge the asteroid into a slightly tighter orbit 0:09:45.440 --> 0:09:49.679 around its companion, Space Rock. NASA scientist Tom Stadler, at 0:09:49.679 --> 0:09:51.959 the end of the day, the real question is how 0:09:52.000 --> 0:09:55.520 effectively did we move the asteroid and can this technique 0:09:55.559 --> 0:09:58.080 of kinectic impact be used in the future if we 0:09:58.120 --> 0:10:01.880 ever needed to. NASA Tom Stadler says the asteroid is 0:10:01.880 --> 0:10:06.480 about six point eight million miles away. Global News twenty 0:10:06.520 --> 0:10:09.120 four hours a day on air and on Bloomberg quick Take, 0:10:09.320 --> 0:10:11.920 powered by more than twenty seven hundred journalist and analysts 0:10:12.000 --> 0:10:15.400 more than twenty countries Michael barn This is Bloomberg Gaming. 0:10:15.640 --> 0:10:20.640 All right, thank you, Michael. Five ten on Wall Street. 0:10:20.679 --> 0:10:23.840 Time now for the Bloomberg Sports Update with Scott Seidenberg. 0:10:24.160 --> 0:10:26.880 Good morning, Amy. Yankees fans will have to wait another 0:10:27.160 --> 0:10:31.080 day before seeing Aaron Judge hit home run number sixty one. 0:10:31.160 --> 0:10:33.960 Judge went over to last night with three walks and 0:10:34.120 --> 0:10:37.320 a strikeout, but the Yanks got the win five four 0:10:37.440 --> 0:10:40.559 over the Red Sox in ten innings on Josh Donaldson's 0:10:40.679 --> 0:10:44.480 fourth walk off hit of the season. It's the yankees 0:10:44.720 --> 0:10:48.600 sixteenth walk off win. That's one shy for the most 0:10:48.679 --> 0:10:52.200 walk off wins in a single season in the Yankees 0:10:52.240 --> 0:10:56.080 franchise history. Here was Donaldson after the game a couple 0:10:56.080 --> 0:11:01.920 of times this year. Doesn't it doesn't disap. With the win, 0:11:02.040 --> 0:11:06.360 the Yankees officially clinched a postseason spot, and Aaron Boone 0:11:06.400 --> 0:11:09.480 becomes the first manager to reach the postseason in each 0:11:09.880 --> 0:11:13.240 of his first five seasons. The Yankees have a seven 0:11:13.240 --> 0:11:16.040 and a half game lead in the Al East over 0:11:16.160 --> 0:11:19.400 the Toronto Blue Jays. NBA news, the Boston Celtics have 0:11:19.480 --> 0:11:23.439 suspended head coach eMate Udoka for the upcoming season that 0:11:23.559 --> 0:11:28.400 team citing violations of team policies. In its announcement, Assistant 0:11:28.400 --> 0:11:31.360 coach Joe Missoula takes over in the interim. Week three 0:11:31.480 --> 0:11:34.120 of the NFL kicked off last night, the Browns defeating 0:11:34.120 --> 0:11:38.480 the Steelers seventeen. On Sunday, the Jets will welcome in 0:11:38.720 --> 0:11:42.080 the Bengals. The Giants host the Cowboys on Monday Night Football. 0:11:42.160 --> 0:11:46.800 I'm Scott Seedinberg with Bloomberg Sports. Amy all right, thank you, Scott. 0:11:46.920 --> 0:11:50.080 Checking futures. They're lower. S and P futures down twenty 0:11:50.200 --> 0:11:54.600 six DAL futures down one two points, Nasdaq futures down 0:11:54.640 --> 0:11:57.760 one hundred points. The ten year treasury unchanged, the yield 0:11:57.760 --> 0:12:01.880 at three point. Much more come on Bloomberg Daybreak, look 0:12:01.920 --> 0:12:07.720 at markets and risk of recession. This is Bloomberg Bloomberg 0:12:07.800 --> 0:12:10.400 eleven three oh weather. Sunny and breezy today. We're going 0:12:10.440 --> 0:12:13.440 up to sixty five degrees plenty of sunshine tomorrow, going 0:12:13.480 --> 0:12:16.079 up to seventy five and then eighty degrees with partial 0:12:16.160 --> 0:12:24.880 sun on Sunday. Markets headlines and breaking news twenty four 0:12:24.880 --> 0:12:27.960 hours a day at Bloomberg dot Com, the Bloomberg Business 0:12:27.960 --> 0:12:31.160 at and at Bloomberg Quick Take. This is a Bloomberg 0:12:31.240 --> 0:12:40.400 Business Flash I'm Nathan Hagar. Stocks and futures are extending 0:12:40.440 --> 0:12:42.600 declines at the end of a week that has underscored 0:12:42.679 --> 0:12:46.920 expectations for tighter monetary policy and a slowing global economy. 0:12:47.040 --> 0:12:49.760 We checked the markets every fifteen minutes during the trading day. 0:12:49.840 --> 0:12:53.319 On bloomberg SMP futures are down twenty five points, Stown 0:12:53.360 --> 0:12:57.880 futures down four Nasdaq futures down nine points. The stock 0:12:57.920 --> 0:13:00.320 six hundred in Europe is poised for a bear market 0:13:00.320 --> 0:13:02.840 down one point two percent. The decks in Germany down 0:13:02.840 --> 0:13:05.720 one percent, the CAC in Paris down nine tenths percent. 0:13:05.760 --> 0:13:08.360 The foot scene in London is down one point three percent. 0:13:08.760 --> 0:13:11.800 Tenure Treasury right now little changed at three point seven 0:13:11.880 --> 0:13:14.199 one percent for the ten year yield. The yield on 0:13:14.240 --> 0:13:18.040 the two year four point one five percent. Nim X 0:13:18.080 --> 0:13:20.440 screwed is down two percent or a dollar sixty seven 0:13:20.440 --> 0:13:23.200 at eighty one dollar seventy eight cents. A barrel comes 0:13:23.240 --> 0:13:25.600 golled down seven tenths per cent, or eleven dollars forty 0:13:25.600 --> 0:13:29.439 cents at sixteen sixty nine seventy announced. The euro point 0:13:29.559 --> 0:13:32.400 nine seven five nine against the dollar British pound one 0:13:32.440 --> 0:13:35.319 point one eight seven. The end is at one forty 0:13:35.360 --> 0:13:38.680 two point nine one bitcoin down seven tenths percent at 0:13:38.760 --> 0:13:42.120 nineteen thousand, one hundred dollars. That's a Bloomberg business flash. 0:13:42.200 --> 0:13:44.720 Now here's Michael Barr with more on what's going on 0:13:44.760 --> 0:13:47.719 around the world. Good morning, Michael, Good morning. Nathan. The 0:13:47.760 --> 0:13:50.920 special master in the case of documents sees from Donald 0:13:50.960 --> 0:13:54.760 Trump's Florida home says the former president's lawyers have to 0:13:54.840 --> 0:13:58.520 state in a court filing whether they believe the FBI 0:13:58.559 --> 0:14:02.000 and line about the audience. Judge Raymond Deery told Trump's 0:14:02.040 --> 0:14:06.079 legal team that they have until September. Residents and occupied 0:14:06.120 --> 0:14:09.240 parts of Ukraine began voting today in a Russian run 0:14:09.360 --> 0:14:13.520 referendum on joining Russia. The vote has been widely condemned 0:14:13.520 --> 0:14:16.240 as a sham. In baseball, the Yankees beat the Red 0:14:16.240 --> 0:14:19.920 Sox five four, clinching a playoff birth He came close, 0:14:20.040 --> 0:14:22.960 but Aaron Judge fell short of tying Roger Maris his 0:14:23.040 --> 0:14:26.320 a L record of sixty one home runs. The Orioles 0:14:26.360 --> 0:14:29.480 and Giants won the a's lost. Thursday Night football, the 0:14:29.480 --> 0:14:33.040 Browns beat the Steelers twenty nine and seventeen. Global News 0:14:33.080 --> 0:14:36.400 twenty four hours a day on air and on Bloomberg Quicktake, 0:14:36.640 --> 0:14:39.560 powered by more than twenty seven hundred journalists and analysts 0:14:39.640 --> 0:14:42.160 more than a hundred twenty countries. Michael Barr and this 0:14:42.320 --> 0:14:45.680 Bloomberg Amy. All right, thank you, Michael. It's five nineteen 0:14:45.720 --> 0:14:49.359 on Wall Street where live from the Bloomberg Interactive Broker's studios. 0:14:49.400 --> 0:14:53.120 This is Bloomberg Daybreak. Stocks in US equity futures extended 0:14:53.120 --> 0:14:56.320 their declines at the end of a week, underscoring expectations 0:14:56.320 --> 0:15:00.240 for tighter monetary policy and a slowing global economy. We're 0:15:00.320 --> 0:15:03.960 joined now by global market strategist Ben Laylor with Toro 0:15:04.520 --> 0:15:06.720 and Ben, I was looking at your Twitter feed. You 0:15:06.760 --> 0:15:10.080 tweeted that report that said not all recessions are equal. 0:15:10.480 --> 0:15:13.200 Hawk is FED making US recession in out of inevitable. 0:15:13.320 --> 0:15:17.800 So what should we expect? Well, unfortunately, at this point, 0:15:17.840 --> 0:15:20.560 I think the US recession is pretty much inevitable. Um 0:15:20.560 --> 0:15:23.680 and not our word is the scariest word in finance. 0:15:23.800 --> 0:15:26.920 But you know, not all recessions are created equal. And 0:15:27.000 --> 0:15:28.760 you know, if there is a silver lining here, it's 0:15:28.800 --> 0:15:30.680 that I think the recession that is coming in the 0:15:30.800 --> 0:15:33.360 US is going to be a sort of plain vanilla 0:15:33.960 --> 0:15:36.760 um one driven by just the FED hike in interest rates, 0:15:36.800 --> 0:15:39.840 you know, without the shots of COVID, without the sort 0:15:39.840 --> 0:15:42.920 of systemic collapse like we saw in the global financial crisis. 0:15:42.920 --> 0:15:46.280 We're just not seeing you know, imbalances like that. So 0:15:46.360 --> 0:15:48.360 the silver lining is, I think this will be a 0:15:48.440 --> 0:15:52.200 relatively mild recession. It will be painful, but I don't 0:15:52.240 --> 0:15:56.720 think it's uninvestable. Um And I think we've you know, 0:15:56.760 --> 0:15:58.520 the other silver lining here is I think markets have 0:15:58.640 --> 0:16:00.560 priced a lot in. I think we've through the peak 0:16:00.560 --> 0:16:04.040 in inflation. I think this week we've priced in, hopefully 0:16:04.080 --> 0:16:08.080 the peaking interest rate expectations. Recession worry's obviously going through 0:16:08.120 --> 0:16:09.720 the roof, so I think we're pricing that in, and 0:16:09.800 --> 0:16:12.880 investor sentiment, you know, it's already terrible. So I guess 0:16:12.880 --> 0:16:15.040 that's my sort of glass half full review of the 0:16:15.080 --> 0:16:17.720 world of what is has been a pretty brutal few weeks. 0:16:18.120 --> 0:16:23.040 What's driving all of this? What's driving the moves mainly? Um, 0:16:23.400 --> 0:16:26.080 I mean, what's driving it? It's just inflation is high 0:16:26.280 --> 0:16:30.000 and sticky, and the FED is responding to that, and J. 0:16:30.160 --> 0:16:34.000 Powell is channeling his some channeling his Vulcan He's responding 0:16:34.040 --> 0:16:35.800 to that, and he's basically saying he's not going to 0:16:35.920 --> 0:16:38.240 let up until the job is done. Um. You know, 0:16:38.320 --> 0:16:40.720 that's what's been I mean, we're now pricing in four 0:16:40.760 --> 0:16:43.080 and a half percent as the peak FED funds rate 0:16:43.200 --> 0:16:46.280 for early next year. That's clearly quite a long way 0:16:46.280 --> 0:16:48.800 from where we are right now. That's what's been driving 0:16:48.800 --> 0:16:51.680 the latest move down. That's why we're getting pretty close 0:16:51.680 --> 0:16:53.920 to retesting the June lows, on on on on the 0:16:54.040 --> 0:16:56.680 s and P five hundred. Um. I would just say, 0:16:56.720 --> 0:16:58.200 you know, let's look out for that sort of next 0:16:58.240 --> 0:17:00.480 catholyst here I mean, which is the quarter earnings which 0:17:00.480 --> 0:17:01.960 are coming up in a couple of weeks. And let's 0:17:01.960 --> 0:17:05.320 just not forget it was less bad second quarter earnings 0:17:05.680 --> 0:17:08.000 that helped drive that June rally, and I think we're 0:17:08.320 --> 0:17:11.080 being set up for something similar going into third quarter 0:17:11.119 --> 0:17:13.560 owning season. Yeah, that's what I was going to ask about. 0:17:13.560 --> 0:17:16.600 Inflationary pressures. Would they wind up easing and how long 0:17:16.640 --> 0:17:21.600 that might take? Ah, I think it's going to take 0:17:21.720 --> 0:17:24.840 some time. If we look at inflation around the world. 0:17:24.880 --> 0:17:28.760 The problem the US has is that it's driven by 0:17:29.000 --> 0:17:32.040 a lot of these sort of stickier areas light wages 0:17:32.080 --> 0:17:33.760 like housing. So I think it's going to take some 0:17:33.800 --> 0:17:36.560 time to come down. But you know, markets are always 0:17:36.600 --> 0:17:39.840 forward looking, and you know we've priced a lot of 0:17:39.840 --> 0:17:42.040 bad news in here. I think we're beginning to see 0:17:42.080 --> 0:17:44.639 the top of the sort of interest rate cycle early 0:17:44.720 --> 0:17:46.439 next year. And I think the sort of closer we 0:17:46.440 --> 0:17:49.000 get to that, and the more these sort of lead 0:17:49.000 --> 0:17:51.879 inflation indicators, whether it be commodity prices or just the 0:17:51.920 --> 0:17:54.320 weakening economy, begin to sort of cool off a little bit, 0:17:54.680 --> 0:17:57.400 I think I think the bull cases the markets begin 0:17:57.440 --> 0:18:00.480 to sort of sniff out um sort of top of 0:18:00.480 --> 0:18:02.320 the interest right cycle and begin to sort of price 0:18:02.400 --> 0:18:04.679 that in. I want to throw you a bit of 0:18:04.680 --> 0:18:07.200 a little curveball if I could. You were talking about 0:18:07.200 --> 0:18:10.399 how this could be a mild investival your word of 0:18:10.480 --> 0:18:14.240 vanilla recession, But I want to ask about consumer sentiment. 0:18:14.320 --> 0:18:16.520 Wouldn't that depend on how consumers are spawn to it. 0:18:16.560 --> 0:18:19.760 If consumer sentiment then drops because of it's it's a recession, 0:18:20.400 --> 0:18:25.440 is there a risk that could wind up feeding on itself. Absolutely, 0:18:25.520 --> 0:18:27.399 there's definitely a riskless sort of becomes a sort of 0:18:27.400 --> 0:18:30.600 self fulfilling prophecy. I guess the you know, the big 0:18:30.640 --> 0:18:34.640 picture of you is if you look at those uninvestable recessions, 0:18:34.680 --> 0:18:38.240 you know, the ones were earnings for you know, and 0:18:38.280 --> 0:18:42.679 markets do something similar. You see households which you know 0:18:42.720 --> 0:18:44.960 are carrying huge amounts of debt. You see the very 0:18:44.960 --> 0:18:48.320 weak labor markets. You see companies carrying too much debt 0:18:48.480 --> 0:18:50.880 or not being very profitable. You know your banks which 0:18:50.880 --> 0:18:54.560 aren't well capitalized. None of those things apply here. So 0:18:54.720 --> 0:18:57.680 absolutely the consumer is going to soften and probably does 0:18:57.760 --> 0:19:00.600 need to soften for inflation to come down a bit. 0:19:00.880 --> 0:19:03.679 But I think, um again that I think is a 0:19:03.720 --> 0:19:08.200 relatively mild recession compared to some of those big uninvestable 0:19:08.200 --> 0:19:11.119 recessions we've seen, you know, as recently as as twenty 0:19:11.200 --> 0:19:15.040 twenty or or two thousand and eight. And then we've 0:19:15.080 --> 0:19:16.840 got about thirty seconds here. I just want to know 0:19:16.880 --> 0:19:18.920 what you're going to be watching for in the coming quarter. 0:19:21.520 --> 0:19:23.439 I think the two keys are inflation, you know, I 0:19:23.480 --> 0:19:25.560 think we've seen the peak. We need to see keep 0:19:25.640 --> 0:19:28.440 drifting down to take that pressure off those four interest rates. 0:19:28.520 --> 0:19:31.399 And as I say, dug quarter oraining season, which starts 0:19:31.400 --> 0:19:33.920 in a couple of weeks, looking for us some less 0:19:33.920 --> 0:19:37.159 bad earning season to drive, to drive a little bit 0:19:37.160 --> 0:19:39.040 of relief. Similar to what we saw in second quarter. 0:19:39.680 --> 0:19:41.520 All right, thank you Ben so much for taking the 0:19:41.600 --> 0:19:44.320 time with us on this Friday morning. Global market strategists. 0:19:44.320 --> 0:19:47.399 Then Laydler is with the Toro checking the markets now. 0:19:47.480 --> 0:19:51.800 Futures are lower, SMP down twenty seven points down, futures down, 0:19:52.640 --> 0:19:56.320 Nasdaq futures down one d one points ten. Your treasury 0:19:56.440 --> 0:20:00.160 unchanged to yield at three point seven one much want 0:20:00.160 --> 0:20:02.720 to come on Bloomberg Daybreak, Stay with us. This is 0:20:02.720 --> 0:20:10.040 Bloomberg Bloomberg eleven three oh weather sunny and breezy today. 0:20:10.080 --> 0:20:12.600 We're going up to sixty five degrees only going up 0:20:12.600 --> 0:20:15.240 to stephany degrees tomorrow, but plenty of sunshine and a 0:20:15.320 --> 0:20:23.399 chance of rain on Sunday. Going up to broadcasting live 0:20:23.560 --> 0:20:27.520 from the Bloomberg Interacted Broker's studio in New York, Bloomberg 0:20:27.520 --> 0:20:30.280 E living free on to Washington, d C, Bloomberg nine 0:20:30.480 --> 0:20:33.399 nine one to Boston, Bloomberg one O six one to 0:20:33.480 --> 0:20:37.240 San Francisco, Bloomberg N sixteen to the country, Sirius XM 0:20:37.280 --> 0:20:40.480 Todo one nineteen and around the globe the Bloomberg Business 0:20:40.560 --> 0:20:44.600 app in Bloomberg Radio dot com. This is Bloomberg Daybreak. 0:20:50.480 --> 0:20:53.000 It's five thirty on Wall Street. Good Friday morning. I'm 0:20:53.000 --> 0:20:55.680 Amy Morris, I'm Nathan Hager. We're about four hours away 0:20:55.680 --> 0:20:57.639 from the open of US trading. Let's getch you up 0:20:57.680 --> 0:20:59.239 to date on the news you need to know. At 0:20:59.280 --> 0:21:01.400 this hour. The s P five hundred is on track 0:21:01.440 --> 0:21:04.399 for a second straight weekly loss. Yesterday, the index closed 0:21:04.400 --> 0:21:07.000 at its lowest level since June, as higher interest rates 0:21:07.040 --> 0:21:10.159 continue to hit sentiment. Jess meant And covers equities for 0:21:10.200 --> 0:21:15.240 Bloomberg News technology sector, looking at discretionary shares. Also industrial 0:21:15.280 --> 0:21:18.159 companies really coming under pressure following what happened with that 0:21:18.200 --> 0:21:20.960 sell off after the Fed's move, but also more globally, 0:21:21.000 --> 0:21:23.480 this isn't even just the Fed. Investors are really trying 0:21:23.520 --> 0:21:26.679 to digest what's happening because it's been over five hundred 0:21:26.680 --> 0:21:29.119 basis point moved by global central banks right now getting 0:21:29.119 --> 0:21:32.480 aggressive to tackle what's happening with inflation, and traders really 0:21:32.480 --> 0:21:35.680 trying to reprice. Bloomberg Jeff sment And says it looks 0:21:35.680 --> 0:21:38.040 like investors aren't expecting the FED to cut rates till 0:21:38.080 --> 0:21:40.800 sometime next year, and there could be more pain ahead. 0:21:40.840 --> 0:21:43.400 When Wall Street firm says the selling is not over 0:21:43.480 --> 0:21:46.200 Goldman Status slashing its year end target for the SMP 0:21:46.280 --> 0:21:49.400 five D thirty six hundred. That's down from forty three 0:21:49.480 --> 0:21:51.720 hundred now. With that in mind, Amy Cash is king. 0:21:51.720 --> 0:21:54.400 Bank of America strategist say investors they're flocking to cash 0:21:54.440 --> 0:21:57.480 as they turn the most pessimistic since the global financial crisis. 0:21:57.720 --> 0:22:00.720 Jennifer Lee, senior economists with BEMO Cap the Market, says 0:22:00.760 --> 0:22:03.600 firms like hers are lowering growth forecasts, but she says 0:22:03.600 --> 0:22:06.239 there's still strength in the labor market. We've actually been 0:22:06.280 --> 0:22:08.560 lowering our growth forecast sadly like everyone else, and we've 0:22:08.560 --> 0:22:12.240 actually got euro growth now three we still have only 0:22:12.320 --> 0:22:15.240