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Speaker 1: Live from the Bloomberg Interacted Berger's studios. This is Bloombergy

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Speaker 1: day Break for Wednesday, February twenty second. Coming up today,

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Speaker 1: stocks are coming off their worst day of the year.

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Speaker 1: Investors wait for the release of the FED minutes from

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Speaker 1: this month's policy meeting. President Biden rally's support for Ukraine

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Speaker 1: in Eastern Europe as a fight for democracy, and China

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Speaker 1: calls ties with Russia solid as a rock. Let's suspected

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Speaker 1: tornado touchdown in southern New Jersey. Plus a suspect has

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Speaker 1: been charged with a hate crime for burning a Pride

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Speaker 1: flag at a Soho restaurant. I'm Michael Barr. More ahead,

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Speaker 1: I'm John Stashdown Sports. The Devil's lost to Montreal, a

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Speaker 1: coaching change in the NBA while the Nets extended their

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Speaker 1: coaches contract. That's all straight ahead on Bloomberg day Break,

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Speaker 1: The business news you need disturn your day in just

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Speaker 1: one fifteen minute podcast each pointing on Apple, Spotify, the

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Speaker 1: Bloomberg Business App, and everywhere you get your podcasts. Good morning,

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Speaker 1: I'm Nathan Hager and I'm kieron Moscow. Here are the

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Speaker 1: stories we're following today. Stocks are coming off their worst

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Speaker 1: day of the year. The S and P five hundred

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Speaker 1: opened up the holiday short and trading week with a

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Speaker 1: two percent decline, while the tech heavy NASDAC one hundred

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Speaker 1: fell two point four percent. Week. Earnings and fears of

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Speaker 1: more interest rate hikes from the Federal Reserve are weighing

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Speaker 1: on equities. Goldman Sachs Chief Global Equity strategist Peter Roppenheimer

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Speaker 1: says US stocks are now far less attractive. The US

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Speaker 1: equity market remains quite expensive, trading at over eighteen times.

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Speaker 1: That's quite a bit above it's longer run average. Most

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Speaker 1: other equity markets trade below their longer run averages, and

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Speaker 1: that's true in Europe as well, the most extreme cases

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Speaker 1: in the UK, which has been our preferred European market

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Speaker 1: was the best performing major index last year. We still

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Speaker 1: think there's a lot of upside. Goldman's Peter Roppenheimer spoke

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Speaker 1: exclusively with Bloomberg from the Goldman Sachs Global Macro Conference

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Speaker 1: Asia Pacific. Here. More of that interview in just a

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Speaker 1: few minutes here on Bloomberg Daybreak. Well, Nathan, we'll get

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Speaker 1: more clues on the direction of interest rates when the

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Speaker 1: Fed issues minutes from this month's policy meeting, and Bloomberg's

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Speaker 1: Michael McKee has a preview. The surprise has gone now

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Speaker 1: that the presidents of the Cleveland and Saint Louis fedbanks

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Speaker 1: have said they saw a case for a half percentage

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Speaker 1: point increase at the February first meeting. If there were

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Speaker 1: a significant number of others who felt the same way,

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Speaker 1: that could influence views of the Fed's next move, given

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Speaker 1: the strong data we've seen since then. Moreover, at his

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Speaker 1: post meeting news conference, FED Chair j Powell teased a

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Speaker 1: discussion on the path forward for rates that we'd learn

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Speaker 1: about when the minutes were released. What might have been

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Speaker 1: said about how high rates will need to go, how fast,

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Speaker 1: and for how long. A lot of that will depend

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Speaker 1: on how FED officials felt about the prospects for inflation.

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Speaker 1: Another discussion to watch in the minutes. Michael McKee, Bloomberg Daybreak,

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Speaker 1: All Mike, Thanks. Turning to geopolitics, President Biden is wrapping

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Speaker 1: up his trip through Eastern Europe, marking a year since

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Speaker 1: Russia's invasion of Ukraine. He'll meet with leaders of the

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Speaker 1: so called Buchreest. Nine nations have aided Ukraine with weapons

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Speaker 1: and refugee assistants in a major speech in Warsaw, the

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Speaker 1: President said Ukraine's fight as united the West. President prudness

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Speaker 1: Kurfronto was something today that you didn't think was possible

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Speaker 1: a year ago. The democracy of the world have grown stronger,

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Speaker 1: not weaker, but the autocrats of the world have grown weaker,

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Speaker 1: not stronger. Former US Ambassador to NATO Kurt Volker says

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Speaker 1: that strength will be tested as the war continues. So

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Speaker 1: much of the speech sounded like we're already declaring victory.

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Speaker 1: That okay, well, we've succeeded here, but the war is

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Speaker 1: far from over. Russia is still recruiting people and throwing

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Speaker 1: them at the front line. We have not given the

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Speaker 1: Ukrainians the longest range communitions that they need, not giving

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Speaker 1: them any aircraft, So there's a long way to go.

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Speaker 1: Former NATO Ambassador Kurt Volker spoke with our Washington correspondent

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Speaker 1: Joe Matthew on Bloomberg's Sound on Catch the show weekdays

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Speaker 1: at five pm Eastern on Bloomberg Radio or listen on

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Speaker 1: demand wherever you get your podcast. Meanwhile, Nathan China's top

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Speaker 1: diplomat is callings with Russia quote solid as Rockhang Yi

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Speaker 1: was in Moscow to meet with the secretary of the

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Speaker 1: Russian Security Council and a high level support might not

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Speaker 1: in there. The Wall Street Journal is reporting Chinese President

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Speaker 1: Xi Jinping is preparing to visit Moscow. We get more

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Speaker 1: from Bloomberg's John Lou and Beijing. At the end of

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Speaker 1: last year, in the Semmer thirtieth, she and President Putin

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Speaker 1: did have a phone call, and during that phone call,

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Speaker 1: President Putin did say to Chijimin that he looked forward

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Speaker 1: to she visiting Moscow in the spring. So we've been

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Speaker 1: looking for a visit of some sort. It has not

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Speaker 1: been confirmed or acknowledged by the Chinese side, and Bloombergs

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Speaker 1: John Lou report she has yet to talk with Ukrainian

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Speaker 1: President vladimir's Lenski since the invasion. He's spoken with Russian

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Speaker 1: President Vladimir Putin at least four times in the last year.

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Speaker 1: Let's turn to corporate news now. Karen McKinsey and Company

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Speaker 1: is known for devising plans to cut workers for its clients.

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Speaker 1: Now the consulting firm is taking the acts to some

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Speaker 1: of its own. We get more from Bloomberg's Doug Prisoner.

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Speaker 1: McKinsey and to eliminate about two thousand jobs in one

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Speaker 1: of the firm's biggest rounds of cuts ever. The plan

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Speaker 1: has been dubbed Project Magnolia. It's expected to focus on

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Speaker 1: support roles that don't have direct contact with clients. The

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Speaker 1: aim is to help McKinsey's management team preserve the compensation

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Speaker 1: pool for its partners. Over the past decade, the firm

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Speaker 1: has seen rapid growth and headcount. Now it's looking to

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Speaker 1: restructure how it organizes support teams and centralize some of

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Speaker 1: its roles. The plan is expected to be finalized in

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Speaker 1: the coming weeks. In New York, I'm Doug Prisoner Bloomberg Daybreak.

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Speaker 1: All right, Doug, thank you well. Job cuts aren't the

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Speaker 1: only recent trend for many companies, so are pay cuts.

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Speaker 1: But at least one Wall Street ceo is bucking the trend.

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Speaker 1: City Groups. Jane Frasier collected twenty four and a half

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Speaker 1: million dollars in compensation last year, and we get more

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Speaker 1: from Bloomberg's Shirley Pillared. It makes her the only major

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Speaker 1: American bank CEO to get a bump in compensation for

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Speaker 1: the year, according to a filing. In her first full

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Speaker 1: year atop the company, Frasier was granted stock awards, totaling

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Speaker 1: about nineteen point six million dollars, a cash bonus of

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Speaker 1: three point four five million, and one and a half

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Speaker 1: million dollars in salary. The move comes after rivals Bank

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Speaker 1: of America and Goldman Sacks cut CEO pay, while JP

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Speaker 1: Morgan Chase and Wells Fargo left their's unchanged. In New York.

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Speaker 1: Charlie Pellett Bloomberg Daybreak and Charlie another Wall Street firms

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Speaker 1: cracking down on artificial intelligence. Bloomberg News has learned JP

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Speaker 1: Morgan Chase's curbing staff use of the chat GPT chat bot.

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Speaker 1: Sources say it's not triggered by any specific event, but

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Speaker 1: if like normal controls around third party software, we'll turn

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Speaker 1: cloudy today. Showers this afternoon with a high near forty

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Speaker 1: five degrees. Temperatures will rise overnight. It's thirty nine degrees

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Speaker 1: right now. Time now to take a look at some

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Speaker 1: of the other stories making news in New York and

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Speaker 1: around the world. Good morning, Michael Barn, Good morning Nathan.

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Speaker 1: A fast moving storm left a trail of damage and

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Speaker 1: down tree after a rare February tornado warning was issued

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Speaker 1: for parts of southern New Jersey. The National Weather Service

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Speaker 1: said that it received reports of a possible tornado touching

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Speaker 1: down in Mercer County. This woman lives in Lawrenceville and

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Speaker 1: describes the moment the storm went over her home. I

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Speaker 1: just heard it from the back room, saying, getting in

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Speaker 1: the ladger room, getting launde room. We just heard the

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Speaker 1: gust of wind and then we saw the funnel come

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Speaker 1: right across our window. So definitely very unexpected for way.

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Speaker 1: Appeared to be a really beautiful day so far, no

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Speaker 1: reports of any serious injuries. A strong, widespread winter storm

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Speaker 1: will sweep across the northern United States this week. Bloombergs D.

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Speaker 1: Baxter as the story moving from west to east. It

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Speaker 1: has already started with heavy winds here in the Bay Area,

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Speaker 1: the wind strong enough to blow down a tree across

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Speaker 1: the Bay Bridge, causing a traffic nightmare for some time.

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Speaker 1: Snow do to follow on some higher peaks later. The

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Speaker 1: storm will then move east, where Minneapolis will take the

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Speaker 1: brunt of the impact, getting fifteen to twenty five inches

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Speaker 1: of snow through Thursday. The National Weather Service says on

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Speaker 1: the historic storm will move up to New England, which

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Speaker 1: may get up to eighteen inches by Friday. In San Francisco,

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Speaker 1: I'm at Baxter Bloomberg daybreak, the nypd AS arrested a

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Speaker 1: suspect after a Pride flag was set on fire outside

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Speaker 1: of a Manhattan restaurant in Soho. Thirty year old Angelina

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Speaker 1: Condo was charged with hate crimes, including arson, mischief, and

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Speaker 1: reckless endangerment. The flag, which read make America Gay Again,

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Speaker 1: was set on fire early Monday at the Little Prince Restaurant.

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Speaker 1: Attorney Benjamin Crump says on behalf of civil right leader

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Speaker 1: Malcolm X's surviving daughters, he will file a notice of

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Speaker 1: claim with intent to sue government agencies, including the FBI

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Speaker 1: and the New York City Police Department, over fraudulant concealment

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Speaker 1: of evidence in their father's murder. The truth of what

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Speaker 1: happened and who was involved has always been critical. Malcolm

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Speaker 1: X was shot multiple times while preparing to speak in

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Speaker 1: Washington Heights in nineteen sixty five. The two men originally

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Speaker 1: convicted of killing Malcolm X were exonerated more than eighteen

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Speaker 1: months ago. Global News twenty four hours a day, powered

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Speaker 1: by more than twenty seven hundred journalist and analysts in

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Speaker 1: over one hundred twenty countries. Michael Barr, this is Bloomberg Nathan.

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Speaker 1: Thank you, Michael, except for the Bloomberg Sports update Prounty

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Speaker 1: by Tri State Outie. Here's John stashanks Nathan. First half

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Speaker 1: of the NFL offseason, teams needed to make a decision

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Speaker 1: on whether to apply the franchise tag. The window just opened.

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Speaker 1: The deadline not until March eighth, and teams often wait

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Speaker 1: to decide. It's going to be an interesting call. To

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Speaker 1: the Giants, it's clear they did not want to risk

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Speaker 1: losing quarterback Daniel Jones the free agency. If they can't

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Speaker 1: sign him to a long term deal, they'd like me

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Speaker 1: franchise him. If they do sign Jones, they could then

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Speaker 1: franchise sat Quan Parkley. Derek Carr released by the Raiders.

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Speaker 1: He's free to sign with another team right away, and

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Speaker 1: this past weekend, Carr was seen dining in New Jersey

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Speaker 1: with Jets coach Robert Sala. Car also met with the Saints.

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Speaker 1: His brother David wants an NFL QB himself said he

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Speaker 1: thinks it's going to be a long process. The Nets

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Speaker 1: have made a decision on coach Jack Vaughan. He's stayed

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Speaker 1: in Brooklyn. Vaughn this season has gone from assistant to

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Speaker 1: interim head coach to permanent and now his contract extended

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Speaker 1: through twenty twenty seven. The Atlanta Hawks fired their coach

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Speaker 1: Nate McMillan, Devil's lost at home to Montreal five to two,

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Speaker 1: and Yankee camp let the shortstop competition begin. Will it

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Speaker 1: again be Isaiah Connor, Felefa or one of three youngsters,

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Speaker 1: Oswald Parazza, Oswaldo Cabrera or Anthony Volpe making it a call?

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Speaker 1: Will be managing Aaron Boone. I don't think there's any

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Speaker 1: way that I'm hoping it necessarily goes. You know, you

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Speaker 1: like it to declare itself, I guess on some level,

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Speaker 1: but you like for the guys to continue to make

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Speaker 1: it hard because you feel like they all bring something

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Speaker 1: potentially special to the table. And another matter, Boone says

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Speaker 1: that when John Carlos Stanton doesn't DH plays the outfield,

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Speaker 1: it could be in right with Aaron Judge moving to left,

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Speaker 1: John Stash Edward Boomber's Live from coast to coast from

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Speaker 1: New York to San Francisco, Boston to Washington, d C.

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Speaker 1: Nationwide on Sirius Examp, the Bloomberg Business app, and Bloomberg

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Speaker 1: dot Com. This is Bloomberg Daybreak, Good morning, I'm Nathan Hagar.

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Speaker 1: If investors put their money overseas, they could see big

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Speaker 1: returns from Asia. That's according to Peter Oppenheimer, the chief

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Speaker 1: Global equity strategist at Goldman Sachs. Oppenheimer spoke exclusively with

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Speaker 1: Bloomberg's Annabel Drulers from the sidelines Goldman's Macro Conference Asia Pacific.

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Speaker 1: They discussed the outlook for US and global equity markets,

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Speaker 1: treasury bills, and where Peter Oppenheimer is looking for opportunity.

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Speaker 1: Let's bring you part of that conversation. Now, we just

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Speaker 1: spoke there about the moose that was seen in treasury markets.

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Speaker 1: But generally, when you can get five percent on a

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Speaker 1: tea bill risk free at the moment, what does that

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Speaker 1: tell you about the alec for equities. Well, overall, it

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Speaker 1: tows in not particularly attractive and it's confusing pitchings ways,

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Speaker 1: because we as a house had been pretty optimistic about

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Speaker 1: the global economic outlook long, expecting the US to avoid recession.

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Speaker 1: We don't have recessions now forecast, even in Europe, which

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Speaker 1: was really at the epicenter of the risks last year

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Speaker 1: with rising gas prices. But I would say two things.

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Speaker 1: First of all, equity markets are really pricing that outcome now,

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Speaker 1: we don't think they're pricing a recession. And secondly, as

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Speaker 1: you say, you're getting quite a high return in competing

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Speaker 1: assets with much less risk. So overall, the biggest market

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Speaker 1: in the world, we're looking at a flat return. We've

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Speaker 1: been preferring non US markets for quite some time. We

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Speaker 1: still do, but even they're the absolute returns we think

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Speaker 1: are going to be relatively modest overall at the index level.

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Speaker 1: Assume modest returns overall. Where are you then looking to

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Speaker 1: get the most alpha? Well, I would say two things. Firstly,

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Speaker 1: if you take all of the regions globally, we've got

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Speaker 1: the highest return forecasts in Asia's partly a valuation story

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Speaker 1: in a recovery the opening up of China. And secondly,

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Speaker 1: I think you really need to look within beneath the

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Speaker 1: equity index level to really find better relative opportunities. Now

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Speaker 1: that's been the story ready for much of the last year,

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Speaker 1: where we found for the first time in more than

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Speaker 1: a decade, valuation really matter. Cheaper things outperformed in the

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Speaker 1: previous decade. Generally more expensive things were outperforming, and we

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Speaker 1: think that will continue. So we like pockets of value

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Speaker 1: in Europe, where I cover in particular, we've had a

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Speaker 1: strong preference for banks, which have been a disastrous performing

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Speaker 1: area for more than a decade and over the last

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Speaker 1: year have performed well. We think there's more to go there.

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Speaker 1: We like energy and commodity related sectors as well, and

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Speaker 1: we sort of balance that with a preference for stable

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Speaker 1: margin businesses across industries. And that's true globally. When you

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Speaker 1: talk about Europe out performing the US, what exactly do

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Speaker 1: see driving that? I would say it's a couple of things.

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Speaker 1: First of all, valuation. The US equity market remains quite expensive,

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Speaker 1: trading at over eighteen times. That's quite a bit above

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Speaker 1: its longer run average. Most other equity markets trade below

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Speaker 1: their longer run averages, and that's true in Europe as well,

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Speaker 1: the most extreme cases in the UK, which has been

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Speaker 1: our preferred European market was the best performing major index

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Speaker 1: last year. We still think there's a lot of upside.

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Speaker 1: That's partly because it's very cheap, and partly also because

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Speaker 1: it's got more exposure to the things that no one

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Speaker 1: really wanted in the last decade, which was very dominated

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Speaker 1: by large cap tech. But it does have a lot

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Speaker 1: of exposure to these things that are finally seeing quite

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Speaker 1: strong fundamental learnings growth thanks healthcare resources. Yeah, that split

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Speaker 1: between value versus growth, but talk specifically because is it

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Speaker 1: really right to look at it in those terms or

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Speaker 1: how should people be really approaching value as a sector.

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Speaker 1: There's a sort of tendency to look at everything in

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Speaker 1: a very binary way, and that's the approach that many

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Speaker 1: people have taken really since the financial crisis, because there

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Speaker 1: was such an extreme difference between the growth factor and

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Speaker 1: the value factor, and as that's reversed, it's almost as

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Speaker 1: if people believe that you could see the same secular

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Speaker 1: trends in the opposite direction. I think it's going to

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Speaker 1: be more eclectic. We do like areas of value, but

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Speaker 1: we like to balance that against pockets of growth that

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Speaker 1: we don't think are that expensive and where you've got

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Speaker 1: more stable margins. That's what really the market is paying for,

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Speaker 1: so things like healthcare we've fitted into that. If you

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Speaker 1: look at Europe, the biggest companies, the eleven biggest that

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Speaker 1: we call the granolas, have become very large in the index,

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Speaker 1: twenty five percent of the six hundred biggest companies. In

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Speaker 1: a similar way that the big tech stocks became very

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Speaker 1: large in the US. The difference, though, is that these

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Speaker 1: super large European companies are still seeing stable and high margins,

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Speaker 1: and that's maintaining their attraction and his relativety defensive growth

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Speaker 1: airs of the market. This is Bloomberg Daybreak Today, your

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