WEBVTT - Bloomberg Daybreak: August 8, 2022 - Hour 1 (Radio) 0:00:03.480 --> 0:00:06.960 Live from the Bloomberg Interactive Broker Studios. This is Bloomberg 0:00:07.040 --> 0:00:10.799 day Break for Monday AUGUSTO. Coming up this hour, he 0:00:10.920 --> 0:00:14.120 sent it passes a landmark tax, climate and healthcare bill. 0:00:14.280 --> 0:00:17.680 Wall Street races for another key report on inflation. Morgan 0:00:17.760 --> 0:00:21.960 Stanley Goldman Stratagists predict a dimming profit outlook for Corporate America, 0:00:22.320 --> 0:00:26.160 and the CEO of Carlisle Grove unexpectedly steps down. New 0:00:26.239 --> 0:00:29.280 York Mayor Adam says they're welcome, but it's criticizing Governor 0:00:29.320 --> 0:00:32.400 Rabbit after sending a second bus load of migrants from Texas. 0:00:32.840 --> 0:00:36.000 Michael Varner more an I'm John stadshowering forth. Jacob de 0:00:36.080 --> 0:00:38.199 Grand pitched the Mets to victory over the Brave. They 0:00:38.200 --> 0:00:40.800 won four or five of the series. The Yankees swept 0:00:40.920 --> 0:00:46.360 in St. Louis. That's all s trended ahead on Bloomberg 0:00:46.440 --> 0:00:51.520 day Break on Bloomberg Eliving three, on New York, Bloomberg one, Washington, 0:00:51.640 --> 0:00:55.240 d C, Bloomberg one oh six one, Boston, Bloomberg nine 0:00:55.320 --> 0:00:59.560 sixties and Francisco, Syrias x AM one nineteen and around 0:00:59.560 --> 0:01:02.440 the world on Bloomberg Radio dot Com and via the 0:01:02.440 --> 0:01:09.840 Bloomberg Business app. Good morning, I'm John Tucker. I'm Nathan Hagar. 0:01:09.920 --> 0:01:12.679 Futures are moving higher this Monday morning. They are coming 0:01:12.720 --> 0:01:14.440 up to five oh one on Wall Street. We checked 0:01:14.440 --> 0:01:17.200 the markets every fifteen minutes during the trading day. On Bloomberg, 0:01:17.680 --> 0:01:19.920 SFP futures are up ten points right now, DWAL future 0:01:20.000 --> 0:01:23.240 is up fifty eight sowar NASDACK futures. The tenure Treasury 0:01:23.280 --> 0:01:25.600 is up nine thirty seconds. The yield two point seven 0:01:25.680 --> 0:01:28.000 nine percent yield on the two year three point one 0:01:28.120 --> 0:01:31.080 n I'm ex screwed down seven cents per cent, or 0:01:31.120 --> 0:01:34.080 sixty four cents at eighty eight dollars thirty three cents 0:01:34.120 --> 0:01:36.560 a barrel. Jonathan will have more on the markets in 0:01:36.640 --> 0:01:39.720 a minute. First, we started in Washington. Over the weekend, 0:01:40.080 --> 0:01:43.480 the Senate passed a landmark tax, climate, and healthcare bill. 0:01:43.920 --> 0:01:47.080 Fifty one Democrats voted in favor of the measure, fifty 0:01:47.120 --> 0:01:50.960 Republicans against it. Vice President Kamala Harris casting the tie 0:01:50.960 --> 0:01:53.440 breaking vote. When it comes to what's of the bill, 0:01:53.520 --> 0:01:56.760 we get more from Bloomberg's head Baxter. The top one 0:01:56.800 --> 0:02:00.680 percent avoided the tax increases liberal Democrats had wanted at 0:02:00.720 --> 0:02:03.960 the beginning. There will be a tax on stock buybacks. 0:02:04.280 --> 0:02:08.160 The legislation also aims to prevent large corporations from exploiting 0:02:08.240 --> 0:02:11.840 tax breaks, and there will be a fifteen percent minimum. 0:02:11.880 --> 0:02:15.720 It did not raise the salt deduction on the climate side, 0:02:15.760 --> 0:02:18.160 and sentived to cut greenhouse gases with a hope to 0:02:18.200 --> 0:02:22.560 cut emissions by about from two thousand five levels by 0:02:22.560 --> 0:02:26.560 the end of the decade. It will extend the tax 0:02:26.600 --> 0:02:29.720 credit on e v s, but there'll be restrictions that 0:02:29.880 --> 0:02:34.160 US electric car makers say will exclude seventy of vehicles, 0:02:34.320 --> 0:02:38.240 and Medicare will be allowed to negotiate drug prices. In 0:02:38.280 --> 0:02:41.120 San Francisco, I'm at Baxter Bloomberg Daybreak, All right, and 0:02:41.200 --> 0:02:43.280 thank you. On Wall Street today, the FED is in 0:02:43.400 --> 0:02:46.959 focus after friday strong jobs reports. Speculation is growing that 0:02:47.080 --> 0:02:49.919 another seventy five basis point rate height could be coming. 0:02:50.160 --> 0:02:53.480 San Francisco FED president Mary Daily tells CBS the Central 0:02:53.480 --> 0:02:55.919 Bank has a lot of work ahead. We are far 0:02:56.000 --> 0:02:58.800 from done yet. That's the promise of the American people. 0:02:58.840 --> 0:03:01.320 We are far from done. We're committed to bringing inflation 0:03:01.400 --> 0:03:03.880 down and will continue to work until that job is 0:03:03.919 --> 0:03:06.519 fully done. So it would still be appropriate to raise 0:03:06.639 --> 0:03:10.880 rates in September by half percent. Absolutely, and you know 0:03:10.919 --> 0:03:13.720 we need to be data dependent. Mary Daily made those 0:03:13.720 --> 0:03:16.440 comments to Margaret Brennan on CBSS Face the Nation and 0:03:16.480 --> 0:03:20.160 catch the program Sunday afternoons on Bloomberg Radio. Mary Daily 0:03:20.200 --> 0:03:23.480 and the Fed get another key report and inflation this Wednesday. 0:03:23.760 --> 0:03:26.440 That's when the government releases the consumer price Index for 0:03:26.480 --> 0:03:29.480 the month of July. I's gonna preview from Bloomberg's Vinny 0:03:29.560 --> 0:03:33.480 Down Judas. We may see some moderation as energy prices retreat. 0:03:33.760 --> 0:03:37.640 Economists say the US household inflation rate, as tracked by 0:03:37.680 --> 0:03:41.880 the Consumer Price Index, probably slipped below nine in July. 0:03:42.480 --> 0:03:45.320 June's on nine point one percent jump, the fastest since 0:03:46.560 --> 0:03:50.080 the Bad Old days for inflation. Inflation remains far above 0:03:50.120 --> 0:03:53.120 the Federal reserves two percent target. The after mathis supply 0:03:53.200 --> 0:03:56.840 shortages and delays. This week's date on US producer prices 0:03:56.840 --> 0:04:00.839 and import prices may also moderate. Benny Dell Judas, bloom Daybreak, Okay, 0:04:00.840 --> 0:04:02.680 if any, thank you, And as we await that report 0:04:02.720 --> 0:04:06.040 on inflation, the outlook from consumers is turning more gloomy. 0:04:06.200 --> 0:04:08.680 When you ask most Americans, they say the economy is 0:04:08.720 --> 0:04:12.040 getting worse and Bloomberg's Doug Krisner has the details. A 0:04:12.160 --> 0:04:16.000 poll from ABC News IPSOS found about sixty of those 0:04:16.040 --> 0:04:19.840 surveyed think the economy is deteriorating. That's the highest since 0:04:19.839 --> 0:04:22.760 two thousand and eight. The poll also finds only thirty 0:04:22.800 --> 0:04:25.600 seven percent saying they approve of how President Biden is 0:04:25.640 --> 0:04:29.120 handling the recovery. That's unchanged from June. We're just three 0:04:29.200 --> 0:04:32.320 months before the midterm elections. US employment is back to 0:04:32.400 --> 0:04:35.920 pre pandemic levels, but inflation is the hottest in decades 0:04:36.200 --> 0:04:39.159 and more stubborn than expected. Demand for gasoline in the 0:04:39.200 --> 0:04:42.440 US is now nine percent below last year in New York. 0:04:42.440 --> 0:04:45.279 On Duck Krisner Bloomberg Daybreak. Alright, thanks Juve. There's also 0:04:45.360 --> 0:04:47.760 earnings to watch this week. We get results from nearly 0:04:47.800 --> 0:04:50.600 two dozen companies in the SP five Hunter. Let's get 0:04:50.640 --> 0:04:54.479 more from Bloomberg's Charlie Pellett. Traders will continue to parse 0:04:54.600 --> 0:04:58.520 corporate earnings reports against a backdrop of aggressive rate hikes, 0:04:58.800 --> 0:05:02.720 Kim Forest is to investment officer at Bouquet Capital Partners. 0:05:02.880 --> 0:05:06.599 Companies are saying their visibility for the next six months 0:05:07.240 --> 0:05:11.560 is whatever, and they're maintaining more or less maintaining their 0:05:11.640 --> 0:05:14.520 their estimates. So I think that speaks well. These companies 0:05:14.560 --> 0:05:17.800 know their business. They know they can't set the bar 0:05:17.880 --> 0:05:20.840 too high for themselves, so it's probably kind of low. 0:05:21.000 --> 0:05:24.719 Among the names reporting this week, Walt Disney, Coin Based Global, 0:05:24.920 --> 0:05:29.039 a I G. Barrack Gold and Tyson Foods in New York, 0:05:29.120 --> 0:05:32.000 Charlie Pellett Bloom Bird Day breaking all right, Charlie, thank you. 0:05:32.040 --> 0:05:34.640 A dimming earnings outlook is at odds with the recent 0:05:34.680 --> 0:05:37.679 rebound in stock markets. That's according to strategist of Morgan 0:05:37.760 --> 0:05:41.200 Stanley and Goldman Sachs. Both Morgan's Mike Wilson and Goldman's 0:05:41.240 --> 0:05:44.760 David Constant expect corporate profit margins to contract next year 0:05:44.800 --> 0:05:48.279 given unrelenting cost pressures. In fact, Wilson says, quote, the 0:05:48.320 --> 0:05:52.040 best part of the rally is over Warren Buffett, following 0:05:52.040 --> 0:05:55.720 an age old strategy by the dip, but do it cautiously. 0:05:56.240 --> 0:05:58.600 Buffett's Bertshire Hathaway stepped in as the S and P 0:05:58.680 --> 0:06:01.839 five hunder ships sixteen percent. In the latest quarter. It 0:06:01.960 --> 0:06:04.520 was a net buyer of equities, reporting three point eight 0:06:04.560 --> 0:06:07.920 billion dollars in purchases. That's a different story than last year. 0:06:07.920 --> 0:06:10.080 When it was a net seller. In the second quarter 0:06:10.200 --> 0:06:14.040 of surprise changed John at the top of private equity 0:06:14.040 --> 0:06:17.880 giant Carlisle Group. The CEO q Sung Lee has stepped down. 0:06:18.120 --> 0:06:20.840 Lee's five year employment contract was due to expire at 0:06:20.839 --> 0:06:23.080 the end of this year. Bloomberg News has learned Lee 0:06:23.120 --> 0:06:26.719 and Carlisle's board had clashed over his contract in recent discussions. 0:06:26.760 --> 0:06:29.159 The firm's co founder, Bill Conway will step in as 0:06:29.200 --> 0:06:32.359 interim CEO and looking overseas, now, we have a major 0:06:32.400 --> 0:06:35.440 development of the pandemic front in Hong Kong. The city 0:06:35.480 --> 0:06:39.640 will shorten hotel quarantine times for arrivals starting on Friday. 0:06:39.920 --> 0:06:43.400 Bloomberg day Break Asia anchor Brian Curtis has more from 0:06:43.400 --> 0:06:46.080 Hong Kong. People will only need to spend three days 0:06:46.120 --> 0:06:49.640 in quarantine now down from seven. Their movements will be 0:06:49.680 --> 0:06:52.520 restricted for four additional days after that, but they can 0:06:52.600 --> 0:06:56.320 leave their residents. This marks a fundamental break from China's 0:06:56.360 --> 0:07:00.200 strict COVID zero policies. Business groups say it's just step 0:07:00.240 --> 0:07:02.680 in the right direction, but they'd like to see quarantine 0:07:02.760 --> 0:07:06.720 dropped altogether in Hong Kong. Brian Curtis Bloomberg day Break 0:07:06.960 --> 0:07:08.880 Brian thanks a lot ahead of the cash show. Up 0:07:08.920 --> 0:07:12.160 on Wall Street. Dow futures they're up seventy points right now, 0:07:12.400 --> 0:07:16.440 SMP evening futures thirteen points higher, and the Nazak futures 0:07:16.680 --> 0:07:23.720 they are up sixty six points. This is Bloomberg. There's 0:07:23.760 --> 0:07:25.600 five o seven on Wall Street. Time to bring in 0:07:25.680 --> 0:07:27.760 Michael Barr with more than what else is going on 0:07:27.880 --> 0:07:30.640 in New York and around the world. John, Thank you 0:07:30.720 --> 0:07:33.520 very much. There. The heat continues to cause air conditioners 0:07:33.520 --> 0:07:36.680 to blast on high in the Tri State area Bloomberg 0:07:36.680 --> 0:07:40.320 meeting religious Rob Carolin reports, Michael, the heat wave across 0:07:40.360 --> 0:07:43.360 the Tristate area continues for a couple more days. National 0:07:43.360 --> 0:07:45.520 Weather Service has a heat advisory in effect through eight 0:07:45.560 --> 0:07:48.360 pm tomorrow evening, but we will be breaking the heat 0:07:48.360 --> 0:07:51.560 wave on Wednesday. Frontal system be dropping down from the north. 0:07:51.560 --> 0:07:54.080 Will see showers and thunderstorms Wednesday. It only gets to 0:07:54.120 --> 0:07:57.080 eighty five, and it looks more comfortable for Thursday and Friday, 0:07:57.120 --> 0:07:59.000 but it's gonna be tough today and tomorrow with highs 0:07:59.040 --> 0:08:03.120 between ninety and nine. Michael, Thank you. Rob. A second 0:08:03.120 --> 0:08:05.760 bus load of migrants from Texas arrived in New York 0:08:05.760 --> 0:08:09.000 City yesterday as part of Governor Greg Abbott's plan to 0:08:09.080 --> 0:08:13.160 send migrants from his state so called sanctuary cities. Abbot 0:08:13.160 --> 0:08:15.880 claims that his state can handle the influx and that 0:08:16.040 --> 0:08:19.400 cities that say they can should take the burden off 0:08:19.440 --> 0:08:22.360 the border states who are getting inundated. But New York 0:08:22.400 --> 0:08:25.000 City Mayor Eric Adams says the migrants who are coming 0:08:25.040 --> 0:08:28.840 to his city are being forced onto the buses without 0:08:28.920 --> 0:08:31.880 warning and that officials and volunteers are doing what they 0:08:31.880 --> 0:08:35.280 can to help them. Mayor Adams also says Texas officials 0:08:35.440 --> 0:08:37.920 aren't in touch with anyone in New York. Then I'll 0:08:37.960 --> 0:08:40.440 let us know what time the buses are leaving. Then 0:08:40.440 --> 0:08:42.520 I'll let us know or what it needs of the 0:08:42.559 --> 0:08:45.560 people on the bus. They're giving us any information, so 0:08:45.720 --> 0:08:49.800 we're unable to really provide the service of people en route, 0:08:50.000 --> 0:08:53.080 and we would like to get that information. New York 0:08:53.120 --> 0:08:56.839 Mayor Adams says the city welcomes them and will provide assistance, 0:08:57.000 --> 0:09:00.079 but has asked for federal help. New York City, you 0:09:00.200 --> 0:09:02.600 are looking for a suspect, they say, stabbed a man 0:09:02.679 --> 0:09:06.120 in the back on the subway station outside Yankee Stadium 0:09:06.120 --> 0:09:09.440 Sunday afternoon. The man was spotted in the subway system 0:09:09.480 --> 0:09:12.720 after the attack, and has been estimated between seventeen and 0:09:12.760 --> 0:09:15.760 twenty one years old. The victim, the Wolling by the 0:09:15.840 --> 0:09:19.199 name of Leo, tells ABC he was waiting for the 0:09:19.280 --> 0:09:22.280 D train when a stranger invaded his personal space. I 0:09:22.280 --> 0:09:24.640 had to let him know, like, excuse me a little. 0:09:24.880 --> 0:09:28.000 You know, young men, get out my personal face. I'm 0:09:28.040 --> 0:09:29.880 not the one to be bothered today. You know, had 0:09:29.880 --> 0:09:32.000 a long day. It's hot. I look back once. He 0:09:32.040 --> 0:09:34.760 didn't move. I look back again. He's still not moving. 0:09:35.480 --> 0:09:38.520 Leo says he believes he was targeted as a gay man. 0:09:39.000 --> 0:09:41.800 He is expected to make a full recovery. A fragile 0:09:42.000 --> 0:09:45.000 ceasefire deal to a nearly three days of fighting between 0:09:45.080 --> 0:09:49.120 Israel and Palestinian militants has held throughout the night. Global 0:09:49.160 --> 0:09:51.400 News twenty four hours a day on air and on 0:09:51.480 --> 0:09:55.199 Bloomberg Quickdake, powered by more than twenty seven hundred journalists 0:09:55.200 --> 0:09:57.720 and analysts more than a hundred twenty countries. High Michael 0:09:57.720 --> 0:10:05.040 Barr and this is Bloomberg, John, Micah, thank you. I'll 0:10:05.040 --> 0:10:07.800 find sim On Wall straight time for the Bloomberg Sports 0:10:07.840 --> 0:10:10.040 Uptake and Morning John Stains Show. Alright and Morning John 0:10:10.080 --> 0:10:12.600 Welcome back to City Field, Jacob Degraham on the mound 0:10:12.640 --> 0:10:14.679 there first time in more than a year. All he 0:10:14.720 --> 0:10:17.679 did was throw five perfect innings. In the sixth the 0:10:17.760 --> 0:10:19.360 walk in a home run, his day was done. He 0:10:19.440 --> 0:10:22.839 got seventeen outs, twelve by strikeout, and the Mets scored 0:10:22.880 --> 0:10:25.360 four runs in the third inning to run doubles by 0:10:25.360 --> 0:10:27.800 Peter Alonso and Markenna and de Graham, and the Mets 0:10:27.840 --> 0:10:29.839 beat the Braves by it the two. That was a 0:10:29.880 --> 0:10:32.480 long day yesterday and these guys came in and you know, 0:10:32.840 --> 0:10:35.480 um put up runs early, and you know, my goal 0:10:35.600 --> 0:10:37.520 was to try to keep it there, and you know, 0:10:37.920 --> 0:10:39.840 Joylily did a great job. And then Das coming in 0:10:39.880 --> 0:10:43.240 and and closing that game. So um, you know, it 0:10:43.320 --> 0:10:46.320 just shows a lot this king grind to everything. You know, 0:10:46.640 --> 0:10:48.200 that was a long day yesterday. And then they come 0:10:48.240 --> 0:10:50.880 off the day and jump on him early and and 0:10:51.000 --> 0:10:53.200 you know finished the series with huge What a series 0:10:53.240 --> 0:10:55.000 of the Mets. They won four or five. They gained 0:10:55.040 --> 0:10:57.200 three games on Atlanta that I leave the inn at 0:10:57.240 --> 0:10:58.959 least by six and a half. And they have also 0:10:59.080 --> 0:11:02.000 caught the Yankee for best record in New York. As 0:11:02.000 --> 0:11:03.679 good a weekend as it was for the mess. That's 0:11:03.679 --> 0:11:05.800 how bad it was for the Yankees in St. Louis. 0:11:05.800 --> 0:11:08.360 The day after the Cardinals won one to nothing, they 0:11:08.400 --> 0:11:11.480 won twelve to nine. Sixteen Yankee hits not enough, as 0:11:11.520 --> 0:11:14.680 Frankie Montaz gave up six runs and his Yankee debut. 0:11:14.720 --> 0:11:17.480 It's the Cardinals seventh grade win their first ever sweep 0:11:17.520 --> 0:11:19.839 of the Yankees. First time all year, the Yankees have 0:11:19.880 --> 0:11:22.320 been swept in a three game series. Over their last 0:11:22.320 --> 0:11:25.560 twenty five games, the Yankees just nine and sixteen. Joe 0:11:25.600 --> 0:11:28.120 Young King Kim, a twenty year old from South Korea, 0:11:28.160 --> 0:11:30.640 won the Windham Golf in greensbro His first hole of 0:11:30.679 --> 0:11:34.360 the tournament last Thursday was a quadruple bogey. Made up 0:11:34.360 --> 0:11:37.000 for that with the final round sixty one Women's Open 0:11:37.080 --> 0:11:40.000 in Scotland, a major one by South African Ashley Bouhi. 0:11:40.160 --> 0:11:44.400 That's her first LPGA. John stash Boomberg Sports John. All right, 0:11:44.440 --> 0:11:46.880 thanks John, and ahead of the open on Wall Streets, 0:11:46.920 --> 0:11:50.240 we have futures in the green as follows Friday's Bang 0:11:50.320 --> 0:11:53.520 Up Jobs report. The down futures right now sixty three 0:11:53.520 --> 0:11:56.080 points center. That's up to tens of her percent. SMP 0:11:56.200 --> 0:12:01.200 futures up ten these futures up fifties its points. You're 0:12:01.240 --> 0:12:07.160 listening to Bloomberg Daybreak. Daybreak brought to you by the 0:12:07.160 --> 0:12:09.440 New York Community Trust. Your name will live on as 0:12:09.440 --> 0:12:11.600 a champion of the causes you care about for years 0:12:11.640 --> 0:12:14.280 to come through a charitable bequest that the New York 0:12:14.320 --> 0:12:18.040 Community Trust. Learn more at Philanthropists dot n y C, 0:12:22.000 --> 0:12:25.400 markets headlines and breaking news twenty four hours a day, 0:12:25.520 --> 0:12:28.520 at Bloomberg dot com, the Bloomberg Business apt and at 0:12:28.520 --> 0:12:38.240 Bloomberg Bucktake. This is a Bloomberg Business Flash. I Nathan 0:12:38.240 --> 0:12:40.200 Hagar's stock to Get in the week started on the 0:12:40.320 --> 0:12:43.640 rise this morning as investors assess the prospects of aggressive 0:12:43.720 --> 0:12:48.360 Federal Reserve interest rate hikes against reassuring earnings. We checked 0:12:48.400 --> 0:12:51.400 the markets every fifteen minutes during the trading day on Bloomberg. 0:12:51.520 --> 0:12:54.560 Right now, SMP futures are up eight points, STAFLE futures up, 0:12:55.440 --> 0:12:58.440 NASZAC futures are higher by fifty points. The acts in 0:12:58.480 --> 0:13:00.839 Germany up three tenths per cent. Attack in Paris is 0:13:00.920 --> 0:13:03.800 higher by a half percent. Ten year Treasury is up 0:13:03.840 --> 0:13:06.440 seven thirty seconds. The yield two point seven nine percent. 0:13:06.520 --> 0:13:09.000 Yield on the two year three point two zero percent. 0:13:09.440 --> 0:13:12.040 Nimex Screwed is down six tenths percent, down fifty four 0:13:12.080 --> 0:13:14.240 cents at eighty eight dollars, forty four cents a barrel. 0:13:14.400 --> 0:13:18.360 Comax Gold little change down forty cents at Sight announced 0:13:18.600 --> 0:13:21.080 the euro one point zero one seven eight against the dollar, 0:13:21.160 --> 0:13:23.599 the pound one point zero eight one. The end is 0:13:23.640 --> 0:13:26.280 at one thirty five point one four and Bitcoin up 0:13:26.280 --> 0:13:29.400 three point seven percent at twenty four thousand, one hundred dollars. 0:13:29.640 --> 0:13:32.160 That's a Bloomberg business flash. Now here's Michael Barr with 0:13:32.240 --> 0:13:34.840 more on what's going on around the world. Good morning, Michael, 0:13:35.040 --> 0:13:38.280 Good morning Nathan. The Senate passed the landmark tax, climate 0:13:38.320 --> 0:13:41.000 and Healthcare bill. The vote on the bill was fifty 0:13:41.000 --> 0:13:44.600 one Democrats in favor the fifty Republicans against, with Vice 0:13:44.600 --> 0:13:47.600 President Kambalay Harris casting the time breaking vote after an 0:13:47.600 --> 0:13:50.800 overnight marathon of votes on amendments. It now goes to 0:13:50.840 --> 0:13:53.600 the House, where it is expected to pass on Friday. 0:13:54.120 --> 0:13:58.319 China's military announced the new exercise near Taiwan today, signaling 0:13:58.360 --> 0:14:00.800 that Beijing wanted to keep up pressure. You're on the island. 0:14:01.040 --> 0:14:04.360 After US House Speaker Nancy Pelosi's visit in baseball, the 0:14:04.440 --> 0:14:08.200 Yankees lost to the Cardinals twelve nine. The Mets beat 0:14:08.200 --> 0:14:12.280 the Braves five to the Red Sox, Orioles and Nationals 0:14:12.280 --> 0:14:15.880 all lost. The Giants beat the A six four Global 0:14:15.920 --> 0:14:18.480 News twenty four hours a day on air and on 0:14:18.520 --> 0:14:21.640 Bloomberg Quick Take, powered by more than twenty seven hundred 0:14:21.680 --> 0:14:24.880 journalists and analyist more than a hundred twenty countries. Michael 0:14:24.880 --> 0:14:27.680 Barr and this is Bloomberg, John, Michael, thank you, coming 0:14:27.760 --> 0:14:30.040 up on five twenty on Wall Street. We are lying 0:14:30.080 --> 0:14:34.040 from the Bloomberg Interact and broker studios. This is Bloomberg Daybreak. 0:14:34.320 --> 0:14:36.920 Strong US job Stata on Friday that added to the 0:14:36.960 --> 0:14:40.880 case for more fed tightening. You have the major averages 0:14:40.960 --> 0:14:44.960 added mixed, little change on Friday. Futures they're higher this morning, 0:14:45.440 --> 0:14:47.680 so it's driving stocks. Let's get your set up with 0:14:47.720 --> 0:14:50.040 the trading day ahead now with Lori Kalvasin at the 0:14:50.040 --> 0:14:54.520 head of US Equity Strategy at RBC Capital Markets. Laura, 0:14:54.520 --> 0:14:56.760 happy Monday, thanks for being with us. What's in the 0:14:56.840 --> 0:14:59.880 driver's seat for stocks? So look, I think that we 0:15:00.120 --> 0:15:02.920 got an amazing number of cross currents right now between 0:15:02.920 --> 0:15:05.480 the reporting season, which has turned out better than feared 0:15:05.520 --> 0:15:08.320 investors are taking some comfort in that we've got the 0:15:08.360 --> 0:15:11.320 jobs data from last week, We've got said watching. I 0:15:11.360 --> 0:15:13.960 think in general, investors are breathing a bit of a 0:15:14.040 --> 0:15:18.200 sigh of relief over those two que reporting season print. UM. 0:15:18.240 --> 0:15:19.960 We would tell you we're not entirely out of the 0:15:19.960 --> 0:15:23.200 woods from a market perspective in terms of earnings right now, 0:15:23.280 --> 0:15:25.320 just because if there really is a big macro slow 0:15:25.360 --> 0:15:28.800 downcoming economically, UM, numbers do still need to come down. 0:15:28.800 --> 0:15:31.440 But I think for the moment, investors are you know, 0:15:31.520 --> 0:15:35.560 just excited about the resilience that we're seeing. Yeah. I mean, 0:15:35.600 --> 0:15:41.280 by our calculations, almost companies that have reported so far 0:15:41.400 --> 0:15:44.920 delivered positive earnings surprises. You've got to wonder if that 0:15:45.040 --> 0:15:49.520 pace is sustainable and what happens to the margins. Well, 0:15:49.600 --> 0:15:51.680 what's interesting is that if you look at the percent 0:15:51.720 --> 0:15:55.640 of companies beating consensus estimates, UM, we are very very strong. 0:15:55.680 --> 0:15:57.640 We are still high relative to history. We did a 0:15:57.680 --> 0:16:00.040 cut a little more than halfway through reporting season and 0:16:00.120 --> 0:16:03.000 found that about seventies six percent we're beating on earnings 0:16:03.040 --> 0:16:05.960 and the average over time was about sevent But we 0:16:06.040 --> 0:16:09.600 also found that we were well above eight. UM. You know, 0:16:09.640 --> 0:16:12.320 in recent quarters so that the pace is softening just 0:16:12.440 --> 0:16:14.920 a little bit. UM. I'll tell you John, what's really 0:16:14.960 --> 0:16:16.320 interesting to me is that if you look at the 0:16:16.360 --> 0:16:19.040 small cap part of the market, the beat stats are 0:16:19.120 --> 0:16:21.720 hitting all time highs UM, which is maybe one of 0:16:21.760 --> 0:16:24.320 the untold stories in this recording season. So it's smart 0:16:24.360 --> 0:16:26.480 that the small caps are really the star of the show, 0:16:26.880 --> 0:16:30.760 the small tips also being the more domestic stocks. What 0:16:32.440 --> 0:16:36.360 is the differentiation there with the way is that? So 0:16:36.440 --> 0:16:38.120 I think that there are a few things going on. 0:16:38.240 --> 0:16:40.120 We do know that small caps, you know, if you 0:16:40.160 --> 0:16:42.240 look at operating margin trends, do tend to be a 0:16:42.280 --> 0:16:45.120 little bit more sensitive to labor issues. UM. So I 0:16:45.200 --> 0:16:48.080 think it'll be interesting to see if perhaps you know, 0:16:48.120 --> 0:16:50.520 we we have heard companies in recent quarters allude to 0:16:50.520 --> 0:16:52.480 the idea that the labor market is loosening up just 0:16:52.520 --> 0:16:54.560 a little bit. That could be translating to the bottom 0:16:54.560 --> 0:16:56.800 line in small caps in a bigger way. But I 0:16:56.840 --> 0:17:00.240 do think in part it's that domestic revenue explos or 0:17:00.280 --> 0:17:03.520 small caps had less of that international exposure, UM, tend 0:17:03.600 --> 0:17:05.439 to be you know, sort of more resilient and a 0:17:05.480 --> 0:17:08.600 stronger dollar type environment. Whereas when we look at you know, 0:17:08.640 --> 0:17:12.640 the more international SMP five hundred type, because we are 0:17:12.720 --> 0:17:15.320 hearing a lot of complaints about dollar strength, and we 0:17:15.359 --> 0:17:18.320 are seeing a decent number of downward revisions that are 0:17:18.359 --> 0:17:21.399 that are are based on just the currency itself. And 0:17:21.480 --> 0:17:24.720 as the Fed continues to raise rates, the trajectory higher 0:17:24.840 --> 0:17:27.400 the dollar also higher. How much higher do you suppose 0:17:27.440 --> 0:17:31.600 it can go? Well, Luckily my forecasting is limited to 0:17:31.640 --> 0:17:33.840 the S and P five hundred um. But but what 0:17:33.920 --> 0:17:36.960 I will tell you is that UM a stronger dollar, 0:17:37.640 --> 0:17:39.040 you know, at the end of the day, to the 0:17:39.080 --> 0:17:42.919 extent that it's reflecting US economic strength relative to the 0:17:42.920 --> 0:17:45.080 rest of the world, it does actually end up being 0:17:45.600 --> 0:17:47.280 a little bit of a wash on our model. The 0:17:47.280 --> 0:17:51.080 downward revisions do hurt UM from that currency translation, but 0:17:51.119 --> 0:17:52.760 at the end of the day, the sort of relative 0:17:52.760 --> 0:17:55.840 economic strength ends up being a good thing. So there's 0:17:55.880 --> 0:17:58.880 good and bad in the stronger dollar. Another inflation report 0:17:58.960 --> 0:18:01.560 this week, so I'm gonna ask, gonna forecast that have 0:18:01.680 --> 0:18:05.760 we passed peak inflation? So our economists think that we 0:18:05.920 --> 0:18:08.639 could see you know, some tough prints for a little 0:18:08.640 --> 0:18:11.720 bit longer, And you know, they do think the job 0:18:11.800 --> 0:18:13.680 stated that we saw last week will keep the Fed 0:18:13.720 --> 0:18:16.520 aggressive for a little bit longer, um, But in general 0:18:16.560 --> 0:18:18.760 they do think the trend on inflation is going to 0:18:18.840 --> 0:18:21.359 start to moderate soon. We just haven't quite gotten to 0:18:21.359 --> 0:18:24.960 the point where we're there just yet. Does they tell you, well, 0:18:24.960 --> 0:18:26.840 I was just going to tell you, John, I personally, 0:18:26.920 --> 0:18:29.560 as a strategist, I don't you know, I don't love 0:18:29.600 --> 0:18:31.840 the high inflation prints, but I do worry what happens 0:18:31.840 --> 0:18:34.440 to earnings when inflation moderates, because we do tend to 0:18:34.440 --> 0:18:37.640 see a pretty strong correlation between CPI and revenues. Does 0:18:37.680 --> 0:18:40.720 the Climate bill, what's known as the Inflation Reduction Act, 0:18:40.840 --> 0:18:43.240 passed by the Senate over the weekend, does that move 0:18:43.240 --> 0:18:46.119 the needle on stocks? You know? To me, it's not 0:18:46.160 --> 0:18:48.440 a big game changer. We got some questions about the 0:18:48.480 --> 0:18:51.440 stock by back tax um, you know, late last week 0:18:51.480 --> 0:18:53.280 and when it became pretty clear that this bill was 0:18:53.320 --> 0:18:55.719 going to pass. UM, when I talked to my analysts 0:18:55.760 --> 0:18:57.679 and we just did some quick checks, we found that 0:18:57.720 --> 0:19:00.320 most of them, you know, think that maybe they're companies 0:19:00.359 --> 0:19:03.359 will grumble a little bit about this tax, that they 0:19:03.359 --> 0:19:06.560 don't ultimately see it deterring behavior. We had one analyst 0:19:06.640 --> 0:19:08.719 tell us that he thinks his companies are probably going 0:19:08.760 --> 0:19:11.600 to accelerate buybacks in the short term um just to 0:19:11.640 --> 0:19:14.440 sort of get ahead of the tax coming up later. 0:19:15.000 --> 0:19:17.199 But in general, I don't think it's a big game changer. 0:19:17.240 --> 0:19:19.439 We don't have any buy back impact based into our 0:19:19.480 --> 0:19:22.320 earnings model for next year. Maybe it pushes a few 0:19:22.320 --> 0:19:25.719 companies that the margins towards dimdends and benefit sectors like energy, 0:19:26.119 --> 0:19:28.520 but I think it's you know, it's more interesting about 0:19:28.520 --> 0:19:30.879 it what it's signifying politically for the mid terms, to 0:19:30.880 --> 0:19:33.920 be honest, Okay, LORI always a pleasure. We appreciated Lori 0:19:34.040 --> 0:19:38.000 Kalbassy and ahead of US Equity Strategy, RBC Capital Markets, 0:19:38.440 --> 0:19:40.760 ahead of the cash open on Wallstree futures in the 0:19:40.800 --> 0:19:44.120 green for now down futures there are forty points. That's 0:19:44.160 --> 0:19:47.240 of a tenth of a percent. Smp euny futures seven 0:19:47.280 --> 0:19:50.360 points higher, that's a two tents of a percent, Nanzac 0:19:50.440 --> 0:19:53.280 futures three seven points higher. That is a three tense 0:19:53.320 --> 0:19:55.959 of a percent right now, and right now, the ten 0:19:56.040 --> 0:19:59.760 year yield to seventy nine, the two year at three twenty. 0:20:00.440 --> 0:20:08.640 You're listening to Bloomberg day break and just ahead, what's 0:20:08.680 --> 0:20:11.199 in the Climate bill passed by the Senate. What's not 0:20:11.400 --> 0:20:13.879 in the climate bill? Dr Julie Norman will join us 0:20:13.920 --> 0:20:18.160 from University College in London. You are listening good Bloomberg 0:20:18.240 --> 0:20:25.840 day Break broadcasting live from the Bloomberg Interacted Broker Studio 0:20:25.920 --> 0:20:28.800 in New York. Bloomberg E Living freed on to Washington, 0:20:28.880 --> 0:20:33.000 d C. Bloomberg to Boston, Bloomberg one O six one, 0:20:33.119 --> 0:20:36.520 to San Francisco, Bloomberg N sixty to the country Sirius 0:20:36.720 --> 0:20:39.320 XM H O one nineteen and around the globe the 0:20:39.359 --> 0:20:43.840 Bloomberg business in Bloomberg Radio dot Com. This is Bloomberg 0:20:43.920 --> 0:20:52.280 day Break. It's five thirty on Wall Street. Good morning. 0:20:52.280 --> 0:20:54.920 I'm John Tucker. I'm Nathan Hager. We're about four hours 0:20:54.920 --> 0:20:56.800 away from the open of US trading. Let's get you 0:20:56.880 --> 0:20:58.199 up to date on the news you need to know 0:20:58.280 --> 0:21:00.720 at this hour. Beginning in Washington, in where the Senate 0:21:00.760 --> 0:21:03.840 has passed a landmark tax, climate and healthcare bill. The 0:21:03.880 --> 0:21:07.320 move gives President Biden an apparent victory on his domestic agenda, 0:21:07.359 --> 0:21:09.600 but the measure is a shadow of his original build 0:21:09.600 --> 0:21:12.280 back Better plan. Here send a majority, Leader, Chuck Schumer. 0:21:12.800 --> 0:21:16.560