WEBVTT - Bloomberg Daybreak: June 17, 2022 - Hour 1 (Radio) 0:00:02.240 --> 0:00:05.840 Live from the Bloomberg Interactive Brokers Studios. This is Bloomberg 0:00:05.920 --> 0:00:09.880 day Break for Friday, June seventeen two. Coming up this hour, 0:00:10.119 --> 0:00:13.520 stocks rebound after yesterday's sell off on Wall Street. The 0:00:13.640 --> 0:00:16.760 SMP five hundred enters Today's triple Witching session at an 0:00:16.800 --> 0:00:20.759 eighteen month low. President Biden says a recession can be avoided, 0:00:21.000 --> 0:00:24.280 and Japan defies the global trend and retains super easy 0:00:24.360 --> 0:00:27.960 monetary policy. The final democratic debate in the primary campaign 0:00:28.040 --> 0:00:30.760 for New York governor is over. Plus another mass shooting 0:00:30.760 --> 0:00:33.240 in a church in Alabama leaves two dead. I'm Michael 0:00:33.280 --> 0:00:36.720 bar More Ahead, I'm John Stanstoward. Sports Night didn't win 0:00:36.760 --> 0:00:38.839 for the Yankees, comeback win for the met and the 0:00:38.960 --> 0:00:44.919 Golden State Warriors have won the NBA Championship. That's all 0:00:45.040 --> 0:00:48.760 trended ahead on Bloomberg Daybreak on Bloomberg Eliving Free on 0:00:48.840 --> 0:00:53.239 New York, Bloomberg one, Washington, d C, Bloomberg one oh 0:00:53.320 --> 0:00:57.880 six one, Boston, Bloomberg nine sixty, San Francisco, Sirius x 0:00:58.040 --> 0:01:00.920 M one nineteen and around the world. Old on Bloomberg 0:01:00.960 --> 0:01:03.680 Radio Dot Com IM and by the Bloomberg Business App. 0:01:07.640 --> 0:01:10.480 Good morning, I'm Nathan Hagar and I'm John Tucker. Bloomberg 0:01:10.560 --> 0:01:13.360 Day Break being brought to you by Informattica. In the Cloud, 0:01:13.440 --> 0:01:16.720 your data has the power to do the extraordinary. Managed 0:01:16.800 --> 0:01:19.480 data across any location of the cloud for accurate and 0:01:19.600 --> 0:01:23.959 actionable insights. More at Informatica dot com. The US futures 0:01:23.959 --> 0:01:25.840 are on the rise this morning. It's five oh one 0:01:25.840 --> 0:01:27.800 on Wall Street and we checked the markets every fifteen 0:01:27.840 --> 0:01:30.720 minutes during the trading day. On Bloomberg, SMP futures are 0:01:30.760 --> 0:01:32.960 up thirty three points, Staff futures up t hundred forty, 0:01:33.040 --> 0:01:35.560 Nasdaq futures are hired by a hundred twelve points. The 0:01:35.600 --> 0:01:38.000 tenure Treasury is down eight thirty seconds. The yeld three 0:01:38.040 --> 0:01:40.400 point to two percent yield on the two year three 0:01:40.400 --> 0:01:42.720 point one seven percent right now, and I'm x screwed 0:01:42.840 --> 0:01:45.440 is up seven tenths percent at a hundred eighteen dollars 0:01:45.560 --> 0:01:48.600 forty cents of barrel, John and Nathan. The Rysan futures 0:01:48.600 --> 0:01:51.320 follows yet another sell off on Wall Street, which saw 0:01:51.320 --> 0:01:54.680 the SMP five hunder closed at an eighteen month low. 0:01:55.000 --> 0:01:57.760 It was a sea of red, with only fourteen stocks 0:01:57.760 --> 0:02:00.640 in the SMP five hunder closing higher where Brignac, the 0:02:00.720 --> 0:02:03.560 chief investment officer at Invesco, says, with the inflation and 0:02:03.600 --> 0:02:06.720 recession fierce front of center, the FED has its work 0:02:06.760 --> 0:02:09.880 cut out for it. Monetary policy was too easy for 0:02:09.960 --> 0:02:12.440 too long, so they've got to make up some ground 0:02:12.520 --> 0:02:15.320 here to try to stay ahead of it. So, unfortunately, 0:02:15.360 --> 0:02:17.400 I don't think that the news is going to get 0:02:17.400 --> 0:02:19.800 any better over the next month for the Fed in 0:02:19.880 --> 0:02:23.960 terms of inflation. The Investco chief investment officer Lori Brignac, 0:02:24.040 --> 0:02:26.640 making the comments on Bloomberg Business Week catch that program 0:02:26.760 --> 0:02:29.799 weekdays from two the vip M Wall Street Time well, 0:02:29.800 --> 0:02:32.520 the selloff has been widespread John. In fact, more companies 0:02:32.560 --> 0:02:36.120 in the Russell three thousand, excluding financial firms, are trading 0:02:36.200 --> 0:02:40.160 below their cash holdings. Bloomberg's Doug Krisner has more The 0:02:40.280 --> 0:02:43.280 total number has surpassed the month end record set during 0:02:43.320 --> 0:02:46.480 the financial crisis. Smaller cap firms like those in the 0:02:46.560 --> 0:02:50.280 Russell are particularly sensitive to the health of the domestic economy, 0:02:50.639 --> 0:02:53.760 and now as financial conditions tighten, the concern of a 0:02:53.840 --> 0:02:57.120 recession is in sharp relief. In the last session alone, 0:02:57.160 --> 0:02:59.640 the Russell three thousand fell three and a half percent, 0:02:59.800 --> 0:03:03.600 which lowest level since even so writers on the Bloomberg 0:03:03.720 --> 0:03:06.440 m Live blog say when a company's total equity value 0:03:06.639 --> 0:03:10.560 is less than its cash and marketable securities, bargains can 0:03:10.680 --> 0:03:14.120 possibly be found. In New York on dud Prisoner Bloomberg Daybreak. 0:03:14.160 --> 0:03:15.560 All right, Doug, thank you, And it could be another 0:03:15.639 --> 0:03:18.240 volatile day on Wall Street. Today's the quarterly event known 0:03:18.320 --> 0:03:21.040 as triple witching. The three and a half trillion dollar 0:03:21.120 --> 0:03:24.120 options expiration mainly to short covering, and that could bring 0:03:24.240 --> 0:03:27.040 temporary relief to the stock market and meantime, in Asia, 0:03:27.120 --> 0:03:29.760 stocks tumbling to a two year lowest traders fear the 0:03:29.840 --> 0:03:33.800 global rush to hike interustrates may result in an economic downturn. 0:03:34.160 --> 0:03:37.720 Let's get the recap from Bloomberg's Juliet Sally in Singapore. 0:03:37.800 --> 0:03:40.000 Good morning Juliet, Good morning John and Nathan. The m 0:03:40.000 --> 0:03:42.640 s CI Asia Pacific Index felled to its lowest level 0:03:42.680 --> 0:03:45.240 in two years. The index has dropped every day this 0:03:45.400 --> 0:03:48.120 week and is down for a seventh session. That's the 0:03:48.200 --> 0:03:51.120 longest weekly dropped since the onset of the global pandemic. 0:03:51.200 --> 0:03:55.360 In March twenty Japanese shares dropped in tenure yields East 0:03:55.400 --> 0:03:58.600 from twenty sixteen highs as The Bank of Japan's decision 0:03:58.640 --> 0:04:02.160 to keep its ultra loose money tree settings unchanged provided 0:04:02.200 --> 0:04:05.640 limited stimulus as volatility and the yen grows. China and 0:04:05.720 --> 0:04:08.320 Hong Kong stocks gained the only markets in Asia in 0:04:08.400 --> 0:04:11.960 the green this as Beijing's pro growth policy lended support 0:04:12.040 --> 0:04:15.920 to views that their equities will keep out performing in Singapore. 0:04:16.040 --> 0:04:19.320 Juliette Sally Bloomboad daybreak. All right, Juliet, thank you. After 0:04:19.400 --> 0:04:22.000 that Bank of Japan decision, the yen weekend as much 0:04:22.040 --> 0:04:25.839 as one point eight percent. BOJ Governor Harhiko Corona addressed 0:04:25.880 --> 0:04:31.039 the recent sell off in the currency. The recent rapid 0:04:31.120 --> 0:04:34.280 weakening of the yen is negative for the economy as 0:04:34.320 --> 0:04:37.520 it increases uncertainties and companies will have a harder time 0:04:37.600 --> 0:04:41.120 putting together their business plans. Governor Harhiko Kuroda, speaking through 0:04:41.120 --> 0:04:43.880 an interpreter, added a reference to foreign exchange rates to 0:04:44.000 --> 0:04:46.720 its list of risks following the ends rapid weakening to 0:04:46.839 --> 0:04:49.880 a twenty four year low this week. In a europe Christian, 0:04:49.920 --> 0:04:52.640 the Guard has told euro Area of Finance ministers at 0:04:52.680 --> 0:04:56.080 the European Central Banks new anti crisis tool will kick 0:04:56.160 --> 0:04:59.680 in if the borrowing costs for weaker nations rises too 0:04:59.760 --> 0:05:03.680 far or too fast, sources say. At a meeting in Luxembourg, 0:05:04.200 --> 0:05:07.120 Lagar told ministers that the new mechanism will be intended 0:05:07.160 --> 0:05:12.840 to prevent irrational market movements from putting pressure on individual urinations. Well, 0:05:12.920 --> 0:05:15.320 President Biden's weighing in on the economy back here in 0:05:15.360 --> 0:05:18.760 the US, John he says a recession can be avoided. 0:05:19.000 --> 0:05:21.400 Let's get the details live from Bloomberg's need a Young. 0:05:21.440 --> 0:05:24.480 Good morning, Granita, Good morning Nathan. The President is reiterating 0:05:24.560 --> 0:05:27.120 his message that the US is in a stronger position 0:05:27.200 --> 0:05:30.400 than any nation in the world to overcome inflation. And 0:05:30.480 --> 0:05:33.960 while he says the recession is not inevitable, he acknowledges 0:05:34.040 --> 0:05:36.960 that Americans are really down on the state of the country. 0:05:37.360 --> 0:05:39.559 He made these comments in an interview with the AP 0:05:39.880 --> 0:05:43.360 That's his first with a print outlet since taking office, 0:05:43.680 --> 0:05:46.200 and it took place a day after the FED executed 0:05:46.279 --> 0:05:49.360 the biggest interest rate hike in almost three decades in 0:05:49.560 --> 0:05:52.960 order to cool inflation. Live in New York, I'm Reranita 0:05:53.040 --> 0:05:56.559 Young Bloomberg day Break. Thanks. Reactions still pouring into Elon 0:05:56.640 --> 0:06:00.160 Musk's first meeting with Twitter employees, he told staffords they 0:06:00.160 --> 0:06:03.120 shouldn't worry about changes to their jobs once he takes over, 0:06:03.600 --> 0:06:06.400 as long as their work is quote exceptional. Let's get 0:06:06.440 --> 0:06:08.880 more on his remarks and his concerns about fake Twitter 0:06:08.920 --> 0:06:12.359 accounts from Bloomberg's had Ludlow. He said that whether Twitter 0:06:12.440 --> 0:06:15.520 pursues a subscription or an ad model, he's still concerned 0:06:15.520 --> 0:06:19.320 about bots. Nonetheless, and essentially, the goal is to make 0:06:19.360 --> 0:06:22.920 Twitter an expensive platform and otherwise requiring some form of 0:06:22.960 --> 0:06:27.920 payment that disincentivizes BAT activity. During the forty five an 0:06:27.920 --> 0:06:30.960 address to employees, Boomberg's had Ludlow says, Musk did not 0:06:31.080 --> 0:06:34.039 address whether he was committed to the deal market conditions. 0:06:34.279 --> 0:06:37.000 The boos sharply since its forty four billion dollar bid 0:06:37.120 --> 0:06:40.000 to buy Twitter. All right, John Well shares of Adobe, 0:06:40.040 --> 0:06:41.680 We're keeping an eye on those. This morning. They are 0:06:41.800 --> 0:06:45.560 down three per cent. The maker of software for design professionals, 0:06:45.640 --> 0:06:49.320 reduced its annual revenue forecast. Adobe says it's business is 0:06:49.400 --> 0:06:53.040 being affected by currency fluctuations, seasonal shifts in demand, and 0:06:53.200 --> 0:06:55.440 the decision to end sales in Russia and bell roofs 0:06:55.440 --> 0:06:58.760 after the invasion of Ukraine and after yesterday sell off 0:06:58.960 --> 0:07:01.760 the futures. This war in the green dal future is 0:07:01.839 --> 0:07:03.960 up two hundred forty four points, a rise of eight 0:07:04.000 --> 0:07:07.919 tens of a percent. Smp EMNY futures of thirty five points, 0:07:08.120 --> 0:07:11.280 that's up about one percent. The NASDACK futures of one 0:07:11.520 --> 0:07:15.160 D twenty points. That's a rise of one percent. Tenure 0:07:15.280 --> 0:07:18.800 Yale this morning is up to basis points at three one. 0:07:19.000 --> 0:07:24.560 This is Bloomberg Fan's five hour sting on Wall Street. 0:07:24.720 --> 0:07:26.720 Time to bring in Michael barn with more on what 0:07:26.840 --> 0:07:29.840 else is going on in New York and around the world. John, 0:07:29.920 --> 0:07:32.280 Thank you very much, sir. The final Democratic debate in 0:07:32.320 --> 0:07:35.800 the primary campaign for New York governor is over. US 0:07:35.840 --> 0:07:39.560 Representative Tom Swasey and New York City Public Advocate Jamanni 0:07:39.600 --> 0:07:44.720 Williams criticized Governor Cathy hocal strategy toward gun violence. Swazzy 0:07:44.840 --> 0:07:48.920 question HOCl on donations from the National Rifle Association when 0:07:48.960 --> 0:07:53.560 she served in Congress from Tynt. Hocal said that she 0:07:53.800 --> 0:07:56.880 has evolved and that voters are more interested in her 0:07:56.920 --> 0:08:00.440 agenda as governor now rather than her political stands as 0:08:00.480 --> 0:08:04.040 a decade ago. All of the candidates on WNBC were 0:08:04.120 --> 0:08:08.160 asked about their vision to improve the state, including don't 0:08:08.200 --> 0:08:11.640 bet against New York. We've been down before. We will 0:08:11.760 --> 0:08:16.600 come back even stronger. We've always demonstrated our resiliency, our tenacity. 0:08:16.920 --> 0:08:21.080 It's in our DNA's New Yorkers early voting started Saturday. 0:08:21.200 --> 0:08:24.840 In New York, lawmakers heard gripping testimony from top aids 0:08:24.920 --> 0:08:28.200 of then Vice President Pence and President Trump during the 0:08:28.280 --> 0:08:32.120 latest hearing from the January sixth Committee. Rioters came within 0:08:32.280 --> 0:08:35.360 forty feet of pens and former President Trump listened to 0:08:35.480 --> 0:08:39.319 conservative law professor John Eastman's plan to have Pence not 0:08:39.600 --> 0:08:44.160 certify then President elect Biden's win. The committee now wants 0:08:44.200 --> 0:08:47.520 to interview the wife of Supreme Court Justice Clarence Thomas, Jenny, 0:08:47.840 --> 0:08:52.160 after new emails were revealed from the conservative activists. Former 0:08:52.280 --> 0:08:56.440 federal prosecutor Michael Zelden talked about takeaways from the committee 0:08:56.480 --> 0:08:59.720 hearing and the potential legal outcome. I think they're going 0:08:59.760 --> 0:09:02.240 to be doing is trying to prove each of the 0:09:02.360 --> 0:09:06.839 seven prongs of their conspiracy. They're saying President engaged in 0:09:06.880 --> 0:09:10.079 the seventh part conspiracy. The first was the Big Law, 0:09:10.320 --> 0:09:12.880 the second was to replace the acting Attorney General. The 0:09:12.960 --> 0:09:15.440 third was to pressure Pence. The fourth was to pressure 0:09:15.520 --> 0:09:20.400 state officials. The fifth was to do the false elector's scheme, 0:09:20.480 --> 0:09:22.559 the sixth was the violent mob, and the seventh was 0:09:22.960 --> 0:09:26.400 in action. When this was going on, Former federal prosecutor 0:09:26.440 --> 0:09:29.959 Michael Zeldin spoke with Joe Matthew on Bloomberg's Sound on. 0:09:30.559 --> 0:09:33.480 Two people are dead and another wounded when police in Alabama, 0:09:33.559 --> 0:09:36.480 SA gunman opened fire at a church in Vesta v 0:09:36.679 --> 0:09:40.480 f Hills. Police say a suspect is in custody. Democratic 0:09:40.559 --> 0:09:42.920 and Republican senators are at odds over how to keep 0:09:43.000 --> 0:09:46.800 firearms from dangerous people. Lawmakers said they remained divided over 0:09:46.880 --> 0:09:49.600 how to define abuse of dating partners so they could 0:09:49.600 --> 0:09:53.400 be legally barred from purchasing firearms. Global News twenty four 0:09:53.440 --> 0:09:55.840 hours a day on air and on Bloomberg Quick Take, 0:09:56.040 --> 0:09:58.880 powered by more than hundred journalists analysts more than a 0:09:59.080 --> 0:10:02.240 d twenty countries. Michael Bard, This is Bloomberg, John, Michael, 0:10:02.280 --> 0:10:07.520 Thank you, Case five Center of All Street Time. Now 0:10:07.600 --> 0:10:10.800 for the Bloomberg Sports Update and Good morning John Stethshower. 0:10:10.800 --> 0:10:13.120 All right, Good morning John. The Golden State Warriors had 0:10:13.200 --> 0:10:16.079 that run of three NBA championships, five straight trips to 0:10:16.120 --> 0:10:18.320 the finals, and then it appeared that run was over 0:10:18.440 --> 0:10:22.120 with injuries and Kevin Durants affection to Brooklyn. Two years ago. 0:10:22.120 --> 0:10:23.640 They were the worst team in the NBA. And yet 0:10:23.720 --> 0:10:25.959 there were the Warriors last night, winning Game six in 0:10:26.080 --> 0:10:29.120 Boston one oh three to ninety, winning the Finals four 0:10:29.160 --> 0:10:31.200 to two. The Finals where every game was decided by 0:10:31.280 --> 0:10:33.760 ten or more points that it never happened before. Warriors 0:10:33.840 --> 0:10:37.000 led by twenty two. Celtics cut that deficit to eight. 0:10:37.320 --> 0:10:39.839 Steph Curry made sure it got no closer. Curry was 0:10:39.840 --> 0:10:42.719 amazing thirty four points. He was the Finals m v 0:10:42.840 --> 0:10:45.120 P Yankees and Mets with one run wins at home 0:10:45.240 --> 0:10:49.880 for the Yanks. That win came at the end Sight Center. 0:10:50.080 --> 0:10:55.320 It is high. That is fuck that don't win the game. 0:10:56.800 --> 0:11:02.040 Anthony rizz Oh hit a one out, nine innings walk 0:11:02.120 --> 0:11:05.839 off home run the right center video and Yankees beating 0:11:05.880 --> 0:11:08.720 the Raised two to one. W f ann a game 0:11:08.760 --> 0:11:10.880 of a total of only seven hits. Yanks had to 0:11:10.920 --> 0:11:13.280 scratched the star of Luis Sevrena. He's got COVID, so 0:11:13.360 --> 0:11:16.000 they used three young pitchers and together they allowed only 0:11:16.120 --> 0:11:19.200 three hits and the Yankees moved thirty one games over 0:11:19.280 --> 0:11:21.680 five hundred. The Mets trail Milwaukee for to one. Mark 0:11:21.720 --> 0:11:24.640 Canna tied the game to run Homer fifth inning, Mets 0:11:24.679 --> 0:11:27.520 top the Brewers at City Field five before a Canadian 0:11:27.600 --> 0:11:30.000 Adam hadwin as the US Open leader at brook line 0:11:30.040 --> 0:11:32.560 of four under sixty six. Rory McElroy in the group 0:11:32.640 --> 0:11:35.240 that trails by one shot. Dustin Johnson part of a 0:11:35.320 --> 0:11:38.480 larger group two back. A rough fifty second birthday for 0:11:38.520 --> 0:11:40.600 Phil Nicholson has never won the Open. He's finished second 0:11:40.720 --> 0:11:43.559 six times. He just returned after four months off and 0:11:43.679 --> 0:11:47.640 Nicholson has twelve shots behind John dash Aware bloom Bird Sports. John, 0:11:47.720 --> 0:11:50.200 all right, thanks John, ahead of the Open on Wall Street. 0:11:50.240 --> 0:11:53.439 Down futures after yesterdays sell off up two hundred sixty 0:11:53.480 --> 0:11:57.080 seven points, smp emity futures, they're up thirty seven points 0:11:57.200 --> 0:11:59.839 right now one percent. Ryan's nastday futures up one h 0:12:00.200 --> 0:12:06.839 thirty two points. You're listening to Bloomberg day Break. Well, 0:12:06.880 --> 0:12:08.959 traders may have come to grips with the path a 0:12:09.040 --> 0:12:12.120 head for the Federal Reserve. So what's next. We're to 0:12:12.160 --> 0:12:16.960 speak with Patrick Armstrong, the chief investment officer at Blerini. Well, 0:12:17.440 --> 0:12:23.199 that's just to hit of Bloomberg day Break, Markets headlines 0:12:23.280 --> 0:12:26.240 and breaking news twenty four hours a day at Bloomberg 0:12:26.320 --> 0:12:29.720 dot Com, the Bloomberg Business apt and at Bloomberg Cucktape. 0:12:29.920 --> 0:12:38.960 This is a Bloomberg Business lash. I'm Nathan Hagar. Futures 0:12:39.000 --> 0:12:41.560 are on the rise this morning, hinting that stocks could 0:12:41.600 --> 0:12:43.199 be set for a relief rally at the end of 0:12:43.240 --> 0:12:47.160 the worst week for the SMP since March of saw 0:12:47.280 --> 0:12:50.520 the benchmark index center a bear market mid fears of 0:12:50.600 --> 0:12:53.360 a growing recession. Growing fears of recession. We checked the 0:12:53.360 --> 0:12:55.960 markets for every fifteen minutes during the trading day on Bloomberg. 0:12:56.400 --> 0:12:58.720 Right now, SMP futures are up thirty seven point. Staff 0:12:58.720 --> 0:13:01.120 futures up. Tune A six dance deck features are hired 0:13:01.120 --> 0:13:03.480 by a hundred twenty eight points. Contain Your Treasury is 0:13:03.520 --> 0:13:05.880 down six thirty seconds. Yield three point to one percent 0:13:05.960 --> 0:13:08.640 yield on the two year three point one six per cent. 0:13:09.040 --> 0:13:10.880 Nim X Scrude is up nine tenths per cent or 0:13:10.880 --> 0:13:13.200 a dollar three at a hundred eighteen dollars sixty two 0:13:13.280 --> 0:13:15.679 cents a barrel. Comics gold is up two tenths per 0:13:15.720 --> 0:13:18.160 cent or four dollars twenty cents at eighteen fifty ten. 0:13:18.200 --> 0:13:20.800 Announced the Euro is at one point zero five three 0:13:20.880 --> 0:13:23.360 five against the dollar. The en one thirty four point 0:13:23.480 --> 0:13:26.040 five three. At nine fifteen Wall Street Time, we get 0:13:26.040 --> 0:13:30.360 reports on industrial production, capacity utilization, and manufacturing production. At 0:13:30.400 --> 0:13:33.040 ten am. It is the leading index. That's a Bloomberg 0:13:33.080 --> 0:13:35.720 business flash. Now here's Michael Barr with more on what's 0:13:35.720 --> 0:13:38.280 going on around the world. Good morning, Michael, Good morning Nathan. 0:13:38.360 --> 0:13:41.679 The next January six committee hearing is on Tuesday. The 0:13:41.760 --> 0:13:45.200 wife of Supreme Court Justice Clarence Thomas, Jenny, is being 0:13:45.240 --> 0:13:48.080 called to answer questions before the panel about her role 0:13:48.120 --> 0:13:52.120 in the effort to overturn the twenty election. Prospects for 0:13:52.200 --> 0:13:57.120 a quick bipartisan deal on gun safety legislation dimmed Senate negotiators. 0:13:57.240 --> 0:14:00.839 A one unresolved issue is how to those a so 0:14:01.080 --> 0:14:04.840 called boyfriend loophole aimed at borrowing abuse of dating partners 0:14:05.040 --> 0:14:09.400 from having guns. The Warriors are the twenty two NBA champions. 0:14:09.440 --> 0:14:12.160 They beat the Celtics in Game six, one oh three nine. 0:14:12.640 --> 0:14:15.520 In baseball, the Yankees and Mets won. The A's beat 0:14:15.600 --> 0:14:19.400 the Red Sox for three, The Orioles won, the Nationals lost. 0:14:19.680 --> 0:14:22.320 Global News twenty four hours a day on air and 0:14:22.560 --> 0:14:26.080 on Bloomberg Quickdake powered by more than twenty seven hundred 0:14:26.160 --> 0:14:29.400 journalists and analysts and more than one twenty countries. Michael 0:14:29.440 --> 0:14:32.080 Barr and this is Bloomberg, John, Michael, thank you, five 0:14:32.160 --> 0:14:34.720 twenty on Wall Street. We are live on the Bloomberg 0:14:34.800 --> 0:14:38.000 interr Aunt to Broker Studios. This is Bloomberg day Break. 0:14:38.640 --> 0:14:42.320 SMP five hundred has suffered its worst week since Smart 0:14:42.480 --> 0:14:46.359 twenty twenty a temple three point three percent in yesterday's 0:14:46.480 --> 0:14:50.880 cash market, the NASDAG one that dropped four percent yesterday. 0:14:51.320 --> 0:14:53.280 Let's get you set up for the training day head now. 0:14:53.400 --> 0:14:56.640 We're joined by Patrick Armstrong, the chief investment officer at 0:14:56.760 --> 0:15:00.600 Plurimi Wealth. Patrick, After Wednesday, what happened to the initial 0:15:00.680 --> 0:15:04.800 relief after the Fed meeting Wednesday? I think it just 0:15:05.000 --> 0:15:08.520 dawned with a lot of people that the Fed seemed 0:15:08.520 --> 0:15:10.920 to indicate they weren't going to blink and that they 0:15:10.960 --> 0:15:14.280 would be willing to cause a recession to achieve their 0:15:14.440 --> 0:15:18.040 inflation targets. And I still think they will blink when 0:15:18.080 --> 0:15:20.760 push comes to shove. But the market started to price 0:15:20.880 --> 0:15:23.920 in recession during yesterday, where you can see that from 0:15:23.960 --> 0:15:28.080 actually treasuries UM got a bit of a rally late 0:15:28.120 --> 0:15:30.360 in the day as equities continued to sell off, oil 0:15:30.400 --> 0:15:33.760 sold off. Both of those basically points of the market 0:15:33.800 --> 0:15:37.120 pricing and higher recessionary chances. Does the FED care about 0:15:37.160 --> 0:15:42.680 the markets anymore, well, especially the risk assets. They must 0:15:42.880 --> 0:15:44.840 think about it, but I don't think they're being driven 0:15:44.880 --> 0:15:47.560 by the way they they were in when Powell did 0:15:47.640 --> 0:15:50.160 is one eighty. That was driven by the equity market. Now, 0:15:50.560 --> 0:15:54.400 I think they've decided inflation so far past their targets. 0:15:54.520 --> 0:15:57.000 They can't see a bother to worry about equities at 0:15:57.080 --> 0:15:59.920 this point. So I think inflation is first and form 0:16:00.040 --> 0:16:03.080 most in their minds. Unemployment number two and equities are 0:16:03.160 --> 0:16:05.280 distant third at this point, Do you have any thoughts 0:16:05.360 --> 0:16:08.480 on whether or not policy can have a meaningful impact 0:16:08.640 --> 0:16:11.360 on the inflation we have? I mean, filling up the 0:16:11.400 --> 0:16:13.560 car and that was seventy bucks this morning. The food 0:16:13.640 --> 0:16:19.240 store that was another two hundred. Yeah. The unfortunate consequence, Um, 0:16:19.560 --> 0:16:22.640 it's a pretty blunt instrument to deal with inflation is 0:16:22.680 --> 0:16:25.680 interest rates. It's the way it does is it kills demands, 0:16:25.760 --> 0:16:28.480 It creates unemployment. When you don't have a job, you're 0:16:28.520 --> 0:16:30.760 not filling up your car as much. Those kind of things. 0:16:30.800 --> 0:16:34.560 So there's some pretty awful consequences from focusing on the 0:16:34.680 --> 0:16:37.040 demand side of things of the inflation when it's really 0:16:37.120 --> 0:16:39.560 the supply side of things creating at least half of 0:16:39.640 --> 0:16:42.320 the inflation right now would be supply bottlenecks, and FED 0:16:42.400 --> 0:16:44.600 policy is impotent to deal with those kind of things. 0:16:44.720 --> 0:16:47.880 But it seems for the moment they've decided this is 0:16:47.960 --> 0:16:50.480 the policy they're going to do to fight inflation, and 0:16:50.720 --> 0:16:53.880 they think their positioned to do that. So is risk 0:16:53.960 --> 0:16:58.120 reward looking any more attractive at these levels? I had 0:16:58.200 --> 0:17:01.360 bought equities yesterday. I bought Activision, which has got a 0:17:01.440 --> 0:17:04.560 cash offer from Microsoft, which should close at June next year, 0:17:04.600 --> 0:17:07.720 and you're getting a return effect goes through. I bought 0:17:07.800 --> 0:17:12.200 some agry business equities that looked pretty compelling to me. Mosaic, 0:17:12.280 --> 0:17:15.000 the largest podcast reserves, is trading at about eight times 0:17:15.080 --> 0:17:18.400 earnings right now. And corporate bonds for the first time 0:17:18.560 --> 0:17:22.120 in many many years. Um, well maybe since they looked 0:17:22.119 --> 0:17:24.399 attractive as well right at the bottom. But you're getting 0:17:24.960 --> 0:17:30.440 yield above excuse me, expected inflation now on investment grade debts, 0:17:30.440 --> 0:17:33.160 so I actually think risk return corporate bonds investment grade 0:17:33.200 --> 0:17:36.200 looks pretty attractive now as well. Now I have investors 0:17:36.240 --> 0:17:39.680 adjusted to the tighter monetary policy, do they now have 0:17:39.880 --> 0:17:46.360 to start focusing on adjusting to a different earnings picture ahead. Um, 0:17:47.080 --> 0:17:51.160 it's really shocking me how analyst expectations. They came into 0:17:51.200 --> 0:17:53.240 this year expecting the S and P five to make 0:17:53.240 --> 0:17:55.879 two hundred and twenty dollars a share. Analysts are now 0:17:55.960 --> 0:17:58.080 expecting two hundred and twenty eight dollars a share in 0:17:58.160 --> 0:18:02.680 two So earnings estimates haven't rolled over. I do think 0:18:02.760 --> 0:18:05.600 that has to happen based on a slowing economy and 0:18:05.840 --> 0:18:08.239 probably a bit of a margin squeeze on a lot 0:18:08.320 --> 0:18:12.840 of companies. SMP delivered twelve point seven percent profit margin, 0:18:12.880 --> 0:18:17.679 which is unprecedented, and anytimes you say unprecedented, that's usually 0:18:18.119 --> 0:18:20.359 the period you start to get a mean reversion. So 0:18:20.400 --> 0:18:24.160 I wouldn't be surprised to see margin expectations come down 0:18:24.240 --> 0:18:27.480 and earnings per share expectations come down. But I think 0:18:27.520 --> 0:18:30.720 the markets front running earnings forecast at this point where 0:18:30.720 --> 0:18:35.600 it sold off while earnings have been revised higher this year, Well, 0:18:35.800 --> 0:18:38.560 is maybe an unanswerable question at this point, at least 0:18:38.600 --> 0:18:41.439 with any degree of accuracy. But is it a bottom 0:18:41.480 --> 0:18:46.520 for stocks that we've already passed um. I actually think 0:18:46.640 --> 0:18:49.119 we might be around the bottom now, but there's going 0:18:49.160 --> 0:18:51.200 to be a lot of moving parts. I think the 0:18:51.320 --> 0:18:56.840 stocks that are growing earnings are beneficiaries of their own 0:18:56.880 --> 0:18:59.360 assets that are in high demands. So I think commodity 0:18:59.440 --> 0:19:02.000 stocks have really be sold off over the last month. 0:19:02.040 --> 0:19:04.560 They've got great returns here today. I do think there's 0:19:04.560 --> 0:19:06.359 going to be some buy the dips there and I 0:19:06.400 --> 0:19:09.320 think they're going to blow away earnings expectations. But I 0:19:09.400 --> 0:19:12.320 think that the no earnings tech type companies, I think 0:19:12.400 --> 0:19:14.360 they still have a lot further to fall. I think 0:19:14.400 --> 0:19:19.040 there's still flocky valuations despite sell offs in a lot 0:19:19.119 --> 0:19:21.480 of those kind of companies. I think there may still 0:19:21.520 --> 0:19:24.000 be another seventy in those kind of stocks to fall. 0:19:24.400 --> 0:19:26.639 All right, Patrick, thanks a lot of appreciate that. Patrick 0:19:26.800 --> 0:19:31.080 Armstrong always a pleasure the chief investment officer at Flaimi Wealth. 0:19:31.520 --> 0:19:33.760 And as we look at futures after yesterday's sell off, 0:19:34.000 --> 0:19:37.840 smp EMUNI futures right now thirty five points higher, that's 0:19:37.880 --> 0:19:40.960 up one percent, the DAL futures of two D two 0:19:41.040 --> 0:19:43.440 points that's up eight sense of a percent, and that 0:19:43.560 --> 0:19:47.440 as the community futures one six points higher, a rimes 0:19:47.480 --> 0:19:49.920 at one point one percent. As we look at the 0:19:50.040 --> 0:19:53.480 treasuries right now, the ten year yield three one, that's 0:19:53.560 --> 0:19:57.359 up two basis points. Two year three sixteen, that's up 0:19:57.400 --> 0:20:06.280 seven basis points. You're listening the Bloomberg Daybreak and the 0:20:06.280 --> 0:20:10.520 Bloomberg Weather from meteorologist Rob Carolin. Partly studied, maybe and 0:20:10.680 --> 0:20:15.160 isolated afternoon thunderstorm. The high temperature about ninety today were 0:20:15.240 --> 0:20:25.760 to partly cloudy tonight blows in the mid sixties. Broadcasting 0:20:25.880 --> 0:20:29.600 live from the Bloomberg Interactive Broker Studio in New York, 0:20:29.720 --> 0:20:34.359 Bloomberg E Living Freedom to Washington, d C. Bloomberg to Boston, 0:20:34.480 --> 0:20:37.880 Bloomberg one O six one to San Francisco, Bloomberg nine 0:20:38.000 --> 0:20:41.200 sixty to the Country, Sirius XM Chado one nine and 0:20:41.320 --> 0:20:44.640 around the globe, the Bloomberg Business app and Bloomberg Radio 0:20:44.800 --> 0:20:53.639 dot Com. This is Bloomberg Daybreak. He's five thirty on 0:20:53.760 --> 0:20:56.439 Wall Street. Good morning. I'm John Tucker, I'm Nathan Hagar. 0:20:56.480 --> 0:20:58.359 We're just about four hours away from the open of 0:20:58.440 --> 0:21:00.119 US trading. Let's get you up to date on the 0:21:00.200 --> 0:21:02.439 news you need to know this hour. US features are 0:21:02.520 --> 0:21:05.080 higher as we close out this trading week. Yesterday, the 0:21:05.240 --> 0:21:08.440 SMP five hundred closed at an eighteen month low, market 0:21:08.480 --> 0:21:11.640 surrounding off a week highlighted by interest rate increases, including 0:21:11.680 --> 0:21:16.040 the Fed's biggest move since Greg Jensen, co Chief investment 0:21:16.080 --> 0:21:18.920 Officer at Bridgewater Associate says the Fed has a difficult 0:21:19.000 --> 0:21:22.600 job ahead. They're serious about two percent inflation. They're gonna 0:21:22.600 --> 0:21:25.520 have to crack the U S economy hard, and it's 0:21:25.560 --> 0:21:28.040 then gonna take the easing tops set that and then 0:21:28.119 --> 0:21:30.440 the recovery before you see a bottom. So that's a 0:21:30.680 --> 0:21:33.719 that's a long process. Um In the end, we think 0:21:33.760 --> 0:21:38.280 the Federal blink and choose to sustain asset prices lower 0:21:38.359 --> 0:21:41.680 than they are today. Greg Jensen at Bridgewater Associate says 0:21:41.720 --> 0:21:44.719 stocks may still fall lower because unlike other bear markets, 0:21:44.800 --> 0:21:49.440 there's not support from an accommodative accommodative central bank. To 0:21:49.600 --> 0:21:51.960 other market notes, this morning, before the opening bail to 0:21:52.000 --> 0:21:55.360 fetch here, Jpal makes welcoming parks at in the inaugural 0:21:55.520 --> 0:21:58.680 conference or the international role of the dollar today also 0:21:58.760 --> 0:22:00.920 triple witching Friday, the three and a half trillion on 0:22:01.000 --> 0:22:04.320 our options expiration may lead to short covering that could 0:22:04.400 --> 0:22:07.680 bring temporary relief for the stock market when the yen 0:22:07.960 --> 0:22:10.920 is weaker. This morning, John, after Japan retained super easy 0:22:11.000 --> 0:22:14.040 monetary policy and yield curve control, defying pressure to track 0:22:14.080 --> 0:22:16.879 a global trend towards tighter monetary policy and bank You're 0:22:16.920 --> 0:22:19.400 in the US. President Biden weighing in on the economy, 0:22:19.680 --> 0:22:22.520 he says the recession can be avoided. Let's get the 0:22:22.680 --> 0:22:25.960 details now live from Bloombergh redating on Good Morning Reed, 0:22:26.040 --> 0:22:29.000