WEBVTT - Bloomberg Daybreak: September 16, 2022 - Hour 1 (Radio) 0:00:02.600 --> 0:00:05.920 Live from the Bloomberg Interactive Brooker Studios. This is is Bloomberg 0:00:05.960 --> 0:00:09.880 Daybreak for Friday, September six two. Coming up this hour, 0:00:10.240 --> 0:00:13.760 stock slide yields rise as we close out a tumultuous 0:00:13.800 --> 0:00:17.000 week for the markets. Investors get another key economic report 0:00:17.079 --> 0:00:20.520 before next week's FED decision. Fed X does not deliver 0:00:20.680 --> 0:00:23.759 for investors as shares plunge, and a key ruling in 0:00:23.800 --> 0:00:27.160 the classified documents probe of Donald Trump. New York City 0:00:27.200 --> 0:00:30.480 is nearing its breaking point by migrants sent from Texas. 0:00:30.480 --> 0:00:34.080 Plus preparations continue for Queen Elizabeth's funeral on Monday. I'm 0:00:34.080 --> 0:00:37.280 Michael bar More Ahead, I'm Don Stashard Sports. The Mets 0:00:37.280 --> 0:00:40.680 beat the Pirates, The Yankees visit Milwaukee tonight Thursday Night Football, 0:00:40.680 --> 0:00:44.040 That Jeeves beat the Charger. That's all straight ahead on 0:00:44.200 --> 0:00:49.960 Bloomberg Daybreak on Bloomberg Elimen Frio, New York, Bloomberg Washington, 0:00:50.040 --> 0:00:54.080 d C, Bloomberg one six one, Boston, Bloomberg nine sixty, 0:00:54.160 --> 0:00:58.160 San Francisco, Sirius x M one nineteen and around the 0:00:58.200 --> 0:01:01.560 world on Bloomberg Radio Dot Come and via the Bloomberg 0:01:01.600 --> 0:01:10.120 Business Add Good morning. I'm Nathan Hager, and I'm Karen 0:01:10.200 --> 0:01:13.640 Moscow and US DOT Index futures are lower this morning. 0:01:13.680 --> 0:01:15.640 We are coming up to five oh one on Wall Street, 0:01:15.680 --> 0:01:17.840 and we checked the markets every fifteen minutes throughout the 0:01:17.880 --> 0:01:20.479 trading day. On Bloomberg, U S and P futures down 0:01:20.520 --> 0:01:23.840 thirty seven points down, futures down two fifty four and 0:01:23.920 --> 0:01:27.480 Astack futures down one dty eight. The decks in Germany's 0:01:27.520 --> 0:01:30.319 down one point eight percent, ten year treasury down four 0:01:30.360 --> 0:01:33.400 thirty seconds. You're three point four six percent yield on 0:01:33.480 --> 0:01:36.479 the two year three point eight nine percent, Nathan hearing. 0:01:36.520 --> 0:01:39.160 This stock slide is deepening as we close out a 0:01:39.160 --> 0:01:41.679 trading week on track to be the worst since June. 0:01:41.760 --> 0:01:44.320 European equities are down for a fourth straight day as 0:01:44.360 --> 0:01:47.400 our stocks in Asia. Two year treasury yields are climbing 0:01:47.440 --> 0:01:50.639 to their highest level in fifteen years, deepening the curve 0:01:50.640 --> 0:01:53.760 in version that's seen as a recession signal. But Brent Shooty, 0:01:53.920 --> 0:01:57.240 chief investment strategist with Northwestern Mutual, thinks we may be 0:01:57.360 --> 0:02:00.720 seeing a bottom. Sentiment is already awful. People have sold 0:02:00.760 --> 0:02:03.280 already thrown at fifty percent, retracing of blows that we had, 0:02:03.320 --> 0:02:04.960 and I think you have the basis to the market 0:02:05.000 --> 0:02:06.760 having put in the bottom. That doesn't mean it won't 0:02:06.800 --> 0:02:08.520 be a grinding, back and forth advance, but I don't 0:02:08.560 --> 0:02:11.080 think we're going to go below those tune blows. Prince 0:02:11.160 --> 0:02:14.000 Duty with Northwestern Mutual says stocks usually hit a bottom 0:02:14.040 --> 0:02:17.600 when inflation peaks. We'll make an investors get another key 0:02:17.639 --> 0:02:20.880 economic report to digest before we head into the weekend. 0:02:20.960 --> 0:02:23.840 At ten am Wall Street time, we get September sentiment 0:02:23.919 --> 0:02:26.600 numbers from the University of Michigan and Bloomberg, so Michael 0:02:26.639 --> 0:02:30.359 McKee has more The sustained slide in gasoline prices should 0:02:30.360 --> 0:02:33.400 lift the headline sentiment index as well as consumers view 0:02:33.440 --> 0:02:36.440 of current economic conditions. The numbers that matter most, however, 0:02:36.480 --> 0:02:39.560 it will be the expected inflation gauges. The FED wants 0:02:39.600 --> 0:02:43.560 to ensure expectations stay anchored so a wage price spiral 0:02:43.600 --> 0:02:47.600 doesn't develop. Expected yearhead inflation should continue to drop along 0:02:47.639 --> 0:02:50.480 with gasoline prices. The rate was four point eight percent 0:02:50.520 --> 0:02:53.440 in July. That was down from five point two percent 0:02:53.560 --> 0:02:56.639 in June to the lowest in eight months. Michael McKee 0:02:56.680 --> 0:02:59.720 Bloomberg Daybreak. All right, Mike, thanks The sentiment report caps 0:02:59.760 --> 0:03:02.440 off of busy week of data, highlighted by Tuesday's hotter 0:03:02.440 --> 0:03:05.720 than expected inflation report. Traders now during their attention to 0:03:05.800 --> 0:03:08.600 next week's FED meeting, the debate is whether the Central 0:03:08.639 --> 0:03:11.320 Bank raises rates by seventy five basis points or a 0:03:11.400 --> 0:03:14.720 full one per cent. Liz and Saunders is chief investment 0:03:14.800 --> 0:03:18.120 strategist at Charles Schwab. To me, the likelihood is more 0:03:18.120 --> 0:03:20.119 on the seventy five end, just because I'm not sure 0:03:20.160 --> 0:03:22.560 at the stage in the game Powell wants to be 0:03:22.720 --> 0:03:25.560 seen as putting forth shock and aw kind of policy. 0:03:25.680 --> 0:03:30.359 I think more likely is keeping both November and December 0:03:30.360 --> 0:03:32.840 firmly on the table and really pushing back on this 0:03:32.880 --> 0:03:36.360 notion that even existed a month ago that after a 0:03:36.440 --> 0:03:39.360 September hike, the Fed might have the green light to pause. 0:03:39.600 --> 0:03:41.960 Now when it comes to market volatility, liz An Saunders 0:03:42.040 --> 0:03:44.520 or Charles Schaub says, high speed traders maybe driving some 0:03:44.560 --> 0:03:46.960 of the wild swings we've seen this week. Well, and 0:03:47.000 --> 0:03:50.080 this Maurin's equity action. Nathan Shares a FedEx or down 0:03:50.120 --> 0:03:53.960 nine cent in early trading. The company said preliminary results 0:03:53.960 --> 0:03:56.560 for the quarter fell short of expectations. Let me get 0:03:56.560 --> 0:03:59.960 this story from Bloomberg's Charlie Pellett The Courier said adjusted 0:04:00.040 --> 0:04:03.280 earnings for the fiscal first quarter were three forty four share, 0:04:03.680 --> 0:04:06.440 well short of the five ten average est about of analyst. 0:04:06.720 --> 0:04:11.160 CEO Raj Supermannian said in the statement, global volumes declined 0:04:11.400 --> 0:04:15.280 as macro economic trends significantly worsened later in the quarter, 0:04:15.360 --> 0:04:19.320 both internationally and in the US. In addition to withdrawing 0:04:19.360 --> 0:04:23.880 its fiscal three earnings outlook provided in June, FedEx also 0:04:24.000 --> 0:04:28.120 said it expects conditions to worsen in its fiscal second quarter. 0:04:28.640 --> 0:04:32.320 In New York, Charlie Pellett Bloomberg Daybreak. Okay, Charlie, thank you. 0:04:32.360 --> 0:04:35.200 Another stock falling this morning is General Electric. Those shares 0:04:35.240 --> 0:04:38.080 you down four percent in early trading. Gees finance chief 0:04:38.120 --> 0:04:40.719 is warning supply chain challenges will weigh on its third 0:04:40.760 --> 0:04:43.880 quarter performance. Well, Nathan, the rails are still on the 0:04:43.920 --> 0:04:47.240 move this morning. A tentative labor agreement is in place 0:04:47.279 --> 0:04:50.520 between freight rail companies and unions, and that aversus strike. 0:04:50.800 --> 0:04:54.679 President Biden reportedly told both sides failure was not an option. 0:04:54.920 --> 0:04:58.360 Bloomberg political contributor Rick Davis says the president deserves the 0:04:58.440 --> 0:05:01.040 victory lab and we had a big run up to this. 0:05:01.200 --> 0:05:04.040 Everybody was looking a lot of concerns about the impact 0:05:04.080 --> 0:05:07.039 on the economy, and the team and the president came 0:05:07.080 --> 0:05:09.480 through and and this is what you wanted to have happened, 0:05:09.520 --> 0:05:12.760 and they deserve a right to celebrate. Rig Davis spoke 0:05:12.800 --> 0:05:15.839 at our Washington correspondent Joe Matthew on Bloomberg's sound on. 0:05:16.000 --> 0:05:18.159 Stay tuned for more on the tentative deal when we 0:05:18.200 --> 0:05:21.120 speak with the Labor Secretary Marty Walsh. That's coming up 0:05:21.120 --> 0:05:23.919 on Bloomberg's Balance of Power Live at noon Eastern on 0:05:23.920 --> 0:05:27.520 Bloomberg Radio and Television. Staying with Politics Caring, there's news 0:05:27.520 --> 0:05:30.760 on the Justice Department's legal battle with former President Trump. 0:05:30.800 --> 0:05:33.960 A special Master has been named to review documentsies from 0:05:33.960 --> 0:05:36.359 our lago while denying a request from the d o 0:05:36.440 --> 0:05:39.760 J to keep using the documents in their probe. Bloomberg's 0:05:39.760 --> 0:05:44.160 Amy Morris has details from our newsroom in Washington. Both 0:05:44.160 --> 0:05:47.080 the Justice Department and the Trump legal team agreed retired 0:05:47.120 --> 0:05:50.040 federal Court judge Raymond Deary would be a suitable candidate 0:05:50.040 --> 0:05:53.080 for Special Master, but the government won't be allowed to 0:05:53.160 --> 0:05:56.920 keep using about one hundred documents listed as classified until 0:05:57.040 --> 0:06:00.960 after the Special Master reviews all eleven thous and documents 0:06:01.000 --> 0:06:03.400 to determine if any should be withheld because of attorney 0:06:03.400 --> 0:06:06.560 client or executive privilege. D o J also asked for 0:06:06.640 --> 0:06:09.800 a deadline of October seventeenth, but the court gave Deery 0:06:09.880 --> 0:06:13.480 until November thirty to complete his review, and the court 0:06:13.600 --> 0:06:17.000 ordered Trump to cover those costs. In Washington, I'm anymore 0:06:17.040 --> 0:06:19.680 as Bloomberg daybreak a right amy thank you Meantime in 0:06:19.720 --> 0:06:22.560 the Middle East, it's a meeting of two and battled leaders. 0:06:22.600 --> 0:06:26.000 Russian President Vladimir Putin told Chinese leader she Jan Ping 0:06:26.360 --> 0:06:30.760 he understands Beijing's questions and concerns about his invasion of Ukraine. 0:06:31.040 --> 0:06:34.160 Begin More from Bloomberg Stephen Angle in Hong Kong, this 0:06:34.240 --> 0:06:38.680 relationship is not as rosy and positive as it seems 0:06:38.800 --> 0:06:42.400 on the surface. The war does not necessarily play to 0:06:42.800 --> 0:06:46.600 China's needs, and any hope for a quick invasion and 0:06:46.720 --> 0:06:50.400 quick resolution of the Ukraine war is long. In the 0:06:50.520 --> 0:06:52.640 review of Mirror right now, it's been going for more 0:06:52.680 --> 0:06:55.520 than six months, and Bloomberg Stephen Angle says it was 0:06:55.560 --> 0:06:58.440 the first in person talks between President's Putin and she 0:06:58.839 --> 0:07:01.440 since the start of the war were in Ukraine. S 0:07:01.480 --> 0:07:04.280 ANDP future is now down thirty four points down, futures 0:07:04.320 --> 0:07:06.880 down two thirty three, Nastack futures are lower by a 0:07:06.960 --> 0:07:09.480 hundred thirty points the ten. Your treasury is down three 0:07:09.480 --> 0:07:12.000 thirty seconds. You'ld three point four or six percent. You'ld 0:07:12.040 --> 0:07:15.080 on the two year three point eight nine percent. Straight 0:07:15.080 --> 0:07:18.080 ahead your latest local headlines into check of sports. This 0:07:18.480 --> 0:07:25.480 is Bloomberg five oh seven on Wall Street. We're dealing 0:07:25.480 --> 0:07:27.960 with a truck fire this morning, south found of Jersey 0:07:27.960 --> 0:07:30.720 Turnpike Nearics and twelve. Details coming up in traffic. First 0:07:30.800 --> 0:07:32.720 Michael Byer with what else is going on in New 0:07:32.800 --> 0:07:35.360 York and around the world. Good morning, Michael, Good morning Nathan. 0:07:35.400 --> 0:07:38.880 New York is reassessing the city's right to shelter practice 0:07:39.280 --> 0:07:42.320 following an influx of more than eleven thousand asylum seekers 0:07:42.320 --> 0:07:45.239 who have been busted from Texas. That's according to Mayor 0:07:45.400 --> 0:07:48.960 Eric Adams, chief Council, who says the city is nearing 0:07:49.000 --> 0:07:52.800 a breaking point with asylum seekers and the homeless. Council 0:07:53.000 --> 0:07:57.440 Brendan McGuire has said, though the law itself is staying put, obviously, 0:07:57.600 --> 0:08:01.840 none of those practices developed with anyone contemplating that they 0:08:01.880 --> 0:08:04.480 were going to be over ten thousand individuals bust into 0:08:04.480 --> 0:08:08.400 New York with no connection to New York from from overseas. 0:08:08.920 --> 0:08:11.760 Mayor Adams says the city will not be like those 0:08:11.840 --> 0:08:15.840 municipalities and states that fly people to Massachusetts or put 0:08:15.840 --> 0:08:19.000 people on buses. Are Adams spoke while touring an asylum 0:08:19.120 --> 0:08:22.480 seeker resourced navigation center, it doesn't matter if you came 0:08:22.520 --> 0:08:26.280 here on a Mayflower or on a bus. At the 0:08:26.320 --> 0:08:30.000 port authority, you deserve the dignity and respect that this 0:08:30.080 --> 0:08:34.160 city continues to show. Texas Governor Greg Abbott has been 0:08:34.200 --> 0:08:37.679 sending migrants from his state to New York City. Ukrainian 0:08:37.720 --> 0:08:41.040 authorities have found a mass burial site near a recaptured 0:08:41.160 --> 0:08:45.800 northeastern city previously occupied by Russian forces. President of Voladimir 0:08:45.880 --> 0:08:48.520 z Lensky announced the discovery in his nightly addressed to 0:08:48.559 --> 0:08:52.480 the nation. In the UK, preparations are ongoing for the 0:08:52.520 --> 0:08:55.800 funeral of Queen Elizabeth the Second next week. Rehearsals are 0:08:55.840 --> 0:08:59.800 underway as hundreds of soldiers and bagpipers are practicing for 0:09:00.000 --> 0:09:02.440 what is expected to be the biggest international event the 0:09:02.520 --> 0:09:06.720 UK has hosted in decades. In Westminster Hall. Meanwhile, thousands 0:09:06.800 --> 0:09:10.160 continue to wait hours in long lines to pay their 0:09:10.200 --> 0:09:13.120 respects to the Queen as she lies in state, including 0:09:13.120 --> 0:09:16.040 this woman. We were talking before we came, so we 0:09:16.160 --> 0:09:19.199 can't see, do we fow? But when we s stood there, 0:09:19.360 --> 0:09:22.360 she didn't know what to do to one another, and 0:09:22.360 --> 0:09:25.600 we both just about and then it's just that really 0:09:25.640 --> 0:09:30.880 overwhelming feeling. That Special coverage of Monday's funeral can be 0:09:30.920 --> 0:09:33.680 heard live on Bloomberg Radio starting at six am Wall 0:09:33.720 --> 0:09:36.720 Street Time. The U S National Hurricane Center is keeping 0:09:36.760 --> 0:09:39.760 a close eye on the newly formed tropical storm Piona 0:09:39.840 --> 0:09:42.720 in the Caribbean. Forecasters say if the storm stays on 0:09:42.760 --> 0:09:45.199 its current track, it will move through the Leland Islands 0:09:45.200 --> 0:09:48.760 today as it heads toward the Virgin Islands and Puerto Rico. 0:09:49.240 --> 0:09:51.840 Global News twenty four hours a day on air and 0:09:51.960 --> 0:09:56.080 on Bloomberg Quicktake, powered by more than journalists and analysts 0:09:56.080 --> 0:09:58.760 and more than a hundred twenty countries. Michael Barn This 0:09:58.880 --> 0:10:05.920 is Bloomberg Natham. Thank you, Michael. Almost five ten on 0:10:06.000 --> 0:10:08.480 Wall Street Time for the Bloomberg Sports Update. Good Morning, 0:10:08.559 --> 0:10:11.120 John Stann Show, Morning Nathan, All Around Baseball. It was 0:10:11.240 --> 0:10:14.200 Roberto Clemente day and nearly fifty years after his death 0:10:14.200 --> 0:10:16.440 in a plane crash. The ceremony took place in New York. 0:10:16.440 --> 0:10:19.839 The Tampa Bay Rays started ten Latin players, first time 0:10:19.920 --> 0:10:22.520 that's happened in City field. The Mets all war Clement's 0:10:22.559 --> 0:10:25.360 number twenty one the eighth the Pirates Clemente's team six 0:10:25.400 --> 0:10:27.160 to one to snap a three game loving three. Daniel 0:10:27.200 --> 0:10:30.319 vogelback with the Mets acquired from Pittsburgh, had two h 0:10:30.480 --> 0:10:32.920 three RB I s fifteen twin for Carlos Carrasco. The 0:10:33.000 --> 0:10:35.559 Mets now lead Atlanta by one. Dame Yankees a left 0:10:35.559 --> 0:10:38.600 Frankie Montas on the mount tonight in Milwaukee. He's made 0:10:38.600 --> 0:10:41.640 seven starts with the Yankees, only one once Thursday Night 0:10:41.640 --> 0:10:44.240 Football to kick off Wake two. Chargers lead in Kansas 0:10:44.280 --> 0:10:47.079 City by ten. The Chiefs scored the next twenty and 0:10:47.160 --> 0:10:50.560 included that ninety nine yard interception returned by Jalen Watson 0:10:50.600 --> 0:10:52.079 with ten and a half minutes to go. That's not 0:10:52.280 --> 0:10:55.800 the tie case won seven twenty four cost the injury 0:10:55.800 --> 0:10:58.120 for Sea at all their stars safety Jamal Adams. The 0:10:58.160 --> 0:11:01.200 ex Jet done for the year. Wren Quad w NBA 0:11:01.240 --> 0:11:05.480 Finals the Connecticut Sons stayed alive, outscored Las Vegas to seven. 0:11:06.000 --> 0:11:08.160 In the fourth quarter, they went by twenty nine. The 0:11:08.200 --> 0:11:10.520 Aces still lead the best of five series to to one. 0:11:10.920 --> 0:11:13.680 Roger Federer third on the list of most brand slams 0:11:13.720 --> 0:11:16.800 one with twenty. He was passed by both Rapiano dal 0:11:16.840 --> 0:11:19.680 and Novak Djokovit, but Federer obviously had a brilliant career, 0:11:19.760 --> 0:11:23.560 ranked number one for two hundred and thirty seven consecutive weeks. 0:11:23.559 --> 0:11:26.600 He's retiring at age forty one. When my love of 0:11:26.640 --> 0:11:29.560 tennis started, I was a bull kid in my hometown 0:11:29.559 --> 0:11:32.160 of Bozel. I used to watch the players with a 0:11:32.200 --> 0:11:35.000 sense of wonder. They were like giants to me, and 0:11:35.000 --> 0:11:38.320 I began to dream. My dreams led me to work harder, 0:11:38.679 --> 0:11:41.199 and I started to believe in myself. Federal play one 0:11:41.200 --> 0:11:43.960 more event, the Labor Cup in London next week. John 0:11:44.000 --> 0:11:48.440 Stashward Bloomberg Sports Nathan Thanks John, SFP Futures now down 0:11:48.440 --> 0:11:51.560 thirty five points down, Futures down tundred forty two. Nastack 0:11:51.640 --> 0:11:55.199 Futures leading the declines this morning, down one hundred thirty 0:11:55.240 --> 0:11:58.440 four points. Seeing dollar strength this morning with the euro 0:11:58.559 --> 0:12:02.400 below parody at point nine. Will check in on this 0:12:02.440 --> 0:12:08.439 market next with Michael Houston of CMC Bloomberg eleven three 0:12:08.440 --> 0:12:12.040 oh weather mostly sunny today with the upper seventies sunshine 0:12:12.080 --> 0:12:14.480 to start the weekend with a high near eighty Tomorrow 0:12:14.960 --> 0:12:18.680 might hit ninety by Sunday. Right now fifty eight in 0:12:18.720 --> 0:12:25.160 Central Park Markets, headlines and breaking news twenty four hours 0:12:25.160 --> 0:12:28.160 a day at Bloomberg dot Com, the Bloomberg Business Out 0:12:28.280 --> 0:12:37.199 and at Bloomberg Quick Tape, He's a Bloomberg Business Flash 0:12:37.800 --> 0:12:40.640 and I'm Karen Moscow. And equities are extending to clins, 0:12:40.679 --> 0:12:42.880 with an index of global stocks on track for the 0:12:42.960 --> 0:12:45.840 worst week since June, while engage of the dollar sourced 0:12:45.840 --> 0:12:48.840 to a fresh record reflecting vets for outside Federal Reserve 0:12:48.920 --> 0:12:53.000 interest rate hikes. US stuck index futures are dropping, suggesting 0:12:53.040 --> 0:12:55.199 the cell off that drove the SNP five hundred to 0:12:55.280 --> 0:12:58.679 its lowest clothes in about two months yesterday isn't over yet. 0:12:58.760 --> 0:13:00.959 We checked the markets every fifteen minutes throughout the trading 0:13:01.040 --> 0:13:03.319 day on Bloomberg. Right now, US in P futures are 0:13:03.360 --> 0:13:06.120 done about thirty seven points down, futures down two hundred 0:13:06.200 --> 0:13:09.600 fifty four, and NASTAC futures down one hundred thirty seven. 0:13:09.840 --> 0:13:12.600 The decks in Germany's down one point seven percent, the 0:13:12.640 --> 0:13:15.240 ten year treasury down to thirty seconds you three point 0:13:15.240 --> 0:13:17.679 four or five percent they yield on the two year 0:13:17.800 --> 0:13:21.160 three point eight nine percent. Nim X screwde oil is 0:13:21.240 --> 0:13:23.920 little change at eighty five dollar seventeen cents of barrel 0:13:24.120 --> 0:13:26.600 comexs golled down four tenths per cent or seven dollars 0:13:26.600 --> 0:13:30.200 thirty cents at seventeen sixty announce or make that sixteen 0:13:30.280 --> 0:13:34.280 seventy announced Rather the euro point zero against the dollar 0:13:34.320 --> 0:13:36.599 British found one point one three seven seven and the 0:13:36.640 --> 0:13:39.280 yen one forty three point to five. And look at 0:13:39.280 --> 0:13:42.200 a big coin this morning, down half percent at nineteen thousand, 0:13:42.240 --> 0:13:45.440 seven hundred fifty dollars as of Bloomberg Business Flash. Now. 0:13:45.480 --> 0:13:47.880 Here's Michael Barr with more on what's going on around 0:13:47.880 --> 0:13:50.600 the world. Munchael, Good morning, Good morning Karen. In the UK, 0:13:50.800 --> 0:13:54.319 preparations are ongoing for the funeral of Queen Elizabeth the 0:13:54.400 --> 0:13:57.599 second next week me while thousands continue to wait for 0:13:57.720 --> 0:13:59.839 hours to pay their respects to the Queen is she 0:14:00.160 --> 0:14:03.720 lies in state in Westminster Home. Coverage of Monday's funeral 0:14:03.760 --> 0:14:06.200 can be heard live on Bloomberg Radio starting at six 0:14:06.240 --> 0:14:09.400 am Wall Street Time, a federal judge as a pointed 0:14:09.520 --> 0:14:12.640 veteran New York jurist Raymond Derry to serve as a 0:14:12.679 --> 0:14:15.960 special Master in the criminal investigation into the presence of 0:14:15.960 --> 0:14:19.760 classified documents at Donald Trump's Florida home. In baseball, the 0:14:19.800 --> 0:14:23.120 Mets beat the Pirates seven one, The A's Lost Farrisday 0:14:23.240 --> 0:14:27.280 Night Football, the Chiefs beat the Chargers. Four. Global News 0:14:27.280 --> 0:14:30.480 twenty four hours a day on are and on Bloomberg Quicktake, 0:14:30.720 --> 0:14:33.560 powered by more than twenty seven under journalist and analysts 0:14:33.640 --> 0:14:36.240 more than a hundred twenty countries. I'm Michael Barr. This 0:14:36.440 --> 0:14:38.720 is Bloomberg. Nathan all right, Michael, thank you. It is 0:14:38.800 --> 0:14:41.920 five nineteen on Wall Street Live from the Bloomberg Interactive 0:14:41.920 --> 0:14:45.080 Broker Studios. This is Bloomberg Daybreak. Want to go right 0:14:45.120 --> 0:14:48.440 now to Michael Howson joining his live chief market Analyst 0:14:48.520 --> 0:14:53.280 at CMC Markets. Michael, it is rough out there this morning. 0:14:53.440 --> 0:14:59.240 Does the gloom match what we're seeing in this economy? Yeah? 0:14:59.280 --> 0:15:02.720 I think think that's really the question that an awful 0:15:02.760 --> 0:15:05.680 lot of investors will be wrestling with as we look 0:15:05.760 --> 0:15:09.480 towards today's US open. I think if we look back 0:15:09.520 --> 0:15:13.040 at what FedEx said at the end of its last 0:15:13.080 --> 0:15:18.560 fiscal year, they were actually quite optimistic that despite rising costs, 0:15:18.640 --> 0:15:22.360 operating margins would improve because they upgraded their four year 0:15:22.360 --> 0:15:26.400 profit guidance of three. Here we are three months later 0:15:27.080 --> 0:15:30.200 and they pulled it completely. Now that suggests to me 0:15:30.280 --> 0:15:33.480 that something drastic has happened in the last three months. 0:15:33.480 --> 0:15:36.040 And certainly, I think if you look at the statement 0:15:36.040 --> 0:15:39.880 that they released last night, they've been caught out quite significantly. 0:15:40.320 --> 0:15:43.640 But really should we be surprised by this when we 0:15:43.680 --> 0:15:46.120 look at what energy prices have been doing in Europe, 0:15:46.120 --> 0:15:50.040 what's been happening in China. Um, it seems to me 0:15:50.120 --> 0:15:56.000 that obviously FedEx overstated their optimism in June and now 0:15:56.000 --> 0:15:58.680 are really cutting back quite significantly, and that really, I 0:15:58.720 --> 0:16:01.800 think should be worrying for an awful lot of investors. 0:16:02.360 --> 0:16:04.720 And I think as we head towards the end of 0:16:04.800 --> 0:16:07.880 the quarter and we looked towards October and the upcoming 0:16:07.920 --> 0:16:10.920 earning season, I think we could see quite a few 0:16:10.920 --> 0:16:13.600 more downgrades, and I think that's what we're seeing being 0:16:13.600 --> 0:16:16.160 reflected in the price action. How significant do you think 0:16:16.160 --> 0:16:22.200 those downgrades could be, Michael ah Well, as significant as 0:16:22.200 --> 0:16:24.600 probably the FedEx one that we've seen today. I mean, 0:16:25.240 --> 0:16:26.800 we're going to have to wait two or three weeks, 0:16:26.840 --> 0:16:28.400 but I don't think the market is going to wait 0:16:28.440 --> 0:16:31.240 for that. Um. I think the fact that Apple didn't 0:16:31.240 --> 0:16:33.840 increase its prices was telling. I think they feel that 0:16:34.000 --> 0:16:37.640 perhaps they won't be able to pass on those price increases. 0:16:37.680 --> 0:16:39.640 Having said that, I mean, Apple is a cash machine. 0:16:39.640 --> 0:16:43.080 They will still make plenty of profit. The bigger question 0:16:43.120 --> 0:16:45.600 will be will it be as much as people think? 0:16:45.680 --> 0:16:48.240 I mean, not for nothing. Is Apple not given any 0:16:48.240 --> 0:16:50.800 guidance for the past two or three years. So I 0:16:50.800 --> 0:16:54.720 think whatever the markets pricing market, Apple will comfortably beat. 0:16:54.720 --> 0:16:56.560 But I think it's going to be a very difficult 0:16:56.600 --> 0:17:02.240 six months UM for um con, humors and probably investors 0:17:02.280 --> 0:17:05.240 as well. Does this kind of market reaction we're seeing 0:17:05.680 --> 0:17:07.760 to the commentary that we're getting from some of these 0:17:07.800 --> 0:17:11.120 major companies have any effect on the Federal Reserve? Does 0:17:11.160 --> 0:17:16.000 it steers central bankers away from going for a jumbo? 0:17:16.080 --> 0:17:19.400 Says red hikes something bigger than seventy five basis points 0:17:19.400 --> 0:17:23.560 to try to achieve that soft landing that investors are 0:17:23.560 --> 0:17:25.959 looking for. Yeah, I don't think we're going to get 0:17:25.960 --> 0:17:28.399 a soft landing. I think it became much less likely. 0:17:28.760 --> 0:17:30.680 I don't think the Federal Reserve will do a hundred 0:17:30.720 --> 0:17:33.959 basis points next week. My base case has always been 0:17:34.000 --> 0:17:35.920 seventy five. I think when I spoke to you guys 0:17:36.000 --> 0:17:39.240 earlier this month, my base case was seventy five. That 0:17:39.280 --> 0:17:42.639 hasn't changed. What might change is what comes after that. 0:17:42.840 --> 0:17:48.000 So we could get fifty basis points perhaps in November, 0:17:48.600 --> 0:17:52.359 and potentially another fifty basis points in December. Ultimately, I 0:17:52.359 --> 0:17:55.480 think the Federal Reserve has it within its purview to 0:17:55.960 --> 0:17:59.240 manage its message so that it so that it doesn't 0:17:59.280 --> 0:18:02.280 unduly free the markets out. But I think seventy five 0:18:02.320 --> 0:18:05.440 basis points is a done deal. I don't think and 0:18:05.560 --> 0:18:07.720 these this this prediction could come back and hold me. 0:18:07.760 --> 0:18:11.639 I don't think I'll do our last minute here, Michael. 0:18:11.760 --> 0:18:15.919 The FED has said that it's gonna keep rates elevated 0:18:15.960 --> 0:18:18.080 for quite some time. What do you think it's gonna 0:18:18.160 --> 0:18:22.760 take for the Fed to pivot toward pulling back on 0:18:22.880 --> 0:18:25.120 rate hikes? Do you think it's I mean, how long 0:18:25.160 --> 0:18:28.200 do you think A while is going to be? I 0:18:28.200 --> 0:18:30.920 think they'll stop hiking the end of this year, and 0:18:30.960 --> 0:18:33.119 then we're going to have to get used to probably 0:18:33.160 --> 0:18:36.720 elevated rates for the next twelve to eighteen months before 0:18:37.000 --> 0:18:40.080 fed even considers a pivot. I think we could get 0:18:40.080 --> 0:18:43.359 a right cut if we get a recession that turns 0:18:43.400 --> 0:18:48.840 into a depression. Hopefully we won't get to that now. Indeed, 0:18:49.080 --> 0:18:51.119 thanks for this, Michael, I was always good to get 0:18:51.160 --> 0:18:55.040 your thoughts UH this morning. Michael Houston is the chief 0:18:55.119 --> 0:18:59.800 market analyst at CMC Markets. As we look at the market, 0:19:00.040 --> 0:19:03.840 it's UH pretty much read across the board around the world. 0:19:04.800 --> 0:19:07.920 Just thinking about what FedEx had to say about its outlook, 0:19:07.960 --> 0:19:11.160 pulling its outlook after raising it just three months ago. 0:19:11.160 --> 0:19:13.480 As Michael mentioned, it seems to be pervading into the 0:19:13.520 --> 0:19:17.320 market this morning. SMP futures are down thirty five points 0:19:17.359 --> 0:19:20.680 right now, DAL futures down two thirty nine and NASDAC 0:19:20.720 --> 0:19:23.920 futures leading the declines in a US futures contracts down 0:19:23.920 --> 0:19:26.000 a hundred thirty two points, a drop of one point 0:19:26.040 --> 0:19:29.159 one percent. Germany's DAX is down one point six percent, 0:19:29.200 --> 0:19:33.160 the CACK in Paris is lower by one point four percent. 0:19:33.240 --> 0:19:36.760 The tenure treasuries down three thirty seconds, yield three point 0:19:36.800 --> 0:19:39.680 four six percent. The yield on the two year three 0:19:39.720 --> 0:19:43.640 point eight nine uh dimex scrude little changed up about 0:19:43.640 --> 0:19:46.159 a tenth percent at eighty five dollars nineteen cents. The 0:19:46.160 --> 0:19:48.920 Beryl comex gold is down a third percent or five 0:19:48.960 --> 0:19:53.760 dollar sixty cents sixteen seventy seventy ounce Euro just below 0:19:53.800 --> 0:19:56.520 parody against the dollar at point nine nine seven two, 0:19:57.040 --> 0:20:01.080 and Bitcoin below twenty thousand at nineteen thousand, seven hundred 0:20:01.160 --> 0:20:08.360 fifty dollars. You're listening to Bloomberg Daybreak Bloomberg eleven three 0:20:08.359 --> 0:20:12.040 oh weather mostly sunny, upper seventies today, partly the mostly 0:20:12.080 --> 0:20:14.720 sunny with a high near eighty Tomorrow sun shines of 0:20:14.760 --> 0:20:17.040 afternoon cloud Sunday with highs in the upper eighties to 0:20:17.119 --> 0:20:25.520 around ninety. Right now prodcasting live from the Bloomberg Interactive 0:20:25.520 --> 0:20:29.400 Broker Studio in New York, Bloomberg E Living Freedom to Washington, 0:20:29.480 --> 0:20:33.600 d C. Bloomberg to Boston, Bloomberg one O six one 0:20:33.680 --> 0:20:37.160 to San Francisco, Bloomberg N sixteen to the Country, Sirius 0:20:37.280 --> 0:20:39.879 XM chant A one nineteen and around the globe, the 0:20:39.920 --> 0:20:43.800 Bloomberg Business app and Bloomberg Radio dot Com. This is 0:20:43.840 --> 0:20:52.320 Bloomberg Daybreak. It's five thirty on Wall Street. Good morning, 0:20:52.320 --> 0:20:55.399 I'm Nathan Hagar and I'm kerin Moscow. We're just about 0:20:55.440 --> 0:20:57.920 four hours away from the open of US trading. Let's 0:20:57.920 --> 0:20:59.440 catch you up to date on the news. You need 0:20:59.480 --> 0:21:02.440 to know what the sour. The stock slide is deepening 0:21:02.480 --> 0:21:04.560 as we close out one of the worst trading weeks 0:21:04.560 --> 0:21:07.720 since June. S and P futures are down about thirty 0:21:07.800 --> 0:21:10.760 seven points this morning, and Lisa Erickson had a public 0:21:10.800 --> 0:21:13.880 markets with US Bank Wealth Management says that shoppy nous 0:21:14.320 --> 0:21:17.080 is likely to continue. We've got the stock market and 0:21:17.160 --> 0:21:19.560 what I would call no man's land, and it's really 0:21:19.640 --> 0:21:22.359 because we are in a horse race to see how 0:21:22.480 --> 0:21:26.160 quickly inflation can come down and to what level. Lisa 0:21:26.280 --> 0:21:28.760 Ericson with US Bank says she expects the FED to 0:21:28.840 --> 0:21:32.320 keep tightening until inflation slows the meantime. Karen we get 0:21:32.359 --> 0:21:35.920 September sentiment numbers from the University of Michigan today, capping 0:21:36.000 --> 0:21:38.600 a busy week of data highlighted by a hotter than 0:21:38.600 --> 0:21:42.800 expected inflation report. Iniquity markets this morning, FedEx is the 0:21:42.920 --> 0:21:46.399 name on the move. Shares are down more than ninetent 0:21:46.520 --> 0:21:49.639 this morning after the company announced preliminary results for the 0:21:49.720 --> 0:21:54.360 quarter that missed expectations. Bloomberg's Ed Ludlow says macro economic 0:21:54.400 --> 0:21:57.480 weakness is weighing on FedEx. This is a company that's 0:21:57.520 --> 0:22:00.680 involved on cost production measures, right, and what they're saying 0:22:00.800 --> 0:22:04.600 is that the global slowdown in volume is outpacing, that 0:22:04.800 --> 0:22:07.280 they're monitoring closely fuel prices. But what they're saying is 0:22:07.320 --> 0:22:10.760 we can't keep up, Bloomberg said. Ludlow says FedEx expects 0:22:10.760 --> 0:22:14.399 financial pressures to continue in the short term, if not longer, 0:22:14.680 --> 0:22:16.600 and another stock falling in the pre market Care and 0:22:16.720 --> 0:22:19.400