Speaker 1: From the Bloomberg Interactive Burgers Studios. This is Bloomberg day
Speaker 1: Break for Tuesday, June twentieth.
Speaker 2: Coming up today, Secretary of State Anthony B. Lincoln comes
Speaker 2: away from China with a promise to keep Talking Wall straight.
Speaker 1: Awaits key congressional testimony from FED chair J.
Speaker 3: Powell.
Speaker 2: A surprise management shake up at Ali Baba.
Speaker 1: And UBS Space is more fines tied to its takeover
Speaker 1: of Credit Suite.
Speaker 4: Search continues for tourists sub at in keep the Titanic
Speaker 4: recorge site, plus of violence and deadly weather. Weekend in
Speaker 4: the South. I'm Michael Barr. More ahead, I'm.
Speaker 5: John Stasharan Sports and eleven to one rump for the
Speaker 5: Mets in Houston, the slumping Yankees home tonight to play Seattle.
Speaker 6: That's all straight Ahead on Bloomberg day Break, the business
Speaker 6: news you need to starn your day in just one
Speaker 6: fifteen minute podcast each morning on Apples, Spotify, the Bloomberg
Speaker 6: Business app and everywhere you get your podcasts.
Speaker 2: Good morning, I'm Nathan.
Speaker 1: Hager and I'm Karen Moscow. Here are the stories we're
Speaker 1: following today.
Speaker 2: We begin with apparent improvement in relations between the US
Speaker 2: and China. Secretary of State Anthony blinkn has wrapped up
Speaker 2: his trip to Beijing in both sides or saying the
Speaker 2: talks were successful, but it's Bloomberg said, Baxter reports major
Speaker 2: differences still remain.
Speaker 7: The dialogue went well enough that Blincoln did meet with
Speaker 7: President Shi Jimping, so communication lanes are more open, but
Speaker 7: there remain differences and friction. Blincoln saying, evening the economic
Speaker 7: playing field.
Speaker 2: Defending against harmful trade practices, and protecting our critical technologies
Speaker 2: so that they aren't used against US.
Speaker 7: And she through a translator, putting the onus on the
Speaker 7: US to improve things.
Speaker 2: I hope that through this visit, mister Secretary, you will
Speaker 2: make more positive contributions to stabilizing China US relations.
Speaker 7: She admonished Blnkin not to interfere with China's internal affairs.
Speaker 7: Regarding Taiwan, Blincoln said, the US reserves are right to
Speaker 7: defend Taiwan on the case of an attack. In San Francisco,
Speaker 7: I'm at Baxter Bloomberg day break, All.
Speaker 8: Right, thank you well.
Speaker 1: China's foreign ministry is describing President She's meeting with Blincoln
Speaker 1: as a courtesy. We get more from Bloomberg, Steven Engel
Speaker 1: and Hong Kong.
Speaker 9: The meeting that She din Ping gave to Blincoln is
Speaker 9: a good sign. He didn't have to do it, and
Speaker 9: he wouldn't have done it on Chinese soil if the
Speaker 9: tone was bad. So that's how I lay out the
Speaker 9: assessment of it. No deliverables other than small agreements perhaps
Speaker 9: on visas and flights and the like, not any specifics,
Speaker 9: but the big issues still remain.
Speaker 1: Still Bloomberg Steven Engeler reports both sides agreed to keep talking.
Speaker 1: Chinese Foreign Minister Chen Goong plans to visit Washington in
Speaker 1: the coming months.
Speaker 2: In other political news this morning, Karen former President Donald
Speaker 2: Trump is speaking out again about the federal charges against him.
Speaker 2: In a wide ranging interview with Fox News, the former
Speaker 2: president said he did not return hundreds of classified documents
Speaker 2: to the National Archives because he was too busy. Morris
Speaker 2: has more from our Bloomberg ninety nine one newsroom in Washington.
Speaker 8: Former President Donald Trump tells Fox that at the National
Speaker 8: Archives wanted the documents return, they only had to ask.
Speaker 10: Please, please please, could we have it back?
Speaker 8: And while the National Archives did request the return of
Speaker 8: the documents in the form of a subpoena, Trump says
Speaker 8: he's been too busy to remove personal items from boxes
Speaker 8: packed at the White House.
Speaker 6: Before I send boxes over, I have to take all
Speaker 6: of my things out.
Speaker 11: These boxes were interspersed with all sorts of things.
Speaker 8: Trump also claimed he didn't know there were classified military
Speaker 8: plans among those documents, even though in an audio recording
Speaker 8: he can be heard describing a document that shows Joint
Speaker 8: chiefs of Staff Chairman Mark Milly want to do Invader
Speaker 8: Ron as being highly confidential, saying he can't declassify it
Speaker 8: now that he's out of office in Washington. I maymy
Speaker 8: Morris Bloomberg day break a.
Speaker 1: Right amy, thank you well. Turning to the markets, The
Speaker 1: big event this week is coming up tomorrow and Thursday,
Speaker 1: when Fed Chairman j Powell gives his semi annual report
Speaker 1: to Congress, we get a preview with Bloomberg's Michael McKee.
Speaker 3: Given his testimony comes just a week after his last
Speaker 3: news conference, Chairman Pole isn't expected to make a lot
Speaker 3: of headlines. What analysts and investors would like to hear
Speaker 3: is more guidance about when and under what conditions the
Speaker 3: Fed would raise rates again. Central bankers said last week
Speaker 3: they anticipate two more moves this year. There will also
Speaker 3: be questions about FED supervision of banks, particularly those which
Speaker 3: failed in March. Did the FED consider the impact of
Speaker 3: its rapid series of rate increases on the banks? And
Speaker 3: lawmakers will want to know what additional regulation is coming
Speaker 3: for the financial system. Michael McKee Bloomberg Daybreak.
Speaker 2: All right, Mike, thank you. Ahead of that testimony, the
Speaker 2: S and P five hundred heads into a holiday shortened
Speaker 2: training week coming off five straight weekly gains. Chris Marangi
Speaker 2: is co Chief Investment Officer at GAMCO.
Speaker 10: The market reaction has been a little bit surprising, obviously,
Speaker 10: give him a hawkish tone from the Fed. Either the
Speaker 10: market doesn't believe the Fed, they think the Fed is bluffing,
Speaker 10: or they don't care about another twenty five fifty bases
Speaker 10: point increase in rates. I think it's more The.
Speaker 2: Former GAMCOS Chris Maji notes the SMP five hundred is
Speaker 2: up more than two twenty three percent from its October low.
Speaker 1: Well back to Asia, we have more big news overnight.
Speaker 1: Apart from the Secretary of State's visit, Ali Baba is
Speaker 1: replacing Daniel Zeng as chairman of the group, and Blueberry
Speaker 1: Daybreak Asia anchor Brian Curtis has more from Hong Kong.
Speaker 11: Executive vice chair Joseph Zi becomes chairman of the board.
Speaker 11: CI owns the Brooklyn Nets and is a confidant of
Speaker 11: Ali Baba co founder Jack Maw. Eddie Wu, now chairman
Speaker 11: of the TWBAW and Team Mall divisions, takes over his CEO,
Speaker 11: the outgoing jong Ren Ali Baba as it bled market share.
Speaker 11: His shock departure comes after Baba announced a six way
Speaker 11: restructuring the ree org is an effort to gin up
Speaker 11: growth by creating standalone firms that are more nimble. Some
Speaker 11: analysts we spoke to said the changes show that Jack
Speaker 11: maw is still the spiritual leader of Ali Baba in
Speaker 11: Hong Kong. Brian Curtis Bloombergy Daybreak, Thank.
Speaker 2: You, Brian. Staying in Asia, former Nissan CEO Carlos Goon
Speaker 2: is suing the Japanese automaker over his twenty eighteen ouster
Speaker 2: and arrest. Gon is seeking more than a billion dollars
Speaker 2: from Nissan and connected individuals for what he calls deep
Speaker 2: damage to his finances and reputation. The former auto exec
Speaker 2: filest claims in Lebanon, where he's lived since his escape
Speaker 2: from Japan in late twenty nineteen to flee trial.
Speaker 1: Well in Europe, Nathan shares a UBS or down almost
Speaker 1: one percent. Bloomberg News has learned the Swiss bank is
Speaker 1: facing one hundreds of millions of dollars in fines. Time
Speaker 1: to credit sweeze dealings with Archie Ghost Capital, UBS has
Speaker 1: inherited a long list of unresolved cases following the completion
Speaker 1: of its emergency takeover of Credit Suisse.
Speaker 2: Time now to take a look at some of the
Speaker 2: other stories making news in New York and around the world,
Speaker 2: including a dramatic situation in the Atlantic. Here's Michael bar
Speaker 2: Good morning, Michael.
Speaker 4: Good morning, Nathan. A desperate search continues about four hundred
Speaker 4: and thirty five miles south of Saint John's, Newfoundland, as
Speaker 4: the Titanic wreckage site submarine that takes scientists and tourists
Speaker 4: to see the wreck went missing Sunday. Five people are
Speaker 4: on board the Titanic lies at the bottom of the
Speaker 4: thirteen thousand feet down. Coastguard Rear Admiral John Maugert.
Speaker 12: The use of saunar, buies and sonar on the ship
Speaker 12: that's out there to listen for any sounds that we
Speaker 12: can detect in the water column.
Speaker 4: Admiral John Magers says there is enough there to survive
Speaker 4: for just ninety six hours. Gun violence March Juneteenth celebrations
Speaker 4: in several cities. Sixteens were shot in Milwaukee. Police say
Speaker 4: it started as a fight between a group of females.
Speaker 4: Across Chicago, police say at least ten people were killed
Speaker 4: and sixty more injured in shootings. Mass shootings were also
Speaker 4: reported in San Francisco, Baltimore, and Philadelphia. Several tornadoes touched
Speaker 4: down in Mississippi yesterday, leaving at least one person dead
Speaker 4: and more than two dozen herd Officials in Moss Point
Speaker 4: say hundreds of buildings were damaged or destroyed. Mayor Billy Knight.
Speaker 13: Oh jim Nasium is at the high school is heavily damaged,
Speaker 13: and the administration Angy School District's destroyed. The church run
Speaker 13: across the street from given if the roof is off.
Speaker 13: The houses and other businesses in that ariial main street
Speaker 13: perim well damage as well.
Speaker 4: The Mississippi Emergency Management Agency says more than forty nine
Speaker 4: hundred homes in the central part of the state are
Speaker 4: without power. Singer b. B. Rexa was injured after a
Speaker 4: cell phone was thrown from the audience and struck her
Speaker 4: in the face during a concert in Manhattan. It happened
Speaker 4: at the rooftop at Pier seventeen in Lower Manhattan over
Speaker 4: the long holiday weekend. During her last song in the set.
Speaker 4: The phone came in from the crowd, striking near her
Speaker 4: left eye. Rexa dropped to her knees and helped buy
Speaker 4: security off the stage. She was taken to a hospital
Speaker 4: and is set to receive three stitches along with a
Speaker 4: black eye. Police in Manalapan, New Jersey, say twenty seven
Speaker 4: year old Nicholas Malvagna was arrested in charge with a
Speaker 4: salt Global News twenty four hours a day, powered by
Speaker 4: more been twenty seven hundred journalist natilists over one hundred
Speaker 4: and twenty countries. I'm Michael barn This is Bloomberg, Nathan.
Speaker 2: Thanks Michael, time now for the Bloomberg Sports up Day.
Speaker 2: Good morning, John Stan Schewer.
Speaker 4: Good morning, Nathan.
Speaker 5: The Mets went to Houston having lost eleven of their
Speaker 5: last fourteen games and only three National League teams having
Speaker 5: a worst record, and they had to face the Astros,
Speaker 5: defending world champs. Although this season Houston's in just third
Speaker 5: place in the als. Then the Mets crushed them eleven
Speaker 5: to one a five run third inning with home runs
Speaker 5: by Daniel vogelback in Francisco Lindor, and the Mets for
Speaker 5: good measure, tacked on five more in the ninth. Max Scherzer,
Speaker 5: in his previous two starts, had given up eleven runs
Speaker 5: and eighteen hits. This time he gave up one run
Speaker 5: only four hits. He went eight innings for the first
Speaker 5: time as a Met. It's Justin Verlander tonight against his
Speaker 5: old team. Verlander last night got his World Series ring
Speaker 5: at the stadium. Tonight will be Garrett Cole against Seattle's
Speaker 5: George Kirby, the Westchester native who three weeks ago hurled
Speaker 5: eight scoreless innings against the Yanks, who are pretty much
Speaker 5: not scoring against anyone these days. Their manager is Aaron Boom.
Speaker 14: The most part, we've been playing pretty well. We just
Speaker 14: haven't scored a lot, and we find ourselves on the
Speaker 14: losing side of things. So we got a you know,
Speaker 14: the biggest thing right now is just collectively offensively, we
Speaker 14: gotta you know, we got to find a way and
Speaker 14: and and kind of turn the page and know that, yeah,
Speaker 14: this is a little bit of a tough stretch, but
Speaker 14: can't all do it by yourself.
Speaker 5: Thanks Just four and eight since the Aaron Judge toe injury.
Speaker 5: NBA news with the Draft approaching Thursday, the big trade
Speaker 5: Bradley Beale for Chris Paul Bild joining two other big
Speaker 5: scores Kevin Rant, Devin Booker and Phoenix. Paul for now
Speaker 5: is with Washington, but he could be moved again to
Speaker 5: be bought out. Said he found out about the trade
Speaker 5: in a text from his son, Draymond Green. Eleven seasons
Speaker 5: with the Golden State, winner of four championships, he opted out.
Speaker 5: Have we an unrestricted free agent. The Warriors say they
Speaker 5: want to keep Green, He says he wants to stay.
Speaker 2: John Stashing Bloomberg Sports.
Speaker 6: From coast to coast, from New York to Francisco.
Speaker 4: Boston to Washington, DC.
Speaker 6: Nationwide on Syrias Exam, the Bloomberg Business app, and Bloomberg
Speaker 6: dot Com.
Speaker 2: This is Bloomberg Daybreak. Good morning, I'm Nathan Hager. Stocks
Speaker 2: are headed into this holiday shortened trading week on a
Speaker 2: five week winning streak for the S and P five hundred,
Speaker 2: but this second quarter rally could be running into some
Speaker 2: resistance from economic headwinds and signs the market is getting overbought.
Speaker 2: But let's get some more analysis. Now we're joined by
Speaker 2: Dennis Gartman, the chairman of the University of Akron Endowment
Speaker 2: Investment Committee and the former publisher of the Gartman Letter.
Speaker 2: Dennis got to ask you, do you think this market's
Speaker 2: getting overbought?
Speaker 15: Just a matter of how seriously overbought it that it
Speaker 15: has become an a is. I hate to bring up
Speaker 15: a another group, but then serin Greed index has risen
Speaker 15: to eighty two, which is as egregiously overbought as I
Speaker 15: have seen it in the past ten years. And when
Speaker 15: you get to anything over eighty on the CNN Fair
Speaker 15: and Greed indexes seriously extended market, You've got The market
Speaker 15: has what we commonly said in the last several months,
Speaker 15: bad breadth. The number of stocks that are down for
Speaker 15: the year is substantively higher than the number of stocks
Speaker 15: that are up for the year, and only seven or
Speaker 15: ten of the stocks on the S and P five
Speaker 15: hundred have accounted for all of the gain thus far.
Speaker 15: So yes, the market is egregiously, preposterously, seriously, almost comically overbought,
Speaker 15: and do for correction. But I've said that for the
Speaker 15: past three weeks or four weeks or so. So I've
Speaker 15: been wrong for the past month, sadly wrong. But I'm
Speaker 15: not going to buy the market up here. If anything,
Speaker 15: I'm going to be slightly not short, or certainly if
Speaker 15: you're egregiously long at this point, getting less long, I
Speaker 15: think is a reasonable and viable and proper course of
Speaker 15: action to take.
Speaker 2: Well, what do you think has fueled the rally at
Speaker 2: this point and what would it take to get to
Speaker 2: that correction that you have been forecasting for the past
Speaker 2: few weeks.
Speaker 15: Here, the FET has been less tight then they said
Speaker 15: it would be. They were supposed to be taking ninety
Speaker 15: five billion dollars worth of treasury securities out of the
Speaker 15: market out of its balance sheet over the course of
Speaker 15: the past several months, and it's only taking about sixty
Speaker 15: five billion out. That's I think the reason why we've
Speaker 15: had a stronger rally, plus the fact that the Fed
Speaker 15: has been less stringent as far as rate the level
Speaker 15: of the overnight Fed funds rate for the course of
Speaker 15: the past several months. We're going to get another increase
Speaker 15: in the Fed funds rate again when the Fed meets
Speaker 15: in July, but that probably shall be the end of
Speaker 15: it for the long period of time. But anybody who
Speaker 15: expects to see the THAD begin to ease monetary policy that,
Speaker 15: anybody who expects to see the THEAED begin to allow
Speaker 15: the overnight deed funds rate to decline in the next
Speaker 15: six months is probably wrong with The Fed is probably
Speaker 15: going to be less amenable to any cut in the
Speaker 15: overnight Fed funds rate until at least twenty twenty four,
Speaker 15: maybe till quite very late in twenty twenty four before
Speaker 15: we see that. So you've had, I think a very
Speaker 15: small handful of stocks that are driven the stock market higher,
Speaker 15: and I think that's coming to an end. So the
Speaker 15: CNN there and greed indext at eighty two is as
Speaker 15: egregiously overbought as we have seen the market in several years.
Speaker 2: It's interesting, Dennis, that you think that one more rate
Speaker 2: hike could be one and done for the FED. What
Speaker 2: makes you say that, given that we did hear from
Speaker 2: Chairman Powell last week the possibility that we could get
Speaker 2: another couple of rate hikes before they head into a
Speaker 2: long term pause mode.
Speaker 15: Well, his comments and comments from mister Waller and comments
Speaker 15: from the President of the Federal Reserve Bank of Richmond
Speaker 15: would indicate that they could get two more rate increases
Speaker 15: before they're done. What's the difference between one or two?
Speaker 15: To be quite honest, the fact that we've gotten about
Speaker 15: five percent is from zero over the course of the
Speaker 15: past two years. If you miss it by one by
Speaker 15: one more, one more increase, you you've done a pretty
Speaker 15: good job. And when they when the SAD began the
Speaker 15: process of raising the overnight Fed funds rate two years ago,
Speaker 15: I made the statement then that they were going to
Speaker 15: take rates far farther and for a far longer period
Speaker 15: of time than anybody had anticipated, and actually said that
Speaker 15: we probably get close to five percent before it was done.
Speaker 15: And I've been right for the past two years on that.
Speaker 15: So if we if we if I miss it by
Speaker 15: one more cut or one more increase, I think they'll
Speaker 15: get one. If they get two. That my miss has
Speaker 15: been relatively minor at that point. So I'm not too
Speaker 15: certain that Powell will say much more this week when
Speaker 15: he appears before Congress. He's going to reiterate the fact
Speaker 15: that they're going to they're sticking to their two percent
Speaker 15: target as far as the inflation rate is concerned. So
Speaker 15: we'll let's just say that we've seen the vast majority
Speaker 15: of the rate increases. Whether we get one or two
Speaker 15: is really quite inconsequential as far as I'm concerned.
Speaker 2: Just thirty seconds left, Dennis, what's your call for recession risk?
Speaker 15: I thought we've been in recession for a while. It's
Speaker 15: going to be if we we had. The NBER has
Speaker 15: not made it statement yet. I think we'll look back
Speaker 15: and realize that in real terms, we were probably in
Speaker 15: recession for the past six months. I think we're going
Speaker 15: to be in a We'll have toway for the NBER
Speaker 15: to make it statement later later this year or early
Speaker 15: next year, and they always are six months to nine
Speaker 15: months later in making the announcements. So I think we're
Speaker 15: going to be in recession. And if here depends on
Speaker 15: which industry you're in. If you're in real estate, there's
Speaker 15: no question you're in a very serious recession already.
Speaker 16: This is Bloomberg Day Break Today, your morning brief on
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Speaker 2: I'm Nathan Hager.
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