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Speaker 1: Good morning.

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Speaker 2: I'm Nathan Hager and I'm Karen Moscow. Here are the

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Speaker 2: stories we're following today.

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Speaker 3: Karen, we have spent most of this week focused on

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Speaker 3: inflation and the economy, but today the attention turns to

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Speaker 3: earnings with the kickoff of second quarter reporting season. We

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Speaker 3: get more from Bloomberg Global Finance correspond at Shanali Bassek.

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Speaker 4: The biggest US banks are set to report earning today.

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Speaker 4: That's JP, Morgan, Wells Fargo, and City Group. We have

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Speaker 4: Bank of America, Morgan Stanley and Goldmenzas next week. What

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Speaker 4: we're going to start watching for, though, is credit quality.

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Speaker 4: Are loans starting to go bad? Are the biggest banks

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Speaker 4: provisioning for more loan losses? How bad do they expect

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Speaker 4: a recession to be? The banks also expect costs to rise,

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Speaker 4: cost tied to net interest income, also severance packages, given

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Speaker 4: that so many layoffs have hit Wall Street already this year.

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Speaker 3: Thanks Shanali, That's Bloomberg Global Finance correspondent Shanali Bassic. Look

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Speaker 3: for those earnings from JP, Morgan, Chase, and Wells Fargo

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Speaker 3: at seven am Wall Street Time, followed by City Group

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Speaker 3: at eight.

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Speaker 2: Well Turning to the market, it's now Global stocks are

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Speaker 2: on track for their best weekly gain since March. There's

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Speaker 2: optimism that FED is close to ending its tightening cycle

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Speaker 2: thanks to team or inflation reports this week. Still, FED

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Speaker 2: Governor Christopher Waller says more action by the Central Bank

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Speaker 2: is needed.

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Speaker 5: I see two more twenty five basis point pikes in

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Speaker 5: the targar range over the four remaining meetings this year

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Speaker 5: as necessary to keep inflation moving down towards our target.

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Speaker 5: And I see no reason why the first of those

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Speaker 5: two heights should not occur at our meet or his

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Speaker 5: meetings later this month, and.

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Speaker 2: The next decision FED Governor Christopher Waller mentioned comes on

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Speaker 2: July twenty sixth.

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Speaker 3: We have another FED note this morning. Karen Saint Louis.

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Speaker 3: FED President James Bullard is resigning after fifteen years to

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Speaker 3: become dean of the Business School at Purdue University. Bullard

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Speaker 3: is among those who have called for aggressive interest rate

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Speaker 3: hikes to fight inflation.

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Speaker 6: Well.

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Speaker 2: In Corporate News, Nathan, the legal battle over Microsoft's plan

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Speaker 2: purchase of Activision lingers on the Federal Trade Commission is

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Speaker 2: urging an appeal court to delay the sixty nine billion

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Speaker 2: dollar takeover, while the agency's challenge to the largest ever

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Speaker 2: gaming deal is pending. They get more from Bloomberg technology

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Speaker 2: reporter At Ludlow from the Allen and Company conference in

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Speaker 2: Sun Valley, Idaho.

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Speaker 7: Everyone is focused on the deal, and I think it's

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Speaker 7: this idea that if you are a technology executive or

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Speaker 7: a meet well, I know it's this idea a technology

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Speaker 7: media executive, you're kind of looking at this as a

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Speaker 7: case study. You know the FTC's willingness to carry on

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Speaker 7: the fight, but also you know this is a precedent

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Speaker 7: that would be set the biggest video games deal of

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Speaker 7: all time. Sixty nine billion dollars is a lot of dollars, right,

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Speaker 7: So that's the context everyone's looking at. Will we see

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Speaker 7: more m and A because the FDC decides to back down,

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Speaker 7: or are we going to continue with this narrative that

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Speaker 7: you know, global regulators are going to continue fighting and

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Speaker 7: looking at the m and A.

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Speaker 2: And Bloomberg said love lower force. Microsoft and Activision are

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Speaker 2: making moves overseas to try to keep the deal alive,

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Speaker 2: and sources tell us they may give up control of

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Speaker 2: some of their cloud gaming business in the UK to

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Speaker 2: satisfy regulators there.

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Speaker 7: Well.

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Speaker 3: Karen and other legal battles brewing involving another tech company.

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Speaker 3: A group of former top executives at Twitter say the

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Speaker 3: social media platform ows them more than one point six

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Speaker 3: million dollars for legal fees. The group, led by ex

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Speaker 3: Twitter CEO Perogue Agrawah, wants a judge to force new

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Speaker 3: owner Elon Musk to pay that tab now. They say

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Speaker 3: the legal bills piled up in connection with lawsuits and

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Speaker 3: government probes while they ran Twitter.

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Speaker 2: Well Nathan, a dispute in the entertainment world means the

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Speaker 2: show will not go on. In Hollywood for the first

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Speaker 2: time in six decades, writers and actors are on strike.

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Speaker 2: At the same time, members of the Actors' union SAG

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Speaker 2: after officially walked off the job. At midnight. Union president

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Speaker 2: fran Dresher had a message for the Alliance of Motion

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Speaker 2: Picture and Television Producers or AMPTP.

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Speaker 8: The jig is up.

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Speaker 3: AMPTP.

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Speaker 9: We stand tall. You have to wake up and smell

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Speaker 9: the coffee.

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Speaker 10: We are labor and we stand tall, and we demand.

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Speaker 2: Respecture says the size or fur part. On compensation for

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Speaker 2: streaming video, the Studio Alliance says it offered the actors

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Speaker 2: higher salaries, residuals and pension and health benefits, along with

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Speaker 2: protections against use of their digital images.

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Speaker 3: Let's turned from Hollywood to Washington. Care and House Republicans

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Speaker 3: have voted to overturn a Pentagon policy on reproductive care

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Speaker 3: for service members that it's putting the Annual Defense Policy

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Speaker 3: Bill in jeopardy. Amy Morris has details from our Bloomberg

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Speaker 3: ninety nine one newsroom in Washington.

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Speaker 9: The House sunned off on a provision putting an end

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Speaker 9: to the Pentagon's policy that offers military members and their

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Speaker 9: famili's time off and travel allowances to seek an abortion

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Speaker 9: or other reproductive care, a policy that prompted Senator Tommy

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Speaker 9: Turboville to put a hold on all military promotions. The

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Speaker 9: amendment was tacked onto the Annual Defense Authorization Bill by

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Speaker 9: Republican Representative Ronnie Jackson, putting passage of the eight hundred

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Speaker 9: eighty six billion dollar bill at risk. Even if the

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Speaker 9: House passes it with the amendment, there's no chance it

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Speaker 9: makes it past the Senate. In Washington, I may me

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Speaker 9: Moore as Bloomberg Daybreak.

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Speaker 2: Amy, Thanks, and finally we have news for your health.

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Speaker 2: The World Health Organization now says the artificial sweetener aspertame

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Speaker 2: may cause cancer, Bloomberg said, Baxter has the.

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Speaker 10: Story aspertame can be found in a lot of products

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Speaker 10: and a possibly carcinogenic label does not pose any immediate changes.

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Speaker 10: But Who's Francisco Bronco says there needs to be more

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Speaker 10: intense investigation now. The FDA disagrees. It says it should

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Speaker 10: not be classified as a possible carcinogen and that even

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Speaker 10: the WHO designation does not mean that it is actually

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Speaker 10: linked to cancer in San Francisco. I'm at Baxter Bloomberg daybreak.

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Speaker 3: Time now for a look at some of the other

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Speaker 3: stories making news in New York and around the world,

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Speaker 3: with Bloomberg's Michael Barr. Good Friday morning, Michael.

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Speaker 6: Good morning to you, Nathan. President Joe Biden will finally

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Speaker 6: reveal how much money he's raised for his re election bid.

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Speaker 6: The Federal Election Commission. Reports due tomorrow will also show

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Speaker 6: which Republicans are mounting a serious challenge to form President

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Speaker 6: Donald Trump for the GOP nomination. Trump and Florida Governor

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Speaker 6: Rond Descantis have already announced their totals. Trump's campaign said

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Speaker 6: he had raised thirty five million dollars, while Descantis brought

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Speaker 6: in more than twenty million, but they did not break

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Speaker 6: down the details or donors. The House overnight defeated an

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Speaker 6: effort by foreign right Republicans to cut off security assistance

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Speaker 6: to Ukraine its cements for now bipartisan support for Kiev's

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Speaker 6: fight against Russia's invasion. President Biden slam the actions of

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Speaker 6: Senator Tommy Tuberville, who is currently refusing to confirm promotions

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Speaker 6: to top military posts until the Pentagon agrees to end

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Speaker 6: its policy of offering leave and travel compensation for reproductive

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Speaker 6: health care, including abortion.

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Speaker 8: The idea that we're injecting into fundamental foreign policy decisions

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Speaker 8: what in fact as a domestic social debate on social issues,

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Speaker 8: is bizarre.

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Speaker 6: Speaking in Helsinki, Biden called it unacceptable. The brutal heat

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Speaker 6: wave that's been baking Arizona for two weeks has been

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Speaker 6: very hard on homeless people in Phoenix, where the temperature

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Speaker 6: has reached one hundred and ten degrees. The homeless are

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Speaker 6: seeking treatment from a local mobile medical van. Doctor Mark

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Speaker 6: Bueno works in the Circle the city medical van.

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Speaker 11: I anticipate that next week is going to be a

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Speaker 11: lot worse. We're climbing up. We're closer to one seventeen,

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Speaker 11: closer to one twenty. That's going to lead to a

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Speaker 11: lot of complications for our patients out here.

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Speaker 6: Much of the Southwest will remain under a heat dome

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Speaker 6: for the next several days. The New York City Council

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Speaker 6: voted to override Mayor Eric Adam's veto of several bills

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Speaker 6: designed to expand access to housing vouchers for a homeless

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Speaker 6: and New Yorkers who are facing eviction. The Council voted

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Speaker 6: forty two to eight. The measure ends a rule that

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Speaker 6: required homeless people to spend ninety days in a shelter

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Speaker 6: before being able to obtain a voucher. It also expands

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Speaker 6: eligibility to city residents. Close to being a global news

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Speaker 6: twenty four hours a day, powered by more than twenty

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Speaker 6: seven hundred journalists and natalysts in over one hundred and

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Speaker 6: twenty countries. I'm Michael barn This is Bloomberg, Nathan.

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Speaker 3: Thank you, Michael. Time now for our Bloomberg Sports up date.

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Speaker 3: Good morning, John stash Hour.

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Speaker 12: Good morning Nathan. Year ago, the Mets and the Yankees

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Speaker 12: began play after the All Star break, both in first place.

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Speaker 12: They'd go on to combine for two hundred regular season wins.

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Speaker 12: Different story twenty twenty three. Both returned from the break

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Speaker 12: in fourth place. In fact, the Yankees only one game

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Speaker 12: ahead of last place Boston. Yet the manager Aaron Broom

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Speaker 12: ever the optimists.

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Speaker 13: We haven't dug ourselves a whole or brow anything like that.

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Speaker 13: It's certainly not been exactly how we wanted the first

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Speaker 13: half to go. But we're in position to go do

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Speaker 13: something special and reach all our goals. So that's that's

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Speaker 13: where the focus is.

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Speaker 12: Tonight in Colorado starts Carlos Verdona's second Yankee Star. Mets

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Speaker 12: have Justin Verlander going at City Field versus the Dodgers.

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Speaker 12: Big contract extension for maybe the Jets' top defensive player,

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Speaker 12: lineman Quinn Williams off twelve sack all pro season cash

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Speaker 12: is in four years ninety six million. Only Aaron Donald

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Speaker 12: of the Rams makes more at that position. Northwestern never

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Speaker 12: known for success in athletics, but they've never had a

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Speaker 12: week as bad as this one. They fired longtime football

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Speaker 12: coach Pat Fitzgerald do the allegations of hazing. They just

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Speaker 12: promoted defensive whatever David Braun to be interim head coach.

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Speaker 12: The school has now fired the baseball coach, Jim Foster

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Speaker 12: after allegations of bullying and having a toxic environment at Wimbledon. Today,

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Speaker 12: Novak Djokovic plays a Grand Slam semifinal match for the

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Speaker 12: forty sixth time, Tyane Roger Federer's record. He'll take you

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Speaker 12: on the Twenty one year old Italian Janick Center. Twenty

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Speaker 12: year old Carlos Alcaraz faces Daniel Medvedez. The top three

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Speaker 12: seeds are all in the final four, but in tomorrow's

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Speaker 12: women's final and unseated player Marquete Andrewsova, first unseated player

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Speaker 12: in a Wimbledon Women's final since a nineteen year old

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Speaker 12: Billy Jean King sixty years ago. She'll face a Jabour.

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Speaker 12: She had a comeback semi final wing yesterday. John Stash

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Speaker 12: Edward Blomberg.

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Speaker 14: Sports coast to coast from New York to San Francisco,

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Speaker 14: Boston to Washington, DC, nationwide on Syrias Exam, the Bloomberg

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Speaker 14: Business Appen Bloomberg dot Com. This is Bloomberg Daybreak. Good morning,

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Speaker 14: I'm Nathan Hager.

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Speaker 3: The market's been partying like it's nineteen ninety nine this week.

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Speaker 3: That is what one strategist at Deutsche Bank is saying.

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Speaker 3: At the end of a week that has seen gains

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Speaker 3: across asset classes. There is a lot of optimism right

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Speaker 3: now that central banks are winning the fight against inflation.

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Speaker 3: Can this momentum last as the focus turns to earnings?

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Speaker 3: What the big banks are going to tell us this

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Speaker 3: week into next? Bloomberg Markets reporter Valerie Titel is with

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Speaker 3: us this morning to take a closer look at this market.

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Speaker 3: It has been quite something to see here, Valerie, to

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Speaker 3: see this kind of momentum get into the market after

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Speaker 3: the downside surprise we got on inflation this week.

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Speaker 15: Exactly what about of optimism we've had this week? You know,

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Speaker 15: even I've got a smile on my face that the

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Speaker 15: door to this mythical soft landing is opening a bit further.

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Speaker 15: You know, after these CPI and PPI came in cool,

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Speaker 15: and most importantly, the sticky components of inflation, the ones

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Speaker 15: that we were worried about, weren't that weren't going to

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Speaker 15: budge lower without a rise in the unemployment rate, without

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Speaker 15: some real weakness in the US economy. Those are showing

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Speaker 15: a disinflation trend. And you know, I want to say

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Speaker 15: we might get to a point this year where you

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Speaker 15: have to throw out that economic textbook that inflation can

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Speaker 15: fall without real economic weakness. We'd have to relearn what

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Speaker 15: we what we learned in high school economics one oh one.

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Speaker 15: But about of optimism this week, and if we look

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Speaker 15: at just the momentum to take this further, there's really

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Speaker 15: not a lot of data we have on the calendar.

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Speaker 15: Next week we get retail sales. The week after we

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Speaker 15: get the preliminary PMIS for July, and then the all

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Speaker 15: important FED meeting where they know, we know they're going

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Speaker 15: to hike twenty five basis points. But it's about their

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Speaker 15: guidance further on what the market or whether this economy

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Speaker 15: does need a further hike sometime in the fall.

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Speaker 3: Yeah, and I guess that guidance will tell us whether

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Speaker 3: the Fed's thrown out its economic textbooks as well, because

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Speaker 3: it's really interesting as well to hear continued commentary now

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Speaker 3: from the likes of FED Governor Christopher Waller, adding to

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Speaker 3: the hawkish voices here, despite the positivity we've seen on inflation,

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Speaker 3: still talking about maybe two more rate hikes to fight

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Speaker 3: the continued price pressures we're seeing.

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Speaker 15: In some ways, I don't think the market really found

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Speaker 15: that surprising. Yesterday, the FED and other members who do

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Speaker 15: speak vocally are going to keep this threat of an

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Speaker 15: additional rate hike out past July on the table, right

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Speaker 15: They We know that Powell maybe had to slip up

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Speaker 15: in January where he used that word disinflation in the

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Speaker 15: press conference one too many times, sounded too positive, that

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Speaker 15: he was in some ways declaring victory on the inflation fight,

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Speaker 15: and that came just a bit too early. They don't

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Speaker 15: want to be burned again by that miscommunication. They're going

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Speaker 15: to continue to communicate this hiking bias up until almost

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Speaker 15: the point where they are gonna cut. So you know,

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Speaker 15: the market does take that with a grain AsSalt. You know,

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Speaker 15: the market doesn't believe what Waller said yesterday about needing

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Speaker 15: another hike in the fall. The market's pricing in one

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Speaker 15: and done, and that's what really led to this big

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Speaker 15: repricing in the dollar this week, slumping over two percent,

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Speaker 15: with two year yields falling nearly thirty basis points, and

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Speaker 15: that equity market just on a roll up two and

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Speaker 15: a half percent, and you know, we're just six percent

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Speaker 15: shy of those all time highs in the S and

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Speaker 15: P and that door for hitting those all time highs

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Speaker 15: just opens a bit farther. If the Fed does not

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Speaker 15: have to keep hiking closer to six percent.

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Speaker 3: Can the momentum continue With earnings, We're going to hear

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Speaker 3: from the first of the big six Wall Street banks

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Speaker 3: later today.

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Speaker 15: It'll be interesting to see those earnings. That will be

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Speaker 15: the key for the equity market in the next few days.

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Speaker 15: Not only do we get a big three announcing today,

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Speaker 15: we get some more next week, including regional banks. A

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Speaker 15: lot of the attention is going to be on net

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Speaker 15: interest margin. The big question for the second quarter is

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Speaker 15: whether that squeeze on margin gets even tighter. Also, an

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Speaker 15: I going to expenses. We know that there has been

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Speaker 15: some redundancies going on in the banking sector at those

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Speaker 15: large investment banks as deal making pipeline decreases. Also an

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Speaker 15: eye on just any more loan loss provisions. We had

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Speaker 15: quite a few of them in the first quarter. Those

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Speaker 15: banks just putting extra cash aside in case of defaults

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Speaker 15: on loans outstanding. So keep an eye out for those

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Speaker 15: three things later today.

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Speaker 3: In our last thirty seconds here, Valerie, the treasury market

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Speaker 3: has seen yields start to move lower as well. What's

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Speaker 3: the possibility that there we could see a return to

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Speaker 3: looser financial conditions, putting attention back on the fad.

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Speaker 15: Well, just I think we're kanic past that point where

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Speaker 15: the Fed is overly focused on financial conditions. When it

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Speaker 15: comes to the indexes we follow that Bloomberg Financial Conditions Index,

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Speaker 15: the Goldman Financial Index they've actually released. The FEDS actually

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Speaker 15: released one of their own financial index that really goes

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Speaker 15: down to showing that it's more about financing costs in

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Speaker 15: the front end, which are still restrictive. Right the feds

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Speaker 15: Federal funds rate, for one, is now in a real

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Speaker 15: positive territory. It's trading above core CPI for the first

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Speaker 15: time since twenty nineteen, so conditions are restrictive when it

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Speaker 15: comes to lending standards.

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