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Speaker 1: From the Bloomberg Interactive Burgers Studios. This is Bloomberg day

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Speaker 1: Break for Tuesday, June twentieth.

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Speaker 2: Coming up today, Secretary of State Anthony B. Lincoln comes

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Speaker 2: away from China with a promise to keep Talking Wall straight.

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Speaker 1: Awaits key congressional testimony from FED chair J.

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Speaker 3: Powell.

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Speaker 2: A surprise management shake up at Ali Baba.

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Speaker 1: And UBS Space is more fines tied to its takeover

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Speaker 1: of Credit Suite.

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Speaker 4: Search continues for tourists sub at in keep the Titanic

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Speaker 4: recorge site, plus of violence and deadly weather. Weekend in

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Speaker 4: the South. I'm Michael Barr. More ahead, I'm.

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Speaker 5: John Stasharan Sports and eleven to one rump for the

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Speaker 5: Mets in Houston, the slumping Yankees home tonight to play Seattle.

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Speaker 6: That's all straight Ahead on Bloomberg day Break, the business

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Speaker 6: news you need to starn your day in just one

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Speaker 6: fifteen minute podcast each morning on Apples, Spotify, the Bloomberg

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Speaker 6: Business app and everywhere you get your podcasts.

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Speaker 2: Good morning, I'm Nathan.

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Speaker 1: Hager and I'm Karen Moscow. Here are the stories we're

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Speaker 1: following today.

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Speaker 2: We begin with apparent improvement in relations between the US

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Speaker 2: and China. Secretary of State Anthony blinkn has wrapped up

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Speaker 2: his trip to Beijing in both sides or saying the

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Speaker 2: talks were successful, but it's Bloomberg said, Baxter reports major

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Speaker 2: differences still remain.

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Speaker 7: The dialogue went well enough that Blincoln did meet with

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Speaker 7: President Shi Jimping, so communication lanes are more open, but

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Speaker 7: there remain differences and friction. Blincoln saying, evening the economic

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Speaker 7: playing field.

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Speaker 2: Defending against harmful trade practices, and protecting our critical technologies

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Speaker 2: so that they aren't used against US.

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Speaker 7: And she through a translator, putting the onus on the

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Speaker 7: US to improve things.

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Speaker 2: I hope that through this visit, mister Secretary, you will

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Speaker 2: make more positive contributions to stabilizing China US relations.

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Speaker 7: She admonished Blnkin not to interfere with China's internal affairs.

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Speaker 7: Regarding Taiwan, Blincoln said, the US reserves are right to

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Speaker 7: defend Taiwan on the case of an attack. In San Francisco,

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Speaker 7: I'm at Baxter Bloomberg day break, All.

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Speaker 8: Right, thank you well.

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Speaker 1: China's foreign ministry is describing President She's meeting with Blincoln

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Speaker 1: as a courtesy. We get more from Bloomberg, Steven Engel

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Speaker 1: and Hong Kong.

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Speaker 9: The meeting that She din Ping gave to Blincoln is

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Speaker 9: a good sign. He didn't have to do it, and

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Speaker 9: he wouldn't have done it on Chinese soil if the

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Speaker 9: tone was bad. So that's how I lay out the

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Speaker 9: assessment of it. No deliverables other than small agreements perhaps

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Speaker 9: on visas and flights and the like, not any specifics,

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Speaker 9: but the big issues still remain.

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Speaker 1: Still Bloomberg Steven Engeler reports both sides agreed to keep talking.

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Speaker 1: Chinese Foreign Minister Chen Goong plans to visit Washington in

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Speaker 1: the coming months.

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Speaker 2: In other political news this morning, Karen former President Donald

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Speaker 2: Trump is speaking out again about the federal charges against him.

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Speaker 2: In a wide ranging interview with Fox News, the former

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Speaker 2: president said he did not return hundreds of classified documents

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Speaker 2: to the National Archives because he was too busy. Morris

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Speaker 2: has more from our Bloomberg ninety nine one newsroom in Washington.

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Speaker 8: Former President Donald Trump tells Fox that at the National

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Speaker 8: Archives wanted the documents return, they only had to ask.

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Speaker 10: Please, please please, could we have it back?

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Speaker 8: And while the National Archives did request the return of

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Speaker 8: the documents in the form of a subpoena, Trump says

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Speaker 8: he's been too busy to remove personal items from boxes

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Speaker 8: packed at the White House.

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Speaker 6: Before I send boxes over, I have to take all

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Speaker 6: of my things out.

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Speaker 11: These boxes were interspersed with all sorts of things.

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Speaker 8: Trump also claimed he didn't know there were classified military

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Speaker 8: plans among those documents, even though in an audio recording

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Speaker 8: he can be heard describing a document that shows Joint

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Speaker 8: chiefs of Staff Chairman Mark Milly want to do Invader

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Speaker 8: Ron as being highly confidential, saying he can't declassify it

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Speaker 8: now that he's out of office in Washington. I maymy

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Speaker 8: Morris Bloomberg day break a.

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Speaker 1: Right amy, thank you well. Turning to the markets, The

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Speaker 1: big event this week is coming up tomorrow and Thursday,

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Speaker 1: when Fed Chairman j Powell gives his semi annual report

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Speaker 1: to Congress, we get a preview with Bloomberg's Michael McKee.

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Speaker 3: Given his testimony comes just a week after his last

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Speaker 3: news conference, Chairman Pole isn't expected to make a lot

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Speaker 3: of headlines. What analysts and investors would like to hear

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Speaker 3: is more guidance about when and under what conditions the

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Speaker 3: Fed would raise rates again. Central bankers said last week

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Speaker 3: they anticipate two more moves this year. There will also

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Speaker 3: be questions about FED supervision of banks, particularly those which

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Speaker 3: failed in March. Did the FED consider the impact of

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Speaker 3: its rapid series of rate increases on the banks? And

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Speaker 3: lawmakers will want to know what additional regulation is coming

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Speaker 3: for the financial system. Michael McKee Bloomberg Daybreak.

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Speaker 2: All right, Mike, thank you. Ahead of that testimony, the

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Speaker 2: S and P five hundred heads into a holiday shortened

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Speaker 2: training week coming off five straight weekly gains. Chris Marangi

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Speaker 2: is co Chief Investment Officer at GAMCO.

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Speaker 10: The market reaction has been a little bit surprising, obviously,

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Speaker 10: give him a hawkish tone from the Fed. Either the

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Speaker 10: market doesn't believe the Fed, they think the Fed is bluffing,

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Speaker 10: or they don't care about another twenty five fifty bases

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Speaker 10: point increase in rates. I think it's more The.

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Speaker 2: Former GAMCOS Chris Maji notes the SMP five hundred is

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Speaker 2: up more than two twenty three percent from its October low.

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Speaker 1: Well back to Asia, we have more big news overnight.

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Speaker 1: Apart from the Secretary of State's visit, Ali Baba is

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Speaker 1: replacing Daniel Zeng as chairman of the group, and Blueberry

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Speaker 1: Daybreak Asia anchor Brian Curtis has more from Hong Kong.

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Speaker 11: Executive vice chair Joseph Zi becomes chairman of the board.

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Speaker 11: CI owns the Brooklyn Nets and is a confidant of

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Speaker 11: Ali Baba co founder Jack Maw. Eddie Wu, now chairman

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Speaker 11: of the TWBAW and Team Mall divisions, takes over his CEO,

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Speaker 11: the outgoing jong Ren Ali Baba as it bled market share.

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Speaker 11: His shock departure comes after Baba announced a six way

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Speaker 11: restructuring the ree org is an effort to gin up

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Speaker 11: growth by creating standalone firms that are more nimble. Some

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Speaker 11: analysts we spoke to said the changes show that Jack

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Speaker 11: maw is still the spiritual leader of Ali Baba in

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Speaker 11: Hong Kong. Brian Curtis Bloombergy Daybreak, Thank.

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Speaker 2: You, Brian. Staying in Asia, former Nissan CEO Carlos Goon

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Speaker 2: is suing the Japanese automaker over his twenty eighteen ouster

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Speaker 2: and arrest. Gon is seeking more than a billion dollars

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Speaker 2: from Nissan and connected individuals for what he calls deep

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Speaker 2: damage to his finances and reputation. The former auto exec

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Speaker 2: filest claims in Lebanon, where he's lived since his escape

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Speaker 2: from Japan in late twenty nineteen to flee trial.

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Speaker 1: Well in Europe, Nathan shares a UBS or down almost

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Speaker 1: one percent. Bloomberg News has learned the Swiss bank is

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Speaker 1: facing one hundreds of millions of dollars in fines. Time

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Speaker 1: to credit sweeze dealings with Archie Ghost Capital, UBS has

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Speaker 1: inherited a long list of unresolved cases following the completion

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Speaker 1: of its emergency takeover of Credit Suisse.

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Speaker 2: Time now to take a look at some of the

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Speaker 2: other stories making news in New York and around the world,

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Speaker 2: including a dramatic situation in the Atlantic. Here's Michael bar

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Speaker 2: Good morning, Michael.

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Speaker 4: Good morning, Nathan. A desperate search continues about four hundred

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Speaker 4: and thirty five miles south of Saint John's, Newfoundland, as

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Speaker 4: the Titanic wreckage site submarine that takes scientists and tourists

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Speaker 4: to see the wreck went missing Sunday. Five people are

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Speaker 4: on board the Titanic lies at the bottom of the

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Speaker 4: thirteen thousand feet down. Coastguard Rear Admiral John Maugert.

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Speaker 12: The use of saunar, buies and sonar on the ship

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Speaker 12: that's out there to listen for any sounds that we

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Speaker 12: can detect in the water column.

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Speaker 4: Admiral John Magers says there is enough there to survive

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Speaker 4: for just ninety six hours. Gun violence March Juneteenth celebrations

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Speaker 4: in several cities. Sixteens were shot in Milwaukee. Police say

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Speaker 4: it started as a fight between a group of females.

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Speaker 4: Across Chicago, police say at least ten people were killed

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Speaker 4: and sixty more injured in shootings. Mass shootings were also

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Speaker 4: reported in San Francisco, Baltimore, and Philadelphia. Several tornadoes touched

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Speaker 4: down in Mississippi yesterday, leaving at least one person dead

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Speaker 4: and more than two dozen herd Officials in Moss Point

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Speaker 4: say hundreds of buildings were damaged or destroyed. Mayor Billy Knight.

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Speaker 13: Oh jim Nasium is at the high school is heavily damaged,

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Speaker 13: and the administration Angy School District's destroyed. The church run

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Speaker 13: across the street from given if the roof is off.

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Speaker 13: The houses and other businesses in that ariial main street

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Speaker 13: perim well damage as well.

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Speaker 4: The Mississippi Emergency Management Agency says more than forty nine

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Speaker 4: hundred homes in the central part of the state are

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Speaker 4: without power. Singer b. B. Rexa was injured after a

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Speaker 4: cell phone was thrown from the audience and struck her

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Speaker 4: in the face during a concert in Manhattan. It happened

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Speaker 4: at the rooftop at Pier seventeen in Lower Manhattan over

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Speaker 4: the long holiday weekend. During her last song in the set.

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Speaker 4: The phone came in from the crowd, striking near her

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Speaker 4: left eye. Rexa dropped to her knees and helped buy

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Speaker 4: security off the stage. She was taken to a hospital

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Speaker 4: and is set to receive three stitches along with a

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Speaker 4: black eye. Police in Manalapan, New Jersey, say twenty seven

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Speaker 4: year old Nicholas Malvagna was arrested in charge with a

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Speaker 4: salt Global News twenty four hours a day, powered by

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Speaker 4: more been twenty seven hundred journalist natilists over one hundred

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Speaker 4: and twenty countries. I'm Michael barn This is Bloomberg, Nathan.

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Speaker 2: Thanks Michael, time now for the Bloomberg Sports up Day.

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Speaker 2: Good morning, John Stan Schewer.

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Speaker 4: Good morning, Nathan.

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Speaker 5: The Mets went to Houston having lost eleven of their

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Speaker 5: last fourteen games and only three National League teams having

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Speaker 5: a worst record, and they had to face the Astros,

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Speaker 5: defending world champs. Although this season Houston's in just third

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Speaker 5: place in the als. Then the Mets crushed them eleven

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Speaker 5: to one a five run third inning with home runs

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Speaker 5: by Daniel vogelback in Francisco Lindor, and the Mets for

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Speaker 5: good measure, tacked on five more in the ninth. Max Scherzer,

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Speaker 5: in his previous two starts, had given up eleven runs

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Speaker 5: and eighteen hits. This time he gave up one run

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Speaker 5: only four hits. He went eight innings for the first

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Speaker 5: time as a Met. It's Justin Verlander tonight against his

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Speaker 5: old team. Verlander last night got his World Series ring

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Speaker 5: at the stadium. Tonight will be Garrett Cole against Seattle's

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Speaker 5: George Kirby, the Westchester native who three weeks ago hurled

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Speaker 5: eight scoreless innings against the Yanks, who are pretty much

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Speaker 5: not scoring against anyone these days. Their manager is Aaron Boom.

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Speaker 14: The most part, we've been playing pretty well. We just

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Speaker 14: haven't scored a lot, and we find ourselves on the

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Speaker 14: losing side of things. So we got a you know,

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Speaker 14: the biggest thing right now is just collectively offensively, we

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Speaker 14: gotta you know, we got to find a way and

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Speaker 14: and and kind of turn the page and know that, yeah,

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Speaker 14: this is a little bit of a tough stretch, but

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Speaker 14: can't all do it by yourself.

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Speaker 5: Thanks Just four and eight since the Aaron Judge toe injury.

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Speaker 5: NBA news with the Draft approaching Thursday, the big trade

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Speaker 5: Bradley Beale for Chris Paul Bild joining two other big

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Speaker 5: scores Kevin Rant, Devin Booker and Phoenix. Paul for now

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Speaker 5: is with Washington, but he could be moved again to

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Speaker 5: be bought out. Said he found out about the trade

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Speaker 5: in a text from his son, Draymond Green. Eleven seasons

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Speaker 5: with the Golden State, winner of four championships, he opted out.

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Speaker 5: Have we an unrestricted free agent. The Warriors say they

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Speaker 5: want to keep Green, He says he wants to stay.

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Speaker 2: John Stashing Bloomberg Sports.

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Speaker 6: From coast to coast, from New York to Francisco.

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Speaker 4: Boston to Washington, DC.

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Speaker 6: Nationwide on Syrias Exam, the Bloomberg Business app, and Bloomberg

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Speaker 6: dot Com.

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Speaker 2: This is Bloomberg Daybreak. Good morning, I'm Nathan Hager. Stocks

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Speaker 2: are headed into this holiday shortened trading week on a

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Speaker 2: five week winning streak for the S and P five hundred,

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Speaker 2: but this second quarter rally could be running into some

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Speaker 2: resistance from economic headwinds and signs the market is getting overbought.

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Speaker 2: But let's get some more analysis. Now we're joined by

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Speaker 2: Dennis Gartman, the chairman of the University of Akron Endowment

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Speaker 2: Investment Committee and the former publisher of the Gartman Letter.

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Speaker 2: Dennis got to ask you, do you think this market's

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Speaker 2: getting overbought?

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Speaker 15: Just a matter of how seriously overbought it that it

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Speaker 15: has become an a is. I hate to bring up

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Speaker 15: a another group, but then serin Greed index has risen

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Speaker 15: to eighty two, which is as egregiously overbought as I

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Speaker 15: have seen it in the past ten years. And when

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Speaker 15: you get to anything over eighty on the CNN Fair

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Speaker 15: and Greed indexes seriously extended market, You've got The market

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Speaker 15: has what we commonly said in the last several months,

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Speaker 15: bad breadth. The number of stocks that are down for

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Speaker 15: the year is substantively higher than the number of stocks

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Speaker 15: that are up for the year, and only seven or

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Speaker 15: ten of the stocks on the S and P five

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Speaker 15: hundred have accounted for all of the gain thus far.

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Speaker 15: So yes, the market is egregiously, preposterously, seriously, almost comically overbought,

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Speaker 15: and do for correction. But I've said that for the

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Speaker 15: past three weeks or four weeks or so. So I've

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Speaker 15: been wrong for the past month, sadly wrong. But I'm

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Speaker 15: not going to buy the market up here. If anything,

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Speaker 15: I'm going to be slightly not short, or certainly if

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Speaker 15: you're egregiously long at this point, getting less long, I

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Speaker 15: think is a reasonable and viable and proper course of

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Speaker 15: action to take.

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Speaker 2: Well, what do you think has fueled the rally at

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Speaker 2: this point and what would it take to get to

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Speaker 2: that correction that you have been forecasting for the past

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Speaker 2: few weeks.

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Speaker 15: Here, the FET has been less tight then they said

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Speaker 15: it would be. They were supposed to be taking ninety

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Speaker 15: five billion dollars worth of treasury securities out of the

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Speaker 15: market out of its balance sheet over the course of

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Speaker 15: the past several months, and it's only taking about sixty

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Speaker 15: five billion out. That's I think the reason why we've

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Speaker 15: had a stronger rally, plus the fact that the Fed

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Speaker 15: has been less stringent as far as rate the level

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Speaker 15: of the overnight Fed funds rate for the course of

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Speaker 15: the past several months. We're going to get another increase

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Speaker 15: in the Fed funds rate again when the Fed meets

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Speaker 15: in July, but that probably shall be the end of

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Speaker 15: it for the long period of time. But anybody who

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Speaker 15: expects to see the THAD begin to ease monetary policy that,

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Speaker 15: anybody who expects to see the THEAED begin to allow

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Speaker 15: the overnight deed funds rate to decline in the next

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Speaker 15: six months is probably wrong with The Fed is probably

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Speaker 15: going to be less amenable to any cut in the

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Speaker 15: overnight Fed funds rate until at least twenty twenty four,

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Speaker 15: maybe till quite very late in twenty twenty four before

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Speaker 15: we see that. So you've had, I think a very

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Speaker 15: small handful of stocks that are driven the stock market higher,

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Speaker 15: and I think that's coming to an end. So the

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Speaker 15: CNN there and greed indext at eighty two is as

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Speaker 15: egregiously overbought as we have seen the market in several years.

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Speaker 2: It's interesting, Dennis, that you think that one more rate

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Speaker 2: hike could be one and done for the FED. What

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Speaker 2: makes you say that, given that we did hear from

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Speaker 2: Chairman Powell last week the possibility that we could get

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Speaker 2: another couple of rate hikes before they head into a

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Speaker 2: long term pause mode.

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Speaker 15: Well, his comments and comments from mister Waller and comments

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Speaker 15: from the President of the Federal Reserve Bank of Richmond

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Speaker 15: would indicate that they could get two more rate increases

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Speaker 15: before they're done. What's the difference between one or two?

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Speaker 15: To be quite honest, the fact that we've gotten about

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Speaker 15: five percent is from zero over the course of the

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Speaker 15: past two years. If you miss it by one by

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Speaker 15: one more, one more increase, you you've done a pretty

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Speaker 15: good job. And when they when the SAD began the

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Speaker 15: process of raising the overnight Fed funds rate two years ago,

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Speaker 15: I made the statement then that they were going to

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Speaker 15: take rates far farther and for a far longer period

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Speaker 15: of time than anybody had anticipated, and actually said that

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Speaker 15: we probably get close to five percent before it was done.

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Speaker 15: And I've been right for the past two years on that.

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Speaker 15: So if we if we if I miss it by

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Speaker 15: one more cut or one more increase, I think they'll

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Speaker 15: get one. If they get two. That my miss has

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Speaker 15: been relatively minor at that point. So I'm not too

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Speaker 15: certain that Powell will say much more this week when

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Speaker 15: he appears before Congress. He's going to reiterate the fact

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Speaker 15: that they're going to they're sticking to their two percent

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Speaker 15: target as far as the inflation rate is concerned. So

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Speaker 15: we'll let's just say that we've seen the vast majority

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Speaker 15: of the rate increases. Whether we get one or two

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Speaker 15: is really quite inconsequential as far as I'm concerned.

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Speaker 2: Just thirty seconds left, Dennis, what's your call for recession risk?

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Speaker 15: I thought we've been in recession for a while. It's

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Speaker 15: going to be if we we had. The NBER has

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Speaker 15: not made it statement yet. I think we'll look back

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Speaker 15: and realize that in real terms, we were probably in

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Speaker 15: recession for the past six months. I think we're going

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Speaker 15: to be in a We'll have toway for the NBER

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Speaker 15: to make it statement later later this year or early

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Speaker 15: next year, and they always are six months to nine

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Speaker 15: months later in making the announcements. So I think we're

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Speaker 15: going to be in recession. And if here depends on

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Speaker 15: which industry you're in. If you're in real estate, there's

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Speaker 15: no question you're in a very serious recession already.

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