WEBVTT - Bloomberg Daybreak: August 15, 2022 - Hour 2 (Radio) 0:00:02.560 --> 0:00:06.120 B from the Bloomberg Interacted Burger's Studios is Bloomberg day 0:00:06.160 --> 0:00:09.760 Break for Monday, August fifteen two. Coming up the shower, 0:00:10.039 --> 0:00:14.040 China's Central Bank unexpectedly cuts the interest rates. US China 0:00:14.080 --> 0:00:17.959 relations in focus as a congressional delegation visits Taiwan. The 0:00:18.040 --> 0:00:21.720 Fed releases minutes of its July policy meeting, and Walmart 0:00:21.760 --> 0:00:25.040 Home Depot and Target lead a busy week for retailer earnings. 0:00:25.400 --> 0:00:28.560 New York Governor wholecol speaks from where author Salmon Rushdie 0:00:28.640 --> 0:00:32.160 was attacked. Plus New York State is cracking down on speeders, 0:00:32.280 --> 0:00:36.080 especially this week. I'm Michael Vaughan. More ahead, I'm John Stage. 0:00:36.360 --> 0:00:38.680 In sports, the Mets stay hot, they shut out the Phillies. 0:00:38.680 --> 0:00:41.919 The Yankees slump continue to shut out loss in Boston. 0:00:44.479 --> 0:00:48.080 That's All's training ahead on Bloomberg Daybreak on Bloomberg. He 0:00:48.159 --> 0:00:51.920 Live in Free on New York, Bloomberg one, Washington d C, 0:00:52.400 --> 0:00:55.960 Bloomberg one oh six one, Boston, Bloomberg nine sixties and 0:00:56.080 --> 0:00:59.920 Francisco Sirius XM one nine Team, and around the world 0:01:00.160 --> 0:01:03.640 on Bloomberg Radio dot Com and via the Bloomberg Business App. 0:01:07.280 --> 0:01:10.240 Good Morning, I'm John Tucker and I'm Karen Moscow and 0:01:10.400 --> 0:01:13.280 US stock index futures are lower this morning and we're 0:01:13.280 --> 0:01:15.240 coming up to six o one on Wall Street. And 0:01:15.319 --> 0:01:17.559 we checked the markets every fifteen minutes throughout the trading 0:01:17.640 --> 0:01:20.720 day on Bloomberg S and P futures down twenty points down, 0:01:20.720 --> 0:01:23.680 futures down a thirty nine and nowasday future is down 0:01:23.720 --> 0:01:26.959 fifty five. The decks in Germany is little change ten 0:01:27.000 --> 0:01:29.840 your treasury that'll change yield two point eight three percent, 0:01:29.920 --> 0:01:32.080 and they yield on the two year three point to 0:01:32.319 --> 0:01:35.520 five percent. John and Karen, we begin with a surprise 0:01:35.600 --> 0:01:39.120 out of Asia. China's Central Bank is unexpensedly cut it's 0:01:39.200 --> 0:01:42.480 key interest rate that as fresh data shows its economic 0:01:42.560 --> 0:01:46.800 slowdown getting worse. Bloomberg Daybreak Asia anchor Brian Curtis is 0:01:46.840 --> 0:01:49.720 more from Hong Kong, the PBOC cut it's one year 0:01:49.800 --> 0:01:52.800 rate by ten basis points to two point seven five percent. 0:01:53.240 --> 0:01:56.040 None of the twenty economy is pulled by Bloomberg expected 0:01:56.080 --> 0:01:59.320 to change. The move comes as China's economy weakened in 0:01:59.440 --> 0:02:03.120 July COVID outbreaks and the property crisis taking a toll 0:02:03.480 --> 0:02:06.280 factory output up three point eight percent from a year 0:02:06.320 --> 0:02:10.160 ago retail sales growing two point seven percent, while fixed 0:02:10.160 --> 0:02:13.480 asset investment grew five point seven percent in the first 0:02:13.520 --> 0:02:16.519 seven months of the year. All of those missing estimates 0:02:16.840 --> 0:02:19.600 and China's home prices dropped an eleventh month in a 0:02:19.720 --> 0:02:23.359 row in on Kong, Brian Curtis Bloomberg deybreak all right, Brian, 0:02:23.360 --> 0:02:26.280 thank you. All. Stocks in Asia meantime finished mixed after 0:02:26.360 --> 0:02:28.840 that surprise rate cut from the PBOC, and we get 0:02:28.840 --> 0:02:32.160 the recap from Bloomberg's Juliette Sally in Singapore, Good Morning, Juliet, 0:02:32.240 --> 0:02:34.240 Good morning John and Karen. Markets in Hong Kong and 0:02:34.320 --> 0:02:37.720 China's struggled for direction after the July activity data was released, 0:02:37.720 --> 0:02:40.960 While bonds rallied, the yield on China's tenure not dropping 0:02:40.960 --> 0:02:43.440 as much as seven basis points, one of its steepest 0:02:43.480 --> 0:02:46.119 drops since the onset of the pandemic. The off show 0:02:46.160 --> 0:02:49.799 yuan fell along with the Kiwi and Ozzie dollas Japanese has. 0:02:49.840 --> 0:02:52.440 The rallied then to to five, close to erasing its 0:02:52.480 --> 0:02:55.600 losses for the year. Markets in South Korea and India 0:02:55.720 --> 0:02:59.840 were closed. In Singapore, Juliette Sally Bloomberg deybreak Thanks Juliet 0:03:00.120 --> 0:03:02.639 relations between the U S and Shina and focused once 0:03:02.680 --> 0:03:06.680 again this morning. A US congratual delegation landed in Taiwan 0:03:06.800 --> 0:03:09.760 over the weekend, and Bloomberg's Any Morris has details from 0:03:09.760 --> 0:03:14.440 our newsroom in Washington. This delegation is led by Democratic 0:03:14.480 --> 0:03:17.839 Senator Ed Markey of Massachusetts and tests whether China will 0:03:17.880 --> 0:03:21.240 react more forcefully after how Speaker Nancy Pelosi went to 0:03:21.280 --> 0:03:24.320 Taiwan earlier this month. The delegation is set to meet 0:03:24.320 --> 0:03:27.800 with Taiwan's president and Minister of Foreign Affairs to discuss 0:03:27.840 --> 0:03:32.600 bilateral relations, security, trade, and investment. The delegation will reaffirm 0:03:32.680 --> 0:03:36.440 US support for Taiwan. Reuters sided China's embassy saying this 0:03:36.560 --> 0:03:39.840 latest visit shows the US quote does not want to 0:03:39.880 --> 0:03:43.120 cease stability in the region. In Washington, I'm Amy Morris, 0:03:43.160 --> 0:03:45.480 Bloomberg Daybreak, right, Amy, thank you all back here in 0:03:45.480 --> 0:03:48.160 the US as senior Democrats says he has not seen 0:03:48.240 --> 0:03:51.720 any evidence the materials the FBI seas from Donald Trump's 0:03:51.760 --> 0:03:56.360 home were properly declassified. The former president has seven documents 0:03:56.360 --> 0:03:59.240 Wrenny classified, and his supporters claim he has the power 0:03:59.280 --> 0:04:02.720 to classify documents on his own. Adam Shift, his chair 0:04:02.760 --> 0:04:05.600 of the House Intelligence Committee, the former president has no 0:04:05.680 --> 0:04:09.480 declassification authority, and the idea that, eighteen months after the fact, 0:04:09.520 --> 0:04:12.600 donalka Trump Trump could simply announce, well, I'm you know, 0:04:13.800 --> 0:04:17.080 retroactively declassifying or whatever I took home had the effect 0:04:17.120 --> 0:04:21.159 of declassifying them is absurd. Adam Shift made the comments 0:04:21.200 --> 0:04:24.559 on CDs is face the nation heard Sundays on Bloomberg Radio, 0:04:24.800 --> 0:04:27.000 and turning to the economy, Now, the focus this week 0:04:27.040 --> 0:04:30.040 comes Wednesday. That's when the Feller Reserve issues minutes of 0:04:30.080 --> 0:04:33.400 its July policy meeting. Let's get more from Bloomberg's Vinny 0:04:33.440 --> 0:04:35.960 tells you guys. The minutes could indicate whether FED chair 0:04:36.080 --> 0:04:38.520 Jerome pale One tended to send a dovish signal the 0:04:38.600 --> 0:04:42.400 July's post meeting news conference. Bloombrig Economics is betting he didn't, 0:04:42.440 --> 0:04:45.000 and its full speed ahead on what the interest rates, 0:04:45.200 --> 0:04:48.680 underpinned by royd sence among officials that the upside risk 0:04:48.720 --> 0:04:52.600 to inflation is material. Turning to this week's key economic data, 0:04:52.800 --> 0:04:56.360 US retail sales may show falling gasolene prices freed up 0:04:56.360 --> 0:04:59.679 cash for such things as Amazon Prime Day, while rising 0:04:59.680 --> 0:05:04.920 more traits put in housing starts Jude Bloomberg, Daybreak, Vinnie, 0:05:04.960 --> 0:05:07.240 thank you. We'll retail will also be in focus when 0:05:07.240 --> 0:05:09.240 it comes to earnings this week. Let me get the 0:05:09.279 --> 0:05:13.000 story from Bloomberg's Charley Pellett. Walmart and Target let a 0:05:13.040 --> 0:05:16.440 list of retailers issuing profit warnings last month. This week 0:05:16.480 --> 0:05:20.200 they report, along with Home Depot, Low's, Cole's, Macy's, and 0:05:20.320 --> 0:05:24.360 t j X. Laurie Calvacina's head of US equity strategy 0:05:24.360 --> 0:05:27.039 at RBC Capital Markets, we would tell you we're not 0:05:27.200 --> 0:05:29.920 entirely out of the woods from a market perspective in 0:05:30.000 --> 0:05:32.200 terms of earnings right now, just because if there really 0:05:32.240 --> 0:05:35.680 is a big macro slow downcoming economically, UM numbers do 0:05:35.800 --> 0:05:37.760 still need to come down. But I think for the moment, 0:05:37.839 --> 0:05:42.240 investors are You're just excited about the resilience that we're seeing. 0:05:42.360 --> 0:05:47.080 Also reporting this week, Agile and Technologies, Analog Devices, Applied Materials, 0:05:47.320 --> 0:05:51.800 Cisco Systems, and Deer in New York. Charlie Pellet, Bloomberg, 0:05:51.839 --> 0:05:55.359 day Break, Thanks Shortly, we had earnings overseas out this weekend. 0:05:55.480 --> 0:05:59.960 Saudi Aramco posted the biggest quarterly profit of any Let's 0:06:00.000 --> 0:06:03.080 at company anywhere, net income at the South of Oil 0:06:03.160 --> 0:06:06.479 Giant rose to forty eight point four billion dollars in 0:06:06.520 --> 0:06:09.599 the second quarter from twenty five and a half billion 0:06:09.640 --> 0:06:12.880 a year earlier. Well searching oil prices give a boost 0:06:12.880 --> 0:06:15.520 to energy companies. John both oil and gas have come 0:06:15.600 --> 0:06:18.840 down since there June Hies and US Energy Secretary Jennifer 0:06:18.839 --> 0:06:22.440 Grandholmes says they may fall even further. Bloomberry said Baxter 0:06:22.520 --> 0:06:25.920 has the details. The caveat, as always is the instability 0:06:25.920 --> 0:06:28.640 of the globe. But Grant Holmes has given the four dollars. 0:06:28.640 --> 0:06:31.360 Depending on the region we're seeing now, it should go 0:06:31.440 --> 0:06:34.479 down even further. We'll probably drop to about three dollars 0:06:34.480 --> 0:06:37.840 and seventy eight cents. So we hope that that's true, 0:06:37.880 --> 0:06:41.080 but again it can be impacted by what's happening globally. 0:06:41.279 --> 0:06:44.320 Grant Home on CNN says the President is monitoring very 0:06:44.320 --> 0:06:47.559 closely and we'll do everything within his power to help. 0:06:47.760 --> 0:06:50.279 In San Francisco, I'm at Baxter Bloomberg Gay Break, and 0:06:50.279 --> 0:06:53.159 I think said some news on finances out of Russia now. 0:06:53.520 --> 0:06:56.720 Major Wall Street banks, including JP Morgan Chason City Group 0:06:56.960 --> 0:07:00.880 are reportedly offering to facilitate trades in Russia. Incorporate debt 0:07:00.920 --> 0:07:03.960 and government bonds. Reuter's reports the move took place in 0:07:04.040 --> 0:07:06.839 recent days after guidelines for the U. S. Treasury that 0:07:06.880 --> 0:07:10.800 did allow US holders to wind down their positions ahead 0:07:10.800 --> 0:07:14.080 of the market open. On Wall Street, Dow futures two 0:07:14.080 --> 0:07:18.160 points lower and SMP futures down twenty two, Nasday futures 0:07:18.200 --> 0:07:24.240 down fifty eight points and at six. I settled on 0:07:24.280 --> 0:07:26.240 Wall Street time to bring in Michael Bard to find 0:07:26.280 --> 0:07:28.080 out what else is going on in New York and 0:07:28.640 --> 0:07:30.680 around the world. John, thank you very much, sir. And 0:07:30.720 --> 0:07:34.440 Iranian government official Toni today that Tayron was involved in 0:07:34.440 --> 0:07:38.120 the assault on author Salomon Rushty. The comments from arounds 0:07:38.160 --> 0:07:41.679 Foreign Ministry come after Friday's attack on Rushdi and Western 0:07:41.680 --> 0:07:44.360 New York. New York Governor Kathy Hoco spoke at the 0:07:44.360 --> 0:07:47.200 side of where Rushty survived last week's knife attack. New 0:07:47.280 --> 0:07:51.120 York State will always stand up to protect freedom of expression, 0:07:52.320 --> 0:07:58.520 freedom of speech, and we condemned the cowardly attack. Governor 0:07:58.560 --> 0:08:02.480 Hocole at the Chautaqua Institution promised freedom will always eclipse 0:08:02.480 --> 0:08:05.960 hatred and oppression rust. He suffered a damage liver and 0:08:06.160 --> 0:08:09.520 severed nerves and an arm and and I. However, he 0:08:09.680 --> 0:08:11.680 is off a ventilator and is said to be on 0:08:11.720 --> 0:08:15.120 the road to recovery his assailants, a twenty four year 0:08:15.160 --> 0:08:18.840 old man from New Jersey, according to prosecutors, has pleaded 0:08:18.920 --> 0:08:23.240 not guilty. More details have been disclosing yesterday shooting in 0:08:23.320 --> 0:08:27.480 Jerusalem's Old City. Authorities in Israel say a Palestinian gunman 0:08:27.520 --> 0:08:30.720 opened fire at a bus, wounding several passengers, among them 0:08:30.760 --> 0:08:34.400 a New York family visiting the country. Three were from Brooklyn, 0:08:34.520 --> 0:08:38.240 which Senate Majority Leader Chuck Schumer represents. During a briefing, 0:08:38.280 --> 0:08:41.160 Schumer's shared details, he learned about one of the victims. 0:08:41.679 --> 0:08:45.400 He was very brave. He bent down over his family 0:08:45.480 --> 0:08:49.439 to protect them. He was shot in the neck, but 0:08:49.840 --> 0:08:52.720 and they had him on a respirator, but it looks 0:08:52.760 --> 0:08:56.880 like he will. His condition is improving. Senator Schumer says 0:08:56.960 --> 0:08:59.920 this incident in Jerusalem follows a tense week between his 0:09:00.040 --> 0:09:04.200 real and the Palestinians. Don't speed in New York State, 0:09:04.320 --> 0:09:07.640 especially this week. The week long crackdown has started. Governor 0:09:07.720 --> 0:09:12.400 Hulkel says there are countless risks and tragic consequences to speeding, 0:09:12.640 --> 0:09:14.880 and I want all New Yorkers to be mindful of 0:09:14.920 --> 0:09:18.079 the speed limits in your area. During last year's crackdown, 0:09:18.160 --> 0:09:21.680 police gave out twenty three thousand speeding tickets. Russian President 0:09:21.760 --> 0:09:25.360 Vladimir Putin offered to expand relations with North Korea, reaching 0:09:25.360 --> 0:09:28.120 out to his neighbor as the Kremlin scours the globe 0:09:28.120 --> 0:09:31.960 for weapons for its war in Ukraine. Amy winning film 0:09:32.040 --> 0:09:35.079 and television actor and Haiti has died of injuries from 0:09:35.080 --> 0:09:38.480 a fiery car crash. The spokeswoman says Haiti was peacefully 0:09:38.520 --> 0:09:42.280 taken off life support and has was fifty three Global 0:09:42.320 --> 0:09:44.720 News twenty four hours a day on air and on 0:09:44.800 --> 0:09:48.520 Bloomberg Quick Take, powered by more than seven hundred journalist 0:09:48.559 --> 0:09:51.400 and analysts more than a hundred twenty countries. I'm Michael Barr. 0:09:51.440 --> 0:09:56.960 This is Bloomberg Jump Michael, thank you. Yes. Now six 0:09:57.040 --> 0:09:59.760 ten on Wall Street. That's time for the Bloomberg Sports Update. 0:10:00.000 --> 0:10:02.880 Here's John test Shower. Thanks John. Shutout win for the Mets, 0:10:02.920 --> 0:10:06.000 shutout loss for the Yankees. Mets have now won seventeen 0:10:06.040 --> 0:10:08.319 of their last twenty games. The Yanks have lost nine 0:10:08.360 --> 0:10:10.400 of eleven. In Fenway, they had just two hits, struck 0:10:10.440 --> 0:10:13.040 out eleven times, fell to the Red Sox. Three nothing. 0:10:13.080 --> 0:10:15.360 The Socks win a series within the division for the 0:10:15.360 --> 0:10:18.000 first time all year. Michael Waka, who had been out 0:10:18.000 --> 0:10:21.400 since June with the injured shoulder, was dominant. Jamison Tyone 0:10:21.440 --> 0:10:23.880 took the loss and ends a two and seven Yankee 0:10:23.960 --> 0:10:26.400 road trip. You're Aaron ud Baseball. You know you're gonna 0:10:26.400 --> 0:10:30.800 go like this. Um Every every team does. So it's 0:10:30.800 --> 0:10:34.080 just about us. You're staying consistent. You know, I don't 0:10:34.280 --> 0:10:36.280 sit on our woes here on our head. You know, 0:10:36.440 --> 0:10:38.480 I'm not happy about it, but that's still a lot 0:10:38.480 --> 0:10:39.559 of work to be done. It still a lot of 0:10:39.600 --> 0:10:41.600 Thingthony to improve on and keep working on. They come 0:10:41.640 --> 0:10:43.880 home for a nine game homestand three with Tampa Bay 0:10:43.920 --> 0:10:46.120 starting tonight, and then four with Toronto, and then two 0:10:46.120 --> 0:10:47.960 with the Mets, who now hit the road for the 0:10:48.000 --> 0:10:51.360 next ten games, four in Atlanta, four in Philadelphia. Mets 0:10:51.400 --> 0:10:53.520 just threw back to back shutouts with the Phillies, who 0:10:53.559 --> 0:10:56.240 scort only two runs in the three game series. Chris 0:10:56.320 --> 0:10:58.480 Bassett got his tent win four and inch from the bullpen. 0:10:58.559 --> 0:11:01.400 The Mets won six to nothing. They are seventy five 0:11:01.480 --> 0:11:03.280 and forty. It's the first time the Mets have been 0:11:03.280 --> 0:11:07.920 thirty five games over five hundred. Jets quarterback Zack Wilson 0:11:07.960 --> 0:11:10.720 headed l a for a knee procedure tomorrow that will 0:11:10.720 --> 0:11:13.080 determine just how long he'll be out. Suffered a bone 0:11:13.080 --> 0:11:16.439 bruise and torn meniscus in the preseason opener. Will's ALLATORUS 0:11:16.600 --> 0:11:18.920 nearly won the US Open, nearly one the pg H, 0:11:19.160 --> 0:11:21.559 but you have lost of the playoffs. In Memphis, finally 0:11:21.559 --> 0:11:23.920 got his first career victory. It came in a playoff, 0:11:24.200 --> 0:11:26.439 and in the start of the FedEx Cup playoffs. NBA 0:11:26.520 --> 0:11:30.200 announced it's Christmas Day schedule. The Knicks will host Philadelphia, 0:11:30.240 --> 0:11:32.839 but the Nets, perhaps because they might trade Kevin Durant, 0:11:32.920 --> 0:11:36.800 will not be featured on Christmas. John Stashower, Bluebird Sports, John, 0:11:36.960 --> 0:11:39.000 all right, thanks, so lunch had ahead of the cash 0:11:39.040 --> 0:11:41.600 open on Wall Street. Futures in the red to risk 0:11:41.679 --> 0:11:44.440 off so far this morning. The down futures down one 0:11:44.840 --> 0:11:47.040 fifty nine points. That's a decline of about half a 0:11:47.080 --> 0:11:50.640 percent right now, SMP even the futures twenty two points slower, 0:11:50.760 --> 0:11:53.280 that's down half a percent. The dance dank you many 0:11:53.320 --> 0:11:57.000 futures fifty three points slower, down four tenths of a percent. 0:11:57.640 --> 0:12:01.080 Looking at crude oil Mymex crude at eighties seven, nineties 0:12:01.120 --> 0:12:03.720 six and barrel that's down about four and a half percent. 0:12:03.840 --> 0:12:08.120 This is Bloomberg and just ahead, China Central Bank delivers 0:12:08.160 --> 0:12:11.400 a surprise rate cut. What does it all mean? We'll 0:12:11.400 --> 0:12:22.800 head to Beijing and speak with Bloomberg's James Meager. Markets 0:12:22.920 --> 0:12:26.000 headlines and breaking news twenty four hours a day at 0:12:26.040 --> 0:12:30.040 Bloomberg dot Com, the Bloomberg Business at and at Bloomberg Quicktape. 0:12:30.200 --> 0:12:39.160 This is a Bloomberg Business Flash and I'm Karen Moscow 0:12:39.160 --> 0:12:41.800 and US Knock Index. Futures are slipping this morning and 0:12:41.880 --> 0:12:45.240 commodities from oil to iron ore falling as disappointing data 0:12:45.280 --> 0:12:48.400 from China further clouds the outlook for the global economy. 0:12:48.640 --> 0:12:51.120 We checked the markets every fifteen minutes throughout the trading 0:12:51.200 --> 0:12:53.679 day on Bloomberg s and p Future is down twenty 0:12:53.679 --> 0:12:56.319 two points down, futures down a hundred sixty three and 0:12:56.400 --> 0:12:59.439 asdack Future is down fifty four. The decks in Germany 0:12:59.520 --> 0:13:02.520 little ship aanged ten, your treasury little change yeld two 0:13:02.520 --> 0:13:04.920 point three percent. They yield on the two year three 0:13:04.920 --> 0:13:08.319 point to five percent. Nimax. Screwed oil is down four 0:13:08.360 --> 0:13:11.080 point four percent, down four dollars one cent at eighty 0:13:11.120 --> 0:13:13.920 eight dollars eight cents of Barrel Comic School is down 0:13:13.960 --> 0:13:16.439 one point three percent, or twenty three dollars sixty cents 0:13:16.440 --> 0:13:19.880 at seventeen two Announce the euro one point one nine 0:13:19.960 --> 0:13:22.320 eight against the dollar British found one point to zero 0:13:22.440 --> 0:13:25.040 six six and the yen one thirty three point four seven. 0:13:25.320 --> 0:13:28.200 And look at a bitcoin down sixtensive percent at twenty 0:13:28.200 --> 0:13:31.839 four thousand, one eighty dollars. That's a Bloomberg business flash. 0:13:31.920 --> 0:13:34.200 Now here's Michael Barr with more on what's going on 0:13:34.280 --> 0:13:36.959 around the world. Michael Karen, thank you very much. China 0:13:37.000 --> 0:13:40.920 announced more military drills around Taiwan as the island's president 0:13:41.040 --> 0:13:44.400 met with members of a new US congressional delegation led 0:13:44.400 --> 0:13:49.040 by Senator Ed Market. China regards formal contacts between US 0:13:49.120 --> 0:13:53.079 politicians and the island's government as support for its independence 0:13:53.120 --> 0:13:56.800 from Beijing. Russian diplomat says they are in talks right 0:13:56.800 --> 0:14:00.079 now with the US about a possible prisoners swap for 0:14:00.280 --> 0:14:03.520 w NBA star Britney Grinder. Grinder was sentenced to a 0:14:03.559 --> 0:14:07.560 Russian prison for nine years on drug smuggling charges. In baseball, 0:14:07.600 --> 0:14:10.760 the Red Sox be the Yankees three nothing. The match 0:14:10.760 --> 0:14:14.720 shut out the Phillies six zip. The Nationals and Orioles lost. 0:14:15.080 --> 0:14:19.600 The A's lost to the Astros six three the Giants one. 0:14:20.080 --> 0:14:22.680 Global News twenty four hours a day on air and 0:14:22.880 --> 0:14:26.280 on Bloomberg Quicktake, powered by more than twenty seven hundred 0:14:26.320 --> 0:14:28.920 journalist and analysts more than a hundred twenty countries. I'm 0:14:28.960 --> 0:14:31.880 Michael Barr, and this is Bloomberg Jump. Michael, thank you 0:14:31.880 --> 0:14:34.080 for coming up on six twenty on Wall Street. We 0:14:34.120 --> 0:14:37.560 are live from the Bloomberg intrant to Broker Studios. This 0:14:37.720 --> 0:14:41.000 is Bloomberg Day. Prey. China Central Bank, as you've been hearing, 0:14:41.080 --> 0:14:44.280 is delivered a surprise rate cut. Could be an indication 0:14:44.320 --> 0:14:46.760 of just how band the economic picture has gotten in 0:14:46.800 --> 0:14:50.520 the world's second largest economy. Joining us this morning with 0:14:50.560 --> 0:14:54.080 more in Bloomberg's James Maker, Economics Senator for Asia, joining 0:14:54.120 --> 0:14:57.600 us from Beijing this morning or this evening. James, Thanks 0:14:57.600 --> 0:14:59.680 for me with us. Wh appreciate it. What is the 0:14:59.760 --> 0:15:04.240 date of talents about China's economy the day of this morning? 0:15:04.280 --> 0:15:07.280 You know it was surprisingly bad. You saw not just 0:15:07.400 --> 0:15:10.240 a poor retail sales, which I think was expected. You know, 0:15:10.600 --> 0:15:13.239 the COVID lockdowns that have you know that have continued 0:15:13.680 --> 0:15:18.000 have really damaged China's retail market and consumption and tourism, 0:15:18.080 --> 0:15:20.760 the services sector. But you also saw really bad numbers 0:15:20.760 --> 0:15:23.240 for the industrial industrial outport. You know, we saw steel 0:15:23.240 --> 0:15:27.240 production was the lowest since miden Cement, production was down, 0:15:27.320 --> 0:15:30.400 glass production was down. You know, computers and phone production 0:15:30.480 --> 0:15:34.360 was also down. So, you know, so surprisingly bad across 0:15:34.400 --> 0:15:36.760 the board. And I think you saw you you saw 0:15:36.760 --> 0:15:39.000 a reaction to that just before the numbers came out. 0:15:39.000 --> 0:15:41.200 When then, as you said, the PBOC came out with 0:15:41.280 --> 0:15:43.840 a not with a rate cut, which was which was 0:15:43.920 --> 0:15:46.280 very there was expected by none of the economists that 0:15:46.320 --> 0:15:49.400 we surveyed, and sort of goes against their policy, which is, 0:15:49.760 --> 0:15:51.640 you know, since January of this year, they've been saying 0:15:51.640 --> 0:15:54.640 that there there was enough stimulus and there isn't any 0:15:54.640 --> 0:15:56.960 need for more action from the Central Bank. How did 0:15:57.000 --> 0:16:00.800 trying to get to this point? The two things I 0:16:00.800 --> 0:16:02.800 think that are driving this one is obviously the covered 0:16:02.840 --> 0:16:05.160 zero policy. Then you know the huge lockdowns we saw 0:16:05.240 --> 0:16:08.520 in April and May in uh in Shanghai and Jina 0:16:08.560 --> 0:16:11.200 and and other places in really in other places and 0:16:11.280 --> 0:16:14.520 trying to really damage the economy. We you know, in 0:16:14.560 --> 0:16:17.240 a normal country where you know government statistics, where you 0:16:17.280 --> 0:16:19.680 know not what they are here, I think in the 0:16:19.680 --> 0:16:22.200 company would have gone into a session. But even without that, 0:16:22.280 --> 0:16:25.640 I mean, it was clear that economic activity really slowed. 0:16:25.800 --> 0:16:27.960 The second thing that's really caused this is a massive 0:16:27.960 --> 0:16:30.480 flow down. Housing market prices have been falling now for 0:16:30.520 --> 0:16:33.640 eleven months. Property sales home sales have been falling for 0:16:33.680 --> 0:16:36.920 a basically a year now. Large numbers of property developers 0:16:36.920 --> 0:16:40.720 have declared bankruptcy or in trouble, stopped they've stopped producing 0:16:40.720 --> 0:16:42.920 the houses, they've stopped building the houses, and now more 0:16:42.960 --> 0:16:45.200 and more people are stopping paying their mortgages on the 0:16:45.240 --> 0:16:47.680 houses they haven't been delivered. So, you know, those two 0:16:47.680 --> 0:16:51.400 things combined, the covered zero thing is is shutting down 0:16:51.400 --> 0:16:54.160 industrial production in some places when when they have a lockdown, 0:16:54.320 --> 0:16:57.160 it's also hitting the consumer side of the economy. And 0:16:57.200 --> 0:16:59.240 then you know, housing is such a big portion of 0:16:59.320 --> 0:17:02.560 China's economy and that's in this you know continuing slump, 0:17:02.560 --> 0:17:04.760 and those two things combined it really sort of you know, 0:17:05.320 --> 0:17:07.520 you saw that the results of that are clear in 0:17:07.560 --> 0:17:09.960 the data that came out today. There's a rate cut enough. 0:17:11.840 --> 0:17:15.399 We saw in July we saw the lowest borrowing levels 0:17:15.400 --> 0:17:18.520 of borrowing by households and companies in at least five 0:17:18.640 --> 0:17:22.920 years UH and by yet, the the inter bank rates 0:17:23.000 --> 0:17:25.600 are very very low right now, which indicates that banks 0:17:25.640 --> 0:17:27.280 have a lot of money. It's so it's not the 0:17:27.280 --> 0:17:29.040 fact that they can't lend money, it's the fact that 0:17:29.040 --> 0:17:32.600 noyone wants to borrow money. So whether a tempasis point 0:17:33.160 --> 0:17:35.840 rate cut isn't really going to change that dynamic. The 0:17:35.840 --> 0:17:37.720 problem is not the banks don't have enough money, or 0:17:37.720 --> 0:17:39.879 that the cost of money is too high. The problem 0:17:39.920 --> 0:17:41.960 is that that there's not enough demand for cash. There's 0:17:42.080 --> 0:17:44.320 enough demand from companies to borrow money because they're not 0:17:44.359 --> 0:17:46.440 confident about investing in the future, so they're not taking 0:17:46.440 --> 0:17:48.600 on more debt. And households don't want to borrow money 0:17:48.600 --> 0:17:50.760 because they don't want to buy a house because prices 0:17:50.800 --> 0:17:52.920 of houses are falling right now, and obviously you're not 0:17:52.960 --> 0:17:55.320 going to buy an asset where the price is going 0:17:55.359 --> 0:17:57.840 to continue to fall. So I don't think a rate 0:17:57.880 --> 0:17:59.600 cut is going to be enough to turn this around. 0:17:59.600 --> 0:18:02.040 I mean, the problem is not a problem, as I said, 0:18:02.040 --> 0:18:05.040 it's not it's not supply, it's demand. They really have 0:18:05.119 --> 0:18:07.720 to change the dynamic, especially what's happening in the housing market. 0:18:08.359 --> 0:18:11.120 But also you know, an expectation that if they did 0:18:11.200 --> 0:18:13.760 change the COVID zero policies and stop locking people down, 0:18:14.080 --> 0:18:16.080 maybe that would in the long term lead to more 0:18:16.600 --> 0:18:20.080 stable consumption. Is suing Ping on the ropes right now. 0:18:21.160 --> 0:18:22.840 I don't think that's on the cards. I mean c 0:18:23.040 --> 0:18:25.840 Jumping is looking in the next couple of months, maybe 0:18:25.880 --> 0:18:28.560 in September October, you're going to have the party congress, 0:18:28.600 --> 0:18:30.879 which was you know, there's no way, there's no reason 0:18:30.920 --> 0:18:32.399 to think that he's not going to be confirmed as 0:18:32.480 --> 0:18:36.720 China's leader for a third term. So whether that what 0:18:36.800 --> 0:18:38.679 may happen. What may be happening right now within the 0:18:38.720 --> 0:18:41.280 party is people that sh Jmping is supporting for a 0:18:41.320 --> 0:18:44.359 lower level officials maybe won't be getting as much support 0:18:44.440 --> 0:18:46.760 from the Communist Party and other people who might have 0:18:46.800 --> 0:18:49.720 different ideas about their carey policy may get more support. 0:18:49.960 --> 0:18:52.720 But it's it's completely opaque what's going on. But I 0:18:52.720 --> 0:18:55.359 mean s Jimping is going to be confirmed as China's leader, 0:18:55.720 --> 0:18:58.119 you know, in whenever the party meeting happens. In the 0:18:58.280 --> 0:19:01.720 in the next couple of months. The economic problems that 0:19:01.840 --> 0:19:05.000 China is having the probably make his position more difficult. 0:19:05.600 --> 0:19:08.399 What's the in thirty seconds, what's the next thing we 0:19:08.400 --> 0:19:12.000 should be looking for? I think you're gontas continue to 0:19:12.040 --> 0:19:14.199 see week input to math from China. If you're an X, 0:19:14.280 --> 0:19:16.840 if you're a commodity exploiting country, you shouldn't be looking 0:19:16.840 --> 0:19:19.119 at China to be to be boosting your exports in 0:19:19.160 --> 0:19:21.159 the next six months. If you are a company that 0:19:21.240 --> 0:19:23.640 selling products in China, you shouldn't be looking at China 0:19:23.680 --> 0:19:25.600 to be boosting your sales in the next six months. 0:19:25.800 --> 0:19:30.000 All right, James Pleasure. We appreciated Bloombergs James Meager, Economics 0:19:30.000 --> 0:19:33.240 senator for Asia from Beijing this morning after the surprise 0:19:33.320 --> 0:19:36.959 rate cup from the PBOC, and that is having an 0:19:36.960 --> 0:19:40.760 effect on markets worldwide. It's risk off in the US, 0:19:40.920 --> 0:19:42.679 at least for now ahead of they can show up 0:19:42.760 --> 0:19:45.720 on Wall Street. The Dow futures on eighty one point slower. 0:19:46.160 --> 0:19:49.240 The SMB futures are twenty four points slower than asset 0:19:49.320 --> 0:19:52.960 futures right now, down sixty points. We are seeing in 0:19:53.000 --> 0:19:57.440 the commodity space, Nimax crew down to eighties seven eight 0:19:57.600 --> 0:20:00.840 three barrel. That's down over four and a half percent. 0:20:01.280 --> 0:20:07.680 You're listening to Bloomberg day Break and the Bloomberg Weather 0:20:07.760 --> 0:20:11.200 from meteorologist Rob Caroline. This morning, partly sunny day on tap, 0:20:11.240 --> 0:20:15.720 the high temperature in the mid eighties, cloudy tonight seventy. 0:20:15.880 --> 0:20:18.879 Tomorrow's out look partly to mostly sunny, the height to 0:20:19.080 --> 0:20:25.960 eighty five. Broadcasting live from the Bloomberg Interactive Broker Studio 0:20:26.080 --> 0:20:29.240 in New York, Bloomberg Living Freed to Washington, d C. 0:20:29.440 --> 0:20:34.159 Bloomberg to Boston, Bloomberg one six one to San Francisco, 0:20:34.200 --> 0:20:37.680 Bloomberg nine sixty to the Country, Sirius XM Cho one 0:20:37.760 --> 0:20:40.840 nine and around the globe, the Bloomberg Business app and 0:20:40.920 --> 0:20:52.040 Bloomberg Radio dot Com. This is Bloomberg Daybreak. It's six 0:20:52.080 --> 0:20:54.639 thirty on wool Street. Good morning. I'm John Tucker and 0:20:54.680 --> 0:20:57.439 I'm Karen Moscow and we are just about three hours 0:20:57.480 --> 0:20:59.639 away from the open of US training. It's time to 0:20:59.680 --> 0:21:01.800 the five things you need to notice start your day. 0:21:01.840 --> 0:21:05.920 Brought to you by Interactive Brokers. Interactive Brokers Global Analysts 0:21:05.920 --> 0:21:08.960 helps you find a global investment opportunities to diversify your 0:21:09.000 --> 0:21:13.040 portfolio and discover undervalued companies, I mean a greater growth potential. 0:21:13.240 --> 0:21:16.080 Try ibk our Global analysts today at ib k R 0:21:16.200 --> 0:21:20.160 dot com slash g A. At first, a surprise in Asia, 0:21:20.320 --> 0:21:23.560 China's Central Bank unexpectedly cut its key interest rate ten 0:21:23.800 --> 0:21:27.720 basis points after data show July retail sales, investment, and 0:21:27.800 --> 0:21:31.520 industrial output missed estimates. Bloom Bars and The Current says 0:21:31.560 --> 0:21:34.560 it all signals trouble for the Chinese economy. All of 0:21:34.600 --> 0:21:37.640 his thought it was weak. But the reasons especially concerning 0:21:37.760 --> 0:21:39.520 is because July was meant to be the good month. 0:21:39.640 --> 0:21:41.520 July was meant to be, to think, the month when 0:21:41.560 --> 0:21:44.160 things pick up a bit of momentum again. The third 0:21:44.240 --> 0:21:46.080