WEBVTT - Bloomberg Daybreak: July 1, 2022 - Hour 1 (Radio) 0:00:02.600 --> 0:00:06.120 Live from a Bloomberg interactive Brooker Studios is Bloomberg Daybreak 0:00:06.160 --> 0:00:09.640 for Frinday, July one, two, Coming up this hour. The 0:00:09.720 --> 0:00:12.760 stock selloff continues after the worst first half in more 0:00:12.800 --> 0:00:15.480 than fifty years. The fetis in focused as a top 0:00:15.480 --> 0:00:19.800 Republican says the Central Bank needs more transparency. Bitcoin clause 0:00:19.840 --> 0:00:22.480 back losses as the digital currency seeks to rebound for 0:00:22.600 --> 0:00:25.920 Pittsburgh month. Eather police and Newark are investigating a shooting 0:00:25.960 --> 0:00:29.000 that left nine people wounded, plus New York City debuts 0:00:29.000 --> 0:00:32.920 a new DNA gun unit, Catch Criminal. I'm like long ahead, 0:00:33.280 --> 0:00:36.680 I'm Scott Santenberg, Kevin Durant. What's out the latest on 0:00:36.800 --> 0:00:39.960 NBA free agency? And the Yankees fell in Houston. That's 0:00:39.960 --> 0:00:45.640 all coming up in sports, That's all strained ahead on 0:00:45.720 --> 0:00:48.680 Bloomberg day Break on Bloomberg he Livened three on New 0:00:48.760 --> 0:00:53.680 York Bloomberg one, Washington, d C, Bloomberg one oh six one, Boston, 0:00:53.760 --> 0:00:58.080 Bloomberg nine sixties and Francisco syrius x M one nineteen 0:00:58.240 --> 0:01:01.160 and around the world on Bloomberg Radio dot Com and 0:01:01.280 --> 0:01:09.480 via the Bloomberg Business Act. And good Morning. I'm Karen Moscow. 0:01:09.720 --> 0:01:12.880 I'm Nathan Haggard Bloomberg Daybreak brought to you by Informatica. 0:01:13.040 --> 0:01:15.040 In the Cloud, your data has the power to do 0:01:15.080 --> 0:01:18.360 the extraordinary. Managed data across any location in the cloud 0:01:18.400 --> 0:01:22.600 for accurate and actionable insights. More at informattica dot com. 0:01:22.640 --> 0:01:25.640 And futures are lower this morning. It is five oh 0:01:25.640 --> 0:01:27.759 one on Wall Street. We checked the markets every fifteen 0:01:27.800 --> 0:01:30.320 minutes throughout the trading day on Bloomberg Right now, S 0:01:30.400 --> 0:01:33.640 and P futures are down fourteen points now futures down 0:01:33.640 --> 0:01:36.440 one D twenty and NAS day futures down forty seven. 0:01:36.680 --> 0:01:38.960 The docks in Germany is up to tenths of upper 0:01:39.000 --> 0:01:41.560 sent A ten year Treasury up five thirty seconds, yell 0:01:41.600 --> 0:01:44.280 two point nine and the yelled on the two year 0:01:44.400 --> 0:01:47.400 two point nine one percent, and I make screwed oil 0:01:47.520 --> 0:01:49.640 is at one point three percent at a hundred seven 0:01:49.720 --> 0:01:53.120 dollars fourteen cents a barrel Nathan Karen. As we head 0:01:53.160 --> 0:01:56.440 into this second half, another bout of risk aversion is 0:01:56.520 --> 0:02:01.240 rippling across market, sending futures lower long along with treasury yields. 0:02:01.280 --> 0:02:05.520 The SMP five hundred had its worst first half since seventy. 0:02:05.640 --> 0:02:09.200 Is inflation and fears of recession take hold, but Brent Shooty, 0:02:09.320 --> 0:02:12.760 chief investment officer at Northwestern Mutual, has a positive outlook 0:02:12.800 --> 0:02:17.679 for the second half. I think you're already starting to 0:02:17.680 --> 0:02:20.520 see signs of inflation pulling back. The market is already 0:02:20.600 --> 0:02:22.440 showing you that they believe it's going to pull back. 0:02:22.520 --> 0:02:24.560 I think that backdrop will lead to a stronger second 0:02:24.600 --> 0:02:26.760 half for stocks because we won't have to worry about 0:02:26.760 --> 0:02:29.960 the said continuing to hike US so far into a recession. 0:02:30.160 --> 0:02:32.160 Um we certainly could have a recession, but it would 0:02:32.200 --> 0:02:34.040 be very, very mild, and I think the market already 0:02:34.040 --> 0:02:36.799 discounted that. Brend Shooty with Northwestern Mutual thinks the biggest 0:02:36.880 --> 0:02:39.320 risk to markets right now is rising energy prices and 0:02:39.320 --> 0:02:42.480 the war in Ukraine. Well, US features are lower, Nathan, 0:02:42.520 --> 0:02:45.080 It's more of a mixed picture across the pond in Europe. 0:02:45.080 --> 0:02:47.520 And Bloomberg's You and Ponts joins us line from London 0:02:47.560 --> 0:02:50.600 with the latest good Morning You in Good Morning Counter ninthan. 0:02:50.680 --> 0:02:54.080 Plenty of sunshine in London this morning as July gets 0:02:54.120 --> 0:02:56.320 on the way, but a damp starts to the month. 0:02:56.480 --> 0:02:59.600 Equities with your Stock sounded up one tenth of one 0:02:59.600 --> 0:03:03.760 percent on lower than average volumes. Damn, certainly an improvement 0:03:03.800 --> 0:03:06.200 on the powerful storm that was the first six months 0:03:06.240 --> 0:03:08.280 of the year. It was the worst first half of 0:03:08.280 --> 0:03:11.400 the stockie hundred since two thousand and eight, the European 0:03:11.400 --> 0:03:15.600 benchmark shedding seventeen percent of its value between January and June. 0:03:15.919 --> 0:03:18.119 Live in London, I'm you and pots in big day break, 0:03:18.400 --> 0:03:21.160 kind of grace guys in Asia as well. You and 0:03:21.240 --> 0:03:24.079 with the looming economic slowdown driving another bad of risk 0:03:24.120 --> 0:03:27.080 a version there as well. Bloomberg's Juliette Sally joins us 0:03:27.080 --> 0:03:30.000 with more from Singapore. Good morning, Juliet, Good morning Nathan 0:03:30.000 --> 0:03:32.839 and Karen. The MSCI Asia Pacific Index started the new 0:03:32.840 --> 0:03:35.960 trading month quarter and half, where it finished off in 0:03:36.000 --> 0:03:38.400 the red. The gauge fell for a third session, led 0:03:38.480 --> 0:03:41.680 lower by Japan, and tech stocks hit hardest on growth concerns. 0:03:41.760 --> 0:03:44.840 Taiwan's tai x on track to enter a bear market, 0:03:44.880 --> 0:03:48.600 down twenty from its January peak. Stocks in Maitland, China 0:03:48.680 --> 0:03:51.680 meandered between gains and losses, and Hong Kong was closed 0:03:51.680 --> 0:03:55.040 for a holiday. The yen climbed, while commodity linked currencies 0:03:55.040 --> 0:03:57.760 were on the back foot, and India's rupee dropped to 0:03:57.920 --> 0:04:02.840 a record loan in Singapore. Juliette Sally Bloomba daybreak Right, Juliet, 0:04:02.880 --> 0:04:05.760 thank you all. Oil chocked up his first monthly decline 0:04:05.760 --> 0:04:08.480 since November. A lower consumer spending in the US and 0:04:08.520 --> 0:04:11.880 fears of our accession. We're pushing prices down. Prices are 0:04:11.960 --> 0:04:14.480 higher this morning. Nim Ex Screwed Oil up one point 0:04:14.480 --> 0:04:16.800 four percent, up a dollar forty seven and a hundred 0:04:16.800 --> 0:04:19.640 seven dollars cents, and Barrel brand is up one and 0:04:19.640 --> 0:04:22.600 a half percent at a hundred ten dollars sixty eight cents. Well, 0:04:22.640 --> 0:04:25.159 it's like at crypto now, Karen. Fresh off its biggest 0:04:25.160 --> 0:04:29.440 ever monthly declimb, Bitcoin's whip song traders today, Bloomberg's Granita 0:04:29.520 --> 0:04:31.960 Young joins US Live with Mark. Good morning, Granita, Good 0:04:31.960 --> 0:04:35.200 morning Nathan. Bitcoin rallied as much as eleven percent in 0:04:35.240 --> 0:04:38.440 Asia earlier today, It quickly gave up most of those 0:04:38.480 --> 0:04:42.720 gains as global equities took a dive. Bitcoin's wild swings 0:04:42.800 --> 0:04:47.040 underscore the uncertainty looming over cryptos as investors struggled to 0:04:47.080 --> 0:04:50.719 assess how far central banks will go detain inflation. And 0:04:50.800 --> 0:04:54.320 adding to that confusion, major crypto players have been thrown 0:04:54.360 --> 0:04:57.680 into disarray by the market sell off. That's raising the 0:04:57.720 --> 0:05:02.000 prospect of further contagion. Right now, bitcoin is trading around 0:05:02.160 --> 0:05:04.960 twenty thousand. Live in New York. I'm really need a 0:05:05.040 --> 0:05:07.120 young Bloomberg daybreak. All right, we need to thank you. 0:05:07.160 --> 0:05:09.360 We turned to Washington now, where the top Republican on 0:05:09.400 --> 0:05:12.440 the Banking Committee says the economy faces a significant risk 0:05:12.480 --> 0:05:15.480 over session. Pat Toomey points of the Federal Reserve, saying 0:05:15.480 --> 0:05:17.919 the central Bank has taken a position where they're not 0:05:18.000 --> 0:05:21.839 accountable to anyone. We have the situation where the FED 0:05:22.560 --> 0:05:25.560 is basically stonewall in Congress. The regional banks and to 0:05:25.680 --> 0:05:28.640 some some extent, the main FED are taking the position 0:05:28.680 --> 0:05:30.600 that what we do is none of your business. We're 0:05:30.600 --> 0:05:33.640 an independent agency. You can't really look very close down 0:05:33.680 --> 0:05:36.960 what we do. That's outrageous, right, The FED exists as 0:05:37.000 --> 0:05:40.080 a creature of Congress. Senator Pat Toomey said the FED 0:05:40.279 --> 0:05:43.880 must be more transparent and his subject to greater Congressional overside. 0:05:43.880 --> 0:05:46.520 He spoke with David Weston on Bloomberg's Balance of Power. 0:05:46.760 --> 0:05:50.000 Catch the program weekdays at noon on Bloomberg Radio and Television. 0:05:50.040 --> 0:05:52.719 We'll staying in Washington Karen fallout from this week's January 0:05:52.760 --> 0:05:55.719 six committee hearing remains front and center. Coacher Liz Cheney 0:05:55.760 --> 0:05:58.640 says the Secret Service agents involved in the reported incident 0:05:58.680 --> 0:06:02.360 with former President Donald Trum will now testify. Bloomberg said 0:06:02.360 --> 0:06:06.120 Baxter has the story. Cheney says she wants them under oath. 0:06:06.200 --> 0:06:09.479 The committee has spoken to both uh, Mr Ornado and 0:06:09.600 --> 0:06:14.560 Mr Angel. We welcome additional testimony, and says the committee 0:06:14.560 --> 0:06:17.919 will also detail witness intimidation by the White House. The 0:06:17.960 --> 0:06:19.640 way that I would put it is that it gives 0:06:19.720 --> 0:06:22.440 us a real insight into how people around the former 0:06:22.520 --> 0:06:26.720 president are operating and that they can influence the testimony 0:06:26.720 --> 0:06:29.400 of witnesses before the committee. She says, it will draw 0:06:29.480 --> 0:06:33.920 a clear picture. In San Francisco, I'm at Baxter Bloomberg daybreak, right, 0:06:33.920 --> 0:06:36.600 and thank you. Turning to Hong Kong now, where Chinese 0:06:36.600 --> 0:06:40.000 President Ji Jimping is presiding over celebrations marking twenty five 0:06:40.040 --> 0:06:43.200 years since the UK returned Hong Kong to China. Former 0:06:43.320 --> 0:06:45.360 police official John Lee has been sworn in as a 0:06:45.440 --> 0:06:49.119 city's chief executive. Ceremony comes as Hong Kong sees China 0:06:49.200 --> 0:06:51.880 tighten its grip on the city in Ukraine, care and 0:06:51.920 --> 0:06:54.880 Russian missile strikes hit an apartment building and a recreation 0:06:55.000 --> 0:06:58.479 center near Odessa earlier today. Seventeen people were killed. It 0:06:58.520 --> 0:07:01.400 comes after Moscow withdrew four verses from the strategic point 0:07:01.400 --> 0:07:05.800 of Snake Island. Ukrainian President Vladimir Zolinski's welcoming Russia's departure 0:07:06.000 --> 0:07:08.280 Moscow says it was a move to east grain shipments. 0:07:08.400 --> 0:07:12.360 Kiv says Russia was forced out by shelling. Futures moving 0:07:12.400 --> 0:07:15.200 lower this morning, and straight ahead, we have your latest 0:07:15.240 --> 0:07:19.560 local headlines and a check of sports. This is Bloomberg 0:07:23.120 --> 0:07:25.200 and it's now five oh seven on Wall Street where 0:07:25.200 --> 0:07:27.600 it's seventy three degrees in Central Park. You've got a 0:07:27.640 --> 0:07:31.320 closure on the northbound sawmill in the Bronx. Details coming 0:07:31.400 --> 0:07:33.960 up in traffic. First Michael Barb with more on what's 0:07:33.960 --> 0:07:36.120 going on in New York and around the world. Good morning, Michael, 0:07:36.120 --> 0:07:38.920 Good morning Nathan. New York Governor Kathy Oakel said she 0:07:39.080 --> 0:07:43.120 will convene a special session of the legislature today to 0:07:43.200 --> 0:07:48.120 begin considering legislation and shrining abortion access in the state's constitution. 0:07:48.440 --> 0:07:51.040 HOCl says the state will take action to protect its 0:07:51.040 --> 0:07:54.360 people in response to Supreme Court rulings on abortion rights 0:07:54.360 --> 0:07:58.000 and gun safety. It comes as New York lawmakers began 0:07:58.040 --> 0:08:01.520 a special legislative session yesterday with the intent of limiting 0:08:01.560 --> 0:08:05.679 the proliferation of firearms in public after the High Court 0:08:05.720 --> 0:08:09.000 got at the state century old handgun licensing law. New 0:08:09.080 --> 0:08:12.000 rules being rushed through an emergency session of the legislature 0:08:12.000 --> 0:08:15.240 would seek to set new restrictions on where firearms can 0:08:15.280 --> 0:08:18.440 be carried. Police in New Jersey say nine people, including 0:08:18.440 --> 0:08:22.000 a teenager, were wounded last evening in gunfire outside a 0:08:22.000 --> 0:08:25.960 neighborhood grocery shop in Newark. Acting Newark Public Safety Director 0:08:26.040 --> 0:08:29.680 Paul Malav says police are searching for a vehicle believed 0:08:29.720 --> 0:08:32.200 to have been involved in the shooting. We do have 0:08:32.320 --> 0:08:35.640 a vehicle that is of interest at this point. It's 0:08:35.640 --> 0:08:38.480 a white hand of pilot UH stolen out of Geergy 0:08:38.520 --> 0:08:41.880 City and we're following that. Lead public Safety Director Malav 0:08:42.000 --> 0:08:45.240 says all of the victims are expected to survive. New 0:08:45.320 --> 0:08:47.920 York Mayor Eric Adams says the city has launched what 0:08:48.000 --> 0:08:51.960 he calls the country's first ever forensic DNA gun crime unit. 0:08:52.440 --> 0:08:55.760 Adams says the new units with the city medical Examiner's 0:08:55.760 --> 0:08:58.280 office in Manhattan will be made up of twenty four 0:08:58.400 --> 0:09:02.959 full time criminologists who will process evidence. State of the art. 0:09:03.679 --> 0:09:08.240 The unit will accelerate evidence testing from sixty days to 0:09:08.400 --> 0:09:11.240 thirty days. It's going to cut it in half so 0:09:11.280 --> 0:09:15.559 that we can prosecute case faster and get dangerous people 0:09:15.640 --> 0:09:19.680 off our streets. Medical experts say they think COVID could 0:09:19.800 --> 0:09:22.560 come roaring back in the fall. Mayor Adams also says 0:09:22.600 --> 0:09:26.720 New York City announced a new Test to Treat mobile unit. 0:09:27.360 --> 0:09:30.520 It's in a joint federal and city program to improve 0:09:30.559 --> 0:09:35.120 access to the COVID anti viral drug PACKSLOVIT. This new 0:09:35.160 --> 0:09:38.640 public health service will help all New york Is get 0:09:38.679 --> 0:09:43.520 access to life saving treatments. Mayor Adams says the city 0:09:43.520 --> 0:09:45.719 helps to open nearly three dozen mobile units by the 0:09:45.800 --> 0:09:48.480 end of this month. W NBA star Britney Grinder is 0:09:48.480 --> 0:09:50.959 set to go on trial today in a Moscow area court. 0:09:51.240 --> 0:09:54.800 Grinder was arrested on Cannada's possession charges at a Russian airport. 0:09:55.120 --> 0:09:57.560 Global News twenty four hours a day on air and 0:09:57.679 --> 0:10:01.480 on Bloomberg Quicktake, powered by more than twenty seven hundred 0:10:01.520 --> 0:10:04.280 journalists analysts, more than a hundred twenty countries. Michael bar 0:10:04.400 --> 0:10:11.560 this is Bloomberg, Nathan. Thank you, Michael Damn. We're coming 0:10:11.600 --> 0:10:13.240 up to five ten on Wall Street. Time for the 0:10:13.240 --> 0:10:17.760 Bloomberg Sports Update. Here's Scott Seidenberg. Thanks Nathan. The bombshell 0:10:17.800 --> 0:10:21.440 that rocked the NBA world yesterday, Kevin Durant has requested 0:10:21.480 --> 0:10:25.200 a trade away from the Nets. The surprise announcement comes 0:10:25.240 --> 0:10:27.840 just a day after Kyrie Irving announced he was opting 0:10:27.880 --> 0:10:30.559 in it to the final year of his deal. Durant 0:10:30.600 --> 0:10:34.160 has four years remaining on his contract. Meanwhile, the Nicks 0:10:34.160 --> 0:10:36.240 have come to an agreement with free agent point guard 0:10:36.320 --> 0:10:38.800 Jalen Brunson on a four year, one hundred and four 0:10:38.880 --> 0:10:42.520 million dollar deal. Elsewhere, reigning two time m VP Nicola 0:10:42.559 --> 0:10:45.080 Yokis has agreed to a MAX extension with the Nuggets. 0:10:45.080 --> 0:10:49.760 It's the largest deal in NBA history. Also getting max 0:10:49.800 --> 0:10:53.120 extensions Devin Booker with the Son's, John Morant with the Grizzlies, 0:10:53.120 --> 0:10:56.840 and Karl Anthony Towns with the timber Wolves. Baseball, yesterday, 0:10:56.840 --> 0:10:59.040 the Yankees fell to the Astros to one. They'll begin 0:10:59.080 --> 0:11:01.719 a set in Cleveland tonight. The Mets will host the 0:11:01.840 --> 0:11:07.760 Rangers Tennis at Wimbledon, Rafael Nadal, Tech Advance Americans, Coco 0:11:07.840 --> 0:11:11.720 Golf and Jessica Pagoula move on sixth seed Carolina Plaskova 0:11:11.880 --> 0:11:16.920 was upset. I'm Scott Edinburg with Bloomberg Sports, Nathan Scott, 0:11:17.520 --> 0:11:20.240 thanks a lot, getting ready to start off the second 0:11:20.240 --> 0:11:24.079 half of two and futures at least for the moment 0:11:24.120 --> 0:11:27.400 are pointing to even more losses after the worst first 0:11:27.440 --> 0:11:31.920 half for stocks. Yes, we'll say it again since nineteen seventy. 0:11:32.040 --> 0:11:35.160 Right now, SMP futures are down eight points down, futures 0:11:35.200 --> 0:11:38.400 down seventy two. NASTAC futures are lower by twenty four points. 0:11:38.400 --> 0:11:41.080 Different story overseas. The decks in Germany is higher by 0:11:41.240 --> 0:11:43.800 four tenths percent. The CAEC in Paris is up a 0:11:43.800 --> 0:11:46.760 half percent. The tenure treasury back here in the US 0:11:47.120 --> 0:11:49.959 is up for thirty seconds, the yield now at two 0:11:50.040 --> 0:11:53.200 point nine nine percent. We'll look ahead to the second 0:11:53.280 --> 0:11:57.320 half and the risks of inflation and the potential slowdown 0:11:57.360 --> 0:12:00.240 if not a recession. Kit Juke's chief ex Strata just 0:12:00.400 --> 0:12:07.600 at suck Gen joins us. Next. This is Bloomberg Bloomberg 0:12:07.640 --> 0:12:10.320 eleven three oh weather Late day shower thunderstorm possible today 0:12:10.400 --> 0:12:12.680 low nineties, will be in the upper eighties tomorrow, low 0:12:12.760 --> 0:12:16.800 eighties Sunday sunshine, and eighty five for the fourth of July. 0:12:17.320 --> 0:12:23.400 Right now seventy three in Central Park markets, headlines and 0:12:23.480 --> 0:12:26.720 breaking news twenty four hours a day at Bloomberg dot Com, 0:12:26.840 --> 0:12:30.400 the Bloomberg Business at and at Bloomberg Quick Tape. He's 0:12:30.400 --> 0:12:39.640 a Bloomberg Business Flash, then I'm Cameron Moscow. Another bound 0:12:39.679 --> 0:12:42.760 of risk a version rippling across global markets, sending US 0:12:42.840 --> 0:12:46.240 DOT Index futures lower and lifting bonds and an ominous 0:12:46.240 --> 0:12:49.480 start to the second half. The dollar and yen traditional 0:12:49.559 --> 0:12:52.160 havens are climbing. If you checked the markets every fifteen 0:12:52.200 --> 0:12:55.439 minutes throughout the trading day, on Bloomberg, SNP future is 0:12:55.480 --> 0:12:58.240 down about seven points down, futures down fifty six, nast 0:12:58.280 --> 0:13:01.120 day futures down twenty the acts in Germany's up three 0:13:01.160 --> 0:13:03.640 tents of upper cent. Ten year treasury up seven thirty 0:13:03.679 --> 0:13:06.160 seconds yield two point nine eight percent, yield on a 0:13:06.240 --> 0:13:09.680 two year two point nine one percent. NIMEX scrude oil 0:13:09.800 --> 0:13:11.720 up one point eight percent of a dollar eighty eight 0:13:11.720 --> 0:13:14.000 at a hundred seven dollar, sixty four cents of barrel 0:13:14.280 --> 0:13:16.640 commacs gold is down six tenths per cent or eleven 0:13:16.679 --> 0:13:20.280 dollar seventy cents is seventeen nine sixty announced, the Euro 0:13:20.400 --> 0:13:22.360 one point oh four or five seven against the dollar, 0:13:22.400 --> 0:13:24.920 British pound one point two zero nine six, the n 0:13:24.960 --> 0:13:28.400 one thirty five point four five, and Bitcoin this morning 0:13:28.480 --> 0:13:31.760 is higher of four percent at nineteen thousand, five hundred. 0:13:32.080 --> 0:13:34.760 That's a Bloomberg business flash. Now here's Michael Barr with 0:13:34.840 --> 0:13:37.400 Moore on what's going on around the world. Michael, thank 0:13:37.400 --> 0:13:40.040 you very much. Jaren Ukrainian authorities say there was a 0:13:40.120 --> 0:13:44.319 Russian missile attacked to day on residential buildings in a 0:13:44.400 --> 0:13:47.600 coastal town near the port city of Odessa. At least 0:13:47.720 --> 0:13:51.439 seventeen people were killed, including two children. The top Republican 0:13:51.480 --> 0:13:54.760 on the House January six Committee, Congresswoman Liz Cheney, says 0:13:54.800 --> 0:13:57.960 the penel may ask the Justice Department to investigate anyone 0:13:57.960 --> 0:14:02.400 accused of pressuring witnesses. Florida's parental rights and education law 0:14:02.440 --> 0:14:05.520 that critics have dubbed that don't say gay measure begins today. 0:14:05.920 --> 0:14:09.760 It bands teaching on gender identity or sexual orientation in 0:14:09.840 --> 0:14:12.599 grades K through three in the state. In baseball, the 0:14:12.640 --> 0:14:15.720 Yankees lost, along with the A's Global News twenty four 0:14:15.720 --> 0:14:19.040 hours a day on air and on Bloomberg Quicktake, powered 0:14:19.080 --> 0:14:21.720 by more than twenty seven under journalists and analysts more 0:14:21.720 --> 0:14:24.760 than a hundred twenty countries. Michael bar and this is Bloomberg. 0:14:24.880 --> 0:14:27.160 Nathan all right, Michael, thank you. It's five nineteen on 0:14:27.200 --> 0:14:30.520 Wall Street Live from the Bloomberg Interactive Brokers studios. This 0:14:30.640 --> 0:14:33.120 is Bloomberg Daybreak, And as we get ready to kick 0:14:33.160 --> 0:14:36.160 off the second half of two, are very pleased to 0:14:36.160 --> 0:14:40.360 be joined this morning by Kit Jukes, Chief FX Strategists 0:14:40.440 --> 0:14:44.000 Associated General. Although when you look at the screen this morning, Kit, 0:14:44.120 --> 0:14:46.320 it looks like at least US investors are having a 0:14:46.360 --> 0:14:48.720 little bit of trouble closing the books on the first half, 0:14:48.760 --> 0:14:51.560 were pointing two more losses in the futures contracts. How 0:14:51.680 --> 0:14:56.119 much more pricing in of recession risk and inflation concerns 0:14:56.320 --> 0:15:00.040 does this market have to go? Uh? We could, We 0:15:00.120 --> 0:15:03.440 could go a fair distance further. Unfortunately, before we're done. 0:15:04.440 --> 0:15:06.120 One of the things you see at the moment is 0:15:06.120 --> 0:15:08.960 that sentiment has taken a real dive. But I'm not 0:15:09.000 --> 0:15:12.400 sure that the positioning data reflects the same thing. So 0:15:13.000 --> 0:15:14.600 I'm not sure people have got out of all of 0:15:14.640 --> 0:15:18.640 those longer positions that they had in stocks, particularly m 0:15:18.760 --> 0:15:21.440 But you know, equally, I think we've got relatively a 0:15:21.480 --> 0:15:24.920 liquid markets coming through. And you know now that certainly 0:15:25.080 --> 0:15:27.560 your government is all your central bank is selling back 0:15:27.640 --> 0:15:30.360 bonds to the market. We have a lot to absorb 0:15:30.480 --> 0:15:31.960 here to get the place, to get everything for the 0:15:32.040 --> 0:15:36.120 right place. So I'm i'm I'm nervous that July August, 0:15:36.240 --> 0:15:39.520 never the best most liquid months of the era, are 0:15:39.520 --> 0:15:42.040 going to be pretty bumpy all the way through. Not 0:15:42.200 --> 0:15:45.440 that people are surprised by the fact that consumer confidence 0:15:45.480 --> 0:15:48.280 is weak, for example, and that we're all struggling with 0:15:48.320 --> 0:15:51.360 the rising inflation, but just that we just have to 0:15:51.400 --> 0:15:54.240 absorb the selling pressure that that's coming to us. And 0:15:54.320 --> 0:15:57.200 we just got a new inflation data out this morning 0:15:57.240 --> 0:16:00.160 from the Eurozone to some of the highest inflation that 0:16:00.640 --> 0:16:04.000 the nineteen countries that share the euro has seen in 0:16:04.040 --> 0:16:07.920 their history eight point six percent. What's the difficulty for 0:16:08.040 --> 0:16:10.920 Europe compared to the US when it comes to getting 0:16:11.080 --> 0:16:16.960 the reins in on these price pressures. Look, I think 0:16:17.480 --> 0:16:19.360 the problem is going to be faced by everybody in 0:16:20.240 --> 0:16:23.080 more or less the same way that policymakers who have 0:16:23.160 --> 0:16:26.680 had central banks have had a relatively easy ride for 0:16:26.720 --> 0:16:29.360 twenty years in terms of inflation. They couldn't get enough 0:16:29.400 --> 0:16:33.160 of it. Now they're facing this kind of multitude of 0:16:33.280 --> 0:16:37.000 factors driving keeping inflation high. Some of them they can't 0:16:37.040 --> 0:16:39.800 do much about. They can't control the price of gasoline. 0:16:40.280 --> 0:16:42.920 They can't control the price of jet fuel, which which 0:16:42.920 --> 0:16:46.200 we can all see being pushed up by by oil prices, 0:16:46.200 --> 0:16:50.680 but also by by the difficulties getting the rest of 0:16:50.720 --> 0:16:53.840 the of the products produced an apt and sufficient quantities 0:16:54.320 --> 0:16:56.160 um some bits. You know, we're going to see some 0:16:56.200 --> 0:17:00.240 pressure on wages. That's shortage post pandemic of all to 0:17:00.280 --> 0:17:02.400 serving at the bar of people to put your luggage 0:17:02.440 --> 0:17:05.360 into your airplane for you to go on vacation. That's 0:17:05.400 --> 0:17:07.159 going to be around, that's going to get passed on, 0:17:07.200 --> 0:17:09.719 and well, we'll see more of that that will be solved. 0:17:09.760 --> 0:17:13.080 The second kind of problem with weaker growth, higher rates 0:17:13.119 --> 0:17:15.399 will slow the economy down in Europe and in the 0:17:15.480 --> 0:17:18.040 United States. Where we'll have a dilemma is that we're 0:17:18.040 --> 0:17:21.680 seeing softer growth and higher inflation, and the central banks 0:17:21.680 --> 0:17:24.600 are facing really much harder choices and that they're not 0:17:24.600 --> 0:17:27.040 going to have a good time of it UM and 0:17:27.160 --> 0:17:31.040 I suspect though, in this occasion they're going to be resolute. 0:17:31.080 --> 0:17:34.160 So we'll we'll see rate hikes in July from from 0:17:34.160 --> 0:17:38.000 both the European Central Bank and SHIFT for that matter, 0:17:38.040 --> 0:17:40.679 the Bank of England and and the and the Federal 0:17:40.680 --> 0:17:46.000 Reserves that they'll raizor rates into what is clearly calling economy. Now. Yeah, 0:17:46.040 --> 0:17:48.679 I don't think we're hearing much anymore about the idea 0:17:48.800 --> 0:17:52.800 that these inflation pressures are transitory. But what do you 0:17:52.840 --> 0:17:55.000 think it's going to take? How long do you think 0:17:55.000 --> 0:17:57.439 we're going to be dealing with a lot of these 0:17:57.600 --> 0:18:01.440 price pressures that, as you say, are outside of central 0:18:01.440 --> 0:18:04.840 bankers control, things like the supply chain, bottlenecks, the issues 0:18:04.880 --> 0:18:08.800 with energy, with the war in Ukraine still continuing. I 0:18:08.840 --> 0:18:10.960 think those, you know, I think it's grubbing. Some of 0:18:10.960 --> 0:18:13.879 those get easier as as grows slow, So you hit 0:18:13.920 --> 0:18:16.960 the economy hard enough, we do we do stop driving 0:18:17.040 --> 0:18:19.480 or as so much pretty quickly. You know. I don't 0:18:19.480 --> 0:18:21.800 know whether I sit here in Europe and watch massive 0:18:21.880 --> 0:18:25.040 cues of people trying to get into airports which are 0:18:25.080 --> 0:18:27.920 short of UM staff to check people in and to 0:18:27.920 --> 0:18:30.480 get luggage onto planes and stuff. We we might we 0:18:30.560 --> 0:18:32.480 might use a lot of jet fuel to to go 0:18:32.520 --> 0:18:34.679 on vacation this summer because we promised the kids we 0:18:34.680 --> 0:18:37.159 were going. But we might all stay home all the 0:18:37.200 --> 0:18:40.000 way through to Christmas after that, and so you know, 0:18:40.040 --> 0:18:42.480 you could see demand come off by a lot. But 0:18:42.480 --> 0:18:45.199 but yeah, you know, we we if we take Russia 0:18:45.240 --> 0:18:46.680 out of the if we take Russia out of the 0:18:46.760 --> 0:18:50.119 equation on energy supplies to a significant degree, then then 0:18:50.160 --> 0:18:53.879 the reality will be um that uh, it's going to 0:18:53.920 --> 0:18:56.359 take a lot of economic weakness to reduce demand. In fact, 0:18:56.359 --> 0:18:59.880 it's almost impossible to reduce demand by enough to solve 0:19:00.040 --> 0:19:04.840 at and getting uh and getting more jet fuel and 0:19:04.880 --> 0:19:08.600 so on produced. Frankly, we need more investment in the industry, 0:19:08.640 --> 0:19:10.600 and we haven't seen much of that, so those will 0:19:10.600 --> 0:19:13.800 take time. What we'll probably see is that at least 0:19:13.880 --> 0:19:16.840 prices stabilize, come off a little bit, so the year 0:19:16.880 --> 0:19:21.480 over year moves and inflation start improving somewhat, but they're 0:19:21.520 --> 0:19:24.479 almost bound to settle down as a higher than they 0:19:24.600 --> 0:19:28.080 used to be pretty high plateau um sometime in the 0:19:28.119 --> 0:19:30.600 in the early part of next year. They'll steady out 0:19:30.640 --> 0:19:32.720 at the level that's still not what we like. In 0:19:32.720 --> 0:19:35.440 the central banks, I fear will feel that this is 0:19:35.480 --> 0:19:38.639 a battle they have to win and the hammer inflation lower, 0:19:38.840 --> 0:19:41.680 you know, for a fairly long time. Very tough job 0:19:41.760 --> 0:19:44.120 a head for central bankers. Thanks for this kid, great 0:19:44.160 --> 0:19:47.920 getting your thoughts. Kit Jukes, chief ex strategists at SoC 0:19:48.480 --> 0:19:54.439 General SMP futures down six points, more losses potentially in 0:19:54.520 --> 0:19:57.320 store frequity investors in the US now futures down fifty 0:19:57.359 --> 0:20:01.920 seven points. In NASTAC futures on the decline by sixteen points. 0:20:01.920 --> 0:20:09.160 This is Bloomberg Bloomberg eleven three O weather Hot one 0:20:09.200 --> 0:20:11.200 could see a light day shower storm today with highs 0:20:11.200 --> 0:20:13.800 in the low nineties. Some storms possible tomorrow and the 0:20:13.840 --> 0:20:17.040 next day, but we're expecting a sunny and mid eighties 0:20:17.160 --> 0:20:26.080 fourth of July. Right now seventy three degrees broadcasting live 0:20:26.240 --> 0:20:30.199 from the Bloomberg Interactive Broker Studio in New York. Bloomberg 0:20:30.200 --> 0:20:33.360 E Living Freedom to Washington, d C, Bloomberg ninety nine 0:20:33.400 --> 0:20:36.920 one to Boston, Bloomberg one oh six one to San Francisco, 0:20:37.000 --> 0:20:40.200 Bloomberg nine sixty to the Country, Sirius XM to the 0:20:40.280 --> 0:20:43.440 one nineteen and around the Globe, the Bloomberg Business APT 0:20:43.560 --> 0:20:53.080 and Bloomberg Radio dot Com. This is Bloomberg Daybreak. It's 0:20:53.080 --> 0:20:55.439 five thirty on Wall Street. Good morning. I'm Nathan Hager 0:20:55.680 --> 0:20:58.680 and I'm Karen Moscow here just about four hours away 0:20:58.720 --> 0:21:00.639 from the open of US trade. Let's get you have 0:21:00.680 --> 0:21:02.080 to date in the news you need to know at 0:21:02.080 --> 0:21:05.280 this hour and not another bout of risk. Aversion is 0:21:05.359 --> 0:21:08.560 rippling across markets this morning, sending US futures and treasury 0:21:08.640 --> 0:21:12.000 yields and lower the SNP five heads worst first half 0:21:12.040 --> 0:21:15.240 since nineteen seventy as inflation and fears of a recession 0:21:15.320 --> 0:21:19.440 take hold. But Brent Shooty, chief investment officer at Northwestern Mutual, 0:21:19.760 --> 0:21:22.480 has a positive outlook for the second half. I think 0:21:22.480 --> 0:21:25.919 the big risk still is um certainly what's happening in 0:21:25.960 --> 0:21:29.080 Russian Ukraine and energy prices and how long those stay 0:21:29.359 --> 0:21:31.680 where they're at, and are we, you know, typically are 0:21:31.680 --> 0:21:33.320 we going to be in more of an energy shock 0:21:33.400 --> 0:21:35.439 for some period of time. That certainly has how to 0:21:35.480 --> 0:21:38.000 staying power on inflation so far, but I think you're 0:21:38.000 --> 0:21:40.919 starting to see everything else kind of depreciate around it, 0:21:40.920 --> 0:21:42.520 which I think is a good news for inflation. But 0:21:42.560 --> 0:21:44.720 certainly that is still one of the bigger risk that's 0:21:44.720 --> 0:21:48.320 out there. Brent shooting with Northwestern Mutual believes the biggest 0:21:48.359 --> 0:21:51.040 risk to markets right now is rising energy prices and 0:21:51.080 --> 0:21:53.920 the war in Ukraine. Well oils coming off its first 0:21:53.960 --> 0:21:57.479 monthly declined since November this morning, Karen, Lower consumer spending 0:21:57.480 --> 0:22:00.119 in the US and fears of recession did push crude down, 0:22:00.160 --> 0:22:03.280 but checking prices now, nimex cruds higher by one point 0:22:03.320 --> 0:22:06.240