WEBVTT - Bloomberg Daybreak: August 19, 2022 - Hour 1 (Radio) 0:00:03.040 --> 0:00:06.400 Live from the Bloomberg Interactive Burgers Studios. This is Bloomberg 0:00:06.519 --> 0:00:10.400 day Break for Friday, August nine two. Coming up this hour, 0:00:10.680 --> 0:00:14.360 Beneficials sent mixed signals on September rate heights. A new 0:00:14.440 --> 0:00:17.680 survey finds companies across the country are preparing for layoffs 0:00:17.720 --> 0:00:21.640 at Amazon reportedly scrapping its COVID leave policy. And we 0:00:21.680 --> 0:00:24.479 get more earnings today with John Deere set to record. 0:00:25.000 --> 0:00:27.440 New York City cracks down on the band in outdoor 0:00:27.560 --> 0:00:30.840 dining sheds. Plus the UN calls any military action at 0:00:30.840 --> 0:00:35.240 a Ukrainian nuclear power plants suicide. I'm Michael Blogger. More ahead, 0:00:35.880 --> 0:00:38.159 I'm John stad Shower and sports. The Yankees suffer at 0:00:38.159 --> 0:00:40.559 a one sided loss to the Blue Jays. The Braves 0:00:40.600 --> 0:00:45.200 beat Jacob de gramin the Mets. That's all s training 0:00:45.240 --> 0:00:48.600 ahead on Bloomberg day Break on Bloomberg eleven three on 0:00:48.720 --> 0:00:53.120 New York, Bloomberg on Washington, d C, Bloomberg one oh 0:00:53.200 --> 0:00:57.720 six one, Boston, Bloomberg nine sixties and Francisco Syrius x 0:00:57.880 --> 0:01:01.080 M one nineteen and around the world on Bloomberg Radio 0:01:01.200 --> 0:01:07.759 dot Com and via the Bloomberg Business App. Good morning, 0:01:07.760 --> 0:01:10.679 I'm John Tucker and I'm Karen Moscow and US DOT 0:01:10.720 --> 0:01:14.360 Index futures are lower this morning. We're coming up to 0:01:14.400 --> 0:01:15.920 five oh one on Wall Street, and we check the 0:01:15.959 --> 0:01:19.000 markets every fifteen minutes throughout the trading day. On Bloomberg 0:01:19.080 --> 0:01:21.680 right now, SNP futures are down thirty two points, in 0:01:21.760 --> 0:01:24.320 DOWN futures down a hundred ninety four and NASDACK futures 0:01:24.319 --> 0:01:27.720 down one twenty seven. The decks same. Germany is down 0:01:27.760 --> 0:01:31.480 eight tenth seven percent, ten year treasury down eleven thirty seconds, 0:01:31.560 --> 0:01:34.000 YE two point nine and two percent, and they yield 0:01:34.000 --> 0:01:36.319 on the two year three point to four per cent, 0:01:36.840 --> 0:01:40.160 and Nimex Screwed oil is down one three percent, down 0:01:40.200 --> 0:01:42.399 a dollar twenty two at eighty nine dollars twenty eight 0:01:42.400 --> 0:01:45.560 cents of barrel. John and Karen markets this morning. Reacting 0:01:45.560 --> 0:01:48.800 to mix signals from Fed officials. St. Louis FED Governor 0:01:48.880 --> 0:01:52.520 Jim Bullard is leaning hawk ish, urging a seventy bases 0:01:52.520 --> 0:01:55.720 point move in September, while the Kansas City's Esther George 0:01:55.760 --> 0:01:59.080 is sounding more cautious. San Francisco's Mary Daily is open 0:01:59.120 --> 0:02:02.000 to fifty or have any five basis points and many 0:02:02.080 --> 0:02:05.880 Appolis chief Neil Cush Kari says the Central Bank remains 0:02:06.000 --> 0:02:09.960 laser focused on combating inflation. Good question right now is 0:02:10.400 --> 0:02:14.600 can we bring inflation down without triggering a recession? And 0:02:14.720 --> 0:02:17.639 my answer that question is I don't know. Neil cash 0:02:17.680 --> 0:02:20.040 carry making the comments a day after the release of 0:02:20.120 --> 0:02:24.679 July's Fed Minutes, where showed officials wing exactly when to 0:02:24.800 --> 0:02:28.680 slow the pace of rate hikes, lowering inflation and avoiding 0:02:28.680 --> 0:02:31.480 a recession as the best case scenario for the Federal Reserve. 0:02:31.600 --> 0:02:34.920 John with prices already read hot, Former FED Governor Randy 0:02:34.960 --> 0:02:37.919 Krosner said the Central Bank will be lucky to meet 0:02:37.919 --> 0:02:42.080 their inflation target. It's very difficult to know exactly where 0:02:42.120 --> 0:02:44.160 you are because, as I said, the data always coming 0:02:44.240 --> 0:02:45.600 with a lag, and there could be a lot of 0:02:45.600 --> 0:02:48.560 shocks that come in. So I'm sure they're not going 0:02:48.600 --> 0:02:50.480 to get it exactly right. I think if they're going 0:02:50.520 --> 0:02:53.120 to make a mistake, it's going to be on tightening 0:02:53.120 --> 0:02:56.200 a little bit too much. And former Fed Governor Randy 0:02:56.280 --> 0:02:59.200 Krosner made the comments on Bloomberry's Balance of Power. Catch 0:02:59.240 --> 0:03:01.600 the program Weak It is at noon Eastern on Bloomberg 0:03:01.680 --> 0:03:04.880 Radio and Television. Let's look at the action overseas stocks 0:03:04.880 --> 0:03:07.240 in the Asia fell over nine to post a weekly decline. 0:03:07.320 --> 0:03:11.120 China growth concerns continued to weigh on sediment Bloomberge Juliet 0:03:11.160 --> 0:03:14.520 Sally joins us from Singapore with the latest Good morning, Juliet, 0:03:14.600 --> 0:03:17.520 Good morning John and Karena. Jump in Chinese textures and 0:03:17.760 --> 0:03:21.480 energy stocks helped cap deeper losses on the regional benchmark index. 0:03:21.600 --> 0:03:24.480 Nickel stocks in the region rose after Indonesia, the world's 0:03:24.480 --> 0:03:27.200 biggest producer of the commodity, told Bloomberg it plans to 0:03:27.240 --> 0:03:30.640 impose attacks on exports this year. Investors now look ahead 0:03:30.680 --> 0:03:32.960 to the Jackson Wholesomposium and close at a Home are 0:03:33.040 --> 0:03:35.720 likely cut by Chinese lenders to the loan prime rate 0:03:35.960 --> 0:03:39.720 concerns about China's slowing economy sending the MSCI Asia Pacific 0:03:39.760 --> 0:03:43.520 Index down for the week. In Singapore, Juliet Sale Bloomberg daybreak. 0:03:43.720 --> 0:03:45.880 All right, Juliet, thank you. Now taking a look at 0:03:45.880 --> 0:03:49.440 oil prices are slumping this morning. Nix screwed oil is 0:03:49.520 --> 0:03:51.720 down one in a third percent on a dollar twenty 0:03:51.720 --> 0:03:53.880 two with at eighty nine dollars twenty eight cents of 0:03:53.920 --> 0:03:56.280 barrel oil is on track for a weekly loss with 0:03:56.360 --> 0:04:00.000 lingering concerns over an economic slowdown. Crewed has now given 0:04:00.040 --> 0:04:03.360 up all gains that followed Russia's invasion of Ukraine. Most 0:04:03.440 --> 0:04:06.120 actively traded in the pre market this morning, shares of 0:04:06.240 --> 0:04:10.360 bed Bathroom Beyond down forty one cent. This move comes 0:04:10.400 --> 0:04:16.200 after activist investor Ryan Cohen, extended excited, exited his entire 0:04:16.240 --> 0:04:19.119 stake in the company. Cohen pocket at sixty eight million 0:04:19.160 --> 0:04:22.080 dollars in profits after holding Bad Bathroom Beyond shares for 0:04:22.279 --> 0:04:25.960 seven months. It's setting up a repeat of other meme 0:04:26.040 --> 0:04:29.720 stock moments, with the price drop for retail investors who 0:04:29.760 --> 0:04:33.000 relate to the trade being just as dramatic as its ascent. 0:04:33.600 --> 0:04:35.280 But we take a look at the labor market now, 0:04:35.360 --> 0:04:38.479 John A new survey from p w C is painting 0:04:38.520 --> 0:04:41.560 a bleak picture. It says layoffs are in the works 0:04:41.600 --> 0:04:44.800 at half of US companies, and Bloomberg Charlie Pellett has 0:04:44.800 --> 0:04:48.520 that story. Last month, PwC pulled more than seven d 0:04:48.760 --> 0:04:52.440 US executives and board members across a range of industries. 0:04:52.600 --> 0:04:56.840 Half of respondents said they are reducing headcount or plan too, 0:04:56.960 --> 0:05:00.720 and fifty two percent of implemented hiring freeze is more 0:05:00.800 --> 0:05:04.080 than four in ten are rescinding job offers, and a 0:05:04.160 --> 0:05:08.200 similar amount are reducing or eliminating the sign on bonuses 0:05:08.279 --> 0:05:11.080 that have become common to attract talent in a tight 0:05:11.360 --> 0:05:15.520 job market in New York. Charlie Pea Bloomberg Daybreak, Charlie, 0:05:15.560 --> 0:05:18.240 thanks turning to the pandemic. Now we're seeing more signs 0:05:18.240 --> 0:05:22.080 that corporate America is turning away from prior policies. Days 0:05:22.120 --> 0:05:26.960 after the CDC shifted its COVID quarantine guidance, Amazon reportedly 0:05:27.080 --> 0:05:31.000 scrapping its COVID leaf policy. Bloomberus Rinida Young joins US 0:05:31.040 --> 0:05:33.360 Live with that story. Good morning Rnita, Good morning John. 0:05:33.400 --> 0:05:36.479 The two weeks of paid lead for COVID nineteen cases 0:05:36.520 --> 0:05:40.920 that Amazon offered employees is now gone. Amazon is returning 0:05:40.920 --> 0:05:45.000 to standard sick leaf policies beginning today, and an internal 0:05:45.040 --> 0:05:48.719 memo published by Business Insider shows the company is also 0:05:48.800 --> 0:05:53.160 scrapping contact tracing across much of its network of warehouses. 0:05:53.480 --> 0:05:56.920 Now this could affect hundreds of thousands of employees at Amazon. 0:05:57.320 --> 0:06:00.800 It applies to all US employees except for those living 0:06:00.800 --> 0:06:05.800 in California, New York, Colorado, and Philadelphia. Live in New York. 0:06:05.839 --> 0:06:08.280 I'm really need a young Bloomberg, daybreak. I re need 0:06:08.320 --> 0:06:10.400 to thank you all. Earning season is winding down, but 0:06:10.440 --> 0:06:12.880 we get one more report of note this morning. Firming 0:06:12.960 --> 0:06:16.960 machinery maker deer Or publishes results shortly. Bloomberg Intelligence says 0:06:17.040 --> 0:06:21.080 higher production and supply chain easing should support accelerated growth 0:06:21.160 --> 0:06:24.600 the company. And finally, let's talk politics. The legal troubles 0:06:24.640 --> 0:06:27.800 circling former President Trump now. The judge of the Mara 0:06:27.920 --> 0:06:30.960 Longo FBI search warrant hearing is indicating he'd like to 0:06:31.040 --> 0:06:33.560 unseal at least parts of the search warrant at the 0:06:33.640 --> 0:06:37.279 heart of the search. Bloomberg's ad Baxter has details. The 0:06:37.360 --> 0:06:40.120 judges ordered the dj back to court next week with 0:06:40.279 --> 0:06:43.760 suggested redactions. One of the attorneys for media group seeking 0:06:43.800 --> 0:06:46.960 the release of the document, Diana Shulman, says she feels 0:06:46.960 --> 0:06:49.719 good about the hearing. He understands that the public is 0:06:49.760 --> 0:06:53.159 going to likely be entitled to some parts of this 0:06:53.480 --> 0:06:57.080 warrants application and its affidavit. So the next hearing is 0:06:57.160 --> 0:07:00.400 next Thursday, and it seems most likely scenario oh is 0:07:00.440 --> 0:07:04.159 that something will be released in very heavily redacted form 0:07:04.400 --> 0:07:07.160 in San Francisco. I'm at Baxter Bloomberg day Break, All right, 0:07:07.200 --> 0:07:09.440 thanks ahead of the cash showupen on Wall Street. Down 0:07:09.480 --> 0:07:14.400 futures one points, lower HANDSMP Evening futures down thirty two 0:07:14.680 --> 0:07:18.240 and the Nasdack futures down one hundred twenty six points. 0:07:18.280 --> 0:07:24.000 This is Bloomberg Day break That for insis to five 0:07:24.000 --> 0:07:25.960 oh seven on Wall Street. Time to bring in Michael 0:07:25.960 --> 0:07:27.800 Barr with more on what else is going on to 0:07:27.880 --> 0:07:30.920 New York and around the world. John, thank you very much, sir. 0:07:31.000 --> 0:07:34.560 New York City Mayor Eric Adams says, while outdoor dining 0:07:34.680 --> 0:07:37.760 is here to stay in the city, will remove abandoned 0:07:37.800 --> 0:07:42.040 dining sheds. Adams says that abandoned or dangerous outdoor dining 0:07:42.080 --> 0:07:45.680 structures must be torn down quickly. When a dining shed 0:07:45.800 --> 0:07:49.120 is no longer in use, and if it's abandoned, it's 0:07:49.120 --> 0:07:52.440 a safety has it, we have to turn it tear 0:07:52.480 --> 0:07:55.840 it down. It can't be a safe haven for rats, 0:07:56.280 --> 0:07:59.440 it can't be a safe haven for illegal behavior. It 0:07:59.480 --> 0:08:02.920 has to be a place to allow people to enjoy dyning, 0:08:03.720 --> 0:08:07.120 Mayor Anams. The United Nations is urging Russia to stand 0:08:07.120 --> 0:08:09.800 down and not proceed with its mission to carry out 0:08:09.840 --> 0:08:14.440 military action at a nuclear power plant in Ukraine. Secretary 0:08:14.520 --> 0:08:17.960 General Antonio Guterres adjusted any action there would be, in 0:08:18.040 --> 0:08:22.480 his words, suicide policess must be any actions that Mican 0:08:22.560 --> 0:08:27.560 they had safety, r S, unity and Lucian plants, and 0:08:28.400 --> 0:08:31.360 must not be used the spot of any need fed inferation. 0:08:31.760 --> 0:08:35.920 UN Secretary General Guterres repeatedly urged for the plan to 0:08:35.960 --> 0:08:40.040 be demilitarized. A former top executive of the Trump organization 0:08:40.080 --> 0:08:43.800 has pleaded guilty to tax evasion. Alan Weislberg's guilty plea 0:08:43.840 --> 0:08:46.320 as part of a larger deal to testify against former 0:08:46.360 --> 0:08:50.200 President Trump's real estate company. Weislberg will served five months 0:08:50.200 --> 0:08:52.760 in jail and pay nearly two million dollars and taxes, 0:08:52.800 --> 0:08:56.800 penalties and interest. The number of migrants apprehended entering the U. 0:08:56.920 --> 0:08:59.480 S Coad hit a record two million this year, and 0:08:59.800 --> 0:09:03.480 the air release to await processing as Texas government of 0:09:03.520 --> 0:09:06.439 Greg Abbott sending bus loads of them to Washington, d C. 0:09:06.679 --> 0:09:09.400 And New York City. The bus load of migrants is 0:09:09.440 --> 0:09:13.320 expected soon in New York City. Climate change is being 0:09:13.360 --> 0:09:16.040 considered a factor in the recent return of a brain 0:09:16.160 --> 0:09:20.439 eating amba, often found in freshwater sources, that's being linked 0:09:20.440 --> 0:09:22.920 to the death of the child in eastern Nebraska. It 0:09:23.040 --> 0:09:25.800 is the second such probable death in the Midwest this summer, 0:09:26.040 --> 0:09:29.640 with another incident suspected in Missouri last month. In Nebraska, 0:09:29.760 --> 0:09:33.200 Douglas County Health Director Dr Lindsay Hughes and just being 0:09:33.240 --> 0:09:37.080 mindful of your exposure and freshwater sources. We are urging 0:09:37.200 --> 0:09:41.720 the public to simply be aware and to take precautions 0:09:41.760 --> 0:09:46.559 when they are being exposed to any warm freshwater sources 0:09:46.640 --> 0:09:51.320 out in public so lakes, streams, ponds. Dr Hugh says, 0:09:51.360 --> 0:09:54.040 though the illness is rare. Global News twenty four hours 0:09:54.080 --> 0:09:56.320 a day on air and on Bloomberg Quicktake power by 0:09:56.320 --> 0:09:58.839 more than seven hundred journalists analysts more than a hundred 0:09:58.840 --> 0:10:01.160 twenty countries. I'm like of bar this is Bloomberg. John 0:10:01.200 --> 0:10:06.959 all right, Michael, thank you, and it brings us to 0:10:07.160 --> 0:10:09.640 five on Wall Street Time down for the Bloomberg Sports 0:10:09.720 --> 0:10:11.920 up tape and good morning John Staff. All right, Good 0:10:11.960 --> 0:10:14.720 morning John. The Medicine Braise just played nine games in 0:10:14.880 --> 0:10:17.240 fifteen days. The Mets one four or five in New York. 0:10:17.320 --> 0:10:19.559 The Braves won three or four in Atlanta. They beat 0:10:19.640 --> 0:10:21.680 Jacob mc graham storing in the seventh in Name for 0:10:21.720 --> 0:10:23.720 a three two victory that gets them back to three 0:10:23.760 --> 0:10:25.839 and a half games behind the Mets in the n 0:10:25.920 --> 0:10:28.040 L as the Yankee lead a l east to helping 0:10:28.160 --> 0:10:30.480 nine games, but at the stadium the night after that 0:10:30.559 --> 0:10:33.800 dramatic en and he went over to Tampa Bay. Toronto 0:10:33.880 --> 0:10:36.280 got the new Yanks starter Frankie Montess with a five 0:10:36.400 --> 0:10:38.360 runs second in name and include a three run homber 0:10:38.360 --> 0:10:40.520 by Vladimir Guerrero Junior. Blue Jays went on to win 0:10:40.640 --> 0:10:43.319 nine to two. George Bringer had four hits with the 0:10:43.400 --> 0:10:45.720 Jays Montes and three starts with the Yanks. Has pitched 0:10:45.720 --> 0:10:49.160 fourteen innings and has allowed fourteen runs. The guy he 0:10:49.280 --> 0:10:52.800 replaced in the Yankee rotation, Jordan Montgomery, now of St. Louis, 0:10:52.840 --> 0:10:55.599 has made three starts with the Cardinals and in seventeen 0:10:55.640 --> 0:10:58.520 meanings he's given up one run. Speaking of the Cardinals, 0:10:58.559 --> 0:11:01.400 they beat Colorado thirteen and nothing. That Finch had grand 0:11:01.440 --> 0:11:04.400 slam for forty two year old Albert Poohle's career home 0:11:04.480 --> 0:11:07.559 run number six ninety. If big NFL story resolution and 0:11:07.600 --> 0:11:10.360 how long does Shawn Watson's suspension will be, NFL wanted 0:11:10.400 --> 0:11:12.480 it longer than the six games originally ruled by an 0:11:12.559 --> 0:11:15.079 arbitrat of the two sides settled on eleven games, a 0:11:15.200 --> 0:11:18.800 record fine of five million. Watson apologized but did not 0:11:18.920 --> 0:11:21.800 admit to committing any sexual in this conduct. I'm moving 0:11:21.840 --> 0:11:24.040 over my cer in my life and I'll continue to 0:11:24.080 --> 0:11:27.319 stand on my innocence. Just because you know, settlements and 0:11:27.360 --> 0:11:29.720 things like that happened, doesn't mean that a person is 0:11:30.080 --> 0:11:33.040 is guency for anything. I feel like person has an 0:11:33.040 --> 0:11:35.720 opportunity to stand on his innocence and proved that, and 0:11:35.760 --> 0:11:37.880 we proved that on the legal side, and we're just 0:11:37.960 --> 0:11:40.280 gonna continue to push forward as an individual as a person. 0:11:40.280 --> 0:11:42.560 Watson's first game with this new team Cleveland will be 0:11:42.559 --> 0:11:45.880 Week thirteen against his old team Houston. John Stash Edward 0:11:45.920 --> 0:11:48.400 Blue Work Sports John, all right, thanks John, ahead of 0:11:48.400 --> 0:11:50.280 the cat show up. All of Walstreet futures in the 0:11:50.320 --> 0:11:53.280 red right now down futures down two hundred eight points, 0:11:53.679 --> 0:11:56.880 the sub me eat many futures thirty four points slower, 0:11:57.400 --> 0:12:00.679 and the NASTAC futures are down one hundred deep points 0:12:00.920 --> 0:12:06.680 almost one percent. You're listening to Bloomberg day Break, and 0:12:06.840 --> 0:12:09.280 just ahead we'll get you set up for the trading day. 0:12:09.400 --> 0:12:12.480 We'll be joined by Kitchuks, the chief fex strategist at 0:12:12.559 --> 0:12:23.840 Society General. You're listening to Bloomberg Markets headlines and breaking 0:12:23.880 --> 0:12:26.760 news twenty four hours a day at Bloomberg dot Com, 0:12:26.880 --> 0:12:30.440 to Bloomberg Business at and at Bloomberg Quicktake, this is 0:12:30.440 --> 0:12:39.640 a Bloomberg Business lash and I'm Karen Moscow. US Knock 0:12:39.679 --> 0:12:42.720 Index futures are falling this morning along with treasuries after 0:12:42.760 --> 0:12:45.920 a chorus of Federal Reserve officials reiterated they're resolved to 0:12:45.960 --> 0:12:48.880 continue rate hikes. We checked the markets every fifteen minutes 0:12:48.920 --> 0:12:51.959 throughout the trading day on Bloomberg s and P futures 0:12:52.000 --> 0:12:54.360 down thirty points this morning. Down features down a hundred 0:12:54.400 --> 0:12:57.720 seventy eight NASDACK futures down a hundred sixteen. The decks 0:12:57.720 --> 0:13:00.559 in Germany's down seven tenths of upper set ten. Your 0:13:00.600 --> 0:13:03.640 treasury down eleven thirty seconds, held two point nine two percent. 0:13:03.720 --> 0:13:05.760 They yield on the two year three point to four 0:13:05.840 --> 0:13:08.640 per cent. N Max Screwed oil is down one per 0:13:08.640 --> 0:13:10.840 cent or ninety one cents at eighty nine dollars, fifty 0:13:10.920 --> 0:13:13.360 nine cents of Arrol Comic School down a quarter per 0:13:13.360 --> 0:13:16.400 cent or four dollars is seventeen sixty seven twenty announced 0:13:16.720 --> 0:13:19.680 the euro one point zero zero eight five against the dollar, 0:13:19.760 --> 0:13:23.000 British found one point eight one and again one thirty 0:13:23.080 --> 0:13:26.319 six point five too. And Bitcoin this morning down more 0:13:26.360 --> 0:13:29.800 than seven percent at twenty one thousand, seven hundred dollars. 0:13:30.000 --> 0:13:32.400 And today we get earnings from during company. And that's 0:13:32.400 --> 0:13:35.080 a Bloomberg business flash. Now here's Michael Barr with more 0:13:35.120 --> 0:13:37.439 and what's going on around the world. Munchacle, Good morning, 0:13:37.520 --> 0:13:40.319 Good morning, Karen. A federal judge has ordered the Justice 0:13:40.320 --> 0:13:44.560 Department to put forward proposed redactions as he committed to 0:13:44.600 --> 0:13:48.080 making public at least part of the affidavit supporting the 0:13:48.080 --> 0:13:51.960 search warrant for former President Trump's estate in Florida. The 0:13:52.040 --> 0:13:54.560 judge gave prosecutors a week to submit a copy of 0:13:54.559 --> 0:13:57.880 the affidavit. After being accused by more than two dozen 0:13:57.960 --> 0:14:01.839 women of sexual misconduct, Evelon Brown's quarterback to Shaun Wants 0:14:01.880 --> 0:14:04.520 it will now serve in eleven games suspension and pay 0:14:04.559 --> 0:14:08.720 a five million dollar fine. In baseball, the Yankees and 0:14:08.880 --> 0:14:12.320 Mets lost the Red Sox, Orioles and Giants also lost 0:14:12.400 --> 0:14:15.640 the Nationals. One Global News twenty four hours a day 0:14:15.760 --> 0:14:20.400 on air and on Bloomberg Quicktake, powered by more than journalists, 0:14:20.400 --> 0:14:23.400 analysts more than a hundred twenty countries. Michael barn this 0:14:23.560 --> 0:14:26.360 is Bloomberg, John Michael, thank you, five twenty on Well Street. 0:14:26.440 --> 0:14:29.160 We are live for the Bloomberg Interact and Brokers Studios. 0:14:29.160 --> 0:14:32.520 This is Bloomberg Daybreak. Well you heard Karen Federal Reserve 0:14:32.520 --> 0:14:35.600 of his was reiterating the resolve to continue rate hikes. 0:14:35.960 --> 0:14:39.680 Traders raising tightening wagers for other major central banks around 0:14:39.680 --> 0:14:41.600 the world. Let's try to get you set up for 0:14:41.640 --> 0:14:44.240 the trading day head. We're joined now by Kitchos, chief 0:14:44.320 --> 0:14:48.120 FIC strategist at sock Chen. Um. I gotta start on 0:14:48.200 --> 0:14:51.560 your home turf kit and uh, I'm waiting for a 0:14:51.600 --> 0:14:55.200 plague locust to hit there in the UK. What's the 0:14:55.240 --> 0:14:59.480 path forward for the Bank of England? And uh, fighting inflation? 0:14:59.520 --> 0:15:05.080 Does it? What cost to the UK economy? I think 0:15:05.120 --> 0:15:07.960 the cost is the cost is likely to be severe 0:15:08.040 --> 0:15:10.560 and the danger of the way that we that we 0:15:10.640 --> 0:15:12.960 pay for our energy bills and so for our electricity, 0:15:13.280 --> 0:15:17.480 which is seaxed on on a rolling basis, means that 0:15:17.520 --> 0:15:19.360 we're going to get a cap on energy bills that 0:15:19.360 --> 0:15:21.960 goes up every few months. And the peak is looking 0:15:22.160 --> 0:15:25.040 higher and higher and so so we probably haven't seen 0:15:25.040 --> 0:15:27.920 peak inflation yet by some distance. And that's that's the 0:15:28.000 --> 0:15:31.200 source of massive concern um to everybody in the UK 0:15:31.280 --> 0:15:34.600 economy because obviously has less money for anything else. Um 0:15:34.680 --> 0:15:36.800 For the Bank of England. I think that they're caught 0:15:36.920 --> 0:15:41.240 really because there's a perfectly good argument that you should 0:15:41.280 --> 0:15:43.240 say that if the economy is heading to a recession, 0:15:43.240 --> 0:15:44.920 why bother they going on raising rates? You know that 0:15:44.920 --> 0:15:47.760 will look after the inflation numbers for you in the 0:15:47.800 --> 0:15:50.880 next twelve months and rate rises now affect the economy 0:15:50.920 --> 0:15:53.320 and twelve to eighteen months time by then it will 0:15:53.360 --> 0:15:56.760 be different. But but that that you know, any backing 0:15:56.800 --> 0:15:58.760 down from the red hikes that are priced in, and 0:15:58.840 --> 0:16:02.280 we've got we've got plenty of radar expressing in the 0:16:02.320 --> 0:16:03.840 coming m and we we look as if we're going 0:16:03.880 --> 0:16:07.720 to get to four before the Federal Reserve does just 0:16:07.760 --> 0:16:11.160 weakens the currency, and small open economy or medium sized 0:16:11.200 --> 0:16:13.320 open economy, the week of the currency, the more important 0:16:13.360 --> 0:16:15.520 inflation there is in random around we go in the circle. 0:16:15.640 --> 0:16:17.960 So we are we are left for a central bank 0:16:17.960 --> 0:16:21.840 with Hobson's choice tighten more than they should too late 0:16:21.880 --> 0:16:25.440 in the cycle, because they have to be seen to 0:16:25.560 --> 0:16:29.400 fight inflation really hard, to maintain their credibility, both in 0:16:29.400 --> 0:16:31.720 the foreign exchange market and frankly in front of the press. 0:16:32.400 --> 0:16:36.200 We all saw yesterday in markets how the Central Bank 0:16:36.200 --> 0:16:39.760 of Turkey cut rates in the face of eight percent inflation, 0:16:40.480 --> 0:16:44.800 and the markets treated their currency accordingly. So it's yeah, 0:16:44.920 --> 0:16:46.560 it's not good. I hope we don't get well that 0:16:46.560 --> 0:16:49.720 that's a I would argue, that's a central bank that's 0:16:49.960 --> 0:16:56.160 not anywhere near independent. Back to the UK though, raising rates, 0:16:56.280 --> 0:17:01.880 the sterling is falling, how much farther can it fall? Um? Look, 0:17:01.960 --> 0:17:04.040 I think anything, I don't. I mean, I don't think 0:17:04.040 --> 0:17:05.560 we'll get down to one tan you know, I don't 0:17:05.560 --> 0:17:08.040 think we're going to go back to the to to 0:17:08.040 --> 0:17:10.320 to the worst kind of of those kinds of levels, 0:17:11.720 --> 0:17:16.920 but um levels of my use. But the but I 0:17:16.960 --> 0:17:19.679 think we'll get you somewhere like one fifteen. Is it's 0:17:19.720 --> 0:17:23.080 quite possible you have to overshoot in this process, you know. 0:17:23.160 --> 0:17:25.960 So so it's whatever I thought before, plus a temporary 0:17:26.000 --> 0:17:28.959 overshoot from which you come back. And one fifteen sounds 0:17:29.000 --> 0:17:30.800 like it sounds like a reasonal level. It will make 0:17:30.880 --> 0:17:35.080 London so cheap for you people, Uh yeah, well, King dollar, 0:17:35.280 --> 0:17:37.960 is that going to get dethroned anytime soon? Doesn't look 0:17:38.000 --> 0:17:41.920 like it does it. It's hard, you know, I mean, firstly, 0:17:41.960 --> 0:17:43.960 because the second most important currency in the world is 0:17:44.000 --> 0:17:47.680 still you know, fighting, it's fight against against natural gas 0:17:47.720 --> 0:17:50.360 prices as a result of what's going on in Ukraine. 0:17:50.920 --> 0:17:54.400 And you know, even even if we get all the 0:17:54.480 --> 0:17:59.760 storage up to sevent full in time for winter in Germany, 0:18:00.119 --> 0:18:02.440 that's still two and a half maybe three months of 0:18:02.600 --> 0:18:06.479 storage if things get worse and Russian gas stops flowing. 0:18:06.720 --> 0:18:09.160 And in the meantime, we've pushed up the global price 0:18:09.200 --> 0:18:14.080 of liquid natural gas really dramatically, So we're getting enough 0:18:14.080 --> 0:18:17.040 gas into get three months of extra extra supplies at 0:18:17.080 --> 0:18:20.639 a big economic cost. And that's that's going to you know, 0:18:20.760 --> 0:18:24.440 either either governments take that on as a huge fiscal 0:18:24.520 --> 0:18:27.680 hit or they parted onto consumers as a massive inflation hit. 0:18:29.520 --> 0:18:32.080 So Europe is Europe is still hurt. Let's pivot to 0:18:32.119 --> 0:18:35.840 the US. Is a string of seemingly weak economic data 0:18:35.920 --> 0:18:39.479 can to encourage anything close to a dovish pit pivot 0:18:39.520 --> 0:18:42.919 from the FED. I think the FED suffers the same 0:18:43.040 --> 0:18:45.119 kind of problem as as you know, it's just a 0:18:45.200 --> 0:18:48.960 lesser degree of this credibility problem. If monetary policy works 0:18:49.000 --> 0:18:53.600 with an eighteen months lead, then frankly, Um, they should 0:18:53.600 --> 0:18:56.200 probably pivot more dovishly. But I don't think they can 0:18:56.280 --> 0:18:59.960 do that until all the measures of core underlying inflay 0:19:00.000 --> 0:19:02.600 sans start to behave and the most important one of 0:19:02.640 --> 0:19:04.640 those this wage growth. They need wage growths to top 0:19:04.640 --> 0:19:07.160 out in a more clear fashion than it is before 0:19:07.200 --> 0:19:10.199 they'll have it. My sense is as soon as the 0:19:10.240 --> 0:19:15.120 market talks about the Fed pivoting Davish Lee, Fed officials 0:19:15.160 --> 0:19:19.679 come out to reinforce their credibility. That's a recipe for 0:19:19.760 --> 0:19:22.240 a smaller version of what we have here, where policy 0:19:22.320 --> 0:19:24.320 ends up being tighter than the economy needs it. The 0:19:24.359 --> 0:19:27.320 hasing marketself is more, the economic slowdown is a little 0:19:27.359 --> 0:19:30.280 deeper than it would be Um, and and then we 0:19:30.320 --> 0:19:33.040 go through that cycle. You know, that's the price for 0:19:33.560 --> 0:19:37.159 but for maintaining central bank credibility these days, Okay, Kit, 0:19:37.280 --> 0:19:40.720 You's always a pleasure a chief Fax strategist as society 0:19:40.800 --> 0:19:45.200 general this morning Sterling one eighteen right now down about 0:19:45.200 --> 0:19:48.760 half a percent. Kit also mentioned the year on bets 0:19:49.640 --> 0:19:53.800 almost a parody. It is down right now, just slightly 0:19:53.880 --> 0:19:57.200 against the U. S. Dollar. You are listening to Bloomberg 0:19:57.240 --> 0:20:09.600 Daybreak and Bloomberg Weather for met round just Robb Carolin, 0:20:09.720 --> 0:20:12.879 mostly sully warmed the hind temperature ninety degrees, partly cloudy 0:20:12.960 --> 0:20:15.560 to light lows in the mid seventies. Tomorrow partly sunny, 0:20:16.000 --> 0:20:19.520 maybe a late day shower by eighty five to ninety degrees. 0:20:21.960 --> 0:20:26.520 Broadcasting live from the Bloomberg Interactive Brokery Studio in New York, 0:20:26.600 --> 0:20:29.720 Bloomberg E Living free on to Washington, d C. Bloomberg 0:20:30.680 --> 0:20:33.920 to Boston, Bloomberg one O six one to San Francisco, 0:20:34.000 --> 0:20:37.440 Bloomberg nine six to the country, Sirius XM Chado one 0:20:37.520 --> 0:20:41.200 nine and around the globe the Bloomberg Business and Bloomberg 0:20:41.320 --> 0:20:50.520 Radio dot Com. This is Bloomberg Daybreak. It's five thirty 0:20:50.520 --> 0:20:52.800 on Wall Street. Good morning. I'm John Tucker and I'm 0:20:52.840 --> 0:20:55.920 Karen Moscow. We are just about four hours away from 0:20:55.960 --> 0:20:57.720 the open of US trading. We get you up to 0:20:57.800 --> 0:20:59.159 date on the news you need to know at this 0:20:59.240 --> 0:21:02.280 shower and you. Futures are lower this morning as traders 0:21:02.280 --> 0:21:05.720 react to mixed signals from the Fed. It's unclear exactly 0:21:05.720 --> 0:21:07.800 how big the Central banks next move will be on 0:21:07.960 --> 0:21:11.000 interest rates. St. Louis Fed Governor James Bullard once as 0:21:11.040 --> 0:21:14.480 seventy five basis point move in September. Kansas City's Enter 0:21:14.600 --> 0:21:17.960 George is more conscious. San Francisco's Mary Daily is open 0:21:18.000 --> 0:21:21.240 to fifty or seventy five basis points, and Minneapolis Fed 0:21:21.280 --> 0:21:24.040 Chief Neil cash Curry warrants a recession could be on 0:21:24.080 --> 0:21:26.679 the horizon as we continue to raise rates, as we 0:21:26.720 --> 0:21:30.159 continue to raise costs, sort of speak of borrowing across 0:21:30.200 --> 0:21:33.480 the economy. It should be putting tapping the brakes on 0:21:33.560 --> 0:21:35.960 the US economy, and that makes it more likely that 0:21:36.080 --> 0:21:38.680 we would end up in a recession. Neil cash Curry 0:21:38.760 --> 0:21:41.160 made the comments a day after the release of July's 0:21:41.160 --> 0:21:44.840 FED minutes, which showed officials weighing exactly when to show 0:21:44.880 --> 0:21:48.000 the pace of too slow rather the pace of rate hikes. 0:21:48.119 --> 0:21:50.520 And looking at the labor market, a new p WC 0:21:50.680 --> 0:21:53.560 survey paints a bleak picture on the future of the 0:21:53.600 --> 0:21:56.920 US labor market. The results showed layoffs or in the 0:21:56.960 --> 0:22:00.640 works at about half of US companies despite a tight 0:22:00.760 --> 0:22:04.280 labor market. The more than seven US executives and board 0:22:04.280 --> 0:22:08.320 members polled said they're reducing headcount or planned to and 0:22:08.440 --> 0:22:11.879 over half implemented hiring freezes. I'll taking a look at 0:22:11.880 --> 0:22:14.320 a major market mover. This morning shares a bad bath 0:22:14.359 --> 0:22:17.720 and Beyond down forty one percent. It follows news that 0:22:17.800 --> 0:22:21.680 activist investor Ryan Cohen exited his entire stake in the company. 0:22:21.920 --> 0:22:25.399 He pocketed sixty eight million dollars in profits from the sale, 0:22:25.720 --> 0:22:29.520