WEBVTT - Bloomberg Daybreak: July 25, 2022 - Hour 1 (Radio) 0:00:03.440 --> 0:00:06.280 Live from the Bloomberg in Directive Workers Studios. This is 0:00:06.320 --> 0:00:10.959 Bloomberg Daybreak for Monday, July two. Coming up the Shower. 0:00:11.240 --> 0:00:14.159 Investors brace for a pivotal week in the markets. The 0:00:14.240 --> 0:00:16.840 FETE is expected to hike rates by seventy five basis 0:00:16.880 --> 0:00:21.240 points again. Microsoft, Apple, Amazon, and Alphabet are all scheduled 0:00:21.239 --> 0:00:24.000 to report. And a new warning about monkey talks from 0:00:24.000 --> 0:00:27.920 the World Health Organization If he'd advisory extended till tonight 0:00:28.040 --> 0:00:30.720 for parts of the tri State. Donald Trump hands to 0:00:30.760 --> 0:00:34.120 the nation's capital. I'm John Tucker. Those stories straight ahead. 0:00:34.360 --> 0:00:36.840 I'm John Stastow and sports p Alonzo, the Big Glow 0:00:36.880 --> 0:00:38.800 for the met to the one over San Diego, Aaron 0:00:38.920 --> 0:00:44.839 Judge Homeward again the Yankees won in Baltimore. That's all 0:00:44.960 --> 0:00:48.680 training ahead on Bloomberg Daybreak on Bloomberg eleven three, on 0:00:48.760 --> 0:00:53.199 New York, Bloomberg one, Washington, d C, Bloomberg one oh 0:00:53.280 --> 0:00:57.800 six one, Boston, Bloomberg nine sixties and Francisco Sirius x 0:00:57.840 --> 0:01:01.160 AM one nineteen and around the world on Bloomberg Radio 0:01:01.240 --> 0:01:07.959 dot Com and via the Bloomberg Business App. Good Morning, 0:01:08.000 --> 0:01:11.000 I'm Nathan Hagar, and I'm Karen Moscow and US stock 0:01:11.040 --> 0:01:13.800 index futures are higher this morning. We're coming up to 0:01:13.880 --> 0:01:15.560 five oh one on Wall Street, and we checked the 0:01:15.560 --> 0:01:18.720 markets every fifteen minutes throughout the trading day. On Bloomberg, 0:01:18.760 --> 0:01:21.280 Guess and P Future is up, Abody points down, Future 0:01:21.360 --> 0:01:24.280 is up fifty two, Nasdack futures at thirty one, and 0:01:24.319 --> 0:01:27.240 a ten year Treasury down fifteen thirty seconds, yield two 0:01:27.240 --> 0:01:29.800 point eight zero percent, and the yield on the two 0:01:29.880 --> 0:01:33.200 year at three point zero zero percent. Nathan Karen, we 0:01:33.280 --> 0:01:36.560 begin with this week's highly anticipated FED meeting. The decision 0:01:36.600 --> 0:01:40.240 comes on Wednesday. After raising rates sharply in June, j 0:01:40.440 --> 0:01:43.120 Pal and his colleagues are expected to approve another seventy 0:01:43.120 --> 0:01:46.000 five bases point hike while the Fed titans policy to 0:01:46.000 --> 0:01:49.400 get inflation under control. Treasury Secretary Janet Yellen says she 0:01:49.440 --> 0:01:51.560 does not see any signed the economy is in a 0:01:51.560 --> 0:01:56.680 broad recession. We're likely to see some slowing of job 0:01:56.880 --> 0:02:01.040 creation um, but I do I don't think that's that's 0:02:01.040 --> 0:02:05.640 a recession. A recession is broad based weakness in the economy. 0:02:05.840 --> 0:02:09.519 We're not seeing that now. Treasury Secretary Janet Yellen made 0:02:09.520 --> 0:02:12.200 the comments on NBC's Meet the Press heard Sundays on 0:02:12.240 --> 0:02:15.880 Bloomberg Radio. Well, despite Yellen's comments and Nathan, investors are 0:02:15.919 --> 0:02:19.480 skeptical to Fed contain inflation without a recession. That's according 0:02:19.520 --> 0:02:23.000 to more than a people who responded to a Bloomberg 0:02:23.040 --> 0:02:26.360 and Live Pulse survey Beget more from Bloomberg's Heather Burg. 0:02:26.800 --> 0:02:29.720 Over sixty percent of the respondents in the survey said 0:02:29.760 --> 0:02:32.560 there's a low or zero probability that the FED can 0:02:32.600 --> 0:02:36.640 rein in inflation without causing our recession. And about two 0:02:36.680 --> 0:02:39.640 thirds of the respondents expect the ten er treasury yield 0:02:39.880 --> 0:02:42.160 to peak over the next nine months at the low 0:02:42.200 --> 0:02:45.520 three point seven percent, and most think that the Fed 0:02:45.600 --> 0:02:48.680 is going to start cutting rates in so definitely, it's 0:02:48.680 --> 0:02:54.400 a pretty muted outlook going into Bloomberg's Heather birth says, 0:02:54.400 --> 0:02:56.720 the majority in the survey say the FED funds rate 0:02:56.800 --> 0:02:59.840 will peak at four percent or less. Oh another note 0:02:59.840 --> 0:03:02.800 on inflation, Karen, prices may be close to peaking, but 0:03:02.919 --> 0:03:05.639 they won't come down quickly. That's according to an analysis 0:03:05.680 --> 0:03:08.560 by Bloomberg Economics, which things inflation is likely to stay 0:03:08.600 --> 0:03:11.440 above eight percent through the end of the year. In fact, 0:03:11.440 --> 0:03:14.800 the team's model assigns zero probability that inflation will drop 0:03:14.800 --> 0:03:18.280 below four percent. In the feed is not the only 0:03:18.360 --> 0:03:21.080 thing and focus this week, Nathan, it's also a big 0:03:21.200 --> 0:03:23.960 few days for major tech earnings. You get more from 0:03:23.960 --> 0:03:26.799 Bloomberg SHIRLEYE. Pillett. It's a week one we'll hear from 0:03:26.880 --> 0:03:32.000 names including Alphabet, Apple, Amazon, Microsoft, and Metal Platforms, among 0:03:32.080 --> 0:03:35.120 many others. We will also hear from more than thirty 0:03:35.160 --> 0:03:38.480 percent of S and P five hundred companies. Liz Young 0:03:38.640 --> 0:03:41.920 is head of investment strategy at SO five. Earning season 0:03:41.960 --> 0:03:45.480 has been mixed, not terrible so far, but we have 0:03:45.680 --> 0:03:48.440 heard from a lot of companies that they're thinking the 0:03:48.480 --> 0:03:51.160 following environment is going to be more challenging, so they're 0:03:51.160 --> 0:03:54.920 preparing themselves for that challenge. Also on deck this week 0:03:55.000 --> 0:04:01.080 three m Boeing, Chevron, Coca Cola, GM, Hilton, MasterCard, mcgarld's Proctoring, 0:04:01.120 --> 0:04:06.280 Gamble ups and Visa in New York. Charlie Palett Bloomberg Daybreaking. 0:04:06.320 --> 0:04:08.240 All right, Charlie, thank you, and earnings are all self 0:04:08.280 --> 0:04:10.400 ront and center in Europe this week, let's go live 0:04:10.440 --> 0:04:12.560 to London get the latest with Bloombergs You and Parks. 0:04:12.600 --> 0:04:15.160 Good morning, Good morning, Nathan and Karen A bump a 0:04:15.160 --> 0:04:18.600 week for European earnings. Ryanair has posted a profit for 0:04:18.680 --> 0:04:22.279 the first quarter, ahead of estimates. Europe's largest discount airline 0:04:22.279 --> 0:04:25.840 says it's cautious about bookings, though beyond the current summer 0:04:25.880 --> 0:04:30.080 travel boom. Meanwhile, first half profits slumping at Swiss Swiss 0:04:30.160 --> 0:04:34.640 Wealth Managers Julius bear that's as wild market swings spooks clients. 0:04:35.000 --> 0:04:37.479 And a cut to sales guidance for this year from 0:04:37.520 --> 0:04:41.360 medical equipment maker Phillips. It's been hit by inflationary pressures, 0:04:41.440 --> 0:04:45.480 supply chain troubles and COVID lockdowns in China. Phillips the 0:04:45.520 --> 0:04:48.200 worst performing share on the Stocks hundred today, down more 0:04:48.240 --> 0:04:50.720 than ten percent in London. I'm you in parts been 0:04:50.720 --> 0:04:53.839 book daybreak you, and thank you. In other news this morning, 0:04:53.880 --> 0:04:57.200 international concern is growing over monkey parks. The World Health 0:04:57.279 --> 0:05:00.400 Organization has to clear the monkey parks outbreak a public 0:05:00.440 --> 0:05:03.480 health emergency. We get the latest live from Bloomberg's n 0:05:03.600 --> 0:05:05.799 Need a Young, Good Morning, Rained, A Good morning, Karen. 0:05:05.880 --> 0:05:09.120 The lack of urgency and coordination in testing and treatment 0:05:09.200 --> 0:05:11.400 for the monkey pox virus in many parts of the 0:05:11.440 --> 0:05:15.400 world has prompted the World Health Organization to sound the alarm. 0:05:15.800 --> 0:05:18.760 The virus has spread to about sixteen thousand people in 0:05:18.800 --> 0:05:21.680 more than seventy countries in just a few months, and 0:05:21.720 --> 0:05:26.200 White House COVID nineteen Response Coordinator dr Ashishja says monkey 0:05:26.240 --> 0:05:29.960 pocks can be contained. The way we contain monkey pox 0:05:30.160 --> 0:05:32.800 is we have a very simple, straightforward strategy on this right, 0:05:32.839 --> 0:05:35.640 which is make testing widely available. We have done that, 0:05:35.720 --> 0:05:38.360 and now testing is far more frequent and common. We're 0:05:38.360 --> 0:05:41.039 gonna be releasing hundreds of thousands of more vaccines in 0:05:41.080 --> 0:05:45.039 the next days and weeks. Dr Ashishja made the comments 0:05:45.080 --> 0:05:48.040 on CBSS Face the Nation. You can hear the program 0:05:48.080 --> 0:05:51.440 on Sundays on Bloomberg Radio Live in New York. I'm 0:05:51.440 --> 0:05:54.200 rened a young Bloomberg Radio. All right, Nita, thank you. 0:05:54.200 --> 0:05:56.400 We also have a COVID pandemic we're still under and 0:05:56.400 --> 0:05:58.960 we've got an update this morning on President Biden's condition 0:05:59.040 --> 0:06:01.680 as he recovers from about with the virus. Amy Morris 0:06:01.720 --> 0:06:05.240 has that from our Bloomberg room in Washington. White House 0:06:05.240 --> 0:06:09.400 physician Kevin O'Connor says President biden symptoms are improving significantly, 0:06:09.640 --> 0:06:12.920 with the most prominent symptom now a sore thrope O'Connor 0:06:12.920 --> 0:06:15.400 says the seventy nine year old, who is vaccinated and 0:06:15.480 --> 0:06:18.479 double boosted, is responding to therapy is expected, and his 0:06:18.520 --> 0:06:22.080 other symptoms have diminished considerably. Biden is being treated with 0:06:22.120 --> 0:06:24.360 paxslavi it. He takes Thailand all and has been using 0:06:24.360 --> 0:06:26.799 an inhaler two to three times a day. The White 0:06:26.800 --> 0:06:29.760 House says he's still working as he continues to isolate 0:06:30.040 --> 0:06:33.240 in Washington. I'm Amy Morris Bloomberg debris right, Amy, thank 0:06:33.279 --> 0:06:35.800 you well. Incorporate news. This morning. Apple has announced a 0:06:35.880 --> 0:06:38.960 rare retail promotion in China. It's offering four days of 0:06:39.000 --> 0:06:42.680 discounts on its top tier iPhones and related accessories, aheaded 0:06:42.680 --> 0:06:45.640 a launch of its next generation devices. The company is 0:06:45.680 --> 0:06:49.600 historically reluctant to Walter pricing. The discounts come as China's 0:06:49.600 --> 0:06:52.760 economy tries to bounce back from major COVID lockdowns in 0:06:52.839 --> 0:06:56.479 Shanghai and Beijing. Finally, Karen Elon Musk is denying he 0:06:56.560 --> 0:06:59.880 had an affair with Google co founder Sergey Brinn's wife. 0:07:00.000 --> 0:07:02.240 According to the Wall Street Journal, this alleged affair took 0:07:02.279 --> 0:07:05.080 place in December. The newspaper says it led Brand to 0:07:05.160 --> 0:07:08.719 sell his investments in Musque's companies. Musk says the story 0:07:08.760 --> 0:07:11.160 is untrue and that he's still friends with Bran. Bran 0:07:11.440 --> 0:07:15.200 filed for divorce in January. Straight ahead, we have your 0:07:15.240 --> 0:07:18.640 latest local headlines and a check of sports. This is 0:07:18.680 --> 0:07:25.239 Bloomberg the South five oh seven on Wall Street, eighty 0:07:25.280 --> 0:07:27.920 two degrees in Central Park and an accident already on 0:07:27.960 --> 0:07:30.240 the way to jaff Careport westbound belt Parkway in your 0:07:30.240 --> 0:07:33.360 Cross Bay. Details coming up in traffic. First John Tucker 0:07:33.440 --> 0:07:35.040 with more on what's going on in New York and 0:07:35.080 --> 0:07:37.680 around the world. Good morning, John, Nathan historic Keith has 0:07:37.720 --> 0:07:40.760 many people struggling to pay the utility bills, and as 0:07:40.760 --> 0:07:43.760 Bloomberg's dedas Fella Greeny tells us, the Senate majority of 0:07:43.840 --> 0:07:47.720 Leader Chuck Schumer says people need more help. Senator Schumer 0:07:47.760 --> 0:07:52.240 says demand for New York's federally funded cooling assistance program 0:07:52.400 --> 0:07:56.840 is unprecedented. Area has been such a big demand for 0:07:56.960 --> 0:08:00.960 this program giving the heat way the occasions went up 0:08:00.960 --> 0:08:06.400 from about ten thousand to thirty thousand increase in demand, 0:08:06.600 --> 0:08:09.720 and is proposing adding billions of dollars to the budget 0:08:09.760 --> 0:08:12.840 for the program after it had to stop taking applications 0:08:13.040 --> 0:08:15.920 because it was so oversubscribed to the spell. A greedy 0:08:15.920 --> 0:08:19.920 Blueberg radio a destructive wildfire ne Usemity National Park has 0:08:19.960 --> 0:08:23.320 burned out of control through tinder dry forests and has 0:08:23.360 --> 0:08:26.240 grown into one of California's biggest blazes of the year. 0:08:26.600 --> 0:08:30.040 It's forcing thousands of residents to flee remote mountain communities. 0:08:30.400 --> 0:08:33.400 Sheriff Jeremy Breeze as the fight is far from over. 0:08:34.080 --> 0:08:38.679 There is hot ash, hot trees, still stuff throwing stuff 0:08:38.720 --> 0:08:43.079 over the line, causing US concerns, and two thousand firefighters 0:08:43.120 --> 0:08:46.880 battling the Oak Creek fire facing tough conditions including steep terrains, 0:08:46.920 --> 0:08:51.040 sweltering temperatures, and low humidity. Donald Truphy is coming back 0:08:51.040 --> 0:08:55.240 to Washington as Republican rivals maneuver for a possible primary challenge. 0:08:55.720 --> 0:08:59.839 Lowmakers probe his culpability for the January six insurrection for 0:09:00.000 --> 0:09:03.439 were president with the liberal keynote speech yesterday Tomorrow at 0:09:03.440 --> 0:09:07.480 the America First Agenda Summit, a conservative conference. A live 0:09:07.520 --> 0:09:10.480 stream of a church service in New York was interrupted 0:09:10.520 --> 0:09:14.520 Sunday morning by a robbery. Three gun toting thieves entered 0:09:14.559 --> 0:09:18.720 the Leaders of Tomorrow International Ministries in Brooklyn, demanding valuables 0:09:18.720 --> 0:09:21.920 from the Bishop Lamar Whitehead. You know, took my watch, 0:09:21.960 --> 0:09:24.600 took my jury, took my bishops ring, took my wedding 0:09:24.640 --> 0:09:27.720 ben and then they took my bishops across the bishop says. 0:09:27.760 --> 0:09:30.520 The thieves drove away, drove away in a white Mercedes. 0:09:30.960 --> 0:09:33.760 New York City is ranking n thre in the US 0:09:33.840 --> 0:09:36.720 for public bathrooms per capita, and now there's a bill 0:09:36.760 --> 0:09:39.840 aimed at opening more public bathrooms. It has the support 0:09:39.920 --> 0:09:42.480 to pass the City Council by the end of September. 0:09:42.920 --> 0:09:46.120 The effort comes after widespread shutdowns during the early days 0:09:46.160 --> 0:09:49.319 of the pandemic made it even tougher to find a restroom. 0:09:49.640 --> 0:09:52.520 The m t A, for instance, shuttered all seventy six 0:09:52.559 --> 0:09:55.520 toilets in the subway system. Could the news twenty four 0:09:55.559 --> 0:09:57.760 hours a day on Aaron on Bloomberg Quicktake power by 0:09:57.760 --> 0:10:01.680 more than journalists and analysm more than one hundred twenty countries. 0:10:02.040 --> 0:10:04.880 I'm John Tucker. This is Bloomberg. Nathan, Thank you John. 0:10:09.559 --> 0:10:11.600 Almost five ten on Wall Street. Time for the Bloomberg 0:10:11.640 --> 0:10:14.240 Sports Sunday. Good morning, John Stonshire, Good morning, Nathan, Aaron, 0:10:14.320 --> 0:10:17.640 Judge Peter Alonso, the two New York City Sluggers. They've 0:10:17.640 --> 0:10:19.640 got the two most runs vetted in the majors, and 0:10:19.640 --> 0:10:22.960 they'll be facing on tomorrow Wednesday a brief subway series 0:10:22.960 --> 0:10:25.280 at City Field. Yesterday in Baltimore, another home run for 0:10:25.400 --> 0:10:28.520 Judges thirties seven. He hit three in the series and 0:10:28.520 --> 0:10:30.440 in the game where he did in. Homery had four hits, 0:10:30.520 --> 0:10:33.160 Jose Trevino had four hits, and Nestor Cortez and the 0:10:33.240 --> 0:10:36.720 Yanks shut out the oriol six nothing. Last night City Field, 0:10:36.760 --> 0:10:39.280 Mets held scoreless until the sixth inning. At that point 0:10:39.640 --> 0:10:42.400 they'd only scored two runs in the series. Alonso then 0:10:42.520 --> 0:10:45.040 unloaded three run homer. Mets went on to leave the 0:10:45.080 --> 0:10:47.600 Padres eight to one, and then held on to win 0:10:47.679 --> 0:10:50.000 eight five in Atlanta, law So that met their game 0:10:50.040 --> 0:10:52.120 and a half ahead of the Braves. Among those and 0:10:52.240 --> 0:10:55.120 ductor of the Baseball Hall of Fame, Gil Hodges, fifteen 0:10:55.200 --> 0:10:57.640 years after his death, he was one of the Boys 0:10:57.679 --> 0:11:01.480 of Summer bolog Brooklyn Dodger for Spaceman. His daughter Irene 0:11:01.920 --> 0:11:05.320 made his induction speech. When my father slumped in the 0:11:05.440 --> 0:11:11.400 nineteen fifty two World Series, Brooklyn fans loved him. Who 0:11:11.440 --> 0:11:16.240 goes over one and gets the standing ovation every time 0:11:16.360 --> 0:11:18.560 at bat Mets fans loved him too. I just, of 0:11:18.600 --> 0:11:21.240 course the manager of the Miracle Mets in nineteen sixty nine, 0:11:21.600 --> 0:11:25.800 Cleon Jones Ed Cranepool, Art shampste Ron Swavoda and the 0:11:25.920 --> 0:11:28.040 daughter of the late Tom Siever. We're all there in 0:11:28.080 --> 0:11:31.599 Cooperstown where David Ortiz, Jim Cott, Tony Oliva and the 0:11:31.640 --> 0:11:34.720 late Mini Minosa and Buck O'Neal were all inducted as well. 0:11:35.080 --> 0:11:37.559 Three AM Golf at Minnesota, Tony fine out trailed by 0:11:37.600 --> 0:11:40.440 five shots with eleven holes to play, and he won 0:11:40.600 --> 0:11:44.000 by three. John stash Award Bloomberg Sports Nathan, Thank you John. 0:11:44.080 --> 0:11:46.760 Right now, SMP futures are up ten points, staff futures 0:11:46.840 --> 0:11:49.280 up seventy six. Dance dec futures are highed by thirty 0:11:49.320 --> 0:11:52.560 six points. The tain your treasury is down sixteen thirty 0:11:52.559 --> 0:11:56.400 seconds yield two point eight zero per cent on FED 0:11:56.480 --> 0:11:59.280 decision week. We'll take a look at these markets next 0:11:59.280 --> 0:12:01.880 with Lorie Calvin seen ahead of US Equity strategy at 0:12:01.960 --> 0:12:08.800 RBC Capital Markets. This is Bloomberg Bloomberg eleven three oh weather. 0:12:08.840 --> 0:12:10.680 We got a heat advisory till eight pm for parts 0:12:10.679 --> 0:12:12.800 of northern New Jersey, will get in your ninety today, 0:12:12.880 --> 0:12:16.920 mid eighties, less humid tomorrow, oper eighties on Wednesday right 0:12:16.960 --> 0:12:24.160 now two in Central Park Markets, headlines and breaking news 0:12:24.280 --> 0:12:26.839 twenty four hours a day at Bloomberg dot Com and 0:12:26.920 --> 0:12:31.040 Bloomberg Business Outland. At Bloomberg Quick Tape, He's a Bloomberg 0:12:31.120 --> 0:12:40.520 Business Flash and I'm Karen Moscow. US dot Index futures 0:12:40.520 --> 0:12:43.920 on the rise this morning, while European shares are little change. 0:12:44.040 --> 0:12:46.839 Treasury yields advancing. We checked the markets every fifteen minutes 0:12:46.840 --> 0:12:49.400 throughout the trading day on Bloomberg right now, s and 0:12:49.440 --> 0:12:51.920 P futures are up about eleven foys down futures of 0:12:52.040 --> 0:12:54.840 A D two and nasdack futures of thirty nine. The 0:12:54.960 --> 0:12:57.840 Daccine Germany is higher, up about two tents of upper 0:12:57.920 --> 0:13:00.880 cent ten year treasury down seventeen thirty seconds. He had 0:13:00.920 --> 0:13:03.000 two point eight one percent. They yield on the two 0:13:03.080 --> 0:13:06.280 years at three percent. Nivex screwed oil is up six 0:13:06.280 --> 0:13:09.040 tents percent, or fifty seven cents at ninety five twenty 0:13:09.080 --> 0:13:11.440 eight cents a barrel. Comics gold is up a tenth 0:13:11.440 --> 0:13:14.920 of a percent of a dollar seventy at seventeen forty seven, 0:13:14.880 --> 0:13:17.960 announced the euro one point oh two four three against 0:13:18.040 --> 0:13:20.520 the dollar, British pound one point to zero four two 0:13:20.559 --> 0:13:23.560 and again one thirty six point three nine and looking 0:13:23.600 --> 0:13:25.959 at bitcoin, it's down the most three percent at twenty 0:13:25.960 --> 0:13:30.120 two thousand fifty dollars. And German business confidence deteriorated to 0:13:30.120 --> 0:13:32.600 the worst level since the early months of the pandemic 0:13:32.679 --> 0:13:36.679 on growing concerns that record inflation and limited energy supplies 0:13:36.679 --> 0:13:39.880 from Russia will our Europe's biggest economy into a downturn. 0:13:40.080 --> 0:13:42.520 As a Bloomberg Business flash, now here's John Tucker with 0:13:42.600 --> 0:13:45.080 more on what's going on around the world. John, Good morning, 0:13:45.200 --> 0:13:48.720 Good morning, Tarring the international concern growing over Monkey Box, 0:13:49.040 --> 0:13:52.120 the World Health Organization has declared the monkey Box outbreak 0:13:52.120 --> 0:13:55.600 a public health emergency the White House physicians as President 0:13:55.640 --> 0:13:59.040 Joe Biden is improving from his COVID nineteen infection. And 0:13:59.160 --> 0:14:02.960 a distracted unidfire near you Sebody National Park burning out 0:14:02.960 --> 0:14:07.320 of control through Tinder Drive forest, thousands of residents have 0:14:07.360 --> 0:14:10.880 been evacuated. Sports The Yankees beat the Orioles, the Men's 0:14:10.880 --> 0:14:13.480 stop the Pondres, the Red Sox fold of the Blue Jays, 0:14:13.520 --> 0:14:17.160 Dodgers beat the Giants, and the Nationals, Beat the Diamondbacks 0:14:17.160 --> 0:14:19.600 Global News twenty four hours a day on There and 0:14:19.640 --> 0:14:22.560 on Bloomberg cuicktake Power by more than twenty seven hundred 0:14:22.600 --> 0:14:26.080 journalists and analysts in more than one hundred twenty countries. 0:14:26.360 --> 0:14:30.200 On John Tucker, This is Bloomberg. Thankay, John, Thank you. 0:14:30.240 --> 0:14:32.640 It's five nineteen on Wall Street Live from the Bloomberg 0:14:32.640 --> 0:14:36.360 Interactive Broker Studios. This is Bloomberg Daybreak. As we get 0:14:36.400 --> 0:14:40.239 started on a very important week for investors. Lori Calvacina 0:14:40.400 --> 0:14:42.840 is with us this morning, Head of US Equity Strategy 0:14:43.160 --> 0:14:46.160 at RBC Capital Markets. Lori, it's great to speak with 0:14:46.200 --> 0:14:47.920 you this morning while we all get ready for this 0:14:48.000 --> 0:14:52.000 FED decision coming up on Wednesday. The markets have pretty 0:14:52.040 --> 0:14:54.880 much priced in a seventy five basis point rate hike. 0:14:55.000 --> 0:14:57.200 What do you think the market reaction is going to 0:14:57.240 --> 0:15:01.880 be from whatever the Fed does decide on Wednesday? Well, well, 0:15:01.880 --> 0:15:04.200 thanks for having me. As always, I think that, as 0:15:04.240 --> 0:15:06.880 always with these events, it's really more about the details, 0:15:07.080 --> 0:15:09.520 um in terms of the commentary that's made afterwards, and 0:15:09.600 --> 0:15:11.720 at least at this point in time, it seems like 0:15:11.760 --> 0:15:13.880 there's pretty much of a consensus in terms of what 0:15:13.880 --> 0:15:15.480 the set is going to do. But I really think 0:15:15.480 --> 0:15:17.920 it's a forward look. One of the things that you know, 0:15:17.960 --> 0:15:21.200 I continue to talk to investors about is just the 0:15:21.200 --> 0:15:24.600 whole sensitivity of the FED to how these policies are 0:15:24.600 --> 0:15:27.480 reverberating in the economy. So I think if there is 0:15:27.520 --> 0:15:29.840 any indication that the SID is sensitive to that issue, 0:15:29.880 --> 0:15:32.160 I think that's something equity investors would hear. But of course, 0:15:32.200 --> 0:15:34.360 you know, unfortunately don't have a crystal ball, so it's 0:15:34.400 --> 0:15:36.600 hard to say exactly what Powell will say. But I 0:15:36.600 --> 0:15:39.520 think that sort of understanding the SED sensitivity there is 0:15:39.560 --> 0:15:42.040 something equity investors are always keen to know. Now we 0:15:42.120 --> 0:15:45.320 sort of have a dueling forecast for what the FED 0:15:45.440 --> 0:15:49.920 could do as we get further along in this tightening cycle. 0:15:50.000 --> 0:15:53.920 We've heard from Morgan Stanley strategists saying that the recession 0:15:54.040 --> 0:15:56.960 risk is growing and that stocks may have more room 0:15:57.040 --> 0:15:59.760 to fall here, while JP Morgan Chase is saying that 0:16:00.200 --> 0:16:03.640 maybe inflations peaked and there could be tail winds for stocks. 0:16:03.640 --> 0:16:07.760 What's your view on recession risk going forward? So I'll 0:16:07.800 --> 0:16:09.960 tell you that I'm in the camps that agrees that 0:16:10.000 --> 0:16:12.200 the recession risks have risen and we do need to 0:16:12.200 --> 0:16:14.320 be vigilant. But I'm an equity strategist, so I care 0:16:14.360 --> 0:16:16.880 about how equity markets digest us as opposed to making 0:16:16.920 --> 0:16:19.840 the economic call. And I will tell you that draw 0:16:19.880 --> 0:16:22.160 down already in the S and T it's come very 0:16:22.280 --> 0:16:24.600 very close, and that's where we're at the low and 0:16:24.680 --> 0:16:26.760 mid June. It's come very close to pricing and a 0:16:26.840 --> 0:16:29.280 typical recession. And if you look at small cap stocks, 0:16:29.280 --> 0:16:32.880 they essentially are pricing in a recession. They're already pricing in, 0:16:33.040 --> 0:16:35.360 for example, a big spike and job with claims. They're 0:16:35.400 --> 0:16:38.880 already pricing in a plunge in I S M manufacturing 0:16:38.960 --> 0:16:40.800 back to trough like levels if you just look at 0:16:40.800 --> 0:16:43.560 the relationship between the performance of those stocks and those 0:16:43.600 --> 0:16:46.720 economic indicators I mentioned. So I am more interested these 0:16:46.800 --> 0:16:49.640 days in adding on to rebound trades. We think that 0:16:49.680 --> 0:16:53.360 the fensage are overbought and overvalued at this point in time. Um, 0:16:53.360 --> 0:16:55.320 And I will just tell you John that if you 0:16:55.400 --> 0:16:58.680 go through the e c SC function on Bloomberg, which 0:16:58.720 --> 0:17:00.880 is something I do quite frequently, there aren't that many 0:17:00.920 --> 0:17:03.720 economists that are actually calling for an outright recession, but 0:17:03.840 --> 0:17:06.960 voices calling for the recession are quite loud, but if 0:17:06.960 --> 0:17:09.840 you look at streak a consensus economic forecast, it's really 0:17:09.840 --> 0:17:12.400 more for something coming close to contraction in the fourth 0:17:12.480 --> 0:17:15.919 quarter and really moderating to below trend type levels. And 0:17:15.920 --> 0:17:18.400 I think that's what equities are digesting at this point 0:17:18.400 --> 0:17:21.600 in time. Late last week, you made a pretty significant 0:17:21.640 --> 0:17:24.960 call to go overweight now on small caps stocks. Talk 0:17:25.000 --> 0:17:27.520 a little bit more about that. Why you're thinking that 0:17:27.600 --> 0:17:31.240 we should be cutting more toward small caps as opposed 0:17:31.280 --> 0:17:33.960 to larger ones. Yeah, so, John, small caps are my 0:17:34.000 --> 0:17:37.199 first professional child. Has spent about seven years exclusively covering 0:17:37.200 --> 0:17:39.560 the space back in the day um, including the ol 0:17:39.760 --> 0:17:41.600 oh you know, kind of oh nine period, which was 0:17:41.680 --> 0:17:44.439 quite dicey for the asset class. And you know, one 0:17:44.480 --> 0:17:46.760 of the things we know about small caps as they 0:17:46.800 --> 0:17:48.920 do tend to price in risks quite early. So I 0:17:48.960 --> 0:17:52.439 mentioned they're already pricing in this big deterioration. Certain uh 0:17:52.760 --> 0:17:55.119 very's sensitive economic indicators. But if you look at the 0:17:55.160 --> 0:17:58.920 valuations where at historic lows and small verses large um. 0:17:58.960 --> 0:18:01.080 You're also if you back at mid June, we were 0:18:01.080 --> 0:18:04.119 trading around eleven times a forward pe multiple and the 0:18:04.160 --> 0:18:06.680 Russell two thousand, and that is typically where the index 0:18:06.720 --> 0:18:09.879 bottoms out at If you also look at c FTC positioning, 0:18:09.960 --> 0:18:13.200 data positioning among asset managers and features, market for Russell 0:18:13.200 --> 0:18:17.960 two thousand features was well below financial crisis lows, making 0:18:18.080 --> 0:18:22.399 essentially massively new all time lows. That is astounding to me. 0:18:22.520 --> 0:18:24.280 It tells me, whatever your view of whether or not 0:18:24.359 --> 0:18:27.040 recession is coming, this is one area of the market 0:18:27.040 --> 0:18:29.560 where it has clearly been baked in. And we do 0:18:29.640 --> 0:18:33.320 know going back over time, recessions are historically fantastic buying 0:18:33.320 --> 0:18:37.240 opportunities for small caps like underperformed going in midway through 0:18:37.240 --> 0:18:39.280 the recession, you tend to see a big pivot and 0:18:39.320 --> 0:18:42.280 they outperform very strongly on the way out. And we 0:18:42.320 --> 0:18:44.600 think that we're getting closer to that inflection point if 0:18:44.600 --> 0:18:47.240 we aren't at it already got about him in left here, Laurie. 0:18:47.240 --> 0:18:48.960 We are going to hear from some big names in 0:18:49.040 --> 0:18:52.560 big tech this week in earnings. What's your expectation there? 0:18:53.720 --> 0:18:55.879 So I think that this is a bell Weather group. Um, 0:18:56.119 --> 0:18:57.679 you know, I do sort of, you know, care more 0:18:57.720 --> 0:19:00.760 about what classic tech is saying as opposed to communications 0:19:00.840 --> 0:19:04.480 services internet type names. Um, you know, we're we very 0:19:04.600 --> 0:19:07.200 keenly watched the software companies to see what the clues 0:19:07.200 --> 0:19:09.040 are in the corporate behavior. And I think for the 0:19:09.040 --> 0:19:12.560 corporate reaction, UM is going to really tell us how 0:19:12.640 --> 0:19:16.159 deep for this economic carnage economic damage that we may 0:19:16.200 --> 0:19:18.639 be facing gets UM. So I think that's really what 0:19:18.680 --> 0:19:20.320 I'm going to be looking for. But I do think 0:19:20.320 --> 0:19:23.040 the text stocks are reasonably valued at this point in time. 0:19:23.119 --> 0:19:26.400 So let's keep a close eye on the commentary. Yeah, 0:19:26.440 --> 0:19:28.760 we'll be watching for Thanks as always, LORI, great to 0:19:28.760 --> 0:19:31.200 have you on with us. Lori Calvacina, head of US 0:19:31.240 --> 0:19:35.640 Equity Strategy at RBC Capital Markets. Right now, SMP futures 0:19:35.640 --> 0:19:38.760 are up thirteen points, STOUT futures up ninety NASTAC futures 0:19:38.760 --> 0:19:41.600 are higher by fifty one points. Tend your Treasury is 0:19:41.640 --> 0:19:45.600 down fifteen thirty seconds. The yield two point eight zero percent. 0:19:45.960 --> 0:19:48.760 Yield on the two year right now two point nine 0:19:48.880 --> 0:19:52.960 nine percent just ahead Why Treasury Secretary Yellin says she 0:19:53.040 --> 0:19:57.560 does not see recession in the US economy. And Bloomberg 0:19:57.880 --> 0:20:01.680 m Live Pulse survey on where the Fed is going 0:20:01.720 --> 0:20:08.280 when it comes to inflation. This is Bloomberg Bloomberg eleven 0:20:08.320 --> 0:20:10.400 three oh weather heat advisory for parts of northern New 0:20:10.440 --> 0:20:13.159 Jersey today till eight pm. We're all getting them near 0:20:13.280 --> 0:20:16.640 ninety degrees today, mid eighties tomorrow upr eighties by Wednesday 0:20:17.080 --> 0:20:26.119 two is the current temperature in Central Park. Broadcasting live 0:20:26.280 --> 0:20:30.240 from the Bloomberg Interactive Broker's studio in New York, Bloomberg 0:20:30.240 --> 0:20:33.360 E Living Freedom to Washington, d C, Bloomberg nine nine 0:20:33.440 --> 0:20:36.960 one to Boston, Bloomberg one All six one to San Francisco, 0:20:37.040 --> 0:20:40.439 Bloomberg M sixteen to the country Sirius XM Cho one 0:20:40.560 --> 0:20:43.480 nine teen, and around the globe the Bloomberg Business app 0:20:43.600 --> 0:20:53.480 in Bloomberg Radio dot Com. This is Bloomberg Daybreak. It's 0:20:53.480 --> 0:20:55.720 five thirty on Wall Street. Good morning. I'm Nathan Hagar 0:20:56.000 --> 0:20:58.719 and I'm Karen mos Gali. Are just about four hours 0:20:58.760 --> 0:21:00.960 away from the open of US training. Must get you 0:21:01.000 --> 0:21:02.399 up to date on the news you need to know 0:21:02.440 --> 0:21:05.320 at this hour. We begin with this week's highly anticipated 0:21:05.359 --> 0:21:08.359 FED meeting, when Chair J. Powell and his colleagues are 0:21:08.400 --> 0:21:11.600 expected to once again approve US seventy five basis point 0:21:11.680 --> 0:21:14.919 hike so far. Our Treasury Secretary Janet Yellen says she 0:21:15.040 --> 0:21:18.240 does not believe the US economy is in a broad recession, 0:21:18.520 --> 0:21:22.600 but inflation is still a concern. Inflation is way too high. 0:21:22.960 --> 0:21:26.919 The FED is charged with putting in place policies that 0:21:27.000 --> 0:21:31.640 will bring inflation down, and I expect them to be successful. 0:21:32.960 --> 0:21:36.080 Treasury Secretary Janet Yellen made the comments on NBC's Meet 0:21:36.119 --> 0:21:38.320 the Press, and you can hear the program Sundays on 0:21:38.440 --> 0:21:41.840 Bloomberg Radio. Well, despite what Yelling saying, Karen, investors remain 0:21:41.920 --> 0:21:44.320 skeptical that the Fed will contain inflation. That's according to 0:21:44.359 --> 0:21:46.800 more than people who took part in a Bloomberg m 0:21:46.840 --> 0:21:49.359 Live Pulse survey, and according to a new model from 0:21:49.359 --> 0:21:52.760