WEBVTT - Bloomberg Daybreak: April 19, 2022 - Hour 2 (Radio) 0:00:02.880 --> 0:00:05.880 Live from the Bloomberg indirector Workers studios. This is Bloomberg 0:00:05.920 --> 0:00:09.080 day Break for a Tuesday, April nineteen two. Coming up 0:00:09.080 --> 0:00:11.879 this hour, Mukraine says Russia's assault on the Don Boss 0:00:11.920 --> 0:00:14.920 region is underway. Most major US airlines you're no longer 0:00:14.920 --> 0:00:18.400 requiring mess on domestic flights. A top FED official says 0:00:18.400 --> 0:00:20.840 a seventy five basis point hike may be in play, 0:00:21.040 --> 0:00:24.720 and Netflix, IBM, and Johnson and Johnson all report earnings today. 0:00:24.920 --> 0:00:27.080 New York Mayor Adam says the city is not ready 0:00:27.160 --> 0:00:29.640 yet to bring back into or mask mandates. Plus there's 0:00:29.680 --> 0:00:31.720 a rise in migrants attempted to cross in the US 0:00:31.840 --> 0:00:34.960 Mexico border. I'm Michael bar more ahead, I'm done finished 0:00:34.960 --> 0:00:37.000 our sports. Yankees are in Detroit, that I'd met them, 0:00:37.040 --> 0:00:39.240 a double head with the Giants, NBA playoff wins for 0:00:39.320 --> 0:00:43.720 Philaelpia Dallas and Golden Speed. That's all straight ahead on 0:00:43.880 --> 0:00:49.600 Bloomberg day Break on Bloomberg eleven, FREEO, New York, Bloomberg one, Washington, 0:00:49.760 --> 0:00:53.840 d C, Bloomberg one O six one, Boston, Bloomberg nine sixties, 0:00:53.880 --> 0:00:58.240 San Francisco, Sirius x M one nineteen and around the world. 0:00:58.280 --> 0:01:01.800 On Bloomberg Radio dot com via the Bloomberg Business At 0:01:08.440 --> 0:01:11.399 and good morning. I'm Karen Moscow, I'm Nathan Hagar. Bloomberg 0:01:11.440 --> 0:01:13.800 Daybreak is brought to you by I b KR Investment 0:01:13.800 --> 0:01:17.200 Advisors switched to Interactive Brokers for lowest cost global trading 0:01:17.200 --> 0:01:20.440 and turnkey custody solutions, no ticket charges and no conflicts 0:01:20.440 --> 0:01:23.040 of your interests at i b k R dot com 0:01:23.080 --> 0:01:26.679 slash r i A and US futures are lower this 0:01:26.800 --> 0:01:28.680 morning at six so one on Wall Street, and we 0:01:28.800 --> 0:01:31.200 checked the markets every fifteen minutes throughout the trading day. 0:01:31.240 --> 0:01:33.479 On Bloomberg S and P Future is down about ten 0:01:33.520 --> 0:01:36.360 points down. Future is down fifty one. Now's day, Future 0:01:36.440 --> 0:01:39.760 is down forty four. Ten year Treasury down eight thirty seconds, 0:01:39.760 --> 0:01:42.200 held two point eight eight percent yield on the two 0:01:42.280 --> 0:01:45.399 year two point four or five percent. Nathan, all right, Karen, 0:01:45.440 --> 0:01:47.240 we'll have more on the markets in a minute. First, 0:01:47.319 --> 0:01:50.559 the latest on the war. Russia's assault on Ukraine's don 0:01:50.600 --> 0:01:55.000 Boss region has begun. Ukrainian President Vladimir Selinsky says they 0:01:55.000 --> 0:01:57.720 will not give up without a fight. Amy Morris has 0:01:57.760 --> 0:02:02.080 the latest from our Bloomberg newsroom in Washington. Zelinsky said 0:02:02.120 --> 0:02:04.720 Russian forces have launched a new campaign to conquer the 0:02:04.800 --> 0:02:08.720 dun Boss region in the east of Ukraine. A significant 0:02:08.760 --> 0:02:11.400 part of the entire Russian army is now concentrated on 0:02:11.480 --> 0:02:14.720 this offensive. No matter how many Russian troops are driven there, 0:02:14.960 --> 0:02:17.960 we will fight. Meanwhile, the US military will start training 0:02:18.040 --> 0:02:21.040 Ukrainian troops on how to operate the howitzers that the 0:02:21.120 --> 0:02:25.080 US is sending Ukraine. Pentagon spokesman John Kirby that training 0:02:25.080 --> 0:02:28.399 will occur outside of Ukraine and then they we reintroduced 0:02:28.400 --> 0:02:30.840 back into their country to train their colleagues. This as 0:02:30.880 --> 0:02:34.640 the remaining defenders of Mariople are surrounded by Kremlin forces, 0:02:34.639 --> 0:02:38.120 but they have not surrendered that key port city in Washington. 0:02:38.200 --> 0:02:41.360 I'm Amy Morris Bloomberg Daybreak, Amy, thank you all. President 0:02:41.440 --> 0:02:44.400 Joe Biden will hold a call with key allies later 0:02:44.440 --> 0:02:47.519 today to discuss Ukraine. Meanwhile, the US has backed off 0:02:47.560 --> 0:02:50.880 any suggestion that its officials would boycott Group of Twenty 0:02:50.960 --> 0:02:54.120 meetings this week if Russia takes part. The Treasury Department 0:02:54.160 --> 0:02:58.320 says Secretary Jannet Yellen will participate in some sessions this week. Well. 0:02:58.360 --> 0:03:00.160 The war has in part lad the World Bank to 0:03:00.200 --> 0:03:03.880 cut its economic outlook Karen, and the Bank's chief economist 0:03:03.919 --> 0:03:07.080 Carmen Reinhardt, added she would not rule out further downgrades. 0:03:07.360 --> 0:03:10.240 In an interview with Bloomberg, Reinhart laid out the downside 0:03:10.320 --> 0:03:14.919 risks facing the global economy, array of disruptions from China's 0:03:14.960 --> 0:03:20.079 new lockdowns, from the impacts UH yet to be fully 0:03:20.200 --> 0:03:25.600 felt of the Russia Ukraine war on on food prices, 0:03:25.680 --> 0:03:30.720 on global supply chains, and if you know, bad came 0:03:30.760 --> 0:03:34.720 to worse, UH, could there be another episode of financial contagion? 0:03:35.600 --> 0:03:38.240 The World Banks chief economist Carmen Reinhardt says growth will 0:03:38.240 --> 0:03:40.800 slow to three point two percent. That's down from a 0:03:40.880 --> 0:03:45.560 January prediction of four. Meanwhile, Nathan St. Louis FED President 0:03:45.640 --> 0:03:48.480 James Bullard said the FED needs to move quickly to 0:03:48.560 --> 0:03:50.920 raise rates to around three and a half percent this year, 0:03:50.920 --> 0:03:53.200 and he also says the Central Bank should not rule 0:03:53.240 --> 0:03:56.520 out rate increases of seventy five basis points to find inflation. 0:03:56.800 --> 0:04:03.360 I would point out that UH cycle UH where we 0:04:03.440 --> 0:04:06.640 raised the policy rate three basis points in the year, 0:04:07.240 --> 0:04:09.880 and in that cycle, UH there was a si many 0:04:09.920 --> 0:04:13.280 five basis points UH increase at one point UM, so 0:04:13.320 --> 0:04:15.560 I wouldn't rule it out, but it's not my base 0:04:15.680 --> 0:04:18.800 case here. Seeing the West. FED President James Bullard also 0:04:18.880 --> 0:04:21.760 said that talks of the US recession, it's premature. Well 0:04:21.800 --> 0:04:24.680 Bullard tnk is comments may be piling on to weakness 0:04:24.720 --> 0:04:28.200 for a traditional haven currency. The Japanese yen is weaker 0:04:28.240 --> 0:04:31.520 against the dollar for a thirteenth straight day. It's extending 0:04:31.560 --> 0:04:34.120 its longest losing streak in at least a half century. 0:04:34.240 --> 0:04:38.080 Right now the ends trading at point three five against 0:04:38.080 --> 0:04:40.640 the dollar. Now to the latest on the pandemic Nathan 0:04:40.680 --> 0:04:43.520 and a major development in the air, the Transportation Security 0:04:43.520 --> 0:04:46.920 Administration saying it will no longer enforce the COVID mask 0:04:47.000 --> 0:04:50.640 mandate on public transportation, Bloomberg said Baxter has the story 0:04:51.040 --> 0:04:53.719 this after a Florida judge struck down the remainder of 0:04:53.720 --> 0:04:56.880 the mandate, saying the CDC went too far. The t 0:04:57.120 --> 0:04:59.120 s A says for now it will not enforce the 0:04:59.200 --> 0:05:02.799 masking bandate. White House Folks Women Jimsaki says the ruling 0:05:02.839 --> 0:05:05.400 is disappointing. We also think the mask commandate should be 0:05:05.440 --> 0:05:08.159 in place and that it's safer for individuals for flying 0:05:08.200 --> 0:05:11.120 to continue to wear masks. So the major US air 0:05:11.160 --> 0:05:14.040 carriers have now made masking optional for the time being, 0:05:14.120 --> 0:05:18.320 Delta United Southwest Alaska American. Some of the international flights 0:05:18.320 --> 0:05:21.760 will continue to have the mandate for now. In San Francisco, 0:05:21.760 --> 0:05:24.159 I'm at Baxter Bloomberg, Gay Break all Right and thank you. 0:05:24.160 --> 0:05:26.800 And Uber also announced this morning that It's riders and 0:05:26.920 --> 0:05:29.960 drivers will no longer be required to wear masks. Turning 0:05:29.960 --> 0:05:32.000 new corporate earnings this morning, we hear from more than 0:05:32.040 --> 0:05:34.760 a dozen companies in the SMP five hundred today. They 0:05:34.800 --> 0:05:38.160 include IBM, Johnson and Johnson, and Netflix. Here with the 0:05:38.200 --> 0:05:41.920 Netflix preview is Bloomberg's Tom Busby. Shares of the streaming 0:05:42.000 --> 0:05:44.880 leader have taken a real beating since its last earnings 0:05:44.920 --> 0:05:47.839 report in January, down about thirty three percent. That follows 0:05:47.839 --> 0:05:51.680 a disappointing outlook for subscriber growth amid a flood of competition, 0:05:52.040 --> 0:05:54.919 but key to its first quarter results out later today, 0:05:54.960 --> 0:05:58.000 the impact of a recent price increase and the suspension 0:05:58.000 --> 0:06:00.680 of service in Russia, and both could have a negative 0:06:00.680 --> 0:06:03.960 impact on results. Still, forecast call for two point eight 0:06:03.960 --> 0:06:06.800 million subscriber ads for a total of nearly two hundred 0:06:06.839 --> 0:06:09.960 twenty five million worldwide, look for earnings per share of 0:06:10.000 --> 0:06:13.839 two dollars cents and revenue of seven point nine five 0:06:13.920 --> 0:06:17.560 billion dollars. Tom Busby Bloomberg Daybreak, All right, Tom, thank 0:06:17.600 --> 0:06:20.039 you all new developments this morning. And Elon Musk forty 0:06:20.080 --> 0:06:22.279 three billion dollar pursuit of Twitter, and we get the 0:06:22.320 --> 0:06:24.960 latest line from Bloomberg's Ready too Young, good morning, Ready 0:06:24.960 --> 0:06:28.479 to Good morning, Karen Bloomberg. Sources say Apollo Global Management 0:06:28.560 --> 0:06:31.760 is considering backing a potential deal for Twitter and could 0:06:31.800 --> 0:06:35.240 provide Elon Musk or another bidder like private equity firm 0:06:35.279 --> 0:06:38.640 Toma Bravo, with equity or debt to support an offer. 0:06:38.960 --> 0:06:41.520 The participation could come in the form of credit or 0:06:41.560 --> 0:06:45.360 preferred equity. Of filing from last week shows Morgan Stanley 0:06:45.440 --> 0:06:48.919 is advising Musk and his unsolicited offer to take Twitter private. 0:06:49.240 --> 0:06:51.920 Twitter is enlisting the help of Goldman Sachs and JP 0:06:52.040 --> 0:06:55.760 Borgan Chase to respond to Musk's hostile bid Live in 0:06:55.800 --> 0:06:58.799 New York. I'm Ranita Young Bloomberg day Break, Nita, Thanks, 0:06:58.800 --> 0:07:02.119 and the bullish stock call. Musk's current company, Tesla Cathy 0:07:02.200 --> 0:07:05.120 Woods Our Investment Management now expects shares of the electric 0:07:05.120 --> 0:07:07.960 car maker to more than quadruple to forty six hundred 0:07:08.000 --> 0:07:11.480 dollars by six would has long been an ardent supporter 0:07:11.560 --> 0:07:14.280 of Tesla. Andy elon Musk. Tesla is the largest holding 0:07:14.360 --> 0:07:18.440 in Woods flagship our Connovation et F. You're listening to 0:07:18.520 --> 0:07:24.520 Bloomberg Daybreak and it's now six o seven on Wall 0:07:24.560 --> 0:07:26.760 Street forty one degrees in Central Park. We have an 0:07:26.760 --> 0:07:29.880 accident on the inbound upper level of the George Washington Bridge. 0:07:29.920 --> 0:07:32.760 Details coming up in traffic. First Michael Barr with what 0:07:32.840 --> 0:07:34.760 else is going on in New York and around the world. 0:07:34.800 --> 0:07:37.720 Good morning, Michael, Good morning Nathan. Now, then an indoor 0:07:37.760 --> 0:07:41.200 mask mandate is back in place in Philadelphia. Will New 0:07:41.280 --> 0:07:44.520 York City do the same? Cope nineteen case numbers arising 0:07:44.520 --> 0:07:48.360 in several cities. Mayor Eric Adams, who had been quarantining 0:07:48.480 --> 0:07:51.800 due to having the virus, was asked about mask rules 0:07:51.800 --> 0:07:55.800 in the city. We are advising New Yorker is uh 0:07:55.840 --> 0:07:58.120 to wear a mask, but we're not at the point 0:07:58.160 --> 0:08:04.040 of mandate right now. We hospitalizations at a steady level, 0:08:04.600 --> 0:08:07.800 death side of steady level. Mayor Adams says, we are 0:08:07.920 --> 0:08:11.920 encouraging New Yorkers to wear the mask if you feel uncomfortable. 0:08:12.280 --> 0:08:15.000 The Supreme Court is declining to wait into a lawsuit 0:08:15.080 --> 0:08:18.440 filed by four New York City public school employees. It's 0:08:18.480 --> 0:08:21.960 over a policy that they'd be vaccinated against COVID. Nineteen 0:08:22.640 --> 0:08:25.960 judge has ruled Amazon must reinstate a former employee who 0:08:26.000 --> 0:08:28.800 was fired in the early days of the pandemic after 0:08:28.920 --> 0:08:31.720 leading a protest in Staaten Island calling for the company 0:08:31.760 --> 0:08:35.560 to do more to protect workers against COVID. The judge 0:08:35.640 --> 0:08:39.240 ruled that Amazon must offer the former worker, Gerald Bryson, 0:08:39.600 --> 0:08:42.679 his job back, as well as lost wages and benefits. 0:08:43.120 --> 0:08:46.079 The Biden administration is pledging not to litter in space. 0:08:46.600 --> 0:08:49.600 Vice President Harris said the US would no longer engage 0:08:49.600 --> 0:08:53.520 in anti satellite missile testing in space. Harris explained the 0:08:53.559 --> 0:08:57.040 testing causes to breed and it's dangerous to research and 0:08:57.080 --> 0:09:01.679 facilities like the International Space Station. A piece of space 0:09:01.800 --> 0:09:07.320 debris the size of a basketball, which travels at thousands 0:09:07.320 --> 0:09:12.880 of miles per hour, would destroy a satellite. Even a 0:09:13.080 --> 0:09:16.720 piece of debris as small as a grain of sand 0:09:17.760 --> 0:09:22.640 could cause serious damage. Vice President Harris says we are 0:09:22.720 --> 0:09:25.400 the first nation to make such a commitment and called 0:09:25.440 --> 0:09:28.600 on other nations to follow. The number of migrants attempting 0:09:28.600 --> 0:09:32.120 to cross the US Mexico border has surged in recent weeks. 0:09:32.160 --> 0:09:35.360 It comes as the US prepares for even larger numbers 0:09:35.360 --> 0:09:38.679 with the expected lifting of a pandemic era order that 0:09:38.720 --> 0:09:42.959 turned away asylum seekers. Immigration authorities stopped migrants more than 0:09:42.960 --> 0:09:46.960 two d one thousand times along the southwest border in March, 0:09:47.080 --> 0:09:50.240 the highest in nearly two decades. Global News twenty four 0:09:50.280 --> 0:09:52.560 hours a day on here and on Bloomberg quick Take, 0:09:52.840 --> 0:09:55.839 powered by more than twenty seven hundred journalists and analysts 0:09:55.840 --> 0:09:58.160 in more than a hundred twenty countries. I'm Michael bar 0:09:58.320 --> 0:10:05.400 This is Bloomberg, Nathan. Thank you, Michael don't know. To 0:10:05.440 --> 0:10:07.440 six ten on Wall Street. Time for the Bloomberg Sports 0:10:07.520 --> 0:10:09.719 Update with John Steenshaw. All right, Nathan. First of the 0:10:09.760 --> 0:10:12.559 game tunes first round of the NBA Playoffs in Philadelphia 0:10:12.640 --> 0:10:15.640 six or second straight rout of Toronto. On ninety seven, 0:10:15.720 --> 0:10:18.439 Joe l MB scored thirty one in Dallas. The MAVs 0:10:18.480 --> 0:10:21.760 were again without their star Luka Dontcheon, but Jalen Brunson 0:10:21.840 --> 0:10:24.199 poured in a career high forty one points one ten 0:10:24.240 --> 0:10:26.920 one oh four over Utah to tie that series of one. 0:10:26.960 --> 0:10:29.880 Golden State Fights twenty over Denverse Steph Curry off the 0:10:29.960 --> 0:10:32.800 bench to score thirty four points in just twenty three minutes, 0:10:33.080 --> 0:10:35.600 and the Warriors go up to zip the Celtics. Mark 0:10:35.760 --> 0:10:38.520 Is Smart named Defensive Player of the Year, first guard 0:10:38.640 --> 0:10:42.080 to win the awards, and Gary Peyton six and Peyton, 0:10:42.120 --> 0:10:45.160 the Hall of Famer, went to Celtics practice in Boston 0:10:45.200 --> 0:10:47.959 to tell Smart he had won Celtics Nets Game two 0:10:48.080 --> 0:10:51.640 tomorrow in Boston. Rangers are the Winnipeg Jets tonight that 0:10:51.720 --> 0:10:54.160 they guard in Carolina. Won last night to the Keynes 0:10:54.600 --> 0:10:56.880 lead the Rangers by two points as they battle to 0:10:56.880 --> 0:11:00.319 win the Metropolitan Division. Mets and Giants reined out single 0:11:00.360 --> 0:11:03.960 admission doubleheader starts just after three o'clock. Tyler McGill yet 0:11:04.040 --> 0:11:06.240 to allow a run and two starts. Goes in the 0:11:06.320 --> 0:11:09.160 opener and Max scherz Or pitches the nightcap his first 0:11:09.240 --> 0:11:12.280 met start at City Field. Garrett Cole for the Yankees 0:11:12.360 --> 0:11:16.120 tonight in Detroit. Jake Carrietta, retiring at age thirty six, 0:11:16.200 --> 0:11:19.120 struggled in recent years. Arietta won the National League Cy 0:11:19.240 --> 0:11:22.000 Young Award back in two thousand fifteen while with the Cubs. 0:11:22.280 --> 0:11:24.840 NFL Draft starts a week from Thursday in Las Vegas 0:11:24.880 --> 0:11:27.400 been a lot of quarterback movement this offseason. Could be 0:11:27.480 --> 0:11:30.559 another move before the draft of Carolina still looking for 0:11:30.600 --> 0:11:32.960 a QB and said to be trying to acquire Baker 0:11:33.080 --> 0:11:37.600 Mayfield from Cleveland Browns Evenue QB Deshaun Watson. Speaking of quarterbacks, 0:11:37.640 --> 0:11:40.480 the latest edition of Made for TV Golf would be 0:11:40.600 --> 0:11:43.560 June one in Las Vegas. Tom Brady and Aaron Rodgers 0:11:43.840 --> 0:11:47.480 versus Patrick Mahomes and Josh Allen, John Stash Howard Bloomberg 0:11:47.480 --> 0:11:50.480 Sports Nathan Okay, John, thank you. SMP future is now 0:11:50.600 --> 0:11:54.440 down thirteen points, Stout futures down seventy six, DANSAC futures 0:11:54.480 --> 0:11:57.240 lower by sixty four points. The tenure treasury is down 0:11:57.360 --> 0:12:00.600 nine thirty seconds. The yield very close to two point 0:12:00.679 --> 0:12:08.360 eight nine percent. This is Bloomberg Bloomberg eleven three or 0:12:08.360 --> 0:12:10.640 whether cill under floodwatch till late this morning. It'll turn 0:12:10.720 --> 0:12:14.000 mostly sunny this afternoon, breezy, mid fifties for highs upper 0:12:14.040 --> 0:12:17.680 fifties tomorrow. Clouds returned Thursday with highs in the low sixties. 0:12:17.760 --> 0:12:24.120 Right now forty one in Central Park Markets. Headlines and 0:12:24.280 --> 0:12:27.280 breaking news twenty four hours a day at Bloomberg dot 0:12:27.320 --> 0:12:30.440 Com the Bloomberg Business at and at Bloomberg quick Take, 0:12:30.679 --> 0:12:40.000 This is a Bloomberg business flash and I'm Karin Moscow. 0:12:40.120 --> 0:12:43.520 You west Dock Index futures are lower along with European shares, 0:12:43.559 --> 0:12:46.120 while bonds around the globe slump as investors way the 0:12:46.200 --> 0:12:49.640 prospect of aggressive policy action to curb inflation. We checked 0:12:49.640 --> 0:12:52.240 the markets every fifteen minutes throughout the trading day on 0:12:52.320 --> 0:12:54.800 Bloomberg s and P future is down about nine points 0:12:54.840 --> 0:12:57.880 and down futures down thirty eight, NASTAG futures down forty two. 0:12:58.320 --> 0:13:00.880 The decks in Germany's down one percent. The ten year 0:13:00.920 --> 0:13:03.920 treasury down eight thirty seconds, yield two point eight eight percent, 0:13:04.360 --> 0:13:06.880 yield on the two year two point four six percent. 0:13:07.320 --> 0:13:09.679 Nine x Screwed oil is down one point six percent 0:13:09.760 --> 0:13:12.000 on a dollar seventy three and a hundred six dollars 0:13:12.040 --> 0:13:14.640 forty eight cents of barrel comics gold is down four 0:13:14.720 --> 0:13:17.439 ten percent or eight dollars thirty cents in nineteen seventy 0:13:17.520 --> 0:13:20.040 eight an ounce, the euro one point oh seven nine 0:13:20.080 --> 0:13:22.440 one against the dollar, British found one point three zero 0:13:22.520 --> 0:13:25.120 one eight and the en one eight point three two 0:13:25.440 --> 0:13:28.440 and bitcoin this morning it's now higher up a tenth 0:13:28.480 --> 0:13:31.880 of a percent at forty thousand, seven hundred twenty dollars. 0:13:32.200 --> 0:13:34.240 And today we are getting reports on housing starts, in 0:13:34.280 --> 0:13:36.720 building permits at eight thirty Wall Street Time and Netflix 0:13:36.760 --> 0:13:40.120 among companies scheduled to report earnings today. That's a Bloomberg 0:13:40.200 --> 0:13:42.800 business flash. Now here's Michael bar with Moore on what's 0:13:42.840 --> 0:13:45.640 going on around the world. Michael Karen, thank you very much. 0:13:45.679 --> 0:13:49.480 After days of regrouping and reinforcing, the Russian military began 0:13:49.520 --> 0:13:52.439 a new phase of the war in Ukraine. Training and 0:13:52.520 --> 0:13:55.520 officials said that the Kremlin's forces launched a full scale 0:13:55.600 --> 0:13:59.040 ground offensive to take control of the country's industrial heart 0:13:59.120 --> 0:14:02.320 land and down the screen agent. Most major US airlines 0:14:02.320 --> 0:14:05.240 are no longer requiring travelers or employees to wear face 0:14:05.360 --> 0:14:09.720 coverings on domestic and some international flights. The decisions came 0:14:09.880 --> 0:14:13.320 after a US judge overturned the federal mandate for passengers 0:14:13.400 --> 0:14:16.720 to cover their faces. In MLB, the Red Sox lost 0:14:16.800 --> 0:14:20.680 the A's Meat the Orioles five one. In the NBA Playoffs, 0:14:20.720 --> 0:14:22.840 The Warriors beat the Duggets to leave the series two 0:14:22.880 --> 0:14:26.320 games to zip. In the NHL, the Devil's and Capitals one. 0:14:26.720 --> 0:14:29.160 Global News twenty four hours a day on air and 0:14:29.360 --> 0:14:32.320 on Bloomberg Quick Take, powered by more than twenty seven 0:14:32.400 --> 0:14:35.000 hundred journalists and lest more than a hundred twenty countries. 0:14:35.400 --> 0:14:38.880 Michael Barren, this is Bloomberg. Nay, Okay, Michael, thank you. 0:14:38.960 --> 0:14:41.320 It is six nineteen on Wall Street Live from the 0:14:41.360 --> 0:14:45.320 Bloomberg Interactive Brokers Studios. This is Bloomberg Daybreak. We're really 0:14:45.360 --> 0:14:47.600 pleased to be speaking this morning with liz Anne Saunders, 0:14:47.720 --> 0:14:50.920 chief investment strategist at Charles Schwab. Great to have you 0:14:51.000 --> 0:14:53.360 on with us this morning, Liz, and and obviously a 0:14:53.440 --> 0:14:55.960 lot of attention this morning on the comments we heard 0:14:56.080 --> 0:14:59.280 yesterday from the President of the St. Louis Fed, James Bullard, 0:14:59.320 --> 0:15:01.960 obviously a very a vocal hawk, but he's saying, seventy 0:15:02.000 --> 0:15:05.000 five basis points, you can't rule it out next month. 0:15:05.600 --> 0:15:09.440 Is that talk to you? Pay attention to? Um? Yeah, 0:15:09.600 --> 0:15:11.880 I think you know. This parlor game that's been going 0:15:11.960 --> 0:15:14.480 on of how many rate hikes to expect the full year, 0:15:14.760 --> 0:15:17.720 I think miss is what the Fed is attempting to do, 0:15:17.880 --> 0:15:21.160 which is front end load many of these rate hikes. Now, 0:15:21.160 --> 0:15:24.440 whether it's seventy five or not, that that I think 0:15:24.520 --> 0:15:26.560 that's a little bit bold. I don't. I don't do 0:15:26.760 --> 0:15:29.440 that as a prediction or forecast on his part. I 0:15:29.560 --> 0:15:31.760 think fifty is still the base case, but it's probably 0:15:31.800 --> 0:15:36.480 gonna be fifty at at least two or three meetings, 0:15:36.560 --> 0:15:38.840 so that they can get closer to the neutral rate 0:15:39.080 --> 0:15:41.120 in UH in a shorter amount of time, which may 0:15:41.200 --> 0:15:43.000 give them some breathing room to not have to be 0:15:43.080 --> 0:15:46.240 as aggressive towards the end of the year. But we'll see. Now, 0:15:46.280 --> 0:15:48.200 if we do see that kind of front end loading 0:15:48.280 --> 0:15:52.160 by the FED, those that kind of aggressive move successively, 0:15:52.400 --> 0:15:56.280 how does that affect your strategy in this market? Well, uh, 0:15:56.680 --> 0:16:00.600 you know what the confirmation hearing that all had I 0:16:00.680 --> 0:16:03.560 think one of the more interesting things that happened was 0:16:03.720 --> 0:16:07.720 when Richard Shelby asked him whether he'd be willing to 0:16:07.840 --> 0:16:12.280 accept a recession as Volker did in order to um 0:16:12.720 --> 0:16:16.880 sort bring down inflation, and he paused and said, very thoughtfully, 0:16:16.960 --> 0:16:19.120 I think the history will show that the answer to 0:16:19.200 --> 0:16:21.600 that question is yes. Now, I don't think that means 0:16:21.680 --> 0:16:25.040 FETE officials are gunning for a recession, but that may 0:16:25.680 --> 0:16:28.000 be what it takes in order to reign in aggregate 0:16:28.080 --> 0:16:31.840 demand sufficient enough to bring inflation down, given that they 0:16:32.280 --> 0:16:36.080 obviously can't directly target food or energy prices as it 0:16:36.160 --> 0:16:39.840 ties into the Iraq war. They can't ramp up semiconductor production, 0:16:40.520 --> 0:16:44.320 but they can ease aggregate demand. And they're starting this 0:16:44.640 --> 0:16:48.760 this process of more aggressive rate hikes with growth already slowing. 0:16:48.920 --> 0:16:51.200 It's you know, Atlanta Fete is accurate. We're only at 0:16:51.240 --> 0:16:54.760 one in the first quarter. Battling a forty year high 0:16:54.800 --> 0:16:58.600 in inflation while you're at sub two percent growth. Is 0:16:58.760 --> 0:17:02.280 a very unique set of socumstances. I think investors have 0:17:02.480 --> 0:17:07.920 to be somewhat cautious. UM adopt the disciplines around diversification 0:17:08.640 --> 0:17:13.520 and rebalancing, and UM that's where we are. How do 0:17:13.720 --> 0:17:17.480 you rebalance? Do you look at different sectors, do you 0:17:17.520 --> 0:17:21.840 look at different styles? What's the strategy? Well, rebalancing obviously 0:17:21.880 --> 0:17:24.440 you're letting your portfolio tell you what to do. In 0:17:24.560 --> 0:17:26.840 that asset classes move in and out of favor, and 0:17:26.920 --> 0:17:31.080 they therefore adjust relative to your strategic allocations. So one 0:17:31.080 --> 0:17:33.960 of the things we've been suggesting is if you are 0:17:34.720 --> 0:17:37.680 typically if you're rebalancing, is done either by an advisor 0:17:37.720 --> 0:17:40.680 or yourself on a calendar basis, meaning you might rebalance 0:17:40.720 --> 0:17:42.720 on a quarterly basis at the end of the year, 0:17:43.320 --> 0:17:47.199 consider having it be more portfolio based, volatility base, take 0:17:47.240 --> 0:17:51.400 advantage of volatility, maybe up the pace of rebalancing. We've 0:17:51.480 --> 0:17:57.119 also adopted, uh about six weeks ago sector neutrality, feeling 0:17:57.200 --> 0:18:00.600 like trying to sort of play a short term sector 0:18:00.680 --> 0:18:03.320 game is going to be a bit trickier. What has 0:18:03.359 --> 0:18:07.719 been more consistent is factor based investing, So leadership at 0:18:07.760 --> 0:18:10.840 the factor level and I look at the Bloomberg factors 0:18:10.880 --> 0:18:13.119 on a day to day basis, that's where there's been 0:18:13.160 --> 0:18:15.520 more consistency. And this is a time in the cycle 0:18:16.119 --> 0:18:20.760 where you absolutely want to focus on quality. Defensive areas 0:18:20.760 --> 0:18:22.520 have been doing well, but there's a way to play 0:18:22.680 --> 0:18:26.120 defense even in segments of the market that are generally 0:18:26.280 --> 0:18:30.280 considered more offensive. You just want to stay focused on 0:18:30.400 --> 0:18:35.040 those quality characteristic strong balance sheets, strong cash flow yield um, 0:18:35.240 --> 0:18:39.920 strong dividend yield, and positive earnings revisions in an environment 0:18:40.000 --> 0:18:43.320 where those are are harder to find these days. Got 0:18:43.320 --> 0:18:46.280 about a minute left here, Lizie, and does an inflation 0:18:46.440 --> 0:18:52.520 fighting fed have an impact on the earnings outlook for corporations? Well, 0:18:52.600 --> 0:18:55.240 we have seen a little bit of a rolling over 0:18:55.359 --> 0:18:58.280 in the forward profit margins. I don't think we'll end 0:18:58.920 --> 0:19:02.639 this season of the serious dent to profit margins, but 0:19:02.720 --> 0:19:06.320 I think that will be the bigger story going forward. Uh. 0:19:06.560 --> 0:19:08.800 You know, a lot of there's a misperception out there 0:19:08.880 --> 0:19:12.520 that a strong pp I is negative for a profit margins. 0:19:12.520 --> 0:19:15.800 Actually more US companies benefit from a higher p p I. 0:19:16.359 --> 0:19:20.360 But the labor cost component is such a large part 0:19:20.440 --> 0:19:23.720 of the input costs that I think the story going 0:19:23.840 --> 0:19:27.600 into next quarter earning season will probably be more about 0:19:27.760 --> 0:19:31.000 a compression coming in profit margins, unless there's an eating 0:19:31.560 --> 0:19:34.399 in some of these labor cost pressures. Thanks for this, Liz, 0:19:34.520 --> 0:19:37.080 and again great having you on with us. Liz Anne Saunders, 0:19:37.200 --> 0:19:41.879 chief investment strategist at Charles Schwab. Looking ahead to this market, 0:19:41.920 --> 0:19:45.040 open futures are moving lower. We have SMP futures down 0:19:45.440 --> 0:19:48.280 almost six points down, down futures down twenty two, NASTAC 0:19:48.359 --> 0:19:51.560 futures lower by twenty seven points. The ten your treasury 0:19:51.640 --> 0:19:55.600 is down eight thirty seconds, the yield two eight percent, 0:19:55.760 --> 0:19:58.000 and the yield on the two year right now two 0:19:58.119 --> 0:20:02.320 point four six per cent. You're listening to Bloomberg Daybreak 0:20:07.560 --> 0:20:09.480 Bloomberg eleventh three oh. Weather is still under the flood 0:20:09.520 --> 0:20:11.520 watch too late this morning. It'll turn mostly sunny and 0:20:11.600 --> 0:20:13.760 breezy this afternoon, with a hind in the mid fifties, 0:20:13.960 --> 0:20:17.960 sunshine upper fifties tomorrow, low sixties, mostly cloudy by Thursday. 0:20:18.080 --> 0:20:25.280 Right now forty degrees. Broadcasting live from the Bloomberg Interactive 0:20:25.320 --> 0:20:29.160 Broker Studio in New York. Bloomberg E Living Freedom to Washington, 0:20:29.240 --> 0:20:32.680 d C, Bloomberg nine one to Boston, Bloomberg one O 0:20:32.920 --> 0:20:36.359 six one to San Francisco, Bloomberg NUN sixty to the country, 0:20:36.480 --> 0:20:39.080 Sirius XM to the one nine team, and around the 0:20:39.119 --> 0:20:42.520 globe the Bloomberg Business app and Bloomberg Radio dot Com. 0:20:43.000 --> 0:20:51.960 This is Bloomberg Daybreak, six thirty on Wall Street. Good morning, 0:20:52.000 --> 0:20:54.720 I'm Nathan Hager and I'm Karen Moscow, and we're just 0:20:54.800 --> 0:20:57.200 about three hours away from the open of US trading. 0:20:57.240 --> 0:20:59.040 It's time for the five things you need to notice 0:20:59.080 --> 0:21:02.240 start your day. Ought to you by Interactive Broker Simple 0:21:02.320 --> 0:21:05.400 ib k are Global Trader app. Deposit in your local 0:21:05.480 --> 0:21:07.879 currency and trade stocks in the US, Europe and Asia. 0:21:08.160 --> 0:21:11.120 Start your free trial at ibkr dot com, Slash Global 0:21:11.200 --> 0:21:15.400 Trader at First, Russia's military shells, Southern and eastern Ukraine 0:21:15.520 --> 0:21:19.720 as its invasion continues. President vladimir's Lensky says Moscow is 0:21:19.760 --> 0:21:24.119 focused on conquering the eastern don Bus region that Russian 0:21:24.160 --> 0:21:26.560 troops begun the battle for the dome Bus for which 0:21:26.640 --> 0:21:29.439 they have been preparing for a long time. A significant 0:21:29.480 --> 0:21:32.080 part of the entire Russian army is now concentrated on 0:21:32.200 --> 0:21:36.080 this offensive. Ukrainian President vladimir's Lensky says his nation will 0:21:36.119 --> 0:21:38.840 continue to defend the region, and US President Joe Biden 0:21:38.920 --> 0:21:42.679 behold a call with key allies today to discuss the war. Meantime, 0:21:42.720 --> 0:21:45.400 car in the US is expected to participate a Group 0:21:45.440 --> 0:21:49.040 of twenty meetings this week even if Russia attends. Treasury 0:21:49.080 --> 0:21:52.280 Secretary Janet Yellen had previously said the US made boycott 0:21:52.359 --> 0:21:55.359 some meetings should Russia participate, but a senior Treasury official 0:21:55.400 --> 0:21:57.840 says Yellen does not want Russia to stop the US 0:21:57.920 --> 0:21:59.639 and allies from the work it needs to do at 0:21:59.680 --> 0:22:01.919 the G twenty. Well admit the fallout from the war, 0:22:02.119 --> 0:22:05.560 Nathan World Bank chief economist Carmen Reinhart tells Bloomberg gets 0:22:05.600 --> 0:22:10.879 cutting it's two economic outlook. Will it be cut again? Certainly? 0:22:10.920 --> 0:22:13.879 Wouldn't rule it out. But the point I'm making is 0:22:14.119 --> 0:22:17.680 we are living a period of receptional and certain World 0:22:17.720 --> 0:22:20.879 Bank Chief economist Carmen Reinhart says it's lowering estimates for 0:22:20.920 --> 0:22:23.800 global growth from a four point one percent in January 0:22:23.840 --> 0:22:26.399 eight to three point two percent and back in the US. 0:22:26.520 --> 0:22:29.280 New guidance on masks from the nation's biggest airlines and 0:22:29.640 --> 0:22:32.399 rides sharing Giant Uber. Let's get the details life from 0:22:32.400 --> 0:22:35.000 Bloomberg's You needed Young, We need a good morning. Good morning, Nathan. 0:22:35.119 --> 0:22:38.440 Most major airlines are dropping mask mandates on domestic and 0:22:38.560 --> 0:22:42.240