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Speaker 2: App on Wall Straight On my Secuity Market, Liz Young,
Speaker 2: head of investment strategy at so Far, Liz, wonderful to
Speaker 2: see you and thanks for being with us. I think
Speaker 2: the question of the moment can this market rally broaden out?
Speaker 2: Can it? Liz?
Speaker 3: Well, it always can, and you know we're obviously in
Speaker 3: the beginning of a very important week, and each FED
Speaker 3: meeting continues to be the most important one since the
Speaker 3: last one. But what we've seen over the last week
Speaker 3: or so is that you are getting some strength from
Speaker 3: some of those sort of regular stocks. We've got now
Speaker 3: more than fifty percent of the SMP back above the
Speaker 3: two hundred day moving average, which is a good sign.
Speaker 3: And you're getting participation from sectors that hadn't participated in
Speaker 3: this rally since probably last year at some point, So
Speaker 3: it's important to have those signals. It's important to see
Speaker 3: smaller cap stocks participating because that's what you would expect
Speaker 3: if we were in the early expansion phase or if
Speaker 3: we were in a newer bowl market. The big question now,
Speaker 3: and we continue to see this throughout this entire cycle,
Speaker 3: as we get to these decision points. The next level
Speaker 3: on the SMP that everybody's want is forty three twenty five,
Speaker 3: which was the intra day high last August. Can we
Speaker 3: make it to that point and beyond? And that continues
Speaker 3: to be the big question. I don't know that we're
Speaker 3: going to see this strength persist through what continues to
Speaker 3: be a hiking cycle and pressure on valuation Lisz so
Speaker 3: far as a.
Speaker 1: Different remit what are you seeing from SULFI clients, the customers,
Speaker 1: the people that make so far go, What are you
Speaker 1: seeing in terms of their relative gloom or optimism? I
Speaker 1: get mixed signals.
Speaker 4: Well, it's interesting.
Speaker 3: We tend to skew younger, especially on the investor side,
Speaker 3: so you end.
Speaker 1: Up under sixty, under sixty, under sixty five sixty nice Liz,
Speaker 1: keep it on, Liz, book the interurn over here, booked,
Speaker 1: what the hell is that about? Keep it going list.
Speaker 3: So what you generally see from a younger investor is
Speaker 3: still interest in headline making names. You want titans of
Speaker 3: tech and sort of the disruptors, So there is still
Speaker 3: a lot of interest and appetite for those names. One
Speaker 3: of the things that has been surprising to me that
Speaker 3: even after last year's tough market, we did a lot
Speaker 3: of surveys of our investors, and you hear things like
Speaker 3: we're still planning to invest just as much, if not more,
Speaker 3: despite the bear market. So it's encouraging that you still
Speaker 3: even have on the younger end of the spectrum, people
Speaker 3: have appetite for long term investing and understanding, maybe more
Speaker 3: so than we expected that bear markets do happen that
Speaker 3: this is part of long term investing. I think in
Speaker 3: the short term, the headlines do drive a lot of
Speaker 3: that sentiment. And obviously, something that we've seen over the
Speaker 3: last week with every investor, not just the SOFI investor,
Speaker 3: is that once the market starts to move in a
Speaker 3: different direction and you've got some optimism that starts to
Speaker 3: show up in the tape, suddenly everybody sentiment changes. And
Speaker 3: that's a good thing, I think for the appetite and
Speaker 3: the buying opportunities that people might see. However, it does
Speaker 3: sometimes skew the risk that's still lurking out there, especially
Speaker 3: in a rising rate environment. So multiple expansion is not
Speaker 3: something that I think many investors have understood from both
Speaker 3: sides of the coin in the last couple of years.
Speaker 3: Because multiple expansion has been supported largely by monetary policy liquidity,
Speaker 3: and now we're in this environment where a lot of
Speaker 3: that is coming out of the system. I don't think
Speaker 3: multiple expansion is warranted right now, and it's something that
Speaker 3: I think starts to sort of trick a more.
Speaker 4: Unexperienced investor.
Speaker 5: Is big tech no longer interest rate sensitive?
Speaker 3: I think it's still interest rates sensitive. If you're looking
Speaker 3: at it just in a growth bucket, right, But that's
Speaker 3: not necessarily how investors have treated Big Tech.
Speaker 4: I think they've actually.
Speaker 3: Removed those big names from the growth bucket and they're
Speaker 3: thinking of them in a different way, partially thinking of
Speaker 3: them in a defensive manner. And this is the part
Speaker 3: of the economy that's going to continue to lead and
Speaker 3: going to be strong for us for the rest of
Speaker 3: seemingly our lives. But then there's also so this other
Speaker 3: piece of it that people have gotten very enthusiastic about
Speaker 3: with the AI theme. The thing about a theme is
Speaker 3: that you usually invest in a theme for a two
Speaker 3: to five year period. There's been so much enthusiasm about
Speaker 3: AI in the last few months.
Speaker 4: I just don't think people are going to.
Speaker 3: Get the gratification of that enthusiasm as quickly as they
Speaker 3: want to. So if you're thinking about stock from a
Speaker 3: growth in value perspective, big Tech is probably acting a
Speaker 3: bit different than what we would expect from a growthy
Speaker 3: name in this environment. That hasn't necessarily changed, and it's
Speaker 3: something that I think has served investors well over most
Speaker 3: of this cycle. There hasn't really been a big reason
Speaker 3: to believe otherwise yet.
Speaker 2: Lis Young so find Liz Erowa so always welcome back.
Speaker 2: Thank you LIZI, thanks catching up, Thank you. That's a wife.
Speaker 1: We are thrilled to Michael Mayo with this managing director
Speaker 1: at Wells Fargo. Here off of twenty years, I will say,
Speaker 1: Mike Mail of covering banks, of covering ubs, of covering
Speaker 1: credit suite in the rest. So let's talk about this
Speaker 1: historic day. We go SBC ubs, UBS takes out credit
Speaker 1: suite and here we are. Was this because of greed?
Speaker 1: Was this because of the absolute demand to create revenue.
Speaker 1: We don't care what the quality of the revenue is
Speaker 1: going to be. We just need to get new revenue.
Speaker 1: Is that what happened to your credit suite? Well?
Speaker 6: I didn't officially cover credit suite, but I can comment
Speaker 6: on the European banks, which has sure woefully lagged the
Speaker 6: US banks. And some of this is structural. After the
Speaker 6: global financial crisis, they did not recapitalize at the pace
Speaker 6: of the US banks. And some of this is simply cultural,
Speaker 6: which I lived through, and it was sometimes growth at
Speaker 6: any price, growth that you know, extraordinary risk. And so
Speaker 6: I'd say there are some culturally flawed European organizations or
Speaker 6: which that I worked at. But it's played out through
Speaker 6: the numbers, and it's relevant to by analysis of the
Speaker 6: US banks now because Goliath is winning and the goliath
Speaker 6: are the largest US bank.
Speaker 1: Is mister Ormadi in his red lines going to be
Speaker 1: a change agent and can mister Diamond, with a completely
Speaker 1: separate issue this Epstein scandal be a change agent towards
Speaker 1: and more discerning choice of clients.
Speaker 6: Well, you know your customer is banking one oh one,
Speaker 6: and I don't deal directly with, say the investment banking clients,
Speaker 6: but I have a compliance exam several times a year,
Speaker 6: as does everybody on Wall Street in the United States.
Speaker 7: But there might be.
Speaker 6: More restrictions on which clients you're allowed to take. So
Speaker 6: there's going to be an extra check, and so it's
Speaker 6: not all clients come to us. It's going to be
Speaker 6: a smaller subset of what you deal with today.
Speaker 8: You say goliaths are winning, are the smaller banks losing?
Speaker 8: Just putting aside Europe.
Speaker 6: Yes, we conducted an analysis. We did a kitchen sink
Speaker 6: analysis where we had four haircuts. One haircut was deposits
Speaker 6: leave by another eight percent in the industry. Another haircut
Speaker 6: would be provisions equal to a recession level, extra expenses
Speaker 6: for new regulation. And we have the Fed fund rake
Speaker 6: go all the way down to two point seventy five percent,
Speaker 6: which would hurt the net interest margins. Regional banks get
Speaker 6: hurt by twenty five percent to earnings. Large banks get
Speaker 6: hurt by maybe five percent ten percent. So Goliath is
Speaker 6: winning and Goliath is winning even more. But I wanted
Speaker 6: to make one clear statement today and that relates to
Speaker 6: actually the regional banks for making some comeback. And so
Speaker 6: the statement is that the detour for Garriot Okay, well,
Speaker 6: you know I'm cheesy. I have my props. A detour
Speaker 6: for not owning banks docs is over.
Speaker 1: So those of you it's like end construction. So those
Speaker 1: are you on the radio? He's got give me that
Speaker 1: road sign over there, bringing a stop sign next time
Speaker 1: it might stop m MD tour is what he's saying
Speaker 1: on radio. It's one of those range it's one of
Speaker 1: those range signs, like the real sign. What do you say,
Speaker 1: steal us off the construction sign for the Bloom's your
Speaker 1: head top? He stole his sign off the construction side
Speaker 1: of the Bloomberg pothole at Lexington and fifty eight.
Speaker 8: All right, the prop aside, I am wondering why now,
Speaker 8: because you talk about this potential twenty five percent hit
Speaker 8: to their profits. This is significant. You basically just saying
Speaker 8: it's priced in. We've priced in all of that and
Speaker 8: then some. So it's time to hoover up some of
Speaker 8: these smaller stocks that have gotten being up.
Speaker 6: Well, what I say, the larger regional banks, Look, they're
Speaker 6: not going to zero. You had your failures from idiosyncratic events.
Speaker 6: They're not raising equity at least the largest banks. Look,
Speaker 6: you've had three banks that were in the S and
Speaker 6: P five hundred at the start of the year that failed. Okay,
Speaker 6: that's done. All right, So this idea, this almost hysteria
Speaker 6: as relates to the largest banks, it is over, and
Speaker 6: it's been over for the last four weeks. I mean,
Speaker 6: these the banks have gone up by over ten percent
Speaker 6: during that time. They've outperformed the S and P five hundred,
Speaker 6: but they've no way caught up to the broader SMP
Speaker 6: five hundred. So you're saying, what could have legs in
Speaker 6: the market bank stock? The larger bank stock certainly could.
Speaker 6: Like a US bank court which has been pummeled and
Speaker 6: it's one of the highest quality banks out.
Speaker 8: There, although in fairness they haven't gotten pummeled as much
Speaker 8: as some of the others. And I do wonder, I mean,
Speaker 8: I get your point. With those particular ones. Do the
Speaker 8: largest mid sized banks hold up even if you get
Speaker 8: additional failures on the lower end at a time when
Speaker 8: the emergency landing facility at the FED is still being
Speaker 8: used at a pretty significant rate.
Speaker 6: Well, I'm going to avoid your question just for one moment.
Speaker 6: There's a big news last week, and I think the
Speaker 6: one outlook that really picked up when it was Bloomberg.
Speaker 6: There was over ten billion dollars of debt issued by
Speaker 6: the large regional banks. It was the first issue since
Speaker 6: the failure of Silicon Valley. It was four to five
Speaker 6: times oversubscribed and the spreads came in pretty well. So
Speaker 6: for those banks, yes, below that level, below the level
Speaker 6: the top ten banks, it's still to be determined how
Speaker 6: much wherewithal they'll have to access the debt markets. That
Speaker 6: hasn't happened yet, So you're right, there is a divide.
Speaker 6: Golias are winning. The next level down is tap the
Speaker 6: markets below that. It weighed the scene and once you
Speaker 6: get past this acute stage, you still have a recession
Speaker 6: with commercial real estate, and most of the commercial real
Speaker 6: estate loans are for banks below the top ten.
Speaker 1: Move the decimal point, Mike Mayo, City Group after a
Speaker 1: ten to one reverse split way back four dollars eighty
Speaker 1: three cents, which is basically unchanged from two thousand and nine.
Speaker 1: I detect some Jane Fraser moves. They seem to be
Speaker 1: consolidating and simplifying the process. What is the new What
Speaker 1: is the next City Group look like?
Speaker 6: The next City Group looks a lot like the old
Speaker 6: City Group before the merger in nineteen ninety eight. So
Speaker 6: this is City Groups the silver anniversary.
Speaker 1: Gospel folks, This goes back to when Mayo was candid,
Speaker 1: credit sweet.
Speaker 6: Continue and so this is City Group's silver anniversary. It's
Speaker 6: their twenty five year anniversary, and it's certainly not a
Speaker 6: cause for celebration. The stocks down over three fourths at
Speaker 6: a time, the stock markets more than tripled. They failed
Speaker 6: on almost every measure.
Speaker 1: What is she doing different? What does the courage she's
Speaker 1: doing right now to get them back to John Reid?
Speaker 6: Well, she's simplifying. You know the old adage, Tom, is
Speaker 6: that global banking, wholesale banking, is global. Consumer banking is local,
Speaker 6: and that even predates this merger. This goes back to
Speaker 6: Walter Riston and we're talking about a fifty year failed
Speaker 6: strategy where City Group thought they could go ahead and
Speaker 6: you know, you know, have a customer in Hong Kong
Speaker 6: whose kids go to boarding school in London and they
Speaker 6: vacation and aspen and we're going to serve that life.
Speaker 6: What's that?
Speaker 8: Now?
Speaker 7: Got one more question life, Teddy.
Speaker 6: That's failed. She's reversing that, going global with wholesale and
Speaker 6: getting rid of the non US consumer.
Speaker 5: You dodged one thing. So I'm going to come back
Speaker 5: to it just real quickly.
Speaker 8: If smaller banks start to fail again, are all bets
Speaker 8: off with the largest regionals.
Speaker 6: The smallest banks are not systemic. There's over forty five
Speaker 6: hundred banks. You're going to have bank failure. That's a
Speaker 6: rule of banking. But it's not going to be any
Speaker 6: bank in the SMP five hundred in my view over
Speaker 6: the you know, many immediate time frames. So that phase
Speaker 6: is over. It's the you know this idea of you know, Tom,
Speaker 6: you can hold it up, the idea.
Speaker 5: Just don't hit hear it again.
Speaker 6: The detour away from banks has ended right if we can.
Speaker 1: Okay, we got twenty seconds MD tour, MD tour. What's
Speaker 1: your single best buy right now?
Speaker 6: You know, I'm going with JP Morgan and City Grew
Speaker 6: as my top two pick, but I'm also adding in
Speaker 6: there right now the US Bancorp, which has been relatively
Speaker 6: pummeled given the quality should.
Speaker 1: Hit him in the head. No, thank you so much.
Speaker 1: Probert Tip is the chief investment strategist for p JUM.
Speaker 1: Robert just simply, right now, what are you doing to
Speaker 1: adjust for a mid year adjustment? Everyone in equity land
Speaker 1: is adjusting like crazy, particularly bears or near bears. How
Speaker 1: does fixed income adjust.
Speaker 9: Right? Well, I think to Lisa's point there, you know,
Speaker 9: are people ignoring some of the data and some of
Speaker 9: the market messages in terms of the the equity market.
Speaker 9: People have been very zeroed in on the narrowness of
Speaker 9: the rally with tech stocks. But you know, the fact
Speaker 9: of the matter is on a country basis, Europe Japan
Speaker 9: have been doing really well even before the US, so
Speaker 9: there's a breadth of growth out there. And the reason
Speaker 9: I mentioned that, because that is the threat to the
Speaker 9: fixed income market, is that the economy is doing reasonably well.
Speaker 9: But if you wondered what a price wage spiral looks like,
Speaker 9: I think you're looking at it. You know, it's been
Speaker 9: some time here where wages have budged, they've moved up,
Speaker 9: they're not surging, but some of the settlements that you
Speaker 9: see around the world coming out of negotiations are high,
Speaker 9: and inflation, you know, on a core basis, is running
Speaker 9: around I mean the better part of five percent, and
Speaker 9: there's not a lot of signs of acceleration there. So
Speaker 9: maybe it's not a wage price spiral, but it's certainly
Speaker 9: a wage price race. You know, it's a horse race
Speaker 9: out there, and that is what could cause it to
Speaker 9: be a very long time for inflation to come down.
Speaker 9: Bring us back to that comment of the being at
Speaker 9: these levels for a very long time and not putt
Speaker 9: a little bit of upward pressure on the middle of
Speaker 9: the yell curve.
Speaker 5: So there's a lot to impact there.
Speaker 8: And let's just start and sort of elaborate on your
Speaker 8: point about a wage price spiral basically being here, or
Speaker 8: a wage price escalation, whatever you want to call it,
Speaker 8: a skip jump, pause, whatever. I am curious about what
Speaker 8: data you're looking at to give you that assertion.
Speaker 5: Give considering the.
Speaker 8: Fact that FED officials have said that their concerns about
Speaker 8: a wage price spiral have been eased, We've heard a
Speaker 8: number of others saying the same kind of thing, especially
Speaker 8: with a deceleration recently.
Speaker 9: Yeah, I mean, you could make that comment from average
Speaker 9: hourly earnings, and if you really want it to be optimistic,
Speaker 9: you could even make it from the ECI Employment Costs Index.
Speaker 9: But those sample sizes, especially on payrolls, I mean, they're
Speaker 9: not particularly large, they're subject to revision. An ECI running
Speaker 9: about one point one percent or so on a trailing
Speaker 9: I think it's around five percent. Actually, there's not been
Speaker 9: a lot of deceleration there. And you know, when you
Speaker 9: look at what's going on in the labor market, there's
Speaker 9: been huge growth in the labor force and the hiring
Speaker 9: is going on at a multiple of the pace needed
Speaker 9: to stay full employment. So you know, if you want
Speaker 9: to drill down and you want to be optimistic, you
Speaker 9: can find things that say, oh, yeah, I know this
Speaker 9: is going to be okay. But that's usually the way
Speaker 9: it ends up going the way you don't want it
Speaker 9: to go for longer than you expect, and that's what
Speaker 9: I think market pricing is missing here.
Speaker 8: The irony is that JP Morgan put out a paper
Speaker 8: saying that if bonds are right, stocks have to sell
Speaker 8: off by twenty percent, And bonds usually are right, but
Speaker 8: this time, Robert, are you basically saying that stocks are right,
Speaker 8: that bonds need to catch up to where stocks are
Speaker 8: and that won't necessitates some sort of response from the Fed.
Speaker 9: Yeah, I mean, I think I'm saying that markets actually,
Speaker 9: to me, markets look right. When you look at these
Speaker 9: large cap companies in the stock market, earnings growth is
Speaker 9: not fantastic. That these companies have seen a lot of
Speaker 9: action over the last few years, just like everybody else,
Speaker 9: and they've come through pretty well. So they're showing a
Speaker 9: resilience to calamity, granted with a lot of fiscal stimulus,
Speaker 9: but they've shown a lot of restraint on the way back.
Speaker 9: So they have a lot of cyclical resilience on the
Speaker 9: way down. And they've shown a fair amount of ability,
Speaker 9: not in real terms really, but to hold up and
Speaker 9: keep their earnings in an inflationary environment.
Speaker 5: But what is that?
Speaker 9: So I think that's, you know, maybe what's supporting this market.
Speaker 9: But overall, it looks like a good investment environment. Out
Speaker 9: there for long term fixed income. But there are some
Speaker 9: you know, some things to avoid by pricing on parts
Speaker 9: of the yield curve in particular.
Speaker 5: So how much could that mid year yield curve go up?
Speaker 8: In other words, are you looking at a pretty substantial
Speaker 8: rise in yield price lower?
Speaker 9: I think you're looking at a slow burn. Tom asked
Speaker 9: the question. You know we're going to be here, We're
Speaker 9: going to be a percent your market pricing. You know,
Speaker 9: a year or so out has over one hundred basis
Speaker 9: points of rate cuts priced in, so the market is
Speaker 9: banking on that turnaround. And so I think you could
Speaker 9: see a very slow increase in the range for tens.
Speaker 9: You can see them push up towards four percent. And
Speaker 9: if it turns out you need these five percent plus
Speaker 9: fed funds rates for a very long time, or in
Speaker 9: the case of Europe, pushing four percent for a long time,
Speaker 9: et cetera around much of the world, you're going to
Speaker 9: see you could very easily see over the next one
Speaker 9: two five years, you know, fifty hundred basis point slow
Speaker 9: burn move higher in rates.
Speaker 7: Right, it's the curt.
Speaker 1: I find interesting here. Robert tipped the idea of an
Speaker 1: ambiguity between rates higher rates, lawyer obviously lower. Obviously, somebody
Speaker 1: has their own belief in that is the solution from
Speaker 1: your mortals to barbell or to ladder out maturities. Is
Speaker 1: Kathy Jones, a schwab mentioned to us last week.
Speaker 9: Right, Well, I'm a mere mortal portfolio manager, and yes,
Speaker 9: barbelling is an approach and being tactical on the curve.
Speaker 9: And the reason I mentioned mortals as a portfolio manager is,
Speaker 9: you know, if you're an individual and you're buying your
Speaker 9: bonds on a buy and hold basis, that may not
Speaker 9: be that effective. I mean, there are opportunities in terms
Speaker 9: of floating rates, structure, product, and very high quality that's
Speaker 9: going to key off of the funds rate. You know,
Speaker 9: where the yields are pushing seven percent, and there are
Speaker 9: opportunities in the longer term credit markets again where the
Speaker 9: yields are much higher than cash number one. Number two,
Speaker 9: the pricing has been extremely dynamic. So before SVD, the
Speaker 9: Silicon Valley Bank debacle, there was pricing in the very
Speaker 9: front end of the curve the first handful of months
Speaker 9: that was extremely attractive and you wanted to have duration there.
Speaker 9: And then post SVB that you may want to be short.
Speaker 9: So tactically, i've you know, what we've seen over the
Speaker 9: years is cycles for the market have been compressed into
Speaker 9: weeks and days, and so that may not lend itself
Speaker 9: well to kind of a static barbeling approach.
Speaker 1: Very quickly here we're out of time, but this is
Speaker 1: too important. Gazillions are going into money market funds. All
Speaker 1: my radars up. What's a mistake right now of piling
Speaker 1: into five percent plus money market funds?
Speaker 9: Right? You know, my expectation would be, you know, there
Speaker 9: are two possible problems. They're the one is the economy
Speaker 9: is much weaker than expected. Rates drop and they end
Speaker 9: up losing their income and they haven't locked it in
Speaker 9: for what their real timeframe is, which is saving for
Speaker 9: the long term. The other thing is there's a lot
Speaker 9: of alpha in the market further out the yield curve
Speaker 9: and in the credit sectors, and they're obviously not going
Speaker 9: to be availing themselves of that well.
Speaker 2: But tape of page on a cash trap. At the
Speaker 2: end of that conversation, this is going to.
Speaker 1: Get a lot more complex, and I think we'll learn
Speaker 1: day by day here on far more serious chargers perhaps,
Speaker 1: and what we see in new York. John Leber's expert
Speaker 1: on this is the United States managing director at Eurrasia
Speaker 1: Group and joins us for a Monday brief on an
Speaker 1: historic Tuesday that we will see tomorrow. Bloomberging particularly Balance
Speaker 1: of Power will have full coverage of this, John, thank
Speaker 1: you so much for joining. What's this judge going to
Speaker 1: do tomorrow? She's a Trump appointee, you know her. You
Speaker 1: can brief us on.
Speaker 7: Who she is, what will she do?
Speaker 10: You know, this indictment is historic, as you mentioned, and
Speaker 10: we've never seen anything like this, and there's a whole
Speaker 10: host of considerations when you're looking at a high ranking
Speaker 10: political official like President Trump that just aren't going to
Speaker 10: be in play with other people, the publicity.
Speaker 7: There's a major security concern.
Speaker 10: But you know, I think we saw his indictment in
Speaker 10: New York in many ways it was pretty normal. You know,
Speaker 10: the Secret Service walking in, they had an arrangement. So Tuesday,
Speaker 10: to me, isn't the really important date. It's what happens
Speaker 10: over the coming months and the kinds of decisions that
Speaker 10: she'll be making to either admit evidence or exclude evidence,
Speaker 10: and how she instructs a jury if one ever comes.
Speaker 7: Together There's a lot of really complicated legal.
Speaker 10: Questions here, and the key question to me coming forward
Speaker 10: forward is how do you find an unbiased jury for
Speaker 10: the most famous man probably in the world. Everybody in
Speaker 10: America has thoughts on this guy, and probably most people
Speaker 10: have exposure to this case.
Speaker 7: There's me a lot of tough questions for this judge
Speaker 7: going forward.
Speaker 1: Well, this is aileen canon of Miami in the federal court.
Speaker 1: Are those decisions going to begin to be made tomorrow?
Speaker 7: They'll be made.
Speaker 10: I mean, this trial is going to take probably months
Speaker 10: to unfold. The government said they want a speedy trial,
Speaker 10: and Trump's m in the past has been to drag
Speaker 10: out these legal proceedings as long as he possibly can.
Speaker 10: With procedural emotions. I can't say if we think that
Speaker 10: she has a more favorable view of Trump's procedural emotions
Speaker 10: or not. There's just a lot we don't know. In
Speaker 10: the past, she has made some rulings that are favorable
Speaker 10: to the former president, but you know, at this point
Speaker 10: I would give her the benefit of the doubt, but
Speaker 10: her ability to fairly conduct a trial and fairly indict the.
Speaker 7: President is going to be a key thing to watch
Speaker 7: going forward.
Speaker 8: John just read the pull numbers in terms of Republican
Speaker 8: candidates Republican voters who are likely to continue to keep
Speaker 8: their support with the former president.
Speaker 5: Are you surprised by that?
Speaker 8: Are you surprised by either how much of the proportion
Speaker 8: of people are not going to change their opinion versus
Speaker 8: those that are actually considering one way or another.
Speaker 7: What this does.
Speaker 10: Sadly, No, I mean, Donald Trump's been survived just being
Speaker 10: political flamethrowers that would have just absolutely scorched any other politician.
Speaker 7: Over the last eight years. And you know, you.
Speaker 10: Look at this relative to the Access Hollywood tape or
Speaker 10: the fact that he just lost a civil suit for
Speaker 10: sexual assault. I mean, there are some really serious things
Speaker 10: this guy has done that have not touched his approval
Speaker 10: ratings at all among a really hardcore base of the
Speaker 10: Republican Party.
Speaker 7: And now he has the opportunity to.
Speaker 10: Say that the President of the United States is bringing
Speaker 10: a political prosecution against him, and there's people like his
Speaker 10: rival the Vick Ramaswami and other Republicans.
Speaker 7: Who are out defending him.
Speaker 10: So I'm not remotely surprised that he's able to spin
Speaker 10: this to his benefit. If I'm one of the Republican
Speaker 10: challengers that's hoping to get into the news cycle.
Speaker 7: Here.
Speaker 10: I'm hating this because this just gives Trump the opportunity
Speaker 10: to be the number one storyline. All the questions you're
Speaker 10: going to be asked are about President Trump, and this
Speaker 10: election is fundamentally going to be about his role in
Speaker 10: the party and his role in the country because he's
Speaker 10: going to be so dominant going forward.
Speaker 8: From an international perspective, I think about some of the
Speaker 8: allies looking at the US right now and the fact
Speaker 8: that this is going on, which is unprecedented, and the
Speaker 8: fact that there is such fiery rhetoric and potential threat
Speaker 8: surrounding tomorrow's court hearing. What does that do to the
Speaker 8: US relationship with its international friends.
Speaker 10: Yeah, I think the big challenge to the US right
Speaker 10: now is that it looks a lot like some other
Speaker 10: countries that we criticize quite a bit.
Speaker 7: In the past. And I think that.
Speaker 10: The great things the US is going for are the
Speaker 10: strength of its institutions, and that includes both the courts
Speaker 10: and law enforcement. So the fact that you have half
Speaker 10: the country believing that law enforcement has been fundamentally corrupted
Speaker 10: and delegitimized, and that message is going to get out
Speaker 10: and resonate around the world. It really undermines faith and
Speaker 10: belief in US institutions.
Speaker 7: Not just domestically but globally.
Speaker 10: And you know, that's a bit of a problem when
Speaker 10: you look around the globe, but countries like El Salvador
Speaker 10: or other places where you might start to see democratic
Speaker 10: backsliding and the US doesn't really have the ability to
Speaker 10: step in and criticize anymore.
Speaker 7: And in some cases it's not even trying.
Speaker 2: John, I wonder if it's something more specific as well.
Speaker 2: If you're a US partner right now in the West
Speaker 2: European country, the UK, for instance, so you questioning kind
Speaker 2: of you share intelligence with the US if this is
Speaker 2: what happens.
Speaker 7: I don't think there's a belief.
Speaker 10: I mean, you know Joe Biden, Yes, he had some
Speaker 10: boxes in his garage. The National Archives found out about it,
Speaker 10: they came to take him back.
Speaker 7: I think that Trump is a bit of a unique
Speaker 7: figure here.
Speaker 10: However, the US does have a broader problem with intelligence leaks.
Speaker 7: I mean, you've got this National.
Speaker 10: Guard, very young guy who was leaking these documents that
Speaker 10: are now doing quite a bit of damage. So when
Speaker 10: it comes to the national security, the actual documented damage
Speaker 10: to national security that we know about so far. The
Speaker 10: Trump documents, while his actions were quite bad, don't come close.
Speaker 7: To some of these other cases.
Speaker 10: And I don't know if this case in particular pushes
Speaker 10: the allies away from the US over that issue.
Speaker 2: Interesting, John, thanks to your perspective. Appreciate it, John Leabe,
Speaker 2: the have you writed your group?
Speaker 1: Right now we turn to traditional surveillance coverage. Ian Shepherdson
Speaker 1: joins his chief of con Pantheon Macroeconomics, and one of
Speaker 1: the great things about the Shepherds in purview is we
Speaker 1: have to watch China. He and Duncan Wrigley have been
Speaker 1: out front on this for years. You said years ago, Ian,
Speaker 1: we have to pay attention to China. You people look
Speaker 1: at it every day. What's the consensus get wrong right
Speaker 1: now about China.
Speaker 11: Well, there's a couple of things, a couple of stories
Speaker 11: that I think are really important. The first is that
Speaker 11: the rebound, the China rebound that everyone was so excited
Speaker 11: about six months ago, has been a lot less impressive
Speaker 11: than we all hoped, and that is generating the second point,
Speaker 11: which is disinflation, deflation pressure coming from China. China's PPI
Speaker 11: inflation is negative, It's probably going to go more negative.
Speaker 11: Excess productive capacity and just not enough demand is pushing
Speaker 11: down China's PPI, and that's going to push into global
Speaker 11: manufactured goods prices. China is kind of the price set
Speaker 11: of for global manufactured goods, and that means downward pressure
Speaker 11: pretty much everywhere over the whole of the next time.
Speaker 1: They're going to export disinflation. I mentioned as Folks imb
Speaker 1: Reservans Pritchard were a clinic on this and the Telegraph
Speaker 1: the other day. How much is a percentage amount you
Speaker 1: would calculate the Chinese the pulse of Chinese disinflation will
Speaker 1: bring down US inflation.
Speaker 11: Well, we're only talking about goods, of course, and remember
Speaker 11: that the US Court CPI is mostly a service price index,
Speaker 11: but at the margin downward pressure on goods prices, which
Speaker 11: I think could be heading to a zero inflation rate
Speaker 11: over the course of the next year in the US
Speaker 11: and currently about four or five percent, so really quite substantial.
Speaker 11: Now that's not all due to China. It's also due
Speaker 11: to some recompression of US domestic margins. But the China
Speaker 11: impulse I think is going to be very visible and
Speaker 11: very helpful to the cause of lower US inflation and
Speaker 11: Europe too over the course of the next year, and
Speaker 11: starting pretty much right now.
Speaker 8: Speaking to this inflation debate with China, there has also
Speaker 8: been a shift away from China being the factor of
Speaker 8: the world and an increase in lobbying power and frankly,
Speaker 8: labor's power in general in the US in Europe as
Speaker 8: a lot of the manufacturing gets near short or on short.
Speaker 8: So how much do you see something of wage spiral
Speaker 8: continuing regardless of what happens with China, regardless of what
Speaker 8: happens with headline GDP growth.
Speaker 11: Yeah, you know, I think wage pressure is diminishing, but
Speaker 11: it's still elevated. I mean, we're not seeing the sort
Speaker 11: of numbers that we're seeing in twenty twenty one, when
Speaker 11: US wage growth was six percent. It's more like four now,
Speaker 11: depends exactly which measure you choose. But it's certainly had
Speaker 11: some momentum that I think has lasted longer than a
Speaker 11: lot of people me expected. But I do also think
Speaker 11: that we're now on the verge of a meaningful weakening
Speaker 11: in the labor market, including in manufacturing. And yeah, I
Speaker 11: know that the reshoring is very much a thing. You
Speaker 11: can see that very clearly in the US construction data
Speaker 11: in manufacturing, but in the labor market it's starting to
Speaker 11: struggle somewhat. You know, the ISM manufacturing survey, the benchmark
Speaker 11: national survey is very weak, and it's been weak for
Speaker 11: some time now. And that labor market softening, I think
Speaker 11: is going to take some of the edge off the
Speaker 11: wage growth over the next half a year.
Speaker 8: What are you looking at to highlight this softening that
Speaker 8: so many people thought would already have happened but hasn't yet.
Speaker 11: Well, it's everywhere except the peril numbers, isn't it. I mean,
Speaker 11: if we look at the the small Business survey from
Speaker 11: the NFIB, that's at recession levels, the official index of
Speaker 11: leading indicators deep recession levels, ISM manufacturing recession levels, payrolls
Speaker 11: to fifty a month private payrolls. I mean, so there's
Speaker 11: a real disconnect. So that can solve itself in two ways.
Speaker 11: Either all the surveys can rebound magically, or payrolls can weaken,
Speaker 11: which I think is much more likely. You know, the
Speaker 11: FEDS raised rates by five hundred basis points in fifteen months,
Speaker 11: and normally that would be more than enough to push
Speaker 11: the economy into recession. I don't think this time will
Speaker 11: be any different. We just got to wait a bit longer.
Speaker 1: This time will be different. There was a Newcastle that
Speaker 1: was mid you know, mid level Premier League, and they
Speaker 1: had arguably the best year of anyone maybe except Man
Speaker 1: City and your Newcastle Union. I mean they just surprise, surprise, surprise.
Speaker 1: What's the newcastle out there that will keep this economy
Speaker 1: going well?
Speaker 11: You know, the consumer is always a bit that has
Speaker 11: the potential because there's still a lot of savings left
Speaker 11: that were built up during the pandemic.
Speaker 1: The Biden stimialysis is still benefiting America.
Speaker 11: Yeah, but there's about two thirds of that excess savings
Speaker 11: has been spent now and what's left seems to be
Speaker 11: mostly in the hands of higher income households who probably
Speaker 11: are less likely to spend it. But it's an unknown
Speaker 11: because we can't look back at any previous experience and say,
Speaker 11: you know, the last time this happened, the outcome was x,
Speaker 11: because there is no last time.
Speaker 1: But the unknown. The known is that everybody got the
Speaker 1: recession called wrong except a very select few. Can you
Speaker 1: time a recession right now? Or is this so original
Speaker 1: you just give up?
Speaker 11: Yeah, it's very difficult.
Speaker 12: You know.
Speaker 11: Plus, of course you've got to remember that the GDP
Speaker 11: numbers get revised forever, so in real time it's very
Speaker 11: hard to tell, which is why the FED puts so
Speaker 11: much emphasis on the labor market. You know, they're very
Speaker 11: keen on the PSALM rule. And umployment rises by half
Speaker 11: a point, you've got a recession. Whether GDP says so
Speaker 11: or not. We're not there yet, but my guess is
Speaker 11: that by the end of the summer will either be
Speaker 11: there or will be very close.
Speaker 8: Do you think that if the Fed does pause and
Speaker 8: doesn't raise it again, we could get inflation down close
Speaker 8: to three two and a half percent by the end
Speaker 8: of this year.
Speaker 1: Oh?
Speaker 11: Absolutely absolutely. You know, the headline rate's going to drop
Speaker 11: very sharply anyway in the next couple of months, just
Speaker 11: because of basic effects from last year. But the core
Speaker 11: I also I think is likely to soften. I think
Speaker 11: we're seeing them to see real margin compression across retailing
Speaker 11: where we had huge expansions during the pandemic, and I
Speaker 11: do think that the lad mark is going to weaken
Speaker 11: as well. So I'm very hopeful that the FED has
Speaker 11: done enough, and I think if they keep hiking they'll
Speaker 11: have done more than enough, and the recession will end
Speaker 11: up being deeper and longer than it needs to.
Speaker 8: Be if we do get a headline CPI print tomorrow
Speaker 8: that is above expectations. How do they justify and say
Speaker 8: that they are still data dependent or is that a misnomer?
Speaker 5: Are they not?
Speaker 8: Really they just sort of feel on their way and
Speaker 8: using that as an excuse.
Speaker 11: Oh, they're definitely feeling their way. I mean that, you know,
Speaker 11: they've been very clear that there's no grand plan here.
Speaker 11: It's a cat to see what happens in the numbers.
Speaker 11: But I think the tomorrow's pause has been fairly well flagged.
Speaker 11: This is a feed that doesn't like to surprise, so
Speaker 11: I'd be quite surprised unless the CPI numbers are just
Speaker 11: absolutely wild, then not hiking this week.
Speaker 5: But isn't it kind of silly?
Speaker 8: Isn't it silly that they're not just basically saying, we
Speaker 8: need to assess what we've done, so we're going to
Speaker 8: just take a breather and at a certain point we'll
Speaker 8: signal when we're done, not this hawkish pause skip whatever
Speaker 8: kind of confusion that leaves them with less credibility from
Speaker 8: a lot of people in the markets who say, don't
Speaker 8: be too cute. We don't know either, We just want
Speaker 8: to see what's going on.
Speaker 11: Yeah, no one knows for sure, because we're in a
Speaker 11: completely unprecedented environment here. So having done five hundred basis
Speaker 11: points faster than any hiking cycles since Paul Vulgar in
Speaker 11: the early eighties, why not take the summer off. Skip
Speaker 11: skip June, skip July, go to the beach. Okay, let's
Speaker 11: talk there.
Speaker 1: I mean you beautifully frame that. Back to Vulgar, some
Speaker 1: would say they massively screwed up. Other would say they
Speaker 1: just got us back. Dudley would say, they just got
Speaker 1: us back to where we ought to be. But what's
Speaker 1: the what's the downside? If they pause, pause, pause.
Speaker 11: I don't see much because exactly there's not there's no
Speaker 11: sort of residual inflation pressure waiting to leap back if
Speaker 11: they stop raising race for three months. But by back
Speaker 11: to three months, we got a lot more data through
Speaker 11: the summer. We have a much clearer idea in early
Speaker 11: fall of the lagged impact of their cumulative actions, which
Speaker 11: is what they keep writing about in the statement, but
Speaker 11: don't seem to be taking very seriously with this reliance
Speaker 11: on the short term data. So this is strong.
Speaker 1: Ke Lisa, I had the clearest memory of being at
Speaker 1: Aea in January of I'll say nine or ten. And
Speaker 1: I'm going to give credit to Olivia Blanchard. Worthies were
Speaker 1: up on stage and Blanchard had a chart up saying
Speaker 1: there's there's no pain to just waiting for more information.
Speaker 1: And that's where I am on this pause pause, you know,
Speaker 1: post post, post, post pause, whatever, you know. I just
Speaker 1: I think he's dead on.
Speaker 4: I agree in theory.
Speaker 8: The problem is is that a lot of these FED
Speaker 8: officials and a lot of economists are conditioned by getting
Speaker 8: it so wrong back in twenty twenty and twenty twenty
Speaker 8: one and not moving quickly enough and not trying to
Speaker 8: counter some of that stimulus. How much is that the
Speaker 8: driving factor? It's going to perhaps push people in the
Speaker 8: opposite direction this time around.
Speaker 11: Yeah, it skewed the decision, shall we say. I think
Speaker 11: that's probably the right way to think about it. The
Speaker 11: decisions which in previous FEDS might have been much closer.
Speaker 11: They've gone on the hawkish side. And yeah, Transitory was
Speaker 11: a complete fiasco, a debarcle. It was politically damaging to
Speaker 11: the FED. The media hated it, the markets hated it,
Speaker 11: politicians hated it. The FED was just the whipping boy
Speaker 11: for everybody. So having made that mistake once, you can't
Speaker 11: make the same mistake in the same direction again in
Speaker 11: the same cycle. So you're gonna, you know, on the
Speaker 11: other side. But again, I come back to this point.
Speaker 11: They've raised a five hundred basis points in fifteen months.
Speaker 11: It's been super aggressive, and actually j Pal said at
Speaker 11: the last press conference, we're tight. Real rates now are
Speaker 11: are tight, and you just got to wait for that
Speaker 11: to work its way through. Everything will be so much
Speaker 11: simpler if the peril numbers were behaving. But they're the outliers,
Speaker 11: but they're the ones at the markets and the FED
Speaker 11: put the most emphasis on.
Speaker 1: We're going to say goodbye to Ian Shepherdson and Pantheonmicroeconomics.
Speaker 1: I'm going to put the Serveno's quirk in my mouth.
Speaker 1: Subscribe to The Bloombergs as podcast on Apple, Spotify and
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Speaker 1: stay tuned for today's edition of Bloomberg Daybreak. It's your
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Speaker 1: starts right now from.
Speaker 13: The Bloomberg Interactive Broker Studios. This is Bloomberg Daybreak for Monday,
Speaker 13: June twelfth.
Speaker 14: Coming up today, political lines are drawn as Donald Trump
Speaker 14: faces the first ever federal charges against a former president.
Speaker 13: The Fed decision and a pair of inflation reports highlight
Speaker 13: a busy week for the economy.
Speaker 14: Goldman Sachs says, this equity rally has room to run,
Speaker 14: and UBS completes.
Speaker 13: Its historic acquisition of Credit Suie.
Speaker 15: The Man charge, and the choke old death of a
Speaker 15: Manhattan subway writer is talking. Plus Ukraine's counteroffensive is officially underway.
Speaker 15: I'm Michael Varr.
Speaker 16: More ahead, I'm John stash Eward Sports. The Yankees lost
Speaker 16: in tenements to the Red Sox. The Mets lost in Pittsburgh.
Speaker 16: The Denver Nuggets can win the NBA Championship tonight.
Speaker 17: That's all straight Ahead on Bloomberg day Break, the business
Speaker 17: news you need to starn your day in just one
Speaker 17: fifteen minute podcast each morning on Apples, Spotify, the Bloomberg
Speaker 17: Business app, and everywhere you get your podcasts.
Speaker 13: Good morning, I'm Nathan Hager and I'm Amy Morris. Here
Speaker 13: are the stories we're following today.
Speaker 14: The latest on Donald Trump. He is getting ready to
Speaker 14: appear in federal court in Miami tomorrow to face the
Speaker 14: first ever federal charges against a former president. Trump was
Speaker 14: defiant on the campaign trail over the weekend.
Speaker 18: This vicious persecution is a travesty of justice.
Speaker 16: You're watching Joe Briden Jobe By think of it, Biden
Speaker 16: is trying to.
Speaker 6: Jail his leading political opponent, an opponent that's beeding him
Speaker 6: by a lot in the polls.
Speaker 14: Former President Trump spoke at the Republican State Convention in Georgia,
Speaker 14: where he remains under investigation over efforts to overturn the
Speaker 14: twenty twenty.
Speaker 18: Election and Nathan.
Speaker 13: In the face of the indictment, Donald Trump is still
Speaker 13: finding support. It looks like his base is holding strong.
Speaker 13: Bloomberg's Ed Baxter has that part of the story.
Speaker 18: A couple of polls are out now. A CBS News
Speaker 18: poll says three quarters of likely Republican primary voters view
Speaker 18: the accusations as politically motivated and within the party. An
Speaker 18: ABC poll says his lead over Rohn Deacentus increasing at
Speaker 18: least ten points from April to after the indictment, now
Speaker 18: thirty plus point lead within the party. Meanwhile, there's concern
Speaker 18: about the potential of large crowds and possible violence in
Speaker 18: Miami tomorrow when Trump surrenders to authorities. Trump has addressed
Speaker 18: supporters with see you in Miami Tuesday. In San Francisco,
Speaker 18: I'm at Baxter Bloomberg Daybreak.
Speaker 1: All right, and thanks.
Speaker 14: So the political lines are being drawn as the former
Speaker 14: president to waits his day in court. Republican Senator Lindsay
Speaker 14: Graham is standing by the former president.
Speaker 19: Most Republicans believe we live in a country where Hillary
Speaker 19: Clinton did very similar things and nothing happened to her.
Speaker 19: President Trump will have his day in court, but espionage
Speaker 19: charges are absolutely ridiculous.
Speaker 11: What do you like Trump or not?
Speaker 19: He did not commit espionage.
Speaker 14: Senator Graham was on ABC's this week, but Trump's former
Speaker 14: Attorney General Bill Barr tells Fox News Sunday there wouldn't
Speaker 14: be any charges if the former president had handed the
Speaker 14: documents over.
Speaker 20: Those documents are among the most sensitive secrets that the
Speaker 20: country has no right to retain them in a way
Speaker 20: at maur Lago that anyone who really cares about national
Speaker 20: security but their stomach would churn.
Speaker 14: And Republican New Hampshire Governor Chris Sanunu tell CBS has
Speaker 14: faced the nation this will inevitably affect the presidential race.
Speaker 21: He could win the nomination, but cannot mathematically cannot win
Speaker 21: in November of twenty four, which is why the Republican
Speaker 21: Party needs to look to another candidate, and they've got
Speaker 21: a lot of great options before.
Speaker 14: Governor Sanunu thinks former President Trump will likely be found
Speaker 14: guilty on at least one of the thirty seven charges
Speaker 14: he faces and.
Speaker 13: Politics will play big this week. But it's also a
Speaker 13: busy few days for the markets. We get a policy
Speaker 13: decision from the Fed plus a slew of economic data
Speaker 13: here with more is Bloomberg's Doug Prisner.
Speaker 22: Markets are expecting the Fed to pause its tightening cycle
Speaker 22: and signal it's prepared to tighten in July. Here's Bloomberg
Speaker 22: opinion columnist Mohammad Alarian.
Speaker 23: The press conference is going to be absolutely the most
Speaker 23: interesting element. How they described that the skip, which the
Speaker 23: market expects, is going to be critical. Now if they
Speaker 23: don't get favorable inflation numbers, they're in a really hard
Speaker 23: situation because they will have to surprise the market before.
Speaker 22: The Fed decision. Markets will get two readings on US
Speaker 22: inflation CPI on Tuesday, PPI on Wednesday, then on Thursday
Speaker 22: US retail sales. Friday brings consumer sentiment data from the
Speaker 22: University of Michigan in New York. I'm Doug Prisoner Bloomberg Daybreak.
Speaker 14: Thanks dougging against that economic backdrop, We're getting a bullish
Speaker 14: call on stocks from Goldman Sachs this morning. We get
Speaker 14: that story from Bloomberg's John Tucker, John and Nathan.
Speaker 24: With the S and P five hundred now twenty percent above,
Speaker 24: it's October low, Goldman's strategist are comfortable raising their year
Speaker 24: end target. They say the index will end twenty twenty
Speaker 24: three at forty five hundred, and that would be a
Speaker 24: four point seven percent increase from Friday's close. They say, well,
Speaker 24: market breath has been a worry this current rally will
Speaker 24: broaden out. Goldman's recession outlook is lower than consensus, while
Speaker 24: their forecounts for S and P five hundred earnings is
Speaker 24: higher than most on Wall Street.
Speaker 15: You knoww York.
Speaker 24: I'm John Tucker, Bloomberg day Break.
Speaker 13: All right, thank you, John. In Europe this morning, we're
Speaker 13: learning UBS has completed its acquisition of Credit Suisse. Bloomberg's
Speaker 13: Mary and after Meyer says the closing of that deal
Speaker 13: was announced in an open letter in local and international newspapers.
Speaker 12: This huge merger has been a huge contention here locally
Speaker 12: in Switzerland, and they've had to do a lot of
Speaker 12: convincing of the population that this is a good thing
Speaker 12: for Switzerland, and a lot of questions I've been asked
Speaker 12: around whether this is too big for Switzerland, whether the
Speaker 12: government and the regulators will be able to handle such
Speaker 12: a giant merger, and the implications for jobs branches. I mean,
Speaker 12: it's a highly politicized thing here, so I think this
Speaker 12: was really geared towards them.
Speaker 13: Bloomberg's Mary and hafter Meyer reminds us the tie up
Speaker 13: between UBS and Credit Suisse is the biggest in banking
Speaker 13: since the two thousand and eight financial crisis.
Speaker 14: And Amy there's more on today's official takeover. The Financial
Speaker 14: Times is reporting UBS will impose strict restrictions on bankers
Speaker 14: coming over from Credit Suisse. That reportedly includes a ban
Speaker 14: on taking new clients from high risk countries.
Speaker 18: Staying in Europe.
Speaker 13: We're learning more about the fallout from assault and harrisment
Speaker 13: allegations against chrispin Ode. He's being removed from the firm's
Speaker 13: partnership and it's naming new managers to take control of
Speaker 13: his funds. ODI's main hedge fund now will be run
Speaker 13: by co manager Freddy Neve. According to The Financial Times,
Speaker 13: the firm is also trying to contain the fallout by
Speaker 13: discussing restrictions on investor withdrawals from its EU funds.
Speaker 14: Time out to take a look at some of the
Speaker 14: other stories making news in New York and around the world,
Speaker 14: and for that we are joined by Bloombergs.
Speaker 1: Michael bar Good morning, Michael.
Speaker 15: Good morning, Nathan. There's late word former Italian Premier Silvio
Speaker 15: Berlusconi has died. Berlusconi was admitted to a hospital in
Speaker 15: Milan late last week. Last month, he was released from
Speaker 15: a hospital for a lung infection. Silvio Berlusconi was eighty six.
Speaker 15: Ukraine said its forces liberated at least two villages in
Speaker 15: the east of the country. It's part of its counter
Speaker 15: offensive against Russia. North Korean leader Kim Joan un as
Speaker 15: reiterated his support for Russia's invasion of Ukraine. Kim vowed
Speaker 15: to hold hands firmly with Russian President Vladimir Putin. Daniel Penny,
Speaker 15: the marine facing manslaughter charges and the chokeold death of
Speaker 15: a homeless man on a Manhattan subway, is defending his actions.
Speaker 15: His attorneys released video statements which Penny says he was
Speaker 15: protecting himself and other passengers from an erratic Jordan Neely.
Speaker 15: Penny says he acted because Neely was threatening passengers and
Speaker 15: it had nothing to do with race.
Speaker 6: I knew I had to act, and I acted in
Speaker 6: a way that would protect the other passengers, protect myself,
Speaker 6: and protect mister Neely.
Speaker 15: The case is now before a grand jury in Manhattan.
Speaker 15: A section of a vital highway in the Northeast Corridor
Speaker 15: has been cut off after a massive tanker truck fire
Speaker 15: erupted underneath Interstate ninety five in Philadelphia, causing a part
Speaker 15: of the highway to collapse. Governor Josh Shapiro.
Speaker 16: With regards to the complete rebuild of I ninety five roadway,
Speaker 16: we expect that to take some number of months.
Speaker 15: Governor Shapiro says. Heavy machinery is now particulously removing tons
Speaker 15: of debris, careful not to reignite whatever fuel remains. Police
Speaker 15: say a bus carrying wedding guests rolled over on a
Speaker 15: foggy night in Australia's Wine Country, killing ten people and
Speaker 15: injuring twenty five. New South Wales Police commissioner carrying a
Speaker 15: webb said the fifty eight year old driver has been
Speaker 15: arrested and is being charged, but that it is still
Speaker 15: not clear what caused the crash.
Speaker 2: The cause may not be known for some time.
Speaker 15: It will require scientific examination and that takes time. Commissioner
Speaker 15: web Kimberly Akimbo won for Best New Musical at last
Speaker 15: night's Tony Awards. Victoria Clark also won for Best Leading
Speaker 15: Actress in the musical Meanwhile, history was made when Alex
Speaker 15: Newall and Jay Harrison Ghee became the first non binary
Speaker 15: people to win Tony's for acting. Global News twenty four
Speaker 15: hours a day, powered by more twenty seven hundred journalists
Speaker 15: and analysts and over one hundred and twenty countries. I'm
Speaker 15: Michael Barr. This is Bloomberg. Nathan.
Speaker 14: Okay, Michael, thanks time now for the Bloomberg Sports updates.
Speaker 14: Branci like tri State outy, Good morning, johns stash out,
Speaker 14: Good morning, Nathan.
Speaker 16: First Yankees Red Sox series of the season at the Stadium,
Speaker 16: Yanks lost three two on Friday, one three to one
Speaker 16: Saturday last night that had a two to one lead
Speaker 16: eighth inning. The Labor Tours air led to the Socks
Speaker 16: tye in the game, and Boston scored in the tenth
Speaker 16: to win three to two. Only three Yankee hits in
Speaker 16: the lineup that clearly misses Aaron Judge. Yanks lost four
Speaker 16: of six on the home stand and they now start
Speaker 16: the first Subway series tomorrow night at City Field. The Mets,
Speaker 16: with plenty of their own problems, losers of eight of
Speaker 16: the last nine, liked the Yanks. They had only three
Speaker 16: hits and a two to one loss in Pittsburgh. The
Speaker 16: Mets have a record payroll of three hundred and forty
Speaker 16: million dollars in yet right now only four teams in
Speaker 16: the National League have a worse record. In Denver tonight,
Speaker 16: game five of the NBA Finals, Nuggets lead the They
Speaker 16: did lose their last home game, but that was their
Speaker 16: first loss at home since March, and they just won
Speaker 16: twice in Miami. In Paris, Novak Djokovic won the French
Speaker 16: Open finals straight sets over Casper Rude. So he's won
Speaker 16: twenty three Grand Slams, the most ever.
Speaker 8: Been very fortunate that you know, most of the matches
Speaker 8: and tournaments I played in the last few years or
Speaker 8: there's history in the line, So I like the feeling.
Speaker 7: It's a it's a privilege.
Speaker 11: It's incredible privilege to be able to make history of
Speaker 11: the sport that I truly love and has given me
Speaker 11: so much.
Speaker 16: Jokovic is thirty six, hardly slowing down. He's won six
Speaker 16: of his last eight Grand Slams. He's now won all
Speaker 16: four at least three times. What a finish to the golf.
Speaker 16: In Toronto, Nick Taylor rolled in a seventy two foot
Speaker 16: part on the fourth playoff whole, longest putt he's ever
Speaker 16: made in fourteen years on the tour. He's the first
Speaker 16: Native Canadian to win the Canadian Open since nineteen fifty four.
Speaker 16: John stashedward Bloomberg sport.
Speaker 25: From coast to coast, from New York to San Francis.
Speaker 25: Let's go Boston to Washington, DC, nationwide on Syrias Exam
Speaker 25: the Bloomberg Business Appen Bloomberg dot Com.
Speaker 7: This is Bloomberg Daybreak.
Speaker 25: Good morning.
Speaker 14: I'm Nathan Hager. Donald Trump is remaining defiant and holding
Speaker 14: onto his lead in the Republican primary race as he
Speaker 14: prepares to enter a plea tomorrow in Miami federal court
Speaker 14: to the first ever federal criminal charges against the former
Speaker 14: president of the United States over his handling of classified
Speaker 14: documents at Marlago. Ahead of that, we're joined by Bloomberg
Speaker 14: News Senior editor Bill Ferries. Bill, it's good to speak
Speaker 14: with you this morning, and it has been just remarkable
Speaker 14: over the course of former President Trump's career to see
Speaker 14: him hold on to this base of support within the
Speaker 14: Republican Party and over the weekend back on the campaign trail.
Speaker 14: What are you going to be watching for as we
Speaker 14: get ready for this appearance in Miami tomorrow.
Speaker 26: Well, thanks for having me, Nathan. I think on sort
Speaker 26: of a more immediate front, we've already seen security getting
Speaker 26: beef up in Miami and there is some concern about
Speaker 26: whether the former president's supporters and whether his opponents will
Speaker 26: be gathered there, uh and in what numbers, and whether
Speaker 26: things will remain peaceful. People on all sides of the debate,
Speaker 26: whether they are supporters or opponents, have have called for
Speaker 26: peaceful gathering. But I think, you know, the January sixth
Speaker 26: violence at the Capitol in Washington overhangs all of these things,
Speaker 26: and so there's always a degree of unpredictability, and then
Speaker 26: I think will be you know, besides besides that, I
Speaker 26: think we'll be looking for, you know, how the how
Speaker 26: the former president addresses the charges. He's already made it
Speaker 26: clear in his public comments over the weekend that he
Speaker 26: thinks that he says he's innocent, that he's called it,
Speaker 26: he's called the charge of the travesty of justice. So
Speaker 26: I don't think there's any doubt about how he'll plead,
Speaker 26: but I think there'll be a lot of interest in
Speaker 26: whether he he speaks to his supporters or or the
Speaker 26: press on his way in or out of the courthouse,
Speaker 26: and then sort of what the timeline becomes as this
Speaker 26: case moves forward in the coming months, which is exactly
Speaker 26: when the president is expected to be or the former
Speaker 26: president expected to be ramping up his campaign for twenty
Speaker 26: twenty four.
Speaker 14: The remarkable thing about this, as well, Bill, is that
Speaker 14: we have a precedent for how the president could act tomorrow,
Speaker 14: because we've had the appearance in court just a couple
Speaker 14: of months ago in the hush money case in Manhattan
Speaker 14: and some of the protests outside there as well. Does
Speaker 14: that inform what we could see this week?
Speaker 26: It's you know, I think it does. I think there's
Speaker 26: a big question about the size of the support, though.
Speaker 26: I think when he's that previous case you mentioned up
Speaker 26: in New York was a little more hostile territory for
Speaker 26: the president, South Florida is a little typically friendlier territory
Speaker 26: for him, and you know, a place a lot of
Speaker 26: his supporters already live or will easily get to. So
Speaker 26: I think he, you know, he's more on his home
Speaker 26: turf and and may perhaps feel emboldened to to talk
Speaker 26: a little bit more and to share more of his
Speaker 26: thoughts about where this is headed. You know, it's just
Speaker 26: just happening all a little bit south of the mar
Speaker 26: A Lago resort, where these documents that he's charged with
Speaker 26: mishandling and keeping from investigators were all stored.
Speaker 14: How do you see this affecting the presidential race going forward,
Speaker 14: given that there's a possibility that we might not see
Speaker 14: a trial wrap up potentially until after the presidential race
Speaker 14: is over.
Speaker 26: Yeah, we've we've never seen anything like this in US
Speaker 26: politics before the first federal charges against the former president,
Speaker 26: but much less, you know, someone who's actively running for
Speaker 26: president again. How it You know, there's there's always two
Speaker 26: elections in any presidential racers the primary race and then
Speaker 26: there's the general elections. So in the primary race, the
Speaker 26: president is still in a commanding position. He has, you know,
Speaker 26: somewhere over a third of Republican primary voters or a
Speaker 26: gap of more than about thirty percent over his nearest opponents,
Speaker 26: and that that kind of support seems to be holding.
Speaker 26: From the polls we've seen the quick polls over the weekend,
Speaker 26: a large number of Republicans believe or are concerned that
Speaker 26: these charges are politically motivated, even you know, we're talking
Speaker 26: about something like almost sixty percent of republicancy. It's that way.
Speaker 26: Those are you know, those are the voters Trump has
Speaker 26: to be thinking about heading into a primary, and if
Speaker 26: he can sort of keep them on his side, he
Speaker 26: very well could be in the position of winning primaries,
Speaker 26: facing charges, and being a leading candidate for president in
Speaker 26: twenty twenty four. It's not it's a scenario I don't
Speaker 26: think anyone would have foretold just even a year or
Speaker 26: two ago.
Speaker 27: This is Bloomberg Daybreak Today, your morning brief on the
Speaker 27: stories making news from Wall Street to Washington and beyond.
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