WEBVTT - Bloomberg Daybreak: November 7, 2022 - Hour 1 (Radio) 0:00:02.480 --> 0:00:05.800 Live from the Bloomberg Interacted Berger Studios. This is is Bloomberg 0:00:05.880 --> 0:00:09.200 day Break for a Monday, November seven two. Coming up 0:00:09.200 --> 0:00:12.080 this hour, Apple expects to produce at least three million 0:00:12.160 --> 0:00:15.840 fewer iPhone fourteens than originally planned. Thousands of job cuts 0:00:15.840 --> 0:00:19.000 wore recordedly on the way at Facebook, Pair and meta platforms. 0:00:19.120 --> 0:00:22.200 The investors brace for this week's key report on inflation, 0:00:22.320 --> 0:00:24.360 and we take you to Egypt, where a big climate 0:00:24.440 --> 0:00:27.800 change summit is underway. It's the final push for campaigning 0:00:27.800 --> 0:00:30.360 in New York's governor's race hand the mid terms. Plus 0:00:30.560 --> 0:00:33.640 the CDC warns of the surgeon covid flew and RSV 0:00:33.920 --> 0:00:36.920 on Michael bar more ahead, I'm John Stage, Aaron Sports. 0:00:36.960 --> 0:00:39.080 Big win for the Jets, that upset of the bills 0:00:39.080 --> 0:00:42.880 the Rangers lost, and lets we signed their closer. That's 0:00:42.880 --> 0:00:46.839 all straight ahead on Bloomberg day Break on Bloomberg eleven, 0:00:46.920 --> 0:00:51.559 FREEO New York, Bloomberg one, Washington, d C, Bloomberg one 0:00:51.600 --> 0:00:55.960 oh six one, Boston, Bloomberg nine sixty, San Francisco, Sirius 0:00:56.200 --> 0:00:59.760 x M one nine and around the world on Bloomberg Radio. 0:01:00.120 --> 0:01:08.319 Come and via the Bloomberg Business app. Good morning, I've 0:01:08.400 --> 0:01:11.400 Nathan Hager and I'm Karen Moscow. In US Dock index 0:01:11.480 --> 0:01:14.039 futures are on the rise this morning. We are coming 0:01:14.080 --> 0:01:15.720 up to five oh one on Wall Street, and we 0:01:15.800 --> 0:01:18.280 check the markets every fifteen minutes throughout the trading day. 0:01:18.400 --> 0:01:21.920 On Bloomberg, SNP futures have eight points this morning, Down 0:01:21.959 --> 0:01:25.240 futures have eighty five, and NASDACK futures up about sixteen. 0:01:25.360 --> 0:01:27.839 The decks in Germany's up seven tenths of a percent, 0:01:28.160 --> 0:01:30.800 and the tenure treasury up four thirty seconds shield four 0:01:30.840 --> 0:01:33.640 point one four percent. The yield on the two year 0:01:33.760 --> 0:01:36.960 four point six seven percent. Nathan Karen. The rise we're 0:01:37.000 --> 0:01:39.840 seeing in futures this morning could build on Friday's rally 0:01:39.920 --> 0:01:42.640 on Wall Street, it saw the SNP five snap of 0:01:42.720 --> 0:01:46.200 four day losing streak stilt. The index is down twenty 0:01:46.240 --> 0:01:49.280 one percent in two and on track for its worst 0:01:49.360 --> 0:01:52.279 year in at least a decade. Alan Zaffron is founding 0:01:52.280 --> 0:01:55.120 partner and co CEO at I e Q Capital. What 0:01:55.360 --> 0:01:58.120 we are fearful of, and if you're parish, is that 0:01:58.200 --> 0:02:00.160 the FED is only going to pivot when the p 0:02:00.400 --> 0:02:02.840 M is the Purchasing Manager Index, which is a broad 0:02:02.880 --> 0:02:06.040 measure of economic activity. If it were to really plummet, 0:02:06.560 --> 0:02:08.560 the said would have no choice but to do so, 0:02:08.600 --> 0:02:12.720 and that probably only happens coincidentally with the labor markets 0:02:12.760 --> 0:02:15.359 starting to get out of control. I e Q Capital's 0:02:15.400 --> 0:02:17.840 Alan Zafran says FED rate hikes will take six to 0:02:17.919 --> 0:02:20.960 twelve months to work their way through the economy. Well, Nathan, 0:02:20.960 --> 0:02:23.960 the attention is we turns to inflation. Let's take a 0:02:23.960 --> 0:02:26.600 look at the economic calendar, with Bloomberries if any down 0:02:26.680 --> 0:02:30.200 Judas topping this week's list, the October consumer price and 0:02:30.360 --> 0:02:33.760 except for Thursday and tracking the ever rising cost of 0:02:33.800 --> 0:02:37.919 living post pandemic economist the inflation running hot at about 0:02:37.960 --> 0:02:40.960 eight percent year over a year, keeping the federal reserve 0:02:41.080 --> 0:02:43.840 on the offense. Now, wages are on the rise, but 0:02:43.919 --> 0:02:47.520 inflation is outstripping the games. Hence a lack of confidence 0:02:47.520 --> 0:02:51.320 in America's economy and the University of Michigan consumer sentiment 0:02:51.400 --> 0:02:54.520 and except once again to run their record low ex 0:02:54.520 --> 0:02:57.320 set for Friday. Then eat del Judai s Bloomberg day break. 0:02:57.360 --> 0:02:59.920 All right, Vinny, thanks, it's also another busy week for earning. 0:03:00.080 --> 0:03:02.880 Let's preve you that with Bloomberg's Charlie Pellett. With about 0:03:02.919 --> 0:03:06.200 four hundred thirty companies in the SMP five hundred reporting 0:03:06.280 --> 0:03:11.800 so far have reported positive earning surprises, according to data 0:03:11.800 --> 0:03:15.960 compound by Bloomberg. Peter Roppenheimer is chief Global equity strategist 0:03:16.000 --> 0:03:21.160 at Goldman Sachs International. This is not a disastrous earning season, 0:03:21.240 --> 0:03:23.920 but certainly not nearly as strong as we've seen previously. 0:03:24.200 --> 0:03:26.560 And the key thing that's happening, and we've been arguing 0:03:26.600 --> 0:03:29.440 this for some time, is that margins are starting to 0:03:29.520 --> 0:03:32.760 come under pressure as a result of these high input costs. 0:03:32.800 --> 0:03:36.520 Among the company's scheduled to report this week, Activision Blizzard 0:03:36.600 --> 0:03:42.400 asked Rosenca, BioNTech, Occidental Petroleum, and ribviean automotive in New York. 0:03:42.480 --> 0:03:45.520 Charlie Pellet Bloomberg Daybreak. All right, Charlie, thank you about 0:03:45.520 --> 0:03:49.040 looking at earnings longer term. Goldman Sachs is lowering its 0:03:49.120 --> 0:03:52.720 estimates for the SMP five hired for each year till four. 0:03:53.080 --> 0:03:56.200 The bank strategist say, margin contraction in the third quarter 0:03:56.280 --> 0:03:59.720 signals more pain ahead. Goldman is not changing it's here 0:03:59.800 --> 0:04:02.520 end targets for the SNP. It still thinks the index 0:04:02.520 --> 0:04:05.040 will drop another four and a half percent this year 0:04:05.080 --> 0:04:09.000 to thirty six hundred before rising to four thousand and three. 0:04:09.240 --> 0:04:12.320 I mean well, Karen Morgan. Stanley's Michael Wilson says investors 0:04:12.360 --> 0:04:15.560 should stay bullish on equities ahead of this week's midterm elections. 0:04:15.720 --> 0:04:18.720 Wilson correctly predicted this year's slump in stocks. He says 0:04:18.760 --> 0:04:21.599 if Republicans win at least one chamber of Congress, it 0:04:21.680 --> 0:04:24.839 could provide a catalyst for lower bond yields and higher 0:04:24.880 --> 0:04:28.360 equity prices. Well. Turning to corporate news, now, we're watching 0:04:28.400 --> 0:04:31.520 shares of Apple this morning. They are currently down more 0:04:31.560 --> 0:04:34.520 than one percent in early trading. The company expects to 0:04:34.560 --> 0:04:39.120 produce at least three million fewer iPhone fourteen handsets than 0:04:39.160 --> 0:04:42.600 originally planned this year, and Bloomberg Daybreak Asia anchor Bryan 0:04:42.680 --> 0:04:45.760 Curtis has more from Hong Kong. Bloomberg sources say the 0:04:45.760 --> 0:04:48.440 company and its suppliers now aimed to make about eighty 0:04:48.480 --> 0:04:52.000 seven million devices. That's down from ninety million. The reduction 0:04:52.080 --> 0:04:54.760 is due to softer demand for the iPhone fourteen and 0:04:54.800 --> 0:04:58.640 fourteen plus that adds to supply issues in places like 0:04:58.760 --> 0:05:02.440 Jung Joe, China. The plant there is under a COVID lockdown. 0:05:02.520 --> 0:05:05.520 You know Kong Brian Curtis, Bloomberg Daybreak, Brian, thanks. We 0:05:05.560 --> 0:05:08.960 continue to see job cuts in corporate America. Facebook parent 0:05:09.000 --> 0:05:12.600 Meta Platforms will reportedly start laying off thousands this week. 0:05:12.680 --> 0:05:14.960 According to The Wall Street Journal, The cuts could come 0:05:15.000 --> 0:05:18.760 as early as Wednesday. Met has been struggling with growing losses, 0:05:18.800 --> 0:05:22.440 and it's been investing heavily in its metaverse business. Meta shares, 0:05:22.520 --> 0:05:26.279 which are down seventy three percent this year, are rising 0:05:26.279 --> 0:05:30.000 this morning, up more than three percent in early trading. Well, Nathan, 0:05:30.040 --> 0:05:33.000 Twitter brought the acts down hard last week on close 0:05:33.040 --> 0:05:36.280 to thirty seven hundred of its employees. Now it's asking 0:05:36.360 --> 0:05:38.840 dozens of them to come back. Sources tell us the 0:05:38.880 --> 0:05:42.240 company decided the employees were either fired by mistake or 0:05:42.400 --> 0:05:45.440 too essential to the changes. New owner Elon Musk wants 0:05:45.480 --> 0:05:48.920 to make one of those changes, adding verification checkmarks for 0:05:49.040 --> 0:05:52.840 subscribers to Twitter's monthly Blue service that's been delayed till 0:05:52.920 --> 0:05:56.080 Wednesday to avoid mid term election chaos. Well, the world's 0:05:56.080 --> 0:05:58.320 focus for the next couple of weeks, Karen will be 0:05:58.320 --> 0:06:01.360 on the health of the planet. The Seven Summit is 0:06:01.440 --> 0:06:05.279 underway in Egypt, the United Nations Annual Climate Change Event 0:06:05.440 --> 0:06:09.680 is beginning with discussions on reparations or compensating poorer nations 0:06:09.720 --> 0:06:12.400 for the damage from emissions produced elsewhere. We get more 0:06:12.400 --> 0:06:14.840 from Bloombergs use of kamal l Dean in Charmel Shake. 0:06:15.160 --> 0:06:18.080 We've got over one hundred heads of state to hund 0:06:18.200 --> 0:06:21.360 delegations from all across the world, and they've set apart 0:06:21.360 --> 0:06:23.560 a little bit lower. I would say they admit that 0:06:23.800 --> 0:06:25.840 because of some of the risks, everything of the Ukraine 0:06:25.880 --> 0:06:28.360 War to be ongoing, to your political statics in China 0:06:28.400 --> 0:06:33.000 and the US, it's gonna be harder to get things going. Nonetheless, 0:06:33.120 --> 0:06:35.800 they want to show some results, and they already to 0:06:35.839 --> 0:06:39.360 get contraction on adding a little bit of a controversial 0:06:39.440 --> 0:06:41.840 item to the attenda, the loss and damage items that 0:06:41.880 --> 0:06:46.440 this is related to unchecked cossal fuel use that cause 0:06:46.480 --> 0:06:50.760 economic destruction in disproportioned ways. Bloomberg's use of kamal l 0:06:50.800 --> 0:06:53.080 Dean reports. The leaders of Germany, France and the UK 0:06:53.200 --> 0:06:56.440 are appearing at the start of copy. US President Joe 0:06:56.440 --> 0:06:59.520 Biden and Brazil's president elect are due to appear later 0:06:59.560 --> 0:07:03.160 on well. Finally, Nathan Warren Buffett's Berkshire Hathaway has taken 0:07:03.160 --> 0:07:06.000 a beating on auto insurance. They conglomerate reported and nine 0:07:06.080 --> 0:07:09.000 hundred sixty two million dollar loss on insurance underwriting in 0:07:09.040 --> 0:07:11.920 the third quarter. That's the worst quarterly loss in a year. 0:07:12.000 --> 0:07:14.880 Auto insurers have struggled to keep pace with higher used 0:07:14.920 --> 0:07:18.440 car prices and the rising costs of accidents. And this 0:07:18.880 --> 0:07:24.840 is Bloomberg Max Haaren. It's five oh seven on Wall Street. 0:07:24.840 --> 0:07:28.520 Got some showers sixty degrees in Central Park the northbound 0:07:28.600 --> 0:07:31.480 Van Wick Off ramp to the westbound Belt Parkway is 0:07:31.560 --> 0:07:35.040 closed for an accident investigation. Michael barrs here with more 0:07:35.040 --> 0:07:36.800 on what's going on in New York and around the world. 0:07:36.800 --> 0:07:39.160 Good morning, might call Good morning Nathan. It was the 0:07:39.200 --> 0:07:43.960 final weekend of campaigning before Tuesday's mid term elections. President 0:07:44.040 --> 0:07:47.280 Joe Biden campaign for New York Governor Kathy Hokel at 0:07:47.360 --> 0:07:50.480 a rally and Yonkers Sunday. Biden, hoping to give the 0:07:50.520 --> 0:07:54.840 incumbent a last minute boost against Republican challenger Lees Eldott, 0:07:55.240 --> 0:07:59.160 poles show the race between the two narrowing. Biden criticized 0:07:59.200 --> 0:08:03.480 former President Trump and the Republican Party's record on the economy. 0:08:03.920 --> 0:08:07.320 What's gonna happen the next couple of years is going 0:08:07.400 --> 0:08:09.760 to have more to do with what this country looks 0:08:09.800 --> 0:08:13.600 like twenty years from now than anything else. Congressman Zelden 0:08:13.720 --> 0:08:17.880 campaign at a rally in Rochester, promising, if he's elected governor, 0:08:17.960 --> 0:08:20.720 he's going to crack down on crime, and those state 0:08:20.720 --> 0:08:26.200 employees in charge of fighting it, you're going to emergency 0:08:26.320 --> 0:08:29.720 here in the state of New York. Meanwhile, former President 0:08:29.720 --> 0:08:34.160 Trump urged Florida voters to support Republican candidates in Tuesday's 0:08:34.160 --> 0:08:36.960 mid term elections. This is a year we are going 0:08:37.040 --> 0:08:39.600 to take back the House. We are going to take 0:08:39.640 --> 0:08:43.440 back the Senate. We're going to take back America. We're 0:08:43.480 --> 0:08:47.400 going to take Trump spoke at a rally in Miami 0:08:47.480 --> 0:08:51.600 with Florida Senators Marco Rubio and Rick Scott, a former 0:08:51.640 --> 0:08:54.040 director of the f d A, is concerned that the 0:08:54.160 --> 0:08:58.120 US is not prepared for the current virus season. Bloomberg 0:08:58.160 --> 0:09:00.800 said Baxter as the story the US has center in 0:09:00.880 --> 0:09:04.960 cold flu, RSV and COVID season, and former director Scott 0:09:05.000 --> 0:09:07.760 gott leeb on CBS has heard here on. Bloomberg says 0:09:07.800 --> 0:09:10.640 some past mistakes are getting in the way of new policies. 0:09:10.720 --> 0:09:12.400 We know wearing a mask if you have the flu 0:09:12.600 --> 0:09:14.840 rs V when you go out is effective at preventing 0:09:14.840 --> 0:09:17.520 forward transmission. Nobody wants to say that. So I think 0:09:17.520 --> 0:09:19.839 that there's a lot of reluctance now, in part because 0:09:19.840 --> 0:09:22.160 of the failures of public health messaging during the pandemic 0:09:22.160 --> 0:09:24.600 and things we've got wrong at the backlash toys. So 0:09:24.600 --> 0:09:26.520 we don't have a good solution for what we're entering 0:09:26.600 --> 0:09:28.760 right now. Got Leeb says mistakes should have been made 0:09:28.840 --> 0:09:32.360 during COVID should not affect medical policy going forward. In 0:09:32.440 --> 0:09:36.080 San Francisco, I'm at Baxter Bloomberg Gab break authorities continued 0:09:36.120 --> 0:09:38.760 to investigate in New York City high rise fire over 0:09:38.800 --> 0:09:41.520 the weekend that injured over three dozen people and was 0:09:41.559 --> 0:09:45.000 traced to a faulty lithium ion battery. It is the 0:09:45.080 --> 0:09:48.200 latest in the fast growing series of battery blazes that 0:09:48.240 --> 0:09:51.640 have fire officials concerned. The fire has burned the dramatic 0:09:51.880 --> 0:09:56.040 and rare rope rescue twenty stories above Manhattan's East fifty 0:09:56.040 --> 0:09:59.240 second Street, a few blocks from the United Nations headquarters. 0:09:59.520 --> 0:10:02.080 Global used twenty four hours a day on airand on 0:10:02.120 --> 0:10:04.480 Bloomberg Quick Take Power about more than twenty seven hundred 0:10:04.520 --> 0:10:07.160 journalists analysts more than a hundred twenty countries. I'm Michael 0:10:07.160 --> 0:10:14.040 bar This is Bloomberg, Nathan. Thank you, Michael. Almost five 0:10:14.040 --> 0:10:16.240 ten on Wall Street. Time for the Bloomberg Sports Up Day, 0:10:16.240 --> 0:10:18.520 brought to you by Tri State Autie. Good morning, John 0:10:18.559 --> 0:10:20.480 stash Our, all right, good morning eight of the Jets 0:10:20.480 --> 0:10:22.960 of an underdogs almost every week. They were eleven point 0:10:23.120 --> 0:10:25.640 underdogs that met live. Buffalo came in and a FC 0:10:25.840 --> 0:10:28.640 best six and one, three wins by at least three touchdowns. 0:10:28.640 --> 0:10:32.720 But the Jets sat Josh Allen five times, intercepted them twice, 0:10:32.960 --> 0:10:35.800 and twice got themselves into the end zone. Files show 0:10:35.920 --> 0:10:38.000 Blitz takes the snout hard to run up the middle 0:10:38.000 --> 0:10:45.120 of the five. What Jeck blocks down? Ryos motion first 0:10:45.160 --> 0:10:47.720 and goal at the second back to fro Zacholson scream right, 0:10:48.040 --> 0:10:50.719 hobbson half the ten, half the five, which is the 0:10:50.840 --> 0:10:56.480 good He's across the goal, Jet cluespn Eric the cost. 0:10:56.559 --> 0:10:58.520 The game was tied when the Jets went on our 0:10:58.600 --> 0:11:01.240 thirteen play eighty six yard drive at ended with a 0:11:01.240 --> 0:11:05.160 Greg's airline go ahead field goal. They upset the Bills seventeen. 0:11:05.200 --> 0:11:07.839 They're only half game behind Buffalo game last night to 0:11:08.000 --> 0:11:11.240 a FC Division leaders who went overtime. Kansas City beat Tennessee. 0:11:11.320 --> 0:11:14.880 Patrick Mahomes through the ball sixty eight times. Tom Brady 0:11:14.880 --> 0:11:17.160 threw at fifty eight the last one of ten pass 0:11:17.480 --> 0:11:19.520 Sampa Bay's only touchdown of the day. They beat the 0:11:19.600 --> 0:11:21.760 Rams in the battle of the last two Super Bowl winners, 0:11:21.760 --> 0:11:25.319 both of whom struggling this year. Green Bay really struggling, 0:11:25.320 --> 0:11:27.520 lost to the Jets, loss of the Giants, and just 0:11:27.600 --> 0:11:31.280 lost to lowly Detroit. Aaron Rodgers intercepted three times. The 0:11:31.400 --> 0:11:34.560 sound of Timmy Trumpet playing Narco will continue to be 0:11:34.559 --> 0:11:36.480 heard at City Field for the years to come. The 0:11:36.559 --> 0:11:39.880 Mets locked up all star closer Edwin Diaz, who was 0:11:40.040 --> 0:11:42.400 a free agent five years hundred two million, most of 0:11:42.400 --> 0:11:45.880 it for a reliever. The Nets laid down six requirements 0:11:45.880 --> 0:11:48.960 that Kyrie Irving must meet before they consider lifting his suspension. 0:11:49.400 --> 0:11:52.600 The Rangers lost to Detroit three two and overtime. John Stash, 0:11:52.600 --> 0:11:55.319 Howard Bloomberg, Sports Nathan all Right, John Thanks s S 0:11:55.400 --> 0:11:58.480 and P. Futures up twelve point, Staff futures up at 0:11:58.760 --> 0:12:02.200 futures are higher by thirty three points. You're listening to 0:12:02.280 --> 0:12:08.800 Bloomberg Gaber Bloomberg Sports is brought to you by Autie. 0:12:08.880 --> 0:12:10.920 Don't let someone else drive off in the Autie model. 0:12:11.000 --> 0:12:13.240 You've always wanted to visit your local tri state autie 0:12:13.240 --> 0:12:15.040 dealer to get behind the wheel of yours today, or 0:12:15.160 --> 0:12:23.760 visit Autie Offers dot com for more information, markets, headlines 0:12:23.800 --> 0:12:26.800 and breaking news twenty four hours a day. At Bloomberg 0:12:26.840 --> 0:12:29.880 dot com for Bloomberg Business out and at Bloomberg Quick 0:12:29.960 --> 0:12:39.440 Tape is a Bloomberg business clash, and I'm camerin Moscow 0:12:39.480 --> 0:12:42.160 and US dot Index futures are on the rise this 0:12:42.360 --> 0:12:46.120 morning after dropping earlier. European shares are higher, led by 0:12:46.240 --> 0:12:48.840 travel shares, and we check the markets every fifteen minutes 0:12:48.880 --> 0:12:51.400 throughout the trading day on Bloomberg. Right now is in 0:12:51.440 --> 0:12:54.640 P futures or up about sixteen points now futures up 0:12:54.640 --> 0:12:57.640 a hundred forty three NASDACK futures up forty the decks 0:12:57.640 --> 0:13:00.199 in Germany's up one percent. Can your true a sure? 0:13:00.240 --> 0:13:02.160 We have five thirty seconds, you have four point one 0:13:02.240 --> 0:13:04.240 three percent and a yield in the two year four 0:13:04.240 --> 0:13:07.520 point six seven percent. NIMEX screwed oil is it will 0:13:07.640 --> 0:13:09.920 change in ninety two dollars fifty six cents of Barrel 0:13:10.160 --> 0:13:12.640 comics schooled that a third of a percent, or six dollars. 0:13:12.679 --> 0:13:16.040 At sixteen eighty two sixty announced the euro point nine 0:13:16.160 --> 0:13:18.520 nine nine one against the dollar, British found one point 0:13:18.600 --> 0:13:21.320 one four six five and the end one forty six 0:13:21.400 --> 0:13:25.000 point four and nine. And Bitcoin this morning is down 0:13:25.120 --> 0:13:28.280 one point seven percent. It's a twenty thousand, seven hundred 0:13:28.320 --> 0:13:31.480 eighty dollars. That's a bloomberg business flash. Now here's Nuchael 0:13:31.520 --> 0:13:34.120 bar with more on what's going on around the world. Michael, 0:13:34.120 --> 0:13:37.520 good morning, Good morning, Karen. Election day is tomorrow, but 0:13:37.640 --> 0:13:41.760 already more than forty million Americans have cast early ballots. 0:13:42.080 --> 0:13:45.680 Republicans are optimistic about winning enough seats to retake control 0:13:45.760 --> 0:13:49.400 of both the House and the Senate, while Democrats insist 0:13:49.679 --> 0:13:52.680 they are poised for a better night than many expect. 0:13:53.200 --> 0:13:56.600 The COP twenty seven You and Climate talks began in Egypt, 0:13:56.880 --> 0:13:59.360 with a deal to discuss how rich countries can help 0:13:59.440 --> 0:14:03.720 pay for the damages caused by global warming Elsewhere. Recent 0:14:03.800 --> 0:14:07.439 climate disasters, such as the floods in Pakistan have put 0:14:07.480 --> 0:14:10.760 the issue back into focus. In the NFL, the Jets 0:14:10.840 --> 0:14:15.199 upset the Bills seventeen. The Patriots won, the Commanders lost. 0:14:15.440 --> 0:14:18.400 The Ravens play the Saints tonight in the NHL. The 0:14:18.520 --> 0:14:20.880 Rangers lost in O t to the Red Wings three 0:14:21.000 --> 0:14:24.840 two in the NBA, the Wizards lost. Global News twenty 0:14:24.880 --> 0:14:28.240 four hours a day on air and on Bloomberg Quick Take, 0:14:28.560 --> 0:14:31.840 powered by more of than hundred journalists and analyist more 0:14:31.840 --> 0:14:34.480 than a hundred twenty countries. I'm Michael bar and this 0:14:34.800 --> 0:14:37.760 is Bloomberg, Nathan. Thank you, Michael. It's five nineteen on 0:14:37.840 --> 0:14:40.920 Wall Street Line from the Bloomberg Interactive Brokers Studios. This 0:14:41.200 --> 0:14:44.600 is Bloomberg Daybreak and Dennis Gartman's back with us this morning, 0:14:44.640 --> 0:14:47.520 the chairman of the University of Akron Endowman Investment Committee, 0:14:47.760 --> 0:14:50.360 former publisher of the Gartment Letter. At the start of 0:14:50.560 --> 0:14:54.280 a really busy week for markets, with elections, earnings, and 0:14:54.520 --> 0:14:57.920 inflation all in focus, Dennis, what are you focusing on 0:14:58.080 --> 0:15:02.120 this week? Elections have so the focal point for everybody. 0:15:02.320 --> 0:15:05.240 Just given given the fact that the elections are tomorrow, 0:15:05.280 --> 0:15:07.160 and given the fact that they're as tight as they're 0:15:07.160 --> 0:15:09.840 going to be, however, I think that the Republicans will 0:15:09.920 --> 0:15:12.920 end up sweeping the House, probably winning thirty five seats, 0:15:13.520 --> 0:15:15.480 and I actually think that they'll end up winning the 0:15:15.960 --> 0:15:19.080 Senate probably fifty two seats, maybe fifty three seats at most. 0:15:19.680 --> 0:15:22.320 That'll be supportive to share prices for the near termament 0:15:23.320 --> 0:15:27.080 at least people will become enthusiastic about a Republican capability 0:15:27.520 --> 0:15:29.360 to control the House and the Senate. But it also 0:15:29.440 --> 0:15:32.200 means it will have gridlock government for the past for 0:15:32.280 --> 0:15:34.640 the next two years or so, as everybody gets ready 0:15:34.640 --> 0:15:37.960 for the next presidential elections. So the election cycle stops 0:15:38.000 --> 0:15:41.800 tomorrow and begins Wednesday again, all at one time. I've 0:15:41.840 --> 0:15:44.680 been very barish share prices since the start of the year. 0:15:45.160 --> 0:15:47.440 I continue to be barish for share prices at this point. 0:15:47.800 --> 0:15:50.720 I think the Fed continues to tighten monetary policy far 0:15:50.840 --> 0:15:54.040 longer than anybody had anticipated, takes rates far higher, and 0:15:54.160 --> 0:15:56.120 takes them for a longer period of time than anybody 0:15:56.160 --> 0:15:59.480 had thought originally. So I haven't changed my opinion even slightly. Nathan, 0:16:00.000 --> 0:16:01.760 I want to hone in a little bit more on 0:16:01.880 --> 0:16:04.080 your view and where rates go from here. But we 0:16:04.200 --> 0:16:06.880 did get a note this morning from Mike Wilson over 0:16:07.000 --> 0:16:09.280 Morgan Stanley, who has also been pretty barish on this 0:16:09.440 --> 0:16:11.960 market and called the drop in stocks. He's saying that 0:16:12.600 --> 0:16:15.400 we could see an equity rally off the back of 0:16:15.800 --> 0:16:18.880 tomorrow's election. Obviously, it sounds like you agree with that. 0:16:19.000 --> 0:16:20.920 How big a rally could we see? Do you think? 0:16:22.280 --> 0:16:24.560 First of all, let's say we've we've had a huge 0:16:25.120 --> 0:16:30.440 bounce in in a a very normal technical bounce from 0:16:30.440 --> 0:16:32.360 the lows made three or four or three or four 0:16:32.400 --> 0:16:36.120 weeks ago. I followed the CNN Fair and Green Index, 0:16:36.160 --> 0:16:38.960 which has gotten to fourteen. Anytime it gets below twenty, 0:16:39.000 --> 0:16:40.480 you're going to get a bounce of some sort. You 0:16:40.520 --> 0:16:43.280 get oversold. And of course, the for three weeks we've 0:16:43.280 --> 0:16:45.080 taken the stock market, we've taken the down from what 0:16:45.840 --> 0:16:48.840 twenty nine thousand to thirty three thousand. That's probably as 0:16:48.920 --> 0:16:50.240 much of a rally as you're going to get. I 0:16:50.280 --> 0:16:52.720 think the high that we saw two weeks ago is 0:16:52.720 --> 0:16:54.640 probably going to be the end of it. Uh. And 0:16:54.800 --> 0:16:56.600 so I tend to disagree a little bit with Mr 0:16:56.680 --> 0:16:58.520 Wilson at this point. I think we've probably seen this, 0:16:58.640 --> 0:17:00.960 But I think we've already discount of the fact that 0:17:00.960 --> 0:17:02.800 the Republicans are going to sweep the House and the Senate. 0:17:02.840 --> 0:17:04.760 So I'm not sure that there's much left on the upside. 0:17:05.240 --> 0:17:07.400 At the same time, the CNN Fair and Green Index 0:17:07.480 --> 0:17:10.040 has gotten to sixty one and turned lower, and when 0:17:10.080 --> 0:17:11.960 that gets to that level, it usually means that the 0:17:12.080 --> 0:17:15.000 rally has run its course and the next next leg 0:17:15.080 --> 0:17:17.920 down is coming. The problem is that the rally was 0:17:18.000 --> 0:17:21.040 on very light volume, and good, good rallies, strong values, 0:17:21.640 --> 0:17:26.320 rallies that have sustainability, have to have increasing circumstances increasing volume, 0:17:26.359 --> 0:17:28.719 and we've not seen that. So I continue to think 0:17:28.800 --> 0:17:30.600 that it's a bear market that the rally we've already 0:17:30.680 --> 0:17:33.200 had has just counted the fact that the Republicans sweep 0:17:33.280 --> 0:17:36.359 the House and the Senate tomorrow, and given that the 0:17:36.640 --> 0:17:40.200 possibility of a red wave tomorrow and the return of 0:17:40.280 --> 0:17:44.600 divided government, what will that mean for equities as we 0:17:44.800 --> 0:17:49.119 head toward that next election? In I think the the 0:17:49.200 --> 0:17:52.200 overwhelming fundamental that's driving prices has been the fact that 0:17:52.280 --> 0:17:56.439 the FED has driven its balance sheet from nine trouillion 0:17:56.440 --> 0:17:58.320 dollars to nine trillion dollars over the course of the 0:17:58.400 --> 0:18:00.960 last decade. And as pro must has said, and in 0:18:01.160 --> 0:18:03.879 order to can continue to remain consistent, has said that 0:18:03.920 --> 0:18:06.920 it will be reducing the size of that balance sheet 0:18:06.920 --> 0:18:09.440 by its billion dollars a month. They're taking the fuel 0:18:09.480 --> 0:18:11.879 that had driven the bull market away. It's as if 0:18:11.920 --> 0:18:13.600 you've taken your foot off the gas pedal and the 0:18:13.680 --> 0:18:17.119 car stalls. I think that that's the overriding fundamental. If 0:18:17.160 --> 0:18:20.879 you get a bounce predicated upon the better action by 0:18:20.920 --> 0:18:22.320 the part of the Republicans of the House and the 0:18:22.359 --> 0:18:24.720 Senate to morow use that strength to sell into and 0:18:24.800 --> 0:18:27.880 reduce your positions get smaller and not larger. At this point, 0:18:29.240 --> 0:18:32.200 we also got a note from Goldman Sacks cutting earnings 0:18:32.359 --> 0:18:35.960 estimates for the SMP for this year and next. What 0:18:36.080 --> 0:18:38.920 kind of earnings compression do you see for stocks? Probably 0:18:38.960 --> 0:18:41.240 ten or fifteent reduction and earnings over the course the 0:18:41.320 --> 0:18:43.639 next year or two, And that means the price earnings 0:18:43.720 --> 0:18:45.639 multiple has to come in again. It's been coming in 0:18:45.720 --> 0:18:48.199 for the past six or seven months, the longer than that, actually, 0:18:48.600 --> 0:18:50.119 and I think it continues to come in. So I 0:18:50.400 --> 0:18:52.440 agree with Goldman Sacks. I think earnings are going to 0:18:52.480 --> 0:18:56.080 be the monsterbly lesser, demonsterly smaller than had been anticipated 0:18:56.240 --> 0:18:58.320 three and four and five and six months ago. The 0:18:58.400 --> 0:19:01.080 market had anticipated good earnings. Learnings are coming in less 0:19:01.080 --> 0:19:03.440 than expected, and I think that that's likely to continue 0:19:03.480 --> 0:19:06.359 for a long period of time. So again, use strength 0:19:06.440 --> 0:19:09.240 to sell into, use strength to reduce your positions. Here, 0:19:09.320 --> 0:19:10.920 she or loses the least amount of money in a 0:19:10.960 --> 0:19:13.280 bear market will be the winner. As I said, we'll 0:19:13.320 --> 0:19:15.879 hone in a little bit deeper into that view, including 0:19:16.240 --> 0:19:19.800 where the fed path goes from here. Dennis Gartman is 0:19:19.880 --> 0:19:22.560 with us for the hour. Dennis Gartman, former publisher of 0:19:22.600 --> 0:19:25.560 the Gartment Letter and now chairman of the University of 0:19:25.640 --> 0:19:29.040 Akron Endowment Investment Committee. Looking ahead to the market open 0:19:29.240 --> 0:19:33.000 this morning, futures are pointing to more gains after Friday's rally. 0:19:33.200 --> 0:19:35.840 SMP futures are up eighteen points down, futures up a 0:19:35.920 --> 0:19:39.600 hundred sixty one, and NASTACK futures are higher by fifty 0:19:39.640 --> 0:19:42.320 one points ten. Your treasury is up for thirty seconds, 0:19:42.680 --> 0:19:45.200 the yield down nearly two basis points to four point 0:19:45.440 --> 0:19:48.000 almost four point one four percent yield on the two 0:19:48.119 --> 0:19:52.119 year four point six eight percent. NIMEX crude little changed 0:19:52.440 --> 0:19:55.639 on the session, up five cents ninety two dollars sixty 0:19:55.720 --> 0:19:58.360 six cents of barrel Comac sculled a four tenths per cent, 0:19:58.440 --> 0:20:01.440 or six dollars thirty cents sixty eight two ninety for 0:20:01.600 --> 0:20:08.119 announce of gold. This is Bloomberg. Bloomberg day Break is 0:20:08.119 --> 0:20:10.800 brought to you by Peapack Private Wealth Management. Peapack Private 0:20:10.840 --> 0:20:13.119 Wealth Management knows that the portfolio is more than a 0:20:13.160 --> 0:20:15.640 collection of assets. It's a path to your future. Visit 0:20:15.720 --> 0:20:19.119 Pepack Private dot com and begin your financial legacy today. 0:20:22.359 --> 0:20:26.840 Broadcasting live from the Bloomberg Interactive Broker Studio in New York, 0:20:26.960 --> 0:20:31.600 Bloomberg eving freo to Washington d C, Bloomberg on to Boston, 0:20:31.760 --> 0:20:35.000 Bloomberg one O six one to San Francisco, Bloomberg N 0:20:35.240 --> 0:20:38.480 sixty to the country, Sirius XM Chentle one nineteen and 0:20:38.560 --> 0:20:41.920 around the Blobe, the Bloomberg Business at and Bloomberg Radio 0:20:42.040 --> 0:20:51.320 dot com. This is Bloomberg Daybreak and it's five thirty 0:20:51.480 --> 0:20:54.800 on Well Street. Good morning. I'm Karen Moscow, I'm Nathan Hagar. 0:20:54.840 --> 0:20:57.360 Bloomberg Daybreak is brought to you by se I. Imagine 0:20:57.359 --> 0:21:01.080 your asset management firms operational infrastructure as it can petitive advantage. 0:21:01.160 --> 0:21:03.600 Let se I show you how at se I C 0:21:03.840 --> 0:21:06.639 dot com slash I m S and we're just about 0:21:06.680 --> 0:21:09.040 four hours away from the open of US trading. Let's 0:21:09.040 --> 0:21:10.439 get you up to date on the news you need 0:21:10.520 --> 0:21:12.920 to know at this hour. Well, Investors this week will 0:21:12.960 --> 0:21:15.560 be keeping a close eye on key economic data. The 0:21:15.600 --> 0:21:19.320 October Consumer Price Index is due out Thursday, and University 0:21:19.359 --> 0:21:22.800 of Michigan Consumer Sentiment Index comes out Friday. Paid in 0:21:22.840 --> 0:21:26.520 in Regal Chief US economist Jeffrey Cleveland says jobs data 0:21:26.600 --> 0:21:29.480 from Friday suggests the FEDS still in the thick of 0:21:29.520 --> 0:21:32.800 its inflation battle. But wage growth data has slowed, maybe 0:21:32.840 --> 0:21:34.840