WEBVTT - Bloomberg Daybreak: October 17, 2022 - Hour 2 (Radio) 0:00:03.200 --> 0:00:06.439 By from the Bloomberg Interactive Burger Studios. This is Bloomberg 0:00:06.480 --> 0:00:09.920 Day Right for a Monday, October seventeen two. Coming up 0:00:09.920 --> 0:00:13.280 this hour, the new UK Chancellor starts laying out plans 0:00:13.280 --> 0:00:16.400 to unwind tax cuts. I define a cheese in pink 0:00:16.440 --> 0:00:19.040 because the world China is ready to stand its ground. 0:00:19.239 --> 0:00:22.720 Earnings continue with Bank of America reporting this morning, and 0:00:22.800 --> 0:00:26.640 Goldman shakes up as leadership ranks. More potential legal trouble 0:00:26.680 --> 0:00:30.320 for former President Trump. Plus Ukraine's capital was under missile 0:00:30.360 --> 0:00:33.560 attack from Russia today. I like the bar More ahead, 0:00:34.120 --> 0:00:36.880 I'm John Stairs showering sports. The Yankees stayed alive with 0:00:36.920 --> 0:00:39.360 a wooden cleave with the decisive Game five is tonight. 0:00:39.440 --> 0:00:44.919 The winds continue for the Jets and Giants. That's all 0:00:45.080 --> 0:00:48.680 Trading ahead on Bloomberg day Break on Bloomberg Eleveing Free 0:00:48.720 --> 0:00:52.960 on New York, Bloomberg nine one, Washington d C, Bloomberg 0:00:53.040 --> 0:00:56.720 one oh six one, Boston, Bloomberg nine sixties and Francisco 0:00:57.200 --> 0:01:00.240 Sirius XM one nineteen and around the world. Old on 0:01:00.400 --> 0:01:03.680 Bloomberg Radio dot Com and via the Bloomberg Business app. 0:01:07.440 --> 0:01:10.560 And good morning. I'm Karen Moscow. I'm Nathan Hagar Bloomberg 0:01:10.640 --> 0:01:12.840 Daybreak is brought to you by being Why Melon's Pershing 0:01:12.920 --> 0:01:16.040 learned Why the world's most sophisticated wealth management and institutional 0:01:16.080 --> 0:01:20.319 firms rely on Pershing to help them improve profitability, create efficiency, 0:01:20.360 --> 0:01:24.160 attract talent, and manage risk at Pershing dot Com and 0:01:24.319 --> 0:01:26.920 US futures are higher this morning se so one on 0:01:26.959 --> 0:01:29.120 Wall Street, and we check the markets every fifteen minutes 0:01:29.120 --> 0:01:31.800 throughout the trading day. On Bloomberg Guess and p Future 0:01:31.840 --> 0:01:34.119 is at forty one points down. Future is up two 0:01:34.319 --> 0:01:37.080 D eighty two and nonsday futures up one D thirty 0:01:37.200 --> 0:01:40.119 six and a ten year treasury up seventeen thirty seconds 0:01:40.200 --> 0:01:43.120 yea three point nine four percent. They yield on the 0:01:43.160 --> 0:01:46.440 two year four point four four percent. Nathan Karen, We 0:01:46.560 --> 0:01:49.320 begin in Europe. The pound and UK bonds have been 0:01:49.440 --> 0:01:52.960 rallying on expectations more of Prime Minister Liz Trust's package 0:01:52.960 --> 0:01:56.680 of unfunded tax cuts may be reversed. Newly appointed Chancellor 0:01:56.760 --> 0:01:59.200 Jeremy Hunt makes a statement later this hour. We get 0:01:59.280 --> 0:02:02.200 more from Bloomberg Lizzie Burden in London. It does seem 0:02:02.240 --> 0:02:07.360 like Jeremy Hun is peace by turning pastonomics into unacconomics. 0:02:07.800 --> 0:02:11.120 He's excited to bring forward more fisfal U turned in 0:02:11.280 --> 0:02:14.520 order to calm the market stasicality to pasonomics being solved 0:02:14.600 --> 0:02:18.079 the parts and exchange the market stability. Bloomberg's Lizzie Burton says, 0:02:18.120 --> 0:02:20.560 after Hunt's addressed this morning, he'll make remarks to the 0:02:20.560 --> 0:02:23.480 House of Comments in Asia. Nathan, it's all about China 0:02:23.560 --> 0:02:26.400 this morning. President she Juan Pain said he's staying the 0:02:26.480 --> 0:02:29.840 course is the country faces what he calls dangerous storms 0:02:29.880 --> 0:02:32.639 and growing challenges from the US. In an almost two 0:02:32.639 --> 0:02:36.000 hours speech to open a Communist Party congress, she said 0:02:36.160 --> 0:02:41.480 China will pursue development while ensuring national security. We have 0:02:41.639 --> 0:02:45.920 worked with firm resolve to stay for national security, stended 0:02:46.000 --> 0:02:50.760 off and diffused the major risks, and enshort social stability. 0:02:51.560 --> 0:02:55.760 We have devoted great energy to modernizing our national defense. 0:02:56.360 --> 0:02:59.919 President jan Pain, speaking through an interpreter, also pledge beij 0:03:00.040 --> 0:03:02.480 Jing will prevail and its tech battle with the US 0:03:02.600 --> 0:03:05.000 over computer chips come back here in the US. Karen 0:03:05.080 --> 0:03:07.560 Futures are rising to start the week. It follows another 0:03:07.600 --> 0:03:10.480 sell off on Friday, when the SNP five dropped two 0:03:10.480 --> 0:03:14.079 point four percent Emily Rowland is co chief investment strategist 0:03:14.080 --> 0:03:17.720 at John Hancock Investment Management. It's tough to say we're 0:03:17.720 --> 0:03:20.480 in a recession now with unemployment, you know, near a 0:03:20.520 --> 0:03:24.080 fifty year low, but we're probably going there, and frankly, 0:03:24.120 --> 0:03:26.840 some parts of the market are pricing that in. You know, 0:03:26.880 --> 0:03:31.280 we're down over in equity markets. That's more than two 0:03:31.360 --> 0:03:34.119 thirds of the way there as far as your average 0:03:34.120 --> 0:03:37.640 bear market, but bonds just aren't pricing it in. John 0:03:37.680 --> 0:03:40.960 Hancock's Emily Rowland says inflation has been enemy number one 0:03:41.000 --> 0:03:43.480 for the markets, but Nathan, we could see a rally 0:03:43.560 --> 0:03:46.720 in stocks as according to Morgan Stanley, longtime equity bear 0:03:46.840 --> 0:03:49.320 Mike Wilson, he says stocks are right for a short 0:03:49.440 --> 0:03:52.400 term morally and the absence of earnings capitulation or an 0:03:52.400 --> 0:03:57.040 official recession. Wilson says slump in the SNP five hundred 0:03:57.120 --> 0:04:00.920 this year has lefted testing a serious floor support at 0:04:00.920 --> 0:04:03.600 its two hundred week moving average. He's not ruling out 0:04:03.640 --> 0:04:07.279 the S and P five hundred rising above forty one points. 0:04:07.320 --> 0:04:10.680 That would be about a sixt gain from current levels. 0:04:10.880 --> 0:04:13.360 Inflation and interest rates are still the main focus for 0:04:13.440 --> 0:04:16.320 US markets. Karen st Louis FED President Jim Bullard's leaving 0:04:16.320 --> 0:04:19.120 open the possibility the Central Bank raises interest rates by 0:04:19.160 --> 0:04:22.000 seventy five basis points at each of its next two meetings. 0:04:22.240 --> 0:04:24.320 At the same time, he says it's premature to make 0:04:24.360 --> 0:04:27.960 that call whether the committee would want to pull some 0:04:28.160 --> 0:04:32.479 proposed or thought of policy rate increases from three into 0:04:32.520 --> 0:04:35.200 the December meeting. I think that's a judgments. It's it's 0:04:35.200 --> 0:04:38.160 premature to make St. Louis Fed President Jim Bullard made 0:04:38.160 --> 0:04:40.240 the comments at I m F and World Bank meetings 0:04:40.240 --> 0:04:42.880 over the weekend. Arnies are also a front and center 0:04:42.920 --> 0:04:46.120 this morning. Nathan, we get results from Bank of America shortly, 0:04:46.160 --> 0:04:49.280 and here are the preview as Bloomberg's Jeff Bellinger an. 0:04:49.520 --> 0:04:52.320 Let's say it is unlikely be of a sidestep the 0:04:52.360 --> 0:04:55.960 industry wide drop in investment banking revenue, but there is 0:04:56.040 --> 0:04:59.320 uncertainty over just how much the company's profit margins on 0:04:59.440 --> 0:05:02.440 loans were boosted by the Fed's aggressive series of infrast 0:05:02.520 --> 0:05:06.960 rate hikes. Bloomberg intelligences Bank of America likely benefited from 0:05:07.000 --> 0:05:12.279 CEO Brian moynihan strategy of pursuing responsible organic gains. Lost 0:05:12.320 --> 0:05:15.560 provisions are seen as the biggest factor for next year. 0:05:16.000 --> 0:05:19.400 Jeff Bollinger, Bloomberg Day Break Right, Jeff Banks and miltalk 0:05:19.480 --> 0:05:22.520 Or an ancient Bank of America's CEO Brian moynihan. Later 0:05:22.600 --> 0:05:25.520 this afternoon, catch that interview at two thirty pm Wall 0:05:25.560 --> 0:05:28.800 Street Time on Bloomberg Radio and Television. I meantime, Karen, 0:05:28.839 --> 0:05:31.279 looks like a shakeups coming to Goldman, sachs. We're getting 0:05:31.279 --> 0:05:34.359 more of a third major reorganization in just four years 0:05:34.440 --> 0:05:38.440 under CEO David Solomon. Bloomberg's Lisa Matoe reports. Sources say 0:05:38.520 --> 0:05:41.080 the Wall Street giant plans to once again combine its 0:05:41.120 --> 0:05:44.720 expanded asset management and private wealth business into one unit. 0:05:44.960 --> 0:05:48.720 Goldman will also fuse its investment banking and trading operations 0:05:48.800 --> 0:05:51.520 under one group, and the money losing consumer unit will 0:05:51.600 --> 0:05:54.360 be broken up. The moves mark a reversal for Salmon, 0:05:54.520 --> 0:05:57.080 who had forged ahead with plans to separate the asset 0:05:57.200 --> 0:06:01.320 management and wealth business two years ago, spiked skepticism within 0:06:01.360 --> 0:06:04.440 the bank. He was also reluctant to combine investment banking 0:06:04.520 --> 0:06:07.159 and trading into one group, as the firm looked to 0:06:07.200 --> 0:06:10.560 talk up other fee based businesses to win over shareholders. 0:06:10.960 --> 0:06:14.400 Most visibly, he's disbanding the direct to consumer efforts, cutting 0:06:14.400 --> 0:06:17.039 short the retail banking dreams that he had spelled out 0:06:17.080 --> 0:06:21.440 in his early days as CEO. Lisa Mateo Bloomberg Daybreak. 0:06:21.720 --> 0:06:23.800 At least, thank you, it's not just banks that are 0:06:23.800 --> 0:06:26.640 looking at restructuring this morning, because the every shuffle and 0:06:26.680 --> 0:06:29.600 geopolitics as well. There's worth of White Houses giving its 0:06:29.600 --> 0:06:33.240 security relationship with Saudi Arabia a second look, and we 0:06:33.320 --> 0:06:36.200 get the story from Bloomberg, said Baxter. The two have 0:06:36.320 --> 0:06:38.599 been bumping heads over a number of issues over the 0:06:38.640 --> 0:06:42.039 past few years. The latest that decrease in oil production. 0:06:42.400 --> 0:06:45.640 So now White House National Security Advisor Jake Sullivan says 0:06:45.760 --> 0:06:48.760 things have to move, but with caution. This is a 0:06:48.800 --> 0:06:52.760 relationship that got built over decades on a bipartisan basis, 0:06:52.960 --> 0:06:56.000 and so the President isn't going to act precipitously. He's 0:06:56.040 --> 0:06:59.279 gonna act methodically, strategically and have time to meet with 0:06:59.360 --> 0:07:02.599 members of Congress in San Francisco. I'm at a Baxter 0:07:02.640 --> 0:07:05.599 Bloomberg Daybreak. Thanks that. SMP future is now up forty 0:07:05.600 --> 0:07:09.120 two points. Now futures up three hundred two. NASTAC futures 0:07:09.120 --> 0:07:11.280 are higher by a hundred forty two points and the 0:07:11.320 --> 0:07:14.320 tenure Treasury is up eighteen thirty seconds yield three point 0:07:14.400 --> 0:07:18.239 nine four local headlines and a check of sports. Up next, 0:07:18.400 --> 0:07:24.720 This is Bloomberg six oh seven on Wall Street, fifty 0:07:24.760 --> 0:07:28.120 seven degrees in Central Park, out of crash northbound Connecticut Turnpike, 0:07:28.160 --> 0:07:31.480 Exit fourteen. Details coming up in traffic. First, Michael Barr 0:07:31.560 --> 0:07:33.160 with more on what's going on in New York and 0:07:33.200 --> 0:07:35.480 around the world. Michael, thank you very much. Nathan. There's 0:07:35.520 --> 0:07:39.240 more potential legal trouble for former President Donald Trump. The 0:07:39.640 --> 0:07:42.680 SEC and federal prosecutors in New York has said to 0:07:42.680 --> 0:07:46.120 be investigating whistle blower claims by a co founder that 0:07:46.160 --> 0:07:50.679 Trump Media violated federal securities law. The Trump Media says 0:07:50.760 --> 0:07:54.600 that the whistleblowers acality is ryan with knowingly falls and 0:07:54.720 --> 0:07:58.840 defamatory statements and other concocted cycle dramas. Meanwhile, the Trump 0:07:58.920 --> 0:08:02.600 organization is about to stand trial for tax evasion. The 0:08:02.640 --> 0:08:05.480 Attorney General in New York has accused the company of fraud. 0:08:06.200 --> 0:08:10.400 Explosive latent suicide drones have struck Ukraine's capital as families 0:08:10.440 --> 0:08:13.360 were preparing to start their week. The last echoed the 0:08:13.400 --> 0:08:17.400 cross keeps sending people scurrying to shelters. Keeves mayors as 0:08:17.400 --> 0:08:21.360 the strikes damaged several apartment blocks. Mayor Vitality Kliko says 0:08:21.400 --> 0:08:26.480 today strike was a terror attack Russians. They destroyed all country, 0:08:26.560 --> 0:08:32.440 they destroyed hometown, They killed seas Right now, Mayor Klitchko says, 0:08:32.440 --> 0:08:35.640 the Russians need Ukraine without Ukrainians and that's why they 0:08:35.720 --> 0:08:40.120 killed civilian people. A suspect in a North California serial 0:08:40.240 --> 0:08:42.680 killing spree that claimed the lives of six men will 0:08:42.720 --> 0:08:45.480 be a ragin tomorrow. Police they tips from residents in 0:08:45.520 --> 0:08:48.280 Stockton and Oakland, where the men were murdered, helped them 0:08:48.280 --> 0:08:51.920 identify the suspect. Police arrested forty three year old Wesley 0:08:51.960 --> 0:08:54.959 Brown Lee and Stockton as he was reportedly driving around 0:08:55.000 --> 0:08:58.320 at night looking for another victim. Could we one day 0:08:58.360 --> 0:09:02.199 have a vaccine for cancer? Dr Oslin Terse, one half 0:09:02.240 --> 0:09:06.240 of the German team looking on a cancer vaccine, says 0:09:06.320 --> 0:09:11.080 she is constiously optimistic. As scientists, we are always hesitant 0:09:11.400 --> 0:09:14.560 to say we will have a que for cancer. We 0:09:15.040 --> 0:09:18.520 have a number of breakfuls and we will continue to 0:09:18.559 --> 0:09:21.439 work on them. Still, she tells the BBC. Progress is 0:09:21.480 --> 0:09:24.839 being made every day, every step of every patient we 0:09:24.960 --> 0:09:28.640 treat in all our cancer triots helps us to find 0:09:28.640 --> 0:09:34.240 out law. Dr Tresse adds a cancer vaccine could be 0:09:34.320 --> 0:09:37.600 available by the end of the decade. Global News twenty 0:09:37.600 --> 0:09:40.520 four hours a day on air and on Bloomberg Quick Take, 0:09:40.760 --> 0:09:43.880 powered by more than journalist and analysts more than a 0:09:44.080 --> 0:09:47.800 dwenty countries. Michael Barr and this is Bloomberg, Nathan, Thank you, 0:09:47.840 --> 0:09:54.199 Michael six O nine on Wall Street. Time for the 0:09:54.200 --> 0:09:56.920 Bloomberg Sports Update. Here's Jon stash Ower. All right, Nathan. 0:09:56.960 --> 0:09:59.679 Yankees right back in Cleveland the night after blowing that 0:09:59.800 --> 0:10:01.600 two run ninth inning leave the first time in their 0:10:01.640 --> 0:10:04.520 postseason history, and again they led by two bottom the ninth, 0:10:04.600 --> 0:10:06.959 no issues, this time. A four to two Game four 0:10:07.080 --> 0:10:10.000 victory of the Guardians ties the series at two sets 0:10:10.040 --> 0:10:13.320 the stage her decisive Game five tonight at the Stadium. 0:10:13.400 --> 0:10:15.599 Yankee heroes, certainly, Garrett Cole pitched like an eight with 0:10:15.679 --> 0:10:18.959 seven strong innings, and Harrison Bader continues to hit home 0:10:19.040 --> 0:10:21.559 runs like Aaron Judge his third and four games. Yankee 0:10:21.600 --> 0:10:24.960 fans wondered why Clay Holmes didn't pitch Saturday. He did 0:10:24.960 --> 0:10:27.240 pitch the eighth inning last night, Wandy Peralta pitch the 0:10:27.320 --> 0:10:30.920 ninth winner. Tonight plays Houston in the ALCS third Grade 0:10:30.960 --> 0:10:33.320 week where both the Jets and Giants won. The Jets 0:10:33.360 --> 0:10:35.320 with an upset whin. They've yet to be favored in 0:10:35.320 --> 0:10:37.720 a game this season, but three big second half plays 0:10:38.080 --> 0:10:41.199 carried them at Green Bay of Raxton Barrios twenty r 0:10:41.280 --> 0:10:43.240 t d run a block punt with returned for a 0:10:43.280 --> 0:10:46.040 score in the Jets put the game away that Winson 0:10:46.120 --> 0:10:55.000 takes the sneak counter hand off at the thirty touch down, 0:10:55.920 --> 0:11:00.760 a little tiltery side hand off the home some Jet 0:11:00.840 --> 0:11:05.440 fans in the crown and does a Jet lambop, not 0:11:05.440 --> 0:11:08.240 only a Lambeau leap, but later Sauce Gardner was wearing 0:11:08.240 --> 0:11:10.800 a cheese head after they beat the Factors twenty seven 0:11:10.840 --> 0:11:13.320 to ten, Jets for four and two Giants or five 0:11:13.360 --> 0:11:16.360 and one another big comeback and MetLife. They trailed Baltimore 0:11:16.400 --> 0:11:19.240 by ten just over six minutes left down the stretch 0:11:19.280 --> 0:11:22.640 two touchdowns, two fource turnovers. The Giants beat the Ravens 0:11:23.200 --> 0:11:26.599 to twenty. NFC E showdown last night, Philadelphia went to 0:11:26.679 --> 0:11:30.120 six and oh beat Dallas to seventeen on staf that 0:11:30.160 --> 0:11:33.280 went Bloomberg Sportsco. Thank you, John Red Headlines crossing the 0:11:33.280 --> 0:11:37.559 Bloomberg terminal. UK Chancellor of the Exchequer Jeremy Hunt releasing 0:11:37.679 --> 0:11:42.239 a statement reversing more of Prime Minister Liz Trust's economic policies, 0:11:42.559 --> 0:11:46.480 scrapping a plan to cut income taxes indefinitely and shortening 0:11:46.480 --> 0:11:50.280 a universal energy support plan until April of next year. 0:11:50.320 --> 0:11:54.280 We're gonna get reaction next. As we parsed the details 0:11:54.360 --> 0:11:58.640 of this statement. Bloomberg opinion columnist Marcus Ashworth will join 0:11:58.760 --> 0:12:01.640 us in the minutes ahead. As we watched, futures continue 0:12:01.679 --> 0:12:08.000 to rise on Wall Street. This is Bloomberg Bloomberg eleven 0:12:08.040 --> 0:12:10.360 three oh weather, mostly cloudy, chants for a few showers today, 0:12:10.400 --> 0:12:14.600 highs in the upper sixties, mid fifties Tomorrow and Wednesday 0:12:14.960 --> 0:12:18.880 under mostly sunny skies. Right now fifty seven in Central 0:12:18.920 --> 0:12:25.199 Park Markets. Headlines and breaking news twenty four hours a 0:12:25.280 --> 0:12:28.320 day at Bloomberg dot Com, The Bloomberg Business at and 0:12:28.440 --> 0:12:38.439 at Bloomberg Quick Tape is a Bloomberg Business Flash and 0:12:38.559 --> 0:12:41.920 I'm Karen Moscow. And futures are higher with SMP futures 0:12:41.920 --> 0:12:44.680 at forty seven points down. Futures of three hundred thirty 0:12:44.800 --> 0:12:47.440 nasdack futures of one d fifty nine. The decks in 0:12:47.480 --> 0:12:50.520 Germany's up eight tenths of upper cent. Can your treasury 0:12:50.559 --> 0:12:53.360 u seconds you know, three point nine three percent and 0:12:53.400 --> 0:12:55.640 they yield on the two year four point four two 0:12:55.640 --> 0:12:58.640 percent nine Next, screwed oil is up four ten percent 0:12:58.679 --> 0:13:01.080 or thirty four cents at eighty five dollars n cents 0:13:01.080 --> 0:13:03.400 a barrel called make school. That's of nine tenths per 0:13:03.400 --> 0:13:06.160 cent or fourteen dollars forty cents at sixteen sixty three 0:13:06.200 --> 0:13:09.560 twenty announced the euro point nine seven six two against 0:13:09.600 --> 0:13:11.920 the dollar. British found one point one three oh five 0:13:12.000 --> 0:13:14.520 at the N one forty eight point six four and 0:13:14.559 --> 0:13:17.240 bitcoin is a tenth of a percent in nineteen thousand, 0:13:17.280 --> 0:13:20.440 three hundred fifty dollars. That's a bloomberg business flash. Now 0:13:20.440 --> 0:13:23.120 here's Michael Barr with Moore unless going on around the world. 0:13:23.160 --> 0:13:26.280 Michael Karen, thank you very much. Ukraine's capital was under 0:13:26.320 --> 0:13:29.280 missile attack from Russia with the so called suicide drones 0:13:29.320 --> 0:13:33.800 this morning. Several loud explosions rocked Keith. Russian strikes over 0:13:33.840 --> 0:13:37.680 the past week have hit infrastructure, including power facilities. A 0:13:37.760 --> 0:13:40.640 late Pole shows control of the House is likely to 0:13:40.679 --> 0:13:44.640 flip to Republicans with election day more than three weeks away. 0:13:45.120 --> 0:13:48.960 A CBS News You Got polling projection would give Republicans 0:13:48.960 --> 0:13:51.440 a two twenty four to two eleven advantage in the 0:13:51.440 --> 0:13:55.120 House over Democrats. In baseball, the deciding Game five is 0:13:55.160 --> 0:13:59.880 tonight between the Yankees and the Guardians in their a lvs. Yesterday, 0:14:00.040 --> 0:14:03.720 New York survived, beating Cleveland for two in Game four. 0:14:04.280 --> 0:14:08.440 In the NFL, the Giants beat Ravens, the Jets beat 0:14:08.440 --> 0:14:12.840 the Packers ten, the Patriots won forty, Niners lost. Global 0:14:12.880 --> 0:14:15.440 News twenty four hours a day on here and on 0:14:15.559 --> 0:14:18.880 Bloomberg Quick Take, powered by more than twenties seven hundred 0:14:18.920 --> 0:14:21.800 journalists and analysts and more than a hundred twenty countries. 0:14:21.840 --> 0:14:24.760 I'm Michael barn. This is Bloomberg Nathan. Thanks Michael. At 0:14:24.760 --> 0:14:27.720 six nineteen on Wall Street Live from the Bloomberg Interactive 0:14:27.720 --> 0:14:30.760 Broker Studios. This is Bloomberg Daybreak, and we're waiting for 0:14:30.840 --> 0:14:33.440 comments from the new Chancellor of the Exchequer in the UK, 0:14:33.760 --> 0:14:37.600 Jeremy Hunt. But he has released a statement on his 0:14:37.680 --> 0:14:40.960 plans to get his country's finances in order. It's not 0:14:41.040 --> 0:14:43.920 just putting the brakes on Prime Minister Liz Trust is 0:14:44.080 --> 0:14:48.040 unfunded tax cuts, but it's a major reversal here. Let's 0:14:48.040 --> 0:14:51.080 get more now from Bloomberg opinion columnist Marcus Ashworth. As 0:14:51.080 --> 0:14:55.280 we passed through what the new Chancellor is going to say, 0:14:55.400 --> 0:14:59.120 and we know Marcus that income tax cuts are going 0:14:59.160 --> 0:15:03.680 to be shelved indefinitely, and it looks like a universal 0:15:03.840 --> 0:15:06.160 energy support program is going to get cut off a 0:15:06.200 --> 0:15:10.560 lot sooner than Prime Minister Trust wanted. This is a 0:15:11.120 --> 0:15:18.440 torching of the Prime Minister's fiscal plan. Well, we have 0:15:18.480 --> 0:15:22.400 an expressed in the ukake or reverse theerret um and 0:15:22.560 --> 0:15:26.160 essentially this is uh yeah, a complete unwine you turn 0:15:26.200 --> 0:15:29.280 probably doesn't even give it full justice. It's it's a 0:15:29.360 --> 0:15:32.240 scrapping of an entire vision that had been laid out 0:15:32.720 --> 0:15:35.640 throughout the leadership campaign and indeed in the first few 0:15:35.840 --> 0:15:39.720 weeks of office for his Trust. It leads you know, 0:15:40.280 --> 0:15:43.960 there's no justification in theory for her to remain in power. UM. 0:15:44.120 --> 0:15:46.920 But other stability in a sense that no one wants 0:15:47.120 --> 0:15:50.160 a leadership election and yes another prime minister aft of 0:15:50.240 --> 0:15:55.160 four uh finance ministerism in the middle last four months, UM. 0:15:55.200 --> 0:15:57.280 But you know, some of this makes quite a bit 0:15:57.320 --> 0:16:00.600 of sense. A lot of criticism had come of the 0:16:00.720 --> 0:16:04.880 various sources of the UK's energy price capping pan was 0:16:04.920 --> 0:16:09.960 too comprehensive and not targeted sufficiently towards the most needy, 0:16:10.320 --> 0:16:14.440 and the sense it was a blanket um program. Well 0:16:14.440 --> 0:16:17.040 that that that will carry on for this winter m 0:16:17.160 --> 0:16:19.840 baron mind, gas prices have dropped quite sharply, so sell 0:16:19.920 --> 0:16:22.160 the numbers that have been thrown around rather wildly from 0:16:22.200 --> 0:16:25.640 some think tanks and for a certain media sources have 0:16:25.800 --> 0:16:29.200 proved to be perhaps too apocalyptic. But nonetheless, um, clearly 0:16:29.240 --> 0:16:33.680 the government couldn't couldn't really justify putting as such a 0:16:33.800 --> 0:16:36.240 huge blanket over all all energy costs, and it wasn't 0:16:36.240 --> 0:16:38.680 necessarily very good, uh, you know a sense of the 0:16:39.000 --> 0:16:42.800 planets either we need to encourage people to reduce the 0:16:42.920 --> 0:16:45.560 consumption of energy as well than just the cost of it. 0:16:45.680 --> 0:16:49.240 So that makes some sense that that that's basically about 0:16:49.360 --> 0:16:51.840 half way, I would say, in and getting to the 0:16:51.920 --> 0:16:55.360 level where we think, um, the Office for Budget Responsibility 0:16:55.400 --> 0:16:57.560 wants to see the burther balance of the books, maybe 0:16:57.600 --> 0:17:01.200 a little bit over halfway include the corporate tax hikes 0:17:01.240 --> 0:17:05.120 in backup and some of the stuff like filling around 0:17:05.200 --> 0:17:07.920 one pencil income tax was never going to get anyone anywhere, 0:17:08.119 --> 0:17:10.520 So I think they just accepted reality. But you know, 0:17:10.560 --> 0:17:13.320 as far as the UK is concerned, this is you know, 0:17:13.480 --> 0:17:15.919 we're back to where we were on the Ritchie sanak 0:17:16.160 --> 0:17:21.240 Um perhaps for the sunly more comprehensive and fundable budget 0:17:22.000 --> 0:17:26.440 halfway there is that enough to give confidence to investors 0:17:26.560 --> 0:17:30.919 in the UK. No, because the political situation is clearly 0:17:31.040 --> 0:17:34.640 very few brile animal remains so um until either there's 0:17:34.640 --> 0:17:37.600 an election or indeed as trust goes. But I mean 0:17:37.840 --> 0:17:40.879 at the point here is this that at least the 0:17:40.920 --> 0:17:43.879 new Chancellor as as as has laid out is you 0:17:43.920 --> 0:17:48.440 know plans quite clearly, very quickly. He's brought things forward 0:17:49.040 --> 0:17:51.560 um and full respect will be given to the Office 0:17:51.600 --> 0:17:54.680 for Budget Responsibility. But you know, there is one notable 0:17:54.680 --> 0:17:56.440 thing about this. You know that there is going to 0:17:56.480 --> 0:17:59.160 be a recession in the UK. There's a risk prim 0:17:59.320 --> 0:18:01.840 in on top of got of UK government borrowing which 0:18:01.840 --> 0:18:04.800 has got to be eradicated. Inflation has got to be controlled. 0:18:04.800 --> 0:18:08.880 Those two things can only mean that the economy will 0:18:08.880 --> 0:18:11.280 go into recession to to to solve both those those 0:18:11.320 --> 0:18:13.760 important things. Getting rid of that risk premium next across 0:18:13.800 --> 0:18:16.760 the borrowing and getting group on inflation will mean that 0:18:16.800 --> 0:18:19.560 the economy will turn down, and that's because there will 0:18:19.560 --> 0:18:23.360 be less government spending, a liver less tax cuts, and 0:18:23.640 --> 0:18:26.560 in some senses that you know that that will hopefully 0:18:26.600 --> 0:18:30.240 could bring guilt yours back under control. Maybe an enable 0:18:30.600 --> 0:18:33.120 inflation has turned down quick and faster, which could mean 0:18:33.160 --> 0:18:35.880 that the interest rates will not have to ride quite 0:18:35.880 --> 0:18:37.960 as high as they might want I might have to do. 0:18:38.040 --> 0:18:40.240 But they are still gonna be rising on November three, 0:18:40.480 --> 0:18:43.720 probably by seventy five basis points, possibly are under basis points. 0:18:43.760 --> 0:18:46.000 That's the day after the Fed moves by a similar amount. 0:18:46.440 --> 0:18:48.280 So you know, there's there is more pain to come 0:18:48.320 --> 0:18:51.200 in the UK, but at least there's some some light 0:18:51.680 --> 0:18:54.439 possibly at the other tunnel. Only thirty seconds left here 0:18:54.440 --> 0:18:57.040 in Marcus. How much pain is ahead for Liz trust 0:18:58.400 --> 0:19:01.879 oh maximum? I mean, you know, if she survives this, uh, 0:19:01.920 --> 0:19:05.520 then it will be only because her party just do 0:19:05.600 --> 0:19:08.639 not want a change right right now, and they're prepared 0:19:08.720 --> 0:19:11.560 to see it through to the election whereby almost certainly 0:19:11.600 --> 0:19:13.840 she will lose power anyway. It's the question whether or 0:19:13.840 --> 0:19:17.200 not they will prepared to go through another another leadership change. 0:19:17.200 --> 0:19:18.800 It is quick and they replace it with something like 0:19:18.920 --> 0:19:20.760 Rishie Sanak, and it can be done very swiftly, and 0:19:20.840 --> 0:19:23.359 I think it will slappen. Thanks Marcus, good having you 0:19:23.400 --> 0:19:26.240 on with us as we wait those comments from Jeremy Hunt. 0:19:26.240 --> 0:19:29.240 But again the statement has come out. Tax cuts shelved 0:19:29.280 --> 0:19:32.320 indefinitely on the income tax side, reversing plans to slash 0:19:32.359 --> 0:19:35.680 dividend tax rates and scrap alcohol duties, and a universal 0:19:35.760 --> 0:19:38.679 energy support is going to expire in April, much sooner 0:19:38.720 --> 0:19:42.400 than expecting. Uh. That is the plan from Jeremy Hunt. 0:19:42.400 --> 0:19:45.399 He says it will raise thirty two billion pounds going 0:19:45.480 --> 0:19:48.320 forward here and looking at the pound this morning, it's 0:19:48.359 --> 0:19:52.960 been strengthening ahead of these expected changes from the Chancellor. 0:19:53.160 --> 0:19:55.440 British pound now trading at one point one to nine 0:19:55.480 --> 0:19:59.160 three against the dollar, futures moving higher more more than 0:19:59.200 --> 0:20:01.880 one percent to across the board. In fact, you're listening 0:20:01.920 --> 0:20:08.680 to Bloomberg daybreak Bloomberg eleven three oh Weather mostly the 0:20:08.680 --> 0:20:10.760 cloudy today, chance for a few showers with high and 0:20:10.840 --> 0:20:14.040 the upper sixties. It will turn mostly sunny and cooler tomorrow, 0:20:14.080 --> 0:20:18.280 mid fifties tomorrow and Wednesday, right now fifty seven degrees 0:20:18.320 --> 0:20:25.560 in Central Park, broadcasting live from the Bloomberg Interactive Broker 0:20:25.680 --> 0:20:29.080 Studio in New York, Bloomberg E Living Free on to Washington, 0:20:29.160 --> 0:20:32.560 d C, Bloomberg nine nine one to Boston, Bloomberg one 0:20:32.560 --> 0:20:35.720 O six one does San Francisco, Bloomberg NUN sixty to 0:20:35.800 --> 0:20:39.000 the country, Sirius XM CHO one nineteen and around the 0:20:39.040 --> 0:20:42.840 globe the Bloomberg Business apt and Bloomberg Radio dot Com. 0:20:42.880 --> 0:20:51.520 This is Bloomberg Daybreak six thirty on Wall Street. Good morning, 0:20:51.520 --> 0:20:54.440 I'm Nathan Hagar and I'm Karen Moscow. We're just about 0:20:54.480 --> 0:20:56.880 three hours away from the open of US trading. Time 0:20:56.920 --> 0:20:58.800 for the five things that you need to notice start 0:20:58.800 --> 0:21:01.879 your day. Brought to you by Interactive Brokers ib k R. 0:21:01.960 --> 0:21:04.760 Event Trader offers a new way to trade futures. Use 0:21:04.800 --> 0:21:07.200 event contract to trade your opinion on yes or no 0:21:07.359 --> 0:21:11.000 questions in KEYCME futures markets. Learn more an event trader 0:21:11.080 --> 0:21:14.760 dot Interactive Brokers dot com. Of First, the pound in 0:21:14.880 --> 0:21:18.880 UK bonds are rallying. That's after new UK Chancellor Jeremy 0:21:18.960 --> 0:21:23.400 Hunt announced plans to scrap tax cuts indefinitely. He's making 0:21:23.440 --> 0:21:26.280 a U turn on Prime Minister list trusts economic agenda, 0:21:26.760 --> 0:21:29.600 although the Prime Minister and I are both committed to 0:21:29.640 --> 0:21:34.560 cutting corporation tax. On Friday, she listened to concerns about 0:21:34.640 --> 0:21:37.280 the mini budgets and confirmed we will not proceed with 0:21:37.280 --> 0:21:41.480 the cut corporation tax announced and Chancellor Hunt will also 0:21:41.560 --> 0:21:44.159 speak to the House of Comments later today. We'll meantime 0:21:44.160 --> 0:21:46.720 in Asia, Karen President Chi Jin Pink says China is 0:21:46.720 --> 0:21:49.760 staying the course as it faces growing challenges from the US. 0:21:50.040 --> 0:21:52.879 At the Communist Party Congress, she touted his economic and 0:21:53.000 --> 0:21:58.200 COVID policies and address Taiwan independence. We have resolutely fort 0:21:58.280 --> 0:22:06.000 against separtism and talent interference, demonstrating our result ability to 0:22:06.400 --> 0:22:14.200 safeguard China's soupeignty and territorial interpret apart Taiwan independence. President 0:22:14.280 --> 0:22:17.080 Ji Jin thinks, speaking through an interpreter, also pledged Beijing 0:22:17.080 --> 0:22:19.320 will prevail in its tech battle with the U S 0:22:19.359 --> 0:22:22.760 over computer chips on Well Street, Nathan, US futures are 0:22:22.760 --> 0:22:26.320 bouncing back from Friday sell off. FED policy remains in focus. St. 0:22:26.359 --> 0:22:29.640 Louis President U. St. Louis FED President Jim Bullard says 0:22:29.640 --> 0:22:31.639 a seventy five basis point hike at each of the 0:22:31.680 --> 0:22:34.240 next two meetings is possible, and that forward guide and 0:22:34.280 --> 0:22:37.000 so will be critical for limiting volatility. We've got the 0:22:37.040 --> 0:22:40.200 repricing dynamic going on. We are asking all of you 0:22:40.320 --> 0:22:43.159 to um take into account the higher rates that have 0:22:43.280 --> 0:22:45.199 to come, take into account that we're going to have 0:22:45.240 --> 0:22:48.320 to get inflation down in the US and get that 0:22:48.400 --> 0:22:52.760 repricing to occur in as orderly a fashion as possible. St. 0:22:52.800 --> 0:22:55.040 Louis FED President Jim Bullard made the comments over the 0:22:55.040 --> 0:22:57.080 weekend at the annual meeting of the I, m F 0:22:57.240 --> 0:22:59.240 and World Bank. On the earning s front, Karen, Bank 0:22:59.240 --> 0:23:01.720