WEBVTT - Bloomberg Daybreak: August 22, 2022 - Hour 1 (Radio) 0:00:01.680 --> 0:00:05.039 By from the Bloomberg Interactive Brooker Studios. This is Bloomberg 0:00:05.160 --> 0:00:08.440 day Break for a Monday, August twenty two two. Coming 0:00:08.520 --> 0:00:11.239 up this hour, stock futures fall ahead of the key 0:00:11.320 --> 0:00:14.840 FED symposium in Jackson Hall. Can your treasury yields approach 0:00:14.880 --> 0:00:17.480 three percent? As traders met? J? Powell and the Fed 0:00:17.560 --> 0:00:20.959 will continue their hawkish stance, and President Biden speaks with 0:00:21.040 --> 0:00:24.640 European leaders about reviving a nuclear deal with Iran. New 0:00:24.720 --> 0:00:27.360 York City confirms a case of monkey box and someone 0:00:27.480 --> 0:00:30.080 under the age of eighteen plus. A car bomb has 0:00:30.160 --> 0:00:32.920 killed the daughter of a prominent ally of Vladimir Putin. 0:00:32.960 --> 0:00:35.960 I'm Michael Barber. More ahead, I'm John Stam showering sports. 0:00:35.960 --> 0:00:38.440 An amazing win for the Mets, a much needed one 0:00:38.520 --> 0:00:41.040 for the Yankees. The Subway Series begins tonight. The Giants 0:00:41.040 --> 0:00:46.440 won their preseason game. That's all Train ahead on Bloomberg 0:00:46.479 --> 0:00:51.560 Daybreak on Bloomberg eleven three, on New York, Bloomberg one, Washington, 0:00:51.680 --> 0:00:55.720 d C, Bloomberg one oh six one, Boston, Bloomberg nine sixty, 0:00:55.800 --> 0:00:59.640 San Francisco, Sirius x M one nineteen and around the 0:00:59.680 --> 0:01:03.000 world on Bloomberg Radio dot Com and via the Bloomberg 0:01:03.040 --> 0:01:10.280 Business app. Good morning, I'm Nathan Hager and I'm Karen Moscow. 0:01:10.400 --> 0:01:13.200 US DOT Index futures are lower this morning. We are 0:01:13.200 --> 0:01:14.800 coming up to five o one on Wall Street, and 0:01:14.840 --> 0:01:17.319 we check the markets every fifteen minutes throughout the trading 0:01:17.400 --> 0:01:20.200 day on Bloomberg right now, S and P futures are 0:01:20.280 --> 0:01:23.040 down forty eight points down, futures down three hundred and 0:01:23.120 --> 0:01:26.600 nownsday futures down two hundred to the decks. In Germany 0:01:26.720 --> 0:01:29.560 is down about one point eight percent. Ten year treasury 0:01:29.600 --> 0:01:32.160 it'll change yeld two point nine seven percent, and the 0:01:32.319 --> 0:01:34.960 yield on the two year three point to eight percent. 0:01:35.360 --> 0:01:39.319 Nine x screwede oil is down one point seven percent, Nathan, Karen, 0:01:39.400 --> 0:01:41.880 It is all about the FED this week. The annual 0:01:41.959 --> 0:01:46.160 Jackson Hole Symposium begins on Thursday. FED Chair J Powell 0:01:46.240 --> 0:01:48.760 may use his speech on Friday to push back on 0:01:48.880 --> 0:01:53.000 speculation that interest rates will fall in three. Benchmark ten 0:01:53.040 --> 0:01:55.600 year treasury yields came within a whisk or three percent, 0:01:55.720 --> 0:01:58.800 with traders betting policymakers will double down on their hawk 0:01:58.880 --> 0:02:01.880 is stance still. Jablonski is co founder of Defiant c 0:02:02.040 --> 0:02:04.559 t FS. You know what I would expect is that 0:02:04.680 --> 0:02:06.960 you know, he'll kind of follows to what he's sort 0:02:07.000 --> 0:02:09.480 of been doing before, and you know, we'll probably hang 0:02:09.480 --> 0:02:11.200 on every word and trying to determine whether or not 0:02:11.240 --> 0:02:13.120 we thought he was he was devilish or whether he 0:02:13.200 --> 0:02:15.960 was he was hawkish. But you know, the message we've 0:02:16.000 --> 0:02:19.280 been getting is very much it depends on the data defiance. 0:02:19.280 --> 0:02:22.000 Ct F. Silvia Jablonski does not think the market will 0:02:22.040 --> 0:02:24.799 get a clear cut message from the Fed. We of course, 0:02:24.840 --> 0:02:28.519 will have complete coverage of the Jackson Hoole Symposium. Bloomberg's 0:02:28.520 --> 0:02:32.200 Surveillance will be there live beginning on Thursday, with Tom Keene, 0:02:32.320 --> 0:02:35.320 Lisa Ramo Witz, and Jonathan Farrell. Well Nathan, The FED 0:02:35.480 --> 0:02:38.200 is still on a collision course with financial markets. According 0:02:38.240 --> 0:02:40.720 to the latest m L I V. Paul survey, stunks 0:02:40.720 --> 0:02:43.480 and bonds are set to tumble once more, even though 0:02:43.520 --> 0:02:46.959 inflation has likely peaked. Eight four percent of respondents in 0:02:47.040 --> 0:02:49.640 the survey say it may take two years or longer 0:02:49.680 --> 0:02:51.920 for the Fed to bring inflation down to its official 0:02:52.000 --> 0:02:55.280 long term target of two Well. Wall Street's focus will 0:02:55.280 --> 0:02:57.040 be on the Fed this week. Karen will still get 0:02:57.040 --> 0:02:59.799 a number of earnings reports from tech companies, and we 0:03:00.080 --> 0:03:03.560 a preview from Bloomberg's Charlie Pellett. Those tech names this 0:03:03.639 --> 0:03:07.720 week will include Autodesk, Dell Into its sales force, Snowflake, 0:03:07.800 --> 0:03:11.320 and vm Ware. Questions abound about the outlook for corporate 0:03:11.360 --> 0:03:15.040 earnings given federal Reserve efforts to quell inflation with higher 0:03:15.040 --> 0:03:18.920 interest rates. Alan zafron Is co CEO at I e 0:03:19.120 --> 0:03:22.880 Q capital earnings aren't as bad as people fear. Inflation 0:03:22.960 --> 0:03:26.480 is starting to come down. You have a remarkably over 0:03:26.560 --> 0:03:30.680 sold short term technical condition and if you do read 0:03:30.760 --> 0:03:33.840 the chartists and technical analysts are out there, they'll tell 0:03:33.880 --> 0:03:36.480 you that the set up right now is for a 0:03:36.600 --> 0:03:41.040 continuation of this rally. Also reporting this week, Dollar General, 0:03:41.160 --> 0:03:46.040 Dollar Tree, and Zoom Video Communications in New York, Charlie Pellet, 0:03:46.040 --> 0:03:49.600 Bloomberg day Break Charlie Thanks. In Asia, Chinese banks have 0:03:49.680 --> 0:03:52.800 cut their loan of prim rates, and Bloomberg Daybreak Asia 0:03:52.840 --> 0:03:55.800 anchor Bryan Kurdish has more from Hong Kong. The one 0:03:55.880 --> 0:03:58.600 year rate was lowered just five basis points to three 0:03:58.600 --> 0:04:01.720 point six five percent. The five year rate reference for 0:04:01.760 --> 0:04:05.360 mortgages was cut fifteen basis points to four point three percent. 0:04:05.920 --> 0:04:08.920 The rate cuts follow news on Friday of additional financing 0:04:08.960 --> 0:04:12.400 to prop up the real estate sector. Chinese developer stocks 0:04:12.480 --> 0:04:15.560 jumped in Hong Kong. It comes as the economy faces 0:04:15.600 --> 0:04:18.599 pressure on a number of fronts. In the maintime, authorities 0:04:18.600 --> 0:04:22.480 have extended power cuts in Sichuan Province. They have activated 0:04:22.520 --> 0:04:26.360 the highest emergency response in Hong Kong. Brian Curtis Sloomberg 0:04:26.360 --> 0:04:29.479 gabriak Okay Brian, thank you. Oil is following this morning. 0:04:29.480 --> 0:04:32.679 West Texas Intermediates down one point seven percent to eighty 0:04:32.760 --> 0:04:35.680 nine dollars one cents of barrel. The move comes as 0:04:35.720 --> 0:04:39.280 negotiations move forward to revive a nuclear deal with Iran. 0:04:39.520 --> 0:04:43.200 Details from Amy Morris in our Bloomberg newsroom. In Washington, 0:04:43.400 --> 0:04:46.159 President Biden spoke with leaders from Germany, France, and the 0:04:46.279 --> 0:04:49.640 UK for of the original signatories of the Iran nuclear deal, 0:04:49.680 --> 0:04:54.360 which also include Russia and China. The four discussed ongoing negotiations. 0:04:54.400 --> 0:04:58.120 Iran has released its response to the latest framework earlier 0:04:58.160 --> 0:05:01.159 this month, and the US State tai lipped on its position. 0:05:01.360 --> 0:05:05.080 The EU took it as constructive. One advisor to Iran's 0:05:05.120 --> 0:05:09.480 nuclear negotiating team, says tron Once the US penalized if 0:05:09.520 --> 0:05:13.279 it backs out again. In Washington, I'm anymore as Bloomberg Daybreak, 0:05:13.360 --> 0:05:15.960 All right, Amy, thank you. Back in East Asia, the 0:05:16.040 --> 0:05:18.800 US and South Korea are planning their biggest drills since 0:05:18.880 --> 0:05:22.679 North Korean leader Kim Jonglen's summit with then President Donald Trump, 0:05:22.880 --> 0:05:25.760 and Bloomberg said Baxter has that story the biggest in 0:05:25.800 --> 0:05:29.080 about five years because the Trump Kim summit apparently did 0:05:29.160 --> 0:05:31.719 not work in enticing Kim Jongon to cut back on 0:05:31.760 --> 0:05:35.880 his nuclear programs. The drills are called Bullschief Freedom Shield 0:05:36.120 --> 0:05:39.800 and are expected to involve thousands of military personnel. The 0:05:39.880 --> 0:05:43.440 US and South Korea say they're defensive in nature and 0:05:43.520 --> 0:05:46.920 will coordinate forces to respond to the possible invasion by 0:05:47.160 --> 0:05:51.680 North Korea. An angry response from the Kim regime is expected. 0:05:52.080 --> 0:05:55.080 In San Francisco, I'm at Baxter Bloomberg Daybreak, all right, 0:05:55.120 --> 0:05:57.760 and thank you. In corporate news, the takeover battle for 0:05:57.880 --> 0:06:00.760 Signify Health is heating up. To get the latest on 0:06:00.839 --> 0:06:03.200 that live from Bloomberg, Jo need a Young, Good morning, Nita, 0:06:03.240 --> 0:06:06.960 good morning, Nathan. Sources say Amazon dot Com, United Health, 0:06:07.080 --> 0:06:10.880 CVS Health, and optioned care Health are all vying to 0:06:11.000 --> 0:06:15.080 acquire signify Health now. United Health submitted the highest bid 0:06:15.160 --> 0:06:18.239 at more than thirty dollars a share, while Amazon's offer 0:06:18.400 --> 0:06:22.840 is close behind. Signify closed above twenty one dollars on Friday, 0:06:22.839 --> 0:06:26.720 which values the company at nearly five billion dollars. None 0:06:26.760 --> 0:06:29.599 of the plans are finalized yet, and the bidders plans 0:06:29.600 --> 0:06:34.320 could still change. Also, Signify could always opt to remain independent. 0:06:34.680 --> 0:06:38.200 Sources tell Bloomberg that Signifies holding a board meeting today 0:06:38.240 --> 0:06:41.120 to discuss the bids. Live in New York. I'm real 0:06:41.200 --> 0:06:43.520 need a young Bloomberg dabreak. I re need to thank you. 0:06:43.600 --> 0:06:46.440 I get ready to pay more for Tesla's self driving system. 0:06:46.560 --> 0:06:49.960 CEO Elon must tweeted the price will rise three thousand 0:06:50.000 --> 0:06:53.440 dollars to fifteen thousand in North America. Ian grease will 0:06:53.440 --> 0:06:56.360 take effect on September five. It's a second price hike 0:06:56.480 --> 0:06:59.320 for Tesla's self driving this year. And finally, Karen was 0:06:59.360 --> 0:07:01.200 tough for some Gay the Thrones fans to enter the 0:07:01.200 --> 0:07:04.719 House of the Dragon through HBO Max. The Fantasy Prequels 0:07:04.800 --> 0:07:08.480 debut episode overwhelmed the streaming service last night. More than 0:07:08.520 --> 0:07:11.320 three thousand outages were reported as of nine pm Eastern. 0:07:11.680 --> 0:07:14.680 HBO's parent company says some viewers had trouble connecting through 0:07:14.800 --> 0:07:23.200 Amazon Fire TV devices. You're listening to Bloomberg Daybreak in 0:07:23.280 --> 0:07:25.480 South five oh seven on Wall Street where seventy three 0:07:25.480 --> 0:07:28.560 degrees in Central Park on an accident southbound West Side 0:07:28.600 --> 0:07:32.160 Highway by a hut. Saying more about that in traffic shortly. First, 0:07:32.160 --> 0:07:34.640 Michael Bars here with what else is going on in 0:07:34.640 --> 0:07:36.920 New York and around the world. Good morning, Michael, Good 0:07:36.960 --> 0:07:40.200 morning Nathan. New York has its first confirmed case of 0:07:40.240 --> 0:07:44.520 monkeypox in someone under the age of eighteen. Officials from 0:07:44.520 --> 0:07:47.360 the New York Department of Health say the virus was 0:07:47.440 --> 0:07:50.360 detected in a child or teenager living outside of New 0:07:50.440 --> 0:07:53.840 York City. The virus is primarily spread through skin to 0:07:54.000 --> 0:07:58.160 skin contact, and the majority of the cases have affected 0:07:58.200 --> 0:08:01.760 gay men, but it also has been detected into women 0:08:01.800 --> 0:08:05.200 outside of New York City and sixteen women living in 0:08:05.200 --> 0:08:08.200 the city. With the school year about to begin, New 0:08:08.240 --> 0:08:11.400 York City schools saying they have not yet received any 0:08:11.440 --> 0:08:14.880 official guidance about monkey pocks mean while starting today, an 0:08:14.880 --> 0:08:19.640 additional three sixty thousand vials of monkeypox vaccine will be 0:08:19.680 --> 0:08:24.480 available nationwide. That's potentially enough vaccine for one point eight 0:08:24.480 --> 0:08:27.800 million shots and arms using the Biden administration's new approach 0:08:28.000 --> 0:08:32.640 to stretch limited supplies. In Kansas City, Missouri, health official 0:08:32.720 --> 0:08:37.040 Scott Clarity is addressing privacy concerns. The city now has 0:08:37.080 --> 0:08:40.160 an online survey to help identify people who may qualify 0:08:40.320 --> 0:08:43.080 for the vaccine. If you're concerned that you may have 0:08:43.160 --> 0:08:47.640 been exposed to to to monkey pox, get online fill 0:08:47.679 --> 0:08:52.520 out that form. Health official Scott Clarity says, according to data, 0:08:52.720 --> 0:08:56.600 there are more than fourteen thousand monkey pox cases nationwide. 0:08:57.080 --> 0:09:00.680 Republican Congresswoman Liz Cheney says that her focused al is 0:09:00.800 --> 0:09:04.000 keeping former President Trump out of the White House. Following 0:09:04.000 --> 0:09:07.160 her election loss, Cheney said that President Joe Biden Phoneder 0:09:07.600 --> 0:09:10.920 and they had a very good talk. Cheney spoke to 0:09:10.960 --> 0:09:16.319 ABC just days after her primary loss in Wyoming. No regrets, UM, 0:09:16.400 --> 0:09:19.840 you know, I I feel. I feel sad about where 0:09:19.880 --> 0:09:22.480 my party is. I feel sad about the way that 0:09:23.040 --> 0:09:25.880 UM too many of my colleagues have responded to what 0:09:25.960 --> 0:09:29.200 I think is a great moral test and challenge of 0:09:29.200 --> 0:09:32.760 our time. Liz Cheney spoke on ABC's This Week, which 0:09:32.760 --> 0:09:36.400 can be heard Sundays on Bloomberg. Ukrainian officials are denying 0:09:36.440 --> 0:09:40.000 the country's Russian allegations that they were behind the car 0:09:40.040 --> 0:09:43.679 bomb attack that killed the daughter of a prominent Vladimir 0:09:43.720 --> 0:09:47.400 putin Alle in Russia. Daria Dugina, the daughter of a 0:09:47.440 --> 0:09:50.280 staunch supporter of the war, killed by a car barb 0:09:50.520 --> 0:09:54.000 near Moscow. Global News twenty four hours a day on 0:09:54.120 --> 0:09:58.640 air and on Bloomberg Quick Take, powered by more than journalists, 0:09:58.640 --> 0:10:02.720 an analyists, more than entrees. Michael barn This is Bloomberg, Nathan, Michael, 0:10:02.800 --> 0:10:09.400 Thank you Almost five ten on Wall Street time for 0:10:09.400 --> 0:10:12.680 the Bloomberg Sports updates. Good morning, John stanshown All, Good morning, Nathan. 0:10:12.760 --> 0:10:16.040 Subway series tonight. The Mets won both games last month 0:10:16.080 --> 0:10:18.319 at Citi Field. Now they played two in the Bronx 0:10:18.360 --> 0:10:20.760 and no question who the hotter team is coming in. 0:10:20.840 --> 0:10:23.480 The Yankees did win yesterday. It was just their fifth 0:10:23.520 --> 0:10:25.520 win in the month of Angus. While the Mets, who 0:10:25.559 --> 0:10:28.200 did lose three of four in Atlanta, one three or 0:10:28.200 --> 0:10:31.440 four in Philadelphia and yesterday's win was amazing. They had 0:10:31.480 --> 0:10:34.200 to start a rookie Jose Buddha. He served up two 0:10:34.760 --> 0:10:37.000 three run homers with the Phillies Alec Bone and the 0:10:37.040 --> 0:10:39.800 Mets traield for nothing and later seven to four Mark 0:10:39.920 --> 0:10:43.480 Kenna to the rescue game time, three run omer seventh inning. 0:10:43.520 --> 0:10:45.640 And then Canada came up in the night with the 0:10:45.720 --> 0:10:50.160 Mets trailing by iron. Robertson delivers swinging and Crill left 0:10:50.400 --> 0:10:57.520 Doc don't pay to leave this, and again they take 0:10:57.600 --> 0:11:00.600 the lead. Mark Hanna with his arm, He's going to 0:11:00.679 --> 0:11:04.440 his head between Harston second as he rounds the pass 0:11:05.040 --> 0:11:07.600 to call them AT's one, ten to nine. Yankees been 0:11:07.679 --> 0:11:11.000 while finally beat Toronto at the Stadium four to two 0:11:11.280 --> 0:11:13.840 to avoid a Blue Jay's four games swing. Finally a 0:11:13.880 --> 0:11:16.600 clutch hit. It came from Andrew Benn and Tandy has 0:11:16.600 --> 0:11:19.040 been quiet since his arrival from Kansas City. His first 0:11:19.120 --> 0:11:21.480 Yankee home run game winning two run shot seventh to 0:11:21.559 --> 0:11:24.679 name the win to Lou Trevino. Another recent pickup he 0:11:24.760 --> 0:11:27.880 got the last seven out Subway Series pitching matchups favorite 0:11:27.880 --> 0:11:30.240 the Mets, Max Cheryser Ghost tonight, Mac Jacob to Graham 0:11:30.280 --> 0:11:33.800 Tomorrow it MetLife. The Giants third string quarterback Davis Webb 0:11:33.880 --> 0:11:37.600 rallied Big Blue two preseason win over Cincinnati, Webb through 0:11:37.640 --> 0:11:41.000 to fourth quarter touchdown passes and another game that met 0:11:41.040 --> 0:11:44.040 life Tonight, It's the Jets in the Atlanta Falcons, John 0:11:44.040 --> 0:11:47.720 stash Were Bloomberg Sports Nathan Okay, John Thanks. Futures moving 0:11:47.760 --> 0:11:50.600 lower to start the week. SMP futures down forty eight points, 0:11:50.600 --> 0:11:54.160 STOUT futures down two undred ninety six. Nasdaq futures leading 0:11:54.200 --> 0:11:56.280 the declines this morning, down two undred points. That is 0:11:56.320 --> 0:11:58.760 a drop of one and a half percent. We check 0:11:58.840 --> 0:12:02.520 in live next with recalvasin ahead of US equity strategy 0:12:02.559 --> 0:12:08.439 at RBC Capital. This is Bloomberg Bloomberg eleven three oh weather. 0:12:08.520 --> 0:12:10.520 Lots of cloud, scattered showers and storms today with a 0:12:10.559 --> 0:12:13.360 high in your seventy five degrees. A few more scattered 0:12:13.360 --> 0:12:15.520 showers and storms tomorrow with a high your eighty five, 0:12:16.080 --> 0:12:19.240 sunny near ninety for Wednesday right now seventy three in 0:12:19.280 --> 0:12:25.079 Central Park Markets. Headlines and breaking news twenty four hours 0:12:25.080 --> 0:12:28.200 a day at Bloomberg dot Com, The Bloomberg Business Allan 0:12:28.360 --> 0:12:37.439 at Bloomberg Quick Take. This is a Bloomberg Business flash 0:12:37.920 --> 0:12:40.600 and I'm Karen Moscow. Stops in Europe are treating along 0:12:40.640 --> 0:12:43.439 with US stock index futures is the Federal reserves commitment 0:12:43.480 --> 0:12:46.400 to tighter monetary settings and worries about the effect on 0:12:46.440 --> 0:12:49.840 economic growth way on investor sentiment. We check the markets 0:12:49.840 --> 0:12:53.000 every fifteen minutes throughout the trading day. On bloomberg S 0:12:53.040 --> 0:12:55.600 and P futures down forty eight points down, futures down 0:12:55.640 --> 0:12:59.880 two four, NASTAG futures down one six and the decks 0:13:00.000 --> 0:13:02.160 in Germany is down one point eight percent. The ten 0:13:02.240 --> 0:13:05.040 year treasury that'll change you'ld two point nine seven percent 0:13:05.400 --> 0:13:07.760 yield on the two year three point to eight percent 0:13:08.160 --> 0:13:10.720 nine max Screwed oil is down one point seven percent 0:13:10.760 --> 0:13:13.040 on a dollar fifty six at eighty nine dollars, twenty 0:13:13.040 --> 0:13:15.719 one cents of barrel comics goll down nine tenth per 0:13:15.720 --> 0:13:18.560 cent or sixteen dollars fifty cents at seventeen forty six 0:13:18.600 --> 0:13:21.720 fifty an ounce. The Euro is at one point zero 0:13:21.800 --> 0:13:24.559 zero one zero against the dollar, the N one thirty 0:13:24.640 --> 0:13:27.120 six point eight U and Bitcoin is up a tenth 0:13:27.120 --> 0:13:29.320 of uper It's well, actually it's down down one and 0:13:29.320 --> 0:13:32.240 a half percent at twenty one thousand, one d sixty dollars. 0:13:32.640 --> 0:13:34.679 Game Stop and had Beth and Beyond are leading to 0:13:34.760 --> 0:13:37.000 clines and meme stocks is the latest frenzy and the 0:13:37.080 --> 0:13:40.120 shares loses. Steam, Ben, Beth and Beyond is down nine 0:13:40.160 --> 0:13:42.480 percent this morning. Game Stop is down five and a 0:13:42.520 --> 0:13:46.120 half percent, and AMC Entertainment is falling down thirty five 0:13:46.160 --> 0:13:49.080 p and as a Bloomberg Business Flash, now here's Michael 0:13:49.080 --> 0:13:51.600 Barr with more on what's going on around the world. Minchael, 0:13:51.640 --> 0:13:54.959 good morning, Good morning Karen. The White Owls saying during 0:13:55.040 --> 0:13:58.000 a joint phone call the leaders so the U S, UK, 0:13:58.200 --> 0:14:01.760 France and Germany the Sky how to revive the around 0:14:01.880 --> 0:14:06.319 nuclear deal. Previously, Tehran had curbed its nuclear program in 0:14:06.400 --> 0:14:11.120 exchange for relief from economic sunctions. Ukrainian officials are the 0:14:11.200 --> 0:14:14.400 nine Russian allegations that they were behind the car bomb 0:14:14.440 --> 0:14:18.000 attack that killed the daughter of a prominent Vladimir Putin. Ally. 0:14:18.480 --> 0:14:20.960 In baseball, the Yankees beat the Blue Jays four to 0:14:21.160 --> 0:14:24.080 The Mets beat the Phillies ten nine, The Orioles beat 0:14:24.120 --> 0:14:27.440 the Red Sox five three, The Nationals lost, The A's 0:14:27.480 --> 0:14:31.800 beat the Mariners five three, the Giants one. NFL preseason yesterday, 0:14:31.800 --> 0:14:35.120 the Giants and Ravens won global news twenty four hours 0:14:35.120 --> 0:14:38.320 a day on air and on Bloomberg Quicktake, powered by 0:14:38.360 --> 0:14:41.600 more than hundred journalists and antilists and more than a 0:14:41.680 --> 0:14:46.160 hundred twenty countries. How Michael bar this is Bloomberg. Nathan, Okay, Michael, 0:14:46.200 --> 0:14:48.200 thank you. It is coming up to five twenty on 0:14:48.240 --> 0:14:51.400 Wall Street Live from the Bloomberg Interactive Brokers studios. This 0:14:51.560 --> 0:14:54.400 is Bloomberg Daybreak as we get a new trading week 0:14:54.520 --> 0:14:57.040 started with a focus on the FED. We are joined 0:14:57.040 --> 0:15:00.520 this morning by Lori Calvacina, ahead of US Equity Strategy 0:15:00.560 --> 0:15:03.480 at RBC Capital Markets. LORI great to speak with you 0:15:03.560 --> 0:15:06.640 as always, So we are seeing a pretty strong dip 0:15:06.800 --> 0:15:10.280 in futures contracts. Is this the case of a market 0:15:10.400 --> 0:15:13.200 no longer fighting the Fed? As we get ready for 0:15:13.320 --> 0:15:16.720 Jackson Hole, Well, thanks for having me as always, it's 0:15:16.720 --> 0:15:18.800 always great to be here. Look, as I was talking 0:15:18.840 --> 0:15:21.920 to investors last week, um, I was hearing less about 0:15:21.960 --> 0:15:24.240 the FED, frankly, and I was hearing more about simply 0:15:24.280 --> 0:15:27.240 the state of valuations, with investors telling me they simply thought, 0:15:27.240 --> 0:15:30.720 if you if markets look cheap back in June's that 0:15:30.800 --> 0:15:33.760 they were no longer looking cheap today and really questioning 0:15:33.800 --> 0:15:37.640 whether or not for the uh challenging economic backdrop was 0:15:37.680 --> 0:15:39.840 still baked into share prices at current level. So I 0:15:39.840 --> 0:15:42.440 think the FED is always a source of volatility for markets, 0:15:42.440 --> 0:15:45.280 but I think valuation is really what was concerning investors 0:15:45.280 --> 0:15:47.400 as last week came to an end, Well, where do 0:15:47.480 --> 0:15:51.000 you see valuations at this point? Looking at the SNP 0:15:51.400 --> 0:15:55.600 right now, it's pretty close to your target around right. 0:15:55.600 --> 0:15:58.320 We've gone a little bit above our target recently, and 0:15:58.640 --> 0:16:00.920 you know our view, and remember we are trying to 0:16:00.920 --> 0:16:03.440 guess where the market is going to be on December thirty. First, 0:16:03.440 --> 0:16:05.440 we're not, you know, sort of marking the entry year, 0:16:05.560 --> 0:16:08.040 you know, sort of ups and downs with that number. UM. 0:16:08.040 --> 0:16:10.240 But what we found is that if you look at valuations, 0:16:10.280 --> 0:16:13.600 there's still a tremendous amount of uncertainty around the earnings outlooks. 0:16:13.640 --> 0:16:16.200 That makes it tricky to peg valuations UM. But we 0:16:16.280 --> 0:16:18.680 do think things are getting close to around twenty times 0:16:18.720 --> 0:16:22.000 around nineteen eight, nineteen nine, nineteen point nine, depending on 0:16:22.000 --> 0:16:24.640 whether or not you're looking at our two or three 0:16:24.680 --> 0:16:27.320 EPs forecasts. And while that is rich and that is 0:16:27.360 --> 0:16:29.960 above average and definitely a big, you know, sort of 0:16:29.960 --> 0:16:33.080 move off the recent loath, importantly, it's not back to 0:16:33.120 --> 0:16:35.560 the peaks that we've seen over the last four or 0:16:35.560 --> 0:16:37.280 five years. So I think if you're trying to use 0:16:37.360 --> 0:16:40.080 valuation as a reason to say this value rally has 0:16:40.120 --> 0:16:42.680 to end now, I really don't think that's sufficient evidence. 0:16:42.680 --> 0:16:45.360 The concerning data point. Yes, um, sort of a silver 0:16:45.440 --> 0:16:47.840 bullet for turning more bearish in the short term. Now 0:16:48.120 --> 0:16:50.600 we're getting close to the end of earning season here, 0:16:50.600 --> 0:16:53.240 where do you see earnings going at this point? Our 0:16:53.320 --> 0:16:56.280 revision is going to need to keep being lowered. The 0:16:56.360 --> 0:16:58.400 great question. It was something that was definitely coming up 0:16:58.440 --> 0:17:00.480 a lot in our meetings last week, and we did 0:17:00.520 --> 0:17:02.720 actually over the weekend just go back and do an 0:17:02.720 --> 0:17:05.639 analysis and look at where major bottoms have happened in 0:17:05.680 --> 0:17:08.680 big crises like the tech bubble, they een sell off, 0:17:09.000 --> 0:17:14.040 the pandemic industrial recession, and we actually found that markets 0:17:14.040 --> 0:17:17.560 tend to bottom well before earnings estimates start turning back 0:17:17.640 --> 0:17:20.000 up again. Um. Usually there's the lead time varies, but 0:17:20.119 --> 0:17:22.639 usually by a number of months. So you know, we 0:17:22.720 --> 0:17:25.640 are concerns that earnings expectations will need to come down. 0:17:25.680 --> 0:17:27.800 We are concerned it could be a source of volatility 0:17:27.800 --> 0:17:30.600 for stocks in the months ahead, but we don't think 0:17:30.600 --> 0:17:33.359 it necessarily precludes the idea that we saw the lows 0:17:33.400 --> 0:17:36.439 back in June. Does that have you looking at different 0:17:36.520 --> 0:17:40.720 styles of looking closer to small cap versus large cap? 0:17:41.480 --> 0:17:43.560 You know that actually earning stack DRAFF is one of 0:17:43.560 --> 0:17:45.639 the reasons why we like small over large. We do 0:17:45.680 --> 0:17:48.640 think small caps have really baked in a short, shallow, 0:17:48.680 --> 0:17:52.160 mild recession and perhaps something even more extreme than that. UM. 0:17:52.160 --> 0:17:53.879 But we've also found that if you look at earning 0:17:53.920 --> 0:17:56.359 sentiment recently, we're not getting as big a downgrades in 0:17:56.400 --> 0:17:59.399 the small cap space as we are the large cap space. UM. 0:17:59.440 --> 0:18:02.000 I think that really because small caps didn't enjoy the 0:18:02.000 --> 0:18:04.840 same kind of melt up in expectations for large subsidity 0:18:04.880 --> 0:18:07.439 and this last year early this year, but certainly in 0:18:07.480 --> 0:18:09.160 an indirect way, it is a tail went for small 0:18:09.200 --> 0:18:11.560 caps at the moment. Is that because you're thinking that 0:18:11.600 --> 0:18:15.800 the there's a prospect of an economic slowdown providing more 0:18:15.880 --> 0:18:19.400 of a lift for small caps. What's the impact potentially 0:18:19.520 --> 0:18:24.320 of slow down in the economy on stocks more generally, Well, 0:18:24.359 --> 0:18:25.760 I think that a lot of it is baked in 0:18:25.800 --> 0:18:27.879 at this point in time. I mean, again, assuming that 0:18:27.920 --> 0:18:30.159 it's something that plays out largely this year and is 0:18:30.160 --> 0:18:33.479 of the short, shallow type variety. We've actually compared SMP 0:18:33.480 --> 0:18:36.359 five hundred pricing and RUSTLE two thousand pricing against moves 0:18:36.359 --> 0:18:39.240 and jobless claims, and they're already baking. They actually tend 0:18:39.280 --> 0:18:41.600 to trend together pretty closely on your re year basis, 0:18:41.640 --> 0:18:44.639 and they're already baking in a rather significant spike and 0:18:44.720 --> 0:18:47.360 jobless claims when to go forward basis beyond what we've 0:18:47.400 --> 0:18:50.320 already seen. Um So, what I've been telling investors is, 0:18:50.720 --> 0:18:52.680 if you think this recession is going to happen largely 0:18:52.760 --> 0:18:54.440 next year or the middle of or end this next year, 0:18:54.720 --> 0:18:56.639 that's probably not in the market right now. But if 0:18:56.640 --> 0:18:59.480 we really expect this downturn to play out in coming 0:18:59.560 --> 0:19:02.359 months and quarders, we probably did pay for the price 0:19:02.440 --> 0:19:05.240 for that back in June. Just thirty seconds left here, Lauria, 0:19:05.320 --> 0:19:08.479 what kind of clarity are you expecting clarity from Chairman 0:19:08.480 --> 0:19:10.399 Powell when it comes to rates or the path of 0:19:10.400 --> 0:19:14.240 the economy when he speaks on Friday. Probably not the 0:19:14.320 --> 0:19:16.680 kind of clarity that would allow me to just sort 0:19:16.720 --> 0:19:19.000 of take next week off and really enjoy the end 0:19:19.000 --> 0:19:22.680 of the summer. Um. I think there's always the potential 0:19:22.760 --> 0:19:24.919 for the Fed to add to volatility and stocks. I 0:19:24.960 --> 0:19:27.399 think markets have been trading up on the idea that 0:19:27.440 --> 0:19:29.960 we've seen the peak and inflation and the FED can 0:19:30.000 --> 0:19:33.000 start to ease up or move to the pause. Uh, 0:19:33.040 --> 0:19:35.680 you know, sometime in the force sable future, and when 0:19:35.720 --> 0:19:38.600 that's a consensus argument, that's always sort of room for 0:19:38.680 --> 0:19:40.680 markets to just, you know, kind of move away from 0:19:40.680 --> 0:19:42.720 that view and add from volatility. But we'll see what 0:19:42.760 --> 0:19:45.239 he has to say. And indeed on Friday, coming up 0:19:45.280 --> 0:19:49.480 here Lori Calvasin ahead of US Equity RBC Capital Markets 0:19:49.520 --> 0:19:52.600 always great to get your thoughts. SP futures right now 0:19:52.680 --> 0:19:55.840 down forty eight points. Staff futures down thereunder one Nastack 0:19:55.880 --> 0:19:59.960 future is lower by one hundred ninety nine points your list. 0:20:00.040 --> 0:20:08.400 Think to Bloomberg Daybreak, Good morning, Bloomberg eleven three oh weather. 0:20:08.440 --> 0:20:10.480 Lots of clouds today, scattered showers and storms of the 0:20:10.520 --> 0:20:12.199 high near seventy five, will get up to the mid 0:20:12.280 --> 0:20:15.320 eighties tomorrow, with a few scattered showers and storms possible 0:20:15.560 --> 0:20:17.919 by Wednesday. Sunshine at the high in your ninety right 0:20:17.920 --> 0:20:23.639 now seventy three in Central Park, broadcasting live from the 0:20:23.680 --> 0:20:27.640 Bloomberg Interactive Broker Studio in New York, Bloomberg in Living 0:20:27.720 --> 0:20:32.320 Freedom to Washington, d C. Bloomberg to Boston, Bloomberg one 0:20:32.320 --> 0:20:35.520 O six one to San Francisco, Bloomberg nine sixteen to 0:20:35.560 --> 0:20:38.679 the country, Sirius XM Chad A one nineteen and around 0:20:38.680 --> 0:20:42.600 the globe the Bloomberg Business app in Bloomberg Radio dot Com. 0:20:42.640 --> 0:20:51.640 This is Bloomberg Daybreak. It's five thirty on Wall Street. 0:20:51.640 --> 0:20:54.520 Good morning. I'm Nathan Hagar and I'm Karen Moscow. We 0:20:54.680 --> 0:20:57.320 are just about four hours away from the open of 0:20:57.440 --> 0:20:58.960 U West Trading. Let's get you up to date on 0:20:59.000 --> 0:21:00.960 the news you need to know at this sohour. It's 0:21:00.960 --> 0:21:03.440 all about the FED. This week the annual Jackson Hole 0:21:03.440 --> 0:21:06.840 Symposium against Thursday, and we'll hear from FED share J 0:21:07.040 --> 0:21:10.280 Powell in a speech there on Friday. Bloomberg's Vinnie down 0:21:10.359 --> 0:21:14.040 Judas has a preview the FED chairs battling inflation after 0:21:14.119 --> 0:21:16.600 the central bank fumbled at the onset of the worst 0:21:16.640 --> 0:21:20.680 price surgeon decades bloombrig Economics as Powell attempt to steady 0:21:20.720 --> 0:21:23.960 the message on interest rates and his talk at Jackson 0:21:24.000 --> 0:21:26.760 Hall and dissuade Wall Street that the FED is made 0:21:26.760 --> 0:21:29.760 of devish pivot by signaling the central Bank is far 0:21:29.840 --> 0:21:32.840 from done in this year's tightening campaign. So far, the 0:21:32.840 --> 0:21:35.439 Fed is lifted its benchmark rate from near zero to 0:21:35.480 --> 0:21:38.840 two point five percent. Bene dryl Judais Bloomberg day Break. 0:21:38.960 --> 0:21:41.200