WEBVTT - Bloomberg Daybreak: January 6, 2023 - Hour 1 (Radio) 0:00:02.160 --> 0:00:04.880 Live from the Bloomberg Interact at Berger Studios. Is this 0:00:04.960 --> 0:00:09.039 Bloomberg Gay Break for Friday, January six three? Coming up 0:00:09.080 --> 0:00:12.480 this hour, Kevin McCarthy's fights have become house Speaker drags 0:00:12.520 --> 0:00:15.440 into a fourth day. Ball Street braces for its biggest 0:00:15.440 --> 0:00:18.840 economic report of the new year. US authorities ramp up 0:00:18.880 --> 0:00:22.360 the pressure on Sam bankman Fried's inner circle, and Samsung's 0:00:22.360 --> 0:00:25.360 profit falls the most in over a decade. Thousands of 0:00:25.440 --> 0:00:28.200 nurses at New York City hospitals are poised to strike 0:00:28.280 --> 0:00:31.280 on Monday. Plus, today marks the two year anniversary of 0:00:31.280 --> 0:00:35.080 the US Capitol Riot Michael Laaren. More ahead, I'm John 0:00:35.080 --> 0:00:37.640 Stas Showard Sports. The NFL makes a decision on the 0:00:37.680 --> 0:00:40.880 Bill's Bengals game the Rangers one in Montreal, losses for 0:00:40.920 --> 0:00:46.400 the Devil's and Islanders. That's all train ahead on Bloomberg 0:00:46.479 --> 0:00:51.520 Daybreak on Bloomberg eleven three on New York Bloomberg one, Washington, 0:00:51.640 --> 0:00:55.280 d C, Bloomberg one oh six one, Boston, Bloomberg nine 0:00:55.320 --> 0:00:59.640 sixties and Francisco Sirius XAM one nineteen and around the 0:00:59.680 --> 0:01:03.400 world Bloomberg Radio dot Com and via the Bloomberg Business. 0:01:03.400 --> 0:01:10.319 At good Morning, I'm Nathan Hagar and I'm Karen. Moscow 0:01:10.440 --> 0:01:13.720 and US Dock Index futures are little change this morning. 0:01:13.720 --> 0:01:15.959 We check the markets all day long here on Bloomberg 0:01:15.959 --> 0:01:19.640 with SNP and DAL futures both little change. Nasday futures 0:01:19.680 --> 0:01:22.919 no dragging down a quarter percent or twenty eight points. 0:01:23.000 --> 0:01:25.600 Tenure Treasury down five thirty seconds. You have three point 0:01:25.640 --> 0:01:27.880 seven three per cent and the yield on the two 0:01:27.920 --> 0:01:30.959 year four point four seven percent. Nathan, Karen. We'll have 0:01:31.040 --> 0:01:34.039 more on markets and today's jobs report in just a minute, 0:01:34.040 --> 0:01:36.120 but first we are heading into the fourth day of 0:01:36.120 --> 0:01:39.680 the new Congress and the House remains without one key 0:01:39.800 --> 0:01:43.800 job filled. That would be speaker. Republican leader Kevin McCarthy 0:01:43.880 --> 0:01:46.000 is still shy the votes needed to take the gavel, 0:01:46.040 --> 0:01:49.600 and Amy Morris has the latest from our Bloomberg newsroom 0:01:49.600 --> 0:01:54.680 in Washington that's adjourned last night after a historic eleventh vote, 0:01:54.680 --> 0:01:58.160 about twenty Republicans still refusing the cast their ballots for McCarthy, 0:01:58.520 --> 0:02:02.160 saying they want change in Washington. McCarthy has already agreed 0:02:02.200 --> 0:02:04.480 to a rules change allowing just one member to call 0:02:04.560 --> 0:02:07.280 for a vote to oust the sitting speaker. Andy agreed 0:02:07.320 --> 0:02:09.480 to allow for more members of the Freedom Caucus to 0:02:09.480 --> 0:02:12.080 serve on the House Rules Committee, but so far. Matt 0:02:12.160 --> 0:02:15.160 Rosedale of Montana says it's not enough. We need to 0:02:15.200 --> 0:02:20.560 have change. We need to fix this broken system. Republican 0:02:20.600 --> 0:02:23.120 Congressman elect Mike Lawler of New York says the party 0:02:23.160 --> 0:02:25.800 can't let a small group of members dictate terms for 0:02:25.960 --> 0:02:30.160 everyone else. The Freedom Caucus thought that Kevin's support would 0:02:30.200 --> 0:02:33.280 start to fold, uh, and that has not happened. House 0:02:33.360 --> 0:02:37.120 lawmakers reconvene at noon today in Washington. I'm Amy Morris, 0:02:37.120 --> 0:02:39.440 Bloomberg Daybreak. All right, Amy, thank you. It will be 0:02:39.480 --> 0:02:41.799 following the next round of votes throughout the day here 0:02:41.800 --> 0:02:45.440 on Bloomberg Radio. Meantime, another major event in Washington takes 0:02:45.440 --> 0:02:48.040 place at eight thirty am Wall Street time. That's when 0:02:48.080 --> 0:02:51.680 the December JOMPS report is released. Economy is forecast again 0:02:51.720 --> 0:02:54.280 of two hundred two thousand jobs and an unemployment rate 0:02:54.280 --> 0:02:57.560 holding study at three point seven percent. Here with Morris, 0:02:57.560 --> 0:03:02.320 Bloomberg Economics corresponded. Michael McKee, economist, think hiring will slow 0:03:02.440 --> 0:03:06.480 dramatically and unemployment will jump higher. Just not yet. Even 0:03:06.520 --> 0:03:09.200 though the Fed has been raising rates aggressively, it hasn't 0:03:09.240 --> 0:03:12.079 slowed the economy enough to affect the labor market. FED 0:03:12.160 --> 0:03:15.960 officials say that shows no recession is imminent. They also 0:03:16.000 --> 0:03:19.320 worry it means continued inflation pressure. There are not enough 0:03:19.360 --> 0:03:23.119 workers for open jobs, which means employers have to raise wages. 0:03:23.680 --> 0:03:27.359 That's particularly true for service industries, and that makes December 0:03:27.400 --> 0:03:31.080 service industry jobs and earnings key numbers for FED officials 0:03:31.360 --> 0:03:34.520 as they decide how high they have to push interest rates. 0:03:34.880 --> 0:03:37.600 Michael McKee, Bloomberg, Gabriak, and Mike the Fed will be 0:03:37.640 --> 0:03:40.960 paying close attention to today's jobs reports. St. Louis President 0:03:41.040 --> 0:03:43.520 James Bullard says interest rates are getting close to a 0:03:43.600 --> 0:03:46.200 level that could be high enough to bring down inflation. 0:03:46.920 --> 0:03:48.640 The point of this is that we've gone all the 0:03:48.680 --> 0:03:53.600 way back now to the pre inflation shock level of 0:03:53.640 --> 0:03:58.320 inflation expectations. UH macro theories tell us that that boat 0:03:58.400 --> 0:04:01.320 is very well for the future of an actual inflation. 0:04:01.400 --> 0:04:07.440 So this is a good signal for disinflation in St. Louis. 0:04:07.440 --> 0:04:09.520 FED President Jim Bullard is one of the more hawkish 0:04:09.560 --> 0:04:11.400 members of the FED, but he is not a voting 0:04:11.400 --> 0:04:13.920 member on the f o MC this year. Still, Nathan, 0:04:14.000 --> 0:04:17.280 higher interest rates are not yet having a major impact 0:04:17.279 --> 0:04:19.960 on the economy. And that's the view from Carlyle Managing 0:04:19.960 --> 0:04:23.560 Director and head of Global Research Jason Thomas. The economy 0:04:23.600 --> 0:04:25.640 seems to be heading for an iceberg in the form 0:04:25.680 --> 0:04:28.520 of higher interest rates. Those higher interest rates have really 0:04:28.600 --> 0:04:32.200 not taken effect as yet for most borrowers. It's really 0:04:32.240 --> 0:04:35.600 the December nineteen reference date. So as of Q one 0:04:36.480 --> 0:04:39.960 three floating rate corporate borrowers are going to face UH 0:04:40.160 --> 0:04:43.480 debt service costs that are about fifty to sixty higher 0:04:44.120 --> 0:04:47.520 than they experienced just six months ago. Carlyles Jason Thomas 0:04:47.520 --> 0:04:49.880 expects the Fed to raise rates by twenty five basis 0:04:49.880 --> 0:04:52.000 points at each of its next two meetings. Have you 0:04:52.120 --> 0:04:54.800 that's in line with expectations on the street. Well. The 0:04:54.839 --> 0:04:58.160 prospect of higher rates Karen helped send stocks lower yesterday. 0:04:58.200 --> 0:05:01.080 All three major indexes lost at least one percent after 0:05:01.160 --> 0:05:04.000 hiring numbers surpassed estimates in the A, d P, and 0:05:04.200 --> 0:05:07.880 jobless claims, reports Sam Stovall, as chief investment strategist at 0:05:07.880 --> 0:05:10.159 c f R A. It seems as if we are 0:05:10.320 --> 0:05:13.840 heading into three the way a lot of strategists have 0:05:13.960 --> 0:05:16.719 been predicting where it's going to be A tale of 0:05:16.839 --> 0:05:19.800 two halves, where the first half is likely to be 0:05:19.880 --> 0:05:24.000 challenging with high volatility, retest of the October low, maybe 0:05:24.040 --> 0:05:27.440 even a new low set. But then investors look across 0:05:27.480 --> 0:05:30.520 the valley and we start to see a recovery in 0:05:30.560 --> 0:05:33.400 the second half. C A. Sam Stovall says the FED 0:05:33.440 --> 0:05:36.919 could pivot and start cutting rates around December. Well. Turning 0:05:36.960 --> 0:05:40.000 to the ft X saga now, Nathan us authorities are 0:05:40.000 --> 0:05:42.800 renting up pressure on the inner circle of fd X 0:05:42.920 --> 0:05:45.919 co founder Sam Bankman Freed, and we get the latest 0:05:45.960 --> 0:05:49.479 live at Bloomberg Steve Rappaport at Steve good Morning, Good morning, Karen, 0:05:49.520 --> 0:05:52.719 and Nathan. The plot thickens as prosecutors turn their attention 0:05:52.720 --> 0:05:56.600 to another associative, Bankman Freed. They're investigating former ft X 0:05:56.680 --> 0:05:59.520 engineering director ni Shot Singh and what role, if any, 0:05:59.560 --> 0:06:02.200 he played in the crypto company's demise. Singh has not 0:06:02.240 --> 0:06:05.080 been accused of wrongdoing, and it's unclear if he's cooperating. 0:06:05.320 --> 0:06:08.680 Prosecutors already have two people from SPFS Orbit in their corner, 0:06:08.880 --> 0:06:11.599 Caroline Ellison and Gary Wang, pled guilty to fraud and 0:06:11.640 --> 0:06:14.520 are working with the government. The question now, will sing 0:06:14.720 --> 0:06:18.919 also sing live in New York. I'm Steve Rappaport, Bloomberg Daybreak. Okay, Steve, 0:06:19.000 --> 0:06:21.840 thank you. Turning to earnings now, we've got a downbeat 0:06:21.880 --> 0:06:26.120 assessment from Samsung Electronics. Overnight profit fell by the most 0:06:26.120 --> 0:06:28.039 and more than a decade, in the sign that the 0:06:28.040 --> 0:06:32.120 economic slowdown maybe hurting electronics demand more than expected. Samsung's 0:06:32.160 --> 0:06:35.440 operating profit plunged sixty cent thanks to week demand for 0:06:35.520 --> 0:06:39.320 memory ships, smartphones and displays, and that holiday travel meltdown 0:06:39.360 --> 0:06:43.000 is prompting Southwest Airlines to revive its financial outlook before 0:06:43.160 --> 0:06:46.720 reporting earnings. The airline canceling almost sixteen thousand flights over 0:06:46.800 --> 0:06:49.760 eight days around the holidays. Now, Southwest says it is 0:06:49.800 --> 0:06:54.000 assessing the cost of flight disruptions and compensation to passengers 0:06:54.000 --> 0:06:57.880 for hotels and meals. Local headlines straight ahead, and this 0:06:58.279 --> 0:07:05.320 is Bloomberg, thanksparing its forty three degrees in Central Park. 0:07:05.600 --> 0:07:07.599 Can have some scattered showers this morning, but they should 0:07:07.640 --> 0:07:09.960 end by this afternoon. We'll top out near fifty degrees 0:07:10.040 --> 0:07:13.040 mid thirties tonight ahead of a cooler but nice weekend. 0:07:13.200 --> 0:07:14.800 It's time to look at some of the other stories 0:07:14.800 --> 0:07:16.600 making news in New York and around the world. For 0:07:16.600 --> 0:07:19.400 that we bring in Bloomberg's and Michael bar Happy Friday, Michael, 0:07:19.480 --> 0:07:22.280 Happy Friday to you, Nathan. Thousands of New York City 0:07:22.360 --> 0:07:25.760 nurses are poised to strike on Monday. They are protesting 0:07:25.840 --> 0:07:30.840 staffing levels they say create unsafe conditions for patients. Five institutions, 0:07:30.880 --> 0:07:34.280 including Mount Sinai Health Systems, are still in talks toward 0:07:34.320 --> 0:07:36.840 a resolution, but about ten thousand members of the New 0:07:36.920 --> 0:07:41.040 York State Nurses Association three others have reached tentative agreements. 0:07:41.320 --> 0:07:44.440 Today it marks two years since the January six attack 0:07:44.560 --> 0:07:47.920 on the US Capitol. Among the victims as Capitol police 0:07:47.920 --> 0:07:52.200 officer Brian Sicknik, his longtime partner is suing former President 0:07:52.200 --> 0:07:55.320 Trump and two people in the crowd that day for 0:07:55.440 --> 0:07:59.160 his death. Today and award will also be presented to 0:07:59.200 --> 0:08:02.600 Sicknecks family. Another officer who was at the Capitol that 0:08:02.720 --> 0:08:06.120 day was Harry Dunn, who says he suffers from PTSD. 0:08:06.640 --> 0:08:10.080 Dunn says, all eyes are on the Justice Department. They're 0:08:10.080 --> 0:08:14.160 the ones who can bring forth accountability. There were criminal 0:08:14.200 --> 0:08:17.760 things that the former president has done. I don't see 0:08:17.760 --> 0:08:22.400 how you cannot hold him accountable for that day. Officer 0:08:22.520 --> 0:08:25.720 Dun's full interview while their Sunday on ABC's This Week 0:08:25.760 --> 0:08:29.320 Heard on Bloomberg, Attorney General Mary Garland says over four 0:08:30.000 --> 0:08:33.200 people pleaded guilty the federal charges and the riot. New 0:08:33.240 --> 0:08:36.360 evidence in the killings of four University of Idaho students 0:08:36.360 --> 0:08:39.079 has come to light. A newly released half of David 0:08:39.120 --> 0:08:43.600 reveals police identify the suspect, twenty eight year old Brian Coburger, 0:08:43.640 --> 0:08:47.640 by tracking his car on surveillance cameras. Coburger made his 0:08:47.679 --> 0:08:50.800 first court appearance in Idaho yesterday to face four charges 0:08:51.040 --> 0:08:54.000 a first degree murder. He did not inter aptly and 0:08:54.160 --> 0:08:58.079 was ordered hell without bail. Russian President Vladimir Putin's proposed 0:08:58.080 --> 0:09:01.719 thirty six hours cease fire drawn a cold shoulder from 0:09:01.720 --> 0:09:04.760 the US and Ukraine, Bloomberg said Baxter as the story, 0:09:05.080 --> 0:09:10.760 President Joe Biden says hypocrisy. I'm reluctant respond anything. Prutin says, 0:09:10.840 --> 0:09:15.480 I found it interesting. He was ready to um bomb 0:09:15.600 --> 0:09:20.720 hospitals and nurseries and hum churches, and he says Plutin 0:09:20.840 --> 0:09:24.400 is just trying to find some oxygen. Biden also says 0:09:24.400 --> 0:09:27.520 the US, Germany and France are sending some heavy artillery 0:09:27.679 --> 0:09:30.240 Ukraine that will arrive within months, in addition to the 0:09:30.240 --> 0:09:33.920 Patriot missiles in San Francisco. I'm at Baxter. Bloomberg Daybreak 0:09:33.920 --> 0:09:36.079 Global emes twenty four hours a day on air and 0:09:36.240 --> 0:09:38.880 on Bloomberg Quick Take, powered by more than twenty seven 0:09:38.920 --> 0:09:41.640 hundred journalists and analysts more than a hundred twenty countries. 0:09:41.880 --> 0:09:44.920 I'm Michael Barr. This is Bloomberg Naked. Thank you, Michael. 0:09:49.559 --> 0:09:52.320 Time now for our Bloomberg Sports Update. Fortify twice stay 0:09:52.360 --> 0:09:54.800 downey for that, we bring in John stash Our. Good morning, John, 0:09:54.840 --> 0:09:57.520 Your morning, Nathan. Three nights after the Bills and Bengals 0:09:57.520 --> 0:10:00.800 stopped playing in Cincinnati due to Tomorrow Hamlin going into 0:10:00.920 --> 0:10:03.920 cardiac arrest, the NFL made the decision not to resume 0:10:04.040 --> 0:10:06.640 the game. Both teams will play Sunday. Finished the regular 0:10:06.640 --> 0:10:10.480 season playing sixteen games, with everyone else having played seventeen. 0:10:10.559 --> 0:10:12.520 Both teams are going to the playoffs. Both had a 0:10:12.640 --> 0:10:15.600 chance to earn the one seed and the first round 0:10:15.640 --> 0:10:18.440 by If Kansas City wins tomorrow, the Chiefs are assured 0:10:18.480 --> 0:10:21.840 of finishing with the best win percentage. There are reports 0:10:21.840 --> 0:10:26.200 the NFL may announced today measures to diminish the significance 0:10:26.320 --> 0:10:28.199 of that. Meanwhile, we heard yesterday for the first time 0:10:28.200 --> 0:10:31.560 from Hamlin's doctor in Cincinnati, and the news from Timothy 0:10:31.640 --> 0:10:34.560 Pritz was terrific. We would like to share that there 0:10:34.559 --> 0:10:37.320 has been substantial improvement and is conditioned over the past 0:10:37.360 --> 0:10:43.000 twenty four hours. We had significant concern um about him 0:10:43.120 --> 0:10:46.640 after the injury, after the event that happened on the field, 0:10:47.080 --> 0:10:49.920 but he is making substantial progress, Pritz said. The first 0:10:50.000 --> 0:10:52.880 question Hamlin asked was whether the Bills had won the game. 0:10:52.960 --> 0:10:55.520 Local hockey Rangers won four one at Montreal. The Islanders 0:10:55.559 --> 0:10:58.520 lost for two. In Edmonton, Devils lost to St. Louis 0:10:58.559 --> 0:11:01.000 five three. NHL named some of the All Stars for 0:11:01.040 --> 0:11:02.959 the game next month, one from each team in the 0:11:03.080 --> 0:11:06.199 range of rep goalie Egorsister Can also named the Aisles 0:11:06.480 --> 0:11:09.200 Brock Nelson and the Devil's Jack Use College James Ruptors 0:11:09.240 --> 0:11:11.480 was coming off that when at top rank produced Scarlet 0:11:11.600 --> 0:11:14.360 Knights came home and beat Maryland sixty four to fifty, 0:11:14.440 --> 0:11:17.280 held the terms the seventeen first half points. NBA to 0:11:17.360 --> 0:11:20.199 Night Nixon. Toronto next visit New Orleans second time. This week. 0:11:20.280 --> 0:11:24.000 Yankees divided a veteran baseball front office exact to assist 0:11:24.040 --> 0:11:27.120 GM Brian Cashman first was Brian Stabing and now former 0:11:27.200 --> 0:11:31.200 mex gm omar Maniah John Stashward Bloomberg Sports. Nathan, Thank 0:11:31.240 --> 0:11:33.440 you John, and the Bloomberg Sports Report was brought to 0:11:33.440 --> 0:11:35.599 you by Audie. Don't let someone else drive off in 0:11:35.640 --> 0:11:38.600 the outie model you've always wanted. Visit your local tri 0:11:38.800 --> 0:11:41.200 state autie dealer to get behind the wheel of yours today, 0:11:41.360 --> 0:11:44.760 or visit autie Offers dot com for more information. The 0:11:44.840 --> 0:11:47.599 latest on the speakership fight on Capitol Hill. Just to 0:11:47.679 --> 0:11:52.199 head first, futures trading flat, SMP futures up a point down, 0:11:52.200 --> 0:11:56.320 futures up twenty two, NASTAC futures down fourteen points ten. 0:11:56.360 --> 0:11:59.440 Your treasury yield right now three point seven three percent. 0:12:02.679 --> 0:12:06.120 Live from coast to coast, from New York to San Francisco, 0:12:06.280 --> 0:12:10.160 Boston to Washington, d C. Nationwide on Syrius examp of 0:12:10.240 --> 0:12:14.840 Bloomberg Business app and Bloomberg dot Com. This is Bloomberg Daybreak. 0:12:16.040 --> 0:12:18.000 Good morning, I'm Nathan Hagarn. While we wait for the 0:12:18.040 --> 0:12:20.760 December payrolls report on this job's Friday, there is still 0:12:20.800 --> 0:12:23.920 one key position on Capitol Hill that has yet to 0:12:23.960 --> 0:12:26.240 be filled that would be Speaker of the House. We're 0:12:26.240 --> 0:12:29.800 heading into a fourth day of the D eight Congress, 0:12:29.840 --> 0:12:31.920 and at this point it is still tough to say 0:12:31.920 --> 0:12:35.760 whether lawmakers can resolve the mismatch between Kevin McCarthy, the 0:12:35.760 --> 0:12:39.640 House GLP leader, and those twenty or so Republicans standing 0:12:39.720 --> 0:12:42.200 in the way of his gavel. Once again, we're joined 0:12:42.200 --> 0:12:45.319 by Greg Valier Live this morning, chief US policy strategist 0:12:45.320 --> 0:12:48.440 at a GF Investments. Uh. Is it starting to feel 0:12:48.480 --> 0:12:51.440 like Groundhog Day? Where you said, Greg, you bet, Mason, 0:12:51.600 --> 0:12:54.800 it's sort of like the inmates have taken over the asylum, 0:12:54.880 --> 0:12:59.160 and unfortunately this could drag on for many, many more days. 0:12:59.840 --> 0:13:03.640 I think you wrote a note earlier this week talking 0:13:03.679 --> 0:13:08.400 about the extraordinary concessions that Kevin McCarthy has made to 0:13:08.480 --> 0:13:13.079 try to hold on to actually get the gavel. Are 0:13:13.080 --> 0:13:17.520 there any other concessions he can make at this point? No, 0:13:17.720 --> 0:13:21.840 there's not much else. I mean, he's agreed to humiliating 0:13:22.520 --> 0:13:26.360 restraints on the role of a speaker, and the irony here, Nathan, 0:13:26.559 --> 0:13:30.240 is that moderate Republicans in the House are a guest 0:13:30.440 --> 0:13:33.640 and they may turn against McCarthy. A lot of moderates 0:13:34.280 --> 0:13:37.600 we're saying late yesterday that they could never accept this 0:13:37.679 --> 0:13:40.960 kind of concession. The other irony is that even with 0:13:41.120 --> 0:13:45.559 this concession, there's a hardcore of four or five very 0:13:46.160 --> 0:13:50.520 adamant House Conservatives who would not vote for McCarthy under 0:13:50.640 --> 0:13:54.240 any circumstances. So I don't see where the concession gets 0:13:54.320 --> 0:13:58.079 him other than diminished support among moderates. Well, let's get 0:13:58.120 --> 0:14:03.480 to your first point there about moderate Republicans potentially providing 0:14:03.480 --> 0:14:08.360 a backlash against McCarthy for the concessions he's made. Uh, 0:14:08.480 --> 0:14:10.080 let me pin you down a little bit on that. 0:14:10.120 --> 0:14:14.280 Are you actually hearing from certain moderates who are saying 0:14:14.360 --> 0:14:19.120 that they may withhold or withdraw their support for McCarthy 0:14:19.160 --> 0:14:22.360 as this process plays out. I'm not sure they're there yet. 0:14:22.480 --> 0:14:25.920 I think they would like to get some assurance that, uh, 0:14:25.960 --> 0:14:29.360 this isn't as radical as it looks. But to answer 0:14:29.360 --> 0:14:31.880 your question, yes, there are some who are willing to 0:14:31.960 --> 0:14:35.920 withhold their support if one vote, if one lone House 0:14:36.000 --> 0:14:38.840 member says I want to try to remove the speaker, 0:14:39.200 --> 0:14:41.960 that's that's just no way to run a railroad. And 0:14:42.000 --> 0:14:46.720 when it comes to those four or five seeming members 0:14:46.840 --> 0:14:50.960 who just aren't going to vote for McCarthy under any circumstance, 0:14:51.040 --> 0:14:55.040 does that lead to an opening for someone else's potential 0:14:55.560 --> 0:14:58.880 alternative to step forward. Well, A good point. There's been 0:14:58.920 --> 0:15:01.040 a lot of other names outed this week, as you know, 0:15:01.200 --> 0:15:05.440 including Jim Jordan's and especially Steve Scalise, but Skalis, who 0:15:05.520 --> 0:15:08.520 is quite popular in the House, is part of the leadership, 0:15:08.840 --> 0:15:11.600 and I think those four or five holdouts probably would 0:15:11.760 --> 0:15:14.280 would hold it against him. There are all sorts of 0:15:14.320 --> 0:15:17.640 other rumors about maybe a bipartisan deal with the Democrats, 0:15:18.000 --> 0:15:22.640 which I think is quite unlikely, maybe floating the name 0:15:22.720 --> 0:15:26.840 of another possible Canada, maybe changing the rule you need 0:15:26.880 --> 0:15:30.720 two hundred eighteen votes, maybe reducing that by having some 0:15:30.800 --> 0:15:35.360 members stay off the floor, all sorts of hail Mary's. 0:15:35.400 --> 0:15:37.400 But I think the bottom line is that they're still 0:15:37.440 --> 0:15:40.080 not there, and I don't think they'll get a deal today. 0:15:40.160 --> 0:15:43.560 And we've talked before about what the potential this could 0:15:43.680 --> 0:15:46.960 mean for the debt ceiling fight later on this year, 0:15:47.000 --> 0:15:50.120 getting appropriations passed later on this year as well, if 0:15:50.120 --> 0:15:52.800 we continue to see this kind of fractiousness. We're starting 0:15:52.800 --> 0:15:54.800 to hear as well from some lawmakers who are saying 0:15:54.840 --> 0:15:59.320 this stalemate could potentially risk US national security because Congress 0:15:59.400 --> 0:16:02.200 can't move till they get this matter resolved is is 0:16:02.240 --> 0:16:04.800 that taking things too far? Is there something to that? No, 0:16:05.000 --> 0:16:07.440 there's something to that. I mean it's easy to say 0:16:07.720 --> 0:16:10.280 Congress doesn't matter, but no, there are things that are 0:16:10.360 --> 0:16:13.280 really important. In the short term. What if there's a 0:16:13.280 --> 0:16:17.440 foreign policy crisis that needs immediate funding. What if the 0:16:17.480 --> 0:16:21.240 flooding continues in California it's quite severe as you know, 0:16:21.680 --> 0:16:25.440 maybe there's a need for aid to California. And the 0:16:25.520 --> 0:16:28.560 long term, the issue is going to be budget stuff. 0:16:28.600 --> 0:16:31.240 It will be the death ceiling, it'll be a possible 0:16:31.320 --> 0:16:35.480 default crisis. These are serious issues and if the if 0:16:35.520 --> 0:16:39.120 the House is this NEWTD, it's going to be difficult 0:16:39.160 --> 0:16:42.880 to deal with those issues. Does this have any implications 0:16:42.920 --> 0:16:47.320 for in terms of the politics, the way the parties 0:16:47.400 --> 0:16:51.200 are viewed after this fight, It will be interesting to 0:16:51.200 --> 0:16:53.200 see the polls. I haven't seen any of this week. 0:16:53.280 --> 0:16:56.240 I suspect will be sort of a pox on both 0:16:56.280 --> 0:17:00.680 your houses mentality, but in in to be you're realistic, 0:17:00.720 --> 0:17:03.240 I mean, this will blow up on Republicans. I think 0:17:03.280 --> 0:17:08.200 they are looking pretty bad, especially compared to Nancy Pelosi, 0:17:08.280 --> 0:17:11.040 who did a pretty good job as House Speaker. So no, 0:17:11.240 --> 0:17:14.120 I think as we go into the election, it would 0:17:14.200 --> 0:17:17.399 hurt Republicans in the House. The Senate is different. Of 0:17:17.680 --> 0:17:21.320 the seats up in the Senate favor the Republicans in 0:17:21.359 --> 0:17:24.320 this cycle, but I think the House could get a 0:17:24.400 --> 0:17:28.159 major pushback from voters if this is not resolved. And 0:17:28.240 --> 0:17:30.840 we'll see if We'll be checking back with you next 0:17:30.880 --> 0:17:34.080 week if this isn't resolved. Thanks as always for your time, 0:17:34.119 --> 0:17:38.840 Greg Valier, Chief US policy strategist at a GF Investments. 0:17:38.920 --> 0:17:42.040 The House gets back in session once again. Noon Wall 0:17:42.080 --> 0:17:46.480 Street time for day four, round twelve of voting for 0:17:46.560 --> 0:17:50.080 the Speaker of the House. SMP futures right now up 0:17:50.119 --> 0:17:53.120 three points, SOUND futures up thirty nine. NAS Deck futures 0:17:53.160 --> 0:17:58.359 down four points as investors await December payrolls. This is 0:17:58.359 --> 0:18:05.080 Bloomberg Markets headlines and breaking news twenty four hours a 0:18:05.160 --> 0:18:08.480 day at Bloomberg dot Com, the Bloomberg Business Outland at 0:18:08.480 --> 0:18:18.040 Bloomberg Quick Tape. This is a Bloomberg Business Flash and 0:18:18.080 --> 0:18:21.160 I'm Karen Moscow and US knock Index futures are little 0:18:21.280 --> 0:18:24.520 change as traders race for US jobs numbers do later 0:18:24.640 --> 0:18:27.000 that will help shart the path forward for Federal Reserve 0:18:27.080 --> 0:18:29.520 monetary tightening. We checked the markets all day long here 0:18:29.560 --> 0:18:33.120 on Bloomberg SMP futures are a little change down, futures 0:18:33.160 --> 0:18:35.080 up a tenth of a percent or thirty one points, 0:18:35.080 --> 0:18:38.040 and NASDAG future is now little change ten. Your treasury 0:18:38.040 --> 0:18:40.400 down four thirty seconds. You have three point seven three 0:18:40.400 --> 0:18:42.760 percent they yield on the two year four point four 0:18:42.880 --> 0:18:46.119 seven percent. NIMEX screwed oil is up one percent or 0:18:46.119 --> 0:18:49.240 seventy four cents at seventy four dollars forty one cents 0:18:49.240 --> 0:18:51.440 of barrel, and the euro one point oh five one 0:18:51.520 --> 0:18:54.720 two against the dollar. And that's a Bloomberg business flash. 0:18:54.720 --> 0:18:56.960 Now here's Michael Barr with Moore on what's going on 0:18:57.080 --> 0:18:59.880 around the world. Michael, good morning, Good morning, Karen dou 0:19:00.040 --> 0:19:03.600 His house reconvenes later today. As the speaker fight drags 0:19:03.640 --> 0:19:07.080 into a fourth day, Kevin McCarthy is trying to strike 0:19:07.119 --> 0:19:10.920 an agreement with GOP dissidents. A major storm that slammed 0:19:10.920 --> 0:19:14.359 into California has led to flooding down the trees and 0:19:14.520 --> 0:19:18.320 power outages across the state. Doctors say the mar Hamlin 0:19:18.520 --> 0:19:22.040 is beginning to awaken and is showing substantial improvement. The 0:19:22.080 --> 0:19:25.120 Buffalo Bill Safety went into Carniac arrest during Monday Night 0:19:25.160 --> 0:19:30.160 football doctor Say Hamblin's first question was did we win? Meanwhile, 0:19:30.240 --> 0:19:33.320 the NFL canceled the game between the Bills and Bengals. 0:19:33.320 --> 0:19:36.840 In hockey, Devils and Islanders lost, Ranges Bruins and Capitols 0:19:36.880 --> 0:19:40.440 one in the NBA, the Celtics one. Global News twenty 0:19:40.440 --> 0:19:43.440 four hours a day on air and on Bloomberg Quick Take, 0:19:43.720 --> 0:19:46.640 powered by more than twenty seven hundred journalists and analysts 0:19:46.720 --> 0:19:49.680 more than a hundred twenty countries. Michael Barr and this 0:19:50.000 --> 0:19:52.480 is Bloomberg. Nathan love to hear that from mar Hamlin. 0:19:52.600 --> 0:19:55.600 Did we win? What a great partnersis? Thank you, Michael. 0:19:55.600 --> 0:19:59.919 It's on Wall Street, Nathan Hagar and this is Bloomberg Daybreak. 0:20:00.040 --> 0:20:02.000 When you hear someone say things are moving toward an 0:20:02.040 --> 0:20:06.240 iceberg usually doesn't mean anything good. And Carlisle, head of 0:20:06.240 --> 0:20:09.240 Global Research, Jason Thomas says that's where he thinks the 0:20:09.320 --> 0:20:13.240 US economy is headed. Thomas expects corporations to remain under 0:20:13.240 --> 0:20:16.640 pressure as the Federal Reserve keeps hiking interest rates. It's 0:20:16.640 --> 0:20:19.159 got the details from Jason Thomas. Now he spoke with 0:20:19.200 --> 0:20:22.200 Bloomberg's David and Glass and Evon Man. Can they use 0:20:22.240 --> 0:20:25.040 economy of void to recession. What do you think? Maybe, 0:20:25.440 --> 0:20:28.560 but but it does seem unlikely. And that's really because 0:20:28.600 --> 0:20:31.960 of the the the economy seems to be heading for 0:20:31.960 --> 0:20:34.960 an iceberg in the form of higher interest rates. Those 0:20:35.040 --> 0:20:37.760 higher interest rates have really not taken effect as yet 0:20:38.480 --> 0:20:41.800 for most borrowers. It's really the December nineteen reference date. 0:20:42.240 --> 0:20:46.480 So as of Q one floating rate, corporate borrowers are 0:20:46.520 --> 0:20:49.440 going to face UH debt service costs that are about 0:20:49.480 --> 0:20:53.480 fifty to six higher than they experience just six months ago. 0:20:54.000 --> 0:20:56.800 So I do think we're going to see increased levels 0:20:56.840 --> 0:21:00.679 of financial distress. Um, I'm speculative, great barrow. And of 0:21:00.720 --> 0:21:03.000 course that's going to cause a lot of management teams 0:21:03.320 --> 0:21:06.760 to change their behavior. Rather than a growth orientation, they're 0:21:06.760 --> 0:21:08.760 going to start to think about cost cutting and and 0:21:08.840 --> 0:21:12.480 this seems to me precisely how a recession gets propagated. 0:21:12.800 --> 0:21:14.840 And then, you know, you still have the likes of 0:21:14.840 --> 0:21:18.359 some FED speakers like Estra George, you know, speaking and saying, 0:21:18.440 --> 0:21:21.520 you know, she aspects the FED fundraise to be over 0:21:21.600 --> 0:21:24.920 five percent and stay there for much of four What 0:21:24.920 --> 0:21:27.959 with forced the FED to pivot? Then do you think, Jason, 0:21:28.440 --> 0:21:30.520 you know, all this talk of a pivot really seems 0:21:30.560 --> 0:21:34.000 so premature. As you alluded, I think that the FED 0:21:34.320 --> 0:21:36.840 right now is very concerned that inflation is going to 0:21:36.840 --> 0:21:41.200 remain stuck above four percent. Inflation has come down, obviously, 0:21:41.560 --> 0:21:45.680 price pressures have eased, the supply chain crisis is effectively over, 0:21:46.280 --> 0:21:48.800 but you still have lots of reasons to again fear 0:21:48.840 --> 0:21:51.480 that that inflation is going to remain elevated relative to 0:21:51.520 --> 0:21:55.440 the two percent target. First, you have wage growth at 0:21:55.480 --> 0:21:58.919 low skill levels. There there is still significant labor shortages 0:21:59.080 --> 0:22:02.159 low skill levels, earnings are growing at about a seven 0:22:02.160 --> 0:22:06.359 percent annualized rate overall wage growth, again consistent with roughly 0:22:06.400 --> 0:22:10.240 four percent inflation. And then, I think most consequentially, you 0:22:10.320 --> 0:22:13.800 still have management teams that got a taste for pushing 0:22:13.840 --> 0:22:16.840 price through over the past couple of years and are 0:22:16.880 --> 0:22:21.120 still looking to increase prices where possible, And I think 0:22:21.200 --> 0:22:23.880 really the only way for the FED to deter those 0:22:23.920 --> 0:22:28.240 additional rounds of price increases is to impress upon management 0:22:28.280 --> 0:22:31.520 teams that those price increases are going to result in 0:22:31.600 --> 0:22:34.560 lost sales or lost market share. And and again the 0:22:34.600 --> 0:22:37.400 only way to do that is to further restraint demand. 0:22:37.680 --> 0:22:41.080 So on the whole yes, I do expect another basis 0:22:41.119 --> 0:22:45.320 points at the February first meeting, perhaps another basis points thereafter, 0:22:46.040 --> 0:22:49.359 but that policy rate five five and a quarter percent 0:22:49.400 --> 0:22:52.960 perhaps is going to be sustained into and I think 0:22:53.000 --> 0:22:55.560 that's where markets are going to be very surprised that 0:22:55.560 --> 0:22:58.280 that could mean some additional upside for the dollar in 0:22:58.320 --> 0:23:02.119