WEBVTT - Bloomberg Daybreak: January 5, 2023 - Hour 1 (Radio) 0:00:01.680 --> 0:00:04.960 Live from the Bloomberg Interactive Burgers Studios. Is that Bloomberg 0:00:05.040 --> 0:00:08.959 Day Right for Thursday, January three? Coming up this hour, 0:00:09.320 --> 0:00:12.119 More setbacks for Kevin McCarthy and his quest to be 0:00:12.200 --> 0:00:15.360 Speaker of the House. Amazon is cutting more than eighteen 0:00:15.480 --> 0:00:19.120 thousand jobs. The Fed pushes back against rape cut bets 0:00:19.160 --> 0:00:22.079 as it tries to tackle inflation, and investors away. Two 0:00:22.079 --> 0:00:24.720 more key readings on the labor market ahead of tomorrow's 0:00:24.800 --> 0:00:27.960 jobs report. Mourners pay their respects at the funeral for 0:00:27.960 --> 0:00:31.160 former Pope Benedict Blost. President Biden says he intends to 0:00:31.240 --> 0:00:34.680 visit the US Mexico border. Michael Barr more ahead, I'm 0:00:34.760 --> 0:00:36.720 John stash Our. In sports, the Knicks pulled out a 0:00:36.800 --> 0:00:39.520 narrow home win over the Spurs. The Nets win streak 0:00:39.600 --> 0:00:44.760 ended at Chicago. The Devil's one in Detroitano. That's all 0:00:44.920 --> 0:00:48.640 training ahead on Bloomberg Daybreak on Bloomberg eleven, Free on 0:00:48.720 --> 0:00:53.159 New York, Bloomberg one, Washington, d C, Bloomberg one oh 0:00:53.159 --> 0:00:57.720 six one, Boston, Bloomberg nine sixties and Francisco Sirius x 0:00:57.920 --> 0:01:01.080 M one nineteen and around the world on Bloomberg Radio 0:01:01.200 --> 0:01:07.960 dot Com and via the Bloomberg Business. Good morning. I'm 0:01:08.040 --> 0:01:11.080 Nathan Hager and I'm Karen Moscow. When US DOT index 0:01:11.200 --> 0:01:13.640 futures they are a little changed to lower this morning. 0:01:13.680 --> 0:01:16.000 We check the markets all day long here on Bloomberg 0:01:16.000 --> 0:01:19.120 with S and P futures. That will change. Down futures also, 0:01:19.240 --> 0:01:21.640 that'll change now. And nasdeck features down about tenth of 0:01:21.720 --> 0:01:24.959 upper cent or about fifteen points. The decks in Germany's 0:01:25.000 --> 0:01:27.440 down two tenths of upper cent. Ten year treasury down 0:01:27.480 --> 0:01:30.320 seven thirty seconds. You have three point seven zero percent 0:01:30.680 --> 0:01:33.679 yield on the two year four point three eight percent. Nathan, 0:01:33.840 --> 0:01:35.560 all right, Karen, We'll have more on the markets in 0:01:35.600 --> 0:01:38.720 a minute, but first, the latest on the political turmoil 0:01:38.800 --> 0:01:42.640 in Washington. The House has adjourned once again without electing 0:01:42.680 --> 0:01:45.280 a speaker. Let's get the latest from Amy Morris in 0:01:45.280 --> 0:01:50.200 our Bloomberg newsroom. In Washington, twenty hardline conservatives are blocking 0:01:50.280 --> 0:01:52.960 g o P leader Kevin McCarthy's ascension to howse speaker, 0:01:53.040 --> 0:01:55.960 and Pennsylvania's Scott Perry is one of them. Because we 0:01:56.080 --> 0:02:00.440 all acknowledge and we all know that Washington is for oen. 0:02:00.680 --> 0:02:03.680 We must take a new path. Laurida's Cat Camot called 0:02:03.720 --> 0:02:06.880 on the GOP to support McCarthy. He has proven that 0:02:06.960 --> 0:02:08.560 he is willing to stand up in the face of 0:02:08.600 --> 0:02:12.160 critics and not only prove them wrong, but work with them. 0:02:12.320 --> 0:02:15.040 How's Republican leaders held a meeting late yesterday to hammer 0:02:15.040 --> 0:02:19.120 out a deal, Still no resolution. Lawmakers reconvene at noon 0:02:19.160 --> 0:02:22.360 today to begin a seventh round of votes in Washington. 0:02:22.440 --> 0:02:25.040 I'm Amy Morris Bloomberg Daybreak. All right, Amy, thank you 0:02:25.040 --> 0:02:27.640 about the standoff on Capitol Hill. Is getting attention from 0:02:27.720 --> 0:02:30.600 the White House. President Biden says he hopes Congress can 0:02:30.720 --> 0:02:36.480 quote get their act together. Congress for caen function. It's 0:02:36.560 --> 0:02:39.680 just an embarrassing the greatest nation in the world. How 0:02:39.760 --> 0:02:43.200 can that be? President Biden says, dysfunction within the GOP 0:02:43.560 --> 0:02:45.480 is not a good look to the rest of the world. 0:02:45.600 --> 0:02:48.480 Now we're getting reaction from former members of Congress as well, 0:02:48.560 --> 0:02:51.960 Karen Democrat. Tim Romer is a former representative from Indiana. 0:02:52.280 --> 0:02:55.680 He says Republicans voting against McCarthy seemed determined to take 0:02:55.760 --> 0:02:58.480 him down, and Democrats have little reason to come to 0:02:58.520 --> 0:03:01.200 his rescue. The Democrat so are in a very good 0:03:01.200 --> 0:03:05.400 position right now. There is no incentive for them to 0:03:05.440 --> 0:03:09.960 help Kevin McCarthy out of this deep dark well at 0:03:09.960 --> 0:03:13.040 a hole that he has done for himself. Former Congressman 0:03:13.080 --> 0:03:15.280 Tim Rohmer was a guest on Bloomberg Sound On with 0:03:15.360 --> 0:03:17.920 Joe Matthew. You can catch the program weekdays at five 0:03:17.919 --> 0:03:20.480 pm Eastern on Bloomberg Radio and listen to the show 0:03:20.520 --> 0:03:23.480 on demand wherever you get your podcasts. Well, Nathan, Another 0:03:23.520 --> 0:03:26.680 major story we're following this morning brings us to Amazon. 0:03:26.800 --> 0:03:29.280 We're learning job cuts at the company will be greater 0:03:29.360 --> 0:03:33.600 than initially anticipated, with Amazon planning to eliminate over eighteen 0:03:33.760 --> 0:03:37.680 thousand rules. Bloomberg's Dog Kristner has the details. The figure 0:03:37.680 --> 0:03:40.720 includes cuts announced back in November, when about ten thousand 0:03:40.800 --> 0:03:44.600 workers lost their jobs. Uncertainty over the outlook caused Amazon 0:03:44.640 --> 0:03:48.960 to accelerate layoffs. CEO Andy Jesse told employees the company 0:03:49.000 --> 0:03:53.000 typically waits to communicate these outcomes until it speaks with 0:03:53.040 --> 0:03:56.120 those directly impacted, but the information was leaked to the 0:03:56.160 --> 0:03:58.760 Wall Street Journal, so the news was shared earlier and 0:03:58.840 --> 0:04:02.080 directly from Jesse. Most of the cuts are in Amazon's 0:04:02.080 --> 0:04:06.480 retail division and human resources. Jesse is already eliminated or 0:04:06.560 --> 0:04:11.480 curtailed experimental and unprofitable businesses in New York. I'm Doug Prisoner, 0:04:11.520 --> 0:04:13.920 Bloomberg Daybreak. All right, Doug, thank you. In those Amazon 0:04:14.000 --> 0:04:16.279 cuts come as we await two key readings on the 0:04:16.360 --> 0:04:19.320 labor market today ahead of tomorrow's jobs report. We're got 0:04:19.360 --> 0:04:22.159 a preview from Bloomberg's Mike McKee. The Fed is focused 0:04:22.160 --> 0:04:24.960 on employment as they raise rates to slow the economy. 0:04:25.040 --> 0:04:28.840 Unemployment should rise, So far it hasn't. Jobless claims have 0:04:28.880 --> 0:04:31.880 remained low and steady, although econdists say it's difficult to 0:04:31.920 --> 0:04:34.760 get a clear read on layoffs during the holidays, so 0:04:35.000 --> 0:04:38.440 don't expect a big change in claims yet. ADP measures 0:04:38.440 --> 0:04:41.679 the number of people on payrolls, in theory that should 0:04:41.760 --> 0:04:45.200 point to the direction of the overall labor market. ADP, however, 0:04:45.279 --> 0:04:48.240 has diverged from the government's payroll report, coming in weaker 0:04:48.320 --> 0:04:51.919 for the past five months. Bottom Line markets are likely 0:04:51.960 --> 0:04:55.680 to look past today's data to Friday's numbers, figuring that's 0:04:55.680 --> 0:04:59.599 what the Fed will be doing. Michael McKee, Bloomberg Daybreak, Hey, Michael, 0:04:59.640 --> 0:05:02.080 thank you. Meantime, the Fed is standing firm and it's 0:05:02.160 --> 0:05:04.440 resolved to bring down inflation. And we get the latest 0:05:04.480 --> 0:05:07.520 live at the Bloomberg. Steve Rappaport, Good morning, Steve, Good morning, 0:05:07.600 --> 0:05:10.840 Karen and Nathan. With that resolve comes a delicate balancing 0:05:10.839 --> 0:05:13.880 act for the Federal Reserve. In a blunt morning to investors, 0:05:13.920 --> 0:05:16.400 minutes from the last policy meetings show the central Bank 0:05:16.480 --> 0:05:19.240 will not cave to public pressure to lower interest rates. 0:05:19.360 --> 0:05:22.479 The Feed is attempting to cut inflation without triggering a recession, 0:05:22.640 --> 0:05:25.880 but JP Morgan Chip US economist Michael Faroli tells Bloomberg 0:05:25.880 --> 0:05:28.320 gets likely too late to achieve that goal. We are 0:05:28.360 --> 0:05:30.920 expecting the economy to slip into recession by the end 0:05:30.920 --> 0:05:33.680 of the year, just due to the lagged effects of 0:05:33.240 --> 0:05:35.960 the of the tightening and financial conditions that the Fed 0:05:36.080 --> 0:05:39.040 is engineered here, as well as the additional great height 0:05:39.080 --> 0:05:42.159 set their their signaling today. The notes also highlight the 0:05:42.160 --> 0:05:46.040 Fed's rate projections being quote notably above market expectations from 0:05:46.080 --> 0:05:49.000 a policy standpoint, Live in New York. I'm Steve Rappaport, 0:05:49.080 --> 0:05:51.960 Bloomberg daybreak. All right, Steve, thanks those conscious comments from 0:05:51.960 --> 0:05:55.200 the Federal helping fuel some caution in stocks this morning. Yesterday, 0:05:55.200 --> 0:05:57.520 both the SMP five hundred and the NASTAC one hundred 0:05:57.600 --> 0:06:00.920 snap two days of losses. Morgan stand chief US equity 0:06:00.960 --> 0:06:04.400 strategist Mike Wilson, who correctly predicted last year's dismal market, 0:06:04.480 --> 0:06:07.520 says stocks are heading even lower that we think three 0:06:07.560 --> 0:06:12.359 thousand is a very achievable number given our confidence on 0:06:12.360 --> 0:06:15.839 our earnings forecast. Ironically, I would say any absence of, 0:06:15.920 --> 0:06:20.680 you know, a recession, meaning companies decide to not off aggressively, 0:06:20.920 --> 0:06:25.599 that target looks more achievable. That may sound counterintuitive, but 0:06:25.839 --> 0:06:28.080 that's the way we're not modeling it today. So our 0:06:28.080 --> 0:06:30.560 bear case is actually kind of we avoid a recession, 0:06:30.600 --> 0:06:33.680 but not to slowdown. If Morgan Stanley chief US equity 0:06:33.680 --> 0:06:36.920 strategist Mike Wilson's prediction comes true, stocks would decline more 0:06:36.960 --> 0:06:40.360 than from current levels, and Wilson is not the only 0:06:40.440 --> 0:06:43.239 big bear on Wall Street. On this morning. Piper Sandler 0:06:43.279 --> 0:06:46.520 strategist Michael Kantrowitz, ranked number three in the last year's 0:06:46.600 --> 0:06:49.680 Institutional Investors survey, predicts the S and P five hundred 0:06:49.680 --> 0:06:53.880 will fall to just above thirty two hundred and again 0:06:53.920 --> 0:06:56.359 futures it will change. This morning, straight ahead, your latest 0:06:56.400 --> 0:06:59.680 local headlines, plus a check of sports, and this is Bloomberg. 0:07:03.120 --> 0:07:05.239 Thank you hearing its forty nine degrees in Central parkot 0:07:05.279 --> 0:07:08.040 Sympatchie Follock this morning. It's gonna stay cloudy and cooler 0:07:08.040 --> 0:07:10.680 today in the low fifties. Might see a shower tonight 0:07:10.720 --> 0:07:12.080 as we get down to the low forties in the 0:07:12.120 --> 0:07:14.000 overnight hours. Time now for a look at some of 0:07:14.000 --> 0:07:16.080 the other stories making news in New York and around 0:07:16.120 --> 0:07:18.200 the world. For that, we are joined by Bloomberg's Michael 0:07:18.200 --> 0:07:21.280 bar Good morning, Michael, Good morning, Nathan. Pope Francis delivered 0:07:21.280 --> 0:07:24.440 the homia at the funeral mass for former Pope Benedict 0:07:24.720 --> 0:07:31.960 Benedetto in Italian. Pope Francis says, Benedict, faithful friend of 0:07:32.000 --> 0:07:34.440 the bridegroom. May you enjoy be complete as you hear 0:07:34.560 --> 0:07:38.040 his voice. Mourners gathered in St. Peter Square outside the 0:07:38.080 --> 0:07:41.440 Vatican today where Benedict is being laid to rest. George 0:07:41.440 --> 0:07:46.400 Mason University professor Helen Alvary spoke about Benedict's legacy. I 0:07:46.440 --> 0:07:50.080 think he's a model of humility and modesty. He was 0:07:50.200 --> 0:07:54.200 definitely a servant of the church. He didn't want to 0:07:54.240 --> 0:07:56.880 come to Rome. He wanted to stay in Germany and 0:07:57.480 --> 0:08:00.280 remain at Theologian. He didn't want to be out of 0:08:00.320 --> 0:08:03.160 the office of Doctrine. But John Paul too really twisted 0:08:03.160 --> 0:08:06.120 his arm, and he really did not want to be pope. 0:08:06.640 --> 0:08:09.280 Ah he he thought, you know, he was not great 0:08:09.400 --> 0:08:12.280 enough for it. Benedict will be buried in the crypt 0:08:12.440 --> 0:08:16.320 under St. Peter's Basilica. President Joe Biden says he intends 0:08:16.360 --> 0:08:19.120 to visit the US Mexico Boarder next week for a 0:08:19.160 --> 0:08:23.640 firsthand look at conditions as his administration contends with surgeon migration. 0:08:24.080 --> 0:08:27.160 Biden is already scheduled to travel to Mexico next week 0:08:27.400 --> 0:08:30.720 to meet with the presidents of Mexico and Canada. President 0:08:30.760 --> 0:08:34.600 Biden's administration urged the U. S. Supreme Court to uphold 0:08:34.640 --> 0:08:37.880 his embattled student debt relief plan. The High Court is 0:08:37.920 --> 0:08:41.960 scheduled to hear arguments February. It's a war of words 0:08:42.000 --> 0:08:45.000 between New York City Mayor Eric Adams and former Mayor 0:08:45.040 --> 0:08:49.120 Bill de Blasio's administration. Adams is calling on his predecessor 0:08:49.200 --> 0:08:53.080 to stop his team from criticizing the current administration. It's 0:08:53.080 --> 0:08:55.200 not called Bill. The other day I said, Bill, what's 0:08:55.200 --> 0:08:59.880 going on? You know what's going on? And then the 0:09:00.600 --> 0:09:04.520 Bill's coms guy who's probably the roast coms guy in 0:09:04.559 --> 0:09:10.080 the History of Communication. Adams is talking about the blosil's 0:09:10.120 --> 0:09:14.080 former spokesperson Bill Ninehard, who has been increasingly critical about 0:09:14.120 --> 0:09:17.000 Dams on Twitter. Adams said they had eight years to 0:09:17.000 --> 0:09:19.800 do their job. Once they're gone, their experts on everything. 0:09:20.440 --> 0:09:23.320 Heavy rains and strong winds. At California overnight it has 0:09:23.360 --> 0:09:27.800 a powerful bomb cyclone washed ashore knocking out power storm. 0:09:27.920 --> 0:09:30.840 Is the third so called atmospheric river storm to impact 0:09:30.840 --> 0:09:34.240 California in the last two weeks. Global News twenty four 0:09:34.240 --> 0:09:36.760 hours a day on air and on Bloomberg Quick Take, 0:09:37.000 --> 0:09:40.120 powered by more than journalist and analysts more than a 0:09:40.200 --> 0:09:43.880 hundred twenty countries at Michael Barr, this is Bloomberg. Nathan Okay, Michael, 0:09:43.920 --> 0:09:50.640 Thanks down Alf of the Bloomberg Sports Update, brought to 0:09:50.679 --> 0:09:53.200 you by Tri State Audi. Good morning, John, Sasha, Good 0:09:53.240 --> 0:09:55.720 morning Nathan. The next lost to the lowly Spurs a 0:09:55.760 --> 0:09:58.040 week ago in San Antonio. Jelly runs and didn't play 0:09:58.080 --> 0:09:59.920 that game. He did play last night at the Guard 0:10:00.080 --> 0:10:02.400 and he scored thirty eight points, career high in the 0:10:02.440 --> 0:10:05.680 regular season. Nicks pulled out the win one seventeen one fourteen. 0:10:05.720 --> 0:10:08.640 The Spurs were coming off at thirty six point loss 0:10:08.640 --> 0:10:11.160 in Brooklyn. The Nets brought that twelve game winning strengt 0:10:11.200 --> 0:10:15.320 to Chicago. It ended the Bulls won one twelve despite 0:10:15.360 --> 0:10:17.880 forty four points by Kevin durand the Nets first loss 0:10:17.880 --> 0:10:20.560 in a month. Devil's won five one at Detroit. They're 0:10:20.559 --> 0:10:23.200 back home tonight. Road games tonight for the Rangers and Islanders. 0:10:23.240 --> 0:10:26.040 Fordam lost a tight one at Rhode Island eight two 0:10:26.080 --> 0:10:28.440 seventy nine, and the Big East Providence beat Yukon. The 0:10:28.480 --> 0:10:31.960 Huskies were fourteen now they've lost their last two. Georgetown, 0:10:32.040 --> 0:10:35.080 with a home loss to Villanova, has now lost twenty 0:10:35.160 --> 0:10:38.840 five consecutive Big East games under coach Patrick Ewing. Red 0:10:38.840 --> 0:10:41.600 Sox having allowed shortstov Xander Bogart's has become a free agent, 0:10:41.679 --> 0:10:44.600 losing him to San Diego, holding on to all star 0:10:44.720 --> 0:10:48.800 third baseman Raphael Dever's new contract eleven years, three hundred 0:10:48.800 --> 0:10:51.480 and thirty one million. The Jets closed after season Sunday 0:10:51.520 --> 0:10:54.360 in Miami. It seems as if every press conference for 0:10:54.440 --> 0:10:57.240 Jets coach Robert Salah is a discussion of where things 0:10:57.280 --> 0:11:01.400 stand with the bench quarterback Zach Wilson. Zack has got 0:11:01.480 --> 0:11:03.320 all the talent in the world, and we have all 0:11:03.320 --> 0:11:05.000 the confidence in the world. And and and it's just like 0:11:05.040 --> 0:11:07.360 I said, from this reset, and we're gonna we're gonna 0:11:07.400 --> 0:11:10.520 grind with him. We are and uh and through hell 0:11:10.520 --> 0:11:12.319 Ohio water. We're going to figure out how to how 0:11:12.320 --> 0:11:13.839 to get into what we know he can do. Mike 0:11:13.840 --> 0:11:16.480 White will be Stalla's starter. On Sunday, the Dolphins are 0:11:16.520 --> 0:11:19.880 likely to start rookie QB. Skyler Thompson Miami, who liked 0:11:19.920 --> 0:11:22.000 the Jets, has lost five and Row can still make 0:11:22.000 --> 0:11:24.280 the playoffs with a win and a New England lost 0:11:24.400 --> 0:11:28.120 in Buffalo. John Stash, Now we're Bloomberg Sports. Nathan, all right, John, 0:11:28.120 --> 0:11:30.079 thank you. In the Bloomberg Sports Report was brought to 0:11:30.120 --> 0:11:32.040 you by Audie. Don't let someone else drive off in 0:11:32.080 --> 0:11:34.600 the Audi model you've always wanted. Visit your local Tri 0:11:34.760 --> 0:11:37.760 state Audie dealer to get behind the wheel of yours today, 0:11:37.880 --> 0:11:41.840 or visit Autie Offers dot com for more information. Coming up, 0:11:41.840 --> 0:11:44.760 we'll look at what could break the standoff on Capitol 0:11:44.840 --> 0:11:49.440 Hill for House leader Kevin McCarthy. First futures are trading flat, 0:11:49.600 --> 0:11:52.199 SMP futures right now down to point, DOW futures down 0:11:52.240 --> 0:11:55.079 eighteen and NASDAC futures a lower by eight points ten. 0:11:55.160 --> 0:11:57.520 Your treasury is down seven thirty seconds. The yield on 0:11:57.520 --> 0:12:04.160 the benchmark three point seven. Live from coast to coast, 0:12:04.280 --> 0:12:07.640 from New York to San Francisco, Boston to Washington, d C. 0:12:08.080 --> 0:12:11.920 Nationwide on Sirius Examp, the Bloomberg Business app, and Bloomberg 0:12:12.000 --> 0:12:16.880 dot Com. This is Bloomberg Daybreak. Good morning. I'm Nathan Hagar, 0:12:16.880 --> 0:12:20.000 and the focus this morning once again remains on Washington, 0:12:20.080 --> 0:12:24.000 d C. The stair down continues between House Republican leader 0:12:24.080 --> 0:12:27.480 Kevin McCarthy and those twenty and now twenty or so 0:12:27.920 --> 0:12:32.320 GOP members who seemed determined to block McCarthy's bid to 0:12:32.360 --> 0:12:34.600 become the next Speaker of the House. Terry Haynes is 0:12:34.600 --> 0:12:37.640 with us this morning now, the founder of Pangea Policy. Terry, 0:12:37.679 --> 0:12:40.480 Good morning. I know we've talked before many times about 0:12:40.480 --> 0:12:43.800 the four factions you see in Washington, d C and 0:12:43.880 --> 0:12:46.440 the two party system, and we're certainly seeing two of 0:12:46.480 --> 0:12:51.520 those factions butt heads this week. What's it gonna take 0:12:51.960 --> 0:12:57.320 for Republicans to get along? Good morning, Nathan, Happy new year, 0:12:57.320 --> 0:13:00.840 and everybody on the program, Thanks for and thank you 0:13:00.880 --> 0:13:06.280 for remembering the four factions so very important. The what's 0:13:06.280 --> 0:13:08.880 that gonna take? Uh? You know, I don't see this 0:13:08.960 --> 0:13:13.199 as as close to ending as we begin today. I'll 0:13:13.200 --> 0:13:16.319 tell you for two reasons. One is kind of a 0:13:16.400 --> 0:13:21.280 lucy in the football program. Uh, the twenty or so dissidence. Uh. 0:13:21.840 --> 0:13:26.840 Uh have a bunch of demands. The demands constantly shift. Uh. 0:13:27.360 --> 0:13:29.240 You can't get to the end of the demands. So 0:13:29.360 --> 0:13:31.880 that's number one. Number two is what I think of 0:13:31.920 --> 0:13:34.880 as a super size problem. What they continue to want 0:13:34.880 --> 0:13:37.640 to what they talk about is, you know, kind of 0:13:37.640 --> 0:13:41.120 the lack of what i'll call kind of conservative focus 0:13:41.200 --> 0:13:45.640 off in the in the broader Republican conference on lots 0:13:45.679 --> 0:13:49.040 of different issues, spending issues, cultural issues, all kinds of 0:13:49.040 --> 0:13:51.360 other things. And what they really say they want when 0:13:51.360 --> 0:13:55.199 it comes down to it, is outside and outside influence 0:13:55.240 --> 0:13:58.720 on policy, on committees, on you know, kind of the 0:13:58.840 --> 0:14:02.719 levers that make things work. That's not an attack on McCarthy, 0:14:02.880 --> 0:14:05.280 that's an attack on the entire conference. In other words, 0:14:05.280 --> 0:14:09.520 they're directly attacking the other, their fellow members who who 0:14:09.559 --> 0:14:11.880 think that, you know, things can be worked out the 0:14:11.920 --> 0:14:14.600 way they are. Uh. So, you know, I don't see 0:14:14.600 --> 0:14:19.720 this as uh as as ending real soon. Um, you 0:14:19.760 --> 0:14:22.640 know there. You know, I think they're into backing themselves 0:14:22.680 --> 0:14:27.360 into the corner because what they're doing with their of 0:14:27.400 --> 0:14:29.520 the conference that they need in order to help make 0:14:29.520 --> 0:14:34.360 a deal is make is make the case that if 0:14:34.360 --> 0:14:38.200 we give in, then the House becomes ungovernable. So, you know, 0:14:38.320 --> 0:14:39.920 I think this is going to take a while, and 0:14:39.960 --> 0:14:43.160 I think increasingly what what folks ought to do is 0:14:43.480 --> 0:14:47.840 be looking past McCarthy and towards either a more consensus 0:14:47.880 --> 0:14:50.760 conservative or a more consensus centrist within the on the 0:14:50.800 --> 0:14:53.440 Republican side. Well, even if there is a consensus to 0:14:53.520 --> 0:14:57.200 come forward, Terry, would a consensus candidate be able to 0:14:57.280 --> 0:15:01.000 meet the demands that those twenty Republicans have? I mean, 0:15:01.200 --> 0:15:03.480 does it make a difference whether they're making the demands 0:15:03.480 --> 0:15:07.080 of McCarthy or anybody else. Yeah, well, a very good question. 0:15:07.080 --> 0:15:08.440 And part of the reason I think this is going 0:15:08.480 --> 0:15:12.800 to take a while is because I think the what 0:15:12.960 --> 0:15:17.800 the conference is is coming to the conclusion, uh, is 0:15:17.920 --> 0:15:22.160 that is that, you know, we just can't continue to 0:15:22.160 --> 0:15:25.400 to focus on the drift drift drip here. These fits 0:15:25.480 --> 0:15:28.000 never gonna be enough for these folks, uh. And what 0:15:28.080 --> 0:15:30.000 I think is gonna end up happening is if you 0:15:30.080 --> 0:15:32.800 end up with somebody other than McCarthy. Because it's very 0:15:32.800 --> 0:15:36.880 clear this isn't really about all the the rearranging the 0:15:36.920 --> 0:15:39.400 deck chairs on the Titanic stuff. This is a personal 0:15:39.480 --> 0:15:42.960 vendetta against McCarthy. Uh. If McCarthy goes away, a lot 0:15:42.960 --> 0:15:46.400 of these issues, a lot of these problems go away. So, uh, 0:15:46.480 --> 0:15:49.520 there's one reason why I think increasingly the Republican Conference 0:15:49.560 --> 0:15:52.000 is gonna look look to somebody else to be the 0:15:52.040 --> 0:15:54.440 speaker in this Congress. So are you saying that they're 0:15:54.480 --> 0:15:57.400 gonna just gonna drop their demands if McCarthy steps aside? 0:15:58.280 --> 0:15:59.960 But yeah, I think a lot of the problems will 0:16:00.080 --> 0:16:03.120 be considered to go away if there's another personality in 0:16:03.160 --> 0:16:06.880 the speaker's chair. Yes, Okay, what what is the possibility 0:16:06.960 --> 0:16:10.000 that we could see some kind of deal made with Democrats? 0:16:10.160 --> 0:16:13.320 I mean that's something that McCarthy had warned could be 0:16:13.320 --> 0:16:15.560 a scenario if this continues to play out. Could we 0:16:15.600 --> 0:16:17.560 could we see a situation where we have some kind 0:16:17.600 --> 0:16:21.840 of I guess American version of a coalition government come 0:16:21.880 --> 0:16:25.560 forward in Congress. Yeah, it's a very smart question. I 0:16:25.560 --> 0:16:28.200 think you know you you played a clip from former 0:16:28.200 --> 0:16:33.240 Congressman Tim Romer, very savvy former Democrats from Indiana. UH, 0:16:33.320 --> 0:16:37.120 and Tim Tim's point was very simple that you know, 0:16:37.120 --> 0:16:39.600 there's actually no incentive for Democrats don't want to work 0:16:39.640 --> 0:16:42.600 on this. Number one UH Number two UH. I know 0:16:42.680 --> 0:16:46.720 what's one thing that's getting play at least on on 0:16:46.760 --> 0:16:50.400 the Bloomberg site is a proposal by for a current 0:16:50.440 --> 0:16:54.480 Congressman Brad Sherman of California that they could probably work 0:16:54.560 --> 0:16:59.520 with UH with Republicans if they'd agree to UH TO 0:17:00.000 --> 0:17:04.280 and increase the debt ceiling deal on spending, you know, 0:17:04.320 --> 0:17:08.040 not shut the government down that sort of thing. UH. 0:17:08.400 --> 0:17:11.800 Congressman Sherman is always a bit of a freelancer, so 0:17:11.840 --> 0:17:13.960 I wouldn't take this as it wouldn't take his view 0:17:14.000 --> 0:17:18.800 as some sort of official Democratic position at all. Secondly, UM, 0:17:18.840 --> 0:17:21.159 you know that doesn't work with the vast majority of 0:17:21.160 --> 0:17:24.560 the conference. The idea that they give up effective control 0:17:24.640 --> 0:17:28.360 on spending in debt limit UH is something that the 0:17:28.400 --> 0:17:32.320 Republicans wouldn't accept. So that's a nonstarter, all right. Terry Haynes, 0:17:32.560 --> 0:17:35.840 founder of Pangia Policy. We'll see how things unfold today 0:17:35.880 --> 0:17:39.479 as we get ready for round seven voting for the 0:17:39.520 --> 0:17:42.760 next Speaker of the House. As we've been saying all week, 0:17:42.840 --> 0:17:44.399 it's been a hundred years since we've been in a 0:17:44.400 --> 0:17:47.960 position like this, and it continues to unfold. In Washington, 0:17:48.040 --> 0:17:50.360 d C. Terry Haynes, founder of Pangia Policy, with us 0:17:50.680 --> 0:17:54.199 this morning. Future is flat. SMP futures little changed to 0:17:54.200 --> 0:17:57.320 the upside down. Futures down three points, NAZAC futures down 0:17:57.480 --> 0:18:04.520 one point. This Bloomberg Markets Headlines and breaking news twenty 0:18:04.520 --> 0:18:07.399 four hours a day at Bloomberg dot Com, the Bloomberg 0:18:07.400 --> 0:18:17.240 Business and at Bloomberg Quicktake. She's a Bloomberg Business Flash 0:18:17.640 --> 0:18:20.480 and I'm Karen Moscow US not Index. Futures are little 0:18:20.560 --> 0:18:23.960 change this morning. As investors balanced further signs of China's 0:18:24.000 --> 0:18:27.600 reopening with conscious commentary from the Federal Reserve's latest meeting. 0:18:27.920 --> 0:18:31.200 European shares paired their declines with the report showing Euro 0:18:31.280 --> 0:18:34.320 Area producer prices film more than expected in November. We 0:18:34.440 --> 0:18:36.440 checked the markets all day long here on Bloomberg again, 0:18:36.520 --> 0:18:38.920 futures are little change. The ten year treasury down six 0:18:38.960 --> 0:18:41.600 thirty seconds. He had three point seven zero percent, and 0:18:41.680 --> 0:18:44.200 they yield in the two year four point three eight percent. 0:18:44.520 --> 0:18:46.920 And that's a Bloomberg Business Flash. Now, here's Michael Barr 0:18:47.000 --> 0:18:49.119 with Moore on what's going on around the world. Uncle, 0:18:49.119 --> 0:18:51.400 good morning, Good morning, Karen. The U S House will 0:18:51.440 --> 0:18:55.520 resume session later today after Kevin McCarthy and GOP dissidents 0:18:55.840 --> 0:18:59.000 failed to reach a deal on the California Republicans bid 0:18:59.000 --> 0:19:02.400 to become speaker. Today is day three of the standoff 0:19:02.440 --> 0:19:06.359 between McCarthy and twenty colleagues withholding the support he needs 0:19:06.359 --> 0:19:09.520 for the job. Six votes have failed to elect a speaker. 0:19:09.920 --> 0:19:14.879 Pulpe frances is honoring his predecessor, Benedict. St. Francis is 0:19:14.920 --> 0:19:18.240 presiding over a mass for Benedict before thousands of mourners 0:19:18.240 --> 0:19:21.400 in St. Peter's Square in the NBA. The next one, 0:19:21.520 --> 0:19:24.920 the Nets and Warriors lost in hockey. The Devil's won. 0:19:25.359 --> 0:19:27.879 Global news twenty four hours a day on air and 0:19:28.040 --> 0:19:31.399 on Bloomberg Quicktake, powered by more than twenty seven hundred 0:19:31.440 --> 0:19:33.920 journalists and analysts, are more than a hundred twenty countries. 0:19:34.320 --> 0:19:37.000 Michael Barn, this is Bloomberg, Nathan. Thanks Michael. It's five 0:19:37.080 --> 0:19:39.199 twenty three on Wall Street. I'm Nathan Hagar. This is 0:19:39.320 --> 0:19:42.320 Bloomberg Daybreak. We're watching shares of Amazon this morning, they 0:19:42.400 --> 0:19:44.719 have two and a half percent in the pre market 0:19:44.920 --> 0:19:47.840 on we're now confirmed from CEO Andy Jesse that the 0:19:47.840 --> 0:19:51.160 e commerce giant will lay off more than eighteen thousand employees. 0:19:51.160 --> 0:19:55.200 That's nearly twice as many as previously expected. Potential signed 0:19:55.240 --> 0:19:59.160 the tech industry slump maybe getting worse. Joining us now 0:19:59.200 --> 0:20:01.320 for more on this is a quick take. Corres Fund 0:20:01.320 --> 0:20:04.840 and Alex Webb Alex so, we knew Amazon was tightening 0:20:04.840 --> 0:20:07.879 its belt. Should this even bigger round of job cuts 0:20:08.000 --> 0:20:11.200 come as a surprise for investors? Well, it clearly has 0:20:11.520 --> 0:20:14.160 come as a bit of a surprise, given the share reaction. 0:20:14.240 --> 0:20:16.320 They had telegraphed that would have been reported there was 0:20:16.359 --> 0:20:18.000 going to be something in the order of ten thousand 0:20:18.040 --> 0:20:21.359 DROB cuts, so it's almost double that. Let's not forget though, 0:20:21.400 --> 0:20:23.880 that you know, Amazon has in the order of one 0:20:23.920 --> 0:20:28.400 and a half million employees globally. It added between twenty 0:20:28.440 --> 0:20:32.080 two a million additional head count that's equivalent to the 0:20:32.200 --> 0:20:34.720 entire U S Army, So you know, compared to that, 0:20:34.880 --> 0:20:38.240 eighteen thousand is still a relatively small percentage to people 0:20:38.320 --> 0:20:40.800 being affected by the job cuts. It's not small deal 0:20:40.840 --> 0:20:44.439 for them, but it means that the share price reaction 0:20:44.480 --> 0:20:46.960 two and a half percent when it's eight thousand of 0:20:47.040 --> 0:20:49.520 the one and a half one a half million, seems 0:20:49.520 --> 0:20:52.080 maybe a little bit overplayed. Don't forget, of course, they're 0:20:52.080 --> 0:20:56.119 also talking about some real estate pair backs. Amazon's expansion 0:20:56.200 --> 0:20:58.840 during the lockdowns wasn't just headcount. They also added a 0:20:58.880 --> 0:21:01.560 huge amount of warehousing, and the general consensus being that 0:21:01.560 --> 0:21:05.160 they expanded too quickly. Now so it seems as though 0:21:05.359 --> 0:21:09.320 this is just a reshuffle of sort of a return 0:21:10.200 --> 0:21:13.360 back to a pre pandemic sort of normal for Amazon. 0:21:13.800 --> 0:21:16.440 Is that how we should be looking at it. That's 0:21:16.440 --> 0:21:19.399 half of it. Look, what happened was with that expansion 0:21:19.480 --> 0:21:21.600 is if you look at the revenue per employee, so 0:21:21.680 --> 0:21:24.000 you average out the total revenue by the total head count, 0:21:24.240 --> 0:21:27.560 revenue per employee had actually declined over the past few years, 0:21:27.600 --> 0:21:30.840 which kind of shows how they had expanded too quickly. 0:21:31.240 --> 0:21:34.560 But don't forget. We also then have the broader interest 0:21:34.640 --> 0:21:37.480 rate story, which has helped bring the Amazon share price down. 0:21:37.480 --> 0:21:41.000 It's lost trillion dollars in market cap over the past 0:21:41.000 --> 0:21:45.040 few months. That means that management probably feels the need 0:21:45.080 --> 0:21:47.520 to do something. It's not entirely Amazon's fault that partly 0:21:47.720 --> 0:21:50.440 to do with the recovery post pandemic, but it's also 0:21:50.480 --> 0:21:52.160 to do with, you know, investors being able to find 0:21:52.400 --> 0:21:57.080 good returns or more reliable returns elsewhere. So you look 0:21:57.080 --> 0:21:59.560 at those two factors, the operational impact and then the 0:21:59.600 --> 0:22:03.840 broader stock market performance, and management probably then feels on 0:22:03.920 --> 0:22:05.600 the one had the need to do something, but also 0:22:05.640 --> 0:22:08.439 the opportunity to right size what they would see as 0:22:08.520 --> 0:22:11.000