WEBVTT - Bloomberg Daybreak: October 14, 2022 - Hour 1 (Radio) 0:00:03.000 --> 0:00:06.240 Live from the Bloomberg Interactive Brokers Studios. This is Bloomberg 0:00:06.320 --> 0:00:10.240 day Break for Friday, October fourteen two. Coming up the Shower, 0:00:10.560 --> 0:00:14.440 Stocks Rise. Following the historic rally on Wall Street Banker 0:00:14.560 --> 0:00:18.120 Niece kick off this morning, Speculation grows the UK government 0:00:18.120 --> 0:00:21.480 will abandon its tax cut plan, and Twitter says Elon 0:00:21.560 --> 0:00:25.520 Musk is being investigated over his attempted acquisition. The January 0:00:25.640 --> 0:00:28.800 six Panel has voted to subpoena former President Trump lost. 0:00:28.880 --> 0:00:31.600 The shooting in the Raleigh, North Carolina neighborhood has left 0:00:31.680 --> 0:00:35.760 five dead. I'm Michael blomer More, I'm John Stashower and sports. 0:00:35.760 --> 0:00:38.400 The Yankees and Guardians played name two this afternoon. Either 0:00:38.479 --> 0:00:40.920 went for the Astros, the Rangers one the Devil's in 0:00:41.000 --> 0:00:47.400 Islanders Laws. That's all Train ahead on Bloomberg Daybreak on 0:00:47.520 --> 0:00:51.640 Bloomberg eleven three, on New York, Bloomberg ninety nine one, Washington, 0:00:51.720 --> 0:00:55.360 d C, Bloomberg one oh six one, Boston, Bloomberg nine 0:00:55.400 --> 0:00:59.240 sixties and Francisco Syrius x M one nine team and 0:00:59.280 --> 0:01:02.040 around the world Old on Bloomberg Radio dot Com and 0:01:02.240 --> 0:01:08.919 via The Bloomberg business Man. Good morning, I'm Nathan Hagar, 0:01:09.200 --> 0:01:12.080 and I'm Karen Moscow US Dock Index futures are lower 0:01:12.120 --> 0:01:15.080 this morning, with SMP future is down sixteen points down, 0:01:15.120 --> 0:01:18.240 futures down a hundred two, NASDAG futures down seventy seven. 0:01:18.440 --> 0:01:21.040 The decks in Germany is up six tents of percent. 0:01:21.280 --> 0:01:23.959 Ten year Treasury up seven thirties seconds. You're three point 0:01:24.000 --> 0:01:26.480 nine one percent and a yield on the two year 0:01:26.600 --> 0:01:30.160 four point four two percent. Nimex screwde oil is down 0:01:30.240 --> 0:01:33.000 three quarters of a percent. It's at eighty eight dollars 0:01:33.080 --> 0:01:35.640 forty two cents a barrel. Nathan Karen, We enter this 0:01:35.720 --> 0:01:38.160 final trading day of the week coming off a truly 0:01:38.240 --> 0:01:41.320 historic day. After falling two point four percent, the SMP 0:01:41.440 --> 0:01:44.880 five hundred reversed course and closed up two point six 0:01:44.920 --> 0:01:48.880 percent according to Bloomberg data, going back to never before 0:01:49.040 --> 0:01:52.640 as the market experienced such extreme readings in both directions 0:01:52.640 --> 0:01:55.440 in one day. Dave don Obedient, as chief investment officer 0:01:55.640 --> 0:01:58.480 at CIBC Private Wealth, Yeah, I don't think a day 0:01:58.520 --> 0:02:01.680 like this signifies a much at bottom. Obviously, we had 0:02:01.760 --> 0:02:04.680 a really strong market from mid June to mid August 0:02:04.720 --> 0:02:07.480 and it was just a bear market rally. But um, yeah, 0:02:07.520 --> 0:02:10.040 I think we're certainly closer to the end than the 0:02:10.040 --> 0:02:12.560 beginning of this bowl. Market Dave down Obedien at c 0:02:12.680 --> 0:02:17.200 IBC believes triggered automated buying helped fuel yesterday's turnaround, but 0:02:17.240 --> 0:02:20.400 the turnaround maybe short lived. Nathan Bank of America says 0:02:20.400 --> 0:02:23.200 stock markets in the US economy will have to experience 0:02:23.320 --> 0:02:26.519 more pain before the Fed pivots away from aggressive policy. 0:02:26.760 --> 0:02:29.280 Strategist at the Bank's sake quote, it was a decent 0:02:29.360 --> 0:02:32.680 counter rally, but Low's won't be reached until next year. 0:02:32.800 --> 0:02:35.600 They say more economic and market pain will be necessary 0:02:35.639 --> 0:02:38.240 before the Fed backs down. Well, Karen, the White House 0:02:38.280 --> 0:02:41.600 was grasping for upside after yesterday's inflation report that's core 0:02:41.680 --> 0:02:45.639 CPI rise to a forty year high. President Biden discussed 0:02:45.639 --> 0:02:49.200 the reading with reporters in Los Angeles. Americans are squeezed 0:02:49.240 --> 0:02:51.639 by the cost of living. It's been true for years, 0:02:51.639 --> 0:02:53.880 and folks don't need to be a report to fell 0:02:53.919 --> 0:02:56.480 them and be a squeeze. Fighting this battle every day 0:02:56.560 --> 0:02:59.600 is the key reason why I ran for president United States. However, 0:02:59.680 --> 0:03:02.440 President and Inviiden did note overall inflation was just two 0:03:02.440 --> 0:03:04.839 percent over the last three months. He said, quote that's 0:03:04.880 --> 0:03:07.960 down from eleven percent over the prior three months. Well 0:03:08.000 --> 0:03:10.560 over the weekend, Nathan the President conceded that a slight 0:03:10.639 --> 0:03:14.680 recession is possible, but one administration official notes that it's 0:03:14.840 --> 0:03:18.560 not inevitable. We spoke to US Commerce Secretary Gina Ramondo. 0:03:19.000 --> 0:03:21.720 I talked to CEOs of the biggest companies and the 0:03:21.760 --> 0:03:26.840 smallest companies every day in every industry. Yes, they're anxious. 0:03:26.880 --> 0:03:31.519 Global markets are unstable. The war in Ukraine obviously makes 0:03:31.600 --> 0:03:35.960 everything unstable. But they're also telling me customers are buying. 0:03:36.080 --> 0:03:40.680 Consumers are buying, they are still hiring, American companies are innovating. 0:03:41.000 --> 0:03:43.960 Commerce Secretary Gena Raimondo made the comments and an interview 0:03:43.960 --> 0:03:47.720 on Bloomberg Radio and television. Catch the full conversation online 0:03:47.760 --> 0:03:50.560 at Bloomberg dot com. No one of those CEOs does 0:03:50.600 --> 0:03:52.680 appear to have a more tepid outlook on the economy. 0:03:52.760 --> 0:03:56.800 Karen JP Morgan Chase CEO Jamie Diamond discussed inflation and 0:03:56.840 --> 0:03:59.400 the FED at a conference in Washington yesterday. I don't 0:03:59.400 --> 0:04:01.720 know if he could be a soft landing. I don't 0:04:01.760 --> 0:04:05.520 think so. But in my mild recession or tough recession. 0:04:06.360 --> 0:04:09.840 My point in the tough recession, yeah, you expect the market. 0:04:10.520 --> 0:04:13.200 I'm not gonna keep eyes across those three things. But 0:04:13.760 --> 0:04:15.560 for all of us who have to worry about risk, you, 0:04:15.680 --> 0:04:17.919 of course you should plant for those things. Jamie Diamond 0:04:17.960 --> 0:04:20.240 says his gut tells him the Federal Reserve will have 0:04:20.279 --> 0:04:22.520 to raise rates higher than four and a half percent 0:04:22.560 --> 0:04:25.760 in order to detain inflation. Well. Nathan Diamond's bank is 0:04:25.800 --> 0:04:28.719 among several schedule to kick off earning season today, and 0:04:28.760 --> 0:04:32.080 we get a preview from Bloomberg's Jeff Bellinger. By the 0:04:32.120 --> 0:04:34.919 time the markets opened this morning, investors will have heard 0:04:34.920 --> 0:04:38.840 from JP Morgan, Chase, City Group, Morgan Stanley, and Wells Fargo. 0:04:39.160 --> 0:04:42.480 Investors will be interested in the results from the last quarter, 0:04:42.600 --> 0:04:45.120 but they'll likely be even more interested to hear what 0:04:45.200 --> 0:04:49.480 banking executives expect going forward. Bloomberg says the big banks 0:04:49.480 --> 0:04:52.679 will announce they're setting aside billions of dollars to protect 0:04:52.720 --> 0:04:56.480 against expected loan losses as growing numbers of customers get 0:04:56.520 --> 0:05:00.279 squeezed by inflation and high interest rates. Jeff well Inger, 0:05:00.440 --> 0:05:03.720 Bloomberg Daybreak, Thanks Jeff. We also get more economic data 0:05:03.839 --> 0:05:07.200 this morning in the form of retail sales and consumer sentiment, 0:05:07.360 --> 0:05:09.880 with more on that is Bloomberg's Inney del Judais. The 0:05:09.920 --> 0:05:13.840 prior report covering August showed US retail sales rebounded from 0:05:13.839 --> 0:05:17.320 the July slump. Bloomberg Economics as today's data will most 0:05:17.360 --> 0:05:20.880 likely indicates spending on consumer goods move toward pre pandemic 0:05:21.000 --> 0:05:25.480 levels in September. That's taking inflation into account. Also today, 0:05:25.520 --> 0:05:28.720 the University of Michigan issues it's US consumer Sentiment and 0:05:28.880 --> 0:05:33.200 next for early October, and Bloomberg Economics anticipates another sluggish reading. 0:05:33.560 --> 0:05:36.320 The sentiment index set a record low earlier in the year. 0:05:36.560 --> 0:05:39.400 We eat Dealt Judas Bloomberg daybreak right, Benny, thank you. 0:05:39.440 --> 0:05:42.359 In Europe this morning, speculation is growing the UK government 0:05:42.400 --> 0:05:45.360 will abandon its plans for massive tax cuts. And let's 0:05:45.360 --> 0:05:47.560 go live to London and get the latest from Bloomberg's 0:05:47.640 --> 0:05:51.320 James Wilcock, Good morning, James, Good morning Kowen. Nathan Decas 0:05:51.360 --> 0:05:54.240 Chancellor quasi class said to London, London in the next hour, 0:05:54.600 --> 0:05:57.440 un especially cut in short his trip to Washington, UK 0:05:57.520 --> 0:05:59.400 ask that's the stage a comeback on the news. It's 0:05:59.400 --> 0:06:01.440 try to act a youth sound is down the right. 0:06:01.720 --> 0:06:04.039 The yield Antenia bonds pledged to be a full presentment 0:06:04.040 --> 0:06:05.719 of the market opens and it all comes as the 0:06:05.720 --> 0:06:08.640 Bank of England to rap up their emergency bond buying program. 0:06:08.760 --> 0:06:12.080 Late today in London, James Wilcock, Bloomberg day Break, James, 0:06:12.080 --> 0:06:14.120 thank you, And in Corporate News this morning, lawyers for 0:06:14.160 --> 0:06:17.680 Twitter say Elon Musk is being investigated by authorities over 0:06:17.760 --> 0:06:20.280 his attempt to take Twitter private. We get the details 0:06:20.279 --> 0:06:23.680 from Bloomberg's Doug Prisoner. In April, the SEC sent a 0:06:23.760 --> 0:06:26.880 query to Musk over how he initially disclosed his nine 0:06:26.880 --> 0:06:29.680 percent stake in Twitter. He did so a week later 0:06:29.760 --> 0:06:33.280 than regulations allow, and he used a filing typically reserved 0:06:33.320 --> 0:06:37.120 for passive investors. Then in June, the SEC wanted information 0:06:37.160 --> 0:06:40.240 on Musk tweeting the deal cannot move forward until he 0:06:40.279 --> 0:06:44.120 was given more information about spam and fraudulent accounts. Now 0:06:44.160 --> 0:06:47.240 in a court filing in Delaware, Twitter's lawyers say Musk 0:06:47.320 --> 0:06:51.960 has exchanged substantive correspondence with federal authorities as they look 0:06:52.000 --> 0:06:54.919 into his conduct, and they say, this game of hide 0:06:54.920 --> 0:06:57.400 the ball must end. In New York, I'm Doug Prisner, 0:06:57.440 --> 0:07:00.240 Bloomberg day Break, Right, thank you, and Bloomberg Gay Break 0:07:00.320 --> 0:07:03.040 is brought to you by SEI. Acid managers don't get 0:07:03.120 --> 0:07:05.320 results that are off the charts when their solutions are 0:07:05.360 --> 0:07:08.400 off the shelf. Learn how SEI is operating platform canern 0:07:08.480 --> 0:07:12.240 infrastructure into a competitive advantage at se i C dot com, 0:07:12.360 --> 0:07:15.440 slash Tech Straight to head, your latest local headlines, plus 0:07:15.440 --> 0:07:23.720 a check of sports, and this is Bloomberg. All right, Karen, 0:07:23.760 --> 0:07:25.680 thanks a lot. It is five oh seven on Wall 0:07:25.680 --> 0:07:28.160 Street where fifty three degrees in Central Park and dealing 0:07:28.160 --> 0:07:31.320 with an accident in Queen's westbound Jackie Robinson Parkway at 0:07:31.360 --> 0:07:35.040 Metropolitan Avenue. Details coming up in traffic. First Michael Barr 0:07:35.080 --> 0:07:36.880 with more on what's going on in New York and 0:07:36.960 --> 0:07:40.480 around the world. Happy Friday, Michael, Happy Friday to you, Nathan. 0:07:40.600 --> 0:07:44.520 The final January six Committee hearing's theme was that Donald 0:07:44.520 --> 0:07:47.760 Trump began the plan to stay in office as early 0:07:47.800 --> 0:07:52.240 as July Bloomberg, said Baxter, as the story to remain 0:07:52.440 --> 0:07:55.160 no matter what the vote showed in November. Coach are 0:07:55.240 --> 0:07:58.720 List Cheney says, what's left we must seek the testimony 0:07:58.920 --> 0:08:03.880 under oath of January six Central player Donald Trump, followed 0:08:03.880 --> 0:08:07.120 by a unanimous vote to subpoena from the committee. Meanwhile, 0:08:07.120 --> 0:08:09.600 the Supreme Court has refused to get involved in Trump's 0:08:09.600 --> 0:08:13.640 request to return seized documents from our lago. It also 0:08:13.680 --> 0:08:17.440 refused to reinstate a special master. A major victory for 0:08:17.560 --> 0:08:20.920 the Department of Justice in San Francisco. I'm at Baxter, 0:08:20.920 --> 0:08:26.119 Bloomberg Daybreak ed Baxter. Connecticut Governor Need Lamont has ordered 0:08:26.120 --> 0:08:28.840 flags flown at half staff in the state after three 0:08:28.880 --> 0:08:31.760 officers were shot in the line of duty in Bristol. 0:08:32.120 --> 0:08:36.160 Two of the officers are dead. Governor Lamont said there 0:08:36.200 --> 0:08:39.560 are too many illegal guns and not enough cops on 0:08:39.600 --> 0:08:44.000 the streets. I hope when you see your policeman woman 0:08:44.320 --> 0:08:45.880 on the street corner, you go up and say thank 0:08:45.920 --> 0:08:47.719 you for what you do. I hope you show a 0:08:47.760 --> 0:08:51.880 little respect for the folks that are there. Governor Lamont. 0:08:52.160 --> 0:08:54.480 State Police said in a release that the nine one 0:08:54.640 --> 0:08:57.880 one call Wednesday night about the dispute between two siblings 0:08:58.200 --> 0:09:01.000 appears to have been a deliberate act lower law enforcement 0:09:01.080 --> 0:09:04.800 to the scene in Bristol. In North Carolina, Raleigh police 0:09:04.840 --> 0:09:08.160 say a male juvenile is in custody hours after a 0:09:08.240 --> 0:09:11.080 mass shooting that left five people dead, including an off 0:09:11.160 --> 0:09:15.320 duty police officer, in the neighborhood. Raleigh Mayor Maryanne Baldwin 0:09:15.400 --> 0:09:18.480 praise the responding officers, saying they put their lives at 0:09:18.480 --> 0:09:21.840 a risk to protect the city. You know, you pray 0:09:21.960 --> 0:09:25.960 that something like this will never happen here. It did, 0:09:26.840 --> 0:09:31.040 and I want to thank all the officers who responded 0:09:31.400 --> 0:09:34.920 in the way they did. Raleigh Mayor Baldwin. Police say 0:09:34.960 --> 0:09:37.800 there is no word on a motive. North Korea has 0:09:37.800 --> 0:09:40.960 fired yet another ballistic missile. This launch came as North 0:09:41.040 --> 0:09:44.520 Korea also flew war planes near the border with South Korea. 0:09:45.080 --> 0:09:47.520 Global News twenty four hours a day on air and 0:09:47.679 --> 0:09:52.079 on Bloomberg Quicktake, powered by more than journalists and analyst 0:09:52.160 --> 0:09:56.200 more than a hundred twenty countries. Michael Varren, this is Bloomberg, Nathan. 0:09:56.200 --> 0:10:02.920 Thanks Michael five o nine on Wall Street. Time for 0:10:02.920 --> 0:10:05.480 the Bloomberg Sports Update. Good morning, John Stashow, All right, 0:10:05.520 --> 0:10:08.640 good morning, Nathan. Yankees and Guardians. Two days off between 0:10:08.679 --> 0:10:10.720 games one and two, but set to go one o'clock 0:10:10.760 --> 0:10:13.360 at the stadium, so unless there's another rain out, no 0:10:13.520 --> 0:10:16.200 more days off. The rain was expected and Aaron Bruin 0:10:16.320 --> 0:10:19.160 was asked before and the effect of a postponement, and 0:10:19.200 --> 0:10:21.559 it would probably affect the pitching rotation if you went 0:10:21.720 --> 0:10:24.320 five games and you had to play four in a row. Sure, 0:10:25.040 --> 0:10:30.280 Um the lineup, No, I mean we play, that's what 0:10:30.360 --> 0:10:32.640 you do is in baseball as you play every day, 0:10:32.679 --> 0:10:37.680 So shouldn't affect that. Um, you know, that's more who 0:10:37.679 --> 0:10:40.640 we're going up against, matchups things like that. Today starts, 0:10:40.720 --> 0:10:43.840 yes the court Shane Bieber for Cleveland. Houston's up to nothing. 0:10:43.880 --> 0:10:45.760 In the other a l d S, the Astros had 0:10:45.760 --> 0:10:47.800 their slugger You're Don Alvarez to fact you get the 0:10:47.800 --> 0:10:50.240 game winning three run over in game one, he hit 0:10:50.280 --> 0:10:52.560 the go ahead two run shots six, inning the game 0:10:52.600 --> 0:10:55.760 to a four two Astros win over Seattle two game threes. 0:10:55.840 --> 0:10:58.600 Today tonight in the n LDS, both series tied to one. 0:10:58.640 --> 0:11:02.480 Week six underway in Chicago, Washington won twelve to seven 0:11:02.559 --> 0:11:05.360 and to four game losings. The only Commander's touchdown scored 0:11:05.360 --> 0:11:08.200 by rookie running back Brian Robinson, who has made a 0:11:08.240 --> 0:11:11.280 remarkable comeback. In August, he was shot twice in the 0:11:11.440 --> 0:11:14.840 leg in attempted robbery in DC. Jetson Giants looked to 0:11:14.880 --> 0:11:17.040 keep their winning ways going Sunday to Jets visit Green 0:11:17.080 --> 0:11:20.520 Bay Giants home for Baltimore and the Giants punter is 0:11:20.600 --> 0:11:24.120 back home safety. The native Scott Jamie Gillen was unable 0:11:24.160 --> 0:11:26.480 to fly home with the team do a visa issue. 0:11:26.960 --> 0:11:30.400 He was staying at an airbnb in London. Rangers already 0:11:30.400 --> 0:11:32.800 two and oh they wont seven three at Minnesota. Chris Cryer, 0:11:32.840 --> 0:11:34.840 the big season last year, scored his first two of 0:11:34.840 --> 0:11:37.600 the year, the first and last Ranger goals Islander season 0:11:37.640 --> 0:11:40.280 opener three one Home lost the Floorida. The Devil's lost 0:11:40.320 --> 0:11:44.680 five to a Philadelphia John Stashward, Bloomberg Sports, Nathan all Right, John, 0:11:44.720 --> 0:11:48.000 thank you. SMP. Futures are moving lower down thirteen points down. 0:11:48.080 --> 0:11:51.679 Futures down, nastack. Futures down sixty two points ten. Your 0:11:51.720 --> 0:11:55.880 treasuries up six thirty seconds yield three point nine one percent. 0:11:56.120 --> 0:11:59.920 As we await bank earnings this morning, we'll get a 0:12:00.000 --> 0:12:07.920 preview next with Bloomberg. Shinali Bassk. This is Bloomberg, Bloomberg 0:12:07.920 --> 0:12:10.080 eleven three oh. Weather. Rain will end this morning, It'll 0:12:10.120 --> 0:12:13.360 turn clear this afternoon. Upper sixties for highs sunny near 0:12:13.400 --> 0:12:16.960 seventy Tomorrow, partly sunny, upper sixties for Sunday. Right now, 0:12:17.000 --> 0:12:23.440 Claudie in fifty three in Central Park Markets, Headlines and 0:12:23.559 --> 0:12:26.840 breaking news twenty four hours a day at Bloomberg dot Com, 0:12:26.960 --> 0:12:30.559 the Bloomberg Business atand at Bloomberg Quicktape. This is a 0:12:30.600 --> 0:12:39.640 Bloomberg Business Flash and I'm Karen Moscow. And US dot 0:12:39.720 --> 0:12:44.440 Index futures are moving lower this morning, while equities in 0:12:44.480 --> 0:12:47.480 Europe are extending a rebound that saw US stocks were 0:12:47.559 --> 0:12:50.760 back from losses sparked by a hot inflation rating. We 0:12:50.880 --> 0:12:53.320 checked the markets every fifteen minutes throughout the trading day 0:12:53.400 --> 0:12:56.640 on Bloomberg, and P futures are down twelve points down, 0:12:56.679 --> 0:12:59.560 Future is down eighty five. Nowesdays futures down fifty eight. 0:12:59.559 --> 0:13:02.200 The Daks in Germany up six tents of a percent. 0:13:02.440 --> 0:13:04.880 Ten your treasury at five thirty seconds, you're three point 0:13:04.960 --> 0:13:06.800 nine two f cent. The yield on the two year 0:13:06.920 --> 0:13:10.080 four point four three percent. Nine X Screwed oil is 0:13:10.120 --> 0:13:12.480 down half percent or forty four cents at eighty eight 0:13:12.480 --> 0:13:15.439 dollars sixty seven cents of barrel comes goaled down three 0:13:15.520 --> 0:13:17.920 quarters of a percent or twelve dollars forty cents at 0:13:17.960 --> 0:13:21.080 sixty and sixty four sixty an ounce. The euro point 0:13:21.200 --> 0:13:23.840 nine seven four four against the dollar. British found one 0:13:23.840 --> 0:13:26.440 point one two seven zero and the end one forty 0:13:26.480 --> 0:13:29.560 seven point six eight and Bitcoin this morning is at 0:13:29.559 --> 0:13:33.120 one point one percent and nineteen thousand, six hundred dollars. 0:13:33.120 --> 0:13:34.920 It is a busy day for earnings a big Wall 0:13:34.920 --> 0:13:38.040 Street banks reporting including JP, Morgan Chase, and City Group. 0:13:38.280 --> 0:13:40.720 He also get a report on September retail sales at 0:13:40.760 --> 0:13:43.640 eight thirty Wall Street Time as a Bloomberg Business Flash. 0:13:43.720 --> 0:13:45.880 Now here's Michael Barr with more on what's going on 0:13:45.960 --> 0:13:48.560 around the world. Munchael, Good morning, Good morning, Karen. The 0:13:48.640 --> 0:13:52.640 House January six Committee voted unanimously to subpoena former President 0:13:52.640 --> 0:13:56.680 Donald Trump for his testimony about the one Capital attack. 0:13:57.160 --> 0:13:59.920 Earlier in the hearing, the panel presented new video of 0:14:00.000 --> 0:14:03.559 final speaker Nancy Pelosi and other congressional leaders pleading for help. 0:14:04.080 --> 0:14:09.000 It also outlined Trump's multipart plan to overturn his election loss. 0:14:09.440 --> 0:14:13.840 President Joe Biden again criticized high US gas prices and 0:14:13.920 --> 0:14:17.720 said he'd announced new actions to combat what he described 0:14:17.800 --> 0:14:21.160 as a key driver of inflation. In baseball, the Yankees 0:14:21.200 --> 0:14:23.520 will play the Guardians in Game two of the a 0:14:23.760 --> 0:14:27.720 LDS after last night's rain out. The Astros lead two 0:14:27.720 --> 0:14:30.640 games to zip over the Mariners in their a lbs 0:14:30.720 --> 0:14:33.480 after last night's four to win. In the NHL, the 0:14:33.560 --> 0:14:37.880 Rangers won, the Devil's Islanders and Capitals all lost. Thursday 0:14:37.960 --> 0:14:40.640 night football, the Commanders beat the Bears in an action 0:14:40.720 --> 0:14:45.000 back game twelve seven Sorry too soon. Global News twenty 0:14:45.000 --> 0:14:48.280 four hours a day on airand on Bloomberg Quick Take 0:14:48.320 --> 0:14:52.040 Forward by more than journalists analysts more than twenty countries. 0:14:52.240 --> 0:14:54.560 I'm Michael bar this is Bloomberg NA. If you love 0:14:54.640 --> 0:14:57.760 defense Man, what a game. Thank you, Michael. We're coming 0:14:57.840 --> 0:14:59.720 up to five twenty on Wall Street Live from the 0:14:59.720 --> 0:15:03.520 Blue Brig Interactive Broker Studios. This is Bloomberg Daybreak, and 0:15:03.600 --> 0:15:06.400 Karen said it, this is a busy day for bank earnings. 0:15:06.400 --> 0:15:08.800 We're gonna hear from four of the big six Wall 0:15:08.880 --> 0:15:11.720 Street firms and starting in just a couple of hours 0:15:11.800 --> 0:15:15.800 here Bloomberg Global Finance correspondent Shannelly Bassic's been up all 0:15:15.920 --> 0:15:19.080 night getting ready for these earnings. I'm sure joining us 0:15:19.160 --> 0:15:22.920 live this morning. So we got JP Morrigan, Wells, Fargo, Morgan, 0:15:23.040 --> 0:15:27.080 Stanley City Group all opening their books this morning, Shanally. 0:15:27.160 --> 0:15:30.240 And we've already heard from JP Morgan's Jamie Diamond doubling 0:15:30.280 --> 0:15:33.240 down on The idea that a recession is coming makes 0:15:33.240 --> 0:15:36.280 you wonder how much these banks are preparing for this 0:15:36.640 --> 0:15:38.200 and whether we're going to see it play out in 0:15:38.200 --> 0:15:40.240 the earnings. It's true because you have two things going 0:15:40.240 --> 0:15:43.040 on at the same time. One Wall Street is expecting 0:15:43.080 --> 0:15:45.600 these banks to start provisioning at a greater rate for 0:15:45.720 --> 0:15:48.760 loan losses as they expect the economy to get worse. 0:15:48.920 --> 0:15:51.480 The question is how much are they factoring in now 0:15:51.520 --> 0:15:54.440 at the end of the third quarter into the fourth quarter. 0:15:54.920 --> 0:15:56.280 Is it going to get worse from here? Are they're 0:15:56.280 --> 0:15:58.960 going to need to add more provisions as time goes on. 0:15:59.200 --> 0:16:01.120 The other thing about it is Jamie Diamond, and you 0:16:01.200 --> 0:16:04.000 heard him talk about this a lot, having to really 0:16:04.320 --> 0:16:08.840 uh boost their regulatory burdens here and how old more 0:16:08.880 --> 0:16:11.280 capital due to to do to rules that he feels 0:16:11.520 --> 0:16:14.560 is arbitrary here. That from him a lot. But you know, 0:16:14.960 --> 0:16:18.520 the issue here is are the bank's gonna constrain lending 0:16:18.920 --> 0:16:21.080 in the face of higher interest rates. It's a double 0:16:21.200 --> 0:16:23.600 edged sword here they're really facing. And I mean that's 0:16:23.640 --> 0:16:25.520 the story that we've been seeing over the last few 0:16:25.600 --> 0:16:27.760 quarters here coming out of the pandemic. This idea of 0:16:27.760 --> 0:16:30.280 provisioning for loan losses. The banks have been doing it 0:16:30.360 --> 0:16:34.360 for months now. We've seen the stocks get hammered throughout 0:16:34.480 --> 0:16:37.000 this year. I mean, how much more loan provision can 0:16:37.040 --> 0:16:39.920 they do? Is there a possibility that we could see 0:16:40.000 --> 0:16:41.960 some kind of surprise when it comes to that? We 0:16:42.080 --> 0:16:44.520 sure can. Right now the street is expecting one point 0:16:44.520 --> 0:16:46.960 two billion dollars worth of provisions over at JP Morten. 0:16:47.240 --> 0:16:49.160 The other thing I would watch for is if charge 0:16:49.160 --> 0:16:53.400 offs start to rise and loan quality therefore starts to deteriorate. 0:16:53.600 --> 0:16:56.480 People are worried about credit cards, for example, but I 0:16:56.480 --> 0:16:58.160 say in the face of higher interest rates, because the 0:16:58.160 --> 0:17:00.680 banks want to be lending right now because they're making 0:17:00.680 --> 0:17:04.960 more money from doing so. However, they are worried about consumers. 0:17:04.960 --> 0:17:08.120 They are worried about credit quality, and are we going 0:17:08.160 --> 0:17:11.040 to hear a little bit more of that? Well not. 0:17:11.080 --> 0:17:14.159 Another thing Jamie Diamond said yesterday in Washington at the 0:17:14.160 --> 0:17:17.560 International Institute of Finance was that consumers are fine now, 0:17:17.640 --> 0:17:19.119 but there could be a bit of a six and 0:17:19.200 --> 0:17:22.480 nine month lag here in terms of that total inflation 0:17:22.520 --> 0:17:24.919 impact on their wallet. Yeah, it's been kind of a 0:17:25.000 --> 0:17:27.600 mixed picture, hasn't it. When it comes to the consumer. 0:17:27.640 --> 0:17:29.879 You mentioned Jamie Diamond's comments. I know we're not going 0:17:29.880 --> 0:17:32.360 to hear from Bank of America until Monday, but we've 0:17:32.400 --> 0:17:35.720 also heard from the CEO there, Brian moynihan, saying that 0:17:35.760 --> 0:17:38.760 the consumer for the most part, is remaining resilient through this. 0:17:39.040 --> 0:17:42.080 Where do you expect some of that consumer lending story 0:17:42.200 --> 0:17:44.840 to particularly play out in the results we get today. 0:17:44.960 --> 0:17:47.280 There's gonna be a huge focus on mortgages, and that 0:17:47.359 --> 0:17:50.280 has been the case. The other question is consumers are 0:17:50.359 --> 0:17:53.800 not feeling higher savings rates very meaningfully, so are the 0:17:53.840 --> 0:17:56.480 banks going to start doing that? And now that rates 0:17:56.480 --> 0:17:58.399 are higher? I would also say that a lot of 0:17:58.400 --> 0:18:01.160 the stress is not even even us on the consumer side. 0:18:01.400 --> 0:18:06.040 It's also on the side of large investors in large corporations. 0:18:06.320 --> 0:18:08.600 People are worried about credit spreads and where they go 0:18:08.720 --> 0:18:11.600 from here. People are also worried about markdowns tied to 0:18:11.720 --> 0:18:15.159 leverage loans. There's already been about two billion dollars of 0:18:15.200 --> 0:18:18.600 markdowns globally after the second quarter, but things have gotten 0:18:18.640 --> 0:18:21.240 worse since then, and there's some large deals the banks 0:18:21.280 --> 0:18:24.680 have to contend with Twitter, Citrix, Nielsen where they might 0:18:24.720 --> 0:18:27.560 have to mark down hundreds of millions more. Where do 0:18:27.600 --> 0:18:29.280 you think things are going to play out when it 0:18:29.280 --> 0:18:32.720 comes to the trading desks. There's been so much volatility 0:18:32.800 --> 0:18:35.560 in this market. I mean we saw it just yesterday 0:18:35.640 --> 0:18:38.320 and could the trading desks kind of come to the rescue. Well, 0:18:38.359 --> 0:18:41.400 that's been the case most of last year into this year, 0:18:41.400 --> 0:18:44.400 and even during the pandemic as an activity really boosted 0:18:44.400 --> 0:18:47.880 in terms of underwriting and new issue and really fixed 0:18:47.920 --> 0:18:51.320 income trading and currencies and commodities also held up. But 0:18:51.400 --> 0:18:54.400 now they're clients, The bank's clients are under a lot 0:18:54.880 --> 0:18:58.720 more pressure, and you don't see that same try to 0:18:58.800 --> 0:19:02.920 it's kind of trading tailwind that they had just over 0:19:02.960 --> 0:19:06.920 the last several months. Really it's already started to wane, 0:19:07.000 --> 0:19:10.040 and there's an expectation that it starts to have more 0:19:10.280 --> 0:19:12.720 fractures in it as you see even parts of the 0:19:12.760 --> 0:19:16.280 more healthy businesses come under pressure. If mortgages in the 0:19:16.280 --> 0:19:20.119 real economy are under pressure, and there's more problems in 0:19:20.200 --> 0:19:22.960 that market. Frankly, the trading of mortgages is also a 0:19:23.040 --> 0:19:25.920 question mark. Lots to pass through as we get ready 0:19:25.960 --> 0:19:29.280 for those earnings starting with JP Morgan and Wells Fargo 0:19:29.359 --> 0:19:32.119 do out around seven am Wall Street time, then Morgan 0:19:32.200 --> 0:19:36.199 Stanley follows and City Group for the Big Six getting 0:19:36.200 --> 0:19:39.480 earning season kicking off here on Wall Street. Bloomberg Global 0:19:39.520 --> 0:19:43.200 Finance correspondent Shinelli Bask, thanks for being here this morning 0:19:43.240 --> 0:19:47.040 as we await those results. Looking ahead to the market, 0:19:47.080 --> 0:19:49.920 open futures are moving a bit lower. SMP futures down 0:19:49.920 --> 0:19:53.040 ten points, STAFF futures down sixty nine, NASTAC futures are 0:19:53.080 --> 0:19:56.399 lower by fifty four points ten. Your treasury is up 0:19:56.440 --> 0:20:00.360 six thirty seconds, the yield three point nine one. You're 0:20:00.400 --> 0:20:08.959 listening to Bloomberg Daybreak Bloomberg eleven three oh. Weather clearing 0:20:09.000 --> 0:20:11.959 this afternoon. We'll get up to the upper sixties, sunny 0:20:11.960 --> 0:20:14.359 near seventy tomorrow. By Sunday will be in the upper 0:20:14.400 --> 0:20:17.960 sixties once again under a partney sunny sky. Current semperature 0:20:18.000 --> 0:20:23.760 in Central Park fifty three degrees. Broadcasting live from the 0:20:23.880 --> 0:20:27.800 Bloomberg Interacted Broker Studio in New York. Bloomberg E Living 0:20:27.880 --> 0:20:32.480 Freedom to Washington, d C, Bloomberg to Boston, Bloomberg one 0:20:32.480 --> 0:20:35.439 All six one to San Francisco Bloomberg and M sixty 0:20:35.600 --> 0:20:38.359 to the Country Sirius XM Chado one nine tea and 0:20:38.480 --> 0:20:41.840 around the globe, the Bloomberg Business APT and Bloomberg Radio 0:20:41.960 --> 0:20:51.399 dot Com. This is Bloomberg Daybreak. It's five thirty on 0:20:51.440 --> 0:20:54.720 Wall Street. Good morning. I'm Nathan Hagar and I'm Karen Moscow. 0:20:54.800 --> 0:20:57.000 Were just about four hours away from the open of 0:20:57.119 --> 0:20:59.080 US trading. Let's get you up to date on the news. 0:20:59.080 --> 0:21:00.879 You need to know what this sour. We enter the 0:21:00.920 --> 0:21:03.720 week's final trading session coming off a volatile day. The 0:21:03.920 --> 0:21:06.960 S and P fell two point four percent after yesterday's 0:21:07.000 --> 0:21:10.400 CPI reading, only to close up two point six percent. 0:21:10.760 --> 0:21:14.439 Data going back to has never seen such extreme readings 0:21:14.440 --> 0:21:17.640 in both directions in a single day. Lori Calvacino's head 0:21:17.640 --> 0:21:21.040 of US equity strategy at RBC Capital Markets, you have 0:21:21.119 --> 0:21:23.679 to really look stock by stocks, sector by sector, different 0:21:23.680 --> 0:21:25.440 parts of the market, figure out where you think most 0:21:25.440 --> 0:21:27.320 of the bad news is baked and where you want 0:21:27.320 --> 0:21:29.240 to be for the longer term, and start layering in 0:21:29.400 --> 0:21:31.560 and it may go down more before it goes back up. 0:21:31.840 --> 0:21:34.880 Lori Calvasino with RBC says we likely have not seen 0:21:34.920 --> 0:21:37.800 a bottom yet. She expects volatility to continue as the 0:21:37.840 --> 0:21:41.879 FED keeps hiking rates and yesterday's turnaround maybe short lived, Karen. 0:21:41.920 --> 0:21:44.520 That's according to the Bank of America. The firm strategists 0:21:44.560 --> 0:21:46.840 say stock markets and the US economy will have to 0:21:46.880 --> 0:21:51.120 experience more pain before the Fed pivots away from aggressive tightening. 0:21:51.359 --> 0:21:54.200 They don't expect the bottom until next year. The White House, 0:21:54.280 --> 0:21:58.200