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Speaker 1: Live from the Bloomberg Interactive Brokers Studios. This is Bloomberg

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Speaker 1: Daybreak from Monday, January. Coming up this hour, Ken Griffin

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Speaker 1: Citadel turns out a record profit for clients. Earnings continue

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Speaker 1: to roll in this week, with Microsoft, Intel, and Boeing

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Speaker 1: heading the list. Another tech company is slashing jobs, and

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Speaker 1: the Justice Department finds more classified documents at President Biden's home.

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Speaker 1: Authority is a looking for motive and a mass shooting

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Speaker 1: that left ten dead outside of Los Angeles. Plus Poland

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Speaker 1: will ask Germany for the go ahead to send thanks

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Speaker 1: to Ukraine. I'm Michael blog more ahead of John stash

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Speaker 1: Our and sports NFL playoff victories for the Bengals and Forts.

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Speaker 1: The Knicks lost, the Nets and Devils both won. That's

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Speaker 1: All's train ahead on Bloomberg Daybreak on Bloomberg eleven three

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Speaker 1: on New York, Bloomberg one, Washington d C, Bloomberg one

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Speaker 1: oh six one, Boston, Bloomberg nine sixties and Francisco Sirius

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Speaker 1: x M one nine team and around the world on

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Speaker 1: Bloomberg Radio dot Com and via The Bloomberg Business. Good Morning,

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Speaker 1: I'm Nathan Hagar and I'm Amy Morris. Here are the

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Speaker 1: stories we're following today. Let's begin in the hedge fund space.

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Speaker 1: We have word of a record profit for a fund manager.

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Speaker 1: Let's get the latest live from Bloomberg. Steve Rappaport, Good morning, Steve,

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Speaker 1: Good morning, Amy and Nathan. Citadel netted sixteen billion dollars

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Speaker 1: for clients last year, far outpacing the rest of the industry.

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Speaker 1: According to estimates from l c H Investments, that Hall

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Speaker 1: accounts for more than seventy percent of profits generated by

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Speaker 1: the top twenty hedge fund firms. While hedge funds overall

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Speaker 1: lost two hundred eight billion last year. Citadel's fixed income,

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Speaker 1: tactical trading, and equities funds generated returns of more than

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Speaker 1: twenty one percent last year. The Wall Street Journal reports

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Speaker 1: the Miami based firm returns seven billion in profits to

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Speaker 1: investors at the start of twenty three Live in New York.

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Speaker 1: I'm Steve Rappaport, Bloomberg Daybreak. All right, Steve, thank you.

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Speaker 1: No stock Center. This Monday, following the S and P

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Speaker 1: five hundreds biggest gain in two weeks, it rose one

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Speaker 1: point nine percent. On Friday, the tech heavy NASAC one

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Speaker 1: hundred had its best day since November, gaining two point

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Speaker 1: seven percent. Miller Taback chief market strategist Matt Mayley says,

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Speaker 1: we are entering a critical time for stock markets. We're

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Speaker 1: gonna have to see what really happens over the next

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Speaker 1: two weeks because that's when we really get into the

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Speaker 1: meat of the earning season. And one of the big things,

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Speaker 1: of course that everybody's been talking about it, you know,

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Speaker 1: our our earnings. A lot of people thinking they're gonna

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Speaker 1: come down quite a bit, especially the guidance. And as

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Speaker 1: we move into the meat of that earning season, what's

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Speaker 1: going to happen, Because you know, the stock market on

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Speaker 1: a long term basis, at you know, seventeen and a

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Speaker 1: half times earnings and two points three times sales, it's

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Speaker 1: still at the high end evaluation levels. And as Millery

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Speaker 1: Tabacks met mainly watches earnings, we hear from nearly nine

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Speaker 1: d companies in the SNP five hundred this week, including Microsoft, Intel, IBM,

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Speaker 1: and Boeing. Meantime, Morgan Stanley is making the bear case

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Speaker 1: for stocks. Chief US equity strategist Mike Wilson says earnings

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Speaker 1: are a major reason the bear market is not over.

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Speaker 1: Wilson says leading economic and earnings indicators are quota overwhelmingly

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Speaker 1: week and that's a dynamic equity markets are not priced for.

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Speaker 1: At the same time, Amy Morgan Stanley economists are sticking

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Speaker 1: by their call for a softish landing in the US.

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Speaker 1: They say even if there is a recession, it will

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Speaker 1: be milder than most. In a report to clients, Morgan's

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Speaker 1: economists say it is far too soon to declare victory

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Speaker 1: since higher interest rates take time to bite, but the

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Speaker 1: US labor markets proved stronger than anticipated and quote inflation

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Speaker 1: has turned down decisively, and corporate news we're getting word.

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Speaker 1: Activist Elliott Management has taken a multibillion dollar steak in Saleforce,

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Speaker 1: As Bloomberg's Dennis Pellegrini reports, the hedge fund is taking

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Speaker 1: advantage of recent vulnerabilities at the San Francisco company. Elliott

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Speaker 1: Management's move into Salesforce comes after an announcement of massive

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Speaker 1: layoffs and the stock plunge at the enterprise software company,

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Speaker 1: and Salesforce market cap is now just about a hundred

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Speaker 1: and fifty billion dollars. That's only about half of what

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Speaker 1: it was at peak. Bloomberg Intelligence says this all means

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Speaker 1: watch for Elliott Management to push for possibly more shared

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Speaker 1: by backs and more cuts in sales and mark getting costs.

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Speaker 1: Also could see some top level leadership changes. Jesse Cohne,

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Speaker 1: managing partner at Elliott, saying Elliott has a deep respect

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Speaker 1: for Salesforce chairman, co CEO and co founder Mark Bennioff

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Speaker 1: and what Bennioff has built. Denise Pellegrini Bloomberg Day Break.

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Speaker 1: Then these thanks and Salesforce shares are of three point

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Speaker 1: six percent in early trading. Another note in the tech sector,

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Speaker 1: Spotify is slated to be the next firm to announce layoffs.

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Speaker 1: Bloomberg News has learned the music streaming giants planning layoffs

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Speaker 1: as soon as this week. Amazon, Meta, Microsoft, and Alphabet

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Speaker 1: are among the biggest companies to announce staff reductions in

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Speaker 1: recent weeks. Elon Musk is back today for more testimony

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Speaker 1: and that test La securities fraud trial. Under questioning from

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Speaker 1: a lawyer for shareholders, Musk denied that his tweets affect

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Speaker 1: Tesla's stock price. The trial centers on his twenty eighteen

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Speaker 1: tweet about taking the electric car company private, which never materialized,

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Speaker 1: and one of Musk's other companies is also in the spotlight.

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Speaker 1: The Twitter CEO says he will revamp the size and

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Speaker 1: frequency of advertisements that appear on the social media platform.

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Speaker 1: Musk says he also plans to roll out a higher

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Speaker 1: priced subscription model that allows for zero ads on Twitter feeds.

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Speaker 1: Turning to politics, now, the controversy over classified documents back

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Speaker 1: in the spotlight. The Justice Department found another six items

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Speaker 1: containing classified information during a search of President Biden's home

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Speaker 1: in Wilmington, Delaware. Biden Ally, Senator Chris Coons of Delaware says,

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Speaker 1: the President has been cooperative from the beginning and has

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Speaker 1: nothing to hide. What's going to matter going forward is

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Speaker 1: how this is handled, and President Biden has fully and

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Speaker 1: promptly cooperated. Of the reason there was a search of

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Speaker 1: his house here in Delaware was he invited them in.

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Speaker 1: Senator Chris Coon's made those comments on ABC's This Week

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Speaker 1: Herd every Sunday on Bloomberg Radio. Still, this latest discovery

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Speaker 1: exacerbates an embarrassing political misstep for Biden ahead of an

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Speaker 1: expected re election campaign, and it dampens momentum from a

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Speaker 1: series of legislative victories and a better than expected Democratic

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Speaker 1: midterm performance. We've got one other note out of the

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Speaker 1: White House this morning, Amy Bloomberg News has learned Joe

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Speaker 1: Biden will name Jeff Z Science as his next chief

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Speaker 1: of staff today. Science as a former business executive who

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Speaker 1: was a chief architect of the president's initial COVID team.

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Speaker 1: He will replace Ron Klain, who will leave in the

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Speaker 1: coming weeks. The White House chief of staff is among

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Speaker 1: the most powerful figures in Washington, making Nathan thirty nine

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Speaker 1: degrees now in New York, rain could mix with snow,

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Speaker 1: but that will come later today. For now, breezy conditions,

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Speaker 1: we're gonna go up to forty five degrees. Time Now

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Speaker 1: for a look at some of the other stories making

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Speaker 1: news in New York and around the world. For that,

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Speaker 1: we're joined by Bloomberg's Michael Barr. Good morning, Michael, Good morning. Amy.

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Speaker 1: Police in California say the man who killed ten people

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Speaker 1: and wounded several others at a dance hall in Monterey

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Speaker 1: Park was a seventy two year old Asian man name

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Speaker 1: who can Tron. Officers say they found Tron dead from

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Speaker 1: a self inflicted gunshot wound in his van shortly after

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Speaker 1: having stopped the vehicle. Los Angeles Sheriff Robert Luna says

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Speaker 1: investigators are looking for a motive in the killing. Sheriff's

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Speaker 1: homicide detectives are working around the clock gathering additional information

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Speaker 1: and working on determining the motive behind this extremely tragic event.

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Speaker 1: Sheriff Luna says most of the victims were over the

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Speaker 1: age of fifty. Meanwhile, in New York, there was increased

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Speaker 1: police presence at lunar New Year events out find the

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Speaker 1: deadly mass shooting in Los Angeles. According to the NYPD,

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Speaker 1: the city had not received any credible threats and are

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Speaker 1: doing it out of an abundance of caution. Mayor Eric

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Speaker 1: Adams is again calling on the federal government to help

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Speaker 1: with resources in the rise of asylum seekers in New

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Speaker 1: York City. At a rally outside City Hall yesterday, Adams

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Speaker 1: called on Congress, AMTHEMA to do their part in dealing

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Speaker 1: with crisis at the southern border, because if you look

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Speaker 1: under the fingernail of every immigrant community in this country,

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Speaker 1: you see the dirt and grime of climbing up the mountain,

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Speaker 1: one hand at a time. To participate in the American Jury.

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Speaker 1: Mayor Adams says the city needs a lot more resources.

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Speaker 1: President Joe Biden is issuing a memorandum aimed at protecting

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Speaker 1: access to Miffa pristoon, a drug used in medication abortion.

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Speaker 1: Vice President Kamala Harris made the announcement in Florida, where

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Speaker 1: Republican Governor Ran des Santis signed into law a measure

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Speaker 1: banning abortion after fifteen weeks. The right of every woman

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Speaker 1: in every state in this country to make decisions about

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Speaker 1: her own body is on the line. Vice President Harris

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Speaker 1: on Sunday said, on what would have been the fiftieth anniversary,

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Speaker 1: we speak of the Roe v. Waight decision in the

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Speaker 1: past tense. Poland's Prime minister says the government will ask

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Speaker 1: Germany for permission to send the leopard tanks to Ukraine.

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Speaker 1: The Ukrainian government says tanks and especially the German made leopards,

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Speaker 1: are vital if it is to prevail over the Kremlin's

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Speaker 1: invading forces. Global News twenty four hours a day on

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Speaker 1: air and on Bloomberg Quicktake, powered by more than the

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Speaker 1: seven hundred journalists and analysts more than a hundred twenty countries.

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Speaker 1: I'm Michael barn This is Bloomberg Gaming. All right, thank you, Michael.

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Speaker 1: Time now for the sports report, brought to you by

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Speaker 1: Try State AUTI. Here's John Stash our thanks Amy. Cincinnati

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Speaker 1: Bengals only team of the Divisional playoffs to win on

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Speaker 1: the road. It was fairly easy in the snow and Buffalo.

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Speaker 1: The Bengals jumped in front early on dropped by Parrow.

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Speaker 1: The pressure comes from the left. He caught at the chase,

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Speaker 1: straight ahead into the end zone, touchdown on the opening

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Speaker 1: drive for Cincinnati Bengals radio the call. Cincinnati wonn to

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Speaker 1: ten and now five and oh and an f C

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Speaker 1: playoff games over the last two years. They'll play the

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Speaker 1: championship game this Sunday in Kansas City, as they did

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Speaker 1: a year ago when the Bengals rallied in one and overtime.

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Speaker 1: Big question of this game will be the status of

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Speaker 1: Patrick mahomes is high ankle spring suffering. Saturday, the NFC

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Speaker 1: title game will be San Francisco at Philadelphia battle the

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Speaker 1: top two seeds. The Niners defense again on display in

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Speaker 1: a nineteen to twelve win over Dalla. They intercepted Dak

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Speaker 1: Prescott twice. The Niners rookie quarterback Rock Purty remains undefeated.

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Speaker 1: The losing teams yesterday, Buffalo and Dallas both continued playoff disappointments.

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Speaker 1: Neither have been to the super Bowl since the first

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Speaker 1: half of the nineteen nineties. Nicks in Toronto, third meeting

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Speaker 1: in the last sixteen days and the Raptors pulled away

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Speaker 1: and one one sixteen. R J. Barrett leather Knicks with

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Speaker 1: thirty points. The Nets one at Golden State one one

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Speaker 1: sixteen without Kevin or Aunt, Kyrie Irving stepping up thirty

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Speaker 1: eight points he had forty eight and the win. On Friday,

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Speaker 1: Devil's on a Douwee Hamilton gold be Pittsburgh two one

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Speaker 1: in overtime Australian Open fourth round battle of young Americans

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Speaker 1: and twenty year old Bench Shelton outlasted J. J. Wolfe

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Speaker 1: in five sets. No Vak Djokovic Plane now he's won

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Speaker 1: the first two sets. John Stash Award at Bloomberg Sports

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Speaker 1: Live from coast to coast, from New York to San Francisco,

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Speaker 1: Boston to Washington, d C. Nationwide on Sirius x M,

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Speaker 1: the Bloomberg Business app and Bloomberg dot Com. This is

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Speaker 1: Bloomberg Daybreak. Good morning, I maybe more, I just want

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Speaker 1: to take a look at what's ahead for markets with

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Speaker 1: Lori Calvacina had a US equity strategy at RBC Capital

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Speaker 1: Markets LORI, Good morning to you, Thanks so much for

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Speaker 1: taking the time, Thanks for having me is always Happy Monday.

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Speaker 1: Happy Monday to you. What are you going to be

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Speaker 1: seeing in the next uh in the next few weeks

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Speaker 1: based on what you've seen so far in the past

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Speaker 1: few weeks, connect those dots for us? Sure, well, you know,

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Speaker 1: I'm looking from my perspective, I think that our earnings

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Speaker 1: reports that we're going to get over the next few

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Speaker 1: weeks are probably the most important thing. We've seen about

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Speaker 1: ten of SMP results come in so far. A lot

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Speaker 1: of those have been in financials and sort of you know,

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Speaker 1: kind of random industrials for lack of a better word. Um,

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Speaker 1: but I think that you know, it hasn't been a

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Speaker 1: fantastic start to reporting season. We've only had about sixty

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Speaker 1: of companies beating. The companies that beating haven't been necessarily

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Speaker 1: doing all that well on a relative basis, and the

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Speaker 1: companies that have been missing have been performing pretty poorly.

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Speaker 1: So we think it's going to be a rocky reporting season.

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Speaker 1: Um but I do think we're going to get a

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Speaker 1: lot of useful information in the next few weeks, so

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Speaker 1: we've really got to focus on those tea leaves. When

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Speaker 1: you're talking about the next few weeks and the useful

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Speaker 1: information that you are looking for, can you sort of

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Speaker 1: highlight some of those things for us? What are some

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Speaker 1: of the flags that are going to be popping up? Sure,

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Speaker 1: so you know, we really care a little bit more

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Speaker 1: about the commentary necessarily, you know kind of what the

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Speaker 1: actual you know, kind of dollar values and percentages are

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Speaker 1: that are discussed. Um. I've been looking through a lot

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Speaker 1: of the companies that reported last week. To be honest,

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Speaker 1: I've been focusing less on the financials. Everybody's focusing on those.

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Speaker 1: I've been looking a little bit more at the non

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Speaker 1: financial companies. One of the things that I've noticed is

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Speaker 1: that companies have been acknowledging the macro uncertainty, and when

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Speaker 1: they're talking about the outlook that they're they're putting out there,

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Speaker 1: they're acknowledging that writing uncertainty. So there does seem to

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Speaker 1: be even when the guidance is being put out, UM,

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Speaker 1: you know, just a high degree of variability in terms

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Speaker 1: of the number of selling forward and I think that's

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Speaker 1: having an impact on market psychology. UM. We've also been

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Speaker 1: noticing that a lot of these companies outside of financials

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Speaker 1: have been sort of highlighting recent signs of flowing or

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Speaker 1: cups in terms of demand, and most of them have

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Speaker 1: in saying, well, it's explainable, it's only temporary. We're expect

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Speaker 1: things to get better in February marches. Things are already

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Speaker 1: starting to look better in February Marching. And I'm not

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Speaker 1: trying to dismiss those comments, but it is a little

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Speaker 1: bit interesting to me that, you know, we're sort of

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Speaker 1: seeing everything so easily explained away, and I'm not sure

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Speaker 1: if it's going to ultimately be that easily explained away

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Speaker 1: in the end. So then what does that tell you

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Speaker 1: that may be coming if it's a little less psychology

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Speaker 1: and a little more data. In fact, well, look, I

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Speaker 1: think that we're you know, we're expecting the US to

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Speaker 1: sort of enter this short shall over session. We think

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Speaker 1: we're probably already you know, in the early days of that.

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Speaker 1: On the one hand, yeah, I think it's gonna be

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Speaker 1: difficult from markets to that. Yet nobody likes the onset

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Speaker 1: of a challenging economy. We are starting to see the

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Speaker 1: City US Economic Surprise Indicator vire into negative territory. Now,

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Speaker 1: I think that there is a certain amount of relief

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Speaker 1: though with equity people that we can we can take

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Speaker 1: from that. UM One, I do think it's that's the

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Speaker 1: path the fad rather on a left aggressives path, and

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Speaker 1: I think that's something equity markets need to see. So

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Speaker 1: ultimately I think this will be a good thing UM.

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Speaker 1: And also I do think that we've spent so long

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Speaker 1: talking about whether or not we're going to have a recession,

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Speaker 1: whether or not we're going to have economic challenges. Let's

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Speaker 1: just get on with it. Let markets digested um and

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Speaker 1: move to the recovery phase. So I think overall this

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Speaker 1: is a mixed bag. Ultimately a positive thing, but not

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Speaker 1: too much fun in the here and now. How much

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Speaker 1: of that optimism, Lorie can actually have an impact. Well,

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Speaker 1: So it's it's interesting, yes, that Amy, because when we

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Speaker 1: look at the CFTC data, UM. One of the things

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Speaker 1: that's a little bit interesting is that you already saw

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Speaker 1: equity investor sentiment if you look at futures contract positioning

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Speaker 1: among gast managers already sort of hit sixteen lows last year,

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Speaker 1: and we're really in the early stages of a rebap.

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Speaker 1: So I think, you know, just kind of this idea

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Speaker 1: of the onset of this challenging backdrop. I do think

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Speaker 1: it keeps that sentiment and positioning depressed. But at the

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Speaker 1: same time, the fact that we're finally, finally kind of

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Speaker 1: getting on with it does allow some some camps to

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Speaker 1: start kind of looking at recovery, look a better days ahead,

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Speaker 1: and can give us some stability in those metrics. So

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Speaker 1: I do think it's it's a challenging backdrop. It's a

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Speaker 1: complex backdrop, but I do think it has impacts on

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Speaker 1: on on those who are negative, but also on those

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Speaker 1: who are looking for better days ahead. So better to

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Speaker 1: go ahead and just get on with it. If we're

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Speaker 1: going to have a recession, even a shallow one, let's

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Speaker 1: go ahead and do it so we can bake it

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Speaker 1: all in and then the dread of a recession won't

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Speaker 1: be as much of a factor exactly. You know, one

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Speaker 1: of my my interesting sort of cocktail party staff about

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Speaker 1: US equity markets and the economy is that if you

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Speaker 1: look at negative real GDP years, stocks usually trade off

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Speaker 1: pretty sharply in the years prior to when that happens,

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Speaker 1: but the year of you actually have pretty decent games

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Speaker 1: in US equity markets because markets get the pain out

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Speaker 1: of the way at ahead of time. But one of

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Speaker 1: the worst backdrops you can be in for US equities

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Speaker 1: in terms of stock price performance perspective is zero to

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Speaker 1: two percent g d P. On the plus side, that's

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Speaker 1: below trend positive. But what I've learned over my career

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Speaker 1: on those environments, people are constantly worried about whether you're

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Speaker 1: gonna fall over the edge of economic am this and

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Speaker 1: markets really don't price that dress very well but can handle,

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Speaker 1: you know, just sort of a cycle where we sit

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Speaker 1: where we kind of moved down on the economy and

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Speaker 1: then moved up up. This is Bloomberg Daybreak Today, your

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