WEBVTT - Bloomberg Daybreak: August 4, 2022 - Hour 1 (Radio) 0:00:01.600 --> 0:00:04.880 Like from the Bloomberg Interactive Brooker Studios. This is Bloomberg 0:00:05.000 --> 0:00:08.400 Daybreak for Thursday, August Sports twenty two. Coming up. The 0:00:08.400 --> 0:00:11.160 shower Scott centered the day near a two month high. 0:00:11.200 --> 0:00:13.520 The Bank of England forecast to raise rates by the 0:00:13.560 --> 0:00:15.760 most in more than a quarter of a century. The 0:00:15.880 --> 0:00:19.600 Senate overwhelmingly approach the addition of Finland and Sweden to NATO. 0:00:19.840 --> 0:00:23.239 Tesla holds a key shareholder meeting, and Walmart is the 0:00:23.320 --> 0:00:26.759 latest company to cut jobs. New York Mayor Adams freeze 0:00:26.800 --> 0:00:29.920 up a hundred million dollars for city schools. Plus, the 0:00:30.000 --> 0:00:33.920 jury is deliberating the Alex Jones defamation case. I'm Michael Bloomberg, 0:00:34.000 --> 0:00:36.840 bore ahead, I'm down stair Showard Sports Garrett Cole roughed 0:00:36.880 --> 0:00:39.440 up with the Yankee lost the Seattle the Mets one easily. 0:00:39.479 --> 0:00:44.680 They start a big series with it went tonight. That's 0:00:44.680 --> 0:00:48.720 All's tradinghead on Bloomberg Daybreak on Bloomberg eleven, free on 0:00:48.800 --> 0:00:52.960 New York Bloomberg nineteen nine one, Washington, d C. Bloomberg 0:00:52.960 --> 0:00:56.680 one oh six one, Boston Bloomberg nine sixties and Francisco 0:00:57.160 --> 0:01:00.840 Sirius Exam one nineteen and around the world on Bloomberg 0:01:00.920 --> 0:01:07.960 Radio dot com and via the Bloomberg Business app. Good morning, 0:01:07.959 --> 0:01:10.920 I'm Nathan Hagar and I'm Karen. Moscow and US Dock 0:01:11.000 --> 0:01:14.040 index futures are lower this morning work coming up to 0:01:14.080 --> 0:01:15.640 five o one on Wall Street, and we checked the 0:01:15.640 --> 0:01:18.760 markets every fifteen minutes throughout the trading day on Bloomberg 0:01:18.880 --> 0:01:21.920 S and P futures down four points down, futures down 0:01:21.959 --> 0:01:25.200 twenty three and nasday futures down sixteen. The decks in 0:01:25.240 --> 0:01:28.320 Germany's up three quarters of a percent, ten year treasury 0:01:28.360 --> 0:01:31.280 down eight thirty seconds on two point seven three percent, 0:01:31.319 --> 0:01:33.640 and they yield on the two year three point one 0:01:33.720 --> 0:01:37.279 zero percent. Nathan Karen, The SMP five hundred enters today's 0:01:37.280 --> 0:01:40.440 session near a two month high. The tech heavy Nasdaq 0:01:40.560 --> 0:01:43.560 one hundred indexes at its highest level since early May. 0:01:43.959 --> 0:01:47.480 Corporate earnings and healthy economic data are helping to lift sentiment, 0:01:47.520 --> 0:01:49.960 and we get more from Northern Trust Bank Chief investment 0:01:50.000 --> 0:01:54.120 Officer Katie Nixon. I think we came into this really 0:01:54.120 --> 0:01:58.160 with with such low sentiment, with such a negative positioning, 0:01:58.200 --> 0:02:00.280 that we were due for a nice bounce like seen 0:02:00.400 --> 0:02:02.520 last week and sorted into this week. But is it 0:02:02.640 --> 0:02:05.480 sustainable in the phase of a FED that appears to 0:02:05.480 --> 0:02:08.840 be hell bent on not stopping not stopping. Katie Nixon, 0:02:08.840 --> 0:02:10.880 a Northern Trust says the FED may have to reverse 0:02:10.960 --> 0:02:14.800 course sooner than expected. She says inflation is slowing meantime, 0:02:14.880 --> 0:02:18.600 Nathan the FED continues to talk tough on inflation. Minneapolis 0:02:18.600 --> 0:02:21.600 Fed president Neil cash Carry is the latest to say 0:02:21.760 --> 0:02:25.799 it's the top priority. We are laser focused on getting 0:02:25.800 --> 0:02:29.680 inflation down and um, you know, whether we are technically 0:02:29.680 --> 0:02:32.440 in a recession right now or not, it doesn't change 0:02:32.440 --> 0:02:35.280 my analysis and focused on inflation and where inflation is 0:02:35.360 --> 0:02:37.800 likely going and that is going to be. That to 0:02:37.880 --> 0:02:39.640 me is what we have. My opinion is what we 0:02:39.680 --> 0:02:42.480 have to focus on right now. Neil cash Carry says 0:02:42.520 --> 0:02:45.519 a FED rate cut next year is quote a very 0:02:45.639 --> 0:02:49.680 unlikely scenario. The monetary policy is also in focus overseas 0:02:49.760 --> 0:02:51.920 Karen as the Bank of England gets set to hike 0:02:51.960 --> 0:02:54.160 interest rates a few hours from now. We get a 0:02:54.200 --> 0:02:57.720 preview from Bloomberg's Lizzie Burden in London. I'm England rate 0:02:57.840 --> 0:03:00.960 rise today is all but a dune deal. The debate 0:03:01.040 --> 0:03:04.839 surrounds whether the UK Central Bank will is Bloomberg Economics 0:03:04.840 --> 0:03:07.680 expects hike by a half point for the first time 0:03:07.720 --> 0:03:11.600 in its independent history. The decision comes against the backdrop 0:03:11.639 --> 0:03:14.639 of inflation that's not only it's a new forty year high, 0:03:15.040 --> 0:03:18.480 but headed toward double digits in the fall. Officials are 0:03:18.520 --> 0:03:22.760 also expected to provide more detail on active quantitative tightening. 0:03:23.280 --> 0:03:26.720 In London, I'm Lizzie Burden Bloomberg Daybreak, Lizzie, thank you. 0:03:26.800 --> 0:03:29.920 Turning to politics. Now, Finland and Sweden are getting a 0:03:29.960 --> 0:03:32.600 boost in their bid to join NATO. The US Senate 0:03:32.639 --> 0:03:35.960 has now ratified their membership and the Alliance. Bloomberg's and 0:03:36.120 --> 0:03:39.400 Bachelor has the story. The intention is to bolster NATO 0:03:39.480 --> 0:03:42.840 after the Russian invasion of Ukraine. The vote pretty amazing 0:03:42.880 --> 0:03:44.680 in a body that hasn't been able to agree on 0:03:44.800 --> 0:03:49.200 much of anything. The vote to one far exceeding the 0:03:49.240 --> 0:03:54.080 two thirds majority required. Now Finland will join Estonia, Latvia, 0:03:54.200 --> 0:03:57.320 Lithuania in Poland, as NATO country is a share a 0:03:57.400 --> 0:04:00.480 land border with Russia. Turkey has been on and off 0:04:00.520 --> 0:04:04.000 about the idea and could still try to block the move. 0:04:04.440 --> 0:04:09.080 Majority leader Chuck Schumer says Putin has strengthened NATO. In 0:04:09.200 --> 0:04:11.960 San Francisco, I'm at Baxter Bloomberg Daybreak, All right, and 0:04:12.120 --> 0:04:14.680 thank you. Let's starn to corporate news now, where Tesla 0:04:14.800 --> 0:04:18.000 is in focus. The electric carmaker holds it's highly anticipated 0:04:18.040 --> 0:04:21.720 shareholder meeting today. We get a preview from Bloomberg's Tom Busby. 0:04:21.800 --> 0:04:25.760 The automaker calls its annual shareholders meeting a cyber roundup, 0:04:25.760 --> 0:04:28.320 and this year, the biggest item on the roundup agenda 0:04:28.440 --> 0:04:31.440 is the proposed three for one stock split, which would 0:04:31.440 --> 0:04:33.599 be the second one in as many years for Tesla, 0:04:33.720 --> 0:04:36.800 after a five for one split in August of twenty Now, 0:04:36.800 --> 0:04:38.919 the idea is to make shares, which will begin the 0:04:38.960 --> 0:04:42.000 trading day just about nine hundred twenty two dollars apiece, 0:04:42.480 --> 0:04:47.440 more affordable to small dollar retail investors and retail options traders, 0:04:47.640 --> 0:04:52.600 not just institutional investors. Tom Busby, Bloomberg Daybreak, All right, Tom, 0:04:52.600 --> 0:04:55.000 thank you well. Elsewhere on Wall Street, the wave of 0:04:55.040 --> 0:04:58.880 corporate downsizing continues. There's where now that Walmart is cutting 0:04:58.880 --> 0:05:01.120 about two d corp are jobs, and we get the 0:05:01.160 --> 0:05:05.159 details from Bloomberg Charlie Pellett. The retail giant is contending 0:05:05.160 --> 0:05:08.840 with rising costs, blow to inventories, and weakening demand for 0:05:08.920 --> 0:05:12.359 general merchandise. Sources say the company will also be adding 0:05:12.360 --> 0:05:15.880 an unspecified number of jobs in areas such as e commerce, 0:05:16.160 --> 0:05:20.000 health and wellness, supply chain, and ad sales. Walmart is 0:05:20.120 --> 0:05:23.280 tightening its spelt a week after slashing its annual profit 0:05:23.360 --> 0:05:26.679 forecast for the second time in less than three months. 0:05:26.960 --> 0:05:30.839 American consumers are buying less clothing and durable goods as 0:05:30.880 --> 0:05:34.800 soaring inflation raises the cost of food and basic items. 0:05:35.320 --> 0:05:38.480 In New York. Charlie Pellet Bloomberg debreak, all right, Charlie, 0:05:38.480 --> 0:05:41.000 thank you. Coming out today. The earnings parade continues, with 0:05:41.120 --> 0:05:44.560 fifty companies reporting. Among them is Lift, which comes on 0:05:44.640 --> 0:05:47.039 the heels of Uber. Is better than expected results, but 0:05:47.160 --> 0:05:52.680 Lift is not Uber. Bloomberg's Jeff Palinger explains Lift executives 0:05:52.720 --> 0:05:56.440 may lower the company's full year guidance during their conference call. 0:05:56.800 --> 0:06:01.360 Bloomberg Intelligence as censored tower data indicates competition with Uber 0:06:01.400 --> 0:06:05.120 has been fierce. Downloads of the Lift app decline year 0:06:05.200 --> 0:06:07.880 over year, and the increase in the number of monthly 0:06:07.920 --> 0:06:12.200 active users paled in comparison with Uber. The I speculates 0:06:12.279 --> 0:06:15.720 Lift may seek partnership similar to Amazon grub Hub to 0:06:15.839 --> 0:06:20.640 increase trip frequency. Jeff Bullinger, Bloomberg Daybreak. Thanks Jeff. We 0:06:20.720 --> 0:06:23.719 are seeing some stocks on the move this morning following earnings. 0:06:23.760 --> 0:06:26.279 We get the latest live at the Bloomberg's John Tucker, 0:06:26.440 --> 0:06:29.560 John Gole morning and Tarran earnings guidance from Chlorox fell 0:06:29.640 --> 0:06:32.800 well short of analyst estimates. Shares it down six percent 0:06:32.880 --> 0:06:36.200 pre market if the company gave weaker than expected guidance 0:06:36.200 --> 0:06:39.760 for fiscal year three. The shares are the mobile games 0:06:39.760 --> 0:06:43.000 company Skills tumbling of the pre market. There down twelve percent. 0:06:43.400 --> 0:06:46.240 They cut their full year guidance for revenue as shares 0:06:46.400 --> 0:06:50.520 of Lucid sinking thirteen percent after the luxury electric vehicle 0:06:50.560 --> 0:06:54.320 startup cut in half this year's production target. Luccent Enhances 0:06:54.360 --> 0:06:58.280 been dealing with supply chain snags and resulting production hiccups. 0:06:58.520 --> 0:07:01.880 Live in New York. I'm John Tucker, Bloomberg Daybreak. All right, John, 0:07:01.880 --> 0:07:05.080 thank you. SMP futures down four points down, futures down 0:07:05.080 --> 0:07:08.120 twenty seven. Nasdack futures are lower by seventeen points. The 0:07:08.160 --> 0:07:11.320 tenure treasury is down eight thirty seconds, the yield two 0:07:11.360 --> 0:07:14.600 point seven three per cent. Straight ahead, we have your 0:07:14.680 --> 0:07:18.040 latest local headlines and a check of sports You're listening 0:07:18.120 --> 0:07:24.840 to Bloomberg Daybreak at five oh seven on Wall Street 0:07:24.880 --> 0:07:27.320 where seventy seven degrees in Central Park. We've got an 0:07:27.320 --> 0:07:30.520 accident investigation closing the main road to the g WB 0:07:30.680 --> 0:07:33.800 and Fort Lee. Details coming up in traffic. First Michael 0:07:33.800 --> 0:07:35.600 Barr with what else is going on in New York 0:07:35.640 --> 0:07:39.520 and around the world, including rising tensions in the Asia Pacific. Michael, 0:07:39.760 --> 0:07:43.040 that is correct, Nathan. China says it has conducted precision 0:07:43.160 --> 0:07:46.600 missile strikes and the Taiwan Straight as part of military 0:07:46.640 --> 0:07:50.320 exercises in six zones arounding the island. The drills were 0:07:50.320 --> 0:07:53.000 prompted by a visit to the island by outspeaker Nancy 0:07:53.000 --> 0:07:56.880 Pelosi this week. China earlier this week warned airlines to 0:07:57.040 --> 0:08:00.680 avoid danger zones around Taiwan. It is going to be 0:08:00.760 --> 0:08:03.480 a hot one in the New York area. Bloomberg meteorologious 0:08:03.520 --> 0:08:06.720 Rob Caroline has the latest. Good morning, Michael. The Bermuda 0:08:06.760 --> 0:08:08.480 High is going to set the Tri state area up 0:08:08.480 --> 0:08:10.520 for some warm weather over the course of the next 0:08:10.520 --> 0:08:12.480 several days. In fact, that it's looking like the first 0:08:12.520 --> 0:08:15.000 half of August is going to be on the warm side. Today, 0:08:15.040 --> 0:08:17.200 the city and the surrounding area is close to ninety, 0:08:17.400 --> 0:08:19.360 but it feels more like a hundred with the humanity 0:08:19.360 --> 0:08:21.560 and that's why that heat advisories and effect when the 0:08:21.640 --> 0:08:25.600 nineties again tomorrow close to nighties, Saturday and Sunday, Michael Thanks. 0:08:25.720 --> 0:08:29.040 New York City Mayor Eric Adams pushed back against criticism 0:08:29.080 --> 0:08:32.720 that is continual focus on crime at press conferences is 0:08:32.800 --> 0:08:36.400 feeding into an overblown narrative that the city is unsafe. 0:08:36.920 --> 0:08:40.160 Incidents of violent crime remain at historic lows in the city, 0:08:40.200 --> 0:08:43.120 but seventy percent of New Yorkers said crime was a 0:08:43.240 --> 0:08:47.040 very serious problem in a February poll. Adam spoke at 0:08:47.040 --> 0:08:50.600 his news conference yesterday, the numbers continue to trend in 0:08:50.640 --> 0:08:55.600 the wrong direction, continue to show that these repeated offenders 0:08:55.720 --> 0:08:59.760 are coming out. It would be irresponsible of me to 0:09:00.040 --> 0:09:03.320 ignore what is happening right now on our streets every day, 0:09:03.480 --> 0:09:10.040 every day was seeing this dangerous people repeatedly committed these actions. Meanwhile, 0:09:10.120 --> 0:09:12.840 Mayor Adams is freeing up one hundred million dollars in 0:09:12.920 --> 0:09:16.520 federal stimulus money for New York City schools. It comes 0:09:16.559 --> 0:09:19.680 after an outcry among parents and some educators over the 0:09:19.679 --> 0:09:22.520 city's plan to cut hundreds of millions of dollars in 0:09:22.600 --> 0:09:26.600 funding for city schools in the current fiscal year. Conspiracy 0:09:26.760 --> 0:09:30.960 theorists Alex Jones says he was irresponsible to declare the 0:09:31.000 --> 0:09:35.520 Sandy Hook Elementary School massacre of hoax d cent real 0:09:35.840 --> 0:09:40.640 as a se regular shame as I said, it's real. 0:09:41.320 --> 0:09:44.240 The jury and Austin, Texas began deliberating on how much 0:09:44.280 --> 0:09:46.679 the Info Wars host owes the parents of one of 0:09:46.720 --> 0:09:49.600 the children who were killed in the twenty twelve attack 0:09:49.640 --> 0:09:53.080 in Newtown, Connecticut. Testimony wrapped up after a bombshell from 0:09:53.080 --> 0:09:57.079 the plaintiffs lawyer revealed that Jones's lawyers mistakenly handed over 0:09:57.120 --> 0:10:00.640 two years of tax messages from Jones's phone. Names twenty 0:10:00.679 --> 0:10:03.000 four hours a day on air and on Bloomberg Quickdake 0:10:03.000 --> 0:10:05.600 powered by more than twenty seven hundred journalists, analysts more 0:10:05.640 --> 0:10:07.520 than a hundred twenty countries, and Michael bar this is 0:10:07.559 --> 0:10:14.600 Bloomberg Naked. Thank you, Michael. Almost five ten on Wall 0:10:14.600 --> 0:10:17.079 Street time for the Bloomberg Sports Up taken morning, John Stenshower, 0:10:17.120 --> 0:10:19.280 all right, good morning. Nathan and Mets added some players 0:10:19.280 --> 0:10:22.000 before the trade deadline, maybe not big names, although their 0:10:22.080 --> 0:10:24.640 new left handed hitting d h is a big guy. 0:10:24.720 --> 0:10:28.720 Daniel boga Back generously listed at two hundred and seventy pounds. 0:10:28.720 --> 0:10:30.480 He came up in the fifth in eat in Washington 0:10:30.760 --> 0:10:33.040 two on the way from Williams and vocal Back gets 0:10:33.080 --> 0:10:34.800 one of the area along the right field line back 0:10:34.840 --> 0:10:37.840 toward the corner, but that goes Polaso side and it's 0:10:37.880 --> 0:10:42.360 out of here. A cran swam for Daniel foco Back 0:10:43.120 --> 0:10:46.400 his first home runs a man at his scores four 0:10:47.200 --> 0:10:49.160 at the s n Y Collum that's took a nine 0:10:49.240 --> 0:10:51.120 nothing lead of the ninth and anyother New metas well 0:10:51.160 --> 0:10:53.480 Leaver and Michael Gibbons. He made his Mets debut. It 0:10:53.559 --> 0:10:55.840 did not go well. He got just two outs, gave 0:10:55.920 --> 0:10:58.520 up five runs. Mets beat the Nationals nine to five. 0:10:58.559 --> 0:11:00.760 They've won eight of the last nine at at the lost, 0:11:01.240 --> 0:11:04.400 which means the Big Mets Braves. Five game series that 0:11:04.480 --> 0:11:06.800 against to Nighted City Field starts with the Mets three 0:11:06.840 --> 0:11:09.120 and a half games ahead. Stadium Seattle beat the Yankees 0:11:09.160 --> 0:11:11.400 seven to three. Did almost all the damage top of 0:11:11.440 --> 0:11:14.520 the first getting six runs on three Mariners home runs 0:11:14.520 --> 0:11:17.319 off Garret Cole. Second time this season he has served 0:11:17.400 --> 0:11:19.880 up three homers in the first of Seattle, just the 0:11:19.920 --> 0:11:22.560 fourth opposing team to win a series in the box 0:11:22.600 --> 0:11:25.400 and what could hardly be called a surprise. The NFL 0:11:25.440 --> 0:11:28.560 will appeal the ruling on that Shaun Watson suspension for 0:11:28.640 --> 0:11:31.600 sexual misconduct. The independent arbitrator called for it to be 0:11:31.679 --> 0:11:34.719 six games, but the appeal process has agreed to by 0:11:34.720 --> 0:11:37.080 both sides, and the labor deal calls for the Commissioner, 0:11:37.360 --> 0:11:39.680 or at least someone designated by Roger Goodell, to be 0:11:39.720 --> 0:11:41.680 the one to rule on the appeals of the NFL 0:11:41.920 --> 0:11:44.400 appealing to themselves. They would then be allowed to make 0:11:44.400 --> 0:11:48.320 the suspension longer. Players Association may then follow with a lawsuit. 0:11:48.559 --> 0:11:51.680 John Stash that were Bloomberg Sports, Nathan thanks John SMP 0:11:51.800 --> 0:11:54.440 futures down down three points, Sound futures down twenty seven 0:11:54.520 --> 0:11:57.760 nastack futures lower by twelve points. The tenure treasury is 0:11:57.800 --> 0:12:01.360 down eight thirty seconds yield two point seven three per cent. 0:12:02.040 --> 0:12:09.319 This is Bloomberg Bloomberg eleven three. All weather will be 0:12:09.400 --> 0:12:11.880 under a heat advisory later this morning until eight o'clock 0:12:11.920 --> 0:12:16.320 tomorrow night. His your today and tomorrow uper eighties chants 0:12:16.360 --> 0:12:19.240 for showers and storms by Saturday. Right now seventy eight 0:12:19.280 --> 0:12:24.640 in Central part markets, headlines and breaking news twenty four 0:12:24.679 --> 0:12:27.720 hours a day at Bloomberg dot Com, The Bloomberg Business 0:12:27.720 --> 0:12:37.320 at and at Bloomberg Quicktake. This is a Bloomberg Business lash, 0:12:37.880 --> 0:12:41.360 but I'm kerin Moscow. Stocks holding modest gains as investors 0:12:41.360 --> 0:12:44.080 assess the corporate profit al look, while wagers on further 0:12:44.200 --> 0:12:48.440 Federal reserve interest rate hikes lifts Treasury yields. US stock 0:12:48.520 --> 0:12:51.720 index futures are a little changed after stocks yesterday snapped 0:12:51.760 --> 0:12:54.120 two day to clawin. We checked the markets every fifteen 0:12:54.160 --> 0:12:57.320 minutes throughout the trading day on Bloomberg. Right now, SNP 0:12:57.440 --> 0:12:59.840 futures as well as NASDAC and Dow futures are all 0:12:59.880 --> 0:13:02.480 that will change. The decks in Germany is U three 0:13:02.559 --> 0:13:04.880 quarters of a percent, the ten year treasury down six 0:13:04.920 --> 0:13:08.199 thirty seconds, YELD two point seven two percent, the yield 0:13:08.200 --> 0:13:11.280 on the two year three point oh nine percent. NIMEX 0:13:11.280 --> 0:13:13.439 scrude oil is down to tens of upper cent or 0:13:13.480 --> 0:13:16.200 fifteen cents and ninety dollars fifty one cents of barrel 0:13:16.480 --> 0:13:19.720 comex gold of one percent or seventeen dollar seventy cents 0:13:19.720 --> 0:13:24.080 is seventeen ten an ounce. The Euro one seven against 0:13:24.080 --> 0:13:26.559 the dollar, British pound one point to one six seven 0:13:26.800 --> 0:13:29.320 and the yen one thirty four point three three and 0:13:29.400 --> 0:13:32.800 looking at Bitcoin down two percent at twenty two eight 0:13:32.840 --> 0:13:36.160 hundred fifty dollars. That's a Bloomberg business flash. Now here's 0:13:36.200 --> 0:13:39.360 Michael Barr with more on what's going on around the world. Michael, 0:13:39.360 --> 0:13:42.320 good morning, Good morning. Here in China is staging live 0:13:42.480 --> 0:13:46.880 fire military drills and six self declared zones around in Taiwan, 0:13:47.320 --> 0:13:49.480 and is in response to a visit by US how 0:13:49.520 --> 0:13:53.040 Speaker Nancy Pelosi to the island Beijing claims as its 0:13:53.080 --> 0:13:57.160 own territory. The Senate ratified adding Sweden and Finland to 0:13:57.640 --> 0:14:01.320 NATO move and tended to bolster the military alliance after 0:14:01.360 --> 0:14:04.719 Russia's invasion of Ukraine. Closing arguments in w n B, 0:14:04.840 --> 0:14:08.080 a star Britney Grinder's cannabis possession case in Russia are 0:14:08.160 --> 0:14:11.440 set for today. In baseball, the Mariners beat the Yankees 0:14:11.520 --> 0:14:14.960 seven three, the Mets beat the Nationals nine five, the 0:14:15.000 --> 0:14:19.200 Red Sox and Giants lost the Orioles, and A's one 0:14:19.560 --> 0:14:22.160 Global Needs twenty four hours a day on air and 0:14:22.360 --> 0:14:25.840 on Bloomberg Quicktake, powered by more than twenty seven hundred 0:14:25.920 --> 0:14:29.040 journalists and analysts in more than one twenty countries. Sow 0:14:29.080 --> 0:14:32.120 Michael Barr and this is Bloomberg Navan. Alright, Michael, thank you. 0:14:32.160 --> 0:14:34.120 It is five nineteen on Wall Street live from the 0:14:34.120 --> 0:14:38.560 Bloomberg Interactive Broker Studios. This is Bloomberg Daybreak, and five 0:14:38.680 --> 0:14:42.280 nineteen means we are about one hour and forty one 0:14:42.320 --> 0:14:45.840 minutes away from a policy decision from the Bank of England. 0:14:46.080 --> 0:14:48.520 In just that stretch of time, we find out if 0:14:48.560 --> 0:14:51.440 the bo E joins the long list of countries fighting 0:14:51.480 --> 0:14:54.440 inflation with more aggressive interest rate hikes. Ahead of that, 0:14:54.480 --> 0:14:58.960 we're joined by Dan Hansen, senior UK economist at Bloomberg Economics. 0:14:59.160 --> 0:15:02.040 Dan good Morn think the consensus is that the BOE 0:15:02.320 --> 0:15:06.040 will go ahead with a fifty basis point hike. But 0:15:06.360 --> 0:15:10.400 after the last several months of smaller increases, what are 0:15:10.440 --> 0:15:14.280 the chances we get another downside surprise? Oh, good morning. 0:15:15.080 --> 0:15:16.800 So I think I think the chance of a downside 0:15:16.840 --> 0:15:20.440 surprise quite low. Actually, I think I think that the 0:15:20.480 --> 0:15:22.720 bank has set itself up self up for this for 0:15:22.760 --> 0:15:24.840 this big move. If you remember, back in the middle 0:15:24.840 --> 0:15:28.760 of July, Andrew Bailey in his mention how speech put 0:15:28.760 --> 0:15:31.840 a fifty basis point point hike firmly on the table, 0:15:32.520 --> 0:15:36.120 and I think they're going to follow through today. What's 0:15:36.120 --> 0:15:40.720 the risk that fifty basis point hike brings the UK 0:15:41.280 --> 0:15:44.040 closer to a recession or is the UK in a 0:15:44.080 --> 0:15:47.160 recession already. That's a really good question. I mean, I 0:15:47.200 --> 0:15:49.240 think the big thing in the UK at the moment 0:15:49.320 --> 0:15:52.240 is this cost of living squeeze. So we've got sky 0:15:52.320 --> 0:15:55.760 high inflation and incomes just aren't keeping keeping up. And 0:15:55.800 --> 0:15:58.640 I think what the Bank's doing, it's it's doing its 0:15:58.640 --> 0:16:01.840 best to keep inflation at expectations in check um, and 0:16:01.880 --> 0:16:04.640 that's why we're seeing these this move towards a faster 0:16:04.760 --> 0:16:07.960 pace of rate hikes. I mean, answer to your question directly, 0:16:08.160 --> 0:16:11.280 I don't think we're in recession just yet, um, but 0:16:11.360 --> 0:16:13.520 there is a significant risk of it, particularly around the 0:16:13.520 --> 0:16:15.320 turn of the year. And actually that will be one 0:16:15.320 --> 0:16:17.160 of the things we'll be watching for the bank. From 0:16:17.160 --> 0:16:19.880 the Bank today, I should say they're they're gonna be 0:16:19.920 --> 0:16:23.320 putting out new forecasts and it's it's possible a forecast 0:16:23.400 --> 0:16:25.840 or recession in the near term. Yeah. There's a debate 0:16:25.880 --> 0:16:29.760 here in this country, of course, about whether inflation expectations 0:16:29.800 --> 0:16:35.360 are moving toward a situation where we're seeing less less 0:16:35.400 --> 0:16:39.240 inflation now that federal reserve policy is starting to have 0:16:39.320 --> 0:16:42.040 an impact. Is the situation a little different in the 0:16:42.160 --> 0:16:46.320 UK now? Is inflation getting more entrenched? Yeah, So there's 0:16:46.360 --> 0:16:50.000 been a few surveys recently that suggested the expectations have 0:16:50.080 --> 0:16:52.240 drifted higher. I mean, one thing about the UK as 0:16:52.240 --> 0:16:54.360 well is that we're likely to get a peak of 0:16:54.640 --> 0:16:56.520 Our peak for inflation is likely to come a little 0:16:56.520 --> 0:16:59.040 bit later, and that's to do with the way energy 0:16:59.080 --> 0:17:01.280 prices are set. So we're we're likely to see our 0:17:01.320 --> 0:17:04.360 peak for inflation in towards the end of this year, 0:17:04.400 --> 0:17:07.720 probably in October, and it will be likely in double 0:17:07.800 --> 0:17:11.440 digits as well, so probably around twelve so probably a 0:17:11.520 --> 0:17:14.359 higher peak than the US as well. So that's one 0:17:14.440 --> 0:17:16.040 reason to think that the Bank of England's going to 0:17:16.160 --> 0:17:18.879 keep its foot on the break and continue tightening just 0:17:19.040 --> 0:17:22.600 until it sees sees through the peak and sees sort 0:17:22.600 --> 0:17:25.280 of strong evidence that inflation is coming back down, which 0:17:25.320 --> 0:17:27.480 is only really likely to happen sort of in the 0:17:27.480 --> 0:17:30.199 middle of next year, given that you're expecting that we 0:17:30.280 --> 0:17:33.200 could see a forecast for recession from the b o 0:17:33.320 --> 0:17:37.520 E later this morning. How has the bank's outlook panned 0:17:37.520 --> 0:17:40.639 out in the past. I mean, there is some concern 0:17:40.760 --> 0:17:43.439 that the b o E has been behind the curve 0:17:43.520 --> 0:17:47.840 when it comes to tackling this cut stuff having crisis. Now, yeah, 0:17:47.840 --> 0:17:49.600 that is true. That is something that has been leveled 0:17:49.600 --> 0:17:50.800 at the bank. I mean, one thing I'd say in 0:17:50.800 --> 0:17:52.919 their defense is that they started tightening earlier than other 0:17:52.960 --> 0:17:56.480 advanced economy central banks, so they do have that in 0:17:56.520 --> 0:17:59.679 their favor. And I also think that neutral rate in 0:17:59.680 --> 0:18:02.120 the the UK, so the rate that sort of neither 0:18:02.119 --> 0:18:04.200 speeds up nor slows down the economy is a little 0:18:04.200 --> 0:18:06.800 bit lower as well, so they've probably they're probably closer 0:18:06.840 --> 0:18:09.240 to that level than certainly the e c B is 0:18:09.440 --> 0:18:11.400 um and we know the Fed is sort of thinks 0:18:11.440 --> 0:18:14.879 it's around that level now um. But I think certainly 0:18:14.920 --> 0:18:19.520 on the forecast they've been hugely surprised when inflation um 0:18:19.600 --> 0:18:22.840 and they've if you look back sort of even a 0:18:22.920 --> 0:18:24.760 year ago, they were thinking the peak for inflation was 0:18:24.800 --> 0:18:26.680 going to be around four percent, and I think today 0:18:26.680 --> 0:18:29.040 they'll probably say it's somewhere close to twelve percent. So 0:18:29.080 --> 0:18:32.359 that's that's a pretty big forecast there, along with the 0:18:32.480 --> 0:18:35.680 rate high decision. We're also expecting to get a little 0:18:35.720 --> 0:18:38.720 bit more clarity on what the bo he is going 0:18:38.800 --> 0:18:41.040 to do about its balance sheet in our last minute 0:18:41.040 --> 0:18:44.679 here Dan, what are the expectations there? So what the 0:18:44.680 --> 0:18:46.760 bank has done is it it's it's sort of taking 0:18:46.760 --> 0:18:49.000 a two step process. So the first thing it did 0:18:49.000 --> 0:18:54.640 in February was end reinvestment of government bonds, so when 0:18:54.760 --> 0:18:58.520 when the guilts redeem, they don't reinvest those proceeds. And 0:18:58.560 --> 0:19:01.280 they've been they've been doing that since February. Well, they're 0:19:01.280 --> 0:19:04.000 gonna start doing now or I should say, set out 0:19:04.080 --> 0:19:08.760 more detail on how they will go about active sales 0:19:09.560 --> 0:19:12.520 um and we'll be looking for that today. I mean, 0:19:12.560 --> 0:19:13.879 as I say it will be it will be more 0:19:13.880 --> 0:19:17.320 around the detail. It won't be around um. They won't 0:19:17.320 --> 0:19:19.479 have any sort of votes on it, and that's going 0:19:19.520 --> 0:19:22.440 to come probably in September, possibly a little bit later. 0:19:22.560 --> 0:19:24.960 But we'll just be looking for looking for the pace 0:19:25.040 --> 0:19:27.760 and how quickly they they're going to reduce their balance sheet. 0:19:28.160 --> 0:19:30.440 Andrew Baby sort of set expectations that they think it 0:19:30.440 --> 0:19:32.960 will be somewhere between fifty and a hundred billion pounds 0:19:33.000 --> 0:19:36.119 in terms of the reduction, the annual reduction in the 0:19:36.119 --> 0:19:40.040 balance sheet in the first year of QTI. Thanks for this, Dan, 0:19:40.160 --> 0:19:41.760 good having you on where it's ahead of the b 0:19:41.840 --> 0:19:45.119 o E decision. Dan Hanson is senior UK economists for 0:19:45.240 --> 0:19:49.440 Bloomberg Economics. Right now, SMP futures are a little changed, 0:19:49.520 --> 0:19:52.080 so are down futures. They're down two points DANCED futures 0:19:52.119 --> 0:19:56.000 down one point turn. Your treasury is down seven thirty seconds. 0:19:56.040 --> 0:19:58.320 The yield two point seven three percent. The yield on 0:19:58.440 --> 0:20:02.359 the two year three point one zero percent. This is 0:20:02.359 --> 0:20:09.680 Bloomberg Bloomber eleven three oh weather. Lots of sunshine, hot 0:20:09.800 --> 0:20:12.040 humid today going up to your ninety five degrees will 0:20:12.040 --> 0:20:16.719 be underheat advisory till eight pm tomorrow, low nineties tomorrow 0:20:16.800 --> 0:20:19.920 upr eighties Saturday. Right now seventy seven in Central Park, 0:20:22.160 --> 0:20:26.680 broadcasting live from the Bloomberg Interactive Broker Studio in New York, 0:20:26.800 --> 0:20:30.280 Bloomberg E Living Freedom to Washington, d C, Bloomberg ninety 0:20:30.320 --> 0:20:33.280 nine one to Boston, Bloomberg one O six one to 0:20:33.320 --> 0:20:37.080 San Francisco, Bloomberg nine six to the country, Sirius xm 0:20:37.119 --> 0:20:40.800 che and around the globe the Bloomberg Business at and 0:20:40.880 --> 0:20:50.640 Bloomberg Radio dot com. Or this is Bloomberg Daybreak. It's 0:20:50.680 --> 0:20:52.879 five thirty on Wall Street. Good morning. I'm Nathan Hager 0:20:53.400 --> 0:20:56.159 and I'm kerin Moscow. We are just about four hours 0:20:56.200 --> 0:20:58.439 away from the open of US trading. Let's get you 0:20:58.520 --> 0:20:59.879 up to date in the news you need to know 0:21:00.000 --> 0:21:02.919 at this hour. The SNP five hundred enters this session 0:21:02.920 --> 0:21:05.640 near a two month high. The tech heavy NASDAC one 0:21:05.680 --> 0:21:08.600 hundred index is at its highest level since early May. 0:21:08.720 --> 0:21:12.240 Corporate earnings in healthy economic data has helped to lift sentiment, 0:21:12.560 --> 0:21:16.320 but Alifa Dory Walla, managing director at Rock Creek, says 0:21:16.480 --> 0:21:20.240 she's still cautious there could be another severe downturn, another 0:21:20.359 --> 0:21:22.199 leg to go in the SNP, and a lot of 0:21:22.240 --> 0:21:24.200 that is some of the big tech companies that could 0:21:24.240 --> 0:21:26.280 continue to get hard because of the strong dollar and 0:21:26.320 --> 0:21:28.479 what will happen to earnings in the coming orders if 0:21:28.480 --> 0:21:32.080 that strong dollar remains. Rock Creeks Alifa Dore Wallace says 0:21:32.119 --> 0:21:35.439 the recent pivot into tech might be short lived. Meantime, 0:21:35.520 --> 0:21:39.680 Karen Feed officials continue talking tough on inflation. Minneapolis President 0:21:39.720 --> 0:21:42.080 Neil cash car He says the Federal Reserve will keep 0:21:42.080 --> 0:21:45.680 doing everything in its power to cool inflation. Some financial 0:21:45.680 --> 0:21:47.960 markets are indicating that they expect US to cut interest 0:21:48.040 --> 0:21:51.359 rates next year. Uh. I don't want to say it's impossible, 0:21:51.440 --> 0:21:54.159 but it seems like that's a very unlikely scenario right now, 0:21:54.200 --> 0:21:57.000 given what I know about the underlying inflation dynamics. The 0:21:57.119 --> 0:22:00.280