WEBVTT - Bloomberg Daybreak: May 23, 2022 - Hour 2 (Radio) 0:00:01.000 --> 0:00:04.279 By from the Bloomberg Interactive Brooker Studios. This is Bloomberg 0:00:04.360 --> 0:00:08.080 day Break for Monday May two. Coming up this hour, 0:00:08.360 --> 0:00:11.560 stock futures rise. Following the longest losing streak for the 0:00:11.720 --> 0:00:15.120 SMP five hundred in decades, President Biden said the US 0:00:15.200 --> 0:00:19.040 would intervene to defend Taiwan from China or baby formula 0:00:19.200 --> 0:00:22.080 arrives in the US, and Broadcom isn't talk to buy 0:00:22.200 --> 0:00:25.520 a top cloud computing company. New York City police continued 0:00:25.560 --> 0:00:28.240 to search for the gunman in a deadly random subway shooting. 0:00:28.280 --> 0:00:31.000 Plus Ukraine says up to one hundred of their soldiers 0:00:31.120 --> 0:00:35.120 die every day. I'm Michael blarn More ahead, I'm Scotts Edinburgh, 0:00:35.200 --> 0:00:38.280 Yankee swept in a doubleheader, the Mets pickup win, and 0:00:38.400 --> 0:00:41.720 the Rangers defend the hallmarks of that More coming up 0:00:41.760 --> 0:00:47.360 in sports. That's all Trading ahead on Bloomberg Daybreak on 0:00:47.520 --> 0:00:51.960 Bloomberg eleven three on New York, Bloomberg one, Washington d C, 0:00:52.440 --> 0:00:56.000 Bloomberg one oh six one, Boston, Bloomberg nine sixties and 0:00:56.120 --> 0:00:59.920 Francisco Sirius x M one nineteen and around the world 0:01:00.000 --> 0:01:03.040 Old on Bloomberg Radio dot Com and via the Bloomberg 0:01:03.120 --> 0:01:09.840 Business App. Good morning. I'm John Tucker and I'm Karen 0:01:09.920 --> 0:01:12.960 Moscow US dock indext futures on the rise this morning. 0:01:13.000 --> 0:01:14.680 We're coming up to six o one on Moll Street, 0:01:14.680 --> 0:01:16.880 and we checked the markets every fifteen minutes throughout the 0:01:16.920 --> 0:01:20.319 trading day. On Bloomberg. SNP future is up twenty three 0:01:20.360 --> 0:01:23.600 points and down futures of a hundred seventy nasday futures 0:01:23.600 --> 0:01:26.680 of fifty three The decks in Germany's up half percent, 0:01:27.000 --> 0:01:29.640 ten year treasury down eleven thirty seconds held two point 0:01:29.840 --> 0:01:31.880 two percent, and they yield on the two year two 0:01:31.959 --> 0:01:35.160 point six zero percent, and NIMEX screwed oil is at 0:01:35.240 --> 0:01:38.360 one point two percent. John and Karen. The rise in 0:01:38.440 --> 0:01:40.720 futures comes after the S and P five hunder touch 0:01:40.840 --> 0:01:44.200 bear market territory on Friday and closed lower for a 0:01:44.440 --> 0:01:48.280 seventh straight week. According to Basbook Investment Group, it's just 0:01:48.440 --> 0:01:52.960 the SNPs fourth Street of seven or more weekly losses 0:01:53.120 --> 0:01:56.400 in the post World War two era. Alan Zaffron is 0:01:56.400 --> 0:01:59.320 founding partner and co CEO at I e Q Capital. 0:01:59.520 --> 0:02:03.280 Benthan is terrible enough, so we're we're ready for a 0:02:03.400 --> 0:02:06.760 bear market rally, but it's still probably a bear market 0:02:06.880 --> 0:02:09.679 rally until such time as there's evidence the economy is 0:02:09.800 --> 0:02:12.480 very close to a bottom. Alexanfred of i e Q 0:02:12.720 --> 0:02:15.160 Capital is not alone in thinking stocks will head lower. 0:02:15.360 --> 0:02:18.959 According to the latest Bloomberg end my pulse Pole participantsy 0:02:19.080 --> 0:02:22.839 the S and P five hunder falling another ten percent. Well. John. 0:02:22.880 --> 0:02:25.000 While many traders see the U S economy headed for 0:02:25.080 --> 0:02:28.240 a recession, the President of the United States isn't so sure. 0:02:28.400 --> 0:02:31.320 He answered the question at a press conference in Tokyo overnight. 0:02:31.600 --> 0:02:36.480 In your view, he's a recession in the United States inevitable? No, 0:02:38.200 --> 0:02:40.680 why not? Our GDPs are going to grow faster than 0:02:40.840 --> 0:02:44.200 China's for the first time in forty years. How does 0:02:44.240 --> 0:02:47.079 that mean we don't have problems? We do. We have 0:02:47.200 --> 0:02:49.639 problems with the rest of the world has, but less 0:02:49.639 --> 0:02:51.880 consequential than the rest of the world has been because 0:02:51.960 --> 0:02:54.799 of our internal growth from STrenD and at the same 0:02:54.880 --> 0:02:58.120 press briefing in Tokyo, President Biden made headlines who announced 0:02:58.160 --> 0:03:01.000 if the U S would defend Taiwan for much China attack, 0:03:01.440 --> 0:03:04.800 are you willing to get involved militarily to defend Taiwan 0:03:04.919 --> 0:03:11.800 if it comes to that, you are made? President Biden 0:03:11.840 --> 0:03:14.880 also announced that a dozen Indo Pacific countries will join 0:03:14.960 --> 0:03:18.160 the US and a sweeping economic initiative designed to counter 0:03:18.360 --> 0:03:21.440 China's influence in the region. And earlier in his trip, 0:03:21.639 --> 0:03:23.880 during the stop at South Korea on Sunday, the President 0:03:23.919 --> 0:03:27.560 also address the growing concern over monkey pox cases around 0:03:27.600 --> 0:03:30.720 the world. Concern in the sense that I were to 0:03:30.760 --> 0:03:35.280 spread this conquen That's all they told me. President says 0:03:35.320 --> 0:03:39.280 they're speaking to advisors about monkey pots. The President's National 0:03:39.400 --> 0:03:43.000 Security advisor, Jake Sullivan, says the US has a relevant 0:03:43.120 --> 0:03:47.600 vaccine reader to be deployed to treat the disease if needed. Well. 0:03:47.720 --> 0:03:50.960 The US monitors the monkey pok situation. John it is 0:03:51.040 --> 0:03:53.600 getting some relief this morning on the battle against the 0:03:53.680 --> 0:03:57.160 baby formula shortage. We get the latest life from Bloomberg's 0:03:57.160 --> 0:03:59.920 Renida Young. Good morning, Nida, Good morning Caaron a play. 0:04:00.000 --> 0:04:02.760 A load of more than seventy thousand pounds of baby 0:04:02.840 --> 0:04:06.920 formula arrived in the US on Sunday. It's called Operations 0:04:06.960 --> 0:04:11.920 Fly Formula, an emergency program to alleviate the national shortage 0:04:11.960 --> 0:04:15.360 that's left some parents scrambling to feed their children. President 0:04:15.360 --> 0:04:18.960 Biden's top economic advisors says more formula will start arriving 0:04:19.040 --> 0:04:21.760 in stores as early as this week, and last week 0:04:21.839 --> 0:04:25.600 the President invoked emergency powers under the Defense Production Act 0:04:25.960 --> 0:04:30.400 to spur domestic manufacturing of baby formula. Live in New York, 0:04:30.480 --> 0:04:33.520 I'm Reneda Young Bloomberg Day bring reneed to thanks. After 0:04:33.640 --> 0:04:36.560 a two year hiatus because of the pandemic, The annual 0:04:36.600 --> 0:04:40.520 World Economic Forum in Davos, Switzerland is back, but without 0:04:40.560 --> 0:04:43.040 the hype of years past. Our Tom Keene is covering 0:04:43.080 --> 0:04:46.640 the event for both Bloomberg Radio and television. This will 0:04:46.680 --> 0:04:49.880 be a different Davos, There's no question about it. I 0:04:49.960 --> 0:04:53.080 think the major thing is the change of calendar, not 0:04:53.360 --> 0:04:56.720 January but May and much more. It will be compressed 0:04:56.760 --> 0:05:00.279 pretty much from four days down to three days. Revel 0:05:00.320 --> 0:05:04.039 schedules seem to be so tight for so many people attending. 0:05:04.200 --> 0:05:07.480 The war is absolutely front and center, There's no question 0:05:07.880 --> 0:05:10.479 about that. There will be some other themes, some ideas 0:05:10.520 --> 0:05:14.600 of risks as well, but the overarching theme besides the 0:05:14.680 --> 0:05:18.360 wars my colleague Paul Sweeney mentioned is the idea here 0:05:18.880 --> 0:05:21.760 of what do we do about inflation? And that will 0:05:21.880 --> 0:05:25.800 transcend the dialogue all the way all the way through 0:05:25.920 --> 0:05:29.400 this UH three days in Davos. Thanks Tom. Bloomberg's Tom 0:05:29.480 --> 0:05:32.839 came reporting from Davos beginning this morning along with Lisa Brambo. 0:05:32.880 --> 0:05:35.640 It's on Bloomberg Surveillance and say two for that that's 0:05:35.640 --> 0:05:38.680 going to get at seven am Wall Street time. Christine 0:05:38.760 --> 0:05:41.680 Leguard is one official who will be and Davos this week, John, 0:05:41.720 --> 0:05:44.640 But ahead of her appearance, the European Central Bank president 0:05:44.760 --> 0:05:48.200 is making some critical comments about cryptocurrencies because more from 0:05:48.200 --> 0:05:51.360 Bloomberg's Maria TODAYO in Brussels, she gave an interview to 0:05:51.360 --> 0:05:53.799 a Dutch television She said that this thing is trash, 0:05:54.120 --> 0:05:57.920 it carries no value, and it's an investment vehicle for 0:05:58.040 --> 0:06:00.839 some to get very rich, but for other naive people 0:06:01.080 --> 0:06:04.120 to lose potentially a lot of money. But of course 0:06:04.360 --> 0:06:07.359 you know this is a central banker. Bitcoin, crypto everything 0:06:07.400 --> 0:06:11.080 around and we know essentially tries to defy central bankers. 0:06:11.160 --> 0:06:13.080 So of course what the central banker was ahead of 0:06:13.080 --> 0:06:15.440 these piquant to say that it's trash and she doesn't 0:06:15.440 --> 0:06:17.960 believe in it. And Bloomberg's Maria Today Osa and so 0:06:18.120 --> 0:06:21.560 far Leguard's comments are not impacting cryptos and checking Bitcoin 0:06:21.760 --> 0:06:25.880 right now, it is higher up one percent at thirty thousand, 0:06:26.040 --> 0:06:29.240 four thirty dollars, and we're seeing shares a vm Ware 0:06:29.400 --> 0:06:33.239 up in early trading the cloud computing company and talks 0:06:33.279 --> 0:06:36.680 to be bought by Broadcom. Details on that from Bloomberg's 0:06:36.720 --> 0:06:41.599 Doug Krisner. Vm Ware, based in Palo Alto, makes virtualization software. 0:06:41.680 --> 0:06:44.000 It allows a small number of servers to do more 0:06:44.200 --> 0:06:47.880 by enabling each to handle more than one program. Broadcom 0:06:48.080 --> 0:06:51.120 is a Singapore based giant in the semiconductor industry. A 0:06:51.240 --> 0:06:55.320 deal would help it diversified beyond computer chips. Vm Ware 0:06:55.400 --> 0:06:58.040 has a market cap of around forty billion dollars so 0:06:58.240 --> 0:07:01.880 far this year. It shares her down in New York. 0:07:01.920 --> 0:07:04.960 I'd prisoner Bloomberg Daybreak and Bloomberg Daybreak being drunt you 0:07:05.040 --> 0:07:07.880 by B and wide Melon's pershing Inside Conference back in 0:07:07.960 --> 0:07:11.240 person June fifteenth through the seventeen at the Gaylord Resort 0:07:11.280 --> 0:07:14.240 in Grapely in Texas. Don't miss it. Register now at 0:07:14.360 --> 0:07:18.440 Inside dot b and y Melon dot com. This is 0:07:18.480 --> 0:07:25.320 Bloomberg as Sex seven on Wall Street time to bring 0:07:25.400 --> 0:07:27.560 in Michael Barr to find out what else is going 0:07:27.600 --> 0:07:30.440 on in New York end around the world. John, Thank 0:07:30.440 --> 0:07:33.600 you very much, An unidentified gunman as shouting killed another 0:07:33.640 --> 0:07:37.280 passenger on a moving New York City subway train. Police 0:07:37.320 --> 0:07:40.040 officials say it appears to have been an unprovoked attack, 0:07:40.240 --> 0:07:43.080 and the victim, a forty eight year old man, died 0:07:43.200 --> 0:07:46.840 at a hospital in YPD Chief of Department Kenneth Corey. 0:07:47.240 --> 0:07:50.760 At this time, there are no arrests. The suspect is 0:07:50.800 --> 0:07:53.840 described as a dark skinned male who is heavy set 0:07:54.040 --> 0:07:56.880 with a beard. Police say the shooting took place yesterday 0:07:57.040 --> 0:08:00.440 on a Q train traveling over the Manhattan Bridge at 0:08:00.480 --> 0:08:03.720 around eleven forty a m. That's the time of day 0:08:03.840 --> 0:08:06.720 when subway cars are often filled with families, tourists and 0:08:06.760 --> 0:08:11.320 people had it to brunch. Meanwhile, the victim was a 0:08:11.480 --> 0:08:16.680 member of Solomon Solomon the Sacks, and we understand that 0:08:16.880 --> 0:08:21.520 the chairman of the company said that it was a 0:08:21.680 --> 0:08:26.400 disaster what happened, and he was beloved the victim. Japanese 0:08:26.400 --> 0:08:30.560 Prime Minister Fumio Kashita told President Joe Biden that Russia's 0:08:30.560 --> 0:08:35.280 aggression cannot be tolerated. The two leaders met in Tokyo 0:08:35.400 --> 0:08:40.800 to discuss regional security and economic cooperation. Speaking through a translator, 0:08:40.840 --> 0:08:57.079 Prime Minister Kashita Prime Minister Kashida's comments come as the 0:08:57.200 --> 0:08:59.960 United Nations agencies said the war in Ukraine as display 0:09:00.000 --> 0:09:02.000 it's more than a hundred million people from their homes. 0:09:02.559 --> 0:09:05.000 Ukraine's president says up to a hundred of its soldiers 0:09:05.200 --> 0:09:08.679 die every day in battle. Republican Congresswoman Liz Cheney of 0:09:08.720 --> 0:09:11.839 Wyoming was one of five individuals last night to receive 0:09:11.920 --> 0:09:15.760 the two John F. Kennedy Profile and Courage Award. In 0:09:15.800 --> 0:09:19.480 their livestream of acceptance speech, Cheney, who serves on the 0:09:19.520 --> 0:09:24.240 Special Committee investigating the January sixth Capital Ryot, spoke about 0:09:24.280 --> 0:09:27.319 the continuous threat to democracy. We face a threat we 0:09:27.400 --> 0:09:32.480 have never faced before, a former president attempting to unravel 0:09:32.679 --> 0:09:37.160 our constitutional republic. The award was also handed to Ukrainian 0:09:37.200 --> 0:09:40.719 President of Volodimir's Lensky and three US officials defending the 0:09:40.800 --> 0:09:45.160 integrity of the twenty presidential election. Global News twenty more 0:09:45.240 --> 0:09:47.679 hours a day on air and on Bloomberg Quick Take, 0:09:47.760 --> 0:09:50.959 powered by more than twenty seven hundred journalists and analysts 0:09:51.080 --> 0:09:53.400 more than a hundred twenty countries. I'm Michael Barr, and 0:09:53.480 --> 0:10:00.360 this is Bloomberg John Michael, thank you. He s sixtent 0:10:00.440 --> 0:10:02.839 on the Roll Street Time with the Bloomberg Sports Update. 0:10:02.920 --> 0:10:06.400 Here's Scott Sidenberg. Good morning, John egor Shist. Durkin made 0:10:06.440 --> 0:10:08.600 forty three saves me because I Ben and Ja had 0:10:08.600 --> 0:10:10.679 a goal and an assist as the Rangers beat the 0:10:10.760 --> 0:10:13.959 Hurricanes three one at the Garden yesterday. Chris Critter and 0:10:14.040 --> 0:10:16.520 Tyler Mott also scored as the Blue Shirts the fand 0:10:16.600 --> 0:10:19.559 home ice now trail two games to one. Here's head 0:10:19.600 --> 0:10:22.679 coach Gerard Glent a power play goal. That's how you 0:10:22.760 --> 0:10:24.319 went hockey game, the tight game. So it was a 0:10:24.320 --> 0:10:27.679 battle type battle again tonight. They obviously ego ego with 0:10:27.760 --> 0:10:29.839 an outstanding fust and that was the key. It was 0:10:29.920 --> 0:10:32.640 just the second win for the Blue Shirts over Carolina 0:10:32.720 --> 0:10:36.480 in their last ten meetings. Game fourth the Garden Tomorrow 0:10:36.600 --> 0:10:39.160 night baseball, the Yankees dropped both games of a double 0:10:39.240 --> 0:10:42.000 header to the White Sox three one in Game one 0:10:42.120 --> 0:10:45.959 and a five nothing shutout loss in game two. The 0:10:46.040 --> 0:10:49.120 Mets meanwhile blank the Rockies to nothing. Taywan Walker through 0:10:49.200 --> 0:10:53.160 seven scoreless innings. NBA Playoffs, the Warriors taken commanding three 0:10:53.200 --> 0:10:55.040 oh series lead over the Mavericks with a one on 0:10:55.200 --> 0:10:58.640 nine one win. Golf was an exciting finish at the 0:10:58.679 --> 0:11:02.280 PG eight Championship up yesterday, and Justin Thomas is walking 0:11:02.320 --> 0:11:05.760 around for the quick tap and he's got it. A 0:11:05.960 --> 0:11:10.600 two time major winner of the PGA Championship, Justin Thomas 0:11:11.120 --> 0:11:14.600 is your hundred port p G A champion here at 0:11:14.640 --> 0:11:18.760 Southern Hills and Culf, Oklahoma. The call is heard right 0:11:18.800 --> 0:11:22.880 here on Bloomberg Radio. Justin Thomas winning his second one 0:11:23.040 --> 0:11:27.840 or Maker Trophy, outlasting Wills Allatorus in a three whole playoff. 0:11:28.280 --> 0:11:32.000 I'm Scots murdered with Bloomberg Sports. All right, Scott, thanks 0:11:32.120 --> 0:11:34.960 very much, and hand they can show about Wall Street 0:11:35.000 --> 0:11:37.880 futures in the green right now, the down features they 0:11:37.920 --> 0:11:40.400 are up two hundred six points, that's up seven tenths 0:11:40.480 --> 0:11:44.480 of a percent. SMP even in futures twenty seven points higher, 0:11:44.559 --> 0:11:47.400 up seven tenths of a percent. After the Broader Index 0:11:48.000 --> 0:11:51.679 de skirted the definition of a bearer market on Friday, 0:11:52.120 --> 0:11:55.720 NASDAC features sixties six points higher, that is up six 0:11:55.800 --> 0:11:59.160 tenths of a percent. Right now, Dan, your treasury to 0:11:59.679 --> 0:12:02.400 two of the yield up three basis points. You're listening 0:12:02.520 --> 0:12:09.960 to Bloomberg tapering still ahead of Bloomberg. What is next 0:12:10.040 --> 0:12:12.760 for the markets? Well, I ask Patrick Armstrong, he's the 0:12:12.840 --> 0:12:16.480 chief investment officer of luring me, well, does he see 0:12:16.600 --> 0:12:23.319 signs of a bottoming? This is Bloomberg Markets, headlines and 0:12:23.480 --> 0:12:26.720 breaking news twenty four hours a day at Bloomberg dot Com, 0:12:26.880 --> 0:12:30.400 the Bloomberg Business Outland at Bloomberg Quick Tape. This is 0:12:30.440 --> 0:12:39.280 a Bloomberg business lash, and I'm parent Moscow's donks in 0:12:39.360 --> 0:12:42.800 the UN advancing after President Joe Biden said Schina tariffs 0:12:42.800 --> 0:12:46.400 imposed by the Trump administration we're under consideration. The dollar 0:12:46.520 --> 0:12:49.400 and treasuries are retreating, and we checked the markets every 0:12:49.440 --> 0:12:52.120 fifteen minutes throughout the trading day on Bloomberg, U s 0:12:52.160 --> 0:12:54.480 and P futures up twenty seven points this morning, Dow 0:12:54.600 --> 0:12:58.240 futures up two eleven and NAZDAC future is up sixty four. 0:12:58.400 --> 0:13:01.360 The decks in Germany's up six to puns of uppercent ten. 0:13:01.440 --> 0:13:04.040 Your treasury down ten thirty seconds, yield two point eight 0:13:04.120 --> 0:13:06.240 one percent. That yield on a two year two point 0:13:06.280 --> 0:13:09.240 six zero percent. Nin mex scrude oil is up one 0:13:09.280 --> 0:13:11.240 point one percent of a dollar twenty three and a 0:13:11.320 --> 0:13:14.360 hundred eleven dollars fifty one cents of barrel Comics gold 0:13:14.400 --> 0:13:16.679 up one point one percent or twenty dollars at eighteen 0:13:16.800 --> 0:13:19.719 sixty eight forty announce, the Euro one point oh six 0:13:19.800 --> 0:13:22.199 seven three against the dollar, British pound one point to 0:13:22.360 --> 0:13:25.120 five seven five, the yen is at one twenty seven 0:13:25.240 --> 0:13:28.559 point four three, and Bitcoin this morning of almost two 0:13:28.600 --> 0:13:31.800 percent at thirty thousand, five hundred dollars. That's a Bloomberg 0:13:31.880 --> 0:13:34.360 business flash. Now here's Michael Barr with more on what's 0:13:34.400 --> 0:13:37.520 going on around the world. Muchaele Karen, thank you very much. 0:13:37.600 --> 0:13:41.199 President Joe Biden says the US would intervene militarily of 0:13:41.320 --> 0:13:45.199 China where to invade Taiwan. Speaking in Tokyo, President Biden 0:13:45.240 --> 0:13:49.160 says such a move would dislocate the entire region. White 0:13:49.200 --> 0:13:52.000 House officials later said that Biden simply meant the US 0:13:52.360 --> 0:13:56.280 would provide military equipment to Taiwan, not send troops to 0:13:56.360 --> 0:14:00.320 defend the island of China attacks. CE seventeen mill terry 0:14:00.360 --> 0:14:04.520 cargo playing carrying about seventy eight thousand pounds of specialized 0:14:04.600 --> 0:14:08.760 baby formula from overseas, landed in Indiana yesterday to help 0:14:08.800 --> 0:14:11.920 ease the shortage In the NHL playoffs. The Rangers beat 0:14:11.920 --> 0:14:14.760 the Hurricanes three one. Carolina still leads the series two 0:14:14.840 --> 0:14:18.079 games to one. In the NBA Playoffs, the Warriors beat 0:14:18.120 --> 0:14:20.680 the Mavericks to lead the Western Conference Finals three games 0:14:20.760 --> 0:14:23.600 to zip. In baseball, the Yankees lost the double header 0:14:23.640 --> 0:14:27.040 to the White Sox, the Mets, Red Sox Orioles Nationals 0:14:27.120 --> 0:14:30.160 won the Giants, and A's lost. Global News twenty four 0:14:30.200 --> 0:14:33.240 hours a day on air and on Bloomberg Quick Tank, 0:14:33.560 --> 0:14:36.520 powered by more than twenty seven hundred journalists and analysts 0:14:36.600 --> 0:14:40.200 more than a hundred twenty countries. Michael Barr, this is Bloomberg, John, Michael, 0:14:40.240 --> 0:14:42.480 thank you. He is coming up on six twenty on 0:14:42.640 --> 0:14:45.960 Wall Street. We are lying for the Bloomberg Interactive Broker Studios. 0:14:46.520 --> 0:14:49.800 This is Bloomberg day Break O. US equity futures is 0:14:49.920 --> 0:14:52.920 Karen mentioned are higher this morning after the SMP five 0:14:53.000 --> 0:14:56.280 how to drop for a seventh straight week. So what's 0:14:56.320 --> 0:15:00.560 the next for investors joining US now? Patrick Armstrong, investment 0:15:00.640 --> 0:15:04.360 officer at Plurimi Wealth. Patrick, do you see signs of 0:15:04.520 --> 0:15:08.720 bottoming in the markets? I think you can make a 0:15:08.800 --> 0:15:11.920 case that markets will be bottoming around this level, assuming 0:15:11.960 --> 0:15:15.640 the United States doesn't fall into a recession. So surprisingly, 0:15:15.880 --> 0:15:19.560 when we entered two thousand twenty two UM, unless we're 0:15:19.560 --> 0:15:22.320 expecting two hundred and twenty earnings per share for the 0:15:22.440 --> 0:15:26.200 SMP fived. Those earnings estimates have actually been increased this 0:15:26.320 --> 0:15:28.360 year to two d and twenty seven is what analysts 0:15:28.360 --> 0:15:30.960 they're expecting right now. So the whole sell offs being 0:15:31.080 --> 0:15:34.280 driven by multiple contraction, which makes perfect sense given that 0:15:34.400 --> 0:15:37.240 liquidity is getting withdrawn from the system. Ten year yields 0:15:37.320 --> 0:15:40.360 have shot up UM close to three percent. I think 0:15:40.400 --> 0:15:42.920 they're going to continue to move higher. But as long 0:15:43.000 --> 0:15:45.240 as you don't see a real earnings recession, and I 0:15:45.280 --> 0:15:48.160 don't think that happens unless you have an economic recession. 0:15:48.520 --> 0:15:50.360 It will come down to what Powell wants to do. 0:15:50.520 --> 0:15:53.040 He's got fifty basis points hiking in June and July. 0:15:53.760 --> 0:15:56.240 If he assesses the lay of the land and starts 0:15:56.320 --> 0:16:01.080 to ease and accepts higher inflation rather than provoking a recession, 0:16:01.560 --> 0:16:03.960 I could see around these levels being a bottom for 0:16:04.000 --> 0:16:08.160 the SMP. With the PE multiple of somewhere around nineteen 0:16:08.240 --> 0:16:12.400 for the SMP five hundred, is that worth investing? Is 0:16:12.480 --> 0:16:15.040 it a cheap at this point? Well, I wouldn't call 0:16:15.080 --> 0:16:17.920 it cheap, so on a forward basis, it's seventeen pe 0:16:18.120 --> 0:16:21.080 on a trailing basis nineteen and a half UM. Those 0:16:21.160 --> 0:16:26.280 are pretty normal PE s, so they're not elevated anymore, 0:16:26.400 --> 0:16:28.280 but they're they're not cheap. I wouldn't call it cheap. 0:16:28.680 --> 0:16:31.280 On a price to sales basis. The SMP five hundreds 0:16:31.320 --> 0:16:34.200 at two point four times, and that's still very elevated. 0:16:34.240 --> 0:16:37.640 A typical price to sales multiple is one point six times. 0:16:37.680 --> 0:16:40.640 So UM on an earnings basis you could say fair valued. 0:16:40.720 --> 0:16:42.640 On a price to sales basis, you can still say 0:16:42.720 --> 0:16:47.320 thirty overvalued. It'll come down to what profit margin UM 0:16:47.400 --> 0:16:49.880 companies are able to generate. So if we do go 0:16:49.960 --> 0:16:53.560 into an environment where basically companies have their margins squeezed, 0:16:53.920 --> 0:16:56.480 which is totally plausible when you look at producer prices 0:16:56.560 --> 0:17:00.760 running much higher UM inflationary backdrop than can tumor prices 0:17:00.800 --> 0:17:03.960 are that basically implies that companies will be getting squeezed, 0:17:04.280 --> 0:17:06.439 you should see a lower price to margin and probably 0:17:06.520 --> 0:17:09.720 significantly lower price to sales. Are growth stocks off the 0:17:09.800 --> 0:17:13.879 table for you? I don't like the most extreme growth 0:17:13.920 --> 0:17:16.480 stocks UM, the stocks that don't have earnings yet and 0:17:16.520 --> 0:17:18.959 have business models where they're hoping to get earnings over 0:17:19.000 --> 0:17:21.680 the next decade. This isn't the environment you want to 0:17:21.760 --> 0:17:25.240 be chasing those kind of disruptors and hoping uh that 0:17:25.400 --> 0:17:28.120 eventually they'll grow their way into the multiples they trade at. 0:17:28.240 --> 0:17:30.960 That makes a lot of sense when liquidity is abundant, 0:17:31.000 --> 0:17:33.760 when interest rates are zero, and we're in an environment 0:17:33.800 --> 0:17:36.960 where quantitative tightening is beginning next month. We think ten 0:17:37.000 --> 0:17:39.600 your yields are moving well above three percent for the 0:17:39.640 --> 0:17:42.560 remainder of this year. So I prefer value stocks that 0:17:42.640 --> 0:17:45.080 are producing cash flow today, and the companies that don't 0:17:45.119 --> 0:17:46.879 have earnings, I think the market is going to continue 0:17:46.880 --> 0:17:48.879 to punish them. Does it feel like we've done a 0:17:49.000 --> 0:17:52.439 round trip? We're back to levels that we saw before 0:17:52.520 --> 0:17:56.760 the start of the pandemic. UM well on some of 0:17:56.840 --> 0:17:59.840 the most growth stocks. Yeah, they fall in You're back 0:17:59.840 --> 0:18:03.560 to levels you were um during the pandemic. I actually 0:18:03.600 --> 0:18:06.120 think they have further to fall because there's still billions 0:18:06.119 --> 0:18:08.400 in market cap that just don't even have a path 0:18:08.520 --> 0:18:11.119 to profitability. In my opinion, so UM a lot of 0:18:11.160 --> 0:18:13.240 the new I p o s, even having their perspectives, 0:18:13.320 --> 0:18:15.879 we don't have a path to profitability. But when interest 0:18:15.920 --> 0:18:19.240 rates for zero, investors still flopped into them. So I 0:18:19.320 --> 0:18:22.520 think it's an environment very similar to Q four two 0:18:22.560 --> 0:18:25.960 thousand and one, where the growth stocks still sold off, 0:18:26.240 --> 0:18:28.640 but the companies that were producing cash flow the market 0:18:28.680 --> 0:18:31.240 started to rotate into them. And I do think there's 0:18:31.240 --> 0:18:33.080 a lot of good companies out there right now that 0:18:33.160 --> 0:18:37.119 are trading at ten to even eight times earnings. We 0:18:37.200 --> 0:18:41.040 bought Mosaic on Friday, which is owns potash reserves which 0:18:41.080 --> 0:18:43.439 is used in fertilizer. It's trading at eight times earnings. 0:18:43.480 --> 0:18:44.920 And I think you're going to have a very strong 0:18:45.000 --> 0:18:49.840 backdrop with agricultural commodity prices where they are gauge. For me, 0:18:50.160 --> 0:18:55.560 you're the risk of recession at this point. So it's plausible. 0:18:55.640 --> 0:18:57.960 It's not my base case. In the United States, it's 0:18:58.000 --> 0:19:01.400 going to come down to Powell. Um if he blinks 0:19:01.800 --> 0:19:04.280 and he's got to make a policy mistake, He's got 0:19:04.320 --> 0:19:06.640 to decide I'm going to create a recession or I'm 0:19:06.680 --> 0:19:09.560 going to let inflation stay well above my two percent target. 0:19:10.040 --> 0:19:12.960 I actually think he's going to go for the second 0:19:13.000 --> 0:19:16.480 option and probably let inflation stay high. Um as long 0:19:16.560 --> 0:19:18.840 as it is showing signs that it has platoon and 0:19:18.960 --> 0:19:21.800 coming down towards two percent. I don't think he'll need 0:19:21.880 --> 0:19:23.600 to do the final kick to get it down to 0:19:23.680 --> 0:19:26.600 two percent, and that should allow the US to avoid 0:19:26.920 --> 0:19:30.240 a recession, but the consequences will be inflation much higher 0:19:30.280 --> 0:19:34.040 than the target. Patrick A pleasure appreciated. Patrick Armstrong, chief 0:19:34.080 --> 0:19:38.679 Investment Officer at Plurimi Wealth with us this morning at 0:19:38.720 --> 0:19:40.880 ahead of the open hob Wall Street, we have DOWN 0:19:40.960 --> 0:19:44.640 futures of one eighty nine points at sub six tenths 0:19:44.680 --> 0:19:48.400 of a percent, SMB futures twenty four points higher, that's 0:19:48.440 --> 0:19:51.320 of six tenths of a percent. At the NAZENT futures 0:19:51.359 --> 0:19:54.560 of fifty five points, that's up half a percent right now, 0:19:54.720 --> 0:19:58.560 ten year yield at to eight one three basis points higher. 0:19:59.320 --> 0:20:07.600 You're listening, it's a Bloomberg day break and the Bloomberg 0:20:07.680 --> 0:20:11.080 Weather from meteorologist Rob Caroline partly Sunday is gonna be 0:20:11.119 --> 0:20:13.520 cooler today and Lea's s gume with the heights Empert. 0:20:13.560 --> 0:20:17.560 You're topping out at seventy degrees mostly cloudy tonight blows 0:20:18.000 --> 0:20:25.080 fifty five to sixty Broadcasting live from the Bloomberg Interactive 0:20:25.119 --> 0:20:28.960 Broker Studio in New York, Bloomberg E Living Freedom to Washington, 0:20:29.040 --> 0:20:33.160 d C. Bloomberg to Boston, Bloomberg one O six one 0:20:33.280 --> 0:20:37.120 to San Francisco, Bloomberg N sixty to the country, Sirius XM, 0:20:37.240 --> 0:20:40.040 tod A one nine and around the globe the Bloomberg 0:20:40.080 --> 0:20:44.000 Business app and Bloomberg Radio dot com. This is Bloomberg 0:20:44.119 --> 0:20:52.680 Daybreak six thirty on Wall Street. Good morning, I'm John 0:20:52.720 --> 0:20:55.480 Tucker and I'm Karen Moscow. We are just about three 0:20:55.520 --> 0:20:57.840 hours away from the open of US trading time for 0:20:57.920 --> 0:21:00.200 the five phase you need to notice start your day. 0:21:00.280 --> 0:21:04.560 Brought to you by Interactive Brokers. Interactive Brokers charges marchin 0:21:04.640 --> 0:21:07.199 loan rates from one point three to two point three 0:21:07.280 --> 0:21:09.920 three percent, rates subject to change. Learn more at i 0:21:10.040 --> 0:21:14.400 VKR dot com. Slash Compare First futures are up amid 0:21:14.520 --> 0:21:17.280 expectations traders will help lift the S and P five 0:21:17.359 --> 0:21:21.160 hundred after a touched bear market Territory Friday. Despite talks 0:21:21.240 --> 0:21:24.800 of a US recession, Credit Sweet CEO Thomas Gonstein said 0:21:25.119 --> 0:21:28.720 he doesn't see what happening. People are somewhat insecured in 0:21:29.000 --> 0:21:32.200 risk off mode. But our house, he was still, is 0:21:32.320 --> 0:21:34.600 that there won't be a recession neither. It is here 0:21:34.680 --> 0:21:36.920 no next year, there will be slow down. Credit see 0:21:36.960 --> 0:21:40.240 CEO Thomas Gonstein was speaking in Davos with the Bloomberg's 0:21:40.240 --> 0:21:43.600 Francine Laqua. The annual Davos World Economic Forum is back 0:21:43.680 --> 0:21:47.000 this year. Tune into Bloomberg Radio and Television for full 0:21:47.080 --> 0:21:51.040 coverage This week overseas, President Biden indicated China terence imposed 0:21:51.080 --> 0:21:54.879 by the Trump administration or under consideration. He also declared 0:21:54.920 --> 0:21:58.480 the U. S Military would intervene should China attack Taiwan, 0:21:58.960 --> 0:22:01.040 but White House official later a state of the U. 0:22:01.160 --> 0:22:04.960 S would provide military equipment to the island, not sent troops. 0:22:05.280 --> 0:22:08.919 President Biden also announcing that a dozen Into Pacific countries 0:22:08.960 --> 0:22:12.080 will join the US and an economic initiative designed to 0:22:12.200 --> 0:22:15.679 counter China's influence in the region. Well John Before boarding 0:22:15.720 --> 0:22:18.600 Air Force One in South Korea yesterday, the President addressed 0:22:18.640 --> 0:22:23.320 the growing monkey pox outbreak. Well, heaven't told me the 0:22:23.520 --> 0:22:26.439 level of exposure yet, but it is something that everybody 0:22:26.480 --> 0:22:29.680 should be concerned about. We're working on a hard figure 0:22:29.720 --> 0:22:32.720 out what we do. And President Biden says he spoke 0:22:32.760 --> 0:22:35.879 to advisors about the monkey pox vires. Well, the US 0:22:36.000 --> 0:22:39.760 monitors monkey pox. It's getting relief on the battle against 0:22:39.800 --> 0:22:42.879 the baby formula shortage and Bloomberg's We Need a Young 0:22:43.000 --> 0:22:45.280 joins us live with more we need a good morning, 0:22:45.320 --> 0:22:48.480 Good Morning John. A plainload of more than seventy thousand 0:22:48.560 --> 0:22:51.840 pounds of baby formula arrived in the US on Sunday. 0:22:52.200 --> 0:22:56.359 It's called Operation Fly Formula, an emergency program program to 0:22:56.480 --> 0:22:59.960 alleviate a national shortage that's left thumb parents scrambling to 0:23:00.119 --> 0:23:03.880 feed their children. President Biden's top economic advisors says more 0:23:04.000 --> 0:23:06.640 formula will arrive in stores as early as this week. 0:23:07.200 --> 0:23:11.040