WEBVTT - Bloomberg Daybreak: June 23, 2022 - Hour 2 (Radio) 0:00:02.320 --> 0:00:05.160 Live from the Bloomberg Intact a Burger Studios. This is 0:00:05.160 --> 0:00:09.680 Bloomberg day Break for Thursday, June two. Coming up this hour. 0:00:10.000 --> 0:00:13.480 It is day two of congressional testimony for FED Chair J. Powell. 0:00:13.880 --> 0:00:18.240 Reaction pours into President Biden's proposed gas tax holiday. European 0:00:18.320 --> 0:00:21.799 Union leaders plan to grant candidate status to Ukraine, and 0:00:21.840 --> 0:00:23.880 the FED gets set to release the results of its 0:00:23.960 --> 0:00:27.120 bank stress tests. The Vivaldi School police chief has been 0:00:27.160 --> 0:00:30.880 placed on leave after last months smash shooting, plus prosecutors 0:00:30.880 --> 0:00:33.600 say Lane Maxwell to get thirty years in prison. On 0:00:33.720 --> 0:00:37.080 Michael blarn More, I'm John Stash and sports comeback, win 0:00:37.200 --> 0:00:39.519 for the Yankees, loss for the Medis in Colorado, be 0:00:39.640 --> 0:00:44.600 Tampa Bay, and overtime at this Family Cup final. That's 0:00:44.640 --> 0:00:48.320 all's training ahead on Bloomberg day Break on Bloomberg eleven, 0:00:48.400 --> 0:00:52.880 Free on New York, Bloomberg one, Washington, d C, Bloomberg 0:00:52.880 --> 0:00:57.560 one six one, Boston, Bloomberg nine sixties and Francisco syrius 0:00:57.720 --> 0:01:00.800 XM one nine team and around the world on Bloomberg 0:01:00.880 --> 0:01:07.960 Radio dot Com and via the Bloomberg Business App. Good morning, 0:01:08.000 --> 0:01:11.280 I'm Nathan Hagard and I'm Karen Moscow US DOT Index 0:01:11.440 --> 0:01:14.280 futures are higher this morning. We're coming up to six 0:01:14.280 --> 0:01:16.080 show one on Wall Street, and we check the markets 0:01:16.080 --> 0:01:19.120 every fifteen minutes throughout the trading day. On bloomberg S 0:01:19.160 --> 0:01:22.240 and P futures up about eleven points down, futures up nineteen, 0:01:22.319 --> 0:01:25.960 NASDAG futures up seventy three. The decks in Germany's down 0:01:26.000 --> 0:01:29.040 one percent, the ten year treasury up twelve thirty seconds, 0:01:29.080 --> 0:01:31.480 you know, three point one one per cent, and the 0:01:31.600 --> 0:01:34.800 yield on a two year is at three percent. Nathan Karen, 0:01:34.840 --> 0:01:37.920 we begin with day two of congressional testimony from J. Powell. 0:01:38.000 --> 0:01:40.520 This morning, the Fed chair appears before the House Financial 0:01:40.560 --> 0:01:44.720 Services Committee. Yesterday was Pell's most explicit acknowledgement yet that 0:01:44.880 --> 0:01:47.880 raising interest rates could lead to a recession. It's not 0:01:47.920 --> 0:01:51.480 our intended outcome at all, but it's certainly a possibility. 0:01:51.600 --> 0:01:53.919 And and frankly, the events of the last few months 0:01:54.800 --> 0:01:58.600 around the world have have have made it more difficult 0:01:58.640 --> 0:02:00.800 for us to achieve what we one, which is two 0:02:00.840 --> 0:02:04.600 percent inflation and still a strong labor market. Petal members 0:02:04.600 --> 0:02:06.840 of the Senate Banking Committee that the economy is still 0:02:06.840 --> 0:02:09.840 well positioned to handle tighter monetary policy. Former New York 0:02:09.880 --> 0:02:13.040 Fed President and current Bloomberg opinion columnist Bill Dudley says 0:02:13.040 --> 0:02:15.880 the recession is inevitable within the next twelve to eighteen months. 0:02:16.080 --> 0:02:20.639 I would expect a mild recession or two thousand and one, 0:02:21.200 --> 0:02:24.440 not the deep recession like seventies three, seventy four, or 0:02:24.440 --> 0:02:27.440 of course the Great Financial Crisis. Former New York Fed 0:02:27.480 --> 0:02:30.520 President Bill Dudley made the comments on Bloomberg Surveillance Catch 0:02:30.600 --> 0:02:33.440 the program weekdays at seven am Wall Street Time on 0:02:33.520 --> 0:02:36.760 Bloomberg Radio and television. Well Nathan Stocks gave up early 0:02:36.919 --> 0:02:41.280 gains on Powell's recession comments. Market veteran Abbey Joseph Cohen 0:02:41.360 --> 0:02:44.240 says the era of everything going up is now over. 0:02:44.760 --> 0:02:48.200 I think we're now back into a period in which 0:02:48.240 --> 0:02:51.160 it does matter where it's the fundamentals of earnings, the 0:02:51.160 --> 0:02:55.720 fundamentals of margins, the fundamentals of inflation, interest rates, and 0:02:55.840 --> 0:03:00.840 putting that altogether in terms of appropriate valuation models that 0:03:00.919 --> 0:03:04.600 will make a big difference for investors going forward. Joseph Cohen, 0:03:04.639 --> 0:03:07.880 who was a former senior investment strategistic Goldman Sachs, believes 0:03:07.919 --> 0:03:11.080 a mild recession is being priced into markets. Well. Crude 0:03:11.080 --> 0:03:13.760 oils taking a leg loger lower. Karen is concerned over 0:03:13.800 --> 0:03:17.639 a global economic slowdown intensifies, checking prices down dime excrudes 0:03:17.680 --> 0:03:19.880 down a dollar fifteen at a hundred five dollars four 0:03:19.919 --> 0:03:22.960 cents of barrel. President Biden is continuing his push to 0:03:23.000 --> 0:03:25.400 ease gas prices. Let's get the latest on that life 0:03:25.400 --> 0:03:28.360 from bloombergs Grenita Young, Good morning, Granita, Nathan, good morning. 0:03:28.440 --> 0:03:31.280 President Biden is running out of options to ease prices 0:03:31.320 --> 0:03:33.560 at the pump, and it is the latest action. He 0:03:33.639 --> 0:03:37.440 proposes a three month gas tax holiday. I suspending the 0:03:37.520 --> 0:03:40.800 eighteen sent gas tax federal gas tax in the next 0:03:40.880 --> 0:03:43.720 ninety days. We can bring down the price of gas 0:03:44.160 --> 0:03:47.080 and give families just a little bit of relief. It's 0:03:47.080 --> 0:03:50.080 a long shot for President Biden, as lawmakers, even his 0:03:50.120 --> 0:03:54.160 fellow Democrats quickly signaled they have little appetite for the move. 0:03:54.520 --> 0:03:57.920 Senate Majority Leader Chuck Schumer says Democrats and his chamber 0:03:58.000 --> 0:04:02.280 had already attempted a gas Texas pention it Republicans blocked it. 0:04:02.800 --> 0:04:05.040 Live in New York, I'm gonna need a Young Bloomberg 0:04:05.120 --> 0:04:07.080 day break. We need to thank you and like you say, 0:04:07.080 --> 0:04:10.920 a gas tax holiday is garnering little support. Bloomberg Politics 0:04:11.000 --> 0:04:13.960 contributor Genie she han Zeno says it flies in the 0:04:13.960 --> 0:04:17.920 face of the president's own energy policy. Many people, particularly 0:04:17.960 --> 0:04:21.239 on the left, are asking themselves, you know, essentially, who 0:04:21.360 --> 0:04:24.600 is Joe Biden. He could have used the challenge in 0:04:25.040 --> 0:04:28.760 Ukraine and the challenge with prices to push for renewables. 0:04:29.000 --> 0:04:30.760 You know, the old saying, don't let a good crisis 0:04:30.839 --> 0:04:34.159 go to waste. Why hasn't he pushed for something that 0:04:34.279 --> 0:04:38.520 people on the Democratic side believe in Bloomberg Politics, a contributor, 0:04:38.600 --> 0:04:42.200 Genie shehan Zeno spoke with our Washington corresponded Joe Matthew 0:04:42.240 --> 0:04:44.719 on Bloomberg Sound on Catch the show weekdays at five 0:04:44.720 --> 0:04:48.120 pm Eastern on Bloomberg Radio. Another major story we're following 0:04:48.120 --> 0:04:50.760 this morning from Washington. Karen has talked from both sides 0:04:50.760 --> 0:04:53.000 of the aisle that a gun safety bill could soon 0:04:53.040 --> 0:04:57.080 pass the Senate. Bloomberg said, Baxter has the story. Senate 0:04:57.120 --> 0:04:59.720 Minority Leader Mitch McConnell seems to be on board, but 0:04:59.880 --> 0:05:03.919 on mainly concerned about is dealing with the issues that 0:05:03.960 --> 0:05:06.880 have been brought to the fore by these mass shootings, 0:05:06.920 --> 0:05:10.640 which are directly related to school safety and mental Health, 0:05:10.880 --> 0:05:14.760 and Senate Majority leader Chuck Schumer says passage should be soon. 0:05:15.000 --> 0:05:18.920 The bill is real progress. It will save lives, and 0:05:19.000 --> 0:05:22.600 it is my intention to make sure the Senate passes 0:05:22.720 --> 0:05:25.320 this bill before the end of the week, and they 0:05:25.360 --> 0:05:28.640 hope to beat their summer recess. In San Francisco, I'm 0:05:28.640 --> 0:05:31.760 at Baxter Bloomberg, Gay Break and thank you. Turning overseas, 0:05:31.800 --> 0:05:35.320 European Union leaders planned to grant candidate status to Ukraine. 0:05:35.360 --> 0:05:37.440 The move will come at the EU summit that's beginning 0:05:37.440 --> 0:05:40.280 today in Brussels. Begin more from Bloomberg's Maria today. O 0:05:40.839 --> 0:05:43.160 Even though it is seen as a given and there's 0:05:43.160 --> 0:05:46.719 no surprise it will happen by tomorrow, Ukraine being granted 0:05:46.720 --> 0:05:49.880 this CARDUSI status it is pretty historic. The question is 0:05:49.880 --> 0:05:53.000 how much will it change for the country overnight. Probably 0:05:53.040 --> 0:05:55.960 not a lot. And we should also note that even 0:05:55.960 --> 0:05:58.640 if you're a country and you had given this panducy status, 0:05:58.760 --> 0:06:01.039 it doesn't mean the assess and talks are going to 0:06:01.120 --> 0:06:04.240 happen quickly or swiftly. You know, there's many countries in 0:06:04.240 --> 0:06:07.080 Europe that have applied for it, granted the Cavities WHO 0:06:07.080 --> 0:06:09.680 status and then of course, get stuck in the process 0:06:09.760 --> 0:06:13.080 for years before they get the membership and blowburgs Maria 0:06:13.160 --> 0:06:15.680 today O in Brussels, as Ukraine will be told it 0:06:15.680 --> 0:06:17.839 has to meet a set of conditions related to the 0:06:17.880 --> 0:06:20.919 rule of law, adjustice and anti corruption before joining the 0:06:20.960 --> 0:06:22.800 EU like here in the U. S care and the 0:06:22.800 --> 0:06:26.080 FED releases results from its yearly bank stress tests this afternoon, 0:06:26.120 --> 0:06:28.640 and we get more from Bloomberg's Tom Busby. All thirty 0:06:28.680 --> 0:06:31.159 four banks monitored by the Federal Reserve, which I have 0:06:31.160 --> 0:06:33.400 a hundred billion dollars in assets, are part of this 0:06:33.480 --> 0:06:35.680 year's stress tests to see if they can withstand a 0:06:35.760 --> 0:06:40.120 hypothetical economic downturn, a crash in the commercial real estate market, 0:06:40.160 --> 0:06:43.840 and a surge in unemployment. That number up from twenty 0:06:43.839 --> 0:06:46.680 three lenders last year after some larger regional banks like 0:06:47.000 --> 0:06:49.359 Fifth Third Bank Corp. And Ally Financial got to pass. 0:06:49.839 --> 0:06:52.240 The results will dictate how much capital those banks will 0:06:52.240 --> 0:06:54.280 need to have on hand and how much they can 0:06:54.320 --> 0:06:57.480 return to shareholders in the form of share buy backs 0:06:57.520 --> 0:07:00.560 and dividends. But they'll have to wait until day to 0:07:00.640 --> 0:07:04.839 announce any of those Tom Busby Bloomberg Daybreak. All right, Tom, 0:07:04.880 --> 0:07:06.720 thank you, and this update is brought to you by 0:07:06.760 --> 0:07:09.359 Informatica and the Cloud. Your data has the power to 0:07:09.400 --> 0:07:12.120 do the extraordinary. Managed data across any location in the 0:07:12.160 --> 0:07:16.960 cloud for accurate and actionable insights. More Informatica dot Com 0:07:17.000 --> 0:07:24.160 and this is Bloomberg. I Think You Caring is six 0:07:24.240 --> 0:07:26.440 o seven on Wall Street. We're sixty two degrees in 0:07:26.520 --> 0:07:29.120 Central Park dealing with an accident on the northbound FDR 0:07:29.200 --> 0:07:32.480 Drive at forty second. Details coming up in traffic. First 0:07:32.520 --> 0:07:35.000 Michael Barr with details on what's happening in New York 0:07:35.040 --> 0:07:37.400 and around the world. Good morning, Michael, Good morning Nathan. 0:07:37.440 --> 0:07:40.680 There have been reports of a widespread internet outage with Verizon. 0:07:41.000 --> 0:07:44.560 According to down detect, your user reports indicate problems at 0:07:44.640 --> 0:07:47.600 Verizon this morning. Details on the nature of the outage 0:07:47.600 --> 0:07:52.000 are limited, but some services returning. Pete Eronando, the chief 0:07:52.080 --> 0:07:55.160 of the School District Police Force in Uvalde, Texas, has 0:07:55.200 --> 0:07:57.800 been placed on the administrative leave for his response to 0:07:57.920 --> 0:08:01.679 last month smash shooting at rob Elementary School. A gunman 0:08:01.760 --> 0:08:04.800 killed nineteen students and two teachers in the attack as 0:08:04.840 --> 0:08:08.120 police officers stood by for more than an hour. Meanwhile, 0:08:08.200 --> 0:08:11.840 Democratic State Senator Roland Guterres says he filed a freedom 0:08:11.840 --> 0:08:16.000 of information request against the Texas Department of Public Safety, 0:08:16.280 --> 0:08:18.720 but as yet to hear back from the agency. We're 0:08:18.760 --> 0:08:21.480 frustrating because we're getting half truce and you winto a 0:08:21.520 --> 0:08:24.280 lot of finger pointing. Uh. And that's been the case 0:08:24.320 --> 0:08:27.800 in Stay one with DPS. Senator Guterrest spoke with k 0:08:28.080 --> 0:08:31.360 t r K. The January six Committee holds its fifth 0:08:31.360 --> 0:08:33.800 hearing today. The focus will be on the pressure former 0:08:33.840 --> 0:08:37.280 President Trump exerted on the Justice Department to overturn the 0:08:37.960 --> 0:08:42.840 presidential election results. Federal prosecutors say Gallene Maxwell, the British 0:08:42.840 --> 0:08:46.400 socialite who was convicted in engaging in a ten years 0:08:46.480 --> 0:08:51.200 sex trafficking scheme with former boyfriend Jeffrey Epstein, deserves to 0:08:51.240 --> 0:08:55.320 spend thirty years in prison. Maxwell will be sentenced on June. 0:08:55.520 --> 0:08:58.320 New Jersey Governor Phil Murphy says the state will suspend 0:08:58.440 --> 0:09:02.439 sales tax collections for ten days on back to school purchases, 0:09:02.480 --> 0:09:05.880 saving buyers about seventy five million dollars from pens and 0:09:05.960 --> 0:09:11.280 pencils and notebooks to art supplies, textbooks or other study guides, 0:09:11.679 --> 0:09:16.000 new laptop computers, among much more. Kevin and Murphy says 0:09:16.040 --> 0:09:19.640 the discount will be in effect from August to September five, 0:09:20.280 --> 0:09:23.720 New York City subway system writers will see something new. 0:09:23.800 --> 0:09:26.920 Authorities planned to place cameras on subway cars in an 0:09:26.920 --> 0:09:30.120 ever to increase safety. Train shooting in San Francisco has 0:09:30.200 --> 0:09:33.240 left a person dead and another injured. Authorities say they're 0:09:33.240 --> 0:09:35.520 still looking for a suspect behind the shooting near the 0:09:35.520 --> 0:09:39.120 city's Castro neighborhood. Officer Katherine Winters is with the San 0:09:39.160 --> 0:09:42.520 Francisco Police. We are working to gather information, which will 0:09:42.559 --> 0:09:45.880 include surveillance footage in any other footage front of any train. 0:09:46.280 --> 0:09:48.920 Officer Winters says that happened during the heart of Pride Week. 0:09:49.120 --> 0:09:51.640 Global News twenty four hours a day on air and 0:09:51.760 --> 0:09:54.440 on Bloomberg Quick Take, powered by more than twenty seven 0:09:54.480 --> 0:09:57.000 hundred journalists and analysts more than a hundred twenty countries. 0:09:57.320 --> 0:10:05.000 Michael barn this is Bloomberg, Nathan, Thank you, Michael. Almost 0:10:05.000 --> 0:10:07.040 six ten on Wall Street time for the Bloomberg Sports 0:10:07.080 --> 0:10:09.320 Update with John Stead Show All right, Nathan, Yankees were 0:10:09.320 --> 0:10:12.600 looking at a rare two game losing streak. He sacked Paradis, 0:10:12.600 --> 0:10:14.880 who hit three home runs Tuesday hit another in the 0:10:14.960 --> 0:10:17.679 second in Tampa Bay led four to one. Back came 0:10:17.760 --> 0:10:19.920 the Yankees too on run for Aaron Judge now after 0:10:20.640 --> 0:10:24.240 and Jose Trevino wi yet another huge hit, game winning 0:10:24.240 --> 0:10:26.280 two run homer eight. Then in Yanks one five for 0:10:26.480 --> 0:10:29.400 their home Tonight for Houston, Astros just beat the Mets 0:10:29.400 --> 0:10:32.680 five three is your and Albarez homer twice. He's hit one. 0:10:32.880 --> 0:10:35.600 Carlos Carrasco roughed up left for the pari injury. Only 0:10:35.640 --> 0:10:38.120 a two game series, but the first time the Mets 0:10:38.120 --> 0:10:41.079 have been swept over time at the Stanley Cup Finals, 0:10:41.120 --> 0:10:44.960 quickly ahead, not to Catry inside the circle, Cadre, where's 0:10:45.000 --> 0:10:49.480 the book? How did that not go in? It? Did 0:10:50.040 --> 0:10:55.120 it did go in? It? Did it? Did we it? Scars? 0:10:55.360 --> 0:11:00.160 No the cadre get cad cad I didn't set but 0:11:01.160 --> 0:11:03.480 yes he he had to call Tampa Bay thought Colorado 0:11:03.480 --> 0:11:05.320 should have been called for a too many men on 0:11:05.360 --> 0:11:07.199 the ice penalty. But the Ads one three two and 0:11:07.280 --> 0:11:09.760 leave the series three one and they can win the 0:11:09.840 --> 0:11:13.120 Cup in Denver tomorrow night. NBA Draft takes place tonight. 0:11:13.160 --> 0:11:15.320 The Nets host the draft, but they don't have a pick. 0:11:15.360 --> 0:11:17.880 They could have used Philadelphia's first rounder, they elected to 0:11:17.920 --> 0:11:20.120 stave it until next year nixt to have the eleventh pick. 0:11:20.160 --> 0:11:22.760 There are reports they're trying to move up. Orlando has 0:11:22.800 --> 0:11:26.000 the first pick, expected to take Auburn's Jabari Smith. There's 0:11:26.000 --> 0:11:28.760 golf today near Hartford is the PG eight tour announcers 0:11:28.840 --> 0:11:31.080 changes that they claim they were gonna make anyway, but 0:11:31.520 --> 0:11:33.320 admit they may be moving them up due to the 0:11:33.320 --> 0:11:35.960 competition they're now facing from the new Live Tour, more 0:11:36.000 --> 0:11:38.720 prize money and several tournaments will no longer have the 0:11:38.760 --> 0:11:42.000 field be cut good way through John stash Award, Bloombird 0:11:42.040 --> 0:11:45.480 Sportsmath Loki John. Thank you Right now, SMP futures aren't 0:11:45.480 --> 0:11:48.200 moving higher. Seeing some gains in the pre market up 0:11:48.240 --> 0:11:52.480 fourteen points now, DAL futures have gone higher by forty 0:11:52.480 --> 0:11:55.400 eight points. In NASTACT futures, you're building on their gains 0:11:55.480 --> 0:11:58.480 up eighty five points. The tenure treasury is up ten 0:11:58.559 --> 0:12:01.920 thirty seconds, the yield three point one one per cent. 0:12:02.200 --> 0:12:09.120 This is Bloomberg. Bloomberg Day Break is brought to you 0:12:09.200 --> 0:12:12.400 by Hofstra Universities Frank gz RB School of Business, top 0:12:12.440 --> 0:12:15.760 ranked online NBA program with the Real World Foundation. Learn 0:12:15.800 --> 0:12:18.480 more at Hofstra dot E d U slash go grad 0:12:22.040 --> 0:12:25.440 Markets headlines, and breaking news twenty four hours a day 0:12:25.559 --> 0:12:28.559 at Bloomberg dot Com, the Bloomberg Business Out and at 0:12:28.559 --> 0:12:38.000 Bloomberg Quick Tape. This is a Bloomberg Business Flash and 0:12:38.040 --> 0:12:41.280 I'm Karen Moscow. Bond yales are tumbling is comments by 0:12:41.320 --> 0:12:44.199 Federal Reserve Chair J Powell and growth data in Europe 0:12:44.200 --> 0:12:48.000 stoke fear about a global downturn. US dot index futures 0:12:48.000 --> 0:12:50.880 are gaining, bucking the retreat in European stocks and oil. 0:12:51.320 --> 0:12:54.120 They yield on German tenure bonds slumping as much as 0:12:54.120 --> 0:12:56.600 twenty one basis points points for the biggest two day 0:12:56.640 --> 0:12:59.719 to clients since November eleven. This after the report that 0:12:59.760 --> 0:13:02.760 show an economic activity in the euro Area. Sload sharply 0:13:02.840 --> 0:13:05.719 in June. US tenure rates are trading near a two 0:13:05.800 --> 0:13:08.800 week low, and looking at US dock index future is 0:13:08.840 --> 0:13:12.160 both contracts on the SNP and Nasdaq one hundred rising 0:13:12.200 --> 0:13:15.480 after racing earlier declines. We checked the markets every fifteen 0:13:15.520 --> 0:13:18.080 minutes throughout the trading day on Bloomberg. Right now, US 0:13:18.160 --> 0:13:21.280 and P futures are up thirteen points down futures have 0:13:21.440 --> 0:13:24.360 forty and as day futures have eighty one. The docks 0:13:24.400 --> 0:13:27.240 in Germany is down eight tenths of a percent ten 0:13:27.320 --> 0:13:29.840 your treasury up ten thirty seconds, you have three point 0:13:29.960 --> 0:13:32.720 one one percent. The yield on the two year is 0:13:32.720 --> 0:13:35.600 at three percent. Ni Max screwed oil down eight ten 0:13:35.760 --> 0:13:38.240 percent or eighty eight cents at a hundred five dollars. 0:13:38.280 --> 0:13:41.200 Thirty one cents of barrel Comacs gold is down four 0:13:41.280 --> 0:13:43.959 tens per cent or seven dollars forty cents at eighteen 0:13:43.960 --> 0:13:47.000 thirty one announced the euro one point oh five one 0:13:47.120 --> 0:13:49.720 five against the dollar, the British found one point to 0:13:49.720 --> 0:13:52.320 to one five and the end at one thirty five 0:13:52.360 --> 0:13:55.440 point three seven. Looking at Bitcoin this morning, up more 0:13:55.480 --> 0:13:59.800 than four percent at twenty thousand, seven hundred twenty dollars 0:14:00.080 --> 0:14:02.120 and of course at e thirty Wall Street time, we 0:14:02.160 --> 0:14:05.040 do get the weekly report on initial jobless claims. That's 0:14:05.040 --> 0:14:07.880 a bloomberg business flash. Now here's Michael Barr with more 0:14:07.920 --> 0:14:10.280 on what's going on around the world. Michael Karen, thank 0:14:10.280 --> 0:14:12.839 you very much. There have been reports of a widespread 0:14:12.880 --> 0:14:16.280 Internet outage with Verizon. That's according to down detective. The 0:14:16.320 --> 0:14:19.680 p g A tour is countering the Saudivag Live Golf Series. 0:14:19.720 --> 0:14:23.680 Tour Commissioner Jay Monahan unveiled his plan to increase purse 0:14:23.760 --> 0:14:26.400 sizes and revamped the schedule, and an effort to keep 0:14:26.400 --> 0:14:30.080 players from leaving the tour. In baseball, the Yankees one, 0:14:30.160 --> 0:14:33.200 the Mets lost, the Orio shutout, the National seven, ZIP, 0:14:33.480 --> 0:14:35.840 the Red Sox one, the Giant and as lost and 0:14:36.120 --> 0:14:39.440 HL action after Game four. The Avalanche are game away 0:14:39.480 --> 0:14:42.080 from winning the Stanley Cup. Colorado beat the Lightning and 0:14:42.160 --> 0:14:45.200 overtime three two. Global News twenty four hours a day 0:14:45.200 --> 0:14:47.320 on air rand on Bloomberg Quick Take, powered by more 0:14:47.360 --> 0:14:49.840 than twenty seven hundred journalists analyist in more than a 0:14:49.920 --> 0:14:52.560 hundred twenty countries. I'm Michael Barr. This is Bloomberg, Nathan. 0:14:52.600 --> 0:14:54.400 Thank you, Michael. We're count up to six twenty on 0:14:54.440 --> 0:14:57.440 Wall Street Life from the Bloomberg Contractive Brokers Studios. This 0:14:57.520 --> 0:15:00.760 is Bloomberg Daybreak and as we await day two of 0:15:00.840 --> 0:15:04.480 testimony on Capitol Hill from Federal Reserve Chairman Jerome Powell, 0:15:04.560 --> 0:15:07.560 we are joined this morning by Ben Laidler, global market 0:15:07.640 --> 0:15:10.120 strategist at each HORO for look at some of the 0:15:10.160 --> 0:15:14.440 market reaction. We certainly did see a lot of that yesterday, Ben, 0:15:14.600 --> 0:15:17.880 with Chairman Pal kind of taking investors on a bit 0:15:17.880 --> 0:15:22.440 of a ride with his comments about recession certainly a possibility. 0:15:22.520 --> 0:15:27.560 What kind of volatility are you looking for today? Yeah, 0:15:27.560 --> 0:15:30.560 I think it's a recognition of reality. Maybe not a 0:15:30.560 --> 0:15:33.920 big surprise. Recession risks, you know, clearly rising. I think J. 0:15:34.080 --> 0:15:39.040 Powe obviously alluded to that, um yesterday. But I think 0:15:39.040 --> 0:15:40.480 we've been seeing, you know, a little bit of room 0:15:40.480 --> 0:15:42.320 for relief. Right. It's been a very few it's been 0:15:42.320 --> 0:15:44.920 a very top few weeks. The markets pricing in a 0:15:45.000 --> 0:15:49.000 very aggressive FED evaluations are now below tenure averages, oil 0:15:49.040 --> 0:15:51.720 prices coming off a little bit, and earning still pretty solid, right. 0:15:51.760 --> 0:15:54.720 I mean that's the bull case, um, you know, the 0:15:54.720 --> 0:15:57.520 bad cases that we sort of tip into recession and 0:15:57.800 --> 0:16:01.080 the one shoe that hasn't dropped yet it begins to crack, 0:16:01.120 --> 0:16:04.240 which is earnings. There has been evaluation driven bear markets. 0:16:04.320 --> 0:16:07.600 So far, earnings have been very, very solid. I think 0:16:08.520 --> 0:16:11.360 earnings will remain resilient to a slowdown, but they're not 0:16:11.400 --> 0:16:14.800 immune to a recession. You've laid out the bullet bear 0:16:14.880 --> 0:16:17.320 cases there. What's your base case on where markets go 0:16:17.400 --> 0:16:22.080 from here? Ye? Gods are full? Uh, you know, I 0:16:22.120 --> 0:16:24.000 think we're in a sort of U shaped recovery. The 0:16:24.080 --> 0:16:27.560 key missing piece here is the sort of peak deciphed 0:16:27.640 --> 0:16:32.120 peak for inflation. That's what it's all about, um, that 0:16:32.160 --> 0:16:35.360 would allow central banks to loosen the vice that they 0:16:35.400 --> 0:16:37.480 have markets sort of in right now. I don't think 0:16:37.520 --> 0:16:39.840 we're too far away from that sort of peak of inflation. 0:16:40.160 --> 0:16:44.760 Financial conditions have surged, mortgage rate of surge, consumer confidence 0:16:44.800 --> 0:16:47.040 has plunged, and now I think we're getting a little 0:16:47.080 --> 0:16:50.440 bit of us a welcome pullback in oil prices. And 0:16:50.960 --> 0:16:52.720 as I say, it's all about inflation, I don't think 0:16:52.720 --> 0:16:55.280 we're too far away from that peak, and that is 0:16:55.320 --> 0:16:57.880 the catalyst the market. What do you think it's going 0:16:57.920 --> 0:17:01.520 to take for the chairman and central banks generally to 0:17:01.840 --> 0:17:05.480 get inflation down to target if we haven't gotten to 0:17:05.560 --> 0:17:11.520 peak inflation yet, As you say, it's the twenty plus 0:17:11.560 --> 0:17:14.840 trillion dollar question to the US economy. Central banks they're 0:17:14.840 --> 0:17:16.880 going to keep their foot to the floor on the 0:17:16.960 --> 0:17:21.080 on the interest rate accelerator until inflation does roll over. 0:17:21.119 --> 0:17:22.800 So that's the risk here. I think you know there 0:17:22.800 --> 0:17:25.320 are real buffers to a slow down. The consumers are 0:17:25.359 --> 0:17:28.240 in good place, companies are in good place, but those 0:17:28.280 --> 0:17:33.240 buffers are not insurmountable. The longer this goes on. There's 0:17:33.280 --> 0:17:38.280 a relative good news here. Inflation expectations are very well anchored. 0:17:38.520 --> 0:17:42.080 So inflation maybe eight percent in Europe in the US today, 0:17:42.119 --> 0:17:45.360 but those long term inflation expectations are you know, two 0:17:45.440 --> 0:17:47.760 to three percent um. You know, that's a really good 0:17:47.760 --> 0:17:50.879 news story. That means they don't necessarily need to, you know, 0:17:50.960 --> 0:17:53.119 see inflation all the way down to that sort of 0:17:53.119 --> 0:17:55.840 two percent level before they can sort of rein back. 0:17:56.200 --> 0:17:58.280 But we do need to see that sort of decisive peak. 0:17:58.359 --> 0:17:59.880 We thought we had it a couple of months ago. 0:18:00.560 --> 0:18:02.879 It was a it was a full stawn. But I 0:18:02.920 --> 0:18:04.480 think it's I think it's coming in the next couple 0:18:04.480 --> 0:18:06.720 of months. Oh well, well, you've see central banks trying 0:18:06.720 --> 0:18:08.840 to play catch up on inflation. Where do you see 0:18:08.880 --> 0:18:14.000 opportunity in terms of investments right now? So I think 0:18:14.000 --> 0:18:18.520 the key right now is to be invested. Ball markets 0:18:18.520 --> 0:18:21.960 are built on the shoulders of bear markets. You know, 0:18:21.960 --> 0:18:24.560 ball markets are three times longer and three times bigger 0:18:24.560 --> 0:18:27.040 than bear markets. I think you need to be invested 0:18:27.080 --> 0:18:29.879 for that. If you sort of sell out now, a 0:18:29.880 --> 0:18:32.080 lot of people won't get back in. There's always an excuse, 0:18:32.280 --> 0:18:35.399 always a reason not to invest. So I think you 0:18:35.440 --> 0:18:37.520 need to be invested, but I think you need to 0:18:37.520 --> 0:18:42.440 be reasonably reasonably defensive. These sort of cheaper sectors, these 0:18:42.440 --> 0:18:48.080 traditional defensive utilities, staples, healthcare, high dividend yields. Maybe some 0:18:48.160 --> 0:18:52.199 of these more defensive or less are correlated overseas markets, 0:18:52.240 --> 0:18:55.200 either UK or China. These are think other places you 0:18:55.240 --> 0:18:58.520 want to be in for now that keep you in markets, 0:18:58.560 --> 0:19:01.960 but a reasonably defense if for hopefully when we get 0:19:01.960 --> 0:19:05.520 that inflation, that inflation catalyst, and you can be comfortable 0:19:05.520 --> 0:19:07.399 to take a bit more risk. I think about thirty 0:19:07.400 --> 0:19:09.760 seconds left here, Ben, Are you looking for any different 0:19:09.840 --> 0:19:12.359 messaging from Chairman Power when he goes before the House 0:19:12.359 --> 0:19:17.239 Committee today? I hope not. He's been very consistent. I 0:19:17.280 --> 0:19:20.040 think that you know, the overwhelming focus is to bring 0:19:20.040 --> 0:19:22.680 inflation down. They will do what it takes. As they say, 0:19:22.720 --> 0:19:26.200 it's all about inflation. That's all about inflation. Therefore interest 0:19:26.280 --> 0:19:29.359 rates and that's what's been crushing. So evaluations is stoking 0:19:29.359 --> 0:19:32.119 and stoking recession fits here. So I think it's going 0:19:32.200 --> 0:19:34.240 to stay the course. But as I say, I don't 0:19:34.240 --> 0:19:36.960 think we're too far away from that dec inflation catalyst. 0:19:37.520 --> 0:19:39.520 Always good to get your thoughts spent. Thanks again for 0:19:39.560 --> 0:19:42.680 being with us this morning, Ben Laidler, Global Markets Strategists 0:19:42.800 --> 0:19:48.399 at the TOROL futures moving higher getting a lift this morning. 0:19:48.480 --> 0:19:51.200 Right now, at least SMP futures are up fifteen points down, 0:19:51.240 --> 0:19:54.440 Future is up fifty five, NASAC futures are higher by 0:19:54.520 --> 0:19:57.480 eighty five points, and the tenure treasuring now up eleven 0:19:57.560 --> 0:20:00.720 thirty seconds. The yield three point one one per cent. 0:20:01.160 --> 0:20:08.800 You're listening to Bloomberg Daybreak Bloomberg eleven three oh weather 0:20:09.000 --> 0:20:11.879 cloudy through the morning with a high in the low seventies. Today, 0:20:11.920 --> 0:20:13.920 will be in the low eighties tomorrow under a mix 0:20:13.960 --> 0:20:17.679 of sun and clouds. Warmer Saturday might see ninety Right 0:20:17.720 --> 0:20:24.879 now sixty two degrees broadcasting live from the Bloomberg Interactive 0:20:24.920 --> 0:20:28.800 Broker Studio in New York. Bloomberg E Living Freedom to Washington, 0:20:28.880 --> 0:20:32.919 d C, Bloomberg to Boston, Bloomberg one O six one 0:20:33.080 --> 0:20:36.520 to San Francisco, Bloomberg Knowing sixty to the Country, Sirius 0:20:36.680 --> 0:20:39.119 XM to A one nine team, and around the globe 0:20:39.200 --> 0:20:42.840 the Bloomberg Business apt and Bloomberg Radio dot Com. This 0:20:43.119 --> 0:20:51.720 is Bloomberg Daybreak six thirty on Wall Street. Good morning, 0:20:51.720 --> 0:20:54.560 I'm Nathan Hagar and I'm Kared Moscow. We are just 0:20:54.640 --> 0:20:57.200 about three hours away from the open of US trading 0:20:57.280 --> 0:20:59.399 time for the five things you need to Notice start 0:20:59.440 --> 0:21:03.960 your day to you by Interactive Brokers. Interactive Brokers Global 0:21:04.000 --> 0:21:07.160 Analysts helps you find new global investment opportunities to diversify 0:21:07.200 --> 0:21:10.760 your portfolio and discover undervalued companies that they have greater 0:21:10.800 --> 0:21:14.720 growth potential. Try IBKR Global Analysts today at ibkr dot 0:21:14.760 --> 0:21:18.159 com slash g a h first stay two of congressional 0:21:18.200 --> 0:21:20.959 testimony from J. Powell this morning, the FED chair appears 0:21:20.960 --> 0:21:24.320 before the House Financial Services Committee. Yesterday was his most 0:21:24.359 --> 0:21:27.960 explicit acknowledgement yet that raising interest rates could lead to 0:21:28.040 --> 0:21:32.240 our recession. You're seeing growth slow from the very elevated 0:21:32.320 --> 0:21:35.480 levels of last year associated with the reopening. You're seeing 0:21:35.480 --> 0:21:38.840 the beginnings of job growth slowing to more sustainable levels, 0:21:39.119 --> 0:21:41.280 and you know there's risk in that. FED. J. J. 0:21:41.440 --> 0:21:44.680 Powell told lawmakers the economy is strong and well positioned 0:21:44.720 --> 0:21:48.400 to handle tighter monetary policy. Markets gave up early gains 0:21:48.560 --> 0:21:52.199 on Powell's recession comments. Karen Janette Garrity, Chief Economists with 0:21:52.280 --> 0:21:56.000 Robertson Stephen says as recession talk grows, we could see 0:21:56.040 --> 0:21:59.719 inflation start to come down. I don't think it's firmly rooted, 0:21:59.840 --> 0:22:01.600 and there are an awful lot of people who are 0:22:01.600 --> 0:22:05.359 now eating to think about recession and in thinking about recession, actually, 0:22:05.400 --> 0:22:08.600