WEBVTT - Bank Earnings Begin; Hollywood on Strike

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<v Speaker 1>Good morning.

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<v Speaker 2>I'm Nathan Hager and I'm Karen Moscow. Here are the

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<v Speaker 2>stories we're following today.

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<v Speaker 3>Karen, we have spent most of this week focused on

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<v Speaker 3>inflation and the economy, but today the attention turns to

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<v Speaker 3>earnings with the kickoff of second quarter reporting season. We

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<v Speaker 3>get more from Bloomberg Global Finance correspond at Shanali Bassek.

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<v Speaker 4>The biggest US banks are set to report earning today.

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

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<v Speaker 4>Bank of America, Morgan Stanley and Goldmenzas next week. What

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

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<v Speaker 4>Are loans starting to go bad? Are the biggest banks

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<v Speaker 4>provisioning for more loan losses? How bad do they expect

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<v Speaker 4>a recession to be? The banks also expect costs to rise,

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<v Speaker 4>cost tied to net interest income, also severance packages, given

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<v Speaker 4>that so many layoffs have hit Wall Street already this year.

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<v Speaker 3>Thanks Shanali, That's Bloomberg Global Finance correspondent Shanali Bassic. Look

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<v Speaker 3>for those earnings from JP, Morgan, Chase, and Wells Fargo

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<v Speaker 3>at seven am Wall Street Time, followed by City Group

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<v Speaker 3>at eight.

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<v Speaker 2>Well Turning to the market, it's now Global stocks are

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<v Speaker 2>on track for their best weekly gain since March. There's

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<v Speaker 2>optimism that FED is close to ending its tightening cycle

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<v Speaker 2>thanks to team or inflation reports this week. Still, FED

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<v Speaker 2>Governor Christopher Waller says more action by the Central Bank

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<v Speaker 2>is needed.

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<v Speaker 5>I see two more twenty five basis point pikes in

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<v Speaker 5>the targar range over the four remaining meetings this year

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<v Speaker 5>as necessary to keep inflation moving down towards our target.

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<v Speaker 5>And I see no reason why the first of those

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<v Speaker 5>two heights should not occur at our meet or his

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<v Speaker 5>meetings later this month, and.

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<v Speaker 2>The next decision FED Governor Christopher Waller mentioned comes on

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<v Speaker 2>July twenty sixth.

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<v Speaker 3>We have another FED note this morning. Karen Saint Louis.

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<v Speaker 3>FED President James Bullard is resigning after fifteen years to

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<v Speaker 3>become dean of the Business School at Purdue University. Bullard

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<v Speaker 3>is among those who have called for aggressive interest rate

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<v Speaker 3>hikes to fight inflation.

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<v Speaker 6>Well.

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<v Speaker 2>In Corporate News, Nathan, the legal battle over Microsoft's plan

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<v Speaker 2>purchase of Activision lingers on the Federal Trade Commission is

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<v Speaker 2>urging an appeal court to delay the sixty nine billion

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<v Speaker 2>dollar takeover, while the agency's challenge to the largest ever

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<v Speaker 2>gaming deal is pending. They get more from Bloomberg technology

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<v Speaker 2>reporter At Ludlow from the Allen and Company conference in

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<v Speaker 2>Sun Valley, Idaho.

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<v Speaker 7>Everyone is focused on the deal, and I think it's

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<v Speaker 7>this idea that if you are a technology executive or

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<v Speaker 7>a meet well, I know it's this idea a technology

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<v Speaker 7>media executive, you're kind of looking at this as a

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<v Speaker 7>case study. You know the FTC's willingness to carry on

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<v Speaker 7>the fight, but also you know this is a precedent

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<v Speaker 7>that would be set the biggest video games deal of

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<v Speaker 7>all time. Sixty nine billion dollars is a lot of dollars, right,

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<v Speaker 7>So that's the context everyone's looking at. Will we see

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<v Speaker 7>more m and A because the FDC decides to back down,

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<v Speaker 7>or are we going to continue with this narrative that

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<v Speaker 7>you know, global regulators are going to continue fighting and

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<v Speaker 7>looking at the m and A.

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<v Speaker 2>And Bloomberg said love lower force. Microsoft and Activision are

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<v Speaker 2>making moves overseas to try to keep the deal alive,

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<v Speaker 2>and sources tell us they may give up control of

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<v Speaker 2>some of their cloud gaming business in the UK to

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<v Speaker 2>satisfy regulators there.

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<v Speaker 7>Well.

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<v Speaker 3>Karen and other legal battles brewing involving another tech company.

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<v Speaker 3>A group of former top executives at Twitter say the

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<v Speaker 3>social media platform ows them more than one point six

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<v Speaker 3>million dollars for legal fees. The group, led by ex

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<v Speaker 3>Twitter CEO Perogue Agrawah, wants a judge to force new

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<v Speaker 3>owner Elon Musk to pay that tab now. They say

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<v Speaker 3>the legal bills piled up in connection with lawsuits and

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<v Speaker 3>government probes while they ran Twitter.

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<v Speaker 2>Well Nathan, a dispute in the entertainment world means the

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<v Speaker 2>show will not go on. In Hollywood for the first

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<v Speaker 2>time in six decades, writers and actors are on strike.

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<v Speaker 2>At the same time, members of the Actors' union SAG

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<v Speaker 2>after officially walked off the job. At midnight. Union president

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<v Speaker 2>fran Dresher had a message for the Alliance of Motion

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<v Speaker 2>Picture and Television Producers or AMPTP.

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<v Speaker 8>The jig is up.

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<v Speaker 3>AMPTP.

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<v Speaker 9>We stand tall. You have to wake up and smell

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<v Speaker 9>the coffee.

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<v Speaker 10>We are labor and we stand tall, and we demand.

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<v Speaker 2>Respecture says the size or fur part. On compensation for

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<v Speaker 2>streaming video, the Studio Alliance says it offered the actors

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<v Speaker 2>higher salaries, residuals and pension and health benefits, along with

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<v Speaker 2>protections against use of their digital images.

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<v Speaker 3>Let's turned from Hollywood to Washington. Care and House Republicans

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<v Speaker 3>have voted to overturn a Pentagon policy on reproductive care

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<v Speaker 3>for service members that it's putting the Annual Defense Policy

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<v Speaker 3>Bill in jeopardy. Amy Morris has details from our Bloomberg

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<v Speaker 3>ninety nine one newsroom in Washington.

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<v Speaker 9>The House sunned off on a provision putting an end

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<v Speaker 9>to the Pentagon's policy that offers military members and their

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<v Speaker 9>famili's time off and travel allowances to seek an abortion

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<v Speaker 9>or other reproductive care, a policy that prompted Senator Tommy

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<v Speaker 9>Turboville to put a hold on all military promotions. The

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<v Speaker 9>amendment was tacked onto the Annual Defense Authorization Bill by

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<v Speaker 9>Republican Representative Ronnie Jackson, putting passage of the eight hundred

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<v Speaker 9>eighty six billion dollar bill at risk. Even if the

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<v Speaker 9>House passes it with the amendment, there's no chance it

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<v Speaker 9>makes it past the Senate. In Washington, I may me

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<v Speaker 9>Moore as Bloomberg Daybreak.

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<v Speaker 2>Amy, Thanks, and finally we have news for your health.

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<v Speaker 2>The World Health Organization now says the artificial sweetener aspertame

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<v Speaker 2>may cause cancer, Bloomberg said, Baxter has the.

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<v Speaker 10>Story aspertame can be found in a lot of products

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<v Speaker 10>and a possibly carcinogenic label does not pose any immediate changes.

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<v Speaker 10>But Who's Francisco Bronco says there needs to be more

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<v Speaker 10>intense investigation now. The FDA disagrees. It says it should

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<v Speaker 10>not be classified as a possible carcinogen and that even

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<v Speaker 10>the WHO designation does not mean that it is actually

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

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<v Speaker 3>Time now for a look at some of the other

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<v Speaker 3>stories making news in New York and around the world,

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<v Speaker 3>with Bloomberg's Michael Barr. Good Friday morning, Michael.

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<v Speaker 6>Good morning to you, Nathan. President Joe Biden will finally

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

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<v Speaker 6>The Federal Election Commission. Reports due tomorrow will also show

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<v Speaker 6>which Republicans are mounting a serious challenge to form President

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<v Speaker 6>Donald Trump for the GOP nomination. Trump and Florida Governor

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<v Speaker 6>Rond Descantis have already announced their totals. Trump's campaign said

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<v Speaker 6>he had raised thirty five million dollars, while Descantis brought

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<v Speaker 6>in more than twenty million, but they did not break

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<v Speaker 6>down the details or donors. The House overnight defeated an

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<v Speaker 6>effort by foreign right Republicans to cut off security assistance

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<v Speaker 6>to Ukraine its cements for now bipartisan support for Kiev's

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<v Speaker 6>fight against Russia's invasion. President Biden slam the actions of

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<v Speaker 6>Senator Tommy Tuberville, who is currently refusing to confirm promotions

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<v Speaker 6>to top military posts until the Pentagon agrees to end

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<v Speaker 6>its policy of offering leave and travel compensation for reproductive

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<v Speaker 6>health care, including abortion.

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<v Speaker 8>The idea that we're injecting into fundamental foreign policy decisions

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<v Speaker 8>what in fact as a domestic social debate on social issues,

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<v Speaker 8>is bizarre.

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<v Speaker 6>Speaking in Helsinki, Biden called it unacceptable. The brutal heat

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<v Speaker 6>wave that's been baking Arizona for two weeks has been

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<v Speaker 6>very hard on homeless people in Phoenix, where the temperature

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<v Speaker 6>has reached one hundred and ten degrees. The homeless are

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<v Speaker 6>seeking treatment from a local mobile medical van. Doctor Mark

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<v Speaker 6>Bueno works in the Circle the city medical van.

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<v Speaker 11>I anticipate that next week is going to be a

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<v Speaker 11>lot worse. We're climbing up. We're closer to one seventeen,

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<v Speaker 11>closer to one twenty. That's going to lead to a

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<v Speaker 11>lot of complications for our patients out here.

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<v Speaker 6>Much of the Southwest will remain under a heat dome

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<v Speaker 6>for the next several days. The New York City Council

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<v Speaker 6>voted to override Mayor Eric Adam's veto of several bills

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<v Speaker 6>designed to expand access to housing vouchers for a homeless

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<v Speaker 6>and New Yorkers who are facing eviction. The Council voted

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<v Speaker 6>forty two to eight. The measure ends a rule that

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<v Speaker 6>required homeless people to spend ninety days in a shelter

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<v Speaker 6>before being able to obtain a voucher. It also expands

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<v Speaker 6>eligibility to city residents. Close to being a global news

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<v Speaker 6>twenty four hours a day, powered by more than twenty

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<v Speaker 6>seven hundred journalists and natalysts in over one hundred and

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<v Speaker 6>twenty countries. I'm Michael barn This is Bloomberg, Nathan.

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<v Speaker 3>Thank you, Michael. Time now for our Bloomberg Sports up date.

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<v Speaker 3>Good morning, John stash Hour.

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<v Speaker 12>Good morning Nathan. Year ago, the Mets and the Yankees

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<v Speaker 12>began play after the All Star break, both in first place.

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

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<v Speaker 12>Different story twenty twenty three. Both returned from the break

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<v Speaker 12>in fourth place. In fact, the Yankees only one game

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<v Speaker 12>ahead of last place Boston. Yet the manager Aaron Broom

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<v Speaker 12>ever the optimists.

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

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<v Speaker 13>It's certainly not been exactly how we wanted the first

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<v Speaker 13>half to go. But we're in position to go do

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<v Speaker 13>something special and reach all our goals. So that's that's

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<v Speaker 13>where the focus is.

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<v Speaker 12>Tonight in Colorado starts Carlos Verdona's second Yankee Star. Mets

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<v Speaker 12>have Justin Verlander going at City Field versus the Dodgers.

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<v Speaker 12>Big contract extension for maybe the Jets' top defensive player,

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<v Speaker 12>lineman Quinn Williams off twelve sack all pro season cash

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<v Speaker 12>is in four years ninety six million. Only Aaron Donald

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<v Speaker 12>of the Rams makes more at that position. Northwestern never

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<v Speaker 12>known for success in athletics, but they've never had a

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<v Speaker 12>week as bad as this one. They fired longtime football

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<v Speaker 12>coach Pat Fitzgerald do the allegations of hazing. They just

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<v Speaker 12>promoted defensive whatever David Braun to be interim head coach.

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<v Speaker 12>The school has now fired the baseball coach, Jim Foster

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

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<v Speaker 12>Novak Djokovic plays a Grand Slam semifinal match for the

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

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<v Speaker 12>on the Twenty one year old Italian Janick Center. Twenty

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<v Speaker 12>year old Carlos Alcaraz faces Daniel Medvedez. The top three

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<v Speaker 12>seeds are all in the final four, but in tomorrow's

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<v Speaker 12>women's final and unseated player Marquete Andrewsova, first unseated player

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<v Speaker 12>in a Wimbledon Women's final since a nineteen year old

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<v Speaker 12>Billy Jean King sixty years ago. She'll face a Jabour.

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<v Speaker 12>She had a comeback semi final wing yesterday. John Stash

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<v Speaker 12>Edward Blomberg.

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<v Speaker 14>Sports coast to coast from New York to San Francisco,

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<v Speaker 14>Boston to Washington, DC, nationwide on Syrias Exam, the Bloomberg

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<v Speaker 14>Business Appen Bloomberg dot Com. This is Bloomberg Daybreak. Good morning,

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<v Speaker 14>I'm Nathan Hager.

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

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<v Speaker 3>That is what one strategist at Deutsche Bank is saying.

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<v Speaker 3>At the end of a week that has seen gains

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<v Speaker 3>across asset classes. There is a lot of optimism right

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<v Speaker 3>now that central banks are winning the fight against inflation.

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<v Speaker 3>Can this momentum last as the focus turns to earnings?

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<v Speaker 3>What the big banks are going to tell us this

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<v Speaker 3>week into next? Bloomberg Markets reporter Valerie Titel is with

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<v Speaker 3>us this morning to take a closer look at this market.

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<v Speaker 3>It has been quite something to see here, Valerie, to

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<v Speaker 3>see this kind of momentum get into the market after

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<v Speaker 3>the downside surprise we got on inflation this week.

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

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<v Speaker 15>even I've got a smile on my face that the

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<v Speaker 15>door to this mythical soft landing is opening a bit further.

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<v Speaker 15>You know, after these CPI and PPI came in cool,

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<v Speaker 15>and most importantly, the sticky components of inflation, the ones

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<v Speaker 15>that we were worried about, weren't that weren't going to

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<v Speaker 15>budge lower without a rise in the unemployment rate, without

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<v Speaker 15>some real weakness in the US economy. Those are showing

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<v Speaker 15>a disinflation trend. And you know, I want to say

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<v Speaker 15>we might get to a point this year where you

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<v Speaker 15>have to throw out that economic textbook that inflation can

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<v Speaker 15>fall without real economic weakness. We'd have to relearn what

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<v Speaker 15>we what we learned in high school economics one oh one.

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<v Speaker 15>But about of optimism this week, and if we look

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<v Speaker 15>at just the momentum to take this further, there's really

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<v Speaker 15>not a lot of data we have on the calendar.

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<v Speaker 15>Next week we get retail sales. The week after we

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<v Speaker 15>get the preliminary PMIS for July, and then the all

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<v Speaker 15>important FED meeting where they know, we know they're going

0:11:56.280 --> 0:11:58.720
<v Speaker 15>to hike twenty five basis points. But it's about their

0:11:58.720 --> 0:12:01.960
<v Speaker 15>guidance further on what the market or whether this economy

0:12:01.960 --> 0:12:04.240
<v Speaker 15>does need a further hike sometime in the fall.

0:12:04.480 --> 0:12:06.640
<v Speaker 3>Yeah, and I guess that guidance will tell us whether

0:12:07.040 --> 0:12:10.959
<v Speaker 3>the Fed's thrown out its economic textbooks as well, because

0:12:11.160 --> 0:12:14.839
<v Speaker 3>it's really interesting as well to hear continued commentary now

0:12:14.840 --> 0:12:17.800
<v Speaker 3>from the likes of FED Governor Christopher Waller, adding to

0:12:17.880 --> 0:12:22.120
<v Speaker 3>the hawkish voices here, despite the positivity we've seen on inflation,

0:12:22.320 --> 0:12:26.680
<v Speaker 3>still talking about maybe two more rate hikes to fight

0:12:26.760 --> 0:12:29.040
<v Speaker 3>the continued price pressures we're seeing.

0:12:29.520 --> 0:12:31.960
<v Speaker 15>In some ways, I don't think the market really found

0:12:32.000 --> 0:12:36.920
<v Speaker 15>that surprising. Yesterday, the FED and other members who do

0:12:37.040 --> 0:12:39.920
<v Speaker 15>speak vocally are going to keep this threat of an

0:12:39.920 --> 0:12:43.640
<v Speaker 15>additional rate hike out past July on the table, right

0:12:43.679 --> 0:12:48.040
<v Speaker 15>They We know that Powell maybe had to slip up

0:12:48.240 --> 0:12:51.160
<v Speaker 15>in January where he used that word disinflation in the

0:12:51.200 --> 0:12:55.160
<v Speaker 15>press conference one too many times, sounded too positive, that

0:12:55.280 --> 0:12:58.600
<v Speaker 15>he was in some ways declaring victory on the inflation fight,

0:12:58.679 --> 0:13:00.360
<v Speaker 15>and that came just a bit too early. They don't

0:13:00.360 --> 0:13:03.160
<v Speaker 15>want to be burned again by that miscommunication. They're going

0:13:03.240 --> 0:13:08.760
<v Speaker 15>to continue to communicate this hiking bias up until almost

0:13:08.760 --> 0:13:11.439
<v Speaker 15>the point where they are gonna cut. So you know,

0:13:12.080 --> 0:13:14.280
<v Speaker 15>the market does take that with a grain AsSalt. You know,

0:13:14.320 --> 0:13:17.679
<v Speaker 15>the market doesn't believe what Waller said yesterday about needing

0:13:17.679 --> 0:13:20.320
<v Speaker 15>another hike in the fall. The market's pricing in one

0:13:20.360 --> 0:13:23.559
<v Speaker 15>and done, and that's what really led to this big

0:13:23.600 --> 0:13:27.320
<v Speaker 15>repricing in the dollar this week, slumping over two percent,

0:13:27.440 --> 0:13:30.840
<v Speaker 15>with two year yields falling nearly thirty basis points, and

0:13:30.880 --> 0:13:32.880
<v Speaker 15>that equity market just on a roll up two and

0:13:32.920 --> 0:13:35.120
<v Speaker 15>a half percent, and you know, we're just six percent

0:13:35.160 --> 0:13:37.400
<v Speaker 15>shy of those all time highs in the S and

0:13:37.440 --> 0:13:40.800
<v Speaker 15>P and that door for hitting those all time highs

0:13:40.840 --> 0:13:43.079
<v Speaker 15>just opens a bit farther. If the Fed does not

0:13:43.240 --> 0:13:45.600
<v Speaker 15>have to keep hiking closer to six percent.

0:13:45.679 --> 0:13:49.520
<v Speaker 3>Can the momentum continue With earnings, We're going to hear

0:13:49.559 --> 0:13:51.920
<v Speaker 3>from the first of the big six Wall Street banks

0:13:51.960 --> 0:13:52.520
<v Speaker 3>later today.

0:13:53.000 --> 0:13:55.920
<v Speaker 15>It'll be interesting to see those earnings. That will be

0:13:56.040 --> 0:13:58.320
<v Speaker 15>the key for the equity market in the next few days.

0:13:58.360 --> 0:14:00.720
<v Speaker 15>Not only do we get a big three announcing today,

0:14:00.760 --> 0:14:03.600
<v Speaker 15>we get some more next week, including regional banks. A

0:14:03.640 --> 0:14:06.360
<v Speaker 15>lot of the attention is going to be on net

0:14:06.440 --> 0:14:09.600
<v Speaker 15>interest margin. The big question for the second quarter is

0:14:09.640 --> 0:14:13.400
<v Speaker 15>whether that squeeze on margin gets even tighter. Also, an

0:14:13.400 --> 0:14:17.120
<v Speaker 15>I going to expenses. We know that there has been

0:14:17.160 --> 0:14:20.280
<v Speaker 15>some redundancies going on in the banking sector at those

0:14:20.360 --> 0:14:26.440
<v Speaker 15>large investment banks as deal making pipeline decreases. Also an

0:14:26.480 --> 0:14:29.200
<v Speaker 15>eye on just any more loan loss provisions. We had

0:14:29.440 --> 0:14:32.240
<v Speaker 15>quite a few of them in the first quarter. Those

0:14:32.280 --> 0:14:36.720
<v Speaker 15>banks just putting extra cash aside in case of defaults

0:14:36.760 --> 0:14:39.520
<v Speaker 15>on loans outstanding. So keep an eye out for those

0:14:39.520 --> 0:14:40.920
<v Speaker 15>three things later today.

0:14:41.200 --> 0:14:45.120
<v Speaker 3>In our last thirty seconds here, Valerie, the treasury market

0:14:45.240 --> 0:14:50.120
<v Speaker 3>has seen yields start to move lower as well. What's

0:14:50.160 --> 0:14:53.800
<v Speaker 3>the possibility that there we could see a return to

0:14:54.040 --> 0:14:57.360
<v Speaker 3>looser financial conditions, putting attention back on the fad.

0:14:59.200 --> 0:15:01.840
<v Speaker 15>Well, just I think we're kanic past that point where

0:15:01.840 --> 0:15:05.640
<v Speaker 15>the Fed is overly focused on financial conditions. When it

0:15:05.680 --> 0:15:09.800
<v Speaker 15>comes to the indexes we follow that Bloomberg Financial Conditions Index,

0:15:09.840 --> 0:15:13.840
<v Speaker 15>the Goldman Financial Index they've actually released. The FEDS actually

0:15:13.880 --> 0:15:16.560
<v Speaker 15>released one of their own financial index that really goes

0:15:16.560 --> 0:15:19.760
<v Speaker 15>down to showing that it's more about financing costs in

0:15:19.840 --> 0:15:24.640
<v Speaker 15>the front end, which are still restrictive. Right the feds

0:15:25.120 --> 0:15:29.280
<v Speaker 15>Federal funds rate, for one, is now in a real

0:15:29.880 --> 0:15:33.440
<v Speaker 15>positive territory. It's trading above core CPI for the first

0:15:33.440 --> 0:15:36.680
<v Speaker 15>time since twenty nineteen, so conditions are restrictive when it

0:15:36.680 --> 0:15:37.800
<v Speaker 15>comes to lending standards.

0:15:40.480 --> 0:15:43.400
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