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Speaker 1: From the Bloomberg Interactive Brokers Studios. This is Bloomberg Day

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Speaker 1: Bright for Tuesday, February four. Team Coming up today, Wall

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Speaker 1: Street races for the latest reading on inflation. President Joe

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Speaker 1: Biden is set to Dame of Fed Vice chair lyon

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Speaker 1: brainerd as his top economic adviser. The U S And

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Speaker 1: China consider meeting in the coming days over the balloon incidents,

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Speaker 1: and the White House plans to sell more crude from

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Speaker 1: the Strategic Petroleum Reserve. Shooting on the Michigan State University

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Speaker 1: campus has left three dead, plus the NYPD arrest of

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Speaker 1: the suspected driver in yesterday's deadly you hauled truck attempt

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Speaker 1: Michael Barr. More ahead, I'm John Stadtower and sorts Jail

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Speaker 1: and Brunson's forty points led the next to their first

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Speaker 1: win over the Nets in more than three years. That's

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Speaker 1: all straight ahead on Bloomberg day Break, the Business news

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Speaker 1: you need to sturn your day, and just one fifteen

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Speaker 1: minute podcast each pointing on Apple, Spotify, The Bloomberg Business

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Speaker 1: Appen everywhere you get your podcasts. Good morning, I'm Nathan

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Speaker 1: Hagar and I'm kerin Moscow. Here are the stories we're

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Speaker 1: following Today, we begin with the key inflation report that

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Speaker 1: markets have been waiting for. January's Consumer Price Index is

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Speaker 1: due out at eight thirty am Wall Street Time. We

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Speaker 1: get a preview from Bloomberg's Michael McKee, starting with the

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Speaker 1: good news headline, Inflation is forecast to have fallen again

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Speaker 1: in January, but that's because of base effects, the fact

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Speaker 1: that it was higher last year at this time. The

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Speaker 1: bad news is on a month to month basis, January

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Speaker 1: price is likely rose at a faster pace. Some things

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Speaker 1: like gasoline and used cars rose in price, but the

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Speaker 1: government is also rejiggering its seasonal adjustments of the weight

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Speaker 1: it puts on various sectors that will give the CPI

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Speaker 1: a statistical boost. Bottom Line, markets and the Fed will

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Speaker 1: likely look through the report anticipating some reversion this month.

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Speaker 1: The Fed doesn't meet again until March. Michael McKee, Bloomberg

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Speaker 1: Daybreak Right, Mike, Thanks well. We turned to the White

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Speaker 1: House now, and it looks like President Biden is to

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Speaker 1: pick a new top economic advisor. We get the latest

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Speaker 1: live with Bloomberg Steve Rappaport, Steve, good morning, Good morning, Karen,

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Speaker 1: and Nathan. President Biden is tapping federal Reserve Vice chair

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Speaker 1: Lyle Brainerd for the job, with an announcement coming as

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Speaker 1: soon as today, according to people with familiar with the matter.

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Speaker 1: As Director of the National Economic Council, Brainerd will have

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Speaker 1: a prominent role as the administration shifts focus to the

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Speaker 1: implementation of laws such as the Inflation Reduction Act. Her

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Speaker 1: appointment to succeed ANYC director Brian Ds creates an opening

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Speaker 1: on the Federal Reserves Board of Governors as the Central

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Speaker 1: Bank continue continues its campaign of pursuing aggressive interest rate hikes.

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Speaker 1: Live in New York, I'm Steve Rappaport, Bloomberg Daybreak. Okay, Steve, Thanks.

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Speaker 1: Turning to Europe, we're seeing wages in the UK rise

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Speaker 1: more than expected. Let's go live to London and get

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Speaker 1: the very latest with Bloomberg's You and Potts. Good morning,

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Speaker 1: Good morning, Nathan and Karen. Average earnings in the UK

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Speaker 1: executive bonuses rose six point seven percent in the three

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Speaker 1: months to December from the previous year, ignoring the pandemic.

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Speaker 1: That's the fastest place since records began in two thousands.

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Speaker 1: One the reading another sign of Britain's tight labor market

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Speaker 1: will provide I'm edition to bankiving the policymakers too high

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Speaker 1: rates again next month. The latest inflation data comes tomorrow

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Speaker 1: in London. I'm your port spoon boo, day break you

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Speaker 1: and thank you and Asia. Today, the yen is rising

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Speaker 1: as Kazooheta is officially nominated to helm the Bank of Japan.

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Speaker 1: Analysts say the move will likely pay the way for

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Speaker 1: a gradual pairing back of the central bank stimulus program

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Speaker 1: and checking. The yen now is at one thirty two

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Speaker 1: point oh nine against the dollar. Now, let's get to

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Speaker 1: the latest developments on the China balloon incident. Washington and

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Speaker 1: Beijing are wang whether to hold a diplomatic meeting on

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Speaker 1: the suspected spying device in the coming days. Amy Morris

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Speaker 1: has details from our Bloomberg newsroom in Washington. Sources tell

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Speaker 1: Bloomberg News that Secretary of State Anthony Lincoln is considering

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Speaker 1: a meeting with wangy, China's top diplomat, at a security

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Speaker 1: conference later this week. This would be their first face

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Speaker 1: to face talks since the balloon uproar that led to

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Speaker 1: a new spike intentions. Senior officials say they have nothing

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Speaker 1: official to anounces b Lincoln had called off his trip

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Speaker 1: to Beijing last week. After the US identified the alleged

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Speaker 1: Chinese spy balloon hovering over US airspace. The U says

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Speaker 1: that balloon, which was shot down off the coast of

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Speaker 1: South Carolina, was part of a global surveillance system. Since then,

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Speaker 1: three more objects have been shot down. In Washington, I

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Speaker 1: maybe Morris Bloomberg Daybreak, Amy, thank You. The U s

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Speaker 1: military says it's recovered significant debrief from that suspected spy balloon,

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Speaker 1: but there's still a lot we don't know about the

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Speaker 1: other objects taken down over the US and Canada. That's

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Speaker 1: according to Republican Congressman Dusty Johnson of South Dakota, who

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Speaker 1: sits on the House China Select Committee. He wants to

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Speaker 1: know more about China's motivations. Are they trying to probe

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Speaker 1: our defenses? And is this the kind of traffic that's

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Speaker 1: always been there and we're just doing a better job

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Speaker 1: of catching it now, or is this a new and

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Speaker 1: perhaps more nefarious stage in the relationship between US and

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Speaker 1: and whoever is sending them in. Republican Congressman Dusty Johnson

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Speaker 1: spoke at our Washington correspondent Joe Matthew on Bloomberg Sound

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Speaker 1: on Catch the Show. We days at five pm Eastern

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Speaker 1: on Bloomberg Radio, or listen anytime on demand wherever you

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Speaker 1: get your podcast. Let's take a look at the oil

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Speaker 1: market this morning. Karen Crude is trading lower on news

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Speaker 1: at the White House plans to sell more oil from

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Speaker 1: the Strategic Petroleum Reserve. We get the story from Bloomberg's

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Speaker 1: Charlie Pellett. Delivery is ar estimated to happen between April

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Speaker 1: and June's sources say the non emergency sale will amount

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Speaker 1: to twenty six million barrels of crude, and as part

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Speaker 1: of the congressionally mandated sale the lawmakers approved years ago.

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Speaker 1: For the current fiscal year, the Energy Department has sought

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Speaker 1: to stop some of the sales required by twenty fifteen

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Speaker 1: legislation so it can refill the emergency reserve, which currently

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Speaker 1: has about three hundred seventy one million barrels. After this

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Speaker 1: latest release, the reserve will dip to about three hundred

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Speaker 1: forty five million barrels in New York. Charlie Pellett, Bloomberg Daybreak. Okay, Charlie,

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Speaker 1: thanks checking all prices right now. Nimex crudes down one

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Speaker 1: point three per cent, or a dollar six at seventy

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Speaker 1: barrel Brent is down nine tenths percent at eighty five

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Speaker 1: dollars eighty cents. Well. In corporate news this morning, Navan,

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Speaker 1: we have more job cuts coming at four The automakers

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Speaker 1: said it will eliminate about thirty eight hundred positions across Europe.

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Speaker 1: The company's also trimming jobs. In the US, CEO Jim

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Speaker 1: Farley targets three billion dollars in savings to help finance

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Speaker 1: a shift to electric vehicles. And in India, billionaire Katama

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Speaker 1: Donnie's flagship firm reported a profit in the latest quarter

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Speaker 1: on the back of improved revenues, even as the company

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Speaker 1: grapples with the fallout from a short seller report, which

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Speaker 1: has triggered to sell off that's swiped out a hundred

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Speaker 1: twenty seven billion dollars in a Donnie's market value. This

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Speaker 1: is Bloomberg. It's forty three degrees in New York. We're

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Speaker 1: going to get into the fifties today, a high near

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Speaker 1: fifty under mostly sunny, breezy sky. Clouds roll in tonight.

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Speaker 1: We'll get down to the low forties. Time now to

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Speaker 1: take a look at some of the other stories making

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Speaker 1: news in New York and around the World with Bloomberg's

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Speaker 1: Michael bar Good morning, Michael, Good morning Nathan. Three people

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Speaker 1: are dead and five others are wounded after a mass

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Speaker 1: shooting on the campus of Michigan State University be An

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Speaker 1: East Lansing late last night. Ms U Department of Public

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Speaker 1: Safety into ram. Deputy Chief Chris Rosamond says the suspect

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Speaker 1: died of a self inflicted gunshot wound. Our hearts are

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Speaker 1: with those who have been affected by this senseless act

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Speaker 1: of violence. Giving an update like this is never easy.

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Speaker 1: As a father, I can only imagine how parents are

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Speaker 1: feeling right now. Deputy Chief rosman says. The forty three

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Speaker 1: year old suspect has not yet been identified and was

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Speaker 1: not a student or employee of the university. New York

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Speaker 1: City police are trying to learn more about the sixty

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Speaker 1: two year old man who authorities say drove a U

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Speaker 1: haul truck, swerved onto sidewalks, and plowed into people in

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Speaker 1: a Brooklyn Bay Ridge neighborhood yesterday. One person was killed

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Speaker 1: and eight others were injured. Police eventually arrested the driver

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Speaker 1: after a chase. His son identified him as Wings Sorp,

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Speaker 1: a troubled man with a history of harmful behavior and

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Speaker 1: stints behind barns in my d Commissioner keeaching Seoul. At

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Speaker 1: this time, we have no indication that there is any

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Speaker 1: terrorism involvement in this incident. So Or was living in

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Speaker 1: Las Vegas, where he was convicted of stabbing his own

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Speaker 1: brother in Yesterday's attack. Comes as a prosecutor told New

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Speaker 1: York jurors that the man convicted of killing eight people

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Speaker 1: when he drove a van onto a busy Manhattan bike

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Speaker 1: path in seventeen should be executed. It would be the

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Speaker 1: state's first in six decades for the federal crime. The

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Speaker 1: same jury that convicted Cipulo Sipop will hear testimony from

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Speaker 1: the relatives of victims throughout the week. Around thirty six

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Speaker 1: thousand people are confirmed dead in the earthquake that devastated

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Speaker 1: Turkey and Syria, and aid workers fear the final death

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Speaker 1: soul could double that any rescue teams have abandoned the

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Speaker 1: search for survivors. However, humanitarian aid continues. New York City's

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Speaker 1: third legal cannabis dispensary open yesterday near Union Square. The

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Speaker 1: Union Square Travel Agency is an effort involving the nonprofit

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Speaker 1: Dove Fund. More than fifty percent of the profits will

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Speaker 1: go to the Doe Fund, which provides housing and jobs

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Speaker 1: to formally incarcerated or homeless people Global Needs twenty four

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Speaker 1: hours a day, powered by more than twenty seven hundred

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Speaker 1: journalists and analysts and over a hundred twenty countries. I'm

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Speaker 1: Michael bar This is Bloomberg NA. Thank you, Michael our

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Speaker 1: Bloomberg Sports Update Now it's brought to you if I

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Speaker 1: try stayed out. Good morning, John Stash, Morning Nathan. But

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Speaker 1: a long time since the Knicks beat the Nets. Got

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Speaker 1: to go back to January of pre COVID was after

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Speaker 1: the day Kobe Bryant passed away. Since then, nine straight

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Speaker 1: wins by Brooklyn, all but two were in single digits

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Speaker 1: at the Guard and Knicks finally beat the Nets one

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Speaker 1: oh six. Jalen Brunson again led the way forty points.

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Speaker 1: He shot fifteen of twenty one made six of nine

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Speaker 1: three pointers. Is Former Villanova teammate Josh Hart has already

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Speaker 1: making an impact with his new team. Second game as

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Speaker 1: a Nick, Hart off the inch for twenty seven point

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Speaker 1: Spencer Dinwood. He led Brooklyn with twenty eight. Both the

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Speaker 1: Knicks and Nets play tomorrow. It's the final games for

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Speaker 1: them before the all Star Break kind of amazing that

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Speaker 1: Brunson is as of now not slated to play in

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Speaker 1: the All Star Game, but Boston's Jalen Brown is currently

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Speaker 1: injured may need a replacement as pictures and catchers get

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Speaker 1: ready to report and spring training the Mets tomorrow the Yankees.

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Speaker 1: On Thursday, MLB announced the ghost runner staying put. The

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Speaker 1: role was put in back in twenty The COVID season

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Speaker 1: has remained will now be permanent, although only in the

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Speaker 1: regular season extra innings starting with a runner as second base.

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Speaker 1: Andy Reid just won a second Super Bowl, was asked

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Speaker 1: about retirement. Look in the mirror and I'm old. Um My,

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Speaker 1: my heart though was young. I mean, I still enjoy

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Speaker 1: doing what I'm doing. I got askt fifty times here

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Speaker 1: and finally I just go whatever, man, you know whatever,

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Speaker 1: And that's a that's a good friends is a good friend.

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Speaker 1: So I mean, he's probably telling me to get my

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Speaker 1: tale out. I'm too old, but I'm good with what

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Speaker 1: I'm doing right now. Blazer had reported on Fox that

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Speaker 1: Read would retire. Super Bowl ratings app the audience averaged

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Speaker 1: a hundred and thirteen million third most watch. John Stashower

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Speaker 1: Bloomberg Sports Live from coast to coast, from New York

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Speaker 1: to San Francisco, Boston to Washington, d C. Nationwide on Sirius, xamp,

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Speaker 1: the Bloomberg Business app, and Bloomberg dot Com. This is

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Speaker 1: Bloomberg Daybreak. Good morning. I'm Nathan Hagar on a morning

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Speaker 1: where investors maybe holding their breath just a bit while

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Speaker 1: we wait for the latest reading on inflation. The Consumer

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Speaker 1: Price Index for the month of January is due out

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Speaker 1: at eight thirty Wall Street time, just a little more

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Speaker 1: than three hours from now. Ahead of it, we're joined

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Speaker 1: right now by Michael Houston, the chief market analyst at

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Speaker 1: CMC Markets. Michael, it's always great to speak with you.

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Speaker 1: The consensus when you check the Eco go function on

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Speaker 1: the Bloomberg terminal, is calling for another drop in year

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Speaker 1: over year inflation, but pretty significant jump when you look

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Speaker 1: at the month to month number. What kind of market

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Speaker 1: reaction could we see if we hit that consensus this morning?

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Speaker 1: I think I think the consensus, Nathan, is pretty much

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Speaker 1: priced in. I think what's not priced in is the

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Speaker 1: mismatch that we've seen between bond markets, the dollar, and

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Speaker 1: stock markets since that payrolls report hit the tape. Cast

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Speaker 1: your mind back to the third of February, which is

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Speaker 1: obviously when we got that bumper payrolls number. UM two

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Speaker 1: year yields have gone from four point zero three percent

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Speaker 1: to four point five. The dollar's gone up. So it's

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Speaker 1: the NEZTAC and the SMP five, So you know, there

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Speaker 1: is a little bit of there's a little bit of

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Speaker 1: a divergence there. They both. They can't all be right.

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Speaker 1: Try and get my words out. They can't all be right.

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Speaker 1: So either the stock market is right and we're heading

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Speaker 1: for the soft landing, or the bond market is right

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Speaker 1: and the Fed is going to continue to hike by

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Speaker 1: much more than the stock markets are pricing in. I'm

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Speaker 1: of the opinion that the warm weather or the warmer

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Speaker 1: weather that we saw in January is likely to see

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Speaker 1: much more resilient and inflation data, much more resilient jobs data,

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Speaker 1: and later this week potentially much at more resilient retail

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Speaker 1: sales numbers. And that's slightly to mean that the federal

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Speaker 1: reserve is likely to hike by at least another fifty

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Speaker 1: basis points between now and the summer, and the market

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Speaker 1: is not pricing that interesting because we have heard from

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Speaker 1: a number of analysts that we could see at least

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Speaker 1: two hikes from this Federal reserve before things start to

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Speaker 1: pull back, either at the end of this year early next.

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Speaker 1: What has you thinking that that the market hasn't fully

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Speaker 1: gotten that message just yet, just just the behavior I

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Speaker 1: think of the SMP and the nastac um. You're looking

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Speaker 1: at a US two year old and four and up

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Speaker 1: between four and a half and four and three quarters percent,

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Speaker 1: and certainly I think there's potential for yields to go

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Speaker 1: up quite a bit. The FED funds rate it's already

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Speaker 1: pretty much where the two year yield rate is. So

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Speaker 1: if you're working on the basis of a terminal rate

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Speaker 1: of around about five point to five, and certainly an

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Speaker 1: awful lot of the narrative from a number of FED

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Speaker 1: speakers suggests that's the case, then why would you buy um? Uh?

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Speaker 1: You know, US US equities? They are already very fairly

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Speaker 1: highly valued, and the earnings numbers, profits growth isn't particularly

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Speaker 1: great relative to their valuations, So why are we heading

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Speaker 1: higher when it comes to US markets? It doesn't compute.

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Speaker 1: There's an awful lot going on at the moment in

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Speaker 1: these markets that suggest to me that there's a slight

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Speaker 1: disconnect and what stock investors are looking at and what

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Speaker 1: the bond markets are looking at. What's the possibility Michael,

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Speaker 1: that we could see a harder than expected inflation reading

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Speaker 1: And if we do, what could that mean from markets?

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Speaker 1: I think it's quite high. You're probably going to enend

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Speaker 1: up with a little bit of egg on my face.

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Speaker 1: But I think that certainly core prices and I think

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Speaker 1: it's core prices we need to be focused on yet, Nathan.

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Speaker 1: Core prices could come in maybe potentially between five point

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Speaker 1: six and five point seven. I don't think we're going

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Speaker 1: to get seen much significant softness there. Headline numbers completely

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Speaker 1: different story. But we're not looking at headline numbers anymore.

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Speaker 1: So we're looking potentially not point five, not point six

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Speaker 1: excluding food and energy, potentially an upward revision to December

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Speaker 1: and five point six five point seven on the annual basis,

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Speaker 1: And I think that could potentially send us higher and

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Speaker 1: knock the NASTAC and near some feedback down again. And

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Speaker 1: if we were to get that scenario, would that be

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Speaker 1: a blip? Do you think in what we're seeing in inflation?

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Speaker 1: What's the trajectory that we're looking at for inflation right now?

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Speaker 1: The trajectory is still for a slowdown in the pace

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Speaker 1: of inflation, but it's really about um the pace of

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Speaker 1: that trajectory. I don't think anyone disputes that inflation is

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Speaker 1: coming down. It's just that I think markets would like

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Speaker 1: to think that it will go it will come down

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Speaker 1: as quickly as it went up, and I'm of the

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Speaker 1: opinion that that is unlikely to happen. You've only got

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Speaker 1: to look at what wage growth has been doing, only

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Speaker 1: not only in the U S but here in the UK.

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Speaker 1: I mean, average wage growth in the private sector here

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Speaker 1: in the UK is at seven point five percent. Oh yeah,

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Speaker 1: cp I is over ten. But that is going to

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Speaker 1: filter through going forward, and certainly I think as we

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Speaker 1: head into the summer, wage growth is going to remain

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Speaker 1: sticky and that is going to keep the FED, I

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Speaker 1: would suggest, quite hawkish over the course of the next

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Speaker 1: three to six mons. This is Bloomberg Daybreak Today, your

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Speaker 1: Nathan Hager and I'm Karen Moscow. Join us again tomorrow

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