WEBVTT - Bloomberg Daybreak: June 7, 2022 - Hour 2 (Radio) 0:00:01.320 --> 0:00:04.439 Live from the Bloomberg Interactive Brooker Studios. This is Bloomberg 0:00:04.519 --> 0:00:08.039 day Break for Tuesday, June seven two. Coming up the shower. 0:00:08.240 --> 0:00:11.559 Boris Johnson survives as UK Prime Minister, but the question 0:00:11.680 --> 0:00:15.240 is for how long? Russia bands Dozens, including Janet Yellen 0:00:15.320 --> 0:00:18.360 and Black Rocks CEO Larry Thing keep primaries today in 0:00:18.440 --> 0:00:21.759 seven states, including California and New Jersey, and looks like 0:00:21.880 --> 0:00:25.880 Buyer's remorse won't get Elon Musk out of his Twitter acquisition. 0:00:26.000 --> 0:00:28.680 New York Mayor Eric Adams reacts to new gun laws 0:00:28.680 --> 0:00:31.520 across the state, plus the US lawrens North Korea of 0:00:31.560 --> 0:00:34.720 the strong punishment conducts in nuclear tests. On Michael bar 0:00:34.880 --> 0:00:37.400 More Ahead, I'm John Stash Howard Sports. Then that's one 0:00:37.400 --> 0:00:40.200 in San Diego, Colorado has raised the Stanley Cup Final. 0:00:40.240 --> 0:00:44.760 The Rangers play Game four at Tampa Bay tonight. That's 0:00:44.800 --> 0:00:48.800 all Strady Ahead on Bloomberg day Break on Bloomberg eleven, Freo, 0:00:48.920 --> 0:00:53.280 New York, Bloomberg one, Washington, d C, Bloomberg one oh 0:00:53.360 --> 0:00:58.160 six one, Boston, Bloomberg nine sixties, San Francisco, Sirius XM 0:00:58.200 --> 0:01:00.960 one nine Team and around the World Old on Bloomberg 0:01:01.000 --> 0:01:07.840 Radio and dot car. I'm via the Bloomberg Business and 0:01:07.880 --> 0:01:11.200 good morning. I'm Karen Moscow. I'm Nathan Hagar. Bloomberg Daybreak 0:01:11.200 --> 0:01:13.560 is brought to you by Informatica in the Cloud. Your 0:01:13.640 --> 0:01:16.280 data has the power to do the extraordinary. Managed data 0:01:16.319 --> 0:01:19.840 across any location in the cloud for accurate and actionable insights. 0:01:19.920 --> 0:01:24.200 More at Informatica dot Com and us dock. Index futures 0:01:24.240 --> 0:01:26.920 are lower this morning, six out one on Wall Street 0:01:26.920 --> 0:01:29.080 and we check the markets every fifteen minutes throughout the 0:01:29.080 --> 0:01:32.200 trading day on Bloomberg. Right now, SNP futures are down 0:01:32.240 --> 0:01:34.960 eighteen points down, futures down a hundred thirty eight and 0:01:35.040 --> 0:01:38.280 NASDAG futures down sixty eight. The tenure treasury up six 0:01:38.319 --> 0:01:41.120 thirty seconds, you know, three point one percent, and they 0:01:41.200 --> 0:01:44.240 yield on the two year two point seven one percent. Nathan, 0:01:44.280 --> 0:01:46.040 all right, thanks Karen. We'll have more on the markets 0:01:46.080 --> 0:01:47.760 in just a minute. First we want to bring you 0:01:47.800 --> 0:01:50.440 the latest on the future of Boris Johnson, the UK 0:01:50.560 --> 0:01:53.520 Prime Minister has managed to cling to power. Let's go 0:01:53.560 --> 0:01:55.680 to London and get the very latest with Bloomberg's You 0:01:55.760 --> 0:01:57.760 and Potts. Good morning you, and good morning Nathan and 0:01:57.840 --> 0:02:01.040 Karen win for Boris Johnson in a votes among lawmakers 0:02:01.040 --> 0:02:03.400 in his own Conservative party, the UK Prime Minister has 0:02:03.440 --> 0:02:06.600 secured the numbers to remain as leader, but more than 0:02:06.720 --> 0:02:10.040 forty percent of his colleagues indicated they have no confidence 0:02:10.120 --> 0:02:12.520 in his leadership. That was the worst result than that 0:02:12.560 --> 0:02:16.440 suffered by his predecessor, Theresa May. Under official party rules, 0:02:16.440 --> 0:02:19.480 he cannot now be challenged again for another twelve months, 0:02:19.520 --> 0:02:22.560 but rules can be changed and many expect Leadsia questions 0:02:22.600 --> 0:02:24.920 to continue. In London, I'm you and parts in bag 0:02:25.000 --> 0:02:27.000 day break you and thank you Now. The latest on 0:02:27.080 --> 0:02:29.880 the war Russia has spanned dozens of US officials from 0:02:29.960 --> 0:02:32.840 entering the country. We get details from Bloomberg's Any Morrison 0:02:32.880 --> 0:02:37.079 our newsroom in Washington. Treasury Secretary Janet Yellett and Black 0:02:37.160 --> 0:02:39.919 Rocks Larry Fink are among the sixty one US officials 0:02:39.919 --> 0:02:44.079 and executives indefinitely banned by Russia retaliation for what it 0:02:44.200 --> 0:02:48.480 called constantly expanding sanctions against its citizens. This says Ukraine 0:02:48.560 --> 0:02:50.800 is in talk with the United Nations to craft a 0:02:50.800 --> 0:02:53.919 deal between Turkey and Moscow to restart shipments of grain 0:02:54.000 --> 0:02:57.399 from ports blocked by Russia. Meanwhile, shortly after the UK 0:02:57.680 --> 0:03:00.160 joined the U S and pledging to send longer range 0:03:00.200 --> 0:03:03.480 missiles to Ukraine. Russia's President Putin threatened to strike new 0:03:03.480 --> 0:03:06.560 targets if those weapons are delivered in Washington. I'm Amy 0:03:06.560 --> 0:03:09.000 Moore as Bloomberg Daybreak. All right, Amy, thank you, turning 0:03:09.040 --> 0:03:12.799 to US politics. This is a primary election Super Tuesday. 0:03:13.000 --> 0:03:15.760 Seven states, led by California and New Jersey, are heading 0:03:15.760 --> 0:03:18.160 to the polls for the busiest day of voting before 0:03:18.200 --> 0:03:21.840 the general election in November. Claremont McKenna College political scientist 0:03:21.919 --> 0:03:24.360 Jack Pitney has more on a major theme playing out 0:03:24.639 --> 0:03:28.040 in California, crime and homelessness. If you talk to anybody 0:03:28.040 --> 0:03:31.840 who's recently visited Los Angeles, still be shocked at the 0:03:31.880 --> 0:03:36.120 homeless encampments all over the city. Uh. It's a huge 0:03:36.240 --> 0:03:39.640 humanitarian problem and one that the city government has not 0:03:39.800 --> 0:03:43.000 been able to manage very effectively. Clairemont McKennis Jack Pittney 0:03:43.000 --> 0:03:45.720 says it's affecting the Democratic race for Los Angeles mayor, 0:03:45.800 --> 0:03:49.320 hitting Congresswoman Karen Bass against tough on crime billionaire Rick Caruso. 0:03:49.600 --> 0:03:51.840 It is also feeling the race for Attorney General in 0:03:51.880 --> 0:03:55.320 California to Republicans and a Republican turned independent, are running 0:03:55.320 --> 0:03:59.040 to unseat Democratic incumbent Rob Banta. As for congressional races, 0:03:59.080 --> 0:04:03.360 Republican David Valadeo is facing a tough primary challenge. Valadeo 0:04:03.480 --> 0:04:05.400 was one of the ten House Republicans who voted to 0:04:05.440 --> 0:04:08.640 impeach former President Donald Trump last year. Well the New 0:04:08.680 --> 0:04:11.880 Jersey Nathan Republican contenders are hoping to crack the States 0:04:11.920 --> 0:04:15.240 Blue Wall in today's primary, and Bloomberg's Michael Barr has 0:04:15.280 --> 0:04:18.680 the latest. Today's primary has a field of thirty five 0:04:18.800 --> 0:04:22.679 GOP candidates, many in line with former President Trump. However, 0:04:22.760 --> 0:04:25.960 the governor's seat and the legislature are controlled by Democrats 0:04:25.960 --> 0:04:29.159 and the party holds ten of the twelve congressional seats. 0:04:29.400 --> 0:04:31.680 One race to keep an eye on is New Jersey's 0:04:31.720 --> 0:04:35.159 third District. Jim owner Ian Smith, refused in order to 0:04:35.160 --> 0:04:38.719 close his business during the pandemic, is among three Republicans 0:04:38.800 --> 0:04:42.200 running against Democrat Andy Kim. The third district is a 0:04:42.240 --> 0:04:45.600 politically divided area that voted for Trump by a narrow 0:04:45.640 --> 0:04:49.360 margin in the election In New York. Michael Barr Bloomberg 0:04:49.440 --> 0:04:52.800 Day Brick Michael thank you in Corporate News. Deal or 0:04:52.839 --> 0:04:56.080 No Deal looks like Elon Musk's buyer's remorse won't get 0:04:56.200 --> 0:04:58.560 him out of his acquisition of Twitter. Let's get more 0:04:58.560 --> 0:05:00.800 on that line from Bloomberg trained to on Good Morning Nina, 0:05:00.839 --> 0:05:04.080 Good Morning Nathan. Elon Musk is reviving his argument that 0:05:04.160 --> 0:05:07.479 Twitter has a serious bot problem, and he's threatening to 0:05:07.520 --> 0:05:10.240 walk away from the deal if the social media giant 0:05:10.279 --> 0:05:12.960 does not do more to prove that its users are 0:05:13.000 --> 0:05:16.640 real people. But Bloomberg sources say behind the scenes the 0:05:16.680 --> 0:05:19.920 deal is proceeding. Twitter thinks it's in the best interest 0:05:19.960 --> 0:05:23.320 of all shareholders and wants to close the transaction, and 0:05:23.400 --> 0:05:26.480 it's possible that Twitter could try to sue Musk to 0:05:26.600 --> 0:05:29.719 complete the deal if he tries to walk away. Live 0:05:29.760 --> 0:05:32.120 in New York, I'm goned a young Bloombark day break 0:05:32.120 --> 0:05:34.039 all right, reneed to thank you all. Apple out with 0:05:34.320 --> 0:05:38.080 new software and services at its Worldwide Developers Conference. Fresh 0:05:38.160 --> 0:05:42.040 features include an updated iPhone log screen, multitasking for the iPad, 0:05:42.320 --> 0:05:45.359 and a pay later service that bring Apples into the 0:05:45.400 --> 0:05:48.799 finance industry. We discussed the move with Creative Strategies President 0:05:48.839 --> 0:05:52.400 Carolina Milanessi from the event in California. I think the 0:05:52.440 --> 0:05:54.200 core of it is that is going to be so 0:05:54.279 --> 0:05:56.800 much easier for people that use Apple Pe to just 0:05:56.960 --> 0:06:01.120 use as a default versus using the plethora of other 0:06:01.200 --> 0:06:03.919 options that you have in the market. It's about integration, 0:06:04.040 --> 0:06:07.520 is about taking away every little bit of friction that 0:06:07.560 --> 0:06:10.799 you have in the experience. The Creative Strategies President Carolina 0:06:10.839 --> 0:06:14.360 Milanossi expects Apple's new pain later features to be helpful 0:06:14.400 --> 0:06:17.600 for both small businesses and consumers. Turning to the economy, 0:06:17.680 --> 0:06:21.040 Karen JP Morgan Chase chief economist Bruce Casman says there 0:06:21.160 --> 0:06:24.279 is little chance of recession is imminent. I think what 0:06:24.320 --> 0:06:27.120 we're gonna see is growth continue to be on the 0:06:27.160 --> 0:06:31.080 softer side, but growth continue to show resilience. Uh. We 0:06:31.120 --> 0:06:34.080 don't see a near term recession. Uh. We see a 0:06:34.120 --> 0:06:37.240 global economy which actually does okay in the second half 0:06:37.279 --> 0:06:39.240 of the year, with the u AS slowing and the 0:06:39.279 --> 0:06:42.039 rest of the world doing somewhat better. JP Morgan Chase 0:06:42.120 --> 0:06:45.400 chief economist Bruce Casman's comments differ from those of his boss, 0:06:45.480 --> 0:06:48.440 Jamie Diamond. Last week, Diamond said investors should be ready 0:06:48.440 --> 0:06:51.880 for an economic hurricane, as tighter monetary policy, inflation, and 0:06:52.000 --> 0:06:55.800 Russia's invasion of Ukraine pose ongoing risks and Bloomberg. Day 0:06:55.800 --> 0:06:57.760 Break is brought to you by b n Y Melon 0:06:57.839 --> 0:07:01.359 Pershing's Inside Conference back in person June fifteen through the 0:07:01.400 --> 0:07:04.839 seventeenth at the Gay Lord Resort in Grapevine, Texas. Don't 0:07:04.960 --> 0:07:08.159 visit Register now at Inside dot b n Y Melan 0:07:08.440 --> 0:07:12.440 dot com. Futures are moving lower this morning. SMP Future 0:07:12.520 --> 0:07:16.040 is down about nineteen points. Straight ahead your latest local headlines, 0:07:16.120 --> 0:07:23.800 plus a check of sports, and this is Bloomberg. Thanks Karen. 0:07:23.800 --> 0:07:25.680 At six oh seven on Wall Street where at sixty 0:07:25.680 --> 0:07:27.720 three degrees in Central Park and still dealing with an 0:07:27.760 --> 0:07:31.200 accident on southbound Harlem River Drive at the George Washington Bridge. 0:07:31.320 --> 0:07:34.040 Details coming up in traffic. First, Michael Barr is back 0:07:34.120 --> 0:07:35.800 with more on what's going on in New York and 0:07:35.840 --> 0:07:38.080 around the world. Good morning, Michael, Good morning Nathan. New 0:07:38.160 --> 0:07:41.400 York Governor Kathy Oacal signed new gun reformed legislation into 0:07:41.440 --> 0:07:44.160 law three weeks after ten people were killed in a 0:07:44.200 --> 0:07:47.240 mass shooting at a Buffalo supermarket by a self proclaimed 0:07:47.480 --> 0:07:51.600 white supremacist. The bills will include banning anyone under the 0:07:51.640 --> 0:07:54.520 age of twenty one from buying or possessing a semi 0:07:54.520 --> 0:07:58.320 automatic rifle. As well as expanding current red flag laws. 0:07:58.960 --> 0:08:05.400 It's just Eve's happening. Shots ring out, flags come down, 0:08:06.440 --> 0:08:11.880 and nothing ever changes except here in New York. During 0:08:11.880 --> 0:08:15.240 the signing and Buffalo Governor Hocle says, New York legislators 0:08:15.240 --> 0:08:18.040 made the decision to be leaders when it comes to 0:08:18.080 --> 0:08:21.920 gun reform, rather than followers waiting on Washington, New York 0:08:21.960 --> 0:08:24.760 Mayor Eric Adams praised the new gun laws in the state. 0:08:25.200 --> 0:08:27.560 Adams says, though, that more needs to be done to 0:08:27.680 --> 0:08:32.480 properly prosecute the criminals who commit the crimes, because, he says, criminals, no, 0:08:32.720 --> 0:08:36.960 they won't face proper consequences. No one takes criminal justice 0:08:37.360 --> 0:08:41.600 seriously anymore. These bad guys no longer take them seriously. 0:08:42.200 --> 0:08:45.760 They believe our criminal justice system is a laughing stock. 0:08:46.200 --> 0:08:49.440 Mayor Adams also says they've taken three thousand guns off 0:08:49.440 --> 0:08:52.760 the streets. A bipartisan group of lawmakers in Congress is 0:08:52.800 --> 0:08:56.079 trying to find common ground to pass new gun control legislation. 0:08:56.480 --> 0:08:59.800 Democratic negotiators say a deal could be completed this week. 0:09:00.120 --> 0:09:03.720 Democratic Senator Chris Murphy of Connecticut. Parents are scared, kids 0:09:03.760 --> 0:09:07.280 are scared that they need progress. They need us to 0:09:07.320 --> 0:09:12.239 show that we care about what kids are going through UM, 0:09:12.280 --> 0:09:15.480 and I'm hopeful that we'll get a deal. Senator Murphy says. 0:09:15.480 --> 0:09:19.560 The proposals include enhanced background checks. The former top leader 0:09:19.600 --> 0:09:22.280 of the far right Proud Boys extremist group and other 0:09:22.320 --> 0:09:25.920 members have been charged with seditious conspiracy for what federal 0:09:25.960 --> 0:09:30.199 prosecutors say was a coordinated attack on the US Capitol, 0:09:30.600 --> 0:09:33.280 the US war and North Korea of a strong punishment 0:09:33.440 --> 0:09:36.640 if it conducts a nuclear test. The United Nations watch 0:09:36.679 --> 0:09:40.319 Dog Agency says signs into k Pyong Gang could soon 0:09:40.440 --> 0:09:45.200 set off its first atomic device since Global News twenty 0:09:45.200 --> 0:09:48.040 four hours a day on air and on Bloomberg Quicktake, 0:09:48.280 --> 0:09:51.199 powered by more than twenty seven hundred journalists and analysts 0:09:51.280 --> 0:09:54.959 more than a hundred twenty countries. Michael Bart, this is Bloomberg, Nathan. 0:09:55.120 --> 0:10:01.760 Thank you. Michael six o nine on All Street time 0:10:01.760 --> 0:10:04.400 for the Bloomberg Sports Update with John Sisha. All right, Anton, 0:10:04.440 --> 0:10:06.160 the Mets have the best record of National A. They 0:10:06.200 --> 0:10:08.480 just split a four game series with the Dodgers, who 0:10:08.480 --> 0:10:10.800 have the NLS second best mark, and the Mets are 0:10:10.840 --> 0:10:13.120 now in San Diego and the Padres are the owners 0:10:13.160 --> 0:10:15.720 of the third best record. The Mets took the series 0:10:15.720 --> 0:10:18.240 open the eleven five three runs in the first inning 0:10:18.280 --> 0:10:20.720 four of the ninth, and Wardo Escobar a big night 0:10:20.800 --> 0:10:23.480 four instantly on the home run he drove in six. 0:10:23.600 --> 0:10:27.079 Carlos Carrasco struck at ten improved his seven and one 0:10:27.200 --> 0:10:30.599 Yankees over their major league leading forty win. Tonight at Minnesota, 0:10:30.640 --> 0:10:33.120 they'll face a couple of x Yanks, Garry Sanchez and 0:10:33.200 --> 0:10:35.680 Juale or Sella. Rangers now have two games to one. 0:10:36.080 --> 0:10:38.680 Game four of Tampa Bay Tonight, we know who the 0:10:38.720 --> 0:10:41.480 winner of that series will play with the Stanley Cup. 0:10:42.800 --> 0:10:48.080 Tep talking great bad start. Try look at at and 0:10:48.160 --> 0:10:51.160 it don't have to go home, but you can't stay 0:10:51.240 --> 0:10:57.160 here because this party is over. K s E and 0:10:57.240 --> 0:11:00.640 Denver had to call the ad six five time when 0:11:01.200 --> 0:11:03.640 Edmonton that keapped a four game sweep. It's the first 0:11:03.679 --> 0:11:06.560 time Colorado has reached the Stanley Cup finals since winning 0:11:06.559 --> 0:11:09.240 the Cup in two thousand one. The Bruins fired their coach, 0:11:09.280 --> 0:11:12.320 Bruce Cassidy, he got them to the playoffs sixt eight years. 0:11:12.679 --> 0:11:15.400 Phil Mickelson has not been playing golf, says he needed 0:11:15.400 --> 0:11:18.040 time off, and Micholson made official he is going to 0:11:18.080 --> 0:11:20.840 play the new Saudi Back Live Tour that starts next 0:11:20.840 --> 0:11:23.920 month in London. Michelson said he's hopefully can still also 0:11:23.960 --> 0:11:27.200 play PG eight tour events. He told Sports Illustrated his 0:11:27.320 --> 0:11:31.240 gambling has been reckless and embarrassing that he's been in therapy. 0:11:31.679 --> 0:11:33.760 It was reported he once had forty million dollars in 0:11:33.840 --> 0:11:36.520 fambling losses. Greg Norman runs that Live Towards says Tiger 0:11:36.520 --> 0:11:39.079 Woods was offered a nine figure amount to play, but 0:11:39.200 --> 0:11:42.680 he said no. John stash that were Bloomberg Sports. Thank you, okay, John, 0:11:42.679 --> 0:11:45.280 thank you. Right now, SMP futures are down eighteen points down, 0:11:45.360 --> 0:11:50.040 futures down at eight, NASAC futures down seventy two points, 0:11:50.080 --> 0:11:53.720 sequity futures adding to their declines this morning. We'll get 0:11:53.760 --> 0:11:57.880 insights on this market coming up next with liz Anne Saunders, 0:11:58.360 --> 0:12:02.160 chief investment strategist at Charles Schwab. Stay with us for 0:12:02.200 --> 0:12:08.840 that you're listening to Bloomberg Gay Break. Bloomberg day Break 0:12:08.840 --> 0:12:10.959 is brought to you by Hofstra University's Frank gez R 0:12:11.080 --> 0:12:13.640 School of Business, top ranked online NBA program with a 0:12:13.720 --> 0:12:16.760 real world foundation. Learn more at Hofstra dot e d 0:12:16.960 --> 0:12:24.680 U slash go grad Markets headlines and breaking news twenty 0:12:24.679 --> 0:12:27.520 four hours a day at Bloomberg dot Com, the Bloomberg 0:12:27.559 --> 0:12:37.120 Business Outland, at Bloomberg Victape, He's a Bloomberg Business Flash 0:12:37.640 --> 0:12:40.559 and I'm kared Moscow. European stocks are dropping along with 0:12:40.640 --> 0:12:43.480 US stock index futures as central banks and on tightening 0:12:43.520 --> 0:12:46.160 policy fan growth fears, and we check the markets every 0:12:46.160 --> 0:12:49.240 fifteen minutes throughout the trading day on Bloomberg. Right now, 0:12:49.280 --> 0:12:51.719 U S and P futures are down twenty three points down, 0:12:51.760 --> 0:12:55.040 futures down a hundred seventy four, and NASDACK futures are 0:12:55.080 --> 0:12:57.719 down eighty four. The decks in Germany's down about one 0:12:57.760 --> 0:13:00.800 percent ten. Your treasury up six thirty seconds yield three 0:13:00.840 --> 0:13:03.000 point one percent. They yield on a two year two 0:13:03.040 --> 0:13:06.080 point seven one per cent. Nine max scrude oils down 0:13:06.120 --> 0:13:07.920 to tens per cent or twenty three cents and a 0:13:08.000 --> 0:13:11.160 hundred eighteen dollars twenty seven cents of barrel comes. Gold 0:13:11.240 --> 0:13:13.600 is up three tents per center five dollars at eighteen 0:13:13.679 --> 0:13:17.240 forty eight, the euro one point oh six seven nine 0:13:17.240 --> 0:13:19.720 against the dollar, British pound one point to five one 0:13:19.840 --> 0:13:22.560 four and the ends at one thirty two point six 0:13:22.679 --> 0:13:25.240 nine and look at a bitcoin this morning, down almost 0:13:25.240 --> 0:13:29.400 six percent at twenty nine thousand and five hundred seventy dollars. 0:13:29.679 --> 0:13:32.240 As a Bloomberg Business Flash, now, here's Michael Barr with 0:13:32.320 --> 0:13:35.080 more on what's going on around the world. Michael Karen, 0:13:35.120 --> 0:13:38.440 thank you very much. South Korea and US militaries flew 0:13:38.520 --> 0:13:41.960 twenty fighter jets over waters off South Korea's western coast 0:13:41.960 --> 0:13:44.840 today in a show of forest as a senior US 0:13:44.920 --> 0:13:48.400 official warrant of a forceful response if North Korea goes 0:13:48.440 --> 0:13:52.520 ahead with its first nuclear test explosion. Since sev age 0:13:52.520 --> 0:13:55.160 limits and red flag laws are being discussed in Washington, 0:13:55.240 --> 0:13:58.040 has a bipartisan group of senators looks for ways to 0:13:58.040 --> 0:14:00.040 curb the outbreak of gun violence in the name a 0:14:00.559 --> 0:14:05.160 strengthening background checks. Also on the table. In the NHL playoffs, 0:14:05.200 --> 0:14:07.840 the Avalanche beat the Oilers to advance to the Stanley 0:14:07.840 --> 0:14:11.400 Cup Final. Colorado will either face the Rangers or the Lightning, 0:14:11.400 --> 0:14:13.880 who play game for tonight. In baseball, the Mets and 0:14:13.920 --> 0:14:16.800 Red Sox one Global News twenty four hours a day 0:14:16.840 --> 0:14:19.800 on air and on Bloomberg Quick Take, powered by more 0:14:19.880 --> 0:14:24.040 than seven under journalist and analysts more than countries. Michael 0:14:24.040 --> 0:14:27.240 bar This is Bloomberg, Nathan Michael. Thanks, It is six 0:14:27.360 --> 0:14:31.320 nineteen on Wall Street Live from the Bloomberg Interactive Broker Studios. 0:14:31.360 --> 0:14:34.360 This is Bloomberg Daybreak and we're very pleased to be 0:14:34.440 --> 0:14:37.800 joined this morning by Liz Anne Saunders, chief investment strategist 0:14:37.800 --> 0:14:40.160 at Charles stab as we look to make sense of 0:14:40.200 --> 0:14:43.640 this market. Liz, good morning. We started this week with 0:14:43.680 --> 0:14:47.160 some modest gains, but now we're looking to give those 0:14:47.200 --> 0:14:50.600 back and then some. It seems like the debate over 0:14:50.680 --> 0:14:55.000 whether central banks can pull off tighter policy without triggering 0:14:55.000 --> 0:14:57.760 a recession is back in play. What's your view on 0:14:57.800 --> 0:15:01.600 where things stand now? Well, I think it was in 0:15:01.720 --> 0:15:04.160 play all along. We we had a we had a 0:15:04.160 --> 0:15:06.800 pretty brutal seven weeks span of time, and to see 0:15:06.800 --> 0:15:10.400 a bit of a countertrend or relief rally is to 0:15:10.480 --> 0:15:14.080 be expected. You had gotten to very oversold conditioned sentiment 0:15:14.120 --> 0:15:18.040 had gotten washed out, at least attitudinal measures of sentiment, 0:15:18.280 --> 0:15:21.600 and I think that that established a base for the 0:15:21.680 --> 0:15:23.480 kind of rally that we saw. I don't think it 0:15:23.560 --> 0:15:26.560 was driven by some assumption that either the Fed would 0:15:26.600 --> 0:15:28.600 be able to take their foot off the brake or 0:15:28.640 --> 0:15:31.120 we were in a goldilocks economic scenario. That's just the 0:15:31.200 --> 0:15:34.520 nature of rallies in bear markets. But we're still now 0:15:34.640 --> 0:15:38.760 facing a trillion dollars over the next year of of 0:15:38.880 --> 0:15:41.760 runoff on the balance sheet, and I think the digestion 0:15:41.880 --> 0:15:45.440 of the absence of that liquidity is sort of you know, 0:15:45.560 --> 0:15:48.480 back in front of mine. What do you think the 0:15:48.520 --> 0:15:51.920 impact is going to be as that removal of the 0:15:51.960 --> 0:15:54.440 punch bowl? Yes, you could say it starts to play 0:15:54.480 --> 0:15:57.520 out here. How's that going to affect investors going forward? 0:15:58.360 --> 0:16:01.440 I think this change in a liquidity environment is not 0:16:01.560 --> 0:16:04.160 a purely a prospective thing. It is as it relates 0:16:04.200 --> 0:16:06.720 to the balance sheet. But if you look at broad 0:16:06.720 --> 0:16:09.920 measures of money growth, even though still positive in your 0:16:09.920 --> 0:16:12.720 over year terms, well down relative to where we were 0:16:12.760 --> 0:16:16.800 certainly in and I think that that's been really the 0:16:16.880 --> 0:16:20.600 story of the at least phase one of the bear market, 0:16:20.680 --> 0:16:23.880 I think was the market reflecting this change in the 0:16:23.920 --> 0:16:27.560 liquidity environment, rising interest rates for to your own inflation, 0:16:27.600 --> 0:16:29.920 all the things we live even breathe every day. And 0:16:29.960 --> 0:16:32.920 I think Phase two was a hit to the economy, 0:16:32.960 --> 0:16:35.840 which was certainly reflected in in Q one with a 0:16:35.960 --> 0:16:40.520 negative GDP print. And I think the next phase maybe 0:16:40.920 --> 0:16:44.720 the market digesting what is likely to be a deteriorating 0:16:44.760 --> 0:16:48.080 profit outlook, and that really might be the first time 0:16:48.320 --> 0:16:53.600 really since the pandemic erupted that at least when we 0:16:53.600 --> 0:16:56.120 were coming out, you had that huge surgeon earnings off 0:16:56.120 --> 0:16:59.720 the off the lockdown lows. I think we may now 0:16:59.760 --> 0:17:04.560 for first time this quarter befacing estimates and a bar 0:17:04.800 --> 0:17:06.800 that is set a little bit too high. So I 0:17:06.800 --> 0:17:09.280 think that next phases shift to come. But this changed 0:17:09.440 --> 0:17:15.200 liquidity environment really started last year when we saw that 0:17:15.400 --> 0:17:19.520 significant shift in money supply in courtesy of both the 0:17:19.560 --> 0:17:22.199 fiscal side and now the monetary side. Are you starting 0:17:22.200 --> 0:17:26.600 to see evidence at this point that corporate earnings expectations 0:17:26.680 --> 0:17:30.240 are beginning to deterior right now? Yeah. So, if you 0:17:30.400 --> 0:17:33.320 if you go back the last six quarters or so, 0:17:33.600 --> 0:17:37.480 we we had a pretty consistent trend of estimates when 0:17:37.520 --> 0:17:40.840 they were first printed being on the lower side and 0:17:40.880 --> 0:17:43.120 then getting raised. If you look at the three month 0:17:43.200 --> 0:17:46.000 span of time, the final three months of estimates for 0:17:46.040 --> 0:17:50.679 each quarter, for the most part, those had moved higher, 0:17:50.720 --> 0:17:53.639 but for the first quarter or for the second quarter, 0:17:54.160 --> 0:17:57.240 that has actually been coming down. And longer term estimates 0:17:57.320 --> 0:18:00.920 out two to three years have rolled over as well, 0:18:00.960 --> 0:18:04.160 and I think this coming quarter that we're reporting second quarter, 0:18:04.200 --> 0:18:07.439 of course it won't start until July, maybe the first 0:18:08.080 --> 0:18:12.240 real signal of a change in the profit margin's landscape. 0:18:12.359 --> 0:18:16.080 They they've been surprisingly resilient, albeit down from the peak 0:18:16.119 --> 0:18:18.800 of last year. But you're really stacking up the companies 0:18:18.880 --> 0:18:23.119 that are talking about that margin pressure because of imput 0:18:23.160 --> 0:18:26.879 costs obviously inclusive of labor, but also now weaker demand. 0:18:27.480 --> 0:18:29.359 We only have about a minute left here, Lizianne, but 0:18:29.400 --> 0:18:31.639 I want to get your take on this debate playing 0:18:31.640 --> 0:18:35.360 out between JP Morgan's CEO, Jamie Diamond, and his chief 0:18:35.400 --> 0:18:38.840 economist over at JP Morgan about whether an economic hurricane 0:18:39.000 --> 0:18:42.080 is coming. Bruce Cassman, the chief economist, says he doesn't 0:18:42.080 --> 0:18:45.159 see a recession and what's your what's your view on it? So, 0:18:45.240 --> 0:18:48.040 I think anytime you have a FED shift to tightening mode. 0:18:48.080 --> 0:18:50.240 If you just go back in the history of modern 0:18:50.320 --> 0:18:53.719 day FED last thirteen rate hikes cycles, you've had ten recessions, 0:18:53.720 --> 0:18:56.480 three soft landing. So I think just history suggests the 0:18:56.520 --> 0:18:59.920 needle points a little more toward recession, especially when you 0:19:00.040 --> 0:19:01.840 have a FED that's trying to combat afford to your 0:19:01.920 --> 0:19:05.000 higher inflation and as I mentioned, already weak growth in 0:19:05.040 --> 0:19:07.920 the first quarter, so I think a recession is probably 0:19:07.960 --> 0:19:10.960 more likely. Soft landing is possible, but I think the 0:19:11.040 --> 0:19:13.560 supply side of the economy has to do some of 0:19:13.600 --> 0:19:17.080 the work for the FEDS, so continued loosening up on 0:19:17.119 --> 0:19:20.040 the labor market side as well as supply shortages, I 0:19:20.040 --> 0:19:22.240 think that would be the path. But we're we're in 0:19:22.240 --> 0:19:25.520 a storm. But whether hurricane is a little too bombastic, 0:19:26.119 --> 0:19:29.040 time will tell. Thanks as always, Lizzie, great to get 0:19:29.080 --> 0:19:32.560 your thoughts this morning. Liz Ane Saunders, chief investment strategist 0:19:32.640 --> 0:19:36.280 at Charles Schwab. Right now, SNP futures are lower by 0:19:36.359 --> 0:19:38.720 twenty eight points, a drop of seven tenths percent, their 0:19:38.760 --> 0:19:42.320 Dow futures down a hundred nine Nasdaq futures leading the declines, 0:19:42.720 --> 0:19:45.399 down a hundred twelve points for a drop of nine 0:19:45.400 --> 0:19:47.920 tenths of one percent. The ten year Treasury right now 0:19:48.000 --> 0:19:50.560 up six thirty seconds for a yield of three point 0:19:50.640 --> 0:19:53.240 zero one percent, yield on the two year two point 0:19:53.320 --> 0:19:56.320 seven one percent, and i'm x crude is lower by 0:19:56.320 --> 0:19:59.240 two tenths percent and nineteen cents a hundred eighteen dollars 0:19:59.680 --> 0:20:02.800 one for a Barrel of West Texas Intermediate. You're listening 0:20:02.880 --> 0:20:09.840 to Bloomberg Daybreak Bloomberg eleventh three oh weather partly mostly sunny, 0:20:09.920 --> 0:20:12.960 upper seventies today, showers and storms likely tomorrow with a 0:20:13.000 --> 0:20:15.880 high near eighty. Those showers and storms will end during 0:20:15.920 --> 0:20:19.760 the morning Thursday, currently sixty three degrees in Central Park. 0:20:22.200 --> 0:20:26.760 Broadcasting live from the Bloomberg Interactive Broker Studio in New York. 0:20:26.880 --> 0:20:29.960 Bloomberg E living free on to Washington, d C, Bloomberg 0:20:30.040 --> 0:20:33.320 N one to Boston, Bloomberg one O six one to 0:20:33.400 --> 0:20:37.120 San Francisco, Bloomberg N sixty to the Country, Sirius XM 0:20:37.200 --> 0:20:40.480 Gentle one nine and around the bloom the Bloomberg Business 0:20:40.480 --> 0:20:45.600 app and Bloomberg Radio dot Com. This is Bloomberg Daybreak. 0:20:50.240 --> 0:20:52.720 It's six thirty on Wall Street. Good morning, I'm Nathan 0:20:52.760 --> 0:20:55.600 Hagar and I'm faring most hour, just about three hours 0:20:55.600 --> 0:20:57.840 away from the open of U West Trading. It's time 0:20:57.840 --> 0:20:59.760 for the five things that you need to notice start 0:20:59.760 --> 0:21:03.399 your day. Brought to you by Interactive Broker Simple ib K, 0:21:03.560 --> 0:21:06.639 our Global Trader app. Deposit in your local currency and 0:21:06.680 --> 0:21:09.280 trade stocks in the US, Europe and Asia. Start your 0:21:09.280 --> 0:21:13.359 free trial at ib K r dot com slash Global Trader. First, 0:21:13.400 --> 0:21:15.960 the latest on the future of Boris Johnson. The UK 0:21:16.080 --> 0:21:19.440 Prime Minister has managed to cling to power, surviving a 0:21:19.560 --> 0:21:23.000 confidence vote last night. I'm grateful to colleagues. I'm grateful 0:21:23.080 --> 0:21:26.760 for the support they given me. Boris Johnson's leadership was 0:21:26.840 --> 0:21:31.080 uncertain due to scandals and political challenges. The so called pandemic, 0:21:31.160 --> 0:21:34.600 Party Gate events and Downing Street angered citizens, along with 0:21:34.600 --> 0:21:37.920 a cost of living crisis and tax increase. After the result, 0:21:38.080 --> 0:21:40.440 Johnson said it was time to get back to helping 0:21:40.480 --> 0:21:44.600 people in the UK. We have a conclusion to something 0:21:44.600 --> 0:21:47.520 that's been dragging on for far too long, and we 0:21:47.600 --> 0:21:50.280 have the ability not to unite, deliver and get on 0:21:50.640 --> 0:21:52.840 with the people's priorities. And that is what we're gonna do. 0:21:53.000 --> 0:21:55.840 Boris Johnson received two hundred eleven votes in a confidence 0:21:55.880 --> 0:21:58.320 motion and one hundred forty eight against him. All right, 0:21:58.359 --> 0:22:00.440 let's turn to the war in Ukraine now. Karen Russia 0:22:00.480 --> 0:22:03.560 has banned dozens of US officials from entering the country, 0:22:03.720 --> 0:22:06.520 while Ukraine's looking for ways to restart grain exports from 0:22:06.560 --> 0:22:09.640 ports that have been blocked by Russia's military. Treasury Secretary 0:22:09.720 --> 0:22:13.000 Janet Yellen and Blackrock CEO Larry Fink are among those 0:22:13.040 --> 0:22:16.040 now banned from Russia. Back in the US, Nathan, we're 0:22:16.040 --> 0:22:19.840