WEBVTT - Bloombrg Daybreak: January 10, 2022 - Hour 1 (Radio) 0:00:02.960 --> 0:00:06.800 Live from the Bloomberg Interactive Burgers Studios is Bloomberg Daybreak 0:00:06.800 --> 0:00:11.080 for Monday, January ten two. Coming up this hour, Golden 0:00:11.119 --> 0:00:14.920 Opposite forecast for tightening for the five make forecast while 0:00:15.000 --> 0:00:18.000 grated the Omicron variant as millions of workers call out, 0:00:18.040 --> 0:00:22.079 six White House makes plans to impose export restrictions on Russia, 0:00:22.200 --> 0:00:25.240 and earnings get underway this week with results from Big Banks. 0:00:25.480 --> 0:00:27.640 The deadly blaze is being described as one of the 0:00:27.640 --> 0:00:30.720 worst fires in New York City modern history. Plus tributes 0:00:30.800 --> 0:00:34.080 come in for comedian Bob Saget, I'm Mike la Bard Ahead, 0:00:34.280 --> 0:00:36.720 I'm John Stash, Darn sports, the Jets and Giants lost 0:00:36.760 --> 0:00:39.600 as the NFL regular scenes that ended, the Raiders, Steelers 0:00:39.600 --> 0:00:44.680 and forty Niners grabbed the last playoff spots. That's all 0:00:44.680 --> 0:00:48.640 straight Ahead on Bloomberg day Break on Bloomberg Element Treo, 0:00:48.760 --> 0:00:53.080 New York, Bloomberg one, Washington, d C, Bloomberg one, O 0:00:53.240 --> 0:00:57.720 six one, Boston, Bloomberg nine Sixties, San Francisco, Sirius x 0:00:57.880 --> 0:01:00.320 M one nine Team and around the world. Old on 0:01:00.400 --> 0:01:07.840 Bloomberg Radio dot Com and via The Bloomberg Business and 0:01:08.000 --> 0:01:11.080 Good Morning, I'm John Tucker and I'm Karen Moscow and 0:01:11.280 --> 0:01:14.319 US futures are little change this morning. We're coming up 0:01:14.360 --> 0:01:16.040 to five oh one on Wall Street and we check 0:01:16.080 --> 0:01:18.679 the markets every fifteen minutes throughout the trading day. On 0:01:18.760 --> 0:01:21.520 Bloomberg again, S and P futures are little change, so 0:01:21.640 --> 0:01:25.840 are down futures. NASDACK futures are lower and they're jumping 0:01:25.880 --> 0:01:28.000 around as well, down about ten points right now. The 0:01:28.080 --> 0:01:31.480 Dacks in Germany's down a quarter percent. Tenure Treasury down 0:01:31.560 --> 0:01:34.120 eight thirties seconds. You at one point seven nine percent 0:01:34.200 --> 0:01:37.080 in a yield on the two year point eight eight percent. 0:01:37.520 --> 0:01:42.000 John and Karen. Fed policy remains front and center last 0:01:42.000 --> 0:01:44.639 week's Fed minutes in the US jobs report, we're market 0:01:44.680 --> 0:01:47.280 moving events. Now we have a big call on the 0:01:47.319 --> 0:01:50.360 future of interest rates. Let's get the latest from Bloomberg's. 0:01:50.440 --> 0:01:53.280 We need a young we need a good morning, Good morning, 0:01:53.320 --> 0:01:56.560 John Goldman. Sex expects the FED to raise interest rates 0:01:56.560 --> 0:01:59.920 four times this year and begin the balance sheet runoff 0:02:00.040 --> 0:02:03.560 process in July. The firm had previously expected the balance 0:02:03.560 --> 0:02:06.240 sheet run off to start in December, and it's all 0:02:06.320 --> 0:02:09.560 due to a stronger labor market and hawkish signs from 0:02:09.560 --> 0:02:12.960 those December minutes. FED officials have been signaling a quicker 0:02:13.000 --> 0:02:16.000 move to titan policy and Golden And says that could 0:02:16.080 --> 0:02:20.119 lead to faster policy normalization than we've seen before. I'm 0:02:20.160 --> 0:02:23.000 rened a young bluebirth daybreak all right, rened to thank you. 0:02:23.040 --> 0:02:26.320 And Inflation also remains in focus, and veteran investor Mark 0:02:26.400 --> 0:02:30.080 Mobias says traders are under pricing the risks. He tells 0:02:30.160 --> 0:02:32.960 us that the reacent spike and treasury yields has room 0:02:33.040 --> 0:02:35.440 to run. I think they can go much much higher. 0:02:35.800 --> 0:02:38.840 They've got to equal what we're seeing with inflation at 0:02:38.840 --> 0:02:41.200 the end of the day, because people are not going 0:02:41.280 --> 0:02:44.119 to be buying treasuries if they see that they only 0:02:44.120 --> 0:02:47.040 getting two or three percent, but inflation is seven eight 0:02:47.120 --> 0:02:49.880 nine percent, so at the end of the day, those 0:02:49.960 --> 0:02:52.720 rates have to go off. Those comments are Mark Mobias 0:02:52.760 --> 0:02:55.920 come after hawkish minutes from the feds December meeting underscore 0:02:56.000 --> 0:02:59.080 the case for faster rate hikes and speaking of inflation, 0:02:59.160 --> 0:03:02.080 it's the main event this week's economic calendar. Here with 0:03:02.120 --> 0:03:05.359 more is Bloomberg's Vinnie del Judais. The Labor Department issues 0:03:05.400 --> 0:03:07.959 the consumer price indecks on Wednesday, and the data could 0:03:07.960 --> 0:03:10.360 put more pressure on the federal reserve the race interest 0:03:10.440 --> 0:03:14.000 rates as soon as March. Bloomberg Economics, as December CPI 0:03:14.080 --> 0:03:16.960 will register a seven percent year over your increase as 0:03:17.000 --> 0:03:20.440 COVID nineteen related supply short to just persist, fielding the 0:03:20.480 --> 0:03:23.720 worst inflation since the nineteen eighties. This week's data on 0:03:23.800 --> 0:03:27.040 December producer prices and import prices will probably offer a 0:03:27.080 --> 0:03:30.560 similar narrative. Beneat Dell, Judais, Bloomberg day break right, Vinny, 0:03:30.639 --> 0:03:33.280 thank you. All Economic forecasts are also falling prey to 0:03:33.320 --> 0:03:36.600 the Macron variant. The new COVID strain is now posing 0:03:36.680 --> 0:03:39.440 a new test to growth, and Bloomberg said, Baxter has 0:03:39.480 --> 0:03:42.320 the story. It is posing something on which employers have 0:03:42.400 --> 0:03:46.720 no control, absentee ism because of illness, people calling in sick. 0:03:47.280 --> 0:03:50.480 What started as a holiday flight cancelation has now become 0:03:50.560 --> 0:03:54.640 a reality in factories, grocery stores, and ports again testing 0:03:54.680 --> 0:03:58.240 supply chains top to bottom. The widespread absentee is um 0:03:58.320 --> 0:04:02.520 is already constraining output and several economists have downgraded their 0:04:02.560 --> 0:04:07.120 first quarter forecasts. How bad, how long it may take 0:04:07.200 --> 0:04:10.680 several weeks to assess? In San Francisco, I'm at Baxter, 0:04:10.680 --> 0:04:14.240 Bloomberg Gay Break Dank said on Capitol Hill. Democrats are 0:04:14.240 --> 0:04:17.240 pushing for another round of virus aid. How Speaker Nancy 0:04:17.240 --> 0:04:20.560 Pelosi says, go to add relief aid to a package 0:04:20.560 --> 0:04:25.159 to government funding legislation. Now, the administration has not made 0:04:25.320 --> 0:04:28.839 a formal request for more funding, but it is clear 0:04:29.320 --> 0:04:33.080 from the opportunity that is there and the again the 0:04:33.160 --> 0:04:37.719 challenge that is there from the resilience of this virus. 0:04:38.120 --> 0:04:40.800 Speaker Pelosi making the comments on Face the Nation from 0:04:40.800 --> 0:04:44.679 CBS heard Sundays on Bloomberg Radio. It's an interesting data 0:04:44.680 --> 0:04:47.839 on vaccines coming out of Asia this morning. John Singapore 0:04:48.040 --> 0:04:50.440 says it saw the few as deaths among those with 0:04:50.520 --> 0:04:54.440 Maderna's vaccine and the most deaths among those with Signifac shot. 0:04:54.920 --> 0:04:58.840 Nearly undred virus deaths recorded in the city state last 0:04:58.880 --> 0:05:03.120 year were among unvac senated individuals. And Gia politics also 0:05:03.160 --> 0:05:05.960 in focus this morning ahead of meetings between the US 0:05:06.040 --> 0:05:09.159 and Russia. But White House and US allies may impose 0:05:09.279 --> 0:05:14.400 export restrictions on Moscow if Vladimir Putin seizes more of Ukraine. 0:05:14.640 --> 0:05:19.080 The discussing limits on sensitive technology and electronics. Today in Geneva, 0:05:19.160 --> 0:05:22.920 senior American and Russian officials begin talks aimed at easing 0:05:22.960 --> 0:05:26.680 tensions over Ukraine. Here, Secretary State Anthony B. Lincoln, I 0:05:26.720 --> 0:05:29.440 don't think we're gonna see any any breakthroughs in the 0:05:29.480 --> 0:05:31.440 coming In the coming week, we're gonna be able to 0:05:31.440 --> 0:05:33.840 put things on the table. The Russians will do the same, 0:05:34.520 --> 0:05:37.800 both directly with US at NATO at the os UH, 0:05:37.800 --> 0:05:40.039 and we'll see if their grounds for for moving forward. 0:05:40.120 --> 0:05:43.479 Secretary State Anthony B. Lincoln making the comments on CNN's 0:05:43.640 --> 0:05:46.839 State of the Union. Turning to the markets, now, John, 0:05:46.880 --> 0:05:49.560 we have a bullish call from Julian Emmanuel, the ever 0:05:49.600 --> 0:05:51.720 Corps I s I strategist, says the S and P 0:05:51.920 --> 0:05:54.960 five hired is likely to end the year at hundred 0:05:55.080 --> 0:05:58.440 as the pandemic becomes an endemic by mid year. It's 0:05:58.440 --> 0:06:01.160 about a ten percent increase from are in levels, Immanuel 0:06:01.240 --> 0:06:05.320 says is also possible. His downside target is just south 0:06:05.360 --> 0:06:08.320 of thirty six hundred at the pandemic is prolonged or 0:06:08.400 --> 0:06:12.320 there's a hangover from spending and debt. Meantime, Karen Earning 0:06:12.320 --> 0:06:15.120 season kicks off in Earnest On Wall Street this week 0:06:15.240 --> 0:06:18.839 with more. Here's Bloomberg's Charlie Pellett. Banks will be front 0:06:18.880 --> 0:06:22.599 and Center with reports Friday from JP Morgan, Chase City Group, 0:06:22.640 --> 0:06:25.960 and Wells Fargo. They come as investors debate the strength 0:06:26.000 --> 0:06:29.479 of the economy and the federal reserves next policy moves. 0:06:29.680 --> 0:06:34.039 Seem as Shaw's chief strategist at Principal Global Investors, when 0:06:34.080 --> 0:06:36.000 we think about actually a bit of think about we 0:06:36.000 --> 0:06:38.839 were also going to think about earnings and the outlet 0:06:38.880 --> 0:06:40.880 that we have for twenty two is still a very 0:06:40.880 --> 0:06:44.000 solid recovery, still very straw economic en garment. Among some 0:06:44.080 --> 0:06:46.960 of the other names scheduled to report this week, Delta, 0:06:47.279 --> 0:06:52.280 Albertson's Infosis and KB Home in New York. Charlie Pellett, 0:06:52.279 --> 0:06:55.480 Bloomberg Daybreak, Thanks Charlie, and ahead of the cash open 0:06:55.520 --> 0:06:58.800 on Wall Street this Monday. Futures are mixed. The Dahl 0:06:58.920 --> 0:07:02.599 futures of twenty points, SIP futures, they're up two points 0:07:02.720 --> 0:07:06.440 right now. They tech have a nastic those futures down 0:07:06.640 --> 0:07:09.680 ten and a half points right now. As for treasuries, 0:07:09.720 --> 0:07:12.360 the benchmark ten year yield, it is up two basis 0:07:12.400 --> 0:07:15.240 points right now at one point seven eight percent, the 0:07:15.320 --> 0:07:18.480 two year at point eight seven percent. You're listening to 0:07:18.480 --> 0:07:24.840 Bloomberg day Break and where it's five oh seven right now, 0:07:25.200 --> 0:07:28.840 let's getting in from around the world. Here's Bloomberg's Michael Barnes. John, 0:07:28.920 --> 0:07:31.440 thank you very much. At least nineteen people were killed 0:07:31.440 --> 0:07:34.080 in New York City yesterday in a high rise apartment. 0:07:34.120 --> 0:07:37.080 Fire officials say the fire in the Bronx also injured 0:07:37.080 --> 0:07:40.440 at least sixty three people. New York Mayor Eric Adams, 0:07:40.760 --> 0:07:46.200 it's a very significant moment to have just the unification 0:07:47.080 --> 0:07:52.840 about city during this time of the tragedy, Mayor Eric Adams. 0:07:52.880 --> 0:07:55.200 As investigators say, the cause of the blaze was a 0:07:55.200 --> 0:07:58.480 malfunctioning space eater in an apartment on the third floor. 0:07:59.040 --> 0:08:02.240 New York City Fire Comissioner Daniel Nigro tells us many 0:08:02.280 --> 0:08:05.760 people are fighting for their lives because of smoke inhalation. 0:08:06.160 --> 0:08:09.480 The door to that apartment. Unfortunately, when the residents left 0:08:09.560 --> 0:08:12.480 was left open, it did not close by itself. The 0:08:12.600 --> 0:08:17.640 smoke spread throughout the building. Thus the tremendous loss of 0:08:17.680 --> 0:08:20.720 life and other people fighting for their lives right now 0:08:21.240 --> 0:08:25.000 in hospitals all over the Bronx. Commissioner Nigro says nine 0:08:25.000 --> 0:08:28.680 of the deaths were children. Republican Representative Jim Jordan of 0:08:28.720 --> 0:08:32.120 Ohio when a former President Donald Trump's closest allies and 0:08:32.200 --> 0:08:35.440 Congress has rejected a request for an interview by the 0:08:35.440 --> 0:08:39.240 House panel investigating the January sixth Capital riot. In a 0:08:39.360 --> 0:08:42.640 letter to the committee chairman, Jordan says the American people 0:08:42.960 --> 0:08:47.280 are tired of Democrats, NonStop investigations and partisan witch hunts. 0:08:47.720 --> 0:08:51.280 Republican Senator Ron Hunt said that he will Ron Johnson 0:08:51.320 --> 0:08:55.439 said that he will seek a third term in twenty two. Johnson, 0:08:55.679 --> 0:08:59.680 staunch supporter of former President Donald Trump, opposes COVID nineteen 0:08:59.679 --> 0:09:04.199 backs a nation and masked mandates. New York Democratic Congresswoman 0:09:04.200 --> 0:09:08.880 Alexandria or Cassio Cortez tested positive for COVID NINETEAM, according 0:09:08.960 --> 0:09:12.160 to her office of Cassio Cortez, who was fully vaccinated, 0:09:12.520 --> 0:09:16.080 has had a booster shot and is experiencing symptoms and 0:09:16.200 --> 0:09:19.360 is recovering at home. Tributes are pouring in for comedian 0:09:19.440 --> 0:09:22.679 Bob Saget. He played father Danny Tanner on the sitcom 0:09:22.800 --> 0:09:28.240 Full House. It's Mr Carr. What does Mr Carr say? 0:09:29.600 --> 0:09:33.839 You're right? He doesn't say anything. Sagged was found dead 0:09:33.920 --> 0:09:37.400 yesterday in his Orlando, Florida hotel room. Bob Saget, who 0:09:37.400 --> 0:09:41.160 was on a stand up tour was Global News twenty 0:09:41.160 --> 0:09:44.120 four hours a day on air and on Bloomberg Quick Take, 0:09:44.200 --> 0:09:47.240 powered by more than twenty seven journalist and analysts in 0:09:47.280 --> 0:09:51.080 more than a hundred twenty countries. Michael bar this is Bloomberg. Jo. Michael, 0:09:51.080 --> 0:09:56.760 thank you very much. Okay, just coming up on ten 0:09:56.840 --> 0:09:59.600 on Wall Street. That's time for the Bloomberg Sports Update. 0:10:00.160 --> 0:10:03.400 Here's John. Thanks John. The NFL regular season is over, 0:10:03.600 --> 0:10:06.319 thankfully for the Jets and Giants. They both went four 0:10:06.440 --> 0:10:09.160 and thirteen. The Jets, like last week, were at least 0:10:09.160 --> 0:10:11.880 in their game, trailed the Bills by only three midway 0:10:11.880 --> 0:10:14.720 through the fourth quarter. Buffalo went on to win seven 0:10:14.800 --> 0:10:16.480 to ten to clinch the a f C. E's. The 0:10:16.559 --> 0:10:19.360 Jets will go to next season unsure how good a 0:10:19.440 --> 0:10:23.160 quarterback they have. Rookie Zack Wilson yesterday competed only seven passes. 0:10:23.160 --> 0:10:26.079 The Jets will have the fourth and tenth picks of 0:10:26.120 --> 0:10:29.440 the draft. The Giants will have the fifth and eighth picks. 0:10:29.480 --> 0:10:31.959 They will clearly be looking to improve an offense so 0:10:32.160 --> 0:10:35.000 in apt. The Giants on a third and nine yesterday 0:10:35.040 --> 0:10:37.480 ran a quarterback sneak rather than risk of turnover. They 0:10:37.520 --> 0:10:40.560 lost to Washington two to seven. They lost their last 0:10:40.559 --> 0:10:43.199 six games and only once that they scored more than 0:10:43.280 --> 0:10:45.319 ten points the regular season and the last minute in 0:10:45.400 --> 0:10:47.640 Las Vegas. The Chargers game from fifteen down in the 0:10:47.679 --> 0:10:50.600 last five minutes to force overtime, but the Raiders kicked 0:10:50.640 --> 0:10:52.560 a field goal on the final play to win thirty 0:10:52.600 --> 0:10:55.440 five thirty two. Had the game into the tie, both 0:10:55.480 --> 0:10:57.960 teams would have made the playoffs. Instead, only the Raiders do. 0:10:58.000 --> 0:11:00.959 They'll play Cincinnati. The Chargers are out. The Steelers are 0:11:00.960 --> 0:11:03.600 in headed for Kansas City, New England will play Buffalo. 0:11:04.040 --> 0:11:07.000 The NFC matchups are Philadelphia at Tampa Bay, the forty 0:11:07.080 --> 0:11:10.520 Niners in Dallas, Arizona at the l A Rans NBA 0:11:10.640 --> 0:11:13.400 overtime in Brooklyn. The Nets first home win since mid December. 0:11:13.440 --> 0:11:17.720 They beat the Spurs nineteen. The Warriors beat the Kazz 0:11:17.800 --> 0:11:20.079 and Clay Thompson's first game in two and a half years. 0:11:20.360 --> 0:11:23.920 A judge in Australia reinstated Novak Djokovic's visas I now 0:11:23.960 --> 0:11:26.240 he can play the upcoming Australian Open, but the government 0:11:26.280 --> 0:11:29.360 could still take further action against him and historic hired 0:11:29.400 --> 0:11:31.959 by the Yankees. Thirty four year old Rachel Balkovic will 0:11:31.960 --> 0:11:34.560 manage the Yanks Class A minor league team in Tampa. 0:11:35.000 --> 0:11:37.640 First female to have such a job. John Stash were 0:11:37.679 --> 0:11:40.839 Bloomberg Sports John by John, thanks very much and ahead 0:11:40.840 --> 0:11:42.600 of the cash show. But on Wall Street, futures in 0:11:42.640 --> 0:11:46.240 the green right now, not but much. The nastac features 0:11:46.440 --> 0:11:50.439 have just termed positive, up just six points, SMP futures 0:11:50.440 --> 0:11:53.440 six points higher, and the own futures right now they're 0:11:53.679 --> 0:11:58.040 up forty four points. Will preview the opening uh do 0:11:58.240 --> 0:12:00.439 Wall Street this morning with Lori Calvas. Seen it in 0:12:00.600 --> 0:12:03.440 just a few minutes. You're listening the Bloomberg Tay Break 0:12:06.520 --> 0:12:08.840 Bloomberg day Break being brought to you by the Breakers 0:12:08.840 --> 0:12:11.880 this winter. A warm welcome awaits and awaits you. The 0:12:11.880 --> 0:12:14.400 Breakers is committed to making your stay even better with 0:12:14.440 --> 0:12:19.160 exceptional experiences, gracious service, unparrelled seaside glamour. Learn more of 0:12:19.280 --> 0:12:24.240 us of the Breakers dot markets, headlines and breaking news 0:12:24.360 --> 0:12:27.000 twenty four hours a day at Bloomberg dot Com, the 0:12:27.000 --> 0:12:31.119 Bloomberg Business at and at Bloomberg Quicktape. He's a Bloomberg 0:12:31.200 --> 0:12:39.800 Business Flash and I'm kared. Moscow and US stock Indix 0:12:39.880 --> 0:12:43.199 futures have turned higher this morning. Investors are bracing for 0:12:43.240 --> 0:12:46.240 a von market volatility as well as stimulus withdrawal. And 0:12:46.280 --> 0:12:48.559 we checked the markets every fifteen minutes throughout the trading 0:12:48.679 --> 0:12:51.760 day on Bloomberg S and P futures up about seven 0:12:51.800 --> 0:12:55.400 points down, futures of forty five and NASDAC futures up thirteen. 0:12:55.840 --> 0:12:58.240 The decks in Germany is down about a tenth above 0:12:58.280 --> 0:13:00.960 her sent tenure, Treasury down three thirty seconds. He had 0:13:01.000 --> 0:13:03.719 one point seven seven per set yield on a two 0:13:03.800 --> 0:13:06.640 year point eight six per set nine X screwed oils 0:13:06.679 --> 0:13:08.880 up to ten per cent or fourteen cents at seventy 0:13:08.920 --> 0:13:11.319 nine dollars, three cents of barrel call make schooled the 0:13:11.440 --> 0:13:15.160 tenth of upper cent or two dollars at seventy announced. 0:13:15.559 --> 0:13:18.080 The euro one point one three three one against the dollar, 0:13:18.160 --> 0:13:20.280 British found one point three five nine two, and the 0:13:20.440 --> 0:13:24.080 ns at one fifteen point five nine Bitcoin this morning 0:13:24.160 --> 0:13:27.800 moving lower at forty one thousand, nine hundred dollars. That's 0:13:27.800 --> 0:13:30.800 a Bloomberg business flash. Now here's Michael Barr with Moura 0:13:30.840 --> 0:13:33.000 on what's going on around the world. Michael, good morning, 0:13:33.160 --> 0:13:35.960 Good morning, Kareny and New York of mal Functioning Space 0:13:36.000 --> 0:13:39.160 Eaters sparked a fire that filled a high rise Bronze 0:13:39.200 --> 0:13:42.959 department building with thick smoke Sunday morning, killing nineteen people, 0:13:43.000 --> 0:13:47.240 including nine children, and Australian judges reinstated tennis star Novent 0:13:47.280 --> 0:13:51.880 Djokovic's visa, which was canceled last week because he is unvaccinated. 0:13:52.320 --> 0:13:55.040 Final week of the regular NFL season, the Giants lost 0:13:55.080 --> 0:13:58.079 to Washington seven. The Jets lost forty nine in the 0:13:58.120 --> 0:14:02.120 playoffs after beating the Rams four. Patriots lost to the 0:14:02.200 --> 0:14:05.760 Dolphins but still advanced. Steelers are in the post season 0:14:06.000 --> 0:14:09.720 after beating the raven sixteen thirteen Round one playoffs, Raiders 0:14:09.760 --> 0:14:13.000 and Bengals, Patriots and Bills, Eagles and Bucks, forty nine, 0:14:13.000 --> 0:14:17.240 As and Cowboys, Steelers and Chiefs, Cardinals and Rams, Packers 0:14:17.320 --> 0:14:20.600 and Titans get first round bys. In the NBA, the Nets, Wizards, 0:14:20.640 --> 0:14:23.360 and Warriors won global news twenty four hours a day 0:14:23.480 --> 0:14:26.440 on air and on Bloomberg Quickday, powered by more than 0:14:26.520 --> 0:14:28.840 twenty seven hundred journalists and analysts more than a hundred 0:14:28.880 --> 0:14:31.720 twenty countries. I'm Michael Barr. This is Bloomberg jun Michael. 0:14:31.760 --> 0:14:34.400 Thank you. It is five twenty on Wall Street. We 0:14:34.480 --> 0:14:37.880 are lying for the Bloomberg Interactive Broker Studios. This is 0:14:37.920 --> 0:14:40.560 Bloomberg Daybreak. Let's get you set up for the trading 0:14:40.640 --> 0:14:43.560 day ahead, futures inching upward. The S and P five 0:14:43.640 --> 0:14:45.920 hundred did post the worst start to a year since 0:14:46.280 --> 0:14:50.360 twenty sixteen. We're joined now by Lori Calvassin, ahead of 0:14:50.480 --> 0:14:54.960 US Equity Strategy at RBC Capital Markets. Hey, Lari, thanks 0:14:54.960 --> 0:14:56.840 for being with us. Happy new year to you. What's 0:14:56.840 --> 0:15:00.680 your overall thought on the markets? Uh? Text bearing the 0:15:00.720 --> 0:15:02.480 brunt of the cell off of the first week of 0:15:03.720 --> 0:15:08.840 trading with a hawkish till from the FED um cheaper 0:15:08.920 --> 0:15:13.240 stocks going to outperform the more expensive ones. Well, thanks 0:15:13.240 --> 0:15:15.480 for having me, As always, it's great to be here. Look, 0:15:15.520 --> 0:15:17.640 I think that last week a lot of things that 0:15:17.720 --> 0:15:20.520 we'd have been expecting to play out in the early 0:15:20.600 --> 0:15:23.760 part of two did play out, so perhaps a bit 0:15:23.840 --> 0:15:26.960 more fiercely than even we'd anticipated. And you know, I 0:15:27.040 --> 0:15:29.680 think it's important to understand that there are different markets 0:15:29.720 --> 0:15:31.760 here that look at the FED, and the equity market 0:15:31.800 --> 0:15:33.960 at least seems to be lagging in terms of its 0:15:34.080 --> 0:15:36.520 understanding of what the set is going to do this year. 0:15:36.640 --> 0:15:38.200 So I think that's one of the reasons for the 0:15:38.240 --> 0:15:40.760 ferocity of the move last year of last week rather 0:15:41.240 --> 0:15:43.320 and the unwind and tech. If you go back to 0:15:43.680 --> 0:15:46.000 right before the holidays in December, we did a poll 0:15:46.040 --> 0:15:49.000 of equity investors and we found at fifty percent we're 0:15:49.040 --> 0:15:52.400 still anticipating liftoffs by the Fed into Q of this year. 0:15:52.520 --> 0:15:54.960 So the idea of March hikes coming into play. I 0:15:55.000 --> 0:15:57.320 know that's been popular and fixing come circles for a while, 0:15:57.360 --> 0:15:59.200 but it is something the equity market has been late 0:15:59.240 --> 0:16:01.760 to digest, and I think that's, frankly, just one of 0:16:01.840 --> 0:16:04.680 the reasons why we've seen this ferocious unwind in tech 0:16:04.760 --> 0:16:07.960 SOX because, as you mentioned, when rates are rising, expensive 0:16:07.960 --> 0:16:11.480 stocks underperform, and tech is where the most expensive valuations are. 0:16:11.880 --> 0:16:14.520 Even after the route we saw last week, we got 0:16:14.600 --> 0:16:17.720 the forecast from Goldman Sachs this morning four rate rises 0:16:18.000 --> 0:16:21.320 this year. What's your view, um, I think that's similar 0:16:21.360 --> 0:16:23.440 to what our economists have been talking about. I mean 0:16:23.480 --> 0:16:26.040 they were telling us back in early December, Frankly, that 0:16:26.200 --> 0:16:28.040 you know, they thought there was a fifty fifty chance 0:16:28.080 --> 0:16:30.760 of a Mark March hike, and our rate strategy team 0:16:30.840 --> 0:16:33.480 had been saying that they thought the Fed was on 0:16:33.560 --> 0:16:36.680 a more aggressive tightening path than than the market understood. 0:16:36.720 --> 0:16:39.480 They've been saying that for quite some time as well. Um, 0:16:39.600 --> 0:16:41.600 so it's not really that much of a shock to us. 0:16:41.680 --> 0:16:43.880 But again, I do think there's some additional digestion that 0:16:43.960 --> 0:16:46.560 the equity market um is going to have to do. 0:16:46.880 --> 0:16:48.880 So I don't think that this you know, this, this 0:16:49.200 --> 0:16:51.840 this route and tech frankly doesn't seem to me like 0:16:51.920 --> 0:16:54.640 it's done yet. Is there any thought that maybe the 0:16:54.720 --> 0:16:57.960 projections for the rate rises might be overdone, that the 0:16:58.000 --> 0:17:00.320 hawk is till might not be as hawk gish, and 0:17:00.400 --> 0:17:04.920 that could actually wind up being a positive for risk assets. Well, yeah, 0:17:04.960 --> 0:17:08.159 I've been hearing equity investors, you know, since you know, 0:17:08.240 --> 0:17:10.440 my December meetings were we've really been focusing on the 0:17:10.520 --> 0:17:13.439 year head outlook, questioning whether or not the FED should 0:17:13.480 --> 0:17:15.680 be so aggressive. And there's been a couple of things 0:17:15.720 --> 0:17:18.480 that people have pointed to in my conversations. At least 0:17:18.600 --> 0:17:21.680 one has been the economic disruption from Omicron and does 0:17:21.720 --> 0:17:24.040 not to say people are embarrassed on the economic outlook, 0:17:24.080 --> 0:17:26.640 but just saying there's a certain fragility um that they've 0:17:26.680 --> 0:17:29.080 been surprised that the FED would want to get so 0:17:29.280 --> 0:17:31.760 aggressive in the middle of um you know, sort of 0:17:31.800 --> 0:17:33.240 wait and see how it plays out, is what a 0:17:33.280 --> 0:17:36.000 lot of people have told me. Others, frankly, have said, Look, 0:17:36.080 --> 0:17:38.920 we expect inflation to start to moderate later this year. 0:17:39.000 --> 0:17:42.640 We expect supply chain pressures to moderate by midyear. Why 0:17:42.840 --> 0:17:45.120 does the FED need to be so aggressive if that's 0:17:45.160 --> 0:17:47.880 already set to happen, um. So I think that's really 0:17:47.960 --> 0:17:50.080 what a lot of equity investors have been struggling with 0:17:50.200 --> 0:17:52.119 and why they've been behind the curve, so to speak. 0:17:52.680 --> 0:17:56.200 A new year's started, another earning season. What among the 0:17:56.280 --> 0:17:58.639 things you'll be watching for it to maybe indicate a 0:17:58.680 --> 0:18:02.480 broader trend. So, you know, it's interesting. We always start 0:18:02.520 --> 0:18:05.119 out with the financials, and the financials have had quieter 0:18:05.240 --> 0:18:07.520 run cutting into this reporting season, so I'd say the 0:18:07.600 --> 0:18:10.320 bar is pretty high there, um. But you know, putting 0:18:10.359 --> 0:18:12.960 the financials aside, you know, I'm looking to see what 0:18:13.160 --> 0:18:15.800 the color is on demand, what's the color on supply chain, 0:18:15.880 --> 0:18:18.240 and the timing of improvement is COVID and the o 0:18:18.359 --> 0:18:22.400 maicon wave delaying that and pricing power. Um Our analysts 0:18:22.440 --> 0:18:24.840 have come into this year very comforted by the fact 0:18:24.920 --> 0:18:27.920 that that their companies can manage through O Macron and 0:18:28.000 --> 0:18:30.480 that pricing power is strong to come back supply chain 0:18:30.520 --> 0:18:33.320 and inflation pressures. UM. But we do need to see 0:18:33.400 --> 0:18:36.600 if that is continuing to hold in this latest commentary. Alright, 0:18:36.680 --> 0:18:39.000 time to put you on the spot with some projections 0:18:39.119 --> 0:18:44.840 you're in for you still sticking to your your in projections. 0:18:45.800 --> 0:18:48.800 We're still sticking to the five thousand fifty target. UM. 0:18:48.880 --> 0:18:51.320 We've had that in place for quite some time. UM. 0:18:51.440 --> 0:18:53.800 It actually we had put our targets out early last year, 0:18:53.800 --> 0:18:57.239 and so we did revise it earlier to that number already. UM. 0:18:57.320 --> 0:18:59.200 And look, I think bottom line, it still sends the 0:18:59.240 --> 0:19:01.240 message we want to send, which is that this is 0:19:01.280 --> 0:19:02.800 going to be an up here in the stock market. 0:19:02.920 --> 0:19:04.919 We don't think it's going to be as easy um 0:19:05.000 --> 0:19:07.199 as what we got last year. We're not surprised by 0:19:07.240 --> 0:19:09.399 the early year volatility. But the good news is this 0:19:09.520 --> 0:19:11.960 volatility is coming early in the year and there's time 0:19:12.000 --> 0:19:15.120 to recover from it. Yeah, what's what's the biggest risk 0:19:15.200 --> 0:19:18.159 you see at this moment? So you know, I have 0:19:18.320 --> 0:19:21.600 been concerned about the quantitative tightening talk. UM. That was 0:19:21.720 --> 0:19:24.160 not something that was on our radar a few months ago. 0:19:24.240 --> 0:19:26.639 It's something we have had to rapidly pull onto our 0:19:26.760 --> 0:19:29.600 radar um. I think that in the multiple compression that 0:19:29.720 --> 0:19:33.359 you do often see with rate height cycles is something 0:19:33.440 --> 0:19:35.760 to keep in mind. We've been anticipating a very strong 0:19:35.840 --> 0:19:38.960 Earns backdrop to offset that um, but I do think 0:19:39.000 --> 0:19:41.600 that's really probably where the risk is. Boys A pleasure, 0:19:41.640 --> 0:19:44.560 Thank you, lo Lorie Calvassin ahead of US Equity strategy 0:19:44.920 --> 0:19:48.520 at RBC Capital Markets with us this Monday morning. Down 0:19:48.600 --> 0:19:53.120 futures right now seventeen points higher, SMP futures a point higher, 0:19:53.240 --> 0:19:56.399 and the st futures they've been fluctuating of in and 0:19:56.480 --> 0:20:00.399 out of gains right now eleven points lower, or the 0:20:00.600 --> 0:20:06.720 NASTAC futures. You're listening to Bloomberg day Bread and the 0:20:06.720 --> 0:20:09.480 Bloomberg weather for it. Today mostly saw a breezy, colder 0:20:09.480 --> 0:20:12.160 at the Heights aperture about thirty so I partly clowned 0:20:12.200 --> 0:20:15.240 a chance of snow showers during the evening, breezy, much 0:20:15.359 --> 0:20:18.720 colder after midnight, the lows dipping down into the mid teens. 0:20:22.080 --> 0:20:26.560 Broadcasting live from the Bloomberg Interactive Broker Studio in New York, 0:20:26.720 --> 0:20:30.639 Bloomberg E Living Freedom to Washington, d C. Bloomberg one 0:20:30.800 --> 0:20:34.000 to Boston, Bloomberg one O six one to San Francisco, 0:20:34.080 --> 0:20:37.520 Bloomberg N sixty to the country, Sirius XM Chado one 0:20:37.640 --> 0:20:40.720 ninet and around the globe the Bloomberg Business at and 0:20:40.800 --> 0:20:50.560 Bloomberg Radio dot com. This is Bloomberg Day Breaks five 0:20:50.680 --> 0:20:53.440 thirty on Wall Street. Good morning, I'm John Tucker and 0:20:53.520 --> 0:20:55.960 I'm Karen Moscow, and we're just about four hours away 0:20:56.000 --> 0:20:57.800 from the open of US trading. Let's catch you have 0:20:57.880 --> 0:20:59.240 to date on the news you need to know at 0:20:59.320 --> 0:21:02.680 this hour. US futures are little change this morning. To 0:21:02.840 --> 0:21:05.040 start the week, the S and P five hundred is 0:21:05.080 --> 0:21:08.520 down one nine percent so far this year and as 0:21:08.560 --> 0:21:12.280 the worst start since to tech having NAVSDAC one hundred 0:21:12.400 --> 0:21:15.040 is down four and a half percent. It all comes 0:21:15.080 --> 0:21:18.240 as traders anticipate higher interest rates, and Goldman Sachs is 0:21:18.440 --> 0:21:21.879 ramping up its forecast on that front. Bloomberg's Reny too 0:21:21.920 --> 0:21:25.360 Young joins us now with more. Karen Goldman Sachs expects 0:21:25.400 --> 0:21:28.200 to Fit to raise interest rates four times this year 0:21:28.440 --> 0:21:32.000 and begin the balance sheet runoff process in July. That's 0:21:32.080 --> 0:21:35.159 moved up from a previous forecast of December. It's all 0:21:35.200 --> 0:21:38.159 because of a stronger labor market and hawk is signs 0:21:38.200 --> 0:21:41.440 from the Central Bank's latest meeting. Goldman says the Fed 0:21:41.560 --> 0:21:45.160 is set to normalized policy faster than we've ever seen before. 0:21:45.800 --> 0:21:48.360 I'm really need a young Bloomberg daybreak, all right, thanks 0:21:48.400 --> 0:21:50.680 for need a Treasury yields they continue to climb, with 0:21:50.760 --> 0:21:55.040